Alabama Public Service Com'n v. I.C.C.

• Decision Date: 23 July 1985
• Docket Number: Nos. 84-7349,84-7358,s. 84-7349
• Citation: 765 F.2d 1516
• Parties: ALABAMA PUBLIC SERVICE COMMISSION, Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents. The CITY OF TUSCALOOSA, ALABAMA, et al., Petitioners, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1516

765 F.2d 1516

ALABAMA PUBLIC SERVICE COMMISSION, Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America,

Respondents.

The CITY OF TUSCALOOSA, ALABAMA, et al., Petitioners, v. INTERSTATE COMMERCE COMMISSION and United States of America,

Respondents.

Nos. 84-7349, 84-7358.

United States Court of Appeals Eleventh Circuit.

July 23, 1985.

Stanley W. Foy, Montgomery, Ala., for Alabama Public Service Com'n.

Louis Mackall, Office of the Gen. Counsel, ICC, Washington, D.C., for I.C.C.

John J. Powers, III, George Edelstein, Dept. of Justice, Washington, D.C., for the U.S.

John W. Adams, Jr., Mobile, Ala., for Illinois Central Gulf R.R.

Rutherford Lyle Key, Jr., Jacksonville, Fla., for Seaboard System R.R., Inc.

Nancy S. Fleischman, Washington, D.C., for Central of Georgia & Southern Ry.

J.D. Fleming, Jr., John W. Bonds, Jr., Atlanta, Ga., for Union Camp Corp.

William P. Jackson, Jr., Jackson & Jessup, P.C., Arlington, Va., for The City of Tuscaloosa, Ala., et al.

Petitions for Review of an Order of the Interstate Commerce Commission.

Before KRAVITCH and HATCHETT, Circuit Judges, and WRIGHT ^*, Senior Circuit Judge.

HATCHETT, Circuit Judge:

In this appeal, we review the Interstate Commerce Commission's decision that approval of a finance application, involving several railroads, which included acquisitions and abandonments, would not cause a substantial lessening of competition, a monopoly, or a restraint of trade. We affirm.

FACTS

In July, 1982, five railroads reached agreement on a series of acquisitions and abandonments. ¹ The negotiations which culminated in the filing of the three applications for approval by the Interstate Commerce Commission (ICC) were conducted under the statutory protection of section 5 of the Department of Transportation Act. ²

Prior to the filing of the three applications, the ICC determined that Finance Docket 30202 was a "minor" transaction under 49 C.F.R. Sec. 1180.2 ³ which provides for limitation of the amount of information that an applicant need provide and allows the ICC to waive other informational requirements of 49 C.F.R. Sec. 1152 (1984). See 49 C.F.R. Secs. 1180.0, 1180.6, and 1180.8.

The ICC approved Finance Docket 30202 as a minor transaction based on 49 U.S.C.A. Sec. 11344(d). ⁴ That section obligates Dockets AB-28 and AB-43 were approved based on a finding that the abandonments are required by public convenience and necessity. 49 U.S.C.A. Secs. 10903(a), 10904(d). ⁵ The additional requirement under the public convenience and necessity test of 49 U.S.C.A. Sec. 10904(d)(2) (detriment not to exceed the benefit of the abandonment), was not applied by the ICC because the Secretary of Transportation neither approved nor disapproved the agreements. ⁶

the ICC to approve the application unless there is a finding that the transaction is likely to substantially lessen competition, create a monopoly, or otherwise restrain trade and freight service transportation. If anticompetitive effects are both likely and substantial, the ICC must balance those effects against the public interest in satisfying significant transportation needs.

Petitioners appeal the ICC's (1) granting of authority to finalize purchase, trackage rights, and Montgomery terminal agreements (Finance Docket 30202) pursuant to 49 U.S.C.A. Secs. 11343-11345 (1984), 49 C.F.R. Secs. 1180.0-1180.26 (1984); (2) granting of certificate of public convenience for the Union Springs-Montgomery, Alabama, abandonment (Docket AB-28, sub-5) pursuant to 49 U.S.C.A. Sec. 10903 (Supp.1984) ⁷; and (3) granting of certificate of public convenience for the Tuscaloosa-Maplesville, Alabama, abandonment (Docket AB-43, sub-101) pursuant to 49 U.S.C.A. Sec. 10903.

STATUTORY CRITERIA AND STANDARD OF REVIEW

This circuit has previously discussed the requirements of the public convenience and necessity test. In Georgia Public Service Commission v. United States, 704 F.2d 538, 541 (11th Cir.1983), we held that:

[A] finding of public convenience or [sic] necessity involves balancing competing interests: '[t]he benefits to particular communities and commerce of continued operation must be weighed against the burden thereby imposed upon other commerce.' Colorado v. United States, 271 U.S. 153, 168, 46 S.Ct. 452, 456, 70 L.Ed. 878, 885 (1926). E.g., State of Texas v. United States, 642 F.2d 87, 90 (5th Cir.1981); State of Nebraska v. United States, 255 F.Supp. 718, 721 (D.Neb.1966). As we stated in State of Texas v. United States, 642 F.2d at 90:

The Commission's role in abandonment proceedings is to balance the immediate and local interests of the community and the shippers against the broader public interest in freeing interstate commerce from undue burdens. The ICC must consider whether the branch line is profitable or whether it imposes a drain on other income, as well as the likely expense of continued operation, ....

(citation omitted). Balancing requires the ICC to take into account a number of relevant factors, including the profitability of the line and the expense of continued operation, Purcell v. United States, 315 U.S. 381, 384, 62 S.Ct. 709, 710, 86 L.Ed. 910, 914 (1942), the likelihood of the line's future profitability, People of the State of Illinois v. United States, 666 F.2d 1066, 1079 (7th Cir.1981); State of Texas, 642 F.2d at 89, the availability of alternative transportation, People of the State of Illinois, 666 F.2d at 1080; State of Texas, 642 F.2d at 89, and the congressionally mandated examination of the harm to rural communities. 49 U.S.C. Sec. 10903(a). [Footnote omitted.]

The standard of appellate review of an ICC decision is very narrow. Bloomer Shippers Association v. ICC, 679 F.2d 668 (7th Cir.1982). The scope of our review is directed only at the conclusion of the ICC. State of Texas v. United States, 642 F.2d 87, 89 (5th Cir.1981). "We may only overturn the decision if it is unsupported by substantial evidence, 5 U.S.C. Sec. 706(2)(E), or if it is 'arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.' " Georgia Public Service Commission, 704 F.2d at 542. "Substantial evidence" is relevant evidence acceptable by a reasonable mind as supporting a conclusion. Refrigerated Transport Company, Inc. v. ICC, 616 F.2d 748, 751 (5th Cir.1980). "It is something more than a scintilla of evidence, but something less than the weight of the evidence." McHenry v. Bond, 668 F.2d 1185, 1190 (11th Cir.1982). If there is substantial evidence in the record, it is beyond the appellate court's function to "substitute its own conclusions for those which the Commission had fairly drawn from such findings." Bowman Transportation, Inc. v. Arkansas-Best Freight System, Inc., 419 U.S. 281, 285, 95 S.Ct. 438, 441, 42 L.Ed.2d 447 (1974) (citing Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 823, 28 L.Ed.2d 136 (1971)). Under the arbitrary and capricious standard, "all the agency must do is articulate a rational connection between the facts and its conclusion." Georgia Public Service Commission, 704 F.2d at 543. See Bowman Transportation, Inc., 419 U.S. at 285, 95 S.Ct. at 441. Once the ICC has drawn its conclusion, an appellate court must give deference to the expertise of the agency. Georgia Public Service Commission, 704 F.2d at 543; People of State of Illinois v. ICC, 698 F.2d 868, 871 (7th Cir.1983).

Finance Docket 30202: Purchase, Trackage Rights and Montgomery Terminal Agreements

Alabama Public Service Commission and the other petitioners contend that the anticompetitive effects of Finance Docket 30202 and of the other dockets outweigh the public interest in meeting significant transportation needs. Petitioners find an abuse of discretion and lack of substantial evidence in (1) the failure of the ICC while Petitioners' contentions are without merit. First, mindful of our limited scope of review, we find that the ICC's decision to consider the applications individually, even while evaluating the existence of anticompetitive effects, was not an abuse of discretion. If the Department of Transportation (DOT) had approved the plans which were before the ICC as individual applications, then the ICC would have been required by 49 U.S.C. Sec. 10904(d)(2) to consider whether the detriment caused by the proposed abandonments exceeded the benefits of the "proposal as a whole." Because the Secretary of Transportation chose not to approve the coordinated plan, the ICC was not bound by the section 10904(d)(2) standard. Without the approval of the Secretary of Transportation as to the proposed agreement as a whole, it was not an abuse of discretion for the ICC to decline to consider the overall benefits of all the agreements while determining whether to grant the certificates of public convenience and necessity for the abandonments. See Louisville and Nashville Railroad Co.--Abandonment, 366 I.C.C. 1, 9 (1981). Second, it is not for the court of appeals to disturb the ICC's definition of the geographic and product markets for purposes of an anticompetitive effect evaluation based on the bare allegations of petitioners that a more broad definition is appropriate. Third, the determination of what filing requirements are appropriate for the application is totally within the expertise and discretion of the ICC. Petitioners have not shown that the ICC's classification is based on less than a scintilla of evidence or has no rational connection to the facts.

considering the anticompetitive effects of Finance Docket 30202, to evaluate the anticompetitive effects of the overall plan (those agreements specified and implicated under the other dockets before the ICC); (2) the purported error of the ICC in restricting the geographic market area for consideration of anticompetitive effects to the Montgomery-Maplesville corridor and not considering the entire region covered by all the dockets; and (3) in its classifying Finance Docket 30202 as a "...