Opinion ID: 338424
Heading Depth: 2
Heading Rank: 3

Heading: ICC's Construction of Section 1(16)(b)

Text: 30 While not specifically argued by L&NE, we must first determine whether the ICC's cost reimbursement regulations denying rent to the other carrier where the cost of directed operations exceeds revenue comport with Congress's intent in enacting section 1(16)(b). See Hagans v. Lavine, 415 U.S. 528, 543, 94 S.Ct. 1372, 39 L.Ed.2d 577 (1974); Allen v. Aytch, 535 F.2d 817 at 819 (3d Cir. Apr. 29, 1976). In deciding this question we are mindful of the Supreme Court's statement in Udall v. Tallman, 380 U.S. 1, 16, 85 S.Ct. 792, 801, 13 L.Ed.2d 616 (1965): 31 When faced with a problem of statutory construction, this Court shows great deference to the interpretation given the statute by the officers or agency charged with its administration. To sustain the Commission's application of this statutory term, we need not find that its construction is the only reasonable one, or even that it is the result we would have reached had the question arisen in the first instance in judicial proceedings. Unemployment Comm'n v. Aragon, 329 U.S. 143, 153 (67 S.Ct. 245, 250, 91 L.Ed. 136). See also, e. g., Gray v. Powell, 314 U.S. 402 (62 S.Ct. 326, 86 L.Ed. 301); Universal Battery Co. v. United States, 281 U.S. 580, 583 (50 S.Ct. 422, 74 L.Ed. 1051). Particularly is this respect due when the administrative practice at stake 'involves a contemporaneous construction of a statute by the men charged with the responsibility of setting its machinery in motion; of making the parts work efficiently and smoothly while they are yet untried and new.'  Power Reactor Co. v. Electricians, 367 U.S. 396, 408 (81 S.Ct. 1529, 1535, 6 L.Ed.2d 924). 32 See also Lucas Coal Co. v. Interior Board of Mine Operations Appeals, 522 F.2d 581, 584 (3d Cir. 1975). 33 The statutory language of section 1(16)(b)(E) does not specifically provide for the payment of any monies to the other carrier; rather, it requires a payment solely to the directed carrier of the costs incurred in performing the directed service. Cost is defined as follows: 34 The term cost shall mean those expenditures made or incurred in or attributable to the operations as directed, including the rental or lease of necessary equipment, plus an appropriate allocation of common expenses, overheads, and a reasonable profit. 35 Thus, the ICC concluded that if rent for use of the other carrier's properties were to qualify as a cost, it must result from the inference that such rent is an expenditure to be incurred by the directed carrier. The Commission rejected such an inference based on its views that it was highly unlikely that Congress intended to provide a monetary incentive to the other carrier to abandon rail service without prior ICC approval, 28 and that the other carrier would derive substantial benefits from directed service so as to render compensation in the form of rent unnecessary as a matter of law in the case where costs exceeded revenues. 29 36 The ICC has given careful consideration to this question. We cannot say that its interpretation of section 1(16)(b) is unreasonable so long as the interpretation does not contravene the fifth amendment the L&NE contention for a statute should be construed to be constitutional where possible. 30