Opinion ID: 403665
Heading Depth: 3
Heading Rank: 1

Heading: The Plain Meaning Debate

Text: 19 All sides of this controversy lay claim to the plain meaning of section 203. As we have often observed, the meaning of some statutory provisions is sufficiently clear to resolve disputes over their interpretation. See, e.g., McCord v. Bailey, 636 F.2d 606, 614-15 (D.C.Cir.1980), cert. denied, 451 U.S. 983, 101 S.Ct. 2314, 68 L.Ed.2d 839 (1981). The language of section 203, however, does not fit into that category. In particular, it does not point us towards a specific statistical methodology for calculating inflationary cost increases. Section 203 requires that: 20 Commencing with the fourth quarter of 1980, the Commission shall, as often as practicable but in no event less often than quarterly, publish a rail cost adjustment factor which shall be a fraction, the numerator of which is the latest published Index of Railroad Costs (which index shall be compiled or verified by the Commission, with appropriate adjustments to reflect the changing composition of railroad costs, including the quality and mix of material and labor), and the denominator of which is the same index for the fourth quarter of 1980, or for the fourth quarter of 1982 or for the fourth quarter of every fifth year thereafter, as appropriate. 21 49 U.S.C.A. § 10707a(a)(2)(B) (West Supp.1981) (emphasis added). CMA suggests that this language clearly indicates Congress' concern with railroad costs. Thus, the index must be adjusted to reflect cost changes due to changes in the mix of expenses incurred by railroads, including the use of less labor or fuel due to more efficient technology and operating methods. CMA Brief 14. In short, an adequate measure of changing costs must account for more efficient uses of input items through productivity gains. The Commission's attorneys, in an argument we find somewhat at odds with the Commission's articulated position, contend that the common sense meaning of section 203 requires adoption of an input index. They state that the natural, common sense meaning of the statutory phrase 'composition of railroad costs' is the formation of a total cost by putting together the different prices paid by railroads for the goods and services they purchase. Government's Brief 19. After noting that the prices of labor and materials mentioned in the statute are indisputably inputs, they state that: Because none of the words in the statute embody concepts related to output, the statute cannot be read to embody productivity, which is a concept inextricably linked to output. Government's Brief 19. 22 We find neither interpretation of the plain meaning of section 203 very persuasive. 16 Turning first to the Commission counsel's argument, it is hardly self-evident that the required adjustments for quality and mix are not output-related. For example, gains in labor productivity could be considered an improvement in the quality of labor. Similarly, the mix of labor and materials could refer to total quantities of inputs, and not simply the proportionate share of different types of inputs. If either of these interpretations is correct, a productivity adjustment would fall within the adjustments authorized by the Act. But a more basic problem with the Commission's argument is that it sets up an artificially neat dichotomy between input and output indices. 17 Although the two types of indices are theoretically different-with input indices measuring the cost of a market basket of inputs and outputs indices measuring cost per unit of output-an output index is still critically concerned with the cost of inputs. The main difference between the two approaches is that an output index looks at additional factors that affect a firm's cost per unit of output. The fact that an output index would take additional steps to determine cost per unit of output-steps that, arguably, are not specifically mentioned in section 203-does not mean that Congress meant to preclude such adjustments. Congress drafted section 203's mandate for appropriate adjustments with inclusive, not exclusive, language. To read it as plainly rejecting an index reflecting all factors bearing on cost per unit of output is unwarranted. 23 CMA's plain reading is equally faulty. CMA asserts that a true cost index must include all factors bearing on cost per unit of output, even though the AAR index stands as a stark reminder that not all such indices make the fine adjustments it recommends. Furthermore, CMA overlooks the full statutory language of section 203, which only requires appropriate adjustments. Since one critical issue in this case is whether estimates of productivity gains on a quarterly basis are feasible, CMA's contention that productivity is a cost factor, even if accepted, is insufficient to prove that a productivity adjustment is appropriate and, therefore, statutorily mandated. 18