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Primary Jurisdiction Doctrine

The doctrine of primary jurisdiction applies where a claim can originally be addressed in a court but would be better addressed first by an administrative body[i].  It is concerned with promoting proper relationships between the courts and administrative agencies charged with particular regulatory duties.  It applies to claims that contain some issue within the special competence of an administrative agency.  Thus, under the primary jurisdiction doctrine, courts, even though they could decide, will in fact not decide a controversy involving a question within the jurisdiction of an administrative tribunal until after that tribunal has rendered its decision.

For instance, in F.P. Corp. v. Tamarkin Co., 1992 U.S. Dist. LEXIS 17929 (N.D. Ohio Mar. 20, 1992) Plaintiff carrier brought an action against defendant, a member of a buying cooperative, to recover payments allegedly due and owing under applicable tariffs.  Before the court was the member’s motion for referral of the matter to the Interstate Commerce Commission (ICC).  The carrier alleged that the member owed for undercharges under its common carrier tariff.  The member’s defense was that, because of its membership in the cooperative, it was entitled to ship goods at the cooperative’s lower contract rate. At the time the present claim was filed, an action for declaratory relief was pending before the ICC that had been instituted by the cooperative against the carrier regarding the application of the contract rates.  Because of the pending action before the ICC, the member asked the court to refer the present matter also to the ICC. The court granted the member’s motion because the member’s arguments for the application of the doctrine of primary jurisdiction was compelling, even if the primary jurisdiction was not exclusive. The court found that the ICC had specialized knowledge and was in a better position to determine the issues and had already undertaken a matter, which would have a direct impact on the current matter. The court found that the ICC had primary jurisdiction to determine whether the transportation at issue was contract carriage under 49 U.S.C.S. § 10102(15) or was common carriage under 49 U.S.C.S. § 10102(14).  The court granted the member’s motion, stayed the proceedings, and referred the matter to the Interstate Commerce Commission.

No fixed formula exists for applying the doctrine of primary jurisdiction. In every case, the question is whether the reasons for the existence of the doctrine are present and whether the purposes it serves will be aided by its application in the particular litigation. One reason for the doctrine is to avoid the possibility that a court’s ruling might disturb or disrupt the regulatory regime of the agency in question. Another is that the goal of national uniformity in the interpretation and application of a federal regulatory regime is furthered by permitting the agency that has primary jurisdiction over the matter in question to have a first look at the problem[ii].

The doctrine of primary jurisdiction requires the court to allow for a “referral” to the agency by staying further judicial proceedings so as to give the parties a reasonable opportunity to seek an administrative ruling.  The simple fact that the doctrine of primary agency jurisdiction may apply does not necessarily mean that it must be applied.  Referral of the issue to the administrative agency does not deprive the court of jurisdiction; it has discretion either to retain jurisdiction or, if the parties would not be unfairly disadvantaged, to dismiss the case without prejudice[iii].

However, “Referral” is sometimes loosely described as a process whereby a court refers an issue to an agency. However, most federal statutes contain no mechanism whereby a court can on its own authority demand or request a determination from the agency; this is left to the adversary system, the court merely staying its proceedings while the party files an administrative complaint.

The court may raise the issue of primary jurisdiction sua sponte, and its invocation cannot be waived by the failure of the parties to argue it, as the doctrine exists for the proper distribution of power between judicial and administrative bodies and not for the convenience of the parties.

The primary jurisdiction doctrine has no application where only a question of law is involved. Because uniformity may be secured through review by a single Supreme Court, questions of “law” may appropriately be determined in the first instance by courts.

For instance in Pan Am. Petroleum Corp. v. Superior Court of Del., 366 U.S. 656 (U.S. 1961), the United States Supreme Court granted certiorari to review a judgment of the Supreme Court of Delaware denying a petition for a writ of prohibition to prevent further proceedings before a state superior court in actions by respondent natural gas pipeline company against petitioner natural gas producers involving contracts for the sale of natural gas by the producers to the company.  A state corporation commission promulgated an order fixing a minimum price for gas taken from a certain field.  The effect of this order was to require the company to pay the producers at a higher rate than those in the parties’ pre-existing contracts.  The company filed an action in a superior court in Kansas to obtain judicial review of the order.  The company sent a letter to the producers informing them that it would pay for the gas at the higher price in the commission’s order pending the outcome of its state court action.  The commission’s order was ultimately reversed by the Court.  The company filed actions to recover the overpayments.  The producers filed a petition for a writ of prohibition attacking the jurisdiction of the superior court over the actions.  The state supreme court denied the writ, holding that the claims were not founded upon any liability in the Natural Gas Act.  On review, the Court found that the superior court had jurisdiction over the action.  The company asserted no right under the Act and the state court actions did not otherwise involve a federal question.  Private contracts were involved. It was irrelevant that a federal defense could have been raised.  The Court affirmed the state supreme court’s judgment.

The primary jurisdiction doctrine does not apply to require prior resort to an administrative agency where the relief sought is not within the jurisdiction of the agency, or the question is one that the agency has no power to decide, even though it may consider the question in reaching a determination that is within its jurisdiction.

[i] COOLMAN v. SBC COMMUNS., INC., 2005 Cal. App. Unpub. LEXIS 534 (Cal. App. 2d Dist. Jan. 20, 2005)

[ii] American Auto. Mfrs. Ass’n v. Massachusetts Dep’t of Envtl. Protection, 163 F.3d 74 (1st Cir. Mass. 1998)

[iii] Turedi v. Coca Cola Co., 460 F. Supp. 2d 507 (S.D.N.Y. 2006)

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