Minneapolis, Northfield and Southern Ry., Inc. v. I.C.C.

• Decision Date: 14 June 1983
• Docket Number: No. 82-1317,82-1317
• Citation: 707 F.2d 984
• Parties: MINNEAPOLIS, NORTHFIELD AND SOUTHERN RAILWAY, INC., Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents. and Chicago and North Western Transportation Company, Intervenor/Respondent.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 984

707 F.2d 984

MINNEAPOLIS, NORTHFIELD AND SOUTHERN RAILWAY, INC., Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America Respondents and Chicago and North Western Transportation Company Intervenor/Respondent.

No. 82-1317.

United States Court of Appeals Eighth Circuit.

Submitted Nov. 10, 1982.

Decided May 16, 1983.

Rehearing and Rehearing En Banc Denied June 14, 1983.

William F. Baxter, Asst. Atty. Gen., John J. Powers, III, Kenneth P. Kolson, Dept. of Justice, John Broadley, General Counsel, Kathleen M. Dollar, Associate General Counsel, H. Glenn Scammel, I.C.C., Washington, D.C., for I.C.C. and United States.

Louis T. Duerinck, Stuart F. Gassner, Anne E. Keating, Chicago, Ill., for intervenor/respondent, Chicago and North Western Transp. Co.

Faegre & Benson, Gordon G. Busdicker, Gordon B. Conn, Jr., Minneapolis, Minn., for petitioner.

Before ARNOLD, Circuit Judge, HENLEY, Senior Circuit Judge, and DUMBAULD, ^* Senior District Judge.

HENLEY, Senior Circuit Judge.

A provision of the Revised Interstate Commerce Act, added by the Staggers Rail Act of 1980, permits a rail carrier to cancel the application of certain joint rates, ¹ in the absence of a statutorily prescribed demonstration by another participating carrier, "notwithstanding any other provision of this title, any prior agreement in effect on the effective date of the [statute], or any requirement of the Commission." 49 U.S.C. Sec. 10705a(c)(1). Pursuant to this provision, intervenor Chicago and North Western Transportation Company (CNW) filed supplemental tariffs canceling specified joint rates with petitioner Minneapolis, Northfield and Southern Railway, Inc. (MNS). Respondent Interstate Commerce Commission (ICC) declined to investigate the tariffs, and the cancellations became effective as scheduled. On this appeal, MNS challenges the agency's refusal to investigate. We affirm the decision of the Commission.

I

The tariffs which form the basis of this dispute were filed with the Commission in October of 1981. Acting pursuant to section 10705a(c)(1), CNW sought through these supplemental filings to eliminate its participation in existing joint rates applicable to shipments of lumber routed via MNS and CNW from Minneapolis through Chicago, Kansas City and East St. Louis to points beyond. The cancellations were scheduled to become effective December 12, 1981.

MNS filed a protest with the ICC challenging the supplemental tariffs in late November, 1981. In essence, the railroad urged that the proposed cancellations were anticompetitive and violative of a prior stipulation between MNS and CNW approved by the ICC in 1968. It further argued that to the extent section 10705a(c) permitted CNW to unilaterally cancel the joint rates in question, that provision amounted to an unconstitutional impairment of contractual obligations, in violation of the due process and contracts clauses of the Constitution. MNS requested that the Commission either rescind the attempted cancellations or suspend them and conduct an investigation as required under 49 U.S.C. Sec. 10705a(i).

After extending the effective date of the cancellations to January 12, 1982, CNW filed a response to the protest. On January 7, one day after CNW's response was filed, the Suspension Board of the ICC voted neither to suspend nor to investigate the cancellations. Division 1 of the Commission, acting as an appellate division, denied MNS's administrative appeal on January 11; the proposed cancellations became effective the following day and have remained in effect since that time. MNS then initiated this appeal.

II

The threshold question we must address concerns the reviewability of the Commission's decision not to investigate the challenged cancellations under section 10705a(i)(1). Focusing upon numerous prior decisions finding ICC suspension actions nonreviewable, both the agency and CNW initially suggest that the Commission's refusal to investigate the supplemental tariffs in this case is outside our power to review.

It is now settled that ICC decisions relating to the suspension or investigation of tariffs under section 10707, being nonfinal orders committed to agency discretion, are not reviewable by the courts of appeals. See, e.g., Southern Railway v. Seaboard Allied Mining Corp., 442 U.S. 444, 99 S.Ct. 2388, 60 L.Ed.2d 1017 (1979); Aberdeen & Rockfish Railroad v. Students Challenging Regulatory Agency Procedures, 422 U.S. 289, 95 S.Ct. 2336, 45 L.Ed.2d 191 (1975); Arrow Transportation Co. v. Southern Railway Co., 372 U.S. 658, 83 S.Ct. 984, 10 L.Ed.2d 52 (1963); Midwest Packers Traffic Association v. ICC, 579 F.2d 473, 474 (8th Cir.1978). Utilizing this reasoning in the context of the Staggers Act, Commission decisions not to suspend a surcharge or reject a proposed tariff filing have also been held nonreviewable. Aberdeen & Rockfish Railroad Co. v. United States, 664 F.2d 41, 43-45 (5th Cir.1981) (decision not to reject proposed tariff filing pursuant to section 10762(e)); Mississippi Public Service Commission v. ICC, 662 F.2d 314, 316-19 (5th Cir.1981) (decision not to suspend surcharge pursuant to either section 10705a(b)(3)(A) or 10705a(b)(6)). The question whether a decision against investigation under section 10705a(i)(1) may be reviewed, however, apparently has not been directly answered. ²

A

Judicial review of a Commission decision not to investigate a cancellation under section 10705a(i)(1) may be precluded if the applicable statute, taken as a whole and in light of its legislative history, evidences an intent that judicial review be eliminated. See Seaboard Allied, 442 U.S. at 454-62, 99 S.Ct. at 2394-2398; see generally 5 B. Mezines, J. Stein & J. Gruff, Administrative Law ch. 44 (1983). We, of course, look to the statutory scheme and we are guided by certain general principles. "Judicial review of final agency action by an aggrieved person will not be cut off unless there is persuasive reason to believe that such was the purpose of Congress." Morris v. Gressette, 432 U.S. 491, 501, 97 S.Ct. 2411, 2418, 53 L.Ed.2d 506 (1977) (quoting Abbott Laboratories v. Gardner, 387 U.S. 136, 140, 87 S.Ct. 1507, 1510, 18 L.Ed.2d 681 (1967)). "[T]he ultimate analysis is always one of Congress' intent," Seaboard Allied, 442 U.S. at 454, 99 S.Ct. at 2394, and "only upon a showing of 'clear and convincing evidence' of a contrary legislative intent should the courts restrict access to judicial review." Abbott Laboratories, 387 U.S. at 141, 87 S.Ct. at 1511. Applying these principles in the present case, we are convinced Congress did not intend to prohibit judicial review of a Commission refusal to investigate a cancellation under section 10705a(i)(1).

The Commission's investigatory power under section 10705a(i)(1) is cast in mandatory terms. The provision states that

[w]henever a class III rail carrier, in a protest filed with the Commission, makes a prima facie showing that ... the cancellation of the application of a joint rate under subsection (c) of this section will have an adverse effect on competition, the Commission shall investigate such protest.

(Emphasis supplied.) In contrast, Commission suspension and investigation decisions which have been found nonreviewable have as their statutory source provisions "written in the language of permission and discretion." Seaboard Allied, 442 U.S. at 455, 99 S.Ct. at 2394 (Commission authorization to investigate alleged illegality of rates, which provided that "the Commission may, upon the complaint of an interested party or on its own initiative, order a hearing concerning the lawfulness of [a] rate [which] hearing may be conducted without answer or other formal pleading ...." (emphasis supplied)); Aberdeen & Rockfish Railroad Co., 664 F.2d at 43 (statutory authorization for Commission rejection of tariff, which provided that the "Commission may reject a tariff submitted to it" (emphasis supplied)); cf. Southern Railway Co. v. ICC, 681 F.2d 29, 33 (D.C.Cir.1982) (suggesting that by using mandatory language in the Staggers Act, in contrast to the permissive language found in section 10707, Congress may have created judicially reviewable duties in the ICC) (dictum).

Moreover, in mandating that an investigation "shall" be undertaken "[w]henever a class III rail carrier ... makes a prima facie showing that ... the cancellation ... will have an adverse effect on competition," Congress has provided a guideline for both the Commission in determining whether an investigation must be made and the courts in reviewing that determination. The presence of this statutory standard also supports the conclusion that judicial review is available. Cf. Seaboard Allied, 442 U.S. at 455-56, 99 S.Ct. at 2394-2395 (absence of factors to guide agency's decision, and the court's review of that decision, militates against availability of judicial review).

That Congress contemplated judicial review of Commission decisions not to investigate under section 10705a(i)(1) is further indicated by the structure of the Act. As the Supreme Court has observed, "Congress did not use permissive language ... when it wished to create reviewable duties under the Act. Instead, it used mandatory language, and it typically included standards to guide both the Commission in exercising its authority and the courts in reviewing that exercise." Seaboard Allied, 442 U.S. at 456, 99 S.Ct. at 2395. The use of mandatory language with respect to Commission investigations pursuant to section 10705a(i)(1) and the inclusion therein of a standard for Commission action, when viewed in light of the entire statute, serves as strong evidence that judicial review of the agency's refusal to investigate was not to be precluded.

The nature of the remedy provided by section 10705a(i)(1) also weighs in favor of judicial review. This enactment reflects congressional concern that the surcharge and cancellation provisions of section 10705a not be used by larger carriers...