357 U.S. 77 (1958), 103, City of Chicago v. Atchison, Topeka & Santa Fe Railway Co.

Docket Nº:No. 103
Citation:357 U.S. 77, 78 S.Ct. 1063, 2 L.Ed.2d 1174
Party Name:City of Chicago v. Atchison, Topeka & Santa Fe Railway Co.
Case Date:June 16, 1958
Court:United States Supreme Court

Page 77

357 U.S. 77 (1958)

78 S.Ct. 1063, 2 L.Ed.2d 1174

City of Chicago


Atchison, Topeka & Santa Fe Railway Co.

No. 103

United States Supreme Court

June 16, 1958

Argued March 5-6, 1968




After the railroads operating in and out of Chicago had for many years utilized an old motor carrier to transfer interstate passengers and their baggage between different railroad terminals in the City, the railroads terminated that arrangement and engaged a newly organized motor carrier to provide the same service. The City then amended its municipal code so as to require, in effect, that the operator of any new transfer service must obtain a certificate of convenience and necessity from the Commissioner of Licenses and the approval of the City Council before it could lawfully transfer any passengers for the railroads. The new motor carrier refused to apply for a certificate of convenience and necessity, and the City threatened to arrest and fine its drivers if they operated unlicensed vehicles. The new motor carrier and the railroads then sued in a Federal District Court for a judgment declaring the city ordinance either inapplicable or invalid. The old motor carrier intervened as a defendant. The District Court dismissed the complaint. The Court of Appeals reversed, holding that the city ordinance, as applied, was repugnant on its face to the Constitution and laws of the United States.

Held: the judgment is affirmed. Pp. 78-79.

1. The judgment of the Court of Appeals was a proper subject of an appeal to this Court under 28 U.S.C. § 1254(2), since it held a state statute invalid as repugnant to the Constitution and laws of the United States, and it was a "final" judgment within the meaning of that section. Pp. 82-83.

2. The old motor carrier had standing to secure review of the judgment below by appeal, since the case involved an actual controversy and it had a direct and substantial personal interest in the outcome. Pp. 83-84.

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3. There being no ambiguity in the city ordinance and no doubt that it applied to the new motor carrier, the courts below properly passed upon its validity without awaiting its interpretation by the state courts. P. 84.

4. The city ordinance, as applied to the new motor carrier, is repugnant on its face to the Constitution and laws of the United States, because the City has no power to decide whether the new motor carrier can operate a transfer service between terminals for the railroads, which is an integral part of interstate railroad transportation authorized and subject to regulation under the Interstate Commerce Act. Pp. 84-89.

5. Since the city ordinance is completely invalid insofar as it applies to the new motor carrier, that company was not obligated to apply for a certificate of convenience and necessity and submit to administrative procedures incident thereto before bringing this action. P. 89.

240 F.2d 930 affirmed.

BLACK, J., lead opinion

MR. JUSTICE BLACK delivered the opinion of the Court.

Chicago is one of the Nation's great rail centers. Each day, thousands of railroad passengers travel through that City on continuous journeys from one State to

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another. Since the lines of all railroads which carry passengers into and out of Chicago come to an end in one of that City's eight terminals, through passengers frequently arrive at a station different from the one where they are to board their outgoing train, and must transfer with their baggage in order to continue their trip. Because of the serious problems of scheduling and passenger convenience involved in this interchange, [78 S.Ct. 1065] the railroads, as a group, have long provided for the transfer of through passengers from one station to another by a systematic and highly organized motor carrier operation. Generally the passengers receive a coupon covering this transfer service, without special charge, as part of their through ticket.

For many years, the railroads had an arrangement with Parmelee Transportation Company under which it carried through passengers between stations. Apparently finding its service no longer desirable, the railroads notified Parmelee in June, 1955, that they would discontinue using its transfer vehicles as of October 1, 1955. Subsequently, they engaged Railroad Transfer Service, a corporation specially organized at their request for that purpose, as their exclusive transfer agent for a five-year period commencing with the termination of Parmelee's service.

At the time the railroads gave Parmelee their notice, the City of Chicago had in effect a detailed plan for the regulation and licensing of public passenger vehicles for hire. Among other things, operation of any public passenger vehicle, including a vehicle engaged in the transfer of passengers between railroad stations, was prohibited unless it had been licensed by the City. Any person who operated one of these vehicles without a license was subject to arrest and punishment.

After the railroads announced they intended to use the facilities of Railroad Transfer Service instead of those of

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Parmelee, the City Council proceeded to amend the Municipal Code so as to effect certain important changes with regard to the licensing of transfer vehicles. A new section, 28-31.1, was added. In substance, it provided that no license for a transfer vehicle would issue unless the City Commissioner of Licenses first determined that public convenience and necessity required additional inter-terminal service. In that event, the City Council reserved final discretion to determine how many, if any, new licenses were to be issued. In making his determination, the Commissioner was authorized to consider public demand for the proposed additional transfer service, its economic feasibility, public safety, and, generally, any other facts he might think relevant.1 If § 28-31.1 validly

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applied to Railroad Transfer Service, that company was required to secure a certificate of convenience and necessity from the Commissioner, plus the approval of the City Council, before it could lawfully transfer any [78 S.Ct. 1066] passengers for the railroads. On the other hand, Parmelee was permitted to continue operating without leave from the City, since an exception in § 28-31.1 provided that no certificate was necessary for the renewal of an existing license. Parmelee's vehicles were all licensed, of course, at the time the section became effective.

As scheduled, Transfer began to carry passengers between stations on October 1, 1955.2 However, it refused to apply for a certificate of convenience and necessity, taking the position that § 28-31.1 was either inapplicable to its vehicles or, if applicable, invalid. The City rejected this contention, and threatened to arrest and fine Transfer's drivers if they operated unlicensed vehicles. Transfer and the railroads then filed this suit in United States District Court asking for a judgment declaring § 28-31.1 either inapplicable or invalid. The complaint asserted that the city's requirement of a certificate of convenience and necessity was inconsistent with the provisions of the Interstate Commerce Act, as well as the Commerce Clause of the Constitution insofar as it applied to vehicles transferring interstate passengers from one railroad station to another under agreement with the railroads. The City filed no answer, but moved for a summary judgment. Parmelee was permitted to intervene as a defendant.

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The district judge, pointing out that there were no genuine issues of fact, granted the city's motion and dismissed the complaint. But the Court of Appeals for the Seventh Circuit reversed. 240 F.2d 930. It agreed with the District Court that § 28-31.1 applied to Transfer's...

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