Malone Freight Lines, Inc. v. United States

• Decision Date: 05 April 1962
• Docket Number: Civ. A. No. 9996.
• Citation: 204 F. Supp. 745
• Parties: MALONE FREIGHT LINES, INC., Plaintiff, v. UNITED STATES of America and Interstate Commerce Commission, Defendants.
• Court: U.S. District Court — Northern District of Alabama

204 F. Supp. 745

MALONE FREIGHT LINES, INC., Plaintiff, v. UNITED STATES of America and Interstate Commerce Commission, Defendants.

Civ. A. No. 9996.

United States District Court N. D. Alabama, S. D.

April 5, 1962.

Edward M. Reidy, Washington, D. C. and J. Haden Alldredge, Montgomery, Ala., for plaintiff.

Lee Loevinger, Asst. Atty. Gen., Richard A. Solomon, Attorney, Dept. of Justice, Washington, D. C., and Macon L. Weaver, U. S. Atty., and Raymond P. Mims, Asst. U. S. Atty., Birmingham, Ala., for the United States.

Robert W. Ginnane, Gen. Counsel, and Fritz R. Kahn, Atty., Interstate Commerce Commission, Washington, D. C., for the Interstate Commerce Commission.

Crimm & Postell, Atlanta, Ga., for intervening defendant Southern Motor Carriers Rate Conference, Inc.

Robert R. Artz, Philadelphia, Pa., for intervening defendant, Pennsylvania Railroad Co.

Before RIVES, Circuit Judge, and LYNNE and GROOMS, District Judges.

LYNNE, Chief Judge.

Plaintiff, Malone Freight Lines, Inc., brought this action under 28 U.S.C.A. §§ 1336, 1337, 1398, 2284 and 2321-2325, Section 17(9) of the Interstate Commerce Act, 49 U.S.C.A. § 17(9), and Section 10 of the Administrative Procedure Act, 5 U.S.C.A. § 1009, to enjoin, annul and set aside the report and orders of the Interstate Commerce Commission, entered May 1, 1961, and August 14, 1961, in Investigation and Suspension Docket No. M-13780, Floor Coverings or Related Articles From East to South, in which the Commission found that the plaintiff's proposed reduced motor carrier rates were not shown to be just and reasonable and ordered their cancellation.

By schedules filed to become effective on August 19, 1960, the plaintiff, a common carrier by motor vehicles subject to the provisions of the Interstate Commerce Act, 49 U.S.C.A. § 301 et seq., proposed the reduction of its commodity rates on floor coverings and related articles from origins in Delaware, New Jersey, New York and Pennsylvania to destinations in Alabama, Arkansas, Georgia, Louisiana, Mississippi, and Tennessee. The proposed rates were protested on August 4, 1960, by intervenor, the Southern Motor Carriers Rate Conference, Inc.,¹ a nonprofit corporation engaged primarily in the publication of rates for its member carriers under agreements approved by the Commission pursuant to 49 U.S.C.A. § 5b. Southern Motor Carriers — Agreement, 297 I.C.C. 603 (1956).

The Commission, Board of Suspension, on August 16, 1960, ordered the operation of the schedules to be suspended until March 19, 1961 (when they became effective), and entered upon an investigation into the lawfulness of the rates. The plaintiff, on September 6, 1960, petitioned for vacation of the order of suspension, and replies to its petition were filed by the Conference and intervenor, The Pennsylvania Railroad Company.² The Reading Company and the Western Maryland Railway, upon their joint application, were permitted, on September 27, 1960, to intervene in the proceeding as additional parties protestants. Plaintiff's petition was denied by order of the Commission, Division 2, entered October 26, 1960.

Under the modified procedure ordered by the Commission on August 24, 1960, for the disposition of the proceeding, the plaintiff, on November 21, 1960, filed its opening statement of facts and arguments and supporting exhibits. On December 23, 1960, the Conference and the railroads filed their separate statements which were met by plaintiff's motion to strike or reject. Plaintiff filed its reply statement on January 9, 1961. The Conference and the railroads filed separate replies to the plaintiff's motions, and the Conference, on January 19, 1961, moved the Commission to strike portions of plaintiff's reply statement, to which motion plaintiff replied on February 1, 1961. On May 1, 1961, the Commission, Division 2, entered its report and order, disposing of the pending motions, finding the proposed new rates not shown to be just and reasonable and ordering their cancellation. Floor Coverings or Related Articles From East to South, 313 I.C.C. 530 (1961).

Plaintiff, on June 5, 1961, petitioned the reconsideration of the Commission's report and order, and the Conference and the railroads filed separate replies. The Commission, Division 2, "acting as an appellate division," on August 14, 1961, denied plaintiff's petition for reconsideration and established September 28, 1961, as the effective date for the order requiring the cancellation of the proposed reduced rates. On September 20, 1961, the Commission, Acting Chairman Murphy, following the institution of this action, ordered the effective date postponed until further order of the Commission.

Probing questions from the bench, on oral argument, raised doubt as to jurisdiction which must first be laid to rest. Precisely, our disagreement relates to the proper construction to be placed upon the provisions of 49 U.S.C.A. § 17(9). Were we to conclude that the Congress intended thereby to constrict the general jurisdiction granted to district courts by 28 U.S.C.A. § 1336 by precluding judicial review of an order of a division until there has been reconsideration "by the Commission or an appellate division", we would be discomfited by the mutation of labels whereby Division 2 purported to transform itself into an "appellate division."

But this is not a simple exercise in rhetoric. "We believe it fundamental that a section of a statute should not be read in isolation from the context of the whole act, and that in fulfilling our responsibility in interpreting legislation, `we must not be guided by a single sentence or member of a sentence, but should look to the provisions of the whole law, and to its object and policy'."³ Richards v. United States, 82 S.Ct. 585 (1962).

Turning to an analysis of Section 17 of the Interstate Commerce Act, all paragraphs of which were contemporaneously enacted (September 18, 1940, c. 722, Title 1, § 12, 54 Stat. 913) and of Section 1.101(a) (1) (2) and (3) of the General Rules of Practice before the Interstate Commerce Commission,⁴ we are impressed that Malone has done everything within its power to exhaust its administrative remedy. The United States and the Commission in their joint answer and the intervening defendants in their separate answers have conceded that it has done so. Therefore, we are of the opinion that this suit is not premature and that the issues raised by the pleadings are justiciable.

No argument would seem to be required to support the proposition that the contemporaneously enacted paragraphs of Section 17 should be construed in pari materia. Paraphrasing the pertinent paragraphs of such section produces the following pattern:

(1) The Commission is authorized to create divisions. It may designate one or more of its divisions as appellate divisions.⁵

(2) The Commission is authorized by order to direct that any of its work, business or functions, except functions vested in the Commission under this section, be assigned or referred to any division.

(3) The Commission shall conduct its proceedings in such manner as will best conduce to the proper dispatch of business and to the ends of justice, and make or amend such general rules or orders as may be a requisite for the order and regulation of proceedings before it.

(4) Except as otherwise provided in this section, any order, decision, or requirement of a division, an individual commissioner, or a board, with respect to any matter so assigned or referred, shall have the same force and effect, and may be made and evidenced in the same manner as if made or taken by the Commission.

(5) When a matter is referred to an individual commissioner or a board, the recommended order thereof, in the absence of exceptions thereto, shall become the order of the Commission unless stayed by the Commission or a duly designated division. Where exceptions are filed, the Commission or a duly designated division must reconsider the matter either upon the same record or after further hearing.⁶

(6) This is a critical paragraph. It provides that when any order has been entered, which is deemed to be the order of the Commission, any party thereto, subject to such limitations as may be imposed by the Commission may make application for rehearing, reargument or reconsideration, which application shall be governed by such general rules as the Commission may establish. If the order was entered by the Commission, the Commission must act on the application; if entered by a division, an individual commissioner, or a board, the Commission must act on the application or refer it to an appropriate appellate division. The Commission is empowered to make rules or orders confining the right to apply⁷ for rehearing, reargument or reconsideration where the order was entered by the Commission, or a division, to proceedings involving issues of general transportation importance. But the right to so apply may not be thus confined even though no issue of general transportation importance is involved where the matter was referred to an individual or a board under the provisions of paragraph (2), supra. In that instance the application for a rehearing must be referred to an appropriate appellate division.⁸

(7) The Commission or appellate division, at the rehearing, is empowered to reverse, change or modify an order of a division, an individual commissioner, or a board.

(8) Where the order of a division, individual commissioner, or a board has not become effective when application for rehearing is made, the order must be stayed pending disposition by the Commission or appellate division. However, in the absence of a special order of the Commission, the persons affected are required to obey the order complained of.⁹

(9) This paragraph, we believe, does not speak in terms of jurisdiction but is designed to require exhaustion of the administrative remedies provided by this section and the rules of procedure with reference to applications for...