Denver & Rio Grande Western Railroad Company v. Union Pacific Railroad Company – Oral Argument – April 23, 1956 (Part 2)

Media for Denver & Rio Grande Western Railroad Company v. Union Pacific Railroad Company

Audio Transcription for Oral Argument – April 23, 1956 (Part 1) in Denver & Rio Grande Western Railroad Company v. Union Pacific Railroad Company
Audio Transcription for Oral Argument – April 24, 1956 in Denver & Rio Grande Western Railroad Company v. Union Pacific Railroad Company

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Frank E. Holman:

A brief reference perhaps should be made which come under this litigation.

Section 1 (4) of the Interstate Commerce Act as you all know deals with the matter of reasonable rates in fares and charges and requires every common carrier to furnish transportation on reasonable request and to establish such just reasonable rates, fares and charges.

Now, 1 (5) which is somewhat complimentary to that merely declares that unjust and unreasonable charges were in part, there over prohibited, which were unlawful.

Section 1 (3) or rather 3 (1) of the Act is what we call the provision with respect to discrimination, as if we pointed out that that is discrimination as between shippers in localities, and not between carriers.

Over Section 3 (4) deals with the matter of discrimination as between carriers.

This Section, 3 (4) requires carriers to afford reasonable, proper, and equal facilities for the interchange of traffic between respective lines and connecting lines and forbids them to discriminate between their respective lines and connecting lines and rates and fares and charges.

Section 15 of the Act is sometimes said in a general way to implement these other provisions since the other provisions are merely declarations of law, 15 empowers — 15 (1) empowers the Commission to prescribe just and reasonable railroad rates, fares and charges, and so on.

And 15 (3), by way of further implementation authorizes and requires the Commission on average deem necessary and desirable in the public interest to establish through routes and joint rates, fares and charges so much with the statute or the statutory background.

You’re all, of course, familiar with definition, what had occurred to me, we might as well bring them out and then I will proceed to the factual statement as such that through route as merely an arrangement expressed or implied or established by the Commission between connecting railroads for the continuous carriage of goods from one originating point to another.

A through rate so-called, is a general term that applies in a general way to any through carriage of goods or one type of a through rate is a joint rate, which is ordinarily lower than a combination rate or a combination of locals as it’s called.

A competitive joint rate is a type of joint rate which is identical as between common points of origin and common points of destination.

That’s of some importance here if I may turn to this map which one of my associate said that succeeded in shutting my clients off from me.

For example at this point here, Portland, by the way this map is an enlargement of the map, Exhibit C, in the brief and it’s supported by the record.

The Southern Pacific, for example, will take a shipment coming down on this long route and going to St. Louis at the same competitive joint rates with the Union Pacific will take it and carry it on.

Well, the competitive rate is a rate that’s identical from an identical point of origin on a through route, to an identical point of destination.

A fuller and I think the best exposition to this mode of rates and charges and so on as found in Mr. Brandeis’ — Mr. Justice Brandies’ note, note 4 in St. Louis in Southwestern Railway versus United States, 245 U.S. at 139.

Now, as I have indicated, these appeals arise out of an order of the Interstate Commerce Commission.

All the issues stemmed from that order.

We believe that the issues maybe best clarified by propounding certain factual inquiries.

First, what was the situation, the factual situation which caused the Rio Grande to file its complaint before the Commission?

Two, what relief did that complaint seek?

Three, what relief did the Commission grant?

Four, what is the position of the parties in this Court with respect to the action of the two United States District Courts?

Now, as to the first inquiry, the situation which caused the Rio Grande to file its complaint, turning to the map, we have shown the routes of the Union Pacific, not all of them because some of them are not of any particular important, but generally, the routes of the Union Pacific in red, and the Rio Grande in green.

The Rio Grande has 2400 miles of railway, extending generally between Ogden, Utah, Denver, Colorado, and other Colorado common points, Colorado Springs, Pueblo and Trinidad.

The Union Pacific has two Eastern terminals sometimes set with the Omaha but actually counted for us and then came Pacific.

The Union Pacific would be first in the line from Omaha in the State of Wyoming from its other terminals that proceeds to Denver then up and joins the line there and comes into Ogden, Utah which is what’s called the “closed gateway” here.

It has a short — got a branch running from (Inaudible)

When it reaches Ogden, we have suggested in the brief that it has two branches of a wye.

One branch of the wye comes down south through Utah and Southern Nevada and through the Los Angeles area.

Audio Transcription for Oral Argument – April 24, 1956 in Denver & Rio Grande Western Railroad Company v. Union Pacific Railroad Company

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Frank E. Holman:

The other branch of wye goes up here to the northwest and then there is branch also to Butte, Montana.

These are the crucial points in the sense in connection with the gateway situation.

Now, at various points in the brief, there is something of a change terms.

For example, in certain places in the Commission order, this area north of Ogden was called “excluded area.”

It’s the area in which the Union Pacific declined to accord joint competitive rates coming down to Ogden, going over the Rio Grande and going south and east.

In some places, it’s called the northwest area.

In other places, it’s called the “closed door” territory.

Those terms are interchangeable.

We call it the “closed door territory”, it’s the Ogden Gateway that follow it and that area is close to the Rio Grande.

Now, Rio Grande is connected at Denver with four railroads, the Rock Island, the Burlington, Sante Fe and the Colorado Southern.

At Colorado Springs with the Burlington, Sante Fe, Colorado Southern, at (Inaudible) with the Sante Fe and the Missouri Pacific and the Colorado Southern and Trinidad with the Sante Fe and the Colorado Southern.

In other words, the Rio Grande is not a detached railroad situated by itself in the center of the continent.

It is connected up here with all the main lines from two traffics and here, it has its connection with the Western Pacific, out at Salt Lake through the coast and at Ogden with the Southern Pacific.

So that in a general way is the factual situation with respect to the location of the railroads.

That is the two main railroads that we’re talking about.

The other railroads are in black and certain routes have been designated which I’ll call to your attention in a moment.

Now, as we put it and we put it without any intention of being rhetorical, We say that this “closed door” territory in here is maintained, it’s a kind of a Union Pacific monopoly as that a kind of principality in which they undertake to say to various connecting roads whether they will entertain traffic on through routes with joint competitive rates or not.

When — since they do entertain traffic up here, generally speaking from Huntington in here with the Northern Transcontinental, they do entertain here, go over the shipment, may go over route number nine and way down here and into St. Louis at a joint competitive rates.

But it may not come down through Ogden all over the Rio Grande and going to St. Louis at a joint competitive rates or a competitive (Voice Overlap) —

(Inaudible)

Frank E. Holman:

I beg your pardon?

Is that your (Inaudible)

Oh, yes.

(Inaudible)

Frank E. Holman:

That’s exactly what I want to come to now.

Now, we’ve indicated several routes here.

Route one is the Union Pacific.

The Union Pacific, of course, from many points in this area, coming through (Inaudible) where it’s cutoff, and what breaks down in Denver, on a little shorter milage from ourselves, put it in to Kansas City.

But the second shortest route of all these routes in which they short route themselves, that that short route is the Rio Grande with reference to the first route, the Union Pacific coming through here where the shortest route is in 2167 miles to St. Louis.

Often, they don’t come by that route as the record shows.

Audio Transcription for Oral Argument – April 24, 1956 in Denver & Rio Grande Western Railroad Company v. Union Pacific Railroad Company

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Frank E. Holman:

They come down to Ogden and come through it but giving them credit for that, that route is 2232 miles from this Portland area through St. Louis or it’s 3% longer than their shortest route.

Now, the Rio Grande comes and our route is only 9% longer than the shortest of the Union Pacific.

These others range up to 45 where the shipment coming down here from North Portland coming down route number nine, through — pass up to Santa Rosa, goes to St. Louis at a competitive joint rate on a through route, but a shipment may not come down through this way and over the Rio Grande at a competitive joint rate and a through route.

So that the — without taking the turns, with all those routes, this map and it’s the same map which you have in the brief indicates this mileage of differentials and the other railroads with whom the Union Pacific was short-haul itself, but we’re not sure it’s all itself with the Rio Grande.

Earl Warren:

Do I understand, Mr. Holman, that the rate on the Southern Pacific going at Southern way from Portland to St. Louis is identical with that of the Union Pacific?

Frank E. Holman:

That’s right, yes.

Then here is another situation, I should call to your attention.

The Union Pacific accords us a through route and a joint competitive rate from the Los Angeles area through the Salt Lake and the Provo Gateways.

In other words, shippers of fruit, then cattle and livestock and so on, who want to use the Rio Grande to get into this area, have a through route and a competitive joint rate over the Rio Grande in this area, but this area they do not.

And one of our contention is that under the statute that gives a preference to these growers down in California and Nevada, if I may say so, over the shippers and growers in that area.

Now —

Stanley Reed:

Joint rate leaves the choice of route entirely with the shipper?

Frank E. Holman:

I beg your pardon?

Stanley Reed:

A joint rate leaves the choice of route entirely with the shipper?

Frank E. Holman:

Well 15 (8), Mr. Justice Reed and in our view, that somewhat designed or denied by the Union Pacific.

A shipper has a choice of a through route, only if one as in existence and he has that choice if it’s in existence even though there is no competitive joint rate, even though it’s combination of locals.

Other words, I’m coming immediately to that, shippers can and do use the Rio Grande provided they pay a higher rate.

Stanley Reed:

Oh, I understand that, but there — I — I said a joint rate.

Frank E. Holman:

Well, there are —

Stanley Reed:

If — if — it turns a — if you got what you wanted here so that you could come through, would the shipper have the choice of —

Frank E. Holman:

Oh yes.

He always has a choice.

Stanley Reed:

No — there’s no division of freight or anything like that?

Frank E. Holman:

No.

No, that’s right.

He’d have the choice.

Now then, as to the relief sought by the Rio Grande, the Rio Grande and its complaint before the Commission alleged that through routes are already in existence, as a matter of fact and a matter of law through this Ogden Gateway.

Originally, through routes and competitive joint rates were in existence when the Oregon Short Line Railway operated this line across Huntington up to Butte and the Oregon Western Railroad and Navigation operated the other.

In other words, there is no dispute in this record that in 1897 and from then on through routes existed and competitive joint rates existed over these lines that we are now talking about.

What the Union Pacific says that when they took control of those lines, beginning in 1906, they reacquired the Oregon Short Line and the Oregon Railroad and Navigation that — then they cancelled the competitive joint rates and that everybody should have known that they meant by that to cancel the competitive through routes.

Audio Transcription for Oral Argument – April 24, 1956 in Denver & Rio Grande Western Railroad Company v. Union Pacific Railroad Company

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Frank E. Holman:

We take the position fundamentally and that’s why in our brief on here, we argue first what’s called the Colorado case because that case held that the Commission erred as a matter of law in failing to hold the through routes were in existence.

Felix Frankfurter:

If that — if that is sustained in the other cases, in fact, it wraps up.

Frank E. Holman:

If their remand is broad enough, yes, Your Honor.

The Government has so stated in its — in its brief when we go along with that.

Felix Frankfurter:

Why do you add your position if — if that decree is affirmed here, then it goes back to the position under 15 (3) and 15 (4) is out?

Frank E. Holman:

15 (3) wouldn’t be out.

Felix Frankfurter:

No, no, as it goes back from the 15 (3).

Frank E. Holman:

It goes back under —

Felix Frankfurter:

And 15 (4).

Frank E. Holman:

— 15 (3) and — and these other sections, 15 (4) would be out, yes, quite right.

There is, however, and I want to directly represent my interveners, I have a kind of a double task here and I’d like to clear that up if I may.

Through routes and competitive joint rates were granted by the Commission on certain commodities under the authority they had in 15 (4).

So, it does necessarily follow as some of our interveners contend if you’ll examine their briefs does necessarily follow that they want to give up on those particular commodities, livestock for example, and have it all sent back to the Commission.

But logically, what you have suggested is correct.

Now, I want to also verify the issues by referring you to the cross-hatched map so-called in the brief because I think it’s quite important that you have both as to Colorado and the Nebraska case exactly what the Commission held.

That’s a little difficult at first or at least it was for me.

If you’ll go to Appendix C at page 135 —

Hugo L. Black:

Which brief?

Frank E. Holman:

That’s our opening buff brief, the Rio Grande opening brief, yes, page 135, Appendix C.

Now, there’s a cross-hatched map which is also a map that’s in the record and you will note that there is an area that’s cross-hatched covering parts of Eastern Colorado, Kansas, Nebraska, North Dakota, Wisconsin and running down southerly.

I never could understand quite why it projected down southerly into what might we called Rio Grande territory, but it does.

Now, in order — because they were operating under the restrictions of 15 (4), the Commission felt that there was a right under that that the Union Pacific should be protected on its long-haul, at least so far as – was possible.

So, under the Commission order now on these eight or 10 commodities that are listed, the Commission gave us through route and competitive joint rate out of this closed door territory, coming down here but not to Denver, not the Colorado Springs.

You’ll notice that little line on the cross-hatch, that Colorado going south from Denver, leaves Denver in these points in the cross-hatched territory, that’s forbidden territory to us under the Commission order.

So, that we control the short-haul ourselves.

We pick up freight here in this area within the Rio Grande territory.

We can’t ship it over our line and have it go in there under the Commission order, but we have to deliver it at Denver.

In other words, the one effect of the Commission order is that we’re compelled to short-haul ourselves on our end in order to preserve their long-haul so that the Commission order doesn’t give us competitive joint rates and the through routes to any of those Colorado common points.

Also, if you’ll note, we have to ship through this designated area and on some — to some points South and East in order to get these rates.

So, without going into that farther, I did want to call your attention to the fact that this order protects the Union Pacific under 15 (4) to the farthest extent of its long-haul, clear through on its lands to Denver, Omaha and so on except that.

Audio Transcription for Oral Argument – April 24, 1956 in Denver & Rio Grande Western Railroad Company v. Union Pacific Railroad Company

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Frank E. Holman:

Kansas City, Missouri and Omaha since they are also focal points or gateways, we’d have to go through those to get a shipment down to Springfield, Illinois so, if we have a through shipment, we can go into Omaha and on.

But we can’t operate within our own territory here, Colorado common point, we have to short-haul ourselves under this order.

Felix Frankfurter:

Did you appeal from the Commission order in the Nebraska District?

Frank E. Holman:

Not at all and we’re not appealing here.

Felix Frankfurter:

So you’re not questioning the Commission to limit — the limitations of the Commission?

Frank E. Holman:

That’s — that’s quite correct.

I was only trying to make clear —

Felix Frankfurter:

It’s not (Voice Overlap) —

Frank E. Holman:

— that the Commission did, yes.

Felix Frankfurter:

Yes, I just want to clear —

Frank E. Holman:

Yes.

— my own mind.

Felix Frankfurter:

No.

That’s quite correct.

Now then, the matter got —

William O. Douglas:

Before you leave it, Mr. Holman —

Felix Frankfurter:

Yes.

William O. Douglas:

Appendix C, I’m not sure I understand it.

Felix Frankfurter:

Well.

William O. Douglas:

Maybe if you establish the joint rates, if you — the Commission’s findings and the all through routes.

Felix Frankfurter:

Well, the Commission made no such finding as I’m going to show in a moment.

There was a failure.

There was a vote five-to-five on that question and when I come to argue the controverted issue, I’m going to point out that there was a total failure of the Commission to reach any decision upon the basic point alleged in the complaint in which all through this case has been considered the crucial question.

I don’t mind going to that right now, Your Honor.

William O. Douglas:

My question was, if the failure to describe the joint rates and the territory beginning on Appendix E to the — the absence of finding the through route.

Felix Frankfurter:

That’s correct.

And due to the Commission’s compulsion which the Colorado court held was an error in law that they could only operate under 15 (4) and its restrictions and because of those restrictions, that’s why we don’t get competitive joint rates there because it’s a restrictive statute.

Now, the Union Pacific after the Commission decision and its preferred connections assailed the Commission order by filing their suit in the United States District Court for the District of Nebraska, Omaha division claiming that the Rio Grande was entitled to no relief of any kind.

The Nebraska courts sustained the order of the Commission in part and overruled it in part.

It restricted the application of these competitive joint rates and through routes, the shipments which would be accorded in-transit privileges along the Rio Grande.

Audio Transcription for Oral Argument – April 24, 1956 in Denver & Rio Grande Western Railroad Company v. Union Pacific Railroad Company

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Felix Frankfurter:

In other words, that it was a two-shipment of potatoes to (Inaudible) and it wasn’t to be unloaded and reloaded or sorted which is one of the in-transit privileges then under the Commission order, there is no competitive joint rates and through routes.

The Omaha decision was a two-one decision and it modified the Commission order to that extent by restricting it to shipments that are to be accorded in transit privileges, and the shipper would have to know for he started where he was going to have in-transit privileges along the Rio Grande.

The Denver and Rio Grande is neutral in the Nebraska proceedings, wasn’t it?

Frank E. Holman:

Yes, essentially.

Felix Frankfurter:

I mean, you came in and then came — it went up?

Frank E. Holman:

Oh, no.

We never went up.

Felix Frankfurter:

That’s — well, I thought there was a —

Frank E. Holman:

No.

Oh, no.

Felix Frankfurter:

Was it intervened?

Frank E. Holman:

Oh, we — we answered — we stayed in, and were through that case all the way along.

Felix Frankfurter:

With Nebraska?

Frank E. Holman:

Yes.

And we reserved the right specifically.

Felix Frankfurter:

Did you ask for leave to withdraw after the meeting — never mind, (Voice Overlap).

Frank E. Holman:

No, no, no, not at all.

No, we never withdrew at all.

We’re quite active in it.

Harold Burton:

When the Nebraska court limited the order to in-transit privileges, did that actually cut out some of the through routes, that — I mean, some of the joint rates that had been allowed?

Frank E. Holman:

Oh, yes.

Because the Commission allowed us competitive joint rates, only limited by commodities and territory.

Harold Burton:

And — and —

Frank E. Holman:

The Commission or the Nebraska court restricted that by allowing competitive joint rates only on shipment that have in-transit privileges on the Rio Grande, so that the —

Harold Burton:

The same commodities but only — only —

Frank E. Holman:

Only if in-transit.

Harold Burton:

Yes.

Frank E. Holman:

So, the enigma — that decision is, if I may pursue that inquiry, is — that if — if a shipper here wants to ship on the through route where the railroad isn’t put to the expense of permitting, unloading and so on, he has to pay a higher rate (Inaudible) on Oklahoma City and if he is going to put the railroad to in-transit privileges.

Felix Frankfurter:

Mr. Holman, does your — clear up my own confusion, I’m looking at page 103 of the Nebraska record tell me what the order along the Denver and Rio Grande as to withdrawing petition of intervention means, page 103.

Frank E. Holman:

Well, Mr. Quirk, you handle that, will you answer that please?

Audio Transcription for Oral Argument – April 24, 1956 in Denver & Rio Grande Western Railroad Company v. Union Pacific Railroad Company

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Frank E. Holman:

I was not aware that there was any such withdrawal of petition.

Felix Frankfurter:

It’s the same as the immaterial, I just —

Frank E. Holman:

Yes.

Felix Frankfurter:

(Voice Overlap) —

Frank E. Holman:

Well, I was not aware of it, Your Honor.

May we answer that fact —

Felix Frankfurter:

(Inaudible)

Frank E. Holman:

— because Mr. Quirk handled that case?

Oh yes, the Government helps me out.

It shows that we filed an amended petition to intervene.

And there was an order allowing that.

Now, thank you.

Felix Frankfurter:

(Inaudible)

Frank E. Holman:

Yes.

Now, the position of the parties then comes to this.

The Union Pacific and its interveners contend that the Colorado court should be reversed, the Nebraska court should be reversed, the Commissioner order should be reversed in its entirety and the Rio Grande should be accorded no relief whatever.

The United States and the Interstate Commerce Commission, but not the Secretary of Agriculture, Secretary of Agriculture, the record will show was quite active in favoring the opening up of this closed door territory and testified among other things that it’s in our brief and he didn’t think it would lose the Union Pacific any business at all.

It would develop the territory and open it up to shipment.

But at least the Interstate Commerce Commission and United States contends that the Colorado court should be reversed.

The Government is on our side with respect to the Nebraska decision and contends all including the United States, the Interstate Commerce Commission and the Secretary of Agriculture contend that the Nebraska decision modifying Interstate Commerce Commission order should be reversed and the Commission order of January 12th, 1953 should be restored.

The Rio Grande and its interveners contend that the Colorado decision should be affirmed and the case remanded to the Commission with instructions that through routes via the Ogden Gateway are in existence and that the Rio Grande is entitled to have the case reconsidered and decided by the Commission freed of the limitations of 15 (4).

We believe there’s a part of such remand, the Nebraska decision should be reversed from the Commission’s order set aside insofar as it denies relief.

There might be no need of setting it aside or again responding to Mr. Justice Frankfurter as to the affirmative relief that’s been granted because we have through routes now and competitive joint rates on eight commodities.

We — we don’t have it on grain and lumber and many other things.

Now, as to the argument of the controverted issues, first of all, as I have indicated, the Rio Grande complaint alleged the existence of through routes, alleged they were in existence during the days of the Ogden Short Line Railroad and the Ogden Railroad and Navigation Company.

That matter was considered a great length for the Commission and it ended up by division of opinion of five-to-five between the members of the Commission as to the existence of through routes.

The Colorado court proceeded on the —

Harold Burton:

When you — when you used the term through route, you also mean joint rate?

Frank E. Holman:

No, sir.

No, it may be a —

Audio Transcription for Oral Argument – April 24, 1956 in Denver & Rio Grande Western Railroad Company v. Union Pacific Railroad Company

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Harold Burton:

Might be a combination —

Frank E. Holman:

— a competitive joint rate.

Harold Burton:

Might be a combination of all the local rates.

Frank E. Holman:

That’s right.

Oh, yes.

We have — we have the —

Harold Burton:

Well, you’re — aren’t you then bound to always have through routes?

Frank E. Holman:

Well, no, I don’t think so because —

Harold Burton:

If you — if you want the ship, pay the — the local rates right through?

Frank E. Holman:

No, because they can under 15 (8) as we believe and under 15 (7), they can publish in their tariffs if they wish to do so that through routes have been discontinued and it’s quite important that the public and the carriers, and everybody should know whether there has been a discontinuance of through routes.

They’re discontinued and put in operation most everyday.

Mr. Hickey brought me a whole series of sheets at my hotel room the other day which show and they’re in this record too, which show that sometimes they cancel the rate and leave the through route.

And we suggest that that’s what the Union Pacific did here because through shipments did move over as the evidence shows.

And in addition to that, the — the through route was used even at the higher rate.

The Government has suggested one point that that use was inadvertent and unintentional.

Well, we have shown in our brief for several instances where people paid the higher rate.

Mr. Barry, here in his brief shows where a sheep grower paid $60 to $70 dollars more a car, I think it is, because he thought he could get better feeding privileges along the Rio Grande, which are these stock people up in this area.

They — they have plenty car loads of stock.

They may want to send one or send 10 car loads along the Union Pacific and 10 along the Rio Grande that these people in Wyoming, know that they’ve got to send all their stocks through Wyoming, the price of hay goes up and things change.

But if you get competition and sometimes even at the higher rate, as is shown in Mr. Barry’s brief, they’ve shipped out of this closed-door territory in order to get certain economic advantages along the Rio Grande.

In order to close their through route, what is a carrier has to do that’s (Inaudible) —

Frank E. Holman:

Well, I’m coming to that right now.

Here is what it has to do.

It has to make it perfectly clear that its intention, as shown by its tariff, when it changes its rate is to close the through route and that is the practice.

The — it’s been done over and over again and the Union Pacific has merely claimed that the cancellation of the — the competitive joint rate meant the cancellation of the through route.

We point out in our brief that what they’ve done here is use these as standby through routes, that when the Union Pacific gets in the storm conditions as said here, and wants the through routes.

It doesn’t go to Interstate Commerce Commission and get a temporary through route.

It has drastic routes, the through routes over our land here.

The evidence shows a great many shipments that have been made so that this is a standby through routes and there is no such animal so to speak, in the law.

Well, you always had the physical through route.

Audio Transcription for Oral Argument – April 24, 1956 in Denver & Rio Grande Western Railroad Company v. Union Pacific Railroad Company

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You can’t pair up the tracks.

Frank E. Holman:

That’s right.

Well, what do you have to do?

Do you have to refuse to accept the shipment or a shipment is tendered by — supposing your through rates are cancelled, joint rates are cancelled, the shipper wants to route — paying the combined higher rate over the through route, under your — under your definition of closing does the — anything short of refusing to take that shipments suffice?

Frank E. Holman:

It must refuse to take it.

Must refuse to take it?

Frank E. Holman:

Yes.

It doesn’t have to take it, yes.

It doesn’t have to take.

And if he does take it, why that’s an indication that (Voice Overlap) —

Frank E. Holman:

That’s right.

Well, that’s — that’s covered at considerable length that Mr. Hickey’s brief at pages 9 and 10.

You’d turn to Mr. Hickey’s brief at page 9 and 10.

You’ll find that whole problem discussed.

Our — our resume of it is merely this that if when a railroad cancels competitive joint rates over through routes at which is also to close the through routes, it could do so legally and factually by simply publishing in its tariffs that it will not thereafter issue a through bill of lading.

It can issue a local bill of lading or accept shipments which are routed by shippers over the previous existing through routes.

The Union Pacific failed to take this significant and essential step for effectually closing the through routes over the Rio Grande via the Ogden Gateway and the — yes, that’s the brief, Mr. Hickey’s brief, 9 and 10, that’s in here pages 9 and 10.

So, we — to summarize, take the position that the Colorado court was correct when it found on the undisputed evidence in the case that these through routes have never been cancelled here.

Well, that would be enough if that is the fact, but also, if shippers had been using them as through routes.

That’s another established one of through routes.

I haven’t time for the moment to refer to that evidence, what — the evidence is in the brief as to the actual use of that.

Now, so much for that, the next point in the Colorado decision is the judgment to the effect that the error of the Commission in this regard or assuming that it’s — it’s a legal error, not administrative finding.

The evidence was undisputed, counsel on cross-examination by Chairman Aldrich submitted the through routes were in existence but they merely have to pay a higher price.

The chief traffic witness of the Union Pacific, Mr. (Inaudible) admits that through routes were in existence, but they had to pay a higher price.

But then they said a through route maybe closed commercially.

If you have the economic deterrent, that closes it.

All the evidence showed that some people want to use the Rio Grande badly enough that they went ahead and shipped anyway even at the higher rate.

Now, the question comes up as to the error of the Commission, I’ll take another five minutes out of my —

Earl Warren:

Okay, go on.

Frank E. Holman:

— 15, that the error of the Commission prejudiced the entire proceeding.

Audio Transcription for Oral Argument – April 24, 1956 in Denver & Rio Grande Western Railroad Company v. Union Pacific Railroad Company

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Frank E. Holman:

Union Pacific contends strongly that the Commission wouldn’t do anything more about this if it went back.

Well, we don’t know of course.

We can’t prejudge what the Commission would do, free to this limitation, but in all events, you have situations like this which are important.

Certainly, when the Commission in order to preserved the long-haul under 15 (4) through the line and west side of Denver, and will not give at a through route to Denver, if they’re reconsidering it without the limitations of 15 (4), would be rather ridiculous not to give us a through route to the Colorado common points into our own territory.

So, if one had time, there are many situations in this picture whereby the Commission except as Judge Phillips solved to the self imposed limitation would have a freedom of action where they could have taken a different view of the matter.

Now, I’m sorry I have hardly reached the — I haven’t reached the Nebraska case, the Government will be most interested in that.

I do want to get to this view before you however, as to the Nebraska case.

I did make an analysis, a careful analysis of the Commission opinion.

It’s very long, somewhat involved, what those are, but I think that findings are substantial, that the findings support the conclusions and that the evidence supports the findings and that there is evidence there.

The main thing and perhaps the only thing I have time for with respect to the Nebraska case is that it’s inevitable on any view of the Nebraska case to come to any other conclusion, but that the Court substituted its administrative judgement for the administrative judgment of the Commission.

An opinion was delivered here this morning which touched upon that question.

Because the only change they made was the same evidence and all that sort of thing, the only change they made was — which still have the eight commodities, we still have the area, the open area beyond this restricted area what — they reduced it by saying that the need, the public need and the public necessity was only for shipments out of this closed-door territory which went over the Rio Grande and required in-transit privileges which leaves the anomaly as I pointed out a moment ago, that if you’re a shipper in the Idaho area and you want to ship potatoes through (Inaudible), you have to pay a higher rate if you use the Rio Grande and if you want to ship into Salt Lake City and have them unloaded and sorted and processed and despite of all that expense, the shipper who has in-transit privileges get a — gets a cheaper rate on the shipper who ships right through.

Thank you very much.

Earl Warren:

Mr. Collins.

Elmer B. Collins:

May it please the Court.

I hope it won’t disturb Your Honors on their — their readjusting here so that you can have the advantage if you look at my map.

Earl Warren:

It’s all right.

Elmer B. Collins:

You might say that in view of the shortness of time, I will discuss such points as I — as I can and pray that the Court will consider the points on brief that I’m unable to discuss during the time that I have.

We have divided our time as I told the clerk of the Court and I presume the Chief Justice has the division between the Union Pacific Northern Railroad, the Attorney General of Colorado or rather of Washington and the Attorney General of Nebraska or their assistants.

Now, if I could persuade Your Honors to forget the smog and confusion in which the Rio Grande has attempted to disguise it’s case and let me tell you that the case as we see it and we think and appeal it in this area here which we cross-hatched in green.

I hope Your Honors can see it.

In fact, if there’s a doubt in which we could, but it’s what’s called the Northwest area or as they choose to call it “closed door” area.

There is — originate and terminate about 172,000 cargoes of freight a year.

It moves eastward, it points in eastward, mostly east of the Missouri — Mississippi River and North of the Ohio River and the westbound traffic originating mostly in that eastern area and a little bit in the south moves westward over the northern lines up here, the Great Northern Milwaukee and Northern Pacific are all in the Union Pacific routes which are shown on this map in red.

The Rio Grande route is shown between Ogden and Denver and the broken flat line and it is that 172,000 cars that move over these routes which the Commission found these as much as 50% shorter than routes or some routes that would be made over the Rio Grande.

And actually, the movement over the Rio Grande from this point where we start east from Pocatello direct through Cheyenne, if the traffic was — had to be moved down to Ogden and there given to the Rio Grande, it would take 219 more miles of transportation work to get it to Omaha and 199 more miles to get the same shipment to Omaha on its way to its ultimate destination.

You understand that that the traffic moved between the northwest area and the area east of the Mississippi River and all the Rio Grande ones is the substitute or part of its line for the lines on which the traffic originates and terminates and the president of the Rio Grand Railroad said it’s — it’s sole purpose was to improve its financial position by taking a bridge haul out of this traffic that goes from the — moves between the west coast and the east coast.

Felix Frankfurter:

What rates can we attach to that testimony in view of the explicit statement of the Commission in the first opinion or the Commission opinions, if that’s what it is, that they have not taken into account the financial needs of the Rio Grande?

Elmer B. Collins:

Well, that pierce the dilemma, Your Honor, but I don’t see how you’re ever going to give effect to that financial needs prohibition of Section 15 (4) if the Commission is going to say, “Well we didn’t consider it.”

I — I don’t know what — what circumstances there could be if — under which the Commission would confess that it had considered financial needs of a railroad in — in the face of the statute that would tell him even without going to Court that you’re making a void order.

Audio Transcription for Oral Argument – April 24, 1956 in Denver & Rio Grande Western Railroad Company v. Union Pacific Railroad Company

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Felix Frankfurter:

Yes, I — of course ipse dixit of the Commission can’t sustain a baseless finding.

Therefore, I should think our problem, my problem is, that if the Commission says so, I must naturally give it respect, but if the record contradicts it then I’ll be reject the conclusion and accept the record.

Now, is that the situation from your point of view?

Elmer B. Collins:

Yes, it is, Mr. Justice Frankfurter.

And I’ll help you out.

The Commission’s report is replete with everything that would lead up to saying, “Well, we –we are unable to make an order here because you say you want to improve your financial position and we are prohibited from granting an order for that purpose.”

All through the Commission’s report, there is emphasis, reemphasis and reiteration of the importance of bridge traffic to the Rio Grande Railroad and the recital of its bankrupt condition which finally — which ended in 1947.

The — the financial importance of bridge traffic to the Rio Grande runs all through the report until they get up to the final point of — of discussion and trying to arrive at a decision, they point out that the Rio Grande increased it state of traffic from other routes for a bridge haul, 326% in the 15 years before it filed its complaint and the Rio Grande said that we can’t live without taking money from or rather taking traffic in revenues from other carriers which we neither originate and — or nor terminate and it’s the traffic in which there’s generally conceded to be the greatest amount of net money because you don’t have the expensive gathering and delivering expenses.

So —

Felix Frankfurter:

Are you trying — your time is short, but this is — it seems to me a very important point.

Congress for including — sufficiently refused, made an important enactment or amendment in 1940 on this very point —

Elmer B. Collins:

Sir.

Felix Frankfurter:

— to joint routes, and joint rates in order to — for the financial need of another road.

Elmer B. Collins:

Yes, sir.

Felix Frankfurter:

A railroad is not a mercenary institution and the Central Rio Grande wouldn’t have brought this complaint before the Commission unless it wanted to make some money out of it.

Elmer B. Collins:

That’s correct, its president so testified.

Felix Frankfurter:

Very well.

But is that — [laughs] therefore, it can’t be that merely because it will be profitable to a road, you have joint route which it seeks with the Commission that that disable the Commission from granting it.

Elmer B. Collins:

No.

Felix Frankfurter:

Therefore, this amendment seems to me, rather crucial to this controversy.

Elmer B. Collins:

I would not go as far as to say that the Commission could not make an order, diverting traffic from existing through routes to a new proposed route if — just because, I say it would not be prevented by the mere incident that it might result in some enhancement of that railroad’s position.

But when a railroad like the Rio Grande that has been bankrupt throughout most of its career, unfortunately, and has been trimming of its branch lines abandoning them in order to work as what it calls a bridge line and then comes to the Commission in its non early mercenary position and I — I think we should consider the fact that it’s out for the money and the only way to get it is from the carriers that originate and terminate the traffic and are hauling it between the termini of the existing through routes.

You — I don’t think that you have in this case what you could easily imagine you would have in a case brought by shippers who wanted better transportation to result from the proposed through routes.

You don’t have that situation here.

You have a situation in which the Rio Grande stood by and it finally build up its line, as its president testified through the period of — of its last bankruptcy, until they reached the points, they said, “Well, now we think we can compete for this traffic so we’ll try to cut in on it and we’ll bring a complaint.”

They went out and as they admit, they solicited a lot of shippers to come and help them out to win the case and brought them in and Mr. Holman was speaking for them just now, so, he said.

So, the Rio Grande I think was cognizant of all these difficulties that stood in its way and tried to disguise its complaint or at least ride through the Commission on a public interest complaint, but its own financial interest and its financial gain cannot be forgotten.

Now, I think you’ve — you’ve had —

Stanley Reed:

What the — the Commission based its loss on the fact that it was either discriminatory to the shipper, are discriminatory between routes, is it not?

Elmer B. Collins:

Your Honor, the Commission, although accepting the invitation presented in the Rio Grande’s confused complaint which alleged violations of about every section of the Act that it thought could have any application to anybody.

Audio Transcription for Oral Argument – April 24, 1956 in Denver & Rio Grande Western Railroad Company v. Union Pacific Railroad Company

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Elmer B. Collins:

Commission accommodated it with findings but went ahead and said explicitly, “Any order giving the Rio Grande Railroad what it wants in this case will have to be based on clause (b) exception to the short-haul provision of Section 15 (4).”

So that in the — in numerous cases which this Court has rendered decisions wholly, that where the Commission has explicitly adopted a legal basis and — and puts its order on that basis, you’ll the test the validity of the order on that basis and not on something else.

Now —

Felix Frankfurter:

And you being specific isn’t trying to sustain this order as a mean of preventing or correcting, violation of other provisions of the Act, is it or is it?

Elmer B. Collins:

We — you — we’re not trying to sustain it?

Felix Frankfurter:

Oh, I — I beg your pardon.

Then the Rio Grande which is not right to sustain this order as a mean of correcting other established by — violations of other provisions of the Act.

Elmer B. Collins:

Mr. Justice, I’m — I’m sorry to have to say this but I — I’ve been trying for seven years to find out on what section of the Act they specifically put any claim of theirs.

I don’t know what they’ve been doing.

Felix Frankfurter:

Now, let’s take it apart from them.

The District Court of Nebraska, did it sustain in a bona fide way in which it did, the Commission’s order as a means of correcting violations, say of Section 3?

Elmer B. Collins:

The Court in Nebraska did this, if understand his opinion correctly, it said there can be no Section 3 paragraph one violation here because the shippers suppose to be preferred are located on one railroad and those supposed to be prejudiced are on the other.

And then they said, the evidence — after putting that aside they said the evidence will not support a finding, the Commission’s finding that service by the — over the Union Pacific routes or this traffic that moves over the Union Pacific, no evidence will support a finding that that service is inadequate because the Commission had found that to the adequate, the route shorter, the time in-transit 24 hours at least in two, the change is shorter and very sensibly it seems to me the Court says, “You can’t — you can’t have inadequacy of transportation and — of traffic that actually moves over the Union Pacific,” and consequently, you can’t condemn those routes under Section 15 (4), so as to reach it under clause (b).

You have no necessity to invoke clause (b) on that traffic.

But then the Court did this strangest thing, it turn around and said, “There is evidence that will support a finding,” although the Commission didn’t make the finding.

The Court said, “The service by a way of the Rio Grande having its higher rates and its longer route and so forth is inadequate and also inefficient and uneconomical.”

I think the Commission’s report was in such a confused state that it got the Nebraska court confused.

I should say that the Commission held that it could not order the — any of the relief the Rio Grande wanted unless it first condemned existing routes.

And undoubtedly, if adequacy is to be tested by anything, I mean, adequacy of transportation which is the standard under the Interstate Commerce Act.

This is to be tested by anything.

It must be by the type service that the existing routes conformed.

So, the — the Commission and then these shorter routes, with a shorter time, adequate the Commission properly held to or any foreseeable volume of this traffic from the Northwest area to the east and from the east to the west without going over this mountainous road which the Commission found in the Rio Grande, to be longer, slower, less favorably situated and with the most onerous operating conditions of any of the western lines named in its complaint.

But the Commission and its desperation to find the ground on which to condemn the Union Pacific routes and divert some of the traffic to the Rio Grande said that our routes were inadequate because at points on the Rio Grande they are not available and higher rate supply.

In other words, the Union Pacific routes and for that I refer to all the routes that have a joint rate as we go through the northern lands, we are condemned and to be short-haul because we don’t serve territory or stations that is located 400 or 500 miles or several hundred miles south of us through the Rocky Mountains.

Now, this Court have such a case before it, in the very first one that came here involving a shorter haul ordered by the Commission after it got the power to compel through routes and joint rates.

It’s Interstate Commerce Commission against the Northern Pacific Railroad and it’s cited in our brief and it’s 216 U.S. in which the Commission being anxious to have as many routes as possible and that was, and I will come to in a minute was one of its mysterious here.

The Commission said that it issued an order telling the Northern Pacific Railroad on traffic to Seattle to join with the Union Pacific routes from Portland or the Union Pacific had no route then from Portland to Seattle, join with the other carriers from Portland to Seattle to get a through route over this longer area to Seattle, then over the Northern Pacific at that time, the statutes said that the Commission may make through routes and joint rates if no reasonable — no reasonably satisfactory route exist.

Well, the Commission pointed out that these people like to go through Salt Lake City and they’d like to see different territory going one route and coming back another.

But yet, it said that the Northern Pacific route was about equidistance, it had this good service and all of that.

Well, this Court said that, “Well, that might be a reason for a preference, it’s not a reason for condemning the existing routes and you can’t short-haul it on that theory.”

Audio Transcription for Oral Argument – April 24, 1956 in Denver & Rio Grande Western Railroad Company v. Union Pacific Railroad Company

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Elmer B. Collins:

This — this is just a repetition of that.

Now, I intended to — to tell you some more of the weird things which the Commission did.

It proposes the short-haul, the shorter, faster, adequate, direct lines by adding a longer, more onerous and slower line.

On those facts, it is my contention that the Commission cannot at anytime make an order, short-hauling, the existing routes, so long as those facts, as to those other facts and there so found by the Commission are not disputed.

They can’t dispute the physical and geographical situation.

The Commission next misconstrued it’s authority under this clause (b) which, I might say, authorizes that the short-haul existing routes is the — if the Commission finds that the proposed through route is needed to provide adequate and the more efficient or more economic transportation.

Now, the Commission says, “Well, the Union Pacific provides transportation services that are as — as good as any of the Rio Grande could,” but the shippers’ testimony suggest a need for more adequate transportation.

I — I suggest to Your Honors if we’re to add a limitless word like “more” in front of the quote — phrase, more adequate and more efficient, why then, the Commission has found a way completely around the — or the interpretation that it puts on clause (b) because every route it adds that could say would make it more adequate.

Then —

Earl Warren:

Mr. Collins, where do — where do I find in the record the finding of adequacy where — I want to see the language of the Commission in finding that — that the Union Pacific service was adequate.

Elmer B. Collins:

Where’s the — perhaps the — brief at page 25 of the — of the brief in the Nebraska record, number 117, 118 and 119 and you’ll find the beginning of the Commission’s report.

And at —

Earl Warren:

Which volume is that?

Elmer B. Collins:

I beg your pardon?

This — well, the — the record of the same colors, transcript of record in numbers 117, 118 and 119, that’s from the Nebraska Court.

Felix Frankfurter:

What page is that?

Earl Warren:

Where — what page?

Elmer B. Collins:

Oh, 25, that’s where the Commission’s report begins.

I mean, to read the number, there’s a way the clerk read them, but it now — I’ll find you in just a moment.

Where you find that number, it serves a — at — under the — the discussion, under the Nebraska record, page 61, beginning, opposition testimony at the bottom of the page you’d see a discussion of the Union Pacific’s testimony.

And at the top of — of page 62 as numbered — three-numbered, I mean that’s the record number, there are other pages, the Commission report number.

Where it says the Union Pacific has over $600 million invested in the routes concerned, its present facilities are adequate to move over its own direct routes.

The present volume of traffic and any additional volume that maybe anticipated in the foreseeable future and then it goes on to —

Earl Warren:

That is a finding, is it?

I — that is one of the findings so that —

Elmer B. Collins:

I can’t imagine what else it could be, sir.

Earl Warren:

Well, I know, it says opposition testimony was the heading of the — of the (Voice Overlap) —

Elmer B. Collins:

It doesn’t say that we claim this for our facilities.

It says that they are adequate to move over these routes, any amount of traffic from — from the foreseeable future.

Earl Warren:

Well, what I mean is, now at the bottom of page 61, it says “opposition testimony.”

Audio Transcription for Oral Argument – April 24, 1956 in Denver & Rio Grande Western Railroad Company v. Union Pacific Railroad Company

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Earl Warren:

Now, do this purport — does what follows purport to be a resume of what they testified to or is it a finding?

Elmer B. Collins:

It’s a finding, if the Commission is capable of making one.

It’s — it’s the Commission’s taking out of its own brain and putting on paper what it finds from the testimony that we put in the records.

Felix Frankfurter:

You were suggesting that there are no specific findings and we have to excavate from this long report what may be attributable to the Commission as its findings, is that correct?

Elmer B. Collins:

I think every — every justice of this Court is familiar with the — Commission’s habit —

Felix Frankfurter:

Yes, I know.

Elmer B. Collins:

— of making a series of what you referred to as — as basic findings before they reach the ultimate conclusions, but they’re finally —

Felix Frankfurter:

What I’m suggesting is that there are no findings such as are required by the rules that Courts could make, and the findings are embedded in the totality of their report.

Elmer B. Collins:

I’m sorry, but that’s the case and every report of the Commission as I read for 30 years.

Felix Frankfurter:

Must we not blame for it?

Elmer B. Collins:

Well, I might have been if I hadn’t left them.

You will find the conclusions and the — at the page 73 of that record and you’ll find general discussion and ultimate findings of fact beginning at page 67.

And there, they — they — we might say edge up toward the thing they finally say and that is that it’s — it’s in the public interest, (Inaudible) and desirable in the public interest to have that the — and mind you, this is their finding and this is another important contention, at least I think it’s important, that I make on behalf of the railroads in attacking the Commission’s order.

We say the whole order, the only order they issued should be enjoined and annulled, for reasons that I have indicated up to now.

But when it came to the ultimate finding, the Commission said and we find that it is necessary and desirable in the public interest which is the — which is the language of paragraph 3 of Section 15 of the Act which Chief Justice Vincent said in the Thompson case in 243 U.S. in June 1952, is the general language of the Act where no short-hauling is involved.

The Commission then went on, have to say it’s necessary and desirable in the public interest that these through routes and joint rates be required by the Rio Grande or these commodities.

To — I don’t understand this lighting system, Mr. Chief Justice.

That mean my times is — is — my 30 —

Earl Warren:

No, you have an — you have an hour.

I don’t know how you decided.

Elmer B. Collins:

Oh.

Well, I just going to take —

Earl Warren:

I don’t know how you divided your time (Voice Overlap) —

Elmer B. Collins:

Well, the lights went on and I didn’t know what it meant.

Earl Warren:

Well, that — that light —

Elmer B. Collins:

All right.

Earl Warren:

— white light is —

Elmer B. Collins:

Okay.

Earl Warren:

— five minutes from the end of your time normally, but you must have asked for some particular —

Elmer B. Collins:

Oh, okay.

Audio Transcription for Oral Argument – April 24, 1956 in Denver & Rio Grande Western Railroad Company v. Union Pacific Railroad Company

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Earl Warren:

— warning there.

Elmer B. Collins:

It’s all right, thank you, sir.

I didn’t — I didn’t understand.

But instead of making the findings required by clause (b) of which the Commission said explicitly that it revoke — that it invoked and was making the basis of its order, said the shippers’ testimony, indicated the need for more adequate transportation.

It did not find that the routes by way of the Rio Grande were needed and this Court, Mr. Justice Black in the Pennsylvania Railroad against the United States in 323 U.S. specifically of clause (b) said that the word needed in clause (b) was not redundant of or with the general language in Section 15 paragraph 3, that Congress had a purpose in using these other and different words in clause (b).

So, the Commission did not find the Rio Grande route was needed.

It did not find that the route would provide more efficient transportation and that is one of the — one of the qualities of transportation which this Court has said ever since the Transportation Act 1920 was one of the basic concerns of Congress.

That is efficiency as well as adequacy of transportation.

Then the Commission said or found that the Rio Grande route was necessary to provide more economic routes, more economic transportation and I submit to you that all that means is that the Commission has misjudged the statutory pattern because what it is done is to reduce the Rio Grande rates from the combination level down to equalized them with Union Pacific route rates and that isn’t what the statute means.

It means that this proposed route over here was have merits of its own which will give the public adequate, more efficient and more economic transportation what the — which the existing routes can’t give.

It doesn’t give the Commission authority to simply substitute the joint rates for the combination rates and then sit back and say, “Well now, transportation is more economic and the routes are justified because it’s obvious that ordering rates over the Rio Grande equal to those already in existence over the Union Pacific for many years,” does not provide for the shipper anymore economic transportation than he has and there is no — there is no possibility of anybody justifying the — the economy, as we know economy that is a standpoint of which can be done with the least effort and the least expense in transporting over the Rio Grande as in transporting over the Union Pacific because you’ve got, let’s say 219 miles of additional transportation over the most onerous operating miles in the country, a pure economic waste there.

So, none of the — the essential findings were made by the Commission even to justify clause (b), then it departed not only from that finding, which it had been invoked.

It adopted the new one of all possible routes for perishable products and if that is to be done, then everytime the Commission says a segment of traffic in its judgment needs all possible routes, then reasonable through routes, a standard of the Act and adequacy of transportation, as Circuit Judge Johnsens says, “The carriers might as well forget any possible protection under the short-haul prohibition of the Act.”

Then, not only did the Commission substituted its own standard for the statutory standard, after finding itself unable to make the findings required by clause (b), but of all things, seizing upon perishable products as is its justification for short-hauling the existing routes, turn around and put ordinary livestock in there with — within the classification of perishable food products, not being satisfied to that it tossed in dried beans within that classification and that not being enough, they put it in westbound marble and granite tombstones from Georgia and Vermont.

Harold Burton:

Why are you discussing those?

Would you explain to me what the in-transit services are that are rendered to marble and the granite?

Elmer B. Collins:

Why, they get slabs of this stone, Mr. Justice Burton, as I understand it.

They are (Inaudible) down to some suggested sizes and then — or maybe pretty well-furnished and polished off and they — they’re delivered to a fabricator at Brigham City, Utah and if I happen to be the — if my folks happen to be the purchaser of its product where they carved my name on it, that’s called a fabrication in-transit.

They put that then over —

Harold Burton:

Was done in-transit instead of that — either end of the shipper?

Elmer B. Collins:

It could be in-transit, that’s right.

It — they could stock it long enough to do this finishing and put the printed matter on it.

Felix Frankfurter:

Actually making (Inaudible) of these, I mean, in point, is that it?

Elmer B. Collins:

I beg your pardon?

Felix Frankfurter:

To make (Inaudible), does it — I mean, these points.

Elmer B. Collins:

Oh, yes, yes.

Stop, depart, we unload.

Felix Frankfurter:

And Judge Johnsen called it (Inaudible)

Elmer B. Collins:

That’s right, that’s right.

So, they can get a monument wrapped off at carload rate.

Audio Transcription for Oral Argument – April 24, 1956 in Denver & Rio Grande Western Railroad Company v. Union Pacific Railroad Company

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Elmer B. Collins:

Well, I — I hope that — I was understood when I mentioned these things.

The Commission first did not make the findings and did not adhere to clause (b) which it explicitly invoked and on which as I understand the decisions of this Court, you will adjudge the validity of the order it issued.

It adopted the standard of perishable food products as required in the marketing system, requiring all possible routes for that and then couldn’t even stick by the standard that it has been invented and adopted as its own, it went out and dragged in ordinary livestock, dried beans and indestructible marble and granite tombstones.

Now, if this — if this order of the Commission can be sustained, then as Circuit Judge Johnsen truly says, “We might as well forget the thought of any protection of a long-haul” which this Court said in the Thompson case, was guaranteed by Section 15 (4) of the Act subject to these exceptions.

When was that?

If these routes are opened?

Elmer B. Collins:

I beg your pardon?

If these routes are opened, however, why, you don’t get tangled up to 15 (4) at all, or if Rio Grande doesn’t.

Elmer B. Collins:

Well, the — the Rio Grande seems to confine it to — to satisfy itself with the — with some theory that — that the Union Pacific or other railroads can — can violate the provisions of the Interstate Commerce Act which require us to take the shipment when intended.

What’s that provision after —

Elmer B. Collins:

Paragraph 11 of Section 20, sir.

It’s known as the Bills of Lading Act, when the shipment is — is tendered us or traffic is received we must take it and issue a bill of lading.

Now, they tell us, the way to have avoided this was to put in the tariff or notice that we are not going to accept your shipments and then we would not have to issue a bill of lading and by violating the Bills of Lading Act, we could gain protection of our long-haul under Section 15 (4).

I — I know of no law and I have cited a lot of decisions in the railroads briefs which hold that we cannot, by any publication in the tariff or by any self-serving declaration escape any of our obligations as a common carrier.

My associates we’re going to say some things to you and I thank you.

Earl Warren:

Mr. Simpson.

Robert L. Simpson:

Yes, Your Honor.

If the Court please, I would like to try to confine my remarks to about five minutes.

I am an Assistant Attorney General from the State of Washington and I’m appearing here today along with Mr. Overcash, for these States of Washington, Oregon, Wyoming, Montana and Nebraska.

These five States have intervened to these proceeding from the very inception before the Interstate Commerce Commission and we have been in opposition to the proposal of the Rio Grande.

I am only going to try to very briefly touch upon one or two matters as they reflect the record in respect to my part of the country, the Pacific Northwest.

These States before the ICC, made it undisputedly clear that in there area, there was no need for the proposed routes of the Rio Grande.

It was made just as clear that the granting of financial relief through this bridge line railroad by approving its proposals in the absence of any need or benefit from the route would adversely affect our economy in the existing services.

Now, we’re presently served in the Pacific Northwest by some five transcontinental railroads, the Milwaukee, the Southern Pacific, the Great Northern, the Northern Pacific and the Union Pacific.

This record shows without contradiction.

First in respect to the State of Washington that there was not one shipper who was in favor of the proposed routes of the Rio Grande, all the shipper witnesses that intervened in this proceeding from the State of Washington, opposed without exception, the proposal of the Rio Grande.

They showed conclusively that there was no need for this longer route.

Out of the four states of Oregon, Washington, Montana and Wyoming, but two individual shippers from the State of Oregon came forward on behalf of the Rio Grande.

One of those two testified that the only purpose of having the route available would be in the event of some emergency and the other witness made no present claim for any need.

These states also made it quite clear that the Union Pacific provides the fastest and the shortest and the most economical route to the southern and eastern markets.

Audio Transcription for Oral Argument – April 24, 1956 in Denver & Rio Grande Western Railroad Company v. Union Pacific Railroad Company

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Robert L. Simpson:

Now, they attempted to point out and did so successfully that the wastefulness involved in the longer and more circuitous route would ultimately have to be borne by the shippers from that area.

We’ve learned up there from other painful experience because we’re so far from distant markets in the east and the south that were pretty much dependent for fast and low cost transportation.

It’s clear to us that a railroad that would propose to offer us a longer route cannot and will not be able to provide more adequate or economic service.

Yet the Commission —

William O. Douglas:

I suppose if that’s true, the shippers will not take advantage of it.

Robert L. Simpson:

Now, they were —

William O. Douglas:

What — what’s behind the action of the State Commission with Rio Grande?

Robert L. Simpson:

Our State Commission, Justice Douglas, presented testimony in opposition to the route and presented testimony showing that the Union Pacific route was the shortest and the fastest and the most economical route.

William O. Douglas:

What is the — what — what’s behind the — the attitude, the thinking of the State Commission on this, why are they opposed to the Rio Grande (Inaudible)

Robert L. Simpson:

The diversion which must of course result from approving the proposal of the Rio Grande means that shippers for one thing, who are not informed about transportation matters and are part of the country particularly those in the east, they won’t necessarily have the control over the shipments and even though there is no compulsion to use the route of the Rio Grande, assuming its proposals are accepted, nevertheless, because these shippers are not convergent with transportation facilities and routes in our part of the country, not having this control, that traffic, nevertheless, can be diverted to the longer lines of the Rio Grande.

If there is diversion which there unquestionably will be, if the proposal of the Rio Grande is sustained, that means of course a resulting loss of revenue to the carrier, to UP.

Any loss of revenue, of course, must be made up someway either by effectuating economies which ultimately will result in effecting the party and the degree of service in our part of the country or could very possibly result in an increase in the level of rates.

And we’re not very favorably impressed of — in our part of the country as to increase rates because of the disadvantage we now have because of our distance from these markets.

I hope by now we have explained somehow the feeling that generated our Commission and the shippers in our area to oppose this complaint.

So, you would rather have the efficiency of the Union Pacific and the competition of the Rio Grande?

Robert L. Simpson:

If it would result in —

For the better use of your community, in your environment?

Robert L. Simpson:

That’s right Mr. Justice, if it would adversely affect the existing transportation facilities in our state.

You must think it would or you wouldn’t be under (Voice Overlap) —

Robert L. Simpson:

Unquestionably.

That’s the only reason I am here.

Felix Frankfurter:

Does this pertain particularly as to your shipments from the northwest which also apply to shipments to the northwest?

Robert L. Simpson:

Both ways, Your Honor, because particularly the producers and the shippers in the east that are less converging with the traffic conditions in the Pacific Coast than our own shippers.

Our own shippers won’t be using the Rio Grande.

Felix Frankfurter:

Beside, if the shipper doesn’t indicate over what route it goes, the carrier could choose the route, whichever way he chooses.

Robert L. Simpson:

That’s absolutely correct.

One more point before I close.

The Commission sought to justify its report or order by saying that producers and shippers in the Pacific Northwest are entitled to have their products moved with expedition to as many markets as possible in over as many routes.

And they even went so far as to say that the shippers in the Pacific Northwest are debarred or excluded as the map will show.

The incredible thing to us is that the Commission was capable of indulging in such language when there was a single shipper who even made such a statement, let alone was there a single shipper from the State of Washington who even testified on behalf of the Rio Grande.

Audio Transcription for Oral Argument – April 24, 1956 in Denver & Rio Grande Western Railroad Company v. Union Pacific Railroad Company

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Robert L. Simpson:

It’s particularly alarming to me as a lawyer that this administrative agency would choose to ignore the voluminous testimony on behalf of the people of Pacific Northwest.

I hope I can leave with you the impression that this record is devoid of any need for the proposed routes of the Rio Grande.

Thank you very much.

Earl Warren:

Mr. Overcash.

Bert L. Overcash:

May it please the Court.

Judge Johnsen in his opinion in the Omaha case characterized this proceeding as another attempt by the Commission to gain a new foothold under another disguise.

I wish to discuss in the few minutes of my disposal, the misuse by the Commission of the various Sections of the Act particularly Section 13 (4).

Preliminary to that, may I suggest to the Court that the joint briefs of these states, emphasizes in some detail legislative background and legislative history of Amendments to this Act that we think are important.

In the Colorado brief, there are — there is reference to 15 (3) and 15 (8) as to amendments, in the Nebraska case 15 (4) and Section 3 (1).

And in response to Mr. Justice Harlan’s question, may I suggest to you Mr. Justice Harlan that you read page 56 of our Nebraska brief on the matter of cancellation of terms.

Which color?

Bert L. Overcash:

They’re both white.

Now, the mishandling of various provisions of the Act is an — is an important part of what Judge Johnsen describes as the confusion in which this whole report is wrapped.

This Court will appreciate that it’s very difficult to explain confusion, much less rationalize it.

I — I will attempt however to at least identify to the Court what we think is the confusion in this report.

It begins all right by referring to Section 15 (4) as a basis for the order.

And upon that basis the report should be considered as to what it meets the requirements of 15 (4).

But the report goes on and roams all over the Act and ends up with the finding of a violation of Section 1 and Section 3 (1).

That report denies and find there’s no violation of Section 3 (4) except as to the local Bamberger Railroad.

Now, we contend that there’s no support for the findings of violation and they’re completely irrelevant.

With reference to Section 1, the only evidence in the record, as to the reasonableness of rates in support of the finding that the Rio Grande’s combination rates are unreasonable is a comparison of the combination rate with the joint rate and they say the combination is higher.

But this Court has said repeatedly, the combination rates are always higher and that is wholly insufficient evidence to support a violation of Section 1.

There’s nothing in the record as to length of haul or various factors that go into rate making, competition, the cost of service, density or volume of traffic or transportation conditions.

Turning to Section 3 (4), which has Mr. Holman stated, is the only Section involved here in which a carrier can make a complaint against another carrier.

The Commission found no violation of that section.

No discrimination was established by the Rio Grande against any of the 214 defendant railroads.

And the reason the Commission so held was because there was no showing of similarity of transportation.

As a matter of fact, the findings of the Commission showed the contrary.

Now, this finding of the Commission on Section 3 (4) precludes the Rio Grande from maintaining in this action that there’s any violation to which it can lay hold out.

Turning to Section —

Audio Transcription for Oral Argument – April 24, 1956 in Denver & Rio Grande Western Railroad Company v. Union Pacific Railroad Company

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Felix Frankfurter:

Did the — did the District Court find any violation of Section 3?

Bert L. Overcash:

The Omaha Court eliminated Section 3 (1) that I’m going to discuss and of course there was no violation of 3 (4).

Felix Frankfurter:

Did they — did they find a violation of 3 (1)?

Bert L. Overcash:

No.

The majority and minority both in the Omaha case said there was no violation in Section 3.

Felix Frankfurter:

And if there — I ought to know what I don’t, that cross-appeal by the Union Pacific in that Omaha Court did not so find?

Bert L. Overcash:

There’s a court — well, the —

Felix Frankfurter:

Is — their cross-appeal as to a violation of Section 3?

Bert L. Overcash:

The Union Pacific and all the States cross-appealed.

Felix Frankfurter:

On that point?

Bert L. Overcash:

Well, in all of the points that were adverse to us.

But there —

Felix Frankfurter:

Adverse to what?

I haven’t made myself clear.

The District Court in Nebraska did not find a violation of Section 3, is that right?

Bert L. Overcash:

They found a — they affirmed a violation of Section 3 (4), as I remember.

November?

Bert L. Overcash:

On November.

Felix Frankfurter:

November, what’s in that?

Bert L. Overcash:

But no other finding of violation.

Felix Frankfurter:

Now, what I want to know is whether the Union Pacific cross-appealed on the failure to find — the failure by the District Court to find a violation in Section 3 apart from that which —

Bert L. Overcash:

I don’t think we cross-appealed because we insisted there was no violation.

Felix Frankfurter:

Well, I mean, the (Inaudible) — I’m sorry, I mixed my (Inaudible) Rio Grande?

Bert L. Overcash:

I don’t recall the specification of the —

Felix Frankfurter:

No, no.

What I’m suggesting is, this is before us, you needn’t argue it, it’s because it’s — it’s the challenge here.

Bert L. Overcash:

Now, turning to — turning to Section 3 (1) that’s the shipper section, undo preference and prejudice in shippers.

The Commission found a violation of 3 (1).

We suggest that that was baseless for the reason that that’s a shipper section and the railroad couldn’t invoke it and the intervention of shipper was ancillary to the Rio Grande’s complaint, subordination to it and did not broaden issues and establishes it as a shipper case.

We also point out that there’s — the finding of dissimilarity under Section 3 (4) required a similar finding under Section 3 (1) and there is no basis for a finding of a violation of Section 3 (1) in this case.

Audio Transcription for Oral Argument – April 24, 1956 in Denver & Rio Grande Western Railroad Company v. Union Pacific Railroad Company

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Bert L. Overcash:

There’s other reason, we urged the history of the proviso of Section 3 (1) at page 83 of our brief and the — the fact that there was no showing in this record of the classic requirements of a shipper discrimination case on which you can base a finding, the violation of 3 (1).

Now, in that connection and in connection with the matter of shipper violations, many suggest to the Court that the rate disadvantage that is referred to here as to processors and feeders on the Rio Grande is compared with the Union Pacific is a natural and a proper relationship.

The record shows without dispute that there’s processors and feeders in western Nebraska, Wyoming, and northeastern — northern Colorado, who have the joint through rates to the — to Idaho and these processors have an advantage over the processors and feeders on the Rio Grande.

But the record also shows that these same processors and feeders in Nebraska, Wyoming, and northern Colorado have a disadvantage with those same processors when they get their materials and supplies from Arizona and New Mexico.

In other words, the territory adjacent to wherever you’re located, you’re shorter and you have a lower rate and that’s a natural and a proper application of rules of rates and the Rio Grande has an advantage on New Mexico and Arizona and a disadvantage on their — farther territory, farther away.

And they — in this proceeding they want — they want the advantage both ways.

They want all the advantages and then of the disadvantages.

So, I say to you under 3 (1) factually there is no case in addition to the other points.

Now, with reference to the handling of these sections, I want to emphasis that.

Section 1 and 3 deal with the reasonableness and the equity of charges to shippers under similar conditions, Section 15 (4) and 15 (3) deal with an entirely different subject, that is the adequacy and the efficiency of transportation facilities.

Now, you can’t create through routes under Section 1 or 3 and you can’t reduce rates or equalize rates, or equalize transit charges under Sections 15 (3) and (4).

There’s a direct remedy in these respective sections and you can’t give one class of sections for the purpose of remedy and matters in other sections.

Our brief at page 74 refers to a long line of cases in which the Commissioner said that they can’t invoke Section 1 in order to avoid the requirements of Section 15 (4).

Now, with reference to the use of Section 15 (4) which they apparently use here, the through route section, the Commission did to cure violations of Section 1 and 3.

Let me specifically refer this Court to page 100 of our Nebraska brief.

We point out there that when the through route section was added to the law in 1906, it contained a definite provision that Section 15 (4) could be used to enforce any provision of the Act and then in 1910 the Congress eliminated that sentence entirely from the Act and that elimination is a direct indication and statement of intention that Section 15 (4) could no longer be used to enforce other provisions of the Act.

Now, I realized that there is a provision in Section 15 (4), a parenthetical sentence except as provided in Section 3.

But that means if it means anything that they must have intended at sometime to write some provisions into Section 3 with reference to through routes, it can’t be use as a complete nullification of Section 15 (4).

Furthermore, the meaning of that exception is moot here because there’s no violation of Section 3 on this record.

Well, this Court in a long line of cases has held that Section 15 (4) cannot be subverted or nullified by any other provision of the Act.

The recent Thompson case pointed this out that the form of the order couldn’t be used to avoid the requirements of 15 (4).

Previous to that in the Stickell case, 323 U.S. this Court found a rate disadvantage but bottomed the case entirely on Section 15 (4).

In the Chicago, I. and L. case, 270 U.S., the opinion points out that under the guise of Section 3 this Court will not permit a through route to be created under Section 15.

In the Central New Jersey case, the same holding was made with reference to the use of Section 3 by indirection.

The Saint Louis Southwestern case involving discrimination against Paducah, Kentucky carefully pointed out that in removing the discrimination this Court would not say that any new route had to be created.

So, we say to the Court that you can’t under this legislative history and under these decisions use 15 (4) as a means of remedying what you say or other violations of the Act.

Stanley Reed:

I — I don’t quite understand — I don’t understand what — what you say about 15 (4) and that the provisions of Section 3 can’t be taken into consideration, you’ll have to deal with 15 (4).

Bert L. Overcash:

Oh, what I say is that you can’t have a case and say there’s a violation of Section 1 or 3 and we’ll enforce in remedy that violation by establishing a through route under 15 (4).

(Inaudible)

Stanley Reed:

Why — why is that accepted in 15 (4) there except as provided — Section 3 in this title?

Audio Transcription for Oral Argument – April 24, 1956 in Denver & Rio Grande Western Railroad Company v. Union Pacific Railroad Company

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Bert L. Overcash:

I don’t know why that exception is there and I don’t have any legislative history, but it’s never been construed Your Honor to mean that you can nullify Section 15 (4) wherever you have a claim under Section 3.

Stanley Reed:

But you — you would nullify it.

Necessarily, you would — you’d take Section 3 which applies for — against unreasonable purposes or undue purposes (Inaudible) so that you can short-haul.

There’s — there’s no situation like that.

Bert L. Overcash:

I — I don’t think you can, Mr. Justice Reed.

I —

Stanley Reed:

I was expressing an opinion about that.

I don’t understand why you held Section 3 proviso in there if it wasn’t so perfectly (Inaudible)

Bert L. Overcash:

My own feeling is that that language means except as provided in Section 3 there — there would have to be a provision in Section 3 with reference to through routes before that section would come into play and there’s an omission in Section 3 now on that general subject.

But anyhow, I suggest to Your Honor that the matter is moot because we — we contend and we believe the record establishes that there is no violation of Section 3 here.

Now — I beg your pardon about that.

I inquire my time is expired.

Earl Warren:

Well, I haven’t — I don’t keep track of your time.

(Inaudible)

Bert L. Overcash:

I beg your pardon?

(Inaudible)

Bert L. Overcash:

In conclusion, may I suggest to the Court that the position of these five States, our conviction is that the great tragedy in this whole case is the disregard and the neglect of transportation policy.

This Court said in the Rock Island case that this declaration of policy goes to the basic power of the Commission and that policy emphasizes economy and efficiency.

Now, in this report of 60 pages, this Court will not find one sentence in that report of the Commission discussing transportation policy and yet this situation here is the exact reverse, the complete reverse of every prior through routes case.

If the Court will read the Subiaco case and the Stickell case rendered by this Court and the (Inaudible) case rendered by the Commission in 276 I.C.C., the Court will find that in all prior through route cases.

The new route was either shorter or most — more efficient or save time or something and in this case you have the absolute reverse of that situation.

And yet, for the first time in history where this about change in the invocation of through routes, the Commission has not in the entire report given one sentence to a consideration of that policy.

I suggest to the Court in our brief that under that Tanzola case, a recent three-judge opinion on that point alone this order should be set aside because the Court said so in that case that when there’s a refusal, when they give no consideration to this important requirement of the Act that that alone should set aside the entire report.

So, in conclusion I submit to this Court that if the technique in approach that is adopted in this case is sufficient to sustain this order.

Then as stated by Judge Johnsen in the Omaha case, the railroads of this country and I might add the State Commissions and the shippers they represent may as well forget entirely the provisions and restrictions and protection that this Court has always given them under Section 15 (4) of the Act.

Earl Warren:

Mr. Ginnane.

Robert W. Ginnane:

May it please the Court.

I should like to turn first to the single question considered by the Colorado District Court.

Further, there are already in existence through routes by Ogden and the Rio Grande line between points in the northwest or excluded territory and the Colorado common points and points east to the Colorado common points.

The Commission divided five-to-five on that issue of fact and therefore refused to grant the relief which Rio Grande requested and the basis of through routes being in existence.

Audio Transcription for Oral Argument – April 24, 1956 in Denver & Rio Grande Western Railroad Company v. Union Pacific Railroad Company

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Robert W. Ginnane:

We accept the definition of a through route which counsel for the railroads have put forward orally and in briefs.

Unlike the rest of the parties before the Court, we accept Thompson of the Unites States, the recent decision of this Court as laying down the controlling test for the existence of a through route.

The Thompson case was decided while this case was pending before the Commission for decision, perhaps it had a heavy impact upon the Commission.

In the Thompson case this Court held that a through route did not exist where there was no evidence that any shipment had ever been made over the alleged through route or that the carriers had ever offered through service over the route and the Court stated, “In short, the test of the existence of a through route is whether the participating carriers hold themselves out as offering through transportation service.”

Then this Court stated that otherwise in that case.

The carrier’s course of business negatives the existence of a through route and that was the test which the Commission sought to apply on that issue in this case.

On its report, the Commission put it this way, “It is necessary to determine whether the carriers in this proceeding hold themselves out as offering through transportation service from and to the points here concerned by the Ogden Gateway as indicated by their course of business in respect of traffic over the routes in question.

The facts bearing upon the existence of through routes are essentially undisputed.

As you’ve been told for a period of time beginning in 1897 through routes and joint rates applying to such routes were in existence to and from points in the excluded territory and from and to points east of Colorado via Ogden and the Rio Grande line.

By 1912, Union Pacific had progressively canceled these joint rates.

So far as the record shows the Union Pacific has never formally or in terms purported to cancel through routes with the Rio Grande and Ogden.

The evidence as to actual shipments over the Rio Grande via Ogden falls into several categories.

During World War II, about 19,000 carloads destined to the excluded territory, that is coming from points in the south and east, were diverted by Rio Grande to Union Pacific at Ogden or Salt Lake City.

These were shipments which have been originally routed to destinations in the excluded territory via Rio Grande and carriers such as Southern Pacific, Western Pacific with which Rio Grande does have through routes and joint rates.

But these shipments were diverted by Rio Grande to Union Pacific at Ogden or Salt Lake pursuant to war time emergency routing orders issued by the Interstate Commerce Commission under paragraphs 15 and 16 of Section 1.

Also, during World War II several special trains of troops and military equipment were initially routed from southern and eastern points to points of the Northwest Territory by Rio Grande, Ogden, Union Pacific.

Again, in February 1949 when Union Pacific’s main line through Cheyenne was blocked with snow, Union Pacific diverted it to Rio Grande between Denver and Utah junctions of those two lines about 1400 carloads.

This diversion too was pursuant to ICC service orders.

Now, in addition to this war time or emergency shipments there was evidence of other scattered shipments.

In 1948, a representative year there were 37 carload shipments moved on through bills of lading issued by Union Pacific or other connecting carriers in the north from points in the Northwest Territory by Union Pacific, Ogden, Rio Grande to Utah and Colorado common points served by both Union Pacific and Rio Grande.

And in the same year there were 18 westbound — 18 carloads westbound from points in the east by Rio Grande, Ogden, Union Pacific to destinations in the Northwest Territory.

Applying the Thompson case the Commission made the following findings as to these actual shipments.

First discussing the war time and emergency diversions of traffic the Commission said, this is at volume two of the transcript, page 1526, “These movements as well as those under service orders were made under emergency conditions and not in the ordinary course of the carrier’s business.

They show only that the Rio Grande routes were physically practicable and have no bearing upon the issue of whether or not these routes constitute through routes within the meaning of that term as used in the Act.”

In order words, the Commission was recognizing that on those war time and emergency diversion of traffic, the carriers involved had no choice.

They acted under the actual of potential compulsion of the Commission’s emergency routing orders in paragraphs 15 and 16 of — of Section 1.

More generally, the Commission found there is no indication that any of the defendants has ever solicited any traffic from and to the areas here concerned for routing over a Rio Grande route by which a higher combination rate is applied or has ever used such a Rio Grande routing except where called upon to do so by routing specified by a shipper or by prior connecting carrier.

In the other words, so far as this record shows the Commission said, “The carrier’s course of business has been and is to use the Union Pacific routes except where called upon to use the Rio Grande routes by force of shippers or connecting carriers’ routing.

The whole course of conduct of Union Pacific so far as revealed has been for many years and is now to guard jealously it’s long haul and not open commercially the Rio Grande routes on this traffic.”

So, the Commission concluded that there were at that time no through routes over the Rio — or over the Rio Grande via Ogden or Salt Lake City.

Audio Transcription for Oral Argument – April 24, 1956 in Denver & Rio Grande Western Railroad Company v. Union Pacific Railroad Company

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Robert W. Ginnane:

In the evidence in support of that conclusion can be summarized as — very briefly, it’s undisputed that Union Pacific has not held itself out in any affirmative or soliciting sense as offering through transportation service with Rio Grande by Ogden.

The — the record in this case bristles with statements, recognitions, and testimony by shippers and everyone else concerned that it was the policy of Union Pacific to hold on to it’s long haul from the northwest on it’s own lines through (Inaudible) of Cheyenne pleased.

With it the Commission correctly held that the war time and emergency routing did not constitute a course of business or any offer by Union Pacific of through transportation service.

In 1948, as represented here, there were evidence of a the total of 55 carload shipments which moved on through bills of lading over Rio Grande at the higher combination rates.

And the Commission characterized these scattered commercial shipments as of an isolated nature, isolated in that that they compare with total shipments of a 122,000 carloads moving in and out of the Northwest Territory each year.

Union Pacific representative testified as to these 55 shipments, for example, that they were obligated to comply with the routing specified by shippers.

And Rio Grande points to this and says that Section 15 (8) of the Intestate Commerce Act only gives a shipper the right to choose between alternative existing through routes.

So, they argued that if Union Pacific felt compelled as its representative testified to honor that the — to honor shippers’ choice of routing that they must have been doing so under compulsion of Section 15 (8) which gives a choice only between through routes and that this amounts to an admission that through routes were in existence.

On the other hand, there is evidence that some perhaps all of these 1948 scattered commercial shipments were routed by shippers who did not — who did not know or who overlooked the fact that joint rates were not applicable over the Rio Grande.

And one of these shipments for example, the difference between joint rates over Union Pacific and combination rates over Rio Grande amounted to $866.

Five members of the Commission joining in a majority report held that there must be proof that through routes existed in a practical, commercially feasible sense.

They were impressed by the general thrust of Section 15 (3) and (4) as interpreted only a few weeks before by this Court.

Sections which represent careful congressional restriction of the power to prescribe new through routes and the five Commissioners felt that it would be an evasion of Section 15 (4) defined that a through route existed merely on a showing that an on occasional shipper perhaps through an advertence specified movement over the alleged through route despite the prohibitively higher combination rates.

On the same evidence, the remaining five Commissioners were of the view that through routes were in existence as alleged by Rio Grande.

As stated in — a dissenting opinion in which Commissioners Mahaffey, Splawn and Cross concurred, they view the situation as follows, “All of these evidence clearly supports the finding that the routes are existing established through routes over which through routes apply and that the railroad participating therein consent to their use as through routes and freely hold themselves out as ready and willing to perform transportation service wholly.”

And further, after — after referring to this Court’s decision in Thompson, the three dissenting Commissioner said, “Here is — here, there is substantial evidence of a holding out that through transportation will be furnished and that execution of such offers by the issuance of through bills of lading.”

I should point out that those Commissioners dissenting relied upon the evidence of actual shipments both — that those consisting at the war time emergency routings, diversion of traffic and the — the commercial shipments as evidenced by the typical year 1948.

Since the Commission split five-to-five on it, what is your view about what the real test of that through — the close through route is?

Robert W. Ginnane:

Well, you will appreciate I don’t wish to be too dilemmatic in view of —

Well, I — I think it’s a difficult question now, my part apparently use — you — you equate of this — part of the Commission acquitted a — a through route with a joint rate.

Once you take off the joint rate then the through route becomes long distant commercially non-existent because by hypothesis nobody is going to ship over in a more expensive route.

Robert W. Ginnane:

Well, of course they were dealing with this situation.

In this situation at least the difference between joint rates and combination rates was substantial of whether that would always be true, I’m not confident to say.

In this case the difference between joint rates which would otherwise be applicable, where the transcontinental joint rates applicable to all these routes.

The difference between those joint rates and the combination rates was so great as to amount to a commercial closing of the route.

Out of a 122,000 carloads of shipments a year as in 1948, only a total of 55 both eastbound and westbound were shipped by Rio Grande, through shipments between the eastern points to the northwest.

Then from that, the five Commissioners concluded that the roads were in fact commercially close as though there had been a — a barrier placed across the track.

And the other — the other Commissioners, the other five Commissioners in effect that that there have been some shipments through.

They’ve been made on through bills of lading.

The routes are at least technically open.

Audio Transcription for Oral Argument – April 24, 1956 in Denver & Rio Grande Western Railroad Company v. Union Pacific Railroad Company

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Robert W. Ginnane:

The rates which apply have nothing to do with it.

Therefore, we should find that the through routes existing.

Now, I think the — I think the test to be applied as between this division between the Commissioners is, what fair concept test for through route were best to carry out the purpose of Congress particularly in Section 15.

In Section 15, particularly in Section 4, Congress, and this is the result of repeated — repeated legislative consideration has laid down real restrictions and the power of the Commission to establish through routes which will require a carrier to short-haul itself.

And everybody admits that in this situation the establishment of the through routes or the finding of the through routes exist and it subjects Union Pacific to substantial short-hauling, that’s undisputed, short-hauling which brings the case with — within Section 15 (4) and the limitation which Congress has carefully drawn up to protect carriers’ long-haul.

Now the —

Stanley Reed:

Five-to-five, did it leave the all through routes in?

Well, how — how did the motion come or how did the request come forth the Commission for a declaration on that there was a through rate?

Robert W. Ginnane:

Rio Grande filed a complaint in which it alleged that through routes existed and that Union Pacific was violating Sections 1, 3 and 15 by — by failing to establish reasonable joint rates with Rio Grande.

So, the first test — the — the first issue the Commission had to decide as posed by Rio Grande’s complaint, was whether or not through routes were already in existence.

Felix Frankfurter:

Now, both — the both — both the —

As to — what did the conclusion — what — since — you said that this five-to-five, where did that lead the conclusion or did you —

Robert W. Ginnane:

It left through — it left the Rio Grande without relief on that theory.

Yes.

Robert W. Ginnane:

Rio Grande carried the burden of persuading in effect of majority.

Felix Frankfurter:

How can you — (Voice Overlap) —

Stanley Reed:

Well, why — why solely if there were rates before?

Robert W. Ginnane:

Oh, yes.

But only at the higher — only in — prohibitively high combination rates.

Stanley Reed:

(Voice Overlap) — the through routes, as to the combination though not a joint rate.

Robert W. Ginnane:

Well, that was the first question the Commission had to decide.

That — that was the issue strongly controverted by Union Pacific.

I understand that but you make a motion, the motion is lost as — and according to what the answer is, you haven’t sustained what you wanted.

Now, what Union Pacific — that your position is this, was a motion made to give through rates or joint rates on the through route or to continue what was there before it.

Robert W. Ginnane:

Oh, no.

The Union — Rio Grande was very much dissatisfied of what they had before them.

They asked the Commission to hold, to find that through routes were in existence.

Yes.

Robert W. Ginnane:

And thereafter to order Rio — to order Union Pacific and the other defendant railroads to establish joint rates —

(Voice Overlap) —

Audio Transcription for Oral Argument – April 24, 1956 in Denver & Rio Grande Western Railroad Company v. Union Pacific Railroad Company

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Robert W. Ginnane:

— with Rio Grande over those routes.

They asked for an affirmative action?

Robert W. Ginnane:

Oh, they did indeed.

And they lost it.

Robert W. Ginnane:

The only affirmative action they have that — the only affirmative action they asked for was the establishment of joint rates that was on the assumption as they claim in their complaint that the through routes were already in existence.

But since it was denied by the defendant carriers that through routes did exist, the first issue that the Commission had to resolve was whether or not through routes were in existence.

Felix Frankfurter:

Mr. Ginnane, each of the five except of the Thompson case test —

Robert W. Ginnane:

Each of the 10 did.

Felix Frankfurter:

Pardon me?

Robert W. Ginnane:

Each of the 10, they simply disagreed with that.

Felix Frankfurter:

(Voice Overlap) — each of the two-five?

Robert W. Ginnane:

Oh, yes.

Felix Frankfurter:

And therefore, it was the determination by the respective five that it did or didn’t fall within an accepted and acknowledged test.

And that is a question of fact rather than a question of law, isn’t it?

Now, the Court of Appeals — are we to make this determination of facts?

This isn’t just a — just a subtle dialectic (Inaudible) —

Robert W. Ginnane:

Indeed, it’s not.

I — I can only say that the basic facts involved are essentially undisputed and as Your Honor knows, the district — the District Court in Colorado resolved them by — by holding — by finding that through routes did in fact exist.

Felix Frankfurter:

(Inaudible) — suggest that that’s to the other way.

Robert W. Ginnane:

The Nebraska Court never passed upon this —

Felix Frankfurter:

No.

Robert W. Ginnane:

— issue of the existence of through routes.

Felix Frankfurter:

No, but —

Robert W. Ginnane:

That was not presented to them.

Felix Frankfurter:

If it — it must have implied the facts on it on (Inaudible)

Robert W. Ginnane:

I think that’s fair, by implication.

Earl Warren:

We’ll recess now.