In a suit to set aside an order of the Interstate Commerce
Commission declaring that
per diem rates charged by all
railroads for the rental of freight cars to other railroads were
not in excess of reasonable compensation, the District Court held
that the Commission had adjudicatory jurisdiction under § 5(d) of
the Administrative Procedure Act to issue an order, but it set
aside the order and remanded the matter to the Commission for
further proceedings on the ground that the Commission had erred in
rejecting, without more thorough investigation and more detailed
findings, another method of compensation urged by some railroads as
being more equitable.
Held:
1. The appeal in No. 310 prematurely presented for decision the
question whether the Commission had adjudicatory jurisdiction to
determine a rate of uniform application throughout the industry or
whether such a rate could be fixed only through the exercise of its
rulemaking power under § 1(14)(a) of the Interstate Commerce Act,
and the appeal is dismissed without prejudice to raising that issue
again if it survives further Commission proceedings. Pp.
358 U. S.
69-72.
2. This also requires dismissal of the appeal in No. 322, which
challenged the scope of the District Court's review. P.
358 U. S.
72.
162 F.
Supp. 289, appeal dismissed.
Page 358 U. S. 69
PER CURIAM.
These cases concern the range of the Interstate Commerce
Commission's power over rates for car hire in railroading. Because
they predominantly originate freight, long-haul trunkline railroads
own most of the freight cars in the industry. Short-haul terminal
railroads, on the other hand, mainly terminate freight; to avoid
needless duplication, they hire the cars of the long-haul roads
rather than replace them with their own. The compensation to be
paid for use of another's cars has, for the most part, been fixed
by the railroads themselves, originally in terms of the mileage
which borrowed cars traveled over the using road, later in the form
of a flat
per diem rate. Since September 1, 1947, the
amount of the
per diem has been adjusted in accordance
with an agreement prepared by the Association of American Railroads
(AAR). Prior to this litigation, the rates so established were
followed by railroads generally, signers and nonsigners of the
agreement alike.
In March, 1951, the New York, Susquehanna & Western Railroad
announced that it would no longer comply with
Page 358 U. S. 70
the then applicable
per diem. Other terminal roads soon
followed suit. In response, nineteen Class I long-haul roads filed
a complaint with the Commission against five short-haul roads of
the same Class and six short-line roads in Classes II and III.
Additional roads intervening on one side or the other brought the
total number involved to just over one hundred.
The complainants specifically declined to invoke the
Commission's recognized rulemaking power over car-hire rates
conferred by § 1(14)(a) of the Interstate Commerce Act, 40 Stat.
101, as amended, 41 Stat. 476, 49 U.S.C. § 1(14)(a). Instead, they
asked the Commission to declare that the various
per diems
in effect since November 1, 1949, were just and reasonable, and
that the public interest required uniform observance of those rates
by all members of the industry. Relying on the power to issue
declaratory orders granted by § 5(d) of the Administrative
Procedure Act, 60 Stat. 240, 5 U.S.C. § 1004(d), the Commission
held each
per diem not in excess of reasonable
compensation. Accordingly, it entered an order discontinuing the
proceeding.
The terminal roads then brought an action before a statutory
three-judge District Court to have this order set aside. As the
court below noted, the effect of the Commission's action was
"to require the respondent [terminal] carriers, and, indeed, as
a practical matter all others, to pay the charges for car use found
to be reasonably compensatory. . . ."
162 F.
Supp. 289, 292-293, note 4. The terminal roads contended that
determination of a uniform rate to be applied throughout the
industry was beyond the Commission's adjudicatory jurisdiction, and
lay exclusively within its § 1(14)(a) rulemaking power.
This contention, which forms the basis of the appeal in No. 310,
was rejected by the District Court, one judge dissenting.
Nonetheless, that court set aside the Commission's
Page 358 U. S. 71
order on the merits. It pointed out that the Commission had
erred in considering the repairs, depreciation and "car day
divisor" components of the
per diem. But it rested
decision on the Commission's summary rejection of an alternative
method of compensation, which would introduce a mileage factor into
the
per diem, advocated by certain of the terminal roads.
In the Commission's view, that plan, like the other
"suggested plans for varying
per diem charges could not
be put into effect without an extensive investigation either by
this Commission or by the A.A.R. The facts and arguments here
presented are not persuasive that plans of this kind are
desirable."
297 I.C.C. 291, 296. The District Court, on the other hand,
thought the mileage factor approach had much to recommend it on its
face, and ruled:
"In advance of a more thorough study, we do not see the basis
for the Commission's broad conclusion that the plan is both
impractical and undesirable. To perform our function in the face of
the persuasive evidence that the plan is both desirable and
feasible, we must have at least some inkling of the basis for the
Commission's general conclusions to the contrary. In short, we
think the Commission erred in brushing aside a matter of such
importance to so many vital links in our transportation system with
little more than a casual wave of the hand."
162 F. Supp. at 298.
In its memorandum before this Court, the Commission has
expressed its readiness to "proceed in accordance with the terms of
the remand." As a result, we find the question raised by No. 310 --
whether the Commission has adjudicatory jurisdiction to determine a
rate of uniform application throughout the industry, or must engage
in what the District Court characterized as the "full scale
investigation" accompanying promulgation of a rule
Page 358 U. S. 72
under § 1(14) (a) -- prematurely presented for decision. The
Commission here recognizes the "further investigation" and "more
detailed findings" will be requisite to compliance with the
District Court's remand. Should such proceedings lead the
Commission to reconsider its estimate of the desirability of a
per diem embracing a mileage factor, the result might well
be not a declaration that the present
per diem is just and
reasonable, but the establishment of a new rate. If, conversely,
the Commission adheres to its original view, it will be in the
light of new findings derived from its further investigation. In
either event, the proceedings on remand may lose the
characteristics of a § 5(d) declaration and take on those of a §
1(14)(a) rulemaking procedure, thereby causing the question now
sought to be reviewed to disappear. As the Commission has
appropriately observed, the record now presents what is essentially
only "an interim ruling."
These considerations lead us to dismiss the appeal in No. 310
without prejudice to raising the "adjudicatory" issue again if it
survives the further Commission proceedings. This also disposes of
No. 322, which is a cross-appeal by the long-haul roads challenging
the scope of the District Court's review.
It is so ordered.
* Together with No. 322,
Chicago, Burlington & Quincy
Railroad Co. et al. v. Boston & Maine Railroad et al.,
also on appeal from the same Court.