Baltimore & O. C. T. R. Co. v. U.S.
| Decision Date | 06 September 1978 |
| Docket Number | 77-1732,Nos. 77-1714,s. 77-1714 |
| Citation | 583 F.2d 678 |
| Parties | BALTIMORE AND OHIO CHICAGO TERMINAL RAILROAD COMPANY et al., Petitioners, v. UNITED STATES of America and Interstate Commerce Commission, Respondents, Central Vermont Railway, Inc., Duluth, Winnipeg and Pacific Railway, and the Detroit and Toledo Shore Line Railroad Company, Intervenors, Burlington Northern Inc. and Union Pacific Railroad Company, Intervenors, Duval Sales Corporation, International Minerals & Chemical Corporation, Evans Products Company and Pullman Leasing Company, Intervenors, The Texas Mexican Railway Company, Intervenor. ALIQUIPPA AND SOUTHERN RAILROAD COMPANY et al., Petitioners, v. UNITED STATES of America and the Interstate Commerce Commission, Respondents, Duval Sales Corporation, International Minerals & Chemical Corporation, Evans Products Company and Pullman Leasing Company, Intervenors, The Texas Mexican Railway Company, Intervenor. |
| Court | U.S. Court of Appeals — Third Circuit |
John A. Daily, Richard J. Murphy, Philadelphia, Pa., Martin L. Cassell, Jr., Chicago, Ill., Emried D. Cole, Jr., Jacksonville, Fla., Donald E. Cross, Washington, D. C., Robert S. Davis, St. Louis, Mo., Louis T. Duerinck, Chicago, Ill., Charles B. Evans, St. Augustine, Fla., James L. Howe, III, Washington, D. C., Peter J. Hunter, Jr., Roanoke, Va., Howard D. Koontz, Chicago, Ill., Kinga M. LaChapelle, Albany, N. Y., William C. Leiper, Pittsburgh, Pa., Joseph J. Nagle, Chicago, Ill., John J. Paylor, Cleveland, Ohio, C. Harold Peterson, Minneapolis, Minn., John A. Ponitz, Detroit, Mich., John MacDonald Smith, San Francisco, Cal., Robert H. Stahlheber, Donal L. Turkal, St. Louis, Mo., Sidney Weinberg, Boston, Mass., for petitioners and intervening railroads in support of petitioners in No. 77-1714.
Samuel P. Delisi, Pittsburgh, Pa., C. H. Johns, Gen. Counsel, American Short Line R.R. Assn., Washington, D. C., for petitioners in No. 77-1732.
Robert L. Thompson, Dept. of Justice, Washington, D. C., for the United States.
Mark L. Evans, Gen. Counsel, Henri F. Rush, Associate Gen. Counsel, John J. McCarthy, Jr., I. C. C., Washington, D. C., for the Interstate Commerce Commission.
William P. Higgins, W. Donald Boe, Jr., Union Pacific Railroad Co., Omaha, Neb., Curtis H. Berg, Sr., William R. Power, Burlington Northern Inc., W. Charles Hogg, Jr., Edward C. Toole, Jr., Clark, Ladner, Fortenbaugh & Young, Philadelphia, Pa., for Burlington Northern Inc. and Union Pacific Railroad Co., intervenors in support of respondents.
Harold E. Spencer, Thomas F. McFarland, Jr., Chicago, Ill., for intervening Private Car Interests in Support of respondents; Belnap, McCarthy, Spencer, Sweeney & Harkaway, Chicago, Ill., of counsel.
Before ADAMS, WEIS and HIGGINBOTHAM, Circuit Judges.
Petitioners in these consolidated cases 1 request us to set aside an order of the Interstate Commerce Commission (ICC) entered on April 7, 1977, in Ex Parte No. 289, "Remittance of Demurrage Charges by Common Carriers of Property by Rail." 2 By its order, the ICC adopted a regulation requiring the remittance to freight car owners of all demurrage charges collected by the delivering carrier that are in excess of ten dollars per day per car. 3 Specifically, petitioners maintain that the order exceeds the statutory power of the agency; that it is arbitrary, capricious, and without rational basis; and that it fails to comply with the Administrative Procedure Act (APA) 4 and the Interstate Commerce Act (ICA). 5
For the reasons set forth below, we deny petitioners' request.
The regulation at issue is a recent attempt by the ICC to deal with the longstanding shortage in this country of railroad freight cars. 6 The car shortage, resulting from both an insufficient supply and an inefficient utilization of freight cars, is an outgrowth of the present national carpool system. Under the system, the freight cars that are owned by Individual Railroads constitute a single, common pool, used by All rail carriers. Thus, the same loaded freight car is transported over the lines of different connecting carriers to the ultimate destination point. While more efficient than the earlier practice of shifting freight from the car of one carrier to the car of another, the pool system has at the same time made it more advantageous economically for railroads to utilize the freight cars of the originating carriers than to purchase and maintain their own. The national freight car shortage is the acknowledged result. 7
During the past several years, the ICC has taken a number of major actions in an attempt to ease the car shortage: (1) it has adopted various "car service" rules to regulate the placement and movement of freight cars; 8 (2) it has established a uniform schedule of "per diem" charges, which are those incurred daily by one railroad for the use of another's cars; 9 (3) it has added an "incentive" element to the basic per diem rate; 10 and (4) it has imposed an increase in demurrage charges. 11
Ex Parte No. 289, the proceeding in question here, was instituted in October 1972, to determine whether remittance of the penalty portion 12 of the demurrage charges to the carriers owning the cars would create an added incentive for such carriers to acquire additional cars. Following notice in the Federal Register 13 and submission of written statements by a number of the ninety-seven participating parties, the ICC, on April 25, 1975, issued its Interim Report. 14 The Report adopted the principle of the proposed remittance rule and reopened the proceeding for receipt of additional evidence regarding the plan's feasibility and costs. Following notice of the proposed further rulemaking, 15 one hundred-eighteen parties submitted additional information to the ICC.
On April 7, 1977, the ICC issued its Report and Order in Ex Parte No. 289. 16 It concluded that adoption of the proposed remittance rule would be beneficial to the public and the rail industry, as well as administratively feasible. Consequently, the agency directed that the rule become effective on July 6, 1977. However, the effective date was subsequently stayed by the ICC pending judicial review.
The principal argument made in support of the petition to set aside the order in question is that the ICC lacks a statutory base to promulgate the demurrage remittance rule. The ICC, in turn, contends that it does have the requisite authority under 49 U.S.C.A. § 1(6) (Supp.1978), as amended by the Rail Revitalization and Regulatory Reform Act of 1976 (4R Act). 17
The 4R Act added a provision to § 1(6) which states that "(d)emurrage charges shall be computed, and rules and regulations relating to such charges shall be established, in such a manner as to fulfill the national needs with respect to (a) freight car utilization and distribution, and (b) maintenance of an adequate freight car supply available for transportation of property." 18 Petitioners assert that the statutory directive that "demurrage charges shall be computed" cannot properly be interpreted to authorize the ICC to "divide" demurrage revenues between the delivering carrier and the owner of the car.
In analyzing a question of statutory construction, the Supreme Court has said that it accords deference to the interpretation given the statute by the officers or agency charged with its administration. Udall v. Tallman. 19 While the agency's interpretation is by no means controlling, 20 to sustain the ICC it is necessary only that we find its interpretation to be a reasonable one. 21 As Tallman recognized, "we need not find that (an agency's) construction is the only reasonable one or even that it is the result we would have reached had the question arisen in the first instance in judicial proceedings." 22
Petitioners in the present situation argue that the plain meaning of the phrase "demurrage charges shall be computed" should control, that previous use of the term by the ICC does not indicate an understanding that it confers upon the agency the power to divide demurrage revenues, and that the division of revenues is such a substantial change from prior practice that an express authorization by Congress to divide demurrage charges is required.
While the language of § 1(6) does not specifically authorize remittance to car owners, it is equally clear that the statute does not prohibit such an arrangement. By focusing solely upon the phrase "shall be computed", petitioners tend to restrict what appears to be the rather broad authorization granted to the ICC by the 1976 amendments to § 1(6). 23 Indeed, the provision not only directs the ICC to compute demurrage charges with the purpose of enhancing freight car supply, utilization, and distribution but also mandates the agency to establish "rules and regulations relating to such charges."
The legislative history of the 4R Act further indicates the appropriateness of a broad reading of the amendment to § 1(6). The statute encompassing the provision was enacted by Congress for the general purpose of revitalizing a sagging railroad industry. 24 It was the declared policy of Congress, among other things, to balance the needs of carriers, shippers, and the public; to help place the nation's railroads in a position competitive with that of other modes of transportation, so as to promote more adequate and efficient transportation services; and to increase the attractiveness of investing in railroads and rail-service-related enterprises. 25
One of the means of fulfilling these aims was the amendment pertaining to demurrage charges. That provision, comprising only eight lines in the 120-page statute, understandably did not attract much congressional comment. 26 The few portions of the legislative history that deal with the demurrage provision, however, lend support to the ICC's broad interpretation of § 1(6).
During the initial review of the...
To continue reading
Request your trial
-
Lukens Steel Co. v. Kreps, Civ. A. No. 79-1053.
...Inc. v. Arkansas-Best Freight System, Inc., 419 U.S. 281, 290, 95 S.Ct. 438, 42 L.Ed.2d 447 (1974); Baltimore and Ohio C.T.R. Co. v. United States, 583 F.2d 678, 685 (3d Cir. 1978). In applying the arbitrary and capricious standard, the court's review is confined to the administrative recor......
-
Southern Pacific Transp. Co. v. I.C.C.
...the need to move freight between cars) even where no one railroad's lines connect points A and B. See Baltimore & O.C.T.R.R. Co. v. United States, 583 F.2d 678, 681 (3d Cir.1978), cert. denied, 440 U.S. 968, 99 S.Ct. 1520, 59 L.Ed.2d 784 (1979). The rates at which cars are leased in mandato......
-
Mobil Oil Corp. v. Dept. of Energy, 2-40
...1215-16 (D.C.Cir.1983); State of Missouri ex rel. Freeman v. Block, 690 F.2d 139, 143 (8th Cir.1982); Baltimore & Ohio Chicago Terminal RR Co. v. United States, 583 F.2d 678, 687 (3d Cir.), cert. denied, 440 U.S. 968, 99 S.Ct. 1520, 59 L.Ed.2d 784 (1978). Although an exhaustive listing of f......
-
Westinghouse Elec. Corp. v. U.S. Nuclear Regulatory Com'n
...practice of separating the order and its underlying reasons has received judicial sanction, See Baltimore & Ohio Chicago Terminal Railroad Co. v. United States, 583 F.2d 678, 688 (3d Cir. 1978). That way, parties will not feel compelled to file unnecessary "protective" orders out of uncerta......