Southern Railway Company v. Seaboard Allied Milling Corp Interstate Commerce Commission v. Seaboard Allied Milling Corp Seaboard Coast Line Railroad Company v. Seaboard Allied Milling Corp 78 604

• Decision Date: 11 June 1979
• Docket Number: Nos. 78-575,78-597,s. 78-575
• Citation: 60 L.Ed.2d 1017,99 S.Ct. 2388,442 U.S. 444
• Parties: SOUTHERN RAILWAY COMPANY, Petitioner, v. SEABOARD ALLIED MILLING CORP. et al. INTERSTATE COMMERCE COMMISSION, Petitioner, v. SEABOARD ALLIED MILLING CORP. et al. SEABOARD COAST LINE RAILROAD COMPANY et al., Petitioners, v. SEABOARD ALLIED MILLING CORP. et al. , and 78-604
• Court: U.S. Supreme Court

442 U.S. 444

99 S.Ct. 2388

60 L.Ed.2d 1017

SOUTHERN RAILWAY COMPANY, Petitioner,

v SEABOARD ALLIED MILLING CORP. et al.

INTERSTATE COMMERCE COMMISSION, Petitioner,

v. SEABOARD ALLIED MILLING CORP. et al.

SEABOARD COAST LINE RAILROAD COMPANY et al., Petitioners,

v. SEABOARD ALLIED MILLING CORP. et al.

Nos. 78-575, 78-597, and 78-604.

Argued April 23, 1979.

Decided June 11, 1979.

Rehearing Denied Oct. 1, 1979.

See 444 U.S. 890, 100 S.Ct. 194, 195.

Syllabus

When petitioner railroads proposed a seasonal increase in the shipping rates for grain and soybeans, a number of shippers filed protests with the Interstate Commerce Commission (ICC) requesting that it exercise its authority under § 15(8)(a) of the Interstate Commerce Act (Act) to suspend such rates and to investigate the charges of their illegality. But the ICC issued an order declining such request, although it admonished the railroads to correct any such violations as might exist and directed that records be kept to protect the shippers' right to recover damages in such subsequent proceedings as they might bring pursuant to § 13(1) of the Act. The Court of Appeals held that the ICC had begun an investigation but had then erroneously terminated it without adequately investigating the charges of illegality and without supporting its decision with appropriate findings. The court concluded that a decision by the ICC to refuse to make or to terminate an investigation of the lawfulness of a proposed tariff is subject to judicial review, even though suspension orders are not, primarily because a single § 15(8)(a) proceeding initiated by the ICC is a better means of determining the lawfulness of rates than numerous § 13(1) complaint proceedings initiated by shippers.

Held:

1. To the extent that the Court of Appeals interpreted the ICC's order as a final decision that the proposed tariff was lawful, rather than simply a discretionary decision not now to investigate its lawfulness, it misconstrued the order. The order's express language belies any such interpretation, and the ICC did not reject the shippers' claim of illegality on the merits but on the contrary admonished the railroads about possible violations. Moreover, since the ICC expressly indicated that charges of violation of the Act could be resolved in § 13(1) proceedings, it is plainly incorrect to interpret its action as a prejudgment on the issue. Pp. 452-454. 2. The ICC's "no investigation" decision is not subject to judicial review. Pp. 454-463.

(a) This conclusion is supported by § 15(8)(a)'s language of permission and discretion (the ICC "may, upon the complaint of an interested party . . ., order a hearing concerning the lawfulness of [a] rate"), and by the fact that the statute is silent on what factors should guide the ICC's decision. Pp. 455-456.

(b) The structure of the Act also indicates that Congress intended to prohibit judicial review of the ICC's "no investigation" decision. Congress did not use permissive language such as that found in § 15(8)(a) when it wished to create reviewable duties under the Act, but instead used mandatory language such as in § 13(1). To treat § 15(8)(a) as if it were written in § 13(1)'s mandatory language, would allow shippers to use the open-ended and ill-defined procedures in § 15(8)(a) to render obsolete the carefully designed and detailed procedures in § 13(1). Moreover, in view of the linkage between the ICC's power to investigate and its power to suspend proposed rates, the decisions holding that the merits of a suspension order are not reviewable, Aberdeen & Rockfish R. Co. v. SCRAP, 422 U.S. 289, 95 S.Ct. 2336, 45 L.Ed.2d 191; United States v. SCRAP, 412 U.S. 669, 93 S.Ct. 2405, 37 L.Ed.2d 254; Arrow Transportation Co. v. Southern R. Co., 372 U.S. 658, 83 S.Ct. 984, 10 L.Ed.2d 52, furnish further authority for holding that a "no investigation" decision is not reviewable. Pp. 456-459.

(c) The legislative history of the Mann-Elkins amendments adding § 15(8) to the Act further supports nonreviewability of "no investigation" decisions. Prior to those amendments, the ICC had no authority to suspend rates, or to adjudicate their lawfulness in advance either of their becoming effective or of their being challenged in a § 13(1) complaint, and the adoption of § 15(8) was designed to avoid the disruptive consequences of judicial interference with the ICC's rate-making process. To allow the courts to review § 15(8)(a) investigation decisions would amount to "backhanded approval" of these same consequences, and judicial review would once again undermine the ICC's primary jurisdiction by bringing courts into the adjudication of the lawfulness of rates in advance of administrative consideration. Pp.459-460

3. There is no statutory support for a compromise position that, while not immediately reviewable, the ICC's decisions under § 15(8)(a) do become reviewable later, upon the completion of whatever proceedings may be initiated under § 13(1). While the § 13(1) remedy lessens the risk of harm from the ICC's initial refusal to investigate or suspend under § 15(8)(a), that remedy is independent of § 15(8)(a) proceedings. Pp. 463-464.

570 F.2d 1349, reversed.

Mark L. Evans, Washington, D. C., for the petitioner in No. 78-597.

Wandaleen Poynter, Jacksonville, Fla., for the petitioners in No. 78-604.

Richard A. Allen, Cambridge, Mass., for the respondent, the United States.

John H. Caldwell, Washington D. C., for the respondents Seaboard Allied Milling Corp., et al.

Harold E. Spencer, Chicago, Ill., for the respondents Board of Trade of the City of Chicago, et al.

Mr. Justice STEVENS delivered the opinion of the Court.

On September 14, 1977, the Interstate Commerce Commission decided not to exercise its authority under § 15(8)(a) of the Interstate Commerce Act (Act) to order a hearing to investigate the lawfulness of a seasonal rate increase proposed by a group of railroads.¹ The question presented is whether the Commission's refusal to conduct such an investigation is subject to judicial review.

Because the Courts of Appeals for the Eighth Circuit, Seaboard Allied Milling Corp. v. ICC, 570 F.2d 1349, and the District of Columbia Circuit have answered this question differently,² we granted certiorari. 439 U.S. 1066, 99 S.Ct. 831, 59 L.Ed.2d 31. We now hold that the Commission's "no investigation" decision is not reviewable.

Petitioner railroads' rate schedule was the first one proposed under § 202(d) of the Railroad Revitalization and Regulatory Reform Act of 1976 (the 4-R Act). 90 Stat. 36, amending 49 U.S.C. § 15 (1970 ed.) See App. to Pet. for Cert. in No. 78-597, p. 28a. That provision directs the Commission to adopt "expeditious procedures for the establishment of railroad rates based on seasonal, regional, or peak-period demand for rail services." ³

In August 1977, after the Commission had promulgated its new standards and procedures for seasonal rate adjustments, see Ex parte No. 324, 355 I.C.C. 522, the Southern Freight Association proposed a 20% increase in the rates for grain and soybeans shipped from the Midwest in railroad-owned cars between September 15 and December 15, 1977. The railroads supported their proposal with statistics describing the high volume of grain shipments in the fall, an explanation of the anticipated effect of the temporary rates on railcar usage, and some cost evidence.

A number of shippers and large users of transported grain (hereinafter shippers) filed protests claiming the proposed rates were unlawful.⁴ They requested that the Commission exercise its authority under § 15(8)(a) to suspend these rates and to investigate the charges of illegality. On September 14, 1977, a month after the rates were filed, and eight days after receiving the protests, the Commission issued its order declining either to suspend or to investigate the legality of the rates. App. 286-291.

In that order the Commission admonished the railroads "to take prompt action to remove violations of the long-and-short-haul provision of section 4(1) of the Act, if any, in connection with inter-territorial and intra-territorial movements that may be caused by application of demand-sensitive rates on whole grains between points in southern territory." Id., at 288. Moreover, the Commission directed the carriers to file detailed weekly reports relating to the effects of the new schedules, id., at 289-290 (and, in a later order, to keep accounts of all charges and receipts under the rates, id., at 302), and "out of caution" it instructed its Bureau of Investigations and Enforcement and Bureau of Operations "to closely monitor this matter." Id., at 290. With respect to the basic question whether to suspend the rates and conduct a formal investigation, the Commission concluded:

"Weighing the contentions before us and the clear Congressional purpose to permit experimental ratemaking, we will permit this temporary adjustment to become effective." Id., at 289.

It noted, however, that § 13(1) of the Act, which allows shippers to initiate mandatory posteffective proceedings to inquire into and remedy violations of the Act, would still be available to "protect" persons aggrieved by the rates.⁵ App. 289.

Immediately after the Commission entered its order, two judges of the Court of Appeals granted an ex parte application for a temporary stay and enjoined the Commission from permitting the tariff to go into effect. Id., at 295. Eight days later, however, the court dissolved its stay and the new rates went into effect. Id., at 298-300. Two months after the seasonal tariff had expired, the Court of Appeals filed its opinion concluding that the Commission had begun an investigation but had then erroneously terminated it without "adequately investigat[ing] the charges" of "patent illegality" and without supporting its decision "with appropriate findings and conclusions." 570 F.2d, at 1352, 1355, 1356. It directed the Commission to hold hearings to investigate more...