Source: https://law.justia.com/cases/federal/appellate-courts/F2/643/542/454133/
Timestamp: 2019-11-13 20:01:04
Document Index: 641548227

Matched Legal Cases: ['§ 10704', '§ 382', '§ 6362', '§ 1106', '§ 10707', '§ 10707', '§ 10709', '§ 202', '§ 1', '§ 10701', '§ 10101', '§ 202', '§ 1', '§ 10709', '§ 10709', '§ 10709', '§ 29', '§ 1109', '§ 10709']

Iowa Public Service Company, Petitioner, v. Interstate Commerce Commission and United States of America,respondents.burlington Northern, Inc. ("bn") and Chicago and Northwestern Transportation Co. ("cnw"),intervenor-respondents.burlington Northern, Inc., et al., Petitioners, v. the United States of America and Interstate Commercecommission, Respondents.iowa Public Service Company, Intervenor.burlington Northern, Inc., et al., Petitioners, v. the United States of America and Interstate Commercecommission, Respondents.iowa Power & Light Company et al., Intervenors, 643 F.2d 542 (8th Cir. 1981) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Eighth Circuit › 1981 › Iowa Public Service Company, Petitioner, v. Interstate Commerce Commission and United States of Amer...
Iowa Public Service Company, Petitioner, v. Interstate Commerce Commission and United States of America,respondents.burlington Northern, Inc. ("bn") and Chicago and Northwestern Transportation Co. ("cnw"),intervenor-respondents.burlington Northern, Inc., et al., Petitioners, v. the United States of America and Interstate Commercecommission, Respondents.iowa Public Service Company, Intervenor.burlington Northern, Inc., et al., Petitioners, v. the United States of America and Interstate Commercecommission, Respondents.iowa Power & Light Company et al., Intervenors, 643 F.2d 542 (8th Cir. 1981)
US Court of Appeals for the Eighth Circuit - 643 F.2d 542 (8th Cir. 1981) Submitted Oct. 16, 1980. Decided March 16, 1981. Rehearing Denied April 14, 1981
Courts traditionally have applied a deferential standard in reviewing rate determinations by an agency, Atchison, Topeka & Santa Fe Railway v. Wichita Board of Trade, 412 U.S. 800, 806, 93 S. Ct. 2367, 2374, 27 L. Ed. 2d 350 (1973), but the courts have an obligation to determine whether the Commission's decision comports with applicable law, whether there is evidence in the record to support the Commission's findings, and whether the agency's rationale is both discernible and defensible. San Antonio, Texas v. United States, 631 F.2d 831, 836 (D.C. Cir. 1980); Burlington Northern, Inc. v. United States, 549 F.2d 83, 88-89 (8th Cir. 1977). Our analysis of the cost issues tracks closely the well-reasoned analysis of similar issues by the District of Columbia Circuit in San Antonio, Texas v. United States, 631 F.2d at 837-53, and the Fifth Circuit in Celanese Chemical Co. v. United States, 632 F.2d 568, 572-78 (5th Cir. 1980). Our analysis is also influenced by the Commission's reconsideration of some of these issues in Unit Train Rates on Coal Burlington Northern, Inc., I.& S. No. 9199 (served October 1, 1980). We believe it is necessary to remand certain of these cost issues to the Commission so that uniform policies can be developed and applied.
The railroads next argue that the rate of return figured on locomotive investment should have taken into account the railroads' need to raise equity capital as provided for by the ratemaking provisions of the 4-R Act. 49 U.S.C. § 10704(a) (2). The Commission applied a 9.34% cost of capital rate to locomotives and cabooses, representing the interest rate of the railroads' current trust certificates. The railroads argue that the cost of capital in railroad equipment is the overall cost of capital rate of the railroad, including equity and debt, and not the particular financing rate of debt instruments that use the equipment as collateral. The railroads would apply to this equipment the same cost of capital as that applied to other investments, here 10.6%.
In sum, the Commission's treatment of locomotive capital costs withstands the arbitrary and capricious standard of review which applies to its ratemaking. Burlington Northern, Inc. v. United States, 555 F.2d at 640; see also Atchison, Topeka and Santa Fe Railway v. Wichita Board of Trade, 412 U.S. at 806, 93 S. Ct. at 2374 (plurality opinion); Arizona Grocery Co. v. Atchison, Topeka and Santa Fe Railway, 284 U.S. 370, 387-88, 52 S. Ct. 183, 185, 76 L. Ed. 348 (1932).
The Justice Department argues that the Commission's decision does not adequately consider the impact of its regulatory actions on the national energy policy. We agree and remand this case so that the Commission can comply with the Energy Policy and Conservation Act, Pub. L. No.94-163, § 382, 42 U.S.C. § 6362, and the regulations implementing this statute. 49 CFR §§ 1106.1-1106.8. See Celanese Chemical, 632 F.2d at 579.
The railroads argue that the Commission's decision, served July 13, 1979, came too late to serve as a basis for awarding refunds to IPS. We disagree. BN's and CNW's $10.69 joint rate went into effect September 15, 1978. The ten month extended deadline for a decision on this rate, as provided by 49 U.S.C. § 10707(b) (1) expired no earlier than July 15, 1979; consequently the decision was timely. We express no opinion herein as to whether the Commission can grant refunds on the basis of decisions issued after the expiration of time periods provided in 49 U.S.C. § 10707(b) (1).
Pursuant to Fed. R. App. P. 28(j), the railroads have moved for leave to refer to additional authorities. The railroads wish to place before the court Section 202 of the Staggers Rail Act of 1980, Pub. L. 96-448, Oct. 14, 1980, 94 Stat. 1895, which they allege deprives the Commission, and hence the court, of jurisdiction over the Sergeant Bluff rate as of the date the Act was signed into law.
We acknowledge the principle that when a law conferring jurisdiction is repealed without reservation as to pending cases, all cases fall with the law. Bruner v. United States, 343 U.S. 112, 116-17, 72 S. Ct. 581, 584, 96 L. Ed. 786 (1952). The present appeal, however, does not necessarily fall within this principle. Exceptions to retroactive application of a statute have been recognized where only private rights, as opposed to great national concerns, are involved, United States v. Schooner Peggy, 1 Cranch 103, 110, 2 L. Ed. 49 (1801), or where retroactive application would result in manifest injustice. Bradley v. School Board of Richmond, 416 U.S. 696, 716, 94 S. Ct. 2006, 2018, 40 L. Ed. 2d 476 (1974) (dictum); Thorpe v. Housing Authority of Durham, 393 U.S. 268, 282 n.43, 89 S. Ct. 518, 526 n.43, 21 L. Ed. 2d 474 (1969) (dictum), citing Greene v. United States, 376 U.S. 149, 84 S. Ct. 615, 11 L. Ed. 2d 576 (1964).
The ninety day period statutorily allowed for the Commission's determination of jurisdiction is long past. See 49 U.S.C. § 10709(b).11 All parties to this lengthy proceeding have looked to the Commission for an adjudication of their rights. Application of the Staggers Rail Act at this juncture could result in imposition of the $10.69 rate on IPS without an opportunity to be heard, in derogation of the parties' expectations. Bradley v. School Board of Richmond, 416 U.S. at 720, 94 S. Ct. at 2020.
For this reason, we deny the railroads' motion for leave to refer to additional authorities. We note also that as a general rule an agency is entitled to make the initial determination of its own jurisdiction. FPC v. Louisiana Power & Light Co., 406 U.S. 621, 647, 92 S. Ct. 1827, 1841, 32 L. Ed. 2d 369 (1972).
Burlington Northern, Inc. v. United States, 555 F.2d 637, 640 (8th Cir. 1977), held that the Commission's duty under § 202(b) of the 4-R Act, 49 U.S.C. § 1(5) (a-d), to make a finding of market dominance over the service to be rendered did not apply to proceedings begun before passage of the 4-R Act. The investigation in this case (I.C.C. Docket No. 37021) began by order of the ICC dated September 12, 1978, served September 14, 1978. This investigation began before the passage of the Revised Interstate Commerce Act, P.L. 95-473, § 10701-11916, 49 U.S.C. § 10101-11916, 92 Stat. 1337-1470 (October 13, 1978). Thus, the duty of the Commission was to determine if the carrier had "market dominance over the service to be rendered," 4-R Act, § 202(b), 49 U.S.C. § 1(5) (b), rather than to determine if the carrier had "market dominance over the transportation to which the rate applies," Revised Interstate Commerce Act, § 10709, 49 U.S.C. § 10709, 92 Stat. 1382. Any difference in the language between the two phrases is not substantive, H.R.No.95-1395, 95th Cong., 2d Sess. 5, reprinted in (1978) U.S.Code Cong. & Ad.News 3009, 3013, because the 1978 revisions were made merely for clarity and consistency, id. at 79-80, (1978) U.S.Code Cong. & Ad.News at 3088-89. Consequently, focus by the Commission, Government, IPS and BN on the language of § 10709 is not inappropriate
Assuming arguendo that the allegedly narrower arbitrary and capricious standard applies, we find that the difference between the two standards is largely semantic in the context of the present record. See also Pacific Legal Foundation v. Department of Transportation, 593 F.2d 1338, 1343 n.35 (D.C. Cir.), cert. denied, 444 U.S. 830, 100 S. Ct. 57, 62 L. Ed. 2d 38 (1979); Associated Industries of New York State, Inc. v. Department of Labor, 487 F.2d 342, 349-50 (2d Cir. 1973). See also National Nutritional Foods Association v. Weinberger, 512 F.2d 688, 705 (2d Cir. 1975) (Lumbard, J., concurring in the result); K. Davis, Administrative Law Treatise § 29.01-2 at 284, 285 (1980 Supp.); Note, Judicial Review of Facts in Informal Rulemaking: A Proposed Standard, 84 Yale L.J. 1750 (1975).
Our disposition does not require us to address one of the Commission's alternative grounds for finding market dominance, namely, a revenue-to- variable-cost ratio of 236% for the Sergeant Bluff traffic. See 49 CFR § 1109.1(g) (2) (ratio of 160% triggers a rebuttable presumption of market dominance). Because we vacate some of the Commission's cost determinations, we are unable to determine whether BN's market dominance over this transportation could be supported by an analysis of the ratio of revenue to variable costs
Because we remand several cost issues to the Commission, it is not possible to determine whether the revenue-to-variable-cost percentage here is so low as to result in a loss of jurisdiction under Section 202 of the Staggers Rail Act (to be codified at 49 U.S.C. § 10709(d) (2))