National Indus. Traffic League v. United States, Civ. A. No. 74-1119.

• Court: United States District Courts. United States District Court (Columbia)
• Citation: 396 F. Supp. 456
• Docket Number: Civ. A. No. 74-1119.
• Parties: The NATIONAL INDUSTRIAL TRAFFIC LEAGUE, Plaintiff, v. UNITED STATES et al., Defendants.
• Decision Date: 11 July 1975

396 F. Supp. 456

The NATIONAL INDUSTRIAL TRAFFIC LEAGUE, Plaintiff,
v.
UNITED STATES et al., Defendants.

Civ. A. No. 74-1119.

United States District Court, District of Columbia.

July 11, 1975.

396 F. Supp. 457

John F. Donelan, Frederic L. Wood, Washington, D. C., for plaintiff.

Charles H. White, Jr., James K. Kurth, Interstate Commerce Commission (ICC), John H. D. Wigger, Dept. of Justice, Washington, D. C., for defendants.

396 F. Supp. 458

Before MacKINNON, Circuit Judge, and CORCORAN and GESELL, District Judges.

OPINION AND ORDER

CORCORAN, District Judge:

Plaintiff, the National Industrial Traffic League, is a voluntary, unincorporated association of shippers and organizations of shippers located throughout the United States.

The plaintiff seeks to enjoin and set aside an order of the Interstate Commerce Commission (ICC) which modified certain credit regulations applicable to household goods carriers. Payment of Rates and Charges of Motor Carriers Credit Regulations—Household Goods, 118 M.C.C. 778 (1973).

The plaintiff has properly invoked the Court's jurisdiction. 28 U.S.C. §§ 2284, 2321-25 (1970).

The parties have filed cross-motions for summary judgment and the action is thus ripe for decision on the merits. Fed.R.Civ.P. 65(a)(2).

After considering briefs and hearing oral argument, we conclude that the ICC acted within its statutory authority after adequate notice, and that there was a rational basis for its decision. Accordingly, we affirm.

I

In 1967, the ICC promulgated a regulation, 49 C.F.R. § 1322.1(a) (1974),¹ allowing household goods carriers to extend to national account shippers² credit in the amount of the charges for a period of seven days. Under this regulation, it was the industry practice for the carriers to extend credit on a regular basis to national account shippers.

This seven-day free credit period was prescribed by the ICC pursuant to its authority under § 223 of the Interstate Commerce Act, 49 U.S.C. § 323 (1970).³ That section prohibits any motor common carrier from delivering any freight which it has transported until all rates and charges have been paid. However, the ICC is authorized to prescribe regulations for the settlement of those rates and charges, "including rules and regulations for weekly or monthly settlement, and to prevent unjust discrimination or undue preference or prejudice." Id.

In early 1970, after a petition for rule-making was filed with it seeking the amendment of 49 C.F.R. § 1322.1(a), the ICC issued a Notice of Proposed Rulemaking and Order, the purpose of which was to determine "whether and to what extent" the existing regulation concerning the seven-day free credit period should be modified or changed, and whether carriers should be allowed to impose a penalty charge upon those shippers who failed to pay within the credit period. After receiving comments by various parties, including shippers and carriers, the Commission, without a

396 F. Supp. 459

hearing, issued in 1973 the rule challenged here by plaintiff.⁴

II

At oral argument, plaintiff advanced three reasons why the decision should be set aside, viz: (1) that the ICC lacks power under § 223 to promulgate the amended regulation; (2) that the notice of rule-making was inadequate; and (3) that there is no rational basis for the ICC decision.⁵ We have examined each of these contentions and find them to be without merit.

(1) We begin with the proposition that the ICC has broad rule-making authority to regulate the motor carrier industry. American Trucking Association v. United States, 344 U.S. 298, 73 S.Ct. 307, 97 L.Ed. 337 (1953). Moreover, "(t)he Commission, faced with new developments or in light of reconsideration of the relevant facts and its mandate, may alter its past interpretation and overturn past administrative rulings and practice." American Trucking Associations v. Atchinson, Topeka & Santa Fe Ry., 387 U.S. 397, 416, 87 S.Ct. 1608, 1618, 18 L.Ed.2d 847 (1967). Indeed, substantive rule-making by an agency is generally recognized by the courts to be a fair, innovative and resource-saving technique. National Petroleum Refiners Ass'n v. Federal Trade Commission, 157 U.S.App.D.C. 83, 482 F.2d 672 (1973).

As noted previously, the Commission, pursuant to its authority under § 223, established in 1967 the seven-day free credit period. There is no suggestion by plaintiff that that action by the Commission was beyond its statutory mandate, nor, for that matter, does plaintiff object to a simple extension of the free credit period. Rather, plaintiff's major premise is that the mandatory imposition of this 1% service charge is an unlawful regulation of shippers. For support plaintiff relies on a prior ICC decision in which it was held that shippers are beyond the reach of § 223 and any regulations promulgated thereunder. Regulations for Payment of Rates and Charges, 326 I.C.C. 483, 489 (1966).

However, plaintiff misconceives the thrust of the new rule and the ICC's authority to promulgate it. The new rule does no more than extend the free credit period. It is, by its terms, directed at the carriers, not shippers. Should a carrier extend credit to a shipper—and...