Source: http://law.justia.com/cases/federal/appellate-courts/F2/624/822/312651/
Timestamp: 2013-05-19 17:14:31
Document Index: 21064666

Matched Legal Cases: ['§ 2321', '§ 2321', '§ 17', '§ 17', '§ 10325', '§ 16', '§ 16', '§ 11705', '§ 17', '§ 10325', '§ 17', '§ 17', '§ 10327', '§ 1100', '§ 1336', '§ 1336', '§ 1336', '§ 17', '§ 17', '§ 16', '§ 16', '§ 16', '§ 2322', '§ 2325', '§ 1253', '§ 2324', '§ 7', '§ 1254', '§ 2321', '§ 17', '§ 2325', '§ 1336', '§ 16', '§ 2322', '§ 2322', '§ 2321', '§ 1611', '§ 2321', '§ 2321', '§ 2321']

624 F.2d 822: Kansas City Southern Railway Company, Appellant, v. Great Lakes Carbon Corporation, Appellee :: US Court of Appeals Cases :: Justia
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624 F.2d 822: Kansas City Southern Railway Company, Appellant, v. Great Lakes Carbon Corporation, Appellee
United States Court of Appeals, Eighth Circuit. - 624 F.2d 822
Submitted Jan. 16, 1980.Decided June 16, 1980
Under the circumstances, the judgment may not be vacated under Rule 60(b)(4). Marshall v. Board of Education, 575 F.2d 417, 422 (3rd Cir. 1978); Coalition of Black Leadership v. Cianci, 570 F.2d at 15-16 (by implication); Ben Sager Chemicals v. E. Targosz & Co., 560 F.2d at 812; cf. Jackson v. Irving Trust Co., 311 U.S. 494, 61 S.Ct. 326, 85 L.Ed. 297 (1941) (motion to set aside, prior to promulgation of Rule 60(b)(4)).
Competing policies are at stake in setting aside a federal court judgment as void for lack of subject matter jurisdiction: observation of limits on federal jurisdiction and need for judgments that are final. However, when the challenge is to an erroneous interpretation of a statutory grant of jurisdiction and the judgment is not appealed, thus becoming final, the policy favoring certainty in judicial resolution of controversies prevails.
The panel opinion is ordered vacated and the district court judgment affirmed.
I concur in the majority opinion not only for the reasons stated therein, but also for an additional reason. In my opinion the United States was not an indispensable party to the counterclaim portion of the case under 28 U.S.C. §§ 2321-23, and therefore there was no jurisdictional defect as indicated by the panel decision.
The counterclaim was not, as required by section 2321, "a proceeding to enjoin or suspend * * * a rule, regulation or order of the Interstate Commerce Commission" or "an action to enforce * * * any order of the Interstate Commerce Commission." Rather it was an action "for the payment of money" which is specifically exempted from the provisions of section 2321. If section 2321 is not involved, then by its terms section 2322 is not involved either and it was not necessary to join the United States as a party. I believe that 28 U.S.C. §§ 2321-23 was meant to apply to appeals to our court from an order of the ICC, not to appeals to our court from a district court case involving an action "for the payment of money."
After carefully considering the majority opinion and the concurring opinion, I continue to adhere to the general analysis set forth in the panel decision and therefore dissent.
To the extent relief under Rule 60(b)(4) enables a party to evade the doctrine of finality of judgments and to in effect appeal indirectly from a final judgment, I think this is the function of Rule 60(b)(4). In my view, the judgment of the district court is void for lack of subject matter jurisdiction because, as is apparent from the face of the record, the United States was not a party to the proceedings below. In the present case, the failure to join the United States is a "fatal" jurisdictional defect. See Schwartz v. Bowman, 244 F.Supp. 51, 69 (S.D.N.Y.1965), aff'd sub nom. Annenberg v. Alleghany Corp., 360 F.2d 211 (2d Cir.) (per curiam), cert. denied, 385 U.S. 921, 87 S.Ct. 230, 17 L.Ed.2d 145 (1966), citing Lambert Run Coal Co. v. Baltimore & Ohio R.R., 258 U.S. 377, 382, 42 S.Ct. 349, 351, 66 L.Ed. 671 (1922). The United States should have been made a party because the action was a direct review proceeding to set aside or suspend an order of the Interstate Commerce Commission (ICC) under § 17(10)1 of the Interstate Commerce Act, 49 U.S.C. § 17(10), as revised and codified2 at 49 U.S.C. § 10325, and not an action to enforce a reparation award under § 16(2)3 of the Act, 49 U.S.C. § 16(2), as revised and codified at 49 U.S.C. § 11705. See ICC v. Atlantic Coast Line R.R., 383 U.S. 576, 579-89, 602-06, 86 S.Ct. 1000, 1003-08, 1015-18, 16 L.Ed.2d 109 (1966) (hereinafter Atlantic ).
As a preliminary matter, I note that the district court may not have had jurisdiction for another reason, that is, failure to exhaust administrative remedies. It appears from the record that neither the shipper (GLC) nor the carrier (KCS) filed a petition for reconsideration before the ICC. Denial or other disposition of a timely petition for reconsideration may well be a jurisdictional prerequisite to judicial review in a direct review proceeding. "Section 17(9) (renumbered as § 17(10), recodified as § 10325) provides that after an application for rehearing, reargument, or reconsideration has been denied or otherwise disposed of, a suit may be brought to enforce, enjoin, suspend, or set aside the Commission decision, order, or requirement." Atlantic, supra, 383 U.S. at 582-83, 86 S.Ct. at 1005 (footnote omitted); see United States v. Southern Ry., 364 F.2d 86, 92-93 (5th Cir. 1966), cert. denied, 386 U.S. 1031, 87 S.Ct. 1479, 18 L.Ed.2d 592 (1967); Southern Ry. v. United States, 412 F.Supp. 1122, 1134-35 & n. 31 (D.D.C.1976); but see Resort Bus Lines, Inc. v. ICC, 264 F.Supp. 742, 745 & n. 6 (S.D.N.Y.1967). New § 17(9) suggests, however, that a petition for reconsideration may not be necessary, at least in rail carrier proceedings,4 because petitions for reconsideration are essentially discretionary and based upon allegations of material error, new evidence, or substantially changed circumstances, 49 U.S.C. § 17(9)(g) (now revised and recodified at 49 U.S.C. § 10327(g)). See ICC General Rules of Practice, 49 C.F.R. § 1100.98 (Rail appellate procedures, Rule 98) (1979) (also reprinted in 49 U.S.C.A. Appendix).
I agree that the district court was the appropriate court in which to review the order of the ICC at issue. The district court as the referring court has exclusive jurisdiction to review ICC orders from referrals under the primary jurisdiction doctrine. 28 U.S.C. § 1336(b); see, e. g., Atlantic, supra, 383 U.S. at 580, 86 S.Ct. at 1004; Southern Pacific Transportation Co. v. United States, 205 Ct.Cl. 451, 505 F.2d 1252, 1254-55 (1974); Keller Industries, Inc. v. United States, 449 F.2d 163, 166-67 (5th Cir. 1971); McLean Trucking Co. v. United States, 181 Ct.Cl. 170, 387 F.2d 657, 659-61 (1967); see also S.Rep. No. 1394, 88th Cong., 2d Sess. 2 reprinted in (1964) U.S.Code Cong. & Admin.News, p. 3235. Compare Pennsylvania R.R. v. United States, 363 U.S. 202, 205, 80 S.Ct. 1131, 1133, 4 L.Ed.2d 1165 (1960) (the holding in this case prompted the amendment of § 1336). The action was initially filed in district court by the carrier to recover undercharges; the shipper filed a counterclaim for overcharges. Because the action raised questions within the primary jurisdiction of the ICC, the district court correctly referred the issues to the ICC. E. g., United States v. Western Pacific R.R., 352 U.S. 59, 63-64, 77 S.Ct. 161, 164-65, 1 L.Ed.2d 126 (1956). "When that occurs, the court ordering the reference of such issues to the Commission has exclusive jurisdiction of any civil action to enforce, enjoin, suspend, set aside, or annul a Commission order arising out of the referral . . . ." Atlantic, supra, 383 U.S. at 580, 86 S.Ct. at 1004. In addition, as noted by the concurring opinion, the ICC order at issue was basically an order for the payment of money and as such subject to judicial review by the district court. 28 U.S.C. § 1336(a);5 United States v. ICC, 337 U.S. 426, 442, 69 S.Ct. 1410, 1419, 93 L.Ed. 1451 (1949); Aluminum Co. of America v. United States, 553 F.2d 1268, 1269-70 (D.C.Cir. 1977) (per curiam).
In my view, however, the shipper's motion for summary judgment, which was granted by the district court, was either an action to set aside the ICC order finding that the higher specific commodity rates, as modified by the ICC, were applicable to the shipments at issue or an action challenging the adequacy of the reparations award (to the extent the carrier recovered less than it demanded). In either case, judicial review was available only in a direct review proceeding (under old § 17(9) or new § 17(10) of the Act), and not in an action for enforcement under § 16(2). In the absence of a reparations award, there is nothing upon which to base an enforcement action, see Atlantic, supra, 383 U.S. at 587, 86 S.Ct. at 1007; United States v. ICC, supra, 337 U.S. at 439-41, 69 S.Ct. at 1417-18, and a shipper cannot challenge the adequacy of a reparations award in an enforcement action, see Atlantic, supra, 383 U.S. at 587, 86 S.Ct. at 1007, citing Baltimore & Ohio R.R. v. Brady, 288 U.S. 448, 457-58, 53 S.Ct. 441, 443, 77 L.Ed. 888 (1933); D. L. Piazza Co. v. West Coast Line, 210 F.2d 947, 949 (2d Cir.), cert. denied, 348 U.S. 839, 75 S.Ct. 42, 99 L.Ed. 661 (1954).
The characterization of the action below as a direct review proceeding and not an enforcement action is critical because, although both involve "orders for the payment of money," only § 16(2) actions for the enforcement of orders for the payment of money are brought as ordinary civil actions. 49 U.S.C. § 16(2); Atlantic, supra, 383 U.S. at 585, 86 S.Ct. at 1006. In contrast, direct review proceedings are distinct proceedings for judicial review and have special procedural requirements, in particular that such actions be brought by or against the United States, 28 U.S.C. § 2322. Originally, injunctive relief required a three-judge district court, 28 U.S.C. § 2325, with direct review to the Supreme Court under 28 U.S.C. § 1253. However, §§ 2324-25 were repealed in 1975, Act of Jan. 2, 1975, § 7, Pub.L. No. 93-584, 88 Stat. 1918, and judicial review of orders other than for the payment of money or to enforce ICC orders is now in the courts of appeal, like review of other administrative agencies, with discretionary review by writ of certiorari in the Supreme Court. 28 U.S.C. §§ 1254 (writ of certiorari), 2341 et seq. (Judicial Review Act of 1950 (Hobbs Act)); see generally H.R.Rep. No. 93-1569, 93d Cong., 1st Sess. 1, reprinted in (1974) U.S.Code Cong. & Admin.News, pp. 7025, 7034-36 (report of Department of Justice).
The action below was, in my opinion, a direct review proceeding to review an adverse reparations order. The fact that the ICC order under attack was one relating to the payment of money and thus in substance one for the payment of money meant that the order was "not of sufficient public importance to justify the accelerated judicial review procedure (the three-judge district court and direct review by the Supreme Court)." United States v. ICC, supra, 337 U.S. at 442, 69 S.Ct. at 1419. "Thus, though the procedures set out in 28 U.S.C. §§ 2321-25 (1964 ed.) otherwise govern § 17(9) proceedings to review such orders, § 2325 is not applicable and the matter may be adjudicated by a single judge." Atlantic, supra, 383 U.S. at 585, 86 S.Ct. at 1007. The provision requiring a three-judge district court (now repealed, see discussion supra ) does not apply to judicial review of adverse reparations orders, but the other provisions, including that requiring the action be brought against the United States, are applicable. Moreover, a reviewing court "may not formally set aside the Commission's order in an action in which neither the Commission nor the United States is a party." Atlantic, supra, 383 U.S. at 599, 86 S.Ct. at 1014.
In response to the argument that an action to set aside an order for the payment of money should be treated exactly like an action to enforce an order for the payment of money, I note that the Supreme Court in the Atlantic case addressed a similar argument. In that case the ICC resisted allowing a carrier to bring a direct review proceeding as a cross-action to the shipper's enforcement action. The ICC argued that "reparation orders respecting past rates are not of sufficient general importance to require their defense by the United States and the Commission, and the direct review proceeding should not be permitted regardless of the court in which it is brought." Atlantic, supra, 383 U.S. at 605, 86 S.Ct. at 1017. The Supreme Court stated that this was apparently not the view of Congress and cited the 1964 amendments which placed jurisdiction and venue of the direct review proceeding following reference to the ICC under the primary jurisdiction doctrine in the referring court, 28 U.S.C. §§ 1336(b), 1398(b), in the referring court and not as an incident of the original action. Atlantic, supra, 383 U.S. at 605-06, 86 S.Ct. at 1017. Thus, an action for direct review of an ICC order, which must be brought against the United States, may involve an order "for the payment of money." Apparently only actions to enforce an order for the payment of money pursuant to § 16(2) of the Act do not require the United States as a party to the action.6
As noted by the Supreme Court, the statutory provisions controlling the availability of judicial review in this case are "an historical patchwork subject to more than one interpretation." Atlantic, supra, 383 U.S. at 586 n. 4, 86 S.Ct. at 1007 n. 4. Nonetheless, because the proceeding below was a direct review proceeding to set aside an ICC order for the payment of money and as such should have been brought against the United States, but was not, I would find that the district court lacked subject matter jurisdiction and would reverse the denial of the Rule 60(b)(4) motion.
BRIGHT, Circuit Judge, joining in the dissent.
I join in Judge McMillian's dissent. When the case was returned to the district court, the shipper moved for a summary judgment on its counterclaim, seeking a construction of the tariff inconsistent with the Commission's ruling. That motion triggered the statutory procedures for review of an ICC order, which require that the United States be joined. 28 U.S.C. § 2322 (1976). The statutes preclude a federal trial judge from making a tariff interpretation without complying with the procedures mandated by Congress; thus, such ruling amounts to a nullity.
In Schwartz v. Bowman, 244 F.Supp. 51 (S.D.N.Y.1965), aff'd sub nom. Annenberg v. Alleghany Corp., 360 F.2d 211 (2d Cir.) (per curiam ), cert. denied, 385 U.S. 921, 87 S.Ct. 230, 17 L.Ed.2d 145 (1966), the court appropriately observed:
If it can be established extrinsically that the practical effect of success on the merits by the party making a claim would be to invalidate the (ICC) order, (28 U.S.C. § 2322) applies and its requirements must be met. (Id. at 68 (citations omitted).)
The absence of the United States as a party was "a fatal jurisdictional defect." Id. at 68. Thus, the judgment was void.
Moreover, I find nothing in the record that indicates that the district court expressly or impliedly made a determination that it had jurisdiction to overrule the Commission's order construing the tariff in question. Neither party called the court's attention to the relevant statutory sections, 28 U.S.C. §§ 2321-23, and the district court apparently assumed it could overturn the Commission's ruling. I find nothing in the record to show that the district court considered whether it possessed jurisdiction to overrule the Commission solely on the shipper's motion. The jurisdictional issue did not surface until the Railway Co. brought its motion for relief from a void judgment under Fed.R.Civ.P. 60(b)(4). The district court then should have corrected its jurisdictional error and granted the motion. Accordingly, I, too, would reverse.
HEANEY, Circuit Judge, joins in the views expressed in Judge Bright's dissent.
1 Fed.R.Civ.P. 60(b)(4) reads as follows:
(b) Mistakes; Inadvertence; Excusable Neglect; Newly Discovered Evidence; Fraud, etc. On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order, or proceeding for the following reasons: . . . (4) the judgment is void; . . . .
2 The court did not hold that the United States was an indispensable party, nor that its absence alone deprived the court of jurisdiction
Even if the United States is deemed an indispensable party, its absence may not be a jurisdictional defect. Some cases have used language indicating dismissal for nonjoinder of an indispensable party is dismissal for lack of jurisdiction. See, e.g., Agrashell, Inc. v. Hammons Prods. Co., 352 F.2d 443, 447 (8th Cir. 1965). The weight of authority is against this characterization. See, e.g., Mallow v. Hinde, 25 U.S. (12 Wheat.) 193, 196, 6 L.Ed. 599 (1827); Clarkson Co. v. Shaheen, 544 F.2d 624, 628 (2d Cir. 1976); Tryforos v. Icarian Dev. Co., 518 F.2d 1258, 1265 n.26 (7th Cir. 1975), cert. denied, 423 U.S. 1091, 96 S.Ct. 887, 47 L.Ed.2d 103 (1976); Moore v. Knowles, 482 F.2d 1069, 1075 (5th Cir. 1973); Warner v. First Nat. Bank, 236 F.2d 853, 857 (8th Cir.), cert. denied, 352 U.S. 927, 77 S.Ct. 226, 1 L.Ed.2d 162 (1956); Dyer v. Stauffer, 19 F.2d 922 (6th Cir.), cert. denied, 275 U.S. 551, 48 S.Ct. 114, 72 L.Ed. 421 (1927); Agrashell Inc. v. Composition Materials Co., 40 F.R.D. 395, 397 (S.D.N.Y.1966); 7 C. Wright & A. Miller, Federal Practice and Procedure § 1611 at 115-17, 121 (1972); 3A Moore's Federal Practice P 19.04(2) & P 19.19 at 345 (2d ed. 1979). These authorities rely upon the history of the indispensable party doctrine in equity and the emphasis on equitable considerations in Fed.R.Civ.P. 19. This reasoning may be less persuasive when the joinder of party requirement is imposed by a statutory grant of jurisdiction. See Noland v. United States Civil Service Comm'n, 544 F.2d 333, 334 (8th Cir. 1976).
3 In granting relief, the district court not only had to implicitly decide whether the United States was a necessary or indispensable party under 28 U.S.C. §§ 2321-23, but also whether the ICC order was in effect one for payment of money, which would be statutorily exempted from the requirement of joinder of the United States, 28 U.S.C. § 2321(b), and whether joinder was not necessary because the ICC order was advisory only
We note that the statutory exemption from 28 U.S.C. §§ 2321-23 procedures, section 2321(b), does not encompass GLC's motion for summary judgment on its counterclaim. GLC sought to avoid the effect of the ICC order, and section 2321(b) applies only to actions brought in district court to enforce an ICC payment order.
4 It is basic that Fed.R.Civ.P. 60(b) is not a substitute for appeal. Horace v. St. Louis S.W. R.R., 489 F.2d 632, 633 (8th Cir. 1974). If a judgment is not void, but rather rests upon an erroneous jurisdictional determination, Rule 60(b)(4) is not properly invoked to extend time for appeal that has already expired. See id.; Hoffman v. Celebrezze, 405 F.2d 833, 837 (8th Cir. 1969)
5 The concept of a void judgment is extremely limited. V.T.A., Inc. v. Airco, Inc., 597 F.2d 220, 225 (10th Cir. 1979); Coalition of Black Leadership v. Cianci, 570 F.2d 12, 15 (1st Cir. 1978) (quoting Lubben v. Selective Service System, 453 F.2d 645, 649 (1st Cir. 1972)); Ben Sager Chemicals v. E. Targosz & Co., 560 F.2d 805, 812 (7th Cir. 1977). Professor Moore indicates the concept is so narrowly restricted that, although seemingly incongruous, a federal court judgment is almost never void because of lack of federal subject matter jurisdiction. See 7 Moore's, supra P 60.25(2), at 305-06
6 See, e.g., Chicot County Drainage Dist. v. Baxter State Bank, 308 U.S. 371, 60 S.Ct. 317, 84 L.Ed. 329 (1940) (federal statute that was basis for decree subsequently ruled unconstitutional, nevertheless court has jurisdiction over parties and could pass implicitly on its jurisdiction over the claim or statute's constitutionality, even if its holding were erroneous); Stoll v. Gottlieb, 305 U.S. 165, 171, 59 S.Ct. 134, 137, 83 L.Ed. 104 (1938) (no jurisdiction in federal bankruptcy court over subject matter of order, court with jurisdiction of parties nevertheless could erroneously decide there was); Marshall v. Board of Educ., 575 F.2d 417, 422-23 (3d Cir. 1978) (application of statute to certain defendants later held to be unconstitutional, nevertheless judgment was not void since the court had jurisdiction to erroneously pass on the issue); 7 Moore's, supra P 60.25(2), at 302 (2d ed. 1979)
Often determination of subject matter jurisdiction rests upon a finding of jurisdictional fact, rather than, as in this case, construing a statutory grant of jurisdiction. When facts must be proven before a court will exercise its jurisdiction, voidness often turns upon the distinction between essential jurisdictional facts such as service of process or location of the res, and quasi-jurisdictional facts such as diversity of citizenship or amount in controversy. See Noble v. Union River Logging R.R., 147 U.S. 165, 173-74, 13 S.Ct. 271, 273, 37 L.Ed. 123 (1893); see, e.g., Lubben v. Selective Service System, 453 F.2d 645, 649 (1st Cir. 1972); Independence Mortgage Trust v. White, 446 F.Supp. 120 (D.Or.1978). Federal subject matter jurisdiction turns upon findings of quasi-jurisdictional facts. 7 Moore's, supra P 60.25(2), at 307 n.59.
7 This latter jurisdictional basis assumes, although we do not decide the issue here, that the district court was reviewing an ICC order, rather than acting in the realm of its own original jurisdiction with the benefit of an ICC advisory opinion