Court Opinion

ID: 6879874
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:13:09.836762+00
Date Added: 2024-06-11T16:05:33.925755
License: Public Domain

STONE, Circuit Judge
(dissenting).
I am unable to concur in the able opinion of the majority on the issue as to whether plaintiffs and the proposed intervener are “parties in interest” within the meaning of the Act (U.S.C.A. Title 49, Section 1, par. (20). I am constrained to state the grounds for such dissent not only by the need for justifying a dissent from the views of Judges for whose judgment I have the highest respect, but also by what I conceive to be the importance of this decision to the efficient operation of the provision of this Act requiring certificates of convenience and necessity before extensions of railway trackage are permissible (U.S.C.A. Title 49, Section 1, par. (18).
The Transportation Act was designed to place the interstate railroads “more completely than ever under the fostering guardianship and control of the [Interstate Commerce] Commission” by placing under its supervision various specified matters. *498among which is construction or abandonment of lines Railroad Commission of State of California v. Southern Pacific Co., 264 U.S. 331, 341-342, 44 S.Ct. 376, 68 L.Ed. 713; Dayton-Goosecreek R. Co. v. United States, 263 U.S. 456, 478, 44 S.Ct. 169, 68 L.Ed. 388, 33 A.L.R. 472. The importance of this control over extensions or abandon-ments to realization of the purposes of the Act is obvious.
As to extension or abandonment of lines, this control of the Commission is exercised solely through the Act requirement of certificates of convenience and necessity before such extensions or abandonments are made. The means provided by the Act to force compliance with this control is by giving to. “any party in interest” the right to prevent, by injunction, such extension or abandonment until the necessary certificate is obtained. This is the “only remedy” and such remedy is “both affirmative and complete.” Texas & Pac. R. Co. v. Gulf, Colorado & Santa Fe R. Co., 270 U.S. 266, 273, 46 S.Ct. 263, 264, 70 L.Ed. 578. Since the above is the only method of protecting and making fully effective this control of the Commission, the importance of any definition of “party in interest” — those who may initiate such procedure — is evident.
As shown by the petition, the “interest” of the plaintiffs is as follows. Defendant contemplates the construction of certain trackage in Kánsas City, Kansas, which plaintiffs allege is an “extension”, within the meaning of the .Act. This trackage is to serve a large produce market which is to be constructed by Kansas City, Kansas. Plaintiffs are produce merchants who own or have places of business in connection with a long established similar market in Kansas City, Missouri, which has long adequately served the area made up of and surrounding the two cities. The construction and operation of the proposed trackage would have the injurious effects following: (a) Destroy or seriously and adversely affect the businesses, properties and large financial investments of plaintiffs in and adjacent to the existing Kansas City, Missouri, produce market; (b) create a rival market far removed from the center of population and inconvenient to a great majority of the citizens of the two cities; (c) create a rival market with no increase of produce business when the present market is entirely adequate to serve the entire community ; (d) result in an unnecessary duplication of railroad facilities at a cost of over $500,000 with no increase in freight to be handled; (e) divert traffic to defendant from other railroads which are now adequately handling the traffic to the existing produce'market; (f) cause destructive competition between railroads operating in the vicinity; and (g) result in wasteful and needless expenditures by defendant.
No present purpose is served by examining, separately, the just stated allegations as to injury. It is enough to test the issue of “interest” by the position of the plaintiffs to this extension as alleged in the petition. That position is that the proposed trackage will divert business from a long established market to the financial loss of plaintiffs and that such diversion will serve no purpose useful to the communities affected thereby. The question is whether “party in interest” (within the meaning of this Act) includes those who will suffer financial loss by a change in conditions which will be brought about by the construction and operation of an extension of a railroad for which no certificate has been obtained under the Act?
Plaintiffs contend broadly that any one whose “welfare” is adversely affected by a railroad extension is a “party in interest”. Defendant contends broadly that “party in interest” is confined to one asserting “the violation of a legal duty owing by the defendant [railroad] to him” and that damage which springs solely from a change in competitive conditions brought about by an “extension” gives rise to no legal duty but is damnum absque injuria.
I think both contentions are, broadly, incorrect and that the meaning of the Act is to be found between these extremes.
The contention of defendant is that the Act intended that only such persons might seek this injunctive relief as could show a violation of some légal duty owing to them by the railroad proposing the extension. This contention is destroyed by the language, construing the provision of the Act, in Western Pacific California Railroad Co. v. Southern Pacific Co., 284 U.S. 47, 51, 52, 52 S.Ct. 56, 57, 76 L.Ed. 160, where, after quoting from Texas & Pacific R. Co. v. Gulf, Colorado & Santa Fe R. Co., 270 U.S. 266, 277, 46 S.Ct. 263, 70 L.Ed. 578, the Court, said:
“The Texas & Pacific Railway sought to prevent an unauthorized competitor from building an extension into territory already served by it. Prior to the statute^ it could not have maintained such a suit, since thcompetitor’s proposed action did not threat*499en interference with any legal right. No carrier could then demand exemption from honest competition.
“If, as the court below seems to have assumed, a ‘party in’ interest’ must possess some clear legal right for which it might ask protection under the rules commonly accepted by courts of equity, the paragraphs under consideration would not materially aid the Congressional plan for promoting transportation. On the other hand, there was no purpose to permit any individual so inclined to institute such a proceeding. The complainant must possess something more than a common concern for obedience to law. See Massachusetts v. Mellon, 262 U.S. 447, 488, 43 S.Ct. 597, 67 L.Ed. 1078. It will suffice, we think, if the bill discloses that some definite legal right possessed by complainant is seriously threatened, or that the unauthorized and therefore unlawful action of the defendant carrier may directly and adversely affect the complainant’s welfare by bringing about some material change in the transportation situation. Here, the petitioner was peculiarly concerned; its own welfare was seriously threatened. It alleged the beginning of an unlawful undertaking by a carrier which might prove deleterious to it as well as to the public interest in securing and maintaining proper railroad service without undue loss. It relied upon the procedure prescribed by the statute to secure an orderly hearing and proper determination of the matter. The disclosures of the bill were enough to show that the respondent’s intended action might directly and seriously affect the project which complainant was undertaking in good faith. There was enough to give the latter the standing of a ‘party in interest’ within intendment of the act.”
This quotation not only carries the meaning of “party in interest” beyond the protection of legal rights but expressly recognizes that injury through competition — not theretofore subject to legal remedy — might be, and in that case was, sufficient basis to constitute the one so injured such a “party in interest”. The decisions cited by appellee to the effect that equity affords no remedy for injuries arising solely from competitive conditions or changes therein are inapplicable. The matter here is one of statutory construction and not one of general law.
The contention of appellant that any one whose “welfare” is affected by a track “extension” is a “party in interest” seems rather too broad. The above quotation from the Western Pacific California case contains the generally stated limitations of the meaning of the statutory term as well as an application of such definition to a set of facts useful in the case before us. The Court states two general classes of persons as within the definition, to-wit, those having some definite legal right seriously threatened or those whose “welfare” “may be directly and adversely” affected “by bringing about some material change in the transportation situation.”
The latter class was involved in that case as it is in the case before us. The main, apparently the only, direct and adverse effect upon the plaintiff in that case was that of competition through the trackage contemplated by the Southern Pacific (284 U.S. at page 52, 52 S.Ct. 56, 76 L.Ed. 160). This effect was, obviously, a business — a financial — effect. Such an effect was “something more than a common concern for obedience to law”. Western Pacific California case, supra, 284 U.S. at p. 51, 52 S.Ct. at page 57, 76 L.Ed. 160. Without attempting further to define that “welfare” which, if “directly and adversely” affected, brings one within the Act, it is sufficient for our present purposes that direct financial loss is within the Act. Such financial loss is clearly stated in this petition and might naturally result from the situation pleaded therein. I think the plaintiffs stated enough in the petition to give them the standing of a “party in interest” within the intendment of the Act.
As to appellant Kansas City, Missouri, the allegation of financial loss is in taxes through diminution of real property values and possible movement of the present produce merchants from the city to the vicinity of the contemplated market in Kansas City, Kansas. Also loss through the situation that it is now erecting a new market structure at considerable cost. It seems to me these allegations are of sufficient definite and adverse financial effect to bring the city within the statute.
I cannot agree that the proposed extension by defendant does not directly affect complainants and intervener. It is quite evident from the complaint and from the offered intervening petition (1) that plaintiffs and intervener will be financially affected by the proposed rival market; and (2) that such rival market cannot come into *500existence without this extension by defendant.
It is true that the law furnishes no protection against competition of a rival market. It is equally true that the Act places it in the power of the Commission to refuse a certificate for an extension where the natural and intended effect of such extension is to create a rival market which will serve no useful public purpose and which will result in direct financial loss to an existing market. Such effects certainly “affect the complainant’s welfare by bringing about some material change in the transportation situation”, as stated in the foregoing quotation from the Western Pacific California case.1

 In presenting this bill, Chairman Esch of the House Committee on Interstate and Foreign Commerce said: “Before a road or an extension thereof can be built it must get what is called in this bill a certificate of convenience or necessity from the commission as a condition precedent to the building of a single rod of the extension or of the new line. That means that the commission must first investigate the situation. It must first consult the communities that would be connected or would be located on the proposed line. It must consult the shipping interests and the producing interests and all other interests that might he involved and then determine whether or not it should issue a certificate of convenience and necessity.” (Italics supplied.)