Transit Commission of State of New York v. United States

• Decision Date: 04 January 1932
• Docket Number: No. 498,498
• Citation: 284 U.S. 360,52 S.Ct. 157,76 L.Ed. 342
• Parties: TRANSIT COMMISSION OF STATE OF NEW YORK et al. v. UNITED STATES et al
• Court: U.S. Supreme Court

284 U.S. 360

52 S.Ct. 157

76 L.Ed. 342

TRANSIT COMMISSION OF STATE OF NEW YORK et al.

v UNITED STATES et al.

No. 498.

Argued Nov. 24, 25, 1931.

Decided Jan. 4, 1932.

Mr. George H. Stover, of New York City, for appellant Transit Commission of New York.

Mr. Charles Dickerman Williams, of New York City, for other appellants.

[Argument of Counsel from pages 361-362 intentionally omitted] Mr. John LordO'Brian, Asst. to the Atty. Gen., for appellees the United States and Interstate Commerce Commission.

Mr. Alfred A. Gardner, of New York City, for appellee Long Island R. co.

Mr. Justice ROBERTS delivered the opinion of the Court.

This appeal involves the validity of a certificate of public convenience and necessity of the Interstate Commerce Commission, permitting the abandonment by Long Island Railroad Company of a portion of its Whitestone branch. Separate bills were filed by appellants to enjoin action by the railroad and to adjudge the certificate void. They were consolidated and heard by a specially constituted district court.¹ The parties having stipulated that they had offered all the proofs they desired to present, the court refused an interlocutory injunction, and dismissed the bills.

The Long Island Railroad Company, chartered under the laws of New York, whose lines lie wholly within that state, transports passengers and freight in interstate commerce by the use of steam and electricity. Its Whitestone branch extends a distance of 4.7 miles from the Port Washington branch to the Flushing River, and thence to Whitestone Landing. The bulk of its passenger traffic is intrastate, and only a slight amount interstate; but it carries a considerable volume of freight, 75 per cent. of which is interstate. In these respects the branch is representative of conditions throughout the system. There are five passenger stations on the branch line-Flushing, which is much the largest, and four others beyond.

In January, 1928, the city of New York opened a rapid transit line connecting Flushing with Manhattan. There ensued a 33 per cent. decrease in the passenger revenue of the Whitestone branch; and its operating deficit of some $18,000 for 1927 increased to over $125,000 in 1928. There was a further decrease of over 26 per cent. in passenger revenue in the first five months of 1929.

On June 2, 1926, the Transit Commission pursuant to a program of grade crossing abolition ordered the elimination of four in and near Flushing. There are twelve such crossings on the entire branch, removal of all of which was in contemplation, and it was estimated that to remove them would cost about $4,000,000, the company's share being $2,000,000, which it could borrow from the state at from 4 to 5 per cent. interest. The elimination of the crossings would save $37,000 per year now spent for guarding them. On December 31, 1928, the total value of land and improvements on the portion of the branch sought to be abandoned was approximately $933,000.

The company did not appeal from the order, as it might have done, but formally offered to quitclaim to the city of New York that portion of the branch which is involved in this proceeding. The city did not accept the proffer. The effective date of the grade separation order was postponed to December 31, 1928, and upon the Transit Commission's refusal further to extend the time for compliance, the company, on January 10, 1929, filed with the Interstate Commerce Commission its application under section 1(18) of the Interstate Commerce Act, as amended by the Transportation Act of 1920,² for a certificate permitting the abandonment of the 4.1 miles of the branch extending from west of Flushing River to the terminus at Whitestone Landing. After interventions by the Transit Commission, the city of New York, and others, the matter was heard by an examiner, whose proposed report was the subject of argument before Division 4 of the Commission. It found in favor of the application, and ordered that a certificate issue.³

During the hearing the company proposed that it would substitute truck service for the freight traffic to be affected by the abandonment, and it would, if a franchise were granted it by the city of New York, inaugurate a passenger bus service to the towns on the branch, which would connect them with its station at Flushing and with the terminus of the city's rapid transit line to Manhattan.

A reargument was granted before the full Commission, which affirmed⁴ the report of Division 4. Since, however, the interveners expressed some doubt as to the com- pany's making satisfactory arrangements for bus service, the Commission indefinitely suspended the order to afford opportunity for negotiating the proposed bus franchise. The company promptly applied to the proper authorities, agreeing to take a grant terminable at short notice and on terms favorable both to the city and to the traveling public. No response was made to its offer and no action was taken on its application. After waiting five months it applied to the Commission to take final action, setting forth the neglect of the city to act in the matter. Thereupon the Commission ordered that its certificate should take effect 120 days from June 17, 1931.⁵

By their bills the state of New York and the Transit Commission challenge the power of the Interstate Commerce Commission to issue a certificate of public convenience and necessity in such a case as is here presented, and assert that if it has such power, the proofs do not warrant its action.

First. It is claimed that the certificate has as its sole basis the order of the State Transit Commission for the removal of grade crossings; that the latter was valid and within the state's constitutional right, regardless of its effect on interstate commerce, and that the Interstate Commerce Commission cannot destroy or impair this right, or hamper its exercise, by authorizing an...