Grand Prairie Coop, Inc. v. I.C.C.
| Decision Date | 15 February 1994 |
| Docket Number | Nos. 93-1889,93-2528,s. 93-1889 |
| Citation | 16 F.3d 789 |
| Parties | GRAND PRAIRIE COOP, INC. and Patrick W. Simmons, Petitioners, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents, and Missouri Pacific Railroad Company, Intervening Respondent. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Gordon P. MacDougall, Washington, DC, Carl M. Miller (argued), Miller, Harper & Rorick, New Haven, IN, for petitioners.
Ira H. Raphaelson, Asst. U.S. Atty., Crim. Div., Chicago, IL, Laurence H. Schecker (argued), I.C.C., Office of the General Counsel, William P. Barr, Office of U.S. Atty. Gen., Washington, DC, William Redmond, I.C.C., Compliance & Consumer Assistance, Chicago, IL, Catherine G. O'Sullivan, Andrea Limmer, Dept. of Justice, Civ. Div., Appellate Section, Washington, DC, for respondents in No. 93-1889.
Michael J. Shepard, Asst. U.S. Atty., Crim. Div., Chicago, IL, Robert S. Burk, John J. McCarthy, Laurence H. Schecker (argued), I.C.C., Office of the General Counsel, Janet Reno, U.S. Atty. Gen., John J. Powers, III, John P. Fonte, Dept. of Justice, Antitrust Div., Appellate Section, Washington, DC, Dennis J. Stark, I.C.C., Compliance & Consumer Assistance, Chicago, IL, John W. Clark, Catherine G. O'Sullivan, Andrea Limmer, Dept. of Justice, Civ. Div., Appellate Section, Washington, DC, for respondents in No. 93-2528.
Joseph D. Anthofer (argued), Omaha, NE, for intervenor-respondent.
Before POSNER, Chief Judge, and FLAUM and MANION, Circuit Judges.
A shipper, joined by a representative of railroad workers, challenges two orders by the Interstate Commerce Commission. The first allows the Missouri Pacific Railroad (now a subsidiary of Union Pacific) to abandon a 9.2 mile stretch of line in rural Illinois unless the shipper subsidizes continued operation of the line. 49 U.S.C. Secs. 10903(a), 10905. The second order establishes the method for determining the amount of the subsidy. Missouri Pacific R.R.--Abandonment, 9 I.C.C.2d 875 (1993). The shipper, Grand Prairie, an agricultural cooperative, has two grain elevators on the segment in question and had shipped 100 carloads over it in the first five months of 1991 but none between then and December 1992, when it shipped 15 carloads. It forecast 200 carloads for 1993; the Missouri Pacific forecast only 60. The Commission, reasoning that the experience of one month (December 1992) was insufficient to ground a realistic forecast for an entire year, accepted the lower estimate but added that even if Grand Prairie shipped 100 carloads a year the railroad would lose money when all costs, including opportunity costs, were reckoned in, as the statute requires. Grand Prairie defends its forecast and adds that the Commission calculated Missouri Pacific's costs incorrectly by ignoring the possibility that the railroad could use the crew that would operate the train on the line to operate another train on a different line on the same day, in which event only a part of the wages of the crew should be allocated to the carriage of Grand Prairie's grain.
On the basis of what the Commission knew when it authorized abandonment back in February 1993--the significance of this qualification will become clear shortly--its decision to allow the abandonment of the line was justifiable. The statutory standard, "public convenience and necessity," has been interpreted to require the Commission to compare the cost to the carrier of being required to continue providing service over the line that it wants to abandon with the costs that the shippers and communities served by the line will incur from the loss of railroad service. Colorado v. United States, 271 U.S. 153, 168-70, 46 S.Ct. 452, 456, 70 L.Ed. 878 (1926). Whether that is all there is to the standard is not clear, Illinois v. ICC, 722 F.2d 1341, 1346-47 (7th Cir.1983); Association of American Railroads v. ICC, 846 F.2d 1465, 1467 (D.C.Cir.1988), but it is all there is in this case. The only protester against the abandonment is a single shipper which is not contending either that a loss suffered by it should be weighted more heavily than a loss suffered by the railroad or that more than a simple cost-benefit analysis is required to determine whether abandonment is proper. The shipper's argument rather is that the railroad will suffer no loss from being forced to continue service--will in fact lose money if it is allowed to abandon the segment.
When the only ground of a shipper's opposition to the abandonment of a service is that the service is profitable to the railroad, the Commission is right to be skeptical. The subsidy provision of the statute enables the Commission to make a protesting shipper put its money where its mouth is, though by the same token a railroad that would have no reason to turn away profitable business in the absence of a subsidy provision might threaten abandonment in an effort to extract the subsidy. Even so, the railroad is bound to know better than either a shipper or a government agency whether continued operation of a line would be profitable. As Grand Prairie stresses elsewhere in its submission, it is a small enterprise (its net worth is $6 million, we were told at argument); it is most unlikely to be knowledgeable about the railroad business. In particular its suggestions as to how the railroad might minimize down time for the crew that would be operating the train carrying grain from Grand Prairie's elevators must be taken with a large grain--of salt. As for Grand Prairie's optimistic forecast of its rail shipping needs, it had every reason, when opposing abandonment, to exaggerate those needs; and the Commission was entitled, given the scant use of the line in recent years, to refuse to attach controlling significance to the December figure--especially since Grand Prairie may have shipped those 15 carloads in order to improve its litigating position. In response, Grand Prairie points out that it has become a member of a railroad car pool that enables it to obtain additional cars for the shipment of its grain--the Missouri Pacific had limited it to 50 cars a year--but it does not explain why, when it had access to 50 cars, it used none.
After the Commission approved the abandonment, Grand Prairie wrote a letter to it invoking the subsidy ("offer of financial assistance") provision. 49 U.S.C. Sec. 10905. Buried in the middle of the letter was a brief paragraph asking the Commission to reconsider its decision to allow abandonment in view of the fact that in the previous three months (January through March 1993) Grand Prairie had shipped 104 carloads over the line. True, these were winter months, and in the summer Grand Prairie prefers to ship by barge, which is cheaper. Still, those 104 carloads certainly made Grand Prairie's forecast seem closer to the mark than Missouri Pacific's--which the Commission had accepted. The Commission nevertheless refused to treat Grand Prairie's filing as a petition to reopen the abandonment proceeding, because of its informal character. Grand Prairie argues that this was error.
The statute and the Commission's rules permit the filing of a petition to reopen a proceeding on the basis of newly discovered evidence, 49 U.S.C. Sec. 10327(g)(1); 49 C.F.R. Sec. 1152.25(e)(6), and do not prescribe any particular formalities, corresponding to the elaborate formalities that the Federal Rules of Appellate Procedure and circuit rules prescribe for appellate briefs. Fed.R.App.P. 28; 7th Cir.R. 28. The Commission's rules are not completely standardless, however. The petition "shall state in detail the respects in which the proceeding involves material error, new evidence, or substantially changed circumstances," 49 C.F.R. Sec. 1152.25(e)(6) (emphasis added), a requirement arguably not satisfied by Grand Prairie's letter. The Commission is entitled to considerable latitude in interpreting and applying its own procedural rules, Stinson v. United States, --- U.S. ----, ----, 113 S.Ct. 1913, 1919, 123 L.Ed.2d 598 (1993); Busboom Grain Co. v. ICC, 856 F.2d 790, 792 (7th Cir.1988), and we do not think it abused its discretion in deeming Grand Prairie's petition inadequate. Western Union Telegraph Co. v. FCC, 815 F.2d 1495, 1503 (D.C.Cir.1987); Spanish Int'l Broadcasting Co. v. FCC, 385 F.2d 615, 627-28 (D.C.Cir.1967). Besieged with petitions by shippers opposing abandonments of rail lines, the Commission is not required to view every document it receives with a magnifying glass that might bring into view a request for a particular kind of relief. Since the amount of subsidy is inverse to the amount of traffic expected on a line, the Commission could have understood Grand Prairie's letter to be requesting it to fix a lower subsidy than the facts brought out in the abandonment proceeding might have pointed to, rather than attempting to invoke the Commission's procedure for reopening that proceeding. The Commission had no reason to suppose that it was dealing with some hapless pro se just because the letter invoking the subsidy provision of the statute came from the shipper's manager rather than from a lawyer.
And even if the Commission did act arbitrarily--with studied obtuseness--in failing to construe Grand Prairie's letter as a petition to reopen the abandonment proceeding, there would be no point in our reversing. For Grand Prairie can still file, because there is no time limit, Simmons v. ICC, 784 F.2d 242, 245-46 (7th Cir.1985), a proper petition to reopen the abandonment proceeding on the basis of newly discovered evidence. No one argues that the Missouri Pacific is about to rip up the rails, making time of the essence.
We come to the subsidy issues. There is a specific and a general issue. We start with the former. The Commission believes that a subsidy, to be deemed adequate (and therefore compel the railroad to continue operations over the line it wants to abandon), must fully indemnify the...
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