Louisville & Nashville Railroad v. United States

Background

A city traffic bureau challenged two major railroads (Louisville & Nashville and Nashville, Chattanooga & St. Louis) before the Commerce Commission, saying the $1 coal rate to Nashville was unreasonable and that yard switching practices unfairly excluded a competing carrier, the Tennessee Central. The Commission found the $1 rate unreasonable, set an 80-cent rate, and ordered the railroads to stop the discriminatory switching. The railroads sued in the federal District Court; a temporary injunction was denied and the case reached this Court on appeal.

Reasoning

The Court looked to the Commission’s detailed factual findings and evidence comparing rates and earnings. The Commission compared the Nashville haul (109 miles, $1 per ton) with other routes (for example Memphis, 276 miles at $1.10; Louisville, 142 miles at $0.65), reviewed per-car-mile earnings (showing higher earnings on the Nashville coal shipments), and noted car capacity had risen from 16 to 41 tons. The Court said those comparisons and other evidence supported the reduced rate and that the Commission—familiar with local rate history—was entitled to weigh that evidence. On switching, the Commission found the yards, though jointly owned, had been opened for many switching purposes but coal had been excluded; the Court held the Commission could forbid discriminatory switching and require equal interswitching.

Real world impact

The ruling lets the 80-cent coal rate stand and requires railroads to give the Tennessee Central the same switching service they furnish each other, affecting coal shippers and industries in the Nashville yards. It limits rail carriers’ ability to exclude competitors at open terminal facilities. The Court affirmed the lower-court judgment but did not prescribe exact switching charges or durations.

Dissents or concurrances

One Justice concurred in the result; another Justice did not participate.