Seaboard Coast Line Railroad v. National Railroad Passenger Corp.

489 F. Supp. 916, 1980 U.S. Dist. LEXIS 17740
CourtDistrict Court, M.D. Florida
DecidedMay 14, 1980
DocketNos. 75-92-Civ-J-B, 78-15-Civ-J-B
StatusPublished
Cited by2 cases

This text of 489 F. Supp. 916 (Seaboard Coast Line Railroad v. National Railroad Passenger Corp.) is published on Counsel Stack Legal Research, covering District Court, M.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Seaboard Coast Line Railroad v. National Railroad Passenger Corp., 489 F. Supp. 916, 1980 U.S. Dist. LEXIS 17740 (M.D. Fla. 1980).

Opinion

OPINION

FACTS

SUSAN H. BLACK, District Judge.

This case requires the Court to analyze the relationship between the National Railroad Passenger Corporation (hereinafter “Amtrak”) and those railroads for which it has assumed responsibility for intercity rail passenger service. In October, 1970, due to the large financial losses being suffered by railroads providing intercity rail passenger service, Congress enacted the Rail Passenger Service Act. 45 U.S.C. § 501, et seq. (hereinafter “Amtrak Act”). This act established the defendant, Amtrak, and authorized it to contract to assume the intercity rail passenger responsibilities of other railroads.

On April 16, 1971, Amtrak entered into such an agreement (hereinafter “the agreement”) with plaintiff Seaboard Coast Line Railroad Co. (hereinafter “SCL”). By the agreement, Amtrak assumed SCL’s responsibility to provide intercity rail passenger service and SCL agreed to pay an “entry fee” and to operate passenger trains for Amtrak at a rate of compensation specified by the agreement. The operation of passenger trains by SCL includes the maintenance and servicing of cars and locomotives used in this service. SCL performs the maintenance at various repair shops throughout its system and, therefore, must transport materials and supplies, as well as the equipment and parts to be repaired, among those repair shops.

SCL operates passenger trains and performs maintenance and repair services at the rates specified in the agreement. However, since 1972, it has sought to recover for transportation services at common carrier tariff rates which are much higher than those specified in the agreement. Amtrak rejected SCL’s claim for transportation services incident to maintenance and repair services at this higher rate contending they are covered by the agreement.

PROCEDURAL POSTURE

On February 12, 1975, SCL filed action 75-92 (hereinafter “1975 action”) seeking to collect unpaid freight charges in accordance with its published tariffs. On May 12, 1975, pursuant to an arbitration agreement between the parties, Amtrak served a Notice of Intention to Arbitrate contending that the services at issue in the 1975 action were performed under the agreement, and on April 14, 1975, it moved to stay the 1975 action pending arbitration. A stay was granted on June 26, 1975. SCL appealed this stay arguing that to the extent the services at issue were governed by the agreement, the agreement was void as a violation of § 6(7) of the Interstate Commerce Act. 49 U.S.C. § 6(7). The Fifth Circuit upheld the stay, but specifically refused to rule on the legality of the parties contracting for transportation services at other than tariff rates. Seaboard Coast Line R.R. v. National Rail Passenger Corp., 554 F.2d 657 (5th Cir. 1977). Thereafter, the dispute was submitted to arbitration. “NAP Case No. 32, In Re Charges for Transportation Services.”

While arbitration was pending, SCL continued to provide transportation services for Amtrak and continued to demand payment at tariff rates. Amtrak continued to refuse payment above the contract rate. On January 6, 1978, in order to avoid the statute of limitations, SCL filed Case No. 78-15 (hereinafter “1978 action”) claiming reimburse[918]*918ment for transportation services provided since filing the 1975 action. On January 27, 1978, the parties agreed to a stay of the 1978 action and to its consolidation with the 1975 action. On January 30, 1978, the two actions were consolidated and the 1978 action was stayed.

On March 17, 1978, the National Arbitration Panel issued its “Decision and Award,” ruling that, with a minor exception for which Amtrak has already made payment to SCL at tariff rates, the services at issue were provided pursuant to the agreement. However, the panel also specifically refused to address the legality of the agreement as applied to transportation services.

The case is presently before the Court on Amtrak’s Petition to Confirm Arbitration Award and Motion for Summary Judgment and SCL’s Objection to Confirmation and Cross-Motion for Summary Judgment. At a hearing on October 18, 1979, both parties agreed that the case is ripe for summary judgment, the only issue in dispute being the legality of the agreement as it applies to the transportation services at issue. In order to so posture the case, the parties have stipulated as to damages. They agree that if Amtrak prevails and the Court -holds the contract rates valid, it shall enter judgment for SCL in the amount of $15,047.00 in the 1975 action and $55,107.00 in the 1978 action. On the other hand, if SCL prevails and the Court holds that tariff rates apply, they agree that judgment should be entered for SCL in the amount of $80,673.53 in the 1975 action and $280,212.10 in the 1978 action.

DISCUSSION

SCL argues that as a common carrier of freight by rail, it is prohibited by § 6(7) of the Interstate Commerce Act, 49 U.S.C. § 6(7),1 from contracting to charge other than published tariff rates. Louisville and Nashville R. Co. v. Maxwell, 237 U.S. 94, 35 S.Ct. 494, 59 L.Ed. 853 (1915). These tariffs have the force of statute and bind both shipper and carrier to the tariff rate by force of law. Lawden v. Simonds-Shields-Lonsdale Grain Co., 306 U.S. 516, 59 S.Ct. 612, 83 L.Ed. 371 (1939), reh. denied, 307 U.S. 649, 59 S.Ct. 792, 83 L.Ed. 1528 (1939). Amtrak agrees with this general statement of law, but cites several exceptions which it contends exclude transportation services performed under the agreement from the general application of § 6(7) of the Interstate Commerce Act.

Amtrak initially cites § 402 of the Amtrak Act. 45 U.S.C. § 562.2 This section authorizes Amtrak to “contract with railroads ... for the . . . provision of services on such terms and conditions as the parties may agree.” Thus, it appears that the Amtrak Act includes a specific exception to the Interstate Commerce Act which allows the type of agreement at issue. SCL, however, contends that § 402 must be read in conjunction with [919]*919§ 401(a)(1). 45 U.S.C. § 561(a)(1).3 This section relieves SCL of its responsibilities as a common carrier of passengers, but not, SCL points out, as a common carrier of freight. Thus, SCL argues, § 402 should be read to authorize contracts on such terms as the parties may agree solely for services which SCL is not obligated to perform as a common carrier of freight. However, SCL distinguishes services which it is obligated to perform as a common carrier of freight for which it must charge tariff rates.

This distinction has no basis in the statute. Section 401 does not deal at all with services provided to Amtrak by other railroads. It simply authorizes Amtrak to relieve other passenger carriers of their responsibility for passenger services.

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489 F. Supp. 916, 1980 U.S. Dist. LEXIS 17740, Counsel Stack Legal Research, https://law.counselstack.com/opinion/seaboard-coast-line-railroad-v-national-railroad-passenger-corp-flmd-1980.