Opinion ID: 1483191
Heading Depth: 1
Heading Rank: 2

Heading: Motion to Stay Appeal or to Remand.

Text: Mr. Meyer has filed in this Court a Motion that appeal be stayed or, in the alternative, that the proceedings be remanded to the District Court. This motion was briefed and argued to the Court but, upon further consideration, the Court set aside the submission thereof without prejudice and set the motion for hearing in connection with presentation of the appeals. The grounds for the relief sought by the motion are stated thus: (1) The greatly increased balance of assets over liabilities and the greatly improved financial condition and earnings of the debtor since the supplemental report of the Commission of March 9, 1942; and (2) The suit by the Government under the Sherman Antitrust Act against The Association of American Railroads et al., and the facts revealed by the allegations of the complaint in the said suit and the `Western Agreement' annexed as an exhibit to the said complaint. As to the first ground. Three of the appeals (by Mr. Meyer, the Southern Pacific Company and the Debtor) directly present inter alia the issue as to changed conditions and challenge the Plan upon that basis. Changes in earnings and other conditions after promulgation of a Plan by the Commission are pertinent in consideration of the fairness and equity of such Plan. Ecker v. Western Pac. R. Corp., 318 U.S. 448, 506, 63 S.Ct. 692, 87 L.Ed. 892; Group of Institutional Investors v. Chicago, M., St. P. & P. R. Co., 318 U.S. 523, 542, 63 S.Ct. 727, 87 L.Ed. 959. Such changes may, of course, be shown in evidence before the District Court considering the Plan. Further, the appellate court may, within proper bounds, consider showing of facts later than the trial where such bear upon changed conditions. Ecker v. Western Pac. R. Corp., 318 U.S. 448, 507, 63 S.Ct. 692, 87 L.Ed. 892; Group of Institutional Investors v. Chicago, M., St. P. & P. R. Co., 318 U.S. 523, 542, 63 S.Ct. 727, 87 L.Ed. 959. In this situation, the logical and orderly procedure is to examine and determine in connection with the merits of the appeals the effect of any claimed changed conditions, giving consideration to any proper factual matters presented after the trial, rather than to attempt determination upon this motion. As to the second ground. The basis of this ground is that the facts revealed by the allegations of the complaint    and the `Western Agreement' annexed as an exhibit to the said complaint in an Anti-Trust action filed by the United States against The Association of American Railroads et al., August 23, 1944, constitute newly discovered evidence relevant and important to the issues herein. This complaint and exhibit are attached to the motion as an exhibit. The prayer of the motion is to stay these appeals pending final disposition of this Anti-Trust suit; or, alternatively, to remand this proceeding to the District Court with directions to remand to the Commission in order that the Commission may decide in its discretion whether to await further developments in the said suit of the Government against The Association of American Railroads and others, or to institute an investigation into the facts alleged by the Government in its said suit and the effect upon the earnings of the debtor of a successful termination of the said suit. The complaint in this Anti-Trust action is against The Association of American Railroads (a voluntary organization composed of all the major steam railroads in the United States, operating over 85% of the railway mileage), The Western Association of Railroad Executives (a voluntary organization composed of representatives of most of the railroads operating west of Chicago), two investment banking houses (J. P. Morgan & Co. and Kuhn, Loeb and Company), forty-seven railroad companies or trustees thereof (being most of the railroads in the Western District, comprising west of the Mississippi River and some territory in Illinois, Wisconsin and Michigan), and ninety odd individuals. It charges that defendants, from some time prior to 1932, have been engaged in a conspiracy in restraint of interstate trade through eliminating competition in rates and charges, services and facilities resulting in collusive rates, suppression of improvements in facilities and services. Also, it is charged they have conspired to restrain other competitive types of transportation. The complaint particularizes as to twenty ways in which the conspiracy has operated to prevent independent action by parties to the conspiracy in charges and operation of the member railroads. It alleges that defendant Western Association of Railway Executives (called WARE) originally formed in 1928, is an instrumentality used in carrying out the conspiracy upon which was superimposed an arrangement set forth in the Western Agreement, or Commissioner Plan, Western District (effective December 1, 1932), by which WARE has since functioned as a separate entity. A copy of this agreement is attached as Exhibit A. It is charged that after the Western Agreement was brought to the attention of the Department of Justice and a copy had been requested on April 9, 1943, the parties thereto stated that, by an amendment thereto of April 23, 1943, the Agreement had been cancelled but that nevertheless the unlawful practices inaugurated thereunder had been continued. The basis of the relief sought by the motion is newly discovered evidence revealed by the complaint and attached exhibit in the Anti-Trust suit. The record in this reorganization proceeding establishes clearly that Mr. Meyer knew of the existence of this Western Agreement and that, in December, 1932, he voted (as a director of Debtor) for Mr. De Forest who was to represent Debtor on WARE which was to select the Commissioner under that Agreement. Thus, several years before this reorganization proceeding, he had knowledge which would have enabled him to present to the Interstate Commerce Commission, during these proceedings before it, any matters now suggested by this Anti-Trust complaint, which he thought pertinent to this reorganization. Mr. Meyer did present an anti-trust issue before the Commission in these proceedings and it is one of the matters before us on the merits in this appeal. However, that matter had, for the most part, to do with claimed particular acts of certain named railroads which were in direct control of Debtor or of named individuals and railroads which influenced such controlling railroads in their attitude toward the Debtor. The motion must be denied as this is not newly discovered evidence.