Bessemer and Lake Erie R. Co. v. I. C. C.
| Decision Date | 26 January 1983 |
| Docket Number | 81-2633,Nos. 81-1492,s. 81-1492 |
| Parties | BESSEMER AND LAKE ERIE RAILROAD COMPANY, Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents, Association of American Railroads, Western Coal Traffic League, Intervenors, Central Illinois Light Company et al., Intervenors. ALABAMA POWER COMPANY, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Southern Company Services, Inc., Petitioners, v. UNITED STATES of America and Interstate Commerce Commission, Respondents, Western Coal Traffic League, Intervenor, Central Illinois Light Company et al., Intervenors. CHEMICAL MANUFACTURERS ASSOCIATION, Petitioner, v. UNITED STATES of America and Interstate Commerce Commission, Respondents, Western Coal Traffic League, Intervenor, Central Illinois Light Company et al., Intervenors. EDISON ELECTRIC INSTITUTE, Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents, Western Coal Traffic League, Intervenor, Central Illinois Light Company et al., Intervenors. AMERICAN PAPER INSTITUTE, INC., Petitioner, v. UNITED STATES of America and Interstate Commerce Commission, Respondents, Western Coal Traffic League, Intervenor, Central Illinois Light Company et al., Intervenors. ASSOCIATION OF AMERICAN RAILROADS, Petitioner, v. INTERSTATE COMMERCE COMMISSION and the United States, Respondents, Western Coal Traffic League, Intervenor, Central Illinois Light Company et al., Intervenors. IOWA ELECTRIC LIGHT AND POWER COMPANY, Iowa Power and Light Company, Oklahoma Gas & Electric Company, Southwestern Electric Power Company, Petitioners, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents, Western Coal Traffic League, Intervenor, Central Illinois Light Company et al., Intervenors. WESTERN COAL TRAFFIC LEAGUE, Petitioner, v. UNITED STATES of America and Interstate Commerce Commission, Respondents, Carolina Power & Light Company et al., Intervenors. to 81-2638 and 81-2859. |
| Court | U.S. Court of Appeals — Third Circuit |
John G. Harkins, Jr., Thomas E. Zemaitis, Pepper, Hamilton & Scheetz, Philadelphia, Pa., Paul A. Cunningham (argued), Robert M. Jenkins, III, Arthur W. Adelberg, Pepper, Hamilton & Scheetz, Washington, D.C., for Ass'n of American Railroads and Bessemer and Lake Erie R. Co.; Harry N. Babcock, Cleveland, Ohio, Robert B. Batchelder, Omaha, Neb., Curtis H. Berg, St. Paul, Minn., Emried D. Cole, Jr., Louisville, Ky., James L. Howe, III, Richmond, Va., Thormund A. Miller, San Francisco, Cal., Hanford O'Hara, Washington, D.C., Charles C. Rettberg, Jr., Cleveland, Ohio, James L. Tapley, Michael Thompson, J. Thomas Tidd, Richard Weicher, Washington, D.C., of counsel.
John M. Cleary, Edward J. Twomey, Nicholas J. DiMichael, Donelan, Cleary, Wood & Maser, P.C., Washington, D.C., for petitioners Iowa Elec. Light & Power Co., Iowa Power & Light Co., Oklahoma Gas & Elec. Co., and Southwestern Elec. Power Co.
John F. Donelan, John K. Maser, III, John F. Donelan, Jr., Donelan, Cleary, Wood & Maser, P.C., Washington, D.C., for American Paper Institute, the Nat. Indus. Traffic League, Carolina Power & Light Co., South Carolina Elec. & Gas Co., and Virginia Elec. and Power Co.
Frederic L. Wood, Donelan, Cleary, Wood & Maser, P.C., Washington, D.C., for American Paper Institute and the Nat. Indus. Traffic League.
William L. Slover, C. Michael Loftus (argued), Donald G. Avery, John H. LeSeur, Washington, D.C., for Western Coal Traffic League; Slover & Loftus, Washington, D.C., of counsel.
Harry H. Voight (argued), Leonard M. Trosten, Michael F. McBride, Daniel J. Conway LeBoeuf, Lamb, Leiby & MacRae, Washington, D.C., for Edison Elec. Institute.
John R. Molm, Robert P. Edwards, Jr., Michael A. Donnella, Troutman, Sanders, Lockerman & Ashmore, Atlanta, Ga., for Southern Elec. System.
Max O. Truitt, Jr., Neil J. King, Wilmer, Cutler & Pickering, Washington, D.C., for American Iron and Steel Institute.
Gloria M. Sodaro, Washington, D.C., for Chemical Mfrs. Ass'n; Edmund B. Frost, Washington, D.C., of counsel.
Robert S. Burk, Acting Gen. Counsel, Kathleen M. Dollar, Associate Gen. Counsel, John H. Broadley (argued), Daniel B. Harrell, Atty., I.C.C., Washington, D.C., for I.C.C.
William F. Baxter, Asst. Atty. Gen., John J. Powers, III, Asst. Chief Atty. Gen., Kenneth P. Kolson, Atty., Antitrust Div., Dept. of Justice, Washington, D.C., for U.S.
J. Raymond Clark, Mary Todd Foldes, Washington, D.C., for intervenors, Central Illinois Light Co., Middle South Utilities System (Arkansas-Missouri Power Co., Arkansas Power & Light Co., Louisiana Power & Light Co., Mississippi Power & Light Co., New Orleans Public Service Inc.), Potomac Elec. Power Co., Public Service Co. of Indiana, Inc., South Carolina Public Service Authority.
James W. Lawson, William L. Howard, Washington, D.C., M. Gene Matteucci, Las Vegas, Nev., for intervenor, Nevada Power Co.
William L. Slover, C. Michael Loftus, John H. LeSeur, Kelvin J. Dowd, Washington, D.C., for amicus curiae, Consumer Owned Power Coalition; Slover & Loftus, Washington, D.C., of counsel.
Before GIBBONS, Circuit Judge, FISHER, Chief Judge * and MEANOR, District Judge. *
Various shipper interests petition pursuant to 28 U.S.C. Secs. 2321, 2342(5) to review an order of the Interstate Commerce Commission (ICC) adopting a standard of revenue adequacy for market dominant carriers. 1 Ex Parte No. 393, Standards for Railroad Revenue Adequacy, 364 I.C.C. 803 (1981). Several carrier interests petition to review the same order. 2 The shipper interests contend that in several respects the order is more generous to the carriers than the law permits. The carrier interests, while generally defending the order, contend that the ICC erred in its treatment of rail properties currently unused or unuseful. We hold that the carrier petition presents issues not ripe for judicial review. As to the petitions of the shipper interests, we affirm the ICC order.
In 1976, confronting the total collapse of the railroad industry in the Northeast, Congress enacted the Railroad Revitalization and Regulatory Reform Act. Pub.L.No.94-210, 90 Stat. 31 (hereinafter 4R Act). Two salient features of that legislation are relevant to the disposition of the instant petitions.
The first is the provision that [n]otwithstanding any other provision of this part, no rate shall be found to be just and reasonable, on the ground that such rate exceeds a just or reasonable maximum for the service rendered or to be rendered, unless the Commission has first found that the proponent carrier has market dominance over such service. Pub.L. 94-210, Sec. 202(b), equivalent codified at 49 U.S.C. Sec. 10701a(b)(1) (1982). The effect of this provision was to end for most rail service decades of ICC control over maximum rates and to permit carriers not having market dominance to set rates in response to their perception of market conditions. Market dominance was defined as "an absence of effective competition from other carriers or modes of transportation, for the traffic or movement to which the rate applies." Pub.L. 94-210, Sec. 202(c)(i). See 49 U.S.C. Sec. 10709(a) (1982). The ICC has determined that there is effective competition for the traffic or movement to which a rate applies from (1) carriers or modes of transportation, serving the same origin and destination; (2) carriers or modes of transportation delivering the same product from the same origin to alternative destinations; (3) carriers or modes of transportation delivering the same product to the same destination from alternative origins; and (4) carriers or modes of transportation delivering substitute products to the same destination, irrespective of origin. 49 C.F.R. Part 1109; Ex Parte No. 320 (Sub-No. 2), Market Dominance Determinations and Considerations of Product Competition, 365 I.C.C. 118, 129 (1981). Thus the category of market dominant carriers is a narrow one, involving services to shippers who by virtue of location and inability to use substitute products are captive customers of a rail carrier.
The second salient feature of the 4R Act is the enactment of a section dealing with the standard for ratemaking for those market dominant carriers still subject to ICC ratemaking jurisdiction. Section 205 of that Act directed the ICC
within 24 months after the date of enactment of this paragraph, after notice and an opportunity for a hearing, [to] develop and promulgate (and thereafter revise and maintain) reasonable standards and procedures for the establishment of revenue levels adequate under honest, economical, and efficient management to cover total operating expenses, including depreciation and obsolescence, plus a fair, reasonable, and economic profit or return (or both) on capital employed in the business.
Congress directed, further, that"[s]uch revenue levels should (a) provide a flow of net income plus depreciation adequate to support prudent capital outlays, assure the repayment of a reasonable level of debt, permit the raising of needed equity capital, and cover the effects of inflation and (b) insure retention and attraction of capital in amounts adequate to provide a sound transportation system in the United States.
Acting under the mandate of Section 205 the Commission conducted two revenue adequacy proceedings, to which more particular reference will be made hereafter. 3 Meanwhile two major midwestern railroads went bankrupt, necessitating emergency federal legislation. 4 Congress, apparently dissatisfied with the pace of the ICC's revenue adequacy proceedings, passed the Staggers Rail Act of 1980, Pub.L. 96-448, 94 Stat. 1895 (hereinafter the Staggers Act). That Act amended the 4R Act in several respects. In an effort to increase railroad revenues, it created zones of rail...
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