CHICAGO, MILWAUKEE, ST. PAUL AND PACIFIC R. CO. v. United States

• Decision Date: 04 March 1963
• Docket Number: Civ. A. No. 60-C-76.
• Citation: 214 F. Supp. 244
• Parties: CHICAGO, MILWAUKEE, ST. PAUL AND PACIFIC RAILROAD COMPANY and Lake Superior and Ishpeming Railroad, Plaintiffs, v. UNITED STATES of America and the Interstate Commerce Commission, Defendants, Chicago and North Western Railway Company and Duluth, South Shore and Atlantic Railroad Company, Intervening Defendants.
• Court: U.S. District Court — Eastern District of Wisconsin

214 F. Supp. 244

CHICAGO, MILWAUKEE, ST. PAUL AND PACIFIC RAILROAD COMPANY and Lake Superior and Ishpeming Railroad, Plaintiffs, v. UNITED STATES of America and the Interstate Commerce Commission, Defendants Chicago and North Western Railway Company and Duluth, South Shore and Atlantic Railroad Company, Intervening Defendants.

Civ. A. No. 60-C-76.

United States District Court E. D. Wisconsin.

March 4, 1963.

R. K. Merrill, Joseph J. Nagle, and Frank M. Long, Chicago, Ill., Rodger S. Trump and Richardson R. Robinson, Milwaukee, Wis., for plaintiff, Chicago, Milwaukee, St. Paul and Pacific R. Co.

Philip H. Porter, Madison, Wis., Bernard H. Davidson, Ishpeming, Mich., for plaintiff, Lake Superior and Ishpeming Railroad.

Lee Loevinger, Asst. Atty. Gen., and Patrick M. Ryan, Attorney, Department of Justice, Washington, D. C., James B. Brennan, U. S. Atty., and Philip L. Padden, Asst. U. S. Atty., Eastern District of Wisconsin, Milwaukee, Wis., for defendant, the United States.

Robert W. Ginnane, General Counsel, and Arthur J. Cerra, Asst. General Counsel Interstate Commerce Commission, Washington, D. C., for defendant, Interstate Commerce Commission.

Carl McGowan, Fred O. Steadry, Edgar Vanneman, Jr., and Charles H. Dickman, Chicago, Ill., Edward H. Borgelt and Roger S. Bessey, Milwaukee, Wis., for intervening defendant, Chicago and North Western Railway Company.

Thomas M. Beckley, Minneapolis, Minn., Reginald W. Nelson, Milwaukee, Wis., for intervening defendant, Duluth, South Shore and Atlantic Railroad Co.

Before DUFFY, Circuit Judge, TEHAN, Chief Judge, and GRUBB, District Judge.

GRUBB, District Judge.

This action is brought by the Chicago, Milwaukee, St. Paul and Pacific Railroad Company (hereinafter referred to as the "Milwaukee Road") and the Lake Superior & Ishpeming Railroad Company (hereinafter referred to as the "Ishpeming") to set aside and permanently enjoin certain orders of the Interstate Commerce Commission (hereinafter referred to as the "Commission").

On October 21, 1957, plaintiffs, the Milwaukee Road and Ishpeming, commenced operation over a newly constructed connection between their main lines of railroad approximately two miles north of the town of Republic in the Upper Peninsula of Michigan, at a point where their respective rights of way are contiguous and parallel. Continuously and without interruption since that date, plaintiffs have interchanged carload traffic via that connection pursuant to tariffs filed with the Commission.

The connection itself is simply a crossover track between plaintiffs' respective railroads. It comprises two switches or turnouts, one in each of plaintiffs' lines, which are connected by 262 feet or approximately 0.05 miles of track.

In addition to the connection, two parallel interchange sidings were concurrently constructed and connected at each end, not to the connecting track but to Ishpeming's main line track. The function of the sidings is to temporarily park cars from a train of one plaintiff off the main track until they are picked up by a train of the other plaintiff and to facilitate the various movements required to interchange cars over the connection.

Pursuant to a contract between plaintiffs, the total cost of construction, amounting to approximately $28,690, was shared equally.

On January 3, 1958, the Duluth, South Shore and Atlantic Railroad Company, since renamed the Soo Line Railroad Company (hereinafter referred to as "Duluth"), complained to the Commission, alleging that such connection was an "extension" of plaintiffs' respective lines of railroad within the meaning of Section 1(18) of the Interstate Commerce Act, and that no certificate of public convenience and necessity had first been obtained pursuant to the requirements of that section. The Duluth requested the Commission to investigate and require compliance with Sections 1 (18) to 1(21).

Plaintiffs' reply averred that the connecting track did not constitute an "extension" as contemplated by Section 1 (18) but rather was a "switching track" within Section 1(22) and, therefore, that the Commission had no jurisdiction in the premises.

The pertinent provisions of the Interstate Commerce Act are set out in the footnote below.^*

Plaintiffs nevertheless applied under Section 1(18) for a certificate of public convenience and necessity to operate over the connection. The Chicago and North Western Railway Company (hereinafter referred to as "North Western") was permitted to intervene in opposition to plaintiffs' application. After a hearing held on September 5, 1958, the Examiner found that the Republic Junction connecting track constituted extensions of plaintiffs' respective lines of railroad within the meaning of Section 1(18), and further recommended that plaintiffs' application for a certificate of public convenience and necessity be granted.

On September 25, 1959, Division 4 of the Commission entered its report and order reversing the Examiner's finding that public convenience and necessity required the facility, and affirmed his finding that the connection is an extension of applicants' lines. This order denied the application for a certificate and required plaintiffs to cease and desist from maintaining and operating both the connecting crossover and the interchange sidings at Republic Junction. On April 7, 1960, the Commission entered an order denying plaintiffs' petition to reconsider its prior report and order.

On June 13, 1960, this court issued a preliminary injunction suspending the operation of the Commission's orders pending final determination of the case.

On October 10, 1962, the Commission entered an order annulling, vacating, and setting aside the cease and desist provisions of its prior orders. This action resulted when the Commission determined in another proceeding that under Section 1(20) of the Act, a competent court is the only forum having jurisdiction to grant relief for a violation of Section 1(18) of the Act.

Defendants have filed a motion to dismiss that portion of the complaint which attacks the Commission's jurisdiction under Sections 1(18)-(22) to enter a cease and desist order on the ground that that issue has been rendered moot by the Commission's order of October 10, 1962. That motion is hereby granted.

Plaintiffs' complaint presents two issues for determination: (1) Whether the Commission's finding that the Republic Junction trackage constitutes an "extension" within the meaning of Section 1 (18) is correct; and if so, (2) whether the order of the Commission denying a certificate of public convenience and necessity is supported by substantial evidence.

This court's jurisdiction is based upon Sections 1336, 1398, 2284, 2321, 2322, 2324, and 2325, 28 U.S.C.A.

The question of whether the trackage involved herein is an "extension" or is a Section 1(22) track is a mixed question of fact and law. United States v. Idaho, 298 U.S. 105, 56 S.Ct. 690, 80 L.Ed. 1070 (1936). Although the Commission must incidentally pass on the issue of whether or not a track is an "extension" subject to its jurisdiction whenever an application under Section 1 (18) is filed, the final determination of that issue is for the court. Texas & Pacific Ry. Co. v. Gulf, Colorado & Santa Fe Ry. Co., 270 U.S. 266, 46 S.Ct. 263, 70 L.Ed. 578 (1926); Powell v. United States, 300 U.S. 276, 57 S.Ct. 470, 81 L. Ed. 643 (1937).

The principal decision relied on by the Commission is Texas & Pacific Ry. Co., supra. In that landmark case, the Texas & Pacific sued under Section 1(20) to enjoin the Gulf, Colorado & Santa Fe from constructing tracks into an industrial territory adjacent to the line of the Texas & Pacific. The evidence showed that the proposed seven and one-half miles of track would tap territory already adequately served by Texas & Pacific and would divert freight revenues amounting to $500,000 per year. In holding the proposed track to be an "extension" and not a "spur" or "industrial" track within Section 1(22), the court furnished a guideline as to what constitutes an "extension," stating at page 278, 46 S. Ct. at page 266:

"* * * 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 industrial tracks. * * *"

As the court points out in State of Georgia v. United States, 156 F.Supp. 711 (N.D.Ga.1957), aff'd 356 U.S. 273, 78 S. Ct. 771, 2 L.Ed.2d 760 (1958), the standard laid down in the Texas & Pacific case is whether or not there is a substantial extension into new territory. In the State of Georgia decision, the court held there was a substantial extension because it would involve substantial expenditures ($523,916) and would run a substantial distance. The facts in that case are not applicable to the situation here. We cannot say that a connecting track 262 feet in length which cost $28,690 to build is "substantial," nor is there any "invasion" into new territory served by the intervening defendants.

No industries are located on or adjacent to the Republic Junction connecting track, and, as the Commission concedes, the movement of the cars from the line of the Milwaukee Road to the Ishpeming, and vice versa, is a "switching movement."

The Commission found that the switching of...