Charges of antitrust violations by Seaboard Coast Lines Industries, filed by two competing railroad companies in the southeast, have been dismissed by an administrative law judge of the Interstate Commerce Commission.
Seaboard did violate some terms of two earlier merger agreements, however, said Judge Brenda Murray. The terms allegedly violated by Seaboard required that existing routes and channels of trade be kept open to competing lines.
Washington-based Southern Railway and the Florida East Coast both charged in 1977 that the Clayton Act and Interstate Commerce Act had been violated by the Seaboard Coast Line when it increased its stock ownership of the Louisville & Nashville railroad.
Southern also alleged that Seaboard violated conditions imposed by the ICC when it approved a 1970 merger of the L&N and Monon Railroad, which allegedly had the effect of injuring the Washington corporation.
The ICC's own bureau of enforcement agreed that the Clayton Act was violated and that competition in the Chicago-Florida routes had been substantially reduced, allowing Seaboard to become entrenched as a dominant carrier.
But Murray said that a Seaboard predecessor already had acquired a controlling interest in L&N in 1902, a dozen years before the passage of the Clayton Act. The legal control of L&N was within a grandfather exemption of the antitrust statute and this explanation passed on to Seaboard Coast Line Industries in 1967 with a merger of Seaboard and Atlantic Coast Line (which had owned the L&N control), she ruled.
In effect, Murray stated, the Seaboard's subsequent purchases of L&N stock did not alter a previous situation of actual control.
She did find, however, that Seaboard allowed its Moncrief yard in Jacksonville to deteriorate and that the railroad refused to allow shippers of glass to route special trailers used for glass shipments off the Seaboard system onto other rail lines. She ordered that these alleged violations be halted.
Murray also ordered some amendments to the ICC approval of the L&N Monon merger by directing Seaboard not to require any rail subsidiaries to declare or pay dividends in any year in excess of 70 percent of profits, without ICC approval. Other requirements would prohibit cash advances to the parent firm or cretain property transactions.
She also directed Seaboard and Southern to resolve, within 120 days, disputes on routing over their rail lines. Otherwise, the ICC may require arbitration, she said.