Chestnut Ridge Ry. Co. v. United States

248 F. 791, 1917 U.S. Dist. LEXIS 824
CourtDistrict Court, D. New Jersey
DecidedDecember 24, 1917
DocketNo. 1640
StatusPublished

This text of 248 F. 791 (Chestnut Ridge Ry. Co. v. United States) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Chestnut Ridge Ry. Co. v. United States, 248 F. 791, 1917 U.S. Dist. LEXIS 824 (D.N.J. 1917).

Opinion

WOORREY, Circuit Judge.

The plaintiff brings this action by bill in equity, praying that an order of the Interstate Commerce Commission be annulled and its enforcement be enjoined. The matter in controversy before the Commission concerned the validity of a division of joint class rates agreed upon between the plaintiff and certain connecting carriers. The matter before us concerns the validity of the Commission’s order, which, as it is alleged, was based upon a mistake of law ánd was arbitrarily made.

The plaintiff railway company (hereinafter called the Chestnut Ridge) operates a short industrial railroad. As its location, connections, and the general character of its business are fully set forth in reports made by the Commission in this and in a previous investigation (Chestnut Ridge Railway Class Rates Case, 41 Interst. Com. [793]*793Com’n R. 62; Chestnut Ridge Railway Case, 37 Interst. Com. Com’n R. 558), we shall limit our statement to those facts which hear directly on the matter in hand.

The railroad of the Chestnut Ridge consists of two lines, a main line and a branch line. The main line extends from Kunkletown, Pa.,, to Palmerton East, Pa., a distance of about 10 miles, and does a miscellaneous business. The branch line, known as Palmerton Branch, extends from its connection with the main line at Palmerton East to Palmerton (conveniently called Palmerton West), a distance of 1.49 miles.

The stock of the Chestnut Ridge is owned by the New Jersey Zinc Company, a corporation of New Jersey, which also owns the stock of the New Jersey Zinc Company, a corporation of Pennsylvania (hereinafter called the Zinc Company). The latter company has two plants located on the Palmerton Branch; one, the East Plant, at Palmerton East; the other, the West Plant, at Palmerton West. While carrying some general traffic, the principal traffic of the Palmerton Branch consists of the Zinc Company’s freight shipped to and from other roads, and moved to and from its two plants. This traffic comprises about 93 per cent. of the traffic of both lines.

The Chestnut Ridge has two trunk line connections, one at Palmer-ton East wdth the Eehigh and New England Railroad Company (hereinafter called the New England), which in turn connects at Portland with the Delaware, Rackawanua & Western Railroad Company (hereinafter called the Lackawanna); the other at Palmerton West with the Central Railroad Company of New Jersey (hereinafter called the Central). Both connecting systems carry traffic, by connections, to points west of Buffalo. This is the traffic which has given rise to this controversy.

The Chestnut Ridge, though privately owned and operated chiefly in the service of the Zinc Company, is a common carrier. Chestnut Ridge Railway Case, 37 Interst. Com. Com’n R. 558; The Tap Line Cases, 234 U. S. 1, 34 Sup. Ct. 741, 58 L. Ed. 1185. Being a common carrier it is required to establish through routes and make joint rates with its connecting carriers, and is entitled to share in a division of such rates. Chestnut Ridge Railway Class Rates Case, 41 Interst. Com. Com’n R. 62; Act to Regulate Commerce, §§ 1, 15 (Comp. St. 1916, §§ 8563, 8583). To that end the Chestnut Ridge began negotiations with the New England and Lackawanna looking toward the establishment of through routes and joint rates for the transportation of property of all classes, from and to points on its line to and from points beyond Buffalo, reached by the New England, Lackawanna and their connections. As traffic is of two kinds, the negotiations embraced joint class rates applicable to miscellaneous high grade traffic, and joint commodity rates applicable to special low grade commodities moving in heavy volume. These negotiations culminated in agreements respecting one class of traffic, namely, class rates traffic. By these agreements “joint class rates” were established on west bound traffic from points on the Chestnut Ridge to points west of Buffalo (Supplement 34 of Freight Tariff I. C. C. 9400), and between points -on the Lackawanna and points on the Chestnut Ridge (Freight Tariff [794]*794I. C. C. 13099). Pursuant thereto and in obedience to the act in that regard, the Lackawanna, with the concurrence of the Chestnut Ridge, filed with the Interstate Commerce Commission and published these two tariffs.

Corresponding with the Lackawanna and Chestnut Ridge tariffs for joint class rates on traffic bound west of .Buffalo, carriers west of Buffalo'issued tariffs for the same joint class rates on traffic originating west of Buffalo and destined to points on the Chestnut Ridge (Record 16, 17, 58, 59).

These tariffs were subsequently considered as “applying on class traffic moving to and from points west of Buffalo to and from points on the Chestnut Ridge.” They embraced traffic in carload lots and in less than carload lots and showed the share of each connecting carrier in the division. As division of joint class rates for less than carload lots was not excepted to or condemned by the Commission, it is not involved in this controversy. The share of the Chestnut Ridge in the division of joint class rates for carload lots varied with the rates as applied to class traffic of different kinds, and was about 20†, per ton.

Upon the publication of these tariffs,- the Central, conceiving the proposed joint class rates to be inimical to its interest, filed a protest with the Commission; whereupon the Commission suspended the tariffs and instituted an investigation concerning the lawfulness of the rates and of their division. - The inauguration of these proceedings halted negotiations between the Chestnut Ridge, the New England and Lackawanna as to joint rates on all other traffic. It does not appear that the Chestnut Ridge and its connecting carriers have ever agreed upon or published joint commodity rates for traffic either originating on or destined to the Chestnut Ridge. Therefore, as we read the record, the investigation and the order of the Commission, as well as the bill for injunction filed in this action, extend to and concern only joint class rates. 'This is a matter vital to one phase of the case presently to be considered.

The protest of the Central grew out of the location of the two’ plants of the Zinc Company at opposite ends of the short Palmerton Branch (the Zinc Company and the railway company having a common owner) and out of the fact that each plant was served directly by one trunk line and indirectly by another. The Central contended that normally each line would receive the traffic of the plant with which it directly connects, but that the large share in the division of joint class rates allowed the Chestnut Ridge by carriers connecting with the East Plant, would induce the Chestnut Ridge to draw from the West Plant traffic, which, but for the division, would be delivered to the Central, and would cause the Chestnut Ridge to move this traffic over its mile and half branch road to its easterly end for delivery to the New England and Lackawanna, in order to obtain its share in the division of rates which those carriers offered. Stated briefly the Central contended that the share of the division allowed, the Chestnut Ridge was so large that it involved rebates to the Zinc Company, its principal shipper, and amounted practically to a purchase by the New England and Lacka-wanna of its entire class rates traffic.

[795]

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Bluebook (online)
248 F. 791, 1917 U.S. Dist. LEXIS 824, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chestnut-ridge-ry-co-v-united-states-njd-1917.