Opinion ID: 423647
Heading Depth: 1
Heading Rank: 5

Heading: ford motor

Text: 47 Ford Motor Company (Ford), like DOD, filed its rate challenge on March 27, 1981, three days before time ran out under the Staggers Act savings provision. Ford protested, as unreasonably high, a joint rate charged by two carriers, the Union Pacific Railroad (Union Pacific) and the Missouri-Kansas-Texas Railroad (MKT). The challenged joint rate applied to soda ash moved by Union Pacific from mining facilities at Green River, Wyoming, to Kansas City, Missouri, and from there by MKT to Ford's plant near Tulsa, Oklahoma. Ford named both carriers as defendants; it asked the Commission to reduce the charge, prospectively, to a reasonable level. Joint Appendix (J.App.) at 5-10. 48 Ford's complaint was one of several hundred the Commission received in the Staggers Act last-chance-for-rate challenges 180-day period. Faced with an extraordinary case load bulge, the Commission sensibly promoted private settlement. It announced in a May 1, 1981, statement: 49 We have received just under 800 complaints. Their nature and their number require adopting special procedures for their handling. More importantly, we want to encourage and provide for negotiation and settlement of as many of these complaints as possible. It is our view that rate agreements between carriers and their customers are far better than a series of expensive and time consuming adjudications. 50 [230 U.S.App.D.C. 102] 46 Fed.Reg. 24,740 (1981). And in individual notices mailed with copies of complaints, the ICC asked defendants in savings provision cases to report whether settlement negotiations were underway, and whether a conference, presided over by an ALJ, would assist in resolving the dispute. J.App. 11. 51 Ford initiated settlement discussions with both carriers. It reached no agreement with Union Pacific, but negotiated a contract with MKT for an allowance on soda ash moved on MKT's lines from Kansas City to Ford's plant near Tulsa. 25 The allowance would end, automatically, if the ICC ordered a reduction in the joint rate. In that event, MKT would retain its full share of the lowered joint rate, with no return to Ford. 52 In August 1981, Ford informed the ICC of the settlement, requested permission to withdraw its complaint against MKT, J.App. 12, 26 and filed the Ford-MKT rate allowance agreement with the Commission. See Brief for the ICC in Ford Motor, Appendix B. 27 By order served September 4, 1981, the ALJ granted Ford's request and dismissed MKT from the rate challenge proceeding. J.App. 32. 53 Union Pacific, initially joined by MKT, had moved to dismiss Ford's complaint on the ground that competition from other railroads and other origins for soda ash moving to Oklahoma precluded a finding of market dominance. J.App. 13-21; see supra notes 1, 2. When the ICC approved withdrawal of the complaint against MKT, Union Pacific filed a second dismissal motion. J.App. 76-83. Essentially, it claimed that dropping MKT as a party-defendant was fatal to Ford's complaint: MKT was a necessary party, Union Pacific asserted; without MKT, the ICC had no authority to prescribe a through rate. In support, Union Pacific cited the Commission's joinder of defendants rule, see supra pp. 1159-1160, and ICC precedent applying the rule to require complainants seeking a rate prescription to name as defendants all joint-rate participants. 54 Ford's reply, J.App. 84-96, noted that the Commission had jurisdiction over the subject matter and Union Pacific and that, unlike the complainants in the cases Union Pacific cited, Ford had initially designated both joint-rate participants as defendants. Above all other considerations, Ford emphasized the Commission's policy favoring settlement; Ford maintained that Union Pacific, the nonsettling carrier, should not be allowed to turn that policy to its advantage. It would be unfair, Ford argued, for the ICC to reject the complaint against Union Pacific in view of the Commission's encouragement of negotiations of the very kind Ford and MKT successfully pursued, and the Commission's order permitting withdrawal of the complaint against MKT. Ford simultaneously sought leave to add to its complaint a prayer for reparations of approximately $970,000. J.App. 97-142. 55 In a concise order served November 10, 1981, the ALJ denied Union Pacific's motion [230 U.S.App.D.C. 103] to dismiss for failure to join a necessary defendant: 56 [Ford] named MKT in its complaint. MKT was subsequently dismissed as a result of its reaching a settlement agreement with Ford. Under these circumstances, the absence of MKT as a party in the proceeding is not a proper basis for the dismissal of the complaint. 57 J.App. 143. The same order denied Ford's request to amend the complaint to seek retrospective as well as prospective relief. Once the Staggers Act savings provision rate challenge deadline had passed, the ALJ ruled, it would be inappropriate to allow substantive amendments perfect[ing] or otherwise chang[ing] the remedies sought. J.App. 143. 58 On Ford's appeal from the ALJ's denial of leave to amend, 28 the full Commission, acting on its own motion, dismissed the complaint. Ford Motor Co. v. Union Pacific Railroad, 365 I.C.C. 630 (1982). It declared MKT a necessary defendant whose elimination caused the Commission to lose jurisdiction. Id. at 630, 631, 634. In prescription cases, the ICC said, it had routinely required joinder of all carriers participating in a joint rate. Id. at 631. That rule, the Commission announced, is equally appropriate in reparations cases and Mayo Shell, see supra pp. 11-12, to the extent that it looked the other way, had become obsolete and is overruled. 365 I.C.C. at 634. In 1954, when Mayo Shell was decided, the ICC explained, rate comparisons were the primary benchmark of maximum reasonableness. Id. at 631. Today, the Commission's approach is cost-based. Id. at 632. It is impossible, the ICC asserted, to determine the reasonableness of a joint rate or market dominance in the absence of cost evidence for all participating railroads. Id.; cf. supra p. 1163 (Commissioner Sterrett's assertion in DOD that it is impossible to resolve market dominance issue when all participants in joint movement are not made defendants). 59 The Commission acknowledged that it managed to make determinations on the reasonableness of joint rates with respect to a single carrier participant in cases involving Canadian or Mexican railroads. 365 I.C.C. at 633. But those cases 29 present unique circumstances, the Commission said; they illustrate a readiness to apply [ICC] rules and decisional criteria liberally to ensure that justice is not denied. Id. 30 Ford's situation did not attract similar solicitude; the Commission attributed Ford's plight to its own precipitous action in requesting that MKT be dismissed as a party. Id. at 634.
60 One question is squarely before us: Did the ICC err in ruling that it lack[ed] [230 U.S.App.D.C. 104] jurisdiction over Ford's complaint? See 365 I.C.C. at 630, 631, 632. For the reasons stated in section III of this opinion, our answer is Yes. The Commission had jurisdiction over the subject matter (market dominance and the reasonableness of the rate), and over Union Pacific. It should not have dismissed the complaint on its own motion for want of authority to adjudicate. The determination whether to proceed without MKT called for the exercise of judgmental discretion guided by considerations of equity and good conscience. See supra pp. 1160-1161. 61 Prime among those considerations, we think, is a situation the Commission never mentioned in its decision, although the ALJ apparently relied upon it in refusing to dismiss Ford's complaint: MKT had been a party defendant; that carrier was dropped voluntarily, but only after the ICC so ordered; elimination of MKT from the dispute was occasioned by a settlement agreement, filed with the Commission, establishing a rate allowance; the ICC had urged parties to savings provision rate challenges to negotiate such agreements and thereby avoid adversary contests. The Commission's response to the series of post-complaint events in this case, like the ICC's retroactive pronouncement in DOD, declared the rules of the game after the players had made their moves. 62 The Commission does not deny that it encouraged contract settlements without qualification. It addressed no special instructions to shippers challenging joint rates. It said to all savings provision disputants, a rate agreement is far better than an adjudication. It did not add, except that in the case of joint service, the shipper settling with one carrier thereby relinquishes all rights against nonsettlers. It did not instruct, unless all will settle, remain adverse to, and litigate against all; settle with, and dismiss none. Again, as in the DOD case, see supra pp. 1163-1165, the question here is not the tenor of permissible substantive Commission regulation; rather, the issue is one of fair notice, supplied at a time when persons who engage, or are subject to, the ICC's processes can conform their conduct to the Commission's expectations. 63 The ALJ who granted Ford's motion to drop MKT as a defendant subsequently ruled, in harmony therewith, that Ford's complaint against Union Pacific should be heard, not dismissed. The precipitous action, as we view the case, was not Ford's or the ALJ's in recognizing that the settlement meant Ford and MKT were no longer adversaries. 31 Rather, it was the Commission's, in denying Ford any opportunity to proceed against the nonsettling defendant, Union Pacific, as a consequence of the settlement with MKT which Ford could reasonably believe conformed to vibrant ICC policy. Had the ICC adverted in its decisionmaking here to the settlement policy it had published, the Commission's sense of accountability for the fairness of its own actions might have been heightened. 32 64 Under the circumstances, we believe the cases dealing with international rail rates are indeed apposite. But cf. 365 I.C.C. at 633 (declaring that line of cases inapposite). In this case too, the Commission should remain prepared ... to apply [its] rules and decisional criteria liberally to ensure that justice is not denied. Id. As the international rail rate cases demonstrate, when necessary to afford relief to [shippers] with valid grievances, the Commission can and does determine market dominance and the reasonableness of a joint rate [230 U.S.App.D.C. 105] though all participants are not before the ICC as defendants. NITCOM, supra, 365 I.C.C. at 628. The equitable principles that moved the Commission to exercise its jurisdiction in NITCOM, and the flexible approach it took in that case, 33 should have served the Commission as well two days later when it decided the case at hand. 34 65 We are invited to extend our inquiry beyond the propriety of the ICC's dismissal of Ford's initial complaint. The parties have briefed the issue whether the Commission should have permitted Ford to amend the complaint, after the 180-day deadline for rate challenges, to add a prayer for reparations. 35 We believe that issue is not ripe for judicial review. The ICC indulged in discussion that requires reconsideration in light of our opinion, but it ultimately declared that dismissal of the complaint for lack of jurisdiction rendered other procedural questions moot. 365 I.C.C. at 634. It also stated, specifically, that the issue of Ford's attempt to amend its complaint need not be reached. Id. at 630. 66 We note the possibility that the ICC might have deferred any review of the ALJ's order had it perceived that there was no jurisdictional defect. The Commission generally observes a final judgment rule. Thus it noted in this case that, ordinarily, it does not entertain immediate appeals from an ALJ's denial of a motion to dismiss; instead, it awaits termination of proceedings before the ALJ and the entry of an initial decision. Id. at 631. The ICC did not say whether it also regards rulings such as the ALJ's denial of Ford's motion to amend as ultimately reviewable, but not immediately appealable. 36 67 In sum, the Commission said its decision did not reach the issue of Ford's attempt to amend its complaint. Accordingly, we do [230 U.S.App.D.C. 106] not reach that question. We decide only that Ford's initial complaint, despite the dismissal of MKT as a defendant, remains securely within the ICC's adjudicatory authority. The ALJ correctly decided that issue; the Commission erred in upsetting his ruling.