UNITED STATES V. FLORIDA EAST COAST RAILWAY
410 U.S. 224 (1973)
NATURE OF THE CASE: This was a dispute over incentive per diem rates. Florida East Coast
Railway (P) brought this action to set aside the incentive per diem rates established by
Interstate Commerce Commission (D) in a rulemaking proceeding. D appealed an adverse ruling
by the District Court.
FACTS: There was a chronic freight car shortage on the Nation's railroads. Congress
enacted an amendment to Section 1(14)(a) of the Interstate Commerce Act, enlarging the
Commission’s authority to prescribe per diem charges for the use by one railroad of freight
cars owned by another. The Commission instituted rule making proceedings with the
expectation that a formal evidentiary hearing would be required. The Commission was
criticized and it then determined that it would receive submissions from appellees only in
written form, which was a violation of ABA section 556 (d) because appellees were prejudiced
by that determination within the meaning of that ABA section. The Commission then began its
streamlined rule making and issued an interim report. Embodied in that report was a proposed
rule adopting the Commission's tentative conclusions and a notice to railroads to file
statements of position within 60 days. Appellees objected and requested oral hearings. Those
requests were overridden. The District Court held that the Commission violated section
556(d) and set aside the order.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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