Cobb v. Department of Public Works

• Decision Date: 11 July 1932
• Docket Number: No. 481.,481.
• Parties: COBB et al. v. DEPARTMENT OF PUBLIC WORKS OF STATE OF WASHINGTON et al.
• Court: U.S. District Court — Western District of Washington

60 F.2d 631 (1932)

COBB et al. v. DEPARTMENT OF PUBLIC WORKS OF STATE OF WASHINGTON et al.

No. 481.

District Court, W. D. Washington, S. D.

July 11, 1932.

Marion A. Zioncheck and W. R. Bell, both of Seattle, Wash., for plaintiffs.

John H. Dunbar, Atty. Gen., State of Washington, and John C. Hurspool, Asst. Atty. Gen., State of Washington, for defendants Department of Public Works and Fred K. Baker.

Before WILBUR, Circuit Judge, and McNARY and CUSHMAN, District Judges.

CUSHMAN, District Judge.

Plaintiffs, engaged solely in carrying passengers for hire by autobus between Seattle, Wash., and Portland, Or., sue to enjoin the defendants the Department of Public Works of the State of Washington, and its director, from revoking or canceling the certificates heretofore issued plaintiffs by defendants authorizing them to use the public highways of Washington. Plaintiffs further ask for general relief.

Defendants have moved to dismiss and answered.

This suit was begun May 7, 1932, and heard before three judges May 26, 1932, upon defendants' motion to dismiss and upon the petition and answer as upon motion for decree upon bill and answer.

In Hammond v. Schappi Bus Line, 275 U. S. 164 at pages 171, 172, 48 S. Ct. 66, 69, 72 L. Ed. 218, the court said: "Before any of the questions suggested, which are both novel and of far reaching importance, are passed upon by this court, the facts essential to their decision should be definitely found by the lower courts upon adequate evidence."

The manner in which the present cause was submitted excuses, if it does not require, a full statement of the issues made by the pleadings and the statements of counsel in presenting the cause.

The basis of the suit is that Remington's Compiled Statutes of Washington 1922, §§ 6390 and 6391, violate article 1, § 8, cl. 3, of the Constitution, providing that: "The Congress shall have Power * * * To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes."

The petition, in part, alleges: "IV. That heretofore the defendants issued to the plaintiffs certificates authorizing them to use the public highways in the State of Washington and in the State of Oregon between the Cities of Seattle and Portland for the purpose of transporting passengers by auto bus between said termini, but before so doing exacted from them an indemnity surety bond as above referred to; that recently the sureties on said indemnity bonds have canceled the same, and the plaintiffs have attempted to secure other indemnity bonds from all other accredited Surety Companies in the State of Oregon and in the State of Washington, but all of them have refused to accept the risk or become sureties for the plaintiffs upon the required indemnity bonds, and have refused to give any reason for their actions, although there has been no change in the conditions affecting the risk, and the defendants have notified the plaintiffs that unless the required bonds are furnished and filed before May 10th, 1932 the certificates heretofore issued to them will be revoked and cancelled, and the plaintiffs will be arrested and prosecuted if they undertake thereafter to use the highways between said termini for the transportation of passengers by auto stage."

Defendants' answer, in part, is as follows: "II. Answering paragraphs II and IV of said petition, these defendants deny that the laws of the state of Washington require that the indemnity bond or liability insurance required to be furnished by interstate carriers shall protect and indemnify both passengers and the general public, and deny that these defendants exacted such liability insurance or indemnity bond from said plaintiffs. * * *"

The answer here copies sections 6391 and 6394 of Remington's Compiled Statutes, which are set forth later in this opinion, and continuing, alleges:

"That in accordance with such statute these defendants require all carriers, both intra and interstate, before the issuance of a certificate of public convenience and necessity to them, to furnish and to thereafter keep in force liability insurance or indemnity bond containing an endorsement as to the liability thereunder, as shown by exhibit `A', which is hereto attached and made a part hereof, and that such liability insurance or indemnity bond was required of plaintiffs, and admit that plaintiffs at the time of the issuance to them of such certificate of public convenience and necessity furnished to these defendants such liability insurance; that thereafter these defendants received notice from the insurers under such liability insurance that such insurance had been cancelled in accordance with the terms of such endorsement, such cancellation to take effect May 10, 1932, and that thereupon these defendants notified plaintiffs of this fact and that they must furnish proper liability insurance in lieu thereof by May 10, 1932, or such certificate of public convenience and necessity therefor" (theretofore) "issued to them would be cancelled.

"Further answering said paragraph, these defendants allege that they have no knowledge or information as to whether the said plaintiffs have been unable to secure other liability insurance or indemnity bonds and deny that they have threatened to have the plaintiffs arrested and prosecuted if they undertook to use the highways of the state in said interstate passenger operation without the filing of such liability insurance or indemnity bond, but admit that unless such liability insurance and indemnity bond is furnished these defendants will seek to have such operations by plaintiffs enjoined."

The bond indorsement, referred to in the answer, is, in so far as pertinent, as follows:

"Endorsement.

"The policy to which this endorsement is attached is written in pursuance of and is to be construed in accordance with chapter 111, of the Session Laws of 1921, and the Rules and Regulations of the Department of Public Works of Washington, adopted thereunder. The policy is to be filed with the State in accordance with said statute.

"In consideration of the premium stated in the policy to which this endorsement is attached, the Company hereby waives a description of the vehicles to be insured hereunder and agrees to pay any final judgment for personal injury, including death resulting therefrom, and, or damage to property other than the assured's, caused by any and all motor vehicles and/or trailers and semitrailers and/or other equipment operated by the assured pursuant to its certificate of public convenience and necessity issued by the Department of Public Works of Washington in accordance with Chapter 111, Session Laws of 1921, within the limits set forth in the schedule shown hereon, and further agrees that upon its failure to pay any such final judgment such judgment creditor may maintain an action in any court of competent jurisdiction to compel such payment. Nothing contained in the policy or any endorsement thereon, nor the violation of any of the provisions thereof, by the assured, shall relieve the Company from liability hereunder or from the payment of any such judgment. * * *"

While the answer states that the defendants "admit that unless such liability insurance and indemnity bond is furnished these defendants will seek to have such operations by plaintiffs enjoined," and while the cancellation of bonds became effective May 10, 1932, there has been no suggestion of any suit brought by defendants to have plaintiffs' operations enjoined.

Primarily the task of determining the intent of the State legislature is that of the State's courts. Dorchy v. Kansas, 264 U. S. 286, 290, 44 S. Ct. 323, 68 L. Ed. 686.

Section 266 of the Judicial Code, as amended (title 28, USCA § 380), in part provides: "It is further provided that if before the final hearing of such application a suit shall have been brought in a court of the State having jurisdiction thereof under the laws of such State, to enforce such statute or order, accompanied by a stay in such State court of proceedings under such statute or order pending the determination of such suit by such State court, all proceedings in any court of the United States to restrain the execution of such statute or order shall be stayed pending the final determination of such suit in the courts of the State. Such stay may be vacated upon proof made after hearing, and notice of ten days served upon the attorney general of the State, that the suit in the State courts is not being prosecuted with diligence and good faith. * * *"

Remington's Compiled Statutes of Washington 1922, sections 6390, 6391, 6393, and 6394, are as follows:

"§ 6390. Certificate of Public Convenience and Necessity. No auto transportation company shall hereafter operate for the transportation of persons and, or, property for compensation between fixed termini or over a regular route in this state, without first having obtained from the commission under the provisions of this act a certificate declaring that public convenience and necessity require such operation; but a certificate shall be granted when it appears to the satisfaction of the commission that such person, firm or corporation was actually operating in good faith, over the route for which such certificate shall be sought on January 15, 1921. Any right, privilege, certificate held, owned or obtained by an auto transportation company may be sold, assigned, leased, transferred or inherited as other property, only upon authorization by the commission. The commission shall have power, after hearing, when the applicant requests a certificate to operate in a territory already served by a certificate holder under this act, only when the existing auto transportation company or companies serving such territory will not provide the same to the satisfaction of the commission, and in all other cases with or without hearing, to issue said certificate as prayed for; or for good cause shown to refuse to issue same, or to...