Opinion ID: 445219
Heading Depth: 1
Heading Rank: 8

Heading: the federal standards established in the staggers act

Text: 92 Beyond their defense of the Indiana decision, petitioners' chief argument is that the Indiana Commission could not have violated a federal standard or procedure, within the meaning of section 11501(c), because the ICC has not adopted any national standard of revenue adequacy. This contention has a certain disingenuous appeal, but ultimately fails. It is true that the ICC has not promulgated, through any generic rulemaking, any national standard for maximum rail rates or overall revenue adequacy. The problem with the petitioners' argument, though, is that the ICC found that the approach of the Indiana Commission violated the provisions of the Staggers Act, not ICC revenue adequacy standards. The Act itself establishes federal standards that must be observed. See Utah Power & Light Co., supra, at 737; Wheeling-Pittsburgh Steel Corp. v. ICC, 723 F.2d 346, 354-55 (3d Cir.1983). This the complainants did not do. 93 Petitioners rely heavily on Kentucky Utilities Co. v. ICC, 721 F.2d 537 (6th Cir.1983), in which the ICC reversed the Kentucky Utilities Commission for using a rate method which, though consistent with the Staggers Act, differed from the formula subsequently approved by the ICC. The Sixth Circuit struck down the ICC's action: the ICC could not, according to the court, reverse a state commission for violating an ICC promulgated standard when it had not adopted any general standard. Id. at 544-45. There is a clear distinction, however, between Kentucky Utilities and this case. Here, the ICC has found the state decision to be in direct violation of the Staggers Act and the balancing approach that it entails. The ICC is challenging not the use or misuse of a particular rate formula, but rather the misinterpretation of the statute, the failure to balance faithfully and fairly the statutory factors. Thus, Kentucky Utilities simply has no application to this case. The rule sought to be applied by the petitioners would mean that the ICC would be entirely impotent to effectuate Congress' intent unless and until final revenue adequacy guidelines are adopted. Such a holding would immediately gut much of the Staggers Act. While modern regulatory practice has increasingly focused on the promulgation and enforcement of standards through rulemaking, it is well to remember that Congress itself can--and often does--establish federal standards. In the immediate context, the Staggers Act required the weighing of a number of statutory factors, and that some considerable weight be accorded to revenue adequacy. State proceedings that fail to heed these congressional pronouncements must be reversed by the ICC in the exercise of its section 11501(c) jurisdiction.