Opinion
Civ. A. No. 2360.
July 25, 1961.
James M. Tunnell, Jr., and George T. Coulson (Morris, Nichols, Arsht Tunnell) Wilmington, Del., and William J. Grove (Dow, Lohnes Albertson) Washington, D.C. for plaintiff.
Leonard G. Hagner, U.S. Atty., Wilmington, Del., for defendant the United States.
H. Neil Garson, Washington, D.C. Assoc. Gen. Counsel for Interstate Commerce Commission.
Joseph L. Lenihan, Louisville, Ky., for Louisville Nashville Railroad Co., intervenor.
Earl E. Eisenhart, Jr., Washington, D.C. for Southern Ry. Co., intervenor.
Homer S. Carpenter (Rice, Carpenter Carraway) Washington, D.C. for Property Owners Committee, intervenor.
Charles F. Rouse, Raleigh, N.C. for Carolina Power Light Co., intervenor.
North Carolina Natural Gas Corporation, a Delaware corporation, filed suit under § 17(9) of the Interstate Commerce Act, 49 U.S.C.A. § 17(9), to review certain orders of the Interstate Commerce Commission. This Court has jurisdiction under the Act and under 28 U.S.C. § 1336, 2284, 2321-2325. The complaint seeks, inter alia, the convention of a 3-judge court under the statutes, supra. The complaint is properly before this Court in accordance with 28 U.S.C. § 1398 in that plaintiff, as stated, is a Delaware corporation.
The orders complained of refused to hold unlawful certain Tariffs providing special reduced rail transportation rates on bituminous fine coal from points of origin in Kentucky, Tennessee, West Virginia and Virginia to various destination points in the South including North Carolina. The legal challenge is to the Tariffs which provide preferred rates — agreed upon by the shipper-transporter-and assignee — of 25¢ per ton per carload less to a consignee who, in the 12 month period ending the last day of the second month preceding delivery, has received a prescribed aggregate minimum volume. Such rates are less than the regularly published rates applicable to a consignee who has not received such minimum volume.
It is alleged the special reduced rates were calculated to enable delivered cost of bituminous coal to compete with natural gas in the Carolina territory.
Plaintiff, North Carolina Natural Gas, has since October 1, 1959, distributed and sold natural gas to domestic, commercial and industrial consumers within the service area; and has distributed and sold wholesale to other private and municipal distribution companies. Southern Freight Tariff Bureau filed the challenged Tariffs which were not rejected by the Commission and the rates established were permitted to become effective on March 1, 1960, as legally filed rates.
Jan 27, 1960: SFTB Tariff 903, SFA ICC S-96 to be effective March 1, 1960. See, Item 215 (p. 13); Supplement 1 issued Feb. 16, 1960, adding to Item 215-A; Supplement 2 issued Feb. 23, 1960; Supplement 3, issued Feb. 23, 1960, cancelling Supplement 2 and changing the form but not the substance of Item 215-A by substituting Item 215-B and group classification.
Prior to that on February 25, 1960, the Commission instituted an investigation "into and concerning the lawfulness of the rates, charges, rules, regulations and practices contained in the schedules, with a view to making such findings and orders in the premises as the facts and circumstances shall warrant." Plaintiff, North Carolina Natural Gas, claiming to be adversely affected by the February 25, 1960 action of the Commission, on September 23, 1960 filed with the ICC a motion to expunge the filed Tariffs and to terminate the proceedings in Docket No. 33360 as to the Tariffs and rates contained therein.
Docket No. 33360: In re Southern Railway System (Southern Railway Company) Tariff ICC A-11352, Supplement 80; Southern Freight Association, Agent, Tariff ICC S-64, Supplement 8 and 9; Southern Freight Association, ICC S-96 and Supplements 1, 2 and 3; and, Southern Freight Association, Agent, ICC S-98 and Supplement 1.
ICC, Division 2, by order on January 10, 1961 denied plaintiff's motion, holding "The matters submitted in support thereof do not constitute substantial and material grounds to warrant granting said Motion;" and the ICC ordered "that said Motion be, and it is hereby overruled." Then by an order of April 27, 1961, issued May 4, 1961, the ICC denied plaintiff's Petition for Reconsideration "for the reason that upon consideration of the decisions of this Commission in Coal from Kentucky, Virginia and West Virginia, to Virginia, 308 ICC 99, and Coal to New York Harbor Area, 311 ICC 355, sufficient and material grounds have not been presented to warrant a conclusion, without hearing, that the Tariffs assailed herein are unlawful per se." (Emphasis added).
Plaintiff seeks first a temporary restraining order, then to be followed by a preliminary and later a final injunction against the unlawful agreed upon reduced rail transportation Tariffs and rates which, plaintiff avers, irreparably injure and will continue to injure it unless such Tariffs are restrained. Unless the injunctive process issues, plaintiff further avers, the designed purpose of the coal producers, rail carriers and coal consuming electric power companies will be accomplished, and plaintiff's continued sale of natural gas to Carolina Power and Light Company, for example, will not be made because such sales will thus have been rendered uneconomical. Preliminarily, plaintiff seeks the instant relief of a temporary restraining order.
At the hearing and argument for the temporary restraining order certain parties (Louisville Nashville Railroad Company, Clinchfield Railroad Company, Southern Railway Company, The Cincinnati, New Orleans and Texas Railway Company, Interstate Railroad Company, Carolina Power and Light Company, Properties Owners Committee and Association of Coal Mine Operators, and others) appeared, sought intervention, and were heard.
These parties made oral motions to intervene, which were granted by the Court. It was agreed formal Petitions of Intervention were to be filed upon which formal written orders would be entered permitting such intervention in order to establish a formal Record in this Court.
Plaintiff's arguments for equitable relief are cast in the orthodox mold, viz.: irreparable harm by the ICC orders; the sought injunction will cause no injury or damage to others; continued effectiveness of the filed Tariffs and rates will cause sales of natural gas to Carolina Power and Light Company to be uneconomical to plaintiff and destroy contractual arrangements entered by that company with plaintiff, with the resultant destruction of plaintiff as a competitor; and, finally, to permit the Tariffs to remain effective "is not in the public interest." In addition, plaintiff argues 1. it has no adequate remedy at law; 2. it has exhausted its administrative remedies; and 3. it will probably prevail on final decision and determination of the legal issues raised by the complaint.
This is exuberantly challenged by the ICC and the Intervenors.
Ditto.
Plaintiff's legal argument is the reduced rates contained in the filed Tariffs are in violation of § 2 of the Interstate Commerce Act; the law prior to and independent of the Act, and the law subsequent to the Act, establishes all shippers and consignees must be charged an equal rate; the ICC itself has held volume rates are unlawful; and that the agreed upon volume reduced rates in SFTB Tariff 903, SFA ICC S-96 and SFTB Tariff 903-A, SFA ICC S-133 are, in addition, in violation of the Elkins Act, 49 U.S.C.A. § 41(1). Not only do the ICC and the Intervenors resist the issuance of a temporary restraining order, but the ICC and the Property Owners Committee have also moved to dismiss the complaint, because of 1. failure to exhaust administrative remedies; 2. lack of standing to sue; and 3. lack of jurisdiction of this court to give the remedy sought in the complaint.
Trans. p. 4-5:
"The Court: Before you go on to No. 2, what form would that further procedure take?
"Mr. Garson: Well, your Honor, under § 13 of the Inter-State Commerce Act the avenue is left open to them at any time to file a complaint, a formal complaint challenging the rates before the Commission, and at the same time they will get a full hearing. After that the Commission can rule upon the matters submitted to them. All parties would be on notice of their position."
1. The sole issue before the court at this time is whether the present record, consisting mainly of the proceedings before the ICC, justifies the issuance of the temporary injunctive process. A reading has been had of the record before the ICC. The legal effect of those proceedings are in serious dispute. The law of this jurisdiction is, where such record shows a serious dispute, a temporary restraining order or preliminary injunction must be denied. A party seeking a temporary restraining order or a preliminary injunction must not only allege facts as to which there is no serious dispute, but also indicate such facts which show that the moving party has a reasonable probability of success upon final hearing. If any doubts are created, at the hearing and argument, as to the merits of the claim to relief, or the power of the court to act, the temporary restraining order or preliminary injunction will be denied. Acme Fast Freight v. United States, D.C.Del., 135 F. Supp. 823. And, in Acme Fast Freight, Inc. v. United States Interstate Commerce Commission, CA 1761 (D.C.Del.) November 4, 1955, Judge Rodney, after finding no irreparable injury had been shown where the Interstate Commerce Commission had refused to suspend a certain rate, denied a temporary restraining order.
The following cases contain all the cited cases (which are legion) in the District Court of Delaware and the Third Circuit: Dallas v. Atlantic Refining Co., D.C.Del., 189 F. Supp. 815; Clifton Park Manor, Section One v. Mason, D.C.Del., 137 F. Supp. 324, 325; Benton v. Glen McCarthy, Inc., D.C.Del., 154 F. Supp. 670; Acme Fast Freight v. United States, D.C.Del., 135 F. Supp. 823; Sims v. Greene, 3 Cir., 161 F.2d 87; Warner Bros. Pictures v. Gittone, 3 Cir., 110 F.2d 292. As stated, these cases cite, in turn, the remaining cases, on the point, in this district and circuit.
2. All the party respondents opposed the motion for temporary restraining order. In addition, the ICC and the Property Owners Committee argued their motions for the dismissal of the complaint for the reasons noted, supra. These matters were argued on July 18, 1961. Later, I discovered that on July 18, 1961, Chief Judge BIGGS had entered an order pursuant to §§ 2284, etc. of 28 U.S.C. designating Circuit Judge GOODRICH and District Judge RODNEY to sit with me as members of the court for the hearing and determination of the instant case. There appears to be no procedural difference if a 3-judge court is considering an action attacking the constitutionality of a State statute and a proceeding for a 3-judge court involving an order of the Interstate Commerce Commission. If a State statute is under attack, for example, the judge to whom the complaint is initially handed rules, in the first instance, whether the complaint on its face sets forth a cause of action sufficiently to require a 3-judge court. If it does not, the single judge dismisses the complaint. Voege v. American Sumatra Tobacco Corp., et al, D.C.Del., 192 F. Supp. 689; Blue Gold Stamps, Inc., v. Sobieski, D.C.S.D.Cal., 190 F. Supp. 133, 134-35; Ex parte Poresky, 290 U.S. 30, 54 S.Ct. 3, 78 L.Ed. 152. This view was recently supported in the Court of Appeals, Two Guys from Harrison-Allentown, Inc. v. McGinley, 3 Cir. 266 F.2d 427; Sealy v. Department of Public Instruction of Pennsylvania, 3 Cir., 252 F.2d 898, cert. den. 356 U.S. 975, 78 S.Ct. 1139, 2 L.Ed. 2d 1149. The same appears to apply to actions involving the Interstate Commerce Commission. In Virginian Ry. v. United States, 272 U.S. 658, 47 S.Ct. 222, 71 L.Ed. 463, the Court points out that the power to review the constitutionality of a State statute and an order of the ICC spring from the same statutory source (pp. 668-72, 47 S.Ct. p. 222), and the statutes pertaining to 3-judge courts are in pari materia.
In National Motor Freight Traffic Association, Inc. v. United States Interstate Commerce Commission, D.C.D.C., CA 1689-60, July 20, 1960 (unreported), Judge McGuire dismissed a complaint as a single-judge district court, even though a request had been made for a 3-judge court. So, too, in American Commercial Barge Line Co., et al, v. United States Interstate Commerce Commission, D.C.W.D.Pa., CA 60-751, November 20, 1960 (unreported), Judge Marsh wrote:
"The defendants have moved that this court, as a single judge, dismiss the plaintiffs' complaint which seeks, inter alia, the convention of a 3-judge court under 28 U.S.C.A., §§ 2325, 2284, to hear the complaint for an interlocutory and permanent injunction. After a study of the complaint and upon due consideration of the oral arguments of all parties in interest the court is satisfied that this case is identical in principle with the case of Helm's Express, Inc., et al, v. The United States of America and the Interstate Commerce Commission, Civil Action 17904 (W.C.Pa. 1959). The court in the Helm's case, which was composed of Judge Staley of the Court of Appeals for the Third Circuit, along with Judge Miller and myself of this court, dismissed the complaint for reasons which indicated that the court did not have jurisdiction to grant the relief sought.
"It is the opinion of this court that a 3-judge court would not have jurisdiction to grant the relief sought by plaintiffs, and therefore that the complaint would be dismissed and that this may be done by this court sitting as a single judge. See: Eastern States Petroleum Corporation v. Rogers, 280 F.2d 611, 615-616, 108 U.S.App.D.C. 63 (C.A.D.C. 1960); National Motor Freight Traffic Association, Inc. v. United States and Interstate Commerce Commission, Civil No. 1689-60 (D.C.D.C., July 20, 1960)."
To the same effect, in Jones Truck Lines, Inc. v. United States Interstate Commerce Commission, D.C.W.D.Ark., CA 288, June 17, 1955 (unreported), Judge Joe Miller dismissed a complaint for lack of jurisdiction for failure to exercise the administrative process where, also, the complaint had asked for a 3-judge court. In Davidson Transfer Storage Co. v. United States, D.C.Md., 164 F. Supp. 571, Judge Thomsen wrote (p. 573):
"When a complaint requesting that a three-judge court be convened is presented to a district judge, it is his duty to examine the pleadings to see if the district court has jurisdiction and whether it is a case which calls for the convening of a three-judge court. Jacobs v. Tawes, D.C.D.Md., 151 F. Supp. 770, affirmed 4 Cir., 250 F.2d 611. If the case is one which must be heard on the merits by a three-judge court, a single judge should not dismiss for lack of jurisdiction unless such lack clearly appears from the pleadings. On the other hand, the single judge should be sure that the case is one which requires the convening of a three-judge court before setting in motion the cumbersome machinery involved in such a proceeding."
In all of the cited authorities, it does not appear whether the 3-judge court had, in fact, been convened at the time of the argument to dismiss the complaint. That fact, however, is present in the instant case, for, as stated, the order of Chief Judge BIGGS was entered on July 18, 1961 convening the 3-judge court.
In Eastern States Petroleum Corp. v. Rogers, 108 U.S.App.D.C. 63, 280 F.2d 611, after discussing the question of whether a single judge is authorized to dismiss a complaint, in the light of the statutory prohibition against such action, Judge Bazelon wrote ( 280 F.2d p. 616): "As these decisions make clear, the provision of § 2284 precluding single judge dismissal, along with the other procedural requirements of that section, becomes operative only after a 3-judge court is convened."
Hence, the present writer, although having heard argument at length, hesitates to rule on the motions to dismiss the complaint for the reasons urged by the respondents, since the three-judge Court was in convention on July 18, 1961, the day of the hearing and argument before the writer. The parties may stipulate to have the argument on the motions to dismiss determined by the full three-judge Court on the basis of the arguments already made and found in the Transcript of Hearing and Argument, or the motions to dismiss will be re-heard by the three-judge Court.
The motion for temporary restraining order is, however, denied.