Motion to Dismiss or Affirm — Aberdeen & Rockfish R. Co. v. Students Challenging Regulatory Agency Procedures (SCRAP)

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IN THE ‘a

Supreme Court of the United States

OcToBER TERM, 1974

Nos. 73-1966 and 73-1971

UNITED STATES OF AMERICA and [INTERSTATE COMMERCE

CoMMISSION, Appellants

v.

STUDENTS CHALLENGING REGULATORY AGENCY

PROcEDURES (8.C.R.A.P.) et al., Appellees

ABERDEEN AND ROCKFISH RAILROAD COMPANY,

et al., Appellants

. A

STUDENTS CHALLENGING REGULATORY AGENCY

PrRoceDURES (S8.C.R.A.P.) et al., Appellees

On Appeal from the United States District Court for the

District of Columbia

MOTION TO DISMISS OR FOR SUMMARY AFFIRMANCE

BY NATIONAL ASSOCIATION OF RECYCLING IN-

DUSTRIES, INC.. COMMERCIAL METALS CO., LV.

SUTPHIN CO. AND FRANKEL BROTHERS & CO. INC.

Epwarp L. MERRIGAN

Attorney for Appellees National

Association of Recycling Indus-

tries, Inc., Commercial Metals

Co., 1. V. Sutphin Co. & Frankel

Brothers & Co. Ine.

888 17th Street, N. W.

Washington, D. C. 20006

Press or Byron S. Apams Parvrina, Inc., Wasurneron, D. C.

<> >

TABLE OF CONTENTS

Page

Motion To Dismiss or for Summary Affirmance and

SE ccccuedesckevsdsasauwees cess 2

ES Or Ec cicecd vdunieniéeuseesutsesenes 2-11

EES © i.a do cn cducedbebrceddeedcdeosictanseusses 12

I. This Court Lacks Jurisdiction Over Appellants’

Direct Appeals Under 12 U.S.C. $1253 ........ 12-13

II. The District Court’s Judgment Should Be Af-

firmed or The Appeals Dismissed Because The

Issues Presented Are Not Substantial ........ 13-18

SSOP EL LF TNT OE Te 19

TABLE OF CITATIONS

CasEs:

Baltimore & O.R.R. v. U.S., 386 U.S.372 (1967) ...... 13

Calvert Cliffs Coordinating Committee v. Atomic En-

ergy Commission, 146 U.S.App.D.C. 33, 38, 449

pb 8 fe errr 15, 16

City of New York y. United States, 337 F. Supp. 150

Sn BOUND stesdeneneueerseseseces 7,8, 10, 14, 18

Conservation Council of North Carolina v. Froehlke,

4 Cir., 374 F.2d 664, 665 (1973) ...........2000. 15

Environmental Defense Fund, Inc. v. Froehlke, 8 Cir.,

ee ae Ss Se GHSED ccecsccecenecsncccences 15

Greene County Board vy. Federal Power Commission,

455 F.2d 412 (2d Cir.), cert. denied 409 U.S. 849

6, 14, 15, 16, 18

Gunn vy. University Committee To End The War, 399

as Ss Ss OP Oe Ges EE coecensccescsoncseses 12

Harlem Valley Transportation Association v. Stafford,

Chairman, Interstate Commerce Commission, 2d

Cir., June 18, 1974, Docket No. 73-2496 ........ 8, 9, 14

il Table of Contents Continued

Page

Hutcherson v. Lehtin, 399 U.S. 522, 90 S. Ct. 2238

DEE Snsdseneenseenceccedenneseceussiaeesess 13

Public Serviee Commission of Missouri v. Brashear

Freight Lines, Inc., 306 U.S. 204, 59 S. Ct. 480,

Be is eh Ge Cc Ka tnccccccnpeesesescosess 12, 13

Rockefeller v. Catholic Medical Center, 397 U.S. 820,

90 S. Ct. 1517, 25 L. Ed. 2d 806 (1970) ......... 12, 13

S.C.R.A.P. vy. United States, 346 F. Supp. 189,198 .. 8

S.C_R.A.P. v. United States, 371 F. Supp. 1291 (1974) 15

United States vy Allegheny-Ludlum Steel Corp., 406

Se PE CED Saheb cnecdeduceKenderecise sates 13

United States v. S.C.R.A.P., 412 U.S. 669, 93 S. Ct.

2405, 37 L. Ed. 2d 254 (1973) @..........ccccees 14

STATUTES:

National Environmental Poliey Act, 42 U.S.C. § 4321

Se ON. SRS bO 06 bn Onde ds dese daSdeesbavesetescecs 4,5

ie a PY sounhddeeeseucducduseedasnnssdsces 2, 12

Public Law 93-236, Regional Rail Reorganization Act

es SE dé datacdncduddalsasseewsceses 17

IN THE

Supreme Court of the United States

OcToBER TERM, 1974

Nos. 73-1966 and 73-1971

UNITED STATES OF AMERICA and INTERSTATE COMMERCE

ComMMISsSsION, Appellants

V.

STUDENTS CHALLENGING REGULATORY AGENCY

Procepures (8.C.R.A.P.) et al., Appellees

ABERDEEN AND RocKFisH RAILROAD COMPANY,

et al., Appellants

Vv.

STUDENTS CHALLENGING REGULATORY AGENCY

Procepures (8.C.R.A.P.) et al., Appellees

On Appeal from the United States District Court for the

District of Columbia

MOTION TO DISMISS OR FOR SUMMARY AFFIRMANCE

BY NATIONAL ASSOCIATION OF RECYCLING IN-

DUSTRIES, INC.. COMMERCIAL METALS CO. LV.

SUTPHIN CO. AND FRANKEL BROTHERS & Co. INC.

Appellees National Association of Recyeling Indus-

tries, Inc. (NARI), Commercial Metals Co., L.V.

Sutphin Co. and Frankel Brothers & Co. Inc. hereby

2

move, under and pursuant to the provisions of Rule

16 of the Supreme Court Rules—

(1) to dismiss the two appeals filed by appel-

lants herein on the ground that this Court has no

jurisdiction over such direct appeals from a Dis-

trict Court judgment under the provisions of Title

28 U.S.C. § 1253; or in the alternative,

(2) for summary affirmance of the District

Court’s judgment reported at 371 F.Supp. 1291

on the ground it is manifest that the issues now

raised by appellants are not substantial and the

decision and judgment of the District Court are

plainly sound, reasonable and correct.

STATEMENT OF FACTS IN SUPPORT OF THE MOTION

Appellee NARI is the trade association for the non-

ferrous metals, waste paper, textile, plastics and rubber

recycling industries. Its membership consists of ap-

proximately 700 firms located throughout the United

States which collect, process and utilize for manufac-

turing purposes the aforementioned recyclable mate-

rials. Appellees Commercial Metals Co. of Dallas,

Texas, L.V. Sutphin Co. of Cincinnati, Ohio, and

Frankel Brothers & Co., Inc. of Rochester, New York,

are, in turn, members of NARI and each is engaged

in the recycling of solid waste materials and recovery

of useful resources from discarded solid wastes which

otherwise would have to be burned, buried or sim-

ilarly disposed at public expense, with obvious adverse

effects upon the environment.

Over the vears since 1968, NARI, numerous other

private recycling and environmental organizations, and

various agencies of the Federal Government (inelud-

3

ing the President’s Council on Environmental Quality,

the Environmental Protection Agency, the Depart-

ments of Commerce and Liuterior and the General Serv-

ices Administration) have repeatedly petitioned the

Interstate Commerce Commission not to license or ap-

prove any further across-the-board annual percentage

increases in railroad freight rates for the transporta-

tion of recyclable materials until the Commission first

takes effective action to correct the grossly diserim-

inatory, unreasonable base rates charged by the rail-

roads for such transportation, which rates have his-

torically impeded and stifled the marketing of re-

eyelable commodities and artificially stimulated the

utilization and depletion of competing, searece virgin

natural resources, again with serious adverse effects

on the environment.

The Commission and the railroads have been com-

pletely impervious to these pleas. The railroads have

continued to seek and the Commission has approved,

without first investigating the unlawful nature of the

base rate structure, the following annual percentage

inereases in rates charged for the transportation of

recyclable commodities:

Inerease In Inerease In

Waste Paper Non-Ferrous Metal

ICC Case No. Year Rates _ Serap Rates

Ex Parte 256 1967 3% 3%

Ex Parte 259 1968 5% 5%

Ex Parte 262 1969 % %

Ex Parte 265 1970 6% 6%

Ex Parte 267 1971 11% 11%

Ex Parte 281 1972) 2.5% surcharge plus 2.5% surcharge plus

3% %

The evidence developed in this case, however, now

demonstrates clearly that, as repeatedly asserted by

4

NARI and the others mentioned above, these constant

annual rate increases have been extremely damaging

to the pre-existing discriminatory rate structure in

that they have operate? substantially to broaden the

net disparity in rates which already existed between

those charged by the railroads for the transportation

of reeyclable commodities and those simultaneously

charged for the transportation of competing virgin

materials. That evidence, obtained from the Interstate

Commerce Commission itself, shows: *

(1) That during the period from 1959 through

1971, the net disparity in average rates charged

for the transportation of competing wood pulp and

waste paper grew from 13.9¢ per hundred pounds

to 18.6¢ per hundred pounds, the actual average

rates charged per hundredweight being as follows:

Year W oodpulp Waste Paper

1959 17.4¢ 31.3¢

1971 24.4¢ 43.0¢

(2) That during the same period (1959-1971),

the net disparity in average rates charged for the

transportation of competing non-ferrous metal

virgin ores and concentrates and non-ferrous metal

scrap grew from 13.3¢ per hundred pounds to

17.7¢, the actual rates per hundredweight being as

follows:

Year Virgin Ores Scrap Metal

1959 D1.7¢ 65.1¢

1971 TO.3¢ 88.0¢

In 1966, while the railroads and the Commission were

proceeding in the manner just described, Congress

passed the National Environmental Poliey Act (42

' See Commission's Environmental Impact Statement, Ex Parte

281, pes. 84, 85.

5

U.S.C. § 4321 et seq.). That statute states, at 42 U.S.C.

§ 4331(b) :

‘**(b) In order to earry out the policy set forth

in this chapter, it is the continuing responsibility

of the Federal Government to use all practicable

means, consistent with other essential considera-

tions of national policy, to improve and coordinate

Federal plans, functions, programs, and resources

to the end that the Nation may—....

(6) enhance the quality of renewable re-

sources and approach the maximum attainable

recycling of depletable resources.’’ (Emphasis

supplied. )

Section 102 of NEPA (42 U.S.C. § 4332) thereupon

provides:

‘The Congress authorizes and directs that, to

the fullest extent possible:

‘*(1) the policies, regulations, and public laws

of the United States shall be interpreted and

administered in accordance with the policies set

forth in this chapter, and

(2) all agencies of the Federal Government

shall—...

**(C) inelude in every recommendation or

report on... major Federal actions signifi-

eantly affecting the quality of the human en-

vironment, a detailed statement by the respon-

sible official on—

(i) the environmental impact of the pro-

posed action,

(ii) any adverse environmental effects

whick cannot be avoided should the proposal

be implemented,

(iii) alternatives to the proposed action,

6

(iv) the relationship between local short-

term uses of man’s environment and the

maintenance and enhancement of long-term

productivity, and

(v) any irreversible and _ irretrievable

commitments of resources which would be

involved in the proposed action should it be

implemented.

‘*Prior to making any detailed statement, the

respousible Federal official shall consult with and

obtain the comments of any Federal agency which

has jurisdiction by law or special expertise with

respect to the environmental impact involved.

Copies of such statement and the comments and

views of the appropriate Federal, State, and local

agencies, which are authorized to develop and en-

foree environmental standards, shall be made avail-

able to the President, the Council on Environ-

mental Quality and to the public... and shall ae-

company the proposal through the existing agency

review processes. ”’

Shortly after NEPA became effective, therefore,

parties appearing before the Commission in important

railroad cases contended that the Commission could

no longer completely ignore relevant environmental

considerations in its decision-making process, and that

henceforth its major actions necessarily had to be sup-

ported by Environmental Impact Statements prepared

as directed by NEPA. The Commission, however, ex-

hibited almost complete disdain for the new federal

statute, and as early as 1971, it sought to intervene in

Greene County Board vy. Federal Power Commission,

C.C.A, 2, 1971, 455 F.2d 412, cert. denied 409 U.S, 849—

a case wherein the Federal Power Commission was

seeking to avoid regulatory agency compliance with

NEPA. ICC’s intervention was rejected, however; the

7

Second Cireuit ruled against FPC’s position, and this

Court denied certiorari.

In City of New York v. United States, 337 F. Supp.

150 (D.C., N.Y. 1972), a case involving proceedings

before the Interstate Commerce Commission itself, the

Commission directly defied NEPA and endeavored to

license the abandonmeut of railroad facilities without

the preparation of a supporting Environmental Impact

Statement. A Three-Judge Court in New York criti-

cized the Commission for its ‘‘slow reaction”’’ to the

directives of NEPA and stated that the Commission

was powerless to “disregard ... the law’’ (337 F. Supp.

158-160). The Court remanded the case to the Com-

mission, stating, at 337 F. Supp. 160:

‘To permit an agency to ignore its duties under

NEPA with impunity because we have serious

doubts that its ultimate decision will be affected

by compliance would subvert the very purpose of

the Act and encourage further administrative

laxity in this area.... In any event, preservation

of the integrity of NEPA necessitates that the

Commission be required to follow the steps set

forth in § 102, even if it seems likely that those

steps will lead it to adhere to the present result.

Thus, this proceeding must be remanded to the

Commission for it to bring itself into compliance

with the law.”’

Albeit the District Court’s decision in City of New

York, supra, was rendered on January 20, 1972, the

Commission nevertheless proceeded 12 days later (on

February 1, 1972) in the case at bar (Ex Parte No. 281,

Increased Freight Rates, 1972) to license another in-

crease in rates for the transportation of recyclables

without preparing any Environmental Impact State-

ment under NEPA. The Commission instead relied

8

on the same type of terse, unsupported conclusion it

made in City of New York, supra, to wit, that, in the

Commission’s opinion, the challenged rate increase

“would have no significant adverse effect... on the

quality of the human environment within the meaning

of NEPA” (See 341 LC.C. 288, 314). On April 24,

1972, that rate increase was extended in duration, again

without any effort on the part of the Commission to

comply with NEPA.

The Commission’s continued defiance of the law in

Ex Parte 281 thus led to the commencement of this

action by the original plaintiffs S.C.R.A.P. Faced

with this litigation, the Commission suddenly promised

both the District Court and the Chief Justice of this

Court that it intended to comply with all of the re-

quirements of NEPA before it issued its final report

in Ex Parte 281 with reference to the allowance of

permanent rate increases for 1972 (See S.C.R.A.P. v.

United States, 346 F.Supp. 189, 198). Thereafter,

however, the Commission flatly ignored those promises,

ind when it rendered its final report on October 4, 1972,

it supplied no supporting Impact Statement under

NEPA. Once again, it retreated to its old rejected,

unsustainable City of New York position by stating

(341 L.C.C, 288, 314):

“Inasmuch as we conclude that our actions

herein will neither actually nor potentially sig-

nificantly affect the quality of the human environ-

ment, we have not included in our Report an ex-

tensive formal impact statement.’’

In the meantime, in still another case simultaneously

pending in the United States District Court for the

Southern District of New York (Harlem Valley Trans-

9

portation Association y. Stafford, Chairman, Inter-

state Commerce Commission), the Commission was

contending, this time directly contrary to the position

taken by the Department of Justice in the same case,

that it had no obligation to prepare any Impact State.

ments under NEPA until it reached its final decisions

in cases, i.e., the Commission had no duty under NEPA

to prepare draft Impact Statements at earlier stages

of Commission proceedings. That contention was

bluntly rejected by the District Court on June 21, 1973,

and its decision was affirmed by the Court of Appeals

for the Second Circuit on June 18, 1974 (See Harlem

Valley Transportation Association, et al. v. Stafford,

Chairman, Interstate Commerce Commission, C.C.A.

2, Docket No. 73-2496, decision rendered 6/18/74). In

its opinion, the Second Circuit stated:

‘* .. (W)hile we recognize there are limits to

what may reasonably be expected from agency

compliance with NEPA, we cannot excuse...

noncompliance with NEPA such as the ICC here

seeks to justify.”

In the case at bar, when the Commission once again

failed to support its Final Report in Ex Parte 281 with

any Environmental Impact Statement under NEPA,

protesting petitions were filed with the Commission by

the Council on Environmental Quality, the Environ-

mental Protection Agency, appellees NARI et al.

and others (See 353 F. Supp. 320, 321). Plaintiffs

S.C.R.A.P. went further and filed a motion for injunc-

tive relief with the District Court in this action. At

that point, the Commission suspended its Final Report

and Order of October 4, 1972 in Ex Parte 281 as they

applied to recyclable commodities until it could further

evaluate the situation under NEPA.

10

It was therefore with this background of arbitrary,

capricious resistance and opposition to all of the basic

requirements of NEPA coupled with its deaf refusal

to respond in any way to the persistent pleas it had re-

peatedly received over the years not to license any

further increases in rates for the transportation of re-

eyclable commodities until it first eliminated the basic

rate discriminations involved, that the Commission be-

latedly set out to prepare an Environmental Impact

Statement which might somehow be construed as suf-

ficient to support the groundless conclusions it had

already reached and expressed in its suspended Final

Report in Ex Parte 281.

Appellee NARI, cognizant of that background and

fearful of the Commission’s true motives, promptly

asked the Commission whether it intended to hold a

hearing on the environmental aspects of this case be-

fore it issued any further statements in this matter

under NEPA. In this regard, in City of New York v.

United States, supra, when the Commission was

ordered by a District Court to comply with NEPA, the

Commission, upon remand, immediately scheduled a

hearing at which ‘‘ All parties were given full oppor-

tunity to present expert evidence on the environmental

aspects of the case’ (See 344 F.Supp. 929, 938). But

here, the Commission summarily rejected NARI’s

request for a hearing, stating the Commission intended

to proceed entirely ex parte.

It was thus hardly surprising that soon thereafter,

on March 5, 1973, the Commission issued a draft

Environmental Impact Statement in this case which

both the Council on Environmental Quality and the

Environmental Protection Agency and others labeled

totally ‘‘inadequate”’ and otherwise violative of NEPA.

11

The Commission, plainly accustomed to such low grades

under NEPA, nevertheless issued the said Impact

Statement in final form on May 2, 1973, over the

vigorous dissent of two of its own Commissioners and

the abstention of a third.

The Commission thereupon reinstated its original

Final Report in Ex Parte 281 and licensed still an-

other 3% permanent increase in freight rates for re-

cyclable commodities. This sixth successive increase

since 1968 imposed another $9,600,000 a year in un-

lawful, grossly discriminatory freight rates upon the

recycling industry, without any effort on the part of

the Commission to investigate and correct the diserimi-

natory nature of the aggravated base rate structure.

Appellees promptly filed motions for summary

judgment and appropriate injunctive relief in the Dis-

trict Court. On February 19, 1974, the Three-Judge

Court ruled that “‘the Commission’s efforts to meet the

commands of NEPA were substantially deficient.’ The

case was thus remanded to the Commission ‘‘for ful-

fillment of its NEPA obligations” (371 F. Supp. 1291).

The District Court, however, refused to grant any

injunctive relief, stating:

‘*However, because of our uncertainty concern-

ing the meaning of the Supreme Court’s decision

last term in Atchison, Topeka & Santa Fe R. Co.

v. Wichita Board of Trade, 412 U.S. 800, 93 S. Ct.

2367, 37 L. Ed. 2d 350 (1973), we refrain from

issuing an injunction restraining the railroads

from collecting the increased rates pending the

Commission’s reconsideration.’’

ARGUMENT

4

This Court Lacks Jurisdiction Over Appellants’ Direct Appeals

Under 12 U.S.C. § 1253

Both Government appellants and railroad appellants

rely exclusively on 28 U.S.C. § 1253 to support their

direct appeals to this Court from the District Court’s

judgment of February 19, 1974.° But 28 U.S.C. § 1253

allows direct appeals to this Court only from judg-

ments “‘granting or denying ... an interlocutory or

permanent injunction.”

These two appeals, however, are not appeals **from

an order granting or denying ...an... injunction.”

While the District Court did deny an injunction which

had been sought by appellees (371 F. Supp. 1307-10),

appellees have not perfected appeals from that denial.

Appellants, on the other hand, having clearly pre-

vailed on the injunction issue below so that the rail-

roads are still collecting the new rate increase of

#£9,600,000 a year authorized by the Commission, have

no standing to appeal from that massive victory

(Publie Service Commission of Missouri v. Brashear

Freight Lines, Inc., 306 U.S. 204, 59 8. Ct. 480, 83 L.Ed.

608 (1939); Gunn v. University Committee To End

The War, 399 U.S. 383, 391, 90 S.Ct. 2013 (1970);

Rockefeller v. Catholic Medical Center, 397 U.S. 820,

90 S.Ct. 1517, 25 L.Ed.2d 806 (1970). Indeed, the

District Court expressly ruled at 371 F.Supp. 1291,

1293:

‘*) .. (Wie refrain from issuing an injunction

restraining the railroads from collecting the in-

2 Government’s Jurisdictional Statement, p. 2; Railroads’ Juris-

dictional Statement, p. 2.

13

creased rates pending the Commission’s recon-

sideration.’’

Patently therefore both direct appeals to this Court

must be dismissed for lack of jurisdiction under 28

U.S.C. § 1253 ( Public Service Commission v. Brashear,

supra; Hutcherson v. Lehtin, 399 U.S. 522, 90 S.Ct.

2238 (1970); Rockefeller v. Catholic Medical Center,

supra).

The two cases upon which appellants rely to support

their jurisdictional claims are plainly inapposite be-

cause both involved appeals from orders “‘ granting or

denying ...an...injunction.’? Daltimore & O.R.R.

v. ULWS., 386 U.S. 372 (1967) involved an appeal by

losing parties who had sought an injunction which was

denied by the court below. United States v. Alleghcny-

Ludlum Steel Corp., 406 U.S. 742 (1972), in turn, in-

volved two cases, one in which an appealing party

requested injunctive relief that was denied, and the

other in which the Interstate Commerce Commission

had opposed an injunction that was granted by the

District Court.

II.

The District Court’s Judgment Should Be Affirmed or the

Appeals Should Be Dismissed Because the Issues Presented

for Review Are Not Substantial.

In addition to the fatal jurisdictional barrier dis-

eussed hereinabove, the instant motion should be

granted because the two appeals do not present sub-

stantial questions for review by this Court.

Essentially, the only real question again presented

by appeallants is whether the Interstate Commerce

Commission, like all other federal agencies, is subject

to the National Environmental Policy Act, 42 U.S.C.

14

4321 et seq., so that it must follow the procedures pre-

scribed by that federal statute and thus fairly develop

and prepare environmental impact statements to sup-

port its major federal actions.

Clearly, this same basic question, raised time after

time in the past, has already been firmly resolved

against appellants by the decisions in Greene County

Board vy. Federal Power Commission, 455 F.2d 412

(2d Cir.), cert. denied 409 U.S. 849; City of New York

v. United States, 337 F.Supp. 150 (S8.D.N.Y., 1972) ;

and Harlem Valley Transportation Association v.

Stafford, Chairman, Interstate Commerce Commission,

2d Cir., June 18, 1974, Docket No. 73-2496).

The correctness of these recent decisions is not sub-

ject to doubt. As this Court recognized in United

States v. S.C.R.A.P., 412 U.S. 669, 93 S.Ct. 2405, 37

L.Ed.2d 254 (1973), the *‘policies and goals set forth

in [NEPA] are supplementary to those set forth in

existing authorizations of Federal agencies’’ (See 93

S.Ct. 2419; 42 U.S.C. §43835); and Congress spe-

cifically directed all federal agencies, with no exemp-

tion of the Interstate Commerce Commission, to take

all actions necessary to conform their existing au-

thority and administrative procedures to the require-

ments of NEPA (See 42 U.S.C. § 4333). Thus, this

Court readily assumed in S.C.R.A.P. that “‘there is

general judicial power to determine if an agency has

complied with NEPA, and to grant equitable relief if

it has not’’ (See 93 S.Ct. 2420).

And, of course, this is precisely what the District

Court has now done in the case at bar. It exercised its

‘general judicial power to determine if the [ICC]

has complied with NEPA,”’ and when it found that the

15

Commission had not correctly complied, is simply re-

manded the case to the Commission for further pro-

ceedings consistent with the requirements of NEPA

(See S.C.R.A.P. vy. United States, 371 F. Supp. 1291

(1974) ).

In line with the holding in Calvert Cliffs Coordinat-

ing Committee v. Atomic Energy Commission, 146 U.S.

App. D.C. 33, 38, 449 F.2d 1109, 1114 (1971), the

District Court ruled that NEPA ‘sets a high stand-

ard for the agencies, a standard which must be vigor-

ously enforced by the reviewing courts.’’ It also held,

consistent with Greene County Board and Calvert

Cliffs, supra, that the ICC, like other federal agencies,

must meet the procedural requirements of NEPA

‘*fully and in good faith,’’ and its environmental impact

statement cannot be prepared in an arbitrary, capri-

cious manner, and it cannot be sustained if it patently

gives insufficient weight and attention to environmental

values (See 146 U.S.App.D.C. at 39, 449 F.2d at 1115).

The District Court carefully restricted its review of

the Commission’s impact statement to matters of pro-

cedure under NEPA and it expressly avoided ‘‘any

substantive review,’’ albeit federal courts in other cir-

cuits previously extended their review of NEPA impact

statements to matters of substance (See Conservation

Council of North Carolina v. Froehlke, 4 Cir., 473

F.2d 664, 665 (1973); Environmental Defense Fund

Inc. v. Froehlke, 8 Cir., 473 F.2d 346, 353 (1972) ).

In essence, therefore, the District Court found that

in this ease the Commission, which initially doggedly

refused to comply with NEPA at all, was now guilty of

mere pro forma compliance (See App. A, Govt’s J.S.,

pg. 28a); that, contrary to Greene County Board and

16

Calvert Cliffs, supra, the Commission’s impact state-

ment is ‘‘deficient’’; it does not contain ‘‘individualized

good faith consideration and balancing of environ-

mental factors’’; it is combative, defensive and advoca-

tory’’; and does not respond in any respect to sugges-

tions and recommendations made in good faith by other

federal agencies (See App. A, Govt’s J.S., pgs. 28a-

39a).

Moreover, the District Court found that the Commis-

sion arbitrarily and ecapriciously failed to give any

consideration whatsoever to the discriminatory, debi-

litating underlying rate structure before it prepared

and finally adopted its pro forma impact statement

under NEPA. In this connection, the District Court

stated (See App. A, Govt’s J.S., pgs. 34a-39a) :

‘It is the underlying rate structure which the

percentage increases aggravate; if this structure

contributes to the degradation of our environment,

then the increases would at least presumptively

aggravate that contribution. ... The Commission’s

failure to hold down the rate increases on recyel-

ables would thus have a cumulative impact on the

environment. Such cumulative impacts must be

considered in NEPA statements. ...

‘The necessity for the Commission to consider

the environmental impact of the underlying rate

structure before approving rate increases on re-

cyclable commodities is further underscored by the

recent enactment of Public Law 93-236, 93rd Con-

gress, the Regional Rail Reorganization Act of

1973. Section 603 of the Act requires the Commis-

sion to ‘adopt appropriate rules’ to ‘eliminate dis-

crimination against the shipment of reeyelable

materials in rate structures ... where such diseri-

mination exists.’ This provision is a legislative

recognition of discrimination against reeyelables in

the existing railroad rate structure and a legis-

17

lative direction to the Commission to eliminate it.

The responsibility imposed by NEPA upon the

commission to ‘approach the maximum attainable

recycling of depletable resources,’ 42 U.S.C. §

4331(b) (6), surely cannot be fulfilled unless this

provision is complied with before rate increases om

recyclable commodities are approved.”’

Thus, the District Court acted properly and correctly

when it rejected the Commission’s pro forma, arbi-

trary, incomplete environmental impact statement, and

when it simply remanded this case to the Commission

for further administrative proceedings consistent with

the requirements of NEPA and Section 603 of Public

Law 93-236, referred to in the last mentioned excerpt

from the District Court’s opinion.

Plainly, therefore, there is absolutely no substance

to the railroads’ contention that the *‘lower court had

no authority to act in this case.’’ There is nothing

whatever in the Interstate Commerce Act or any other

statute which prevents judicial review of a federal

agency’s compliance or non-compliance with NEPA.

Indeed, as stated above, this Court indicated in United

States v. S.C.R.A.P., supra, that ‘‘there is general judi-

cial power to determine if an agency has complied with

NEPA, and to grant equitable relief if it has not”

(See 93 S.Ct. 2420).

Nor is there any validity to the Government’s hollow

contention that the District Court’s decision somehow

‘‘denies the railroads the benefit of timely general

revenue orders.’’ In the case at bar, the District Court

denied injunctive relief and expressly allowed the rail-

roads to go ahead with the collection of the challenged

rate increases while the Commission reconsiders the

case under NEPA, If the Commission now comes to

grips in this case with the discriminatory nature of the

18

underlying base rate structure, there will be no delays

in future cases because all of the relevant facts will have

been developed here, for use by the Commission and

the parties, in this case and in all future rate proceed-

ings. Thus, in the final analysis, the District Court’s

order to the Commission in this case will actually

resolve that issue once and for all, and will thus result

in substantial time savings in future rate increase

proceedings.

Finally, the Government’s hearing contentions are

completely specious. In City of New York, supra, the

Interstate Commerce Commission, on its own motion,

expeditiously held a full hearing to develop the facts

it and the parties there involved deemed necessary

for inclusion in a NEPA statement after the Commis-

sion was firmly ordered by the court in that case

to comply with NEPA. Also, the Commission reg-

wlarly holds hearings in rate inerease proceedings

under Section 15(7) of the Interstate Commerce Aet,

so there is nothing strange or unusual about the Dis-

trict Court’s hearing directive to the Commission in

the instant Section 15(7) ease. Finally, this Court

denied certiorari in Green County Board, supra, where

the Second Cireuit ruled, at 455 F.2d 422, just as the

District Court has now done in the case at bar:

**... [W]e conelude that the Commission was in

violation of NEPA by conducting hearings prior to

the preparation by its staff of its own impact state-

ment...

‘* .. [T]he [impact] statement may well go to

waste unless it is subject to the full scrutiny of the

hearing process ....

9°

19

CONCLUSION

The motion to dismiss or affirm should be granted.

Respectfully submitted :

Epwarp L. MERRIGAN

Attorney for Appellees

National Association of

Recycling Industries, Inc.,

Commercial Metals Co., I. V.

Sut phin Co. & Frankel

Brothers & Co. Ine.

888 17th Street, N.W.

Washington, D.C. 20006