United States v. Florida East Coast Railway

410 U.S. 224 (1973)


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 rulemaking 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 rulemaking 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.