Opinion ID: 292748
Heading Depth: 2
Heading Rank: 3

Heading: The policy of the Act disallowing refunds.

Text: 105 We turn now to the carriers' contention that allowing restitution would contravene the policy of the Act prohibiting carriers from making refunds from published tariffs and that the only published tariffs are the ones from which the shippers seek restitution. This argument derives from 49 U.S.C. 317(b) which provides: 'No common carrier by motor vehicle    shall refund or remit in any manner or by any device, directly or indirectly, or through any agent or broker or otherwise, any portion of the rates, fares or charges so specified    in its tariffs.   ' Violation of this provision subjects the carrier to criminal sanctions under 322(a). In order to make this section applicable, the carriers must adopt the position, as indeed they do, that under no circumstances can a refund from published tariffs be awarded, even where the Commission has specifically ordered cancellation of existing rates and the carrier has filed to comply with this order. Alternatively, it is implied in several instances in the carriers' brief that the lower court's action validated collection of the published tariffs. Either position is manifestly untenable. 106 In their brief, the carriers argue the first position as follows: 107 '   The only lawful rates which may be collected by the carriers are those in duly published tariff schedules.    The schedules can be changed only upon publication of new schedules by the carriers. This is true even when the Commission orders a rate canceled.    Carrier compliance, not the Commission order, makes the new rate effective' (Carriers' Br., p. 24.) 'It is clear, as all here must agree, that the carrier initiates the rate, that the Commission may order the rate cancelled, but that such cancellation becomes effective, not by Commission order, but by carrier compliance with the Commission order. Failure of compliance is punishable, but does not render the rate unlawful.' (Carriers' Br., p. 45.) 108 Before discussing the law on this issue, we take note of certain practical implications of the carriers' position. The proposition that a carrier may wilfully ignore an order of the Commission and collect charges under a tariff that the Commission has ordered canceled without any liability to shippers is on its face highly questionable. As Justice Cardozo noted in the Atlantic Coast Line case, supra: 109 'The carrier was not at liberty to take the law into its own hands and refuse submission to the order without the sanction of a court. It would have exposed itself to suits and penalties, both criminal and civil, if it had followed such a path.    Obedience was owing while the order was in force.' 295 U.S. at 311, 55 S.Ct. at 717. 110 Furthermore, this proposition is totally inconsistent with the carriers' actions and contentions in all the proceedings prior to this appeal. Lest there be any misunderstanding, we emphasize here that we are not implying any 'estoppel' of the carriers to assert this proposition in this court, simply because of their prior position. But where a contention is prima facie doubtful, and where all parties to a proceeding, including the one now standing on the contention, have acted exactly opposite to the position now taken, that is strong evidence of what the legal situation is in fact. The record before us shows quite clearly that the carriers, the shippers, the Commission, the district judge who granted the temporary restraining order, and the Three-Judge Court which denied the temporary injunction all operated on the assumption that unless there was a stay of the Commission's order, the carriers would be unable to charge the rates in the tariff which was ordered canceled. The evidence in the record to this effect is voluminous, of which the following samples are indicative. 111 First of all, we note the repeated attempts, some of which were successful, of the carriers to obtain postponement of the Commission's order. If the carriers were free to ignore the Commission's order, there would seem to be no urgency in getting these postponements. Secondly, the motion for the temporary restraining order, filed concurrently with the complaint to set aside the Commission order, specifically alleged that if the order became effective they would suffer substantial loss of revenue and be required to offer transportation services for noncompensatory rates. Obviously, this could not occur if they could continue to charge the existing tariffs. The district judge, in granting the temporary restraining order, expressly found that 'unless enforcement (of the order)    is restrained by this Court, and the effective date thereof suspended, immediate and irreparable injury, loss and damage will result of (carriers).   ' Again, their could be no such injury if the carriers could ignore the order without having to make refunds. 112 In the judicial proceedings below, the carriers consistently maintained the position that unless they were awarded temporary relief, the Commission order was self-executing and they would suffer a loss of revenue. The following excerpts from the hearing to extend the temporary restraining order are indicative of the argument of carriers' counsel: 113 'We are talking about a tariff that    but for the temporary relief and very urgent relief obtained from this Court, would have been cancelled as of Monday of this week. 114 'Once this order becomes effective, this matter, this application (for review of the Commission order) is at an end. The order is self-executing.    'It is a perfectly lawful charge that has been made, and it continues lawful until for one reason or another the effective date of the Commission's order comes about.' 115 In granting the extension of the temporary restraining order, with the protection of a $300,000 bond, the district judge again did so on the specific finding that unless the order were restrained the carriers would suffer an immediate loss of revenue. 116 In the hearing before the Three-Judge District Court on the granting of the interlocutory injunction, the carriers again took the position that unless the relief were granted, the order was self-executing and they would not be able to charge the rates prescribed in the tariff. After spending some time arguing the merits of the Commission's order, carriers' counsel was urged by the Court to set to the immediate issue of the necessity for the preliminary injunction. He did so as follows: 117 'Mr. Evarts: The last sentence of the order says that on one day's notice the carrier shall publish new rates, and these proceedings shall be discontinued. There is nothing left. We have nothing to review because the Commission order has in effect executed itself.    And so the only way that we can get a review is to stay the effect of the Commission's order so that this Court can determine whether or not we were in fact denied a fair hearing by the Commission and if the Commission acted improperly. We have no other remedy. We have exhausted administrative remedy and without this order staying in effect we are denied judicial review which Congress says we have a right to.    118 'Judge Blackmun: I take it, Mr. Evarts, your mootness argument is that if the temporary injunction is denied, then the Commission's order is self-executing   . 119 'Mr. Evarts: That is one result that would follow.' 120 In denying the interlocutory injunction, the Three-Judge Court did so in part on the grounds that staying the Commission's order would cause considerable loss and injury to the general public. There could have been no such finding were it not the consensus of all the participants that the effect of the Commission's order was to prevent the carriers from charging the higher rates. 121 Were we to uphold the carriers' contention that no restitution is possible from these tariffs because they had not published any others, that holding would itself be a conclusive argument against the granting of any temporary restraining order against a Commission order like the one in this case. For if the carriers are free to charge the rates in a tariff ordered canceled, without any liability to shippers resulting, then there can be no showing of irreparable injury which is a necessary prerequisite to the granting of a temporary restraining order under 28 U.S.C. 2284. According to the provisions of this section a temporary restraining order may not be issued against the Commission, unless the district court makes 'a specific finding, based upon evidence submitted to such judge and identified by reference thereto, that specified irreparable damage will result if the order is not granted.' To the carriers' suggestion that the temporary restraining order is necessary in order to obtain an 'orderly review' (apparently in the absence of irreparable damage), this section provides a complete answer. It is not necessary. Equally explicit is 28 U.S.C. 2324, which provides that the pendency of an action to review a Commission order shall not of itself operate as a stay of that order. It is abundantly clear that 'orderly review' can be obtained without a stay of the Commission's order. A stay is justified only if there is irreparable damage, and there is no such damage in the instant case if the carrier may charge rates which have been ordered canceled without liability. 122 The case law on this issue reveals the fallacy of the carriers' argument. A rate which is filed with the Commission is not ipso facto a lawful rate. It is the applicable rate which the carrier must, under the compulsion of 317(b), charge to shippers in the regular course of business. The reason for the requirement is plain. Requiring payment of rates according to published tariffs without question reduces the possibility that carriers will prefer some shippers over others, keeps interstate traffic flowing speedily without interruptions for on-the-spot disputes over rates, and encourages the channelling of those rate disputes that do arise to the Commission and the courts for adjudication. But merely because the carrier is bound to charge the filed rate, it does not follow that he is necessarily entitled to keep it. 123 This distinction was made abundantly clear by the Supreme Court in the case of Arizona Grocery Co. v. Atchison, T. & S.F. Ry. Co., 284 U.S. 370, 52 S.Ct. 183, 76 L.Ed. 348 (1932): 124 'In order to render rates definite and certain, and to prevent discrimination and other abuses, the statute required the filing and publishing of tariffs specifying the rates adopted by the carrier, and made these the legal rates; that is, those which must be charged to all shippers alike. Any deviation from the published rate was declared a criminal offense, and also a civil wrong giving rise to an action for damages by the injured shipper. Although the Act thus created a legal rate, it did not abrogate, but expressly affirmed, the common-law duty to charge no more than a reasonable rate, and left upon the carrier the burden of conforming its charges to that standard. In other words, the legal rate was not made by the statute a lawful rate-- it was lawful only if it was reasonable. Under section 6, the shipper was bound to pay the legal rate; but, if he could show that it was unreasonable, he might recover reparation.' 284 U.S. at 384, 52 S.Ct. at 184. 125 Even where the Interstate Commerce Commission has conducted a full review of a filed rate, and refused to find it unlawful, it is not thereby converted into a lawful rate: 126 'The finding of the Commission that the proposed schedules 'are not shown to be    unlawful'.    has been held by the Commission not to constitute an approval or a prescription of the rates.    They stand only as carrier-made rates which, under the Commission's decisions, leaves them open to possible recovery of reparations.' Interstate Commerce Commission v. Inland Waterways Corp., 319 U.S. 671, 686-687, 63 S.Ct. 1296, 1305, 87 L.Ed. 1655 (1943). 127 Reparations proceedings inevitably involve a refund from published tariffs, regardless of any provisions in the Act preventing the carrier from making such refunds personally. Cf. National Motor Freight Traffic Assoc. v. United States, 268 F.Supp. 90 (D.C.1967), aff'd, 393 U.S. 18, 89 S.Ct. 49, 21 L.Ed.2d 19 (1968). 128 Just as published tariffs are not a bar to a refund by means of reparations proceedings if they are not lawful, so the published tariffs are not a bar to an appropriate judicial remedy if for some reason they are not lawful. Several cases illustrate this principle. Thus in Inland Steel Co. v. United States, 306 U.S. 153, 59 S.Ct. 415, 83 L.Ed. 557 (1939), shippers claimed advantage of a tariff which had been ordered set aside by the ICC, but which had remained in effect by virtue of a court order. The shippers contended that the statutory requirement that published tariffs be observed entitled them to the lower rates, even though those rates were in contravention of a Commission order. The Supreme Court answered this contention: 129 'The published tariff had contained the unlawful allowance solely because of the court's injunction. To sustain the contention of appellant that the provision for allowances in the published tariff limited the authority of the court to prevent their payment would be to clothe a published tariff, in existence solely by reason of equitable intervention, with an immunity from equity itself. The Interstate Commerce Act grants no such immunity. Cf. Merchants Warehouse Co. v. United States, 283 U.S. 501, 511, 51 S.Ct. 505, 75 L.Ed. 1227.' 306 U.S. at 159, 59 S.Ct. at 419. 130 Similarly, in Chicago, M., St. P. & P.R. Co. v. Alouette Peat Products, Ltd., 253 F.2d 449 (9th Cir. 1957), the court ordered the Commission to award to shippers the difference between a tariff which had not been published on the statutory 30-day notice, and the immediately prior published tariff, even though the Commission had refused to award reparations on the finding that the rates were not unjust or unreasonable. There the Commission had authorized the carriers to publish specified increased rates on five days notice. The carriers published rates higher than those authorized. When the shippers protested, the Commission found that the higher rates were justified and refused to order reparations. The Ninth Circuit expressly recognized that the new tariffs were the applicable ones which the carrier was bound to collect. But it also held that the carrier was not entitled to keep them where it had not complied with the ICC order. So here the carriers were entitled to collect the higher rates, but were not entitled to keep them when they have not complied with the ICC order. 131 Finally, the Accelerated Transport case, 227 F.Supp. 815, discussed above, recognizes the same principle. There the carriers charged rates in tariffs ordered canceled by the Commission while those tariffs were in effect during the period of the temporary restraining order. Following affirmance of the Commission's order and dissolution of the temporary restraining order, the Court ordered a refund (implemented as described in the discussion above) from the published tariffs. 132 For the proposition that the carriers may collect and retain charges from published tariffs which are in violation of a Commission order without liability, the carriers cite several cases, none of which support the contention and most of which support the exact opposite. One such case is Alouette Peat, discussed above. Another is Chase & Co., Inc. v. Atlantic Coast Line R. Co., 220 I.C.C. 398 (1937), and cases cited therein. Apparently the carriers are referring to the following language in the Commission's opinion: 133 'Rates filed with the Commission and published in the manner provided by law are the applicable rates even though they differ from the rates prescribed in an outstanding order of the Commission. Ralston Purina Co., Inc. v. Atlanta, B. & C.R. Co., 174 I.C.C. 722, by division 5; Dewey Portland Cement Co. v. Atchison, T. & S.F. Ry. Co., 185 I.C.C. 233, by division 2; Dewey Portland Cement Co. v. Atchison, T. & S.F. Ry. Co., 188 I.C.C. 97, by division 5; Texas Produce Co. v. Illinois Central R. Co., 209 I.C.C. 113, by division 3.' 220 I.C.C. at 400. 134 But in that case the Commission was only recognizing the rule emphasized here, that the published rate is the applicable rate which may be collected during shipment. It did not hold and did not purport to hold that the published applicable rate was the lawful rate which the carrier was entitled to keep. In every single case cited by the Commission, where a timely action was brought by the shippers, and where the carriers published tariffs which were found to have violated a Commission order, the Commission ordered reparations. In the Chase case itself, the Commission found that the carriers had complied with its order and refused reparations. 135 The carriers also cite Chicago, I. & L. Ry. Co. v. International Milling Co., 43 F.2d 93 (8th Cir.), cert. denied, 282 U.S. 885, 51 S.Ct. 89, 75 L.Ed. 781 (1930), decided by our Circuit. The case is of doubtful relevance to this situation, but to the extent that it is relevant it also is contrary to the carriers' position. There the carriers apparently had on file two tariffs applicable to the same shipment. The later filed tariff set lower rates than the earlier one. The carriers accepted a shipment at the lower rates and then sued to collect the higher rates in the earlier tariff, contending that it was the applicable tariff because they had not complied with a Commission rule requiring that a new tariff specifically state which prior tariffs were canceled. We held that the lower rate was applicable. There the carriers contended that they were entitled to collect a higher rate because they had not complied with a Commission rule. Here the carriers contend that they are entitled to keep a higher rate because they have not complied with a Commission order. In neither case is the contention sound. 136 Only a few words need be said concerning the suggestion that the carriers are entitled to keep the charges because the tariffs remained in effect because of the temporary restraining order. The language quoted from the Supreme Court's Inland Steel decision, supra, disposes of this contention, as do most of the cases discussed above relating to the general principles of restitution. See also Socony Mobile Oil Co. v. Brooklyn Union Gas Co., 299 F.2d 692 (5th Cir.), cert. denied, 371 U.S. 887, 83 S.Ct. 182, 9 L.Ed.2d 121, affirming Brooklyn Union Gas Co. v. Transcontinental Gas Pipe Line Corp., 201 F.Supp. 679 (S.D.Tex.1960).