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Long Island Rail Road Co. v. New York Central Railroad Company.

July 21, 1960


Author: Friendly

Before: LUMBARD, Chief Judge, and MOORE and FRIENDLY, Circuit Judges.


Plaintiff railroads appeal, 28 U.S.C. § 1292(a)(1), from an order of the District Court for the Eastern District of New York, in an action under § 1(20) of the Interstate Commerce Act, 49 U.S.C. § 1(20), refusing to grant a temporary injunction against defendant New York Central's establishing truck and tractor-trailer service to a new freight depot of the Central at 10 Jay Street, Brooklyn, as proposed in tariff schedules filed with the Interstate Commerce Commission. Admittedly the Central has not obtained a certificate for the service under § 1(18) of the Interstate Commerce Act, 49 U.S.C. § 1(18); it says none is needed.

The island location of large parts of the New York metropolitan district and the mainland termination of the rail lines of many of the carriers serving it have long posed special problems to freight service in this area. Constructive and Off-Track Railroad Freight Stations, 156 I.C.C. 205 (1929), gives the history not only for Manhattan but for the entire New York terminal district. See also United States v. Baltimore & Ohio R.R., 231 U.S. 274 (1913), dealing, interestingly enough, with Jay Street. For decades the Central, whose rail lines terminate in the Bronx, Manhattan, and New Jersey, has conducted freight service to and from Brooklyn by a variety of land and water-borne vehicles. It has done this by serving a station (Wallabout Station) which was its own until 1934 and then a union station until 1941, by joint rates and routes with plaintiff Long Island, and by arrangements with the plaintiff Brooklyn terminal lines, as well as with Jay Street Connecting Railroad now abandoned, Jay Street Connecting Railroad Abandonment of Entire Line, 307 I.C.C. 137, aff'd, 174 F.Supp. 609 (E.D.N.Y. 1959). See also Meyers v. Jay St. Connecting R.R., 259 F.2d 532 (2d Cir. 1958).

The service here proposed by the Central was designed, at least in part, to enable it to reach the same part of Brooklyn formerly served in cooperation with the Jay St. Connecting Railroad. The service is between a warehouse, known as the Phoenix Warehouse, at the corner of John and Jay Streets, and the Central's railheads in Manhattan and New Jersey. Freight received from or delivered to consignors' or consignees' truckmen at the freight depot will be handled by truck between the depot and the railheads; tractor-trailers will be similarly accepted and delivered. The Central will pay for the haul between the depot and its team tracks; consignees or shippers will pay for transportation between the depot and their premises, plus a charge for loading or unloading at the team tracks.

The tariffs, originally filed to become effective June 21, 1959, were suspended by the Interstate Commerce Commission, I. & S. Docket No. 7193, upon plaintiffs' protest. In the proceedings before the Commission, plaintiffs attacked the Central's proposal on various grounds not here material, and plaintiff Long Island R.R. Co. raised the point here urged, namely, "that establishment of the proposed station would constitute an extension of a line of railroad within the meaning of section 1(18) of the act, and, consequently, is unlawful without prior application and the issuance of a certificate of convenience and necessity." On April 20, 1960, Division 2 filed a report finding "that the proposed schedules are not shown to be unlawful" and entered an order discontinuing the investigation and suspension proceeding. The Division found the Long Island's claim with respect to the need of a certificate under § 1(18) without merit, saying:

"It is well settled that the establishment or maintenance of motor-truck service by a common-carrier railroad does not constitute an extension of a line of railroad within the meaning of section 1(18) for which a certificate of convenience and necessity is required. Drayage and Unloading at Jefferson City, Mo., 206 I.C.C. 436, 439."

Thereupon plaintiffs brought this action under § 1(20) in the Eastern District of New York to enjoin what they claimed to be an unlawful operation by the Central. Judge Bartels issued a temporary restraining order pending his determination of plaintiffs' application for a preliminary injunction. The Central cross-moved to dismiss for lack of jurisdiction and for failure of the complaint to state a claim on which relief may be granted. On June 28, 1960, in a well-reasoned opinion, the judge overruled the Central's contention that under 28 U.S.C. § 2325 plaintiffs were required to sue before a three-judge court, 28 U.S.C. § 2284, but denied a preliminary injunction on the ground that plaintiffs had failed to establish sufficient probability of success. He also denied the Central's motion to dismiss for failure to state a cause of action; this is not before us. He continued the temporary restraining order for a brief period to permit plaintiffs to apply to this Court for an extension of it. Thereupon plaintiffs appealed from the denial of the preliminary injunction and sought an extension of the restraining order. Recognizing that the latter request raised substantially the same issues as the appeal itself and that the case was of public as well as private importance, the Court set the appeal for early argument and continued the temporary restraining order pending determination of the appeal.

Stations in St. Louis, 186 I.C.C. 578 (1932). The administrative construction is thus of long standing.

Appellants argue this administrative construction should not receive its customary weight because of the holdings, cited above in our discussion of the jurisdiction of the District Judge, that under § 1(20) the enjoining of extensions or abandonments which the Act prohibits without a certificate is for the courts rather than the Commission. However, it hardly follows from this that Congress would not wish the courts to give appropriate heed to a long-standing and consistent interpretation by the Commission in the discharge of duties confided to it. Section 1(18) cannot be deemed wholly forbidden ground to the Commission. Often the Commission must construe and apply § 1(18) directly, as it would have had to do here if the Central had petitioned for a certificate and then moved to dismiss the petition for want of jurisdiction, see Lehigh Valley R.R. Conditional Sale Contract, 233 I.C.C. 359 (1939); Davidson Transfer and Storage Co. First Mortgage, 282 I.C.C. 521 (1952). And, despite some of Mr. Justice Butler's language in Powell v. United States, supra, we cannot believe the Commission is under a mandate to remain mute in an investigation and suspension proceeding as to whether the tariff contemplates action which the Commission believes it will be bound to seek to enjoin under § 1(20). So far as concerns the relative roles of court and Commission, we see little distinction between § 1(18) and § 20a, relating to the issuance of securities. There also decision whether Commission authorization is needed is ultimately for the courts in civil or criminal proceedings, but weight has been given not only to positive administrative construction, United States v. New York, New Haven & Hartford R.R., 276 F.2d 525, 530-31 (2d Cir. 1959), cert. denied, 362 U.S. 961 (1960), but also to long-standing administrative inaction, United States v. Chicago North Shore & Milwaukee R.R., 288 U.S. 1 (1933).

Appellants also challenge the administrative construction on the basis of certain decisions requiring certificates for the initiation or abandonment by railroads of operations conducted with vessels. Pennsylvania R.R. Abandonment, F.D. No. 18418 (1954) (unreported), relied on by plaintiffs, is readily distinguished as dealing with car floats; such operations may well be thought to be a physical extension of the "line of railroad." Acquisition by Alameda Belt Line, 105 I.C.C. 349 (1926), included lighters, barges and ferries, but there was no discussion whether certification was needed for these or, indeed, for the car floats themselves. On the other hand, Chesapeake Beach Ry. Co., Ferry, 166 I.C.C. 293 (1930), which gave rise to Claiborne-Annapolis Ferry Co. v. United States, supra, was an application for ferry service only. It is distinguishable here as dealing with an operation into territory not theretofore served by carrier. How Commission decisions declining jurisdiction under § 1(18) over line haul operations of rail carriers by bus or truck, Jaloff v. Spokane, Portland & Seattle Ry., 152 I.C.C. 758 (1929); Arlington & Fairfax, Auto R. Co., Extension of Operation, 228 I.C.C. 479 (1938), are to be reconciled with it we need not inquire; the latter point is now largely academic since certification for line haul operation by motor vehicle is required by the Motor Carrier Act, 49 U.S.C. §§ 303(a)(14), 306. See American Trucking Ass'ns v. United States, 17 F.Supp. 655 (DC-D.C. 1936). We thus find no sufficient contrary indication in the ferry and car-float cases to cause us to disregard the Commission's long-standing administrative construction on the very issue with which we are here concerned.

Interpretation of § 1(18) as not applying to initiation or abandonment of trucking service to a freight depot within a terminal district already served by a rail carrier likewise accords with the purpose of the statute and with considerations of practical administration. As explained in Railroad Commission v. Southern Pacific Co., 264 U.S. 331, 343-47 (1924), and in Texas & Pacific Ry. v. Gulf, Colorado & Santa Fe R. Co., supra, at 277, the purpose of requiring a certificate for new construction was to prevent wastes of carrier resources, of two sorts - waste of the resources of the constructing carrier by unwise expenditures and waste of the resources of other carriers by extension of a new carrier into an area adequately served by existing lines. Neither consideration is applicable to the situation at bar. No substantial capital expenditure by the Central is involved. Of course, there is a question whether furnishing the haulage without added charge will be an undue financial burden on the Central as against the advantages it expects to receive, but that is the same sort of question which the Commission regularly considers in rate cases - and, indeed, could have been considered in the investigation and suspension proceeding here - and does not differ because the trucks operate to or from a depot rather than the shipper's premises, as to which appellants do not seriously urge a certificate to be required even if the carrier absorbs the expense, Absorption of Drayage and Trucking Charges, supra. Neither is there new competition in the sense of a new carrier entering a market. The Central was competing in Brooklyn long before § 1(18) was enacted; as with the Pennsylvania in the New York Dock Ry. case, what it here proposes is an improvement in service to an area already served. Indeed, the competitive effect is less than if it offered free transport to and from the customer's door, as the Cotton Belt did in Absorption of Drayage and Trucking Charges, supra. Moreover, were § 1(18) applicable, it would cover abandonment as well as initiation; thus, under plaintiffs' interpretation, if the Central found the Phoenix Warehouse unsuitable or the terms of the warehouseman unsatisfactory, it would have to secure a certificate to abandon and a new certificate for a new location.It is scarcely credible that Congress meant the carrier or the Commission to be burdened with the panoply of a § 1(18) hearing, with notice to the governor and three weeks' newspaper publication, § 1(19), for every such change of service. The Commission seems to have had some such consideration in mind when it first said that § 1(18) did not apply to abandonment of an inland station, Transfer of Freight within St. Louis and East St. Louis by Dray and Truck, supra. The Los Angeles passenger terminal case, Railroad Commission v. Southern Pacific Co., supra, involving large scale relocation of main track, differs toto caelo.

The denial of a temporary injunction is affirmed. The temporary restraining order is vacated ...

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