Burton v. Matanuska Valley Lines, 15030.

• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)
• Citation: 244 F.2d 647
• Docket Number: No. 15030.,15030.
• Parties: Edward S. BURTON et al., Appellants, v. MATANUSKA VALLEY LINES, Inc., a corporation in the Territory of Alaska, Appellee.
• Decision Date: 05 July 1957

244 F.2d 647 (1957)

Edward S. BURTON et al., Appellants,
v.
MATANUSKA VALLEY LINES, Inc., a corporation in the Territory of Alaska, Appellee.

No. 15030.

United States Court of Appeals Ninth Circuit.

April 8, 1957.

Rehearing Denied July 5, 1957.

244 F.2d 648

Harold J. Butcher, Anchorage, Alaska, for appellants.

Edgar Paul Boyko, Anchorage, Alaska, for appellee.

Before DENMAN, Chief Judge, and POPE and LEMMON, Circuit Judges.

POPE, Circuit Judge.

Appellee Matanuska Valley Lines, Inc., a common carrier of passengers by bus, had operated for some years an integrated system of bus lines within the City of Anchorage, Alaska, within the nearby military bases known as Elmendorf Air Force Base and Fort Richardson Military Reservation, between those bases, and between the bases and the City of Anchorage, and throughout the public highways surrounding the City and the bases, and extending over a large area in South Central Alaska. It held a franchise from the City of Anchorage, a certificate of public convenience and necessity from the Territory, and licenses from the military authorities on the bases.

Appellant, Anchorage Bus Company (here called Anchorage Bus), through its officers, the individual appellants, shortly before this action arose, procured from the Military Commands contract permission to operate a bus business for hire between and within those bases, in competition with Matanuska Valley Lines (here called Matanuska). Anchorage Bus then announced that it was prepared, and was about to commence bus operation in direct competition with Matanuska in all the areas in which the latter had established lines, including those in the City, those between the City and the bases, and in the areas outside the City and the bases. Asserting that for these latter operations Anchorage Bus had no lawful franchise, certificate or permit to operate, and that the proposed competitive operation would be ruinous to Matanuska, and cause it irreparable injury and damage, the latter brought this action against Anchorage Bus, and its officers, seeking among other things, an injunction against its proposed operations outside the military bases. After notice and hearing upon affidavits and documentary evidence, the court granted Matanuska's motion for a preliminary injunction. This appeal is from that interlocutory injunction.

The first complaint shown in this record (an amended complaint) was filed October 25, 1955. How long prior thereto the action was commenced does not appear. But it is apparent that shortly after the action was begun, Anchorage Bus began to take steps designed to assure the fulfillment of its intention to operate in competition with Matanuska. On October 21, 1955, Anchorage Bus obtained from the Alaska Bus Transportation Commission a certificate of public convenience and necessity to furnish bus transportation between the City and the military bases. Four days later that

244 F.2d 649

certificate was suspended "until a public hearing could be held." The order recited that suspension was granted upon Matanuska's protest that the certificate had been issued without notice, and that the Anchorage Bus operations would put Matanuska out of business. It was ordered that hearing would be had on December 6, 1955, as to whether the Anchorage Bus certificate should be reinstated and Matanuska's certificate modified "to allow concurrent operations by other authorized bus companies."

On October 31, 1955, Matanuska made its motion for a preliminary injunction. Hearing on the motion and the affidavits filed in its support and in opposition thereto was had on November 10, 1955. On November 14, 1955, the court announced its decision to grant a preliminary injunction effective until December 6, 1955, the date set for hearing by the Commission, and directed plaintiff to prepare findings and a form of order.

When the Commission met, as contemplated, it made no decision as to either question, that is whether Anchorage Bus should have a certificate of public convenience and necessity, or whether Matanuska's certificate should be ruled non-exclusive. The reason for this non-action was that the Commission believed (erroneously, it developed) that Anchorage Bus could travel between the City and the bases without traversing any Territorial roads. Making showing of this failure of the Commission to act, and that Anchorage was about to commence the operations which had been enjoined, Matanuska renewed its application for a temporary injunction asking that such injunction be continued during the pendency of the suit.

At this stage of the proceedings, the commanding officer of the Elmendorf Air Force Base moved into the arena on the side of Anchorage Bus. According to an affidavit of a local business man, the deputy base commander, who issued the telegram shortly to be mentioned, stated that commitments had been made to Anchorage Bus for an exclusive contract to operate on the bases, and that to make that operation successful, Anchorage Bus needed the revenue from base to City operations, and the officer felt bound to support the new company to the limit. On December 21, 1955, the Commission received from the Commander of the Air Force Base a telegram stating that Matanuska's liability policy was insufficient coverage for operation on the military reservation and that it was not adhering to schedules; hence he was seeking authority from the Secretary of the Air Force to cancel Matanuska's license; that if this occurred hardship would result unless operation between the City and the bases by another operator was authorized; and that the insurance, equipment and on-base service of Anchorage Bus was entirely adequate and satisfactory. Upon receipt of this telegram, the Commission, immediately, and without notice, issued a temporary certificate to Anchorage Bus.¹

Contrary to the hope implied in the Commander's telegram, Matanuska's service on the bases and between them and the City was never suspended. This was the first time in the more than three years it had held a license on the base,

244 F.2d 650

that any suggestion of lack of adequate insurance had been made, and at once Matanuska procured additional coverage to meet the Commander's complaint.² It is also plain that the parties and the court considered that the court's ruling of November 14 preceding, that a preliminary injunction should issue, was still in effect, for on December 23 Anchorage Bus moved the court to dissolve the temporary injunction, mainly on the ground of the action of the military authorities and the issuance of the temporary certificate. This was heard, on affidavits filed in support and in opposition, and denied on December 27. During a portion of the period since November 14, the court had been considering proposed findings offered by Matanuska, and exceptions of Anchorage Bus thereto. On January 16, 1956, the court made and filed its findings and conclusions and issued the preliminary injunction from which this appeal is taken. The injunction was conditioned upon plaintiff giving a bond in the sum of $40,000 to cover costs and damages. It enjoined operations between the City and the bases, in the City, and in the Territory, but expressly excepted and permitted operations within the military bases

On this appeal much of the argument by appellant relates to the question as to whether Matanuska should prevail upon the final trial of this action. Plaintiff cannot win, it is said, for two reasons: (1) Anchorage Bus had a certificate of convenience and necessity, — the one issued December 21, 1955, described above; and (2), Matanuska's certificate from the Commission, and its franchise from the City are neither of them "exclusive," notwithstanding they purport to be such.

Before we go into the questions which must be answered in order to evaluate either of these two points, — questions, which we shall note, are not easily answered, we should first observe the limited scope of review which is permitted us upon an appeal from a temporary injunction. This limitation arises from the nature of an interlocutory injunction, and from the purposes to be served thereby. Such an injunction preserves the status quo and protects plaintiff from irreparable injury during the pendency of a suit until such time as the court may adjudge and finally determine the rights of the parties. Necessarily the court must presuppose that in the case at bar it may turn out that plaintiff will ultimately lose. Thus the court may finally find the facts against the plaintiff who procured the temporary injunction. But this possibility does not compel a denial of a temporary injunction if proper showing be made therefor; otherwise a court, which necessarily requires time to reach a final determination, would have no way to protect a party who may suffer irreparable loss if the status quo be not preserved. Without this power to issue interlocutory injunctions, courts would be unable to make their final judgments effective, for the very right to be protected, or the subject of the action itself, might be destroyed irreparably during the period required to arrive at an ultimate determination of the action.

And just as a court must of necessity obtain time in which to determine which party is right upon the facts, so in a substantial number of cases time is necessarily required to resolve grave, difficult and complicated questions of law. If, in such a case, it is ultimately decided that the party who obtained the temporary injunction cannot win, that in itself does not demonstrate that it was wrong to issue the injunction. For a considerable latitude of judicial discretion is allowed the trial court in its determination

244 F.2d 651

whether the situation requires a preservation of existing conditions through an injunction pendente lite, and our more deliberate conclusion that the ultimate decision must be against a permanent injunction does not in itself warrant a reversal of the...