# Malone Freight Lines, Inc. v. United States > District Court, N.D. Alabama · April 5, 1962 · 204 F. Supp. 745 URL: https://www.frixlaw.com/law-library/cases/9625454 ## Case - **Full name:** MALONE FREIGHT LINES, INC., Plaintiff, v. UNITED STATES of America and Interstate Commerce Commission, Defendants - **Court:** District Court, N.D. Alabama - **Decided:** April 5, 1962 - **Citations:** 204 F. Supp. 745; 1962 U.S. Dist. LEXIS 4742 - **Precedential status:** Published - **Opinion:** Dissent by Rives - **Judges:** Rives, Lynne, Grooms - **Cited by:** 14 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9625454 ## Opinion text RIVES, Circuit Judge (dissenting)'. Malone Freight Lines, Inc., brings this suit to set aside orders of Division 2 of the Interstate Commerce Commission of May 1, 1961 and August 14, 1961. In the first order, Division 2 denied Malone the right to reduce its trucking rates on floor coverings and related articles from numerous origins in Delaware, New Jersey, New York and Pennsylvania to destinations in Alabama, Arkansas, Georgia, Louisiana, Mississippi and Tennessee. By its order of August 14,1961, the same Division 2 “acting in an appellate capacity” denied Malone’s petition for rehearing or reconsideration. At one time a federal district court would have had jurisdiction of a suit to enforce an order made by a Division of the Interstate Commerce Commission even though there had been no application for rehearing. As said by Mr. Justice Brandeis speaking for the Court in United States v. Abilene & Southern Ry. Co., 1924, 265 U.S. 274, 281, 282 , 44 S.Ct. 565 , 68 L.Ed. 1016 : “Division 4 consists of four members. There are eleven members; on the full Commission. Under these circumstances, what is here called a rehearing resembles an appeal to another administrative tribunal. An application for a rehearing before the Commission would have been clearly appropriate. The objections to the validity of the order now urged are in part procedural. They include questions of joinder of parties, of the admissibility of evidence, and of failure to introduce formal evidence. Most of the objections do not appear to have been raised before the Division. If they had been, alleged errors might have been corrected by action of that body or by the full Commission. The order involved also a far-reaching question of administrative power and policy which, so far as appears, had never been passed upon by the full Commission, and was not discussed by *757 these plaintiffs before the Division. In view of these facts, the trial court would have been justified in denying equitable relief until an application had been made to the full Commission, and redress had been denied by it. But, in the absence of a stay, the order of a division is operative; and the filing of an application for a rehearing does not relieve the carrier from the duty of observing an order. Despite the failure to apply for a rehearing, the court had jurisdiction to entertain this suit. Prendergast v. New York Telephone Co., 262 U.S. 43, 48, 49 [ 43 S.Ct. 466 , 67 L. Ed. 853 ]. Compare Chicago Rys. Co. v. Illinois Commerce Commission, [7 Cir.] 277 Fed. 970, 974 . Whether it should have denied relief until all possible administrative remedies had been exhausted was a matter which called for the exercise of its judicial discretion. We cannot say that, in denying the motion to dismiss, the discretion was abused.” That law was changed in 1940 by the addition to Section 17 of the Interstate Commerce Act of paragraph (9) [ 49 U.S.C.A. § 17 (9), 54 Stat. 913 ], which precludes judicial review of the action of a division, an individual Commissioner or a board unless reconsideration of such action has been disposed of “by the Commission or an appellate division.” “(9) When an application for rehearing, reargument, or reconsideration of any decision, order, or requirement of a division, an individual Commissioner, or a board with respect to any matter assigned or referred to him or it shall have been made and shall have been denied, or after rehearing, reargument, or reconsideration otherwise disposed of, by the Commission or an appellate division, a suit to enforce, enjoin, suspend, or set aside such decision, order, or requirement, in whole or in part, may be brought in a court of the United States under those provisions of law applicable in the case of suits to enforce, enjoin, suspend, or set aside orders of the Commission, but not othenuise.” (Emphasis supplied.) That such was the intention of the new paragraph is made clear by its legislative history, including the following statement in the Conference Report: “4. A new paragraph (9) is included providing that orders of a division, an individual Commissioner, or a board shall be subject to judicial review as in the case of full Commission orders, after an application for rehearing has been made and acted upon. (Conf. Rep. dated April 26, 1940, House Report No. 2016 on S. 2009 at pp. 66-67)” 1 With deference to my brothers, I think that statute is jurisdictional, and that a court lacks jurisdiction of an action to set aside an order of a division of the Interstate Commerce Commission in the absence of compliance with the statutory conditions precedent to judicial review of such an order. Holmes v. United States, S.D.N.Y., 1949, 89 F.Supp. 894, 896 , aff’d per curiam, 339 U.S. 927 , 70 S.Ct. 628 , 94 L.Ed. 1348 ; Refrigerated Transport, Inc. v. United States, N.D.Tex., 1951, 101 F. Supp. 95, 96 (opinion by Judge Atwell with Judges Hutcheson and Davidson concurring); National Water Carriers Ass’n v. United States, S.D.N.Y., 1954, 126 F.Supp. 87, 90 . The general jurisdictional statute, 28 U.S.C.A. § 1336 , begins with “Except as otherwise provided by Act of Congress * * *.” Clearly, it affords no warrant for us to ignore the condition precedent to judicial review prescribed by 49 U.S.C.A. § 17 (9). The judicial review provided by Section 10 of the Administrative Procedure Act ( 5 U.S.C.A. § 1009 ) does not purport to broaden the right of review where “statutes preclude judicial review” or *758 where any form of reconsideration is “otherwise expressly required by statute.” There can be, therefore, no reasonable contention that the jurisdiction of the court is broadened by the Administrative Procedure Act. Jurisdiction is claimed in this case because in denying Malone’s motion for reconsideration Division 2 stated that it was acting in an appellate capacity. It derived that authority from subsection 3 of Rule 1.101(a) of the General Rules of Practice of the Commission as amended February 1,1961, which reads as follows: “(3) Limitations on petitions for review of division decisions. Pursuant to authority granted in section 17(6) of the Interstate Commerce Act, the right to apply to the entire Commission for rehearing, reargument, or reconsideration of a decision, order, or requirement of a division of the Commission in any proceeding shall be limited and restricted t'o those proceedings in which prior to or at the time of issuance of a division’s decision, the entire Commission, on its own motion, determines and announces that an issue of general transportation importance is involved. In proceedings in which no such announcement has been made, but in which a division reverses, changes, or modifies a prior decision by a hearing officer or where the initial decision is made by a division, a petition to the same division for rehearing, or reargument, or reconsideration of its decision will be permitted and will be considered and disposed of by such division in an appellate capacity and with administrative finality.” (Emphasis supplied.) The words “appeal” and “appellate”, in their ordinary and usual significance, contemplate that a different tribunal made up of different members from the one that made the initial decision will review the decision. 3A Words and Phrases, perm, ed., 271, 365. That distinction was recognized by Mr. Justice Brandéis in the part of United States v. Abilene & Southern Ry. Co., supra, heretofore quoted, when he said: “Under these circumstances, what is here called a rehearing resembles an appeal to another administrative tribunal.” 265 U.S. 281 , 44 S.Ct. 565 , 68 L.Ed. 1016 . “Appellate divisions” are referred to in several other places in Section 17 of the Act. Subdivision (1) provides that “the Commission may designate one or more of its divisions as appellate divisions.” Subdivision (6) provides: “If the decision, order, or requirement was made by a division, an individual Commissioner, or a board, such application shall be considered and acted upon by the Commission or referred to an appropriate appellate division for consideration and action.” (Emphasis supplied.) See 49 U.S.C.A. § 17 (1), (6), (7), (8) and (9). Subdivisions (7), (8) and (9) also refer to review by the Commission or an “appellate division.” Why should the restrictive term “appellate” be employed no less than six times if reconsideration by the same division wearing a different cap is disposition by an appellate division? The legislative history indicates that when the Commission requested legislation authorizing it to provide for appellate divisions, it had in mind that there might be a five-man division specifically designated as an appellate division. See 49th Annual Report of the Interstate Commerce Commission 97 (1935); Hearings on Omnibus Transportation Legislation before the House Committee on Interstate and Foreign Commerce 1706 (1939). In the Interstate Commerce Commission Report of March 20, 1939 to the House Committee, pp. 18-19; House Hearings on March 23, 1939, pp. 1574, 1587 on Omnibus Transportation Legislation, the Commission had stated: “In our annual report for 1935, pages 96-97, also, we recommend, in the interest of saving time and promotion of greater efficiency, that we be authorized to create one or more appellate divisions within our number, to which we might assign appli *759 cations for rehearings generally, or in particular cases or classes of cases, for final action. We then suggested the necessary textual amendments to sections 16a and 17 of the act to enable us to accomplish this purpose.” The question may be narrowed down to whether the Commission had authority to provide that a division could review an order previously entered by it “in an appellate capacity” and thereby furnish the necessary jurisdictional basis for judicial review. It is important to note that the rules of the Commission must “conform, as nearly as may be, to those in use in the courts of the United States.” 49 U.S.C.A. § 17 (3). When we consider court procedure, no one would argue that a reconsideration of a decision by the trial court would meet a requirement of its review by an appellate court. Of course, as Judge Swan has well said, “The Commission could not by its Rules extend this court’s jurisdiction beyond the Congressional grant.” Holmes v. United States, supra, 89 F.Supp. at 896 . In other respects, the authority of the Commission to adopt subdivision (3) of its Rule 1.101(a), as amended February 1, 1961, is not here in issue. The Commission claims to derive that authority in part from the following language in 49 U.S.C.A. § 17 (6): “ * * * but the Commission may, from time to time, make or amend general rules or orders establishing limitations upon the right to apply for rehearing, reargument, or reconsideration of a decision, order, or requirement of the Commission or of a division so as to confine such right to proceedings, or classes of proceedings, involving issues of general transportation importance. Notwithstanding the foregoing provisions of this paragraph, any application for rehearing, reargument, or reconsideration of a matter assigned or referred to an individual Commissioner or a board, under the provisions of paragraph (2) of this section, if such application shall have been filed within twenty days after the recommended order in the proceeding shall have become the order of the Commission as provided in paragraph (5) of this section, and if such matter shall not have been reconsidered or reheard as provided in such paragraph, shall be referred to an appropriate appellate division of the Commission and such division shall reconsider the matter either upon the same record or after a further hearing.” (Emphasis supplied.) If we assume arguendo that orders of a division in proceedings not “involving issues of general transportation importance” need not be reviewed by the Commission or by an appropriate appellate division, it by no means follows that such orders must be reviewed by a court. Indeed, it would be anomalous to say that such orders are not of sufficient importance to require review by the Commission or an appropriate appellate division but are important enough to require judicial review. Holmes v. United States, supra, 89 F. Supp. 894, 897 ; Refrigerated Transport, Inc. v. United States, supra, 101 F.Supp. 95, 96 ; National Water Carriers Ass’n v. United States, supra, all seem to me to hold that compliance with the requirements of 49 U.S.C.A. § 17 (9) is jurisdictional. If that be true, then, for a district court to have jurisdiction after the denial of a rehearing by the same division which rendered the initial decision would mean to eliminate from that subsection (9) the phrase “by the Commission or an appellate division.” That cannot be done if we are to observe the familiar canon that every word and phrase in a statute should be accorded some meaning, a rule especially applicable here in the light of the emphatic conclusion of subsection (9), “but not otherwise.” I would dismiss the complaint for lack of jurisdiction and therefore respectfully dissent. . The general jurisdictional statute, 28 U. S.G.A. § 1336, provides for review only of “any order of the Interstate Commerce Commission.” --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9625454. Public record. Not legal advice.