American Bus Ass'n v. U.S.
| Citation | 627 F.2d 525 |
| Decision Date | 25 June 1980 |
| Docket Number | Nos. 79-1207,79-1214,s. 79-1207 |
| Parties | AMERICAN BUS ASSOCIATION, Petitioner, v. UNITED STATES of America and Interstate Commerce Commission, Respondents, Maislin Transport Ltd., et al., Sanborn's Motor Express, Inc., Intervenors. REGULAR COMMON CARRIER CONFERENCE, et al., Petitioners, v. UNITED STATES of America and Interstate Commerce Commission, Respondents, Chemical Leaman Tank Lines, Inc., Butler Trucking Company, Maislin Transport Ltd., et al., Sanborn's Motor Express, Inc., Intervenors. |
| Court | United States Courts of Appeals. United States Court of Appeals (District of Columbia) |
Patrick McEligot, Washington, D. C., with whom Charles A. Webb, Washington, D. C., was on the brief, for petitioners. Patrick McEligot, Washington, D. C., also entered an appearance for Intervenor, Maislin Transport, Ltd., et al.
Evelyn G. Kitay, Atty., I. C. C., Washington, D. C., with whom Mark L. Evans, Gen. Counsel, Henri F. Rush, Associate Gen. Counsel, I. C. C., and Robert Lewis Thompson, Atty., Dept. of Justice, Washington, D. C., were on the brief, for respondents.
William H. Shawn, Washington, D. C., for intervenors, Butler Trucking Co., and Chemical Leaman Tank Lines, Inc., in No. 79-1214.
Before McGOWAN, ROBB and WALD, Circuit Judges.
Opinion for the Court filed by Circuit Judge McGOWAN.
We here review a pronouncement by the Interstate Commerce Commission which was intended to lessen the constraints placed upon motor carriers seeking authority to transport goods and people to and from Canada. In promulgating this pronouncement, the Commission did not follow the notice-and-comment procedures which section 553 of the Administrative Procedure Act prescribes for rule-making. The Commission contends that its action was, as distinct from a substantive rule, a "general statement of policy" as defined in section 553(b)(A), and that such procedures were therefore unnecessary. Because we conclude that the requirements of section 553 were applicable and were not met, we hold unlawful and set aside the statement.
On December 5, 1974, the Interstate Commerce Commission published notice in the Federal Register that, beginning March 3, 1975, it would apply the following policies to applicants wishing to provide motor carrier transportation to and from Canada:
(1) With respect to applications relating to traffic moving to or from Canada, we shall expect applicants to specify the Canadian points and port of entry points involved in this service, and grants of authority will be specifically limited accordingly.
(2) Where a Canadian carrier seeks single-line service authority for traffic moving to or from Canadian points, American protestants will be expected to show that they possess the necessary Canadian authority or are effectively competing for the involved traffic in an existing joint-line service.
(3) Any applicant seeking authority for a single-line service involving traffic moving to or from Canada must indicate that it holds the necessary Canadian authority or a condition will be imposed on a grant requiring the obtaining of such Canadian authority prior to issuance of the certificates.
Subsequently, the Commission became dissatisfied with these policies and, on February 8, 1978, voted to attach a "Note" to any authority involving Canadian traffic. The Note read:
The restrictions and conditions contained in the grant of authority in this proceeding are phrased in accordance with the policy statement entitled Notice to Interested Parties of New Requirements Concerning Applications for Operating Authority to Handle Traffic to and from points in Canada published in the Federal Register on December 5, 1974 and supplemented on November 18, 1975. The Commission is presently considering whether the policy statement should be modified, and is in communication with appropriate officials of the provinces of Alberta, Saskatchewan and Manitoba regarding this issue. If the policy statement is changed, appropriate notice will appear in the Federal Register and the Commission will consider all restrictions or conditions which were imposed pursuant to the prior policy statement, regardless of when the condition or restriction was imposed, as being null and void and having no force or effect.
On December 14, 1978, after meeting with Canadian provincial officials, but without giving public notice or soliciting public comment, the Commission adopted the policy statement here at issue. That statement, entitled "Revised Policy Concerning Applications for Operating Authority to Handle Traffic to and from Points in Canada," was published in the Federal Register on December 28, 1978, and provided:
(1) With respect to applications relating to traffic moving to or from points in Canada, the Commission will no longer restrict grants of authority to specific Canadian destinations or origins, or designate specific port of entry points which must be used.
(2) Carriers protesting applications for traffic moving to or from Canadian points are not required to show that they possess the necessary Canadian authority but are expected to comply with the requirements in Ex Parte No. 55 (Sub-No. 26), Protest Standards in Motor Carrier Application Proceedings, decided October 10, 1978.
(3) Applicants no longer need submit copies of Canadian authority and the Commission will not require a showing of complementary Canadian authority prior to the issuance of a certificate.
In discussing provision (1), the Commission announced, Id. The Commission warned, however, that "(c) arriers holding authorities issued prior to the effective date of the earlier policy statement are reminded that similar restrictions contained in their authorities are still valid and enforceable." Id.
As to provision (3), the Commission said, "All carriers now holding grants of authority conditioned solely on a showing of complementary Canadian authority should inform the Commission in writing and request immediate issuance of their certificates or permits." Id. at 60707 (footnote omitted).
Commissioner Stafford dissented. He objected to the Commission's failure to solicit the views of affected parties. Apparently speaking of foreign origin and destination restrictions, he also said:
(T)he restriction removed by this policy statement was imposed because of an express or implicit finding in each case that the public convenience and necessity did not warrant a broader grant of authority. . . . Elimination of these restrictions from outstanding certificates broadens the scope of authority, and cannot legally be effected without appropriate findings. At a minimum, general licensing would appear to be required.
Two trade associations of carriers the American Bus Association and the Regular Common Carrier Conference and a number of individual motor carriers now seek judicial review of the Commission's statement. Two motor carriers have intervened in support of respondents, who are the Commission and the United States of America.
The gist of petitioners' argument seems to be that the Commission's "policy statement" was not lawfully promulgated because the Commission failed to comply with section 553 of the Administrative Procedure Act (APA). 1 Section 553 requires that, when an agency proposes to issue a rule, it must first (1) publish a general notice in the Federal Register, (2) "give interested persons an opportunity to participate in the rule making through submission of written data, views, or arguments," and (3) "incorporate in the rules adopted a concise general statement of their basis and purpose."
Nevertheless, Congress anticipated that there would be times when "the policies promoted by public participation in rulemaking are outweighed by the countervailing considerations of effectiveness, efficiency, expedition and reduction in expense." Guardian Federal Savings & Loan Ass'n v. Federal Savings & Loan Insurance Corp., 589 F.2d 658, 662 (D.C. Cir. 1978). Therefore, in section 553(b)(A) of the APA Congress excepted "general statements of policy" from the requirements of section 553. Respondents argue that the statement under review falls within that exception.
In order to test respondents' argument, we must first understand the scope and significance of the principle from which they wish to be excepted. Section 553 was one of Congress's most effective and enduring solutions to the central dilemma it encountered in writing the APA reconciling the agencies' need to perform effectively with the necessity that "the law must provide that the governors shall be governed and the regulators shall be regulated, if our present form of government is to endure." S. Doc. No. 248, 79th Cong., 2d Sess. 244 (1946), quoting H.R.Rep. No. 1149, 76th Cong., 1st Sess. 2 (1939). The "principal purpose" of section 553 was "to provide that the legislative functions of administrative agencies shall so far as possible be exercised only upon public participation on notice . . . ." Id. at 257. Congress thus selected public participation in rule-making as its means of assuring that an agency's decisions are both informed and responsive. As we have said before, "if the Agency, in carrying out its 'essentially legislative task,' has infused the administrative process with the degree of openness, explanation, and participatory democracy required by the APA, it will thereby have 'negate(d) the dangers of arbitrariness and irrationality in the formulation of rules . . . .' " Weyerhaeuser Co. v. Costle, 590 F.2d 1011, 1027-28 (D.C. Cir. 1978).
We do not, of course, doubt that agencies may bypass section 553's requirements when...
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