New York, Susquehanna & Western R. Co. v. Follmer

• Decision Date: 24 April 1958
• Docket Number: No. 12398.,12398.
• Citation: 254 F.2d 510
• Court: U.S. Court of Appeals — Third Circuit
• Parties: NEW YORK, SUSQUEHANNA & WESTERN RAILROAD COMPANY, Petitioner, v. Hon. Frederick V. FOLLMER, United States District Judge for the Middle District of Pennsylvania (Reading Company, Intervenor).

254 F.2d 510 (1958)

NEW YORK, SUSQUEHANNA & WESTERN RAILROAD COMPANY, Petitioner, v. Hon. Frederick V. FOLLMER, United States District Judge for the Middle District of Pennsylvania (Reading Company, Intervenor).

No. 12398.

United States Court of Appeals Third Circuit.

Argued February 5, 1958.

Decided April 24, 1958.

Leon Leighton, New York City, for petitioner.

Arthur Littleton and Alfred W. Hesse, Jr., Philadelphia, Pa. (J. Wesley Oler and William I. Woodcock, Jr., Philadelphia, Pa., on the brief), for respondent and intervenor.

Before GOODRICH, McLAUGHLIN and HASTIE, Circuit Judges.

GOODRICH, Circuit Judge.

This is a petition for a writ of mandamus to be directed to the Honorable Frederick V. Follmer, United States District Judge for the Middle District of Pennsylvania. It arises out of an action brought by the New York, Susquehanna and Western Railroad against the Reading Company. In that suit federal jurisdiction is alleged by virtue of diversity of citizenship. The dispute between the parties has to do with the division of receipts from joint through rates established by agreements between Susquehanna and Reading to which certain other railroads, not important here, were also parties. The plaintiff sought a declaration of its rights to these receipts. The case was heard by the district judge. Oral arguments were made, briefs were filed. His order was "that the issues in this proceeding be referred by the parties to the Interstate Commerce Commission of the United States of America for determination by the Commission of such issues and that a certified copy of the report of the Commission be filed with the Court." Thereupon the plaintiff, Susquehanna, petitioned this Court for the mandamus writ.

Petitioner frankly admits that there is in this case no basis for charging the district judge with "arbitrary action, usurpation of power or obvious disregard of the law." See American Airlines v. Forman, 3 Cir., 1953, 204 F.2d 230, 233. But, it says, the district court should be directed to decide the case which it has already heard and over which it has jurisdiction. That we have power to issue a writ of mandamus on this ground if the case calls for it is settled by the Supreme Court's decision in LaBuy v. Howes Leather Co., 1957, 352 U.S. 249, 77 S.Ct. 309, 1 L.Ed.2d 290. That case also emphasizes strongly the point of view that references to masterships, although provided for by the federal rules, should be very sparingly used by district judges. See Fed.Rules Civ.Proc. rule 53(b), 28 U.S.C. See also United States v. Kirkpatrick, 3 Cir., 1951, 186 F.2d 393. We believe that the same attitude should be taken toward referrals to administrative agencies.

But it is a practice for which there is authority in instances where, at least, the agency has some competence to resolve the issues involved.¹ See United States v. Western Pac. R. R., 1956, 352 U.S. 59, 77 S.Ct. 161, 1 L.Ed.2d 126; United States v. Chesapeake & O. R. R., 1956, 352 U.S. 77, 77 S.Ct. 172, 1 L.Ed.2d 140; General American Tank Car Corp. v. El Dorado Terminal Co., 1940, 308 U.S. 422, 60 S.Ct. 325, 84 L.Ed. 361. However, not every litigation of this nature includes subject matter of the sort which makes reference to administrative expertise a necessary or desirable procedure. See Great Northern Ry. Co. v. Merchants Elevator Co., 1922, 259 U.S. 285, 42 S.Ct. 477, 66 L.Ed. 943. Our problem here is to determine whether, in the light of the LaBuy opinion, the judge was badly ill-advised in exercising this authority by referring the issues involved in this case to another body for advice.²

The division agreement in controversy was dated September 15, 1947. It lists two stations for Susquehanna:

(a) Station 2265, Edgewater, N. J., Percentage Group BB;

(b) Station 2266, Edgewater Docks (New York Harbor Lighterage Points), N. J., Percentage Group 18.

The percentage group last referred to (Group 18) provides as follows:

"Per cents to or from Edgewater Docks apply via Green Pond Jct. only. Deduct before prorating 4.4¢ per 100 pounds * * * for Susquehanna and divide the balance on Group BB percents."

All the traffic receipts with which we are concerned here moved via Green Pond Junction. The dispute between the parties is restricted to what is known as Seatrain traffic. Seatrain has been in this Court earlier. It is a common carrier by water which delivers loaded freight cars to railroads and receives loaded freight cars from them. See Seatrain Lines, Inc. v. Pennsylvania R. R. Co., 3 Cir., 1953, 207 F.2d 255. According to Susquehanna it has two things to prove. One, does the Seatrain traffic move to or from Susquehanna's Edgewater Docks station at which the deduction already quoted applies? Susquehanna, of course, says yes to this and relies on a report of the Interstate Commerce Commission in Borough of Edgewater, N. J., 280 I.C.C. 121 (1951), as res judicata. This, of course, is its burden. Determination of what constitutes collateral estoppel in a former proceeding between parties now litigants is everyday business for a court. It presents no problem requiring any experts on railroad matters.

A second issue which Susquehanna admits it must prove is whether it is entitled to the deduction despite the fact that it renders no lighterage service on the Seatrain traffic. Reading says it is not so entitled under the terms of the division sheet; that it is asking for payment for services it does not render. Further, says Reading, Susquehanna knows it is not entitled to such compensation because it made no claim for it between March 1947 and December 1951.

This second issue seems to us to be a question of construing the contract the parties have made, deciding whether there has been a breach and whether any rights have been waived or otherwise lost. The terms used seem to us to provide no more technical difficulties than a contract growing out of business in the textile industry or the purchase and sale of products from a steel fabricating plant. Their interpretation is not intermixed with the peculiarly administrative function of determining the reasonability of rates charged. Cf. United States v. Western Pac. R. R., supra; United States v. Chesapeake & O. R. R., supra.

Susquehanna points out that there are adequate judicial precedents for courts deciding such matters on their own responsibility without reference elsewhere. Thompson v. St. Louis-S. F. Ry., 8 Cir., 1954, 218 F.2d 166, certiorari denied, 1955, 348 U.S. 964, 75 S.Ct. 525, 99 L.Ed. 752. See also Morgenthau v. Sugar Land Ry., 5 Cir., 1936, 83 F.2d 72; St. Louis Southwestern R. Co. v. S. H. Bolinger & Co., 5 Cir., 1927, 17 F.2d 924. Susquehanna grants that a three-judge case in the Southern District of New York is directly opposite to its point of view. Ewen v. Peoria & E. R. Co., D.C.S.D. N.Y.1948, 78 F.Supp. 312, certiorari denied Income Bondholders of Peoria & Eastern R. Co. v. New York Central R. Co., 1949, 336 U.S. 919, 69 S.Ct. 642, 93...