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December 7, 1961

UNITED STATES of America, Interstate Commerce Commission, State of New Jersy, and Board of Public Utility Commissioners of the State of New Jersey, Defendants

The opinion of the court was delivered by: WORTENDYKE

In this action the plaintiff, Susquehanna, seeks a judgment setting aside two certain 'orders' of the Interstate Commerce Commission made on January 18, 1961 and May 10, 1961, respectively.

This Court has jurisdiction by virtue of the provisions of 28 U.S.C. § 1336, which is being exercised appropriately as a three-judge court in accordance with the procedure prescribed by §§ 2321 to 2325 inclusive, and § 2284 of the same Title.

 The Commission's order of May 10, 1961 was a denial of a petition for reconsideration of its order of January 18, 1961. Thus plaintiff exhausted its administrative remedy before the Commission before coming here. 49 U.S.C.A. § 17(9); United States v. Abilene & Southern Railway Co., 1924, 265 U.S. 274, 44 S. Ct. 565, 68 L. Ed. 1016.

 Susquehanna operates a line of railroad as a common carrier for the transportation of passengers from Butler, New Jersey, to New York City. For its corporate history, see In re New York S. & W. R. Co., 3 Cir. 1940, 109 F.2d 988. The railroad runs three passenger trains in each direction daily, except Saturdays, Sundays and holidays, during commuters' hours only, and no mail, baggage or express is handled thereon. If the operation of these trains is discontinued, no passenger service will be furnished by the carrier. Each train consists of a single-unit diesel locomotive and a single trailing passenger car, and has a crew consisting of an engineer, a fireman, a conductor and a brakeman. Although its trains do not travel eastwardly of a transfer point in North Bergen, New Jersey, its passengers for and from New York City are transported by bus, via the Lincoln Tunnel beneath the Hudson River, between that transfer point and the bus terminal of the Port of New York Authority at 41st Street and Eighth Avenue, in Manhattan. The buses so employed are owned and operated by Public Service Coordinated Transport, a New Jersey corporation, unaffiliated but under contract with the plaintiff.

 The provisions of Part I of the Interstate Commerce Act apply to Susquehanna. Its railroad includes terminal facilities for the transportation of its passengers and such transportation includes a contract bus service as an instrumentality or facility for the carriage of its passengers between its transfer point in New Jersey and its terminal in New York. Such bus transportation must be considered as performed by Susquehanna, and is subject to regulation 'in the same manner as, the transportation by railroad * * * to which such (bus) services are incidental.' 49 U.S.C.A. § 302(c). See New York Dock Railway v. Pennsylvania Railroad Co., 3 Cir., 1933, 62 F.2d 1010, cert. den. 289 U.S. 750, 53 S. Ct. 694, 77 L. Ed. 1495; United States v. Motor Freight Express, D.C.N.J.1945, 60 F.Supp. 288. The Interstate Commerce Commission has regulatory jurisdiction over Susquehanna and its contract bus facility despite the fact that the railroad is a New Jersey corporation whose entire trackage is within that State. Cincinnati, New Orleans & Texas Pacific Railway v. Interstate Commerce Commission, 1896, 162 U.S. 184, 16 S. Ct. 700, 40 L. Ed. 935; Interstate Commerce Commission v. Detroit, Grand Haven & Milwaukee Railway Co., 1897, 167 U.S. 633, 642, 17 S. Ct. 986, 42 L. Ed. 306. The Commission has recognized and exercised that jurisdiction. See New York, S. & W.R. Co., Common Carrier Application (1942) 34 M.C.C. 581; on rehearing (1946) 46 M.C.C. 713. See also Commutation Fares, New York S. & W.R. Co. (1951) 280 I.C.C. 31. In its Local Passenger Tariff S-W 11, issued September 10, 1960, effective September 21, 1960, under Authority of Special Permission of the Interstate Commerce Commission in Finance Docket No. 20567, New York, Susquehanna & Western Railroad Company -- Abandonment of Operation Jersey City, N.J., dated August 8, 1960, plaintiff carrier advertises its fares for passenger transportation throughout its line extending between New York, N.Y., and Butler, N.J.; an aggregate distance of 37.9 miles. Paragraph 11 of the carrier's Rules and Regulations, published in its said Tariff, is captioned, and reads as follows:

 'Motor-Coach Terminal Service -- New York, N.Y.

 'Available only to passengers holding tickets reading as described in paragraph 1 below, upon payment of charge shown in paragraph 2 below:

 '1. To or from stations on the New York, Susquehanna and Western Railroad Company, Babbitt, N.J., and stations West Thereof, on the one hand, and New York N.Y., via the Susquehanna Transfer, N.J., on the other.

 '2. Motor-coach fare in each direction between North Bergen, N.J. and New York, N.Y., 25 cents.'

 Erie's discontinuance of its ferry service pursuant to the provisions of 49 U.S.C.A. 13a(1) had deprived plaintiff of the availability of this ferry service for its passenger transportation into and out of New York City. For background history of the Erie passenger ferry abandonment, see State of New Jersey et al. v. United States et al., D.C.N.J.1958, 168 F.Supp. 324, affd. Bergen County v. U.S., 1959, 359 U.S. 27, 79 S. Ct. 607, 3 L. Ed. 2d 625, reh. den. 359 U.S. 950, 79 S. Ct. 722, 3 L. Ed. 2d 683.

 On January 9, 1961, the State of New Jersey and its Board of Public Utility Commissioners filed a petition with the Interstate Commerce Commission praying that an investigation of plaintiff's proposed train discontinuance be entered upon by the Commission, and that plaintiff's Notice be dismissed without prejudice, upon the ground that its case before the Commission was improperly brought under section 13a(1). To that petition Susqehanna filed an Amended Reply on February 20, 1961, wherein the carrier joined issue upon the contentions made in the petition. *fn1" By order of Division 4 of the Commission, made on January 18, 1961, the proceeding instituted by plaintiff's Notice was dismissed for lack of jurisdiction because the Commission found that each of the trains proposed to be discontinued by the plaintiff operates solely within the State of New Jersey. The Commission concluded that Susquehanna's Notice, was, therefore, improperly filed under section 13a(1) of the Act. On February 20, 1961, the Railroad filed a Petition for Reconsideration of the Commission's order of January 18, 1961. The Petition for Reconsideration was denied by the Commission's order of May 10, 1961.

 The Commission's refusal to reconsider its order denying jurisdiction of the proceeding instituted by the plaintiff under section 13a(1) of the Act constitutes a proper basis for the exercise of the jurisdiction of this Court created by 49 U.S.C.A. § 17(9) and 28 U.S.C. § 1336. The present action presents the single question whether the provisions of section 13a(1) have been appropriately invoked by the plaintiff for the purpose of effecting a discontinuance of its passenger trains enumerated in the Notice filed with the Commission. The position of the defendants in the case is disclosed in their contention that section 13a(1) is applicable only to the discontinuance of 'the operation or service of any train or ferry operating from a point in one State to a point in any other State.' Because the trains which plaintiff would discontinue do not actually run across the dividing line between New Jersey and New York, but only between points within the State of New Jersey, defendants argue that application for relief before the Interstate Commerce Commission is governed by subsection 13a(2). *fn2" Defendants United States and Interstate Commerce Commission further assert that 'the Legislative history of section 13a(1) supports the view that it is intended to allow discontinuance of only trains or ferries, but not of ...

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