Consolidated Rail Corp. v. U.S., 89-1074

• Decision Date: 16 February 1990
• Docket Number: No. 89-1074,89-1074
• Citation: 896 F.2d 574
• Parties: , 58 USLW 2501, 20 Envtl. L. Rep. 20,665 CONSOLIDATED RAIL CORPORATION, et al., Petitioners, v. UNITED STATES of America and Interstate Commerce Commission, Respondents, American Paper Institute, Inc., Intervenor.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 574

896 F.2d 574

283 U.S.App.D.C. 47, 58 USLW 2501, 20

Envtl. L. Rep. 20,665

CONSOLIDATED RAIL CORPORATION, et al., Petitioners, v. UNITED STATES of America and Interstate Commerce Commission Respondents American Paper Institute, Inc., Intervenor.

No. 89-1074.

United States Court of Appeals District of Columbia Circuit.

Argued Dec. 11, 1989.

Decided Feb. 16, 1990.

John A. Daily, with whom Anne E. Treadway, Philadelphia, Pa., Joseph D. Anthofer, Guy Vitello, Robert T. Opal, Chicago, Ill., Michael E. Roper, William R. Power, Chicago, Ill., and John MacDonald Smith, were on the brief for petitioners.

Judith A. Albert, Atty., ICC, with whom James F. Rill, Asst. Atty. Gen., Dept. of Justice, Robert S. Burk, Gen. Counsel, and Craig M. Keats, Deputy Associate Gen. Counsel, ICC, Washington, D.C., were on the brief for respondents.

John K. Maser, III, was on the brief for intervenor. Kathleen J. Masterton, Washington, D.C., also entered an appearance for American Paper Institute, Inc.

Before WALD, Chief Judge, and EDWARDS and D.H. GINSBURG, Circuit Judges.

Opinion for the Court filed by Circuit Judge D.H. GINSBURG.

D.H. GINSBURG, Circuit Judge:

Various railroads petition for review of a decision in which the Interstate Commerce Commission determined that 49 U.S.C. Sec. 10741(f), which precludes a claim of discrimination involving "rail rates applicable to different routes," does not apply to recyclable commodities. We now reverse that decision because it is contrary to the plain and unambiguous language of the law.

I. BACKGROUND

Section 204 of the Railroad Revitalization and Regulatory Reform ("4-R") Act of 1976, Pub.L. 94-210, 90 Stat. 31, 40, required the Commission to "investigate the rate structure for the transportation of recyclable or recycled materials and competing virgin material by rail carriers" in order to determine whether it is "unjustly discriminatory or unreasonable." As part of a recodification in 1978, Congress substituted for the phrase "unjustly discriminatory or unreasonable" references to 49 U.S.C. Secs. 10701 and 10741, which prohibited unreasonable and discriminatory rates, respectively. See 49 U.S.C. Sec. 10731.

Shortly after passage of the 4-R Act, the Commission instituted an investigation into the rate structure for recyclable and virgin materials, from which it concluded that there was no discrimination against recyclables in the rate structure and that relatively few rates for recyclables were unreasonably high. Investigation of Frt. Rates Recyclable Commodities, 356 I.C.C. 113 (1977). On review, however, we found that the Commission had failed "meaningfully [to] address the focal question presented by its investigation, namely whether the substantial rate disparities between recyclable and virgin products are justified," and accordingly we remanded the matter for further proceedings. National Association of Recycling Industries, Inc. v. ICC, 585 F.2d 522, 534 (1978) ("NARI I" ).

On remand, the Commission found that the rate structure did discriminate against recyclables after all; it therefore ordered railroads to "equalize" the ratio of revenues to costs in the transportation of recyclables and in the transportation of virgin products. The Commission also prescribed for recyclables a maximum revenue to variable cost ratio of 180 percent. Investigation of Frt. Rates Recyclable Commodities, 361 I.C.C. 238 (1979). On petitions for review, we upheld both the Commission's comparison of revenue-to-cost ratios as a means of determining whether rates are discriminatory, and its finding that there was such discrimination. We again remanded the matter to the Commission, however, because it had failed adequately to justify its selection of the 180 percent ratio and because of our concern that equalization had resulted, in some cases, in an unlawful increase in the rate for transporting recyclables. National Association of Recycling Industries, Inc. v. ICC, 627 F.2d 1328, 1334-37 (1980) ("NARI II" ), rev'd in part sub nom. Consolidated Rail Corp. v. National Association of Recycling Industries, Inc., 449 U.S. 609, 101 S.Ct. 775, 66 L.Ed.2d 776 (1981).

Meanwhile, in 1980, with NARI II pending in the Supreme Court, Congress enacted the Staggers Act, Sec. 2 of which provided that the maximum lawful rates for the rail transportation of non-ferrous recyclables are those at which the ratio of revenue to variable cost allows the carrier to recover its total operating costs "plus a reasonable and economic profit or return" on its invested capital. 49 U.S.C. Sec. 10731(e). Congress did not enact any special provision for recyclable ferrous materials.

More important for purposes of this petition, the Staggers Act placed certain limitations upon the scope of actionable discrimination by a railroad. Initially, the Act carried forward the historical prohibition on rates that "unreasonably discriminate[ ]" between shippers by charging a different rate "for performing a like and contemporaneous service in the transportation of a like kind of traffic under substantially similar circumstances." Id. Sec. 10741(a). Section 212 of the Staggers Act limited this provision, however, by providing inter alia that it "shall not apply to ... rail rates applicable to different routes." Id. Sec. 10741(f)(4).

Upon reopening its proceedings after our remand in NARI II, the Commission tentatively concluded that this provision limiting discrimination claims to situations in which transportation is provided over the same route does not apply to claims involving recyclables. Investigation of Frt. Rates-Recyclable Commodities, 364 I.C.C. 874 (1981). It later reaffirmed that conclusion in the decision now under review. Ex Parte No. 319, Investigation of Freight Rates for the Transportation of Recyclable or Recycled Commodities, 5 I.C.C.2d 101, 108-12 (1988). The Commission concluded that, despite the reference to Sec. 10741 in Sec. 10731, "Sec. 10741 does not apply to individual complaints alleging discrimination against recyclables [because it] would thwart Congress' overall purpose to promote recyclables movement and, therefore, use." Id. at 111. It explained that because recyclables and the virgin products with which they compete usually travel over different routes, applying the same rate limitation in Sec. 10741 to recyclables would "reverse[ ] [Congress's] entire prior legislative agenda by inference." Id. The Commission concluded that since Congress intended, when it passed the Staggers Act, to "strengthen the protection afforded recyclables," id. at 112 n. 15 ("at least the nonferrous variety"), its retention in Sec. 10731 of the reference to Sec. 10741, despite the newly-added limitation upon actionable discrimination contained in the latter provision, was "an oversight."

The railroads petitioning this court for review of the Commission's decision contend that the plain language of Secs. 10731 and 10741 bars any discrimination claim that involves, in the terms of the latter section, a comparison of "rail rates applicable to different routes."

II. RIPENESS

Before discussing the merits of petitioners' claim, we must address a preliminary question: the ICC contends that the issue before us is not ripe for review at this time. The ripeness doctrine is intended to

prevent the courts, through avoidance of premature adjudication, from entangling themselves in abstract disagreements over administrative policies, and also to protect the agencies from judicial interference until an administrative decision has been formalized and its effects felt in a concrete way by the challenging parties. The problem is best seen in a twofold aspect, requiring us to evaluate both the fitness of the issues for judicial decision and the hardship to the parties of withholding court consideration.

Abbott Laboratories v. Gardner, 387 U.S. 136, 148-49, 87 S.Ct. 1507, 1515-16, 18 L.Ed.2d 681 (1967). The first, or fitness, part of the Abbott Labs test normally requires us to determine whether the issue is "(a) essentially legal, and (b) 'sufficiently final.' " International Union, United Automobile, Aerospace & Agricultural Implement Workers of America v. Brock, 783 F.2d 237, 249 (D.C.Cir.1986) (quoting Atlantic Richfield Co. v. United States Department of Energy, 769 F.2d 771, 783 (D.C.Cir.1984)). If we have doubts about the fitness of the issue for judicial resolution, then we balance the institutional interests in postponing review against the hardship to the parties that will result from delay. Where, however, "there are no significant agency or judicial interests militating in favor of delay, [lack of] 'hardship' cannot tip the balance against judicial review." Askins v. District of Columbia, 877 F.2d 94, 98 (D.C.Cir.1989); see Consolidation Coal Co. v. Federal Mine Safety & Health Review Comm'n, 824 F.2d 1071, 1081-82 (D.C.Cir.1987). But see id. at 1094-96 (D.H. Ginsburg, J., dissenting).

The ICC concedes, as it must, that the issue before us presents "a purely legal question," a question of statutory interpretation. The ICC also concedes that its ruling, coming as it did at the end of a rulemaking proceeding in which it solicited and received public comments, represents the agency's " 'final' position on the issue." Despite a rather lame attempt at a reservation ("final," it says, "at least at this time,") the Commission makes no pretense that the issue is one for which "further administrative action is needed to clarify the agency's position, [such as,] for example, when the challenged prescription is discretionary so that it is unclear if, when or how the agency will employ it." Action Alliance of Senior Citizens v. Heckler, 789 F.2d 931, 940 (D.C.Cir.1986); see also Office of Communication of the United Church of Christ v. FCC, 826 F.2d 101, 105 (D.C.Cir.1987). On the contrary, the Commission has made clear "what [it] would likely be looking for in a discrimination case," 5 I.C.C.2d at 110-11; a complaint of...