Brief in Opposition to Motion to Affirm — National Industrial Traffic League v. United States

Sa 6 Re mg te

‘

re Se ar an” ae

.

PG A Sree RN Ree EEN ONAN

<t JPREME COURT. U. & No. 898 FILED

ae FEB 20 1969

Supreme Court of the Unite Shiate sis CLERK

- Office-Buprame Court) US. |

OcToBER TERM, 1968

-

THE NaTIONAL INDUSTRIAL TRAFFIC LEAGUE, THE NaTIONAL SMALL

SHIPMENTS TRAFFIC CONFERENCE, INc., DruG AND TOILET

. PREPARATION TRAFFIC CONFERENCE, —

Appellants,

—_—V.—

Unitep STATES OF AMERICA and

INTERSTATE COMMERCE COMMISSION,

a : Appellees,

and

Rocky Mountain Motor Tarirr Bureav, Ine., et al.,

_Intervenor-Appellees.

_ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE

- _ DISTRICT OF COLUMBIA

APPELLANTS’ BRIEF IN OPPOSITION

TO MOTIONS TO AFFIRM

JOHN F. DoNELAN

JOHN M. ULERY

JOHN H. CALDWELL

914 — Building

Washington, D. C. 20005

Attorneys for Appellant, :

The National Industrial Traffic League

Arruur A. anni

233 Broadway

‘ New York, N. Y. 10007

JOHN J. C. Martin

685 Third Avenue _.

New York, N. Y. 10017

Attorneys for Appellants,

The National Small Shipments Traffic

_ Conferencé, Inc., and Drug and Toilet

Preparation Traffic Conference

“

a

.

TABLE GF CONTENTS -

PAGE

Statement .. - hae

‘Kelpie : . s 4

Conciusion . ee vase 2.

Co., 392 U.S. 571 - Seo a’ Panis

Arrow Transportation Company v. Southern Railway

Company, 372 U.S. 658 +... | 2

Cancellation of Joint Fares Between District ‘of Co-

lumbia and Nearby Virginia, 47 M.C.C. 205, 208 ... 3

Commodities—Pan-Atlantic Steamship Corp. 313

~C.C: 23 11

Eastern Air Lines v. C.A.B., 294 F. 2d 235 ... 10, 11

IC.C. v. New York, N.H. & H. RR. Co., 372U.8. 744 11

Ingot Molds, Pennsylvania to Steelton, Ky., 326 I.C.C.

77 7 ‘ - ,

1

Wisconsin v. F.P.C., 373 U.S. 294 _. 10, 11

Aas a ii |

I

Statutes,. etc.:

49 U.S.C. §316(e)

PAGE

49 U.S.C. § 316(g)

49.U.S.C. § 317

IN THE

Supreme Court nf the United States

Ocroser. TERM, 1968

No. 898

<i

Tur Nationau InpustriaL Trarric Leacue, THe Nationa

. Smaty Surpments TraFFic CONFERENCE, Inc., DRUG AND

Tomer PREPARATION TRAFFIC CONFERENCE,

Appellants,

—V.— .

Unirep States or AMERICA and

INTERSTATE COMMERCE COMMISSION,

‘ Appellees,

and

Rocky Mountain Moror Takirr Bureau, Inc., et al.,

Intervenor-Appellees. |

¢

ON APPEAL FROM THE ‘UNITED STATES DISTRICT COURT FOR .

- THE DISTRICT OF COLUMBIA

- APPELLANTS’ BRIEF IN OPPOSITION |

TO MOTIONS TO AFFIRM

Pursuant to Rule 16(4) of the Rules of this Court, ap-

pellants submit this brief in opposition to motions filed by

the appellees to affirm: the judgment of the district court.

2 ONE TY RBA NRYINC I et rey ONY

en eee

ee eee eS ee ee ee ee A ee

i

as SIRENS OORT SS A ns Png

Statement

Contrary to the decision of the district court and argu-

ment of the appellees, this case presents no issue involving

the Commission’s discretionary power to suspend ‘rate

schédules.: Very much in issue are the’ meaning and effect

of an order of suspension once the Commission has exer- .

~ cised its discretionary authority by ordering suspension

of rate schedules. Altogether inapposite are Arrow Trans-

portation Company v. Southern Railway Co., 372 U.S.

658, end similar cases, relied ‘on in the district court’s

_ Opinion and in appellees’ argument as dispositive of the ©

suit. The action brought by appellants thrusts into critical

focus, . language of the statute (49 U.S.C. § 316(g)), sub-

stantially restated in the suspension order, that articulates

the legislative purpose to “suspend the operation of such.

schedule and defer the use of such rate”. The question is

whether a suspension order, onée entered by the Commis-

sion, impinges only on the schedules in which the rates

are published or on the rates themselves so that carriers

who elect not to defend and who cancel the suspended

schedules are precluded from publishing’ the identical

‘rates whose use was ordered. deferred by the unrevoked

. Suspension order.

Of the substantiality of. this question there can be no- |

doubt. The challenging problem evoked by the question -

hk mned is limited by events that were enacted here. Faced with

the Commission order of suspension, the carriers an-

nounced: |

“please be advised that member carriers do not choose

to defend the general increases under suspension by

* order of the Commission.”

~

3

They thereupon cancelled the suspended schedules. Im-

mediately thereafter (in the case of Rocky Mountain,

without waiting for the effective date of the cancellation

supplement to arrive) they republished the identical rates.

The Commission’s order which in terms suspended opera-

tion of the schedules and deferred their use was unrevoked,

_ unmodified in any particular, and in full force and ef vet.

In light of the district court’s holding that the suspension

order was not outstanding (JS 4a) it seems appropriate

to emphasize that on the date the rates were republished,

and for 19 days thereafter, nothing had been done even

with respect to discontinuance of the investigation pro-

_ ceeding. The schedules when ‘tendered for filing were

thus palpably in violation of the suspension order. As

held by the Commission if Cancellation of Joint Fares

| Between. Ristrict of Columbia and Nearby Virginia, 47

M.C.C. 205, 208, the schedules should have been rejected

as illegal—a’ course apparently acknowledged as proper

by US:ICC (Motion, p. 6).

Appellants moved before the Commission to reject the

offending schedules. On August 15, 1967, when the petition

to reject the schedules was filed, there was no order of

discontinuance in existence; the schedules were undeniably

illegal; the petition seeking rejection was incontrovertibly

well-founded. Yet the Commission arbitrarily refused to

entertain the :petition to reject the schedules and it was

“passed to the Commission’s files without action” (JS‘17a):

If, as appellants sugéest, the schedules were illegal, the

Commission’s function, indéed its duty, was to strike them

from its files. There was no neéd in this suit to ask or

- Seek suspension of the republished rates and appellants

_ do not do so. 2 . ,

7 .

PLT LIS PTS t

— et >

Peeteren Qe EE wre Te

.

4

The question of statutory’ constryction evoked by these’

events eluded the district court and is avoided in the mo-.

tions, to affirm. ‘US-ICC cite no case that interprets the

critical phrase on which section. 316(g) centers—“suspend

the. operation of such schedule and defer the use of such

rate”. The question, of obvious substantiality, is one of

first impression and merits interpretive study and reso-

lution. In their motion, US-ICC prefer to’ rest their argu-

ment on the dubious thesis that an order discontinuing

the -investigation proceeding—made after the rates were

republished-—may be. deemed to have revoked the suspen-

‘sion order and may be given retroactive effect to legiti-

matize the republished schedules.

Argument

1, The threshold statement made by US-ICC in their

motion to affirm reveals a basic misconception that infects

their argument and, in the end, is fatal to the conclusion

they advocate. Of the orders initially issued by the Com-

mission which suspended the carriers’ rate schedules, they

Suy (p. 2):

“although the orders were annulled by thé Commission

when the motor carriers cancelled the schedules, ap-

pellants (shippers) sued to ‘enforce’ them.”

But, the order of suspension was...

. not annulled;

not annulled when.the carriers cancelled the sched-

ules;

not annulled when. the. carriers republished the

rates.

oe *%

Clearly visible in the chronology (JS 6) is this sequence ;

| of events:

Yea

i_y

5

_ Buspension order—July 12th;

J cancellation of ‘schedules (published)—July both;

republication of the rates—July 27th;

order of discontinuance—August 16th.

It is thus unmistakably plain that on July 27, 1967, when.

‘the carriers republished the ‘rates, the order of suspen-

sion stood unrevoked and was unmodified even by the

order of discontinuance subsequently issued.

The statement of US-ICC includes an unwarranted ~

, characterization of the carriers’ purpose in republishing

the suspended rates. They say (p.-2): |

“Recognizing that they had not sufficiently supported

the lawfulness of the proposed rates, the tariff bureaus

notified the Commission that, pursuant to the Com-

mission’s standing Special Permission No. M-94200

(J.S. 15a-16a), they were cancelling the schedules.” _

US-ICC seem to be suggesting that the tariff bureaus com-

municated to the Commission an intention to cancel the

schedules in order to republish the same rates with

stronger supporting data.* Phis is wholly at variance with

the record facts. The reference to JS 15a-16a. is merely

to the reproduced standing order of the Commission that

permits a carrier whose schedule is suspended to cancel °

the suspended matter on ten days’ notice. No reference

is supplied to any letter or notice that the carriers sent

to the Commission revealing their purpose. On the .con-

trary, the only notification of which the public had any

knowledge“is that quoted above announcing that the ear-

riers “do not choose to defend ‘the general increases under

suspension”. So far from suggesting an intention to con-

Sar

ee ee

6

tinue to support the suspended rate increases, their notice

7 reveals an | election to abandon their defense.

2. US-ICC argue (pp. 4-5) that appellants have inant

an attack on the Commission’s “sole and exclusive power”

with respect to suspension of tle republished rates. But

appellants’ complaint is directed, not to a suspension order

that the Commission declined to enter, but to the suspen-

‘sion order that the Commission did enter. Authority to

suspend is indeed reposed in the administrative discre- - -

tion of the Commission. The same cannot be said of au-

thority to enforce an order of suspension. The notion

that this is a power, exercisable in the uncontrolled dis-

cretion of the Commission, is repugnant to the administra- ;

tive process if not precluded by statutory .definition of .

suspension as Commission action to “defer the use of

such rate”. The position urged by US- ICC underscores

the substantiality of the third question | posed by this ap-

peal—is enforcement of a suspension order, as distin-

guished from issuance of such an order; a matter com-

mitted to the discretion. of the Commission and not subject

to judicial review?

3. US-ICC assert that the order of suspension was

“clearly annulled” when the Board entered its order dis-

continuing the investigation proceeding (p. 4). Difficulties

with that position are multiple: (1) the order of discon-

tinuance was handed down, not by the Commission. or by

: a division of the Commission, but by the Board of Sus-

pension to which had been delegated authority to dis-

continue an investigation proceeding upon cancellation of

suspended schedules, but not to vacate an order of sus-

pension j= (2) eeu to vacate a suspension order was

»

7

reserved to the entire Commission as a plenary power or

delegated to Division 2 under the appeal procedure es-

' tablished by Rule 200 of the Commission’s Rules of Prac-

tice (JS 12a); (3) the order of discontinuance was, issued

by the Board of Suspension after the rates were repub-

lished, not before.

US-ICC’s position in this respect highlights the. sub-_

stantial nature of. the second question presented by this

appeal—whether an order discontinuing the investigation

proceeding entered by an employee board of the Commis- —

sion can be deemed effective to vacate the Commission’s

order of suspension deferring the use of the rates,

US-ICC appear to recognize the difficulty of a position

that rests on nullification of an order of suspension under

circumstances when the rates under suspension were re-

published at.a time when the order of discontinuance was

not in existence. They speak of the status of the suspen-

sion order during that period as not “formally” vacated

. (pp. 5-6) as if it were ‘possible through some undisclosed

“informal” means to impart corporeal existence to some-

thing wholly invisible, : |

US-ICC plainly must overcome the dilemma posed by

absence of the order discontinuing investigation on the

date when the carriers republished the suspended rates.

To extricate their argument, US-ICC focus attention on

the effective date of the republishing schedules rather

than the date of their issuance, This expedient can scarcely

suffice. How could it be known on July 27th when the

carriers republished the rates that were under suspension

if or when an order of discontinuance would be issued by

' . the Commission? On that date the cancellation supple-

Sd hate eh Se

PTET RTT IE ETS

eee ee ee ~

‘

‘ment had not even become effective. The standing Spe-

cial Permission that authorized carriers to cancel a sus-

pended schedule contained the proviso that the permission

so conferred did not “waive or modify any outstanding

formal order of the Commission” (JS 15a-16a). On July

27th the carriers, by their act of republication, flew in the

face of an outstanding order of suspension that deferred

the use of the rate to February 14, 1968. The schedules as

presented were illegal. The Commission was called on by .

appellants’ petition to reject them. The Commission

passed the petition to its files without action. These in-

firmities were fatal to republication of the rate increases.

They were never cured and could never be cured by sub-

sequent issuance of the order of discontinuance. The

schedules, illegal when filed, could not be legitimatized by

subsequent entry of the order of discontinuance. That

date—August 16, 1967—failed to provide the time needed

for statutory compliance by schedules, marked to take ef-

fect August 29, 1967, with the mandate of 49 U.S.C. § 317

(ec) requiring 30 days’ notice of any changes in rates.

It is for these reasons that the ultimate argument

presented by US-ICC is not sustainable. They misappre-

hend the gravamen of ‘this complaint, viewing it as a bid’

for judicial review of the Commission’s refusal to -sus-

pend the republished rates. US-ICC would relegate ap-

pellants to exhaustion by means of a formal complaint.

Appellants have invoked the jurisdiction of ‘the district

court, not to review the Commission’s: refusal {fo suspend,

but to deal with its inaction in the face of violations of

the order that did suspend. The court was asked to im-

plement. §10(e) of the Administrative Procedure Act

which requires the reviewing court to compel agency action

9:

unlawfully withheld; to set aside agency action found’

arbitrary or not in accordance with law and without ob- -

servance of procedure required by law. The argument

of US-ICC supports the substantiality of the fifth ques-

tion presented by this appeal—may parties aggrieved by

Commission action obtain ‘mandatory injunctive relief -

based on enforcement of the terms of ‘an outstanding sus-

pension order or are they required to suffer rates effected

in contravention of the suspension order while exhausting

remedies under formal complaint procedure?

4. The motion of US-ICC includes argument that tends

to lend force to the essentiality of the interpretation ques-

tion that inheres in Section 316(e). They say (p. 6):..

“Furthermore, the suspension order, was.not directed

at the proposed new rates in the abstract, but rather

was entered upon thé record made in the original

proceeding. There is no sound reason why the dis-

cretion to suspend or not to suspend new schedules

must be automatically. pre-empted by a prior decision

on rates of the same level;” —

These alternative consequences are hinged to the meaning

that must be imparted to “suspend the operation of such

schedule and defer the use of such rate”. The argument

of Pagific Inland Bureau (pp. 3-4) serves to concretize the

problem of statutory interpretation presented by this ap-

peal, ie, does Section 316(e) speak to the schedules that

are suspended or the rates contained in the schedules?

Pacific Inland declares that it makes no difference that

the order of termination was issued by the Board of Sus-

pension rather than Commission when the Board has au-

thority to issue the order (p. 4). This asserts as a fact

something that is very much in issue in this ease. The

2 NEY SaPME EEN aH T LINING

POL PRET Te EAT

.

POY RAR OA IT OY ENT

ieee

10

Board was vested with authority to enter an order of dis-

continuance, not to vacate an order of Suspension.

The argument made at page 3 merits special comment, .

Pacific Inland says:

“The effect of the dismissal was to wipe the slate clean

and leave the carriers free to publish and file at any

time such new rates as they considered proper—

‘whether higher than, lower than, or the same as, the

rates cancelled.” nak

On August 7th when Pacific Inland did “publish and file”

new rates, the slate was not wiped clean, absent an order

discontinuing the investigation. That order was issued

August 16th and ‘served August 22nd. Responding to the

empirical view with which a tariff bysgau would be ex-

pected to be familiar, Pacific Inland (unlike US-ICC) cor-

rectly describes the significant acts of the carriers as the

publishing and filing of the new schedules. .

.9. Pacific Inland questions the viability of the suspen-

Sion order in the presence of an order discontinuing the

investigation proceeding, This point is dealt with at JS

9-10. It merits this additional comment. At page 4 Pacific

Inland argues that if no investigation is instituted, there

can .be no suspension, citing Wisconsin y. F.P.C., 373 U.S.

294, and Eastern Air Lines y. C.A.B., 294 F. 2d 235. The

cases are inapposite. Each involved determinations made

by the. respective regulatory agencies to discontinue in-

vestigation proceedings long after the making of. an evi-

dentiary record, Indeed, in Wisconsin the court refers

(p. 305) to that Commission’s determination of the Section

4(e) dockets as a decision on the merits, In Eastern the

‘court observed (p. 237) that the hearing was lengthy and

11

extensive. The challenge in the cited cases was to the

‘agencies’ authority to discontinue the proceeding without

arriving at a definitive conclusion with respect to the rates

under investigation. The cases that are pertinent to the

‘issues presented here are not Wisconsin or Eastern, but

those which hold that a Commission order which discon-

tinues the proceeding may leave in force a directive con-

tained in the same order or in another order which com-

mands the carrier to cease and desist from applying

certain rates, This Court has frequently reviewed de- ©

cisions and orders of the Interstate Commerce Commis-

sion and has been~asked to and has rendered justments

as to the lawfulness of orders which had been entered in

proceedings in which the same order or subsequent orders

_ Served by the Commission “discontinued the proceeding”.

‘Thus, American Commercial Lines, Inc. v. Louisville & -

N. R. Co., 392 U.S. 571, reviewed ‘an order of the Com-

_ mission in Ingot Molds, Pennsylvania to Steelton, Ky.,

326 I.C.C. 77, which ordered schedules cancelled and the —

_ proceeding discontinued. The same was true in I.C.C. v.

New York, N.H. €-H. R.R. Co., 372 U.S. 744. Here the

court reviewed an order of the Commission rendered in

Commodities—Pan-Atlantic Steamship Corp., 313 I.C.C.

23, which ordered rates cancelled and the proceeding dis:

continued. The continuing effectiveness of orders issued

by the Commission in those proceedings was-not “an-

nulled” by the issuance of an order stating that = —

‘ceedings had been discontinued. rf

PAS IOV ERR SECRET OMT

12

CONCLUSION

' Appellants suggest that the questions presented on this

appeal are substantial and merit plenary r review.

Respectfully submitted,

Joun F. DoneLan

JoHNn M. Cieary

Joun H. CaLpweELy |

914 Washington Building

Washington, D. C. 20005

- Attorneys for Appellant,

The National Industrial Traffic League

ARTHUR A. ARSHAM

233 Broadway

New York, New York 10007

Joun J. C. Marti

685 Third Avenue

New York, New York 10017

Attorneys for Appellants,

‘The National Small Shipments Traffic

Conference, Inc. and Drug & Toilet

Preparation Traffic Conference

February 19, 1969

3

‘

}

4

:

i

{

4

- °

enw ot

OTe ae ee Ree ee EE Ne eT ee eee Tarren e ny ee ey caus:

oJ

»