The opinion of the court was delivered by: FULLAM
MEMORANDUM AND ORDER NO. 1543, and FINDINGS PURSUANT TO THE FIRST SENTENCE OF 207(b) of the Regional Rail Reorganization Act of 1973
Section 207(b) of the Regional Rail Reorganization Act of 1973 (hereinafter the 'Act'), provides:
'Within 120 days after the date of enactment of this Act each United States district court or other court having jurisdiction over a railroad in reorganization shall decide whether the railroad is reorganizable on an income basis within a reasonable time under section 77 of the Bankruptcy Act (11 U.S.C. § 205) and that the public interest would be better served by continuing the present reorganization proceedings than by a reorganization under this Act . . ..'
The Debtor is a 'railroad in reorganization' as defined in the Act. The statute became effective January 2, 1974, which means that the decision as to reorganizability is to be made not later than May 2, 1974.
By Order No. 1426, this Court directed that a hearing be held on March 25, 1974, in relation to the decision required by the quoted language of the statute, and invited all interested parties, at stated times in advance of the hearing, to specify and brief the legal and factual issues they deemed relevant to the required determination. In response to this invitation, a wide range of questions have been briefed and presented, but in view of the factual record developed at the hearing, not all of these issues need now be discussed.
I. Jurisdictional and Other Preliminary Issues
It is necessary to note at the outset that the constitutionality of the Act is being challenged on a variety of grounds in other litigation now pending in this District and elsewhere.
Many of the same constitutional issues have been raised in the present proceeding. For the most part, they will not now be considered. Apart from the question of whether this Court should attempt to avoid deciding the constitutional issues, in deference to the three-judge proceedings, it would seem that these issues can and should be deferred for consideration in connection with the findings contemplated by the second clause of § 207(b) (the so-called '180-day findings').
The only constitutional issues which must be faced now are those expressing a challenge to the jurisdiction of this Court to make the findings required by § 207(b).
The findings contemplated by the first sentence of § 207(b), the so-called '120-day' findings, embrace two areas of inquiry (1) whether the Debtor 'is reorganizable on an income basis within a reasonable time under section 77 . . .' and (2) '(whether) the public interest would be better served by continuing the present proceedings than by a reorganization under this Act . . ..' The New Haven Trustee contends that this Court lacks power to make findings on either subject because there is no 'case or controversy' before the Court; and further argues that making findings with regard to 'the public interest' is not a judicial function and cannot be delegated to a court, at least in the absence of adequately defined standards.
I have concluded that a finding on the issue of reorganizability may properly be made by an Article III court. The reorganization proceeding itself is the 'case or controversy' which justifies judicial action. While there might perhaps be some question as to the validity of legislative intrusion into specific pending litigation by fixing deadlines for decision of particular issues (a question which has not been raised in the present proceeding, and as to which I intimate no view), it is entirely clear that a court may properly comply with such deadlines; its pre-existing jurisdiction would not be impaired.
It is true that the Act does not prescribe procedural machinery for making the required findings in an adversary setting: there is no petitioner or respondent; indeed, the Act does not even mandate a hearing. But there is no requirement that the norms of procedural due process must be disregarded, and they have not been. All parties have been afforded ample opportunity to be heard.
It is also true that the statute provides little or no guidance on the question of the proper allocation of the burden of proof; but that shortcoming is not, in my view, jurisdictional.
In short, there appears to be no valid reason for reaching any conclusion other than the obvious one, namely, that a reorganization court does have jurisdiction to make ...