Court Opinion

ID: 7846521
Source: CourtListenerOpinion
Date Created: 2022-09-08 17:11:36.289875+00
Date Added: 2024-06-11T16:25:16.656720
License: Public Domain

MacKINNON, Circuit Judge,
concurring in part and dissenting in part:
I concur in the majority opinion insofar as it holds that the Interstate Commerce Commission’s exemption authority under 49 U.S.C. § 10505 is not limited to rate matters and that the challenged exemption order did not violate the “limited scope” requirement and was not invalid because it lacked a termination date.
My point of departure with the majority concerns its holding that designated operators must comply with the employee protective provisions of section 11347. The Commission has consistently taken the position that Congress did not intend the labor protective provisions to apply to designated operators. Thus, when, in the course of exempting designated operators from the *305requirement of obtaining Commission approval for mergers and similar transactions, the Commission stated that the labor protective provisions would not apply, the Commission was not exercising its exemption authority. It was merely construing the statute. Hence, the Staggers Act provision stating that “[t]he Commission may not exercise its authority [to grant exemptions] ... to relieve a carrier of its obligations to protect the interests of employees as required by this subtitle ” has no effect here, for the Commission was not exercising its exemption authority and designated operators are not required by section 11347 to protect the interests of employees in mergers and similar transactions.
Designated operators provide rail service pursuant to section 304(d) of the Regional Rail Reorganization Act of 1973 (3R Act), 45 U.S.C. § 744. Under the 3R Act the United States Railway Association promulgated a final system plan that determined which of the lines of the numerous Northeast railroads in reorganization would be transferred to the Consolidated Rail Corporation (Conrail). Those lines not included in the final system plan were subject to automatic discontinuance. Service over these lines, however, could continue if a subsidizer guaranteed payment to a designated operator of the difference between the revenues attributable to its rail service operations and its avoidable costs, together with a reasonable management fee. In re Exemption of Certain Designated Operators from Section 11343, 361 I.C.C. 379, 380, 383 (1979).
The Commission has treated designated operators differently from other rail carriers in a number of respects. Rather than require them to obtain a certificate of public convenience and necessity pursuant to 49 U.S.C. § 10101, the Commission has set up an independent procedure whereby designated operators need only obtain a “Certificate of Designated Operator” before commencing service. 361 I.C.C. at 380. Likewise, the Commission has not required designated operators who wish to abandon or discontinue service to obtain prior Commission approval under 49 U.S.C. § 10903 before terminating operations. When a rail carrier that must comply with section 10903 obtains Commission approval to abandon or discontinue service it receives a certificate describing the discontinuance that must “contain provisions to protect the interests of employees.”1 Thus, when a designated operator abandons or discontinues service, it is not required to comply with the employee protective provisions.
The Commission supported its position that labor protective provisions would not apply to mergers between designated operators by noting that although designated operators may include labor costs as part of their avoidable costs, labor protection cannot be so included. 361 I.C.C. at 383. The Commission thus concluded that Congress did not intend the labor protective provisions to apply
in section 11343 transactions between companies operating exclusively as Designated Operators .... [T]he intent of the 3R Act is to encourage continued rail service over lines which would otherwise be discontinued or abandoned; imposition of labor protection in section 11343 transactions might encourage these Designated Operators and their corresponding subsidizers to discontinue inefficient and costly Designated Operator operations rather than to use section 11343 transactions to achieve a more efficient and less costly continued operation.2
Since the Commission’s action with respect to labor protection was not an exer*306cise of its exemption authority, but instead an interpretation of the Interstate Commerce Act, it is entitled to “great weight and respect.”3 In my opinion the Commission has properly interpreted the statute that it is charged to implement and enforce. I accordingly dissent from the majority opinion insofar as it holds that the Commission improperly ruled that labor protection provisions do not apply to mergers and similar transactions between companies operating exclusively as designated operators.

. 49 U.S.C. § 10903(b)(2). This section requires that such “provisions shall be at least as beneficial to those interests as the provisions established under section 11347 of this title and section 565(b) of title 45.” Id.

. 361 I.C.C. at 383. The Commission stated that
Companies operating exclusively as Designated Operators are generally small financially, and have no major impact, singly or in combination, on the competitive situation of other common carriers by railroad.
Id. at 382.

. Munitions Carriers Conference, Inc. v. American Farm Lines, 415 F.2d 747, 749 (10th Cir. 1969). Accord, Trans Alaska Pipeline Rate Cases, 436 U.S. 631, 647 n.26, 98 S.Ct. 2053, 2063, 56 L.Ed.2d 591 (1978) (ICC regulation that was a contemporaneous construction of the Interstate Commerce Act by the people “charged with the responsibility of setting its . . . machinery in motion ... is presumptively correct”); Baltimore & Ohio Chicago Terminal R. R. v. United States, 583 F.2d 678, 683 (3d Cir. 1978) (“[i]n analyzing a question of statutory construction, ... to sustain the ICC it is necessary only that we find its interpretation to be a reasonable one”), cert. denied, 440 U.S. 968, 99 S.Ct. 1520, 59 L.Ed.2d 784 (1979).