Cartersville Elevator, Inc. v. I.C.C.

• Decision Date: 03 January 1984
• Docket Number: No. 82-2276,82-2276
• Citation: 724 F.2d 668
• Parties: CARTERSVILLE ELEVATOR, INC., Community Elevators, Inc., Farms Co-op Society, Farmers Community Co-op Elevator, Farmers Community Co-op, Inc., and Four County Agricultural Supply, Inc., Petitioners, v. INTERSTATE COMMERCE COMMISSION, Respondents, and Chicago and North Western Transportation Company, Intervening Respondent.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 668

724 F.2d 668

CARTERSVILLE ELEVATOR, INC., Community Elevators, Inc.,

Farms Co-op Society, Farmers Community Co-op

Elevator, Farmers Community Co-op, Inc.,

and Four County Agricultural

Supply, Inc., Petitioners, v. INTERSTATE COMMERCE COMMISSION, Respondents, and Chicago and North Western Transportation Company,

Intervening Respondent.

No. 82-2276.

United States Court of Appeals,

Eighth Circuit.

Submitted June 16, 1983.

Decided Jan. 3, 1984.

Michael P. Casey, St. Louis, Mo., Thomas F. McFarland, Jr., Chicago, Ill., for petitioners; Lewis, Rice, Tucker, Allen & Chubb, St. Louis, Mo., Belnap, Spencer & McFarland, Chicago, Ill., of counsel.

Robert T. Opal, Chicago, Ill., for intervening respondent Chicago and North Western Transp. Co.

John Broadley, Gen. Counsel, Henri F. Rush, Associate Gen. Counsel, Louis Mackall, Atty., I.C.C., Washington, D.C., for I.C.C.

Before BRIGHT, JOHN R. GIBSON, and FAGG, Circuit Judges.

JOHN R. GIBSON, Circuit Judge.

The Interstate Commerce Commission approved the abandonment of 35.6 miles of railroad line between Mason City and Kesley, Iowa (Mason City line) operated by the Chicago and North Western Transportation Company (CNW). Six shippers who used the line to ship or receive grain, fertilizer and agricultural supplies opposed the abandonment before the ICC and petitioned this court for judicial review of the ICC's decision. The shippers claim that the ICC's use of opportunity costs in approving the abandonment of the Mason City line violated its own regulation and its statutory mandate. We affirm the decision of the ICC.

I.

The ICC is authorized to approve the abandonment of rail lines if "the present or future public convenience and necessity require or permit" the abandonment. 49 U.S.C. Sec. 10903(a) (Supp. V 1981). This standard requires that the ICC balance the local benefit of continued operation of a rail line with the present and future burden its operation imposes on interstate commerce. Colorado v. United States, 271 U.S. 153, 46 S.Ct. 452, 70 L.Ed. 878 (1925); City of Cherokee v. I.C.C., 641 F.2d 1220 (8th Cir.1981), cert. denied, 454 U.S. 892, 102 S.Ct. 388, 70 L.Ed.2d 206. The profitability of a rail line determines the burden its operation places on interstate commerce. Colorado v. United States, 271 U.S. at 169, 46 S.Ct. at 456. While profitability has traditionally been determined by comparing the revenues generated by the line with the costs that would be avoided if abandonment were permitted, ¹ Missouri Pacific R.R. v. United States, 625 F.2d 178 (8th Cir.1980), the ICC in 1979 served notice that it would begin to consider opportunity costs as an additional factor in determining the burden on interstate commerce. Abandonment of Railroad Lines-Use of Opportunity Costs, 360 I.C.C. 571 (1979) aff'd Farmland Industries, Inc. v. United States, 642 F.2d 208 (7th Cir.1981) (Opportunity Costs). Opportunity costs are defined as "the real economic loss an entity experiences when it must forego some other, more profitable use of its resources." Id. at 571. They are computed by multiplying the net liquidation value of the line by an adequate rate of return. Texas and Pacific Ry. Abandonment, 363 I.C.C. 666, 671 (1980) (Rock House). The ICC has adopted a rate of return equivalent to the railroad industry's inflation-adjusted cost of capital. Illinois Central Gulf R.R. Abandonment, 363 I.C.C. 729, 733 (1980), aff'd sub nom., Ballard County Rail Users v. I.C.C., 665 F.2d 1043 (6th Cir.1981) (unpublished opinion) (Kevil).

On September 8, 1981, CNW filed an application with the ICC seeking authority to abandon the Mason City line. On February 20, 1982, an ICC Review Board denied the application. On appeal, the full Commission reversed the Review Board and granted the abandonment. Chicago and North Western Abandonment, 366 I.C.C. 373 (1982) (CNW Abandonment). In granting the abandonment, the ICC determined that the Mason City line generated profits of $235,874.00 in the base year ² ($823,682.00 in revenues minus $587,808.00 in avoidable costs). Normalized maintenance expenses ³ of $176,678.00 reduced the line's profit to $59,196.00. The ICC then determined that CNW suffered opportunity costs of $202,743.00 in operating the line. ⁴ This resulted in a "net economic loss" to CNW of $143,547.00. With the possibility of increased future revenues remote, the ICC concluded that continued operation of the Mason City line would burden interstate commerce.

The ICC then considered the burden abandonment would impose on local communities and shippers. The shippers claimed abandonment would result in greater reliance on motor carrier transportation, thus increasing costs and inconvenience. However, they offered no information concerning the amount of traffic they shipped by rail or the extent to which abandonment would increase their costs. Moreover, interrogatories answered by three of the shippers indicated that they were already making substantial use of motor carriers ⁵ and that a sufficient number of such carriers were available to handle the increased business resulting from abandonment. The ICC concluded that the slight burden abandonment would impose on local interests did not outweigh the burden on interstate commerce, and thus approved the abandonment. A petition to reopen the matter was denied. Chicago and Northwestern Abandonment, No. AB-1 (Sub. No. 119) (August 20, 1982).

The shippers raise three objections concerning the ICC's use of opportunity costs in permitting the abandonment of the Mason City line. First, they claim that the ICC violated its own definition of opportunity costs by failing to require CNW to reinvest the assets freed by abandonment in a specific use, rail or nonrail, which will realize the 10.2% rate of return upon which opportunity costs were calculated. Second, the shippers contend that opportunity costs are not a burden on interstate commerce within the meaning of the Colorado v. United States, supra, balancing test unless the assets freed by abandonment are reinvested in an alternative rail use. Third, the shippers claim that the ICC's use of opportunity costs without regard to the post-abandonment use of the assets will result in wholesale abandonment of thousands of miles of railroad lines, which in turn will frustrate national transportation rail policy "to ensure the ... continuation of a sound rail transportation system ... to meet the needs of the public and the national defense." 49 U.S.C. Sec. 10101a(4) (Supp. V 1981).

II.

A threshold issue is presented. CNW argues that this court lacks jurisdiction to review the ICC order granting abandonment because the shippers' petition for judicial review was not filed in a timely manner. Under 28 U.S.C. Sec. 2344 (1976), petitions for judicial review of agency decisions must be filed within 60 days of the date of entry of a final order. Timeliness of the petition is a jurisdictional requirement that cannot be modified or waived by this court. Chem-Haulers, Inc. v. United States, 536 F.2d 610 (5th Cir.1976); Fed.R.App.P. 26(b).

The Review Board served its order denying CNW's initial application for abandonment on February 19, 1982. The order of the full Commission reversing the Review Board and granting the abandonment was served on May 21, 1982. The order denying shippers' petition to reopen was served on August 26, 1982. The petition seeking judicial review was filed on October 22, 1982; this was 154 days after the order granting abandonment and 57 days after the order denying the petition to reopen. Thus, the petition for judicial review is timely if the petition to reopen tolled the 60-day period until August 26.

The two methods of administrative appeal from an ICC decision are petitions to reopen administratively final actions, 49 C.F.R. Sec. 1115.4, Sec. 1152.25(e)(6) (1982), and discretionary appeals, id. at Sec. 1115.3(a), Sec. 1152.25(e)(2)(ii). Petitions to reopen, because they may be filed at any time after a final order, have not been permitted to toll the 60-day period for filing a petition for judicial review. Provisioners Frozen Express, Inc. v. I.C.C., 536 F.2d 1303 (9th Cir.1976). To allow a petition filed years after an initial decision to toll the 60-day period would allow parties to endlessly preserve judicial review. Discretionary appeals, because they must be filed within 20 days of a final order, may operate to toll the 60-day period. B.J. McAdams v. I.C.C., 551 F.2d 1112 (8th Cir.1977). In B.J. McAdams, a carrier filed a discretionary appeal from the ICC's denial of operating authority on the grounds that the issues were of general transportation importance (GTI). The GTI appeal was held to toll the 60-day period. Crucial to our holding was that a GTI appeal must be filed within 15 days of service of a final order, thus avoiding the "specter of potential delay." Id., 551 F.2d at 1115 n. 2.

The shippers filed their appeal from the ICC's May 21 decision as a discretionary appeal. They complied with the time limit imposed on filing discretionary appeals by receiving a 10-day extension and filing within 30 days of the May 21 order. The ICC, however, sua sponte classified the appeal as a petition to reopen. ⁶ Chicago and Northwestern Abandonment, No. AB-1 (Sub. No. 119) 1, n. 2 (August 20, 1982). Under the unique circumstance of the shippers' timely filing, allowing the petition to reopen to toll the 60-day period will not intolerably prolong the availability of judicial review. Cf. B.J. McAdams, supra. Consequently, we conclude that the shippers' petition to reopen tolled the 60-day period until August 26. The petition for judicial review, filed 57 days later, was timely.

III.

The nature of the shippers' claims requires that we review the ICC's decision under two separate standards.

First, we must determine if the ICC's action was "in excess of statutory jurisdiction, authority, or limitations, or short of statutory right." Administrative Procedure Act Sec....