United Transportation Union v. Interstate Commerce Commission and United States of America, Association of American Railroads, Intervenor

891 F.2d 908, 282 U.S. App. D.C. 38, 1989 U.S. App. LEXIS 17870
CourtCourt of Appeals for the D.C. Circuit
DecidedNovember 28, 1989
Docket88-1773
StatusPublished
Cited by148 cases

This text of 891 F.2d 908 (United Transportation Union v. Interstate Commerce Commission and United States of America, Association of American Railroads, Intervenor) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United Transportation Union v. Interstate Commerce Commission and United States of America, Association of American Railroads, Intervenor, 891 F.2d 908, 282 U.S. App. D.C. 38, 1989 U.S. App. LEXIS 17870 (D.C. Cir. 1989).

Opinions

Opinion for the Court filed by Circuit Judge SILBERMAN.

Opinion concurring in denying the petition for review filed by Circuit Judge RUTH BADER GINSBURG.

SILBERMAN, Circuit Judge:

This is a petition brought by the United Transportation Union (“UTU”),1 seeking review of the Interstate Commerce Commission’s (“ICC”) decision to adopt a rule that exempts the officers and directors of certain rail carriers from obtaining prior approval for interlocking directorates under 49 U.S.C. § 11322(a). See Exemption from 49 U.S.C. 11322(a) for Certain Interlocking Directorates, 5 I.C.C.2d 7 (1988). We hold that the petitioner lacks standing,2 and therefore dismiss the petition for review.

I.

In the Staggers Rail Act of 1980,3 Congress gave the ICC broad responsibilities for deregulating the nation’s railroads. One section of that Act, 49 U.S.C. § 10505, directs the ICC to exempt a transaction or class of transactions from regulation when the Commission finds that (1) regulation is not necessary to carry out the 15-factor national rail transportation policy (RTP) ar[910]*910ticulated in 49 U.S.C. § 10101a;4 and (2) either (a) the transaction is of limited scope, or (b) regulation is not needed to protect shippers from the abuse of market power. The legislative history of 49 U.S.C. § 10505 indicates that Congress expected the ICC to use its exemption authority to remove “as many as possible of the Commission’s restrictions on charges in prices and services by rail carriers ... and ... adopt a policy of reviewing carrier actions after the fact to correct abuses of market power.” H.R.Rep. No. 1430, 96th Cong., 2d Sess. 105, reprinted, in 1980 U.S.Code Cong. & Admin.News 3978, 4110, 4137. See also Illinois Commerce Comm’n v. ICC, 848 F.2d 1246, 1249 (D.C.Cir.1988), cert. denied, - U.S. -, 109 S.Ct. 783, 102 L.Ed.2d 775 (1989).

Pursuant to that congressional direction, the ICC published, in April of 1988, a notice of proposed rulemaking that would exempt all interlocking directorates between two railroads — except those involving two “class I” railroads5 — from complying with the requirements of 49 U.S.C. § 11322(a). See Certain Interlocking Directorates; Exemption, 53 Fed.Reg. 12,443 (1988). Section 11322(a), originally enacted as part of the Transportation Act of 1920, ch. 91, § 439, 41 Stat. 496 (1920), prohibits any person from serving as a director or officer of more than one rail carrier unless the ICC has determined that “public or private interests will not be adversely affected.”6 The proposed rule — by replacing the case-by-case approval system with blanket approval — was designed to eliminate the expense and delay accompanying individual applications. Since the ICC had not rejected an application for an interlocking directorate in nearly twenty years and since no decision to approve an application had ever been challenged by any party, the ICC viewed prior approval as unnecessary. After receiving comments on the proposed rule, including those submitted by the petitioner, the Commission adopted the rule. See Exemption from 49 U.S.C. 11322(a) for Certain Interlocking Directorates, 5 I.C.C.2d 7 (1988).

In its accompanying explanation, the Commission explained its determination that the rule satisfied the requirements for granting exemptions set out in 49 U.S.C. § 10505(a). It first asserted that the exemption promoted several of the fifteen factors that comprise the national rail [911]*911transportation' policy, finding that the exemption “minimize[s] the need for federal regulatory control and expedite[s] regulatory decisions [49 U.S.C. § 10101a(2) ]; ensure[s] continuation of a sound rail system [49 U.S.C. § 10101a(4) ]; foster[s] sound economic conditions in transportation [49 U.S.C. § 10101a(5) ]; and encourage[s] honest and efficient management [49 U.S.C. § 10101a(10) ].” 5 I.C.C.2d at 11. The Commission also agreed with the comments that contended that, by enabling new carriers to recruit talented and experienced personnel from existing carriers, the exemption would reduce barriers to entry in the industry in furtherance of 49 U.S.C. § 10101a(7). Finally, it believed that none of the other policy goals listed in 49 U.S.C. § 10101a would be adversely affected by the rule. See id. at 12-13.

The ICC then concluded that the rule satisfied both of the two alternative tests of § 10505(a)(2) — that the exemption is of limited scope and that the prior approval requirements of § 11322(a) are not needed to protect shippers from the abuse of market power. Its scope is “limited” because the exemption will not apply to interlocks between two class I carriers and the substantive provisions of § 11322(b), prohibiting certain actions by interlocking officers and directors, are not affected by the rule. And shippers do not need the protection of § 11322(a), according to the ICC, because the small size of class II and class III railroads and the vigorous competition present in the transportation industry made it “highly unlikely for any linkage to succeed in allowing one carrier to dominate or influence the other carrier contrary to the other rail carrier’s or shipper’s interests.” 5 I.C.C.2d at 12. The Commission noted that “no shippers chose to file comments” opposing the rule, thereby suggesting that they did not fear any abuse of market power from interlocking directorates. See id. at 14.

The petitioner argues that the ICC’s decision is inconsistent with § 10505(a) and that it is arbitrary and capricious. The government challenges petitioner’s standing on both prudential and constitutional grounds. Our colleague — apparently of the view that the standing issue is too difficult to resolve — believes we should pass on to the merits without deciding whether we have the constitutional authority to hear the case. To be sure, this court has on occasion followed that course, although not often in recent times, but we are unaware of any case where a panel was criticized for not employing that technique; in other words, for assuming its constitutional obligation.

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Bluebook (online)
891 F.2d 908, 282 U.S. App. D.C. 38, 1989 U.S. App. LEXIS 17870, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-transportation-union-v-interstate-commerce-commission-and-united-cadc-1989.