A multi-million dollar anti-trust decision favoring a small, independent West Coast bus line over Greyhound Lines, Inc., has been upheld by a federal appeals court in Chicago.
The court on Thursday agreed that Greyhound, which controls 80 per cent of the bus traffic in the western states, had attempted to eliminate Mt. Hood Stages, Inc., based in Dend, Oregon, as "substanial competitor."
The decision by the Ninth District Court of Appeals upheld a 1973 lower court decision that granted $14.7 million in damages (including legal fees) to Mt. Hood. That figure hsa been pushed up to over $18 million because of interest.
Greyhound argued that it was exempt from anti-trust litigation because the Interstate Commerce Commission had allowed it to acquire eight bus and thus it was free to use the acquired lines as it pleased.
But Mt. Hood contended that, while the acquisitions themselves were exempted from anti-trust because they had the ICC's approval, Greyhound had nevertheless violated anti-trust laws by using the acquired line to attempt to destroy a competitor.
The decision comes at a time when the whole question of anti-trust exemption for transportation companies is being reviewed by the government.
As described in the Mt. Hood decision, between 1947 and 1956, Greyhound acquired eight bus companies serving the West Coast.
Mt. Hood, who routes at the time stretched from Prgon into Idaho and Utah, went before the ICC and opposed four of these Greyhound acquisitions. The smaller bus lines argued that, if the acquistions were approved it would be surrounded by Greyhound, which could then route traffic around it. If this happened, Mt. Hood said the public would be deprived of the most convenient service and Mt. Hood would be deprived of revenues necessary for survival.
But the ICC allowed Greyhound to go through with its acquistions after it agteed not to interfere with Mt. Hood's business. Greyhound promised "open gateways" for passengers who wanted to transfer to Mt. Hood, which had the most direct north-south route through Oregon. The bigger line also said it would not "route passengers over circuitous routes" to avoid Mr. Hood, and that it would continue a joint through-bus arrangement with Mt. Hood.
By 1964, however, Mt. Hood filed a petition with the ICC asking it to order Greyhound to live up to its agreement. There followed a series of decisions upholding Mt. Hood's complaint against Greyhound.
In 1968 an ICC hearing examiner found that Greyhound's actions "were inpired by a desire to stifle competition and "injure and destroy" Mt. Hood. The examiner's decision was sustained by the commission as a whole.
In July, 1968, Mt. Hood filed its anti-trust suit against Greyhound, charging that the bigger line had restrained and monopolized traffic. Mt. Hood said that Greyhound was using the very same-competitive tactics that it had promised the ICC it would avoid.
Soon after, the ICC entered its own order requiring Greyhound to live up to its earlier commitments. A three-judge district court affirmed the ICC and issued an order of its own using similar terms. Then, in June 1971, when Greyhound was continuing its anti-competitive practices, a federal court found the company in criminal contempt.
In the anti-trust case, Greyhound has 90 days from last Thursday, when the court handed the decision down to file an appeal with the U.S. Supreme Court.