City of Cherokee v. I. C. C.
| Citation | 671 F.2d 1080 |
| Decision Date | 17 February 1982 |
| Docket Number | No. 81-1607,81-1607 |
| Parties | CITY OF CHEROKEE, Farmer's Co-Op, Archer Co-Op, Calumet Feed Service, Metz Baking Company, Ray Halder AGG Lime Service, Towena Elevator & Mill, C. S. Agro Corporation, Farmer's Co-Op George Iowa, Boyden AGG Lime and M. S. Stuckey, Petitioners, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents, Illinois Central Gulf Railroad Company, Intervenor-Respondent. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Marvin Wallace Miller, City Sol. (argued), Cherokee, Iowa, Gordon P. MacDougall (argued), Washington, D. C., for petitioners.
William F. Baxter, Asst. Atty. Gen., John J. Powers, III, Kenneth P. Kolson, Attys., Dept. of Justice, Richard A. Allen, Gen. Counsel, Henri F. Rush, Associate Gen. Counsel, Edward J. O'Meara (argued), Attys., I. C. C., Washington, D. C., for respondents.
Howard D. Koontz, John H. Doeringer, Chicago, Ill., R. Eden Martin, Lawrence A. Miller (argued), David M. Levy, Washington, D. C., Charles E. Dapron, John P. Emde, St. Louis, Mo., for Illinois Central Gulf R. Co.
Before HEANEY, ROSS and STEPHENSON, Circuit Judges.
This matter arises in connection with abandonment proceedings previously reviewed by this Court. See City of Cherokee v. ICC, 641 F.2d 1220 (8th Cir. 1981). The Illinois Central Gulf Railroad (ICG) seeks to abandon service on a 96-mile branch line between Cherokee, Iowa, and Sioux Falls, South Dakota. ICG's abandonment application was initially denied by an administrative law judge who found that "public convenience and necessity" supported continued service on the line and that, under applicable cost accounting standards, the line made a positive contribution to ICG's income. Id. at 1223. The Interstate Commerce Commission (ICC), however, applied different cost criteria and a different standard for balancing the public and private interests affected by abandonment. The ICC voted to issue a certificate of abandonment, but we reversed and remanded the case for further proceedings consistent with proper abandonment standards. Id. at 1228-1230. We stayed our mandate, however, to permit the ICG and the ICC to seek review by the Supreme Court. The Justice Department argued that certiorari should be denied and that the matter should be reopened before the ICC. See Memorandum for the United States. The Supreme Court subsequently denied certiorari, 50 U.S.L.W. 3278 (Oct. 13, 1981), and our mandate took effect. The abandonment proceedings have been reopened and appear to be near completion. See I.C.C. Docket No. AB-43 (Sub-No. 47) ().
Within weeks of our decision remanding the matter and while the certiorari petition was pending, ICG filed a unilateral tariff increase of more than $1,000 per car for all traffic moving on the branch line. This surcharge would more than double the present freight rates on the line. The ICC accepted the surcharge and refused petitioners' request to suspend and investigate it. We stayed the surcharge pending this decision. We now remand the rate proceeding to the ICC for a hearing at which the petitioners and the ICG may show whether the surcharge is proper under the criteria set forth in the Staggers Rail Act. ICG is enjoined from implementing the surcharge until such time as the foregoing hearing is held and the ICC makes a determination based thereon.
The petitioners herein are citizens, shippers and local governments that rely on the branch line which ICG seeks to abandon. As we earlier found, abandonment would have a devastating effect both on the petitioners' economic lives and on the essential quality of life in the affected communities. See id. at 1224-1225, 1229-1230. The petitioners contend that the $1,000-per-car surcharge is designed to effect a de facto abandonment of the branch line-achieving in practice what this Court held is impermissible at the present time. 1 The petitioners, therefore, construe the rate surcharge as an attempt to interfere with this Court's jurisdiction and to thwart the clear mandate of this Court. We agree.
The timing of the ICG's action is more than suspect. Within weeks of our initial decision remanding the abandonment matter, the ICG announced that it would immediately increase by more than one hundred percent the freight charges for all commodities that move on the branch line. The petitioners' verified complaint indicates, based upon a canvass of shippers along the affected line, that no freight will move if the surcharge becomes effective. Even if traffic is not eliminated totally, a significant reduction in traffic appears to be an obvious result. Such a reduction in traffic and related revenues would fundamentally alter the reopened abandonment proceedings by turning what the ALJ found to be a marginally successful line into a certain loser. Given the magnitude and timing of ICG's proposed surcharge, we must conclude that it was deliberately imposed to interfere with our remand of the abandonment question, if not to render the abandonment proceedings moot. 2
Despite these circumstances, the ICG, and the ICC argue that this Court has no power to review the surcharge, relying on the rule that ICC decisions not to suspend a tariff are generally not reviewable. See, e.g., Consol. Rail Corp. v. Nat. Ass'n of Recycling Ind., 449 U.S. 609, 101 S.Ct. 775, 777, 66 L.Ed.2d 776 (1981) (per curiam); Southern Railway Co. v. Seaboard Allied Milling Corp., 442 U.S. 444, 99 S.Ct. 2388, 60 L.Ed.2d 1017 (1979).
We recognize this general rule, but find no need to disturb it. Our jurisdiction arises from quite another source: this Court has the power to review the surcharge to the extent that is necessary to protect our undisputed jurisdiction over the abandonment proceedings. See, e.g., 28 U.S.C. § 1651(a) (1980) (All Writs Act); Atchison, T. & S.F. R. Co. v. Wichita Bd. of Trade, 412 U.S. 800, 820, 93 S.Ct. 2367, 2381, 37 L.Ed.2d 350 (1973). This source of jurisdiction is narrow, but here, the petitioners have made a prima facie showing that the surcharge is intended to interfere with our clear mandate and jurisdiction in the abandonment case. In such circumstances, the power to review the surcharge arises out of necessity. Because these are not the ordinary circumstances in which rate questions arise, invoking jurisdiction in this case will have little impact on the general doctrine of nonreviewability. 3
The merits of the surcharge present a more difficult question. The petitioners ask us to declare the surcharge unlawful on the theory that any surcharge which will effect a de facto abandonment is an illegal circumvention of the statutory requirements for abandonment. We cannot accept this theory in light of the Staggers Rail Act of 1980.
We first note that before passage of the Staggers Act, a unilateral surcharge such as ICG's would have been impossible. The Staggers Act, however, authorizes railroads to publish a branch line surcharge if, without such a surcharge, revenues from the line would not cover 110% of the variable costs of transporting traffic to or from the line, plus one hundred percent of the railroad's "reasonably expected costs" of continuing to operate the line. See 49 U.S.C. § 10705a(b)(2) (Supp.1981). Although there are several procedures by which shippers may protest a surcharge, the Staggers Act expressly prohibits the ICC from reducing the surcharge rates to a level below the 110%/100% formula. See id., §§ 10705a(a)(1)(B)(iv), (a)(3)(B), (b)(3)(C). Thus, the statute sets a minimum revenue standard which a railroad may seek to achieve through a surcharge.
The petitioners' contention is that, regardless of whether a surcharge meets the 110%/100% standard, it is per se unlawful if its effect will be to eliminate movement of traffic on the line. There is no basis in the statute, however, for applying such a de facto abandonment standard. Moreover, to apply such a standard would require us to engage in impossible factfinding. We would first have to resolve disputes between shippers and carriers as to the effect of a particular surcharge. Even assuming, for example, that the proposed surcharge here would result in a de facto abandonment, by what criteria are we to determine whether a lesser surcharge is permissible, and if so, at what level? We must turn to the statute for such criteria and the statute clearly sets forth the 110%/100% formula. Congress has declared that this standard is controlling and it is to Congress that the petitioners must turn for relief if a surcharge which meets this standard will result in de facto abandonment.
There has been no determination, however, that the $1,000-per-car surcharge does in fact comport with the statutory standard. The petitioners, the ICG and the ICC have all focused on the de facto abandonment theory. Indeed, the petitioners could not have shown whether the surcharge exceeds the statutory formula because the ICC had failed to promulgate rules defining the "reasonably expected cost" component of the formula. The issue thus becomes whether the petitioners should have an opportunity to demonstrate to the ICC that the proposed surcharge exceeds the statutory formula or is otherwise impermissible under the Staggers Act. We think they should.
In adopting...
To continue reading
Request your trial
- City of Cherokee v. I.C.C.
-
Illinois Commerce Com'n v. I.C.C.
... ... 3 In City of Cherokee v. ICC, 671 F.2d 1080 (8th Cir.), cert. denied, 459 U.S. 863, 103 S.Ct. 140, 74 L.Ed.2d 119 (1982), the Eighth Circuit cited its power to ... ...
-
Alldredge Grain & Storage Co. v. I.C.C.
... ... City v. United States, 314 U.S. 534, 546 [62 S.Ct. 366, 372, 86 L.Ed. 432] (1942) ... The delegation to the Commission is not, of course, ... In oral argument, the petitioners conceded this result but contended that our decision in City of Cherokee v. Interstate Commerce Commission, 671 F.2d 1080 (8th Cir.1982), requires that this court remand the case to the ICC for another hearing at which the ... ...