A. L. Mechling Barge Lines, Inc. v. United States

PETITIONER:A. L. Mechling Barge Lines, Inc.
RESPONDENT:United States
LOCATION:Brown Shoe Co.

DOCKET NO.: 41
DECIDED BY: Warren Court (1958-1962)
LOWER COURT:

CITATION: 368 US 324 (1961)
ARGUED: Nov 08, 1961 / Nov 09, 1961
DECIDED: Dec 18, 1961

Facts of the case

Question

  • Oral Argument – November 08, 1961
  • Audio Transcription for Oral Argument – November 08, 1961 in A. L. Mechling Barge Lines, Inc. v. United States

    Audio Transcription for Oral Argument – November 09, 1961 in A. L. Mechling Barge Lines, Inc. v. United States

    — United States.

    Mr. Hayes, you may continue your argument.

    Edward B. Hayes:

    May I should like to call attention to the report of the late great Joseph B. Eastman on this form of rail rate competition with water carriers which shows that — about what it is, a means of financing lower rail rate competition with water carriers by revenue — rail revenue derived from none water competitive rail transportation, both with respect to the short-haul rate and the great reservoir of non-competitive traffic which the railroads have generally, and to — yes sir.

    Charles E. Whittaker:

    May, I ask you please, is this matter in contest now?

    Does not the Solicitor General concede your point?

    Edward B. Hayes:

    Not quite, Your Honor.

    And may I refer directly to that having said what I have said.

    The Solicitor General’s concession is put in a form which is confusingly broader than any issue that is presented in this case.

    Let me lead up to that if I may, I referred to the fact that after insisting in the lower court on the validity of the Commission’s procedures in all respects, both with respect to the necessity of findings and also with respect to the necessity of hearings before on a contested issue or uncontested issues, a binding order is made without giving the hearing that the Commission admitted the needs because it orders one — insisted in the lower court on the validity of its procedures on both those points, then the Solicitor General concedes that as to the necessity of findings — it, the Commissioner, has for some years been following a practice which is contrary to law.

    That admission is made in very broad terms.

    But the insistencies that there should be no consideration as to whether the Commission has not also been following a procedure for years.

    Some few years last past that is contrary to law with respect to the necessity of those hearings in these circumstances.

    It is in these circumstances that we urge that findings are necessary and that hearings are necessary.

    Charles E. Whittaker:

    I thought he conceded that?

    Edward B. Hayes:

    No sir, he did not concede that hearings were necessary.

    He conceded only that findings were necessary, and asked that this Court not even consider whether the Commission had not also been departing from legally required procedures with respect to the necessity of hearings.

    Charles E. Whittaker:

    Isn’t it true that before findings could be made, some hearing would have to precede?

    Edward B. Hayes:

    That sir is my position.

    He does not concede it.

    As a matter of fact he asked this Court not to pass on that point, but to allow the Commission to proceed without review on the short-term orders which have so long escaped preview by the means that I described yesterday.

    Changing the situation when the immediate practice — immediate instance of the unlawful practice is the same.

    That is the essence of this case.

    It is the recurrent nature of these illegalities in short-term orders escaping review that makes it necessary for that to be a review here against the contention that there is no longer any controversy because the particular instance of the unlawful practices (a) findings — no findings, (b) no hearing has lapsed by virtue of something engineered for the railroad defendants.

    This Court said in the Southern Pacific Terminal cases, I cannot put my argument in better language than that of the Court in that case.

    The questions involved in orders of the Interstate Commerce Commission now usually continuing as are manifestly those in the case at bar.

    And their consideration ought not to be as they might be defeated by short-term orders capable of repetition, yet evading review, that at one time the Government and in another time the carriers, have their right determined by the Commission without a chance of regress.

    There was a situation in which the order before the Commission, had order of the Commission had expired by its terms.

    It had been entered for two years only, and the two years were up and the argument of the Commission was there as yet, but the case was moot.

    That was the answer that this Court returned in a situation of short-term orders that goes straight to the circumstances of this existing continuing controversy.

    Charles E. Whittaker:

    On that case, as I understand it and the ones like it go to the question of mootness, but if you get over that and reach the merits, then does not the Solicitor General practically concede your position on the merits?

    Edward B. Hayes:

    Your Honor, I think he does.

    It seems to me that to say that the findings of fact are necessary and yet, that it is not necessary to hold the hearing which the Commission admittedly the needs to make those findings which are to be decisive of its action, before it takes action, binding action, action that can’t be collaterally attacked that continues for years, although it’s called temporary while the hearings are postponed.

    It seems to me that is an impossible position.

    John M. Harlan II:

    I don’t see why his position on that, now Lower court grants a temporary injunction in its finding.

    Edward B. Hayes:

    Your Honor —

    John M. Harlan II:

    Not only that but they are not progressed, or don’t follow progress hearings.

    Edward B. Hayes:

    Thank you for raising that.

    Let me urge the point that I have made in my brief.

    These so-called temporary orders are the diametrical opposite of the relief traditionally granted by Chancery to maintain the status quo pending the hearing.

    These so-called temporary orders changed the status quo.

    At once before the hearing by a determination on findings now admitted to be necessary are precisely the issues on which any such binding order, changing status quo, injury and immediate injury of one of the parties would have to depend.

    It’s hard to concede how anyone could defend that kind of a practice.

    It is just reminiscent of the famous trial in Lewis Carroll’s satire which the order of procedure was, “Sentence first, verdict afterwards.”

    It turns it upside down.

    No one would imagine that when the Commission goes to Congress and says, “We always give a man a hearing if he has a proper interest.”

    What they mean is that they dispose off his interests right at the outset merely on pleadings.

    And then so far as the facts are concerned, the hearing is long postponed.

    And the results of the Government says sometimes, “In a change of the order which had forced those issues apparently when the case was first submitted on the pleadings.”

    Now, I say the Government’s concession with respect to the necessity of those findings rarely carries with it a concession of the necessity of having a hearings.

    Charles E. Whittaker:

    Some hearings, but must it be the full definitive hearing that the final investigation resulted in?

    Edward B. Hayes:

    Thank you.

    The hearing that is required in order to maintain that basic standard of fairness which due process requires —

    Felix Frankfurter:

    Well, you don’t think that —

    Edward B. Hayes:

    — depends certainly — I beg your pardon.

    Felix Frankfurter:

    You don’t think due process requires hearing in all proceedings before the Commission?

    Edward B. Hayes:

    I have not said so Your Honor.

    Felix Frankfurter:

    No.

    Oh, you don’t think it requires it as a matter of due process in this case?

    Edward B. Hayes:

    Yes, in this case.

    Felix Frankfurter:

    Well why do you say that — the history of the Commission, the history of this Court with reference to Commission action, is full of determination, that the most abrupt, the most limited, the most empty hearing will suffice on it at all.

    Felix Frankfurter:

    No one has more often Mr. Hayes expressed this satisfaction with the kind of findings the Commission made, but no one than I have, but no one is more aware than I am, what a tickly subject that is and how disputatious the subject matter is, and how often this Court has divided with the findings of adequate or inadequate, and you blow this up into a great constitutional issue.

    Edward B. Hayes:

    Your Honor, I am — with submission beginning by urging that the Commission’s concession of the necessity of findings is confusingly far broader than the issue presented by the facts of this case.

    Here, bear with me.

    Here is a case in which the railroads ask an order to divert from these water carriers the traffic they’re moving.

    They asked that order on the basis of papers that they have spent months on amassing, interested, tendentious, disputed data.

    The water carrier is given 15 days to get something on file on Washington, all he can do is to put an issue the events that the railroads have made.

    Felix Frankfurter:

    But the water carriers don’t come to these problems like in essence though they have never heard of the issues before?

    Edward B. Hayes:

    The water —

    Felix Frankfurter:

    What they’re doing — you’ve been concerned with these, I don’t know for how many years.

    When was the case which you stated here, 1947?

    1946?

    Edward B. Hayes:

    That’s a melon color reflection to Your Honors, to the length of that time.

    Felix Frankfurter:

    Yes.

    And all I’m — that wasn’t — that remark was in the record as it suggested, that the poor innocent people barge the water carriers — didn’t know anything about it, and they only had 15 days within which to acquaint themselves.

    Edward B. Hayes:

    They had —

    Felix Frankfurter:

    There is innocence on either side?

    Edward B. Hayes:

    Your Honor, I make no protestation of perfection for any human being, but again bear with me.

    No one can prepare a showing to meet a showing that has been prepared for months in 15 days, it can’t be done.

    Felix Frankfurter:

    But these aren’t new issues either for you or the railroads, or the ICC.

    I’d like to repeat, nobody, nobody, I believe is more exactly a finding and easily ascertainable and readable findings of the Commission than I did for nearly 40 years.

    But that’s not – that doesn’t determine my view in regard to this case.

    Edward B. Hayes:

    This case Your Honor here is, one, in which the concession of the necessity of findings in every case is so broad that as it was — is put, it would include the necessity of findings even in an uncontested case, even in a case where there is no effort on the part of the railroads to do anything but protect traffic which they already have.

    There — even where the protest is filed by one who has no profit interest, even where the protest is — there should be findings as I suppose as to the interest to show why no hearing is granted even then, under this concession.

    But there — it is so broad as to include every kind of a Fourth Section proceeding.

    Now —

    Felix Frankfurter:

    I have been instructed by this Court that we need not take concession regarding questions of law by any agency of this Government not even the Solicitor General.

    I have been so instructed by this Court.

    Edward B. Hayes:

    That was not the matter to which I was addressing for myself Your Honor.

    If I understand.

    It is true that, that concession as so phrased is one on which the Commission may change its mind.

    Edward B. Hayes:

    In fact, if the Commission in the subsequent proceeding came to the conclusion that it was erroneously made, then perhaps it would be its duty to change its mind.

    Felix Frankfurter:

    Not if its —

    Edward B. Hayes:

    Provided —

    Felix Frankfurter:

    Not if it’s due process, Mr. Hayes.

    Edward B. Hayes:

    Provided — but — well, I suppose they have their views on due process.

    Unless, they have been confronted with a determination by this Court that according to their concession, today, according to our contention, according to the decisions of two or three judge courts.

    It is necessary that there should be findings, constitutionally necessary that there should be findings for that necessity of findings is placed by this Court upon fundamental principles of constitutional government.

    And that quotation Your Honor will recognize as from Panama Refining Company against Ryan and Mahler against Eby.

    Those are constitutional necessities of findings which they now recognize and which they now say they have not been observing in their procedures for the protection of water carriers, a protection which was enjoined on them by Congress.

    And surely if by short-term orders they can for many years fail to give to the water carriers protections which are as this Court has said required by fundamental principles of constitutional government in one respect.

    It should have the consideration of this Court as to whether they have not been giving less than that constitutional protection in the other respect.

    Felix Frankfurter:

    I’ll ask you only one more question, Mr. Hayes.

    Am I to infer from what you said a minute ago that they failed to make findings only in Section 4 cases that affect water carriers?

    That they treat water carrier — Section 4 applications differently from the conventional Section 4 applications as we see in railroads and on shippers?

    Edward B. Hayes:

    I’m not sufficiently informed to make a statement on that.

    Felix Frankfurter:

    That would trouble me greatly, if that was the contention.

    Edward B. Hayes:

    I do know that in some Fourth Section application cases they do make findings.

    But in the Fourth Section application cases of these water carriers, we have not been getting them in any of these cases that I have here described.

    Hugo L. Black:

    Has there been any orders by the Commission with railroads uphold where they held enough for a year, a year and a half over the protest of the railroads such temporary action as they took here?

    Edward B. Hayes:

    I know of none, and —

    Hugo L. Black:

    Have anybody cited any?

    Edward B. Hayes:

    No, none has been cited.

    Felix Frankfurter:

    How many (Voice Overlap) —

    Edward B. Hayes:

    And in that connection, I should like if I might — Your Honor —

    Felix Frankfurter:

    I just wanted — numerically, how many Section 4 applications have there been in the course of the year on the average, have you any figures on that?

    Edward B. Hayes:

    Yes, I have the — from —

    Felix Frankfurter:

    I don’t mean — I don’t mean water carriers versus rail carriers.

    Edward B. Hayes:

    I understand.

    Felix Frankfurter:

    I mean Section 4 applications.

    Edward B. Hayes:

    I understand.

    Edward B. Hayes:

    There is material in our reply brief on that Your Honor, a material from the congressional record.

    The number is very great and in practically none of them is there any protest by anybody.

    Now, we don’t contend that in a default proceeding, the Commission must have a trial to make findings.

    Felix Frankfurter:

    Well, but with Section 4 is a national policy isn’t some — isn’t just some agreement between parties.

    Edward B. Hayes:

    Yes, but the interests of parties which are controlled by the law as — are their rights.

    Our rights and interests which under the constitution, they have a right to be fairly heard of before those rights are taken.

    I would refer on the necessity and the kind of case where there is a necessity for an adversary hearing, the (Inaudible) hearing to the case of Hannah against Larche which is cited in our reply brief in which this Court made plain that where an order is to be entered now that directly affects the legal rights of parties.

    There, those procedures which judicial experience have shown are necessary to a fair opportunity to be heard are required by due process of law.

    I would reserve the remainder of my time if I have any.

    You may.

    You may Mr. Hayes.

    Mr. Friedman.

    Daniel M. Friedman:

    Mr. Chief Justice, may it please the Court.

    I would like at the outset just to summarize very briefly what the Government’s position is in this case so that the Court will have no question as to what our position is.

    We think first that the District Court correctly dismissed this case as moot.

    If however the Court should disagree with us and reach the merits of this case, we didn’t concede that this particular order cannot stand because no findings were made in issuing.

    We do not concede that before the Commission issues temporary Fourth Section orders it must hold a hearing as the appellants alleged.

    By the Government?

    Daniel M. Friedman:

    No, Mr. Justice and I would like to explain now the procedure which the Commission follows in entering these temporary orders because we think —

    Hugo L. Black:

    May I ask you — I do not want to interrupt what you’re saying, but I want to find out, are you representing the Commission here or are you representing the Government in the concession you made?

    Daniel M. Friedman:

    Both, Your — both Mr. Justice Black.

    I’m appearing here on behalf of the Commission and the United States both of whom are the statutory defendant —

    Hugo L. Black:

    And that the Commission admits that the practice it had — it has heretofore had in connection with this order is unlawful.

    Daniel M. Friedman:

    Yes, Mr. Justice.

    The Commission recognizes that in the case can contest at least — in contested cases it must make findings to show that the statutory criteria have been satisfied before it issues so-called temporary Fourth Section relief.

    (Inaudible)

    Daniel M. Friedman:

    Well, Mr. Justice when we speak of the pleadings, this is what I’d like to come to.

    These — if I may explain a little as to how the Commission processes these cases because I think that fact will indicate the basis on which the Commission can make this kind of finding in this type of case without holding any evidentiary hearing.

    The statute — I’d like to refer just briefly at the outset which is set forth at the pages 2 to 3 of our brief initially makes it unlawful for a common carrier by rail or by water to receive greater transportation for a shorter haul than for a longer haul.

    But it goes on to provide that the Commission may after investigation in special cases authorize a lesser charge for the longer distance and for the shorter distance providing certain circumstances are met.

    Daniel M. Friedman:

    Now under the Commission’s regulations a carrier which is seeking relief from the Fourth Section is required to file a detailed and comprehensive application setting forth a great deal of data relating to these particular criteria specifically whether the proposed shorter long-haul rate is reasonably compensatory, the reasons why they are seeking this relief, and showing if it is made to mean water competition that it is not just potential water competition.

    (Inaudible)

    Daniel M. Friedman:

    I am advised that it is required to be verified.

    The Fourth Section —

    William J. Brennan, Jr.:

    Mr. Friedman, may I ask — I gather if someone protested it —

    Daniel M. Friedman:

    Yes, I’m —

    William J. Brennan, Jr.:

    — also submits something, does —

    Daniel M. Friedman:

    Yes, I’m coming —

    William J. Brennan, Jr.:

    Oh, when you do come, would you tell me what is the situation where issues of facts may perhaps arise?

    Daniel M. Friedman:

    Yes.

    The notice of the filing of one of these applications is given in the – published in Federal Registry and the parties have 15 days within which to file a protest.

    Now, if protests are filed, they are frequently very lengthy documents themselves and then the railroads are given generally a 10-day period within which to respond to these protests.

    Now, I have to distinguish two situations.

    If there is no protest filed and — let me come back a minute.

    The Commission has an administrative group called the Fourth Section Board which is a group of free rates specialist within the Commission and when an application is initially filed, it is referred to this Fourth Section Board for preliminary evaluation.

    If no protest is filed to the application of the expiration of the 15-day period, the Fourth Section Board either itself acts on the application or may refer it to the Commission for action, if there is no protest filed.

    Felix Frankfurter:

    Is there a particular division of the Commission which concerns itself with Fourth Section application?

    Daniel M. Friedman:

    Yes, Mr. Justice, Division 2.

    Felix Frankfurter:

    2?

    Daniel M. Friedman:

    Division 2.

    Now, even in cases where no protest has been filed the Commission may if it feels in cases one which is appropriate for a hearing set the matter for hearing.

    This is not the usual situations admittedly.

    Most of these Fourth Section applications are non-contested.

    They’re pretty routine things.

    Felix Frankfurter:

    What is the volume of protested application?

    Daniel M. Friedman:

    The volume —

    Felix Frankfurter:

    Here for some normally — I don’t mean normal, overall period of years?

    Daniel M. Friedman:

    Well, I would say probably no more than 5%.

    We don’t have the figures —

    Felix Frankfurter:

    Well, 5% of what?

    Daniel M. Friedman:

    Of the total number filed.

    Felix Frankfurter:

    That is the total?

    Daniel M. Friedman:

    Of the total.

    Felix Frankfurter:

    What is the total?

    Daniel M. Friedman:

    Well, the total over a five year period from 1956 to 1960 was 5755 applications.

    Felix Frankfurter:

    That’s 2500 cases.

    Daniel M. Friedman:

    No, 5% Mr. Justice, 5%, about 200, roughly 250 to 300.

    The number varies very greatly.

    William J. Brennan, Jr.:

    Let’s see, that’s 5 years, 5%, well, that’s 300 over five years of protested application?

    Daniel M. Friedman:

    That’s approximately correct.

    William J. Brennan, Jr.:

    That’s about 60 years on average, does it?

    Daniel M. Friedman:

    Roughly, maybe a little more than that.

    We don’t have figures on that basis.

    Felix Frankfurter:

    These are complicated cases, aren’t they?

    Daniel M. Friedman:

    The ones which are protested —

    Felix Frankfurter:

    The protested —

    Daniel M. Friedman:

    They’re very difficult cases —

    Felix Frankfurter:

    Yes.

    Daniel M. Friedman:

    I would like to say one other thing that the Commission follows a practice that whenever a hearing is requested, whenever there is a request for a hearing it grants a hearing.

    I want to make it clear that every protestant does not request a hearing.

    Sometimes they are satisfied to submit their protest on the papers filed with the Commission and do not request a hearing and that’s —

    Felix Frankfurter:

    Is it now the position of the Commission that even in those cases a hearing is required?

    Daniel M. Friedman:

    No, Mr. Justice.

    We deny that a hearing is required.

    Potter Stewart:

    But in this particular case was a hearing requested?

    Felix Frankfurter:

    A hearing was requested and the matter was set for hearing.

    The matter was set for hearing on the application for permanent relief and now I’d like to come to the —

    Tom C. Clark:

    Not on the temporary one?

    Felix Frankfurter:

    On — no, Mr. Justice.

    Tom C. Clark:

    Not on a hearing on temporary —

    Felix Frankfurter:

    That’s right.

    Earl Warren:

    Well, now —

    Why wasn’t the hearing given?

    Daniel M. Friedman:

    The hearing has been held Mr. Chief Justice.

    Hearings were held on the application for permanent relief —

    Yes.

    Daniel M. Friedman:

    — but the Commission does not follow the practice of holding hearings before granting the application for temporary authority.

    William J. Brennan, Jr.:

    Well then I misunderstood you to — I thought you said when a hearing is requested, it’s granted but —

    Daniel M. Friedman:

    Its —

    William J. Brennan, Jr.:

    — if the hearing is requested on a temporary — on an applications for temporary order the —

    Daniel M. Friedman:

    Mr. —

    William J. Brennan, Jr.:

    — no hearing is given.

    Daniel M. Friedman:

    I’m afraid its — I haven’t made it clear.

    The applicants do not request temporary relief.

    They ask for relief from the Fourth Section.

    They don’t speak in terms of temporary relief and the Commission’s practice is in cases where they set the matter for hearing, where they feel that a hearing is necessary, they may or may not grant temporary relief pending the hearing on the applications.

    Felix Frankfurter:

    Sua sponte.

    Daniel M. Friedman:

    Sua sponte.

    That is correct Mr. Justice.

    Hugo L. Black:

    I don’t quite understand your statement you have about the Commission and the temporary hearing.

    Do you say the application does not ask for temporary relief?

    Daniel M. Friedman:

    No Mr. Justice.

    Hugo L. Black:

    How did the Commission know then that they want temporary relief?

    Daniel M. Friedman:

    Well, because they’re asking for relief as soon as possible.

    Hugo L. Black:

    Well that — does that mean temporary relief?

    Daniel M. Friedman:

    Well that — that means permanent relief and pending —

    Hugo L. Black:

    I understand it means permanent but I do not understand how the Commission would act on it if they didn’t let them know that they wanted some relief right away.

    I now (Voice Overlap) —

    Daniel M. Friedman:

    Well, I think this is — this is implicit.

    Hugo L. Black:

    Not en banc for the Commission.

    Daniel M. Friedman:

    This is implicit in the practice that has grown up over the years.

    Felix Frankfurter:

    What you’re saying is that when an application is made for relief on what — in many instances, it’s a stringent — well, I know it’s properly stringent, restriction that in order to give the Commission that on the face of things, the Commission suspects or believe or prophesize that there will be relief.

    But it does — it wants to have ample of time in which to confirm or to verify or to validate its impression, and yet it is sufficiently made out on the surface that they give temporary relief so that they have ample time to determine whether relief should be withdrawn or made permanent, is that it?

    Daniel M. Friedman:

    Precisely.

    Hugo L. Black:

    Now, is that what you were saying?

    Are you saying if the Commission suspects from an application that these people might be imported or they might want — these people might want relief immediately without a hearing or that the Commission does automatically of itself picks it up and does it without anybody suggesting it?

    Daniel M. Friedman:

    No, Mr. Justice.

    Felix Frankfurter:

    Is that is the tenor of my question?

    Hugo L. Black:

    What I understood him to say — are you saying if they do it when it’s suspecting —

    Daniel M. Friedman:

    No.

    No Mr. (Voice Overlap) —

    Felix Frankfurter:

    That is all I said.

    Hugo L. Black:

    What I want to find out — what I want to find out here and I suppose it must be true whether or not the Commission acts — whether or not the people who want temporary relief actually asked it either in words which say we want temporary relief instantly under Section 4 or we want temporary relief.

    Daniel M. Friedman:

    They do not explicitly ask for temporary relief.

    But — and this I think is the important thing, the Commission in deciding whether to grant temporary relief has before it all the applications and —

    Hugo L. Black:

    I understand that.

    Do I understand that you’re saying for the Commission, these people do not ask for temporary relief in such mystical or subtle language as they desire?

    But that they do not ask for temporary relief and this is a matter that the Commission takes up on its own motion because they think they ought to have it?

    Daniel M. Friedman:

    I would say yes Mr. Justice and in this context that the Commission has a statute which provides that if certain conditions are met, it may grant relief from the Fourth Section.

    And it has frankly from the very beginnings since 1887 recognized that there may be situations in which on the basis of the filings they are able to make a determination that the statutory standards have been met.

    And however, although they make this determination, they feel they want to have the opportunity for further inquiry.

    Hugo L. Black:

    Did the railroads in this case or whoever did this ask for temporary relief?

    Daniel M. Friedman:

    Not into — no, they did not in terms.

    Hugo L. Black:

    Do you — did they ask for it?

    Daniel M. Friedman:

    Well, I think by implication they have in view of the settled, established practice.

    Hugo L. Black:

    I don’t know if it is crucial in the case but I — and when you ask for temporary injunction, ordinarily, the statute which requires that there’s a limitation at the time that temporary injunction can be granted and even in states where they provide that temporary injunction can be granted as a rule as I recall it for a limited time.

    But they asked for it and as Justice Whittaker, indicated they give some kind of showing as to why they should have it.

    Daniel M. Friedman:

    Well —

    Hugo L. Black:

    And it’s only in the rarest instances as I recall that they grant it for over a period of a certain number of days without giving the other side a right to be heard.

    Do they have any such rules at the Commission?

    Daniel M. Friedman:

    Well, the rule is that the Commission grants the temporary relief until such time as the final order is entered in — after hearing and the proceeding for permanent relief.

    Hugo L. Black:

    And usually, these types are frequently very complicated and take several years, doesn’t it?

    Daniel M. Friedman:

    They may.

    That’s correct.

    Hugo L. Black:

    And there’s no hearing before then?

    Daniel M. Friedman:

    No, but there is a — again there is a full — there is an informal full investigation by the Commission on the (Voice Overlap) —

    Hugo L. Black:

    Without a hearing?

    Daniel M. Friedman:

    Without a hearing.

    But I would like to emphasize one thing Mr. Justice Black.

    This is not a matter that takes place just as a routine thing.

    The Commission does not always grant temporary relief when it sets a matter for hearing.

    There are many instances in which an application is filed for relief.

    There is a protest filed even by — on many occasions, by the water carriers and the Commission does not grant temporary relief.

    John M. Harlan II:

    (Inaudible)

    Daniel M. Friedman:

    In the.

    John M. Harlan II:

    (Inaudible)

    Daniel M. Friedman:

    I think that’s a very apt analogy Mr. Justice.

    But we don’t grant a hearing after we — after we affirm it such as they do on the Commission.

    Daniel M. Friedman:

    (Inaudible) — that’s correct.

    That is something of a distinction (Voice Overlap) —

    Daniel M. Friedman:

    But once the court has —

    (Voice Overlap) process in there, isn’t it?

    Daniel M. Friedman:

    Once the Court has affirmed the case is over, whereas —

    The case is over but —

    Daniel M. Friedman:

    In this situation, Mr. Chief Justice —

    It is not over.

    Daniel M. Friedman:

    — the case is not over.

    There’s a little difference there, isn’t it?

    Felix Frankfurter:

    Mr. Friedman, the procedure which you outlined which negated the notion that the Commission goes on a joy ride and the Commission never since its existence have had its imminent minutes ever set on this Court, how long has this procedure been in existence?

    Daniel M. Friedman:

    Since the outset, since 1887.

    Felix Frankfurter:

    Well, that we’ve got — we’re sitting here in judgment on a procedure which has had nearly hundred years — nearly, what?

    Daniel M. Friedman:

    74 years.

    The first annual report of the Commission, first annual report specifically refers to the granting of temporary relief in one of the early cases.

    Felix Frankfurter:

    And so far as I know, wasn’t until the Norris-LaGuardia Act that any limitation was put on the length of time on an injunction of the federal court.

    Charles E. Whittaker:

    (Inaudible)

    Daniel M. Friedman:

    Of course.

    Charles E. Whittaker:

    On what basis?

    Daniel M. Friedman:

    The basis on which the Commission will rest its findings for the temporary order is the application, the lengthy application that has been filed —

    Charles E. Whittaker:

    (Inaudible)

    Daniel M. Friedman:

    Well, the application is verified and I think it does Mr. Justice because what you have in this Commission procedure is a lengthy application, lengthy protest, lengthy response and then on the basis of these pleadings the Commission decides, whether it will or will not grant the temporary relief.

    Charles E. Whittaker:

    (Inaudible)

    Daniel M. Friedman:

    Oh, surely, surely.

    If —

    Charles E. Whittaker:

    (Inaudible)

    Daniel M. Friedman:

    That is correct Mr. Justice because if they were raised any substantial issue in the Commission’s view as to whether the statutory criteria was satisfied, it would not grant the temporary relief as.

    You mean —

    Charles E. Whittaker:

    (Inaudible)

    Daniel M. Friedman:

    Well, we think Mr. Justice that without any evidentiary hearing, the Commission is justified in granting this temporary relief if it is able to make the findings of the statutory criteria have been met.

    Hugo L. Black:

    Findings from what?

    Daniel M. Friedman:

    Pardon me, Mr. Justice.

    Hugo L. Black:

    These findings from what?

    Daniel M. Friedman:

    Findings upon the basis of —

    Hugo L. Black:

    From what?

    Daniel M. Friedman:

    On what?

    Hugo L. Black:

    From what?

    Daniel M. Friedman:

    Oh, supported on the basis of the papers that have been filed with the Commission.

    Now —

    Hugo L. Black:

    Does the water carriers authorize and notified of this when they’re filing the papers?

    Daniel M. Friedman:

    Yes, the notice for —

    Hugo L. Black:

    Temporarily.

    Daniel M. Friedman:

    Yes, Mr. Justice.

    Hugo L. Black:

    Alright.

    Did they ask for a hearing on it?

    Or did they offer anything?

    Daniel M. Friedman:

    They didn’t — they — the protest — the application alleged that these rights were designed —

    Hugo L. Black:

    I’m not talking about permanent hearing — now for a permanent – will they given the chance to offer any affidavits in connection with its temporary order which state in effect how long?

    Daniel M. Friedman:

    Well, the order was in effect 14 months.

    Hugo L. Black:

    Right.

    Were they given any opportunity or did they offer any affidavits on that temporary order?

    Daniel M. Friedman:

    I’m not sure of that Mr. Justice where they offered any affidavits.

    Hugo L. Black:

    Well, were they —

    Daniel M. Friedman:

    I don’t believe so.

    Hugo L. Black:

    Were they given an opportunity to do so?

    Daniel M. Friedman:

    Well, they could have filed anything they wanted in their protest.

    They could have filed anything they wanted in there.

    Hugo L. Black:

    Well, (Inaudible) — I’m not talking here about permanent.

    Daniel M. Friedman:

    No.

    Mr. Justice, again —

    Hugo L. Black:

    All I’m interested in now is temporary.

    Daniel M. Friedman:

    Mr. Justice again I have tried — I want to make this clear.

    It is not the proceeding before the Commission that’s not focused on temporary versus permanent.

    The application is for a permanent — for permanent relief.

    Hugo L. Black:

    But all we’re talking about here, all they have here is one that was granted on temporary relief.

    Daniel M. Friedman:

    That’s correct.

    Hugo L. Black:

    Isn’t it?

    Daniel M. Friedman:

    Yes.

    Hugo L. Black:

    Is it possible to confine it to that so that we can find out just what was done in connection with the action for temporary relief which lasted 14 months.

    William J. Brennan, Jr.:

    Exactly what did you rely on in other words, before the temporary order was issued?

    Daniel M. Friedman:

    On the pre — on a — everything that was filed.

    William J. Brennan, Jr.:

    Do I —

    Daniel M. Friedman:

    Have we got that here?

    William J. Brennan, Jr.:

    (Voice Overlap) be anything, what was filed?

    Daniel M. Friedman:

    That is not — that is not —

    Felix Frankfurter:

    Have you got it — is it in the clerk’s — in this clerk’s office?

    Daniel M. Friedman:

    No, unfortunately not.

    Felix Frankfurter:

    Could it — where we — is it part of the record, so that we can look at it?

    Daniel M. Friedman:

    It’s not part of the record before either the District Court or this Court be —

    Charles E. Whittaker:

    (Inaudible)

    Daniel M. Friedman:

    That is correct.

    Charles E. Whittaker:

    (Inaudible)

    Daniel M. Friedman:

    It would be based on the same evidence on which the Commission in the past has determined whether to grant or not to grant temporary relief.

    That is whether on the basis of all the material file, the protests, the initial application, the responses, the Commission is able to conclude that the statutory criteria has been satisfied, that is —

    Felix Frankfurter:

    None of these materials — these materials are not in the record.

    Daniel M. Friedman:

    That is correct.

    Felix Frankfurter:

    (Inaudible)

    Potter Stewart:

    Well, can you tell me this Mr. Friedman, what — were any issues of fact, on the fact of the question I asked you on the outset, are any issues of fact raised by these materials?

    Daniel M. Friedman:

    Well, they mixed these questions blow in fact, there’s the question raised whether the rights —

    Potter Stewart:

    But do you know what I mean by initial in fact.

    Daniel M. Friedman:

    A reasonably (Voice Overlap) —

    Potter Stewart:

    Is there a right — is there a dispute between the parties on some relevant issue which goes to the —

    Daniel M. Friedman:

    I would say yes.

    This is certainly –-

    Potter Stewart:

    I know — those are resolved only on the papers, are they?

    Daniel M. Friedman:

    On the papers but if the Commission on the basis of the papers concludes that they cannot find the statutory criteria satisfied, it will not grant it.

    Potter Stewart:

    But in this particular case obviously they did find –-

    Daniel M. Friedman:

    That is correct.

    Potter Stewart:

    — the criteria were satisfied.

    Daniel M. Friedman:

    That is correct.

    Potter Stewart:

    Now what I’d like to know is whether on these papers on the issues of fact raised?

    Daniel M. Friedman:

    Yes, there were issues as to whether the right was reasonably compensatory as to what in (Voice Overlap) —

    Potter Stewart:

    And pro and con in the papers —

    Daniel M. Friedman:

    Pro and con.

    Potter Stewart:

    — (Voice Overlap) said one thing in the railroads —

    Daniel M. Friedman:

    That’s right.

    Potter Stewart:

    — and another.

    Felix Frankfurter:

    There must have been great details in order to — in order to make (Inaudible), a judgment of that sort.

    Daniel M. Friedman:

    Voluminous material, Mr. Justice.

    Felix Frankfurter:

    But we haven’t got it.

    We don’t know.

    Daniel M. Friedman:

    No.

    We would be happy, if the Court wishes to —

    Felix Frankfurter:

    What I —

    Daniel M. Friedman:

    — file it, but let me explain why Mr. Justice.

    Felix Frankfurter:

    I don’t see — maybe we can but as I remember the decision of this Court that what is in the private — in the files of the Interstate Commerce Commission not put in record, they have to take in judicial notice of.

    Daniel M. Friedman:

    Mr. —

    Felix Frankfurter:

    I don’t know whether I can look at them, much as I’d like to.

    Daniel M. Friedman:

    Mr. Justice, may I explain why they’re not part of the record.

    The reason they’re not part of the record is the appellants filed their complaint in the District Court.

    And after they had filed this complaint as I’d like to come to in a minute, developments occurred which in our view rendered the case moot and we move to dismiss and the District Court granted that motion so that there was never any reaching below of the merits.

    Felix Frankfurter:

    But —

    Daniel M. Friedman:

    Now —

    Felix Frankfurter:

    Wasn’t your motion for a dismissal on the score of mootness contest it?

    Daniel M. Friedman:

    Yes.

    Felix Frankfurter:

    Well I — I don’t see why then they couldn’t have been, as part of that —

    Daniel M. Friedman:

    Well —

    Felix Frankfurter:

    — part of that issue of moot ness —

    Charles E. Whittaker:

    Isn’t it true —

    Felix Frankfurter:

    — why they couldn’t have been solicited however —

    Charles E. Whittaker:

    Isn’t it true —

    Felix Frankfurter:

    — they’re not here, that’s the point.

    Daniel M. Friedman:

    No, they’re not, I’m afraid.

    Charles E. Whittaker:

    Isn’t it true Mr. Friedman that the reason there are no findings in this record is that the Commission made none —

    Daniel M. Friedman:

    That is —

    Charles E. Whittaker:

    — and you now concede that that was error.

    Daniel M. Friedman:

    Yes.

    Charles E. Whittaker:

    And you say that henceforth you’re going to make them and the issue before us is upon what you’re going to make them.

    Daniel M. Friedman:

    That’s right.

    Charles E. Whittaker:

    Whether you’re going to have to do it on affidavits or whether you got to have a full definitive hearing first?

    Isn’t that it?

    Daniel M. Friedman:

    That is correct.

    Felix Frankfurter:

    Isn’t that what we have to decide in this case?

    Daniel M. Friedman:

    No, no, no.

    Felix Frankfurter:

    I should hope not.

    Hugo L. Black:

    There’s one other issue, isn’t it?

    You had there a question where they were challenging not your permanent owner because you didn’t make any.

    That was — the Commission made that moot by its action after they attacked them on the ground, they had created a device of subterfuge to keep from giving water carriers the advantage of that which Congress had said they should have — has.

    You’re familiar with that longstanding controversy to the court.

    Daniel M. Friedman:

    Yes, of course.

    Hugo L. Black:

    That’s what it was.

    That’s all you had.

    Then what we have here, it seems to me, are of the facts that perhaps would be essential in some way in the court, before you dispose of that contention, that this couldn’t be moot.

    Because it was a part of a continuing practice which would keep on something wasn’t done that the papers up to that time should’ve been brought into the Court so that it could determine the real issue which they were raising which was, that you had a practice which from — had not only injured them in the past, but if allowed to continue, would keep on doing so.

    Daniel M. Friedman:

    Mr. Justice —

    Hugo L. Black:

    Isn’t that the — wasn’t that the issue before the Court that they raised?

    Daniel M. Friedman:

    Well, they argued that the case –-

    Hugo L. Black:

    Was that the issue they raised?

    Daniel M. Friedman:

    Well, I can’t answer you —

    Hugo L. Black:

    Alright.

    Daniel M. Friedman:

    — specifically.

    Hugo L. Black:

    Well, tell me then what they raised in that connection, forgetting for the moment if you can that there was a permanent order that one issued, and that you’re talking about a permanent order because all they’re talking about is a temporary.

    Daniel M. Friedman:

    No.

    I’m trying to address myself to the temporary order.

    Their contention was that the case was not moot because the Commission had a continuing practice of issuing orders without findings and without a hearing.

    Hugo L. Black:

    Against their client?

    Daniel M. Friedman:

    No, it was not so limited.

    It was —

    Hugo L. Black:

    Well, did they not allege that it was against the water carriers?

    Daniel M. Friedman:

    Yes, against — of course, these are just some of the water carriers?

    Hugo L. Black:

    And that’s the issue they raised?

    Daniel M. Friedman:

    This was the issue they raised, and the District Court and we think properly rejected this issue because — I would like to explain just what the effect of this water is.

    Hugo L. Black:

    I understand you say they properly rejected with.

    How could they reject it without seeing the papers, to see what had been done and to have something — some knowledge of the charges they made that this was part of the continuing practice?

    How could they do it without looking in what the Commission had before?

    Whether the railroad raised the question how the Commission acted, how soon it acted, what notice it gave, who it talked with and so forth?

    Daniel M. Friedman:

    I think Mr. Justice because the mere allegation that even though the particular controversy is to the particular orders granted moot, that the agency is following a general practice in other cases of doing the same thing is not enough to create a justiciable controversy.

    This is what we think this Court has repeatedly held.

    The — I think it’s very important to emphasize there is no contention by —

    Hugo L. Black:

    Your question of mootness, then that gives me an idea I hadn’t gathered from you or the other counsel before.

    Your question of mootness suggests to me that you are not relying on the fairness that the Commission has made it moot by relieving itself of these 14 months of order but that — they didn’t have a right to litigate this at all.

    Daniel M. Friedman:

    They did — they did not but once — once the railroads — I — something that I think has to be made clear that what happened in this case after the railroads had received the temporary authority while the case was pending in Court and I want to emphasize the 10 months elapsed between the time that the Commission granted this temporary authority and the railroad and the barge lines went into Court.

    After they’ve gone into Court, the railroads published new tariffs which reduced the short-haul rates.

    They reduced the short-haul rates to the level of the long-haul rates and this meant that the differential which Section 4 of the Act prohibits, had been eliminated.

    There was no longer any need for the Fourth Section relief.

    Felix Frankfurter:

    Do I understand you that — for clarification and not interruption.

    Do I understand you that what Mr. Hayes now claims to have been unconstitutionally issued temporary relief from Section 4 was in operation against his clients for 10 months before he moved to the court?

    Daniel M. Friedman:

    Precisely.

    I’d like to point out as far as the contention has been made that there’s no way these people can ever get a judicial determination of this case.

    There have been cases in which the application or the complaint was filed in the District Court the day on which the order became effective, a temporary restraining order was sought, and the effective period, effective operation of the Commission’s orders has been completely stayed.

    He didn’t wait to do that.

    He waited 10 months before coming in —

    Felix Frankfurter:

    The potentiality — the potentiality of a temporary relief from an application on file before the Commission to which response made — was made, the potentiality that a temporary relief maybe granted is a well-known fact to all counsel who deal in these matters.

    Daniel M. Friedman:

    Of course.

    Mr. Friedman, may I ask you —

    Hugo L. Black:

    Do we take judicial knowledge of that?

    Daniel M. Friedman:

    Well, I think — I —

    Felix Frankfurter:

    I suppose we can as that — we can, depend on what’s the conviction is?

    Daniel M. Friedman:

    I think — oh, the traders has recognized this, Professor Sharpman (ph) work points out that this practice has been going on for years.

    Hugo L. Black:

    (Inaudible) filed to take judicial knowledge of the fact that each charge with the cases of — where water carriers were involved, actions would be taken which denied him a right to be heard at all when the (Inaudible) so-called temporary motion pending — an order pending 14 months, can we take judicial knowledge of that?

    Daniel M. Friedman:

    I think Mr. Justice their own affidavit states, they all — their own affidavit which they filed in the District Court states that there were nine cases that they referred to in which the water carriers protested grants for applications for Fourth Section relief and the Commission granted temporary relief.

    This is nothing novel.

    This has been going on for many years and it is not only limited to protest by water carriers against the action of rail carriers.

    The same thing can happen with one rail carrier against another rail carrier.

    Hugo L. Black:

    The same thing is possible.

    Can you point out where it has happened where railroads protested many times?

    Daniel M. Friedman:

    Well, I don’t have —

    Hugo L. Black:

    They are claiming that this is aimed at water carriers and there is a history that the Commission has done some things which the Court found could not be done with reference to water carriers, is there not, along history?

    Daniel M. Friedman:

    That is correct.

    But I would like — Mr. Justice, I would like to emphasize that in this context of Section 4, there has been a great deal of talk about protecting the water carriers against the rail carriers and of course that is one of the purposes that Congress had in mind in the Transportation Act of 1940.

    But this statute is not so limited.

    This statute also recognizes that the Commission may grant relief from Section 4 where the statutory criteria are met.

    If I may put it a little differently, the barge lines have an inherent advantage, they are cheaper and the rate structure must recognize that inherent advantage.

    Mr. Friedman, what is the first stage in the proceeding where the Commission can under your theory grant temporary relief?

    Daniel M. Friedman:

    After the protest, after the application has been filed, the protest has been filed and the response has been filed.

    Now is there — is there –- does statute provide that or is that your interpretation of the law?

    Daniel M. Friedman:

    That is the — that is not my interpretation Mr. Chief Justice.

    That is the Commission’s subtle interpretation for 70 years.

    Alright.

    Now let me ask you this question then, if it — if you must — if they must wait until the protest is put in, what difference does it make whether they granted right at the time the first petition is filed or after the protest if they can decide without hearing or any kind of proceedings all of the contested facts against (Inaudible)?

    Daniel M. Friedman:

    Well, I have to say Mr. Chief Justice they do not attempt to decide contested facts except in a situation where on the basis of the papers before them, they can feel they can do that, and that of course is judicial and reviewable.

    Well, now that’s kind of an equivocal statement.

    It seems to me they never do it except where they think they can.

    Daniel M. Friedman:

    No, where that — they never do it unless in the — at the present time they make findings which show that the statutory standards have been met.

    Well, now let me ask you this, in this case there were contested facts, were there not?

    Daniel M. Friedman:

    Contested factual issues if I may.

    Factual issues.

    Daniel M. Friedman:

    Yes.

    Now, those undoubtedly were — would have raised an issue as to whether they could affirm it, they get relief, wouldn’t they?

    Daniel M. Friedman:

    Well —

    No, just — would you answer that please?

    Did they or they didn’t they raise issues of that importance?

    Daniel M. Friedman:

    I would have to — I would have to qualify to this extent Mr. —

    Well, let me ask you this if you can’t answer that, why if they didn’t would they — would they grant a full hearing on it?

    Daniel M. Friedman:

    Because Mr. Chief Justice, they feel the Commission concludes, that enough had been shown to warrant permitting the railroads, to put these rates into effect for that because of what is in the application, a further exploration of the issue is necessary.

    In other words, they decided all the contested issues against the protestants on the question of temporary relief and then left them for 14 months or whatever time that might elapse between them and the final order to lose their business because of these high rates.

    Daniel M. Friedman:

    Well, Mr. Chief Justice first of all, let me say they could’ve immediately challenged this order which they didn’t do and secondly, that the statute again, I come back that the statute does permit the Commission, does permit the Commission to grant Fourth Section relief if it concludes that the rates are reasonably compensatory and if it concludes that the special case has been made out.

    Yes, and the question was rather made out, how do you make that out?

    That’s —

    Daniel M. Friedman:

    Well —

    That’s a thing that bothers me, Mr. Friedman, if they can decide contested issues against the protestants without a hearing, without any evidence of any kind, I do not see what good it does to wait until the protest is entered, might just as well do it on the petition itself.

    Daniel M. Friedman:

    Well, because there are numerous cases in which the Commission denies temporary relief on the basis either — there have been cases in which relief is denied just because the applicant hasn’t made out a sufficient showing.

    There are other cases in which on the basis of a protest, the Commission denies relief because there are issues that it feels it cannot properly resolve on the pleading.

    I’d like just to — my time is coming to an end and I have to divide my time with counsel for the railroad appellees —

    Felix Frankfurter:

    But Mr. Friedman, before you move on to this crucial point.

    I’ll say to you what I said to Mr. Hayes that the charge that the Commission either discriminatory, in these short hauling cases against the barge lines, the water carriers generally and thereby implied these — favors railroads, that’s what concerned me greatly.

    What I’d like to know is whether it’s an impossible task or too burdensome a demand to ask from the Commission the figures of short hauling cases between railroads which are most of the cases — if my memory doesn’t (Inaudible), but it sometimes does, do often does, that to come here and in lower court, most of them are not water carrier cases, but in the railroad controversy.

    I’d like to know the figures of railroad short hauling controversies as against railroad versus water carrier controversies —

    Daniel M. Friedman:

    I will —

    Felix Frankfurter:

    — in an — in a reasonable period.

    Daniel M. Friedman:

    I will attempt to get that information.

    Felix Frankfurter:

    I’m not sure if that isn’t — whether those figures are available.

    Daniel M. Friedman:

    I don’t know either, but we will attempt to get at that point, Mr. Justice.

    Hugo L. Black:

    (Inaudible)

    Daniel M. Friedman:

    Pardon?

    Oh, I was just going to say and would you attempt to differentiate please between those cases that where there is a contest and where there is none.

    Daniel M. Friedman:

    I will attempt to.

    Hugo L. Black:

    And where the railroad protested that it was being disadvantageous in connection with the temporary (Voice Overlap) —

    Daniel M. Friedman:

    I will attempt to get that —

    Hugo L. Black:

    And what action was taken on it.

    Daniel M. Friedman:

    To get — I will attempt to get this information.

    Felix Frankfurter:

    And these internal railroad controversies are usual — are contested, are they not?

    Daniel M. Friedman:

    Frankly —

    Felix Frankfurter:

    (Inaudible)

    That’s what the railroad is about.

    That is the origin of this Section.

    William O. Douglas:

    Mr. Friedman, I just like to add to your burden, but there is a question that your brief doesn’t answer, and that is that if a damage suit were brought, I suppose maybe the — maybe you’re not the counsel to answer this.

    I suppose that the defense were to invoke the Abilene doctrine?

    Daniel M. Friedman:

    That was a matter within the exclusive jurisdiction, you mean?

    William O. Douglas:

    Well, the primary jurisdiction —

    Daniel M. Friedman:

    Primary (Voice Overlap) —

    William O. Douglas:

    — of the Commission therefore it would be back in the damage suit precisely where we are in this suit.

    Daniel M. Friedman:

    Well —

    William O. Douglas:

    You don’t advert to that in your brief?

    Daniel M. Friedman:

    No, I think Mr. Justice, the theory of the damage suit as I understand would be that since the Fourth Section Board are allegedly — it would be invalid be — for the lack of findings that in that situation the railroads would be collecting rates illegally.

    And that would be the theory of the damage suit.

    Now let me just say this on the damage suit, a point has been raised but the question as to the effect of the Commission’s order on any claim for damages is an issue that we think can be fully litigated in the damage suit.

    And I might mentioned that the issue of the damage suit goes to the question of mootness.

    Now, this Court has frequently held that you cannot collaterally attack an order of the Commission in a private suit.

    And the theory of those cases is that under the statute, the only way you can seek such review is by a proceeding broad and a three-judge District Court against the United States.

    Now, we think that an exception that perhaps properly be made in the narrow case where a proceeding is brought to get such relief but the case becomes moot before there is any decision, because in that situation if you say that the order cannot be collaterally attacked in the damage suit, there is no way to challenge it.

    But we think that in a sense of the question of whether the chicken or the egg came first, you might say the case is not moot because you have to determine that alternately, you could say, it can be determined in a private suit because the case is moot.

    Daniel M. Friedman:

    And we think the latter is the preferable practice because the possibility of this damage suit, what the issues are, the theory of it are all wholly conjectural and we think that to allow life to be breathed in to a controversy otherwise dead because of the possible — possibility that the issue may be raised in a damage suit is not enough to cause a deviation from the traditional —

    Charles E. Whittaker:

    Is it —

    Felix Frankfurter:

    Before you sit down Mr. Friedman, I think it’s very important in view of what Mr. Hayes is contending that this is what he calls a pattern, bearing on what, after all, is the question before us, whether this case is moot, that’s the real issue in this case.

    Now, its bearing on that, if there is a pattern by which I understand, is it like the – what is it — the case in 219, a recurring — that while it said (Voice Overlap) —

    Daniel M. Friedman:

    Southern Pacific?

    Felix Frankfurter:

    That’s what?

    Daniel M. Friedman:

    The Southern Pacific —

    Felix Frankfurter:

    The Southern Pacific case.

    Potter Stewart:

    Systematically.

    Felix Frankfurter:

    That this is recurring thing while the slate is clean today, it was rubbed off.

    It’s been scribbled on again and again and it will be scribbled on tomorrow.

    I would like to know what the history has been since the case in 330 in this very — regarding this very water carrier, what the — because that to me seems to have bearing on whether this is just a cat and mouse business, and what in effect Mr. Hayes is saying here more politely that this is a way by which the Commission really sought to get out of the Courts.

    And next week we’ll do the same hanky-panky.

    And therefore the case isn’t moot.

    I put this in very crude language in order to get an elegant relevant answer.

    Daniel M. Friedman:

    My answer Mr. Justice is — I’ll try to explain it.

    The Commission following the Mechling case in 330 when there was a readjustment on the rates, there had been a number of applications filed by the railroads in this area.

    In some instances, the Commission has granted temporary Fourth Section relief in these circumstances are —

    Felix Frankfurter:

    Contested, contested applications?

    Daniel M. Friedman:

    In contested applications, there are —

    Felix Frankfurter:

    Were the grants taken to court?

    Daniel M. Friedman:

    There have been a few of them, one or two of have been taken to court.

    Felix Frankfurter:

    And was the Commission — the Commission’s order found wanting in law?

    Daniel M. Friedman:

    In one of the cases it was and one of the cases it wasn’t, but I may have to say taken to Court, these problems do not arise solely in the Chicago grain rate.

    I mean they may come up throughout the country.

    There have been cases in the Chicago area but —

    Felix Frankfurter:

    With reference to this particular — this grain effect, the generic term, these grain commodities affecting this carriage, the claim is that there was a recurring phenomenon sufficient to make out a pattern or has been suggested from debenture system, so that equity properly doesn’t close it’s eyes and says we’re going to guard against this bifurcating it in the future.

    Daniel M. Friedman:

    Well, there’s one case involving this particular traffic which was taken to court immediately and a temporary restraining order was issued and this the case Mr. Hayes referred throughout in the Seventh Circuit.

    It was subsequently dismissed on the Government’s motion.

    There have been other cases and I want to emphasize as far as this practice is concerned, there had been other cases in which a protest has been filed by a water carrier to a proposed Fourth Section application by the railroads in which the Commission has denied temporary relief.

    Daniel M. Friedman:

    This is not a uniform practice that every time the railroads seek an application for Fourth Section relief and as a protest by the water carriers, and automatically the Commission denies it.

    And I wanted again to emphasize that if the Commission grants this temporary relief in another case involving different rates and if the appellant barge lines feel they are injured by that they can go right into court immediately.

    They can go right in and seek judicial review, but of course these rates, this differential which is the sole subject of this suit cannot be automatically reinstituted.

    The railroads have increased — I’m sorry, reduced the short-haul rates to the level of the long haul-rates.

    Now, if the railroads wanted to reinstitute this differential again, they would have to file a whole new application, new protest, different facts, the Commission might or might not grant the temporary relief and the statute I haven’t had a chance to refer to this, I just want to say it brief and the statute says after investigation the Commission may grant relief.

    And Section 2 of the statute specifically says after hearing that the Commission may grant the temporary relief after investigation, but if the rate has been reduced, if the long haul-rate has been reduced to meet water competition, and later on the railroad wants to increase it again, then the Commission may only permit that if after hearing, not after investigation, after hearing, the Commission finds that the increase has not been the result of the elimination of water competition.

    This is a very significant thing and its —

    Felix Frankfurter:

    Well, rate conditions change, commodity conditions change —

    Daniel M. Friedman:

    Certainly.

    Felix Frankfurter:

    — traffic conditions change, these are really essentially — certainly when there’s a — this largest span of time as — when was it, 350 — 1946 —

    Daniel M. Friedman:

    1946 to 1947.

    Felix Frankfurter:

    Is this — these are ad hoc situations, aren’t they?

    Daniel M. Friedman:

    They are.

    There’s no — I don’t think there’s a practice in the sense of the Southern Pacific situation.

    Let me just briefly mention that.

    That was the Commission order directed to a specific discrimination in one instance, to a specific series of rates that were unreasonable.

    And the Commission ordered us — the statute then existed was limited in durations for two years, and by the time the case has got to this Court, the two years have expired.

    And the Court said those cases were not moot.

    Those cases were not moot because the practice was capable of repetition.

    But the practice wasn’t the practice of the Commission of generally issuing orders, prohibiting discrimination with the precise thing involved in that case.

    That is that the same type of discrimination at the expiration of the two years could be resolved.

    Felix Frankfurter:

    That’s like our labor cases where an unfair labor practice is safeguarded against future repetition by letting injunction, the restraint in the Commission — the court order stand although the particular thing has been collected.

    Daniel M. Friedman:

    Precisely.

    Whereas in this case — in this case, the complaint against the repetition of the practices is only not that — in this particular rate situation there’s going to be some injury, but that at some other time and some other case, the Commission may do the same thing and these people maybe injured, and we don’t think that is enough to breathe life into this controversy over this particular order.

    Hugo L. Black:

    Mr. Friedman, I’ve just looked at the dates, what’s been done and I just want to see if it’s correct.

    The complaint was filed November 16, 1959?

    Daniel M. Friedman:

    Correct.

    Hugo L. Black:

    The original order of the Commission that the railroad asked in the latter part of 1958 as I understand —

    Daniel M. Friedman:

    That’s correct.

    Hugo L. Black:

    That they put in effect the certain rates which these carriers — the water carriers claim was of great interest.

    Daniel M. Friedman:

    Yes.

    Hugo L. Black:

    Because it was giving them an advantage and depriving him of that natural advantage.

    The Commission issued an order refusing to suspend those rates in January of 1959?

    Daniel M. Friedman:

    Correct.

    Hugo L. Black:

    And this suit was filed November 16, 1959.

    I don’t know what went on in between, but I’m trying to get at this situation.

    Then the case was answered, was about to go to trial and the Commission on March 28, 1960 notified the court that the railroad had withdrawn their Section 4 application.

    And that therefore it was no longer in controversy.

    At that time, as I understand it, that’s put in effect that all rates which are — were in effect before the new rate, the railroad had filed to which it — the water carrier’s objective, is that right?

    Daniel M. Friedman:

    No.

    No Mr. Justice, this is not going to affect the old rates.

    This — what this did — what this adjustment was, you had a series of rates prior to 1950 —

    Hugo L. Black:

    Well this —

    Daniel M. Friedman:

    It reduced the short-haul rate to the level of the long-haul rate.

    Hugo L. Black:

    Did it grant the relief? Did this reinstatement of whatever, or decorations of a new rate, whatever it was.

    Did it give the water carrier what they had asked in their protest?

    Daniel M. Friedman:

    No, Mr. Justice.

    Hugo L. Black:

    Alright.

    Now, let me —

    Daniel M. Friedman:

    But —

    Hugo L. Black:

    Let me go on (Voice Overlap) —

    Daniel M. Friedman:

    They have not —

    Hugo L. Black:

    Alright.

    Daniel M. Friedman:

    I just want to explain why it didn’t because the —

    Hugo L. Black:

    At the present time I’m not interested to know why.

    I’ll let you stay just a moment.

    Then the plaintiffs came in and said that this is a continuing practice of the Commission, and we want you not only — we want you first to enjoin this order because it was bad itself.

    And secondly, we want you to enjoin the practice which is a continuing one and — from which we can get no relief except by an order to the Commission to stop doing it.

    And the Court pointed out on page 64, they had raised these two questions but he held that it was moot.

    Daniel M. Friedman:

    That’s correct.

    Hugo L. Black:

    Now, I didn’t mean to stop you from answering, all I wanted to get was while I had it in my mind those dates.

    Now, you want to say something about what happened.

    Daniel M. Friedman:

    Those dates are correct.

    Hugo L. Black:

    I’d be very much interested to hear them.

    Daniel M. Friedman:

    I think some, Mr. Justice, that I’m — perhaps if given the false impression, I would say that the action of the railroads in eliminating the differential did give the appellants the relief they were asking for because the only relief they could seek was a relief against an order which permitted a violation of the Fourth Section.

    Hugo L. Black:

    Against that order.

    Daniel M. Friedman:

    Against — no I’m going —

    Hugo L. Black:

    What happened to the water carriers practically as a result of the new order?

    I’m not — just forget —

    Daniel M. Friedman:

    I just don’t —

    Hugo L. Black:

    — Section 4 and —

    Daniel M. Friedman:

    But the new order Mr. Justice eliminated any violation. Once the new rates were in effect, there was nothing the appellants could complain about except they could protest the reasonableness of the rates.

    Hugo L. Black:

    That’s right.

    Daniel M. Friedman:

    But I —

    Hugo L. Black:

    But did they, from withdrawing the old order, did the withdrawal of the old order by the railroad to paraphrase it, did that in and — if that had been in and of itself, all it was done, then the rates would’ve been returned to the original level before that (Voice Overlap) —

    Daniel M. Friedman:

    I’d have to say they would not be returned to this original level to be — the original relationship.

    They would’ve both been reduced.

    They would have both been reduced.

    Do you see they originally reduced —

    Hugo L. Black:

    And do you mean that under the new — some kind of a new order, but I’m talking about — suppose you just — they just withdrew the tariff rate to which the objection has been raised, that’s all that happened —

    Daniel M. Friedman:

    Yes.

    Hugo L. Black:

    Let’s suppose that.

    Daniel M. Friedman:

    Yes.

    Hugo L. Black:

    Nothing else suggested.

    The Commission did nothing else.

    What would then have been the status to the railroad rates, over the —

    Daniel M. Friedman:

    As they have been before then.

    Hugo L. Black:

    As they’ve been — alright.

    Now, did they on this order which has been held moot, have they been restored to the original status?

    Daniel M. Friedman:

    They have been restored not to the — they have not been restored to the same amount, but they have been restored —

    Hugo L. Black:

    It’s not the amount that they’re talking about, isn’t it?

    Daniel M. Friedman:

    No, it’s the relationship.

    It’s the relationship.

    Hugo L. Black:

    That’s right.

    Daniel M. Friedman:

    Because Mr. Justice what —

    Hugo L. Black:

    But that involves an amount.

    There’s an amount of —

    Daniel M. Friedman:

    Yes.

    Hugo L. Black:

    — we had before, and the amount that’s in here, and what this fight is over, is that these water carriers claimed that the Commission has been — as I understand it, systematically by various devices in its reading in reference to various types of orders has been systematically discriminating against the barge line rate so as to deprive them of the differential level to which Congress intended them to have.

    Daniel M. Friedman:

    But the effect of the order in this case was to eliminate the violation of the Fourth — sir, if I may draw the analogy of the rates that previously has been at this level.

    Let’s assume this is the long rate and this is the short rate and then the long rate was pushed down below the level of the short rate.

    Now, the effect of the adjustment made by the railroads in 1960 was to push the short-haul down again, so you have the same relationship at a different amount, at different dollar and cent amount.

    Hugo L. Black:

    So then you’re understanding of it is, Mr. Hayes, we can find it later, your understanding of it — and that’s what I was trying to find out in that connection, is that while there was one level of a high-rate here and one level of the high-rate here, they said that the relationship between the two rates was wrong and discriminatory.

    The new rates that were put into effect at the time when the question of mootness arose, retained that old level which as a relationship between the two level, so that they have in effect and in substance by the new order, gotten that which they wanted to reach.

    Daniel M. Friedman:

    That’s — that’s correct.

    Hugo L. Black:

    That’s what I was —

    Felix Frankfurter:

    Before you sit down, I want to ask you this question, if a person goes in to the United States District Court, claiming that in order of the or relief under Section 4 to be very specific, was either invalid statutorily or offensive as a due process of law, and seeks to enjoin that order, may a District Court give a temporary restraining order against the enforcement of that order until the litigation in the District Court on the claim of invalidity, etcetera?

    Daniel M. Friedman:

    I would think so Mr. Justice, so that —

    Felix Frankfurter:

    Are there any doubts about that?

    Daniel M. Friedman:

    There have been cases which have done it.

    I —

    Felix Frankfurter:

    That’s customary thing, isn’t it?

    Daniel M. Friedman:

    Yes.

    Felix Frankfurter:

    You hold a situation, the relief isn’t — the fruit of the relief isn’t garnered until after the litigation enjoining a contested illegal order is disposed, is that right?

    Daniel M. Friedman:

    That’s correct.

    Felix Frankfurter:

    And for 10 months here — Mr. Hayes will have a say on that.

    I’ll take it, for 10 months no such relief in the courts against the allegedly unconstitutional relief that was given was taken or sought.

    Daniel M. Friedman:

    That’s correct.

    Felix Frankfurter:

    Is that correct.

    Daniel M. Friedman:

    Thank you.

    Donald M. Tolmie:

    Addressing myself to subject to which are —

    Mr. Tolmie, is —

    Donald M. Tolmie:

    Oh, forgive me.

    (Voice Overlap) —

    Donald M. Tolmie:

    I thought that your time was through.

    Very well.

    Mr. Tolmie.

    Donald M. Tolmie:

    Mr. Chief Justice, may it please the Court.

    A great deal has been raised as to the factual situation here with the rates.

    I think it’s rather important that this be reviewed.

    The grain traffic here involved moves from Northern Illinois, origin, to Eastern destinations.

    The rates on which this traffic moves are made up of two parts, one is a rate into Chicago and the second portion is a reshipping rate from Chicago to the East.

    Now, prior to the rate reduction of 1959, prior to the reduction here involved, the Western railroads had in effect reduced the rates into Chicago at the same time the water carriers had rates in effect into Chicago.

    The Eastern railroads had reshipping rates which applied from Chicago to Eastern destinations on practically all traffic, grain traffic originating in Western territory.

    However, there’s one glaring exception to this and that is on grain from Northern Illinois origins arriving at Chicago by rail.

    These reshipping rates would not apply.

    Now, the reason for the —

    Felix Frankfurter:

    Would you mind repeating — just the repeat those very words again —

    Donald M. Tolmie:

    On grain from Northern Illinois arriving at Chicago by rail, the Eastern railroad’s reshipping rates applicable from Chicago to the East would not apply.

    William J. Brennan, Jr.:

    What would apply?

    Donald M. Tolmie:

    What would apply would be the inbound rail rate plus an amount necessary to equal the local rate which was applicable from Chicago to the East.

    Now, the purpose of this was that without applying a rate greater than the reshipping rate in Chicago, the railroads would be in violation of the long and short-haul laws.

    Charles E. Whittaker:

    By reshipping rates, do you mean a sort of a transit privilege?

    Donald M. Tolmie:

    Well, it’s called a proportional rate.

    The rate applies only if there has been a prior movement inbound to that point.

    Normally, there would be transit at that point.

    Yes sir.

    Charles E. Whittaker:

    It doesn’t mean that the goods have to be necessarily reloaded to another car?

    Donald M. Tolmie:

    No.

    Hugo L. Black:

    I don’t understand then from what you say now.

    Hugo L. Black:

    I don’t want to take your time.

    Donald M. Tolmie:

    Yes, sir.

    Hugo L. Black:

    But I don’t understand the difference in what’s the — what’s been done here in connection with fixing the rates and what was done in the Mechling case where we said the Commission was wrong.

    Donald M. Tolmie:

    Sir, or Your Honor I’d like to get to that —

    Hugo L. Black:

    That’d be good.

    Donald M. Tolmie:

    — if I may in just the moment.

    Hugo L. Black:

    That’s why I asked you so I could understand.

    Donald M. Tolmie:

    From —

    Hugo L. Black:

    It was a proportion rate.

    Donald M. Tolmie:

    Yes sir.

    On barge traffic originating in Northern Illinois distant to the East which arrives at Chicago by barge, this reshipping rate would apply and still does apply.

    This was a result of the Mechling Barge Line case where in this Court required that the Chicago to the East railroads cannot lawfully charge more for carrying ex-barge grain than they can charge for carrying ex-lake or ex-rail grain to or from the same locations.

    Now, the effect —

    Hugo L. Black:

    I think — pardon me, but I think we said whether they call it proportional or whatever device is used.

    Donald M. Tolmie:

    That is correct.

    The effect of the rate provisions that is the effect of the availability of the reshipping rate to ex-barge traffic, and the unavailability of this reshipping rate to ex-rail traffic —

    William J. Brennan, Jr.:

    As I take, it was lower.

    The reshipping rate (Voice Overlap) —

    Donald M. Tolmie:

    Reshipping rate —

    William J. Brennan, Jr.:

    — in what it had to charge with the ex-rail cargoes.

    Donald M. Tolmie:

    Yes.

    If it we’re not, the reshipping rate would apply.

    The effect of this is — was an exact turnabout of what faced the Commission in the — or rather faced the Court in the Mechling Barge Line case.

    The railroads were charging more, the Eastern railroads were charging more on ex-rail traffic to Northern Illinois than they were charging on ex-barge traffic from Northern Illinois.

    Now, because of the — because of Section 4 of the Act, the railroads before they could affect any change in this, had to deal with the rates from the intermediate points.

    That is the local rates from Chicago or the local rates from Indiana to the East.

    This could be dealt with in two manners.

    Either to reduce the rates at the intermediate points, the local rates from Chicago to the East, or to seek Fourth Section relief to maintain the high rates of the intermediate points and permit the combination of the rail rate in the Chicago and the reshipping rate out of Chicago to apply to this traffic.

    What the railroads did elect to do was to secure Fourth Section relief.

    Their application was filed.

    Donald M. Tolmie:

    All interested parties including the appellants here did file, did have the opportunity and did file protests.

    In these protests, they stated their views.

    Now, as a result of the relief granted, the Eastern railroads were able to charge the same for their service from Chicago to the East whether the traffic arrived by barge or grain or rail at Chicago.

    It should be noted that the same result here could’ve been reached by reducing the lower rates from Chicago — by reducing the short-haul rates applicable from Chicago to the East.

    Now in fact, this is what was ultimately done in March of 1959.

    The railroads at that time reduced the short-haul rates.

    By this reduction, any violation or departure from the long and short-haul clause was removed and any relief which the railroads had been granted under the Fourth Section orders here involved, expired.

    The appellants here have asserted that the reductions in the short-haul rates, that is the rates from Chicago and Indiana points was done solely or was done for the purpose of avoiding a judicial determination of validity of the orders in this case.

    All I can say, since there’s nothing more in the record that this was not the fact, that there were other economic factors which were involved.

    I see my time is up.

    Mr. Hayes.

    Edward B. Hayes:

    I should have to talk fast in the few minutes remaining.

    The large part has been made of the circumstance, if we tried to get our relief before the Commission by hearing that without going into court, to set this order aside.

    We did try.

    We did not get our hearing.

    We did not get our relief.

    The hearings were finally set, then they were reopened, then they were combined with other things, all on the motion of the railroads.

    Hugo L. Black:

    What period of time are you —

    Edward B. Hayes:

    Over our protest, a period of 10 months.

    And why didn’t we go into court immediately?

    Your Honor, we did go into court immediately in the preceding situation which is described in the record.

    It didn’t get us anywhere.

    There have been other attempts to get correction in court and when the correction is sought, the rates are withdrawn, the court has told there’s no controversy, and the same thing happens right over again a few months later and the instances — of nine of these instances in the period of less than a year are detailed in the record in this case —

    Felix Frankfurter:

    But Mr. Hayes —

    Edward B. Hayes:

    — any time (Voice Overlap) — may I finish my thought Your Honor.

    Felix Frankfurter:

    I’m sorry.

    Edward B. Hayes:

    A determination of any particular instance of that can always be engineered in just this way.

    We observed that it is.

    We should spend what money we’ve got left in going into court proceedings that aren’t going to do us any good.

    Felix Frankfurter:

    Well, but you always — in this — you’re here now proving that if you don’t get relief in the lower court, you can come to this Court.

    Edward B. Hayes:

    If I don’t get relief —

    Felix Frankfurter:

    And you don’t get relief in this Court before.

    Edward B. Hayes:

    But the point is, Your Honor, that they are now saying in this Court are they not, here we can’t get relief in this Court because the matter is moot.

    Felix Frankfurter:

    But they’re the counsel and they’re not the Court.

    Hugo L. Black:

    They are —

    Edward B. Hayes:

    Your Honor — no words can express my gratitude for that fact.

    Hugo L. Black:

    They argued before in the other cases, didn’t they, that there could be no relief granted because they have — hadn’t followed the proper procedural practices of the Commission, and the Court finally held to the contrary.

    Edward B. Hayes:

    Yes.

    Professor Sharpman (ph) does not endorse this practice.

    This is not an inveterate practice of 73 years standing.

    I quote from Professor Sharpman (ph), page 245 Volume 3, “But the applicant is required to –,” and that’s the railroad, “Is required to state whether a hearing is or is not desired and it is the uniform practice of the Commission to hold hearings upon the request of any party.”

    Hugo L. Black:

    When was that written?

    Edward B. Hayes:

    That was 1937.

    I — he refers to the original —

    Hugo L. Black:

    That is cited in your brief?

    Edward B. Hayes:

    I think they cite it in there.

    Felix Frankfurter:

    Yes, but you don’t read the sentence before the one you read —

    Edward B. Hayes:

    On the basis of the facts and circumstances thus submitted the applications are disposed off in the great majority of instances after investigation and recommendation by the Fourth Section’s Board, but the —

    Felix Frankfurter:

    Without (Voice Overlap) —

    Edward B. Hayes:

    May I read the second sentence in its context please?

    Felix Frankfurter:

    But, finish the sentence if you like (Voice Overlap) —

    Edward B. Hayes:

    I did read — finished it.

    Felix Frankfurter:

    Without formal proceedings?

    Edward B. Hayes:

    Yes.

    Felix Frankfurter:

    Alright, you didn’t read that.

    Edward B. Hayes:

    I thought I had.

    Felix Frankfurter:

    Well, alright, then I didn’t hear it.

    Edward B. Hayes:

    May I re-read Your Honor.

    Reread it please.

    I’d like to hear it.

    Edward B. Hayes:

    “On the basis of the facts and circumstances thus submitted, applications are disposed off in the great majority of instances after investigation and recommendation by the Fourth Section Board without formal proceedings,” that’s a great majority of instances.

    This is the next sentence, “But the applicant is required to state whether a hearing is or is not desired, and it is the uniform practice of the Commission to hold hearings upon the request of any interested party.”

    Hugo L. Black:

    Was there such a request here?

    Edward B. Hayes:

    Pardon?

    Hugo L. Black:

    Was there such a request here?

    Edward B. Hayes:

    There was such a request here your —

    Potter Stewart:

    And a hearing was scheduled, wasn’t it?

    Edward B. Hayes:

    A hearing was scheduled after the order was made that disposed off our rights.

    Now, their suggestion is that our rights can be disposed off for 14 months without a hearing, “Sentence was first, verdict afterward.”

    That has not been the procedure of the Commission and there has been no communication to Congress to that effect.

    I quote from the 1950 report of the Commission, published here in 1951.

    Frequently, during the past year, we have had occasion to consider either in suspension proceedings of Fourth Section application cases, rail rates reduced to meet water competition.

    Numerous suspensions of the rates resulted.

    In some instances after investigation, the reduced rates were found not unreasonable below.

    In others they were found not justified and required to be cancelled.

    It has been the general policy of the Commission not to grant any relief from the Fourth Section to meet water competition without full justification of the hearing.

    This is a new practice.

    It is not the inveterate practice since 18 — the first rules of the Commission provided that the first thing that would be done in the Fourth Section application was filed was to set the date for the hearing.

    That’s quoted in the next page on Sharpman (ph) from which I read.

    Felix Frankfurter:

    Despite (Inaudible) the statute as the Solicitor General considered?

    Edward B. Hayes:

    I can’t see how it does and yet that is urged, Your Honor, and seems to have weight.

    And perhaps it may have some significance that this is a practice which has come in only since 1950.

    And is not the inveterate practice which Congress has presumed to have sanctioned by its acquiescence at all.

    Then, it is suggested that we can make a showing to the Commission in opposition to an application, an application which is made in a case which was described from the bench as very difficult and complicated.

    The case in which we are expected to meet a mass of tendentious data which we dispute as to which we raised contested issues of fact, issues that we can only present on a hearing when?

    15 days will not give a man an opportunity to what relief against him, to his opponent that takes his property that is going to be in effect for 14 months particularly when that same thing can be done again and again and again.

    I’m tempted to say a famous quotation, “Indeed it can.

    Indeed it is.”

    This complaint says that it is.

    This complaint is admitted as to its factual averments.

    John M. Harlan II:

    Does the Commission ever grant extensions of the 15-day period?

    Edward B. Hayes:

    No, sir.

    You don’t get those extensions.

    Furthermore, after the railroads have amassed this material, you come in with what you can do in 15 days then the railroads have another 10 days to reply, and you can make your agenda to that reply.

    That is not what courts of equity do.

    William J. Brennan, Jr.:

    Mr. Hayes, I think you’ve mentioned earlier that there have been several continuances of the hearing date.

    Can you shortly give me the — what the chronology was?

    Edward B. Hayes:

    The hearings were not set until months —

    William J. Brennan, Jr.:

    Well, how many months?

    Edward B. Hayes:

    — after the order was entered, but were held the order having been entered on the date stated.

    The hearings were held in July.

    The hearings were then concluded, and the record closed then —

    William J. Brennan, Jr.:

    I know.

    But that’s — this is where we’re getting at.

    I think you said earlier that in this particular case, a hearing date hadn’t been set.

    Edward B. Hayes:

    Had not been set, when they entered the order.

    William J. Brennan, Jr.:

    No, no.

    But when was that entered?

    That date was continued — I thought you said several times before the hearing was finally held and it continued on each case on application of the Railroad.

    Edward B. Hayes:

    There were delays in concluding the hearing.

    They are set forth in detail.

    William J. Brennan, Jr.:

    I don’t want to take up your few seconds, was the hearing begun on the date originally scheduled for the hearing to begin?

    Edward B. Hayes:

    My recollection is that it was not, and it did not occur until the following July.

    And I know that it was reopened then.

    And I’m perfectly clear that there were delays of those hearings over our objection at the instance of the railroad applicants.

    That is detailed in our complaint, these names, dates, times, and places.

    That is not what courts of equity do.

    What courts of equity do is to issue orders, not to change the status quo, based on determination of the contested issues before it.

    But to maintain the status quo.

    They issued those orders to maintain the status quo until there was a hearing.

    Edward B. Hayes:

    This is the diametrical opposite.

    It changes the status quo before the hearing and even with respect to the maintenance of the status quo, a court of equity as pointed out from the bench will require at the instance of any party that if it has entered an order to maintain the status quo, generally done only under bond to protect damages but if it is entered that order to maintain the status quo, then the parties must proceed promptly to that hearing upon the merits.

    The maintenance of the status quo protected by bond against damages with the requirement of immediate proceeding, the hearing on the merits, is not the same as this changed the status quo.

    And the ultimate contested issues without anything to protest damages, that continues — yes, we could go into court perhaps, they’d withdraw their application and just as they did here, they’ve done it many times before —

    John M. Harlan II:

    Could I ask you a question —

    Edward B. Hayes:

    — we’d be up against the same thing.

    John M. Harlan II:

    Could I ask you a question on that score?

    Suppose you have gone into court in such an application and you would — but not (Voice Overlap) — you have been met with the withdrawal that you said had been your previous experience, but the court have had authority to preserve the case against mootness by requiring — by enjoining them — by refusing to permit to withdraw their application?

    Edward B. Hayes:

    Yes.

    And not by refusing to permit them to withdraw their application —

    John M. Harlan II:

    (Inaudible)

    Edward B. Hayes:

    But that — except for that circumstances as just what the court below should have done and didn’t do in which we asked —

    John M. Harlan II:

    With the authority of the court?

    Edward B. Hayes:

    But certainly, it had under the Southern Pacific case which is undistinguishable from this one.

    Mr. Hayes, may I — before you to sit down, your time is up, but before you sit down, would you answer this question please.

    When the railroads restored their rates which is — this claim made this case moot, was any portion of the order of the Commission less standing?

    Edward B. Hayes:

    Yes sir.

    Would you mind —

    Edward B. Hayes:

    That was —

    — to tell us — telling us what that was and how, if at all, it affects your case?

    Edward B. Hayes:

    Yes sir.

    This order of the Commission is now admittedly an unlawful order.

    It is an order that authorizes the railroads to charge those lower rates for longer hauls that did us this damage.

    Now, the order is admitted to be unlawful by the Commission, but it is not admitted to be unlawful by the railroads.

    If we proceed against the railroads whose brief prefers only to Section 8 of the Interstate Commerce Act by the way, is necessary also to read Section 9 giving us the right to proceed in court we choose, if we proceed against the railroads, then they who have not admitted the invalidity of this order will say to the court, these people are trying to recover against us for doing something which an outstanding order of the Commission authorizes us to do, that under the (Inaudible) case is absolutely out of order.

    The only place that we can get relief against that order so that we may recover our damages is in this direct review.

    Indeed, the Government substantially conceded that suggesting some sort of an exception for this case, as the court remarked, the court is not a counsel.

    And the lower court will not concur if the railroads can’t help it in that view, and the Commission won’t be a party there, the railroads only will.

    Therefore, it stands as a bar until this Court strikes it down on this direct review to our recovery of damages which were unlawfully authorized and were unlawful rates.

    Does the fact that the withdrawal of their rates leave standing that portion of the finding of the Commission that they had made a showing that entitles them to consideration under Section 4?

    Edward B. Hayes:

    Well, —

    Do that — does that affect —

    Edward B. Hayes:

    The Commission didn’t — forgive me Your Honor.

    It — let me answer what I —

    Yes.

    Edward B. Hayes:

    The Commission didn’t make that finding.

    All the Commission said was, the rates are authorized and you can charge, and that is left standing.

    I think that’s what you inquired upon.

    Because didn’t they have to make some kind of a finding first if there were special circumstances that —

    Edward B. Hayes:

    They made none at all.

    They made nothing?

    Edward B. Hayes:

    They made none, and in that respect, they admit here the order was an unlawful order.

    I see.

    Edward B. Hayes:

    And there, that unlawful stands, the unlawful order stands to bar us from collecting the damages which we suffered —

    William J. Brennan, Jr.:

    Well, except the —

    Edward B. Hayes:

    — from the unlawful rates which it unlawfully offered.

    William J. Brennan, Jr.:

    Except Mr. Hayes, if we get over the mootness point, the Government concedes that this particular order has to be vacated.

    Edward B. Hayes:

    But Your Honor, the railroads don’t.

    William J. Brennan, Jr.:

    Well —

    Edward B. Hayes:

    And unless this order is vacated, then the railroads against whom we —

    William J. Brennan, Jr.:

    The railroads don’t join the Government in that?

    Edward B. Hayes:

    No sir, they do not.

    Felix Frankfurter:

    Well, the order then, it is focused, isn’t it?

    Edward B. Hayes:

    No sir, the order authorize —

    Felix Frankfurter:

    I don’t mean to — I don’t mean that the order has illegally put the slit — I mean by the change in rate condition of the order —

    Edward B. Hayes:

    How about the damages we suffered in the meantime with that order authorized?

    Felix Frankfurter:

    Well that — that is not an issue here.

    Edward B. Hayes:

    That is going to be an issue if as and when this Court sets that order aside, and we sue the railroads for charging those rates without a lawful Commission authority, until this Court sets it —

    Felix Frankfurter:

    You say that — you tell us for the future but not for the past.

    You are arguing that even if it’s settled it for the future, it doesn’t settle it for this order.

    Edward B. Hayes:

    No sir, it does not.

    Felix Frankfurter:

    Well, if —

    Edward B. Hayes:

    We lost money through all that time.

    And our affidavit showed heavy losses.

    Felix Frankfurter:

    But if the order — if the case is moot, then I should think according to our usual practice, the underlying legal document ought to be vacated to which the order, I think that follows as a consequence.

    Edward B. Hayes:

    The only consequence that I recall —

    Felix Frankfurter:

    That follows the consequence (Voice Overlap) —

    Edward B. Hayes:

    — Your Honor, knows a great deal more about that than I am but if I may respond to the suggestion, the only thing that gets vacated is an underlying legal document that I recall in those circumstances, is the order of the lower court.

    You don’t vacate the order of the Commission, the order of the Commission is still there.

    Felix Frankfurter:

    I don’t — at the moment, I see no difference in saying a proceeding which seeks to challenge an existing order of administrative agency reviewable in court and the court finds a review of that order not within its jurisdiction, loosely speaking because it’s moot.

    I should think the same line of reasoning which vacate that which is now not subject to review because of change in circumstances.

    Edward B. Hayes:

    Well, its — it’s — I — Your Honor, the only thing I can say to you is –

    Felix Frankfurter:

    I’d hope you’ll agree —

    Edward B. Hayes:

    I do not agree with you.

    I should think you’d like —

    Felix Frankfurter:

    I thought that you might embrace that suggestion.

    Edward B. Hayes:

    And unless something is done to set that aside, the railroads who — to act on that.

    Felix Frankfurter:

    And I thought (Voice Overlap) —

    Edward B. Hayes:

    The railroads —

    Felix Frankfurter:

    Your handsome present there is —

    Edward B. Hayes:

    Well, if you say that in a binding way that binds the railroads in our subsequent litigation, then you have given me a present, but not if you dismiss this case as moot.

    Felix Frankfurter:

    This thought was not a present.

    Thoughts are not present.

    You also have to — I mean, I don’t know what this Section have because we haven’t discuss it, the proposition that when you sue it for damages under the Abilene doctrine, it will have to be sent back to the Commission to determine anew on the facts, whether the order was justified, under the cases we’ve had.

    Edward B. Hayes:

    Yes, that argument would be made.

    We think there’s a good answer, if this order is set aside under the American Union Coal Company case cited in the Eastern District of Pennsylvania as the beginning in 156 Federal and many others.

    But —

    Felix Frankfurter:

    Mr. Friedman —

    Edward B. Hayes:

    — we ought to have a right to present those issues to the court on bar by an order unencumbered and unclogged by an order which is admitted by the Commission to be an unlawful one.

    The railroads also admitted that is what they’re going to use when we take them in.

    Mr. Hayes, may I ask you another question and I will ask the same question with Mr. Friedman, if you think it would help us in it, I need to have the original petition, the protest that were made against it and the original order made by the Commission, and if you do think it would help us, would there be any objection on the part of the parties to making them available to us?

    Edward B. Hayes:

    There is absolutely nothing that this Court has any interest in that I don’t have the greatest desire to have this Court have.

    I would like to point out that the original order of the Commission is a part of this record.

    It’s alleged in the admitted complaint, the series of four orders just the same like soldiers at rest and just as unlawful form, admittedly unlawful form, that is part of the record, and our complaint thus set forth that we file the protest here alleging that those rates were destructive.

    It’s threatened the extinction of legitimate water competition and were lower than necessary certainly to meet legitimate water competition.

    And counsel for the Government conceded in his argument that that goes to whether or not it is a reasonably compensatory rail rate.

    It reasonably it goes two ways, that is before the court and anything more the court desires for me, I desire affirmance.

    Potter Stewart:

    Are the same rates being charged today?

    Edward B. Hayes:

    Is it the same long-haul rates?

    Potter Stewart:

    Yes.

    Edward B. Hayes:

    Yes, and we can attack them now only on the basis that they are unreasonable under Section 1.

    Potter Stewart:

    Yes.

    There is no differential.

    Edward B. Hayes:

    We attack them —

    Potter Stewart:

    That there’s no Section 4 differential anymore?

    Edward B. Hayes:

    Not anymore.

    Potter Stewart:

    But the same rates are being — the long haul-rates are being charged right now (Voice Overlap) —

    Edward B. Hayes:

    When we could attack them now only under Section 1.

    Felix Frankfurter:

    How long have they been enforced?

    Edward B. Hayes:

    The record shows —

    Felix Frankfurter:

    No, I mean the old rates, not the — what’s the original date of the old rates, the citing date of the old rate?

    Edward B. Hayes:

    The old —

    Felix Frankfurter:

    Which are now enforced?

    Edward B. Hayes:

    Well, those are put in under this Fourth Section application.

    Felix Frankfurter:

    But I thought they restored?

    Potter Stewart:

    No, they did not.

    They’ve lowered the short-haul rates —

    Felix Frankfurter:

    They lowered short-haul —

    Potter Stewart:

    They did not restore the old rates, did they?

    William J. Brennan, Jr.:

    The long-haul rates that were constituted by this temporary order are now in effect and have been in effect, they were sustained temporarily.

    Edward B. Hayes:

    The long-haul rates that are now in effect were those that were put down to their present level as a result of this Fourth Section order.

    Charles E. Whittaker:

    That is not throughout, or Mr. Hayes, are they not in fact as a result of the publication and filing of the new tariff?

    Edward B. Hayes:

    Yes.

    Charles E. Whittaker:

    So, I’d like you to tell me why you wouldn’t be just (Inaudible) in this case and be mooted and they take the judgment and the order in light of the Commission’s and Solicitor General’s representations -– the Commission’s representations that the practice of (Inaudible) and that henceforth they will make their findings before they issued Section 4, why wouldn’t that do you everything you want?

    Edward B. Hayes:

    Certainly it would enable us to recover our damages.

    Charles E. Whittaker:

    But what wouldn’t it —

    Edward B. Hayes:

    Certainly it would not do this Your Honor.

    It would not give us the right to have a hearing before the Commission, the body appointed by Congress to hear the facts and judge the issues on which our rights depend.

    Charles E. Whittaker:

    This was a —

    Edward B. Hayes:

    Before — if you include in that, a requirement that they shall not only make findings but before they make a binding order, they shall give us a chance to be heard as we put —

    Charles E. Whittaker:

    Well, that would be —

    Edward B. Hayes:

    That would give us all we want.

    Charles E. Whittaker:

    That may be another case, that may be an advice, the opinion but that’s a –.

    Edward B. Hayes:

    That’s this case because we attacked that practice in this case, not only the failure to make findings, but the failure to give us a hearing before they cut our heads off.

    Charles E. Whittaker:

    (Inaudible) shouldn’t have done that.

    Edward B. Hayes:

    And they do it again tomorrow?

    Charles E. Whittaker:

    Well, isn’t that another case?

    Edward B. Hayes:

    No sir.

    Charles E. Whittaker:

    (Inaudible)

    Edward B. Hayes:

    Assuming they are in good faith, unless this Court binds them to that practice, then if their views changes to what the law requires in good faith, they would be bound to change their practice.

    It’s only this Court’s directive that they dragged, with this Court’s directive they must follow the law.

    Otherwise, with these short-term orders, there is a no man’s land of uncontrolled administrative action.

    Charles E. Whittaker:

    Is it true — I asked you please.

    If we could read the representations of the Solicitor General and the ICC that we have to stop this practice, if we believe that then, isn’t the case moot?

    Edward B. Hayes:

    No sir.

    If you believe that the representations of the Solicitor General to that this was an unlawful order, then I presume if you so hold an opinion, you will have — stop the practice.

    But the belief of the representation of a public officer as to what is lawful, I am challenged — the Solicitor General’s integrity on that at all.

    It does not bind the administrative agency.

    It does not even bind his successor.

    There will be nothing to prevent this same practice from going on even immediately —

    Charles E. Whittaker:

    Well, should we pronounce that type of matter here in a moot case?

    Edward B. Hayes:

    The case is not moot Your Honor.

    Charles E. Whittaker:

    Is not a — wouldn’t be if we accept as I understand you to — the representations of the Solicitor General that this practice is no longer to be followed in the Commission?

    Edward B. Hayes:

    No, sir.

    Yes.

    But if we said because it’s an illegal — because we find that is an illegal practice, would that take care of you?

    Edward B. Hayes:

    If you say that it’s illegal because we find it an illegal practice —

    Yes.

    Edward B. Hayes:

    — then that does my business with respect both to the findings and the failure to give a hearing before they could argue it.

    Felix Frankfurter:

    But Mr. Hayes, speaking for one member of the Court, that this — the Solicitor General does not concede that a hearing is required, he protests that claim and so far as I’m advised, he rightly protests that claim.

    Charles E. Whittaker:

    I didn’t conclude in my assumption in the hearings, he says there must be findings, and whatever you are going to rest those findings on, is another day perhaps, but he agrees this is order is bad.

    And he says they’ve stopped the practice.

    Now then, what would be tried if we remanded this case to the three-judge court?

    What issue would there be to that effect?

    Edward B. Hayes:

    I don’t know.

    The only issues are concluded so far as they are factual issues by the admissions of the complaint and the showings of the affidavit.

    There may be some.

    But Your Honor, may I urge this, the questions involved in the orders of the Interstate Commerce Commission are usually continuing and these questions are manifestly continuing and their consideration ought not to be as they might be defeated by short term orders capable of repetition, yet evading review, and at one time, the one party, and at one time the other, have his rights determined without a chance of regress, unless you settle these matters.

    Then the short term orders will be recurrent.

    They will be recurrent not because the Solicitor General is in bad faith on the question of the necessity of findings.

    They will be recurrent because the Commission doesn’t agree with it or because he changes his mind or at any case, because this Court has not settled the right of the parties, the question that needs to be solved.

    And as pointed out from the bench on the other point, the necessity of hearings, that is question B in this case, just as much this case as the question of the necessity of findings.

    That’s that.

    That’s in the complaint.

    And on that, we think, we are entitled to be heard before it rule is off with our heads.

    Thank you, Mr. Hayes.