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Erie Railroad Co. v. State

Decided: June 30, 1958.

ERIE RAILROAD COMPANY, A CORPORATION OF THE STATE OF NEW YORK, RESPONDENT-APPELLANT,
v.
STATE OF NEW JERSEY, PETITIONER-RESPONDENT, AND BOARD OF PUBLIC UTILITY COMMISSIONERS OF THE STATE OF NEW JERSEY, RESPONDENT, AND NEW YORK, SUSQUEHANNA AND WESTERN RAILROAD COMPANY, RESPONDENT-RESPONDENT



Goldmann, Freund and Conford.

Per Curiam

This is an appeal from a "Decision and Order" of the Board of Public Utility Commissioners dated August 12, 1957, ordering the Erie Railroad Company to "continue the operation of its passenger ferry service between Jersey City, New Jersey and Chambers Street, New York City, New York on and after August 15, 1957, and that the New York, Susquehanna and Western Railroad Company continue its use under contract of said passenger ferry service," pending a final determination by the Board in the proceeding. Leave to appeal from the order, as interlocutory, was granted by the Appellate Division. The making of the order came about as follows.

The railroad company operates a terminal in Jersey City on the west shore of the Hudson River in connection with the transportation of passengers and freight. For reasons based on the economics of the railroad industry not required to be presently detailed most of the railroad's passenger terminal operations have recently been transferred to the terminal of the D., L. & W.R.R. Co. (Lackawanna) in nearby Hoboken. The Erie's Northern Branch passengers and those of the Susquehanna which the Erie handles at Jersey City by contract have continued to use the Jersey City station. The plan for transfer of major passenger terminal operations to Hoboken included the abandonment of the Erie's passenger ferry service from the Jersey City station to Chambers Street, New York City, an operation

which is said to involve a monthly loss of $37,500 to the railroad company.

An application was filed with the Interstate Commerce Commission for leave to abandon the ferry service, and after hearings and an affirmative recommendation by an examiner, to which the State of New Jersey and the Board, as parties, filed exceptions, the Commission concluded that the public convenience and necessity permitted the abandonment of the ferry service and a certificate was issued dated June 15, 1957 authorizing its discontinuance on and after August 15, 1957.

On July 30, 1957 the State filed a petition with the Board asking that body to direct the railroad company to continue the operation of the ferry until the Board could decide the issue of public convenience and necessity. The Board issued an order to show cause returnable August 7, 1957. Thereupon the railroad company filed a complaint in the United States District Court requesting that tribunal to restrain the Board and the State from taking any action in the ferry matter. A statutory court was convened which, after hearing, refused to intervene.

On the return of the order to show cause before the Board the railroad company sought a dismissal of the proceedings on the grounds, inter alia , that the State and its agencies were without jurisdiction because the ferry is strictly an interstate operation and that the assumption of jurisdiction by the Board would offend the Commerce Clause of the United States Constitution. The matter was taken under advisement and the decision and order of August 12, 1957, under attack herein, followed.

On August 9, 1957 the State filed a complaint in the United States District Court attacking the validity of the certificate and order of the Interstate Commerce Commission, primarily on the ground that the Commission was without jurisdiction over the ferry matter because the statute, section 1(18) of the Interstate Commerce Act, as amended, 49 U.S.C. , ยง 1(18) (1952), grants authority to the Commission only over abandonments of lines of railroad or the operation

thereof, not over the partial discontinuance of service on a line. It was argued that for the Erie to retain its harbor freight business while being permitted to discontinue its passenger ferry service would not constitute an abandonment of a line of railroad over which the Commission's statutory jurisdiction would be operative. A federal statutory court agreed with the position of the State, and the order of the Commission was set aside on December 10, 1957. Board of Public Utility Commissioners of N.J. v. United States , 158 F. Supp. 104 (D.C.D.N.J. 1957); see, also, the companion case by the same name involving the Weehawken ferry, 158 F. Supp. 98 (D.C.D.N.J. 1957). An appeal from these decisions has recently been allowed by the United States Supreme Court and is pending.

The parties to this appeal have fully developed all aspects of the many complex problems frequently presented in determining whether the particular effort of a state or local agency to regulate, tax, or control an interstate ferry in respect to an aspect or interest argued to be primarily local or intrastate in nature or impact, runs afoul of the prohibitions against interference with or undue burdening of interstate commerce contrary to the Commerce Clause of the United States Constitution. We find it unnecessary to pursue these inquiries in the present case because we deem the particular kind of regulatory control sought here to be exercised over this ferry operation to transcend the territorial jurisdiction of the State and the Board, within the controlling decision of the New Jersey Supreme Court in Pennsylvania Railroad Company v. Board of Public Utility Commissioners , 11 N.J. 43 (1952).

The Board in the case before us orders the railroad company to "continue the operation of its passenger ferry service between" Jersey City and Chambers Street, New York City. This in effect commands the railroad to run its ferries across the state line in the Hudson River into the State of New York, to discharge its passengers there, and to pick up passengers at ...


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