Source: http://supreme.nolo.com/us/264/331/case.html
Timestamp: 2019-04-24 06:57:15+00:00

Document:
1. In view of the policy and provisions of the Transportation Act, establishment of a new union station for several interstate carriers, involving the abandonment of their separate stations, extensive changes and relocations of their main tracks, and very great expense, cannot be brought about by voluntary action of the carriers or order of a state commission in the absence of a certificate of the Interstate Commerce Commission, under pars. 18-21 of § 402 of the act. P. 264 U. S. 342.
will not impair the carrier's ability to perform its duty to the public, construed as not confined to extensions with a purpose to include new territory to be served by a carrier, but as including proposed extensions of main tracks within a city to a proposed new union station, involving changes in the intramural destinations of carriers and in the handling of interstate traffic, and necessitating great expense. P. 264 U. S. 344.
Certiorari to a judgment of the Supreme Court of California annulling, upon review, an order of the state Railroad Commission which sought to require the above-named railroads to eliminate certain grade crossings and establish a new union terminal depot in the City of Los Angeles.
The proceedings were begun in 1916 before the Railroad Commission by complaints of civic associations and others against the railway companies. Before the hearing and the decision were had, the Transportation Act of Congress of 1920 was enacted. In December, 1921, after two hearings, an amended order against the railways was made by which they were required to remove certain grade crossings and to build a union terminal within a certain defined area in the city.
The railway companies sought review of this order in the supreme court of the state, and their three writs were heard and disposed of as one case. The supreme court of the state held that the order was beyond the power of the State Railroad Commission because the subject matter was committed to the Interstate Commerce Commission by the Transportation Act of 1920. The court further held that, if the order had effected the elimination of grade crossings alone, it would have been valid, but that, associated as it was with the establishment of the union station, it must be annulled. We have brought the case of the Commission against each of the railways here by certiorari.
Street. Its main line from Pasadena and Glendale comes from the north, but its line from Salt Lake comes in from the south. From north to south in Los Angeles, its line hugs the east bank of the river for three miles. The Santa Fe station is opposite that of the Salt Lake Railway on the west bank. The Santa Fe hugs the west bank for three miles in the city. One of its lines leaves Los Angeles by the north for Chicago. Another leaves the city by the south, through Riverside, for Chicago. The Southern Pacific does not follow the river bed after passing under the Broadway Viaduct, but extends in a southwesterly direction until it reaches the north end of Alameda Street. From that point, it runs south through the city at grade on that street. Its station is at Fifth Street, and lies southwesterly from the Salt Lake and Santa Fe stations and a quarter of a mile distant from them. The eastern main line of the Southern Pacific crosses the river at Alhambra Avenue, joins the San Francisco main line, and reaches the station from there by the same tracks on Alameda street. The Southern Pacific occupies Alameda Street on grade and longitudinally in both directions from its station for three miles. Its lines toward the south go to San Pedro and Santa Ana.
that the three railways should purchase jointly land enough in an area reaching from Alameda Street to the river and from Aliso Street to Alhambra Street to erect a suitable union station, to be situated somewhere near a square called the Plaza. The railways are directed to make such additions to, extensions of, improvements and changes in, the existing railroad facilities of said companies as may be reasonably necessary and incidental to the use of said union passenger station. This would require the removal of the present station of the Southern Pacific from Fifth Street toward the Plaza at least half a mile, and the stations of the Santa Fe and the Salt Lake from First Street on the river to the Plaza, more than a quarter of a mile. The changes to be effected under the order will require, in the abandonment of the Southern Pacific main track on Alameda Street for three miles, a joint use by the Southern Pacific of main tracks on the river bank with either the Salt Lake or the Santa Fe, or the construction of its own main tracks on one side or the other along the river bank. The main tracks of the Salt Lake must be extended across the Los Angeles River on a viaduct to the area selected for the union station. The main track of the Santa Fe runs along the river side of the selected area, but an extension of its main tracks will have to be made to bring it into the new station.
"That, notwithstanding the views expressed by the Railroad Commission in its findings and conclusions in the proceeding herein presented for review, we can perceive no indispensable relation between the elimination of grade crossings and the establishment of union depot facilities, nor can we see an unsurmountable difficulty why jurisdiction over the matter of eliminating grade crossings may not be exercised in a proper case consistently, and it may be concurrently, with the exercise of the authority which is vested by the act of Congress of 1920 in the Interstate Commerce Commission over the subject of union terminal depot facilities."
The state supreme court thus modifies the findings of the Railroad Commission insofar as they sought to tie the validity of its order establishing a union station to its unquestioned police power to regulate grade crossings in the interest of the public safety. We avoid any inquiry how far, if at all, the principle laid down in Erie R. Co. v. Board of Public Utility, 254 U. S. 394, is qualified by the provisions of the Transportation Act. Our only question here is whether the power to direct a new union station, with its essential incidents, is committed exclusively to the Interstate Commerce Commission under the Act of 1920.
securities, their car supply and distribution, their joint use of terminals, their construction of new lines, their abandonment of old lines, and by a proper division of joint rates, and by fixing adequate rates for interstate commerce, and, in case of discrimination, for intrastate commerce to secure a fair return upon the properties of the carriers engaged."
New England land Divisions Case, 261 U. S. 184; Railroad Commission v. C., B. & Q. Ry., 257 U. S. 563.
for its use, and "to require such joint or common use of terminals, including main track or tracks for a reasonable distance outside of such terminals," as in the opinion of the Commission will meet the emergency and the public interest and, upon hearing, determine just compensation for use of same. Paragraph 16 authorizes the Commission to provide transportation by other carriers if one carrier is unable to handle its traffic upon terms fixed by the Commission.
By § 405, amended § 3 of the Interstate Commerce Act provides in its third paragraph that all carriers shall afford all reasonable facilities for the interchange of traffic between their respective lines and for forwarding and delivering passengers. Paragraph 4 provides that the Commission may, in the public interest and without impairment of a carrier's power to handle its own business with its terminal facilities, require the use of its terminal facilities, including its main line track or tracks for a reasonable distance outside of its terminal for another carrier or carriers, upon such terms as may be agreed upon by the parties, fixed by the Commission or determined by suit as in condemnation proceedings.
for the whole shipping and traveling public in interstate commerce. It gives to the Interstate Commerce Commission the power and duty, where the public interest requires, to make out of what is the passenger and freight station of one interstate carrier a union station or depot.
But it is insisted that the supervisory power thus conferred does not include the installation of an interstate union station, where its terminals and main tracks are newly built and the interstate carriers are compelled to expropriate not the terminal property of another interstate carrier, but property of others than carriers not theretofore used for terminals. This would be giving power to the Interstate Commerce Commission to provide for a small and contracted union station of interstate carriers, limited to the terminals of one carrier, and would leave the larger and more important union stations of interstate carriers to the control of state commissions. We think, however, that means of control over installation of such new union stations for interstate carriers is given to the Interstate Commerce Commission in amended paragraphs (18 to 21) of § 402. They provide that no interstate carrier shall undertake the extension of its line of railroad or the construction of a new line of railroad, or shall acquire or operate any line of railroad, or extension thereof, or shall engage in transportation over such additional or extended line of railroad unless and until the Commission shall certify that public convenience present or future requires it, and that no carrier shall abandon all or any portion of its line or the operation of it without a similar certificate of approval. Such a certificate is, we think, necessary in the construction of a new interstate union station, which involves a substantial and expensive extension of the main tracks or lines of interstate carriers who theretofore have maintained separate terminals.
"The authority of the Commission conferred by paragraphs (18) to (21), both inclusive, shall not extend to the construction or abandonment of spur, industrial, team, switching or side tracks located or to be located wholly within one state, or of street, suburban, or interurban electric railways which are not operated as a part or parts of a general steam railroad system of transportation."
"That nothing in this Act shall impair or affect the right of a state, in the exercise of its police power, to require just and reasonable freight and passenger service for intrastate business except insofar as such requirement is inconsistent with any lawful order of the Commission made under the provisions of this Act."
But there is a great difference between such relocation of tracks or local union stations and what is proposed here. The differences are more than that of mere degree; they and their consequences are so marked as to constitute a change in kind. They come within paragraphs 18 to 21 of § 402, and require a certificate of the Interstate Commerce Commission as a condition precedent to the validity of any action by the carriers or of any order by the state commission.
"unless the Commission finds, as to such extension, that it is reasonably required in the interest of public convenience and necessity, or as to such extension . . . that the expense involved therein will not impair the ability of the carrier to perform its duty to the public."
the changes of from $25,000,000 to $45,000,000. We think it clear that, in such an extension of main lines with their terminals, the Interstate Commerce Commission is required by the act to make a finding that the expense involved will not impair the ability of the carriers concerned to perform their duty to the public.
The purpose of Congress to prevent interstate carriers from incurring expense which will lessen their ability to perform well their interstate functions is further shown in § 439 of the Transportation Act, whereby the Interstate Commerce Act is amended by insertion of § 20a. This new section subjects to the approval or rejection of the Interstate Commerce Commission the issue by an interstate carrier of all future shares of stock, bonds, or other evidence of indebtedness, and forbids approval unless the Commission shall find that their issue is for a lawful purpose, is compatible with the public interest, is appropriate and necessary to the discharge of its public duty as a common carrier, and will not impair its ability to perform that service. This is, of course, in pari materia with the restriction of paragraph 21 of § 402 to prevent a possible impairment of the financial ability of interstate carriers to discharge their interstate commerce duties. Such a heavy burden as that involved in this new union station and the main track changes and extensions and other accessories would in all probability require the three railways to issue new capital securities, and this could not be done without the approval of the Interstate Commerce Commission. To be sure, this provision only becomes operative when securities have to be issued, and would not, of itself, prevent action by a state commission until such securities are seen to be necessary; but the provision indicates the general congressional plan.
the Interstate Commerce Commission, asking for an order to provide, maintain, and use a union station, that a hearing followed, and that, pending the decision in this Court, the matter is held under consideration.
For the reasons given, we think the course taken by the City of Los Angeles was the correct one. Until the Interstate Commerce Commission shall have acted under paragraphs 18 to 21 of § 402 of the Transportation Act. the respondent railways cannot be required to provide a new interstate union station and to extend their main tracks thereto as ordered by the State Railroad Commission.

References: § 402
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 § 405
 § 3
 § 402
 § 402
 § 439
 § 20
 § 402
 § 402