New York Dock Ry. v. Pennsylvania R. Co.

• Decision Date: 10 January 1933
• Docket Number: No. 4989.,4989.
• Parties: NEW YORK DOCK RY. et al. v. PENNSYLVANIA R. CO.
• Court: U.S. Court of Appeals — Third Circuit

62 F.2d 1010 (1933)

NEW YORK DOCK RY. et al. v. PENNSYLVANIA R. CO.

No. 4989.

Circuit Court of Appeals, Third Circuit.

January 10, 1933.

Charles E. Cotterill, of New York City, and John F. Finerty, of Washington, D. C. (Henry B. Closson, Abner J. Grossman, and Davies, Auerbach & Cornell, all of New York City, Cotterill, Hopkins & Ward, of Atlanta, Ga., and Edwin A. Lucas and Drinker, Biddle & Reath, all of Philadelphia, Pa., of counsel), for appellants.

Henry Wolf Bikle and Barnes, Biddle & Myers, all of Philadelphia, Pa., for appellee.

Before WOOLLEY, DAVIS, and THOMPSON, Circuit Judges.

WOOLLEY, Circuit Judge.

The Pennsylvania Railroad Company, appellee, is a common carrier operating a line of railroad whose eastern terminus physically is at the New Jersey waterfront opposite the city of New York but actually — by use of car floats and force of statute — at stations across the river on the waterfront of Manhattan, Brooklyn, the Bronx, and other boroughs within the commercial area known as the port of New York. Of the complainants-appellants, some are common carriers and others are not; but all are engaged in one way or another — principally by trucks — in exchanging freight or receiving and delivering freight (under contracts with consignees and consignors) at the New York terminals of the Pennsylvania Railroad Company where, at present, transportation over that system begins or ends according to the direction of the traffic.

The railroad company proposes, without leave of the Interstate Commerce Commission, to deliver freight by motor trucks from its terminals directly to consignees and receive freight from consignors for delivery by trucks to its terminals and thus establish what it calls an "accessorial terminal service," popularly described as "store door delivery and receipt of freight," charging therefor tariffs to be filed with and approved by the Interstate Commerce Commission. The complainants, being vitally interested in the threatened invasion of their business of trucking and moving freight to and from the railroad company's terminals, filed a bill in the District Court of the United States for the Eastern District of Pennsylvania to stop it. The theory of the bill is that the proposed practice will not be a "terminal service" at all but will be an "extension" of the company's "line of railroad," involving abandonment of its lines of car floats and lighters, which the railroad company may not do lawfully without first obtaining a certificate of public convenience and necessity from the Interstate Commerce Commission as provided by section 1, paragraph 18 of the Interstate Commerce Act, amended by the Transportation Act of 1920, § 402, U. S. Code, title 49, chapter 1, § 1, 49 USCA § 1 (18).

The case came before the District Court on a motion by the complainants for a preliminary injunction and a motion by the railroad company to dismiss the bill. The court denied the application for injunction and dismissed the bill. The complainants appealed, bringing the case here on many assignments of error which, when compressed, raise one question — with two sides — what, in legal effect, is the railroad company's proposed practice, a "terminal service" or facility incident to transportation of freight subject only to approval by the Interstate Commerce Commission of tariffs to be charged for the same, or an "extension of its line of railroad," for which, to be legal, the railroad company must first obtain a certificate of public convenience and necessity from the Interstate Commerce Commission?

On the threshold of the argument in this court the railroad company moved to dismiss the appeal on the contention that the situation as it stood before the District Court is now in point of fact non-existent, and that in consequence the issues in the case have become moot, predicating both contentions on the single fact that in the meantime the railroad company had filed tariffs (certain of the complainants participating) for the proposed trucking service with the Interstate Commerce Commission, which body, in passing upon the tariffs (it says) may consider whether the proposed service constitutes an "extension of its line of railroad."

We are not impressed by the motion to dismiss the appeal for several reasons. The first that leaps to the eye is that, though tariffs have been filed, the Interstate Commerce Commission has not approved them and that, until approved, they are not effective. It is possible the Interstate Commerce Commission may do something which may alter or nullify the factual effect of filing tariffs and leave the case where it stands on the record. Then again, even if the Commission should approve the tariffs, and even hold sometime in the future that the proposed service is not "an extension of its line of railroad," the railroad company has not convinced us that such action would annul the complainants' right, on a proper showing, to resort to the remedy by injunction afforded by section 1 (20) of the Interstate Commerce Act, as added by Transportation Act, § 402, 49 USCA § 1 (20), or that when, as here, such remedy has been invoked, the courts must wait for the question to be presented to and decided by the Commission. Texas & Pacific Ry. Co. v. Gulf, etc., Ry. Co., 270 U. S. 266, 46 S. Ct. 263, 70 L. Ed. 578. Therefore, without deciding any procedural matter that is past or is yet to come, we deny the motion to dismiss on our preference to meet the question raised on this appeal frontally and dispose of it on the record as it stands.

Further clearing the way to discussion of the main issue, we shall lay aside as an issue not here involved the complainants' contention that by the described service the railroad company proposes to abandon the lighterage parts of its line and return to its rail heads in Jersey City without obtaining a certificate of public convenience and necessity from the Interstate Commerce Commission. We do this for the reason the contention is based not on an out and out averment of fact in that regard (admitted by the motion to dismiss) but on an alleged mental attitude of the railroad company and on an inference, purely argumentative, that abandonment of the lighterage lines between New York City and Jersey City is an "eventual" consequence of the alleged "extension" of the railroad company's main line by trucks. Such a thing may conceivably happen, but the averment is too uncertain, the eventuality too doubtful and remote for this court to judge it at this time in this proceeding. Anyhow, the complainants by the prayer of their bill ask specifically for relief by injunction against the action of the railroad company in extending its line. They nowhere pray for relief against abandoning lines.

There is no secret or deception in what the railroad company is trying to do. It, avowedly, is trying to meet motor truck competition which has an advantage over rail transportation in the store door receipt and delivery of freight. It does not intend to invade new territory by extending its line of tracks or expanding its lighterage facilities, the equivalent of tracks, a foot beyond their present termini, or by establishing new terminals, but intends by its proposed practice of co-ordinating rail transportation and truck service to reach its patrons, present and prospective, within New York City — territory into which it now enters and which it now serves — by delivering and receiving at their doors freight which it has transported or is about to transport over its rails and thereby hold to itself the traffic which it still has and, if it can, take traffic from competing truck carriers along the highways and, of course, take local traffic from the complainants. If the service should be successful someone will inevitably be hurt. That is one of the inescapable consequences of competition, even when lawfully practiced. Yet, while there is nothing wicked or unlawful in competition per se, the question remains whether the railroad company can lawfully compete for traffic in this way. The answer to that question is to be found in the law by which the railroad company's activities are limited and regulated, the applicable provisions in this instance being Interstate Commerce Act, supra, section 1, paragraphs 3, 18-22 (49 USCA § 1 (3, 18-22).

Paragraph 18 of section 1 of that act makes it unlawful for any carrier by railroad subject to the act to undertake "the extension of its line of railroad" or to "engage in transportation * * * by means of such * * * extended line of railroad," and likewise makes it unlawful for any such carrier to "abandon all or any portion of a line of railroad, or the operation thereof, unless and until there shall first have been obtained from the Interstate Commerce Commission a certificate that the present or future public convenience and necessity" require such extension or permit of such abandonment.

Paragraph 22 as added by Transportation Act § 402, 49 USCA § 1 (22), provides as exemptions from the scope of the provisions of paragraph 18 "the construction or abandonment of spur, industrial, team, switching, or side tracks. * * *" Other paragraphs provide for the procedure and the enforcement of the Commission's order.

And, finally, paragraph 20 af...