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NEW YORK v. UNITED STATES

April 20, 1951

STATE OF NEW YORK et al.
v.
UNITED STATES et al.



The opinion of the court was delivered by: BRENNAN

This proceeding challenges the validity of a report of the Interstate Commerce Commission, dated October 9, 1950, and an order entered thereon on December 12, 1950.

 For convenience the Public Service Commission of the State of New York will be referred to as the 'P.S.C.', the Interstate Commerce Commission as the 'I.C.C.', and the New York, New Haven and Hartford Railroad Company as the 'New Haven'.

 The order of the I.C.C. sought to be annulled requires the New Haven to increase its New York intrastate commutation fares so that they will become uniform with its interstate commutation fares for the same distance. The order complained of became effective February 1, 1951. An application to this Court for a temporary injunction restraining the enforcement of the order was denied upon the condition that the excess fares collected by the New Haven pending the final determination of this proceeding be impounded in such a manner that they could be returned to the commuters in the event that the order was finally determined to be invalid.

 The New Haven is an interstate railroad carrier providing regular passenger and freight service in the states of New York, Connecticut, Rhode Island and Massachusetts. Generally speaking, its principal passengers terminals are Boston on the north and New York City on the south. Its passenger service produces about 41% of its total operating revenue and is accountable for about 48% of its operating expenses. Its commutation service is substantial item of both revenue and expense in its total operation.

 Geographically the order involves commuters' transportation rates on the New Haven line over a distance of about twenty-six miles from the Grand Central Station at New York City. It applies to nine stations wholly within the State of New York, the most distant from the Grand Central terminal being that for the City of Port Chester.

 The order in question is referred to in the proceeding as a Section 13 order and the authority therefor is found in Section 13(3) and (4) of the Interstate Commerce Act, 49 U.S.C.A. § 13(3) and (4). *fn1" The controversy involves a subject matter of which the State of New York has the primary jurisdiction, and the I.C.C. has jurisdiction only for the purpose of removing discriminations referred to in the statute. There is, therefore, underlying this proceeding the question of the powers of the federal and state agencies and the general policy of comity between them. With these facts in mind it is deemed advisable to summarize the history of the rate-making of commutation fares as applicable here.

 Since 1925 commutation fares have been on a uniform basis. This result was obtained after an investigation by the I.C.C. and regulatory authorities in the States of Connecticut, New York, Massachusetts and Rhode Island (101 I.C.C. 703). This basis so far as pertinent here applied to a 60-ride ticket, good for thirty days from its date and otherwise unrestricted as to its use. Such uniformity existed except for a period from February 10, 1942 to May 14, 1943, during which time such fares were increased 10% following the Commission's order of January 23, 1942. About September, 1947, in a proceeding before the I.C.C. (269 I.C.C. 87), a 46-ride trip restricted commutation ticket, not valid on Saturdays, Sundays or holidays, was authorized. Fare increases were ordered in the 60-trip unrestricted and 46-trip restricted commutation tickets of 25% and 15% respectively. After the filing of the required tariffs by the New Haven with the P.S.C. that body suspended the operation thereof, and instituted an investigation. On March 6, 1948, the New Haven filed its petition under Section 13 of the Act, and requested that the I.C.C. make effective for intrastate traffic within the State of New York the interstate commutation fares found reasonable and established between stations in Connecticut and stations in New York (269 I.C.C. 87). On June 2, 1948, the P.S.C., by decision, cancelled the New Haven's intrastate tariff filed in September, 1947. The New Haven requested the P.S.C. to re-open the case and receive additional evidence. Hearings were held, and the P.S.C. by interim decision found the New Haven was entitled to temporary increases of 18% and 6% on the unrestricted and restricted commutation tickets respectively. Such interim rates were established for a limited period, but have been extended by order of the P.S.C. and they are now in force so far as the P.S.C. is concerned, although no final decision has been rendered. The I.C.C., after adjourning its hearings to permit the P.S.C. to complete its investigation, resumed its hearings under the Section 13 petition, which was amended to put in issue the interim rates above referred to, and the P.S.C. took part therein. The hearings involved the taking of a considerable amount of testimony and the consideration of several exhibits. A cost study was prepared by the New Haven and submitted to the P.S.C. and to the I.C.C. in the proceedings under discussion.

 On October 9, 1950, the I.C.C. rendered its decision, finding in substance that the monthly commutation fares imposed by the P.S.C. for intrastate travel between stations on the New Haven line within the State of New York cause, and unless increased by 25% in connection with the unrestricted tickets and 15% in connection with the restricted tickets over the fares in effect on July 8, 1949, will continue to cause undue and unreasonable advantage to and preference of persons and localities in intrastate commerce in the State of New York, and undue and unreasonable disadvantage and prejudice to persons and localities in interstate commerce between stations in the State of Connecticut and New York, and undue, unreasonable and unjust discrimination against interstate commerce; all in violation of Paragraph 4 of Section 13 of the Interstate Commerce Act. The P.S.C. on November 10, 1950, filed with the I.C.C. its petition for reconsideration of its decision. The petition was denied on December 12, 1950, and the I.C.C. issued its order directing the New Haven to establish the fares above described on or before February 1, 1951. This action instituted December 22, 1950, followed.

 There seems to be no dispute between the parties as to the power afforded the I.C.C. by the statute to fix interstate rates to remove discriminations against persons or localities and discriminations against interstate commerce, provided that either or both such discriminations are found to exist as a fact; such findings having a basis in substantial evidence. The question here resolves itself to a determination as to whether or not the I.C.C. made the requisite clear findings of fact to support the order, and whether such findings have a substantial basis in the evidence.

 We pass logically to a consideration of the general principles afforded by the statutes and judicial precedents which serve as a guide to our determination. The parties are not in conflict as to such principles, but as is usual in this type of case, it is their application to the particular facts of the case which is the real crux of the controversy. Only brief reference then will be made thereto.

 As stated above, the authority of the I.C.C. is based upon the provisions of the Interstate Commerce Act, Sec. 13(3) and (4), 49 U.S.C.A. § 13(3) and (4). Such authority resulting as here in the nullification of the rates prescribed by the P.S.C. must be based upon ' * * * clear findings, supported by evidence, of each element essential to the exercise of the power by the Commission.' State of North Carolina v. U.S., 325 U.S. 507, 65 S. Ct. 1260, 1263, 89 L. Ed. 1760. That this Court will not weigh the evidence and that its function is limited is consistently recognized. State of Florida v. U.S., 292 U.S.at page 12, 54 S. Ct. 603, 78 L. Ed. 1u77. The Court's judgment is not to substituted for that of the Commission.

 The discrimination found here against the Connecticut residents involves the relation of the interstate and intrastate rates to each other. The discrimination found against interstate commerce involves the relation of rates to income. State of Florida v. U.S., 282 U.S. 194 at page 214, 51 S. Ct. 119, 75 L. Ed. 291. Under either or both findings the I.C.C. must determine that the interstate rates are reasonable. Georgia Public Service Comm. v. U.S., 283 U.S. 765 at page 770, 51 S. Ct. 619, 75 L. Ed. 1397. The same case, however, is authority also for the holding that rates found to be reasonable need to be reconsidered in the absence of a showing of a change of conditions.

 With the above facts and principles in mind an approach is made to an analysis of the contentions of the litigants and a legal appraisal thereof in the light of the facts disclosed in the record.

 The attacks made upon the Commission's findings come substantially to these points: a general contention of vagueness and lack of specific content in the findings as a whole; an attack upon the finding of similarity of the service rendered the New York and Connecticut commuters; and an attack upon three specific details relating to revenue and expense, viz.: the charge made for the Harlem tolls expense payable by the New Haven to the New York Central; the failure of the New Haven to allocate as revenue the receipts of ...


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