Cross-Sound Ferry Services, Inc. v. I.C.C.

• Decision Date: 10 May 1991
• Docket Number: No. 90-1053,CROSS-SOUND,90-1053
• Citation: 290 U.S. App. D.C. 39,934 F.2d 327
• Parties: FERRY SERVICES, INC., Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents, and Viking Starship, Inc., Intervenor.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 327

934 F.2d 327

290 U.S.App.D.C. 39

CROSS-SOUND FERRY SERVICES, INC., Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America Respondents and Viking Starship, Inc., Intervenor.

No. 90-1053.

United States Court of Appeals, District of Columbia Circuit.

Argued Nov. 28, 1990.

Decided May 10, 1991.

Petition for Review of an Order of the Interstate Commerce commission.

Eugene D. Gulland, for petitioner.

Craig M. Keats, Atty., I.C.C., with whom Robert S. Burk, Gen. Counsel, Henri F. Rush, Deputy Gen. Counsel and Evelyn G. Kitay, Atty., I.C.C., and James F. Rill, Asst. Atty. Gen., Catherine G. O'Sullivan and David Seidman, Attys., Dept. of Justice, were on the brief, for respondents.

Edward D. Greenberg and Mark T. Priesing were on the brief, for intervenor.

Before MIKVA, Chief Judge, WILLIAMS and THOMAS, Circuit Judges.

Opinion for the Court filed by Chief Judge MIKVA.

Opinion concurring in part and concurring in the denial of the petition for review filed by Circuit Judge CLARENCE THOMAS.

MIKVA, Chief Judge:

In this case, we revisit the propriety of the Interstate Commerce Commission's ("ICC" or the "Commission") finding that certain water carrier services provided by intervenor Viking Starship, Inc. ("Viking") are ferry services exempt from ICC regulation. In Cross-Sound Ferry Servs., Inc. v. ICC, 873 F.2d 395 (D.C.Cir.1989) [hereinafter Cross-Sound I ], we remanded for further clarification of the Commission's views as to the scope of the ferry exemption. After reviewing the Commission's decision on remand, Viking Starship, Inc., Common Carrier Application, 6 I.C.C.2d 228 (1989) [hereinafter Viking II ], and the contentions of petitioner Cross-Sound Ferry Services, Inc. ("Cross-Sound"), we conclude that the Commission has not changed its policy with respect to the ferry exemption. Accordingly, we uphold the Commission's finding that Viking is an exempt ferry service, and reject Cross-Sound's procedural challenges to the Commission's decisionmaking process. In addition, we find that the Commission's decision did not trigger environmental review responsibilities under the National Environmental Policy Act or the Coastal Zone Management Act.

I.

In 1988, the Commission granted Viking temporary authority to transport passengers over two routes in Long Island Sound: (1) Montauk, New York to Groton/New London, Connecticut, and 2) Montauk to Block Island, Rhode Island. See Cross-Sound I, 873 F.2d at 396 (describing statutory basis for temporary authorizations). Relying on a provision of the Interstate Commerce Act that declares transportation provided "by a ferry" to be exempt from the Commission's jurisdiction, see 49 U.S.C. Sec. 10544(a)(4) (1988), Viking subsequently asked the Commission to dismiss its application for a permanent license on the ground that its operations are exempt ferry services. Cross-Sound, which transports passengers, automobiles, and freight between Orient Point, New York and New London, challenged Viking's claim, but, as detailed in Cross-Sound I, 873 F.2d at 396-400, the Commission agreed with Viking that its operations are exempt. See Viking Starship, Inc.--Common Carrier Application, 4 I.C.C.2d 634 (1988) [hereinafter Viking I ].

Reviewing Viking I, we acknowledged the Commission's "great latitude in determining the scope of the ferry exemption," Cross-Sound I, 873 F.2d at 398, but found ourselves unable to discern the Commission's interpretation. Id. at 400. We noted several ICC decisions asserting jurisdiction over apparently similar Long Island Sound routes, and suggested that the discrepancy between those cases and the Viking decision were "prima facie evidence of a change in ICC policy." Id. at 399. In addition, we expressed uncertainty about the significance of various factors the Commission uses to determine whether the ferry exemption applies, such as the length and directness of a carrier's route and the frequency of service. Id. at 399-400. Given these perceived ambiguities, we remanded "for a fuller exegesis of the Commission's views." Id. at 396.

Although it acknowledged on remand that prior decisions may have misconstrued the significance of certain factors flagged by the court in Cross-Sound I, see Viking II, 6 I.C.C.2d at 237 (referring to role of absolute distance), the Commission denied changing its view of the ferry exemption, id. at 233 n. 8. It distinguished the Long Island Sound cases we cited in our panel opinion, id., and explained in greater detail the factors it uses to determine what constitutes a ferry, id. at 235-40. After discussing the general contours of the ferry exemption, the Commission specifically reaffirmed its earlier finding that Viking's services qualify as exempt ferriage under section 10544(a)(4). Id. at 241-46. In addition, the Commission rejected Cross-Sound's claim that a decision exempting Viking from the Commission's jurisdiction nonetheless obligated the ICC to comply with environmental review procedures under the National Environmental Policy Act and the Coastal Zone Management Act. Id. at 246-49.

II.

In order to determine whether the Commission has complied with our mandate in Cross-Sound I, we must evaluate the sufficiency of the Commission's explanations in Viking II as to the scope of the ferry exemption. If we find that the ICC's current view of the ferry exemption "diverge[s] from agency precedent," then, in order to uphold the new interpretation, we must also find that the Commission "suppl[ied] a reasoned analysis indicating that prior policies and standards are being deliberately changed, not casually ignored." See Hall v. McLaughlin, 864 F.2d 868, 872 (D.C.Cir.1989) (quoting Greater Boston Television Corp. v. FCC, 444 F.2d 841, 852 (D.C.Cir.1970), cert. denied, 403 U.S. 923, 91 S.Ct. 2233, 29 L.Ed.2d 701 (1971)); see also Motor Vehicle Mfrs. Ass'n v. State Farm Mutual Auto. Ins. Co., 463 U.S. 29, 57, 103 S.Ct. 2856, 2874, 77 L.Ed.2d 443 (1983). If, on the other hand, we determine that the Commission "has not in fact diverged from past decisions, [then] the need for a comprehensive and explicit statement of its current rationale is less pressing." Hall, 864 F.2d at 872. The agency's explanation in such a case "need not be elaborate"; we will uphold its findings, "though of less than ideal clarity, if the agency's path may reasonably be discerned." Id. at 872-73 (quoting Greater Boston Television, 444 F.2d at 851).

Petitioner contends that our opinion in Cross-Sound I conclusively determined that the agency had changed its policy with respect to the ferry exemption. We decline, however, to adopt so narrow a view of our earlier holding. We remanded the Commission's decision in Viking I precisely because we were unsure what its interpretation of the ferry exemption was, see Cross-Sound I, 873 F.2d at 400; it would be inappropriate to let our earlier expressions of puzzlement prevent a subsequent panel from evaluating the Commission's newly tendered explanations de novo. Reviewing the Viking II decision, we conclude that the Commission has not diverged from prior precedent.

First, we believe that the Commission persuasively distinguished those cases where it has exercised jurisdiction over water carriers operating in Long Island Sound. As the Commission explained in Viking II, 6 I.C.C.2d at 233 n. 8, three of the examples that we cited in Cross-Sound I as "prima facie evidence of a change in ICC policy," 873 F.2d at 398-99, involved the transportation not only of passengers but also of freight, a subject area over which the Commission has long exercised jurisdiction. See Mascony Transport and Ferry Servs., Inc., 353 I.C.C. 60, 61 (1976), petition for review denied sub nom Cross-Sound Ferry Servs., Inc. v. U.S., 573 F.2d 725 (2d Cir.1978) (applicant sought to transport "general commodities and passengers" between New London and Greenport, New York); Cross-Sound Ferry Servs., Inc.--Extension, ICC Docket No. W-1290 (Sept. 23, 1983) (applicant sought to transport "passengers, general commodities, automobiles with passengers, and tractors, trailers, and trucks" between New London and Montauk); and B.I. Marine Express, Inc., ICC Docket No. W-1450 (Oct. 14, 1986) (applicant proposed to transport "both passengers and general freight" between Westerly, Rhode Island and Block Island).

Indeed, the Commission has repeatedly held that "the word ferry does not generally include the transportation of goods and merchandise," McAllister Bros., Inc.--Investigation of Control, 336 I.C.C. 590, 592-93 (1970), and has refused to exempt freight carriers from regulation simply because the passenger aspect of their operation, viewed in isolation, might qualify as a "ferry." Id. at 593-94 (finding that carrier authorized to transport passengers and general commodities between Bridgeport, Connecticut and Port Jefferson, New York was not an exempt ferry, even though carrier had apparently never exercised its freight authority). See also B.I. Marine Express, ICC Docket No. W-1450 ("ferry service ... entails the transportation of passengers, their automobiles, and accompanying baggage, but does not involve the transportation of general freight"); Ann Arbor R.R. Co. Common Carrier Application, 250 I.C.C. 490, 491 (1942). The Supreme Court has interpreted the term "ferry" as excluding freight services, see St. Clair County v. Interstate Sand and Car Transfer Co., 192 U.S. 454, 467, 24 S.Ct. 300, 304, 48 L.Ed. 518 (1904) (noting that "the ferry business is confined to the transportation of persons with or without their property"), as have various federal regulations. See, e.g., 46 CFR Sec. 171.010(d)(2) (1990) (Coast Guard safety regulations); 49 CFR Sec. 171.8 (1989) (hazardous materials transportation).

Although its efforts to distinguish the fourth example of Long Island Sound water carrier regulation that we cited in Cross-Sound I are less persuasive, the Commission's view that Shoreline Boating Serv., Inc., ICC...