EASTERN TEXAS R. CO. et al. v. RAILROAD COMMISSION OF
TEXAS et al.

GULF, T. & W. RY. CO. et al. v. SAME.

(District Court, W. D. Texas, Austin Division. April 20, 1917.)

1. CARRIERS

18(6)—REGULATION OF RATES-ENJOINING ENFORCEMENT. Where the Interstate Commerce Commission prescribed maximum rates between Shreveport, La., and points in Texas, prohibited the charg ing of rates between such points higher than those applied for like distances between points in Texas, and ordered the railroad companies to cease applying the classification provisions then maintained to transportation between points in Texas, and a compliance therewith by the railroad companies would subject them to a multiplicity of suits by the State Railroad Commission and by shippers for failure to comply with the rates prescribed by the State Railroad Commission, while noncompliance therewith would also subject them to a multiplicity of suits with liability to large penalties, they were entitled to a temporary injunction restraining the State Railroad Commission and shippers who were threatening suit from instituting any suits, pending an action for a permanent injunction, based on the failure of the railroad companies to comply with the state rates so far as in conflict with the rates prescribed by the Interstate Commerce Commission.

[Ed. Note.-For other cases, see Carriers, Cent. Dig. §§ 13, 16-18, 20, 24.] 2. COMMERCE 88-INTERSTATE COMMERCE COMMISSION-Orders-CoLLATERAL ATTACK.

An order of the Interstate Commerce Commission prescribing interstate rates, and incidentally prohibiting intrastate rates thought to be discriminatory, cannot be attacked collaterally.

[Ed. Note. For other cases, see Commerce, Cent. Dig. §§ 139, 141.] 3. INJUNCTION 151-APPLICATION FOR TEMPORARY INJUNCTION-SCOPE OF INQUIRY.

On an application to the District Court for a temporary injunction restraining a State Railroad Commission and others from bringing suits to enforce rates prescribed by such commission so far as in conflict with an order of the Interstate Commerce Commission, heard before three judges, it was not necessary for the court to decide upon the merits of the case, but only to determine if the bill presented a case for equitable relief, especially where proceedings were still pending before the Interstate Commerce Commission affecting certain of the rates.

[Ed. Note. For other cases, see Injunction, Cent. Dig. § 336.]

Suits by the Eastern Texas Railroad Company and others against the Railroad Commission of Texas and others; and by the Gulf, Texas & Western Railway Company and others against the same defendants. On motion for a temporary injunction. Injunction granted.

J. W. Terry, of Galveston, Tex., H. M. Garwood, of Houston, Tex., Hiram Glass, of Austin, Tex., and A. H. McKnight, of Dallas, Tex. (T. J. Freeman, of New Orleans, La., S. B. Dabney, of Houston, Tex., C. C. Huff and E. B. Perkins, both of Dallas, Tex., E. B. Parker, of Houston, Tex., George Thompson, of Ft. Worth, Tex., and Frank Andrews, of Houston, Tex., of counsel), for plaintiffs.

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

Luther Nickels and C. M. Cureton, Asst. Attys. Gen., of Texas (B. F. Looney, Atty. Gen., of Texas, and S. C. Rowe, of Ft. Worth, Tex., of counsel), for defendants.

Blackburn Esterline, Sp. Asst. U. S. Atty. Gen., for the United States.

Joseph W. Folk, of Washington, D. C. (Charles W. Needham, of Washington, D. C., of counsel), for Interstate Commerce Commission. Wylie M. Barrow, Asst. Atty. Gen., of Louisiana, for intervener Railroad Commission of Louisiana.

S. H. Cowan, of Ft. Worth, Tex., and N. A. Stedman, of Austin, Tex., for Dallas Freight Bureau and Ft. Worth Freight Bureau. Paul Kayser, of Houston, Tex. (Huggins & Kayser, of Houston, Tex., of counsel), for interveners Houston Chamber of Commerce and others.

Before PARDEE, WALKER, and BATTS, Circuit Judges.

PARDEE, Circuit Judge. This suit grows out of an order of the Interstate Commerce Čommission of July 7, 1916, made and entered in five consolidated cases, entitled: Railroad Commission of Louisiana v. Aransas Harbor Terminal Railway Company et al., docket No. 8418; Railway Commission of Louisiana v. St. Louis Southwestern Railway Company et al., docket No. 3918; Railroad Commission of Louisiana v. St. Louis, San Francisco & Texas Railway Company, docket No. 8290; Eastern Class Rates Investigation and Suspension, docket No. 710; and Class Rates to Shreveport, Louisiana, Investigation and Suspension, docket No. 729.

The order in question is very lengthy and not necessary to give in full, A large part of the order relates to the discrimination then practiced between Shreveport, La., and all points in Texas, and provides for discontinuance of this discrimination, and elaborately provides for maximum rates between Shreveport and all points in Texas, and orders. defendants to establish on or before November 1, 1916, on notice to the Interstate Commerce Commission and the general public by not less than 30 days of filing, rates in accordance with the orders of the commission.

The tenth, eleventh, and twelfth paragraphs of the order are particularly pertinent on this hearing. They are as follows:

(10) It is further ordered, that said defendants be, and they are hereby, notified and required to establish, on or before November 1, 1916, upon like notice, and thereafter to maintain and apply to the transportation of property between Shreveport, La., and points in the state of Texas, class rates and rates on the above-named commodities not in excess of those contemporaneous. ly applied by them for the transportation of like property for like distances between points in the state of Texas, except in those instances in which the rates between Texas points have been depressed by reason of water competition along the Gulf of Mexico or waters contiguous thereto.

(11) It is further ordered, that said defendants be, and they are hereby, notified and required to cease and desist, on or before November 1, 1916, and thereafter to abstain, from maintaining and applying to the transportation of property between points in Texas the classification provisions at present maintained and applied to such transportation.

(12) It is further ordered, that said defendants be, and they are hereby, notified and required to establish on or before November 1, 1916, upon like

notice, and thereafter to maintain and apply to the transportation of property between points in Texas, the provisions of the current western classification in effect at the time such traffic moves.

Preparatory to filing tariffs in compliance with the commission's order of July 7, 1916, the carriers representing 80 per cent. of the railroad mileage in the state of Texas and affected by the order of July 7, 1916, filed their bill in this court on September 4, 1916, for an injunction, joining as parties defendant the Railroad Commission of Texas, together with its individual members, the Attorney General of the State of Texas, and certain Texas shippers, reciting the proceedings before the Interstate Commerce Commission and the necessity they were under to comply, and their intention to comply, with the order of said commission; and then alleging, in substance, that the tariffs to be filed in accordance with the order of the Interstate Commerce Commission would necessarily conflict with the tariffs heretofore established by the Railroad Commission of Texas, which under the laws of Texas they were compelled to observe and comply with under heavy penalties, at the suit of the Attorney General of Texas or of individual shippers, that the defendants were claiming that the order of the Interstate Commerce Commission of July 7, 1916, was void, and were threatening to institute suits for damages and penalties under the Texas laws should the carriers comply with the said order of the Interstate Commerce Commission; and the complainants prayed for a temporary restraining order, an injunction pendente lite, and a perpetual injunction.

To this bill is attached the following order:

The foregoing application for a temporary injunction and temporary restraining order, to remain in force until the hearing of the said application for a temporary injunction can be heard and determined, was presented to me this 20 day of September, A. D. 1916, and it was shown that the Honorable T. S. Maxey, United States District Judge for the Western District of Texas, is absent from said district, and for that reason is unable to hear and act upon said application; and having read and considered the foregoing bill. it is ordered that the same be filed and that the application for a hearing for a temporary injunction is granted and such hearing is set down for September 23, 1916, at my chambers in the city of Atlanta, Georgia, at 10 o'clock a. m. That immediate notice of said hearing, of not less than five days shall be given to the Governor and the Attorney General of Texas and to the defendants. And I hereby call to my assistance at said hearing of said application the Honorable Richard W. Walker, Circuit Judge of this circuit, and the Honorable William T. Newman, District Judge of the Northern District of Georgia.

It being further shown, and it is my opinion, that irreparable loss and damage will result to complainants unless a temporary restraining order is granted, it is ordered that such temporary restraining order is granted, and the clerk of the District Court for the Western District of Texas is ordered and directed to issue a temporary restraining order as prayed for restraining the Railroad Commission of Texas, the Attorney General and others with notice, from filing and prosecuting suits against the plaintiffs or either of them for failure or refusal to put in effect circular No. 5060 of the Railroad Commission of Texas, dated August 28, 1916, until such time as the application for temporary injunction can be heard and determined, and the said temporary restraining order issued by said clerk shall restrain and prevent the Railroad Commission of Texas, the Attorney General of Texas and the other defendants hereto, and others with notice, from filing and prosecuting suits

against the plaintiffs or either of them for damages or penalties, for charging by them, on and after November 1, 1916, the rates prescribed and authorized by the Interstate Commerce Commission in its order of July 7, 1916, on shipments moving between points in the state of Texas, and such temporary restraining order as prayed for to remain in force until the hearing and determination of the application for an interlocutory or temporary injunction upon notice as aforesaid.

This September 2, A. D. 1916, at Atlanta, Georgia.

Don A. Pardee, U. S. Circuit Judge.

The hearing on the question of an injunction pending the suit was postponed by consent from time to time until April 4, 1917, in New Orleans, La., when the matter came on for hearing before Pardee, Circuit Judge, who issued the order to show cause, and Walker and Batts, Circuit Judges, called to assist under provisions of section 266 of the Judicial Code (Act March 3, 1911, c. 231, 36 Stat. 1162 [Comp. St. 1916, § 1243]).

Upon this hearing a large amount of evidence was introduced on both sides, consisting of subsequent pleadings in the case, affidavits, proceedings before the Interstate Commerce Commission, all as shown by the procès verbal hereto attached. The pleadings subsequent to the entry of the temporary restraining order herein are an amendment to the original bill, a supplemental bill by the complainant showing that tariffs and rates had been filed under the order of the Interstate Commerce Commission and were in force, a very lengthy and argumentative answer, by the Railroad Commission of Texas and the Attorney General of Texas, substantially denying all the allegations of the original bill and contending that the order of the Interstate Commerce Commission of July 7, 1916, was void, and, if not void, voidable in whole or in part; and further answering in the nature of a crossaction, contending and asserting that the order of July 7, 1916, was void, and that the United States and the Interstate Commerce Commission are necessary parties; and ended with the prayer that the plaintiffs be denied all relief herein and defendants have judgment and costs; and, further, on the final hearing, said order of the Interstate Commerce Commission be annulled and wholly set aside.

To this answer the complainants filed a general and special replication, and, said answer having been served upon the United States and the Interstate Commerce Commission, each made a limited appearance by attorneys contesting the jurisdiction as against them.

It further appeared that 28 other railroads, wholly situated in the state of Texas and not original parties to the suit, filed their petition of intervention, joining the complainants in the original bill and adopting the allegations and prayers therein, and further showing that they had filed tariffs under the order of July 7, 1916, and further alleging that on the 14th day of October, 1916, the state of Texas, acting through her Attorney General, filed a suit in the district court of Travis county, state of Texas, against these interveners and other railway companies, wherein the state of Texas sought to enjoin the defendants from charging on and after November 1, 1916, higher rates. than those prescribed by the Railroad Commission of Texas and from using any classification other than those prescribed by the Railroad

Commission of the state of Texas; that they therein appeared and pleaded, setting up the proceedings before the Interstate Commerce Commission the order of July 7, 1916, that they had filed with the Interstate Commerce Commission tariffs in compliance with the order of said commission, the bill of complaint in this cause, and the restraining order issued thereon, and the filing of the answer of the Railroad Commission, etc.; that, on the hearing of the application for a temporary injunction in said cause, all of the facts alleged in said pleas to the jurisdiction were established by competent proof and were uncontradicted; and thereafter said court entered an order undertaking to restrain these interveners from charging higher rates than the rates prescribed by the Railroad Commission of Texas and from using or applying to shippers between points in the state of Texas any classification other than the classification prescribed by the Railroad Commission of the State of Texas; and also granting a writ of mandamus, etc.; and that an appeal was taken from the said orders which is now pending; and the interveners concluded with a prayer for a restraining order and injunction, etc.

It appears by the proof on this hearing that subsequent proceedings have been and are now pending before the Interstate Commerce Commission in the said consolidated causes, and that on the 26th of January, 1917, pursuant to a petition filed by the Attorney General of Texas and by various localities and commercial interests of Texas the commission entered a supplemental report and order in Railroad Commission of Louisiana v. Aransas Harbor Terminal & Railway Company et al., in which the proceedings in the five consolidated cases were reopened and leave was granted to the Attorney General of Texas and the Railroad Commission of Texas to intervene in a supplementary order as follows:

Upon consideration of various petitions filed in the above-entitled proceedings asking that they be reopened for further hearing and argument and of the oral argument had therein, it is ordered that these proceedings be and they are hereby reopened for further hearing; and it is further ordered that pending such hearing or hearings and decisions thereon the order of July 7, 1916, herein shall remain in full force and effect.

[1] From the foregoing, it clearly appears that the complainant carriers both in the original bill and the intervention are in jeopardy. If they fully comply with the order of the Interstate Commerce Commission and put in force the tariffs authorized by that body, they will be subject to a multiplicity of suits by the Railroad Commission of Texas and by shippers involving heavy and even confiscatory penalties. If, on the other hand, they do not comply with the order of the Interstate Commerce Commission, but do comply with the orders made and tariffs prescribed by the Railroad Commission of Texas, they will be subject to a multiplicity of suits with liability to be mulct in very large penalties.

It seems clear that they are entitled to the protection of the court. Ex parte Young, 209 U. S. 123, 28 Sup. Ct. 441, 52 L. Ed. 714, 13 L. R. A. (N. S.) 932, 14 Ann. Cas. 764; Wadley Southern Railroad v. Georgia, 235 U. S. 651, 35 Sup. Ct. 214, 59 L. Ed. 405.