1. There is nothing in the Act to Regulate Commerce, as
originally enacted, or in the Transportation Act, 1920, or in any
earlier amendment, which indicates a purpose either to allow a
carrier to create undue prejudice by the use of facilities
possessed or to narrow the power of the Interstate Commerce
Commission to prevent unjust discrimination. P.
266 U. S.
199.
2. Two railroad companies, by agreement, extended, each to the
other, the use of their tracks to effect terminal receipt and
delivery of carload freight within a zone, in a city, so that
plants within the zone having spur connections with either main
line could ship or receive shipment over the other without paying
an additional transportation charge for the movement over the line
connected with their spurs, whereas other industries, outside the
zone, but in the same city and dependent on these railroads and
another, were denied the like advantage. The Interstate Commerce
Commission, upon finding that the situations of the industries were
"substantially similar" from the standpoint of carriage, and that
the practice subjected those without the zone to undue prejudice
and disadvantage, ordered the two railroads to remove the
discrimination.
Held, that the discrimination was
unlawful, and the order valid. P.
266 U. S.
197.
295 F. 523 reversed.
Appeal from a decree of the district court enjoining enforcement
of an order of the Interstate Commerce Commission.
Page 266 U. S. 195
MR. JUSTICE BRANDEIS delivered the opinion of the Court.
York, Pennsylvania, is served by three railroads. About 100
manufacturing establishments are directly connected with them by
spurs or industry sidings, most of the plants with only one of the
three railroads. Where the plant is thus directly connected with
the railroad which has the line haul, it makes no extra charge for
switching the car
Page 266 U. S. 196
between its road and the plant. Where the connection is not
direct -- that is, where, in order to reach the plant, the car must
move for a short distance over the line of another carrier -- all
of the plants except 17 must pay an additional transportation
charge. The more favored treatment accorded by the Pennsylvania
Railroad and the Western Maryland Railway to these 17 was held by
the Interstate Commerce Commission to constitute unjust
discrimination, [
Footnote 1]
and the customary order to remove the discrimination was made.
Manufacturers' Assn. of York v. Pennsylvania R. Co., 73 I.C.C. 40.
The Western Maryland acquiesced in the order. The Pennsylvania
brought this suit against the United States to enjoin its
enforcement. The Commission intervened as defendant. The case was
heard before three judges on motions to dismiss. The court, Judge
Witmer dissenting, entered a final decree granting the relief
prayed for. 295 F. 523. The case is here on direct appeal under the
Act of October 22, 1913, c. 32, 38 Stat. 208, 220.
The 17 plants are located in a small section of the city in
which lines of the Pennsylvania and of the Western Maryland run
substantially parallel. About half of these plants have their spur
connections with the Pennsylvania; the remainder have theirs with
the Western Maryland. By an arrangement between these companies,
each is permitted to, and does, pass over the road of the other
with its own locomotives and attached cars in order to make
deliveries to and accept shipments from plants located on spurs
directly connected only with the road of the other carrier.
Industries within the zone thus get the same advantage over those
without it which would flow from an agreement for reciprocal free
switching or for absorption of the
Page 266 U. S. 197
switching charges which was limited to their traffic. The
Commission found that, "from the standpoint of carriage, the
situation of industries inside and outside the zone is
substantially similar," and that the described practice "subjects
shippers . . . without the zone to undue prejudice and
disadvantage." [
Footnote 2] The
only substantial question [
Footnote
3] for decision is whether the advantage enjoyed by these 17
plants, although found as a fact to result in undue prejudice, must
be held as a matter of law to be a lawful preference because of the
means by which the advantage is effected.
The argument most strongly urged is this: in the absence of an
appropriate order, carriers are not obliged to extend or curtail
their facilities or to submit to enlarged use of their terminals.
The arrangement by which the Pennsylvania and the Western Maryland
extend, each to the other, the use of their tracks to effect
terminal receipt and delivery of carload freight within the zone is
a trackage agreement and is, in law, either a limited extension of
the line of each carrier or an agreement for the limited common use
by each carrier of terminal facilities of the
Page 266 U. S. 198
other. To accord to plants without the zone the same service
which, under the arrangement, is enjoyed by those within the zone
would involve either a further extension of the tracks of each
carrier or an enlargement of the common use of their terminal
facilities. Under the Interstate Commerce Act, as amended by
Transportation Act, c. 91, 41 Stat. 456, the Commission might, upon
proper findings and conditions, have ordered such extension of
tracks, under the powers conferred by § 1, par. 21, p. 478, or
it might have ordered an enlargement of the common use of terminals
under § 3, par. 4, p. 479; or it might have equalized rates
and charges for plants within and without the zone by exercise of
the power, conferred by § 15, pars. 3 and 4, pp. 485, 486, to
establish through routes and joint rates. The grant of these
specific powers indicates a purpose on the part of Congress to so
restrict the Commission's general power to prevent unjust
discrimination, prohibited by § 3, that a preference granted
certain shippers served by a carrier by virtue of the ownership of
tracks or trackage rights over other shippers not reached by the
carrier, because it does not own tracks or trackage rights which
would enable it to reach them, cannot warrant a finding of undue
discrimination, and that similarly the withholding or possession of
trackage rights between carriers cannot, in law, constitute undue
preference. In support of this argument, attention is called to the
fact that, as originally enacted, [
Footnote 4] § 3, after prohibiting discrimination as
between connecting carriers in respect to facilities for
interchange of traffic, rates and charges, provides:
"But this shall not be construed as requiring any such common
carrier to give the use of its tracks or terminal facilities to
another carrier engaged in like business. "
Page 266 U. S. 199
The argument is, in our opinion, unsound. There is nothing in
the Act to Regulate Commerce, as originally enacted, or in
Transportation Act 1920, or in any earlier amendment, which
indicates a purpose on the part of Congress either to allow a
carrier to create undue prejudice by the use of facilities
possessed, or to narrow the Commission's powers to prevent unjust
discrimination. The clause quoted was doubtless inserted in §
3 to make clear that the mere grant to one carrier of the use of
tracks or terminal facilities for the purpose of interchanging
traffic and the refusal of such facilities to another, does not
make the preference given illegal. The clause had no other effect.
In this respect, it resembles the provision contained in § 22,
concerning free service or reduced rates to the federal, state, and
municipal governments.
Nashville, Chattanooga & St. Louis
Ry. v. Tennessee, 262 U. S. 318.
The Commission has found not merely that the facilities in
question were granted to some and refused to other, but that the
grant and refusal have, by reason of the use made and intended to
be made of the facilities, resulted in undue prejudice. It is true
that an extension of trackage rights, an enlarged common use of
terminals, or the establishment of through routes and joint rates,
or the withdrawal of any of them, could not be ordered except upon
the findings and conditions prescribed in the act. But the order
complained of does not require any such thing. It requires only
that the carriers shall desist from a practice which involves such
use as has resulted, and will result in the undue prejudice found.
The order leaves them free to remove the discrimination by any
appropriate action.
American Express Co. v. Caldwell,
244 U. S. 617,
244 U. S. 624;
United States v. Illinois Central R. Co., 263 U.
S. 515,
263 U. S. 521.
To accomplish this, it is not necessary that the Pennsylvania
should grant to the other carriers the extensive use of the
terminal facilities and tracks
Page 266 U. S. 200
which was sought, [
Footnote
5] and which the Commission found was not shown to be in the
public interest.
Compare Pennsylvania Co. v. United
States, 236 U. S. 351,
236 U. S. 368;
Louisville & Nashville R. Co. v. United States,
238 U. S. 1,
238 U. S. 20. The
situation in this case is unlike that which was presented in
Louisville & Nashville R. Co. v. United States,
242 U. S. 60.
Reversed.
[
Footnote 1]
The fact that two of the 17 plants hereinafter referred to are
connected by spurs with both roads may be ignored in this
discussion.
[
Footnote 2]
The order declared that, the
"Commission having found in said report that the practice of the
Pennsylvania Railroad Company and the Western Maryland Railway
Company of extending the use of their tracks to each other for the
purpose of terminal receipt and delivery of freight at industries
in York within a zone described in the report, while refusing to
extend the use of their tracks for the purpose of delivering or
receiving freight at other industries similarly located but without
the zone under substantially similar circumstances and conditions,
is subjecting various shippers and industries to undue prejudice,
it is ordered that said defendants be . . . required to cease and
desist . . . from practicing the undue prejudice. . . ."
[
Footnote 3]
There is a faint contention that the order is invalid also
because it is not in terms limited to interstate commerce. That it
should be construed as not applying to intrastate commerce is
clear.
Compare Texas v. Eastern Texas R. Co., 258 U.
S. 204.
[
Footnote 4]
The clause was stricken out by the amendment of the section made
in Transportation Act, 1920, 41 Stat. 479.
[
Footnote 5]
The proceeding before the Commission, which was instituted by
the Manufacturers' Association of York, sought an order requiring
the three railroads (a) to interchange at York all traffic
originating in or destined to that city; (b) to permit common use
by all the carriers of all terminal facilities at York, including
the main line tracks for a reasonable distance outside the
terminals, and (c) to establish reciprocal switching throughout the
city.