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ORDER OF RAILWAY CONDUCTORS AND BRAKEMEN v. U.S.

November 30, 1966

ORDER OF RAILWAY CONDUCTORS AND BRAKEMEN, ETC., ET AL., PLAINTIFFS,
v.
UNITED STATES OF AMERICA ET AL., DEFENDANTS.



Before Swygert, Circuit Judge, and Perry and Marovitz, District Judges.

The opinion of the court was delivered by: Marovitz, District Judge.

MEMORANDUM OPINION

Plaintiffs bring this action to enjoin and set aside an order of the Interstate Commerce Commission entered in Docket No. 29592 entitled, "Proposed Pooling of Railroad Earnings and Service Involved in Operation of The Pullman Company Under Railroad Ownership," reported as 322 I.C.C. 100.

Plaintiffs are (a) the Order of Railway Conductors and Brakemen, an unincorporated association, which is the representative of Pullman conductors; and (b) three individuals who are employed as Pullman conductors.

Defendants are the United States of America, the Interstate Commerce Commission, The Pennsylvania Railroad Company, a corporation, and The Pullman Company, a corporation.

This cause came on for hearing on October 27, 1966, before this statutory three-judge United States District Court which finds that it has jurisdiction of the subject matter hereof and of the parties hereto.

Because the Interstate Commerce Commission's order of January 16, 1964, herein sought to be set aside, begins with the phrase, "Upon the consideration of the record in the above-entitled proceedings, * * *." and because the record of the Commission in proceedings had in Docket No. 29592 "contains extensive testimony and numerous exhibits and other documents which pertain to issues wholly foreign to the issues in the matter before the Commission involved in this cause," all of the parties to this action entered into a stipulation which provided, among other things, that certain portions of the record of the Commission in Docket No. 29592 should be deemed a full and complete designation of all parts of the record of the Commission in said proceedings which, in the opinion of any party is in any way pertinent to the Commission's order of January 16, 1964, or to the issues of this proceeding. The parties accordingly submitted to the court the pertinent record, as stipulated, packaged in a volume entitled, "Joint Appendix of All the Parties" which this court has examined and has considered together with the pleadings and briefs and oral arguments of counsel.

Following the entry by the Commission of its January 16, 1964 order here involved, the petition of plaintiff Order of Railway Conductors and Brakemen (ORC&B) for reconsideration by the Commission of its order was denied.

Section 5(1) of the Interstate Commerce Act, 49 U.S.C. § 5(1), provides, in part —

"§ 5. Combinations and consolidations of carriers.

Pooling; division of traffic, service, or earnings

    "(1) Except upon specific approval by order of the
  Commission as in this section provided, and except as
  provided in paragraph (16) of section 1 of this
  title, it shall be unlawful for any common carrier
  subject to this chapter * * * to enter into any
  contract, agreement, or combination with any other
  such common carrier or carriers for the pooling or
  division of traffic, or of service, or of gross or
  net earnings, or of any portion thereof; and in any
  case of an unlawful agreement for the pooling or
  division of traffic, service, or earnings as
  aforesaid each day of its continuance shall be a
  separate offense: Provided, That whenever the
  Commission is of opinion, after hearing upon
  application of any such carrier or carriers or upon
  its own initiative, that the pooling or division, to
  the extent indicated by the Commission, of their
  traffic, service, or gross or net earnings, or of any
  portion thereof, will be in the interest of better
  service to the public or of economy in operation and
  will not unduly restrain competition, the Commission
  shall by order approve and authorize, if assented to
  by all the carriers involved, such pooling or
  division, under such rules and regulations, and for
  such consideration as between such carriers and upon
  such terms and conditions, as shall be found by the
  Commission to be just and reasonable in the
  premises * * *."

In 1946, certain railroads, including the Pennsylvania Railroad, made application under above quoted Section 5(1) for approval of a proposed pooling of earnings and service involved in the sleeping car business by the Pullman Company under railroad ownership and on May 6, 1947, the Interstate Commerce Commission entered its report and order in Docket 29592 approving and authorizing the proposed pooling. A Uniform Operating Contract was put into effect, retroactively, as of January 1, 1946, and thereafter was extended by agreement on expiration.

A subsequent Supplemental Application to the Commission under Section 5(1) was made by the railroads for an order approving and authorizing a proposed further continuance and revision of the existing pooling arrangement under a new, proposed Uniform Service Contract and on August 22, 1949, the Commission entered its Supplemental Order approving and authorizing the continuance of the pooling subject to the conditions prescribed in the prior report.

Section 2 of the new Uniform Service Contract reads:

    "Sec. 2. During the term of this contract Pullman
  shall furnish sleeping car service on the Lines of
  the Railroad, as hereinafter specified. In case the
  Railroad at any time desires to furnish part of such
  service in connection with its sleeping car
  operations, and shall request Pullman to furnish a
  partial form of sleeping car service on Lines of the
  Railroad, Pullman shall furnish such partial service

  on reasonable and non-discriminatory terms; and this
  contract shall be subject to such modification as
  may, in the particular case, be necessary to provide
  reasonable and non-discriminatory terms therefor."

On May 29, 1962, the Pennsylvania Railroad notified the Pullman Company by letter that in accordance with Section 2 of the Uniform Service Contract it was exercising its right to request Pullman to furnish, effective October 1, 1962, a partial form of sleeping car service on the lines of Pennsylvania. After setting forth the services to be rendered by the Pullman Company (sometimes hereinafter "Pullman"), the letter stated that effective on October 1, 1962, the Pennsylvania Railroad Company (sometimes hereinafter called "Pennsylvania") would perform in connection with its sleeping car operations, the remaining services not listed therein for performance by Pullman.

On September 11, 1962, without making prior application to the Interstate Commerce Commission for authorization and approval under Section 5(1), Pullman and Pennsylvania executed an "Amendment to Uniform Service Contract" which provided for a partial form of sleeping car service by Pullman on local lines of the Pennsylvania Railroad, to become effective October 1, 1962, in line with the proposals set forth in Pennsylvania's letter to Pullman of May 29, 1962.

In a suit entitled Brogan, et al. v. Pennsylvania Railroad Company and The Pullman Company, filed in the United States District Court for this District on August 29, 1962, certain conductors of Pullman working on the sleeping car lines of Pennsylvania prayed for a declaratory judgment that the planned changes or arrangement by Pullman and Pennsylvania would be in disobedience of orders of the Interstate Commerce Commission and prayed that the defendant companies be enjoined from putting into effect the planned changes and from failing and neglecting to obey the orders of the Interstate Commerce Commission theretofore entered in Docket 29592. On October 5, 1962, the District Court, in Findings of Fact, Conclusions of Law and Decree, reported at 211 F. Supp. 881, enjoined the defendant companies from failing to comply with Section 5(1) by putting into effect the Amendment to Uniform Service Contract executed on September 11, 1962, without prior approval of the Commission, but provided that nothing in those findings, conclusions or decree should be deemed to preclude the Interstate Commerce Commission from deciding that its outstanding orders in its Docket 29592 would not be violated by the defendant companies' Amendment to Uniform Service Contract executed September 11, 1962, or that its specific approval in connection with said Amendment under Section 5(1) was not required. In its decree, the District Court also provided for the automatic expiration of its injunction against the defendant companies should the Commission decide that its outstanding orders had not been violated or that its specific approval of the defendants' Amendment was not required or if the Commission specifically approved the Amendment or the pooling resulting therefrom.

The Pennsylvania Railroad Company thereupon, on October 15, 1962, repaired to the Interstate Commerce Commission, petitioning for a declaratory order that the proposed arrangement for withdrawing from the Pullman Company the performance of ...


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