Erie-Lackawanna Railroad Company v. United States

• Decision Date: 19 October 1967
• Docket Number: 3413,67 Civ. 2451.,No. 66 Civ. 2860,2903,2914,66 Civ. 2860
• Citation: 279 F. Supp. 316
• Parties: ERIE-LACKAWANNA RAILROAD COMPANY, Plaintiff, v. UNITED STATES of America and Interstate Commerce Commission, Defendants. The Delaware and Hudson Railroad Corporation, Chicago & Eastern Illinois Railroad Company, Milton J. Shapp, City of Scranton, Borough of Freedom, and Boston and Maine R. R. Co., Intervening Plaintiffs, Pennsylvania Railroad Company, New York Central Railroad Company, and Richard Joyce Smith and William J. Kirk, as Trustees for the New York, New Haven & Hartford Railroad Company, Debtor, Intervening Defendants. The BALTIMORE AND OHIO RAILROAD COMPANY, the Chesapeake and Ohio Railway Company, and Norfolk and Western Railway Company, Plaintiffs, v. UNITED STATES of America, Defendant. The CENTRAL RAILROAD COMPANY OF NEW JERSEY and Reading Company, Plaintiffs, v. UNITED STATES of America, Defendant. Western Maryland Railway Company, Intervening Plaintiff. OSCAR GRUSS & SON, Plaintiff, v. UNITED STATES of America and Interstate Commerce Commission, Defendants. The New York, New Haven and Hartford Railroad Company First Mortgage 4% Bondholders Committee, Intervening Plaintiff, The New York Central Railroad Company, the Pennsylvania Railroad Company, and Richard Joyce Smith and William J. Kirk, as Trustees for the New York, New Haven & Hartford Railroad Company, Debtor, Intervening Defendants. The DELAWARE AND HUDSON RAILROAD CORPORATION, and Norfolk and Western Railway Company, Plaintiffs, v. UNITED STATES of America, Defendant. Boston and Maine Corporation, John Hancock Mutual Life Insurance Company, the Prudential Insurance Company of America, Aid Association for Lutherans, and Woodmen of the World Life Insurance Society, Intervening Plaintiffs, Interstate Commerce Commission, Erie-Lackawanna Railroad Company, Intervening Defendants.
• Court: U.S. District Court — Southern District of New York

279 F. Supp. 316

ERIE-LACKAWANNA RAILROAD COMPANY, Plaintiff, v. UNITED STATES of America and Interstate Commerce Commission, Defendants.

The Delaware and Hudson Railroad Corporation, Chicago & Eastern Illinois Railroad Company, Milton J. Shapp, City of Scranton, Borough of Freedom, and Boston and Maine R. R. Co., Intervening Plaintiffs,

Pennsylvania Railroad Company, New York Central Railroad Company, and Richard Joyce Smith and William J. Kirk, as Trustees for the New York, New Haven & Hartford Railroad Company, Debtor, Intervening Defendants.

The BALTIMORE AND OHIO RAILROAD COMPANY, the Chesapeake and Ohio Railway Company, and Norfolk and Western Railway Company, Plaintiffs, v. UNITED STATES of America, Defendant.

The CENTRAL RAILROAD COMPANY OF NEW JERSEY and Reading Company, Plaintiffs, v. UNITED STATES of America, Defendant.

Western Maryland Railway Company, Intervening Plaintiff.

OSCAR GRUSS & SON, Plaintiff, v. UNITED STATES of America and Interstate Commerce Commission, Defendants.

The New York, New Haven and Hartford Railroad Company First Mortgage 4% Bondholders Committee, Intervening Plaintiff,

The New York Central Railroad Company, the Pennsylvania Railroad Company, and Richard Joyce Smith and William J. Kirk, as Trustees for the New York, New Haven & Hartford Railroad Company, Debtor, Intervening Defendants.

The DELAWARE AND HUDSON RAILROAD CORPORATION, and Norfolk and Western Railway Company, Plaintiffs, v. UNITED STATES of America, Defendant.

Boston and Maine Corporation, John Hancock Mutual Life Insurance Company, the Prudential Insurance Company of America, Aid Association for Lutherans, and Woodmen of the World Life Insurance Society, Intervening Plaintiffs,

Interstate Commerce Commission, Erie-Lackawanna Railroad Company, Intervening Defendants.

Nos. 66 Civ. 2860, 2903, 2914, 3413, 67 Civ. 2451.

United States District Court S. D. New York.

October 19, 1967.

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Cravath, Swaine & Moore, by Thomas D. Barr, Harry H. Voigt, Eldon Olson, John M. Linsenmeyer, and Alexander & Green, New York City, for Erie-Lackawanna R.R.

Nixon, Mudge, Rose, Guthrie, Alexander & Mitchell, by Harry G. Silleck, Jr., New York City, for Delaware & H. R.R.

Sidley & Austin, by Howard J. Trienens and George Saunders, Jr., Chicago, Ill., Kelley, Drye, Newhall, Maginnes & Warren, by Frank H. Heiss, New York City, Wilmer, Cutler & Pickering, and Wheeler & Wheeler, Washington, D. C., for Norfolk & W. Ry., Baltimore & O. R.R., Chesapeake & O. Ry. and Western Maryland Ry.

Macklin, Hanan & McKernan, by Timothy A. Hanan, New York City, and William P. Quinn, Philadelphia, Pa., for Reading Co.

Hogan & Hartson, by Edward A. McDermott and James A. Belson, Washington, D. C., and Richard C. Casey, New York City, for Boston & M. R. R.

Windsor F. Cousins, Philadelphia, Pa., and Conboy, Hewitt, O'Brien & Boardman, by Edward F. Butler, Hobart L. Brinsmade and David J. Mountan, Jr., New York City, for Pennsylvania R.R.

Gerald E. Dwyer, James B. Gray and Jerome H. Shapiro, New York City, for New York Cent. R.R.

Sullivan & Worcester, by Joseph Auerbach, Boston, Mass., and James Wm. Moore, New Haven, Conn. and Robert M. Peet, New York City, for Richard Joyce Smith and William J. Kirk.

William G. Mahoney, Washington, D. C., and Reilly, Curry & Gibbons, by Paul G. Reilly, Jr., New York City, for Railway Labor Executives Ass'n.

Donovan, Leisure, Newton & Irvine, by Malcom Fooshee and Granville Whittlesey, Jr., New York City, for John Hancock Mutual Life Ins. Co., Prudential Ins. Co. of America, Aid Ass'n for Lutherans, and Woodmen of the World Life Ins. Soc.

Myron S. Isaacs, New York City, for Oscar Gruss & Son.

Migdal, Low, Tenney & Glass, by Lester G. Migdal and Lawrence W. Pollack, New York City, for New Haven First Mortgage Bondholders Committee.

Robert W. Ginnane, Leonard S. Goodman, Betty Jo Christian and Fritz R. Kahn, and Jerome Nelson, Washington, D. C., for Interstate Commerce Commission.

Howard E. Shapiro, Washington, D. C., Joel A. Forkosch and Michael D. Hess, New York City, and William R. Weissman, Washington, D. C., for United States.

Arthur A. Arsham, New York City, and Gordon P. MacDougall, Washington, D. C., for City of Scranton and Milton J. Shapp.

Walter J. Myskowski, Washington, D. C., for State of New York.

Robert M. Schacht, Providence, R. I., for State of Rhode Island.

Leon S. Wolk, Fort Lee, N. J., for State of New Jersey.

Samuel Kanell, Hartford, Conn., for State of Connecticut.

Edward W. Hanley, III, Boston, Mass., for Commonwealth of Massachusetts.

John R. Thompson, New York City, for City of New York.

Alan J. Littau, New York City, for Port of New York Authority.

Robert M. Morgenthau, U. S. Atty., for Southern Dist. of New York, Brian J. Gallagher, Asst. U. S. Atty., for the United States and the Interstate Commerce Commission.

Shea & Gardner, Washington, D. C., for trustees of property of Central Railroad of New Jersey, debtor, William H. Dempsey, Jr., Washington, D. C., of counsel.

Richard J. Lally, Richard B. Wachenfeld, Newark, N. J., for Central Railroad of New Jersey.

Before FRIENDLY, Circuit Judge, and WEINFELD and LEVET, District Judges.

FRIENDLY, Circuit Judge:

We have before us, on final hearing, actions to enjoin the enforcement of orders of the Interstate Commerce Commission in F.D. 21989 and 21990, see 327 I.C.C. 475, 328 I.C.C. 304, and 330 I.C.C. 328, authorizing the merger of Pennsylvania Railroad Company (PRR) and New York Central Railroad Company (NYC) into a single company (Penn-Central), and in F.D. 21510, see 330 I.C.C. 780 and 331 I.C.C. 22, directing the Norfolk & Western Railway System (N & W) to include Erie-Lackawanna Railroad Company (E-L), The Delaware & Hudson Railroad Corporation (D & H) and the Boston & Maine Corporation (B & M) on terms therein specified. The orders come before us as a result of three separate actions or sets of them. The first set, sometimes hereafter referred to as the merger actions, consists of three suits, 66 Civ. 2860, 2903 and 2914, D.C., attacking the orders in F.D. 21989 and 21990.¹ A year ago we denied temporary injunctions in these suits, Judge Weinfeld dissenting on the ground that the Commission had not finalized the "Appendix G conditions" for the protection of E-L, D & H and B & M, 259 F.Supp. 964 (S.D. N.Y.1966), and were subsequently reversed by a closely divided Supreme Court, 386 U.S. 372, 87 S.Ct. 1100, 18 L. Ed.2d 159 (1967). In a supplemental report, served June 12, 1967, the Commission revised and completed the Appendix G conditions; on September 11, 1967, the Commission denied petitions for further reconsideration but on August 3 and September 12 it modified its order with respect to the New York, New Haven & Hartford Railroad Company (NH) in certain respects discussed below. The second action, sometimes hereafter referred to as the New Haven action, 66 Civ. 3413, addressed to orders in the same docket, was brought by Oscar Gruss & Son, a large holder of the New Haven's First and Refunding Mortgage Bonds, and a committee representing other holders of such bonds intervened. We dismissed the complaint, as well as a separate action by the committee, 66 Civ. 3425, primarily for lack of standing, Oscar Gruss & Son v. United States, D.C., 261 F.Supp. 386 (S.D.N.Y.1966), but the Supreme Court vacated our order on Gruss' appeal, 386 U.S. 776, 87 S.Ct. 1478, 18 L.Ed.2d 520 (1967), and remanded for further consideration. The third action, 67 Civ. 2451, Delaware and Hudson R.R. Co. v. United States, sometimes hereafter referred to as the inclusion action, was brought by D. & H. to review the order in F.D. 21510 as this affected it;² B & M and four life insurance companies holding large amounts of E-L's bonds intervened as plaintiffs and, on motion of the United States and the Interstate Commerce Commission, we directed that N & W be joined as a plaintiff. E-L intervened as a defendant and all four roads affected by the inclusion order are thus parties. Because of the close relation among all three actions, we think it best to dispose of them in a single opinion despite the length which the number of issues necessarily entails.

We shall not here detail the procedural history whereby the threat that these related orders would become the subject of litigation in six or more different district courts has seemingly been averted and all issues concentrated in a single court of first instance. This can be found in our orders of July 3, and July 26, 1967, the orders of the District Court for the Middle District of Pennsylvania dated July 11 and 27, 1967, and the orders of the District Court for the Western District of Virginia dated July 14 and September 11, 1967. Suffice it to say at this point that in our view the proceedings reflect credit on the sober second thought of most counsel and, even more so, on the restraint of the "disciplined and experienced judges," see Kerotest Mfg. Co. v. C-O-Two Fire Equipment Co., 342 U.S. 180, 184, 72 S.Ct. 219, 96 L.Ed. 200 (1952), of the Third and Fourth Circuits, who have demonstrated that even the long out-moded machinery for review of orders of the Interstate Commerce Commission by suit before a three-judge district court can be made to work, although with creaks and strains that ought to be eliminated.

We have said "seemingly averted" because N & W continues to challenge the power of this court to entertain the inclusion action or at least to join it as a plaintiff. Relying on a passage in our order granting the motion for joinder, wherein we said that this "shall not prejudice any contention the N & W may wish to make in any court that the Western District of Virginia is the appropriate forum for review of the inclusion order," N & W seeks to reargue the venue issue we there decided against it. Mere reading of the passage shows that it was not intended to give N & W permission to...