Opinion ID: 421082
Heading Depth: 1
Heading Rank: 2

Heading: the financial viability of the boston & maine

Text: 50 The ICC has a statutory responsibility to decide both whether the merger of the Maine Central with the Boston & Maine is [229 U.S.App.D.C. 28] consistent with the public interest under the Interstate Commerce Act, 49 U.S.C. § 11,344(c), and whether the reorganization of the Boston & Maine is compatible with the public interest under Bankruptcy Act § 77(d), 11 U.S.C. § 205(d) (1976) (current version at 11 U.S.C. § 1172). As part of its public interest determination under the Bankruptcy Act, the Commission found that the merged Boston & Maine would be financially viable. Boston & Maine Merger, 366 I.C.C. at 310-13. Finding that the other requirements of Bankruptcy Act § 77 were also satisfied, the Commission certified the reorganization plan to the reorganization court. Id. at 318. The reorganization court agreed that the merged Boston & Maine would be viable and approved the plan. In re Boston & Maine Corp., No. 70-250-M, mem. op. at 33-42 (D.Mass. opinion issued Feb. 23, 1983), appeal filed, No. 83-1086 (1st Cir. Feb. 3, 1983). 51 In considering whether the merger was consistent with the public interest under Interstate Commerce Act § 11,344(c), the ICC saw no need to repeat its analysis of the viability of the reorganization plan. Relying on that analysis, the Commission again found that the merged Boston & Maine would be financially viable. Boston & Maine Merger, 366 I.C.C. at 339. 52 Providence & Worcester claims that the ICC wrongly decided that the reorganized and merged Boston & Maine would be financially viable. 13 The ICC and the Boston & Maine Trustees respond that we lack jurisdiction to review the Commission's finding of viability because review of that finding lies exclusively in the reorganization court. 14 We agree with this response, though we would characterize the issue as one of equitable abstention rather than lack of jurisdiction. 53 The New Haven Inclusion Cases, 399 U.S. 392, 419-30, 90 S.Ct. 2054, 2072, 2077-2078, 26 L.Ed.2d 691 (1970), involved a situation similar to this one. The ICC had approved the merger of the bankrupt New Haven Railroad with the Penn Central Railroad. The parties appealed the Commission's valuation of the New Haven's assets both to a three-judge district court with jurisdiction to review the ICC's approval of the merger and to the reorganization court charged with reviewing the New Haven's reorganization plan. The two courts reached conflicting valuations. The Supreme Court held that the three-judge district court, although it had jurisdiction in a technical sense, id. at 427, 90 S.Ct. at 2076 should have stayed its hand and permitted the reorganization court to decide the valuation question, id. at 428, 90 S.Ct. at 2076-2077. 54 We think abstention is likewise called for here. To be sure, in the New Haven Inclusion Cases, valuation was the sole issue still to be decided, so that the two courts were considering identical issues. Id. at 428, 90 S.Ct. at 2076-2077. Here, in contrast, we must decide numerous issues under the Interstate Commerce Act that were not and could not have been presented to the reorganization court. But the policy considerations that led the Court to order abstention in the New Haven Inclusion Cases also counsel abstention here. 55 First, the standard for determining financial viability is the same under the Bankruptcy Act and the Interstate Commerce Act. Thus, there is no danger that application of [Bankruptcy Act § 77] would yield results different from those to be produced by [Interstate Commerce Act § 11,344(c) ]. Id. at 424, 90 S.Ct. at 2075. Second, for this court to decide an issue that the reorganization court must also decide  'would tend greatly to foment conflicts between coordinate courts and compel creditors, in the protection of their interests, to ride the circuit, demonstrating the basis of their positions in successive courts.'  Id. at 427, 90 S.Ct. at 2076 (quoting In re New York, N.H. & H.R. Co., 26 F.Supp. 18, 23 (D.Conn.), aff'd sub nom. Palmer v. Warren, 108 F.2d 164 (2d Cir.1939), aff'd, 310 U.S. 132, 60 S.Ct. 865, 84 L.Ed. 1118 (1940)). 56 [229 U.S.App.D.C. 29] Third, Providence & Worcester has already had a full opportunity to present its arguments to the reorganization court, which rejected them. Thus, it cannot complain of unfairness because we do not give it a second bite at the apple. Cf. id. 399 U.S. at 428 n. 57, 90 S.Ct. at 2077 (At no time has anyone questioned Penn Central's status as a party litigant in the reorganization court or challenged its right to make a full presentation of its case there ....). 15 57 Finally, the major policy reason counseling against abstention--the importance of an expedited determination of the merits, id. at 424, 90 S.Ct. at 2074--is not a factor in this case since the reorganization court has already issued its decision. 58 For the foregoing reasons, we defer to the reorganization court's conclusion that the ICC properly found that the merged Boston & Maine would be financially viable. The parties raise no other objection to the substantive basis for the ICC's approval of the merger as a whole, and we find in part VI infra no basis for reversing the Commission on procedural grounds. We therefore affirm the Commission's decision that the merger is consistent with the public interest. 49 U.S.C. § 11,344(c). 59