Atchison, Topeka & Santa Fe Ry. Co. v. Summerfield

• Decision Date: 12 December 1955
• Docket Number: No. 12663-12664.,12663-12664.
• Citation: 229 F.2d 777
• Parties: The ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY et al., Appellants, v. Arthur E. SUMMERFIELD, Postmaster General of the United States, Appellee. Arthur E. SUMMERFIELD, Postmaster General of the United States, Appellant, v. The ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY et al., Appellees.
• Court: U.S. Court of Appeals — District of Columbia Circuit

229 F.2d 777 (1955)

The ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY et al., Appellants, v. Arthur E. SUMMERFIELD, Postmaster General of the United States, Appellee.

Arthur E. SUMMERFIELD, Postmaster General of the United States, Appellant, v. The ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY et al., Appellees.

Nos. 12663-12664.

United States Court of Appeals District of Columbia Circuit.

Argued June 28, 1955.

Decided December 12, 1955.

Petition for Rehearing Denied January 27, 1956.

Mr. Francis M. Shea, Washington, D. C., with whom Messrs. J. Carter Fort, Gregory S. Prince, Lawrence J. Latto and Richard T. Conway, Washington, D. C., were on the brief, for appellants in No. 12663 and appellees in No. 12664. Mr. Alfred L. Scanlan, Washington, D. C., also entered an appearance for appellants in No. 12663 and appellees in No. 12664.

Mr. Edward H. Hickey, Atty., Dept. of Justice, with whom Mr. Paul A. Sweeney, Atty., Dept. of Justice, and Mr. Paul Meininger, Atty., Post Office Department, were on the brief, for appellee in No. 12663 and appellant in No. 12664.

Before EDGERTON, Chief Judge, and PRETTYMAN and BASTIAN, Circuit Judges.

PRETTYMAN, Circuit Judge.

This is an action brought in the District Court by certain railroads for declaratory judgment and injunctive relief against the Postmaster General. It was alleged in the complaint that the Postal Service has conducted an experimental operation in the transportation of first-class (three-cent) mail by air between designated localities since early October, 1953; and that on October 6, 1954, the Postmaster General filed a petition with the Civil Aeronautics Board asking the Board to establish a rate of compensation for such transportation between additional localities, some or all of which are served by one or more of the plaintiff railroads. The railroads asserted that the proposed service is unlawful, void, and beyond the statutory authority of the Postmaster General. The Postmaster General answered. Both sides moved for summary judgment. The District Court granted summary judgment to the plaintiff railroads. It held that the Postmaster General has the right to experiment in the transportation of mail but that prolonged experimental dispatch of three-cent mail by air is not within his statutory authority. At the same time, the court denied the railroads' motion for a permanent injunction, on the ground that irreparable injury had not been shown. The Postmaster General appealed, and the railroads then appealed from those parts of the court's order which sustained the power to experiment provided the operation were not unduly prolonged, and from that part of the order denying the permanent injunction.

The West Coast experiment is the fourth such operation to be instituted. The plan is to tender to air carriers for transportation ordinary first-class mail when, as and if empty space is available on a flight after all other traffic, including mail bearing the special air-mail postage, is accommodated. Ordinary mail thus transported is not to receive expedited handling, transportation or distribution. The object of the experiments, the Postmaster General says, is to gain experience from which it can be determined whether improvements and economies might be achieved by this method.

We are met first with the contention of the Postmaster General that the plaintiff railroads have no standing to sue, that is, that they have no right to initiate judicial inquiry into the legality of his action. He argues the statutes bestow on the railroads only a right to reasonable compensation for services actually performed; they give the railroads no right to perform these services; but the lawsuit seeks to protect a right to perform. Further, the Postmaster General says the plaintiffs have no common-law right to contest his action, since they are merely competitors of the airlines within the rule laid down in such cases as Alabama Power Co. v. Ickes¹ and Kansas City Power & Light Co. v. McKay²

The carriage of mail by the railroads is governed by statute.³ All railroad common carriers are required to carry such mail as may be offered for transportation by the Postmaster General,⁴ and they are required to furnish all necessary facilities for carrying and handling the mail while it is in their custody, furnishing cars, station space, and rooms for handling storage and transfer.⁵ They must carry the mail on the trains and in the manner the Postmaster General prescribes.⁶

The statute imposes substantial obligations on the plaintiff railroads. Under its terms they have been compelled to make substantial investments in special equipment for handling and carrying the mails. A necessary effect of the Postmaster General's action in tendering three-cent mail for transportation by air is to prevent useful employment of parts of these very considerable investments. Thus, contrary to the contentions of the Postmaster General, more is at stake than a simple statutory privilege of doing business with the Government. The interest of the plaintiff railroads is not a mere expectancy of continued patronage. It is a present interest stemming from substantial investments in cars and equipment. Such an interest may merit legal consideration even when the investment is made freely and with knowledge of a possible change of status that would impair its use.⁷ If so, it is sufficient here, for the railroads did not acquire these facilities as merely useful or needed in obtaining Government business; they acquired the equipment because they were commanded to do so by law.

Nor can the contested action of the Postmaster General be viewed only as creating competition for the railroads. In the first place the air carriers and the railroads do not bid for the mail as free competitors. They transport it as agents of the United States,⁸ subject to minute regulation by the Postmaster General. Furthermore, the Postmaster General did not simply finance or create new competition; he explicitly discontinued the use of certain railroad equipment. For example, in the record before us is a letter in which the Postal Transportation Service at San Francisco advised the Southern Pacific Company that certain apartments in various trains would be discontinued. This is a direct act which is part and parcel of the experimental program for transportation of three-cent mail by air. If the program is invalid for want of statutory authority the plaintiff railroads have been injured by a direct illegal act. The situations presented in cases like Alabama Power Co. v. Ickes, supra, were wholly different, and such cases do not apply. We think the plaintiff railroads have standing in court to challenge the alleged illegal act.

We come, then, to the question whether the Postmaster General has authority to conduct the experimental carriage of three-cent mail by air. His general authority to arrange for mail transportation stems from a statute which provides: "The Postmaster General shall provide for carrying the mail on all post roads established by law, as often as he, having due regard to productiveness and other circumstances, may think proper."⁹ By a later enactment "air routes" were added to the definition of "post roads established by law".¹⁰ More specific are the provisions of the Civil Aeronautics Act.¹¹ That Act requires the Postmaster General to tender mail to air carriers holding a certificate authorizing the transportation of mail by aircraft according to the needs of the Postal Service, and requires the carriers to transport such mail. It also provides that rates of compensation to air carriers for carrying the mail be fixed by the Civil Aeronautics Board.¹²

The position of the plaintiff railroads is quite simple. They say the foregoing provisions relate to so-called "air mail" and to no other mail. Another statute establishes the rate of postage on "domestic air mail" at six cents an ounce,¹³ and "domestic air mail" is defined in the statute as "all mailable matter being transported as mail by air within the continental United States".¹⁴ The railroads therefore argue that "all mailable matter being transported as mail by air" must bear postage at the six-cent rate. These postage-rate provisions, say the railroads, are clear, without ambiguity, and must be given the effect their words require. They are in accord, say the railroads, with the distinction between ordinary surface mail and air mail which has consistently been recognized by legislative and executive authorities prior to the inauguration of the present experimental service.

In support of his authority the Postmaster General urges a number of propositions. He points to his general authority to provide for the carriage of mail on all post roads, including air routes, and to the provisions of the Civil Aeronautics Act to which we have referred. More specifically, he urges contemporaneous legislative approval of the experimental program manifested in committee reports¹⁵ and the 1954 Post Office Appropriation Act.¹⁶ Finally he cites an administrative distinction between air mail, as a special service receiving expedited handling and attention, and ordinary three-cent mail, which receives no special handling whether or not carried by air under this experiment. He claims support in a formal opinion of the Comptroller General¹⁷ supporting the experimental program so long as this distinction is maintained.

The principal problem is whether the statutes fixing an air-mail postage rate and defining "domestic air mail" prohibit carriage by air of mail not bearing the special air-mail rate of postage. The railroads rely heavily upon the statutory definition of "domestic air mail". The complete section containing the definition is as follows:

"As used in this Act, `domestic air mail\' shall embrace all mailable matter being transported as mail by air within the continental United States, within any Territory or possession of the United States, within any

...