Opinion ID: 444114
Heading Depth: 3
Heading Rank: 2

Heading: The Exhaustion Requirement in the Staggers Act Setting

Text: 18 In many cases administrative remedies must be exhausted if litigants are to gain judicial review in federal courts, although that is not a hard and fast rule, even for review by courts. In any event, however, and contrary to the contentions of Utah Power, exhaustion by rehearing is not required in this case. We find several reasons for concluding that the railroads were not compelled to exhaust the state agency rehearing option prior to seeking ICC review. 19 First, to the extent that local law controls the issue, the Utah statute does not impose any firm exhaustion requirement. The applicable Utah statute, Utah Code Ann. Sec. 54-7-15 (1953) as amended, 7 and Rule 19 8 of the Utah Commission indicate that those rehearing provisions are only a prerequisite for further court action. 20 First, the topical heading of the statute so states: Utah Code Ann. Sec. 54-7-15: 21 Review or rehearing by commission--Application--Procedure--Prerequisite to court action. 9 22 1981 Utah Laws 1126, 1132, ch. 215, Sec. 5. The topical heading [p]rerequisite to court action  (emphasis added) indicates the intent of the legislature, because the heading was part of the Act as enacted by the Utah Legislature and was not inserted by the revisor, codifier, or publisher. See id. Consistently, the body of the Utah statute also refers to court action. See supra, n. 7. A legal action most frequently refers to a suit in court. At best legal action is ambiguous; interpreting it in line with the topical heading and the express reference to proceedings in any court, we conclude that the Utah Act relates the rehearing only to subsequent court action[s]. Quite obviously, an ICC proceeding is not a court action. Also, the Utah statute is permissive rather than mandatory, providing that a party affected by an order of the Commission may apply [to the Utah Commission] for review or rehearing. In addition, failure timely to apply for rehearing does not, under decisional Utah law, preclude a subsequent administrative proceeding that makes a substantive attack on a Commission decision. Bowen Trucking, Inc. v. Public Service Commission, 559 P.2d 954, 956 (Utah 1977) (citing Sale v. Railroad Commission, 15 Cal.2d 612, 104 P.2d 38, 40-41 (1940)). The terms of the Utah statute thus do not require an application for rehearing as an absolute precondition even to state administrative proceedings. 23 Nor does Rule 19 10 of the Rules of Practice of the Utah Commission create the asserted exhaustion requirement. The relevant subsections of the Rule only provide time limits for filing rehearing petitions with the Utah Commission and petitions for writs of certiorari to the Utah Supreme Court. Such petitions control access to the Utah Supreme Court, not the ICC. In addition, consistent with the Utah statute, the Utah Commission's topical heading to subsection (f) of the Rule is entitled Judicial Review. In sum, neither the Utah Legislature in the Act, nor the Utah Commission in its regulations, ever intended to prescribe the jurisdiction of the ICC. 24 Furthermore, it is important to recognize that Utah has only such limited authority to limit the jurisdiction of the federal Commission as the Staggers Act may attach to its statutory and regulatory procedures. While in some instances the Utah statutes and agency rules might be construed under federal law to lead to circumstances in which the ICC might refuse to take jurisdiction, that jurisdiction in the last analysis is dependent on federal statutes, regulations and decisional law. Under federal law and the ICC's practice, petitioners to the ICC from decisions of state agencies are not necessarily required to exhaust state administrative remedies. 25 On the applicability of exhaustion here, Utah Power is confused. When a party in federal court seeks judicial review of the decision of an administrative agency it is well established, subject to some exceptions, that the party must generally exhaust any administrative remedy available to it. See, e.g., Myers v. Bethlehem Corp., 303 U.S. 41, 50-52, 58 S.Ct. 459, 463-465, 82 L.Ed. 638 (1938) (citing cases). This rule has been applied to attempts to invoke the powers of the courts against state administrative agencies from early on. See Pittsburgh, Cincinnati, Chicago & St. Louis Railway Co. v. Board of Public Works, 172 U.S. 32, 38, 19 S.Ct. 90, 92, 43 L.Ed. 354 (1898). The requirement originated out of considerations of equity jurisdiction, in which the party seeking an injunction against the decision of a state agency without availing himself of an opportunity to apply for rehearing was deemed to have an adequate remedy at law: No court of equity will ... allow its injunction to issue [unless the petitioner] has no adequate remedy by the ordinary processes of the law. Id. 26 In contradistinction, though, when an affected party attempts to invoke the jurisdiction of a federal administrative agency to review a decision of a state administrative agency the same limitations stemming from the limits on a court's equity jurisdiction or authority are not applicable in the absence of statute, regulation, or decisional law. In such cases, the jurisdiction of the federal agency, and thus the application of the exhaustion doctrine, turn on the particular statute and its legislative history. In cases where the statute, or regulations thereunder, do not require exhaustion, courts may look to the statutory role of the state agency and tailor the exhaustion rule to fit the role assigned to that state agency. See Patsy v. Board of Regents, 457 U.S. 496, 502 n. 4, 102 S.Ct. 2557, 2561 n. 4, 73 L.Ed.2d 172 (1982); State of Texas v. United States, 730 F.2d 409, 414 (5th Cir.1984) (ICC review under section 11501(c) of the Staggers Act not limited to final decisions of state agencies). 27 The applicable federal statute here provides that: 28 Any rail carrier ... may petition the [ICC] to review the decision of any State authority, in any administrative proceeding in which the lawfulness of an intrastate rate ... is determined, on the grounds that the standards and procedures applied by the State were not in accordance with the provisions of [the Staggers Act]. 29 49 U.S.C. Sec. 11501(c) (emphasis added). The decision of the Utah Commission is a decision of a state authority, and the Rio Grande seeks ICC review of that decision without having applied for rehearing. The federal statute does not specifically limit the jurisdiction of the ICC to final decisions of state agencies or require exhaustion of administrative remedies. 11 Exhausting available rehearing options would often be consistent with sound administration, would in many instances avoid unnecessary litigation, would allow deference to state administrative expertise, and would recognize administrative autonomy in proper cases. Nothing in the Staggers Act, however, specifically requires complete exhaustion of available state administrative rehearing remedies as a precondition to ICC review, and the ICC itself has imposed no such requirement. See State of Texas, supra, 730 F.2d at 409. In our view, any overly rigid exhaustion requirement would be sharply inconsistent with one of the central purposes of the Staggers Act--facilitating swift federal review of final decisions by state commissions. 30 While the ICC may in some cases apply reasonable exhaustion requirements, we cannot fault its decision to review this state administrative decision as presented. The extensive consideration of the issues by the Utah Commission, and the vigorous defense before this court by the Utah Commission of its very detailed decision, adopting all the arguments advanced by Utah Power, 12 indicate that any request for rehearing would be denied. This case thus comes within the well-recognized exception to the exhaustion requirement that does not require a party to engage in a futile proceeding. Where application for rehearing is a mere formality in an administrative proceeding, judicial relief may be sought without exhausting such procedure if the order challenged is definitive and deals with the merits in controversy. Levers v. Anderson, 326 U.S. 219, 66 S.Ct. 72, 90 L.Ed. 26 (1945); see Athlone Industries, Inc. v. Consumer Product Safety Commission, 707 F.2d 1485, 1488-89 (D.C.Cir.1983) (When the prior position of the agency indicates that an application for rehearing would be futile, it is not necessary to exhaust administrative remedies before seeking judicial relief); Etelson v. Office of Personnel Management, 684 F.2d 918, 923 (D.C.Cir.1982) (Two strong factors supporting a conclusion that a litigant need not exhaust administrative remedies are that a form of his claim was raised before the agency and that the agency has demonstrated its disinclination to respond favorably to [the] claim.). Any administrative purposes favoring exhaustion generally were satisfied here when the Utah Commission considered the matter in extenso, made its ruling, stated the reasons for its decision, and adhered to them without deviation in this proceeding. As in State of Texas, supra, exhaustion here would have been futile and could have served no useful purpose. 730 F.2d at 414. In conclusion, Utah Power will not be allowed to exalt what is at best an ambiguous rehearing requirement into an absolute bar to ICC jurisdiction in this case. 13 B. The ICC's Alleged Delay in Serving its Decision 31 The Staggers Act provides that when an appeal from a state agency decision is taken to the ICC, [t]he Commission shall take final action on any such petition within 30 days after the date it is received. 49 U.S.C. Sec. 11501(c). Utah Power argues that because the date of service was not within 30 days of the filing of the completed petition, that deprived the ICC of the right to decide the merits of the petition. We disagree with the factual assumptions upon which Utah Power bases its contention, and necessarily therefore with its conclusion. In addition, we could not support such an extreme sanction. 32 In this case, the railroads filed an incomplete petition on January 19, 1983. According to the briefs, the incompleteness was corrected by the subsequent filing of one additional page by mail on January 28, 1983. The ICC's official record indicates it was filed by the railroads, by letter, on 2/2/83 (JA 03). Furthermore, the Record before the Utah [Public Service Commission] was not filed until 2/8/83 (JA 03). The ICC's decision is dated February 25, 1983, but it was not served until March 2, 1983 (JA 04). Upon these facts, we must concur with the ICC that time did not start to run against the ICC until the complete petition was filed, on January 28 at the earliest. It would be folly to start the running of the prescribed time for decision before a complete petition is filed. 33 As to when the period ended, Utah Power points to 49 U.S.C. Sec. 10327(i) of the Staggers Act, which provides that an action of the Commission ... is final on the date on which it is served .... In response, the ICC relies on Union Pacific Railroad v. United States, 637 F.2d 764 (10th Cir.1981). Faced with a closely analogous situation, the Tenth Circuit ruled that section 10327(i) relates to the time limit for judicial review, not for the decision, and that the date the decision was entered by the Commission was the date to be considered for the purposes of the 30 day limitation set by section 11501(c). Id. at 767. Appellant urges that the Tenth Circuit case was wrong. Brief for Utah Power at 22. We disagree. We too interpret section 10327(i) only to provide the date when time will start running for the purpose of computing the time limits for rehearing and review. Accordingly, the ICC having rendered its decision on February 25, 1983 (JA 584), it ruled before expiration of the allotted statutory period. 34 Utah Power hypothesizes that if the court approves of this delay then the ICC could get away with delays of 50, 75, or 100 days ... Brief for Utah Power at 23. Delay to that extent is not before us, and we are not disposed to render a curbstone opinion thereon. We rule only that, where the ICC renders a decision that is within the statutory period, the statute is satisfied, and subsequent minor delay in serving the decision does not negate the timeliness of the decision. 14 35