National Ass'n of Recycling Industries, Inc. v. I.C.C.
| Decision Date | 16 October 1978 |
| Docket Number | Nos. 77-1187,77-1193 and 77-1292,s. 77-1187 |
| Citation | 585 F.2d 522,190 U.S.App.D.C. 118 |
| Parties | , 190 U.S.App.D.C. 118, 8 Envtl. L. Rep. 20,653 NATIONAL ASSOCIATION OF RECYCLING INDUSTRIES, INC., Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents, Atchison, Topeka & Santa Fe Railway Company, et al., American Paper Institute, Inc., Aluminum Association, Inc., Fort Howard Paper Company, Eastern Railroads, and Bergstrom Paper Company, et al., Intervenors. NATIONAL ASSOCIATION OF RECYCLING INDUSTRIES, INC., Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents, Atchison, Topeka & Santa Fe Railway Company, et al., and Eastern Railroads, Intervenors. INSTITUTE OF SCRAP IRON AND STEEL, INC., Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents, Northwestern Steel & Wire Company, Eastern Railroads, Atchison, Topeka & Santa Fe Railway Company, et al., and Armco Steel Corporation, Intervenors. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
The Interstate Commerce Commission instituted an investigation into the lawfulness of the rate structures on recyclable and virgin resource materials pursuant to Section 204 of the Railroad Revitalization and Regulatory Reform Act of 1976. After an investigation, the Commission, with three Commissioners dissenting, concluded that the majority of the rates were lawful and declined to order their removal. Petitioners filed petitions to review the Commission's order, claiming that the Commission did not comply with the mandate of Section 204 by, among other things, relieving the railroads of their statutory burden of proof and declining to order removal of unlawful rates on competing recyclable materials. The United States, as statutory respondent, joined in petitioners' challenge to the Commission's order. In a consolidated petition, petitioner also challenged a Commission order terminating two general revenue proceedings conducted during the pendency of the Commission's investigation on the ground that the Commission did not comply with the requirements of the National Environmental Policy Act of 1969. Held : The order of the Commission in its investigation is vacated, and the case remanded for further proceedings consistent with this opinion; the consolidated petition to review is dismissed as untimely filed. 190 U.S.App.D.C. at ---- - ----, 585 F.2d at 524-541.
1. In view of the provisions of Section 204, its legislative history, and the background of congressional concern surrounding its enactment, the Commission's mandate was to investigate rates for recyclable or recycled materials and competing virgin natural resource materials, and to require removal from rate structures of unreasonableness or unjust discrimination; and the Commission was not permitted to assume or defer to asserted revenue needs or to give them greater weight than environmental and energy goals, but was to uphold disparate rate structures only where actually warranted after consideration of all of the transportation characteristics, including the competitive relationships and costs of the materials involved. 190 U.S.App.D.C. at ---- - ----, 585 F.2d at 530-534.
2. On this record, the Commission's order does not represent a reasoned compliance with the mandate of Section 204. 190 U.S.App.D.C. at ---- - ----, 585 F.2d at 534-541.
(a) The Commission did not address or require proof on the focal question whether the substantial rate disparities between recyclable and virgin products are justified by differences in transportation characteristics. 190 U.S.App.D.C. at ---- - ----, 585 F.2d at 535-541.
(b) Several of the Commission's underlying findings and conclusions with respect to the reasonableness and unjust discrimination issues were inconsistent with its mandate and inadequately supported. 190 U.S.App.D.C. at ---- - ----, 585 F.2d at 535-541.
3. The consolidated petition to review, filed in advance of the jurisdictional time limit, must be dismissed as premature. 190 U.S.App.D.C. at ----, --- F.2d at ----.
Petitions for Review of Orders of the Interstate Commerce Commission.
Edward L. Merrigan, Washington, D. C., for petitioner in Nos. 77-1187 and 77-1193 and on the reply brief for intervenor Bergstrom Paper Company Et al. in No. 77-1187.
David Reichert, Cincinnati, Ohio, with whom Howard Gould and Stephen D. Strauss, Cincinnati, Ohio, were on the brief, for petitioner in No. 77-1292.
Kenneth G. Caplan, Atty., I. C. C., Washington, D. C., with whom Robert S. Burk, Deputy Gen. Counsel, and Charles H. White, Jr. and Frederick W. Read, III, Associate Gen. Counsel, I. C. C., Washington, D. C., were on the brief, for respondent I. C. C. Mark L. Evans, Gen. Counsel, and Peter A. Fitzpatrick, Atty., I. C. C., Washington, D. C., also entered appearances for respondent I. C. C.
James F. Ponsoldt, Atty., Dept. of Justice, Washington, D. C., with whom Barry Grossman, Atty., Dept. of Justice, Washington, D. C., was on the brief, for respondent United States of America. Lloyd John Osborn and Carl D. Lawson, Attys., Dept. of Justice, Washington, D. C., also entered appearances for respondent United States of America.
Michael Boudin, Washington, D. C., with whom Charles N. Marshall and Stuart C. Stock, Washington, D. C., were on the brief, for intervenor Southern and Western Railroads.
John F. Donelan, Washington, D. C., with whom John K. Maser, III and Renee D. Rysdahl, Washington, D. C., were on the brief, for intervenors American Paper Institute, Armco Steel Corp., Inland Steel Corp., Republic Steel Corp., and Youngstown Sheet & Tube Co.
John A. Daily, Philadelphia, Pa., with whom Richard W. Kienle was on the brief, for intervenor Eastern Railroads.
Dickson R. Loos, Washington, D. C., was on the brief for intervenor Aluminum Association Inc.
William L. Strauss, was on the brief for intervenor Fort Howard Paper Co.
Warren Price, Jr., Washington, D. C., was on the brief for intervenor Northwestern Steel & Wire Co.
Before WRIGHT, Chief Judge, and SWYGERT * and LEVENTHAL, Circuit Judges.
Opinion for the court filed by J. SKELLY WRIGHT, Chief Judge.
In these consolidated cases 1 we are called upon to review a final report and order of the Interstate Commerce Commission declining to remove alleged unlawful rates from the freight rate structures for recyclable and virgin resource materials transported by the nation's railroads. The order under review, 2 dissented from by three commissioners 3 and challenged here by both representatives of recycling industries 4 and the United States, 5 reflects the agency's efforts to comply with Section 204 of the Railroad Revitalization and Regulatory Reform Act of 1976. 6 This provision directed the Commission to conduct an expedited investigation into the lawfulness of the rate structures and to order removal of all rates not shown by the railroads to be just, reasonable, and nondiscriminatory. 7 We find that the challenged order does not represent a reasoned compliance with the mandate expressed by Congress in Section 204. We therefore vacate the order and remand for further proceedings.
The significance and purpose of the investigation required by Section 204 cannot be understood apart from the Commission's past experience with ratemaking on recyclable materials. That experience occurred largely in the context of general revenue proceedings, in which the Commission's main task involved determination of the appropriate revenue levels and needs of the railroads, rather than the lawfulness of the rates on these materials. It is to the controversial history 8 of those proceedings that we turn first in placing the investigation under review, and the Commission's approach and findings therein, in proper perspective.
Under the Interstate Commerce Act 9 the initiative for ratemaking is vested in the railroads, subject to approval by the Commission in an appropriate proceeding. One method by which the railroads may initiate a rate increase is by filing a group tariff in which all or substantially all of the nation's railroads propose an across-the-board percentage increase in rates. In these so-called general revenue proceedings the Commission may either find the proposed increase just and reasonable after taking evidence related to the general need for increased revenues, 10 or "approve" the increase by declining to declare it unlawful following an investigation. 11 The characteristic feature of these proceedings is that the Commission focuses only on the need of the carriers for increased revenues, not on whether any particular application of the increase is just, reasonable, or nondiscriminatory. Nevertheless, the effect of Commission approval of a general increase is to shift the burden of proof from the carriers favoring the increase to complainants later challenging it. 12 Once the general increase has been approved, particular applications of the increase may then be challenged in subsequent proceedings under the Act. 13
Pursuant to this scheme the Commission approved, over the past decade, a series of annual upward adjustments in rates applicable to recyclable materials. 14 Appearing in proceedings to oppose the proposed increases, shippers and representatives of recycling industries contended that the proposed rates and underlying rate structures on recyclable products were unreasonably high and discriminatory when compared with the lower rates and rate structures traditionally prevailing on virgin resource materials. They also maintained that application of the proposed increases to recyclables would adversely affect the environment by discouraging industrial use of recycled products, thereby contributing to depletion of the nation's virgin resources. In the limited context afforded by general...
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