Court Opinion

ID: 9476531
Source: CourtListenerOpinion
Date Created: 2023-08-05 05:58:19.214921+00
Date Added: 2024-06-11T17:45:22.312863
License: Public Domain

WILLIAMS, Circuit Judge,
concurring:
I agree with the the court’s conclusion in Part III that the District Court properly dismissed the claim under § 206(a) of FLPMA, but would affirm for want of standing rather than on the merits. Even here, my disagreement with the court is a narrow one. All members of the panel agree that procompetitive concerns are “arguably” with the zone of protected interests, while anticompetitive ones are not. Thus, plaintiffs must allege a potential injury from some anticompetitive feature of the Secretary’s action. My sole area of disagreement is that I can discern no such allegation.
I write separately first to stress the reasons for restricting “competitor” standing under § 206 of FLPMA to procompetitive claims, second to analyze plaintiffs’ claims in light of that standard.
*533A
We deal here with one of the innumerable statutes directing an agency to act in the “public interest.” That does not, of course, encompass the private interests of every member of the public. For standing purposes, the first question is whether the public interest even “arguably” encompasses a plaintiffs interest in shelter from competition.
In some special contexts it would. When the core purpose of a statute is to barricade an area from competitive entry, the interests of firms that operate in the reserved area are presumptively congruent with the statutory goal. It is thus appropriate to treat them as “arguably” within the protected zone. See Clarke v. Securities Industry Association, — U.S. -, 107 S.Ct. 750, 754-59, 93 L.Ed.2d 757 (1987); FCC v. Sanders Brothers Radio Station, 309 U.S. 470, 476-77, 60 S.Ct. 693, 698, 84 L.Ed. 869 (1940); Panhandle Producers & Royalty Owners Association v. Economic Regulatory Administration, 822 F.2d 1105, 1108-09 (D.C.Cir.1987). Once the merely “arguable” zone is pared away, of course, the public interest under such statutes may well be found not to include protection of competitors. See United States v. FCC, 652 F.2d 72, 81-88, 102-03 (D.C.Cir.1980) (FCC must consider antitrust concerns in assessing public interest, but even under its entry-restricting enabling statute focus is on protection of competition, not competitors); see also Cities of Statesville v. Atomic Energy Commission, 441 F.2d 962, 986-87 (D.C.Cir.1969) (en banc) (Leventhal, J., concurring) (“administration of federal regulatory statutes calling for determinations of the public interest establish the authority, and in some instances the duty, ... to take into account what has been aptly called the nation’s ‘fundamental national economic policy,’ namely the principles of the antitrust laws”) (emphasis added) (citations and footnote omitted).
But the inferences appropriate to entry-restricting statutes cannot be transposed unthinkingly to every other administrative activity. The general background of federal statutes includes the antitrust laws, with their sweeping national commitment to competition. They reflect a belief that the public interest will generally be advanced by fostering competition rather than by sheltering competitors. Accordingly, in the absence of entry-restriction or some other hint of congressional hostility to competition, it seems appropriate to be skeptical of any claim that interests in restricting competition are even within the broad “arguable” zone.
Here the case for incorporation of the antitrust laws’ standards is especially appropriate. As the court points out, FLPMA expresses a direct interest in satisfying “industrial, security and environmental needs” — an interest that competition is likely to advance. Plaintiffs themselves cite 30 U.S.C. § 184(i) (1982), which requires the Secretary, before issuing any coal lease, to obtain the advice of the Attorney General “as to whether such lease would create or maintain a situation inconsistent with the antitrust laws.” Id. § 184(i )(2). As FLPMA and § 184(Z)were adopted by the same Congress, plaintiffs suggest that the latter’s concern for competition pervades the former. If so, the interest is clearly in the encouragement of competition, not its suppression.
Clarke reminds us to deny standing to a plaintiff whose interests “are so marginally related to or inconsistent with the purposes implicit in the statute that it cannot reasonably be assumed that Congress intended to permit the suit.” 107 S.Ct. at 757; see also id. at 756 n. 12 (the judicial “concern that the plaintiff be ‘reliable’ carries over to the zone of interest inquiry, which seeks to exclude those plaintiffs whose suits are more likely to frustrate than to further statutory objectives”). The panel unanimously resists plaintiffs’ efforts to fold pro- and anti-competitive concerns into a single package. Where a statute reflects an “arguable” concern with fostering competition, parties who cloak their anticom-petitive interests in loose talk of “competitive effects” are not suitable plaintiffs.
*534B
Plaintiffs here allege injuries of two types. The first is asserted precisely and plausibly, but is of the wrong sort. They contend that mining coal on fee interests, which Rocky Mountain has acquired through the exchange, is considerably less costly than mining on federal leaseholds, which entails royalty costs and regulatory constraints (such as “due diligence” and reporting requirements). Joint Appendix (“J.A.”) at 25-26. Moreover, the exchange cures Rocky Mountain’s checkerboard problem — the diseconomies that flow from trying to mine small, noncontiguous tracts. J.A. at 29. Plaintiffs contend that these diminished costs put them at a competitive disadvantage. Id.
All members of the panel agree in finding no competitive injury here. See Majority Opinion (“Maj.”) at 530 n. 9. The injury is similar to the plaintiffs claim in Cargill, Inc. v. Monfort, Inc., — U.S. -, 107 S.Ct. 484, 93 L.Ed.2d 427 (1986), that the defendant rival’s acquisition of still a third competitor would enable it to achieve “mul-tiplant efficiencies” and thereby to reduce prices. The Court held the injury insufficient for antitrust standing, finding that the antitrust laws do not prevent even a dominant firm from engaging in vigorous price competition. Id. at 492. As plaintiffs’ injury stems from the anticipated flourishing of competition, it is not arguably within § 206’s purposes.
Plaintiffs’ complaint also alleges that Rocky Mountain’s acquisition of the Corral Canyon coal will expand its and Union Pacific’s “ability to discriminate against competing plaintiff, non-railroad coal producers in setting rates and making hopper-car allocations.” J.A. at 27. The majority is persuaded that plaintiffs may thereby suffer an anticompetitive injury; I am not.
The complaint does not even attempt to suggest a scenario under which the coal acquisition would engender anticompetitive discrimination by Rocky Mountain and Union Pacific, but the record suggests a possibility. Under special circumstances, a coal-producing railroad might find it profitable to limit rivals’ access to its facilities. By curtailing competition in the sale of coal it could shift profits in fact derived from its market power in transportation, which regulation prevents it from collecting, to its coal sales, which escape regulation. A railroad’s acquisition of coal reserves may increase the likelihood of such behavior: the more coal, the more likely it is that coal profits to be derived from restricting competitors’ access will exceed losses in net transportation revenues. See generally Department op Justice, Competition in the Coal Industry 63-65 (1980) (“1980 Report”), reprinted in J.A. at 349-51.
Not all railroads, however, can carry out such a scheme. The Department of Justice has identified three conditions that must exist before a railroad owning coal deposits could injure competition by limiting access to its rail facilities. 1980 Report at 64-65. First, the firm must enjoy market power over transportation of coal to a particular point. Second, regulation must hold its rates at or near marginal cost (at least below what it could recover without regulation). Third, its ability to restrict service must not be effectively regulated.
Plaintiffs’ allegations fall conspicuously short of the conditions that would bring this case within the scenario depicted. On the subject of rail regulation, plaintiffs assert that enactment of the Staggers Rail Act of 1980 (“Staggers Act”), Pub.L. No. 96-448, 94 Stat. 1898 (codified as amended at 49 U.S.C. §§ 10101-11913a (1982)), emasculated rail-rate regulation. J.A. at 26-27. That assertion, if true, would establish the inability of railroads to secure forbidden anticompetitive benefits: if rate regulation is ineffective, a railroad could capture monopoly profits directly, in transportation. It would have no reason to resort to the subterfuge of constricting the access of its competitors. But it would be unsuitable for the court to rely on plaintiffs’ self-defeating allegations, for such reliance would require questionable assumptions about the operation of the Staggers Act, which preserved regulation of rates where a railroad has market power. See 49 U.S.C. § 10709(a), (b) (1982); General Chemical *535Corp. v. United States, 817 F.2d 844, 847-48, 850-57 (D.C.Cir.1987) (per curiam).
More destructive of plaintiffs’ claim is their failure to allege that Rocky Mountain or Union Pacific enjoys market power in the relevant market. They assert that Union Pacific operates the only line out of the Green River-Hams Fork region where Corral Canyon is located. See J.A. at 24. But that alone does not support an inference of market power. If alternative coal supplies at the delivery points provide enough competition, a railroad cannot raise its coal prices no matter how complete its control over a particular rail line. See General Chemical Corp., 817 F.2d at 850-51.
The administrative record here suggests a reason why plaintiffs failed to allege market power. Although the study underlying the 1980 Report did not closely examine competition at coal destinations, its authors appear skeptical that any railroad held market power in such markets. See J.A. at 325 n. 81, 364 n. 207. Further, the report specifically finds that Union Pacific
has no market power because Powder River coal is much more plentiful and much cheaper to mine than coal in the ... [regions where Corral Canyon is located]. The delivered price of coal from these regions is already too high to allow ... [Union Pacific] to significantly increase its rates without causing utilities to switch to other coal sources.
J.A. at 320; id. at 351. The same considerations would obviously prevent Union Pacific from securing monopoly profits on coal by constricting its coal-producing rivals’ access to its rail lines.
Of course findings in a government report can neither bind the plaintiffs to this lawsuit nor define this court’s jurisdiction. But the 1980 findings strongly suggest that plaintiffs’ failure to allege market power was anything but inadvertent.* In short, I find no claim that the coal acquisition here would inflict an anticompetitive injury on plaintiffs.

 Assuming, arguendo, that the 1982 merger of the Missouri Pacific Corporation and the Western Pacific Railroad Company into the Union Pacific Corporation might have afforded the latter some degree of market power, see J.A. at 24, plaintiffs’ failure to allege market power even in conclusory terms seems to me to foreclose any inference that they are asserting an injury from a reduction in competition.
While the 1980 Report supports a conclusion that Burlington Northern might raise coal prices from the Powder River region (from which it is the sole transporter), J.A. at 320-25, such conduct would scarcely confer market power on Union Pacific. Cf. Maj. at 531 n. 12. There is no reason to suppose that coal is not available from many sources at the prices at which it can be profitably mined in the Green River and Hams Fork regions (served by Union Pacific and including Corral Canyon). Thus, even if Burlington Northern captured the Ricar-dian rents available from Powder River coal, cf. C. Howe, Natural Resource Economics 78-79 (1979), Green River and Hams Fork suppliers would evidently remain marginal. In any event, plaintiffs’ failure even to allege market power should suffice for our purposes.