1. In order that one may sue as a "party in interest" under
paragraph 20, § 402 of the Transportation Act of 1920, to enjoin
the construction of a railroad extension not authorized by the
Interstate Commerce Commission, he must show that the extension
will
Page 311 U. S. 296
bring about a change in the transportation system by which his
own special and peculiar interest may be directly and materially
affected. P.
311 U. S.
303.
2. Numerous commission merchants who did business and owned
property in and about an established city produce market alleged in
their bill against a railroad company that the market adequately
served the consuming public in its vicinity and dealt in produce
shipped to and from other States; that the city was engaged in
constructing new buildings for it at large cost and that the market
had adequate transportation facilities; that an adjoining city was
constructing a new market at great expense, partly with funds to be
procured by sale of its bonds to the railroad company; that the
company proposed at large expense to furnish trackage to serve this
new market, which would constitute an extension of its lines for
which it had procured no certificate from the Interstate Commerce
Commission; that the construction and operation of such extension
would injure and destroy the business and property of the
plaintiffs in and about the existing market by creating an
unnecessary rival market at an inconvenient place without increase
of produce to be handled or customers to be served; that it would
result in unnecessary duplication of railroad facilities at large
cost, without increasing the freight to be handled; would divert
traffic from railroads now serving the existing market and cause
destructive competition between them and the defendant, and
needless and wasteful expenditure by the defendant; that the
alleged extension would thus directly and adversely affect the
property interests of the plaintiffs and the public by bringing
about a material change in the transportation situation, and would
constitute an unnecessary burden upon interstate commerce, directly
and adversely affecting the welfare of the plaintiffs and the
public interest,
Held:
(1) That the plaintiffs were without standing to maintain the
suit as "parties in interest" under paragraph 20, § 402,
Transportation Act of 1920. Pp.
311 U. S. 300
et seq.
(2) That the city in which the existing market is located was
properly denied leave to intervene as a party plaintiff. P.
311 U. S.
305.
109 F.2d 493, affirmed.
Certiorari,
30 U. S. 653,
to review the affirmance of a decree dismissing a bill praying for
an injunction against the construction and operation of an alleged
extension of the lines of the defendant railroad company.
Page 311 U. S. 297
The decree also denied an application of the City of Kansas
City, Missouri, to intervene as a plaintiff.
MR. JUSTICE McREYNOLDS delivered the opinion of the Court.
Undertaking to proceed under Paragraphs 18, 20 and 21, Section
402, Transportation Act, 1920,** 41 Statutes 456, 477, U.S.C. Title
49, § 1, petitioners, by bill filed December 30, 1938, in the
United States District Court, Western District of Missouri, asked a
decree enjoining respondent from constructing or operating an
alleged extension, 26 F. Supp. 721.
Page 311 U. S. 298
The bill describes them thus: --
"Plaintiffs are engaged in the business of buying and selling at
wholesale and retail, fruits, vegetables and other food products
within and adjacent to the so-called City Market of Kansas City,
Missouri, located at and near the intersection of Fourth and Walnut
Streets in said City, or are directly interested in or connected
with said business. Said market has been in existence at said
location for more than seventy-five years serving greater Kansas
City and vicinity as a wholesale and retail produce market, and
also serving numerous territories in other states to and from which
perishable and other produce bought and sold in said market is
transported. The City of Kansas City, Missouri, is now engaged in
the construction of new wholesale and retail market buildings and
facilities in said vicinity at a cost of approximately $500,000.00.
Said market is now and for a long period of time has been served by
existing transportation facilities of various trunk line railroads,
and said existing transportation facilities are suitable,
convenient, and adequate to meet the requirements of the market.
The market is easily accessible to its customers through the
facilities of said railroads and also by the use of streets and
hard-surfaced highways radiating in every direction therefrom."
Answering, the respondent alleged that petitioners were not
parties "in interest" within Paragraph 20, § 402, Transportation
Act, and had no right to sue. The District Court sustained this
defense and dismissed the bill. Upon appeal, its action was
affirmed. The matter is here by certiorari.
The Circuit Court of Appeals, 109 F.2d 493, 495, made the
following summation of the bill --
"The complaint of the plaintiffs shows that they are commission
merchants doing business on the Kansas City, Missouri, produce
market, an old and well established
Page 311 U. S. 299
market which adequately serves the consuming public in its
vicinity and receives produce from, and ships produce to, other
states; that Kansas City, Missouri, is now engaged in constructing
new market buildings for this market at a cost of about $500,000;
that the market has suitable and adequate transportation facilities
of all kinds; that the adjoining city of Kansas City, Kansas,
proposes to build and is building a 'food Terminal' or produce
market on a tract of land which it owns at a cost of about
$4,000,000, of which $1,710,000 is a grant from the Public Works
Administration of the United States, and that the balance of the
necessary funds will be procured by a sale of the City's bonds to
the defendant railroad company; that the defendant proposes, at an
expense of some $500,000, to furnish trackage to serve this Kansas
City, Kansas, market; that this trackage constitutes an extension
of the defendant's lines of railroad, for the construction of which
it has procured no certificate of convenience and necessity from
the Interstate Commerce Commission as required by law; that the
construction and operation of the proposed extension in Kansas
City, Kansas, will adversely affect and will destroy the business
and properties of the plaintiffs and the large investments which
they have made in and adjacent to the Kansas City, Missouri,
produce market; that it will create an unnecessary and uncalled for
rival market at an inconvenient place without creating any more
produce to be handled or any more customers to be served; that it
will result in the unnecessary duplication of railroad facilities
at a cost of $500,000 without increasing the amount of freight to
be handled; that it will divert traffic from other railroads which
are now adequately handling the traffic to the Kansas City,
Missouri, produce market, and will cause destructive competition
between the defendant and other railroads, and will cause a
wasteful and needless expenditure
Page 311 U. S. 300
of money by the defendant; that,"
"for each and all of the reasons aforesaid, the construction and
operation, or the construction, or the operation of the said
extension or extensions of railroad by the defendant to said
proposed produce market in Kansas City, Kansas, will directly and
adversely affect the property interests of the plaintiffs and the
public generally by bringing about a material change in the
transportation situation, and will constitute an unnecessary burden
upon interstate commerce, directly and adversely affecting the
welfare of plaintiffs and the public interest."
It is not alleged that the respondent has ever served the
produce market in Kansas City, Missouri, or that petitioners make
or receive shipments over its lines or that the proposed extension
will deprive them of any shipping facilities. Evidently the real
purpose was to obstruct construction of a competitor, and the
theory upon which the proceeding rests would permit petitioners to
sue if any railroad should extend its lines to any market competing
with the market at Kansas City, Missouri.
Concerning the purport of the allegations of the bill, the
Circuit Court of Appeals rightly said:
"It is obvious that the only basis for the plaintiffs' claim
that the alleged extension of the lines of the defendant to the
Kansas City, Kansas, market will particularly injure them is that
they do business upon the Kansas City, Missouri, market, and that,
if the proposed rival market in Kansas City, Kansas, functions, it
will divert business from the market upon which they operate, and
will thus hurt them, their business, and their investments in
Kansas City, Missouri, and that, since the proposed extension of
its tracks by the defendant is necessary to enable the rival market
to function, such extension will therefore injure the plaintiffs.
It seems equally obvious that, except for the fact that the
proposed
Page 311 U. S. 301
extension is essential to the operation of the rival market in
Kansas, it could not possibly have any direct or immediate effect
upon the plaintiffs, their property, or their business in Missouri
other than the effect which a wasteful expenditure by the defendant
of its money would have upon the public generally. The proximate
cause of the injury to the plaintiffs will be the competition
created by the construction and operation of the rival market, and
not the construction or operation of the transportation facilities
furnished to it by the defendant or by others engaged in the
transportation business."
It declared that the question whether petitioners were "parties
in interest" within Paragraph 20 must be determined upon
consideration of
Western Pacific California R. Co. v. Southern
Pacific, 284 U. S. 47, and
concluded --
"The plaintiffs have no definite legal right which is
threatened. They are, however, persons whose welfare may be
adversely affected by the bringing about of a material change in
the transportation situation, in the sense that the extension
proposed by the defendant, if built and operated, will enable a
competitive market to function to their detriment. In that sense,
we think it may safely be said that the proposed extension of
defendant's lines may adversely affect the plaintiffs' welfare. We
are of the opinion, however, that their complaint discloses that
their welfare cannot be directly, but only indirectly and
consequentially, affected by the proposed extension. They are not
in competition with the defendant. They are not engaged in the
transportation business. Their only peculiar interest in that
business is in the effect which changes in it may have upon the
market where they do business, and upon rival markets now or
hereafter established in the territory which the plaintiffs serve.
. . . We conclude that the statute is not to be so liberally
construed as to enable
Page 311 U. S. 302
those who fear adverse effects upon their business from the
establishment of competitive enterprises requiring transportation
facilities, to maintain suits to enjoin railroads from constructing
what are claimed to be unauthorized extensions to serve such
enterprises."
A dissenting opinion by Judge Stone likewise relied upon
Western Pacific California Railroad Co. v. Southern Pacific
Company, but took the view that the challenged action might
directly and substantially affect petitioners' welfare, since their
financial interests would suffer from the proposed rival market
which could not come into existence without the proposed
extension.
The purpose and effect of paragraphs 18, 20, and 21 were much
considered in
Texas & Pacific Ry. Co. v. Gulf, Colorado
& Santa Fe Ry. Co., 270 U. S. 266, and
Western Pacific California R. Co. v. Southern Pacific Co.,
284 U. S. 47.
In the first of these causes, a railroad sought to prevent
another from building an extension. The meaning of the term "party
in interest" was not discussed. But the opinion asserts that, by
the Transportation Act of 1920,
"Congress undertook to develop and maintain, for the people of
the United States, an adequate railway system. It recognized that
preservation of the earning capacity, and conservation of the
financial resources, of individual carriers is a matter of national
concern; that the property employed must be permitted to earn a
reasonable return; that the building of unnecessary lines involves
a waste of resources, and that the burden of this waste may fall
upon the public; that competition between carriers may result in
harm to the public, as well as in benefit, and that, when a
railroad inflicts injury upon its rival, it may be the public which
ultimately bears the loss."
Also,
"the prohibition of paragraph 18 is absolute. If the proposed
track is an extension and no certificate has
Page 311 U. S. 303
been obtained, the party in interest opposing construction is
entitled as of right to an injunction."
In the second cause, it was claimed that the Western Pacific was
not a "party in interest" within the statute. The Circuit Court of
Appeals, 46 F.2d 729, accepted that view; we concluded otherwise,
but did not undertake to announce an inclusive and exclusive
definition of the term. The circumstances disclosed a special
interest in that complainant with probability of direct loss from
what the defendant -- not another- proposed to do. The portion of
the opinion, presently specially important, follows --
"If, as the court below seems to have assumed, a 'party in
interest' must possess some clear legal right for which it might
ask protection under the rules commonly accepted by courts of
equity, the paragraphs under consideration would not materially aid
the Congressional plan for promoting transportation. On the other
hand, there was no purpose to permit any individual so inclined to
institute such a proceeding. The complaint must possess something
more than a common concern for obedience to law.
See
Massachusetts v. Mellon, 262 U. S. 447,
262 U. S.
488. It will suffice, we think, if the bill discloses
that some definite legal right possessed by complainant is
seriously threatened, or that the unauthorized and therefore
unlawful action of the defendant carrier may directly and adversely
affect the complainant's welfare by bringing about some material
change in the transportation situation."
The Transportation Act, 1920, was designed to protect the public
against action which might endanger its interest. In order to aid
that general purpose, Paragraph 20, Section 402, provides that suit
for an injunction may be instituted by the United States, the
Commission (I.C.C.), any Commission or Regulative Body of the state
or states affected, or any "party in interest." Such
Page 311 U. S. 304
a suit cannot be instituted by an individual unless he
"possesses something more than a common concern for obedience to
law." The general or common interest finds protection in the
permission to sue granted to public authorities. An individual may
have some special and peculiar interest which may be directly and
materially affected by alleged unlawful action.
See Detroit
& M. Ry. Co. v. Boyne City, G. & A. R. Co., 286 F.
540. If such circumstances are shown, he may sue; he is then "party
in interest" within the meaning of the statute. In the absence of
these circumstances, he is not such a party.
We cannot think Congress supposed that the development and
maintenance of an adequate railway system would be aided by
permitting any person engaged in business within or adjacent to a
public market to demand an injunction against a carrier seeking
only to serve a competing market by means of an extension not
authorized by the Interstate Commerce Commission.
The right to sue under the statute is individual. Petitioners
are not helped by uniting.
The Circuit Court of Appeals, after reviewing all the facts,
reached the conclusion that the welfare of petitioners could only
be indirectly and consequentially affected by the proposed
extension; that their interest in the transportation situation
"is in the effect which changes in it may have upon the market
where they do business and upon rival markets now or hereafter
established in the territory which the plaintiffs serve."
It held this was not enough. We agree. A mere extension to the
plant of a competitor which in no other way affects the complaining
parties in no proper sense brings about a material change in the
transportation system directly affecting their peculiar interest
which they have the right to prevent by suit.
The challenged judgment must be affirmed.
Page 311 U. S. 305
No. 35.
The City of Kansas City, Missouri, sought to intervene in No.
34. The District Court denied its motion. The Circuit Court of
Appeals affirmed. In view of what we have decided in No. 34, this
denial necessarily must be affirmed.
Affirmed.
* Together with No. 35,
Kansas City, Missouri v. L. Singer
& Sons et al., also on writ of certiorari, 309 U.S. 653,
to the Circuit Court of Appeals for the Eighth Circuit.
** Transportation Act, 1920, § 402:
"Paragraph (18) . . . No carrier by railroad subject to this Act
shall undertake the extension of its line of railroad . . . unless
and until there shall first have been obtained from the commission
a certificate that the present or future public convenience and
necessity require or will require the construction . . . of such .
. . extended line. . . ."
"Paragraph (19) The application for and issuance of any such
certificate shall be under such rules and regulations as to
hearings and other matters as the commission may from time to time
prescribe. . . ."
"Paragraph (20) . . . Any construction . . . contrary to the
provisions . . . of paragraph (18) . . . may be enjoined by any
court of competent jurisdiction at the suit of the United States,
the commission, any commission or regulating body of the State or
States affected, or any party in interest. . . ."
MR. JUSTICE FRANKFURTER.
I quite agree with my Brother STONE that unfair loss may be cast
upon a community by the unjustified extension of a railroad line,
and that such loss is one consequence of the evils of unregulated
railroad building which the Transportation Act was intended to
check. But our immediate problem is to determine how a community
can challenge such a proposed improper extension. Can a city, in
other words, come into a Federal Court and urge its special
relation to an alleged violation of § 1 (18-22), of the
Transportation Act, 1920, 41 Stat. 456, 477, 49 U.S.C. § 1 (18-22)?
The answer, of course, depends on the scheme of enforcement that
Congress has devised for the Act. After making administrative
provisions for securing a certificate from the Interstate Commerce
Commission as a prerequisite to the construction of an "extension,"
the Act subjects any construction in violation of its licensing
system to an injunction "at the suit of the United States, the
commission, any commission or regulating body of the State or
States affected, or any party in interest." § 1(20).
A city deeming itself adversely affected by a proposed illegal
extension would naturally turn to its state commission to assert
its interests. If, for any reason, the state agency does not employ
its power under § 1(20) on behalf of the city's claims, the latter
can invoke the law enforcing authority of the Interstate Commerce
Commission and also enlist the power of the Attorney General to
initiate litigation. It is reading § 1(20)
Page 311 U. S. 306
without illumination of the scheme and purposes of the
Transportation Act to expand the categories of public agencies
explicitly named by Congress for enforcing § 1 (18) by including a
city as a "party in interest." To do so would disregard recognition
of a state utility commission as the special repository of all the
interests of a state in this particular field, and of the
Interstate Commerce Commission as the national organ for enforcing
the body of interstate commerce acts. Clearly, therefore, Kansas
City cannot be deemed a "party in interest" for the litigious
purposes of that phrase in § 1(20).
But it would indeed be strange to find that, while the city was
not given power to resort to a court, a private and more limited
sufferer from the same economic threat may have such legal
standing. Such a paradox exposes the appropriate scope of "party in
interest" in § 1(20). The guiding considerations in the application
of that section are to be found in the reach of the functions of
the Interstate Commerce Commission and of its state analogues. They
are relied on for the enforcement of railroad legislation neither
grudgingly nor with scepticism. In these agencies are lodged the
resources for compounding the manifold ingredients of "the public
interest." To entrust the vindication of this public interest to a
private litigant professing a special stake in the public interest
is to impinge on the responsibility of the public authorities
designated by Congress. If there be insufficient assurance that
unlawful railroad construction will be resisted by a state
commission representing all the interests of a state that are
affected, the Interstate Commerce Commission may be moved to enjoin
illegality.
Who, then, is a "party in interest"? As a part of the very
system through which the national policy is to be achieved, a
railroad has been deemed by this Court a "party in interest" to
effectuate the railroad policy introduced
Page 311 U. S. 307
by the licensing system of the Transportation Act.
Texas
& Pac. Ry. Co. v. Gulf, C. & S.F. Ry. Co.,
270 U. S. 266,
270 U. S. 277;
Western Pacific California R. Co. v. Southern Pac. Co.,
284 U. S. 47. And
one who in a proceeding initiated before the Interstate Commerce
Commission has been treated by it as a party to the litigation,
cf. Los Angeles Passenger Terminal Cases, 100 I.C.C. 421;
id., 142 I.C.C. 489;
Atchison, T. & S.F. Ry. Co.
v. Railroad Commission, 283 U. S. 380,
283 U. S.
393-394, may perhaps be deemed a "party in interest" in
the further pursuit of claims before a court after adverse action
by the Commission.
Compare Interstate Commerce Comm'n v.
Oregon-Washington R. Co., 288 U. S. 14, and
Federal Communications Commission v. Sanders Bros. Radio
Station, 309 U. S. 470. But
to allow any private interest to thresh out the complicated
questions that arise out of § 1 (18-22) [
Footnote 1] -- as, for instance, whether a proposed
construction is an "extension" or a "spur,"
compare Texas &
Pacific Ry. Co. v. Gulf, C. & S.F. Ry. Co., 270 U.
S. 266 -- is to invite dislocation of the scheme which
Congress has devised for the expert conduct of the litigation of
such issues. [
Footnote 2] It
also would put upon the district courts the task of drawing fine
lines in determining when a private claim is so special that it may
be set apart from the general public interest and give the claimant
power to litigate a public controversy. These inquiries are so
harassing and unprofitable as to be avoided, unless Congress has
explicitly cast the duty upon the courts. Against any such
implication, in the absence of rather plain language, the whole
course of
Page 311 U. S. 308
federal railroad legislation and the relation of the Interstate
Commerce Commission to it admonishes. The interests of merely
private concerns are amply protected even though they must be
channelled through the Attorney General or the Interstate Commerce
Commission or a state commission.
Therefore, the court below made proper dispositions of these
cases.
MR. JUSTICE ROBERTS, MR. JUSTICE BLACK, MR. JUSTICE DOUGLAS, and
MR. JUSTICE MURPHY, having concurred in the Court's opinion, also
join in these views.
[
Footnote 1]
The fact that in order to raise the bare legal question of
petitioner's right to sue, the illegality of the proposed extension
was conceded by the pleadings, does not touch the force of the
argument.
[
Footnote 2]
With reference to the present circumstances themselves, the
Attorney General, at the request of the Interstate Commerce
Commission, has chosen a different remedy to protect the public
interest.
See United States v. Union Pacific R. Co., 32 F.
Supp. 917.
MR. JUSTICE STONE.
I think that the complainants, petitioners in No. 34, are proper
parties to maintain this suit, that the decree should be reversed,
and, on the remand, the petition of Kansas City for intervention
should be considered in light of that conclusion and of §§ 212 and
213 of the Judicial Code, 28 U.S.C. § 45a, and of Rule 24 of the
Rules of Civil Procedure.
On the pleadings, it stands conceded that the proposed extension
of respondent's line is unauthorized and unlawful, and the sole
question we have to decide is whether the interests of petitioners
in maintaining this suit, as disclosed by their pleadings,
satisfies the requirement of the statute which authorizes it to be
brought by "any party in interest."
Section 1 (18) of the Transportation Act of 1920, 41 Stat. 474,
477, 49 U.S.C. § 1 (18), forbids the extension of its line by a
railroad without a certificate of the Interstate Commerce
Commission that "the present or future public convenience and
necessity require or will require" the construction of the
extension. Similarly, it prohibits the abandonment of any portion
of a line of railroad without a like certificate permitting the
abandonment.
Page 311 U. S. 309
Section 1 (19) requires the Commission to give notice of
application for a certificate to the governor of the state in which
the proposed extension is to be constructed and to publish the
notice in each county through which the line of railroad is
constructed or operated. By § 1(20), the Commission is authorized
to attach to its certificate such "conditions as in its judgment
the public convenience and necessity may require," and authorizes
any court of competent jurisdiction to enjoin the prohibited
construction or abandonment "at the suit of the United States, the
Commission, any commission or regulation body of the State or
States affected, or any party in interest. . . ." By § 1(22), spur,
industrial, side tracks, and the like are excluded from the
authority of the Commission, and the railroad may build them
without applying for a certificate.
The interest of petitioners in maintaining the suit, as shown by
the pleadings, is derived from the injury to the public which, it
is specifically alleged, will result from the proposed extension
through the injury to the community in Kansas City, Missouri, and
vicinity, of which community petitioners are a part and in which
they are property owners, and the consequent injury alleged to
affect them individually. The public injury, it is alleged, will be
caused by (a) the loss or serious impairment in utility of the
Kansas City public produce market and the destruction or serious
diminution of values of property and business and of financial
investments in and about the market, which will be brought about by
the extension, through the creation of a rival market and the
diversion of traffic to it at a point in Kansas City, Kansas, far
removed from the center of population of Kansas City, Missouri, and
to the inconvenience of the great majority of the citizens of both
cities who are served by the existing market, which is adequate to
the needs of the community; (b) by the
Page 311 U. S. 310
unnecessary duplication of railroad facilities in the Kansas
City district at large cost, with wasteful and needless
expenditures by respondent and no increase in freight to be
handled, and (c) by the diversion of traffic to respondent railroad
from other railroads and destructive competition between the
railroads operating in the vicinity.
Special injury is shown to complainants (petitioners in No. 34)
by the allegations that they are owners of business property and
investments in the existing market area and vicinity, and that
their property will be reduced in value in consequence of the
diversion of traffic to the rival market. The petitioner, Kansas
City, Missouri, in intervention, in No. 35, alleges the like injury
to the public which it represents and sets up specifically the
threatened loss in value and utility of a large public market
structure which it is now building at great cost, and the
threatened loss to it of taxes through diminution in property
values in the city.
The statute does not define the "parties in interest" whom it
permits to sue to restrain an unauthorized extension. It cannot be
assumed that the phrase is meaningless or that the statute should
be read as though the words were omitted. Obviously the parties
intended must have, as do petitioners, an interest in the outcome
of the litigation other than the "common concern for obedience to
law."
See Massachusetts v. Mellon, 262 U.
S. 447,
262 U. S. 488.
And, as the language of the statute plainly indicates and as we
have held, they may be, as are petitioners, others than the public
bodies named in the statute as appropriate plaintiffs.
Atchison, T. & S.F. Ry. Co. v. Railroad Commission,
283 U. S. 380,
283 U. S.
393-394. And they may maintain the suit although the
injury which they allege is not strictly an actionable wrong
independently of the paragraphs in question.
Page 311 U. S. 311
Western Pacific R. Co. v. Southern Pacific Co.,
284 U. S. 47.
The statute draws no distinction between direct and indirect
injury as the test of plaintiff's interest. Nor is any reason
advanced for saying that his interest is more significant because
the injury which he suffers is labeled "direct," rather than
"indirect." In any case, that suffered by petitioners does not seem
to be any the less direct than that which an extension may inflict
upon a competing railroad which admittedly may sue to enjoin it.
Western Pacific California R. Co. v. Southern Pacific Co.,
supra; cf. Claiborne-Annapolis Ferry Co. v. United States,
285 U. S. 382. If
the statute imposes any requirements other than those indicated by
the phrase "party in interest," they must be implied from the
purposes of the statute, its context, and from the reasons for
permitting others than the public bodies named in it to bring the
suit.
Cf. New York Central Securities Corp. v. United
States, 287 U. S. 12,
287 U. S. 24. On
the other hand, if maintenance of the present suit by petitioners
is consistent with those purposes and aids them and is in harmony
with the reasons for allowing any party in interest to sue, the
conclusion would seem inescapable that petitioners are proper
plaintiffs.
It is not denied that the statutory language and the legislative
history of the paragraphs in question require consideration by the
Commission of the interests of cities, towns, and communities which
are adversely affected by a proposed extension of a line of
railroad, in order to determine whether "public convenience and
necessity" require the extension. The phrase "public convenience
and necessity" has long been used to signify the final result of
the balancing of the consequences which flow from the proposed
action to all those matters of public concern which are affected by
it.
Cf. 283 U. S. S.
312� & O. Ry. Co. v. United States,
283 U. S.
35, 283 U. S.
42; United States v. Lowden,
308 U.
S. 225. And we have held that, in the administration of
the cognate provision relating to abandonment of railroad lines,
the Commission must consider as a part of the public convenience
and necessity the interests of local communities affected by the
proposed abandonment. Colorado v. United States,@
271 U.
S. 153,
271 U. S. 168.
A community may suffer injury through the loss of railroad service
and diversion of traffic resulting from the construction and
operation of a railroad extension without any compensating public
advantage which is comparable in kind and amount with injury
sustained by the abandonment of a line of railroad. One as well as
the other should receive the consideration of the Commission in
determining whether it should grant or withhold a certificate. Such
appears to be its settled practice on applications for a
certificate authorizing extension. [
Footnote 2/1]
Page 311 U. S. 313
It is plain that the purpose of the statute is the protection of
the public interest, and that, in the administration of its
provisions by the Commission, public interest is of paramount
concern. That interest is primarily that railroad extensions, as
the statute provides, shall not be built or operated without
receiving the approval of the Commission, and that the Commission
shall grant its permission only if the public convenience and
necessity so require.
In determining who may bring the suit to restrain the proposed
construction as provided by § 1(20), it is significant that the
suit is brought to restrain an act which the statute declares
unlawful, the construction of an extension without the certificate
of the Commission, § 1 (18), and that the function of the court is
not that of the Commission in granting or withholding a
certificate. The only issue which can be litigated in such a suit,
brought by a proper plaintiff, is whether, in fact, the proposed
construction is of a spur or sidetrack, the only new trackage which
a railroad may lawfully build without recourse to the Commission.
It is an issue which is, by paragraphs (18) and (22) of § 1, made a
judicial, not an administrative, question, and involves no more
complexities of litigation than many other cases which courts are
called on daily to decide. In any case, the issue is one which
Congress directed to be litigated in a suit brought under § 1(20),
and its complexity is unaffected by the particular plaintiff who
brings the suit.
If the proposed construction is an extension, the injunction
must issue as of right, but its only affect is to compel the
railroad before proceeding further to apply to the Commission for a
certificate of public convenience and necessity which is the public
purpose of the Act.
Page 311 U. S. 314
Texas & Pacific Ry. Co. v. Gulf, C. & S.F. Ry.
Co., 270 U. S. 266,
270 U. S. 273.
The court is thus called on to decide no administrative issue which
must be submitted to the Commission in advance of suit, and any
decree which it may render involves no embarrassment to the
Commission or otherwise in the administration of the Act. While the
Commission itself may bring the suit, it is under no statutory duty
to do so, and its only other authority in the premises is to grant
or withhold the certificate when applied for. One injured by an
unauthorized extension and opposed to its construction, whether a
state commission, a competing railroad or any other injured party,
is not authorized to initiate any proceeding before the Commission,
and its only protection as of right from the consequences of the
threatened public wrong is that afforded by suit authorized by §
1(20).
See Texas & Pacific Ry. Co. v. Gulf, C. & S.R.
Ry. Co., supra, 270 U. S.
272-274.
In considering the scope of the application of the statute, this
Court has recognized that the public interest which the Commission
is to protect includes the public interest in the maintenance of an
adequate transportation system, and that a railroad whose welfare,
although not its legal right, is adversely affected by an
unauthorized, and therefore unlawful, extension of the line of
another is a "party in interest" entitled to maintain suit to
enjoin the extension.
Western Pacific California R. Co. v.
Southern Pacific Co., supra; cf. Claiborne-Annapolis Ferry Co. v.
United States, supra. And it has held that one other than a
carrier (a municipality), who has "a proper interest in the subject
matter," may institute a proceeding before the Interstate Commerce
Commission under § 1, paragraphs 18 to 22, to obtain a certificate
of public convenience, so as to enable a railroad to build an
extension to a new station which a state commission has ordered it
to build.
Atchison, T. & S.F. Ry. Co. v.
Page 311 U. S. 315
Railroad Commission, supra, 283 U. S.
393-394.
Compare Detroit & M. Ry. Co. v. Boyne
City, G. & A. R. Co., 286 F. 540.
But it has never held, unless it has done so now, that the
public concern in protecting large communities from destruction of
their business and financial interests by diversion of traffic to
rival communities by railroad extensions, is not included in that
public convenience and necessity which the Commission must consider
in granting or withholding a certificate; or that one not a
railroad who is a member of a community adversely affected and
whose own business or property interests are so adversely affected
is not a "party in interest" within the meaning of the statute.
If the statute permits some protection through commission action
of the public interest in the preservation of communities adversely
affected by the construction of railroad extensions, no plausible
reason has been advanced for saying that an individual member of
such a community whose property or financial interests are
adversely affected by the proposed unauthorized extension, and who
would be a proper party to the proceeding before the Commission on
application for a certificate, [
Footnote 2/2]
Page 311 U. S. 316
is not a party in interest, entitled to bring suit quite as much
as a competing railroad whose property interests are likewise
affected. On the contrary, petitioners have a special and peculiar
interest in preventing the unlawful extension and in securing,
before the extension is built, such consideration of the community
interest as the Commission gives, and which can be insured only by
resort to the suit authorized by § 1(20).
True, the statute is concerned with the protection of the public
interest, but, in order that the public interest might not suffer,
and that private injury might not be inflicted through a public
wrong, the construction of an unlawful extension, Congress did not
restrict the authority to bring suit to public agencies -- the
United States, the Commission, or state commissions. Congress, by
providing that applications for certificates of convenience need
not be made for local spur or side tracks, recognized that such
constructions are too trivial to require a proceeding before the
Commission. Instead, it gave authority to bring the suit to private
parties in interest, who, because of the injury especially
inflicted upon them through the adverse effect of the unlawful
extension on the public, have a peculiar incentive to protect the
public interest with which the statute is concerned,
see
Federal Communications Comm'n v. Sanders Bros. Radio Station,
309 U. S. 470,
309 U. S. 477,
and who, by restraining an unauthorized "extension," insure the
expert consideration by the Commission in the situation in which
Congress required it.
Just as Congress gave authority to a railroad to sue to enjoin
an unauthorized extension by its competitor in order to effect the
railroad policy of the Act, it gave like authority to complainants
to effect its public policy with respect to a community injuriously
affected by an
Page 311 U. S. 317
unlawful railroad extension. The statute gives no warrant for
saying that the one may bring suit, but that the other can only ask
some public body to bring it, and neither interferes with the
functions which the Commission is authorized to perform and which,
as we have seen, are distinct from those assigned to the court by §
1(20).
Maintenance of the suit by complainants is thus within the fair
meaning of the words of the statute. It aids, rather than
obstructs, the administration of the Act; it effectuates the public
policy of the Act, and is within the reason for permitting others
than public agencies to bring the suit. They are "parties in
interest" to which the statute refers.
Since the suit was properly brought, the district court should
entertain and decide the petition of Kansas City for intervention
in the light of 28 U.S.C. § 45a, and Rule 24 of the Rules of Civil
Procedure.
THE CHIEF JUSTICE and MR. JUSTICE REED concur in this
opinion.
[
Footnote 2/1]
See Construction by Aroostook Valley R., 105 I.C.C.
643; Construction by Minnesota W.R. Co., 111 I.C.C. 377;
Construction by Northern Oklahoma Rys., 111 I.C.C. 765;
Construction of Piedmont & N. Ry., 138 I.C.C. 363; Western
Pacific California R. Co., 162 I.C.C. 5. And, in balancing the
public conveniences and necessities involved -- that is to say, the
public interest in an adequate transportation system and the public
interest in protecting local communities from undue injury from
extensions of relatively small transportation importance -- the
Commission has sometimes found the injury to existing community
interests persuasive ground for refusing the certificate.
Construction by Aroostook Valley R.,
supra; Construction
by Minnesota W.R. Co.,
supra.
The broad scope of the Commission's inquiry is evidenced by the
questionnaire which applicants for an extension must answer. Among
the data required is the nature of the population, the territory,
the industries involved, the names and character of towns near to
but not served by the extension.
See In the matter of
Applications under Paragraphs (18) and (21), Inclusive, Section 1,
of the Interstate Commerce Act for Certificates of Public
Convenience and Necessity for the Construction or Extension of
Lines of Railroad, January 22, 1924. III-A Sharfman, The
Interstate Commerce Commission, 333-335, 351.
[
Footnote 2/2]
It is settled policy of the Interstate Commerce Act and related
statutes to permit shippers, cities, commercial organizations, and
other interested parties to participate in proceedings before the
Commission and in those before the courts where the application of
the statute is involved. § 9, 24 Stat. 382, 49 U.S.C. § 9, permits
any person "claiming to be damaged" by a carrier to make complaint
to the Commission or to bring suit in a district court.
Communities, shippers, and associations may make complaint to the
Commission under § 13(1), 49 U.S.C. § 13(1), 24 Stat. 383, as
amended, 36 Stat. 550.
See United States v. Merchants' &
Manufacturers' Traffic Assn., 242 U.
S. 178. Section 42 provides that, in actions to stop
rebates and concessions, "all persons interested in or affected by
the rate, regulation, or practice" may be made parties. Sections
212 and 213 of the Judicial Code provide that "communities,
associations, corporations, firms, and individuals who are
interested in the controversy or question" before the Commission or
in any suit which may be brought under the Act may intervene.