Chicago, Milwaukee, St. Paul & Pacific Railroad Co v. United States

PETITIONER: Chicago, Milwaukee, St. Paul & Pacific Railroad Co
RESPONDENT: United States
LOCATION: Mapp's Residence

DOCKET NO.: 306
DECIDED BY: Warren Court (1958-1962)
LOWER COURT:

CITATION: 366 US 745 (1961)
ARGUED: May 02, 1961
DECIDED: Jun 05, 1961

Facts of the case

Question

Media for Chicago, Milwaukee, St. Paul & Pacific Railroad Co v. United States

Audio Transcription for Oral Argument - May 02, 1961 in Chicago, Milwaukee, St. Paul & Pacific Railroad Co v. United States

Earl Warren:

Number 306, Chicago, Milwaukee, St. Paul and Pacific Railroad, Appellant, versus United States, et al., and Number 307, Ezra Taft Benson, Secretary of Agriculture, Appellant, versus United States, et al.

Mr. Merrill.

Raymond K. Merrill:

Mr. Chief Justice and may it please the Court.

This litigation represents a quest for equal treatment in the matter of freight rates, equal treatment for shippers who use the Milwaukee Railroad between Spokane and the Twin Cities, the same as received by shippers who use the Great Northern and the Northern Pacific Railroads.

It also represents a quest for equal treatment to the Milwaukee Road, the same as is given to the Great Northern and the Northern Pacific in the way of joint rates.

The Milwaukee Railroad operates from Chicago and Indiana on the east by way of Milwaukee, the Twin Cities, Spokane to Seattle and Tacoma in the Pacific Northwest.

The S. P. & S. system is composed of the Spokane Portland in Seattle Railway, the Oregon Electric Railway, the Oregon Trunk Railway.

It operates from Spokane on the east to Vancouver Washington, Portland, Oregon and other points in Southern Washington and in Oregon.

It is owned jointly by the Great Northern and the Northern Pacific.

Great Northern operates from the Twin Cities on the east to the Pacific Northwest by way of Spokane including Seattle, Tacoma, Portland and other points.

The Northern Pacific operates partly north and partly south of the Milwaukee's route from the Twin Cities by way of Spokane to Seattle, Tacoma and Portland and other points.

At Spokane, Washington, the Great Northern and the Northern Pacific have a complete line of joint rates with the S. P. & S. system.

Now, the essential feature of a joint rate is that two railroads have agreed to transport merchandise or traffic from a point on one railroad to a point on another at a combined charge lower than the sum of their two local rates.

On the other end, the S. P. & S. system will enter into only a limited line of joint rates with the Milwaukee.

On the other traffic which could be interchanged at Spokane, combination rates would apply which because they are higher than the joint rates applicable if the traffic moves over the Northern Pacific or the Great Northern effectively would prevent any large amount or any fair amount of traffic to move by the Milwaukee.

Now, a combination rate, of course, is the sum of the local rate or one carrier to the junction point was the rate of the other carrier from the junction point to destination.

As a result of this refusal by the S. P. & S. system to enter into a complete line of joint rates with the Milwaukee, the Milwaukee is short hold on 92% of the S. P. & S. system traffic, which it is now endowing at a lost and revenue to the Milwaukee of over $2.5 million per year.

Now, that works this way.

The Milwaukee, if it has traffic going to the S. P. & S. system originating in the midwest or in the east or in the south can take it as far as the Twin Cities.

And there is compelled to surrender the traffic to either the Great Northern or the Northern Pacific who then take under Spokane and give it to the S. P. & S. system.

In coming the other way, the Milwaukee is not permitted to solicit the traffic at Spokane at joint rates but must wait until the traffic reaches the Twin Cities in order to participate in the hall at the joint rates, which are sought in this case.

Now, this deprives the shippers the use of the Milwaukee's route between Spokane and the Twin Cities except for the rate penalty in many shipments and it does deprive the Milwaukee with its right to solicit this traffic.

Accordingly back in 1954, the Milwaukee filed a complaint with the Interstate Commerce Commission and it charged that the S. P. & S. system was in violation of Section 1 (4), which requires that every common carrier subject to the Act to establish reasonable through routes with other such carriers and just and reasonable rates, charges and so forth applicable thereto.

It also charged the S. P. & S. with the violation of Section 3 (1) of the Act and it shall be unlawful for any common carrier to make, give or cause any undo or unreasonable preference or advantage to any particular person, locality, or to subject any particular person, firm, locality and so forth to any undo or unreasonable precedence or advantage.

It charged the S. P. & S. with a violation of Section 3 for the interstate commerce that requires that all carriers shall not discriminate in their rates, fares and charges between connecting lines.

The Milwaukee and both the powers of the Interstate Commerce Commission under Section 15 (1) of the Interstate Commerce Act which gives the Commission the power and the duty to correct violations of the Act and invoked the power of the Commission under Section 15 (3), which requires the Commission when it finds it desirable and the public interest to establish through routes and joint rates applicable thereto.

As soon as the complaint was filed, the Northern Pacific and the Great Northern promptly intervened and claimed that under Section 15 (4), the Interstate Commerce Act, the Commission cannot require through routes by any carrier or in connection with any carrier which requires that railroad without its consent to embrace in such routes substantially less than the entire length of its railroad and of any intermediate railroad operated in conjunction and under a common management or control therewith which lies between the termini of the proposed through route.

And the Great Northern said, We are under common management or control with the S. P. & S. system and are entitled to the protection of the long-haul over our line as well as over the S. P. & S. system.

And the Northern Pacific filed their petition for intervention and they said, Well, we are entitled to the protection of 15 (4) because we are under common management or control with the S. P. & S. system, and they both then asserted the same claim each claiming to be under common management or control with the S. P. & S. system.

And the S. P. & S. system resolved that if I move by answering that they were under common management or control with both the Great Northern and the Northern Pacific.