Aberdeen & Rockfish R. Co. v. U.S.

• Decision Date: 09 August 1982
• Docket Number: Nos. 80-2099,80-2327,s. 80-2099
• Citation: 682 F.2d 1092
• Parties: ABERDEEN & ROCKFISH RAILROAD COMPANY & Other Railroads, Petitioners, v. The UNITED STATES of America and the Interstate Commerce Commission, Respondents. NATIONAL MOTOR FREIGHT TRAFFIC ASSOCIATION, INC., Petitioner, v. The UNITED STATES of America and Interstate Commerce Commission, Respondents.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1092

682 F.2d 1092

ABERDEEN & ROCKFISH RAILROAD COMPANY & Other Railroads, Petitioners, v. The UNITED STATES of America and the Interstate Commerce

Commission, Respondents.

NATIONAL MOTOR FREIGHT TRAFFIC ASSOCIATION, INC., Petitioner, v. The UNITED STATES of America and Interstate Commerce

Commission, Respondents.

Nos. 80-2099, 80-2327.

United States Court of Appeals Fifth Circuit.

Aug. 9, 1982.

John J. Powers, III, James H. Laskey, Kenneth P. Kolson, U. S. Dept. of Justice, Evelyn G. Kitay, Atty., I. C. C., Washington, D. C., for respondents.

James E. Sykes, Chicago, Ill., for Western R. R. Ass'n.

James R. Paschall, Asst. Gen. Atty., Washington, D. C., for Southern Ry. System.

Albert B. Russ, Jr., Jacksonville, Fla., for Seaboard Coast Lines R. R.

Harry N. Babcock, Cleveland, Ohio, for Chessie System.

Rea, Cross & Auchincloss, Patrick McEligot, Bryce Rea, Jr., Washington, D. C., for National Motor Freight Traffic Ass'n, Inc.

Leonard A. Jaskiewicz, Washington, D. C., for Bulk Carrier Conference, Inc.

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

Before GARZA, POLITZ and WILLIAMS, Circuit Judges.

JERRE S. WILLIAMS, Circuit Judge:

Petitioners in these consolidated cases are the nation's railroads and the National Motor Freight Traffic Association (NMFTA), an organization composed of approximately 3,000 common motor carriers. We shall refer to petitioners collectively as "Carriers." The Carriers have sought review, pursuant to 28 U.S.C. §§ 2321(a), 2342(5), and 2344, of a portion of an order by the Interstate Commerce Commission (the Commission), Ex Parte No. 370, Tariff Improvement (June 10, 1981). As explained below, Ex Parte No. 370 introduced a new procedure for ensuring compliance with the Commission's tariff symbolization requirements. The Carriers contend that the Commission has exceeded its statutory authority under the Revised Interstate Commerce Act, 49 U.S.C. §§ 10761(a), 10762(b), and 10762(e), in adopting the new policy. They further maintained that the regulation devised to enforce the new policy is arbitrary and capricious, in contravention of the Administrative Procedure Act, 5 U.S.C. § 706(2)(A) & (C). Having reviewed the arguments and pertinent authorities, we conclude that the new regulation is both authorized by law and supported in the record.

I. Symbolization

The Revised Interstate Commerce Act (the Act) requires carriers providing transportation or service subject to the jurisdiction of the Commission to publish and file with that agency tariffs containing the rates that are charged to shippers. See generally 49 U.S.C. § 10762. Regulated carriers may collect only the rates that are contained in tariffs on file with the Commission, see 49 U.S.C. § 10761, and departure from the filed rate schedule will subject a carrier to civil and criminal liability, 49 U.S.C. §§ 11901, 11903. The Commission is empowered to prescribe the form and manner of publishing, filing, and keeping the tariffs open for public inspection. 49 U.S.C. § 10762(b)(1). However, the Act itself clearly states that newly filed tariffs must "plainly identify" any proposed rate change and indicate its proposed effective date. 49 U.S.C. § 10762(c)(3). Normally a new tariff will become effective thirty days or, in the case of railroads, twenty days, after the carrier files it, id., unless the Commission suspends the proposed rate pending the outcome of an investigation pursuant to 49 U.S.C. § 10707(a) or § 10708(a).

As authorized by 49 U.S.C. § 10762(b)(1), the Commission has promulgated regulations prescribing the form in which tariffs are to be published and filed. One such regulation governs the symbolization of changed rates, requiring that

(t)ariff publications shall indicate changes made in existing rates, charges, classifications, rules, or other provisions by use of the following uniform reference marks in connection with each such change:

or (R) to denote reductions

or (A) to denote increases

or (C) to denote changes which result in neither increases nor reductions in charges

49 C.F.R. § 1310.10(f)(1). As justified by the Commission, these requirements "are designed to allow tariff users to rely on symbolization to (1) discover changes and (2) evaluate those changes. Discovery and evaluation are vital to tariff users' rights to timely protest proposed tariff changes." 44 Fed.Reg. 60123 (1979).

Until 1979, the Commission maintained a staff that examined every proposed tariff prior to its effective date in order to uncover obvious defects in publication, including symbolization errors. Tariffs submitted without the appropriate change-denoting symbols were rejected, pursuant to 49 U.S.C. § 10762(e), and the offending carrier then had to resubmit the proposed schedule in acceptable form. Apparently in the belief that few improperly symbolized tariffs would escape this scrutiny, the Commission never sought to exact any penalty for symbolization errors discovered after a tariff had gone into effect. Rather, it merely advised the carrier of its error and requested more caution in the future.

On October 18, 1979, however, the Commission published a Notice of Proposed Rulemaking reporting a change of policy. In an order docketed as Ex Parte No. 370, the Commission explained that budgetary constraints had forced it to abandon its comprehensive tariff examination service. Thenceforth, the Commission could review only a random sample of newly filed tariffs. Since increasing numbers of inadequately symbolized increases would go undetected, the agency had concluded that stiffer sanctions were in order:

We believe it would be inappropriate for tariff users to be burdened with the onerous chore of comparing proposed tariff filings word-for-word or figure-for-figure against existing tariff matter. They should be able to rely on the accuracy of tariff symbolization. The rules proposed here would stipulate that improperly-symbolized changes which result in increases would be considered improperly published and thus invalid and uncollectable. This would offer retroactive protection to tariff users who had been effectively deprived of their right to protest by missymbolization.

44 Fed.Reg. 60123 (1979). The Notice proposed the following regulation for inclusion in the Code of Federal Regulations:

Changes resulting in increases which are not identified by proper symbols shall be considered unlawfully published and filed and therefore invalid and not collectable. In such cases, the lawful provisions will be those which were purportedly superseded. Invalid provisions shall be cancelled by publications which shall bring forward, or properly amend, provisions which have remained in effect by reason of invalid publication.

The Notice declared further that "(c)harges assessed on the basis of the invalid provisions would be subject to the usual overcharge claim procedures." 44 Fed.Reg. 60124. ¹

Following the obligatory period in which it received comments and suggestions from interested parties, the Commission published its decision in Ex Parte No. 370, Tariff Improvement (August 14, 1980). Despite the predictably unfavorable response from Carriers, ² the Commission adopted the proposed rule without change. The decision explained that yearly increases in the number of published tariffs had combined with budgetary and personnel constraints to make the new policy imperative. As originally proposed, the new regulation was to apply only to improperly symbolized increases, since unnoticed rate raises pose the greatest threat to tariff users. The decision also made it clear that claims for overcharges accruing from publication of improperly symbolized-and therefore unlawful-tariffs could be filed at any time within the ordinary three-year limitation period prescribed by 49 U.S.C. § 11706(b).

The controversial regulation was duly codified at 49 C.F.R. §§ 1300.2(a)(4), 1303.4(d)(3), 1304.2(c), 1306.5(b)(2), 1307.5(r)(1), 1308.2(a), and 1310.10(f) (5). Although it was scheduled to become effective on October 14, 1980, this Court granted a temporary stay of its operation and enforcement pending our review. The Commission subsequently denied several petitions for reconsideration of Ex Parte No. 370. See 365 I.C.C. 43 (1981).

II. The Commission's Authority

A. Standard of Review

In reviewing a decision of the Commission, "(w)e can ask only whether the Commission has observed the statutory limits that Congress has set for its discretion, whether its action was arbitrary or capricious, or whether its findings are supported by adequate analysis and substantial evidence in the record considered as a whole." Missouri-Kansas-Texas Railroad v. United States, 632 F.2d 392, 400 (5th Cir. 1980), cert. denied, 451 U.S. 1017, 101 S.Ct. 3004, 69 L.Ed.2d 388 (1981). See 5 U.S.C. § 706(2)(A), (C), (E). At the outset, then, we must determine whether the Commission has remained within the statutory bounds set forth in the Act. Statutory construction normally raises only questions of law, which are freely reviewable de novo by the courts. See Coca-Cola Co. v. Atchison, Topeka & Santa Fe Railway, 608 F.2d 213, 218 (5th Cir. 1979). While courts must not shirk through inertia their responsibility as final authorities on matters of statutory interpretation, "(t)he construction put on a statute by the agency charged with administering it is entitled to deference by the courts, and ordinarily that construction will be affirmed if it has a 'reasonable basis in law.' " Volkswagenwerk Aktiengesellschaft v. FMC, 390 U.S. 261, 272, 88 S.Ct. 929, 935, 19 L.Ed.2d 1090 (1968). See also Coca-Cola Co., supra, 608 F.2d at 222 ("(E)ven when the issue is one of pure law, such as interpretation of contracts, tariffs, regulations, and statutes, room still is present for deference to the views of administrative agencies, particularly where the understanding of the problem is enhanced by the agency's expert understanding of the industry")....