Union Mechling Corp. v. United States, Civ. A. No. 73-956.

• Citation: 390 F. Supp. 411
• Decision Date: 26 November 1974
• Docket Number: Civ. A. No. 73-956.
• Parties: UNION MECHLING CORPORATION et al., Plaintiffs, and Igert, Inc., et al., Intervening Plaintiffs, v. The UNITED STATES of America and the Interstate Commerce Commission, Defendants, and Sioux City and New Orleans Barge Lines, Inc., Intervening Defendant.
• Court: U.S. District Court — Eastern District of Pennsylvania

390 F. Supp. 411

UNION MECHLING CORPORATION et al., Plaintiffs, and Igert, Inc., et al., Intervening Plaintiffs, v. The UNITED STATES of America and the Interstate Commerce Commission, Defendants, and Sioux City and New Orleans Barge Lines, Inc., Intervening Defendant.

Civ. A. No. 73-956.

United States District Court, W. D. Pennsylvania.

November 26, 1974.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Richard L. Thornburgh, U. S. Atty., W.D.Pa., Pittsburgh, Pa., John H. D. Wigger, Dept. of Justice, Washington, D. C., for U. S.

H. G. Homme, Jr., I. C. C., Washington, D. C., for I. C. C.

Donald Macleay, Macleay, Lynch, Bernhard & Gregg, Washington, D. C., S. S. Eisen, Eisen & Mitchell, New York City, for Union Mechling Corp.

Edward K. Wheeler, Wheeler & Wheeler, Washington, D. C., for Sioux City and New Orleans Barge Lines, Inc.

Richard J. Hardy, Hardy & Chapman, Washington, D. C., for Federal Barge Lines, Inc., Gulf-Canal Lines, Inc.

Harry C. Ames, Jr., Ames, Hill & Ames, P. C., Washington, D. C., for American Commercial Barge Line Co., Coyle Lines Inc. and The Valley Line Co.

John C. Lovett, Lovett & Lewis, Benton, Ky., for Igert, Inc.

Thomas M. Auchincloss, Jr., Rea, Cross & Knebel, Washington, D. C., for Arrow Transp. Co.

Alan S. Dale, Eastham, Watson, Dale & Forney, Houston, Tex., for Dixie Carriers, Inc.

William F. King, Major, Sage & King, Alexandria, Va., for Hennepin Towing Co.

Before WEIS, Circuit Judge, and DUMBAULD and SCALERA, District Judges.

OPINION

SCALERA, District Judge.

This is an action to enjoin, set aside and annul the order of the Interstate Commerce Commission (I.C.C.)¹ granting a certificate of public convenience and necessity to Sioux City and New Orleans Barge Lines, Inc. (SCNO), intervening defendant herein, to operate as a common carrier by water generally throughout the Mississippi River System and the Gulf Intracoastal Waterway.²

I HISTORY OF THE CASE

On August 11, 1970, SCNO filed an application with the I.C.C. for a certificate of public convenience and necessity under § 309(c) of the Interstate Commerce Act, 49 U.S.C. § 909(c), seeking authority as a common carrier by water on ports and points throughout the entire Mississippi River System and Gulf Intracoastal Waterway.³ SCNO was a certificated common carrier by water authorized to operate between points on the Missouri and Arkansas Rivers as well as between points on the above-named rivers, on the one hand, and, on the other hand, to or from points along the Illinois Waterway, the Ohio River, and a portion of the lower Mississippi River.⁴

Noted in evidence is that 96% of SCNO's traffic volume consisted of bulk, unregulated commodities (mostly grain). Unregulated or bulk traffic are goods loaded or carried without wrappers or containers and received without transportation mark or count. Bulk commodities are usually fungible goods such as grains, coal, or ore. Any water carrier can engage in the transportation of bulk commodities throughout the entire inland waterways without requesting any grant of authority from the I.C.C. This type of bulk or unregulated traffic accounts for approximately 96% of the totality of tonnage shipped by water carrier on this nation's inland waterways.

Regulated traffic comprises 4% of the total inland waterway tonnage. In order to carry a regulated commodity such as steel sheets over a particular navigable channel, it would be necessary for the carrier to receive from the I.C.C. a certificate of public convenience and necessity.

During the pendency of this proceeding before the I.C.C., there was in effect a law, commonly referred to as "the Three-Commodity Rule," § 303(b) of the Interstate Commerce Act (Act), 49 U.S. C. § 903(b), which essentially acted as an exception to the general rule that bulk commodities move in an unregulated status. The Three-Commodity Rule provided that when more than three distinct bulk commodities were carried in a single tow, the commodities traveled in a regulated status. Thus, if several barges filled with wheat were in a tow with barges containing iron ore, soybeans, and coal, the rule converted the entire tow from an unregulated status to a regulated one.

The Three-Commodity Rule was repealed on December 28, 1973 by P.L. 93-201, after the I.C.C. rendered its decision on SCNO's application. Under the present state of the law, therefore, more than three different bulk commodities can be carried in a single tow in an unregulated status.

The named plaintiffs and intervening plaintiffs⁵ along with many western and midwestern railroads⁶ protested SCNO's application for the extended authority. The protestants offer service on or near the waterways which SCNO's application sought to serve. (343 I.C.C. at 416.)

Public hearings on SCNO's application, which consumed over two weeks of testimony, were held in Washington, D. C., and St. Louis, Missouri, in March, April, and May of 1971. SCNO presented over twenty supporting witnesses. The supporting witnesses included shippers from points along waterways which SCNO already served as a regulated carrier as well as shippers of regulated commodities from the waterways which SCNO proposed to serve by the application. The supporting witnesses may be classified into three general groups: (1) shippers of unregulated, bulk commodities (principally grain); (2) shippers of regulated commodities; and (3) spokesmen for the various ports, port authorities, and the various civil organizations of the cities which SCNO served and sought to serve. (Id. at 415.)

On April 20, 1972, the I.C.C.'s hearing examiner (now an Administrative Law Judge) handed down his report which recommended the denial of SCNO's application because SCNO had not established that the present and future public convenience and necessity required the proposed grant of authority. The Administrative Law Judge based his ultimate conclusion on several subsidiary findings. At page 9 of his report he concluded:

". . . it is not possible to find any real need for the service proposed by the applicant for the shippers of bulk commodities. The . . . evidence presented . . . is clearly insufficient to demonstrate that any meaningful advantage would accrue to bulk shippers or the applicant on any type of consistent basis by enabling it to move exempt bulk commodities in a regulated status. In fact, it appears that this would be somewhat of a rarity with most bulk shippers.

* * * * * *

"The evidence presented by shippers of inherently regulated commodities fails to show any material inadequacy in the present service."

Thereafter, SCNO, together with several of the supporting witnesses, filed exceptions to the Administrative Law Judge's report and recommended order. The competing barge lines and railroads filed replies.

On September 22, 1972, Division One of the I.C.C. voted to entertain oral argument on the matter, which was held in Washington, D.C., on October 25, 1972.

The I.C.C. on April 20, 1973, concluded that contrary to the Administrative Law Judge's report and recommended order, SCNO's application should be granted. The Commission found that:

"The evidence demonstrates that applicant will be able to render a more prompt, efficient, and economical service to shippers on the Missouri River if it is permitted to handle regulated and exempt traffic moving to and from intermediate points on the Mississippi River System and the Gulf Intracoastal Waterway. It also appears that, contrary to the arguments of protestants, shippers of exempt bulk commodities would be willing to have their commodities move in a regulated status, . . . . The ability of communities situated on the Missouri River to develop and promote water borne commerce and to locate industry is closely related to the quality of water carrier service available. We believe that Missouri River shippers are entitled to the benefits and the improvements in water transportation service which would flow from a grant of this application." 343 I.C.C. at 419.

The I.C.C. also rejected the contention by protestants (plaintiffs herein) that the grant of authority to SCNO would have an "appreciable effect" on their existing operations. The I.C.C. noted the projected growth of regulated traffic on the Mississippi River System and Gulf Intracoastal Waterway and concluded that the protestants authorized to conduct operations on the Missouri River (Federal and Union Mechling)⁷ had neglected their common carrier obligations to the general public. (Id. at 420.) The I.C.C. granted SCNO's application on the condition that SCNO maintain at least the level of service it presently provides shippers on the Missouri River. (343 I.C.C. at 420.) And, the I.C.C. found that the grant of SCNO's application was "not a major federal action significantly affecting the quality of the human environment" and therefore no environmental statement was required by § 102(2)(C) of the National Environmental Policy Act (NEPA), 42 U.S. C. § 4332(2)(C). (Id. at 420.)

In June, 1973, petitions for reconsideration of the I.C.C.'s decision were filed by each plaintiff and intervening plaintiff. SCNO and several supporting witnesses responded to the above petitions by replies filed in July, 1973. On September 13, 1973, Division One, acting as an appellate division of the I.C.C., entered an order denying plaintiffs' and intervening plaintiffs' petitions for reconsideration, stating that the decision was in accordance with the evidence presented and the applicable law. This order more fully discussed the reasons for the I.C.C.'s conclusion that no NEPA statement was necessitated by its grant of authority to SCNO.

Plaintiffs Union Mechling, Federal, and American Commercial filed petitions requesting a finding that the extension of authority to SCNO involved an issue of general transportation importance under Rule 101(a)(4) of the I.C.C.'s Rules of Practice and that the proceeding be set for oral argument before the entire I.C.C....