1. Factors involved in reviewability
vel non of orders
of administrative bodies such as the Interstate Commerce Commission
and the Federal Communications Commission are analyzed, and the
governing principles stated. Pp.
307 U. S. 129
et seq.
2. Any distinction between "negative" and "affirmative" orders,
as a touchstone of jurisdiction to review commission orders, serves
no useful purpose, and insofar as earlier decisions have been
controlled by this distinction, they can no longer be guiding. P.
307 U. S.
143.
3. An order of the Federal Communications Commission determining
the status of a telephone company as one subject to jurisdiction
under § 2(b) of the Communications Act of 1934 because of its
control by another, and therefore bound by earlier general orders
requiring all telephone carriers so subject to file schedules of
charges, copies of contracts, and other information,
held
reviewable on questions of law under the Urgent Deficiencies Act of
Oct. 22, 1913, as extended to the Communications Act. P.
307 U. S.
143.
4. A finding of the Federal Communications Commission that a
telephone company, engaged in interstate commerce solely through
physical connection with the facilities of another, was under the
other's control within the meaning of § 2(b) of the Communications
Act of 1934,
held justified by the facts before the
Commission concerning the relations between the two companies. P.
307 U. S.
144.
The existence of such "control" is an issue of fact to be
determined by the Commission by the special circumstances of each
case, and not by artificial tests.
23 F. Supp.
634 affirmed.
Appeal from a District Court of three judges dismissing on the
merits a bill to set aside an order of the Federal Communications
Commission.
Page 307 U. S. 126
MR. JUSTICE FRANKFURTER delivered the opinion of the Court.
This is an appeal, under § 238 of the Judicial Code as amended,
28 U.S.C. § 345, from a final decree by a district court of three
judges, under the Urgent Deficiencies Act of October 22, 1913, 28
U.S.C. §§ 45, 47a, as extended by § 402(a) of the Federal
Communications Act, 47 U.S.C. § 402(a), dismissing on the merits a
bill to review an order of the Federal Communications
Commission.
At the outset, a challenge to the jurisdiction of the District
Court confronts us. It involves those problems of administrative
law which are implied by the doctrine of "negative orders."
Inasmuch as this phrase is shorthand for a variety of situations,
sharp heed must be given to the precise circumstances --
inter
alia, the statutory provisions for review, the terms of the
contested order, the grounds of objection to it -- which in this
and other cases have invoked the doctrine.
Section 2(b) of the Communications Act of 1934 provides that,
with certain exceptions not here material, the Communications
Commission shall not have jurisdiction over any carrier
"engaged in interstate or foreign communication solely through
physical connection with the facilities of another carrier not
directly or indirectly controlling or controlled by, or under
direct or indirect common control with, such carrier."
The appellant, Rochester Telephone Corporation (hereafter called
the Rochester), is a New York corporation maintaining a system of
telephone communications in and around the City of Rochester. For
present purposes, the Rochester is to be
Page 307 U. S. 127
deemed as engaged in interstate communications solely because of
physical connections with the facilities of the New York Telephone
Company (hereafter called the New York).
The present controversy grew out of a ruling by the Federal
Communications Commission that the Rochester owed obedience to a
series of orders issued by the Commission. These orders required
all telephone carriers subject to the Act to file schedules of
their charges, copies of contracts with other telephone carriers,
information concerning their corporate and service history, their
relations with affiliates, their use of franks and passes. Copies
of these orders were duly served on the Rochester. No response
being had, the Telephone Division of the Communications Commission,
on October 9, 1935, ordered the Rochester to show cause why it
should not be required to file responses to the general orders
theretofore served upon it. [
Footnote 1] The Rochester answered, claiming to be outside
the requirements of the Act except as to matters not here
questioned.
To ascertain the facts in the contested issue, the Commission
appointed a trial examiner. At hearings held by him, the Rochester
entered a special appearance, denying the Commission's jurisdiction
and contending that the burden of proof was on the Commission to
show that Rochester did not come within the exclusionary provisions
of Section 2(b)(2). After a thorough hearing [
Footnote 2] and the submission of briefs, the
examiner filed his report, to which the Rochester duly excepted.
Upon the basis of these proceedings and of argument before it, the
Commission, through its Telephone Division, sustained the findings
of its chief examiner, determined that the Rochester was
Page 307 U. S. 128
under the "control" of the New York and therefore not entitled
to the classification of a mere connecting carrier under § 2(b)(2).
Accordingly, the Commission ordered the Rochester classified "as
subject to all common carrier provisions of the Communications Act
of 1934, and therefore subject to all orders of the Telephone
Division." A petition for rehearing before the full Commission was
denied.
The Rochester thereupon filed the present bill, alleging that
the order entered by the Commission on November 18, 1936, pursuant
to its Report, was contrary to undisputed facts and erroneous as a
matter of law, and that the Commission's threat to enforce it put
the Rochester to the hazard of irreparable injury, and praying that
the District Court
"make and enter its order and decree setting aside and annulling
said orders of the Federal Communications Commission hereinbefore
mentioned, and each and all of them, and enjoining the enforcement
of said orders, except insofar as the provisions of said orders . .
. have already been complied with."
The case was disposed of in the District Court on the pleadings
and the record before the Commission.
Below, the Government made no objection to the District Court's
jurisdiction, nor did that Court raise the question
sua
sponte. [
Footnote 3] It
sustained the Commission's action on the merits and dismissed the
bill. Here, the Government urges that, under the doctrine of
"negative orders" the Commission's order was not reviewable, but,
in the alternative, supports the decree on the merits.
The relation of action by the Federal Communications Commission
to the reviewing power of the courts is here
Page 307 U. S. 129
for the first time. The jurisdictional objection raised by the
Government in this case implicates other federal regulatory bodies
as well, because the various statutory schemes for judicial review
have either been carried over from the Urgent Deficiencies Act,
pertaining to orders under the Acts to Regulate Commerce, or
because different statutory provisions have by analogy been
assimilated to the "negative order" doctrine. That doctrine has not
had wholly plain sailing in the many cases, both here and in the
lower federal courts, since it first got under way, in 1912, in
Procter & Gamble Co. v. United States, 225 U.
S. 282.
The important procedural problems with which this case is
entangled therefore call for clarification.
The prior decisions involving the "negative order" doctrine fall
into three categories: [
Footnote
4]
(1) Where the action sought to be reviewed may have the effect
of forbidding or compelling conduct on the part of the person
seeking to review it, but only if some further action is taken by
the Commission. Such a situation is presented by an attempt to
review a valuation made by the Interstate Commerce Commission which
has no immediate legal effect, although it may be the basis of a
subsequent rate order.
(2) Where the action sought to be reviewed declines to relieve
the complainant from a statutory command forbidding or compelling
conduct on his part. The most obvious case is a denial of
permission by the Interstate Commerce Commission for a departure
from the long-short haul clause.
Page 307 U. S. 130
(3) Where the action sought to be reviewed does not forbid or
compel conduct on the part of the person seeking review, but is
attacked because it does not forbid or compel conduct by a third
person. A familiar example is that of a shipper requesting the
Interstate Commerce Commission for an order compelling the carrier
to adopt certain rates or practices which the Commission, on the
merits, declines. Another instance is where the Commission
authorizes the carrier to depart from the long-short haul clause
and a shipper adversely affected seeks to have the authorization
set aside.
In group (1), the order sought to be reviewed does not of itself
adversely affect complainant, but only affects his rights adversely
on the contingency of future administrative action. In view of
traditional conceptions of federal judicial power, resort to the
courts in these situations is either premature or wholly beyond
their province. Thus, orders of the Interstate Commerce Commission
setting a case for hearing despite a challenge to its jurisdiction,
[
Footnote 5] or rendering a
tentative [
Footnote 6] or final
valuation [
Footnote 7] under
the Valuation Act, although claimed to be inaccurate, or holding
that a carrier is within the Railway Labor Act, and therefore
amenable to the National Mediation Board, are not reviewable.
[
Footnote 8]
The governing considerations which keep such orders without the
area of judicial review were thus summarized for the Court by Mr.
Justice Brandeis in denying reviewability of a "final valuation"
under the Valuations Act:
"The so-called order here complained of is one which does not
command the carrier to do, or to refrain from
Page 307 U. S. 131
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."
United States v. Los Angeles & St.L. R. Co.,
273 U. S. 299,
273 U. S.
309-310.
Plainly the denial of judicial review in these cases does not
derive from a regard for the special functions of administrative
agencies. Judicial abstention here is merely an application of the
traditional criteria for bringing judicial action into play. Partly
these have been written into Article 3 of the Constitution by what
is implied from the grant of "judicial power" to determine "Cases"
and "Controversies," Art. 3, § 2, U.S.Constitution. [
Footnote 9] Partly they are an aspect of the
procedural philosophy pertaining to the federal courts whereby,
ever since the first Judiciary Act, Congress has been loathe to
authorize review of interim steps in a proceeding. [
Footnote 10]
Page 307 U. S. 132
Group(2) is composed of instances of statutory regulations which
place restrictions upon the free conduct of the complainant. To rid
himself of these restrictions, the complainant either asks the
Interstate Commerce Commission to place him outside the statute,
or, being concededly within it, be invokes the Commission's
dispensing power. In this type of situation, a complainant seeking
judicial review under the Urgent Deficiencies Act of adverse action
by the Commission must clear three hurdles: (a) "case" or
"controversy" under Article 3; (b) the conventional requisites of
equity jurisdiction; (c) the specific terms of the statute granting
to the district courts jurisdiction in suits challenging "any
order" of the Commission.
Where a complainant seeks the Commission's authority under the
terms of a statute and the Commission's action is followed by legal
consequences, as was the case in
Lehigh Valley R. Co. v. United
States, 243 U. S. 412, or
where the Commission's order denies an exemption from the terms of
the statute, as in the
Inter-Mountain Rate Case,
234 U. S. 476, the
road to the courts' jurisdiction seems to be clear. There is a
constitutional "case" or "controversy,"
Interstate Commerce
Comm'n v. Brimson, 154 U. S. 447; the
requirements of equity are satisfied if disregard of the
Commission's adverse action entails threat of oppressive penalties,
and the suit is within the express language of the Urgent
Deficiencies Act in that it is one "to enjoin, set aside, annul" an
"order of said commission." 28 U.S.C. § 46, 47. [
Footnote 11] While the penalties
Page 307 U. S. 133
may be imposed by the statute for its violation, and not for
disobedience of the Commission's order, a favorable order would
render the prohibitions of the statute inoperative. The complainant
can come into court, of course, not to review action within the
discretionary authority
Page 307 U. S. 134
of the Commission to render an adverse, rather than a favorable,
decision but because he urges errors of law outside the
Commission's final say-so. Such an analysis emerges from a long
sequence of cases under the Urgent Deficiencies Act viewed in the
setting of general doctrines of federal jurisdiction. On the other
hand, the result in the
Lehigh Valley case was reached in
the earlier phases of modern administrative law, and did not deal
with its specific jurisdictional problems in the perspective of
underlying principles governing federal equitable jurisdiction. In
consequence, the phrase "negative orders" gained currency as though
it were descriptive of some technical doctrine of jurisdiction
having peculiar relevance to judicial review of orders of the
Interstate Commerce Commission and comparable regulatory bodies.
[
Footnote 12]
Page 307 U. S. 135
This brings us to the cases in group (3). Here, review is sought
of action by the Commission which affects the complainant because
it does not forbid or compel conduct with reference to him by a
third person. This type of situation is illustrated by
Procter
& Gamble Co. v. United States, 225 U.
S. 282. Since this case gave rise to the notion that
there is a specialized jurisdictional doctrine pertaining to
"negative orders," it calls for reexamination. Procter & Gamble
Co. filed a complaint with the Interstate Commerce Commission to
set aside demurrage rules that imposed charges on private cars left
unloaded for over forty-eight hours on private tracks. The
Commission dismissed the complaint on the ground that the rules
were within the carriers' authority to make conditions for the
acceptance of private cars. Procter & Gamble then petitioned
the Commerce Court to annul the Commission's action and to enjoin
the carriers from enforcing the rules. The Commerce Court took
jurisdiction, but found the Commission's action to be within its
authority. On appeal, this Court held that the Commerce
Page 307 U. S. 136
Court erred in taking jurisdiction and remanded the cause for
dismissal.
Clearly, Procter & Gamble was authorized, under § 13 of the
Act to Regulate Commerce, to institute the proceedings before the
Commission. Since it asserted a legal right under that Act to have
the Commission apply different principles of law from those which
led the Commission to dismiss the complaint, the ingredients for an
adjudication -- constituting a case or controversy -- were present.
Compare Interstate Commerce Comm'n v. Brimson, supra;
Interstate Commerce Comm'n v. Baird, 194 U. S.
25,
194 U. S. 38.
Judicial relief would be precisely the same as in the recognized
instances of review by courts of Commission action: if the legal
principles on which the Commission acted were not erroneous, the
bill would be ordered dismissed; if the Commission was found to
have proceeded on erroneous legal principles, the Commission would
be ordered to proceed within the framework of its own discretionary
authority on the indicated correct principles. The requisites of
equity have, of course, to be satisfied, but by the conventional
criteria. They were satisfied in the
Procter & Gamble
case, since the bill sought to avoid a multiplicity of suits.
Finally, the shipper was within the express language of Congress
authorizing suits "to enjoin, set aside, annul, . . . any order of
the Interstate Commerce Commission." To be sure, the opinion in the
Procter & Gamble case partly yielded to the
Government's main contention in that case that the jurisdictional
statute only applied where the order complained of was one which
was to be enforced by the Commission. More recent decisions of this
Court, however, have dispensed with this requisite for review.
[
Footnote 13]
Page 307 U. S. 137
The impelling consideration underlying the decision in the
Procter & Gamble case did not concern technical
procedure. It was part of the process of adjusting relations
between the Interstate Commerce Commission and the courts to
effectuate the purposes of the Commission. This is made abundantly
clear by the general atmosphere of the opinion, as well as by its
language, [
Footnote 14]
particularly when regard is had to the fact that the Court's
spokesman was Chief Justice White, who had such a large share in
developing modern administrative law. [
Footnote 15] While the
Page 307 U. S. 138
Interstate Commerce Commission had been in existence since 1887,
the enlargement of its powers through the Hepburn Act, in 1906,
[
Footnote 16] and the
Mann-Elkins Act, in 1910, [
Footnote 17] the establishment of similar agencies in
many states following the lead of New York [
Footnote 18] and Wisconsin, [
Footnote 19] the widespread recognition
that these specific instances marked a general movement, [
Footnote 20] made increasingly
manifest the place of administrative agencies in enforcing
legislative policies and called for accommodation of the duties
entrusted to them to our traditional judicial system. This Court
"ascribed" to the findings of the Commission "the strength due to
the judgments of a tribunal appointed by law and informed by
experience."
Illinois Central R. Co. v. Interstate Commerce
Comm'n, 206 U. S. 441,
206 U. S. 454.
Recognition of the Commission's expertise also led this Court not
to bind the Commission to common
Page 307 U. S. 139
law evidentiary and procedural fetters in enforcing basic
procedural safeguards. [
Footnote
21]
From these general considerations, the Court evolved two
specific doctrines limiting judicial review of orders of the
Interstate Commerce Commission. One is the primary jurisdiction
doctrine, firmly established in
Texas & Pacific Ry. Co. v.
Abilene Cotton Oil Co., 204 U. S. 426.
Thereby, matters which call for technical knowledge pertaining to
transportation must first be passed upon by the Interstate Commerce
Commission before a court can be invoked. [
Footnote 22] The other is the doctrine of
administrative finality. Even when resort to courts can be had to
review a Commission's order, the range of issues open to review
Page 307 U. S. 140
is narrow. Only questions affecting constitutional power,
statutory authority, and the basic prerequisites of proof can be
raised. If these legal tests are satisfied, the Commission's order
becomes incontestable.
Interstate Commerce Comm'n v. Illinois
Central R. Co., 215 U. S. 452,
215 U. S. 470;
Interstate Commerce Comm'n v. Union Pacific R. Co.,
222 U. S. 541.
In translating these important objectives for effectuating the
Congressional scheme to enlarge the independent powers of the
Interstate Commerce Commission into a seemingly technical
distinction between "negative" and "affirmative" orders, the
opinion in
Procter & Gamble v. United States gave
authority to a doctrine which harmonizes neither with the
considerations which induced it nor with the course of decisions
which have purported to follow it. [
Footnote 23] Subsequent cases have made it abundantly
clear that "negative order" and "affirmative order" are not
appropriate terms of art. [
Footnote 24] Thus, the Court has had occasion
Page 307 U. S. 141
to find that, while an order was "negative in form," it was
"affirmative in substance." [
Footnote 25] "Negative" has really been an obfuscating
adjective, in that it implied a search for a distinction --
non-action as against action -- which does not involve the real
considerations on which rest, as we have seen, the reviewability of
Commission orders within the framework of its discretionary
authority and within the general criteria of justiciability.
[
Footnote 26] "Negative"
Page 307 U. S. 142
and "affirmative," in the context of these problems, is as
unilluminating and mischiefmaking a distinction as the outmoded
line between "nonfeasance" and "misfeasance." [
Footnote 27]
The considerations of policy for which the notions of "negative"
and "affirmative" orders were introduced are completely satisfied
by proper application of the combined doctrines of primary
jurisdiction and administrative finality. The concept of "negative
orders" has not served to clarify the relations between
administrative bodies and the courts, but has rather tended to
obscure them. An action before the Interstate Commerce Commission
is akin to an inclusive equity suit in which all relevant claims
are adjusted. [
Footnote 28]
An order of the Commission dismissing a complaint on the merits and
maintaining the
status quo is an exercise of
administrative function, no more and no less, than an order
directing some change in status. The nature of the issues
foreclosed by the Commission's action and the nature of the issues
left open, so far as the reviewing power of courts is concerned,
are the same. Refusal to change an existing situation may, of
course, itself be a factor in the Commission's allowable exercise
of discretion. In the application of relevant canons of judicial
review, an order of the Commission directing the adoption of a
practice might raise considerations absent from a situation where
the Commission merely allowed such a practice to continue. But this
bears on the disposition of a case, and should not control
jurisdiction. The nature of judicial relief, that is, the
Page 307 U. S. 143
form of directions available, in situations like those presented
by the
Procter & Gamble and the
Lehigh Valley
cases were the Commission's orders reviewed, would be no different
than was that used in the
Inter-Mountain Rate and the
New River Co. cases. [
Footnote 29] In both types of situations, "a judgment
rendered will be a final and indisputable basis of action as
between the Commission and the defendant,"
Interstate Commerce
Comm'n v. Baird, 194 U. S. 25,
194 U. S. 38. We
conclude, therefore, that any distinction, as such, between
"negative" and "affirmative" orders, as a touchstone of
jurisdiction to review the Commission's orders, serves no useful
purpose, and, insofar as earlier decisions have been controlled by
this distinction, they can no longer be guiding.
The order of the Communications Commission in this case was
therefore reviewable. It was not a mere abstract declaration
regarding the status of the Rochester under the Communications Act,
[
Footnote 30] nor was it a
stage in an incomplete process of administrative adjudication.
The
Page 307 U. S. 144
contested order determining the status of the Rochester
necessarily and immediately carried direction of obedience to
previously formulated mandatory orders addressed generally to all
carriers amenable to the Commission's authority. Into this class of
carriers the order under dispute covered the Rochester, and, by
that fact, in conjunction with the other orders, made determination
of the status of the Rochester a reviewable order of the
Commission.
But while the Rochester had a right to challenge the order, it
cannot prevail on the merits.
The ultimate legal issue is the validity of the Commission's
finding that the Rochester "is under the control of the New York
Telephone Company." The justification for this finding clearly
emerges from a rapid summary of the governing facts adduced before
the Commission concerning the relationship between the New York and
the Rochester.
Prior to 1920, an independent telephone company and the New York
(which was part of the Bell system) were competitors in Rochester.
As part of an endeavor to meet an arrangement which the Bell system
had, in 1913, made with the Department of Justice, the details of
which need not here be recited, the Rochester was formed to
consolidate the two previously competing enterprises. The property
of the independent was paid for by bonds of the Rochester, and the
property of the New York by preferred stock, later designated as
second preferred, of which the New York had the entire issue,
48,140 shares at $100 par. The Rochester issued 1000 shares of
common stock at $100 par, of which the New York purchased 335
shares. The New York also paid the officers of the independent
company $70,000 for their services in consummating the
consolidation, but $66,500 of this amount was to be used in
purchasing the remaining 665 shares of common stock
Page 307 U. S. 145
for deposit in a voting trust. Other outstanding securities of
the Rochester, first preferred stock and bonds, neither of which
had any voting rights, were held by the public. There were
complicated limitations upon the voting rights of the second
preferred stockholders, but the dominating circumstances touching
voting rights were that, in major matters, no vote of stockholders
could be effective unless concurred in by eighty percent of the
common stock and that the Executive Committee and the Board of
Directors were elected by cumulative voting of the common stock,
thereby assuring New York five out of fifteen members of the Board
of Directors and two members in an Executive Committee of five.
Putting all these factors in the context of the circumstances
under which the Rochester came into being, the manner in which it
was financed, the operation of the voting trust, and the stake of
the New York in the Rochester, the Commission, after full hearing
and due consideration, concluded that
"the New York Company, through stock ownership, is the dominant
financial factor in the respondent company and also that this,
taken together with their contractual arrangements and other
pertinent facts and circumstances appearing in the record,
unquestionably gives the New York Company power to control the
functions of the Rochester Telephone Corporation."
The record amply justified the Communications Commission in
making such findings. Investing the Commission with the duty of
ascertaining "control" of one company by another, Congress did not
imply artificial tests of control. [
Footnote 31] This is an issue of fact to be determined by
the special circumstances of each case. So long
Page 307 U. S. 146
as there is warrant in the record for the judgment of the expert
body, it must stand. The suggestion that the refusal to regard the
New York ownership of only one third of the common stock of the
Rochester as conclusive of the former's lack of control of the
latter should invalidate the Commission's finding disregards
actualities in such intercorporate relations. Having found that the
record permitted the Commission to draw the conclusion that it did,
a court travels beyond its province to express concurrence
therewith as an original question. "The judicial function is
exhausted when there is found to be a rational basis for the
conclusions approved by the administrative body."
Mississippi
Valley Barge Line Co. v. United States, 292 U.
S. 282,
292 U. S.
286-287;
Swayne & Hoyt, Ltd. v. United
States, 300 U. S. 297,
300 U. S. 303
et seq.
MR. JUSTICE McREYNOLDS concurs in the result.
[
Footnote 1]
On November 13, 1935, the order was amended in matters not here
relevant.
[
Footnote 2]
The hearing before the examiner lasted two days; 221 pages of
testimony were taken and 34 exhibits were introduced.
[
Footnote 3]
Under
United States v. Corrick, 298 U.
S. 435,
298 U. S. 440,
and
United States v. Griffin, 303 U.
S. 226,
303 U. S. 229,
the doctrine of "negative orders" implies a jurisdictional defect
which courts must consider
sua sponte.
[
Footnote 4]
All except one of the prior decisions of this Court on the
"negative order" doctrine involved review of action by the
Interstate Commerce Commission.
United States v. Corrick,
supra, note 3 involved
review of action by the Secretary of Agriculture under the Packers
and Stockyards Act.
[
Footnote 5]
United States v. Illinois Central R. Co., 244 U. S.
82.
Compare Federal Power Commission v. Metropolitan
Edison Co., 304 U. S. 375.
[
Footnote 6]
Delaware & Hudson Co. v. United States,
266 U. S. 438.
[
Footnote 7]
United States v. Los Angeles & S.L. R. Co.,
273 U. S. 299.
[
Footnote 8]
Shannahan v. United States, 303 U.
S. 596;
compare Shields v. Utah Idaho Central R.
Co., 305 U. S. 177,
305 U. S.
182-184.
[
Footnote 9]
Hayburn's Case,
2 Dall. 409, is the symbol for considerations which limit the
constitutional power of the federal courts, though that case itself
self never reached adjudication.
See
also United States v.
Ferreira, 13 How. 40;
Muskrat v. United
States, 219 U. S. 346.
[
Footnote 10]
Prior to Section 7 of the Act of March 3, 1891, 26 Stat. 828,
authorizing an appeal to the Circuit Court of Appeals from a decree
granting a preliminary injunction, review in a case not involving a
final judgment was unknown in the federal judicial system except
insofar as it was present in the practice of certification
introduced by § 6 of the Act of April 29, 1802, 2 Stat. 159.
See United States v.
Bailey, 9 Pet. 267. For state court decisions the
requirements for finality of the original Judiciary Act have been
adhered to. § 237, Judicial Code as amended, 28 U.S.C. § 344.
Review of action of the federal district courts not involving final
judgments can be had only in a limited class of cases dealing with
interlocutory injunctions, receiverships, and criminal appeals. §§
129 and 238 of the Judicial Code as amended, 28 U.S.C. § 227, 345.
This Court, however, may take jurisdiction on certiorari before the
appellate jurisdiction of the circuit court of appeals is
exhausted.
[
Footnote 11]
The
Lehigh Valley case apparently originated the
statement, often made in "negative order" cases, that the risk
results from the statute, not from the order. But this formula
hardly squares with the actualities of the situation in that case.
The Panama Canal Act, paragraphs 19-21 of § 5 of the Act to
Regulate Commerce, as amended, forbade community of interest
between any common carrier subject to the Act and a competing water
carrier. Under paragraph 20, jurisdiction was conferred on the
Commission to determine questions of fact as to the existence of
actual or potential competitive conditions, either on the
application of the carrier or on the Commission's motion, its
determination to be final. Under paragraph 21, the Commission was
given jurisdiction to extend the time within which operations
otherwise prohibited by the statute might be carried on after July
1, 1914, if such extension did not reduce competition and benefited
the public. After receipt of notice of the Act from the Commission,
the Lehigh applied to the Commission for a ruling that it was not
subject to the Act, or, the alternative, for an extension. The
Commission issued an order subjecting the Lehigh to the Act and
denying an extension. Thereupon the Lehigh brought a suit to set
aside this order and to enjoin the Commission from enforcing
it.
As a practical matter, the risk of prosecution to which the
Lehigh was subjected if it wished to continue to operate its boats
was the result of the order. Since the Panama Canal Act provided
that the Commission should find the facts under it, there could
have been no prosecution without a previous finding by the
Commission that the Lehigh was within the Act; once such a finding
was made, it was subject to the rule of administrative finality.
Compare Keogh v. Chicago & N.W. Ry. Co., 260 U.
S. 156. Therefore, the Commission's order that the
Lehigh was subject to the Panama Canal Act was responsible for the
risk, as much so as if it had expressly commanded the Lehigh to
stop running its boat lines. And assuming the Lehigh was within the
prohibition of the statute, the Commission's order denying an
exception had the same practical effect as a direct command.
Inter-Mountain Rate Case, 234 U.
S. 476, 34 S.
Piedmont & Northern Ry. Co. v. United States,
280 U. S. 469,
presents a more complicated situation. Section 1 (18-22) of the Act
to Regulate Commerce, as amended, prohibits any common carrier by
rail subject to the Act from extending its lines or constructing
new lines without a certificate of convenience and necessity. This
requirement did not apply to "interurban electric railways, which
are not operated as a part or parts of a general steam railroad
system of transportation." Upon an application for a certificate by
the Piedmont & Northern, coupled with a motion to dismiss on
the ground that it was an "interurban electric" railway, for which
no certificate was required, the Commission denied the motion to
dismiss and denied the certificate on the merits. The bill to
enjoin the Commission from taking any proceedings against the
Piedmont & Northern under this order attacked the action of the
Commission solely on its assumption of jurisdiction. The Court held
the order was not reviewable, on the ground that the order did not
adjudicate the railroad's status, did not command it to do
anything, but only had the effect of increasing the Piedmont's
doubts as to the correctness of its construction of the statute. To
be sure, statutory construction is a judicial function. But this is
to view the matter too abstractly. For the Commission itself had
instituted the system whereby it requested preliminary submission
to it of the status of interurban roads. Such a decision was at
least the equivalent of a threat of prosecution under the statute,
and, in fact, considerable weight is given to administrative
practice in ascertaining the meaning of such legislation.
Compare United States v. Village of Hubbard, 266 U.
S. 474.
[
Footnote 12]
The initial decision in this group of cases, the
Inter-Mountain Rate Case, 234 U.
S. 476, held reviewable the action of the Commission in
refusing to grant requested consent to depart from the long-short
haul clause. (§ 4 of the Act to Regulate Commerce, as amended.)
While this case would seem to control the
Lehigh Valley
case, and at least to be persuasive in the
Piedmont &
Northern case, it was not mentioned them. After these two
cases, subsequent decisions in this group indicated that the
"negative order" doctrine might prevent review of the refusal by
the Secretary of Agriculture to accept rates for filing, the
Packers and Stockyards Act, prohibiting the charging of rates
except those on file with the Secretary,
United States v.
Corrick, 298 U. S. 435, and
of the refusal to grant an increase in rates of compensation for
carrying of mail, the Railway Mail Pay Act of 1916, requiring the
carrier to carry the mail at the rate set,
United States v.
Griffin, 303 U. S. 226. But
in both these decisions, the result reached was supported by
factors irrelevant to the present discussion. On the other hand, in
Powell v. United States, 300 U. S. 276,
action of the Commission, striking from its files a tariff on the
ground that a point was not served by the carrier was held subject
to review as a command to the railway which had filed the tariff
not to give the service covered by the tariff.
[
Footnote 13]
The Chicago Junction Case, 264 U.
S. 258;
Venner v. Michigan Central R. Co.,
271 U. S. 127;
Colorado v. United States, 271 U.
S. 153;
Claiborne-Annapolis Ferry Co. v. United
States, 285 U. S. 382;
United States v. Idaho, 298 U. S. 105.
[
Footnote 14]
". . . we have learned of no instance where it was held or even
seriously asserted that, as to subjects which in their nature were
administrative and within the competency of the Commission to
decide, there was power in a court, by an exercise of original
action, to enforce its conceptions as to the meaning of the act to
regulate commerce by dealing directly with the subject,
irrespective of any prior affirmative command or action by the
Interstate Commerce Commission. On the contrary, by a long line of
decisions, whereby applications to enforce orders of the Commission
were considered and disposed of, or where requests to restrain the
enforcement of such orders were passed upon, it appears by the
reasoning indulged in that it was never considered that there was
power in the courts as an original question, without previous
affirmative action by the Commission, to deal with what might be
termed in a broad sense the administrative features of the act to
regulate commerce by determining as an original question that there
had been a compliance or noncompliance with the provisions of the
act."
225 U.S. at
225 U. S.
296-297.
". . . the recognition of a right in a court to assert the power
now claimed would, of necessity, amount to a substitution of the
court for the Commission, or, at all events, would be to create a
divided authority on a matter where, from the beginning, primary
singleness of action and unity was deemed to be imperative."
225 U.S. at
225 U. S.
298-299.
[
Footnote 15]
See Chief Justice Taft's estimate of the services of
Chief Justice White in "a new field of administrative law":
"The capital importance which our railroad system had come to
have in the welfare of this country made the judicial construction
of the interstate commerce act of critical moment. It is not too
much to say that Chief Justice White, in construing the measure and
its great amendments, has had more to do with placing this vital
part of our practical government on a useful basis than any other
judge. His opinions in the case of the
Texas & Pacific
Railway Co. v. Abilene Cotton Oil Co. and the cases which
followed it are models of clear and satisfactory reasoning which
gave to the people, to state legislatures, to Congress, and the
courts a much-needed knowledge of the practical functions the
Commerce Commission was to discharge, and of how they were to be
reconciled to existing governmental machinery, for the vindication
of the rights of the public in respect of national transportation.
They are a conspicuous instance of his unusual and remarkable power
and facility in statesmanlike interpretation of statute law."
Proceedings on the Death of Chief Justice White, 257 U.S. v.
xxv.
[
Footnote 16]
34 Stat. 584.
[
Footnote 17]
36 Stat. 539.
[
Footnote 18]
Laws of New York, One Hundred and Thirtieth Session, c. 429
(1907).
[
Footnote 19]
Wisconsin Laws of 1907, c. 499, St.1911, § 1797m-1
et
seq.
[
Footnote 20]
See, e.g., Hughes, Some Aspects of the Development of
American Law 1916, 39 N.Y.B.A.Rep. 266, 269-270; Root, Public
Service by the Bar, 1916, 41 A.B.A.Rep. 355, 368-369; Sutherland,
Private Rights and Government Control, 1917, 42 A.B.A.197.
[
Footnote 21]
Interstate Commerce Comm'n v. Baird, 194 U. S.
25,
194 U. S. 44;
Interstate Commerce Comm'n v. Louisville & Nashville R.
Co., 227 U. S. 88,
227 U. S. 93;
United States v. Abilene & Southern Ry. Co.,
265 U. S. 274,
265 U. S. 288;
compare Douglas v. Noble, 261 U.
S. 165,
261 U. S.
169.
"It is, perhaps, not too much to say that not a single case
arising before the Commission could be properly decided if the
complainant, the railroad, or the Commission were bound by the
rules of evidence applying to the introduction of testimony in
courts."
Twenty-second Annual Report of the Interstate Commerce
Commission 10.
[
Footnote 22]
See also, e.g., Baltimore & Ohio R. Co. v. United
States, ex rel. Pitcairn Coal Co., 215 U.
S. 481;
Robinson v. Baltimore & Ohio R.
Co., 222 U. S. 506;
United States v. Pacific & Arctic Co., 228 U. S.
87;
Texas & Pacific Ry. Co. v. American Tie
Co., 234 U. S. 138;
Northern Pacific Ry. Co. v. Solum, 247 U.
S. 477;
Director General v. Viscose Co.,
254 U. S. 498;
Dayton-Goose Creek Ry. Co. v. United States, 263 U.
S. 456;
Western & Atlantic R. Co. v. Georgia
Public Service Comm'n, 267 U. S. 493;
Midland Valley R. Co. v. Barkley, 276 U.
S. 482;
Board of Railroad Comm'rs v. Great Northern
Ry. Co., 281 U. S. 412. The
doctrine has been given general application,
e.g., United
States Navigation Co. v. Cunard Steamship Co., 284 U.
S. 474 (Shipping Board);
Myers v. Bethlehem
Shipbuilding Corp., 303 U. S. 41
(National Labor Relations Board).
Compare also Prentis v.
Atlantic Coast Line Co., 211 U. S. 210;
Anniston Mfg. Co. v. Davis, 301 U.
S. 337.
[
Footnote 23]
In
Manufacturers' Railway Co. v. United States,
246 U. S. 457, the
Court treated as reviewable the action of the Commission in failing
to require an absorption of switching charges or a requested joint
rate, but held not reviewable refusal to fix divisions. In part,
this may have been on the theory that the issue of the divisions
was not properly before the Commission.
See 246 U.S. at
246 U. S.
482-483. In
United States v. New River Co.,
265 U. S. 533, the
Court held reviewable the action of the full Commission dismissing
a complaint by a shipper against certain car practices held invalid
by one division of the Commission.
Standard Oil Co. v. United
States, 283 U. S. 235,
held not reviewable the action of the Commission refusing to grant
reparations, but the main basis of the decision was not the
"negative order" doctrine, but the statutory scheme dealing with
reparations. In
Alton R. Co. v. United States,
287 U. S. 229, the
Court held reviewable the action of the Commission refusing to
interfere with divisions set by a railroad in violation of a
previous agreement, the Court stating that the action of the
Commission validated divisions which were previously invalid.
See 287 U.S. at
287 U. S.
236-237.
[
Footnote 24]
The only test which can be derived from the cases in notes
11-13 23 supra, is that an order is
"affirmative" if it has the legal effect of changing the
status
quo, permitting what was previously not allowed or compelling
what was previously not required. But, on this test, the order in
the
Lehigh Valley case was "affirmative." The decision in
the
New River Co. case could hardly be hung on such a
gossamer thread as this test, since there, the only change in the
status quo resulting from an order considered
"affirmative" was that the order of the full Commission held
unobjectionable a car practice which was the subject of complaint.
A division of the Commission in the same proceeding had stated that
the practice was invalid, and should be abandoned, and it was
abandoned. After the full Commission found the practice not invalid
and dismissed the complaint, the practice was adopted again.
[
Footnote 25]
See Alton R. Co. v. United States, 287 U.
S. 229,
287 U. S.
235.
[
Footnote 26]
This becomes clear on analysis of the precise problem presented
in the
Procter & Gamble case. It was a dispute between
shippers who owned private cars and those who did not as to the
distribution of the cars owned by the carriers. The Commission was
called upon to resolve that economic conflict by virtue of its
authority to prevent practices which unfairly discriminated against
one group at the expense of the other. Its final decision was based
on a comprehensive policy concerning the place of private cars in
our transportation system. Had the prior practice of the carriers
been inconsistent with this policy, and the order of the Commission
compelled a change, the private car shippers would admittedly have
been entitled to test the validity of the Commission ruling in the
courts, subject, of course, to the canons of administrative
finality. It seems capricious that the fact that the Commission's
order authorized the preservation of the
status quo should
block any review at all. The force of this reasoning is emphasized
when it is realized what small factors may determine whether the
status quo has been changed --
e.g., a difference
of views within the Commission, as in the
New River Co.
case,
supra, note
24 See the opinion of the Commerce Court sustaining
reviewability in
Procter & Gamble Co. v. United
States, 188 F. 221.
[
Footnote 27]
The Restatement of Torts does not employ this nomenclature.
See also 7 Labatt, Master and Servant § 2586.
[
Footnote 28]
Compare Inland Steel Co. v. United States, 306 U.
S. 153: ". . . the Commission was acting in the interest
of shippers generally and in behalf of the public and the national
railroad system."
[
Footnote 29]
In the
Procter & Gamble case, the judicial relief
asked was that the order of the Commission dismissing the complaint
against the demurrage rules be annulled, and that the carriers be
enjoined from applying those rules. In the
New River Co.
case, the judicial relief asked was that the car rule under attack
be adjudged invalid, that the order of the Commission dismissing
the complaint against it be adjudged invalid, that the carriers be
enjoined from complying with the rule, and that the Commission be
enjoined from restricting the commerce of the complainants by its
order and by the rule.
In the
Lehigh Valley case, the judicial relief asked
was that the enforcement of the order of the Commission and the
institution of any proceedings thereunder against the complainant
be enjoined. In the
Inter-Mountain Rate case the judicial
relief asked was that the order of the Commission be set aside,
that § 4 of the Act to Regulate Commerce be declared invalid, and
that the Commission and the Attorney General be enjoined from
taking any proceedings to prosecute the carriers for violation of §
4.
[
Footnote 30]
Compare United States v. Atlanta, B. & C. R. Co.,
282 U. S. 522.
[
Footnote 31]
See House Report 1850, 73d Cong., 2d Sess., 4, 5;
compare 78 Cong.Rec. 8446. 8446.
MR. JUSTICE BUTLER, concurring.
Appellant's complaint shows that, prior to making its final
order November 18, 1936, the commission made general orders 1, 2,
3, 5, 6a and 9, directing that every telephone carrier subject to
the Act file statements concerning its business and affairs.
Declining to recognize the Act as applying to it, appellant
withheld compliance. T he commission ordered it to obey or to file
answer setting forth the facts on which it relied as justification
for failure so to do. Appellant then applied to the commission for
determination that it is not subject to the Act or the commission's
jurisdiction because exempted under § 2(b)(2). After hearing, the
commission made the final order declaring appellant subject to all
common carrier provisions of the Act "and therefore subject to all
orders of the Telephone Division applicable to wire telephone
carriers . . ."
Page 307 U. S. 147
Thus, plainly it made the general orders above mentioned
applicable to appellant.
The complaint challenged the validity of these orders on the
ground,
inter alia, that appellant as a matter of law is,
and by the evidence and facts found by the commission is shown to
be, not subject to any of them. The prayer is for decree "setting
aside and annulling said orders . . . and each and all of them and
enjoining the enforcement of" them. In the district court,
appellees raised no question as to its jurisdiction. But here they
argue: the commission's determination classifying the appellant as
subject to its jurisdiction and to the general orders is not an
order reviewable under the terms of the Urgent Deficiencies Act of
1913; the determination neither commands nor directs appellant to
do or refrain from doing anything; the commission could not have
instituted a proceeding to enforce it, and consequently the court
has no jurisdiction to set it aside.
The final order is much more than a mere determination that
appellant is subject to the Act. When read, as it must be, in
connection with the general orders, it unmistakably puts appellant
under a series of affirmative mandates which, if valid, may be
enforced under the Act.
See 47 U.S.C. §§ 401, 409, 501,
502; 28 U.S.C. § 47, made applicable by 47 U.S.C. § 402(a). These
unequivocally impose upon appellant burden and expense of preparing
and reporting to the commission a vast amount of statistical and
other information.
The case presents no debatable question as to the jurisdiction
of the district court. A statement of the facts alleged
conclusively shows that, in purpose, terms, and effect, the final
order constitutes not mere determination or declaration, but
affirmative commands. There is no occasion to review earlier
decisions dealing with affirmative and negative administrative
orders, and obviously
Page 307 U. S. 148
none to overrule any of them or to repudiate or impair the
doctrine they establish.
* The Court's
discussion, extraneous to the issue involved, confuses, rather than
clarifies.
The findings of the district court are amply sustained by the
evidence, and its decree should be affirmed.
MR. JUSTICE McREYNOLDS, concurs in this opinion.
*
See e.g., Procter & Gamble Co. v. United States,
225 U. S. 282,
225 U. S. 292
et seq.; Hooker v. Knapp, 225 U.
S. 302; United States v. Baltimore & Ohio R. Co.,
225 U. S. 306,
225 U. S.
320; Lehigh Valley R. Co. v. United States,
243 U. S.
412; United States v. Illinois Cent. R. Co.,
244 U. S. 82,
244 U. S.
89; Chicago Junction Case,
264 U.
S. 258, 264 U. S.
263-264; United States v. New River Co.,
265 U. S. 533,
265 U. S.
539-541; Delaware & Hudson Co. v. United
States,
266 U. S. 438,
266 U. S.
448; Minneapolis & St.L. R. Co. v. Peoria Ry.
Co.,
270 U. S.
580; Colorado v. United States,
271 U.
S. 153, 271 U. S.
161; United States v. Los Angeles & St.L. R.
Co.,
273 U. S. 299,
273 U. S.
309; Gt. Northern Ry. Co. v. United States,
277 U. S.
172; Piedmont & Northern Ry. Co. v. United
States,
280 U. S. 469,
280 U. S.
475-477; United States v. Atlanta, B. & C. R.
Co.,
282 U. S.
522; Standard Oil Co. v. United States,
283 U. S.
235; Alton R. Co. v. United States,
287 U. S.
229; United States v. B. & O. R. Co.,
293 U. S.
454; Powell v. United States,
300 U.
S. 276, 300 U. S.
284; United States v. Griffin,
303 U.
S. 226, 303 U. S.
232 et seq.;
Shannahan v. United States,
303 U. S. 596,
303 U. S.
599