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DELAWARE & HUDSON RY. CO. v. CONRAIL

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF NEW YORK


March 22, 1983

DELAWARE AND HUDSON RAILWAY COMPANY, Plaintiff,
v.
CONSOLIDATED RAIL CORPORATION, Defendant

Miner, District Judge.

The opinion of the court was delivered by: MINER

MEMORANDUM -- DECISION and ORDER

MINER, District Judge.

 I

 In a Memorandum-Decision and Order dated December 11, 1981, this Court denied plaintiff's application for a preliminary injunction to direct the defendant, Consolidated Rail Corporation, to concur in a contracted joint rate applicable to the interline transportation of freight, specifically newsprint, over the rail lines of Canadian National Railways, Conrail and the plaintiff, Delaware and Hudson Railway Company. Injunctive relief specifically was denied, since the Court held that the ICC has "primary jurisdiction" over the issue of whether the rate-fixing agreement conflicts with the market force-free enterprise policy set by the Staggers Act. Delaware & Hudson Ry. Co. v. Consolidated Rail Corp., 533 F. Supp. 692 (N.D.N.Y.1981). Before this Court is defendant's motion to dismiss for lack of subject matter jurisdiction, Fed.R.Civ.P. 12(b)(1), predicated on the December 11, 1981 Memorandum-Decision and Order.

 II

 D & H argues that the doctrine of primary jurisdiction does not apply, since the agreement here is clear and the complaint is based on common law contract principles. Therefore, D & H contends, there is no reason to refer questions to the ICC, and, moreover, the ICC does not possess jurisdiction to abrogate agreements such as this one under the Staggers Act. D & H misses the point.

 The doctrine of primary jurisdiction "is concerned with promoting the proper relationship between the courts and administrative agencies charged with particular regulatory duties." United States v. Western Pacific, 352 U.S. 59, 63, 77 S. Ct. 161, 165, 1 L. Ed. 2d 126 (1956). Even when "common-law rights and remedies survive and the agency in question lacks the power to confer immunity from common-law liability, it may be appropriate to refer specific issues to an agency for initial determination where that procedure would secure 'uniformity and consistency in the regulation of business entrusted to a particular agency.'" Nader v. Allegheny Airlines, 426 U.S. 290, 303-304, 96 S. Ct. 1978, 1986-1987, 48 L. Ed. 2d 643 (1976), quoting Far East Conference v. United States, 342 U.S. 570 at 574-575, 72 S. Ct. 492 at 494, 96 L. Ed. 576.

 The doctrine has been applied, for example, "when an action otherwise within the jurisdiction of the court raises a question of the validity of a rate or practice included in a tariff filed with an agency . . . ." Id. 426 U.S. at 304, 96 S. Ct. at 1987, citing Southwestern Sugar & Molasses Co. v. River Terminals Corp., 360 U.S. 411, 417-418, 79 S. Ct. 1210, 1214-1215, 3 L. Ed. 2d 1334 (1959) and Danna v. Air France, 463 F.2d 407 (2d Cir. 1972). Similarly, the Supreme Court has held that the authority to determine when and whether any particular rate should be implemented is a matter which was placed squarely in the hands of the ICC. Consolidated Rail Corp. v. National Association of Recycling Industries, Inc., 449 U.S. 609, 101 S. Ct. 775, 66 L. Ed. 2d 776 (1981). *fn1"

 Here, while this Court may have jurisdiction over the common law contract claim, the relief sought by the complaint nevertheless involves, and seems to contravene, certain provisions of the Interstate Commerce Act, and certain ICC regulations and policies that deal with rates and rate relationships between carriers, all matters that require ICC consideration and determination. See Delaware & Hudson Ry. Co. v. Consolidated Rail Corp., supra, 533 F. Supp. at 695-97 and notes 15 and 16.

 In other words, the agreement does not involve a simple commercial transaction between two carriers. On the contrary, it requires ICC's consideration of the following issues raised by the complaint:

 (1) Whether the rate fixing agreement between the carriers conflicts with the market force-free enterprise policy set by the Staggers Act; *fn2"

 (2) Whether Conrail's failure to concur in the reduced rate via the D & H's route constituted a "commercial closing" under ICC decisions;

 (3) Whether the commercial closing doctrine and an agreement providing for rate equalization over competing routes are consistent with present ICC policy and decisional law, particularly in light of recent amendments to the Interstate Commerce Act and ICC policy implementing those provisions;

 (4) Whether the agreement conflicts with 49 U.S.C. § 10705(a), which allows a carrier to apply a surcharge increasing or decreasing the through charge without the concurrence of other parties to the joint rate;

 (5) Whether Conrail should have applied initially to the Commission to cancel joint rates on through routes under 49 U.S.C. § 10705a(c); and

 (6) Whether the agreement and §§ 10705 and 10762 conflict. See Delaware & Hudson Ry. Co. v. Consolidated Rail Corp., supra, 533 F. Supp. at 696-697. These issues must be resolved before this Court can grant plaintiff any relief.

 III

 Accordingly, the instant proceeding is stayed pending resolution of the aforementioned questions and issues by the ICC, United States v. Western Pacific Railroad Co., 352 U.S. 59, 77 S. Ct. 161, 1 L. Ed. 2d 126 (1956); United States v. United States Steel Corp., 645 F.2d 1285 (8th Cir.1981), via either a complaint proceeding or appropriate petition invoking Commission jurisdiction. Defendant's motion is denied.

 It is so Ordered.


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