A Brief History Primary Jurisdiction: Texas & Pacific Railway v. Abilene Cotton Oil Co.

—a
footnote Abilene
• 1907 case: case involved a dispute between a shipper of goods and Abilene
• 1907 case: case involved a dispute between a shipper of goods and a railroad
• Issue: whether the rr was charging reasonable rates to haul the shipper’s freight
• Shipper went to district court to challenge the reasonableness of the rates • However, there was the
ICC Abilene
• ICC had: Guess what? Statutory authority to determine the reasonableness of interstate Abilene
• ICC had: Guess what? Statutory authority to determine the reasonableness of interstate freight rates
• Prior to the ICC, the only place to challenge rates was a district court
• The shipper invoked the interstate commerce jurisdictional statute, 28 U. S. C. 1337 Abilene •
Supreme Court: conceded the shipper had right to be in district court Abilene • Supreme Court:
conceded the shipper had right to be in district court
• BUT, the ICC had been given authority to handle rate disputes
• ICC was a federal agency with national jurisdiction over the nation’s transportation industry
• ICC’s decisions and policies ---big scope & national implications! Abiline
• Supreme Court invokes the doctrine of primary jurisdiction • Ordered the district Abiline
• Supreme Court invokes the doctrine of primary jurisdiction • Ordered the district court to dismiss
the case
• Invited the parties to go see the ICC for resolution and then return to the courts After Abilene
• There were other cases • United States v. Western Pacific Railroad After Abilene • There were
other cases • United States v. Western Pacific Railroad Co. (1956) case: pretty much like Abilene •
Shipper, the federal government, wanted to ship napalm bombs on the RR • ICC Act: rrs set their
prices by filing tariffs – schedules of prices—with the commodity to be shipped & distance traveled
After Abilene • But this created a problem because the government and the rr After Abilene • But this
created a problem because the government and the rr disagreed over the classification of the goods •
RR said napalm = “incendiary bombs” and, guess what? A higher price • Government called it
“gasoline in drums” • Who made more money? What kind of money was at stake? After Abilene •
RR went to the Court of Claims which is now the After Abilene • RR went to the Court of Claims
which is now the US Court of Federal Claims and sought reimbursement • Supreme Court said :
Primary jurisdiction applied: • RR should have gone first to the ICC After Abilene: Agency Expertise
Rules • Court decided: federal courts were simply not expert After Abilene: Agency Expertise Rules
• Court decided: federal courts were simply not expert on arcane matters as rr tariffs & computation
of freight rates • By contrast: ICC had acknowledged expertise • Thus, expert agency, should look at
the issue FIRST • Make a pronouncement • Then, if necessary, go to the courts But THEN…. .
Blurriness • Far East Conference v. United States, 342 U. S. But THEN…. . Blurriness • Far East
Conference v. United States, 342 U. S. 570 (1952) • Antitrust action for violations of the Sherman
Act • Department of Justice brings action against ocean carriers • Federal Maritime Commission: had
authority to regulate rates charged by ocean carriers But then…. • Ocean carriers operating under
FMC license enjoy an immunity from federal But then…. • Ocean carriers operating under FMC
license enjoy an immunity from federal antitrust statutes • The carriers can form groups to
promulgate tariffs, e. g. “conferences” • This shields them from “price-fixing” • Rationale: FMC
scrutiny is substitute for anti trust controls Supreme Court says…. • Cites the expertise and
specialized knowledge of the FMC • Supreme Court says…. • Cites the expertise and specialized
knowledge of the FMC • But, the FMC knows ocean carriers, it is not an expert on the Sherman Act •
But the Court invoked the doctrine of primary jurisdiction and ordered the parties to pursue at the
agency level. And it goes on and on…Primary Jurisdiction rules…. . Until • Ralph Nadar brings And
it goes on and on…Primary Jurisdiction rules…. . Until • Ralph Nadar brings Nader v. Allegheny
Airlines, Inc. , 426 U. S. 290 (1976) • Nadar got bumped from a flight on Allegheny Airlines, now U.
S. Air • Nadar did not take kindly to this • Then the Civil Aeronautics Board existed • Board had
promulgated specific rules on airline bumping practices • Rules called for, inter alia, compensation
Go Figure • Nadar accused the airline of failing to warn that he might Go Figure • Nadar accused the
airline of failing to warn that he might get bumped; did not seek compensation—accused the airline
of FRAUD • Did this go to the agency? • No: Supreme Court refused to invoke the doctrine and
permitted the court to keep and decide the lawsuit Chevron • Court must perform a two part analysis,
or the Chevron two-step • Chevron • Court must perform a tw
 Texas & Pac. Railway Co. v. Abilene, 204 U.S. 426 (1907)
FACTS:
• 1907 case: case involved a dispute between a shipper of goods and Abilene
• 1907 case: case involved a dispute between a shipper of goods and a railroad

Where defendant in the state court contends that, consistently with

the Interstate Commerce Act, the state court has no power to grant
the relief, and such, contention is essentially involved and
expressly, and, in order to support the judgment, necessarily,
decided adversely to the defendant, a Federal question exists and
this court can review the judgment on writ of error under §
709;.Rev. Stat.
Where the state court determined a case involving railroad rates on.
the hypothesis conceded by. counsel on both sides.
that the rate was one of a lawful schedule duly filed and published
in accordance with the Interstate Commerce Act, the contention
that the rate was not-.so filed " and, published and, therefore,.-was
not a' legal rate is not open in this court.
While repeals by implication are not favored and a statute will not
be construed as abrogating an existing common-law remedy, it will
be so construed if such preexisting right is so repugnant to it as to
deprive it of its efficacy and render its- provisions nugatory. The,
Interstate Commerce Act was intended to afford an effective and
comprehensive means for redressing wrongs resulting from unjust
discriminations and undue preference, and -to that end placed
upon carriers
the duty of publishing schedules of reasonable and uniform rates;
and, consistently with the provisions of that law, a shipper cannot
maintain an action at common law in a state court for excessive
and unreasonable freight rates exacted on interstate shipments
where the rates charged were those which had been duly fixed by
the carrier according to the act and had not been found to be
unreasonable by the Interstate Commerce Commission.
ISSUE:
Whete or not the court has the primary jurisdiction over the freight rates

RULING:
• Shipper went to district court to challenge the reasonableness of the rates • However, there was the
Interstate Commerce Commission
• Interstate Commerce Commission had: Guess what? Statutory authority to
determine the reasonableness of interstate freight rates

• Interstate Commerce Commission had: Statutory authority to determine the

reasonableness of interstate freight rates

• Prior to the Interstate Commerce Commission, the only place to challenge rates
was a district court
• The shipper invoked the interstate commerce jurisdictional statute, 28 U. S. C. 1337 Abilene
• Supreme Court: conceded the shipper had right to be in district court Abilene

• BUT, the Interstate Commerce Commission had been given authority to handle rate
disputes

• Interstate Commerce Commission was a federal agency with national jurisdiction

over the nation’s transportation industry

• Interstate Commerce Commission’s decisions and policies ---big scope & national
implications!
• Supreme Court invokes the doctrine of primary jurisdiction
The doctrine of primary jurisdiction applies where a claim can originally be addressed in a
court but would be better addressed first by an administrative body. It is concerned with
promoting proper relationships between the courts and administrative agencies charged with
particular regulatory duties.

• Ordered the district court of Abiline to dismiss the case

• Invited the parties to go see the Interstate Commerce Commission for resolution
and then return to the courts After