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ATCHISON, TOPEKA AND SANTA FE RY. v. CITY OF CHICAGO

December 12, 1955

THE ATCHISON, TOPEKA AND SANTA FE, RAILWAY COMPANY ET AL., PLAINTIFFS,
v.
CITY OF CHICAGO, A MUNICIPAL CORPORATION, ET AL., DEFENDANTS, AND PARMALEE TRANSPORTATION COMPANY, DEFENDANT-INTERVENOR.



The opinion of the court was delivered by: LA Buy, District Judge.

  The above cause is before the court on two motions: (1) a motion for summary judgment filed on behalf of the City of Chicago, and (2) a motion for temporary injunction filed by the plaintiffs.

These motions are based on the plaintiffs' complaint for declaratory judgment, together with the documents and exhibits attached thereto; on affidavits and exhibits submitted by the plaintiffs and the defendant-intervenor; and hearings had before the court. No answers have been filed to the complaint by either the City of Chicago or Parmalee, although Parmalee's petition for intervention prays that it be considered as an "answer and claim".

In the present state of the record, therefore, the court must refer to the complaint and the petition with respect to the issues which are here presented.

Jurisdiction is premised on § 1331 of the Judicial Code, 28 U.S.C.A., granting to district courts original jurisdiction of civil actions which arise under the Constitution, laws and treaties of the United States and where the matter in controversy exceeds the sum of $3,000 exclusive of interest and costs, and also on § 1337 of the Judicial Code, 28 U.S.C.A., granting to district courts original jurisdiction of civil actions arising under any act of Congress regulating commerce.

The complaint alleges that plaintiff railroads have filed tariffs with the Interstate Commerce Commission and the Illinois Commerce Commission for through passenger service from points outside of Chicago to points beyond Chicago; that there is a contract between the plaintiff railroads and the plaintiff, Transfer, whereby Transfer carries railroad passengers and their baggage from one Chicago terminal station to another; that before commencing his rail journey the passenger has purchased a through ticket to and beyond Chicago in which is included a coupon good for transportation between the Chicago terminal stations in Transfer's vehicles; that the coupon is surrendered by the passenger when he uses Transfer's vehicles; that the railroad pays Transfer the coupon rate fixed in the contract and the entire expense of the transfer operation is absorbed by the railroads; that more than 99% of all such through passenger service is in interstate commerce; that the power to regulate the manner in which the railroads shall carry out their responsibilities under § 1(3)(a), 1(4) and § 3(4) of the Interstate Commerce Act, 49 U.S.C.A., is exclusively vested in the Interstate Commerce Commission and the ordinance is invalid as encroaching upon powers vesting exclusive regulation of this activity in the Interstate Commerce Commission pursuant to "An act to regulate commerce", 49 U.S.C.A. § 1 et seq.; that in the alternative the ordinance is invalid as an undue burden on interstate commerce in violation of Article 1, § 8, Clause 3 of the Constitution of the United States for the reason that § 28-31 of the Municipal Ordinance premises the issuance of a license to terminal vehicles upon public convenience and necessity as determined by the commissioner and upon report to the council which latter body may fix the maximum number of terminal vehicle licenses to be issued not to exceed the number recommended by the commissioner; that the proper exercise of this power by the Commissioner and the City Council requires, as a minimum, the knowledge of all factors which influence the demand for and supply of suitable passenger vehicles and all the pertinent facts and circumstances in the operation of the railroads which influence the volume of through passengers traveling through Chicago; that practically none of these pertinent facts and circumstances are available to the commissioner and/or city council and the criteria prescribed by § 28.21-1 of the ordinance do not and can not make such pertinent information available to them; that § 28-6 of the ordinance confers sole discretion upon the commissioner to select the class of persons and individuals "qualified" to have public passenger vehicle licenses thereby limiting the number and character of passenger motor vehicles and the number and qualifications of the operators available to the railroads to perform the interstate transfer service they are required by law to provide.

The complaint also alleges that plaintiffs have advised the defendant, City of Chicago, and its officials that the provisions of the ordinance do not apply to the operations covered by contract between the plaintiff railroads and the plaintiff, Transfer, for the reason, (1) the ordinance specifically excepts from its regulation public passenger vehicles which are used in the operation of a public utility under the laws of Illinois; that the railroads which are engaged in the transportation of persons are public utilities within Chapter 111 2/3, § 1 et seq., Smith-Hurd Ann.Stats., and that the motor vehicles of Transfer are operated as exclusive agents for said railroads providing the service covered by the public utility law of Illinois; that each of the motor vehicles of Transfer are therefore excepted; and (2) Transfer's passenger vehicle is not intended by the ordinance to be a "terminal vehicle" as defined thereunder in view of the various amendments incorporating changes in that definition and also in the application thereof under earlier ordinances.

The defendant, City of Chicago, has filed a motion for summary judgment requesting the court to determine as a matter of law whether Chapter 28 of the Municipal Code applies to the operations of the plaintiff, Railroad Transfer Service, Inc. It is a cardinal rule that such motions are granted only in cases where there is no genuine issue of fact involved and where the moving party is entitled to judgment as a matter of law.

The petition for intervention, considered as an answer, does not dispute any of the factual allegations of the complaint. In addition, Parmalee in oral argument has admitted that the transportation here involved is in interstate commerce. Parmalee does, however, contend that a dispute exists as to a material fact in that plaintiff railroads state they are required to provide through passenger transportation under the tariffs filed and the applicable statute, whereas Parmalee' disagrees. While a dispute does, therefore, exist as to the effect of these tariffs and as to the requirements of the statute regarding through transportation, the court is of the opinion it is not a dispute as to a material fact but a disagreement as to the effect of these tariffs and the interpretation of the statute. This presents only a question of law.

Defendant, City of Chicago, not having filed an answer and having instead filed a motion for summary judgment solely on the basis of the complaint, must be considered to have admitted the truth of the facts alleged therein.

The court is of the opinion that a study of the pleadings, documents and exhibits does not reveal the existence of a dispute as to any of the material facts presented in the complaint. Also, it is not disputed that the transfer operation between railroad terminals is railroad transportation not subject to Part II of the Interstate Commerce Act except for its provisions for Commission regulation "relative to qualifications and maximum hours of service of employees and safety of operations and equipment"; and that Transfer is not a carrier or railroad under Part I of the Interstate Commerce Act.

A federal court has jurisdiction to enjoin the enforcement of statutes which are not authorized as an exercise of police power and which constitute an unlawful burden on interstate commerce. But the power to declare legislative enactments void is one that is exercised cautiously and with reluctance. The presumption is always in favor of the validity of such acts, and the burden of overcoming this strong presumption rests upon the one who challenges it.

The area within which Congress has exercised the power granted to it by the Constitution and the province within which the states have been permitted to encroach thereon by virtue of their police powers has been the subject of controversy in many cases for many years. The guides in judging the validity of state legislation with regard to the exercise of its police powers are discussed in First Iowa Hydro-Elec. Coop. v. Federal Power Comm., 1945, 80 U.S. App.D.C. 211, 151 F.2d 20, 26, and First Nat. Ben. Soc. v. Garrison, D.C. 1945, 58 F. Supp. 972, 983-985. They are (1) when state and local laws are in conflict with an act of Congress, the law of Congress prevails; (2) when an act of Congress does not clearly prohibit state action but such prohibition is inferable from the scope and purpose of federal legislation, it must be clear that the state legislation is inconsistent with that of Congress in order to render it invalid; (3) when Congress has circumscribed its regulation of interstate commerce to a limited field the intent to supersede the exercise of police power by the state is not implied as to matters not covered by federal legislation; (4) when a state has enacted laws under its police power although they affect interstate commerce, such laws may stand until Congress takes possession of the field under its superior authority to regulate such commerce, but such federal action must be specific in order to be paramount; and (5) Congressional supersedure of local laws is not to be inferred unless clearly indicated by considerations which are persuasive of its intent to do so.

    "To license, tax, and regulate hackmen,
  draymen, omnibus drivers, carters, cabmen,
  porters, expressmen, and all others pursuing like
  occupations, and to prescribe their
  compensation."

The right and power of the city to regulate the use of its streets by motor vehicles includes the right to impose reasonable conditions and restrictions to promote the general welfare. And, in accord with the general propositions stated above, such regulation where obviously intended as a police regulation, and not operating unreasonably beyond the occasions of its enactment, is not invalid simply because it may incidentally affect the exercise of some right granted by Congress.

In connection with the application of federal legislation and supervision over the particular activity involved here, it is to be kept in mind that Congress will not be deemed to have superseded or excluded state action under the commerce clause until its intention to do so has been made definite and clear, and where Congress while regulating related matters has not acted on a subject which is peculiarly adapted to local regulation, the state may exert authority concerning such local matters although they indirectly burden interstate commerce. The Interstate Commerce Commission under the authority granted by Congress has not undertaken to exercise any supervision over the specific services performed by Transfer and neither has Congress indicated a clear intention to do so. The Interstate Commerce Commission has not considered this limited and incidental operation as one which it would regulate. Commercial Zones and Terminal Areas, 1949, 48 M.C.C. 418; Status of Parmalee, 1953, 288 I.C.C. 95; Exchange of Free Transportation, 1907, 12 I.C.C. 39; Anacostia Citizens Ass'n v. B. & O., 1912, 25 I.C.C. 411; Michigan Cab Co., 1938, 7 M.C.C. 701; New York Dry Dock Ry. Co. v. Pennsylvania R. Co., 3 Cir., 1933, 62 F.2d 1010; Regulations 190.33 and 190.30 (49 C.P.R. §§ 190.33, 190.30).

Admitting this disclaimer of exercise of paramount authority by the Interstate Commerce Commission, the plaintiffs nevertheless insist that § 28-1 and § 28-31 of the Municipal Ordinance contains a potential exercise of discretion to prohibit the "stream of interstate commerce" represented by the transportation of through passengers between railroad terminals and thus invades the exclusive power granted to Congress to regulate interstate commerce.

The pertinent section of the ordinance is § 28-31.1 and provides:

    "No license for any terminal vehicle shall be
  issued except in the annual renewal of such
  license or upon transfer to permit replacement of
  a vehicle for that license unless, after a public
  hearing held in the same manner as specified for
  hearings in Section 28-22.1, the Commissioner
  shall report to the Council that public
  convenience and necessity requires additional
  terminal vehicle service and shall recommend the
  number of such vehicle licenses which may be
  issued.
    "In determining whether public convenience and
  necessity require additional terminal vehicle
  service, due consideration ...

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