Opinion ID: 351802
Heading Depth: 1
Heading Rank: 2

Heading: environmental issues

Text: 21 Two separate actions are involved here: National Association of Recycling Industries, Inc. v. United States, et al., No. 75-1255 (NARI I ) and 75-2022 (NARI II ). NARI I seeks review of Commission orders entered in three separate general revenue proceedings: (1) Ex Parte No. 295 (Sub No. 1), Increased Freight Rates and Charges, 1973-Recyclable Materials, (2) Ex Parte No. 299, Increases in Freight Rates and Charges to Offset Retirement Tax Increases 1973 and (3) Ex Parte No. 303, Increased Freight Rates and Charges, 1974, Nationwide. NARI II seeks review of Commission orders entered in Ex Parte No. 313, Increased Freight Rates and Charges Labor Costs 1975 and Ex Parte No. 305 RE, Increased Freight Rates and Charges 1974. The petitioners argue that the Commission's actions in these general revenue proceedings failed to the fullest extent possible to satisfy the Environmental Impact Statement (EIS) Requirements of section 102(2)(C) of the National Environmental Policy Act of 1969, 42 U.S.C. § 4332(2)(C) 1970. The Commission's conclusion at the close of a general revenue proceeding that it need take no further actions to comply with NEPA was squarely held to be a final reviewable decision in SCRAP II, 422 U.S. at 318-19, 95 S.Ct. 2336, discussed in Part I.B, supra.
22 Ex Parte No. 295 (Sub No. 1). In April 1973, virtually all of the Nation's railroads requested ICC authority to file a tariff embodying a general rate increase of 5%. 7 When filed, there was uncertainty arising out of a three-judge court's injunction against the collection of a rate increase on recyclables authorized by the Commission in an earlier general revenue proceeding. 8 As an appeal of this injunction was pending in the Supreme Court at the time the railroads initiated Ex Parte No. 295, the railroads voluntarily excluded recyclable commodities from the proposed rate increase as a precautionary measure. 23 In June 1973, the Supreme Court held the three-judge court to be without power to enjoin the collection of the authorized rate increase for recyclables in SCRAP I. 24 In August 1973, the ICC authorized an interim general revenue increase of 3% In Ex Parte No. 295. Further, in light of SCRAP I and the interim increase, the railroads petitioned the ICC for permission to raise rates on recyclables. This proceeding was denominated Ex Parte No. 295 (Sub No. 1). 25 The Commission suspended the proposed recyclables tariffs for seven months and served its final report and order with a comprehensive final environmental impact statement on October 1, 1974. The Commission concluded that the 3% Increase on transportation rates would not have a significant effect on the quality of the human environment. Several petitions for reconsideration were denied in January 1975, and the authorized recyclables rate increase was brought into parity with the overall rate increase of Ex Parte No. 295. 26 The EIS for Ex Parte No. 295 (Sub No. 1) was jointly prepared by the ICC and the Mitre Corporation, a consulting agency which does $60 million a year in federal business. Although the bulk of Mitre's business was done for the Air Force, it had done work for a number of other federal agencies. This was the first EIS it had developed, as well as its first exposure to railroad rate work. 27 Hearings were held for three days on the draft EIS with staff members from Mitre available for cross-examination. 28 The ICC's final report and order, as well as its final EIS were filed on October 31, 1974. The EIS analyzed the recycling market and technology for aluminum, copper, lead, nickel, zinc, cullet (recyclable glass), blast furnace and coke oven products, ashes, rubber and plastic scrap and waste, reviable plastics, recyclable paper, textile wastes and ferrous scrap. The final report determined that the railroads had shown a need for the 3% Increase on transportation rates of recyclable commodities, and that the increase should not have a significant effect on the quality of the human environment. 29 Ex Parte No. 299. In July 1973, Congress amended the Railroad Retirement Act increasing the retirement tax liabilities on the railroads. As a companion to that action, the Interstate Commerce Act was amended to provide for the prompt pass-through of the increased tax liability by means of increases in the general rate level, Railroad Rate Adjustment Act of 1973, 49 U.S.C. § 15a (Supp. V 1975). The ICC then established new procedures to expedite the railroads' rate adjustments to effect the additional retirement tax obligations. 30 Following this action, the railroads filed a series of general revenue increases aggregating 2.9% To effect corresponding increases in their retirement tax obligations. The ICC authorized a 2.8% Increase for this purpose on an interim basis. In August 1975, five months after the petitioner filed NARI I, the ICC issued its final report and order approving a general revenue increase of 2.8% To offset the retirement tax increase. 31 Ex Parte No. 303. In December of 1973, the railroads sought permission for a general revenue hike of 5%. An investigation was initiated and an interim increase of 4% Was authorized. Recyclable commodities were excepted because the Ex Parte No. 295 (Sub No. 1) environmental analysis was still underway. 32 After the environmental study was completed, the ICC determined that this increase would not have a significant environmental impact and lifted its exception on recyclables, authorizing a 4% General revenue increase. 33 An Environmental Threshold Assessment Survey (TAS) draft incorporating an examination of the rate structure was prepared. Because both Ex Parte No. 299 and 303 were initiated during the environmental study in Ex Parte No. 295 (Sub No. 1), the ICC considered the cumulative impact of Ex Parte 299 and 303 (a total rate hike of 6.8%) in preparing the TAS draft. Upon completion, the draft was circulated to all parties and appropriate agencies. 34 The final TAS was prepared following input from these parties and agencies, and concluded that the increases would not significantly affect the human environment.
35 NARI I raises two basic issues: (1) should the ICC have prepared an EIS prior to granting rate increases in Ex Parte Nos. 299 and 303, which rate increases affect the recyclable commodities industry; and (2) did the ICC violate NEPA by hiring the Mitre Corporation to prepare an EIS for Ex Parte No. 295 (Sub No. 1). 36 NARI asserts that the NEPA mandates ICC preparation of an EIS for rate increases involving recyclable commodities, citing SCRAP II. However, an EIS is required only where the rate proceeding significantly affect(s) the quality of human environment. 42 U.S.C. § 4332. See SCRAP II, 422 U.S. at 318-319, 95 S.Ct. 2336. The agency has the authority to make its own threshold determination. Morningside Renewal Council v. Atomic Energy Commission, 482 F.2d 234, 238 (2d Cir. 1973), cert. denied, 417 U.S. 951, 94 S.Ct. 3080, 41 L.Ed.2d 672 (1974). When the agency determines that such an impact statement is unnecessary, it must give a statement of its reasons, and where the agency's statement of explanation is sufficient, the NEPA criteria are satisfied. Arizona Public Service Co. v. Federal Power Commission, 160 U.S.App.D.C. 215, 490 F.2d 783 (1974). 37 Our review of the record satisfies us that the ICC's threshold determination of the environmental impact of the Ex Parte Nos. 299 and 303 rate increases is sufficiently documented in the TAS, to be in compliance with the NEPA. Therefore, the Commission did not need to prepare a full-blown EIS. 38 Looking now at the allegations concerning the Mitre Corporation, NARI asserts that the Commission failed to satisfy its duty to prepare an EIS under section 102(2)(C) when it hired Mitre to assist in its preparation. Petitioner argues both that the Commission failed to participate sufficiently in the EIS-drafting process, and that Mitre's lack of prior experience in environmental studies on rate impact on various industries rendered the EIS invalid. 39 However, we note that not only can the Commission use outside consultants in an EIS preparation, but that 40 C.F.R. § 1500 (1976) requires the use of such consultants. While we are aware of Mitre's inexperience in these areas, our review of the EIS and the record shows that it was not a one-man show as the NARI would have us believe. Rather, it is apparent that the Commission worked very closely with Mitre in the EIS's preparation, laying down the scope of Mitre's activities, adding the ICC's expertise in rate proceedings to the statement, reviewing the work product and revising both substance and form. The resulting EIS was quite adequate to satisfy the criteria of the NEPA. 40 NARI I presents us with several other points, none of which merits extended discussion. Petitioners argue that the Commission abused its discretion by approving general rate increases in Ex Parte Nos. 295 (Sub No. 1), 299, and 303 without first taking action to investigate and modify the base rate structure governing shipment of recyclable waste paper, textile wastes, and nonferrous metal scrap. In a related argument, petitioners contend that the Commission's orders, by failing to consider the effect of the cumulative rate increases upon recyclables, violate the spirit of the Regional Rail Reorganization Act of 1973, Pub.L.No.93-236, § 603, 87 Stat. 1023, read together with the Railroad Revitalization and Regulatory Reform Act of 1976, Pub.L.No.94-210, § 204, 90 Stat. 40, and the National Environmental Policy Act of 1969. We note that the Commission has promulgated rules to improve procedures for consideration of possible discrimination against recyclable commodities. Ex Parte No. 306, Implementation of Public Law 93-236 Freight Rates for Recyclables, 346 I.C.C. 408 (1974). The Commission has also undertaken studies relating to the shipment of recyclable commodities in Ex Parte 270 and Ex Parte No. 319, Investigation of Freight Rates for the Transportation of Recyclable or Recycled Materials. One Report has already been published, Ex Parte No. 270 (Sub No. 6), Investigation of Railroad Freight Rate Structure Scrap Iron and Steel, 345 I.C.C. 867 (1976). To the extent petitioners actually challenge the validity of the Commission's rules issued July 30, 1974, in response to the 1973 Act, their petitions are barred by the Hobbs Act's 60-day limitations period, 28 U.S.C. § 2344 (1970), made applicable to such rules by Pub.L.No.93-584, 88 Stat. 1917 (1975), as codified, 28 U.S.C. §§ 2321, 2341, 2342 (Supp. V 1975). To the extent petitioners' claim can be characterized simply as a challenge to the validity of the orders in the general revenue proceedings, we nevertheless decline to adopt their imaginative reading of the statutes. The Commission has neither acted contrary to law nor abused its discretion in electing to consider the underlying question of the rate structure for recyclables in proceedings separate from the general revenue proceedings here under review. 41 Finally, NARI I argues that the Commission arbitrarily and capriciously usurped the decision-making functions of an administrative law judge who was formally assigned to make findings in Ex Parte No. 295 (Sub No. 1). However, the Commission waited five months for such findings and with none forthcoming, reviewed the evidence presented and made its own findings to expedite the process. We do not find this action arbitrary and capricious. 42 NARI II involves Ex Parte Nos. 313 and 305 RE. The former is discussed in Part I supra ; in the latter the Commission by order lifted a holddown on recyclables in the Ex Parte No. 305 proceeding also discussed in Part I. In neither of these proceedings did the Commission prepare an EIS or TAS, nor has it seriously sought to explain its conclusions that these actions will have no significant effect upon the quality of the human environment. We conclude that, despite the time limitations on these proceedings, the Commission has neglected its statutorily-imposed duty to comply with section 102 of NEPA to the fullest extent possible. 43 Although several other issues are raised on the merits in NARI II, we do not reach them at this time. Both Ex Parte Nos. 305 RE and 313 are remanded to the Commission for a determination of the impact these rate increases will have on the quality of the human environment; otherwise, the orders of the ICC are affirmed. 44 It is so ordered.