United States v. Union Pacific Railroad Company, Civ. A. No. 1-299.
| Court | United States District Courts. 8th Circuit. United States State District Court of Southern District of Iowa |
| Writing for the Court | HICKLIN |
| Citation | 173 F. Supp. 397 |
| Parties | UNITED STATES of America, Plaintiff, v. UNION PACIFIC RAILROAD COMPANY, Defendant. |
| Docket Number | Civ. A. No. 1-299. |
| Decision Date | 03 April 1959 |
173 F. Supp. 397
UNITED STATES of America, Plaintiff,
v.
UNION PACIFIC RAILROAD COMPANY, Defendant.
Civ. A. No. 1-299.
United States District Court S. D. Iowa, W. D.
April 3, 1959.
Roy L. Stephenson, U. S. Atty., Des Moines, Iowa, John C. Stevens, Asst. U. S. Atty., Muscatine, Iowa, Daniel M. O'Donoghue, Washington, D. C., for plaintiff.
Walter R. Rouse, Elmer B. Collins, James H. Anderson, Omaha, Neb., Addison
HICKLIN, District Judge.
This cause has been submitted on motions for summary judgment filed by each of the parties, and the Court, after having considered the complaint, the answer and amendment thereto, the affidavits attached to each motion for summary judgment, certified public documents, memoranda of law submitted by both parties, and after hearing arguments of counsel, finds the facts specifically which constitute the grounds of the action of the Court upon said motions as follows:
Findings of Fact
1.
That this action is being prosecuted by the United States of America by its attorney for the Southern District of Iowa, Western Division, under the direction of the Attorney General of the United States, at the request of the Interstate Commerce Commission of the United States made by authority of the Act of Congress entitled "An Act to further regulate commerce with foreign nations and among the States", known as the "Elkins Act", as amended (49 U.S.C. §§ 41-43). That the complaint charges that the defendant has violated Section 6(7) of the Act of Congress entitled "An act to regulate commerce", as amended (49 U.S.C. § 6(7) and Section 1 of the "Elkins Act" (49 U.S.C. § 41) by extending to transit lumber shippers and wholesalers privileges and facilities in the transportation of property which are not specified in the tariffs, and by granting and giving concessions advantages and discriminations prohibited by said Acts, and said complaint prays that said alleged violations of law be permanently enjoined.
2.
That the defendant was served with process.
3.
That defendant Union Pacific Railroad Company is and at all times in question was a corporation and a common carrier engaged in interstate and foreign commerce, for compensation, and was engaged in the transportation of property for the public between points and places in the Western states of the United States and Council Bluffs, Iowa, within the Southern District of Iowa.
4.
That for a long period of time, and particularly since September 21, 1949, up to the date of the filing of the complaint, defendant, a common carrier by railroad is and has been engaged in the interstate transportation of property, including lumber, under the tariffs and concurrences in tariffs, duly filed by defendant with the Interstate Commerce Commission, which tariffs prescribed regular charges, rules, and regulations for the interstate shipment of property.
5.
In order to produce the vast quantity of lumber required during World War II, numerous small lumber mills commenced operation in the Northwest area of the United States, mainly in northern California, Oregon and Washington. These mills did not have any established commercial market, as their production was primarily for war requirements. To remain in business when the war demand ended, it was necessary for these small mills to develop a method of merchandising adaptable to their operations, and the so-called "roller" method of lumber marketing resulted. In this type of marketing, a negotiable instrument covering the shipment is turned over to wholesalers or brokers who endeavor to locate a purchaser while the shipment is moving eastward. When a sale is consummated the transfer to the buyer is accomplished through diversion or reconsignment instructions to the railroad while the shipment is enroute. Most of this lumber moves to markets east of the Missouri and Mississippi Rivers over lines and routes of several railroads which directly serve the Northwest area and which, with connecting lines, form
6.
That the defendant, Union Pacific Railroad, has the shortest physical route to said markets, and therefore is able to deliver the lumber under normal conditions in the shortest time.
7.
That the other railroads competing with defendant for said lumber business have longer physical routes in varying degrees, and that therefore the delivery of the lumber under normal conditions takes a longer time in direct proportion to the number of miles the shipment must travel to reach its destination. For example, a shipment of lumber from Portland, Oregon, to Chicago, Illinois by Union Pacific to Council Bluffs, Iowa, and then by Chicago, Milwaukee, St. Paul and Pacific Railroad, (Union Pacific direct route) would travel a distance of 2,259 miles. The same shipment, if originated by Southern Pacific Railroad would travel 2,584 miles, or 325 miles more. If the same shipment was originated by Southern Pacific Railroad and then routed through Tucumcari, New Mexico, and from there to Chicago by Chicago, Rock Island and Pacific Railroad, it would travel a distance of 3,349 miles, or 1,090 miles more than by direct Union Pacific route.
8.
That the cost of a shipment of lumber from the Northwest area of the United States to a competitive market such as Chicago, Illinois, or Council Bluffs, Iowa, is exactly the same to the shipper under published and approved tariff rates, and that this is so whether the lumber is shipped in a direct route or by a long circuitous route.
9.
That the distance from Ogden, Utah, to Council Bluffs, Iowa is 903 miles on the Union Pacific Railroad through route, and the running time of a freight train for said distance under normal conditions is from two to four days. Stated another way, a freight train will travel on the average about 300 miles per day.
10.
That following World War II, lumber shippers increasingly shipped by the longer circuitous routes in order to gain additional time in which to find a market for the lumber which was in transit. That in order to meet the competition of the longer and more time-consuming routes, and in order to attract certain lumber traffic to its lines, the defendant offered to transit wholesalers of lumber a special delayed service whereby the defendant carrier intentionally delayed shipments of lumber in transit on its lines in order that the lumber wholesaler might have additional time to find a market for such lumber. As a further part of this special service, when the transit wholesaler, by means of a diversion order requested prompt delivery of the shipment because he had made a sale thereof, the defendant carrier would remove a "transit car of lumber" from the delayed service and move it forward in defendant's regular service toward destination.
11.
That beginning September 21, 1949, defendant established "SMX" schedules for the movement of freight. "SMX" is an abbreviation meaning "slow manifest service". Said "SMX" service was a delayed service wherein the delay was effected by setting loaded cars out on various sidings along the main line, where the cars could be restored to normal service whenever the shipper found a sale.
12.
That said "SMX" service applied to the movement of both perishable and dead freight, including lumber, and all other traffic of any shipper requiring slower than normal service.
13.
That the schedule in "SMX" service between Ogden, Utah, and Council Bluffs, Iowa, was nine days, as compared to normal time of two to four days.
14.
That because of an acute car shortage then prevailing and in an effort to assist in obtaining greater utilization of the car supply then available, defendant voluntarily suspended its "SMX" schedules effective July 31, 1950.
15.
That during the ensuing fourteen months lumber shippers increasingly routed their traffic via the longer and slower routes, and defendant on October 2, 1951, in an effort to regain such traffic, modified its procedure by handling such traffic over a parallel line of its railroad via Ellis, Kansas, which is 317 miles out of the direct line haul between Ogden, Utah, and Council Bluffs, Iowa. That under said modified procedure, the transit lumber shipper seeking delayed service had only to place the code words "route via Ellis" on the bill of lading and shipping order. That such circuitous routing required two additional days over normal schedule when interchanged to connecting carriers at Kansas City, Missouri, or three additional days over normal schedule when interchanged to connecting carriers at Council Bluffs, Iowa.
16.
That because train operations over defendant's main line are more economical than over the longer route via Ellis, Kansas, the actual physical handling of traffic via Ellis was discontinued on December 12, 1953, and a so-called "lumber special" service was inaugurated for main-line operation in which the shipment proceeded on the main line, but on a schedule comparable to that which had been obtained during the physical movement via Ellis. That a shipper desiring such slow service continued to use the code words "route via Ellis", even though the shipment did not travel by that route.
17.
That thereafter, on January 6, 1954, defendant changed its so-called "lumber special" schedule to twelve days, and again, on February 15, 1954, changed said schedule to fourteen days.
18.
That the last-mentioned method of delaying shipments continued until about June 13, 1956, at which time defendant suspended its delayed service due to the issuance of the Interstate Commerce Commission's Service Order No. 910 prohibiting the intentional delay of freight shipments while in transit.
19.
That on December 7, 1956, when the temporary Service Order No. 910 was vacated, defendant reinstated its delayed service on a fourteen-day schedule between Ogden, Utah, and Council Bluffs,...
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ATCHISON, TOPEKA & SANTA FE RAILWAY CO. v. United States, Civ. A. No. KC-2415.
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