Case Name: ANN ARBOR R. CO. v. FELLOWS et al.
Court: United States District Court for the Eastern District of Michigan
Jurisdiction: United States
Decision Date: 1915-06-05
Citations: 236 F. 387
Docket Number: 
Parties: ANN ARBOR R. CO. v. FELLOWS et al.
Judges: Before KNAPPEN and DENISON, Circuit Judges, and SESSIONS, District Judge, under section 266 of the Judicial Code (Act March 3, 1911, c. 231, 36 Stat. 1162 [Comp. St. 1913, § 1243]).
Reporter: Federal Reporter
Volume: 236
Pages: 387–400

Head Matter:
ANN ARBOR R. CO. v. FELLOWS et al.
(District Court, E. D. Michigan, S. D.
June 5, 1915.
On the Merits, March 1, 1916.)
1. Cabriees @=>18(6) — Statute Fixing Rates — Suit to Enjoin Eneorcement —Preliminary Injunction.
A federal court will not, at the suit of a railroad company, grant a preliminary injunction suspending the enforcement of a presumptively constitutional state statute fixing passenger rates, where the statute has been in force for a number of years and acquiesced in by complainant, and it appears that the suit can be tried on its merits within a very short time.
[Ed. Note. — For other cases, see Carriers, Cent. Dig. §§ 13, 16-18, 20, 24; Dec. Dig. <®=»18(0).]
2. Constitutional Law <3=>70(3) — Judicial Bower — Statute Fixing Rates.
The question whether a state statute fixing railroad rates is confiscatory as applied to a particular road Is mainly one of fact, and in a doubtful case a court which has no power to fix or revise rates may not substitute its judgment for that of the Legislature, in which such power is vested.
[Ed. Note. — For other cases, see Constitutional Law, Cent. Dig. § 131: Dec. Dig. <@==>70(3).]
3. Carriers <@=»12(5) — Statutory Regulation — Confiscatory Rates.
Precisely what is the just compensation which a railroad company is entitled to earn by the use of its property is seldom easy to determine, but rates which with economical and efficient management will yield a return equal to that, received in other business ventures of similar character and attended with like risks can never he held confiscatory, and unless under exceptional circumstances a court is not justified in declaring invalid an enactment which permits net earnings equal to or not materially less than the interest allowed by statute in the absence of specific contract.
[Ed. Note. — For other cases, see Carriers, Cent. Dig. §§ 11, 15-20; Dec. Dig. <@=»12(5).]
4. Carriers @=>12(5) — Statutory Regulation — Confiscatory Rates.
The value of the property and the revenues and expenses of a railroad company being ascertained and apportioned, and upon a finding of its net earnings on the property devoted to intrastate business, which from its passenger business approximates 6 per cent, per annum and from its freight business a higher per cent., the Michigan two-cent passenger fare law (Pub. Acts 1907, No. 54) and certain freight rates established by the Michigan Railroad Commission, under the operation of which such earnings were made, held not confiscatory.
[Ed. Note. — For other cases, see Carriers, Cent. Dig. §§ 11, 15-20; Dee. Dig. @=>12(5).]
6. Carriers <®==>12(5) — Suit to Enjoin Enforcement op Statutory Rates— Valuation of Property.
The method of ascertaining the present value of railroad property by taking the' cost of reproduction less accumulative depreciation, while perhaps the best general method yet devised, cannot be applied in all eases and under 'all conditions.
[Ed. Note. — Por other cases, see Carriers, Cent. Dig. §§ 11, 15-20; Dec. Dig. <g=»12(5).]
6. Words and Phrases — “Locomotive Ton Mile Ratio.”
The phrase ’’locomotive ton mile ratio” means that the ton weight of a locomotive, without its tender, multiplied by the number of miles traveled, correctly represents the measure of the use of the roadbed and track structure in the service in which the locomotive is employed, and also accurately measures the proportion of the expenses of the upkeep or maintenance of the roadbed and tracks to be assigned to such service.
In Equity. Suit by the Ann Arbor Railroad Company against Cassius R. Glasgow, Grant Fellows, and others, to enjoin enforcement of the Michigan two-cent passenger fare law and orders of thb Michigan Railroad Commission fixing freight rates. On motion for temporary injunction and on final hearing.
Injunction denied, and bill dismissed.
Alexander L. Smith, of Toledo, Ohio, for plaintiff.
Grant Fellows, Atty. Gen., and David H. Crowley and F. W. Carr, Asst. Attys. Gen., of Fansing, Mich., for defendants.
Before KNAPPEN and DENISON, Circuit Judges, and SESSIONS, District Judge, under section 266 of the Judicial Code (Act March 3, 1911, c. 231, 36 Stat. 1162 [Comp. St. 1913, § 1243]).

Opinion:
PER CURIAM.
This preliminary injunction is not sought to preserve an existing situation against a threatened change, but rather to modify a condition in which the railroad company has acquiesced for several years. No bond which can be required from plaintiff can be practically and completely efficacious to protect the traveling public, if an injunction should now issue and if plaintiff should finally fail. There is a presumption that the challenged act of the Michigan Feg-islature is constitutional. These considerations, peculiar to such a case as this, forbid the issue of the temporary writ, unless it is made reasonably clear that, upon the record as it stands, plaintiff is entitled to the relief sought.
If the final hearing were to be delayed one or two years, as counsel seem to think probable, we would have to pass definitely at this time upon the application as presented. . In that event, we should require further development of the facts in some directions — as, for example, regarding the depreciation charge to operating expenses recommended by the Interstate Commerce Commission, but not actually made by plaintiff, and the propriety of employing the factor of speed in reaching the composite use unit adopted by plaintiff, as well as the accuracy of tire speeds assumed; but, if a speedy final hearing can be had, these additional matters can be there developed to better advantage than by ex parte affidavits. We are satisfied that such final hearing can be had, and within a very brief time; and we therefore shall not now either grant or deny the injunction, hut shall hold the application open for the present, pending hearing of the principal case upon the merits, and without prejudice to further consideration or action, either on our own motion or on motion of either party, should circumstances later make it necessary.
The reason why it has been assumed that there must he a long delay seems to be that detailed expert adversary appraisals are thought to be necessary. We are not so impressed. The difference between the valuation claimed by plaintiff and the valuation fixed by the state for taxing purposes is not great enough to require such appraisals. From the evidence now available to both parties, it would seem that the court could fix an approximate valuation, and we cannot think that the issue whether or not there is confiscation could be controlled by the comparatively small difference which might develop between the result of detailed appraisal and the result obtainable by more general methods.
We all concur in the belief of the District Judge, who will be the trial judge, that, under the facts shown by the record and those of which the court takes judicial notice, neither party can be prejudiced by requiring prompt final hearing on the merits.
The clerk will notify both counsel of the filing of this memorandum.