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NATIONAL SMALL SHIPMENTS TRAFFIC CONF. v. UNITED S

December 24, 1974

The National Small Shipments Traffic Conference, Inc., et al., Plaintiff,
v.
United States of America and Interstate Commerce Commission, Defendant.



The opinion of the court was delivered by: STEWART

STEWART, District Judge:

Plaintiffs, national associations of shippers, filed this action *fn1" on March 19, 1974, challenging the validity of special permission orders *fn2" issued February 7 and 8, 1974 by the Interstate Commerce Commission ("ICC") *fn3" authorizing six percent fuel surcharges for motor carriers. *fn4" The complaint alleges that these special permission orders of the ICC are unlawful because, inter alia, they were approved in violation of the ICC's statutory rules and requirements, they were an abuse of discretion, they were violative of the Administrative Procedure Act and they were in contravention of the National Transportation Policy. *fn5"

Oral argument was held before this three-judge panel on May 9, 1974, at which time plaintiffs announced that they were contracting the scope of the relief sought. Instead of requesting that the ICC's special permission orders be set aside in toto, plaintiffs urged that they be set aside only insofar as they applied to general commodities tariffs of general commodities bureaus. *fn6" The thrust of this change was to exclude from the relief sought so-called owner-operators, truckers who concededly were affected most by the sharp rises in fuel prices during the past year and a half. The general commodities carriers, on the other hand, generally employed their own drivers, and spent a smaller percentage of their total revenues on fuel costs. Consequently, they were presumably less in need of the six percent fuel surcharge authorized by the ICC than the owner-operators. Plaintiffs contend that these general commodities carriers in fact received a windfall as a result of the fuel surcharges authorized for all motor common carriers.

 On July 10, 1974, the ICC issued a report and order in Ex Parte No. MC-92, Investigation of Impact of Rising Costs on Motor Carriers, which declared that its challenged special permission orders would expire on August 26, 45 days from the report's service date, July 10, 1974. *fn7" Subsequently, by order of July 18th, the Commission stated that all surcharges instituted pursuant to its special permission orders not voluntarily cancelled by August 26, 1974, would be declared void and cancelled on that date, the expiration date of the special permission orders.

 Following this turn of events, we requested the parties to consider whether the present action had become moot by reason of the expiration of the challenged special permission orders.

 Plaintiffs contend that notwithstanding the expiration of the special permission orders issued in February this action is not moot. They state three arguments against mootness: (1) the decision on the merits here would be determinative of possible future litigation involving the validity of the ICC's orders; (2) the issues here are likely to recur; and (3) the issues here are of great public importance. We shall consider each of these arguments in turn.

 I.

 As the Supreme Court has noted, "The inability of the federal judiciary 'to review moot cases derives from the requirement of Article III of the Constitution under which the exercise of judicial power depends upon the existence of a case or controversy.'" DeFunis v. Odegaard, 416 U.S. 312, 316, 94 S. Ct. 1704, 40 L. Ed. 2d 164 (1974). The Court has also stated that it has no power to issue advisory opinions and that "federal courts are without power to decide questions that cannot affect the rights of litigants in the case before them." North Carolina v. Rice, 404 U.S. 244, 246, 30 L. Ed. 2d 413, 92 S. Ct. 402 (1971).

 Plaintiffs contend that although this action will not presently affect the litigants, it may determine the right of plaintiffs -- or their individual members -- to bring a subsequent antitrust action to recover refunds or reparations collected by carriers under the allegedly invalid special permission orders. *fn8" Plaintiffs maintain that a decision by this court invalidating the special permission orders is a necessary predicate to the bringing of such an antitrust action. Plaintiffs argue that an exception to the mootness doctrine is warranted "[if] there is substantial likelihood that the decision of the court will be determinative in some future litigation between the same parties or their privies. . . ." Meyers v. Jay Street Connecting Railroad, 288 F.2d 356, 359 (2d Cir. 1961).

 We believe that Meyers is distinguishable from the instant case, and, furthermore, that a finding of mootness here would not preclude a determination of the merits in a subsequent antitrust action. Meyers involved an appeal by a railroad and four of its officers and directors from an order of the district court enjoining them from abandoning certain railroad tracks until a certificate of the Interstate Commerce Commission permitting such abandonment became effective. Before the appeal was heard, the ICC issued the required certificate. In this context the court considered whether the ICC's action had mooted the appeal, and found that it had not. The court held that the appeal was not moot since the preliminary injunction was conditioned upon the giving of a $50,000 bond to cover the railroad's losses in the event that a permanent injunction was found to be improper. The court predicted that there was an "overwhelming" likelihood that the railroad would bring a subsequent suit on the bond if victorious on appeal. The court concluded that if it were to hold the case moot, with a direction to the district court to vacate its injunction so that that finding would not be res judicata between the parties, the issue of whether the injunction properly could have been issued would have to be reargued in a later action to obtain judgment on the bond. Thus, the court found that considerations of judicial economy, as well as the continuing adverseness of the parties, militated against a finding of mootness.

 In the instant case the situation is different. Here there has been no initial determination of the validity of the ICC's special permission orders. If we determine that this case is moot, the validity of the ICC's orders would be litigated for the first time in any subsequent action which may be brought. Furthermore, we do not think that there is an "overwhelming" likelihood that a subsequent antitrust action will be brought. Plaintiffs have frequently indicated that they might bring an antitrust action to collect reparations from the carriers, but have never stated a definite intention to do so. *fn9" We think it would be inappropriate for this court to decide the merits of this case based upon a speculative possibility that a later action might be brought involving the same or similar parties. *fn10"

 More important, we do not believe that a finding of mootness here would preclude plaintiffs or their privies from bringing a later antitrust action, as plaintiffs contend. *fn11" Plaintiffs concede that any antitrust action must fail unless the ICC's special permission orders are held invalid. They point out that the ICC's special permission orders can only be found invalid in an action brought pursuant to the Urgent Deficiencies Act, 28 U.S.C. §§ 2321-25, such as the one here. That Act requires that actions "to enforce, suspend, enjoin, annul or set aside in whole or in part any order of the Interstate Commerce Commission other than for the payment of money or the collection of fines, penalties and forfeitures, . . ." shall be brought "by or against the United States." 28 U.S.C. §§ 2321, 2322. The Act further provides that when injunctive relief is sought the action must be brought before a three-judge court, pursuant to 28 U.S.C. § 2284 and § 2325. In addition, the Act provides that the ICC and any party or parties in interest to the proceeding before the Commission may intervene as of right. 28 U.S.C. § 2323.

 Plaintiffs cite to us several cases for the proposition that where an antitrust action is brought directly or indirectly involving the validity of ICC orders, the validity of those orders must perforce be determined in a prior proceeding before a three-judge court pursuant to the Urgent Deficiencies Act. REA Express, Inc. v. Alabama Great Southern Railroad Co., 343 F. Supp. 851 (S.D.N.Y. 1972), aff'd, 412 U.S. 934, 37 L. Ed. 2d 393, 93 S. Ct. 2774 (1973); Schwartz v. Bowman, 244 F. Supp. 51 (S.D.N.Y. 1965), aff'd on the opinion below, 360 F.2d 211 (1966), cert. denied, 385 U.S. 921, 87 S. Ct. 230, 17 L. Ed. 2d 145 (1966); United States v. Railway Express Agency, 101 F. Supp. 1008 (D. Del. 1951). Plaintiffs' reliance on those cases is misplaced. In those cases, the courts held that an action which directly or indirectly involved the validity of ICC orders, including an action for damages only, must be brought under the Urgent Deficiencies Act before a three-judge court. *fn12" The courts found that a single judge did not have jurisdiction to entertain such actions. Contrary to plaintiffs' understanding, however, none of those courts indicated that two proceedings -- one to challenge the ICC orders, and a second to decide the merits of the antitrust (or other) damages claim -- would be necessary. Nor could any of those courts properly have done so. In a case quite similar to the instant case, the Supreme Court held, in finding the action before it moot, that a single subsequent action would suffice to recover damages and to contest the validity of certain ICC orders whose validity was not determined by reason of the mooting of the case. A. L. Mechling Barge Lines, Inc. v. United States, 368 U.S. 324, 7 L. Ed. 2d 317, 82 S. Ct. 337 (1961). In Mechling, the ICC granted certain railroads temporary authority, pending further consideration, to charge less for certain long hauls of grain than for shorter hauls over the same line or route. Appellant Barge Lines then brought suit, alleging that the proposed railroad rates threatened the extinction of competition. Jurisdiction was founded, as here, on the Urgent Deficiencies Act. As in the instant case, the appellants sought injunctive relief on the ground that the ICC had issued an order in excess of its statutory authority and in violation of the Administrative Procedure Act. While the action was pending before the three-judge district court, the railroads abolished the challenged long haul-short haul discrimination. The railroads and the ICC then moved for dismissal of the pending action on the ground that the action was moot and on the ground that the district court lacked jurisdiction to grant a declaratory judgment. The district court granted the motions to dismiss, and appellant Barge Lines appealed.

 Appellants, like plaintiffs in the instant case, argued that the action was not moot, contending that the ICC's temporary order authorizing the rate hike would serve as a defense to any later action by appellants against the railroads for damages suffered while the allegedly unlawful long haul-short haul rates were in effect. The appellant Barge Lines maintained that unless the Supreme Court decided the validity of the ICC order in that action, they would be precluded from attacking the order collaterally, and that "the order must be set aside, if at all, by statutory direct review." 368 U.S. at 329. The court rejected this argument, finding the case moot and holding that its disposition did not preclude a determination "on any appropriate future occasion" of the validity of ...


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