Court Opinion

ID: 9667724
Source: CourtListenerOpinion
Date Created: 2023-08-24 01:53:29.672076+00
Date Added: 2024-06-11T18:15:40.158772
License: Public Domain

WEINFELD, District Judge
(concurring).
I join in the opinion of the Court. However, I deem it appropriate to note an additional distinction between this case and Erie-Lackawanna R. R. v. United States.1 In the Erie case the Commission found that the public interest required protection of the three carriers against the adverse effects of the merger,2 and as a condition of consummation imposed specific protective terms 3 which it subsequently revoked ex parte, in my view without adequate supporting findings, as ,to one condition and left for future determination as to others.4 The terms and conditions as originally delineated by the Commission were a sine qua non of the merger.
In the instant case the Commission found that the overriding public interest requires the inclusion of New Haven, but left to the parties themselves the particular terms and conditions of the inclusion, subject to approval by the Commission and the Reorganization Court.5 Should the parties fail to agree, the Commission has retained jurisdiction to impose terms and conditions and the consummation of the merger by Penn-Central constitutes assent thereto; in addition, the matter is still subject to approval by the Reorganization Court.6
The Commission recognizes that the Penn-Central merger “could undoubtedly wean substantial traffic away from New Haven and leave that already moribund carrier in perhaps an irretrievable situation.” 7 Inclusion of New Haven to assure adequate freight and passenger service reflects the overriding public interest.8 The future determination of the particular terms thereof will not affect the public interest, although to be sure security holders, creditors and others who *396have a financial stake in New Haven’s existence will be affected. If creditor and other interests are dissatisfied with the terms and conditions worked out by the Reorganization Trustee, there is the double-barrelled protection by the Commission and the Reorganization Court. And even if, unrealistically, we assume that both the Commission and the Reorganization Court will foist upon these plaintiff bondholders terms detrimental to them,9 it does not follow that the public interest served by the New Haven will be adversely affected — on the contrary, not to include the Line in the merger may not only lead to its demise and the consequent elimination of its service to the public, but may well be totally destructive of the financial interest of some classes who have a stake in its survival.
In Erie, on the other hand, the terms and conditions left for future determination had, in my opinion, a vital bearing upon the public interest. Those terms, according to the Commission, were essential for the protection of the smaller carriers, the shippers, passengers and the communities they serve. By revoking them without adequate findings to support the change of position, the Commission undermined its own finding that the merger was consistent with the public interest only if the safeguards were provided ; by its action it brought into question the validity of its order authorizing immediate consummation of the merger. By leaving for further consideration the terms and conditions it previously held essential to consummation, it exposed the three carriers during the period the matter would be under consideration to the same adverse factors it found militated against the merger, absent adequate protective terms. In that circumstance I questioned the power of the Commission under section 5(2) (b) of the Act10 to defer until after consummation the determination of terms “found essential to validate this merger.”11

. 259 F.Supp. 964, S.D.N.Y., October 4, 1966.

. 327 I.C.C. 475, 529, 532 (1966).

. Id. at 532, 547 (1966).

. 328 I.C.C. 329 (1966).

. 327 I.C.C. 527, 553 (1966).

. Ibid.

. 327 I.C.C. 522 (1966).

. 327 I.C.C. 526-27 (1966).

. Cf. § 77(e) of the Bankruptcy Act, 11 U.S.C. § 205(e); St. Joe Paper Co. v. Atlantic Coast Lines, 347 U.S. 298, 74 S. Ct. 574, 98 L.Ed. 710 (1954).

. 49 U.S.C. § 5(2) (b).

. Erie-Lackawanna R.R. v. United States, supra note 1, at p. 968 of 259 P.Supp.