Southern Ry. Co. v. I. C. C.

• Decision Date: 18 June 1982
• Docket Number: No. 81-2133,81-2133
• Citation: 681 F.2d 29
• Parties: SOUTHERN RAILWAY COMPANY, Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents, Family Lines Rail System, Intervenor.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 29

681 F.2d 29

220 U.S.App.D.C. 301

SOUTHERN RAILWAY COMPANY, Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America,

Respondents,

Family Lines Rail System, Intervenor.

No. 81-2133.

United States Court of Appeals, District of Columbia Circuit.

Argued Feb. 19, 1982.

Decided June 18, 1982.

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

Eugene T. Liipfert, Washington, D. C., with whom Mark J. Andrews, Thomas R. Howell, and Maryann Clifford, Washington, D. C., were on the brief, for petitioner. Robert B. Donin, Washington, D. C., also entered an appearance for petitioner.

Harold E. Spencer, Chicago, Ill., with whom Thomas F. McFarland, Jr., Chicago, Ill., and John M. Cutler, Jr., Washington, D. C., were on the brief, for amicus curiae urging reversal.

H. Glenn Scammel, Atty., I. C. C., Washington, D. C., with whom Robert S. Burk, Acting Gen. Counsel, Ellen K. Schall, Deputy Associate Gen. Counsel, I. C. C., John J. Powers, III and Kenneth P. Kolson, Attys., Dept. of Justice, Washington, D. C., were on the brief, for respondents.

Richard A. Hollander for intervenor.

Before WALD and GINSBURG, Circuit Judges, and GESELL, ^* United States District Judge for the District of Columbia.

Opinion for the Court filed by Circuit Judge WALD.

WALD, Circuit Judge:

This battle between two of the Southeast's most successful railroads requires us to determine how a participant in joint rates ¹ may cancel its participation in those rates. Intervenor Family Lines Rail System (FLS) canceled certain joint rates with petitioner Southern Railway (Southern) by filing an amended tariff in September 1981. Respondent Interstate Commerce Commission (ICC) accepted the amended tariff for filing and refused to suspend or investigate it. ² Southern contended before the agency and now contends before this court that the ICC was required by both 49 U.S.C.A. § 10705a (West Spec.Pamph.1982) ³ (added by Staggers Rail Act of 1980, Pub.L.No. 96-448, § 217(a), 94 Stat.1895, 1916-24) and pre-Staggers Act law to suspend and investigate FLS's tariff. The ICC, however, rejected Southern's construction of the governing statutes. Family Lines Rail System-Unilateral Cancellation of Joint Rates, 365 I.C.C. 464 (1981). We agree with the ICC's statutory construction and, under well-established law, have no power to review the ICC's discretionary decision not to suspend the tariff. Accordingly, we affirm.

I. BACKGROUND

On September 8, 1981, FLS filed a tariff purporting to cancel numerous joint rates with Southern. The tariff, which was to become effective twenty days later, ⁴ was filed without Southern's concurrence or acceptance, and in fact Southern vigorously protested the joint-rate cancellations in a petition filed with the ICC on October 12, 1981. Southern's petition demonstrated that, on many of the joint rates it sought to cancel, FLS was receiving revenues of at least 110% of its variable costs. Southern argued that upon such a demonstration the ICC was required by 49 U.S.C. § 10705a(c) to reject or at least suspend FLS's tariff. The statute cited by Southern provides, in relevant part:

(1) Notwithstanding any other provision of this title, any prior agreement in effect on the effective date of the Staggers Rail Act of 1980, or any requirement of the Commission, a rail carrier may cancel the application of a joint rate to a through route in which it participates without the concurrence of any other rail carrier that is a party to such joint rate, unless another rail carrier that participates in such through route ... makes the demonstration described in paragraph (2) of this subsection.

(2) The application of a joint rate to a through route may not be canceled under this subsection if a rail carrier that participates in such through route ... demonstrates to the Commission that the canceling carrier's share of the revenues, under the joint rate in effect at the time the application of the joint rate is canceled, is equal to or greater than-

(A) 110 percent of the canceling carrier's variable cost of providing service over such route ....

....

(4) If the demonstration described in paragraph (2) is made ... the tariff canceling the joint rate shall be considered by the Commission in accordance with section 10705 of this title. The existing joint rate ... shall remain in effect during the pendency of the Commission's consideration.

In response, FLS, although taking issue with some of Southern's calculations, admitted it was receiving 110% of variable costs over many of the routes in question. FLS urged, however, that this was irrelevant, for it claimed it was not proceeding under section 10705a, and therefore section 10705a(c)(2) by its own explicit terms ⁵ did not apply. Instead, FLS argued, its cancellation of joint rates was subject to the ICC's discretionary power, set out in 49 U.S.C. § 10707, ⁶ to investigate and suspend the cancellation. Should the ICC suspend the tariff for investigation, FLS would have the burden of proving that cancellation was consistent with the public interest. 49 U.S.C. § 10705(e). ⁷

On October 21, 1981, the ICC Suspension Board announced by telephone that it had decided not to suspend or investigate the challenged tariff. Southern filed its petition for review in this court, together with a motion for stay pending review, the next day. Simultaneously, Southern sought administrative review from Division 1 of the ICC, which affirmed the Suspension Board's decision. We granted a temporary stay pending receipt of a response to the stay motion from the ICC. On November 4, 1981, we vacated our temporary stay, and FLS's joint-rate cancellations took effect on November 5. Southern continued to seek administrative relief, petitioning the ICC Chairman on November 9 to place the matter before the entire ICC. The ICC rejected Southern's arguments in a written opinion rendered December 15 and served December 17.

The ICC reasoned that nothing in the Interstate Commerce Act required carriers canceling joint rates to obtain the consent of other carriers participating in the joint rates. Like most tariffs, therefore, joint-rate-cancellation tariffs were subject to the ICC's discretionary power under section 10707 to suspend or not to suspend. Section 10705a mandated suspension in the circumstances set out in that section, stated the ICC, only if the canceling carrier had elected to proceed under that section, the 110% showing had been made by a protestant, and the ICC had decided to "consider" the tariff by conducting an investigation. In this case, said the ICC, FLS had elected not to proceed under section 10705a, but instead to invoke its cancellation rights under pre-Staggers Act law, taking the chance that the ICC might suspend under section 10707. Those rights had not been abrogated by the Staggers Act, which was intended to make joint-rate cancellation easier. Thus, there was now a "two-track system": cancellation under pre-Staggers Act law, or cancellation under section 10705a. FLS had taken the first track, ⁸ and the ICC declined to suspend.

Southern attacks the ICC's reasoning in this court, ⁹ on its most basic premise. The ICC has never, claims Southern, had statutory authority under the pre-Staggers Act law not to suspend joint-rate-cancellation tariffs in which all joint-rate participants do not concur. The Staggers Act was indeed intended to make joint-rate cancellations easier, argues Southern, but only by providing a single exception-section 10705a-to the requirement that the ICC suspend and investigate joint-rate-cancellation tariffs. FLS was thus necessarily invoking section 10705a's provisions, and the ICC was under a mandatory duty to suspend when the 110% showing was made.

The case has been fully briefed and argued by petitioner Southern; amicus curiae The Fertilizer Institute (supporting reversal); the ICC; and intervenor FLS. The Antitrust Division of the Department of Justice, representing the United States, also joined the ICC's brief.

II. REVIEWABILITY

At the threshold, there has been a suggestion by the ICC that because ICC decisions not to suspend filed rates have generally been held nonreviewable in the past, that must be true in this case as well. And indeed it is now established beyond all doubt that ICC decisions to suspend or not to suspend tariffs under section 10707 are committed to agency discretion and hence are outside our power to review. See, e.g., Southern Railway v. Seaboard Allied Milling 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, 311, 95 S.Ct. 2336, 2351, 45 L.Ed.2d 191 (1975); Arrow Transportation Co. v. Southern Railway, 372 U.S. 658, 83 S.Ct. 984, 10 L.Ed.2d 52 (1963); Arizona Electric Power Cooperative v. ICC, 675 F.2d 303 (D.C.Cir.1982). Nothing in the Staggers Act alters the nonreviewability of decisions under section 10707. But section 10705a is a brand new enactment, and whether suspension actions by the ICC under that section are reviewable depends on congressional intent. ¹⁰ By using mandatory language in section 10705a ("(i)f the demonstration ... is made ... (t)he existing joint rate ... shall remain in effect"), in contrast to the permissive language found in section 10707 ("the Commission may begin a proceeding"), Congress may have created judicially reviewable duties in the ICC.

We do not resolve the question of reviewability of action under section 10705a, for as we explain infra parts III-IV, FLS did not file under section 10705a. But we note that, because reviewability may depend on which statutory provisions are invoked, a court may now need to determine, as a preliminary matter, the statutory basis for ICC action before deciding whether the action is reviewable. Cf. Aeronautical Radio, Inc. v. FCC, 642 F.2d 1221, 1233-36 (D.C.Cir.1980) (examining FCC's construction of its statutory ability...