Atchison, T. & S. F. Ry. Co. v. Lennen

• Decision Date: 23 January 1981
• Docket Number: No. 80-2299,80-2299
• Citation: 640 F.2d 255
• Parties: The ATCHISON, TOPEKA AND SANTA FE RAILWAY CO., Union Pacific Railroad Co., Chicago Rock Island and Pacific Railroad Co. et al, Missouri-Kansas-Texas Railroad Co., Plaintiffs-Appellants, v. Michael LENNEN, Department of Revenue, State of Kansas et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 255

640 F.2d 255

The ATCHISON, TOPEKA AND SANTA FE RAILWAY CO., Union Pacific Railroad Co., Chicago Rock Island and Pacific Railroad Co. et al Missouri-Kansas-Texas Railroad Co., Plaintiffs-Appellants, v. Michael LENNEN, Department of Revenue, State of Kansas et al., Defendants-Appellees.

No. 80-2299.

United States Court of Appeals Tenth Circuit.

Argued Jan. 12, 1981.

Decided Jan. 23, 1981.

J. B. Reeves, Laurence E. Garrett, Ronald A. Lane, Daniel J. Westerbeck, Chicago, for plaintiff-appellant The Atchison, T. & S. F. Ry. Co.

John R. Mendenhall, F. Kent Kalb, James D. Douglass, Chester A. Arterburn, Jr., Sabatini, Waggener, Vincent & Arterburn, Topeka, Kan., for plaintiff-appellant Union Pac. Ry. Co.

Mark L. Bennett, Jr., Topeka, Kan., for plaintiff-appellant Chicago R. I. & P. Ry. Co., and William M. Gibbons, trustee of the property of Chicago R. I. & P. Ry. Co., and Missouri, K. & T. Ry. Co., with him on the brief.

James J. McGannon, Wichita, Kan. (Carol B. Bonebrake, Topeka, Kan., and Patrick J. Regan, Regan & McGannon, Wichita, Kan., with him on the brief), for defendants-appellees.

Before McWILLIAMS, BREITENSTEIN, and DOYLE, Circuit Judges.

PER CURIAM.

Plaintiffs-Appellants, the several Railroads, filed four separate actions in the United States District Court for Kansas seeking declaratory and injunctive relief under 49 U.S.C. § 11503(c) which grants jurisdiction to district courts to prevent a violation of § 11503(b). ¹ The Railroads alleged that the State of Kansas discriminated against rail transportation in assessing and collecting property taxes in violation of § 11503(b).

The four cases have been consolidated, and the Railroads have sought to enjoin the appellees and the County Treasurers of the 98 Counties of the State of Kansas in which their rail property is located, from collecting property taxes in excess of what the Railroads believe they owed for the first half of their 1980 property taxes. The district court denied the Railroads' request for a preliminary injunction. It held that the Railroads had failed to make a sufficient showing that they would suffer irreparable injury, and that the threatened injury to the Railroads would not outweigh the damage to the State of Kansas which would result from the proposed injunction. After the Railroads' motion to reconsider was denied by the trial court, this court granted an emergency motion for injunction pending appeal pursuant to Rule 8 of the Fed.R.App.P.

The present appeal considers the merits of the denial by the district court of the Railroads' motion for preliminary injunction. We conclude that the injunction should have been granted.

I. HISTORY

The Revised Interstate Commerce Act of 1978, 49 U.S.C.A. § 10101 et seq., recodifies Subtitle IV of Title 49 of the United States Code. Section 11503 of that Act recodifies Section 306 of the Railroad Revitalization and Regulatory Reform Act of 1976 (the 4-R Act, originally codified at 49 U.S.C. § 26c (1976).

The legislative purpose of the Revised Interstate Commerce Act was to "restate, without substantive change, laws enacted before May 16, 1978, that were replaced by these sections. These sections may not be construed as making a substantive change in the laws replaced." 49 U.S.C.A. at p. 1. This legislative purpose is strongly enunciated in the legislative history of the Act. House Report No. 95-1395, 1978 U.S. Code Congressional and Administrative News, pp. 3009 et seq., specifically pp. 3013, 3016, 3018, 3019; ² 124 Congressional Record No. 151, Senate Hearings Sept. 25, 1978, pp. 16059-60 (Senator Paul Hatfield stated as follows: "Thus by enacting (this law) we are not making any new law; we are merely making existing law more understandable." For this reason, no Senate Report was filed). Therefore, any substantive conflicts between § 306 of the 4-R Act and 49 U.S.C. § 11503 must be resolved in favor of the meaning of § 306 of the 4-R Act.

Section 306 of the 4-R Act reads in pertinent part as follows:

(2) ... the district courts of the United States shall have jurisdiction, without regard to amount in controversy or citizenship of the parties, to grant such mandatory or prohibitive injunctive relief, interim equitable relief and declaratory judgments as may be necessary to prevent, restrain, or terminate any acts in violation of this section, except that ... (c) no relief may be granted under this section unless the ratio of assessed value to true market value, with respect to transportation property, exceeds by at least 5 per centum the ratio of assessed value to true market value, with respect to all other commercial and industrial property in the same assessment jurisdiction;

The corresponding portion of § 11503(c) of the Revised Interstate Commerce Act provides that:

... a district court of the United States has jurisdiction, concurrent with other jurisdiction of courts of the United States and the States, to prevent a violation of subsection (b) of this section. Relief may be granted under this subsection only if the ratio of assessed value to true market value of rail transportation property exceeds by at least 5 percent, the ratio of assessed value to true market value of other commercial and industrial property in the same assessment jurisdiction....

The Historical and Revision notes to that section state that "(t)he words 'such mandatory or prohibitive' and 'interim equitable relief' are omitted as unnecessary.... The word 'prevent' is substituted for 'prevent, restrain, or terminate' to eliminate redundancy...."

II. THE ACT IS TO BE INTERPRETED IN LIGHT OF ITS PURPOSE

It cannot be disputed that § 11503(c), read in the light of § 306 of the 4-R Act and the legislative history and purpose of the Revised Interstate Commerce Act, is specific and clear in authorizing the district court to grant injunctive relief to prevent, restrain, or terminate violations of § 11503(b) of the Act. This court stated in Shadid v. Fleming, 160 F.2d 752, 753 (10th Cir. 1947), that in such a case the discretion of the trial court in issuing or withholding an injunction is to be "exercised in light of the objectives of the Act." The court is to be guided by the primary objectives of the statute involved, using public interest standards rather than private litigation requirements. Hecht Co. v. Bowles, 321 U.S. 321, 64 S.Ct. 587, 88 L.Ed. 754 (1944).

The objectives of § 11503 are to be determined according to the purposes of § 306 of the 4-R Act, which § 11503 purports to recodify. That purpose is stated as follows:

... to eliminate the longstanding burden on interstate commerce resulting from discriminatory state and local taxation of common carrier transportation property.... Substantively (this section) would amend the Interstate Commerce Act to declare unlawful, as an unreasonable and unjust discrimination against and an undue burden upon interstate commerce, a state or local tax rate, assessment, or collection upon the transportation property of a common or contract carrier at a higher level than upon property in the same taxing district. Procedurally it would provide a remedy in the Federal courts for common and contract carriers against the collection of the excessive portion of any tax based upon such unlawful assessment of rate.

S. Report No. 91-630, 91st Cong., 1st Sess. (1969) (emphasis supplied).

When the trial court weighed the damage to be suffered by the Railroads against the damage to be suffered by the State treasury, it did not exercise its discretion to grant or deny the injunction in light of the purposes of the Interstate Commerce Act. Because of this the trial court abused its discretion in denying the injunction.

III. UNNECESSARY TO PROVE IRREPARABLE HARM

Moreover, it is not necessary that the Railroads show that they will suffer irreparable harm if the injunction is denied. When the evidence shows that the defendants are engaged in, or about to be engaged in, the act or practices prohibited by a statute which provides for injunctive relief to prevent such violations, irreparable harm to the plaintiffs need not be shown. Referring expressly to § 306 of the 4-R Act, the court in State of Tennessee v. Louisville and Nashville R.R. Co., 478 F.Supp. 199, 210 (M.D.Tenn.1979), stated:

Since Congress has expressly authorized federal courts to grant injunctive relief in furtherance of the express purposes of Section 306, it is not required that irreparable harm or inadequacy of legal remedies first be shown. United States v. City and County of San Francisco, 310 U.S. 16, 30, 60 S.Ct. 749, 757, 84 L.Ed. 1050 (1940).

In this case, the court below disagreed with the above statement. The trial court found that the rule stated in Tennessee was limited to situations where the statute in question protects the public health. Order, Dec. 3, 1980, p. 4, n.6. We disagree. The rule has also been applied to statutes which do not protect the public health, such as the Agricultural Adjustment Act of 1933 (American Fruit Growers, Inc., v. United States, 105 F.2d 722, 725 (9th Cir. 1939)); the Civil Aeronautics Act of 1938 (Civil Aeronautics Board v. Modern Air Transport, Inc., 81 F.Supp. 803, 806 (S.D.N.Y.1949) aff'd. 179 F.2d 622 (2d Cir. 1950)); the Commodity Exchange Act (Commodity Futures Trading Commission v. Hunt, 591 F.2d 1211, 1220 (7th Cir. 1979), cert. denied, 442 U.S. 921, 99 S.Ct. 2848, 61 L.Ed.2d 290, reh. den. 444 U.S. 888, 100 S.Ct. 189, 62 L.Ed.2d 122); the Emergency Price Control Act of 1942 (Shadid v. Fleming, supra; Henderson v. Burd, 133 F.2d 515, 517 (2nd Cir. 1943)); the Interstate Commerce Act (Texas & P. Ry. Co. v. Gulf, C. & S. F. Ry. Co., 270 U.S. 266, 273-4 (1926); Long Island Railroad Co. v. New York Central R. Co., 185 F.Supp. 673, 677 (E.D.N.Y.1960), aff'd 281 F.2d 379 (2nd Cir. 1960)); the Labor Management Relations Act (Davis v. Huttig Sash and Door Co., 288 F.Supp. 82 (W.D.Okla. 1968); Wirtz v. Harper Buffing Machine Co., 280 F.Supp. 376 (D.C...