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ATCHISON, TOPEKA & SANTA FE RY. CO. v. INTERSTATE

November 24, 1975

The ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY et al.
v.
INTERSTATE COMMERCE COMMISSION and United States of America



The opinion of the court was delivered by: WEINER

This is an action brought by several railroad companies to set aside an order of the Interstate Commerce Commission (I.C.C.) cancelling proposed rate schedules which would have provided increased revenues from the transportation of fresh fruit and vegetables to the east coast. Jurisdiction of this court was invoked pursuant to 28 U.S.C. § 1336(a) and a three-judge court was convened as required by 28 U.S.C. § 2325. Numerous shippers and growers have joined this action as intervening defendants.

Briefly summarized, the facts are as follows. In May, 1974, the railroads filed a series of tariffs and rate schedules with the I.C.C., which tariffs were to replace then-existing tariffs covering the transportation of perishable food products. Subsequently, protests were lodged by shippers and receivers, and the newly-filed tariffs were suspended and hearings begun pursuant to 49 U.S.C. § 15(7). The hearings constituted Investigation and Suspension Docket No. 8944, Fresh Fruits and Vegetables, Trans-Continental and Western Points. Hearings were held across the country at various places and at times until December 20, 1974. On December 20, the presiding administrative law judge set February 3, 1975 as the date by the which briefs were to be submitted by the interested parties.

 On December 30, 1974, the date on which the seven-months period of suspension of rates under investigation was to end, the Full Commission issued an order cancelling the rates, effective thirty days later. As the railroads had not voluntarily agreed to prolong the suspension *fn1" adherence to the previously-set briefing schedule would have resulted in the new tariffs being effective until the I.C.C. rendered its decision. The I.C.C. order indicated that the Commission had dispensed with the necessity of issuing an initial decision because of the need for a timely final decision and the I.C.C. had found that the filing of briefs was, in light of their findings 'not necessary for a proper disposition of (the) proceeding. ' A report was issued on March 14, 1975, which fully explained the basis for the December 30, order.

 The railroads came before this court seeking a temporary restraining order to prohibit the Defendants '. . . from enforcing by any manner or means the order of the Interstate Commerce Commission entered . . . on December 30, 1974.' Their request was denied on January 27, 1975. The matter is now before the court for final determination.

 In their briefs, the railroads have presented several reasons why the I.C.C. order should be set aside. Their principal contention is that the failure to allow them to submit briefs violated the Administrative Procedure Act (A.P.A.), 5 U.S.C. § 551 et seq., and violated their right to due process of law under the Fifth Amendment. Plaintiffs argue that under Sec. 557 (c) of the A.P.A., the I.C.C. was required to allow the parties to submit briefs and arguments. Specifically, Sec. 557(c) provides:

 Before a recommended, initial, or tentative decision, or a decision on agency review of the decision of subordinate employees, the parties are entitled to a reasonable opportunity to submit for the consideration of the employees participating in the decisions --

 (1) proposed findings and conclusions, or

 (2) exceptions to the decisions or recommended decisions of subordinate employees or to tentative agency decisions; and

 (3) supporting reasons for the exceptions or proposed findings.

 Defendants' briefs state that the hearings conducted by the I.C.C. provided plaintiffs with ample opportunity to present their position and, in fact, plaintiffs did fully present their position through their exhibits. Defendants also argue that the thirty day period before the December 30 order was to be effective afforded plaintiffs the opportunity to submit proposed findings and supporting reasons in the form of a motion for reconsideration *fn2" The United States and the I.C.C. further state that the more rigorous standards of Sec. 557 are not applicable, but, rather, that Sec. 553 of the A.P.A. governs investigation and suspension proceedings.

 Section 553 applies generally to rule making proceedings and provides:

 (c) After notice required by this section, the agency shall give interested persons an opportunity to participate in the rule making through submission of written data, views, or arguments with or without opportunity for oral presentation. After consideration of the relevant matter presented, the agency shall incorporate in the rules adopted a concise general statement of their basis and purpose. When rules are required by statute to be made on the record after opportunity for an agency hearing, sections 556 and 557 of this title apply instead of this subsection.

 The government contends that Sec. 15(7) of the Interstate Commerce Act requires only that decisions in investigation and suspension proceedings be made after 'full hearing' (49 U.S.C. § 15(7)), and that the requirement has been satisfied.

 It is clear that, if § 553 applies to the I.C.C. proceedings and not § 557, the hearings held by the I.C.C. would satisfy all statutory requirements. However, the issue raised by the parties in whether this proceeding was one in which rules were required to be made 'on the record after opportunity for an agency hearing' (5 U.S.C. § 553(c), emphasis added.) Plaintiffs claim that under 49 U.S.C. § 14(1), findings and conclusions must be made in a more specific form ...


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