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Simmons v. United States and Interstate Commerce Commission

decided: January 28, 1983.

PATRICK W. SIMMONS AND JACK O. BLACK, PETITIONERS,
v.
UNITED STATES OF AMERICA AND INTERSTATE COMMERCE COMMISSION, RESPONDENTS. THE BALTIMORE AND OHIO RAILWAY COMPANY, INTERVENING RESPONDENT



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

Cummings, Chief Judge, Pell, Circuit Judge, and Dumbauld,*fn* Senior District Judge.

Author: Pell

PELL, Circuit Judge.

We are presented with a challenge to an order of the Interstate Commerce Commission (ICC) granting the application of the Baltimore & Ohio Railroad (B & O) to abandon a section of track between Flora, Illinois and Sangamon Junction, Illinois (Flora line). The decision of the ICC followed our remand in the case in a decision holding the Commission's earlier approval of the abandonment application arbitrary and capricious. Illinois v. United States, 666 F.2d 1066 (7th Cir. 1981).

This case comes to us in an unusual posture. Six parties had petitioned for review of the Commission's order -- Illinois, the Illinois Commerce Commission, the Illinois Department of Transportation, the B & O (Chessie) Concerned Citizens Committee, Patrick W. Simmons, who is the Illinois Legislative Director for the United Transportation Union, and Jack O. Black, who is the Indiana Legislative Director for the United Transportation Union. Three days before oral argument, all petitioners except the labor representatives moved to withdraw from the petition. The moving parties announced that they had reached an agreement whereby B & O would sell the Flora line to the Prairie Trunk Railway, which would continue to operate the line if this court approved the abandonment.*fn1 We granted the motion to withdraw. The two labor representatives proceeded with oral argument. They urged this court to remand the case to the ICC to determine what impact the agreement would have on B & O employees.

A result of the withdrawal of all parties except the labor representatives is that it is unclear what the exact interest of the remaining parties in opposing the abandonment is. Instead of filing their own briefs, they joined in the briefs of the other parties, which made no mention of a possible impact on the workers by the abandonment. Despite the somewhat bizarre deserted ship situation in the present posture of the litigation, because the labor parties did join the briefs of the other petitioners notwithstanding that there may have been some differences of motivation for opposing abandonment, we shall address all of the issues raised in the briefs.

Petitioners present six issues on this petition for review. First, they challenge the fairness of the procedures employed by the Commission in the remanded case. Second, they argue that the ICC arbitrarily and capriciously determined that the Flora line incurred a deficit in the years 1974-1980. Third, they object to the Commission's consideration of opportunity costs incurred by the railroad. Fourth, they contends that the Commission's consideration of traffic prospects on the line was arbitrary and capricious. Fifth, they contend that the ICC improperly evaluated the evidence relating to the merger of the Chessie System and the Family Lines railroads (CSX merger). Sixth, they challenge as arbitrary and capricious the Commission's determination that adequate alternative transportation is available for shippers on the line.

I. FACTS

On March 18, 1975, B & O applied for a certificate of public convenience and necessity permitting the railroad to abandon the 103.29-mile Flora line. Several parties opposed the application, and the ICC, on October 27, 1976, referred the application to an administrative law judge (ALJ) for a hearing. On November 11, 1977, the ALJ denied the application in an initial decision, holding that B & O had failed to show that the public convenience and necessity permitted the abandonment. B & O appealed.

On June 13, 1978, Division I of the ICC reversed the ALJ and voted to grant the application. Baltimore & Ohio Railroad Abandonment, 354 I.C.C. 798 (1978). Petitioners filed for review in this court, but the ICC requested and received a remand from this court to correct possible material error in the Division I decision. On March 3, 1980, after taking supplementary evidence, the Commission affirmed the Division I decision allowing the abandonment. 360 I.C.C. 681 (1980). Petitioners filed for review in this court.

On January 20, 1981, this court vacated the decision of the ICC because of procedural unfairness and because the Commission's decision on the merits was arbitrary and capricious. Illinois v. United States, 666 F.2d 1066 (7th Cir. 1981). The court held that, although it was proper for the ICC to request and accept supplementary evidence, id. at 1070-71, the Commission improperly denied petitioners the right to cross-examine B & O witnesses with regard to the railroad's new evidence, id. at 1082-83. The court said that the Commission's conclusion that the railroad's maintenance figures were reasonable was arbitrary and capricious. Id. at 1077. The court said that the Commission acted arbitrarily and capriciously in not addressing petitioners' serious challenges to the representativeness of financial figures for the years following the filing of the abandonment petition. Id. at 1079. The court also held that the Commission's findings with regard to future traffic and alternative transportation were arbitrary and capricious. Id. at 1080. In addition, the court directed that the Commission on remand consider the impact of the CSX merger. Id. at 1081.

On March 17, 1981, the Commission reopened the proceedings and gave B & O thirty days to file revised evidence in the form of verified statements. The Commission gave petitioners twenty-two additional days (until May 8) to file reply verified statements. The Commission set the hearing for May 19.

On March 27, petitioners requested that they not be required to submit reply verified statements until after they had cross-examined B & O's witnesses and also asked that public witnesses be allowed to testify. On April 27, the Commission denied the deferral request on the ground that it wanted to avoid delay in the proceedings. The Commission further ruled that it would not require the ALJ to allow public witnesses to testify, but would leave the matter to his discretion. The ALJ did allow one witness for petitioners to testify.

By telegram on April 29, petitioners asked for a thirty-day extension to file verified statements and a thirty-day postponement of the hearing, but the Commission denied the requests. On May 7, the Illinois Department of Transportation and the B & O (Chessie) Concerned Citizens Committee informed the ICC that they would be unable to meet the May 8 deadline for filing reply verified statements. The labor representatives timely filed two statements. The petitioners filed several briefs after the May 19-20 hearing, as the Commission had invited the parties to do in its April 27 decision.

On January 2, 1982, the ICC, with one Commissioner dissenting, issued a decision granting the abandonment. The Commission rejected the claims of unfair procedures, defending its refusal to grant a thirty-day extension by citing budget limitations and its desire to avoid delay. The ICC held that petitioners did not show that B & O intended to discourage traffic on the line and rejected the claims that postapplication evidence was inherently unrepresentative of normal operations on the line. The Commission stated that no significant future traffic increases were likely and held that there were adequate alternative means of transportation for shippers. As an additional factor, the Commission noted that B & O was incurring a large opportunity cost in having to continue operating the line; the Commission emphasized, however, that it would have granted the application even without a consideration of opportunity cost.

On January 27, 1982, petitioners filed a petition to reopen on the grounds of new evidence relating to the impact of the CSX merger. The Commission denied the petition on April 21, 1982. This petition for review followed.

II. PROCEDURAL CHALLENGES

The role of courts in reviewing agency procedures is narrow. "Absent constitutional constraints or extremely compelling circumstances the 'administrative agencies 'should be free to fashion their own rules of procedure and to pursue methods of inquiry capable of permitting them to discharge their multitudinous duties.' '" Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc., 435 U.S. 519, 543, 55 L. Ed. 2d 460, 98 S. Ct. 1197 (1978) (quoting FCC v. Schreiber, 381 U.S. 279, 290, 14 L. Ed. 2d 383, 85 S. Ct. 1459 (1965) (quoting FCC v. Pottsville Broadcasting Co., 309 U.S. 134, 143, 84 L. Ed. 656, 60 S. Ct. 437 (1940) (footnote omitted))); see Illinois v. United States, 666 F.2d 1066, 1082 (7th Cir. 1981).

Petitioners object to the Commission's refusal to grant their request for a thirty-day extension of time in which to file statements in response to B & O's new evidence. They assert that the twenty-two day period*fn2 in which to respond was inadequate to analyze and respond to the complicated B & O evidence because of the need to hire experts to examine the evidence.

We find no compelling circumstances requiring reversal because of the refusal to grant an extension. This was not a new case, but rather was the same case in which petitioners had participated since 1975. They were thoroughly acquainted with the issues if not with the precise new evidence presented. Petitioners had thirty days in which to prepare evidence in advance of B & O's new presentation and twenty-two days after that to respond. Furthermore, the Commission invited the parties to submit posthearing briefs in which to address issues raised at the hearing. Although the Commission could have been more generous with its deadlines, the period was not so short under the circumstances that petitioners were treated unfairly.

It is not dispositive, as petitioners suggest it is, that B & O did not object to the extension of time. Parties cannot control an agency's docket or procedures through agreement among themselves. We also note that an agency is not precluded from trying to expedite a case simply because the proceeding has continued over a long period. There is a need to end agency proceedings at some point and, as the Commission noted, budgets are limited.

Petitioners also argue that the Commission improperly refused to postpone the hearing date even though it knew that several of petitioners' attorneys were committed to appear for oral argument before the Fifth Circuit on the same day. We find no unfairness. The petitioners knew of the potential conflict when the hearing date was set on March 17, 1981, and should not have waited until April 29 to ask the Commission to change the hearing date. The Commission rightly held that petitioners should have shown they made some effort to change the Fifth Circuit commitment before claiming necessity.

Finally, petitioners contend it was improper for the Commission to have declined to require the ALJ to hear oral opposition testimony upon remand, having allowed it in the prior proceeding. This claim is without merit. In Illinois v. United States we required only that petitioners be allowed to cross-examine B & O's witnesses, and petitioners were allowed to do so. The ALJ in fact did allow one witness for petitioners to testify at the hearing. We required no more, and indeed emphasized that our decision to require cross-examination was narrow and based on the "unique" factors present in the case. 666 F.2d at 1083.

Furthermore, an agency need not conduct an oral hearing in every proceeding, FCC v. WJR, 337 U.S. 265, 276, 93 L. Ed. 1353, 69 S. Ct. 1097 (1949); Illinois v. United States, 666 F.2d at 1082, although it may be required to allow cross-examination because of its particularly important role in establishing truth, id. at 1083. The Commission was not required to allow witnesses ...


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