Time Incorporated v. United States/Opinion of the Court

Petitioners are interstate motor common carriers, certificated by the Interstate Commerce Commission (I.C.C.) under the Motor Carrier Act of 1935. Section 217 of that Act, 49 U.S.C. § 317, 49 U.S.C.A. § 317, requires such carriers to file their transportation charges as tariffs with the I.C.C. These tariffs remain effective until suspended or changed in accordance with specified procedures, and so long as they are effective carriers are forbidden to charge or collect any rate other than that provided in the applicable tariff.

These cases present in common a single question under the Motor Carrier Act: Can a shipper of goods by a certificated motor carrier challenge in post-shipment litigation the reasonableness of the carrier's charges which were made in accordance with the tariff governing the shipment?

In No. 68, T.I.M.E. transported several shipments of scientific instruments for the United States from Oklahoma to California. One of the shipments, illustrative of all involved in this litigation, originated at Marion, Oklahoma, and was carried over the lines of petitioner and a connecting carrier to Planehaven, California. At the time, the petitioning carrier had on file with the I.C.C. a tariff relating to such shipments which specified a through rate from Marion to Planehaven of $10.74 per hundredweight. Petitioner was also subject to tariffs which provided a rate of $2.56 per hundredweight from Marion to El Paso, Texas, and of $4.35 per hundredweight from El Paso to Planehaven. The through rate thus exceeded to combination rate by $3.83. T.I.M.E. charged and collected on the basis of the through rate. On postpayment audit by the General Accounting Office under § 322 of the Transportation Act of 1940, 54 Stat. 955, 49 U.S.C. § 66, 49 U.S.C.A. § 66, that office concluded that the combination rather than the through rate was applicable to this shipment and required T.I.M.E. to refund the difference between the sum collected under the through tariff and that which would have been due under the combination tariffs. This T.I.M.E. did under protest.

Thereafter T.I.M.E. brought suit under the Tucker Act, 28 U.S.C. § 1346(a)(2), 28 U.S.C.A. § 1346(a)(2), claiming that the through tariff was applicable to the shipment and that it was thus entitled to recovery the difference between the through and combination rates. The Government defended on the ground that the combination rate was applicable, and alternatively contended that if the through tariff were applicable the rate specified therein was unreasonably high insofar as it exceeded the combination rate. It asked that T.I.M.E.'s suit be stayed to permit the Government to bring a proceeding before the I.C.C. to determine the reasonableness of the through rate. The District Court in an unreported opinion held that the through rate was applicable, and that neither it nor the I.C.C. had power to pass upon the Government's contention that such rate was as to th pa st unreasonable. Accordingly, the District Court entered summary judgment for T.I.M.E.

The Government appealed, accepting the District Court's determination as to the applicability of the through rate, but contending that the District Court had erred in refusing to refer to the I.C.C. the issue of the reasonableness of that rate as to past shipments. The Court of Appeals reversed, holding that the Government was entitled to an I.C.C. determination upon the question of reasonableness, and that the fact that the Motor Carrier Act gives the I.C.C. no power to award reparations as to admittedly governing past rates does not prevent that body from passing on the question of past reasonableness when that issue arises in litigation in the courts. 252 F.2d 178.

In No. 96, petitioner Davidson transported four shipments of goods for the United States from Poughkeepsie, N.Y., to Bellbluff, Va., and billed the United States on the basis of concededly applicable filed tariffs. On post-payment audit the General Accounting Office concluded that a part of these charges was unreasonable and should be refunded to the United States. Davidson refunded under protest the sum demanded, which amounted to $18.34, and then brought suit under the Tucker Act to recover the refund. The Government defended on the sole ground that the applicable rate had been unreasonable. The District Court, without opinion, granted Davidson summary judgment, but on the Government's appeal the judgment was reversed, the Court of Appeals holding that the Government could defend on 'unreasonableness' grounds, and directing a referral to the I.C.C. of the issue as to the reasonableness of the rate in question. 104 U.S.App.D.C. 72, 259 F.2d 802.

We granted certiorari in both cases because of the suggestion that the result reached by the Courts of Appeals conflicted with this Court's decision in Montana-Dakota Utilities Co. v. Northwestern Pub. Serv. Co., 341 U.S. 246, 71 S.Ct. 692, 95 L.Ed. 912, and in order to settle the questions of statutory interpretation involved. 358 U.S. 810, 79 S.Ct. 27, 3 L.Ed.2d 55.

The courts below held that the right of the United States to resist on the ground of unreasonableness the payment of the charges incurred by it was one deriving from the common law and preserved by § 216(j) of the Motor Carrier Act. In this Court the Government, although defending this ground of decision, relies primarily on the proposition that the Motor Carrier Act itself creates a judicially enforceable right in a shipper to be free from the exaction of unreasonable charges as to past shipments even though such charges reflect applicable rates duly filed with the I.C.C. The Government concedes that whatever the source of the asserted right may be, the question of the reasonableness of past rates cannot itself be decided in the courts, but takes the position that when such question arises in court litigation it may properly be referred to the I.C.C.for decision, and the results of that adjudication used to determine the respective rights of the litigants.

The contention that the Motor Carrier Act itself creates a cause of action or affords a defense with respect to the recovery of unreasonable rates rests on the provisions of s 216(b) and (d) of the Act, 49 U.S.C. § 316(b, d), 49 U.S.C.A. § 316(b, d), which provide as to interstate motor carriers:

'(b) It shall be the duty of every (such) common carrier * *      * to establish, observe, and enforce just and reasonable      rates, charges, and classifications, and just and reasonable      regulations and practices relating thereto *  *  *.

'(d) All charges made for any service rendered or to be     rendered by any (such) common carrier *  *  * shall be just and      reasonable, and every unjust and unreasonable charge for such      service or any part thereof, is prohibited and declared to be      unlawful. * *  * '

The Government urges that this language imposes a statutory duty on motor carriers not to charge or collect other than 'reasonable' rates, and asks us to imply a cause of action under the Motor Carrier Act for any shipper injured by violation of that duty. We cannot agree. As this Court recognized in Montana-Dakota Utilities Co. v. Northwestern Pub. Serv. Co., 341 U.S. 246, 251, 71 S.Ct. 692, 695, 95 L.Ed. 912, language of this sort in a statute which entrusts rate regulation to an administrative agency in itself creates only a 'criterion for administrative application in determining a lawful rate' rather than a 'justiciable legal right.' In Montana-Dakota it was held that the Federal Power Act, which like the Motor Carrier Act expressly declares unreasonable rates to be 'unlawful,' does not create a cause of action for the recovery of allegedly unreasonable past rates. In the absence of any indication that Congress intended that despite the absence of any reparations power in the Federal Power Commission the federal courts should entertain suits for reparation of unreasonable rates, and refer to the Commission the controlling issue of past unreasonableness, the Court declined to permit the Commission to accomplish indirectly through such a proceeding that which Congress did not allow it to accomplish directly.

It is true that under Parts I and III of the Interstate Commerce Act, relating respectively to rail and water carriers, a shipper may litigate as to the reasonableness of past charges even if those charges were based on the applicable and effective filed rates. The structure and history of Part II (the Motor Carrier Act), however, lead to the conclusion that here, as in the Federal Power Act, Congress did not intend to give shippers a statutory cause of action for the recovery of allegedly unreasonable past rates, or to enable them to assert 'unreasonableness' as a defense in carrier suits to recover applicable tariff rates.

The very provisions of Part I, and their counterparts in Part III, which give a right of action to shippers against carriers for damages incurred by carrier violations of the Act and provide the mechanics for the enforcement of that right are conspicuously absent in the Motor Carrier Act. Thus, whereas § 8 of Part I provides that 'any common carrier subject to the provisions of this chapter (who) shall do * *  * any act *  *  * in this chapter *  *  * declared to be unlawful *  *  * shall be liable to the person or persons injured thereby for the full amount of the damages sustained *  *  * ,' Part I h as no comparable provision. Again, whereas § 9 of Part I gives an injured shipper the right to sue in the I.C.C. or in the Federal District Court, Part II contains no comparable provision. In addition, §§ 13(1) and 16 of Part I give a shipper claiming reparation the right to proceed in the Commission and to enforce his reparation award in the courts, and Part II contains no comparable provisions.

To hold that the Motor Carrier Act nevertheless gives shippers a right of reparation with respect to allegedly unreasonable past filed tariff rates would require a complete disregard of these significant omissions in Part II of the very provisions which establish and implement a similar right as against rail carriers in Part I. We find it impossible to impute to Congress an intention to give such a right to shippers under the Motor Carrier Act when the very sections which established that right in Part I were wholly omitted in the Motor Carrier Act.

Further, the I.C.C. itself has consistently recognized that nothing in Part II creates a statutory liability on the part of the carrier for past allegedly unreasonable filed rates. In the hearings which preceded the passage of legislation in 1949 adding to the Motor Carrier Act a statute of limitations on suits to recover amounts paid to carriers in excess of applicable filed rates, proposals were also made to amend the statute by adding to it provisions similar to those already found in §§ 8, 9, 13, and 16 of Part I. The Commission noted that the proposal 'would add to the Interstate Commerce Act a number of new sections which would make common carriers by motor vehicle * *  * liable for the payment of damages to persons injured by them through violations of the act. At present this liability exists only in respect of carriers subject to parts I and III * *  * .' The suggested changes were not adopted. And in 1957 the Commission again recommended amendment of the Motor Carrier Act to provide a remedy for violation of the statute to persons injured thereby, and once more the measure failed of adoption.

In light of the statute and its history, it is plain that if a shipper has a 'justiciable legal right' to recover or resist past motor carrier charges alleged to have been unreasonable, it is necessary to look beyond the Motor Carrier Act for the source of that right.

The Government urges that even if the Motor Carrier Act does not grant the right which is claimed here, the Act must at least be read to preserve a pre-existing common-law right of that kind. It relies on § 216(j) of the statute, 49 U.S.C. § 316(j), 49 U.S.C.A. § 316(j), as showing a congressional intention to confirm such a right in its statement that nothing in § 216 'shall be held to extinguish any remedy or right of action not inconsistent herewith.' The contention is that the common law recognized the right of a shipper by common carrier to recover exorbitant rates paid under protest, and that although the doctrine of primary jurisdiction requires that the issue of whether rates which are retrospectively challenged were in fact 'unreasonable' be determined by the I.C.C., the common-law right may be vindicated in a suit in the courts through referral of the issue of 'unreasonableness' to the Commission.

The saving clause of § 216(j) must be read in light of the judicial decisions interpreting Part I of the Interstate Commerce Act before 1935, for the course of those decisions illuminates the significance of the striking differences which Congress saw fit to make between the provisions of Part I and those of the Motor Carrier Act. The landmark case is Texas & Pacific R. Co. v. Abilene Cotton Oil Co., 204 U.S. 426, 27 S.Ct. 350, 51 L.Ed. 553. There a shipper sued in a state court to recover the difference between an allegedly unreasonable charge exacted from it by a rail carrier pursuant to tariffs filed by the carrier with the I.C.C. and what was claimed would have been a just and reasonable charge. One of the issues before this Court was whether any common-law right to recover an exorbitant common carrier freight charge paid under protest survived the passage of the Interstate Commerce Act. The Court held, despite the existence in Part I of a saving clause much broader in scope than that here involved, that because under the statutory scheme only the I.C.C. could decide in the first instance whether any filed rate was 'unreasonable' either as to the past or future, any common-law right was necessarily extinguished as 'absolutely inconsistent' with recognition of the Commission's primary jurisdiction. It is important to note that this conclusion did not rest upon the fact that under Part I the I.C.C. had reparations authority with respect to unreasonable charges paid by shippers, but instead was evidently dictated by the broader conclusion that the crucial question of reasonableness could not be decided by the courts.

Since the Government concedes that under Part II, as under Part I, the issue of the unreasonableness of rates cannot be adjudicated in the courts, it would seem to follow that the common-law right which the Government urges as surviving under § 216(j) cannot in fact survive, since that clause preserves only 'any remedy or right of action not inconsistent' with the statutory scheme. The Government urges, however, that there is nothing actually inconsistent with the Commission's primary jurisdiction in recognizing the survival of a common-law right, because the demands of primary jurisdiction can be satisfied by referral of the question of the reasonableness of the assailed rate to the I.C.C., and that although the Commission concededly has no independent authority to entertain and adjudicate a claim for reparations, it nevertheless should be permitted in effect to exercise such an authority as an adjunct to a judicial proceeding.

The question is, of course, one of statutory intent. We do not think that Congress, which we cannot assume was unaware of the holding of the Abilene case that a common-law right of action to recover unreasonable common carrier charges is incompatible with a statutory scheme in which the courts have no authority to adjudicate the primary question in issue, intended by the saving clause of § 216(j) to sanction a procedure such as that here proposed. It would be anomalous to hold that Congress intended that the sole effect of the omission of reparations provisions in the Motor Carrier Act would be to require the shipper in effect to bring two lawsuits instead of one, with the parties required to file their complaint and answer in a court of competent jurisdiction and then immediately proceed to the I.C.C. to litigate what would ordinarily be the sole controverted issue in the suit. No convincing reason has been suggested to us why Congess would have wished to omit a direct reparations procedure, as it has concededly here done, and yet leave open to the shipper the circuitous route contended for.

To permit a utilization of the procedure here sought by the Government would be to engage in the very 'improvisation' against which this Court cautioned in Montana-Dakota, supra, in order to permit the I.C.C. to accomplish indirectly what Congress has not chosen to give it the authority to accomplish directly. In the absence of the clearest indication that Congress intended that the Motor Carrier Act should preserve rights which could be vindicated only by such an improvisation, we must decline to consider a defense which 'involves only issues which a federal court cannot decide and can only refer to a body which also would have no independent jurisdiction to decide. * *  * ' Montana-Dakota, supra, 341 U.S. at page 255, 71 S.Ct. at page 697. The Government's reliance upon United States v. Western Pacific R. Co., 352 U.S. 59, 77 S.Ct. 161, 1 L.Ed.2d 126, is misplaced, for in that case, involving Part I of the Interstate Commerce Act, the authority of the I.C.C. to determine the reasonableness of past filed rates in aid of court litigation was undoubted. The case decided no more than that referral to the I.C.C. of the issue of 'unreasonableness' involved in the shipper's defense to the carrier's timely Tucker Act suit was not foreclosed by the fact that affirmative reparations relief before the Commission would have been barred by limitations. It has no bearing on the question whether a judicial remedy in respect of allegedly unreasonable past rates survived the passage of the Motor Carrier Act.

It is pointed out that the I.C.C. has long claimed the authority to make findings as to the reasonableness of past motor carrier rates embodied in tariffs duly filed with the Commission. It is true that in a series of cases beginning with Barrows Porcelain Enamel Co. v. Cushman Motor Delivery Co., 11 M.C.C. 365, decided in 1939, divisions of the Commission, and eventually the Commission itself, Bell Potato Chip Co. v. Aberdeen Truck Line, 43 M.C.C. 337, announced that the I.C.C. possessed such authority. But in these cases the anterior question now before us, whether a shipper has a right, derived from outside the statute, to put the question of the reasonableness of past rates in issue in judicial proceedings, was given only cursory consideration or else wholly ignored. The cases devoted themselves to searching out authorization in the Act for I.C.C. participation, by adjudication as to past unreasonableness, in the vindication of whatever reparation rights might exist. The Government is able to point to only two cases in addition to the present ones, in the 24 years since passage of the Motor Carrier Act, in which courts have appeared to assume that the issue of reasonableness of past motor carrier rates was litigable, and in neither of these cases was the question given other than the most cursory attention. Under these circumstances the issue before § c annot fairly be said to be foreclosed by long-standing interpretation and understanding.

We are told that Congress has long been aware that the Commission was of the view that a common-law action for recovery of unreasonable rates paid to a motor carrier, with referral to the Commission of the issue of unreasonableness, would lie, and that its failure to legislate in derogation of this view implies an approval and acceptance of it. But it appears that each time the Commission's views in this regard were communicated to committees of Congress, it was in connection with a request by the Commission for legislation which would have given to shippers a cause of action under the statute and granted to the Commission the authority to award reparations, and each time that request was rejected. Had Congress been asked legislatively to overrule the doctrines enunciated in Bell Potato Chip, supra, and declined to do so, that fact would no doubt have been entitled to some weight in our interpretation of the Act. But we do not think that from the failure of Congress to grant a new authority any reliable inference can permissibly be drawn to the effect that any authority previously claimed was recognized and confirmed.

Finally, it is contended that denial of a remedy to the shipper who has paid unreasonable rates is to sanction injustice. The fact that during the 24-year history of the Motor Carrier Act shippers have sought to secure adjudications in the I.C.C. as to the reasonableness of past rates on only a handful of occasions, despite the Commission's invitation to shippers to pursue that course in the line of cases culminating in Bell Potato Chip, supra, strongly suggests that few occasions have arisen where the application of filed rates has aggrieved shippers by motor carrier. Furthermore, this contention overlooks the fact that Congress has in the Motor Carrier Act apparently sought to strike a balance between the interests of the shipper and those of the carrier, and that the statute cut significantly into pre-existing rights of the carrier to set his own rates and put them into immediate effect, at least so long as they were within the 'zone of reasonableness.' Under the Act a trucker can raise its rates only on 30 days' prior notice, and the I.C.C. may, on its own initiative or on complaint, suspend the effectiveness of the proposed rate for an additional seven months while its reasonableness is scrutinized. Even if the new rate is eventually determined to be reasonable, the carrier concededly has no avenue whereby to collect the increment of that rate over the previous one for the notice or suspension period. Thus although under the statutory scheme it is possible that a shipper will for a time be forced to pay a rate which he has challenged and which is eventually determined to be unreasonable as to the future, as when the suspension period expires before the I.C.C. has acted on the challenge, it is ordinarily the carrier, rather than the shipper, which is made to suffer by any period of administrative 'lag.'

For the foregoing reasons the judgment of the Court of Appeals in each of these cases must fall.

Reversed.

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