Source: http://www.law.cornell.edu/supremecourt/text/230/247
Timestamp: 2013-12-13 04:45:56
Document Index: 275224392

Matched Legal Cases: ['§ 8', '§ 9', '§ 9', '§ 16', '§ 9', '§ 2', '§ 8', '§ 2', '§ 1', '§ 2', '§ 6', '§ 4', '§ 3', '§ 3', '§ 2', '§ 9']

MITCHELL COAL & COKE COMPANY, Plff. in Err., v. PENNSYLVANIA RAILROAD COMPANY. | Supreme Court | LII / Legal Information Institute
Supreme Court aboutsearch liibulletin subscribe previews MITCHELL COAL & COKE COMPANY, Plff. in Err., v. PENNSYLVANIA RAILROAD COMPANY.
230 U.S. 247 (33 S.Ct. 916, 57 L.Ed. 1472)
[HTML] Mr. George S. Graham for plaintiff in error.
1. The plaintiff's cause of action for damages occasioned by the payment of illegal or unreasonable allowances was one which, under §§ 8 and 9 of the commerce act (24 Stat. at L. 382, chap. 104, U. S. Comp. Stat. 1901, p. 3159), could only be brought in a district or circuit court of the United States. The motion to dismiss challenged the jurisdiction of the court, as a Federal court, and its power 'primarily to hear complaints concerning wrongs of the character of the one here complained of.' Texas & P. R. Co. v. Abilene Cotton Oil Co. 204 U. S. 442, 51 L. ed. 559, 27 Sup. Ct. Rep. 350, 9 Ann. Cas. 1075; Baltimore & O. R. R. Co. v. United States ex rel. Pitcairn Coal Co. 215 U. S. 495, 54 L. ed. 297, 30 Sup. Ct. Rep. 164; Robinson v. Baltimore & O. R. Co. 222 U. S. 506, 56 L. ed. 288, 32 Sup. Ct. Rep. 114. The order of dismissal was founded on the denial of jurisdiction, and this court has power to review that ruling. The Ira M. Hedges (Lehigh Valley R. Co. v. Cornell S. B. Co.) 218 U. S. 270, 54 L. ed. 1039, 31 Sup. Ct. Rep. 17, 2 Ann. Cas. 1235; The Jefferson, 215 U. S. 130, 54 L. ed. 125, 30 Sup. Ct. Rep. 54, 17 Ann. Cas. 907. The case differs from R. J. Darnell v. Illinois C. R. Co. 225 U. S. 243, 56 L. ed. 1072, 32 Sup. Ct. Rep. 760. There the Commission had found that the rate was unreasonable. The demurrer, based on the failure to allege that a reparation order had been made in favor of the plaintiff, did not attack the jurisdiction of the court, as a Federal court, since the cause of action sought to be enforced was one which, if properly brought, could, under the act of 1910 (36 Stat. at. L. 554, chap. 309),
have been maintained either in a state or Federal court.
2. In the present case the motion to dismiss for want of jurisdiction was made at the end of the trial, and was based not upon the pleadings, but upon the evidence. It becomes necessary, therefore, to make a statement of the facts material to that issue:The plaintiff, the Mitchell Coal & Mine Coke Company, owned six coal mines in the Clearfield district, and between 1897 and May 1, 1901, shipped its products over the Pennsylvania Railroad in state and interstate commerce. During that time the provisions of the commerce act were constantly violated, and there were many instances in which the carrier gave secret rates to shippers from whom it collected the full tariff and subsequently refunded the difference between the legal and the illegal rate. Many such rebates were paid to the plaintiff, the Mitchell Company, which in this case claimed the right to recover, as damages, the difference between these rebates paid to it and what it claimed were the additional rebates paid to the Altoona and other companies mentioned in the declaration. The referee found that, for a part of the time, 70 per cent of plaintiff's , 97 C. C. A. 383, 173 Fed. 1, 9, rates, and held, citing Pennsylvania R. Co. v. International Coal Min. Co. L.R.A.(N.S.) , 97 C. C. A. 383, 173 Fed. 1, 9, that, as to this tonnage, the plaintiff was as much a violator of the statute as was the carrier, and that no cause of action arising out of this illegal contract would be enforced by the courts. He therefore limited the inquiry to a consideration of the damages in respect to that part of the plaintiff's shipments on which no rebates had been paid.
From the referee's report, and the testimony returned therewith, it appears that Clearfield district is the name given to a large coal field reached by the lines of the Pennsylvania Railroad. In this district there were many minessome near the railroad and others at considerable distances therefrom, but all reached by lateral lines or spur tracks, over which cars were carried to and from the mines. This Clearfield district was treated as a single shipping station, and the rates from all points therein were the same where the coal was transported to the same point beyond the state. The published tariff named the rate from station to destination, but it was uniformly construed to include the haul from the mine. The published rate was so applied on all shipments made by the plaintiff as well as on those made by the Altoona and other companies named in the complaint.
On this hearing, involving a matter of jurisdiction, we cannot pass upon these questions which go to the merits of the controversy. But these claims of the parties emphasize the fact that there are two classes of acts which may form the basis of a suit for damages. In one, the legal quality of the practice complained of may not be definitely fixed by the statute, so that an allowance, otherwise permissible, is lawful or unlawful, according as it is reasonable or unreasonable. But to determine that question involves a consideration and comparison of many and various facts, and calls for the exercise of the discretion of the rate-regulating tribunal. The courts have not been given jurisdiction to fix rates or practices in direct proceedings, nor can they do so collaterally during the progress of a lawsuit when the action is based on the claim that unreasonable allowances have been paid. If the decision of such questions was committed to different courts, with different juries, the results would not only vary in degree, but might often be opposite in character,to the destruction of the uniformity in rate and practice which was the cardinal object of the statute.
4. The necessity under the statute of having such questions settled by a single tribunal in order to secure singleness of practice and uniformity of rate has been pointed out and settled in Abilene, Pitcairn, and Robinson Cases, and is referred to here because this record and that in Pennsylvania R. Co. v. International Coal Min. Co., just decided 230 U. S. 184. 57 L. ed. , 33 Sup. Ct. Rep. 893 furnish a striking illustration of the results which would follow if the reasonableness of an allowance could be decided by different tribunals. Both cases involve the payment of 18 cents a ton to the Altoona Company during the same period and for identically the same reasons. In both the plaintiff insisted that the payment was a rebate, and the carrier that it was compensation for services rendered. In the International Case the judge treated the Altoona allowance as lawful and reasonable. In this case the referee found that it was a rebate, while the trial judge, in passing on exceptions to the report, held that it was a question of fact about which the evidence was conflicting, and thereupon approved the referee's report. Treating it as a question of fact, there may have been sufficient testimony to sustain the finding in both instances, although the conclusion was diametrically opposite. And, applying the rule that appellate courts will not disturb findings of fact where the evidence is conflicting, contradictory judgments might have been affirmed, and one plaintiff could have been awarded damages on the theory that the Altoona allowance was unlawful, and the other been mulcted in cost because the Altoona allowance was legal. This and like considerations compelled the holding that, as the courts have no primary jurisdiction to fix rates, neither can they do so at the suit of a single plaintiff who claims to have been damaged because an allowance paid its competitors was unreasonable in amount.
It is argued that this conclusion ignores §§ 9 and 22, which give the shipper the option of suing in the courts or applying to the Commission. The same argument was made and answer in the Abilene Case by showing that to permit suits based on the charge that a particular practice was unreasonable, without previous action by the Commission, would repeal the many provisions of the statute requiring uniformity and equality. For, manifestly, such uniformity and equality canot be secured by separate suits before separate tribunals, involving the reasonableness of a rate or practice. The evidence might vary, and, of course, the verdicts would vary; with the result that one shipper would succeed before one jury and another fail before a different jury, where the reasonableness of the same practice was involved. Manifestly, different verdicts would occasion inequality between the two shippers, and it is equally manifest that if the Commission had made one order of which both could avail themselves, there would have been one finding, of which one, two, or a score of shippers could equally avail themselves. The claim that this conclusion nullifies § 9 is concretely answered by the fact that the court has just decided to the contrary in Pennsylvania R. Co. v. International Coal Min. Co. There the carrier insisted that a suit for damages occasioned by rebating could not be maintained without preliminary action by the Commission. This contention was overruled, and it was held that, for doing an act prohibited by the statute, the injured party might sue the carrier without previous action by the Commission, because the courts could apply the law prohibiting a departure from the tariff to the facts of the case. But where the suit is based upon unreasonable charges or unreasonable practices, there is no law fixing what is unreasonable and therefore prohibited. In such cases the whole scope of the statute shows that it was intended that the Commission, and not the courts, should pass upon that administrative question. When such order is made, it is as though the law for that particular practice had been fixed, and the courts could then apply that order, not to one case, but to every case,thereby giving every shipper equal rights and preserving uniformity of practice. Section 9 gives the plaintiff the option of going before the Commission or the courts for damages occasioned by a violation of the statute. But since the Commission is charged with the duty of determining whether the practice was so unreasonable as to be a violation of the law, the plaintiff must, as a condition to his right to succeed, produce an order from the Commission that the practice or the rate was thus unreasonable, and therefore illegal and prohibited.
There are several answers to this proposition. In the first place, the plaintiff cannot claim under the act against it. To say the least, it is extremely doubtful whether, at common law, one shipper had a cause of action because the carrier paid another shipper more than the market value of transportation services rendered to the carrier. Interstate Commerce Commission v. Baltimore & O. R. R. Co. 145 U. S. 275, 36 L. ed. 701, 4 Inters. Com. Rep. 92, 12 Sup. Ct. Rep. 844. But if any such right existed it was abrogated or forbidden by the commerce act, and one was given which, as a condition of the right to recover, required a finding by the Commission that the allowance was unreasonable and operated as unjust discrimination, or as an undue preference. Texas & P. R. Co. v. Cisco Oil Mill, 204 U. S. 449, 51 L. ed. 562, 27 Sup. Ct. Rep. 358; Texas & P. R. Co. v. Abilene Cotton Oil Co. 204 U. S. 444, 51 L. ed. 560, 27 Sup. Ct. Rep. 350, 9 Ann. Cas. 1075; Southern R. Co. v. Tift, 206 U. S. 437; 51 L. ed. 1126, 27 Sup. Ct. Rep. 709; United States v. Pacific & A. R. & Nav. Co. 228 U. S. 87, 57 L. ed. , 33 Sup. Ct. Rep. 443. Such orders, so far as they are administrative, are conclusive, whether they relate to past or present rates, and can be given general and uniform operation, since all shippers who have been or may be affected by the rate can take advantage of the ruling and avail themselves of the reparation order. They are quasi judicial and only prima facie correct in so far as they determine the fact and amount of damage, as to which, since it involves the payment of money and taking of property, the carrier is, by § 16 of the act, given it, day in court and the right to a judicial hearing (25 Stat. at L. 859, chap. 382, U. S. Comp. Stat. Supp. 1911, p. 1303).
But that case did not involve any question of reasonableness of rate or allowance. Nor was the court there called on to indirectly exercise rate-regulating power, but only to pass upon the question of fact as to whether, as charged in the indictment, the defendant had paid a secret rebate to a favored consignee. It appeared that the carrier's published rate of 15 cents included the haul from Cincinnati to the yard in Pittsburg. Neither by its terms, nor by general practice, did the rate include delivery at warehouses in the city and distant from the railroad tracks. Not having undertaken to furnish free cartage, it was unlawful for the carrier to perform that service for one patron and not for all others. Paying the favored consignee for rendering a service the carrier was not bound to furnish was a gift,a rebate,a thing ipso facto illegal, and prohibited by the statute, and for which the guilty carrier was subject to criminal indictment, and for which damages could have been awarded on the civil side of the court. It was therefore not necessary to have a preliminary ruling by the Commission because the statute itself prohibited the payment of rebates, and the courts could apply the law accordingly.
Under the Elkins act of 1903 32 Stat. at L. 847, chap. 708, U. S. Comp. Stat. Supp. 1911, p. 1309 (United States v. Chicago & A. R. Co. 148 Fed. 646, s. c. 26 L.R.A. (N.S.) 551, 84 C. C. A. 324, 156 Fed. 558, affirmed by a divided court in 212 U. S. 563, 53 L. ed. 653, 29 Sup. Ct. Rep. 689), and under the Hepburn bill of 1906 34 Stat. at L. 584, chap. 3591, U. S. Comp. Stat. 1911, p. 1288 (Victor Fuel Co. v. Atchison, T. & S. F. R. Co. 14 Inters. Com. Rep. 120), it has been held that the carrier must give notice in the tariff of free cartage, lighterage, ferriage, or any other accessorial service that will be furnished, as well as of any allowance that will be made to shippers who furnish transportation facilities or service. But the present case is not to be governed by those statutes, but by the law of force between 1897 and 1901, when the transactions complained of took place. At that time the commerce act
required the carrier to give notice of every charge it would make against the shipper. But the statute was not construed to compel the railroad to publish what free cartage or accessorial service it would furnish (Interstate Commerce Commission v. Detroit, G. H. & M. R. Co. 167 U. S. 646, 42 L. ed. 310, 17 Sup. Ct. Rep. 986), nor what sums it would pay shippers for transportation service rendered by them to the carrier. Failure to publish these items could, however, easily lead to unjust discrimination, and the court, in the case last cited, held that the Commission might, by a general order, require such matters to be published in the rate sheet. We are not cited to any such order for the period now under investigation, and, so far as we can discover, by the general and public custom of all carriers, acquiesced in by the Commission, the tariffs at that time uniformly omitted any statement of allowances that would be paid to the shipper for the use of private cars, or private tracks, or for transportation service in switching, hauling, lightering, or other work, included in the rate, but actually performed by the shipper.
7. But the situation of the Bolivar and Latrobe Companies was very different from that at the Altoona, Glen White, and Millwood mines, and a different conclusion must therefore follow. The Latrobe and Boliver Companies' mines were located in the Latrobe district, where the rates to eastern points were about 20 cents higher than from the Clearfield district, except that for a part of the time they were the same, though the shipments were then small by comparison with those from the Clearfield district. During that period the plaintiff shipped in competition with the Latrobe and Bolivar Companies. These companies owned no engines, and they hauled no cars between mine and station. That work was included in the rate, and the Pennsylvania did the hauling with its own locomotives and crews. It therefore owed nothing to the Latrobe and Bolivar Companies for the service which the carrier itself performed, and the so-called allowance, regardless of the amount, was a mere gift,a rebate, absolutely forbidden by the statute and ipso facto illegal. Being an act prohibited by law, it was not necessary to have any preliminary decision to that effect by the Commission, but the courts could, as in any other case, apply the law to the facts proven and award damages to the person injured. The decison just rendered in Pennsylvania R. Co. v. International Coal Min. Co. makes it unnecessary further to discuss this branch of the case. For the court undoubtedly had jurisdiction to proceed with this branch of the case.
The judgment, therefore, must be reversed in so far as the action is based upon payments to the Latrobe and Bolivar Companies, and affirmed in so far as based upon payments to the Altoona, Glen White, and Millwood Companies. But, owing to the peculiar facts of this case, the unsettled state of the law at the time the suit was begun, and the failure of the defendant to make the jurisdictional point in limine, so that the plaintiff could then have presented its claim to the Commission and obtained an order as to the reasonableness of the practice or allowance,direction is given that the dismissal be stayed so as to give the plaintiff a reasonable opportunity within which to apply to the Commission for a ruling as to the reasonableness of the practice and the allowance involved; and, if in favor of the plaintiff, with the right to proceed with the trial of the cause in the district court, in which the defendant shall have the right to be heard on its plea of the statute of limitations as of the time the suit was filed, and any other defense which it may have. Affirmed and modified in part, and in part reversed.
Since the result reached by the court in these cases has the effect of virtually eliminating the option conferred by § 9 of the interstate commerce act 24 Stat. at L. 382, chap. 104, U. S. Comp. Stat. 1901, p. 3159 upon shippers aggrieved by unjust discriminations practised by common carriers in violation of §§ 2 and 3,the option to 'either make complaint to the Commission' or to 'bring suit for the recovery of the damages,'and of conferring upon the carrier, in some cases, at least, the choice of two lines of procedure, by selecting the character of the defense to be interposed; and since in this and in other respects aggrieved shippers are to be deprived, in very large measure, of the right of redress by private action at law conferred by §§ 8 and 9 for violations of §§ 2 and 3, I deem it my duty to express, somewhat at length, the grounds of my dissent.
With great respect, it seems to me that the opinions in both the present cases err in confusing legislative and administrative functions, on the one hand, with judical functions, on the other. Thus, in the Mitchell case, after reciting the insistence of the plaintiff that the alleged 'trackage and lateral allowances' were arbitrarily fixed, and constituted a mere cover for rebating, and the contention of the defendant, on the other hand, that the allowances were made bona fide for services actually performed by the shipper in aid of the carrier, and that they were prima facie reasonable, and must be so treated by the courts until the Commission had determined otherwise, the opinion proceeds as follows: 'These claims of the parties emphasize the fact that there are two classes of acts which may form the basis of a suit for damages. In one the legal quality of the practice complained of may not be definitely fixed by the statute, so that an allowance, otherwise permissible, is lawful or unlawful, according as it is reasonable or unreasonable. But to determine that question involves a consideration and comparison of many and various facts, and calls for the exercise of the discretion of the rate-regulating tribunal. The courts have not been given jurisdiction to fix rates or practices in direct proceedings, nor can they do so collaterally during the progress of a lawsuit when the action is based on the claim that unreasonable allowances have been paid. If the decision of such questions were committed to different courts, with different juries, the results would not only vary in degree, but might often be opposite in character,to the destruction of the uniformity in rate and practice which was the cardinal object of the statute.'
And in the opinion in the Morrisdale Company Case (No. 207), referring to the different views that have been expressed upon the question of car distribution, the opinion proceeds: 'These rulings as to the validity of a particular practice, and the facts that would warrant a departure from a proper rule actually in force, are sufficient to show that the question as to the reasonableness of a rule of car distribution is administrative in its character, and calls for the exercise of the powers and discretion conferred by Congress upon the Commission,'citing the Pitcairn Case, 215 U. S. 481, 54 L. ed. 292, 30 Sup. Ct. Rep. 164, and the Illinois Central Case, 215 U. S. 452, 54 L. ed. 280, 30 Sup. Ct. Rep. 155.
Legislation consists in laying down laws or rules for the future. Administration has to do with the carrying of those laws into effect,their practical application to current affairs by way of management and oversight, including investigation, regulation, and control, in accordance with, and in execution of, the principles prescribed by the lawmaker. The judicial function is confined to injunctions, etc., preventing wrongs for the future, and judgments giving redress for those of the past.
'Sec. 9. That any person or persons claiming to be damaged by any common carrier subject to the provisions of this act may either make complaint to the Commission, as hereinafter provided for, or may bring suit in his or their own behalf for the recovery of the damages for which such common carrier may be liable under the provisions of this act, in any district or circuit court of the United States of competent jurisdiction; but 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 adopt. In any such action brought for the recovery of damages the court before which the same shall be pending may compel any director, etc. to attend, appear, . . . give testimony, etc. and may compel the production of the books and papers of such corporation,' etc. No similar compulsory powers are given to the Commission.
The remaining provisions of the act are, as it seems to me, all in accord with the general policy indicated by those above cited. The Commission is not primarily, or in any proper sense, a judicial tribunal. It can render no judgment binding upon the parties, can hold no trial by jury, cannot enforce its awards by process against the person or against property; its awards are merely prima facie evidence, without any conclusive effect, and must be enforced through the aid of the courts of law. It is an administrative body, a branch of the executive department, charged with the duty of aiding in the enforcement of the duties imposed upon the carrier by the act; and with incidentaland only incidentalauthority to award reparation, or, rather, to recommend reparation where it happens, in the course of its investigations, to learn that some improper practice of the carrier has produced an injury to the shipper that calls for such redress.
There is another important distinction, very clearly recognized in the opinion of the court in the Abilene Cotton Oil Co. Case, and pretty nearly lost sight of, as it seems to me, in the present decisions; and that is, the distinction between the general rules of conduct prescribed by the act, and the standards by which obedience to those rules is to be tested. Thus, by § 1, the rates shall not be unreasonable; and by § 2, they shall not be discriminatory. They are the general rules; but the method of enforcing them in the practical operations of the carrier is by the rate sheets prescribed by § 6 and the function committed to the Commission to revise them. Where the rate sheet has been filed, etc., it, of course, becomes binding as the particular expression of the general principle. Again, in § 4, there is the general prohibition known as the 'long and short haul clause;' but for a particular expression of it, as applicable to the management of a given railroad system, the Commission may act as the proviso to that section declares. Clearly, until the Commission acts, the general prohibition is unqualified; and, when the Commission has acted, its modification is as much law as the general prohibition was before. And this reasoning, I think, applies to the respective causes of action now under consideration. Section 2 says'No unjust discrimination.' If and when the rates are duly published, or the Commission has lawfully acted, the schedule or the order furnishes for the time the measure for determining what is an unjust discrimination. But, until the rates are filed or the Commission has acted, it is, like every other case of violation of law, a question for the courts, to be determined according to the terms of the law. And so with § 3, prohibiting undue and unreasonable preferences and advantages to particular shippers, of which, of course, discrimination in car distribution is an instance. When the Commission has lawfully taken action in accordance with its administrative duties, prescribed by the act, its order or requirement becomes applicable; but until such order or requirement is made, the duty prescribed by § 3 remains unqualified. And if, under either section, the question of reasonableness arises in the course of an action in the courts, it must be determined according to the facts and the law, just as courts determine any and every other question of reasonableness in cases within their cognizance.
In the numerous amendments that have been enacted by Congress during the twenty-five years that the Interstate Commerce act has been in force, in no instance has any change been made in either of the sections (§§ 2, 3, 8 and 9) that are here important. Nor have any of the changes made in the duties of the Commission operated to deprive the aggrieved shipper of his private action at law. Indeed, in the 3d section of the Elkins act of February 19, 1903 (32 Stat. at L. 848, chap. 708, U. S. Comp. Stat. 1911, p. 1312), Congresswhile authorizing the Commission to apply to the Federal court for an enforcement of the published tariffs, or a discontinuance of discrimination, and authorizing the district attorneys under the direction of the Attorney General, to institute and prosecute such proceedingswas careful to declare that the proceedings provided for by this act shall not preclude the bringing of suit for the recovery of damages by any party injured, or any other action provided by said act, approved February fourth, eighteen hundred and eighty-seven, entitled,' etc.
But, conceding everything that may be claimed respecting the inherent difficulty of properly passing upon such cases, they are no more difficult than many others with which courts of law and of equity have to grapple. The Interstate Commerce Commission, so far as it passes any quasi judicial judgment upon such matters, does so by pursuing methods that are modeled upon those of the courts, and which this court has recently held, cannot be departed from without rendering the proceedings void. Interstate Commerce Commission v. Louisville & N. R. Co. 227 U. S. 88, 57 L. ed. , 33 Sup. Ct. Rep. 185.
The court sees in the act a purpose to have all matters affecting rates and the regulation of practices that have to do with equality of service on the part of the carrier towards the shippers 'settled by a single tribunal.' I have no difficulty in finding in the act a purpose to confer the administrative power, the regulating power, upon a single tribunal, to wit, the Commission. But I find nothing, and the opinions refer to nothing, indicating a purpose that past transgressions of the act, and the cognizance of suits brought for the redress of injuries consequent upon such transgressions, shall be determined by a single tribunal. It would seem more probable that Congress considered precise uniformity with respect to administering justice for past offenses to be an unattainable dream. I repeat,administration, management, regulation, concern themselves with the present and the future. The awarding of relief for past offenses is properly a judicial function. And, as I read the act, Congress conferred jurisdiction over such offenses upon the courts; giving at the same time an option to the shipper to resort, if he would, to the Commission in the first instance; doubtless on the theory that the simple cases, and those involving small amounts, would go (as experience demonstrates that they have gone) to the Commission, and that thereby that body, while enabled to accomplish (by its recommendations and warnings) much in the way of remedying past grievances, would at the same time be put in possession of information from sources that otherwise would hardly be accessible, so that, on the basis of that information, it could proceed to establish regulations for the future.
In answer to the suggestion that the result reached in these cases virtually nullifies § 9 of the act, it is said that the contrary is shown by the decision just announced in Pennsylvania R. Co. v. International Coal Min. Co. No. 14, 230 U. S. 184, 57 L. ed., 33 Sup. Ct. Rep. 893. As I have endeavored to point out in the dissenting opinion in that case, the court there concedes the right of action, but in effect denies the right of recovery; for it excludes from consideration the only measure of damages that has ever been, or can be, generally applied in actions of that character.