City of New York v. New York Telephone Co.

468 F.2d 1401, 1972 U.S. App. LEXIS 8685
Temporary Emergency Court of Appeals·Decided June 30, 1972·No. Nos. 2-1, 2-2·Published·Cited by 28 cases

Opinions

TAMM, Chief Judge.

Appellants, the City of New York, Grassroots Action Inc., and John B. O’Sullivan, initiated suit against the New York Telephone Company in the district court on February 8 and 10, 1972, asserting violation of the Econom[1402] ic Stabilization Act of 1970,1 as amended in 1971,2 seeking declaratory and injunctive relief against an increase in the Company’s New York intrastate rates approved by the New York State Public Service Commission on January 17, 1972, which were then under active review by the Price Commission. Despite allegations of failure to comply with the Price Commission’s procedural regulations,3 the district court, 339 F. Supp. 198, on March 1, 1972, dismissed both complaints holding that appellants were required to submit their contentions initially to the Price Commission. This appellants did not do. On March 30, 1972, the Price Commission gave final approval to the Company’s rate increase.4 The instant appeals raised two questions. First, were appellants required to make their submission in the first instance to the Price Commission? Second, did the Company comply with the Commission’s procedural regulations ? Resolving the initial question adversely to appellants, we pretermit consideration of the latter, and accordingly affirm the judgment of the district court.

I. Exhaustion of Administrative Remedies Required

The doctrine of exhaustion of administrative remedies is a well respected tradition with a sound foundation in logic and the law which we, although a court of recent origin, must nontheless respect. The doctrine provides “that no one is entitled to judicial relief for a supposed or threatened injury until the prescribed administrative remedy has been exhausted.5 As the Supreme Court indicated in McKart v. United States,6 the policy underlying the exhaustion doctrine is “the avoidance of premature interruption of the administrative process. The agency, like a trial court, is created for the purpose of applying a statute in the first instance. Accordingly, it is normally desirable to let the agency develop the necessary factual background upon which decisions should be based. And since agency decisions are frequently of a discretionary nature or frequently require expertise, the agency should be given the first chance to exercise that discretion or to apply that expertise. And of course it [1403] is generally more efficient for the administrative process to go forward without interruption than it is to permit the parties to seek aid from the courts at various intermediate stages.”

The raisons d’etre for the exhaustion doctrine enunciated in McKart apply with full force to the instance ease. Judicial review is surely hindered by the failure of the litigant to give the agency an opportunity to make a factual record, exercise its discretion or apply its expertise. The Commission is confronted with difficult tasks which require considerable specialized acumen. For example, in the instant ease, the Commission is forced to strike a delicate balance between the need for communications service to the public and the impact of a rate increase upon general price levels in light of national economic policies. Moreover, agency expertise is particularly useful here since appellants seek an interpretation of a procedural rule adopted by the Commission itself. It is well established that agency input is extremely helpful in interpretation of its own regulations.7 Furthermore, the statute itself explicitly requires the Commission to “establish procedures which are available to any person for the purpose of seeking an interpretation, modification, or rescission of, or seeking an exception or exemption from such rules, regulations, and orders.”8

Other policy reasons similarly require application of the exhaustion doctrine in this case. Appellants initiated suit at a time when Commission action was still pending. Notions of judicial economy properly precluded the learned district judge from intervening when no harm was imminent9 and when no adverse decision had yet emanated from the Commission. In effect, appellants’ complaints may well have been rendered academic. It is axiomatic that with certain exceptions not applicable here, judicial review can only occur after a final order. Concepts of administrative autonomy also require that the Commission be given an opportunity to discover and correct its own errors. In this respect we have noted in our cases to date a healthy trend towards amendment of regulations when error or oversight has been pointed out to the Commission. Such autonomy lends itself to prompt, consistent price control policies which are essential to the administration of a nationwide program of price control. Finally, frequent deliberate skirting of the Commission may well result in an erosion of effectiveness and public confidence in the Commission which we must recall is a “collaborative instrumentality] of justice.” 10

With an eye tempered by historical perspective, we note that administrative exhaustion was also required under the [1404]*14041942 and 1950 price stabilization statutes. Although that statutory framework differed from the present one, the policy reasons expressed for requiring exhaustion under those statutes are equally applicable here.11

Free access — add to your briefcase to read the full text and ask questions with AI

City of New York v. New York Telephone Co., 468 F.2d 1401, 1972 U.S. App. LEXIS 8685 (tecoa 1972).

468 F.2d 1401 (City of New York v. New York Telephone Co.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

Crude Co. v. United States Department of Energy
943 F.2d 59 (Temporary Emergency Court of Appeals, 1991)
Caribou Four Corners, Inc. v. American Oil Co.
628 F. Supp. 363 (D. Utah, 1985)
MGPC, Inc. v. Department of Energy
673 F.2d 1277 (Temporary Emergency Court of Appeals, 1982)
Energy Cooperative, Inc. v. United States Department of Energy
659 F.2d 146 (Temporary Emergency Court of Appeals, 1981)
Marathon Oil Co. v. United States Department of Energy
642 F.2d 436 (Temporary Emergency Court of Appeals, 1981)
Quincy Oil, Inc. v. Federal Energy Administration
620 F.2d 890 (Temporary Emergency Court of Appeals, 1980)
West v. Bergland
611 F.2d 710 (Eighth Circuit, 1980)
Dyke v. Gulf Oil Corp.
601 F.2d 557 (Temporary Emergency Court of Appeals, 1979)
United States v. Southwest National Bank
598 F.2d 600 (Temporary Emergency Court of Appeals, 1979)
United States v. Empire Gas Corp
547 F.2d 1147 (Temporary Emergency Court of Appeals, 1976)
Orange & Rockland Utilities, Inc. v. Howard Oil Co.
416 F. Supp. 460 (S.D. New York, 1976)
Templeton's Service, Inc. v. Mobil Oil Corporation
402 F. Supp. 368 (E.D. Michigan, 1975)
TASTY BAKING COMPANY v. Cost of Living Council
395 F. Supp. 1367 (E.D. Pennsylvania, 1975)
St. Mary's Hospital of East St. Louis, Inc. v. Ogilvie
496 F.2d 1324 (Seventh Circuit, 1974)
American Nursing Home Ass'n v. Cost of Living Council
497 F.2d 909 (Temporary Emergency Court of Appeals, 1974)
Air Products & Chemicals, Inc. v. United Gas Pipe Line Co.
373 F. Supp. 474 (District of Columbia, 1974)
Consumers Union of United States, Inc. v. Cost of Living Council
491 F.2d 1396 (Temporary Emergency Court of Appeals, 1974)