Opinion ID: 421083
Heading Depth: 2
Heading Rank: 2

Heading: Essential Services

Text: The ICC defines essential services as: 43 A service is essential if there is a sufficient public need for the service and adequate alternative transportation is not available. 44 49 C.F.R. § 1180.1(c)(2)(ii) (1982). The Commission concluded that Canadian National's north-south service did not warrant protective conditions because it was not essential. Canadian National challenges that conclusion. 16 45 The ICC explained that Canadian National's overhead service (overhead freight is freight that neither originates nor terminates on a particular line) was not essential because there are other routes over which the traffic can move. Delaware & Hudson Merger, 366 I.C.C. at 420. As for Canadian National's local service, Canadian National had developed no evidence that this service was essential either: 46 [Canadian National] has not shown that any of the shippers located on its line cannot be served by truck. Nowhere in the record has it been shown that any of the customers would go out of business if [Canadian National's] rail service would be terminated. There is absolutely no evidence with regard to prevailing rates in its corridors. There is no analysis as to whether the commodities carried are market dominant commodities. Thus the service it provides cannot be deemed essential. 47 Id. 48 We understand the Commission to be suggesting several types of evidence that Canadian National might have offered, but did not, to show that alternate service was inadequate: evidence on prevailing rates for rail and truck service; evidence on whether rail service is market dominant for the commodities that Canadian National carries; and evidence on whether shippers would go out of business if they lose rail service. Canadian National does not object to the ICC's assessment of the evidence. 17 It asserts that the Commission should have required Guilford to prove that alternate service was adequate, instead of requiring Canadian National to prove that alternate service was inadequate. 18 49 We have no trouble upholding the Commission's approach. Especially in an expedited proceeding such as this one, 19 the Commission can reasonably expect a party seeking protective conditions to make a prima facie case on why it needs them. Prevailing rates are obviously relevant to the question whether truck service is an adequate substitute for rail. Market dominance is also clearly relevant. If rail service is not market dominant for a particular commodity, that suggests that most shippers [229 U.S.App.D.C. 61] who ship or receive that commodity can switch to truck without incurring serious harm. Cf. 49 U.S.C. § 10,709(a) ( 'market dominance' means an absence of effective competition from other carriers or modes of transportation). 50 The Commission's reference to shippers being forced out of business is more troublesome. We hold today in Lamoille Valley, 711 F.2d at 310-313, that the Commission cannot equate the ability of shippers to stay in business with the existence of adequate alternative transportation. But adequacy is a matter of degree. The fact that no shippers will go out of business, although insufficient to prove that alternate service is adequate, is relevant evidence on the question of adequacy because it places a rough upper limit on the cost difference between truck and rail. Thus, the Commission did not err in giving at least some weight to this factor. 51 In sum, the ICC reasonably concluded that Canadian National failed to establish a significant probability that its services were essential. 20