22 F.3d 1174 (D.C. Cir. 1994), 92-1212, National Classification Committee v. United States

Docket Nº:92-1212.
Citation:22 F.3d 1174
Party Name:NATIONAL CLASSIFICATION COMMITTEE and National Motor Freight Traffic Association, Inc., Petitioners, v. UNITED STATES of America and Interstate Commerce Commission, Respondents, Mallinckrodt Specialty Chemicals Company, et al., The National Industrial Transportation League, Intervenors.
Case Date:May 17, 1994
Court:United States Courts of Appeals, Court of Appeals for the District of Columbia Circuit

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22 F.3d 1174 (D.C. Cir. 1994)


Traffic Association, Inc., Petitioners,


UNITED STATES of America and Interstate Commerce Commission,


Mallinckrodt Specialty Chemicals Company, et al., The

National Industrial Transportation League, Intervenors.

No. 92-1212.

United States Court of Appeals, District of Columbia Circuit

May 17, 1994

Argued Oct. 29, 1993.

Petition for Review of an Order of the Interstate Commerce Commission.

William W. Pugh, Alexandria, VA, argued the cause, for petitioners. On brief, was John R. Bagileo, Washington, DC. Rosalind C. Cohen, Washington, DC, entered an appearance.

Michael Martin, Atty., I.C.C., Washington, DC, argued the cause, for respondents. On brief, were Robert S. Burk, Gen. Counsel, I.C.C., Craig M. Keats, Associate Gen. Counsel, I.C.C., and Robert B. Nicholson and John P. Fonte, Attys., Dept. of Justice, Washington, DC.

Daniel J. Sweeney, Washington, DC, argued the cause, for intervenors. On the joint brief, were Richard D. Fortin and Nicholas J. DiMichael, Washington, DC.

Before MIKVA, Chief Judge; WILLIAMS and HENDERSON, Circuit Judges.

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Opinion for the court filed by Circuit Judge KAREN LeCRAFT HENDERSON.

Concurring opinion filed by Circuit Judge STEPHEN F. WILLIAMS.


The National Classification Committee (NCC) seeks review of a decision by the Interstate Commerce Commission (ICC or Commission) ordering the NCC to cancel tariffs reclassifying certain acids that are designated as hazardous by the United States Department of Transportation and are transported by motor common carriers. Because the Commission reasonably concluded that the reclassification violates 49 U.S.C. Sec. 10706(b)(3)(C), we deny the NCC's petition for review.


The NCC is a standing committee of the National Motor Freight Traffic Association, a trade association whose members include roughly one thousand motor common carriers. The NCC is responsible for publishing the principal classification tariff, the National Motor Freight Classification (NMFC), used by motor common carriers to establish class rate tariffs. The NMFC groups commodities with similar transportation characteristics into divisions referred to as "classifications." Each classification is assigned a number called a "classification rating." The more difficult or costly it is to transport a commodity, the higher the classification rating of the commodity.

Although the NMFC itself does not establish trucking rates, it plays a significant role in the rate-setting process. Class rate tariffs incorporate the NMFC's classifications and establish rates on a classification by classification basis for transporting goods between specific locations. Generally, the higher the classification rating, the higher the rate the shipper pays for transportation. Class rate tariffs may be published either by a carrier individually or by a carrier rate bureau.

Historically Congress has excepted entities engaged in collective ratemaking from antitrust liability. See Reed-Bulwinkle Act, Pub.L. No. 90-662, 62 Stat. 472 (1948) (current version at 49 U.S.C. Sec. 10706). Motor common carriers can enter into agreements with each other regarding both classifications and rates and if the ICC approves the agreements the antitrust laws "do not apply ... with respect to making or carrying out the agreement." 49 U.S.C. Sec. 10706(b)(2). In the era of deregulation, however, Congress has narrowed the range of permissible collective ratemaking activities. See generally Household Goods Forwarders Tariff Bureau v. Interstate Commerce Comm'n, 968 F.2d 81, 82 (D.C.Cir.1992); National Classification Comm. v. United States, 765 F.2d 164, 166 (D.C.Cir.1985). Of relevance here, the Motor Carrier Act of 1980 (MCA 80 or the Act) prohibits collective action regarding "released rates." 49 U.S.C. Sec. 10706(b)(3)(C) ("No agreement approved under this subsection may provide for discussion of or voting on [released] rates...."). A carrier offers a released value rate when it charges the shipper a discounted rate in exchange for a limitation on the carrier's liability in the event of loss or damage. In contrast, when a carrier charges a full value rate, it assumes liability for the full value of any loss or damage.

The petition for review arises from the NCC's proposal to change the classification rating of acids designated hazardous by the United States Department of Transportation (DOT). In the past, all acids were grouped into a single classification encompassing applicable subclassifications for released rates. The NCC's proposal would change hazardous acids from the generic acids classification to a new, more specific classification that would not include subclassifications for released rates. The proposed change would result in the cancellation of all collectively established released rates for the reclassified acids. The NCC argues that the reclassification is necessary so that carriers are adequately compensated for the increased costs they must incur in complying with the DOT's more rigorous requirements for the transportation of hazardous acids.

Several individual shippers and shipper groups challenged the NCC's proposed reclassification before the ICC. In response,

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the ICC suspended the effectiveness of the proposed classification change pending a determination of its legality. The ICC ultimately concluded that the NCC's proposed reclassification resulted from proscribed collective action on released rates in violation of 49 U.S.C. Sec. 10706(b)(3)(C). Classification Rating on...

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