National Motor Freight Traffic Ass'n v. I.C.C., 94-1032
| Decision Date | 11 April 1995 |
| Docket Number | No. 94-1032,94-1032 |
| Citation | 51 F.3d 297 |
| Parties | Fed. Carr. Cas. P 83,981, 311 U.S.App.D.C. 154 NATIONAL MOTOR FREIGHT TRAFFIC ASSOCIATION, and National Classification Committee, Petitioners, v. INTERSTATE COMMERCE COMMISSION, and the United States of America, Respondents, Mallinckrodt Specialty Chemicals Company, et al., National Small Shipments Traffic Conference, Inc., Health and Personal Care Distribution Conference, Inc., and National Industrial Transportation League, Intervenors. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
John R. Bagileo, argued the cause, for petitioners. With him on the briefs, was William W. Pugh.
Craig M. Keats, Associate Gen. Counsel, I.C.C., argued the cause, for respondents. With him on the brief were Henri F. Rush, Gen. Counsel, ICC, Anne K. Bingaman, Asst. Atty. Gen., John P. Fonte, and Robert B. Nicholson, Attys., U.S. Dept. of Justice. Judith A. Albert, Atty., I.C.C., entered an appearance.
On the joint brief of intervenors, were Daniel J. Sweeney for Mallinckrodt Specialty Chemicals Co., et al., Nicholas J. DiMichael, Richard D. Fortin, and Michael Kane, for National Indus. Transp. League.
Before EDWARDS, Chief Judge, GINSBURG and HENDERSON, Circuit Judges.
The National Motor Freight Traffic Association, Inc. and the National Classification Committee of the NMFTA petition for review of two orders of the Interstate Commerce Commission cancelling the petitioners' proposed "class rate" tariff. Because the ICC used a standard that is insupportable in light of other decisions it has made, we grant the petition for review and remand the matter to the Commission.
A motor carrier subject to the jurisdiction of the ICC is required to establish and file with the Commission a tariff showing the rates it will charge for transportation. 49 U.S.C. Secs. 10702, 10761, 10762. Rather than file an individual tariff for every transported commodity, carriers often use a so-called class rate tariff, which sets forth the rate for transportation of a commodity based upon its "classification rating."
A classification rating is a number between 50 and 500 that is meant to reflect the "transportability" of a commodity. In general, the higher the number, the more difficult--and hence more expensive--it is to transport the commodity. The Commission evaluates the classification rating of a particular commodity upon the basis of four factors: (1) density, expressed as weight per cubic foot; (2) stowability, that is, the ease of loading and unloading; (3) handling, including any special care that must be used or conditions that must be maintained; and (4) liability, the potential for damage to, or damage caused by, the commodity.
The classification rating of a commodity is published in a "classification tariff." While any carrier may file one, the most widely used classification tariff is the National Motor Freight Classification Tariff (NMFCT), which the petitioners publish pursuant a "rate bureau agreement." See 49 U.S.C. Sec. 10706(b)(2) ().
The Commission, upon its own initiative or upon "application of an interested party," may investigate the lawfulness of a newly filed classification tariff. 49 U.S.C. Sec. 10708. In such a proceeding, "the burden is on the carrier proposing the changed ... classification ... to prove the change is reasonable," as required by 49 U.S.C. Sec. 10701(a). 49 U.S.C. Sec. 10708(c).
The NMFCT long provided a classification rating of 200 for substances that were designated "Class A Poisons" by the Department of Transportation, including various poisonous gases, gas mixtures, and liquids, and a rating of 150 for poisonous gases and gas mixtures "other than Class A Poisons" (including the DOT's "Class B Poisons" and "Irritating Materials"). In 1985, however, the DOT adopted a new nomenclature for poisonous materials; it began by designating 36 chemicals "poison-inhalation hazards" (PIHs). See DOT Docket No. HM-196, Packaging and Placarding Requirements for Liquids Toxic by Inhalation, 50 Fed.Reg. 41092 (1985). In 1991 the DOT scrapped the old typology altogether and deemed PIHs more than 100 additional chemicals, many of which were not listed poisons under the old scheme. See DOT Docket No. HM-181, Performance Oriented Packaging Standards; Changes to Classification, Hazard Communication, Packaging and Handling Requirements Based on UN Standards and Agency Initiative, 55 Fed.Reg. 52402 (Dec. 21, 1990), as amended, 56 Fed.Reg. 47158 (Sept. 18, 1991) (hereinafter HM-181). The DOT also categorized the PIHs into four "hazard zones" labelled, in descending order of toxicity, A through D.
Because the DOT's new system eliminated the old designations incorporated into the NMFCT, all poisons could now be classified in the NMFCT only as "other than Class A poisons." The petitioners therefore proposed a new classification tariff in which all PIHs in hazard zones A or B would have a classification rating of 200, while all PIHs in hazard zones C or D would have a classification rating of 150. While this change corrected some of the problems caused by the new DOT nomenclature--the classification rating of 11 commodities would be lowered from 200 to 150, that of eight raised from 150 to 200--it did not simply restore the status quo ante because many of the materials that the DOT had designated PIHs in HM-181 had not previously been classified as either Class A or Class B poisons or as Irritating Materials. Thus, under the proposed tariff, the classification rating of 96 commodities newly designated PIHs would significantly increase, as would the rate for shipping those commodities.
Several shippers (intervenors here) protested the tariff, causing it to be suspended and forcing the ICC to determine whether the proposed changes are "reasonable." See 49 U.S.C. Sec. 10701(a). The Commission, first in an unpublished preliminary decision (issued August 27, 1993), and finally in Classification Ratings on Poisons, NMFC, 9 I.C.C.2d, Dkt. No. M-30430 (Nov. 18, 1993), concluded that the tariff was not reasonable because the proponents (petitioners here) failed to show a "substantial change in the transportation factors ... of the ... commodities involved." Commissioner Walden dissented on the ground that the proponents did not need to show a "substantial change" in the transportation factors for the proposed classifications to be "reasonable" under the statute.
Recurring to the four factors relevant to overall transportability, the Commission found first that the petitioners had not shown that HM-181 had any adverse effect upon the "relatively high" density of the newly designated PIHs. Likewise, the Commission found no evidence of "a substantial change in [stowability] since HM-181 became effective," and faulted the petitioners for failing to present "sufficient data to show how handling under HM-181 requirements is substantially different from [what it was under] the prior regulations." As for liability, the Commission suggested that by imposing more stringent safety standards upon the transport of PIHs, the new DOT regulations actually decreased the potential for detrimental loss or harm.
The petitioners now argue that the Commission's requirement that they show a "substantial change" in the transportation...
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