Filed: Jan. 15, 1997
Latest Update: Mar. 02, 2020
Summary: Opinions of the United 1997 Decisions States Court of Appeals for the Third Circuit 1-15-1997 Union Pacific RR v. Ametek Inc Precedential or Non-Precedential: Docket 96-7015 Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_1997 Recommended Citation "Union Pacific RR v. Ametek Inc" (1997). 1997 Decisions. Paper 13. http://digitalcommons.law.villanova.edu/thirdcircuit_1997/13 This decision is brought to you for free and open access by the Opinions of the Un
Summary: Opinions of the United 1997 Decisions States Court of Appeals for the Third Circuit 1-15-1997 Union Pacific RR v. Ametek Inc Precedential or Non-Precedential: Docket 96-7015 Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_1997 Recommended Citation "Union Pacific RR v. Ametek Inc" (1997). 1997 Decisions. Paper 13. http://digitalcommons.law.villanova.edu/thirdcircuit_1997/13 This decision is brought to you for free and open access by the Opinions of the Uni..
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Opinions of the United
1997 Decisions States Court of Appeals
for the Third Circuit
1-15-1997
Union Pacific RR v. Ametek Inc
Precedential or Non-Precedential:
Docket 96-7015
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_1997
Recommended Citation
"Union Pacific RR v. Ametek Inc" (1997). 1997 Decisions. Paper 13.
http://digitalcommons.law.villanova.edu/thirdcircuit_1997/13
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UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_________________
No. 96-7015
_________________
UNION PACIFIC RAILROAD CO.; MISSOURI PACIFIC RAILROAD CO.;
NORFOLK AND WESTERN RAILWAY CO.; SOUTHERN RAILWAY CO.; BURLINGTON
NORTHERN RAILROAD CO.; CONSOLIDATED RAIL CORPORATION;
CSX TRANSPORTATION CO.
v.
AMETEK, INC.; UNITED STATES OF AMERICA;
SURFACE TRANSPORTATION BOARD
Union Pacific Railroad Co.; Missouri Pacific Railroad Co.;
Norfolk & Western Railway Co.; Southern Railway Co.; Burlington
Northern Railroad Co.; Consolidated Rail Corporation,
Appellants.
_________________
An Appeal from the United States District Court
for the Middle District of Pennsylvania
D.C. No. 90-cv-1396
________________
Argued September 18, 1996
Before: NYGAARD, ROTH, AND ROSENN, Circuit Judges
Filed January 15, 1997
_________________
Paul D. Keenan, Esquire (argued)
Buchanan Ingersoll, P.C.
Two Logan Square, 12th Floor
18th and Arch Streets
Philadelphia, PA 19103
Counsel for Appellants
James E. Howard, Esquire (argued)
William R. Matthews, Esquire
Kirkpatrick & Lockhart, LLP
One International Place
Boston, MA 02110-2637
Counsel for Appellee Ametek, Inc.
Anne K. Bingaman, Assistant Attorney General
1
John J. Powers, Esquire
John P. Fonte, Esquire
Department of Justice
Washington, DC 20530
Counsel for Appellee United States of America
Henri F. Rush, General Counsel
Evelyn G. Kitay, Esquire (argued)
Surface Transportation Board
Washington, DC 20423-0001
Counsel for Appellee Surface Transportation Board
_________________
OPINION OF THE COURT
_________________
ROSENN, Circuit Judge.
The appeal in these consolidated cases raises questions
of first impression in this circuit relating to the symbiotic
power of a United States district court and the Interstate
Commerce Commission (ICC)1 to render judgment for demurrage fees2
against an entity which is not a party to any transportation
contract with a railroad. The plaintiffs, six national freight
carriers (the Interline Railroads) sued Ametek, Inc. in the
1. The ICC Termination Act of 1995 (ICCTA), Pub. L. No. 104-88,
109 Stat. 803, abolished the ICC and transferred many of its rail
functions to the Surface Transportation Board (STB). The
demurrage functions at issue in this proceeding which were
formerly performed by the ICC are vested in the STB by virtue of
49 U.S.C. § 11122, as reenacted by the ICCTA. We will refer to
the agency as the ICC.
2. As to railroads, demurrage is "a charge exacted by a carrier
from a shipper or consignee on account of a failure to load or
unload cars within the specified time prescribed by the
applicable tariffs . . .." Black's Law Dictionary 432 (6th ed.
1990). Railroads charge shippers and receivers of freight
"demurrage" fees if the shippers or receivers detain freight cars
on the rails beyond a designated number of days.
2
United States District Court for the Middle District of
Pennsylvania to recover $297,270 allegedly due under a demurrage
tariff issued by the Panther Valley Railroad Company (Panther
Valley), now defunct. Panther Valley had assigned its demurrage
claim against Ametek to the Interline Railroads. Ametek receives
plastic materials by rail at Nesquehoning, Pennsylvania which it
processes and then ships by rail to the material suppliers'
customers.
The district court, on motion of Ametek, referred one
issue to the ICC: the reasonableness of a demurrage charge. The
ICC, however, determined preliminarily that the tariff had no
application to Ametek because it was neither the consignor nor
consignee of the shipped goods, and had not assumed contractual
liability. The district court adopted the ruling of the ICC and
concluded that Ametek had not entered into any separate agreement
obligating it to pay the demurrage fees. It therefore entered
summary judgment for Ametek and the ICC and denied the Interline
Railroads' motion for summary judgment. We affirm.
I.
The demurrage charges assigned by Panther Valley
allegedly accrued under its tariff during 1987 through 1989
inclusive.3 Ametek's customers ship the raw materials by rail to
3. The plaintiffs premise jurisdiction in their action on 28
U.S.C. § 1337. We have jurisdiction under 28 U.S.C. § 1291, this
being an appeal from a final judgment.
3
Ametek's plant by private rail car. Panther Valley and its
predecessor had provided rail service over a period of about
eight years without demurrage charges. The practice of Ametek's
customers was to alert Ametek as to whether the loaded cars
should be delivered to Ametek promptly or be held on Panther
Valley's tracks for later delivery.
In 1986, Ametek had a need to store privately owned
empty and inbounded loaded rail cars for extended periods of
time. The president of Panther Valley initiated discussions with
Ametek's rail consultant concerning a side track agreement
between Ametek and Panther Valley for such cars. Eventually on
April 22, 1996, Panther Valley's president submitted a proposed
side track agreement to Ametek's vice-president in which Ametek
would lease track to accommodate a seasonal overflow of rail cars
experienced by Ametek. In August 1986, the president of Panther
Valley sent a letter to Ametek setting forth the terms of a
second proposed side track lease agreement. Ametek would pay
Panther Valley 65 cents per car per day stored on Panther Valley
track. For reasons unknown to all involved, the agreement "fell
through the cracks" and was never signed. All parties concede
that if the agreement were in force, Ametek would not be liable
for demurrage fees.
In 1987, Panther Valley unilaterally imposed a
demurrage tariff of $20 per car per day for the first two days
that a company held rail cars beyond a free period of 48 hours.
4
The tariff increased to $30 for each of the next two days, and
$40 for each subsequent day. The parties disagree as to whether
Ametek was informed of this tariff.
In the face of severe financial problems, Panther
Valley, in January 1990, billed Ametek for $297,270 in demurrage
fees for the period March 15, 1987 through October 2, 1989.
Ametek refused to pay the invoice, and suggested that the fair
way to handle the storage problem would be to calculate the
amount Ametek would owe under the aborted lease agreement, which
amounted to $29,664.60. Panther Valley rejected this proposal
because it would not be in its "best financial interest." In
June 1990, Panther Valley ceased operations and assigned the
claim to its creditors, six freight carriers (the Interline
Railroads).
On July 23, 1990, the Interline Railroads brought this
action for demurrage allegedly accrued between March 15, 1987 and
October 2, 1989 (Ametek I). In response to a motion by Ametek,
the district court stayed its proceedings and referred one issue
to the ICC: the reasonableness of Panther Valley's demurrage
charges. The court specifically retained jurisdiction over all
other issues. Subsequently, Ametek filed a separate complaint
with the ICC claiming that the demurrage rates and practices were
unreasonable. The ICC consolidated the proceedings.4
4. Because the ICC never issued any ruling pertinent to the
unreasonable practices complaint, the matter became moot and is
not relevant to this appeal.
5
The ICC stated that before it could determine if the
charges were reasonable, a threshold issue required that it
determine if the tariff could be applied to Ametek at all.
Finding that Ametek was merely the agent of its customers and
neither the consignor nor consignee, the ICC concluded that
Panther Valley could not impose demurrage fees on Ametek. The
ICC relied on Middle Atlantic Conference v. ICC, 353 F. Supp.
1109, 1116-1121 (D.D.C. 1972) (demurrage tariff does not apply to
agent of party to transportation contract). The ICC found that
Ametek did not receive, process, or distribute its own materials,
and that Ametek generally was not the consignor or consignee
designated on the bills of lading.
The Railroads challenged the ICC decision in the United
States District Court pursuant to 28 U.S.C. § 1336(b) by filing
another and separate complaint against the ICC (Ametek II). The
court consolidated Ametek II with Ametek I. The ICC, Ametek, and
the Railroads moved for summary judgment. The court found that
the ICC properly addressed the threshold question whether the
tariff applied to Ametek. The court determined that the ICC
properly concluded that a demurrage tariff did not apply to a
company that is not a party to a contract of transportation. The
court then granted summary judgment for ICC and Ametek. The
Railroads timely appealed to this court.
II.
6
Before we discuss the substantive issues raised by the
appellants, the Interline Railroads, we turn to the threshold
question of the jurisdiction of this court to hear this appeal.
Ametek contends that the district court lacked jurisdiction over
Ametek II because the action did not arise out of the question
referred by the district court as to the reasonableness of the
demurrage charges.5 Thus, it maintains that the district court
lacked subject matter jurisdiction pursuant to 28 U.S.C. §
1336(b), and this court therefore cannot exercise appellate
jurisdiction.6
This court exercises plenary review over matters of
jurisdiction. Anthuis v. Colt Indus. Operating Corp., 971 F.2d
999, 1002 (3d Cir. 1992). Title 28 of the United States Code
provides:
When a district court . . . refers a question or issue
to the Interstate Commerce Commission for
determination, the court which referred the
question or issue shall have exclusive
jurisdiction of a civil action to enforce,
enjoin, set aside, annul, or suspend, in
whole or in part, any order of the Interstate
Commerce Commission arising out of such
referral.
5. If the district court lacked jurisdiction over this matter,
then principles of res judicata would preclude the Railroads from
pursuing their collection action against Ametek, because the time
period has long since elapsed during which the Railroads could
appeal the ICC determination in Ametek's favor. See infra note
6.
6. Under the Hobbs Act, 28 U.S.C. §§ 2321(a) and 2342, ICC
orders are directly reviewable in the court of appeals. Under 28
U.S.C. § 2344, the petition to review must be filed within sixty
days after the entry of the order. No such petition was filed in
this case, and thus we would lack original jurisdiction.
7
28 U.S.C. § 1336(b) (1994) (emphasis added).
The district court referred the question of the
reasonableness of Panther Valley's demurrage rates to the ICC.
The ICC, however, did not directly reach this question, because
it determined that the demurrage tariff did not apply to Ametek
in the first instance. Under § 1336(b), if the question whether
the tariff applied to Ametek arose out of the referred issue as
to the reasonableness of the charges, then the district court
properly exercised jurisdiction over the instant case.
The district court itself declined to decide whether it
had jurisdiction, stating in a footnote that jurisdiction was
"far from clear." (Union Pac. R.R. Co. v. Ametek, Inc., No. 90-
1396 at 27 n.18 (M.D. Pa. Sept. 8, 1995) (mem.)). The court's
primary concern was that the ICC's decision regarding the
threshold applicability of the tariff may have arisen from the
separate complaint filed by Ametek with the ICC challenging the
reasonableness of the tariff rates and the tariff practices
pursued by Panther Valley, rather than from the issue that the
district court referred to the ICC.
In addressing a similar question in Railway Labor
Executives' Ass'n v. ICC, 894 F.2d 915, 917 (7th Cir. 1990),
Judge Posner noted:
The insight behind section 1336(b) is that if a
question within the purview of the ICC arises
in the course of a district court proceeding,
submission of the ICC's answer in the first
instance to the district court rather than to
the court of appeals will avoid a cumbersome
8
and potentially protracted bifurcation of
judicial review.
We do not believe that Congress predicated the
exclusive jurisdiction of the district court under 28 U.S.C.
§ 1336(b) on the circumstance that the district court itself must
invoke the jurisdiction of the ICC by making the referral. We
think the essence of the section is that the district court
should have exclusive jurisdiction over review of the referred
matter even if a party invokes the jurisdiction of the ICC
whenever the district court makes a referral to the agency. This
interpretation of the law avoids problems arising out of parallel
proceedings in different courts arising out of a single
controversy.
In its ruling in this case, the ICC stated that
"[w]hile the primary issue raised by the court referral is the
reasonableness of the demurrage charges, before we analyze the
reasonableness of charges we must determine if the demurrage
charges apply. If demurrage charges do not apply, their
reasonableness is not an issue." Ametek, Inc. v. Panther Valley
R.R. Corp., No. 40664 at 3 (ICC Jan. 15, 1993) (decision & order)
(citations omitted). This is a common sense and logical approach
to an analysis of the reasonableness of the charges and the
relationship between the Railroads and the alleged debtor.
Citing to Island Creek Sales Co v. ICC, 561 F.2d 1219
(6th Circuit 1977), the dissent suggests that we are interpreting
§ 1336(b) "loosely." Dissent at 4. Island Creek, however, did
9
not construe § 1336(b) and dealt only with the interpretation of
§ 1336(a). Interpreting that section, the Court of Appeals for
the Sixth Circuit concluded that the petitioners in the case
before it sought "more than money. They challenge the
fundamental power of the Commission to issue Car Service Order
No. 1050 and the method used to promulgate the demurrage
increases." Id at 1222. Thus, this case from a sister circuit
has no precedential or persuasive value.
The dissent also cites Empire-Detroit Steel Division of
Cyclops Corp. v. ICC, 659 F.2d 396 (3d Cir. 1981), for the
proposition that this court has "adopted Island Creek's strict
interpretation of the district court jurisdiction under §
1336(a)." Dissent at 4. Far from supporting the dissent's
position, Empire-Detroit merely reiterates the widely accepted
view that review of ICC decisions which are based upon "legal or
policy grounds" lies with the court of appeals.
Empire-Detroit,
659 F.2d at 397. In the case at bar, the ICC decision was based
largely upon a factual determination and upon a related matter
emanating from a referral by the district court. It had no
effect upon the public at large or the powers and policies of the
ICC.
We conclude that the ICC's decision can fairly be
characterized as related to and arising out of the district
court's referral and that the district court properly exercised
jurisdiction over Ametek II. They were parallel proceedings
10
arising out of a single dispute and the district court's exercise
of jurisdiction avoided "cumbersome and potentially protracted
bifurcation of judicial review." We therefore hold that the
district court had subject matter jurisdiction over this matter
pursuant to 28 U.S.C. § 1336(b), and that we have appellate
jurisdiction under 28 U.S.C. § 1291.
III.
We next consider whether the district court applied the
correct standard of review to the ICC ruling. In its opinion
granting summary judgment for the ICC and Ametek, the district
court stated that "[b]ecause it is evident that the ICC was not
engaged in tariff interpretation, but instead applied its policy
to an otherwise uncontested determination that Ametek was not a
party to a contract of transportation, judicial review is
properly limited to ascertaining whether the ICC decision is
arbitrary, capricious or an abuse of discretion." Union Pac. at
22. The Railroads argue that the court should have reviewed the
ICC's decision de novo because the ICC was merely interpreting
common law agency principles.
In Hi Craft Clothing Co. v. NLRB, 660 F.2d 910, 915 (3d
Cir. 1981), this court stated that when an issue falls outside of
an agency's area of expertise, and the courts have special
competence in that area, there is little reason for the court to
defer to the agency's interpretations. And in the instant case,
11
the ICC acknowledged that the "courts are the primary authority
on matters such as agency and contract law." Panther Valley at
4. However, the application of agency law was not necessary to
the ICC's determination.7 The Railroads concede in their brief
to this court that "[t]he bills of lading . . . in almost all
cases listed Ametek as the agent for the consignee or the
consignor." Although the district court correctly applied the
abuse of discretion standard, we also note that, in fact, the
court engaged in a far more searching analysis of the ICC
determination. We conclude that the ICC merely applied its own
policies to uncontested matters of fact, and that the district
court committed no error in its standard of review.
IV.
We turn now to the central issue in this case: Whether
the district court erred in accepting the ICC's determination
that the Panther Valley demurrage tariff could not be applied to
Ametek. This inquiry involves two separate questions. First,
did the court err in adopting the ICC's conclusion that the
demurrage tariff may not be applied to Ametek because Ametek was
not a party to the underlying transportation contracts? Second,
7. Indeed, it might be argued that a finding of agency was
superfluous; that it would have been sufficient simply to
determine that Ametek was not a party to the day to day
transportation contracts. See, e.g., Southern Pac. Transp. Co.
v. Matson Navigation Co., 383 F. Supp. 154, 157 n.5 (N.D. Cal.
1974).
12
did the court err in concluding that no other contractual basis
exists which would allow the Railroads to apply the tariff?
A.
In its memorandum opposing the Railroads' motion for
summary judgment, the ICC recites its "longstanding policy not to
extend demurrage tariffs to persons who are not parties to the
transportation contract."8 The ICC decision itself states that
"the Commission has applied this legal principle in a number of
cases," and cites particularly to Payment of Detention Charges,
Eastern Central States, 332 I.C.C. 585, 588 (1968), aff'd 335
I.C.C. 537 (1969) (unlawful to "place liability for detention
charges9 upon a person not a party to the contract of
transportation").
With little federal court precedent upon which to draw,
both the ICC and the district court in this case relied primarily
upon Middle Atlantic Conference v. ICC, 353 F. Supp. 1109 (D.D.C.
1972) (unlawful to impose liability for demurrage charges upon
agent who was not a party to the transportation contract). After
8. The policy extends at least as far back as 1920. See New
York Board of Trade v. Director General, 59 I.C.C. 205, 209
(1920) (noting that a "steamship company is not a party to the
contract of transportation over the rail lines and cannot be held
liable by the rail carrier for demurrage").
9. "Detention" and "demurrage" are terms used by motor carriers
and railroads, respectively, to describe the same thing. The
legal principles discussed apply to both motor carrier detention
and railroad demurrage charges.
13
speaking approvingly of the Eastern Central decision, the court
in Middle Atlantic noted that "[t]he law is well settled that an
agent for a disclosed principal is not liable to a third person
for acts within the scope of the agency." 353 F. Supp. at 1120-
21 (citations omitted).
In the instant case, it is undisputed that Ametek was
not a party to the transportation contracts. We therefore
perceive no error by the district court in adopting the ICC's
determination that liability for the demurrage tariff could not
be imposed on Ametek as the consignee or an agent of the
consignor.
B.
The Railroads argue that the ICC and the district court
failed to address an exception to the general rule as stated in
Part IV A supra: that agents may assume liability contractually.
The Railroads assert that Ametek separately agreed to the
demurrage liability in the instant case. This court reviews the
district court's finding of facts for clear error. See North
River Ins. Co. v. CIGNA Reinsurance Co.,
52 F.3d 1194, 1203 (3d
Cir. 1995).
The court in Middle Atlantic stated the exception to
the rule of non-liability for agents: "Certainly warehousemen
are free to assume liability for detention charges by contractual
undertaking . . .. " 353 F. Supp. at 1121-22. The Railroads
14
contend that Ametek independently agreed to be liable for the
demurrage tariffs. They assert that Ametek hired a railroad
consultant and negotiated the failed lease agreement to avoid the
demurrage costs. Thus, the Railroads conclude that Ametek was
aware of its liability, and chose to limit it through a
negotiated agreement. In the absence of the track or lease
agreement, they argue, Ametek is liable for the full demurrage
cost.
The district court noted that an agent may agree to be
liable for demurrage charges, but found that there was no such
agreement between Ametek and Panther Valley. The court discussed
the proposed rental agreement between the parties, but pointed
out that the parties never signed the agreement and aborted it.
The court noted that the Railroads presented no evidence that
Ametek ever intended to agree to demurrage fees. Past dealing
between the parties reveal that neither Panther Valley nor its
predecessor, Conrail, ever charged Ametek with a demurrage
tariff. Further, as the district court noted, Panther Valley was
free to seek demurrage charges from Ametek's clients, the actual
parties to the shipment contracts.
We find no error in the district court's finding of
fact that Ametek and Panther Valley never entered into a contract
binding Ametek to the payment of demurrage fees. There is no
evidence that Ametek intended to assume contractual liability for
the demurrage charges. We have only a proposed draft of a
15
contract which was never signed and is thus, of course,
unenforceable. Neither we nor the district court are in a
position to speculate as to Ametek's motivations in entering into
the contract negotiations. We see no error in the district
court's decision that no contractual exception to the agent non-
liability rule is present in this case.
V.
We conclude that the district court committed no error
in adopting the ICC's determination that Ametek may not be held
liable for demurrage charges under Panther Valley's tariff.
Ametek was not a party to the underlying transportation
contracts, and it did not separately agree contractually to
accept liability.
Accordingly, the summary judgment in favor of the ICC
and Ametek will be affirmed, as will the order of the district
court denying the motion of the Interline Railroads for summary
judgment. Costs taxed against the appellant Railroads.
16
Union Pacific Railroad, et al. v. Ametek, Inc.
No. 96-7015
Roth, Circuit Judge, Dissenting:
I respectfully dissent from the majority’s opinion
because I do not think the district court had jurisdiction to
review the ICC’s order in this case.
Except as otherwise provided by Congress, Title 28
U.S.C. §2321 vests exclusive jurisdiction in the federal courts
of appeal to “enjoin or suspend, in whole or in part, a rule
regulation, or order” of the Interstate Commerce Commission (now
Surface Transportation Board). 28 U.S.C. §2321. In addition,
under 28 U.S.C. §2342(a), “The court of appeals . . . has
exclusive jurisdiction to enjoin, set aside, suspend (in whole or
in part), or to determine the validity of ... (5) all rules,
regulations or final orders of the [ICC] made reviewable by §2321
of this title.” As these statutes demonstrate, the courts of
appeal ordinarily have jurisdiction over cases in which a party
seeks to challenge an ICC decision.
17
I recognize that there are exceptions to this general
rule. For example, under 28 U.S.C. §1336(b), a district court
retains exclusive jurisdiction over a civil action to review an
ICC order when that order arises out of a prior referral.
However, I conclude that the ICC’s order in this case does not
fit the “arising out of” language of § 1336(b).
Ametek initially sought to have the district court
refer two issues to the ICC: the reasonableness of Panther
Valley’s rates and the reasonableness of Panther Valley’s
practices in negotiating a contract to force Ametek to pay
demurrage charges. The district court, however, specifically
limited its referral to one issue, the reasonableness of Panther
Valley’s rates. Ametek then filed a separate proceeding directly
with the ICC regarding the reasonableness of Panther Valley’s
practices. The ICC consolidated this separate proceeding with
the issue already referred to it by the district court. The ICC
then issued an opinion declaring Ametek not liable for demurrage
charges under common law principles. The ICC did not rule on the
reasonableness of Panther Valley’s rates.
I disagree with the majority that the ICC’s decision
regarding Ametek’s liability for demurrage charges arose out of
the district court’s referral within the meaning of §1336(b).
True, the ICC may have felt that a decision regarding the
reasonableness of Panther Valley’s rates dictated a determination
of whether the rates applied at all. Nevertheless, the ICC’s
18
legal authority for making this determination did not originate
in the district court referral. It was specifically presented to
the ICC in Ametek’s separate action filed directly with the ICC.
Moreover, the ICC acknowledged that it was going beyond
the scope of its expertise and, indeed, beyond the specific
referral from the district court when it stated:
We are aware that courts are the primary authority on
matters such as agency and contract law. However,
where the applicability and reasonableness of
interstate railroad transportation contracts are at
issue, our expertise and precedents are also due
consideration. See 49 U.S.C. 10501(d).
The ICC’s invocation here of 49 U.S.C. §10501(d) is significant
because it demonstrates that the Commission was relying not on
the district court’s referral, but on the ICC’s own inherent
authority to review the rules and practices of rail carriers.10
Furthermore, when the district court affirmed the ICC’s
authority to consider the issue of liability, the district court
suggested that it was Ametek’s separate complaint which provided
the ICC with the authority to rule on Ametek’s liability for the
charges. The court first noted that
10
§ 10501(d) states in pertinent part: “The jurisdiction of
the Commission . . . over transportation by rail carriers, and
the remedies provided in this subtitle with respect to the rates,
classifications, rules, and practices of such carriers, is
exclusive.”
19
[B]ecause 49 U.S.C. §11701(b) permits the ICC to dismiss only
those complaints filed with it that fail to “state
reasonable grounds for investigation and action,” the ICC
was statutorily obligated to address the separate
complaints filed by Ametek.
Union Pac. R.R. Co. v. Ametek, Inc., No. 90-1396 at 15 (M.D. Pa.
Sept 8, 1995) (mem.). The district court went on to state:
Notwithstanding the parties’ agreement that this Court has
jurisdiction over the ICC Decision pursuant to 28 U.S.C. §
1336(b), I am constrained to note that jurisdiction is far
from clear. . . . Only the reasonableness of demurrage
rates was referred to the ICC in this case. While it may
have been proper for the ICC to address the threshold
question of tariff applicability, that issue was presented
as a result of separate complaints filed by Ametek. It
thus could be argued that the ICC Decision does not arise
out of the referral in this case, so that any challenge to
the ICC Decision should have been pursued in the
appropriate court of appeals.
Union Pac. R.R. Co., No. 90-1396 at 27 n.18 (emphasis added). I
agree with the district court’s statement that one could argue
that the ICC’s authority to consider Ametek’s liability for
demurrage charges did not stem solely from the district court’s
referral. In fact, the ICC’s authority to consider the
reasonableness of Panther Valley’s practices stemmed from
Ametek’s separate proceeding filed directly with the ICC. I
conclude, as a consequence, that the district court lacked
jurisdiction to review the ICC’s order under §1336 (b).
My conclusion is supported by a similar situation which
the Sixth Circuit confronted in Island Creek Sales Co. v. I.C.C.,
561 F.2d 1219 (6th Cir. 1977). In Island Creek, the court
interpreted the scope of the jurisdiction under 28 U.S.C.
§1336(a), which provides for district court review of ICC orders
20
that concern the payment of money or collection of fines. The
shippers challenged the ICC’s power to promulgate certain
demurrage increases. Since the case involved the validity of the
ICC’s order for the payment of money and not just the amount
payable, the Sixth Circuit held that the case was within the
appellate court’s exclusive jurisdiction. Id. at 1222. The
nature of the issue to be reviewed -- the ICC’s power to
promulgate increases and not merely the amount of the increase --
placed the appeal beyond the scope of the narrow jurisdictional
exception created for the district court by § 1336(a).
Island Creek is analogous to this case because it
involves the scope of the jurisdiction for district court review
created by §1336. Moreover, we have adopted Island Creek’s
strict interpretation of district court jurisdiction under
§1336(a) in Empire-Detroit Steel Division of Cyclops Corp. v.
I.C.C, 659 F.2d 396 (3d Cir. 1981).11 I see no reason to apply a
strict interpretation to §1336(a) and a looser interpretation to
§1336(b). The majority seem, however, to interpret §1336(b)
loosely. I believe to the contrary that we should interpret
§1336(b) strictly and limit district court appellate jurisdiction
to the express language of the statute.
11
In Empire-Detroit we stated: “We agree with those courts
of appeals which have held that review of orders denying
reparations on legal or policy grounds is available by petition
for review in the courts of appeals.” Empire-Detroit, 659 F.2d at
397.
21
Finally, I disagree with the majority’s reliance on
Judge Posner’s opinion in Railway Labor Executives’ Association
v. I.C.C., 894 F.2d 915 (7th Cir. 1990). In RLEA, the Seventh
Circuit interepreted the referral language of § 1336(b) and
concluded that district courts must make some positive
“reference” to the ICC in order to invoke the referral
jurisdiction provided by the statute. The purpose of such a
reference is “so that the parties can be in no doubt of which
court to go to for judicial review of the ICC order.”
Id. at
917.12 In a situation such as the case before us, where the ICC
has simultaneously considered a question referred by the district
court and a proceeding filed directly with the ICC, it seems to
me that a bright line rule is most helpful to the parties in
determining where to file an appeal. I submit that only those
issues should be appealed to the district court which were
expressly referred to the ICC by the district court. I do not
concur in the majority’s implication that the word “order,” as it
is used in §1336(b), is broader in scope than the word “issue.”
To the contrary, I believe the statute provides for district
court review of solely those issues it has referred to the ICC.
Any other issues decided by the ICC in a parallel proceeding,
such as we have here, should be appealed to the court of appeals.
12
The issue in RLEA was whether the transmittal of a
question by the bankruptcy court to the ICC was a “referral” if
the word “refer” was not employed. The court concluded that it
was a referral.
22
The application of such a strict interpretation of §
1336(b) would reduce the chance that appeals are made to the
wrong court. Counsel need only look to the language of the
district court’s referral to determine whether the issue was
properly reviewable by a district court under §1336(b). If the
issue was not one specifically referred to the ICC by the
district court, it would be reviewable only by the court of
appeals. This regime would eliminate uncertainty among the
parties and obviate complicated inquiry over the exact source of
the ICC’s authority to determine a separate issue, be it the
referral, a separate proceeding, or some other statute.
Because the propriety of Panther Valley’s practices
was not an issue referred to the ICC by the district court, I
conclude that the appeal of that issue should have come directly
to the court of appeals. For this reason, I find that the
district court should not have heard the appeal from the ICC and
I respectfully dissent.
23
