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Illinois Commerce Commission v. United States and Interstate Commerce Commission

December 18, 1985

ILLINOIS COMMERCE COMMISSION, VILLAGE OF CARY, C. FRANKE & COMPANY, INC., AND PATRICK W. SIMMONS, PETITIONERS,
v.
UNITED STATES OF AMERICA AND INTERSTATE COMMERCE COMMISSION, RESPONDENTS; CHICAGO AND NORTH WESTERN TRANSPORTATION COMPANY, INTERVENING RESPONDENT



Petition for Review of an Order of the Interstate Commerce Commission

Author: Cudahy

Before CUDAHY and POSNER, Circuit Judges, and SWYGERT, Senior Circuit Judge.

CUDAHY, Circuit Judge.

In this appeal we review whether the Interstate Commerce Commission (the "ICC" or "the Commission") had jurisdiction to determine that the Chicago and North Western Railroad Company was exempt from complying with statutory requirements for abandoning a small strip of track in McHenry County, Illinois, The Commission first determined that the track was "line of railroad" and thus within its jurisdiction. We vacate and remand for further proceedings on this issue.

The "Cary Spur Track" is a 570-foot strip of track that is owned by the Chicago and North Western. Since 1912, this track has served the C. Francke Company of Cary, Illinois. C. Franke has been the sole receiver of freight along the track. When the railroad company determined that it would cost $33,490 to rehabilitate a grade crossing along the track, it decided to abandon the track.

If track falls within ICC jurisdiction, its abandonment generally will be governed by 49 U.S.C. § 1093 et seq. However, not all track comes under ICC control. Under 49 U.S.C. 10907 (B):

The Commission does not have authority under sections 10901-6 of this title (1) the construction, requisition, operation, abandonment or discontinuance of spur, industrial, team, switching or side tracks if the tracks are located, or intended to be located, entirely in one state.

Also, even if the ICC has jurisdiction over railroad track, it may exempt if from the requirements of 49 U.S.C. 10903 et seq. if regulation is not necessary to carry out national transportation policy. 49 U.S.C. 10505(a). In January 1984, the Chicago and North Western filed a petition for such an exemption with the ICC. The commission began reviewing the petition and invited public comments about whether the track was spur and thus outside Commission jurisdiction. comments were filed by the petitioners in this case: Francke, the Illinois Commerce Commission and Patrick Simmons, the Illinois Legislative Director for the United Transportation Union.

In October 1984, the ICC determined that it had jurisdiction over the Cary Spur Track and granted Chicago and North Western an exemption. The ICC then denied motions for reconsideration and for a stay. Francke, Simmons and the Illinois Commerce Commission then brought this suit against the ICC. The Chicago and North Western was allowed to intervene as a respondent.

I.

Whether railroad track is spur or railroad line is a "mixed question of law and fact to be determined judicially rather than administratively." New Orleans Terminal Co. v. Spencer, 366 F.2d 160, 164 (5th Cir. 1966), cert. denied 386 U.S. 942, 87 S. Ct. 974, 17 L. Ed. 2d 873 (1967). The Commission's expertise, of course, entitles its determination top the greatest deference. However, as the final arbiter of the Commission's jurisdiction, a court will "set aside agency action, findings and conclusions found to be . . . in excess of statutory jurisdiction, authority, or limitations." 5 U.S.C. 706(2)(C). In addition, we believe there must be some rational limits to any expansive view of Commission jurisdiction occasioned by the availability of expedited abandonment procedures under the Staggers Act, 49 U.S.C. 10505(a).

The case law concerning the meaning of spur track has not always been clear. Nonetheless, courts have emphasized several factors in determining whether track is spur or line of railroad. In Texas and Pacific Railway v. Gulf, Colorado & Santa Fe Railway, 270 U.S. 266, 70 L. Ed. 578, 46 S. Ct. 263 (1926), Justice Brandeis stated the track will be considered line of railroad "if the purpose and effect of the new trackage is to extend substantially the line of the carrier into new territory already served by another carrier." Id. at 278. In Texas and Pacific Railway v. Gulf, the Gulf Railway Company was laying 7 1/2 of new track at a cost of $510,000. The Court found this to be line of railroad because it was invading territory already served by Texas and Pacific and was expected to divert $500,000 in business per year from that company.

Later courts have emphasized the use of the track in deciding whether it is spur or railroad line. IN New Orleans Terminal, supra, the Fifth Circuit stated, "If there are traffic movements which are part of the actual transportation haul from the shipper to consignee, then the trackage over which the movement takes place is a 'line of railroad or extension thereof." 366 F.2d at 165-66. See also Nicholson v. ICC, 229 U.S. App. D.C. 86, 711 F.2d 364, 367 (D.C. Cir. 1983) ("It is well established that the determination of whether a particular track segment is a "railroad line," requiring the Commission's authorization pursuant to § 10901(a), or a "spur, industrial, team, switching, or side" track, exempt from Commission jurisdiction pursuant to § 1097(b), turns on the intended use of the track segment, not on the label or cost of the segment.") (footnote omitted), cert. denied, 464 U.S. 1056, 104 S. Ct. 739, 79 L. Ed. 2d 197 (1984). In its decision which is before us, the ICC found use to be "the controlling factor," ICC Decision, Finance Docket No. 30401 (January 11, 1985), and concluded that because the ...


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