1. The provision of § 3(e) of the Inland Waterways Corporation
Act, as amended, empowering the Interstate Commerce Commission,
upon granting a certificate of public convenience and necessity to
a prospective water carrier, to order all connecting common
carriers to join with such water carrier in through routes and
joint rates, and in such order to fix minimum differentials between
all-rail rates and joint rates in connection with the water
service, does not deprive a rail carrier affected of due process,
since the rates so prescribed are tentative, and the railway, upon
complaint, may have a full hearing concerning them and a plenary
determination by the Commission before they go into effect. P.
291 U. S.
460.
2. A suit to enjoin enforcement of the Commission's order before
the administrative process has been completed is premature. P.
291 U. S.
463.
3. A carrier which has not first availed itself of the remedy
before the Commission is not in a position to seek equitable relief
against rates fixed by the Commission's order. P.
291 U. S.
463.
4. The provision of the statute which puts the burden of proof
upon carriers complaining of the rates fixed by the Commission's
ex parte order is not inconsistent with the due process
clause of the Fifth Amendment. P.
291 U. S.
464.
3 F. Supp. 100 reversed.
Appeal from a decree of the District Court, of three judges,
setting aside an order of the Interstate Commerce Commission, in a
suit brought by several railroad carriers against the United States
and the Commission.
Page 291 U. S. 458
MR. JUSTICE SUTHERLAND delivered the opinion of the Court.
This is a suit brought by the Illinois Central Railroad Company
and other railroad carriers, under the Urgent Deficiencies Act of
October 22, 1913, U.S.C. Title 28, § 47, as amended by the Act of
February 13, 1925, U.S.C. Title 28, § 345, to set aside, annul, and
enjoin the enforcement of an amended order of the Commission, made
under § 3(e) of the Inland Waterways Corporation Act of June 3,
1924, c. 243, 43 Stat. 360, as amended, May 29, 1928, c. 891, § 2,
45 Stat. 978. That section provides that any person, etc., about to
engage in conducting a common carrier service upon certain
designated waters may, upon application to the Commission, obtain a
certificate of public convenience and necessity in accordance with
§ 1 of the Interstate Commerce Act, and that the Commission
"shall thereupon, by order, direct all connecting common
carriers and their connections to join with such water carrier in
through routes and joint rates,"
and shall, in such order, "fix reasonable minimum differentials
between all rail rates and joint rates in connection with said
water service," etc. The Commission is further authorized to
require the interested common carriers to enter into negotiations
for the purpose of establishing equitable divisions
Page 291 U. S. 459
of these joint differential rates, and if they are unable to
agree within a time specified in the act, the Commission shall
determine and establish reasonable divisions to become effective
coincident with the effective date of the joint rates. The act
further authorizes the Commission, upon complaint at once, and if
it so orders, without answer or other formal pleading, but upon
reasonable notice, to enter upon a hearing concerning the
reasonableness or lawfulness of any through route or joint rate
filed pursuant to such order of the Commission, etc., and, after
full hearings, to "make such order with reference to any such
matters as it may find to be proper and in the public interest."
The burden of proof in such case is put upon the carrier or
carriers making the complaint, and preference is to be given to the
hearing and decision of the questions involved over all other
questions pending before it, except where like preference is given
by law, and the Commission is directed to render a decision as
speedily as possible.
Upon application under this section, the Commission, after a
hearing confined to that application, granted to the American Barge
Line Company a certificate of public convenience and necessity,
Application of American Barge Line Co., 182 I.C.C. 521, and
thereupon, without further hearing, entered an order directing the
interested carriers to establish through barge-rail routes and
rates. Subsequently, in August or September, 1932, because of
competition from unregulated truck and water carriers, the railroad
carriers published all-rail carload rates on cotton lower than
those previously in effect. These rates were further reduced in
November, 1932. But the railroad carriers declined to join in joint
water and rail rates, and thereupon the Barge Line sought from the
Commission supplemental orders requiring the establishment of
rail-barge-rail rates between designated points. The rail
Page 291 U. S. 460
carriers opposed the application and requested a hearing before
action by the Commission. This hearing the Commission refused, and
entered an order requiring the rail carriers to join with the Barge
Line in publishing specified rail-barge-rail rates on cotton in
carloads. The order, particulars of which need not be stated, was
issued December 10, 1932, to become effective on January 25, 1933,
which time was afterwards extended to June 1, 1933, a period
altogether of nearly six months from the date of issue.
Appellees, on February 2, 1933, before the order had become
effective, brought this suit and sought relief from the order upon
the grounds (1) that it was made without according them a full and
fair hearing, and that § 3(e) of the statute (as amended), insofar
as it authorizes the Commission to make and enforce the order
without such hearing, contravenes the due process of law clause of
the Fifth Amendment, and (2) that it also constitutes a delegation
to the Commission of legislative power. The court below held with
appellees upon the first ground, and entered a decree enjoining,
setting aside, annulling, and suspending the order of the
Commission. 3 F. Supp. 1005.
1. Assuming that the order in question, if enforced, would have
the effect of depriving appellees of property or of property
rights, we first inquire whether the statute, as interpreted and
applied by the Commission, does have the effect of denying
appellants a full and fair hearing in respect of the matter prior
to the enforcement of the order, and consequently fails to satisfy
the constitutional requirement of due process of law. The provision
of the statute that a certificate of public convenience and
necessity to conduct a common carrier service upon the waters
designated may be obtained upon application to the Commission, and
thereupon the Commission shall make the order described in the
statute, undoubtedly empowers the Commission to make the order, in
the first instance, without a hearing. The Commission, however,
seems never to
Page 291 U. S. 461
have held that it is not obliged upon complaint to grant a full
and fair hearing after the making of the order but before putting
it into effect. And both in the briefs filed on behalf of
appellants, including the United States and the Commission, and in
the argument at the bar, the position is definitely taken that the
order is tentative, and the rates prescribed thereby cannot be
enforced without a hearing if properly sought by appellees. The
brief for the Untied States and the Commission quotes from the
concurring opinion of Commissioner Brainerd in Ex parte 94
(Procedure Under Barge Line Act), 148 I.C.C. 129, 141, to this
effect, and adopts it as the view of the government and the
Commission. Upon the oral argument, in response to a direct
question from the bench, this view was reiterated by the Assistant
Solicitor General, his statement in effect being that the
Commission is bound to grant the hearing upon complaint being made
by the railway carriers, and, pending such hearing, to postpone the
effective date of the order upon a showing which is not frivolous.
The conclusion of Commissioner Brainerd, thus adopted, is that, if
the Commission issue a certificate of public convenience and
necessity and enter an order without hearing directing the
establishment of through routes and joint rates and fixing
reasonable minimum differentials, and later, before said rates
become effective, a complaint is filed by an interested
carrier,
"it would then be our duty to hear said complaint and decide
said matter before said rates become effective; that, in the event
such a hearing is not had and the matter disposed of before the
effective date of said rates, it would be our further duty
temporarily to suspend them until said matter is decided. . .
."
And he declared that this procedure would be necessary to comply
with the requirements of due process of law.
This is an admissible construction of the statutory provisions.
That the order made by the Commission upon
Page 291 U. S. 462
granting the certificate of public convenience and necessity is
not final and conclusive is clear, since, by the affirmative
provisions of the act, the railway carriers may file the through
routes and joint rates pursuant to the preliminary order, and
immediately, upon complaint, secure a full hearing from, and a
plenary determination by, the Commission. Pending that hearing, the
Commission is authorized to suspend the operation of the
preliminary order for as long as seven months beyond the time when
it would otherwise go into effect, Interstate Commerce Act, as
amended by Act March 4, 1927, U.S.C. Title 49, § 15(7), and it is
made clear by what has already been said that, upon application and
proper showing, the Commission would consider itself bound to take
such action.
The provisions of § 3(e) with which we are dealing were enacted
by Congress in an avowed effort to bring about cooperation on the
part of the rail carriers with the water carriers. The report of
the House Committee on the proposed legislation (H.Rept. 1537, 70th
Cong., 1st Sess., pp. 5, 6) recites the necessity of overcoming
opposition on the part of the rail carriers in respect of through
routes, joint rates, etc., without interminable delay and the heavy
expense necessary to carry on proceedings before the Interstate
Commerce Commission as a necessary prerequisite to the realization
of privately owned transportation service on the inland waterways
of the country. Transportation Act 1920 (U.S.C. Title 49, § 142)
declares the definite policy of Congress to be "to promote,
encourage, and develop water transportation, service, and
facilities in connection with the commerce of the United States."
Chicago, R.I. & P. Ry. Co. v. United States,
274 U. S. 29,
274 U. S. 36. In
the light of the situation disclosed by this report and of the
policy declared by the act just named, Congress evidently
prescribed the course of procedure which § 3(e) requires.
Page 291 U. S. 463
Without attempting to lay down any general rule, but confining
ourselves to the statute and case in hand, we accordingly hold that
it was not essential, under the due process of law clause, that a
hearing should be accorded in advance of the initiating order. It
is enough that opportunity was given for a full and fair hearing
before the order became operative. Since no routes or rates were in
existence when the order was made, that order constituted the
preliminary step toward their creation, equivalent, in essence, to
an
ex parte order on the carriers to show cause why the
designated routes and rates should not be established. The effect
of that order was simply to put upon the rail carriers the
necessity, within a comparatively brief period, of either availing
themselves of the right to file the routes and rates and appear and
be heard in opposition thereto (the operation of the order in the
meantime being held in abeyance) or of suffering them to go into
effect by default. The statute gives preference to the hearing and
decision of the questions involved, and directs the Commission to
render a decision as speedily as possible. Congress evidently
believed that the procedure thus prescribed would bring about an
earlier settlement of the matter than otherwise would be the case.
The various steps to be taken constitute parts of the
administrative process which must be completed before the
extraordinary powers of a court of equity may be invoked.
Porter v. Investors' Syndicate, 286 U.
S. 461,
286 U. S.
470-471.
The constitutional question raised by appellees therefore
vanishes from the case, because the Commission concedes and stands
ready to grant every administrative procedural right that appellees
are lawfully entitled to claim. If the preliminary order be
erroneous in any particular, it is susceptible of correction by the
Commission upon the hearing thus provided for. It will be time
enough for appellees to seek the aid of a court of equity when
they
Page 291 U. S. 464
shall have fully availed themselves of this administrative
remedy and the Commission shall have taken adverse action. Until
then, they are in no situation to invoke judicial action.
The provision of the statute which puts the burden of proof upon
the carriers is not inconsistent with the due process clause of the
Constitution.
New England Divisions Case, 261 U.
S. 184,
261 U. S. 199;
Minneapolis & S.L. R. Co. v. Minnesota, 193 U. S.
53,
193 U. S.
63.
2. The precise ground upon which appellees place their
contention that the statute is invalid as constituting a delegation
of legislative power is not entirely clear. Undoubtedly, the
statute furnishes a sufficient primary standard to govern the
action of the Commission, and this appellees do not dispute. Their
contention, as set forth in their brief, is that the only rule of
decision laid down in § 3(e) is that the through routes, rates, and
differentials to be established must be reasonable and lawful,
and
"such reasonableness and lawfulness can be determined only by a
full and fair hearing, and the establishment of rates and routes
and differentials without such hearing constitutes necessarily an
exercise by the Commission of pure legislative power."
Since the government and the Commission concede that a full and
fair hearing must be accorded before the order becomes effective,
this objection to the statute, as a distinct ground, necessarily
falls.
Decree reversed.
MR. JUSTICE STONE, concurring.
I concur in the result.
The statute, in words, authorizes the Commission to grant a
hearing as to the reasonableness and lawfulness of the proposed
rates and divisions, if complaint is filed, and the Commission has
plenary power, upon consideration of the complaint, to postpone the
effective date of
Page 291 U. S. 465
the order and to suspend the rates after the order becomes
effective. §§ 15(7), 16(6), Interstate Commerce Act..
As respondents have failed to invoke these administrative
remedies by filing a complaint with the Commission, it seems plain
that their rights, constitutional or otherwise, have not been
infringed, and I see no occasion for speculation as to what the
statutory duty of the Commission may be in the event a complaint is
filed, or to resort to concessions of counsel in brief and argument
to define that duty, or to suggest that the statute falls short of
constitutional requirements if it fails to command the
administrative action which it permits. The mere power,
unexercised, to withhold constitutional right is not a denial of
it. It is enough that respondents have filed no complaint with the
Commission designed to secure a hearing. Before administrative
action which respondents may invoke, but have not, it cannot be
said that there is any infringement of their constitutional rights
to a hearing or to protection from the rates pending a hearing.
Compare Pacific Telephone & Telegraph Co. v. Seattle,
ante, p.
291 U. S. 300;
Porter v. Investors' Syndicate, 286 U.
S. 461,
286 U. S.
470-471.
Further, there is no intimation in the record that, upon resort
to the administrative remedies which the statute permits, any
relief to which respondents are justly and equitably entitled will
be withheld. And there is no contention that the proposed rates
will not yield a fair return, or that they otherwise infringe
constitutional rights. At most, it appears that the interest sought
to be protected is a prospective share in future traffic which it
is feared may be diverted to the Barge Line, an interest to which
the Constitution plainly affords no protection.
Edward Hines
Trustees v. United States, 263 U. S. 143,
263 U. S. 148;
Atchison, T. & S.F. Ry. Co. v. United States,
279 U. S. 768,
279 U. S. 780;
Sprunt & Son, Inc. v. United States, 281 U.
S. 249.
Page 291 U. S. 466
Thus, regardless of what the statute commands, there is no such
showing of threatened denial of a hearing or of injury to a
property right as would warrant resort to the equity powers of a
federal court.
Vandalia Ry. Co. v. Public Service Comm'n,
242 U. S. 255;
United States v. Los Angeles & S.L. R. Co.,
273 U. S. 299,
273 U. S. 314;
White v. Johnson, 282 U. S. 367,
282 U. S. 373;
Porter v. Investors' Syndicate, supra.
MR. JUSTICE BRANDEIS, MR. JUSTICE ROBERTS, and MR. JUSTICE
CARDOZO concur in this opinion.