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

Heading: T.I.M.E. Inc. v. United States and 304a

Text: 85 We turn now to the contention that restitution is precluded in this case because an exclusive remedy is provided by 49 U.S.C. 304a. This section of the Act was passed in 1965 in response to the Supreme Court's decision in T.I.M.E., Inc. v. United States, 359 U.S. 464, 79 S.Ct. 904, 3 L.Ed.2d 952 (1959), upon which the carriers also rely as precluding restitution. In order to understand fully this contention, it is necessary to examine the legislative history of Part II of the Interstate Commerce Act, 49 U.S.C. 301 et seq. 86 As originally passed in 1887, the Interstate Commerce Act established the Interstate Commerce Commission to regulate rail transportation. That statute is now Part I of the Act, 49 U.S.C. 1-300. In 1935, the powers of the Commission were significantly expanded to encompass the regulation of motor carriers by the passage of the Motor Carrier Act, now Part II of the Interstate Commerce Act. In many ways, the two sections of the Act were parallel, but in other ways significant to the instant problem they were substantially different. Rights and remedies of common carriers and their customers had been the subject of a considerable body of common law devised by the courts. One of the problems faced by the Congress was how to reconcile this common law doctrine with the new statutory regulatory scheme. Part I of the Act contained several sections providing for both judicial and administrative remedies for persons damaged by failure of the railroads to comply with the Act. 49 U.S.C. 8, 9, 13(1), 16. In contrast, Part II provided only a remedy for overcharges by a motor carrier, overcharges being charges in excess of the filed rates. 49 U.S.C. 304a. Both sections of the Act also contained savings clauses relating to common law remedies which differed considerably. 49 U.S.C. 22, relating to rail carriers provides that 'nothing in this chapter contained shall in any way abridge or alter the remedies now existing at common law or by statute, but the provisions of this act are in addition to such remedies.' On the other hand, the savings clause relating to motor carriers, 49 U.S.C. 316(j), is more restrictive: 'nothing in this section shall be held to extinguish any remedy or right not inconsistent herewith.' 87 For purposes of this discussion, the remedies with which we are most concerned are those for overcharges, reparations, and restitution. The differences between the three are significant. As noted above, overcharges are charges made by carriers in excess of the published tariffs, and both parts of the Act provided specific remedies for these. Tariffs under both sections of the Act are required to be just and reasonable. Reparation is a remedy for damages to the extent that the filed rates exceed a just and reasonable rate. Since primary jurisdiction to determine a just and reasonable rate rests with the Interstate Commerce Commission, any proceeding involving reparations, whether administrative or judicial, requires a finding of that Commission as to what a specific just and reasonable rate is. Under the remedial sections of Part I cited above, reparations may be recovered from rail carriers through either administrative or judicial proceedings. If the judicial avenue is chosen, a suit is filed in the district court, then there is a reference to the ICC for a determination of the just and reasonable rate, after which the suit is decided in accordance with this determination. No comparable provisions for reparations were originally included in the motor carrier part of the Act, but for some time it was assumed that the savings clause of 316(j) allowed a comparable judicial proceeding with respect to motor carriers. See 2 U.S.Code, Cong. & Adm.News, pp. 2936-2941 (1965). The T.I.M.E. case held that such a remedy was not preserved by the savings clause. This decision was countered by legislative action in 1965 when Congress amended the Act to provide a reparation remedy by judicial proceedings in 304a(2). 88 We turn now to an analysis of T.I.M.E., Inc. v. United States, 359 U.S. 464, 79 S.Ct. 904, 3 L.Ed.2d 952 (1959), and its effect on the survival of a restitutional remedy. Interpretation of the T.I.M.E. decision is not without difficulty; it was a 5 to 4 decision and both the majority and minority relied on the same case in reaching their conclusions-- Texas & Pacific R. Co. v. Abilene Cotton Oil Co., 204 U.S. 426, 27 S.Ct. 350, 51 L.Ed. 553 (1907). Further difficulties are encountered by the gloss put upon the T.I.M.E. decision in the case of Hewitt-Robins, Inc. v. Eastern Freight-ways, Inc., 371 U.S. 84, 83 S.Ct. 157, 9 L.Ed.2d 142 (1962), and Pensick & Gordon, Inc. v. California Motor Express, 371 U.S. 184, 83 S.Ct. 264, 9 L.Ed.2d 227 (1962). Mr. Justice Harlan, the author of the T.I.M.E. decision dissented with two other justices, in the latter two cases. 89 The Texas & Pacific R. Co. v. Abilene Cotton Oil Co. case involved a state court proceeding in which the state court determined that certain railroad rates, charged in accordance with tariffs filed with the ICC, were unreasonable and awarded reparations to shippers. The Supreme Court reversed, holding that the state court had no jurisdiction to determine the reasonableness of rates, since that was within the primary jurisdiction of the ICC. As pointed out by Mr. Justice Black in the T.I.M.E. dissent, following the Abilene decision, reparations proceedings were often brought in courts which referred the issue of reasonableness to the ICC and then decided the suit in accordance with the ICC finding. Nevertheless, he majority in T.I.M.E. read Abilene to hold that courts may not adjudicate issues which are within the primary jurisdiction of the ICC. (See Mr. Justice Harlan's dissent in Hewitt-Robins, 371 U.S. at 90, 83 S.Ct. 157. As to the availability of the reference procedure with respect to motor carriers, T.I.M.E. held that this could not be utilized because it would permit the ICC to accomplish indirectly what Congress had not given it the authority to accomplish directly. Although not specifically discussed by the majority, apparently the reference procedure in rail carrier cases is justified because the ICC has direct reparation authority. Also, the court pointed out that shippers had some protection in the motor carriers' rate-making process, because rates could be changed only on thirty days notice, shippers could protest the change and be heard in the subsequent administrative proceeding, and the ICC had authority to suspend the changes for up to seven months, by which time ordinarily a final determination would have been made. 90 Lower courts initially interpreted T.I.M.E. to mean that no common law remedies survived in motor carrier cases where primary jurisdiction rested with the ICC. Pensick & Gordon, Inc. v. California Motor Express, Ltd., 302 F.2d 391 (9th Cir. 1962); Hewitt-Robins, Inc. v. Eastern Freight-ways, Inc., 293 F.2d 205 (2nd Cir. 1961). But this notion was dispelled by subsequent Supreme Court decisions. In the review of the Hewitt-Robins case, 371 U.S. 84, 83 S.Ct. 157, 9 L.Ed.2d 142 (1962), involving a misrouting practice, the Court held that survival of a remedy against a carrier, even if the practice was within the primary jurisdiction of the ICC, depended solely on whether the remedy was consistent or inconsistent with the Act. T.I.M.E. was explained on the grounds that to allow reparations would interfere with the stability of the rate structure. No specific test of consistency was suggested, but the Court was influenced primarily by the following factors: 91 'Unlike rate making there is no statutory procedure by which routing practices may be challenged in advance of shipment.    92 '   The allowance here of a damage action nowise hampers the efficient administration of the Act, unlike the allowance of such an action as to unreasonable rates.    Moreover, the allowance of misrouting actions would have a healthy deterrent effect upon the utilization of misrouting practices in the motor carrier field, which in turn would minimize 'cease and desist' proceedings before the Commission. Finally, and not to be overlooked, the absence of any judicial remedy places the shipper entirely at the mercy of the carrier, contrary to the overriding purpose of the Act. The allowance of such actions would, on the contrary, given neither an unfair advantage.' 371 U.S. at 87-88, 83 S.Ct. at 159. 93 The result in Hewitt-Robins was to allow survival of a remedy for misrouting practices. The Pensick & Gordon case, supra, was vacated and remanded for reconsideration in light of Hewitt-Robins, 371 U.S. 1848 83 S.Ct. 157, 9 L.Ed.2d 142 (1962), and on reconsideration the Ninth Circuit allowed survival of a remedy against a motor carrier for refusal to render service. Pensick & Gordon, Inc. v. California Motor Express, 323 F.2d 769 (9th Cir. 1963), cert. denied, 375 U.S. 984, 84 S.Ct. 517, 11 L.Ed.2d 472 (1964). These cases do not dispose of the instant case, because we do have involved here a rate-making proceeding. But since the remedy at issue, restitution, is not the same as that involved in T.I.M.E., reparations, we must determine whether that remedy survives under 316(j), in light of the criteria to be distilled from T.I.M.E. and Hewitt-Robins. 94 According to our reading of these two cases, the following criteria determine the survival of a remedy: (1) Does application of the remedy involve adjudication of an issue within the primary jurisdiction of the Interstate Commerce Commission? (2) Does the remedy enable the Commission to accomplish indirectly what it cannot accomplish directly? (3) Does the remedy interfere with the stability of the rate structure? (4) Does the remedy otherwise hamper the efficient administration of the Act? We conclude that under none of these criteria is restitution precluded. 95 The key problem with respect to the first criterion is 'adjudication.' In a suit for reparation because of an unreasonable rate or one for damages because of unreasonable routing practices or for refusal to render services, the basic issue is obviously one within the primary jurisdiction of the Commission. But in awarding restitution under the facts of this case-- i.e. for the period of the temporary restraining order-- it is difficult to see that the court is adjudicating anything involving the primary jurisdiction of the Commission. We are of course determining the effect of a Commission order, but that does not involve a factual determination which brings the primary jurisdiction doctrine into play. Insofar as we decide that a proper construction of the Commission's order requires restitution, we are deciding a question of law to which the Commission's expertise does not reach. See 3 Davis, Administrative Law Treatise 19.02 at p. 8 (1958). Furthermore, the primary jurisdiction problem ordinarily arises only when a court is requested to act initially on a problem; but here we are proceeding on review of an order where the Commission has already acted. 3 Davis, Administrative Law Treatise 19.01. Thus it does not appear that this remedy is barred because of the primary jurisdiction of the ICC. 96 As to the second criterion, allowance of restitution would not permit the Commission to accomplish indirectly what it cannot accomplish directly. As we view the situation, to allow restitution merely gives effect to the Commission's order of cancellation, and clearly this order was within its power. 97 Whether allowing restitution would interfere with the stability of the rate structure is a somewhat more difficult problem. It is not at all clear what 'interference' the Supreme Court saw in the reparation remedy in the T.I.M.E. case, especially since it was exactly that remedy which was restored to the statute in the Congressional amendment to 304a. In any event, since the carriers concede that the remedy under 304a could be pursued in this case, there would seem to be no more interference in allowing restitution. The stability of the ratemaking process which the court referred to in T.I.M.E. involved the process of filing rates, publishing, giving notice, an opportunity for protest, holding hearings and issuing a final order. Here that whole process has been completed. Where either party then seeks review of that process, and particularly where a stay of the Commission order is granted, there is necessarily a certain amount of interference. The problem which the court faces then is to determine how that interference can be kept to a minimum. The solution to the problem is to accord sufficient remedies to both parties to insure protection upon the ultimate resolution of the agency action. Thus, in appropriate cases, the correlative remedy to the temporary restraining order is a bond and restitution. 98 The final criterion to be investigated is whether allowance of the remedy interferes with the efficient administration of the Act. Since the carriers admit that the 304a remedy is available, the real question here is whether remitting the shippers to that remedy is preferable to allowing restitution. We see numerous reasons for preferring restitution under the circumstances of this case. 99 First of all, permitting restitution will avoid a multiplicity of suits in a case such as this where it is ancillary to a suit instituted by the carriers. Many, if not most, of the issues to be decided in the carriers' review proceeding would be determinative of the issues involved in a subsequent proceeding for either 'reparations' or restitution-- e.g., the validity of the Commission's order, the validity of the rates, the amount of the recovery. To remit the shippers to the 304a remedy would require the filing of a new lawsuit, a reference to the Commission, and subsequent judicial proceedings on the Commission's findings. 100 Secondly, to require this procedure in a case such as this would require double litigation before the Commission of the same rates-- once in the challenge to the tariff and again in he reparation proceeding. This seems to us to be an unwarranted burden on the Commission's resources. The apparent purpose of the reparation remedy was to allow shippers to recover damages from rates which had been filed with the Commission, but which were for some reason unlawful and which had not been subject to the ordinary processes of agency review. Where those rates have gone through the proper agency channels, and where the Commission has finally acted, it would seem more efficient to allow any proper judicial remedies upon subsequent judicial review of that action. 101 Thirdly, to require the reparation remedy would result in depriving the shippers of just those protections in the ratemaking process which the Supreme Court found so important in the T.I.M.E. case. Here the shippers have successfully challenged the carriers' rates in the administrative proceeding. In the course of that proceeding, they had to pay the higher rates which were ultimately ordered canceled for over 18 months. The carriers failed to comply with the Commission's order. To hold that the shippers have no remedy for this failure of compliance, except to litigate the whole issue all over again, would make a mockery of the statutory process for challenging carrier-made rates. 102 Finally, allowing restitution in this case would have the advantage of protecting not only the instant parties to the litigation, but also to some extent the general public. It is reasonably certain that many members of the general shipping public, who ultimately bore the burden of the higher rates in force by virtue of the temporary restraining order, will be unable for practical reasons to recover these charges. To the extent that allowing restitution in cases where the carrier fails to successfully prosecute his challenge to the administrative order will deter challenges of doubtful merit, the purposes of the Act in protecting the general public will be served. 103 We conclude that the principles of T.I.M.E. do not preclude restitution on this case, nor is 304a an exclusive remedy. 104