Creston Grain & Lumber, Inc. v. United States

• Decision Date: 09 March 1963
• Docket Number: Civ. No. 01329.
• Citation: 214 F. Supp. 840
• Parties: CRESTON GRAIN & LUMBER, INC., Plaintiff, v. UNITED STATES of America and Chicago & North Western Railway Company, a Corporation, Defendants.
• Court: U.S. District Court — District of Nebraska

214 F. Supp. 840

CRESTON GRAIN & LUMBER, INC., Plaintiff, v. UNITED STATES of America and Chicago & North Western Railway Company, a Corporation, Defendants.

Civ. No. 01329.

United States District Court D. Nebraska.

March 9, 1963.

Reuben A. Johnson, Newman Grove, Neb., Alan A. Dusatko, Clarkson, Neb., Warren K. Dalton, Lincoln, Neb., for plaintiffs and intervenors.

Jordan Jay Hillman, Chicago, Ill., R. D. Neely, Omaha, Neb., for defendant Chicago & N. W. Ry. Co.

Robert S. Burk, Washington, D. C., and Theodore L. Richling, Omaha, Neb., for Interstate Commerce Commission and United States.

Before JOHNSEN, Circuit Judge, and ROBINSON and OLIVER, District Judges.

ROBINSON, District Judge.

This is an action to enjoin, set aside and annul the orders of the Interstate Commerce Commission, dated April 25, 1961, and August 23, 1961, in its Finance Docket No. 19411, Chicago & Northwestern Railway Company—Abandonment —Scribner—Oakdale Line, granting a certificate of public convenience and necessity to the Chicago & North Western Railway permitting abandonment of a line of railroad between Scribner and Newman Grove, Nebraska. The order of April 25, 1961 affirms and adopts the report and the certificate and order recommended by the Hearing Examiner as the report, certificate and order of the Commission, Division 4. The order of August 23, 1961, is by the full Commission denying Protestants' petition for reargument of the Decision and Order of the Commission, Division 4.

The administrative proceedings in this case commenced on July 9, 1956, when Chicago and North Western Railway Company, hereinafter called the Railway Company, filed an application with the Interstate Commerce Commission, hereinafter called the Commission. In its application, the Railway Company requested authorization to abandon a branch line of railroad commonly known as the Scribner to Oakdale branch line, 114.175 miles long, running between the town of Scribner, Nebraska, and Oakdale, Nebraska, through Dodge, Colfax, Platte, Madison, Boone and Antelope Counties, Nebraska. At both the Scribner and Oakdale Termini, the branch line connects with the Railway Company's Fremont-Chadron line.

Protests were filed and a hearing was held February 25, 26, 27, 28 and March 1, 1957 at Albion, Nebraska. A proposed report by a Hearing Examiner, was served on July 10, 1957, in which the position was taken that an abandonment was not warranted at that time, that Protestants should be afforded an opportunity to show whether or not they could support the line under normal conditions, and that the application should be denied.

The applicant filed exceptions to the examiner's proposed report.

Oral argument on the exception to the proposed report was heard on January 23, 1958, at which it was requested by Division 4 of the Commission that the Railway Company submit further data relating to financial results of operating said line of railroad during the year 1957 and the month of January 1958. It was suggested that a stipulation be reached by the applicant and protestants regarding such data.

On May 21, 1958, an order of the Commission, Division 4, was entered reopening the proceeding for further hearing. Data relating to the financial results of the operation of the line for the calendar year 1957 and the first 6-month period of 1958 was submitted in evidence. Subsequently at the request of the Commission Division 4 and by consent of all parties, applicant filed financial results of operation of the line for the entire year 1958 as late filed exhibits.

On July 6, 1959, the Commission, Division 4, filed and entered a report and order denying the application of the Railway Company to abandon the line of railroad.

On August 10, 1959, the applicant filed a Petition for Reconsideration and Reargument.

On December 18, 1959, the Commission, Division 4, entered an order which states,

"Upon consideration of (1) the record in the above-entitled proceeding; (2) the report and order of division 4, dated July 6, 1959, denying the application therein; (3) the petition of the applicant filed August 10, 1959, for reconsideration of the division's report and order and for argument before the entire Commission; and good cause therefore appearing:

"IT IS ORDERED, that the proceeding be, and it is hereby, reopened for further hearing at a time and place hereafter to be fixed, to receive evidence as to the results of operation of the line involved in the calendar year 1959."

On March 23, 1960, the Commission entered an order referring the proceeding to a hearing examiner. The Commission further ordered that the further hearing was for the purpose of receiving evidence as to the results of operations of the line involved in the calendar year 1959, and that applicant should make available a competent witness or witnesses for examination of all material and relevant facts with respect to such financial results.

On April 28, 1960, the Commission, Division 4, entered an order which stated, in part:

"Upon consideration of * * * (4) the motion of protestants in the proceedings, filed April 22, 1960, for amendment of order for further hearing to permit said protestants to present evidence as to delays in shipments, both to and from the branch line involved, irregularities in service along such branch line, the failure or refusal of the applicant to render services along such branch line and other evidence as to the inadequate and unsatisfactory quality of the service furnished by applicant on such branch line; and

* * * * * *

"It is ordered, that the orders in said proceeding dated December 18, 1959, and March 23, 1960, be, and they are hereby modified to permit protestants the opportunity to present evidence at said further hearing, relative to the matters set forth in the above-described motion, and said motion to that extent be, and it is hereby granted."

On May 2, and May 3, 1960, a hearing was had.

The report of the Hearing Examiner recommended that the Railway Company be permitted to abandon its branch line of railroad between Scribner and Newman Grove, Nebraska, and that it not be permitted to abandon its branch line of railroad between Oakdale and Newman Grove, Nebraska.

The Commission, Division 4, after oral argument entered an order affirming and adopting the rulings, findings and conclusions of the Hearing Examiner.

The Protestants filed a Petition for Reconsideration and Reargument.

At a General Session of the Commission it was ordered that the Petition for Reconsideration and Reargument of the Protestants be denied. No request was made to reopen the proceedings for the purpose of offering further evidence or for additional relief.

Plaintiff, Creston Grain and Lumber, Inc. filed its Complaint in this action on October 3, 1961, alleging, inter alia, that its principal place of business which is in Creston, Nebraska, is adjacent to the line of railroad, the abandonment of which is the subject of this litigation, that it was a member of an association which appeared as a protestant in the abandonment proceedings before the Commission, that the orders of the Commission are arbitrary and capricious, that the findings and conclusions of the Commission are unsupported by substantial evidence, that the Commission erred in considering the applicant's evidence offered to support the abandonment of a portion of the branch line in the absence of due notice to the protestants of the consideration of such issues, and that the Commission erred in considering certain "rebuttal evidence".

On October 16, 1961 the State of Nebraska ex rel. Nebraska State Railway Commission intervened herein pursuant to Title 28 U.S.C. § 2323, and adopted the allegations and prayer of the Complaint of Plaintiff, Creston Grain & Lumber, Inc.

The Court granted the following parties the right to intervene: Interstate Commerce Commission; Farmers Cooperative Elevator of Lindsay, Nebraska; Farmer's Co-op Mercantile Company of Leigh, Nebraska; Farmers Union Co-op Supply Company of Clarkson, Nebraska; Misek Lumber and Grain Company of Dodge, Nebraska, and Farmer's Union Co-op Grain Company of Synder, Nebraska.

Three questions are now before the Court, viz.,

1) Was the Commission guilty of unfairness in considering the issue of partial abandonment?

2) Was the Commission entitled to receive rebuttal evidence?

3) Is the order finally adopted by the Commission within the Commission's lawful authority and is it based upon substantial evidence?

CONSIDERATION OF PARTIAL ABANDONMENT

Plaintiff maintains that the abandonment of part of this branch line involves totally different questions than does the abandonment of all of the branch line, that they had no opportunity to prepare for the presentation of evidence specifically directed at the question of abandonment of the Scribner-Newman Grove segment of this branch, or to prepare for cross-examination of applicant's witnesses on this point, that nothing in the pleadings and nothing in any of the previous testimony, briefs, Proposed Report or Report of the Commission indicates that consideration had been given to an abandonment of a portion of this branch line, and that the hearing, was therefore, as to the plaintiffs, clearly inadequate.

It should be noted here that, although Protestants (i. e. Plaintiffs) excepted to the Examiner's Proposed Report and later petitioned for reconsideration by and reargument before the full Commission of the report and order of Division 4, we have been unable to find in either of these actions any request by the Protestants that the Commission reopen the proceedings for the purpose of further cross-examination or for introduction of evidence on the part of Protestants as distinguished from a request for the Commission to reconsider its ruling based upon the evidence in the record and the order previously entered.

We note too that the plaintiffs agree that "Liberality in the admissibility of evidence has been the practice of...