National Van Lines, Inc. v. United States

• Decision Date: 06 January 1964
• Docket Number: No. 14246.,14246.
• Parties: NATIONAL VAN LINES, INC., et al., Plaintiff-Appellants, v. UNITED STATES of America and Interstate Commerce Commission, Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

326 F.2d 362 (1964)

NATIONAL VAN LINES, INC., et al., Plaintiff-Appellants, v. UNITED STATES of America and Interstate Commerce Commission, Defendants-Appellees.

No. 14246.

United States Court of Appeals Seventh Circuit.

January 6, 1964.

Gardner, Carton, Douglas & Chilgren, Chicago, Ill., of counsel.

James L. Beattey, Jr., Indianapolis, Ind., for Aero-Mayflower Transit Co.

Robert J. Bernard, Chicago, Ill., for Greyhound Van Lines.

G. Zan Golden, Ft. Wayne, Ind., for North American Van Lines.

G. M. Rebman, St. Louis, Mo., for United Van Lines.

James A. Velde, Ware Adams, Chicago, Ill., Bryce Rea, Jr., Washington, D. C., for plaintiffs-appellants.

Lionel Kestenbaum, Gerald Kadish, Appellate Section, Dept. of Justice, Washington, D. C., Frank E. McDonald, U. S. Atty., Chicago, Ill., Robert W. Ginnane, Interstate Commerce Commission, Washington, D. C., William H. Orrick, Jr., Asst. Atty. Gen., James P. O'Brien, U. S. Atty., Northern Dist. of Ill., Chicago, Ill., Arthur J. Cerra, Asst. Gen. Counsel, Interstate Commerce Commission, Washington, D. C., for appellees.

Before HASTINGS, Chief Judge, and KNOCH and SWYGERT, Circuit Judges.

HASTINGS, Chief Judge.

Plaintiffs-Appellants¹ brought this action seeking judicial review in the district court of certain orders of Interstate Commerce Commission, naming as defendants therein United States of America and Interstate Commerce Commission (appellees).

Defendants filed a motion to dismiss the complaint on the grounds that there was no justiciable controversy and that the Commission's interpretative ruling was advisory in nature and not a final reviewable order.

The district court granted defendants' motion to dismiss and ordered the complaint dismissed, without opinion. Plaintiffs appealed.

FACTUAL BACKGROUND

The factual background of this litigation is not in dispute and we accept the following summary in appellees' brief.

The dispute arose because of the inadvertent omission of a footnote to a tariff. Prior to September 1959, the appellants had on file with the Commission tariffs which provided a rate table in Section II for shipment of ordinary household goods for distances up to 4300 miles between all points in the United States. It was stated in Section II that the rates in the 4300 mile table "will not apply in territory described in Section III * * * except as otherwise described in Section III." Section III contained a rate table for shipments from certain points of origin in the northeast section of the country for distances up to 500 miles. The rates in Section III were higher than rates for the first 500 miles in the 4300 mile table of Section II. At the end of the 500 mile table in Section III was a footnote reading "over 500 miles apply rates shown in Section II." Thus under these 1957 tariffs, on shipments of more than 500 miles from the origin points of Section III, the carriers assessed charges computed by application of the 4300 mile table of Section II. Absent the footnote in Section III, the charge for these shipments would have been computed on the basis of Rule 23 of the tariff and the 500 mile table and the charges on these shipments would have been lower.

In September 1959, these tariffs were canceled and other tariffs were filed in their place to go into effect on October 10, 1959. The governing provisions of these 1959 tariffs were the same as those in the 1957 tariffs, but many increases were made in the rate tables. The footnote to the 500 mile rate table in Section III making cross reference to Section II for shipments over 500 miles was, through inadvertence, omitted. The carriers, however, continued to make charges on shipments over 500 miles from origins of Section III computed by application of the 4300 mile table of Section II as if the footnote had not been omitted. In November 1959, the omission of the footnote was discovered by appellant Household Goods Carriers' Bureau and on December 30, 1959 the footnote to Section III was reinserted to become effective on January 29, 1960.

COMMISSION PROCEEDING.

On December 5, 1960, the Commission on its own initiative ordered the institution of an investigation to determine whether certain motor common carriers of household goods during various periods between February 19, 1959 and September 1, 1960, had charged, demanded, collected or received compensation for the transportation of shipments in excess of 500 miles from points of origin which were greater or less than, or different from, the rates applicable thereto as specified in the governing tariffs. The limiting period is the time during which the footnote in prior tariffs was inadvertently omitted from the 500 mile table as filed in 1959.

The order recited that this investigation was taken "under authority of Section 5(d) of the Administrative Procedure Act² and Sections 204(c), 204(a) (6) and 217(b) of the Interstate Commerce Act³to remove any uncertainty with respect to the applicability of the provisions of the said tariffs, as amended." (Emphasis added.)

All carriers which were parties to the tariffs during the critical period were made respondents to the proceeding. They were ruled to show cause why appropriate declaratory or other orders should not be issued.

The purpose of the Commission's investigation was to determine whether, during the periods when the footnote was missing, the 4300 mile table continued to apply to shipments originating in the northeast section of the country for distances of more than 500 miles. If the 4300 mile table did not apply to those shipments, then Rule 23 of the tariffs applied beyond the 500 miles and produced charges much lower than the 4300 mile table.

The Commission referred the matter to an examiner for hearings which were held in March, 1961.

Witnesses for the Commission and for the carriers testified concerning the meaning and factual background of the tariffs. They estimated that, if Rule 23 rather than the 4300 mile table applied to the disputed shipments, four of the carriers would be liable for overcharges totaling $2,703,631 during the periods when the investigated tariffs were in effect.

No report, intermediate decision or recommendations were filed by the hearing examiner.

COMMISSION REPORT.

On February 7, 1962, the Commission filed its report for six of the eleven commissioners. Five commissioners dissented, four on the merits. The majority ruled that, with the footnote to the 500 mile table omitted, shipments of more than 500 miles from the northeast section of the country were governed, not by the 4300 mile table, but by the 500 mile table, together with Rule 23. The majority report concluded that the carriers had "failed to collect charges in conformity" with the Commission's interpretation of the tariffs and that collection of more or less than the Commission's basis "constitutes a violation of section 217(b) of the Interstate Commerce Act." This report was published in Applicability of Rates on Household Goods, 315 I.C.C. 537 (1962).

COMMISSION ORDER.

On February 7, 1962, the Commission entered an order adopting the Commission report as its findings and conclusions, as follows:

"No. 33622 APPLICABLIITY OF RATES ON HOUSEHOLD GOODS

"It appearing, That by order dated December 5, 1960, the Commission entered upon an investigation to determine whether certain motor carriers of household goods during various periods between February 19, 1959, and September 1, 1960, had charged, demanded, collected or received compensation for the transportation of shipments in excess of 500 miles from described points of origin which were greater or less than, or different from, the rates applicable thereto as specified in the governing tariffs;

"It further appearing, That a full investigation of the matters and things involved in the above-mentioned proceeding has been made, and that the Commission, on the date hereof, has made and filed a report containing its findings of fact and conclusions thereon, which report is referred to and made a part hereof:

"It is ordered, That this proceeding be, and it is hereby discontinued."

Subsequent petitions to vacate the order and remand to the examiner for preparation of a report and recommended order and for other relief were filed by the carriers and denied by the Commission. Finally, on June 15, 1962, petitions for reconsideration were denied.

DISTRICT COURT PROCEEDING.

On August 30, 1962, appellants instituted this present action in the district court seeking to set aside the Commission orders of February 7, 1962 and June 15, 1962.

The complaint alleged that hundreds of carriers were participants in the tariffs involved and that the action was brought on their behalf as well as the plaintiffs'. The Commission orders were alleged to be arbitrary and invalid in law on the grounds, inter alia, that (1) the ruling of the Commission was contrary to the plain meaning of the tariffs; (2) the Commission's interpretation of the tariffs involved only a question of law and was legally wrong; (3) the Commission's ruling was contrary to the undisputed and substantial evidence concerning the intended and expressed meaning of the tariffs and to settled legal principles for the construction of tariffs; and (4) the effect of the ruling would bring about unreasonable and absurd results that would cause the rates in the tariffs to become discriminatory and unlawful.

It was shown in the district court by affidavits that subsequent to the Commission order in question the General Accounting Office of the United States had notified certain carriers that deductions would be made for overcharges based on the Commission's interpretation of the tariff. Pursuant to notice by the GAO, the Government made deductions on charges for shipments thereafter by the carriers for the Government.

The amounts of such deductions for three of the appellants as of certain dates in December, 1962 and January, 1963 (less than one year after the Commission ruled) were...