851 F.2d 1056 (8th Cir. 1988), 88-1250, Winter v. I.C.C.
| Citation | 851 F.2d 1056 |
| Party Name | M.M. WINTER, Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents. |
| Case Date | July 12, 1988 |
| Court | United States Courts of Appeals, U.S. Court of Appeals — Eighth Circuit |
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Submitted May 11, 1988.
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Gordon P. MacDougall, Washington, D.C., for petitioner.
Richard Edelman, Washington, D.C., for intervenor.
Charles Alan Stark, Washington, D.C., for respondents.
Betty Jo Christian, Washington, D.C., for intervenor.
Before FAGG, WOLLMAN, and BEAM, Circuit Judges.
WOLLMAN, Circuit Judge.
M.M. Winter, General Chairman of the United Transportation Union (UTU), filed this petition for judicial review of an Interstate Commerce Commission (Commission) decision denying his petition 1 to reject Winona Bridge Railway Company's (Winona Bridge) exemption from the regulatory requirements of the Interstate Commerce Act, 49 U.S.C. Sec. 11343(a)(6), 2 with respect to Winona Bridge's acquisition of trackage rights over Burlington Northern Railroad Company's (BN) line. 3 See Winona Bridge Railway Company--Trackage Rights--Burlington Northern Railroad Company, (the January 7 Decision ), Finance Docket No. 31163 (Jan. 7, 1988), petitions to reopen filed, January 19 and 27, 1988. After the Commission moved to dismiss Winter's petition for lack of a reviewable order, we granted Winter's request for a temporary stay of the January 7 Decision and ordered expedited briefing on all issues concerning the stay, the pending motion to dismiss, and the underlying merits of the action. Because we conclude that the January 7 Decision is not a final order, we dismiss the appeal and vacate the stay. We also decline to invoke our authority under the All Writs Act, 28 U.S.C. Sec. 1651 to issue a writ compelling the Commission to reject the exemption.
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I. BACKGROUND
Winona Bridge, a wholly-owned subsidiary of BN, owns a railroad bridge across the Mississippi River between Winona, Minnesota, and E. Winona, Wisconsin. The 1.07 mile-long bridge has been out of service since September 1985. On November 16, 1987, Winona Bridge and BN entered into an agreement in which BN granted Winona Bridge trackage rights 4 over BN's Northern line between Winona Junction, Wisconsin, and Seattle, Washington, a distance of approximately 1,860 miles. BN entered into this agreement in an effort to compete with trucking companies that provide low-cost services for long-distance transportation. Originally, BN had planned to implement "Expeditor service" employing one engineer and one conductor on its Northern line from St. Paul, Minnesota, to Seattle, Washington. Because BN's negotiations with the UTU for reduced crew size were unsuccessful, BN decided to use its subsidiary, Winona Bridge, to operate over the Northern line with two-man crews. In the planned transaction, Winona Bridge would hire new employees not subject to BN's labor agreements. BN informed its employees that if the unions would agree to reduced crew size, Winona Bridge would not begin operations. BN granted Winona Bridge the right to pick up and set out traffic at BN's intermodal hub centers in St. Paul, Spokane, and Seattle, which will enable BN to compete with motor carriers for trailer-on-flat-car and container-on-flat-car traffic.
Under the Interstate Commerce Act, the Commission must regulate all trackage rights agreements. See 49 U.S.C. Sec. 11343(a)(6). More recently, however, in light of the severe financial crisis facing the nation's rail industry, Congress realized that extensive regulation was prohibiting railroads from becoming economically viable. In 1980, Congress enacted the Staggers Act, which directs the Commission to exempt from regulation all transactions that it finds do not require regulation to carry out the national transportation policy and are either of limited scope or involve situations in which regulation is not needed to protect shippers from the abuse of market power. See 49 U.S.C. Sec. 10505(a); 5 see also Winter v. ICC, 828 F.2d 1320, 1321 (8th Cir.1987). Through the Staggers Act, Congress intended to liberalize the regulatory framework that the Interstate Commerce Act imposed on the railroad industry. Congress hoped that an improved regulatory climate would "increase the rail industry's productivity and enhance financial returns sufficiently to encourage an infusion of private capital into the industry" to prevent the collapse of the nation's rail industry. Simmons v. ICC, 697 F.2d 326, 328 (D.C.Cir.1982). The Commission was charged with responsibility for actively pursuing exemptions for transportation and services that would allow competition and would minimize the need for regulatory
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control over the rail industry. American Trucking Ass'ns, Inc. v. ICC, 656 F.2d 1115, 1119 (5th Cir.1981); see also H.R.Rep. No. 1035, 96 Cong., 2d Sess. 60, reprinted in 1980 U.S.Code Cong. & Admin.News 3978, 4005.
Following this congressional mandate, the Commission determined that certain trackage rights agreements between rail carriers, as a class, should be exempt from regulation. Railroad Consolidation Procedures--Trackage Rights Exemption, Ex Parte No. 282 (Sub-No. 9), 1 I.C.C.2d 270 (1985), aff'd sub nom. Illinois Commerce Commission v. ICC, 819 F.2d 311 (D.C.Cir.1987). The Commission concluded:
[T]rackage rights based on written agreements and not filed as responsive applications to rail consolidation proceedings should be exempted from regulation. Transactions that permit only bridge rights will maintain the competitive balance among carriers, preserve shippers' existing transportation choices, give shippers access to alternative routes with shorter, faster, or otherwise improved routing and increase the operational efficiency of the participating carriers. Improving operating efficiencies will help ensure the continued development of sound rail transportation systems, foster sound economic conditions, encourage efficient management, and promote energy conservation.
Id. at 275-76; see also 49 C.F.R. Sec. 1180.2(d)(7) (1987).
The trackage rights class exemption allows a transaction between two rail carriers to be consummated seven days after the railroad files a notice with the Commission. 49 C.F.R. Sec. 1180.4(g)(1). If the notice contains false or misleading information, the Commission may summarily revoke it. Id. at Sec. 1180.4(g)(1)(ii). The Commission must publish a summary of the transaction in the Federal Register within twenty days of filing. Id. at Sec. 1180.4(g)(2)(ii). The procedural mechanism for other interested parties to challenge exempt trackage rights agreements is a petition to revoke under 49 U.S.C. Sec. 10505(d). Id. The filing of such a petition does not stay the effectiveness of an exemption. Rather, the Commission will review carrier actions after the fact to correct abuses of market power. American Trucking Ass'ns, Inc. v. ICC, 656 F.2d at 1120 (quoting H.R.Rep. No. 1430, 96 Cong., 2d Sess. 105, reprinted in 1980 U.S.Code Cong. & Admin.News 4110, 4137).
All trackage rights exemptions are subject to the standard employee protective conditions. These so-called Mendocino Coast labor protective conditions protect employees adversely affected by a grant of trackage rights for up to six years. See Mendocino Coast Ry.--Lease and Operate--California W. R.R., 360 I.C.C. 653 (1980), aff'd sub nom., RLEA v. United States, 675 F.2d 1248 (D.C.Cir.1982).
Winona Bridge filed its notice of exemption with the Commission on November 18, 1987. On November 25, 1987, the RLEA filed a petition to void, revoke or stay the exemption on the ground that the application of the Interstate Commerce Act was necessary to carry out the national transportation policy and that the notice contained misleading information. Specifically, the RLEA argued that fair wages and safe and suitable working conditions are a national transportation goal, see 49 U.S.C. Sec. 10101a(12), and that the purpose of Winona Bridge's trackage rights agreement was to circumvent labor agreements. The RLEA argued that the exemption was void on its face because it contained misleading information in that the purpose of the agreement was to evade the provisions of the Railway Labor Act and to pay lower wages and provide less beneficial working conditions to employees.
The Commission published notice of the exemption on November 25, 1987, continuing the transaction in force subject to the Mendocino labor conditions. On December 2, 1987, Winter filed a petition to reject and/or revoke the exemption. Winter argued that Winona Bridge was not a carrier and thus could not invoke the trackage rights class exemption from 49 U.S.C. Sec. 11343(a)(6), which regulates transactions between two carriers. Although acknowledging that previous Commission cases referred
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to Winona Bridge as a carrier, Winter argued that a "rail carrier" for purposes of the exemption is "a person providing railroad transportation for compensation," 49 U.S.C. Sec. 10102(20), and that Winona Bridge was currently an out-of-service railroad bridge.
On January 7, 1988, the Commission issued its 3-2 decision denying the petitions to reject Winona Bridge's notice of exemption. The Commission deferred ruling on the petitions to revoke. Reasoning that the class exemption regulations do not require an explanation of the railroad carrier's underlying motivations for entering into a trackage rights agreement, the Commission disagreed with the RLEA's contention that the notice was misleading. It also disagreed with Winter's contention that Winona Bridge was not a carrier within the meaning of section 11343(a)(6), noting that the RLEA had characterized Winona Bridge as a switching carrier and that previous Commission decisions had considered Winona Bridge a carrier. The Commission stated that merely because Winona Bridge does not perform, and may never have performed, its own transportation services is not...
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