Busboom Grain Co., Inc. v. I.C.C.

• Decision Date: 02 October 1987
• Docket Number: No. 87-2228,87-2228
• Citation: 830 F.2d 74
• Parties: BUSBOOM GRAIN CO., INC., Fisher Farmers Grain & Coal Co., and Patrick W. Simmons, Petitioners, v. INTERSTATE COMMERCE COMMISSION, United States of America, and CSX Transportation, Inc., Respondents.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 74

830 F.2d 74

BUSBOOM GRAIN CO., INC., Fisher Farmers Grain & Coal Co. and Patrick W. Simmons, Petitioners, v. INTERSTATE COMMERCE COMMISSION, United States of America and CSX Transportation, Inc., Respondents.

No. 87-2228.

United States Court of Appeals Seventh Circuit.

Submitted Sept. 2, 1987.

Decided Sept. 2, 1987.

Opinion Issued Oct. 2, 1987.

Thomas F. McFarland, Jr., Belnap, Spencer, McFarland, Emrich & Herman, Chicago, Ill., Gordon P. MacDougall, Washington, D.C., for petitioners.

Dennis J. Starks, Office of Gen. Counsel, I.C.C., John J. Powers, III, U.S. Dept. of Justice, Washington, D.C., for respondents.

Before CUMMINGS, FLAUM, and EASTERBROOK, Circuit Judges.

EASTERBROOK, Circuit Judge.

The Interstate Commerce Commission granted the application of the Chessie System (CSX Transportation) to abandon service on 14 miles of rail line between Henning and Brothers, Illinois, effective September 3, 1987. The ICC found that it would cost Chessie about $36,000 in repairs to keep the line going for another year, and that Chessie was incurring about $32,000 every year in opportunity costs to hold the line in service. (Opportunity costs are the revenues foregone by committing the line to rail service rather than, say, selling the land under the track and investing the money received.) Chessie believes that in the longer term it would cost $330,000 to repair several bridges. Against this Chessie received less than $3,000 per year in net cash flows ("profit", if one disregards opportunity costs). The Commission believed that abandonment would not seriously injure the line's only two customers, who had access to transportation from other railroads and from truck lines.

The customers asked for a stay pending judicial review, contending that the ICC did not properly consider the injury they would suffer as a result of the abandonment and that Chessie's application contained defective calculations of the costs of depreciation and rate of return on its freight cars. Chessie, pointing out that it would need to make an immediate outlay to keep the line in service, opposed the application but offered to preserve the track so that it could restore service if the ICC's order should be reversed. The shippers responded that this offer is empty because: (a) Chessie's easements would lapse, so that it could not restore service, and (b) once the carrier abandons service, the ICC may not order it restored. The shippers conclude that it is now or never for them. After considering these arguments we denied the application for a stay. This opinion records our rationale.

A strong presumption of regularity supports any order of an administrative agency; a stay pending judicial review is a rare event and depends on a demonstration that the administrative process has misfired. See Coleman v. PACCAR, Inc., 424 U.S. 1301, 96 S.Ct. 845, 47 L.Ed.2d 67 (1976) (Rehnquist, Circuit Justice). If the balance of harms is lopsided, the showing may be lower, just as the strength of the showing on the merits needed to obtain a preliminary injunction varies with the costs of error. When the costs of an erroneous grant of the application are low, and the costs of an erroneous denial high, it does not take a powerful showing on the merits to obtain interim relief. See Ball Memorial Hospital, Inc. v. Mutual Hospital Insurance, Inc., 784 F.2d 1325, 1333 (7th Cir.1986); Lawson Products, Inc. v. Avnet, Inc., 782 F.2d 1429, 1433-34 (7th Cir.1986); American Hospital Supply Corp. v. Hospital Products Ltd., 780 F.2d 589, 593-94 (7th Cir.1986). Although these cases deal with preliminary injunctions, the same considerations should inform the disposition of applications for stays of administrative decisions. And we must take into account Congress' decision to expedite the abandonment process. Illinois v. ICC, 709 F.2d 1186, 1193 (7th Cir.1983). Ready availability of stays would lock the railroads into losing propositions for periods beyond those provided by the Staggers Act.

The shippers have not made a powerful showing of probable administrative error. They maintain, however, that the costs of error are lopsided because, if we permit the ICC's order to take effect, it cannot be undone. The shippers' first contention--that...