Pennsylvania Railroad Company v. Sharfsin, 15855.

• Decision Date: 06 December 1966
• Docket Number: No. 15855.,15855.
• Citation: 369 F.2d 276
• Parties: The PENNSYLVANIA RAILROAD COMPANY, Appellee, v. Joseph SHARFSIN, P. Stephen Stahlnecker, Robert W. Anthony, William F. O'Hara and John L. Dorris, Individually and as Commissioners of the Pennsylvania Public Utility Commission, Appellants.
• Court: U.S. Court of Appeals — Third Circuit

369 F.2d 276 (1966)

The PENNSYLVANIA RAILROAD COMPANY, Appellee, v. Joseph SHARFSIN, P. Stephen Stahlnecker, Robert W. Anthony, William F. O'Hara and John L. Dorris, Individually and as Commissioners of the Pennsylvania Public Utility Commission, Appellants.

No. 15855.

United States Court of Appeals Third Circuit.

Argued October 4, 1966.

Decided December 6, 1966.

COPYRIGHT MATERIAL OMITTED

William A. Goichman, Philadelphia, Pa. (Edward Munce, Asst. Counsel, Joseph C. Bruno, Chief Counsel, Harrisburg, Pa., on the brief), for appellants.

Charles E. Mechem, Asst. General Sol., Pennsylvania Railroad Co., Legal Department, Philadelphia, Pa., for appellee.

Before FORMAN, FREEDMAN and SEITZ, Circuit Judges.

OPINION OF THE COURT

SEITZ, Circuit Judge.

This appeal by the Pennsylvania Public Utility Commission ("P. U. C.") challenges an injunction issued by the District Court at the behest of the Pennsylvania Railroad ("Railroad") against enforcement of a P. U. C. order commanding the Railroad to restore certain train service within Pennsylvania.

In November 1960, the Railroad applied to the P. U. C. for authority to discontinue service at stations within Pennsylvania of two passenger trains which operated during the night between Harrisburg, Pennsylvania and Hagerstown, Maryland.¹ On August 7, 1961, the P. U. C. denied the application. Although there is an appeal provision, the Railroad did not appeal the decision. Rather, on January 24, 1962, the Railroad filed with the Interstate Commerce Commission a notice with supporting data of a proposed discontinuance of the trains effective February 25, 1962. This was done pursuant to Section 13a(1) of the Interstate Commerce Act (49 U.S.C. § 13a(1)).² The Railroad concededly complied with the requirements of that Act and pertinent regulations. The P. U. C. received notice and on February 8, 1962 served by mail a petition to intervene. A few other protests were also filed.

On February 8, 1962, the I. C. C. in a notice with a service date of February 12, 1962 reached its conclusion not to institute a formal investigation of the proposed discontinuance.³

On February 20, 1962 — five days before the trains were to be discontinued — the P. U. C. served upon the Railroad a Rule to Show Cause why it should not be required to continue the operation of the trains in question within the State of Pennsylvania. By way of answer to the Rule the Railroad referred to its proceeding under the Interstate Commerce Act and argued that jurisdiction over the discontinuance of the trains had thereby become subject to the exclusive jurisdiction of the I. C. C. The Railroad discontinued the trains on February 25.

After the hearing on the Rule the P. U. C. on July 9, 1962 reaffirmed its order of August 7, 1961 and directed the Railroad to restore the particular trains. The P. U. C. decision was apparently not based on the grounds advanced by the parties but was bottomed on the unconstitutionality of Section 13a(1) of the Interstate Commerce Act, as here applied, under the Commerce and Due Process clauses of the Federal Constitution.

The Railroad also did not appeal this P. U. C. decision. Instead, it commenced the present action to enjoin the P. U. C. from enforcing its 1962 order. The District Court, with jurisdiction based upon 28 U.S.C.A. § 1337, on February 9, 1966 enjoined the P. U. C. from instituting proceedings concerning the Railroad's action in discontinuing the trains in question. See Pennsylvania Railroad Company v. Sharfsin, 240 F.Supp. 233 (M.D.Pa.1965), an opinion by a three-judge District Court readopted verbatim after the Supreme Court had vacated the judgment on the ground that a three-judge court was not required and that appeal should be to this court. See also Sludden v. United States, 211 F.Supp. 150 (M.D.Pa.1962). This is the decision on the P. U. C.'s appeal from the trial court's judgment.

The P. U. C. first contends on various grounds that § 13a(1) is unconstitutional as applied to this case. Stripped to its bare bones the P. U. C.'s argument is that Congress cannot under the commerce clause empower the discontinuance of trains insofar as they may operate between station points within a single state, even though they are an integral part of an interstate trip, unless there is a finding that their intrastate movements constitute an undue burden on or interference with interstate commerce.

We first consider whether § 13a (1) requires the procedure and showing which the P. U. C. says is required as a prerequisite to control of the operation of these trains within Pennsylvania. This section clearly does not by its terms require the showing of undue burden which the P. U. C. claims is mandatory to bind the state here. Indeed, when a(1) is compared with a(2), adopted at the same time, it is evident that Congress did not intend to require such a showing under a(1). In contrast, a(2) which embraces "any train or ferry operated wholly within the boundaries of a single state" specifically requires, inter alia, as a prerequisite to relief thereunder, a finding after an adversary type of hearing that the continued operation or service of the train or ferry without discontinuance or change in whole or in part would constitute an unjust and undue burden upon the interstate operations of the carrier. It would thus fly in the face of the evident Congressional intent to construe a(1) to require the I. C. C. to grant in this case a hearing at which the issues of undue burden on or interference with interstate commerce would be tried by the I. C. C. in a full adversary proceeding. We do not so construe it.

We are therefore required to examine the P. U. C. contention that Congress under § 13a(1) cannot constitutionally authorize discontinuances of intrastate train operations (two or more stops within a state) which are a part of an interstate train service without itself finding or providing for a finding that the intrastate operations are a burden on or interference with interstate commerce.

We commence from the established and governing law announced in State of New Jersey v. United States, 168 F. Supp. 324, (D.C.N.J.1958), aff'd., 359 U.S. 27, 79 S.Ct. 607, 3 L.Ed.2d 625, (1959). That case involved a ferry which operated between New Jersey and New York to service trains on the West Shore Line of the New York Central Railroad. The United States Supreme Court affirmed the district court decision holding, inter alia, that the procedure incorporated in § 13a(1) was constitutional, at least on the facts there involved. The P. U. C. says the case is distinguishable because it involved a ferry which operated only in interstate commerce whereas in our case the trains operated in both interstate and intrastate commerce. While we think the force of New Jersey v. U. S. is greater than counsel for the P. U. C. would concede, it is certainly true that the factual distinction suggested by the P. U. C. does exist between the New Jersey case and ours. The question here is whether that distinction makes the difference.

The P. U. C.'s counsel contends that a fair reading of certain United States Supreme Court cases reveals a limitation on Congress' power under the commerce clause when it is exercised so as to affect intrastate commerce. It says that in such situations the Congress must either itself find that the particular intrastate activity is an undue burden upon or interference with interstate commerce or provide for such a finding after a full hearing. We do not understand that the Railroad quarrels with this contention. Rather, it says that we are concerned solely with the application of congressional power over interstate commerce. The resolution of this conflict commences with an analysis of the legislation involved.

At the risk of repetition, it is important to understand the statutory scheme involved in § 13a(1) and (2). Section 13a(1) deals with trains and ferries "Operating from a point in one State to a point in any other state * * *". In contrast (2) embraces trains and ferries which are "operated wholly within the boundaries of a single state * *". As is noted in the House Report on this legislation, § 13a(1) gives the railroads an option to "have the Interstate Commerce Commission, rather than State commissions, pass upon the discontinuance or change in the operation or service of any train or ferry. This option is limited, however, to the operation or service of a train or ferry on a line of railroad not located wholly within a single state." 2 U.S.Code Cong. & Legisl. News p. 3468 (1958). Section 13a(2), on the other hand, deals with purely intrastate operations. It protects the rights of the states "by leaving to the state regulatory agencies the right to regulate and have a final decision with respect to the discontinuance of train service which originated and ended within one particular state, except when it could be established that intrastate service was a burden on interstate commerce." 104 Cong.Rec. 15528. See also Southern R. Co. v. North Carolina, 376 U.S. 93, 84 S.Ct. 564, 11 L.Ed.2d 541 (1964); and State of New Jersey v. New York, S. & W. R. Co., 372 U.S. 1, 83 S.Ct. 614, 9 L.Ed.2d 541 (1962).

Reading § 13a(1) and (2) together with their legislative history makes it clear that under a(1) Congress was legislating with respect to all interstate train service. Thus, even the P. U. C. would presumably agree that by following the procedure outlined in a(1) the Railroad was entitled to discontinue the interstate service of the trains in question. But the P. U. C. says in effect that such an order could not affect the so-called intrastate aspect of their service without a finding in an adversary proceeding that the continuation of such service would be a burden upon or interference with interstate commerce.

Can it be said that an interstate train which serves more than one point within any state has an intrastate function which the Congress can regulate at the...