Court Opinion

ID: 7851072
Source: CourtListenerOpinion
Date Created: 2022-09-08 17:28:56.512472+00
Date Added: 2024-06-11T16:29:09.350315
License: Public Domain

GINSBURG, Circuit Judge,
concurring statement on exhaustion of administrative remedies, in which Circuit Judge WILKEY joins:
I concur in all of Judge MacKinnon’s able opinion except Part II.A. As to the issue analyzed in that section, I state my position separately.
In his discussion under the heading “Exhaustion of Administrative Remedies,” Judge MacKinnon ultimately settles on the view that the futility exception applies in this case. See supra p. 729. My view of the matter is less complex. I see no need to consider “exceptions”; the Railroads, I think it clear, confronted no relevant exhaustion rule in the first place. I write separately to describe the straighter path I follow-on this threshold issue.
As an opening argument, Utah Power & Light Co. (UPL) asserts that “[t]he ICC lacked jurisdiction to review the Utah PSC’s Decision because [the Railroads] failed to exhaust their remedies before the Public Service Commission of Utah.” Brief of Petitioner at 12. Specifically, UPL claims that, for want of a rehearing petition filed with the Utah PSC, we must reverse the ICC’s decision. The Railroads’ failure to ask the PSC to reconsider its decision, UPL maintains, left the ICC powerless to proceed. In support of this alleged jurisdictional lockout, UPL cites solely provisions of Utah law: Utah Code Ann. § 54-7-151 and Rule 19 of the Rules of Practice of the Utah PSC.2 This is topsyturvy argument.
The ICC’s jurisdiction is not Utah’s to give or take away. And exhaustion requirements are imposed by the legislature that controls the reviewing authority whose jurisdiction is invoked, or by a tribunal superior to that authority, or by the authority itself, not by the forum of first resort whose determinations are subject to review. Concretely, Congress, not Utah’s *308lawmakers, determines the ICC’s jurisdiction. Congress again, and sometimes the federal courts that review ICC decisions or the ICC itself, may delineate avenues complainants must exhaust before approaching the ICC. But it is not Utah’s prerogative, or that of any of its sister states, to dictate rules on recourse to the ICC.3
UPL’s inversion of state/federal lines of authority has occasioned some confusion in the parties’ briefing. Two examples should suffice to clear the air on this fundamental matter. A person in state custody may petition a federal court for a writ of habeas corpus, 28 U.S.C. § 2254 (1982), but he or she may not do so without exhausting state court remedies. Rose v. Lundy, 455 U.S. 509, 102 S.Ct. 1198, 71 L.Ed.2d 379 (1982). A person suing a state official in a federal court for an alleged deprivation of a federal right, pursuant to 42 U.S.C. § 1983, need not exhaust or even begin to pursue state remedies. Patsy v. Board of Regents, 457 U.S. 496, 102 S.Ct. 2557, 73 L.Ed.2d 172 (1982). In both cases, federal law determines the jurisdiction of the federal forum and the existence vel non of an exhaustion requirement. A state favoring a state remedy exhaustion requirement before a federal forum proceeds may so indicate by the vote of its representatives in Congress.4 A vote in the state’s own legislature for exhaustion of state remedies as a precondition to a challenge in a federal forum, however, would be unavailing.
In the matter at hand, the ICC entertained the Railroads’ petition pursuant to the authority (jurisdiction) conferred upon the Commission by Congress. The jurisdiction-conferring provision, 49 U.S.C. § 11.501(c), reads in pertinent part: “Any rail carrier ... may petition the Commission to review the decision of any State authority, in any administrative proceeding in which the lawfulness of an intrastate rate ... is determined.” The Utah PSC rendered a decision adverse to the Railroads in an administrative proceeding to determine the lawfulness of an intrastate rate. The Railroads, in compliance with ICC procedure, petitioned the Commission to review that decision. Congress required no more. See Texas v. United States, 730 F.2d 409 (5th Cir.1984). The federal legislature said nothing of applying for rehearing before the PSC or pursuing any other state avenue for relief from the PSC’s decision.
Nor has any federal court, in reviewing an ICC decision, ever created an “exhaust state remedies” or “exhaust state remedies further” requirement. See Florida v. United States, 282 U.S. 194, 51 S.Ct. 119, 75 L.Ed. 291 (1931); North Carolina v. ICC, 347 F.Supp. 103 (E.D.N.C.1972), aff'd mem., 410 U.S. 919, 93 S.Ct. 1362, 35 L.Ed.2d 582 (1973); North Carolina v. United States, 128 F.Supp. 718, 724 (E.D. *309N.C.) (assertion that ICC is “without jurisdiction to order increase of intrastate rates until remedies under state law had been exhausted” is “[c]ertainly ... without merit”; “[t]he Commission in discharging the duties imposed upon it by Congress may not be delayed by proceedings before state courts or commissions”), aff'd mem., 350 U.S. 805, 76 S.Ct. 45, 100 L.Ed. 723 (1955).5 The federal courts’ refusal to impose on the ICC’s administrative authority a total-exhaustion-of-state-remedies requirement is hardly surprising. It is true that, as a matter of federal law, federal courts have generally denied requests to enjoin the enforcement of state administrative decisions where the grievant has not pursued adequate and available state administrative remedies. See C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 4233 (1978). That form of temporary abstention, however, is inapposite to ICC oversight of intrastate rates. Congress considered placing the entire regulation of intrastate rates in the hands of the ICC. See H.R.Rep. No. 1035, 96th Cong., 2d Sess. 61, reprinted in 1980 U.S.Code Cong. & Ad.News 3978, 4006; 126 Cong.Rec. 18,298 (1980). It ultimately chose to give the ICC a unique, expedited oversight role in establishing intrastate rates while maintaining a requirement of initial, but not totally exhaustive, resort to state PSCs. 49 U.S.C. § 11,501. The expedited ICC administrative control for which Congress provided is not comparable to judicial review of agency action; the equity, comity, and restraint considerations that have led federal courts to defer federal judicial review until state proceedings have run their full course, see Prentis v. Atlantic Coast Line Co., 211 U.S. 210, 229, 29 S.Ct. 67, 70, 53 L.Ed. 150 (1908), are not tailored to fit the prompt ICC administrative superintendence Congress ordered. Thus, the only even barely plausible support UPL can muster for its “state law controls access to ICC” argument is that the ICC itself so ordered.
UPL’s reasoning runs this way. The Staggers Rail Act of 1980 permits a state commission to exercise jurisdiction over intrastate rates only “if such State authority exercises such jurisdiction exclusively in accordance with [federal prescriptions].” 49 U.S.C. § 11,501(b)(1). Within 120 days after the effective date of the Staggers Act state authorities seeking to continue exercising jurisdiction over intrastate rates had to submit their intrastate rail carriage regulatory standards and procedures to the ICC. Id. § 11,501(b)(2). Within ninety days after receipt of a state authority’s standards and procedures, the ICC had to decide whether to certify the state authority as an agency for intrastate rail transportation regulation. Id. § 11,501(b)(3)(A). A state authority denied certification “may not exercise any jurisdiction over intrastate rates”; one granted certification may exercise jurisdiction using “its standards and procedures.” Id. § 11,501(b)(4)(A). “The ICC certified the Utah PSC under 49 U.S.C. § 11501 to exercise jurisdiction over intrastate rail traffic in accordance with the PSC’s rules of practice,” UPL reports. Brief of Petitioner at 7-8. The PSC’s rules provide for rehearing petitions. Therefore, UPL concludes, for want of a rehearing *310petition addressed to the Utah PSC, the Railroads may not complain about the PSC’s decision to the ICC.
The assertion that the ICC approved a PSC rehearing petition as a precondition to its own jurisdiction is vulnerable on several counts. First, the ICC’s certification of the Utah PSC’s intrastate rate regulation remains provisional. The ICC simply accepted the state’s representation that it “inten[ded] to exercise jurisdiction consistent with the law.” State Intrastate Rail Rate Authority, 364 I.C.C. 881, 883 (1981); see also Illinois Central Gulf Railroad Co. v. ICC, 720 F.2d 958, 959 (7th Cir.1983). The Commission deferred close inspection of state standards and procedures and has not yet rendered considered determinations on the consistency of state prescriptions with federal law. See id. at 959-60. Second, even after final certification, a state commission’s practices will remain subject to adversary testing in proceedings before the ICC to review state decisions. See 49 U.S.C. § 11,501(c) (railroads petitioning for ICC review may challenge state standard or procedure alleged to be inconsistent with governing federal law).6
Finally and predominantly, the overriding purpose of the Staggers Act provisions on federal-state relations was to insure that federal goals (price and service flexibility and revenue adequacy) would not be “undermined by state regulation.” H.R. Rep. No. 1430, 96th Cong., 2d Sess. 106 (1980) (Conference Report). A court would disserve that purpose were it to embrace the position UPL espouses. The Utah PSC’s rate reduction and award of reparations would stand without ICC oversight based on an utterly fanciful assumption— that the ICC in fact adverted to and adopted Utah’s local law on PSC rehearing petitions, thereby rendering that fragment of state law an impenetrable barrier to access to the ICC’s ultimate superintendence.
To be sure, although a rehearing petition requirement before a party repairs to a review forum risks delay, that risk may be counterbalanced by significant benefits. For example, a rehearing request affords the tribunal of first resort a chance to correct its own errors and to improve the quality of the record the review forum will receive. Cf. Athlone Industries, Inc. v. Consumer Products Safety Commission, 707 F.2d 1485, 1488-89 (D.C.Cir.1983) (discussing exhaustion of administrative remedies generally). But such a requirement, when imposed, should reflect a considered judgment that, in the particular context, the gain is significant enough to brook the delay.7 It is safe to say that no such judgment was made here — not by Congress, the federal judiciary, or the ICC, the only authorities empowered to make it.
Instead, when Congress settled on the Staggers Act provisions reducing the authority of state regulatory bodies while increasing the ICC’s monitoring role in intrastate regulation, delay was a paramount *311concern. See Wheeling-Pittsburgh Steel Corp. v. ICC, 723 F.2d 346, 354 & n. 19 (3d Cir.1983); H.R.Rep. No. 1035, 96th Cong., 2d Sess. 61, 130 (1980) (House Report). Congress was also mindful that the regulatory standards and procedures of the several states differed substantially from one another and from those of the Commission; Congress sought to reduce the disparity and to promote consistent practices. See id. at 128; see also Indianapolis Power & Light Co. v. ICC, 687 F.2d 1098, 1100 (7th Cir.1982); 126 Cong.Rec. 18,298 (1980) (statement of Rep. Broyhill introducing predecessor to current section 11,501). In view of these concerns, I am confident that the ICC correctly rejected the Utah PSC’s rehearing requirement as a reason for closing its door to the Railroads’ complaint.

. Section 54-7-15 provides: "Before any party ... who is dissatisfied with an order or decision of the [state] commission may commence legal action, the aggrieved party or person shall first [apply for rehearing].” Utah Code Ann. § 54-7-15 (1953 & Supp.1981). This section, headed "Review or rehearing by commission — Application-Procedure-Prerequisite to court action” (emphasis supplied), sets out the first component of the in-state review process; the following section, headed "Certiorari — Findings conclusive — Exclusive jurisdiction of Supreme Court,” continues:
Within thirty days after the application for a rehearing is denied, or if the application is granted, within thirty days after the rendition of the decision on rehearing, the applicant or any party to the proceeding deeming himself aggrieved by such order or decision rendered upon rehearing may apply to the [Utah] Supreme Court for a writ of certiorari____ Id. § 54-7-16 (1953).

. PSC Rule 19 provides that an interested party may apply for PSC rehearing and sets out rules for the rehearing process. See Rule 19 of the Rules of Practice of the Public Service Commission of Utah §§ 19.1, 19.2-.5. It further provides that "within thirty days after the rendition of the decision on rehearing, any party to the proceeding deeming himself aggrieved by such order or decision, may apply to the [Utah] Supreme Court for a writ of certiorari," id. § 19.6, and concludes by designating the record on review in the state supreme court. Id. § 19.7.

. It is, of course, a state’s prerogative to specify rules, including administrative exhaustion requirements, governing access to the state’s own tribunals. That, from all appearances, is precisely and only what Utah did in its PSC Rules of Practice and Utah Code Ann. § 54-7-15.
Congress authorized the ICC to hear the complaints of rail carriers, but not of shippers, regarding state-prescribed intrastate rates. 49 U.S.C. § 11.501(c) (1982). Therefore, UPL, if discontent with the PSC’s decision, would be obliged to seek relief within Utah, and in accordance with Utah procedure, as set out in PSC Rule 19 and Utah Code Ann. § 54-7-15. By contrast, UPL has petitioned this court for review of the ICC's decision, without asking for an ICC rehearing, because the federal law governing judicial review of ICC decisions requires no administrative rehearing petition. 49 U.S.C. § 10,327(i).

. Congress has written into federal statutes a variety of prior-resort-to-state-forum requirements. See, e.g., Age Discrimination in Employment Act of 1967, § 14(b), 29 U.S.C. § 633(b) (1982); Title VII of the Civil Rights Act of 1964, § 706(c), 42 U.S.C. § 2000e-5(c) (1982). Each of these statutes provides that when a state or local agency has authority to grant or seek relief against the prohibited discrimination, a grievant may not pursue federal relief before pursuing state remedies for 60 days, or until the termination of state proceedings, whichever comes first. See Oscar Mayer & Co. v. Evans, 441 U.S. 750, 99 S.Ct. 2066, 60 L.Ed.2d 609 (1979) (ADEA); Love v. Pullman Co., 404 U.S. 522, 92 S.Ct. 616, 30 L.Ed.2d 679 (1972) (Title VII). States may not tack onto this deferral rule procedural requirements of their own. See, e.g., Oscar Mayer & Co., supra (grievant is not required to commence state proceedings within time limits specified by state law).

. UPL twice incorrectly states that Judge Wilkey's opinion in Carolina, C. & O. Ry. v. ICC, 593 F.2d 1305, 1312-13 & n. 43 (D.C.Cir.1979), recognizes "that state administrative remedies [must] be exhausted before seeking ICC review.” Brief of Petitioner at 18; see Reply Brief at 8-9. Judge Wilkey quoted a legislative report containing an offhand reference to exhaustion; his opinion characterized Congress’ intent with respect to the quoted reference as "less obvious." He added that "[o]f course, the precise effects of Congress’ less obvious intentions ... are for another day.” Moreover, the statutory provisions addressed in Carolina, the predecessor of current 49 U.S.C. § 11,501(d), is not the one at issue here. Section 11,501(d), relating to railroad petitions to increase rates, provides, not for total exhaustion of state remedies, but only for a 120-day period in which state commissions have exclusive jurisdiction. After 120 days, a railroad may switch to the federal track immediately without awaiting even an initial state commission decision. Significantly, the Carolina opinion is the only case UPL cites in support of its bold but erroneous statements that this court (or any other federal tribunal) regards full exhaustion of state administrative remedies, including rehearing petitions, as a “must” before the ICC listens to a railroad’s complaint about an intrastate rate.

. The insubstantiality of UPL’s reliance on PSC’s provisional certification is all the more apparent when one compares the time-pressured temporary authorization that the ICC accorded to dozens of state agencies with the status of the Federal Rules of Civil Procedure. Even after long consideration by bench and bar, promulgation by the Supreme Court, and an opportunity for Congress to act, a Federal Rule can be tested, in an adversary proceeding, for consistency with the Rules Enabling Act. See Sibbach v. Wilson & Co., 312 U.S. 1, 9-10, 61 S.Ct. 422, 424-25, 85 L.Ed. 479 (1941).

. Analogously, Congress has declared:
Except as otherwise expressly required by statute, agency action otherwise final is final for the purposes of [judicial review] whether or not there has been presented or determined an application for ... any form of reconsideration^] or, unless the agency otherwise requires by rule and provides that the action meanwhile is inoperative, for an appeal to superior agency authority.
5 U.S.C. § 704 (1982) (Administrative Procedure Act). In some specific contexts, Congress has imposed a blanket agency rehearing petition prerequisite to judicial review of agency orders. See Federal Power Act, § 313, 16 U.S.C. § 825/ (1982). In others, it has required an agency rehearing petition only as to objections not earlier urged before the agency. See National Labor Relations Act, § 10(e), 29 U.S.C. § 160(e) (1982). In still others, it has eschewed rehearing entirely. See 49 U.S.C. § 10,327(i) (1982) (Interstate Commerce Act).