United States v. Baltimore Co

• Decision Date: 08 March 1948
• Docket Number: No. 223,223
• Citation: 92 L.Ed. 618,68 S.Ct. 494,333 U.S. 169
• Parties: UNITED STATES et al. v. BALTIMORE & O.R. CO. et al
• Court: U.S. Supreme Court

333 U.S. 169

68 S.Ct. 494

92 L.Ed. 618

UNITED STATES et al.

v BALTIMORE & O.R. CO. et al.

No. 223.

Argued and Submitted Feb. 3, 4, 1948.

Decided March 8, 1948.

Appeal from the District Court of the United States for the Northern District of Ohio.

Mr. Frederick Bernays Wiener, of Providence, R.I., for appellants The U.S. and I.C.C.

Messrs. William N. Strack, of Chicago, Ill., and John P. Staley, of Oklahoma City, Okl., for appellant Swift & Co.

Mr. Ashley Sellers, of Washington, D.C., for appellee Cleveland Union Stockyards Co.

Mr. Robert R. Pierce, of Cleveland, Ohio, for appellees, New York Central R.R. Co., and others.

[Argument of Counsel from page 170 intentionally omitted] Mr. Justice BLACK delivered the opinion of the Court.

This case is properly here on appeal from a District Court decree enjoining enforcement of a cease and desist order of the Interstate Commerce Commission. 28 U.S.C. § 345, 28 U.S.C.A. § 345; 71 F.Supp. 499. The order enjoined required the five railroad appellees¹ to abstain from refusing to deliver interstate shipments of livestock to the sidetrack of Swift & Company's packing plant at Cleveland, Ohio, and to establish tariffs for such deliveries. Swift's sidetrack has only one connection with a railroad. That connection is with the main line of the New York Central by way of a spur track, known as 'Spur No 245,' operated by that railroad. One end of this spur owned by the New York Central connects with its main line; the other end of the spur, also owned by the railroad, connects with Swift's sidetrack and with other private sidetracks. A 1619-foot middle segment of the spur, known as 'Track 1619,' is owned by the Cleveland Union Stock Yards Company. Under the terms of a trackage agreement with Stock Yards, New York Central uses Track 1619 for deliveries to Swift's sidetrack and other private sidetracks connected with Spur No. 245. Thus all interstate railroad shipments to Swift's siding and to others similarly located can be made only over the segment of track owned by Stock Yards. Because of its interest in Track 1619, Stock Yards was made a party to the proceedings before the Commission and was included in its cease and desist order along with the railroads.² So long as Stock Yards continues to own Track 1619, delivery of livestock and other freight by New York Central to Swift and others similarly located depends upon whether and to what extent Stock Yards will grant or has granted New York Central a right to operate over Track 1619. This present case involves the question of whether the railroads, and particularly New York Central, in making deliveries of livestock over Track 1619 to Swift's sidetrack must comply with certain conditions imposed by Stock Yards in its present agreement with New York Central.

Track 1619 was constructed in 1899 on Stock Yards' property by Stock Yards and New York Central's predecessor in interest. A contemporaneous written agreement, cancellable on 60-days written notice by the railroad, gave the railroad a right to use the track for railroad purposes, provided the use did not interfere with Stock Yards' business. In 1910, after negotiations with the railroad, Swift built its sidetrack, and the railroad extended its Spur No. 245 by a track which connected Track 1619 with Swift's siding. The 1899 written trackage agreement was superseded by another in 1924. This one was cancellable by either party on 30-days written notice. It provided that the railroad should maintain the tracks at its own expense, and it granted to the railroad 'the free and uninterrupted use of any and all tracks or portions thereof belonging to the Industry and located on its land.' From 1910, when Swift's siding was constructed to 1924, and for many years thereafter, the railroad continued to deliver all kinds of commodities to Swift and to other packers likewise served only by way of Spur No. 245 and Track 1619.

In the early 1930's Stock Yards concluded that it was losing patronage and fees because of delivery of livestock to Swift at its siding. A large source of Stock Yard's income comes from fees it charges for unloading and delivering interstate shipments of livestock to pens within its yard. Stock carried over Track 1619 to Swift's siding and to other private sidings are unloaded at those sidings; as a result Stock Yards loses the fees it would receive if livestock consigned to Swift and to other packers were unloaded at the Stock Yards. With a view toward collecting unloading fees from Swift and other packers served by Spur No. 245, Stock Yards instituted negotiations with the New York Central which in 1935 resulted in a modification of their 1924 agreement. The old 1924 agreement had unconditionally granted 'Railroad, the free and uninterrupted use of any and all tracks * * *.' The 1935 modified agreement also granted New York Central 'the free and uninterrupted use,' of Stock Yard's tracks but added, 'except for competitive traffic a charge for which use shall be the subject of a separate agreement.'

After this 1935 restrictive modification Stock Yards demanded that the railroad adopt one of two courses with regard to livestock, which the parties agreed was the 'competitive traffic' the modified agreement was designed to suppress. The railroad must either stop carrying livestock over Track 1619 to Swift and other packers, or pay Stock Yards, for use of Track 1619 in carrying livestock to these packers, amounts equivalent to fees Stock Yards would have collected had the livestock consigned to them been unloaded and delivered in the yard. This amount was considered exorbitant by New York Central and the other railroads for whom New York Central performed switching charges, and they therefore refused to pay it. The result was that in 1938 the railroads ceased delivering livestock to the sidings of Swift and other packers served by Spur No. 245,³ although they haveu nder agreement with Stock Yards continued to use the spur for delivery of all other kinds of commodity shipments to these sidings. Swift demanded that the railroads deliver livestock to its siding, and in 1941 filed a complaint with the Interstate Commerce Commission upon their refusal to make deliveries.

After notice and hearing the Commission concluded that the railroad's refusal to carry livestock to Swift violated several provisions of the Interstate Commerce Act, 49 U.S.C.A. § 1 et seq. It was found to violate § 3(1) because of the discrimination against a single commodity, livestock, and because New York Central's deliveries of livestock to the sidetracks of some of Swift's nearby competitors, whose sidings were served without using Track 1619, subjected Swift to undue prejudice and gave those competitors and undue preference. The Commission also found that the failure to deliver under the circumstances shown was a violation of § 1(6) which forbids unreasonable practices affecting the manner and method of delivering freight, and also a violation of § 1(9) which requires railroads to operate switch connections with private side tracks without discrimination under such conditions as the Commission found to exist here.

The Commission's findings...