Source: https://www.legalcrystal.com/case/105146/burlington-northern-inc-vs-united-states
Timestamp: 2018-05-20 10:22:09
Document Index: 632903664

Matched Legal Cases: ['§ 10761', '§ 10327', '§ 2349', '§ 11705', '§ 10704', '§ 2349']

Burlington Northern Inc Vs United States - Citation 105146 - Court Judgment | LegalCrystal
Burlington Northern Inc. Vs. United States - Court Judgment
LegalCrystal Citation legalcrystal.com/105146
Case Number 459 U.S. 131
Appellant Burlington Northern Inc.
burlington northern inc. v. united states - 459 u.s. 131 (1982) u.s. supreme court burlington northern inc. v. united states, 459 u.s. 131 (1982) burlington northern inc. v. united states no. 81-1008 argued november 3, 1982 decided december 13, 1982 459 u.s. 131 certiorari to the united states court of appeals for the district of columbia circuit syllabus in 1974, san antonio, tex., negotiated with petitioner railroads to transport to san antonio coal purchased under long-term contracts in wyoming for use in the city's coal-fired electricity generating plants. because it was not satisfied with the railroads' quoted rate for moving the coal, san antonio filed a complaint with the interstate commerce commission (icc)......
Burlington Northern Inc. v. United States - 459 U.S. 131 (1982)
U.S. Supreme Court Burlington Northern Inc. v. United States, 459 U.S. 131 (1982)
Held: The Court of Appeals should have deferred to the ICC on questions concerning the applicable rates. Pp. 459 U. S. 138 -144.
to the rates. Where there is a dispute about the appropriate rate, the equities favor allowing the carriers' rate to control pending a decision by the ICC, since, under the Act, the shipper may receive reparations for overpayment, while the carrier can never be made whole after underpayment. Pp. 459 U. S. 138 -142.
(b) By declaring that the 1976 rate order was "revived" for the period indicated, the Court of Appeals did what a federal court may not do, i.e., freeze the rate the railroads charge shipper prior to a decision by the ICC as to what a reasonable rate should be. This undermines the ICC' ability to exercise its primary jurisdiction to insure equitable and uniform rate. Moreover, the Court of Appeals' determination requires the railroads to accept a return that was considered temporary when it was approved in 1976, and "below a maximum reasonable rate" when it was modified in 1978. If the court was unsure about the continued vitality of the 1976 order, the more appropriate course would have been to remand to the ICC for explanation, rather than to undertake itself to construe the order, and in so doing interfere with the ICC's primary jurisdiction. In striking the 1978 and 1979 orders, the court's action operated to leave in effect the rates filed under the ICC's authority pending the ICC's redetermination of a reasonable rate and subject to reparations to protect the shipper should the ICC find that these rates were too high. Pp. 459 U. S. 142 -144.
In October, 1976, the Commission rendered a decision, San Antonio v. Burlington Northern, Inc., 355 I.C.C. 405 (1976) ( San Antonio I ), establishing a rate of $10.93 per ton for the San Antonio movement. The Commission emphasized that the prescription was temporary by noting:
The railroads sought review in the United States Court of Appeals for the Eighth Circuit, claiming, inter alia, that the Commission had erred in not considering the Railroad Revitalization and Regulatory Reform Act of 1976, Pub.L. 94-210, 90 Stat. 31 (4-R Act), [ Footnote 1 ] which became effective before San Antonio I was announced. The Court of Appeals affirmed the Commission, reasoning that, since the rate was temporary and expressly subject to modification, the parties could return to the Commission when guidelines for implementing the 4-R Act were promulgated, Burlington Northern, Inc. v. United States, 555 F.2d 637, 648 (1977).
In June, 1977, after six months of operation at the San Antonio I rates, the railroads petitioned the Commission for a modification of the rate. In October, 1977, the Commission reopened the San Antonio proceeding, and one year later, issued a new order, San Antonio v. Burlington Northern, Inc., 359 I.C.C. 1 (1978) ( San Antonio II ), finding that, when compared to other similar movements, the San Antonio I $10.93 rate was "below a maximum reasonable rate, and that modification of that rate [was] warranted." 359 I.C.C. at 7. After making extensive new cost findings and applying the ratemaking guidelines of the 4-R Act, the Commission set the maximum rate level at $16.12 per ton.
Both San Antonio and the railroads were dissatisfied with this rate, and petitioned for reconsideration. In June, 1979, a third order was issued, San Antonio v. Burlington Northern, Inc., 361 I.C.C. 482 (1979) ( San Antonio III ), which made certain modifications in the San Antonio II analysis that resulted in a new maximum rate of $17.23 per ton for the San
It is at this point that the present controversy arose, for the parties sharply disagreed about the effect of the Court of Appeals' decision on the filed tariffs pending the Commission's decision on remand. Construing the decision as vacating only the Commission's orders in San Antonio II and III, but not the rates that were filed, the railroads continued to treat the $17.23 rate as the one which San Antonio was required to pay pursuant to 49 U.S.C. § 10761 (1976 ed., Supp. IV). San Antonio, on the other hand, interpreted the Court of Appeals' decision as vacating the $17.23 rate and reviving the rate set by San Antonio I. Accordingly, the shipper unilaterally reduced its payments to the $10.93-per-ton rate set in 1976. [ Footnote 2 ]
The railroads asked the Court of Appeals for clarification of its decision. [ Footnote 3 ] Pending review, however, the parties carried on their controversy in other forums. The railroads again attempted to file a tariff in conformity with San Antonio III . Although this time the tariff was not suspended or rejected by the Commission, San Antonio continued to pay at the San Antonio I rate even after the new tariff's December, 1980, effective date; in addition, it filed a complaint to enforce the San Antonio I rate in the United States District Court for the Western District of Texas. Before the District Court could rule, the railroads countered by filing a petition asking the Commission to clarify its refusal to suspend or reject the new tariff by declaring that this action amounted to a modification of San Antonio I. In addition, the carriers filed a second prepayment tariff -- which was also accepted by the Commission. Before the Commission could react to the railroads' request for clarification, however, the Texas District Court ruled in San Antonio's favor on an application to preliminarily enjoin the railroads from conditioning service on prepayment of rates that did not conform with San Antonio I. The railroads appealed to the Court of Appeals for the Fifth Circuit.
San Antonio v. Burlington Northern, Inc., 364 I.C.C. 887, 894 (1981) ( San Antonio IV ). Pursuant to 49 U.S.C. § 10327(h) (1976 ed., Supp. IV), this order became effective 30 days later, in May 1981.
It was at this point that the Fifth Circuit decided the railroads' appeal of the Texas District Court decision. In its holding, that court vacated the preliminary injunction on the ground that only the Commission had jurisdiction to enjoin railroads from collecting their filed tariff rate. In addition, that court denied an application by San Antonio for a stay of the Commission's San Antonio IV decision, San Antonio v. Burlington Northern, Inc., 650 F.2d 49, clarified, 652 F.2d 422 (1981). Thus, when the Commission's San Antonio IV decision became effective in May, 1981, San Antonio finally began to pay for the shipment of its coal at the carriers' tariff rate of $17.23 per ton. [ Footnote 4 ]
T. & S. F. R. Co. v. Wichita Board of Trade, 412 U. S. 800 (1973), the Court of Appeals held that, since it was without authority to determine interim policy pending remand proceedings in the Commission, the effect of the court's 1980 decision was necessarily to reinstate San Antonio I, which was "revived" by the vacation of San Antonio II and III. 211 U.S.App.D.C. at 114, 655 F.2d at 1344. Tariffs set in excess of the San Antonio I rate were therefore declared "unlawful" for the period after the court vacated San Antonio II and III but before the Commission formally vacated San Antonio I. 211 U.S.App.D.C. at 113, 655 F.2d at 1343. We granted certiorari. 455 U.S. 988 (1982). [ Footnote 5 ]
In recent years, we have had four occasions to consider federal courts' authority to alter rail rates regulated by the Interstate Commerce Act. In the first of these, Arrow Transportation Co. v. Southern R. Co., 372 U. S. 658 (1963), a railroad faced with declining revenues had attempted to lower its rates, and the issue before us was whether a Federal District Court had the power to enjoin this reduction at the request of competitors of the railroad and those who shipped by rail. Affirming the District Court's denial of an injunction, we held that Congress, in the Interstate Commerce Act, meant to "vest in the Commission the sole and exclusive power to suspend" the rates. Id. at 372 U. S. 667 .
We noted several reasons for this rule. First, a review of the legislative history of the 1910 amendments to the Interstate Commerce Act demonstrated that Congress was dissatisfied with the nonuniformity in rates and inequities that resulted from the 1887 Interstate Commerce Act's failure to give the Commission power to grant injunctive relief. We noted that the authority to suspend rates granted the Commission by the 1910 amendments would not cure the problem unless the suspension power was exclusive. Id. at 372 U. S. 664 .
Second, we held that court-ordered injunctive relief would interfere with the careful way in which the Commission's suspension power takes into account the need of the carrier to receive a reasonable rate of return, and the desire of the shipper to pay only what is lawful. Unlike an injunction, a suspension order is limited to seven months' duration. Id. at 372 U. S. 665 -666. The shippers, on the other hand, are fully protected by the reparation provision which requires carriers to reimburse shippers if the Commission later determines that the filed tariff was unreasonable. Id. at 372 U. S. 666 .
Id. at 372 U. S. 668 . (Emphasis in original.)
412 U.S. at 412 U. S. 697 . (First emphasis added; other in original.)
"Carriers may put into effect any rate that the Commission has not declared unreasonable. . . . Suspension of the Commission's order thus does not, in itself, preclude the carriers from implementing a new rate. "
412 U.S. at 412 U. S. 818 -819. (Emphasis added.)
Again we noted that Congress channeled all rate decisions to the Commission in the first instance, id. at 412 U. S. 820 ; that court-ordered relief interferes with the delicate balance the Act strikes between the competing interests of shipper and carrier, ibid.; and that the equities favor allowing the railroads to charge more than the Commission may ultimately find reasonable because the Act gives the shippers a right to reparations while no such protection is given to the carriers, id. at 412 U. S. 823 .
"The authority to determine when any particular rate should be implemented is a matter which Congress has placed squarely in the hands of the Commission. Arrow Transportation Co. v. Southern R. Co., 372 U. S. 658 , 372 U. S. 662 -672 (1963). . . . [T]here is no basis in our prior decisions for the revocation order or for the injunction against further increases."
" Atchison, T. & S. F. R. Co. v. Wichita Board of Trade, 412 U. S. 800 , 412 U. S. 822 (1973). . . ."
449 U.S. at 449 U. S. 612 . (Emphasis added.)
To recapitulate, our cases stand for three propositions: (1) under the Interstate Commerce Act, primary jurisdiction to determine the reasonableness of rates lies with the Commission, see also Arizona Grocery Co. v. Atchison, T. & S. F. R. Co., 284 U. S. 370 , 284 U. S. 384 (1932); (2) federal court authority to reject Commission rate orders for whatever reason extends to the orders alone, and not to the rates themselves, cf. 28 U.S.C. § 2349(a) ("The court of appeals . . . has exclusive jurisdiction to make . . . a judgment determining the validity of, and enjoining; . . . the order of the agency") (emphasis added); (3) where there is a dispute about the appropriate rate, the equities favor allowing the carrier's rate to control pending decision by the Commission, since, under the Act, the shipper may receive reparations for overpayment, while the carrier
can never be made whole after underpayment. 49 U.S.C. § 11705(b)(3) (1976 ed., Supp. IV). [ Footnote 6 ] Cf. Atlantic Coast Line R. Co. v. Florida, 295 U. S. 301 (1935).
We can discern no basis to distinguish this case from Arrow, SCRAP, Wichita Board of Trade, and Consolidated Rail, supra. By entering an order declaring that the San Antonio I rate order was "revived" for the period June, 1980-May, 1981, the Court of Appeals did that which we have said a federal court may not do: i.e., freeze the rate that railroads charge shippers prior to a decision by the Commission as to what a reasonable rate should be. That approach undermines the Commission's ability to exercise the primary jurisdiction delegated to it by Congress to insure equitable and uniform rates. More important, the determination requires the railroads to accept a return that was considered temporary when it was approved in 1976, and "below a maximum reasonable rate" when it was modified in 1978. This result would be inequitable in the best of times, but the impact is particularly acute in a period of high inflation and changing regulatory standards. [ Footnote 7 ]
The claim is made that the Court of Appeals was powerless to achieve a different result because, under § 10704(a)(1), the only rate the railroads could legally charge was the rate prescribed by the Commission. Since the Commission prescribed a rate in San Antonio I, the argument is that this is the rate the railroads must charge. We disagree. San Antonio I was, by its terms, limited to "continue in full force and effect until . . . further order of the Commission," 355 I.C.C. at 418. Absent a contrary indication from the Commission, San Antonio II terminated the vitality of San Antonio I. [ Footnote 8 ]
Moreover, if the court was unsure about the continued vitality of San Antonio I, the more appropriate course would have been to remand to the Commission for explanation, rather than to undertake itself to construe the order, and, in so doing, to interfere with the Commission's primary jurisdiction, contrary to important congressional policies. [ Footnote 9 ]
The existence of a 1976 rate prescription does not require a result different from the result reached in Consolidated Rail. San Antonio II and III each, in turn, vacated the prescription which preceded it. In striking the orders in San Antonio II and III, the court's action operated to leave in effect the rates filed under the Commission's authority pending the Commission's redetermination of a reasonable rate and subject always to reparations to protect the shipper should the Commission find that these rates were too high. [ Footnote 10 ]
For convenience, we continue to refer to the rates as " San Antonio I ," " San Antonio II, " and " San Antonio III ." In actual fact, general rate increases, which are not in issue here, have taken effect significantly raising each of these rates. See Brief for Petitioners 9, n. 3.
San Antonio argue that the railroads' failure to petition for certiorari within 90 days after rehearing was denied on the June, 1980, judgment deprives this Court of jurisdiction. Because the June, 1981, decision "resolve[d] a genuine ambiguity in a judgment previously rendered" and dealt with a question which was not "plainly and properly settled with finality," FTC v. Minneapolis-Honeywell Regulator Co., 344 U. S. 206 , 344 U. S. 211 -212 (1952) (footnote omitted), we plainly have jurisdiction.
Another way in which the Court of Appeals might have minimized interference with congressional objectives would have been to construe its own opinion as vacating only the Commission's new rate calculations, and not the Commission's conclusion that the San Antonio I rate was too low. See 28 U.S.C. § 2349(a), allowing the court to enjoin or set aside "in whole or part, the order of the agency." Cf. Atchison, T. & S. F. R. Co. v. Wichita Board of Trade, 412 U. S. 800 , 412 U. S. 822 (1973).