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Soo Line Railroad Co. v. Escanaba & Lake Superior Railroad Co.

decided: February 23, 1988.

SOO LINE RAILROAD COMPANY, PLAINTIFF-APPELLANT,
v.
ESCANABA & LAKE SUPERIOR RAILROAD COMPANY, DEFENDANT-APPELLEE



Appeal from the United States District Court for the Eastern District of Wisconsin. Nos. 85-C-810 & 85-C-1695 -- Terence T. Evans, Judge.

Cudahy, Easterbrook, and Kanne, Circuit Judges.

Author: Easterbrook

EASTERBROOK, Circuit Judge.

The Soo Line Railroad and the Escanaba & Lake Superior Railroad are locked in a durable struggle attributable to the Connecting Line, some 21 miles of track between Crivitz and Marinette, Wisconsin. In re Chicago, Milwaukee, St. Paul & Pacific R.R., 784 F.2d 831 (7th Cir. 1986) (Escanaba I), holds that the Soo must arbitrate with the Escanaba about ownership of the line. (The arbitrators awarded the line to the Escanaba and fixed its price. A district court in Minneapolis enforced this award.) In re Chicago, Milwaukee, St. Paul & Pacific R.R., 789 F.2d 1281 (7th Cir. 1986) (Escanaba II), holds that the Soo, rather than the successor to the bankrupt Milwaukee Road, is the right party to arbitrate with the Escanaba about any damages attributable to the deferred conveyance. This opinion is fated to be known as Escanaba III.

Before we decided Escanaba I, the Soo and the Escanaba had filed suits in the Eastern District of Wisconsin. The Escanaba demanded that the Soo arbitrate with it about damages attributable to the delay. The Soo demanded that Escanaba pay about $344,000 in interline freight balances. An "interline balance" is the net payable after two railroads have offset sums due to each other for similar services. When a shipment of freight moves on two or more lines, a single line will collect the whole charge (the originating carrier from the shipper, or the terminating carrier from the consignee). The collecting railroad must reimburse the railroads that carried the freight, according to divisions of revenues filed with the ICC. On the 18th of each month all of the nation's railroads send each other abstracts of waybills showing which ones moved how much freight; on the 20th they send each other statements of sums collected on account of these movements. Each pair of railroads sets off the accounts between them, leaving a balance payable. This interline balance is supposed to be paid promptly. Just how promptly has been a subject of controversy. See In re Iowa R.R., 840 F.2d 535 (7th Cir. 1988); Boston & Maine Corp. v. Chicago Pacific Corp., 785 F.2d 562 (7th Cir. 1986); In re Penn Central Transportation Co., 486 F.2d 519 (3d Cir. 1973) (en banc); Southern Ry. v. United States, 306 F.2d 119 (5th Cir. 1962). We need not enter that thicket. It is enough to know that the payment of interline balances is essential in a system in which railroads regularly collect sums attributable to transportation performed by other carriers.

The district court consolidated the two cases. In light of Escanaba I and II, the district court held that the Soo is obliged to arbitrate the Escanaba's claim for damages as a result of the delay in transferring the Connecting Line. The last paragraph of the opinion deals with the claim for interline balances:

[T]he Escanaba has only weakly challenged the Soo's claim that it is due $344,481.94 for past services. The Soo, on the other hand, has adequately substantiated its position. The Soo's motion for summary judgment is therefore GRANTED.

On December 4, 1986, the court inserted this language on the form customarily used for final judgments under Fed. R. Civ. P. 58:

Escanaba's motion for summary judgment is granted in 85-C-810 and Soo's motion for summary judgment is granted in 85-C-1695.

This document does not specify the relief to which either party is entitled.

The Soo took its medicine on the arbitration component of the case, although the parties still disagree about where the arbitration should be held. The Soo prefers Minneapolis, which will direct any enforcement proceedings to the Eighth Circuit; the Escanaba prefers Milwaukee, in the hope that a suit to enforce would return to the district judge who ordered the Soo to arbitrate. The Escanaba was not happy about the disposition of the claim for interline balances, however. It filed a motion for reconsideration under Fed. R. Civ. P. 59 or, in the alternative, for a stay of enforcement under Fed. R. Civ. P. 62(h).

The Soo also was unhappy, because it had requested pre-judgment interest. It reminded the district judge that it wanted that relief. In May 1987 the district court entered an order, the entire operative language of which is:

I find that, considering the rather peculiar circumstances of these cases, the Escanaba is entitled to the relief it seeks. Accordingly, its motion is GRANTED, and the judgment in 85-C-1695 is stayed until the parties' arbitration proceeding is completed. No bond is required.

This order did not address the pending request for interest, so the Soo sent the district judge a letter seeking clarification and an explicit resolution of the question. The district court did not respond to this letter. The Soo filed a notice ...


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