Opinion ID: 423893
Heading Depth: 4
Heading Rank: 1

Heading: consolidation or merger ... of at least 2 carriers into one corporation ....

Text: 15 .... 16 (3) acquisition of control of a carrier by any number of carriers. 17 (4) acquisition of control of at least 2 carriers by a person that is not a carrier. 18 (5) acquisition of control of a carrier by a person that is not a carrier but that controls any number of carriers. 19 The ICC shall approve the transaction if it finds the transaction is consistent with the public interest. Id. § 11,344(c). Before giving its approval, the ICC must conduct a full evidentiary hearing, which can take several years for a merger of two large railroads, see id. § 11,345(b), and 10 months for other transactions of regional or national transportation significance, see id. § 11,345(c). 20 Because of this long delay, merging carriers often have an economic incentive to complete the transaction first and seek ICC approval later. The ICC has long permitted carriers to do this by use of an independent voting trust. If the acquiring carriers put the stock of the acquired carriers in an independent voting trust, the ICC holds that the transaction does not violate § 11,343 because the acquiring carrier does not control the acquired carrier. See Voting Trust Rules, 49 C.F.R. § 1013 (1982). This construction of § 11,343 has been upheld by the courts 1 and is not disputed here. 21 [230 U.S.App.D.C. 109] 2. The Panama Canal Act 22 The second relevant provision of the Interstate Commerce Act, and the principal focus of this case, is 49 U.S.C. § 11,321, which derives from § 11 of the Panama Canal Act of 1912. 2 Congress specifically designed the Canal Act to protect independent water carriers from unfair competition by rail-owned water carriers. As presently codified, it forbids a rail carrier to own, operate, control, or have an interest in a competing water carrier unless the ICC finds that the ownership, control, or interest will not be contrary to the public interest and will not reduce water competition: 23 (a)(1) Notwithstanding [§ 11,343], a [rail] carrier ... may not own, operate, control, or have an interest in a water carrier ... with which it does or may compete for traffic. 24 .... 25 (b) Notwithstanding subsection (a) of this section, the Commission may authorize a [rail] carrier ... to own, operate, control or have an interest in a water common carrier ... when the Commission finds that ownership, operation, control, or interest will still allow that water common carrier ... to be operated in the public interest ... and that it will still allow competition, without reduction, on the water route in question. 26 Section 11,321(a)(2) gives the Commission authority to determine whether a rail carrier does or may compete with a water carrier: 27 The Commission may decide ... questions of fact related to competition or the possibility of competition under this subsection on application of a carrier.... The Commission may begin a proceeding under this subsection on its own initiative or on application of a shipper ... if the carrier has not applied to the Commission and had the question of competition or the possibility of competition determined .... 28 Any Commission action, whether a finding of fact on competition under subsection (a)(2), or approval of ownership, control, or interest despite the existence of competition under subsection (b), may be taken only after a full hearing. Id. § 11,321(c). 29 Cases where a rail carrier has sought to acquire a competing water carrier have been few and far between. As a result, the ICC had no occasion before this case to consider whether, as under § 11,343, a railroad can use an independent voting trust to acquire a water carrier before the ICC has had time to conduct a hearing and give or withhold its approval. 3