Chemical Mfrs. Ass'n v. Department of Transp.

• Decision Date: 31 January 1997
• Docket Number: No. 95-1582,95-1582
• Citation: 105 F.3d 702
• Parties: , 27 Envtl. L. Rep. 20,816 CHEMICAL MANUFACTURERS ASSOCIATION, Petitioner, v. DEPARTMENT OF TRANSPORTATION and United States of America, Respondents, The Fertilizer Institute, Intervenor for Petitioner.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 702

105 F.3d 702

323 U.S.App.D.C. 88, 27 Envtl. L. Rep. 20,816

CHEMICAL MANUFACTURERS ASSOCIATION, Petitioner, v. DEPARTMENT OF TRANSPORTATION and United States of America, Respondents The Fertilizer Institute, Intervenor for Petitioner.

No. 95-1582.

United States Court of Appeals District of Columbia Circuit.

Argued Dec. 17, 1996.

Decided Jan. 31, 1997.

On Petition for Review of an Order of the United States Department of Transportation.

Paul M. Donovan, Washington, DC, argued the cause for petitioner, with whom David F. Zoll and Thomas E. Schick were on the briefs.

Peter J. Plocki, Senior Trial Attorney, U.S. Department of Transportation, Washington, DC, argued the cause for respondents, with whom Nancy E. McFadden, General Counsel, Paul M. Geier, Assistant General Counsel, and Dale C. Andrews, Deputy Assistant General Counsel, Washington, DC, were on the brief.

Richard A. Flye and Chris S. Leason, Washington, DC, were on the brief for intervenor The Fertilizer Institute.

Before: SENTELLE, RANDOLPH and ROGERS, Circuit Judges.

Opinion for the Court filed by Circuit Judge ROGERS.

ROGERS, Circuit Judge:

The Chemical Manufacturers Association ("CMA") and The Fertilizer Institute ("TFI") petition for review of a Department of Transportation regulation that establishes a rebuttable presumption, applicable in civil administrative enforcement proceedings, that loose closures on railroad tank cars transporting hazardous materials result from the shipper's failure to conduct a proper inspection. Both CMA and TFI contend that the presumption is invalid because there is no reasonable connection between the facts giving rise to the presumption and the fact presumed. In addition, CMA contends that the presumption is contrary to the Carmack Amendment, 49 U.S.C. § 11706, and Federal Rule of Evidence 301, and TFI contends that the regulation violates the Due Process Clause because it limits the type of evidence that the agency may consider to rebut the presumption.

We hold that the Department acted within the scope of its discretion in establishing the presumption. In addition, accepting the Department's representation that the regulation does not limit the type of evidence that a shipper may use to rebut the presumption, the regulation does not violate the Due Process Clause. Because petitioners' other contentions lack merit, we deny the petition.

I.

Under the Hazardous Materials Transportation Act, 49 U.S.C. §§ 5101-5127, the Secretary of Transportation is required to "prescribe regulations for the safe transportation of hazardous materials in intrastate, interstate, and foreign commerce." Id. § 5103(b). Any person who knowingly violates such regulations is subject to civil penalties of $250 to $25,000 for each violation. Id. § 5123(a). In addition, any person who willfully violates such regulations is subject to criminal penalties. Id. § 5124.

Acting through the Research and Special Programs Administration ("RSPA") and the Federal Railroad Administration ("FRA"), the Department revised its regulations relating to transport of hazardous materials by rail in 1995 and 1996. The regulation at issue relates to the transportation of hazardous chemicals in railroad tank cars. To prevent the release of such chemicals to the environment, the Department has long required shippers to inspect their cars before offering them for shipping. The prior version of the regulation, 49 C.F.R. § 173.31(b) (1994), required shippers to "determine to the extent practicable that the tank, safety appurtenances, and fittings, are in proper condition for the safe transportation of the lading," and to secure all "closures of openings in tank cars and of their protective housings" with a wrench or similar tool. A separate regulation, unchanged by the revision, provided that "[c]losures on packagings shall be so designed and closed that under conditions ... normally incident to transportation ... the closure is secure and leakproof." 49 C.F.R. § 173.24(f) (1995).

In 1993 the Department determined that some clarification of these rules was necessary. To that end, it proposed, and ultimately adopted, a revision of § 173.31 explicitly placing on the shipper the responsibility to conduct an external visual inspection before offering a car for transportation of hazardous materials. As part of that inspection, a shipper must check all the closures on the car, and ensure that they are "tool-tight," i.e., properly tightened with an appropriate tool. 49 C.F.R. § 173.31(d)(1)(iv). In addition, the Department also proposed a rebuttable presumption. As initially adopted in 1995, the challenged portion of the regulation provided that:

Closures on tank cars are required ... to be designed and closed so that under conditions normally incident to transportation, including the effects of temperature and vibration, there will be no identifiable release of a hazardous material to the environment. In any action brought to enforce this section, the lack of securement of any closure to a tool-tight condition, detected at any point, will establish a rebuttable presumption that a proper inspection was not performed by the offeror of the car. That presumption may be rebutted only by evidence establishing that the car was subjected to abnormal treatment, e.g., a derailment or vandalism.

49 C.F.R. § 173.31(d)(2) (1995). The Department justified the presumption by noting that FRA inspectors had discovered loose closures on tank cars containing hazardous materials more than 23,000 times between 1989 and 1995, and that RSPA received about 1,100 to 1,200 reports each year on releases of hazardous materials from tank cars, often as a result of loose closures. During that period, such releases injured 85 railroad workers. 60 Fed.Reg. 49064 (1995). Because its experience showed that "properly designed and secured closures ... do not become loose during transportation," the Department concluded that "most of the incidents reported to RSPA reflect poor pre-trip preparation of the tank car prior to offering it for transportation." Id. CMA initially filed this petition to challenge the version of the regulation quoted above. TFI moved to intervene on CMA's side, and the court granted the motion. Subsequently, however, the Department revised the regulation to modify the last sentence, which now reads as follows:

That presumption may be rebutted by any evidence indicating that the lack of securement resulted from a specific cause not within the control of the offeror.

61 Fed.Reg. 33255 (1996) (to be codified at 49 C.F.R. § 173.31(d)(2)). In the preamble accompanying the revisions, the Department explained that the presumption "is not intended to shift to [shippers] the burden of proof in the sense of the risk of nonpersuasion, which remains with FRA." 61 Fed.Reg. 33252 (1996). Rather, the presumption simply imposes on a shipper the burden of producing some rebuttal evidence. Id. In addition, the preamble stated that the revised rule was intended to "remov[e] any suggestion that the rule limits the type of evidence that respondents may offer and that the fact finder may consider in a rebuttal case." Id.

Because CMA and TFI continued to object to the new language, the court ordered the parties to submit briefs on the validity of the revised rule. ¹

II.

Petitioners contend that the regulation is invalid for essentially two reasons. First, they maintain that the Department lacked the authority to establish the presumption because it has not demonstrated any reasonable connection between the facts giving rise to the presumption and the fact presumed. Second, they maintain that the regulation is invalid because it improperly limits the type of evidence that can be used to rebut the presumption.

A.

It is well settled that an administrative agency may establish evidentiary presumptions. But unlike a legislative body, which is free to adopt presumptions for policy reasons, see United Scenic Artists, Local 829 v. NLRB, 762 F.2d 1027, 1034 (D.C.Cir.1985), an agency may only establish a presumption if there is a sound and rational connection between the proved and inferred facts. NLRB v. Baptist Hosp., Inc., 442 U.S. 773, 787, 99 S.Ct. 2598, 2606, 61 L.Ed.2d 251 (1979); United Scenic Artists, 762 F.2d at 1034; Atchison, Topeka & Santa Fe Ry. Co. v. ICC, 580 F.2d 623, 629 (D.C.Cir.1978). The requirement of a rational connection derives from the Supreme Court's decision in Mobile, Jackson & Kansas City Railway Co. v. Turnipseed, 219 U.S. 35, 31 S.Ct. 136, 55 L.Ed. 78 (1910):

That a legislative presumption of one fact from evidence of another may not constitute a denial of due process of law or a denial of the equal protection of the law, it is only essential that there shall be some rational connection between the fact proved and the ultimate fact presumed, and that the inference of one fact from proof of another shall not be so unreasonable as to be a purely arbitrary mandate. So also, it must not, under guise or regulating the presentation of evidence, operate to preclude the party from the right to present his defense to the main fact thus presumed.

Id. at 43, 31 S.Ct. at 138. More recently, the Court has indicated that a court has a duty to review agency presumptions for consistency with their governing statutes, and for rationality. Baptist Hosp., 442 U.S. at 787, 99 S.Ct. at 2606 (citing Beth Israel Hosp. v. NLRB, 437 U.S. 483, 501, 98 S.Ct. 2463, 2473-74, 57 L.Ed.2d 370 (1978)). A presumption is normally appropriate when "proof of one fact renders the existence of another fact 'so probable that it is sensible and timesaving to assume the truth of [the inferred] fact ... until the adversary disproves it.' " NLRB v. Curtin Matheson Scientific, Inc., 494 U.S. 775, 788-89, 110 S.Ct. 1542, 1550, 108 L.Ed.2d 801 (1990) (quoting E. CLEARY, MCCORMICK ON EVIDENCE § 343, at 969 (3d ed.1984)) (alterations in original).

Both CMA and TFI contend that the Department's...