Farmers Export Co. v. U.S.

• Decision Date: 05 April 1985
• Docket Number: No. 83-2306,83-2306
• Citation: 244 U.S.App.D.C. 413,758 F.2d 733
• Parties: FARMERS EXPORT COMPANY, Petitioner, v. UNITED STATES of America and Interstate Commerce Commission, Respondents, Atchison, Topeka and Santa Fe Railway Co., et al., Intervenors.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 733

758 F.2d 733

244 U.S.App.D.C. 413

FARMERS EXPORT COMPANY, Petitioner, v. UNITED STATES of America and Interstate Commerce Commission Respondents Atchison, Topeka and Santa Fe Railway Co., et al., Intervenors.

No. 83-2306.

United States Court of Appeals District of Columbia Circuit.

Argued Sept. 28, 1984.

Decided April 5, 1985.

As Amended April 5, 1985.

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

Richard S.M. Emrich, Chicago, Ill., for petitioner.

Charles Alan Stark, Atty. I.C.C., Washington, D.C., with whom J. Paul McGrath, Asst. Atty. Gen., John Broadley, Gen. Counsel, Lawrence H. Richmond, Deputy Associate Gen. Counsel, I.C.C., John J. Powers, III and Andrea Limmer, Attys., Dept. of Justice, Washington, D.C., were on the brief, for respondents.

Guy Vitello, Chicago, Ill., with whom Richard E. Weicher, Chicago, Ill., and Michael E. Roper, Dallas, Tex., were on the brief, for intervenors Atchison, Topeka and Santa Fe Railway Co., et al., Robert B. Batchelder, Omaha, Neb., also entered an appearance for intervenors.

Before BORK and SCALIA, Circuit Judges, and GASCH, District Judge. ^*

Opinion for the Court filed by Circuit Judge BORK.

BORK, Circuit Judge:

Petitioner, Farmers Export Company ("FEC"), appeals from the refusal of the Interstate Commerce Commission ("ICC") to reopen and reconsider two decisions. The first, dated April 3, 1981, is said by FEC to contain a material error that mistakenly limited the number of railroad cars for which demurrage refunds could be recovered by FEC from five railroads. ¹ The second decision, dated May 7, 1981, used a method for calculation of interest on the refund received that did not take into account fluctuations in the prevailing rate of interest over time and is claimed to have denied FEC an equitable recovery. We accept jurisdiction pursuant to 28 U.S.C. Secs. 2321(a), 2342(5) (1982) to hear the interest question and affirm the Commission. We decline jurisdiction as to the demurrage refund issue since we find the refusal to reopen not final.

I.

FEC is a farmer cooperative dealing in the export of grain. On December 27, 1977, an explosion rendered FEC's Galveston, Texas, grain elevator permanently inoperable. At the time of the explosion, 519 rail cars were waiting to be unloaded, and approximately 1,174 additional cars were en route to the elevator. ² Under ICC rules, FEC was required to pay a demurrage charge of $481,790 on the cars detained at Galveston.

Demurrage charges are imposed on shippers and receivers when they detain rail cars beyond a specified period of "freetime." ³ Dana Corp. v. ICC, 703 F.2d 1297, 1303 (D.C.Cir.1983). These charges consist of two elements: (1) compensation to the carrier for use of its rail car, and (2) a penalty to act as an incentive to return the car promptly to common carriage service. Id. If the shipper can show "that it was not the proximate cause of the detention and that it exercised due diligence in releasing or attempting to release the railroad equipment" promptly, the penalty portion of the demurrage charge should be refunded to the shipper. Prince Manufacturing Co. v. Norfolk & Western Ry., 356 I.C.C. 702, 705 (1978). The portion of the demurrage charge in excess of the railroad's per diem charge plus 20% for incidental expenses is deemed to be the penalty amount. Prince Manufacturing, 356 I.C.C. at 708; Ormet Corp. v. Illinois Central R.R., 341 I.C.C. 647, 651 (1972).

FEC filed a complaint with the Commission on September 11, 1978 seeking, it says, refund of the penalty portion on all the cars detained at its Galveston elevator. Joint Appendix ("J.A.") at 1. The ICC, in a decision dated April 3, 1981, awarded a refund, but construed the complaint as seeking a refund only for cars arriving after the explosion. The Commission's order stated that,

[FEC] here seeks relief only from the penalty portion of demurrage accruing on cars arriving at Galveston after the explosion....

Farmers Export Co. v. Atchison, Topeka & Santa Fe Ry., 364 I.C.C. 831, 836 (1981) (emphasis in original). The Commission then ordered that,

[d]efendants should remit to complainant the penalty portion of demurrage charges collected from the complainant.

Id. at 838.

According to FEC, the ICC ruling granting only a refund for after-arriving cars resulted from a misreading of FEC's complaint, an oversight, or a typographical error. Instead of petitioning to reopen the case to amend the opinion, FEC decided to negotiate the matter with the railroads. The railroads, however, appealed the award to the United States Court of Appeals for the Seventh Circuit. They argued that a proportion of the demurrage was bound to accrue on the cars arriving after the explosion due to pre-existing congestion and therefore should not be refunded. FEC intervened on behalf of the Commission arguing that the Commission's award to it was proper but made no mention of the Commission's alleged error in limiting the penalty refund to after-arrived cars. The court upheld the Commission's ruling stating that,

[a]lthough it might be that the Commission could itself adopt such a proportional rule, we cannot say that it was compelled to do so in this case in which the refund pertains only to penalty demurrage accruing on cars arriving at Galveston after the explosion.

Atchison, Topeka & Santa Fe Ry. v. ICC, 687 F.2d 912, 917 (7th Cir.1982) (emphasis added).

Following the Seventh Circuit's decision the railroads agreed to refund the penalty portion of the demurrage only on the cars arriving after the explosion. It being too late to appeal from the Commission's order directly, on September 29, 1982, FEC petitioned the ICC to reopen its April 3, 1981, decision in order to correct the alleged mistake and allow a refund for all cars regardless of arrival date. J.A. at 265. On October 5, 1981, FEC petitioned to reopen the Commission's May 7, 1981, decision that limited the interest award on the refund. Id. at 219. The Commission, operating with only four of its seven members, was unable to agree on the disposition of the demurrage refund petition. The Commission, however, unanimously refused to reopen the case to revise the method used to calculate interest on the award. This petition followed.

II.

This case is before us on appeal from the Commission's refusal to reopen the April 3, 1981, and May 7, 1981, decisions and not from those decisions themselves. The latter are not now open to review by this court, the time for appealing them having long since passed. ⁴ The Commission contends that the present petition is merely a collateral attack designed to circumvent the finality of the original agency decisions. We do not decide that question because we find the Commission's refusal to reopen the demurrage refund decision not final and, therefore, not reviewable.

In its consideration of FEC's September 29, 1982 petition to reopen, the Commission, with only four of seven seats occupied, divided 2 to 2 and stated,

[t]he Commission failed to reach a majority decision on the disposition of this petition. Accordingly, the proceeding will not be reopened on these grounds.

Farmers Export Co. v. Atchison, Topeka & Santa Fe Ry., No. 37017, at 4 (I.C.C. Nov. 4, 1983); J.A. at 332. This court has previously held that a tie vote by the Commission is not final action since there can be no final decision where a majority of the Commission has failed to agree on the merits of the petition. National Association of Recycling Industries v. ICC, 704 F.2d 638, 640 (D.C.Cir.1983); New York Dock Ry. v. United States, 696 F.2d 32, 34 (2d Cir.1982).

By failing to reach a decision on the merits the Commission's decision does not impose an obligation, deny a right, or fix any legal relationship. FTC v. Standard Oil Co. of California, 449 U.S. 232, 241-43, 101 S.Ct. 488, 493-95, 66 L.Ed.2d 416 (1980); Port of Boston Marine Terminal Association v. Rederiaktiebolaget Transatlantic, 400 U.S. 62, 71, 91 S.Ct. 203, 209, 27 L.Ed.2d 203 (1970); ICC v. Atlantic Coast Line R.R., 383 U.S. 576, 602, 86 S.Ct. 1000, 1015, 16 L.Ed.2d 109 (1966); Intercity Transportation Co. v. United States, 737 F.2d 103, 106 (D.C.Cir.1984). FEC argues that the tie vote fixes the legal relationship by leaving the April 3, 1981, decision intact. Reply Brief of Petitioner at 6. This is certainly not so. The legal relationship in that decision was fixed long before the petition at issue here was filed. The only conclusion to be drawn, therefore, is that the Commission has not definitively acted on FEC's request to reopen and no decision of the Commission timely contested by FEC was left intact as a direct result of this tie vote. Cf. Ford Motor Co. v. ICC, 714 F.2d 1157, 1163 (D.C.Cir.1983) (full Commission's divided vote left the decision of a lower Division as the Commission's final judgment).

FEC argues that the Commission's failure to act is final and reviewable. Reply Brief of Petitioner at 6, 9. In certain circumstances agency inaction may have the same effect, and be treated, as a final decision. E.g., Environmental Defense Fund, Inc. v. Hardin, 428 F.2d 1093, 1099 (D.C.Cir.1970). A tie vote that could not be broken in the foreseeable future might conceivably be treated as reviewable. We need not decide that because this case does not present such a situation. The ICC now has a full membership of seven commissioners and a final decision appears to be available to FEC. ⁵ If FEC petitions once more, as the Commission's rules allow, 49 C.F.R. Sec. 1115.4 (1984), the Commission states that it will entertain the motion. It is thus evident that the tie vote here does not have "the same impact on the rights of the parties as denial of relief." Id.

We hold, therefore, that the Commission's tie vote is not final.

III.

The Commission unanimously denied FEC's petition to reopen the decision denying its claim for recalculation of interest. Petitions to reopen previously final agency...