Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-94-01622/USCOURTS-caDC-94-01622-0/pdf.json

Parties Involved:
Burlington Northern Railroad Company
Petitioner
Interstate Commerce Commission
Terminated Party
Surface Transportation Board
Respondent
United States of America
Respondent
West Texas Utilities Company
Intervenor

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 15, 1995 Decided February 9, 1996

No. 94-1622

BURLINGTON NORTHERN RAILROAD COMPANY,

PETITIONER

v.

SURFACE TRANSPORTATION BOARD AND

THE UNITED STATES OF AMERICA,

RESPONDENTS

WEST TEXAS UTILITIES COMPANY,

INTERVENOR

On Petition for Review of an Order of the

Interstate Commerce Commission

Samuel M. Sipe, Jr., with whom John D. Graubert and Michael E. Roper were on the briefs, argued

the cause for petitioner.

Henri F. Rush, General Counsel, Surface Transportation Board, with whom Craig M. Keats,

Associate GeneralCounsel, and Judith A. Albert, Attorney, Surface TransportationBoard, and Anne

K. Bingaman, Assistant AttorneyGeneral, John J. Powers, III, and John P. Fonte, Attorneys, United

States Department of Justice, were on the brief, argued the cause for respondents.

Kelvin J. Dowd, Frank J. Pergolizzi, and Andrew B. Kolesar, III were on the brief for intervenor

West Texas Utilities Company. Donald G. Avery and William L. Slover entered appearances.

Before: BUCKLEY, WILLIAMS and HENDERSON, Circuit Judges.

Opinion for the Court filed by Circuit Judge WILLIAMS.

WILLIAMS, Circuit Judge: Petitioner Burlington Northern transports coal from the Powder

River Basin in Wyoming to the Oklaunion generating station in Texas for a coal-burning electric

utility, West Texas Utilities Company ("WTU"), an intervenor in these proceedings. WTU's coal

moved under contract with Burlington from 1986, when the Oklaunion generating station began

operating, until 1995, when the contract between the parties expired. Contract transport is an

alternative to traditional common carrier rail transport; once the responsible agencycurrently the

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1The Burlington-WTU contract itself is not part of the record and is described by Burlington as

"confidential." Brief for Petitioner at 3; see also 49 U.S.C. § 10713(b)(1) (1995) (requiring rail

carriers providing contract transport to file with the Commission any contract entered into,

"together with a summary of the contract containing such nonconfidential information as the

Commission prescribes"), amended by Termination Act § 102(a), 109 Stat. at 817 (to be codified

at 49 U.S.C. § 10709(d)(1)) (limiting filing requirement to contracts for transport of agricultural

products); 49 CFR §§ 1313.7, 1313.10-13 (1995) (prescribing information to be contained in

contract summary required by former § 10713(b)(1)). 

Surface Transportation Board, which replaced the Interstate Commerce Commission under the

recently-enacted ICC Termination Act of 1995 ("Termination Act"), Pub. L. No. 104-88, 109 Stat.

803, and previously the Commission itselfhas passed on a contract, transportation proceeds under

its terms, free from agency oversight. See 49 U.S.C. §§ 10701a, 10702 (1995), amended by

Termination Act § 102(a), 109 Stat. at 809-10 (to be codified at 49 U.S.C. §§ 10701, 10702)

(requiring rail carriers to establish rates and providing for agency oversight of reasonableness of

rates); id. § 10713(c), (h) & (i)(1), amended by Termination Act § 102(a), 109 Stat. at 817-18 (to

be codified at 49 U.S.C. § 10709(b), (c)(1) & (g)) (stating terms of agency review of contracts and

exempting contract transport from general agency oversight). The present case presents a question

at the cusp of the contract and common carrier forms of service: Where all parties assumed that

Burlington would provide common carrierservice ifit and WTU proved unable to agree on a contract

to replace their existing agreement, could the Commission, more than a year before contract service

was expected to end, order the carrier to file a tariff for common carrier service?

Burlington's contract with WTU was set to expire on December 31, 1996, or, in the event of

certain contingencies not specified in the record, as early aslate 1995.1 The parties informed us after

oral argument that the contract in fact expired in the fall of 1995, at which time service began on a

common carrier basis. More than a year earlier, however, WTU filed a complaint asking the

Commission to order Burlington to publish a "just and reasonable" rate for future common carrier

transport on the route. The Commission did so in August 1994, telling Burlington to file a tariff by

September 23, 1994. West Texas Utilities Co., Docket No. 41191 (served Aug. 24, 1994) (the

"August Decision"). Burlington sought a stay, which the Commission granted pending its own

decision on the matter, and then denied in a decision served October 14, 1994 (the "October

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2The Termination Act does not alter the common carrier status of rail carriers such as

Burlington. See Termination Act § 102(a), 109 Stat. at 807-08 (to be codified at 49 U.S.C. §

10501) (defining the jurisdiction of the Board); id., 109 Stat. at 830-31 (to be codified at 49

U.S.C. § 11101) (specifying common carrier obligations of rail carriers subject to Board's

jurisdiction). 

Decision"). Burlington filed the required tariff following the October Decision, and the Commission

began a proceeding to review whether the proposed rate was just and reasonable. Burlington now

seeks review of the Commission's August Decision. Because the Surface Transportation Board has

succeeded the Commission as the regulatory authority responsible for oversight of rail carriers, the

Board, not the Commission, is the respondent here. See Termination Act § 204(c)(1), 109 Stat. at

942.

The threshold issue before usis whether either the expiration oftheBurlington-WTU contract

or the passage of the Termination Act mootsthe case. We conclude that neither event has this effect.

We also reject the Board's and WTU's argument that the tariff filing order is not subject to review

because it is not a final order or, alternatively, is not ripe for review. On the merits, the Board and

WTU argue that the order should be upheld as an exercise of the Commission's authority under

former 49 U.S.C. § 10762 to require a common carrier to file a tariff for rates on service it "may

provide." 49 U.S.C. § 10762(a)(1) (1995), repealed by Termination Act § 102(a), 109 Stat. at 804-

52. We disagree and therefore reverse the Commission's decision.

I. Mootness

Article III confines federal courts to the resolution of actual cases or controversies, and thus

preventstheir passing onmoot questionsones where intervening events make it impossible to grant

the prevailing party effective relief. Church of Scientology v. United States, 113 S. Ct. 447, 449

(1992). Either the expiration of the Burlington-WTU contract or adoption of the Termination Act

might have that effect. The expiration of the contract might do so because, as Burlington concedes,

it placed Burlington under an immediate and ongoing obligation to provide service to WTU on a

common carrier basis, so that invalidation of the disputed tariff might not improve Burlington's

position in any way.2 The Termination Act might thwart effective relief for either of two reasons.

First, it abolishes the tariff filing requirement contained in former 49 U.S.C. § 10762, under which

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3We express no opinion as to whether the disputed order was in fact entered into in the

performance of a function retained by the Act. The function of overseeing the reasonableness of

rail rates for common carrier service is one that is retained by the Act, see Termination Act §

102(a), 109 Stat. at 809-10 (to be codified at 49 U.S.C. § 10701), and the tariff filing order might

be thought to have been entered into in the performance of that function. See October Decision

at 4 n.8. 

the Commission issued the disputed order. See Termination Act § 102(a), 109 Stat. at 804-52;

August Decision at 1 n.5; but see 49 U.S.C. § 10702(a) (1995), amended by Termination Act §

102(a), 109 Stat. at 810 (to be codified at 49 U.S.C. § 10702(a)) (continuing separate requirement

that a rail carrier subject to the jurisdiction of the Board "establish ... rates ... for transportation and

service it may provide"). Second, the Termination Act provides that "[a]ll orders ... that have been

issued ... by the Interstate Commerce Commission ... in the performance of any function that is

transferred by this Act ... shall continue in effect according to their terms...." Termination Act §

204(a), 109 Stat. at 941 (emphasis added). If, as seems possible, the disputed order was not entered

into "in the performance of " a function retained by the Act (in light of the Act's abolition of the tariff

filing requirement), then the order will not "continue in effect" under the Act. In this circumstance,

our invalidation of the compulsory tariff would not afford Burlington any relief not already granted

by the Act itself.3

We need not decide the impact of these events on our ability to grant meaningful relief,

however, because the situation before us falls into the category of cases "capable of repetition, yet

evading review," and hence independentlysatisfiesArticle III's case-or-controversyrequirement. See

Southern Pacific Terminal Co. v. ICC, 219 U.S. 498, 515 (1911); see also Doe v. Sullivan, 938 F.2d

1370, 1376-79 (D.C. Cir. 1991). On first glance, the proposition that the situation is "capable of

repetition" might appear dubious in light of the Termination Act's abolition of the tariff filing

requirement. In a letter filed with the court shortly after passage of the Act, however, the Board

informed us that the agency's posture on its authority to order rail carriers to establish (though not

file) ratesfor common carrier service was unchanged. According to the Board's letter, since carriers

remain subject to general common carrier obligations under the Act, "the Board could require a

railroad to quote a common carrier rate to a shipper that has requested such a rate quotation from

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4

Indeed, in the October Decision the Commission cited explicitly to § 10702 as well as to

former § 10762 in arguing its authority to compel tariff filing by Burlington. See October

Decision at 1; id. at 4. 

the carrier," though the Board could not any longer require filing of the rate. Although a statement

of the Board after a proceeding addressing the matter would be more authoritative than its general

counsel's letter, we see no reason to doubt that counsel's statement represents the Board's position

on the legal question at issue. Moreover, as noted above, although the Termination Act abolishes the

tariff filing requirement, it preserves the old statute's requirement that rail carriers "establish" rates

for service they "may provide"precisely the words of former 49 U.S.C. § 10762 on which the

Commission relied in promulgating the order under review here. See Termination Act § 102(a), 109

Stat. at 810 (to be codified at 49 U.S.C. § 10702); August Decision at 1 n.5; October Decision at

5.4 Accordingly, any future effort by the Board to compel a railroad to state a rate for common

carrier service that was expected to follow the end of ongoing contract service would pose an

interpretive issue substantially similar to the one Burlington has raised here.

And there is a "reasonable expectation" that Burlington will in the future be subject to such

compulsion. Weinstein v. Bradford, 423 U.S. 147, 149 (1975). Burlington has coal transportation

contracts with nearly 50 electric utilities, and the expiration of each contract carries the potential for

a repeat of the WTU events. Indeed, it appears that Burlington has already been confronted with a

utility customer's request for the relief obtained by WTU. In a post-argument brief, Burlington told

us that the Commission had recently entertained a shipper's motion for an order directing the filing

of a tariff in parallel circumstances. See Western Resources, Inc., Docket No. 41604 (served Aug.

18, 1995); Supplemental Brief of Petitioner at 12 n.5. The railroad involved was Atchison, Topeka,

and Sante Fe RailwayCompany, which merged withBurlington in the fall of 1995 and thusis, legally,

Burlington. Moreover, the Commission's (and, now, the Board's) insistence in this litigation on the

value of having the authority to order tariff filing (and, now, establishment of rates) in this sort of

situation obviously evidencesthe probability ofsuch ordersrecurring in the future; normally (though

not always, to be sure), a power is not terribly important to someone who does not plan to use it.

The agency action here would also evade review, because of the virtual certainty that

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5The parties do not dispute (based on representations in letters filed with the court) that the

suit survives the passage of the Termination Act under the terms of the Act itself. We see no

reason to question this conclusion. The Act provides that a suit is to continue if it "involves a

function retained and transferred ... to the Board" under the Act. See Termination Act §

204(c)(2), 109 Stat. at 942. Given the Board's assertion of continuing authority to order

establishment of rates for common carrier service well in advance of the commencement of such

service, we think the Board could not seriously claim that the suit does not involve a function

"retained and transferred" to it. 

contracts giving rise to such action will expire before the conclusion of judicial review of the action

(ordering filing or establishment of rates). Indeed, the Board concedes this point, as it must in light

of the cases: both Supreme Court and circuit precedent hold that orders of less than two years'

duration ordinarily evade review. Southern Pacific, 219 U.S. at 514-16; In re Reporters Comm. for

Freedom of the Press, 773 F.2d 1325, 1329 (D.C. Cir. 1985); see also First National Bank of Boston

v. Bellotti, 435 U.S. 765, 774 (1978) (duration of 18 months too short for full litigation). A Board

order requiring a carrier to establish a rate for traffic that may begin moving in common carrier

service in, say, a year, would generally not be susceptible of review prior to the commencement of

service. Thus, regardless of any limits on affording Burlington effective relief from the August

Decision, the situation confronting Burlington is capable of repetition yet evades review, and hence

satisfies the case-or-controversy requirement.5

II. Finality and Ripeness

"Final orders" of the Commission were made subject to review in the courts of appeals by 28

U.S.C. §§ 2321(a), 2342(5) (1995), amended by Termination Act § 305(c) & (d), 109 Stat. at 945

(substituting Board for Commission in jurisdictional provisions). The Board and WTU argue that

the August Decision is not "final," and thus not subject to our jurisdiction, because the tariff filed by

Burlington was simply the initial step in a proceeding to establish reasonable rates for the shipment

of WTU's traffic after expiration of the contract. The Board and WTU also argue that even if the

order is final, it is unripe. We disagree on both counts.

A. Finality.

An administrative order is final when "rights or obligations have been determined or legal

consequences will flow from the agency action." Port of Boston Marine Terminal Ass'n v.

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6Abolition of the tariff filing requirement under the Termination Act means that a kindred

order promulgated in the future would be an order to establish a rate, rather than an order to file a

tariff. The quoted rate, unlike a filed rate, might lack "the force of law"that is, might not

impose an obligation on the carrier to transport traffic presented to it at the specified rate. 

However, the fact that a future order to establish a rate might not be a final order affects neither

the finality of the order now before us nor the conclusion that the situation presented satisfies the

"capable of repetition" requirement. 

Rederiaktiebolaget Transatlantic, 400 U.S. 62, 71 (1970). The order must "impose an obligation,

denya right or fix some legalrelationship as a consummation ofthe administrative process." Chicago

& Southern Air Lines, Inc. v. Waterman Steamship Corp., 333 U.S. 103, 113 (1948); see also

Mountain States Telephone &Telegraph Co. v. FCC, 939 F.2d 1021, 1027 (D.C. Cir. 1991) (same).

The Board notes that "all agency orders fix rights and obligations in some way or other, and yet not

all are final." Brief for Respondents at 12. True enough. Typically, for example, the rights and

obligations flowing from an order to participate in a proceeding are not "the sorts of rights and

obligations" that make an order final. Aluminum Co. of America v. United States, 790 F.2d 938, 941

(D.C. Cir. 1986); see also FTC v. Standard Oil Co., 449 U.S. 232, 241-43 (1980) (agency

determination to commence proceedings is not final agency action); Peter Kiewit Sons' Co. v. Army

Corps of Engineers, 714 F.2d 163, 168 (D.C. Cir. 1983) (similar).

The compulsory tariff filing, however, had immediate effects on legal rights relating directly

to the parties' primary conduct. Once filed, a tariff binds the filing party "with the force of law."

Lowden v. Simonds-Shields-Lonsdale Grain Co., 306 U.S. 516, 520 (1939). Indeed, the parties

agree that Burlington'stariff for the WTU traffic placed it under an immediate obligation to transport

any traffic presented to it under the terms of the tariff. See Tr. of Oral Argument at 4, 13.6

Perhapsthe Board's and WTU's argument isthat the compulsory filing (well in advance ofthe

anticipated expiration date of the contract) had no immediate practical consequencesfor Burlington.

See, e.g., Brief for Respondents at 12-13; Brief of Intervenor West Texas Utilities Co. at 17-18.

This argument, however, is belied by the Commission's own analysis, in its October Decision, of the

ramifications of not ordering a filingan analysis that reveals how the compulsory filing affected

Burlington, not because it obliged the railroad to participate in a proceeding, but rather because of

the timing chosen by the Commission for the onset of that obligation. Explaining the importance of

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the compulsory filing to WTU, the Commission observed that "a reasonable degree of advance

certainty regarding costs is imperative before a utility can design a rate structure, obtain regulatory

approvalfor it, and implement it." October Decision at 9. Transportation costs represent a significant

component of WTU's overall costs; thus, "[i]f [Burlington] were to publish tariff rates at the last

moment and theywere subsequently found unreasonable in an investigation,"WTU would be "forced

to go through the same time-consuming procedures for designing and implementing a new electric

rate structure...." Id. This prospect of "protracted and costly Federal and State regulatory

proceedings following a last-minute [Burlington] tariff publication" might have "a chilling effect on

its ability to negotiate a reasonable contract rate with [Burlington]." Id. at 9 n.19. The Commission

closed its analysis with an explicit statement of the likely effects on the negotiations between

Burlington and WTU: "Essentially, the cumulative cost of a coal rate reasonableness proceeding

sandwiched between electric rate proceedings and the payment of refunds could force [WTU], as a

practical matter, to accept a contract rate that could be at a premium above what would otherwise

be a maximum reasonable tariff rate." Id. (emphasis added); see also WTU's Reply to Supplemental

Memorandum, West Texas Utilities Co., Docket No. 41191 (similar). The Commission itself thus

explicitly recognized that the tariff filing order might have shifted the balance in the parties'

negotiations over a new contract by altering the default situationwhat would prevail were no

agreement reached.

B. Ripeness.

The Board and WTU argue that if Burlington's claim is not moot, it is unripe. Cf. Sullivan,

938 F.2d at 1379 ("The government argues that Doe's challenge [to the use of experimental drugs

on military personnel] is either too late or too early: moot because Operation Desert Storm is over;

not ripe, because the next conflict is not yet upon us."). Paradoxical as the pairing of those arguments

may be, ripeness is, of course, an independent requirement for judicial reviewone that we find is

satisfied here.

Ripeness depends on "the fitness of the issues for judicial decision and the hardship to the

parties of withholding court consideration." Abbott Laboratories v. Gardner, 387 U.S. 136, 149

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(1967). Burlington raises a purely legal questionwhether the Commission had statutory authority

to order the filing of a tariff in the absence of any expectation of imminent common carrier

serviceand such questions are typically found fit for judicialreview. See Abbott Laboratories, 387

U.S. at 149; Mississippi Valley Gas Co. v. FERC, 68 F.3d 503, 508 (D.C. Cir. 1995). Furthermore,

there is no suggestion that the Commission's policy, as reaffirmed by the Board in its recent letter to

the court, has not "crystallized," or that there maybe some other materialinstitutional advantage from

deferring review. See Eagle-Picher Ind. v. EPA, 759 F.2d 905, 915 (D.C. Cir. 1985).

The hardship to Burlington from the withholding of judicial review has plainly declined since

expiration of its contract with WTU and the start of its common carrier service. But the reasons why

the case is not moot define the residual hardship. Without review now, Burlington will be subjected

to continued risk ofsimilar agency action in the future. Particularly since without review Burlington

faces the prospect of never securing any judicial remedy, these hardships are adequate to sustain

judicial review.

III. The Commission's Authority To Order Tariff Filing

Before turning to the heart of the question presented by Burlington's petition for review, we

must first dispose of the suggestion by the Board and WTU that Burlington in essence agreed to the

very order now disputed. The suggestion rests on Burlington's statement that it was willing "to

publish a unit train tariff[suitable for WTU'straffic] which would be in place if and when WTU's coal

ceases to move under contract." Supplemental Memorandum in Support of Burlington Northern

Railroad Company's Motion to Dismiss, West Texas Utilities Co., Docket No. 41191 (emphasis

added). But this is plainly not a general offer to file a tariff whenever the Commission pleased.

Indeed, the Commission itselfsummarized the offer as a commitment to publish a unit train tariff "in

sufficient time to avoid any rail service interruption." October Decision at 8.

This brings us directly to the question whether the Commission had statutory authority to

impose upon a rail carrier a current obligation to file a tariff specifying a rate for trafficsuch as

WTU's as of the date of the August Decisionthat would not be ready to move under the rate until

months or years down the road. The Board asserts that the Commission enjoyed broad authority to

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investigate possible violations of statutory requirements and to "take appropriate action to compel

compliance" with these requirements. 49 U.S.C. § 11701(a) (1995), amended by Termination Act

§ 102(a), 109 Stat. at 845 (to be codified at 49 U.S.C. § 11701(a)) (tying investigative authority to

the filing of a complaint seeking investigation). But these powers appear ancillary; unless there was

statutoryauthorityelsewhere to require the tarifffiling ordered bytheCommission, general authority

to see to it that carriers followed the statute's requirements is of no use. In fact, as noted above, the

Commission rested its decision on former 49 U.S.C. § 10762, which provided that

(a)(1) A carrier providing transportation or service subject to the jurisdiction of the

Interstate Commerce Commission under chapter 105 of[title 49]shallpublish and file

with the Commission tariffs containing the rates and (A) if a common carrier,

classifications, rules, and practices related to those rates, ... established under this

chapter for transportation or service it may provide under this subtitle.

Id. § 10762(a)(1) (emphasis added),repealed by Termination Act § 102(a), 109 Stat. at 804-52; but

see id. § 10702(a), amended by Termination Act § 102(a), 109 Stat. at 810 (to be codified at 49

U.S.C. § 10702(a)) (requiring a rail carrier subject to the jurisdiction of the Board to "establish ...

rates ... for transportation and service it may provide"). Whether the Commission's judgment may

be upheld turns on whether its interpretation of former § 10762 was either mandated by the

unambiguous meaning of the statute or permissible as one of several reasonable constructions of

ambiguousstatutorylanguage. See Chevron, Inc. v. NRDC, 467 U.S. 837, 843 (1984). We conclude

that the Commission'sinterpretation was not a permissible construction of former § 10762 and, thus,

a fortiori, was not mandated by the language of the statute.

Although the opening words of former § 10762 limited its application to carriers "providing

service," its final ones required a carrier to publish a tariff for transportation or service it "may

provide," with no express temporal limitation. The Commission relied on the familiar argument that

since such limitations were found elsewhere in the statute, "Congress knew how to impose a temporal

constraint on the Commission's jurisdiction when it wanted to do so," and "[t]he fact that it did not

do so [here] strongly suggests that it did not intend to do so." October Decision at 4. The

Commission went on to argue that because of the sharp time limits imposed by former 49 U.S.C. §

10707(b) on its power to suspend a newly filed rate, its expansive reading of former § 10762 was

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7The Termination Act does not include any analogue to former § 10707, nor does it provide

any new form of authorization for suspension of newly established rates. As will become apparent

in the discussion to follow, this change in the law suggests that any future action by the Board

along the lines of the Commission's action here would be on even weaker statutory ground than

was the action taken here. 

essential. See October Decision at 4-5.7

We read former § 10707 as having preciselythe opposite effect: the sharp time limits imposed

by the section indicate that the Commission had only very limited power to suspend carrier-chosen

rates pending completion of a Commission proceeding. Former § 10707 began by authorizing the

Commission to investigate newly filed rates and requiring that any Commission proceeding as to the

rate's compliance with the statute be completed within five monthswhich the Commission could

extend to eight months by reporting to Congress and explaining its delay. See 49 U.S.C. § 10707(a)

& (b)(1) (1995), repealed by Termination Act § 102(a), 109 Stat. at 804-52. Former § 10707 then

specified what would happen if the Commission failed to reach a final decision within the applicable

time period: "[T]he rate ... (A) is effective at the end of that time period [allowed for the

proceeding]; or (B) if already in effect at the end of that time period, remains in effect." Id. §

10707(b)(1), repealed by Termination Act § 102(a), 109 Stat. at 804-52. In effect, then, it was any

suspension of the rate that was limited to five months (or, contingently, eight), as the Commission

clearly understood. See October Decision at 4 (citing former § 10707(b) for proposition that its

authority to suspend was limited to five months). 

Former § 10707 not only limited the duration of suspension but also specified limited

circumstances in which the Commission could suspend a rate at all:

(1) The Commission may not suspend a proposed rate ... unless it appears from the

specific facts shown by the verified statement of a person that

(A) it is substantially likely that the protestant will prevail on the

merits;

(B) without suspension, the proposed rate change will cause

substantial injury to the protestant ...; and

(C) because of the peculiar economic circumstances ofthe protestant,

the provisions of subsection (d) of this section [providing for payment of

reparations in the event of overpayment by a shipper] do not protect the

protestant.

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8The Termination Act provides that the Board "shall promptly rescind all regulations

established by the Interstate Commerce Commission that are based on provisions of law repealed

and not substantively reenacted by this Act." Termination Act § 204(a), 109 Stat. at 941. So far

as appears, section 1314.5 has not yet been repealed, but we assume that repeal will occur shortly

(if it has not already). 

(2) The burden shall be on the protestant to prove the matters described in paragraph

(1)....

49 U.S.C. § 10707(c) (1995), repealed by Termination Act § 102(a), 109 Stat. at 804-52.

Finally, the statutoryconstraints on suspensionwere framed by the rules governing the period

between a carrier's filing of a rate and the rate's effective date. The carrier specified the rate's

effective date in the first instance, subject to the requirement that the date be at least 20 days after

publication in the case of "a proposed rate change resulting in an increased rate" and at least one day

after publication in the case of a new rate or a rate reduction. See id. § 10762(c)(3) & (d)(1) (setting

20-day interval for rate increases and new rates and 10-day interval for rate reductions, and

authorizing Commission to reduce statutory notice requirements by regulation), repealed by

Termination Act § 102(a), 109 Stat. at 804-52; 49 CFR § 1314.5 (1995) (setting 20-day interval for

rate increases and 1-day interval for new rates and rate reductions).8

Taken as a whole, then, the statutory scheme against which the Commission's action must be

measured was one under which a rate could go into effect almost immediately and remain in effect

unless and until a shipper established the narrow grounds for suspensionthat the rate would cause

"substantial injury" and that due to its "peculiar circumstances" the reparations provisions would

supply inadequate protection. In other words, the Commission had extremely limited authority to

compel rail carriers to serve at rates other than those of their own choosing before completion of a

Commission proceeding assessing the rates. Viewed in this light, the Commission's August Decision

was no more than an end-run around the statutory schemejump-starting the rate review process

well in advance ofthe earliest possible date at which common carrierservice could begin, and thereby

avoiding the practical force of the statutory limits on its authority.

Indeed, the Commission was quite explicit that its purpose in ordering early filing by

Burlington was to ensure that a Commission-approved rate would be on file by the earliest possible

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9The Commission acknowledged the possibility of solving the excessive rate problem by

prescribing an interim rate for Burlington's service. It concluded, however, that it lacked the

authority, before conducting a full rate reasonableness proceeding, to prescribe a specific rate at

which Burlington would be required to serve. See October Decision at 5 n.10. While the

Commission acknowledged that it could notify Burlington of the range of rates it would deem

acceptable, see In re Trans Alaska Pipeline Rate Cases, 436 U.S. 631, 652-53 (1978), Burlington

would be under no obligation to actually provide service at a rate within this range. 

10It is not obvious to us which (if any) provision of the statute explicitly entitled a shipper in

WTU's position to collect reparations for earlier overpayment. Former § 10707(d)(1) ordered

reparations in the event of an unsuspended rate increase found to be unreasonable, and former §

10707(d)(2) allowed the carrier to collect refunds for a suspended rate later found to be in whole

or in part reasonable. Former § 10707(d)(3) applied only to a rate decrease ultimately found to

be reasonable. The Supreme Court upheld the Commission's authority to order refunds in

connection with an initial rate in the case of an apparently similar statutory gap, see Trans Alaska

Pipeline Rate Cases, 436 U.S. at 654-55, and presumably a similar result would have obtained

here. In any event, the parties all assume that reparations would have been available for WTU in

date at which Burlington's contract with WTU could expire:

[Burlington's] approach ... would put theCommission and West Texasin an untenable

position by disabling us from meaningfully exercising our jurisdiction at the

appropriate time. It would mean that West Texas's only means of challenging a newly

published tariff rate that it viewed as unreasonable would be through filing a protest

seeking either an investigation or a suspension and investigation of the allegedly

unlawful rate under [former] 49 U.S.C. [§§] 10701a [specifying standards for rail

carriers' rates] and 10707.

October Decision at 4. The Commission found this remedy for WTU unacceptable because it might

require WTU to pay an unreasonably high rate during the course of the Commission proceeding and

only later receive reparations for its overpayment (with interest at a rate the Board does not claim is

unrealistic). The Commission noted that WTU would risk substantial (temporary) overpayment

whether or not the Commission suspended Burlington's rate. If the rate were not suspended, WTU

would be required to pay it, and if it were suspended (an action that could only be taken, of course,

if WTU met the statutory requirements), then the applicable rate would be a "single-car class rate"

that Burlington had on file with the Commissiona rate that the Commission found would be

"unsuitably high" for WTU'straffic. Id. at 5.9In any event, under either route, the fact that "coal rate

investigations are measured in terms of yearsrather than weeks" meant that WTU would be required

to pay the potentially excessive rate for an "extended time period," and, the Commission concluded,

"[t]he uncertainty associated with an extended rate investigation would play havoc with the utility's

ability in turn to set rates for its electric consumers." Id.10

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the event of its payment of a rate later found to be unreasonable. 

We have no doubt that payment of an unreasonably high rate for some period of time could

have worked hardship on WTU. But the short answer to the Commission's argument is that any

hardship visited upon WTU would have followed directly from the balance of interestsstruck by the

statute itself. Congress could have written former § 10707 to permit suspension for a much longer

period than the five (or eight) months specified by sub-section (b) of that section, and for a much

broader set of reasons than those specified by sub- section (c). Such an arrangement would have

reflected a different balance of carriers' and shippers' interests, one more favorable to shippers than

the arrangement Congress actually chose. Instead it decided to allow carrier-chosen rates to go into

effect before the Commission had the chance to pass on them, except where relatively narrow criteria

for suspension were met, and even then only for a period that is relatively short in relation to the

length of Commission rate proceedings (measured in years, as the Commission said). The

congressional combination, assigning to the carrier great flexibility asto the effective date ofitstariff

filings, and to the Commission very limited suspension power, had the effect of assuring that for the

most part carriers did not pay the price for lags in Commission rate proceedings. The Commission's

proposed end-run would have destroyed that protection.

We recognize that the circumstances here were special. The happenstance of the somewhat

archaic single-car rate on file with the Commission meant that the default rate in the event of

suspension would have been relatively high; indeed, for any initiation of service the absence of a

plausible default rate would tend to blunt the Commission's suspension remedy. There are two

answers to this, however. First, the Commission's reading of "may provide" in former § 10762 was

not inherently susceptible to being limited to initial service. If, for example, the Commission had

found itself confronting circumstances where technological or other developmentsmade a drop in the

reasonable level of rates foreseeable, then (on its reading of former § 10762) it could have ordered

a filing well in advance of when the drop in rates would actually occur, thus permitting it to steal a

march on the carrier. Second, there was an obvious reason for Congress to have allowed a carrier

comparatively greater de facto flexibility on initial service. Congress limited the Commission's

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rate-setting power to cases where the carrier enjoyed "market dominance." See 49 U.S.C. § 10709(c)

(1995), amended by Termination Act § 102(a), 109 Stat. at 816 (to be codified at 49 U.S.C. §

10707(c)) (making conforming amendments to statutory language). But for service so new that it

involves construction of a new rail line, a carrier would be unlikely to have such dominance, as

prospective shippers could negotiate with a range of potential carriers to provide the new transport,

and thus could take advantage of competition among such carriers. But the statutory language point

is in any event controlling: the Commission's reading of the statute would have permitted it to order

advance filings in circumstances far less exigent than those present here.

We note WTU's argument that the Commission had the authority to initiate a rate

reasonableness proceeding based on the existing single-car rate Burlington had on file with the

Commission, as occurred in San Antonio, Tex., 355 I.C.C. 405 (1976), aff'd on other grounds sub

nom. Burlington Northern, Inc. v. United States, 555 F.2d 637 (8th Cir. 1977). See also Akron,

Canton & Youngstown R.R. Co. v. ICC, 611 F.2d 1162, 1165 (6th Cir. 1979) (relying on

unreasonableness of existing tariff terms to uphold carriage requirement for previously excluded

traffic). As the Commission recognized, see October Decision at 6 & n.13 (emphasizing that the

Commission was "not here reviewing the [single-car] class rate") (emphasis added); see also id. at

5 n.11 (similar), any such approach would have raised questions under § 229 ofthe Staggers RailAct

of 1980, Pub. L. No. 96-448, 94 Stat. 1895 (reproduced as historical and statutory note to former

49 U.S.C. § 10701a (1995)), which provides limited grandfathering (as against reasonableness

attacks) to all rates in effect on the effective date of the Staggers Act. As the Commission chose not

to initiate review of the single-car rate, the issues such a device might have raised are not before us,

and we cannot assume the validity of the alternative device as a basis for reasoning about what the

Commission in fact chose to do.

* * *

The Commission's August Decision surely "vindicate[d] [shippers'] rights," as the Board

repeatedly suggests. E.g., Brief for Respondent at 10; see also In re Trans Alaska Pipeline Rate

Cases, 436 U.S. 631, 653 (1978) (stating, in upholding Commission action, that the action was "an

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intelligent and practical exercise of [the Commission's] suspension power which is thoroughly in

accord with Congress' goal ... to strike a fair balance between the needs of the public and the needs

ofregulated carriers"). The problem, however, is that the rights vindicated by the Commission's order

are directly at odds with rights that were expressly established by the statute. Accordingly, the

petition for review is

Granted.

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