Brief for the Respondents in Opposition — B. F. Goodrich Co. v. Northwest Industries, Inc.

Court, U.S.

. lets

ee oe Pa | » FILED

fre rt ot Ht he UN 80° 1970

OCTOBER THEM, 1970. 12 ROBERT SEAVER CLERK

Pa % ty ry

Se . ar j .

‘Tae BF. GooprscH ‘Compaies: cane

; Petitioner,

NorTHWEST INDUSTRIES, INC. a

are INTERSTATE COMMERCE Peasy cessniek ee

oucia snaanes

On Petition for: a Writ of Certiorari to the United States

os Const of _—_—. for the Third’ axa

. . BRIEF FOR RESPONDENT

NORTHWEST INDUSTRIES, IN C. IN OPPOSITION

| | -Youne te eae ee

PS: "EDWARD B. MAXWELL, a

“*. Young, Conaway, Stargatt &.

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1401 ‘Market. Tower :

_+ ‘Wilmington, Delaware 19801, v

-- Bpwarp- K: WHEELER Se

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eae Pad nS _’. Rosert @, SEAKS ge 7 9 ae

: Wheeler. & Wheeler:

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- - Sune 80, 1970. si a

_ WILSON - EPas PRINTING Co. - RE 7-6002 - WASHINGTON, [

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TABLE OF CONTENTS

QUESTIONS | PRESENTED Es,

STATUTE. INVOLVED. Pie

STATEMENT OF THE = ee a eet

"ARGUMENT © - eae ae

CONCLUSION: . 2

. a7 on, r e 4 BY a e ‘i

A CITATIONS °° \

,. BF. Goodr ich Company Vv. Northwest’ Industries,

rok S-D.N.Y., C.A. 69-309

“e ‘Chicago & ‘N. W. Ry. €o.—Me rae, 333 LCC.

.1¢236 (1968)*".

“Chicago South Shore & South: Bend R. y. gee

Railroad, 235. F. Supp. 984 {N.D. 10. 1964)

: Cleme ys v.- Central “Railroad Company of New :

: Jersey, 264 FL Supp. ! 551 (E.D. Pa. 1967), rev'd t

on ather grounds; 399, F. 2d 825° in Cir. 1968),

cert. denied 393 U.S. 1023 (1969) |

. Most Vv. Alleghany Corporation,

° (S.D.N.Y. 1970) :

-F. Supp.

Neisloss-V. Bush, 293. F. od 873. (D.C, Cir. 1961)

= Péunticntral Merger and N&W Inclusion Cases

389: U.S. 486 (1968)

~ Sehwabacher ve. United. States,- 334 USS. 182

(1948) . s Sopa tae

-]

In THE |

| Supe Court of the Wuited States

OCTOBER TERM, i970

—No.1647-

THE B. F. Godpricn ComPAny, |

eyo! oy Petitioner, -

Wa :

NORTHWEST INDUSTRIES, INC. and

INTERSTATE COMMERCE COMMISSION,

Respondents. *

On Petition for.a Writ of Certiorari to the United, States.

: Court of Appeals for the Third Circuit

BRIEF FOR RESPONDENT ;

“NORTHWEST INDUSTRIES, : INC, IN OPPOSITION

_ QUESTIONS PRESENTED

_. Whether the federal courts ‘should entertain a com-

plaint peqesng ee injunction against an alleged vio-

‘lation of Section 5 of the Interstate Commerce Act when

».. complainant previously raised the identical issues before .

_ the Interstate Commerce Commission, received an adverse

determination, and failed to — the Commission’s

ordér.

Whether:.a private. party’s eaatalee, charging: a vio- *

lation of Section 5 of the Interstate Commerce Act, states

~a federal cause of action for injunctive relief.

i

?

STATUTE INVOLVED

Pertinent paragraphs of Section 5 of. the Interstate

Commerce Act (49 U.S.C, $5) provide in. part:

(2(a) It-shall be lawful, with the approval and

authorization of the Commission, . .. for a person

which is not a carrier and w hich has ‘control: of one

or more carriers to acquiye control of another car--

. rier through.ownership of its stock or otherwise... .

(ec) In paksing upon any proposed transaction

under the provisions of this paragraph (2), the Com-

mission shall give weight. to ie following considera-

ions, among others: (1) The effect of the proposed

transaction upon adequate transportation service to

the public; (2) the effect upon the publie interest of

the inclusion, or failure to include, other railroads in

the territory involved in the proposed. thansaction ;

(3) the total fixed charges resulting from the pro-

posed: transaction; and (4) the interest of the car-

* rier employees afected, +

(4) Tt shall: be unlawful for any ‘person, except as

provided in paragraph 2), to enter into any’ trans-

action within the scope of ‘subparagraph (a) there-

a -. 7

(7) The Commission is hereby autherized, upon com-

plaint or upon its own initiative without complaint,

but after notice and hearing, to investiga

termine whether any pefson is violating the

sions of paragraph (4).-If the Commission jfinds

after sueh investigation that such person is violdting

the provisions of such paragraph, it shall by order

require such person to také such action as may be

“necessary, in the opinion of the Commission, ‘to. ‘pre-

‘ * vent continuance of such violation. .

(8) The district courts of the United States sKall

have jurisdiction tpon the complaint of the Commis- . —

- sion, alleging a violation‘ of any of the provisions of

this section or disobedience of. any order issued by

— ,

the Commission thereunder by any person, to issue

such writs of injunction or other proper process,

mandatory oF otherwise, as may be necessary to re-

strain such person from -violation ,of such provision

or to compel, ohedierce.to such order, Xv.

(11) The authority conferred by this section shall’

be exclusive and plenary, and any carrier or corpora-

tion participating in or resulting from any transac-

tion approved by: the Commission thereunder, shall

have full power . .. to carry such transaction into.

effect . . . and any carriers or other corporations,

and their officers and employees and any, other per- .

sons, participating ‘in d transaction approved or .ay- |

thorized under the provisions ef this section shall be

_and they are hereby: relieved: from the operation of.

the ‘antitrust laws ‘and of all other restraints, limi-

» tations, and ‘prohibitions of law, Federal; State, or

municipal, insofar as may be necessary to enable

. them “to 22 effect the transaction so ap-

proved, .

aa a STATEMENT OF THE’ cAsE

§

In Jaane 1969 respondent Industries * acme an

offer to exchange certain of its securities for petitioner

Goodrich’s stock,’ Goodrich’s management, pursuing “a

wide array of tactics in attempting to block | Industries]

from making the offer” -(R. 28a),** sought té interpose

. the Interstate @ommerce Act, and procedures of the In-

terstate Commerce Commission, between Industries’. offer

and its consideration by Goodrich’ s stockholders. Initially,

Goodrich urged ‘that the Commission require Industries °

to submit for Commission aes al under Section 20a of

.

* Parties are here fiven the same shortened names used by

Goodrich in its petition and by -the two lower courts in their

opinions. = 5 ss ~

** “R.” yefers tg the record filed in this Court;- ” refers

to the Geodrich petition Ww hose. appendices clude both yes er col

opinions, |

bag

the Act the securities offered to Goodrich stockholders

(R. 722 -82a).. * ; Pie

‘As-a second Maes effort, in March 1969, Goodrich -

Required all the stock of Motor Freight, a motor carrier

subject to’ the Commission’s jurisdiction. Three: days

later, it filed a petition with the Commission urging that,.

since’ Goodrich ‘wow had control of a motor carrier and ~

Industries already had control of a rail carrier; Indus-

tries’ acquisition of control of Goodrich would, combine

_ two carriers -in, violation of Section 5 of the Interstate

‘oCommerce Act, absent ‘the Commission’s prior authoriza-

tion (R. 83a-88a),. -Goodrich prayed that the Commission

“initiate a proceeding . to determine whether it should

issue:an order to prevent violation’ of the statute” (R.

86a) ,°a move patently designed to: lead to “possible hear-.

ings and protracted litigation” (R.:27a). mu

Industries responded to the Goodrich petition that,. si-

multaneouly with.any acquisition of control of Goodrich, —

‘it would either _dispose_of-the carrier or deposit its Stock

——with an- - independent voting trustee (R. 95a-97a). In-

dustries laid before the Commission a draft agreement.

6 AR. 190a-110a) | which’ (1) assigned to the trustee all

authority ‘and power Industries might otherwise acquire

with respect to Motor Fréight-upon acquisition of control

of Goodrich and (2) provided a permanent voting trust

arrangement upon terms and conditions such as have |

_ been repeatedly approved. by the Commission. Goodrich -

extensively criticized the proposed agreement (R, 234a-

, 237a).

‘ The Cede s order declined dither _ to ‘vestigate

the alleged prospective ‘violation of Section 5 of the Inter-

state Commerce Act, or ‘to declare that Industries’ ac-

quiring control. of Goodrich would -violate ‘the Act. (R:

Sa-10a). The order’s recital clauses noted both Industries’

undertaking to deposit its stock with an indepéndent

voting trustee and that such agreements had been- held

effective to, prevent control. The order. also refused to

-

—————

5.

reopen the prior preceeding in which the Com

determined not to compel Iridustries to obtain approval

of its security issuances under. Section 20a. See Chicago

& N. W. Ry: beer 333 LC.C. 236, 239-241 |

(1968). eee ee

Goodrich’ did not appeal’ this Commission order. In-

stead, it filed its.complaint against Industries in the Dis-

trict Court of Delaware, alleging the same facts respect-

ing its motor carrier acquisition and the same violation

of, Section 5 of the Interstate Commerce Act which it

had previously put before the Commission. The Commis-

sion intervened and moved to dismiss. The District Court

granted the dismissal, holding that the Court lacked sub-

ject matter jurisdiction of the complaint, that, even as-

suming such jurisdiction, the Court should decline. it in

view of the primary jurisdiction of the Commission, and

—that, finally, the total: circumstances surrounding the liti- ©

gation did not warrant issuance of an injunction. .

The Court of Appeals ‘for the Third Circuit -anani-

mously affirmed, believing that the complaint was an

impermissible , collateral attack upon the Commission’s.

order. It ‘also agreed with the. District. Court that See- ~

tion 5 of thé Interstate Commerce Act does. not permit.

a private action for its ‘enforcement. It found it un-

necéssary to decide whether the doctrine of primary ju-

risdiction would also’ require the -same result.

ARGUMENT

1. The only question which Goodtich suggests merits

review—whether Section 5 of the Intestate Commerce

Act permits a private action for injunctive relief—would

probably not be reached should review be granted. There

are other. routine and compelling gr ounds for sustaining

the action of. the lower courts in dismissing, the com- - :

plaint. | : . om

:

; sion had.”

~

Here, Goodrich has been to the Commission with the .

identical. allegations, : ev entuating in a final order of ‘the

Commission declining the relief sought. The Court. of

Appeals* initial and principal holding was that, Goodrich

having failed to“apeal the Cgmmission’s order, its com-

plaint constituted an-impermissible collateral attack upon

_ that order, (Pet.,. pp. A10-A14). It did. not disagree :

+

~~

_ but did_not — reach, the District Court's view that

doctrine of primary jurisdiction vould clearly pve-

on its taking action in any event (Pet., pp. A81- ay

Both of these well-settled principles ane clearly li-

cable, provide independent groundy-for affirming ne dis-

missal of Goodrich’s complaint’ apart from the- question ,

sought: to be reviewed, and do not wart ‘ant any exposi-

tion by this Court in, the framework of this ease.

There is no merit in the arguments Goodrich adducés

to escape their application. Goorich’s claim is that the

Commission order’ is unclear to the point that it might

be viewed as a mere “abstract declaration,’ and hence

not appealable. The short answer given by the Court of

. Appeals was that the “Commission’s order : . . determined

the right of Industries to proceed with its nequjsition ¢ of

Goodrich, and it denied page the épportunity to con-

test this issue...” (Pet., A13). Moreover, the.

Commission order is a full and ‘explicit denial of every-

thing which Goodrich requested in its pleadings beforé

the Commission. If the denint did not result inAn ap-

pealable order, it would-be only becatise of Goodrich’s

inept pleading and failyre to exhaust its administrative

remedies. -Clearly, ander the provistons of Section 517),

*Goodrich could have filed a formal complaint whose, denial

or dismissal would have eliminated any possible question

of appealability. ey, . . .

- ‘ ° s “ Pr P

2. Goodrioh urges that its case presents “serious and

recurring problems” (Pet., p. 9), and that “as tender .

offers’ become increasingly common and thus, more diffi-

cult to police, target corporations should not be left to

“-

- 7

‘

. *.

s

the questionable mercy of regulatory agencies which are

at times overburdened with other. tasks or insensitive to‘

the necessity of compelling compliance with the statute

Which they are charged with. administering.” (Pet., p.

10). ; on

s : .

Against the present. factu: il back bccuak: is: singu-"

larly inappropriate-for Goodrich to suggest that the Com-

mission might have been “insensitive” to its* important

tasks. To the contrary, the Commission might well have:

been sensitive to the possibility that its processes were

| being misused in a contest having nothing to. do with

transportation -and- which should be settled in the market

place. Transpar ently, Goodrich management here sought

‘to contrive-an Interstate Commerce Act problem, and

thus td-deny its stockholders an opportunity even to con-

sider a tender offer-w hieh other federal ‘statutes assured

would be fairly made. ° The sequence of ev ents—tender

~ offer by’ Industri ies in, January, acquisition -by Goodrich |

of a motor carrief on “March 4 , and petition to so advise ©

the Commission. by Goodrich on March ‘7—justifies: what

the District Judge referred to as “suspicion in one’s

_mind” that the affair was.a “maneuver concocted by ex-

ecutives or more likely lawyers” (R. 179a).*

* Depositions in another litigation arising. out. of the tender

offer confirm the “suspicion.” Goodrich hastened to acquire a

motor carrier upon. the advice of its counsel; the motor carrier

was acquired after assurance that it was competitfye with the

' railroad -controlled by Indtistries. See deposition of Goodrich’s

chief. executive officer in B. F. Goodrich: Company v. Northwest |

Industries, S.D.N.Y., C.A. 69-409, which included the following:

“Q. Did you report. to the’ board ‘of directors the recommenda-

tion of Mr: Hartfield of White & Case and of Mr. Cox of -the. Cov-

ington “firm, that your company. dacquire a trucking Hne?

A. ... 1 am-sure we told the board that this was -recommended

by White & Case and by Mr. Cox,

Q. Did your board of directors, in n considering ‘the acquisition of

The Motor Freight Corporation, discuss or consider the extent to

which the routes serviced by that trucking line were competitive ;

with areas serviced by the railroad a of ‘Northwest’ In-

br agit

‘A. There -was a route | map present whica. was passed | around

ute

. The case provides its own persuasive jllustration why.

enforcemerit of Section 5,-should be left .to the Comimis-

sion. “Assuming: arguendo’ that Industries’ acquisition of

control of Goodrich would violate Section 5, the resulting

violation would be sterile, technical, ephe ner al, and un; °

worthy’ of detailed Commission attention.” The Commis=

“sion might well have considered. ‘that such a violation

paled in coniparison with the palpable Misuse its proe-

esses Which Goodrich sought. .The Commission certainly

does not sit tg ensur® the tenure in office of a rubber

company’s sh,

gement, or to, prevent consideration of a

tender..pifer by a rubber company’s tanec _The-

Confmission should be left free tg make a. praetieal judg-

ment.6n the need to enforce and the method of enforcing

Section 5; it should not: have enforcenient partially lifted

out of its hands and reposed in private. litigants.

A, mice Court of Appéals cor! rectly noted that permit :

tin

tingxa private cause of action for injunctive: relief for a

alleged violation of Section 5 msi at war with the

statutory scheme“vesting responsibilify for the operation.

of common carriers with ~ Commissfon” (Pet., p. A15).

This Court has fr equently ‘emarked upon the comprehep-

—sive nature of Section 5, devised by Congress to -encour-

_ of private litigation: must. not in any Way im

‘trude upon the Commission’s exercise of its

r ‘esponsibilities..

age carrier consolidation; and the very wide discretion-

ary powers entiusted thereunder .to. the Commission. See,

e.g, Schwabacher v. United States, 334 U.S. 182 (1948) ;

Penn-Ce ntral Merger and NEW frelusion Cases, 389 U. S.

486. (1968), The specific language of the Section, as well

as its ov erriding purpose, makes very clear the Commis-

sion’s supremacy in the area, and that the hap}

€or in-

important

Paragraph (11) of the Section sebieidins that the jur-

- isdiction of the Commission shall be “exclusive ’ ‘and plen-

ary,” and that the Commission’s approval of a consolida-

-tion’ provides both antitrust immunity . and relief from

-~ @

?

istance .

a 2

: “ : oe 7 . Lee ’

9 ; ; | .

Ye One| :

_Féderal, State, or municipal gragraphe (7) empowers

‘the Commission to ‘institute an inves\igation of possible

“all other restr ‘aints munca” Parag prohibitions of law,

P

violations, upon ‘its own motion or upon complaint, and

to order such, avtion as may be “necessary, in the Com- -.

cou»

mission’s opinion, to terminate any Violation it finds. To

put beyond any doubt what*is otherwise clear, Paragraph

(8) confers upon the District Courts Jurisdiction over

alleged violations only “upon the. complaint of sa Com-

mission” (emphasis added).

The only other Court. of Appeals Ww which has cubiteuinned

the problem has been as emphatic as the Court below in

— rejecting: the. view: that Section -6 either needs or tolerates |

a private action for its enforcement. Neisloss’ v- Bush,

‘293 F..2d 873 (D.C. .Cir. 1961), involved a complaint

charging that the Commission had wrongfully declined

_ to investigate alleged ‘violations of Section 5.. Mr. Jus-

tice Reed, sitting by special designation, said that there

“is nothing inmhe statute or its history to, indicate that

Congress, in enacting $5 (2), meant to authorize an

original action in the district court, and that it took the

"extraordinary ‘step of, bypassing its expert agency in the

_matters here invelved—tp-878+—He continued that the —

‘matters ‘involved ‘ ‘call for. the éxercise_of discretion and

the practical application of the Commerce Act” and cited

with approval an earligr Supreme Court statement that —

the. “prescription of the sPatute is a standard—for the

Commission to apply and, independently of Commission .

action,» ere: ates no right which courts may enforce”

(Ibid.), At least two district courts have reached the

same conclusion. ‘Chicago South Shore & South Bend R.

v. Monon Railroad, 235 F. Supp. 984 (N.D. Tll.. 1964);

Clemens. v. Eentral Railroad Conpany. of New’ Jersey,

264 F. Supp. 551 (E.D. Pa, 1967), rev'd on other grounds,

399 FB. 2d 825 ¢3d Cir, 1968), cert. denied, 393 U.S. 1023

(1969). > :

Most ‘v. Alléghany Corporation :

_(S.D.N.Y. 1970), which is Petitionér’s s pMineipal reliance,

_ =

| lee aes : Sie

Piss 5 — eo: m . + ; e

ee on ee ee : .

is s distinguish: ibTe

on a prior Commi: sion decigion, nor presenting wy fae-

tual: questions of * rontrol,” Te as the Court of “Appeals.

recognized to be here’ pirespnt’(Pet., pp. ALT-AL8).° “To

the extent that the Jos! decision countertainees iy private

B@aciion under Scetion 5, it4 authority is dubious, particu

larly: so sings it reached “ifs decision without benefit of

aS neithet involving a a iter: a attack

Commission, etc failed to meet the arguments —

persuasive to allgpther nts; and even Aaile to notice

“the Neisioss agian WeMthut-by the District Coukt! below...

One -out-of-step district court decision, cloyided as it is by.

the considerations given above, does not present ‘grounds. "

for, review by this Court, i phe hee

i

“The ease otherwise does not’ atise in such au postur e.

as watrants the <ittention of’ this Court. * The 4 shape

Court denied relief at a tite, when the tenger Wer -o

tndustries ‘was still outst: inding. That offer Qxpired prior

(°- the appeiil to the Court of Appeals._Indusiriesy then

nd now, holds less than 17°. of the voting stick of Good-=.

rich. Industries’ herein veaks its adyice to thew ‘ourt of

Appeals (1) that-it has no present plan. or ‘intention to

resume etftrts te-.aequire. control ef Goodrich, (2) that. it”

mivht, iné the immediate or far future, feel compelled. to:

make a further etfort t to nequire control, and (3) that it,

therefore. declines to urge mootness since: it wishes to

give. no hostages to the future.

It is, nevertheless, clear’ that. the case involves no pres-

ent controversy and ‘no immesiate’ practic: il problems.

The compfaint seeks injunctive relief’ cagaingt” action

whieh may never be attempted. Should Industries re-

new an effort. to acquire contrel “of Goodyieh, ‘whether

Goodrigh is entitled to injunctive-relief’ may hinge on-the

-manner: in) which — stich ory -is sought or on, other

equitable considerations whi ‘annot now be foreseen,

This Court's restricted time shfuld not be given to Dri. i-

vate litigations which have no immediaey. is

.

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7 ~~ Young, Conaway, Stargatt & 4

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a < 1401 Market Tower. a

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ae _ Epwarp K,- WHEELER emer au Stee:

ili INDY a aT ns Robert G.SEAKS: -

ee. Wheeler & Wheeler, .--

; 704: Southern Building. ; -

; ‘ : Washington, D. &. 20005 .

; : : Attorneys s for Respondent ma .

~~. Northwest Industries, Inc. >

June 30),¢ “1970 . ea coe eae

-*. |

Fee

=)

ju the Suprime Court nf the United States )

OCTOBER TERM, 1970 |

No. 216

THE B. -F. GOODRICH COMPANY, PETITIONER .

Vv.

NoRTHWEST INDUSTRIES, ING. AND

_ INTERSTATE COMMERCE COMMISSION

ON PETITION FOR A WRIT OF CERTIORARI TO THE

Eee STATES COURT OF APPEALS FOR

THE THIRD CIRCUIT -

~ APD & 4 F .

: BRIEF FOR THE >

INTERSTATE COMMERCE COMMISSION

_IN OPPOSITION

OPINIONS BELOW ©

| The opinion of the court of appeals (Pet, App. A6-

A19) is not yet reported. .The opinion of the district - -_

court (Pet. App. A21-A35) is reported at 303 F.

Supp. 538. .The order of the Interstate Commerce

Commission is unreported. and appears as an Ap-

pendix = this brief.: :

(1)

=——

a

JURISDICTION

The judgment of the court of appeals was entered

on April: 14, 1970, and the petition for a writ of cer-

- ~ torari was filed on June 2, 1970. The jurisdiction

of this Court is invoked under 28 U.S.C. 1254(1). ,

QUESTIONS PRESENTED |

1. Whether Séction 5 of the Interstate Commeree

Act is enforceable by private suit.

2. Whether the instant private action, br ough be-

fore a single district judge, is an impermissible col-_

lateral attack upon an order of the Interstate Com-

merce Commission,. which order is reviewable only by _

‘suit against the United States in a thr slic court.

a

. STATEMENT

This litigation involves’ an attempt by petitioner

(“Goodrich”). to avert its takeover by respondent

Northwest Industries, Inc. (“Industries”). The rele-

vant facts aré that Industries, a holding company. con-

— trolling ‘certain railroads, announced a tender offer

for all Goodrich stock in January 1969 (Pet. App. |

A7, A22).. Petitioner then sought to prevent the ac-

quisition by requesting the Interstate Commerce Com-

mission to reopen a proceeding involving Industries’

control of the railroads,’ so as to require ICC ap-

proval for securities that Industries would issue to

acquire Goodrich (Pet. App. A7-A8, A28). ee

*Chicago & N.W. Ry. Co. _ Merger—Chicago i Great -

Western Ry. Co., 333 1.C.C. 236 (1968).

, = 3

In March 1969, Goodrich purchased a motor car- |

rier, thereby creating the likelihood that Industries’

_ control of Goodrich would ‘violate Section 5 of the

Interstate Commerce Act (49 U.S.C. 5) because it

would thereby acquire control of another carrier with-

out Commission approval (Pet. App. A8, A29).

Stressing this Section 5 question, Goodrich’ renewed __

-its request that.the prior Industries’: proceeding be

reopened for imposition of securities regulation, and,

in the alternative, asked the Commission to’ invésti-

gate the contemplated: Industries-Goodrich merger to

determine whether the agency should enter an order .

. to otieaad a Section 5 5 violation (Pet.- each A8, A28-

A380). |

In reply, Industries” stated that, if“it obtained. con-

trol of Goodrich, it. would sell the motor carrier Good-

rich had acquired to a non-affiliated non-carrier or,

pending such a sale, would place the motor carrier

stock in an independent voting trust (Pet. App. A9,

A30). “After receiving a draft trust agreement fr om .

Industries and arguments from Goodrich, the Com-

_mission issued an order dated April 24, 1969 (Ap-

pendix, infra, p..11), which reopened the proceeding

for the purpose of subjecting Industries to Section

20(5) of the,Act, but denied relief “in all other ‘re- —

_spects” (Appendix, infra, p. 18). It based this denial

in part on its findings that |

* * * on March 4, 1969, B. F. Goodrich Com- .

‘pany acquired contr ol of Motor Freight Cor- ©

: poration, an interstate motor carrier, through

acquisition of all the latter’s common stock, that

4

Northwest Industries, Inc., has stated that. simul-

taneously with acquisition of control ‘of B. F.

Goodrich Company the stock of Motor Freight

Corpération will be sold to a non-affiliated non-

carrier, or, pending sale, complete control of such

motor carrier will be placed.in an independent -

voting trustee, [and] that the Commission hac

held in.the past that the placing of stock in an

independent voting trust, with necessary re-

_strictions, constitutes divestiture of control there-

‘of, see Missouri Pacific Railroad Company — “

ye Contiol—Chicago. & Eastern Illinois “Railroad

Company, et al., 8327 1.C.C. 2790 il: . [Appendis,

infra, pp. 12-13.] ye

Goodrich never sought judicial. review of this Coit |

mission order. ’

On July 25, 1969, while the tender ‘ie was open

(Pet. App. A22), Goodrich filed the instant suit -

. against Industries seeking a declaratory . ee

that the acquisition would ‘be unlawful under Section

5,-and-an injunction bafring it until Commission ap-

wedi was granted. The Interstate Commerce Com:

mission was allowed. to intervene and successfully

moved to dismiss (Pet. ‘App. ‘A9-A10, A21-A85).

The court of appeals affirmed on the ground that this

litigation was an improper collateral attack upon the \

Commission order. (Pet. App. A10- A14). In the al-

ternative, the court held that’ an assumed violation —

of Section 5 of the Interstate Commerce | Act. would: ~

n& give. rise to a private claim on — relief. could

be granted (Pet. App. A14-A18). ,

Meanwhile, the tender offer had santeol | in dieiet

1969 (R. 52a), with Industries having acquired over —

16 percent of Goodrich’s stock. New York Times, Au-

. . : co

5 ae

a

~ gust 16, 1969, pp. 35, 39. In its brief below, Indus-

tries stated that it had no present intention to renew |

_the ‘effort, but reserved the right to do So at any fu-

ture time.’ Co a

- ARGUMENT

The decision below i is cor rect and no issue warrant-

‘ing plenary review is presented. vo

1. The court of ‘appeals: correctly held that the

complaint ‘was in substanee a collateral attack upon.

_ the Commissfon’s order which could be asserted only

against the United: States before a statutory three-.

judge court-convened ‘under 28 U.S.C. 2321-2325. Be-

fore the Commission, as here, petitioner sought to

halt the Industries takeover effort on the ground that

Industries would thereby acquire a carrier without

- Commission approval, in violation of Section 5 of the

‘Act (Pet. App. A8): The Section claim. was the

heart of Goodrich’s position in the Commission:.pro-

ceeding and-in the instant litigation. As the court ©

of appeals stated, “it is clear that .the Commission

_ dealt with the same contentions made by Goodrich in

the District Court” (Pet. App. A10).

-—

' After the Commission had’ denied relief on these |

eulcaitdions Goodrich was not free to circumvent the

order and the. normal channels. of «judicial review .

. through ca snriar resort to private — By ;

y

2On May Zi,. 1969, the United States filed a penne

against Industries charging that the attempted takéover would

violate Section 7 of the Clayton. Act (15 U.S.C. 18). Soe .

United States v. Northwest Industries, Inc., 301 F. Supp:

1066 (N. 1). 1k ). Discovery prageemiags are still vaieciaied Ww —

.

, ‘ mt- ye ~ Be : : : \

seeking to enjoin the acquisition as a violation: of °

Section 5, petitioner is plainly: asking the courts to .

correct’ the Commission’s decision not to act in-this

regard when the matter was before it. That request

ean be asserted only before a statutory three-judge

court reviewing: the Commission order, not in an in- —

dependent suit brought before a single district judge.

-— Venner v. Michigan ¢ ‘ontrad RoR. Co., 271 U.S: 12 75

L ambert Run Coal Co. v. Baltimore & Ohio R. R: Co.,

- 258 U.S. 377; Tampa Phosphate R. Co. v. Seaboard

Coast Line R, Co., 418 F, 2d 387 (C. A, 5), certiorari

denied, 397. U.S,.980; Suffin v. Pennsylvania R. Co.,

396 F, 2d 75, 76 (C.A. 3), certiorari denied; 393 :U.S.

~ 1062;. Simpson v. South Western R. Co., 231 F, 2d

59, 62-66 (C.A. 5), certiorari denied, 352 USS. 828;

Schwartz v. -Bowman,. 244. F, Supp. 51, 68 (S.D.

N.Y. ), affirmed sub. nom. Annenberg -v. Allegheny

-Corp., 360 F. 2d 211 tin 2), certiorari denied, 386 ae

U.S. 921.

There is no merit to petitioner’ s contention that D

the Commission’s order was: in fact anreviewable

(Pet. 9, 11). Though negative in form, it had a di-

rect and immediate impact upon the rights of the

parties because. it allowed Industries’ to pursue its

attempted acquisition of Goodrich notwithstanding a

Goodrich’s allegations that the -acqttisition would vio- ~

late Section 5. Under such cases ‘as City of Chicago

.y. United States, 396 S.- 162, Frozen Food Express:

Co. v. United States, 351 U.S. 40, Rochester Fele-

phone Corp. v. ‘United States, 307 U.S. 125, 142-148, |

and the well-established presiumption of reviewability

(City of ——— supra, 396. US. at 164; Abbott i

7

baa

one Vv. Cardin: 387 v. S. 136, 140) it was

plainly a reviewable order. Cf. Tampa Phosphate. zt

Co. v. Seaboard Coust Line R. Co., supra. Indeed, for

_ these ‘reasons, the b aeriaie: arene ie ‘conceded |

reviewability.

2. The court of. appeals proper ly held that therd

is no private cause of action for violation. of Section

5 of the interstate ‘Cominerce Act (Pet. App. Al4- .

| A18)." The statute authori izes no such suits either,

expréssly or by. #nplication. Sections 5(7): and 5(8)

explicitly empower the Commission, with court aid

when neeessary, to enforce the ‘statute, The “author- .

"ity conferred by” .Section’ 5.is “exclusive and plen-

ary” (49 U.S.C. 5(11):). And the absence of a provi-

, ~ sion authorizing: private enforcement of Section 5 is

‘ particularly significant -where Congress has already

created private actions for violations of other sections -

of the Interstate Commerce Act.* -Cf. T.I.M.E.,- Inc.

v. United States, 359 U.S. 464. Moreover, approval

of private suits—with Section 5 decisions being made

by the ‘courts—would necessarily restrict. the Commis-

sion’s present discretion to approve transactions in.

- the public interest notwithstanding . prior unauthor-

'. ized control.’ To transfer the administration of Sec-

* 9 Big., 49 U.S.C. 1(20), 8; 9, 20a(11), 322(b) (2). A private. *

party may also bring an action to enforce a Commission order

(28 U.S.C. 2321).

* Gilbertville Trucking Co. Vv. Unite d States, 371 U.S. 115,”

" 129- 130; Interstate Investors, Ine. Vv: United ‘States, 287 F.

Supp. 374, 389. (S.D.N. Y.}, ‘affirmed per euriam, 393 U.S. 479; ,

8 Illinois Central R. Co.-v. United States, 263 F..Supp. 421,

425-4130 (N.D. Il. ), affirmed per curiam, 385 U.S. 457.

ae

”