Opinion ID: 405328
Heading Depth: 1
Heading Rank: 4

Heading: changes brought about by the staggers act

Text: 23 Having agreed with the ICC and FLS that their actions were permissible under pre-Staggers Act law, we have little trouble in concluding that they remain permissible following passage of the Staggers Act. The words of section 10705a(c)(2) prohibiting unilateral cancellation in certain circumstances refer specifically to cancel(lation) under this subsection. The legislative history of the Staggers Act also makes clear that section 10705a was designed to supplement, not to supplant, existing rights of cancellation. 24 These provisions ... in no way imply an intent on the part of Conferees that a carrier's existing rights under the Act to secure improved earnings over specific routes should be limited.... (E)xisting remedies, assuming the Commission chooses to administer them in order to realize the revenue adequacy goals of the Act, should be adequate to remedy other joint route and division problems. 25 H.R.Rep.No. 1430, 96th Cong., 2d Sess. 112, reprinted in 1980 U.S.Code Cong. & Ad.News 4110, 4144. Clearly, the authority to cancel routes under the new section 10705a should not be construed to inhibit or prohibit the Commission from cancellations under existing law. 126 Cong.Rec. H10085 (daily ed. Sept. 30, 1980) (remarks of Congressman Staggers), as corrected by id. E4806 (daily ed. Oct. 2, 1980). 26 Indeed, Southern freely acknowledges that a reading of the post-Staggers Act statute (that) served to narrow joint rate cancellation options existing under prior law ... admittedly would be untenable because the framers of the Staggers Act undeniably intended to broaden preexisting cancellation remedies. Supplemental Brief for Petitioner at 15 (emphasis in original) (citing 126 Cong.Rec. H8572 (daily ed. Sept. 9, 1980) (remarks of Congressman Eckhardt)). We read the pre-Staggers Act portions of the Interstate Commerce Act as allowing unilateral joint-rate cancellations subject only to contractual limitations and the ICC's suspension and investigation powers under sections 10705 and 10707. Southern's reading of section 10705a as the only possible means of canceling joint rates, therefore, narrows joint-rate-cancellation options and is accordingly untenable. 27 We perceive no anomaly in the coexistence of two methods of joint-rate cancellation. Section 10705a serves the distressed railroad (i.e., one not recovering 110% of variable costs on the routes in question), which need only file its tariff in order to have joint rates canceled in forty-five days. Lest this cancellation power be abused-to present nondistressed railroads from seeking its procedural advantages-section 10705a(c)(4) mandates that the existing joint rate ... remain in effect during the pendency of the Commission's consideration when a showing is made that the railroad, despite proceeding under section 10705a, is recovering more than 110% of variable costs. The pre-Staggers Act sections, on the other hand, allow all railroads to cancel rates. A railroad proceeding under pre-Staggers Act law runs the risk that the ICC will exercise its discretionary, unreviewable suspension power-a risk not present for railroads canceling truly noncompensatory rates under section 10705a. But in a pre-Staggers Act proceeding, the ICC may also exercise its unreviewable power not to suspend-an advantage to railroads that are adequately compensated by present joint rates but perceive competitive advantages to be gained by escaping from them. In short, our reading renders no provision of the Interstate Commerce Act surplusage, as Southern contends, for railroads not earning 110% will rationally file under section 10705a, whereas those earning 110% will file under pre-Staggers Act provisions. Congress continued the ICC's role as arbiter of the public interest in most joint-rate-cancellation cases, but carved out an exception to make cancellation of noncompensatory rates easier, accompanied by a penalty clause 14 for those who would misuse the exception.