American Farm Lines v. Black Ball Freight Service

Supreme Court of the United States · 1970 · Administrative Law

Administrative LawICCtemporary operating authorityprocedural rulessubstantial prejudiceagency reconsiderationreopening recordnonjurisdictional rules

Facts

The Interstate Commerce Commission had statutory authority to grant temporary operating authority without hearings when there was an immediate and urgent need for service that existing carriers could not meet. Its rules required supporting shipper statements to include, among other things, information about efforts to obtain service from existing carriers and the names of carriers that failed or refused to provide service. American Farm Lines applied for temporary authority supported by a Department of Defense statement; after the ICC's first grant was challenged, the Commission reopened the matter, accepted a more detailed verified statement from a Defense official, and again granted the application. The protesting carriers argued that the supporting statement still did not strictly comply with the ICC's rules and that the ICC lacked power to reopen the record while judicial review was pending.

Issue

Whether the ICC was required to insist on strict compliance with its procedural rules governing supporting statements for temporary operating authority applications, and whether the ICC retained authority to reopen the record and issue a new order while judicial review proceedings and a stay of its first order were pending.

Rule

An agency may relax or modify its own nonjurisdictional procedural rules adopted for the orderly transaction of business when the ends of justice require, and such action is not reviewable absent a showing of substantial prejudice to the complaining party. Unless Congress provides otherwise, an agency may grant rehearing, reopen the record, and modify its order while judicial review is pending so long as it does not act inconsistently with or interfere with the reviewing court's jurisdiction.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

The Federal Transit Licensing Board in Denver has a rule requiring applicants for emergency shuttle authority to attach customer declarations listing the dates and results of each request made to existing operators. Mesa Peak Transport submits declarations explaining in detail that hospitals in Colorado Springs face an immediate shortage of overnight specimen transport, but the declarations omit many dates. Competing operators file lengthy objections showing they understand the alleged service gaps and the Board grants temporary authority.

If the competitors seek judicial review, which argument is strongest under the governing doctrine?

Explanation. The majority rule is that an agency may relax or modify its own nonjurisdictional procedural rules adopted for the orderly transaction of business when justice requires, and courts will not overturn that choice absent substantial prejudice. Here the omitted dates concern filing detail, the objections show the competitors could respond precisely, and the agency still had enough information to act.