Southern Ry. Co. v. ALABAMA PUBLIC SERVICE COM'N

• Decision Date: 20 July 1950
• Docket Number: Civ. A. No. 681.
• Parties: SOUTHERN RY. CO. v. ALABAMA PUBLIC SERVICE COMMISSION et al.
• Court: U.S. District Court — Middle District of Alabama

91 F. Supp. 980

SOUTHERN RY. CO. v. ALABAMA PUBLIC SERVICE COMMISSION et al.

Civ. A. No. 681.

United States District Court M. D. Alabama, N. D.

July 20, 1950.

COPYRIGHT MATERIAL OMITTED

J. T. Stokely, of Birmingham, Ala., Charles Clark, of Washington, D. C., and, Marion Rushton, of Montgomery, Ala., for plaintiff.

A. A. Carmichael, Attorney General of Alabama, M. R. Nachman, Assistant Attorney General, Richard T. Rives and John C. Godbold, both of Montgomery, Ala., for defendants.

Before McCORD, Circuit Judge, and KENNAMER and LYNNE, District Judges.

LYNNE, District Judge.

Resting the jurisdiction of the district court upon the Federal question and amount in controversy provisions of Title 28, § 1331, U.S.C.A., or upon the diversity of citizenship and amount in controversy provisions of Title 28, § 1332, U.S.C.A., and that of a district court of three judges upon the provisions of Title 28, § 2281, U. S.C.A., plaintiff, a Virginia corporation, complained of the Alabama defendants and prayed for both temporary and permanent injunctive relief against them.

Plaintiff's basic insistence is that the revenue derived from the operation of its passenger trains Nos. 7 and 8 between Tuscumbia, Alabama, and Chattanooga, Tennessee, is grossly disproportionate to the direct expenses and that the continuation of such train service is not demanded or required by the public necessities.

Alleging the exhaustion of administrative remedies, plaintiff exhibits its petition for a permit allowing abandonment of such service, filed with defendant, Alabama Public Service Commission, September 13, 1948, pursuant to the requirements of Title 48, §§ 35 and 106, Code of Alabama 1940. There follow averments calculated to show undue delay in the hearing and consideration of the petition culminating in an adverse order entered by defendant Commission on April 3, 1950.

Emphasizing the impact of the Commission's order within the framework of the statutory scheme of regulating transportation companies, Title 48, Code of Alabama 1940, plaintiff makes clear that it is impaled on the horns of a dilemma. If it continues the operation of such trains, it will lose substantial sums of money. If it ignores the Commission's order and abandons such services, it will face the imposition of severe sanctions under pertinent statutes. Either course, it complains, will result in irreparable damage unless this court grants injunctive relief.

Following the constitution of a three-judge district court in conformity with the provisions of Title 28, § 2281, U.S.C.A., this action was, on May 8, 1950, set down for a hearing on plaintiff's prayer for a temporary injunction at Montgomery, Alabama, on May 22, 1950.

Upon its convocation, this court was met at the threshold with three several motions, in which all defendants joined, raising certain adjective problems relating to the jurisdiction of the court, the propriety of exercising such jurisdiction as it might be found to have, and the right of plaintiff to injunctive relief in any event.

At the conclusion of oral arguments, the court, after consultation, announced its opinion that each of such motions was due to be overruled for reasons thereafter to be stated. Whereupon, it was stipulated by counsel for the parties that evidence should be adduced and the case submitted upon plaintiff's prayer for a permanent injunction.

I. Adopting a literal construction of the following language of Title 28, § 2281, U.S.C.A.: "An interlocutory or permanent injunction restraining the enforcement, operation or execution of any State statute by restraining the action of any officer of such State in the enforcement or execution of such statute or of an order made by an administrative board or commission acting under State statutes, shall not be granted by any district court or judge thereof upon the ground of the unconstitutionality of such statute unless the application therefor is heard and determined by a district court of three judges under section 2284 of this title. June 25, 1948, c. 646, 62 Stat. 968." defendants challenge the jurisdiction of this District Court of three judges because no attack is leveled at the constitutionality of the State statutes under which the defendant Commission acted. Since, it is argued, plaintiff does not seek an adjudication of unconstitutionality of such statutes, but relies squarely upon the assertion that the order of the defendant Commission denying plaintiff the right to abandon the passenger train service concerned is confiscatory in effect and therefore violative of the Fourteenth Amendment to the Constitution of the United States, the quoted statute is manifestly inapplicable.

Dispositive of this contention is Oklahoma Natural Gas Co. v. Russell, 1923, 261 U.S. 290, 43 S.Ct. 353, 67 L.Ed. 659, in which Mr. Justice Holmes, delivering the opinion for a unanimous court, stated: "A doubt has been suggested whether these cases are within Sec. 266 of the Judicial Code, Act of March 3, 1911, c. 231, 36 Stat. 1087, 1162; as amended by the Act of March 4, 1913, c. 160, 37 Stat. 1013. The section originally forbade interlocutory injunctions restraining the action of state officers in the enforcement or execution of any statute of a State, upon the ground of its unconstitutionality, without a hearing by three judges. The amendment inserted after the words `enforcement or execution of such statute' the words `or in the enforcement or execution of an order made by an administrative board or commission acting under and pursuant to the statutes of such State' but did not change the statement of the ground, which still reads `the unconstitutionality of such statute.' So if the section is construed with narrow precision it may be argued that the unconstitutionality of the order is not enough. But this Court has assumed repeatedly that the section was to be taken more broadly. Louisville & Nashville R. R. Co. v. Finn, 235 U.S. 601, 604, 35 S.Ct. 146, 59 L.Ed. 379; Phoenix Ry. Co. v. Geary, 239 U.S. 277, 280, 281, 36 S.Ct. 45, 60 L.Ed. 287; Cumberland Telephone & Telegraph Co. v. Louisiana Public Service Commission, 260 U.S. 212, 43 S.Ct. 75, 67 L.Ed. 217; Western & Atlantic R.R. v. Railroad Commission of Georgia, 261 U.S. 264, 43 S.Ct. 252, 67 L.Ed. 645. The amendment seems to have been introduced to prevent any question that such orders were within the section. It was superfluous, as the original statute covered them. Louisville & Nashville R.R. Co. v. Garrett, 231 U.S. 298, 301, 318, 34 S.Ct. 48, 58 L.Ed. 229; Atlantic Coast Line R.R. Co. v. Goldsboro, 232 U.S. 548, 555, 34 S.Ct. 364, 58 L.Ed. 721; Grand Trunk Western Ry. Co. v. Railroad Commission of Indiana, 221 U. S. 400, 403, 31 S.Ct. 537, 55 L.Ed. 786. But it plainly was intended to enlarge not to restrict the law. We mention the matter simply to put doubts to rest."

We hold that a Federal three-judge district court has jurisdiction to entertain a complaint alleging the unconstitutionality of an order of an administrative board or commission, acting under a State statute and praying for injunctive relief against the enforcement, operation or execution of such order, although no attack is made upon the validity of the statute itself.¹

II. Insisting that this court should herein decline to exercise its jurisdiction, defendants first invoke the familiar doctrine of exhaustion of administrative remedies. Pointing to the provisions of Title 48, § 79 et seq., Code of Alabama 1940, defendants assert that the appellate procedure therein provided is a part of the administrative process.

We do not agree. In Avery Freight Lines, Inc. v. Persons, 1947, 250 Ala. 40, 32 So.2d 886, 889, the Supreme Court of Alabama, in holding that an appeal to the Circuit Court under the statutes concerned was judicial and not legislative or administrative, observed: "Under the foregoing statutes * * * the circuit court can do only three things. (1) It can affirm the order of the Public Service Commission. (2) It can set aside the order of the Public Service Commission. (3) It can remand the case to the Public Service Commission for further proceedings in conformity with the direction of the court. The legislature evidently did not intend `that the reviewing court should put itself in the place of the commission, try the matter anew as an administrative body, weigh the evidence and substitute its finding and judgment on the merits as that of the commission.' State ex rel. Anderson Motor Service Co. v. Public Service Commission, 234 Mo.App. 470, 134 S.W.2d 1069, 1076; Id., 348 Mo. 613, 154 S.W.2d 777; 51 C.J. p. 758. See Alabama Public Service Commission v. Crow, 247 Ala. 120, 22 So. 2d 721."

After discussing a similar statutory design for judicial review of administrative orders in Bacon, et al. Public Service Comm. of State of Vermont v. Rutland Railroad Co., 1914, 232 U.S. 134, 138, 34 S.Ct. 283, 284, 58 L.Ed. 538, the court said: "It is apparent on the face of these sections that they do not attempt to confer legislative powers upon the court. They only provide an alternative and more expeditious way of doing what might be done by a bill in equity. Whether the alternative is exclusive or concurrent, whether it opens matters that would not be open upon a bill or not, if exceptions are taken (which does not appear in this case), is immaterial; the remedy in any event is purely judicial: to exonerate the appellant from an order that exceeds the law. This, we understand, is the view taken by the supreme court of the state, Bacon v. Boston & Maine R. R., 83 Vt. 421, 457, 76 A. 128; Sabre v. Rutland R. R. Co., 86 Vt. 347, 368, 369, 85 A. 693, Ann.Cas. 1915C, 1269; and this being so, by the rule laid down in Prentis v. Atlantic Coast Line Co. 211 U.S. 210, 29 S.Ct. 67, 53 L.Ed. 150, the railroad company was free to assert its rights in the district court of the United States."

We hold that defendant Commission's order denying plaintiff's petition...