Baltimore & Ohio Railroad Company v. United States

PETITIONER: Baltimore & Ohio Railroad Company
RESPONDENT: United States
LOCATION: Samuel Spevack's Office

DOCKET NO.: 642
DECIDED BY: Warren Court (1965-1967)
LOWER COURT:

CITATION: 386 US 372 (1967)
ARGUED: Jan 09, 1967 / Jan 10, 1967
DECIDED: Mar 27, 1967

Facts of the case

Question

Media for Baltimore & Ohio Railroad Company v. United States

Audio Transcription for Oral Argument - January 10, 1967 in Baltimore & Ohio Railroad Company v. United States

Audio Transcription for Oral Argument - January 09, 1967 in Baltimore & Ohio Railroad Company v. United States

Earl Warren:

Number 642, Baltimore and Ohio Railroad Company et al., Appellants, versus United States et al.

Number 680, the Delaware and Hudson Railroad Corporation, Appellant, versus United States, et al.

Number 691, Erie Lackawanna Railroad Company, Appellant, versus United States.

Number 813, Scranton, City of Scranton versus United States et al.

Number 814, Milton J. Shapp, versus United States et al.

And Number 815, Chicago and Eastern Illinois Railway Company versus United States et al.

These cases have been consolidated for argument and six hours has been allotted for argument but we have authorized a rather abnormal number of lawyers to speak 14 in all but I must admonish you to keep track of your time because the six hours of argument will not be extended.

Mr. Trienens.

Howard J. Trienens:

Yes, Mr. Chief Justice and may it please the Court.

My name is Howard Trienens.

This is the Penn-Central merger case.

It's probably the biggest corporate merger ever.

The cases before this Court on appeals from a judgment of the District Court denying injunctive relief against an order of Interstate Commerce Commission which would permit immediate consummation of the Penn-Central merger.

I stress immediate because by the very nature of the Commission's action this case was decided by the District Court on the lawfulness of the Commission's order and on appeal, the lawfulness of the Commission's order permitting immediate consummation was necessarily before the Court even though the matter arose on applications for interlocutory injunction.

Now, basically this case arose under Section 5 (2) of the Interstate Commerce Act.

And that Act enabled the Commission to approve an exempt from the Antitrust laws, merger transactions which are found to be as conditioned by the Commission or found to be consistent with the public interest.

The problem here and the problem I will develop through these rather laborious facts is that no one can know today whether this merger transaction as conditioned is or is not consistent with the public interest.

And the reason you can't know is because you don't know the conditions.

You don't know what kind of a transaction this is yet.

The Commission has found that certain conditions are essential that the certain conditions must be attached.

They have not been found either for the long term or the short term.

Now realistically, we believe that until those conditions are found and passed upon no one can know what the future of competitive rail transportation in the East will be.

On stating the facts, the first and dominant fact is the Penn and Central today had half the railroad business in the East.

The figures are set forth in our brief and inserted in the end of our brief a series of maps showing the proposed Penn-Central system and showing the remaining roads and the question that has dominated the Commission proceedings, the question before this Court is how the other half of the East is going to live in the face of Penn-Central.

Of the hearings before the Commission, Penn and Central showed that they would create a territory-wide single line service serving all major ports, all major gateways and as a single line railroad throughout the East they would provide great operative savings and great improvements in service.

A single line service has great advantage.

Single line service saves money but it also improved service.

And the Commission relying on those improvements in service and efficiencies found at this merger was in the public interest notwithstanding the diminution of competition.

But these very same service improvements are the things that caused the problem for the other eastern roads and raised the questions of how they are going to live in the face of this Penn-Central system.

Now, following the hearings before the Commission, the examiners found that these improvements would occur.