Bangor & A. R. Co. v. I. C. C., 77-1082
Decision Date | 12 May 1978 |
Docket Number | No. 77-1082,77-1082 |
Parties | BANGOR AND AROOSTOOK RAILROAD COMPANY, Petitioner, v. INTERSTATE COMMERCE COMMISSION, Respondent, Maine Central Railroad Company et al., Intervenors. |
Court | U.S. Court of Appeals — First Circuit |
Laurence S. Fordham, Boston, Mass., with whom Verne W. Vance, Jr., David W. Walker and Foley, Hoag & Eliot, Boston, Mass., were on petition for rehearing or, in the alternative, rehearing en banc.
Before CAMPBELL, Circuit Judge, TUTTLE, Circuit Judge, * WOLLENBERG, District Judge. **
Bangor and Aroostook Railroad Company ("BAR") has petitioned for rehearing and/or, rehearing en banc, on the question whether the statute of limitations bars recovery of damages incurred by Maine Central Railroad ("MEC") and by the trustees of Boston and Maine Corp. ("B&M") prior to July 8, 1972. The statute of limitations question was addressed and decided against BAR in our opinion. BAR now claims an inconsistency between our treatment of the issue there and in this court's recent opinion in Cook v. Avien, 573 F.2d 685 (1 Cir. 1978).
In Cook the purchasers of stock sued a broker and the issuing company for fraudulent omissions during the course of the sale. We held that plaintiffs had failed to carry their burden of proving reasonable diligence in investigating and pursuing their claims once they were on notice that their investments were rapidly deteriorating. We held them barred by the one-year statute from recovery under §§ 12(1) and (2) of the Securities Act of 1933. We remanded on the question of whether the applicable two-year limitations period similarly prevented recovery under § 10(b) of the Securities Exchange Act as this necessitated a more precise factual inquiry than was appropriate at the appellate level.
BAR argues that our holding that the statute was tolled in these circumstances conflicts with the ruling in Cook that the statute was not tolled "when 'storm warnings' had given the potential plaintiffs 'inquiry' notice . . . that they must diligently investigate what lay behind the warnings."
While the argument is by no means frivolous we think the different rulings in the two cases were justified by different factual and legal considerations. We start by pointing out that the evidence, in its totality, is not so conclusive of MEC's "actual knowledge" as BAR would have it. The evidence is equally indicative of MEC's holding mere suspicions about BAR-CP activity, fired by rumor and BAR's waffling in the face of pointed interrogation by MEC suspicions held despite BAR and CP's concurrent obfuscation of their plan.
For example, MEC President Miller's memorandum of a conversation he had with Dumaine on July 2, 1970, shows that Dumaine described BAR's "reported arrangement" with CP variously as a result of shipper preference and concomitant BAR revenue interests, a need for better service on its connecting lines, and alleged difficult working relations between BAR and MEC personnel. Dumaine also said the alleged contract had not yet been finalized, that it was still being worked on, that he had never seen a final draft. Dumaine "further indicated, in view of what (Miller) said, that there was some doubt if the Montreal agreement would ever be finalized." Dumaine did disclose to Miller, when pushed, the general terms of at least one version of the proposed arrangement. (He expressed the financial agreement between BAR and CP in different ways at different points in the conversation.) But Dumaine did not respond to Miller's request to see the agreement, and put Miller off generally with regard to the agreement's status and future, i. e., whether it would be put into effect. Yet by this time, July 2, an agreement in principle had been reached, and the solicitation efforts of both BAR and CP had begun.
This was written when negotiations between BAR and CP were already in progress.
Requests by MEC that BAR or CP disclose the arrangement went unheeded by BAR. Though there was testimony that in June, 1970, before Miller's interview with Dumaine, BAR apprised MEC of the existence of an arrangement yet to be executed, subsequent inquiry of CP officials elicited the responses that CP "was performing a sales blitz in Aroostook County, which is necessary" implicitly on its own initiative, and that "there was no division agreement in the works," but "probably there would be a per diem agreement." Miller's statement, in his letter of September, 1970, to Great Northern, evinces MEC's awareness that "it is no secret that Mr. Dumaine entered into a little hanky-panky with the Canadian Pacific whereby (BAR) and (CP) agreed to use their best efforts to foster elimination of (MEC) from all possible routings," but at the same time it sets forth again, albeit skeptically, BAR's disingenuous responses that car supply and service considerations motivated and warranted the arrangements. Further, in March, 1972, a BAR vice-president wrote to the B&M Chief Executive Officer that the "overriding factors which contribute towards the decision to use CPR are service and car supply," and requested...
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