Arrow Transportation Co. v. Southern Railway Co
In Arrow Transportation Co. v. Southern R. Co., 372 U.S. 658 (1963), the Commission had suspended a railroad's proposed rates for the statutory seven-month period, and the railroad had voluntarily deferred the proposed rate for an additional five months.
When the Commission had not reached a final decision within that period, the railroad announced its intent to adopt the new rates.
In a suit brought to enjoin the railroad from effectuating that change, we held that the courts were without power to issue such an injunction.
From the language and history of 15 (7) of the Interstate Commerce Act, the Supreme Court concluded that Congress had vested exclusive power in the Commission to suspend rates pending its final decision on their lawfulness, and had deliberately extinguished judicial power to grant such relief.
The Supreme Court held that in enacting 49 U.S. C. 15 (7), Congress had intentionally vested "in the Commission the sole and exclusive power to suspend" and withdrew "from the judiciary any pre-existing power to grant injunctive relief."
The Supreme Court specifically acknowledged that "[i]t cannot be said that the legislative history of the grant of the suspension power to the Commission includes unambiguous evidence of a design to extinguish whatever judicial power may have existed prior to [the establishment of suspension powers in the Commission] to suspend proposed rates." The Arrow Court was asked to extend by injunction the statutory seven-month suspension period, see 49 U.S. C. 15 (7), because the Commission had not reached a decision on the lawfulness of the proposed rates at the end of the suspension period and the rail carriers, following a period of voluntary suspension, were threatening to implement the rate change without awaiting final agency action.
Despite the ambiguity of the legislative history, the Court, upon careful examination of the character of and reasons for the suspension scheme, concluded that Congress must have intended to deprive the federal courts of the power to suspend rates pending completion of agency action and thus that the traditional equitable powers of the federal courts had been overridden to that extent. But, as detailed consideration of the factors that motivated the decision in Arrow reveals, this litigation presents a significantly different problem.
The Arrow Court felt that an injunction extending the suspension period pending final agency action would involve a serious, unintended intrusion on the primary jurisdiction of the Commission.
This problem of primary jurisdiction had two aspects in Arrow. First, where the issue is the reasonableness of proposed rates, an application for an injunction against implementation of those rates pending final agency action would necessarily require a federal court "to pass before final Commission action upon the question of reasonableness of a rate," 372 U.S., at 671, thereby providing, in effect, an advisory judicial opinion to the Commission on an issue which Congress intended that the Commission decide in the first instance. Certainly, the Commission's expertise in matters of rail carrier operations and economics is well recognized, and Arrow clearly indicates that the courts should not interfere with the exercise of that expertise.
In Arrow Transportation Co. v. Southern Railway Co., 372 U.S. 658, 83 S.Ct. 984, 10 L.Ed.2d 52 (1963), the Supreme Court held that under the Interstate Commerce Act, now codified at 49 U.S.C.A. 10101 et seq. (1979), the courts have no power to suspend railroad rates pending a hearing by the Interstate Commerce Commission (ICC).
The Court said that the power to suspend rates is vested solely and exclusively in the ICC. Id. at 667, 83 S.Ct. at 988.
The Court reasoned that any judicial authority to suspend rates "would create the hazard of forbidden judicial intrusion into the administrative domain," id. at 670, 83 S.Ct. at 990, because it necessarily would involve inquiry into the reasonableness of rates. Id.