Amicus Brief — Houston Lighting & Power Co. v. Interstate Commerce Commission

Supreme Court of the United States

OctoBER TERM, 1979

No. 79-793

Hovston LIGHTING AND PowER Company, Petitioner,

and

ARIZONA ELECTRIC PoWER CooPERATIVE, INCc., Petitioner,

V.

INTERSTATE COMMERCE COMMISSION, et al., Respondents.

BRIEF AMICUS CURIAE OF MORRIS K. UDALL.

PRO SE, IN SUPPORT OF JOINT PETITION WRIT

OF CERTIORARI TO THE UNITED STATES COURT

OF APPEALS FOR THE DISTRICT OF COLUMBIA

CIRCUIT

Morris K. UDALL

235 Cannon HOB

Washington, D.C.

December 14, 1979

Press or Byron 8S. ADAMS PRINTING, INC., WASHINGTON, D. C.

TABLE OF CONTENTS

TABLE OF AUTHORITIES .....

INTEREST OF AMICUS CURIAE , .

SUMMARY OF REASONS WHY WRIT

SHOULD BE ISSUED none

REASONS FOR GRANTING THE WRIT.

1. The Pricing of Coal

PAGE

Transportation By Railroad

Must Be Governed By

Reasoned Standards.

2. Coal Rates Which Are

Discriminatory Are

Manifestly Unfair :

CONCLUSION wie: eee ae

TABLE OF AUTHORITIES

Page

CASES:

Burlington Northern, Inc. v.

United States, 555 F.2d 637

co. SC eh) RE ro.

I.C.C. v. Inland Waterways Corp.,

319 Uste 671 (1943). 7 o 7.

ek v. Sierra Club, 427 U.S.

390 6) * . e - 7 7 7 7 °

Trans Alaska Pipeline Rate Cases,

$30. Uies GL (2978). . 2 ee wt

United States v. I.C.R. Co., 263

U.S. 515 (1924) ” . 7 - ° e . + +

COMMISSION PROCEEDINGS:

Annual Volume Rates On Coal --

Wyoming To Flint Creek, Arkansas,

Docket No. 36970, and Southwestern

Electric Power Co. v. Burlington

Northern, Inc., Docket No. 26980

(Combined decision served May 25,

1979) (not officially printed

(Dissenting opinion of Commissioner

Christian served June 20, 1979)

(not officially printed), appeals

docketed sub nom. Burlington

Northern, inc. v. Unite ates.

No. 79-1547 (D.C. Cir., filed

May 25, 1979) and Southwestern

Electric Power Company v. ICC,

it Be SOOO) ke a ke ke

ii

10

19

20

20

19

ec le Rita tas 8 atts eb ial ike ama patties whine:

Wet ale MCR ae aa ae

me + teh erent ests

ANE tet ts OORT se ign ks A ere ORT aT ney Sr Ant MAA ts

Page

STATUTES :

&

Clean Air Act Amendment of

1977, Pub. L. No. 95-95, Stat.

685 e e e s ° * ° e > e ° e o Ld is 5

Energy Policy and Conservation

Act, Pub. L. No. 94-163, 89

Stat. 37 (1975) e 7 e. . . e ° ° ° 13

Interstate Commerce

Act e . a e - i + e o - =o e 6,17

Powerplant and Fuel Use Act

of 1 ’ Pub. L. No. 95-62 ’

92 Sta . 246 2 o . n . es a - aa se 5

Revised Interstate Commerce

Act, Pub. L. No. 95-473, 92

Stat. 1337 (1978), codified at

49 U.S.C. 810101 et seq. . . . 6,17,18

810729 e * o e ° e o e o e = 15

Baeeaeies «4s 6% “Ss wy ee 16

Surface Mining Control and

Reclamation Act of 1977, Pub. L.

No. 95-87, 91 Stat. 445 a ee 5

Railroad Revitalization and

Regulatory Reform Act of 1976,

Pub. L. No. 94-210, 90

Stat. 33 cw eo ge wl 4 ey Oy Op Reae

iii

Page

MISCELLANEOUS :

Brief for Respondent United

States of America, San Antonio,

Texas v. United States, No. 78-

2051 (D.C. Cir., filed Oct. 25,

ROTO? 26).6 See eee ee ee ws. - Ti

S. Rept. No. 46, 49th Cong.

Be GEOG: Teepe 26s «w Soe ew oe we CCR

iv

ee

a. a pe tins ee ay Ne ha

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1979

NO. 79-793

HOUSTON LIGHTING AND POWER COMPANY,

Petitioner

and

ARIZONA ELECTRIC POWER COOPERATIVE, INC.,

Petitioner

Vv.

INTERSTATE COMMERCE COMMISSION, et. al.,

Respondents

BRIEF AMICUS CURIAE OF MORRIS K. UDALL,

PRO SE, IN SUPPORT OF JOINT PETITION

WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

DISTRICT OF COLUMBIA CIRCUIT

Morris K. Udall

235 Cannon HOB

Washington, D.C.

December 14, 1979

INTEREST OF AMICUS CURIAE

Amicus Curiae is a member of the

United States House of Representatives

where he serves as Chairman of its

Committee on Interior and Insular

Affairs and the Subcommittee on Energy

and the Environment. He has represented

the second district of the State of :

Arizona since 1961. In 1976, he was a

candidate for President of the United

States.

Since 1974, Amicus has been

involved on a continuous basis with

major aspects of the nation's very

grave energy problems which are atthe

root of the dispute between the rail-

roads and petitioners. Amicus, in

recent years, successfully and un-

successfully has sponsored and led the

od

legislative efforts of the United

2

State Congress to deal with such

important and controversial issues as

national standards for the regulation

of strip mining, the interstate trans-

portation of coal by slurry pipeline,

the preservation of the Alaska wilder-

ness, the creation of an Energy

Mobilization Board, the regulation

of nuclear energy, and the transpor-

tation and delivery of Alaska oil and

gas. As a consequence of his

legislative experience and background

in dealing with energy problems of

national scope and impact, amicus

perceives an issue of national

significance that is both distinct

from and broader than the issues

presented by petitioners. It is the

purpose of Amicus to underscore

this circumstance for the Court.

3

Finally, while petitioners nominally

bear and pay the railroad charges here

in dispute, the real parties in interest

are the electric consumers who ultimately

pay these charges as a surcharge to their

monthly electric bills. Many of the

consumers paying the disputed charges

here before the Court are residents of

the second district of Arizona. Count-

less numbers of consumers from other

districts will also be directly

affected by the direction which is

taken by coal transportation pricing.

It is essential that the immediate

interests of these persons be pressed

in the present proceedings.

SUMMARY OF REASONS WHY

WRIT SHOULD BE ISSUED

oe

The Congress has been diligent

and conscientious in its sustained

4

ae i a

efforts to formulate a rational energy

policy for this nation. Increased

usage of domestic coal is the lynchpin

to that policy. We have enacted

legislation to foster increased coal

usage while protecting our environment

in connection with both the mining and

the burning of coal.2/ This carefully

formulated approach, however, is going

awry because of the unprincipled fashion

in which the I.C.C. is administering the

new Railroad Revitalization And

Regulatory Reform Act Of 1976, Pub. L.

17 See, e.g., Powerplant and Industrial

Fuel Use Act of 1978, Pub. L. No. 95-620,

92 Stat. 246; Clean Air Act Amendments

of 1977, Pub. L. No. 95-95, 91 Stat 685.

Surface Mining Control and Reclamation

Act of 1977, Pub. L. No. 95-87, 91

Stat. 445. —

No. 94-210, 90 Stat. 33 ("4-R Act") rate-

making amendments2/ as they apply to

railroad rates on our nation's emerging

bituminous coal traffic. In the case of

coal, unlike most other fossil fuels,

transportation usually constitutes the

lion's share of the delivered cost of

the fuel. The agency's unreasoned

treatment of these critical questions

is particularly offensive to Amicus

2/ These 4-R Act provisions amended

existing sections of the Interstate

Commerce Act ("Act"), then set out at

49 U.S.C. Sl et seq. Recently, the

Congress recodified the Act, without

substantive change. See the Revised

Interstate Commerce Act ("Revised

Act"), Pub. L. No. 95-473, 92 Stat.

1337 (1978). Provisions of the

Revised Act now appear at 49 U.S.C.

SI0101 et seq.

because it is discriminatory as well as

irrational and the citizens of Arizona

will bear the brunt of this unfair and

unlawful discrimination. If our system

of government is to function in the best

interests of the people, this Court

must step in to ensure that the agencies

accord a reasoned implementation of the

laws enacted by the Congress, especially

where the impact of the agency decisions

will adversely affect the national

welfare.

REASONS FOR GRANTING THE WRIT

(1) The Pricing Of Coal Transportation

By Railroad Must Be Governed By

Reasoned Standards

These are not the first cases

raising consequential questions on how

this nation's burgeoning coal trans-

portation will be priced. The first

case was Burlington Northern, Inc. v.

7

United States, 555 F.2d 637 (8th cir.

The issue of the particular

methods to be adopted for reali-

zation of the goals established by

the 4-R Act must first be decided

by the Commission.

1977). There the I.C.C. utilized the

traditional determinants for maximum rail

rates to prescribe a coal rate at a level 555 F.2d at 647

two-thirds of that set a year later in Despite the fact that Congress

Arizona. The court, in rejecting rail- required the I.C.C. in Section 205 to

road interpretations of the 4-R Act

"develop and promulgate" reasonable

a ie = e

accepte here by the C.C- and approved standards for implementation of the

by the court below, stressed at several . ; ; ‘

Y : Section and notwithstanding the earlier

junctures oint which Amicus believes

J i refusal of the Eighth Circuit to apply

has critical application here. Before

ae fee PPe*s " the Section until the standards and

the new 4-R Act ratemaking standard can

procedures were formulated, the agency,

be used to make railroad rates, the :

in these crucial coal rate cases,

Commission must issue the rules and

plunged ahead without benefit of any

idelines called for in this act and, :

¥ ; rules or regulations to sanction vastly

in particular, the Section 205 “revenue

increased freight rates based solely on

need" guidelines. As to this ; : , ‘

¥ . . some ineptly articulated notions of rail-

requirement, the Burlington Northern

road revenue need. While the lower

Court noted:

court incorrectly affirmed the un-

9

JE

4

if

reasoned actions because it perceived

the I.C.C. determination to be a "tempo-

rary approach," the facts are otherwise.

Petitioners show that the agency

continues to this day to set coal rates

in such an erratic and unreasoned

manner that one member of the Commission

has termed the process as a "wholesale

retreat from reasoned decisionmaking."

Annual Volume Rates On Coal -- Wyoming

To Flint Creek, Arkansas, Docket No.

36970, and Southwestern Electric Power

Co. v. Burlington Northern, Inc.,

Docket No. 26980 (Combined decision

served May 25, 1979) (not officially

printed) (Dissenting opinion of

Commissioner Christian served June 20,

1979 at sheet 1) (not officially

printed), appeals docketed sub nom.

Burlington Northern, Inc. v. United

10

States, No. 79-1547 (D.C. Cir., filed

May 25, 1979) and Southwestern Electric

Power Company v. ICC, No. 79-2082

(Sth Cir., filed May 3, 1979). Indeed

the United States is cognizant of both

the lack of standards and the importance

of the coal transportation at issue.

In a recent brief challenging the

legality of one of the Commission's

unreasoned coal rate decisions that

followed the actions Petitioners’ here

attack, the federal government argued

that:

Seldom in the 92-year existence of

the Interstate Commerce Commission

has the need for informative and

intelligible findings been more

acute ....

Brief for Respondent United States of

America, San Antonio, Texas v. United

States, No. 78-2051 (D.C. Cir., filed

Oct. 25, 1978).

11

The Congress in its enactment of

Section 205, the Eighth Circuit in the

initial judicial encounter with the 4-R

Act ratemaking provisions, and the United

States of America, are of one voice as

to the need for rational railroad rate-

making guidelines to govern the rates

charged on our nation's emerging and

vital traffic in bituminous coal. The

I.C.C. stands alone in its cart-before-

the-horse approach.

The failure of the I.C.C., abetted

by the lower court, to administer the law

as enacted by the Congress and in the

fashion directed by the Congress, has

brought uncertainty and confusion to

the important principles of coal

transportation pricing.

12

As an elected representative who is

actively engaged in the difficult task of

legislating programs to deal with our

nation's critical energy problems, Amicus

firmly believes that the federal agencies

must be particularly sensitive to the

impact of their decisions on the programs

that the Congress has devised to meet

national energy needs. This belief is

reflected in the laws passed by the

Congress. 3/ To carry out the intent

of the Congress, it is absolutely

essential that the agencies act in a

rational fashion.

37 See, e.g., The Energy Policy and

Conservation Act, Pub. L. No. 94-163,

89 Stat. 371. (1975). (Federal agencies

including the I.C.C. directed to issue

energy impact statements in designated

major regulatory proceedings. )

13

Particularly in the area of energy

transportation, arbitrary and irrational

agency decisions are likely to upset the

delicate balance of national economic,

social and political interests that the

Congress has incorporated into its

legislative programs. Because the I.C.C's

actions in the coal rate cases lack the

essential element of sound decision-

making, our nation's energy, inflation

and consumer protection policies are

thrown into disarray. It is the

responsibility and, indeed, the duty of

the Court to hear and resolve these

questions of indisputable consequence

to our nation's future.

In bbitiak Amicus believes that

it is quite likely that the strong

opposition to the Commission's decisions

now being registered before the federal

14

circuits will result in a maze of

separate opinions that will further

exacerbate the present uncertainties.

This Court's definitive review is

necessary to avoid this unhappy result.

Although the Court could wait for the

anticipated problems to fester before

review, such an action would be of

little solace to the petitioners. Due

to the peculiarities of the section

under which the respondents filed

petitioners' rates, this Court's failure

to set aside the lower court's decisions

will make it impossible for petitioners

even to begin to challenge the approved

rates until November, 1982.4/

47 The respondents filed their rate

Schedules pursuant to 49 U.S.C. 810729

immediately after the Commission's

November, 1977, decisions. This section

states in pertinent part:

15

The important national interests

at stake, combined with the petitioners

unfortunate inability to obtain remedial

relief without judicial action, makes

the decisions entered below particularly

ripe for review by this Court at this

time.

(2) Coal Rates Which Are Discriminatory

Are Manifestly Unfair

The cornerstone of our system of

railroad regulation is its absolute

proscription against undue discrimination.

The rendition of like transportation

services to similarly situated shippers

at different rates was viewed by the

Once a rate, classification, rule

or practice become effective under

this section, the Commission may

not, for five years, suspend or set

it aside [as unreasonably high or

discriminatory]....

49 U.S.C. 810729(b).

16

Congress as the greatest evil to be over-

come through enactment of the Interstate

Commerce Act. As stated in the influ-

tial 1886 Senate Report concerning the

Act:

no excuse can be offered for any

discrimination in the charges made

by a common carrier as between

persons similarly situated for

whom a like service is performed

under similar circumstances. This

is the most flagrant and repre-

hensible form of arbitrary

discrimination. Individual

favoritism is the greatest evil

chargeable against the management

of the transportation system of

the United States.

S. Rept. No. 46, 49th Cong. lst Sess.

188 (1886)

Today, some ninety years after the

original enactment of the Act in 1887,

the language of the Revised Act continues

to reflect the Congressional intent

to eradicate prejudicial "favoritism."

17

Prohibitions Against Discrimination

By Common Carriers

(a) A common carrier providing

transportaion subject to the juris-

diction of the Interstate Commerce

Commission ... may not charge or

receive from a person a different

compensation (by using a special

rate, rebate, drawback, or another

means) for a service rendered, or

to be rendered, in transportation

the carrier may perform under this

subtitle than it charges or receives

from another person for performing

a like and contemporaneous service

in the transportation of a like

kind of traffic under substantially

similar circumstances. A common

carrier that charges or receives

such a different compensation for

that service unreasonably

discriminates.

Revised Act 810741, 49 U.S.C. 810741.

Despite the long standing resolve

of Congress to eradicate unjust dis-

crimination, the I.C.C. has, nevertheless,

in its actions below permitted this

deplorable situation to occur. As

petitioners show, the electric consumers

18

of Arizona are being made to pay nearly

300 percent more for unit coal train

transportation than other similarly

situated coal receivers. Clearly,

differences of this magnitude constitute

a classic example of transportation

discrimination.

This Court has observed that a

rate may be set at a reasonable level

and yet still be unlawfully discrimini-

tory. United States v. I.C.R. Co.,

263 U.S. 515, 524 (1924); I.C.C. v.

Inland Waterways Corp., 319 U.S. 671,

685 (1943). Accordingly, should the

Court conclude that the levels of the

assailed rates are somehow the product

of reasoned ratemaking, there is no

way to justify the resultant flagrant

discrimination which has been directed

against the electric consumers of the

19

State of Arizona. If Arizona is made to

pay rail rates twice to three times

those paid by other coal receivers, we

have an unconscionable situation which

furnishes an independent basis calling

for this Court's review.

CONCLUSION

In the past, and properly so,

this Court has supplied definition and

direction on important aspects of our

nation's drive for energy independence.

In Trans Alaska Pipeline Rate Cases,

436 U.S. 631 (1978), the Court gave

direction to important questions on the

economics of oil pipelines. In Kleppe

v. Sierra Club, 427 U.S. 390 (1976),

the Court spoke to environmental issues

connected with the mining of the coal

moving to Houston. The decisions below

20

involving the economics of coal transpor-

tation, in the judgement of Amicus, are

at least as consequential to the success

of energy and economic independence and

deserve this Court's consideration.

Respectfully submitted,

MORRI - UDALL

235 Cannon House Office Bldg.

Washington, D.C. 20515

(202) 225-4065

21