Norfolk and Western Railway Co. v. United States

• Decision Date: 02 July 1970
• Docket Number: No. 69 C 378.,69 C 378.
• Citation: 316 F. Supp. 1396
• Parties: NORFOLK AND WESTERN RAILWAY COMPANY, Plaintiff, v. UNITED STATES of America, and Interstate Commerce Commission, Defendants, and Illinois Commerce Commission, Public of the State of Indiana, Michigan Public Service Commission, Missouri Public Service Commission, City of Fort Wayne, City of Adrian, Sisters of St. Dominic Motherhouse, and United Transportation Union, Intervening Defendants.
• Court: U.S. District Court — Eastern District of Missouri

316 F. Supp. 1396

NORFOLK AND WESTERN RAILWAY COMPANY, Plaintiff, v. UNITED STATES of America, and Interstate Commerce Commission, Defendants and Illinois Commerce Commission, Public of the State of Indiana, Michigan Public Service Commission, Missouri Public Service Commission, City of Fort Wayne, City of Adrian, Sisters of St. Dominic Motherhouse and United Transportation Union, Intervening Defendants.

No. 69 C 378.

United States District Court, E. D. Missouri, E. D.

July 2, 1970.

Ray T. Sample and Richard A. Keeney, St. Louis, Mo., and Sidley & Austin, Howard J. Trienens, George L. Saunders, Jr., Theodore N. Miller, Chicago, Ill., for plaintiff.

Daniel Bartlett, Jr., U. S. Atty., St. Louis, Mo., Richard W. McLaren, Asst. Atty. Gen., and John H. D. Wigger, Atty., Dept. of Justice, Washington, D. C., for defendant United States.

Robert W. Ginanne, General Counsel, and Pyilip W. Getts, Atty., I. C. C., Washington, D. C., for defendant I. C. C.

James T. Williamson, St. Louis, Mo., for intervening defendants.

Wm. J. Scott, Atty. Gen., State of Ill., Springfield, Ill., Peter A. Fasseas, Asst. Atty. Gen., Chicago, Ill., for Illinois Commerce Commission.

Carl E. VanDorn, Public Counsellor, State of Ind., for Public of State of Indiana.

Walter V. Kron, Asst. Atty. Gen., David P. VanNote, Asst. Atty. Gen., State of Mich., Lansing, Mich., for Michigan Public Service Commission.

Jeremiah D. Finnegan, Gen. Counsel, Mo. Public Service Commission, Jefferson City, Mo., for Missouri Public Service Commission.

J. Robert Arnold, Fort Wayne, Ind., for City of Fort Wayne.

Major Bird, Adrian, Mich., for City of Adrian.

James T. Williamson, St. Louis, Mo., Gordon P. MacDougall, Washington, D. C., for United Transportation Union.

Before MATTHES, Circuit Judge, and MEREDITH and REGAN, District Judges.

MEMORANDUM OPINION

REGAN, District Judge.

This is an action to review and set aside an order of the Interstate Commerce Commission which required Norfolk and Western Railway Company (N & W) to continue the operation of its passenger trains Nos. 301 and 304 (the "Wabash Cannonball") between St. Louis and Detroit for one year following the date of the order issued June 26, 1969. The Commission's decision is reported in Norfolk & Western Railway Co. Discontinuance of Trains Nos. 301 and 304, 334 I.C.C. 506.

Norfolk and Western duly filed notice of its discontinuance of trains Nos. 301 and 304 pursuant to Section 13a(1) of the Interstate Commerce Commission Act, as amended (49 U.S.C. § 13a(1)). Objections to the proposed discontinuance having been made, the Commission instituted an investigation thereof and ordered the trains continued for the maximum period of four months. Hearings were held at St. Louis, Missouri, Decatur and Danville, Illinois, Lafayette, Peru and Ft. Wayne, Indiana, and Detroit, Michigan, following which the Commission found that the public convenience and necessity required the continued operation of the trains and that the continued operation of the trains would not create an undue burden on interstate commerce, and entered the order complained of. A timely petition for reconsideration was denied and this suit followed.

"Section 13a in its present form came into the (Interstate Commerce Commission) Act in 1958 and was designed to supersede the prior confused and time-consuming procedure under which the States supervised the discontinuance of passenger trains. Accordingly, Congress provided a uniform federal scheme to take the place of the former procedure. A single federal standard was to govern train discontinuances whether interstate or intrastate, though the procedure of § 13a(1) for discontinuance of an interstate train was made somewhat different from the procedure for discontinuance of intrastate trains. But the Commission to have the final say in each case and `precisely the same substantive standard' now governs discontinuance of either interstate or intrastate operations. Southern R. Co. v. North Carolina, 376 U.S. 93, 103, 84 S.Ct. 564, 570, 11 L.Ed.2d 541." City of Chicago v. United States, 396 U.S. 162, 164-165, 90 S.Ct. 309, 311, 24 L.Ed.2d 340.

The "Wabash Cannonball" provides the only direct railway passenger service between St. Louis and Detroit. All other rail routes are very circuitous. So, too, there is no existing bus service which parallels the Cannonball route, many of the intermediate points are not located on any bus route, and others have but limited bus service with infrequent schedules.

The Commission found that the use of the trains had declined to a total in 1968 of 58,538 revenue passengers, the average number of passengers per trip per day that year being 83.4 for train No. 301 and 76.6 for train No. 304. The heaviest patronage is during the months of June, July and August. St. Louis and Detroit originate over one-third of the passengers utilizing the trains. Of the total passengers, over one-half travel over, between, to or from either Detroit or St. Louis, the remainder traveling shorter trips between intermediate stations. In 1968, N & W had a net income after fixed charges and other deductions of $74,141,388, an increase of some $1,500,000 over its 1967 net income. The railroad's total system passenger deficit for 1968 was $13,158,875. Addressing itself to the evidence of N & W that the 1968 net losses from the operations of the Cannonball was $576,466, the Commission found that some of the "savable expenses" (that is, those expenses which would cease with the discontinuance of the trains) were overstated by approximately $64,000, reducing the claimed losses to $512,772. The corresponding impact of increased federal income taxes resulting from these deductible expense items would further reduce its loss from the operation of the trains to $377,400.

Section 13a authorizes the Commission to order the continuance of the operation of the train "for a period not to exceed one year from the date of such order" upon a finding, after hearing, that the operation of such train "is required by public convenience and necessity and will not unduly burden interstate * * * commerce." In this case, the required findings were made and the order based thereon was limited to a period of one year.

Judicial review of an I.C.C. order is very limited. Our function is to determine whether the ultimate findings of the Commission are supported by substantial evidence on the whole record and do not involve an error of law. Once it is found that the Commission's findings are supported by substantial evidence and that in arriving at its determination the Commission did not depart from the applicable rules of law, that is the end of the matter. On the other hand, the Commission's order must be reversed if in arriving at its determination the Commission failed to follow the applicable law or if its findings are arbitrary and capricious and have no basis on the record as a whole. Truck Transport, Inc. v. United States, D.C. Mo., 300 F.Supp. 159, 161. "Substantial evidence need not necessarily be a preponderance of evidence. It is sufficient if it is that degree of evidence which would justify, if the trial were to a jury, the refusal to direct the verdict when the conclusion to be drawn is one of fact for a jury." Garrett Freightlines, Inc. v. United States, D.C.Idaho, 307 F.Supp. 1245, 1247. See Universal Camera Corp. v. National Labor Relations Board, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456.

N & W argues that the Commission's finding of public need is not supported by substantial evidence but on the contrary has resulted from its "arbitrary rejection" of a marketing survey made at the railroad's instance by Arthur D. Little, Inc. which was based upon a sampling survey of passengers riding the trains during the two-week period commencing February 15, 1969, and an analysis of the community served by the trains. The railroad's theory of "arbitrary rejection" is premised on the fact that the study was not in terms discussed in the Commission's report. In our view, failure to specifically refer to the evidence may not be equated with a failure to consider it.

We are aware of no requirement in the law—and N & W cited us to no authority which mandates the Commission to specifically refer to and state in its report the weight it accorded to the testimony of each witness, even if that testimony is "expert" or is deemed by a party to be of major significance. The courts have consistently held that the Commission need not specify the weight given to any item of evidence or disclose the mental operations by which its decisions are reached. Yourga v. United States, D.C.Pa., 191 F.Supp. 373, 375; Curtis, Inc. v. United States, D.C.Colo., 225 F.Supp. 894, 902; Lake Shore Motor Freight Company v. United States, D.C.Ohio, 310 F.Supp. 957, 961. The Commission's discussion concluded with the statement that "Contentions of the parties as to fact or law not specifically discussed herein have nevertheless been given consideration and found to be without merit or material significance." We also note that in its order denying the petition for reconsideration, which specifically called attention to the Little study, the Commission noted that...