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Opinion of the Court.
mission, by using the form of order employed in this case, could also divert traffic from existing through routes to the lines of a weak carrier solely to assist that carrier to meet its financial needs, thereby evading completely the applicable prohibition of Section 15 (4), before the Court in United States v. Great Northern R. Co., 343 U. S. 562 (decided this day). In short, acceptance of the Commission's argument would mean that the acts of Congress since 1906 granting the Commission only a carefully restricted power to establish through routes have been unnecessary surplusage.
We hold that the Commission's efforts to support its finding that a through route from Lenora to Omaha via the Burlington line already exists are inconsistent with the meaning of the term “through route" as used in the Interstate Commerce Act.18 Since there is admittedly no
Memphis to Ft. Smith via the connecting lines of the Rock Island Railroad, the Subiaco and a line of the Missouri Pacific. The Commission ordered the establishment of the through route with through rates at the same level as the rates then charged over the existing through route between Memphis and Ft. Smith. This Court held the order invalid as infringing upon the rights of the Missouri Pacific under the short-hauling provisions of Section 15 (4). If the Commission is correct in this case, it could have accomplished the forbidden result merely by altering the form of its order—i. e., instead of ordering establishment of a new through route, the Commission could have assumed the existence of a through route from Memphis to Ft. Smith via the lines of the Rock Island, the Subiaco and the Missouri Pacific and accomplished the identical result by ordering reduction of the sum of the local rates over each portion of the route to the level of the rate over the existing through route.
18 Virginian R. Co. v. United States, 272 U. S. 658 (1926), is inapposite since through routes were there found to be in existence but commercially closed solely because of unreasonable and discriminatory rates charged by the Virginian over its portion of the route. In this case, there is no finding that the local rate charged by the
Opinion of the Court.
evidence that the Missouri Pacific ever offered through transportation service over the route in question, the Commission's order is without evidentiary support under the accepted tests for determining the existence of a through route. Accordingly, the judgment of the District Court dismissing appellant's complaint must be
Missouri Pacific from Lenora to Concordia is either unreasonable or discriminatory. Similarly, the decision in Atchison, T. & S. F. R. Co. v. United States, 279 U. S. 768 (1929), is not applicable to the facts of this case.
The Commission's argument that appellant's rates discriminate against Omaha in violation of Section 3 (1) of the Act and thereby cause appellant to lose the protection of Section 15 (4) is without substance because the Commission did not consider whether the rates charged by the Missouri Pacific over its own lines are discriminatory, much less make any finding to that effect.
UNITED STATES ET AL. V. GREAT
NORTHERN RAILWAY CO.
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF MINNESOTA.
No. 151. Argued January 8–9, 1952.-Decided June 2, 1952.
Under § 15 (3) and (6) of the Interstate Commerce Act, the Inter
state Commerce Commission ordered the establishment of joint rates by certain carriers, in lieu of combination rates over through routes which were already in existence, and ordered a division of revenues between the carriers for the purpose of providing additional revenue for a financially weak participating carrier. Held: The District Court erred in enjoining the Commission's order as prohibited by $ 15 (4). Pp. 563-578.
1. The Commission's order did not establish any through route, but did establish joint rates for the admitted purpose of assisting the particular carrier to meet its financial needs. Pp. 569–570.
2. The prohibition of $ 15 (4) against establishing through routes for the purpose of assisting a carrier to meet its financial needs is not limited to cases where short hauling is a problem. Pp. 570-572.
3. The financial needs prohibition of § 15 (4) does not limit the Commission's power to establish joint rates generally, but deals only with the power to establish a "through route and joint rates applicable thereto," i. e., those joint rates applicable to a through route established by the Commission. Since the Commission did not establish the through routes, the prohibition of $ 15 (4) is inapplicable. Pp. 572–577.
4. The Commission is empowered, in the public interest, to cause a redistribution of revenue between two carriers participating in transportation of through traffic, and may in that connection consider a branch line's value in producing profitable traffic for a railroad. P. 577.
5. Since the Commission's order in this case (which also denied the particular carrier's application to abandon its line) was attacked also for want of essential findings and for lack of substantial evidence justifying continued operation of the line, and since it is the practice of this Court not to review an administrative record
Opinion of the Court.
in the first instance after finding that a lower court has applied an incorrect principle of law, the case is remanded to the District
Court for further proceedings. Pp. 577-578. 96 F. Supp. 298, reversed.
In a suit to enjoin enforcement of an order of the Interstate Commerce Commission, 275 I. C. C. 512, a threejudge District Court granted the relief prayed. 96 F. Supp. 298. On direct appeal to this Court under 28 U.S. C. $ 1253, reversed and remanded, p. 578.
Ralph S. Spritzer argued the cause for the United States and the Interstate Commerce Commission, appellants. With him on the brief were Solicitor General Perlman, Assistant Attorney General Morison, Daniel W. Knowlton and Edward M. Reidy.
Arnold H. Olsen, Attorney General of Montana, argued the cause for the Valier Community Club and the Board of Railroad Commissioners of Montana, appellants. With him on the brief were Charles V. Huppe, Assistant Attorney General, Edwin S. Booth and Lester H. Loble.
Art Jardine argued the cause for the Montana Western Railway Co., appellant. With him on the brief was S. B. Chase, Jr.
Louis E. Torinus, Jr. argued the cause for appellee. With him on the brief were Edwin C. Matthias and Anthony Kane.
MR. CHIEF JUSTICE VINSON delivered the opinion of the Court.
This is a suit to enjoin enforcement of an order of the Interstate Commerce Commission establishing joint rates over through routes. In this case, unlike Thompson v. United States, 343 U. S. 549 (decided this day), the through routes in question already exist since the carriers
Opinion of the Court.
concerned have continuously provided through service over the same through routes at a combination of separately established rates. The Commission did not change any route or alter the total amount charged for any shipment but did order the establishment of joint rates in place of the combination rates. The Commission also ordered a division of revenues between the carriers in order to provide additional revenue for one financially weak carrier. The question presented is whether the Commission has power to establish joint rates for the purpose of assisting a carrier to meet its financial needs.
The Montana Western Railway Company, incorporated in 1909, furnishes the only rail service over the twenty miles between Valier, Montana, and Conrad, Montana, where connection is made with the interstate rail lines of the appellee Great Northern Railway. Appellee and a land irrigation company, now called the Valier Company, furnished the money to build the railroad. The Montana Western's stock is owned by the Valier Company and its bonds in the sum of $165,000 are held by appellee.
Operation of the Montana Western has been unprofitable. An average annual deficit of over $18,000 has been experienced during the fifteen years preceding this case.
The Montana Western's general manager estimated that the total annual revenue deficiency under existing rates would amount to $33,825. In addition to the anticipated operating losses, continued operation of the Montana Western would require construction of a new bridge and a new roundhouse and replacement of a large number of crossties. The Montana Western has not been able to satisfy either its bonded indebtedness or the interest thereon. Moreover, appellee has advanced money to pay operating losses to the extent that Montana Western's total debt to appellee amounted to $737,604 at