Arkansas Power & Light Co. v. I.C.C.
| Decision Date | 10 January 1984 |
| Docket Number | Nos. 82-2219,82-2307,s. 82-2219 |
| Citation | 725 F.2d 716,233 U.S.App.D.C. 189 |
| Parties | ARKANSAS POWER & LIGHT COMPANY, System Fuels, Inc., Central Illinois Light Company, Central Louisiana Electric Company, Nerco, Inc., Potomac Electric Power Company, Public Service Company of Indiana, Inc., South Carolina Public Service Authority, Petitioners, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents. Carolina Power & Light Company, et al., Tampa Electric Company, Atchison, Topeka and Santa Fe Railway Company, et al., Western Coal Traffic League, Nevada Power Company, Intervenors. CAROLINA POWER & LIGHT COMPANY, Duke Power Company, South Carolina Electric & Gas Company, Virginia Electric and Power Company, Tampa Electric Company, Petitioners, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents, Western Coal Traffic League, Atchison, Topeka and Santa Fe Railway Company, et al., Nevada Power Company, Intervenors. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
J. Raymond Clark, Washington, D.C., with whom Mary Todd Foldes, Washington, D.C., was on the brief, for petitioners in 82-2219.
John F. Donelan, Frederic L. Wood and John F. Donelan, Jr., Washington, D.C., were on the brief for Carolina Power & Light Co., et al., petitioners in 82-2307 and intervenors in 82-2219.
Evelyn G. Kitay, Atty., I.C.C., Washington D.C., with whom John Broadley, Gen. Counsel, I.C.C., Ellen D. Hanson, Associate Gen. Counsel, I.C.C., John J. Powers and John P. Fonte, Attys., Dept. of Justice, Washington, D.C., were on the brief, for respondents in 82-2219 and 82-2307.
R. Eden Martin, Washington, D.C., with whom Joseph B. Tompkins, Jr., David M. Levy, Washington, D.C., Howard J. Trienens, New York City, Richard B. Allen, Chicago, Ill., Robert B. Batchelder, Omaha, Neb., Emried D. Cole, Jr., Louisville, Ky., John A. Daily, Philadelphia, Pa., and James L. Howe, III, Richmond, Va., were on the brief, for intervenors, Atchison, Topeka and Santa Fe R.C., et al., in 82-2219 and 82-2307. Paul A. Cunningham and Arthur W. Adelberg, Washington, D.C., also entered appearances for intervenors, Atchison, Topeka and Santa Fe R.C., et al.
James W. Lawson, Washington, D.C., was on the brief for intervenor, Nevada Power Co., in 82-2219 and 82-2307. Gloria M. Sodaro, Washington, D.C., also entered an appearance for intervenor, Nevada Power Co.
William L. Slover, C. Michael Loftus, Donald G. Avery and John H. LeSeur, Washington, D.C., were on the brief for intervenor, Western Coal Traffic League, in 82-2219 and 82-2307.
Before EDWARDS and GINSBURG, Circuit Judges, and MacKINNON, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge EDWARDS.
In this action we are asked to review an agency's decision not to institute rulemaking, and to consider the reviewability--if any--of a policy statement announced, but not applied, in the adjudicatory proceeding currently before us.
Petitioners, a group largely made of coal-burning electric utilities ("the utilities"), challenge a decision and order of the Interstate Commerce Commission ("ICC") concerning rates that railroads may charge to captive shippers, such as the petitioners. The challenged order rejected the utilities' petition to institute a rulemaking proceeding and purported to set out ICC policy on implementation of the Long-Cannon Amendment to the Staggers Rail Act of 1980, Pub.L. No. 96-448, 94 Stat. 1895. The Long-Cannon Amendment specifies factors that the ICC should consider (a) in determining whether to investigate certain proposed rate increases, and (b) in evaluating For reasons set out below, we affirm the order of the ICC solely as it relates to the decision not to institute rulemaking. We decline to review the remaining portion of the decision, including its Policy Statement, because it addresses issues not actually before the ICC and is not ripe for judicial review at this time.
the reasonableness of certain rail rates. 49 U.S.C. Sec. 10707a(e)(2)(B), (C) (Supp. V 1981).
In December 1981, Arkansas Power & Light Co. ("AP & L"), along with several other utilities, petitioned the ICC to institute a rulemaking proceeding. Specifically, they sought a determination of the kind of evidence that would be relevant to a Long-Cannon inquiry, the required production of such evidence from railroads nationwide, and the development of standards to be applied in carrying out the statutory requirements. 1 They argued that such a carrier-specific data base was a necessary prerequisite to compliance with the policy of the Staggers Act. 2 Petitioners also asserted that the ICC should halt the railroads' traditional differential pricing practices until the rulemaking was completed. 3
Nine months later, after AP & L had instituted a court action to compel rulemaking, as authorized by 49 U.S.C. Sec. 10326 (Supp. V 1981), 4 the ICC issued a decision refusing to institute the requested rulemaking proceeding. Arkansas Power & Light Co., et al.--Petition to Institute Rulemaking Proceeding--Implementation of Long-Cannon Amendment to the Staggers Rail Act, 365 I.C.C. 983 (1982). Instead, the ICC announced that the Long-Cannon factors set out at 49 U.S.C. Sec. 10707a(e)(2)(B) and (C) would be considered through case-by-case adjudication. The ICC then proceeded to outline the burden of proof it intended to impose on carriers and shippers in proceedings implicating those factors. Petitioners appeal the ICC decision not to institute rulemaking. 5
We begin our inquiry with a sketch of the statutory scheme. The Railroad Revitalization A rate subject to ICC jurisdiction may be challenged in either of two ways. Before the new rate goes into effect, the Commission may begin a proceeding, on its own initiative or on complaint of an interested party, to investigate the rate. 49 U.S.C. Sec. 10707(a) (Supp. V 1981). After a rate goes into effect, the ICC may begin an investigation, on its own initiative or on complaint, into the reasonableness of the existing rate. 49 U.S.C. Sec. 11701 (Supp. V 1981). An ICC decision to approve or disapprove rates, following an investigation, is a judicially reviewable final decision. See Southern Railway Co. v. Seaboard Allied Milling Corp., 442 U.S. 444, 452, 99 S.Ct. 2388, 2393, 60 L.Ed.2d 1017 (1979). In contrast, the decision whether to investigate a proposed rate is generally, albeit not always, considered to be an unreviewable exercise of Commission discretion. Southern Railway Co., 442 U.S. at 454-55, 99 S.Ct. at 2394-95.
and Regulatory Reform Act of 1976 ("4-R Act") 6 and the Staggers Rail Act of 1980 7 largely removed the nation's railroads from federal regulatory control in markets where free competition could ensure reasonable railroad rates and practices. The 4-R Act eliminated the jurisdiction of the ICC to find that a rate is unreasonably high unless the "proponent carrier" has "market dominance" over the relevant service. Pub.L. No. 94-210, Sec. 202(b), 90 Stat. 31, 35 (codified as amended at 49 U.S.C. Sec. 10709(c) (Supp. V 1981)). "Market dominance" was defined as "an absence of effective competition from other carriers or modes of transportation, for the traffic or movement to which a rate applies." Id. (codified as amended at 49 U.S.C. Sec. 10709(a) (Supp. V 1981)). "The effect of this provision [limiting jurisdiction] was to end for most rail service decades of ICC control over maximum rates and to permit carriers not having market dominance to set rates in response to their perception of market conditions." Bessemer & Lake Erie Railroad v. ICC, 691 F.2d 1104, 1108 (3d Cir.1982), cert. denied, --- U.S. ----, 103 S.Ct. 2463, 77 L.Ed.2d 1340 (1983); see also Ford Motor Co. v. ICC, 714 F.2d 1157, 1158-59 (D.C.Cir.1983). Congress then quantified the threshold market dominance test in the Staggers Act, establishing a presumption against market dominance where a rail carrier's revenues from the transportation at issue exceed variable cost by less than a designated percentage. See Pub.L. No. 96-448, Sec. 202, 94 Stat. 1895, 1900 (codified at 49 U.S.C. Sec. 10709(d) (Supp. V 1981)). Revenues equal to or greater than that percentage do not result in a presumption of market dominance but are to be examined individually. Id. Also in the Staggers Act, Congress created zones of rail carrier rate flexibility, in which even market dominant carriers may increase rates without ICC approval if the carriers' revenues are found to be inadequate. Pub.L. No. 96-448, Sec. 203(a), 94 Stat. 1895, 1901-04 (codified at 49 U.S.C. Sec. 10707a (Supp. V 1981))
The 4-R and Staggers Acts established that ICC jurisdiction should typically be preserved in situations of railroad market dominance, where effective competition is unavailable to limit the maximum level of rail rates charged captive shippers. The Long-Cannon Amendment was designed to give added protection to captive shippers. It was the result of Congress' concern about the extent to which rail carriers might use their monopoly traffic to subsidize other traffic that faced effective competition. While there was no need for strict equality in contributions made by different traffic segments, "the amendment sought to assure that rail rate flexibility would not result in [captive] shippers bearing a disproportionate share of responsibility for the needed improvement in the railroads' financial position." 365 I.C.C. at 988. See also 125 CONG.REC. 36,422 (1979) () (remarks of Senator Long introducing original version of Long-Cannon Amendment); 126 CONG.REC. 7264-67 (1980) Toward this end, the Long-Cannon Amendment...
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