State of Nebraska v. United States

• Citation: 255 F. Supp. 718
• Decision Date: 17 June 1966
• Docket Number: Civ. A. 1020L.
• Parties: STATE OF NEBRASKA ex rel. NEBRASKA STATE RAILWAY COMMISSION, Plaintiff, v. UNITED STATES of America and Interstate Commerce Commission, Defendants, and Chicago and North Western Railway Company, Intervening Defendant, and Bloomfield Hatchery and Feed Mill, Inc., Carhart Lumber Company, doing business in Bloomfield, Nebraska, as Bloomfield Lumber Company, Holmquist Grain and Lumber Company of Bloomfield, Nebraska, Farmers Coop Elevator Company, of Bloomfield, Nebraska, Brockman Ready-Mix, Inc., of Bloomfield, Nebraska, Intervening Plaintiffs.
• Court: U.S. District Court — District of Nebraska

255 F. Supp. 718

STATE OF NEBRASKA ex rel. NEBRASKA STATE RAILWAY COMMISSION, Plaintiff, v. UNITED STATES of America and Interstate Commerce Commission, Defendants, and Chicago and North Western Railway Company, Intervening Defendant, and Bloomfield Hatchery and Feed Mill, Inc., Carhart Lumber Company, doing business in Bloomfield, Nebraska, as Bloomfield Lumber Company, Holmquist Grain and Lumber Company of Bloomfield, Nebraska, Farmers Coop Elevator Company, of Bloomfield, Nebraska, Brockman Ready-Mix, Inc., of Bloomfield, Nebraska, Intervening Plaintiffs.

Civ. A. 1020L.

United States District Court D. Nebraska.

June 17, 1966.

Wallace M. Rudolph, Sp. Asst. Atty. Gen. of Nebraska, Lincoln, Neb., for plaintiff.

Manny H. Smith, Washington, D. C., for defendants United States and Interstate Commerce Commission.

Stuart F. Gassner, Louis T. Duerinck, Chicago, Ill., and Michael T. Levy, Omaha, Neb., for intervening defendant, Chicago & N. W. Ry. Co. Wallace M. Rudolph, Lincoln, Neb., for intervening plaintiffs Bloomfield Hatchery and Feed Mill, Inc. and others.

Before JOHNSEN, Circuit Judge, and ROBINSON and VAN PELT, District Judges.

MEMORANDUM OPINION

VAN PELT, District Judge.

This is an action, pursuant to 28 U.S. C.A. §§ 2321-2325 and 28 U.S.C.A. § 2284, to set aside, vacate and annul an order of the Interstate Commerce Commission, dated June 24, 1965, in its Finance Docket 22661 permitting abandonment by the Chicago and North Western Railway Company of rail lines and operations. The order granted North Western a certificate of public convenience and necessity authorizing abandonment of (a) a line between Bloomfield and Randolph, Nebraska, a distance of 22.47 miles; and (b) operations under trackage rights over the line between Randolph and Laurel, Nebraska, a distance of 14.54 miles. As the Burlington Railroad owns and operates over the latter line, this portion of the order is not seriously contested.

The administrative proceedings, pursuant to 49 U.S.C.A. § 1(18), began on June 17, 1963 with North Western filing its application with the Commission for authority to abandon the above described lines and service. Notice was served upon the Governor of the State of Nebraska and the Nebraska Railway Commission on June 25, 1963. Hearings were held on October 23 and 24 at Norfolk, Nebraska. By a report and order served on January 9, 1964, the Examiner recommended that a certificate be issued, permitting the abandonment as requested by North Western.

Protestant, State of Nebraska Ex Rel Nebraska State Railway Commission, filed exceptions to the Examiner's report on February 9, 1964, to which North Western replied on March 1, 1964. In its exceptions, protestant, in essence, claimed only that the Examiner did not give proper weight to the economic effect the abandonment would have upon the communities along the line and that North Western, by consolidation of agency forces, could reduce operating expenses. The Finance Review Board, while affirming the conclusion that abandonment was justified, limited the authorization as to the Bloomfield-Randolph line to the abandonment of operations, not the physical abandonment of the line. The basis for the latter conclusion was that the owner-lessor of the Bloomfield-Randolph line, Chicago, St. P., M. & O. Ry. Co. (Omaha), was not a party to the proceedings. However, upon consideration by Division 3 of the Commission, 324 I.C.C. 405, the decision of the Examiner was upheld as to both lines, the Commission holding that the absence of Omaha did not deprive the Commission of its jurisdiction to authorize complete physical abandonment.

Protestant then petitioned Division 3 for reconsideration, which was denied on November 10, 1965. A petition for review by the full Commission was denied on December 10, 1965, thereby exhausting administrative remedies. See State of Arizona v. United States, 220 F.Supp. 337 (D.Ariz.1963). On January 14, 1966, the protestant filed the instant action. On January 21, 1966, the court allowed North Western to intervene as a party defendant. The court on May 6, 1966 allowed the following parties to intervene as plaintiffs: Bloomfield Hatchery and Feed Mill, Inc. of Bloomfield, Nebraska; Carhart Lumber Company, doing business in Bloomfield, Nebraska as Bloomfield Lumber Company; Holmquist Grain and Lumber Company of Bloomfield, Nebraska; Farmers Coop Elevator Company of Bloomfield, Nebraska; and Brockman Ready-Mix, Inc. of Bloomfield, Nebraska.

The case was argued and submitted to the three-judge court on April 15, 1966. In deciding this case, the court is cognizant of its scope of judicial review as provided in 5 U.S.C.A. § 1009, commonly known as § 10(e) of the Administrative Procedure Act. The United States Supreme Court in United States v. Pierce Auto Freight Lines, 327 U.S. 515, 536, 66 S.Ct. 687, 698, 90 L.Ed. 821, described the courts' function in these words:

"The function of the reviewing court is much more restricted. It is limited to ascertaining whether there is warrant in the law and the facts for what the Commission has done. Unless in some specific respect there has been prejudicial departure from requirements of the law or abuse of the Commission's discretion, the reviewing court is without authority to intervene."

When a Commission order lies within the scope of its statutory authority and based upon adequate findings which are supported by substantial evidence, it may not be set aside by a reviewing court, even if the court would have reached a different conclusion. See I. C. C. v. Union Pac. R. Co., 222 U.S. 541, 32 S. Ct. 108, 56 L.Ed. 308 (1912); Creston Grain & Lumber Co. Inc. v. United States, 214 F.Supp. 840 (D.Neb.1963).

Protestant initially contends that the Commission failed to consider all the proper elements or factors necessary in determining the public convenience and necessity in abandonment proceedings. Those elements are: (a) the economic effect of the abandonment upon the total community and not upon the affected protestant shippers alone; (b) the applicant railroad's general policy of abandoning branch lines; and (c) the applicant railroad's ability to absorb the losses. Coupled with this is the feasibility of adopting procedures to reduce losses.

In considering these factors, protestant contends first, that the Commission has the burden of investigating the effects of the abandonment upon the community and the validity of the claims of the parties, or, in the alternative, that North Western has the burden to prove absence of economic harm to the community. Second, protestant asserts that the record does not reasonably support the Commission's decision that abandonment was in the public interest.

Before examining protestant's individual contentions in detail, a brief and general commentary should be made concerning the Commission's authority and function in cases such as this. 49 U.S.C.A. §§ 1(18)-1(20) enumerates the Commission's function in an abandonment proceeding. Section 1(18), the relevant section here, confers upon the Commission exclusive jurisdiction to permit abandonment of branch lines whose operation and maintenance impose an undue burden on interstate commerce. The purpose of the section is to promote efficient and sound rail transportation. The Commission's function, in essence, is the balancing of the immediate and local interest of the community and the shippers against the broader public interest in freeing interstate commerce from undue burdens. Justice Brandeis described that function in this manner:

"The sole test prescribed is that abandonment be consistent with public necessity and convenience. * * * The benefit to one intrastate v. interstate commerce * * * must be weighed against the inconvenience and loss to which the other will thereby be subjected. Conversely, the benefits to particular communities and commerce of continued operation must be weighed against the burden thereby imposed upon other commerce. * * * The result of this weighing—the judgment of the Commission—is expressed by its order granting or denying the certificate." State of Colorado v. United States, 271 U.S. 153, 168, 46 S. Ct. 452, 456, 70 L.Ed. 878.

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