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 Agency’s have greater technical expertise on the