Association of Am. R. R. v. I. C. C.

• Decision Date: 29 July 1977
• Docket Number: No. 76-1623,76-1623
• Citation: 564 F.2d 486
• Parties: ASSOCIATION OF AMERICAN RAILROADS, Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents, S. C. Loveland Co., Inc., Intervenor.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 486

564 F.2d 486

184 U.S.App.D.C. 1

ASSOCIATION OF AMERICAN RAILROADS, Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America Respondents S. C. Loveland Co., Inc., Intervenor.

No. 76-1623.

United States Court of Appeals District of Columbia Circuit.

Argued April 22, 1977.

Decided July 29, 1977.

Thomas C. Dorsey, Washington, D.C., with whom Harry J. Breithaupt, Jr., Washington, D.C., was on the brief for petitioner.

Christine N. Kohl, Atty., I.C.C., Washington, D.C., with whom Robert S. Burk, Acting Gen. Counsel, I.C.C., and Lloyd John Osborn, Atty., Dept. of Justice, Washington, D.C., were on the brief for respondent. Peter A. Fitzpatrick, Asst. Gen. Counsel, I.C.C., Washington, D.C., also entered an appearance for respondent, I.C.C.

Donald Macleay, Washington, D.C., with whom Neal A. Jackson, Washington, D.C., was on the brief for intervenor.

Before ROBINSON, MacKINNON and ROBB, Circuit Judges.

Opinion for the court filed by Circuit Judge MacKINNON.

MacKINNON, Circuit Judge:

The "custom-of-the-trade provision" of section 303(b) of the Interstate Commerce Act, 49 U.S.C. § 903(b), exempts from Interstate Commerce Commission regulation the carriage by water carrier of "commodities in bulk which are (in accordance with the existing custom of the trade in the handling and transportation of such commodities as of June 1, 1939) loaded and carried without wrappers or containers and received and delivered by the carrier without transportation mark or count." From the time of its enactment in 1940 until 1976, the ICC interpreted this provision to exempt from ICC regulation only the carriage of those commodities actually carried in bulk as of June 1, 1939. In 1975, barge operators filed a petition seeking cancellation of a tariff for the carriage of bulk grains. A Commission administrative law judge concluded that the petitioners had not met their burden of proof that the commodities were exempt under section 303(b). ¹ On appeal, in response to a suggestion by an intervenor, the Commission's Division 2 reinterpreted that provision to instead exempt the carriage by water of all bulk commodities transported in the manner in which commodities were carried in bulk on June 1, 1939, whether or not the particular commodity in question was carried in bulk on that date. It concluded that all of the commodities involved in the tariff in issue were therefore exempt from regulation, and that the tariff should be cancelled in its entirety. ² A show cause order, inviting any interested party to show cause why the division's conclusions should not be adopted, was published on February 4, 1976. ³ The Association of American Railroads (Railroads), although not originally a party, filed a petition in response to this publication seeking reconsideration of the division's reinterpretation of the "custom-of-the-trade provision." ⁴ The division denied this petition, ⁵ and the Commission, in general session, denied the Railroads' subsequent petition seeking a finding that the proceeding involved an issue of general transportation importance. ⁶ The Railroads then filed the present petition for review, and S. C. Loveland Company, a certified water carrier, has intervened. ⁷

I.

Section 303(b), as originally enacted in the Transportation Act of 1940, ⁸ excepted the transportation by water carriers of "commodities in bulk" from regulation by the ICC, but provided that this exception would apply only where three criteria were satisfied: (1) "the cargo space of the vessel in which such commodities are transported is being used for the carrying of not more than three such commodities" (the "three-commodity restriction"); (2) the bulk commodities be ones "which are (in accordance with the existing custom of the trade in the handling and transportation of such commodities as of June 1, 1939) loaded and carried without wrappers or containers and received and delivered by the carrier without transportation mark or count" (the "custom-of-the-trade provision"); and (3) the "no-mixing rule." ⁹ In addition, the section provided that "two or more vessels while navigated as a unit (barges) shall be considered to be a single vessel." Each of these restrictions had been subject to criticism, and all except the custom-of-the-trade provision were repealed when the section was amended in 1970 ¹⁰ and 1973. Section 303(b) now states:

Nothing in this (part) shall apply to the transportation by water carriers of commodities in bulk. This subsection shall apply only in the case of commodities in bulk which are (in accordance with the existing custom of the trade in the handling and transportation of such commodities as of June 1, 1939) loaded and carried without wrappers or containers and received and delivered by the carrier without transportation mark or count. This subsection shall not apply to transportation subject, at the time this part takes effect, to the provisions of the Intercoastal Shipping Act, 1933, as amended. ¹¹

We conclude that the language of the "custom-of-the-trade provision" in the 1940 Act and which was retained without change in the 1970 and 1973 amendments is susceptible on its face to either interpretation urged by the parties to this petition for review. We therefore proceed to consider other indications of the meaning intended by Congress.

II.

The Commission concedes that for 35 years, it interpreted the custom-of-the-trade provision to exclude from regulation only the carriage by water of commodities actually carried in bulk on June 1, 1939. ¹² The 1973 amendment left the language of the custom-of-the-trade provision unchanged. The Railroads and the intervenor argue that the Congress in 1973 was clearly aware of the Commission's longstanding interpretation of that provision, and that the Commission is barred by the "doctrine of reenactment" from now changing its interpretation. On the other hand, the division in its report and order relied principally on its view that the legislative history of the 1973 amendment justified a reinterpretation of the provision. We find this claim to be unsupported and the Commission in this court does not rely directly on this argument. ¹³ Instead it bases its response primarily upon the division's alternative holding that the new interpretation is necessary because the original interpretation was incorrect. ¹⁴ In support of this position, however, the Commission contends that "(a) review of the legislative history of Section 303(b) of the Act, particularly as amended in 1973, and as discussed in the Commission's report at issue herein, . . . is indeed the proper one." ¹⁵ We therefore consider the legislative history of the 1973 amendment and determine what effect, if any, it should have on the disposition of this case.

There is ample evidence in the legislative history of the 1973 amendment that the Congress did not intend thereby to alter the meaning of the custom-of-the-trade provision, and the Commission was therefore well advised in electing not to rely directly upon the division's reading of that history. It was no accident that the 1970 and 1973 amendments left intact only the custom-of-the-trade provision, of the three restrictions in the original section 303(b). For a number of years, the restrictions in section 303(b) presented no problems for barge operators. In later years, however, water carrier operations evolved and tow boats became larger and more powerful, permitting larger tows. The 1940 limitations in section 303(b) made operations increasingly inconvenient and inefficient. ¹⁶ A number of bills attempting to deal with the "mixing rule" problem were introduced, beginning with the 87th Congress. Bills introduced to the 90th Congress in 1967 would have repealed not only the no-mixing rule and the three-commodity restriction, but also the custom-of-the-trade provision. ¹⁷ At subcommittee hearings, the elimination of all three restrictions was vigorously supported by the Commission ¹⁸ and by various shipper representatives. ¹⁹ The testimony of each assumed the correctness of the Commission's prior interpretation of the custom-of-the-trade provision.

Instead of the sweeping amendment proposed in 1967, the Congress in 1970 adopted a more limited amendment temporarily suspending the effect of the no-mixing rule. In the same Act, Congress directed the Department of Transportation (DOT), with the assistance of the Interstate Commerce Commission and the Secretary of the Army, to "undertake a comprehensive study of the present system of economic regulation of dry bulk commodity transportation," and to complete the study within two years. ²⁰ The result of this order was a two-volume report submitted to the Congress in 1973. ²¹ In this report, DOT summarized the existing language and interpretation of section 303(b), collected and analyzed data concerning its application and effect, and recommended permanent statutory amendment. The summary of the meaning of the custom-of-the-trade provision is in accord with the Commission's interpretation at that time. ²² DOT concluded that "(t)he Three-Commodity-Restriction is confusing, has never had universal compliance, and has not been the subject of formal enforcement action," and that "(t)he No-Mixing Rule has never directly affected the operating practices of the inland water carriers; in its early years the status of barge technology made the Rule irrelevant while in recent years its enforcement has been held in abeyance." ²³ The Department therefore recommended that both of these restrictions be repealed. ²⁴ The Department, however, reached a contrary conclusion regarding the custom-of-the-trade provision:

After reviewing the detailed records of the regulated dry bulk commodity movements which actually move regulated, and polling a wide and representative sample of barge and chemical industry experts, it was found that sugar is the only commodity moving in significant quantities on the inland waterways that...