Singer Sons v. Union Pac Co Kansas City, Mo v. Singer Sons

• Citation: 311 U.S. 295,61 S.Ct. 254,85 L.Ed. 198
• Decision Date: 16 December 1940
• Docket Number: 35,Nos. 34,s. 34
• Parties: L. SINGER & SONS et al. v. UNION PAC. R. CO. KANSAS CITY, MO., v. L. SINGER & SONS et al
• Court: United States Supreme Court

311 U.S. 295

61 S.Ct. 254

85 L.Ed. 198

L. SINGER & SONS et al.

v UNION PAC. R. CO.

KANSAS CITY, MO.,

v. L. SINGER & SONS et al.

Nos. 34, 35.

Argued Nov. 14, 15, 1940.

Decided Dec. 16, 1940.

[Syllabus from pages 295-297 intentionally omitted]

Messrs. Ruby D. Garrett and John M. Cleary, both of Kansas City, Mo., for petitioners L. Singer & Sons and others.

Messrs. William E. Kemp and John M. Cleary, both of Kansas City, Mo., for petitioner Kansas City, Mo.

Messrs. Henry N. Ess, of Kansas City, Mo., and Thomas W. Bockes, of Omaha, Neb., for respondent Union Pac. R. Co.

Mr. Justice McREYNOLDS delivered the opinion of the Court.

Undertaking to proceed under Paragraphs 18, 20 and 21, Section 402, Transportation Act, 1920,¹ 41 Statutes 456, 477, U.S.C. Title 49, § 1, 49 U.S.C.A. § 1, petitioners, by bill filed December 30, 1938, in the United States District Court, Western District of Missouri, 26 F.Supp. 721, asked a decree enjoining respondent from constructing or operating an alleged extension.

The bill describes them thus:—'Plaintiffs are engaged in the business of buying and selling at wholesale and retail, fruits, vegetables and other food products within and adjacent to the so-called City Market of Kansas City, Missouri, located at and near the intersection of Fourth and Walnut Streets in said City, or are directly interested in or connected with said business. Said market has been in existence at said location for more than seventy-five years serving greater Kansas City and vicinity as a wholesale and retail produce market, and also serving numerous territories in other states to and from which perishable and other produce bought and sold in said market is transported. The City of Kansas City, Missouri, is now engaged in the construction of new wholesale and retail market buildings and facilities in said vicinity at a cost of approximately 500,000.00. Said market is now and for a long period of time has been served by existing transportation facilities of various trunk line railroads, and said existing transportation facilities are suitable, convenient and adequate to meet the requirements of the market. The market is easily accessible to its customers through the facilities of said railroads and also by the use of streets and hard-surfaced highways radiating in every direction therefrom.'

Answering, the respondent alleged that petitioners were not parties 'in interest' within Paragraph 20, Sec. 402, Transportation Act and had no right to sue. The District Court sustained this defense and dismissed the bill. Upon appeal its action was affirmed. The matter is here by certiorari.

The Circuit Court of Appeals, 8 Cir., 109 F.2d 493, 495, made the following summation of the bill—'The complaint of the plaintiffs shows that they are commission merchants doing business on the Kansas City, Missouri, produce market, an old and well-estab- lished market which adequately serves the consuming public in its vicinity and receives produce from, and ships produce to, other states; that Kansas City, Missouri, is now engaged in constructing new market buildings for this market at a cost of about $500,000; that the market has suitable and adequate transportation facilities of all kinds; that the adjoining city of Kansas City, Kansas, proposes to build and is building a 'food Terminal' or produce market on a tract of land which it owns, at a cost of about $4,000,000, of which $1,710,000 is a grant from the Public Works Administration of the United States, and that the balance of the necessary funds will be procured by a sale of the City's bonds to the defendant railroad company; that the defendant proposes, at an expense of some $500,000, to furnish trackage to serve this Kansas City, Kansas, market; that this trackage constitutes an extension of the defendant's lines of railroad, for the construction of which it has procured no certificate of convenience and necessity from the Interstate Commerce Commission as required by law; that the construction and operation of the proposed extension in Kansas City, Kansas, will adversely affect and will destroy the business and properties of the plaintiffs and the large investments which they have made in and adjacent to the Kansas City, Missouri, produce market; that it will create an unnecessary and uncalled for rival market at an inconvenient place without creating any more produce to be handled or any more customers to be served; that it will result in the unnecessary duplication of railroad facilities at a cost of $500,000 without increasing the amount of freight to be handled; that it will divert traffic from other railroads which are now adequately handling the traffic to the Kansas City, Missouri, produce market, and will cause destructive competition between the defendant and other railroads and will cause a wasteful and needless expendi- ture of money by the defendant; that 'for each and all of the reasons aforesaid, the construction and operation, or the construction, or the operation of the said extension or extensions of railroad by the defendant to said proposed produce market in Kansas City, Kansas, will directly and adversely affect the property interests of the plaintiffs and the public generally by bringing about a material change in the transportation situation, and will constitute an unnecessary burden upon interstate commerce, directly and adversely affecting the welfare of plaintiffs and the public interest."

It is not alleged that the respondent has ever served the produce market in Kansas City, Missouri, or that petitioners make or receive shipments over its lines or that the proposed extension will deprive them of any shipping facilities. Evidently the real purpose was to obstruct construction of a competitor and the theory upon which the proceeding rests would permit petitioners to sue if any railroad should extend its lines to any market competing with the market at Kansas City, Missouri.

Concerning the purport of the allegations of the bill, the Circuit Court of Appeals rightly said: 'It is obvious that the only basis for the plaintiffs' claim that the alleged extension of the lines of the defendant to the Kansas City, Kansas, market will particularly injure them is that they do business upon the Kansas City, Missouri, market, and that if the proposed rival market in Kansas City, Kansas, functions, it will divert business from the market upon which they operate and will thus hurt them, their business, and their investments in Kansas City, Missouri, and that, since the proposed extension of its tracks by the defendant is necessary to enable the rival market to function, such extension will therefore injure the plaintiffs. It seems equally obvious that, except for the fact that the pro- posed extension is essential to the operation of the rival market in Kansas, it could not possibly have any direct or immediate effect upon the plaintiffs, their property or their business in Missouri, other than the effect which a wasteful expenditure by the defendant of its money would have upon the public generally. The proximate cause of the injury to the plaintiffs will be the competition created by the construction and operation of the rival market, and not the construction or operation of the transportation facilities furnished to it by the defendant or by others engaged in the transportation business.'

It declared that the question whether petitioners were 'parties in interest' within Paragraph 20 must be determined upon consideration of Western Pacific California R. Co. v. Southern Pacific, 284 U.S. 47, 52 S.Ct. 56, 76 L.Ed. 160, and concluded 'The plaintiffs have no definite legal right which is threatened. They are, however, persons whose welfare may be adversely affected by the bringing about of a material change in the transportation situation, in the sense that the extension proposed by the defendant, if built and operated, will enable a competitive market to function to their detriment. In that sense, we think it may safely be said that the proposed extension of defendant's lines may adversely affect the plaintiffs' welfare. We are of the opinion, however, that their complaint discloses that their welfare cannot be directly, but only indirectly and consequentially, affected by the proposed extension. They are not in competition with the defendant. They are not engaged in the transportation business. Their only peculiar interest in that business is in the effect which changes in it may have upon the market where they do business and upon rival markets now or hereafter established in the territory which the plaintiffs serve. * * * We conclude that the statute is not to be so liberally construed as to enable those who fear adverse effects upon their business from the establishment of competitive enterprises requiring transportation facilities, to maintain suits to enjoin railroads from constructing what are claimed to be unauthorized extensions to serve such enterprises.'

A dissenting opinion by Judge Stone likewise relied upon Western Pacific California Railroad Co. v. Southern Pacific Company, but took the view that the challenged action might directly and substantially affect petitioners' welfare since their financial interests would suffer from the proposed rival market which could not come into existence without the proposed extension.

The purpose and effect of paragraphs 18, 20 and 21 were much considered in Texas & Pacific Ry. Co. v. Gulf, Colorado & Santa Fe Ry. Co., 270 U.S. 266, 46 S.Ct. 263, 70 L.Ed. 578, and Western Pacific California Railroad Co. v. Southern Pacific Company, 284 U.S. 47, 52 S.Ct. 56, 76 L.Ed. 160.

In the first of these causes a railroad sought to prevent another from building an extension. The meaning of the term 'party in interest' was not discussed. But the opinion asserts that by the Transportation Act of 1920, 'Congress undertook to develop and maintain, for the people of the United States, an adequate railway...