United States v. SOUTHERN RAILWAY COMPANY

• Decision Date: 18 February 1966
• Docket Number: Civ. A. No. 4723.
• Citation: 250 F. Supp. 759
• Court: U.S. District Court — District of South Carolina
• Parties: UNITED STATES of America, Plaintiff, v. SOUTHERN RAILWAY COMPANY, Defendant.

250 F. Supp. 759

UNITED STATES of America, Plaintiff, v. SOUTHERN RAILWAY COMPANY, Defendant.

Civ. A. No. 4723.

United States District Court D. South Carolina, Greenville Division.

February 18, 1966.

John C. Williams, U. S. Atty., Greenville, S. C., for plaintiff.

J. Wright Horton and F. Dean Rainey, Greenville, S. C., Paul C. Warnke and Duncan B. Phillips, Washington, D. C., for defendant.

HEMPHILL, District Judge.

Plaintiff United States seeks civil penalties against Southern Railway Company under the provisions of Section 1 (17) of the Interstate Commerce Act, 49 U.S.C. § 1(17). The Complaint charges that Southern violated Service Order No. 947¹ on twenty occasions between January 21 and March 1, 1964, in the vicinity of Greenville, South Carolina. Prayed for is the statutory maximum civil penalty of $500.00 for each violation alleged. Both parties have moved for Summary Judgment pursuant to Rule 56, Federal Rules of Civil Procedure.

The Complaint charges defendant's delay, in several instances, in handling cars for placement as treated by Paragraph (a) (1) (a) of the Service Order which provides that carriers will place inbound loaded cars on consignee's tracks within 24 hours after the first 7:00 A. M. o'clock, exclusive of Saturdays, Sundays and holidays. The remaining "charges" stem from alleged violations of Paragraph (a) (2) (a) of the order requiring removal of empty cars from the point of unloading within 24 hours after the first 7:00 A. M. o'clock, exclusive of Saturdays, Sundays, and holidays, following release by consignee or shipper.

The substance of Southern's defense, as revealed by its Answer, is that it denies the Interstate Commerce Commission had authority to issue Service Order No. 947, and that there was no "emergency" extent such as would give the I.C.C. authority to issue an "order" without notice and hearings required by 49 U.S.C. § 1(14) (a), which provides in part: "The Commission may, after hearing, * * * establish reasonable rules, regulations, and practices with respect to car service by common carriers by railroad subject to this chapter * * *." The Government's counter-thrust to this defense is that order was generated by an "emergency" within the contemplation of 49 U.S.C. § 1(15) which allows the I.C.C. to make "directions" without regard to rules, regulations, or practices, and without holding hearings, when a genuine emergency exists. Further averred is that there is no authority in this Court, consisting of one judge, to enjoin the operation of the Order as a three-judge court is necessary as is provided by 28 U.S.C. § 2325, which requires that:

An interlocutory or permanent injunction restraining the enforcement, operation or execution, in whole or part, of any order of the Interstate Commerce Commission shall not be granted unless the application therefor is heard and determined by a district court of three judges under section 2284 of this title.

Southern also contends that Service Order No. 947 does not impose liability without fault, alleges that during the time in question full compliance was impossible.

I

The first issue revolves around the question of whether or not Service Order No. 947 is void because the hearings required by Section 1(14) of the Interstate Commerce Act were not held, and whether or not it is an "emergency direction" authorized by Section 1(15) thereof.

Jurisdiction in the I.C.C. to regulate car service is found in Sections 1(10) through (17) of the Interstate Commerce Act. Its sole authority to issue regulations is conferred by Section 1(14) (a) of the Act, 49 U.S.C. § 1(14) (a).² It is clear from the face of the Act that this authority can be exercised only after affected parties have had an opportunity to be heard. Under Section 1(15) of the Act, 49 U.S.C. § 1(15)³, the I.C.C. has authority to utilize certain summary powers without notice or hearing.

In Service Order No. 947⁴ it was announced that an emergency existed which required immediate action to alleviate an acute shortage of railway boxcars throughout the country. And, as is noted in note 4, Service Order No. 947 has been continued in force and effect with no substantial changes.

As was noted above, the extraordinary power to declare an emergency has a statutory basis. It is necessary that there be a real emergency, an actual emergency, or Congress would have used less restrictive language. The authority to issue emergency directions, as given in Section 1(15) was not designed to circumvent the regular rule-making power of the Commission given in Section 1 (14).

It is interesting to note in Service Order No. 947 the frequent repetition of words such as "regulations," "order," "rules," "practices," and "order and direction," all evincing the forceful mandate of the Commission. The language of Section 1(15) (b) gives the authority to "make * * * just and reasonable directions," in an emergency. Emphasis supplied.

The notice and hearing required to protect the rights of all interested parties cannot be lawfully bypassed by characterizing sweeping and continuing regulations and rules as "directions." The concurrent existence of the two sections discussed clearly shows the Congressional intent to confine narrowly the kind of emergency action the I.C.C. may take without following the normal regulatory procedure.

Service Order No. 947, on its face, shows that it exceeds the Commission's emergency powers. No attempt was made to mask the broad scope and effect of its regulatory action:

Each common carrier by railroad subject to the Interstate Commerce Act shall observe, enforce, and obey the following rules, regulations and practices with respect to its car service * * *.

This sweeping pronouncement is entirely inconsistent with the concept of emergency "directions."

The legislative history of Section 1(15) shows that the authority to make "just and reasonable directions with respect to car service" without notice, hearing, or the making or filing of a report was designed to permit the I.C.C. to deal on a short-range basis with specific emergency problems. This power was thusly limited to avoid constitutional doubts. See, e. g., Hearings Before the House Committee on Interstate and Foreign Commerce, H.R. 19546, H.R. 20256, and H.R. 20352, 64 Cong., 2nd Sess. 26, 34-36 (1917); 55 Cong.Rec. 2022, 2025 (May 9, 1917); 55 Cong.Rec. 2631 (May 21, 1917). This stop-gap authority was not designed to substitute for considered solutions to continuing, albeit chronic, problems arrived at after full and fair hearings.

The Commission's assertion of its unfettered prerogative, absent fraud, wrongdoing or capriciousness, to perpetuate service orders on unreviewable findings of "legislative emergency," Cf., Daugherty Lumber Co. v. United States, 141 F.Supp. 576, 581 (D.Ore.1956, 3-judge court); 29A C.J.S. p. 143, is incompatible with the legislative history of Section 1(15).

When the first hearings were held on the bills which were the forerunners of the Esch Car Service Act of 1917, 40 Stat. 101, it was evident that the Commission itself recognized the limited realm of legality afforded by this legislation. Commissioner Hall, after telling the committee of Congress that this authority to promulgate orders without notice or an opportunity for hearing "would not be resorted to except in emergency," went on the record as saying that this limitation to emergency situations saved the legislation from constitutional doubt. In response to the specific question as to why the issuance of directions without notice would not be a deprivation of property without due process of law, Commissioner Hall replied:

If it were anything else but an emergency, of course, the notice should and would be given. But to make clear what I may not have made clear—what is contemplated in a time of emergency is not the substituting of new rules for old. What is contemplated is the giving of specific directions as to specific things, right on the ground, as, for example, Chicago, if the situation is congested there. The Commission, through such agency as it may select for that purpose, says to one carrier "you take fifty empty cars and deliver them to that road; you take 100 empty cars, and deliver them to that other road. Hearings Before the House Committee on Interstate and Foreign Commerce on H.R. 19546, H.R. 20256, and H.R. 20352, 64 Cong. 2d Sess. 26, at 36 (1917).

Commissioner Hall analogized the I.C.C.'s function in a car shortage emergency to that of a policeman in a traffic jam. Subsequent Congressional consideration of car service legislation make it abundantly clear that the emergency power was intended to cover cases of actual emergency only. See 55 Cong.Rec. 2022-26, by Congressman Esch. F. B. Dow, an attorney for the I.C.C., was asked by the Senate Committee why summary power to deal with car service should not be conferred generally on the I.C.C. instead of "introducing the uncertainty as to when or where there is an emergency or not." His reply was that the Commission should not be given such power without adequate provision for notice and hearing. His opinion was that it would normally be essential to afford a hearing, as proper car service rules are complicated matters requiring careful consideration. Hearings Before the Subcommittee of the Senate Committee on Interstate Commerce on § 636, 65 Cong. 1st Sess. 13 (1917) at 31. Nowhere in the voluminous legislative history is there any suggestion that this authority could be exercised in lieu of the regular rule-making authority given by Section 1(14).

It is obvious that Service Order No. 947, as amended, sought to deal with a chronic problem, not an emergency. As counsel for the Commission noted in his argument⁵:

I would like to make brief mention of a bit of the legislative history of this Section 1(15) of the Act. This Act, surprisingly enough, was passed after a period of a number of prolonged car shortages that began in about 1907 with the

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