Consolidated Freightways v. Railroad Commission

• Decision Date: 06 January 1941
• Docket Number: No. 21713-R.,21713-R.
• Citation: 36 F. Supp. 269
• Parties: CONSOLIDATED FREIGHTWAYS, Inc., v. RAILROAD COMMISSION OF CALIFORNIA et al.
• Court: U.S. District Court — Northern District of California

36 F. Supp. 269

CONSOLIDATED FREIGHTWAYS, Inc., v. RAILROAD COMMISSION OF CALIFORNIA et al.

No. 21713-R.

District Court, N. D. California, S. D.

January 6, 1941.

William Farnum White, of San Francisco, Cal., for plaintiff.

Ira H. Rowell, Scott Elder, and Spurgeon Avakian, all of San Francisco, Cal., for defendant.

Before WILBUR, Circuit Judge, and ST. SURE and ROCHE, District Judges.

ROCHE, District Judge.

Plaintiff, Consolidated Freightways, Inc., seeks to enjoin defendant, the Railroad Commission of the State of California, from enforcing its order directing plaintiff to cease and desist from charging and collecting rates less than the minimum imposed for the transportation of property in the City and County of San Francisco by defendant, pursuant to the City Carriers' Act of California, Stats.1935, Ch. 312, p. 1057, as amended, Deering's General Laws, Act 5134. Plaintiff's deliveries which are the subject of this litigation, consist of local transportation of pool car shipments received from eastern points of origin. Plaintiff alleges that defendant lacks jurisdiction to regulate rates to be charged and collected on such deliveries.

Defendant contests plaintiff's right to an interlocutory injunction on four grounds: 1. the subject matter of this action has been litigated before the Supreme Court of California and is therefore res judicata; 2 the complaint fails to state grounds for equitable relief; 3. the District Court lacks jurisdiction; 4. plaintiff's deliveries are subject to regulation.

Defendant's assertion of res judicata, if found to possess merit, will make it unnecessary for the court to consider the remaining grounds of defense raised by defendant in its answer. Therefore, the question for decision is as follows: Is an order of the Railroad Commission of the State of California, upheld by the State Supreme Court in its ruling denying a writ of review, a bar to further litigation on the same subject matter in this tribunal?

The case of Napa Valley Electric Co. v. Railroad Commission of California, D.C. 1919, 257 F. 197, 199, raised a similar question. Plaintiff sought an injunction against a rate order of the Railroad Commission of the State of California after the State Supreme Court had denied a petition for a writ of review, without an opinion. In the Napa case (affirmed by the Supreme Court, 1920, 251 U.S. 366, 40 S.Ct. 174, 64 L.Ed. 310), the court held that the matter was res judicata and that the bill of complaint must be dismissed. The District Court declared:

"In this state of the case I am unable to perceive how the objection that the action of the state court is conclusive of the controversy, and that plaintiff is now precluded from bringing the same grievance here, may be avoided. It has had its day in court. * * * While it might have sought a review of the decision of the state court at the hands of the Supreme Court of the United States by appropriate proceedings * * * it did not see fit to do so, and it cannot now be heard to litigate the controversy anew in this court. * * *

"The contention by plaintiff that the ruling of the state court is not a proper predicate for invoking the doctrine of res judicata, in that it is not a judgment `on the merits,' but purely a negative determination or refusal to assume jurisdiction, is unsound. We are bound to assume, if we accept the averments of the bill, that the petition put that court in full and complete possession of all the facts upon which it relies here * * *; and, that being true, the denial of the petition was necessarily a final judicial determination * * *, based on the identical rights asserted in this court, and it was between the same parties. Such a determination is as effectual as an estoppel as would have been a formal judgment upon issues of fact. * * * Nor is it material that the reasons for the conclusion reached by the court are not given. We are not concerned with the reasoning, but only with the judgment, and it must be assumed in support of the latter that upon the facts presented to it the state court upon due consideration reached the conclusion that plaintiff's rights had not been violated."

This decision, which is well supported by the authorities, is controlling in the case before this court. See Grubb v. Public Utilities Commission, 1930, 281 U.S. 470, 50 S.Ct. 374, 74 L.Ed. 972; Wallace Ranch Water Co. v. Railroad Commission et al., 9 Cir., 1931, 47 F.2d 8; Finn v. Railroad Commission et al., D.C., 1933, 2 F.Supp. 891; and other decisions.

Plaintiff presents the following objections to the application of the defense of res judicata: 1. the California Supreme Court's judgment is legislative in character and hence does not operate as a bar to this suit; 2. the defense is non-jurisdictional and may be waived until after a trial on the merits; 3. defendant has not raised this defense in accordance with the requirements of correct pleading.

In support of its contention that the ruling of the California Supreme Court is non-judicial, plaintiff...