Arrow Transportation Company v. Southern Railway Company/Dissent Clark

by Tom C. Clark

United States Supreme Court

372 U.S. 658

Arrow Transportation Company  v.  Southern Railway Company

 Argued: Jan. 10, 1963. --- Decided: April 15, 1963

Mr. Justice CLARK, with whom THE CHIEF JUSTICE and Mr. Justice BLACK join, dissenting.

The Court by its action today sounds the death knell for barge transportation on the Tennessee River. The war of extermination between the railroads and barge lines began years ago, and, as Chairman Eastman said in Petroleum Products From New Orleans, La., Group, 194 I.C.C. 31, 44 (1933), has been effected 'by (the railroads) cutting rates where the (barge) competition existed, to whatever extent was necessary to paralyze it, at the same time maintaining rates at a very high level elsewhere.' Indeed, this Court has on many occasions had to protect barge lines from such unlawful practices, even in cases where railroad rate activity has received approval of the Interstate Commerce Commission. See Dixie Carriers, Inc. v. United States, 351 U.S. 56, 76 S.Ct. 578, 100 L.Ed. 934 (1956), and Interstate Commerce Comm'n v. Mechling, 330 U.S. 567, 67 S.Ct. 894, 91 L.Ed. 1102 (1947). See also Arrow Transp. Co. v. United States, 176 F.Supp. 411 (D.C.N.D.Ala.1959). And just a few months ago there was filed here in No. 746, Mechling Barge Lines, Inc., v. United States, another case in which the appellants contend that the same old practices were employed. Although the Court admits that 'It cannot be said that the legislative history * * * (of the suspension power of the Commission, § 15(7)) includes unambiguous evidence of a design to extinguish * * * judicial power * * *,' it nevertheless strips the courts of any power to prevent (1) the collection by the railroads of 'rates and charges * * * which would be unjust and unreasonable, in violation of the Interstate Commerce Act, and constitute unfair and destructive competitive practices in contravention of the National Transportation Policy * * *' as found by the Interstate Commerce Commission; ^[1] (2) the frustration of the National Transportation Policy under which Congress has commanded the Commission to preserve each medium of transportation against unlawful and destructive practices and to guard against the consequences of discrimination; (3) the complete destruction of competing barge lines as well as gross discrimination against shippers and localities along the Tennessee River. I agree with the United States, which has filed at our suggestion an amicus curiae brief, that where 'a competing carrier will be destroyed and others will suffer gross discrimination and injury before the administrative proceeding is terminated,' the appropriate federal court does have the power to enjoin such an extraordinary injury pending decision of the Commission.

The conclusions below that the proposed rate reductions will likely force the barge line out of business are not disputed. As the District Court found, there was 'grave danger that irreparable injury, loss or damage may be inflicted * * * if the proposed rates go into effect' and that petitioners 'will have no adequate remedy at law.' On its face the rate reduction is but a continuation of the old policy found by Chairman Eastman to paralyze barge operations-activity to which the Court now gives its blessing-by a drastic reduction in the present all-rail rate on multiple-car grain shipments while maintaining the higher rate on the exbarge traffic. The new rate for the haul from St. Louis to Birmingham, reduced from $8.70 per ton to a mere $3.12, is an example which illustrates the effect of the proposed rate reduction. Arrow's present rate for shipments between those points is $5.48, including expense to Arrow of $2.20 for the 71-mile rail leg from Guntersville, Alabama, to Birmingham and 89¢ for transferring the grain from the barge to the rails at Guntersville, which leaves it only $2.39 for transportation by barge. In order to meet Southern's new rate Arrow would have to reduce by $2.36 its charge allocable to water travel, which would leave it exactly 3¢ per ton for that haul. I note further that the all-rail rate for the St. Louis-Birmingham haul is only 92¢ more than the charge to Arrow for the 71-mile Guntersville-Birmingham rail trip. The result of the effectuation of such drastic reductions is elementary-economic destruction of an important mode of transportation. Still the Court refuses to allow the exercise of an inherent equity power to prevent an unconscionably destructive practice which is damaging not only to Arrow, or to barge lines generally, or to water shippers or river ports, or to industries, but to the public welfare itself-all of this by inference. The Court says 'that Congress meant to foreclose a judicial power to interfere with the timing of rate changes * * * out of harmony with the uniformity of rate levels * * *.' That reasoning, in the light of the fact that many of the proposed new rates are less than 40% of existing ones, coupled with the findings of the Commission and the District Court as to the probable result of this drastic action, is, with due deference, entirely insupportable.

The Court seems to say that because Congress, by § 15(7), gave the Commission the power in its discretion to suspend rates for a short period, a power which it never previously had, it ipso facto foreclosed the federal courts from exercising a power they had always possessed, i.e., equity jurisdiction to preserve the status quo and prevent irreparable injury. The two powers are of an entirely different character. The suspension power granted the Commission under § 15(7) is primary and is exercised in its discretion while the validity of a proposed rate is under consideration, but it is limited under present law to a period of seven months. No criteria or guidelines are laid down for the Commission, the only prerequisite being the filing of 'a statement in writing of its reasons for such suspension.' Hence the Commission has a broad, general discretion to suspend proposed rates for a limited period pending investigation. The court, on the other hand, can act only in compelling circumstances to prevent an irreparable injury and to maintain the status quo pending the Commission's decision-an equitable power long recognized as existing in the courts. The exercise of these judicial powers is but in aid of and ancillary to the temporary suspension power of the Commission and supports rather than interferes with the latter's jurisdiction, preventing irreparable injury from resulting while the Commission has the matter under consideration. Indeed, this power should be exercised only in the most exigent circumstances, such as in the present case, where the Commission has found a strong likelihood of irreparable injury resulting from effectuation of proposed rates, has in fact exercised the full measure of its suspension power and now finds itself powerless to prevent those rates from going into effect. I submit that neither the language of § 15(7) nor its legislative history supports the removal of judicial power to act in such circumstances.

Prior to 1910 the Commission had the power neither to suspend proposed rates nor 'to prevent by direct action excessively low rates,' Skinner & Eddy Corp. v. United States, 249 U.S. 557, 566, 39 S.Ct. 375, 379, 63 L.Ed. 772 (1919), and its earliest suspensions of proposed rate reductions occurred subsequent to 1910. See Suspension of Rates on Packinghouse Products, 21 I.C.C. 68 (1911); Board of Trade of Chicago v. Illinois Central R. Co., 26 I.C.C. 545 (1913). It was not until 1920 that the Commission was given power to exercise direct action and prescribe minimum rates. Transportation Act of 1920, 41 Stat. 484, 49 U.S.C. § 15(2); see United States v. Illinois Central R. Co., 263 U.S. 515, 525, 44 S.Ct. 189, 193, 68 L.Ed. 417 (1924). At the time of the enactment of § 15(7), as the legislative history shows, there was no evident concern with rate decreases and protection of competing carriers, but attention was focused on the protection of shippers from excessive rate increases with which the Commission had ample power to deal, though it could not at that time suspend rates. ^[2] This omission was noted on the floor of the Senate on the day before the vote was taken on § 15(7) when Senator Heyburn observed that 'Little or no consideration seems to have been given to the advisability of including decreases in rates under the amendment.' 45 Cong. Rec. 6792. There is no evidence that complaints as to rate reductions occupied any significant portion of the Commission's docket prior to 1910. Prior to that time the Commission was concerned almost exclusively with shippers' complaints of rate increases. It is hard for me to see, therefore, how it could be said that Congress, when it first enacted the suspension power in 1910, was faced with the problem of the suspension of rate decreases as between competing carriers when there had apparently been very few, if indeed any, such complaints previous to 1910. The Court says that prior to enactment of the suspension power in 1910, 'such courts as entertained jurisdiction' in rate cases 'were reaching diverse results' and producing 'confusion and * * * competitive inequities,' but those cases, as far as can be determined, did not involve unjust and destructively low rates. Therefore, while there were, as the Court points out, '(c)onflicts * * * between competing carriers' prior to 1910, there is no indication that any of these cases involved reductions in rates. Finally, a suspension power similar to the 'judicial power' which the Court says brought 'the whole problem to a head' is now, by statute, exercised by the Commission for a limited period as a matter of primary jurisdiction-a power quite different from that which the District Court was asked to exercise here. A simple grant of jurisdiction to an administrative agency without reference to a long-recognized equity jurisdiction which is not inconsistent therewith is a strange way to dispose of judicial power. See Hewitt-Robins, Inc. v. Eastern Freight-Ways, Inc., 371 U.S. 84, 83 S.Ct. 157, 9 L.Ed.2d 142 (1962). I attribute no such purblindness to Congress.

It can hardly be said that the granting of this primary jurisdiction with power to suspend for seven months totally ousted the equity courts of their traditional power to grant injunctive relief to preserve the status quo and prevent irreparable injury while the case is in progress in another forum. The cases do not support this conclusion where the other forum is either a court of law, Erhardt v. Boaro, 113 U.S. 537, 5 S.Ct. 565, 28 L.Ed. 1116 (1885); Louisville & N.R. Co. v. Western Union Telegraph Co., 207 F. 1 (C.A.6th Cir., 1913), or an administrative agency. Trans-Pacific Freight Conf. of Japan v. Federal Maritime Bd., 112 U.S.App.D.C. 290, 295, 302 F.2d 875, 880 (1962); Board of Governors, etc. v. Transamerica Corp., 184 F.2d 311 (C.A.9th Cir., 1950); West India Fruit & Steamship Co. v. Seatrain Lines, 170 F.2d 775 (C.A.2d Cir., 1948); Isbrandtsen v. United States, 81 F.Supp. 544 (D.C.S.D.N.Y.1948). Moreover, whenever Congress wanted to oust the jurisdiction of the courts it not only knew how to do it but did so in no uncertain terms. See, e.g., Internal Revenue Code of 1954, § 7421; Norris-LaGuardia Act, 29 U.S.C. §§ 101-115. In addition to these considerations, I submit that the Interstate Commerce Act itself supports the conclusion that the courts retained their traditional jurisdiction. Section 22(1) of the Act, 24 Stat. 387, 49 U.S.C. § 22(1), provides that no provision of the Act shall 'in any way abridge or alter the remedies now existing at common law or by statute, but the provisions of this act are in addition to such remedies.' The 'remedies now existing at common law' include such equitable remedies as injunctions. Knapp, Stout & Co. v. McCaffrey, 177 U.S. 638, 20 S.Ct. 824, 44 L.Ed. 921 (1900).

Finally, in 1940, the Congress adopted the National Transportation Policy (54 Stat. 899, 49 U.S.C. preceding § 1) in which it enjoined the Commission to 'foster sound economic conditions in transportation and among the several carriers; * * * encourage the establishment and maintenance of reasonable charges for transportation services, without unjust discriminations * * * or unfair or destructive competitive practices; * * * all to the end of developing, coordinating, and preserving a national transportation system by water, highway, and rail, as well as other means, adequate to meet the needs of the commerce of the United States * * *. All of the provisions of (the Interstate Commerce Act) shall be administered and enforced with a view to carrying out the above declaration of policy.'

The policy of 'developing, coordinating, and preserving a national transportation system by water, highway, and rail * * * adequate to meet the needs of the commerce of the United States' (emphasis supplied) will be completely thwarted if Arrow and other barge lines on the Tennessee River are forced out of business. It is, indeed, a sad day for our judicial processes when our courts are rendered powerless to prevent this miscarriage of the clear policy of our Government, the frustration of the admitted duties of the Interstate Commerce Commission and the destruction of an entire system of transportation.

In short, this case presents a situation peculiarly appropriate for the exercise of the inherent equity jurisdiction of a federal court to supplement the now-exhausted suspension power of the Commission, consistent with the Commission's conclusion that such suspension is in the public interest and consistent with the affirmative mandate of the Congress in the National Transportation Policy.

In addition, while it would be inappropriate to discuss the constitutional questions raised as to § 15(7), the opinion of the Court evokes grave doubt about the constitutionality of the statute, as interpreted. See Porter v. Investors' Syndicate, 286 U.S. 461, 470-471, 52 S.Ct. 617, 620, 76 L.Ed. 1226 (1932); Pacific Tel. & Tel. Co. v. Kuykendall, 265 U.S. 196, 201, 204-205, 44 S.Ct. 553, 556, 68 L.Ed. 975 (1924).

I dissent.

Notes

1. We note that on January 21, 1963, while the case was pending here, the Division of the Commission which had previously considered the case concluded that some of the rates proposed by Southern were lawful but still found most (88%) of the entire rate package of all of the railroads unlawful. Even this finding, however, is not final, for it is subject to and is in fact pending reconsideration before the full Commission.
2. In 1910 Congress enacted § 4(2) of the Act, the provisions of which evidence an awareness that railroad rate reductions could be destructive competitive practices, see Skinner & Eddy Corp. v. United States, 249 U.S. 557, 566-567, 39 S.Ct. 375, 378-379, 63 L.Ed. 772 (1919), but § 4(2) clearly does not prohibit such practices. Not until the Transportation Act of 1920, as we have noted, was the Commission given the power to prescribe minimum rates.