Petition — Alco-Gravure, Inc. v. Baltimore & Annapolis Railroad
Supreme Court brief1976
Ask Donna
What actually matters in this document.
Text
OO a ao
In The
Supreme Court of the
6-64
October Term, 1976
No.
ALCO-GRAVURE, INC.,
Appellant Below and Petitioner,
vs.
THE BALTIMORE AND ANNAPOLIS RAILROAD
COMPANY AND ELMER J. JUBB,
Appellees Below and Respondents,
and
INTERSTATE COMMERCE COMMISSION,
Appellani Below and Respondent.
PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF
APPEALS FOR THE FOURTH CIRCUIT
JOHN J. WALSH
EARL H. NEMSER
Attorneys for Petitioner
One Wall Street
New York, New York 10005
(212) 785-1000
CADWALADER, WICKERSHAM & TAFT
Of Counsel
TABL¢® OF CONTENTS
Page
EE SD nck crn pdde Wdncdodsdecduddcdseccceccens 2
p EP PEET PPP T TT TET ET TINITITETULTL LTTE Teer 2
GeGats PUTING wp cvcccccccccccvcecesceveccvccccces 2
Statutes Involved ......... - obec Sbdecebededecdeccccces 3
Statement Of the Case oo. cessicceccccscicvadeccedvecses 3
Reasons for Granting the WEE Se wsdetcceddccesdvedcedes 7
I. The Court of Appeals has decided two important
federal questions which have not been, but should
Ce, GERI Or GE GI, cc tcccvcccccénectsocce 7
II. The decision below is in direct conflict with the
decision of another Court of Appeals and principles
established by other Courts of Appeals on the issue
of administrative res judicata. .......eeeeeeeeees 11
Ill. The decision below has decided two federal questions
in conflict with prior decisions of this Court. .... 12
A ee ee ee A ee 14
TABLE OF CITATIONS
Cases Cited:
Ahrens v. Commercial Nat. Bank, 100 Okla. 250, 229 P.
DPD Sisvasekens i chbhewdhhsen eeedhadensnes ~
ii
Contents
Page
Asbury v. Chesapeake & O. Ry., 314 F. Supp. 310 (D.D.C.
BE ax Uhede6601 506806 bisbeanesebncdiveuniauens 8
Baltimore & O. R.R. v. Brady, 288 U.S. 448 (1933) ........ 9
Chicago, R.I. & P. Ry. v. Schendel, 270 U.S. 611 (1926)
edndecceb sper bc cavessessesesenassoncnenianetaeeel 9, 10
Dennison v. Payne, 293 F. 333 (2d Cir. 1923) ............. 12
Frederichsen v. Renard, 247 U.S. 207 (1918) .............. 8
1.C.C. v. Baltimore & A.R.R., 64 F.R.D. 337 (D. Md. 1974)
pON adhd A RAENNS bbe ks eeneeseneddesdcdeedsbees babes 5
Johnson v. Chicago, M., St. P., & Pac. R.R., 400 F.2d 968
See GN SENET. 0 bn 0.0é.nns Middhed dateeddidiodanideéide 13
Landreth v. Wabash Ry., 153 F.2d 98 (7th Cir. 1946) ...... 12
Nader v. Allegheny Airlines, Inc., 44 U.S.L.W. 4803 (U.S.
EE Ee SD. ko bin adinkedh cin edelebeisalindinees 13
Pillsbury v. Alaska Packers Ass’n, 85 F.2d 758 (9th Cir.
Se nde eebhs eoncnncdbdedcdses démmetdidebceies 12
Sears, Roebuck & Co. v. Blade, 123 F. Supp. 131 (S.D.
Sy SE Aibdh cancenesnbedeedduedudeesseusuoes eis 6
Seatrain Lines, Inc. v. Pennsylvania Ry., 207 F.2d 255 1344
EEE Sndliidedentek dun cdduéaneodsdee cceumneis ie 11
Standard Oil Co. v. United States, 283 U.S. 235 (1931) ..... 9
Stoll v. Gottlieb, 305 U.S. 165 (1938)
iii
Contents
Page
Sunshine Anthracite Coal Co. v. Adkins, 310 U.S. 351
¢ Y |) ee 10, 11
Terminal Warehouse v. Pennsylvania Ry., 297 U.S. 500
(1. .) sn 13
Treinies v. Sunshine Mining Co., 308 U.S. 66 (1939) ....... 1C
Wm. W. Bierce, Ltd. v. Hutchins, 205 U.S. 340 (1907) .... .6,9
Statutes and Rules Cited:
Interstate Commerce Act, 49 U.S.C. §§ 1 et seg. (1970) .....
2, 3, 4, 5, 6, 7, 8, 9, 12, 13
ICC General Rules of Practice appended to 49 U.S.C.:
Rule 101(aX2) .... cece eee cee eecceeececereeeseecees 5
Rule 101(aX3) «1... cece eeeeeccceeeeceeeneceeneeees 5
Judiciary and Judicial Procedure, 28 U.S.C. §§1254(1)
OGM, URS III aca ce scccccnvdcecccdecccgncs 5
Railroad Pevitalization and Regulatory Reform Act of 1976,
P.L. 94-210, 90 Stat. 31 (Feb. 5, 1976) ......... --+- 47,9
iv
Contents
on —
Other Authorities Cited:
2 Davis, Administrative Law Treatise, §18.07 at 594 (1970)
Groner and Sternstein, Res Judicata in Federal Admin-
istration Law, 39 Iowa L. Rev. 300 (1954) ............ 1]
Note, Jurisdiction and Collateral Attack: October Term,
1939, 40 Colum. L. Rev. 1006 (1940) ..............0.. 10
APPENDIX
Appendix A—Opinion of United States Court of Appeals
Coesocccccccecepoecrentecenseseneesecebooseeneeene la
Appendix B—Opinion and Orders of the United States Dis-
CONES CeEE oc vorccccveccencessdeseseosunensaeeeeen fa
Appendix C—lInterstate Commerce Act, Sections 1(4), 8
and 22, 49 U.S.C. §§1(4), 8, 9, and 22(1) ............. 34a
Appendix D—Findings and Order of Administrative Law
PEERD cccccccvcvcccenseteuencesasesnnen uaa 39a
Appendix E—Opinion and Order of Review Board .... .. 42a
Appendix F—Order of Appellate Division ................ 49a
In The
Supreme Court of the United States
o—
October Term, 1976
No.
ALCO-GRAVURE, INC.,
Appellant Below and Petitioner,
vs.
THE BALTIMORE AND ANNAPOLIS RAILROAD
COMPANY AND ELMER J. JUBB,
Appellees Below and Respondents,
and
INTERSTATE COMMERCE COMMISSION,
Appellant Below and Respondent.
PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS FOR THE
FOURTH CIRCUIT
Petitioner Alco-Gravure, Inc. prays that a writ of certiorari
issue to review the judgment of the United States Court of
Appeals for the Fourth Circuit entered on April 19, 1976
affirming a dismissal of petitioner’s claim for damages.
2
OPINIONS BELOW
The United States Court of Appeals for the Fourth Circuit
affirmed per curiam the District Court. This opinion is annexed
as Appendix A. The opinion of the United States District Court
for the District of Maryland dismissing petitioner’s claim for
damages is reported at 398 F. Supp. 454 (1975). This opinion is
annexed as Appendix B.
JURISDICTION
The judgment of the Court of Appeals dismissing
petitioner’s damage claim was entered on April 19, 1976. The
jurisdiction of this Court is invoked under 28 U.S.C. §1254(1)
(1966).
QUESTIONS PRESENTED
(1) If a shipper’s complaint against a rail carrier for
damages before the Interstate Commerce Commission is by final
order of the Commission dismissed for lack of subject matter
jurisdiction, may the shipper bring suit for damages in the
District Court, or is that suit barred by the election of remedies
provision of Section 9 of the Interstate Commerce Act, 49
U.S.C. §9 (Supp. 1976)?
(2) Is an administrative agency’s final order in a contested
adjudicatory proceeding which determined that the agency
lacked subject matter jurisdiction res judicata in a subsequent
civil suit in the District Court seeking the same relief, or is the
agency’s final order of no binding effect because no party to
such proceeding sought direct judicial review?
(3) Can the election of remedies provision of Section 9 of
the Interstate Commerce Act, 49 U.S.C. §9 (Supp. 1976), bar a
common law action for damages or is such common law action
saved by Section 22(1) of the Act, 49 U.S.C. §22(1) (Supp.
3
1976), which provides that the Act shall not abridge or alter
common law remedies?
(4) May one who was not a party in an Interstate
Commerce Commission proceeding invoke that proceeding and
the election of remedies provision of Section 9 of the Interstate
Commerce Act, 49 U.S.C. §9 (Supp. 1976), to bar a subsequent
suit against him in the District Court?
STATUTES INVOLVED
The statutes involved are Sections 1(4), 8, 9 and 22(1) of the
Interstate Commerce Act, 49 U.S.C. §§1(4), 8 (1959), 9 and 22(1)
(Supp. 1976). These statutory provisions are annexed as
Appendix C.
STATEMENT OF THE CASE
Petitioner Alco-Gravure, Inc. (“Alco”) seeks review of the
decision of the Court of Appeals which affirmed the District
Court’s dismissal of its damage claim against respondents The
Baltimore and Annapolis Railroad Company (“B&A”) and its
President, Elmer J. Jubb (“Jubb”).
B&A is a common carrier by railroad subject to the
provisions of Part I of the Interstate Commerce Act (“Act”), 49
U.S.C. §§1(1) et seq. Alco utilized the rail freight service of B&A
as a shipper to and from its Glen Burnie, Maryland printing
plant until June, 1972, when B&A embargoed all traffic on its
line because of damage to its rail facilities caused by Hurricane
Agnes. Thereafter B&A refused to restore service to Alco.
On September 26, 1972, Alco commenced a formal
complaint proceeding before the Interstate Commerce
Commission against only respondent B&A seeking an order
requiring B&A to restore rail service to Alco and to pay to Alco
the damages it incurred in consequence of B&A’s unlawful
4
cessation of rail service. This complaint was based upon, inter
alia, B&A’s violation of Section 1(4) of the Act.!
On April 24, 1974 a Commission Administrative Law Judge
rendered an Initial Decision on Alco’s formal complaint wherein
he found, inter alia, that B&A unlawfully abandoned rail
operations in violation of Sections 1(4) and 1(18) of the Act.
Pursuant to Section 1(4) of the Act, he ordered that B&A’s
embargo be cancelled, that rail service be restored to Alco, but
found that the Commission lacked subject matter jurisdiction to
award the damages Alco sought. Having found that the
Commission was without jurisdiction to enforce Section 1(18) of
the Act, he referred the matter to the Commission’s Bureau of
Enforcement to bring suit in the District Court under Section
1(20) of the Act to seek to enjoin B&A’s unlawful abandonment
of rail operations. The Administrative aw Judge’s findings and
order are annexed as Appendix D.
On July 25, 1974, the Commissicn brought suit in the
District Court against B&A and Jubb pursuant to Section 1(20)
of the Act seeking a preliminary and permanent injunction
restraining the unlawful abandonment of B&A rail operations.
On July 31, 1974 Alco moved to intervene as a plaintiff in this
action and filed a proposed complaint seeking only injunctive
relief pursuant to Section 1(20) of the Act.
1. On January 11, 1973 B&A filed an application before the Commission pursuant
to Section 1(18) of the Act, 49 U.S.C. §1(18) (1959), for a certificate of public
convenience and necessity permitting abandonment of rail operations. On May 26, 1976
the Commission denied B&A’s application insofar as it sought to abandon operations
which served Alco. Commission Docket No. AB-71. B&A has not sought review of this
decision. Section 1(18) of the Act has been amended by Title VIII, Section 801(a) of the
Railroad Revitalization and Regulatory Reform Act of 1976, P.L. 94-210, 90 Stat. 31
(Feb. 5, 1976). The relevant language concerning abandonment of raii Operations was
amended by Section 802 of such act and now appears in 49 U.S.C. $1(aX(1) (1976). The
companion enforcement section which was Section 1(20) of the Act, 49 U.S.C. $1(20)
(1959), has been repealed by Section 801(b) of such act and the relevant enforcement
language was amended by Section 802 of such act and now appears in 49 U.S.C. §1(aX9)
(1976). These new provisions have no effect upon the questions presented in this petition.
5
On August 22, 1974, almost two years after Alco filed
before the Commission its formal complaint seeking damages,
the Commission’s Review Board adopted the position urged by
B&A and dismissed Alco’s complaint for lack of subject matter
jurisdiction. This opinion and order is annexed as Appendix E.
This was not a final Commission order. Rule 101(a)(2) ICC
General Rules of Practice appended to 49 U.S.C.
~
On August 26, 1974 the District Court denied the
Commission’s motion for a preliminary injunction and granted
Alco’s motion to intervene. /.C.C. v. Baltimore & A.R.R., 64
F.R.D. 337 (D. Md. 1974). The District Court indicated that i
was “not likely to reach this case on the merits until early 1975.
Id. at 345.
On August 30, 1974, while it could still amend its complaint
in the District Court as of right and within the applicable statute
of limitations, and having to that point been denied any damage
relief by the Commission on jurisdictional grounds, Alco
amended its complaint to include a claim against B&A and
Jubb, as an aider and abettor, for damages based upon, inter
alia, violations of Section 1(4) of the Act and common law
duties.
On January 16, 1975, the Commission’s Appellate Division
denied Alco’s petition for reconsideration of the Review Board
decision. This order is annexed as Appendix F. This was 2 final
Commission order. Rule 10i(a)(3) ICC General Rules of
Practice appended to 49 U.S.C. The Commission’s final order
was never subjected to direct review by the District Court,
pursuant to 28 U.S.C. §1336(a) (1975).
Prior to the hearing by the District Court of the
Commission’s and Alco’s claims for injunctive relief, in March,
1975, B&A and Jubb moved to dismiss Alco’s damage claim,
arguing that Alco had elected to pursue a c amage remedy before
the Commission and was barred from such claim in court.
On April 29, 1975 the District Court rendered its opinion
after trial and enjoined the unlawful abandonment of B&A
operations; the court aiso granted B&A’s motion and dismissed
Alco’s damage claim which at that stage in the proceeding was in
excess of $260,000 (24a).? The court held that the damage claim
was barred by Alco’s prior formal complaint before the
Commission and the election of remedies provision of Section 9
of the Act (31a).
The opinion of the District Court appears to recognize that
if the Commission was correct in determining that it was without
subject matter jurisdiction to adjudicate Alco’s damage claim,
then there could not have been an election of remedies under
Section 9 of the Act because, in accord with long established
principle, the prior pursuit of a non-existent remedy cannot
constitute an election (29a). Wm. W. Bierce, Ltd. v. Hutchins,
205 U.S. 340, 346-347 (1907); Sears, Roebuck & Co. v. Blade,
123 F. Supp. 131 (S.D. Cal. 1954).
However, the District Court independently examined the
Commission’s jurisdiction over Alco’s claim. It determined that
the extent of the Commission’s subject matter jurisdiction was
“unsettled” as a general proposition of law. Under its “contrary
reading of the law,” the court believed that the Commission
erred in dismissing Alco’s claims and adopted a position
contrary to that previously urged by B&A before the
Commission. Accordingly, the court refused to apply res
judicata to the Commission’s final order, but appeared to
indicate that it would have done so had Alco unsuccessfully
appealed the Commission’s final order to the “fullest extent.”
(29a).
2. Alco measured its damages by the excess costs incurred as a consequence of loss
of B&A rail service. Alco’s damages continue to accrue since rail service has not yet been
resumed.
A
On April 19, 1976 the Court of Appeals affirmed the
District Court’s order dismissing Alco’s damage claim for the
reasons set forth in the opinion of the District Court (3a).
REASONS FOR GRANTING THE WRIT
1.
The Court of Appeals has decided two important federal
questions which have not been, but should be, settled by this
Court.
(1) If a shipper’s damage remedy is denied by the
Commission for lack of jurisdiction and the election provision of
Section 9 then bars a similar remedy in the courts, a shipper
damaged by a carrier which refuses, under the guise of an
embargo, to supply transportation service required by Section
i(4) of the Act is destined to be caught in the toils of a
procedural dilemma.’ A resolution of the first question
presented will provide the certainty necessary for the proper
administration of the Act’s remedial scheme.‘
Section 9 of the Act gives a shipper damaged by a carrier a
choice: a remedy in the Commission or the District Court.
Although this Court cautions that remedial statutes are to be
liberally construed, the decision below applied the election
provision of Section 9 in a manner which effectively denied
either remedy.
3. The problem has not been mooted by the Railroad Revitalization sad WagumorY
Reform Act of 1976, P.L. 94-210, 90 Stat.31 (Feb. 5, 1976), because such Act
effect Sections 1(4), 8 or 9 of the Act.
4. The election of remedies issue would not appear to be peculiar to Commission
proceedings. The common law doctrine of election of remedies, under the holding below,
would effectively bar the use of protective court actions in the event there is a question as
to the extent of an agency's jurisdiction.
8
A shipper which seeks to enforce a carrier’s duty to provide
transportation services under Section 1(4) of the Act by initially
seeking relief in the courts pursues a route closed by Asbury v.
Chesapeake & O. Ry., 314 F. Supp. 310 (D.D.C. 1970), which
teaches that a shipper damaged by an embargo has no damage
remedy in the District Court unless the embargo is first cancelled
by the Commission. It also holds that a shipper which first elects
such a remedy in court is barred by Section 9 from thereafter
challenging an embargo before the Commission.
Notwithstanding the holding in Asbury, and the procedural
route to the Commission it specifies in damage embargo cases,
shippers will now find that they cannot first seek a remedy in the
Commission, for such an attempt will bar a remedy in the
courts. Alco sought to challenge the embargo before the
Commission (as Asbury taught) but that agency held that it
lacked jurisdiction to cancel the embargo, order restoration of
service, or award damages. Yet the courts below held that under
Section 9, Alco’s election to seek a remedy in the Commission
barred it from seeking damages in the District Court.
Indeed, the state of the law which brought about this result
in Alco’s proceeding had led the Administrative Law Judge who
rendered the initial decision on Alco’s formal complaint therein
to comment:
“The little deferential game of ‘Apres vous
Jacque; Non, apres vous Gascon’ being played by
the ICC and the Courts can result in real harm to
specific shippers, such as complainant, and
frustrate implementation of transport regulation
in general.” Commission Docket No. 35735.
The Court has cautioned that “the doctrine of election of
remedies is a harsh, and now largely obsolete rule, the scope of
which should not be extended ... .” Friederichsen vy. Renard,
274 U.S. 207, 213 (1918). The decision below represents such an
9
extension, for at common law the institution of an action
dismissed before the merits are reached is not an election,
whether the dismissal was right or wrong as a matter of law.
E.g., Ahrens v. Commercial Nat. Bank, 100 Okla. 250, 229 P.
237 (1924). See also, Wm. W. Bierce, Ltd. v. Hutchins, supra.
Heretofore this Court has sanctioned applications of
Section 9 to bar suits only when the parties have “proceeded to a
determination before the Commission” on the merits. Standard
Oil Co. v. United States, 283 U.S. 235, 241 (1931). Accord,
Baltimore & O. R.R. v. Brady, 288 U.S. 448 (1933).
(2) While the courts and Congress seek to improve the
capacity of the administrative process to resolve disputes, 2.8.,
Title II], Sections 301 et seq. of the Railroad Revitalization and
Regulatory Reform Act of 1976, supra, amending and adding to,
inter alia, the interstate Commerce Act, the Court of Appeals
has sanctioned an order of the District Court which impairs the
effectiveness of final administrative orders. As a consequence,
the precedent established leaves in doubt the course to be
pursued by litigants after they adjudicate claims through the
final stage of the administrative process.
ion provision of Section 9 is not applicable toa:
wiaeameinall : for lack of subject matter jurisdiction, the
decision below can be justified only if a final agency order
determining a question of subject matter jurisdiction is not res
judicata in a collateral proceeding. This Court has never
determined this issue.
In 1926, the Court in Chicago, R.I. & P. Ry. v. Schendel,
270 U.S. 611 (1926), indicated that it was not called upon to
determine this question since the administrative proceeding was
in progress when res judicata was pleaded as a bar. The one
said that before res judicata is applicable there must be 4
judgment.” /d. at 623. But is more necessary? According to the
decision below an administrative order must be appealed to the
courts to the “fullest extent” before it is res judicata.
10
Since Schendel this Court has developed the question to a
point where res judicata applies to a judicial proceeding which
was never subjected to appeal and which determined a question
of subject matter jurisdiction, whether that determination was
right or wrong. The time is now ripe for this Court to decide
whether this rule should embrace administrative adjudicatory
proceedings.
In Stoll v. Gottlieb, 305 U.S. 165 (1938), the Court departed
from what has been described as prior dogma, Note, Jurisdiction
and Collateral Attack: October Term, 1939, 40 Colum. L. Rev.
1006, 1007 (1940), and held that a final order of a Bankruptcy
Court which was not appealed and which determined subject
matter jurisdiction is res judicata in a collateral judicial
proceeding. The Court specifically declined to examine whether
the Bankruptcy Court was right or wrong in determining the
extent of iis subject matter jurisdiction. Jd. at 171, n. 8, 172.
The Stoll case was reaffirmed in Treinies v. Sunshine
Mining Co., 308 U.S. 66 (1939), where the Court clearly stated
that unappealed court decisions determining subject matter
jurisdiction, even if erroneous, are res judicata in collateral court
proceedings. /d. at 77, n. 21, 78.
In 1940 the Court applied the new “substituted doctrine” of
res judicata, Note, supra, 40 Colum. L. Rev. at 1007, for the first
time to an administrative determination. In Sunshine Anthracite
Coal Co. v. Adkins, 310 U.S. 381 (1940), res judicata effect
prohibiting relitigation of a jurisdictional fact was given to a
decision of the National Bituminous Coal Commission, which
was affirmed on substantial evidence grounds by the Court of
Appeals.
One commentary interprets Adkins as limited to the
question of whether res judicata applies to jurisdictional facts
which have been “judicially approved after contest.” Note,
supra, 40 Colum. L. Rev. at 1011-1012. Another considers
Lull
Adkins as broader and “applicable to any administrative
determination of jurisdiction” because the reviewing court did
not decide the jurisdictional question, but determined only that
the agency’s finding of jurisdictional facts was supported by
substantial evidence. 2 Davis, Administrative Law Treatise,
§18.07 at 594-595, n. 19 (1970).
This Court should resolve the ambiguity created by the
decision below and determine whether the full development of
the doctrine of res judicata should be adopted for administrative
adjudicatory proceedings. By reviewing this question, the Court
will provide the certainty necessary to litigants who must know
whether they can rely in collateral proceedings on the results
achieved by prior final administrative orders, without having to
protract litigation by confirming such final orders on direct
judicial review.
The decision below is in direct conflict with the decision of
another Court of Appeals and principles established by other
Ceurts of Appeals on the issue of admiaistrative res judicata.
The decision below directly conflicts with a decision of the
Third Circuit and principles established by the Second, Seventh,
and Ninth Circuits.
The Third Circuit held ia Seatrain Lines, Inc. v.
Pennsylvania Ry., 207 F.2d 255 (3d Cir. 1953), that a final
Commission decision that it lacked subject matter pra to
determine the issue presented, whether that decision was ri or
wrong, was res judicata in a collateral judicial proceeding
although the Commission ruling was not subjected to judicial
review. Id. at 259. See, Groner & Sternstein, Res Judicata and
Federal Administrative Law, 39 lowa L. Rev. 300, 314 (1954). In
reaching this result the Third Circuit relied upon the Stoll and
Adkins cases, supra, and adopted the principle there established
12
for administrative adjudicatory proceedings. The Third Circuit
felt “doubly justified” in so acting since the railroad there won
the jurisdictional issue in the Commission and attempted to
obtain a contrary ruling in the court, as the Fourth Circuit
permitted B&A to do below.
Similarly, the decision below conflicts with principles
established by the Second, Seventh and Ninth Circuits which
have held that parties to agency proceedings which terminate by
final order determining jurisdictional facts sufficient to confer
subject matter jurisdiction, whether or not the agency order was
correct or subjected to direct judicial review, are barred by the
doctrine of res judicata from relitigating the same issues in
collateral judicial proceedings. Dennison v. Payne, 293 F. 333
(2d Cir. 1923); Landreth-v. Wabash Ry., 153 F.2d 98 (7th Cir.
1946); Pillsbury v. Alaska Packers Ass’n, 85 F.2d 758 (9th Cir.
1936).
The conflict among the circuits involves a question so
fundamental to the nature of the administrative process and its
relationship to judicial proceedings that it should be resolved by
this Court.
The decision below has decided two federal questions in
conflict with prior decisions of this Court.
The courts below did not express their reason for distaissal
of Alco’s common law damage claim against B&A and Jubb,
and its claim against Jubb, who was not a party to the
Commission proceeding, based upon Section 1(4) of the Act.
The results, however, conflict with Section 22(1) of the Act,
which preserves common law remedies, and prior decisions of
this Court.
13
(1) The dismissal of Alco’s claim based on B&A’s common
law duty to provide transportation service, Johnson v. Chicago,
M., St. P. & Pac. R.R., 400 F.2d 968, 971 (9th Cir. 1968),
conflicts with the principle established by this Court subsequent
to the decision of the Fourth Circuit below in Nader v.
Allegheny Airlines, Inc., 44 U.S.L.W. 4803 (U.S. June 7, 1976).
There a savings clause “virtually identical” to that appearing in
Section 22(1) of the Act was held to preserve common law
remedies unless the remedy is “absolutely inconsistent” and
cannot “coexist” with the statutory scheme. Alco’s common law
claim is not inconsistent with Section 9 of the Act, which does
not address common law remedies, but provides only for an
election of remedies with respect to damage claims based upon
its companion, Section 8 of the Act, which provides for damages
sustained in consequence of “any... violations of the
provisions of [Part I of the Act].” 49 U.S.C. §8 (1959).
(2) The dismissal of Alco’s claim under Section (4) of the
Act against Jubb as an aider and abettor conflicts with this
Court’s decision in Terminal Warehouse v. Pennsylvania Ry.
297 U.S. 500, 511 (1936), which held that the election provision
of Section 9 of the Act does not bar an action against an aider
and abettor who was not a party to the prior Commission
proceeding.
14
CONCLUSION
This Court should grant the petition for a writ of certiorari
to review the issues raised therein on the merits.
Respectfully submitted,
JOHN J. WALSH
EARL H. NEMSER
Attorneys for Petitioner
CADWALADER, WICKERSHAM & TAFT
Of Counsel
Dated: New York, New York
July 16, 1976
APPENDIX A
OPINION OF UNITED STATES COURT OF APPEALS
UNITED STATES COURT OF APPEALS
For The Fourth Circuit
No. 75-1787
INTERSTATE COMMERCE COMMISSION and ALCO-
GRAVURE, INC.,
Appellant,
versus
THE BALTIMORE AND ANNAPOLIS RAILROAD
COMPANY, a corporation, and ELMER J. JUBB,
Appellees.
No. 75-1788
INTERSTATE COMMERCE COMMISSION, ALCO-
GRAVURE, INC.,
Appellees,
versus
THE BALTIMORE AND ANNAPOLIS RAILROAD
COMPANY, a corporation, and ELMER J. JUBB,
Appellants.
2a
Appendix A
No. 75-1789
INTERSTATE COMMERCE COMMISSION, ALCO-
GRAVURE, INC.,
Appellees,
versus
THE BALTIMORE AND ANNAPOLIS RAILROAD
COMPANY, a corporation, and ELMER J. JUBB,
Appellants.
Appeals from the United States District Court for the District of
Maryland, at Baltimore. C. Stanley Blair, District Judge.
Argued March 3, 1976
Decided April 19, 1976
Before CRAVEN, FIELD and WIDENER, Circuit Judges.
Lee A. Monroe (John S. Edwards, Joseph I. Huesman, Lerch
and Huesman, and Sidley and Austin on brief) for Appellants in
Nos. 75-1788 und 75-1789 and Appellees in No. 75-1787; Daniel
S. Linhardt (Dennis M. Hart, Daniel M. O’Donoghue, Bernard
A. Gould, Attorneys, Interstate Commerce Commission on
brief) for Appellants in No. 75-1787 and Appellees in Nos. 75-
1788 and 75-1789; John J. Walsh (Earl H. Nemser on brief) for
Appellant in No. 75-1787 and Appellees in Nos. 75-1788 and 75-
i789.
Appendix A
PER CURIAM:
The Interstate Commerce Commission (Commission)
instituted this action pursuant to 49 U.S.C. § 1(20) against the
defendants, The Baltimore and Annapolis Railroad Company (B
& A) and its President, Elmer J. Jubb, seeking injunctive relief
against B & A for the alleged illegal abandonment of a segment
of its railroad running from Clifford Junction in Baltimore City
to a point approximately six miles south. Alco-Gravure, Inc.
(Aico), a former customer of B & A, was permitted to intervene,
and filed its amended complaint with a prayer for damages
against B & A based upon common law principles as well as 49
U.S.C. §§ 1(4) and 1(11). In addition to its contest on the merits,
B & A filed a motion to stay the action pending the disposition
of its application to the Commission under 49 U.S.C. § 1(18) for
a certificate permitting abandonment.
Following a hearing the district judge filed an opinion
containing his findings of fact and conclusions of law in which
he held that B & A’s failure to provide rail service on the
segment in question constituted an unlawful abandonment
within the meaning of Section 1(18) and granted injunctive relief
requiring B & A to proceed with the repairs necessary to restore
such rail service. With respect to Alco’s claim for damages, the
district judge concluded that its pursuit of damages in the
Commission proceeding constituted an election of remedies
under 49 U.S.C. § 9, precluding its assertion of damages in the
district court. :;
Upon consideration of the record, the briefs and oral
argument, we affirm upon the opinion of the district judge.
LC.C. v. Baltimore and Annapolis Raiiroad Company, 398 F.
Supp. 454 (D.C. Md. '°75).
AFFIRMED.
4a
APPENDIX B
OPINION AND ORDERS OF THE UNITED STATES
DISTRICT COURT
INTERSTATE COMMERCE COMMISSION and Alco-
Gravure, Inc.
v.
The BALTIMORE AND ANNAPOLIS RAILROAD
COMPANY and Elmer J. Jubb.
Civ. No. B-74-786.
United States District Court,
D. Maryland,
Baltimore Division.
April 29, 1975.
Order May 12, 1975.
Daniel S. Linhardt, Interstate Commerce Commission,
Washington, D.C.; Earl H. Nemser, New York City, and Francis
J. Gorman, Baltimore, Md., for plaintiffs.
Joseph I. Huesman, Baltimore, Md., for defendants.
MEMORANDUM
BLAIR, District Judge.
Fy The Interstate Commerce Commission (ICC) instituted this
civil action on July 25, 1974, seeking preliminary and permanent
injunctive relief against the defendants, The Baltimore and
Annapolis Railroad Company (B & A) and its President, Elmer
J. Jubb. Specifically, the ICC seeks to restrain B & A from its
Sa
Appendix B
alleged illegal abandonment of a segment of its track that runs
from Clifford Junction in Baltimore City to a point
approximately six miles south. Shortly after the suit was filed a
former customer of B & A, Alco-Gravure, Inc. (Alco), sought to
intervene in the action pursuant to Rule 24(b) of the Federal
Rules of Civil Procedure. Before a hearing on the motion for
preliminary injunction, B & A moved to dismiss or, in the
alternative, to stay the proceedings pending the outcome of an
application now before the ICC in which it seeks permission to
abandon service permanently along its entire route. The hearing
was limited, however, solely to the motion for a preliminary
injunction and the motion to intervene, and a decision on
defendants’ motion to dismiss or stay the proceedings was
postponed until a hearing on the merits of the permanent
injunction could be held.
Testimony and argument on ICC’s motion for a preliminary
injunction and Alco’s motion for leave to intervene were heard
August 20-22, 1974. On August 26, this court granted Alco leave
to intervene, but denied the request for a preliminary injunction.
LC.C. v. Baltimore & A.R.R., 64 F.R.D. 337 (D. Md. 1974).
Alco’s compiaint alleging violations by defendants of 49 U.S.C.
§§ 1(18)-(20) and requesting permanent injunctive relief only was
filed the same day.
On August 30, 1974, Alco filed its first amended complaint,
which added a prayer for damages based upon common law
principles and upon 49 U.S.C. §§ 1(4), 1(11) (1970). Defendants
again filed a motion to stay the proceedings pending the
outcome of the ICC abandonment proceedings. The decision on
this motion was also deferred pending a hearing on the merits of
the request for permanent injunctive relief.
On February 21, 1975, defendants answered the complaints
of ICC and Alco, and moved to dismiss Alco’s request for
injunctive relief and damages. Defendants also requested a jury
6a
Appendix B
trial on the issue of damages. With the concurrence of counsel
for all parties, the court heard testimony and argument limited
solely to the merits of the permanent injunction on March 11,
1975, postponing a ruling on the defendants’ motion to dismiss
Alco’s damage claim.
The facts as found by this court in its opinion of August 26,
1974, denying ICC’s motion for a preliminary injunction are
adopted for purposes of this decision, except as modified or
changed.
Findings of Fact
A. Developments since August 1974 hearing.
At the time of the hearing on ICC’s motion for a
preliminary injunction in August of 1974, there was pending
before an ICC review board a decision on the exceptions taken
by both parties to the initial decision of the administrative law
judge concerning Alco’s complaint before the ICC. The law
judge had found B & A ir. violation of section 1(4) and
1(18) of the act. Based on the violation of 1(4), he had
ordered B & A to cancel the temporary embargo and take the
necessary steps to restore rail service to Alco. He also ruled,
however, that Alco had failed to establish a prima facie case for
showing a violation of section 1(11) and that the
ICC had no jurisdiction to enforce violations of section 1(18).
The filing of the exceptions by both B & A and Alco stayed the
effect of the initial decision.
On August 22, 1974, the ICC Review Board rendered its
decision on the exceptions. It agreed with the administrative law
judge as to his section 1(11) and section 1(18) rulings. However,
the Board further ruled that the ICC had no jurisdiction to
enforce section 1(4) of the Act. Fhe Board therefore dismissed
Alco’s complaint. Subsequent to the decision of this court
denying ICC’s motion for a preliminary injunction, Alco
Ta
Appendix B
petitioned the ICC for reconsideration of its earlier decision.
This petition was denied on January 16, 1975. Alco has not
sought judicial review of the ICC decision.
As to the progress of B & A’s abandonment application
before the ICC, a draft environment impact statement has now
been prepared and a hearing on the abandonment application
was to be held April 16, 1975. A final decision by the ICC is
expected to take at least six months; in addition, final resolution
of B & A’s abandonment request could be further delayed by
subsequent judicial review. In short, a final decision on B & A’s
petition for abandonment is not imminent. In the meantime, no
repairs to the rail line have been undertaken, and rail service to
Alco’s Glen Burnie plant has not been restored.
B. Effect of cessation of service upon operation of Alco’s Glen
Burnie plant.
As of June 30, 1974, Alco had incurred additional costs of
$218,000 as a consequence of the loss of B & A’s rail service.
Since that time. this figure has risen by $42,000 to $260,000. Of
this total, Alco has passed on $124,000 to various customers in
the form of direct billings and absorbed $136,000. Alco’s
Maryland plant is thus placed at a competitive disadvantage at
least as compared to its position before June of 1972 but
nevertheless remains profitable and has increased its output
substantially since June of 1972.
Because this court denied the ICC’s motion for a
preliminary injunction, Alco was required to renew its
warehouse lease for 1975 at a substantial increase in rent, which
is reflected in the figures noted above. However, the lease can be
terminated upon thirty days’ notice.
C. Costs to restore rail service to Alco’s plant.
8a
Appendix B
There are three major cost categories in determining the
total expenditure required to restore service to Alco’s plant: (1)
4.2 miles of trackage; (2) the bridge over the Patapsco River,
including the trackwork thereon; and (3) the bridge over Old
Annapolis Road.
The cost of repairs to the trackage was subject to much
dispute. Defendants’ experts, employees of Rhinehart Railroad
Construction, Inc., estimated the costs as of June 1973 to be
$187,000 plus contingencies of $37,000, for a total of $224,000,
which includes $4,000 for the trackage across the Patapsco River
bridge. As of September 1974, these costs had increased to
$242,000, plus contingencies of $49,000, for a total of $291,000.
This includes $9,800 for track work over the bridge. These
figures, however, were not limited to standards for a class one
railroad and would allow an operating speed of at least 25 miles
per hour, 15-20 miles per hour greater than would be required.
They contained no breakdown as to Agnes-related damage. The
estimate also assumed new rail would have to be purchased,
without considering the use of second-hand rail that B & A owns
but which is not currently used.
Alco’s expert, Jack D. Storm, based his estimate upon
Federal Railroad Administration class one standards for
operating speeds of ten miles per hour. His estimate was also
broken down into damage caused by Agnes, and conditions
existing before Agnes and conditions arising since. Mr. Storm
estimated that the total cost of repair of trackage at 1972 prices
would have been $32,000, only $700 of which was attributable to
Agnes. At 1975 prices, these figures are $43,000 and $1,200
respectively. None of the figures include costs for track work
over the bridge. The costs not attributable to Agnes are directly
attributable to B & A’s failure to expend funds necessary for
routine maintenance over the years. Mr. Storm is eminently
qualified as an expert in this- field, and his painstaking
methodology and detailed summaries render his testimony the
9a
Appendix B
most credible. Hence, this court finds as fact the cost figures
submitted by Mr. Storm.
The only testimony concerning the cost of bridge repair was
provided in the form of expert testimony from a McLean
Contracting Co. employee, Mr. G. R. Wentz, called by the
defendants in both the preliminary injunction and permanent
injunction hearings. As of November 1972, McLean estimated
the cost of repair to be $*2,000—$45,000. As of June 1973, this
cost had risen to $55,000. Neither figure included the cost of
design engineering, which could be expected to increase the total
by approximately ten percent. As of March 1975, Mr. Wentz
estimated the total cost of repair to be $100,000, which includes
the consulting engineer’s fee for desigr.. None of these figures
includes the cost to repair the track work over the bridge.
The November 1972 and June 1973 estimates contained no
specific breakdown as to which costs were or were not
attributable to Hurricane Agnes. Mr. Wentz stated that
deterioration of the concrete supports took place over a period
of years but he could not state whether the failure to repair
would have caused the final destruction when Agnes swept by.
Given the fact that most of the cost to repair the trackage is a
result of B & A’s conscious policy of deferred maintenance, it is
reasonable to infer that such a policy also substantially
contributed to the washout of the Patapsco River bridge.
Although it cannot be stated with certainty that the oridge
would have been operational after Agnes had B & A not failed
to perform routine maintenance on the bridge, this court finds
that the cost to repair and restore service over the bridge would
have been substantially less, even though the final washout was
directly attributable to Agnes.
Of the $100,000 figure for March 1975, Mr. Wentz testified
that $15,000 is attributable to further deterioration of the bridge
since June of 1973 due to lack of maintenance; the remaining
$85,000 would therefore represent repair cost attributable to
10a
Appendix B
Agnes and to pre-1972 deferred maintenance, adjusted to reflect
1975 prices.
Defendants’ experts submitted the only testimony as to the
cost of repairing the bridge over Old Annapolis Road. At 1973
prices, this figure was $3,500, and by 1975 the cost had risen to
$9,000 due to inflation and further physical deterioration. None
of this cost is attributable to Hurricane Agnes.
In summary, this court finds the 1972 and 1975 cost to
restore service on the B & A line to the Alco plant to be as
follows: In 1972, the total cost would have been approximately
$84,000, of which $35,000 is definitely not attributable to Agnes.
Of the remaining $49,000, which involves mostly repairs to the
Patapsco River bridge, a substantial portion is not attributable
to Agnes, but rather to B & A’s failure to perform routine
maintenance over the years. At 1975 prices, the total cost of
restoring service is approximately $162,000, of which $66,000 is
definitely not attributable to Agnes. Of the remaining $96,000, a
substantial portion is again attributable to B & A’s deferred
maintenance policy concerning the Patapsco River bridge.
D. Length of time within which repairs could be completed.
Once the repair work is begun, the testimony was generally
agreed that it would take two to three months for completion.
However, there was little testimony as to when a contractor
could be hired to begin work. Alco’s expert, in accordance with
his customary practice, would not recommend a contractor.
Hence, the only evidence presented as to availability of
contractors was that of defendants’ track expert, Rhinehard
Railroad Construction, Inc. which indicated that Rhinehart
would not be available to begin repairs until September 1, 1975.
Accordingly, this court finds that repairs would not likely be
completed earlier than December.1, 1975.
E. Interests of Anne Arundel County and the Mass Transit
Administration of the Maryland Department of
for efficient operation.
of Planning in the Rapid Transit Development Division of the
Mass Transit Administration (MTA), Maryland Department of
Transportation. The MTA has a plan to acquire the B&A
right-of-way and use it for a passenger rail rapid transit system.
Accordingly, the MTA has petitioned to intervene in the B & A
abandonment proceedings before the ICC. The rapid transit
system, however, is still in the planning stage, and no final plan
has yet been formally adopted. It is clear that acquisition would
not occur in the near future. Further, if B & A’s abandonment
application were denied, the MTA would revise its plan to
include rail freight service.
F. Facts relevant to “abandonment” and B & A's intention to
abandon.
It is undisputed that the initial cessation of service in June
of 1972 was brought about by a condition over which defendants
of
|. Plaintiffs objected to the admission at this proceeding of the testimony
officials from the MTA and Anne Arundel County claiming it to be irrelevant. The court
heard the testimony and reserved ruling on its admissibility. The testimony is hereby
admitted.
l2a
Appendix B
had no control: Hurricane Agnes. B & A therefore quite
reasonably issued a temporary embargo of all rail service south
of the Patapsco River. By September of 1972, the flood waters
had subsided, and it was then physically possible to repair the
damage and restore service.
B & A ciearly has the present financial ability to make the
repairs necessary to restore service without recourse to outside
financing. However, B & A claims a net loss in its railroad
operations of $68,000 over the 10-year period preceding its
cessation of service to the Alco plant in 1972. B & A’s sound
financial position has therefore not resulted from the
profitability of its rail operations in recent years. The President
of B & A feels that B & A’s rail service is a “losing
proposition,” and therefore, as a stock company, B & A
does not wish to expend the funds necessary to repair and
restore service in an operation that would be unprofitable.
Indeed, it has never considered using its own funds to restore
service. In addition, B & A has sold portions of its right of way
near Annapolis to the State of Maryland, and hopes in the
future to sell the remainder to the MTA.
Other than the unfruitful loan negotiations with Alco, B &
A has never attempted to obtain outside financial assistance to
undertake the repairs and restore rail service to Alco, despite its
apparent eligibility to apply for a loan under the Emergency Rail
Facilities Restoration Act, Pub.L.No. 92-591, 86 Stat. 1304
(1972).2
B & A also has a history of de facto abandonments without
prior approval from the ICC. In 1968, B & A discontinued
2. Funding for the Act was appropriated on July 1, 1973. Act of July 1, 1973, tit. 1,
ch. XI, Pub.L.No. 93-50, 87 Stat. 99. The imminence of this funding was called to B &
A’s attention by counsel for Alco by letter of June 7, 1973. Plaintiffs’ Exhibit 9. B & A
has never applied for assistance under the Act.
EERE TEE aN | eee 7 7
13a
Appendix B
i i imber trestle
service south of the Severn River because the tim
bridge over the river was found to be unsafe. In 1969, B& A
discontinued service south of the Alco plant due toa washout at
Marley Creek. While the lack of requests for rail service over the
justi i to make
abandoned segments may justify the failure
expenditures to restore service, B & A nevertheless filed no
requests with the ICC for permission to abandon until January
of 1973, that petition being in large part a response to the filing
of an ICC complaint by Alco.
In summary, B & A has long considered its rail operations
as a burden, and internal discussions as to the possibility of
abandonment were held both before and after Agnes. B & A has
long wanted to get out of the rail freight business, and Agnes
provided it with a convenient excuse for doing so. B & A has no
intention to resume service pending the outcome of its
abandonment petition.
Conclusions of Law
: : ; , he
This action arises under Sections 1(18) and 1(20) of t
Interstate Commerce Act, 49 U.S.C. §§ 1(18), 1(20) (1970).
Jurisdiction of this court is properly grounded upon 28 U.S.C.
§§ 1337, 1345 (1970), and 49 U.S.C. § 1(20) (1970).
Section 1(18) of the Interstate Commerce Act states, in
relevant part:
... [N]o carrier by railroad subject to this part
shall abandon all or any portion of a line of
railroad, or the operation thereof, unless and
untii there shall first have been obtained from the
Commission a certificate that the present or
future public convenience and necessity permit of
such abandonment.
l4a
Appendix B
Section 1(20) further provides:
...Any...abandonment 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 Commission,...or any party in
interest...
Both the ICC and Alco are authorized to institute suits
under section 1(20) without prior resort to ICC administrative
hearings. /.C.C. v. Chicago, Rock Island & Pac. R.R., 501 F.2d
908, 912 (8th Cir. 1974), cert. denied, 420 U.S. 972, 95 S.Ct.
1393, 43 L.Ed.2d 652 (1975); see Powell v. United States, 300
U.S. 276 (1937); Meyers v. Jay Street Connecting R.R., 259 F.2d
532 (2d Cir. 1958); Myers v. Arkansas & O. Ry., 185 F.Supp. 36
(W.D.Ark. 1960). The doctrine of primary jurisdiction does not
apply. 1.C.C. v. Chicago, Rock Island & Pac. R.R., supra at
913-14; L.C.C. v. Maine Cent. R.R., 505 F.2d 590, 594 (2d Cir.
1974).
It is clear from the Act that no carrier may abandon its
operations on all or part of its railroad unless and until the ICC
grants a certificate permitting abandonment. 49 U.S.C. § 1(18)
(1970). No such certificate has yet been granted to B & A.
However, the issue in this proceeding for a permanent injunction
under sections 1(18) and 1(20) of the Act is not whether the
abandonment should be granted or denied, for that question is
for the ICC to decide subject to judicial review. /.C.C. v.
Chicago, Rock Island & Pac. R.R., 501 F.2d 908, 913 (8th Cir.
1974). Rather, the questions for resolution here are (1) whether
an “abandonment” has occurred with the meaning of 49 U.S.C.
§ 1(18), and (2) whether, considering a myriad of equitable
factors, an injunction compelling B & A to restore service should
issue. Jd. at 913-14. Simply stated, if there has been an
—)
1Sa
Appendix B
abandonment, then the court, in its discretion, may issue an
injunction restraining such abandonment.
A. Abandonment.
“Abandonment” is defined as a permanent or indefinite
cessation of rail service. Meyers v. Jay Street Connecting R.R.,
259 F.2d 532, 535 (2d Cir. 1958); I.C.C. v. Chicago, Rock Island
& Pac. R.R., 501 F.2d 908, 911 (8th Cir. 1974). For purposes of
sections 1(18) and 1(20), there is no conceptual distinction
between discontinuing service permanently and suspending it
indefinitely. Meyers v. Jay Street Connecting R.R., supra at 535;
LCC. v. Maine Cent. R.R., 505 F.2d 590, 593 (2d Cir. 1974).
However, if the cessation of operations began and continues
because of conditions over which the railroad had no control, no
abandonment within the meaning of 49 U.S.C. § 1(18) would be
established. 1.C.C. v. Chicago, Rock Island & Pac. R.R., supra
at 911; Zirn v. Hanover Bank, 215 F.2d 63, 69 (2d Cir. 1954);
Myers v. Arkansas & O. Ry., 185 F.Supp. 36, 41
(W.D.Ark.1960); City of Alexandria v. Chicago, Rock Island &
Pac. R.R., 311 F.2d 7, 10 (Sth Cir. 1962).
Abandonment should be distinguished from the term
“embargo,” which is issued by the carrier alone and which wii
justify a cessation of service as a temporary emergency measure
when for some reason the carrier is unable to perform its duty as
a common carrier. /.C.C. v. Chicago, Rock Island & Pac. R.R.,
supra at 911; I.C.C. v. Maine Cent. R.R., supra at 593; 49
C.F.R. § 1006.1 (1974). Because both abandonment and
embargo entail a cessation of service, the question of whether an
embargo has been transmuted into an unlawful abandonment
revolves largely around the length of the cessation and intent of
the railroad. /.C.C. v. Chicago, Rock Island & Pac. R.R., supra
at 911; L.C.C. v. Maine Cent. R.R., supra at 593. See also
Williams v. Atlantic Coast Line R.R., 17 F.2d 17, 22 (4th Cir.
1927). Here the cessation has continued for nearly three years,
16a
Appendix B
certainly long enough to be an “abandonment” within the
meaning of the Act. See Meyers v. Jay Street Connecting R.R.,
259 F.2d 532 (2d Cir. 1958); L.C.C. v. Maine Cent. R.R., Civil
No. 74-81 (D.Vt., July 18, 1974), aff'd, 50S F.2d 590 (2d Cir.
1974). The question is therefore whether B & A has an intent to
cease service permanently or indefinitely. This court finds that B
& A indeed has such an intent, as evidenced by the following: (1)
B & A has the financial ability internally to make the necessary
repairs; (2) B & A has never sought outside public or private
assistance to finance the repairs; (3) B & A has never even
considered using its own funds; (4) B & A has sold off portions
of its right of way and hopes to sell off more in the future; (5) B
& A has long wanted to rid itself of its railroad operations; (6) B
& A has a history of de facto abandonments without prior ICC
approval; (7) B & A has no intention to resume service pending
the outcome of its abandonment petition before the ICC; (8) a
substantial portion of the required repair expenditures result
from B & A’s failure to expend funds for routine maintenance
over the years. These facts amply support a finding that B & A
intends to abandon its rail operations to Alco’s plant. See /.C.C.
v. Maine Cent. R.R., 505 F.2d 590, 594 (2d Cir. 1974);3 L.C.C. v.
St. Johnsburg & Lamoille County R.R., Civil No. 73-3 (D.Vt.,
Feb. 1, 1973); Pennsylvania v. Penn Cent. Transp. Co., 348
F.Supp. 28, 30 (M.D.Pa.1972).
3. The lower court decision in Maine Central, which was affirmed in the Second
Circuit case, stated:
The extremely lengthy period of discontinuation of service in this
case [one year], extending well beyond any reasonable time required
to repair the flood damage, coupled with the clear financial and
physica! ability of the Railroad to repair the damage and resume
service must, in ovr view be construed as an illegal abandonment
capable of injunction under 49 U.S.C. § 1(20).
L.C.C. v. Maine Cent. R.R., Civil No. 74-81 at 12 (D.Vt., July 18, 1974), aff'd, 505 F.2d
590 (2d Cir. 1974). With respect to the question of abandonment, B & A's position is
virtually identical.
17a
Appendix B
B & A, however, contends that the cessation of
operation cannot be deemed an unlawful abandonment because
it was due to circumstances entirely beyond the control of the
railroad, i.e., the occurrence of Hurricane Agnes. It is true that
the initial cessation of service was beyond B & A’s control
because of the physical impossibility of rail operations. Hence,
no intent to abandon could be inferred from the initial cessation.
However, in order to avoid a finding of abandonment, the
cessation must continue to be beyond the control of the railroad.
LC.C. v. Chicago, Rock Island & Pac. R.R., 501 F.2d 908, 911
(8th Cir. 1974). Hence, once the physical impossibility of service
terminates, the cessation of service is no longer “beyond the
control” of the railroad, at least where the railroad is financially
able to repair the damage. /.C.C. v. Maine Cent. R.R., Civil No.
74-81, at 13 (D.Vt., July 18, 1974), aff'd 505 F.2d 590 (2d Cir.
1974); Pennsylvania v. Penn Cent. Transp. Co., 348 F.Supp. 28,
30 (M.D.Pa.1972). Similarly, if the unsafe track conditions have
resulted in large part from the railroad’s polic, of deferred
maintenance, the cessation is not deemed “beyond the control”
of the railroad. See 1.C.C. v. Chicago, Rock Island & Pac. R.R.,
501 F.2d 908, 911-13 (8th Cir. 1974); 1.C.C. v. Chicago, Rock
Island, & Pac. R.R., Civil No. CV 73-L-244 (D.Neb., Oct. 31,
1974) (on remand from Eighth Circuit). In this case, it is
physically possible to restore service, and B & A has the
financial ability to do so. In addition, virtually the entire cost of
repairing the track to safe conditions is a result of B & A’s
longstanding policy of “deferred maintenance.” As stated
previously with respect to the bridge, it is certainly likely that
much of the damage wreaked by Agnes would not have occurred
had B & A performed routine maintenance on the bridge over
the years. Hence, the current cessation of service cannot be
deemed beyond B & A’s control. Myers v. Arkansas & O. Ry.,
185 F.Supp. 36 (W.D.Ark.1960), is clearly distinguishable from
B & A’s position, for there the railroad had no right to expend
money to repair the bridges and portions of the track, since part
of the right of way in question had been condemned by the
18a
Appendix B
United States. In addition, there was no evidence that the
railroad was financially able to make the necessary repairs. 185
F.Supp. at 42.
B & A also contends that since the power to nullify an
embargo and determine its reasonableness lics only with the
ICC, and since the ICC has not seen fit to do so, the embargo is
still valid, and therefore the cessation of service cannot be held
to be an unlawful abandonment under section 1(18). Other than
being a back-door method of invoking the doctrine of primary
jurisdiction, which this and other courts reject in cases such as
this, B & A’s contention in this regard is without merit. If a
court finds that an initially valid, self-imposed embargo has over
time become an abandonment within the meaning of 49 U.S.C. §
1(18), the mere fact that the embargo is still in effect and
unchallenged by the ICC does not render an otherwise unlawful
abandonment lawful. The courts have therefore not hesitated to
find unlawful abandonments when unchallenged embargoes
were still in effect. See, e.g., 1.C.C. v. Maine Cent. R.R., 505
F.2d 590 (2d Cir. 1974); Meyers v. Jay Street Connecting R.R.,
259 F.2d 532 (2d Cir. 1958).
This court concludes that B & A’s failure to restore rail
freight service to Alco’s plant constitutes an unlawful
abandonment within the meaning of Section 1(18) of the
Interstate Commerce Act, 49 U.S.C. § 1(18) (1570).
B. Whether an injunction should issue.
Plaintiffs contend that once an unlawful abandonment
is found, the plaintiffs have an absolute right to a permanent
injunction, i.e., the district court has no discretion to deny the
4. L.C.C. v. Chicago, Rock Island & Pac. R.R., 501 F.2d 908, 913-14 (8th Cir.
1974), cert. denied, 420 U.S. 972, 95 S.Ct. 1393, 43 L.Ed.2d 652 (1975); 1.C.C. v. Maine
Cent. R.R., 505 F.2d 590, 594 (2d Cir. 1974).
19a
Appendix B
injunction based on equitable principles. The short answer to
this contention is that the statute itself mandates no such result.
Section 1(20) provides that “[aJny construction, operation, or
abandonment contrary to the provisions of this paragraph or of
paragraph (18) or (19) of this section may be enjoined .. . .” 49
U.S.C. § 1(20) (1970) (emphasis added). The use of the term
“may” clearly contemplates the exercise of discretion by the
district courts. .C.C. v. Chicago, ‘ock Island & Pac. R.R., 501
F.2d 908, 914 (8th Cir. 1974).
Alco and the ICC principally rely on the Supreme Court’s
language in Texas & Pac. Ry. v. Gulf, C. & S.F. Ry., 270 U.S.
266, 46 S.Ct. 263, 70 L.Ed. 578 (1926). In that case, the railroad
attempted an extension of its tracks—rather than
abandonment—without authorization from the ICC, and the
Court held that since “no certificate [had] been obtained, the
party in interest opposing construction is entitled as of right to
an injunction.” 270 U.S. at 273, 46 S.Ct. at 264. The question of
a physical impossibility of operation without a substantial
expenditure of funds, however, was not present in the Texas
case. There is a clear distinction between enjoining the
expenditure of funds for an extension of operations on the one
hand and mandating the expenditure of substantial funds to
resume operations on the other. In cases where a court is
confronted with a physical impossibility of operation without
substantial expenditures for repair, the determination as to
whether an injunction should issue should be viewed as one of
equity, i.e., “whether it would be equitable to require substantial
expenditures when shortly thereafter the Commission may
approve the railroad’s abandonment application.” /.C.C. v.
Chicago, Rock Island & Pac. R.R., 501 F.2d 908, 9i4 (8th Cir.
1974). Hence, neither Alco nor the ICC is entitled as of right to
an injunction against B & A’s unlawful abandonment. The
injunction will be issued only if it is equitable to do so under the
circumstances. /d.; Pennsylvania v. Penn Cent. Transp. Co., 348
F.Supp. 28, 30 (M.D.Pa.1972); Asbury v. Chesapeake & O. Ry.,
20a
Appendix B
264 F.Supp. 437, 438 (D.D.C. 1967); see 1.C.C. v. Maine Cent.
R.R., 505 F.2d 590, 594 (2d Cir. 1974).
In balancing the equities in cases similar to this, other
courts have considered a wide variety of equitable factors,
including the relative cost of restoration of service; the progress
of the railroad’s abandonment application and whether it is
likely to be successful; the financial resources of the railroad;
the reliance of shippers on rail service and the hardship involved
in cessation of that service; the assistance in financing the
restoration of service offered by the plaintiff; the extent of
responsibility of the railroad for the condition of disrepair; and
the public interest generally. See 1.C.C. v. Chicago, Rock Island
& Pac. R.R., 501 F.2d 908 (8th Cir. 1974); L.C.C. v. Maine Cent.
R.R., Civil No. 74-81 (D.Vt., July 18, 1974), aff'd, 505 F.2d 590
(2d Cir. 1974); .C.C. v. St. Johnsbury & Lamoille County R.R.,
Civil No. 73-3 (D.Vt., Feb. 1, 1973); Pennsylvania v. Penn Cent.
Transp. Co., 348 F.Supp. (M.D.Pa.1972); Asbury v. Chesapeake
& O. Ry., 264 F.Supp. 437 (D.D.C.1967).
After consideration of these and other factors, this °
court believes that the equitable factors balance in favor of
granting an injunction enjoining B & A’s unlawful
abandonment.
First, because of the importance of uninterrupted rail
transportation service in the nation’s economy, Congress has
expressed a clear intent, even to the point of criminal sanctions,
that abandonments without prior ICC approval are not
tolerated. See 49 U.S.C. § 1(20) (1970). B & A has long had an
intention to get out of the railroad business, and, indeed, it
abandoned approximately two-thirds of its line even prior to the
occurrence of Hurricane Agnes in 1972. B & A filed no
abandonment application with the ICC until 1973, and that
filing was largely only a response to the filing of a complaint
with the ICC by Alco. B & A’s violation of the statute combined
2la
Appendix B
with the strong Congressional purpose to forbid such violations
necessarily weighs most heavily against the equitable position of
defendants.
Second, as to the costs to repair the railroad and restore
service to Alco, the estimated cost of $162,000 at 1975 prices is
certainly a valid equitable factor that tends to favor defendants’
position. However, B & A cannot receive equitable advantage of
inflationary factors that are included within that figure when it
was possible to make the necessary repairs in 1972 at an
estimated cost of $84,000. Moreover, the latter figure must be
reduced by $35,000 in non-bridge damage attributable to B &
A’s own pre-1972 deferred maintenance policy. In addition, a
substantial but indeterminable portion of the remaining $49,000
cost to repair the Patapsco River bridge is also the result of B &
A’s deferred maintenance policy. Hence, the cost figure to weigh
most heavily on B & A’s equitable side is reduced to something
wss than $49,000. It should again be noted in this regard that in
1972 B & A had, and it presently has, the financial ability to
make the necessary repairs. Further, B & A admits that it never
even considered using its own funds, or funds publicly available,
to do so.
Third, B & A’s unlawful cessation of service has placed
Alco in an untenable position. Alco’s plant, having a value of
over ten million dollars, was expressly designed for rail intake of
raw paper materials. While the plant has remained a growing
and profitable operation, the increased costs since cessation of
rail service have been substantial and will continue to be so. The
additional costs clearly place Alco at a competitive disadvantage
as compared to what its position would have been had B & A
not unlawfully ceased operations. Under these circumstances,
Alco has suffered and continues to suffer irreparable harm.
Fourth, the delay in contesting B & A’s actions before this
court probably weighs most heavily against the ICC. The ICC
22a
Appendix B
ignored previous pre-1972 abandonments of the B & A line and
ignored the 1972 abandonment until August of 1974, at which
time it brought the present action, apparently at the urging of
the ICC’s own administrative law judge. Alco did pursue its
complaint with the ICC almost immediately after it attempted
negotiations with B & A for resumption of service in September
of 1972. This remedy has proven unfruitful at the Commission
level, and for some reason it has not sought judicial review.
Either plaintiff could have brought the present action in
September 1972, at which time a quick decision could have
avoided the additional costs accruing since. Moreover, B & A
did make an offer to restore service upon Alco’s providing a
loan in addition to various guarantees as to continued use of the
rail service by Alco. While Alco may have reasonably felt the
offer to be unacceptable, it made no reasonable counteroffer and
filed a complaint with the ICC without prior notice to B & A.
Nevertheless, even though Alco’s failure to put up $50,000 in
1972 to aid in restoring service immediately cannot weigh in
Alco’s favor, B & A cannot equitably be heard to complain that
its customer refused to advance the funds necessary to aid in
doing that which B & A was otherwise legally bound to do, i.e.,
cease its unlawful abandonment.
Fifth, as stated in this court’s previous opinion, the ICC
delay in the processing of B & A’s abandonment application
caused by ICC’s own actions in response to the decision in
Harlem Valley Transp. Ass'n v. Stafford, 360 F. Supp. 1057
(S.D.N.Y. 1973), aff'd, 500 F.2d 328 (2d Cir. 1974), substantially
undermines the equitable position of the ICC as a plaintiff in
this case. This court is naturally reluctant to order substantial
expenditures on the B & A line when there is a possibility that
ICC would authorize abandonment, even though a final decision
may not be forthcoming for a year or more. On the other hand,
the only indication in this case as to the outcome of B & A’s
abandonment petition before the ICC was given by the ICC
administrative law judge, who, in ruling on Alco’s complaint,
23a
Appendix B
stated that the circumstances surrounding B & A’s current
position could never qualify for abandonment. Moreover, the
ICC delay in ruling on the B & A abandonment cannot be
attributed in any manner to fault on the part of Alco. Finally, B
& A may have avoided much of the administrative delay, as well
as the possibility of unnecessary expenditures for repair, had it
petitioned for abandonment when it ceased operations. B & A
would then have been either granted abandonment or ordered to
continue service, and this proceeding would have been, in all
probability, unnecessary.
Sixth, as to considerations of the public interest in the grant
or denial of a permanent injunction, it is clear that Alco is
presently B & A’s only substantial prospective customer south of
the Patapsco River. This court has also considered the in**rests
expressed by the MTA and Anne Arundel County in this case.
These interests, however, weigh only slightly, if at all, in favor of
B & A’s position. The plans of the MTA are very tentative and
depend to a large extent upon the outcome of B & A’s
abandonment application. The position of Anne Arundel
County as presented in testimony before this court appears to be
merely one of indifference as to the continued existence of rail
freight service on the B & A line.
After consideration of the law, the evidence, and the
balance of the equities, and giving greatest weight to the first
three factors enumerated above, this court concludes that a
permanent injunction should issue requiring B & A to restore
rail freight service to Alco’s Glen Burnie plant. Counsel for ICC
and Alco shall submit, after consultation with : ounsel for B &
A, an appropriate order in accordance with this opinion.
Defendants’ motion to dismiss or stay these proceedings until a
decision on B & A’s petition for abandonment now pending
before the ICC will accordingly be denied.
24a
Appendix B
Alco’s Claim for Damages
In its complaint filed with the ICC contesting B & A’s
cessation of service, Alco also sought damages pursuant to 49
U.S.C. §§ 8, 9, 16(1) (1970), based upon alleged violations of 49
U.S.C. §§ 1(4), 1(11), 1(18) (1970). As previously noted, the
administrative judge found that B & A had violated sections 1(4)
and 1(18), but that Alco had failed to establish a prima facie
case with respect to section 1(11). The judge ruled that the ICC
had no jurisdiction to enforce section 1(18), but he did order B
& A to cancel its temporary embargo and restore service to
Alco, finding jurisdiction for such action under section 1(4). The
judge declined to award damages, stating no reason for his
ruling in that regard. The Commission affirmed the findings
concerning sections I(11) and 1(18), but reversed the
administrative judge’s ruling that the ICC had jurisdiction to
enforce section 1(4), therefore stating that it did not reach the
question of damages. The complaint was ordered dismissed.
Alco has not sought judicial review of that decision. Instead, it
now seeks damages in this court based upon common law
principles and upon sections 1(4) and 1(11) of the Interstate
Commerce Act, 49 U.S.C. §§ 1(4), 1({11). Alco does not seek
damages for any alleged violations of section 1(18).
In a motion to dismiss Alco’s claim for damages, B & A
contends that Alco is barred from suing in federal court on its
claims under sections 1(4) and 1(11) because it has made an
election of remedies under 49 U.S.C. § 9 (1970) by proceeding
initially before the Commission. Neither party having requested
a hearing on the motion to dismiss, the issues will be decided
upon consideration of the memoranda presented without oral
argument, in accordance with Local Rule 6. For the reasons
stated below, B & A’s motion to dismiss Alco’s claim for
damages will be granted.
The Interstate Commerce Act and the common law
impose duties upon the railroad to provide and furnish
25a
Appendix B
transportation upon reasonable request therefor and to furnish
safe and adequate car service.> Under neither the statute nor the
common law is the duty to provide transportation and car
service absolute. The carrier has a right to issue a temporary
embargo in times of emergency,’ and a validly imposed embargo
may therefore be a defense to a damage action under the statute
or the common law for failure to provide transportation or car
service upon reasonable request.* But while the railroad’s duty
can be qualified or excused by the existence of a valid embargo,
the railroad will nevertheless become liable for damages
subsequent to the time at which the embargo’s validity ceases.
See Chicago & N.W. Ry. v. Union Packing Co., 373 F. Supp.
734, 737 (D. Neb. 1974); 49 C.F.R. § 1006.4 (1974). But see
Asbury v. Chesapeake & O. Ry., 314 F. Supp. 310 (D.D.C.
1970).
The plaintiffs statutory right to damages for the
railroad’s violation of its duties under the Interstate Commerce
Act is established by 49 U.S.C. § 8 (1970). A consignee, as Aico
appears to be in this case, is permitted to recover under Section
8 if he has been injured by a railroad’s violation of the Act.
5. See 49 U.S.C. §§ 1(4), 1(11), 22 (1970); Johnson v. Chicago, M., St. P. & Pac.
R.R., 400 F.2d 968, 971 (9th Cir. 1968); Froehling Supply Co. v. United States, 194 F.2d
637 (7th Cir. 1952); See generally Montgomery Ward & Co. v. Northern Pac. Term. Co..
128 F.Supp. 475 (D.Or.1953).
6. Brotherhood of Railway Clerks v. Florida E. Coast Ry., 384 U.S. 238, 245, 86
S.Ct. 1420, 16 L.Ed.2d 501 (1966); Pacific Gamble Robinson Co. v. Minneapolis & St.
L. Ry., 105 F.Supp. 794, 799 (D.Minn.1952), aff'd in part and vacated as to damages,
215 F.2d 126 (8th Cir. 1954).
7. Chicago & N.W. Ry. v. Union Packing Co., 373 F.Supp. 734, 737 (D.Neb.1974);
New York Cent. R.R. v. United States, 201 F. Supp. 958, 959 (S.D.N.Y.), vacated as
moot, 371 U.S. 805, 83 S.Ct. 19, 9 L.Ed.2d 51 (1962); see 49 C.F.R. § 1006.1 (1974).
8. Eastern Ry. v. Littlefield, 237 U.S. 140, 144-45, 35 S.Ct. 489, 59 L.Ed. 878 (1915);
Chicago & N.W. Ry. v. Union Packing Co., supra at 737.
26a
Appendix B
Adams v. Mills, 286 U.S. 397, 406-08, 52 S.Ct. 589, 76 L.Ed.
1184 (1932). However, section 9 of the Act requires the plaintiff
to elect his method of pursuing his claim before either the ICC
or a district court, but not both. 49 U.S.C. § 9 (1970).
If the plaintiff elects to proceed initially before the ICC
under 49 U.S.C. §§ 9, 13(1), 16(1) (1970), an award of damages
is enforceable by a subsequent action in district court before a
single district judge. 49 U.S.C. § 16(2) (1970); 28 U.S.C.A. §
1336(a) (Supp. Feb. 1975); 1.C.C. v. Atlantic Coast Line R.R.,
383 U.S. 576, 585, 86 S.Ct. 1000, 16 L.Ed. 109 (1966). If
damages are denied by the Commission or if the plaintiff wishes
to challenge the adequacy of any damage award, judicial review
is authorized by section 17(9), and the district courts have
jurisdiction of the review proceeding under 28 U.S.C. § 1336
(1970).? 1.C.C. v. Atlantic Coast Line R.R., supra, 383 U.S. at
587, 86 S.Ct. 1000.
The plaintiffs initial option to recover his damages
in district court rather before the Commission has been
somewhat limited by the development and application of the
doctrine of primary jurisdiction,’ especially in cases where a
question concerning the validity or reasonableness of a carrier’s
embargo is involved.'! The primary jurisdiction doctrine applies
9. This judicial review procedure has been altered by the Act of Jan. 2, 1975,
Pub.L.No. 93-584, 88 Stat. 1917, amending 28 U.S.C. §§ 1336, 1398, 2323-25, 2341-42
(1970). Under this Act, the courts of appeals now have exclusive jurisdiction to enjoin,
set aside, suspend, or determine the validity of all orders of the ICC other than for the
payment of money. See 28 U.S.C.A. §§ 1336(a), 2321(a), 2342(5) (Supp. Feb.1975). The
Act does not apply to actions commenced on or before March 31, 1975.
10. United States v. 1.C.C., 337 U.S. 426, 439, 69 S.Ct. 1410, 93 L.Ed. 1451 (1949).
See generally 3 K. Davis, Administrative Law Treatise § 19.02 (1957).
11. Chicago & N.W. Ry. v. Union Packing Co., 373 F.Supp. 734, 737
(D.Neb.1974); Asbury v. Chesapeake & O. Ry., 314 F.Supp. 310 (D.D.C.1970); Holt
(Cont'd)
27a
Appendix B
whenever enforcement of a claim, originally cognizable in the
courts, requires the resolution of issues that have been placed
within the special competence of an administrative body in
accordance with the purposes of a regulatory scheme. United
States v. Western Pac. R.R., 352 U.S. 59, 65, 77 S.Ct. 161, 1
L.Ed.2d 126 (1956). Whether the purposes of the Interstate
Commerce Act require that the ICC should first pass on a
question depends on whether the question raises issues of
transportation policy that should be considered by the
Commission in the interests of uniformity and administrative
expertise. Jd. at 65, 77 S.Ct. 161. See generally 3 K. Davis,
Administrative Law Treatise § 19.02 (1957) [hereinafter cited as
K. Davis]; Great N. Ry. v. Merchants’ Elev. Co., 259 U.S. 285,
292, 42 S.Ct. 477, 66 L.Ed. 943 (1922).
Whenever the doctrine of primary jurisdiction requires
that administrative questions be decided first by the ICC, the
district court must refer'? such questions to the Commission"?
even if the ICC has no power to award damages or otherwise
grant the relief sought,'* and even if plaintiff has also alleged a
(Cont'd)
Motor Co. v. Nicholson Universal S.S. Co., 56 F.Supp. 585, 591-92 (D.Minn.1944); see
Pennsylvania R.R. v. Puritan Coal Mining Co., 237 U.S. 121, 133-34, 35 S.Ct. 484, 59
L.Ed. 867 (1915); Eastern Ry. v. Littlefield, 237 U.S. 140, 35 S.Ct. 489, 59 L.Ed. 878
(1915). See also New York Cent. R.R. v. United States, 201 F.Supp. 958, 959
(S.D.N.Y.), vacated as moot, 371 U.S. 805, 83 S.Ct. 19, 9 L.Ed.2d 51 (1962).
12. When a referral occurs, the court ordering the reference has exclusive
jurisdiction of any civil action to review any ICC order arising out of the referral. 28
U.S.C. § 1336(b) (1970).
13. LOC. v. Atlantic Coast Line R.R., 383 U.S. 576, 579-80, 86 S.Ct. 1000, 16
L.Ed.2d 109 (1966).
14. 3 K. Davis § 19.07, at 39-41; Hewitt-Robins, Inc. v. Eastern Freight-Ways, Inc.,
371 U.S. 84, 89, 83 S.Ct. 157, 9 L.Ed.2d 142 (1962); see Thompson v. Texas Mexican
Ry., 328 U.S. 134, 151, 66 S.Ct. 937, 90 L.Ed. 1132 (1946).
28a
Appendix B
violation of the railroad’s duties under the common law.'> The
question of whether the primary jurisdiction doctrine requires a
referral in this case need not be decided, however, because this
court believes that Alco, by initially seeking damages before the
Commission, is no longer entitled to maintain another action for
damages in this court.
It is clear that once a plaintiffs claim is denied on the
merits before the ICC, such denial having become a final order,
section 9 prohibits an action in district court on the same claim.
See United States v. 1.C.C., 337 U.S. 426, 434, 69 S.Ct. 1410, 93
L.Ed. 1451 (1949); 49 U.S.C. § 9 (1970). Here, the Commission
held that Alco had failed to establish a prima facie case as to its
claim under section 1(11) — clearly a decision on the merits.
Hence, Alco has elected its remedy with the Commission, and
the section 1(11) claim is therefore barred in this court. See
United States v. Kansas City S. Ry., 217 F.2d 763, 771 (8th Cir.
1954).
However, the Commission did not decide Alco’s claim
under section 1(4) on its merits, finding that it had no
jurisdiction to do so. Hence, the question is whether Alco,
having not appealed to test the correctness of the Commission’s
decision, has nevertheless elected its remedy within the meaning
of section 9.
An examination of court decisions reveals that the question
of the Commission’s jurisdiction to award damages for a
carrier’s violation of its duty under 49 U.S.C. § 1(4) is unsettled,
at least where the requested transportation equipment is already
15. See Midland Valley R.R. v. Barkley, 276 U.S. 482, 48 S.Ct. 342, 72 L.Ed. 664
(1928); Taylor County Sand Co. v. Seaboard Coast Line R.R., 446 F.2d 853, 855 (Sth
Cir. 1971).
29a
Appendix B
owned by the carrier.'° If the Commission’s ruling as to its
jurisdiction is incorrect, Alco clearly should have sought judicial
review of the denial of d.mages, since a favorable ruling
thereupon would have preserved Alco’s administrative remedy.
But since Alco has not appealed, the ineffectiveness of the
remedy would be due to its own inaction. Hence, if the ICC does
have jurisdiction to enforce section 1(4), Alco should be found
to have made a binding election, because its chosen remedy
would have been adequate had it pursued that choice to ee
fullest.
On the other hand, if an appeal had confirmed that the
Commission is indeed without jurisdiction to award damages
under section 1(4), the court might be more syinpathetic to
Alco’s plea to assert its damage claim in court despite its
contrary reading of the law, since it would seem that the pursuit
of a nonexistent remedy could not constitute an election with the
meaning of section 9. But Alco has foregone its opportunity to
have the existence of its ICC remedy judicially determined
through the established procedures for judicial review. This
court believes that, in the face of unsettled law as to the
availability of a remedy, the policy behind section 9 requires
Alco to pursue its chosen course to the fullest extent before it
will be found not to have made a binding election due to the
inadequacy of the remedy it selected. For whatever reason, Alco
decided not to pursue fully its initial choice. Alco therefore
should not be allowed to begin again in another forum.
Equally important in this case, however, is the interest of
the parties and of the public that litigation concerning a single
16. Compare 1.C.C. v. Baltimore & A.R.R., 64 F.R.D. 337, 345 (D.Md.1974):
Asbury v. Chesapeake & O. Ry., 314 F.Supp. 310 (D.D.C.1970), and New York Cent.
R.R. v. United States, 201 F.Supp. 958, 959 (S.D.N.Y.), vacated as moot, 371 U.S. 805
83 S.Ct. 19, 9 L.Ed.2d 51 (1962), with United States v. Pennsylvania R.R., 242 U.S. 208.
226-27, 37 S.Ct. 95, 61 L.Ed. 251 (1916) and Durslite Co. v. Erie Lackawanna Ry. 339
LC.C. 312, 314 (1971). ;
30a
Appendix B
set of circumstances should stop at some point.'’ Because the
statutory duties imposed upon carrier by the Interstate
Commerce Act are overlapping to a great extent, see, e.g., 49
U.S.C. §§ 1(4), 146), 109), 1(11), 1(12), 1(18), 3(1), 6(1), 15C)
(1970), a particular set of facts could conceivably establish a
violation of any number of them. Alco therefore could have
invoked the ICC’s reparations jurisdiction under section 16(1) by
alleging B & A’s violation of one or more other sections of the
Act, for it is settled that the ICC, apart from section 1(4), has
the power to determine the reasonableness or validity of an
embargo.'* Alco chose not to assert violations of other sections
before the ICC but instead seeks damages under section 1(4)
here. This court, in all probability, would be required to refer
the matter back to the ICC for its primary jurisdiction
determination as to the reasonableness of the embargo under
another section of the Act. Holt Motor Co. v. Nicholson
Universal S.S. Co., supra at 591-92; see Chicago & N.W. Ry. v.
Union Packing Co., supra at 737. In effect, this would permit
17. In addition to Alco’s ICC complaint, two other proceedings on the same set of
facts have been brought: this proceeding for damages and permanent injunctive relief,
and B & A’s abandonment application now pending before the ICC. All are subject to
appellate review. Further, a full hearing was previously held by this court on ICC's
motion for a preliminary injunction. Were this court to refer the current action to the
ICC under the doctrine of primary jurisdiction, another hearing and administrative
appeal would be held, again followed by judicial review. The application of the ICC's
final order (assuming no reversal for further administrative proceedings) to this action
would require further proceedings here, subject to appellate review. Hence, were this
court not to dismiss Alco’s claim, there could be a total of at least six plenary hearings,
three administrative appellate proceedings, and nine separate judicial review proceedings
(including possible Supreme Court review) all on the same set of facts.
18. Asbury v. Chesapeake & O. Ry., 314 F. Supp. 310, 313 (D.D.C.1970), New
York Cent. R.R. v. United States, supra at 959; Baltimore Chamber of Commerce v.
Baltimore & O.R.R., 45 1.C.C. 40, 51 (1917); see Chicago & N.W. Ry. v. Union Packing
Co., supra at 737; 49 U.S.C. $§ 1(6), 13(2), 15(1) (1970); American Mfg. Co. v. Director
General, 77 1.C.C. $2 (1922); cf. Holt Motor Co. v. Nicholson Universal S.S. Co., supra
at 591-92; New Orleans v. Traffic: & Transp. Bureau v. Mississippi Valley Barge Line
Co., 280 i.C.C. 105 (1951). See also United Siates v. Kansas City S. Ry., 217 F.2d 763,
771 (8th Cir. 1954).
3la
Appendix B
Alco to assert a second claim on the same set of facts in a second
action before the Commission without having sought an appeal
on the first. The logical extension of permitting this result would
be to allow a plaintiff that has lost its case under one section to
return to the ICC to seek relief upon the same set of facts under
a second section, and, if the plaintiff loses again, to seek the
same relief later under a third.'?
Litigation must end somewhere. To allow a plaintiff to
shuttle back and forth between the ICC and the courts asserting
new claims each time would be not only inequitable to the
defendant, but contrary to the purposes of section 9 of the
Interstate Commerce Act. By requiring a plaintiff who brings an
action under section 9 to assert ail its claims in one action in the
forum of its choice, the endless “renvoi” will never begin. In this
case, Alco had the opportunity to assert all its claims before the
Commission but chose not to do so. Hence, Alco, has elected its
damage remedy before the Commission within the meaning of
section 9. Accordingly, its claim is barred in this court. 49
U.S.C. § 9 (1970). See also United States v. I.C.C., 337 U.S. 428,
434, 69 S.Ct. 1410, 93 L.Ed. 1451 (1949); Asbury v. Chesapeake
& O. Ry., 314 F.Supp. 310, 313 (D.D.C.1970). The defendants’
motion to dismiss Alco’s damage claim will be granted.
An appropriate order will be entered separately.
ORDER
For the reasons stated by this court in the Memorandum of
even date, it is this 29th day of April 1975, by the United States
District Court for the District of Maryland, ordered:
. 19. And since the legal claims, theories, and issues may be different each time, strict
principles of res judicata may not apply. See 2 K. Davis § 18.01-.02.
32a
Appendix B
1. That the motions of defendants to dismiss or in the
alternative to stay the action for permanent injunctive relief be,
and the same hereby are, denied.
2. That the motion of defendants to dismiss the claim of
plaintiff Alco-Gravure, Inc. for damages be, and the same
hereby is, granted.
The Clerk shall mail a copy of this Order together with a
copy of the Memorandum of even date to counsel for all parties.
ORDER
For the reasons stated by this court in the Memorandum of
April 29, 1975, it is this 12th day of May, 1975, by the United
States District Court for the District of Maryland, ordered:
1. That the defendants are enjoined from further violation
of 49 U.S.C. § 1(18) in regard to the abandonment of the
operations of a line of railroad, that runs from Clifford Junction
in Baltimore City to a point approximately six miles south, so
that rail service can be restored to plaintiff Alco-Gravure, Inc. in
Glen Burnie unless and until defendant, The Baltimore and
Annapolis Railroad Company, has received a certificate of
public convenience and necessity from the Interstate Commerce
Commission authorizing such abandonment;
2. That defendants shall proceed forthwith to effect
sufficient repairs necessary to restore, continue and sustain rail
service to plaintiff Alco-Gravure, Inc. within Federal Railroad
Administration Class | standards at speeds of ten miles per hour
unless and until such certificate is obtained;
3. That not more than thirty days from the date of this
Order defendants shall file -with this court and serve upon
plaintiffs a comprehensive plan for the work to be done to
33a
Appendix B
restore service including a time schedule for completion of the
various phases of the work, an expected final completion date
for all of the work, and the persons, firms or corporations
engaged or to be engaged to perform the various phases of the
work, and each two weeks thereafter shall file with the court and
serve upon plaintiffs a report of the work completed together
with any requests for revision of the plan earlier filed; that these
reports will terminate upon restoration of service, but further
action by this court will be predicated thereon if satisfactory
progress is not timely made toward such restoration of service;
4. That defendants shall give due consideration in the
selection of contractors for any or all of the work to persons,
firms or corporations able to commence and complete the work
without undue delay.
34a
APPENDIX C
INTERSTATE COMMERCE ACT
Sections 1(4), 8, and 22, 49 U.S.C. §§1(4), 8, 9, and 22(1)
§ 1, par. (4). Duty to furnish transportation and establish
through routes; division of joint rates. It shall be the duty of
every common carrier subject to this chapter to provide and
furnish transportation upon reasonable request therefor, and to
establish reasonable through routes with other such carriers, and
just and reasonable rates, fares, charges, and classifications
applicable thereto; and it shall be the duty of common carriers
by railroad subject to this chapter to establish reasonable
through routes with common carriers by water subject to
chapter 12 of this title, and just and reasonable rates, fares,
charges, and classifications applicable thereto. It shall be the
duty of every such common carrier establishing through routes
to provide reasonable facilities for operating such routes and to
make reasonable rules and regulations with respect to their
operation, and providing for reasonable compensation to those
entitled thereto; and in case of joint rates, fares, or charges, to
establish just, reasonable, and equitable divisions thereof, which
shall not unduly prefer or prejudice any of such participating
carriers. Feb. 4, 1887, c. 104, Pt. I, § 1, 24 Stat. 379; June 29.
1906, c. 3591, § 1, 34 Stat. 584; June 18, 1910, c. 309, § 7, 36
Stat. 544; Feb. 28, 1920, c. 91, § 400, 41 Stat. 474; Aug. 9, 1935,
c. 498, § 1, 49 Stat. 543; Sept. 18, 1940, c. 722, Title I, § 2(c), 54
Stat. 899.
§ 8. Liability in damages to persons injured by violation of
law.
In case any common carrier subject to the provisions of this
chapter shall do, cause to be done, or permit to be done any act,
matter, or thing in this chapter prohibited or declared to be
unlawful, or shall omit to do any act, matter, or thing in this
35a
Appendix C
chapter required to be done, such common carrier shall be liable
to the person or persons injured thereby for the full amount of
damages sustained in consequence of any such violation of the
provisions of this chapter, together with a reasonable counsel or
attorney's fee, to be fixed by the court in every case of recovery,
which attorney's fee shall be taxed and collected as part of the
costs in the case. Feb. 4, 1887, c. 104, Pt. I, § 8, 24 Stat. 382:
Aug. 9, 1935, c. 498, § 1, 49 Stat. 543.
9. Remedies of persons damaged; election; witnesses
Any person or persons claiming to be damaged by any
common carrier subject to the provisions of this chapter may
either make complaint to the Commission as hereinafter
provided for, or may bring suit in his or their own behalf for the
recovery of the damages for which such common carrier may be
liable under the provisions of this chapter in any district court of
the United States of competent jurisdiction; but such person or
persons shall not have the right to pursue both of said remedies,
and must in each case elect which one of the two methods of
procedure herein provided for he or they will adopt. In any such
action brought for the recovery of damages the court before
which the same shall be pending may compel any director,
officer, receiver, trustee, or agent of the corporation or company
defendant in such suit to attend, appear, and testify in such case,
and may compel the production of the books and papers of such
corporation or company party to any such suit. Feb. 4, 1887, c.
104, Pt. I, § 9, 24 Stat. 382; Mar. 3, 1911, c. 231, §291, 36 Stat.
1167; Aug. 9, 1935, c. 498, §1, 49 Stat. 543; Oct. 15, 1970, Pub.
L. 91-452, Title Il, § 243(a), 84 Stat. 931.
§ 22. Restrictions; quotations of rates for United States
Government
(1) Nothing in this chapter shall prevent the carriage,
storage, or handling of property free or at reduced rates for the
36a
Appendix C
United States, State, or municipal governments, or for
charitable purposes, or to or from fairs and expositions for
exhibition thereat, or the free carriage of destitute and homeless
persons transported by charitable societies, and the necessary
agents employed in such transportation, or the transportation of
persons for the United States Government free or at reduced
rates, or the issuance of mileage, excursion, or commutation
passenger tickets; nothing in this chapter shall be construed to
prohibit any common carrier from giving reduced rates to
ministers of religion, or to municipal governments for the
transportation of indigent persons, or to inmates of Veterans’
Administration facilities or State Homes for Disabled Volunteer
Soldiers and of Soldiers’ and Sailors’ Orphan Homes, including
those about to enter and those returning home after discharge,
under arrangements with the boards of managers of said homes;
nothing in this chapter shall be construed to prohibit any
common carrier from establishing by publication and filing in
the manner prescribed in section 6 of this title reduced fares for
application to the transportation of (a) personnel of United
States armed services or of foreign armed services, when such
persons are traveling at their own expense, in uniform of those
services, and while on official leave, furlough, or pass; or (b)
persons discharged, retired, or released from United States
armed services within thirty days prior to the commencement of
such transportation and traveling at their own expense to their
homes or other prospective places of abode; nothing in this
chapter shall be construed to prevent railroads from giving free
carriage to their own officers and employees, or to prevent the
free carriage, storage, or handling by a carrier of the household
goods and other personal effects of its own officers or employees
when such goods and effects must necessarily be moved from
one place to another as a result of a change in the place of
employment of such officers or employees while in the service of
the carrier, or to prevent the principal officers of any railroad
company or companies from exchanging passes or tickets with
other railroad companies for their officers and employees; and
37a
Appendix C
nothing in this chapter contained shall in any way abridge or
alter the remedies now existing at common law or by statute, but
the provisions of this chapter are in addition to such remedies;
nothing in this chapter shall be construed to prohibit any
common carrier from carrying any totally blind person
accompanied by a guide or seeing-eye dog or other guide dog
specially trained and educated for that purpose or from carrying
a disabled person accompanied by an attendant if such person is
disabled to the extent of requiring such attendant, at the usual
and ordinary fare charged to one person, under such reasonable
regulations as may have been established by the
carrier: Provided, That no pending litigation shall in any way be
affected by this chapter: Provided further, That nothing in this
chapter shall prevent the issuance of joint interchangeable five-
thousand-mile tickets, with special privileges as to the amount of
free baggage that may be carried under mileage tickets of one
thousand or more miles. But before any common carrier, subject
to the provisions of this chapter, shall issue any such joint
interchangeable mileage tickets with special privileges, as
aforesaid, it shall file with the Interstate Commerce Commission
copies of the joint tariffs of rates, fares, or charges on which
such joint interchangeable mileage tickets are to be based,
together with specifications of the amount of free baggage
permitted to be carrier under such tickets, in the same manner as
common carriers are required to do with regard to other joint
rates by section 6 of this title; and all the provisions of said
section relating to joint rates, fares, and charges shall be
observed by said common carriers and enforced by the Interstate
Commerce Commission as fully with regard to such joint
interchangeable mileage tickets as with regard to other joint
rates, fares, and charges referred to in said section. It shall be
unlawful for any common carrier that has issued or authorized
to be issued any such joint interchangeable mileage tickets to
demand, collect, or receive from any person or persons a greater
or less compensation for transportation of persons or baggage
under such joint interchangeable mileage tickets than that
38a
Appendix C
required by the rate, fare, or charge specified in the copies of the
joint tariff of rates, fares, or charges filed with the Commission
in force at the time. The provisions of section 10 of this title
shall apply to any violation of the requirements of this proviso.
Nothing in this chapter shall prevent any carrier or carriers
subject to this chapter from giving reduced rates for the
transportation of property to or from any section of the country
with the object of providing relief in case of earthquake, flood,
fire, famine, drought, epidemic, pestilence, or other calamitous
visitation or disaster, if such reduced rates have first been
authorized by order of the Commission (with or without a
hearing); but in any such order the Commission shall (1) define
such section, (2) specify the period during which such reduced
rates are to remain in effect, and (3) clearly define the class or
classes of persons entitled to such reduced rates: Provided, That
any such order may define the class or classes entitled to such
reduced rates as being persons designated as being in distress
and in need of relief by agents of the United States or any State
authorized to assist in relieving the distress caused by any such
calamitous visitation or disaster. No carrier subject to the
provisions of this chapter shall be deemed to have violated the
provisions of such chapter with respect to undue or
unreasonable preference or unjust discrimination by reason of
the fact that such carrier extends such reduced rates only to the
class or classes of persons defined in the order of the
Commission authorizing such reduced rates. (Emphasis
supplied.) Feb. 4, 1887, c. 104, Pt. I, §22, 24 Stat. 387; Mar. 2,
1889, c. 382, §9, 25 Stat. 862; Feb. 8, 1889, c. 61, 28 Stat. 643;
Aug. 18, 1922, c. 280, 42 Stat. 827; Feb. 26, 1927, c. 217, 44 Stat.
1247; Mar. 4, 1927, c. 510, § 1, 44 Stat. 1446; June 27, 1934, c.
847, Title V, §511, 48 Stat. 1264; Aug. 9, 1935, c. 498, $1, 49 Stat
543; July 5, 1937, c. 432, 50 Stat. 475; Aug. 25, 1937, c. 776, 50
Stat. 809; Sept. 18, 1940, c. 722, Title I, § 3 (c-e), 54 Stat. 900,
901; Sept. 27, 1944, c. 423, 58 Stat. 751; July 27, 1956, c. 759, 70
Stat. 702; Aug. 31, 1957, Pub. L. 85-246, 71 Stat. 564; Sept. 2,
1958, Pub. L. 85-857, § 13 (a), 72 Stat. 1264.
39a
APPENDIX D
FINDINGS AND ORDER OF ADMINISTRATIVE LAW
JUDGE
INTERSTATE COMMERCE COMMISSION
Initial Decision
No. 35735
ALCO-GRAVURE, INC.,
FORMERLY PUBLICATION CORPORATION
Vv.
THE BALTIMORE & ANNAPOLIS RAILROAD
COMPANY
Defendani ordered to cancel its temporary embargo and to
provide and furnish transportation upon reasonable request
therefor to the complainant and other shippers served by its line
as required by section 1(4) of the Interstate Commerce Act.
Cease and desist order entered. Complaint in all other respects
dismissed.
John J. Walsh and Earl H. Nemser for complainant. Joseph
I. Huesman for defendant.
By Warren C. White, Administrative Law Judge:
Findings
Upon consideration of all the evidence of record, the
Administrative Law Judge finds that the defendant, The
Baltimore & Annapolis Railroad Co., has, through the issuance
of a temporary embargo, unlawfully abandoned all operations
40a
Appendix D
over its line in violation of sections 1(4) and 1(18) of the Act;
that the Commission lacks jurisdiction under section 1(18) to
remedy this wrong and therefore the matter will be referred to
the Bureau of Enforcement to bring a court action under section
1(20) seeking an injunction coupled with daily penalties against
the continuing violation; that the Baltimore & Annapolis
Railroad Co. shall be directed to cancel its temporary embargo,
cease and desist from its failure to perform its duty to provide
and furnish service to Alco upon reasonable request therefor,
initiate application for such emergency loans as may be required
for repair of the Patapsco River Bridge and damaged track, and
restore service to Alco and other shippers located on the six
miles of its track situated between Baltimore and Glen Burnie,
Md.; that any impact upon the environment from restoration of
rail freight service will be favorable; and that the complaint in all
other respects will be denied.
Order
It is the ORDER of the Administrative Law Judge that the
complaint, except to the extent granted, be, and it is hereby,
dismissed.
‘t is further ordered, That the Baltimore & Annapolis
Railroad Company cancel its temporary embargo, take whatever
measures are necessary to restore service, and thereafter be, and
it is hereby, notified and required to cease and desist within 30
days of the date this order become effective and thereafter to
refrain and abstain from failing to fulfill its duty to provide and
furnish transportation upon reasonable request therefor.
And it is further ordered, That, in the absence of a stay or
postponement by the Commission or the timely filing of
exceptions, the effective date of this order shall be 30 days from
the date of service hereof. ~
4la
Appendix D
Dated at Washington, D.C., this 24th day of April, 1974.
Ae By the Commission, Warren C. White, Administrative Law
udge.
ROBERT L. OSWALD,
Secretary
(SEAL)
42a
APPENDIX E
OPINION AND ORDER OF REVIEW BOARD
INTERSTATE COMMERCE COMMISSION
No. 35735
ALCO-GRAVURE, INC., FORMERLY PUBLICATION
CORPORATION
Vv.
THE BALTIMORE & ANNAPOLIS RAILROAD
COMPANY
Decided August 22, 1974
Commission held to lack jurisdiction to grant
relief for abandonment of a portion of line of
defendant and alleged failure to furnish
transportation upon reasonable request. Prima
facie case not been made for section I(11)
violation. Complaint dismissed.
Earl H. Nemser and John J. Walsh for
complainant.
Joseph I. Huesman for defendant
REPORT AND ORDER OF THE COMMISSION
REVIEW BOARD NUMBER 4
MEMBERS FITZPATRICK, SHAW, AND FISHER
43a
Appendix E
BY THE BOARD:
This proceeding was consolidated for hearing with
abandonment application, No. AB-71, which was filed by
defendant, The Baltimore & Annapolis Railroad Company
(B&A) on January 11, 1973. However, a subsequent motion of
the complainant to separate the proceedings was granted by
order served October 5, 1973, and the instant complaint was
heard separately.
An initial decision herein by an Administrative Law Judge
was served on May 6, 1974, and exceptions and replies were filed
by both parties. Our conclusions differ, in part, from those of
the Administrative Law Judge. Exceptions and requested
findings of fact or law not discussed or referred to in this report,
nor reflected in our findings or conclusions, have been
considered and found not justified or resolution thereof not
necessary for the proper disposition of this proceeding.
Alco-Gravure, Inc., hereinafter called Alco or complainant,
filed a motion on July 1, 1974, for expediting the decision on
exceptions, to which B&A replied on July 15, 1974.
Subsequently, on July 19, 1974, complainant filed a motion for
leave to file a reply to defendants’ reply. The motion
expedition is based on the premise that the Administrative Law
Judge’s findings will be adopted by us, but we disagree in part
with his findings. Therefore, the motion is denied.
Complainant’s motion for leave to file a reply to a reply is also
denied, because a reply to a reply is not permitted by the
provisions of rule 23 of the Commission’s General Rules of
Practice.
By complaint filed on September 26, 1972, Alco alleges that
B&A has unlawfully imposed a temporary embargo of its rail
freight service to Alco’s Glen Burnie, Md., plant on account of
the damaged Patapsco River Bridge over which freight cars must
44a
Appendix E
pass to reach Alco’s Glen Burnie plant; that defendant is
unjustified in refusing to restore service; and that complainant is
entitled to orders (1) compelling the B&A to restore rail freight
service to Alco, (2) awarding damages to Alco pursuant to
sections 8, 9, and 16(1) of the Interstate Commerce Act in an
amount equal to the excess costs it has been forced to incur
through the necessity of using motor common carriers to deliver
freight at its Glen Burnie plant, and (3) directing the B&A to
cease and desist in the future from committing violations of
sections 1(4), 1(11), and 1(18) of the Act. .
Alco is in the business of rotogravure printing, especially
Sunday magazine supplements for some large newspapers and
advertising circulars for certain major retailers. It has a printing
plant at Glen Burnie and, until the cessation of service by the
B&A, received most of its deliveries of newsprint and other
supplies by rail. The B&A has a 6-mile track connecting the
Alco plant with the Baltimore and Ohio Railroad Company
(B&O) main line. B&A is a class-I] common carrier by railroad
and also transports passengers by motor bus under certificates
issued by the Commission.
On June 22, 1972, Hurricane Agnes damaged the railroad
bridge over the Patapsco River which is located on the B&A’s
indicated line to Alco’s plant. As a result, B&A was not able to
continue to provide service to points on the side of the bridge
where Alco is located. Thereafter, on June 23, 1972, B&A issued
an embargo on service at points on this line, which has
continued in effect. Alco alleges that the embargo has been
unlawful since September 26, 1972, when it filed the complaint
herein. Service on a small portion of defendant’s line north of
the bridge has resumed.
The parties have never been able to agree on how service
can be restored south of the bridge including whether
complainant or defendant must initially pay for the necessary
45a
Appendix E
repairs. Direct rail service is desired by complainant because
newsprint is more susceptible to damage in motor carrier
delivery. Alco estimates that from June 22, 1972, to November
1, 1973, motor carrier delivery of newsprint resulted in damage
approximating $110,000, of which $34,000 has not been
recouped by complainant and $76,000 of which has been passed
on to its customers through higher prices.
Alco also asserts extra costs by motor carrier for drayage
from storage warehouses to plant, storage and handling of
returns of steel cylinder paper fill cores to particu'ar paper mills,
return of rejected paper, rental of equipment for unloading
paper rolls, loss of unloading credits, clerical, and paper
handling. According to complainant, most of the additional
costs incurred by Alco for damaged newsprint and for use of
motor carriers could have been avoided if the B&A had
promptly restored its rail facilities and resumed service to Alco’s
Glen Burnie plant.
There is conflicting evidence with respect to the amount of
money required to repair the relevant 6 miles of the B&A’s right
of way, mainly the bridge. Alco claims that it would only cost
the B&A approximately $50,000 to make the necessary repairs
and to restore service, that the B&A is financially able to do so,
and that the cost of repairs is not as great as the damage which
the B&A has inflicted on Alco and its customers. Estimates
obtained by defendant, however, ranged from $120,000 for the
bridge alone to $187,000 for bridge and track repairs.
In his initial decision, the Administrative Law Judge found
that the B&A had, through the issuance of a temporary
embargo, unlawfully abandoned operations over its line in
violation of sections 1(4) and 1(18) of the act, and that there was
no showing of violation of section 1(11). In connection with
section 1(18), he further found that the Commission lacked
jurisdiction and referred the matter to the Commission’s Bureau
46a
Appendix E
of Enforcement to file a court action against the defendant. In
connection with section 1(4), he found that the Commission has
jurisdiction, and he ordered the B&A to cancel its temporary
embargo, to take whatever measures are necessary to restore
service, and to cease and desist from committing these violations
in the future.
The defendant in its exceptions alleges a number of errors
were made relating to the facts, including that the
Administrative Law Judge should not have considered the
verified statements of two witnesses whom complainant failed to
produce for cross-examination. Defendant also alleges that the
Administrative Law Judge erred in not following the holding in
Duralite Co., Inc. v. Erie Lackawanna Ry. Co., 339 1.C.C. 312
(1971), to the effect that the Commission lacked jurisdiction to
remedy section 1(4) violations.
Complainant also filed exceptions to the initial decision. It
claims that the Administrative Law Judge was in error in not
awarding damages to complainant for injuries it suffered as a
result of the section 1(4) violation. Complainant also states that
the Administrative Law Judge erred in holding that complainant
had not made a prima facie case of a section-1(11) violation.
Finally, complainant charges that it was error for the
Administrative Law Judge to hold that the Commission lacked
jurisdiction to enforce section 1(18) of the act, stating that the
precedent for this holding, Powell v. United States, 300 US.
276, is factually distinguishable and that such a result would
frustrate the congressional purpose in enacting that section of
the act.
DISCUSSION AND CONCLUSIONS
Complainant alleges violations by defendant of sections
1(4), 1(11), and 1(18) of the act. In essence, section 1(4) provides
that common carriers are to furnish transportation upon
47a
Appendix E
reasonable request; section 1(11) calls for railroads to furnish
safe and adequate car service; and section 1(18) states that a
railroad may not abandon a line without obtaining a certificate
from the Commission.
We agree with the Administrative Law Judge’s findings
regarding sections 1(11) and 1(18) of the act. Section 1(11) is
concerned with car shortages and fair and equitable distribution
of cars; and we affirm the Administrative Law Judge’s
conclusion that complainant has failed to make a prima facie
case with respect to section I(11) of the act and that the
Commission does not have jurisdiction to grant complainant
relief under section 1(18) of the act. The entire Commission in
Duralite Co., Inc. v. Erie Lackawanna Ry. Co., supra, basing its
decision on a number of decisions beginning with Powell v.
United States, 300 U.S. 276 (1937), held:
“it is well settled that under section 1(20)
remedies for violation of section 1(18) must be
sought by court action.” 339 I.C.C. at 314.
We disagree, however, with the Administrative Law Judge’s
finding that the Commission has jurisdiction under section 1(4)
of the act. The Administrative Law Judge’s finding under 1(4) is
expressly premised on his disagreement with the decision in
Duralite. The entire Commission, in Duralite, held that the
Commission lacks jurisdiction under section 1(4) to grant relief
in a factual situation similar to that here involved stating that:
Based upon the views expressed by the Supreme
Court in United States v. Pennsylvania R. Co.,
242 U.S. 208 (1916), the Commission has taken
the position that enforcement of the railroads’
section 1(4) duties, except as entrusted to us by
other provisions of the statute, rests with the
courts and not with us. See. for example, Oliver
Mfg. Supply Co. v. Reading Co., 297 1.C.C. 654
(1956) and cases cited therein. 339 I.C.C. at 314.
48a
Appendix E
The decision in Duralite is dispositive of the 1(4) issue here.
Finally, as mentioned previously, complainant raised the
issue on exceptions of the failure of the Administrative Law
Judge to award damages for violation of section 1(4). We need
not reach this issue, since, as seen above, the Commission lacks
jurisdiction to enforce section 1(4). Therefore, neither do we
consider the allegations relating to an award of damages in
connection with sections 8, 9, and 16(1) of the act.
We find, in light of the foregoing, that the complaint should
be dismissed.
We further find, that this decision is not a major Federal
action significantly affecting the quality of the human
environment within the meaning of the National Environmental
Policy Act of 1969.
IT IS ORDERED, That the complaint filed in this
proceeding be, and it is hereby, dismissed.
(SEAL) ROBERT L. OSWALD
Secretary
49a
APPENDIX F
ORDER OF APPELLATE DIVISION
At a Session of the INTERSTATE COMMERCE
COMMISSION, Division 2, acting as an: Appellate Division,
held at its office in Washington, D.C., on the 16th day of
January, 1974.
No. 35735
ALCO-GRAVURE, INC., FORMERLY PUBLICATION
CORPORATION
Vv.
THE BALTIMORE & ANNAPOLIS RAILROAD
COMPANY
Upon consideration of the record in this proceeding, of the
petition for reconsideration filed October 15, 1974, by
complainant, and the reply thereto filed by defendant on
October 31, 1974;
It is ordered, That the petition be, and it is hereby, denied
for the reason that sufficient grounds have not been shown to
warrant granting the action sought.
By the Commission, Division 2, acting as an Appellate
Division.
(SEAL) ROBERT L. OSWALD,
Secretary
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.