Document: 385 U.S. 57 87 S.Ct. 255 17 L.Ed.2d 162 ILLINOIS CENTRAL RAILROAD COMPANY et al., Appellants,v.NORFOLK AND WESTERN RAILWAY al. CALUMET HARBOR TERMINALS, INC., Appellants, v. NORFOLK UNITED STATES and Interstate Commerce Commission, Nos. 15, 20. Argued Oct. 11, 1966. Decided Nov. 14, William J. O'Brien, Jr., Chicago, Ill., Richard A. Posner, Washington, D.C., for appellants. Theodore E. Desch, appellees. Mr. Justice CLARK delivered the opinion of Court. 1 This is an appeal from judgment a three-judge District Court, 241 F.Supp. 974, setting aside orders 307 I.C.C. 493, 312 277, 317 502, which granted applications seven railroads1 to provide additional rail service Lake Calumet Harbor Port near southern limits Illinois. The was be provided through construction single line track into Chicago Regional joint use railroads. At present port served directly by only one railroad, appellee Rock Island Pacific Railroad Company (Rock Island). Appellee New York, St. Louis (Nickel Plate),2 has facilities on east side been reserved future commercial development, but at its do not reach port. court, with judge dissenting, rejected as having 'ample support' in record, findings Commission that public convenience necessity required applied roads. It further found, unanimously, requirements due process were violated refusal give Nickel Plate hearing before approving nonexclusive agreement, subsequently executed between applicant roads District, covering latter's facilities. court ordered new all issues, concluding such should limited agreement. We noted probable jurisdiction, 382 913, 86 288, 15 230, reverse judgment. I. BACKGROUND OF LAKE PORT. 2 within available handling waterborne freight. shallow lake approximately two miles length covers 1,250 acres. accessible water Michigan via River heart switching district, distance some six miles. 3 As early 1880 Pullman companies constructed trackage first brought Calumet. 300 500 acres development harbor later donated acreage United States turning basin. Comprehensive plans dredging filling submerged lands prepared 1916 engineer City Chicago. In 1917 waived riparian rights four shoreline 1935 gave land purpose widening River. 4 1947 Illinois Central, appellant here, attempted enter area. appellants York Central Belt Railway opposed application addressed Commission. 1949, during pendency proceeding, acquired common stock certain industrial property $2,200,000. then entered proceedings opposition Central. latter approved Circuit Court Cook County it Supreme affirmed 1953. R.I. & P.R. Co. ex rel. R. Co., 414 Ill. 134, 111 N.E.2d 136. 5 acquisition Island—over objections Company, each also sought acquire or portion imposed conditions designed guarantee fair practices, assure non-discriminatory traffic other railroads mutuality operating relationships theretofore existing Island, however, continued providing direct 6 created municipal corporation State 1951. Its major deep facility both domestic import-export Lawrence Seaway. 1954 declared resolution public's, well port's, interest many possible. 1955 adjoining began constructing end; built 14 railroad yard 'hold' tracks port, docks, 6,500,000-bushel grain elevators, three transit sheds occupying 300,000 square feet space, back-up warehouse 200,000 streets. These cost $24,000,000 paid sale revenue bonds. By contract operates over serves Terminals, Inc., private facility. No their own tracks. nearest previously noted, District. Any wishing must Island. II. THE APPLICATIONS BEFORE COMMISSION. 7 On October 22, 1956, Pennsylvania requested authority under provisions 49 U.S.C. § 1(18) construct 1.431 would connect lines affiliate passes Calumet's southwestern shore. Similar filed South Shore Bend Railroad, Indiana Company. All applicants operate rather than latter, Plate, given leave intervene parties.3 objectors, remaining intervenors supporting applications. 8 original did specifically request District's appears impression formal necessary because fact currently without it. Nevertheless, covered entire plan operations proposed appellants, including activity unexecuted agreement leasing attached exhibit. lease Hearing Examiner 12-day he conducted subject testimony consideration. advised, concluded, approval extension. Accordingly, recommended project approved. 9 5, 1959, adopted Examiner's recommendations ruled file supplemental discussed indicated satisfactory. did, feel exclusive right operation clause eliminated. Island's disrupted every industry located have service, if they so elected. 10 April 1960, pursuant Commission's requirement, specific these eliminated exclusionary had objected. Despite found 'technical deficiency' appellants' corrected filing applications; record previous adequate support proposal appellants; applications, supplemented, 11 June 1961, amend second asking same. modified old 5% annual rental based upon valuation exceed $2 per car, loaded empty, locomotives. flat charge freight car; industry-owned agreement; affect nor grant any privilege after once again denying appellees' hearing, this final November 26, 1962. changes merely clarified responsibilities parties. rentals 'rentals generally may considered reasonable where, facts disclose nonaffiliated parties, bargaining arm's length, increased will offered public, parties benefit financially, interveners' ability continue serve impaired.'4 III. PROCEEDINGS IN DISTRICT COURT 12 suit seeking enjoin vacated grounds we stated. 13 faced basic problems: (1) whether there 'substantial evidece' order (2) denied law. With respect problem 'important findings' However, 'offer ample conclusions. conclusions appeared drawn prior record. held insufficient evidence approval; materially different bound same condition affording them hearing. divided complete rehearing issues. cannot agree either disposition case. IV. APPLICABLE STANDARD ON REVIEW 16 outset contend apply correct standards reviewing action. reject 'conclusions' above indicated, ground test judicial review is, course, action supported evidence' viewed whole, 1009(e)(5). Substantial 'enough justify, trial jury, verdict when conclusion jury.' National Labor Relations Board Columbian Enameling Stamping 306 292, 300, 59 501, 505, 83 L.Ed. 660 (1939). A careful reading leads us conclude applying substantiality Indeed, separate places uses term being requirement. unfortunate language crept decision, believe creating 'noval formulation' inadvertently used terminology meet dissent referring concluded erred Act authorizes issuance certificates ones here finds require service. 1(18). repeatedly voluntarily proposing extension lines, can show 'either presently reasonably self-sustaining, nearly unduly burden interstate commerce, issue certificate authorizing line,' Oregon-Wash. Nav. 288 37, 53 266, 273, 77 588 (1933). 'must convinced venture drain railroad's resources disable performing those duties rested, consequent detriment matter rates.' Ibid. Also see Texas Gulf, C. S. F.R. 270 46 263, 70 578 (1926); Chesapeake o. Ry. States, 283 35, 42, 51 337, 339, 75 824 (1931). 'evidence (of appellants) adduced totally devoid factual possibility no all.' read it, possibilities somewhat conflicting. keeping duty, resolved conflict. upheld completely refute claims. Among court5 are following: 'the deepwater Chicago,' 'unparalleled access' barge, rail, steamer motor transportation 'complete access ocean transportation' immediate future, 71,490,510 tons water-borne 'material increases'6 tonnages predicted among estimated 600 900 vessels coming season, 'will necessitate substantially broadened out port'; combined capacity 61,601 cars, more times port; routing 'more direct,' entail less handling, expedite shipments expensive Island; and, finally, 'imperative * very beginning era system th needs established type expected steady progress expansion.' findings, light others overturned sufficient sustain issuing certificates. 18 Moreover, striking down conclusions7 included: Consideration whole warranted finding granted; granting result greater competition, better car supply lower rates industries 'on par' solicitation traffic, control cars could return empties fast shuttle country elevators interchange time come District; elimination delays, single-line hauls hauls; trunkline detrimental hindrance harbor, although 100 carrier trucklines, serving 'a higher value' necessity; need profitable; considering expansion program made 'of warranted.' said, largely function draw discretion appropriate. said Consolo Federal Maritime Comm'n, 383 607, 620, 1018, 1026, 131 (1966), drawing inconsistent does prevent administrative agency's substantial evidence.' strike duty determine substantial, Universal Camera Corp. Board, 340 474, 71 456, 95 456 (1951). Having port's potential competitive Court's substitute fairly findings. controlling subsidiary 19 erred, believe, ordering afforded appellees thereon. 20 view 'to extend County, industries, warehouses, docks piers area.' prayer 'your herein sought.'8 proceeding came September 30, 1957, counsel stated his understanding case import export business *.' (Emphasis supplied.) And handle area jurisdiction. limitation trade.' Likewise, 'Return Questionnaire' stated: 'The operated receive material handled area, addition area.'9 To make crystal clear paragraph answer questionnaire 21 virtue purchase capital stock, former authorized Finance Docket No. 16252, Control, decided 17, 1949.' 22 similar allegations returns contained like statements. answers May 16, themselves solely proposition 'applicant's territory (the District) heretofore exclusively adequately petitioners necessity, mean duplication create unsound uneconomic transportation.' 23 tried theory included During presentation objection introduction beyond scope application. overruled objection. virtually witnesses directed phase rebut voluminous detail. For example, 40 pages detail Davidson, witness His devoted reference compares statistics charges, rates, problems, etc., involved Page page costs, profits, testimony, together forecasts impact same, permitted, operations. Another Professor Marvin L. Fair, testified research great depth comparisons Great Lakes ports; iron ore, grain, general cargo; physical navigation effect tolls; Welland Canal (in Seaway) efficiency facilities; movement exports imports; ofpolitical, military, economic home abroad adequacy 24 establishes doubt project. Their offering unexecuted, indications fact. received evidence, proposed. would, indeed, futile act seek attain able it! 25 true objected felt, rightly so, submitted technically broad enough sought. obliged to—and did—offer matter. When question deficient permitted find explored examined. Rather, opposite conclusion. stage integral part overall submitted. 26 ruling 'conjunction application,' not, our view, deprice full alleged spend sums money it; entitled retain reason appellees; justified necessity. itself 'Examination discloses arguments contentions set forth protestants' briefs, exceptions examiner's report, petitions reconsideration, oral arguments.' Construction Trackage, 280. 27 removal 'exclusive Port' clause, document formula determining charged former, hardly maintained worked hardship fact, precluded continuing remembered value tracks, car. changed locomotive. much favorable clauses. compared favorably per-car considerations, invited refused sit negotiation contract; opportunity reasonableness property; were, are, nowise insignificance ones, led another 28 Appellees insist 'present conditions' presented 'speculation.' pending years this, holding hearings, contrary. proper circumstances. actions. concluded. 29 therefore reversed remanded directions orders. 30 ordered. 31 Reversed directions. 32 BLACK, dissenting. 33 failed I reversal holding. 488, 465, 'Congress barred decision conscientiously entirety furnishes, body Board's view.' affirm judgment, adhering principles firmly announced Camera,supra. Company; Railroad; Chicago; signed had. merged Norfolk Western since began. Others Secretary Agriculture, Trade, Association Industry, lake, North Pier Terminal 505. 977. 1960 27,000 carloads easily increase 76,500 1962, 115,000 1968 anywhere 250,000 350,000 year sides completed. There shipments. Indiana, Illinois, Iowa, Missouri, Kansas, Nebraska Colorado 1956 produced 43% wheat 51% corn grown States. disparity divert Atlantic Gulf ports Service appear midwest grain-producing terminate extensive classification yards utilized. 979. Application Pennsylvania, 19, Return Bend, 17.

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