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PENNSYLVANIA v. UNITED STATES

May 10, 1973

COMMONWEALTH OF PENNSYLVANIA et al., Plaintiffs,
v.
UNITED STATES of America et al., Defendants



The opinion of the court was delivered by: SCALERA

This action seeks to set aside a certificate and order of the Interstate Commerce Commission (I.C.C.) dated June 13, 1972, which authorizes the Baltimore and Ohio Railroad Company (B & O) and the Indian Creek Valley Railroad Company to abandon a 17.57 mile branch rail line located in Fayette and Westmoreland Counties, Pennsylvania.

HISTORY OF THE CASE

 On December 9, 1971, the B & O and its wholly-owned subsidiary, the Indian Creek Valley Railroad Company, filed a joint application with the I.C.C. under 49 U.S.C. § 1 (18-20) of the Interstate Commerce Act. The railroads sought a certificate of public convenience and necessity permitting abandonment of the Indian Creek Valley Branch, which runs between Indian Creek and Roaring Run in Fayette and Westmoreland Counties, Pennsylvania. In addition to the main track, the railroads' petition requested permission to abandon.46 miles of side track, 8 turnouts, 7 bridges and 11 public highway grade crossings.

 Various protests were entered against the abandonment and the application was assigned to a review board for handling under modified procedure by which evidence and arguments were submitted to the I.C.C. in written form. 49 C.F.R. 1100, 45-54. Protestants who filed verified statements were Babcock Lumber Company, the only patron served by the line, the United Transportation Union, the Commonwealth of Pennsylvania and the Pennsylvania Public Utility Commission (P.U.C.). The Commonwealth and the P.U.C. filed a joint statement. The record was closed on April 10, 1972. On June 13, 1972, the I.C.C.'s Review Board Number 5 entered a certificate and order accompanied by a report, granting the abandonment.

 On September 14, 1972, petitions for reconsideration filed by the Babcock Lumber Company and jointly by the Commonwealth of Pennsylvania and the Pennsylvania Public Utility Commission were denied by Division 3 of the I.C.C., sitting as an appellate division. The Commission's June 13 order was to become effective on October 22, 1972, twenty days from the date of service of the order denying reconsideration.

 This complaint seeking to enjoin, suspend and set aside the order of the I.C.C. was filed on October 10, 1972. In compliance with 28 U.S.C. §§ 2284 and 2325, a three-judge court was convened.

 Parties to the action stipulated that the authority for abandonment would not be exercised prior to January 15, 1973. Briefs were ordered in accordance with the schedule proposed by the parties and a hearing was held on January 26, 1973.

 REVIEW OF EVIDENCE PRESENTED IN PROCEEDINGS BEFORE THE INTERSTATE COMMERCE COMMISSION

 The railroads argued before the I.C.C. that there was insufficient business on the line to justify its continued operation. They presented evidence to show that since the closing of the Melcroft Mine in 1967, traffic on the line has been less than 2 carloads per week. As a result, the branch has been operated unprofitably for the past 3 years. In order to conserve losses only minimal amounts were expended on maintenance during this period, most of which was spent to have the track inspected in its entirety before each operation. Little actual maintenance work was performed on the line.

 Babcock argued that its use of the line had been increasing and that more cars could have been utilized but the railroad had been "unable or unwilling" to provide them. Considerable sums were recently spent by Babcock to improve its Roaring Run operation in reliance on the continued availability of railway service. It was asserted that elimination of the branch would adversely affect Babcock's business, necessitating a reduction of its lumbering force.

 The Commonwealth of Pennsylvania and the P.U.C. argued that at the present volume of traffic a major rehabilitation is not required for safe operation of the branch. Moreover, they contended that the line does not need to be upgraded to comply with F.R.A. Class 2 requirements. The Commonwealth and the P.U.C. argued that with a maintenance expenditure of $10,000 per year, an increase of approximately $4,000 over current maintenance expenditures, the line could be safely operated at the existing volume of traffic for the next 5 years without a major rehabilitation.

 Averring that the railroads' current operating losses are de minimis, the Commonwealth of Pennsylvania and the P.U.C. further argue that abandonment of line should not be permitted in an economically depressed area unless it is clear that the railroad will suffer substantial losses, as rail transportation is necessary to promote needed industrial development.

 The Transportation Union adopted the arguments of the other protestants.

 FINDINGS OF THE INTERSTATE COMMERCE COMMISSION

 The review board concluded that public convenience and necessity permit abandonment of the branch. It found that operation of the branch had been unprofitable in the past and would continue to be unprofitable in the future even with minimal maintenance expenditures. The board found that traffic on the branch had dropped to about 2 cars per week, a volume which made it impossible for the railroads to break even financially. No convincing evidence had been introduced that new traffic would be generated sufficient for profitable operation of the branch.

 The board noted that although there was no reason to upgrade the line to permit speeds up to 25 m.p.h., considerable rehabilitation was necessary for safe operation of the branch. The cost of required rehabilitation was so great that the railroads would ...


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