SOBELOFF, Circuit Judge:
We are confronted in this appeal with an important question of administrative law concerning the procedure by which a dissatisfied carrier may challenge the validity of a regulation of the Interstate Commerce Commission. The District Court granted the defendant Southern Railway Company’s motion for summary judgment in the action brought by the United States to enforce statutory penalties for violation of car service orders issued by the Commission.
The basic issue is whether by invalidating the order in question the District Court exceeded its jurisdiction.
On November 7,1963, Division 3 of the Commission, finding that an acute shortage of freight cars existed throughout the country and that unjustifiable delays in the placement and removal of available cars were impairing effective utilization of freight car capacity, declared that an “emergency” existed and published Car Service Order No. 947. The order sought to increase the efficiency of commercial rail transportation by requiring that cars be positioned for unloading on consignees’ tracks within a specified time after their arrival at the carrier’s yards; empty or newly loaded cars had to be removed within an equivalent period.
A
copy of the order, which was to become effective four days later, was served on the Association of American Railroads as agent for most of the nation’s railways, including Southern.
The Commission’s customary practice is to issue rules and regulations after a hearing at which interested carriers may present their views. It is authorized, however, by section 1(15) of the Interstate Commerce Act, 49 U.S.C. § 1(15), to dispense with a preliminary hearing whenever it is of the “opinion that * * [an] emergency requiring immediate action exists * *
In this instance the Commission, in view of its finding of
emergency, proceeded under Section 1 (15). The Act nevertheless permits an affected carrier to file a petition for “rehearing, reargument or reconsideration” in advance of the effective date of the order, and this automatically stays implementation of the Commission’s order until it has ruled on the petition.
Southern failed to avail itself of this option and did not contest the order’s validity until the commencement of the present action.
The government’s complaint alleged that between January 23, 1964 and February 24, 1964 Southern violated the order on twenty separate occasions by failing to observe the prescribed time limits at its Greenville, South Carolina yard. Demand was made for the imposition of the maximum $500.00 fine for each violation. Southern admitted noncompliance with the time limits, but insisted that standing alone these defaults were insufficient to create liability. Its position was that the order should not be interpreted to subject it to liability without fault, and that all but one of the delays in car placement and removal were occasioned by two train derailments, one in the Greenville yard and the other several miles north of the yard, making compliance impracticable.
Southern’s version of the circumstances surrounding the alleged violations is as follows. The derailments severely disrupted normal operations at the Green-ville Yard from January 28, 1964 to March 1,1964. Throughout this period it concentrated on clearing and repairing damaged tracks and insuring the uninterrupted flow of through traffic. Implementation of this policy required committing almost all of its equipment, and it was unable to use switch engines to transfer freight cars to and from the various sidings. Diverting men and machinery necessary to achieve compliance with the order would, it asserted, have created a bottleneck at the yard and would have seriously dislocated rail traffic along the Eastern seaboard. Viewing its course of conduct as the most expeditious method of keeping cars in service, Southern argued that it had acted consistently with the broad underlying purpose of the order.
Southern further contended that the order was invalid because no “emergency” existed justifying disregard of the notice and hearing requirements of section 1 (14).
It asserted that the nationwide freight car shortage which prompted issuance of the order had existed since 1955 and that the Commission was aware of it from that time.
The railroad also maintained that by employing the term “directions” in section 1(15), as contrasted with the phrase “rules, regulations and practices” in section 1(14), Congress contemplated a limited order designed to deal with specific, non-recurring problems, for example, isolated car shortages in a confined geographic area, and did not authorize the Commission to promulgate broad, semi-permanent regulations without affording a full preliminary hearing.
The United States moved for summary judgment based on the triple-pronged contention (1) that the pleadings raised no genuine issues as to any material fact,
(2) that Southern could not challenge the validity of the order in enforcement proceedings, and (3) that, in any event, the order was valid. Southern responded with a cross-motion for summary judgment, to which it appended the affidavit of General Yardmaster Caldwell of the Greenville Yard setting forth the actions taken by Southern in response to the derailments and stating his conclusion that they were “the most expeditious way to keep cars in service.” Southern’s thrust was met by a government parry in a counter-affidavit by Commission agent Crosby, who was responsible for policing Southern’s operations at the yard. Crosby stated that the effects of the derailments did not render compliance with the time limits either impossible or unreasonable. The District Court ruled that the Commission’s order was open to attack and granted Southern’s motion, holding that the order, which it characterized as a “sweeping pronouncement,” was entirely inconsistent with the concept of emergency “directions,”
and that it “sought to deal with a chronic problem, not an emergency.”
Alternatively, the court held that Southern had not violated the order.
I.
We think that the District Judge erred in entertaining Southern’s challenge to the validity of the order. In our view the statutory provisions governing review of Commission orders, set forth in the margin,
were intended to confine the presentation of such challenges to a specially convened three-judge district court after the carrier has filed, and the Commission has ruled upon, a petition for “rehearing, reargument or reconsideration.”
This was the conclusion of the Fifth Circuit in United States v. Southern Ry., 364 F.2d 86
Free access — add to your briefcase to read the full text and ask questions with AI
SOBELOFF, Circuit Judge:
We are confronted in this appeal with an important question of administrative law concerning the procedure by which a dissatisfied carrier may challenge the validity of a regulation of the Interstate Commerce Commission. The District Court granted the defendant Southern Railway Company’s motion for summary judgment in the action brought by the United States to enforce statutory penalties for violation of car service orders issued by the Commission.
The basic issue is whether by invalidating the order in question the District Court exceeded its jurisdiction.
On November 7,1963, Division 3 of the Commission, finding that an acute shortage of freight cars existed throughout the country and that unjustifiable delays in the placement and removal of available cars were impairing effective utilization of freight car capacity, declared that an “emergency” existed and published Car Service Order No. 947. The order sought to increase the efficiency of commercial rail transportation by requiring that cars be positioned for unloading on consignees’ tracks within a specified time after their arrival at the carrier’s yards; empty or newly loaded cars had to be removed within an equivalent period.
A
copy of the order, which was to become effective four days later, was served on the Association of American Railroads as agent for most of the nation’s railways, including Southern.
The Commission’s customary practice is to issue rules and regulations after a hearing at which interested carriers may present their views. It is authorized, however, by section 1(15) of the Interstate Commerce Act, 49 U.S.C. § 1(15), to dispense with a preliminary hearing whenever it is of the “opinion that * * [an] emergency requiring immediate action exists * *
In this instance the Commission, in view of its finding of
emergency, proceeded under Section 1 (15). The Act nevertheless permits an affected carrier to file a petition for “rehearing, reargument or reconsideration” in advance of the effective date of the order, and this automatically stays implementation of the Commission’s order until it has ruled on the petition.
Southern failed to avail itself of this option and did not contest the order’s validity until the commencement of the present action.
The government’s complaint alleged that between January 23, 1964 and February 24, 1964 Southern violated the order on twenty separate occasions by failing to observe the prescribed time limits at its Greenville, South Carolina yard. Demand was made for the imposition of the maximum $500.00 fine for each violation. Southern admitted noncompliance with the time limits, but insisted that standing alone these defaults were insufficient to create liability. Its position was that the order should not be interpreted to subject it to liability without fault, and that all but one of the delays in car placement and removal were occasioned by two train derailments, one in the Greenville yard and the other several miles north of the yard, making compliance impracticable.
Southern’s version of the circumstances surrounding the alleged violations is as follows. The derailments severely disrupted normal operations at the Green-ville Yard from January 28, 1964 to March 1,1964. Throughout this period it concentrated on clearing and repairing damaged tracks and insuring the uninterrupted flow of through traffic. Implementation of this policy required committing almost all of its equipment, and it was unable to use switch engines to transfer freight cars to and from the various sidings. Diverting men and machinery necessary to achieve compliance with the order would, it asserted, have created a bottleneck at the yard and would have seriously dislocated rail traffic along the Eastern seaboard. Viewing its course of conduct as the most expeditious method of keeping cars in service, Southern argued that it had acted consistently with the broad underlying purpose of the order.
Southern further contended that the order was invalid because no “emergency” existed justifying disregard of the notice and hearing requirements of section 1 (14).
It asserted that the nationwide freight car shortage which prompted issuance of the order had existed since 1955 and that the Commission was aware of it from that time.
The railroad also maintained that by employing the term “directions” in section 1(15), as contrasted with the phrase “rules, regulations and practices” in section 1(14), Congress contemplated a limited order designed to deal with specific, non-recurring problems, for example, isolated car shortages in a confined geographic area, and did not authorize the Commission to promulgate broad, semi-permanent regulations without affording a full preliminary hearing.
The United States moved for summary judgment based on the triple-pronged contention (1) that the pleadings raised no genuine issues as to any material fact,
(2) that Southern could not challenge the validity of the order in enforcement proceedings, and (3) that, in any event, the order was valid. Southern responded with a cross-motion for summary judgment, to which it appended the affidavit of General Yardmaster Caldwell of the Greenville Yard setting forth the actions taken by Southern in response to the derailments and stating his conclusion that they were “the most expeditious way to keep cars in service.” Southern’s thrust was met by a government parry in a counter-affidavit by Commission agent Crosby, who was responsible for policing Southern’s operations at the yard. Crosby stated that the effects of the derailments did not render compliance with the time limits either impossible or unreasonable. The District Court ruled that the Commission’s order was open to attack and granted Southern’s motion, holding that the order, which it characterized as a “sweeping pronouncement,” was entirely inconsistent with the concept of emergency “directions,”
and that it “sought to deal with a chronic problem, not an emergency.”
Alternatively, the court held that Southern had not violated the order.
I.
We think that the District Judge erred in entertaining Southern’s challenge to the validity of the order. In our view the statutory provisions governing review of Commission orders, set forth in the margin,
were intended to confine the presentation of such challenges to a specially convened three-judge district court after the carrier has filed, and the Commission has ruled upon, a petition for “rehearing, reargument or reconsideration.”
This was the conclusion of the Fifth Circuit in United States v. Southern Ry., 364 F.2d 86 (1966), where the attack was against Car Service Order No. 939, the predecessor of No. 947, and we express our approval of its reasoning and conclusions.
The posture of the Fifth Circuit case was identical to that of the instant case. There, as here, the United States appealed from a single district judge’s grant of the carrier’s motion for summary judgment based on the claimed invalidity of the Commission’s Service Order. Holding that the administrative and judicial review procedures elaborated by Congress are the exclusive avenues for
attack of Commission regulations, the Fifth Circuit stated:
“A long line of Supreme Court cases establishes the principle that where Congress has provided administrative and judicial review procedures which are designed to permit agency expertise to be brought to bear upon particular problems, the prescribed procedures are exclusive, and this is true even though Congress may not have expressly provided for the exclusiveness of the statutory procedure.” 364 F.2d at 91 (Citations omitted);
Underlying the Fifth Circuit’s decision is a recognition that the Commission has been entrusted by Congress with primary responsibility for the formulation of fair and effective rules to govern commercial rail transportation within the general framework of the Act. The purpose of sections 17(6) and 17(9)
is to enable the Commission, in light of specific criticism leveled by affected carriers, to reconsider and maturely reflect upon its order. This opportunity, which Southern would have us deny the Commission, is even more valuable, where, as here, the order has been issued pursuant to section 1(15), without notice and hearing, than where issued under section 1 (14). In the latter case, the Commission has had the benefit of a full airing of the pros and cons of its proposed course of action. Where the “emergency” nature of a section 1(15) proceeding makes a preliminary hearing impractical, the petition for reconsideration provides an ideal instrument for the Commission to explore objections of the railroads and to determine whether they are of sufficient substance to overcome the need for immediate action or to call for revision.
Even though a petition for reconsideration, if filed before the effective date of the order, has the effect of staying implementation pending further Commission action, this is by no means the equivalent of requiring a plenary hearing before issuance. Coming as it does after publication of the order, the petition is likely to be directed at its specific provisions and will undoubtedly focus either on their legality or on 'the deleterious effects apprehended from their implementation. On the other hand, hearings held prior to issuance, while often extremely valuable, are frequently seized upon as an opportunity to air general grievances, both real and fancied, entirely unrelated to the specific problem which generated the hearing and proposed order. Such hearings tend to become protracted and the records correspondingly grow in volume. In the context of an “emergency requiring immediate action,” the predicate of a section 1(15) proceeding, these drawbacks are magnified and the desirability of a petition for reconsideration, rather than an initial plenary hearing, becomes more apparent.
The District Court discussed at some length the cases of Flemming v. Nestor, 363 U.S. 603, 80 S.Ct. 1367, 4 L.Ed.2d 1435 (1960) and Kennedy v. Mendoza-Martinez, 372 U.S. 144, 83 S.Ct. 554, 9 L.Ed.2d 644 (1963), but we find nothing in them that militates against our conclusion. Both turned on an interpretation of 28 U.S.C. § 2282, which requires the convening of a three-judge court in an action to declare an act of Congress unconstitutional and to enjoin its enforcement. The rule emerging from the opinions is that where a judgment in favor of the plaintiff would not enjoin operation of the statute a single district judge may properly decide the case.
As Southern’s attack is aimed at the specific order, and not the statutory provisions themselves, the District Court thought these holdings persuasive with respect to the proper interpretation of section 2325. The policy underlying section 2282, however, preventing a single district judge from declaring an entire federal program unconstitutional and enjoining its operation pending further review, is entirely unrelated to the purpose of sections 17(6) and 17(9), the establishment of an integrated administrative and judicial procedure channeling attacks on Commission orders. We think that the judicial gloss on section 2282 is not controlling here.
II.
Because we hold that the District Court was without authority to consider the challenge to the merits of the order, we need not resolve the question of the order’s validity.
We are, however, called
upon to decide whether the court was correct in holding, on a motion for summary judgment, that Southern did not violate the order.
The District Court, assuming that the order was not intended to impose absolute liability, stated that “the derailment at the Greenville yard was directly responsible for all but one of the cited failures to meet the time requirements of Service Order 947 * * This assumption, coupled with the conclusory assertion culled from the affidavit supplied by the railroad, is the sole predicate for the summary judgment in Southern’s favor.
After carefully reading the opposing affidavits and thoroughly reviewing the entire record, we conclude that summary judgment in favor of neither party was appropriate, with the single exception of the violation charged in count 15. This count involved a delay in car removal that matured into a violation of the order before occurrence of either of the derailments upon which Southern relies to excuse its failure to comply.
As to this count, the United States is therefore entitled to summary judgment.
We agree with the District Court that the controlling legal question as to the remaining 19 counts is whether there existed reasonable grounds for Southern’s non-observance of the time limits. The United States apparently concurs in this formulation of the issue, for in this court it has conceded that the order was not meant to impose absolute liability regardless of circumstances. Taking this as the touchstone, we do not find the opposing affidavits sufficiently comprehensive and detailed to warrant disposition on summary judgment. The Crosby affidavit, upon which the United States relies, is the more particularized, yet it fails to demonstrate conclusively that Southern’s delays in car placement and removal were not justified in the existing conditions. The thrust of the affidavit is that Southern physically
could
have complied with the order, but it fails to show that, despite the derailments, it
should
have complied.
On the other hand, the Caldwell affidavit relied upon by Southern is much too general to justify a legal holding that Southern was
forced
to choose between compliance with the order and maintaining the flow of through traffic. Conceivably Southern could have accomplished both objectives, and the Caldwell affidavit does not dispel this factual hypothesis. There are unresolved genuine issues of material fact and, with the exception of count 15, amplification of the record, whether by additional affidavits or full trial, is necessary before an informed legal judgment may be made.
Reversed and remanded with instructions.