Appellees Reply Brief — Aberdeen & Rockfish R. Co. v. Students Challenging Regulatory Agency Procedures (SCRAP)

IN THE

Supreme Court of the United States

OcTOoBER TERM, 1974

Nos. 73-1966 and 73-1971

Unirep STaTes OF AMERICA AND INTERSTATE

CoMMERCE ComMMuIssION, Appellants

Vv.

SrupENTS CHALLENGING ReauLaTorY AGENCY

Procepures (S8.C.R.A.P.) Et aL, Appellees

ARERDEEN AND RockrisH RarroaD CoMPANY,

ET AL, Appellants

v.

SrupENTS CHALLENGING ReGguLaToRY AGENCY

Procepures (8.C.R.A.P.) er aL, Appellees

On Appeal from the United States District Court

for the District of Columbia

OPPOSITION OF APPELLEES NATIONAL ASSOCIATION

OF RECYCLING INDUSTRIES, INC. (NARI), COMMER-

CIAL METALS CO., L. V. SUTPHIN CO. AND FRANKEL

BROS. & CO. INC. TO “SUGGESTION OF MOOTNESS”

FILED BY COUNSEL FOR EDF ET AL.

Epwarp L. MERRIGAN

Attorney for Appellees

NARI et al.

888 17th Street, N.W.

Washington, D. C. 20006

April 1975

eS

Pures or Brrow S. Apams Provrinc, Inc, Wasmwcron, D. C

TABLE OF CONTENTS

Page

I. This Case, Which Raises Important Threshold

Jurisdictional Issues And Issues of Great Con-

tinuing Interest Under The National Environ-

mental Policy Act And Other Related Federal

Statutes, Is In No Sense Moot ............... 2

Il. It is Absolutely Erroneous And Improper For

EDF To Suggest, Without Any Support In The

Record Before The Court, That The Very

Limited Reeent Actions Taken By The Commis-

sion In Ex Parte 310 Have ‘‘ Radically Changed

... The Relationship Between Rates For Scrap

And Primary Materials.”’ .........cccsecceees 8

Cee: kc dvketineséanenseeaedssts cee 10

TABLE OF CITATIONS

CASES:

Eagles v. United States, 329 U.S. 304, 67 S.Ct. 313

CRED cvcevepccccevasuccéesateoencwnceuneusebes 2

Federal Trade Commission v. Goodyear Tire € Rubber

Co., 304 U.S. 257, 58 S.Ct. 863 (1938) ........... 2

Gunn v, University Committee To End The War, 399

U.S. 383, 391, 90 S.Ct. 2013 (1970) ........ cece. 5

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

SEED + ncNend Oeenue ed Guba badeedn bhewaiies 5

Mitchell vy. Donovan, 398 U.S. 427, 90 S.Ct. 1763, 26

SAD GO COD voc viewne baeeebeseesoetetiasss §

Public Service Commission of Missouri v. Brashear

Freight Lines, Inc., 306 U.S. 205, 59 S.Ct. 480, 83

Rates Gee GHD 0:6.-8:0003hb60k0600 00bb050000nss 4,5

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

90 S.Ct. 1517, 25 L.Ed.2d 806 (1970) ............ 5

Southern Pacific Terminal Company v. Interstate Com-

merce Commission, 219 U.S, 498 (1911) .......... 2,8

United States v. Trans-Missouri Freight Association,

ee WES MR UD 06 b.he cs se iscacsdececciaseuen 2

IN THE

Supreme Court of the United States

OcToBER TERM, 1974

Nos. 73-1966 and 73-1971

Unitep States OF AMERICA AND INTERSTATE

CoMMERCE COMMISSION, Appellants

Vv.

StrupDENTS CHALLENGING REGULATORY AGENCY

Procepures (S8.C.R.A.P.) Et aL, Appellees

ABERDEEN AND RockrisH Rar~rRoaD CoMPANY,

ET AL, Appellants

Vv.

StrupDENTS 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

OPPOSITION OF APPELLEES NATIONAL ASSOCIATION

OF RECYCLING INDUSTRIES, INC. (NARI), COMMER-

CIAL METALS Co., I. V. SUTPHIN CO. AND FRANKEL

2ROS. & CO. INC. TO “SUGGESTION OF MOOTNESS”

FILED BY COUNSEL FOR EDF ET AL.

Appellees NARI, Commercial Metals Co. of Dallas,

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

Frankel Bros. & Co., Ine. of Rochester, New York

hereby oppose the ‘‘Suggestion of Mootness”’ filed here-

in on April 8, 1975, approximately two weeks after oral

Bis

a

2

argument and submission of these appeals, by counsel

for the Environmental Defense Fund (EDF), and in

support of this opposition, these appellees respectfully

state.

I.

THIS CASE, WHICH RAISES IMPORTANT THRESHOLD

JURISDICTIONAL ISSUES AND ISSUES OF GREAT

CONTINUING INTEREST UNDER THE NATIONAL

ENVIRONMENTAL POLICY ACT AND OTHER RE-

LATED FEDERAL STATUTES IS IN NO SENSE MOOT.

In Southern Pacific Terminal Company v. Interstate

Commerce Commission, 219 U.S. 498 (1911), this Court

ruled that even in a case where a challenged order of the

Interstate Commerce Commission has actually expired,

a pending litigation challenging the legality of that

order, as rendered by the Commission, is not moot. At

page 515, this Court stated :

‘**In the case at bar the order of the Commission

may to some ertent (the exact extent it is unneces-

sary to define) be the basis of further proceedings.

But there is a broader consideration. The ques-

tions involved in the orders of the Interstate Com-

meree Commission are usually continuing (as are

manifestly those in the case at bar) and their con-

sideration ought not to be, as they might be, de-

feated by short term orders, capable of repetition,

yet evading review, and at one time the Govern-

ment and at another time the carriers have their

rights determined by the Commission without a

chance of redress.”’

See also: United States v. Trans-Missouri Freight

Association, 166 U.S. 290, 308; Federal Trade Commis-

sion V. Goodyear Tire & Rubber Co., 304 U.S. 257, 58

S.Ct. 863 (1938) ; Eagles v. United States, 329 U.S. 304,

67 S.Ct. 313 (1946).

3

In the instant case, the challenged orders of the Inter-

state Commerce Commission are plainly continuing

orders; they have in no manner erpired. And, under

the judgment of the district court, they will be the sub-

ject of further proceedings upon remand to the Com-

mission, if this Court affirms or dismisses the pending

appeals for lack of direct appellate jurisdiction; or if

this Court fashions a final judgment of its own which

remands the case to the Comission for further pro-

ceedings.

Insofar as shippers of recyclable commodities repre-

sented by NARI herein are concerned, the continuing,

oppressive nature of the challenged orders is clear.

Since the summer of 1973, they have been bearing the

entire force of the Ex Parte No. 281 rate increase for

the transportation of recyclable commodities licensed

by the Commission’s orders, challenged herein as pat-

ently illegal under the National Environmental Policy

Act (NEPA) and related federal statutes.’ Those in-

creased rates have forced these shippers to pay an

additional $9 million per year in transportation

charges, and those huge additional charges will con-

tinue to be collected each year in the future unless this

Court rules that the Commission’s orders were viola-

tive of NEPA and that same cannot form a lawful basis

for continuing collection.

How, therefore, can anyone seriously contend that a

case of this nature is moot? The pending ‘‘Suggestion

of Mootness’’ does not even attempt to consider the last

mentioned facts. Instead, it simply asserts, in the

*The Solid Waste Disposal Act, 42 U.S.C. § 3251 et seq., as

amended by The Resource Recovery Act, 42 U.S.C. §3253a. The

Rail Reorganization Act of 1973, Public Law 93-236, Section 603.

[ rm

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q

vaguest possible manner, that something the Assistant

Solicitor General said, or may have intended to say,

during oral argument before this Court on Mareh 26,

1975 somehow raises a new question regarding the type

of evidence to be considered by the Commission in the

event this case is ultimately remanded to the Commis-

sion for reconsideration. We respectfully suggest that,

et best, what the Assistant Solicitor General said, or

may have meant to say in that regard, during argu-

ment, in no sense renders this entire litigation moot. On

the contrary, as now discussed by counsel for EDF in

his pending ‘‘Suggestion’’, the Assistant Solicitor Gen-

-eral’s remarks merely seem to add possibly another new

question to be considered and resolved by this Court—

i.e., in the event this case is remanded to the Commis-

sion for further proecedings as directed by the District

Court, what type of evidence should the Commission

consider and with reference to what time frame.

But patently, one thing is crystal clear. Nothing the

Assistant Solicitor General said and nothing he may

have meant to imply, expunged the challenged orders

of the Commission in this case or cancelled the chal-

lenged rate increase licensed by the Commission, pursu-

ant to which the recyeling industry represented by

appellee NARI herein is being compelled, and will con-

tinue to be compelled to pay $9 million a year in addi-

tional, unlawful freight rates.

Moreover, the Court will surely recall that the two

direct appeals in this case raise scrious questions re-

garding this Court’s jurisdiction to hear and determine

at this time the other important questions raised ‘“‘on

the merits’’ under the National Environmental Policy

Act (NEPA) and the other related federal statutes

mentioned above. (Public Service Commission of Mis-

=——

h

5

souri V. Brashear Freight Lines, Inc., 306 U.S. 204, 59

S.Ct. 480, 88 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) ).

Vhere is absolutely nothing in the pending ‘‘Sugges-

tion’’ which even contends that this basic threshold

jurisdictional issue has been rendered moot in any re-

spect.

Indeed, if this Court rules it lacks jurisdiction to

entertain these two direct appeals, especially in light

of the provisions of Publie Law 93-584 which recently

became effective, then seemingly this Court should not

even address the pending ‘‘Suggestion of Mootness’’

which plainly is directed, at best, to the ‘‘merits’’ of

the two pending appeals. In this connection, when

EDF's view of this ease was apparently in better focus,

EDF stated in its brief, at page 29:

**But appellants ... are not properly before this

Court under 28 U.S.C. § 1253.”

Thus, as a matter of law, this Court must still deter-

mine whether the two direct appeals in this case should

be completely dismissed for lack of jurisdietion under

28 U.S.C. § 1253 (Public Service Commission v. Bras-

hear, supra; Hatcherson v. Lehtin, 399 U.S, 522, 90

S.Ct. 2238 (1969) ; Mitchell v. Donovan, 398 U.S. 427,

90 8.Ct. 1763, 26 L.Ed.2d 378 (1970) ) ; or whether, as

a matter of judicial discretion, they should be routed,

via the district court, back to the United States Court

of Appeals for the District of Columbia Circuit, where

plainly they should have been filed originally, and where

today all such appeals must be filed under Public Law

93-584.

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6

Furthermore, the Court will also certainly reeall that

the railroads have repeatedly argued in this ease that

the district court, in turn, lacked jurisdiction to review

the Commission's genera! revenue orders in Ex Parte

No. 281 (Railroad's brief, pg. 21 et seq.) ; that appel-

lees have simultaneously, unanimously taken an abso-

lutely contrary position and they contend that the dis-

trict court did possess jurisdiction to review the Com-

mission’s record of compliance or non-compliance with

the Natioual Environmental Policy Act (EDF brief,

pg. 31 et seq.; NARI brief, pg. 24 et seq.; ISIS brief,

pg. 10 et seq.) ; while the Government has advised the

Court, both in its briefs and during oral argument, that,

in its judgment, the district court was correct to enter-

tain this case for review under NEPA (Government’s

reply brief, pgs. 3, 4). Again, there is nothing in the

pending ‘‘Suggestion’’ which renders this issue moot.

In faet, it would be rather astounding if counsel for

EDF should suddenly espouse any such position in

light of the following statement in his earlier brief

herein (at page 33):

“This foreclosure of review [asserted by the

railroads} would preclude environmental groups

such as SCRAP and EDF et al. from litigating the

issue which has practical consequences for them,

their members and the environment, namely, the

asserted cumulative environmental impact of a per-

centage rate increase which includes rates on re-

eyclables,”’

Finally, of course, this case involves other extremely

important questions ‘‘on the merits’’ under the Na-

tional Environmental Policy Act (42 U.S.C. § 4321

et seq.) and the other related federal statutes men-

tioned above, which by no stretch of the imagination

7

are presently moot. Essentially, these questions are

as follows:

(i) Whether the Interstate Commerce Com-

mission, which has an established record of ada-

mantly refusing to comply with the plain require-

ments of Section 102(2)(C) of the National

Environmental Poliey Act (NEPA), 42 U.S.C.

§ 4332(2)(C), may lawfully ignore those statu-

tory directives by arbitrarily failing and refusing

to prepare any acceptable or sustainable Environ-

mental Impact Statement prior to the rendition

of its final decision and order in a nationwide

freight rate increase proceeding, wherein it ex-

pressly approved another across-the-board, un-

reasonable, discriminatory, pyramidie increase in

transportation rates for recyclable wastepaper,

textiles and scrap metal (NARI Brief, pg. 3).

(ii) Whether the Interstate Commerce Com-

mission may lawfully defeat and circumvent the

plain requirements of Section 102(2)(C) of

NEPA by waiting until several months after it

has already rendered a final decision and order

in a nationwide freight rate increase proceeding,

wherein it expressly approved another across-the-

hoard inerease in transportation rates for re-

cyclablg commodities, to prepare for the first time,

a post-mortem Environmental Impact Statement,

the sole purpose of which was to rationalize, nunc

pro tune, the rate increase theretofore approved

seven months before (NARI Brief, pg. 3).

(iii) Whether the Interstate Commerce Com-

mission, which is obliged by Section 15(7) of the

Interstate Commerce Act, 49 U.S.C. § 15(7), to

hold meaningful hearings to determine the “‘law-

fulness”’ of proposed rate increases, may properly

issue a final order approving such rate increases

and only thereafter consider the “‘lawfulness’’ of

such approved increases under the National En-

vironmental Policy Act in post-decision proceed-

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8

ings that flativ deny the right to any hearing on

the new issues thus belatedly raised (NARI Brief,

pg. 3).

(iv) Whether in a case of this nature where

the Commission has constautly exhibited hostility

to the requirements of the National Environmental

Policy Act, the district court properly exercised

its judicial power to review not only the form of

the Commission's alleged, belated compliance with

NEPA, but the substanec of that alleged compli-

ance as well; and where the court found the Com-

inission’s alleged compliance to be seriously inade-

quate or capricious, was it proper for the court to

remand the ease to the Commission for further

administrative proceedings consistent with the

court's decree (NAPPI Brief, pg. 4).

The resolution of these vitally important questions

under NEPA is still critically necessary, not only inso-

far as the instant case is concerned, but also beeause,

until they are resolved, they will ecoutinue to arise in

ease after ease in the future involving proceedings

before the Interstate Commerce Commission and other

federal agencies, and for that reason also, they plainly

are not moot. (See Southern Pacific Terminal Com-

pany V. Interstate Commerce Commission, supra).

IL.

IT IS ABSOLUTELY ERRONEOUS AND IMPROPER FOR

EDF TO SUGGEST, WITHOUT ANY SUPPORT IN THE

RECORD BEFORE THE COURT, THAT THE VERY

LIMITED RECENT ACTIONS TAKEN BY THE CoOM-

MISSION IN EX PARTE 310 HAVE “RADICALLY

CHANGED ... THE RELATIONSHIP BETWEEN RATES

FOR SCRAP AND PRIMARY MATERIALS.”

The wholly specious, baseless statements made at

pages 2-4 of EDF’s *‘Suggestion of Mootness’’ regard-

ing the overall effect of the Commission’s recent, e.-

tremely limited actions in Ex Parte 310 are grossly

improper and they should be stricken for lack of any

support whatsoever in the factual record before this

Court, and because they are plainly false and inaccu-

rate.

As demonstrated in NARI’s main brief herein,’ on

the basis of the record actually before this Court—

(i) in 1959, virgin pulpwood was carried by

the nation’s railroads at average national freight

rates 13.9¢ per ewt. lower than those charged for

the transportation of competing wastepaper.

(ii) By 1971, as a result of “ rate increases

granted by the Commission in a series of Ex Parte

proceedings, that rate advantage had grown to

18.6¢ per ewt. in favor of pulp.

(iii) Similarly, by 1971, virgin non-ferrous

ores enjoyed a 17.7¢ per ewt. advantage over com-

peting non-ferrous metal scrap, and that advan-

tage had grown from a 13.3¢ per ewt. advantage

in 1959, as a result of successive Er Parte in-

creases allowed by the Commission.

Since 1971, further distortions of these rate relation-

ships were fashioned by the Commission in Er Parte

281 (2.5% surcharge, plus 3%), Ex Parte 295, Sub 1

(3°.), and Er Parte 299 (2.8%). In many of these

Er Parte proceedings, the railroads actually exempted

some of the competing virgin commodities involved

from any increase whatsoever, or they favored them

with rate holddowns.

Thus, merely because the Commission finally re-

cently exempted wastepaper, textile wastes and non-

ferrous metal scrap from the 7% increase involved in

> At pages 6, 7.

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10

Ex Parte 310, this case involving Ex Parte 281 was in

no sense or manner thereby rendered moot. First of

all, some of the competing virgin commodities involved

were again exempted by the railroads from eny in-

crease in Ex Parte 310. But, irrespective of that, the

Commission’s exclusion of recyclables from the 7%

“inerease did not nearly serve to eliminate the historic

rate distortions mentioned above which still inex-

plicably favor the high-priced virgin commodities and

penalize the low-priced competing recyclables. Those

gross rate distortions are largely still in effect, so irre-

spective of what the Commission did in Ex Parte 310

in 1975, its actions in 1972 and 1973 in Ex Parte 281

are still anything but moot, and they continue to ery

out for remedial relief in this case.

CONCLUSION

The pending ‘Suggestion of Mootness’’ should be

rejected. The Court should proceed to pass first on the

threshold jufFisdictional issue; and if it then decides

jurisdiction lies, the Court should proceed with a de-

cision on the merits under the National Environmental

Policy Act and other related federal statutes. If, for

any reason, the Court intends seriously to consider the

said ‘*Suggestion of Mootness’’ then appellees NARI,

et al. hereby move for rehearing and reargument with

reference to that issue not discussed during oral argu-

ment.

Respectfully submitted :

Epwarp L. MerriGAN

Attorney for Appellees

NARI et al.

888 17th Street, N.W.

Washington, D. C. 20006