Ashland Coal & Ice Co. v. United States (61 F. Supp. 708, 1945)

DOBIE, Circuit Judge.

This is a suit, under 28 U.S.C.A. §§ 41 (28) 43-47a, to set aside that part of the order of the Interstate Commerce Commission which denied reparation to the plaintiffs for the past. The Commission’s order (this part is not attacked in the instant suit) reduced freight rates on shipments of coal to points in certain parts (the Western portion) of the designated shipping area. As to the past, however, the Commission decided that these rates were not unreasonable. The railroads which had been made defendants in the proceedings before the Commission were permitted, by order of the District Court, to intervene as parties defendant in the instant suit.

(1) Jurisdiction.

We must first consider the contention of the defendants that we have no jurisdiction to entertain the present suit. The ground of this contention is that this is plainly'a suit to set aside an order of the Commission denying reparation to the plaintiffs; and that, under the Interstate Commerce Act, Sec. 9, 49 U.S.C.A. § 9, a specially organized three-judge District Court of the United States is powerless to entertain such a suit. We believe that this contention is sound and that this Court lacks jurisdiction.

Under Section 8 of the Interstate Commerce Act, 49 U.S.C.A. § 8, a common carrier by railroad committing an act, matter or thing prohibited by the Act is made liable in damages to the person or persons thereby injured. Section 9 of the Act, 49 U.S.C.A. § 9, provides that any person so damaged may either make complaint to the Interstate Commerce Commission or bring suit in a federal court for the recovery of damages; but this section contains the further provision: “such person or persons shall not have the right to pursue both of said remedies, and must in each case elect which one of the two methods of procedure herein provided for he or they will adoot.” Under Section 16 of the Act, 49 U.S.C.A. § 16, the Commission is authorized to award damages upon such a complaint.

The cases seem to establish the rule that where a litigant applies to the Commission for reparation, which has been denied by the Commission, an ordinary civil action cannot, on the same claim or cause of action, be entertained by an ordinary one-judge federal district court. George A. Hormel & Co. v. Chicago, M. & St. P. Ry. Co., 8 Cir., 283 F. 915, 918, opinion by Circuit Judge Lewis; Bartlesville Zinc Co. v. Mellon, 7 Cir., 56 F.2d 154, 156, opinion by District Judge Lindley. See, also, the opinion of Mr. Justice Butler in Baltimore & O. R. Co. v. Brady, 288 U.S. 448, 457, 458, 53 S.Ct. 441, 77 L.Ed. 888.

This brings us to the jurisdictional problem of the case before us. Can a party who has sought reparation before the Commission and has been denied such reparation by the Commission, bring a civil action (under the Urgent Deficiencies Act) in a specially organized three-judge district court for the purpose of setting aside the Commission’s order? Section 9 of the Interstate Commerce Act, 49 U.S.C.A. § 9, we think, as interpreted by the federal courts, is an effective bar to such a civil action.

Mr. Justice Sutherland seems to have dealt rather effectively with this problem in the closing words of his opinion in Standard Oil Co. v. United States, 283 U.S. 235, 240, 241, 51 S.Ct. 429, 431, 75 L.Ed. 999:

“But putting the foregoing grounds entirely aside, and assuming the correctness of appellant’s contentions to the contrary, nevertheless, having regard to the remedy invoked and the relief sought by the petition, we think the district court was without jurisdiction. Section 9 of the Interstate Commerce Act, c. 104, 24 Stat. 379, 382 (U.S.C., Title 49 § 90 (49 U.S.C.A. § 9) ), provides that a claim for damages against a common carrier may be brought before the Commission by complaint, or by an action in a federal district court of competent jurisdiction, but that the claimant or claimants ‘shall not have the right to pursue both of said remedies, and must in each case elect which one of the two methods of procedure herein provided for he or they will adopt/ Having elected to proceed and having proceeded to a determination before the Commission, appellant was, by force of this provision, precluded from seeking reparation upon the same claims by the alternative method of procedure. Compare George A. Hormel & Co. v. Chicago, M. & St. P. Ry. Co., 8 Cir., 283 F. 915, 918.

“It is true that appellant sought to enjoin and set aside the order of the Commission, but only as a preliminary step toward obtaining, by a decision upon the merits of the claims, the same relief it failed to secure from the Commission. This is made clear by the prayer of the petition, already quoted, namely, that the Commission be directed by the court to grant the prayer of the complaints; find that petitioner has been overcharged to the extent set forth; and order a further hearing, if necessary, to determine the amount to be paid by way of reparation. It is of no importance that the adjudication sought is to take the form of a direction to the Commission to grant the prayer of the complaints filed before that body, etc., instead of a plenary judgment to the same end, for the prayer in that form is nothing less than an attempt to avoid the statute by indirection. In substance and in principle the claim before the Commission and the claim before the court were the same, and the district court was without authority to entertain the controversy. It is hardly necessary to add that, since section 9 contemplates that the jurisdiction in such cases shall be exercised by the federal district courts as ordinarily constituted, the specially constituted court is without jurisdiction to dispose of an action under that section even if brought in the District Court in the first instance.”

True it is that in Rochester Telephone Corporation v. United States, 307 U.S. 125, 59 S.Ct. 754, 83 L.Ed. 1147, the Supreme Court repudiated the “negative order doctrine” as the touchstone of judicial review-ability. But in a note (No. 23) Mr. Justice Frankfurter, 307 U. S. at page 140, 59 S.Ct. at page 762, 83 L.Ed. 1147, was careful to point out:

“Standard Oil Co. v. United States [supra] held not reviewable the action of the Commission refusing to grant reparations, but the main basis of the decision was not the ‘negative order’ doctrine but the statutory scheme dealing with reparations.” (Italics ours.)

Thus, from our standpoint, the binding authority of the Standard Oil case was not impaired by the Rochester Telephone case.

No less emphatic was the language of District Judge Fee, speaking for a three-judge district court, in Atlantic Lumber Corporation v. Southern Pacific Co., D.C., 47 F.Supp. 511, 513, in which the Standard Oil case, the Rochester Telephone case (and other cases in this field) were analyzed and discussed:

“The power to give reparations in rate cases is of statutory genesis and was unknown to the common law. It is a discretionary authority reposed in the Commission in order to round out the scheme of regulation. Congress endowed with administrative finality such orders of the Commission.

“Jurisdiction of the District Court, sitting with three judges, in this type of situation is only to ‘enjoin, set aside, annul, or suspend in whole or in part any order of the Interstate Commerce Commission.’ There are many orders of the Commission which cannot be reviewed by such a court. Although the earlier cases used phraseology indicating that such a court had no jurisdiction to set aside a ‘negative order which denies relief without more compels nothing requiring enforcement, and contemplates no action susceptible of being stayed,’ it was found that this formula ■ was too loosely stated for specific application. However, the courts constituted as this one is have no jurisdiction to review an order failing to allow reparations. The purpose of Congress in constituting the Commission and in the various acts giving jurisdiction was the establishment of uniformity of administration in light of the declared policy upon these very matters.

“The prescription of reasonable and lawful rates for the future might be a basis for action, except that plaintiff obviously does not desire or seek annulment of the order upon the theory that relief should be granted as to this feature.”

Even more sweeping is the language of Circuit Judge Parker, in Brady v. Interstate Commerce Commission, D.C., 43 F.2d 847, 850, 851:

“Amending section 15 of the Interstate Commerce Act, the Act June 29, 1906 provided that the Commission should determine just and reasonable maximum rates and just, fair, and reasonable practices with respect to transportation, and issue orders to carriers with respect thereto, and that all orders of the Commission, except orders for the payment of money, should take effect within such reasonable time, not less than thirty days, as might be prescribed by the Commission, unless same should be suspended or set aside by the Commission or by a court of competent jurisdiction. 34 Stat. 589 § 4 (49 U.S.C.A. § 15). By the amendment of section 16 (34 Stat. 590, § 5 (49 U.S.C.A. § 16) ), it drew a clear distinction between reparation orders and other orders of the Commission, by providing for suit in the circuit courts to collect damages in the case of reparation orders not complied with, and for application to a court of equity for the enforcement of other orders. Following this was the provision for suits to enjoin, set aside, annul, or suspend orders of the Commission; and when all of these provisions are considered together, we think it clear that the jurisdiction thus conferred was intended to relate to quasi legislative orders, in which the public at large are interested, disobedience of which is made punishable, and the suspension of which is expressly provided for by section 15 of the act, and not to reparation orders which affect only the rights of private individuals, have no binding force and do not subject anyone to punishment for disobedience. For distinction between the two kinds of orders, see Baer Bros. [Mercantile Co.] v. Denver & R. G. Co., 233 U.S. 479, 34 S.Ct. 641, 58 L.Ed, 1055.

“This view is strengthened when it is remembered that the Act of June 18, 1910, creating the Commerce Court, 36 Stat. 539, vested that court with exclusive jurisdiction of suits to enjoin or set aside orders of the Commission and of only three other classes of cases, viz., suits for the enforcement of orders of the Commission, other than orders for the payment of money, suits to prevent unjust discrimination and rebating under the Act of February 19, 1903 (32 Stat. 847 (49 U.S.C.A. §§ 41-43) ), and applications for writs of mandamus to require carriers to comply with the provisions of the act. It vdll be noted that all three of these classes embrace only cases which are prosecuted for the benefit of the public at large and to which the public, through the representation of the Attorney General or the Commission, is a party. And we think it is a reasonable inference from the fact that suits to enjoin or set aside orders of the Commission were included with these, that such suits were’ understood to include only those which were brought to enjoin or set aside orders made by the Commission in its quasi legislative capacity and which affected the public at large.

* * * * *

“The power of this court to grant injunctions in cases of this kind is no greater than that of the Commerce Court; for we exercise jurisdiction in such cases only by virtue of the provisions of the Urgent Deficiencies Act of Oct. 22, 1913, 38 Stat. c. 32, which abolished the Commerce Court and transferred to the District Courts its jurisdiction.”

This case was affirmed by the United States Supreme Court, per curiam, sub nom. Brady v. United States, 283 U.S. 804, 51 S.Ct. 559, 75 L.Ed. 1424.

We are not impressed by the attempt of the plaintiffs to distinguish these cases and to minimize their authority. To us they seem controlling.

Nor can we find any merit in the contention of plaintiffs that this is not a suit to set aside an order of the Commission denying reparation. In their brief we find:

“There is no prayer before this Court that it determine either (a) whether we are entitled to reparation, or (b) 'the amount thereof.’ This Court is simply asked to determine whether the Commission acted arbitrarily or beyond its statutory power in deciding upon the sam