McGraw Electric Co. v. United States

• Decision Date: 19 March 1954
• Docket Number: Civ. No. 7973.
• Citation: 120 F. Supp. 354
• Parties: McGRAW ELECTRIC CO. et al. v. UNITED STATES et al.
• Court: U.S. District Court — Eastern District of Missouri

120 F. Supp. 354

McGRAW ELECTRIC CO. et al. v. UNITED STATES et al.

Civ. No. 7973.

United States District Court, E. D. Missouri, E. D.

March 19, 1954.

COPYRIGHT MATERIAL OMITTED

Arthur J. Freund, St. Louis, Mo., for plaintiffs.

H. G. Morison, Asst. Atty. Gen., Robert W. Strange and James E. Kilday, Special Assts. to Atty. Gen., of Washington, D. C., and George L. Robertson, U. S. Atty., St. Louis, Mo., for defendant.

Edward M. Reidy, Chief Counsel, and Samuel R. Howell, Asst. Chief Counsel, Washington, D. C., for intervening defendant, Interstate Commerce Commission.

Edward R. Gustafson and Leo P. Day, Chicago, Illinois, and Richmond C. Coburn, St. Louis, Mo., for intervening defendant Railroads.

Before THOMAS, Circuit Judge, MOORE and HARPER, District Judges.

MOORE, Judge.

This is an action under Sections 1336, 1398, 2284 and 2321 through 2325, 28 U.S.C.A., to enjoin, set aside, annul and suspend certain orders of the Interstate Commerce Commission (1) dismissing a complaint seeking the prescription of lawful rates for the future and reparations from defendant railroads on shipment of electrical fuses, and (2) discontinuing suspension of a new tariff schedule affecting the same commodities. The two proceedings were consolidated before the Commission by agreement of the parties.

We are met at the outset with plaintiffs' motion for judgment on the pleadings or for summary judgment, which was consolidated before us with the hearing on the merits. This motion is on the ground that the plaintiffs had not been accorded a full and fair hearing before the Commission. This matter requires a somewhat detailed recital of the procedure in this case before the Commission. The shortened procedure was used, whereby no oral evidence was heard, but affidavits and exhibits were submitted. The parties filed their exceptions to the proposed report of the examiner, and requested oral argument before Division No. 3 of the Commission (consisting of three members). The request for oral argument was granted. and on the appointed day was heard by Commissioners Miller and Cross, after announcement that Commissioner Johnson was unavoidably absent, but would read the transcript of the argument, and would participate in the decision on the case. While the case was under submission, Commissioner Miller died, and the parties were notified that Commissioner Patterson had been appointed to take his place on Division No. 3, and that the case had been re-submitted for decision by the Division so constituted. About ten days later the Report and Opinion of Division No. 3 was announced, with a dissent, in part, by Commissioner Cross, the only member who had heard the oral argument. The plaintiffs filed original and supplemental petitions for rehearing and re-argument, which raised these matters, and both were denied by the full Commission without argument.

The defendants argue that the point is not properly raised in this court because plaintiffs failed to object to the hearing before the two commissioners, and further failed to object to the resubmission to the newly constituted division after receipt of the notice mentioned above. However, these matters were raised in the petitions for rehearing and reargument before the Commission, and in view of the relatively short period of time before the announcement of its decision by the Division as reconstituted, we will assume that these matters were sufficiently raised during the administrative proceedings.

Section 17(1) of the Interstate Commerce Act, 49 U.S.C.A. § 17(1), provides that the Commission may divide its members "into as many divisions (each to consist of not less than three members) as it may deem necessary * * * When a vacancy occurs in any division or when a Commissioner because of absence, or other cause, is unable to serve thereon, the Chairman of the Commission or any Commissioner designated by him for that purpose may serve temporarily on such division until the Commission otherwise orders." Section 17 (3) provides that "The Commission shall conduct its proceedings under any provision of law in such manner as will best conduce to the proper dispatch of business and to the ends of justice. * * * A majority of the Commission, of a division, or of a board shall constitute a quorum for the transaction of business. * * *" Under Section 17 (4) "a division * * * shall have authority to hear and determine * * * or otherwise act as to any work, business, or functions assigned or referred thereto * * * and * * * shall have all the jurisdiction and powers conferred by law upon the Commission, and be subject to the same duties and obligations."

It is to be noted that no objection was made at the oral argument to the announcement that one of the three members of the Division was absent. Plaintiffs do not now complain of this because under the statute a quorum was present, and if the majority which heard the argument had decided the case they would have no complaint. See Visceglia v. United States, D.C., 24 F.Supp. 355, where the substitution of one member after argument before a Division consisting of three members was held not to invalidate the action of the Commission.

Plaintiffs' complaint here is that the majority which rendered the decision had not heard the oral argument, and the one member who had heard argument dissented in part.

This situation is similar in some respects to that in Eastland Co. v. Federal Communications Commission, 67 App. D.C. 316, 92 F.2d 467, certiorari denied 302 U.S. 735, 58 S.Ct. 120, 82 L.Ed. 568, where a Division of three commissioners heard the evidence and argument, but the decision was later rendered by the Division with the substitution of two members who had not heard the case — one member had died and the other had been transferred to another Division. The Court said, 92 F.2d at pages 469-470:

"No question is raised by the appellants as to lack of notice, or opportunity to present evidence and file briefs or as to the manner in which the hearing itself was conducted. The appellants were accorded ample and timely notice and a full opportunity to be heard. The commissioners who entered the decision report that they had fully considered the evidence and the entire record of the case.

"The contention of appellants is that they were entitled to have their case passed upon by the identical members of the Broadcasting Division who sat at the presentation of all of the evidence in the case, and that the procedure followed amounted to a denial of a lawful hearing and trial of the case, inasmuch as two members who joined in the decision did not hear the oral evidence when delivered by the witnesses in person.

"In our opinion the partial change in the personnel of the Division which decided the case did not invalidate its decision, for it was nevertheless the decision of the Division which acted upon the evidence."

The Court relied upon the statutes, which are substantially similar to those concerning the Interstate Commerce Commission quoted supra, but the Court goes on to point out the fact that no motion for rehearing was made before the Division or Commission, as was done here.

However, we believe that a full and fair hearing was granted in this case. A majority of the Division as then constituted heard the oral argument after notice to the parties that the third member was unavoidably absent and would read the transcript of the oral argument and participate in the decision on the case. This he did, and also had all of the purely documentary evidence and written memoranda before him. Commissioner Patterson, who was substituted for Commissioner Miller, also had all of this material before him.

It is to be noted that the parties waived their right to present oral testimony and to cross-examine their adversaries' witnesses by consenting to the "shortened procedure" under the Commission's rules. Oral argument, under Rule 98 of the Commission's General Rules of Practice, 49 U.S.C.A.Appendix, is not granted as a matter of right but is discretionary with the Commission.

The Administrative Procedure Act, 5 U.S.C.A. §§ 1004, 1006 and 1007, does not provide the circumstances under which oral argument shall be granted, nor who shall preside at such argument. See National Labor Relations Board v. Stocker Mfg. Co., 3 Cir., 185 F.2d 451.

Due process of law under the Fifth Amendment does not necessarily require that oral argument be granted. In Federal Communications Commission v. WJR, The Goodwill Station, 337 U.S. 265 at page 275, 69 S.Ct. 1097 at page 1103, 93 L.Ed. 1353, the Court said:

"On the contrary, due process of law has never been a term of fixed and invariable content. This is as true with reference to oral argument as with respect to other elements of procedural due process. For this Court has held in some situations that such argument is essential to a fair hearing, Londoner v. City & County of Denver, 210 U.S. 373, 28 S.Ct. 708, 52 L.Ed. 1103, in others that argument submitted in writing is sufficient, Morgan v. United States, 298 U.S. 468, 481, 56 S.Ct. 906, 911, 80 L.Ed. 1288. See also Johnson & Wimsatt v. Hazen, 69 App.D.C. 151, 99 F.2d 384; Mitchell v. Reichelderfer, 61 App.D.C. 50, 57 F.2d 416."

See, also, Sisto v. Civil Aeronautics Board, 86 U.S.App.D.C. 31, 179 F.2d 47.

As no statute or rule demands it, and procedural due process does not necessarily require it, we hold that the hearing granted in this case was reasonable and adequate where all the evidence was in documentary form, and the oral argument in written form was before all the members of the Division who decided the case.

On the merits, this controversy involves ratings on electrical fuses. These are of three principal types: the screw-in fuse; the cartridge type fuse and the knife blade fuse. Under tariff schedules for Official Territory, there are two classifications into which fuses may fall: "Item 15890 Electric * * * fuse plugs, in barrels or boxes"; and "Item...