Under § 1 (18)-(20) of the Interstate Commerce Act, the
Interstate Commerce Commission, in authorizing the abandonment of a
railway line, has authority to attach terms and conditions for the
benefit of employees who will be displaced by the abandonment. P.
315 U. S.
376.
38 F. Supp. 818, 824, affirmed.
Appeal from a decree of the District Court of three judges
setting aside in part a report and order of the Interstate Commerce
Commission, 242 I.C.C. 9.
Page 315 U. S. 374
MR. JUSTICE BLACK delivered the opinion of the Court.
The appellant Pacific Electric Railway Company owns and operates
electric railroads and motor bus and truck lines in California. It
is a wholly owned subsidiary of the Southern Pacific Railroad
Company, with whose lines it makes connections at numerous points.
It applied to the Interstate Commerce Commission for permission to
carry out
"a general program of rearrangement of . . . passenger service,
involving abandonment of certain rail lines and substitution of
motor coach transportation as a means of increasing operating
revenues, reducing expenses, and rendering a more adequate service
to the public."
The Railway Labor Executives' Association and The Brotherhood of
Railroad Trainmen appeared before the Commission as representatives
of Pacific's employees. They contended that, if the Commission were
to grant Pacific's application, it should do so only upon
conditions designed to protect employees, and proposed that Pacific
be required to provide certain specified benefits for employees who
would be displaced or otherwise prejudiced by the abandonment. In
support of this contention, they argued that many of Pacific's
employees had devoted a large part of their lives to the service of
the railroad, and had acquired valuable rights of seniority in
connection with their employment; that the proposed change would
cause many of them to lose their jobs, as a result of which they
would suffer great hardships, and some would become public charges,
and that, although the abandonment and rearrangement would give
Pacific a net annual savings
Page 315 U. S. 375
of approximately $378,000, about $302,000 of the saving would be
due to a net wage loss suffered by employees. After a hearing,
Division 4 of the Commission issued an order permitting abandonment
upon the ground that continued operation of the line by Pacific
"would impose an undue burden upon the applicant and upon
interstate commerce," but held that the Commission was without
statutory authority to impose any conditions whatever for the
protection of employees in these proceedings. 242 I.C.C. 9. The
full Commission denied the brotherhood's request for rehearing.
Upon application of the brotherhoods, the Federal District Court of
the District of Columbia, composed of three judges, in accordance
with 28 U.S.C. § 47, held that the Commission did have authority to
impose conditions for the protection of displaced employees.
Accordingly, it set aside
"That part of the Commission's report which denies consideration
of the employees' petition for lack of power . . . with directions
to the Commission to consider the petition and take such action
thereon as in the discretion of the Commission is proper."
Railway Labor Executives' Assn. v. United States, 38 F.
Supp. 818, 824. Whether it is within the Commission's power in
abandonment proceedings to impose conditions for the protection of
employees is the single question presented by this appeal.
Section 1(18) of the Interstate Commerce Act provides that
"no carrier by railroad subject to this part shall abandon all
or any portion of a line of railroad, or the operation thereof,
unless and until there shall first have been obtained from the
commission a certificate that the present or future public
convenience and necessity permit of such abandonment."
And Section 1(20) empowers the Commission to "attach to the
issuance of the certificate such terms and conditions as in its
judgment the public convenience and necessity may require." 49
U.S.C. § 1(18)-(20).
Page 315 U. S. 376
With respect to consolidations, another section of the Act,
5(4), is controlling. In
United States v. Lowden,
308 U. S. 225,
this Court held that the Commission has authority under Section
5(4) to impose conditions similar to those sought here in order to
protect employees adversely affected by a consolidation. At the
time of the
Lowden case, Section 5(4) provided:
"If . . . the Commission finds that, subject to such terms and
conditions and such modifications as it shall find to be just and
reasonable, the proposed consolidation . . . will promote the
public interest, it may enter an order approving and authorizing
such consolidation . . . upon the terms and conditions and with the
modifications so found to be just and reasonable."
49 U.S.C. § 5(4).
The Commission argues that the conditions it is authorized to
impose under the consolidation section -- "just and reasonable"
conditions, which "will promote the public interest" -- are of much
broader scope than the conditions it is authorized to impose under
the abandonment section -- conditions which "the public convenience
and necessity may require." Although admitting that provisions for
the protection of displaced employees may be a condition that "will
promote the public interest," the Commission concludes that such
provisions cannot be required by "the public convenience and
necessity." We need not decide in what respects, if any, the
authorization to impose conditions in consolidations is broader
than the authorization to impose conditions in abandonments. For,
even assuming that the language of the abandonment section is
narrower, we cannot agree that it excludes all power to impose
conditions of the kind sought here.
The phrase "public convenience and necessity," no less than the
phrase "public interest," must be given a scope consistent with the
broad purpose of the Transportation Act of 1920: to provide the
public with an efficient and nationally integrated railroad system.
New
England
Page 315 U. S. 377
Divisions Case, 261 U. S. 184,
261 U. S.
189-191. Clear recognition that "public convenience and
necessity" includes the consideration of effects on the national
transportation system of a proposed abandonment appears in the
decision of this Court in
Colorado v. United States,
271 U. S. 153.
There, Mr. Justice Brandeis, although stating that "public
convenience and necessity" was the sole criterion for determining
whether or not an abandonment should be allowed, nevertheless
considered the effect of the proposed abandonment in a much broader
sphere than the immediate locality and population served by the
trackage to be abandoned.
See also Transit Commission v. United
States, 284 U. S. 360. And
if national interests are to be considered in connection with an
abandonment, there is nothing in the Act to indicate that the
national interest in purely financial stability is to be
determinative, while the national interest in the stability of the
labor supply available to the railroads is to be disregarded. On
the contrary, the
Lowden case recognizes that the
unstabilizing effects of displacing labor without protection might
be prejudicial to the orderly and efficient operation of the
national railroad system. Such possible unstabilizing effects on
the national railroad system are no smaller in the case of an
abandonment like the one before us than in a consolidation like
that involved in the
Lowden case. Hence, it is only by
excluding considerations of national policy with respect to the
transportation system from the scope of "public convenience and
necessity," an exclusion inconsistent with the Act as this Court
has interpreted it, that the distinction made by the Commission can
be maintained.
It was not until 1935, fifteen years after the passage of
Section 1(20), that the Commission first decided that it was
without power to impose conditions for the protection of workers in
an abandonment. Chicago G.W. R. Co. Trackage, 207 I.C.C. 315, 322.
At that time, the Commission
Page 315 U. S. 378
took the position that requiring displacement allowances as a
condition would be the equivalent of granting a private benefit to
a particular group of workers, and therefore beyond the scope of
authority granted by Congress. The Commission has taken the same
position here. It must not be forgotten, however, that the
immediate result of permitting the abandonment itself is a private
benefit for the railroad in the form of savings realized by
discontinuing uneconomic services. The justification lies in the
benefit to the transportation system which the Commission concluded
the abandonment would produce. There is nothing in the Act to
prevent the Commission from taking action in furtherance of the
"public convenience and necessity" merely because the total impact
of that action will include benefits to private persons, either
carriers or employees. The
Lowden case specifically
recognized that the imposition of conditions similar to those
sought here might strengthen the national system through their
effect on the morale and stability of railway workers generally.
Exactly the same considerations of national importance are
applicable and operative here.
We must also reject the further argument that Congress has
ratified the Commission's construction of Section 1(18)-(20). It is
true that Congress made no changes in Section 1(18)-(20) of the
Interstate Commerce Act in passing the Transportation Act of 1940,
and that the annual reports of the Commission to Congress in 1935
and 1936 had specifically asked "for further statutory provisions
to protect employees from undue financial loss as a consequence of
authorized railway abandonments or unifications." But the
Lowden case, clearly establishing that the Commission's
1935 and 1936 doubts about its powers with respect to unifications
were erroneous, was decided on December 4, 1939. Congress could
with good reason have concluded that the principle of the
Lowden case was
Page 315 U. S. 379
equally applicable to abandonments. In any event, the contrary
conclusion -- that abandonments were now to be distinguished,
although the Commission had made no such distinction in presenting
the problem to Congress, and that Congress approved such a
distinction -- is, at best, the product of a set of inferences none
of which is free from doubt. We therefore cannot impute to
Congress' failure to amend Section 1(18)-(20) the significance
which the petitioners contend it should have.
Nor is the petitioners' contention strengthened because Congress
did modify Section 5(4) in the Transportation Act of 1940. The
modifications, so far as relevant here, merely made mandatory with
respect to unifications the protections for workers that had
previously been discretionary.
* See Lowden
v. United States, supra, 308 U. S. 239.
To regard them as a restriction on the discretionary power of the
Commission with respect to abandonments is not merely illogical. It
requires us to impute to Congress a policy of mandatory protection
for labor in unifications, and no
Page 315 U. S. 380
protection at all in abandonments. It is reasonable to suppose
that, if Congress had intended to make such a distinction, it would
have said so more explicitly.
The petitioners have made further arguments based on the
statutory history of the Transportation Act of 1940, relying upon
incidental and sporadic references in committee hearings and
reports to the protection of labor in connection with abandonments.
We have reviewed those references, and have found that they raise
inferences too ambiguous to support the conclusion that Congress
has ratified the Commission's construction of Section
1(18)-(20).
It is also urged that we should not disturb the Commission's
construction of the abandonment provisions for the reason that
administrative interpretations by the agency charged with the
enforcement of a statute are entitled to great weight. But, as we
have pointed out, the construction placed upon Section 1(18)-(20)
by the Commission is not only hostile to the major objective of the
Act and inconsistent with decisions of this Court, but
irreconcilable with its own interpretations of Section 5(4). Under
such circumstances, we believe the court below was amply justified
in refusing to accept the Commission's construction.
Cf.
Mitchell v. United States, 313 U. S. 80;
City Bank Farmers Trust Co. v. Helvering, 313 U.
S. 121.
We therefore conclude that the Commission has authority to
attach terms and conditions for the benefit of employees displaced
by railroad abandonments. Whether such terms and conditions should
be attached in this case, and, if so, their nature and extent, are
questions for the Commission to decide in the light of the
evidence. The judgment of the court below should accordingly be
Affirmed.
*
"As a condition of its approval, under this paragraph (2), of
any transaction involving a carrier or carriers by railroad subject
to the provisions of this part, the Commission shall require a fair
and equitable arrangement to protect the interests of the railroad
employees affected. In its order of approval, the Commission shall
include terms and conditions providing that, during the period of
four years from the effective date of such order, such transaction
will not result in employees of the carrier or carriers by railroad
affected by such order being in a worse position with respect to
their employment, except that the protection afforded to any
employee pursuant to this sentence shall not be required to
continue for a longer period, following the effective date of such
order, than the period during which such employee was in the employ
of such carrier or carriers prior to the effective date of such
order. Notwithstanding any other provisions of this Act, an
agreement pertaining to the protection of the interests of said
employees may hereafter be entered into by any carrier or carriers
by railroad and the duly authorized representative or
representatives of its or their employees."
54 Stat. 906-907.