MEMORANDUM
ON JURISDICTION OF COURTS
WITH RESPECT TO ORDERS OF THE
INTERSTATE COMMERCE COMMISSION
The Interstate Commerce Commission is an ad¬
ministrative body to which has been confided cer¬
tain powers with respect to interstate coimnerce;
its duties are judicial and quasi-judicial, legisla¬
tive, ministerial and administrative.
In performing these duties the Commission
makes and enters certain orders and requirements ;
these usually follow hearings either upon com¬
plaint or in general investigations, which are by
law authorized. Orders in form are either: (a)
those granting relief, requiring a carrier to cease
and desist from charging a particular rate or con¬
tinuing to enforce a particular practice and pre-
JOHN B. DAISH, A. B., LLM.
OUTLINE
la
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scribing another and less rate or different practice ;
or (b) one denying relief, as dismissing a formal
complaint in which has been alleged the imreason-
ableness of a rate or practice.
Prior to the act of June 29, 1906, affirmative
orders of the Connnission were enforceable only in
a proceeding in the United States courts, brought
by the Connmssion or a party injured against the
carriers. This procedure is still in the statute, but
is not usually invoked, because by the act men¬
tioned the orders and requirements were made self-
executing, both in terms (it being provided within
what time they might be made effective) and the
failure to obey them probably subjects the offend¬
ing official to heavy penalties..
Appi'eciating that the Commission might err and
that the carriers are entitled under the Constitu¬
tion to an exercise of the Federal judicial power
the act of 1906 provided for the venue of suits
brought "to enjoin, set aside, annul, or suspend
any order or requirement of the Commission" and
in such courts as the venue fixed "jurisdiction to
hear and determine such suits is hereby vested."
By the act of 1910, this jurisdiction, along with
three other classes of cases, was transferred to the
Commei'ce Court, created by the act.
In the Commerce Court came to be filed cases to
enjoin, set aside, annul, and suspend orders of the
Commission, (a) which denied relief and dismissed
the complaint, and (b) which although granting
relief, did not give the complainant the measure of
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relief to which he thought himself entitled. That
the Commerce Court has no jurisdiction of contro¬
versies of these classes of cases was determined in
Procter and Gamble vs. U. S. ; opinion Supreme
Court, June 7, 1912.
lldaile Congress may within recognized limits
make the findings of fact and determinations of an
administrative official final, it has usually provided
by legislation for some measure of review, particu¬
larly if any of the duties are judicial or quasi-judi¬
cial. As to the Commission, its decisions against a
complaining shipper are now final, hut if against a
respondent carrier are proper subjects of judicial
re\dew. There is therefore a kind of presumption
that when deciding against a shipper the Commis¬
sion is right and when deciding against a carrier it
is wrong.
Manifestly in fairness jurisdiction should be
given to the courts to entertain petitions by ship¬
pers who have been denied relief by the Commis¬
sion. In order, however, to give to shippers a full,
adequate and complete remedy the power of courts
in such cases needs be different than when their
jurisdiction is invoked by one against whom an
affirmative order has been made. The power only
"to enjoin, set aside, annul, and suspend" an order
would be inadequate, for after the exercise of such
power the shipper would be exactly where he was
when he applied to the Commission. Within the
proper exercise of the judicial power in matters of
this nature the courts should have such authority
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as is fully adequate to meet the existing necessities
and requirements.
In a very similar case, the Congress has provided
that when one is aggrieved by the decision of an
administrative official in the exercise of judicial
and qnasi-judicial duties, he may invoke the power
of a designated court, which court can revise the
decision of the administrative officer appealed from
and which returns to the official a certificate of its
proceedings and decision to govern the further pro¬
ceedings in the case. The court marks out the law
as applied to the facts of a particular case, in so
far as judicial and quasi-judicial determination is
necessaiy ; beyond that (and mandamus to compel
the performance of a ministerial duty) he is free
from control by the courts. The act proffiding the
procedure set forth was enacted in 1870 and has
been held constitutional by the Snpreme Conrt.
If similar powers be conferred on courts respect¬
ing negative orders of the Interstate Commerce
Commission they would, it is respectfully sub¬
mitted, meet the present demands and necessities.
1. The Nature of the Interstate Commerce Com¬
mission.
Under the Act to Regulate Commerce, and in¬
dependent of certain duties and powers conferred
by other acts (such as safety appliance acts, hours
of service acts, etc.), the Interstate Commerce
Commission is bej^ond doubt an administrative
body to which has been confided certain power, an-
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tliority and jurisdiction over and in respect to in¬
terstate commerce and the carriers and instrumen¬
talities engaged in the transportation of property
therein.
It was created hy the act of February 4, 1887
(24 Stat. L., 379). This act has been amended
from time to time, the powers of the Commission
have been enlarged and its duties have been in¬
creased, both in nnmher and importance ; particu¬
larly was this accomplished hy the amendments of
June 29,1906, the so-called Hepburn Law (34 Stat.
L., 584).
Originally the Commission was subordinate to
one of the Executive Departments, reporting to the
Secretary of the Interior. After being so attached
for two years. Congress hy law required that the
Coimnission report direct to it. Since 1889 (25
Stat. L., 855), it has not been attached to any of
the three grand departments of the Glovernment.
The courts are not wholly harmonious in stating
the legal status of the Commission and the Commis¬
sion has never seen fit fully to describe itself. It
is, however, a body corporate with legal capacity to
he a party plaintiff or défendant in the Federal
courts (Texas and Pacific R. Co. vs. I. C. C., 162
U. S., 197).
Prior to the amendment to the act in 1906 the
Coimnission was called "an administrative hoard"
(C., N. O. & T. P. Ry. vs. I. C. C., 162 U. S., 184,
196) ; and "an administrative body" (I. C. C. vs.
C., N. O. & T. P. Ry., 167 U. S., 479, 510).
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"It [the Commission] is neither a Federal
court under the Constitution nor does it ex¬
ercise judicial powers nor do its conclusions
possess the efficacy of judicial proceedings."
K. & I. B. Co. vs. L. & N. R. Co., 37
Fed., 567.
Prior to the amendment of 1906 it was said to
exercise quasi-judicial powers (I. C. C. vs. C., N. O.
& T. P. Ry. Co., 76 Fed., 183; I. C. C. vs. C., N. O.
& T. P. R. Co., 64 Fed., 981 ; Texas & Pacific Ry. vs.
I. C. C., 162 U. S., 197 ; I. C. C. vs. C., N. O. & T. P.
R. R. Co., 167 U. S., 479 ; I. C. C. vs. L. & N. R. Co.,
73 Fed., 409).
& N. R. Co., 73 Fed., 409).
Since the Hepburn Law of 1906, by which the
powers of the Commission were increased, the
Commission has said :
"There is an analogy between the juris¬
diction of the Commission and that of a
court of equity."
R. Coin. vs. H. V. R. Co., 12 I. C. C.,
398.
And it has also referred to itself as follows:
"While its procedure is to some extent
judicial in nature, the Commission is essen¬
tially an administrative body."
M. & K. Shippers' Ass'n vs. M., K. &
T. Ry. Co., 12 I. C. C., 483, 484.
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2. The Duties of the Commission and a Consid¬
eration of the Nature Thereof.
The duties which the Coiumission is called upon
to perform are many and varied. To enumerate
them would serve no useful pm'pose at this time ;
for the present it will suffice to point out the fact
that the duties are properly divisible into several
classes according to their nature.
Certain duties are judicial or quasi-judicial, as
in determining whether or not a rate is reasonable ;
others are legislative, as in prescribing a rate for
the future. , ,
"It is one thing to inquire whether the
rates which have been charged and collected
are reasonable—that is a judicial act ; but an
entirely different thing to prescribe rates
which shall be charged in the future—that is
a legislative act. C.,M. & St. P. D.vs. Minne¬
sota, 134 U. S., 418, 458 ; Reagan vs. Farm¬
ers' L. & T. Co., 154 U. S., 362, 397 ; St. L. &
S. F. R. vs. Gill, 156 U. S., 649, 663 ; C., N. O.
& T. P. R. Co. vs. I. C. C., 162 U. S., 197, 216 ;
Munn vs. Illinois, 94 U. S., 113, 114; ilem-
phis & L. R. R. Co. vs. Sou. Exp. Co., 117
U. S., 1 I. C. C. vs. C., N. O. & T. P. R. Co.,
167 U. S., 479, 499.
Other duties, particularly those relating to the
interior management of the Commission, are
clearly administrative.
Still others are in part of one class and in part
another. The power and duty prescribed by sec¬
tion 12 to execute and enforce the provisions of the
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act were considered by tbe Supreme Court in I. 0.
C. vs. C., N. O. & T. P. R. Co., 167 U. S., 479, 501 :
' ' The power given is tbe power to execute
and enforce, not to legislate. Tbe power
given is partly judicial, partly executive and
administrative, but not legislative."
3. The Orders of the Interstate Commerce Com¬
mission.
In addition to tbe orders of tbe Commission re¬
specting tbe keeping of accounts, tbe form of re¬
ports of carriers and general orders of like kind,
tbe Commission makes and enters orders in formal
cases; tbese orders close (subject to petition for re-
bearing) tbe controversy and proceedings before
tbe Coimnission and are analogous to final decrees
in equity courts.
In form orders are {a) affirmative, as tbose
granting relief by requiring carriers to cease and
desist from charging Unreasonable rates and fol¬
lowing ! discriminatory practices, and prescribing
reasonable rates and non-discriminatory practices ;
or (5) denying relief, as tbose dismissing tbe com¬
plaint of tbe sliipper. Orders to accomplish other
purposes than tbose stated necessarily fall within
tbe above classification.
4. How Orders Were and Are Enforceable.
Prior to tbe act of June 29, 1906, tbe orders of
tbe Commission, if affirmative in their nature, were
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enforceable in the Federal courts by a bill by the
Commission or by any party injured by the failure
of the carrier to obey the order. This procedure is
still permissible in the Commerce Court, and in
addition to the Commission and any party injured,
the United States may by the Attorney General file
an appropriate bill.
The act of June 29,1906 (34 Stat. L., 584), made
the orders of the Commission self-executing or
self-enforcing. The failure, neglect, or refusal to
obey them within the time limit thereof was made
punishable by heavy penalties. A method for an¬
nulling them, inasmuch as the Commission was not
a court, was under the Constitution necessary. He
against whom the order ran was entitled to his day
in court.
By the act of June 30, 1906 (34 Stat. L., 584),
was fixed the venue of circuit courts of the United
States in "suits to enjoin, set aside, annul or sus¬
pend any order or requirement" of the Commission
and jurisdiction "to hear and determine such suits
is hereby vested in such courts."
This jurisdiction (and jurisdiction over certain
other classes of cases) was transferred to the Com¬
merce Court by the act of June 18,1910, which was
subsequently re-enacted as part of the Judicial
Code (act, March 3, 1911).
2a
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5. The Power of Courts to Enjoin, Set Aside,
Annul, and Suspend Orders of the Commission.
When the act of 1906 was before Congress there
was a thorough appreciation of the fact that the
carriers had a right to a judicial review of the
orders of the Commission; whether the power of
the courts should include "broad" review or "nar¬
row" review was most freely debated, particularly
in the Senate. The question was not, however, spe¬
cifically decided, for to the circuit courts was given
"jurisdiction to hear and determine such suits,"
i. e., suits to enjoin, set aside, annul or suspend any
order or requirement of the Commission.
It has, therefore, fallen to the Supreme Court to
delineate the limitations within which the courts
may act. Reviewing previous cases which had been
before it for decision, the Supreme Court in Inter¬
state Commerce Commission vs. Union Pacific R.
Co. (222 U. S., 541, 547), said:
"There has been no attempt to make an
exhaustive statement of the principle in¬
volved, but in cases thus far decided, it has
been settled that the orders of the Commis¬
sion are final unless (1) beyond the power
which it could constitutionally exercise; or,
(2) beyond'its statutory power; or (3)
based upon a mistake of law. But questions
of fact may be involved in the determination
of questions of law, so that an order, regular
on its face, may be set aside if it appears
that (4) the rate is so low as to be confisca¬
tory and in violation of the constitutional
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prohibition against taking property without
due process of law ; or (5) if the Commission
acted so arbitrarily and unjustly as to fix
rates contrary to e'sfidence, or without evi¬
dence to support it; or (6) if the authority
therein involved has been exercised in such
an unreasonable manner as to cause it to be
within the elementary rule that the sub¬
stance, and not the shadow, determines the
validity of the exercise of the power."
6. The Courts Have No Jurisdiction Over Nega¬
tive Orders of the Commission.
In the course of the many decisions of the Com¬
mission complaining shippers who had been denied
relief became aggrieved and being of opinion that
the Commission had erred and denied substantial
rights filed petitions in the Commerce Court for a
judicial decision of the controversy and to enjoin,
set aside, annul, and suspend the negative orders of
the Commission. The case first determined was
Procter and Gamble vs. United States, involving
the right of carriers to charge demurrage on pri¬
vate cars while on private tracks. The Commission
had held that the carriers had the right. On peti¬
tion to the Commerce Court, the United States
moved to dismiss on jurisdictional grounds. That
court held it .had jurisdiction but sustained the
right of the carriers to assess demurrage under the
circumstances stated, thereby agreeing with the
Commission.
The case was appealed to the Supreme Court,
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which held that the Commerce Court had no juris¬
diction of cases in which the Commission had dis¬
missed the complaint of a shipper. The Chief Jus¬
tice, speaking for the court, after quoting the
power conferred upon the Commerce Court over
"Cases brought to enjoin, annul, or sus-
• pend in whole or in part any order of the
Interstate Commerce Commission,"
said:
"Giving to these words their natural sig¬
nificance we think it follows that they confer
jurisdiction only to entertain complaints as
to affirmative orders of the Commission;
that is, they give the court the right to take
cognizance wlien properly made of com¬
plaints concerning the legality of orders,
rendered by the Commission and confei'
power to relieve parties in whole or in part
from the duty of obedience to orders which
are found to be illegal."
It therefore follows that in no case in which the
Commission has dismissed a complaint, even by a
divided Commission, can the complaining shipper
go farther; whatever errors may have been made
by the Commission, nevertheless the shipper is
thereafter remediless.
Under the doctrine laid down in the Procter and
Gamble case the Supreme Court dismissed the ap¬
peal in Hooker et al. vs. Knapp et al. (involving the
reasonableness of rates from Cincinnati to Chat¬
tanooga) and The Eagle White Lead Co. et al. vs.
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Interstate Commerce Commission. By reason of
the same decision the Commerce Court of its own
motion dismissed the following cases for want of
jurisdiction, or they were subject to have been so
dismissed:
Anaconda Copper Mining Co. et al. vs. United
States.
Crane Iron Works vs. United States.
O 'Gara Coal Co. et al. vs. United States et al.
Cattle Raisers' Association of Texas et al. vs.
United States.
Chamber of Commerce of City of Augusta, Ga.,
vs. United States and Interstate Commerce Com¬
mission.
International Salt Co. of Illinois et al. vs. United
States and Interstate Commerce Commission.
Louisiana & Pacific Ry. Co. et al. vs. Interstate
Commerce Commission, United States, et al.
Woodworth & Louisiana Central Ry. Co. et al.
vs. Interstate Commerce Commission, United
States, et al.
Sibley, Lake Bisteneau & Southern Ry. Co. vs.
United States and Interstate Commerce Commis¬
sion.
The twelve cases indicate the great importance
of ha^fing■ a review of the decisions of the Commis¬
sion, for they constitute one-sixth of all the cases
filed in or transferred to the Commerce Court,
The demand is not single and stray but great and
broadspread.
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7. The Right to Invoke the Federal Judicial
Poiver Should Be Mutual.
There would seem to be no argument against
conferring upon the courts jurisdiction to hear and
determine controversies which have been decided
adversely to the complaining shipper. Since the
Abeline case (204 U. S., 426) he must initiate his
proceeding (if he complains of certain matters)
before the Interstate Commerce Commission, for
its jurisdiction and power in particular controver¬
sies is original and exclusive.
The denial of the same right of review to the
shipper as is accorded the carrier is beyond doubt
a denial of that equality of the law which is funda¬
mental in the Constitution, even if (which seems
likely) the shipper is not denied due process of law.
Our jurisprudence has zealously guarded the
right of the individual and particularly against er¬
roneous and arbitrary action by administrative and
quasi-judicial officials. If a committing magistrate
act erroneously one has habeas corpus; if an admin¬
istrative official fail to perform a ministerial act
mandamus lies, and in this behalf the courts have
broadened rather .than narrowed the remedy. Not
only have the courts appreciated and kept inviolate
the rights of the individual, but Congress itself has
usually protected by appropriate legislation 'his
rights. Instance the applicant for a patent ; if the
individual be denied one, he has from early days
been permitted a review and revision of the decis¬
ion of the Commissioner of Patents. Early in our
' 15
history he had the right to appeal to a hoard ; more
recently and since 1870, he may invoke the judicial
power by an appeal thereto. (5 Stat. L., 117 ; R. S.
U. S., sees. 4906 et seq.; 27 Stat. L., 434, ch. 74.)
8. Powers Necessary to be Conferred in Respect
to Negative Orders to Give Adequate Relief.
It is manifest that if to the courts be given only
the power to enjoin, set aside, annul, and suspend
negative orders of the Commission, the power will
not be coimnensurate with the relief to which one
is in justice entitled. The setting aside of or
similar action regarding a negative order would
leave the petitioner before the court practically
where he was as complainant before the Commis¬
sion. The authority of the courts must be suffi¬
ciently broad and comprehensive to give adequate
relief.
There are of course matters which cannot prop¬
erly be placed within and subject to the judicial
power; but matters judicial or quasi-judicial in
their nature are proper subjects for judicial de¬
termination (Murray vs. Hoboken L. & I. Co., 18
How., 284).
In its administrative functions the Commission
is not subject to control (I. C. C. vs. Humboldt
S. S. Co., 224 U. S., 474). In its legislative func¬
tions it should be as subject to revision by the
courts at the instance of shippers as at the in¬
stance of carriers. In its judicial and quasi-
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judicial functions it may constitutionally be made
subject to the judicial power (U. S. ex rel. Ber¬
nardin vs. Duell, 172 U. S., 576).
To give adequate relief the courts must be en¬
dowed, not with pnrely revising power, for prob¬
ably such power would vitiate the grant, but with
power to mark out the law as appbed to particular
facts and to certify the law in the case to the Com¬
mission for its guidance in further proceedings
therein. Such is the power and procedure in pat¬
ent appeals, which has stood the test of the Con¬
stitution (U. S. ex rel. Bernardin vs. Duell, 172
U.S., 576).
The analogy between the two situations is com¬
plete. Each,—the office of the Commissioner of
Patents and the Interstate Commerce Commis¬
sion,—are administrative in their nature; each
performs certain ministerial and judicial or quasi-
judicial functions. To secure justice through the
exercise of the judicial power one may have an
appeal to the courts for the purpose of securing
a patent or determining priority in an interfer¬
ence case. Appeal to the courts or right of judicial
review is unfortunately now denied one who has
failed for any reason to make a case before the
Interstate Commerce Commission.
It may be said that if to the courts be given the
power of review of negative orders carriers, as
well as shippers, may in such cases appeal to the
courts. This is true, for carriers may under the
act seek relief from the Commission; but if the
Commission is wrong, ought not any one injured
17.
by the wrong be entitled to have the wrong
righted? If, again, it be said (as it has been) that
the Commission is the shippers' friend, and one
can rely that every intendment in favor of the
shipper will be given, it can properly be replied
that Commission is not supposed to be a biased or
prejudiced body, and that the number of cases in
the Commerce Court heretofore filed by shippers
shows that the Commission does not always decide
with the shippers.
9. What Court Should be Invested with Power
in the Premises.
As transportation law is technical, as the facts
are complex, as the domain of investigation is
broad, and as unanimity and promptness of de¬
cision is desirable, it is submitted that the power
to be conferred should be conferred upon the Com¬
merce Court. No one will deny that these trans¬
portation questions are "matters involving public
rights which may be [and usually are] presented
in such form that the judicial power is capable of
acting upon them and which are susceptible of ju¬
dicial interpretation." And no one with even
slight familiarity with the subject will deny the
advantage of the judgment of a trained body of
skilled judges, expert in all tbe intricacies of this
special branch of the law.
JOHN B. DAISH.
Washington, July 9,1912.
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