L. Singer & Sons v. Union Pac. R. Co.

• Decision Date: 07 February 1940
• Docket Number: No. 11480,11489.,11480
• Citation: 109 F.2d 493
• Parties: L. SINGER & SONS et al. v. UNION PAC. R. CO. KANSAS CITY, MO., v. L. SINGER & SONS et al.
• Court: U.S. Court of Appeals — Eighth Circuit

109 F.2d 493 (1940)

L. SINGER & SONS et al. v. UNION PAC. R. CO. KANSAS CITY, MO., v. L. SINGER & SONS et al.

Nos. 11480, 11489.

Circuit Court of Appeals, Eighth Circuit.

February 7, 1940.

Ruby D. Garrett, of Kansas City, Mo. (Fred Ruark and Spurgeon L. Smithson, both of Kansas City, Mo., on the brief) for appellants in case No. 11480.

Henry N. Ess, of Kansas City, Mo. (T. W. Bockes, of Omaha, Neb., and Watson, Ess, Groner, Barnett & Whittaker, of Kansas City, Mo., on the brief), for appellee in case No. 11480.

Sam. C. Blair, City Counselor, and Marcy K. Brown, Jr., Asst. City Counselor, both of Kansas City, Mo., for appellant in case No. 11489.

T. W. Bockes, of Omaha, Neb., and Henry N. Ess and Watson, Ess, Groner, Barnett & Whittaker, all of Kansas City, Mo., for appellee Union Pac. R. Co. in case No. 11489.

Before STONE, GARDNER, and SANBORN, Circuit Judges.

SANBORN, Circuit Judge.

The suit (No. 11480) which gives rise to these appeals was brought by certain commission merchants of Kansas City, Missouri, to enjoin the Union Pacific Railroad Company from constructing what is alleged to be an extension of its lines of railway in Kansas City, Kansas, until such time as it has procured a certificate of convenience and necessity from the Interstate Commerce Commission covering such construction, as required by § 402, par. (18), of the Transportation Act of 1920, c. 91, 41 Stat. 456, 477, 49 U.S.C. § 1, par. (18), 49 U.S.C.A. § 1(18). Kansas City, Missouri, sought leave to intervene. The railroad company filed an answer in which, among other things, it (1) denied jurisdiction; (2) asserted that the plaintiffs were not "parties in interest" within the meaning of § 402, par. (20), of the Transportation Act, c. 91, 41 Stat. 456, 478, 49 U.S.C. § 1, par. (20), 49 U.S.C.A. § 1(20); and (3) asserted that the complaint failed to "state a claim against defendant upon which relief can be granted".¹ Thereafter the defendant railroad company applied for a hearing upon these defenses before trial.² The District Court heard its application together with the motion of Kansas City, Missouri, for leave to intervene. The court ruled that it had jurisdiction of the suit, but that the plaintiffs were not "parties in interest" and hence could not maintain it, and that the complaint failed to state a claim upon which relief could be granted. It also ruled that the City was not a "party in interest".³ It entered a decree dismissing the complaint and denying intervention. From this decree these appeals are taken.

The appeals challenge (1) the action of the court in considering in advance of trial the defenses sustained; (2) the ruling that the plaintiffs and the City are not "parties in interest"; and (3) the ruling that the complaint fails to state a claim upon which relief can be granted.

We think, that if it conclusively appears from the complaint filed by the plaintiffs and the complaint in intervention tendered by the City that the plaintiffs and the City are without capacity to maintain the suit and that therefore no relief could be afforded them, the court below was justified in entering a decree of dismissal in advance of trial. See General Investment Co. v. New York Central R. Co., 271 U.S. 228, 230, 46 S.Ct. 496, 70 L.Ed. 920; Carolina Power & Light Co. v. South Carolina Public Service Authority, 4 Cir., 94 F.2d 520, 526; Leimer v. State Mutual Life Assurance Co., 8 Cir., 108 F.2d 302, opinion filed January 5, 1940.

The vital question in these cases is whether the plaintiffs and the City are "parties in interest" within the meaning of paragraph (20), § 402 of the Transportation Act, which provides: "Any construction of an extension * * * contrary to the provisions of this paragraph or of paragraph (18) or (19) of this section may be enjoined by any court of competent jurisdiction at the suit of the United States, the commission Interstate Commerce Commission, any commission or regulating body of the State or States affected, or any party in interest; * * *."

The complaint of the plaintiffs shows that they are commission merchants doing business on the Kansas City, Missouri, produce market, an old and well-established market which adequately serves the consuming public in its vicinity and receives produce from, and ships produce to, other states; that Kansas City, Missouri, is now engaged in constructing new market buildings for this market at a cost of about $500,000; that the market has suitable and adequate transportation facilities of all kinds; that the adjoining city of Kansas City, Kansas, proposes to build and is building a "Food Terminal" or produce market on a tract of land which it owns, at a cost of about $4,000,000, of which $1,710,000 is a grant from the Public Works Administration of the United States, and that the balance of the necessary funds will be procured by a sale of the City's bonds to the defendant railroad company; that the defendant proposes, at an expense of some $500,000, to furnish trackage to serve this Kansas City, Kansas, market; that this trackage constitutes an extension of the defendant's lines of railroad, for the construction of which it has procured no certificate of convenience and necessity from the Interstate Commerce Commission as required by law; that the construction and operation of the proposed extension in Kansas City, Kansas, will adversely affect and will destroy the business and properties of the plaintiffs and the large investments which they have made in and adjacent to the Kansas City, Missouri, produce market; that it will create an unnecessary and uncalled for rival market at an inconvenient place without creating any more produce to be handled or any more customers to be served; that it will result in the unnecessary duplication of railroad facilities at a cost of $500,000 without increasing the amount of freight to be handled; that it will divert traffic from other railroads which are now adequately handling the traffic to the Kansas City, Missouri, produce market, and will cause destructive competition between the defendant and other rail-roads and will cause a wasteful and needless expenditure of money by the defendant; that "for each and all of the reasons aforesaid, the construction and operation, or the construction, or the operation of the said extension or extensions of railroad by the defendant to said proposed produce market in Kansas City, Kansas, will directly and adversely affect the property interests of the plaintiffs and the public generally by bringing about a material change in the transportation situation, and will constitute an unnecessary burden upon interstate commerce directly and adversely affecting the welfare of plaintiffs and the public interest."

It is obvious that the only basis for the plaintiffs' claim that the alleged extension of the lines of the defendant to the Kansas City, Kansas, market will particularly injure them is that they do business upon the Kansas City, Missouri, market, and that if the proposed rival market in Kansas City, Kansas, functions, it will divert business from the market upon which they operate and will thus hurt them, their business, and their investments in Kansas City, Missouri, and that, since the proposed extension of its tracks by the defendant is necessary to enable the rival market to function, such extension will therefore injure the plaintiffs. It seems equally obvious that, except for the fact that the proposed extension is essential to the operation of the rival market in Kansas, it could not possibly have any direct or immediate effect upon the plaintiffs, their property or their business in Missouri, other than the effect which a wasteful expenditure by the defendant of its money would have upon the public generally. The proximate cause of the injury to the plaintiffs will be the competition created by the construction and operation of the rival market, and not the construction or operation of the transportation facilities furnished to it by the defendant or by others engaged in the transportation business.

It is the plaintiffs' contention that any one whose welfare is adversely affected or threatened by the unauthorized extension of a railroad is a "party in interest" who may maintain such a suit as this.⁴ The defendant, on the other hand, contends broadly that no one is a "party in interest" who cannot point to the violation of some legal duty owing by the railroad to him.⁵

We concern ourselves only with the question whether the plaintiffs and Kansas City, Missouri, are "parties in interest" within the meaning of the statute authorizing "any party in interest" to maintain such a suit. This question, we think, is to be determined from the language of the Supreme Court of the United States in Western Pacific California Railroad Co. v. Southern Pacific Co., 284 U.S. 47, 52 S.Ct. 56, 76 L.Ed. 160, where the question was whether a railroad corporation without a railroad, but which had located its proposed line and had applied for authority to build it, was a "party in interest" within the meaning of the Transportation Act so that it might maintain a suit to enjoin an unauthorized extension into the territory which its proposed line was intended to serve. The Court, after quoting from Texas & Pacific R. Co. v. Gulf, Colorado & Santa Fe R. Co., 270 U.S. 266, 277, 46 S.Ct. 263, 70 L.Ed 578, said (284 U.S. at page 51, 52 S.Ct. at page 57, 76 L.Ed. 160):

"The Texas & Pacific Railway sought to prevent an unauthorized competitor from building an extension into territory already served by it. Prior to the statute, it could not have maintained such a suit, since the competitor's proposed action did not threaten interference with any legal right. No carrier could then demand exemption from honest competition.

"If, as the court below seems to have assumed, a `party in interest' must possess some clear legal right for which it might ask protection under the rules commonly accepted by courts...