National Tour Brokers Ass'n v. Interstate Commerce Commission, 80-1037

• Citation: 671 F.2d 528
• Decision Date: 15 January 1982
• Docket Number: No. 80-1037,80-1037
• Parties: NATIONAL TOUR BROKERS ASSOCIATION, Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents, High Adventure Tours, Inc., Campus Travel, Inc., et al., American Bus Association, Intervenors.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 528

671 F.2d 528

217 U.S.App.D.C. 22

NATIONAL TOUR BROKERS ASSOCIATION, Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America,

Respondents,

High Adventure Tours, Inc., Campus Travel, Inc., et al.,

American Bus Association, Intervenors.

No. 80-1037.

United States Court of Appeals, District of Columbia Circuit.

Argued Feb. 4, 1981.

Decided Jan. 15, 1982.

Petition for Review of an Order of the Interstate Commerce commission.

David I. Granger, Washington, D. C., with whom Harold D. Murry, Jr., and J Griffin Lesher, Washington, D. C., were on the brief for petitioner.

Evelyn G. Kitay, Atty., I. C. C., Washington, D. C., with whom Richard A. Allen, Gen. Counsel, Frederick W. Read, III, Associate Gen. Counsel, I. C. C., Sanford M. Litvack, Asst. Atty. Gen., Robert B. Nicholson and Marion Jetton, Attys., Dept. of Justice, Washington, D. C., were on the brief for respondents.

James H. Glavin, III, was on brief for intervenor, High Adventure Tours, Inc.

Robert E. Goldstein was on brief for intervenors, Campus Travel, Inc., et al.

Charles A. Webb, Washington, D. C., was on brief for intervenor, The American Bus Assn.

Before JOHN W. PECK ^*, Senior Circuit Judge for the Sixth Circuit, WILKEY and GINSBURG, Circuit Judges.

Opinion for the Court filed by Senior Circuit Judge JOHN W. PECK.

JOHN W. PECK, Senior Circuit Judge.

The national trade association for the motor carrier passenger broker industry, the National Tour Brokers Association (NTBA), brought this action for review of the Decision and Adopted Rules of the Interstate Commerce Commission (ICC) in Ex Parte No. MC-96 (Sub-No. 2), Passenger Broker Entry Control, served December 7, 1979. ¹ The challenged rules simplify the licensing procedures for passenger tour brokers under 49 U.S.C. § 10924. In effecting this rule change, the ICC has reversed its previous interpretation of the requirements of § 10924. Carla Ticket Service, Inc., Broker Application, 94 M.C.C. 579 (1964). The present petition for review requires this Court to determine whether the ICC's informal rulemaking in this instance was "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A).

49 U.S.C. § 10924 provides that the ICC shall issue a license authorizing a person to be a broker for the transportation of passengers or household goods if the ICC finds:

(1) the person is fit, willing, and able-

(A) to be a broker for transportation to be authorized by the license; and

(B) to comply with this subtitle and regulations of the Commission; and

(2) the transportation for which the person is to be a broker will be consistent with the public interest and the transportation policy of section 10101 of this title.

As section 10924 was previously administered by the ICC, each applicant for a tour broker license was required to file an application showing that the applicant was fit, willing, and able to perform the proposed service and that the proposed service was consistent with the public interest and the national transportation policy. In Carla Ticket, the ICC rejected the suggestion that § 10924 required individual scrutiny only of the applicants' fitness, and stated that § 10924 reflected Congressional intent that the ICC evaluate the "public interest" of each broker license application on its merits. Carla Ticket, supra, at 580-81. Under this interpretation of § 10924 applications for new broker licenses have been routinely opposed by existing tour brokers on grounds that existing carriers could adequately provide the services proposed by new license applicants and that no public interest would be served by the "needless duplication" of services. See, e.g., Harris Extension-Elkins W. Va., 94 M.C.C. 227 (1963).

The rule changes challenged by the NTBA in the present petition were undertaken by the ICC in order to eliminate the case-by-case considerations of public interest under the existing licensing rules. Under the new rules of Ex Parte No. MC-96 (Sub-No. 2), the ICC has substituted a one time "general finding" that tour broker services that otherwise meet licensing requirements are in the public interest. In doing this, the ICC stated that it was not eliminating the public interest test required by § 10924, but rather was altering application procedures to meet the public interest.

As previously noted, our review of the ICC's informal rulemaking in Ex Parte No. MC-96 (Sub-No. 2) is governed by Section 10 of the Administrative Procedure Act, which provides that an agency's action, findings, and conclusions shall be set aside if found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A). The NTBA challenges Ex Parte No. MC-96 (Sub-No. 2) as both violative of the statutory mandate of 49 U.S.C. § 10924 and as arbitrary and capricious because it is unsupported by facts in the administrative record.

I.

NTBA contends that § 10924, by its plain meaning and by the ICC's own previous interpretation of the section, requires the ICC to make individual case-by-case evaluations of both the public interest to be served and the fitness of the applicant for every new broker license application. NTBA argues that Ex Parte No. MC-96 (Sub-No. 2) is violative of § 10924 because it eliminates individual determinations of public interest and in effect declares that henceforth it is in the public interest not to examine the public interest as it relates to individual applications. NTBA argues that this alteration of the requirements of § 10924 can be accomplished only by Congress, and that the ICC's effort in this regard must be set aside as violative of the law.

Clearly the rulemaking power of a federal agency does not encompass the power to make law or to repeal law, but rather is the power only to adopt rules that carry out the will of Congress as expressed by statute. Ernst & Ernst v. Hochfelder, 425 U.S. 185, 213-14, 96 S.Ct. 1375, 1391, 47 L.Ed.2d 668 (1976). However, in the absence of a clear indication of a Congressional intent to impose a specific procedure on the ICC in its implementation of its statutory authority, the rules of the Commission are expected to be adaptable to changing circumstances so that Congress' general intent will be effectively promoted. American Trucking Ass'ns, Inc. v. United States, 602 F.2d 444, 449 (D.C.Cir.), cert. denied, 444 U.S. 991, 100 S.Ct. 522, 62 L.Ed.2d 420 (1979). Therefore, the fact that the ICC once interpreted § 10924 to require individual public interest determinations does not bind the ICC to forever adhere to that view. So long as the general finding of public interest proposed by Ex Parte No. MC-96 (Sub-No. 2) is consistent with the mandate of § 10924, then the ICC has the authority to make that general finding regardless of the ICC's prior interpretation as expressed in Carla Ticket. See, e.g., American Trucking Ass'ns, supra, at 449; Bell Telephone Co. v. F.C.C., 503 F.2d 1250, 1264-65 (3rd Cir. 1974).

We have examined the language of § 10924 and its legislative history and find nothing that precludes the interpretation now given that section by the ICC in Ex Parte No. MC-96 (Sub-No. 2). Neither the statute nor its legislative history defines "public interest". In the absence of a definition of "public interest" by Congress that would require individual case-by-case determinations, the ICC was within its authority to utilize a general finding that the public interest is served by the licensing of "fit" applicants as brokers. See, e.g., American Trucking Ass'n., supra; Chemical Leaman Tank Lines, Inc. v. United States, 368 F.Supp. 925 (D.Del.1973). ² Therefore, in our narrow review of Ex Parte No. MC-96 (Sub-No. 2) to determine whether the ICC's informal rulemaking was a violation of 49 U.S.C. § 10924, we conclude that the substitution of a general finding of public interest for the former practice of case-by-case findings was within the ICC's authority and not a violation of law.

The NTBA also contends that Ex Parte No. MC-96 (Sub-No. 2) violates § 10924 because the new rule effectively eliminates the "fitness" requirement for tour broker licensing determinations. Under the new rules, applicants for tour broker licenses are required to file "evidence of fitness" to provide the service proposed in the application. This evidence is to consist of statements of who will own and operate the proposed service and a listing of the cities and states in which the proposed service will be conducted. This information is to be published in the Federal Register. In addition, applicants are required by the new rules to post a surety bond of $10,000. New applications are to be granted to first time applicants for a limited duration of three years-renewal subject to review, and licensees are required to notify their passengers that any complaints regarding the service may be submitted in writing to the ICC. These latter two requirements are purported to facilitate "fitness monitoring" by the ICC. Finally, statements supporting the applicants' "good character" are no longer a required part of the tour broker license applications under the new rules.

The...