Opinion ID: 348607
Heading Depth: 2
Heading Rank: 3

Heading: Basis for the ICC's Change of Policy

Text: 23 In 1968 the Department of Transportation sponsored legislation requiring joint international through rates to be accepted for filing by the ICC and the FMC. 20 It was in connection with the Congressional consideration of this legislation that the ICC reviewed the position it had taken in its 1908 decision in Cosmopolitan Shipping Co. with respect to joint through rates. On 1 April 1969 the ICC announced to Congress that it now believed that section 1(1)(a) of the Interstate Commerce Act (hereinafter the Act) conferred jurisdiction on the Commission to accept joint through rates for filing. 21 In addition, the Commission announced that new developments primarily the enactment of the Shipping Act of 1916 22 and the rapid growth of containerization since its inception in 1957 23 warranted a reconsideration of the previous policy of not accepting the filing of joint through rates. 24 The proceedings which culminated in the rules being reviewed here were instituted on 31 July 1969. 24 The Commission stated that its purpose in promulgating rules concerning joint through rates was as follows: 25 (I)t is our goal to facilitate the through transportation of freight by intermodal carriers between the United States and foreign countries. A shipper is benefited when he can make a contract with the originating carrier which covers a movement through to the destination at a total charge published in a single tariff. Moreover, the national transportation policy should be fostered and the free flow of commerce spurred by encouraging the establishment of more economical and integrated transportation services between the United States and foreign countries. 25 26 During the period from 1969-1976 the ICC published five major reports on the issue of joint international through rates. 26 These reports put forth in some detail the Commission's purposes in and justifications for the rules promulgated in Ex Parte No. 261; taken together, the reports represent an extraordinarily close scrutiny by the Commission of the various dimensions of the joint rate issue. These reports are duly reported in the ICC agency reporting system and fully described in the written submissions presented to this court by the parties to this case; we will, therefore, not describe the content of these reports in detail in this opinion. There is, however, one point concerning the series of reports issued by the ICC which deserves mention at this point. 27 In its third report on joint through rates, issued 12 August 1974, the ICC stated that it had the authority to suspend and to determine the lawfulness of the entire joint rate that is, both the inland and ocean portions. As the Commission stated: 27 28 The Federal Maritime Commission alleges that the Interstate Commerce Commission has no authority to suspend joint international rates in their entirety. In this respect, it insists that the legislative history of the Shipping Act of 1916 clearly shows that ocean rates in foreign commerce are not subject to suspension. We do not believe, however, that this fact interferes with our authority to suspend joint international rates for ocean-rail, ocean-motor, or ocean-water traffic. This is because the carriers operating in this country are under this Commission's jurisdiction and it is our duty, where the issue is appropriately raised, to determine whether a single-factor rate published jointly with a foreign carrier is unlawful. Such a determination requires the suspension and investigation of the entire joint rate. This Commission's authority to suspend joint international rates, and not merely the division of the domestic carrier, has been proclaimed in several investigation and suspension proceedings. 29 In its fourth report on this issue, the ICC reiterated its position that it had jurisdiction over the lawfulness of the entire joint rate. 28 In its fifth and final report of 30 January 1976, however, the ICC changed its position with respect to the substantive regulation of the entire joint rate: 29 30 In our consideration of the intermodal tariffs filed with this Commission, however, we do not intend to assert jurisdiction over or otherwise to engage in substantive regulation of the ocean portion of the rates pursuant to the Interstate Commerce Act. 31 Therefore, we wish to emphasize the fact that our jurisdiction will be invoked solely to accomplish substantive regulation of the domestic carrier's portion of the through rate and that any procedural requirements we may impose will be directed to this end. 32 Thus, from a procedural standpoint, a change in a joint through rate occasioned by a change in only the ocean portion of the rate will not provide grounds for suspension of either the entire rate or the ocean portion alone. 33 When our suspension procedures are invoked, they will be limited to the divisions accruing to the domestic carrier and the relevant governing provisions.From a substantive point of view, challenges to a joint through rate as inconsistent with the provisions of the Interstate Commerce Act will not be entertained unless directed to the domestic carrier's portion of the rate. Any determination of the lawfulness of the portion of a joint through rate accruing to the carriers subject to the jurisdiction of the FMC (ocean carriers) will be left to the FMC. 34 The Commission's decision to assert regulatory jurisdiction over only the domestic portion of the joint through rate resolved the final remaining major issue in the proceedings. Petitioner filed a petition for reconsideration of the final report issued on 30 January 1976. On 26 April 1976 the petition for reconsideration was denied by the ICC; this petition for review was then timely filed on 25 June 1976. 30 We now turn to an examination of the arguments raised by the petitioner before this Court.