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October 19, 1967

UNITED STATES of America and Interstate Commerce Commission, Defendants. The Delaware and Hudson Railroad Corporation, Chicago & Eastern Illinois Railroad Company, Milton J. Shapp, City of Scranton, Borough of Freedom, and Boston and Maine R.R. Co., Intervening Plaintiffs, Pennsylvania Railroad Company, New York Central Railroad Company, and Richard Joyce Smith and William J. Kirk, as Trustees for the New York, New Haven & Hartford Railroad Company, Debtor,Intervening Defendants. The BALTIMORE AND OHIO RAILROAD COMPANY, the Chesapeake and Ohio Railway Company, and Norfolk and Western Railway Company, Plaintiffs, v. UNITED STATES of America, Defendant. The CENTRAL RAILROAD COMPANY OF NEW JERSEY and Reading Company, Plaintiffs, v. UNITED STATES of America, Defendant. Western Maryland Railway Company, Intervening Plaintiff. OSCAR GRUSS & SON, Plaintiff, v. UNITED STATES of America and Interstate Commerce Commission, Defendants. The New York, New Haven and Hartford Railroad Company First Mortgage 4% Bondholders Committee, Intervening Plaintiff, The New York Central Railroad Company, the Pennsylvania Railroad Company, and Richard Joyce Smith and William J. Kirk, as Trustees for the New York, New Haven & Hartford Railroad Company, Debtor,Intervening Defendants. The DELAWARE AND HUDSON RAILROAD CORPORATION, and Norfolk and Western Railway Company, Plaintiffs, v. UNITED STATES of America, Defendant. Boston and Maine Corporation, John Hancock Mutual Life Insurance Company, the Prudential Insurance Company of America, Aid Association for Lutherans, and Woodmen of the World Life Insurance Society, Intervening Plaintiffs, Interstate Commerce Commission, Erie-Lackawanna Railroad Company, Intervening Defendants

The opinion of the court was delivered by: FRIENDLY

We have before us, on final hearing, actions to enjoin the enforcement of orders of the Interstate Commerce Commission in F.D. 21989 and 21990, see 327 I.C.C. 475, 328 I.C.C. 304, and 330 I.C.C. 328, authorizing the merger of Pennsylvania Railroad Company (PRR) and New York Central Railroad Company (NYC) into a single company (Penn-Central), and in F.D. 21510, see 330 I.C.C. 780 and 331 I.C.C. 22, directing the Norfolk & Western Railway System (N & W) to include Erie-Lackawanna Railroad Company (E-L), The Delaware & Hudson Railroad Corporation (D & H) and the Boston & Maine Corporation (B & M) on terms therein specified. The orders come before us as a result of three separate actions or sets of them. The first set, sometimes hereafter referred to as the merger actions, consists of three suits, 66 Civ. 2860, 2903 and 2914, D.C., attacking the orders in F.D. 21989 and 21990. *fn1" A year ago we denied temporary injunctions in these suits, Judge Weinfeld dissenting on the ground that the Commission had not finalized the 'Appendix G conditions' for the protection of E-L, D & H and B & M, 259 F.Supp. 964 (S.D.N.Y.1966), and were subsequently reversed by a closely divided Supreme Court, 386 U.S. 372, 87 S. Ct. 1100, 18 L. Ed. 2d 159 (1967). In a supplemental report, served June 12, 1967, the Commission revised and completed the Appendix G conditions; on September 11, 1967, the Commission denied petitions for further reconsideration but on August 3 and September 12 it modified its order with respect to the New York, New Haven & Hartford Railroad Company (NH) in certain respects discussed below. The second action, sometimes hereafter referred to as the New Haven action, 66 Civ. 3413, addressed to orders in the same docket, was brought by Oscar Gruss & Son, a large holder of the New Haven's First and Refunding Mortgage Bonds, and a committee representing other holders of such bonds intervened. We dismissed the complaint, as well as a separate action by the committee, 66 Civ. 3425, primarily for lack of standing, Oscar Gruss & Son v. United States, D.C., 261 F.Supp. 386 (S.D.N.Y.1966), but the Supreme Court vacated our order on Gruss' appeal, 386 U.S. 776, 87 S. Ct. 1478, 18 L. Ed. 2d 520 (1967), and remanded for further consideration. The third action, 67 Civ. 2451, Delaware and Hudson R.R. Co. v. United States, sometimes hereafter referred to as the inclusion action, was brought by D. & H. to review the order in F.D. 21510 as this affected it; *fn2" B & M and four life insurance companies holding large amounts of E-L's bonds intervened as plaintiffs and, on motion of the United States and the Interstate Commerce Commission, we directed that N & W be joined as a plaintiff. E-L intervened as a defendant and all four roads affected by the inclusion order are thus parties. Because of the close relation among all three actions, we think it best to dispose of them in a single opinion despite the length which the number of issues necessarily entails.

We shall not here detail the procedural history whereby the threat that these related orders would become the subject of litigation in six or more different district courts has seemingly been averted and all issues concentrated in a single court of first instance. This can be found in our orders of July 3, and July 26, 1967, the orders of the District Court for the Middle District of Pennsylvania dated July 11 and 27, 1967, and the orders of the District Court for the Western District of Virginia dated July 14 and September 11, 1967. Suffice it to say at this point that in our view the proceedings reflect credit on the sober second thought of most counsel and, even more so, on the restraint of the 'disciplined and experienced judges,' see Kerotest Mfg. Co. v. C-O-Two Fire Equipment Co., 342 U.S. 180, 184, 72 S. Ct. 219, 96 L. Ed. 200 (1952), of the Third and Fourth Circuits, who have demonstrated that even the long out-moded machinery for review of orders of the Interstate Commerce Commission by suit before a three-judge district court can be made to work, although with creaks and strains that ought to be eliminated.

We have said 'seemingly averted' because N & W continues to challenge the power of this court to entertain the inclusion action or at least to join it as a plaintiff. Relying on a passage in our order granting the motion for joinder, wherein we said that this 'shall not prejudice any contention the N & W may wish to make in any court that the Western District of Virginia is the appropriate forum for review of the inclusion order,' N & W seeks to reargue the venue issue we there decided against it. Mere reading of the passage shows that it was not intended to give N & W permission to reargue after the normal time for seeking this had passed; we wished only to make clear that the joinder of N & W in the action in this district relating to the inclusion order should not preclude argument that, assuming that either this court or the Virginia court could lawfully proceed, the ends of justice would be better served by having the inclusion order reviewed by the latter. N & W now scarcely argues that point whose lack of merit this opinion will make abundantly clear, and the orders of the Virginia court indicate its agreement that the merger and inclusion actions are so intertwined that they should be initially reviewed by the same court. Nevertheless, because of the importance of avoiding any procedural defect in these proceedings, we have reconsidered N & W's arguments.

 We may accept arguendo, without however deciding, that, as N & W urges, D & H does not have its 'residence or principal office' here within the meaning of 28 U.S.C. § 1398(a) since its complaint fixes its principal place of business in Albany in the Northern District of New York, although it is a New York corporation and does business in the Southern District. *fn3" Concededly none of the intervening plaintiffs has its residence or principal office here. Nevertheless, since 28 U.S.C. § 1398(a) goes to venue and not to jurisdiction, joinder is authorized by the first sentence of amended Rule 19(a). Whereas former Rule 19(b) permitted compulsory joinder only of parties 'subject to the jurisdiction of the court as to both service of process and venue,' the new Rule 19(a) allows joinder of 'a person who is subject to service of process and whose joinder will not deprive the court of jurisdiction over the subject matter of the action' subject to his entitlement to dismissal when his joinder 'would render the venue of the action improper.' The amendment, which has been characterized as 'a restructuring of major proportions,' see 2 Barron & Holtzoff, Federal Practice & Procedure § 511 (1966 pocket part), could hardly have a more suitable application than when one party (N & W) claims an order of the Interstate Commerce Commission to be too favorable to all the others, one of the latter contends it is not sufficiently so, and still others say it is just right. There remains the contention based on the last sentence of the Rule. *fn4" The letter of this does not cover N & W. If venue were ever improper, it was because D & H has its principal office in Albany rather than in New York City, and that defect, if it were one, see fn. 3, was waived by the United States. Adding N & W as a party plaintiff did not make the alleged defect more serious -- its joinder did not 'render the venue of the action improper' within the language of the Rule.

 We see no reason for expanding on the letter under the circumstances of this case. The last sentence of Rule 19(a) seems to have been framed in the light of the then requirement that in diversity actions all plaintiffs or all defendants reside in the district, and the requirement that in all other cases, save as otherwise provided, all defendants so reside, 28 U.S.C. §§ 1391(a) and (b). Evidently it was thought anomalous and perhaps contrary to the will of Congress as expressed in those sections that compulsory joinder should lie when the party joined could not initially have joined as a plaintiff or been joined as a defendant without provoking a valid venue objection. But there is nothing anomalous or contrary to the intent of 28 U.S.C. § 1398(a) in joining N & W in the instant case. N & W's presence as an additional plaintiff does not give rise to a new venue objection as it would under a provision like that in 28 U.S.C. § 1391(a) requiring that all plaintiffs reside in the district. Indeed the typical action by railroads to enjoin important orders of the Interstate Commerce Commission includes plaintiffs residing or having their principal office in many states, as witness the plethora of multi-plaintiff actions bearing the names of the Abilene & Southern, the Akron, Canton & Youngstown and the Ann Arbor. *fn5" Both the present statute and its predecessor, 38 Stat. 219-220 (1913), recognized that in such matters the presence of one plaintiff for whom venue was proper suffices for all and process may then be served throughout the United States, 28 U.S.C. § 2321. If one railroad has chosen to sue in a venue to which objection could have been taken but the United States as sole named defendant does not object, no policy is served by allowing another railroad complaining of the order to do so. See Hoiness v. United States, 335 U.S. 297, 69 S. Ct. 70, 93 L. Ed. 16 (1948). This court having been seized of the action, it is immaterial that, as a result of the Commission's decisions on reconsideration, 331 I.C.C. 22, D & H no longer complains of the inclusion order; the action continues for disposition of the complaints of the intervening plaintiffs and of N & W.


 The only parties who have ever challenged in this court the Commission's basic finding that the Penn-Central merger is in the public interest were intervening plaintiffs Milton J. Shapp, the City of Scranton and the Borough of Freedom. After the Commission had entered its supplemental order served June 12, 1967, the Borough of Moosic brought an action in the District Court for the Middle District of Pennsylvania to enjoin the merger. Shapp and the City of Scranton intervened therein and the City of Pottsville applied for intervention; we are advised that the Borough of Moosic was represented by the same attorneys who appeared here for Shapp and the City of Scranton and that the complaint was substantially the same as that heretofore presented in this court. On July 11, the District Court for the Middle District of Pennsylvania stayed proceedings before it until October 1. Shapp and the City of Scranton moved to stay proceedings on their intervening complaints here or, in the alternative, to permit their dismissal without prejudice. In our order of July 26, 1967, we denied these motions but extended the time fixed for these intervenors to file a supplemental complaint; we also stated that we would permit the Borough of Moosic and the City of Pottsville to intervene. They did not accept the invitation, and Shapp and the City of Scranton failed to file supplemental complaints or further briefs as directed by our orders. The United States and the Interstate Commerce Commission have moved pursuant to F.R.Civ.P. 41(b) that we dismiss the complaints of Shapp and the City of Scranton with prejudice for want of prosecution; PRR and NYC join in the motion. For reasons indicated in our previous orders we are wholly unpersuaded by the intervenors' contentions that their applications here were of limited scope and they should now be free to withdraw and challenge the merger orders in another court of their own choosing. Their case therefore falls within the ordinary rule that the claim of a litigant who refuses to file an amended or supplemental complaint or to comply with other lawful procedural orders of the court will be dismissed with prejudice. We therefore grant the motion for such dismissal. *fn6"

 Chicago & Eastern Illinois Railroad Company has moved for dismissal of its intervening complaint with prejudice and we have granted that motion. We have also granted the unopposed motion of PRR and NYC for dismissal with prejudice of the intervening complaints of the parties listed in the margin *fn7" who have failed to file supplemental complaints or briefs as directed by our order of July 3.

 The posture of the actions has changed in several other respects. The Trustees of CNJ, which has invoked § 77 of the Bankruptcy Act since the case was previously here, sought and were granted dispensation from the schedule for supplemental complaints, briefs and argument on their stipulation that, while reserving the right to assert that the order of the Commission should contain protective conditions for the benefit of CNJ, 'they will not assert in any Court any claim that the Penn-Central merger should be delayed for any reason' or that the Appendix G conditions in favor of other carriers should be set aside. B & M has changed its position from opposition to support of immediate consummation of the Penn-Central merger. Finally, E-L and D & H now make no objection to the revised Appendix G conditions; they seek a further injunction only because the Commission failed to reserve jurisdiction to require Penn-Central to pay a capital loss indemnity and because it has authorized immediate consummation of the merger without completion of judicial review.

 The Appendix G Conditions.

 While the three protected roads make no objection to the Appendix G traffic and current indemnity conditions, these continue to be the object of sharp criticism from N & W and the three roads, C & O, B & O and Western Maryland, making common cause with it. The specific claims are that the revenue indemnity conditions create a pooling agreement in defiance of § 5(1) of the Interstate Commerce Act; that they will unwarrantably injure the unprotected roads; and that there is no substantial evidence of the merger's being in the public interest so long as the Appendix G conditions remain in effect. We find these contentions without merit.

 Section 5(1) makes it unlawful for any common carrier subject to chapters 1, 8 and 12 of the Interstate Commerce Act to 'enter into any contract, agreement, or combination 'among carriers' for the pooling or division of traffic, or of service, or of gross or net earnings, or of any portion thereof' unless the Commission finds that such pooling or division 'will be in the interest of better service to the public or of economy in operation, and will not unduly restrain competition.' In its report on reconsideration of September 16, 1966, the Commission held that the Appendix G conditions were not within § 5(1) since they did not constitute a contract, agreement or combination entered into by the carriers involved and, less forcefully, that in any event § 5(2)(b) authorized it to approve a merger on such terms and conditions as it found 'just and reasonable' even if these would otherwise violate some other prohibition of the Act, 328 I.C.C. at 326. *fn8" In a footnote to its supplemental report the Commission reiterated the former position but added that even if the revenue indemnification 'constituted pooling within the meaning of section § 5(1), this record clearly supports findings as required by that subsection, i.e., that to protect these carriers clearly is in the interest of better service to the public' and 'will not unduly restrain competition.' 330 I.C.C. at 345 n. 8.

 We agree that financial indemnification to weaker railroads prescribed by a governmental agency as a condition to approval of a merger is not within the fair intendment of § 5(1) even though indemnification becomes effective only by the indemnitor's accepting the provisions as a condition to consummating the merger. While the construction urged by plaintiffs would, to say the least, be pressing language to its utmost bounds, we need not decide whether this reading would fall within or without the limit to which the words can be pushed. 'This is not the way to read such legislation. It is true also of Acts of Congress that 'The letter killeth." United States ex rel. Knauff v. Shaughnessy, 338 U.S. 537, 548, 70 S. Ct. 309, 315, 94 L. Ed. 317 (1950) (dissenting opinion of Mr. Justice Frankfurter). Section 5(1) of the Interstate Commerce Act has been with us for a long time. Its lineage goes back to the original Act of 1887, § 5 of which made it unlawful for any common carrier subject to the Act 'to enter into any contract, agreement, or combination with any other common carrier or carriers for the pooling of freights of different and competing railroads, or to divide between them the aggregate or net proceeds of such railroads, or any portion thereof * * *,' 24 Stat. 380, and the evil at which it is aimed remains the same. 'The mischief and defect for which the common law did not provide,' Heydon's Case, 3 Co. 72 (1584), consisted in truly consensual arrangements between carriers giving each an incentive to raise rates to the highest point and reduce service to the lowest point the traffic would bear. The framers of § 5 were acting against cartels; their words cannot fairly be used to invalidate a provision developed by the Commission, which then had no power to do so, to compel a stronger road to pay a portion of its revenues to weaker ones in order to enable the latter better to compete. *fn9"

 The contention that the financial indemnity will injure N & W and other unprotected carriers rests on the theory, described in our previous opinion, 259 F.Supp. at 970, that the indemnity formula gives the protected carriers an abnormal incentive to throw interline traffic to Penn-Central rather than to the unprotected lines in order to increase the 'standard revenue' of the protected carriers for a future year, and Penn-Central an abnormal incentive to throw such traffic to the protected carriers rather than to others in order to increase the formers' 'earned revenue.' After taking much evidence and engaging in extensive discussion, 330 I.C.C. at 353-56, the Commission found the contention unproved. While the studies submitted by the unprotected roads showed considerable amounts of traffic susceptible to diversion of the sort indicated, the Commission found that neither the protected roads nor Penn-Central would have either the motive or the ability to engage in such diversion on any substantial scale. The Commission nevertheless included in its findings 'a provision that would prohibit the protected carriers from engaging in manipulation, with sanctions if they do' and reserved jurisdiction to reopen the proceedings in the event of such manipulation and modify Appendix G accordingly, 330 I.C.C. at 355.

 Forecasting the future ability and desire of railroads to effect diversion is peculiarly a matter for the expert judgment of the 'tribunal appointed by law and informed by experience.' Illinois Central R.R. v. I.C.C., 206 U.S. 441, 454, 27 S. Ct. 700, 704, 51 L. Ed. 1128 (1907). Almost all N & W's contentions of this subject simply reflect disagreement with conclusions which the evidence warranted the Commission in reaching and are thus beyond our power to review. There is only one possible exception. While the Commission found that the protected roads had no power to divert traffic in the interim covered by Appendix G, it held in the Inclusion case that the roads could divert traffic to N & W after their inclusion. N & W claims that the two findings contradict one another. The claim is readily answered. Once integrated into N & W, the protected roads will be able to offer shippers more efficient service. Under present conditions, however, shippers will gain little or nothing by permitting the protected roads to divert their traffic to Penn-Central. The position of these three lines as a permanent part of a strong N & W system will be altogether different from their present status. Moreover we see no reason to doubt the efficacy of the Commission's reservation of jurisdiction to take action against manipulation. *fn10"

 We are similarly unpersuaded by N & W's contention that the Commission did not find, or in any event had no evidentiary basis for finding, that consummation of the merger under the Appendix G conditions would be in the public interest. Such a finding is implicit in the very concept of devising conditions permitting consummation prior to actual inclusion of the protected roads in a major system and was made explicit when the Commission said that only 'some of the merger benefits' would be prevented and that the conditions would not work 'an undue hardship upon applicants either in their operations or merger implementation.' 327 I.C.C. at 532; see also 330 I.C.C. at 361. To deny evidentiary basis for this finding would defy common sense. An end to the uncertainty that has plagued the applicant roads for five and a half years would be enough. Nothing in Appendix G prevents the realignment of management, the elimination of many duplications in personnel, the undertaking of financing, or the refurbishing and, in many cases, the implementation of plans for better and more economical service. The Appendix G conditions impose no restrictions on activities concerning routes not competitive with the three protected lines; there are enough of these to absorb the energies of Penn-Central's management for some time. Beyond all these considerations early consummation of the merger not only will benefit the New Haven but is necessary to its survival. For, as will appear later, that road's condition has become far graver than when this case was last before us or the Supreme Court.

 Capital Loss Indemnity.

 E-L, D & H, and N & W and its allies complain of the Commission's refusal, 330 I.C.C. at 359-60, to prescribe 'capital loss indemnification' for any decrease in the price payable to the protected roads due to diversion of traffic to Penn-Central, whether before or after inclusion in a larger system, or even to reserve jurisdiction to do so. The Commission justified this on the basis that under its decision in the Inclusion case there would be no such decrease, 330 I.C.C. at 360. While E-L and D & H endorse that conclusion, they nevertheless claim that the failure to reserve jurisdiction on the capital loss issue was error. They fear that if N & W's objections to the inclusion provisions should be sustained either here or ultimately by the Supreme Court, it may be impossible for the Commission to devise equitable terms for their inclusion in N & W without Penn-Central paying a capital indemnity. Since E-L and D & H assert they cannot fairly be asked to accept a reduction in the sales price as a result of losses inflicted by the merged Penn-Central and N & W says it cannot be asked to pay more than the roads are worth in light of the Penn-Central merger, Penn-Central, it is contended, must be required to pay for the loss it has caused the protected roads and the Commission should have reserved jurisdiction to that end so that the legality of such a position could be determined before the merger was consummated.

 So far as the fears of E-L and D & H relate to action by this court, they are mooted by our decision in the Inclusion case. For reasons stated in section IV of this opinion we doubt that any decision of the Supreme Court will demand downward revision of the terms. Moreover, we are not at all sure, for reasons developed in our discussion of the Inclusion case, that the Court or the Commission on a remand would subscribe to the view that N & W can only be required to pay a sum which takes account of post-Penn-Central-merger losses, or -- for that matter -- would accept the view of E-L and D & H that the Interstate Commerce Act requires them to be compensated for any decrease in price resulting from such losses. On the other hand we have little doubt that if PRR and NYC elect to consummate the merger before a final disposition by the Supreme Court, they take their chances as to any further conditions with respect to capital loss indemnity that the Court might direct the Commission to impose. While we would not have disapproved the reservation of jurisdiction which E-L and D & H advocate, we shall not direct the Commission to amend its order as they request.

 N & W claims that a capital indemnity is needed even if, as it disputes, the Commission's finding that post-inclusion losses do not require a lower price should be affirmed. It says that while the appendix G conditions may make the three roads substantially whole for traffic diverted to Penn-Central during the protected period, traffic once diverted to so powerful a competitor is not readily regained. The roads will therefore be worth less to N & W at the time of inclusion than if inclusion could be effected simultaneously with Penn-Central consummation, and Penn-Central must be required to pay the difference. Apart from our unwillingness to commit ourselves to the legal premise on which this argument necessarily rests, N & W's fears are factually unsupported.

 There is no support for N & W's contention that despite the highly restrictive Appendix G traffic conditions, which, as we said a year ago, 'go far beyond anything in previous history,' 259 F.Supp. at 976-977 and see n. 10, Penn-Central will be able to divert a significant amount of traffic during the interim period. The figure of $ 16,300,000 in revenues, which the Commission estimated Penn-Central might divert from these roads after their inclusion in N & W, when it is no longer shackled by Appendix G, obviously is totally unrelated to what it can divert under the Appendix G traffic conditions. Indeed the contention is in sharp contrast to N & W's claim, discussed above, that these conditions so restrict Penn-Central as to strip the merger of all public interest sl long as they exist. There is also the impressive testimony, recounted in our previous opinion, 259 F.Supp. at 977-978, that even apart from the protective conditions, some time would elapse before diversionary effects on the protected roads would occur. This is of particular importance if, as now seems likely, the protected period will be short.

 We also find no force in N & W's final argument that the order in the merger case was defective because it did not affirmatively find that the only proper home for the three roads is in N & W or N & W-C & O-B & O and not in Penn-Central, but provided instead that the roads might seek inclusion in Penn-Central in certain contingencies. While the Commission's decision in the Inclusion case made clear where it thought the proper home to be, 330 I.C.C. at 796, we see no reason why it was bound absolutely to exclude Penn-Central as an alternative, particularly in light of the then existing possibility that refusal of the stockholders of E-L to accept the inclusion terms would prevent inclusion of D & H or B & M in N & W, and the still existing although unlikely one that refusal by D & H's stockholders would prevent inclusion of B & M. N & W is fully protected by its right to oppose inclusion of any of the three roads in Penn-Central.

 Complaint of the Reading.

 The merger case presents only one more issue that requires discussion, other than that relating to the authorization of immediate consummation which we reserve for the final section of this opinion. Reading complains that it was not allowed to show the injuries it would suffer from the Penn-Central merger as such. It claims that these would be so extensive as to entitle it to protective conditions similar to those provided in Appendix G for E-L, D & H and B & M, and seeks a remand to that end.

 Reading has long been regarded as a 'family line' of the B & O, affording along with CNJ that system's access to the metropolitan New York area. Some 38% Of its stock is owned by B & O and another 10% Is held by Otis & Co. subject to a first refusal by C & O. Five of its eleven directors are B & O nominees, and three other 'public' directors were on the management slate. Several of its officers are former B & O employees whose salary continues to be paid by B & O to maintain their pension rights (although B & O is reimbursed by Reading) or hold office jointly in the two roads.

 Reading intervened before the Commission in the merger proceeding in August 1962. In April 1963 it advised the Commission that it would not oppose the merger if the Commission would impose standard routing and gateway conditions and PRR was required to divest its holdings in N & W. It introduced no evidence of possible diversion. However, in response to an inquiry from the Commonwealth of Pennsylvania which was conducting an investigation of the effect of the merger on railroads serving the state, the President of the Reading wrote a letter that was subsequently received in evidence. This stated that in 1961 Reading handled a total of 1,116,000 carloads; that 122,000 carloads were interchanged with NYC at Newberry Junction and another 10,000 cars were handled with NYC via an intermediate carrier; that the Reading thought it 'possible that as much as 25% Of the shipments thus interchanged would be diverted'; *fn11" and that the study did not include traffic interchanged with PRR since 'the Pennsylvania would now be handling it if this were physically feasible.' The Examiners found that 'the net effect (of the merger) will not be detrimental' to Reading or to its 'ability to provide a general transportation service to the public' and the Commission adopted these findings in its initial report, 327 I.C.C. at 481-82.

 After the Commission had issued its Report, Reading sought reconsideration arguing that the finding was inconsistent with another statement of the Examiners that in view of the paucity of evidence they had 'no way of assessing the overall implications of the proposed merger' upon Reading; it requested a further hearing to show the adverse effect of the merger in general and also of the Appendix G conditions. The Commission reworded its finding to read that 'it has not been shown of record' that the merger would be detrimental to Reading or its 'ability to provide a general transportation service to the public,' and gave Reading leave to participate in the further hearing as to the effect of the Appendix G conditions, but denied the request to reopen the record to show general adverse effect of the merger. At the further hearing, the Examiners received a Reading exhibit seeking to prove that $ 3,500,000 of annual revenue would be subject to diversion because of 'manipulation' of the Appendix G conditions; but the Commission rejected the conclusion for reasons we have earlier sustained. The Examiners excluded another exhibit purporting to show that up to $ 19,900,000 of revenue was subject to diversion as a result of the Penn-Central transaction as such. The Commission affirmed this ruling, holding the Reading to be bound by its 'original concession that the effect of the merger transaction (without the indemnity conditions) * * * would be inconsequential.' 330 I.C.C. at 357.

 We cannot fault the Commission for this ruling. Administrative proceedings, especially of such complexity as this, would never end if parties remained free to take new positions at any time and seek to support them with evidence that had been available all along. See United States v. Northern Pac. Ry., 288 U.S. 490, 494, 53 S. Ct. 406, 77 L. Ed. 914 (1933); Valley Telecasting Co. v. F.C.C., 118 U.S.App.D.C. 410, 336 F.2d 914, 917 (1964). Reading's reliance on Udall v. F.P.C., 387 U.S. 428, 87 S. Ct. 1712, 18 L. Ed. 2d 869 (1967), is misplaced; there the Secretary of the Interior had taken his position from the time the administrative proceeding commenced and submitted his studies as soon as these could be completed. Furthermore, the Secretary of the Interior is an especially important representative of the public -- when he speaks others should try to hear him, especially when he speaks on behalf of fish, who have few other spokesmen. While Reading's assertion that the Commission is more than an umpire has its validity, this does not support the conclusion that the Commission is not warranted in taking a railroad at its word or is obliged to reopen a proceeding whenever management has a second thought. Brotherhood of Maintenance of Way Employees v. United States, 221 F.Supp. 19, 28 (E.D.Mich.), aff'd, 375 U.S. 216, 84 S. Ct. 341, 11 L. Ed. 2d 270 (1963). Moreover, management's initial conclusion that the effect of the merger would be inconsequential was supported by its one letter to the Commonwealth of Pennsylvania which was in evidence and the new evidence sought to be offered was scarcely persuasive. *fn12" If Reading's management thought it could safely remain silent since it would be taken care of by its parents although neglecting the opportunity to bind them afforded by the C & O-B & O acquisition, 317 I.C.C. 261 (1962), *fn13" the Commission was also warranted in thinking so. Indeed it is still exceedingly hard to believe that B & O will see the roads affording it access to the metropolitan New York area disappear, although it naturally with do everything possible to exploit its lack of obligation to include Reading and CNJ in its own system both to minimize their commuter burden and to forward the N. & W-C. & O-B & O merger. If Reading's independent stockholders should ultimately be damaged by action or inaction of management dictated by B & O to further its own interest at the cost of Reading's, they are not without remedy.


 In an opinion reported in Oscar Gruss & Son v. United States, 261 F.Supp. 386 (S.D.N.Y.1966), we dismissed, primarily for lack of standing, the complaints of Oscar Gruss & Son, 66 Civ. 3413, and The New York New Haven and Hartford Railroad Company First Mortgage 4% Bondholders' Committee, 66 Civ. 3425, to enjoin consummation of the Penn-Central merger until the properties of NH were included therein. Gruss appealed to the Supreme Court but the Committee did not. After reversing our denial of a temporary injunction of the merger in the suits brought by other railroads to that end, Baltimore & Ohio R.R. v. United States, 386 U.S. 372, 87 S. Ct. 1100, 18 L. Ed. 2d 159 (1967), the Supreme Court entered an order on Gruss' appeal providing in relevant part as follows:

 'Since the order which appellant's suit attacked is now subject to further consideration by the Commission and since proceedings to achieve inclusion of the New Haven are also under way before the Commission, it appears inappropriate to review the decision of the District Court at this time. Rather, we vacate the order of the District Court and remand the case to that court. Should appellant still be dissatisfied with the ultimate order of the Commission in the merger proceedings, if may attempt a fresh challenge in the District Court.' 386 U.S. 776, 777, 87 S. Ct. 1478 (1967).

 After the Commission had rendered its Supplemental Report of June 12, 1967, we gave leave for the filing of supplemental complaints in the Gruss action; these repeated the prayers of the original complaint that consummation of the Penn-Central merger be enjoined pending inclusion of NH. The United States, the Interstate Commerce Commission, the Trustees of NH and PRR and NYC move for dismissal both for lack of standing *fn14" and on the merits.

 While some progress has been made in the direction of inclusion of NH in Penn-Central by sale of its assets, the day of such inclusion is at best some time off. Commission hearings in the inclusion proceeding under § 5(2) of the Interstate Commerce Act have been concluded and the case stands submitted but no report has yet been rendered. As a result of adverse intimations by the Court of Appeals for this Circuit in Matter of New York, New Haven and Hartford Railroad Co. (Chase Manhattan Bank v. Smith) 378 F.2d 635, 638-640 (1967), the NH Trustees have abandoned their proposal to attempt to effect inclusion as a first step in a two-step plan of reorganization under § 77 of the Bankruptcy Act and have proposed a full plan, including provisions for distribution among creditors, which will require approval by the Commission and the reorganization court, submission to creditors, and either approval by them or a determination by the court to utilize the 'cram-down' provisions of § 77(e), before inclusion can occur. Beyond all these sources of uncertainty and delay is the possibility, adverted to by the Court of Appeals, 378 F.2d at 639, that lack of action by NH stockholders, who have long since ceased to have any economic interest in the property, might ...

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