Northern Pacific Railway v. United States

356 U.S. 1 (1958)

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Nature of the Case

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Facts

In 1864 and 1870 Congress granted the predecessor of D approximately forty million acres of land to facilitate its construction of a railroad line from Lake Superior to Puget Sound. This grant consisted of every alternate section of land in a belt 20 miles wide on each side of the track through States and 40 miles wide through Territories. By 1949, D had sold about 37,000,000 acres of its holdings but had reserved mineral rights in 6,500,000 of those acres. In a large number of its sales contracts and most of its lease agreements D had inserted 'preferential routing' clauses which compelled the grantee or lessee to ship over its lines all commodities produced or manufactured on the land, provided that its rates (and in some instances its service) were equal to those of competing carriers. In 1949, the United States (P) filed suit under §4 of the Sherman Act seeking a declaration that D's 'preferential routing' agreements were unlawful as unreasonable restraints of trade under §1 of that Act. P moved for summary judgment. It was granted. The court issued an order enjoining D from enforcing the existing 'preferential routing' clauses or from entering into any future agreements containing them. The Supreme Court granted certiorari.