Administrative Law Keyed to Lawson
United States v. Florida East Coast Ry
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There was a chronic freight-car shortage on the Nation’s railroads, and Congress responded by amending Section:1(14)(1) of the Act to expand the Commission’s authority to prescribe per diem charges for use by one railroad of freight cars owned by another. After an investigation, a notice of proposed rulemaking, and an informal conference at which Appellees voiced concerns, the Commission concluded that Section:1(14)(1) authorized it to impose additional “incentive” per diem charges. In December, 1969, the Commission issued a proposed rule with a notice to railroads to file statements of position within 60 days. Both Appellees filed statements objecting to the proposal and requesting an oral hearing, but the Commission overruled their requests. Appellees brought this action in the District Court to set aside the incentive per diem rates established by the Commission in a rulemaking proceeding. The District Court sustained Appellee’s position that the Commission had failed to comply with Section:553 and Section:556 of the APA; held that the language of Section:1(14)(a) of the Act required the Commission to act in accordance with the APA Section:556(d) in a proceeding such as this; and the Commission’s determination to receive submission from the Appellees only in written form violated Section:556(d) because Appellees were “prejudiced” by that determination.
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