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BOSTON & MAINE CORP. v. CHICAGO

October 4, 1966

BOSTON AND MAINE CORPORATION, Plaintiff,
v.
CHICAGO, BURLINGTON AND QUINCY RAILROAD, Defendant


Wyatt, District Judge.


The opinion of the court was delivered by: WYATT

WYATT, District Judge.

This is a motion by plaintiff Boston and Maine Corporation ("B&M") for summary judgment on the first claim in its complaint (Fed.R.Civ.P. 56), and for an order striking as insufficient and immaterial all of the complete and partial defenses of defendant Chicago, Burlington and Quincy Railroad ("Burlington"). Fed.R.Civ.P. 12(f).

 In an order with opinion being filed herewith, leave is being granted to Burlington to serve an amended (partly supplemental) answer and counterclaims. Accordingly, the present motion to strike defenses will be considered with respect to the amended answer and counterclaims, already on file.

 This action was commenced by plaintiff B&M in the New York State Supreme Court, New York County, by service of summons and complaint on November 19, 1965. Upon petition filed by defendant on December 6, 1965 the action was removed to this Court by reason of diversity of citizenship. 28 U.S.C. §§ 1332, 1441. The answer was filed on February 21, 1966.

 The Motion for Summary Judgment

 The first claim in the complaint, upon which summary judgment is sought, prays for judgment enforcing an arbitration award which awarded to B&M $172,498.73 plus undetermined amounts accruing after December 1964 (the award also placed upon Burlington the burden of the arbitration fee). The award was for certain "interline freight balances", to be hereafter explained, found to be due from Burlington to B&M. The first claim also prays for an order enjoining defendant from "off-setting future car hire claims against freight earnings collected on behalf of plaintiff".

 The facts surrounding the award sought to be enforced do not appear to be in dispute and are as follows:

 B&M and Burlington are both railroad common carriers. Both are members of the Accounting Division (the "Division") of the Association of American Railroads (the "Association"). The Division has had in effect various "mandatory" and "recommendatory" accounting rules which for present purposes amount as to "mandatory" rules to an agreement binding on all members, including these two parties here. The Division publishes its rules in book form. The book to which the Court is referred is "Railway Accounting Rules", effective September 1, 1965 ("RAR"), to which page reference will be hereafter made; none of the rules were significantly different for relevant periods prior to September 1, 1965.

 Article III of the Division's Rules of Order (RAR, p. 397) provides, among other things, for the promulgation of rules relating to interline freight and passenger accounting and interroad disbursement accounts, "which shall be mandatory and binding upon carriers operating in North America who are members of the Division". As noted, both B&M and Burlington are such carrier members.

 Article X, § 2(h) (RAR, p. 400) of the Division's Rules of Order provides for six Accounting Rules Arbitration and Appeal Committees, consisting of three members each.

 The Division has promulgated Mandatory Arbitration Rules (RAR, pp. 377 and following), binding upon both B&M and Burlington.

 Mandatory Arbitration Rule 1 (RAR, p. 377) provides:

 
"Procedure in Respect to Application of Rules and in Cases of Disagreements
 
When any member of this Division disagrees with another member as to the application of a mandatory rule, he may submit his case to the Secretary for presentation to the appropriate Arbitration Committee for a decision. The decision of the majority of that Committee shall be binding on the parties involved, except that they shall have the right of appeal to the ...

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