Source: https://law.justia.com/cases/federal/appellate-courts/F2/711/331/302529/
Timestamp: 2019-11-14 20:59:50
Document Index: 610437854

Matched Legal Cases: ['§ 11', '§ 11', '§ 11', '§ 11', '§ 1180', '§ 551', '§ 553', '§ 1164', '§ 1112', '§ 706', '§ 706', '§ 11']

Central Vermont Railway, Inc., Canadian National Railwaycompany, and Grand Trunk Western Railroad Company,petitioners, v. Interstate Commerce Commission and United States of America,respondentsdelaware and Hudson Railway Company, Guilford Transportationindustries, Inc., Intervenors, 711 F.2d 331 (D.C. Cir. 1983) :: Justia
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Central Vermont Railway, Inc., Canadian National Railwaycompany, and Grand Trunk Western Railroad Company,petitioners, v. Interstate Commerce Commission and United States of America,respondentsdelaware and Hudson Railway Company, Guilford Transportationindustries, Inc., Intervenors, 711 F.2d 331 (D.C. Cir. 1983)
U.S. Court of Appeals for the District of Columbia Circuit - 711 F.2d 331 (D.C. Cir. 1983) Argued Feb. 25, 1983. Decided June 28, 1983
Canadian National appeals to this court, claiming that the ICC misanalyzed the effect of the merger on competition among rail carriers and that the ICC's "essential services" test for imposing protective conditions is too strict and does not comply with the statutory directive that the ICC consider the effect of the merger on "adequacy of transportation to the public." 49 U.S.C. § 11, 344(b) (1) (A). We affirm the Commission's determination that protective conditions are unnecessary because there exists effective truck competition.
The companion case to this one, Lamoille Valley Railroad v. ICC, 711 F.2d 295, 300-302 (D.C. Cir. 1983) describes the statutory scheme governing mergers of two "class I" railroads and the ICC's policies on [229 U.S.App.D.C. 55] such mergers.3 We incorporate that discussion by reference and pass on to the facts and issues involved in this case.
First, Canadian National argues that the Commission improperly relied on truck competition to ameliorate the substantial lessening of rail competition caused by the merger. It would have the Commission focus exclusively on rail competition. In antitrust terms, the Commission, in effect, defined the relevant product market as "transportation of freight," while Canadian National argues that " [t]he product [market] is the transportation of goods by rail only."7 We believe the Commission properly considered truck competition.
The Interstate Commerce Act broadly instructs the ICC to determine if a merger is "consistent with the public interest." 49 U.S.C. § 11,344(c). Canadian National relies on Congress' instruction to the Commission to "consider," in making that public interest determination, "whether the proposed transaction would have an adverse effect among rail carriers in the affected region." Id. § 11,344(b) (1) (E) (emphasis added).8
Section 11,344(b) (1) also, however, permits the Commission to consider factors other than those specifically listed; it provides that "the Commission shall consider at least the following ...." (Emphasis added.) The legislative history of § 11,344(b) (1) (E) confirms that the subsection merely codifies prior ICC practice and does not restrict the factors that the ICC may consider. As Congressman Panetta explained in introducing the provision as a floor amendment to the Staggers Rail Act of 1980:
Thus, the Commission may consider "intermodal" competition between truck and [229 U.S.App.D.C. 58] rail, so long as it also considers "intramodal" competition among rail carriers. Accord Gilbertville Trucking Co. v. United States, 371 U.S. 115, 127, 83 S. Ct. 217, 224, 9 L. Ed. 2d 177 (1962) ("The statute entrusts the Commission with the duty to decide what considerations other than those specifically mentioned ... should be given weight.").
As a general rule, when a statute requires an agency to "consider" a factor, the agency must reach "an 'express and considered conclusion' about the bearing of [the factor], but need not give 'any specific weight' to th [e] factor." Small Refiner Lead Phase-Down Task Force v. United States Environmental Protection Agency, 705 F.2d 506, 516 (D.C. Cir. 1983) (Clean Air Act) (quoting Weyerhaeuser Co. v. Costle, 590 F.2d 1011, 1045 (D.C. Cir. 1978) (Clean Water Act)). In this case, the ICC properly considered the relevance of competition among rail carriers, explaining that:
49 C.F.R. § 1180.1(c) (2) (ii) (1982). The Commission concluded that Canadian National's north-south service did not warrant protective conditions because it was not "essential." Canadian National challenges that conclusion.16
The ICC had previously approved the merger of the Maine Central with the Boston & Maine. Guilford Transp. Indus.--Control--Boston & Me. Corp., 366 I.C.C. 292 (1982) [hereinafter cited as Boston & Maine Merger ]. We review the ICC's decision concerning that merger in a companion case to this one, also issued today. Lamoille Valley R.R. v. ICC, 711 F.2d 295 (D.C. Cir. 1983)
Canadian National raises one other claim that was addressed in Lamoille Valley and can be disposed of quickly. Canadian National argues that the expedited procedural schedule used by the ICC in considering the merger was a "rule" within the meaning of the Administrative Procedure Act, 5 U.S.C. §§ 551(4), 553, and was improperly issued without notice and comment. For the reasons given in Lamoille Valley, 711 F.2d at 326-329, we hold that the schedule is exempt from the APA's notice and comment requirements as a "rule [ ] of agency ... procedure." 5 U.S.C. § 553(b) (A)
The ICC asserts that since the Northeast Rail Service Act of 1981 (NERSA), § 1164(a), 45 U.S.C. § 1112(b), required the ICC to issue a decision on Guilford's proposal to acquire the Delaware & Hudson within 180 days "with or without a hearing," a hearing was not required by statute and therefore the standard of review is "arbitrary and capricious," 5 U.S.C. § 706(2) (A), rather than "substantial evidence," id. § 706(2) (E). We need not decide whether Congress, in enacting NERSA, meant to change the well-established substantial evidence standard for review of ICC merger decisions, for any possible difference between the two standards of review would not affect our decision in either this case or Lamoille Valley
49 U.S.C. § 11,344(b) (1) provides:
See also Brown Shoe Co. v. United States, 370 U.S. 294, 325, 82 S. Ct. 1502, 1523, 8 L. Ed. 2d 510 (1962) ("The outer boundaries of a product market are determined by the reasonable interchangeability of use ... between the product itself and substitutes for it.") (footnote omitted); Union Pac. Corp.--Control--Missouri Pac. Corp., 366 I.C.C. 459, 503-04 (1982) (applying the Brown Shoe definition of product market), appeal filed sub nom. Southern Pac. Transp. Co. v. ICC, No. 82-2253 (D.C. Cir. argued June 6, 1983)
We hold only that the ICC may evaluate anticompetitive effects in terms of the "product markets" and "geographic markets" used in antitrust law, not that it must do so. See Seaboard Air Line R.R. v. United States, 382 U.S. 154, 86 S. Ct. 277, 15 L. Ed. 2d 223 (1965) (per curiam) (ICC need not directly apply antitrust analysis in reviewing a rail merger)
Verified Statement of Robert Walker, Assistant Vice President, Grand Trunk Western Railroad, at 7-8 (Mar. 29, 1982), J.A. at 137, 143-44 ("Although motor carriers are a factor in this market, railroads have a decided advantage ....") ; Supplemental Verified Statement of Phillip Larson, General Manager, Central Vermont Railway, at 14 (May 19, 1982), J.A. at 214, 227 (for most poultry growers on Canadian National's line, there is "no alternative to [rail] service other than higher priced motor carrier shipments")
The ultimate test for inclusion of two producers in a market, whether "product" market or "geographic" market, is reasonable substitutability of use. See 2 P. Areeda & D. Turner, Antitrust Law p 518 (1978); United States v. Marine Bancorp., 418 U.S. 602, 619, 94 S. Ct. 2856, 2868, 41 L. Ed. 2d 978 (1974)