United States v. Students Challenging Regulatory Agency Procedures Scrap Aberdeen and Rockfish Railroad Company v. Students Challenging Regulatory Agency Procedures Scrap 8212 535 72 8212 562

• Decision Date: 18 June 1973
• Docket Number: Nos. 72,s. 72
• Citation: 93 S.Ct. 2405,412 U.S. 669,37 L.Ed.2d 254
• Parties: UNITED STATES and Interstate Commerce Commission, Appellants, v. STUDENTS CHALLENGING REGULATORY AGENCY PROCEDURES (SCRAP) et al. ABERDEEN AND ROCKFISH RAILROAD COMPANY et al., Appellants, v. STUDENTS CHALLENGING REGULATORY AGENCY PROCEDURES (SCRAP) et al. —535 and 72—562
• Court: U.S. Supreme Court

412 U.S. 669

93 S.Ct. 2405

37 L.Ed.2d 254

UNITED STATES and Interstate Commerce Commission, Appellants,

v STUDENTS CHALLENGING REGULATORY AGENCY PROCEDURES

(SCRAP) et al.

ABERDEEN AND ROCKFISH RAILROAD COMPANY et al.,

Appellants,

v. STUDENTS CHALLENGING REGULATORY AGENCY PROCEDURES

(SCRAP) et al.

Nos. 72—535 and 72—562.

Argued Feb. 28, 1973.

Decided June 18, 1973.

Syllabus

The Interstate Commerce Act permits railroads to file proposed freight rate increases, with at least 30 days' notice to the Interstate Commerce Commission (ICC) and the public before putting the new rates into effect. The ICC may, pursuant to § 15(7) of the Act, suspend the operation of the proposed rates for as long as seven months, in order to investigate the lawfulness of the rates. At the end of the seven-month period, the carrier may put the suspended rates into effect unless the ICC has completed its investigation and found the rates unlawful. Proceeding under the statutory scheme, substantially all the Nation's railroads sought a 2.5% surcharge on nearly all freight rates, as an emergency measure to obtain increased revenues pending adoption of selective rate increases on a permanent basis. Shippers, competing carriers, and other interested persons requested the ICC to suspend the tariff for the statutory seven-month period. Various environmental groups, including Students Challenging Regulatory Agency Procedures (SCRAP) and the Environmental Defense Fund, appellees here, protested that failure to suspend the surcharge would cause their members 'economic, recreational and aesthetic harm,' and specifically, that the new rate structure would discourage the use of 'recyclable' materials and promote the use of raw materials that compete with scrap, thus adversely affecting the environment. On February 1, 1972, the ICC issued an order announcing its decision not to suspend the surcharge for the seven-month period, and on April 24, 1972, ordered the proposed selective increases filed by the carriers to be suspended for the full seven-month period ending November 30, 1972, and permitted the collection of the surcharge until that date. SCRAP filed the present suit seeking, inter alia, an injunction to restrain enforcement of the February 1 and April 24 orders allowing the carriers to collect the surcharge. SCRAP, an unincorporated association formed by five law students to enhance the quality of the environment, claimed that its members 'suffered economic, recreational and aesthetic harm directly as a result of the adverse environmental impact of the railroad freight structure,' that each of its members was caused to pay more for finished products, that each of its members uses the forests, rivers, mountains, and other natural resources of the Washington, D.C., area and at his legal residence for camping, hiking, fishing, and other purposes, and that these uses have been adversely affected by increased freight rates. The main thrust of SCRAP's complaint was that the ICC's orders were unlawful for failure to include a detailed environmental impact statement as required by § 102(2)(C) of the National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. § 4332(2)(C). The three-judge District Court found that appellees had standing to sue. The court held that its power to grant an injunction was not barred by Arrow Transportation Co. v. Southern R. Co., 372 U.S. 658, 83 S.Ct. 984, 10 L.Ed.2d 52, because NEPA 'implicitly confers authority on the federal courts to enjoin any federal action taken in violation of NEPA's procedural requirements . . . so long as the review is confined to a determination as to whether the procedural requisites of NEPA have been followed.' The court concluded that the ICC's decision not to suspend the surcharge for the seven-month period was a 'major federal action significantly affecting the quality of the human environment,' and granted an injunction prohibiting the ICC 'from permitting' and the railroads 'from collecting' the surcharge 'insofar as that surcharge relates to goods being transported for purposes of recycling.' Held:

1. Appellees' pleadings sufficiently alleged that they were 'adversely affected' or 'aggrieved' within the meaning of § 10 of the Administrative Procedure Act to withstand a motion to dismiss on the ground of lack of standing to sue. Sierra Club v. Morton, 405 U.S. 727, 92 S.Ct. 1361, 31 L.Ed.2d 636, distinguished. Pp. 683—690.

(a) Standing is not confined to those who show economic harm, as '(a)esthetic and environmental well-being, like economic well-being, are important ingredients of the quality of life in our society.' Sierra Club, supra, at 734, 92 S.Ct. at 1366. P. 686.

(b) Here, the appellees claimed that the specific and allegedly illegal action of the ICC would directly harm them in their use of the natural resources of the Washington area. Pp. 686 687.

(c) Standing is not to be denied because many people suffer the same injury. Pp. 687—688.

(d) It cannot be said on these pleadings that appellees could not prove their allegations, which, if proved, would place them squarely among those persons injured in fact by the ICC's action and entitled to review under Sierra Club, supra. Pp. 688—690.

2. The District Court lacked jurisdiction to issue the injunction. Pp. 690—698.

(a) Arrow Transportation, supra, held that Congress in § 15(7) had vested exclusive jurisdiction in the ICC to suspend rates pending its final decision on their lawfulness and had deliberately extinguished judicial power to grant such relief; and the factual distinctions between the instant case and Arrow Transportation are inconsequential. Pp. 690—692.

(b) The alleged noncompliance by the ICC with NEPA did not give the District Court authority to grant the injunction, as NEPA was not intended to repeal by implication any other statute, and the policies identified in Arrow Transportation as the basis for § 15(7) would be substantially undermined if the courts were found to have suspension powers simply because of noncompliance with NEPA. Pp. 692—698.

346 F.Supp. 189, reversed and remanded.

Sol. Gen. Erwin N. Griswold, for the United States and Interstate Commerce Commission.

Hugh B. Cox, Washington, D.C., for the Aberdeen and Rockfish Railroad Company and others.

Peter H. Meyers, Washington, D.C., for Students Challenging Regulatory Agency Procedures, pro hac vice, by special leave of Court.

John F. Dienelt, Washington, D.C., for the Environmental Defense Fund, and others, pro hac vice, by special leave of Court.

Mr. Justice STEWART delivered the opinion of the Court.

Under the Interstate Commerce Act, the initiative for rate increases remains with the railroads. But in the absence of special permission from the Interstate Commerce Commission, a railroad seeking an increase must provide at least 30 days' notice to the Commission and the Public before putting the new rate into effect. 49 U.S.C. § 6(3).¹ During that 30-day period, the Com- mission may suspend the operation of the proposed rate for a maximum of seven months pending an investigation and decision on the lawfulness of the new rates. 49 U.S.C. § 15(7).² At the end of the seven-month period, the carrier may put the suspended rate into effect unless the Commission has earlier completed its investigation and found the rate unlawful.³

Proceeding under this regulatory scheme, on December 13, 1971, substantially all of the railroads in the United States requested Commission authorization to file on 5 days' notice a 2.5% surcharge on nearly all freight rates. The railroads sought a January 1, 1972, effective date for the new rates. The surcharge was proposed as an interim emergency measure designed to produce some $246 million annually in increased revenues pending adoption of selective rate increases on a permanent basis.

As justification for the proposed surcharge, the railroads alleged increasing costs and severely inadequate revenues. In its last general revenue increase case, less than two years earlier, the Commission had found:

'(T)he financial condition of the railroad industry as a whole, and the financial status of many individual carriers by rail, must be found to be at a dangerously low level. The precipitous decline in working capital and serious loss of liquidity has reduced many carriers to a truly marginal operation. This has been most clearly demonstrated by the recent bankruptcy application of the Penn Central. We think it undeniable that a number of other roads are approaching a similar financial crisis.' Ex parte Nos. 265/267, Increased Freight Rates, 1970 and 1971, 339 I.C.C. 125, 173.

The railroads alleged that, since the close of that proceeding, their costs had increased by over $1 billion on an annual basis, including $305 million in increased wages, while economic indicators such as decreased working capital and increased debt obligations pointed toward an ever-worsening financial condition.⁴

In an order dated December 21, 1971, the Commission acknowledged the need, particularly of some carriers, for increased revenues, but it concluded that five days' notice and a January 1, 1972, effective date 'would preclude the public from effective participation.' Ex parte No. 281, Increased Freight Rates and Charges, 1972, 340 I.C.C. 358, 361. The Commission authorized the railroads to refile the 2.5% surcharge with not less than 30 days' notice, and an effective date no earlier than February 5, 1972.

On January 5, 1972, the railroads refiled the surcharge, to become effective on February 5, 1972. Shippers, competing carriers, and other interested persons requested the Commission to suspend the tariff for the statutory seven-month period. Various environmental groups, including Students Challenging Regulatory Agency Procedures (SCRAP) and the Environmental Defense Fund (EDF), two of the appellees here, protested that failure to suspend the surcharge would cause their members 'economic recreational and aesthetic harm.' S...