Opinion ID: 421082
Heading Depth: 3
Heading Rank: 2

Heading: Congressional Policy on Railroad Mergers

Text: 21 These statutory provisions must be interpreted in light of the longstanding congressional policy favoring railroad mergers that increase efficiency and quality of service. Since 1920, the ICC has operated under the congressional policy of encouraging consolidation of the Nation's railroads. Penn-Central Merger & N & W Inclusion Cases, 389 U.S. 486, 492, 88 S.Ct. 602, 605, 19 L.Ed.2d 723 (1968). The Railroad Revitalization and Regulatory Reform Act of 1976 (4R Act), Pub.L. No. 94-210, 90 Stat. 31 (current version in scattered sections of 45, 49 U.S.C.), reinforces that policy. 22 The 4R Act did not alter the substantive public interest standard for ICC approval of railroad mergers, but did provide new, expedited procedures for ICC review of merger proposals as an alternative to the existing procedures. 5 It also declared Congress' purposes to include: 23 the encouragement of efforts to restructure the [rail] system on a more economically justified basis, including ... an expedited procedure for determining whether merger and consolidation applications are in the public interest. 24 Id. § 101(a)(2), 45 U.S.C. § 801(a)(2). 25 The Senate committee report explained that the new procedures were needed because [t]he cumbersome, slow process of ... processing merger proposals ... has drastically slowed change needed in the industry. S.Rep. No. 499, 94th Cong., 1st Sess. 2-3 (1975), reprinted in 1976 U.S.Code Cong. & Ad.News 14, 16. The committee expected the new procedures to encourage mergers, consolidations and joint use of facilities that tend to rationalize and improve the Nation's rail system. Id. at 20, 1976 U.S.Code Cong. & Ad.News at 34. Similarly, the House expected that the new procedures would permit railroads to voluntarily rationalize the system in a short period of [229 U.S.App.D.C. 24] time. H.R.Rep. No. 725, 94th Cong., 1st Sess. 63 (1975). 6 26 The Staggers Rail Act of 1980, Pub.L. No. 96-296, 94 Stat. 793 (amending 49 U.S.C. §§ 10,101-11,917), also shows Congress' endorsement of mergers that enhance railroad efficiency. The Staggers Act did not change the Interstate Commerce Act provisions governing mergers of two or more class I railroads. However, it substantially deregulated the railroad industry in a variety of ways (notably rate-setting practices) and established the policy of the United States Government ... to minimize the need for Federal regulatory control over the rail transportation system and to foster sound economic conditions in transportation. 49 U.S.C. § 10,101a(2), (5).