Port of Portland v. United States - 408 U.S. 811 (1972)
U.S. Supreme Court
Port of Portland v. United States, 408 U.S. 811 (1972)
Port of Portland v. United States
Argued October 20, 1971
Decided June 29, 1972
408 U.S. 811
The Spokane, Portland & Seattle Railway Co. (SP&S), a subsidiary of Burlington Northern, and the Union Pacific (UP), sought Interstate Commerce Commission (ICC) approval under § 5(2) of the Interstate Commerce Act of a joint acquisition of control of the Peninsula Terminal Co. (Peninsula), whose tracks provide an access route to Rivergate, an industrial complex being developed by the Port of Portland, Oregon. Peninsula would continue to operate as a separate carrier. The Milwaukee and the Southern Pacific (SP), the two other line-haul carriers serving Portland, sought inclusion as joint purchasers of Peninsula, and trackage rights linking their lines with Peninsula, under §§ 5(2)(b), (c), and (d) of the Act. SP, by a separate proceeding, also sought trackage linking its lines with Peninsula, under § 3(5). The ICC (subject to conditions to protect the traffic of the other railroads) approved the purchase of Peninsula by Burlington Northern and UP, but denied the Milwaukee and SP petitions. It concluded that the adverse effects on SP&S and UP of the proposed four-railroad ownership of Peninsula and accompanying trackage rights would outweigh the advantages to SP, Milwaukee, and the Rivergate industries. Milwaukee contends that Condition 24(a) to the Northern Lines merger, which gave Milwaukee access to the Portland area over the Burlington Northern-SP&S tracks, required that Milwaukee be included in the purchase of Peninsula.
1. On the record in this case (which is ambiguous with regard to many factual and procedural issues), it has not been shown that the ICC's order authorizing UP and Burlington Northern alone to acquire Peninsula met the "public interest" standard of § 6(2). Pp. 408 U. S. 834-842
(a) In stressing the small share in Peninsula's traffic that Milwaukee had before the Northern Lines merger, the ICC ignored any possible increase in that share after Condition 24(a) took effect. Pp. 408 U. S. 839-840.
(b) In announcing a principle of preserving the market shares of the two railroads currently connecting with Peninsula, the ICC failed to explain why it was not taking into account the potentially enormous traffic over Peninsula, should Peninsula become the northern route into Rivergate. Pp. 408 U. S. 840-841.
(c) The ICC's denial of inclusion of SP and Milwaukee because their gain would work a corresponding loss to Burlington Northern and UP is not a proper approach under § 6(2), given the principle that the anticompetitive effects of any § 5(2) transaction must be explicitly considered. McLean Trucking Co. v. United States, 321 U. S. 67, 321 U. S. 83-87. Pp. 408 U. S. 841-842.
(d) In view of uncertainties about the northern access to Rivergate -- given the physical limitations of Peninsula's present facilities -- and the apparent fact that physical operation over Peninsula into Rivergate was not at issue here, approval of the ICC order, with its protective conditions, may still be in the public interest, but the announced grounds for the ICC decision do not comport with the applicable legal principles. See SEC v. Chenery Corp., 318 U. S. 80, 318 U. S. 87-88. P. 408 U. S. 842
2. The denial of trackage rights to SP (on the ground that SP was "not entitled to serve Peninsula or Rivergate") should be reconsidered by the ICC in conjunction with the reappraisal of the § 5(2) issues. Pp. 408 U. S. 843-844.
Reversed and remanded.
BLACKMUN, J., delivered the opinion of the Court, in which all Members joined except POWELL and REHNQUIST, JJ., who took no part in the consideration or decision of the case.