New York Cent. R. Co. v. United States

'HOUGH, Circuit Judge (after stating the facts as above). It is always advisable, and sometimes vital, to get behind the forms and formal parties -of a litigation, and ascertain who is the actual person insisting on the demand in suit, what that person wants, and why it is wanted. In form this suit has nothing to-do with the state of New York, but the truth is that that state is by long odds the person or party most seriously involved, and it is the maker of the essential demand herein. Description of that demand may be approached by another quotation from the dissenting opinion of Kellogg, J., in 198 App. Div. 436, 191 N. Y. S. 641. That learned judge not only said ut supra that the state built, controlled, and managed the canal, but that it also “controls and manages the terminals” thereof, including) of course) the Erie Basin terminál in Buffalo. This was error, probably inadvertent; the state did build the terminal, it owns it, and has made of the Erie Basin terminal what may fairly be called a railroad yard. But in the sense of operating or rendering useful the railroad yard that is the important part of that terminal, it never has done, and does not intend to do, the same. This case results from an effort to make some one else do what it has declined to do. The state of New York is not a carrier, common or otherwise. If the state should enter upon common carriage, and for that purpose acquire rolling stock, etc., it might well pro tanto lay aside its sovereignty and subject itself to the jurisdiction of mere regulatory authority, whether of its own creation, of another state, or of the nation. Georgia v. Chattanooga, 264 U. S. 472, 44 S. Ct. 369, 68 L. Ed. 796. But New York has done nothing of -this kind. It did petition the Interstate Commerce Commission to grant the order now attacked, but it distinctly did not prefer that petition as a common carrier, much less as one subject to the regulatory jurisdiction of the Commission itself. Therefore one way, and an accurate way, of putting the question before us is to inquire whether, at the request of a sovereign state, which is not a common carrier, but is beyond and superior to the regulatory or coercive power of the Commission, that body can lawfully compel a carrier undoubtedly subject to its jurisdiction- to operate the state’s property; i. e., to take over the management of the state’s Erie terminal, which the state itself refuses to operate as a railroad yard. It. is here essential to state that I regard the order complained of as having been made solely on the demand and at the suit of the state of New York. The intervention (so called) of the two ■ private corporations above named'was almost farcical. Both of them averred (in their application for intervention) that they were common carriers of goods, etc., upon the Barge Canal. But no evidence was given that either of these eon•cerns was or ever had been engaged in interstate commerce. On the contrary, the president of one of them deposed that his concern was “not in the interstate carrying business,” and the manager of the other stated on oath that his sole interest in this proceeding was that he sometimes did not get “eastbound business (from Buffalo) because there was no service from the terminal to the industries located in the Buffalo switching district”; in other words, he sometimes failed to get some intrastate business. The substance of the matter is that no common carrier engaged or seeking to engage in interstate business asked the Commission to do what it did. Consequently the question again arises whether the Commission could do what was done solely at the request of New York, and because (to summarize what is actually shown by the record) that state, having taken the trouble to make a freight yard alongside the Barge Canal and contiguous to the tracks of the New York Central Railroad, desired that railroad to take over and operate that freight yard in order to attract business to its canal. The evidence seems to me full that, if it were made easy to transfer goods from barge to car or the reverse, business might be attracted to the barges; and particularly is it plain that, if some one would undertake the business of collecting goods within the Buffalo switching district and delivering them on board barges at the terminal (or reversing the process), the procedure would meet with the approval of perhaps many-manufacturers and shippers doing business in Buffalo. It is a fair summary of what this order means that the plaintiff railroad shall extend its Buffalo yards, so as to make the state’s terminal an integral portion thereof. Practically the railroad is commanded to enter upon the state’s property and establish a freight depot, with appropriate switching and distributing service, at the canal edge. The entire cost of this operation is laid upon the plaintiff railroad; also (so far as shown by this record) the entire cost of upkeep of terminal, tracks, etc. The charges to be made for these services seem to be at present left to be fixed by the plaintiff railroad, subject, however, to the regulatory power of the Commission. The present state of the law on this matter seems to’ be this: The courts of New York [203] have decided that the Public Service Commission of that state cannot do what the state wants, and the Supreme Court has not affirmed that ruling, but declined to disturb it; consequently we accept it. But no court has said as yet that, in a proceeding such as was actually brought by the state before the Interstate Commission, that body was empowered to give the state what it wanted. Therefore that question comes before this court for the first time. This situation may be considered from several legal viewpoints: (1) Could the Commission do what it did (a) under the sections of the statute invoked; or (b) at the request of the state of New York only? (2) Could the Commission lawfully require the railroad to extend its lines, by undertaking the management and operation of another’s railroad property, especially when that other is a sovereign state, and not judicially compellable to respond for its own wrongs, or to maintain in operative condition the property to be managed by the railroad? (3) If the statute does grant the Commission such powers, is such statute constitutional? I prefer to confine present expression of opinion to the first of the above propositions. The petition presented to the Commission was specifically based on paragraph 13 of section 6 of the Interstate Commerce Act as at present amended (Comp. St. Supp. 1925, § 8569). It is well known that this section took its present shape principally to facilitate and advantage traffic through the Panama Canal. But it is so drawn as to be of much wider import. So I cull from the statute words which seem to me fairly to express the idea which the majority of the Commission thought authorized the order now complained of. The following are the operative words of the statute: “When property may be. transported from point to point in the United States by rail and water, the transportation being by a common carrier or carriers and not entirely within the limits of a single state, the Interstate Commerce Commission shall have jurisdiction in the following particulars : “(a) To establish physical connection between the lines of the rail carrier and the dock at which interchange of property is to be made. To prescribe the terms and conditions upon which these connecting tracks shall be operated (and to) determine what sum shall be paid to or by either carrier. “(b) To establish through routes and maximum joint rates between and over such rail and water lines. “(e) To establish proportional rates or maximum and minimum proportional rates.” The foregoing states the circumstances under which the Commerce Commission may exercise power. It is to be noted that no request was made to establish rates of any kind or routes. Nor was any request made to establish physical connection between the railway line and the dock; that physical condition exists and has existed for some years.' It follows that the only statutory language covering what the Commission was asked to do and' did do is the provision that “the Commission shall have full authority to determine and prescribe the terms and conditions upon which these connecting tracks shall be operated, and it may either in the construction or the operation of such tracks determine what sum shall be paid to or by either carrier.” Now let it be admitted that the words “may be,” supra, authorized the Commission to step in upon the mere hope or possibility that a connection will make or attract business. But it seems to me quite clear that, when the statute declares that, when it comes to directing the operation of tracks, a determination shall be made of what shall be “paid to or by either carrier,” such a statute necessarily implies and plainly means that there shall be before the Commission, and both subject to its jurisdiction, two carriers. This is an impossibility when one party, and the only substantial party, before the Commission, was the state of New York. Without pursuing the matter further, I am of opinion that plaintiff should take a decree as prayed for. KNOX, District Judge, concurs.