Food Marketing Institute v. I. C. C., No. 77-1763

CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)
Writing for the CourtBefore McGOWAN and TAMM; McGOWAN
Citation587 F.2d 1285,190 U.S.App.D.C. 388
Decision Date17 October 1978
Docket NumberNo. 77-1763
PartiesFOOD MARKETING INSTITUTE and Eastern Meat Packers Association, and Colorado Meat Dealers Association, Petitioners, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents, Curtis, Inc., Southern Motor Carriers Rate Conference, Inc., Coldway Food Express, Inc., Colonial Refrigerated Transportation, Inc., Rowley Interstate Transportation Co., Inc., Subler Transfer, Inc., Watkins Motor Lines, Inc., Clay Hyder Trucking, Inc., Central & Southern Truck Lines, Inc., Altruk Freight System, Inc., Bonney Motor Express, Inc., Refrigerated Transport Co., Inc., Intervenors.

Page 1285

587 F.2d 1285
190 U.S.App.D.C. 388
FOOD MARKETING INSTITUTE and Eastern Meat Packers
Association, and Colorado Meat Dealers
Association, Petitioners,
v.
INTERSTATE COMMERCE COMMISSION and United States of America,
Respondents,
Curtis, Inc., Southern Motor Carriers Rate Conference, Inc.,
Coldway Food Express, Inc., Colonial Refrigerated
Transportation, Inc., Rowley Interstate Transportation Co.,
Inc., Subler Transfer, Inc., Watkins Motor Lines, Inc., Clay
Hyder Trucking, Inc., Central & Southern Truck Lines, Inc.,
Altruk Freight System, Inc., Bonney Motor Express, Inc.,
Refrigerated Transport Co., Inc., Intervenors.
No. 77-1763.
United States Court of Appeals,
District of Columbia Circuit.
Argued Sept. 22, 1978.
Decided Oct. 17, 1978.

Page 1287

Ronald K. Kolins, Washington, D. C., with whom Edwin H. Pewett and Allan I. Mendelsohn, Washington, D. C., were on the brief, for petitioners.

Kenneth P. Kolson, Atty., I.C.C., Washington, D. C., with whom Mark L. Evans, Gen. Counsel, Frederick W. Read, III, Associate Gen. Counsel, I.C.C., John J. Powers, III, and Robert Wiggers, Attys., Dept. of Justice, Washington, D. C., were on the brief, for respondents.

Paul M. Daniell, Atlanta, Ga., a member of the bar of the Supreme Court of Georgia, by special leave of the Court pro hoc vice, with whom E. Stephen Heisley, Elizabeth A. Purcell, Marshall Kragen and Lester R. Gutman, Washington, D. C., were on the brief, for intervenors, Coldway Food Express, Inc., et al.

Bruce E. Mitchell and Richard M. Tettelbaum, Atlanta, Ga., were on the brief, for intervenor, Refrigerated Transport Co., Inc.

Jeffrey Kohlman, Atlanta, Ga., was on the brief, for intervenor, Southern Motor Carriers Rate Conference, Inc.

Richard A. Peterson, Lincoln, Neb., entered an appearance for intervenor, Curtis, Inc.

Robert L. Thompson, Atty., U. S. Dept. of Justice, Washington, D. C., entered an appearance for respondent, United States of America.

Before McGOWAN and TAMM, Circuit Judges, and GREEN, * United States District Judge for the District of Columbia.

Opinion for the Court filed by Circuit Judge McGOWAN.

McGOWAN, Circuit Judge:

Petitioners in this direct review proceeding challenge a report and order of the Interstate Commerce Commission entered on remand from a previous decision of this court, National Association of Food Chains, Inc. v. ICC, 175 U.S.App.D.C. 346, 535 F.2d 1308 (1976). The ultimate issue for decision here is whether motor common carriers of loose and carcass meats must offer the service of unloading as part of their tariffs.

I

Petitioner Food Marketing Institute is a nonprofit trade association of food wholesalers and retailers. 1 The other petitioners, Eastern Meat Packers Association and Colorado Meat Dealers Association, are trade associations of independent meat packers. The intervenors are motor common carriers that transport loose and carcass meats pursuant to certificate authority of the Commission. 2

The prior history of this case is summarized in Nat'l Ass'n of Food Chains, supra, and will be recapitulated only briefly here. Beginning in 1958, a number of carriers filed tariffs providing for unloading services of loose and carcass meats. 3 In 1968, thirty-two carriers filed tariffs that eliminated all carrier unloading. These tariffs were challenged by shippers and consignees, and there followed a complex series of administrative and judicial proceedings, during the course of which the proposed tariffs were allowed to become effective. The present controversy was seeded by a 1972 decision by Administrative Law Judge David H. Allard that carrier unloading had become sufficiently established as a trade practice to bar its cancellation by the carriers. Unloading Restrictions on Meats and

Page 1288

Packinghouse Products, I.C.C. Doc. No. 35,054 (Jan. 17, 1972).

On October 18, 1974, the Commission substantially affirmed Judge Allard's decision. Unloading Restrictions on Meats and Packinghouse Products, 346 I.C.C. 775 (1974) (1974 Order ). The Commission first formulated a general analytical approach to determining a carrier's obligation to provide unloading services. See text accompanying note 12 Infra. Applying this analysis, the Commission concluded that there was a demonstrated commercial need for unloading services and that the carriers' reasons for desiring to terminate the service were insufficient in light of the hardship that would be caused some consignees and shippers. 346 I.C.C. at 793-94.

On March 14, 1975, however, the Commission on reconsideration reversed itself as to this issue, 4 holding for the first time that carriers were not obligated to provide unloading services. Unloading Restrictions on Meats and Packinghouse Products, 349 I.C.C. 189 (1975) (1975 Order ). The Commission relied, in large measure, on inferences drawn from another case on its docket, in which three motor carriers proposed to eliminate the unloading service while reducing their line-haul rates. Noting that there had been only one protest to that filing, the Commission concluded that shippers and consignees were willing to accept, as a compromise, a reduction in rates in exchange for loss of the unloading service. 349 I.C.C. at 199.

On direct review, this court vacated and remanded the 1975 Order. National Association of Food Chains, Inc. v. ICC, 175 U.S.App.D.C. 346, 535 F.2d 1308 (1976). The court concluded that the order under review was the product of informal rulemaking, to be reviewed under the "rational basis" test, 5 but found the order defective even under this relatively lenient standard. The Commission's principal error, according to the court, was its inference from the lack of protests in another docket that shippers and consignees were willing to acquiesce in the elimination of carrier unloading provided they received a reduction in line-haul rates in exchange. 6 Observing that "(i) t does not appear that any such acquiescence ever existed," 7 the court held that the Commission's inference was not supported by the evidence.

The court proceeded to analyze three further grounds suggested as support for the Commission's decision. One was the argument, accepted by the Commission for the first time in its 1975 Order, that consignee unloading had in fact been the prevalent trade practice through the years. The court observed that this conclusion, if supported by the evidence, would provide sufficient support for a consignee-unloading rule, but found that the Commission had not demonstrated a rational basis for its conclusion. 8 The second and third possible grounds were abusive practices toward carrier personnel that allegedly occurred at consignees' receiving platforms, and health regulations of various localities that allegedly prohibited unloading of loose and carcass meats by unqualified carrier employees. The court found it unnecessary to decide whether the existence of these abusive practices or restrictive health regulations had been adequately demonstrated: even if there were "substantial factual bases for both considerations, they alone may not justify a decision that all of the carriers were entitled to discontinue unloading services."

Page 1289

9 The flaw in the Commission's analysis of these issues, in the court's view, was its failure to explain why it had deviated from its previous conclusion that the problems of abuses and health regulations could be solved by means other than elimination of the carrier unloading service.

On remand, the Commission adhered to its conclusion that the motor common carriers need not offer the services of unloading loose and carcass meats, Report and Order of the Commission on Further Consideration, Unloading Restrictions on Meats & Packinghouse Products, I.C.C. Doc. No. 35,054 (June 23, 1977) (1977 Order ), and petitioners once again brought the case before this court on direct review.

II

The major thrust of petitioners' challenge is to the Commission's analysis on remand of the evidence of record. Petitioners argue that the Commission's factual conclusions were not supported by the evidence and that the Commission improperly imposed the burden of proof on them rather than on the carrier proponents of the tariffs.

A.

As we have already noted, See text accompanying note 5 Supra, this court in Nat'l Ass'n of Food Chains held that the Commission's determination was to be reviewed under a "rational basis" test. Petitioners argue, however, that this court should now apply the more demanding " substantial evidence" test used to review agency adjudication and formal rulemaking, See Administrative Procedure Act, 5 U.S.C. §§ 556, 557. Their position is that, while the Commission's previous decision resulted in a rule of general applicability, and was therefore the product of informal rulemaking, the order now under review was limited in scope to the particular tariffs at issue and hence should be considered the result of an adjudication.

Our application of the "rational basis" test in Nat'l Ass'n of Food Chains, however, was not based on the fact that the agency decision under review was of general applicability. Rather, we concluded that since the "hearing" required in ratemaking proceedings by the Interstate Commerce Act, 49 U.S.C. § 316(g), was not the equivalent of a hearing for rules "made on the record" under the Administrative Procedure Act, 5 U.S.C. § 553(c), 10 the Commission's decision was the product of informal rulemaking rather than adjudication. 175 U.S.App.D.C. at 351 n.8, 535 F.2d at 1313 n.8. See United States v. Florida East Coast R. Co., 410 U.S. 224, 234-38, 93 S.Ct. 810, 35 L.Ed.2d 223 (1973). This conclusion, of course, was not contingent on the generality of the Commission's decision.

Our review is therefore limited to a determination of whether the Commission's action was "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law . . . ." 5 U.S.C. § 706(2)(A). We must uphold the agency if there...

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33 practice notes
  • Practice and procedure: Patent and trademark cases rules of practice; representation of others before Patent and Trademark Office,
    • United States
    • Federal Register December 12, 2003
    • December 12, 2003
    ...to the administrative record in explaining an initial decision. See, e.g., Food Marketing Institute v. Interstate Commerce Commission, 587 F.2d 1285, 1292, n.20 (D.C. Cir. 1978). In the absence of an appeal to the USPTO Director under Sec. 11.55, the decision of the hearing officer would be......
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    • United States
    • Federal Register December 12, 2003
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    ...to the administrative record in explaining an initial decision. See, e.g., Food Marketing Institute v. Interstate Commerce Commission, 587 F.2d 1285, 1292, n.20 (D.C. Cir. 1978). In the absence of an appeal to the USPTO Director under Sec. 11.55, the decision of the hearing officer would be......
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    • June 26, 1984
    ...believe that FERC's adherence to the old ICC rate base method also demands a reasoned justification. Cf. Food Marketing Institute v. ICC, 587 F.2d 1285, 1290 (D.C.Cir.1978) (courts reviewing agency action after remand should ensure that "genuine reconsideration of the issues" took Thus we t......
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    ...International Detective Serv. v. ICC, 198 U.S.App.D.C. 334, 345 n. 23, 613 F.2d 1067, 1078 n. 23 (1979); Food Marketing Inst. v. ICC, 190 U.S.App.D.C. 388, 393, 587 F.2d 1285, 1290 (1978); American Public Gas Ass'n v. FPC, 186 U.S.App.D.C. 23, 38, 567 F.2d 1016, 1031 (1977), cert. denied, 4......
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31 cases
  • Farmers Union Cent. Exchange, Inc. v. F.E.R.C., MID-AMERICA
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
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    ...believe that FERC's adherence to the old ICC rate base method also demands a reasoned justification. Cf. Food Marketing Institute v. ICC, 587 F.2d 1285, 1290 (D.C.Cir.1978) (courts reviewing agency action after remand should ensure that "genuine reconsideration of the issues" took Thus we t......
  • Aero Mayflower Transit Co., Inc. v. I.C.C., No. 81-1951
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    ...International Detective Serv. v. ICC, 198 U.S.App.D.C. 334, 345 n. 23, 613 F.2d 1067, 1078 n. 23 (1979); Food Marketing Inst. v. ICC, 190 U.S.App.D.C. 388, 393, 587 F.2d 1285, 1290 (1978); American Public Gas Ass'n v. FPC, 186 U.S.App.D.C. 23, 38, 567 F.2d 1016, 1031 (1977), cert. denied, 4......
  • Delta Air Lines, Inc. v. Export-Import Bank of U.S., Civil Action No. 13–0424 RC
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    ...official position of the agency, and the vote further justifies why the Court should consider it here.Food Marketing Institute v. ICC , 587 F.2d 1285 (D.C.Cir.1978), another case on which Plaintiffs rely, also does not compel the Court to ignore Response One. That decision's warning against......
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    ...official position of the agency, and the vote further justifies why the Court should consider it here.Food Marketing Institute v. ICC, 587 F.2d 1285 (D.C.Cir.1978), another case on which Plaintiffs rely, also does not compel the Court to ignore Response One. That decision's warning against ......
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