Home Furniture C v. United States/Opinion of the Court

Appellants are residents of El Paso, Tex., and there engage in the business of buying and selling furniture. By a bill presented to the United States District Court for the Western District of Texas, they sought annulment of an Interstate Commerce Commission order, which permitted acquisition of control over the Southewestern System by the Southern Pacific Company.

That the Southern Pacific Company is a corporation under the     laws of Kentucky, which operates reilroads in California,      Arizona, New Mexico, and other states.

'That defendant El. Paso & Southwestern Railroad Company is a     corporation incorporated under the laws of the state of      Arizona and is authorized to and does operate railroads in      the state of Arizona, New Mexico, and Texas; that said      defendant is engaged in the transportation of passengers and      property in interstate commerce subject to the Interstate      Commerce Act; that defendant is part of what is known as the      El Paso & Southwestern Railway System, consisting of the      following railroad companies, viz.: The El Paso &      Southwestern Railroad Company, the El Paso & Southwestern      Railroad of Texas, the Burro Mountain Railroad Company, the      Arizona & New Mexico Railway Company, the Dawson Railway Company, the El Paso & Northeastern Railway Company, the El      Paso & Rock Island Railway Company, the Alamogordo &      Sacramento Mountain Railway Company, the El Paso &      Northeastern Railroad Company, and the Tucson, Phoenix & Tide      Water Railway Company, hereinafter, for convenience sake,      referred to as the Southwestern System; that all of the      issued and outstanding capital stock and a portion of the      outstanding bonds of the companies comprising said System are      owned directly or indirectly by the El Paso & Southwestern      Company, a holding corporation of the state of New Jersey;      that of the railway companies comprising said system only the      defendant El Paso & Southwestern Railroad Company is engaged      in the transportation of passengers and property in      interstate commerce, which said company, in addition to      operating the lines of railway owned, by it, operates under      lease all of the existing railways of the remaining companies      comprising said system.'

'That the Southern Pacific Company and the El Paso &     Southwestern Railroad Company, on July 1, 1924, petitioned      the Interstate Commerce Commission for an order approving the      former's proposal to acquire control of the Southwestern      System by stock ownership and through leases.

That, on September 30, 1924, the Commission approved the     proposal.

That they will be injured, by the proposed control, through     loss of opportunity to route their goods over either of two      competing systems, and the depreciation of service and      increase of rates which will naturally result from      suppression of competition. The gravamen is that     transportation facilities, service, and charges will be      adversely affected by the union of the two systems under one      management.

Appellees denied jurisdiction of the court and asked dismissal of the bill. They set up, by plea: That the venue of the suit upon said alleged cause of action     does not lie in the District Court of the United States for      the Western District of Texas, but, on the contrary, said      venue lies, if the suit is maintainable at all, in the      District Court of the United States for the District of      Arizona or for the District of Kentucky, as complainants may      elect to file their bill in either of said districts, for the      following reasons, to wit: Because it affirmatively appears      from the fact of complainants' bill heretofore filed herein      that Southern Pacific Company, a corporation of the state of      Kentucky, having its domicile in said state of Kentucky, and      El Paso & Southwestern Railroad Company, a corporation of the      state of Arizona, having its domicile in said state of      Arizona, were the parties upon whose petition the order of      the Interstate Commerce Commission sought to be reviewed and      set aside in this proceeding was made, and because it further      appears from the said bill of complainants that the said      order relates to transportation and was made upon the      petition of the parties aforesaid.

This plea was sustained January 15, 1925 (2 F.(2d) 765), and the cause is here by direct appeal. Act Oct. 22, 1913, c. 32, 38 Stat. 208, 220. Decision of the question at issue must turn upon the proper construction and application of the following provision of that act (38 Stat. 219, 220 (Comp. St. § 994)):

'The venue of any suit hereafter brought to enforce, suspend,     or set aside, in whole or in part, any order of the      Interstate Commerce Commission shall be in the judicial      district wherein is the residence of the party or any of the      parties upon whose petition the order was made, except that      where the order does not relate to transportation or is not      made upon the petition of any party the venue shall be in the      district where the matter complained of in the petition      before the Commission arises, and except that where the order      does not relate either to transportation or to a matter so complained of before the Commission the      matter covered by the order shall be deemed to arise in the      district where one of the petitioners in court has either its      principal office of its principal operating office. In case     such transportation relates to a through shipment the term      'destination' shall be construed as meaning final destination      of such shipment.'

The language of this provision was not happily chosen, but, when consideration is given to the situation of the complaining parties here, the gravamen of their bill, and the report of the Commission, we think it becomes sufficiently clear that its order has direct relation to transportation, within the meaning of the statute.

The lines of the Southwestern System are intermediate between     the lines of the Southern Pacific, and the lines of the      Chicago, Rock Island & Pacific Railway System, hereinafter      called the Rock Island. The lines of the three systems     constitute one of the principal direct routes between      southern California and the Missouri River and Chicago, and      are included in the Southern Pacific-Rock Island System in      the grouping of railroads under the tentative plan for      consolidation of railroad properties promulgated by us under      date of August 3, 1921. Consolidation of Railroad Properties,     6o Interst. Com. Com'n R. 455. Acquisition of control of the     Southwestern System by the Southern Pacific is in harmony      with this plan. It will result in direct physical connection     between the lines of the Southern Pacific and the Rock      Island, will assure the continuance of this route, and will      increase its competitive strength as compared with the routes      of the Sants Fe and Union Pacific. While the lines of the     Southern Pacific and Southwestern System west of El Paso may      be said to be parallel, they serve different communities and      industrial sections. The points at which the two systems meet     are important points of interchange of a large traffic to and from communities served by one but      not the other. Better co-ordination and more efficient and     economical operation will follow as to this traffic and as to      transcontinental traffic in connection with the Rock Island,      and relations to the traveling and shipping public and to      public authorities will be simplified and improved.

The challenged order was made upon a petition, and neither party thereto resides within the Western District of Texas. It related to transportation. Consequently the court below was without jurisdiction. See Skinner & Eddy Corporation v. United States, 249 U.S. 557, 563, 39 S.C.t. 375, 63 L. Ed. 772. Moreover, the bill alleged no probable direct legal injury to appellants except such as might arise out of changed conditions in respect of transportation to and from the city of El Paso. Accordingly, they had no proper cause of complaint unless the order had definite relation to transportation. Hines, etc. v. United States, 263 U.S. 143, 148, 44 S.C.t. 72, 68 L. Ed. 216.

The decree of the court below must be affirmed.