1. An interstate railway, using only electric power, being about
to extend its line, and having been notified by the Interstate
Commerce Commission that, before doing so, it would be expected to
apply for a certificate of public necessity and convenience under §
1, pars. 18-22, of the Interstate Commerce Act, made formal
application accordingly, but therein moved that its application be
dismissed for want of jurisdiction upon the ground that the railway
was an interurban electric railway, exempted by par. 22 from the
requirement of such a certificate. The Commission assumed
jurisdiction and denied the application on its merits. In a suit to
set aside the order,
held that, if the Commission had
jurisdiction, its order denying the application, being negative in
substance as well as in form and infringing no right of the
railway, is not subject to judicial review, while, if the
Commission lacked jurisdiction, its order is entirely nugatory, and
presents no new obstacle to the railway from which it may be
relieved by judicial action. P.
280 U.S. 476.
2. A remedy which is in substance a declaratory judgment that
the railway is within the exemption contained in paragraph 22 of
the Act is not within the statutory or the equity jurisdiction of
the federal courts. P.
280 U. S.
477.
3. Where a bill in the district court was dismissed on the
merits when it should have been dismissed for want of jurisdiction,
the decree must be reversed with directions to dismiss for want of
jurisdiction. P.
280 U. S. 478.
30 F.2d 421 reversed.
Appeal from a decree of the district court of three judges
dismissing on the merits a suit to set aside, and to enjoin action
under, an order of the Interstate Commerce Commission.
Page 280 U. S. 473
MR. JUSTICE BRANDEIS delivered the opinion of the Court.
Paragraph 18 of § 1 of the Interstate Commerce Act, as amended
by Transportation Act 1920, February 28, c. 91, § 402, 41 Stat.
456, 477, 478, prohibits any carrier by railroad subject to that
Act from undertaking any extension of its lines or construction of
new lines without first obtaining from the Interstate Commerce
Commission a certificate of public necessity and convenience.
Paragraphs 19 and 20 provide for applications for certificates and
prescribe the procedure and mode of disposal. Paragraph 22 exempts
from the scope of those provisions the construction of industrial
and certain other tracks
"located wholly within one state, or of street, suburban, or
interurban electric railways, which are not operated as a part or
parts of a general steam railroad system of transportation."
The Piedmont & Northern Railway, a carrier by railroad
subject to the Interstate Commerce Act, operates in interstate
commerce about 128 miles of line in North and South Carolina, using
exclusively electric locomotives. It determined to extend its lines
53 miles on one route and 75 miles on another in order to connect
with several steam railroads, and, believing that the above
provisions of that Act were inapplicable, it intended to make the
proposed extensions without securing from the Commission a
certificate of public necessity and convenience. The Commission,
learning informally of the project, advised the railway by letter
that, before it
"constructs any extensions to its line or issues any securities,
it will be expected
Page 280 U. S. 474
to file appropriate applications for authority therefor under §§
1 and 20a. The filing of such applications will, of course, be
without prejudice to your right to assert that the Commission has
no jurisdiction over your property in those respects and to adduce
whatever evidence you may desire to support such contention."
The letter called attention to the following passage in
Texas & Pacific Ry. Co. v. Gulf, Colorado & Santa Fe Ry
Co., 270 U. S. 266,
270 U. S.
272:
"Whenever such an application is made, the Commission may pass
incidentally upon the question whether what is called an extension
is in fact such, for, if it proves to be only an industrial track,
the Commission must decline, on that ground, to issue a
certificate. A carrier desiring to construct new tracks does not,
by making application to the Commission, necessarily admit that
they constitute an extension. It may secure a determination of the
question, without waiving any right, by asserting in the
application that, in its opinion, a certificate is not required,
because the construction involves only an industrial track."
Upon receipt of this letter, the railway filed an application
for a certificate of public necessity and convenience, and it
asserted therein that the proposed extensions were parts of a
single project undertaken prior to the effective date of paragraph
18,
* and that it was
an interurban electric railway within the exemption of paragraph
22. It accordingly moved that its application be dismissed for want
of jurisdiction. The Commission overruled the motion, took
jurisdiction, and entered an order denying the application on its
merits. Proposed Construction of Lines by Piedmont & Northern
Ry. Co., 138
Page 280 U. S. 475
I.C.C. 363. This suit was then brought by the railway against
the United States in the federal court for Western South Carolina
under the Urgent Deficiencies Act, October 22, 1913, c. 32, 38
Stat. 208 219, 220, U.S.C. Tit. 28, § 47, and, as the bill states,
also under "the general equity jurisdiction" of the court. The bill
charges that, if the order is not set aside, the railway "will be
prevented from constructing the new mileage;" and prays for "a
permanent injunction decreeing that the Commission was without
jurisdiction of the application," that the order
"taking jurisdiction of said application and denying the same be
set aside and annulled, and that the Commission be forever enjoined
from taking any action or proceeding against your petitioner under
said order."
The National Association of Railroad and Utility Commissioners
intervened as plaintiff. The Interstate Commerce Commission, the
Southern Railway, and other steam railroads intervened as
defendants. The Commission moved to dismiss the bill for want of
jurisdiction. The court, three judges sitting, denied the motion,
and, the case being submitted on final hearing upon the pleadings
and the record before the Commission, entered a decree dismissing
the bill on the merits., 30 F.2d 421. A direct appeal to this Court
was taken by both plaintiffs under § 238(4) of the Judicial Code,
as amended by the Act of February 13, 1925, c. 229, § 1, 43 Stat.
936, 938, U.S.C. Tit. 28, § 345.
Plaintiffs do not complain of the order's denial of a
certificate of public necessity and convenience. They concede that
no court has the power to compel the Commission to issue such a
certificate, since no railroad subject to the provisions of the Act
has a right to extend its lines. Therefore, the order denying a
certificate, being negative in substance as well as in form,
infringed no right of the railway.
Compare Procter & Gamble
Co. v. United States, 225 U. S. 282;
Lehigh Valley R. Co.
v.
Page 280 U. S. 476
United States, 243 U. S. 412;
United States v. New River Co., 265 U.
S. 533,
265 U. S. 540.
The plaintiffs have also abandoned in this Court their contention
that the proposed extensions are part of a project undertaken prior
to the effective date of paragraph 18. Their sole contention is
that the court below and the Commission erred in not holding that
the railway is an interurban electric railway within the exemption
of paragraph 22. The defendants renew their objections to the
jurisdiction of the court.
We think that the defendants' objection is well taken. There is
no allegation of fact in the bill, and no provision in the statute,
which supports the charge that the order will prevent the railway
from proceeding with the construction of the new mileage. The order
is wholly unlike a decree which dismisses a bill in equity on the
merits when it should have been dismissed for want of jurisdiction.
Such a decree must be set aside because, otherwise, it might be
held to operate as
res judicata. Compare Swift &
Co. v. United States, 276 U. S. 311,
276 U. S.
325-326;
New Orleans v. Fisher, 180 U.
S. 185,
180 U. S. 196;
Dowell v. Applegate, 152 U. S. 327,
152 U. S.
337-341. But neither the assumption of jurisdiction by
the Commission nor its denial of the application can operate as
res judicata of the railway's claim of immunity. If, as is
contended, the Commission was without jurisdiction, the railway is
as free to proceed with the construction as if the application had
not been made and the Commission had not acted. Nothing done by the
Commission can prejudice the railway's claim to immunity in any
other proceeding.
It is true that, if the railway builds without having secured a
certificate, it may suffer serious loss. For a court may hold, in
an appropriate proceeding, that the railway is within the purview
of paragraph 18. And the railway may be thus subjected to the
penalties prescribed by paragraph 20. These risks arise, however,
not from
Page 280 U. S. 477
the order, but from the statute.
Compare Lehigh Valley R.
Co. v. United States, 243 U. S. 412,
243 U. S. 414.
The order is entirely negative. It is not susceptible of violation,
and cannot call for enforcement. It does not finally adjudicate the
railway's standing, nor does it enjoin it to do or refrain from
doing anything. The penalties provided in paragraph 20 are
prescribed not for violation of an order of the Commission, but for
violation of the provisions of the statute. And the apprehended
loss will be no greater by virtue of the Commission's order than if
the railway had commenced building without trying to secure a
certificate, as was done in
Texas & Pacific Ry. Co. v.
Gulf, Colorado & Santa Fe Ry. Co., 270 U.
S. 266. There is no suggestion in the bill how the
Commission or the government could conceivably take any action
under the order.
The action taken by the Commission may lend greater
justification to the railway's fear of the uncertainty instinct in
the prophecy as to whether it will be held to be an interurban
electric within the meaning of paragraph 22. But it does not alter
the substance of the remedy sought. That is the same as if the suit
had been brought by the railway prior to any action by the
Commission, except that the railway may be bound by the record made
before the Commission. The relief which plaintiffs seek is not from
the order, but from the uncertainty as to the applicability of the
statute. If the statute gives the Commission jurisdiction over the
railway's application, then concededly the order is not subject to
attack. If, on the other hand, the statute does not confer the
jurisdiction, then obviously the order is no obstacle to the
railway's plans. What plaintiffs are seeking is therefore, in
substance, a declaratory judgment that the railway is within the
exemption contained in paragraph 22 of the Act. Such a remedy is
not within either the statutory or the equity jurisdiction of
federal courts.
Compare
Page 280 U. S. 478
Willing v. Chicago Auditorium Association, 277 U.
S. 274;
Great Northern Ry. Co. v. United
States, 277 U. S. 172;
Liberty Warehouse Co. v. Grannis, 273 U. S.
70,
273 U. S. 74;
United States v. Los Angeles & Salt Lake R. Co.,
273 U. S. 299.
There is nothing in the passage from
Texas & Pacific Ry.
Co. v. United States, 270 U. S. 266,
270 U. S. 272,
quoted by the Commission, which is inconsistent with the conclusion
stated above. The case is entirely different from those cases where
an application for a certificate is alleged to have been
erroneously granted, as in
The Chicago Junction Case,
264 U. S. 258, and
Colorado v. United States, 271 U.
S. 153. There, a judicial review is provided in order to
protect a legal right of the plaintiff alleged to have been
infringed by an order which authorizes affirmative action.
Since plaintiff's bill was dismissed on the merits when it
should have been dismissed for want of jurisdiction, the decree
must be reversed with directions to dismiss the bill for want of
jurisdiction.
Smallwood v. Gallardo, 275 U. S.
56,
275 U. S. 62;
Shawnee Sewerage & Drainage Co. v. Stearns,
220 U. S. 462,
220 U. S. 471;
Blacklock v. Small, 127 U. S. 96,
127 U. S. 105.
Compare United States v. Anchor Coal Co., 279 U.S. 812;
Gnerich v. Rutter, 265 U. S. 388,
265 U. S. 393;
Brownlow v. Schwartz, 261 U. S. 216,
261 U. S.
218.
Reversed with direction to dismiss the bill for want of
jurisdiction.
*
Compare Application of Uvalde & Northern Ry. Co.,
67 I.C.C. 554; Application of Texas, Oklahoma & Eastern R. Co.,
67 I.C.C. 484; Application of Gulf Ports Terminal Ry. Co., 71
I.C.C. 759.