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Louisville & Nashville R. Co. v. United States, 242 U.S. 60 (1916)

Louisville & Nashville Railroad Company v. United States

No. 290

Argued October 13, 16, 1916

Decided December 4, 1916

242 U.S. 60


Under circumstances which induce the court to say that there could have been no purpose to discriminate against the Tennessee Central, the two appellant railroad companies planned and matured an arrangement for the interchange of traffic at Nashville which, stated generally, took the following form, viz: the terminal, connecting their main lines and consisting of tracks, yards, depots, and other railroad property, owned in part by the appellant railroad companies in severalty, and in part held as to title by appellant Terminal Company, but leased by it to them in joint tenure, was placed under the management of an unincorporated organization called the "Nashville Terminals," along with additional connecting trackage contributed by the two railroads from their respective main and side tracks. The "Nashville Terminals," under control of the two appellant railroad companies, maintained and operated this collective property, and thus served, within the switching limits so constituted, to interchange the traffic of the two roads at Nashville. The total expense of maintenance and operation was apportioned between the two constituent railroad companies on the basis of the total number of cars and locomotives handled for each, and no switching charges were made against either. The appellant Terminal Company was, in origin, a creature of the other two appellants; the property which it held in and about the terminal was obtained directly or indirectly through their financial aid, and the Louisville & Nashville owned all its stock, as well as 71% of the stock of the Nashville & Chattanooga. The Interstate Commerce Commission directed appellants to abstain from refusing to switch interstate competitive traffic for the Tennessee Central on the same terms as noncompetitive, while exchanging both kinds on the same terms for each other, and ordered them to establish rates for the switching of all interstate traffic for the Tennessee Central the same as they contemporaneously maintained between themselves.

Page 242 U. S. 61

Held, under these circumstances, as more fully developed in the opinion:

(1) That, for all practical purposes, the effect of the arrangement was to make the two appellant railroad companies the joint owners of the terminal.

(2) That, by § 3 of the Interstate Commerce Act, they were as such joint owners protected in the same degree as would be an owner in severalty from being required to give the use of their terminal facilities to another carrier engaged in like business.

(3) That their mere refusal to switch for the Tennessee Central would not be an unlawful discrimination.

(4) That the method of switching through a single agency, as described, did not involve unlawful discrimination against that railroad.

(5) That, consequently, the order of the Commission was erroneous, and must be enjoined.

(6) But that appellants might not lawfully discriminate between competitive and noncompetitive goods, and, so long as they received the latter, the Commission could require them to receive the former upon being paid reasonable compensation, taking into account their pecuniary outlay on the terminal.

227 F. 25; id., 273, reversed.

The case is stated in the opinion.

Page 242 U. S. 69

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