Opinion ID: 406177
Heading Depth: 2
Heading Rank: 3

Heading: Retroactive Voidance

Text: 39 Having reached the conclusion that the Commission may reject improperly symbolized tariffs, we must immediately concede to an impression that the Commission's power of rejection does not lie at the heart of this dispute. 7 The Carrier's own proposals for sanctions against symbolization errors-notably fines-indicate that their primary concern is not to escape all responsibility for their errors. If the Commission were seeking to reject improperly symbolized tariffs merely by imposing a fine or notifying the offending carrier that it could no longer collect on the defective tariff until it filed a proper substitute, it appears likely that the Commission's power to reject such tariffs would have gone unchallenged. What deeply disturbs the Carriers is the potential for retroactive liability that accompanies rejection. Consequently, they insist that section 10762, however we construe its provision for rejection, certainly does not contemplate retroactive overcharge liability for rates which are reasonable but which were filed originally without the required symbol. To this argument we now turn. 40 As petitioners enthusiastically point out, the Commission's new policy announcing the retroactive invalidity of improperly published tariffs carrying with it the retroactive liability to shippers moves away from an impressive list of prior decisions by the Commission. Only recently the Eleventh Circuit, in reviewing a separate but very similar order by the Commission, 8 observed that (i)n a long line of cases where shippers brought formal complaints of overcharge on grounds that the current tariff had been improperly established, the Commission held that the applicability of tariffs or rates does not depend upon strict compliance with the Commissions' publication rules. Southern Motor Carriers Rate Conference v. United States, 676 F.2d 1374 at 1379 (11th Cir. 1982) (amended opinion) (citations omitted). 41 Yet, an agency's interpretations of practices under a statute are not carved in stone.(T)he Commission, faced with new developments or in light of reconsideration of the relevant facts and its mandate, may alter its past interpretation and overturn past administrative rulings and practice.... (T)his kind of flexibility and adaptability to changing needs and patterns of transportation is an essential part of the office of a regulatory agency. Regulatory agencies do not establish rules of conduct to last forever; they are supposed, within the limits of the law and of fair and prudent administration, to adapt their rules and practices to the Nation's needs in a volatile, changing economy. They are neither required nor supposed to regulate the present and the future within the inflexible limits of yesterday. 42 American Trucking Associations, Inc. v. Atchison, Topeka & Santa Fe Railway, 387 U.S. 397, 416, 87 S.Ct. 1608, 1618, 18 L.Ed.2d 847 (1967). Of course, the flexibility permitted by this approach, does not permit us blithely to accommodate each new gloss placed by an agency upon its enabling legislation without troubling ourselves to inquire whether the revised interpretation, ruling, or practice remains plausibly within the authority conferred by statute. Our scrutiny of the Commission's new posture under section 10762, however, has led us to conclude that the challenged regulation is, if anything, more clearly authorized by the Act than was the Commission's former policy of denying overcharge liability for improperly symbolized tariffs. 43 Shobe, Inc. v. Bowman Transportation, Inc., 350 I.C.C. 664 (1975), is the most recent in the line of cases cited in Southern Motors, supra, which state the Commission's former policy. The defendant carrier in Shobe published a tariff without the required symbol. When sued for overcharges by a shipper who had not discovered the defect in time to protest under the thirty-day rule, the carrier argued that mere publishing errors do not give rise to overcharge liability. The Administrative Law Judge (ALJ) disagreed, citing Chicago, Milwaukee, St. Paul & Pacific Railroad v. Alouette Peat Products, Ltd., 253 F.2d 449 (9th Cir. 1957). Since the Alouette Court had held that a carrier's violation of the thirty-day notice requirement rendered the change rate unlawful, void, and uncollectible, the ALJ reasoned that a carrier's violation of the Commission's publication requirements warranted the same penalty. 44 The Commission disagreed. It did not explain its refusal to impose retroactive liability for a defectively published tariff as an act of discretion, however. The Commission justified its policy by reading into the Act a curious distinction between statutory violations, for which the Act permitted retroactive voidance, and regulatory defects, for which it supposedly did not. 45 The distinction relied upon a subtle misreading of the Interstate Commerce Act as it read in 1975. Section 217 of the unrevised Act, 49 Stat. 560, then codified as 49 U.S.C. § 317, contained four subsections. Subsection 317(a) required the filing of tariffs, authorized the promulgation of publishing regulations, and authorized the Commission to reject any tariff filed with it which is not in consonance with this section and with such regulations (emphasis added). In short, it included rough counterparts to subsections 10762(a)(1), (a)(2), and (e) of the current codification. Subsection 317(c) contained the thirty-day notice requirement that now appears in subsection 10762(c)(3). 46 The Commission read the language italicized above as confining the rejection remedy to violations of section 317(a), which was, of course, actually a subsection. Having accomplished this semantic manuever, the opinion reasoned that while violations of the express statutory notice requirement set forth in subsection 317(c) justified the overcharge liability established in Alouette, that remedy could not be transplanted to the self-contained hothouse of section 317(a) and its regulatory offshoots. Dismissing the ALJ's assumption that the symbolization rules are equivalent to the thirty-day notice requirement and thus that a change made in the absence of a proper symbol was void, the Commission explained that the Alouette courtfound that the tariff, while not filed in conformity with the law, was nonetheless the applicable tariff, and the rates contained in the tariff had to be collected by the carrier and paid by the shipper. The decision thus did not hold that the tariff was void but, rather, that the rates were unlawful because not made effective in the proper manner. Moreover, the Alouette decision was based on a statutory violation for which there was no specific administrative remedy. The remedy for a regulatory violation, rejection by the Commission, is exclusive, as is the penalty: the voiding of the tariff. 47 350 I.C.C. at 670 (emphasis original). 48 The conclusion reached in Shobe is unsatisfactory for at least two reasons. First, the Commission lacked persuasiveness in arguing that rejection was a specific administrative remedy applicable only to violations of publication regulations issued pursuant to section 317(a). There is no reason to suppose that the phrase in consonance with this section referred to anything other than the entirety of section 317. Although we customarily refer to any fragment of a statute as a section-hence our prior reference to section 10762(e)-Congressional draftsmen must be more careful. Drafters of the Act were familiar with the distinction between a section and a subsection; 9 certainly they would have used the right word had they intended to restrict the possibility of rejection to the regulatory provisions authorized by the first paragraph of section 317. 49 The structure of the Revised Act supports this criticism of Shobe. Congress clearly intended the new codification to effect no substantive changes in the law. 10 Yet the Commission's rejection authority under subsection 10762(e) of the Revised Act expressly extends to tariffs that violate this section or regulation of the Commission carrying out this section (emphasis added). In view of the presumptive continuity between the old and new codifications, then, the Commission has always had the authority to reject tariffs containing regulatory violations. 50 Second, Alouette itself drew no distinction between statutory and regulatory defects as grounds for holding a tariff unlawful and, therefore, retroactively actionable for overcharges. Rather, the court differentiated only between an applicable rate-that is, one that has been accepted and filed by the Commission and is, therefore, binding on both shippers and carriers-and a lawful rate-one filed in accordance with the Act. The Court noted that a shipper must always pay the applicable rate, but can recover overcharges if that rate proves to have been unlawful at the time of payment. 51 While the acceptance for filing by the Commission of the rate makes that rate applicable, it in no way cures any defect which may be present either in the establishment or the reasonableness of the rate.... A rate which is in fact unreasonable is not made reasonable by the mere act of filing, nor does the mere act of filing make lawful a publication not made in accordance with the provisions of the Act. Filing does not constitute publication, or cure a defective publication. 253 F.2d at 455-56 (emphasis added). 11 52 Nothing in the Commission's contrary pronouncements prior to 1978, and certainly nothing in Alouette, convinces us that a tariff not in accordance with the publication regulations authorized under section 10762(b)(1) of the Revised Act is any less unlawful than one published in contravention of section 10762(c)(3)'s notice requirement. The logic behind Alouette is that a tariff not filed and published in accordance with statutory or regulatory provisions is not lawfully on file with the Commission. 12 Just because the Commission does not immediately notice the defect and accepts the defective tariff does not mean that the tariff, through this mischance, becomes lawful. 13 53 Perhaps the best expression of the applicable/lawful distinction occurs in a comparatively recent decision of the Commission, H. J. Baker Bros., Inc.-Statute of Limitations, 357 I.C.C. 640 (1978). In H. J. Baker Bros., the carrier had charged an excessive rate, violated the thirty-day notice requirement, and failed to symbolize the rate increase. Finding overcharge claims to be the appropriate remedy, the Commission explained as follows: 54 The tariffs on file, although unlawful, specified the applicable rate which the shippers were bound to pay, pursuant to the act. The act requires strict observance of the tariff regardless of the inherent unlawfulness of the rates specified. However, when and if the rates are shown to be unlawful for any reason, shippers are entitled to recover the difference between what they paid under the applicable tariff, and what is subsequently determined to be the lawful rate. Since the applicable rate cannot be deemed the lawful rate merely by virtue of being on file with the Commission, the argument of the Canadian railroads that the rates assessed were the lawful rates is without merit.... 55 ... Rates and charges unlawfully established whether in the method of filing or contrary to specific commission orders are not due the carrier. 56 375 I.C.C. at 644-45 (emphasis added). We conclude that tariffs not exhibiting the required symbols are not lawfully on file. In turn, shippers may recover what has been paid pursuant to tariffs not lawfully on file because such charges are not due the carrier. 57 One difficulty remains. The cases we have cited on this point relied on the definition of overcharges contained in the pre-1978 version of the Act. Section 16(3)(g) of the unrevised statute described overcharges as charges for transportation services in excess of those applicable thereto under the tariffs lawfully on file with the Commission. Obviously, this wording gave rise to the construction, developed in Alouette and H. J. Baker Bros., that a rate must be both applicable and included in a tariff lawfully on file in order to be fully collectible. Section 11705(b)(1) of the Revised Act, however, replaced section 16(3)(g) with the following wording: 58 A common carrier providing transportation or service subject to the jurisdiction of the Commission under Chapter 105 of this title is liable to a person for amounts charged that exceed the applicable rate for transportation or service contained in a tariff filed under Subchapter IV of Chapter 107 of this title. 59 In eliminating the words lawfully on file with the Commission, did Congress purposefully extinguish the applicable/lawful distinction discussed above? 60 We are convinced that it did not. First, the legislative history of the Revised Act clearly states that the 1978 revisions wrought no substantive change in the law: 61 Like other codifications undertaken to enact into positive law all titles of the United States Code, this bill makes no substantive change in the law. It is sometimes feared that mere changes in terminology and style will result in changes in substance or impair the precedent value of earlier judicial decisions and other interpretations. This fear might have some weight if this were the usual kind of amendatory legislation where it can be inferred that a change of language is intended to change substance. In a codification statute, however, the courts uphold the contrary presumption: the statute is intended to remain substantively unchanged. 62 H.R.Rep. No. 95-1395, 95th Cong., 2d Sess. 9, reprinted in (1978) U.S.Code Cong. & Admin.News 3009, 3018. 14 63 Moreover, the revised wording still creates overcharge liability for charges that exceed the rate contained in a tariff filed under Subchapter IV of Chapter 107 of this title. Since a well accepted meaning of under as used in legal writings is in accordance with, section 11705(b)(1) remains subject to the interpretation that a rate increase is not collectible unless it appears in a tariff filed in accordance with section 10762 (which is part of Subchapter IV, Chapter 107) and the regulations authorized by subsection 10762(b)(1). 64