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RELIANCE STEEL PRODS. CO. v. UNITED STATES

March 4, 1957

RELIANCE STEEL PRODUCTS COMPANY, a corporation,
v.
The UNITED STATES of America, The Interstate Commerce Commission and The Baltimore and Ohio Railroad Company



The opinion of the court was delivered by: MARSH

Since the court is of the opinion that the order must be set aside on the procedural issue, the first two points need not be considered.

 A complaint was filed with the Interstate Commerce Commission on April 9, 1953 alleging that the demurrage and penalty charges assessed by the defendant carrier were inapplicable and seeking a reparation award against it. The Commission ordered that the proceeding be handled under 'modified procedure', 49 C.F.R. 1.5(k). Thereafter, the complainant filed with the Commission a memorandum of facts involved in the case, and the answer of the defendant carrier admitted these facts to be correctly stated. There was no oral evidence offered or received. After written arguments had been presented, the Commission notified both parties that 'this proceeding will be referred to an examiner with a view to the preparation and service of a proposed report, to which exceptions and reply exceptions may be filed.' It is conceded that the examiner to which the proceeding was referred was not a qualified hearing examiner appointed as provided in section 11 of the Administrative Procedure Act, 5 U.S.C.A. § 1010.

 A proposed report was issued on November 3, 1953 by the Commission's examiner. It was then that complainant first learned that he was not a section 11 examiner. It promptly *fn1" filed exceptions to this proposed report, objecting that the examiner was not qualified and requesting the withdrawal of his report and issuance of one by a qualified examiner pursuant to the Administrative Procedure Act. After oral argument, complainant's request was denied by the Commission. It also dismissed the complaint on the merits, agreeing with the conclusions of its examiner.

 The problem thus presented is whether it was lawful for the Commission to appoint an unqualified examiner to adjudicate the merits of this complaint involving application of rates and seeking a reparation award against a carrier.

 The Interstate Commerce Act, 49 U.S.C.A. § 13(1), provides that any person aggrieved by the action of a common carrier in violation of the Interstate Commerce Act may complaint to the Commission. Sections 15 and 16 of the same title require full hearings to be given to such complainants.

 Sections 5, 7 and 8 of the Administrative Procedure Act, where pertinent, provide:

 'Sec. 5. (5 U.S.C.A. § 1004) Adjudication

 'In every case of adjudication required by statute to be determined on the record after opportunity for an agency hearing, except to the extent that there is involved (1) any matter subject to a subsequent trial of the law and the facts de novo in any court; (2) * * *.

 '(a) * * *

 '(b) Procedure. -- The agency shall afford all interested parties opportunity for (1) the submission and consideration of facts, arguments, offers of settlement, or proposals of adjustment where time, the nature of the proceeding, and the public interest permit, and (2) to the extent that the parties are unable so to determine any controversy by consent, hearing, and decision upon notice and in conformity with sections 7 and 8.'

 'Sec. 7. (5 U.S.C.A. § 1006) Hearings

 '(a) Presiding officers. -- There shall preside at the taking of the evidence (1) the agency, (2) one or more members of the body which comprises the agency, or (3) one or more ...


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