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STATE OF ILLINOIS v. UNITED STATES

December 10, 1962

STATE OF ILLINOIS, ILLINOIS COMMERCE COMMISSION, AND NORTH SHORE COMMUTERS ASSOCIATION, PLAINTIFFS,
v.
UNITED STATES OF AMERICA, INTERSTATE COMMERCE COMMISSION, AND CHICAGO, NORTH SHORE & MILWAUKEE RAILWAY, DEFENDANTS.



Before Swygert, Circuit Judge, and Miner and Parsons, District Judges.

The opinion of the court was delivered by: Per Curiam.

The Interstate Commerce Commission has granted the Chicago, North Shore & Milwaukee Railway a certificate of public convenience and necessity permitting abandonment of its entire line of railroad extending between Milwaukee, Wisconsin, and Chicago, Illinois.*fn1

The State of Illinois, Illinois Commerce Commission, and North Shore Commuters Association, plaintiffs in this proceeding, have instituted this action to set aside and enjoin the Interstate Commerce Commission's order permitting abandonment.

On June 25, 1958, the North Shore applied to the Interstate Commerce Commission under Section 1(18-20) of the Interstate Commerce Act, 49 U.S.C. § 1 (18-20), for a certificate of public convenience and necessity permitting abandonment. Motions to dismiss were filed challenging the jurisdiction of the Commission on the ground that the North Shore is exempt from Commission regulation under Section 1(22), 49 U.S.C. § 1(22), as an electric interurban railroad.

On May 4, 1960, the Interim Report of the Commission, 312 I.C.C. 99, was issued. The Commission determined that the motions to dismiss should be overruled because the North Shore is not a street, suburban, or interurban electric railway within the meaning of Section 1(22). The Commission, however, deferred action on the application for a period of one year to afford the North Shore, in cooperation with the regulatory commissions, the state and local authorities, and the public, an opportunity to explore all possibilities for profitable operation, including an immediate request by the North Shore for a necessary fare increase.

On May 10, 1962, the Report of the Commission After Further Hearing, 317 I.C.C. 191, was issued. The Commission concluded and found as follows:

    "We conclude and find that the present revenues
  have not been, and future revenues will not be,
  sufficient to cover the cost of applicant's continued
  operation with sufficient maintenance of facilities
  necessary to safety of operation; that abandonment of
  all operations is warranted, subject to the condition
  that applicant shall sell the entire line, or any
  portion thereof, to any responsible person, firm or
  corporation offering, prior to the effective date of
  the certificate and order permitting abandonment, to
  purchase the same for continued operation (upon
  approval of this Commission) at a price not less than
  the net salvage value of the property sought to be
  acquired; that the imposition of conditions for the
  protection of employees adversely affected by the
  abandonment is not justified in the circumstances of
  this case; and that the inconvenience to users of
  applicant's service which will result from the
  abandonment will be mitigated by the availability of
  rail service provided by the Chicago & North Western
  Railway and the Chicago, Milwaukee, St. Paul and
  Pacific Railroad."

Subject to the condition mentioned, the Commission found that the present and future public convenience and necessity permit abandonment by the North Shore of its entire line of railroad, and issued an appropriate certificate and order to be effective 35 days from date of service. This effective date was subsequently extended pending disposition of various petitions for reconsideration.

On October 15, 1962, the Report of the Commission on Reconsideration, was issued. In that report, the Commission again considered and rejected the argument that the North Shore was an exempt interurban electric railway within the meaning of Section 1(22). The Commission also considered and rejected plaintiffs' argument that, even if the North Shore is subject to Commission jurisdiction, the Commission can only authorize abandonment as to interstate commerce.

It is apparent from the briefs and oral arguments of the opposing parties that this Court must resolve two jurisdictional questions. First, does the North Shore fall within the exemption of Section 1(22) of the Interstate Commerce Act, as being a "street, suburban, or interurban electric railway(s), * * not operated as a part or parts of a general steam railroad system of transportation?" Second, assuming a negative answer to the first question, has Congress granted, and does the Interstate Commerce Commission have, authority to grant a certificate to the North Shore to abandon its entire operations in both intrastate and interstate commerce? We must dispose of these jurisdictional questions before considering the sufficiency of the evidence upon which the Commission granted a certificate of public convenience and necessity permitting abandonment.

For the reasons hereinafter set forth we hold that the North Shore is not within the exemption of Section 1(22) and that the authority of the Commission extends to all phases of operation — both intrastate and interstate — of the North Shore.

Plaintiffs claim that the character of the North Shore as being within the exception of Section 1(22) has been conclusively determined by the United States Supreme Court and therefore the Commission lacked authority to confer on it a status inconsistent with the Supreme Court's ruling.

The Supreme Court in United States v. Chicago, North Shore and Milwaukee Railroad, 288 U.S. 1, 53 S.Ct. 245, 77 L.Ed. 583 (1933), held that the North Shore fell within the exemption of Section 20a of the Interstate Commerce Act. Section 20a contains wording which is identical to that of Section ...


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