Source: http://supreme.nolo.com/us/264/258/case.html
Timestamp: 2019-06-25 17:34:58
Document Index: 480938361

Matched Legal Cases: ['§ 1', '§ 5', '§ 8', '§ 4', '§ 5', '§ 212', '§ 17', '§ 3']

CHICAGO JUNCTION CASE, 264 U. S. 258 - Volume 264 - 1924 - Full Text - US Supreme Court Center - USSC Cases - Nolo
US Supreme Court Center > Volume 264 > CHICAGO JUNCTION CASE, 264 U. S. 258 (1924) > Full Text
6. Section 212 Jud.Code, which declares that any party to a proceeding before the Interstate Commerce Commission may, as of
The Chicago Junction Railway and the Chicago River & Indiana Railroad are terminal railroads located
within the Chicago switching district. Prior to May 16, 1922, they were operated as independent belt lines, uncontrolled by any trunk line carrier, and they were used by the twenty-three railroads entering Chicago, impartially and without discrimination. Among these were the New York Central Lines and their chief competitors, the six carriers who are plaintiffs in this suit. [Footnote 1] The New York Central sought to obtain control of these terminal railroads. To this end, it made an application to the Interstate Commerce Commission, on December 28, 1920, under paragraph 18 of § 1 and paragraph 12 of § 5 of the Act to Regulate Commerce, as amended by Transportation Act 1920, c. 91, 41 Stat. 456, 477, 481. [Footnote 2] The authorization requested was to make an agreement with stockholders then owning these properties by which, among other things, the New York Central would purchase all the capital stock of the Chicago River & Indiana Railroad for $750,000, and the latter company would lease for 99 years (and thereafter) the Chicago Junction Railway at an annual rental of $2,000,000. Upon this application, hearings were had. The Baltimore & Ohio Railroad, and its co-plaintiffs herein, intervened, and opposed granting the application. On May 16, 1922, an order was entered which authorized the New York Central to acquire the Chicago River & Indiana Railroad stock,
On April 10, 1923, this suit was brought in the Federal Court for the Eastern District of Illinois against the United States, the Commission, the New York Central, the terminal railroads, and the stockholders thereof. [Footnote 5] The relief sought is to have the order declared void, to have
First. Plaintiffs contend that the order is void because there was no evidence to support the finding that the acquisition of control of the terminal railroads by the New York Central "will be in the public interest." The bill charges in clear and definite terms that this finding was wholly unsupported by evidence. We must take that fact as admitted for the purposes of this appeal. The allegation
Whether this order can be described properly as legislative may be doubted. It is clear that legislative character alone would not preclude judicial review. Rate orders are clearly legislative. Prentis v. Atlantic Coast Line, 211 U. S. 210, 211 U. S. 226. Nor would the further fact that the order is permissive preclude review, if by that term is meant an order which, in contradistinction to one compelling performance, authorizes a carrier to do some act otherwise prohibited. Orders entered under the Act of June 18, 1910, c. 309, § 8, 36 Stat. 539, 547, amending § 4 of the Interstate Commerce Act, are of this character. That section prohibits carriers from charging more "for a shorter than for a longer distance over the same line or route in the same direction" without obtaining authority from the Commission. A suit will lie to set aside an order granting such authority, and to enjoin action by the carried thereunder.
It is further contended that paragraph 2 of § 5 confers a power purely discretionary, and that, for this reason, the order entered cannot be set aside by a court merely on the ground that the action taken was based on facts erroneously assumed, or of which there was no evidence. [Footnote 8] The power here challenged is not of that character. Congress,
by using the phrase "whenever the Commission is of opinion, after hearing," prescribed quasi-judicial action. [Footnote 9] Upon application of a carrier, the Commission must form a judgment whether the acquisition proposed will be in the public interest. It may form this judgment only after hearing. [Footnote 10] The provision for a hearing implies both the privilege of introducing evidence and the duty of deciding in accordance with it. To refuse to consider evidence introduced or to make an essential finding without supporting evidence is arbitrary action. As it was admitted by the motion that the order was unsupported by evidence, and since such an order is void, there is no occasion
Second. The defendants contend that the plaintiffs have not the legal interest necessary to entitle them to challenge the order. That they have in fact a vital interest is admitted. They are the competitors of the New York Central. Practically all the tonnage originated at or destined to points on these terminal railroads is competitive in that the same can be hauled either over the lines of the New York Central or over those of the plaintiffs. Prior to the date of the order, and while the terminal railroads were uncontrolled by any trunk line carrier, they were all served impartially and without discrimination, and they competed for the traffic on equal terms. The order substitutes for neutral control of the terminal railroads, monopoly of control in the New York Central, and, in so doing, necessarily gives to it substantial advantage over all its competitors and subjects the latter to serious disadvantage and prejudice. The main purpose of the acquisition by the New York Central was to secure a larger share of the Chicago business. By means of the preferential position incident to the control of these terminal railroads, it planned to obtain traffic theretofore enjoyed by its competitors. Because such was the purpose of the New York Central control, and would necessarily be its effect, these plaintiffs intervened before the Commission. That their apprehensions were well founded is shown by the results. The plaintiffs are no longer permitted to compete with the New York Central on equal terms. A large volume of traffic has been diverted from their lines to those of the New York Central. The diversion of traffic has already subjected the plaintiffs to irreparable injury. The loss sustained exceeds $10,000,000. Continued control by the New York Central will subject them to an annual loss in net earnings of approximately that amount. If, as suggested in Interstate Commerce Commission v.
Page 264 U. S. 267
Chicago, Rock Island & Pacific Ry. Co., 218 U. S. 88, 218 U. S. 109, a legal interest exists where carriers' revenues may be affected, there is clearly such an interest here.
The plaintiffs may challenge the order because they are parties to it. Judicial Code § 212 (originally Commerce Court Act June 18, 1910, c. 309, 36 Stat. 543) declares that any party to a proceeding before the Commission may, as of right, become a party to "any suit wherein is involved the validity of such order." The section does not in terms provide that such party may institute
a suit to challenge the order. But this is implied. For otherwise there would in some cases be no redress for the injury inflicted by an illegal order. Moreover, the fact of intervention, allowed as it was, implies a finding by the Commission that the plaintiffs have an interest. In the proceeding before the Commission, they opposed by evidence and argument the granting of the application. This they did as of right. For, under the rules of practice adopted by the Commission pursuant to paragraph 1 of § 17 of the Interstate Commerce Act, the intervener becomes a party to the proceeding, entitled, like any other party, to appear at the taking of testimony, to produce and cross-examine witnesses, and to be heard in person or by counsel. [Footnote 11] The intervention must be preceded by an order of the Commission granting leave, and leave can be granted only to one showing interest. No case has been found in which either this Court or any lower court has denied to one who was a party to the proceedings before the Commission the right to challenge the order entered therein. On the other hand, persons who were entitled to become parties before the Commission, but did not do so, have been allowed to maintain such suits where the requisite interest was shown. Interstate Commerce Commission
Page 264 U. S. 269
v. Diffenbaugh, 222 U. S. 42, 222 U. S. 49; Skinner & Eddy Corp. v. United States, 249 U. S. 557, 249 U. S. 562. [Footnote 12]
Third. It is contended that this bill was properly dismissed for want of jurisdiction. at least as to the terminal companies and their stockholders other than the New York Central, because the plaintiffs have joined with the suit to set aside the order a suit to restore the status quo. The objection is not that the bill is multifarious, or that it is otherwise in conflict with established equity practice. The argument is that the United States is a necessary party; that, against it, suit can be brought only when Congress gives consent; that the suit was brought necessarily and solely under the Act of October 22, 1913, c. 32, 38 Stat. 219, 220, and that the consent so given does not extend to a suit in which it is sought to set aside both the order and rights acquired by private persons thereunder. There is nothing in the legislation to indicate that Congress intended such a limitation of the scope of the relief
Compare 25 U. S. Mott, 12 Wheat.19; Philadelphia & Trenton R. Co. v. Stimpson, 14 Pet. 448, 39 U. S. 458.
See also Nashville Grain Exchange v. United States, 191 F. 37; Atlantic Coast Line v. Interstate Commerce Commission, 194 F. 449. Merchants' & Manufacturers' Traffic Association v. United States, 231 F. 292; McLean Lumber Co. v. United States, 237 F. 460; City of New York v. United States, 272 F. 768, 769; Village of Hubbard v. United States, 278 F. 754, 759; Tennessee v. United States, 284 F. 371; Nashville, etc., Ry. v. Tennessee, 262 U. S. 318; Detroit & M. Ry. Co. v. Boyne City, G. & A. R. Co., 286 F. 540, 548.
The complainants have no standing to vindicate the rights of the public, but only to protect and enforce their
own rights. Redress for public grievances must be sought by public agents, not by private intervention. Telephone Co. v. Railroad Commission, 174 Mich. 219. The right of the complainants to sue therefore cannot rest upon the alleged violation of a public interest, but must rest upon some distinct grievance of their own. Loss of business, or of opportunities to get business attributable to the activity or increase of facilities on the part of a competitor, is not enough. Transportation Act 1920 lays down no new or additional rule by which the question. What constitutes a legal or equitable right interference with which may give rise to an action may be tested, and the determination of that question must still rest upon general principles of jurisprudence. See Peavey & Co. v. Union Pacific R. Co., 176 F. 409, 417. In Railroad v. Ellerman, 105 U. S. 166, 105 U. S. 174, this Court held that a private complainant may not be heard by a court except for an
If it were conceded that the acquisition of the terminals by the New York Central was in the public interest, I suppose it would not be contended that complainants had any standing to interfere on the ground that their opportunities for obtaining business had been impaired. And, since they are without legal right to intervene to redress a public grievance, the contrary fact that the acquisition will not be in the public interest cannot avail them. Their complaint must stand or fall upon the nature of their own grievance. A private injury, for which the law
The decision of the Court here proceeds upon the theory that the injury complained of is a denial of equality of treatment in the use of the terminals, but I do not understand this to be the gravamen of the bill. The complaint is of inequality of opportunity to get business, not of opportunity to use the terminals. Complainants' access to the use and enjoyment of the terminal facilities acquired by the New York Central remains the same in respect of any business they may obtain. Interstate Commerce Act § 3(3), (4), as amended by Transportation Act 1920, c. 91, 41 Stat. 479. The Commission granted the authorization only upon condition that the neutrality of the terminals in their handling of traffic should be preserved.* If their use be lessened, therefore, it will not be because access to the terminals has been, or is in danger of being, restricted, but because, with less business, there will be less occasion to use them. An illustration may be helpful: suppose, instead of these terminal facilities, the acquisition had been of a line of railroad running west from Chicago which, prior thereto, had been neutral and
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