Union Pac. R. Co. v. Denver & Rio Grande Western R. Co.

• Decision Date: 18 July 1952
• Docket Number: No. 4427.,4427.
• Citation: 198 F.2d 854
• Parties: UNION PAC. R. CO. v. DENVER & RIO GRANDE WESTERN R. CO.
• Court: U.S. Court of Appeals — Tenth Circuit

198 F.2d 854 (1952)

UNION PAC. R. CO. v. DENVER & RIO GRANDE WESTERN R. CO.

No. 4427.

United States Court of Appeals Tenth Circuit.

July 18, 1952.

A. U. Miner, Salt Lake City, Utah (Bryan P. Leverich and M. J. Bronson, Salt Lake City, Utah, on the brief), for appellant.

W. Q. Van Cott, Salt Lake City, Utah (S. N. Cornwall and Dennis McCarthy, Salt Lake City, Utah, on the brief), for appellee.

Before PHILLIPS, Chief Judge, and BRATTON and HUXMAN, Circuit Judges.

BRATTON, Circuit Judge.

Section 1, paragraph (18) of the Transportation Act of 1920 forbids a carrier by railroad subject to the Act to undertake the extension of its line of railroad without first obtaining from the Interstate Commerce Commission a certificate of convenience and necessity; paragraph (20) empowers a court of competent jurisdiction at the suit of a party in interest to enjoin any construction contrary to the provisions of paragraph (18); and paragraph (22) provides among other things that the authority of the commission conferred by paragraphs (18) to (21), both inclusive, shall not extend to the construction of spur or industrial tracks, located or to be located wholly within one state. 41 Stat. 477-478, 49 U.S. C.A. § 1(18) (20) (22).

The Denver and Rio Grande Western Railroad Company, hereinafter referred to as Rio Grande, and Union Pacific Railroad Company, hereinafter referred to as Union Pacific, are railroad companies engaged as common carriers of passengers and freight in interstate commerce, and each operates a line of railroad in Salt Lake City, Utah. Union Pacific leases part of the property constituting its system, including that in Salt Lake City, but that fact has no present materiality and therefore reference will be made to such property as though it belonged to Union Pacific. The main line of Rio Grande in Salt Lake City extends southerly along Fourth West Street to Ninth South Street; at Ninth South it angles to the west to Fifth West Street; and it then proceeds southerly along the line of Fifth West Street toward Provo, Utah. The main line of the Provo Subdivision, as operated by Union Pacific, extends southerly along Third West Street between Second South and Ninth South; at Ninth South it angles to the east crosses Second West Street, strikes First West Street at a point between Eleventh and Twelfth South Streets; and then proceeds southerly along First West Street toward Provo. Rio Grande also owns and operates the Rio Grande-Bamberger interchange track which leaves the main line of Rio Grande at a point south of Seventeenth South Street, angles to the northeast, crosses the main line of Union Pacific at a point south of Thirteenth South Street, and then connects with the Bamberger electric railroad. There is an area between Ninth and Twenty-first South Streets, and between Second and Fourth West Streets, commonly referred to throughout this proceeding as the industrial area. It contains approximately two hundred and sixty-five acres and is located about one and one-half miles from the business center of Salt Lake City. Desiring to construct a track from a point on its main line southerly along Third West Street as existing and extended to Twenty-first South Street, Union Pacific obtained from the City Commission of Salt Lake City a franchise and from the Public Service Commission of Utah a permit. Denver & Rio Grande Western Railroad Co. v. Public Service Commission, Utah, 230 P. 2d 557. But it did not obtain from the Interstate Commerce Commission a certificate of convenience and necessity. Later Oregon Short Line Railroad Company, lessor of its line to Union Pacific, instituted and successfully maintained an action against Rio Grande to condemn a right-of-way across the tracks of the latter. Oregon Short Line Railroad Co. v. Denver & Rio Grande Western Railroad Co., Utah, 237 P.2d 829. Union Pacific commenced the construction of the track, referred to throughout this proceeding as the industrial lead track. It was to be approximately nine thousand feet in length and was to cross the interchange track owned and operated by Rio Grande as well as a spur track leading from such interchange track.

Rio Grande instituted this action against Union Pacific. The cause of action pleaded in the complaint was that since prior to 1890, the industrial area had been available for industrial development from the main line of Rio Grande; that since 1914, it had been available for such development from the interchange track; that it was not available to Union Pacific because it was infeasible to reach it from the main line of that company; that the industrial lead track would cost approximately $100,000; that it was unnecessary for public service; that it involved a waste of resources; that it would result in non-productive and injurious competition between the two companies; that it would cause damage and injury to Rio Grande in excess of $500,000 and would result ultimately in injury to the public; that it constituted an extension of the line of railroad of Union Pacific, within the meaning of paragraph (18), supra; and that no certificate of convenience and necessity for its construction had been obtained. The prayer was that Union Pacific be enjoined from proceeding with the construction of the track unless and until a certificate of convenience and necessity should be obtained. Union Pacific admitted that no certificate of convenience and necessity had been obtained for the construction of the track; denied that the industrial area was available to Rio Grande for industrial purposes from its main line and from the interchange track; denied that the area was not available to Union Pacific for purposes of industrial development from its main line, but admitted that due to increased traffic on Second West Street it was not as feasible to reach and serve such area from the company's main line as it was to extend trackage down Third West Street; denied that the track being constructed was an extension; denied that it was unnecessary for public interest; denied that it involved a waste of resources; denied that it would result in non-productive and injurious competition; and denied that it would cause injury and damage to Rio Grande, or would result ultimately in injury to the public.

The court found among other things that the industrial area was not then developed with industrial trackage except certain spur tracks; that it was expected in the near future that industries would locate in the area and would require industrial trackage for delivery and shipment of carload freight traffic; that the two railroad companies were in keen competition with each other in Salt Lake City for traffic in interstate commerce; that the industrial area was available for industrial development by Rio Grande by means of spur tracks extending from its main line and from its interchange track; that it was not available to Union Pacific for such industrial development by means of spur tracks extending from its main line, it not being feasible to reach such area by crossing Second West Street; that it was the intention of Union Pacific to extend the industrial lead track from Ninth South Street to Twenty-first South Street for the purpose of developing the area by inducing industries to locate and build therein and to receive railroad freight carload service of Union Pacific by the construction of spur tracks from the industrial lead track to such industries; that the industrial area constituted potentially and in the near future one of the richest industrial traffic producing areas in Utah; that the building of the industrial lead track and the development of the area in the manner proposed by Union Pacific would result in traffic being diverted from Rio Grande to Union Pacific with substantial losses to Rio Grande from freight revenues; and that the track when completed would cost approximately $62,000. And it was further found that Union Pacific did not then contemplate having any freight stations, loading stations, or station agents within the industrial area; that it did not propose to operate trains therein under train orders; that it did not contemplate furnishing any passenger service, express service, or mail service therein; and that it intended merely to furnish a switching service within the switching limits to such industries as had spur tracks connected to the industrial lead track. The court concluded that the industrial lead track as proposed to be built constituted an extension within the...