Opposition Brief — Interstate Commerce Commission v. Atlantic Coast Line R.

PY FILED

DEC 12 1%

JOHN F. DAVIS, CL

its, IN THE

a Supreme Court of the United States

OCTOBER TERM, 1964

wm 14

INTERSTATE COMMERCE COMMISSION,

Petitioner,

v.

ATLANTIC COAST LINE R. CO., ILLINOIS CENTRAL R.

CO., CHICAGO & EASTERN ILLINOIS R. CO., THE

BALTIMORE & OHIO R. CO., CHICAGO, BURLINGTON

& QUINCY R. CO., CHICAGO, MILWAUKEE, ST. PAUL

& PACIFIC R. CO., GULF, MOBILE & OHIO R. CO., THE

NEW YORK CENTRAL R. CO., WABASH RAILROAD

CO.,

Respondents.

On PETITION FOR A WRIT oF CERTIORARI TO THE UNITED STATES

Court oF APPEALS FOR THE FiFrTH CirRcuIT

BRIEF OF RESPONDENTS IN OPPOSITION

J. Epcar McDonaLp

466 Lexington Avenue

New York, N. Y. 10017

Attorney for Respondents

Of Counsel:

Puit C. BEVERLY

500 Water Street

Jacksonville, Fla., 32202

Urcuie B. EL.is

Broad Street Station

Richmond, Va., 23220

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> 249 Press of Fremont Payne, Inc., 80 Washington St., N. Y.—BOwling Green 9-8153

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INDEX

PAGE

Opinions Below ......cccccccccsccvcccsevssveccess 1

Question Presdited ......cccccescccccccvcvscccees 2

EE .o5cks cle ebk secede cerses seagvevs 2

RE OD CD a os oc bved oo cenee es edcins exes 2

APGUMENE cc cccsccccccsceccrccvescessesvosseons

I—The decision below is clearly correct ..........

A. The District Court had jurisdiction under

Section 17(9) of the Interstate Commerce

Act and Sections 1336 and 1398 of the Judi-

ciary and Judicial Procedure ............. 6

B. Section 16(2) is not a ‘‘review”’ provision. . 9

Il—Petitioner has advanced no valid reasons for

I NEE onc e.cVncwcdcveecdedtpecrtuees 12

A. Shippers are not deprived of procedural ad-

WON odie do Se eeencedccseevecedeeesess 12

B. The grounds allegedly relied upon do not

impair any congressional policy ........... 14

I1I—The memorandum of the United States ........ 17

IV—The amicus curiae brief of the National Indus-

ee SN ND ca cor wbeseceVosdad preoete 19

eee ices 40s ibe dueuesddkteebeweness 20

Or EL. cescsvenseeceseusereuverrrre 21

APPENDIX :

Relevant Portions of Statutes Involved ........ 1b

INDEX

Taste oF Cases CiTED

Baldwin v. Milling Co., 307 U. S. 478 ............ 10

Baltimore and Ohio R. Co., et al. v. United States,

et al., Civil Action No. 14897, v. $.D.C. D. Md. 13

Columbia Broadcasting System v. United States,

ee ee es A Ue cn Foe have vadonseus chs caece 20

Eldorado Oil Works v. United States, 328 U. S.

Se bugindn cheb bulls ske ened heueds chendesennns 8, 15, 20

Cnedeev onacesende suaRieeteound bbeuSesS 20

eunas Allison & Co. v. Interstate Commerce Com’n,

i ok & © Se rR Ree see re 9

Lehigh Valley R. Co. v. Clark, 207 Fed. 717 ........ 10

Lewis, Ete., Co. v. Southern Pac. Co., 283 U. S. 654 ..10,11

Mitchell Coal Co. v. Penna. R. R. Co., 230 U. 8. 247 .. 5,11

National Van Lines, Inc. v. United States, 326 F.

SE cau cutee 0bccudcddesnabudaueeeres eye’ 8,9

Pennsylvania R. Co. v. United States, 363 U. S.

NS Fis ct BeWe Re CC ADRS eb Se dese UE SASS THEOT Ose 7, 9, 15

Phillips v. Grand Trunk Ry., 236 U. S. 662 ........ 5

Pittsburgh & W. Va. Ry. Co. v. U. S.,6 F. 24 646.... 14

Porter Co. v. Central Vermont R. Co., 366 U.S. 272.. 17

Rochester Tel. Corp. v. U. S., 307 U.S. 125 .......... 15, 20

Seaboard Air Line R. Co. v. Daniel, 333 U. S. 118 8

St. L. & S. F. R. R. v. Spiller, 275 U. S. 156 ...... 10

Thomson Phosphate Co. v. Atlantic Coast Line R. Co.,

De EE ob dntdekdectensencccctscéveddnersd

United States v. I.C.C., 337 U.S. 426 ........ 7, 9, 15, 17, 18

United States v. Storer Broadcasting Co., 1956, 351

ME; MAE hbaecddudescs be bewaiancddedesenesns.

Washington Terminal Co. v. Boswell, 319 U.S. 732... 17

In THE

Supreme Court of the United States

Octoser Term, 1964

7%

=

INTERSTATE CoMMERCE CoMMISSION,

Petitioner,

Vv.

Amantic Coast Line R. Co., Intinors Centrat R. Co.,

Cuicaco & Eastern Ixurnots R. Co., Tae Battimore &

Onto R. Co., Cutcaco, Burtineton & Quincy R. Co.,

Cutcaco, Minwavuxer, St. Paut & Pactric R. Co., Gurr,

Mosite & Onto R. Co., Toe New York Centra R.,Co.,

WasasH Rartroap Co.,

Respondents.

On Petition ror A Writ or CERTIORARI TO THE

Untrep States Court or APPEALS

FOR THE Firtrx Circuit

y%

7

BRIEF OF RESPONDENTS IN OPPOSITION

Opinions Below

The opinion of the United States District Court for the

Middle District of Florida is reported at 213 F. Supp. 199,

and is reproduced in the printed record (R. 28-37).

The opinion of the United States Court of Appeals for

the Fifth Cireuit is reported at 334 F. 2d 46, and is repro-

duced in the petition (Appendix 1a-13a).

0

2

Question Presented

Do district courts have jurisdiction under Section 17(9)

of the Interstate Commerce Act, 49 U.S.C. $17(9), and

Sections 1336 and 1398 of the Judiciary and Judicial Pro.

cedure, 28 U.S.C. §§ 1336 and 1398, of suits by railroads

to set aside the administrative and quasi-judicial findings

of the Interstate Commerce Commission and reparation

award-orders based thereon? Or must such suits be dis.

missed on the ground that the findings and orders must be

challenged as a defense in shippers’ suits under Section

16(2) of the Interstate Commerce Act, 49 U.S.C. § 16(2)

if, as, when, and where brought?

Statutes Involved

The provisions of the statutes pertinent to this proceed.

ing are Sections 16(2) and 17(9) of the Interstate Com.

merce Act 49, U.S.C. 4 16(2) and § 17(9) ; Sections 1336 and

1398 of Judiciary and Judicial Procedure, 28 U.S.C. § 1336

and § 1398, and Sections 1001 (d), (f), and (g), and

1009(a) of the Administrative Procedure Act 5 U.S.C.

§ 1001(d), (f), and (g), and § 1009(a).

The first four of these provisions are printed in the peti-

tion (15a-16a). The provisions of the Administrative Pro-

cedure Act referred to are set forth in the appendix hereof

(1b).

Statement of the Case

In Thomson Phosphate Co. v. Atlantic Coast Line R. Co.,

303 L.C.C. 25, and 311 1.C.C. 315 (R. 6-19), the Interstate

Commerce Commission found the rates assessed on more

than 600 carload shipments of phosphate rock from Prairie,

Fla., to destinations in Illinois during the period from

April 10, 1945, to December 31, 1950, unjust and unreason-

3

able, and awarded reparation aggregating $8,889.76, with

interest. By orders of the Commission the railroads were

“authorized and directed’’ to pay the reparation on or

before August 28, 1961.

By complaint filed September 6, 1961 (R. 20-25) the

respondents brought suit against the United States of

America and the Interstate Commerce Commission in the

United States District Court for the Middle District of

Florida under the provisions of Section 17(9) of the Inter-

state Commerce Act, 49 U.S.C. $17(9) and Sections 1336

and 1398 of Judiciary and Judicial Procedure, 28 U.S.C.

§§ 1336 anu 1398, to enjoin, set aside and annul the

administrative and quasi-judicial findings of the Commis-

sion in the aforesaid proceedings, as well as the award-

order based thereon. Among other things, the complaint

alleged that the Commission erred in failing to find the

proceeding before it barred by the statute of limitations of

the Interstate Commerce Act, 49 U.S.C. § 16(3), in failing

to observe and properly apply its own rules of practice, and

in allowing prosecution of a complaint seeking damages

by a corporation which had been dissolved five years

previously.

By answer filed on January 5, 1962, the petitioner ad-

mitted, without qualification, all of the jurisdictional alle-

gations of the complaint. However, on April 20, 1962, the

petitioner moved the court to dismiss the complaint ‘‘for

lack of jurisdiction of the subject matter, or in the exer-

tise of its equity discretion’’.

By answer made on or about January 12, 1962, the

United States of America neither defended nor opposed

the Commission orders, pointing out that ‘‘the Interstate

Commerce Commission and the shipper have adequate

statutory authority to defend the Commission’s orders”’,

that the Commission ‘‘will avail itself of the statutory au-

thorization to interpose all defenses to the plaintiffs’

charges possible of being interposed’’, and that ‘‘the

ae

4

shipper, if it so elects, may present its position through

its own counsel’’.

The District Court denied the petitioner’s motion to

dismiss on May 15, 1962 (R. 26).

On August 22, 1962, a suit was filed on behalf of the

Thomson Phosphate Company in the United States Dis.

trict Court for the Southern District of New York, seeking

damages based on the orders of the Commission heretofore

referred to. By stipulation of the parties, that complaint

is being held in abeyance pending final disposition of the

instant proceeding.

On January 9, 1963, the Florida District Court found

the reports and orders of the Commission unlawful and

set them aside (R. 27-37).

The petitioner appealed from the judgment of the Dis.

trict Court. It did not appeal the findings of the District

Court on the merits, but only the question of the court’s

jurisdiction (R. 4).

On July 8, 1964, the United States Court of Appeals for

the Fifth Circuit affirmed the decision and judgment of the

District Court, holding that the District Court was correct

in overruling the motion to dismiss, in sustaining the right

of judicial review in that court under §§ 1336 and 1398,

and in rejecting the contention that review had to be in the

pending New York action. The Court of Appeals also

concluded that the contention that the trial Court having

jurisdiction should nevertheless have declined to exercise

it for equitable considerations was without merit.

Argument

As the Court of Appeals quite properly indicated (7a),

this case is important because of the necessity to determine

‘‘the statutory mechanism for review in reparation award

order cases generally, not merely the machinery which

5

would satisfy this particular case’’. It is essential, there-

fore, that the nature and effect of administrative findings

and reparation award orders based thereon be clearly

defined.

In Mitchell Coal Co. v. Penna. R. R. Co., 230 U. 8. 247,

one of the leading cases on the primary jurisdiction of the

Commission, this Court made it abundantly clear that there

are two separate and distinct aspects to a reparation

award. The first is the finding that the assailed rates and

charges are unlawful in violation of the Interstate Com-

merce Act, and the second is the finding as to the fact and

the amount of damage. The Court characterized (p. 258)

the first as an administrative finding, and the second as

a quasi-judicial finding. The Court said that in a suit

by a shipper for damages under § 16(2) the administra-

tive finding of unlawfulness is ‘‘conclusive’’, that the

quasi-judicial finding of the fact and amount of damage

is only prima facie correct, and that only as to the latter

finding does the carrier have ‘‘its day in court and the

right to a judicial hearing’’. In short, the Mitchell Coal

case holds that the carrier may not have a judicial hearing

under §16(2) on the administrative finding of unlawful-

ness, that finding being conclusive and binding upon car-

riers, unless and until it is set aside by the Commission

itself, or by a court of competent jurisdiction.

Moreover, as the Court said in that case, award orders

‘can be given general and uniform operation since all ship-

pers who have been or may be affected by the rate can

take advantage of the ruling and avail themselves of the

reparation order’’. Thus, under Section 9 of the Inter-

state Commerce Aci, 49 U.S.C. $9, so long as an adminis-

trative finding of unlawfulness is outstanding and not

enjoined, suspendecd| or set aside, every other shipper

similarly situated is entitled by appropriate proceedings

before the Commission or the courts to obtain the benefit

of that general finding and order. Phillips v. Grand Trunk

Ry., 236 U. S. 662.

6

The Court of Appeals recognized the significance of the

dual nature of award orders and the settled law with re.

spect to the general effect of such award orders (8a),

The decision below is clearly correct.

The jurisdiction of the District Court was the only

issue raised on appeal. Prior decisions by this Court make

it clear that the decision below was correct.

A. The District Court had jurisdiction under Section

17(9) of the Interstate Commerce Act and Sections

1336 and 1398 of the Judiciary and Judicial Pro

cedure.

Section 17(9) of the Interstate Commerce Act, 49 U.S.C.

§ 17(9)),* provides that when a petition for reconsideration

of a decision, order, or requirement of the Commission

shall have been made and denied or otherwise disposed

of, a suit to 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 the provisions of

law applicable to such suits, but not otherwise. There is

nothing in the language of that section which excludes

from its provisions orders of the kind here assailed. On

the contrary, the language of that section specifically

authorizes the filing of suits to enjoin, suspend, or set

aside any decision, order, or requirement of the Com-

mission.

Section 1336 of Judiciary and Judicial Procedure, 23

U.S.C. § 1336,* expressly gives the district courts juris-

diction of such actions, and § 1398 thereof* expressly fixes

the venue of such actions as the judicial district wherein

* Sometimes hereinafter referred to simply as § 17(9), § 1336

and § 1398 or §§ 17(9), 1336 and 1398.

ORR cr a ne

7

is the residence or principal office of any of the parties

bringing such action.

This Court has already decided that findings and orders

relating to money damages are reviewable by a one-judge

district court in a suit brought under the provisions of

§§17(9), 1836 and 1398. United States v. I.C.C., 337 U. S.

426; Pennsylvania R. Co. v. United States, 363 U. S. 202.

In Umted States v. I.C.C., supra, the United States as a

shipper brought an action to set aside a Commission denial

of reparation and an order dismissing the complaint. This

Court held that the legal consequences of the order there

assailed fell ‘‘squarely within the type made subject to

judicial review by § 41(28)’’,* that a Commission order

dismissing a shipper’s claim for damages is an ‘‘order”’

subject to challenge under § 1336, and that judicial review

of such an order does not require a three-judge court.

In the dissenting opinion of Mr. Justice Frankfurter in

that case, an attempt was made to read into the language

of Section 17(9) by implication the words ‘‘provided the

decision, order, or requirement is not one for money dam-

ages”. That construction of the provisions of Section

17(9) was rejected by the majority of the Court, and it

was completely abandoned in Pennsylvania R. Co. v.

United States, supra.

In Pennsylvania R. Co. v. United States, supra, the

plaintiff railroad brought an action against the United

States of America and the Interstate Commerce Commis-

sion under the provisions of §§17(9), 1336 and 1398 to

enjoin, set aside and annul a Commission finding that

certain rates were unreasonable and a Commission order

denying reconsideration thereof. The Commission deter-

mination was made in a proceeding after referral of the

question to it by the Court of Claims. In a unanimous deci-

* Now 28 U.S.C. § 1336.

F

sion this Court characterized that case as one involvi

‘‘the power of District Courts to review Interstate Com.

merce Commission orders determining the reasonableness

of rates’’, pointed out (p. 205) that it had previously held

that judicial review is equally available whether a Commis.

sion order relates to past or future rates, or whether its

proceeding follows referral by a court or originates with

the Commission, citing Eldorado Oil Works v. United

States, 328 U. 8. 12, and concluded that the plaintiff rai).

road was entitled to have the Commission order judicially

reviewed and that jurisdiction to review such an order jg

vested exclusively in the district courts, citing 28 U.S.C.

§ 1336, and 49 U.S.C. $17(9). The court also cited Sea-

board Air Line R. Co. v. Daniel, 333 U. S. 118, 122, in

which it stated that ‘‘federal district courts have exclusive

jurisdiction of suits to enjoin, set aside, annul, or suspend

an order of the Commission’’, and also that ‘‘in such suits

the United States is an indispensible party’’. The Court

also held that the order was properly reviewable by a

one-judge rather than a three-judge district court because

it was essentially one ‘‘for the payment of money”? within

the terms of 28 U.S.C. 2321 and 2325, which exempt such

orders from the three-judge court procedure of 28 U.S.C.

2224, citing United States v. 1:C.C., supra.

National Van Lines, Inc. v. United States, 326 F. 2d 362

(C. A. 7, 1964), is a decision in substantial accord with the

decision of the Court of Appeals in the instant case. That

action was brought under Sections 17(9), 1336 and 1398,

among others, and sought to set aside administrative find-

ings of the Commission and a declaratory order based

thereon. The Court sustained the carrier’s right to main-

tain the action. Although that case involved a question

substantially similar to that involved here, neither the

Commission nor the United States sought review of that

decision by this court.

8

In summary, the findings and orders assailed in the in-

stant case are substantially the same as those which were

a

—

9

involved in United States v. I.C.C., supra, Pennsylvania R.

Co. v. United States, supra, and National Van Lines, Inc.

vy. United States, supra. Those cases make it clear that

such administrative findings and orders relating to the pay-

ment of money are reviewable by the district courts under

Section 17(9) and Section 1336.

B. Section 16(2) is not a “review” provision.

Section 16(2) of the Interstate Commerce Act, 49 U.S.C.

§16(2), is not ‘‘the exclusive method for judicial review of

an order of the Commission which awards reparations’’.

It is not a ‘‘review’’ section at all, nor by its language

does it purport to be.

Section 16(1) of the Interstate Commerce Act provides

that if, after hearing on a complaint, the Commission

should determine that any party complainant is entitled to

an award of damages for a violation of the act, ‘‘the Com-

mission shall make an order directing the carrier to pay to

the complainant the sum to which he is entitled on or before

aday named.’’ That paragraph makes it a mandatory duty

of the Commission to issue such an order. George Allison

é Co. v. Interstate Commerce Com’n, 107 F. 2d 180.

Section 16(2) provides that if a carrier does not comply

with such an order, the complainant, or any person for

whose benefit the order was made, may file a complaint in a

United States District Court or in any State court of gen-

eral jurisdiction, having jurisdiction of the parties, setting

forth briefly the causes for which he claims damages and

the order of the Commission. The section further provides

that on the trial of such a suit, the findings and order of

the Commission shall be prima facie evidence of the facts

therein stated.

A suit brought under the provisions of that section is not

one for the ‘‘enforcement and review’’ of the Commission

order. It is ‘‘a plenary suit for damages actually incurred

by the plaintiff, by reason of violation of the Act by the

he.

10

defendant as conclusively found by the Commission’,

Lehigh Valley R. Co. v. Clark, 207 Fed. 717, 724. This

Court has also held that an action under $16(2) is not

one to enforce a reparation order; it is an action for dam.

ages. Lewis, Etc., Co. v. Southern Pac. Co., 283 U. 8. 654,

661.

Section 16(2) is and was clearly intended to be a special

procedure which authorizes a complainant before the Com.

mission to initiate a suit to recover damages ‘‘if a carrier

does not comply with an order for the payment of money

within the time limit in such order’’. The purpose of Con.

gress was ‘‘to discourage harassing resistance by a car-

rier to a reparation order’’. St. L. & 9. F. R.R. v. Spiller,

275 U. S. 156, 159.

In Baldwin v. Milling Co., 307 U. S. 478, this Court stated

(p. 482), that ‘‘the Act unmistakably evidences purpose

directly to prevent interposition of pleas lacking merit ani

so coercively to bring about prompt payment of the Com.

mission’s awards’’, citing St. L. é S. F. R.R. v. Spiller,

supra. It further stated (p. 483) that ‘‘Sections 16(1) and

16(2) indicate legislative purpose to penalize failure of car-

riers, having no defense, to pay damages in accordance

with the terms of the commission’s findings and reparation

orders’’.*

As a suit for damages rather than a suit to enforce a

reparation order it falls within the prohibition of §17(9)

which states that ‘‘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 Com-

mission, but not otherwise’’.*

In other words, the jurisdiction embodied in $ 1336 may

not be availed of by a district court in a suit instituted

* Italics added.

11

under § 16(2) because such a suit is not one ‘‘to enforce,

enjoin, suspend, or set aside orders of the Commission’’.

Thus, §17(9) by its own terms provides for the ‘‘exclu-

sive method for judicial review of an order of the Com-

mission which awards reparation’’.

Section 17(9) was not enacted until 1940 [54 Stat. 916],

almost thirty years after the decision of this Court in

Mitchell Coal Co. v. Penna. R. R. Co., 230 U. 8. 247. If, as

this Court there said, the administrative findings are con-

dusive in a $16(2) suit, it must follow that district courts

are without jurisdiction to review such findings and set

them aside. Thus, almost thirty years prior to the enact-

ment of §17(9) this Court held, at least inferentially, that

§16(2) is not a review section, but, consistent with Lewis,

Etc., Co. v. Southern Pac. Co., supra, is simply a section

mder which an action for damages may be maintained.

Section 16(2) does not give a district court jurisdiction

to enjoin or set aside an administrative finding of unjust-

ness and unreasonableness. Neither does it provide any

procedure by which the Commission and the United States

may be brought in as necessary parties. In fact, Congress

has expressly withheld authority from the Commission to

join as a party plaintiff in suits involving orders for the

payment of money. 49 U.S.C. §16(12). Moreover, with-

out the power in a court of law to enjoin, suspend, or set

aside administrative findings of the Commission it cannot

be said that review, as that term is used in the Interstate

Commerce Act, the Administrative Procedure Act, and the

Judicial Code, is available to a party. Those statutes ex-

pressly include that element of review; Section 16(2) does

not, because by its very language it is not a review section.

The uniformity, which is the principal aim of the Inter-

state Commerce Act and which is discussed in the Mitchell

and Phillips cases, and many other cases of this Court,

cannot be accomplished or assured unless the reviewing

court also has jurisdiction to enjoin and set aside the

12

administrative findings which are available to all shippers

who have shipped under the condemned rates. Without

such jurisdiction a district court can only dismiss the

complaint if the administrative findings are held to be in.

valid or enter judgment if they are upheld. Neither the

Commission nor any other district court would be bound

by any judgment entered by a district court.

Moreover, the problems created by the contention that

§16(2) is a review section are compounded by the facet

that the section also authorizes suits to be brought in state

courts. That automatically raises serious questions of the

dualism of the federal-state system, questions which re.

quire no discussion in this brief.

In any event, even if it be conceded, arguendo, that a car-

rier is entitled to limited ‘‘review’’ in a $16(2) suit, the

fact still remains, as the lower court pointed out (p. 9a) that

‘even 100% success in the $16(2) suit leaves the carrier

faced with unsatisfactory law for all to use, and unsatis-

factory fact findings for all shippers to use’’.

II

Petitioner has advanced no valid reasons for grant-

ing a writ.

A. Shippers are not deprived of procedural advantages.

The principal argument of the petitioner is that the

decision of the lower court will deprive shippers of pro-

cedural’ advantages given to them by the provisions of

§16(2). That contention is wholly without substance.

Only if the findings and order of the Commission are

valid does a shipper have a valid cause of action for dam-

ages under $16(2) and a right to the procedural ad-

vantages given thereby. If the District Court upholds

the Commission’s findings and order in a §17(9) suit by

a carrier, the shipper is not denied his right to maintain

an action under §16(2) nor deprived of any of its pro-

—

13

cedural advantages. On the other hand, if the reviewing

court holds the Commission findings and order invalid and

sets them aside, it automatically means that the shipper

did not have a valid cause of action under § 16(2) to begin

with and, therefore, was neither entitled to nor deprived

of any procedural advantage. Moreover, as the decision

of the lower court makes clear, under appropriate circum-

stances a shipper may obtain the benefit of all or part of

those statutory advantages by intervening in the §17(9)

suit. That is exactly what a number of successful shippers

have done in Baltimore and Ohio R. Co., et al. v.

United States, et al., Civil Action No. 14897, U.S.D.C. D.

Md., one of the suits referred to by the petitioner (p. 6).

As the United States stated in its answer to the instant

complaint, ‘‘the shipper, if it so elects, may present its

position through its own counsel’’. As the court below

pointed out (12a-13a), a decree sustaining the basic validity

of the findings and order of the Commission would leave

interested shippers in an even more advantageous posi-

tion, since the only remaining issue in a § 16(2) suit would

be the limited issue of money damages, an issue which the

railroads then would hardly be in a position to challenge.

If the findings and order of the Commission fail to pass

muster and are, therefore, ‘‘not in accordance with law”’,

they may be set aside, and, as the lower court said (11a),

“no one, whether Carrier or Shipper, will thereafter be

subjected to the expense of useless litigation in numerous

courts where separate §16(2) shipper suits have been

filed’’.

The petitioner deplores (p. 7) ‘‘the shipper’s loss of his

choice of venue’’. In doing so the petitioner overlooks the

simple fact that if a shipper has a valid cause of action for

damages under § 16(2) he is at liberty to file his suit and

avail himself of all of the procedural advantages provided

for in that section, including ‘‘his choice of venue’’. The

petitioner also overlooks the fact that the venue provisions

of § 1398 are much narrower than those of § 16(2), and are

the identical venue provisions available to a shipper seek-

14

ing judicial review of a Commission order denying an

award of reparation. However, the important and un-

deniable fact of the matter is that it is extremely unusual

for railroads to challenge findings and orders in repara-

tion proceedings, small or large. In the comparatively rare

instances in which they do challenge them they do so be-

cause of the principle involved, not the reparation involved

in a particular proceeding. Undoubtedly none of the 22

reparation orders referred to by the petitioner (pp. 7-8)

was contested, but was paid promptly and without ques-

tion.

B. The grounds allegedly relied upon do not impair any

congressional policy.

The petitioner refers to the 1948 codification of Title 28,

U.S.C. Sections 1336 and 1398, and particularly to the

‘‘except’’ clauses of those sections, and to the fact that

those exceptions were identified in the ‘‘Revisor’s Notes to

Section 1398’’ with Section 16 of the Interstate Commerce

Act, 49 U.S.C. 16. But just because the venue provisions

of § 1398 do not apply to $16(2) suits, it does not follow

that the district courts were deprived of jurisdiction to

review a reparation order under the provisions of § 1336.

All that Congress did by the ‘‘except’’ clauses referred to

was to exempt from the restricted venue provisions of

§ 1398 suits for damages brought pursuant to the provi-

sions of § 16(2).

The petitioner assumes (p. 9) that the court below be-

lieved that a §17(9) suit would avoid multiple suits by

shippers relying upon Commission findings and orders in

reparation cases, and argues that for forty years it has

been the settled law that the possibility of ‘‘ multiplicity of

suits’? does not warrant depriving shippers ‘‘of advan-

tages conferred by Congress”’, citing Pittsburgh & W. Va.

Ry. Co. v. U. S., 6 F. 2d 646. The petitioner overlooks the

fact that the action there involved was before a three-judge

court, which clearly did not have jurisdiction of an action

—

15

to enjoin, set aside, and annul a reparation order. It also

overlooks, the fact that the plaintiff in that case relied

solely upon the equity jurisdiction of the court, as distin-

guished from its statutory jurisdiction with respect to

matters arising before the Interstate Commerce Commis-

sion, as well as on the sole ground that the order there

assailed, unless enjoined, set aside, and annulled, would

result in a multiplicity of suits. Equally important is the

fact that the case was decided more than sixteen years

prior to the enactment of §17(9) in 1940, and long before

the decisions of this Court in Rochester Tel. Corp. v. U. S.,

307 U. S. 125; El Dorado Oil Works v. United States, 328

U.S. 12; United States v. I.C.C., supra; and Pennsylvania

R. Co. v. United States, supra. Moreover, the lower court

was much more concerned with ensuring uniform treatment

of all shippers similarly situated than it was with the

multiplicity of suits aspects.

The petitioner assails (p. 10) the lower court conclusions

that ‘‘symmetry also suggests a congressional purpose to

allow review of an award-order granting reparations under

§17(9)’’. The petitioner either chooses to disregard or

fails to understand the symmetry which the lower court

obviously had in mind. The symmetry which the court had

in mind had to do with the substantive right to the remedy

available under §$17(9) and 1336 to a shipper denied

reparation by the Commission in a proceeding before it, or

to the losing party, whether a shipper or a railroad, in a

referral action. All that the lower court did was to point

out that a Commission denial of reparation is reviewable

under $§17(9), 1336, and 1398, as is an administrative

determination of primary jurisdiction elements of a re-

ferral to the Commission by a court, and to conclude that

symmetry or consistency ‘‘suggests a congressional pur-

pose to allow review of an order awarding reparation as

well’’, That symmetry does not fail because a shipper seek-

ing review of an order denying reparation must bring suit

in the district in which he resides. That is the same venue

16

provision which governs the review of a referral proceed-

ing. It is not ‘‘essentially the same venue advantage

which §16(2) of the Interstate Commerce Act”’’ gives a

shipper in a suit for damages. The venue provisions ap-

plicable to § 17(9) suits are far more restricted than those

of § 16(2). The resort to a venue argument simply reflects

an attempt on the part of the petitioner to avoid the sound

and logical observation of the lower court.

Furthermore, the principal, if not the only, effect of Pub-

lic Law No. 88-513, 78 Stat. 695, referred to by the peti-

tioner (p. 11) is to allow the initial court in referral cases,

usually the United States Court of Claims, to retain juris-

diction for the purpose of reviewing findings and orders of

the Commission.

_ The petitioner next assails (p. 12) the decision of the

court below because one result ‘‘will be to permit the

transfer of the burden of defending Commission orders

awarding reparations from the shipper to the Commis-

sion’s legal staff’’. The indignation of the Commission

at the thought of having to defend its award orders is

surprising, to say the least. Who, if not the Commission,

should be required to defend its administrative findings

and orders, and who is in as good a position or as well

qualified to do so? As the lower court points out (1la-

12a) in a suit by a shipper under § 16(2) ‘‘the sole spokes-

man in behalf of the ICC’s order is the private party

seeking partisan relief’’, whereas in a suit brought under

the provisions of $§17(9), 1336, and 1398, the United

States and the Commission are made defendants ‘‘directly

and immediately responsible for * * * the advocative

assertion of contentions deemed essential in the public

interest’’.

Finally, the petitioner argues that the decision below

conflicts with prior holdings or statements by this Court

that a shipper’s suit under $ 16(2) ‘‘is the exclusive route

by which the Congress has authorized the courts to deter-

17

mine the validity of a Commission order awarding repara-

tions’’. In support of that contention the petitioner cites

United States v. I.C.C., supra, and Porter Co. v. Central

Vermont R. Co., 366 U. S. 272. In neither of those deci-

sions did this Court make any such holding or statement.

And contrary to the contentions of the petitioner (p. 13),

Washington Terminal Co. v. Boswell, 319 U.S. 732, did not

involve provisions of the Railway Labor Act ‘‘which are

closely analogous to Section 16(2)’’. As the lower court

said (10a), ‘‘the resemblance is superficial’’. Under the

provisions of the Railway Labor Act, 45 U.S.C.A. §§ 151,

153 First [p], the District Courts are empowered to make

such order and enter such judgment, by writ of manda-

mus or otherwise, as may be appropriate to enforce or set

aside the order of the adjustment board. No similar

sweeping authority is contained or implied in the provi-

sions of §16(2). Moreover, the procedure created by the

Railway Labor Act is not subject to the provisions of the

Administrative Procedure Act, 5 U.S.C.A. §§ 1001, et seq.

As the lower court pointed out (10a), that is not the case

here.

Ill

The memorandum of the United States.

Despite the fact that in its answer the United States

of America neither defended nor opposed the Commission

orders because ‘‘the Interstate Commerce Commission and

the shipper have adequate statutory authority to defend

the Commission orders’’, it now supports the Coimission

petition for the reason that ‘‘it would be a statutory

defendant in any action instituted by a carrier to set aside

a reparations order of the Commission’’. Yet it expresses

xo intention to participate actively in the defense of any

such action in the future, and there is nothing in its memo-

randum which suggests or implies that its answer and

position in such cases in the future would not be substan-

tially the same as its answer and position in this case.

a

18

The United States argues that the decision below may

seriously impair the ability of some shippers to recover

reparations awarded them by the Commission, but it makes

no attempt to show how or why that might reasonably

be expected. There is no basis in the decision of the

lower court for the conclusion that ‘‘shippers will almost

invariably be denied the benefits available to them under

Section 16(2)’’. If a shipper has a valid cause of action

for damages under § 16(2), a review action under § 17(9)

will not in any way affect his right to maintain that cause

of action under §16(2), or deprive him of any of the

benefits available to him under that section. Despite the

obvious advantage of having the Commission assume the

burden of defending its own findings and orders, shippers

who are not content to rely upon the Commission for the

protection of their interests in a §17(9) suit by a railroad

may intervene in such a suit if they so elect and present

their position through their own counsel. If the findings

and order of the Commission are upheld in such a suit,

the interested shipper would then be in an even more

advantageous position in a $16(2) suit.

The contention of the United States that there is serious

doubt whether the decision of the court below is consistent

with the congressional policy reflected in § 16(2) was like-

wise advanced by the petitioner and has already been

answered. It should be noted, however, that the United

States as a shipper plaintiff sought review of a denial

of reparation by the Commission in United States v. I.C.C.,

supra. In that case the United States successfully took the

position that §§ 17(9) and 1336 permit review of orders

involving the payment of money. It seems very signifi-

cant that the United States makes no attempt to reconcile

the position it took in that case and the diametrically

opposite position it takes here.

PE EES REE DELS EERIE IEEE LIEGE EE

19

IV

The amicus curiae brief of the National Jndustrial

Traffic League.

The League contends (pp. 2-3) that the practical effect

of the decision below will be to enable ‘‘obdurate and

litigious railroads’? to deny shippers, and particularly

small shippers, ‘‘any effective remedy for reparations for

the exaction of unlawful freight rates and charges’’. That

contention is completely preposterous on its face. Unless

and until an ‘‘obdurate and litigious’’ railroad succeeds in

having an award order enjoined, annulled or set aside

under the provisions of $§ 17(9), 1336 and 1398, a shipper

would be left with his statutory right to file a 4 16/2) suit

for damages. If the award order is set aside in a § 17(9)

suit because it is ‘‘not in accordance with law’’, it follows

that no shipper was deprived of any right or remedy.

There is, therefore, no substance to the contention of the

League that the practical effect of the decision below is to

render § 16(2) in large part a nullity.

Much of the League’s argument is in substance a repeti-

tion of the argument of the petitioner that the decision of

the court below deprives shippers of ‘‘ procedural benefits’’

accorded them by Congress, an argument which has already

been answered.

The League’s reference to ‘‘a small shipper’’ would seem

to disclose a wilful lack of knowledge on its part of the

facts in this case. In this intance there was no ‘‘small

shipper in New York’’, and the ‘‘shipper’s’’ § 16(2) suit

brought in New York almost a year after the institution of

the respondents’ suit under $17(9) was allegedly filed on

behalf of an Illinois corporation, dissolved more than five

years previously, whose office and principal place of busi-

ness had been in Chicago, Ill. The extent of the effort of

that shipper ‘‘to avail itself of its remedy under Section

16(2) has thus far come to naught’’ because by stipulation

its complaint is being held in abeyance pending the final

20

disposition of the instant proceeding. The shipper has not

been deprived of its right under § 16(2), nor of the ‘‘ad-

vantages’’ there provided for. The decision of the lower

court makes it clear that because of the invalidity of the

award order the interested shipper never had a valid cause

of action under §16(2) to begin with, and that any suit

brought under that section should properly come to naught.

The League, ‘as amicus curiae, raises an issue which the

petitioner has not. It contends that a reparation order is

not final and, therefore, is not reviewable. There is no sub-

stance whatever to that contention. As the lower court

stated (6a), a reparation order ‘‘has all the characteristics

of finality so far regarded as essential to court review

under statutes comparable to those here involved”’, citing

Rochester Tel. Corp. v. United States, supra; Columbia

Broadcasting System v. United States, 316 U. S. 407;

Frozen Food Express v. United States, 351 U. 8. 40; United

States v. Storer Broadcasting Co., 351 U.S. 192; El Dorado

Oil Works v. United States, swpra.

CONCLUSION

For the reasons hereinbefore given, the respondents

submit that the petition should be denied.

Respectfully submitted,

J. Encar McDonatp,

466 Lexington Avenue,

New York, N. Y. 10017,

Attorney for Respondents.

Of Counsel:

Puit C. BEvERLY,

500 Water Street,

Jacksonville, Fla. 32202.

Urcuis B. Exits,

Broad Street Station,

Richmond, Va. 23220.

21

Certificate of Service.

I, J. Edgar McDonald, attorney of record for the re-

spondents in this proceeding, and a member of the Bar of

the Supreme Court of the United States, hereby certify

that I have served copies of the foregoing brief on the sev-

eral parties to this action, as follows:

1. On the petitioner, the Interstate Commerce Commis-

sion, by mailing copies in duly addressed envelopes with

first class postage prepaid, to its attorneys of record, Rob-

ert W. Ginnane, General Counsel, and Leonard S. Good-

man, Assistant General Counsel, Interstate Commerce

Commission, Washington 25, D. C.

2. On the United States of America, by mailing copies

in duly addressed envelopes with first class postage pre-

paid, to its attorney of record, Archibald Cox, Solicitor

General, Department of Justice, Washington, D. C., 20530.

3. On The National Industrial Traffic League, by mail-

ing copies in duly addressed envelopes to its attorneys of

record, John F. Donelan and John M. Cleary, 700 Brawner

Building, 888 17th Street, N.W., Washington, D. C., 20006.

This 11th day of December, 1964.

J. Encar McDonatp,

466 Lexington Avenue,

New York 17, N. Y.

APPENDIX

Relevant Portions of Statutes Involved

5 U.S.C.A. § 1001(d), (f), and (g):

‘‘(d) ‘Order’ means the whole or any part of the

final disposition (whether affirmative, negative, injunc-

tive, or declaratory in form) of any agency in any mat-

ter other than rule making but including licensing.

‘Adjudication’ means agency process for the formula-

tion of an order.”’

**(f) ‘Sanction’ includes the whole or part of any

agency (1) prohibition, requirement, limitation, or

other condition affecting the freedom of any person;

(2) withholding of relief; (3) imposition of any form

of penalty or fine; (4) destructi.n, taking, seizure, or

withholding of property; (5) assessment of dam-

ages, reimbursement, restitution, compensation, costs,

charges, or fees; (6) requirement, revocation, or sus-

pension of a license; or (7) taking of other compulsory

or restrictive action. ‘Relief’ includes the whole or

part of any agency (1) grant of money, assistance,

liccnse, authority, exemption, exception, privilege, or

remedy; (2) recognition of any claim, right, immunity,

privilege, exemption, or exception; or (3) taking of

any other action upon the application or petition of,

and beneficial to, any person.”’

**(g) ‘Agency proceeding’ means any agency proc-

ess as defined in subsections (c), (d), and (e) of this

section. ‘Agency action’ includes the whole or part of

every agency rule, order, license, sanction, relief, or

the equivalent or denial thereof, or failure to act.’’

5 U.S.C.A. § 1009:

‘*Except so far as (1) statutes preclude judicial re-

view or (2) agency action is by law committed to

agency discretion.”’

‘*(a) Any person suffering legal wrong because of

any agency action, or adversely affected or aggrieved

by such action within the meaning of any relevant

statute, shall be entitled to judicial review thereof.’’

1b