Com. of Pa. v. I. C. C., 76-1558

• Decision Date: 04 August 1977
• Docket Number: No. 76-1558,76-1558
• Citation: 561 F.2d 278,182 U.S.App.D.C. 280
• Parties: COMMONWEALTH OF PENNSYLVANIA, Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents, Federal Maritime Commission, Delaware River Port Authority, IML Freight, Inc., Philadelphia Marine Trade Association et al., Japan/Korea-Atlantic & Gulf, Freight Conference et al., Philadelphia District Council et al., Pacific Westbound Conference, City of Philadelphia, Philadelphia Port Corporation, State of Texas, Sea-Land Service, Inc., and Seatrain International, Intervenors.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 278

561 F.2d 278

182 U.S.App.D.C. 280

COMMONWEALTH OF PENNSYLVANIA, Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America Respondents Federal Maritime Commission, Delaware River Port Authority IML Freight, Inc., Philadelphia Marine Trade Association et al., Japan/Korea-Atlantic & Gulf, Freight Conference et al. Philadelphia District Council et al., Pacific Westbound Conference, City of Philadelphia, Philadelphia Port Corporation, State of Texas, Sea-Land Service, Inc., and Seatrain International, Intervenors.

No. 76-1558.

United States Court of Appeals, District of Columbia Circuit.

Argued Jan. 7, 1977.

Decided June 20, 1977.

Rehearing Denied Aug. 4, 1977.

Gordon P. MacDougall, Sp. Asst. Atty. Gen., of the Commonwealth of Pennsylvania, Washington, D.C., for petitioner.

Henri F. Rush, Atty., I.C.C., Washington, D.C., with whom Mark L. Evans, Gen. Counsel, Charles H. White, Jr., Associate Gen. Counsel, I.C.C., Barry Grossman and Robert J. Wiggers, Attys., Dept. of Justice, Washington, D.C., were on the brief, for respondents.

Gordon M. Shaw, Atty., Federal Maritime Commission, Washington, D.C., with whom Edward G. Gruis, Deputy Gen. Counsel, Federal Maritime Commission, Washington, D.C., was on the brief, for intervenor, Federal Maritime Commission.

R. Frederic Fisher, San Francisco, Cal., for intervenor, Pacific Westbound Conference. Edward D. Ransom, San Francisco, Cal., also entered an appearance for intervenor, Pacific Westbound Conference.

Charles F. Warren, George A. Quadrino, Washington, D.C., and John E. Ormond, Jr., Washington, D.C., were on the brief for intervenors, Japan/Korea-Atlantic and Gulf Freight Conference, et al.

Edward M. Shea and John A. Douglas, Washington, D.C., were on the brief for intervenor, Sea-Land Service, Inc.

Neal M. Mayer and Paul D. Coleman, Washington, D.C., were on the brief for intervenor, Seatrain International. Charles L. Haslup, III, Washington, D.C., entered an appearance for intervenors, Seatrain International.

Martin A. Heckscher, Philadelphia, Pa., entered an appearance for intervenor Delaware River Port Authority.

Ann M. Pougiales, San Francisco, Cal., entered an appearance for intervenor, IML Freight, Inc.

Gordon P. MacDougall, entered appearances for intervenors, Philadelphia Marine Trade Association, et al. and City of Philadelphia.

Abraham E. Freedman, New York City, entered an appearance for intervenor, Philadelphia District Council, et al.

M. Carton Dittmann, Jr., Philadelphia, Pa., entered an appearance for intervenor, Philadelphia Port Corp.

J. David Hughes, Houston, Tex., entered an appearance for intervenor State of Texas.

Before BAZELON, Chief Judge, WILKEY, Circuit Judge, and GESELL, ^* United States District Judge for the United States District Court for the District of Columbia.

Opinion for the Court filed by WILKEY, Circuit Judge.

WILKEY, Circuit Judge:

In this petition for review, ¹ petitioner Commonwealth of Pennsylvania ² requests this Court to set aside the final decision of the Interstate Commerce Commission (hereinafter the ICC or Commission) in Ex Parte No. 261, International Joint Rates and Through Routes. ³ In this decision, which represents the culmination of nearly seven years of Commission activity in this subject area, ⁴ the ICC prescribed rules requiring the filing of voluntarily established joint through rates ⁵ for international transportation participated in by both domestic rail, motor, or water carriers regulated by the ICC and ocean carriers regulated by the Federal Maritime Commission (hereinafter FMC). ⁶ These ICC rules require a separate statement of the inland and ocean portion of the joint through rate, with the ICC limiting its substantive regulation of the single factor joint land/ocean rate to the domestic portion only. ⁷

Petitioner challenges the rules issued in Ex Parte No. 261 on two grounds. First, petitioner contends that the ICC lacks jurisdiction to accept the joint through rates for filing. Second, petitioner challenges the Commission's decision to limit its substantive regulation to that portion of the single factor rate accruing to the domestic rail, water, or motor carriers. Finding no merit in either of the arguments put forth by petitioner to support its challenge to the Commission's rules concerning joint international through rates, we affirm the decision of the ICC in Ex Parte No. 261 for the reasons stated herein.

I. FACTUAL AND PROCEDURAL BACKGROUND

A. Definition of Joint Through Rates

In order to understand the action taken by the ICC in Ex Parte No. 261, it is necessary briefly to explain the definition of "joint" and "proportional" through rates and to examine the similarities and differences between these two types of through rates.

A joint through rate is a single charge published by one carrier and concurred in by connecting carriers as the rate that will Proportional rates, on the other hand, are rates published by a single carrier or mode of carrier applicable to that part of a movement of a through shipment which the publishing carrier itself handles. A proportional rate applies only to through shipments having a prior or subsequent movement over the line of another carrier. Like a division of a joint through rate, a proportional rate on a through movement is almost always lower than a carrier's purely "local" rate ¹⁰ between the same two points on its line. Commonly, each participating carrier in a through route separately publishes its own proportional rate; in combination, these separate proportional rates constitute the through rate. Thus, proportional rates closely resemble the divisions of joint through rates. Correspondingly, a combination of proportional rates is similar in purpose and effect to a joint through rate.

                apply on a through movement of cargo from a point of origin on the line of one carrier to a point of destination on the line of the other.  8  Each participating carrier retains a "division" of the joint through rate agreed upon between the carriers.  9  Generally, the divisions of joint through rates between inland carriers who are subject only to ICC regulation are a private matter and are not set forth in tariffs on file with the Commission.  There is, however, no prohibition against the statement of divisions in tariffs filed with the ICC
                

There are, however, important differences between the joint and proportional through rates, and these differences form the basis for petitioner's challenge in this case. In a joint rate with agreed divisions, as opposed to a combination of proportional rates, the total transportation charge is published as a single rate in one tariff, even if the divisions are also stated for other purposes. Joint through rates result in the simplification of, among other things, routing, documentation, and the calculation of charges and billing; this resultant simplification has been put forth as a major advantage of the joint through rate method for filing tariffs. ¹¹ Beyond this level of procedural simplification, however, lies an economic difference between the joint and proportional through rate concepts which is central to petitioner's case.

Generally, a joint through rate is lower than the sum of the purely local rates separately published by each participating carrier. Similarly, divisions of joint rates are generally lower than the corresponding local rate. Proportional rates and the combinations thereof can and often do produce the same results. In theory, each proportional rate can be approximately the same as the corresponding division of a joint rate; in many contexts, this is indeed the case. ¹² In the case of joint rail/ocean through rates (known as "intermodal" or "minibridge" rates) such as are at issue in this case, however, in many instances the joint through rates are lower than the combination of proportional rates which preceded them. ¹³ As a consequence, the joint through rate tariffs have the potential for creating new markets and changing previous patterns of international transportation.

                14  This consequence forms the basis for petitioner's standing to maintain this action.  Petitioner alleges that the new joint through rate tariffs will result in the diversion of business from the Philadelphia port area and therefore cause economic injury in fact to the various port interests.  15  We conclude that this allegation of injury is sufficient to confer standing on the petitioner to seek judicial review of the agency action in Ex Parte No. 261.
                

B. Prior ICC Position on Joint Through Rates

Prior to 1908, carriers regulated by the ICC and unregulated ocean carriers created through routes and through rates in the form of joint through rates agreed upon by the carriers and in the form of combinations of proportional rates. ¹⁶ In its 1908 decision in Cosmopolitan Shipping Co. v. Hamburg-American Packet Co., ¹⁷ the Commission adopted a policy that, since ocean carriers were unregulated, inland domestic carriers would not be permitted to file joint through rates with ocean carriers. After this 1908 decision, through rates continued in the form of combinations of proportional rates. Despite the subsequent enactment of the Shipping Act of 1916, ¹⁸ which subjected ocean carriers to government regulation, the ICC continued to apply its policy of not permitting the filing of joint through rate tariffs. Instead, the inland and ocean carriers filed their respective proportional rates with the ICC and the FMC. Such intermodal proportional through rates have long been upheld as lawful. ¹⁹

C. Basis for the ICC's Change of Policy

In 1968 the Department of Transportation sponsored legislation requiring joint international through rates to be accepted for filing by the ICC and the FMC. ²⁰ It was in connection with the Congressional consideration of this legislation that the ICC reviewed the position it had taken in its 1908 decision in Cosmopolitan Shipping Co. with respect to joint through...