TIME Incorporated v. United States

PETITIONER:TIME Incorporated
RESPONDENT:United States
LOCATION:Roosevelt Bar and Tavern

DOCKET NO.: 68
DECIDED BY: Warren Court (1958-1962)
LOWER COURT: United States Court of Appeals for the Fifth Circuit

CITATION: 359 US 464 (1959)
ARGUED: Jan 20, 1959
DECIDED: May 18, 1959

Facts of the case

Question

  • Oral Argument – January 20, 1959 (Part 1)
  • Audio Transcription for Oral Argument – January 20, 1959 (Part 1) in TIME Incorporated v. United States

    Audio Transcription for Oral Argument – January 20, 1959 (Part 2) in TIME Incorporated v. United States

    Bryce Rea, Jr.:

    — are substantively identical in their treatment of the problem of rate regulation.

    They adopted what was then and is now, the vogue in rate regulation.

    That is the filed rate theory.

    The seller of the service fixes a rate, files it with the Commission, it becomes effective, the Commission’s control is a legislative control to alter it for the future, either on complaint or on its own motion, that’s all spelled out by this Court very recently in the Mobile case and again to some extent in the Memphis case.

    In this respect Part II differs in Part I of these (Voice Overlap) —

    Bryce Rea, Jr.:

    In this respect, Part II differs from Part I and that brings me, Mr. Justice Harlan, to the root of the holding of the court below.

    The court first said Montana-Dakota doesn’t apply here, because all the Montana-Dakota case held was that a complaint to a federal District Court that a rate charged by a regulated power company was unreasonable in the past, states no cause of action under the Federal Power Act, therefore, said the Court of Appeals, the Supreme Court dismissed the complaint there being no diversity of citizenship between the parties.

    We submit that the Court’s holding is far broader than that.

    It did not, we submit, take this case to determine whether or not, or to delimit rather, federal jurisdiction in the sense of delimiting the jurisdiction of District Courts, since your course — or courts have limited jurisdiction.

    The holding is squarely this, as we see it.

    The right to a reasonable rate is the right to the rate that’s filed and effective with the Commission.

    No court can authorize any other rate, so no court can entertain a cause of action claiming a right to another rate.

    The Commission cannot authorize any other rate as a judicial matter respecting any period in the past.

    The Commission’s authority is the legislative authority to fix rates for the future.

    Therefore, to hold that a cause of action existed, would be to say that the Court can entertain a cause of action in which it can decide no issue, then the Commission can entertain a complaint which the statute does not permit it to entertain namely, a complaint directed to the past rates, then the Commission can make a finding and then the Court can go ahead and render a judgment.

    In other words, it would be saying, we submit, to read the Montana case as the court below read it that the absence of power in the courts, coupled with the absence of power in the Commission, can somehow create power in both of them together.

    The Government’s argument and shippers arguments generally, they go into the Court, they file their suit and the Court said, “We can’t determine what’s an unreasonable rate.”

    The shipper then runs over to the Interstate Commerce Commission and files a complaint alleging that this rate was unreasonable in the past.

    Of course, there’s no authority in the Commission’s act authorizing it to make adjudications as to the past, but the shipper says, “Oh, the Court has a cause of action pending.”

    You therefore, as a collaborative instrument of justice, to use Justice Frankfurter’s phrase in the Montana-Dakota case, can rend, make a finding.

    Well, as the majority held and as Justice Frankfurter speaking for the majority — speaking for the minority agreed, where you have properly filed rates, no allegation of fraudulent filing, such as was present in Montana-Dakota and is not present here, the whole theory of rate regulation is premised on the proposition that errors in rates, unreasonable rates, will be corrected by prospective action by the Commission in the proscription of other rates for the future.

    Now, the Court of Appeals and respondent here, then go over and argue after all, there is a cause of action against a rail carrier which codifies the rail — the shipper’s common-law right to a reasonable rate.

    There must be also such a right against the common carrier by motor and they make two arguments.

    They say first, the declaration in the Act, that rates shall be just and reasonable, creates a right, creates a cause of action in a shipper.

    They admit that the Act provides no method for its enforcement, but they say we can improvise the method namely, suit by the shipper in a common-law court or in a — in a common-law court followed by reference of the issue of reasonableness to the Commission.

    But we submit that Part I, regulating rail carriers and its specific provisions go far toward negativing any intention on the part of the Congress to create similar rights under Part II in regulating motor carriers.

    Part I, to begin with, Section 8, specifically says that “Anybody damaged by anything done by a rail carrier in violation of the Act, shall have redress in damages.”

    Section 9 provides that the shipper may either complain to the Commission pursuant to the complaint section which is 13 (1) or may sue in a federal District Court.

    Section 13 provides for the filing of complaints.

    Section 16 provides for the issuance of orders by the Commission determining the amount of damages any person has suffered by a railroad’s violation of the Act and the issuance of an order to compel payment.

    Bryce Rea, Jr.:

    Section 16 (2), provides that if the railroad fails to obey the Commission’s order and make payment within the time specified in the order, the shipper may file suit in the District Court and plead the order of the Commission as the gravamen of his complaint.

    Section 16 (4), provides a statute of limitations within which the shipper must bring his complaint for damages for the exaction of an unreasonable rate in the past.

    None of those provisions are found in Part II of the Act relating to motor carriers, not a single comparable provision.

    The only reference to any private redress for alleged violations of the Act in Part II, is the provision that suits for overcharges to recover overcharges, which are defined to exclude charges based on applicable rates and properly computed.

    It must be brought within two years.

    There is no provision, whatever, for any private redress.

    The redress for violations of the Act is carefully limited to actions by the Commission to compel enforcement.

    That is Section 222 (b).

    And interestingly enough, the Supreme Court of Oregon, which considered this question of the right of private redress for alleged violations of the Act very recently, the case is discussed at length in our reply brief, which was filed today.

    That’s Consolidated Freightways versus United Truck Lines cited by the Supreme Court of Oregon this past October and recorded in 330 P.2d 522.

    In that case, the Supreme Court of Oregon examined the legislative history of the Act at great length.

    And it pointed out that the original proposed act did provide that in the event of a violation of any of the provisions, any person injured or the Commission had a cause of action to enforce the Act.

    When the Act was enacted in the following year, that provision for private redress by individuals, persons injured was stricken and the Supreme Court of Oregon goes on to discuss the thinking of the Congress that they were taking under regulation, some 10,000 motor carriers in a completely chaotic state in 1935, when the whole problem, as the Government says in its brief, was to raise their rates from the — on economic levels at which they’ve understood.

    That facing for the first time as Mr. Eastman who was then Coordinator of Transportation, testified about the bill.

    The Commission was faced with some terrific regulatory problems.

    So that it was quite logical and sensible that they confined redress for alleged violations of the Act to the Commission, so that the development of the regulation of motor carriers, which was being taken over then for the first time, would proceed in an orderly way.

    Certainly, the Congress as the Government said had the background of Part I, dealing with rail carriers before it, at the time it enacted Part II in 1935.

    If it had intended to give shippers by motor carriers, the same rights to damages that it had earlier given shippers by railroad, it’s inconceivable that it would have conferred that cause of action by the simple declaration that unjust rates are unlawful, unjust and unreasonable rates are unlawful, when it had before it and at the very time it amend, it past the Motor Carrier Act, amended Part I, it had before it all of those elaborate provisions for damages against rail carriers.

    Do outline in Part I correspond in all its essential respects with the provision of the Federal Power Act?

    Bryce Rea, Jr.:

    No, Your Honor.

    The scheme in Part I corresponds with the scheme in Part III.

    Part I, of course, is the early act beginning in 1887, dealing with railroads.

    In 1935, the Congress passed the Federal Power Act and it passed the Motor Carrier Act.

    Those two are identical in their substantive provisions.

    The scheme is the same that provisions are, in many respects, so far as it’s possible for them to be word for word.

    In 1940, the Commission brought — I beg your pardon, the Congress brought under regulation the water carriers, common carriers by water, and interestingly enough, 18 — the old act of Part I begun in 1887, makes elaborate provisions for reparations by shippers charged unreasonable rates.

    1935, the Congress passes the Federal Power Act and the Motor Carrier Act neither contain any provisions for reparations both limit the Commission to this legislative function of fixing rates for the future.

    In 1940, five years later, the Congress enacted Part III of the Act bringing common carriers by water, certain of them, within the jurisdiction of the Interstate Commerce Commission.

    It went back to the scheme of Part I and Part III, enacted in 1940, contains precisely the elaborate provisions for reparations that are contained in Part I.

    I’d like to make this point to the Court of Appeals, spoke in terms of the right they thought existed from the declaration that rates be — must — must be just and reasonable, which as this Court held in the Montana cases, a criterion for administrative action.

    Bryce Rea, Jr.:

    It’s a standard by which rates are regulated.

    It is not the creation of a justiciable right.

    But they also went on to say that after all, at common-law, there was a right to a reasonable rate enforceable as to the past in a common-law court.

    We submit, and we think we demonstrated in our brief, that there could not have been a common-law right to a reasonable rate for the interstate movement of goods because there is no federal common-law.

    The recognition of such a right would mean that a state court, under state law, would determine the reasonableness of rates for interstate transportation.

    And certainly, it’s been held as from the Wabash case, forward that there is no state authority who’ll regulate rates and the existence of a common-law right which requires state action for the implementation — for the determination of the reasonable rate, in our view, would be to give the states power that they don’t have under the Constitution, namely, the right to fix rates for interstate commerce.

    The Government’s principal reliance, in its brief, is on this Court’s recent decision in Western Pacific, the Western Pacific case — Western Pacific versus the United States.

    And I just like to make this distinction which we think is patent.

    In the Western Pacific case, the General Accounting Office deducted alleging that particular rates on what the carriers classified as aerial bombs were not proper because the items transported were not bombs at all, they were napalm gel.

    The carrier brought suit in the Court of Claims to recover the amounts deducted by the General Accounting Office.

    The Government alleged that the rates were inapplicable and if in — if applicable, unreasonable.

    The Court of Claims disallowed the defense on the ground that it could not determine whether the rates were reasonable and that the statute of limitations in Section 16 of the Act which provides for the filing of complaints for damages with the Commission, had run, was applicable to the Government and barred the Commission from considering the matter of the reasonableness of the rates.

    This Court reversed and remanded the case to the Court of Claims with directions to refer the issue to the Commission, but this Court’s position was that in that case, there was no distinction in practicality between the allegation that the rates were inapplicable and the allegation that the rates were unreasonable.

    It took the view that the Government’s position was that the rates were inapplicable and that one reason the Government maintain that they were inapplicable is that — that because their use would produce an unreasonable result.

    Now, we think that all that case holds is that where a tariff is ambiguous, you can resort to parole evidence namely, you can examine the result of one construction as opposed to the result of another to ascertain its applicability.

    But in any event, that case proceeded on the perfectly proper premise that a shipper did have, under Part I of the Interstate Commerce Act, a right to a reasonable rate even though different than the file and effective rate.

    So there was no question whatever raised at any point, but that the Interstate Commerce Commission had fundamental jurisdiction bestowed on it by Part I to ascertain whether or not, that rate charged in that past period was reasonable and that the shipper had bestowed upon him by Part I, a right to recover damages if he had been charged an unreasonable rate, but to cite or to rely as the Government does on that case here, is to beg the question.

    It is to assume the answer to the very question.

    It is to assume that there is a justiciable legal right to some rate other than the filed and effective rate.

    And that’s the question before Your Honors.

    Is there such a right?

    We submit that there is not that the Interstate Commerce Act, Part II or the Motor Carrier Act of 1935, makes it perfectly clear that the Congress was adopting the scheme of the Federal Power Act, enacted in the same time and the Natural Gas Act, enacted three years later in 1938, which calls for the filing of rates and limits the rate regulatory authority of the Commission to the fixing of rates for the future on the assumption as Justice Frankfurter pointed out in the Montana case that if rates filed initially by the carrier in the exercise of his discretion turn are found to be unreasonable or are unreasonable, they will be quickly corrected by the proscription of new rates for the future.

    I’d like to reserve what’s time we have.

    Earl Warren:

    Mr. Benson.

    W. D. Benson, Jr.:

    Mr. Chief Justice and Associate Justices, in the beginning let me say that our position with counsel for Davidson Transfer & Storage is identical.

    The facts are slightly different in the T. I. M. E. case with the Davidson case.

    The T. I. M. E. case arose out of some shipments from Oklahoma City Tinker Air Force Base near in Oklahoma City, Oklahoma, to another air force base at Planehaven, California.

    The tariff which prescribed rates for that movement was the Rocky Mountain Motor Freight Tariff.

    And it named the rate from Planehaven or from Tinker Air Force Base, Oklahoma to Planehaven, California, at so many cents per hundred.

    T. I. M. E. was a party to another tariff.

    W. D. Benson, Jr.:

    And maybe, I should explain to the Court, perhaps the Court knows more about the way these tariffs are made up than I do.

    But in the early growth of the trucking industry, almost all carriers were small localized carriers.

    And when it became necessary under the Motor Carrier Act for them to file tariffs, they joined together and formed these local associations.

    It happens that my client now, operates from Los Angeles, California to Atlanta, Georgia and Cincinnati, Ohio.

    In order to comply with all of those different local situations, it is now the member of 28 different tariff bureaus.

    Among the other tariff bureaus that it was a member of, it was a member of the Southwestern Motor Freight Bureau, which names rates generally between Texas, Oklahoma, Arkansas and Louisiana, El Paso, Texas and some small part of Colorado.

    It was also the member of another tariff bureau which is the Interstate Tariff Bureau which names right between California on the one hand, El Paso, Texas and certain other territories.

    The Government’s position in this case is not that this rate is too high because it calls for too much money, but the Government’s contention is that this rate is too high because there is a rate from Tinker Air Force Base to El Paso, plus another rate on another tariff from El Paso, Texas to Planehaven, California.

    And that the sum total of those two rates is less than this through rate named in the Rocky Mountain Tariff.

    The position of the court below was that first, that they were entitled to the aggregate of intermediates.

    And secondly, if the through rate was the applicable rate, then because it had exceeded the aggregate of intermediates that it was too high and unreasonable.

    William J. Brennan, Jr.:

    I’m just curious.

    Is there some explanation why the through rate should be higher than the aggregate of the intermediate?

    W. D. Benson, Jr.:

    Judge, I have none except the southwest territory generally has depressed rates.

    El Paso, Texas is a gateway to Mexico.

    And freight has predominantly moved from the West through El Paso.

    So carriers going into El Paso needed tonnage.

    Carriers going from El Paso to California needed tonnage.

    And that is the only explanation that I know, I’ve seen no factual figures on it.

    But any event, they asked the court then to hold this judgment in abeyance, in other words, the local — the District Judge have said.

    Well, there is only one tariff, it’s the Rocky Mountain Tariff and I must apply.

    So then the Government said, “Well, if the Court please, will you hold this in abeyance now, that want to file a complaint with the Interstate Commerce Commission which is not provided for by law at all.

    And we want to ascertain whether or not this rate is reasonable or unreasonable.”

    The District Court refused that idea and went to the Fifth Circuit and of course, the court below, following Western Pacific said that the case should be referred through the Interstate Commerce Commission for their decisions.

    Now, the point I should like to make to this Court, if I may.

    This case involves reparations.

    Whether the Government — in the T. I. M. E. case, they — they’d simply paid the aggregate of intermediates and never get paid the through rate at all, and thus, to suit against the Government for the difference.

    And that is what the lawsuit is about.

    But the point I’d like to make to this Court is that this is a suit for reparation.

    And what the Government is asking this Court to do is to say to a hundred thousand shippers that views our freight limits.

    W. D. Benson, Jr.:

    That in spite of the fact that you follow the administrative procedure and filed your tariff as prescribed below and in spite of the fact that there hasn’t been any complaint filed, and in spite of the fact that the Commission itself has done nothing about it, that even after you have followed the administrative process that you as a shipper may ship within the period of limitations, accepting this — the — the existing rate, the applicable rate and then somewhere down the line, if you decide that that rate is too high, that you refuse to pay and then you require the carrier to sue you.

    And then when the carriers sued upon the only rate that exists on earth, the shippers says your rate is too high.

    And while we want this question adjudicated by the Interstate Commerce Commission because it involves money, well, it’s simply a straight-out proposition for reparations.

    There’s no dispute here that the combination tariff, or is the applicable tariff.

    W. D. Benson, Jr.:

    That would not appeal from that, Your Honor, and there could be no dispute about it.

    In other words, the Southwestern Tariff didn’t mainly reach beyond El Paso.

    The Interstate Freight Tariff didn’t name any rates eastward of El Paso.

    So the only tariff in existence is the Rocky Mountain Freight Bureau Tariff.

    And we say to this Court that if shippers can ignore the applicable rate and ignore the administrative process provided for by Congress and still get an adjudication upon the question of unreasonableness of rate, and number one, that is bad law.

    Charles E. Whittaker:

    I’ve been (Inaudible) I thought that what the Government did, was to pay the lesser amount, if we do under the combination rate and you claim they should’ve paid the through rate.

    W. D. Benson, Jr.:

    That’s correct, sir.

    And that’s the suit.

    In other words, T. I. M. E. sued the Government for the difference, between the — the intermediate rates and the applicable rates.

    Charles E. Whittaker:

    You would say only one rate is possible, you deny that the combination rate wouldn’t have been applicable, is that —

    W. D. Benson, Jr.:

    No, I don’t — I don’t deny that, Your Honor.

    But the — in other words, it — I — it is our position that there must be a tariff in existence.

    And that you can’t do it by appeasing.

    And all the — the Southwestern Motor Freight Bureau Tariffs doesn’t name a rate between Oklahoma City and Planehaven.

    Charles E. Whittaker:

    That’s the through rate, is it?

    W. D. Benson, Jr.:

    No, that’s the local rate.

    The interstate tariff does not name a rate between Planehaven, California and Oklahoma.

    There is no tariff with names rates between those two points except the Rocky Mountain Motor Freight Bureau Tariff.

    And that’s what brought on, of course, the lawsuit.

    Hugo L. Black:

    How did the Government figure its tariff, then you say it’s paid — paid you a combination of two local tariffs?

    W. D. Benson, Jr.:

    Well, it takes Southwestern Tariff which does not name the rates toward a local intermediate point.

    Hugo L. Black:

    It does not name?

    W. D. Benson, Jr.:

    Doesn’t name any through rates.

    No.

    Hugo L. Black:

    But does it name a —

    W. D. Benson, Jr.:

    A known —

    Hugo L. Black:

    (Voice Overlap) —

    W. D. Benson, Jr.:

    — names of rate.

    Yes, sir, at no —

    Hugo L. Black:

    Rate, from what point to what point?

    W. D. Benson, Jr.:

    From Planehaven, California to El Paso Texas.

    Hugo L. Black:

    And then from the El Paso to what else?

    W. D. Benson, Jr.:

    The Interstate Motor Freight Bureau Tariff named the rate from El Paso Texas to Planehaven, California.

    Hugo L. Black:

    Yes and you had another one, so combine them, what was that?

    W. D. Benson, Jr.:

    Then, there is the third tariff which is the Transcontinental Tariff which named through rates —

    Hugo L. Black:

    I’m not talking about this.

    I want to know what are the two local —

    W. D. Benson, Jr.:

    Southwestern Motor Freight Bureau Tariff —

    Hugo L. Black:

    From what point to what point and what point to what point.

    W. D. Benson, Jr.:

    From Planehaven, California to El Paso, Texas.

    Hugo L. Black:

    And from there, where?

    W. D. Benson, Jr.:

    Then — well, the Southwestern Motor Freight Bureau —

    Hugo L. Black:

    (Voice Overlap) is there another rate from that point?

    W. D. Benson, Jr.:

    The Interstate Motor Freight Tariff names a rate from El Paso to Planehaven, California.

    Hugo L. Black:

    So we have a good sense (Inaudible)

    W. D. Benson, Jr.:

    Well, the difference was approximately $6.70 or 80 cents and $10 and something.

    Hugo L. Black:

    And so just please tell me how the Government figured that on what two rates it insisted it had a right to join.

    W. D. Benson, Jr.:

    It took the weight out of the Southwestern Motor Freight Tariff.

    Hugo L. Black:

    From what point to what point?

    W. D. Benson, Jr.:

    From Planehaven or from Tinker Field, Oklahoma to El Paso, Texas.

    Hugo L. Black:

    And then what other rates?

    W. D. Benson, Jr.:

    Then it got another rate out of another tariff from El Paso, Texas to Planehaven, California.

    Hugo L. Black:

    Well, where there such tariff published for those local — those two points.

    W. D. Benson, Jr.:

    Yes, sir.

    Hugo L. Black:

    And it claims that it has a right to tell you those, now, just in combination?

    If you tell the —

    W. D. Benson, Jr.:

    That’s right.

    Hugo L. Black:

    — was any agreement with the Government in advance about what rate it prefers?

    W. D. Benson, Jr.:

    No, sir.

    That was prior to the time of the use of the Section 22 quotations and the Government at that time was simply paying the prescribed rates.

    Hugo L. Black:

    And when it went to pay, it insisted that since was the law and if you combine the two, it had a right to do it.

    W. D. Benson, Jr.:

    That’s correct, sir.

    Hugo L. Black:

    And you say that it didn’t?

    W. D. Benson, Jr.:

    I say it didn’t.

    Hugo L. Black:

    But in your controversy because you say it was bound by that through rate and couldn’t take advantage of the two joint rates?

    W. D. Benson, Jr.:

    Yes, sir, because that was the only rate in existence upon which you can make the charge.

    Charles E. Whittaker:

    But why do you think, if there were two rates upon (Inaudible) and El Paso or 5o cents a hundred?

    W. D. Benson, Jr.:

    Yes, sir.

    Charles E. Whittaker:

    I once in El Paso to think of California of 40 cents, that be 90 cents a hundred.

    Now, if there were through rate of a dollar a hundred, couldn’t the shipper make an election?

    W. D. Benson, Jr.:

    No, sir.

    Felix Frankfurter:

    Well doesn’t that all depend on how the — the goods were shipped.

    W. D. Benson, Jr.:

    Well, in theory —

    Felix Frankfurter:

    (Voice Overlap) if the shipper may have an election, couldn’t he have an election, if in fact, there were two local rates and — and a joint rate, the shipper could certainty elect to send it from point A to point B and there from point B to point C, couldn’t he?

    W. D. Benson, Jr.:

    In theory, yes, sir.

    Felix Frankfurter:

    Well, why not in practice?

    W. D. Benson, Jr.:

    Because there is of not any rate named between Plainhaven, California and Oklahoma City except the one Rocky Mountain Tariff.

    Felix Frankfurter:

    Well that — so that — that the — the consignment slips, or whatever they are, only centered from A to B and from there that my agent will give instructions what to do when you get to B.

    And the agents there extended on to C.

    W. D. Benson, Jr.:

    Well, in theory that — that could be done.

    This Court said it couldn’t be done.

    I believe in the — the Settle case in which a shipper was trying to use an interstate tariff to a certain point and then (Inaudible) on an intrastate tariff to another.

    Felix Frankfurter:

    Well, that’s the thing.

    That’s because the (Inaudible) it couldn’t thereby avoid the applicability of a — you couldn’t avoid the fact that that was one (Inaudible) shipment.

    Is that true?

    W. D. Benson, Jr.:

    I think — I think so, sir.

    Felix Frankfurter:

    (Inaudible)

    W. D. Benson, Jr.:

    I think so, sir, but —

    Felix Frankfurter:

    — you couldn’t — couldn’t — you couldn’t get from under the Interstate Commerce Act by breaking it up and saying it’s intrastate commerce.

    But that isn’t this problem.

    W. D. Benson, Jr.:

    No, sir.

    Well actually, if the Court please, the — the applicability of the rates.

    I mean there’s no dispute with us on the Government, I mean they — the issue is whether or not, the applicable rates which were decided by the Court, which isn’t under appeal here, was settled —

    Felix Frankfurter:

    All right.

    W. D. Benson, Jr.:

    — in the court below.

    Felix Frankfurter:

    Well I’ve got your answer.

    If you say the question no from here, then it’s settled by the record and by agreement that that was the applicable rate, the question is what you could recover.

    I can understand that, but I have a little difficulty in saying that if in fact there are two combination locals, which on the peculiar circumstances, the law within a joint rate, the shipper can’t take advantage of those combination locals.

    Is the shipping documents in this case showed they were billed, that they were to be shipped for the — through total through rate?

    W. D. Benson, Jr.:

    Yes, sir.

    They did.

    W. D. Benson, Jr.:

    Well actually, the way they’re done, Your Honor, they are shipped on a government bill of lading.

    That government bill of lading is given to the originating care which in this particular case happened to be Lee Way Motor Freight Lines.

    They brought it to Oklahoma City and gave it to T. I. M. E., T. I. M. E. transport it from Oklahoma City to Los Angeles and gave it to a connecting carrier in Los Angeles who carried it up to Planehaven, California.

    Because T. I. M. E. was the long haul carrier, well, the bill of lading was accomplished in behalf of T. I. M. E., so T. I. M. E. then bill the Government.

    They put the figures on the Bill of Lading.

    They bill the Government for the through applicable rate.

    Your — your share —

    W. D. Benson, Jr.:

    All of it.

    All of it.

    W. D. Benson, Jr.:

    All of it.

    Hugo L. Black:

    When do they bill it?

    W. D. Benson, Jr.:

    Immediately after the transportation was performed.

    Hugo L. Black:

    After it was finished?

    W. D. Benson, Jr.:

    Yes, sir.

    And then the Government on order to the bill and sent T. I. M. E. a check for was the aggregate of the intermediates and that’s how the laws had arose, but getting back to our proposition, it seems reasonable to us, if the Court please, that an act passed by Congress spelling out the authority of the Commission, spelling out the way rates shall be set, how they may be changed if they are in error, we submit to this Court that that is the administrative process, and that is the process that all shippers must go through in order to comply with the administrative procedure and reach the end of the Act which Congress had in mind.

    W. D. Benson, Jr.:

    And that any other improvised manner whereby a shipper can set a rate, well as an example, if 10,000 of our shippers tomorrow decided that our rates were too high, under the referral procedure suggested here by the Government, we’d be through — we couldn’t even defend them and we are (Inaudible) for such a thing can take place, if this Court says to a shipper that you — you can disregard this rate that’s published.

    Hugo L. Black:

    Do other shippers use the same practice as the Government and that is that they don’t find out what the carrier is charging under the goods delivered?

    W. D. Benson, Jr.:

    No, sir.

    No, the commercial bill of lading is made up and signed at the shipper’s dock.

    Then it is taken to the office as it took —

    Hugo L. Black:

    Knowing what the charge is.

    W. D. Benson, Jr.:

    No, it’s taken to the office and then rated and then the shipper gets a copy of the bill of lading which shows the rate.

    Hugo L. Black:

    Shows the rate before it goes.

    W. D. Benson, Jr.:

    That’s right, sir.

    Hugo L. Black:

    But the Government doesn’t do that.

    W. D. Benson, Jr.:

    No, sir.

    Hugo L. Black:

    That’s the difference between the two methods of shipment?

    W. D. Benson, Jr.:

    That’s correct, sir.

    But the principle is the same at —

    Hugo L. Black:

    It was granted from an evil practice that’s different.

    W. D. Benson, Jr.:

    That’s correct, sir.

    But that there is only one way to fix the rates in the United States and that’s the method prescribed by Congress.

    When we do that, we have no trouble.

    And if we try to do it any other way, I think it’ll bring on and be out of condition.

    Hugo L. Black:

    If you would have violated the Act by charging these two combination rates instead of the other?

    W. D. Benson, Jr.:

    Yes, sir.

    Yes sir.

    Hugo L. Black:

    That’s the position you have to say.

    W. D. Benson, Jr.:

    That’s my — well that’s — that’s actually my position.

    Hugo L. Black:

    You have to take it — you have to take in your —

    W. D. Benson, Jr.:

    That’s actually my position that if it were a private shipper, that I would immediately have been compelled to suing unless he paid for them in seven days.

    Hugo L. Black:

    Does the record show whether the private shipper has been taken in high rates?

    W. D. Benson, Jr.:

    Well all of them but one, Your Honor.

    It’s — it’s [Laughs] not in the record, but all of them but one.

    Felix Frankfurter:

    Tell me — tell me this.

    Felix Frankfurter:

    Is it — it is clear in the matter of law so that they can’t dispute — dispute that it would be the joint rate that would govern and not the combination of the local or is it —

    W. D. Benson, Jr.:

    I think it —

    Felix Frankfurter:

    — or is it one of these questions as to which one would have to get the judgement of the I.C.C.?

    W. D. Benson, Jr.:

    No, I — I think the law was quite clear, Your Honor.

    I don’t really convene your dispute on that.

    Felix Frankfurter:

    And does the Government would hear from the Government.

    W. D. Benson, Jr.:

    Pardon.

    Felix Frankfurter:

    If the Government admits that this was, as a matter of construction, the shipment under the joint carrier.

    W. D. Benson, Jr.:

    Yes, sir.

    And they — the Court found that the through rate was applicable and they, of course, didn’t appeal from that.

    I don’t think there is any question on that.

    Felix Frankfurter:

    I don’t think the settled case was settled.

    W. D. Benson, Jr.:

    No, sir, but it — it demonstrates you can’t (Inaudible) rights.

    Potter Stewart:

    The Court of Appeals, as I — as I read their opinion, pretty well accepted that this was the applicable tariff, but also, didn’t they make clear that the law was quite well settled that — that when a through tariff does exceed the sum of two intermediate tariffs, it’s — it’s almost automatically been held to be unreasonable.

    W. D. Benson, Jr.:

    Well I believe the words, Your Honor, is —

    Potter Stewart:

    I’m not — I’m not referring to —

    W. D. Benson, Jr.:

    — that the prima facie to be unreasonable.

    Potter Stewart:

    Apart, yes.

    Felix Frankfurter:

    And that — that can be the Act itself, it says —

    W. D. Benson, Jr.:

    No, there is a tariff —

    Felix Frankfurter:

    (Inaudible)

    W. D. Benson, Jr.:

    No, there is a —

    Felix Frankfurter:

    About the long and short haul.

    That’s a different proposition.

    W. D. Benson, Jr.:

    That’s in Part I on the Rail Act and the I.C.C. has what they call the Tariffs Circular, which says exactly the opposite, “That regardless of the intermediate rates that the through rates shall be applicable.”

    Potter Stewart:

    That’s in Part I.

    W. D. Benson, Jr.:

    In Part II, the Interstate Commerce Commission has issued a tariff which says that the through rate shall apply, a Tariff Circular.

    Yes, sir.

    Felix Frankfurter:

    And this is — I think Justice Harlan asked whether the shipping articles are in here.

    Was this — were these goods destined from the point of — from the point of argue to the ultimate point of destination, is that the way that they ship?

    W. D. Benson, Jr.:

    Yes, sir.

    Felix Frankfurter:

    Well, I think, if the thing is open for argument here, you would say that is a clear indication that it should be a through shipment, and if it is a through shipment then the joint (Inaudible) both.

    W. D. Benson, Jr.:

    Well that’s one good argument, Judge.

    Well I think there’s a better one because there’s just one rate prescribed.

    In other words, the Commission regulates these rates and they say what rates apply and whether they are filed or approved.

    Felix Frankfurter:

    You may go to — I can go to a document and find out what the Commission said that if you send these goods from whatever, the California point to the Oklahoma point was that that’s the rate that should apply?

    W. D. Benson, Jr.:

    Yes, sir, because —

    Felix Frankfurter:

    There is such a document?

    What is the document?

    W. D. Benson, Jr.:

    Well it’s the tariff.

    Felix Frankfurter:

    The tariff.

    W. D. Benson, Jr.:

    The tariff says that the rate between Tinker Field and plain — Planehaven, California is so many cents per a hundred.

    Felix Frankfurter:

    Well, I know that’s what the tariff said, but does that settle the question that if there are two — if there’s an intermediate point to which shipments may be made, that the shipment may break up the shipment into two parts, into two legs.

    Does the tariff tell me that that he can’t do that?

    W. D. Benson, Jr.:

    Well, you — you could do that, Your Honor, if you wanted to make a shipment from Tinker Field to El Paso —

    Felix Frankfurter:

    Yes.

    W. D. Benson, Jr.:

    (Inaudible) and you want to make another shipment of the same piece of merchandise from El Paso to Planehaven, California over another one.

    There are two tariffs that provide both.

    Felix Frankfurter:

    But not over the same tariff?

    W. D. Benson, Jr.:

    But not only — not over the same route and over — through the movement.

    Felix Frankfurter:

    (Voice Overlap) have indicated by the two — by the point of origin and the point of destination.

    W. D. Benson, Jr.:

    Yes, sir.

    William O. Douglas:

    Is that —

    Felix Frankfurter:

    All right.

    William O. Douglas:

    Is that the provision of (Inaudible) page 11 on the record, the one that you’re referring to, that page 11?

    W. D. Benson, Jr.:

    Yes.

    That is the official rule with the Interstate Commerce Commission.

    Thank you, Mr. Chief Justice.

    Earl Warren:

    Mr. Hollander.

    Morton Hollander:

    May it please the Court.

    Morton Hollander:

    I wouldn’t — the outset — I tried to straighten out this question of, through rate versus the aggregate of intermediate rates.

    Mr. Benson is absolutely correct in suggesting that the so-called applicable rate in this controversy is the through rate, even though it exceeds by almost 100%, the combination of intermediate rates.

    This is, by virtue, of an I.C.C. regulation which Mr. Justice Douglas adverted to as appearing at the top of page 11 of the record.

    That doesn’t mean, however — and this is — this is the — I think a very important distinction to — to bear in mind simply because a rate is called, applicable in I.C.C. parlance, it doesn’t necessarily follow that that’s the reasonable rate or the just rate or the one which is allowed by law.

    In fact, the I.C.C. in a consistent series of decisions dating back to the very enactment of the Motor Carriers Act, Part II of the Interstate Commerce Act with which we are here concerned, has always held — has always held that wherever a shipper can show that an aggregate of intermediates is less than the through rate, the through rate is prima facie unreasonable.

    And of course, that’s the question we want to get over to the Commission in this case.

    We want to give the carrier an opportunity in this case to rebut that prima facie unreasonableness.

    Felix Frankfurter:

    Let me — let me straighten out your mind, but I think you’ve one is in danger of confronting two things.

    You do not deny that the joint rate is the relevant, the applicable rate.

    Morton Hollander:

    We do not, Your Honor.

    Felix Frankfurter:

    Reasonable rate.

    What you say that it may be challenged as not being — although the legal rate, it may be invalidated that it’s being an unreasonable rate.

    Morton Hollander:

    Yes, Your Honor.

    That’s it, precisely.

    Felix Frankfurter:

    But you do not say as the matter of law in this case, the two combined local rates govern.

    Morton Hollander:

    No, we do not, Your Honor.

    We suggest —

    Felix Frankfurter:

    Well that’s — well that’s a very different thing, aren’t they?

    Morton Hollander:

    I think so, Your Honor.

    We’re — we simply suggest that we are —

    Felix Frankfurter:

    You may challenge the reasonableness of the through joint rate.

    That’s your position, all right.

    Morton Hollander:

    That’s all we asked for.

    Felix Frankfurter:

    All right.

    Morton Hollander:

    That’s all we asked for in the court below.

    And that’s — and that’s all the court below gave us, and that’s the only reason we’re here defending this lawsuit.

    Now, we want the same permission accorded by this Court, namely, to have the opportunity to challenge the through rate, in this case, on the ground that it’s unreasonable.

    It seems to me that in both cases —

    Felix Frankfurter:

    Although — although you paid, although the original exaction was on the joint rate was good a then the local rate indeed, is that right?

    Morton Hollander:

    In this particular case, although the record is ambiguous, the original payment in T. I. M. E. was based on the lower rate.

    Morton Hollander:

    That is the combination of the intermediates which comes up to about $6 per a hundredweight as opposed to the $10 per hundredweight, prescribed by the through rate.

    And time as suing goes here, for the difference, in effect between, a $6 and $10, but it —

    The issue is the same.

    Morton Hollander:

    The issue is precisely the same, Your Honor.

    William J. Brennan, Jr.:

    Why didn’t pick out (Inaudible) to the intermediate.

    If I understand you could.

    Morton Hollander:

    Why — why does the Government take out the aggregate of the intermediates?

    Because it’s the Government’s position which has not as yet been sustained by the Interstate Commerce Commission, but we think we will be able to sustain our position before the Commission, if allowed to go there, that the true rate is unreasonable in the situation of this sort to the extent that it exceeds the combination of the intermediates.

    Does your — does your position broadly is this, that it — in any case, where you got an admitted tariff and the Government come in — can come in and show even though it admits the application of that tariff is correctly applied, if it can show that the tariff was unreasonably high that you can — you can recover?

    Morton Hollander:

    Yes, Your Honor.

    Not that we can recover, —

    (Voice Overlap) understand —

    Morton Hollander:

    — but at least that I — I think that points up what is really and necessarily petitioners — both petitioners’ underlying assumption in this case.

    They necessarily contend that our federal District Court at the behest of a carrier like T. I. M. E. or Davidson, must — they — they contend that the District Court must enforce the exaction from any shipper of any filed rate irrespective of how wild that file rate is.

    Irrespective of how unjust it is, irrespective of how unreasonable it is and irrespective of the extent to which it is specifically condemned by Congress in the Motor Carriers Act as being unlawful and prohibited.

    That is necessarily, I say, their underlying assumption in this case.

    William J. Brennan, Jr.:

    Why is it that you got that far?

    Morton Hollander:

    Because otherwise, they would have to — I’m sorry.

    William J. Brennan, Jr.:

    (Inaudible) the filed rates.

    Morton Hollander:

    Yes, Your Honor.

    William J. Brennan, Jr.:

    And wasn’t there a period after the filing within which it might have been — pleadings might have been interested to have it suspended?

    Morton Hollander:

    To the extent that it was possible, administratively for us, to file a protest, we did.

    And this — this actually is highlighted by the first of the 2 cases argued here today.

    In the Davidson case, the carrier did impose a surcharge, filed a surcharge rate.

    We thought it was unreasonable.

    Within 7 days, after the surcharge was filed, we protested and as Mr. Reyes pointed out, the Interstate Commerce Commission at that point, placed our complaint and not about the shippers on their investigation and suspension docket.

    We did follow and we did exhort —

    William J. Brennan, Jr.:

    (Voice Overlap) affect and suspended the surcharge?

    Morton Hollander:

    It had the effect of suspending it for a period of 7 months.

    William J. Brennan, Jr.:

    Yes, which is the (Inaudible)

    Morton Hollander:

    Yes, Your Honor.

    Now, the termination of that seven-month period, May of 1952, the suspension was lifted, the surcharge —

    William J. Brennan, Jr.:

    (Voice Overlap) because the proceeding I gather the determined reasonableness has not been completed.

    Morton Hollander:

    Yes, Your Honor.

    William J. Brennan, Jr.:

    And that’s because —

    Morton Hollander:

    This was in accord with the statutory mandate limiting the suspension period —

    William J. Brennan, Jr.:

    And that how long, after the end of the suspension period, was it according to tariff?

    Morton Hollander:

    In this — in this particular case, it was from May 1952 when the suspension was ended until October of 1953 that the Interstate Commerce Commission finally invalidated and set aside as unjust, unreasonable, and contrary to the Interstate Commerce Act this particular (Voice Overlap) —

    William J. Brennan, Jr.:

    Oh, I — that’s because the pressure of business or whatever maybe the reason, it’s not possible will determine these things within the seven-month suspension period, isn’t it?

    Morton Hollander:

    Well, I’m confident that it was not in this case possible to do that.

    The T. I. M. E., like I’m sure in other cases, may not be quite as great and still others it maybe considerably more maybe as much as four or five years.

    William J. Brennan, Jr.:

    How long is this —

    Morton Hollander:

    Our basic —

    William J. Brennan, Jr.:

    — how long is this seven-month suspension period in effect since the Act is —

    Morton Hollander:

    I think so, Your Honor.

    I think it came into existence with the Motor Carrier Act of — of 1935.

    It may have initially been five months and extended to seven —

    William J. Brennan, Jr.:

    And I suppose initially, perhaps was possible for the Commission to determine these things within that period.

    Morton Hollander:

    I — I think, Your Honor, that it probably still is and the number of instances possible for the Commission to make such a determination prior to the elapse of the suspension period, the important question I think before this Court in the Davidson case however, is whether or not during the period of time between the suspension — between the lifting of the suspension, that is May 1952 and the effective date of the Commission’s order invalidating the surcharge about a year and a quarter later, is unjust and unreasonable, the question before this Court is whether or not, similar surcharge is collected by the carrier during that period of time maybe retained by the carrier even though we’re ready to go to the Commission and show that the very reasons which motivated the Commission to find the rate unjust and unreasonable in October 1953 applied with full force to the period preceding that invalidation.

    William J. Brennan, Jr.:

    May I ask you one — one other thing.

    In the T. I. M. E. case, I gather no shipper initiated a proceeding which would — which brought about the suspension of that rate, of the through rate?

    Morton Hollander:

    No, Your Honor.

    I — I really don’t know in the situation of that sort, whether or not, it’s — it’s really feasible.

    In the — in the T. I. M. E. situation, the Government does not —

    William J. Brennan, Jr.:

    Whether or not feasible — where that, I gather, that proceeding was available, was it not?

    Morton Hollander:

    Yes, Your Honor.

    I assume it always has been, but the time situation raises a different problem in this sense that a rate — a filed rate, unlike the through rate filed by T. I. M. E., maybe fully effective and perhaps even lawful and reasonable in certain situations.

    However, in its application, it may turn out to be unreasonable as —

    William J. Brennan, Jr.:

    That’s gone to the existence of the latter part (Voice Overlap) —

    Morton Hollander:

    — of the — Yes, Your Honor.

    Morton Hollander:

    And that — that’s really our position here.

    And, of course, there would’ve been no reason for the Government to come in at the time, T. I. M. E. initially filed a joint rate and protest that joint rate on the grounds of unreasonableness when the particular problem, with respect to the unreasonableness of application of the joint rate, did not materialize or perhaps until three to four years later.

    So —

    Felix Frankfurter:

    Mr. Hollander, may I ask you a question if you — I think if the Government is in no different position on this aspect, on this — in this kind of a situation, take Davidson and I’m going to talk about Davidson, then a private shipper would have been, is it —

    Morton Hollander:

    We — that’s right, Your Honor.

    We are willing to assume here that our rights are no greater than that of a private shipper.

    Felix Frankfurter:

    (Voice Overlap) this of a private shipper.

    He would have to pay the rate at the time of shipment, is that right?

    Morton Hollander:

    Yes, Your Honor.

    Felix Frankfurter:

    So that from the time the shipments began, during the period of the lifting or the suspension, the private shipper would not have had to be subjected of her charge or whatever it was, $4, whatever it was.

    Morton Hollander:

    Prior to the lifting of the suspension.

    Felix Frankfurter:

    Prior to the lifting.

    Morton Hollander:

    Yes, Your Honor.

    Felix Frankfurter:

    Now, after the lifting, the position of the private shipper would be that he would have to pay the filed tariff.

    He would pay it under protest and he would begin reparation proceedings, would he not?

    Morton Hollander:

    Yes, Your Honor.

    As a matter of fact, that closely analogizes in Davidson and it closely analogizes the Government’s —

    Felix Frankfurter:

    Don’t — don’t get over to Davidson.

    That’s more complicated.

    Morton Hollander:

    Well, I’m sorry.

    I thought you were speaking about the Davidson thing.

    Felix Frankfurter:

    I beg your pardon.

    I wasn’t even talking about Davidson, yes.

    Morton Hollander:

    Well, I — I am suggesting that.

    Well, that’s precisely what happened in Davidson.

    We did pay the higher rate.

    We did not in time, but we did.

    In Davidson, we did pay the higher rate just like the private shipper.

    Felix Frankfurter:

    Just like a private shipper.

    After the surcharge was — after the suspension was lifted, the private shipper would ship and he would have to pay at the time of shipment, would he not?

    Morton Hollander:

    Yes, Your Honor.

    Felix Frankfurter:

    He would protest the rate is unreasonable and he would begin reparation proceedings before the Commission, challenging the reasonableness of the rate.

    Is that right?

    Morton Hollander:

    Yes, Your Honor.

    Felix Frankfurter:

    And that old reparation proceedings, well, would he — during the period that the rate was not found to be unreasonable could he get reparations retrospectively?

    Morton Hollander:

    That, of course, is — is our position that he —

    Felix Frankfurter:

    Well can (Voice Overlap) —

    Morton Hollander:

    He could not get it.

    He —

    Felix Frankfurter:

    He could not get it.

    Morton Hollander:

    We — no.

    We — we do not argue that he could get it before the Commission.

    We do argue that the path is clear for him to get it in Court just as we think the path is cleared to the Government to get it in Court.

    Felix Frankfurter:

    He couldn’t get it before the Commission.

    He could not get reparations for the Commission.

    Morton Hollander:

    The Interstate Commerce Commission has taken the position that it lacks authority in a motor carrier case to award monetary reparations.

    Felix Frankfurter:

    Why don’t we smack up against Montana then.

    Morton Hollander:

    Well, I would like — and I would like to address myself to Montana, but before I do, I would like to take just a few minutes of the Court’s time to review.

    I think the two principles which to my mind are — are the guiding principles in a litigation of this sort and which again to my mind, point with sureness to the conclusion that both courts below, the Court of Appeals for the Fifth Circuit and the Court of Appeals for the District of Columbia Circuit, properly referred our reasonableness defense or ordered the District Court to refer the reasonableness defense Interstate Commerce Commission.

    The first —

    Felix Frankfurter:

    Although concededly, proceedings before the Interstate Commerce Commission for that period — for the period in question, independently would be — were beyond the power of the Commission.

    Morton Hollander:

    Proceedings we are ready to concede before this Court at this time the correctness of the Interstate Commerce Commission’s — I — I should say view settled since 1939, when they first had occasions to consider it, that is that the Interstate Commerce Commission takes the position that in the Motor Carrier case, the Interstate Commerce Commission disclaims that it has power to award monetary reparations to a shipper.

    It — it takes that position — this — this Court hasn’t passed on their question.

    To my knowledge, no court has passed on that question, but that is the view of the Interstate Commerce Commission and we’re ready to accept it for the purposes —

    Felix Frankfurter:

    Do you think they might — do you object to my mode of statement?

    Morton Hollander:

    But —

    Felix Frankfurter:

    That is an originating proceeding could not be brought before the Commission for the recovery of the excess on the basis of the rates as charge was unreasonable.

    As rate is filed and therefore charged.

    Morton Hollander:

    That —

    Felix Frankfurter:

    (Voice Overlap) that —

    Morton Hollander:

    That statement, Your Honor, accurately represents the Interstate Commerce —

    Felix Frankfurter:

    All right.

    Morton Hollander:

    — Commission’s view, there’s no question.

    Felix Frankfurter:

    Do not challenge —

    Morton Hollander:

    Which we are not challenging in this case —

    Felix Frankfurter:

    All right.

    Morton Hollander:

    That’s right.

    However, I should like to point out, Your Honor, that the Interstate Commerce Commission at the same time that it had been disclaiming jurisdiction to award monetary reparations in favor of a shipper who claims that unreasonable charges have been exacted from him by the motor carrier, at the same time the Interstate Commerce Commission and this again is their settled view for over 20 years, the Interstate Commerce Commission has steadfastly adhered to the proposition that if such a shipper goes into court and files his action for reparations in court and the court stays the action so filed, in order to afford the Interstate Commerce Commission an opportunity to pass on the question of whether or not the rate so charged were in fact unreasonable, the Commission as I say has consistently ruled that it will on reference of such a case from a court make the determination in aid of the court and pass on the question as to whether or not, there was any unreasonable — any unreasonable exaction involved.

    So as a practical matter, even though the Commission disclaims jurisdiction itself to award monetary reparations, it paves the way for the court to make such an award.

    William J. Brennan, Jr.:

    Something like the Bell Potato Chip.

    Morton Hollander:

    Yes, Your Honor the Bell Potato Chip, its predecessor decision stating back to 1939 and the recent Davidson case, another Davidson case before the Interstate Commerce Commission, only this year in 302 I.C.C., where in all of these cases, the Commission has stated that it will — it always stands ready — it always stands ready with respect to allegations on the part of a shipper that in the past, unreasonable charges have been exacted from them by a motor carrier.

    It always stands ready to act in aid of a court in which an action for monetary reparations has been filed.

    Now, we —

    Hugo L. Black:

    You mean its view is that Congress denied its power to try those reparation cases, bears on the reasonableness, but left it to the courts —

    Morton Hollander:

    No, its —

    Hugo L. Black:

    — the remedy they had to the courts?

    Morton Hollander:

    Its view is that Congress — its view is that Congress denied it the power to make monetary reparations award, but it definitely is not its view —

    Hugo L. Black:

    But acts on the assumption — acts on the assumption that the courts have that power and that it can then place on the (Voice Overlap) —

    Morton Hollander:

    Yes, Your Honor.

    That — that’s not the courts, but that the Commission —

    Hugo L. Black:

    I mean the courts — they have filed the trial suits in courts.

    Morton Hollander:

    Yes, Your Honor.

    And that the Commission can then on referral from the court fully explore the question of allegedly unreasonable rates and make a determination as to whether or not those rates in the past were in fact unreasonable and if it so certifies to the court then, of course, the court is in a position —

    Felix Frankfurter:

    You mean the —

    Morton Hollander:

    — to award monetary damage.

    Felix Frankfurter:

    (Voice Overlap) situations that I have — I haven’t read, I am not familiar with the Bell Potato Chip case.

    Are those situations like the El Dorado case we had here, way back 308 U.S.?

    Morton Hollander:

    Yes, Your Honor.

    I think in —

    Felix Frankfurter:

    (Voice Overlap) where contract question arises as between (Inaudible) I think that was the lessor and lessee of a private car and you can refer some question of a tariff to the Commission?

    Morton Hollander:

    Yes, Your Honor.

    Felix Frankfurter:

    That (Voice Overlap) —

    Morton Hollander:

    It would — it was — it was precisely as a matter of fact if I remember correctly, the Commission in Bell relied heavily on —

    Felix Frankfurter:

    In El Dorado.

    Morton Hollander:

    — on — on El Dorado.

    Felix Frankfurter:

    Well now, what?

    You tell us why El Dorado didn’t govern Montana.

    Morton Hollander:

    In my own view, of course, is that it did but —

    Felix Frankfurter:

    It did.

    Morton Hollander:

    — in my own view is that it should have.

    Felix Frankfurter:

    Oh yes, I thought so too, but five is more than four [Laughter].

    Morton Hollander:

    Well, it is — it is my fond hope that perhaps the Court —

    Felix Frankfurter:

    The Court has overruled it, is that it?

    Morton Hollander:

    — is presently constituted, need not overrule it, but at least —

    William J. Brennan, Jr.:

    Why do you say we need not overrule it?

    How can we distinguish this situation from you’d have prevail how otherwise by our rule on this one.

    Morton Hollander:

    Oh, I think, this Court could if — if it wanted to retain — if it wanted to retain some vestiges of Montana-Dakota —

    William J. Brennan, Jr.:

    (Voice Overlap) one is this Federal Power Commission, the other is I.C.C. and that makes the difference.

    Morton Hollander:

    No, Your Honor.

    Not on the basis of that distinction.

    The — the only quarrel we have with Montana-Dakota, the only quarrel we have with Montana-Dakota — now, there was — there was a lot of common ground between majority in dissent, I think, in Montana-Dakota.

    They came to a parting of the ways — I’m sorry, Your Honor.

    William J. Brennan, Jr.:

    The common ground is against you though, wasn’t it?

    It wasn’t the dissent —

    Morton Hollander:

    No, Your Honor.

    William J. Brennan, Jr.:

    Primarily on the fraudulent application on that allegation.

    Morton Hollander:

    The — I think the only part of Montana-Dakota which is adverse to the Government’s decision here represents that part of Montana-Dakota which the majority and minority came to a parting of the ways.

    That is the minority felt, I think, correctly that this question of reasonableness would certainly, could not passed upon by the Court, should have been referred to the only expert body.

    William J. Brennan, Jr.:

    But it wasn’t.

    Morton Hollander:

    But it wasn’t.

    Morton Hollander:

    The majority felt that it shouldn’t have been.

    William J. Brennan, Jr.:

    That’s a little difference between —

    Morton Hollander:

    That’s the — that’s the only aspect of Montana-Dakota, we would be interested in having overruled here.

    Earl Warren:

    Mr. Hollander, what authority do you — do you rely on to give the Court authority to grant reparations prior to the — to the date of finding by the Commission that the Act is unreasonable, I mean that the rate is unreasonable, after this reference has been made to it, isn’t that —

    Morton Hollander:

    Oh —

    Earl Warren:

    — isn’t it necessary for you to sustain that position?

    Morton Hollander:

    Yes, Your Honor.

    Earl Warren:

    What — what authority —

    Morton Hollander:

    And, of course, it would be necessary for us to sustain that position, if we were here as plaintiffs seeking recovery of allegedly unreasonable charges exacted from us by the Motor Carrier.

    Our position here, I must point at, is a little different.

    It’s exactly the position we were in when we were before this Court in Western Pacific.

    And that — and that is — is this.

    In Western Pacific, just —

    Part I and not Part II.

    Morton Hollander:

    Yes, but in Western Pacific, we were confronted with the situation or even though we were under Part I — even though we were under Part I, we were precluded from going to the Interstate Commerce Commission and asking the Interstate Commerce Commission from reparations.

    William O. Douglas:

    And yet the Court — and the Commission mean in the Bell Potato Chip case were it said that while in effect that its decision on its opinion on reasonableness would be varied advisory opinion, but what — but at a different situation veils for the issue’s applicability of the rate.

    When we find it says that the rates charged by a carrier inapplicable, it had once becomes the duty of the carrier to refund any overcharges and of the shipper to pay any under charges without an order or rather action on our part and without resort to afford.

    Morton Hollander:

    Well I — I —

    William O. Douglas:

    Is there — is there an administrative remedy in case of the issue’s applicability rather than unreasonableness?

    Morton Hollander:

    Not — not, Your Honor, so far as the Motor Carriers are concerned.

    No.

    William O. Douglas:

    This is the Motor Carrier case.

    Morton Hollander:

    There’s the same gap, yes, Your Honor.

    I think what the Commission had in mind there is that once they determine that a certain rate is applicable, it is the so-called legal rate.

    It’s this sacrosanct published filed legal effective rate, you have to pay it or otherwise you’re violating the Interstate Commerce Act.

    Felix Frankfurter:

    Well, don’t — don’t the — don’t suggest the derogatory implication about sacrosanct because the point of our pay filed rate, has a long and deep history of (Inaudible) there are innovation, rebates et cetera, et cetera on the greatest of all evil because in railroad affairs, but you’re sought to be cured by making the fixed rate, the absolutely determining rate.

    Morton Hollander:

    I — I realize that, Your Honor.

    I suppose (Inaudible) to so characterize that however in a case of this sort, where the — a petitioner’s entire argument is one in which he wraps himself around the file, the legal and applicable rate, and blinds himself, not only blinds himself, but insists that all of the courts be blinded to the fact that — that so-called applicable legal effective file published rate is, in fact, unjust.

    It’s excessively unreasonable.

    It’s condemned by the Interstate Commerce Act.

    Felix Frankfurter:

    He wraps himself around in the opinion of this Court.

    Morton Hollander:

    Yes, Your Honor.

    He wraps himself around Montana — the extent that Montana-Dakota relies on this concept of the filed rate being the effective and — and chargeable rate.

    I think in this — in — in this litigation —

    William J. Brennan, Jr.:

    (Voice Overlap) You’re not (Inaudible)

    Morton Hollander:

    I — I am trying to disassociate myself, I can assure you —

    William J. Brennan, Jr.:

    All right, but that’s not throughout (Inaudible)

    Morton Hollander:

    I — I think, in this case, I have paramount consideration which I would like to advert to is the fact that every — every basic preset of jurisprudence every concept of fair-dealing or fairness in litigation will — will allow a shipper from whom a motor carrier seeks to exact a — a charge the shipper claims, is unjust and unreasonable and in contravention of the law.

    I think every — every concept of fairness and litigation will allow the shipper an opportunity to try to — at least, to try to establish his defense.

    Felix Frankfurter:

    Mr. Hollander, it might have been better done having the part of your (Inaudible) but wouldn’t you say that those considerations of fairness and justice — unjust enrichment, all the rest, were at least adverted to dissent which did not find favorable to court.

    Morton Hollander:

    It did not certainly with respect to the part of the case I’m interested in — in Montana-Dakota.

    I think it did — I think it did find —

    Felix Frankfurter:

    And was — and was rejected.

    Morton Hollander:

    It was rejected and yet — and yet just two years ago in the Western Pacific case, I think all of these considerations were really at the nub of that decision.

    Because the Western Pacific case involved precisely the situation I’ve tried to point that is now before the Court, thereto, carriers claimed certain funds from the Government.

    The Government resisted on the ground that the charges the carriers were demanding where excessive and unreasonable.

    The Court of Claims before whom the litigation had been instituted by the rail carriers in that case, threw up its hands, it said, “Well, Government defends on unreasonableness, unreasonableness is a problem we can’t cope with.

    That ever since the Interstate Commerce Act is a problem which necessarily must be adjudicated by the central body, by the great agency having the expertise, by the Interstate Commerce Commission.”

    So the Court of Claims said, “We can’t pass on that problem of unreasonableness.”

    Well, then, we said, “Well if you can’t pass on it, will you please refer the matter over to the Interstate Commerce Commission so that we will be able to have an opportunity over there to establish our defensive unreasonableness.”

    The Court of Claims felt too, that that request had to be denied.

    And the reason for it is precisely the reason.

    The referral was denied in — in Montana-Dakota, by the majority.

    And is precisely the reason that the carriers here insist that referral is improvident, namely, in the Court of Claims, it was ruled that there could be no referral by the Court of Claims of this question of this defensive unreasonableness in Interstate Commerce Commission, because of the fact that the United States Government was precluded from filing an independent reparation proceeding before the Interstate Commerce Commission.

    In that case, the reason that the Government was precluded, the Court said, was because the statute of limitations had run and destroyed the Government’s right to go before the Interstate Commerce Commission in the independent reparation proceeding.

    Well, when this Court took the case, this Court, in reversing the Court of Claims, went to pains to point out that the fact that the Government could not file independent reparation proceeding before the Interstate Commerce Commission was completely immaterial.

    Here, the Government was asking for — of opportunity for adjudication of the defensive unreasonableness, a defense which ever since the passage of the Interstate Commerce Act with respect to rail carriers in 1887 with respect to Motor Carries since 1935, necessarily, must be aired before the Interstate Commerce Commission.

    And this Court directed, in reversing, it directed the Court of Claims to afford us an opportunity to air that defense before the Interstate Commerce Commission.

    I don’t see that that’s really any different, Your Honors, from a situation where a plaintiff and a (Inaudible) comes into court and he says, “Well look, the defendant has been negligent and I want damages.”

    And the court saying, “Well — the defendant saying at that point, “Well, but look, you’ve been contributory negligent.

    Morton Hollander:

    You’re not on top of any recovery under the law.”

    And the plaintiff to put him in a position comparable to the petitioner in this case, a hypothetical situation I’m giving, would say well, the Court has no power to pass on this question of contributory negligence.

    It must enter judgment forthwith in favor of the plaintiff on the basis of the plaintiff’s assertions that defendant was negligent.

    That’s precisely what they’re asking you to do here, Your Honors.

    Therefore —

    William J. Brennan, Jr.:

    What was the (Inaudible)

    Morton Hollander:

    Yes, Your Honor.

    It — it was to a certain extent.

    But not —

    William J. Brennan, Jr.:

    Not like in having (Inaudible)

    Morton Hollander:

    Well, Section 322 is — is involved in this case, yes, Your Honor.

    Petitioners in this case or — or petitioner Davidson, at least, has in its petition for certiorari raised a Section 322 question.

    But the effect of Section 322 —

    William J. Brennan, Jr.:

    (Inaudible)

    Morton Hollander:

    Oh yes, the motor carriers.

    William J. Brennan, Jr.:

    The motor carriers.

    Morton Hollander:

    Yes, but it’s been changed.

    It was — it was changed actually this past summer.

    So that probably in a situation of this sort, we will be exactly occupying the position of a private shipper.

    The General Accounting Office, since August of 1958, has in effect, been stripped of its power to effect a unilateral adjustment or recruitment of a charge with respect to a charge which the General Accounting Office says is excessively unreasonable and unjust.

    The power to effect the deductions is limited under this new statute to those situations where the Government can establish that there was in fact an overcharge that is a charge in excess of the applicable filed legal rate.

    Potter Stewart:

    Mr. Hollander, in answer to Mr. Justice Frankfurter, you told us, as I understand it, that the Commissioner has taken the position, that it is without power to award monetary relief or to entertain a reparation proceeding at least under Part II of the Act.

    Morton Hollander:

    Yes Your Honor.

    Potter Stewart:

    In favor of a shipper who thinks he’s been unreasonably overcharged.

    What — does the Commission take the position that it is without power to honor a retroactive adjustment of the rate?

    What could a shipper do if — if —

    Morton Hollander:

    Well —

    Potter Stewart:

    — he was forced to pay a tariff, a — a charge that he thought was unreasonable and unjustified even though that was voluntary —

    Morton Hollander:

    Well in — in the —

    Potter Stewart:

    What did he do if he went directly to the Commission?

    Morton Hollander:

    Well and — if the Commission outlines the procedure for the shipper to follow in the Bell litigation and as I say it’s — that’s the view the Commissioners has passed ever since — for about 20 years now.

    They tell the shipper this.

    They say, “Well we can’t give you the money for passed exactions of unreasonable rights.

    However, you go to court.

    You file your suit in court.

    Tell the court to hold the action in abeyance.

    Potter Stewart:

    (Voice Overlap) —

    Morton Hollander:

    We’ll consider the question — on referral, we’ll consider the question and then the court will go ahead and which I think is a sensible and —

    Potter Stewart:

    I understood that.

    Well, what if he said I — the reasons of my own, I don’t want to go to court.

    I want you to give me all the relief that you can give me.

    What is their position as to that?

    Morton Hollander:

    I think — I think, the Interstate Commerce Commission would entertain his application and in view of the Interstate Commerce Commission’s self disclaimer of jurisdiction to award money reparations, the Intertsate Commerce Commission will entertain the application, but in the maximum relief he would get, would be in adjudication from the Commission that these past rates are unreasonable.

    And they would then dismiss his complaint.

    And then he would be able, I think, to take advantage of that adjudication of past unreasonableness on the part of — from the Commission and if he wanted to go to Court.

    And I think so —

    Potter Stewart:

    (Voice Overlap) —

    Morton Hollander:

    I think that too is clearly within the contemplation of the — of the Bell line of cases.

    Potter Stewart:

    Of the Bell case (Inaudible)

    Earl Warren:

    (Voice Overlap) we’re again back now to the question that I —

    Morton Hollander:

    Yes, Your Honor.

    Earl Warren:

    — that I asked you.

    You — you told us what the Commission would tell a shipper.

    Now, the Commissioner says you must — you must go to the court and the court will refer back to us and then we’ll determine whether it’s reasonable or unreasonable.

    Now, does it go on and — and then you said, you can go to the court if we find that unreasonable.

    Do they go on beyond that and tell — tell the carrier that he may then get reparations for past unreasonable charges or that and in relief, he can get, will be in the future after the determination that the rate is unreasonable?

    Morton Hollander:

    Oh, these I.C.C. decisions make it crystal clear that the Commission contemplates that the court will proceed.

    Not the Commission, but that the court will proceed to actually give the shipper a monetary judgment for the past unreasonable charges.

    Earl Warren:

    All right.

    Morton Hollander:

    And that, of course, is — is bottomed on the provisions of the Act —

    Earl Warren:

    Yes.

    Morton Hollander:

    — as well as the shipper’s traditional common-law remedy against —

    Earl Warren:

    Now, in what cases has that been done?

    What cases do you rely upon in which that has been done?

    Morton Hollander:

    In which pursuant to a Commission order, a —

    Earl Warren:

    After the Commission has determined, on reference, the unreasonableness of the order, what case do you rely upon as saying that the court may then grant reparations?

    Morton Hollander:

    Well, we have a long footnote on page 34 —

    Earl Warren:

    34.

    Morton Hollander:

    — of our brief —

    Earl Warren:

    Yes.

    Morton Hollander:

    — in which — in which we set forth that 10 of 15 Interstate Commerce Commission decisions in question — in cases, which were presented to the Interstate Commerce Commission under the Bell theory, that is the shipper recognizing that the Commission could not award him monetary reparations directly, invoked the aid of the Commission in order to get from the Commission a determination that the rates charged by the carrier to the shipper were, in fact, excessively unreasonable and unlawful.

    I do not know the subsequent history of each of these Interstate Commerce Commission cases, but I — I feel safe in — in assuming that the shipper filed these proceedings before the Interstate Commerce Commission for the expressed purpose of getting an adjudication of past unreasonableness not as an empty ritual, not to get some certification from the Commission that he was in fact overcharged, but to use it as a basis for presenting it to the carrier and tell the carrier, “Well now look, the Commission has already decided this question.

    I want you to pay or I’m going to go to court.”

    Earl Warren:

    Yes.

    Morton Hollander:

    And there would be no other purpose for him to —

    Earl Warren:

    Mr. Hollander, I — I don’t challenge your position.

    All I want to know is if you have any authorities.

    If you do, I want to read them and that’s all.

    I don’t argue —

    Morton Hollander:

    Well we — these —

    Earl Warren:

    (Voice Overlap) —

    Morton Hollander:

    — these —

    Earl Warren:

    — and that is —

    Morton Hollander:

    No, these cases — these cases, I feel, constitute authority for our position.

    The only two cases, lower court cases in the courts in which the question has been presented has been the Court of Claims case in New York & New Brunswick case also cited in the same footnote on page 34 and the Garner case, the District Court case.

    William O. Douglas:

    I have in front of me the case of 302 I.C.C., the Davidson —

    Morton Hollander:

    Yes, Your Honor.

    William O. Douglas:

    That didn’t come to the Commission pending a lawsuit, did it?

    Morton Hollander:

    Well that — I think that, Your Honor — that is before the Commission pending a lawsuit with respect to other transportation services not involved in the litigation, not before this Court.

    William O. Douglas:

    (Voice Overlap) I understand.

    William O. Douglas:

    Not — not before this Court.

    Morton Hollander:

    Not before this Court.

    William O. Douglas:

    It doesn’t appear from this report that there was any suit filed and that this was referred over.

    I don’t — there may have been, but doesn’t appear from the report, but at the — the last sentence in the — in this report, in 302 is interesting because it says, “In order discontinuing the proceedings will be entered.”

    So, apparently there is some reason for going to the Commission other than getting a preliminary ruling or unreasonableness for — to aid — in aid of litigation.

    Morton Hollander:

    Yes, sir.

    I should have — in response to Chief Justice’s question, I should have also cited that Davidson case because as Your Honor suggests, that that’s precisely the situation, there had been a Tucker Act too filed in the District Court by Davidson in that case.

    And the District Court — I’m sorry, under the Tucker Act, there had been a Tucker Act too filed in the District Court by Davidson in that case for other transportation services.

    The Government contended that the charges sought were unreasonable.

    The matter was referred over to the Interstate Commerce Commission.

    The Interstate Commerce Commission, as the opinion shows, agreed with the Government’s contention that the charges were in fact unreasonable.

    And having exhausted — having exhausted the authority itself, it deems itself to have, the Commission entered the order discontinuing the proceeding.

    Now, that — that —

    Hugo L. Black:

    I see the Commission — I see the Commission took the position that the statute itself had preserved the common-law right to sue although it had denied giving that procedural remedy through the Commission.

    Morton Hollander:

    Oh, yes, Your Honor.

    And that — and that of course is —

    William O. Douglas:

    (Voice Overlap) —

    Morton Hollander:

    Really the other hurdle petitioners are forced to — to jump over in this litigation.

    Their position here is, I think, Mr. Rea stated in his many words — that their position here is that — that common-law right was necessarily destroyed by enactment of the Motor Carriers Act.

    And nothing — nothing really could be farther from the explicit provisions of the Motor Carriers Act which in term saves all existing remedies.Section 216 (j) saves those remedies.

    Felix Frankfurter:

    But Mr. — Mr. Hollander before the Motor Carrier Act, common-law — there was no regulatory system.

    Force the common-law remedy to be destroyed, except insofar as the — the Motor Carrier Act reserved its right in that —

    Morton Hollander:

    Oh, but I think —

    Felix Frankfurter:

    — because it took over — it relies but totally different involvement of protecting to break an interest.

    Morton Hollander:

    Well, prior to the Motor Carrier Act, I think is this —

    Felix Frankfurter:

    Part of the Motor Carrier Act has left statement regulation of the common-law suit.

    Morton Hollander:

    That’s right.

    And — and the common —

    Felix Frankfurter:

    The say the Motor Carrier Act destroyed like of that have destroyed the — that is true in Montana.

    Before there are these regulatory systems with all that to with the common-law responsibility of the carrier to charge unreasonable rates and left it to the jury to determine how many (Inaudible) can be carried at what rate.

    Morton Hollander:

    Well, I — I do think, Your Honor —

    Felix Frankfurter:

    If you’re thinking the whole — in a way, what — what you’re saying is that you’re ought to be back in common-law the mode of remedy (Inaudible)

    Morton Hollander:

    No, I’m not — at least, I hope that I’m not suggesting that because —

    Hugo L. Black:

    I ask you whether the Commission relies on that as I read it what they said was the intention of preserving that right and therefore they took the file under the old common-law act statute 217 (b) and 22.

    What do you say about that?

    Morton Hollander:

    I think that that’s unquestionably correct.

    There’s — there’s no other way which would make sense of reading the expressed provision in the Act which saves the — the common-law remedy.

    What — what happened — what happened actually was this.

    There — there certainly was this traditional sanction common-law remedy, a shipper always could resort to when he claimed that a carrier was trying to exact an unreasonable rate.

    Now, in the Motor Carrier Act certainly, Congress decided that any determination of unreasonableness could not be made by the courts spread throughout the country.

    In the interest of achieving uniformity of regulation, it was absolutely essential for the Interstate Commerce Commission to be vested exclusively with the primary jurisdiction to determine whether or not in the (Inaudible) there’s an unreasonable rate.

    Well, obviously, the fact that it’s now the Interstate Commerce Commission rather than a court, which makes that determination of unreasonableness doesn’t mean that the court itself is deprived of its power to enforce.

    The very plain mandate of the Motor Carrier Act that every carrier shall charge just enough unreasonable rates —

    Felix Frankfurter:

    So not through the Federal Power Act?

    Every — after charge us to reasonable rate.

    Morton Hollander:

    I think it is, Your Honor, and I feel that if some of the considerations we’re stressing here necessarily apply to the Montana-Dakota situation, it perhaps maybe right for the Court to reconsider Montana-Dakota.

    Actually — it — actually, the only reason this litigation is before this Court — the only litigation — the only reason this litigation is before this Court is because of that outstanding 5 to 4 decision of Montana-Dakota.

    Carriers would have absolutely nothing to rest on in this case if they did not have Montana-Dakota to argue from.

    They’re not interested in the mandate of the statute which says that unjust and unreasonable rates are prohibited or condemned by an act of Congress.

    They’re not interested in the procedures set up in the statute with respect to recruitment of any of these unjust and unreasonable rates, their sole argument in their brief and as I understood their argument today and orally before this Court, it started out with Montana-Dakota and it wound up with Montana-Dakota.

    Felix Frankfurter:

    But that isn’t the, you know, my feeling about the — I expressed my views about that case.

    But that isn’t the only case in which this Court in connection with the Interstate Commerce Act particularly, reached decisions which considering the case in isolation of the question of unjust enrichment, judged only by common-law standards would’ve reached one conclusion which is the case where Justice Cardozo wrote I forget the moment, but was in the (Inaudible) dissent, et cetera.

    If another rigorous so-called, rigorous decision in which we’re taking into account not the individual right between the shipper and carrier or utility operator and consumer, but a system such in it is when of how you, yourself, point out Congress has consistently refused to give me proactive reparation powers to the Commission.

    Morton Hollander:

    I haven’t pointed that at, Your Honor.

    Felix Frankfurter:

    (Voice Overlap) have failed and therefore (Voice Overlap) —

    Morton Hollander:

    And so far as — so far as I’m concerned, that may simply reflect —

    Felix Frankfurter:

    I don’t care what reflects.

    I say Congress hasn’t refused to confer a power that has been consistently requested.

    Morton Hollander:

    Well, I must — I must respectfully point that Your Honor that it — it may simply admit of an inference that Congress thinks the power is already there.

    Felix Frankfurter:

    You (Inaudible) you are entitled to argue that, but —

    Morton Hollander:

    But —

    Felix Frankfurter:

    — how you can say that at — at the Montana, I don’t know.

    Morton Hollander:

    Well, there may be situations, I don’t know if factually it was true in Montana or of any in these other cases.

    Felix Frankfurter:

    Well Congress usually isn’t so legislatively parsimonious, we think, all we need (Inaudible) is extra confirming act because it’s already their argumentatively.

    Morton Hollander:

    There may — there maybe situations in which in Montana-Dakota result is perhaps inescapable.

    There may be situations where Congress makes it absolutely plain that deregulatory body shall not be empowered to either award monetary reparations and Congress may also make it very explicit that the regulatory body shall also be stripped of its power to act in aid of a court in simply making a determination of past unreasonableness without making the reparations award itself.

    But our petitioners are unable to and, of course, it’s impossible to point to any such explicit language within the framework of the Interstate Commerce Act.

    All of the language goes the other way.

    All of the language in the Interstate Commerce Act reveals a consistent and insistent congressional pattern to have the carrier charge, a rate which is only just and reasonable and no more.

    Now —

    Hugo L. Black:

    Do you know whether counsel for the Western Pacific decided the Montana case?

    Morton Hollander:

    Oh, Your Honor, that question, that case was booted up out before this Court in brief and before argument, almost as heavily as it is here.

    The briefs rely very heavily on it —

    Hugo L. Black:

    Was it distinguished?

    Morton Hollander:

    The — the Court, I think, because it really attacks a little weight to the decision, did not even bother to refer to it in its opinion.

    But —

    But rather the conclusion, the reason I want to refer to — the only different situation is (Inaudible) whether the question was there, the question was simply admitted by the reparation on that or acted on the Court of Claims simply.

    The only question was whether not, because if the Government sued, it would have been barred by two-year period (Inaudible) whether or not, that event refer with these (Inaudible) that’s all that we decide.

    Morton Hollander:

    Well, of course, that basic distinction between Montana-Dakota and Western Pacific obtains here fully.

    We — we’re exactly in the same situation here Your Honor, because this is not a Court of Claims, Tucker Act suit it’s true.

    This suit by the carriers is a suit filed under the same statute in the District Court.

    And hereto, we claim that we’re entitled to get a District Court referral to the Commission of the question of unreasonableness of the rates which the carrier seeks to exact from us.

    (Voice Overlap) statute which gives you no right in reparation, you did by way of suit in the Court of Claims or by way of the received or claimed.

    Morton Hollander:

    Well that of course was Western Pacific’s contention before this Court based on Montana-Dakota.

    They claim that we could not go before the Commission because the statutory period of limitations had expired.

    And I think this Court pointed out quite properly that that made no difference and I don’t think it should make any here.

    Earl Warren:

    How did — how did the Government distinguish the Montana case?

    Morton Hollander:

    In Western Pacific?

    Earl Warren:

    Yes.

    Morton Hollander:

    I think we distinguished it on — on the basis of the same — the same grounds we suggest in our brief in this case.

    Morton Hollander:

    Namely that in — in this case, there’s abundant federal jurisdiction is a full-fledged federal cause of action the Court can take cognizance of and namely a suite by a carrier against the United States to recover monetary damages under the Tucker Act.

    That’s true in this case.

    It has to be true in this case.

    The petitioners have to argue that it’s true in this case because otherwise they’re out of court.

    They have to come into court, but have to invoke the court’s jurisdiction.

    They have to say that they have a cause of action against the United States.

    Now in Montana-Dakota, the Court found as one of the chief prospered decision that there was a complete absence of any federally cognizable cause of action in the District Court.

    And it linked that absence of jurisdiction of over — over any federal cause of action with the Commission absence of jurisdiction over the question of reasonable of some past rates as a basis for its opinion.

    But both of those factors coexisted in Montana-Dakota.

    There was no federal cause of action.

    The Court was ready to recognize and there was no power in the Commission.

    In this case, very plainly, we do have a — a federal cause of action.

    I think this also varies —

    Hugo L. Black:

    (Inaudible)

    Morton Hollander:

    I’m sorry, Your Honor.

    Hugo L. Black:

    Why do you in effect ask us to overrule Montana decision?

    Morton Hollander:

    It’s not necessary for this Court to do so Your Honor.

    I — I think I try to point that — that the Court —

    Hugo L. Black:

    (Voice Overlap) Government can put in your brief.

    Morton Hollander:

    — the Court can distinguish it.

    I think the Court can distinguish it on that ground.

    I think it can distinguish it on another very important ground and namely, that is this.

    That in Montana-Dakota, the Federal Power Act did not purport in any way to say that any existing common-law rights, now here our statute does, no — no problem at all.

    Congress employed terminology, I think, regardless of what maybe said of the rest of the Act, this particular section uses language which is not capable of misconstruction or misinterpretation.

    It says very plainly that the existing right shall be preserved.

    Now, we have that in this Act, so we have an expressed preservation of whatever common-law right the shipper had against the exaction of unreasonable rates.

    There was no such expressed savings clause in the Electric Power Act.

    In addition, the legislative history of the Federal Power Act which I think convinced this Court in Montana-Dakota was the legislative history which supported the Commission’s view that Congress never intended to afford reparations authority to the Federal Power Commission.

    Are you talking about the (Inaudible)

    Morton Hollander:

    In — under the Motor Carrier Act?

    Morton Hollander:

    The — the right — yes, Your Honor, I think so.

    I think the right of a shipper to come into Court and tell the Court that the carrier has exactly the rates which are excessive and unreasonable.

    Charles E. Whittaker:

    (Inaudible)

    Morton Hollander:

    Well, no, Your Honor.

    Here the problem is eliminated by virtue of the fact that even though you rely on the common-law right, you necessarily have to have the extent of that common-law right defined by the Interstate Commerce Commission.

    The Court itself, we recognize as a result of the passage of the Motor Carriers Act is not allowed doing — embark into or to engage in any interpretation of reasonableness of rates, the Court must stay its hand and refer the question to the Interstate Commerce Commission.

    And by virtue of such a referral, you achieve the very uniformity in regulation which I’m certain Congress intended when it passed the Motor Carriers Act.

    Felix Frankfurter:

    Mr. Hollander, the Abilene Oil case way back in 204 had before it a similar provision in the Interstate Commerce Act preserving all common-law rights and you said practically, the scheme which the Act established nullifies that provision because of the inconsistencies between them.

    And now that I have read your case in 302, as you’d like to point out that the Commission says that if there’s a cause of action allowable in the Court, then the Court may ask the Commission for a ruling on a tariff.

    But you don’t get a cause of action by having the Commission pass on the tariff ab initio to begin with.

    Morton Hollander:

    Well —

    Felix Frankfurter:

    It derived a cause of action because the Commission can do what it can do in the reparation proceeding.

    But if you didn’t have a cause of action (Inaudible) the Commission, then you can get a reference to the Commission.

    That’s a very different thing.

    Morton Hollander:

    Well that — that, I think, is — it’s certainly is, I think, but that is what I think we have here.

    I think we have a cause of action outside of the Commission.

    Felix Frankfurter:

    Well, you have the cause of action —

    Morton Hollander:

    We have a suit —

    Felix Frankfurter:

    Precise — precisely in the things in which, as you properly stated, that as a matter of fairness and justice, like — I thought the (Inaudible) contractual basis to the Montana case, that was the cause of action that emerged in that case and this Court rejected that, and rejected that for the reason given in the Court’s opinion.

    But you don’t get —

    Morton Hollander:

    Well —

    Felix Frankfurter:

    — you don’t lift yourself into a cause of action because there may be a reference in the Commission.

    Morton Hollander:

    No.

    I’m not suggesting and I’m — I’m just suggesting that the cause of action is not destroyed as petitioners contended is, simply because the Court is not empowered to pass on the question of reasonableness.

    William J. Brennan, Jr.:

    Mr. Hollander, tell me, I think that this probably germane to the argument you’re making.

    If there’s a determination that the charged rate is unreasonable, what then goes to the fact of the Court, just that determination that the charged rate was unreasonable?

    Morton Hollander:

    Yes, Your Honor.

    I assume that that —

    William J. Brennan, Jr.:

    Then what — what then determines the amount that should be paid?

    Morton Hollander:

    Well, ordinarily the Commission determination in a situation of this sort will be framed along these lines that the charge is unreasonable to the extent that it exceeds so much.

    Morton Hollander:

    Now, for example, we hope if we’re allowed to go before the commission on the — in the T. I. M. E. case to show that the joint rate is unreasonable to the extent that it exceeds a combination —

    William J. Brennan, Jr.:

    When I suppose you failed on that but the Commission says, “Well, it’s unreasonable to the extent it exceeds 8 cents.”

    Morton Hollander:

    Yes.

    And then —

    William J. Brennan, Jr.:

    Now, the –then well what’s the judgment then, that’s entered?

    Morton Hollander:

    The judgment which is — well —

    William J. Brennan, Jr.:

    You pay 6.5 —

    Morton Hollander:

    — in this case —

    William J. Brennan, Jr.:

    — for something like that?

    Morton Hollander:

    Yes.

    In this case, for example, we paid 6.5, judgment would be entered for 7.5 or (Voice Overlap) —

    William J. Brennan, Jr.:

    In other words —

    Morton Hollander:

    Whatever the difference is between the paid rate and the —

    William J. Brennan, Jr.:

    Well that — well that’s what I’m trying to get to.

    In other words, the — what finally then is the issue and dispute.

    The proper rate to be determined is determined by the Commission entirely and the court acts merely as administratively somehow, to enter a judgment for whatever the right rate is, isn’t that it?

    Morton Hollander:

    Yes.

    On that phase of the case, it certainly does.

    But it may have preliminary and threshold questions to cope with and as it does in any suit, for example, against the United States under the Tucker Act.

    It may have serious limitation questions to — to cope with which it would necessarily consider wholly independently.

    William J. Brennan, Jr.:

    But — but if a judgment is entered, it has to be a judgment determined by the conclusions of the Commission as to what the proper rate is.

    Morton Hollander:

    Well, I am — frankly, I’m not ready to take a position as to the extent to which the rate determined by the Commission where — to the extent to which the courts are foreclosed from judicial review —

    William J. Brennan, Jr.:

    May I suggest, I think, you’re wise and I’d finally take it.

    Morton Hollander:

    — of the — of the rate.

    I think that question probably will be up here in about two years.

    I also would like to — to point that, Mr. Justice Brennan, that even under — even under Part I, where there is — even under Part I where there is the Commissioner agrees explicit reparations authority that is in favor of the shipper against the rail carrier — even such an award by the Commission is — is only a prima facie award and subject, of course, to — to review in the courts.

    Hugo L. Black:

    (Inaudible)

    Morton Hollander:

    In — in effect, I think that’s right, Your Honor.

    I — I think that that’s the role the — the Commission occupies you and it necessarily has to assume the role because there is no other master or referee for the courts to turn to.

    They — they have to turn to this — to this one body which does have the expertise on this question.

    Morton Hollander:

    And I think it’s all together sensible and reasonable for the courts to do it, because in that way, you’re effectuating the purpose of the Motor Carrier —

    Charles E. Whittaker:

    (Inaudible)

    Morton Hollander:

    Well, as I pointed out before, I’m not quite sure as to the extent to which the Commission’s decision is necessarily binding on the referral court.

    I think that question is — is pending now in — in other litigation.

    I do think that the minimum relief we’re entitled to though, is to get this Commission’s determination and then it may very well be that the parties both will be willing to fully abide by the Commission’s resolution of the question and that, of course, will — will put an end to the controversy.

    How —

    Felix Frankfurter:

    That you — that you would, now — did you just indicate a doubt whether the referring court or the (Inaudible) would be bound by the determination of the Commission on the rates, on the reasonableness of the rates?

    It should (Inaudible)

    Morton Hollander:

    Yes, Your Honor.

    I —

    Felix Frankfurter:

    But you expressed the doubt and you get yourself into the — into the box that you said you ought not to get into, namely, that you may have diverse views on questions of rates of different courts A and B that you may have the court determine the reasonableness of the rate, if it has no business here.

    Morton Hollander:

    Well, a — the — the courts, of course, as Your — as Your Honor knows, have, at all times, reviewed Interstate Commerce Commission orders and that doesn’t necessarily mean that they’re ready to substitute their own judgment for that of the administrative agency, they go over the administrative record, they determine whether it’s an arbitrary decision.

    Felix Frankfurter:

    Not — not the only basis for reversing here.

    Morton Hollander:

    Find out where there was any substantial basis in it.

    And to that, that was the only extent to which I — I met to infer that that is not binding.

    Potter Stewart:

    You’re not talking about a statutory three-judge court?

    Morton Hollander:

    Yes, Your Honor.

    Yes.

    Potter Stewart:

    You’re doing an — an original —

    Morton Hollander:

    Yes, Your Honor.

    Potter Stewart:

    (Voice Overlap) —

    Morton Hollander:

    Actually, the Davidson case, the — the one Mr. Justice Douglas referred to at 302 I.C.C., is actually — there was an opinion — a decision by the Commission on reference from a District Court and it is now, I think, being reviewed by a one-judge court on the theory that this is actually a complaint for money damages.

    Potter Stewart:

    Well, that’s unusual, isn’t it, a review of a rate determination by the Commission by a single judge?

    Morton Hollander:

    Well, it’s not unusual where all that is sort is reparations, Your Honor.

    That is the — that — that is the — there is a special statutory provision with respect to the monetary reparations and awards.

    But as I say, I would prefer not to be drawn in to any controversies to what might happen two years from now.

    Potter Stewart:

    Either one of the —

    Morton Hollander:

    I think —

    Potter Stewart:

    Either on of the dilemmas (Voice Overlap) —

    Morton Hollander:

    All we’re asking — all we’re asking for here is an opportunity to have our day in court to establish our defense to the satisfaction of the Interstate Commerce Commission.

    Hugo L. Black:

    I don’t quite understand why the — this thing that I had exposed, the Abilene case, the courts have held that in case where it is proper to determined reasons.

    It was right to submit it to the I.C.C. that determine reasonableness — this is all we did.

    And that the courts would leave that alone unless they would upset an order of the Commission and in that respect, just the same as it would in any other.

    Hasn’t that been the rule?

    Morton Hollander:

    I think so, Your Honor.

    Hugo L. Black:

    I.C.C. has practically served as a (Inaudible) on the questions of reasonableness in proper cases, I’m not saying it should in proper cases.

    But assuming it’s the proper case, I would suppose that there’s been some extraordinary reason for upsetting its finding of reasonableness should be followed like any other case.

    Morton Hollander:

    I think so, Your Honor.

    I — I, myself, see no real room for — for any dispute on that question.

    Hugo L. Black:

    Your dispute is whether or not it’s proper to have accepted in thisway.

    Morton Hollander:

    Yes, and we think that in the circumstances of this case just as in Western Pacific, it was not only proper, it was not only appropriate, but it was mandatory on the District Court in both cases to afford us an opportunity to establish our defense of unreasonableness before the only body charged by Congress with the responsibility for adjudicating that question, namely Interstate Commerce Commission.

    Thank you.

    Earl Warren:

    Mr. Rea.

    Bryce Rea, Jr.:

    Thank you, Mr. Chief Justice.

    I would like to take just a minute to suggest that Mr. Justice Frankfurter and his colleagues in their dissent in the Montana-Dakota case do not dissent from the proposition which we urge.

    I would like to quote Mr. Justice Frankfurter’s language at page 258 of 341 U.S., “Despite the unqualified statutory declaration that unreasonable rates are unlawful, which is the precise declaration upon which the respondent relied here, we think it clear that Congress did not intend either court or Commission to have the power to award reparations on the ground that a properly filed rate or charge has in fact been unreasonably high or low.

    If that were all the complaint before us, showed, and if I may interpolate, that is all the proceedings here shows.

    There is no allegation, but that the rates of Davidson and the rates of T. I. M. E. were properly established.

    If that were all the complaint before us showed, we would agree that recovery of damages in a civil action would not be an appropriate remedy and that the complaint should have been dismissed.

    Now, we submit that that language which is squarely in accord with the language of the majority in that opinion, on that point relating to properly filed rates, controls here.”

    Hugo L. Black:

    Suppose you had filed a rate today, $50 per pound, would that be binding until —

    Bryce Rea, Jr.:

    This would have to —

    Hugo L. Black:

    — (Voice Overlap) the company’s action mistaken?

    Bryce Rea, Jr.:

    Mr. Justice Black, if we file the rate, it was clearly excessive.

    The Commission would promptly, on its own motion, suspend that rate for a period of seven months.

    Hugo L. Black:

    Suppose it — if somebody paid you under protest, would they have any remedy?

    Bryce Rea, Jr.:

    Once the rate properly takes effect and is applicable, filed with the Commission and effective, the shipper has no remedy.

    No, Your Honor, as long as that rate is filed and effective.

    Hugo L. Black:

    But if —

    Bryce Rea, Jr.:

    No he could (Voice Overlap) —

    Hugo L. Black:

    (Voice Overlap) make it effective?

    Bryce Rea, Jr.:

    He could challenge it.

    Felix Frankfurter:

    Yes, he could challenge.

    Bryce Rea, Jr.:

    I’ve — I understood you to mean, does he have any remedy by way of recovery back.

    Hugo L. Black:

    I suppose — suppose you make him pay it before he can challenge it, what’s his remedy?

    Bryce Rea, Jr.:

    He has no remedy as far as recovering back is concerned.

    His remedy is to go to the Commission, file a complaint and ask the Commission to declare that rate unjust and unreasonable and to order the carrier to —

    Hugo L. Black:

    Does that help?

    Bryce Rea, Jr.:

    — substitute to other forms.

    Hugo L. Black:

    Does that help him with reference to the rate he’s already paid?

    Bryce Rea, Jr.:

    It does not help him, Your Honor, with reference to the shipment that has already moved at that rate.

    Hugo L. Black:

    There are no refunds?

    Bryce Rea, Jr.:

    No refund is permissible.

    No, Your Honor, any more than it was permissible in Montana-Dakota.

    Hugo L. Black:

    However unreasonable, it might be held to be?

    Bryce Rea, Jr.:

    However unreasonable as of theoretical matter, Your Honor, it could be a ridiculous rate.

    Hugo L. Black:

    Well, that’s — that could (Voice Overlap) —

    Bryce Rea, Jr.:

    And it could be —

    Hugo L. Black:

    That’s what the Government claims here.

    Bryce Rea, Jr.:

    It could be that for some reason or other, the Interstate Commerce Commission fails to suspend it and it takes effect.

    And it’s six months before it’s cancelled and in the meantime, practically to be done with.

    Hugo L. Black:

    In the meantime, all payments made on it —

    Bryce Rea, Jr.:

    That’s right, I would say —

    Hugo L. Black:

    — not that because it’s filed.

    Bryce Rea, Jr.:

    I would suggest to Your Honor —

    Hugo L. Black:

    That may be right.

    I’m just asking if that —

    Bryce Rea, Jr.:

    That is a theoretical possibility that —

    Hugo L. Black:

    I’m not talking about theoretical.

    I’m talking about actual.

    Hugo L. Black:

    I — I thought you — what you’re saying is maybe it’s right.

    Bryce Rea, Jr.:

    I am saying, Your Honor —

    Hugo L. Black:

    (Voice Overlap) —

    Bryce Rea, Jr.:

    — yes, as a matter of law — as a matter of law, Davidson could file a rate tomorrow, $100 per hundred for transportation from Baltimore to Washington.

    And it’s possible that the Commission would not take any action on until 45 days have passed, in which event —

    Hugo L. Black:

    But suppose (Voice Overlap) —

    Bryce Rea, Jr.:

    — in which to that — take effect at the end of 30 and it would be 15 days during which that rate was in effect.

    It’s possible that a shipper might move some traffic under that rate and pay that $100 rate.

    If that happens, he would have, under the law, no refund.

    But as a practical matter, the Commission would not let that rate stay on in and there’s a —

    Hugo L. Black:

    No, not that time.

    Bryce Rea, Jr.:

    As a practical matter, the Davidson Transfer & Storage Company, faced with the vicious competition of other motor carriers between Washington and Baltimore was never violated.

    Hugo L. Black:

    And I —

    Bryce Rea, Jr.:

    And if he did file it, no shipper would give him any business.

    Hugo L. Black:

    But suppose instead of that, they just made the combined rate, if you shipped it all the way through four times what the rate would be if he divided up into parts, but to be in a refund there, if the Court — if the Commission should later find that to be unreasonable.

    Bryce Rea, Jr.:

    Are you referring, Justice Black, to the situation where you have a rate from Washington to Baltimore, and rate from Baltimore to Philadelphia and then another rate Washington to Philadelphia?

    Hugo L. Black:

    (Voice Overlap) Philadelphia to Harrisburg is another — from Harrisburg to [Laughs] New York.

    Bryce Rea, Jr.:

    In the event you would have a series of rates, a shipper can get the benefit of those rates if he wants to ship his goods from Washington to Baltimore and then reship them from Washington to Philadelphia and then reship them from Philadelphia to Trenton and then reship them from Trenton to New York.

    In that situation, he paid that combination of local rates.

    If however, he tenders his shipment to Davidson Transfer & Storage Company in its Washington terminal, under a bill of lading calling for delivery in New York through shipments, he must pay the through rate published and applicable to that through movement.

    Hugo L. Black:

    He must pay it and however unreasonable, it might later be found to be, his money is gone.

    Bryce Rea, Jr.:

    Yes, Your Honor.

    Hugo L. Black:

    There is no remedy.

    Bryce Rea, Jr.:

    Yes, Your Honor.

    Felix Frankfurter:

    Over the period or prior to the period that he has filed a reparation suit challenging the reasonableness of the joint excessive rate?

    Bryce Rea, Jr.:

    He — he has no recovery for anything he has paid —

    Felix Frankfurter:

    (Voice Overlap) —

    Bryce Rea, Jr.:

    — while that rate is in effect.

    His remedy, as Mr. Justice Frankfurter pointed out in the Montana-Dakota case, is to go to the Commission and say this rate is unreasonable.

    We want you to find it unreasonable and we want you to order the carrier to put in a new one.

    Felix Frankfurter:

    If suppose — suppose — suppose the exacted today, he goes to the Commission today.

    He has to pay it and not get his goods shipped.

    The Commission takes it up and decides a year later that it was all together unreasonable.Can he get anything back?

    Bryce Rea, Jr.:

    He cannot get anything back for that movement that moved today.

    No, Your Honor.

    The Commission will issue an order which is the only power the Commission has to make the rates change prospective.

    I would say this, if I can just in one further answer, Mr. Justice Black, as a practical matter, there are very few cases in which rates are suspended in which the finding of the Commission and is not made within the suspension period.

    And the Commission has developed a practical matter — method of expediting those cases.

    They are very rigorous in postponements of time or extensions of times for pleadings and that sort of thing so that it’s a practical matter in almost every instance in which a rate is protested and suspended.

    The determination as to its reasonableness is made before the seven-month period of the suspension expires.

    Now, that is not true in some agencies.

    It’s not true, for example, in the Federal Power Commission where it’s unheard of to reach a decision within the five-month suspension period, but fortunately, motor carrier rate cases are much less complex than natural gas rate cases so that you do get.

    William J. Brennan, Jr.:

    Why does (Inaudible)

    Bryce Rea, Jr.:

    I don’t know, Your Honor.

    I think it was postponed for some time because the question of the constitutionality of the ton-mile tax was being litigated in New York.

    Furthermore, the propriety of the surcharge on intrastate movements was before the New York Public Service Commission.

    And the three proceedings, the proceeding on the surcharge for Intrastate Commerce before the New York Public Service Commission and the proceeding before the Interstate Commerce Commission and the court litigation with respect to the constitutionality of the ton-mile tax, all were more or less, rolling along together.

    And as Your Honors all know, when you get several cases rolling together, it usually takes a longer time.

    Thank you.

    Earl Warren:

    Mr. Rea, your answers to Justice Black, you will rely on Montana-Dakota?

    Bryce Rea, Jr.:

    We rely on Montana-Dakota.

    Earl Warren:

    That’s the basis for your (Voice Overlap) —

    Bryce Rea, Jr.:

    That is the basis for our holding, Montana-Dakota, as it interprets the Federal Power Act, which as we read it —

    Earl Warren:

    Yes.

    Bryce Rea, Jr.:

    — is on all force substantively in its rate regulatory procedures with Part II of the Interstate Commerce Act.

    Earl Warren:

    Yes.

    Now, do I — do I understand that according to your reason, the dissent in that case did not reach that problem, did not object to that situation?

    Bryce Rea, Jr.:

    No, Your Honor.

    Earl Warren:

    At which —

    Bryce Rea, Jr.:

    The dissent in that case was based on the allegation that the buyer of the service, Montana, had been fraudulently dominated by the seller of the service and therefore, was prevented by that fraud from availing himself of the remedies provided in the Act, namely, complaint with a request to the Commission to find the rate unreasonable.

    Bryce Rea, Jr.:

    In other words — well, I think, here —

    Earl Warren:

    That’s alright.

    It’s alright.

    You — you made your point.

    Bryce Rea, Jr.:

    Thank you, Your Honor.

    Thank you, gentlemen.

    Earl Warren:

    We’ll adjourn now.