Court Opinion

ID: 6873326
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:04:19.446067+00
Date Added: 2024-06-11T16:05:26.988704
License: Public Domain

BRATTON, Circuit Judge
(dissenting).
Section 1 of the Railway Labor Act, as amended, 48 Stat. 1185, 45 U.S.C.A. § 151, defines the term “carrier” to include any express company, sleeping-car company, carrier by railroad subject to the Interstate Commerce Act, and any company which is directly or indirectly owned or controlled by or under common control with any carrier by railroad and which operates any equipment or facilities or performs any service in connection with the transportation, receipt, delivery, elevation, transfer in transit, refrigeration or icing, storage, and .handling of property transported by railroad. Immediately thereafter is a proviso that the term thus defined shall not include a street, interurban, or suburban electric railway unless it is operated as a part of a general steam-railroad system of transportation, but shall not exclude any part of the general steam-railroad system of transportation then or thereafter operated by any other motive power. A provision follows that the Interstate Commerce Commission is authorized and directed upon request of the Mediation Board or upon complaint of any party interested, to determine after hearing whether a line operated by electric power falls within the terms of the proviso. The eighth paragraph of section 2, 45 U.S.C.A. § 152, subd. 8, provides that every carrier shall notify its employees by printed notices in such form and posted at such times and places as the Mediation Board shall specify that all disputes between the carrier and its employees will be handled in accordance with the terms of the act; and further that such notices shall contain verbatim the third, fourth, and fifth paragraphs of the section. The tenth paragraph provides that the willful failure or refusal of any carrier to comply with the terms of the third, fourth, -fifth, seventh, and eighth paragraphs shall constitute a misdemeanor, and makes it the duty of any United States district attorney to whom a duly designated representative of the employees of a carrier may apply to institute and prosecute 'under the direction of the Attorney General necessary proceedings for the enforcement of the provision of the section.
Acting upon the request of the Mediation Board, proceedings were instituted before the Interstate Commerce Commission to determine whether plaintiff was an interurban electric railway within the meaning of the proviso contained in section 1. Following a full and fair hearing at which plaintiff was represented and introduced evidence, the Commission found and determined that the company was not such a railway. The Mediation Board then directed the company to post the formal notices prescribed in the eighth paragraph of section 2. It failed to comply with the order. Instead, it instituted this action against the United States attorney for the district of Utah, alleging at length that it was an interurban electric railway within the meaning of the exemption proviso and for that reason was not required to post the notices. It sought a declaratory judgment (1) that it was not a carrier as defined in the statute, but was an interurban electric railway, and (2) that it was not required to post the notices; and it sought an injunction restraining the United States attorney from instituting and prosecuting proceedings for violation of the act. The court found that, upon the evidence produced before the Commission, also upon the whole record made before the court, plaintiff was and is an interurban electric railway within the meaning of the exemption proviso; that the determination of the Commission that it was not such a railway was against and contrary to law; and that the United States attorney should be enjoined. But there was no express finding that the determination of the Commission was arbitrary, capricious, or unsupported by substantial evidence.
The Act of February 4,1887, created the Commission and enumerated its functions. 24 Stat. 379. Section 14, 49 U.S.C.A. § 14 note, provided that its findings made in connection with reparation due an injured party should be prima facie evidence of the facts found in any judicial proceeding; and section 16, 49 U.S.C.A. § 16 note, provided that on a hearing in a judicial proceeding involving a lawful administrative order or requirement affecting a carrier, the report of the Commission should be prima facie evi*918dence of the matters therein stated. These sections were re-enacted without change in that respect in 1889, 25 Stat. 855, 49 U.S. C.A. §§ 14, 16, notes, and while they were in force the findings made in connection with administrative orders regulating rates, or concerning discriminatory practices or other similar matters affecting carriers merely had prima facie effect in judicial proceedings. Cincinnati, New Orleans & Texas Pacific Ry. Co. v. Interstate Commerce Commission, 162 U.S. 184, 16 S.Ct. 700, 40 L.Ed. 935; Louisville & Nashville R. R. Co. v. Behlmer, 175 U.S. 648, 20 S.Ct. 209, 44 L.Ed. 309; Cincinnati, Hamilton & Dayton Ry. Co. v. Interstate Commerce Commission, 206 U.S. 142, 154, 27 S.Ct. 648, 51 L.Ed. 995. But the language giving prima facie effect to the findings made in respect to such administrative orders was eliminated from section 16 when it was amended in 1906. 34 Stat. 584. And no identical or similar provision has found its way into later enactments.
The effect of a finding made by the Commission since that change is not open to doubt. It is held by repeated decisions that a determination of fact relating to rates, discriminatory practices, and similar matters affecting, carriers is conclusive upon the courts if supported by substantial evidence, unless the action transcends the authority of the Commission or presents some other fatal irregularity. Interstate Commerce Commission v. Delaware, L. & W. R. R. Co., 220 U.S. 235, 31 S.Ct. 392, 55 L.Ed. 448; Interstate Commerce Commission v. Union Pacific R. R. Co., 222 U.S. 541, 32 S.Ct. 108, 56 L.Ed. 308; Interstate Commerce Commission v. Louisville & Nashville R. R. Co., 227 U.S. 88, 33 S.Ct. 185, 57 L.Ed. 431; Atchison, Topeka & Santa Fe Ry. Co. v. United States, 232 U.S. 199, 34 S.Ct. 291, 58 L.Ed. 568; Los Angeles Switching Case, Interstate Commerce Commission v. Atchison, T. & S. F. R. Co., 234 U.S. 294, 34 S.Ct. 814, 58 L.Ed. 1319; United States v. Louisville & Nashville R. R. Co., 235 U.S. 314, 35 S.Ct. 113, 59 L.Ed. 245; Pennsylvania Co. v. United States, 236 U.S. 351, 35 S.Ct. 370, 59 L.Ed. 616; Manufacturers’ Ry. Co. v. United States, 246 U.S. 457, 38 S.Ct. 383, 62 L.Ed. 831; Skinner & Eddy Corporation v. United States, 249 U.S. 557, 39 S.Ct. 375, 63 L.Ed. 772; Seaboard Air Line Ry. Co. v. United States, 254 U.S. 57, 41 S.Ct. 24, 65 L.Ed. 129; New England Divisions Case, Akron R. Co. v. U. S., 261 U.S. 184, 203, 43 S.Ct. 270, 277, 67 L.Ed. 605; Western Paper Makers’ Chemical Co. v. United States, 271 U.S. 268, 46 S.Ct. 500, 70 L.Ed. 941; Virginian Railway Co. v. United States, 272 U.S. 658, 47 S.Ct. 222, 71 L.Ed. 463; Standard Oil Co. v. United States, 283 U.S. 235, 51 S.Ct. 429, 75 L.Ed. 999; Florida v. United States, 292 U.S. 1, 12, 54 S.Ct. 603, 608, 78 L.Ed. 1077. A finding made by the Secretary of Agriculture concerning maximum rates for stockyards has like binding effect. That results from section 316 of the Packers and Stockyards Act, 42 Stat. 159, as amended, 7 U.S.C.A. § 217, which provides that suits to restrain or annul orders of the Secretary are governed by the provisions relating to review of orders of the Interstate Commerce Commission. St. Joseph Stock Yards Co. v. United States, 298 U.S. 38, 56 S.Ct. 720, 80 L.Ed. 1033. It is further settled that since the Shipping Act closely parallels the Interstate Commerce Act, each having created an administrative agency to whose informed judgment Congress committed the determination of questions of fact on the basis of which the making of administrative orders is authorized, a finding made by the Secretary of Commerce after the authority to administer the Shipping Act had been legally transferred to him is similarly binding. Swayne & Hoyt, Ltd., v. United States, 300 U.S. 297, 57 S.Ct. 478, 81 L.Ed. 659.
The Interstate Commerce Commission is an administrative body of long experience in dealing with rates, classifications, dis•criminatory practices and other cognate matters relating to carriers engaged in interstate commerce. Congress enacted the Railway Labor Act with knowledge of that experience, and of the fact that the findings of the Commission made in connection with orders affecting such questions were conclusive upon the courts if supported by evidence, unless the action went beyond the authority of the Commission. With that background, Congress committed the determination of the question whether a railway is an electric interurban within the meaning of the exemption proviso in section 1, to the well-informed judgment and recognized discretion of that administrative agency. It certainly was not the legislative intent that the determination should be utterly impotent and without effect when challenged by a dissatisfied carrier in a judicial proceeding to restrain the institution and prosecution of authorized actions for refusal to comply with the act after the determination has been made. No such idle and fruitless con*919sequence should be lightly ascribed to the deliberate.finding made upon careful examination and sifting of the facts by an informed agency of recognized discernment in that field, especially in wide departure from the effect of findings made by the agency under other enactments. On the contrary, the designation of the Commission as the agency to make the determination upon request of the Mediation Board or upon the complaint of any interested party, with requirement for a hearing, evinces a clear legislative intent by necessary implication that the determination should be con-elusive unless it is arbitrary, capricious, or unsupported by substantial evidence, or the proceedings fall outside the authority of the Commission. Any other conclusion would be in sharp conflict with the recognized doctrine that a determination of facts made after hearing by an administrative agency clothed with power shall be final if supported by substantial evidence.
Where judicial review is invoked to determine whether a determination of the Commission or other administrative agency constitutes the confiscation of property, courts'will exercise their independent judgment, but even in such circumstances appropriate regard should be given to the finding, St. Joseph Stock Yards Co. v. United States, supra. No question of that kind is involved here. The determination of the Commission was merely one of classification. Rates were not reduced, property was not valued, fair return was not fixed, and no other action of that kind was taken. The order of the Mediation Board merely directed the company to post the notices; it did not constitute confiscation of property. For that reason the case does not call for application of the rule requiring the exercise of the independent judgment of the court upon the question of fact submitted to the Commission.
Was the finding of the Commission arbitrary, or capricious, or made without substantial evidence to support it? The evidence presented little conflict. The line extending from Ogden to Preston is 94.63 miles in length, with two branches of approximately 7 and 14 miles, respectively, There are 36.93 miles of siding, spur, and yard tracks, making a total of 152.68 miles of standard gauge trackage, with 80 miles of 70-poúnd rail and 11 miles of 65-pound rail on the main line, 20 miles of 45 to 48-pound rail on the branches, and 26 miles of 48-pound rail on the sidings and spurs, the remainder varying from 40 to 85 pounds for comparatively short distances. The ties are 6 by 8 inches and 8 feet in length, spaced 2 feet between centers, and 11.3 miles of the main line are tie-plated. There are 70 places on the main line at which the grade breaks or changes. Outside the City of Ogden, the maximum grade is 2 per cent at several places for an aggregate of more than 18 miles, most of which is encountered in going over the Collinston Divide near the state line. The line makes a long circuit in going over the divide, and the sharpest curve on the main line is 12°. There are some curves on the spur tracks of 60° with a radius of 100 feet, and it is often necessary to switch the largest box cars'one at a time on such curves, but there is no restriction there or elsewhere on steam-railroad freight cars. Steam locomotives could not operate safely over many of the sidings or spur tracks. The carrier owns five 50-ton and two 35-ton electric locomotives which are used to haul its trains. It also has three self-propelled cars which have been constructed and equipped for hauling package freight and can be used to haul other cars when necessary. The larger locomotives have practical ratings generally of 550 tons to 650 tons, which means that they can haul 12 to 14 cars averaging 45 tons each, except at two or three places where such ratings are only 5 to 8 cars upgrade. A helper engine is used occasionally, but that is not the usual practice. Electric power is purchased, and the company owns and uses four substations having capacities ranging from 500 to 1,000 tons of load on their respective sections of the line. The company owns 100 gondola cars, 22 ballast cars, 18 box cars, 14 flat cars, 12 stock cars, and 7 refrigerator cars; but only 98 of the gondola cars and 1 flat car are interchangeable with steam railroads. Most of the interchangeable traffic is handled in standard equipment furnished by connecting railroads. Interchange connections are maintained with all trunk lines reaching Ogden, with the Oregon Short Line at several places, and with the Bamberger Railroad Company at Ogden. The principal cities served, with their respective populations, are Ogden 40,272, Brigham 5,093, Logan 9,979, Preston 3,381, and 14 other cities or incorporated towns having a population ranging from 275 to 2,353. Eighteen per cent, of the trackage lies in public roads or public streets. These thoroughfares are occupied under county and mu*920nicipal franchises which in varying language provide that the motive power shall be electric energy and they contain other interurban limitations. The balance of the trackage is on private right of way. The line traverses the Great Salt Lake Valley and the Cache Valley, being agricultural sections. The passenger trains consist of one or two cars which are self-propelled; and they averaged 1.1 cars per train in 1934. Stops are made at 73 places for passengers, of which 52 are flag stops, The average capacity of its sidings is less; the length of its trains less; the number and frequency of trains greater; the cost of operation for enginemen and trainmen more; the grades heavier; and the curves sharper than those of steam railroads, During recent years the company has' operated motorbus service parallel to its railway. In 1934, 408,634 passengers were carried, of whom 175,599 were students going to or returning from centrally located schools. The number of passengers transported by rail and the number by bus are not shown separately, but the daily average of trains was 11.5 and the daily average of busses was 4.1. The average fare paid ranged from 29.6 cents in 1931 to 20.7 cents in 1934. The passenger revenues declined every year since 1920. They were $448,184.01 in 1920, and only $61,346.25 in 1934, the reduction being due primarily to increased use of automobiles and paved highways. Interline tickets are not sold except in connection with other electric railways in Utah. Revenues from transporting baggage, mail, and express in 1934 were $39.48, $2,660.-30, and $5,931.50, respectively. The freight traffic consists to a very large extent in the transportation of sugar beets, milk, potatoes, and peas, moving to factories, canneries, or processing plants, and manufactured products outbound from such plants to connecting railroads. In 1934 the freight trains averaged 6.2 cars each, and the number of trains per day averaged 7.7. During the last half of that year, 6,354 carloads of freight were handled, 2,226 being local and 4,017 being interchanged with other carriers. Of the interchange traffic, 2,075 carloads moved to or from points in Utah, and 1,942 to or from points in other states. Traffic orig-mating on the system moved to points in 31 states and traffic delivered to the company came from points in 26 states. Freight revenues have greatly exceeded passenger revenues in every year since 1918. They were twice greater in 1926, three times greater in 1928 and 1929, four times greater in 1930 and 1931, five times greater in 1932, and more than six times greater in 1933 and 1934. In 1930 to 1934, in-elusive, freight revenues were approximately 81.9 per cent, and passenger revenues 18.1 per cent, of the total revenues. The company is a party to practically all of the tariffs publishing through rates to or from that territory, and its interchange traffic generally moves on joint rates, but it does not perform any intermediate service between other lines. It had an average of 150 employees during the year 1934.
The Interstate Commerce Commission had occasion to determine in at least two instances prior to the enactment of the Railway Labor Act whether a given railroad was an electric interurban. It held that while other elements should be given appropriate weight, one of the major factors in making the determination is the ratio of revenue derived from the transportation of passengers to. that derived from the hauling of freight, and that ordinarily where the latter substantially exceeds the former the railroad should not be classed as an electric interurban within the meaning of the Interstate Commerce Act, 49 U.S.C.A. § 1 et seq. In re Proposed Control of Sacramento Northern Railway by W. P. R. R., 71 I. C. C. 653; Id., 79 I. C. C. 782; In re Application of Section 15a to Electric Rys.,' 86 I. C. C. 751. It must be assumed that Congress was familiar with these determinations and acquiesced in them when it provided in the Railway Labor Act that the Commission should determine upon request of the Mediation Board whether a given railroad is an electric interurban within the purview of the exemption proviso.
The question presented in Piedmont & Northern Ry. Co. v. Interstate Commerce Commission, 286 U.S. 299, 52 S.Ct. 541, 543, 76 L.Ed. 1115, was whether the cornpany was an interurban electric railway. Its standard gauge tracks were constructed of 80-pound rails. Slightly more than 2 per cent, of the trackage was located in city streets and the balance was on private right of way; and the line usually went around cities rather than through them. The company owned 17 electric locomotives ranging in weight from 55.to 100 tons, and 287 freight cars which were regularly interchanged with steam railroads. Approximately 85 per cent, of the *921total investment in equipment represented expenditures for locomotives and interchangeable freight cars used exclusively for the transportation of freight. Foreign line freight equipment of every kind flowed freely over the road. Freight trains usually consisted of 40 to 50 cars; and by doubling, 65 cars could be drawn in a train. Through and local freight trains were operated in the same manner as those of steam railroads. The company filed individual tariffs and it was a party to others. From the outset its freight revenues. were large, while its passenger traffic progressively decreased. During the year ending June 30, 1929, its freight revenues were 94.5 per cent, and its passenger revenues were 2.9 per cent, of its total revenues. For 1929, 4.3 per cent, of the total freight revenue arose from local freight and 95.7 per cent, from interline freight. More than 80 per cent, of the freight moving over its line was interstate and less than 20 per cent, intrastate. It was held that the railway was of such importance in interstate commerce and rendered a service which was so predominantly devoted to the handling of interstate freight, and competed to such an extent with steam trunk line that it could not be said to be an interurban within the meaning of the provision in the Interstate Commerce Act in question. The controlling features which define an electric interurban and distinguish it from other types of carriers were delimited and blueprinted in this language: “No difficulty is encountered in defining a street or a suburban electric railway. These are essentially local, are fundamentally passenger carriers, are to an inconsiderable extent engaged in interstate carriage, and transact freight business only incidentally and in a small volume. The record indicates that prior to 1920 such street or suburban railways had grown in many instances so as to link distinct communities, and that, in addition, so-called interurban lines were constructed from time to time, to serve the convenience of two or more cities. But the characteristics of street or suburban railways persisted in these interurban lines. They also were chiefly devoted to passenger traffic and operated single or series self-propelled cars. Many of them carried package freight, some also transported mail, and still fewer carload freight picked up along the- line or received for local delivery from connecting steam railroads. It is clear that the phrase ‘interurban electric railway’ was not, in 1920, commonly used to designate a carrier whose major activity was the transportation of interstate freight in trains of standard freight cars. It cannot be said, therefore, that, if a railway is operated by electricity and extends between cities paragraph (22), clearly and unequivocally exempts it from the Commission’s jurisdiction.”
It was held in United States v. Chicago North Shore & Milwaukee R. R. Co., 288 U. S. 1, 53 S.Ct. 245, 77 L.Ed. 583, that the carrier was an electric interurban within the meaning of section 20a of the Interstate Commerce Act, 49 U.S.C.A. § 20a, but there fast electric passenger traffic was the primary function of the carrier. Freight business was secondary and subsidiary when measured by car service and gross earnings. In 1930 and for several years prior thereto, about three-fourths of its revenue came from passenger traffic and about one-fourth from freight. The main terminals served only passenger and merchandise freight traffic. No facilities were maintained at the termini in Chicago and Milwaukee for receipt and delivery of carload freight. Connections for the interchange of such freight were provided outside those industrial centers. The facts there were substantially and decisively different from those presented here.
The majority take notice of the fact that agencies of the government have treated the company as an interurban electric road. The method of accounting prescribed for railways of that kind has been used without complaint from the Interstate Commerce Commission. The company sold an issue of bonds without securing approval of the Commission and no protest was made; and the Postmaster General has dealt with it as such a railway in respect to the transportation of mail. But administrative classification touching other matters is not decisive, Piedmont & Northern Ry. Co. v. Interstate Commerce Commission, supra; and inconsistency of the finding in question with those made on other occasions is not controlling. Virginian Ry. Co. v. United States, supra.
The finding of the Commission was not arbitrary, or capricious, or made without substantial evidence to support it. It is, therefore, conclusive upon the courts. The decree should be reversed.