Before Kiley, Circuit Judge, and Hoffman and Lynch, District
The opinion of the court was delivered by: Lynch, District Judge.
This is a suit to set aside an order of the Interstate
Commerce Commission which required the cancellation of certain
tariff provisions*fn1 which had been proposed by the
plaintiffs in this action.
The plaintiffs Baltimore and Ohio Chicago Terminal and the
Indiana Harbor Belt Railroad Company are switching or terminal
carriers within the Chicago switching district.
The remaining three plaintiffs are line-haul or road-haul
carriers whose lines connect with the Chicago Switching
District. They are the Baltimore and Ohio Railroad Company,
the Chicago, Milwaukee, St. Paul and Pacific Railroad Company,
and the New York Central Railroad Company. These three
plaintiffs control the two plaintiff switching carriers.
The current controversy revolves around the payment of
so-called "mileage allowances." Owners of specified types of
rail cars, usually those which are shipper-owned or
shipper-controlled, are entitled to an allowance from the rail
lines for all the miles their cars are used. At some districts
there are bilateral agreements in force by which road-haul
carriers pay the mileage allowance for the miles the cars
travel over the tracks owned by the switching carriers. The
Harbor Belt and the Chicago Terminal, however, have always
paid the mileage allowance to the car owners on movements
within the Chicago Switching District.
By schedules filed to become effective in 1963, the Harbor
Belt and the Chicago Terminal proposed to cancel tariff
provisions authorizing the payment of mileage allowances on
certain movements within the Chicago Switching District.
Simultaneously, the three road-haul plaintiffs in this action
proposed to pay, when any of the three received a line-haul
movement, the mileage allowance which the two terminal
carriers proposed not to pay.
These tariffs became effective on February 14, 1964.
Additional line-haul carriers published tariffs which became
effective three days later, assuming the obligation to pay the
mileage allowances on their movements through the Chicago
Switching District. These tariffs were established for
competitive reasons pending determination of the proceedings
be-for the Interstate Commerce Commission.
All five plaintiffs in the action before this court were
respondents in the proceeding before the ICC. The only
respondent to offer any evidence, however, was the Harbor
The Commission found that the effect of the tariff schedules
proposed by the plaintiffs would be to deny the payment of
mileage allowances for distances private cars move over the
Harbor Belt and Chicago Terminal lines, except when moving to
or from these lines via the Baltimore & Ohio, New York Central
or Milwaukee roads, or for intra or inter terminal switching
The Harbor Belt's and the Chicago Terminal's joint petition
for reconsideration was denied by order of the Commission,
Division 2, acting as an Appellate Division. The plaintiffs
then filed this suit to set aside the Commission order. The
court entered an order staying the operation of the Commission
orders until hearing and determination by a statutory court
composed of three judges as required by Title 28 U.S.C.
Intervening as defendants in support of the ICC in this
action are the American Refrigerator Transit Company and ten
road-haul railroads*fn3 that connect with the Harbor Belt and
Chicago Terminal. The intervening railroad defendants are
competitors of the three plaintiff connecting carriers.
The plaintiffs concede that shippers or car leasing
companies that furnish freight cars used in performing
transportation services are entitled to be paid a mileage
allowance. They contend, however, that the Harbor Belt and
Chicago Terminal need not pay these allowances if the
obligation is met collectively by the railroad industry. The
plaintiffs insist that competitive pressures will force other
road-haul carriers to pay the mileage allowance on movements
within the Chicago Switching District. In other words, the
argument is that shippers owning private cars entitled to ...