Union Pacific Railroad Company v. United States

PETITIONER:Union Pacific Railroad Company
RESPONDENT:United States
LOCATION:Approximately half-way between Santa Marta, Colombia and Miami. Florida (by water)

DOCKET NO.: 98
DECIDED BY: Warren Court (1958-1962)
LOWER COURT:

CITATION: 362 US 327 (1960)
ARGUED: Mar 23, 1960
DECIDED: Apr 04, 1960

Facts of the case

Question

Audio Transcription for Oral Argument – March 23, 1960 in Union Pacific Railroad Company v. United States

Earl Warren:

Number 98, Union Pacific Railroad Company, Appellant, versus United States.

Mr. Collins, you may proceed.

Elmer B. Collins:

May it please the Court.

This is a direct appeal from United States District Court for the Southern District of Iowa, a direct appeal from the summary judgment issued by that court.

The basis of the summary judgment being as I construe the Court’s decision that Union Pacific Railroad Company, appellant here, in furnishing and performing for shippers, the slow service or a fast service or any and all shippers, whichever service they elect, without any tariff specification or publication of either type of service, necessarily violates the Interstate Commerce Act, Section 6, paragraph 7 and Section 1 of the Elkins Act in furnishing the slow service.

The Court then issued an injunction enjoining the Union Pacific from performing the slow service without tariff publication or unless and until the railroad had a tariff lawfully on file with the Interstate Commerce Commission specifying the slow service or offering in published tariff form the slow service, but of course not the fast service, and specify an additional or extra charge for the slow service.

Now we will discuss two propositions or contentions.

First that the furnishing of either a fast or a slow service by a railroad, and in this case Union Pacific in particular, does not without tariff publication which is never been required, which is not expressly required by statute or by any rule, order or regulation issued by the Commission.

Furnished both or either, a slow or a fast service of the same published tariff rate, under those circumstances, does not violate either the Interstate Commerce Act or the Elkins Act.

I further contend that if there is anything wrong, however, in such furnishing of service without extra charge for the one service or tariff publication for the one service, then it involves matters that are so purely administrative.

That they belong within the primary jurisdiction of the Interstate Commerce Commission and should be dealt with by that Commission instead of trying to cure the problem, which I will shortly explain —

Does the District Court’s decision, Mr. Collins, affect the primary jurisdiction of the Interstate Commerce Commission?

Elmer B. Collins:

The District Court — what was your question please?

My question was whether the decision of the District Court affected in any way the primary jurisdiction.

Elmer B. Collins:

It does a very curious thing.

The — the holding of the Court, the conclusions of law of the District Court are flatly to the effect that the slow service violates the Elkins Act and Section 6 (7) of the Interstate Commerce Act.

The Court then after making those flat conclusions of law, which one would think would completely nullify the slow service, as the Court believe what it was saying, nevertheless, issues an injunction which says that “You’re enjoined from performing a slow service unless you file a tariff with the Interstate Commerce Commission and have it lawfully on file there specifying the slow service and naming special charge for it.”

The Court, however, refused to dismiss the complaint and remand this matter to the Commission, so we can have a doubt there with all other railroads that performed both slow and fast service.

Now, I’d like to have this map, these maps brought in here in the hope that you can at least see the black line from the bench.

The maps are in the record in this sad looking form and they require — require quite a bit of doing to unfold them.

They can be unfolded and examined closely.

I want to give you the background of this whole situation.

(Inaudible) if it is possible for you to see these black lines on the — well —

Mr. Collins, may I ask you —

Elmer B. Collins:

Well, that’s — that’s — that puts the case in its true light if we can — even if you we can’t see them, I’ll explain it [Laughs] by pointing to the northwest corner in the map.

There, I should say first that we have always had in the railroad business what is called “roller traffic”.

That’s the traffic that originates at its point of production.

The producer knows no buyer, but he knows the general area within which he generally finds the customer.

So he turns it over the railroad and started rolling, as we call it, and then transfer a buyer while it’s in — it’s moving for its destination.

That is a practice that is as old as railroads themselves.

Elmer B. Collins:

If he finds a buyer, he reconciles the carload or carloads to the new found customer.

This case involves lumber roller traffic and the mills are in the northwest or even in California.

There are all of these mill lumber rates from that territory to the east.

About 1930, the Interstate Commerce Commission in two decisions lifted or gave the long routes which are shown here in black down to Texas and to the — through — well through El Paso, through Denver, allowing the longer routes to participate at the same purpose tariff rates on lumber, which applied over the direct routes, and I am pointing right through the center of the (Inaudible), which is the line of the Union Pacific in red towards Chicago.

The — by allowing the same rates to apply over the very long routes and some of them are 4400 miles long as compared with the direct Union Pacific routes or the routes in which the Union Pacific participates are 2200 miles.

Roller lumber naturally went to these long routes that the Commission made the statutory adjustment to enable them to haul that traffic.

Earl Warren:

Does that made a part — as part of this roller service?

Is that what as to what the Commission did in that at that time?

Elmer B. Collins:

No, the — the roller service was not considered in the decision.

Earl Warren:

Well, what was this purpose of permitting them to go this long route?

Elmer B. Collins:

Because the long routes wanted to participate in — in any and all traffic that they could get over their long routes, when the roller traffic developed at the World War II among a few small businessmen in the northwest.

Earl Warren:

Yes I understand that part.

But — but what I am — you’re pointing this out to us as long, long route that they took.

Now, what I am interested in is to know whether this was done to accommodate the — the railroads and the shippers on — on this roller service that you’re talking about.

Elmer B. Collins:

Not in particular, no.

But it was done for any type of lumber.

Charles E. Whittaker:

Wasn’t it done, Mr.–

Earl Warren:

Well, pardon me.

Charles E. Whittaker:

Excuse me.

Go ahead Chief Justice.

Earl Warren:

I just want to ask, what was the purpose of — of permitting him to have this long route?

Elmer B. Collins:

Because the — the railroads wanted to get the traffic over the routes in for residents.

Earl Warren:

All right.

Was that a part of their — their tariffs?

Elmer B. Collins:

The — the tariffs — what the Commission’s decision amounted to was permission for the long routes, these shown in black, to become parties to the same tariff and rates that were already in existence over the shorter routes.

Earl Warren:

Oh, yes.

But that’s a part of their — of their regular tariff, their — their published rates.

Isn’t it?

Elmer B. Collins:

I mean when the roller traffic — lumbar tariff developed while its natural drift was to these longer routes because they wanted more time in transit.

Earl Warren:

Well now, did they permit them under the — under that long route that you’ve just shown us to put them of at sidings and let them — let them in all practical — for all practical purposes be stored there until — until shipper was ready to have them move again.

Elmer B. Collins:

Well, I haven’t examined the tariffs at such but I’m positive that there was no such provision in the tariff.

Earl Warren:

Yes.

Elmer B. Collins:

The tariffs don’t specify and the law does not require tariffs to specify the type of character or quantum of service that will be performed for published tariff rates.

Earl Warren:

Yes.

But what you are doing in this case is without any — any tariff rates taking them over those slow routes and not permitting them to — to be put on sidings until the — the commodity is sold and then — and then move them wherever the shipper wants them, isn’t that right?

Elmer B. Collins:

That’s now what this record shows.

Earl Warren:

But the — but —

Elmer B. Collins:

If you will look —

Earl Warren:

If it doesn’t, well, I am wrong.

Elmer B. Collins:

If you will look at the — the record beginning at page 134 and continuing on for several pages ending at page — with the — with the schedule at page 141 of the record, you will see what the Union Pacific offered to the shippers.

Now, that is a slow service compared to the fast service and it necessarily involves slow handling and breaking up a train at one division point and later putting it together and — and sending it on to a — a further division point.

It involves more handling than the fast service.

Earl Warren:

The slow service was — resulted merely from the necessities of the situation and not because they were permitting the — the goods to — to be in — in route longer than was necessary to make the trip over — over this route, is that right?

Elmer B. Collins:

In the — In the first place, Mr. Chief Justice, the Union Pacific and the other numerous railroads that form these direct short routes in order to compete and avoid being excluded from the roller lumber traffic had offered this slow service.

They wanted to make revenues from hauling the traffic.

Now, they offered it to the shippers who — who wanted it whether they were little businessmen as in the case here or big businessmen who complain the — the practices of the little businessmen and wanted to put them out of business.

The railroads want the traffic.

The direct lines want to compete with the long lines and they made this offer of slow service which we have done, the Union Pacific, for years.

We have done it on California perishables.

We have done it on Idaho potatoes, that they’re offering the service for at least 30 years, and this is the first time the Commission has object to it.

Now, it’s true.

The big lumber shippers as well as the small lumber shippers may have either the slow service or the fast service.

And the Commission says that the fact that we offer it to all alike, makes no difference, that because the slow service is of some benefit and they figure out maybe a $100 which they say is a demerits saving to the — to the one, who today, accepts the slow service, but tomorrow may want the faster service.

That by his acceptance of slow service today, he — he gains the possibility of avoiding the demerits charges at destination.

Perhaps, our slow service is unlawful and I call your attention to a calculation made in the Union Pacific’s brief.

It was — it’s a result of a calculation, but by the — a formula at the bottom of page 12, the formula is identified, entitle rail carload cost scales by territories and published by the Interstate Commerce Commission.

All these long securities routes using the Commission’s cost formula, that cost $1,400 approximately of railroad cost services which the shipper gets, including probably twice as much time to find a buyer, while it costs only $700 approximately in actual transportation effort and cost over our direct routes.

Well, the shipper can have either.

And we are not doing this to give the shipper something that he can’t get even in greater measure elsewhere, that is all the long routes.

Now, the —

Felix Frankfurter:

Mr. Collins, may I — you’re in the middle of a sentence.

I want you to finish.

Elmer B. Collins:

No, no.

Felix Frankfurter:

May I trouble you to repeat what you said a few minutes ago regarding the non requirement or perhaps even the forbidding and stating in the tariffs the services that a carrier may render.

You said something which —

Elmer B. Collins:

No, I said —

Felix Frankfurter:

— seems to me as a surprise.

Elmer B. Collins:

I said that the — or may I restate it perhaps in better language than I did.

Felix Frankfurter:

I am asking out of ignorance.

Elmer B. Collins:

Yes.

Section 6 of the Interstate Commerce Act requires railroads to publish tariffs of their rates and charges for their services.

It goes on to say that they shall publish privileges and facilities affecting the application or cost of transportation but it says nothing and neither does any — pardon me.

The — the Section further provides that we shall not only publish all rates and charges covering our services but that we shall publish all other charges proscribed by the Commission.

The Commission has never told us what other charges to publish.

Felix Frankfurter:

For instance, do you have to — do you have to include in the tariff I think to the (Inaudible).

Elmer B. Collins:

Well, yes.

Those are specific things go in the tariffs.

We —

Felix Frankfurter:

But transit — transit with advantages, you have to give those, don’t you?

Elmer B. Collins:

If we — if we publish transit privileges where they are — we could stop and they can mill their corn and ship it on.

Felix Frankfurter:

All that is to be put.

Elmer B. Collins:

Well, because it’s specified in the tariffs, that’s right, — in the statute.

Felix Frankfurter:

But then there is this omnibus call to which you just referred, namely in others — what was the phrase?

Elmer B. Collins:

All other charges required by the Commission.

Felix Frankfurter:

By the Commission.

And as to those that is categories of services not specified in the statute need not be enumerated in the tariff unless the Commission specifically provides so, is that it?

Elmer B. Collins:

That’s right.

Felix Frankfurter:

But —

Elmer B. Collins:

The whole thing is completely in the hands of the Commission.

And instead of — instead of issuing an order or holding a hearing as it should to develop the facts and determine maybe whether it wants to go back again to the first of the two decisions which it rendered, and they are cited in the brief, commodity rates on lumber and other forest products.

Elmer B. Collins:

In the first decision, the Commission said, “Well we’ll give the carriers relief, the long routes relief from Section 4.

But we’ll put a security limitation.

We’ll — we’ll allow only those routes that — to participate at the same rates which routes are only 33% longer than the direct routes.”

Well, then came the further, or reconsideration by the Commission of the same decision, they wiped out the security limitation which in effect, so far as roller traffic which is a very large segment of the traffic in this country excludes roller traffic from moving over the direct routes.

Felix Frankfurter:

When they give you relief under the long-and-short-haul clause, do they not specify precisely over what routes you can go?

Elmer B. Collins:

No.

They only approve proposals of the routes —

Felix Frankfurter:

Relief.

Elmer B. Collins:

— applying for relief.

Felix Frankfurter:

Without — without any specification as to what you can do within the limits, is that right?

Elmer B. Collins:

Well, the — the specification, whatever specifications or limitations are contained in the tariffs that are offered to the Commission in connection with which relief is asked.

So it would vary from one set of tariffs to another that were offered.

And it happens that these lumber tariffs are wide open as the — the routes are — are literally thousands and the shippers who want additional time can keep on routing and backhauling and all that sort of thing over the securities routes.

Now, I — I contend that our furnishing of slow service without tariff publication and there is no tariff publication for any kind of service.

So I have said the law doesn’t require — does not and without an extra charge, does not violate the Interstate Commerce Act nor the Elkins Act.

First, because there’s nothing expressly in the law requiring us to publish tariffs or to haul no traffic faster than another roller traffic.

There’s no order, rule or regulation require of the Commission, no exercise of the Commission’s vast powers under the Section 6 to control this situation.

And finally, by offering this service, the two services, to all shippers for the same rate, avoids any discrimination or any possibility of discrimination unless we are to the point now where we are obliged to conclude that because a man takes a carload service today, he — just for illustration, he discriminates against himself for not taking a less than carload service or if he fix the car — less than car load which is hired.

Felix Frankfurter:

Is your — is your — am I always simplifying if I state the question, the case that you present is that the Commission if it deemed this a hole to be plugged could’ve plugged it that it had to be done so, therefore, you have the freedom that you — that you urged, is that right?

Elmer B. Collins:

Yes; yes.

Felix Frankfurter:

Is that the case?

Elmer B. Collins:

Yes, that’s the case.

I say this that the situation here is practically identical to the one this Court dealt with in the Cunard Navigation case where it was two rates, the dual rate, instead of dual services offered for the same work.

And again in the Far East case in which the Government itself brought a suit for injunction, and in both cases, this Court said, “Well, you’ve got a problem over which the courts have jurisdiction and authority to issue an injunction.

But the subject matter of the suit, although antitrust violations are clearly alleged, then you would be entitled to relief which we have authority to a grant.”

Felix Frankfurter:

What does the inference of the case done to those two cases at which you are referring.

Elmer B. Collins:

Well, the — the opinion in the (Inaudible) case clearly says that it makes no — it does not affect and it is not inconsistent with the principle of your decisions in the Far East and in the — the Cunard case and oblige to take what (Inaudible) opinion says as to respect.

So the way is open to you to refer this matter to the Interstate Commerce Commission so that the Commission may investigate the whole subject and not try to cure it by cutting the Union Pacific out through injunctional processes.

The situation —

Supposing that the District Court in this case had issued a temporary injunction and said — in this kind of a permission (Inaudible).

Elmer B. Collins:

Well, he didn’t do that but he — he tried to do it in effect.

You have substantially the same thing as to what they did do though?

Elmer B. Collins:

Yes, I think in — in substance —

If you’re — you’re going to get before the Commission, they didn’t fix the rates, they didn’t say you could or couldn’t do this.

They said that you simply could not operate without specifying this new tariff.

Elmer B. Collins:

No.

He said unless the Commission excuses from —

Yes but —

Elmer B. Collins:

After finding that we’re in flatly in violation of the law, now, we don’t want to file the tariff of schedules and pre-insert this.

We have never done it in the setting of three years of the history of the Interstate Commerce Act, the Commission has never required us to do it.

There are hundreds of practical reasons why railroads can’t file operating schedules or quantum of service specifications in the tariffs which change from day to day.

All you’re asking is for an opportunity to go to the Commission.

Elmer B. Collins:

Well, I am saying that — leave us alone if — unless you find something wrong.

We don’t want to go any place except more than the destination with our traffics.

But if somebody finds fault with us for what we were doing, then we think the — the solution is not a judicial problem but an ICC problem.

I want to reserve five minutes.

Earl Warren:

You may, you may, Mr. Collins.

Mr. Laughlin.

John G. Laughlin, Jr.:

Mr. Chief Justice, may it please the Court.

It is not an uncommon occurrence for a shipper or a consignee of a shipment to have occasion to use a freight car as a — an instrument of storage.

There is nothing in either terms of statute or tariff which prevents a shipper from making misuse of a freight car.

However, because it is such a common occurrence, all carriers including the Union Pacific have enforced in effect a demurrage tariff.

The purpose of a demurrage tariff is to discourage the undue detention of freight cars and to provide an element of compensation to the carrier.

It is only, we submit, the existence of this demurrage tariff that stands in the way of an open holding of freight cars for the convenience and accommodation of the shippers.

We submit that it is the — the practice that has been adopted by the Union Pacific and by other carriers of intentionally delaying the shipments while in transit so as to accord additional time for the consignee or the owner of the shipment to find a buyer for the product, is to avoid the application and observance of the demurrage tariffs.

Felix Frankfurter:

Let me ask you, as discussed in the outset, Mr. Laughlin.

Suppose there were no question that what the Union Pacific did was not discriminatory.

Maybe — maybe once can make that — I am talking about what the record shows.

But suppose that this was open to all who might avail themselves, would your position be the same?

John G. Laughlin, Jr.:

Yes, insofar as we claim that the practice is violative of both the Interstate Commerce Act and the Elkins Act.

Felix Frankfurter:

So the Elkins Act must be a departure from the public tariff.

John G. Laughlin, Jr.:

Well, the —

Felix Frankfurter:

And Mr. Collins is right that — well, I suppose I found a theory that — that although — although this — what the service they gave need not be in the — in the tariff, it — it’s an (Inaudible) upon what is in the tariff.

That’s your position, is that it?

John G. Laughlin, Jr.:

Yes, in — in the sense that we say that in terms of the Elkins Act, it is a concession, a rebate, on eliminating or avoiding the word discrimination.

Felix Frankfurter:

Yes.

John G. Laughlin, Jr.:

Whereby —

Felix Frankfurter:

Departure — knowing departure from the public tariff.

John G. Laughlin, Jr.:

A departure from — or a failure to — or by property, it’s a transfer afforded by less than the tariff rates.

Felix Frankfurter:

Well, that’s on the assumption that there is an implied prohibition against doing this in the tariff and that they didn’t set forth this service.

John G. Laughlin, Jr.:

Yes.

Felix Frankfurter:

You must imply that — you must imply that, don’t you?

John G. Laughlin, Jr.:

Yes.

We — we put in terms of a concession or advantage.

It must be a concession or advantage of some value to the shipper.

That element we think is quite clearly present in the case.

Felix Frankfurter:

Could they put this into the tariff or could if it’s conceivable that if they spread this from the tariff and submitted it to the Commission, that they would have sanctioned it?

Although the Commission have said this language itself in such abusive and forbid the practice.

John G. Laughlin, Jr.:

That — that is conceivable that they could go either way and of course that is —

Earl Warren:

Aren’t there some proceedings of that kind going on before the Commission?

John G. Laughlin, Jr.:

There are, wherein involving six carriers other than the Union Pacific.

Earl Warren:

Yes.

Felix Frankfurter:

Well, then you’d have a hard time convicting them, because Elkins Act as a criminal statute convicting them of — of the Elkins Act offense, wouldn’t you?

John G. Laughlin, Jr.:

For — for purposes of the criminal statute, it might be difficult.

Felix Frankfurter:

Well, It would — it’s the same statute?

John G. Laughlin, Jr.:

Yes.

I mean for purposes of the conviction, it might be difficult to the fact.

Felix Frankfurter:

The fact that you now have a proceeding before you, the result of which might be a legalization, a form of legalization of this thing, makes it very questionable of the violation of the Elkins Act.

John G. Laughlin, Jr.:

Well, if it is —

Felix Frankfurter:

Because I can’t see that the Commission can, except by changing the tariff (Inaudible), condone the process on the Elkins Act.

John G. Laughlin, Jr.:

Well, and I think this is true also that the Commission will not determine whether or not this practice, in the service that is rendered here, is within the prohibitions of the Elkins Act.

That is beyond its — its powers.

Felix Frankfurter:

No.

But you’re here — but here saying this is a violation of the Elkins Act.

John G. Laughlin, Jr.:

That’s right.

Felix Frankfurter:

So that the Commission is taking the position that it is in violation of the Elkins Act.

John G. Laughlin, Jr.:

Well, we are here at the request of the Interstate Commerce Commission.

That is quite right.

Earl Warren:

Mr. Laughlin, I was a little surprised to hear you say that these unnecessary delays that the shipper is accorded on this trip is — is no violation of any kind, that he’s entitled to — to have that.

Now, I noticed that the Court found that the — that they put them on this — these cars unnecessarily on sidings and that — that that caused undue expense to the railroads.

Now, I was wondering in view of your statement, what would be the effect if they — if they took — took the lumber right straight through to a destination and then left it there on a siding until they sold it.

John G. Laughlin, Jr.:

Well if — once it reaches its destination, then they have 24 hours in which to re-consign it or 48 hours in which to unload it.

And at that point the demurrage tariff becomes applicable.

Earl Warren:

Well, leave the demurrage — demurrage out of it because I — I remember, you said that if it wasn’t for the demurrage thing, there wouldn’t be any — any question about it.

John G. Laughlin, Jr.:

In terms of existing tariff or this — of this — of statutory proscription.

Earl Warren:

— but didn’t the B&O case in 305 U.S. hold that they could not give them the equivalent storage in that manner?

John G. Laughlin, Jr.:

Of course, B&O case was a Commission proceeding in which the railroads were providing in transit warehousing.

I don’t think the decision was that they could do it, but where the compensation was — where the service was rendered by the — by the carriers at less than cost, then they were violate — violating Section 6 (7) of the Interstate Commerce Act forbidding the receipt of less than — the less compensation than the rate tariff provided.

Felix Frankfurter:

But you’re saying in effect — aren’t you saying in effect to pursue the Chief Justice’s question that the device of this thing is that it’s really an evasion of the of the demurrage requirement?

John G. Laughlin, Jr.:

Exactly.

Felix Frankfurter:

That’s your case, isn’t it?

John G. Laughlin, Jr.:

And — and evading and in adopting this device, they have run a foul of Section 6 (7) of the Interstate Commerce Act and of course the Elkins Act.

Now, the Section 6 (1) of the Commerce Act requires not only what the carriers status rates but all privileges and facilities, accorded a shipper that go or have any bearing or effect upon the rate itself.

Now, it is that the service that they provide which we — we submit is considerably more than the mere fast service and slow service.

Earl Warren:

Well, that’s what I — that’s what I understood your case was but I — I thought in your opening statement, you said that you’re only interested in the question of demurrage.

John G. Laughlin, Jr.:

Not only interested in that, I merely referred to the demurrage tariffs as pointing out the source of this present controversy and the source of the difficulty that we think the Union —

Earl Warren:

Yes.

John G. Laughlin, Jr.:

— Pacific and other carriers are here in now.

Earl Warren:

But there are other factors in your case than demurrage, is that right?

John G. Laughlin, Jr.:

Yes —

Earl Warren:

Well —

John G. Laughlin, Jr.:

— because there is no technical — the demurrage tariffs never become applicable on these transit shipments, where they have —

Earl Warren:

Not in effect.

John G. Laughlin, Jr.:

— not set off these sidings — sidings designated by the shipper where they’re set off by the carrier knowing what the shipper desires that does not reach its consignment point within a time that a shipment would ordinarily arrive.

Earl Warren:

But they — but the District Court made some findings which went over showing us concern with things other than — other than demurrage.

John G. Laughlin, Jr.:

That’s what they —

Earl Warren:

Now, are you — are those still in the case? Are you interested in —

John G. Laughlin, Jr.:

They are very much in — very much in the case.

Earl Warren:

They are in the case.

John G. Laughlin, Jr.:

Because they are — these — these —

Earl Warren:

Well, I won’t trouble you with this.

John G. Laughlin, Jr.:

— the findings of the District Court establish —

Earl Warren:

I won’t — I won’t trouble you to say how now.

Do it in your own time.

John G. Laughlin, Jr.:

All right.

Earl Warren:

I just want to know – if they are in or they are not.

Hugo L. Black:

You could help me if you’d — to know just what it is you’re claiming if you’d let — answer this question, which you — maybe you can.

Suppose the railroad starts carrying freight in San Francisco to Chicago.

They agreed in advance that they are going to make 15 stops on the way for two days each.

What law would they violate if any?

John G. Laughlin, Jr.:

Is this an agreement between the carrier and a particular shipper?

Hugo L. Black:

Yes.

John G. Laughlin, Jr.:

Well, I think that’s the case that we have here now.

Hugo L. Black:

Well, what law would — I — I was trying to get one that would show in an exact created form, they just agreed that they’re going to stop 15 times on the way.

John G. Laughlin, Jr.:

Well, if the — the if the —

Hugo L. Black:

Well, what law would they violate by doing it, if any?

John G. Laughlin, Jr.:

Well, they would violate in our — in our judgment, Section 6 (7) and Section 1 of the Elkins Act if the purpose of these 15 stops was to give the shipper a particular service not specified in the tariff and the service of value to the shipper, whereby the transportation rate or — or a rate less than the published transportation rate was realized but the carrier.

Felix Frankfurter:

Well, the shipper in Justice Black’s question had — had 15 plans separated, geographically separated.

John G. Laughlin, Jr.:

15 plan?

Felix Frankfurter:

Plans.

John G. Laughlin, Jr.:

Plant.

Felix Frankfurter:

And that each stop that Justice Black hypothesized, they put on some of these stops, which they distributed for purposes of — for intra — intra-enterprise reasons.

They’ve got the 15 places, they’ve processed something, but it’s all on the company.

John G. Laughlin, Jr.:

And these are regularly serviced by the carrier.

Felix Frankfurter:

Yes.

John G. Laughlin, Jr.:

Well, I think it would be a different case in answer to both questions —

Felix Frankfurter:

Well, why would it be different case?

John G. Laughlin, Jr.:

If these 15 stops were for operational purposes insofar as the carrier is concerned and —

Felix Frankfurter:

In the engine — there’s something the matter with the engine.

John G. Laughlin, Jr.:

Well, that or if they are required this service or render a transportation service to 15 communities in route.

Hugo L. Black:

Well, suppose they are not, suppose that the railroad agreed to them and they want that done.

They — they wanted to stay there two days because they can utilize the car during that time, 15 times and 15 stops.

Would that violate any — any law and what?

John G. Laughlin, Jr.:

Well, I would say, again, the answer would be that if it in anyway that the service is rendered for the convenience or the accommodation of the shipper, then in that event it foul runs into both Section 6 (7) and the Elkins Act.

Felix Frankfurter:

It wouldn’t be a demurrage problem?

John G. Laughlin, Jr.:

Not a demurrage problem.

That would eliminate the problem with that.

But we have —

Hugo L. Black:

Is it your — basis of your argument here that is done for the convenience of the shipper?

John G. Laughlin, Jr.:

Oh, I don’t there is any question about it.

Hugo L. Black:

And it’s — and therefore, comes within the type of situation of —

John G. Laughlin, Jr.:

It’s then within the Elkins Act.

It’s for the convenience of the shipper.

It’s an inducement to the shipper to use the traffic earlier to place its traffic upon the — the lines of the Union Pacific.

Felix Frankfurter:

And the Commission could fine — I am asking.

Could the Commission find in the pending proceeding that under the same great charges, they could make that accommodation that is now right in the tariff, specifically.

John G. Laughlin, Jr.:

They — they could do so, I would say they — the Commission could —

Felix Frankfurter:

Although this would only advantage as for big shippers.

John G. Laughlin, Jr.:

Pardon?

Felix Frankfurter:

Although it would only advantage a big shipper or big shippers.

John G. Laughlin, Jr.:

Well, that —

Felix Frankfurter:

I mean not that they would exclude small shippers but that their business wouldn’t bring this kind of advantage into being.

John G. Laughlin, Jr.:

Probably, primarily to the advantage of the big shippers.

Felix Frankfurter:

But the Commission put in the pending proceedings authorizing this (Inaudible).

John G. Laughlin, Jr.:

It could approve — it could approve the schedules proposed by the six carriers and would determine that there was no unjust discrimination, undue advantage or preference, and that the tariff rates were not unreasonable.

Now, I think it is significant in reference to the pending Commission proceedings that the nature of the tariffs that the Commission now has before it filed by the six other carriers, or in effect it — exemption to the demurrage tariffs that these carriers that Union Pacific have on file.

Earl Warren:

May I ask this, Mr. Laughlin?

Are those six companies that have the hearings now before the Commission being permitted — are they being permitted now during the pendency of this proceedings to do the things comparable to what these people are enjoined from doing?

John G. Laughlin, Jr.:

The — the proposed schedules that they have on file with the Commission are now in effect and have been since June of 1959.

Earl Warren:

They posted them as schedules.

John G. Laughlin, Jr.:

That’s right, in tariff form and of course these schedules provide for a 15-day free hold time on lumber shipments at various points on the carrier’s lines.

They could hold them up to 15 days on — on — at — on one carrier, their connecting carriers.

Presumably, they could add another 15 days at that point.

The — the Commission proceedings or the Commission’s determination with respect to the reasonableness or the lawfulness of these proposed tariffs will not necessarily have any bearing or determination as to the problem we have here, insofar as the carrier may still — if 15 days isn’t enough to suit the shippers needs, he may still set the car off at — at sidings in order to give him a little — a little more time.

So that even if the Commission were to — to approve these schedules that are before it, we would still have the problem here whether independently of the tariff provision, it is unlawful for the carrier, in terms of Section 6 (7) and the Elkins Act to intentionally delay the shipment beyond the 15-day hold period or the — for purposes of the shipper’s desires.

Charles E. Whittaker:

I wonder —

Earl Warren:

Do I — do I understand then that — that although those six companies have done it, the Union Pacific refuses to — to file schedules and avail itself for the same procedure that these six companies have.

John G. Laughlin, Jr.:

That’s right.

The — these — these six carriers filed their tariffs after the institution of this proceeding, and well, it still on its early stages in the District Court.

And in that connection, I point out that the injunction which we hope will go into effect in this case is — is in effect only, unless and until the Union Pacific files with the Interstate Commerce Commission a tariff providing for this service and naming the rates and charges if any, for this special service that they render to lumber companies.

I thought your distinction was to suspend the tariff, I suppose.

John G. Laughlin, Jr.:

I beg your pardon?

Then the Commission could suspend the — suspend the tariff or they consider them?

John G. Laughlin, Jr.:

Yes.

That in fact was what was done with respect to this, the tariffs filed by the six carriers.

They were suspended but when there was no permission or termination before the expiration of the period of suspension, then the tariffs became operative.

Charles E. Whittaker:

I wonder Mr. Laughlin if you would have the same problem that’s presented here if filed tariffs expressly provided for this service and allowed a fix number of free days?

John G. Laughlin, Jr.:

Would —

Charles E. Whittaker:

Would you still have — if a tariff, if a filed tariff did provide for a free time at, say, Ogden, Utah in Union Pacific system, which is a point, involved here, of 12 days.

Would you still have this problem?

Charles E. Whittaker:

Could they lay — let the cars lie there for four or five more days without violating that filed tariff?

John G. Laughlin, Jr.:

Well, if — if it were held at that point for — for 12 days, then according to the tariffs that then beyond 12-day period, your demurrage tariff would become applicable.

Then but to answer your question, if they move it out of Ogden into a terminal somewhere along the way and set it off there for another five days and that terminal was not named as a free time hold point, then we have the problem that we’ve got here.

Charles E. Whittaker:

They could — could not so as to tariff provide that they’d be allowed only so many days as hold time throughout the whole transit.

John G. Laughlin, Jr.:

Well, the — the point of fact, present tariffs before the Commission do not, as I understand and so provide.

So that I would rather say, depending on the number of carriers involved, conceivably, you could have had four, five, 15-day hold period then in the movement from the point of origin to the point of final consignment.

Charles E. Whittaker:

Well, the question if I may ask you.

You said — you dropped that point.

What would be wrong if the carrier agrees with the shipper for making of a fix number of stops between Chicago and San Francisco.

(Inaudible) contrary to its published (Inaudible)?

John G. Laughlin, Jr.:

Contrary to its existing tariff, I think, quite clearly not.

Charles E. Whittaker:

It must transit at all in accordance with that published form.

John G. Laughlin, Jr.:

Yes.

I think, that — that the — the fact that it is required or that the law requires that it — that the publication of a tariff is so that it will be open and available to all and that the possibility, even the possibility of such private agreement between carrier and shipper as you described it, this cannot exist.

And, of course well, that was reasonably plain from the Interstate Commerce Act, the Elkins Act some — some — coming some 16 years later.

It was to further arm the Commission with the criminal sanctions that appear in Section 1 of the Elkins Act.

And at the same time, of course, Congress made provisions whereby the courts could be invoked to put an end and a summary end to discriminations or practices, whereby railroad transport property at less than its existing tariff rates.

That I think appropriately brings me to the question with respect to the primary jurisdiction that of course was raised in the District Court after the Commission undertook its investigation of the tariffs filed by the six other carriers and the point that was made to the District Court.

Well, that having undertaken this investigation, the Interstate Commerce Commission had superseded the jurisdiction of the District Court for further proceedings by that Court.

At this point, the case was at the answer stage, would be futile and useless.

And that for that reason, the Court should dismiss the government’s complaint and let the Commission go forward with the problem.

Our answers to that are, first, that as I’ve already indicated, that the Union Pacific of course is not a party to the proceedings before the Interstate Commerce Commission and that the issues, the questions that the Commission itself will resolve in the pending proceeding are totally different than those that were considered and determined by the District Court here.

I refer of course to the fact the Commission is concerned with whether or not there are undue advantages or preferences according to shippers who are in a position to take advantage of the exemptions embodied in the proposed tariffs.

And whether or not the — the practice that they proposed to adopt and follow will be an unreasonable one.

Now, we are of course, in this case, are not in the least concerned with whether given the tariff provision providing for this type of service, describing the privileges and facilities that are made available to the shipper as to whether they are reasonable or unreasonable is not a matter that the District Court concerned itself with.

Nor are we concerned with whether or not it is an undue preference or an undue advantage accorded to particular shippers.

The Elkins Act, of course, outlaws any advantage and prohibits any concession, rebate or discrimination whereby property is transported at less than tariff rates.

So, we have that element to the dissimilarity of the issues in the — in the Commission proceeding and — and the issues that are before the District Court or were before the District Court in this Elkins Act proceeding.

Felix Frankfurter:

But we have — but the Commission is asking the Court to grant an injunction.

And therefore, the usual considerations guiding a Court of Equity in granting or denying an injunction become relevant and wholly apart from the question whether the — the erred legal question whether the proceeding before the Commission has or has not superseded this action as to which one could easily and readily say no, it hasn’t, doesn’t leave unanswered, whether or not, considering that the same subject matter ultimately preferential treatment of a shipper for that’s what this is, isn’t it?

Felix Frankfurter:

I don’t mean vis-à-vis some other shippers but as —

John G. Laughlin, Jr.:

Yes.

Felix Frankfurter:

— against the yardstick of the tariff.

That issue is before the Commission because it granted the insertion of the addition to the tariff.

This service, namely — there would be no Elkins Act on which to — with which to operate, and therefore, there is, for me at least, the serious question whether considering the fact that we’re dealing with complicated tariff.

I don’t know whether lumber tariffs are as complicated as grain tariffs with which I had once struggled.

Whether in light of the fact that the Commission is not considering, and it’s saying whether or not this very kind of thing should be legalized, an injunction is the appropriate thing to ask to the Court of Equity.

John G. Laughlin, Jr.:

Well, I think the — the distinction must be this, Mr. Justice Frankfurter, that the Commission may decide that this is a reasonable or an unreasonable practice.

But again, this issue of reasonableness is not —

Felix Frankfurter:

I understand —

John G. Laughlin, Jr.:

— not a factor and —

Felix Frankfurter:

— the argument that is something that has nothing to do with reasonable or unreasonable —

John G. Laughlin, Jr.:

Yes.

Felix Frankfurter:

— it’s the fixed yardstick.

I am suggesting that the yardstick would be altered if this kind of a thing is allowed.

John G. Laughlin, Jr.:

Well, certainly it — it would satisfy Section 6 (7) and that it would be open to — to all that there would be no violation.

Felix Frankfurter:

Then there’d be no violation of the Elkins Act.

John G. Laughlin, Jr.:

Of Section 6 (7) but I don’t know.

I don’t — I don’t think that it necessarily follows.

Felix Frankfurter:

I don’t understand.

John G. Laughlin, Jr.:

That if a —

Felix Frankfurter:

If it come about — if it — if — if it’s included in the tariff, there can’t be a departure from the tariff.

John G. Laughlin, Jr.:

Yes.

But it could still be a device whereby a property is transported at less than tariff rates and would be —

Felix Frankfurter:

Not — not if you — not if it seeks — if a tariff permits it.

And as I understand it —

John G. Laughlin, Jr.:

Well, I — I am referring to — no to the — when I say that, to the device and the carrier imposing a delay beyond what the — the tariff provision provides for.

Felix Frankfurter:

Well, of course, you can’t do that.

John G. Laughlin, Jr.:

And — and of course, the — the fact that the Union Pacific is not before the Commission and the Commission will not decide whether or not without a tariff provision, this sort of a practice is afoul the —

Felix Frankfurter:

You’re not seriously suggesting that if relief of this kind was given to other shippers that it would not effect the position of the Union Pacific.

John G. Laughlin, Jr.:

No.

Because, I think, it’s — the relief is granted to other carriers then the Union Pacific will be in there at the next day with the tariff of its own.

Felix Frankfurter:

And therefore it is very relevant, what’s going on there now, isn’t it?

Therefore, the face of the Union Pacific is affected by the proceedings affecting six other shippers of which it is not a problem.

John G. Laughlin, Jr.:

Well, to put it the other way.

If the Commission decides that it is unreasonable, then we are still are in the position of the Union Pacific to say, “Well, it’s unreasonable with the tariff.”

But we don’t have such a tariff, but we’ve — so we can do the same, in effect, the same thing without a tariff.

Felix Frankfurter:

Well, I don’t —

John G. Laughlin, Jr.:

Well, they’re — they’re —

Felix Frankfurter:

I don’t —

John G. Laughlin, Jr.:

— they’re having it both ways.

Felix Frankfurter:

Do you think that would be very impressive argument?

That if it’s — if it can’t then be put in a tariff —

John G. Laughlin, Jr.:

Well, I am —

Felix Frankfurter:

— they can do it without a tariff?

John G. Laughlin, Jr.:

I am saying that we would have to reinstitute this proceeding if — if they continue the practice that they are presently engaged in.

And we think that because the District Court impose injunction here is — is affecting only until and unless the Union Pacific conforms to the practice and the apparent recognition of the other carriers that the Court here afar from invading on coaching upon the jurisdiction, the primary jurisdiction that —

Felix Frankfurter:

And I am suggesting that.

That would be my question.

John G. Laughlin, Jr.:

I understand that.

Earl Warren:

Mr. Laughlin, as I — as I understand it, all of you’re interested in is too see that the Union Pacific files this tariff as these other six companies have and submits itself to the jurisdiction of the — of the Commission to determine whether that tariff is reasonable or unreasonable in accordance with law.

John G. Laughlin, Jr.:

That — that is our answer to the primary jurisdiction point.

Earl Warren:

Yes.

John G. Laughlin, Jr.:

Of course we are interested in having the carriers abide by the Interstate Commerce Act and —

Earl Warren:

Oh — Oh, yes, of course.

John G. Laughlin, Jr.:

That of course, is the purpose of the suit that was commenced at a time —

Earl Warren:

Yes.

John G. Laughlin, Jr.:

— not only as to Union Pacific but one other, presently against one other carrier.

And the six proposed schedules that are now before the Commission came sometime later.

Potter Stewart:

Mr. Laughlin, it’s not entirely clear to me what the — how apart — apart you are.

Potter Stewart:

You — you have the two side of the positions are, because the appellant railroad, as is inclusion of its brief, asked that the judgment below be reversed and the case remanded to the District Court with directions to dismiss the complaint and to remand the case to the Interstate Commerce Commission for full investigation of the practices of all the railroads and so on to the end of determining desirable uniformity and fair competitive relations among all the railroads participating in the roller lumber traffic.

And the terms of the order granting the injunction appearing on page 225 of the record, orders this Union Pacific Railroad, does it not, to cease and desist from carrying on these practices unless and until such time, as there is enforced with respect to this railroad, a tariff on file with the Interstate Commerce Commission naming the rates and charges for such privileges.

Now, I gather that the difference, the basic difference, is that the appellant here says that it can do these things under its existing tariffs.

John G. Laughlin, Jr.:

Without violating any statute.

Potter Stewart:

Without violating any statute.

And that your position is that perhaps it can do these things under new tariffs and that that’s a matter for the Interstate Commerce Commission to determine.

But that in any event, it cannot do it under its existing tariffs without violating the statute.

Is that the basic difference between here?

John G. Laughlin, Jr.:

I think that’s a — it’s a fair statement of it that they cannot do this — their — their present practice cannot be conducted under their existing tariffs and in — within the law.

Potter Stewart:

Am I right in my understanding that tariffs, during the whole history of the Interstate Commerce Commission have not traditionally and historically included any references to the number of stops or the speed of the trains or the —

John G. Laughlin, Jr.:

I think that is correct.

Potter Stewart:

— how fast or how slow they went.

John G. Laughlin, Jr.:

That is correct.

Potter Stewart:

That’s correct.

This is the — this is brand new so far as that goes, is that right?

John G. Laughlin, Jr.:

Well, it’s — there’s always been a requirement that they state in their tariff the privileges and facilities accorded or available to a shipper.

Potter Stewart:

But there’s never been any (Voice Overlap) —

John G. Laughlin, Jr.:

No timetable.

Potter Stewart:

Any — no timetable, no reference of any kind to the — to the speed whether it’d be a slow speed or fast speed.

John G. Laughlin, Jr.:

Or fast — or fast train, but Union Pacific —

Potter Stewart:

Or to the number of stops.

John G. Laughlin, Jr.:

— there is considerably more involved here than a mere difference in timetables or operating schedules.

Earl Warren:

Mr. Collins.

Elmer B. Collins:

Your Honors, all these reasons just recited by counsel for escaping the doctrine of primary jurisdiction were purged in the Cunar and the Far East cases and were rejected by this Court.

It’s not a simple matter.

This case is — doesn’t present the simple question of us filing a tariff with the Commission and knowing that the Commission will take it out like it has up to date this tariffs of the six railroads.

While we don’t ask for a hold service, we don’t offer a 15-day free hold service, we offer a slow railroad service just like we used to on the go, of course, limited from Chicago to San Francisco, 58 hours or 39 hours for the same price on the City of San Francisco.

Earl Warren:

Well, that wasn’t for the pleasure of the passengers though.

Elmer B. Collins:

Well —

Earl Warren:

I’ve read in it —

Elmer B. Collins:

I — I think — I’ll have to disagree with you, sir.[Laughs]

You — you’re a man who likes to get around the world in a hurry [Laughs] but a lot of people like to go slow and a lot of traffic moves slow.[Laughter]

The — you’d be amazed that the number of people who — who picked and choose between three types of service, passenger service, same pullman fare, same railroad fare.

Now, the whimsicalities of the public cannot be overlooked if you’re tying to operate a common carrier.

The needs of the shipping public can’t be overlooked.

So where — but while the pendency of the proceeding before the Interstate Commerce Commission is — is not the solution that I asked for, as you just referred to, Mr. Justice.

So, I want the Commission, and the Union Pacific wants the Commission, to stop piecemealing and biting off bits of this problem and saying to me, “Now, you come and file a tariff with the Commission and we’ll kick it out, that will be a view of justice.”

It said that to these other six railroad but it’s now reopened them for reconsideration.

But they held at their tariffs providing for 15-day hold service is unreasonable.

I say to this Court that the only question involved in what Union Pacific is doing actually is whether or not the freight rate we collect is reasonable for either or both, a slow service or a fast service.

And we don’t have to publish the type of service in the tariff because the law doesn’t say so expressly and neither does the Commission.

I have set forth in the Union Pacific’s brief a rather nasty little accusation against the Commission, which I dislike to make but it’s the truth that they have piecemealed this — their dealing with this thing.

At first, they — they opened up additional securities routes, then they — they issued order 9, 10 which stopped anything but the fastest service that a shipper could — the railroad could give.

And they’ve done the other thing that I’ve recited in their brief and then I quote from former Justice — the late Cardozo’s observations of — of — and basis on which he repulse the Commission for piecemealing and putting off until tomorrow the work it should do today.

Now, if there anything wrong in what we are doing, let’s have it out before the one tribunal that has the authority to apply, to cover the whole situation and provide uniformity of practices among the carriers, readjust between the securities routes and the direct routes so that none of us would be starved out of this traffic.

The Commission has full investigative power and if anybody is dissatisfied of what it does, we will then — can get judicial review of whatever it says if we feel that that’s necessary.

Felix Frankfurter:

Mr. Collins.

Earl Warren:

Well, isn’t —

Felix Frankfurter:

Go on.

Earl Warren:

But isn’t the normal way to do that for you to file your rates in and — and let the Commission investigate it?

Elmer B. Collins:

We filed the rates.

They’ve been on file for years.

Earl Warren:

No, no.

Not for this for this service that you’re rendering now.

Not for this —

Elmer B. Collins:

You mean file a rate, a — a tariff charging more for the slow service?

Earl Warren:

Well, I am not — I am not saying what kind you should charge but you — but you haven’t — you — you haven’t filed any rates, as I understand it, for this particular kind of a service?

Elmer B. Collins:

MYes, we have.

We have a published tariff rate for all lumber service over from the northwest to eastern markets but in no tariff, publishing a rate will you find anywhere in the specification of the time that it will take in transportation, but we collect the tariff rate.

What the Government is telling us to do that you can’t run one train slower than another or one shipment slower than another unless you charge more than you charge for your fast service.

Elmer B. Collins:

Now, they support that contention by saying that your fast service is standard.

The Act doesn’t say what standard in the way of service.

The lower court said intentional.

The Act doesn’t say intentional slow service is unlawful.

That’s the Commission’s own conclusion or the conclusion of the lawyers to rule this complaint.

They have adopted and invented standards which neither Interstate Commerce Act and nor the Elkins Act provide.

They’ve invented their own standards to try drive against us a violation of the Elkins Act, where as a mater of fact, it’s the Commission’s duty to investigate the whole thing and not just the Union Pacific.

Felix Frankfurter:

Mr. Collins, may I ask you this question?

I noticed in your brief, merely looking at the table of cases, (Inaudible).

You don’t refer to the Great Northern case that Justice Brandeis’s famous and well know decision that technical questions can’t be dealt with by courts.

It must be remitted to the Commission.

Now, this isn’t that kind of a case.

What you’re arguing here is whether on the fact — whether — whether the facts putting you in the context with other railroads, this constitutes a departure and indeed a violation, both of the Elkins Act and the provisions of the Interstate Commerce Act.

And that the findings to that extent on the record by a district judge are not the kind of desirable expert findings that the Commission ought to make.

Is that your position in effect?

Elmer B. Collins:

They are not the kind of findings the Commission not to make.

Felix Frankfurter:

That they — they had not the kind of finding the Court ought to make —

Elmer B. Collins:

Perhaps —

Felix Frankfurter:

— that they are the kind of findings the Commission should make.

Elmer B. Collins:

Exactly.

At page 13 of my brief, I quote some of the things that — that moved apparently, the District Court to conclude that there was a violation of the Elkins Act here.

He says that the slow service can trip the use of truckage and cars to provide a storage facility for transit lumber shippers.

Well, every time we furnished a car or used or trucks or an engine or any of our transportation property, we are furnishing just what he’s accused of doing there with our slow service.

We do it for the fast service, we are required to furnish those things for the published tariff rate.

Now, he says further, it puts — added an operational problems in cost fluctuations.

In the Kirby case, the horse case, that the Government relies on them very fully, the time serviced was the normal — was — was not the normal, but was an intentional service to one shipper or one carload of horses and it was branded, the fast service, mind you, which they here say is normal, was branded in that case, and held by this Court to be in violation of the Act.

So what is our standard, what — what must we do unless the Government itself is going to say how many times they can stop a train or how slowly move the traffic.

The Court goes ahead and decides questions that are clearly within the Commission’s administrative functions, says that, “We — we suffer excessive per diem cost for use of foreign cars while these long routes down through Texas do the same thing and much more so, that we also have it — the service also has a tendency to unbalance dependence, annual per diem offsets and it enables roller lumber dealers to a hard payment demurrage.

And it also puts the” — he says, “puts the slow lumber shipper in a better competitive position in the market.”

Well, if it isn’t the Interstate Commerce Commission’s duty to decide whether this rate is reasonable for both services or whether this slow service unduly advantages the competitive situation of the slow lumber shipper, I can’t imagine what the Commission’s function is, and I thank you.

Earl Warren:

We’ll recess.