LEAHY, Senior District Judge.
North Carolina Natural Gas Corporation filed suit under § 17(9) of the Interstate Commerce Act, 49 U.S.C.A. § 17(9), to review certain orders of the Interstate Commerce Commission. This Court has jurisdiction under the Act and under 28 U.S.C. §§ 1336, 2284, 2321-2325, and the complaint is properly before this Court under 28 U.S.C. § 1398 in that plaintiff is a Delaware corporation.
The orders of the ICC complained of failed to hold unlawful certain Tariffs providing special reduced rail transportation rates on bituminous fine coal from points of origin in Kentucky, Tennessee, West Virginia and Virginia to various destination points in the South including North Carolina. The legal challenge is to the Tariffs which provide preferred rates — agreed upon by the shipper-transporter and assignee — of
250
per ton per carload less to a consignee who, in the 12-month period ending the last day of the second month preceding delivery, has received a prescribed aggregate minimum volume. Such rates are less than the regularly published rates applicable to a consignee who has not received such minimum volume. The complaint avers the special reduced rates were calculated to enable delivered cost of bituminous coal to compete with natural gas in the Carolina territory.
Plaintiff, North Carolina Natural Gas, has since October 1,1959, distributed and sold natural gas to domestic, commercial and industrial consumers within the service area; and has distributed and sold wholesale to other private and municipal distribution companies. Southern Freight Tariff Bureau filed the chai-
fenged Tariffs
which were not rejected by the Commission and the rates established were permitted to. become effective on March 1, 1960, as legally filed rates.
The administrative process commenced on January 27, 1960 when the railroads, here involved, acting through the Southern Freight Tariff Bureau, filed with the ICC Freight Tariff 903.
On March 1, 1960 [specifically, on February 18, 1960] four railroads
petitioned the Commission to suspend the effective date of the rates and to enter upon an investigation as to the lawfulness under § 15(7) of the Act, 49 U.S.C.A. § 15(7). The objection questioned the competitive necessity for some of the reductions. Atlantic Coast Line Railroad Company and four other railroads
filed reply on February 24, 1960 to petition for suspension. It stated the reduced rates were necessary if the railroads were to retain the business of moving coal to certain electrical generating plants in the Carolina area.
Upon consideration of the petition for suspension and the reply, the ICC, through its Board of Suspension, issued its February 25, 1960 order instituting an investigation into the lawfulness of the rates. The rates were not suspended,
and protestants appealed the action
of the Suspension Board to Division 2 of the ICC. On February 29, 1960, Division 2 sustained the action of the Suspension Board in refusing to suspend the rates and in instituting an investigation of them.
The rates therefore became effective March 1, 1960.
On August 25, 1960 the railroads then petitioned the ICC to discontinue the investigation, stating that “after further consideration of the competitive conditions existing in Carolina territory they [the railroads] are convinced that the volume and multiple-ear rate reductions on fine coal presently in effect but under investigation are warranted.” It was after this that plaintiff, North Carolina Natural Gas, claiming to be adversely affected by the February 25, 1960 action of the Commission, on September 23, 1960 filed with the ICC a motion to expunge the filed Tariffs and to terminate the proceedings in Docket No. 33360 as to the Tariffs and rates contained therein. ICC, Division 2, by order on January
10,1961, denied plaintiff’s motion holding “The matters submitted in support thereof do not constitute substantial and material grounds to warrant granting said Motion;” and the ICC ordered “that said Motion be, and it is hereby overruled.” Then by an order of April 27, 1961, issued May 4, 1961, the ICC denied plaintiff’s Petition for Reconsideration “for the reason that upon consideration of the decisions of this Commission in Coal from Kentucky, Virginia and West Vir-gina, to Virginia, 308 ICC 99, and Coal to New York Harbor Area, 311 ICC 355, sufficient and material grounds have not been presented to warrant a conclusion,
without hearing,
that the Tariffs assailed herein are unlawful
per se.”
(Emphasis added.)
Plaintiff seeks an injunction against the alleged unlawful agreed upon reduced rail transportation Tariffs and rates which, plaintiff avers, irreparably injures and will continue to injure it unless such Tariffs are restrained. Unless the in-junctive process issues, plaintiff further avers, a designed purpose of the coal producers, rail carriers and coal consuming electric power companies will be accomplished, and plaintiff’s continued sale of natural gas to Carolina Power and Light Company, for example, will not be made because such sales will thus have been rendered uneconomical. Certain other parties (Louisville & Nashville Railroad Company, Clinchfield Railroad Company, Southern Railway Company, The Cincinnati, New Orleans and Texas Railway Company, Interstate Railroad Company, Carolina Power and Light Company, Property Owners Committee and Association of Coal Mine Operators, and others) were allowed to appear and intervene in the case at bar.
Plaintiff’s arguments for equitable relief are cast in the orthodox mold, viz.: irreparable harm will result from the ICC orders; the sought injunction will cause no injury or damage to others; continued effectiveness of the filed Tariffs and rates will cause sales of natural gas to Carolina Power and Light Company to be uneconomical to plaintiff and destroy contractual arrangements entered by that company with plaintiff, with the resultant destruction of plaintiff as a competitor; and, finally, permitting the Tariffs to remain effective “is not in the public interest.” In addition, plaintiff argues 1. it has no adequate remedy at law, and 2. it has exhausted its administrative remedies.
Plaintiff argues the reduced rates contained in the filed Tariffs are in violation of § 2 of the Interstate Commerce Act, 49 U.S.C.A. § 2; the law prior to and independent of the Act, and the law subsequent to the Act, require all shippers and consignees to be charged an equal rate; the ICC itself has held volume rates unlawful; and that the agreed upon volume reduced rates in SFTB Tariff 903, SFA ICC S-96 and SFTB Tariff 903-A, SFA ICC S-133 are, in addition, in violation of the Elkins Act, 49 U.S. C.A. § 41(1).
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LEAHY, Senior District Judge.
North Carolina Natural Gas Corporation filed suit under § 17(9) of the Interstate Commerce Act, 49 U.S.C.A. § 17(9), to review certain orders of the Interstate Commerce Commission. This Court has jurisdiction under the Act and under 28 U.S.C. §§ 1336, 2284, 2321-2325, and the complaint is properly before this Court under 28 U.S.C. § 1398 in that plaintiff is a Delaware corporation.
The orders of the ICC complained of failed to hold unlawful certain Tariffs providing special reduced rail transportation rates on bituminous fine coal from points of origin in Kentucky, Tennessee, West Virginia and Virginia to various destination points in the South including North Carolina. The legal challenge is to the Tariffs which provide preferred rates — agreed upon by the shipper-transporter and assignee — of
250
per ton per carload less to a consignee who, in the 12-month period ending the last day of the second month preceding delivery, has received a prescribed aggregate minimum volume. Such rates are less than the regularly published rates applicable to a consignee who has not received such minimum volume. The complaint avers the special reduced rates were calculated to enable delivered cost of bituminous coal to compete with natural gas in the Carolina territory.
Plaintiff, North Carolina Natural Gas, has since October 1,1959, distributed and sold natural gas to domestic, commercial and industrial consumers within the service area; and has distributed and sold wholesale to other private and municipal distribution companies. Southern Freight Tariff Bureau filed the chai-
fenged Tariffs
which were not rejected by the Commission and the rates established were permitted to. become effective on March 1, 1960, as legally filed rates.
The administrative process commenced on January 27, 1960 when the railroads, here involved, acting through the Southern Freight Tariff Bureau, filed with the ICC Freight Tariff 903.
On March 1, 1960 [specifically, on February 18, 1960] four railroads
petitioned the Commission to suspend the effective date of the rates and to enter upon an investigation as to the lawfulness under § 15(7) of the Act, 49 U.S.C.A. § 15(7). The objection questioned the competitive necessity for some of the reductions. Atlantic Coast Line Railroad Company and four other railroads
filed reply on February 24, 1960 to petition for suspension. It stated the reduced rates were necessary if the railroads were to retain the business of moving coal to certain electrical generating plants in the Carolina area.
Upon consideration of the petition for suspension and the reply, the ICC, through its Board of Suspension, issued its February 25, 1960 order instituting an investigation into the lawfulness of the rates. The rates were not suspended,
and protestants appealed the action
of the Suspension Board to Division 2 of the ICC. On February 29, 1960, Division 2 sustained the action of the Suspension Board in refusing to suspend the rates and in instituting an investigation of them.
The rates therefore became effective March 1, 1960.
On August 25, 1960 the railroads then petitioned the ICC to discontinue the investigation, stating that “after further consideration of the competitive conditions existing in Carolina territory they [the railroads] are convinced that the volume and multiple-ear rate reductions on fine coal presently in effect but under investigation are warranted.” It was after this that plaintiff, North Carolina Natural Gas, claiming to be adversely affected by the February 25, 1960 action of the Commission, on September 23, 1960 filed with the ICC a motion to expunge the filed Tariffs and to terminate the proceedings in Docket No. 33360 as to the Tariffs and rates contained therein. ICC, Division 2, by order on January
10,1961, denied plaintiff’s motion holding “The matters submitted in support thereof do not constitute substantial and material grounds to warrant granting said Motion;” and the ICC ordered “that said Motion be, and it is hereby overruled.” Then by an order of April 27, 1961, issued May 4, 1961, the ICC denied plaintiff’s Petition for Reconsideration “for the reason that upon consideration of the decisions of this Commission in Coal from Kentucky, Virginia and West Vir-gina, to Virginia, 308 ICC 99, and Coal to New York Harbor Area, 311 ICC 355, sufficient and material grounds have not been presented to warrant a conclusion,
without hearing,
that the Tariffs assailed herein are unlawful
per se.”
(Emphasis added.)
Plaintiff seeks an injunction against the alleged unlawful agreed upon reduced rail transportation Tariffs and rates which, plaintiff avers, irreparably injures and will continue to injure it unless such Tariffs are restrained. Unless the in-junctive process issues, plaintiff further avers, a designed purpose of the coal producers, rail carriers and coal consuming electric power companies will be accomplished, and plaintiff’s continued sale of natural gas to Carolina Power and Light Company, for example, will not be made because such sales will thus have been rendered uneconomical. Certain other parties (Louisville & Nashville Railroad Company, Clinchfield Railroad Company, Southern Railway Company, The Cincinnati, New Orleans and Texas Railway Company, Interstate Railroad Company, Carolina Power and Light Company, Property Owners Committee and Association of Coal Mine Operators, and others) were allowed to appear and intervene in the case at bar.
Plaintiff’s arguments for equitable relief are cast in the orthodox mold, viz.: irreparable harm will result from the ICC orders; the sought injunction will cause no injury or damage to others; continued effectiveness of the filed Tariffs and rates will cause sales of natural gas to Carolina Power and Light Company to be uneconomical to plaintiff and destroy contractual arrangements entered by that company with plaintiff, with the resultant destruction of plaintiff as a competitor; and, finally, permitting the Tariffs to remain effective “is not in the public interest.” In addition, plaintiff argues 1. it has no adequate remedy at law, and 2. it has exhausted its administrative remedies.
Plaintiff argues the reduced rates contained in the filed Tariffs are in violation of § 2 of the Interstate Commerce Act, 49 U.S.C.A. § 2; the law prior to and independent of the Act, and the law subsequent to the Act, require all shippers and consignees to be charged an equal rate; the ICC itself has held volume rates unlawful; and that the agreed upon volume reduced rates in SFTB Tariff 903, SFA ICC S-96 and SFTB Tariff 903-A, SFA ICC S-133 are, in addition, in violation of the Elkins Act, 49 U.S. C.A. § 41(1). The ICC and the Inter-venors resist the issuance of an injunction and have moved to dismiss the complaint because of 1. failure to exhaust administrative remedies; 2. lack of standing to sue; and 3. lack of jurisdiction of this court to give the remedy sought in the complaint.
1. The sole issue before the court is whether the present record, consisting mainly of the proceedings before the ICC, justifies utilization of the in-junctive process. An examination has been had of the record before the ICC. The Interstate Commerce Act provides two methods of challenging the lawfulness of carrier-made rates: 1. said carrier rates may be attacked by filing a formal complaint with the ICC under 49 U.S.C.A. § 13(1); or 2. the Commission on its own motion, with or without a complaint, may investigate carrier-made rates under 49 U.S.C.A. § 15 (7).
Regardless of which procedural path is followed — §§ 13(1) or 15(7) of the Act— the Commission cannot enter any orders as to challenged rates unless it follows the mandate of § 15(1) of the Act which requires a
full
hearing.
For example, (a) before the ICC may find the challenged rates produce unjust and unreasonable charges in violation of § 1(5) of the Act; or (b) the rates violate § 1(6); or (c) the rates produce unjust discrimination contrary to §§ 2 and 3; or (d) violate the tariff publishing provisions of § 6(1), the Commission pursuant to § 15(1) of the Act must conduct a
full hearing.
2. The Commission has no power to do what plaintiff wants done, i. e., to make a summary finding that the rates, involved here, are unlawful per se and require cancellation. Plaintiff must follow the statutory scheme under § 13 (1) of the Act if the lawfulness of the March 1, 1960 rates are to be challenged.
Recently this Court in Luckenbach Steamship Company v. United States and Interstate Commerce Commission, D.C. Del., 179 F.Supp. 605 (Biggs, C. J., Wright and Rodney, D. J.) had occasion to review an initial rate proceeding before the ICC. The Court held the initial proceedings before the ICC had not made any determination as to the lawfulness of the rates per se; consequently, these were discretionary matters interlocutory in nature against which the plaintiff there had not exercised its further administrative remedies, and, therefore, the orders of the ICC were not subject to review by the Court.
In the case at bar, the rail carriers filed their rates (Tariffs) to become effective on March 1, 1960. As stated before, on February 25, 1960, the ICC entered an order of investigation into the lawfulness of the rates, but did not suspend the rates. They became effective on March 1, 1960 and have, in fact, been in effect for over a year and a half. On September 23, 1960 plaintiff for the first time appeared before the ICC and sought a declaration that the rates were unlawful and should be expunged. Plaintiff argued before the ICC that if the rates were unlawful, no hearing was required by the Commission to have them cancelled. On December 29, 1960 the ICC denied plaintiff’s motion; on February 2, 1961 plaintiff filed a petition for reconsideration, to which the rail carriers, the Property Owners Committee, et ah, replied. These and all other parties to the proceedings before the ICC (their No. 33360), except plaintiff here, filed a petition for discontinuance of the investigation. On Api’il 27,1961 the ICC denied plaintiff’s petition for reconsideration, and on June 16, 1961 it entered an order discontinuing the proceeding.
There has never been a formal hearing before the Commission to determine the reasonableness of the rates. There is no final order of the ICC before this Court which adjudicates either the rights of all the parties or the lawfulness of the rates.
Manifestly this Court cannot do what the ICC could not do — reject or expunge the rates. Even if the rates were unlawful, still they are published rates.
§ 6(6) of the Interstate Commerce Act, 49 U.S.C.A. § 6(6), deals with the filing of rates and tariffs with the ICC. The power given to the ICC to reject rates is specific, but limited. In brief, § 6(6) provides the schedules required shall be published, filed and posted in such form and manner as the ICC shall by regulation provide. The power to reject any schedule of rates is found in § 6(9) This is procedural regulation, as distinct from establishing a procedure to determine the substantive unlawfulness of the rates
per se.
As stated, the question of cancellation of rates is controlled by § 15(1) of the Act which provides for a “full hearing.” This means the ICC has no power to fix rates and no power to reject a rate without a hearing. Atchison, Topeka & Santa Fe Railway Company v. U. S., 232 U.S. 199, 221, 34 S.Ct. 291, 58 L.Ed. 568; Minnesota Rate Cases (Simpson etc. v. Shepard), 230 U.S. 352, 433, 33 S.Ct. 729, 57 L.Ed. 1511; Board of Trade of Kansas City v. U. S., 314 U.S. 534, 546-8, 62 S.Ct. 366, 86 L.Ed. 432; Federal Power Commission v. Pacific etc. Company, 307 U.S. 156, 160, 59 S.Ct. 766, 83 L.Ed. 1180. Likewise, the Federal District Courts cannot fix rates, nor relieve from refusal of the ICC to fix rates when there has been no full hearing before the administrative body.
In National Water Carriers Ass’n v. United States, S.D.N.Y., 126 F.Supp. 87, 90, Judge Swann held:
“We also lack jurisdiction to grant the other form of relief asked by the plaintiffs, namely, to direct the Commission to enter an order declaring • unlawful the rates embodied in the supplemental tariff effective August 1, 1954. The plaintiffs’ ‘Protest and Petition’ filed with the Commission on July 21, 1954 asked for ‘summary rejection and elimination’ of the proposed rates or, in the alternative, for suspension of them pending investigation of their lawfulness. The granting or denial of suspension of a proposed rate is discretionary with the Commission, 49 U.S.C.A. § 15 (7), and its refusal to suspend a rate is not judicially reviewable. Carlsen v. United States, D.C.S.D.N.Y., 107 F.Supp. 398. After denial of suspension the plaintiffs might have filed a formal complaint attacking the rates which went into effect on August 1st. They may still do so and the Commission must grant them a hearing. 49 U.S.C.A. §§ 13 (1), 15. Doubtless the Commission might have treated the plaintiffs’ ‘Protest’ as a formal complaint and set the matter down for hearing, but it did not see fit to do so. This was an exercise of discretion with which we may not interfere. Nor are we asked to. What the plaintiffs ask is that the court declare the rates unlawful without waiting for the Commission to have a hearing and render an opinion as to their legality. This we may not do. The present application to the court is premature. The plaintiffs still have their administrative remedy of attacking the rates by formal complaint.”
This is a good statement of the rule that the judicial function does not entitle one to judicial relief until the prescribed administrative remedy has been exhausted.
3. Plaintiff’s status here lacks legal definition. It describes itself as a public utility engaged in the distribution and sale of natural gas. It is neither a shipper, a consignee of coal, nor a competitive carrier under the Act, directly affected by the reduced rates of rail carriers. Its relation to the rates filed by the rail carriers is, at best, oblique. Plaintiff’s actual pinch of injury comes from its contracts with its power company customers to supply natural gas. The contracting parties chose to establish their original rates on the level of coal rates
It would appear plaintiff-is a too distant party who lacks standing to maintain the instant action.
The fact
plaintiff was an intervenor in the administrative proceeding before the Commission does not of itself grant it the requisite “interest” to institute the present action in the district court.
4. The ICC and the intervenors also argue the complaint in the case at bar fails to set forth a cause of action for which the present court has jurisdiction to afford a remedy. The sought mandatory injunction is in the nature of a mandamus order directing the ICC to perform a discretionary act. Such an order ordinarily will not lie against such an agency.
Panama Canal Co. v. Grace Line, Inc., 356 U.S. 309, 318, 78 S.Ct. 752,
2
L.Ed.2d 788, recently reaffirmed this principle.
A district court does not exercise an administrative function.
Where there is discrimina -
tion, it is for the Commission to find it and to determine whether the discrimination is unlawful.
The Commission in the instant proceeding by its order of April 27, 1961
stated its action was without prejudice to the right of plaintiff, here, to challenge the lawfulness of the involved rates in a proceeding' in accordance with § 13 of the Act and the Commission’s General Rules of Practice.
For each, and all, of the four reasons discussed, supra, the motions of defendants and intervenors to dismiss the complaint should be granted.