Akron, Canton & Youngstown R. Co. v. I. C. C.

• Decision Date: 20 December 1979
• Docket Number: No. 78-3425,78-3425
• Citation: 611 F.2d 1162
• Parties: The AKRON, CANTON & YOUNGSTOWN RAILROAD COMPANY et al., Petitioners, v. The INTERSTATE COMMERCE COMMISSION et al., Respondents, and GPU Service Corporation et al., Intervenors.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 1162

611 F.2d 1162

The AKRON, CANTON & YOUNGSTOWN RAILROAD COMPANY et al., Petitioners, v. The INTERSTATE COMMERCE COMMISSION et al., Respondents and GPU Service Corporation et al., Intervenors.

No. 78-3425.

United States Court of Appeals Sixth Circuit.

Argued Feb. 22, 1979.

Decided Dec. 20, 1979.

Lawrence D. Walker, argued, Taft, Stettinius & Hollister, James E. Burke, Cincinnati, Ohio, Angelica D. Lloyd, Norfolk & Western Railway Company, Roanoke, Va., Charles E. Mechem, Consolidated Rail Corp., Philadelphia, Pa., for petitioners.

Mark L. Evans, Gen. Counsel, Ellen K. Schall, argued, I. C. C., Washington, D. C., for respondent I. C. C.

Robert L. Thompson, Dept. of Justice, Washington, D. C., for respondent United States.

Before CELEBREZZE, Circuit Judge, and PHILLIPS and PECK, Senior Circuit Judges.

PECK, Senior Circuit Judge.

The issue in this case is simply whether the Interstate Commerce Commission ("Commission" or "ICC") has the authority to order railroads to carry spent nuclear fuel and low-level reactor wastes at rates prescribed by the Commission. Petitioners are twenty-two eastern railroad companies ("the railroads") which seek relief from the Commission's order compelling them to cancel their abstention, or "flagout," from publication of tariffs for the carriage of nuclear materials. The Commission's order was the culmination of proceedings begun in 1976 when five separate complaints were filed with the Commission against the railroads. The complainants, the Energy Research and Development Administration and numerous eastern utilities companies, alleged that the railroads' continuing refusal to publish rates for the carriage of nuclear materials was in violation of the railroads' statutory duties under the Interstate Commerce Act. Following administrative hearings and findings of fact, the Commission ordered the railroads to "publish reasonable and otherwise lawful tariff provisions covering the transportation of irradiated fuel elements (spent fuel) and radioactive waste." The railroads, by their petition to this Court seek judicial review of this final order under 28 U.S.C. §§ 2321 and 2342. Respondents to the railroads' petition are the United States and the Commission; all but two of the original complainants have participated in the proceedings before this Court as intervenors.

I. COMMISSION'S STATUTORY POWER

The railroads do not deny that the Commission has subject-matter jurisdiction of cases involving the duty of carriers subject to the Act to provide transportation upon reasonable request therefor. Rather, they rely upon United States v. Pennsylvania R.R., 242 U.S. 208, 37 S.Ct. 95, 61 L.Ed. 251 (1916), in arguing that the Commission lacks any statutory power under former 49 U.S.C. § 1(4) (1976) ¹ to order carriers to provide such transportation. But the Commission has ordered rate publication, not carriage of goods; it has not exercised any power delegated solely by § 1(4) of the Act. The Commission's authority for its order must therefore be sought in the entire legislative ratemaking scheme for rail carriage.

Since, however, the petitioners see the publication of rates and tariffs as equivalent to a general offer to carry the goods included in the published rate classification, they view the Commission's order as, in effect, an order to carry nuclear materials. It is not disputed that the petitioners have in fact carried these materials as carriers for hire; the effect of the Commission's order would be to bring this carriage within the Commission's ratemaking purview. Under this statutory ratemaking scheme, the rates proposed by the railroads themselves would be reviewed by the Commission to see if they were reasonable and lawful. 49 U.S.C.A. §§ 10702, 10707 (1979 Supp.).

In light of the petitioners' argument that the Commission's order was grounded on a statutory provision under which only courts have injunctive powers, and in view of the doubt which has recently arisen regarding the Commission's power to order carriers to provide transportation, ² we feel some clarifying comment is called for. Such comment must begin with the Pennsylvania Railroad case, Supra, in which the Supreme Court held that the Commission could not order a railroad to augment its supply of tank cars in order to meet an increasing demand by shippers for tank-car services. Since there was no question in the case of discrimination by the railroad in the allocation of the tank cars which it did possess, the Court ruled that the Commission was without statutory authority to order the railroad to acquire more equipment in order to furnish greater services.

The Pennsylvania Railroad case is now questionable precedent. The Court's specific ruling was overturned by Congress only one year after judgment was rendered. The Esch Act of May 29, 1917, 49 U.S.C. § 1(10) Et seq. (1976), 40 Stat. 101, empowered the Commission to regulate the supply of rail cars. See H.R.Rep.No.456, 66th Cong., 1st Sess. 17 (1919). Nevertheless, the Commission's own decisions have not limited the Pennsylvania case to its facts, but have interpreted it to mean that the Commerce Act gave the Commission no enforcement power under § 1(4). Cancellation of C.R.I. & P. & Soo Line Rates Livestock 340 I.C.C. 463 (1972); Duralite, Inc. v. Erie Lackawanna Ry., 229 I.C.C. 312 (1971). The effects of such an interpretation of the Pennsylvania case were lessened, however, by the Commission's development of the "simultaneous involvement" doctrine, under which the Commission has ancillary jurisdiction of cases involving failure to provide service whenever other sections of the Act are "simultaneously involved." Soo Line Rates, supra. Recently the Commission has overruled its earlier holdings and ruled that the Pennsylvania case is no longer binding precedent. Winnebago Farmers Elevator Co. v. Chicago & N.W. Transp. Co., --- I.C.C. ---, F.D. No. 28412 (March 29, 1978). We need not go so far.

We stress again that the petitioners challenge the Commission's power to issue an order under former § 1(4) of the Act, not the Commission's subject-matter jurisdiction. Apart from the beleaguered Pennsylvania case, they rely in this challenge on ICC v. United States ex rel. Los Angeles, 280 U.S. 52, 50 S.Ct. 53, 74 L.Ed. 163 (1929), in which the Supreme Court held that the Commission did not have the power, under a section of the Act requiring carriers to provide "reasonable facilities," to order railroads to construct a terminal building. The Court found particular significance in the lack of an express statutory grant of such power.

Neither of the cases relied on by petitioners dealt with the Commission's ratemaking power the power on which its presently challenged order must be based. Review of the Act shows the power of the Commission in ratemaking is extensive; the Act provides that:

(a)(1) When the Interstate Commerce Commission, after a full hearing, decides that a rate charged or collected by a carrier for transportation subject to the jurisdiction of the Commission under subchapter I of chapter 105 of this title, or that a classification, rule, or practice of that carrier, (Sic ) does or will violate this subtitle, the Commission may prescribe the rate (including a maximum or minimum rate, or both), classification, rule, or practice to be followed. The Commission may order the carrier to stop the violation.

49 U.S.C.A. § 10704 (1979 Supp.) (emphasis added).

Exclusion of a commodity from a carrier's published tariffs, as under the petitioners' flagout, is clearly a "classification" of that commodity within the meaning of that term under the Act. See Director General of Railroads v. Viscose, 254 U.S. 498, 41 S.Ct. 151, 65 L.Ed. 372 (1921). We therefore hold that the Commission 's order that the railroads cancel their "flagout" was within the powers granted the Commission under the Act.

The provisions of the Act offer little support for the railroads' contention that, in their capacity as "private," contract haulers of spent fuel and reactor wastes, they are not subject to the ratemaking jurisdiction of the Commission. First, the Commission has general jurisdiction over interstate transportation by railroad. 49 U.S.C.A. § 10501(a)(1)(A) (1979 Supp.). Second, a carrier subject to the Commission's jurisdiction must publish rates for the transportation it provides. Id. § 10702(a)(1). No carrier providing transportation subject to the Commission's jurisdiction may do so unless a rate for the transportation or service is contained in a current tariff. Id. § 10761(a).

The Supreme Court has given full recognition to the primary jurisdiction of the Commission both in ratemaking, Arrow Transp. Co. v. Southern Ry., 372 U.S. 658, 83 S.Ct. 984, 10 L.Ed.2d 52 (1963); Texas & Pacific Ry. v. Abilene Cotton Oil Co., 204 U.S. 426, 27 S.Ct. 350, 51 L.Ed. 553 (1907), and in the classification of goods for tariff purposes. United States v. Western Pacific R. R., 352 U.S. 59, 77 S.Ct. 161, 1 L.Ed.2d 126 (1956). The uniformity of rates and expertise in ratemaking sought by this grant of primary jurisdiction would be thwarted if it were held that only a court could order the publication of rates and tariffs for transportation which a carrier had already been providing.

We can only conclude that the petitioners were, in their carriage of nuclear materials, within the Commission's ratemaking jurisdiction. When a Commission order for publication of rates is directed at carriers already extensively engaged in the carriage to be regulated, such an order is simply not analogous to the orders to provide additional services which were struck down by the Supreme Court in the Pennsylvania case and ICC ex rel. Los Angeles, supra. The present case, unlike those two, may only correctly be seen as a ratemaking case, in which the Commission must and does have extensive powers.

II. COMMON CARRIERS

Analysis of the railroads' statutory obligations has been considerably...