CITY OF NEWTON & another [Note page535-1] vs. DEPARTMENT OF PUBLIC UTILITIES & others.

CUTTER, J. The city of Newton and Newton Improvement Association seek review under G. L. c. 25, Section 5 (as amended through St. 1956, c. 190), [Note page537-1] of a decision of the department of public utilities (the department) authorizing (a) the abandonment by the Boston and Albany Railroad Company and by its lessee, the New York Central Railroad Company (hereinafter together called the railroads), of several passenger stations, and (b) the discontinuance of certain trains and of stops of other trains. The department and the railroads demurred and answered. A single justice reserved the case without decision upon the petition, the demurrers, the answers, and the complete record before the department for the decision by the full court of the questions of law thereby presented.

The railroads asked to discontinue six trains eastbound and four trains westbound between South Station and Riverside,

Page 538

substituting stops at Riverside and intermediate stations (so far as not to be abandoned) by trains running between Framingham and South Station. Some of these trains would operate "on a so called `skip-stop' arrangement under which . . . [they] will omit a stop at every other station, which . . . in turn will be served by the next succeeding train." [Note page538-1] The railroads also sought discontinuance of all service at Newton station near Newton Corner so called (and certain other stations here not in controversy). The petition for review (a) requests that the department's decision be set aside in the respects in which it affects the city of Newton, and (b) asserts error in the denial and granting of requests for rulings.

The decision includes the following findings. The discontinuance of other "rush-hour trains . . . in the light of the alternative service which is proposed" will result in "[s]ome reduction in the . . . trains stopping at" various stations from Newtonville west, but "the service . . . to be continued . . . will be such that all of the passengers now using the trains during rush hours will have trains available . . . which will permit them to arrive [at] and depart from Boston at substantially the same times" as at present. For these stations "[f]requent service will still be available. In many cases the service will be faster . . . and in almost every case a train will be available within five to ten minutes earlier or later than the trains . . . to be discontinued." Riverside "will no longer be used as a transfer point, and commencing in July, 1959, frequent MTA [Metropolitan Transit Authority street car] service will be available" there.

There also "is alternative MTA service near the Newton station . . . Newtonville station, where frequent railroad service will still be available, is approximately one mile from the Newton station. Many people today make the trip from their home[s] to the station by automobile and the additional

Page 539

travel to Newtonville will not seriously inconvenience them. . . . [N]o fixed rule . . . requires that a station be available to patrons less than one or even two miles from their homes. Many people today travel greater distances to . . . railroad service. . . . [T]he riding habits of the public have changed measurably in recent years. The public and the railroad service must be mutually adjusted to these changing travel patterns. While the passengers using the Newton station may no longer enjoy an unusually advantageous position, the availability of railroad service or alternative forms of public transportation will continue at least to be equal to that of a great number of other people presently using railroad service. Considering the interests of all the railroad's suburban passengers . . . public convenience and necessity would not be served by requiring the railroad to continue to serve the Newton" station, although approximately four hundred people use it each day in each direction.

"Since 1952 when . . . [New York Central] earned a net income of $52 million its earnings have deteriorated steadily. In 1957 its net income was approximately $8.4 million and for the eleven months ending November 30, 1958, it showed a deficit from operation in excess of $1 million. Subsequent unaudited figures for the full year . . . showed a net income of . . . $4 million, but this figure included . . . $13 million of retroactive mail payments . . . attributable to prior years. . . . [T]he passenger service is operating at a considerable deficit . . . [which] appears to be . . . increasing . . .. A higher proportion of the freight income is required to absorb the passenger deficit. This proportion reached 64% in 1957. The number of commutation passengers carried on the . . . Central System . . . decreased by approximately 36% between 1947 and 1957 and by 4.26% between 1952 and 1957. During the same periods commutation revenues have, nevertheless, increased due to . . . fare increases . . .. Within the Boston and Albany division commutation passengers . . . decreased from 3.1 million in 1952 to 2.8 million in 1957 . . .. Moreover, in

Page 540

1958 2.4 million passengers were carried, a decrease of over 400,000 passengers from the preceding year. When this information is evaluated . . . with the fact that a fare increase . . . was recently made applicable to commutation travel on the . . . division, these figures suggest that fares may have reached a level which will no longer permit the railroad to maintain or increase passenger revenues by . . . further fare increases, since any substantial fare increase appears likely to cause a serious decline in the number of passengers carried, which may offset in large part the revenue increase expected to result."

The department estimated that the "net annual saving from the grant of the petition" would be $77,665 even if all the Newton station "passengers no longer ride the railroad" so that the total revenue ($87,001 in 1958 projected to present fare levels) from Newton passengers is lost. If all or a portion of the Newton passengers go to Newtonville to take the train the savings would be greater.

The department ruled that the "mere fact that the railroad could effect some savings if the petition were allowed, is not in itself a sufficient ground for permitting the discontinuance of service," but that the department "must judge whether public convenience and necessity requires . . . continuation of the service." The decision pointed out, "however, that in a period of declining patronage and increasing costs, railroad passenger travel in its entirety is threatened. Economies in operating . . . should be encouraged in order that essential service can be preserved. The convenience resulting from the operation of any particular trains or the stopping at particular stations must be evaluated within the context of the entire passenger service. When so viewed, there may be instances where the discommoding of some passengers is necessary in order that service to the many may be preserved."

The decision reviewed the evidence showing that, apart from minor "savings resulting from the discontinuance of . . . five stations [including Newton station], the major objective was the improvement of the service rendered to

Page 541

passengers from Newtonville . . . and . . . stations west of Newtonville. . . . All of these [five] stations are within very short distance of MTA service. . . . If we were to decide cases . . . on the basis that it cost the railroad nothing to stop a train, we could be . . . requiring the railroad to stop so frequently that its service would approximate a local transit service. Such frequent stopping is not fair to the great majority of passengers who must ride long distances . . . and who have no alternative transportation. Railroad commutation service depends on the road being able to retain its present patronage . . . wherever the service is essential and perhaps to attract additional patronage in the longer haul category."

1. The department has broad general power of regulation of carriers, including railroads. G. L. c. 159, Sections 10, 12 (a) (as amended through St. 1945, c. 175), Sections 13, 16, 16A, 24, 105; also c. 160, Sections 128 (as amended through St. 1922, c. 116), 128A (inserted by St. 1957, c. 159), [Note page541-1] and 129. Under c. 159, Section 12, the department is given "general supervision and regulation of . . . the following services, when furnished . . . for public use within the commonwealth," including "(a) [t]he transportation . . . of persons or property . . . between points within the commonwealth by railroads." By Section 16, the department is given power after hearing, if in its "opinion . . . the regulations . . . or service of any common carrier are . . . inadequate," to determine the "service thereafter to be used," [Note page541-2] and, by Section 16A, the "department

Page 542

before authorizing any railroad to discontinue . . . any . . . lines, stations or . . . service, may consider, in addition to other facts, the revenues of said railroad from all sources."

2. The demurrers present the question whether the petitioners have standing to seek judicial review of the department's decision under G. L. c. 25, Section 5, as amended, or under G. L. c. 30A, Sections 1 (1), 1 (3), 10 and 14 (as amended through St. 1957, c. 193, Section 1). [Note page542-1]

Procedure before the department is now governed by the State administrative procedure act found in G. L. c. 30A. See St. 1955, c. 285, Section 1, amending G. L. c. 25, Section 4. See also 1955 Annual Survey of Mass. Law, Sections 13.1, 15.17. Since "legal rights . . . of specifically named persons" (the railroads) were required to be determined (under c. 160, Sections 128 and 128A) after hearing, the department hearings were "adjudicatory proceedings" under c. 30A, Section 1 (1), at least as to the railroads. See Norwood Ice Co. v. Milk Control Commn. 338 Mass. 435. Cf. Hayeck v. Metropolitan Dist. Commn. 335 Mass. 372, 373, 375; Natick Trust Co. v. Board of Bank Incorporation, 337 Mass. 615, 617; Allied Theatres of New England, Inc. v. Commissioner of Labor & Ind. 338 Mass. 609.

The transcript of testimony before the department (but not the city's petition in this court) shows that the department did permit the city by counsel to participate in the hearing, to cross-examine witnesses, and to argue. It is not clear, however, whether this was intended to constitute

Page 543

allowance of formal intervention under Section 10 (4), [Note page543-1] under which the department has discretion either (a) to admit appropriate interveners for the protection of proper interests (see the power of this court in equity proceedings, Boston Real Estate Bd. v. Department of Pub. Util. 334 Mass. 447, 482), or (b) to refuse to permit intervention.

Even if we assume that the city properly became an intervener before the department, the administrative procedure act (c. 30A) does not control the question of standing to seek review of decisions of the department, for c. 25, Section 5, expressly limits such standing to "an aggrieved party in interest." [Note page543-2] There has long been uncertainty about the persons within that description. In Donham v. Public Serv. Commrs. 232 Mass. 309, 328-329, it was suggested that "public interests are entrusted to the Attorney General," but in Fall River v. Public Serv. Commrs. 232 Mass. 329, a proceeding by a city to review a departmental decision was dismissed on the merits without mention of the city's standing, as to which in the Donham case it was said that it had "not been contended that . . . [the city] may not itself bring a petition." See A. B. & C. Motor Transp. Co.

Page 544

Inc. v. Department of Pub. Util. 327 Mass. 550, 551. In Flynn v. Department of Pub. Util. 302 Mass. 131, 134-135, Malden v. Metropolitan Transit Authy. 328 Mass. 491, 492, New Bedford v. New Bedford, Woods Hole, Martha's Vineyard & Nantucket S.S. Authy. 329 Mass. 243, 248, Natick Trust Co. v. Board of Bank Incorporation, 337 Mass. 615, 617, and Retail Stores Delivery, Inc. v. Department of Pub. Util., ante, 441, 443, the question of standing to seek comparable review either was not decided or was not discussed. American Can Co. of Mass. v. Milk Control Bd. 313 Mass. 156, 160-162, contains language which tends to a broad interpretation of statutory words defining standing for purposes of judicial review of administrative decisions. The American Can Co. case, however, arose under a statute (G. L. c. 94A, Section 21, inserted by St. 1941, c. 691, Section 2) giving a right of review to "[a]ny person aggrieved," whereas Section 5 gives a right of review only to "an aggrieved party in interest" (emphasis supplied). See also Davis, Administrative Law (1958 ed.) Sections 22.01-22.18 esp. Sections 22.05-22.06.

We need not decide whether, under the provisions and principles which have just been discussed, the city could properly have been treated as a formal intervener for all purposes before the department. The city's petition in this court does not allege facts which show either (a) that the department did in fact exercise any discretion which it may have had under c. 30A, Section 10 (4), to admit it as such an intervener, or (b) that, as a matter of law, the city was entitled to intervene before the department and was refused that right. In the absence of allegations showing that the city was properly a party before the department and had an interest sufficient to make it "aggrieved," or was unlawfully refused permission to become a party, the city has not made allegations which, if sustained in the record before the department, would establish standing to seek review under c. 25, Section 5. The demurrers must be sustained.

3. We proceed to a consideration of the merits of the case because of the possibility that the city and the association may seek to amend their petition and because of the ambiguity

Page 545

of the department's action with respect to permitting them to be heard before it. Upon the merits, also, they could not prevail.

In a case like this where no constitutional issues (see Opinion of the Justices, 328 Mass. 679; cf. Lowell Gas Co. v. Department of Pub. Util. 324 Mass. 80, 86) are directly involved, the department (not the courts) is to determine, in accordance with the statutes cited, questions of regulatory policy and fact. The department's determination is subject to review (under G. L. c. 25, Section 5) by this court "as to matters of law."

The principal contentions of the city and the association are (a) that the department "failed properly to evaluate the public convenience . . . with respect to passengers to and from Newton station," and (b) that there was "no showing of loss from the operation of the trains" and service under discussion. It is also contended that the department incorrectly granted rulings sought by the railroads, and improperly denied six requests of the city for rulings, among other things, (a) that the department could not grant various aspects of the relief sought by the railroads (requests numbered 1 and 4) in the absence of substantial evidence that there were "above the rail losses" [Note page545-1] involved in maintaining the particular train, service, stops, or station sought to be discontinued, and (b) that it could not, in the absence of such substantial evidence, take into account factors such as (i) the inconvenience of passengers boarding and leaving trains at points more remote from Boston than the several Newton stations (requests numbered 3 and 7), and (ii) the existence of alternative means of mass transportation (request numbered 6). A further request (numbered 5) asked a ruling that the railroads could not prove above the rail losses of trains they proposed to discontinue by comparison

Page 546

of operating expenses of such trains with revenues "from only selected stations."

The applicable statutes, already cited, do not specify the standard to be applied by the department in granting or refusing its consent to a modification of railroad service. The duty of service imposed upon a railroad, however, exists by reason of the "interests of public convenience." See Department of Pub. Util. v. Eastern Mass. St. Ry. 327 Mass. 450, 454. Accordingly, the department should apply the standard of public convenience and necessity when giving or refusing consent to changes in the requirements imposed by that duty. See Commonwealth v. Fitchburg R.R. 12 Gray 180, 187-190 (broad range of factors considered); Selectmen of Amesbury v. Citizens Elec. St. Ry. 199 Mass. 394, 400-401; City Council of Salem v. Eastern Mass. St. Ry. 254 Mass. 42, 45 (department "not governed solely by the necessity and convenience of the . . . neighborhood . . . but may . . . consider the necessity and convenience of the general public"); Boston, Worcester & N. Y. St. Ry. v. Commonwealth, 301 Mass. 283, 284-285 (discontinuance of location "determined broadly from the standpoint of the public interest in the service"). These Massachusetts decisions are supported by the great weight of authority elsewhere: Illinois Cent. R.R. v. Illinois Commerce Commn. 410 Ill. 77, 82-83, 85-86 ("consideration must be given to the fact that railroads no longer have a monopoly" in view of bus lines, private automobiles, etc.); Thompson v. Illinois Commerce Commn. 1 Ill. 2d 350, 353, 357-358; In re application of Chicago, B. & Q. R.R. 152 Neb. 352, 359-364, also 367, 372-373 (older precedents no longer applicable in view of the "transportation revolution wrought by" motor vehicle); Boston & Maine R.R. v. State, 97 N. H. 380, 385 ("public good . . . [is to] be determined from the broad standpoint of transportation requirements as a whole"); Pennsylvania-Reading Seashore Lines v. Board of Pub. Util. Commrs. 5 N. J. 114, 124-131 (but see In re New Jersey & N. Y. R.R. 12 N. J. 281, 289-291); In re Central R.R. of N. J. 41 N. J. Super. 495, 501-504;

Page 547

Pennsylvania R.R. v. Board of Pub. Util. Commrs. 48 N. J. Super. 216, 224-230 (proper "to take . . . notice of the situation of all railroads as . . . to passenger service and its draining effect"). [Note page547-1] See also Barnes, Economics of Pub. Util. Regulation, 755-756; annotation, 10 A. L. R. 2d 1121. Cf. the somewhat analogous standard applied in abandonment and extension proceedings under the interstate commerce act as amended; 49 U. S. C. (1952) Sections 1 (18)-1 (22); Colorado v. United States, 271 U.S. 153, 167-169; Sharfman, Interstate Commerce Commission, vol. III-A, 327-338, 343; Cherington, Regulation of Railroad Abandonments, 119-158. Cf. also Texas v. United States, 292 U.S. 522, 530-532, and cases cited; Schaffer Transp. Co. v. United States, 355 U.S. 83, 92-93; American Trucking Assns. Inc. v. United States, 355 U.S. 141, 152-154.

We hold that, where constitutional issues are not presented, the department is entitled to consider any relevant aspects of the transportation of passengers and freight within the Commonwealth in deciding how the public convenience best will be served, when particular proposals for changes come before it. The department could weigh all the factors mentioned in its decision. It was not obliged to find (where no constitutional issue was raised) in any particular manner or by any single formula the precise amount of avoidable cost or loss involved in continuing the existing service, stops, and stations, or any component part of the service proposed for discontinuance. It properly could give attention to general transportation conditions on these and

Page 548

other Massachusetts railroads (see Annual Survey of Mass. Law, 1955, Section 15.14, n. 6; 1956, Section 15.10; 1957, Section 26.5; 1958, Section 16.6). The petitioners' requests for rulings could not have been given for they defined much too narrowly the authority of the department.

There was no error in giving the rulings requested by the railroads, which asked the department to reach conclusions, already outlined, justified by subsidiary findings and by substantial evidence. The granting of the railroads' request numbered 12, [Note page548-1] we interpret as ruling that the department in determining public convenience is to act without giving controlling weight to "purely local considerations," which, of course, must be considered. See Board of Survey of Arlington v. Bay State St. Ry. 224 Mass. 463, 470. What the department meant by this ruling is sufficiently indicated by its correct statement that the "convenience resulting from the operation of any particular trains or the stopping at particular stations must be evaluated within the context of the entire passenger service. . . ."

Examination of the transcript of testimony and the exhibits [Note page548-2] shows that the department's subsidiary findings were justified by substantial evidence "such . . . as a reasonable mind might accept as adequate to support a conclusion." See G. L. c. 30A, Sections 1 (6), 14 (8) (e); Maniscalco v. Director of the Div. of Employment Security, 327 Mass. 211, 214; Malden v. Metropolitan Transit Authy. 328 Mass. 491, 495; 1954 Annual Survey of Mass. Law, Sections 14-14.22; note 67 Harv. L. Rev. 845, 860. The department could reasonably conclude, from the evidence and the aggregate of all the findings and considerations mentioned in its opinion, that the comprehensive revision of service proposed was

Page 549

a method of saving annually not less than $77,665 (and possibly much more) consistent with the public convenience and interest and with preserving more essential passenger transportation.

4. The demurrers are to be sustained. A final decree is to be entered dismissing the petition.

So ordered.