The case of Texas & Pacific Railway v. Abilene Cotton Oil Co. (204 U.S. 426 (1907)) helped establish the doctrine of primary jurisdiction. Abilene sued T&P for charging excessive shipping rates for cotton oil. Even though shipping rates were established by the Interstate Commerce Committee (ICC), Abilene took their case directly to Federal District Court, instead of asking for adjudication through the ICC. T&P wanted the case heard by the ICC.
- It was not clear from the Statute that created the ICC if the ICC preempted judicial action in court (aka preemption), or if it was just another place where you could bring suit.
- Sometimes Enabling Acts explicitly state where suits can be brought.
- The US Supreme Court found that the Federal District Court theoretically had the jurisdiction to hear the case because it involved interstate commerce.
- However, the Court found that the case was better handled in the ICC.
- The ICC had been created in part to handle disputes exactly like this
- Since the ICC was a Federal Agency, their decision would be binding nationwide (as opposed to only in one Federal District), and would help maintain consistency.
- The Court ordered the Federal District Court to drop the case, and invited the parties to take their dispute to the ICC.
- The Court noted that if a party was not satisfied with the ICC decision, they could always appeal in Federal Appellate Court.
Basically, the doctrine of primary jurisdiction requires that a dispute that fits within the jurisdiction of an Administrative Agency should be taken first to that Agency, even if the case in theory could be taken into court.
- This case was decided on the fact that a Federal Agency can provide more uniformity to the law than a single Federal District Court can. See also United States v. Western Pacific Railroad Co. (352 U.S. 59 (1956)), which came to the same conclusion, but was decided on the fact that the Administrative AgencyÕs have greater technical expertise on the issue.