National Ass'n of Recycling Industries, Inc. v. I.C.C.
| Decision Date | 15 July 1981 |
| Docket Number | 79-1970 and 79-1984,79-1838,79-1620,79-1583,79-1839,79-1611,Nos. 81-1051,79-1395,79-1582,79-1860,79-1393,79-1590,s. 81-1051 |
| Citation | 660 F.2d 795 |
| Parties | NATIONAL ASSOCIATION OF RECYCLING INDUSTRIES, INC., Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents, Association of American Railroads, et al., Aluminum Association, Inc., Intervenors. NATIONAL ASSOCIATION OF RECYCLING INDUSTRIES, INC., Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents, Atchison, Topeka and Santa Fe Railway Co., et al., Institute of Scrap Iron and Steel, Inc., National Steel Corporation (79-1582) American Paper Institute, Inc. (79-1590), Intervenors. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Petitions for Review of Orders of the Interstate Commerce commission.
Ellen K. Schall, Deputy Associate Gen. Counsel, I. C. C., Washington, D. C., with whom Richard A. Allen, Gen. Counsel and Robert S. Burk, Deputy Gen. Counsel, I. C. C., Washington, D. C., were on the brief, for respondent, Interstate Commerce Commission. John J. Powers, III and Kenneth P. Kolson, Attys., Dept. of Justice, Washington, D. C., entered appearances for respondent, United States of America.
Michael Boudin, Washington, D. C., with whom Timothy A. Harr, James L. Tapley, Washington, D. C., James L. Howe, III, Richmond, Va., Harry N. Babcock, Cleveland, Ohio, Richard W. Kienle, Roanoke, Va., William C. Leiper and John A. Dailey, Philadelphia, Pa., were on the brief for intervenors, Association of American Railroads, et al.
Dickson R. Loos, Washington, D. C., was on the Statement in lieu of brief, for intervenor, Aluminum Association.
Edward L. Merrigan, Washington, D. C., was on the brief for petitioner National Association of Recycling Industries, in case No. 79-1393.
David Reichert, Howard Gould and Stephen D. Strauss, Cincinnati, Ohio, were on the brief, for the petitioner Institute of Scrap Iron and Steel, Inc. in case No. 79-1395.
John F. Donelan, and John K. Maser, III, Washington, D. C., for Armco, Inc., Inland Steel Co., Republic Steel Corp. and Youngstown Sheet and Tube Co., and Engene T. Liipfert, Fritz R. Kahn and L. John Osborn, Washington, D. C., for National Steel Corp. and Paul V. Miller, Bethlehem, Pa., for Bethlehem Steel Corp., were on the joint opening brief, for Armco, Inc., Inland Steel Co., Republic Steel Corp., and Youngstown Sheet and Tube Co. (petitioners in No. 79-1582), and Bethlehem Steel Corp. and National Steel Corp. (intervenors in No. 79-1582).
John F. Donelan, John K. Maser, III, and Renee D. Rysdahl, Washington, D. C., were on the brief, for petitioner American Paper Institute, Inc., in case No. 79-1583.
Michael Boudin, Timothy A. Harr, Washington, D. C., Richard W. Kienle, Roanoke, Va., and John A. Dailey, Philadelphia, Pa., were on the brief, for petitioner Railroads in case No. 79-1590.
Dickson R. Loos, Washington, D. C., were on the brief for petitioner Aluminum Association, Inc., in case No. 79-1611.
C. Michael Loftus, William L. Slover and Donald G. Avrey, Washington, D. C., were on the brief, for petitioner Fort Howard Paper Co., in case No. 79-1620.
Robert N. Kharasch, Edward D. Greenberg, Washington, D. C., was on the brief, for petitioner Southern Paper Traffic Conference in case No. 79-1838, petitioner Southwestern Paper Traffic Conference in case No. 79-1839, petitioner Wisconsin Paper and Pulp Manufacturers Traffic Association in case No. 79-1860, and petitioner Western Paper Traffic Conference in case No. 79-1970.
Michael M. Briley, Louis E. Tosi and Stephen B. Mosier, Toledo, Ohio, were on the brief, for petitioner Glass Packing Institute in case No. 79-1984.
Robert S. Burk, Deputy Gen. Counsel and David Popowski, Atty., I. C. C., Washington, D. C., were on the brief for respondent, ICC. Kenneth G. Caplan and Frederick W. Read, III, Attys., I. C. C., Washington, D. C., also entered appearance for respondent, ICC.
Barry Grossman, John J. Powers, III and Robert Lewis Thompson, Attys., Dept. of Justice, Washington, D. C., were on the brief, for respondent Department of Justice.
Before MacKINNON and WALD, Circuit Judges, and RONALD N. DAVIES *, United States Senior District Judge for the District of North Dakota.
Opinion for the Court filed by Senior District Judge RONALD N. DAVIES.
Presenting a matter of statutory construction, the National Association of Recycling Industries, Inc. (NARI), in its petition for review 1 of a final report and order of the Interstate Commerce Commission (Commission) issued December 30, 1980, Ex Parte 394, challenges the Commission finding that Section 204 of the Staggers Rail Act of 1980 2 is ambiguous.
The Act, signed into law by the President October 14, 1980, was passed by Congress to provide guidelines under which the Commission would develop a new revenue-to-variable 3 cost standard for certain recyclables:
TRANSPORTATION OF RECYCLABLE MATERIALS
SEC. 204. Section 10731 of title 49, United States Code, is amended by adding at the end thereof the following new subsection:
(e) Notwithstanding any other provision of this title or any other law, within 90 days after the effective date of the Staggers Rail Act of 1980, all rail carriers providing transportation subject to the jurisdiction of the Commission under subchapter I of chapter 105 of this title shall take all actions necessary to reduce and thereafter maintain rates for the transportation of recyclable or recycled materials, other than recyclable or recycled iron or steel, at revenue-to-variable cost ratio levels that are equal to or less than the average revenue-to-variable cost ratio that rail carriers would be required to realize, under honest, economical, and efficient management, in order to cover total operating expenses, including depreciation and obsolescence, plus a reasonable and economic profit or return (or both) on capital employed in the business sufficient to attract and retain capital in amounts adequate to provide a sound transportation system in the United States. As long as any such rate equals or exceeds such average revenue-to-variable cost ratio established by the Commission, such rate shall not be required to bear any further rate increase. The Commission shall have jurisdiction to issue all orders necessary to enforce the requirements of this subsection.
On November 18, 1980, a notice was issued by the Commission instituting Ex Parte 394 for the purpose of establishing an average revenue-to-variable cost ratio. Also requested were comments on the Commission's interpretation of the Act relating to rate reduction requirements:
Section 204 requires the railroads, within 90 days, to take all actions necessary to "reduce and thereafter maintain" rates for recyclables, other than scrap iron and steel, at cost ratio levels equal to or less than the defined average ratio. This wording implies that the carriers are to reduce immediately any above-average recyclable rates.
However, section 204 goes on to state that as long as a rate exceeds the average cost ratio, the rate cannot be increased. This suggests that rates do not have to be decreased immediately. This interpretation is supported by the Joint Explanatory Statement of the Committee of Conference, which states the bill would prohibit increases for rates which are currently above the threshold until such time as the rate falls below the average revenue-to-variable cost threshold.
Because of the legislative history, we are inclined toward the interpretation that immediate reductions are not required. However, we invite the public to comment upon the question.
In its final decision the Commission computed the average revenue-to-variable cost ratio to be 146% and concluded that "rates above the calculated average may not bear any further increases but need not be reduced."
In the present highly inflationary climate, the statutory prohibition against increasing rate levels is equivalent to a substantial constant dollar rate decrease. We conclude that the Congress had inflation in mind as the mechanism by which recyclable rates would be reduced to the threshold level. Rates currently above the threshold will, over time, fall below the average revenue-to-variable cost threshold by virtue of prohibiting increases to such recyclable rates.
We think this interpretation is consistent with what we believe to be major Congressional policy objective of the Staggers Act. The new law is designed to eliminate unnecessary Federal regulation and permit railroad management to improve the revenue position of the railway system by adopting new service and pricing strategies to retain and attract traffic. Requiring rate reductions on such services as transportation of recyclables in an industry that is financially weak would be contrary to this overriding policy objective.
Two of the five Commissioners participating dissented, contending that the Act clearly required rail carriers to immediately reduce and maintain rates equal to or less than 146% and if the reductions were averaged (by commodity and/or geographic level), individual rates would be both above and below 146% and those above would not be required to bear any further increases until they fell below the established ratio.
We are fully aware of the deference due the construction placed on a statute by an agency charged with the responsibility for administering it. SEC v. Sloan, 436 U.S. 103, 98 S.Ct. 1702, 56 L.Ed.2d 148 (1978); Train v. Natural Resources Defense Council, 421 U.S. 60, 95 S.Ct. 1470, 43 L.Ed.2d 731 (1975); Udall v. Tallman, 380 U.S. 1, 85 S.Ct. 792, 13 L.Ed.2d 616 (1965). However to accord deference is not to abdicate our duty to construe the statute, for "the courts are the final authorities and 'are not obliged to stand aside...
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