Clarksburg-Columbus Short Route B. Co. v. Woodring

• Decision Date: 01 February 1937
• Docket Number: No. 6739.,6739.
• Citation: 89 F.2d 788,67 App. DC 44
• Parties: CLARKSBURG-COLUMBUS SHORT ROUTE BRIDGE CO. v. WOODRING et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

67 App. DC 44, 89 F.2d 788 (1937)

CLARKSBURG-COLUMBUS SHORT ROUTE BRIDGE CO. v. WOODRING et al.

No. 6739.

United States Court of Appeals for the District of Columbia.

Argued November 10, 1936.

Decided February 1, 1937.

George D. Horning, Jr., of Washington, D. C., and James S. McCluer, of Parkersburg, W. Va., for appellant.

Leslie C. Garnett and H. L. Underwood, both of Washington, D. C., for appellees.

Before MARTIN, Chief Justice, and ROBB, VAN ORSDEL, GRONER, and STEPHENS, Associate Justices.

VAN ORSDEL, Associate Justice.

This appeal is from a decree of the Supreme Court, now United States District Court for the District of Columbia, dismissing a bill in equity whereby appellant, Clarksburg-Columbus Short Route Bridge Company, hereafter referred to as plaintiff, sought to restrain the appellee Secretary of War from continuing in force and effect an order fixing tolls to be charged and collected by the defendant Parkersburg-Community Bridge Company.

The Parkersburg Company is the owner of a bridge, constructed in 1915, spanning the Ohio river between the city of Parkersburg, W. Va., and the town of Belpre, Ohio. The Clarksburg Company is the owner of a bridge, erected in 1926, and spanning the Ohio river between the town of St. Mary's, W. Va., and the town of Newport, Ohio.

United States Highway Traffic Route No. 50, extending across the United States from the east to the west coasts, crosses the bridges of the respective companies. It divides at a point approximately 30 miles east of Parkersburg into route No. 50 north, and route No. 50 south. The north route crosses the bridge of plaintiff company, and the south route crosses the bridge of the defendant company. These bridges are integral parts of the respective routes. The northern and southern branches of route No. 50 converge at Athens, Ohio, a short distance west of these bridges, and extend again as a single highway route through to the Pacific Coast. The length of route 50 north and route 50 south is approximately the same, making either bridge equally available and convenient for the use of interstate traffic over highway route No. 50.

It is alleged in the bill, and admitted by the motion to dismiss, that heretofore these bridges have been highly competitive; that their toll rates were approximately the same, and each received a fair share of through traffic; that it has been advantageous for through traffic to use the Clarksburg bridge rather than the Parkersburg bridge because of the traffic congestion in the area around the city of Parkersburg; that the Clarksburg bridge is better equipped for the handling of traffic; that it was erected at a cost of $1,250,000 and depends for its revenue almost entirely on through traffic, there being little local traffic between St. Mary's, West Virginia, and Newport, Ohio; that the Parkersburg bridge carries a large amount of local traffic between Parkersburg, W. Va., and Belpre, Ohio, and is not dependent for its revenues upon through traffic, the local traffic on the Parkersburg bridge being greater than the entire traffic, both through and local, over plaintiff company's bridge.

It is further alleged that in June, 1935, "without notice to the plaintiff corporation, and without an opportunity for it to be heard, or to present evidence of the competitive conditions aforesaid, and of the irreparable loss and damage which would result to it, by reason of a reduction in the tolls charged upon the bridge of the defendant corporation," the Secretary of War ordered a reduction of approximately 35 per cent. in the toll rates of the Parkersburg bridge, effective January 1, 1936; that the Secretary refused to consider any circumstances in determining the toll rate to be charged upon the Parkersburg bridge except that of a reasonable return upon the investment in that bridge; that he did not consider the relative effect upon other competing bridges; that plaintiff had no notice of the investigation and had no opportunity to appear and show the competitive situation which existed; that thereafter, but before the order became effective, plaintiff, without avail, appealed to the Secretary for a hearing and protested the denial of its right to notice and to appear and be heard.

It is further alleged that as a result of this reduction traffic has been diverted to the Parkersburg bridge, and although the 35 per cent. reduction in toll rates has been in effect since January 1, 1936, the gross operating revenues of the Parkersburg bridge have decreased only 19 per cent.; that unless restrained, the Parkersburg bridge will shortly be receiving an even larger gross revenue than it enjoyed prior to the reduction of rates, due to the diversion of traffic to it; that because of this reduction, traffic will use the Parkersburg bridge in preference to plaintiff's bridge, "to the irreparable loss, injury, and damage" of plaintiff.

It is further alleged that plaintiff company is not now earning sufficient, due to the competition brought about by the reduced rates charged by the Parkersburg Bridge Company, to pay in full the interest on its bonded indebtedness, but can only pay one-half thereof; that if relief is not granted, it must reduce its tolls or cease operation, "to the irreparable loss and injury not only of the communities which it serves, but of its stockholders, bondholders, and creditors"; that the action of the Secretary in reducing the rates on the Parkersburg bridge and in refusing plaintiff company an opportunity to be heard, was illegal, arbitrary, and capricious, and constituted a confiscation of plaintiff's property without due process of law; and that the toll rates in force on the respective bridges prior to this reduction were reasonable and just.

Defendant Parkersburg Company filed an answer in which it admitted practically all the averments of the bill, stated that the reduction was unwarranted, and that it had consistently objected to the reduction of its tolls, consented to the granting of a preliminary injunction, and held itself ready to reinstate its former toll rates and to impound in cash the difference between the present and former toll rates.

The Secretary moved to dismiss the bill upon the grounds: (1) That plaintiff is without standing to maintain this suit; (2) that the bill states no cause of action and is wanting in equity; (3) that the bill alleges no legal injury by reason of the Secretary's action. From the decree sustaining the Secretary's motion and dismissing the bill, this appeal was taken. No appearance was entered for the appellee Parkersburg-Community Bridge Company in this court.

Both bridge companies are subject to the lawful orders of the Secretary of War prescribing toll rates under the Act of Congress of March 23, 1906, § 4, 34 Stat. 85 (section 494, T. 33, U.S.C. 33 U.S.C. A. § 494), which, among other things, provides: "If tolls shall be charged for the transit over any bridge constructed under the provisions of this chapter, sections 491 to 498, inclusive, of engines, cars, street cars, wagons, carriages, vehicles, animals, foot passengers, or other passengers, such tolls shall be reasonable and just, and the Secretary of War may, at any time, and from time to time, prescribe the reasonable rates of toll for such transit over such bridge, and the rates so prescribed shall be the legal rates and shall be the rates demanded and received for such transit."

The right to notice and hearing is imperative in judicial or quasi judicial proceedings. It is not important that in this instance a hearing is not expressly enjoined by the statute. The right is constitutional, and the deprivation of the citizen of his property without notice and an opportunity to be heard amounts to the taking of his property without due process of law (Const. Amend. 5). In the very recent case of Morgan et al. v. United States, 298 U.S. 468, 56 S.Ct. 906, 908, 80 L.Ed. 1288, the court was considering an order of the Secretary of Agriculture fixing maximum rates to be charged by market agencies in buying and selling live stock in the Kansas City stock yards. The complainants, among other things, claimed that they had been deprived of the full hearing required by the statute. The court, reversing the lower court (D.C. 8 F.Supp. 766) chiefly on this point, said: "We meet at the threshold of the controversy plaintiffs' additional contention that they have not been accorded the hearing which the statute requires. They rightly assert that the granting of that hearing is a prerequisite to the making of a valid order. * * * But, in determining whether in conducting an administrative proceeding of this sort the Secretary has complied with the statutory prerequisites, the recitals of his procedure cannot be regarded as conclusive. Otherwise the statutory conditions could be set at naught by mere assertion. If upon the facts alleged the `full hearing' required by the statute was not given, plaintiffs were entitled to prove the facts and have the Secretary's order set aside. Nor is it necessary to go beyond the terms of the statute in order to consider the constitutional requirement of due process as to notice and hearing. For the statute itself demands a full hearing, and the order is void if such a hearing was denied. * * * The proceeding is not one of ordinary administration, conformable to the standards governing duties of a purely executive character. It is a proceeding looking to legislative action in the fixing of rates of market agencies. And, while the order is legislative and gives to the proceeding its distinctive character (Louisville & Nashville R. Co. v. Garrett, 231 U.S. 298, 307, 34 S.Ct. 48, 58 L.Ed. 229), it is a proceeding which by virtue of the authority conferred has special attributes. The Secretary, as the agent of Congress in making the rates, must make them in accordance with the standards and under the limitations which Congress has prescribed. Congress has required the...