City of Chicago v. Atchison, Topeka and Santa Fe Railway Company Parmelee Transportation Co v. Atchison, Topeka and Santa Fe Railway Co

• Citation: 78 S.Ct. 1063,2 L.Ed.2d 1174,357 U.S. 77
• Decision Date: 16 June 1958
• Docket Number: 104,Nos. 103,s. 103
• Parties: CITY OF CHICAGO, a Municipal Corporation, Petitioner, v. The ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY; The Baltimore and Ohio Railway Company, et al. PARMELEE TRANSPORTATION CO., et al., Appellants, v. The ATCHISON, TOPEKA AND SANTA FE RAILWAY CO., et al
• Court: U.S. Supreme Court

357 U.S. 77

78 S.Ct. 1063

2 L.Ed.2d 1174

CITY OF CHICAGO, a Municipal Corporation, Petitioner,

v The ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY; The

Baltimore and Ohio Railway Company, et al.

PARMELEE TRANSPORTATION CO., et al., Appellants,

v. The ATCHISON, TOPEKA AND SANTA FE RAILWAY CO., et al.

Nos. 103, 104.

Argued March 5, 6, 1958.

Decided June 16, 1958.

[Syllabus from pages 76-78 intentionally omitted] Mr. Joseph F. Grossman, Chicago, Ill., for the petitioner.

Mr. Amos M. Mathews, Chicago, Ill., for the respondents.

Mr. Justice BLACK delivered the opinion of the Court.

Chicago is one of the Nation's great rail centers. Each day thousands of railroad passengers travel through that City on continuous journeys from one State to another. Since the lines of all railroads which carry passengers into and out of Chicago come to an end in one of that City's eight terminals, through passengers frequently arrive at a station different from the one where they are to board their outgoing train and must transfer with their baggage in order to continue their trip. Because of the serious problems of scheduling and passenger convenience involved in this interchange, the railroads, as a group, have long provided for the transfer of through passengers from one station to another by a systematic and highly organized motor carrier operation. Generally the passengers receive a coupon covering this transfer service, without special charge, as part of their through ticket.

For many years the railroads had an arrangement with Parmelee Transportation Company under which it carried through passengers between stations. Apparently finding its service no longer desirable, the railroads notified Parmelee in June 1955 that they would discontinue using its transfer vehicles as of October 1, 1955. Subsequently they engaged Railroad Transfer Service, a corporation specially organized at their request for that purpose, as their exclusive transfer agent for a five-year period commencing with the termination of Parmelee's service.

At the time the railroads gave Parmelee their notice the City of Chicago had in effect a detailed plan for the regulation and licensing of public passenger vehicles for hire. Among other things, operation of any public passenger vehicle, including a vehicle engaged in the transfer of passengers between railroad stations, was prohibited unless it had been licensed by the City. Any person who operated one of these vehicles without a license was subject to arrest and punishment.

After the railroads announced they intended to use the facilities of Railroad Transfer Service instead of those of Parmelee, the City Council proceeded to amend the Municipal Code so as to effect certain important changes with regard to the licensing of transfer vehicles. A new section, 28—31.1, was added. In substance, it provided that no license for a transfer vehicle would issue unless the City Commissioner of Licenses first determined that public convenience and necessity required additional interterminal service. In that event, the City Council reserved final discretion to determine how many, if any, new licenses were to be issued. In making his determination the Commissioner was authorized to consider public demand for the proposed additional transfer service, its economic feasibility, public safety and, generally, any other facts he might think relevant.¹ If § 28—31.1 validly applied to Railroad Transfer Service that company was required to secure a certificate of convenience and necessity from the Commissioner plus the approval of the City Council before it could lawfully transfer any passengers for the railroads. On the other hand, Parmelee was permitted to continue operating without leave from the City since an exception in § 28—31.1 provided that no certificate was necessary for the renewal of an existing license. Parmelee's vehicles were all licensed, of course, at the time the section became effective.

As scheduled, Transfer began to carry passengers between stations on October 1, 1955.² However, it refused to apply for a certificate of convenience and necessity, taking the position that § 28—31.1 was either inapplicable to its vehicles or, if applicable, invalid. The City rejected this contention and threatened to arrest and fine Transfer's drivers if they operated unlicensed vehicles. Transfer and the railroads then filed this suit in United States District Court asking for a judgment declaring § 28—31.1 either inapplicable or invalid. The complaint asserted that the city's requirement of a certificate of convenience and necessity was inconsistent with the provisions of the Interstate Commerce Act, 49 U.S.C.A. § 1 et seq., as well as the Commerce Clause of the Constitution insofar as it applied to vehicles transferring interstate passengers from one rail road station to another under agreement with the railroads. The City filed no answer but moved for a summary judgment. Parmelee was permitted to intervene as a defendant.

The district judge, pointing out that there were no genuine issues of fact, granted the city's motion and dismissed the complaint. But the Court of Appeals for the Seventh Circuit reversed. 240 F.2d 930. It agreed with the District Court that § 28—31.1 applied to Transfer's operation, but held that the section as so applied was repugnant on its face to the Constitution and laws of the United States. We granted the City's petition for certiorari, 353 U.S. 972, 77 S.Ct. 1057, 1 L.Ed.2d 1135, but postponed assuming jurisdiction on an appeal by Parmelee until further consideration at the hearing on the merits, 353 U.S. 971, 77 S.Ct. 1057, 1 L.Ed.2d 1134. Counsel for Parmelee and Transfer were asked to discuss the following jurisdictional questions:

'1. Whether Parmelee Transportation Co. has standing to seek review here on appeal or by writ of certiorari.

'2. Whether the judgment of the Court of Appeals is 'final' so as to permit review by way of appeal under 28 U.S.C. § 1254(2) (28 U.S.C.A. § 1254(2)). Cf. Slaker v. O'Connor, 278 U.S. 188, 189 (49 S.Ct. 158, 159, 73 L.Ed. 258); South Carolina Electric & Gas Co. v. Flemming, 351 U.S. 901 (76 S.Ct. 692, 100 L.Ed. 1439).'

First. The judgment of the Court of Appeals is the proper subject of an appeal. Under 28 U.S.C. § 1254(2), 28 U.S.C.A. § 1254(2), this Court may review cases on appeal where a Court of Appeals has held a state statute invalid as repugnant to the Constitution, treaties or laws of the United States. In Slaker v. O'Connor, 278 U.S. 188, 189, 49 S.Ct. 158, 159, 73 L.Ed. 258, the Court construed the substantially identical predecessor of § 1254(2) ³ as requiring a 'final' judgment in a case before an appeal could be taken. The Slaker case was followed without comment, as to § 1254(2) itself, by the per curiam opinion in South Carolina Electric & Gas Co. v. Flemming, 351 U.S. 901, 76 S.Ct. 692, 100 L.Ed. 1439. Counsel for Parmelee, rely- ing on the language and legislative history of § 1254(2) and its predecessor, forcefully argue that the requirement of finality announced in the Slaker case is erroneous and should be overruled. We find it unnecessary however to pass on this contention here because we are convinced that the judgment below was 'final' by any relevant standard.

By its decision the Court of Appeals resolved all disputed questions between the parties. From the beginning the only issues in the case were whether § 28—31.1 was applicable to Transfer and, if applicable, whether that section was consistent with federal law. The Court of Appeals held the section applied to Transfer but was unconstitutional. There was nothing more to litigate; all that remained for the District Court on remand was to formally enter judgment for the plaintiff. Compare Pope v. Atlantic Coast Line R. Co., 345 U.S. 379, 381—383, 73 S.Ct. 749, 750—751, 97 L.Ed. 1094.

Second. Parmelee has standing to secure review of the judgment below by appeal. It is enough, for purposes of standing, that we have an actual controversy before us in which Parmelee has a direct and substantial personal interest in the outcome. Undoubtedly it is affected adversely by Transfer's operation. Parmelee contends that this operation is prohibited by a valid city ordinance and asserts the right to be free from unlawful competition. Transfer, on the other hand, suggests that Parmelee has no standing because the city ordinance is invalid and Transfer's operation is lawful. It argues that a party has no right to complain about lawful competition, citing Alabama Power Co. v. Ickes, 302 U.S. 464, 58 S.Ct. 300, 82 L.Ed. 374, and Tennessee Electric Power Co. v. Tennessee Valley Authority, 306 U.S. 118, 59 S.Ct. 366, 83 L.Ed. 543. We do not regard either of these cases as controlling here. It seems to us that Transfer's argument confuses the merits of the controversy with the standing of Parmelee to litigate them. Cf. Bell v. Hood, 327 U.S. 678, 66 S.Ct. 773, 90 L.Ed. 939. Parmelee's standing could hardly depend on whether or not it is eventually held that Transfer can lawfully operate without a certificate of convenience and necessity.⁴

Third. There is still another preliminary point which must be decided. The City argues that the courts below should not have passed on the validity of § 28—31.1 until state courts had authoritatively ruled that Transfer's terminal vehicles came within its provisions. The City asks that we vacate the judgment of the Court of Appeals and remand to the District Court with directions to hold the case until efforts to obtain an adjudication in the state courts have been exhausted. Under the circumstances we do not believe this procedure is warranted.

After full argument on that point, both the District Court and a unanimous Court of Appeals held that § 28—31.1 applied to Transfer. That was the position of the city in both courts and it made no move there to have the matter remitted to the state courts. After referring to the provisions of § 28—31.1...