Burlington Northern Railroad Company v. Department Of Public Service Regulation

763 F.2d 1106, 1985 U.S. App. LEXIS 30699
CourtCourt of Appeals for the Ninth Circuit
DecidedJune 21, 1985
Docket84-3941
StatusPublished
Cited by28 cases

This text of 763 F.2d 1106 (Burlington Northern Railroad Company v. Department Of Public Service Regulation) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Burlington Northern Railroad Company v. Department Of Public Service Regulation, 763 F.2d 1106, 1985 U.S. App. LEXIS 30699 (9th Cir. 1985).

Opinion

763 F.2d 1106

BURLINGTON NORTHERN RAILROAD COMPANY, Plaintiff-Appellant,
v.
DEPARTMENT OF PUBLIC SERVICE REGULATION; Public Service
Commission; Gordon E. Bollinger; Clyde E.
Jarvis; Thomas E. Schneider; John
Driscoll; and Howard Ellis,
Defendants-Appellees.

No. 84-3941.

United States Court of Appeals,
Ninth Circuit.

Argued and Submitted Jan. 18, 1985.
Decided June 21, 1985.

K. Kent Koolen, Burlington Northern R. Co., Billings, Mont., for plaintiff-appellant.

Opal Winebrenner, Helena, Mont., James L. Highsaw, Highsway & Mahoney, Washington, D.C., for defendants-appellees.

Appeal from the United States District Court for the District of Montana.

Before GOODWIN and SKOPIL, Circuit Judges, and VUKASIN,* District Judge.

GOODWIN, Circuit Judge.

Burlington Northern Railroad Company appeals from a judgment for the Department of Public Service Regulation, in which the district court, on cross motions for summary judgment, upheld as constitutional a Montana statute requiring the railroad to maintain and staff certain freight offices in the state of Montana. We affirm.

Burlington Northern operates in Montana a railroad which is regulated by the Montana Public Service Commission pursuant to statute. Mont.Code Ann. Sec. 69-14-111. The Commission has statutory authority to compel the railroad to maintain and operate adequate train service (both freight and passenger), to provide suitable accommodation for the public and to provide facilities for passengers and freight at all stations. Mont.Code Ann. Sec. 69-14-117. Burlington Northern has a virtual monopoly over rail service in Montana.

The statute compels the railroad to maintain and staff station facilities in towns of at least 1,000 persons.1 Burlington Northern has challenged the statute by attacking the regulation promulgated by the Commission. That regulation tracks closely the statutory language:

(1) No railway company now or hereafter operating within the State of Montana shall:

(a) Discontinue a station agent who now is or may hereafter be installed, without first giving notice thereof to and receiving permission from the Public Service Commission of the State of Montana to make such change.

Mont.Admin.R. Sec. 38.4.301.

Burlington Northern filed petitions with the Commission seeking authority to close, discontinue or consolidate freight agency operations at a number of towns in Montana including Browning, Choteau, Whitehall, Big Timber, Columbus, Wibaux, Circle and Terry. Burlington Northern claims that station agents are no longer needed in these towns because many of the duties historically performed by station agents are currently performed in centralized, computerized service centers. Now that the railroad no longer handles less-than-carload freight, freight traffic from these small stations has declined significantly in recent years, so much so that some station agencies rarely handle any freight at all. The railroad alleges that operation of the compelled stations is redundant and economically wasteful.

The Commission dismissed all the petitions without a hearing, taking judicial notice that the population of each of these communities is 1,000 or more. Citing Mont.Code Ann. Sec. 69-14-202, the Commission said it had no authority to consider the petitions and did not, therefore, have to hold a hearing or consider the financial burden of these stations on Burlington Northern before denying its petitions.

Burlington Northern's suit challenges the constitutionality of the statute and of the Commission regulation under the due process clause, the equal protection clause and the commerce clause of the Constitution. The railroad has the burden of proving unconstitutionality under a rationality review; statutes are presumed to be constitutional. Brown v. Maryland, 25 U.S. 419, 436, 12 Wheat 419, 436, 6 L.Ed. 678 (1827).

The standard for judging the constitutionality of a statute such as Mont.Code Ann. Sec. 69-14-202, which regulates economic activity, is the same under the due process, equal protection or commerce clauses. Legislation will be upheld if it bears a rational relationship to a legitimate state interest. Williamson v. Lee Optical Co., 348 U.S. 483, 488, 75 S.Ct. 461, 464, 99 L.Ed. 563 (1955) (due process); Dandridge v. Williams, 397 U.S. 471, 485, 90 S.Ct. 1153, 1161, 25 L.Ed.2d 491 (1970) (equal protection); Southern Pacific Co. v. Arizona, 325 U.S. 761, 781-82, 65 S.Ct. 1515, 1526-27, 89 L.Ed. 1915 (1945) (commerce).

In the context of state regulation of transportation utilities, it is generally agreed that legitimate state interest is defined by the state's need to ensure that carriers serve the public convenience and necessity. See Chicago, M.St.P. & P.R.R. v. Board of R.R. Comm'rs, 126 Mont. 568, 255 P.2d 346, 349, cert. denied, 346 U.S. 823, 74 S.Ct. 40, 98 L.Ed. 349 (1953). The public convenience and necessity may require a railroad to provide adequate and suitable facilities for the convenience of the communities served by the railroad. Atchison, T. & S.F.R.R. v. R.R. Comm'n, 283 U.S. 380, 394-95, 51 S.Ct. 553, 557, 75 L.Ed. 1128 (1931). See Norfolk & W. Ry. v. Pub. Service Comm'n, 265 U.S. 70, 74, 44 S.Ct. 439, 440, 68 L.Ed. 904 (1924) (state may require railroads to provide stations to serve railroad customers). The scope of permissible regulation over carriers is comprehensive so long as the regulation is designed to serve the public convenience and necessity, see Chicago, M.St.P. & P.R.R., 255 P.2d at 351; such regulation can be effected either directly through legislation or through a public service commission. See Atchison, T. & S.F.R.R. v. R.R. Comm'n, 283 U.S. at 394, 51 S.Ct. at 557.

It is clear on the face of the statute that Mont.Code Ann. Sec. 69-14-202, when enacted, was designed to serve the public convenience and necessity and that the statutory and regulatory requirements were related, therefore, to a legitimate state interest. The Montana statute and regulation can withstand constitutional attack today unless the railroad can prove that the regulatory scheme is no longer rationally related to that interest in fostering public convenience and necessity.

Montana has had a statutorily defined population criteria for minimum rail facilities since the turn of the century. See Sec. 1, Ch. 26 L. 1905 (codified as R.C.M. Sec. 72-627) (railroads must maintain facilities at any platted townsite along the railroad route with a population of at least 100 persons). In 1969, the Montana legislature revised this section to require railroads to maintain any existing station facilities in towns of at least 1,000 persons. Sec. 1, Ch. 266 L.1969.

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763 F.2d 1106, 1985 U.S. App. LEXIS 30699, Counsel Stack Legal Research, https://law.counselstack.com/opinion/burlington-northern-railroad-company-v-department-of-public-service-ca9-1985.