Court Opinion

ID: 6879873
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:13:09.834043+00
Date Added: 2024-06-11T16:05:33.922849
License: Public Domain

SANBORN, Circuit Judge.
The suit (No. 11480) which gives rise to these appeals "was brought by certain commission merchants of Kansas City, Missouri, to enjoin the Union Pacific Railroad Company from constructing what is alleged to be an extension of its lines of railway in Kansas City, Kansas, until such time as it has procured a certificate of convenience and necessity from the Interstate Commerce Commission covering such construction, as required by § 402, par. (18), of the Transportation Act of 1920, c. 91, 41 Stat. 456, 477, 49 U.S.C. § 1, par..(18), 49 U.S.C.A. § 1(18). Kansas City, Missouri, sought leave to intervene. The railroad company filed an answer in which, among other things, it (1) denied jurisdiction; (2) asserted that the plaintiffs were not “parties in interest” within the meaning of § 402, par. (20), of the Transportation Act, c. 91, 41 Stat. 456, 478, 49 U.S.C. § 1, par. (20), 49 U.S.C.A. § 1(20) ; and (3) asserted that the complaint failed to “state a claim against defendant upon which relief can be granted”.1 Thereafter the defendant railroad company applied for a hearing upon these defenses before trial.2 The District Court heard its application together with the motion of Kansas City, Missouri, for leave to intervene. The court ruled that it had jurisdiction of the suit, but that the plaintiffs were not “parties in interest” .and hence could not maintain it, and that the complaint failed to state a claim upon which relief could be granted. It also ruled that the City was not a “party in interest”.3 It entered a decree dismissing the complaint and denying intervention. From this decree these appeals are taken.
The appeals challenge (1) the action of the .court im considering in advance of trial the defenses sustained; (2) the ruling that the plaintiffs and the City are not “parties in interest”; and (3) the ruling that the complaint fails to state a claim upon which relief can be granted.
We think, that if it conclusively appears from the complaint filed by the plaintiffs and the. complaint in intervention tendered by the City that the plaintiffs and the City are without capacity to maintain the suit and that therefore no relief could be afforded them, the court below was justified in entering a decree of dismissal in advance of trial. See General Investment Co. v. New York Central R. Co., 271 U.S. 228, 230, 46 S.Ct. 496, 70 L.Ed. 920; Carolina Power & Light Co. v. South Carolina Public Service Authority, 4 Cir., 94 F.2d 520, 526; Leimer v. State Mutual Life Assurance Co., 8 Cir., 108 F.2d 302, opinion filed January 5, 1940.
The vital question in these cases is whether the plaintiffs and the City are “parties in interest” within the meaning of paragraph (20), § 402 of the Transportation Act, which provides: “Any construction [of an extension] * * * contrary to the provisions of this paragraph or of paragraph (18) or (19) of this section may be enjoined by any court of competent jurisdiction at the suit of the United States, the commission [In*495terstate Commerce Commission], any commission or regulating body of the State or States affected, or any party in interest; * * */>
The complaint of the plaintiffs shows that they are commission merchants doing business on the Kansas City, Missouri, produce market, an old and well-established market which adequately serves the consuming public in its vicinity and receives produce from, and ships produce to, other states; that Kansas City, Missouri, is now engaged in constructing new market buildings for this market at a cost of about $500,000; that the market has suitable and adequate transportation facilities of all kinds; that the adjoining city of Kansas City, Kansas, proposes to build and is building a “Food Terminal” or produce market on a tract of land which it owns, at a cost of about $4,000,000, of which $1,710,000 is a grant from the Public Works Administration of the United States, and that the balance of the necessary funds will be procured by a sale of the City’s bonds to the defendant railroad company; that the defendant proposes, at an expense of some $500,000, to furnish track-age to serve this Kansas City, Kansas, market; that this trackage constitutes an extension of the defendant’s lines of railroad, for the construction of which it has procured no certificate of convenience and necessity from the Interstate Commerce Commission as required by law; that the construction and operation of the proposed extension in Kansas City, Kansas, will adversely affect and will destroy the business and properties of the plaintiffs and the large investments which they have made in and adjacent to the Kansas City, Missouri, produce market; that it will create an unnecessary and uncalled for rival market at an inconvenient place without creating, any more ■produce to be handled or any more customers to be served; that it will result in the unnecessary duplication of railroad facilities at a cost of $500,000 without increasing the amount of freight to be handled; that it will divert traffic from other railroads ■which are now adequately handling the traffic to the Kansas City, Missouri, produce market, and will cause destructive competition between the defendant and other railroads and will cause a wasteful and needless expenditure of money by the defendant; that “for each and all of the reasons aforesaid, the construction and operation, or the construction, or the operation of the said extension or extensions of railroad by the defendant to said proposed produce market in Kansas City, Kansas, will directly and adversely affect the property interests of the plaintiffs and the public generally by bringing about a material change in the transportation situation, and will constitute an unnecessary burden upon interstate commerce directly and adversely affecting the welfare of plaintiffs and the public interest.”
It is obvious that the only basis for the plaintiffs’ claim that the alleged extension of the lines of the defendant to the Kansas City, Kansas, market will particularly injure them is that they do business upon the Kansas City, Missouri, market, and that if the proposed rival market in Kansas City, Kansas, functions, it will divert business from the market upon which they operate and will thus hurt them, their business, and their investments in Kansas City, Missouri, and that, since the proposed extension of its tracks by the defendant is necessary to enable the rival market to function, such extension will therefore injure the ‘plaintiffs. It seems equally obvious that, except for the fact that the proposed extension is essential to the operation of the rival market in Kansas, it could not possibly have any direct or immediate effect upon the plaintiffs, their property or their business in Missouri, other than the effect which a wasteful expenditure by the defendant of its money would have upon the public generally. The proximate cause of the injury to the plaintiffs will be the competition created by the construction and operation of the rival .market, and not the construction or operation of the transportation facilities furnished to it by the defendant or by others engaged in the transportation business.
It is the plaintiffs’ contention that any one whose welfare is adversely affected or threatened by the unauthorized extension of a railroad is a “party in interest” who may maintain such a suit as this.4 The defendant, on the other hand, contends broadly that no one is a “party in interest” who *496cannot point to the violation of some legal duty owing by the railroad to him.5
We concern ourselves only with the question whether the plaintiffs and Kansas City, Missouri, are “parties in interest” within the meaning of the statute authorizing “any party in interest” to maintain such a suit. This question, we think, is to be determined from the language of the Supreme Court of the United States in Western Pacific California Railroad Co. v. Southern Pacific Co., 284 U.S. 47, 52 S.Ct. 56, 76 L.Ed. 160, where the question was whether a railroad corporation without a railroad, but which had located its proposed line and had applied for authority to build it, was a “party in interest” within the meaning of the Transportation Act so that it might maintain a suit to enjoin an unauthorized extension into the territory which its proposed line was intended to serve. The Court, 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, said (284 U.S. at page 51, 52 S.Ct. at page 57, 76 L.Ed. 160):
“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 the competitor’s proposed action did not threaten 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.” [Emphasis purs.]
The plaintiffs have no definite legal right which is threatened. They are, however, persons whose welfare may be adversely affected by the bringing about of a material change in the transportation situation, in the sense that the extension proposed by the defendant, if built and operated, will enable a competitive market to function to their detriment. In that sense, we think it may safely be said that the proposed extension of defendant’s lines may adversely affect the plaintiffs’ welfare. We are of the opinion, however, that their complaint discloses that their welfare cannot be directly, but only indirectly and consequentially, affected by the proposed extension. They are not in competition with the defendant. They are not engaged in the transportation business. Their only pe*497culiar interest in that business is in the effect which changes in it may have upon the market where they do business and upon rival markets now or hereafter established in the territory which the plaintiffs serve.
A contention somewhat analogous to that here presented by the plaintiffs was ruled upon by this Court in Arkansas-Missouri Power Co. v. City of Kennett, 78 F.2d 911, in which the power company sought to attack the validity of a loan and grant made by the United States to the City of Kennett to enable it to enter into competition with the power company. We said (78 F.2d at page 914) : “The court below was of the opinion that the power company was in no position to question the power of the federal government to loan or give money to the city of Kennett. We are in accord. The United States is not proposing to become a competitor of the power company. It will have no right, title, or interest in the plant when completed and nothing to do with operating it. The destruction of the power company’s property will come about by reason of the city’s operation of the plant when erected. The position of the United States is that of a lender of money, a buyer of bonds, and a giver of gifts. True, the money procured from the government will enable the city to build the plant, and, if the city builds the plant, it will no doubt operate it, and when it does operate the plant the city will take the customers of the power company, and the company’s property in Kennett will become worthless or greatly impaired in value. We know of no rule of law, however, which permits one indirectly hurt, no matter how seriously, by a government expenditure, to question the power of the government to make it. In fact, the rule is to the contrary. Commonwealth of Massachusetts v. Mellon, Secretary of the Treasury, et al., 262 U.S. 447, 43 S.Ct. 597, 67 L.Ed. 1078; City of Allegan, Mich. v. Consumers’ Power Co., 6 [Cir.], 71 F.2d 477 (certiorari denied, 293 U.S. 586, 55 S. S.Ct. 100, 79 L.Ed. [681]). It is true that -in the cases cited the plaintiffs relied upon their status as taxpayers exclusively, while in this case the plaintiff relies, in addition, upon the injury which will be done to its property by municipal competition. That injury, however; is so far as the government is concerned, clearly consequential and indirect, as we have pointed out. See, also, Missouri Utilities Co. v. City of California, Mo., et al., (D.C.,) 8 F.Supp. 454, 465.” See, also, Moffat Tunnel League v. United States, 289 U.S. 113, 119-121, 53 S.Ct. 543, 77 L.Ed. 1069; Pittsburgh & West Virginia R. Co. v. United States, 281 U.S. 479, 487, 50 S.Ct. 378, 74 L.Ed 980; People v. Walsh, 343 Ill. 136, 174 N.E. 881, 882.
The complaint in intervention tendered by Kansas City, Missouri, shows that with respect to the proposed extension it stands in substantially the same position as the plaintiffs. Its market place will be injured by the establishment of the rival market, and taxable values in the City will decline with a resulting loss of revenue. The proposed extension, however, can only be the remote cause of the injuries which the City fears.
We realize that the meaning of the words “party in interest” as used in § 402, paragraph (20), of the Transportation Act might be expanded so as to include parties standing in the situation of these plaintiffs and of Kansas City, Missouri. We think that as yet persons in their situation have not been regarded as being “parties in interest” who may maintain a suit such as this. We conclude that the statute is not to be so liberally construed as to enable those who fear adverse effects upon their business from the establishment of competitive enterprises requiring transportation facilities, to maintain suits to enjoin railroads from constructing what are claimed to be unauthorized extensions to serve such enterprises.
The decree is affirmed.

 Rules of Civil Procedure for the District Courts of the United States, Rule 12(b)(6), 28 U.S.C.A. following section 723c.

 Ibid., Rule 12(d).

 20 F.Supp. 721.

 The plaintiffs rely upon: Western Pacific California R. Co. v. Southern Pacific Co., 284 U.S. 47, 52 S.Ct. 56, 76 L.Ed. 160; Detroit & M. R. Co. v. Boyne City, G. & A. R. Co., D.C., 286 F. 540; Claiborne-Annapolis Ferry Co. v. United States, 285 U.S. 382, 52 S.Ct. 440, 76 L.Ed. 808.

 The defendant relies upon: Alabama Power Co. v. Ickes, 302 U.S. 464, 58 S. Ct. 300, 82 L.Ed. 374; United States ex rel. New York Warehouse, Wharf & Terminal Ass’n v. Dern, 63 App.D.C. 28, 68 F.2d 773; Moffat Tunnel League v. United States, 289 U.S. 113, 53 S.Ct. 543, 77 L.Ed. 1069; Edward Hines Yellow Pine Trustees v. United States, 263 U.S. 143, 44 S.Ct. 72, 68 L.Ed. 216; Carolina Power & Light Co. v. South Carolina Public Service Authority, 4 Cir., 94 F.2d 520; West Tennessee Power & Light Co. v. City of Jackson, 6 Cir., 97 F.2d 979; Tennessee Electric Power Co. v. Tennessee Valley Authority, 306 U.S. 118, 59 S.Ct. 366, 83 L.Ed. 543; New Orleans, M. & T. Railroad Co. v. Ellerman, 105 U.S. 166, 26 L.Ed. 1015; Interstate Commerce Commission v. Chicago, R. I. & P. R. Co., 218 U.S. 88, 30 S.Ct. 651, 54 L.Ed. 946; St. Louis Southwestern Railway Co. v. Missouri Pacific R. Co., 289 U.S. 76, 53 S.Ct. 516, 77 L.Ed. 1042.