Central Soya Co., Inc. v. Consolidated Rail Corp., 79-1505

• Decision Date: 21 March 1980
• Docket Number: No. 79-1505,79-1505
• Citation: 614 F.2d 684
• Parties: CENTRAL SOYA COMPANY, INC., Plaintiff-Appellee, v. CONSOLIDATED RAIL CORPORATION, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 684

614 F.2d 684

CENTRAL SOYA COMPANY, INC., Plaintiff-Appellee, v. CONSOLIDATED RAIL CORPORATION, Defendant-Appellant.

No. 79-1505.

United States Court of Appeals Seventh Circuit.

Argued Nov. 8, 1979.

Decided March 21, 1980.

Charles N. Marshall, Philadelphia, Pa., for defendant-appellant.

Peter A. Greene, Washington, D. C., for plaintiff-appellee.

Before PELL and BAUER, Circuit Judges, and DUMBAULD, Senior District Judge. ^*

PELL, Circuit Judge.

This is an appeal pursuant to 28 U.S.C. § 1292(a) from an order granting the motion of Central Soya Company, Inc. ("Central Soya") for a preliminary injunction. Since the action arose under an act of Congress regulating commerce, Revised Interstate Commerce Act, 49 U.S.C. §§ 11101(a) and 11121(a), the district court had jurisdiction pursuant to 28 U.S.C. § 1337.

The factual background of the matter is as follows. Central Soya purchases grain at elevators in the midwest and ships it east for export. Most of this shipping is done by railroad, and Central Soya's Baltimore elevator is serviced only by the tracks of appellant Consolidated Rail Corporation ("Conrail"). The most economical means of transporting grain is in covered hopper cars, a specialized type of equipment designed solely for that purpose. Because the grain trade is seasonal, however, peaking from October through April, there is a shortage of covered hopper cars during that period. Conrail has not attempted, nor is it required under Rule 37 of Uniform Freight Classification No. 13 to attempt, to acquire a fleet of cars sufficient to meet the demands of the peak shipping season. ¹ Although Central Soya cannot obtain cars from any common carrier other than Conrail, see 49 C.F.R. § 1033.15(b), it does furnish some of its own cars.

Conrail publishes tariffs which set forth unit train rates applying to shipments of at least ninety-two cars at one time for five or more consecutive trips from points in the midwest to North Atlantic ports. Tariff 794-F, which was effective December 30, 1978, was published by twelve participating carriers, including Conrail, and was duly filed with the Interstate Commerce Commission. The tariff provided that shippers could elect to book one or more sets of unit train equipment for a specified number of trips within a one year period, with the number of trips booked per shipper not to exceed forty-five. The charge per trip stood in an inverse additive relationship to the number of trips, becoming lower as the number of trips booked increased.

In accordance with the above tariff provisions, Central Soya booked forty-five trips in two unit trains, each train consisting of one hundred covered hopper cars. One of these unit trains, Train 4-TR is the subject of this litigation.

On March 2, 1979, Conrail notified Central Soya that Train 4-TR was being removed from Central Soya's service, effective immediately, despite the fact that Central Soya had completed only twelve of the forty-five trips it had specified pursuant to the terms of the tariff. Three days later, Central Soya filed the complaint in this action, together with a motion for a temporary restraining order and a preliminary injunction, in the United States District Court for the Northern District of Indiana, alleging that the removal of Train 4-TR would result in the inability of Central Soya to make two and one-half unit train shipments each month. The complaint further alleged that because of the volatility of the grain market, the profits which would be lost as a result of Conrail's action would be incalculable. The district court thereafter granted the motion for a preliminary injunction. ²

On appeal, Conrail contends that its reassignment of Train 4-TR was occasioned by Central Soya's inefficient utilization of unit trains, ³ and was consequently conducted pursuant to its statutory obligations. It further asserts that the reasonableness of its decision to reallocate the cars may be reviewed only within the primary jurisdiction of the ICC, that the district court therefore had no jurisdiction, and that even if the district court properly assumed jurisdiction, its construction of the applicable tariff was in error.

While recognizing the importance of a resolution of the issue to both the railroad and grain exporting industries, we must first address a question relating to the justiciability of the controversy. In response to questions from the court during oral argument, the parties acknowledged that the grain export shipping season has now ended, and that Central Soya has now completed its use of Train 4-TR and returned it to Conrail. An issue therefore exists as to whether the instant action is moot, and further briefing on that subject was requested.

The judicial power of courts established under Article III of the Constitution extends only to matters which are present "cases" or "controversies" in the constitutional sense. Moot cases do not fall within this constitutional definition, see Liner v. Jafco, Inc., 375 U.S. 301, 306, n.3, 84 S.Ct. 391, 394, n.3, 11 L.Ed.2d 347 (1964), and a federal court cannot decide a question which will not affect the rights of the litigants before it. DeFunis v. Odegaard, 416 U.S. 312, 316, 94 S.Ct. 1704, 1705, 40 L.Ed.2d 164 (1974); North Carolina v. Rice, 404 U.S. 244, 246, 92 S.Ct. 402, 404, 30 L.Ed.2d 413 (1971). If there is a question as to whether a particular matter is moot, a federal court must resolve that issue before it assumes jurisdiction, id., and an actual controversy must continue to exist at all stages of appellate review. Roe v. Wade, 410 U.S. 113, 125, 93 S.Ct. 705, 712, 35 L.Ed.2d 147 (1973); SEC v. Medical Committee for Human Rights, 404 U.S. 403, 92 S.Ct. 577, 30 L.Ed.2d 560 (1972).

The fact that the dispute over the unit train in question has ended, and that there are no incidental damage claims to be adjudicated, ⁴ strongly suggests that the action is moot. Our analysis would not be complete, however, without an examination of that aspect of the mootness doctrine relating to those cases which are "capable of repetition, yet evading review." See SEC v. Sloan, 436 U.S. 103, 98 S.Ct. 1702, 56 L.Ed.2d 148 (1978); Roe v. Wade, 410 U.S. 113, 125, 93 S.Ct. 705, 35 L.Ed.2d 147 (1973); Southern Pacific Terminal Co. v. ICC, 219 U.S. 498, 31 S.Ct. 279, 55 L.Ed. 310 (1911). While the parties have termed the capable of repetition line of cases an exception to the mootness bar, we note at the outset our disagreement with that terminology. The rule barring an assertion of federal jurisdiction over moot cases is a constitutional one, and the constitution does not permit exceptions. Rather, this aspect of the mootness doctrine should be considered as an area where, for reasons of policy, and in the interests of justice, ⁵ a federal court will view facts broadly in order to find the requisite basis for jurisdiction. ⁶

Actions which are found to be "capable of repetition" generally involve an allegation that a statute or continuing government policy or course of conduct has a substantial adverse effect on the rights of the complaining parties. For example, in Super Tire Engineering Co. v. McCorkle, 416 U.S. 115, 94 S.Ct. 1694, 40 L.Ed.2d 1 (1974), an employer who was engaged in cyclical collective bargaining sought a declaratory judgment as to the invalidity of a state statute which permitted striking workers to receive public assistance through state welfare programs. Notwithstanding that the strike had terminated prior to any hearing in the case, the Court held the jurisdictional requirements of both the Declaratory Judgment Act and the Constitution to be satisfied:

(T)he challenged governmental activity in the present case is not contingent, has not evaporated or disappeared, and, by its continuing and brooding presence, casts what may well be a substantial adverse effect on the interests of the complaining parties.

Id. at 122, 94 S.Ct. at 1698. The Court further emphasized that the governmental conduct of paying benefits to strikers was not dependent on the exercise of executive discretion.

Similarly, in Roe v. Wade, supra, the Court reached the merits of the constitutionality of the Texas abortion statute, despite the fact that the complaining party, while pregnant at the time the action was filed, was no longer pregnant at the time of the district court hearing.

Clearly, in both Roe and Super Tire, the fact that a significant class of federal claims might continually escape adjudication was a substantial factor in the Court's decision to permit assertion of federal jurisdiction. It was not this factor alone, however, that established jurisdiction under Article III. Rather, the necessary case or controversy stemmed from the fact that: (1) the plaintiffs had alleged the existence of a right; (2) the right was alleged to be the subject of an existing violation at the time the complaint was filed; and, (3) the violation of the right would continue in the future and was not a matter of speculation or conjecture but of reasonable expectation, because of the existence of a statute or a policy of sufficient permanence to amount to the "brooding presence" described in Super Tire. Thus, the "capable of repetition" rationale looks to both present and future circumstances to ensure that the contemplated assertion of federal jurisdiction is predicated on an ongoing controversy.

Before determining whether the present litigation falls within the bounds of the capable of repetition doctrine, however, we are first called upon by the briefs to analyze the applicability of that line of cases to actions where the challenged conduct is private rather than governmental. It is true that the rationale has in the past been employed almost exclusively in cases which involved government actions or policies. For example, in the seminal case in the area, Southern Pacific Terminal Co. v. ICC, supra, the plaintiff sought an injunction against an ICC order which allegedly gave...