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Indiana Harbor Belt Railroad Co. v. General American Transportation Corp.

decided: May 25, 1978.

INDIANA HARBOR BELT RAILROAD COMPANY, PETITIONER, UNITED STATES OF AMERICA AND INTERSTATE COMMERCE COMMISSION, RESPONDENTS,
v.
GENERAL AMERICAN TRANSPORTATION CORPORATION, UNION TANK CAR COMPANY, NORTH AMERICAN CAR CORPORATION, U.S. RAILWAY MANUFACTURING COMPANY, MANUFACTURING CHEMISTS ASSOCIATION, PULLMAN LEASING COMPANY, AND U.S. RAILWAY EQUIPMENT COMPANY, INTERVENORS



Petition for Review of an Order of the Interstate Commerce Commission.

Fairchild, Chief Judge, Tone, Circuit Judge, and Sharp, District Judge.*fn*

Author: Sharp

SHARP, District Judge.

This is an appeal from a determination by the Interstate Commerce Commission (the "Commission") that the Indiana Harbor Belt Railroad Company ("IHB") may not assess additional charges for the empty movement of privately-owned freight cars for ordinary repairs once they have entered the national car fleet and must participate in an excess empty mileage "equalization" rule published by the nation's railroads. It was initiated by a petition for judicial review filed with this Court by IHB on July 5, 1977.

The Commission's determination was made in a decision served on June 15, 1977 encompassing four separate Commission proceedings. They had been consolidated for disposition because all "deal with the issue of the lawfulness of any separate charge for the switching of empty privately-owned cars for ordinary repairs."

General American Transportation Corporation, Union Tank Car Company, and North American Car Corporation v. Indiana Harbor Belt Railroad Company, No. 35404, U.S. Railway Mfg. Co. v. Indiana Harbor Belt Railroad Company, No. 36269, Charges for Moving Empty Private Tank Cars on Own Wheels, No. 36379, and Charges for Movement of Empty Cars, East Camden and Highland Railroad Company, No. 36116, are the four cases embraced by the Commissioner's decision. The last of these is not before the Court because it did not involve IHB's charges, IHB was not a party to it and neither IHB nor anyone else has sought review of the Commissioner's decision as it applies to that case.

Dockets Nos. 35404 and 36269 were complaints by freight car manufacturing companies against IHB's assessment of switching charges pursuant to a claim that its existing tariffs applied to the empty movement of privately-owned cars to and from repair shops owned by those companies and located on IHB's tracks. Complainants argued that the tariff items under which the charges were assessed were inapplicable by their own terms and unlawful in any event because once freight cars have entered the national car fleet they become "instrumentalities of transportation", rather than "articles of commerce", and are then no longer subject to charges applicable to the transportation of property.

Docket No. 36379 was an investigation into the lawfulness of new tariff items published by IHB to overcome the objection that the charges it had been assessing on movements of empty privately-owned cars to and from repair shops were inapplicable by their own terms. The investigation also included the general issue of the lawfulness of any such tariff publication. The car manufacturer complainants in Dockets Nos. 35404 and 36369 were protestants in Docket No. 36379. Manufacturing Chemists Association ("MCA"), a non-profit trade association whose members account for more than half the total dollar investment in the privately-owned tank car fleet and a substantial portion of the total dollar investment in privately-owned covered hopper cars, was an intervening protestant in Docket No. 36379.

The Commission and the United States of America are Respondents to IHB's Petition here. Complainants, protestants and intervening protestant MCA have intervened in this judicial review proceeding in opposition to the relief sought by IHB.

JURISDICTION OF THE COURT

Our jurisdiction to review the order is derived from 28 U.S.C. §§ 2342 and 2321.

The petitioner's right to appeal the decision and order of the Interstate Commerce Commission is grounded on Title 5, U.S.C.A., §§ 701-706, commonly known as the Administrative Procedure Act. Section 702 provides:

"A person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof. "

This petition seeks to have the order of the Commission reversed and set aside as being in excess of the Commission's power, without a rational basis, not supported by substantial evidence in the record, and arbitrary and capricious in some respects.

ISSUE

Is the Commission's determination that any railroad, including the IHB, which participates substantially in the revenue generated by loaded movements of the privately-owned freight cars may not assess additional charges for the empty movement of such cars for ordinary repairs once they have entered the national car fleet and must participate in a nationwide "equalization" rule designed to allocate the responsibility for empty car mileage proportionally among those railroads which participate in loaded privately-owned car movements, rational and within the Interstate Commerce Commission's statutory powers?

ICC HOLDINGS

Specifically, the Commission determined: 1. IHB lawfully may not assess separate additional charges for switching empty privately-owned cars (tanks and other rail cars) for ordinary repairs and thus it must cancel its published exceptions to certain master tariff provisions published on behalf of all of the nation's railroads; 2. certain other tariff provisions published by IHB purporting to establish local switching charges for such repair movements are inapplicable, but if applicable, would be unlawful, thereby necessitating a refund of amounts already collected; and 3. IHB must participate in a uniform "equalization" rule published on behalf of all of the nation's other railroads, as the means by which the railroad industry is compensated for the cost of excess empty movements of tank cars.

STANDARDS OF REVIEW

The responsibility of the court in reviewing a decision and order of the Commission properly before it consists in deciding 1. whether the Commission has acted within the power delegate to it by law; 2. whether the Commission's decision is supported by facts or substantial evidence; 3. whether the order is based on specific findings of fact from the record; 4. whether the Commission's conclusions have a rational basis.

This Court reminds the Commission that our task requires a review of the whole record. Following the admonition of the Supreme Court in Universal Camera Corp. v. National Labor Relations Board, 340 U.S. 474, 71 S. Ct. 456, 95 L. Ed. 456 (1951), the Court held in Chicago Rock Island and Pacific Railroad Company v. United States and the Interstate Commerce Commission, 205 F. Supp. 378 (N.D. Ill. 1962), that the scope of judicial review of an order of the Interstate Commerce Commission is not limited merely to an examination of the evidence supporting findings reached by the Commission, but is based upon a review of the whole record. This scope of review is the result of the enactment of the Administrative Procedure Act, 5 U.S.C. § 706. That statute contains an express direction to reviewing courts to consider the "whole" record in determining whether administrative findings have the required evidentiary support.

As the Supreme Court observed with respect to the same requirement in the Labor Management Relations Act of 1947 in Universal Camera Corporation v. National Labor Relations Board, 340 U.S. ...


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