Ferguson-Steere Motor Company v. United States , 126 F. Supp. 588 ( 1954 )

HUTCHESON, Circuit Judge.

This is an action brought under Sections 1336, 1398, and 2321-2325 of Title 28, United States-Code, to set aside and 'annul an order of the Interstate Commerce Commission, hereinafter called the Commission, entered under the provisions of Section 216(g)¹ of the Interstate Commerce Act, wherein the Commission suspended certain schedules of rates ■ proposed by the plaintiff and instituted an investigation concerning the lawfulness of said rates.

The schedules in question were filed by the plaintiff with the Commission to become effective on July 28, 1954, and provided for reductions in rates and charges for the transportation of petroleum products in tank trucks from points in Texas to points in New Mexico. On July 26, 1954, the Interstate Commerce Commission, Board of Suspension, entered the order referred to above, in which it was stated:

“That said schedules make certain reductions in ratfes and charges for the transportation in interstate or foreign commerce of petroleum products in tank trucks and that the rights and interests of the public would be injuriously affected thereby.”

On July 29, 1954, the plaintiff filed a Petition for Reconsideration, in which it requested Division 2 of the Commission, the appellate division designated to consider and act upon petitions for reconsideration in such matters, “to cancel and nullify the order heretofore entered herein and to allow the suspended schedules to become effective.”

On September 17, 1954, the Commission, Division 2, acting as an appellate division, denied the petition, stating:

“That sufficient reasons have not been shown for vacation of the order described above.”

Thereupon, the plaintiff, on October 15, 1954, filed the complaint herein, in which it prays that a three judge court be convened, and that upon final hearing the order of July'26, 1954, be adjudged null and void; that the enforcement, operation and execution of said order be permanently enjoined; and that such other relief may be granted as to the Court may seem proper.

Counsel for the United States, and they are various and sundry, instead of admitting or of answering and joining issue with the allegations of the complaint, make what might be called a small dissertation or essay on “The legislative scheme of regulation provided for by the Interstate Commerce Act”, in the course of which they advert to the past and present relation of the antitrust laws to the activities of carriers, and the place of the commission in that relation, and express doubt whether the practice of the commission “in invariably giving the same reason for every suspension”, namely “that the rights and interest of the public would be injuriously affected thereby”, is in accordance with the statute, 49 U.S.C.A. § 316(g).

Having thus contributed to the general enlightenment or the obfuscation of all concerned, they conclude, “Wherefore the United States says that it neither admits nor denies the plaintiff’s allegations. The United States takes a neutral position. The United States does not oppose the order. The United States does not support the order at this juncture.”

The Interstate Commerce Commission intervened in said action, and filed its answer, praying that the complaint be dismissed and that the relief prayed for be denied, and all parties appearing, the cause was heard and submitted on oral argument and briefs, and now stands for decision.

While plaintiff in its argument concedes that Motor Carriers “are subject to regulation by the commission in rather meticulous detail, as set forth in part 2 of the Interstate Commerce Act (49 U.S.C., Sec. 301 et seq.)”, it nevertheless insists that “Such carriers retained under the act the right to initiate their own rates”;² that “Any derogation of that right must be carefully scanned to see if it is bottomed on sound statutory authority”; and that the “power to suspend the operation of a tariff schedule is interwoven with and is an integral part of the right and power of the Commission to enter upon a hearing concerning the lawfulness of such rate.”

So insisting, it urges upon us that the provision of Section 316(g) of the Act, authorizing the Commission to “suspend the operation of such schedule and defer the use of such rate * * * ” by filing with such schedule and delivering to the carrier or carriers affected thereby a statement in writing of its reasons for suspension” (emphasis supplied), must be strictly construed and rigidly applied to require a statement of reasons, given specific application to the rate or schedule deferred or suspended and as specifically pointing out wherein the rate or schedule is unlawful and why it should be suspended or deferred.

Planting itself on these premises, it argues with force and vigor in effect: that the so-called reason put forward by the Commission in support of its suspension order is not a reason at all but a mere excuse, indeed “is nothing more than a tired overworked phrase which says nothing and means less”, put forward as face saving in support of an order which would otherwise be mere fiating; and that since this is so, the Commission has exceeded its authority in ordering a suspension without complying with the statute, and the order must be adjudged void, and its operation enjoined.

The Commission, evidently of the opinion that if it can be saved from its friends it can take care of its enemies, boldly and confidently opposes to plaintiff’s position two propositions,³ either of which, if decided in its favor, would require the denial of the relief plaintiff seeks. In support of its first proposition, the Commission, citing many eases,⁴ urges upon us that if the Court should vacate the suspension order and thereby permit the reduced rates to become effective, it would be in effect prescribing or fixing new rates which it has been uniformly held the courts have no power to do.

In support of its second proposition, the Commission urges that the reason given by the Commission is patently adequate and that the judicial function is exhausted where it is found to constitute a rational basis for the conclusions approved by the administrative body, since the Courts are not concerned with the correctness of the Commission’s reason or with the consistency and inconsistency of decisions which it has rendered.

Pointing out that the order does not constitute a final determination with respect to the reasonableness and lawfulness of the proposed schedules but serves only as an interim action, to preserve the status quo while the Commission is making the investigation required to determine whether the proposed rate is or is not lawful, and that under the law the suspension can continue effective only for the maximum'period fixed by statute, the Commission presses upon us that for the Court to sustain the plaintiff’s contention here would be for it to invade the province of the Commission in a matter which the Congress, without definition or limitation, has confided broadly to the Commission.

In addition, the Commission cites as directly in point a decision of a statutory three judge court,⁵ in the case of Hudson and Manhattan Railroad Co. v. U. S. and Interstate Commerce Commission, decided July 16, 1951, and in support of its citation attaches a copy of the unreported opinion to its brief.

In that case, one of the grounds of attack upon the order of suspension was that it did not sufficiently set forth reasons therefor. The Court dismissed the complaint, stating correctly, we think, with respect to this ground, “The order distinctly stated that the tariffs in question make certain increases in fares for the interstate transportation of passengers, and, the rights and interests of the public appearing to be injuriously affected thereby, we hold this to be adequate compliance with 49 U.S.C., Sec. 15(7) that it contain a statement of the reasons for the suspension.”

Plaintiff cites no cases from any court, specifically sustaining its view that the provision of the statute, for giving the carrier reasons, is mandatory rather than directory in the sense that it is for the courts to test and determine the sufficiency of the reasons given. It cites no case in which a suspension order was enjoined for want of adequate reason. It. nevertheless insists that the Commission is wrong on both of its grounds and the injunction prayed for should be granted.

We do not think so. Without discussing or dealing with the Commission’s first proposition: that suspension orders are not subject to court review further than to say of it, that whether this is true to the full extent claimed by the Commission, it is certainly true that the making of the orders is confided to the discretion of the Commission, and that only upon the closest and most compelling showing that discretion was not exercised at all, or, if exercised, was abused, would a court interfere with a suspension order; we think it clear that, considering the reason given by the Commission in this case in the light of this compelling principle, it cannot be said of it that it was no reason at all and that the Commission, therefore, entered the order not in the exercise of its discretion and in compliance with the statute but without the exercise of discretion and in defiance of the statute.

This is not to say that we endorse, as the best type of administration, the practice, if it is the practice of the Commission, of employing a rubric such as the one employed here to keep the promise to the ear while it breaks it to the hope of the carrier. Indeed, of quite the contrary opinion, we believe the Commission would be better advised to make as clear as it can in each case wherein lies the rub of the suspended rate or schedule. It is to say, though: that when, as here, the question is one of the power and duty of the Court to interfere because the Commission has acted in violation, or without the authority, of law, it is not for the Court to tithe mint, anise and cumin by rejecting the words chosen by the Commission to convey its reasons to the carrier; and that to sustain the attack upon the order would be to do just that.

The relief sought by plaintiff is denied. Its bill is dismissed for want of equity.

1 . As material here, this section provides: “Whenever there shall be filed with the Commission any schedule stating a new individual or joint rate, fare, charge, or classification *. * *, the Commission is authorized and empowered * * * to enter upon a hearing concerning the lawfulness of such rate, fare, or charge, or such rule, regulation, or practice, and pending such hearing and the decision theroon the Commission, by filing with such schedule and delivering to the carrier or carriers affected thereby a statement in writing of its reasons for such suspension, may from time to time suspend the operation of such schedule and defer the use of such rate, fare, or charge, .or such rule, regulation, or practice, but not for a longer period then seven months beyond the time when it would otherwise go into effect; * * *. If the proceeding has not been concluded and an order made within the period of suspension, the proposed change of rate, fare, or •charge, or classification, rule, regulation, or practice, shall go into effect at the end of such period: * *

2 . New York Central R. Co. v. United States, D.C., 99 F.Supp. 394, 398, 399; Skinner & Eddy Corp. v. United States, 249 U.S. 557, 564, 39 S.Ct. 375, 63 L.Ed. 772.

3 . (1) The Commission has the sole discretion in determining whether published rates shall be suspended or not. The Courts have refused to review the Commission’s action in suspending or refusing to suspend schedules of rates, and it is firmly established that they will not undertake to perform the administrative functions of the Commission in this regard.

(2) The suspension order entered by the Commission complies with the provisions of Section 216(g) of the Interstate Commerce Act, 49 U.S.C.A. § 316(g).

4 . Board of Railroad Com’rs of State of North Dakota v. Great Northern R. Co., 281 U.S. 412, 50 S.Ct. 391, 74 L.Ed. 936; Carlsen v. United States, D.C., 107 F.Supp. 398; M. C. Kiser Co. v. Central of Georgia Ry. Co., D.C., 236 F. 573; Manhattan Transit Co. v. United States, D.C., 24 F.Supp. 174; Merchant Truckmen’s Bureau of New York v. United States, D.C., 16 F.Supp. 998.

5 . The United States District Court for the Southern District of New York, composed of Thomas W. Swan, Chief Judge United States Court of Appeals for the Second Circuit, and Sidney Sugarman and Edward Weinfeld, United States District Judges.