Opinion ID: 712172
Heading Depth: 1
Heading Rank: 3

Heading: The Commission's Authority To Order Tariff Filing

Text: 18 Before turning to the heart of the question presented by Burlington's petition for review, we must first dispose of the suggestion by the Board and WTU that Burlington in essence agreed to the very order now disputed. The suggestion rests on Burlington's statement that it was willing to publish a unit train tariff [suitable for WTU's traffic] which would be in place if and when WTU's coal ceases to move under contract. Supplemental Memorandum in Support of Burlington Northern Railroad Company's Motion to Dismiss, West Texas Utilities Co., Docket No. 41191 (emphasis added). But this is plainly not a general offer to file a tariff whenever the Commission pleased. Indeed, the Commission itself summarized the offer as a commitment to publish a unit train tariff in sufficient time to avoid any rail service interruption. October Decision at 8. 19 This brings us directly to the question whether the Commission had statutory authority to impose upon a rail carrier a current obligation to file a tariff specifying a rate for traffic--such as WTU's as of the date of the August Decision--that would not be ready to move under the rate until months or years down the road. The Board asserts that the Commission enjoyed broad authority to investigate possible violations of statutory requirements and to take appropriate action to compel compliance with these requirements. 49 U.S.C. § 11701(a) (1995), amended by Termination Act § 102(a), 109 Stat. at 845 (to be codified at 49 U.S.C. § 11701(a)) (tying investigative authority to the filing of a complaint seeking investigation). But these powers appear ancillary; unless there was statutory authority elsewhere to require the tariff filing ordered by the Commission, general authority to see to it that carriers followed the statute's requirements is of no use. In fact, as noted above, the Commission rested its decision on former 49 U.S.C. § 10762, which provided that 20 (a)(1) A carrier providing transportation or service subject to the jurisdiction of the Interstate Commerce Commission under chapter 105 of [title 49] shall publish and file with the Commission tariffs containing the rates and (A) if a common carrier, classifications, rules, and practices related to those rates, ... established under this chapter for transportation or service it may provide under this subtitle. 21 Id. § 10762(a)(1) (emphasis added), repealed by Termination Act § 102(a), 109 Stat. at 804-52; but see id. § 10702(a), amended by Termination Act § 102(a), 109 Stat. at 810 (to be codified at 49 U.S.C. § 10702(1)) (requiring a rail carrier subject to the jurisdiction of the Board to establish ... rates ... for transportation and service it may provide). Whether the Commission's judgment may be upheld turns on whether its interpretation of former § 10762 was either mandated by the unambiguous meaning of the statute or permissible as one of several reasonable constructions of ambiguous statutory language. See Chevron, Inc. v. NRDC, 467 U.S. 837, 843, 104 S.Ct. 2778, 2782, 81 L.Ed.2d 694 (1984). We conclude that the Commission's interpretation was not a permissible construction of former § 10762 and, thus, a fortiori, was not mandated by the language of the statute. 22 Although the opening words of former § 10762 limited its application to carriers providing service, its final ones required a carrier to publish a tariff for transportation or service it may provide, with no express temporal limitation. The Commission relied on the familiar argument that since such limitations were found elsewhere in the statute, Congress knew how to impose a temporal constraint on the Commission's jurisdiction when it wanted to do so, and [t]he fact [316 U.S.App.D.C. 111] that it did not do so [here] strongly suggests that it did not intend to do so. October Decision at 4. The Commission went on to argue that because of the sharp time limits imposed by former 49 U.S.C. § 10707(b) on its power to suspend a newly filed rate, its expansive reading of former § 10762 was essential. See October Decision at 4-5. 7 23 We read former § 10707 as having precisely the opposite effect: the sharp time limits imposed by the section indicate that the Commission had only very limited power to suspend carrier-chosen rates pending completion of a Commission proceeding. Former § 10707 began by authorizing the Commission to investigate newly filed rates and requiring that any Commission proceeding as to the rate's compliance with the statute be completed within five months--which the Commission could extend to eight months by reporting to Congress and explaining its delay. See 49 U.S.C. § 10707(a) & (b)(1) (1995), repealed by Termination Act § 102(a), 109 Stat. at 804-52. Former § 10707 then specified what would happen if the Commission failed to reach a final decision within the applicable time period: [T]he rate ... (A) is effective at the end of that time period [allowed for the proceeding]; or (B) if already in effect at the end of that time period, remains in effect. Id. § 10707(b)(1), repealed by Termination Act § 102(a), 109 Stat. at 804-52. In effect, then, it was any suspension of the rate that was limited to five months (or, contingently, eight), as the Commission clearly understood. See October Decision at 4 (citing former § 10707(b) for proposition that its authority to suspend was limited to five months). 24 Former § 10707 not only limited the duration of suspension but also specified limited circumstances in which the Commission could suspend a rate at all: 25 (1) The Commission may not suspend a proposed rate ... unless it appears from the specific facts shown by the verified statement of a person that 26 (A) it is substantially likely that the protestant will prevail on the merits; 27 (B) without suspension, the proposed rate change will cause substantial injury to the protestant ...; and 28 (C) because of the peculiar economic circumstances of the protestant, the provisions of subsection (d) of this section [providing for payment of reparations in the event of overpayment by a shipper] do not protect the protestant. 29 (2) The burden shall be on the protestant to prove the matters described in paragraph (1).... 30 49 U.S.C. § 10707(c) (1995), repealed by Termination Act § 102(a), 109 Stat. at 804-52. 31 Finally, the statutory constraints on suspension were framed by the rules governing the period between a carrier's filing of a rate and the rate's effective date. The carrier specified the rate's effective date in the first instance, subject to the requirement that the date be at least 20 days after publication in the case of a proposed rate change resulting in an increased rate and at least one day after publication in the case of a new rate or a rate reduction. See id. § 10762(c)(3) & (d)(1) (setting 20-day interval for rate increases and new rates and 10-day interval for rate reductions, and authorizing Commission to reduce statutory notice requirements by regulation), repealed by Termination Act § 102(a), 109 Stat. at 804-52; 49 CFR § 1314.5 (1995) (setting 20-day interval for rate increases and 1-day interval for new rates and rate reductions). 8 32 Taken as a whole, then, the statutory scheme against which the Commission's action must be measured was one under which [316 U.S.App.D.C. 112] a rate could go into effect almost immediately and remain in effect unless and until a shipper established the narrow grounds for suspension--that the rate would cause substantial injury and that due to its peculiar circumstances the reparations provisions would supply inadequate protection. In other words, the Commission had extremely limited authority to compel rail carriers to serve at rates other than those of their own choosing before completion of a Commission proceeding assessing the rates. Viewed in this light, the Commission's August Decision was no more than an end-run around the statutory scheme--jump-starting the rate review process well in advance of the earliest possible date at which common carrier service could begin, and thereby avoiding the practical force of the statutory limits on its authority. 33 Indeed, the Commission was quite explicit that its purpose in ordering early filing by Burlington was to ensure that a Commission-approved rate would be on file by the earliest possible date at which Burlington's contract with WTU could expire: 34 [Burlington's] approach ... would put the Commission and West Texas in an untenable position by disabling us from meaningfully exercising our jurisdiction at the appropriate time. It would mean that West Texas's only means of challenging a newly published tariff rate that it viewed as unreasonable would be through filing a protest seeking either an investigation or a suspension and investigation of the allegedly unlawful rate under [former] 49 U.S.C. [ss] 10701a [specifying standards for rail carriers' rates] and 10707. 35 October Decision at 4. The Commission found this remedy for WTU unacceptable because it might require WTU to pay an unreasonably high rate during the course of the Commission proceeding and only later receive reparations for its overpayment (with interest at a rate the Board does not claim is unrealistic). The Commission noted that WTU would risk substantial (temporary) overpayment whether or not the Commission suspended Burlington's rate. If the rate were not suspended, WTU would be required to pay it, and if it were suspended (an action that could only be taken, of course, if WTU met the statutory requirements), then the applicable rate would be a single-car class rate that Burlington had on file with the Commission--a rate that the Commission found would be unsuitably high for WTU's traffic. Id. at 5. 9 In any event, under either route, the fact that coal rate investigations are measured in terms of years rather than weeks meant that WTU would be required to pay the potentially excessive rate for an extended time period, and, the Commission concluded, [t]he uncertainty associated with an extended rate investigation would play havoc with the utility's ability in turn to set rates for its electric consumers. Id. 10 36 We have no doubt that payment of an unreasonably high rate for some period of time could have worked hardship on WTU. But the short answer to the Commission's argument is that any hardship visited upon WTU would have followed directly from the [316 U.S.App.D.C. 113] balance of interests struck by the statute itself. Congress could have written former § 10707 to permit suspension for a much longer period than the five (or eight) months specified by sub-section (b) of that section, and for a much broader set of reasons than those specified by subsection (c). Such an arrangement would have reflected a different balance of carriers' and shippers' interests, one more favorable to shippers than the arrangement Congress actually chose. Instead it decided to allow carrier-chosen rates to go into effect before the Commission had the chance to pass on them, except where relatively narrow criteria for suspension were met, and even then only for a period that is relatively short in relation to the length of Commission rate proceedings (measured in years, as the Commission said). The congressional combination, assigning to the carrier great flexibility as to the effective date of its tariff filings, and to the Commission very limited suspension power, had the effect of assuring that for the most part carriers did not pay the price for lags in Commission rate proceedings. The Commission's proposed end-run would have destroyed that protection. 37 We recognize that the circumstances here were special. The happenstance of the somewhat archaic single-car rate on file with the Commission meant that the default rate in the event of suspension would have been relatively high; indeed, for any initiation of service the absence of a plausible default rate would tend to blunt the Commission's suspension remedy. There are two answers to this, however. First, the Commission's reading of may provide in former § 10762 was not inherently susceptible to being limited to initial service. If, for example, the Commission had found itself confronting circumstances where technological or other developments made a drop in the reasonable level of rates foreseeable, then (on its reading of former § 10762) it could have ordered a filing well in advance of when the drop in rates would actually occur, thus permitting it to steal a march on the carrier. Second, there was an obvious reason for Congress to have allowed a carrier comparatively greater de facto flexibility on initial service. Congress limited the Commission's rate-setting power to cases where the carrier enjoyed market dominance. See 49 U.S.C. § 10709(c) (1995), amended by Termination Act § 102(a), 109 Stat. at 816 (to be codified at 49 U.S.C. § 10707(c)) (making conforming amendments to statutory language). But for service so new that it involves construction of a new rail line, a carrier would be unlikely to have such dominance, as prospective shippers could negotiate with a range of potential carriers to provide the new transport, and thus could take advantage of competition among such carriers. But the statutory language point is in any event controlling: the Commission's reading of the statute would have permitted it to order advance filings in circumstances far less exigent than those present here. 38 We note WTU's argument that the Commission had the authority to initiate a rate reasonableness proceeding based on the existing single-car rate Burlington had on file with the Commission, as occurred in San Antonio, Tex., 355 I.C.C. 405 (1976), aff'd on other grounds sub nom. Burlington Northern, Inc. v. United States, 555 F.2d 637 (8th Cir.1977). See also Akron, Canton & Youngstown R.R. Co. v. ICC, 611 F.2d 1162, 1165 (6th Cir.1979) (relying on unreasonableness of existing tariff terms to uphold carriage requirement for previously excluded traffic). As the Commission recognized, see October Decision at 6 & n. 13 (emphasizing that the Commission was not here reviewing the [single-car] class rate ) (emphasis added); see also id. at 5 n. 11 (similar), any such approach would have raised questions under § 229 of the Staggers Rail Act of 1980, Pub.L. No. 96-448, 94 Stat. 1895 (reproduced as historical and statutory note to former 49 U.S.C. § 10701a (1995)), which provides limited grandfathering (as against reasonableness attacks) to all rates in effect on the effective date of the Staggers Act. As the Commission chose not to initiate review of the single-car rate, the issues such a device might have raised are not before us, and we cannot assume the validity of the alternative device as a basis for reasoning about what the Commission in fact chose to do. 39   [316 U.S.App.D.C. 114] The Commission's August Decision surely vindicate[d] [shippers'] rights, as the Board repeatedly suggests. E.g., Brief for Respondent at 10; see also In re Trans Alaska Pipeline Rate Cases, 436 U.S. 631, 653, 98 S.Ct. 2053, 2066, 56 L.Ed.2d 591 (1978) (stating, in upholding Commission action, that the action was an intelligent and practical exercise of [the Commission's] suspension power which is thoroughly in accord with Congress' goal ... to strike a fair balance between the needs of the public and the needs of regulated carriers). The problem, however, is that the rights vindicated by the Commission's order are directly at odds with rights that were expressly established by the statute. Accordingly, the petition for review is 40 Granted.