# Appellants Reply Brief — RICHARD JOYCE SMITH, etc. v. U.S. (Nos. 74-166, 74-165, 74-167, 74-168)

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385003_0170%3A4

## Record

- **Collection:** Supreme Court brief
- **Document type:** Appellants Reply Brief
- **Published:** January 1, 1974

## Text

Supreme Court, U.
FILED

OCT 10 1974

In The WICHAEL ROCA, . OT
Supreme Court of the Anited States

OCTOBER TERM, 1974

No. 74—166
REGIONAL RAIL REORGANIZATION CASES

— ~
— *

RICHARD JOYCE SMITH, Trustee of the Property
of
The New York, New Haven and Hanford
Railroad Company, Debtor, Cross-Appellant

vu.

UNITED STATES OF AMERICA, a.
Cross-A ppellees

ON CROSS-APPEAL FROM THE
JUDGMENT OF THE UNITED STATES
DISTRICT COURT FOR THE
EASTERN DISTRICT OF PENNSYLVANIA

REPLY BRIEF OF
CROSS-APPELLANT
Of Counsel: JOSEPH AUERBACH
225 Franklin Street

MORRIS RAKER Boston, Massachusetts
CHARLES W. MORSE, JR. 02110
SULLIVAN & WORCESTER JAMES WM. Moore

225 Franklin Street 54 Meadow Street

Boston, Massachusetts New Haven, Connecticut

02110 06506

Attorneys for Appellant
Richard — Smith, Trustee

of the Property of The New
York, New Haven and Hartford
Railroad Company, Debtor

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PART ONE: ARGUME™T IN REPLY TO
CROSS-APPELLEES:

THE CONSTITUTIONAL ISSUES
RAISED BY THE CROSS-APPEAL ARE
RIPE FOR ADJUDICATION ............

A. The Existence of a Tucker Act
Remedy Not Operate to Make Con-
stitutional Issues Premature Because an
Action for an Inadequately Compensated
Taking Will Lie Only if the RRRA Is
CREE v v.c'c ov ecncatdacsede tues ce

B. The New Haven Trustee Will Not Have a
“Later and Better unity” to Have
an Adjudication of His Claim that the
RRRA's Compulsory Conveyance Provi-
sions Are Unconstitutional .............

THE NEW HAVEN TRUSTEE, AS A SE-
CURED CREDITOR OF PENN CEN-
TRAL, HAS STANDING TO ASSERT
PENN CENTRAL'S RIGHTS UNDER
THE FIFTH AMENDMENT. AS WELL AS
HIS OWN RIGHTS, SINCE DI-
VESTMENT OF HIS LIENS BY §303(b)(2)
OF THE RRRA IS A TAKING OF HIS
PROPERTY WITHOUT JUST COMPEN-
. eee eee

THE RRRA, CONSIDERED AS A RE-
ORGANIZATION STATUTE, IS
INVALID AS A VIOLATION OF THE
FIFTH AuENDMENTS DUE PROCESS
AND TAKINGS CLAUSES ..............

IV. PENN CENTRAL IS ENTITLED TO RE-

CEIVE THE HIGHEST AND BEST USE
VALUE OF ITS PROPERTIES AS A COM-
PLETE TRANSPORTATION SYSTEM IN
MONEY OR ITS PERFECT EQUIV-
ALENT; THE NEW HAVEN TRU 18
ENTITLED TO FORECLOSURE ON HIS
LIENED PROPERTY, OR THE FAIR
VALUE THERREo rk

A. The Railroad Enterprise Which Would
Survive the RRRA, if It Is Not Enjoined,
Will Be in Substance a Public Authority .

Eminent Domain Power, Require Appli-
cation of Principles of Condemnation
Law to Determine Whether Payment of
the “Constitutional Minimum” is Assured
C. Penn Central's Rail Properties Have a

1
than the “Bare Bones Liquidation Value

Have it Both Ways—Ei the RRRA Is
an Unconstituti to Take Pri-
vate Property Without ising Em-
inent Domain Powers; or the is
Equivalent to Nationalization of Penn
8 ———

. THE LACK OF PRE-CONVEYANCE JU-
DICIAL REVIEW OF THE FAIRN

AND EQUITY OF THE MANDATORY
= ANCES OFFENDS DUE PRO-

10

10

12

13

PART TWO: LEGAL ANALYSIS OF SPECIAL
COURT'S SEPTEMBER 30, 1974 DECISION,
IN THE MATTER OF PENN CENTRAL
TRANSPORTATION CO. (No. 74-8):

II.
10

PROCEDURAL STATUS OF SPECIAL
COURT'S DECISION IN RELATION TO
ae APPEALS AND CROSS-

——— ß!k 33

C. Collateral Estoppe l
D. The Requirement of Uniformity ........

E. Fair and i Process — General Con-
: id Equitable

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F. Erosion of Investors’ Rights

2 . n
Consideration ...........

2 — of a Remedy Under the
Tucker Act

rr Uwe „

—U—Uũ ꝶꝶ * *

iv

TABLE OF CITATIONS

Page
CASES:
Armstrong v. United States, 364 U.S. 40 (1960) . 7,21
ia v. General Motors 169 F. 2d 254
(2d Cir.), cert. denied, 335 U.S. 887 (1948) . 31
Bauman v. Ross, 168 U.S. 548 (1897) ........ 4a
Brooks-Scanlon Co. v. Railroad Commission, 251
N 7 E 37
Bullock v. Railroad Commission of Florida, 254
1K dbeceenseee és 37
Catlin v. United States, 324 U.S. 229 (194. 23-24
Chicago & Southern Airlines v. Waterman SS.
Corp 333 U.S. 103 (1948) ............... 30
Cyd Game ' Omaha Water Co, 218 U.S.
1K464c— e 10
Denver v. Denver. Union Water Co. 246 U.S.
KK AA 16
Des Moines Gas Co. v. City of Des Moines, 238
% ͤ aye 16
E v. United States, 372 F. 2d
152 A & r 42
Federal Power Commission v. Hope Natural Gas
Co, 320 U.S. 591 (198900 41
Group of Institutional Investors v. Chicago, M.
St P. & Pac. R.R., 318 U.S. 523 (194 40
ssn v. Stafford, 360 F.
Sapp. 1087 ( (S. D 5 N . 1973), affd - F. 2d
FF 38
Hayburn Case, 2 U.S. (2 Dall.) 409 (1792) 30
Hurley v. — 285 U.S. 95 (19322 43

In re City of New York (Fifth Avenue Coach
14 18 N.Y. 2d 212. 219 N. E. 2d 410,
appeal dismissed sub. nom. Fifth Avenue Coach
Lines v. City of New York, 386 U.S. 778
2 . 13 et passim

In re City of New York (Fifth Avenue Coach
Lines), 22 N.Y. 2d 613, 241 N.E. 2d 717
1 —— 16

In re 1. ion Under the RRRA of 1973,
. 166 J. P. M. I. March 25, 1974)

„5 eae aes a: .
793, 304 F. Su 2 ),
aff'd in part, rev „ sub nom. New Ha-
ven — Cases, U.S. 392 (1970) .

In re Penn Central Transportation Co. (Park **
„ „ 484 F. 2d 323 (3d 1 cert.

nom. Baker v. Morgan G
ER 42 U.S.L.W. 3334 wits
Te Ge ED conned eee

In re Port A Trans-Hudson Corp., 20
N.Y. 2d 457, 231 N.E. 2d 743, cert. denied
sub. nom. Port Authority Trans-Hudson
1 1

In the Matter urt, ‘Regional Rail’ Re
onganiat ay ional Rail Re-

et al.
3 r

3 v. United States, 338 U.S. 1
GENEED waccccovsncedeséegeennstesevesees

Larson z. Domestic & Foreign Commerce Corp.
fF fF ey eere

Lockerty v. Phillips, 319 U.S. 182 (1943)
Lynch u. United States 292 U.S. 571 (1934)
Malone v. Bowdoin, 369 U.S. 643 (1962)
McGrath v. Kristensen, 340 U.S. 162 (1950) ...
Meas US. 312 ¢ ) i a
National Mutual Ins. Co. v. Tidewater Transfer

Co, 337 U.S. 582 (194ũ 99

New Haven Inclusion Cases, 399 U.S. 392
RRS peer IE

New York, NH. & H. RR. 1st Mortgage 4%
Bondholders’ Committee v. United States, 305
a4. 1049 (S.D.N.Y. 1909), ee rev'd sub

ew Haven Inclusion Cases, 399 U.S.
392 (1970) Klee

Palmer v. Massachusetts, 308 U.S. 79 (19399

4-5, 33

13, 16-17, 19

5 et passim
16

vi

Page
Railroad Commission v. Eastern Texas R.R., 204

.. wacccccccocesecescscenece 37
Roberts v. City of New York, 295 U.S. 264

eee tees 18
Textile Workers Umon v. Lincoln Mills, 353 U.S.

neee eee e eee 30
United States v. Causby, 328 U.S. 256 (1946) . 43
United States v. Commodities Trading Corp., 339

Cs GS QUOD hac cccctccccccccccccces 16
United States v. King, 395 U.S. 1 (1969) ...... 31, 44, 45
United States v. Klein, 80 U.S. (13 Wall.) 128

.at eee sees ese 31
United States v. Lee, 106 U.S. 196 (1882) ..... 43
United States v. 1000 Acres of Land, More or

Less, in ines Parish, 162 F. Supp.

219 (E.D. La. 1959) cece eens 44
United States v. Sherwood, 312 U.S. 584 (1941) 31, 44, 45
Wright v. Union Central Life Ins. Co, 311 U.S.

„rr 19

Yakus v. United States, 321 U.S. 414 (1944) . 30, 31
You m Sheet S Tube Co., v. Sawyer, 343

Gs BU SOURED wicvccrcenccnvecececocecs 42-43

ADMINISTRATIVE DECISIONS:

Penn Central 1— Sos Company Re-
organization, Report on nization
Plans Finance Bocket No. 30840 (ICC,

— e 37
Pen ma R.R.—M —New York Central

RR. 334 1. C. C. 25 (1969) 35-36

CONSTITUTIONAL PROVISIONS AND STATUTES:
Constitution of the United States:
Anticle I, Sec. 8, Cl. 4 (Bankruptcy Clause) 8, 10, 46
REED GED. 60 vinccccscccseccccvccesguccs

ee

29, 31, 33,
48

2 et passim
18

vii

Statutes:
Bankruptcy Act:
Section 77, 11 U.S.C. §205 ............

Judicial Codec, 28 U.S.C.
1491 (Tucker Act)

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National Environmental Policy Act of
1969, 42 U.S.C. §§4321 ef seg. .........

nolo Rail ization Act of 1973,
blic Law 93-239, 87 Stat. 985, 45
U.S.C. §§701 et seq.:

207(b) ů ä

“eee eee 2—·et 3335333333333 *

MISCELLANEOUS:

Hart & Wechsler, The Federal Courts and the
Federal System (2d Ed. 1973) ............

Press Release of USB A, Gis of Puls one
Governmental airs, Options
1—— Industry — "August 22.

—y[— K˖ e K * * * * * * * ee eee

Press Release of USRA, Office of Public and
Governmental Affairs, September 30, 1974

=

5
e ' and

5. In deciding this cross-appeal and the related ap-
peals the Court can properly disregard the Special
Court's §207(b) decision on the ground that the de-
cision below in Connecticut General was binding as to
the constitutional issues decided and that, in other re-
spects, the decision of the Special Court is not relevant
to the issues here before the Court.

The order sought here by the New Haven Trustee
will presumably cause the Special Court to modify its
§207(b) order dated September 30, 1974 so as to af-
firm Order No. 1596 of the Penn Central Re-
organization Court (JA 152), thus precluding appli-
cation of the RRRA to Penn Central.

See New Haven Trustee's brief as Cross-Appellant at 107-09 for
the precise terms of the order requested.

48

If after hearing argument of the instant appeals
and cross-appeals, the Court were to consider that the
RRRA is facially constitutional as to both its interim
erosion and compulsory conveyance aspects, there
would still remain issues determined by the Special
Court as to the fairness and equity of the process of
the RRRA, which urgently require review because of
their constitutional implications. The record in the
Special Court’s §207(b) proceedings would then be re-
quired in order to adjudicate definitively all aspects of
the case, including the issue of availability of a sub-
stantively adequate Tucker Act remedy, and it would
be proper for the Court to withhold its decision in
these cases pending a decision to review, pursuant to a
writ of certiorari to the Special Court under 28 U.S.C.
§1651, the Special Court’s §207(b) order:“ in such
event, the petition for review of the Special Court’s or-
der could be consolidated with the instant appeals and
cross-appeal for decision on the ments. The Court
would thus be in a position to review the issue of
whether or not the RRRA provides 2 process which is
fair and equitable, an issue which must be reached in
the event that the Court determines that a Tucker Act
action exists, but otherwise need not be decided.

The New Haven Trustee plans to file with the Court, as soon as
ible in the premises, such a petition for a writ of certiorari under 28
S.C. §1651 to review the Special Courts §207(b) order. The petition
will assert that this Court has jurisdiction to issue the writ in aid of its ap-
pellate jurisdiction under §303(d); that there is no other —— provi-
sion whereby the decision of the ial Court can be revi by the
Court; that the last sentence of §207(b) of the RRRA purporting to pre-
clude appellate review of the Special Court's §207(b) decision is void for
repugnance to the Constitution; that §207(b) confers jurisdiction im-
in view of the constraints of Article III of the Constitution; and
that the Special Court's decision on the merits was erroneous, based on
errors of law and errors of fact.

October 10, 1974
Of Counsel:

Monkis RAKER
CHARLES W. MORSE, JR.

SULLIVAN & WORCESTER
225 Franklin Street
Boston, Massachusetts

02110

49

Respectfully submitted,

JOSEPH AUERBACH
225 Franklin Street
Boston, Massachusetts

02110

JAMES WM. Moore
54 Meadow Street
New Haven, Connecticut
06506

Attorneys for A nt

Richard Joyce Smith, Trustee ~

of the Property The New York,
New P San ap and Hartford Railroad

Company, Debtor

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385003_0170%3A4. Public record. Not legal advice.