Colorado & Wyoming Ry. Co. v. COLORADO & SOUTHERN RY. CO.

• Decision Date: 16 October 1972
• Docket Number: No. 71-1725.,71-1725.
• Citation: 469 F.2d 483
• Parties: The COLORADO & WYOMING RAILWAY COMPANY, Appellant, v. The COLORADO AND SOUTHERN RAILWAY COMPANY, Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

469 F.2d 483 (1972)

The COLORADO & WYOMING RAILWAY COMPANY, Appellant, v. The COLORADO AND SOUTHERN RAILWAY COMPANY, Appellee.

No. 71-1725.

United States Court of Appeals, Tenth Circuit.

August 7, 1972.

Rehearing Denied October 16, 1972.

Miles C. Cortez, Jr., Denver, Colo. (Thomas G. Brown, Philip G. Dufford, and David W. Furgason, of Welborn, Dufford, Cook, Phipps & Brown, Denver, Colo., with him on the brief), for appellant.

Richard M. Gleason, Chicago, Ill. (J. C. Street and W. L. Peck, Denver, Colo., with him on the brief), for appellee.

Before JONES^*, SETH and McWILLIAMS, Circuit Judges.

SETH, Circuit Judge.

This action arises under sections 1(18) and 1(20) of the Interstate Commerce Act, 49 U.S.C. § 1 et seq. The plaintiff railroad moved for a preliminary injunction against the continued construction and future operation over certain trackage built by defendant railroad, unless and until defendant obtains a certificate of public convenience and necessity from the Interstate Commerce Commission. Both parties are interstate carriers by rail and subject to the Act. Jurisdiction is based on 28 U.S.C. § 1337 as a proceeding arising under an Act of Congress regulating commerce. After a hearing on plaintiff's motion, the District Court ordered that a preliminary injunction be granted and from that order, defendant appeals.

The area in question is an area south-southeast of Pueblo, Colorado, known as the Minnequa area. The area's predominant industry by far is the CF&I Steel Corporation (CF&I). For the most part, the other industries in the area are allied to CF&I in that they either supply necessary materials or services to CF&I or utilize CF&I products or by-products.

The defendant, Colorado & Wyoming Railway Company, is a wholly-owned subsidiary of CF&I and does virtually all of the short-distance "switching" in the Minnequa area. Although the radius of the Minnequa area is only approximately 6,000 feet, the defendant operates four miles of main track and sixty-five miles of side, yard, and industrial trackage in this area. On the other hand, the plaintiff, Colorado & Southern Railway Company operates 692 miles of track in Colorado, New Mexico, and Wyoming. In the Minnequa area, both of the parties' "main" lines run generally north and south. The main lines of the parties do not cross at any point and all of the plaintiff's trackage lies east of all of defendant's trackage with the exception of the two and one-half miles of defendant's track which is the subject matter of this controversy.

This dispute arose when Public Service Company of Colorado announced plans to construct a new $63,000,000 power generating plant approximately 1.7 miles air-line south-southeast of CF&I. The sole function of the new plant will be to provide electric service to CF&I, necessitated by the latter's installation of new electric furnaces¹. The new plant will be so located that the defendant would have to cross the tracks of plaintiff in order to reach the plant by its rails. Upon learning of the new power plant, defendant began constructing a track from the Minnequa area to the new plant site. The track, which has now been completed, is about 13,000 feet in length and cost approximately $365,000 to construct. On October 6, 1971, a few weeks after this construction had begun, plaintiff brought this action to enjoin defendant from continuing construction or use of the track until and unless defendant obtains a certificate of public convenience and necessity. Since the track is now completed, we need only consider that portion of the preliminary injunction relating to future operation over the track.

The issue is whether the track in question is an "extension" within the meaning of 49 U.S.C. § 1(18) or a "spur" within the meaning of section 1(22) of that title. If we agree with the District Court's finding that it is an "extension," then defendant may not operate until it obtains a certificate. However, Congress expressly exempted "spur, industrial, team, switching, or side tracks" from that requirement. The purpose of this legislation was remedial and, therefore, "exemption from its sweep should be narrowed and limited to effect the remedy intended." Piedmont & Northern Ry. v. Interstate Commerce Commission, 286 U.S. 299, 311, 52 S.Ct. 541, 545, 76 L.Ed. 1115. In other words, we must give a liberal or broad construction to the word "extension" and a limited or narrow construction to the words "spur" and "industrial." Interstate Commerce Commission v. Memphis Union Station Co., 360 F.2d 44 (6th Cir.); Chicago & Eastern Ill. R.R. v. Illinois Central R.R., 261 F.Supp. 289 (N.D.Ill.); Chicago, Milwaukee, St. P. & P. R.R. v. Northern Pacific R.R., 120 F.Supp. 710 (W.D.Wash.); Lancaster v. Gulf, C. & S. F. Ry., 298 F. 488 (S.D.Tex.), aff'd sub. nom. Texas & Pacific Ry. v. Gulf, C. & S. F. Ry., 270 U.S. 266, 46 S.Ct. 263, 70 L.Ed. 578.

As we recognized in Union Pacific R. R. v. Denver & Rio Grande Western R. R., 198 F.2d 854 (10th Cir.), the guiding principles to be followed in determining this question were enunciated in Texas & Pacific Ry. v. Gulf, C. & S.F.Ry., 270 U.S. 266, 46 S.Ct. 263, 70 L.Ed. 578. In that case, the Court distinguished spur track from an extension as follows:

"The carrier was authorized by Congress to construct, without authority from the Commission, `spur, industrial, team, switching or side tracks . . . to be located wholly within one state.\' Tracks of that character are commonly constructed, either to improve the facilities required by shippers already served by the carrier or to supply the facilities to others, who being within the same territory and similarly situated are entitled to like service from the carrier. The question whether the construction should be allowed or compelled depends largely upon local conditions, which the state regulating body is peculiarly fitted to appreciate. Moreover, the expenditure involved is ordinarily small. But where the proposed trackage extends into territory not theretofore served by the carrier, and particularly where it extends into territory already served by another carrier, its purpose and effect are, under the new policy of Congress, of national concern. For invasion through new construction of territory adequately served by another carrier, like the establishment of excessively low rates in order to secure traffic enjoyed by another, may be inimical to the national interest. If the purpose and effect of the new trackage is to extend substantially the line of a carrier into new territory, the proposed trackage constitutes an extension of the railroad within the meaning of paragraph 18, although the line be short, and although the character of the service contemplated be that commonly rendered to industries by means of spurs or industries tracks." (Emphasis added).

The Texas & Pacific case involved a railroad which was attempting to invade a territory already served by another carrier. Applying the above standards, the Court held this to be an "extension" under section 1(18). In contrast, the facts of the present case reveal that the defendant...