An order of the Interstate Commerce Commission, made upon
petition of two railroad companies, permitting the one to acquire
control of the other by stock ownership and leases, with the object
of coordinating and improving their operation in connection with
another railroad system, is an order relating to transportation
within the meaning of the Act of October 22, 1913, and therefore a
suit to set the order aside cannot be brought in a district where
neither of the petitioning companies resides. P.
271 U. S.
459.
2 F.2d 765 affirmed.
Appeal from a decree of the district court sustaining a plea for
the dismissal of a suit to set aside an order of the Interstate
Commerce Commission upon the ground that it was in the wrong
venue.
Page 271 U. S. 457
MR. JUSTICE McREYNOLDS delivered the opinion of the Court.
Appellants are residents of El Paso, Texas, and there engage in
the business of buying and selling furniture. By a bill presented
to the United States District Court for the Western District of
Texas, they sought annulment of an Interstate Commerce Commission
order which permitted acquisition of control over the Southwestern
System by the Southern Pacific Company.
They alleged:
That the Southern Pacific Company is a corporation under the
laws of Kentucky, which operates railroads in California, Arizona,
New Mexico, and other states.
"That defendant El. Paso & Southwestern Railroad Company is
a corporation incorporated under the laws of the state of Arizona
and is authorized to and does operate railroads in the state of
Arizona, New Mexico, and Texas; that said defendant is engaged in
the transportation of passengers and property in interstate
commerce subject to the Interstate Commerce Act; that defendant is
part of what is known as the El Paso & Southwestern Railway
System, consisting of the following railroad companies,
viz.: The El Paso & Southwestern Railroad Company, the
El Paso & Southwestern Railroad of Texas, the Burro Mountain
Railroad Company, the Arizona & New Mexico Railway Company, the
Dawson Railway
Page 271 U. S. 458
Company, the El Paso & Northeastern Railway Company, the El
Paso & Rock Island Railway Company, the Alamogordo &
Sacramento Mountain Railway Company, the El Paso & Northeastern
Railroad Company, and the Tucson, Phoenix & Tide Water Railway
Company, hereinafter, for convenience sake, referred to as the
Southwestern System; that all of the issued and outstanding capital
stock and a portion of the outstanding bonds of the companies
comprising said System are owned directly or indirectly by the El
Paso & Southwestern Company, a holding corporation of the State
of New Jersey; that, of the railway companies comprising said
system, only the defendant El Paso & Southwestern Railroad
Company is engaged in the transportation of passengers and property
in interstate commerce, which said company, in addition to
operating the lines of railway owned by it, operates under lease
all of the existing railways of the remaining companies comprising
said system."
That the Southern Pacific Company and the El Paso &
Southwestern Railroad Company, on July 1, 1924, petitioned the
Interstate Commerce Commission for an order approving the former's
proposal to acquire control of the Southwestern System by stock
ownership and through leases.
That, on September 30, 1924, the Commission approved the
proposal.
That they will be injured, by the proposed control, through loss
of opportunity to route their goods over either of two competing
systems, and the depreciation of service and increase of rates
which will naturally result from suppression of competition. The
gravamen is that transportation facilities, service, and charges
will be adversely affected by the union of the two systems under
one management.
Appellees denied jurisdiction of the court and asked dismissal
of the bill. They set up, by plea:
Page 271 U. S. 459
"That the venue of the suit upon said alleged cause of action
does not lie in the district court of the United States for the
Western District of Texas, but, on the contrary, said venue lies,
if the suit is maintainable at all, in the District Court of the
United States for the District of Arizona or for the District of
Kentucky, as complainants may elect to file their bill in either of
said districts, for the following reasons, to-wit:"
"Because it affirmatively appears from the fact of complainants'
bill heretofore filed herein that Southern Pacific Company, a
corporation of the State of Kentucky, having its domicile in said
State of Kentucky, and El Paso & Southwestern Railroad Company,
a corporation of the State of Arizona, having its domicile in said
State of Arizona, were the parties upon whose petition the order of
the Interstate Commerce Commission sought to be reviewed and set
aside in this proceeding was made, and because it further appears
from the said bill of complainants that the said order relates to
transportation and was made upon the petition of the parties
aforesaid."
This plea was sustained January 15, 1925 (2 F.2d 765), and the
cause is here by direct appeal. Act Oct. 22, 1913, c. 32, 38 Stat.
208, 220. Decision of the question at issue must turn upon the
proper construction and application of the following provision of
that act (38 Stat. 219, 220):
This plea was sustained January 15, 1925, 2 F.2d 765, and the
cause is here by direct appeal. Act Oct. 22, 1913, c. 32, 38 Stat.
208, 220. Decision of the question at issue must turn upon the
proper construction and application of the following provision of
that Act, pp. 219-220:
"The venue of any suit hereafter brought to enforce, suspend, or
set aside, in whole or in part, any order of the Interstate
Commerce Commission shall be in the judicial district wherein is
the residence of the party or any of the parties upon whose
petition the order was made, except that, where the order does not
relate to transportation or is not made upon the petition of any
party, the venue shall be in the district where the matter
complained of in the petition before the Commission arises, and
except that, where the order does not relate either to
transportation
Page 271 U. S. 460
or to a matter so complained of before the Commission the matter
covered by the order shall be deemed to arise in the district where
one of the petitioners in court has either its principal office of
its principal operating office. In case such transportation relates
to a through shipment, the term 'destination' shall be construed as
meaning final destination of such shipment."
The language of this provision was not happily chosen, but, when
consideration is given to the situation of the complaining parties
here, the gravamen of their bill, and the report of the Commission,
we think it becomes sufficiently clear that its order has direct
relation to transportation within the meaning of the statute.
The Commission found:
"The lines of the Southwestern System are intermediate between
the lines of the Southern Pacific and the lines of the Chicago,
Rock Island & Pacific Railway System, hereinafter called the
Rock Island. The lines of the three systems constitute one of the
principal direct routes between southern California and the
Missouri River and Chicago, and are included in the Southern
Pacific-Rock Island System in the grouping of railroads under the
tentative plan for consolidation of railroad properties promulgated
by us under date of August 3, 1921. Consolidation of Railroad
Properties, 63 I.C.C. 455. Acquisition of control of the
Southwestern System by the Southern Pacific is in harmony with this
plan. It will result in direct physical connection between the
lines of the Southern Pacific and the Rock Island, will assure the
continuance of this route, and will increase its competitive
strength as compared with the routes of the Santa Fe and Union
Pacific. While the lines of the Southern Pacific and Southwestern
System west of El Paso may be said to be parallel, they serve
different communities and industrial sections. The points at which
the two systems meet are important points of interchange
Page 271 U. S. 461
of a large traffic to and from communities served by one, but
not the other. Better coordination and more efficient and
economical operation will follow as to this traffic and as to
transcontinental traffic in connection with the Rock Island, and
relations to the traveling and shipping public and to public
authorities will be simplified and improved."
The challenged order was made upon a petition, and neither party
thereto resides within the Western District of Texas. It related to
transportation. Consequently the court below was without
jurisdiction.
See Skinner & Eddy Corp. v. United
States, 249 U. S. 557,
249 U. S. 563.
Moreover, the bill alleged no probable direct legal injury to
appellants except such as might arise out of changed conditions in
respect of transportation to and from the City of El Paso.
Accordingly, they had no proper cause of complaint unless the order
had definite relation to transportation.
Hines, etc. v. United
States, 263 U. S. 143,
263 U. S.
148.
The decree of the court below must be
Affirmed.