Consolidated Rail Corporation v. United States of America and Interstate Commerce Commission, Grocery Manufacturers of America, Inc., Intervenors

567 F.2d 64, 185 U.S. App. D.C. 197

• Court: Court of Appeals for the D.C. Circuit
• Decided: November 14, 1977
• Docket: 75-2089
• Status: Published

Opinions

Opinion for the Court filed by District Judge GESELL.

Dissenting Opinion filed by Circuit Judge WRIGHT.

GESELL, District Judge:

In a special rulemaking proceeding, the Interstate Commerce Commission has determined that there exists a national shortage of epoxy-lined (“XF”) boxcars and has required railroads using another line’s XF cars to make incentive per diem (“IPD”) payments to their owners.¹ Petitioner, Consolidated Rail Corp. (“Conrad”), asserts that there is not sufficient evidence in the record to support the shortage finding, which is a prerequisite to the imposition of the additional, incentive, payments. 49 U.S.C. § l(14)(a). We affirm the Commission.²

According to the Commission, the transportation of processed foods in ordinary boxcars presents serious risks of contamination. Ordinary boxcars (“XM”) are often infested with insects and rodents from the cargoes they carry. Processed food at the present time is carried predominantly in “class A” XM boxcars, which are ordinary cars that have been cleaned and inspected. The Commission has determined that these sanitizing procedures are insufficient. The visual inspection carried out for class A designation cannot detect any infestations between car walls, and the quality of such inspections varies. Further, it is possible for non-visible contaminants to later be introduced into the car. Thus, the Commission found that only the XF boxcars are sufficiently sanitary for the transportation of processed food, since the white epoxy lining prevents contaminants between the car walls from reaching the food.

The Commission’s finding of a shortage was based on evidence that 750,000 carloads of processed food are shipped annually, requiring a nation-wide fleet of 40,000-50,000 suitable cars. Since it has determined that only XF cars are suitable, and evidence indicated that only about 3,000 such cars exist, the Commission found a clear national shortage. IPD was thus imposed with the expectation that this would encourage the acquisition of XF boxcars.

Petitioner contends that there is no evidence of an XF boxcar shortage because there was no evidence that any processed food shipper had requested an XF car and not received one. It also claims that the Commission did not meet its own previously established criteria for the imposition of IPD.

Conrail assumes that there can be no finding of boxcar shortage under the statute unless there is a record of shipper complaints. However, in determining the existence of a shortage the Commission may certainly consider the public interest as well as the interests of shippers. IPD may be imposed to “encourage the acquisition and maintenance of a car supply adequate to meet the needs of commerce . . . .” 49 U.S.C. § l(14)(a). We cannot define the needs of commerce so narrowly as to exclude the need of consumers for uncontaminated, infestation-free food.³ There certainly is sufficient evidence on the record to support the Commission’s determination that the public’s needs are best served by the use of XF cars.⁴

It is clear that, as petitioner asserts, the Commission did not compile as elaborate a statistical record in the XF boxcar proceeding as it did in prior proceedings.⁵ But as Judge Wright notes,⁶ it would not have been possible for the Commission to generate such a record due to the recent development of the XF classification. The need to depart from previous procedures is adequately explained by this situation. See, e.g., Greyhound Corp. v. ICC, 179 U.S.App.D.C. 228, at 230-231, 551 F.2d 414, 416-417 (1977).

The dissent, however, after an exhaustive examination of the legislative history of this statute, concludes that IPD can be imposed only where boxcar shortages are caused by the tendency of some railroads to hold cars owned by other lines. It says, in essence, that this section of the statute was aimed only at inefficient car utilization practices. However, the statutory delegation of power goes far beyond this limited field:

It is the intent of Congress to encourage the purchase, acquisition and efficient utilization of freight cars. * * * In determining the rates of compensation to be paid for each type of freight car, the Commission shall give consideration to the transportation use of each type of freight car, to the national level of ownership of each such type of freight car, and to other factors affecting the adequacy of the national freight car supply. * * * Such compensation may be increased by any incentive element which will . . . provide just and reasonable compensation to freight car owners, contribute to sound car service practices (including efficient utilization and distribution of cars), and encourage the acquisition and maintenance of a car supply adequate to meet the needs of commerce . . . . 49 U.S.C. §. l(14)(a).⁷

We do not think the Court should rewrite this broad delegation by reference to the legislative history. It is too clear from the statute on its face that inefficient car utilization and distribution is but one of the permissible grounds for the imposition of incentive payments.

The Commission here has acted within its grant of statutory authority, and with substantial evidence to support its actions. The Commission is affirmed.

1 . Incentive Per Diem Charges-1968 (XF Cars), 350 ICC 11 (1975).

2 . We find on the record substantial evidence to support the Commission’s findings and do not reach the issue whether a lesser evidentiary showing would suffice. See Judge Wright’s opinion at p.--of 185 U.S.App.D.C., p. 68 of 567 F.2d, n.3 infra.

3 . We also note that the Commission may establish car service rules, after hearings, on its own initiative as well as after a complaint. 49 U.S.C. § l(14)(a).

4 . That the result may also be achieved, as the dissent suggests, by alterations in other car service rules is beside the point. Those determinations are left to the Commission.

5 . See Incentive Per Diem Charges-Gondolas, 40 Fed.Reg. 44851 (1975); Incentive Per Diem Charges-1968, 349 ICC 303 (1975).

6 . P. - of 185 U.S.App.D.C., p. 73 of 567 F.2d n.26 (12 infra.

7 . The statute currently reads as quoted, having been amended by § 212(a) of the Railroad Revitalization and Regulatory Reform Act of 1976 (P.L. 94-210, Feb. 5, 1976). See Judge Wright’s opinion p.-of 185 U.S.App.D.C., p. 68 of 567 F.2d n.6 for the text at the time the ICC decision in this case was made.