Since Section 2(c) has not been authoritatively construed by the courts, those seeking to interpret the section have looked to analogous statutes. One such statute is the 1906 amendment to the Hepburn Act, known as the Commodities Clause, 34 Stat. 585, now codified at 49 U.S.C. $10746. The Commodities Clause was intended to prohibit railroads from transporting goods which they produced or owned. As passed, the Clause provided:

"It shall be unlawful for any railroad company
to transport from any State, Territory, or
the District of Columbia, or to any foreign
country, any article or commodity, other than
timber and the manufactured products thereof,
manufactured, mined, or produced by it, or
under its authority, or which it may own in
whole or in part, or in which it may have an
interest, direct or indirect, except such
articles or commodities as may be necessary
and intended for its use in the conduct of
its business as a common carrier." 34 Stat.
585. 11/

The Supreme Court has interpreted this statute as prohibiting the transportation of goods owned by a railroad itself, but not of goods owned or produced by railroad affiliates. United States v. Delaware & Hudson Co., 213 U.S. 366 (1909). The obvious similarities between the Commodities Clause and Section 2(c) have led DOI and others to interpret 2(c) in the same narrow fashion. Colowyo Coal Project at 6-8; Covington & Burling Memorandum at 7-15. However, the Commodities Clause decisions are not a persuasive basis for interpreting 2(c). The rationale of Delaware & Hudson has been thoroughly discredited by more recent Supreme Court decisions. Finally, the narrow construction of the Commodities Clause in Delaware & Hudson was based in part on the Court's desire to avoid serious questions regarding the constitutionality of the statute under the Commerce Clause. The Commerce Clause no longer presents constitutional problems for statutes such as the Commodities Clause, and, as is discussed below, Section 2(c) relies on a constitutional basis other than the Commerce Clause and a broad interpretation would have been possible even in the early 1900's. In addition, the two statutues are differently worded and the policies behind them are significantly different.

11/

The Commodities Clause was formerly codified at 49 U.S.C. $1(8) and was recently recodified, with minor non-substantive changes, at 49 U.S.C. $10746.

The primary flaw in drawing an analogy to 2(c) from Delaware & Hudson is that the case was wrongly decided in the first place and its legal basis has subsequently been rejected by the Supreme Court. Only considerations of stare decisis have prevented outright overruling of Delaware & Hudson, and these of course would not apply to a judicial interpretation of Section 2(c).

In Delaware & Hudson, the first case involving the Commodities Clause, the Court held:

able.

"We then construe the statute as prohibiting a
railroad company engaged in interstate commerce
from transporting in such commerce articles or
commodities under the following circumstances
and conditions . . . (c) When the carrier at the
time of transportation has an interest, direct or
indirect, in a legal or equitable sense in the article
or commodity, not including, therefore, articles or
commodities manufactured, mined, produced or owned,
etc., by a bona fide corporation in which the rail-
road company is a stockholder." 213 U.S. at 415
(emphasis added).

The reaction to this decision was swift and predict-
As Mr. Justice Harlan said in dissent:

"In my judgment the act, reasonably and
properly construed, according to its
language, includes within its prohibitions
a railroad company transporting coal, if
at the time, it is the owner, legally or
equitably, of stock--certainly, if it owns
a majority or all of the stock--in the
company which mined, manufactured or pro-
duced, and then owns, the coal which is
transported by such railroad company. Any
other view of the act will enable the
transporting company, by one device or
another, to defeat altogether the
purpose which Congress had in view,
which was to divorce, in a real, sub-
stantial sense, production and trans-
portation, and thereby to prevent the
transporting company from doing injus-
tice to other owners of coal." Id. at 419.

Legal commentary was equally critical.

See, e.g., Comment,

"The Judicial History of the Anthracite Monopoly, 41 Yale L.J. 439 (1932); Anonymous, "The Commodities Clause Decision," 9 Colum. L. Rev. 523 (1909).

Subsequent cases developed a narrow "alter ego" exception to Delaware & Hudson under which the Commodities Clause could be used to prevent a railroad from shipping goods produced by a corporation which was virtually identical in ownership, control, and officers and directors with the railroad. See, e.g. United States v. Lehigh Valley R.R., 220 U. S. 257 (1911); United States v. Delaware, L & W. R.R., 238 U.S. 516 (1915). Even cases relying upon the "alter ego" exception, however, adhered to the Delaware & Hudson holding that railroad ownership of all the stock of, for example, a coal company did not necessarily prohibit railroad transportation of the company's coal. United States v. Reading Co., 253 U.S. 26, 60, 62 (1920)

Despite the development of the "alter ego" exception, the Court soon realized that its initial interpretation of the Commodities Clause was probably wrong. Yet a majority of the Court felt that the principal of stare decisis required that earlier decisions be followed. In United States v. Elgin, J. & E. Ry., 298 U.S. 492 (1936), for example, the Court reconsidered and upheld its Delaware & Hudson decision:

"Considering former rulings, it is impossible
for us now to declare as a matter of law
that every company all of whose shares are
owned by a holding company necessarily
becomes an agent, instrumentality, or depart-
ment of the latter. Whether such intimate
relation exists is a question of fact to
be determined upon evidence." 298 U.S. at
501 (emphasis added).

In Elgin, however, there were three dissenters as opposed to the single dissent in Delaware & Hudson. Justice Stone, joined by Justices Brandeis and Cardozo, declared that the Commodities Clause had been wrongly interpreted in Delaware & Hudson and that, in any event, that decision "neither requires nor excuses our reduction of the commodities clause to a cipher in the calculation of those who control the railroads in this country." 298 U.S. at 512.

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The next (and last) time the Court reconsidered the Commodities Clause, a bare 5-4 majority held that the prior decisions in Elgin and Delaware & Hudson should be followed. United States v. South Buffalo R. Co., 333 U.S. 771 (1948). Writing for the majority, Justice Jackson stated:

"It is the Government's contention that
the Elgin decision misconstrued the Act,
misunderstood its legislative history and
misapplied the Court's own prior decisions.
It is not necessary in the view we take
of the case to decide to what extent, if
any, these contentions are correct. It is
enough to say that if the Elgin case was
before us as a case of first impression,
its doctrine might not now be approved.
But we do not write on a clean slate.'
333 U.S. at 774.

333

In addition, the majority relied heavily on the fact that
following the decisions in Delaware & Hudson and Elgin,
attempts were made in Congress to reverse the effect
of those decisions by amending the Commodities Clause.
These attempts were specifically rejected by Congress.
U.S. at 775-80. Finally, the Court gave substantial
weight to the unfairness of prohibiting Bethlehem Steel from
shipping on its railroad--the issue in South Buffalo--when
the Elgin decision only 12 years earlier had allowed
U.S. Steel to ship on a railroad with which it was af-
filiated. These "equitable considerations," according to the
majority, required that Elgin be followed. See 333 U.S. at
780-85.

Justice Rutledge, joined by Justices Black, Douglas and Murphy, wrote a sharp dissent criticizing the original misconstruction of the legislative history and the majority's reliance on stare decisis:

"This is another case where the Court saddles
Congress with the load of correcting its own

emasculation of a statute, by drawing from Congress'
failure explicitly to overrule it the unjustified
inference that Congress approves the mistake." Id.
at 785-86.

The Court's decision in South Buffalo to adhere to a questionable precedent for reasons of stare decisis is similar to the history of the antitrust exemption for professional baseball. In Toolson v. New York Yankees, 346 U.S. 356 (1953), the Court, with two justices dissenting, reaffirmed the holding in Federal Baseball Club of Baltimore v. National League of Professional Baseball Clubs, 259 U.S. 200 (1922), that "the business of providing public baseball games for profit between clubs of professional baseball players was not within the scope of the federal

antitrust laws." 346 U.S. at 357. As in South Buffalo, this result was reached "[w]ithout re-examination of the underlying issues." Id. In 1972 the Court, this time with three dissenters, followed Federal Baseball and Toolson, again holding that stare decisis required that the antitrust exemption for baseball be maintained. Flood v. Kuhn, 407 U.S. 258, 282-85 (1972).

The importance to Section 2(c) of the analogy between the Toolson and Flood cases and the Commodities Clause cases lies in the strict limits on the application of stare decisis. While retaining the baseball exemption, the Court has refused to extend antitrust immunity to professional boxing, United States v. International Boxing Club, 348 U.S. 236 (1955) or football, Radovich v. National Football League, 352 U.S. 445 (1957), and lower courts have followed suit in cases involving such sports as amateur softball, Amateur Softball Ass'n of America v. United States, 467 F.2d 312 (10th Cir. 1972) and professional golf, Blalock v. Ladies Professional Gulf Ass'n, 359 F. Supp. 1260 (N.D. Ga. 1973). See also Haywood v. National Basketball Ass'n, 401 U.S. 1204 (1971) (Douglas, Circuit Justice). A court required to interpret Section 2(c) would undoubtedly follow the pattern established in the sports exemption cases: while stare decisis might require the Commodites Clause to be construed as it was in Delaware & Hudson, 2(c) is not burdened by such questionable past precedents and can be interpreted in light of its plain meaning and legislative history.

This review of major cases construing the Commodities Clause shows that they provide no foundation for interpreting Section 2(c) to allow leasing to railroad affiliates. The diminishing majorities in the successive decisions point to strong judicial doubt about the validity of the original interpretation. While a one vote majority is of course sufficient to decide the case before the Court, it raises substantial questions about the value of the decision in interpreting a different statute. This is particularly true where the other bases of the Court's decision are not present. In South Buffalo, for example, the Court emphasized the fact that Congress had specifically considered and rejected legislation which would have overturned its prior Commodities Clause decisions. The Court also felt it would be inequitable to render a decision treating Bethlehem Steel more harshly than it had treated Bethlehem's competitor, U.S. Steel, in Elgin. In interpreting Section 2(c), neither of the considerations is present: there has been no authoritative judicial construction of 2(c) for Congress to review and accept or reject. Neither would the application of 2(c) to railroad affiliates raise equitable problems of different treatment of different railroads.