279 F. Supp. 303 | S.D.N.Y. | 1967
Memorandum, Order
By a supplemental report and order on reconsideration and further hearing in F.D.No. 21989, Pennsylvania Railroad Company — Merger — New York Central Railroad Company, 330 I.C.C. 328, served June 12,1967, the Interstate Com
In an effort to introduce a modicum of order into so much of this chaos as relates to the Commission’s supplemental order in the merger case, PRR and NYC have moved that we require each plaintiff or intervening plaintiff in the instant actions to file supplemental complaints setting forth the claims now made in the light of the Commission’s supplemental report on reconsideration, direct that the complaint of any such pasrty not so amending its complaint be dismissed with prejudice, and set a schedule for responsive pleadings, brief and final hearing. There are several kinds of unfinished business in these actions. One concerns objections to the Appendix G protective conditions, now revised, whether on the ground of inadequacy from the standpoint of the three protected roads or on the ground, previously urged by B & O, C & O, N & W, CNJ, the Reading, the Western Maryland, and C. & E. I., “that these provisions created a ‘community of interest’ between the protected roads” and the merged company which would produce additional diversion, see 259 F.Supp. at 970, 976; we have been told by counsel for the N & W and
The N & W, B & O, C & O, Western Maryland, the Trustees of the C.N.J., the Reading,
The parties opposing the motion are wrong in saying these actions have terminated. The subject of the complaints of the plaintiffs and intervening plaintiffs was the Commission’s approval of the merger, as it then stood or as it might stand in the future. All that we had before us for decision last fall and the Supreme Court had before it on appeal, see 386 U.S. at 378, 87 S.Ct. 1100, were motions for interlocutory relief, to wit, temporary injunctions of the merger pending the reconsideration the Commission had already granted; the actions could not proceed to final hearing until that had been completed. The Supreme Court made it clear that the issues of “the validity of the merger, the special conditions of Appendix G, the modified order of the Commission, or the peripheral points posed by the various parties,” ibid., remained for final determination in these actions after the Commission had made its supplemental order on reconsideration. Compare Texarkana v. Arkansas Louisiana Gas Co., 306 U.S. 188, 203, 59 S.Ct. 448, 83 L.Ed. 598 (1939); New York Central R. R. v. United States, 207 F.Supp. 483, 498 (S.D. N.Y.1962). Indeed, the position taken by N & W and the roads associated with it in opposition to the motions of PRR and NYC contrasts rather strangely with their own request for further injunctive relief in the actions brought by them in this court. If the actions remain pending for the grant of relief which the N & W and its allies want, especially for what, as will hereafter appear, we consider relief that may go beyond the Supreme Court’s mandate, they are pending for other purposes as well.
The idea that litigants challenging an order of a federal administrative agency may invoke the jurisdiction of one federal court, require it to expend
As to the argument concerning ripeness, while it is theoretically possible that the protective conditions may never need to be invoked, realism suggests the contrary. If the inclusion order is temporarily enjoined as N & W is asking in its suit in the Western District of Virginia, some time would necessarily elapse between that order becoming final and effectuation of the inclusion of each of the three roads. Stockholder assent can hardly be obtained until the terms become certain. And further problems might arise if inclusion of D & H and B & M were prevented by lack of stockholder approval on the part of E-L or, in the case of B & M, of either E-L or D & H. See Appendix F to Supplemental Report in F.D. No. 21510, General Terms and Conditions 1 and 2. Furthermore, as will hereafter appear, we are reserving the question how far, if we find the supplemental report and order in F.D. No. 21989 to be valid, we will extend the injunction during review of the inclusion order. In any event the Supreme Court’s decision requires that the parties and we should make whatever sacrifice there may be in what might turn out to have been an unnecessary task of reviewing
We therefore set the three actions seeking to enjoin the orders in F.D. No. 21989 and 21990, to wit, 66 Civ. 2860, 2903 and 2914, including the complaints of intervenors, for final hearing on September 18, 1967, see F.R.Civ.P. 65(a) (2). Each plaintiff or intervening plaintiff in such actions shall file and serve on or before July 17, 1967 a supplemental complaint setting forth in what respects it objects to the order in F.D. No. 21989 as this now stands and what further relief it seeks. In the absence of good cause shown at the said hearing we intend to dismiss with prejudice the complaint of any plaintiff or intervening plaintiff which has not filed such a supplemental complaint. Responsive pleadings shall be filed and served on or before July 27. Briefs of plaintiffs and intervening plaintiffs shall be filed and served by August 8, answering briefs August 29, and reply briefs by September 12, 1967.
II.
N & W, B & O, C & O, and Western Maryland have moved that the order entered in these actions on remand from the Supreme Court on April 28, 1967, should be modified by expanding the reference in paragraph 3 to the merger of PRR and NYC authorized by the ICC’s orders in F.D. 21989, dated April 6 and September 19, 1966, so as to include the supplemental order on reconsideration served June 12, 1967. This motion must be considered in the context of the language in the same paragraph that the injunction should continue “pending the completion of the proceedings directed by the Supreme Court.” The movants contend that such proceedings include not only proceedings for the judicial review of the order on reconsideration in the merger case, F.D. 21989, which we have discussed above, but also the order of the same date in the N & W inclusion proceeding, F.D. No. 21510.
Three different positions as to our duty under the Supreme Court’s mandate emerge from the briefs and argument. The movants’ position, supported in considerable degree by the United States, is that the injunction must remain in effect until every phase of the orders in both dockets has been finally passed upon by the Supreme Court.
All these positions find some support in the majority opinion of the Court. The I.C.C. and others joining with it emphasize the Court’s narrow statement of its holding, “We hold only that under the uncontradicted findings of the Commission it was necessary for it to conclude the inclusion proceedings, as to the protected railroads, prior to permitting consummation of the merger,” and its equally narrow definition of the “sole question before it,” 386 U.S. at 378, 87 S.Ct. 1100, another statement which we quote in the margin;
*309 “The judgment of the District Court is reversed and the cause is remanded with instructions that it be remanded to the Commission for further proceedings not inconsistent with this opinion.” 386 U.S. at 392, 87 S.Ct. at 1110.
The parties favoring a broader injunction point in contrast to another passage which we quote in the margin
We find it unnecessary to decide among these contentions at the present time. Enough has already transpired to suggest that, even with a far greater degree of cooperation in carrying out the Supreme Court’s instructions than has thus far been manifested, finalization of the inclusion order may prove a much longer and more complicated task than the majority anticipated. In addition to N & W’s basic attack on the order, none of the four affected carriers except E-L is satisfied with the financial terms. There is also the possibility, already mentioned, that once these are finally set, rejection by E-L’s stockholders would prevent inclusion of D & H and B & M, and rejection by D & H’s would prevent the B & M’s inclusion; a carrier suffering non-inclusion in N & W as a' result of rejection by the stockholders of another would then be entitled to seek inclusion in the PRR-NYC system, with more hearings before the Commission and further judicial review. All this could take years. We do not read the Supreme Court’s opinion as directing us here and now to issue an injunction for so long a period, which might have such serious consequences not only to the PRR and NYC and the public served by them but also to NH and the four states heavily dependent upon its service.
On the other hand we do not believe it would be proper to permit consummation of the merger without our hearing and determining objections to the supplemental order in the merger case, F.D. 21989, itself. Enjoining consummation until that time will truly involve a relatively short delay; indeed, if petitions for re
We therefore modify paragraph 3 of our order of April 28, 1967, to read:
“3. The orders of the Interstate Commerce Commission entered on April 6 and September 19, 1966, and served June 12, 1967, insofar as they authorize immediate consummation of the merger between the Pennsylvania Railroad Company and the New York Central Railroad Company are enjoined pending the final determination of these actions by this Court and thereafter for such further time, if any, and to such extent and on such terms as this Court may then direct. The period of 180 days fixed by the Commission in its order served June 12, 1967 for exercising the authority there conferred shall not begin to run so long as such injunction remains in effect.”
In order to expedite determination whether a further injunction should be issued in our decision in the fall, all parties seeking such relief shall file and serve applications supported by appropriate affidavits and briefs not later than September 5, 1967; opposing affidavits and briefs shall be filed and served not later than September 14. We shall expect such affidavits to inform us as to the then status and future time-table of proceedings for review of the inclusion order (including the possibility of separate and expedited determination of the validity of the direction for inclusion, as distinguished from the terms); the grounds asserted for invalidating that order in whole or in part and the answers thereto; the views of the three protected roads and the United States whether and why a further injunction is needed;
The Clerk shall enter this as an order.
. We are advised that the Borough of Freedom does not intend to participate further.
. The Beading has moved to “quash” the motion; we deny this.
. Once we entertained E-L’s suit to enjoin the merger, actions in other districts seeking the same relief might well have been stayed by those courts on the United States’ stipulating not to contest venue here. See Kansas City Southern Ry. v. United States, 282 U.S. 760, 763-764, 51 S.Ct. 304, 75 L.Ed. 684 (1931); New York Central R.R. v. United States, 200 F.Supp. 944, 950-951 (S.D.N.Y.1961).
. Counsel for the United States reserved judgment on whether the injunction would have to continue during litigation only on the terms of inclusion; he thought “there might be some latitude” on that score.
. It may be that the Trustees of NH do not join in the acknowledgment.
. “In view of the patent invalidity of the order permitting immediate consummation of the merger and in light of the present status of the litigation before the Commission, we can only conclude that it is necessary that the decision as to the future of the protected railroads and their
. “ * * * We note and give weight to the estimates of the Commission that the inclusion proceedings of the three roads in the N & W should be concluded in a ‘relatively short time.’ Our remand should, therefore, entail only a very short delay before the Commission. If its order is attacked in court the hearing there can be expedited, as was this one, and an early determination made. We do not believe that this is too high a price to pay to make as certain as human ingenuity can devise, a just and reasonable disposition of this matter for all of the parties. After all, it is the largest railroad merger in our history and if not handled properly could seriously disrupt and irreparably injure the entire railroad system in the northeastern section of the country — to the great detriment not only of the parties here but to the public convenience and necessity of the entire Nation.” 386 U.S. at 392, 87 S.Ct. at 1110.
. They also stress the language in the passage quoted in fn. 6 as to “the future of the protected railroads being finally decided.”
. We emphasize this since no injunction of the merger pending review of the inclusion order would seem to be justified in the interest of the N & W and still less in that of the B & O, C & O or Western Maryland, which have joined in its motion; the interests that would justify a further injunction would be those of E-L, D & H and B & M and the communities they serve.