Opinion ID: 370390
Heading Depth: 2
Heading Rank: 1

Heading: Reviewability and Scope of Review

Text: 49 Before turning to the Commission's determinations as to the lawfulness of the proposed capital incentive rates, we are confronted with a question of the scope of review of the Commission's orders on this point. 50 Intervenor railroads point to § 10729(b), which permits a capital incentive rate to become effective unless the Commission decides within 180 days after the filing of a notice of intent that the proposed rate would violate the Interstate Commerce Act. Once the rate becomes effective, the Commission may not, for 5 years, suspend or set it aside as violating the substantive regulatory provisions of the Act. In intervenors' view, this language deprives the Commission of authority to find a capital incentive rate unlawful and to set it aside even when a reviewing court has remanded the Commission's initial decision approving the rate because of defects under the Administrative Procedure Act. 51 To deny the Commission authority to correct its errors on remand is effectively to negate judicial review of the Commission's substantive determinations. 39 If a court may not, on finding legal error, remand to the Commission to reconsider its conclusion that the incentive rate is unlawful, then judicial review is an idle ceremony. 40 Indeed, it is worse than no review, for it provides the trapping of judicial affirmance when there is no meaningful judicial consideration. 41 52 We have considered whether in this instance there exists the clear and convincing evidence necessary to a conclusion that Congress intended to restrict such review. Dunlop v. Bachowski, 421 U.S. 560, 567, 95 S.Ct. 1851, 44 L.Ed.2d 377 (1975), Abbott Laboratories, Inc. v. Gardner, 387 U.S. 136, 141, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967). Congress has on occasion forbade judicial review of the validity of agency determinations (except for constitutional issues) and when such an intent is articulated the courts will respect it. 42 53 While there is a rudimentary logic in the contention of intervenor railroads, we do not discern either in the framework, text or legislative history of this statute the indicia of such a legislative intent. In our view, what the statute means is that the Commission has no authority to provide agency-generated reconsideration of its approval of a rate whether the approval is expressed positively, in an order, or passively, by failure to intercede. But when a court holds that agency approval is infirm, it may provide, as an incident to judicial review, for agency reconsideration. Thus, in International Harvester Co. v. Ruckelshaus, 155 U.S.App.D.C. 411, 446, 478 F.2d 615, 650 (1973), we concluded that a requirement that the Administrator of EPA enter within 60 days a decision on automobile manufacturers' petitions for suspension of emission standards did not preclude further EPA consideration on remand. 54 There is no significant legislative history on the issue. 43 The legislative understanding that we have discerned finds support in the Reform Act's structuring of § 10729 as a pre-filing review procedure. Section 10707, which governs all new rate filings by railroads that do not qualify under § 10729, defines the circumstances under which the Commission may suspend a rate pending determination of its legality, or set aside a rate filing that has become effective but which the Commission subsequently finds unlawful. Section 10729 establishes an alternate procedure for capital incentive rates. Under that section, the Commission must pass on the rate before it may be filed, though the standards it applies are identical. Once the rate is filed and becomes effective, the Commission may not suspend it or set it aside. This structuring of § 10729 as a pre-filing procedure and the complementary language of the two sections strongly indicate that what Congress had in mind in enacting § 10729 was to preclude recourse by opponents of a rate filing to the conventional procedures of § 10707 after the capital incentive rate was filed. 44 While Congress clearly intended to prevent the Commission from reopening the merits of a capital incentive rate, we find nothing suggesting that it envisioned that the initial decision approving the rate and immunizing it from further ICC consideration, would also immunize the rate from judicial review for arbitrariness or departure from specific legal requirements. 55 Intervenors suggest that Congress realized that extended judicial proceedings, like protracted litigation before the Commission, would inhibit investment because such proceedings would contribute to uncertainty about the legality of proposed rates. The dominant chord of Congress's actions in the Reform Act is the need to remedy delay by the Commission. 45 Thus, even the Senate Report cited by intervenors identifies this as the concern underlying § 10729: large-scale initiatives may be thwarted by delays in the exercise of the Commission's ratemaking powers. 46 There was no explicit mention of delays in the courts. 56 Nor does judicial review portend the practical impact intervenors fear. The direction to the agency to provide expedition will be taken to heart by the courts, as an indication of legislative policy. See International Harvester, supra, 155 U.S.App.D.C. at 425-28, 478 F.2d at 629-32. Furthermore, courts apply a deferential standard in judging rate determinations. As summarized by Mr. Justice Marshall: 57 Such decisions are not to be disturbed by the courts except upon a showing that they are unsupported by evidence, were made without a hearing, exceed constitutional limits, or for some other reason amount to an abuse of power. Manufacturers R. Co. v. United States, 246 U.S. 457, 481, 38 S.Ct. 383, 389, 62 L.Ed. 831 (1918). As this Court has observed, The process of rate making is essentially empiric. The stuff of the process is fluid and changing the resultant of factors that must be valued as well as weighed. Congress has therefore delegated the enforcement of transportation policy to a permanent expert body and has charged it with the duty of being responsive to the dynamic character of transportation problems. Board of Trade of Kansas City v. United States, 314 U.S. 534, 546, 62 S.Ct. 366, 86 L.Ed. 432 (1942). 58 Atchison, T. & S. F. Ry. v. Wichita Board of Trade, 412 U.S. 800, 806, 93 S.Ct. 2367, 2374, 37 L.Ed.2d 350 (1973) (plurality opinion). The congressional interest in encouraging large-scale investments by minimizing regulatory uncertainty, coupled with sensitivity to the time pressure under which the Commission must operate in capital incentive proceedings, suggest that this standard be applied with an extra dollop of deference. While modification of the formulation of the standard is not necessarily called for, our review will be directed primarily at ascertaining that the Commission's decision reflects meaningful consideration of the salient factors and comports with applicable law.