Pittsburgh & WV Ry. Co. v. United States

• Decision Date: 11 December 1929
• Docket Number: No. 3075.,3075.
• Citation: 41 F.2d 806
• Parties: PITTSBURGH & W. V. RY. CO. v. UNITED STATES et al.
• Court: U.S. District Court — Northern District of Ohio

41 F.2d 806 (1929)

PITTSBURGH & W. V. RY. CO. v. UNITED STATES et al.

No. 3075.

District Court, N. D. Ohio, E. D.

December 11, 1929.

C. F. Taplin and H. H. Hoppe, both of Cleveland, Ohio (Taplin & Fillius, of Cleveland, Ohio, of counsel), for the Pittsburgh & W. V. Ry. Co.

Elmer B. Collins, Sp. Asst. to Atty. Gen., for the United States.

Daniel W. Knowlton and Nelson Thomas, both of Washington, D. C., for defendant Interstate Commerce Commission.

W. C. Boyle, Clan Crawford, Charles F. Close, and Andrew P. Martin, all of Cleveland, Ohio (Squire, Sanders & Dempsey, of Cleveland, Ohio, of counsel), for defendant Wheeling & L. E. R. Co.

Charles W. Stage, W. H. Boyd, H. H. McKeehan, and L. C. Wykoff, all of Cleveland, Ohio (Boyd, Cannon, Brooks & Wickham, Dustin, McKeehan, Merrick, Arter & Stewart, and George W. Cottrell, all of Cleveland, Ohio, of counsel), for defendants Cleveland Union Terminals Co. and Cleveland Terminals Bldg. Co. H. N. Quigley, of Cincinnati, Ohio, and C. C. Handy and W. N. King, both of Cleveland, Ohio, for defendant Cleveland, C., C. & St. L. Ry. Co.

E. A. Foote and T. H. Burgess, both of Cleveland, Ohio (Cook, McGowan, Foote, Bushnell & Burgess, of Cleveland, Ohio, of counsel), for defendant Erie R. Co.

Before DENISON and HICKENLOOPER, Circuit Judges, and JONES, District Judge.

PER CURIAM.

Upon application of the Wheeling & Lake Erie Railway Company, hereinafter referred to as Wheeling, the Interstate Commerce Commission issued its certificate of public convenience and necessity (finance docket Nos. 7298 and 7299) certifying, in addition to making provision for temporary terminal facilities, that the present and future public convenience and necessity required Wheeling "to acquire passenger station facilities and service in the Union Depot of the Cleveland Union Terminals Company" and further that such present and future public convenience and necessity permitted Wheeling "to abandon the portion of its line of railroad, including its Ontario Street passenger station, all in the city of Cleveland, Cuyahoga County, Ohio, described in the application in Finance Docket No. 7299 and in the report" thereon. The two applications, the one to acquire terminal facilities in the Union Depot and the other to abandon Wheeling's present Ontario Street Station, are inseparably connected, were heard and determined together before the Interstate Commerce Commission, and the certificate of the commission is made the subject of the main inquiry in this action.

The Cleveland Union Terminals Company, hereinafter referred to as Terminals, was organized in the fall of 1918, for the purpose of constructing and operating a union depot in the city of Cleveland. The New York Central Railroad Company, its subsidiary the Cleveland, Cincinnati, Chicago & St. Louis Railway Company (hereinafter referred to as the Big Four), and the New York, Chicago & St. Louis Railroad Company (hereinafter referred to as the Nickel Plate) joined in the project as proprietary companies, consistent with sections 9160 et seq. of the General Code of Ohio, and on or about February 15, 1921, filed an application with the Interstate Commerce Commission (finance docket No. 1237) for authority and for a certificate of public convenience and necessity evidencing the Commission's approval to the purchase of the capital stock of the Terminals. This approval was given and the certificate issued under date of December 6, 1921, authorizing the New York Central to acquire seventy-one per cent., the Big Four twenty-two per cent., and the Nickel Plate seven per cent. of such capital stock. Such plans even then contemplated the necessity of securing Wheeling's Ontario Street passenger station site as part of the terminal project, and Wheeling accordingly filed an intervening petition before the Interstate Commerce Commission protesting the granting of the application of the proprietary companies on the ground that Wheeling was unable and unwilling to surrender its station site and that its financial condition did not permit of its entering the terminal. This protest was subsequently withdrawn under a stipulation that such withdrawal should be without prejudice to the rights of Wheeling in and to its station site. The terminal project has been progressively carried forward since the dates above referred to.

The project for the construction of the Union Station was approved by the city of Cleveland and an ordinance, No. 47,814, was enacted authorizing Terminals to proceed in accordance with the original plan. This ordinance was subsequently amended with the consent of the proprietary companies by requiring the construction of what is commonly called the Eagle Avenue ramp. This is a street or highway connection between the higher levels of the city and the river bottoms which were to be cut off from the higher levels by the construction of the terminal and the vacation of streets crossing the terminal properties. Prior to the construction of the Eagle avenue ramp it was entirely feasible and engineeringly possible for the lines of the terminal to pass beneath Wheeling's Station site and for both companies thereafter to operate their separate terminals. After the construction of the Eagle avenue ramp, this became a practical impossibility, necessitating one of two courses of action on the part of Terminals. Either that company must secure the Wheeling Station site, offering Wheeling use of the terminal upon terms which it could afford to pay, or an additional expenditure of some $10,000,000 must be made in the construction of an impractical "engineering monstrosity."

Since Terminals was making no progress in the direction of acquiring the Wheeling Station site, the New York Central, the Nickel Plate, and the B. & O. Railroad Companies, which latter company had since joined as a prospective user of the terminal, each purchased, prior to May 1, 1927, and without the consent of the Commission, one-third of a controlling interest in Wheeling and proceeded to exercise such control in the election of the board of directors of that company. It is true that twelve of the fifteen original directors were re-elected, but the stock control of course tended to destroy freedom of action. Thereafter negotiations were continued and an agreement was reached as between the boards of directors of Terminals and Wheeling for the sale of the Ontario street passenger station site to the terminal company for $1,600,000, for providing a temporary terminal for Wheeling until the completion of the Union Station and thereafter for the use of the Union Station by Wheeling for a fixed term at a rental of $20,000 per annum for 3,000 trains of not more than 14,000 cars. The agreements of the proprietary companies and the B. & O. Railroad Company are founded upon a car use basis.

The purchase of the controlling interest of Wheeling by the B. & O., New York Central, and Nickel Plate was attacked by minority stockholders of Wheeling, as made without obtaining the approval of the Interstate Commerce Commission, and on March 11, 1929, such purchase was declared to be in violation of section 7 of the Clayton Act (15 USCA § 18) and an order of divestiture was made by the Commission. Interstate Commerce Commission v. B. & O. R. R. Co., 152 I. C. C. 721. This order was not, however, complied with prior to the entering into the contracts for the sale of Wheeling's Ontario Street Station and the use of the terminal.

On December 8, 1928, after the purchase of the controlling interest as aforesaid and the election of the board of directors by the B. & O., New York Central, and Nickel Plate companies, Wheeling filed its applications to acquire terminal facilities in the Union Depot and to sell its Ontario Street Station site to Terminals. Pending determination of these applications by the Interstate Commerce Commission a temporary contract permitting the terminal company to proceed with the work was entered into and was subsequently made the subject of the action of Wheeling & Lake Erie Railway Co. et al. v. Pittsburgh & West Virginia Railway Co. (C. C. A.) decided in 33 F.(2d) 390. Subsequently the Interstate Commerce Commission issued its certificate of public convenience and necessity as first above stated.

The present action is primarily one to annul and avoid such certificate of public convenience and necessity and to enjoin action thereunder and as therein authorized. The action is brought by the Pittsburgh & West Virginia Railway Company as a connecting carrier and stockholder of Wheeling against the United States of America, the Interstate Commerce Commission, the Wheeling & Lake Erie Railway Company, the Cleveland Union Terminals Company, the Cleveland Terminals Building Company, Erie Railroad Company, and the Big Four. The interest of the Big Four and the Erie Railroad Company in the litigation is found in that the certificates provide for temporary terminal facilities for Wheeling over the lines of the Erie and Big Four. The interest of the other defendants is obvious. Transcript of the entire evidence, proceedings, and orders before the Interstate Commerce Commission was offered and forms the record in the present cause.

As an intervener and protestant before the Interstate Commerce Commission and as a connecting carrier and stockholder of Wheeling, the Pittsburgh & West Virginia Railway Company is a proper party plaintiff in an action to challenge the validity of the order of the Interstate Commerce Commission. Chicago Junction Case, 264 U. S. 258, 267, 268, 44 S. Ct. 317, 68 L. Ed. 667.

Before considering the several specific grounds of attack, it should be observed that the courts will not interfere in the exercise of purely discretionary powers by the Commission nor can the court consider the weight of the evidence or the wisdom of the order, provided there was evidence before the commission to sustain it. Skinner & Eddy Corp. v. U. S., 249 U. S. 557, 39 S. Ct....