Utah Citizens Rate Association v. United States

• Decision Date: 06 January 1961
• Docket Number: Civ. No. C-58-60.
• Citation: 192 F. Supp. 12
• Court: U.S. District Court — District of Utah
• Parties: UTAH CITIZENS RATE ASSOCIATION, and Structural Steel & Forge Co., Plaintiffs, v. UNITED STATES of America and Interstate Commerce Commission, Defendants, The Denver and Rio Grande Western Railroad Company, Union Pacific Railroad Company, Southern Pacific Company, The Western Pacific Railroad Company, Utah Railway Company, Tooele Valley Railway Company, Salt Lake Garfield and Western Railway Company, The Ogden Union Railway and Depot Company, Intervening Defendants.

192 F. Supp. 12

UTAH CITIZENS RATE ASSOCIATION, and Structural Steel & Forge Co., Plaintiffs, v. UNITED STATES of America and Interstate Commerce Commission, Defendants The Denver and Rio Grande Western Railroad Company, Union Pacific Railroad Company, Southern Pacific Company, The Western Pacific Railroad Company, Utah Railway Company, Tooele Valley Railway Company, Salt Lake Garfield and Western Railway Company, The Ogden Union Railway and Depot Company, Intervening Defendants.

Civ. No. C-58-60.

United States District Court D. Utah, Central Division.

November 2, 1960.

On Motion to Alter or Amend Judgment January 6, 1961.

COPYRIGHT MATERIAL OMITTED

Calvin L. Rampton (Pugsley, Hayes, Rampton & Watkiss), Salt Lake City, Utah, for plaintiffs.

John H. D. Wigger, Washington, D. C. (Robert A. Bicks, Washington, D. C., and A. Pratt Kesler, Salt Lake City, Utah, with him on the briefs), for defendant, The United States.

C. H. Johns, Jr., Assoc. Gen. Counsel, I. C. C., Washington, D. C. (Robert W. Ginnane, Gen. Counsel, Washington, D. C., with him on the briefs), for the defendant, Interstate Commerce Commission.

A. U. Miner, and L. W. Hobbs, Salt Lake City, Utah (Bryan P. Leverich, Salt Lake City, Utah, Elmer B. Collins, Omaha, Neb., Ernest P. Porter, Denver, Colo., Albert R. Bowen, Arthur A. Allen, Jr., and S. N. Cornwall, Salt Lake City, Utah, with them on the briefs, for intervening defendant carriers.

Before LEWIS, Circuit Judge, and CHRISTENSON and CHILSON, District Judges.

CHRISTENSON, District Judge.

Plaintiffs, pursuant to procedure prescribed in 28 U.S.C. §§ 1336, 1398, 2284 and 2321-2325, seek by this action to have set aside an order of the Interstate Commerce Commission which requires the railroads operating in Utah to increase, with certain exceptions, Utah intrastate freight rates in correspondence with increased interstate rates approved by the Commission in three nationwide revenue proceedings designated as Ex Parte Nos. 175, 196 and 206.

Two principal questions are presented for determination by this Court: (1) whether plaintiffs in the present proceedings have standing to question the validity of the findings and order of the Commission; and if so, (2) whether such findings and order are supported by substantial evidence.

Interstate freight rates were increased nationwide by the Interstate Commerce Commission in its Ex Parte No. 175, 284 I.C.C. 589, 280 I.C.C. 179, 281 I.C.C. 557. The Public Service Commission of Utah refused to allow similar increases on intrastate traffic. A Thirteenth Section investigation and hearing were conducted by the Interstate Commerce Commission upon which it issued a report, 297 I.C.C. 87, and later an order, directing that intrastate freight rates in Utah be increased to comport with increases granted interstate in Ex Parte No. 175. This order was sustained by a three-judge court in this district, Public Service Commission of Utah v. United States, D.C. Utah 1956, 146 F.Supp. 803. On May 19, 1958, the Supreme Court of the United States on appeal reversed. Public Service Commission of Utah v. United States, 1958, 356 U.S. 421, 78 S.Ct. 796, 2 L.Ed. 2d 886. Pursuant to the mandate, it was thereupon directed by this Court that the Commission's order be set aside and that the cause be remanded to the Interstate Commerce Commission for further proceedings in conformity with the Supreme Court's opinion.

In the meantime, in Ex Parte No. 196, 298 I.C.C. 279, and again in Ex Parte No. 206, 299 I.C.C. 429 and 300 I.C.C. 633, the Interstate Commerce Commission authorized additional rate increases on interstate traffic. A further Thirteenth Section investigation was instituted and administrative hearings were held. The Commission, on December 7, 1959, issued its report in the combined proceedings (Docket Nos. 31484 and 32253) in which it allowed the Public Service Commission of Utah thirty days in which to approve the increases held required to remove the burden upon interstate commerce. Within this time the Public Service Commission of Utah notified the Interstate Commerce Commission that it would not enter such an order. The Utah Citizens Rate Association filed a petition for rehearing and reconsideration with the Interstate Commerce Commission. On March 17, 1960, the Commission issued its order, assailed in this proceeding, denying the petition for rehearing and reconsideration, and requiring the railroads to establish, effective May 13, 1960, the increased rates and charges for intrastate transportation within the State of Utah in accordance with the findings contained in its report.

Utah Citizens Rate Association initially brought this action as sole party plaintiff. Its capacity and standing to raise the issue here involved were questioned by the defendants. We granted leave to the Association to join as a party plaintiff, Structural Steel and Forge Company, a substantial shipper in Utah intrastate commerce. Defendants assert that even with this addition, the plaintiffs have no legal standing to maintain this action to set aside a general revenue order of the Commission.

Lack of statutory capacity to sue may disempower an association from maintaining such an action as this. Moffat Tunnel League v. United States, 1933, 289 U.S. 113, 53 S.Ct. 543, 77 L.Ed. 1069. Neither the general capacity to sue and be sued vested in the Utah Citizens Rate Association as a non-profit corporation by Utah Code Annotated 1953, §§ 16-6-1, 16-6-8, nor its statutory authorization to appear as a party or to intervene herein by virtue of 28 U.S.C. § 2323, affords standing for it to maintain an action to enjoin the Commission's order. Pittsburgh & W. Va. Ry. Co. v. United States, 1930, 281 U.S. 479, 50 S.Ct. 378, 74 L.Ed. 980, and Alexander Sprunt & Son, Inc. v. United States, 1930, 281 U.S. 249, 50 S.Ct. 315, 74 L.Ed. 832; cf. Chicago Junction Case, 1924, 264 U.S. 258, 267-268, 44 S.Ct. 317, 320, 68 L.Ed. 667, and Merchants' & Manufacturers' Traffic Ass'n of Sacramento v. United States, D.C., 231 F. 292, reversed other grounds 1916, 242 U.S. 178, 37 S. Ct. 24, 61 L.Ed. 233. This is for the reason that it possesses no legal right or interest that would be injuriously affected by the order.

The reason and result, however, do not pertain to plaintiff Structural Steel and Forge Company. The distinction is clearly established in Alexander Sprunt & Son, Inc. v. United States, supra, in which the following cases allowing the maintenance of similar actions by those directly affected are distinguished by the court in connection with its denial of relief to parties with only an indirect or sentimental interest. United States v. Village of Hubbard, Ohio, 1925, 266 U.S. 474, 45 S.Ct. 160, 69 L.Ed. 389; Chicago Junction Case, supra; Skinner & Eddy Corporation v. United States, 1919, 249 U.S. 557, 39 S.Ct. 375, 63 L.Ed. 772; Interstate Commerce Commission v. Diffenbaugh, 1911, 222 U.S. 42, 32 S.Ct. 22, 56 L.Ed. 83. In the last cited cases standing was recognized on the part of shippers or others directly affected by the orders of the Commission. Compare Jersey City v. United States, D.C.N.J.1950, 101 F. Supp. 702, pressed upon us by the defendants, where Judge Maris, for the Court, pointed out that the plaintiff had not shown that any of its rights as a municipal corporation would be adversely affected by the Commission's order. Moreover, the foundational power to adopt and enforce statewide revenue orders affecting intrastate rates is involved. See Skinner & Eddy Corporation v. United States, supra, and the Utah rate case. To deny the standing of a shipper to be heard as to the validity of the Commission's order would do violence to the very base of constitutional government, the power of those directly aggrieved by claimed illegal action to be able to invoke judicial power against it.

We conclude that the plaintiff shipper has standing to maintain this action under the party in interest criterion of 28 U.S.C. § 2323 and under the person adversely affected or aggrieved standard of § 10(a) of the Administrative Procedures Act, 5 U.S.C.A. § 1009(a). See American Trucking Ass'ns v. United States, 1960, 364 U.S. 1, 80 S.Ct. 1570, 4 L.Ed.2d 1527; Garden City Floral v. United States, D.C.Mont.1956, 143 F. Supp. 609.

What already has been said largely disposes also of the question of the exhaustion of administrative remedies raised by the defendants. The so-called saving clause in the Commission's order,¹ asserted by the defendants as the appropriate and only remedy open to plaintiffs, is not applicable where the validity of the entire state-wide revenue order is called into question on jurisdictional grounds. In this position, as in our sustaining of the shippers standing to raise the question, the procedurally parallel case of Garden City Floral v. United States, supra, supports us, although we doubt that the Association itself would have standing to raise the question. The following cases primarily relied upon by defendant to demonstrate that "the plaintiffs have mistaken their remedy in the statutory scheme of railroad rate-making", and that they should await a more appropriate occasion to complain pursuant to the saving clause of the order, are not in point: Georgia Public Service Commission v. United States, 1931, 283 U.S. 765, 51 S.Ct. 619, 75 L.Ed. 1397; Algoma Coal & Coke Co. v. United States, D.C.Va.1935, 11 F. Supp. 487; and Koppers Company v. United States, D.C.Pa.1955, 132 F.Supp. 159. Algoma and Koppers involved merely permissive rates on selected commodities in interstate commerce. In Georgia, language quoted by the defendants does indeed indicate that the plaintiffs there would not be heard to attack a statewide order governing "a vast multitude of rates" (even though among the plaintiffs there was the Georgia Public Service Commission as well as intervening shippers). But the attack, so precedurally rejected, was upon the basis of "possible uncertainty of application in isolated...