Arrow Transportation Co. v. Southern Railway Co.

• Decision Date: 15 October 1962
• Docket Number: No. 19928.,19928.
• Citation: 308 F.2d 181
• Parties: ARROW TRANSPORTATION COMPANY et al., Appellants, v. SOUTHERN RAILWAY COMPANY et al., Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

308 F.2d 181 (1962)

ARROW TRANSPORTATION COMPANY et al., Appellants, v. SOUTHERN RAILWAY COMPANY et al., Appellees.

No. 19928.

United States Court of Appeals Fifth Circuit.

September 7, 1962.

Certiorari Denied October 15, 1962.

John Lovett, Benton, Ky., Morris Sirote, Birmingham, Ala., Joe Starnes, Jr., Guntersville, Ala., Charles J. McCarthy, Gen. Cnsl., T. V. A., Knoxville, Tenn., for appellants.

Joseph F. Johnston, Leigh M. Clark, Birmingham, Ala., John Donelan, William D. McLean, Gen. Sol., South RR. Co., Karl Grannan, Atty., Dept. of Agriculture, Washington, D. C., for appellees.

Before RIVES, JONES and GEWIN, Circuit Judges.

Certiorari Denied October 15, 1962. See 83 S.Ct. 121.

RIVES, Circuit Judge.

The question for decision is whether a federal district court has jurisdiction to extend by injunction the statutory seven-month period of rate suspension in a proceeding still pending before the Interstate Commerce Commission.

The plaintiffs, appellants, Arrow Transportation Company et al., seek to enjoin the four defendants, appellee Railroad Companies, from applying to the rail transportation of grain certain railroad tariff schedules published by them and which are currently under investigation by the Interstate Commerce Commission in Docket No. I. & S. 7656, Grain in Multiple Car Shipments — River Crossings to the South. This appeal is from an order of the district court denying the plaintiffs' motion for a preliminary injunction solely on the ground that it had no jurisdiction of the subject matter.

The complaint based federal jurisdiction on diversity of citizenship, 28 U.S. C.A. § 1332; on the existence of a federal question, 28 U.S.C.A. § 1331; and on the Clayton Antitrust Act, 15 U.S.C.A. § 12 et seq., and 28 U.S.C.A. § 1337. The district court found the general jurisdictional averments as to diversity of citizenship and amount in controversy to be true. It further found that during 1961 the defendants published tariff schedules proposing to reduce substantially their rates and charges on the transportation of grain in multiple car shipments from certain Ohio and Mississippi River ports to numerous destinations in the Southeast. Its further findings of fact, conclusions of law and order are expressed so clearly and succinctly that they had best be quoted:

"6. On protest of interested parties, the Interstate Commerce Commission entered an order on August 7, 1961, finding that `There is reason to believe that they the tariffs would, if permitted to become effective, result in rates and charges, rules, regulations or practices which would be unjust and unreasonable, in violation of the Interstate Commerce Act, and constitute unfair and destructive competitive practices in contravention of the National Transportation Policy —,\' and suspending the effectiveness of the proposed tariffs for the maximum statutory period of 7 months pursuant to Section 15(7) of the Interstate Commerce Act, 49 U.S.C. 15(7). The Commission set the investigation hearings to begin in October 1961.

"7. It is admitted by the defendants that the Interstate Commerce Commission hearings scheduled for October 1961 were postponed to January 6, 1962 at Southern Railway Company\'s request because of its change of counsel and that the railroads agreed to extend the suspension period to July 7, 1962. It is also admitted by the defendants that counsel for the Southern Railway Company became ill during the hearings, that by reason thereof the hearings were interrupted, and that the railroads agreed to extend the suspension period to August 7, 1962. Such delay caused by the Southern Railway Company was compensated by further extension granted by the Southern.

"8. The tariff schedules published by the defendants which are currently under investigation by the Commission in I. & S. Docket 7656 will go into effect at 12:01 A.M. on August 7, 1962 unless the suspension period is extended by the defendants or unless the defendants are enjoined from putting them into effect by a court of competent jurisdiction.

"9. The hearings before the Commission in I. & S. Docket 7656 began on January 6, 1962 and are still in progress. It is agreed by the parties that the Commission will not be able to enter a final order before August 7, 1962.

"10. The plaintiffs are contending before the Commission that the proposed tariff schedules are unjust, unreasonable, discriminatory and destructive and will violate the Interstate Commerce Act and the National Transportation Policy.

"11. Defendants have declined to comply with plaintiffs\' requests that they agree to extend the suspension period for another sixty days.

"12. There is grave danger that irreparable injury, loss or damage may be inflicted on plaintiffs if the proposed rates go into effect at 12:01 A.M. on August 7, 1962, for which plaintiffs will have no adequate remedy at law.

"CONCLUSIONS OF LAW

"1. Section 15(7) of the Interstate Commerce Act grants exclusive authority to the Interstate Commerce Commission to suspend proposed railroad rates and limits that authority to a period of seven months from the proposed effective date of the rates unless further extended by consent of the carriers proposing the rates.

"2. Courts are without authority to enjoin or suspend the effectiveness of rates published by common carriers subject to the jurisdiction of the Interstate Commerce Commission before the entry of a final order by the Commission approving the rates. The only jurisdiction of a Court to enjoin or suspend the effectiveness of proposed common carrier rates arises after a final order of the Interstate Commerce Commission, and this is the authority vested in a specially constituted three-judge district court, upon complaint filed against the United States as a necessary defendant, to review the order of the Commission.

"WHEREFORE, it is hereby ORDERED:

"1. That the motion for a preliminary injunction and a temporary restraining order be and the same is hereby denied.

"2. That the motion of defendant Southern Railway Company that the complaint be dismissed and the same is hereby denied."

Section 6 of the Interstate Commerce Act (49 U.S.C.A. § 6) provides that rates and charges for transportation shall be initiated and published by the carrier and shall not be changed except after thirty days notice to the Commission unless the Commission, in its discretion and for good cause shown, allows changes upon less notice. The section most pertinent to the present appeal is Section 15, paragraph (7):

"Commission to determine lawfulness of new rates; suspension; refunds. Whenever there shall be filed with the Commission any schedule stating a new individual or joint rate, fare, or charge, or any new individual or joint classification, or any new individual or joint regulation or practice affecting any rate, fare, or charge, the Commission shall have, and it is given, authority, either upon complaint or upon its own initiative without complaint, at once, and if it so orders without answer or other formal pleading by the interested carrier or carriers, but upon reasonable notice, to enter upon a hearing concerning the lawfulness of such rate, fare, charge, classification, regulation, or practice; and pending such hearing and the decision thereon the Commission, upon 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, charge, classification, regulation, or practice, but not for a longer period than seven months beyond the time when it would otherwise go into effect; and after full hearing, whether completed before or after the rate, fare, charge, classification, regulation, or practice goes into effect, the Commission may make such order with reference thereto as would be proper in a proceeding initiated after it had become effective. If the proceeding has not been concluded and an order made within the period of suspension, the proposed change of rate, fare, charge, classification, regulation, or practice shall go into effect at the end of such period; but in case of a proposed increased rate or charge for or in respect to the transportation of property, the Commission may by order require the interested carrier or carriers to keep accurate account in detail of all amounts received by reason of such increase, specifying by whom and in whose behalf such amounts are paid, and upon completion of the hearing and decision may by further order require the interested carrier or carriers to refund, with interest, to the persons in whose behalf such amounts were paid, such portion of such increased rates or charges as by its decision shall be found not justified. At any hearing involving a change in a rate, fare, charge, or classification, or in a rule, regulation, or practice, after September 18, 1940, the burden of proof shall be upon the carrier to show that the proposed changed rate, fare, charge, classification, rule, regulation, or practice is just and reasonable, and the Commission shall give to the hearing and decision of such questions preference over all other questions pending before it and decide the same as speedily as possible." 49 U.S.C.A. § 15, par. (7).

The Act seems to us to be a model of clarity. It is of course elementary that the power to prescribe rates to be charged in the future is a legislative function. Great Northern R. Co. v. Merchants Elevator Co., 1922, 259 U.S. 285, 291, 42 S.Ct. 477, 66 L.Ed. 943; Terminal R. Ass'n v. United States, 1924, 266 U.S. 17, 30, 45 S.Ct. 5, 69 L.Ed. 150; Interstate Commerce Commission v. Cincinnati, N. O. & T. P. Railway Co., 1897, 167 U.S. 479, 499, 17 S.Ct. 896, 42 L.Ed. 243; 13 C.J.S. Carriers § 275b, pp. 623,...