SWAN, Circuit Judge.
This is a suit by eight holders of First Mortgage Forty Year 5% Bonds of Macon, Dublin & Savannah Railroad Company to set aside an order made on March 10, 1949 by Division 4 of the Interstate Commerce Commission authorizing an extension of the maturity date, and certain other modifications, of said bonds. The complaint was filed May 24, 1949. The suit is brought under 28 U.S.C.A. §§ 1336, 2321-2325 and 49 U.S.C.A. § 17(9). A three judge court was convened pursuant to 28 U.S.C.A. § 2284. The Interstate Commerce Commission has intervened as a party defendant pursuant to 28 U.S.C.A. § 2323. After answers were filed, the case was brought on for final hearing on October 10, 1949. With the court's consent briefs were to be submitted later and they have been received.
The order under attack was entered in a proceeding initiated on June 15, 1948 by the Railroad Company under section 20b of the Interstate Commerce Act, 49 U.S.C.A. § 20b, to obtain modifications of its First Mortgage bond issue which had matured January 1, 1947, the principal modification proposed being an extension of the maturity date to 1972. After hearings, Division 4 of the Commission issued its report and order of December 9, 1948, 271 I.C.C. 376. This directed that the proposed modifications be submitted to the bondholders for acceptance or rejection. It detailed the procedure to be followed on submission and directed: that the applicant Railroad file with the Commission a certificate as to acceptances; that upon request the applicant make available to the parties to the proceeding a list of the names and addresses of bondholders; and that all letters, circulars, etc., to be sent to bondholders be submitted to the Commission for approval. One of the plaintiffs, G. Frederick Helbig, petitioned for reconsideration of the order of December 9. His petition was denied by the full Commission on January 13, 1949.
The plaintiffs contend that the order of March 10 is null and void on the ground that section 20b of the Interstate Commerce Act is unconstitutional because it (1) contravenes the due process clause of the Fifth Amendment; (2) is a delegation to the Commission of legislative power in contravention of Article I, section 1 of the Constitution; (3) is a delegation of judicial power in contravention of Article III, section 1; and (4) is an exercise of a power not delegated to the United States in contravention of the Tenth Amendment. Before these questions can be reached, we must consider the defense set up in the answers of the United States and the Commission, namely, that the Court lacks jurisdiction because the plaintiffs have failed to exhaust their administrative remedy in accordance with section 17(9) of the Interstate Commerce Act, 49 U.S.C.A. § 17(9). The section requires that rehearing, reargument or reconsideration by the full Commission be sought prior to judicial review of an order by a Division of the Commission.
The plaintiffs argue that their administrative remedy was in fact exhausted when the full Commission denied Helbig's petition for reconsideration of Division 4's order of December 9. They rely on Rule 101(f) of the Commission,
If Rule 101(f) were to be construed as the plaintiff contends, it would run counter to § 17(9) and would therefore be invalid. That section lays down conditions precedent to judicial review of the order of March 10. The Commission could not by its Rules extend this court's jurisdiction beyond the Congressional grant. The United States is a necessary party to a suit to set aside an order of the Commission. 28 U.S.C.A. § 2322. And the United States is immune from suit except upon terms laid down by Congress on which it consents to be sued. United States v. Sherwood,
Plaintiffs further argue that a petition for reconsideration of the March 10 order was unnecessary because the only ground on which it is attacked is the constitutional one, and the Commission has announced that it cannot pass on the constitutionality of legislation which it is required to administer. Lehigh Valley R. R. Co., 271 I.C.C. 553, 589. We may assume without decision that such is the case. But we cannot assume that upon petition for reconsideration the Commission would not have reversed the order of March 10, thereby eliminating the constitutional question here presented. A recent decision of the Supreme Court warns us not to seek out constitutional questions which may be avoided by the orderly termination of the administrative process. Aircraft & Diesel Equipment Corp. v. Hirsch, 331 U.S. 752, 772, 67 S.Ct. 1493, 1503, 91 L.Ed. 1796.
If the parties desire formal findings of fact pursuant to Rule 52(a), Federal Rules of Civil Procedure, 28 U.S.C.A., they may submit proposed findings within ten days.
The Conference Report states (H.Rep. 2832, 76th Cong. 3rd sess. p. 72): "A new paragraph (9) is included providing that orders of a Division, an individual Commissioner or a Board, shall be subject to judicial review as in the case of full Commission orders, after an application for rehearing has been made and acted upon." [Italics supplied.]
"A successive petition under subdivision (d) of this rule filed by the same party or parties, and upon substantially the same grounds as a former petition, which has been considered and denied by the entire Commission, or by an appropriate appellate division, will not be entertained."