Com. of Pa. v. I. C. C.

• Decision Date: 21 December 1978
• Docket Number: No. 77-1147,77-1147
• Citation: 590 F.2d 1187
• Parties: COMMONWEALTH OF PENNSYLVANIA and Pennsylvania Public Utility Commission, Petitioners, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents, Consolidated Rail Corporation, Corning Glass Works & Thatcher Glass Manufacturing Co., Intervenors.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1187

590 F.2d 1187

192 U.S.App.D.C. 71

COMMONWEALTH OF PENNSYLVANIA and Pennsylvania Public Utility

Commission, Petitioners, v. INTERSTATE COMMERCE COMMISSION and United States of America,

Respondents,

Consolidated Rail Corporation, Corning Glass Works &

Thatcher Glass Manufacturing Co., Intervenors.

No. 77-1147.

United States Court of Appeals, District of Columbia Circuit.

Submitted Without Oral Argument March 16, 1978.

Decided Dec. 21, 1978.

Gordon P. MacDougall, Washington, D. C., was on the brief, for petitioners.

Mark L. Evans, Gen. Counsel, Henri F. Rush, Associate Gen. Counsel, Walter H. Walker, III, Atty., I. C. C., John H. Shenefield, Acting Asst. Atty. Gen., and Peter de la Cruz, Atty., Dept. of Justice, Washington, D. C., were on the brief, for respondents.

John R. Bagileo, Washington, D. C., was on the brief, for intervenor Corning Glass Works, et al.

John A. Daily and Richard J. Murphy, Philadelphia, Pa., were on the brief for intervenor, Consolidated Rail Corp.

Before McGOWAN, MacKINNON and WILKEY, Circuit Judge.

Opinion of the Court filed by MacKINNON, Circuit Judge.

MacKINNON, Circuit Judge:

The Interstate Commerce Commission (ICC or the Commission) has issued an order approving a proposed tariff of the Consolidated Rail Corporation (ConRail) which cancels that railroad's Piggy-Back Service (Trailer-On-Flat-Car-Service (TOFC)) to twenty-four previously operating TOFC terminals. The Commission evaluated the proposed tariff under 49 U.S.C. § 1(4), (6) ¹ and determined that ConRail was entitled to discontinue its Trailer services to these terminals as no "reasonable request" for their continuation had been advanced. ² Petitioners do not challenge the factual basis for the Commission's order, but rather only the criteria it applied in weighing the evidence presented. As we find that the standard adopted by the ICC was reasonable, within its statutory authority and not inconsistent with its previous decisions in similar cases, we affirm the Commission's order in its entirety.

I. THE FACTS

ConRail was established pursuant to the Regional Rail Reorganization Act of 1973, 45 U.S.C. § 701 Et seq., with the purpose of "reorganization of the railroads, stripped of excess facilities, into a single, viable system operated by a private, for-profit corporation." Regional Rail Reorganization Act Cases, (Blanchette v. Connecticut General Ins. Corps.), 419 U.S. 102, 109, 95 S.Ct. 335, 342, 42 L.Ed.2d 320 (1974). To undertake the planning necessary to implement such reorganization of a number of bankrupt railroads, Congress established the United States Railway Association (USRA), 45 U.S.C. § 711, charged with developing a "Final System Plan" for restructuring the northeastern railroads, 45 U.S.C. § 716.

The Final System Plan was published in due course by the USRA in July 26, 1975, and supplemented on September 18 of the same year. This Plan transferred approximately 70% Of the lines of six northeastern railroads ³ to ConRail and referred specifically to the necessity of restructuring the Trailer service offered by these bankrupt lines. ⁴

On April 1, 1976, ConRail commenced common carrier operations, having filed its Tariff No. 1 in which it proposed to cancel trailer service to 31 ramps previously serviced by the railroads from which ConRail had been constituted. On March 22, 1976, the Commonwealth of Pennsylvania (Pennsylvania) and the Pennsylvania Public Utility Commission filed a protest and petitioned for suspension of the proposed cancellation of TOFC service with the ICC. Many similar protests were filed by parties concerning other TOFC ramps where ConRail planned to terminate service. On March 31, the Commission, Division 2, suspended 27 of ConRail's proposed TOFC cancellations until October 31, 1976, and ordered an investigation into the lawfulness of ConRail's proposals, I & S Docket No. 9108. ⁵ It is undisputed that all such investigation proceedings after February 5, 1976 are governed by 49 U.S.C. § 15(8)(a). This provision of the Railroad Revitalization and Regulatory Reform Act of 1976 requires that when the Commission investigates a proposed change in a railroad's tariff it shall render a final decision within 7 months of the date that the change was scheduled to become effective. ⁶

Oral hearings were held in the TOFC investigation on May 26 and 27 ⁷ and briefs were submitted by participating parties. The ICC, Division 2, served and published its Report and Order on October 29, 1976, two days before the expiration of the statutory seven month period. ⁸ It found that cancellation of TOFC service to or from 24 of the originally proposed 31 terminals had been shown to be just and reasonable. Included among these 24 terminals were Sharon and Reading, Pennsylvania and Elmira, New York. ConRail thereupon ceased Trailer service to these points. On November 24, Pennsylvania filed a "petition for reconsideration" of the order of October 29 requesting the resumption of service to Sharon and Reading. This Petition for Reconsideration was within the 30 day period provided for such petitions by Commission regulations. ⁹ Corning Glass Works and Thatcher Glass Manufacturing Company also filed similar petitions with respect to the cancellation of the Elmira service and also on December 27, ¹⁰ filed petitions for review of the ICC's order in this court, Docket No. 76-2153.

The Commission denied both of these "petitions for reconsideration" by its order of February 2, 1977 in I & S No. 9108 (complaint). ¹¹ The ICC stated in this order that due to the seven month time limit established in 15(8)(a), the October 29 order was statutorily and administratively final. Thus, by statute, the Commission asserted that it was precluded from acting on petitions for reconsideration and it was likewise precluded from reversing itself on reconsideration sua sponte. ¹² Accordingly, it elected to treat the petitions in question as new "complaints" within the meaning of 15(8)(a). ¹³

Acting on these "new complaints" the Commission granted Corning and Thatcher's complaint that termination of the Elmira service was unlawful. However, it dismissed Pennsylvania's complaint by discontinuing the proceeding on the ground that it could not take any further action on its "Final decision."

On February 3, Pennsylvania and the Pennsylvania Public Utility Commission (Utility Commission) filed a petition for review in this court, Docket No. 77-1147 and at the same time intervened in No. 76-2153, the action filed on December 27 by Corning and Thatcher. On February 18, however, Corning and Thatcher moved to dismiss No. 76-2153 on the grounds that the relief that they were seeking had been granted by the Commission's decision to restore service to Elmira (ConRail had resumed TOFC service to Elmira on February 15, 1977). Pennsylvania and the Utility Commission opposed this motion to dismiss because, as more than sixty days had elapsed between the October 29th order and their filing for judicial review, dismissing No. 76-2153 might cause the court to lose jurisdiction over 77-1147 according to the I.C.C.'s interpretation of 28 U.S.C. § 2344. ¹⁴ This court, however, granted the motion to dismiss and denied a petition for rehearing on that ruling on April 28, 1977. On June 16, the petitioners filed their opening brief in 77-1147. ConRail and Corning Glass and Thatcher Manufacturing were permitted to intervene.

II. JURISDICTION

As a threshold issue, the ICC raises a challenge to the jurisdiction of this court. This challenge is based on the Commission's interpretation of two statutes. 49 U.S.C. § 15(8)(a) ¹⁵ requires that the Commission issue a "final decision" on the reasonableness of proposed tariffs no later than seven months after their scheduled effective date. 28 U.S.C. § 2344 ¹⁶ (the Hobbs Act) specifies that "any party aggrieved by a final order (of an Agency) may, within 60 days after its entry, file a petition to review the order in the court of appeals wherein venue lies." The ICC contends that since Pennsylvania and the Utility Commission did not file for review within sixty days of the ICC order of October 29, they are barred by the Hobbs Act from being heard in this court. ¹⁷ Petitioners, on the other hand, argue that the 60 day period provided for by the Hobbs Act was tolled until the Commission disposed of their Petition for Reconsideration. The ICC acknowledges that usually a party has sixty days from the denial of a Petition for Reconsideration to file for judicial review, but insists that the requirement embodied in 49 U.S.C. § 15(8)(a) that a "final decision (be) rendered" not later than 7 months after the scheduled effective date supercedes the usual review procedures.

The jurisdictional argument raised by the Commission is sufficiently surprising that it is worth summarizing what it considers to be the basic issue raised by the timing of the various petitions for review and reconsideration presented in this case. Pennsylvania complied with all the time limits applicable in the usual case of obtaining judicial review of administrative action in that it filed for reconsideration by the agency within the prescribed 30 day period and for judicial review within the sixty days prescribed by the Hobbs Act from the date of the denial of the petition for reconsideration. Respondents, however, argue that petitioners' suit should be barred as untimely. The Commission maintains that 15(8)(a) changed the normal review procedure by foreclosing All possibility of further agency review after the lapsing of the seven month period. Thus, because the Commission's order in this case was issued at the very end of this period, it necessarily became the agency's final order, without possibility of reconsideration.

Accordingly, the Commission argues that the sixty day period of the Hobbs Act began to run, not from the date of the disposition of the Petition for Reconsideration but from the earlier date of the issuance of the...