1. A "final" valuation of the property of a railroad by the
Interstate Commerce Commission pursuant to § 19 of the Act to
Regulate
Page 273 U. S. 300
Commerce, as amended, is merely the statement of the result of
an investigation, and is not such an order as may be reviewed by a
suit against the United States to annul and enjoin the use of such
valuation or "order" under the Act of October 22, 1913, or under
the general equity powers of the district court. Pp.
273 U. S. 308,
273 U. S.
314.
2. The statutory provision making such valuations
prima
facie evidence in all proceedings under the Act to Regulate
Commerce, and in all judicial proceedings to enforce that Act or to
enjoin, set aside, annul, or suspend, any order of the Commission
is not a violation of the due process clause of the Fifth Amendment
justifying proceedings to annul the valuation order. P.
273 U. S.
311.
3. Paragraph (j) of § 19a, providing that
"if, upon the trial of any action involving a final value fixed
by the Commission, evidence shall be introduced regarding such
value which is found by the court to be different from that offered
upon the hearing before the Commission, or additional thereto and
substantially affecting the value,"
the proceedings shall be stayed so as to permit the Commission
to consider the same and fix a final value different from that
fixed in the first instance and to "alter, modify, amend or rescind
any order which it has made involving such final value" does not
refer to so-called orders fixing only valuations. P.
273 U.S. 312.
4 F.2d 736, 8 F 2d 747, reversed.
Appeal from a decree of the district court, annulling and
enjoining the use of a valuation of a railroad property made by the
Interstate Commerce Commission. The suit was by the railroad
against the United States. The Commission intervened.
Page 273 U. S. 307
MR. JUSTICE BRANDEIS delivered the opinion of the Court.
This suit was brought in the Federal Court for Southern
California by the Los Angeles & Salt Lake Railroad Company to
enjoin and annul an order of the Interstate Commerce Commission
purporting to determine the "final value" of its property under
what is now § 19a of the Act to Regulate Commerce of February 4,
1887, c. 104, 24 Stat. 379, as amended by Valuation Act March 1,
1913, c. 92, 37 Stat. 701, by Act Feb. 28, 1920, c. 91, § 433, 41
Stat. 456, 474, 493, and by Act June 7, 1922, c. 210, 42 Stat. 624.
San Pedro, Los Angeles & Salt Lake Railroad Co., 75 I.C.C. 463;
97 I.C.C. 737; 103 I.C.C. 398. The bill asserts that the order
fixing the final value is invalid because it is in excess of the
powers conferred upon the Commission, is contrary to the provisions
of the Valuation Act, and violates the Fifth Amendment. It asserts
also that irreparable injury is threatened.
Reasons why the final valuation is invalid are set forth
specifically in 21 paragraphs and 35 subparagraphs of the bill. It
charges that the Commission adopted rules for the valuation which
are unsound and unwarranted in law; that, in the determination of
values, it ignored facts and factors of major importance; that it
refused to report
Page 273 U. S. 308
an analysis of the methods employed by it, although required so
to do by the Valuation Act, and that it refused to comply with the
requirement that all values and elements of value be separately
reported. It charges that the valuation was made as of June 30,
1914, whereas it should have been made as of June 7, 1923; that the
value found is that for ratemaking purposes, whereas the finding
should have been a general one of value for all purposes; that
properties enumerated were erroneously excluded from the valuation;
that, in making the finding of value, the Commission erroneously
failed to consider nine specified elements of value; that, in
making the finding of investment in road and equipment it ignored
six items; that, in making the finding of cost of reproduction new
it ignored eleven items; that, in making the finding of cost of
reproduction new less depreciation, it made thirteen errors; that,
in valuing the lands, eleven errors were made, and that, in making
the finding as to working capital, a large sum was arbitrarily
deducted. It alleges that, for these and other reasons, the
findings made are incomplete, erroneous in law, and misleading in
point of fact.
The jurisdiction of the district court was invoked under the
Urgent Deficiencies Act of October 22, 1913, c. 32, 38 Stat. 208,
219, and also under its general equity powers. The United States
was named as defendant, and the Commission became such by
intervention. Both defendants answered, but, by appropriate
pleadings, the United States objected that the adoption by the
Commission of the final valuation does not constitute an order
within the meaning of the Urgent Deficiencies Act, challenged also
the jurisdiction of the court to enjoin or annul the order under
its general equity powers, and moved that the bill be dismissed.
The motion was overruled, the case was heard on the pleadings and
evidence, and, after proceedings which it is not necessary to
detail, a decree was entered which annulled the final valuation and
enjoined its use
Page 273 U. S. 309
for any purpose.
Los Angeles & Salt Lake Railroad v.
United States, 4 F.2d 736, 8 F.2d 747. Whether all or any of
the claims and charges made in the bill are well founded we have no
occasion to consider, for we are of opinion that the district court
should have sustained the motion to dismiss the bill.
The final report on value, like the tentative report, is called
an order. But there are many orders of the Commission which are not
judicially reviewable under the provision now incorporated in the
Urgent Deficiencies Act.
See Proctor & Gamble Co. v. United
States, 225 U. S. 282;
Hooker v. Knapp, 225 U. S. 302;
Lehigh Valley R. Co. v. United States, 243 U.
S. 412;
United States v. Illinois Central R.
Co., 244 U. S. 82,
244 U. S. 89;
Delaware & Hudson Co. v. United States, 266 U.
S. 438. For the first 19 years of the Commission's
existence, no order was so reviewable. T he statutory jurisdiction
to enjoin and set aside an order was granted in 1906 because then,
for the first time, the ratemaking power was conferred upon the
Commission, and then disobedience of its orders was first made
punishable. Hepburn Act June 29, 1906, c. 3591, §§ 2-7, 34 Stat.
584, 586-595. The first suit to set aside an order was brought soon
after.
Stickney v. Interstate Commerce Commission, 164 F.
638;
215 U. S. 215 U.S.
98. The jurisdiction conferred by the Hepburn Act was transferred,
substantially unchanged, to the Commerce Court by the Act of June
18, 1910, c. 309, § 1, 36 Stat. 539, and, when that court was
abolished, to the district courts, by the Urgent Deficiencies Act.
The so-called order here assailed differs essentially from all
those held by this Court to be subject to judicial review under any
of those acts. Each of the orders so reviewed was an exercise
either of the
quasi-judicial function of determining
controversies or of the delegated legislative function of
ratemaking and rulemaking.
The so-called order here complained of is one which does not
command the carrier to do, or to refrain from
Page 273 U. S. 310
doing, anything; which does not grant or withhold any authority,
privilege, or license; which does not extend or abridge any power
or facility; which does not subject the carrier to any liability,
civil or criminal; which does not change the carrier's existing or
future status or condition; which does not determine any right or
obligation. This so-called order is merely the formal record of
conclusions reached after a study of data collected in the course
of extensive research conducted by the Commission through its
employees. It is the exercise solely of the function of
investigation.
Compare Smith v. Interstate Commerce
Commission, 245 U. S. 33.
Moreover, the investigation made was not a step in a pending
proceeding, in which an order of the character of those held to be
judicially reviewable could be entered later. It was merely
preparation for possible action in some proceeding which may be
instituted in the future -- preparation deemed by Congress
necessary to enable the Commission to perform adequately its duties
if and when occasion for action shall arise. The final report may,
of course, become a basis for action by the Commission, as it may
become a basis for action by Congress or by the legislature or an
administrative board of a state. But so may any report of an
investigation, whether made by a committee of Congress or by the
Commission pursuant to a resolution of Congress or of either branch
thereof.
The Valuation Act requires that the investigation and study be
made of the properties of each of the rail carriers. There are
about 1,800. 40 Annual Report Interstate Commerce Commission 13. In
directing the Commission to investigate the value of the property
of the several carriers, Congress prescribed in detail the subjects
on which findings should be made, and constituted the "final
valuations" and "the classification thereof"
prima facie
evidence in controversies under the Act to Regulate Commerce. Every
party in interest is therefore entitled to
Page 273 U. S. 311
have and to use this evidence, and the carrier, being a party in
interest, has the remedy by mandamus to compel the Commission to
make a finding on each of the subjects specifically prescribed.
Kansas City Southern Ry. Co. v. Interstate Commerce
Commission, 252 U. S. 178. But
Congress did not confer upon the courts power either to direct what
this "tribunal appointed by law and informed by experience,"
Illinois Central Ry. Co. v. Interstate Commerce
Commission, 206 U. S. 441,
206 U. S. 454,
shall find, or to annul the report, because of errors committed in
making it. Moreover, errors may be made in the final valuation of
the property of each of the nearly 1,800 carriers. And it is at
least possible that no proceeding will ever be instituted, either
before the Commission or a court, in which the matters now
complained of will be involved or in which the errors alleged will
be of legal significance.
The mere fact that Congress has, in terms, made
"all final valuations . . . and the classification thereof . . .
prima facie evidence of the value of the property in all
proceedings under the Act to Regulate Commerce . . . in all
judicial proceedings for the enforcement of the act . . . and in
all judicial proceedings brought to enjoin, set aside, annul, or
suspend, in whole or in part, any order of the Interstate Commerce
Commission"
is, obviously, not a violation of the due process clause
justifying proceedings to annul the order. That to make the
Commission's conclusions
prima facie evidence in judicial
proceedings is not a denial of due process was settled by
Meeker v. Lehigh Valley R. Co., 236 U.
S. 412,
236 U. S.
430-431. It was there said of a like provision relating
to reparation orders:
"This provision only establishes a rebuttable presumption. It
cuts off no defense, interposes no obstacle to a full contestation
of all the issues, and takes no question of fact from either court
or jury. At most, therefore, it is merely a rule of evidence."
See also Mills
Page 273 U. S. 312
v. Lehigh Valley R. Co., 238 U.
S. 473,
238 U. S.
481-482;
St. Louis Southwestern R. Co. v. United
States, 264 U. S. 64,
264 U. S.
77.
Nor does the fact that "all final valuations . . . and the
classifications thereof" are made
prima facie evidence
prevent the report from being solely an exercise of the function of
investigation. Data collected by the Commission as a part of its
function of investigation constitute ordinarily evidence sufficient
to support an order, if the data are duly made part of the record
in the case in which the order is entered.
See Interstate
Commerce Commission v. Louisville & Nashville R. Co.,
227 U. S. 88,
227 U. S. 93;
Chicago Junction Case, 264 U. S. 258,
264 U. S. 262;
United States v. Abilene & S. R. Co., 265 U.
S. 274,
265 U. S. 286,
265 U. S. 290;
Act of June 18, 1910, c. 309, § 13, 36 Stat. 539, 555. Inquests and
inquisitions, if they were expressly authorized, are, at common
law, admissible in evidence in judicial proceedings, thus
constituting an exception to both the hearsay rule and the rule
against opinion evidence. 3 Wigmore on Evidence (2d ed.) §§
1671-1674. Some inquests are at common law also
prima
facie evidence of the facts found.
Hughes v. Jones,
116 N.Y. 67.
Congress has provided adequate remedies for the correction of
errors in the final valuation and the classification thereof. The
conclusions reached by the Commission must be submitted first in
the form of a tentative report. Section 19a, pars.(f) and (h). When
so submitted, the carrier is authorized to file a protest and to be
heard thereon. Paragraph(i). If such protest is filed, the
Commission is directed to make in the report such changes, if any,
as it may deem proper. Even if no protest is filed, the Commission
may, of its own motion upon due notice to parties in interest,
correct the tentative report.
Compare New York, Ontario &
Western Ry. Co. v. United States, post, p. 652. When the final
report is introduced in evidence, the opportunity to contest the
correctness of the findings
Page 273 U. S. 313
therein made is fully preserved to the carrier, and any error
therein may be corrected at the trial. Specific findings may be
excluded because of errors committed in making them. It is
conceivable that errors of law may have been committed which are so
fundamental and far-reaching as to deprive the "final valuations .
. . and the classification thereof" of all probative force.
Moreover, additional evidence may be introduced. Paragraph (j)
provides that,
"if upon the trial of any action involving a final value fixed
by the Commission, evidence shall be introduced regarding such
value which is found by the court to be different from that offered
upon the hearing before the Commission, or additional thereto and
substantially affecting said value,"
the proceedings shall be stayed so as to permit the Commission
to consider the same and fix a final value different from that
fixed in the first instance, and to "alter, modify, amend or
rescind any order which it has made involving such final
value."
The district court rested jurisdiction to entertain a suit to
set aside the valuation order largely upon the provisions of
paragraph (j), believing that such a suit was within the scope of
the words "upon the trial of any action involving a final value."
That paragraph was intended to apply to actions brought to set
aside rate-fixing orders in which the question of the value of the
carrier's property would be material. In our opinion, it is not
applicable to so-called orders fixing only valuations. The
objection to entertaining this suit to annul the final valuation is
not merely that the question presented is moot, as in
United
States v. Alaska Steamship Co., 253 U.
S. 113,
253 U. S. 116,
or that the plaintiff's interest is remote and speculative as in
Hines Yellow Pine Trustees v. United States, 263 U.
S. 143,
263 U. S. 148.
There is the fundamental infirmity that the mere existence of error
in the final valuation is not a wrong for which Congress provides a
remedy under the Urgent Deficiencies Act.
Page 273 U. S. 314
Little need by added concerning the further contention that the
suit should be entertained under the general equity power of the
court. Two arguments are urged in support of the proposition. One
is that, since the Commission has, by reason of errors of law and
of judgment, grossly undervalued the property, its report will,
unless suppressed, injure the credit of the carrier with the
public. The other is that the Commission may itself be misled into
illegal action by the erroneous conclusions, and may apply them to
the carriers' injury, since use of the final valuation is required
in making rates pursuant to § 15a of the Act to Regulate Commerce,
as amended by Transportation Act, c. 91, § 422, 41 Stat. 456; in
prescribing divisions of joint rates under § 15; in determining the
limit upon the amount of capitalization, in the event of a
consolidation under § 5; in determining the propriety of an issue
of securities, under § 20a; or as the basis of computation of the
amount of excess earnings to be recaptured under § 15a. Neither
argument is persuasive. The first reminds of the effort made in
Pennsylvania R. Co. v. United States Railroad Labor Board,
261 U. S. 72, to
suppress the report of that board. The second reminds of the
attempt to secure a declaratory judgment in
Liberty Warehouse
Co. v. Grannis, ante, p.
273 U. S. 70, and
also of cases in which it was sought to enjoin a municipality from
passing an illegal ordinance.
Compare New Orleans Waterworks
Co. v. New Orleans, 164 U. S. 471,
164 U. S. 481;
McChord v. Louisville & N. Ry. Co., 183 U.
S. 483.
No basis is laid for relief under the general equity powers. The
investigation was undertaken in aid of the legislative purpose of
regulation. In conducting the investigation and in making the
report, the Commission performed a service specifically delegated
and prescribed by Congress. Its conclusions, if erroneous in law,
may be disregarded. But neither its utterances nor its processes of
reasoning, as distinguished from its acts, are a subject
Page 273 U. S. 315
for injunction. Whether the remedy conferred by the Urgent
Deficiencies Act is in all cases the exclusive equitable remedy we
need not determine.
Reversed.
MR. JUSTICE BUTLER took no part in the consideration or decision
of this case.