State of North Carolina v. United States

• Citation: 210 F. Supp. 675
• Decision Date: 19 October 1962
• Docket Number: No. C-158-D-62.,C-158-D-62.
• Court: U.S. District Court — Middle District of North Carolina
• Parties: STATE OF NORTH CAROLINA; Duke University; The Durham Chamber of Commerce, Incorporated; Research Triangle Institute; Erwin Mills, Inc.; and Mary Trent Semans, Plaintiffs, v. UNITED STATES of America; Interstate Commerce Commission; and Southern Railway Company, Defendants.

210 F. Supp. 675

STATE OF NORTH CAROLINA; Duke University; The Durham Chamber of Commerce, Incorporated; Research Triangle Institute; Erwin Mills, Inc.; and Mary Trent Semans, Plaintiffs, v. UNITED STATES of America; Interstate Commerce Commission; and Southern Railway Company, Defendants.

No. C-158-D-62.

United States District Court M. D. North Carolina, Durham Division.

October 19, 1962.

COPYRIGHT MATERIAL OMITTED

Thomas Wade Bruton and Charles W. Barbee, Raleigh, N. C., for State of North Carolina.

E. C. Bryson, Durham, N. C., for Duke University.

F. Gordon Battle and Victor S. Bryant, Durham, N. C., for Durham Chamber of Commerce and Research Triangle.

A. H. Graham, Jr., Durham, N. C., for Erwin Mills.

E. C. Brooks, Jr., Durham, N. C., for Mary Trent Semans.

H. Neil Garson, Washington, D. C., and William H. Murdock, Dist. Atty., for the United States.

H. Neil Garson, Washington, D. C., for Interstate Commerce Commission.

Joyner & Howison, Raleigh, N. C., Major L. P. McLendon, Greensboro, N. C., James A. Bistline, Washington, D. C., and Earl E. Eisenhart, Jr., Washington, D. C., for Southern Ry. Co.

Before BELL, Circuit Judge, and CRAVEN and PREYER, District Judges.

PREYER, District Judge.

This is an action brought under Title 28 U.S.C. § 1336, in accordance with Title 28 U.S.C. §§ 1938, 2284 and 2321-2325. Its purpose is to set aside and enjoin enforcement of an order of the ICC granting Southern Railway Co. the right to discontinue all remaining passenger service between Greensboro, N. C. and Goldsboro, N. C. Acting under Title 49 U.S.C. § 13a(2)¹, the Commission found that (1) the present or future public convenience and necessity permit such discontinuance, and (2) continuance of the operation would constitute an unjust and undue burden on interstate operations of the carrier and upon interstate commerce.

On July 18, 1959, Southern Railway Company filed a petition with the North Carolina Utilities Commission for discontinuance of its trains Nos. 13 and 16 which are the last passenger trains operating between Goldsboro and Greensboro, North Carolina. Actually, only one train is involved, it being designated No. 16 in one direction and No. 13 on the return trip.

Train No. 16 leaves Greensboro daily at 6:10 a. m., makes twelve regular stops and arrives in Goldsboro at 10:45 a. m. Its principal stops are Burlington, Durham, Raleigh, and Selma.

Train No. 13 leaves Goldsboro daily at 4:05 p. m. and arrives in Greensboro at 8:50 p. m. with similar stops along the route.

A sleeping car is attached to the train and by connection with other trains at Greensboro there is service to and from Washington, New York, and other major centers along the Eastern Seaboard.

These trains carry express but no freight or mail. The coaches have a capacity of 80 passengers. In addition, there is a 6 bedroom, ten-roomette sleeping car. There are six employees paid by the railroad servicing the train.

After hearings, the State Commission denied the application. Southern appealed to the North Carolina Superior Court, which affirmed the decision, and then to the Supreme Court of North Carolina which also affirmed. State ex rel. Utilities Comm. v. Southern R. R. Co., 254 N.C. 73, 118 S.E.2d 21 (1961).

On April 16, 1962, Southern filed a petition with the Interstate Commerce Commission under Section 13a(2) of the Interstate Commerce Act, again seeking authority to discontinue the trains. The State of North Carolina and the other protestants were allowed to intervene.

The entire records of the hearings before the North Carolina State Utilities Commission, the North Carolina Superior Court, and the North Carolina Supreme Court were made a part of the record for consideration by the Interstate Commerce Commission.

The proceedings were referred to an ICC Examiner who, after holding hearings, recommended that the discontinuance be allowed. On July 2, 1962, Division 3 of the ICC issued an Order adopting the findings and conclusions of the Examiner and authorizing the discontinuance of the trains. A petition for reconsideration was denied by the ICC. This action followed.

ISSUES DISMISSED

At the threshold of the case, plaintiffs raise certain legal questions which, if meritorious, would require dismissal of the ICC Order without reaching the substantive aspects of the case. Specifically, plaintiffs attack the constitutionality of section 13a(2); they claim a defect in the giving of notice of the discontinuance, as required by law; they contend that a lease from the North Carolina Railroad Corporation to the Southern Railway Company requires the continuance of these operations; and they claim that the decision of the North Carolina Supreme Court is res judicata on the issues, and that the ICC cannot make a contrary determination without a showing of changes in the surrounding circumstances that occurred after the North Carolina Supreme Court decision. We think all of these arguments are without merit.

Plaintiffs' attack on the constitutionality of section 13a(2) is without merit. The scope of the commerce power is such that there is little room for doubt of the constitutionality of an act allowing the ICC to eliminate intrastate operations that adversely affect interstate commerce. Gibbons v. Ogden, 9 Wheat. 1, 22 U.S. 1, 6 L.Ed. 23 (1824); Wickard v. Filburn, 317 U.S. 111 (118), 63 S.Ct. 82, 87 L.Ed. 122 (1942); Wisconsin R. R. Comm. v. Chicago, Burlington and Quincy R. R. Co., 257 U.S. 563, 589-590, 42 S.Ct. 232, 66 L.Ed. 371 (1922); Colorado v. United States, 271 U.S. 153, 163, 165-166, 46 S.Ct. 452, 70 L.Ed. 878 (1926). We find section 13a (2) constitutional.

As to plaintiffs' claim of a defect in notice, it is clear that the claim is based on an oversight by the ICC in failing to change a reference in 49 CFR 43.6 when 49 CFR 43.5 was amended and renumbered. Section 13a(2) merely requires that the ICC notify the Governor of the state in which the train is operating. No further notice is required under section 13a(2) or under the commission regulations. We find that all requirements pertaining to notice have been met.

Plaintiffs further allege that the discontinuance of the trains in question would constitute a breach of the Lease Agreement between the Southern Railway Company and the North Carolina Railroad Company, dated August 16, 1895, and, consequently, that it is unlawful for the ICC to authorize such discontinuance. But no obligation to require the Southern to operate passenger trains over the lines leased from the North Carolina Railroad can be unambiguously spelled out of the lease. Furthermore, this issue was not raised before the ICC, and it should not be raised here for the first time. Carolina Scenic Coach Lines v. United States et al., 56 F.Supp. 801, 803-804 (W.D.N.C.1944); Unemployment Compensation Comm. of Territory of Alaska v. Aragon, 329 U.S. 143, 155, 67 S.Ct. 245, 91 L.Ed. 136 (1946); Davis Administrative Law Treatise, Section 20.06. Besides, the paramount power of Congress to regulate interstate commerce forces even express charter or lease provisions to give way before it. This has been held many times and is no longer in question. Colorado v. United States, 271 U.S. 153, 165-166, 46 S.Ct. 452, 70 L.Ed. 878 (1926); Texas v. United States, 292 U.S. 522, 531, 54 S.Ct. 819, 78 L.Ed. 1402 (1934); Moeller v. Interstate Commerce Commission, 201 F.Supp. 583 (S.D.Iowa, 1962); Burke County, Georgia v. United States, 206 F.Supp. 586 (S.D.Georgia, 1962).

Plaintiffs also seek to invoke the doctrine of res judicata to bar the ICC from considering the question of public convenience and necessity, alleging that this issue has been determined by the North Carolina Supreme Court in State ex rel. Utilities Comm. v. Southern Railway Company, 254 N.C. 73, 118 S.E.2d 21 (1961). This position cannot be sustained. Res judicata is a common law device to prevent litigation of matters already litigated between the same parties or those in privity with them. United States v. California Bridge & Construction Co., 245 U.S. 337, 341, 38 S.Ct. 91, 62 L.Ed. 332 (1917). It is clear that a statute may change this common law rule. The statute before us, section 13a(2), provides "* * * Where the State authority having jurisdiction thereof shall have denied an application * * * for authority to discontinue * * *, the carrier * * * may petition the Interstate Commerce Commission for authority * * * the Commission may grant such authority only after a full hearing and upon findings by it * * *." Since the statute requires the ICC to hold full hearings and to make findings, after a state decision, it seems quite clear that Congress did not intend for the state hearing to have res judicata effect. Cf. Sprague v. Woll, 7 Cir., 122 F.2d 128 (1941); N. L. R. B. v. Pacific Intermountain Express Co., 8 Cir., 228 F.2d 170, 176 (1956). This interpretation is reinforced by the legislative history of section 13a(2) which shows that Congress was motivated by a belief that State authorities were unduly regressive in that they often required continuance of uneconomic and unnecessary service. (S. Rep. No. 1647, 85th Cong., 2d Sess. (1958), pp. 21-22, H.R.Rep. No. 1922, 85th Cong., 2d Sess. (1958), pp. 11-12), U.S.Code Cong. and Adm.News 1958, p. 3456. The conclusion follows that Congress did not intend the ICC to give State determinations res judicata of collateral estoppel effect.

We proceed to the substantive issue in the case.

ISSUES INVOLVED

The central issue in the case is whether the order of the ICC authorizing discontinuance of the two trains is warranted in law and is supported by adequate findings based on substantial evidence of record.

Judicial review of an order of the ICC is limited. We may not set aside the ultimate findings of the Commission unless they are unsupported by substantial evidence on the record considered as a whole, involve error of law, or are arbitrary or capricious or constitute an abuse of...