Document: 406 U.S. 742 92 S.Ct. 1941 32 L.Ed.2d 453 UNITED STATES et al., Appellants,v.ALLEGHENY-LUDLUM STEEL CORPORATION al. No. 71—227. Argued March 27, 1972. Decided June 7, Syllabus 1. Two 'car service rules' promulgated by the Interstate Commerce Commission (ICC), requiring generally that unloaded freight cars be returned in direction of owning railroad, are 'reasonable' under Esch Car Service Act 1917, view ICC's finding, for which there is substantial record support, a national car shortage, and its conclusion shortage could alleviated mandatory observance rules, would give railroads greater use their provide an incentive purchase new equipment. Pp. 744—755. 2. The ICC proceeding this case was governed by, fully complied with, § 553 Administrative Procedure Act. 756 758. D.C., 325 F.Supp. 352, reversed. Samuel Huntington, Washington, appellants. Max O. Truitt, Jr., William M. Moloney, appellees. Mr. Justice REHNQUIST delivered opinion Court. 1 In 1969 two have general effect cars, after being unloaded, lines road cars. Several shippers instituted separate suits 28 U.S.C. §§ 2321—2325 to enjoin enforcement these rules. Florida East Coast R. Co. v. United States, 327 1076 (MD Fla.1971), action sustained three-judge court, but now before us similar court Western District Pennsylvania held Commission's order invalid. 352 (WD Pa.1971). We noted probable jurisdiction, 404 937, 275, 30 249, reasons hereinafter stated we conclude here challenged within scope authority conferred upon it Congress conformed procedural requirements. 2 country's long ago abandoned custom shifting between connecting roads, adopted practice shipping same loaded over ultimate destination. Nation thus became essence single common pool, used all roads. This necessarily required some arrangements eventual return owned it, 1902 through trade association dealt with related problems code car-service rules roads agreed among themselves comply. review promulgate rules1 as own, result sanctions attach violation railroads. 3 Because critical freight-car shortages experienced during World War I, enacted empowered establish reasonable practices respect 40 Stat. 101, 49 1(14)(a). pertinent language provides: 4 'The may . regulations, carriers railroad subject chapter ..' 5 No party has questioned 'rules, service,' therefore issue whether term below concluded, appellees contend, number question do not meet statutory requirement reasonableness. Appellees also contend findings jof insufficient Act, 551 seq. 6 proceedings establishes been increasingly concerned recurring available serve Nation's shippers. It found varying duration severity occur both annual phenomenon at peak loading periods times emergency. were unable promptly supply who had need them. 7 Underlying chronic found, inadequate concluded one principal factors causing operation car-pool system. system resulted on other than those time, since providing observed more often breach. Since deprived own extended very little acquire addition, on-line generally, hook or crook, arrange utilize significantly reduced normal sufficient equipment customers. intended make whose undersupply contributes directly feel pinch resulting from they helped cause. By each face up any inadequacies ownership run correct nationwide short exist. 8 Central justification promulgation finding ownership. assumed correctness supported evidence. 9 Shortly Second War, conducted investigation into adequacy utilization 'an inadequacy rail group.' Recognizing caused least part inability equipment, first era wartime demand then post-war boom, time imposed no obligation except require them file regulations service. 10 1963 began ownership, distribution, utilization. At investigatory phase 1964, determined 323 I.C.C. 48 (1964). Formal notification proposed rulemaking issued, questionnaire submitted various purpose compiling data use. After gathered, railroads, shippers, interested parties permitted verified statements further factual material adduce legal arguments. Commission, Bureau Operations, presented Hearing Examiner tabular collations data, suggested formula might compute sufficiency entire Code Rules Association American Railroads observance. 11 Many opposed Some appeared favor arguing unless compulsion enforcing them, purchased continue detained inordinately 12 50 days hearings, Trial issued his report, recommending against Although prior referring matter him, previously made definitive existed, Examiner's report competent evidence developed him such determination made. assigned several 13 comprehensive disagreeing trial examiner many respects, ordering attaching noncompliance. Finding '(t)he continuing relocation owner's major importance maintenance adequate supply,'2 inconveniences feared outweighed benefit accrue 14 adopting considered claims procedure exceptions A supplemental established another rule seek exception alleviate inequities hardships.3 15 'reasonable,' three reasons. First, although said specific owner should justify Second, financial effects affected Finally, fact even though enforced monetary penalties, nonetheless conceded obtaining complete compliance impossible. 16 standard judicial actions general, Paper Makers' Chemical 271 268, 46 500, 70 L.Ed. 941 (1926), taken particular, Assigned Cases, 274 564, 47 727, 71 1204 (1927), well decisions weigh introduced Commission; inquire wisdom promulgates, soundness reasoning reaches conclusions only ascertain latter rationally supported. judicially reviewing particular must alert differing governing exercise authority, hand, adjudicatory function, other: 17 'In cases cited, determining relative rights joint rate. making partition; performed function quasi-judicial nature. bar, exercised wholly legislative. Its legislate limited establishing rule. But application, condition validity adduced appropriateness every will applicable. connection, like legislators, reason general.' supra, 583, S.Ct., 734. 18 based primarily covering years 1955 1964. Over 10-year period total Class I dropped 12.4%, aggregate carrying capacity 5%. revenue tons originated 2.9%. decline plain box sophisticated types dramatic; 22.1%, while 18.9%. Testimony witnesses National Industrial Traffic League, Wood Products Association, Plywood Vulcan Materials shortage. These statistics, together portray gradually worsening ratio originated. 19 shortages, sense needed occurred chronically, seasons year quite true, suggest, conclusive Conceivably, adequate, yet poor shortages. Nonetheless, fairly rely availability factor base overall 20 surprisingly low percentage actually tracks given decreasing question. 1966, less 30% railroads' line owner, preceding remained mostly thirties. summarized situation words: 21 'From collected, obvious much problem today our last 1947. involves approximately out ten ordered fifteen demands means marshalled eliminate deficiencies.' 335 I.C.C., 285. 22 One marshaled deficiencies attack here. thrust unloading dispatched road. 23 Thus, frequently reasoned fact, statistics showing rapid originated, underlying important cause unavailability simply did jointly adequately goods lines. existence pool whereby foreign difficult, if impossible, relate statistically chose aligning closely present term, reasoned, bring home without doubt augment thereby augmented, better able needs 24 Appellees' fundamental substantive contention short-term consequences so seriously disrupt industry outweigh possible long-term benefits Act.4 While, course, conceding originally voluntary compliance, argue because largely breach, usages grown permit far efficient existing fleet Commission. state reliance consequent originating shipment, manufacturing plants located enlarged. They claim hamper movement traffic points. 25 immediate handling routing occasion serious inconvenience alike. If thrusting admittedly smoothly functioning transportation industry, supplied necessary rolling stock serving rationality open 26 case. significant length when While flexible presently shortterm advantages reasonably drawbacks well. otherwise adverse road's ability too few cushioned; beneficial dissipated. undoubtedly felt designed most efficiently Indeed, stress concession 'are improve insofar compatible primary objective increasing owner.' 294. 27 hold Congress, enacting criterion consider 'reasonable service' optimum however numerically be, argument sustained. Neither nor legislative history supports narrow reading grant On justified deciding afflicted economic illness get worse got better. Existing respecting tended destroy failure contributed provented Carservice tend restore temporary expense conform circumstances support grounds claimed absence inadequately ones, cite impossibility additional unreasonableness. 29 does abridges extent treating ultimately online now. If, placed competitive pressure certainly principle law know avoid borrow acquired acceding arguments rehearing, impossible tremendous units involved, and, accordingly applied established. How provision administered about speculate present. agency's proceed complex area regulation application entails concomitant exemption procedures allow special circumstances. Permian Basin Area Rate 390 747, 784—786, 88 1344, 1368 1370, 312 (1968). What bearing provisions 1(17) collection penalties best decided proceeding. basis collect penalty either expand contract definition 31 enough indicate relationship bases relied substantively press failed comply seq., citing Burlington Truck Lines 371 156, 83 239, 207 (1962), Secretary Agriculture 347 645, 74 826, 98 1015 (1954). clearly inapposite, however, Court dealing adjudication, rule-making. criticizing there, 'the accept practice,' U.S., 167, 245. reviewed action, agency action. Commenting '(i)n technical matters these, wide discretion formulating appropriate solutions,' went 'has explained departure norms sufficiently spelled decision.' 652—653, 831. For stated, find infirmaties applies Minneapolis & St. Louis 361 173, 192, 80 229, 240, 223 (1959). departed 556 557 Those sections, govern rule-marking requires. section, rulemaking, makes applicable '(w)hen statute opportunity hearing authorizing 'after hearing, complaint initiative complaint, (to) .,' 1(14)(a), 'be record.' 553. That distinction determinative 'A good deal significance lies statutes expressly determinations K. Davis. Law Treatise 13.08, p. 225 (1958). Sections 'only where statute, addition prescribes explicitly 'on record." Siegel Atomic Energy Comm'n, 130 U.S.App.D.C. 307, 314, 400 F.2d 778, 785 (1968); Joseph E. Seagram Sons Inc. Dillon, 120 112, 115 n. 9, 344 497, 500 (1965). Cf. First Bank McKeesport Federal Savings Loan Assn., 96 194, 33 (1955). suggest precise words record' suffice rule-making proceedings, invoke sections. power rather hearings Wong Yang Sung McGrath, 339 33, 445, 94 616 (1950), Ohio Bell Telephone Public Utilities 301 292, 57 724, 81 1093 (1937), 1(14)(a) record,' inapplicable. 34 proceeding, therefore, basically notice shall published Register, persons participate submissions, consideration incorporate concise statement purpose.5 'Findings' 'Conclusions' embodied requirements, nothing 35 promulgating authorized And procedurally acceptable judgment 36 Judgment 'Rule Foreign empty junction road, be: '(a) Loaded via rails, or, '(b) Delivered instances Rule invoked, involved. covered rails. destination closer rails station switch loading. (Car Selection Chart aid selecting loading.) '(c) 6. '(d) received load, received, Except handled haul service, direct connection owner. '(e) Returned delivering switching service.' Jurisdictional Statement 64. 264, 293 (1969). 19—Exceptions 'Exceptions (prescribed observance) improving utilization, owners, efficiency operations, alleviating hardships, Director Assistant D.C.' 172. Three briefs filed appellees, understandably presents affirmance slightly form, completely adopts affirmance, believe subsumed deal. likewise requires conduct

Category: 7