Southern Pac. Co. v. Railroad Commission of California, 3683.

• Citation: 10 F. Supp. 918
• Decision Date: 06 May 1935
• Docket Number: No. 3683.,3683.
• Parties: SOUTHERN PAC. CO. v. RAILROAD COMMISSION OF CALIFORNIA et al. (BROTHERHOOD OF RAILROAD TRAINMEN et al., Interveners).
• Court: U.S. District Court — Northern District of California

10 F. Supp. 918

SOUTHERN PAC. CO. v. RAILROAD COMMISSION OF CALIFORNIA et al. (BROTHERHOOD OF RAILROAD TRAINMEN et al., Interveners).

No. 3683.

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

May 6, 1935.

Guy V. Shoup, Henley C. Booth, and Burton Mason, all of San Francisco, Cal., for plaintiff.

Ira H. Rowell, Roderick B. Cassidy, and Frank B. Austin, all of San Francisco, Cal., for defendant Railroad Commission of California.

M. Mitchell Bourquin, of San Francisco, Cal., for interveners.

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

ST. SURE, District Judge.

This is a suit in equity brought by the Southern Pacific Company, seeking to enjoin the enforcement of an order of the State Railroad Commission. The Brotherhood of Railroad Trainmen complained to the commission that the rules and practices of the Southern Pacific Company in operating freight trains in the Sierra Nevada Mountains from Roseville, Cal., to the Nevada state line subjected train crews to unreasonable hardship and danger. After a hearing, the commission issued the following order:

"It is hereby ordered that during the period between October 1st and March 31st, each year, the Southern Pacific Company equip all freight trains in excess of 57 cars, exclusive of the rear caboose, operating in both easterly and westerly directions on that part of its line between Roseville, California, and the California-Nevada state line with an additional caboose car to be placed approximately midway between the rear caboose and the leading engine of said train; and

"It is hereby further ordered that the Southern Pacific Company so modify its rules in respect to the duties of trainmen as to permit of the reasonable and necessary use of caboose cars by members of the train crew."

Hearing was had before a statutory three-judge court (section 266, Judicial Code, 28 USCA § 380), and an interlocutory injunction was granted. The suit was referred to one of the members of this court as special master, who heard the evidence and transmitted the transcript thereof to this court. Final hearing and arguments were had, and the case is now ready for decision.

The issues may be briefly stated as follows: Plaintiff alleges that the order interferes with and places an undue burden upon interstate commerce, and that the order is so vague and uncertain as to render it unreasonable and arbitrary, and therefore violates the commerce clause of the Constitution (article 1, § 8, cl. 3).

The commission's defense is that the extreme and unusual condition of weather during the winter months and the topography of the country covered by the order justified its issuance in the interest of public health and safety; that the order is not capricious or arbitrary.

Said interveners as parties interested in sustaining the order of defendant commission participated in the hearing, and the conclusions reached herein are also applicable to them.

The pleadings and the undisputed evidence establish that the plaintiff is a common carrier engaged in interstate commerce, and is subject to the regulations of the Public Utilities Act of the state of California (St. Cal. 1915, p. 115, as amended), and of the act of Congress known as the Interstate Commerce Act (49 USCA § 1 et seq.); that the defendant commission is the duly constituted board, consisting of five members, which administers the regulatory powers over public utilities in the state; that intervener Brotherhood of Railroad Trainmen is a labor organization composed of trainmen employed in train and yard service of railroads in various parts of the United States; intervener Harry See is a citizen and resident of California, and is an official of said brotherhood, having the title of "state representative"; that plaintiff operates a line of railroad between and in the several Western states, among them California and Nevada; that the line involved in this controversy runs from Oakland, Cal., in a general easterly direction across the Sierra Nevada Mountains and the boundary line common to California and Nevada; that said railroad line passes through Roseville (a division point 18 miles northeast of Sacramento), Emigrant Gap, Andover, and Truckee, Cal., and on into Reno and Sparks, Nev., the latter station also a division point. The line is double tracked between Roseville and Sparks. Two-tenths of a mile west of the state boundary line plaintiff has established a station called Calvada. This station has no switching facilities for making up or breaking up trains; nor is it a station where freight is received for shipment or delivered. From Calvada to Sparks is 17.6 miles. It was shown that 94 per cent. of the freight trains passing over this line consist of 57 cars or more, the general average being approximately 80; that, of all of the freight trains passing over the line in 1933 during the six months covered by the order, 93.85 per cent. of the cars in eastbound traffic, and 98.36 per cent. of the cars in westbound traffic, were interstate. There was not a single train during that period that was wholly intrastate.

Preliminarily the defendant commission urges that it is not within the function of this court "to review the evidence for the purpose of determining whether it would have reached some other conclusion * * * nor to substitute its judgment for that of the Commission." A rule for our guidance is found in Mugler v. Kansas, 123 U. S. 623, 661, 8 S. Ct. 273, 297, 31 L. Ed. 205: "If, therefore, a statute order purporting to have been enacted to protect the public health, the public morals, or the public safety, has no real or substantial relation to those objects, or is a palpable invasion of rights secured by the fundamental law, it is the duty of the courts to so adjudge, and thereby give effect to the constitution."

That the commerce clause of the Constitution (article 1, § 8, cl. 3) has conferred upon Congress full power to regulate interstate commerce is all but elementary, and any attempt by a state to interfere with such exclusive regulation has been held unconstitutional and void. Simpson v. Shepard (Minnesota Rate Case), 230 U. S. 352, 33 S. Ct. 729, 57 L. Ed. 1511, 48 L. R. A. (N. S.) 1151, Ann. Cas. 1916A, 18; Wilmington Trans. Co. v. Railroad Commission of California, 236 U. S. 151, 154, 35 S. Ct. 276, 59 L. Ed. 508; Oregon-Washington R. & N. Co. v. State of Washington, 270 U. S. 87, 46 S. Ct. 279, 70 L. Ed. 482. "The general principles governing the exercise of state authority when interstate commerce is affected are well established," said Chief Justice Hughes in the Minnesota Rate Case, supra, 230 U. S. 352, at pages 398, 399, 33 S. Ct. 729, 739. "The power of Congress to regulate commerce among the several states is supreme and plenary. It is `complete in itself, may be exercised to its utmost extent, and acknowledges no limitations, other than are prescribed in the Constitution.' Gibbons v. Ogden, 9 Wheat. 1, 196, 6 L. Ed. 23. * * *

"This reservation to the states manifestly is only of that authority which is consistent with, and not opposed to, the grant to Congress. There is no room in our scheme of government for the assertion of state power in hostility to the authorized exercise of Federal power. The authority of Congress extends to every part of interstate commerce, and to every instrumentality or agency by which it is carried on; and the full control by Congress of the subjects committed to its regulation is not to be denied or thwarted by the commingling of interstate and intrastate operations. This is not to say that the nation may deal with the internal concerns of the state, as such, but that the execution by Congress of its constitutional power to regulate interstate commerce is not limited by the fact that intrastate transactions may have become so interwoven therewith that the effective government of the former incidentally controls the latter. This conclusion necessarily results from the supremacy of the national power within its appointed sphere. Citing cases.

"The grant in the Constitution of its own force, that is, without action by Congress, established the essential immunity of interstate commercial intercourse from the direct control of the states with respect to those subjects embraced within the grant which are of such a nature as to demand that, if regulated at all, their regulation should be prescribed by a single authority. It has repeatedly been declared by this court that as to those subjects which require a general system or uniformity of regulation, the power of Congress is exclusive."

The commission contends that the order was not directed at interstate commerce, and that it has no extraterritorial effect.

In determining the validity of a statute, courts are not bound by the form. It is their duty to look at the substance. The order is to be determined in the light of its effect upon interstate commerce. In the Minnesota Rate Case, supra, the acts and orders prescribed by the state commission applied solely to intrastate commerce, but, despite this obvious purport, their inevitable effect was the basis of the court's decision on one branch of the case.

Plaintiff challenges the order upon the ground of its extraterritorial effect. While the order designates only intrastate lines, it has a direct bearing on interstate commerce. Defendant commission, appreciating that in practical operation the order would have extraterritorial effect, said in its decision:

"Legally, of course, any order made by this Commission must be limited to intrastate train operations. Since the company does not now have trackage facilities at Calvada adequate to permit of the addition or withdrawal of a caboose from trains at this point, it would be compelled, if the work is to be done there, to construct such facilities. The estimated cost of construction is $6,700.00. The delay occasioned there by the necessary switching would be approximately thirty minutes. Practically,...