Opinion ID: 413116
Heading Depth: 2
Heading Rank: 3

Heading: The Adequacy of the Commission's Findings

Text: 51 To exercise its exemptive authority, the Commission must make certain findings regarding the nature and scope of the exemption to be issued. Although the Commission acted under section 10505(a) as it existed in 1980, the standards that will govern the Commission's use of its exemptive powers on remand are those implemented by the Staggers Act: 99 the Commission must find that the relevant provisions of the ICA are not necessary to carry out the transportation policy of section 10101(a) of Title 49; and that the transaction or service is either of limited scope or is not needed to protect shippers from the abuse of market power. 100 Accordingly, we shall determine whether the Commission's findings measure up to those standards. 101 52 Petitioner asserts that the findings made by the Commission are inadequate or simply erroneous. In support of this assertion, he argues that the Commission's findings are merely conclusory, failing to do more than restate the statutory language without applying the legal standard governing the use of the Commission's exemptive authority to the facts of the proceeding. 102 Further, petitioner argues that the Commission's finding that relatively little trackage is involved is simply erroneous and, thus, the matter cannot be of limited scope. 103 53 Our analysis of the adequacy of the Commission's findings must reflect the very narrow scope of review we apply to such findings; as a rulemaking proceeding we are limited to determining whether the Commission's decision was arbitrary, capricious, an abuse of discretion or otherwise contrary to law. 104 It is not our province to assess the wisdom of the rule, but simply to determine whether there are facts in the record capable of supporting the agency's findings. 105 If the facts provide a rational basis for the Commission's decision to implement the modified certificate program, the Commission's decision must be affirmed. 106 54 In addressing the limited scope requirement, the Commission observed that the trackage being abandoned constituted only a small percentage of total rail trackage in the United States and that the average length of the lines being approved for abandonment was quite short. 107 The Commission found that, out of this set of potential state-operated trackage, states were interested in only a small fraction. 108 In addition, abandoned lines were either unprofitable or only marginally profitable and had sparse traffic levels. 109 55 These findings alone, we believe, meet the statutory requirement that the involved matter be of limited scope. In an absolute sense, the small amounts of trackage and traffic involved in the modified certificate program compel a conclusion that the program is limited in scope. Although, as the petitioner points out, two bankruptcies of major carriers and Conrail's planned abandonments indicate that the amount of trackage potentially eligible for the Commission's program will increase, 110 the Commission was well aware of this possibility when it made its findings. 111 In fact, it cited the bankruptcies as additional reasons for assisting the states in their rail programs. 112 Furthermore, the words limited scope necessarily give the Commission broad discretion in interpreting their meaning, since the agency's judgment and expertise are involved in applying the words limited scope to any set of circumstances. 113 Thus, we find it was not an abuse of discretion to rely on the fact that limited trackage and rail traffic will be affected to determine that the matter was of limited scope. 56 The Commission also had to find that the application of a provision of the ICA was not necessary to carry out the transportation policy of 49 U.S.C. Sec. 10101(a). 114 The effect of the modified certificate program was to exempt states, or their operators, from the filing procedures and other restrictions contained in 49 U.S.C. Secs. 10901, 10903, and 11101. The Commission observed that service over these lines was in danger of immediate termination and that requiring an application prior to starting operations could result in temporary cessation of service. 115 Furthermore, termination of service under normal procedures could involve months of delay. 116 These reasons led the Commission to conclude that full application of the ICA to the states was not necessary to carry out the national transportation policy of section 10101(a). 117 57 Petitioner argues, however, that we should parse the Commission's modified certificate program into separate exemptions and hold that separate findings had to be made for each of the exemptions, which, he asserts, the Commission did not do. 118 We decline to accept this suggestion, because the modified certificate program operates as a unified program initiated by state acquisition of a line already abandoned or approved for abandonment and completed by the provision of service under the state's rail program. Separate findings couched expressly in the statutory terms are not necessary for each statutory provision in this case, when the Commission adequately explained the justification for exempting the state rail programs from these particular provisions of the ICA. 58 Petitioner also attacks the Commission's modified certificate program on other grounds. In reaching its final decision the Commission said it would follow a policy that mere ownership of a line by a state does not create common carrier status. 119 Yet in its final decision, the Commission stated that state acquisition of a line over which service was being provided would entail common carrier obligations. 120 Petitioner attempts to make a meaningful distinction between the two statements and asserts that such inconsistency cannot stand without a reasoned explanation. 121 In addition, petitioner asserts that the Commission exceeded its statutory authority in addressing the common carrier status of states maintaining rail service programs and that the Commission cannot administer statutory programs outside its jurisdiction, such as the Federal Employers' Liability Act. 122 59 With this latter point we agree, but the Commission made no such attempt. Instead it established a limited exemption from common carrier status under the ICA to states that merely own rail lines and provide financial assistance to service providers. A fair reading of the Commission's decision does not show any meaningful inconsistency between the final decision and the modification of the final decision. In both the Commission recognized that application of the traditional test of a common carrier would make both the state and its operator common carriers. What the Commission did in its final decision was to exempt a state from common carrier status and the attendant obligations under the ICA so long as the state did not operate the rail line. We need not decide today the dividing line between mere ownership and operation nor determine the implications of the Commission's exemption on common carrier obligations in situations outside the ICA.