West Virginia Motor Truck Ass'n v. PUBLIC SERVICE COM'N

• Decision Date: 15 November 1954
• Docket Number: Civ. No. 1525.
• Citation: 123 F. Supp. 206
• Court: U.S. District Court — Southern District of West Virginia
• Parties: WEST VIRGINIA MOTOR TRUCK ASS'N, Inc. v. PUBLIC SERVICE COMMISSION OF WEST VIRGINIA et al.

123 F. Supp. 206

WEST VIRGINIA MOTOR TRUCK ASS'N, Inc. v. PUBLIC SERVICE COMMISSION OF WEST VIRGINIA et al.

Civ. No. 1525.

United States District Court S. D. West Virginia, Charleston Division.

July 27, 1954.

Judgment Affirmed November 15, 1954.

David G. MacDonald, Washington, D. C. for West Virginia Motor Truck Ass'n, Inc.; Smith Transfer Corp., and Bell Lines, Inc.

John C. White, Charleston, W. Va. for C & D Motor Delivery Co.; Greig Freight Lines; Keystone Motor Exp.; Point Pleasant Transp. Co.; Pone Fork Truck Lines; Merchants Dispatch; and Grubb Motor Freight.

Amos Bolen (Fitzpatrick, Marshall, Huddleston & Bolen), Huntington, W. Va., Richard T. Wilson, Jr., Richmond, Va., for defendant Chesapeake & O. Ry. Co.

John G. Fox, Atty. Gen., Robert E. Magnuson, Asst. Atty. Gen., for Public Service Commission of W. Va.

Before DOBIE, Circuit Judge, and WATKINS and MOORE, District Judges.

Judgment Affirmed November 15, 1954. See 75 S.Ct. 125.

DOBIE, Circuit Judge.

Plaintiffs, West Virginia Motor Truck Association and various motor truck operators in West Virginia, filed this civil action in the United States District Court for the Southern District of West Virginia, to enjoin and restrain the enforcement and execution of a certain order of the Public Service Commission of West Virginia (hereinafter called the Commission).

Chesapeake and Ohio Railway Company (hereinafter called C. & O.) filed an application with the Commission seeking a certificate of public convenience and necessity authorizing operation as a motor common carrier of property in intrastate commerce over certain routes and between specified points in West Virginia. The Commission, under its interpretation of Article 2, Section 5, of the West Virginia Motor Carrier Law, Code, 24A-2-5, denied the application. For this denial, the Commission gave as its reasons, among others: "In the majority of instances, applicant's proposed service would be practically identical to that now rendered by the existing motor carriers and that said service is not of such character as to be non-competitive with said motor carriers. * * * The evidence offered by the applicant in this case * * * is not sufficient to show that the motor vehicle service of the protestants is inadequate or insufficient."

On appeal, the Supreme Court of Appeals of West Virginia reversed the decision of the Commission and remanded the case to the Commission with directions that a certificate be issued to C. & O. Chesapeake & O. R. Co. v. Public Service Comm., 81 S.E.2d 700. A petition for rehearing was subsequently denied by the West Virginia Supreme Court of Appeals. The certificate now attacked before us was, accordingly, issued to C. & O. by the Commission. It seems that the federal question, which forms the basis for the instant civil action, was not raised in the original appeal to the Supreme Court of Appeals of West Virginia; but it was specifically raised in the petition for rehearing filed in, and denied by, that Court.

Plaintiffs, with the exception of West Virginia Motor Truck Association, allege that Article 2, Section 5, of the Motor Carrier Law of West Virginia, as that section is interpreted by the Supreme Court of Appeals of West Virginia, denies to them and all intrastate motor common carriers similarly situated the equal protection of the laws in violation of the provisions of Amendment XIV to the Constitution of the United States, in that:

(a) Railroad applicants for motor carrier certificates of public convenience and necessity are relieved of the burden of establishing as a condition precedent to the issuance of such a certificate that the service furnished by existing transportation facilities is not reasonably efficient and adequate.

(b) Motor carrier applicants for enlargement, modification, or extension of their certificates of public convenience and necessity are required to demonstrate as a condition precedent to the issuance of such certificate that the service furnished by existing transportation facilities (including rail facilities) is not reasonably efficient and adequate.

(c) Under motor common carrier certificates of public convenience and necessity, existing motor common carriers no longer have the protection of law against unwarranted invasions of unneeded rail-owned motor carrier operations over routes and in areas presently being served adequately, efficiently, and satisfactorily by motor carrier. Rail operations over rail lines, however, notwithstanding the essentially different character of service involved, enjoy the continued protection against the institution of new motor carrier services where inadequacy in rail service is not shown by a motor carrier applicant.

(d) There is here an unreasonable and arbitrary discrimination in favor of railroad applicants for motor carrier operating authority and against motor carrier applicants for such authority.

Plaintiffs further allege that the order of the Public Service Commission of West Virginia is in contravention of the equal protection clause of Amendment XIV to the Constitution of the United States in that the order granting the rail application was issued in the absence of any showing by the railroad applicant that the service furnished by existing transportation facilities is not reasonably adequate and efficient as is required of all other applicants for motor carrier operating authority. Thus the action of the Public Service Commission discriminates unreasonably, arbitrarily, and unlawfully in favor of railroad applicants for West Virginia intrastate motor common carrier operating authority. The issuance of the certificate to the rail applicant on the lesser measure or lower standards of proof of public convenience and necessity constitutes preferential treatment for railroad applicants for motor carrier authority and unjustly discriminates against motor common carriers.

Plaintiffs, with the exception of West Virginia Motor Truck Association, further aver that their respective certificates of public convenience and necessity authorizing intrastate motor common carrier operations in West Virginia are things of great value and as such constitute an important property right within the protection of the Fourteenth Amendment to the Constitution of the United States.

Plaintiffs further aver that Section 5 of Article 2 of the West Virginia Motor Carrier Act as construed by the Supreme Court of Appeals of West Virginia and as applied by the Commission involves a taking of their property without due process of law in that:

(a) It permits the authorization of rail-operated motor carrier service directly competitive with theirs in the absence of a showing of inadequacy or inefficiency in existing services.

(b) The institution of an unneeded new competitive service will necessarily deprive them of business which they would otherwise obtain from shippers and receivers of freight moving in intrastate commerce in West Virginia.

Plaintiffs further contend that if C. & O. exercises the authority issued to it in the order of the Commission, plaintiffs will be subjected to irreparable loss and damage through the diversion of traffic from their systems to the motor carrier operations to be instituted by C. & O.; that the continuation of certain plaintiffs' motor carrier operations would be seriously threatened and all plaintiffs would suffer the loss of substantial revenue from intrastate motor carrier operations in West Virginia; that such loss of West Virginia intrastate traffic will necessarily adversely affect the ability of certain plaintiffs to continue operations in interstate as well as intrastate operations, and will seriously impair their ability adequately and efficiently to serve the shipping public; and that unless this Court grants the relief herein prayed for, plaintiffs will suffer irreparable injury for which they have no adequate remedy at law.

Two defenses to this civil action have been set up: (1) Res adjudicata; and (2) Lack of merit in the federal constitutional questions set up by the plaintiffs. Either defense, if valid, would constitute a complete bar. Since we think both of these defenses are valid, the instant civil action must be dismissed.

We consider first the plea of res adjudicata, which involves several phases. As we have indicated, the federal constitutional questions were not urged in the original appeal to the Supreme Court of Appeals of West Virginia, but they were raised on the petition for rehearing filed in that Court. Thus, C. & O. insists, this denial of the petition for rehearing was res adjudicata as to these federal questions and the only recourse then left to plaintiffs was to seek relief at the hands of the United States Supreme Court.

"Again, the federal question should be raised before the decision of the case by the highest state court, and the raising of the question on motion for rehearing in that court will not suffice when this motion is merely denied; but, if on such motion this court specially passes on the federal question, then it is regarded as being properly raised." Dobie on Federal Procedure, page 888.

See, also, Citizens National Bank of Cincinnati v. Durr, 257 U.S. 99, 42 S.Ct. 15, 66 L.Ed. 149; Barbour v. State of Georgia, 249 U.S. 454, 39 S.Ct. 316, 63 L.Ed. 704; St. Louis & San Francisco Railway Co. v. Shepherd, 240 U.S. 240, 36 S.Ct. 274, 60 L.Ed. 622; Mallers v. Commercial Loan & Trust Co., 216 U.S. 613, 30 S.Ct. 438, 54 L.Ed. 638; Sullivan

v. State of Texas, 207 U.S. 416, 28 S.Ct. 215, 52 L.Ed. 274; Leigh v. Green, 193 U.S. 79, 24 S.Ct. 390, 48 L.Ed. 623; Mallett v. State of North Carolina, 181 U.S. 589, 21 S.Ct. 730, 45 L.Ed. 1015; Pim v. City of St. Louis, 165 U.S. 273, 17 S.Ct. 322, 41 L.Ed. 714; Sayward v. Denny, 158 U.S. 180, 15 S.Ct. 777, 39 L.Ed. 941; Miller v. State of Texas, 153 U.S. 535, 14 S.Ct. 874, 38 L.Ed. 812.

In the instant case, the Supreme Court of Appeals of West Virginia necessarily had before it the...