Intercity Transp. Co. v. U.S.
| Decision Date | 19 June 1984 |
| Docket Number | No. 81-1637,81-1637 |
| Citation | 737 F.2d 103 |
| Parties | INTERCITY TRANSPORTATION COMPANY, National Classification Committee and National Motor Vehicle Traffic Association, Petitioners, v. UNITED STATES of America and Interstate Commerce Commission, Respondents. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Petition for Review of an Order of the Interstate Commerce commission.
William W. Pugh, New Orleans, La., for petitioners.
Kathleen V. Gunning, Atty. I.C.C., Washington, D.C., with whom John Broadley, Gen. Counsel, Henri F. Rush, Associate Gen. Counsel, I.C.C., and Robert Nicholson, Atty., U.S. Dept. of Justice, Washington, D.C., were on the brief, for respondents. Kenneth P. Kolson, Atty., U.S. Department of Justice, Washington, D.C., also entered an appearance for respondent USA.
Before TAMM, MIKVA, and STARR, Circuit Judges.
Opinion for the court filed by Circuit Judge TAMM.
This case concerns the reviewability and lawfulness of the Interstate Commerce Commission's (Commission) refusal to institute a declaratory order proceeding. Petitioners assert that the Commission's action was an unexplained departure from precedent as well as an arbitrary and capricious exercise of discretion. The Commission contends that its decision was a nonfinal action committed to agency discretion by law and is therefore unreviewable. Although we find that refusals to institute declaratory order proceedings are subject to judicial review, we conclude that in this case the Commission adequately explained its decision and reasonably exercised its discretion.
This appeal arises out of a dispute between a carrier, Intercity Transportation Company (Intercity), and its shipper, Exide Safety Systems (Exide). 1 The dispute concerned the proper classification of battery pack cabinets under the National Motor Freight Classification (NMFC). 2 Intercity contended that one NMFC classification applies to battery pack cabinets, and Exide contended that another classification applies.
After an unsuccessful attempt to resolve this dispute informally, Intercity petitioned the Commission to institute a declaratory order proceeding to determine the proper classification. Petition for Declaratory Order, Joint Appendix (J.A.) at 1a-4a. The Commission declined to institute such a proceeding and suggested that Intercity and Exide pursue other remedies. Intercity Transportation Co., ICC Decision No. 37476 (Sept. 16, 1980) (1980 Decision), J.A. at 5a. The Commission subsequently denied a petition for administrative review, Intercity Transportation Co., ICC Decision No. 37476 (Apr. 8, 1981) (1981 Decision), J.A. at 43a-45a, and a petition to reopen the proceedings regarding Intercity's request for a declaratory determination. Intercity Transportation Co., ICC Decision No. 37476 (Aug. 23, 1983) (1983 Decision), J.A. at 71a-75a. In its 1983 Decision, the Commission again suggested pursuit of other remedies and asserted that it had discretion to reserve declaratory order proceedings for disputes of wider industry significance. 1983 Decision, J.A. at 72a-74a.
Petitioners assert before this court that the Commission failed to explain an abrupt departure from its past policy of routinely issuing declaratory relief. Petitioners also contend that the Commission's decision, even if explained, was arbitrary and capricious. The Commission responds that its denial of Intercity's petition was not a final action and accordingly is unreviewable. Alternatively, the Commission contends that its decision is not reviewable because it is committed by law to agency discretion. Finally, the Commission argues that if refusals to institute declaratory order proceedings are reviewable, its decision in this case was not arbitrary and capricious and accordingly must be affirmed. We conclude that the Commission's decision is a final agency action not committed to agency discretion by law. Although the decision at issue is therefore reviewable, we affirm the Commission's action as a properly explained and lawful exercise of its broad discretion.
Only final Commission actions are reviewable by this court under the Administrative Procedure Act (APA), 5 U.S.C. Sec. 704 (1982), and the Hobbs Act, 28 U.S.C. Sec. 2342(5) (1982). 3 Two criteria generally guide finality determinations. First, the action must represent "a terminal, complete resolution of the case before [the agency]." National Treasury Employees Union v. FLRA, 712 F.2d 669, 671 (D.C.Cir.1983). Second, the action must either determine rights or obligations, or have some legal consequence. American Dairy of Evansville, Inc. v. Bergland, 627 F.2d 1252, 1260 (D.C.Cir.1980). We find that the Commission's decision meets both criteria.
First, the Commission's decision not to initiate a declaratory order proceeding is not subject to alteration. Intercity unsuccessfully petitioned the Commission on three separate occasions for the relief it now seeks in this court. Without question, the Commission's denials are not "tentative, provisional, or contingent, subject to recall, revision, or reconsideration ...." National Treasury Employees Union, 712 F.2d at 671.
Second, the Commission's refusal to issue a declaratory order has legal consequence. Section 554(e) of the APA guarantees petitioners a right to considered review of their request for declaratory relief:
The agency, ... in its sound discretion, may issue a declaratory order to terminate a controversy or remove uncertainty.
5 U.S.C. Sec. 554(e) (1982) (emphasis added). The phrase, "sound discretion," limits the manner in which an agency may determine whether to initiate declaratory order proceedings. 4 Although agencies have significant discretion in such matters, they are not free to abuse that discretion. See Yale Broadcasting Co. v. FCC, 478 F.2d 594, 602 (D.C.Cir.), cert. denied, 414 U.S. 914, 94 S.Ct. 211, 38 L.Ed.2d 152 (1973). 5 Because the Commission's refusal to institute a declaratory order proceeding had the potential of infringing upon petitioners' statutory right to a reasoned agency disposition of its request, it has sufficient legal consequence to meet the second criterion of the finality doctrine. 6
In sum, since petitioners have presented a cognizable legal claim arising out of an unalterable Commission decision, we find that decision "final" for the purpose of judicial review.
Final agency action may nonetheless be exempt from judicial review where the action "is committed to agency discretion by law." 5 U.S.C. Sec. 701(a)(2) (1982). The Commission asserts that decisions concerning the initiation of declaratory order proceedings are entirely discretionary and therefore unreviewable. We begin consideration of the Commission's argument by noting there is a strong presumption in favor of judicial review of final agency action. WWHT, Inc. v. FCC, 656 F.2d 807, 815 (D.C.Cir.1981); National Ass'n of Postal Supervisors v. United States Postal Service, 602 F.2d 420, 430 (D.C.Cir.1979). See also Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 410, 91 S.Ct. 814, 820, 28 L.Ed.2d 136 (1971). In Natural Resources Defense Council, Inc. v. SEC, 606 F.2d 1031 (D.C.Cir.1979), this court outlined three criteria for identifying those cases in which this presumption of reviewability is overcome. Actions are committed to agency discretion where there is little need to safeguard petitioner's interests, review would impair the effectiveness of agency administration, and the disputed issue is not appropriately drawn for judicial review. Id. at 1044. The case at hand fulfills none of these criteria and is accordingly reviewable.
First, petitioners have asserted a violation of a statutorily defined legal right and have identified a concrete injury resulting from that violation. Petitioners contend that the Commission's arbitrary refusal to issue declaratory relief may require Intercity and Exide to pursue remedies perhaps less economical and expert than declaratory relief. See infra note 9. Moreover, petitioners note that uncertainty regarding the appropriate commodity classification may increase the risk of litigation. 7 Petitioners thus allege both a violation of a specific legal right and a resultant injury, neither of which can be remedied without judicial review.
Second, review in this case will not hinder the effectiveness of agency administration. The scope of our review is necessarily narrow. We may examine the Commission's exercise of discretion, not to evaluate the wisdom of its policy judgment, but only to guard against arbitrary and capricious decisionmaking. See WWHT, Inc. v. FCC, 656 F.2d 807, 817 (D.C.Cir.1981). Such limited review of Commission refusals to institute declaratory order proceedings will not unduly hinder the Commission's regulation of interstate commerce. See Natural Resources Defense Council, Inc., 606 F.2d at 1044.
Third, the issue before us is entirely appropriate for judicial review. Section 706(2)(A) of the APA expressly authorizes this court to ensure that the exercise of agency discretion is not without a rational basis. 5 U.S.C. Sec. 706(2)(A) (1982); WWHT, Inc. v. FCC, 656 F.2d at 815-16. Moreover, the APA provides this court with the means to determine whether the Commission's discretionary decision is arbitrary and capricious. Section 555(e) commands the Commission to provide a brief statement of the grounds for denial of any written petition made in connection with any agency proceeding. 5 U.S.C. Sec. 555(e) (1982). Such statements in other contexts routinely provide the basis for judicial review of agency action. Estate of French v. FERC, 603 F.2d 1158, 1162 (5th Cir.1979). See also Roelofs v. Secretary of the Air Force, 628 F.2d 594, 599-601 (D.C.Cir.1980).
Because review in this case is necessary to protect petitione...
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