Kansas City Southern Railway Co. v. United States

288 F. Supp. 742, 1968 U.S. Dist. LEXIS 10056
CourtDistrict Court, W.D. Missouri
DecidedJuly 29, 1968
DocketCiv. No. 15159-3
StatusPublished
Cited by10 cases

This text of 288 F. Supp. 742 (Kansas City Southern Railway Co. v. United States) is published on Counsel Stack Legal Research, covering District Court, W.D. Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kansas City Southern Railway Co. v. United States, 288 F. Supp. 742, 1968 U.S. Dist. LEXIS 10056 (W.D. Mo. 1968).

Opinion

MEMORANDUM OPINION AND ORDER AFFIRMING FINDINGS OF INTERSTATE COMMERCE COMMISSION

Before GIBSON, Circuit Judge, OLIVER, District Judge, and DUNCAN, Senior District Judge.

DUNCAN, Senior District Judge.

This is an action under 5 U.S.C. § 1009, 28 U.S.C. §§ 1336, 1398, 2284 and 2321-2325 and 49 U.S.C. § 17(9) to review, enjoin, annul, set aside and suspend a report and order of the Interstate Commerce Commission (called the “Commission” herein).

The Complaint requests, in addition to a permanent injunction, a restraining order to stay the consummation of the transactions which were approved by the Commission. That request was denied on September 4, 1964 because plaintiffs failed to show that specific irreparable damage would result if the restraining order were not granted. Thereafter, on September 25, 1964, acquisitions approved by the Commission were carried out.

Plaintiffs are attacking the actions of the Commission in Texas & Pac. Ry. Co. —Control—Kansas, O. & G. Ry. Co., 324 I.C.C. 309 (1964),1 permitting the Texas and Pacific Railway Company (and through it, the Missouri Pacific Railroad Company) to acquire control of the Kansas, Oklahoma & Gulf Railway Company, the Midland Valley Railroad Company and the Oklahoma City-Ada-Atoka Railway Company and further approving the resale of the latter railroad to the Atchison, Topeka and Santa Fe Railway Company. The acquiring railroads filed their applications in 1962. The Kansas City Southern Railway Company and its subsidiaries,2 plaintiffs herein, intervened and presented testimony opposing the applications at the extensive public hearings which were held by the Hearing Examiner. Plaintiffs herein filed exceptions to the Hearing Examiner’s report, which recommended approval of the control transactions subject to certain conditions for the protection of other railroads.

The Commission concluded that the recommended conditions were adequate and approved the proposed stock acquisitions in terms substantially similar to those contained in the report and order of the Hearing Examiner. Within ninety [745]*745days after the Commission’s decision, plaintiffs filed this action. For convenience, the abbreviations used by the Commission will be adopted in this opinion. Plaintiffs will be referred to as KCS; Texas and Pacific Railway Company and Missouri Pacific Railroad Company will be referred to, respectively, as T&P and Mo-Pac.

KCS does not attack the acquisition transactions in this case, but rather the conditions on which the transactions have been permitted. KCS is especially concerned with the effect the transactions will have on its rail route from Kansas City, Missouri, to Dallas, Texas. KCS, along with several other railroad companies,3 maintains train service between Kansas City and Dallas. Prior to the transactions in question, KCS and Mo-Pac had competing routes to Dallas both of which interchanged with the lines of T&P at Texarkana, Arkansas/Texas. T&P is controlled, by MoPac, which owns a majority of the former’s capital stock. KCS’s route through Texarkana was considerably shorter than Mo-Pac’s.

By acquiring control of the Kansas, Oklahoma & Gulf Railway through the T&P, Mo-Pac would gain a much more direct and considerably shorter route from Kansas City to Dallas, eliminating some 319 miles by avoiding a loop through Arkansas. The new Mo-Pac route would be, in fact, even shorter than the KCS route, and KCS feared the new route would become dominant, resulting in substantial diversion of traffic and revenue from the KCS routes. KCS intervened before the Commission, seeking protection against the possibility that Mo-Pac might close the routes to Dallas through Texarkana, which were essential to KCS’s route from Kansas City to Dallas, by cancelling the routes or closing them commercially through rate reductions over all the Mo-Pac routes or by impairment of service or interchange.

KCS sought to preclude such possibilities by imposing on the parties to the proposed transactions a condition4 “which would tend to establish permanently existing joint routes and rates with [T&P’s and Mo-Pac’s] lines, and fixed divisions of revenues from such joint rates.” The condition proposed by KCS was not recommended by the Hearing Examiner nor adopted by the Commission. Instead, the Commission imposed on the acquiring railroads seven conditions, contained in Appendix II to the Commission’s report, which are known as the “standard” conditions.5 [746]*746The first five conditions govern relations between the acquired lines and other carriers and shippers. The last condition is a reservation of jurisdiction by the Commission to modify the conditions if need arises. Condition six alone governs the maintenance of the acquirers’ routes with relation to other railroads. KCS maintains that this condition is inadequate protection against the possible effects of the control acquisition.

The Complaint in this case alleges ten grounds for setting aside the Commission’s order. However, as only one of these grounds was .briefed by counsel for plaintiffs, the rest must be deemed abandoned. Riss & Co. v. United States, 96 F.Supp. 452, 454 (W.D. Mo.1950), rev’d on other grounds, 341 U. S. 907, 71 S.Ct. 620, 95 L.Ed. 1345 (1951).

Plaintiffs’ remaining allegation is that the condition is inadequate because it is so imprecise and ambiguous that effective enforcement and protection of competition is precluded. The question presented, then, is whether the language of the condition has a sufficiently definite and precise meaning to permit effective enforcement of the Commission’s intentions with respect to the acquisition transactions. The question can be answered without resort to the record of the hearings, since plaintiffs do not attack the sufficiency of the evidence upon which the Commission found that the conditions imposed were adequate to protect plaintiffs and “other competing carriers.”

The Commission’s conclusion regarding the adequacy of those conditions must be upheld by this court if it is supported by substantial evidence and if it is consistent with applicable law.

“The function of the reviewing court * * * is limited to ascertaining whether there is warrant in the law and the facts for what the Commission has done. Unless in some specific respect there has been prejudicial departure from requirements of the law or abuse of the Commission’s discretion, the reviewing court is without authority to intervene. It cannot substitute its own view concerning what should be done, whether with reference to competitive considerations or others, for the Commission’s judgment upon matters committed to its determination, if that has support in the record and applicable law.” United States v. Pierce Auto Freight Lines, Inc.,

Related

Baltimore Gas & Electric Co. v. United States
817 F.2d 108 (D.C. Circuit, 1987)
People of State of Illinois v. United States
668 F.2d 923 (Seventh Circuit, 1981)
Illinois v. United States
668 F.2d 923 (Seventh Circuit, 1981)
Seaboard Coast Line Railroad v. United States
599 F.2d 650 (Fifth Circuit, 1979)
Interstate Commerce Commission v. Southern Railway Co.
380 F. Supp. 386 (M.D. Georgia, 1974)
C-Line, Inc. v. United States
376 F. Supp. 1043 (D. Rhode Island, 1974)
Kansas City Southern Railway Co. v. United States
346 F. Supp. 1211 (W.D. Missouri, 1972)
Pittsburgh & Lake Erie Railroad v. United States
294 F. Supp. 86 (W.D. Pennsylvania, 1968)

Cite This Page — Counsel Stack

Bluebook (online)
288 F. Supp. 742, 1968 U.S. Dist. LEXIS 10056, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kansas-city-southern-railway-co-v-united-states-mowd-1968.