National Grain & Feed Ass'n v. United States

5 F.3d 306
CourtCourt of Appeals for the Eighth Circuit
DecidedSeptember 16, 1993
DocketNos. 92-2398, 92-2455
StatusPublished
Cited by13 cases

This text of 5 F.3d 306 (National Grain & Feed Ass'n v. United States) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
National Grain & Feed Ass'n v. United States, 5 F.3d 306 (8th Cir. 1993).

Opinions

HEANEY, Senior Circuit Judge.

The National Grain and Feed Association and the North Dakota Grain Dealers Association petition for review of a decision by the Interstate Commerce Commission (“the Commission”) approving the Certificate of Transportation program of the Burlington Northern Railroad Company. We affirm in part and reverse in part, and remand to the Commission for further consideration of the relevant common carrier obligations.

I

In June 1988 Burlington Northern Railroad Company began selling guaranteed future rail transportation capacity by public auction. The Burlington Northern auction allows shippers to bid on specified rail transportation up to five months in advance of an approximately two-week shipping period. Shippers participating in the auctions bid on negotiable Certificates of Transportation (“COTs”) that are specific to one of fourteen different “corridors.” A corridor, in turn, is specific to the particular commodity to be shipped as well as to the size and direction of shipment.1

Burlington Northern manages all aspects of the COT auctions, periodically announcing the offer of specified COTs and setting the minimum acceptable bid. Shippers transmit bids by telephone or telefaesimile. Under current practice, the successful bidder must make an initial down payment of twenty-five percent of the COT. purchase price, the balance to be paid five days before the designated shipment period. The successful COT bid, together with the relevant corridor information, is filed with the Commission on one day’s notice as a tariff pursuant to 49 U.S.C. § 10762 (1988).

Because COTs are filed as tariffs, rather than contracts, there is no specific statutory limit on the grain car capacity that Burlington Northern could auction through such a program, and there is no limit on the quantity of COTs that a single large shipper might purchase. As currently administered, Burlington Northern voluntarily limits the grain cars available for auction in the COT pro[308]*308gram to forty percent of its total covered hopper fleet. The percentage of the fleet actually auctioned in the COT program has been less than forty percent, but as conceded at oral argument, during periods of peak demand in certain corridors, the number of COT cars actually loaded may exceed seventy percent of all loadings.2 It also is typical that as few as four large shippers control the vast majority of the COT car capacity.

Burlington Northern pays a penalty if it fails timely to supply the contracted rail cars for COT bearing shippers. Shippers who rely on the conventional tariff service, therefore, do not receive priority service, occasionally not receiving cars until after they no longer are needed. This second-rate service for conventional shippers exacerbates what allegedly already was untimely service for some shippers because of Burlington Northern’s practice of providing conventional tariff service on a first-come-first-served basis, rather than allocating ears according to historical demand. The petitioners allege the COT program thus unreasonably increases the time conventional shippers must wait to receive car service — especially during periods of car shortages.

II

On 7 March 1988 the petitioners filed a complaint with the Commission challenging the COT program as unlawful under the Interstate Commerce Act. They alleged four grounds on which the program violated the Act: The program does not qualify as a special tariff under 49 U.S.C. § 10734 (1988); the program violates Burlington Northern’s common carrier obligations as described in 49 U.S.C. §§ 11101(a) and 11121(a)(1) (1988); the program’s practices and procedures constitute one or more unreasonable practices under 49 U.S.C. § 10701 (1988); and COTs are contracts, not tariffs, and must therefore be approved and filed with the Commission as contracts pursuant to 49 U.S.C. § 10713 (1988).

The Commission heard the complaint pursuant to its modified procedures under 49 C.F.R. § 1112. On 20 April 1992 the Commission issued its decision in this proceeding, finding the petitioners’ challenges to be without merit, and dismissing the complaint. See National Grain and Feed Assoc. v. Burlington Northern R.R., 8 I.C.C.2d 421 (1992). In its decision the Commission concludes that Burlington Northern’s COT program qualifies as a special tariff under 49 U.S.C. § 10734, that it is in substantial compliance with the Commission’s tariff filing rules, that it does not violate Burlington Northern’s common carrier obligations, and that it does not violate any other provision of the Interstate Commerce Act, including the prohibition of unreasonable practices.

The petitioners seek review of the decision of the Commission, to which they are entitled under 5 U.S.C. § 702. We exercise jurisdiction under 28 U.S.C. §§ 2321(a) and 2342(5). The petitioners seek reversal of the decision on the grounds the Commission misconstrued the relevant provisions of the Interstate Commerce Act, abused its discretion, and exceeded its statutory authority.

Ill

Burlington Northern’s COT program, a new approach to the sale of rail transportation, has never before been scrutinized by the Commission or the courts. Because some of the implicated provisions of the Interstate Commerce Act also have evaded judicial scrutiny, we are presented with several issues of first impression. In this context, we emphasize that when reviewing a ruling of an administrative agency, we are constrained to grant considerable weight to the agency’s construction of the statutory scheme it is entrusted to administer. Chevron v. Natural Resources Defense Council, Inc., 467 U.S. 837, 844, 104 S.Ct. 2778, 2782-83, 81 L.Ed.2d 694 (1984). “If the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute.” Id. at 843, 104 S.Ct. at 2782. Thus, we may not [309]*309substitute our construction of the statutes for a reasonable interpretation made by the Commission. Id. at 844, 104 S.Ct. at 2782-83.

A Contract versus Tariff

The petitioners allege the Commission abused its discretion and misconstrued the law when ruling that COTs may be filed as special tariffs under section 10734 rather than as contracts under section 10713.

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Bluebook (online)
5 F.3d 306, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-grain-feed-assn-v-united-states-ca8-1993.