Burlington Northern Inc. v. United States
Annotate this Case
459 U.S. 131 (1982)
U.S. Supreme Court
Burlington Northern Inc. v. United States, 459 U.S. 131 (1982)
Burlington Northern Inc. v. United States
Argued November 3, 1982
Decided December 13, 1982
459 U.S. 131
In 1974, San Antonio, Tex., negotiated with petitioner railroads to transport to San Antonio coal purchased under long-term contracts in Wyoming for use in the city's coal-fired electricity generating plants. Because it was not satisfied with the railroads' quoted rate for moving the coal, San Antonio filed a complaint with the Interstate Commerce Commission (ICC). In 1976, the ICC issued a temporary order, subject to modification, establishing a rate of $10.93 per ton. In 1978, on petition of the railroads, the ICC ordered the rate raised to $16.12 per ton. But both San Antonio and the railroads were dissatisfied, and in 1979, the ICC issued a third order resulting in a rate of $17.23 per ton. The railroads then filed tariffs at this rate. Petitions for review of the 1978 and 1979 orders were filed by all parties in the Court of Appeals for the District of Columbia Circuit, which, in 1980, decided that both orders were arbitrary and capricious, and accordingly vacated them and remanded to the ICC. The parties disagreed about the effect of this decision on the filed tariffs pending the ICC's decision on remand, the railroads continuing to treat the $17.23 rate as the one San Antonio was required to pay, and San Antonio claiming that the $10.93 rate was revived. The railroads then asked the Court of Appeals for clarification of its decision. Ultimately, after the parties, pending review, had carried on their controversy in other forums, including the ICC, which, in 1981, vacated the 1976 order, the Court of Appeals, later in 1981, held that, since it was without authority to determine interim policy pending remand proceedings in the ICC, the effect of the court's 1980 decision was necessarily to reinstate the 1976 order, which was "revived" by the vacation of the 1978 and 1979 orders, and that therefore tariffs set in excess of the 1976 rate were "unlawful" for the period after the court vacated the 1978 and 1979 orders, but before the ICC formally vacated the 1976 order.
Held: The Court of Appeals should have deferred to the ICC on questions concerning the applicable rates. Pp. 459 U. S. 138-144.
(a) Under the Interstate Commerce Act, primary jurisdiction to determine the reasonableness of rates lies with the ICC. Federal court authority to reject ICC rate orders extends to the orders alone, and not
to the rates. Where there is a dispute about the appropriate rate, the equities favor allowing the carriers' rate to control pending a decision by the ICC, since, under the Act, the shipper may receive reparations for overpayment, while the carrier can never be made whole after underpayment. Pp. 459 U. S. 138-142.
(b) By declaring that the 1976 rate order was "revived" for the period indicated, the Court of Appeals did what a federal court may not do, i.e., freeze the rate the railroads charge shipper prior to a decision by the ICC as to what a reasonable rate should be. This undermines the ICC' ability to exercise its primary jurisdiction to insure equitable and uniform rate. Moreover, the Court of Appeals' determination requires the railroads to accept a return that was considered temporary when it was approved in 1976, and "below a maximum reasonable rate" when it was modified in 1978. If the court was unsure about the continued vitality of the 1976 order, the more appropriate course would have been to remand to the ICC for explanation, rather than to undertake itself to construe the order, and in so doing interfere with the ICC's primary jurisdiction. In striking the 1978 and 1979 orders, the court's action operated to leave in effect the rates filed under the ICC's authority pending the ICC's redetermination of a reasonable rate and subject to reparations to protect the shipper should the ICC find that these rates were too high. Pp. 459 U. S. 142-144.
211 U.S.App.D.C. 111, 655 F.2d 1341, reversed.
BURGER, C.J., delivered the opinion for a unanimous Court.