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GARDNER v. UNITED STATES

July 12, 1946

GARDNER et al.
v.
UNITED STATES



The opinion of the court was delivered by: O'CONNELL

In this suit, various carriers ask to have set aside an order of the Interstate Commerce Commission which will result in a decrease of 25 cents per gross ton in the rates presently charged for hauling anthracite coal from the area of origin to the consuming area in and around New York City. *fn1" The proceedings before the Commission began in 1937 with the filing of a complaint by 41 principal producers and shippers of anthracite. After full hearings, held from time to time, and in which the carriers participated, the Commission on October 11, 1943, issued a report dismissing the complaint and leaving the rates unchanged. *fn2" Later, the proceedings were reopened for reconsideration and rehearing, which was held. As a consequence, the Commission reversed its prior ruling and on October 10, 1945, issued the order which required the 25 cents per long ton reduction. On January 14, 1946, the carriers filed a petition for a further rehearing which was denied by the Commission

We are urged to set aside the order on various grounds, but only two are sufficiently impressive as to merit extended discussion.

 I.

 Commission's Denial of Petition for Further Rehearing.

 Plaintiff carriers concede that a petition for rehearing is addressed to the discretion of the Commission and not to that of the reviewing court. Interstate Commerce Commission v. Jersey City, 1944, 322 U.S. 503, 64 S. Ct. 1129, 88 L. Ed. 1420. But, they contend, by January 14, 1946, conditions had so far changed from those existing in April 1944, date of the last hearing, that it was incumbent on the Commission to stay the effective date of its order and thus afford to the plaintiffs an opportunity of showing the new situation. The carriers maintain that the termination of hostilities caused a decline in traffic volume whereas railroad operating expenses were continuing to increase. Further, they argue that anthracite prices have increased since the date of the last hearing and the date of the Commission's order. In view of these factors, the carriers maintain that the denial of the petition for rehearing constituted an abuse of discretion within the doctrine of Atchison, Topeka & Santa Fe Railway Co. v. United States, 1932, 284 U.S. 248, 52 S. Ct. 146, 76 L. Ed. 273.

 At the hearing before us, we admitted evidence de novo by the carriers for the purpose of showing that a drastic change had thus occurred. But, we ind nothing in the evidence presented, nor within the confines of the record itself, to warrant the conclusion that the change in conditions is so great as to bring about a new economic era. That the Atchison case, which dealt with the effect of the late great depression, is not loosely to be applied is apparent from United States v. Pierce Auto Freight Lines, 66 S. Ct. 697, 697, where Mr. Justice Rutledge, speaking for the Supreme Court, stated:

 'The court rendered its decision on September 20, 1944, suggesting that the Commission had improperly denied the petition for rehearing. Its view was that the record was so stale, particularly in view of the influence of the war upon transportation facilities, that application of the doctrine of Atchion, Topeka & Santa Fe Ry. Co. v. United States, 284 U.S. 248, 52 S. Ct. 146, 76 L. Ed. 273, was proper.

 'That case, as has been indicated more than once, was 'promptly restricted * * * to its special facts, United States v. Northern Pac. R. Co., 288 U.S. 490, 53 S. Ct. 406, 77 L. Ed. 914, and it stands virtually alone.' Interstate Commerce Commission v. Jersey City, 322 U.S. 503, 515, 64 S. Ct. 1129, 1135, 88 L. Ed. 1420; see also Baltimore & Ohio R. Co. v. United States, 298 U.S. 349, 389, 56 S. Ct. 797, 817, 80 L. Ed. 1209. Except in the single instance, it has been held consistently that rehearing before administrative bodies are addressed to their own discretion. Interstate Commerce Commission v. Jersey City, supra. Only a showing of the clearest abuse of discretion could sustain an exception to that rule. The Commission was well acquainted with the impact of the war upon facilities for transport and upon the transportation business in general. In addition to its own expert knowledge concerning such matters, it had before it not only the facts set forth in the petition for rehearing but also those alleged in the extended replies filed by the applicants.'

 What Mr. Justice Rutledge there stated is here pertinent. In our opinion, the post-war period has not brought about such a drastic change in conditions as to warrant the application of the Atchison, Topeka and Santa Fe doctrine. Accordingly, we find no abuse of discretion in the Commission's denial of the petition for further rehearing.

 II.

 Constitutionality of the Commission's Order.

 It is argued on behalf of the carriers that the Commission's order is violative of the due process clause. U.S.Constitution, Fifth Amendment.

 Argument for the carriers maintains that the Commission's order was made without basic findings or upon findings made without evidence to support it and that its effect is confiscatory.

 Before we turn to a consideration of these questions, we refer to certain applicable general principles as recently restated by the Supreme Court. In reviewing an order of the Interstate Commerce Commission, we must accord to it a presumption of validity. 'Moreover, the Commission's order does not become suspect by reason of the fact that it is challenged. It is the product of expert judgment which carries a presumption of validity. And he who would upset the rate order under the Act carries the heavy burden of making a convincing showing that it is invalid because it is unjust and unreasonable in its consequences.' Federal Power Commission v. Hope Natural Gas Co., 1944, 320 U.S. 591, 602, 64 S. Ct. 281, 288, 88 L. Ed. 333; see also, Interstate Commerce Commission v. Jersey City, supra, 322 U.S. at page 513, 64 S. Ct. at page 1134, 88 L. Ed. 1420: "So long as there is warrant in the record for the judgment of the expert body it must stand. * * * 'The ...


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