Oscar Gruss & Son v. United States

386 agricultural

preme ing, purpose Court held an the sole of which is in con- marketing dairy composed statute, association of flict with a valid is not incon- guarantees farmers Anti- had violated the Sherman sistent with Constitutional get attempting 10, speech. trust Act Local dealers freedom Union No. Journeymen purchase milk from the association. United Association boycott 192, dairymen employed Plumbers, etc., Graham, The and ex- 73 U.S. pressure 585, (1953); erted other economic dealers S.Ct. L.Ed. Interna- goal. activity Teamsters, attain their This tional Brotherhood of etc. v. legitimate Vogt, Inc., 284, 1166, outside the Court held 77 S.Ct. objects cooperative (1957). to constitute of a L.Ed.2d 1347 of the Act. violation Sherman satisfactorily Plaintiff has established engaged in activi- defendants were Act, As a violation of that it boycott designed which constitute a ties employed matters not means were monopolize interstate com- to restrain peaceful persuasion. those of Paramount Anti- of the Sherman merce in violation Pictures v. United Motion Picture Thea reason, plaintiff’s trust For law. Owners, 1937). (3 tre 93 F.2d 714 Cir. injunction permanent prayer for a Merely picketing because defendants’ in must be these defendants activities speech volved the use of or was viewed granted. Therefore, plaintiff counsel “telling story” them as their to the findings suggested to file directed public, necessarily their activities are not and a form of of law fact and conclusions protection entitled to the of the First Opinion. with this decree in accordance Picketing Amendment. is more than speech; speech particu it is mixed with Building Service, etc.,

lar conduct. Un

ion, Gazzam, Local 262 v. 339 U.S. (1950); 94 L.Ed. 1045 Cox Louisiana,

v. State of 379 U.S. (1965). pick S.Ct. 13 L.Ed.2d A potential inducing et line has action beyond message pickets convey. Plaintiff, SON, OSCAR GRUSS & very purpose picketing The is to exert v. produce results different influences UNITED STATES of America and In- from the usual means of communication. Commission, terstate Commerce Hughes Superior Court, v. Defendants. 94 L.Ed. 985 YORK, The NEW HAVEN AND NEW Indeed, purpose picketing HARTFORD RAILROAD COMPANY opera- here was to induce the retail store FIRST BONDHOLD- MORTGAGE 4% agree stop handling prod- tors to Otto’s COMMITTEE, Plaintiff, ERS many ucts and it was instances success- pickets ful. The wanted not to tell In- UNITED STATES of America and story public, they their wanted also terstate Commerce stop shopping the customers from Defendants. stop the stores and in turn the stores Nos. 66 Civ. 3425. dealing put To it anoth- Otto. way, objective picketing er States District United Court contrary provi- achieve result S. D. New York. sions of the Sherman Act. The Nov. picketing has made clear that integral employed part of conduct in violation of a is not enti- valid statute immunity granted

tled to the other forms expression. Giboney Empire Stor-

age Co., supra. enjoining picket- Isaacs, (My- Myron City New York S. Gartner, New

ron Isaacs and Paul M. S. counsel), City, plaintiff York for Oscar Son. Low,

Migdal, Tenney Glass, New (Lester City Migdal, York Lawrence C. Handelman, Pollack, W. and David Y. City, counsel), plaintiff New York for Bondholders Committee. C., Ginnane, Washington, D.

Robert W. Com- defendant Interstate Commerce mission. States, F.Supp. Worcester, Boston, R. R. United Mass. Sullivan & Court, Jr., appeal Blasberg, (Joseph Auerbach, Arthur argument January Boston, Bleakney, Jr., set and Robert G. merger stayed Mass., Peet, until counsel) determina- M. New Robert NYC, City, PRR the Court. and the

York Moore and James W. Conn., Haven, Blanchette, Trustees of de- NH have intervened as Robert W. join intervening fendants the Interstate Com- Trustees of defendants grant opposing York, merce Commission in The New and Hart Haven New injunction. temporary of a The Com- ford Railroad Co. 12(b) mission has under Rule moved Boardman, Conboy, Hewitt, O’Brien complaints; dismiss the NYC and PRR Cousins, (Windsor City New York F. relief, have moved for same also Mountan, Philadelphia, Pa., David and J. asking summary judgment for Jr., City, counsel) for in- New York Rule 56 on the basis the record in tervening Pennsylvania Rail- defendant merger proceeding before the Com- road Co. reorganization pro- mission and of the City Dwyer, Gerald E. York New ceeding of NH under of the Bank- 77§ (James Gray Shapiro, B. Jerome H. and ruptcy Act for the District Court counsel), City, New York inter- Appended Connecticut. to the memoran- vening defendant New York Central dum of the NH trustees is an affidavit of Railroad Co. outlining steps their counsel the various FRIENDLY, Judge, Before Circuit copies taken them with of relevant LEVET, WEINFELD and District papers, which also consider on Judges. summary judgment. the motion for approving The Commission’s order FRIENDLY, Judge: Circuit following contained the condition In these actions the United respect NH, 553: I.C.C. at States and the Interstate Commerce Com- Pennsylvania “8. The New York mission, Son, Oscar which Transportation Company Central shall acquired $10,500,000 some of the First required to include in the trans- Mortgage Refunding bonds of 4% York, Haven, action all the New York, The New New Haven and Hart- Company Hartford Railroad Company (NH), ford Railroad and a —the passenger operations being inclusion of claiming bondholders’ committee to have findings and determina- authorizations from holders of some tions of the Commission as set forth $20,000,000 bonds,1 of such which has in Finance Docket plaintiff No. 23831 also issued intervened in Gruss’ action, enjoin simultaneously report upon seek to consummation with this — of the New York Central equitable such fair and terms as the Company (NYC) Railroad Penn- with the parties may agree subject ap- sylvania Company (PRR) Railroad [the proval Bankruptcy of the Court and proposed merged company being here- the Commission. Within 6 months Transportation after referred served, report after the date Company], as authorized the Commis- parties shall file with the Com- report April 27, 1966, sion its served approval, plan mission for its report 327 I.C.C. recon- such inclusion. In the event September sideration parties agree- to reach an are unable I.C.C. 304. A in which this decision (and subject approval ment court, by vote, refused to en- divided Court) Bankruptcy such inclusion shall join the instance of consummation at equitable upon competing railroads, such fair Erie-Lackawanna many way telling deposited authoriza of these no how there is Since the bonds were tions remain valid. may whelming latter likelihood is that Commission and conditions as the impose. significant competitors, prob- will remain ably ****** components of Norfolk as future system, & Western see Erie-Lackawanna hereby “Jurisdiction is reserved F.Supp. States, supra, 259 R. R. v. United purposes. such Consummation 4; although at n. merger by applicants shall indicate peti- entertain reserved complete their full and assent to these Trans- tions for their inclusion in the requirements.” portation Company of denial in the event Although intervening the defendants and pending petitions for inclusion their case, Erie-Lackawcmna defendants including Western, the Norfolk & 327 I.C.C. NH, four states served no one could to be have believed argued to us that this condition likely ex- outcome. In contrast the strong public con- one pectation was that become NH would favoring merger and siderations Company— part disagreed, no Com- one and the general agreement indeed, there rather entirely inadequate. mittee claim it is operations that it must it is to continue They point passage in Com- to a the at all. It is unrealistic thus somewhat report, mission’s 522- 327 I.C.C. at suppose Transportation that the Com- 27, where, discussing after the more pany immediately will embark on a whole- limited recommendation of the hear- campaign sale from future diversion a examiners on of inclusion the component, breaking historic bonds the NH, the Commission found “that forged initially NH between PRR and merger, complete this without geography millions of and welded NH, would not be consistent with expenditures, dollars of renew public interest, and, accordingly, again hence; plain- them some and time require will all Haven railroad” the New hearing findings tiffs’ on reliance —passenger freight service— well as examiners and Commission with re- applicants’ “to be included in the trans- merger spect to the of the drastic effects Yet, say action.” 327 I.C.C. at 524. any require- on NH in the absence plaintiffs, despite and further wholly misplaced. ment of inclusion is finding Transportation that “the Com- strong they argue that, despite But pany, routings improved with new and prospect of inclusion of in the Trans- NH service, undoubtedly could wean substan- portation Company, the latter neverthe- away tial traffic from NH and leave engage in less has an some incentive already that perhaps moribund carrier although PRR, NYC and diversion since situation,” an irretrievable 327 I.C.C. agreed upon the NH Trustees have imposed the Commission no such purchase price, open this is issue still protective traffic and financial conditions NH in view of dissatisfaction of prior for the interval to actual inclusion freight bondholders, of NH and diversion — probably long fairly NH one competing revenues to service NYC’s reorganization problems view of under Transportation Com- would benefit the pany — respect as it did with to the Erie- directly by justifying both and Lackawanna, the Delaware & Hudson unduly plaintiffs low what figure consider They and the Boston & Maine. ask agreed. to which the Trustees consequence enjoin that we consummation Moreover, incentive find a further effectively of the until NH is possibility NH diversion in the protected by actual inclusion. may included; although never NH be seeming anomaly Much of the dissolves Transportation has a call on Com- quite speedily. practical From stand- pany, exercise this decision whether to point relationship the interim of the reorganiza- depends on the course of the Transportation Company to NH will altogether bankruptcy and relationship court different from its protected persuaded, compelled, liquidate three lines. The over- NH sharply rather than cause sold to the differentiates NH from the it to be three going protected being why queried Company con- as a roads. On adequate plain protection, cern. this was not attorneys tiffs’ answered even argument seem would though power the Commission had the powers sufficiently answered indicated, we have no assur there was 5(2) under § the Commission vested fully, this, ance it would use or use it It Act. Commerce Interstate especially position view of the decades four settled been already agreement NH Trustees that pred (b) 5(2) and requirement of § concluded PRR them NYC and find Commission ecessors adequate protection; they point confers just and to be of a conditions possibility ed also to the that bondholders duty “the makes it reasonable might prevail reorganization court public protect both liquidate NH in on its order to realize to withhold private interests” holdings, real in which valuable estate other approval of a transaction 5(2) acquisition no event would under § finds public it unless wise All this notion occur. reflects a mistaken consideration, con “that rights. of NH’s is not The Commission just reasonable” are thereof ditions protect under a mandate all secur parties of their and holders grant of diversion as a condition to the Ry. Cleveland, C., L. & St. C. ities. immunity laws, the antitrust (6th Cir. Jackson, 22 F.2d 510-511 think; seem to is concerned Lowden, 308 1927); see United States v. only with diversion on the as this bears 248, 1, L.Ed. 225, 84 233 n. 60 S.Ct. U.S. “public interest,” concept “has and that United (1939); Schwabacher 208 transpor adequacy direct to relation of 198-199, States, 182, 68 S.Ct. U.S. 334 service, to conditions tation its essential (1948); 3-A Sharf 958, L.Ed. ap economy efficiency, and to of man, Commis Commerce The Interstate propriate provision of trans use and best of this Combination 466-72 sion facilities,” portation York Central New express au general principle the with Corp. States, Sec. v. United (d) 5(2) given to re thority by now § 45, 48, 77 L.Ed. 53 S.Ct. merging other include quire carriers to (1932), an ele with investor equitable “upon would terms” railroads protection ment insofar will as its Commission, surely so ad empower the goals. attain Decision serve to these price of vised, acquisition the to base degree protection afforded on the of to be adversely upon affected a not NH value , charged agency in is thus vested the merger by itself —whether the NYC-PRR transpor responsibility with for the using by property of the value of the system, subject only usual tation by base, merger ad as a the date judicial York Cen limited New review. earnings subsequent justing to restore supra, Corp. States, tral Sec. v. United n diverted revenues, by appropri other 29, or at 45. We would 287 U.S. means; availability relief statement, such agree Judge ate the with Anderson’s provides, 9.2, agreement aggregate that the $1,750,000, (b) 2. The to the ed by: price purchase ag- shall increased such deficits shall be limited to the equal aggregate proceeds gregate “An amount from all the net freight Property dispositions the deficits in the New Haven’s or other sales railway operating pe- by during service net income made Haven years subsequent January 1,1965 for the calendar to the earlier riod to 31, partial Closing (cid:127)December and for or December Date year occurs, any Closing (c) in which the Date such the amount of any period computed but in no event for subse- in a manner deficit shall quent 1967; provided, in which manner December consistent however, purposes that for of this Sec- such deficit was determined 9.2.4, any reports (a) deficit for a for their annual for such Trustees partial year or calendar shall limit- the New Haven the I.C.C.” (1930), Pittsburgh, authorizing proceed L.Ed. 980 Trastees minority Wheeling is stockholder in the before the passing Erie, sought enjoin agency Lake “to determine an I.C.C. authorizing Wheeling upon plan whether order to aban- for the inclusion passenger Cleveland, [negotiated by provisions Trus- don its station in these Ohio, adequately protect which was to ter- the estate be sold to new tees] building any company, possible minal time between and to use losses temporary fa- mer- new terminal and certain consummation of the Penn-Central ger Haven, pending completion. cilities and inclusion the New The com- plaint required.” alleged, alia, price inter whether additional terms are being by Wheeling obtained in- fact, however, In do not need adequate and that had decide whether with re- the condition holding it had no erred spect gives adequate of NH question. The Court to consider protection since, view, plaintiffs in our Pittsburgh “had no stand- held that the position are not it. For now in a to raise bring set aside suit as one to we read the decisions of the 281 U.S. an order of the Commission.” holding application Court as an Although 486, 50 S.Ct. at 380. carriers the interests two Pittsburgh before had been an intervenor represented of other are to be carriers Commission,3 managements Brandéis Mr. their not indi- Justice contrary said, despite arguably vidual investors. ear- Chicago Virginia Ry. him in The Pittsburgh lier statement In & West States, Case, United 281 U.S. S. Junction possible did not NH Bondholders Committee It ourselves. is therefore not merger pro- grant participate in the PKR-NYC relief which the immediate July 11, way. ceeding any But, until Not Gruss seeks. as concluded apply prior report, withholding public for leave to Son ben- did filing pe- purpose through for the efits otherwise intervene obtainable asking the Com- tition for reconsideration warranted. not modify “Although requested No. 8 “to re- mission to quire Condition the relief now Gruss, justified, New Haven at the a substantial inclusion of the undoubtedly precedent securities, a condition to in NH time of and as investor Pennsylvania disposi- merger the Cen- an interest in the ultimate and has opera- tral, holding hearings thereon, bankrupt and of tion carrier’s further merger Therefore, postponing said tions. to consummation of obviate the need petition partici- completion permit for another in order to to of such hear- pate ings proceeding, in the inclusion we will and the inclusion of the New Haven pre- permit Gruss to intervene and be- time of and as a condition now at party herein, deny report spe- merger.” a come but to In its on cedent said sought petition, in cific relief its with- reconsideration the Commission dealt with prejudice “Preliminary seeking heading to Mat- out such relief this under the ters,” any proceed- saying, as it deems warranted in 328 I.C.C. at 306-07: ing involving press op- seeks intervention to inclusion of NH’s “Gruss NH erations.” the immediate inclusion of merged system. in the plausibly argues prior report, In The acknowledged op- party this did of NH not make & Son a to many proceeding problems, leading raises includ- the sought here erations order ing to those related to section be reviewed but in subsequent which, Bankruptcy proceeding Act, “inclusion” and that their resolu- require per- 9, 1966, tion would time and much order dated November part pre-hearing of been set sonal endeavor on the all those conference on interested, precluding 19, hearing 1966, and for thus immediate December January 16, By in inclusion. October how- which the Commit- ever, parties sought concerned to file tee has are now to intervene. How- Virginia ever, Pittsburgh, approval, plan for our an inclusion & West covering opinion plain and conditions makes it that even if Gruss agreed upon, intervenor, in and the absence of such was an that would not be filing, a we have the re- decisive in favor. his served to set the terms and conditions leasing agree- (1924), Ct. 68 L.Ed. that such class created Pitts- did not entitle the lessors and lessee.” 54 intervention ments between burgh agreed, independent Supreme “to suit F.2d The institute an at 126. Court to order in 19-20. This line of dis- set aside the Commission’s U.S. at same resulting Alleghany Corp. tinction the absence of actual or threat- was drawn in .legal injury Co., ened Breswick & to it.” 77 S.Ct. (1957), this, claim 1 L.Ed.2d 50 S.Ct. at 381. As to “the where Wheeling’s Court held that common the order stockholders threatens Alleghany consequently ap- Corporation stability, financial did not have minority standing pellant’s judicial to obtain of I. financial interest as a review authorizing merger stockholder, C.C. orders rail- is not sufficient to show Alleghany legal injury necessary parent roads whose common threat large determining bring to was a entitle it to aside stockholder and a suit to set Alleghany the order. was This financial interest does a carrier regulation by every not differ from that of investor the Commission and there- Wheeling exempted fore Com- securities or from an invest- the Investment pany Act, any or’s interest but that did have stand- business transaction corporation. lawsuit of his Unlike attack further order in the exer- reorganization, juris- cise of orders entered the Commission’s in cases of asserted authorizing Alleghany acquisition and in diction some con- to issue a cases preferred by another, trol of new convertible one carrier the order stock which plaintiffs unfairly claimed would attack deal with the in- dilute does not Alleghany. injury terests of their stock interests investors. feared is the indirect result harm which governed by Plaintiffs’ case every stockholder from harm to the Pittsburgh Virginia rul & West and the corporation.” 281 U.S. at ings respect Breswick with phrase at 381. The cases” “some Alleghany. status referring illuminated a footnote proposed The PRR-NYC considering various I.C.C. decisions any parties did not involve transac acquisitions security fairness hold- relating tion to NH. it threatened While acquired. ers of the roads to be injury NH, posed no “individualized years later, court, speaking A few threat,” 353 U.S. at through Judge Mack, further elucidated plaintiffs distinguished from all other applied the distinction the claimants the NH estate. Protec had York Central drawn. New all interests of States, Corp. 54 F.2d Securities v. United other NH creditors and stockholders was (S.D.N.Y. 1931). That suit attack- responsibility and is the of the Trustees authorizing acquire ed an proceeding. order NYC to Trustees in such § 77 by proceeding control lease of railroads powers various a have all of a majority plaintiff which it Bankruptcy Act, was a trustee under 44 of the § minority stockholder; pro- a (2), by the leases 77(c) op and thus are “vested § guaranteed payment vided for of annual eration of law with the title of the bank directly minority rupt filing stock- dividends as of the date of the * * holders, nothing paid petition 70(a). the les- Any with rule Judge permitting sors themselves. Mack ruled that or of creditors stockholders a Pittsburgh Virginia by merger West proposed railroad affected a plaintiff’s decision a stock- interpose as of other lines to themselves ring merger holder in did the lessee not invest it with proceeding the main standing injury impracticable but its claimed as a stock- would be from an admin- did, standpoint. proceeding holder in the lessors since that istrative Such a through merely sufficiently complex interest “is not derivative is without the Com- stock, ownership reviewing an inde- having of but is mission or a court also pendent injury among conflicting to itself as a member of a to choose views of relating (a) position security lines, with third of connection holders of some by any party, favor, regarded taken other the New Haven with whom (b) of opposed it or a failure of Examiners of and still others others whom varying to find that Haven I.C.C. either the New who conditions of sorts. wanted adversely claiming should included in or that such carrier to be af- A by merger speak is for later to be retained at this fected must by any petition stage single voice; determination of the New with a what the voice inclusion, provided, say normally how- Haven for such shall is determined in ever, any statement, stipulation by such case of a solvent its board of carrier directors, or other document made or filed shall be the case of an insolvent provisions with the and intent consistent one to instruction its trustees reorganization and the memorandum definitive court. While it is agreement provided This, pragmatic herein.” true in a trans- sense say, may and the Trustees do not action affect “the interests of in- required dispute, carrier, the latter abandon vestors” in the third so does significant way every their earlier insistence on actual inclusion in the does, precedent. important as a condition one transaction and as the Pittsburgh Virginia & West case authority, not cited to is indeed There surely re- did. The Court’s may agency us, administrative that an quirement stringent; more order speaking on be a stockholder as consider standing investors un- to have the order corporation finds if it half of a merely der must attack not affect but prevented do corporation has been “deal with” their interests —their securi- abuse so another stockholder’s ties, rights, priorities did so on —as equity do power, just as court of the order in the New York Centred Se- R.W. Grace & in a action. derivative curities case and the order authorizing Cir.), (2d CAB, cert. 154 F.2d Co. v. Alleghany preferred to issue convertible Airways granted Pan American sub nom. stock, or as the instant order did with Co., Air Corp. R. Eastern W. Grace respect stockholders PRR and Co., 328 U.S. Lines W. R. Grace NYC. (1946), dis 90 L.Ed. 1608 S.Ct. n Plaintiffs contend that even this be moot, W. Air Lines v. missed Eastern so, they standing have because the Trus- Co., S.Ct. Grace R. tees NH can have disabled themselves from But that case 92 L.Ed. 401 Although effectively representing plaintiffs here. not avail the bondholders’ Understanding was This interests. the Memorandum claimed be true be- agreement and filed with cause the the Trustees announced the Trustees with reorganization PRR court on March prop- NYC and inclusion of the the Trustees’ erties of NH in 1965 and annexed Com- pany, initially on Au embodied in a brief filed Memoran- exceptions 22,1964 gust 16, replying dum dated December and Febru- ary 5, 1965, hearing report, no com made it a examiners’ condition of the purchaser’s obligation plaint abandonment to the Trustees’ close any a con former their on inclusion as “shall have insistence made filed statement, stipulation precedent further dition reached Commis or other petition pending document sion’s until Penn-Central ears merger proceedings W. R. July 11, I.C.C., If assume the 1966. the before law, any judicial person thereof, in Grace decision to be sound review other than Substantially provision the 4. the imminence until then because of the same is now agreement report, hearing § 11.7 the definitive filed dated which was examiners’ April 1966, 21, 4, as October amended 29, also advised March 1965. Counsel copies the memorandum were persons on court’s by sent to all the service 5. We were advised counsel for the NH list, including delayed Trustees that announcement was the Committee. desiring extraordinary precedent, this relief from no such contention was before agency promptly; an must report act otherwise the when Commission it made its April 1966, there would be no plaintiffs end to administrative knew or proceedings already unduly prolonged. ought Any to have known this. entitle Moreover, decisive, even more what- ment of the to the relief corpora- be the ever tion, case to a solvent now seek as must on therefore rest Gruss’ having petition reconsideration, can be no compare there occasion for agency Ry., administrative determine United States Great Northern whether trustees shall be ousted from n. 72 S.Ct. 96 L.Ed. speaking estate; bankrupt power (1952). for a That would not suffice if job to instruct them or turn over the the Commission refused to consider the exclusively petition to someone else is vested on the basis that the issue had bankruptcy the court. report been decided the initial no when seeking one was inclusion of NH as a con Beyond this, plaintiffs pre all are precedent, dition was too that it late advancing many cluded from if all not the reconsideration; on raise the issue presented that were to us contentions perform the Commission to be able reviewinjg rule a court adminis assigned by Congress, it must tasks not, trative action will indeed save ex authority to after which have arguments, set a date traordinary may not, circumstances con save those which could ground timely pre sider a that was not before, have made must end. The been agency. Unemployment sented to the supplemental report of the Compensation Comm’nof Alaska v. Ara supra, having see note can be read gon, 329 U.S. 67 S.Ct. just But read said that. even if we (1946); L.Ed. 136 Federal Powers Com report generously plaintiffs, more Co., mission v. Colorado Interstate Gas only presented issue which 348 U.S. 99 L.Ed. 583 Commission was that (1955). While the Interstate Commerce precedent made a condition to consumma provision Act does not contain the on that suggestions, many any tion. regulatory score found in Gruss never made federal statutes, substantially “the advanced, law is that NH such as here those happens same whether or not it to be em protection similar should interim receive statutory provision,” bodied in such a Erie-Lackawanna, to that accorded the Davis, Administrative Law Treatise § Maine, Delaware Hudson and Boston 20.06, p. (1958). The contingent or that consummation be made applied principle usual to the Inter accept Transportation Company’s on the state Commerce Act in United States v. subsequent NH or so all losses of L. Lines, Inc., A. Tucker Truck much to stem of them could be shown 97 L.Ed. 54 freight from revenues diversion practical necessity generally barring merged company. Hence party obtaining judicial review open any issue which is view the questions properly pre that were not postpone for the agency refusal to consummation hardly sented could be bet long necessarily ter pres period illustrated than will the belated almost plaintiffs’ entation of claims required dispose com appli of the inclusion plicated pending case which has been cation, complicated as that is at years. more than four and a half problems tendant Bank 77 ruptcy Although Act, and on this Trustees of NH had ini tially sought reasonably powers.6 inclusion as a condition acted and within petition 6. Gruss’ refunding mortgage, reconsideration did were modified so Company claim duration of the inclusion would proceeding greatly properties would shortened if to that take over purchase agreement, pro- lien, instead of which then “could be satisfied viding payment bankruptcy proceedings for sale free of the lien the first the

395 plain R. R. United as and Erie-Lackawanna well this further reason as For standing, the Commis- occa In the Erie case there is no States.1 tiffs’ lack of public re- found the with re sion their contentions sion to discuss quired protection spect Paper of the three carriers Joe v. Atlantic to Co. St. merg- R., the adverse effects R. Coast Line 347 U.S. saying er,2 (1954), beyond and as a of consummation 710 condition L.Ed. imposed specific protective premature terms which at this it to conclude would be my subsequently parte, juncture in revoked ex Joe decision either that the St. adequate supporting find- necessarily precludes ultimate view without ,to ings, Company fu- left for as one condition and of NH in the Transportation Company as The must ture to others.4 the determination originally required protect NH, apparently, deline- and conditions as to qua long plaintiffs’ view, oper the Commission were sine railroad ated so merger. continues, turn out non the ation if Joe should St. to that result. have In instant case the Commission the Summary judgment will therefore overriding public interest found that complaints. dismissing entered Haven, requires inclusion of New but temporary in- Treating requests for a particu- parties to themselves the left embracing junction the lesser relief inclusion, lar terms and conditions of appeal pending stay of consummation subject approval the Commission to aof Supreme in the event Reorganization Court.5 Should and conscientiously grant denial, we cannot parties agree, fail the Commission to in Vir- laid down criteria this impose terms retained ginia v. Federal Ass’n Petroleum Jobbers the consummation and conditions and U.S.App.D.C. Power constitutes Penn-Central (1958) and Eastern F.2d 921 addition, thereto; the matter is assent CAB, Lines, 261 F.2d 830 Inc. Air approval by the Reor- still 1958), (2d we summarized which Cir. ganization Court.6 applied action. Erie-Lackawcmna recognizes Commission already stayed Moreover, undoubtedly merger “could Penn-Central January until away from wean substantial traffic Court, appeal to the should already moribund Haven leave stay. ample apply for a time to there have perhaps situ- an irretrievable carrier is so ordered. It as- ation.” Inclusion New Haven freight adequate passenger serv- sure Judge (concur- WEINFELD, District overriding public inter- ice reflects ring). The future determination est.8 join opinion of the Court. particular I will not affect terms thereof However, appropriate interest, although to note public I deem it sure case security holders, distinction between additional creditors and others who equitable equiv- S.D.N.Y., F.Supp. 964, of its the bondholders 1. 259 October ** understand We do not alent 1966. delegate Commission could how the (1966). 2. 327 I.C.C. bankruptcy responsibility to court Transporta- pass (1966). on the consideration the 3. Id. at Company pay, see Sehwabacher (1966). 4. 328 I.C.C. 329 States, supra, at 197- v. United 966-967; (1966). 5. 327 I.C.C. merged com- is bound to insure Ibid. pany with an excessive is not burdened obligation just toward NH as much as (1966). 7. 327 I.C.C. 522 adequately compensated. NH is see that proposal than we If the is more feasible 8. 327 I.C.C. 526-27 discern, raise it now Gruss is free to proceeding. the inclusion

have a financial stake in New Haven’s

existence UNITED STATES of America will affected. If creditor interests other are dissatisfied the terms and conditions out worked Mary LOWERY. Reorganization Trustee, there is the Crim. No. 1105-65. protection by double-barrelled the Com- United States District Court Reorganization mission and the Court. District of Columbia. if, And unrealistically, even assume 24,May 1966. that both the Commission and the Reor- ganization upon Court will foist these plaintiff bondholders terms detrimental them,9 pub- it does not follow that lic interest served Haven will adversely contrary, affected—on the not to include the Line in the only lead conse- demise and the quent elimination of its service

public, may totally but well be destructive

of the financial interest of some classes

who have a stake in its survival. hand, Erie,

In on the other left for future determina- conditions had, my bearing opinion, tion upon a vital terms, public interest. Those

according essen- were protection

tial for car- of the smaller

riers, shippers, passengers and revoking By

communities serve. adequate findings sup-

them without change port position, the Commis- finding sion undermined its that the own public was consistent with the safeguards pro- if the were ; by brought ques-

vided its action it into validity authorizing

tion the of its order merger.

immediate consummation of the

By leaving for further consideration the previously

terms and conditions it held consummation, exposed

essential to it during period three carriers the mat-

ter would consideration

same adverse factors it found militated merger, pro- adequate absent In tective I terms. circumstance BAZELON, Judge. questioned power Chief Circuit of the Commission 5(2) (b) under section of the Act10 to payment compensation defer until after consummation deter- total amount of which been $902.50 mination of approved by terms “found disap- essential val- the District merger.”11 proved idate this to the extent that exceeds $500. 77(e) (b). Bankruptcy 5(2) Act, 10. § 9. Cf. U.S.C. 205(e); Paper U.S.C. § St. Joe Co. Lines, States, Erie-Lackawanna R.R. Atlantic Coast v. United S. supra p. P.Supp. note Ct. 98 L.Ed. 710 968 of

Case Details

Case Name: Oscar Gruss & Son v. United States

Court Name: District Court, S.D. New York

Date Published: Nov 28, 1966

Citation: 261 F. Supp. 386

Docket Number: 66 Civ. 3413, 3425

Court Abbreviation: S.D.N.Y.