Southern Railway Company v. Seaboard Allied Milling Corporation

PETITIONER: Southern Railway Company
RESPONDENT: Seaboard Allied Milling Corporation
LOCATION: Massachusetts General Assembly

DOCKET NO.: 78-575
DECIDED BY: Burger Court (1975-1981)
LOWER COURT: United States Court of Appeals for the Eighth Circuit

CITATION: 442 US 444 (1979)
ARGUED: Apr 23, 1979
DECIDED: Jun 11, 1979

ADVOCATES:
Harold E. Spencer - for the respondents Board of Trade of the City of Chicago, et al.
John H. Caldwell -
Mark L. Evans - for the petitioner in No. 78-597
Richard A. Allen - for the respondent, the United States
Wandaleen Poynter - for the petitioners in No. 78-604

Facts of the case

Question

Media for Southern Railway Company v. Seaboard Allied Milling Corporation

Audio Transcription for Oral Argument - April 23, 1979 in Southern Railway Company v. Seaboard Allied Milling Corporation

Warren E. Burger:

We'll hear arguments next in 78-575, Southern Railway against Seaboard and the consolidated cases.

Mr. Evans, I think you may proceed whenever you're ready.

Mark L. Evans:

Mr. Chief Justice and may it please the Court.

These consolidated cases are here on certiorari to the Court of Appeals for the Eighth Circuit.

They present a discrete issue of reviewability.

Are the courts empowered to review an ICC decision not to investigate a proposed railroad rate change before the change takes effect?

The Court of Appeals held that such a decision is reviewable and we argued that it is not.

The case started in August 1977 when the Southern Railroads filed tariffs proposing a 20% seasonal increase on the rates for the transportation of grain in the southern territory.

The tariff was to last for three months and it was among the first of the tariffs filed under the 1976 legislation which directed the Commission to allow the filing of such demand sensitive rates.

The purpose of the statute was to give shippers an incentive to reduce peak period transportation and to better use the national car pool of railroad freight cars.

Several groups of shippers including the respondents here filed protest with the Commission arguing that the increase has violated a variety of sections of the Act and they asked the Commission to suspend and investigate the rates under Section 15.

The Commission decided not to suspend or investigate essentially for two reasons.

First, it was not convinced that the shippers had made convincing arguments on the merits of their claims of unlawfulness, and second, because the Commission wanted to carry out the congressional policy of creating a regulatory climate that would be conducive to this kind of experimentation in railroad ratemaking.

The shippers filed a petition for review in the Court of Appeals for the Eighth Circuit.

They sought and we got a stay from the court for approximately eight days which enjoined the railroads from collecting the rates during that period.

The Court of Appeals declined to review the Commission's decision not suspend the rates but it held that it could review the decision not to investigate the rates.

A decision that is characterized as a termination of an investigation into the lawfulness of the rates, court of appeals reasoned that shippers -- the shippers had made substantial allegations that the tariffs were patently unlawful that the Commission had a duty to investigate and that it's what it referred to as a premature termination of the investigation was improper.

The decision was in conflict with the decision of the District of Columbia Circuit which had held unreviewable, a commission decision not to investigate under Section 15 of the Act.

The key to the case, I believe is in the structure of the acts, rate investigation and complaint procedures.

There are two ways that the Commission can investigate a railroad rate.

Under Section 15, it has the power before the effectiveness of the rate to institute an investigation and during that period to suspend the rate for up to seven or ten months depending on whether it seeks an extension of time pending the completion of the investigation.

If it decides against instituting a Section 15 investigation, anyone can complain under Section 13 and the Commission must investigate in response to their complaint.

William H. Rehnquist:

Am I right in thinking Mr. Evans that under Section 13 complaint, the Commission doesn't simply set as an adjudicator but it has an affirmative duty to investigate it?

Mark L. Evans:

It must investigate, it must begin a proceeding.

It is an effect an adjudicator of the proceeding, basically, a dispute between the complaining party on the one hand and the carrier on the other.

William H. Rehnquist:

Well, can it just seat back and say you two contestants bring your evidence before we will decide or does it have to participate in the investigation?

Mark L. Evans:

No, I think it's more the former.

It does not necessarily actively participate in the investigation by the same token of course has the power to develop the record if the record is not being adequately developed.

But investigation is a term that was used in the original act.

It really, in the recodification, it's been changed to the word proceeding.