Director General of Railroads v. Viscose Co.
Headline: Court limits federal-court relief and says tariff disputes over removing goods from freight service must first go to the Interstate Commerce Commission, affecting shippers and rail carriers nationwide.
Holding:
- Requires shippers to seek relief from the Interstate Commerce Commission first, not federal courts.
- Preserves carrier tariff change authority pending ICC investigation and possible suspension.
- Affects manufacturers and rail carriers by shifting dispute resolution to the ICC.
Summary
Background
A manufacturer of artificial silk (The Viscose Company) complained after the Director General of Railroads authorized a tariff supplement that removed silk from the published first-class freight list and added it to a list of items carriers would not accept. The supplement was filed to become effective, and three days before that date the company obtained a temporary, then permanent, injunction from a federal District Court stopping the change. The Circuit Court of Appeals certified the question whether that District Court had jurisdiction to annul the Director General’s action and enjoin carriers.
Reasoning
The Court examined the Interstate Commerce Act provisions cited in the record and described the duties of carriers to publish classifications and rules, and the Commission’s power to suspend new classifications or regulations, investigate, and decide what is reasonable. The opinion explains that excluding a commodity from tariffs is effectively a form of classification and that the proposed tariff supplement and rule change therefore presented questions falling within the Commission’s exclusive initial authority. On that basis the Court answered the certified question in the negative and held that the District Court lacked jurisdiction to decide and annul the action.
Real world impact
The ruling means shippers and carriers must seek the Commission’s review first when a tariff filing seeks to change classifications or refuse to carry a commodity. The decision allocates the first decision on reasonableness to the Commission rather than to federal courts, and does not decide the underlying merits of whether the exclusion was reasonable.
Dissents or concurrances
Four Justices (McKenna, Van Devanter, Pitney, and McReynolds) dissented from the judgment as announced in the opinion.
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