Arizona Elec. Power Co-op., Inc. v. I. C. C., s. 80-1761

CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)
Citation675 F.2d 303
Docket Number80-2016 and 80-2057,Nos. 80-1761,s. 80-1761
PartiesARIZONA ELECTRIC POWER COOPERATIVE, INC., et al., Petitioners, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents, Eastern and Western Railroads, Southern Railroads, Intervenors. The ALUMINUM ASSOCIATION, INC., Petitioner, v. UNITED STATES of America and Interstate Commerce Commission, Respondents, Eastern, Southern and Western Railroads, Intervenors. KAISER ALUMINUM & CHEMICAL CORPORATION, Petitioner, v. UNITED STATES of America and Interstate Commerce Commission, Respondents, Eastern, Southern and Western Railroads, Intervenors.
Decision Date16 March 1982

William L. Stover with whom C. Michael Loftus and Donald G. Avery, Washington, D. C., were on the brief for Arizona Elec. Power Co-op., Inc., et al., petitioners in No. 79-1761.

Dickson R. Loos with whom David H. Baker, Washington, D. C., was on the brief for The Aluminum Ass'n, Inc., petitioner in No. 80-2016.

Denise M. O'Brien with whom John H. Caldwell and John H. Spellman, Washington, D. C., were on the brief for Kaiser Aluminum and Chemical Corp., petitioner in No. 80-2057.

Ellen K. Schall, Deputy Associate Gen. Counsel, with whom Richard A. Allen, Gen. Counsel, and Robert S. Burk, Deputy Gen. Counsel, I.C.C., Washington, D. C., were on the brief for respondent, I.C.C.

Joseph H. Dettmar, Atty., I.C.C., John J. Powers, III, and Kenneth P. Kolson and Andrea Limmer, Attys., Dept. of Justice, Washington, D. C., entered appearances for respondent, United States of America.

Richard J. Flynn with whom Richard E. Young and R. Eden Martin, Washington, D. C., were on the brief for intervenors.

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

Opinion for the Court filed by Circuit Judge MacKINNON.

MacKINNON, Circuit Judge.

On July 3, 1980, the Interstate Commerce Commission ("Commission") declined to suspend or investigate certain general rate increases proposed by the nation's railroads ("railroads"). (Ex parte No. 375 (Sub-No. 1). JA 1130-1142). This action has been attacked by petitioning commodity shippers on a variety of grounds. Inasmuch as Commission actions of this sort are by past case-law outside the jurisdiction of this Court, we find the Commission order unreviewable and refrain from addressing the various substantive contentions at issue.

I

On February 3, 1980, the railroads presented a two phase rate increase request to the Commission. 1 Claiming that inflationary costs were seriously damaging the industry, the railroads petitioned for a rate increase to meet the incremental rising costs (phase I) and then for a subsequent increase to enhance profits (phase II). The requests, styled "general" or "across-the-board" increase requests, 2 conformed to the applicable regulations governing rail carrier general increase proceedings. 3

The Commission approved phase I on March 19, 1980. (Pet. Aluminum Ass'n On May 20, 1980, the Commission gave the railroads permission to file the proposed second increase, made all railroads respondents, and invited any persons opposing the proposed increases or wishing to comment thereon to file protests within fifty days against the increase action. (JA 432-445). Some two hundred parties responded, seeking suspension of the increase and investigation into its justification. The railroads filed replies to these protests on June 19.

Brief at App. B). On May 12, 1980, the railroads restructured their phase II petition because subsequent to the March 19 order there had been a total cost escalation of $1,571.4 million nation-wide and expected revenues during that same period would, due to hold-downs, flagouts and delays in interstate applications, be only $1,504 million nationwide. (JA 46-136). Whereas initially the second increase was designed to enhance profits, that increase now was to help defray the additional rising costs.

On July 3, 1980, the Commission, finding that the railroads had demonstrated general revenue need, issued a decision pursuant to 49 U.S.C. § 10707 4 declining to suspend or investigate the increase except as it applied to scrap iron and steel and certain other recyclable commodities. (JA 1131). However, the Commission conditioned its decision on the carriers' filing a supplement to the increase limiting the increase on certain commodities 5 to percentages no greater than the average cost increases in each region and between the regions. 6

Petitioners have attacked this July 3 order on a number of grounds, most notably alleging that the Commission order did not comply with the requirements of a general increase proceeding and that that order was in any event arbitrary and capricious.

II

We decline to review Ex parte No. 375 (Sub-No. 1) for three reasons. First, the Supreme Court has held that Commission decisions declining to suspend or investigate proposed railroad rate increases are unreviewable. Second, as a number of lower courts have held, Commission findings of general revenue need are likewise unreviewable. Finally, review of shipper challenges to particular rates are either barred or not yet ripe for decision. Petitioners who did not file timely complaints are now precluded from challenging the lawfulness of the rate increase. Those who filed complaints under Sections 10704 and 11701 of the Interstate Commerce Act now await final decision from the Commission on the merits of their respective claims.

A. The Commission Decision not to Suspend or Investigate

In Southern Railway Co. v. Seaboard Allied Milling Corp., 442 U.S. 444, 99 S.Ct. The disruptive practical consequences of such a determination confirm our view that Congress intended no such result. The Commission reviews over 50,000 rate-schedule filings each year; many, including the one involved here, contain thousands of individual rates.... If the Commission, which generally makes its ... investigation decisions within 30 days in order to allow pre -effective suspension, must carefully analyze and explain its actions with regard to each component of each proposed schedule, and if it must increase the number of investigations it conducts, all in order to avoid judicial review and reversal, its workload would increase tremendously.

2388, 60 L.Ed.2d 1017 (1979), a Commission decision not to suspend or investigate a proposed nationwide increase in the railroad carriage rates for grain and soybeans was challenged by a number of shippers who alleged impropriety in the fixing of the rate in question. The Supreme Court ruled out judicial scrutiny of the Commission order, on the ground that the relevant section of the Interstate Commerce Act could not possibly "be read to tolerate judicial review of the Commission's decision not to investigate the lawfulness of a proposed rate schedule." Id. at 454, 99 S.Ct. at 2394. With respect to the consequences of a rule that would require Court review of such Commission decisions, the Supreme Court remarked:

Id. at 457, 99 S.Ct. at 2395. See also Aberdeen & Rockfish R.R. Co. v. SCRAP, 422 U.S. 289, 311, 95 S.Ct. 2336, 2351, 45 L.Ed.2d 191 (1975); Consolidated Rail Corp. v. National Association of Recycling Industries, Inc., 449 U.S. 609, 101 S.Ct. 775, 66 L.Ed.2d 776 (1981); United States v. SCRAP, 412 U.S. 669, 691-92, 698, 93 S.Ct. 2405, 2417-2418, 2421, 37 L.Ed.2d 254 (1972); Arrow Transportation Co. v. Southern Railway Co., 372 U.S. 658, 83 S.Ct. 984, 10 L.Ed.2d 52 (1962). 7

The instant case fits squarely within the Seaboard ruling. In Ex parte No. 375 (Sub-No. 1), the Commission specifically stated that it was "declin(ing) to suspend the proposed increase." (JA 1131). It also conforms to a recent decision by the Eighth Circuit in Union Electric Co. v. United States, 626 F.2d 1348, 1355 (8th Cir. 1980), involving a challenge virtually identical to that challenge here at issue,

The language of the order, viewed in light of the nature of decisions to suspend and investigate general rate increases, convinces us that the ICC declined to initiate a proceeding under section 10707 to determine the legality of the general increase. Under the holding in Seaboard, that decision is committed to ICC discretion and therefore is not judicially reviewable.

We consequently find that this Court lacks jurisdiction to review the various complaints herein set forth.

B. General Revenue Need

Petitioners maintain that the Commission's findings on general revenue need were erroneous, insofar as the evidence submitted by the railroads on that point was inaccurate and inflationary. We decline consideration of this allegation as well. Review of the Commission's revenue need determination would be inconsistent with the holdings of such cases as United States v. SCRAP, supra, and Seaboard, that the Commission's Two three-judge courts have found Commission findings on general revenue need outside the jurisdiction of the federal courts. In Alabama Power Co. v. United States, 316 F.Supp. 337 (D.D.C.1969), aff'd by an equally divided Court, 400 U.S. 73, 91 S.Ct. 259, 27 L.Ed.2d 212 (1970), the District of Columbia District Court declined to comment on a shipper's challenge to "certain rate increase orders of the ... Commission" because those orders, based on findings of general revenue need, were inherently unreviewable. Noting that the decision not to review was not a final decision on the merits of the shippers' claims, the court remarked,

refusal to suspend or investigate a general rate increase as a whole is not reviewable. That refusal is based almost exclusively on a finding that the increases as a whole are warranted by the revenue needs of the railroads. Aberdeen & Rockfish R.R., supra, 422 U.S. at 311-13, 95 S.Ct. at 2351-2352. To hold that the basis for the Commission's decision not to suspend or investigate the...

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