Genstar Chemical Ltd. v. ICC
| Decision Date | 30 May 1980 |
| Docket Number | Civ. A. No. 80-101. |
| Citation | 491 F. Supp. 391 |
| Parties | GENSTAR CHEMICAL LIMITED, Plaintiff, v. INTERSTATE COMMERCE COMMISSION, Defendant. |
| Court | U.S. District Court — District of Columbia |
William Q. Keenan, New York City, Gordon P. MacDougall, Washington, D. C., for plaintiff; Arsham & Keenan, New York City, of counsel.
Richard A. Allen, Washington, D. C., General Counsel, I. C. C., Whitney Adams, Asst. U. S. Atty., Civ. Div., Washington, D. C., for defendant.
This is a petition for review of an order by the Interstate Commerce Commission (ICC or Commission) respecting the plaintiff's claim against some thirty railroads for approximately $200,000.00. The plaintiff, Genstar Chemical Ltd. (Genstar) seeks that amount in overcharges for shipments between the Eastern United States and Canada, and the ICC awarded it only a fraction of that amount at the administrative level. This case raises two basic issues: (1) does jurisdiction over this dispute reside in the district court or the court of appeals? and (2) is the plaintiff entitled to a complete or only partial refund of the admittedly excessive rate increase applied to its shipments in the period in question? Both sides have moved for summary judgment.
The court is persuaded that it does have jurisdiction over this dispute and that Genstar is entitled to a refund of the entire increase for the period in question.
The origins of this case go back to 1971, when the ICC approved a general rate increase for railroad shipments: 14% for domestic traffic and 12% for import-export traffic. Ex Parte No. 267. Pursuant to a tariff labelled X-267-B, the railroads immediately began charging 14% on shipments between Canada and the Eastern United States, and they continued doing so until 1977, when the Supreme Court ruled that the 12% limit on import-export traffic embraced these Canadian-U. S. shipments. Canadian National Railway Co. v. United States, 430 U.S. 961, 97 S.Ct. 1638, 52 L.Ed.2d 352 (1977) (affirming per curiam 425 F.Supp. 290 (D.D.C.1976)). It is undisputed that Genstar is entitled to at least a 2% refund on shipments between September 13, 1974 and May 6, 1977, the period allowed by the applicable statute of limitations, 49 U.S.C. § 11706(b). Genstar argues, however, that for this 1974-77 period it is entitled to 100% of the difference between the rates in effect before 1971 and those in effect thereafter. That is, it seeks a refund of 14% rather than just 2% for the period in question.1
(Emphasis supplied.) The railroads and the ICC contend that under 28 U.S.C. §§ 2321(a) and 2342, the ICC's order is reviewable only in a court of appeals. These sections provide as follows:
Clearly, the issue turns on application of the emphasized language in section 1336(a), namely, whether this order is one "for the payment of money."
In arguing for a narrow construction of this language, the ICC makes three points. First, it emphasizes that district court review is exceptional, i. e., that review is presumptively with the courts of appeals. This effort to place a burden of proof on the plaintiff lacks case law support, however, and in any event deserves minimal weight. Second, the ICC argues that because courts of appeals conduct de novo review of the administrative record when reviewing district court rulings in such cases, acceptance of jurisdiction by the district court creates a potential for needless duplication of effort. Although the premise of this argument is technically accurate, its conclusion is unconvincing. It assumes that district court review is gratuitous. Congress manifestly intended to provide the courts of appeals with the benefit of district court review in some cases, thereby easing the burden on the courts of appeals and providing the parties an opportunity to appeal short of going all the way to the Supreme Court. Although district courts should be wary of overstepping their jurisdiction, they should be equally wary of rejecting a burden that Congress intended to locate there. Third, the ICC argues that simply because there are more district courts than courts of appeals, acceptance of jurisdiction by the district court increases the potential for conflict among the courts. Like the preceding point, this argument is technically accurate but unpersuasive.
More fruitful analysis involves the purpose of the statute and the cases applying it.2 A central precedent is United States v. I. C. C., 337 U.S. 426, 442, 69 S.Ct. 1410, 1419, 93 L.Ed. 1451 (1949), in which the Supreme Court stated with regard to "Commission orders for the payment of money" that they "are not likely to be of sufficient public importance to justify use of the three-judge procedure." (Emphasis supplied.) Focusing on this language, the ICC argues that the present case is of sufficient public importance to justify the present equivalent of the three-judge court, namely, review in the court of appeals. The ICC also makes much of the Court's following statement with regard to the Commerce Court, whose jurisdiction was later transferred to the three-judge district courts:
The purpose of creating the Commerce Court with such direct appeals to the Supreme Court was expedition of final determination of the validity of certain types of Commission orders. This expedition was sought for orders of national or widespread interest, such, for example, as railroad rate orders.
(Emphasis supplied.) Parties challenging Commission orders in the courts of appeals no longer may appeal as of right to the Supreme Court, but to the extent that the jurisdiction originally with the Commerce Court is now with the courts of appeals, this language regarding "national or widespread interest" is still germane.
The ICC would have the court hold simply that the present orders are of widespread interest and therefore that review should be in the court of appeals. Its test for whether an order is of widespread interest is whether it "will likely affect more than just the specific parties to the litigation or where the relief sought goes beyond a mere money payment." Defendants' Memorandum 11.
This analysis of United States v. ICC, like the government's analysis of the other cases discussed below, is untenable. In particular, although the second part simply restates the statute, the first part is narrower than the cases would justify. In United States v. ICC, for example, the United States, suing as a shipper, challenged ICC orders denying its request for reparations from railroads allegedly guilty of unlawful exactions. The Court held that review was properly before the one-judge district court. Although the Court's treatment of this issue was limited, its example of an order of "national or widespread interest" — railroad rate orders, 69 S.Ct. at 1419 — supports a test that inquires whether the order in question would have prospective or only retroactive effects. To apply the Court's own example, railroad rate orders manifestly would have prospective effects, so they constitute more than an order for the payment of money.
Similarly, in Aluminum Co. of America v. ICC (Alcoa), 553 F.2d 1268 (D.C.Cir.1977), the U. S. Court of Appeals for the District of Columbia upheld the jurisdiction of the one-judge district court over an ICC order regarding "a refund of alleged overcharges on certain rail car switching movements." Id. at 1268. The opinion stated, "Unlike other ICC orders, payment orders are not `quasi-legislative orders, in which the public at large are interested....'" Id. at 1270. Because "quasi-legislative orders would, like anything legislative, have prospective effects, this language supports the test suggested above.
Attempting to distinguish Alcoa, the ICC contends that "unlike the instant case, Alcoa did not involve a general rate increase or review of a Commission policy uniformly applied in numerous cases." Defendants' Memorandum 12. But here what the plaintiff challenges is not the general rate increase embodied in Ex...
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...sort of "widespread interest" to which the Supreme Court was referring in United States v. ICC. * * * 665 F.2d at 1308, aff'g, 491 F.Supp. 391, 395 (D.D.C.1980). Our decision in Genstar is highly relevant to the jurisdictional question in this case. The shipper in Genstar had filed a compla......
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Genstar Chemical Ltd. v. I. C. C.
...a full 14% recovery on the theory that the entire 14% increase was unlawful because not lawfully established. Genstar Chemical Ltd. v. ICC, 491 F.Supp. 391 (D.D.C.1980). The government and the railroads filed separate appeals, which were consolidated with Genstar's protective direct review ......
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...Sales Co. v. ICC, 561 F.2d 1219 (6th Cir. 1977); Monongahela Power Co v. ICC, 640 F.2d 504 (4th Cir. 1981). But see Genstar Chemical Ltd. v. ICC, 491 F.Supp. 391 (D.D.C.1980), appeal pending, No. 80-1170 (D.C. Cir. Feb. 11, 1980) (petition for review of ICC order). We agree with those court......