Friday, November 16, 2012

US v. Terminal Railroad Association case brief

US v. Terminal Railroad Association case summary
224 U.S. 383 (1912)

FACTS
-RR Companies operating through St. Louis created an organization, Terminal RR Association of St. Louis, to operate the bridges and terminals in St. Louis for getting across Mississippi River.
-Toll bridges could be used by all on equal terms, but accessible only by the terminal companies that operate lines connecting w/ RR terminal

ISSUE
-Was this joint venture a violation of the Sherman Act?

HOLDING

-Yes, because the result of the geographical and topographical situation peculiar to the locality is that it is, as a practical matter, impossible for any RR company to pass through or even enter St. Louis, so as to be within reach of its industries or commerce, w/o using the facilities entirely controlled by the RR terminal co.

ANALYSIS
-A combination of two or more terminal companies into a single system does not violate the Sherman act when it is of the greatest public benefit.
-However, it is a violation in where inherent conditions are such as to prohibit any other reasonable means of entering the city, the combination of every such facility under the exclusive ownership and control of less than all of the companies under compulsion to use them violates both the first and second sections of the act, in that it constitutes a K or combination in restraint of commerce

Remedies:

1.  Provide for admission of any existing or future RR to joint ownership and control of the combined terminal properties, upon such just and reasonable terms as shall place such applying company upon a plan of equality in respect of benefits and burdens with the present proprietary companies.

2.  Such plan of reorganization must also provide definitely for the use of the terminal facilities by any other railroad not electing to become a joint owner, upon such just and reasonable terms and regulations as will, in respect of use, character, and cost of service, place every such company upon as nearly an equal plane as may be with respect to expenses and charges as that occupied by the proprietary companies.


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