ICC v. AMERICAN TRUCKING ASSNS., INC.
Legal provision: Motor Carrier
ORAL ARGUMENT OF CARTER G. PHILLIPS, ESQ., ON BEHALF OF PETITIONERS
Chief Justice Warren E. Burger: We'll hear arguments next in Interstate Commerce Commission against American Trucking Associations.
Mr. Phillips, I think you may proceed whenever you are ready.
Carter G. Phillips: Mr. Chief Justice, and may it please the Court:
At issue in this case is the validity of a rule adopted by the Interstate Commerce Commission in 1980 that provides the Commission with authority to reject at any time tariffs filed by a motor carrier if those tariffs were adopted or published under procedures that are found to be in significant violation of a rate bureau agreement.
The importance of the rate bureau agreement is that it serves as the basis for the motor carriers' immunity from antitrust liability for jointly setting and publishing their rates.
This suit is an attack on the rule as adopted and not as applied, and accordingly the facts are rather sparse.
The rule was adopted in the aftermath of the enactment of Congress in 1980 of the Motor Carrier Act.
The primary purpose of that Act was to increase competition among motor carriers, and one of the significant means for achieving that particular purpose was Congress' attempt to restructure the operations of rate bureaus.
Rate bureaus had been created after 1948 when Congress adopted the Reed-Bulwinkle Act which conferred the initial antitrust immunity on rate carriers so that they could avoid the destructive competition that Congress had found to have existed in the past so that they could set their rates jointly in a way that would otherwise violate section 1 of the Sherman Act because the immunity was perfectly permissible.
During the 32 years that the Reed-Bulwinkle Act had been in effect both the Commission and Congress had become concerned about possible abuses in the rate bureau process, and some members of both Congress and the Commission began to doubt whether any antitrust immunity was appropriate at all.
In 1980 Congress comprised on the issue and retained a certain amount of antitrust immunity for rate carriers but did so only in return on the condition that the rate bureaus themselves operate under very strict requirements so that they would be more open to the public and provide greater opportunity for competition among the motor carriers.
For instance, Congress required that bureau meetings be open, that the name of the proponent of any rate increase be disclosable, and that members of the bureau not discuss various aspects with published rates.
With regard to enforcement under the Interstate Commerce Commission Act, however, Congress did not modify the Commission's preexisting powers.
In its notice of proposed rule making the Commission explained that most of the requirements of the Act were self-fulfilling, but nonetheless adopted several substantive provisions designed to provide very clear guidance to the motor carriers with regard to precisely how they should operate in order to assure the continuance of their antitrust immunity.
The only one of those rules that is at issue in this case is the Commission's decision to adopt rejection, as it is called, of the carrier's tariff filing as a potential sanction in cases where the Commission finds after a hearing and the possibility ultimately of judicial review that the tariff is the product of a significant violation of a rate bureau agreement.
The Commission thereby asserted its authority in appropriate cases to declare the filed tariff to be invalid ab initio and thereby to subject the carrier to overcharged liability under section 11705(b)(1).
Unidentified Justice: Under that, Mr. Phillips, was the usual remedy retroactive, cancel it out all the way?
Carter G. Phillips: The usual remedy in what context?
Unidentified Justice: You just said that they exercise their discretion under that rule?
Carter G. Phillips: Yes.
Unidentified Justice: Cancel the filed tariff.
Carter G. Phillips: In cases of significant rate bureau violations.
Unidentified Justice: But that was the only thing the Commission would do?
Carter G. Phillips: No.
The Commission retained the option of exercising any of its other enforcement powers.
Unidentified Justice: Such as?
Carter G. Phillips: It could bring a civil proceeding for a penalty, could decide to declare the rate invalid and prescribe a rate for the future, the traditional remedies it had always used.
Unidentified Justice: And require adjustments.
Carter G. Phillips: Could require adjustments.
Unidentified Justice: Well, could it cancel it out only for the future?
Carter G. Phillips: Yes, Your Honor.
Unidentified Justice: Could it also revoke approval of the rate bureau agreement itself?
Carter G. Phillips: Yes, Justice Stevens, it could revoke approval of the rate bureau agreement.
Unidentified Justice: May I ask if the issue in the Aberdeen case involving the symbolization rule, does that pertain to rate bureau or is that entirely separate?
Carter G. Phillips: Well, rate bureaus are the ones ordinarily who file tariffs, and as a consequence they are the ones who would be placing the symbols on the tariffs, but the symbolization requirement applies to anyone who files a tariff.
So if an individual motor carrier were to do so he would be obliged to comply with that rule.
Unidentified Justice: Is the failure to put the right symbol on the tariff a violation of a rate bureau agreement?
Carter G. Phillips: No, Your Honor.
It's an independent violation of the regulation.
Unidentified Justice: Would it be possible to decide this case one way and the other case the other way?
Carter G. Phillips: I think it would be possible.
Unidentified Justice: And not a necessary conflict.
Carter G. Phillips: Not a necessary conflict, no, Your Honor.
I don't believe so.
Unidentified Justice: Mr. Phillips, could you give examples of significant violations that would be subject to the retroactive rule?
Carter G. Phillips: Sure.
Presumably one of the purposes of the rate bureau review process was to make sure that the shippers have an opportunity to have some involvement in the negotiations for setting the rates so that if the meetings for the rate bureaus were closed to the shippers or if the shippers were in some other way excluded from that process so that rates were set higher than they might otherwise have been as the shipper had had an opportunity to participate and the Commission were to find in its own view that if the rate bureau open process had been allowed to function as it should have, that the higher rate would not have been set, then it might well be the Commission's judgment that that higher rate should not be permitted.
Unidentified Justice: Well, the Commission would have an opportunity when the rate is first filed to disallow it, would it not?
Carter G. Phillips: Yes.
It has the right to suspend it within the 30-day period, but it may or may not--
Unidentified Justice: Well, is this rule really a product of the Commission's lack of funding or staffing to get around these things earlier?
Carter G. Phillips: --Well, not nearly so much as the symbolization rule, Justice O'Connor.
Frankly the problem inherent in the rate bureau process is one of general secrecy.
I mean the whole reason Congress modified the rate bureau process was to make it less secret so that it could well be that violations of the requirements for rate bureaus would simply make them more secret and, therefore, make it more difficult to determine whether there have been violations.
So I think there was an inherent difficulty in complying with the 30-day problem even before the Commission's budgetary problems, but certainly having less resources makes it much more difficult frankly to be able to investigate rate bureau violations within the 30-days.
Rationale for the adoption of the rejection remedy by the Commission was that it simply lacked an effective remedy for significant violations of rate bureau agreements under the preexisting law and that the adoption of rejection was a direct and efficient administrative response to the peculiar problems that have been created by the operation of the rate bureaus.
Unidentified Justice: Mr. Phillips, rejection is a creature of statute in a sense.
The statute talks about rejection, does it not?
Carter G. Phillips: Yes, Your Honor.
In 10762(e) it makes specific reference to rejection.
Unidentified Justice: So presumably the Commission is bound to follow whatever constraints may be contained in the statutory creation of rejection.
Carter G. Phillips: Certainly the Commission is bound by the statute with regard to that; however, 10762(e) does not, by its terms, make any reference to rejection.
Moreover, the Commission--
Unidentified Justice: Does the terminology of rejection, though, indicate that it is something that has not yet gone into effect?
Carter G. Phillips: --Well, that was the position of the Court of Appeals--
Unidentified Justice: Is there a suggestion there that that is the meaning?
Carter G. Phillips: --Well, that is what the Court of Appeals believed that you can only properly define rejection that way.
However, a proper definition of rejection is to cast out or to eject which presumably would have something to do with something that was already effective.
Moreover, I do not think it is appropriate to tell an agency precisely how it should operate by reference to dictionary definitions.
There is nothing inherent in that particular phrase that evinces a clear intention by Congress to restrict how the Commission operates, and our submission is that that kind of a showing is what this Court's prior decisions have found.
Unidentified Justice: But does the whole structure set up by Congress suggest that when there is an interval in which the Commission can accept it or not and then it goes into effect and thereafter there are other procedures whereby the Commission could initiate an examination for the future?
Does that whole structure suggest something contrary to your position?
Carter G. Phillips: I don't believe that that's the inference to be drawn from this particular statutory scheme.
The remedies that are available all sort of miss the basic point of what the Commission's trying to achieve through the use of the specialized rejection power.
There are alternative remedies available, no question about that, but this Court has held in the American Trucking Association case before that you don't look down the list of provisions to see whether the specific one the Commission has sought to apply exist, but rather you determine whether given the mission of the Commission the particular enforcement device that it has in fact adopted is consistent with that mission, not with any specific provision.
I don't believe, frankly, that you can go through and find that... It might well be appropriate to say the Commission cannot follow this course of action if its efforts were to make superfluous some preexisting arrangement that Congress has set out, but that is not the case here.
So in the absence of that it would seem to me that the structure of the Act does not in any way cavern the Commission's discretion to choose an enforcement technique that is appropriate.
Unidentified Justice: What about the fact that subsection (e) is part of that one section which generally deals with processing of new rates?
Do you take the view that rejection can occur at any time, even ten years later?
Carter G. Phillips: Well, there is a three year statute of limitations for an overcharge liability so that--
Unidentified Justice: But you could reject ten years later.
Carter G. Phillips: --Sure.
You could reject, but you could not impose overcharge liability for the total period.
I think it is important to realize that Commission's position here is that we believe that the rejection authority made specifically a matter of statutory provision in 10762(e) is helpful but that the Commission also relies on its inherent authority, the broader sort of notion of rejection similar to what Court held in the United Gas Pipeline v. Mobil Gas case.
So we do have two alternative theories involve here.
Unidentified Justice: Mr. Phillips, what if Congress with respect to rates the Commission may do the following: it may reject; it may suspend; it may be hearing and find unreasonable.
It didn't say anything more.
Do you think the Commission given those three weapons to deal with rates filed could say, well, in addition we are going to have three or four other kinds of procedures that are a little bit different than anything like the three that Congress has set forth.
Carter G. Phillips: In absence of some indication, I submit, in the legislative history that says that Congress set out those three that those were the ones that had in mind and meant for the Commission not to go beyond those three.
Our position would be consistent with the earlier American Trucking Association case that Congress doesn't sit down and figure out every aspect of how the Interstate Commission is going to perform its job and that the specific reference to certain enforcement mechanisms in no way necessarily restricts the Comission from using additional mechansims so long as those satisfy the aim of the statute, which is the enforcment of the rate bureau agreements.
So I do not believe that that setting out would necessarily preclude what the Commission has done here.
Respondents filed this suit in the United States Court of Appeals for the Eleventh Circuit challenging many of the rate bureau regulations adopted by the Commission, and the court upheld most of the substantive regulations but rejected the rejection rule in this case.
In holding that the Commission had no power to reject the rate that had gone into effect after 30 days, the court did reject additional contentions that had been made by the Respondents.
First, the court held that the rejection authority mentioned in 10762(e) is not restricted simply to rejecting problems in rate filing procedural defects but is also available for substantive unlawfulness.
Second, it held that the Commission's authority over rate bureau agreements was not limited to declaring them unlawful, but rather the Commission could also adopt sanctions in addition to declaring the agreement unlawful.
The court held, however, that free or post-effective rejection was inappropriate on three grounds: first, the dictionary definition of rejection, which I have already discussed; second, the court held that it would violate a statutory policy favoring stability of rates; and third, the court reasoned that prior decisions of this Court precluded rejection of effective rates.
This Court has held that the determination of how best to enforce the national transportation policy as embodied in the Interstate Commerce Commission Act is a matter firmly committed to the discretion of the Interstate Commerce Commission, and the Commission's authority in this regard does not depend upon the express provision of a specific power.
There is a legitimate, reasonable and direct relationship between the asserted enforcement authority and a mandate of the statute, and the Commission's rule must be upheld.
I've already discussed the dictionary definition problem of the Court of Appeals' analysis.
Equally unavailing is the Court of Appeals' reliance on the stability of rates as a statutory policy.
It is clear that the 1980 Act was designed to increase flexibility in rates, not to guarantee their stability at all costs, and that the Commission's rejection rule in this context furthers the competition element of the Act and does not great--
Unidentified Justice: Let me just ask you one more thing, Mr. Phillips, and that is could the Commission reject a proposed rate within the time provided in the statute simply because it lacks enough information on the proceedings to let it make a sound decision?
Carter G. Phillips: --The Commission does have the power to reject for lack of information although the tariff filing--
Unidentified Justice: So why does it need this rather unusual power to go back on an issue?
Carter G. Phillips: --Justice O'Connor, in order to use the power you are talking about there would have to be something in the tariff filing itself that would make clear whether or not there has been a rate bureau operation problem, and tariff filings are just a set of numbers which do not in any way give you any insights into whether there may have been a tariff rate filing problem.
So the Commission would be obliged to do one of two things, either disregard the rate bureau operation problems or have to suspend every rate increase in order to investigate whether or not the rate bureau operation has been complied with.
Neither of those seem particularly appropriate, and this much more tailored remedy seems much, much more suitable at least in the view of the Commission.
Unidentified Justice: Is there not another consideration here?
As I understand it, if the filing violates the rate bureau agreement it does not have the immunity of the Reed-Bulwinkle Act.
Am I correct in that?
Carter G. Phillips: Yes, Your Honor.
Unidentified Justice: If that is true and then there is an incorrect tariff filed that violates the agreement, the people who file it run a very substantial risk of treble damage liability, do they not?
Carter G. Phillips: Well, there is no question that there is some deterrent value to having antitrust liability--
Unidentified Justice: I would think that would be a greater deterrence than the fear of rejection.
Carter G. Phillips: --Well, the Commission recognized that but nonetheless believed that... The antitrust liability notion is cumbersome.
It is in the hands of the shippers exclusively who may or may not have a direct interest in bringing the suits and who may not want to risk it whereas this is in the hands of the Commission--
Unidentified Justice: If they talk to a venturesome lawyer they would not have much trouble getting representation I would not think in a case like this because it is a clear violation if there is no immunity.
Carter G. Phillips: --Well, I do not doubt that the attorney may be willing to undertake the expense.
I do not know that the shipper would necessarily want to pursue the matter particularly.
It may just not be in their interest.
I do not dispute that there is some deterrent force, no question about that, but in the Commission's view it was simply not sufficient, and it was not in the Commission's hands which was the real problem in the preexisting rate bureau regulatory scheme.
They lacked the power to take action.
Moreover, perhaps in some respects treble damages is an overkill remedy for the particular problem that the Commission retains greater discretion to tailor this particular relief more effectively than a treble damage award might.
Unidentified Justice: Do we have any feel for how often these violations occur?
I take it it only applies to--
Carter G. Phillips: Significant violations?
Unidentified Justice: --The significant ones that this rule contemplates.
Carter G. Phillips: Well, the rule has been in effect since the end of 1980, and we do not have any--
Unidentified Justice: No, but the Reed-Bulwinkle Act has been in effect for a lot longer than that.
So there have been rate bureau agreements for a long time.
Carter G. Phillips: --The problem with the 1948 to 1980 period was that the thrust of the Commission's regulatory efforts was made in approving rate bureau agreements and reviewing what agreements furthered the national transportation policy.
There was virtually no attention paid to... once you had an agreement in effect... how it was to be operated.
The Commission believed that the 1980 Motor Carrier Act in that Act Congress expected for the Commission to review more carefully how the rate bureaus themselves operate and worry less about the agreements since Congress had provided the express requirements for those agreements.
Unidentified Justice: I had a little feeling in reading the briefs that maybe this was kind of a theoretical problem.
May I am just unsophisticated.
Carter G. Phillips: Well, there is certainly a theoretical element to it any time a litigant challenges a rule on its fact rather than wait for it to be applied.
That is going to be an inherent problem.
Certainly in our view in dealing with it as a theoretical matter we think it inappropriate to deal with extreme hypothetical applications but rather the more central purposes for which the Commission adopted this particular rule.
The Court of Appeals believed that this Court's decisions in Portland Seed and Berwind-White required rejection of the Commission's rule.
As we suggested in our brief, our position is that those decisions indicate that a shipper cannot seek a judicial order requiring rejection of an effective tariff, but they say nothing about the power of the Commission to modify the sanctions that will best enforce this particular legislation.
On that issue, it seems, that this Court's decisions in American Trucking, Chesapeake & Ohio and the Trans-Alaska Pipeline Rate Cases make plain that this is a matter clearly within the Commission's discretion.
Finally, I just suggest why we believe that this particular rule is reasonable under the circumstances since that's the standard to be applied.
In the first place, it serves a very powerful deterrent function.
In the second place, it deprives the motor carrier of the benefit of a clearly unlawful tariff which is a just consequence and one that the overcharge liability is designed to further.
Moreover, providing the overcharge relief to the shipper will encourage them to help the Commission to police these particular provisions in a way that should encourage enforcement of these operations that Congress believed were so important.
Finally, this particular remedy is one that the Commission itself can exercise, which is important in being able to tailor the relief to the particular circumstances where it is appropriate.
Accordingly, it seems clearly reasonable and under this Court's prior decisions the rule should be upheld.
Unidentified Justice: Has this always been the Commission's view?
Carter G. Phillips: Has what always been the Commission's view?
That we have the power to reject?
Unidentified Justice: The position that you are furthering.
Carter G. Phillips: Well, the Commission adopted the rule in 1980.
It has always taken the view that it can reject for various reasons unlawful rates and require overcharges.
Unidentified Justice: Retroactive?
Carter G. Phillips: Retroactively.
It has not often found need to undertake that, frankly, but the Commission, I think, reasonably concluded that Congress in 1980 placed a special burden on the Commission in enforcing rate bureau operations.
That's why this particular device was used in this particular context.
If there are no questions I reserve the balance of my time.
Chief Justice Warren E. Burger: Mr. McEligot.
ORAL ARGUMENT OF PATRICK MC ELIGOT, ESQ., ON BEHALF OF RESPONDENTS
Patrick Mc Eligot: Mr. Chief Justice, and may it please the Court:
I would first like to address some questions that were asked of counsel where we have a difference of opinion.
First, Justice Stevens, asked whether there was a direct conflict between this case and the Aberdeen case.
We submit that there is, Your Honor.
The holding here is the Commission cannot retroactively validate tariffs.
The holding in Aberdeen is that it can.
There is a direct conflict, and I think you have to decide both of these cases together.
Justice O'Connor asked if this rule was the result of the problem that the Commission is complaining about about not having enough funds to check tariffs before they become effective.
This case does not involve that, Your Honor, because the type of violations we are dealing with here would not be discovered by the tariff examiners who look at the tariffs and determine whether they are tariff informality violations.
They do not look at substantive violations at all.
This is not involved.
The Aberdeen case does involve that question.
You also asked, Justice O'Connor, whether the Commission could reject a tariff when it lacks sufficient information.
No, it would not reject the tariff.
It would suspend the tariff ending an investigation.
These are separate powers.
The tariff rejection power is simply to deal with tariff filing informalities, procedural matters.
If the tariff is not filed in accordance with the Commission's tariff circular rules, it would reject it.
If there is a substantive violation of the Act such as a violation of the rate bureau agreements, it would suspend the tariff.
Finally, Justice Stevens asked about the threat of antitrust liability, and you mentioned treble damage liability.
I would just like to mention that very recently the Justice Department brought a case, a criminal case, against some of the clients that I represent, a rate bureau, alleging just these violations, violations of rate bureau procedures.
That case was dismissed and was turned into a civil proceeding, but the threat is even more serious than you suggest.
I would like to begin by pointing out three misconceptions that are likely to arise from a reading of the ICC's decision and counsel's briefs: first, that the rule at issue interprets and implements the Motor Carrier Act of 1980; second, that the tariff rejection procedures satisfy the full hearing requirements of the Interstate Commerce Commission Act; and third, that the ICC will be in a position to exercise discretion in the matter of refunds to shippers.
None of these statements are correct as I will show.
While the ICC's decision states that it is intended to interpret and implement provisions of the Motor Carrier Act of 1980, there is nothing in that Act even addressing this subject.
The Commission admitted in its decision that it was concerned that in the Motor Carrier Act of 1980 Congress did not go far enough in providing remedies for violations of rate bureau.
It, therefore, took it upon itself to provide this additional remedy, which is the subject of this case.
Now, this is important because of what the Congress said in the Motor Carrier Act of 1980.
I would like to quote.
"The ICC should be given explicit direction for the motor carrier industry and well defined parameters within which it may act. "
"It should not attempt to go beyond the powers vested in it by statute. "
Now I'll admit that an agency ordinary should have some leeway in fashioning remedies for the statute that it is administering, but I think that this is not the case here.
Since Congress, I think we showed in our brief... We have a different reading of the legislative history than counsel.
Our reading of the legislative history and what we showed in our brief is that Congress was tempting to reign in the agency, and that they were being as explicit as they knew how to be in that Act.
So in those circumstances we feel that the Commission went far beyond the power vested in it by adopting this rule.
As to the question of the procedural rights, I would like to point out that this rule provides that the complaints will be filed with what is called the Tariff Integrity Board.
Now this is a creature of the ICC.
There is no provision for it in the statute.
This is an employee board that will act on these complaints that a rate bureau violation occurred.
The Tariff Integrity Board's procedures, which were adopted by the Commission, provide that the proceedings will be informal, that no transcript will be made, that subpoenas will not be issued, and that oaths will not be administered.
Now, the Tarrif Integrity Board does not itself act on the complaint.
It forwards its recommendation to the Commission.
But the rules do not say what happens next.
Two things are possible.
The Commission can act directly on a Tariff Integrity Board recommendation, strike the tariff retroactively, in which case the carriers will have been denied these procedural rights that I just mentioned, or it can start all over again and file its own complaint using the Tariff Integrity Board's recommendation as a basis for its complaint.
But if it does that it merely delays the proceedings and increases the liability of the carriers.
As we pointed out, while the complaint has to be filed within 60 days after the tariff became effective, there is no time limit on when the Commission has to decide the issue.
The tariff stays in effect and the Commission can drag on the proceeding as long as they want.
All increases that were placed into effect during this time would have to be refunded.
So what the Commission is doing with this duplicative procedure is merely trying... if that way it proceeds... is merely dragging out the proceedings.
There is no reason for this at all except that the Commission wants to bring this proceeding within its Tariff Integrity Board rule which is the place where it is stated that it has this authority retroactively reject tariffs.
So it just kind of made up this system so that it can bring it in within that rule.
The third misconception I mentioned was the ICC's refusal to acknowledge that it will be unable exercise discretion in the matter of refunds.
I think the best example of this is in the tariff missymbolization rule in the Aberdeen case.
That rule flatly provides that changes resulting in increases which are not identified by proper symbols shall be considered unlawfully published and filed and therefore invalid and not collectible such cases the lawful provisions will be those purportedly superseded.
Now it is not difficult to imagine what happen if there is a violation of that rule.
First of all, as we pointed out in our briefs the ICC has jurisdiction to entertain shippers' complaints for overcharges.
A shipper has to go directly to court.
It can either go to a state court or to a federal court, but in either case there would be no reason for the court to refer the matter to the ICC since it is a pretty easy matter to determine whether a tariff had been properly symbolized or not.
There will not even be any need for a hearing or anything.
If it is not symbolized, it is not symbolized.
The court then will be faced with the rule which flatly declares the tariff invalid and not collectible, and the provisions of the overcharge statute which provides that all such charges are to be refunded.
The court will have no discretion whatsoever in the matter.
So the ICC saying that it has discrection means nothing in that case.
In the case at issue here and the rule at issue here for violations of the rate bureau agreements, the ICC will have some discretion in this respect.
It can decide whether or not the violation has been significant as they put it in its order.
Now, there is no standard to determine what significant is, but even more important the ICC has boxed itself in.
If it determines that a violation of a rate bureau agreement is significant, then the tariff is stricken, overcharges are due and owing, and a court will have to award them.
The court cannot consider actual harm to the shipper, cannot consider the seriousness of the offense.
The Commission has said it is going to do this in motor carrier cases.
Yet, in the cases of the railroads where it has authority to deal in the railroad section of the Act, the ICC can award overcharges or damages.
It has said in those cases that it is going to consider violations of railroad rate bureau agreements under the damage sections of the Act so that it will require the shippers to show or not show harm, but not so in the case of motor carriers.
There is no reason for this distinction.
Neither counsel nor the ICC has ever given us any reason why the railroads should be treated any differently than the motor carriers.
Under the normal procedures before the Commission adopted this rule, if a shipper brought a complaint in court and said that there had been a violation of some provision of the Act, the court would have been free to decide whether damages were due at all, in the first place, and secondly, whether the shipper had been actually harmed.
We submit that that is the only fair way to handle this, and that is the way that your decisions in Davis v. Portland Seed require.
I would like to now turn to the authority of the ICC to retroactively invalidate effective tariffs.
I think counsel for the government put their finger on the issue here in their reply brief.
They said what the Commission is trying to do is create a basis for overcharged liability.
We submit that the statute says what is an overcharge and what is not, and that the Commission cannot create overcharge liability.
The overcharge provision of the Act states at paragraph 4 in the petition at the very last page of the petition if you would like to follow it,
"The common carrier providing transportation or service subject to the jurisdiction of the Commission under the Act is liable to a person for amounts charged that exceed the applicable rate for transportation or service contained in a tariff filed under the Act. "
Now to me this means simply that if a tariff is on file with the Commission and a carrier charges more than is called for in that tariff that carrier is subject to an overcharge claim and must refund the excess.
It does not involve this problem at all, violations of the Act.
In the very next sentence the Act states... it provides for damages sustained by a person as a result of an act or omission of the carrier in violation of the Act.
Now, this is what we are talking about in the case of both missymbolization and violations of rate bureau agreements.
We're talking about violations of the Act.
What the Commission has done is taking this whole Alouette case, which reached a strained interpretation of the Act and is trying to ride on it in this case by creating overcharge liability when there is none.
I think we pointed out in our briefs that every other court that has considered that Alouette decision except the one that is on appeal here, the Aberdeen case, has rejected it and has said that there is no basis whatsoever.
It has been rejected by the First Circuit, by the D.C. Circuit and by the Eleventh Circuit.
Unidentified Justice: Mr. McEligot, Mr. Phillips stressed reliance on American Trucking for the position that he took.
Do you plan to mention that?
Patrick Mc Eligot: Well, there are two points there.
The first, Your Honor, I think we discussed it in our brief.
There is a recent case called the Central Forwarding case that discusses that at some length, and the point there is that the American Trucking case was decided before the Motor Carrier Act of 1980.
The Motor Carrier Act of 1980 set new limits on the Commission, and really... I think the Court said it is still good law, but it has to be read in light of what Congress said later.
Congress said the Commission cannot go beyond the strict, statutory limits.
So, as I said, an agency ordinarily would have some leeway in this, but it cannot have that leeway here where Congress said otherwise.
Congress could not have made itself more clear.
I would next like to discuss the specific language of the Act, which the Commission says gives it authority to retroactively invalidate tariffs.
It relies solely on this rejection power in the Act.
The rejection authority provides that the ICC may reject a tariff submitted to it by a common carrier under the tariff filing section of the Act if that tariff violates that section or requirements of the Commission carrying out that section.
That provision is just in there for that one purpose so that the Commission can reject tariffs at the outset that do not meet the tariff filing requirements either of the statute or of its own tariff circular rules.
It is not meant to deal with retroactive invalidation of tariffs.
It is not meant to deal with substantive violations of the Act.
At least two courts have held... The Delta case cited in my decision held that.
But it is simply to deal with tariff filing informality violations... formality violations.
It is not to deal with substantive issues.
The rate bureau agreement violations obviously do not violate either the tariff filing provisions of the Act or of the Commission.
So in the first place we are saying that the Commission cannot even use it in this case.
However, they could in the Aberdeen case if that were the only issue.
I think Justice O'Connor put her finger on this.
If you read the statutory scheme it is clear what the rejection authority is mean to do.
It is meant merely to get at problems right at the outset.
There are no procedural steps to be taken.
If the Commission rejects it, that is it.
Later on the Commission in other sections of the Act can suspend and/or investigate for substantive violations, and it can after a full hearing order tariffs canceled prospectively.
Now, counsel said that their reading of the rejection authority would not make those other provisions superfluous, but we cannot see why the Commission would need them if they could do all this that they are saying they could do under the rejection authority.
If the Commission can come along three years or five years later and reject authority and render it invalid retroactively, it certainly has no need to suspend proposed tariffs or to cancel effective tariffs after a full hearing.
I think the Court was correct, too, in saying that the plain meaning of rejection contradicts this interpretation.
The plain meaning according to court was to refuse to accept or to decline to receive.
I think it is pretty clear that if that is the plain meaning... and I agree that it is... that Congress could not have intended the Commission to reject a tariff after it already accepted it.
Congress would have used the word "strike", I believe, if it were talking about the type of authority that counsel has indicated that the Commission needs because to strike a tariff it could do that after it was already effective, strike it from its record.
But, of course, if it had meant that, too, it would also have provided procedural remedies, and it would not have needed to provide for the suspension and investigation authority.
I think that is all I have.
Chief Justice Warren E. Burger: Do you have anything further, Mr. Phillips?
ORAL ARGUMENT OF CARTER G. PHILLIPS, ESQ., ON BEHALF OF PETITIONERS -- REBUTTAL
Carter G. Phillips: Mr. Chief Justice, and may it please the Court:
Justice Stevens, I may have been a little short in my answer to your question on whether there was a square conflict between this decision and the Aberdeen case.
In our view there is a conflict over the interpretation of the rejection language.
In order to avoid a conflict one would have to find that the missymbolization rule is itself an abuse of discretion or not consistent with the statutory authority.
So there is a conflict.
It is not one that could not be avoided, but certainly an ample justification for having granted the writ of certiorari in this case.
With regard to the scope of these various powers that are available, one point that I probably could have made earlier with regard to the difference between the suspension and the rejection authority that the Commission exercises here is that the power to suspend is expressly limited to the proposed tariffs whereas rejection is in no way limited to any kinds of times limits--
Unidentified Justice: Can I ask just one question?
Does it require any kind of a hearing under the proposed rule?
Carter G. Phillips: --The proposed rules themselves do not discuss what hearing would be provided for.
The Tariff Integrity Board is made mention of, and the Commission at that time did expect that the Tariff Integrity Board would be the body that would proceed on these matters.
However, the Eleventh Circuit declared the process followed by the Tariff Integrity Board to be unlawful, and the Tariff Integrity Board is for all intents and purposes defunct.
It is the Commission's intention to follow a complaint and full hearing procedure just as it would on any other investigation.
Unidentified Justice: Before the rejection or after?
Carter G. Phillips: After rejection.
Unidentified Justice: After--
Carter G. Phillips: After the effective date you mean?
Unidentified Justice: --No, the tariff is filed and goes into effect and then they think they found a violation.
Carter G. Phillips: Right.
Unidentified Justice: Do they have to have some kind of hearing to determine there was a violation before they reject, or they just go ahead and reject?
Carter G. Phillips: No, they file a complaint suggesting rejection and then go ahead and proceed with the entire... the same process they use for any other post-effective action on a particular rate that exists.
Finally, with regard to the American Trucking Association case, there is no indication in the 1980 Act that Congress in any way meant to modify that.
It did restrict the Commission's authority substantively to deal with rate bureaus.
It in no way intended to modify the Commission's ability to enforce the Act, and indeed expressly stated that it retained the same authority to deal with overcharges that it had always had so that American Trucking is still good authority and justifies rejection of the Court of Appeals' decision in this case.
If there are no further questions.
Chief Justice Warren E. Burger: Thank you, gentlemen.
The case is submitted.
Unidentified Justice: The Honorable Court is now adjourned until tomorrow at 10:00.