Opinion ID: 406177
Heading Depth: 2
Heading Rank: 2

Heading: Rejection of Tariffs

Text: 26 The Carriers insist that the proposed regulation exceeds the Commission's statutory authority in that it provides for retroactive rejection of tariffs and creates a private right of action on behalf of shippers who are not necessarily injured by a missymbolized increase. The new policy permits the retroactive voiding of otherwise reasonable rates, the argument continues, thereby allowing unharmed shippers to reap the windfall of up to three years in overcharges because of a printer's oversight. Of course, the contrast between a potentially major penalty and a potentially minor transgression does not lead inevitably to a conclusion that regulatory authority has been usurped. Therefore, the Carriers undertake a meticulous dissection of 49 U.S.C. § 10762(e) in support of their contention that the Act does not authorize rejection of a tariff already in effect. 27 Section 10762(e) provides that (t)he Commission may reject a tariff submitted to it by a common carrier under this section if that tariff violates this section or regulation of the Commission carrying out this section. The Carriers first seize upon the phrase under this section, suggesting that since section 10762 generally governs the publishing and filing of proposed tariffs, the Commission can only reject a tariff submitted under (that) section while it is still proposed, i.e. ineffective. The argument is imaginative, but sophistic. Section 10762 does not confine itself to proposed tariffs; it prescribes general rules for the filing of tariffs, and they obviously must remain on file after going into effect. The section states when and how filed tariffs go into effect and requires that they remain open for inspection. Moreover, since section 10762 is the source of all tariff publication and filing requirements, any tariff, proposed or effective, must have been submitted to the Commission under this section. 28 The Carriers next focus on the word may and submit that Congress intended for the rejection process to be discretionary, not mandatory. We fail to see how this lends any weight to the Carriers' position, however. Certainly the statute makes rejection of any tariff an act of discretion, but the Commission's election to reject all tariffs containing unsymbolized rate increases remains wholly authorized by this broad grant of discretion. 29 Third, the Carriers suggest that the word reject connotes an immediate refusal to accept a tariff rather than a reservation of power to discard it at any time. Insisting that the Commission cannot reject a tariff after it has gone into effect, petitioners cite the following language from Delta Air Lines, Inc. v. CAB, 543 F.2d 247, 268 (D.C.Cir.1976): 30 Given the nature and purpose of the Board's rejection power under section 403, namely to prevent the filing of substantive nullities and tariffs suffering from technical or formal deficiencies, it is obvious why the Act does not permit rejection, as opposed to investigation, after a tariff becomes effective. As Judge Leventhal explained in Municipal Light Boards (v. FPC, 450 F.2d 1341 (D.C.Cir.1971) ), rejection is a ' peremptory form of response to filed tariffs which classically is used not to dispose of a matter on the merits but rather as a technique for calling on the filing party to put its papers in proper form and order.' We find implicit in Judge Leventhal's description a recognition that rejection is a regulatory device properly used only prior to a tariff's effective date. 31 The Carrier's reliance upon Delta Air Lines as controlling precedent, however, founders upon crucial factual differences between that case, which construed a section of the Federal Aviation Act (FAA), 3 and the case before us. 32 In Delta Air Lines, the D.C. Circuit considered a challenge by several air carriers to five orders of the Civil Aeronautics Board (CAB). The CAB had relied on section 403 of the FAA, 4 a provision similar to section 10762 of the Revised Interstate Commerce Act, to reject the airlines' properly filed tariffs on the grounds that the tariffs-which propounded the airlines' policies on carriage of hazardous cargo-were inconsistent with applicable federal air safety regulations. The Court of Appeals held that the CAB had improperly relied on section 403, a provision designed solely to set forth the procedural prerequisites for filing a tariff, in order to cancel the tariffs on substantive grounds. The Court concluded that the CAB could only challenge such substantive defects in effective tariffs by proceeding against them under section 1002 of the FAA, which empowers the CAB to determine the lawfulness of a new tariff only after providing notice and a hearing. 5 As the Court explained:Under the circumstances of this case rejection was not an alternative available to the Board under the Act. Absent a technical or formal defect relating to the filing, posting, or publication of a tariff, or a substantive defect that renders the tariff a substantive nullity, the Board can prevent a new, proposed tariff from becoming effective only by suspending it for a maximum period of 180 days, pending a hearing on its lawfulness. Contrary to the Board's determination, in petitioners' proposed tariffs we find no substantive deficiencies warranting rejection under section 403. 33 543 F.2d at 261 (emphasis original). 34 By contrast, the symbolization errors that form the basis for tariff rejection under the Commission's new regulation belong precisely to the type of technical or formal defect(s) relating to the filing, posting, or publication of a tariff that the Court noted as appropriate for rejection under section 403 of the FAA. The requirement that rate increases be symbolized on a filed tariff is not substantive; it does not raise difficult issues of economic cost and common carrier responsibility, see 543 F.2d at 247, that invariably require investigation and discussion as aids to a decision on the merits. It is merely a procedural regulation prescribing the form in which a tariff must be published and filed, and rejection is the remedy that agencies commonly are empowered to use against tariff filings that are obviously defective in form. See Municipal Light Boards v. FPC, 450 F.2d 1341, 1364 (D.C.Cir.1971), cert. denied, 405 U.S. 989, 92 S.Ct. 1251, 31 L.Ed.2d 445 (1972), (quoted in Delta Air Lines, supra) (rejection is appropriate where the filing is so deficient on its face that the agency may properly return it to the filing party without even awaiting a responsive filing by any other party in interest.). 35 Of course, the need for a symbol denoting a rate increase may not always be obvious. As petitioner NMFTA points out, see note 15, infra, ambiguities that arise during the process of amending rate classifications may create uncertainty as to whether the rate for a particular commodity has gone up or down. However, the Commission's new regulation, unlike the CAB procedure struck down in Delta Air Lines does not provide for peremptory rejection without a hearing. On the contrary, the Commission has clearly stated that disputes concerning improperly symbolized tariffs are subject to the formal complaint procedures of 49 U.S.C. § 11701, which entitle a carrier charged with violating the Act to notice of the investigation and an opportunity for a proceeding. 36 Fourth, and finally, the Carriers fall back on the familiar argument that Congress surely would have stated its intentions more clearly and vested a private right of enforcement in shippers had it meant for section 10762(e) to empower the Commission to void any tariff not in compliance with its technical requirements. This contention, at least as it bears upon the language of section 10762(e), is mystifying. Congress did create a private right of enforcement when it permitted shippers to sue for amounts charged that exceed the applicable rate ... contained in a tariff filed under Subchapter IV of Chapter 107 of this title. 49 U.S.C. § 11705(b)(1). As we shall see in Part C, infra, the question becomes whether a tariff lacking the necessary symbol should be considered as having been so filed. 37 As for the Carriers' wish for a clearer statement of Congressional intent, we can only reiterate that section 10762(e) authorizes the Commission to reject a tariff submitted to it by a common carrier under this section if that tariff violates this section or regulation of the Commission carrying out this section. Taken at face value, the statute would seem to empower the Commission to reject any tariff not in conformity with its regulations prescribing the form in which tariffs are to be filed. It mentions nothing about proposed or ineffective tariffs, nor does it place any time constraints on the power to reject. Turning petitioners' guns around, one might suggest that Congress surely would have limited the reach of section 10762(e) to ineffective tariffs had it intended such a result. 38 Nothing in the language of section 10762(e), therefore, indicates that the Commission may not reject a tariff that has gone into effect but has not been filed in the prescribed format. Moreover, the precedents cited by the Carriers suggest that the appropriateness of rejection as a remedy for a regulatory violation depends more upon the type of error being corrected (i.e., formal versus substantive) than upon the type of tariff being challenged (proposed versus effective). Missymbolization is a formal defect and an important one. Especially since the Commission intends to provide notice and a hearing on challenged tariffs, 6 we conclude that the Commission may reject improperly symbolized tariffs.