Consolidated Rail Corporation v. National Association of Recycling Industries, Inc, 80-568
| Decision Date | 26 January 1981 |
| Docket Number | No. 80-568,80-568 |
| Citation | 66 L.Ed.2d 776,449 U.S. 609,101 S.Ct. 775 |
| Parties | CONSOLIDATED RAIL CORPORATION et al. v. NATIONAL ASSOCIATION OF RECYCLING INDUSTRIES, INC., et al |
| Court | U.S. Supreme Court |
Section 204 of the Railroad Revitalization and Regulatory Reform Act of 1976, Pub.L. 94-210, 90 Stat. 40, note following 45 U.S.C. § 793, directed the Interstate Commerce Commission to conduct an investigation to determine whether the rail rate structure for recyclable and competing virgin materials unjustly discriminates against recyclables or whether such rates are unreasonable, and, if found to be so, to require the removal of any such defect from the structure. The Act demonstrated congressional concern that rail rates may have been unjustly impeding the movement of recycled materials in a market of diminishing virgin resources. S.Rep.No. 94-499, p. 51 (1975).
After conducting the investigation required by §§ 204(a)(1) and (2), the Commission concluded that the rail rate structure was neither discriminatory with respect to recyclable materials, nor with few exceptions, unreasonable. Investigation of Freight Rates for the Transportation of Recyclable or Recycled Commodities, 356 I.C.C. 114 (1977). The Court of Appeals for the District of Columbia Circuit reversed, finding that the Commission had applied an overly restrictive definition of "competitive" in assessing whether particular commodities were comparable for purposes of determining discrimination, and that the Commission had improperly shifted the burden of proof from the railroads. National Association of Recycling Industries, Inc. v. ICC, 190 U.S.App.D.C. 118, 585 F.2d 522 (1978). The case was remanded with orders to the Commission to conduct an expedited investigation which would remedy these errors.
On remand, the Commission found that certain recyclable materials were being discriminated against in the rate structure and concluded that, in general, rates for transportation of recyclables were unreasonably high if they produced a revenue-to-variable cost ratio exceeding 180%. The Commission ordered the elimination of all rate discrimination and ordered that rates for recyclable materials which produced revenue in excess of the 180% ratio be reduced accordingly. Investigation of Freight Rates for transportation of Recyclable or Recycled Commodities, 361 I.C.C. 238 (1979). In eliminating the discrimination, the railroads were free to use any combination of raising or lowering rates which would equalize rates for recyclable and competing virgin materials, so long as the resulting rate would not be unreasonable. Investigation of Freight Rates for Transportation of Recyclable or Recycled Commodities, 361 I.C.C. 641 (1979). Under this approach, the railroads could raise the rates for recyclable material and competing virgin material to a level above the previous levels for either commodity, if the new rate did not produce revenue in excess of the 180% ratio.
The Court of Appeals affirmed with respect to the Commission's findings on discrimination. National Association of Recycling Industries, Inc. v. ICC, 201 U.S.App.D.C. 342, 627 F.2d 1328 (1980). However, the court found fault with the scope of the Commission's remedy for eliminating discrimination and with the Commission's failure adequately to justify the 180% ratio as indicative of reasonableness. The court revoked all rate increases for recyclable material put into effect pursuant to those perceived errors and remanded for further proceedings. In a supplementary order, the court made it clear that the central task on remand would be to determine whether the 180% ratio, or some other formula, provided the appropriate standard for determining reasonableness. Until such a standard had been adequately justified, the court enjoined implementation of any rate increase for recyclable material, excepting one caused by a general rate increase.
The railroads sought certiorari, challenging only those aspects of the Court of Appeals' decision which revoked or enjoined rate increases.* The argument is that the lower court...
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