Source: https://case-law.vlex.com/vid/392-f-supp-358-598233326
Timestamp: 2019-04-18 22:17:20+00:00

Document:
UNITED STATES of America and Interstate Commerce Commission, Defendants.
United States District Court, E.D. Virginia, Richmond Division.
Owen Clarke, Ilene Chase Gregg, Doyle S. Morris, Charles C. Rettberg, Jr., Cleveland, Ohio, George D. Gibson, E. Milton Farley, III, T. S. Ellis, III, Richard D. Gary, Hunton, Williams, Gay & Gibson, Richmond, Va., for plaintiffs.
Thomas E. Kauper, Asst. Atty. Gen., John H. D. Wigger, Atty. Dept. of Justice, David Hopkins, U.S. Atty., E.D. Va., David G. Lowe, Asst. U.S. Atty., for the United States.
Fritz R. Kahn, Gen. Counsel, Hanford O'Hara, Atty., I.C.C., for the I.C.C.
Before BUTZNER, Circuit Judge, and MERHIGE and WARRINER, District judges.
In this petition for review of a series of orders of the Interstate Commerce Commission in Ex Parte No. 305, Nationwide Increase of Ten Percent in Freight Rates and Charges, 1974, the Chessie system lines challenge the power of the Commission to condition the refiling of a rate increase, without investigation or suspension, on the expenditure of revenue derived from the increase in the manner directed by the Commission. 1 We conclude that the Commission lacks statutory authority to order a railroad how to spend its revenue, and we hold that this condition should not be enforced against the Chessie system. Chessie also charges that the Commission unlawfully required it to file certain reports. We hold that the orders to furnish the requested information are incidental to the Commission's authority to suspend the proposed rate increases and are therefore not reviewable.
Protesting that it had neither deferred maintenance nor delayed capital improvements as defined by the Commission, Chessie petitioned for an amendment to the July 18 order that would allow it to expend the additional funds for any valid corporate purpose. On August 9 the Commission denied Chessie's petition but relaxed its order by changing the cut-off date for determining what constituted delayed capital improvements.
Rebuffed by the Commission, Chessie instituted this action on August 15, 1974, and in due course secured an interlocutory injunction restraining the Commission from controlling Chessie's expenditure of its increased revenues. 4 In the meantime, at the instance of other railroads, the Commission reopened the proceedings. After a hearing, in which Chessie declined to participate, the Commission on October 3 modified its orders of June 3, July 18, and August 9 by allowing a railroad to use the increased revenues for new capital improvements if it could show that it could not use the funds for deferred maintenance and delayed capital improvements, as defined by the Commission. 5 Chessie then amended its complaint, alleging that the restrictions on expenditure of revenue, even as modified by the October 3 order, exceeded the Commission's statutory authority.
At the outset the Commission challenges the jurisdiction of the Court to review the questioned orders. It contends that administrative proceedings involving the suspension of rates are free from judicial review. Consideration of this defense requires examination of the suspension process.
and Arrow Transportation Co. v. Southern Railway Co., 372 U.S. 658, 83 S.Ct. 984, 10 L.Ed.2d 52 (1963). In arrow the Court concluded that Congress intended 'to vest in the Commission the sole and exclusive power to suspend and to withdraw from the judiciary any pre-existing power to grant injunctive relief.' 372 U.S. at 667, 83 S.Ct. at 988. It therefore held that a district court could not restrain a railroad from charging the proposed rates after the seven-month administrative suspension period, even though the Commission had not completed its investigation. In SCRAP the Court held that the exclusive suspension power vested in the Commission by § 15(7) deprived a district court of jurisdiction to forbid the collection of a new rate which the Commission had not suspended.
However, lack of power to review certain parts of the Commission's orders does not deny jurisdiction to examine other parts. Congress gave the courts jurisdiction to review 'in whole or in part' any order of the Commission. 28 U.S.C. § 1336(a). A condition is considered a separate part of an order for the purpose of exercising this jurisdiction. United States v. Chicago, M. St. P. & P.R.R. Co., 282 U.S. 311, 328, 51 S.Ct. 159, 75 L.Ed. 359 (1931). We turn, therefore, to the suspension power in § 15(7) to determine whether Congress intended to withdraw from the judiciary claims that the Commission has unlawfully conditioned the suspension of rates on compliance with a requirement which it would otherwise have no statutory authority to impose. Section 15(7) mentions only one condition as concomitant to the Commission's power to suspend. The Commission can require the carrier to keep account of the amounts received from an increased rate and to refund any portion that ultimately is found to be unjustified. 7 A suspension order imposing this statutory condition is not subject to judicial review. Port of New York Authority v. United States, 451 F,2d 783, 786 (2d Cir. 1971) (by implication).

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