Opinion ID: 383816
Heading Depth: 2
Heading Rank: 2

Heading: Market Share Presumption

Text: 75 Under the Commission's market share presumption of market dominance, carriers are presumed to enjoy market dominance where they have handled at least 70% of the involved traffic during the preceding year. 49 C.F.R. § 1109.1(g)(1). Here no traffic has moved in the past from Axial to Coleto Creek, but when it commences, the railroads will have 100% of the market. 39 The Commission found that the market share presumption was irrelevant in this case, noting: 76 In the movement under consideration here, no traffic has existed in the past. Although the utility company has used coal from sources in South Africa, it has not done this on a regular basis. Accordingly, the first presumptive test is not relevant to the situation presented here. 77 (J.A. III, p. 1942). 78 While the Commission is correct in literally reading the market share presumption to be inapplicable to a new movement such as the movement to Coleto Creek, the Commission has in the past weighed the application of the market share presumption in new movements of coal and has found that the market share allegation does merit serious consideration. Kings Mill, 359 I.C.C. at 761. Kings Mill is very similar to this case, involving unit-train movements of coal in shipper-supplied equipment from a mine with which the shipper had contracted for large quantities over a long period of time. It is especially significant for the case at hand because the only stated reason the Commission gave for finding market dominance in Kings Mill was that the shipper's market share allegation had been demonstrated in light of the fact that a long-term commitment to a particular source had been made. Ibid. 79 This same reasoning was used in an even earlier case, Smithers Lake, again involving unit-train shipments of coal in shipper-supplied cars from a contract source. In Smithers Lake, the railroads expressly argued that the market share presumption could not apply since there had been no prior traffic between the origin and destination. 358 I.C.C. at 542. The Commission rejected this reasoning, stating: 80 (A)lthough the market share presumption is literally inapplicable to new movements, the fact that all of the subject traffic will be handled by the respondents is clearly an important factor. No evidence has been presented which would indicate that respondents will control less than 70 percent of the market from Cordero (the mine) to Smithers Lake (the generating plant) once actual movements commence. 81 358 I.C.C. at 555. This reasoning was a significant factor in Smithers Lake as to why the Commission found market dominance. Accordingly, on remand, the Commission shall either adhere to its prior decisions such as Kings Mill and Smithers Lake or explain its deviation.