United States v. Jones Jones v. United States 8212 1949

• Decision Date: 18 April 1949
• Docket Number: 198,Nos. 135,s. 135
• Citation: 69 S.Ct. 787,93 L.Ed. 938,336 U.S. 641
• Parties: UNITED STATES v. JONES. JONES v. UNITED STATES. Argued Feb. 2—3, 1949
• Court: U.S. Supreme Court

336 U.S. 641

69 S.Ct. 787

93 L.Ed. 938

UNITED STATES

v JONES.

JONES

v. UNITED STATES.

Nos. 135, 198.

Argued Feb. 2—3, 1949.

Decided April 18, 1949.

Rehearing Denied May 31, 1949.

See 337 U.S. 920, 69 S.Ct. 1150.

Mr. Moultrie Hitt, of Washington, D.C., for Jones.

Mr. Philip B. Perlman, Sol. Gen., of Washington, D.C., for United States.

[Argument of Counsel from page 642 intentionally omitted] Mr. Justice RUTLEDGE delivered the opinion of the Court.

This controversy began in 1931, when respondent's predecessors as receivers of the Georgia & Florida Railroad filed an application with the Interstate Commerce Commission for a reexamination of rates then applicable to it for transporting the mails. Since then, in one form or another, the dispute has found its way back and forth through the Commission and the courts, finally to come here now for the second time. See United States v. Griffin, 303 U.S. 226, 58 S.Ct. 601, 82 L.Ed. 764.

Through all these years the carrier and the Commission have been at odds over whether the railroad is entitled to an increase in the rates prescribed for its service for the period beginning April 1, 1931, and ending, as covered by the present suit, February 28, 1938.¹ The case is now here on certiorari to the Court of Claims, 335 U.S. 883, 69 S.Ct. 231, which had rendered a judgment awarding respondent $186,707.06 as increased compensation due for the years 1931 to 1938, Griffin v. United States, 77 F.Supp. 197, 110 Ct.Cl. 330, contrary to the findings and orders of the Commission denying any increase beyond the amounts already paid for that service under the rates fixed by it. Railway Mail Pay, Georgia & Florida R. Co., 192 I.C.C. 779; id., 214 I.C.C. 66.

I.

A statement of the background and course of the litigation will aid in understanding the rather complicated problems presented, both on the merits and affecting jurisdiction.

In 1916 Congress enacted the Railway Mail Pay Act. 39 U.S.C. §§ 523—568, 39 U.S.C.A. §§ 523—568. This embodied a comprehensive scheme for regulating transportation of the mails by railroad common carriers. Such carriers were required to transport the mails pursuant to the Act's provisions. These included that the carriers should be compensated at 'fair and reasonable rates' to be fixed and determined by the Interstate Commerce Commission. The rates were to be established only after notice and hearing. But after six months from the entry of a rate order the Postmaster General or a carrier was authorized to apply for a reexamination of the order. 39 U.S.C. §§ 541, 542, 544—554, 553, 39 U.S.C.A. §§ 541, 542, 544—554, 553.

The Commission was authorized to prescribe 'the method or methods by weight, or space, or both, or otherwise, for ascertaining such rate,' 39 U.S.C. § 542, 39 U.S.C.A. § 542, and for the same purpose 'to make such classification of carriers as may be just and reasonable and, where just and equitable, fix general rates applicable to all carriers in the same classification.' 39 U.S.C. § 549, 39 U.S.C.A. § 549. Other sections specify and define four classes of service, namely, full railway post-office car service, apartment service, § orage-car service and closed-pouch service. 39 U.S.C. §§ 525—530, 39 U.S.C.A. §§ 525—530.² Only apartment service and closed-pouch service are involved in this case.

On December 23, 1919, after extended investigation and hearings, the Commission entered its first general mail rate order. Railway-Mail Pay, 56 I.C.C. 1. This adopted the space basis for determining 'fair and reasonable rates.' On July 10, 1928, in proceedings for reexamination the Commission granted a general increase of 15% over the preexisting rates. Railway Mail Pay, 144 I.C.C. 675. The Georgia & Florida Railroad accepted these general rates until April 1, 1931.

At that time it applied to the Commission for a reexamination of the rates as applied to itself. The application was heard and determined by Division 5. On May 10, 1933, the Commission denied any increase, holding the general rates established by the order of July 10, 1928, fair and reasonable as applied to this carrier. Railway Mail Pay, Georgia & Florida R. Co., 192 I.C.C. 779. This order is in substance, though not technically, the one now involved.

After the Commission had denied reconsideration, the railroad sued in the United States District Court for the Southern District of Georgia to set aside the Commission's order. A special three-judge court was convened, cf. the Urgent Deficiencies Act, former 28 U.S.C. §§ 41(28), 47 (1948 Revision, 28 U.S.C.A. §§ 1336, 2284, 2325); held the order unlawful; and remanded the case to the Commission for further proceedings. This decree was filed on January 23, 1935.

Thereupon the full Commission conducted further hearings and in a report filed February 4, 1936, again found the rates previously fixed to be fair and reasonable in their application to the Georgia & Florida Railroad. The order therefore denied any increase. Railway Mail Pay, Georgia & Florida R. Co., 214 I.C.C. 66.

Again the carrier resorted to the District Court, filing a supplemental bill. And again that court, composed of the same three judges, held the Commission's order unlawful in a decree filed on February 23, 1937. The Government appealed directly to this Court, which, in United States v. Griffin, supra, held that the order was not of a type reviewable under the Urgent Deficiencies Act.³ Accordingly, on February 28, 1938, the District Court's judgment was reversed with directions to dismiss the bill and without determination of the cause on the merits.

After nearly four years the receivers renewed the litigation by filing this suit in the Court of Claims. The amended petition sets forth in some detail the history of the previous stages of controversy before the Commission and the courts. The carrier's basic claims on the merits are substantially the same as in those proceedings. They are, in effect, (1) that the Commission's orders denying any increase are confiscatory, in that the rates prescribed by the general rate order on July 10, 1928, and continued in effect specifically as to this carrier by the orders of May 10, 1933, and February 4, 1936, do not afford just compensation under the Fifth Amendment on the ground that they do not provide for payment of the cost of the service rendered plus a reasonable return upon invested capital allocated to that service; and (2) that the Commission's orders do not afford the 'fair and reasonable' compensation required by the Railway Mail Pay Act.⁴ Both claims rest upon attacks made on the Commission's findings as b ing unsupported by the evidence before it and on its conclusions as being contrary to that evidence.

To sustain jurisdiction in the Court of Claims, respondent rests upon § 145 of the Judicial Code, 28 U.S.C. s 250, now 28 U.S.C. § 1491, 28 U.S.C.A. § 1491, and upon statements made in part Fourth of the opinion in United States v. Griffin, 303 U.S. at page 238, 58 S.Ct. at page 607, 82 L.Ed. 764.⁵

II.

Although the Railway Mail Pay Act contains no explicit provision for judicial review of orders of the Interstate Commerce Commission fixing rates of pay for transporting the mails pursuant to authorizations of the Postmaster General for such service, it had been thought, until the decision in United States v. Griffin, supra, that such orders were of the kind reviewable under the Urgent Deficiencies Act. The affect of that decision, however, was to rule out such orders as those now in question from the jurisdiction conferred by the latter Act.

While the 'negative order' basis for the Court's ruling is no longer effective, Rochester Telephone Corporation v. United States, 307 U.S. 125, 59 S.Ct. 754, 83 L.Ed. 1147, the alternative grounding remains in full force. 303 U.S. at page 234, 58 S.Ct. at page 605, 82 L.Ed. 764.⁶ Since the very orders now in issue were involved in the Griffin case, it is settled that the railroad or its receivers had no recourse to a district court, under the Urgent Deficiencies Act, for securing review of the Commission's order or relief of the type now sought.

The Court in the Griffin case, however, was not content to rest merely with this negative jurisdictional ruling. In part Fourth of the opinion the Court went on to say that its ruling did not 'preclude every character of judicial review.' 303 U.S. at page 238, 58 S.Ct. at page 607, 82 L.Ed. 764. The opinion then suggested three possible other methods, two in the Court of Claims and one in the district courts.

Without doubt it was due to these suggestions that respondent's predecessors chose to bring this suit in the Court of Claims. The language in which the suggestions were made has assumed such importance, in view of the problems raised by the receivers' choice in following them, that it seems wise here to quote in full what the Court said:

'If the Commission makes the appropriate finding of reasonable compensation but fails, because of an alleged error of law, to order payment of th full amount which the railroad believes is payable under the finding, the Court of Claims has jurisdiction of an action for the balance, as the claim asserted is one founced upon a law of Congress. Missouri Pacific R. Co. v. United States, 271 U.S. 603, 46 S.Ct. 598, 70 L.Ed. 1109. Compare United States v. New York Central R. Co., 279 U.S. 73, 49 S.Ct. 260, 73 L.Ed. 619, affirming (New York Central R. Co. v. United States), 65 Ct.Cl. 115, 121. And since railway mail service is compulsory, the Court of Claims would, under the general provisions of the Tucker Act, 24 Stat. 505, have jurisdiction also of an action for additional compensation if an order is confiscatory. United States v. Great Falls Mfg. Co., 112 U.S. 645, 5 S.Ct. 306, 28 L.Ed. 846; North American Transportation & Trading Co. v. United States, 253 U.S. 330, 333, 40 S.Ct. 518, 64 L.Ed. 935; Jacobs v. United States, 290 U.S. 13, 16, 54 S.Ct. 26, 78 L.Ed. 142, 96 A.L.R. 1. ...