747 F.2d 721 (D.C. Cir. 1984), 83-1276, Utah Power & Light Co. v. I.C.C.

Docket Nº:83-1276.
Citation:747 F.2d 721
Party Name:UTAH POWER & LIGHT COMPANY, Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents, Denver and Rio Grande Western Railroad Company, et al., Utah Division of Public Utilities, Intervenors.
Case Date:December 18, 1984
Court:United States Courts of Appeals, Court of Appeals for the District of Columbia Circuit
 
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747 F.2d 721 (D.C. Cir. 1984)

UTAH POWER & LIGHT COMPANY, Petitioner,

v.

INTERSTATE COMMERCE COMMISSION and United States of America,

Respondents,

Denver and Rio Grande Western Railroad Company, et al., Utah

Division of Public Utilities, Intervenors.

No. 83-1276.

United States Court of Appeals, District of Columbia Circuit

December 18, 1984

Argued Nov. 15, 1983.

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Petition for Review of an Order of the Interstate Commerce commission.

Michael F. McBride, Washington, D.C., with whom Mindy A. Buren, Washington, D.C., was on the brief, for petitioner.

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H. Glenn Scammel, Atty., I.C.C., Washington, D.C., with whom John Broadley, Gen. Counsel, and Ellen D. Hanson, Associate Gen. Counsel, John J. Powers, III, and John P. Fonte, Attys., U.S. Dept. of Justice, Washington, D.C., were on the brief, for respondents. Lawrence H. Richmond, Atty., I.C.C., Washington, D.C., also entered an appearance for respondent I.C.C.

Richard J. Metzger, Chicago, Ill., with whom Kendell T. Sanford, Denver, Colo., R. Eden Martin and Lawrence A. Miller, Washington, D.C., were on the brief, for intervenors Denver & Rio Grande Western R. Co., et al. David M. Levy, Washington, D.C., also entered an appearance for Denver & Rio Grande Western R. Co., et al.

Before WILKEY and GINSBURG, Circuit Judges, and MacKINNON, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge MacKINNON.

Concurring Opinion filed by Circuit Judge GINSBURG.

MacKINNON, Senior Circuit Judge:

The Utah Power and Light Company ("Utah Power" or the "Utility") petitions for review of a decision of the Interstate Commerce Commission ("ICC"). That decision reversed an earlier decision of the Utah Public Service Commission ("Utah Commission") ordering the Denver and Rio Grande Western Railway Company (the "Rio Grande") and the Salt Lake, Garfield and Western Railway Company (the "Salt Lake") to reduce the tariff on certain intrastate coal movements and to pay reparations for the period from March 28, 1981, onwards. Without applying to the Utah Commission for rehearing, the railroads petitioned the ICC for review of the order "on the grounds that the standards and procedures applied by the State Commission were not in accordance with the provisions of ..." the federal statute. Staggers Rail Act of 1980 Sec. 214(c), 94 Stat. 1895, 1914-15 (1980) (codified at 49 U.S.C. Sec. 11501(c) (Supp. V 1981)). The Rio Grande and Salt Lake have intervened in support of the ICC, the Utah Commission in support of Utah Power. We hold that the ICC had jurisdiction to review the Utah decision, and uphold the ICC's reversal of the Utah Commission, but we remand to the ICC to supplement the record on certain cost figures relevant to determining the appropriate rate.

I. BACKGROUND

The rate at issue in this dispute is that to be charged for the volume movement of bituminous coal by unit train from Valley Camp Mine at Clear Creek, Utah, to Utah Power's Gadsby Plant at Salt Lake City, Utah. The Rio Grande handles the coal for all of the 118 mile, round trip journey, except for the last half-mile which traverses the tracks of the Salt Lake. 1 The Union Pacific Railroad (UP) provides switching services necessary to connect the other two railroads. The entire movement is intrastate.

On March 27, 1981, relying on section 229 of the Staggers Rail Act of 1980, 2 Utah

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Power filed separate complaints with the Utah Commission and the ICC. Utah Power alleged that the railroads carrying this coal traffic had market dominance over the transportation of coal from Valcam, Utah to Gadsby, Utah, 3 and that the existing applicable rate of $5.97 per ton (Rio Grande Tariff No. 4166) was unreasonably high. Ruling that the Utah Commission had initial jurisdiction over the intrastate rate, the ICC dismissed the complaint filed with it.

Utah Power pursued its complaint before the Utah Commission, which conducted a full inquiry regarding the rate. The Utah Commission had previously represented to the ICC that it would follow federal standards and procedures in accordance with the Staggers Act, and on this representation the Utah standards and procedures had been provisionally certified by the ICC as acceptable state procedures. 4 On December 21, 1982, the Utah Commission issued its Report and Order ruling that the railroads had market dominance over the transportation to which the rates at issue applied, that the Rio Grande was revenue adequate, and that subject rates were unreasonably high. In the Matter of UTAH POWER & LIGHT CO. versus The Denver & Rio Grande Western Railroad Co., Union Pacific Railroad Co., and Salt Lake, Garfield and Western Railway Co., No. 83-035-06, Report and Order (Public Service Commission of Utah, Dec. 21, 1982) (hereinafter "Utah Commission Report and Order") (Joint Appendix ("JA") 86). The Utah Commission ordered the railroads to reduce the rates and to pay reparations to Utah Power. The decision was to take effect thirty days from the date of service of the decision unless a prior stay was granted. At no time did any party file an application for rehearing with the Utah Commission.

On January 14, 1983, the railroads requested the Utah Commission to stay the Order until March 2, 1983. Utah Power opposed the request on the ground that no party had applied for rehearing of the Commission's decision. On January 19, 1983, the Utah Commission granted the railroad's requested extension without comment on the rehearing issue.

On January 19, 1983, the Rio Grande and the Salt Lake petitioned the ICC for review of the Utah Commission's decision pursuant to Sec. 214(c) of the Staggers Act, which provides:

Any rail carrier providing transportation subject to the jurisdiction of the Commission under subchapter I 5 of chapter 105 of this title may petition the Commission to review the decision of any State authority, in any administrative proceeding in which the lawfulness of an intrastate rate, classification, rule, or practice is determined, on the grounds that the standards and procedures applied by the State were not in accordance with the provisions of this subtitle. The Commission

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shall take final action on any such petition within 30 days after the date it is received. If the Commission determines that the standards and procedures were not in accordance with the provisions of this subtitle, its order shall determine and authorize the carrier to establish the appropriate rate, classification, rule, or practice.

Staggers Rail Act of 1980 Sec. 214(c), 94 Stat. 1895, 1914-15 (1980) (codified at 49 U.S.C. Sec. 11501(c) (Supp. V 1981) (hereinafter section 11501(c)). The Utah Commission moved the ICC to dismiss the petition, arguing that because the Rio Grande and Salt Lake had failed to exhaust their state administrative remedies by petitioning for rehearing before the Utah Commission, the ICC was without jurisdiction to review the decision of the Utah Commission.

After the initial filing of the railroad's petition, the ICC requested the Rio Grande and Salt Lake to provide a missing page of an appendix to its petition. After the page was filed, the ICC notified counsel for the railroads that its filing was deemed complete as of January 28, 1983 and that the ICC, being required to take final action within 30 days, would act on the petition by February 25, 1983.

In a decision dated February 25, 1983, but not served until March 2, 1983, the ICC affirmed the Utah Commission's holding of market dominance, reversed its decision on the revenue adequacy of the Rio Grande, and the unreasonableness of the rate, and held that the rates in issue were reasonable. Petition of the Denver & Rio Grande Western Railroad Co. and Salt Lake, Garfield and Western Railway Co. for Review of a Decision of the Public Service Commission of Utah Pursuant to 49 U.S.C. 11501, No. 39060 (I.C.C. Feb. 25, 1983) (hereinafter "ICC Decision") (J.A. 584). On March 8, 1983, the ICC served the cost appendix to its March 2, 1983 decision (JA 596). In that appendix, the ICC explained its earlier decision to reverse some of the cost findings of the Utah Commission on disputed issues, and to affirm others.

Utah Power then petitioned this court for review of the ICC's decision on a number of grounds. Petitioner now argues, inter alia, that the ICC exercised jurisdiction unlawfully because the railroads had failed to exhaust their state administrative remedies; that the ICC violated its statutory mandate and lost jurisdiction when it allegedly failed to serve its decision within 30 days; that the ICC exceeded its appellate jurisdiction by unlawfully conducting a de novo review of the record compiled before the Utah Commission; and that the ICC's cost calculations were not supported by substantial evidence and constitute an abuse of discretion. We agree only that some of the cost calculations are questionable, and thus remand the case to the ICC for a fairly limited re-examination of its determination as to the reasonableness of the railroads' existing rate. Otherwise we affirm the decision of the ICC. In particular, we hold that the Utah Commission's decision was properly overturned for its failure to follow federal standards on revenue adequacy.

II. THRESHOLD JURISDICTIONAL ISSUES

  1. The Exhaustion of Administrative Remedies

    One "long-settled rule of judicial administration [is] that no one is entitled to judicial relief for a supposed or threatened injury until the prescribed administrative remedy has been exhausted." Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, 50-51, 58 S.Ct. 459, 463, 82 L.Ed. 638 (1938) (citing cases) (emphasis added); see Porter v. Investors Syndicate, 286 U.S. 461, 471, 52 S.Ct. 617, 620, 76 L.Ed. 1226 (1932). Utah Power here...

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