Court Opinion

ID: 8948664
Source: CourtListenerOpinion
Date Created: 2022-11-27 08:36:29.154076+00
Date Added: 2024-06-11T17:09:55.086361
License: Public Domain

BECKER, Circuit Judge, concurring in part and dissenting in part:
I join in Part III of the majority’s opinion, which concerns the ripeness of the parties’ contentions for judicial review. Additionally, I join in the majority’s analysis of the merits in Part IV, except for the portion relating to the Commission’s Management Efficiency constraint. I disagree with the majority when it upholds the Management Efficiency constraint as the Commission presently formulates it. In my view, circumstances exist in which the Commission’s formulation of the Management Efficiency constraint would permit carriers to pass the costs of inefficiencies on to consumers. Because I believe that possibility contradicts the reasoning involved in adopting Constrained Market Pricing as well as the statutory basis for the regulation, I consider the Commission’s decision arbitrary, capricious and contrary to law. Hence I dissent on this point.
Although I join the majority in upholding the Commission’s adoption of Stand Alone Cost modeling within its guidelines, I also write separately to identify the serious problems that I see developing if the Commission does not effectively minimize the costs incurred by shippers in challenging a carrier’s rates (either through a Stand Alone Cost model or through any other Constrained Market Pricing constraint) and maximize the discovery available to them when doing so. The shippers argue *1458forcefully that rate challenges will be frustrated by the complexity of the Commission’s inhospitable rules and procedures. Because I agree that rules and regulations that produce such futility would violate the shippers’ statutory right to challenge rates, I write to note my belief that future courts may have to set aside the rules if the Commission does not resolve these problems.
I.
I dissent from that portion of Part IV of the majority’s opinion that ratifies the Commission’s flawed formulation of the Management Efficiency constraint. The Commission would only provide relief from the financial burden of being captive to wasteful railroad management if the demonstrated avoidable revenue loss from the inefficiency rises to the level of the railroad’s entire revenue need shortfall.1 I find this construction arbitrary, capricious and contrary to law. I would therefore grant the petitions for review of Certain Coal Shippers and Consumers Power insofar as they question the Management Efficiency constraint, and I would remand the case for further proceedings.
The Commission offers three reasons for restricting the Management Efficiency constraint in this way. First, if the inefficiency is less than the revenue shortfall, no user has been harmed. Second, rate reductions for discovering inefficiencies would only increase the carrier’s costs, thereby forcing other shippers to bear a higher share of the railroad’s unattributed costs through higher prices. Third, because other rail users may have been harmed by the inefficiency, it would be inappropriate to allow a single user to gain a reduction for the management inefficiencies it discovers.
The Commission’s first reason proceeds from an assumption, voiced previously by Commissioner Andre, that “[t]he loss from inefficient operations (after verification and quantification) should first be applied as an offset to the carrier’s total revenue inadequacy shortfall before it is applied to justify revenue reductions____ Revenue reductions should be required only to the extent that the dollar amount of the inefficiency exceeds the revenue inadequacy shortfall.” Petition of Louisville and Nashville Railroad Co., 367 I.C.C. 639, 658, 659 (1983) (Comm’r Andre, concurring), aff'd sub nom. Public Service Co. of Indiana v. ICC, 749 F.2d 753 (D.C.Cir.1984). Because captive coal shippers are obligated to pay rates that would allow the railroad adequate revenues if it were operated efficiently, the shippers are not entitled to lower rates simply because the railroad is not managed efficiently.2 Inefficiencies that do not exceed revenue shortfall do not harm a shipper, the Commission appears to reason, because a rate reduction that accounts for management inefficiencies can be followed with a rate increase, calculated to allow the carrier to attain revenue adequacy, that exceeds the reduc*1459tion.3 The implication is that the carrier does not pass on to shippers the cost of management inefficiencies when it has not attained the level of revenue adequacy for efficient management. If the cost of management inefficiencies were passed on to shippers, however, the rate would contravene the Staggers Act. See Arkansas Power & Light Co., Petition to Institute Rulemaking Proceeding — Implementation of Long-Cannon Amendment to the Staggers Rail Act, 365 I.C.C. 983, 990 (1982) (“we fully subscribe to petitioners’ argument that differential pricing should not be used to pass a carrier’s avoidable revenue loss on to captive shippers”).
Within the limitations of economic theory, I can imagine circumstances in which the carrier might pass on at least part of its inefficiencies to shippers before it has attained revenues that are adequate under an efficient operation. A necessary step in analyzing this potential problem is one that the Commission did not undertake. It is necessary to ask why a carrier would set its rates at a level that does not provide adequate revenues.4 One reason a carrier might set a rate that would not make its revenue adequate is the restraint of market forces. Although carriers have monopolies on the freight of their captive shippers, they do not face totally inelastic demand. For example, an increase in the cost of transporting coal might encourage a utility (to which a captive shipper delivers its coal) to shift to oil. Alternatively, higher transportation costs would raise the cost of producing electricity and might thereby encourage the production of less electricity.5 The price increase would therefore result in the shipment of less coal. The higher price of rail services thus results in diminished demand, and it is this prospect of diminished demand that might encourage a railroad to charge a price less than that which provides a full return on its sunk physical costs, even though the revenue adequacy constraint permits such a higher price.6
Under these circumstances, the actual price set by a carrier may depend in part on the carrier’s variable costs and might well be less than that necessary for revenue adequacy. Inefficiencies that increase variable costs would thus increase the price demanded by the carrier for services, despite the impact that increased price has on demand. In such circumstances, the carrier may pass on part of the cost of inefficiency to captive coal shippers. Unlike consumers of competitive services, captive coal shippers cannot shift to alternative, more efficient carriers: they can only reduce their demand. The cost of inefficiencies would therefore impact on shippers as both an increase in price and a concommitant reduction in demand. Both constitute a harm, the existence of which undercuts the Commission’s contention that a carrier’s inefficiencies cannot harm shippers unless the revenues lost from management inefficiencies exceeds the carrier’s entire revenue shortfall.
*1460This harm also violates the statutory requirements of the Staggers Act. Under the circumstances outlined above, the carrier is able to pass the cost of avoidable management inefficiencies on to shippers— precisely what the Commission found contrary to law in Arkansas Power & Light Co., Petition to Institute Rulemaking Proceeding — Implementation of Long-Cannon Amendment to the Staggers Rail Act, 365 I.C.C. 983, 990 (1982). Moreover, the Commission has recognized that “the statute explicitly makes carrier ‘efficiency’ a factor that must be considered in determining the reasonableness of a challenged rate.” Petition of Louisville and Nashville Railroad Co., 367 I.C.C. 639, 645 (1983), aff'd. sub nom. Public Service Co. of Indiana v. ICC, 749 F.2d 753 (D.C.Cir.1984). So long as inefficiencies may harm shippers, the Commission must attempt to redress them; the Commission may not wait for the complete attainment of one Staggers Act goal — here, revenue adequacy — at the total sacrifice of another— management inefficiency. “One statutory factor cannot be ... blindly exalted at the expense of others that are at least co-equal in importance.” Public Service Co. of Indiana v. ICC, 749 F.2d 753, 765 (D.C.Cir.1984). As the Commission itself held when it reviewed that case, “the Federal standard for applying the efficiency factors is, and has been since the enactment of those factors, to consider and balance the factors in such a way that railroads can work towards revenue adequacy and efficiency at the same time. ” Petition of Louisville and Nashville Railroad Co., 367 I.C.C. at 646 (emphasis supplied); see also id. at 645 (“the two considerations must be balanced together ”) (emphasis supplied); S.Rep. No. 94-499, 94th Cong., 1st Sess., at 11 (1975) (“The Commission must strive to attempt to achieve a better balance between the goals of protecting shippers and stable competition and the need to provide adequate revenues to the railroads in order that substantial public services are maintained.”) (emphasis supplied).
As the Commission’s own contemporaneous interpretation of the Staggers Act, this construction is entitled to considerable deference. See, e.g., Quern v. Mandley, 436 U.S. 725, 744 n. 19, 98 S.Ct. 2068, 2079 n. 19, 56 L.Ed.2d 658 (1978). Thus, to be consistent with its own view of the statute, the Commission may not refuse to protect shippers from the burden of a carrier’s inefficiencies merely because the carrier is not revenue efficient.
The Commission’s second and third reasons for granting reductions for inefficiencies only if they exceed a revenue shortfall lack the forcefulness, I believe, even of the first reason. The Commission contends that it cannot reduce one shipper’s charges by each dollar of inefficiencies identified by that shipper because such a reduction would (1) unfairly shift costs to other shippers and (2) reward one shipper for the identification of inefficiencies that disadvantage many others. The short answer to these justifications is that the Commission has mischaracterized the opposing views.7 *1461The Commission was not requested to award a “bounty” to the identifying shipper, only to apportion a reduction in rates based on the carrier’s inefficiencies to all affected shippers. By reducing the rates of individual shippers only by their share of the harm, as the commentor suggests, the Commission would not shift costs or unfairly burden any shipper. The argument that the discovering railroad should not receive a rate reduction equal to the entire avoidable revenue loss attributable to the discovered management inefficiency — which is certainly correct — in no way supports the Commission’s decision to deny the discovering railroad any reduction.
The Commission now complains that the commentors “did not offer a methodology to determine the level of the proposed compensation.” Ex Parte No. 347 (Sub-No. 1), 1 I.C.C.2d at — n. 56, slip op. at 26 n. 56. This argument is disingenuous because the Commission itself adopted a method for apportioning unattributed costs among captive coal shippers in Ex Parte No. 347 (Sub-No. I).8 In addition, the Commission defends an attack on the Stand Alone Cost constraint on the theory that apportionment may be accomplished either by (1) the direct application of the Ramsey pricing principle of allocation based upon demand elasticity, or (2) the presumption that “the revenue contribution of other (i.e., non-complaining) shippers will be at the level of their current rates.” Ex Parte No. 347 (Sub-No. 1), 11.C.C.2d at —, slip op. at 29; see also Maj.Op., supra at 1456. Just as the unattributed costs are presumptively borne in this proportion by all captive coal shippers, so may the reduction in that revenue shortfall represented by the discovery of avoidable revenue loss be apportioned in some way.
In sum, none of the three reasons advanced by the Commission to explain the limitation on the Management Efficiency constraint are supportable. We should therefore grant the petitions for review to the extent they challenge the Management Efficiency constraint and remand to the Commission for further findings. Because the Commission adopts Ramsey pricing principles, I believe that we should remand to permit it to develop a method of apportioning the avoidable revenue loss attributed to management inefficiency in a manner consistent with those principles.9 Moreover, the circumstances under which a carrier, even though revenue-inadequate, would pass on to shippers the costs of management inefficiencies should also be tested by the agency’s expertise on remand. In light of its extensive experience with railroad ratemaking, its understanding of railroad economics, and its ability to develop sound facts to support admittedly broad theories, the Commission *1462should directly address this possibility for harm.
II.
Congress enacted the Staggers Act in part to grant captive coal shippers a procedural mechanism whereby they may challenge the rates charged them by rail carriers. I join with the majority when it upholds the general proposition that the Stand Alone Cost constraint of Constrained Market Pricing is a proper exercise of the discretion granted the Commission under the Act. I also agree with the majority when it (implicitly) evinces a tolerance for this well-reasoned form of regulatory experimentation.
I write separately on this point to explain the serious problems of practical application that lurk beneath the adoption of the Stand Alone Cost constraints, problems associated with litigation costs and the Commission's prescribed showing for entitlement to discovery. Excessively burdensome litigation expenses and impediments to discovery, both incipient in the Constrained Market Pricing regime, have the potential to defeat the congressional scheme by working to deny captive coal shippers meaningful access to rate review — a state of affairs that would require granting relief to the shipper-petitioners. Because the Commission has it within its power to exacerbate or mitigate both of these problems, and because the practical denial of meaningful rate review because of either would have to be considered arbitrary, capricious and contrary to law, I believe that the Commission and future reviewing courts must be vigilant that the experiment does not go awry.10
A.
One of the most significant practical problems with the Stand Alone Cost constraint is the cost to the shipper of challenging a rail rate under the system. As the Chairwoman of the Commission has acknowledged, “the costs of presenting a maximum rate case may be too great for the small shipper.” Consumer Rail Equity Act: Hearing on S. fy77, Before the Subcommittee on Surface Transportation of the Senate Committee on Commerce, Science and Transportation, 99th Cong., 2nd Sess. (1986) (testimony of Heather Gradison). The reason for this expense should be obvious: the protesting shipper is required to “assume a railroad” — no mean task. As the evidence before the Commission reveals, the calculation of stand-alone costs involves
determination of a hypothetical standalone railroad and the current reproduction costs of trackage, locomotives, and freight cars. One of the first problems encounteed by the “stand-alone” analyst is how many miles of track and how many locomotives and cars are needed for the “stand-alone” rail network. With traffic which is diverse in nature, involving several railroads and movements over branch lines and main lines, between multiple origins and destinations, computation of stand-alone cost amounts to a rationalization as to which facilities and how much equipment would be needed for the hypothetical operation.
Verified Statement of Eugene F. Bilz, at 6 (July 28, 1983). Such a complex, time-comsuming calculation can only be pursued at a high price.
Prohibitive costs would impermissibly impede access by small shippers to the rate review that Congress has mandated. It is not apparent from the record before us exactly what the costs involved in an individual Stand Alone Cost model will be, nor can I demonstrate at this juncture and on this record that they will be higher than costs attendant to individual litigation under the present Commission jurisprudence. But common sense tells me that they must *1463be, given the “assume-a-railroad” requirement that I have identified.11
The Interstate Commerce Act was not passed as a full employment bill for economists; it provides a procedure to shippers for challenging railroad rates. If a shipper was forced to duplicate the development of an expensive Stand Alone Cost model that another shipper had previously developed, the Commission would be employing economists at the expense of the captive shippers it was in part established to protect.12 Such a result would have to be considered contrary to law. Indeed, the Stand Alone Cost system was adopted as a surrogate, to implement Ramsey pricing without the attendant costs of the exact quantifications of true Ramsey pricing — long-run marginal cost and demand elasticity for every rail movement in the carrier’s system. See id. at 9, 15, 16-17. Inflating the already high price of modeling or failing to control it would be contrary to this stated purpose.
It is evident that the Commission has cost control within its power. Because the Commission has the power to abuse its discretion by imposing untoward litigation costs through a failure to exercise such control, it must be vigilant to minimize costs as specific applications put flesh upon the guidelines. Failure to do so, in my view, would render the Stand Alone Cost constraint (and perhaps the entire Constrained Market Pricing regime, of which Stand Alone Cost is a critical part) arbitrary, capricious and contrary to law.
B.
I am also concerned that discovery problems may impede access to the system of rate review that Congress has mandated. In this regard, I join three of the four commissioners13 who wrote separately out of concern that the Commission’s discovery procedures might deny access to relevant information. See Ex Parte No. 347 (Sub-No. 1), 1 I.C.C.2d at —, slip op. at 35 (Chairman Taylor, commenting); id. (Comm’r Simmons, commenting); id. at —, slip op at 36 (Comm’r Lamboley, concurring). As petitioner Consumers Power describes this concern, the Commission will retard the needed flow of information by imposing “a substantial threshold burden on a shipper seeking to present a case.”
The Commission’s decision states with regard to discovery that “a shipper seeking discovery must state with particularity the nature and substance of the charges it seeks to prove, as well as the basis for its belief in those charges. In other words, it must demonstrate a real, practical need for the information.” Id. at 33. I find troublesome the Commission’s equation of “a real, practical need for the information” with a petitioner’s ability to “state with particularity the nature and substance of the charge it seeks to prove.” The very reason that a *1464shipper petitioning for relief would require information — that is, that the data is the type that is wholly in the hands of the railroad or another shipper, see id. at 35 (Comm’r Simmons, commenting) — is the reason it may be unable to specify with particularity the charges it seeks to prove.
The Commission’s “particularity” concept must be narrowly defined if it is to avoid improperly denying access to congressionally mandated rate review. Because of the vital role played by such information throughout the Constrained Market Pricing system,14 and to animate the Commission’s stated desire that shippers obtain all information that is of practical necessity, the Commission’s “particularity” concept should mirror modern principles of notice pleading as opposed to the model presented under Rule 9(b) of the Federal Rules of Civil Procedure. Cf. Note, Pleading Securities Fraud Claims with Particularity Under Rule 9(b), 97 Harv.L.Rev. 1432 (1984). I note, therefore, that the Commission has previously defined its discretion under the Staggers Act in this manner, refining any “particularity” concept implicit in the statute as requiring only that the complaining shipper notify the carrier of the information it is requesting with reasonable specificity.
In Arkansas Power & Light Co., Petition to Institute Rulemaking Proceeding — Implementation of Long-Cannon Amendment to the Staggers Rail Act, 365 I.C.C. 983 (1982), the Commission specifically held that
complainants usually do not possess specific information about a railroad-respondent’s traffic mix and pricing practices. Threfore [sic], we will grant reasonable discovery requests to enable the complainant to obtain from the rail carrier information relevant to the Long-Cannon factors.15 Id. at 997 (footnote to above-cited ICC discovery rules omitted). This represents a “contemporaneous construction of a statute by the men charged with the responsibility of setting its machinery in motion,” Udall v. Tallman, 380 U.S. 1, 16, 85 S.Ct. 792, 801, 13 L.Ed.2d 616 (1965) (citations omitted), and is thus entitled to substantial deference. I assume that this facet of the Commission’s jurisprudence will control, for the area becomes most problematic if it does not.
The problems that Consumers Power anticipates should also be alleviated by our holding that “the shipper has access to data in the exclusive possession of carriers through ICC discovery procedures.” Maj. Op., supra at 1454-55. This holding properly imports into Constrained Market Pricing the I.C.C. discovery procedures codified at 49 C.F.R. §§ 1114.21 — 1114.31 (1986), which are “applicable to all types of [I.C.C.] proceedings,” 49 C.F.R. § 1100.2 (1986), and are to be “construed liberally to secure just, speedy and inexpensive determination of the issues presented.” 49 C.F.R. § 1100.3 (1986).16 These discovery rules were promulgated pursuant to full notice and comment, see 47 Fed.Reg. 49,534 (1984) (final rules); 47 Fed.Reg. 28,115 (1982) (notice of proposed rules), and define the “particularity” concept as one of notice and not an impediment to discovery. See, e.g., 49 C.F.R. §§ 1114.22(b)(4), 1114.30(b) (1986) (requiring “particularity”); see also 49 *1465C.F.R. § 1104.5(b) (1986) (specifying form of particularity required in pleading).
In sum, I presume that these discovery rules will be properly applied, notwithstanding the harbingers of a more restrictive view contrained in the Commission’s decision. I therefore join in the court’s holding that the threshold discovery requirement of particularity neither contradicts the theories behind Constrained Market Pricing nor offends either the dictates of the governing statute or the guarantees of constitutional due process. Time will tell whether our confidence has been justified.

. The Commission makes revenue adequacy the touchstone of the Management Efficiency Constraint despite the fact that both the Congress and the Commission itself have raised serious doubts about the estimation of revenue adequacy. As Chairwoman Gradison has testified in Senate hearings, "the Commission is unanimous in its recognition that there are real problems in the estimation of revenue adequacy.” Consumer Rail Equity Act: Hearing on S. 477, Before the Subcomm. on Surface Transportation of the Senate Committee on Commerce, Science and Transportation, 99th Cong. 2d Sess. 27 (1986) (testimony of Heather Gradison). Apparently, no railroad currently meets the Commission’s test of revenue adequacy. Indeed, in the same hearings, Chairwoman Gradison was taken to task by Senator Long because, despite a finding that it was not revenue adequate, "Norfolk Southern came in here With $1.2 million and a lot of influence to see if they could buy Conrail.” Id. at 37.
The Commission has now completed proceedings that revise its previous definition of revenue adequacy. See Standards for Railroad Revenue Adequacy, Ex Parte No. 393 (Sub-No. 1) (December 16, 1986). At least five different petitions for review of these proceedings have been docketed to date. See Nos. 86-3798, -3799 (3d Cir., Dec. 31, 1986); Nos. 86-1734, -1735 (D.C.Cir., Dec. 31, 1986); No. 87-3002 (3d Cir., Jan 6, 1987).

. As formulated by the Commission, the Management Efficiency constraint is therefore an adjunct to a determination of revenue adequacy because the constraint assures only that revenue adequacy is evaluated in the context of an efficient railroad.

. This reasoning may be made concrete by an example. A carrier's current rate structure produces a million dollar revenue shortfall, and a shipper complains that the carrier incurs $100,-000 of management inefficiencies. The Commission reasons that this complaint should not result in the carrier’s rates being reduced to eliminate revenues equal to the revenues lost through the inefficiency. Even if the carrier eliminated the waste, it would still have a $900,-000 shortfall. After the rate reduction, the carrier would, therefore, be able to raise rates in order to eliminate the remaining revenue need shortfall because the inefficiency is less than the extra revenues it is entitled to earn to attain revenue adequacy.

. This inquiry should be made by the Commission on remand. A full examination of the nature of railroad pricing policies is the province of the expert agency, and I confess some level of discomfort in being placed in the position of having to make the analysis from scratch. However, I cannot pay deference to an expert agency determination that the agency did not make. I can only be cognizant of the fact that, on remand, the Commission would be able , to correct my own misconceptions by reference to factual data and expert opinion.

. If the increased cost of production is passed on to consumers, consumers may use less electricity, thus prompting less production.

. So long as the price exceeds average variable costs, i.e., the yet-to-be incurred costs of providing rail service, the carrier would continue to provide the service, at least until it discovers an alternative use of the sunk investments that would be more profitable.

. The Commission’s view appears predicated on a mischaracterization of the argument presented in the comment of Edison Electric Institute to which it purports to be responding. The Commission construed Edison’s comment as a request for "a 'bounty' approach to compensating captive shippers." Ex Parte No. 347 (Sub-No. 1), 1 I.C.C.2d at —, slip op. at 26. See also Maj.Op., supra at 1455. In reality, Edison Electric requested only that the Commission:
[r]educe each carrier’s gross revenue shortfall by the amount of revenue that the carrier is losing on all of its non-compensatory traffic and the amount of additional revenue it could be earning on all of its competitive traffic. (These steps are required of the Commission under the Long-Cannon Amendment, 49 U.S.C. § 10707a(e)(2)(B) and (C), and the statutory provision that rail carriers be "honest, economical and efficient”).
Comments of Edison Electric Institute, at 3 (July 28, 1983). Edison Electric continued that shippers would derive the benefit of such a reduction when the Commission
determines the equitable share of the shortfall that each captive shipper should bear. All captive shippers must share in the shortfall, as contemplated by 49 U.S.C. § 10707a(e)(2)(C) (iii)____ [But] a rail carrier must not be permitted to penalize other captive shippers because it has failed to charge appropriate rates on non-regulated traffic. Any revenue shortfall which results from exempt traffic not providing the maximum revenue possible must be borne by the railroads. This, again, is required by the statutory command that carriers be "honest, economical and efficient” *1461and by the requirements of the Long-Cannon amendments.
Id. at 4. In my view, the Commission’s mischaracterization of Edison Electric’s proposal as a "bounty” request is pejorative and may even amount to "the arbitrary failure to give proper consideration to the core of the petitioner’s claim [that] is an abuse of discretion.” Santa-Figueroa v. INS, 644 F.2d 1354, 1357 (9th Cir. 1981).

. The whole theory of Constrained Market Pricing is predicated in part upon a finding that "payment for facilities or services which are shared (to its benefit) by other shippers should be apportioned according to the demand elasticities of the various shippers.” Ex Parte No. 347 (Sub-No. 1), Coal Rate Guidelines, Nationwide, 1 I.C.C.2d at —, —, slip op. at 1, 5 (Aug. 8, 1985).

. As I noted earlier, seesupra at 1458, the Commission’s current formulation of the Management Efficiency constraint appears to proceed from reasoning enunciated by Commissioner Andre in his concurrence in Petition of Louisville and Nashville Railroad Co., 367 I.C.C. 639, 658 (1983) (Comm’r Andre, concurring), aff’d sub nom. Public Service Co. of Indiana v. ICC, 749 F.2d 753 (D.C.Cir.1984). In adopting Commissioner Andre’s reasoning, however, the Commission failed to embrace the first, and in my view most important, step:
First, the revenue inadequate railroad should be given an opportunity to submit a plan for the elimination of the loss traffic or inefficiency____ In order to satisfy the statutory concern for efficient operations, revenue reductions for profitable traffic may be allowed if the railroad refuses to take feasible and lawful steps to eliminate the inefficiency.
367 I.C.C. at 659. Consideration of this vital first step should also be undertaken by the Commission on remand.

. I also note that my concerns are not mitigated by the contention that the Stand Alone Cost constraint is merely a back-up to the Management Efficiency constraint. Rather than a back-up, it is a fully independent method of testing a rail rate under the Staggers Act. Moreover, because I view the Management Efficiency constraint as flawed, see supra Part I, I find potential problems with the Stand Alone Cost constraint especially worrisome.

. At oral argument, the attorney for Consumers Powers represented that, on the basis of evidence submitted to the Commission as part of its hearings on Ex Parte No. 347 (Sub-No. 2), "stand-along cost studies that have been presented to date have cost up to fl million or more." Tr. at 74. The fact that large entities have in the past been able, to afford such fees does not preclude the possibility of smaller entities in the future being unable to meet the charges without substantial hardship.

. For example, if Shipper A challenges a rate with a Stand Alone Cost model, it may present an ideal grouping that captures the relevant economies of scope, scale and density without the disadvantageous burden of excess capacity. If Shippers B and C are a part of that grouping, they may benefit from access to Shipper A’s model in presenting any of their own rate challenges. Of course, Shipper A alone should not have to bear the cost of preparing a model from which all three shippers derive substantial benefit. But a system of cost sharing would better alleviate this problem than one that does not facilitate the sharing of information and thereby forces shippers to reinvent the models of other shippers. To this end, to avoid a finding that it has abused its discretion in a particular case, the Commission might consider allowing one shipper discovery from another shipper who had previously developed a relevant Stand Alone Cost model, sharing costs under authority of 49 C.F.R. § 1114.21(c)(3) (1986); see also 49 C.F.R. § 1114.22(a) (1986) (allowing discovery against non-parties). Similarly, too broad an issuance of protective orders under 49 C.F.R. § 1114.21(c) (1986) would impose higher litigation costs and could lead to a finding that the Commission has abused its discretion.

. Seven commissioners participated in the decision.

. The central role of such information is not confined to the Stand Alone Cost constraint. It pervades all of the constraints involved in Constrained Market Pricing.

. The Commission continued:
In view of the short deadlines for deciding rail cases (49 U.S.C. 10327), complainant must make its discovery request as soon as possible after it files its complaint and must focus its request as narrowly as possible. We will not sanction "fishing expeditions” in which a complainant asks a carrier to reveal cost studies for all its movements. Complainants must identify particular commodities or rates or routes that it believes appropriate for Long-Cannon analysis and so focus their discovery requests.
Id. at 997.

. 49 C.F.R. § 1100.2 requires application of these procedures even without explicit incorporation. Specific incorporation is apparently the practice only where private parties include it in recommended regulations submitted for Commission approval. See, e.g., Ex Parte No. 445 (Sub-No. 1), Intramodal Rail Competition, 1 I.C.C.2d 822 (1985); 50 Fed.Reg. 46,066 (1985), codified at 49 C.F.R. § 1144.6(c) (1986).