Admiral-Merchants Motor Freight, Inc. v. United States, Civ. A. No. C-2030.

• Decision Date: 14 January 1971
• Docket Number: Civ. A. No. C-2030.
• Citation: 321 F. Supp. 353
• Parties: ADMIRAL-MERCHANTS MOTOR FREIGHT, INC., et al., Plaintiffs, v. UNITED STATES of America and Interstate Commerce Commission, Defendants.
• Court: U.S. District Court — District of Colorado

321 F. Supp. 353

ADMIRAL-MERCHANTS MOTOR FREIGHT, INC., et al., Plaintiffs, v. UNITED STATES of America and Interstate Commerce Commission, Defendants.

Civ. A. No. C-2030.

United States District Court, D. Colorado.

January 14, 1971.

George D. Michalson, Kansas City, Mo., Rice, Carpenter & Carraway by Roland Rice, Washington, D. C., Jones, Meiklejohn, Kehl & Lyons by Alvin J. Meiklejohn, Jr., Arthur R. Hauver, Denver, Colo., for plaintiffs.

Walker B. Comegys, Acting Asst. Atty. Gen. by John H. D. Wigger, Dept. of Justice, Washington, D. C., James L. Treece, U. S. Atty., Denver, Colo., for the United States.

Fritz R. Kahn, Gen. Counsel by Leonard S. Goodman, Associate Gen. Counsel, I. C. C., Washington, D. C., for the I. C. C.

Belnap, McCarthy, Spencer & Hardy, Washington, D. C. by Charles J. McCarthy, Richard J. Hardy, Washington, D. C., John J. Conway, Denver, Colo., for intervenor Drug & Toilet Preparation Traffic Conference.

Before LEWIS, Circuit Judge, and KERR and DOYLE, District Judges.

MEMORANDUM OPINION AND ORDER

WILLIAM E. DOYLE, District Judge.

I. FACTS

This is an action seeking judicial review of a Decision and Order of the Interstate Commerce Commission entered in that Commission's Docket No. 34971, Increased Rates and Charges, From, To and Between Middlewest Territory, 335 I.C.C. 397 (June 5, 1969), as modified by Order of August 29, 1969. Plaintiffs assert that insofar as that order purports to or does order them to refund certain portions of a disputed rate increase schedule, that portion of the order should be set aside and annulled, and the enforcement of it enjoined, as beyond the statutory authority and jurisdiction of the Commission.

The transactions leading up to the present controversy began when certain motor carriers of property, including plaintiffs herein, which were parties to and participated in the tariffs of the Middlewest Motor Freight Bureau, Inc., filed and published schedules naming various increased rates and charges. These increases were scheduled to and did become effective on April 1, 1968. After various protests were filed to the increased rates, the Board of Suspension of the Interstate Commerce Commission declined either to suspend or investigate the increased rates and charges.¹ Upon reconsideration and referral to the entire Commission, it was ordered that an investigation be instituted into and concerning the lawfulness of said increased rates and charges. The Commission did not, however, order suspension of the new rate schedule.²

Thereafter, the Commission issued a number of procedural and intermediate notices and orders, including its Order of April 3, 1968,³ specifying the evidence to be produced at a hearing before certain Hearing Examiners, which hearing was ordered to commence on May 20, 1968.

On April 12, 1968, the Department of Transportation and the General Services Administration, which agencies had protested the increases and had been notified and requested by the Commission to furnish certain evidence, requested that the procedural date set forth in the Order of April 3, 1968, be postponed for 90 days.⁴ Other protestants apparently did not join in this request. By letter of April 22, 1968, respondents in the investigative proceedings, including plaintiffs herein, also requested "that the date provided in the order of April 3 be postponed for a period of 90 days so that respondents' evidence would be due on August 5, 1968, and the hearing, presently set for May 20, 1968, would be reset to commence on August 19, 1968. The reason for this request was the physical impossibility for respondents to compile the required data within the time allowed by the order."⁵ In response the Commission issued an order which initially set forth the refund provision in controversy in the case at bar:

It is further ordered, That the time for filing the requested information and supporting data be, and, it is hereby extended to August 5, 1968; that the hearing be, and, it is hereby postponed to August 19, 1968, conditioned upon respondents compliance with the refund provision ordered below * * *.

And it is further ordered, That respondents be and, they are hereby, ordered to make refunds to the shippers on any shipment moving after May 20, 1968, to the extent that the increases or any portion thereof under investigation herein are not approved by the Commission.⁶

Five days later, on May 1, 1968, respondents (including plaintiffs herein) petitioned the Commission for reconsideration of the Order of April 25, 1968. They challenged the refund provision on many of the same grounds urged now in the case at bar. Subsequently, however, they withdrew this objection to the refund condition, grounding it on the decision of the Commission in a similar petition, Docket No. 34978, Pacific Inland Territory, Rate Increases, 1968.⁷ They further stated that evidence in support of the rates in the Middlewest Territory case could not be compiled by the original hearing date of May 20, 1968. This left the order of April 25, 1968, standing as issued. Subsequent to this withdrawal of the Petition to Reconsider, several protestants in the proceeding advised the Commission by letter that they were not satisfied with a mere withdrawal of the objection to the refund provision, as any guarantee of compliance with the Commission's refund provisions.⁸ These objections proved to be prophetic.

No action was taken with respect to this issue until after the postponed hearing on the merits at which time the Commission issued its decision in the matter. In its Report and Order of June 5, 1969, the Commission found that the increased rates and charges "have not been shown to be just and reasonable", ordered them cancelled, and "further ordered, That, in accordance with the order entered herein on April 25, 1968, the respondents be, and they are hereby, required to refund to shippers the charges on shipments moving after May 20, 1968, to the extent that such charges included the increases herein found not shown to be just and reasonable."⁹

Thereafter, the respondents filed a petition to vacate that portion of the Order of June 5, 1969, which required the payment of refunds, and sought reconsideration of the refund order and/or reopening of the subject proceeding for further hearing. Meanwhile, cancellation was made of the disputed increases on statutory notice, effective August 31, 1969, and simultaneously, on statutory notice, respondents filed new and higher increases of six per cent to become effective on September 1, 1969. Following various protests, the Board of Suspension declined to suspend or to investigate the new rate increases. On appeal, the entire Commission: (1) entered its order declining to suspend or investigate the September 1 increases, and (2) entered its order denying respondents' petition to reconsider and vacate the refund order. The Commission further ordered,

that the respondents will hereinafter, in accordance with the said decision of June 5, 1969, make refund to shippers presenting their claims to the carriers supported by paid freight bills or other appropriate evidence.¹⁰

A second Petition for Reconsideration of the Order of June 5, 1969, as affirmed by the Order of August 29, 1969, was denied by the Commission by Order of October 27, 1969. Thus, the increased rates were collected from April 1, 1968 to August 31, 1969. The Order to Refund is, however, effective from May 20, 1968 to August 31, 1969.

II. JURISDICTION

This being an action to enjoin or set aside an order of the Interstate Commerce Commission, jurisdiction is vested in the United States District Courts by 28 U.S.C. § 1336(a) and Section 17(9) of Part I of the Interstate Commerce Act, 49 U.S.C. § 17(9), the latter section being made applicable to Part II of the Interstate Commerce Act (Motor Carrier Act) by Sections 205(g) & (h) of the Motor Carrier Act, 49 U.S.C. §§ 305(g) & (h).¹¹ Jurisdiction of a three-judge district court is alleged under 28 U.S.C. § 2325, and such a court has been convened to hear the matter as provided by 28 U.S.C. § 2284.

The United States of America, as statutory defendant in this proceeding,¹² and the Interstate Commerce Commission (both defendants hereinafter referred to as the Government) have challenged the jurisdiction of this Court over the subject matter of this action and have challenged the propriety of a three-judge court.

It is to be noted though that the Government in questioning the jurisdiction of this Court to review the case did so as a preliminary matter. We have heard the case as a three-judge court, and the three participating judges have subscribed to the opinion and decision.

We are mindful that 28 U.S.C. § 2321 calls for a somewhat different review procedure in actions "for the payment of money or the collection of fines, penalties and forfeitures." However, we do not regard this case as an action for the payment of money. Its primary concern is the effort of the Commission to uphold and protect its jurisdiction.

It may possibly be that the decision of this Court will have some effect on the effort of the shippers here to obtain refunds. Nevertheless, the instant review is not to be classified as an action to enforce the payment of money or the collection of fines, penalties and forfeitures. The plaintiffs have brought the suit here seeking annulment of an order of the Commission. Because of the high importance of the case we feel duty-bound to entertain the suit and to determine it on its merits. We therefore reject these questions concerning our jurisdiction.¹³

III. ISSUE

We must decide whether an order of the Commission in which a rate increase is denied, which order directs repayment of interim rates, if determined to be invalid, and which refund order was entered by the Commission as a condition of granting an extension of time to the carriers at their request, is invalid and subject to a judgment annulling the same. We are not involved...