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November 17, 1966


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


This is a suit arising under Sections 1(18)*fn1 and 1(20)*fn2 of the Interstate Commerce Act, 49 U.S.C. § 1(18), 1(20). Both parties are interstate carriers by rail subject to the Act. Jurisdiction of the Court is founded upon 28 U.S.C. § 1337 as a proceeding arising under an Act of Congress regulating commerce, and venue is laid in this District pursuant to 28 U.S.C. § 1391.

In its verified complaint, plaintiff seeks an injunction against the continued construction of, and future operation over, trackage facilities being built by defendant from the terminal point of defendant's trackage at Orient Mine No. 3 in Jefferson County, Illinois, to a mine to be opened by the Inland Steel Company, located some three and one half miles southeast of Orient Mine No. 3, unless and until the defendant shall have obtained from the Interstate Commerce Commission a certificate of public convenience and necessity in compliance with 48 U.S.C. § 1(18). (See Appendix.)

Defendant has filed a verified counterclaim in which it seeks to enjoin plaintiff from continuing to operate over trackage built by plaintiff in 1960 extending from the city of Nason, in Jefferson County, to Old Ben Mine No. 21 in Franklin County, Illinois, until such time as plaintiff shall have applied for and received a certificate of public convenience and necessity authorizing the alleged extension as required by 49 U.S.C. § 1(18). The trackage which is the subject of the counterclaim runs in a north-south direction approximately one mile east of the proposed Inland mine. (See Appendix.) Defendant also seeks an accounting of past revenues collected by plaintiff as a result of its operation over the challenged trackage as well as the right to share in any future revenues, all pursuant to rights defendant claims it has as the result of an Agreement between it and plaintiff hereinafter described.

Numerous affidavits have been filed by both parties in support of their respective claims. A hearing was held on October 26, 1966, as to the questions of fact and law raised by both the complaint and counterclaim. Briefs have been filed by both parties.

The principal question presented by both the complaint and counterclaim is identical, and that is, whether as a matter of law the challenged trackage is an "extension" or "spur" as those terms are used in the Act. This is a mixed question of fact and law which is left by Congress to the decision of a court and not to the final determination of the Commission. United States v. State of Idaho, 298 U.S. 105, 56 S.Ct. 690, 80 L.Ed. 1070 (1936). The question is properly presented here first, rather than before the Commission, because the exclusive remedy of a "party in interest" who may be injured by allegedly unlawful construction of trackage, where no application for a certificate of public convenience and necessity has been made by the constructing carrier, is by way of an injunction. Texas & P. Ry. v. Gulf, C. & S.F. Ry. Co., 270 U.S. 266, 46 S.Ct. 263, 70 L.Ed. 578 (1926).

This dispute arises out of the desire of the two carriers to serve a coal mine to be opened by the Inland Steel Company not far from the trackage of either railroad. The mine is located in the southwest quarter of Jefferson County, Illinois, an area rich in coal fields, which provides a significant source of revenue for the carriers serving the area. For example, the proposed Inland mine is stated by the parties to represent as a source of freight approximately 1.5 to 2.5 million tons of coal per annum for an indefinite number of years in the future.

There are, at this time, four railroads effectively operating in the southwest quarter of Jefferson County, plaintiff (C&EI), defendant (IC), the Missouri Pacific Railroad Company (MP), and the Chicago, Burlington & Quincy Railroad (CB&Q). A fifth railroad, the Jefferson Southwestern Railroad (JSW), is there in name only as it is owned and operated by the plaintiff, defendant, and the MP.

The JSW extends southwesterly from Mt. Vernon to Nason, a distance of 12.84 miles. It was constructed in approximately 1924 by the Jefferson Southwestern Railroad Company, a subsidiary of the Illinois Coal Corporation, to serve about 22,000 acres of land in the southwestern quarter of Jefferson County, and particularly to serve a mine located at Nason. Nason, therefore, is the terminal point of the JSW. Nason is approximately 4.5 miles north of the proposed Inland mine. The JSW connects at Mt. Vernon with a main line of the C&EI. (See Appendix.)

In 1941, the IC and the trustee of the MP obtained authority from the ICC to operate under contract the properties of the JSW. Illinois Central Railroad Company, et al., Operation, 247 I.C.C. 415 (1941). The Commission found that the JSW was granting to the IC and MP "the exclusive right" to use the JSW trackage "for the purpose of * * serving any and all persons located on or near" the JSW trackage and any connecting "service tracks" that might be installed and operated by the IC and MP. The Commission noted that it was more economical to permit the IC to operate over the JSW than to permit it to construct its own lines into the area served by the JSW. The nearest IC main line to Nason was its north-south line approximately 15 miles west. The Commission also noted that "No other railroads are known to be interested in the [JSW]." The JSW was operated continuously by the MP and IC from 1941 until 1952. During those years, all motive power over the JSW was provided exclusively by the MP, although cars of both the MP and IC were used to haul freight. Thus in 1941, the C&EI had no interest of any nature in the JSW.

In 1952, the C&EI purchased the entire stock of the JSW from the Zeigler Coal Company, which at that time owned the JSW, pursuant to an agreement with Zeigler that it would sell one-third of the stock to each of the two railroads that had been operating the JSW up to that time. Thus in 1952, the C&EI, IC and MP entered into a tri-partite Agreement to own and operate the JSW. The Agreement was approved by the Commission in Jefferson Southwestern Railroad Company, et al., Finance Dockets No. 17602, 17726, and 17727, (1952 and 1954). The Agreement provided, among other things, that any proprietary line had the right to construct an extension, spur or industrial trackage subject to any necessary approval by any regulatory body having jurisdiction, and that either of the other proprietary lines had the option within six months' notice of completion of any such construction to acquire an equal interest.*fn3 The Agreement also provided that each of the three proprietary railroads would have trackage rights over the JSW and thus the right to operate under each railroad's own power. Prior to granting of Commission approval, however, the mine at Nason closed, and no carrier has moved coal from the Nason mine after 1952. Thus it was in 1952 that the IC and C&EI first acquired a proprietary interest in the JSW.

In 1960, Old Ben Mine No. 21 opened. It is located in Franklin County approximately 2 miles east of the CB&Q's north-south main line. Franklin County is located directly south of Jefferson County. The first service to the mine was furnished through the construction by the CB&Q of a spur track extending from its north-south main line to the mine. The IC and MP carried freight from the mine over the CB&Q tracks pursuant to a contractual switching agreement with the CB&Q. In September, 1960, the C&EI, pursuant to a request from the owners of Old Ben Mine No. 21, completed construction of trackage, its "Old Ben trackage," southward from the terminus of the JSW at Nason, across the land holdings of Inland, to Old Ben Mine No. 21, a distance of approximately 5.9 miles. It is this segment of trackage that defendant contends by its counterclaim is an "extension" and not a "spur." To construct this trackage, it was necessary for the C&EI to rehabilitate the JSW trackage from Mt. Vernon to Nason which apparently fell into disuse by its three owners when the mine at Nason closed.*fn4 This trackage lies approximately one mile east of the proposed Inland mine. The C&EI, pursuant to the JSW owners' agreement, notified the IC and MP by telegram on September 13, 1960, that it had completed construction of the trackage from Nason to Old Ben Mine No. 21. Neither the IC nor the MP expressed any desire to acquire an interest in the trackage within the six months time limit provided in the Agreement or at any time thereafter until the IC filed its counterclaim in this action. In August of 1961, the ICC conducted an investigation of the C&EI construction. Under the Act, 49 U.S.C. § 1(20), the Commission has the authority to seek an injunction to restrain operation over trackage constructed in violation of 49 U.S.C. § 1(18). The ICC did not then take, and has not taken to date, any action to enjoin the C&EI from operating over its line from Nason to Old Ben Mine No. 21. When the C&EI began to haul coal from Old Ben Mine No. 21, it first actually served shippers located in the southwestern quarter of Jefferson County. The express purpose of the C&EI in building this trackage was to serve not only Old Ben Mine No. 21 but also any other mines that might be opened along the track.*fn5 This trackage was built at a cost of approximately $760,000, including the cost of rehabilitating the JSW.*fn6 Since then, the C&EI alone has expended approximately $240,000 in maintenance and additional improvements.*fn7 This trackage is unbeset by telephone or telegraph wires, or by freight offices or passenger stations.

On September 9, 1966, defendant began construction of trackage from the terminus of its Bois extension at Orient Mine No. 3 to the proposed Inland mine. That trackage is now substantially completed. This trackage extends 3.5 miles, first easterly across a spur track of the CB&Q extending west to a point at Orient Mine No. 3 where it connects with the Bois extension of the IC, then across the main line of the CB&Q, and then southeasterly to the Inland mine. Trackage east of the CB&Q is newly-constructed trackage.*fn8 The entire operation was established at a cost of $399,100.*fn9 This trackage is unbeset by stations or freight offices, or telephone or telegraph services. For the purposes of this suit, this trackage was built solely to serve the Inland mine site. It is this segment of trackage that plaintiff alleges is an "extension" and not a "spur."

The C&EI became aware of the IC construction at least as early as September 20, 1966, when it took pictures of the construction. Suit was filed October 12, 1966. On September 20, 1966, the construction had proceeded to the point of having completed grading operations and applying the necessary fill; preparations were then in progress for subsurfacing and ballasting as well as for the laying of rail and the construction of a bridge; actual ballasting, track laying, and bridge construction had not then been commenced. Plaintiff next observed construction on October 3, 1966, at which time ballasting, bridge construction, and track laying had been commenced. Plaintiff next observed construction on October 11, 1966, at which time more track had been laid. Construction continued rapidly after suit was filed on October 12, 1966. None of these facts is seriously disputed.

No case cited by either party, and none unearthed in the Court's own research, dictates that a particular result must follow in this case because of the peculiar geography involved here and because of the unique presence of the Agreement between the parties relating to the JSW. While the segments of trackage challenged by the complaint and the counterclaim each present singular problems, the character of both tracks may nevertheless be determined by applying the same tests to determine whether the trackage is a "spur" or an "extension." In reaching its conclusions, the Court has considered the two segments of challenged trackage independently of their relationship, if any, to each other, or of the relationship of the parties to ...

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