# Petition — Atchison, Topeka & Santa Fe Railway Co. v. United States > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385007_2247%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1981 - **Citation:** 454 U.S. 831 ## Text Office -§ !OTene Court, FILED RO-2072 JUN 5 1988 omeaunes =. STEVA IN THE CLERK SUPREME COURT OF THE UNITED STATES OCTOBER TERM, 1980 No. 80- The Atchison, Topeka and Santa Fe Railway Company, The Denver and Rio Grande Western Railroad Company and Southern Pacific Transportation Company, Petitioners, V. The Interstate Commerce Commission, The United States of America, Central Power and Light Company and The State of Texas, Respondents. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT MILTON E. NELSON, JR. R. EDEN MARTIN RICHARD E. WEICHER LAWRENCE A. MILLER 80 E. Jackson Blvd. JOHN WILL ONGMAN Chicago, Illinois 60604 MICHAEL G. LEDERMAN Washington, D.C. 20006 Attorneys for The Atchison, Topeka and Senta Fe Railway Company SAMUEL R. FREEMAN HOWARD J. TRIENENS KENDALL T. SANFORD RICHARD J. METZGER 1515 Arapahoe Street One First National Plaza Denver, Colorado 80217 Chicago, Illinois 60603 Attorneys for The Denver and _ Attorneys for Petitioners Rio Grande Western Railroad Company STEWART E. VAUGHN One Market Plaza San Francisco, California 94105 Attorney for Southern Pacific Transportation Company June 5, 1981 1730 Pennsylvania Ave., N.W. i QUESTIONS PRESENTED Section 10729 of the Interstate Commerce Act, which was added to the Act by the Railroad Revitalization and Regulatory Reform Act of 1976, provides that a rate proposed for services requiring capital investment in railroad facilities of $1 million or more is to become effective within 180 days of its filing unless the Interstate Commerce Commission decides during that period that the proposed “capital incentive rate” would violate the Act. Once effective, “the Commission may not for 5 years, suspend or set [such a rate] aside” as violating the Act. In this case, a proposed capital incentive rate applicable to a unit train coal movement was not disapproved by the Commission within 180 days, and thus became effective. Indeed, far from holding the rate to be unlawful, the Commission decided that the Railroads lacked market dominance over the movement, and that, accordingly, the Commission lacked jurisdiction as to its reasonableness. The first question presented is whether the Court of Appeals had jurisdiction to order the Interstate Commerce Commission upon remand to re-examine the reasonableness and lawfulness of a qualified capita! incentive rate which had become effective pur- suant to the provisions of Section 10729. The second question presented is whether, if the Court of Ap- peals had jurisdiction to order the Commission to re-examine a qualified capital incentive rate, the Court of Appeals applied an improper standard of review with respect to the Commission’s de- termination that the Railroads lacked market dominance as to the involved coal movement, and in addition, committed serious error in holding that the Commission’s market dominance deter- mination and analysis were flawed. PARTIES TO THE REVIEW PROCEEDINGS IN THE COURT OF APPEALS The following were parties to the review proceedings in the Court of Appeals below: Central Power and Light Company and The State of Tex- as, Petitioners; The Interstate Commerce Commission and The United States of America, Respondents; and The Denver and Rio Grande Western Railroad Company, The Atchison, Topeka and Santa Fe Railway Company, Southern Pacific Transportation Company and Colowyo Coal Company, Intervenors-Respondents. TABLE OF CONTENTS Page QUESTIONS PRESENTED......0eeeeeeceeeeeenes a PARTIES TO THE REVIEW PROCEEDING IN THE COURT OF APPEALS ....cccccccccccccccsvvces ii TABLE OF AUTHORITIES .......-eeeeeeeeeeeees iv OPINION BELOW ..ccccccccccccccccccsccccvcces l JURIBDICTION cccccccccccccccovvccseccceseoece 2 STATUTE INVOLVED .....ccccccccccccvecevees 2 STATEMENT OF THE CASE ......eeeeeeeeeeeees 4 REASONS FOR GRANTING THE WRIT ........-- 14 I. The Court of Appeals Lacked Jurisdiction to Order the Commission to Re-examine a Qualified Capital Incentive Rate That Had Become Effec- tive Pursuant to the Provisions of Section 10729. 15 II. Even If the Court of Appeals had Jurisdiction to Order the Commission to Re-examine a Qualified Capital Incentive Rate Which Had Become Effec- tive, the Court of Appeals Erred in Applying an Inappropriate Standard of Review As to the Com- mission’s Market Dominance Findings......... 23 CONCLUSION ...ccccccccccccccccccccescevecees 27 STATUTORY APPENDIX APPENDIX A APPENDIX B APPENDIX C iv TABLE OF AUTHORITIES CASES Abbott Laboratories v. Gardner, 387 U.S. 136 CPPOT De dtcvccusvtesssvccccvteeneadeen’s Arrow Transportation Co. v. Southern Railway Co,, 308 F.2d 181 (1962). .ccccccccccccces Arrow Transportation Co. v. Southern Railway Co., 372 U.S. 658 (1963). ccccccccccccces Barlow v. Collins, 397 U.S. 159 (1970) ....... Celanese Chemical Co, v. United States, 362 F.2d $68 (Sth Cir. 1981) .ccccccccccvccceccene Dunlop v. Bachowski, 421 U.S. 560 (1975).... Grain In Multiple-Car Shipments — River Cross- ings to the South, 318 1.C.C. 641, reversed, 321 1.C.C, 582 (1963), reversed sub nom. Cincin- nati, N.O. & T.P.Ry. Co. v. United States, 229 F.Supp. 572 (S.D. Ohio 1961), vacated per curiam sub nom. Arrow Transport Co. v, Cin- cinnati N.O. & T.P.Ry. Co. 379 U.S. 642 (1965), on remand, Grain in Multiple Car Shipments— River Crossings to the South, 325 BAL. T52 CISES a cctv cvcctescvevceseuess Houston Lighting & Power Co. v. United States, 606 F.2d 1131 (D.C. Cir. 1979), cert. denied, 444 U.S. 1073 (1980) ..ccccccccccccccees Morris v. Gressette, 432 U.S. 491 (1977) ..... Trailer Marine Transport Corp. v. FMC, 602 F.2d 379 (D.C. Cie. 1979) .cccccccsvcccees STATUTES Interstate Commerce Act: £10701, 49 U.S.C. GIOTO! . on ccccccccacvess §$10709, 49 U.S.C. §$10709......ccccccvees Page 6, 21-22 3, Dy aay a4 19, 20 §10729, 49 U.S.C. §10729 (formerly §15(19), 49 U.S.C. B15C19)) wcccccccccccecvcvcers Railroad Revitalization and Regulatory Reform Act of 1976, Pub. L. 94-210, 90 Stat. 31: SIONS) .cccccccccccdecccescccsscovcces $206, 49 U.S.C. §15(19) ... cc eeeeeeeeeees Staggers Rail Act of 1980, Pub. L. 96-448, 94 Stat. 1895: SRIGIR) 6 vc ccdecccccsecvcovedecvosecene S2IGER) wcccccccccccsccscscvcccevcceces Pub. L. 95-473: OD cavcaneddedendanescosesasanepeseces 28 U.S.C. §§1254(1), 2350(a)... cece cece eens 28 U.S.C. $§2321, 2342... ceccccccccccccece REGULATIONS 49 C.F.R. $1109.1(f) 0. ccvcvccvcccccccscees LEGISLATIVE MATERIAL 120 CONG. REC. 38736, daily ed., December SO TOPS Scot edecceceptoccoeseseveetess 126 CONG. REC. S.2993, daily ed., March 25, 19BO ..cccccccccvccccccccccvcvcvcvcoes 19BO .cccccccccccccccvccccccvccccccces 19GD cccccveccccsccccocescesecedeseees S. Rep. No. 94-499, 94th Cong., Ist Sess. (1979) . Hearings on Railroad Revitalization Before the Subcommittee on Transportation and Com- merce of the House Committee on Interstate and Foreign Commerce, 94th Cong., Ist Sess. CEPTS) occ cde cccccccacecsvesdedroetene Page passim 2 passim 13 IN THE SUPREME COURT OF THE UNITED STATES OcTOBER TERM, 1980 No. 80- The Atchison, Topeka and Santa Fe Railway Company, The Denver and Rio Grande Western Railroad Company and Southern Pacific Transportation Company, Petitioners, v. The Interstate Commerce Commission, The United States of America, Central Power and Light Company and The State of Texas, Respondents. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT Railroad Petitioners, The Atchison, Topeka and Santa Fe Rail- way Company (“Santa Fe”), The Denver and Rio Grande West- ern Railroad Company (“D&RGW”), and Southern Pacific Transportation Company (“Southern Pacific”), ask this Court to issue a writ of certiorari to review the judgment and opinion of the United States Court of Appeals for the Fifth Circuit in Central Power and Light Co. v. United States, reversing and vacating in part an order and decision of the Interstate Commerce Commis- sion (“Commission”) approving a capital incentive rate for rail shipment of coal in unit trains and remanding that decision and order to the Commission for reconsideration. OPINION BELOW The decision of the Court of Appeals as to which a writ of cer- tiorari is sought is entitled Central Power and Light Co. v. United States and is reported at 634 F.2d 137 (App. A). The Court of Appeals’ subsequent order granting a petition for rehearing and reinstating its previous opinion as supplemented is reported at 2 639 F.2d 1104 (App. B). The decision and order of the Com sion, dated January 15, 1980, that was reviewed by the Fifth cuit is entitled Incentive Rates on Coal-—-Axial CO, to Cc Creek, TX, (Docket No. 37226), and is unreported (App. C JURISDICTION The judgment and opinion of the Court of Appeals wer tered December 15, 1980 (App. A). A timely Petition for Ret ing was granted and the Court of Appeals’ previous opinion reinstated on February 26, 1981 (App. B). This Court has j diction under 28 U.S.C. §§1254(1) and 2350(a). By application filed with this Court on May 7, 1981, Petitic herein sought an extension of time for the filing of petition writs of certiorari in this case and in a related case involvin; decision of the Court of Appeals for the Fifth Circuit in Cel« Chemicai Co. v. United States, 632 F.2d 568 (Sth Cir. 1‘ Such relief was sought on the ground that the two cases pri related issues involving capital incentive rates under Se 10729 of the Interstate Commerce Act and that an extensi time would permit the Petitioners in both cases to coordinate submissions. This application was granted by order dated M 1981, extending the time for filing petitions in these related ters to June 4, 1981.’ STATUTE INVOLVED Section 10729 of the Interstate Commerce Act’ (forr codified at 49 U.S.C. §10729), as added by Section 206 o ‘In conformity with that order, the present petition and the petiti volving the Court of Appeals’ decision in Celanese Chemical Co. v. ed States, are filed simultaneously. *Prior to the recodification of the Interstate Commerce Act in 19 Pub. L. 95-473, the provisions added to the Act by Section 206 of th Act were codified at 49 U.S.C. §15(19). Although the wording | (Footnote continued on following page) 3 Railroad Revitalization and Regulatory Reform Act of 1976 (Pub. L. 94-210, February 5, 1976, 90 Stat. 31) (“4-R Act”), provided as follows: “(a) A proposed rate, classification, rule or practice for transportation by a rail carrier subject to the jurisdiction of the Interstate Commerce Commission under subchapter I of chapter 105 of this title requiring a total capital investment of at least $1,000,000 to implement shall be established and become effective under this section. This section applies whether the investment is made individually or collectively by the carrier or by a shipper, receiver, or agent of any of them, or by a third party. “(b) A rail carrier may file a notice of intent to establish a rate, classification, rule, or practice under subsection (a) of this section with the Commission. The notice must include a sworn affidavit detailing the anticipated capital investment. Unless the Commission after holding a proceeding under subsection (c) of this section, decides by the 180th day after the notice is filed that the proposed rate, classification, rule, or practice would violate this subtitle, the carrier may estab- lish that rate, classification, rule, or practice at any time dur- ing the next 180 days, and it may become effective 30 days after it is established. Once a rate, classification, rule, or practice becomes effective under this section, the Commis- sion may not, for 5 years, suspend or set it aside as violating section 10701, 10726, 10741-10744, or 11103 of this title. However, the Commission may order the rate, classification, rule or practice to be revised to a level equal to the variable costs of providing the transportation when the Commission (Footnote continued from previous page) statute was modified by the 1978 recodification, Section 3 of Pub. Law No. 95-473 states that the recodification sets out “without substantive change, laws enacted before May 16, 1978, that were replaced by those sections. Those sections may not be construed as making a substantive change in the laws replaced.” See Houston Lighting & Power Co. v. United States, 606 F.2d 1131, 1135 n.2, 1150 n.57 (D.C. Cir. 1979), cert. denied, 404 U.S. 1073 (1980); Trailer Marine Transport Corp. v. FMC, 602 F.2d 379, 383 n.18 (D.C, Cir. 1979). For convenience, all references herein are to Section 10729. The texts of both Sections 15(19) and recodified Section 10729, as recodified ir 1978, are set forth in the Statutory Appendix attached hereto. 4 finds the level then in effect reduces the going concern of the carrier. “(c) On request of an interested person, the Comm shall hold a proceeding to investigate and determine wh the rate, classification, rule, or practice proposed to be « lished under this section complies with this subtitle Commission must give reasonable notice to interested p before beginning a proceeding under this subsection bu act without allowing an interested party to file an ansv other formal pleading.” (Emphasis supplied. ) Section 10729 of the Act was repealed prospectively by Si 210(a) of the Staggers Rail Act of 1980 (“Staggers Act’) L. 96-448, October 14, 1980, §210(a), 94 Stat. 1910. Hov the savings provisions of Section 210(b) of the Stagger provided that “[n]otwithstanding any other provision of lay rate established by a rail carrier under Section 10729 of Til United States Code, prior to the effective date of the Act remain in effect in accordance with its laws, but for no longe 5 years after the date it became effective. . .. STATEMENT OF THE CASE The Statutory Framework and Its Legislative History This controversy arises under Section 10729 of the Inte Commerce Act, which was added in 1976 by Section 206 4-R Act to encourage capital investment in railroad facili ‘Section 210 of the Staggers Act is also set forth in the Statuto pendix attached hereto. An amendment was proposed to the new legislation (No. | $1946) which would have eliminated capital incentive protect existing as well as any future capital incentive rates (see 126 Con $2993, daily ed. March 25, 1980). This proposed amendment v posed by Senator Cannon, the Chairman of the Senate Commerce: mittee because of the unfairness which would result to the railros the constitutional questions which the amendment would rais Cong. Rec. $3306, daily ed., April 1, 1980). That amendment w sequently defeated in the Senate (Cong. Rec, $3307, daily ed., / 1980). 5 imposing a time limit of 180 days on the period during whict new rate filed by a railroad based upon an investment of $1 m lion or more could be reviewed by the Commission, Section 107 provided that unless the Commission found such a propos “capital incentive” rate to be unlawful within the prescribed It day time limit, such a rate would become effective and thereaf could not be suspended or set aside as unlawful for a period of f years from its effective date. As stated in the “Declaration of Policy” which precedes | substantive provisions of the 4-R Act (Section 10I(a)), the pi pose of Congress in enacting that legislation was: “..., to provide the means to rehabilitate and maintain | physical facilities, improve the operations and structure, a restore the financial stability of the railway system of | United States, and to promote the revitalization of such ri way system, so that this mode of transportation will rem: viable in the private sector of the economy and will be able provide energy-efficient, ecologically compatible transpor tion services with greater efficiency, effectiveness, and ec i Congress recognized that this objective could be achieved o if substantial capital investments were made in needed railr< facilities. However, as the legislative history of Section 10) makes clear, Congress also recognized that disincentives to m ing such investments were created by the risk of prolon; litigation over the reasonableness of railroad rates and the att dant uncertainty, sometimes lasting years, as to the rate level t could be charged. See Houston Lighting & Power Co. v. Uni States, supra, 606 F.2d at 1139. The specific example of the kind of investment disincen! with which Congress was concerned was described by Congr man (later Secretary of Transportation) Brock Adams as “ 6 horror story of the Big John case” (Hearings on Revitalization Before the Subcommittee on Transport: Commerce of the House Committee on Interstate anc Commerce, 94th Cong., Ist Sess. 184 (1975)). In t Southern Railway had published new rates to become ef August, 1961 on grain carried in 90-ton “Big John” a hopper cars. The rates were finally approved by the Cor but only after four years of litigation before the Commi before the oourts on judicial review. Grain in Mul Shipments— River Crossings to the South, 318 1.C reversed, 321 1.C.C. 582 (1963), reversed sub nom. C N.O. & T.P. Ry. Co. v. United States, 229 F. Supp. ‘ Ohio 1964), vacated per curiam sub nom. Arrow Tran. v. Cincinnati, N.O. & T.P. Ry. Co., 379 U.S. 642 (1 remand, Grain in Multiple-Car Shipments— River Cro the South, 325 L.C.C. 752 (1965). The railroads in the “Big John” case had made very st investments in equipment in order to perform comme service in hauling grain. One of the principal purposes ¢ 206 of the 4-R Act was to assure that the history of John” rates would not be repeated. Hence, Congress eliminate the uncertainty, and the attendant disincentiv needed investments, caused by the possibility that years investments were made, the Commission might inval rates upon which those investments had been premised on the Commission's own initiative or on remand from ¢ Appeals. As Congressman Adams explained, the st intended to “give some assurance to a carrier or shipper invests a million dollars in a new service, he will receive decision one way or another on that rate...” (120 C 38736 daily ed., December 10, 1974), and to preclude ¢ in which “the rate which would be called for by that servi 7 lost for years in a thicket of litigation” (id In keeping with these objectives, Congress provided in Sec 206 that (1) “{nJotwithstanding any other provision of law rail carrier might propose a rate based on a capital investmer $1,000,000 or more, (2) that “[u]nless the Commission . decides by the 180th day after the notice is filed that the prop rate ... would violate this subtitle, the carrier may establish rate... and it may become effective 30 days after it is establis and (3) that “[o]nce a rate... becomes effective under this sect the Commission may not, for 5 years, suspend or set it aside . Proceedings Before the Commission In reliance upon these provisions of the statute, Railroad | tioners planned to commit over $50 million to the purchas locomotive units and to various improvements in track and r ed fixed plant to move coal in unit trains’ between a mine | Axial, Colorado, and a coal-fired electric generating station b completed at Coleto Creek, Texas, owned and operated by ¢ tral Power and Light Company (“CP&L”). This unit train vice was designed to move over 1.3 million tons of coal per ye one-way distance of 1,396 miles (App. C at C-4 - C-7). On July 19, 1979, pursuant to Section 10729, Petitioners fil proposed “capital incentive rate” of $20.85 per ton applicab this unit train movement. CP &L protested the proposed rate, the Commission proceeded to conduct a hearing. ‘Similarly, as the Report of the Senate Committee on Commer §.2718 noted (S. Rep. No. 94-499, 94th Cong., Ist Sess. 52 (197! “It is the Committee's view that under existing law, the pos: ty exists that such large-scale initiatives may be thwarted by d in the exercise of the Commission's ratemaking powers. Th would encourage investment in all instances where the car plans can be properly verified, and thus would contribute to th provement of rail facilities and services.” ‘A unit train consists of an entire train carrying only one comm between origin and destination in continuously cycling service. ) In support of their proposed rate, D&RGW, Santa Fe, and Southern Pacific submitted evidence showing that the proposed unit train movement would require a total capital investment of more than $54.7 million,’ far in excess of the $1,000,000 jurisdic- tional minimum for capital incentive rate treatment, The invest- ment required of the Railroads to implement the proposed service in locomotives alone exceeded $28.3 million (37 locomotives cost- ing approximately $764,865 each) (App. C at C-4).’ Additions and improvements to fixed plant to accommodate the CP&L unit train were estimated to amount to more than $26.4 million.’ CP&L contended that the proposed rate did not qualify as a capi- tal incentive rate, that the rate exceeded a just and reasonable maximum, and that it discriminated against CP&L. On January 15, 1980, the Commission issued a decision hold- ing that the Railroads’ proposed capital incentive rate of $20.85 qualified for capital incentive treatment and had not been shown to be unlawful (App. C at C-15), The Commission ordered that the Railroads could file the appropriate tariff without further delay, to become effective on 30 days’ notice. Additionally, the Commission held that a filing by the Railroads in compliance with the order could not, “for a period of 5 years after its effective ‘The Railroads initially estimated that more than $34 million would have to be invested to handle this new traffic. This figure was revised by the Railroads in their Reply to almost $55 million (App. C at C-8), ‘These unit coal trains require 7 or more locomotives per train set, Only 2 locomotives, at over $750,000 each, would thus require an invest- ment of more than $1 million. The principal dispute between CP&L and the Railroads before the Commission was whether the CP&L service would require 37 or only 20 locomotives, (App. C at C-7), The Commis- sion agreed with CP&L that only 20 locomotives would be required (id.). "Fixed plant investments included a new interchange track connecting the lines of Santa Fe and Southern Pacific at Caldwell, Texas, the con- struction of side tracks where necessary to allow passage of oncoming trains, and the upgrading of both Santa Fe and Southei# Pacific tracks. (App. C at C-19 - C-20), 9 date, be suspended or set aside as unlawful under former sections 1, 2, 3, or 4 of the [Interstate Commerce] Act” (/d.). The Commission, although it concluded that “not all” of the locomotive costs and fixed plant investment costs could be used in meeting the minimum investment necessary to invoke the capital incentive rate protection of the Act, held that the threshold requirement had been “exceeded by a substantial margin” (App. C at C-9), The Commission concluded (id.): “Respondents have demonstrated the need for the claimed improvements. Major capital investments are required in the roadway. Such investments are directly related to the safe operation of the unit trains’ movements and to the continued ability of the rail carriers to handle the demand for ser- vice... “It should be understood that Central Power and Light is participating through this rate procedure in establishing a dependable method of transportation of domestic energy sources, that the present rail network is not now able to han- dle such heavy movements or to handle such movements over a long period of time, and that the voluntary rail participa- tion in these rates allows this Commission to monitor the im- provement projects to ensure the necessary work is done. This incentive rate proposal, if executed, will help ensure the customers of CP&L of dependable and safely delivered fu- ture energy supplies.” The Commission next turned to the question of market domi- nance.’ Under the Act, the Commission has no jurisdiction over the *Market dominance” is defined by Section 10709 of the Act (49 U.S.C. §10709) as “an absence of effective competition from other car- riers or modes of transportation for the transportation to which a rate applies.” As the Commission stated in its Report, unless it is shown by a shipper or other protestant that such competition does not exist with re- spect to a movement covered by a proposed capital incentive rate, the proposed rate cannot be found to be unreasonably high (App. C at C- 10), See 49 U.S.C, §10701a(b)(1), 10 maximum reasonableness of ruil rates except where the railroads possess market dominance over the traffic at issue. Noting that CP &L had the burden of showing market dominance and yet had “presented very little evidence on the market dominance issue,” the Commission held that CP&L had “not met this burden of persuasion, and we have no choice but to find that we have no jurisdiction over the question of maximum rate reasonableness” (App. C at C-10), The Commission found, first, that CP&L had failed to estab- lish any of the rebuttable presumptions of market dominance set forth in the Commission's regulations. The market share pre- sumption (70% or more of the involved traffic “during the preceeding year") was inapplicable because no domestic coal traffic to CP&L's Coleto Creek plant had existed in the past, The cost presumption (160% of variable costs) was not satisfied since the Commission computed the variable costs of the Coleto Creek movement to be $13.90 per ton, representing a rate-variable cost ratio of only 150 percent. And, the substantial investment pre- sumption (“substantial investment in rail-related facilities” by shippers) had not been established because CP&L had not shown that the investments it had made could not be used by other rail carriers or alternative transportation modes, (App, C at C-10 - C-14), In the alternative, the Commission held that even if CP&L had established one of the presumptions, each of the presumptions had been rebutted by the Railroads’ evidence of effective competition (id. at C-12), The Commission pointed out that CP&L “has had its choice of numerous sources, carriers and varying modes of carriers’ (App. C at C-13). Moreover, the carriers had in- troduced CP&L's coul contract into evidence, and, as the Com- mission found, had supported their allegations concerning the flexibility of the contract, and “including the possibility CP&L may assign its interests thereunder” (/d, at C-12), The Commis- sion concluded that the Railroads had “made prima facie in- ferences of effective competition requiring an answer,” but that CP&L had completely failed “to produce evidence required to show any fallacy in the railroads’ position” (id.). In summarizing its findings on market dominance, the Com- mission stated (App. C at C-14): “We are charged with protecting shippers from abusive monopoly practices. The evidence does not demonstrate that respondent rail carriers have experienced market dominance in their negotiations with Central Power and Light. Protes- tant has failed to meet its initial burden of showing market dominance. Therefore, no further consideration of the pro- posal is warranted.” Following the decision of the Commission approving the proposed rate, Railroad Petitioners implemented that rate and proceeded to make their capital investments. The unit train ser- vice thereupon commenced. Thereafter, the Railroads filed peri- odie status reports in conformity with the Commission’s order showing that the investments were in fact being made. Proceedings Before the Court of Appeals On January 18, 1980, CP&L filed a Petition for Review of the Commission's decision with the United States Court of Appeals for the Fifth Circuit invoking the Court’s jurisdiction under 28 U.S.C. §§2321 and 2342. CP&L argued that the Commission erred in (1) its finding that CP&L had failed to establish any of the rebuttable presumptions of market dominance; (2) its reliance upon evidence of product and geographic competition in reaching its market dominance determination; (3) its failure to make findings on the issue of unlawful discrimination; (4) its failure to require the carriers to produce confidential cost and operating data; and (5) its finding that the carriers’ proposed tariff schedule qualified for capital incentive rate treatment. Santa Fe, D&RGW and Southern Pacific intervened in the review proceeding. In response to CP &L’s contentions, the Rail- roads showed that the rate approved by the Commission met all of 12 the qualifications for capital incentive treatment under the Inter- state Commerce Act, and thus could not be set aside for five years. The carriers also supported the Commission’s finding that CP&L had failed completely to establish that the Railroads pos- sessed market dominance over the Coleto Creek movement, and argued that CP&L had access to all of the data it needed to make its case. The Court of Appeals for the Fifth Circuit issued its decision on December 15, 1980, remanding the case to the Commission. The decision below was affirmed in part, reversed in part, and vacated in part (App. A). The Court first affirmed that the Railroads’ proposed rate qualified for treatment as a capital incentive rate (App. Act A-5, A-13 - A-17). However, it then held that on remand the Commis- sion was empowered to alter the effective capital incentive rate if such action was required in light of the Court’s remand instruc- tions (id. at A-24 - A-25). While recognizing Congress’ intent that once in effect, capital incentive rates would remain undis- turbed for five years, it found no evidence that Congress “wished to protect erroneous Commission action” (id. at A-25). The Court of Appeals then undertook an extensive analysis of the Commis- sion’s findings on the market dominance presumptions and on the role of geographic competition. Notwithstanding CP &L’s presentation of “very little evidence on the market dominance issue” (App. C at C-10), the Railroads’ presentation of “a number of points which CP&L has chosen to ignore” (id.), and the Commission’s explanation that CP&L “has failed to meet its initial burden of showing market dominance” (id. at C-14), the Court of Appeals directed the Commission to reconsider the market dominance issue in its entirety. The Court noted that the Commission did not address CP & L’s allegation that the carriers’ rate was the subject of rate bureau 13 activity. According to the Court, the rate bureau presumption arises only when “the evidence addressed establishes that the rate in issue has been discussed, considered, or approved upon a rate bureau agreement” (49 C.F.R. §1109.1(f)). Despite CP&L’s failure to submit evidence on this point, the Court directed the Commission to consider whether any rate bureau activity re- strained competition between rail carriers for the Coleto Creek traffic (App. A at A-29). With regard to the revenue/cost presumption, the Court of Ap- peals found that the Commission erred by incorporating into the fixed plant investment cost additive a return-on-equity factor greater than the cost of debt capital, and remanded certain cal- culation issues for reconsideration (App. A at A-40, A-42). Turning to the substantial investment presumption, the Court of Appeals ignored CP &L’s evidentiary deficiencies and vacated the Commission’s findings on this issue. The Court first questioned whether Southern Pacific’s role as the sole terminating carrier should be sufficient to establish this presumption (App. A. at A- 50 - A-51). It then held that (1) the evidence of record was in- sufficient to support the Commission’s finding that alternative domestic sources of coal were available to CP&L (id. at A-53), (2) the Commission must reconsider its apparent finding that there were competing rail carriers for the Coleto Creek movement (id. at A-52), and (3) the Commission must reconsider its finding that another mode of transportation was available in the form of the seaport-rail alternative (id. at A-55 - A-56). The Commission had found that even if CP&L had estab- lished any of the presumptions of market dominance, the Rail- roads’ evidence pertaining to geographic competition was suf- ficient to rebut any such presumption and to demonstrate the existence of competitive alternatives. The Court, however, ques- tioned all of the Commission’s findings on this issue, and its remand order directs the Commission to reconsider (1) whether 14 the statutory definition of market dominance precludes conside! ation of geographic competition (id. at A-58 - A-59), (2) its cor clusions regarding geographic competition in light of its pric decisions (id. at A-59 - A-64), (3) the flexibility afforded CP & in its coal supply contract (id. at A-64 - A-67), and (4) wheth« alternative competitive sources of coal were available to CP& (id. at A-68). The Court of Appeals also remanded the case to the Commi: sion for further consideration of whether the carriers’ rate unlav fully discriminated against CP&L, and for consideration of th utility’s request that the railroads provide certain cost inform: tion (App. A at A-68 - A-70). REASONS FOR GRANTING THE WRIT This Court should grant certiorari to review the ruling of th Court of Appeals below that it was empowered to remand f¢ further Commission consideration issues as to the lawfulness of qualified capital incentive rate filed pursuant to Section 1072 and approved by the Commission under the provision of that Se tion within the prescribed 180-day time period. That ruling manifestly contrary to the plain terms of Section 10729, whic expressly precludes the setting aside of a capital incentive ra! once it is permitted to become effective by the Commission, and contrary to the intent of Congress in enacting that Section. Tt Court’s ruling is also grossly unfair to Petitioners, which ha\ made tens of millions of dollars of capital investments in locom: tives and plant facilities in reliance upon the statutory assuran that if a proposed capital incentive rate is not found unlawful t the Commission within 180 days, it may not thereafter be su pended or set aside for a period of five years. This Court should also grant certiorari to review the proprie of the standard of review applied by the Court of Appeals in i analysis of the Commission's determination that Railroad Pet tioners lacked “market dominance” over the involved traffic. T| 15 Court of Appeals in effect substituted its judgment as to the market dominance issues for that of the Commission—an ap- proach which would be improper even in an ordinary rate case. Moreover, the Court of Appeals erred in failing to recognize that a Commission decision rendered under the capital incentive rate provisions of Section 10729 is at least entitled to a greater mea- sure of deference than a Commission decision rendered in an or- dinary rate case because of the intent of Congress in enacting the statute that regulatory uncertainty be minimized, and because of the time constraints imposed on Commission actions by Section 10729. In part because of its improper approach to review of market dominance issues, the Court committed serious errors in holding that many of the Commission’s findings were in error and must be reconsidered. I. The Court of Appeals Lacked Jurisdiction to Order the Commission to Re-examine a Qualified Capital Incentive Rate That Had Become Effective Pur- suant to the Provisions of Section 10729 As Railroad Petitioners acknowledged before the Court of Ap- peals below, that Court plainly had jurisdiction to review the Commission’s determination that the investment underlying the proposed unit train rate qualified for capital incentive treatment under Section 10729 of the Act, and it had jurisdiction to set that determination aside if it were found to be arbitrary and capricious or otherwise in violation of the provisions of the Administrative Procedure Act (Brief of Railroad Respondents dated September 28, 1979, at 46 n.59). The Court of Appeals exercised such juris- diction in the review proceedings below and affirmed the Commis- sion’s ruling that the proposed rate qualified for capital incentive treatment under the statute. The Court having thus held that the rate filed by Railroad Peti- tioners qualified for capital incentive treatment, under the express terms of Section 10729 that rate became effective and could not 16 thereafter be suspended or set aside by the Commission for a p riod of five years. The failure of the Court of Appeals to recogni: this constraint upon its jurisdiction to authorize or direct tl Commission to “correct errors” (App. A at A-25), and tl Court’s action in setting aside and remanding the Commission decision approving the capital incentive rate filed by Petitione: are therefore manifestly erroneous. Section 206 of the 4-R Act, which added the capital incenti provisions to the Interstate Commerce Act, provided as follow “Unless, prior to the 180-day period following the filing such notice of intention, the Commission determines, after hearing, that the proposed schedule, or any part therec would be unlawful, such carrier may file the schedule at a) time, within 180 days thereafter to become effective after | days notice. Such a schedule may not, for a period of 5 yea after its effective date, be suspended or set aside as unlaw under section 2, 3 or 4 of this part... .”” (Emphasis supplied. The Act was recodified in 1978 without substantive chang¢ Section 15(19) was recodified as Section 10729, which provides pertinent part as follows: “Unless the Commission after holding a proceeding unc subsection (c) of this section, decides by the 180th day af the notice is filed that the proposed rate, classification, ru or practice would violate this subtitle, the carrier may est: lish that rate, classification, rule, or practice at any time di ing the next 180 days, and it may become effective 30 di after it is established. Once a rate, classification, rule, practice becomes effective under this section, the Comm sion may not, for 5 years, suspend or set it aside as violat sections 10701, 10726, 10741-10744, or 11103 of this titl (Emphasis supplied. ) As the Court of Appeals recognized, “(t]he language of §10° sweeps broadly, placing no limitation on the preclusion impo "See p. 3, supra. 17 upon the Commission not to suspend an incentive rate for five years” (App. A. at A-20). Hence, the Court rejected the request made by the Commission in the course of the review proceedings below for “voluntary remand” to permit the Commission to reconsider whether the Railroads had market dominance over the involved traffic and, if so, whether the rate was reasonable under the criteria of Section 10701 of the Act. The Court of Appeals rejected this request on the ground that “[bJoth provisions are included in §10729’s five year prohibition against Commission action” (id.). Moreover, the Court of Appeals recognized that any acquies- cence in the Commission’s request for remand of issues as to the lawfulness of a qualified capital incentive rate would be directly contrary to the intent of Congress in enacting the capital incen- tive provision of the Act. The Court of Appeals noted that the origin of Section 10729 was the so-called “Big John” provision of a bill which had first passed the House of Representatives in 1974, and expressly found that the “Big John” provision which ulti- mately became Section 206 of the 4-R Act “was aimed at ameliorating problems such as that encountered by the Southern Railway in its efforts to publish new rates for shipment in innova- tive ‘Big John’ cars it had developed” (App. A at A-22). The Court concluded that the legislative history of Section 10729 confirmed that the purpose of this provision was “to remedy the serious regulatory lag hampering rail rate cases” (id. at A-23). For these reasons, the Court of Appeals held that any accession in the Commission’s request for remand “would be an obvious threat to the procedural integrity of §10729 and the concerns of Congress” (id.), and, indeed, that the requested remand was “barred by §10729” (id.). Notwithstanding its determination that “voluntary remand” to the Commission and reconsideration by the Commission of its decision would be contrary to the express terms of Section 10729 18 and the intent of Congress in enacting that section, the Cou Appeals held that on court-ordered remand “the Commis shall have authority to take whatever action our opi requires” —including, possibly, setting aside the carriers’ ca| incentive rate (App. A at A-25). The Court of Appeals reas: as follows (id.): “To have judicial review of an agency action with no thority in that agency to correct errors is a futile exer We do not perceive in the legislative history of §10729 ‘clear and convincing evidence’ necessary to conclude Congress intended to restrict normal judicial review, Du v. Bachowski, 421 U.S. 560, 567... (1975), Abbott Lab tories, Inc. v. Gardner, 387 U.S. 136, 141... (1967), W Congress wished to give railroads assurances that if made substantial investments, rates associated with thes vestments would remain undisturbed for 5 years, there hint it wished to protect erroneous Commission action, As shown below, the Court of Appeals’ treatment of reviewability issue is fundamentally incorrect. The precise issue is not whether the Court of Appeals ¢ review the Commission's decision; it is whether, if it does re and set aside the Commission's decision and remands the ca the Commission for further consideration, the Commission « then suspend or set aside the carriers’ rate within the prot 5-year period. The Court of Appeals treated the Railroad’ gument that the Commission could not on remand suspend ¢ aside their rate as tantamount to an argument that judicial re was unavailable at all, reasoning that if the Commission coul correct errors on remand (including suspending or setting carrier rates if a corrected decision required such a result), judicial review and remand would be pointless. Although it i: that construction of Section 10729 as precluding the Commi on remand from setting aside carriers’ rate for 5 years would the range of consequences flowing from judicial review, si 19 construction would not preclude or negate judicial review. Ind an important function of a reviewing court in considering a C mission decision involving capital incentive rates is to give pre effect to the express terms of Section 10729. More fundamentally, however, even if such a limitation u the consequences of judicial review is regarded as identical to | cluding judicial review altogether, as the Court of App regarded it, the Court of Appeals’ decision is incorrect, anc reliance upon this Court's decisions as to non-reviewabilit wholly misplaced. In Dunlop v. Bachowski, 421 U.S, 560 (1975), and reli cases, this Court held that “a final agency action” is review: “unless there is a persuasive reason to believe that such was the purpose of Congress.” /d. at 567. See Morris v. Gressette, U.S. 491, 501 (1977); Abbott Laboratories v. Gardner, 387 \ 136, 140 (1967). The reviewing court therefore must detern whether “Congress has in express or implied terms preclu judicial review. .. .”” Barlow v. Collins, 397 U.S. 159, 165 (1S (emphasis supplied), and “whether nonreviewability can fairl inferred,” (id. at 166) within “the context of the entire legisla scheme.” Abbott Laboratories v. Gardner, supra, 387 U.S. at For example, in Morris v. Gressette, supra, this Court inqu into the reviewability of the Attorney General's failure to ir pose a timely objection under §5 of the Voting Rights Act of | to a change in the voting laws of South Carolina. This C found that the language of §5 of the Voting Rights Act did no plicitly preclude judicial review of the Attorney General's ¢ sion either to object or not object to any changes in the voting of a jurisdiction subject to the Act. This Court also found there was no “legislative history bearing directly on the issi reviewability of the Attorney General's actions under $5.” U.S. at 503. Nevertheless, the Court found that the Atto General's initial decision to refrain from objecting to S 20 Carolina's voting plan was not subject to judicial review a later, non-timely objection made by the Attorney Gen invalid, The Court premised its decision on “legislative m which indicated a desire to provide the States with a °‘ method of complying with §5 (éd.). Recognizing that decision did not bar subsequent constitutional challer Court found that “there also was to be ‘no dragging out’ « traordinary federal remedy beyond the period specifie statute” (id, at 504; emphasis supplied). Thus, the Court ed that “[s]ince judicial review of the Attorney General’ would unavoidably extend this period, it is necessarily ed.” Jd. at 504-05, The structure of the statutory scheme involved in th case, as well as its objectives and legislative history," cle stitute “persuasive reason to believe” that Congress inter actions of the Commission permitting qualifying capital rates to become effective would not be subject to further | as to the reasonableness of the rate before reviewing ¢ upon remand, before the Commission. First, the very legislative history which the Court of relied upon in denying the motion of the Commission fo tary” remand, demonstrates that Congress was just as © with the prospect of prolonged rate litigation before the | "Analyzing these same factors in Dunlop v. Bachowski, . “the structure of the statutory scheme, its objectives, [and] its history .. ."~-this Court was unable to find “any congression to prohibit judicial review.” /d. at 567. Indeed, this Court that (/d.): “there is not even the slightest intimation that Con thought to the matter of the preclusion of judicial review reasonable inference is that the possibility did not oc Congress.’ Wirtz v. Bottle Blowers Assn., 389 US. (1968).” As shown below, the circumstances before this Court in Bachowski are in stark contrast to the circumstances prese! instant case, 21 sion on remand from the Courts of Appeals as with the prosp such litigation before the Commission in the first instanc shown above, the Court of Appeals recognized that the capit centive provision of the Interstate Commerce Act grew out « “Big John” litigation discussed in the legislative history of tion 206 of the 4-R Act. And as the Court of Appeals also r nized, the history of that litigation and the “difficulties” it e: dered for Southern Railway—some four years of uncertair to the rates it would be permitted to charge for its “Big J hopper car services—was a history of litigation at the Con sion, in the appellate courts, and later at the Commission | (App. A at A-22 n.26). Indeed, it readily may be seen fro1 history of that litigation that the delay and uncertainty rienced by Southern Railway was largely attributable to phase of the litigation before the courts on review and befo! Commission on court-imposed remand (id.)." "This history may be summarized as follows: The Commission first approved the rates filed by the Southern jumbo hopper car services in Grain In Multiple-Car Shipments— Crossings to the South, 318 1.C.C. 641 (1963). Parties protesti) proposed rates failed to obtain a preliminary injunction from th trict Court for the Northern District of Alabama (August 3, 196: a single judge of the Fifth Circuit granted a temporary restraining on the same day. After a full Fifth Circuit panel denied a restr order pending the decision of the appeal on August 8, Mr. Justice granted a stay pending the presentation and disposition of a petit certiorari (Arrow Transportation Co. v. Southern Railway C< U.S. 658, 662 fn. 4 (1963)). Thereafter, the Fifth Circuit affirm District Court's ruling that it lacked jurisdiction (Arrow Transpo: v. Southern Railway Co., 308 F.2d 181 (1962)), and stayed the is of its mandate pending consideration by this Court. The Court peals decision was affirmed by this Court in Arrow, supra. The full Commission reopened the proceeding prior to this ¢ decision, and reversed its initial decision. Grain In Multiple-Car ments— River Crossings to the South, 321 1.C.C, 582 (1963). The sion was set aside and permanently enjoined by the District Co the Southern District of Ohio in Cincinnati, N.O. & T.P. Ry. Co. ed States, 229 F.Supp. 572 (1964). This Court vacated the judgm« (footnote continued on following page) 22 Second, the Court of Appeals’ conclusion that there is no “clear and convincing evidence” that Congress intended to limit the scope of judicial review of Commission decisions in capital incen- tive rate cases to preclude further litigation as to the reasonable- ness of an effective qualified capital incentive rate, cannot be reconciled with the plain terms of Section 10729; nor can it be reconciled with the Court of Appeals’ own holding that in enact- ing that section “Congress wished to give railroads assurances that if they made substantial investments, rates associated with those investments would remain undisturbed for five years, . . .” (App. A at A-25.) The disincentives to capital investment which Congress sought to eliminate by providing that a capital inventive rate could not be suspended or set aside for a period of five years after it had become effective, manifestly would not be eliminated if the Court of Appeals were permitted to remand to the Commis- sion for further consideration and action issues as to the lawful- ness of a qualifying capital incentive rate, The evil which Congress sought to eliminate by enacting the capital incentive provision of the Act was the uncertainty which prolonged litigation over the reasonableness of rates—at the Commission and appellate levels-—had engendered in the past (e.g., in the “Big John” case), and might engender in the future, The Court of Appeals’ conclusion that it was nonetheless em- powered to order the Commission to reexamine a qualified capital incentive rate after it had become effective, to “correct errors,” and possibly to set aside such a rate, not only is contrary to the terms of the statute, but also would frustrate the intent of Congress in enacting the capital incentive provisions of the Act, (footnote continued from previous page) remanded the case to the District Court in a one-page per curiam opin- ion, Arrow Transportation Co, v. Cincinnati, N.O. & T.P. Ry. Co., 379 U.S. 642 (1965). The District Court then remanded the case to the Commission on February 12, 1965, in accordance with this Court's in- structions, and a third decision approving the proposed rates was issued by the Commission on August 30, 1965 (325 LC.C, 752 (1965)). 23 il. Even If the Court of Appeals had Jurisdiction to Order the Commission to Re-examine a Qualified Capital In- centive Rate Which Had Become Effective, the Court of Appeals Erred in Applying an Inappropriate Standard of Review As to the Commission’s Market Dominance Findings For the reasons set forth above, Petitioners believe that the Court of Appeals lacked jurisdiction to remand for further Com- mission consideration issues as to the Commission's jurisdiction over the maximum reasonableness of a capital incentive rate which qualified as such under Section 10729, However, even if the Court of Appeals had jurisdiction to remand such issues to the Commis- sion for reconsideration, the Court manifestly erred in applying a standard of review which was inappropriate to the Commission's findings made under Section 10729 and which conflicts with the standard held to be appropriate to the review of such a determina- tion by the Court of Appeals for the District of Columbia Circuit in Houston Lighting & Power Co. v. United States, supra. In Houston Lighting and Power, the first judicial review proceeding involving a Commission determination as to a capital incentive rate filed under Section 10729 of the Act, the Court of Appeals for the District of Columbia Circuit, although disagree- ing with petitioners therein that it did not have jurisdiction to review a Commission determination approving a qualifying capital incentive rate once that rate had become effective, held that the appropriate standard of review required that extra deference be paid to the Commission's determination, The District of Columbia Circuit began its analysis of the standard of review appropriate to a capital incentive rate determination by the Commission by not- ing that as to any Commission rate determination, the courts are required to “apply a deferential standard” (606 F.2d at 1145): “Such decisions ‘are not to be disturbed by the courts ex- cept upon a showing that they are unsupported by evidence, 24 were made without a hearing, exceed constitutional limits, or for some other reason amount to an abuse of power,’ Man- ufacturers R. Co, v, United States, 246 U.S, 457, 481, 38S. Ct, 383, 389, 62 L.Ed, 831 (1918), As this Court has ob- served, ‘The process of rate making is essentially empiric, The stuff of the process is fluid and changing—the resultant of factors that must be valued as well as weighed, Congress has therefore delegated the enforcement of transportation policy to a permanent expert body and has charged it with the duty of being responsive to the dynamic character of transportation problems,’ Board of Trade of Kansas City v, United States, 314 U.S, 534, 546, 62 S.Ct. 366, 86 L.Ed, 432 (1942). Atchison, T. & S. F. Ry. v. Wichita Board of Trade, 412 U.S. 800, 806, 93 S.Ct, 2367, 2374, 37 L.Ed,2d 350 (1973) (plurality opinion),” However, the District of Columbia Circuit went on to hold that at least two factors unique to capital incentive rate determina- tions required an extra measure of deference in reviewing such determinations (/d.): “The congressional interest in encouraging large-scale in- vestments by minimizing regulatory uncertainty, coupled with sensitivity to the time pressure under which the Com- mission must operate in capital incentive proceedings, sug- gest that this standard be applied with an extra dollop of deference, While modification of the formulation of the stan- dard is not necessarily called for, our review will be directed primarily at ascertaining that the Commission's decision reflects meaningful consideration of the salient factors and comports with applicable law.” (Emphasis supplied. ) The Court of Appeals below, although its opinion recites the principle that the standard of review in any rate proceeding is “a narrow one” (App. A at A-12), failed to recognize the importance of exercising deference, let alone an extra measure of deference, with respect to the Commission's findings as to market domi- nance. Indeed, far from recognizing the propriety of restricting its review to “ascertaining that the Commission's decision reflects meaningful consideration of the salient factors and comports with 25 applicable law,” the Court of Appeals intensively scrutinized the Commission’s market dominance findings in an analysis extend- ing to 43 pages of printed text (App. A, at A-25 - A-68)—far more pages than CP&L, the party with the burden of proof as to this issue, had devoted in its own evidentiary presentation before the Commission. Indeed, CP &L in its initial evidentiary presen- tation to the Commission had confined its treatment of market dominance to a single footnote. When Petitioners replied by sub- mitting detailed evidence that they lacked market dominance, CP &L responded by accusing Petitioners of “unmitigated gall,” but provided no supporting evidence or analysis." The Commis- sion found that CP&L had “presented very /ittle evidence on the market dominance issue” (App. C at C-10), but proceeded in its decision to examine carefully the evidence submitted by both parties—including rate/cost relationships (id., at C-10), the mar- ket dominance presumptions (id.at C-11 - C-12), CP&L’s “con- siderable flexibility” under its coal supply contract, and the exis- tence of geographic or source competition (id., at C-12 - C-13), and the utility’s investment in rail-related equipment (id.at C-13). Based on its analysis of these factors, the Commission found (id.at C-14): “The evidence does not demonstrate that respondent rail carriers have experienced market dominance in their nego- tiations with Central Power and Light. Protestant has failed to meet its initial burden of showing market dominance.” The Court of Appeals—instead of “ascertaining that the Com- mission's decision reflects meaningful consideration of the salient factors” —placed the Commission's decision under the judicial "An important factual issue was the extent to which CP&L was “locked into” use of particular railroads by its coal supply contract. Petitioners submitted the contract into evidence, together with an exten- sive analysis of its terms. CP&L did not take the matter serious- ly—devoting to this issue only 4% pages of argument and one page of testimony out of its 829-page submission. As to geographic competition, CP&L presented no facts, contending that such competition was irrelevant. 26 microscope, re-examined the evidence, made its own factual de- terminations as to each of the market dominance issues, conclud- ed that the Commission’s findings differed from its own, and remanded the case to the Commission for reconsideration with extraordinarily-detailed and highly improper instructions as to how to proceed." In so doing, it committed serious errors as to particular factual issues—errors which it would not have made if it had left the detailed assessment of the evidence to the agency to whose expertise and judgment such matters are entrusted. “For example, see the Court’s detailed instructions as to the necessary analysis and findings with respect to rate bureau activity (App. A at A-26 - A-29); its instructions to reconcile the decision here with prior decisions dealing with market dominance issues (id. at A-30 - A-31); its enormously complicated and detailed instructions as to cost accounting issues (id. at A-31 - A-48), and its instructions to the Commission to cal- culate costs in certain specified ways (id. at A-37, A-40), or to answer particular highly-technical costing questions (id. at A-42, A-46, A-47); its extended analysis of the evidence bearing on the existence of competitive alterfatives (id. at A-49 - A-56), and its instructions to the Commission for dealing with these matters on remand (id. at A-52, A-56); and its similarly extended analysis of the evidence of record bear- ing on the existence of geographic competition (id. at A-64 - A-68). CONCLUSION Petitioners in this case have made huge investments—in the tens of millions of dollars—in reliance on a statutory guarantee that if their proposed capital incentive rate was not found unlaw- ful by the Commission within the specified 180-day period, then that rate could not subsequently be suspended or set aside for 5 years. The Commission has determined that their rate qualifies for that special statutory protection, and the Court of Appeals sustained that determination. Petitioners kept their part of the bargain by making the proposed investments. Now the statutory guarantee is about to be abrogated. To prevent that from happen- ing, this Court should grant the petition for a writ of certiorari, and review and reverse the decision of the Court of Appeals. MILTON E. NELSON, JR. RICHARD E, WEICHER 80 E. Jackson Blvd. Chicago, Illinois 60604 Attorneys for The Atchison, Topeka and Santa Fe Railway Company SAMUEL R. FREEMAN KENDALL T. SANFORD 1515 Arapahoe Street Denver, Colorado 80217 Attorneys for The Denver and Rio Grande Western Railroad Company STEWART E,. VAUGHN One Market Plaza San Francisco, California 94105 Attorney for Southern Pacific Transportation Company June 5, 1981 Respectfully submitted, R. EDEN MARTIN LAWRENCE A. MILLER JOHN WILL ONGMAN MICHAEL G. LEDERMAN 1730 Pennsylvania Ave., N.W. Washington, D.C. 20006 HOWARD J. TRIENENS RICHARD J. METZGER One First National Plaza Chicago, Illinois 60603 Attorneys for Petitioners S-1 STATUTORY APPENDIX Section 206 of the 4-R Act as it was initially codified at 49 U.S.C. §15(19) provided as follows: “Notwithstanding any other provision of law, a common carrier by railroad subject to this part may file with the Com- mission a notice of intention to file a schedule stating a new rate, fare, charge, classification, regulation, or practice whenever the implementation of the proposed schedule would require a total capital investment of $1,000,000 or more, individually or collectively, by such carrier, or by a shipper, receiver, or agent thereof, or an interested third par- ty. The filing shall be accompanied by a sworn affidavit set- ting forth in detail the anticipated capital investment upon which such filing is based. Any interested person may request the Commission to investigate the schedule proposed to be filed, and upon such request the Commission shall hold a hearing with respect to such schedule. Such hearing may be conducted without answer or other formal pleading, but rea- sonable notice shall be provided to interested parties. Unless, prior to the 180-day period following the filing of such notice of intention, the Commission determines, after a hearing, that the proposed schedule, or any part thereof, would be un- lawful, such carrier may file the schedule at any time within 180 days thereafter to become effective after 30 days’ notice. Such a schedule may not, for a period of 5 years after its effective date, be suspended or set aside as unlawful under section 2, 3, or 4 of this part, except that the Commission may at any time order such schedule to be revised to a level equaling the variable costs of providing the service, if the rate stated therein is found to reduce the going concern value of the carrier.” Upon the recodification of the Interstate Commerce Act in 1978, 49 U.S.C. §15(19) was recodified at 49 U.S.C. §10729 and provides as follows: “(a) A proposed rate, classification, rule, or practice for transportation by a rail carrier subject to the jurisdiction of the Interstate Commerce Commission under subchapter I of S-2 chapter 105 of this title requiring a total capital investme of at least $1,000,000 to implement shall be established a) become effective under this section. This section appli whether the investment is made individually or collective by the carrier or by a shipper, receiver, or agent of any them, or by a third party. “(b) A rail carrier may file a notice of intent to establist rate, classification, rule, or practice under subsection (a) this section with the Commission. The notice must includ« sworn affidavit detailing the anticipated capital investme! Unless the Commission after holding a proceeding und subsection (c) of this section, decides by the 180th day af the notice is filed that the proposed rate, classification, ru or practice would violate this subtitle, the carrier may esta lish that rate, classification, rule, or practice at any time di ing the next 180 days, and it may become effective 30 da after it is established. Once a rate, classification, rule, practice becomes effective under this section, the Comm sion may not, for 5 years, suspend or set it aside as violati section 10701, 10726, 10741-10744, or 11103 of this tit However, the Commission may order the rate, classificatic rule or practice to be revised to a level equal to the varial costs of providing the transportation when the Commissi finds the level then in effect reduces the going concern val of the carrier. “(c) On request of an interested person, the Commiss| shall hold a proceeding to investigate and determine whet the rate, classification, rule, or practice proposed to be esti lished under this section complies with this subtitle. 1 Commission must give reasonable notice to interested part before beginning a proceeding under this subsection but m act without allowing an interested party to file an answer other formal pleading.” Section 210 of the Staggers Rail Act of 1980 provides as | lows: “(a) Section 10729 of title 49, United States Code, : the item relating to such section in the section analysis chapter 107 of such title, are repealed. S-3 “(b) Notwithstanding any other provision of law, any rate established by a rail carrier under section 10729 of title 49, United States Code, prior to the effective date of this Act shall remain in effect in accordance with its terms, but for no longer than 5 years after the date it became effective, unless the parties otherwise agree. However, the Interstate Com- merce Commission may, during the period such a rate is in effect, order such rate revised to a level equal to the in- cremental cost of providing the transportation if the Com- mission finds that the level then in effect reduces the going cor » value of the rail carrier.” APPENDIX A CENTRAL POWER AND LIGHT CO., Petitioner, v UNITED STATES of America and Interstate Commerce Commission, Respondents. STATE OF TEXAS, Petitioner, v. UNITED STATES of America and Interstate Commerce Commission, Respondents. Nos. 80-1068, 80-1172. United States Court of Appeals, Fifth Circuit. Dec. 15, 1980. William L. Slover, Washington, D.C., Cicero C, Sessions, New Orleans, La., for Central Power and Light Co. Robert Lewis Thompson, Dept. of Justice, James Laskey, John J. Powers, III, Joseph H. Dettmar, I.C.C., Washington, D.C., for the U.S. and I.C.C. Paul M. Haygood, New Orleans, La., Howard J. Trienens and Richard J. Metzger, Chicago, IIl., R. Eden Martin and John Will Ongman, Washington, D.C., for Denver and Rio Grande West- ern R.R. Co., The Atchison, Topeka and Santa Fe R.R. Co. and Southern Pacific Transp. Co. Robert N. Kharasch, Gallans, Kharasch, Calkins & Short, Olga Boikess, Washington, D.C., for Colowyo Coal Co. David Hughes, Stuart Fryer, Carl E. Glaze, Asst. Attys. Gen., Austin, Tex., for the State of Tex. Petitions for Review of an Order of the Interstate Commerce Commission. Before HILL, RUBIN and ANDERSON, Circuit Judges. A-2 R. LANIER ANDERSON, III, Circuit Judge: These two consolidated petitions for review of an order Interstate Commerce Commission (“ICC” or “Commissio1 volve a single set of facts and require that this circuit for tt time address a provision added to the Interstate Commer by the Railroad Revitalization and Regulatory Reform ; 1976 (“Reform Act’’),' and regulations promulgated by the mission interpreting a second provision added by the Refor1 The new statutory provision requiring interpretation, Sectic of the Reform Act, now revised and codified at 49 U.S § 10729,’ provides for expedited review by the ICC of capi centive rates filed by rail carriers subject to the ICC’s jurisd This section further provides that if a capital incentiv becomes effective either through Commission inaction « proval, “the Commission may not, for 5 years, suspend o1 aside as violating” specified provisions of the Interstate merce Act. § 10729(b). The regulations requiring interpre are found at 49 C.F.R. 1109.1 and establish rebuttable pre 'Pub.L. No 94 210, 90 Stat. 41 (1976) revised the Interstate merce Act, then codified at 49 U.S.C.A. §§ 1 et seq. Pub.L. No. § 92 Stat. 1337 (1978) subsequently revised and recodified, witho stantive change, the Interstate Commerce Act at 49 U.S.C.A. §§ et seq. Reference hereinafter shall be either to sections of the Int Commerce Act as recodified, or to specified sections of the Reform Since the drafting of this opinion, the Staggers Rail Act o! Pub.L. No. 96 448, 94 Stat. 1895, has been enacted, further am the Interstate Commerce Act as it applies to the rail industry. Re! to sections of the Interstate Commerce Act shall be to the provis they read before the Staggers Rail Act of 1980. 49 U.S.C.A. § 10729 (West Supp. 1980) reads in full: § 10729. Rail carriers; incentive for capital investment (a) A proposed rate, classification, rule, or practice for tri tation by a rail carrier subject to the jurisdiction of the Int Commerce Commission under subchapter I of chapter 105 title requiring a total capital investment of at least $1,000 implement shall be established and become effective under t tion. This section applies whether the investment is mi {footnote continued on next page.) A-3 tions of “market dominance” as defined by § 10709(a).’ A pre requisite to the Commission’s having jurisdiction to approve ¢ disapprove a capital incentive rate is that the carrier have marke dominance over the transportation to which the rate applie: § 10709(c).* (footnote continued from previous page.) dividually or collectively by the carrier or by a shipper, receiver, ¢ agent for any of them, or by a third party. (b) A rail carrier may file a notice of intent to establish a rat classification, rule, or practice under subsection (a) of this sectio with the Commission. The notice must include a sworn affidavit di tailing the anticipated capital investment. Unless the Commissio after holding a proceeding under subsection (c) of this sectio1 decides by the 180th day after the notice is filed that the propose rate, classification, rule, or practice would violate this subtitle, th carrier may establish that rate, classification, rule, or practice ¢ . any time during the next 180 days, and it may become effective 3 . days after it is established. Once a rate, classification, rule, or prac tice becomes effective under this section, the Commission may no for 5 years, suspend or set it aside as violating section 10701, 10721 10741 10744, or 11103 of this title. However, the Commission ma order the rate, classification, rule, or practice to be revised to a lev: equal to the variable costs of providing the transportation when th Commission finds the level then in effect reduces the going concer value of the carrier. (c) On request of an interested person, the Commission sha hold a proceeding to investigate and determine whether the rat classification, rule, or practice proposed to be established under th section complies with this subtitle. The Commission must give rei sonable notice to interested parties before beginning a proceedin under this subsection but may act without allowing an intereste party to file an answer or other forma! pleading. ‘49 U.S.C.A. § 10709(a) (West Supp.1980) reads in full: (a) In this section, ‘market dominance’ means an absence of effe: tive competition from other carriers or modes of transportation fi the transportation to which a rate applies. *49 U.S.C.A. § 10709(c) (West Supp.1980) reads in pertinent part (c) When the Commission finds in any proceeding that a rail ca rier proposing or defending a rate for transportation has mark dominajice over the transportation to which the rate applies, it ma then determine that rate to be unreasonable if it exceeds a reaso! able maximum for that transportation. A-4 The petitioners challenge the ICC’s decision dated Jz 1980, in which the Commission refused to review a cap tive rate proposed by the railroad intervenors for the ti tion of coal because the Commission found no market d over that transportation. They claim that the ICC er finding the railroads’ proposed rate qualified for conside capital incentive rate under § 10729, (2) finding that thi did not possess market dominance with respect to the transportation of coal, (3) finding that even if the presu: market dominance had been triggered, such presump' rebutted by the existence of geographic competition, (4 adequately state the rationale of its decision, (5) failin any findings with respect to discriminatory pricing, an ing to require the railroads to produce evidence wi possession. These petitions, through no fault of petitioners, | before this court in a most unusual and unsatisfactor The Commission has declined to file a brief in support sion. Instead, after deciding on April 30, 1980, thai merited further thought, the Commission moved this c cline to address the merits and to remand these petition might institute a reconsideration on the record as it 1 (Hereinafter, the phrase “voluntary remand” shall re ICC requested remand without consideration of the m: the phase “court generated remand” shall refer to a re! consideration of the merits.) The petitioners and the rai forces against their former mediator in opposing this m voluntary remand, but for different reasons. The railr that a voluntary remand is neither necessary nor pert moreover, that any court-generated remand is limited to what the Commission may do to correct any legal petitioners argue that a voluntary remand is not perm § 10729, but that a court-generated remand is necess: propriate in this case. A-5 We conclude that we cannot grant the Commission’s for a voluntary remand, but must address the merits of the tions. We find that the railroad’s proposed rate does qua consideration as a capital incentive rate. However, we vac Commission’s findings on market dominance and geo, competition and remand. Our discussion of the issues will proceed according to lowing outline: I. Facts II. Statutory Framework III. Standard of Review IV. Qualification for Treatment Under § 10729 V. Voluntary Remand VI. Scope of Commission’s Authority Upon Ren VII. Presumptions A. Rate Bureau Presumption B. Market Share Presumption C. Revenue/Cost Presumption (i) Use of Additives (ii) Rate of Return in Incremental Plant Investment Additive (iii) Double Count D. Substantial Investment Presumption (i) Significance of One Terminating | (ii) Finding of Competing Carriers Axial to Coleto Creek Movement (iii) Finding of Alternative Domestic § (iv) Finding of Alternative Modes eographic Competition Statutory Restriction on Consideration graphic Competition Restriction on Consideration of Geo Competition Within Regulations Commission's Finding of Geographic C tion After the Colowyo Contract Availability of Geographic Competition the Colowyo Contract IX. Section 10741 Attack on Rate as Discrim and Railroads’ Duty to Produce Evidence VIII. 59 9 B >O A-6 I. FACTS Central Power & Light Company (“CP&L”) is an electric utility engaging in the generation, transmission, and sale of elec- tric power to 200 communities in south Texas including the City of Corpus Christi. Since its inception in 1916, CP&L has relied upon oil and gas to fuel its boilers. Following the OPEC oil embargo in 1973 and the passage of legislation regulating the use of oil and gas as a boiler fuel, CP&L decided to build a coal fired generating plant at a site near Coleto, Texas. This plant will eventually consist of two generating units. Each unit has a gener- ating capacity of 550,000 kilowatts and will require 30,000 tons of coal per week, or approximately 1,500,000 tons annually. The first unit has been completed and has undergone preliminary start up operations. It was scheduled to go on line the first quarter of 1980.° The second unit is scheduled for completion in 1988. In 1974, CP&L began investigating possible sources of coal to supply the first unit at Coleto Creek. The railroads have placed in the record certain evidence concerning alleged contacts CP&L had with various domestic mines as it began looking for a source of coal. Among the sources allegedly contacted were mines in Wyoming, Colorado, Texas and Kentucky as well as in foreign locales. Although CP &L was concerned at what it considered un- reasonably high prices quoted by carriers and despite not having reached agreement with any carrier on a price for transporting coal, CP&L entered in December, 1976, a 25-year contract with Colowyo Coal Company (“Colowyo”) for a total of 30 million tons of low sulfur coal mined in Axial, Colorado.* *The Justice Department in its brief states that the first unit has begun fulltime operation. ‘CP&L explains that it felt compelled in 1976 to enter into the Colowyo contract in order to insure a reliable source of suitable coal for its new plant. It stated that after the Commission's initial decision in San Antonio, Texas v. Burlington Northern, Inc., 355 1.C.C. 405 (1976), aff'd 555 F.2d 637 (8th Cir. 1977), reopened 359 1.C.C. (1978), (footnote continued on next page). A-7 The transportation of the coal from Axial necessitates a rail movement in unit coal trains’ beginning with the Denver & Rio Grande Western Railroad Company (“D&RGW”), the only rail carrier serving the Axial mine. D&RGW carries the coal 375 miles, where the Atchison, Topeka and Santa Fe Railway Com- pany (“Santa Fe”) continues the movement for the next 865 miles. The Southern Pacific Transportation Company (“SP”’) is the only carrier serving the plant at Coleto Creek and completes the final 156 miles of the movement. (D&RGW, Santa Fe and SP are hereinafter sometimes collectively referred to as “railroads” or “carriers”’). After entering its contract with Colowyo, CP&L was still un- able to negotiate a mutually acceptable price with the railroads. In 1979, CP&L began operating the first unit at Coleto Creek on a preliminary stari up basis, using South African coal shipped to the port at Corpus Christi, Texas, and then trucked from the port to the Coleto Creek plant, a distance of 88 miles. CP & L used this South African coal for its start up operations because its delivered price is substantially less than the delivered price of the Colowyo coal at the rates requested by the railroads. Because the movement from Axial would begin with the start- up of full scale operation in 1980, the railroads broke the impasse with CP&L by filing on July 19, 1979, their Notice of Intention to file a proposed capital incentive rate under § 10729 for the movement at $20.85 per ton in shipper supplied cars. On August 9, 1979, CP&L filed a protest, contending that the proposed rate did not qualify the capital incentive rate treatment, that the rate (footnote continued from previous page). reconsidered 361 1.C.C. 482 (1979), vacated and remanded sub nom San Antonio v. United States, 631 F.2d 831 (D.C. Cir. 1980), it believed it could look to the ICC to establish a reasonable rate if the railroads persisted in their demands. ’A unit coal train typically consists solely of hopper cars carrying only coal. A-8 was unlawfully high under § 10709, and that the rate was unlaw- fully discriminatory under § 10741. The State of Texas was granted leave to intervene in the proceedings before the Commis- sion in support of CP&L. After an investigation of the proposed rate, the Commission concluded that it had no jurisdiction over the question of the rate reasonableness because CP & L had failed in its burden of proving that the carriers have market dominance. Both Texas and CP&L have petitioned this court for review of this decision, which petititions have been consolidated and ex- pedited. The Department of Justice (“Justice”) represents the government in this petition as statutory respondent.’ Il. STATUTORY FRAMEWORK The 94th Congress in 1976 passed the Reform Act in order to restore the financial stability of the railway system, to enable rail- roads to rehabilitate and maintain their physical facilities, to improve their operation and structure, and to promote their re- vitalization.’ The Reform Act contains two major reforms in the regulatory process to implement this goal of revitalization. First, it mandates the deregulation of rates which were not the product of market dominance. Second, it imposes time limits on the Com- mission in considering rail rate proposals. [1] The railroads in this case chose to proceed under the capital incentive rate provision added to the Interstate Commerce Act by ‘the Reform Act and now codified at § 10729. This provision is an "See 28 U.S.C.A. § 2323 (West Supp.1980). *Section 101(a) of the Reform Act reads in pertinent part: Sec. 101(a) Purpose. It is the purpose of the Congress in this Act to provide the means to rehabilitate and maintain the physical facili- ties, improve the operations and structure, and restore the financial stability of the railway system of the United States, and to promote the revitalization of such railway system, so that this mode of trans- portation will remain viable in the private sector of the economy and will be able to provide energy-efficient, ecologically compatible transportation services with greater efficiency, effectiveness, and economy, ... A-9 important part of Congress’ attempt to expedite rail rates proposed to the Commission. Section 10729 provides that a rail carrier may file a notice of intention to file a schedule establishing a new rate “requiring a total capital investment of at least $1,000,000 to implement.” The procedural advantage to carriers in filing under this section is that strictly compressed time limits are imposed upon the parties for the presentation of their opposi- tion to the proposed rate. Under § 10729, unless the Commission determines within 180 days after filing the notice that the pro- posed rate would be unlawful for any reason under the Interstate Commerce Act, the rail carrier may publish the rate, which may not then be suspended or set aside as unlawful for a period of five years from its effective date (except for situations not pertinent here). Section 10729 gives an additional advantage to the carriers in that in any hearing pertaining to a capital incentive rate the burden of proof is upon the protestant. Ex parte No. 327, Rate In- centive for Investment Capital, 353 1.C.C. 754, 767 (1977)." CP&L and Texas chose to attack the proposed rate under two sections. First, they attacked the rate under § 10709(c) as exceed- ing “‘a reasonable maximum.” As part of the attempt to de- regulate rail rates, Congress established as a prerequisite for a finding that a rate exceeds a reasonable maximum a requirement that the protestant must establish the carrier has “market domi- nance over the transportation to which the rate applies.” “The alternative section under which the railroads could have filed their proposed rate is § 10707. This section also was added to the Inter- state Commerce Act by the Reform Act. See Reform Act, Pub.L. 94 210, § 202(e), 90 Stat. 31 (1976). Section 10707 is the section under which investigation of a proposed rail rate would normally be conducted, and is the only section authorizing investigation of a rail rate that has al- ready become effective. It does not have a capital investment prerequi- site. It does impose time limits on the Commission in conducting a proceeding, though not as stringent as the time limits of § 10729. See § 10707(b)(1). A significant difference from § 10729 is that in a § 10707 proceeding, the burden is on a carrier proposing a changed rate, clas- sification, rule or practice to prove the change is reasonable. § 10707(e). A-10 § 10709(c). “Market dominance” is defined as “an absence of effective competition from other carriers or modes of transporta- tion for the transportation to which a rate applies.” § 10709(a). Section 202(b) of the Reform Act" requires the Commission to establish rules, standards and procedures to determine when a carrier possesses market dominance over a service rendered. This section requires the Commission to design such rules to “provide for a practical determination without administrative delay.” In response to this requirement, the Commission in a continuing proceeding, entitled Ex parte No. 320, Special Procedures for Findings of Market Dominance,” promulgated the regulations now found at 49 C.F.R. § 1109.1 (1979). These regulations estab- lish four rebuttable presumptions to aid the Commission in ascer- taining whether market dominance exists. 49 C.F.R. § 1109.1(f) and (g).” The rebuttable presumptions are (1) that “the rate is "This section was omitted from the recodification as it had been executed by 1978. "Ex parte No. 320, Special Procedures for Findings of Morket Dominance, consists of a series of proceedings of the Commission con- struing and modifying its regulations concerning market dominance promulgated at 49 C.F.R. 1109.1. The initial decision was an Interim Report inviting comments on proposed regulations to determine market dominance. Ex parte No. 320, 353 1.C.C. 874 (1976) (hereinafter “Ex parte No. 320, Interim Report’’). After receiving comment, the present regulations were promulgated in a Final Report. Ex parte No. 320, 355 1.C.C. 12 (1976) (hereinafter “Ex parte No. 320, Final Report’’). in Atchison, Topeka & Santa Fe Railway Co. v. ICC, 580 F.2d 623 (D.C. Cir. 1978), the District of Columbia Circuit upheld the regulations, but remanded for clarification of one of the regulations. Ex parte No. 320, 359 L.C.C. 735 (1979) (hereinafter “Ex Parte No. 320, Clarification’’) contains that clarification. The ICC has only recently proposed new regulations on market dominance and has requested comments on proposed amendments. Ex parte No. 320, 45 F.R. 3353 (January 17, 1980. "49 C.F.R. § 1109.1(f) and (g) (1979) read in full: (f) In a proceeding involving a determination as to market domi- nance wherein the evidence adduced establishes that the rate in is- sue has been discussed, considered or approved upon a rate bureau (footnote continued on next page). A-11 issue has been discussed, considered or approved upon a rate bureau agreement,” (2) that “the proponent carrier has handled 70 percent or more of the involved traffic or movement during the preceding year,” (3) that “the rate in issue exceeds the variable cost of providing the service by 60 percent or more,” and (4) that the “affected shippers or consignees have made a substantial in- vestment in rail related equipment or facilities which prevents or make impractical the use of another carrier or mode.” The Com- mission in the case at hand found none of these rebuttable pre- sumptions to have been met, and concluded that no market domi- nance existed. Accordingly, it found that it had no jurisdiction to determine whether the rate was unreasonably high. CP &L attacks this finding, contending that each of the presumptions applies." (footnote continued from previous page). agreement filed with the Commission pursuant to section Sa or 5b of the Interstate Commerce Act, a rebuttable presumption will arise that a carrier participating in the rate or in such discussion or consideration does not provide effective competition to the propo- nent rail carrier for the involved traffic or movement. (g) In a proceeding involving a determination as to market domin- ance wherein the evidence adduced establishes one of the following situations, a rebuttable presumption that the carrier whose rate is in issue has market dominance over the involved traffic or movement will arise; (1) Where the proponent carrier has handled 70 percent or more of the involved traffic or movement during the preceding year; the market share of the proponent will be deemed to include the share of any affiliates, and of any carrier participating in the rate or with whom the proponent carrier has discussed, considered, or approved the rate in issue; (2) Where the rate in issue exceeds the variable cost of providing the service by 60 percent or more; and (3) Where affected shippers or consignees have made a substantial investment in rail-related equipment or facilities which prevent or make impractical the use of another carrier or mode. “On this petition, Texas contests the Commission's findings with re- spect to the Cost/Revenue Presumption and the Substantial Investment test. (Nos. (3) and (4)). Justice petitions for review of the Commission’s findings with respect to these presumptions, and with respect to the Market Share Presumption (No. (2)) as well. A-12 CP&L made a second attack on the proposed rate under § 10741, alleging that the rate was discriminatory. Section 10741(a) states that a carrier “may not charge or receive from a person a different compensation (by using a special rate, rebate, drawback or other means) for a service rendered, or to be ren- dered, in transportation the carrier may perform under this sub- title than it charges or receives from another person for perform- ing a like and contemporaneous service in the transportation of a like kind of traffic under substantially similar circumstances.” Although there is no prerequisite that a protestant show market dominance before a rate may be found discriminatory under this section, the Commission failed to address CP & L’s allegations ol discriminatory pricing. Ill. STANDARD OF REVIEW [2] In reviewing the Commission’s decisions, we are guided by familiar standards. Basic is the rule that the reviewing court mus! consider whether the decision was based on relevant factors anc whether there has been clear error of judgment. Citizens to Pre. serve Overton Park v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814 823, 28 L.Ed.2d 136 (1971). While our “inquiry into the facts i: to be searching and careful, the ultimate standard of review is ¢ narrow one. The court is not empowered to substitute its judg: ment for that of the agency.” /bid; see Bowman Transportation v Arkansas Best Freight System, 419 U.S. 281, 285, 95 S.Ct. 438 441, 42 L.Ed.2d 447 (1974). In the context of rate making, par ticularly appropriate to one aspect of this opinion,” the Suprem¢ Court has noted: Such decisions ‘are not to be disturbed by the courts except upon a showing that they are unsupported by evidence, were made without a hearing, exceed constitutional limits, or for some other reason amount to an abuse of power.’ Manufac- turers R. Co. v. United States, 246 U.S. 457, 481 [38 S.Ct. "See our discussion in Part VII. C (iii), infra, concerning an allege double count in the Revenue/Cost Presumption. A-13 383, 389, 62 L.Ed. 831] (1918). As this Court has observed, ‘The process of rate making is essentially empiric. The stuff of the process is fluid and changing the resultant of factors that must be valued as well as weighed. Congress has there- fore delegated the enforcement of transportation policy to a permanent expert body and has charged it with the duty of being responsive to the dynamic character of transportation problems.’ Board of Trade of Kansas City v. United States, 314.U.S. 534, 546 [62 S.Ct. 366, 372, 86 L.Ed. 432] (1942). Atchison, Topeka & Santa Fe Ry. Co. v. Wichita Board of Trade, 412 U.S. 800, 806, 93 S.Ct. 2367, 2374, 37 L.Ed.2d 350 (1973). (footnote omitted). [3-5] Tempering this deference afforded agency action is the requirement that a reviewing court set aside agency action found to be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. 5 U.S.C.A. § 706(2)(A) (West 1977). Variations on this theme inform us that we must be able to discern from a decision the reasons for the Commission’s conclu- sions and the policies it is pursuing. Potomac Electric Power Co. v. United States, 584 F.2d 1058 (D.C.Cir. 1978). “We must know what a decision means before the duty becomes ours to say whether it is right or wrong.” United States v. Chicago, Mil- waukee, St. Paul & Pacific Railroad, 294 U.S. 499, 511, 55 S.Ct. 462, 467, 79 L.Ed. 1023 (1935). Also, an agency must either con- form itself to its prior norms and decisions or explain the reason for its departure. Secretary of Agriculture v. United States, 347 U.S. 645, 74 S.Ct. 826, 98 L.Ed. 1015 (1954); Mitchell Energy Corp. v. Federal Energy Regulatory Commission, 580 F.2d 763 (5th Cir. 1978); NLRB v. Sunnyland Packing Co., 557 F.2d 1157, 1160 (Sth Cir. 1977); see Frozen Food Express, Inc. v. United States, 535 F.2d 877 (Sth Cir. 1976). With these standards in mind, we turn to the issues. IV. QUALIFICATION FOR TREATMENT UNDER § 10729 Only CP &L argues on appeal that the Commission erred in de- termining that the rate is a capital incentive rate under § 10729 A-14 with its five year protection against attack. We treat this ques first not only because of its procedural priority but also becau determination of this question bears upon whether a volun remand is proper. The pertinent part of § 10729(a) establishing the criteria 1 met before the special rate incentive procedure applies, read A proposed rate, classification, rule, or practice for trans tation by a rail carrier... requiring a total capital in' ment of at least $1,000,000 to implement shall be establi and become effective under this section. This section ap whether the investment is made individually or collect by the carrier or by a shipper, receiver, or agent for ar them, or by a third party. In previous western coal unit train cases initiated under § 10 railroads have typically relied upon investments in additi locomotives and in construction and improvements on track roadbed required by a movement to establish the $1,000,00 vestment threshold. /ncentive Rate on Coal Cordero, Wyomii Smithers Lake, Texas, 358 1.C.C. 537 (1977) (“Smithers Lai Incentive Rate on Coal Gallup, New Mexico to Cochise, Ariz 357 LC.C. 683 (1977) (“Cochise”); Incentive Rate on Hayden, Colorado to Kings Mill, Texas, 359 1.C.C. 749 (1 (‘Kings Mill’), petition for review pending; cf. Incentive Ra Coal Belle Ayr. Wyoming to Council Bluffs, Iowa, 359 1. 201, 207 (1978) (“Council Bluffs”). The railroads here foll form, alleging that the Coleto Creek movement would requir purchase of 37 locomotives, the construction of a new conne between the Santa Fe and SP lines at Caldwell, Texas, exte) of sidings and passing tracks along the Santa Fe line, and sub tial upgrading of track of both the Santa Fe and SP. The req upgrading alleged by SP was on 92 miles of branch line, on! of which rail would have to be replaced, as well as ties und« rails and ballast under the ties, with stabilization of the sub; under the ballast, in order safely to accommodate the heav) trains. A-15 CP&L argues that these investments do not qualify the rail- roads’ proposed schedule for capital incentive treatment because (1) the service for which the schedule is proposed is neither in- novative nor of a new type, (2) the proposed expenditures are not required for the CP&L traffic, but at most amount to conve- niences, (3) the expenditures claimed by SP for upgrading its track are actually operating expenditures rather than capital in- vestments, and (4) the railroads refused to produce evidence requested by CP &L in order to accurately determine the amount of claimed investments which could be properly attributed to CP &L’s traffic as opposed to the railroads’ normal traffic." The Commission did not, as it did in prior coal cases, include the alleged purchascs of locomotives in its computation of required capital investments (Joint Appendix (“J.A.”) III, p. 1939), but nevertheless found the $1,000,000 threshold require- ment to have been exceeded by a “substantial margin.” (J.A. III, p. 1940). The Commission specifically found that the combined investment by the Santa Fe and SP in constructing the inter- change at Caldwell, Texas, and the expenditures by SP to up- grade its branch line track would each exceed $1,000,000. /bid. [6] With respect to CP&L’s argument that the capital incen- tive rate provision applies only to innovative types of service, we note that there is no such requirement in the language of § 10729.” CP&L, though, perceives in the legislative history of § 10729 such a requirement. Although the District of Columbia Circuit in Houston Lighting & Power Co. v. United States, 606 F.2d 1131 “The requested information would be relevant in determining alloca- tion between CP&L’s movement and other traffic of costs of additional! locomotives purchased and sidings constructed along the Sante Fe line. "The Commission has interpreted the language of § 10729 thus: “Or. dinarily, eligible capital investment will be for the purpose of promoting innovative or improved service or attracting new traffic.’ Ex parte No 327, Rate Incentives for Capital Investment, 353 1.C.C. 754, 758 (1977) (emphasis added). A-16 (D.C.Cir.1979), cert. denied, 444 U.S. 1073, 100 S.Ct. 10 L.Ed.2d 755, extensively reviewed the legislative histc § 10729 and found no requirement that the service be inno\ CP &L offers no reason to us why the District of Columbi cuit was mistaken in its conclusion." After reading the legi: history, we agree with the District of Columbia Circuit th service need not be innovative or of a new type for the r they enunciated. 607 F.2d at 1137-1139. In so holding, we our recent decision in Celanese Chemical Co., Inc. v. | States, 632 F.2d 568 (Sth Cir. 1980). [7] The remainder of CP &L’s objections that the railroads to qualify for treatment under § 10729 are disposed of by fo upon the interchange to be constructed between the Santa I SP lines at Caldwell, Texas. CP&L attacked this proposed change as unnecessary, constituting a convenience only movement of coal trains from the Santa Fe line to SP’s line. ently, the Santa Fe line passes over SP’s line on an overp Caldwell, Texas. (J.A. II, p. 1098) There exists an intercha this junction, but it is a little used connection neither constr nor maintained, for the engineering standards necessitat coal train operation. (/bid.) Moreover, it is placed in such that the unit coal train proceeding off the Santa Fe track to! track would be headed in the wrong direction. To put the t) the right direction would necessitate blocking traffic on S| tercontinental main track for two hours or more while th tions of lead locomotives, helper locomotives (located aft first % of the train), and the caboose are switched. A witn "“CP&L cites only H.R. Rep. No. 93-1381, 93rd Cong.2d S (1974) and Surface Transportation Legislation Hearings or 12891, H.R. 5385, H.R. 13487, H.R. 10694 and S. 1149 befi House Committee on Interstate and Foreign Commerce and th committee on Transportation and Aeronautics, 93rd Cong.2d. Se (1974). This legislative history dealt with bills introduced in th Congress, which failed to pass any legislation. In our review of th lative history, we looked to the many bills and reports of both tl Congress and the 94th Congress, which passed the Reform Act. A-17 CP&L stated that a new connection at Caldwell, while a conv nience, was not necessary. An SP engineer countered with te timony that it would be hazardous, impractical and inefficient operate over the existing connection. (J.A. III, p. 1112). In tl light of such testimony, the Commission’s conclusion that tl Caldwell interchange is required by CP&L’s coal traffic is re: sonable. Morgover, there is clearly sufficient evidence in tl record that the total cost of this interchange would excec $1,000,000. (J.A. II, pp. 1080 and 1114). Since the Caldwell ii terchange alone suffices to qualify the proposed rate for capital il centive treatment, we do not address CP&L’s remaining a guments. V. VOLUNTARY REMAND” The Commission, as noted above, has not filed a brief on th merits. On April 30, 1980, it voted to reopen this proceeding sut ject to approval by this court. On May 6, 1980, before the conch sion of the briefing schedule and before oral argument, the Con mission moved this court to remand without consideration of th merits to enable the Commission to reconsider the present recor The Commission wishes to reconsider primarily the issue of ma) ket dominance, and especially its findings on each of the thre presumptions set out in 49 C.F.R. 1109.1(g). It also wishes | reconsider whether the railroads submitted sufficient evidence « competitive alternatives to rebut any presumption of mark dominance. If the Commission on reconsideration finds mark: dominance, it will need then to examine the reasonableness of tt rate. The Commission also wishes to reconsider CP &L’s alleg: tion of rate discrimination. Finally, the Commission requests thi the remand not be limited to reconsideration of the above issue but that we give the Commission authority to consider related i sues which it may deem necessary to resolve in order to render a adequate decision in this proceeding. "We define “voluntary remand” at p. 145, supra. A-18 [8] As we read the Commission’s motion, it approach practical concerns, a request for remand of this entire pr for reconsideration. CP&L, Justice, Texas and the rail join in opposing the Commission’s motion. They mainta voluntary remand is impractical now when the decision i: appellate review. The railroads further argue that § 107: Reform Act precludes such a voluntary remand, After a1 the Reform Act, we agree that the modifications added legislation to Commission procedure in rail cases pri voluntary remand in this case. The Commission argues that it has authority wu) U.S.C.A. § 10323(a) and under American Farm Lines Ball Freight Service, 397 U.S. 532, 90 S.Ct. 1288, 25 547 (1970) and United States v. Benmar Transport & Corp., 444 U.S. 4, 100 S.Ct. 16, 62 L.Ed.2d 5 (1979), t sider a decision even after the petitions for judicial revi been filed. We do not consider American Farm Lines or Transport authoritative in this situation since neither ca with a rail carrier, and the Reform Act has establishec provisions governing Commission procedure in rail cases [9] We further conclude that the Commission is mista § 10323(a) is the appropriate section governing reconsi In American Farm Lines, the Supreme Court noted the pov Commission to grant rehearings after a petition was filed wit was not limited or qualified by 49 U.S.C. § 17(6) and (7), (the provisions of the Interstate Commerce Act before the 1978 r tion), governing Commission reconsideration. 397 U.S. at 540, at 1293. We also note there are other factors in American Farm Lines mar Transportation distinguishing these cases from the instan American Farm Lines, several protesting carriers petition reopening of the proceeding. In Benmar Transportation, no parties protested the Commission's reconsideration. Here, Commission desires reconsideration before review by this cou tion opposed by all other parties. A-19 in rail cases.”" Instead, the appropriate section govern procedure in rail cases is § 10327, which was added to the In state Commerce Act by the Reform Act.” Section 10327 clearly establishes § 10327’s procedure in rail cases, readin, pertinent part: (a) Notwithstanding sections 10322, 10323, and 1032é of this title, this section applies to a matter before the In state Commerce Commission involving a rail carrier pro ing transportation subject to the jurisdiction of the Comr sion under subchapter 1 of chapter 105 of this title. Section 10327(g)(1), which deals specifically with reconsid tion, states: (g)(1) The Commission may, at any time on its own in| tive because of material error, new evidence, or substanti changed circumstances (A) reopen a proceeding; (B) grant rehearing, reargument, or reconsideration 0 action of the Commission; and (C) change an action of the Commission. An interested party may petition to reopen and reconside action of the Commission under this paragraph ui regulations of the Commission. We note that this section limits Commission reconsideration © its own initiative to those cases where there is “material e1 new evidence, or substantially changed circumstances, requirement lacking in § 10323(a) governing reconsideratio other cases. The Commission is requesting a remand for re sideration has cited neither material error, new evidence, nor “Section 10323(a) is captioned, “Rehearing, reargument, and re sideration nonrail proceedings.” While this caption indicates § 1! pertains to nonrail cases, we are conscious that § 3(a) of Pub. L. 95 92 Stat. 1466, recodifying the Interstate Commerce Act, specifies w not to draw inferences concerning statutory construction from captic *Section 10327 finds its genesis in § 207(a) of the Reform Act. A-20 stantially changed circumstances in this case. Because it relies upon none of these circumstances, the Commission has no author- ity in this case to reconsider its decision on its own motion. More- over, this limitation on Commission instigated reconsideration in rail cases is consistent with Congress’ concern that regulatory delays were a major cause of our nation’s railroads’ difficulties. To allow the Commission to reconsider without citing any of these specified reasons would delay the determination of whether a rate may be published. , (10, 11] Our second reason for refusing a voluntary remand arises out of the fact that this is a capital incentive rate case brought under § 10729. We believe that the language and policy of § 10729, as well as the structure of the Reform Act, precludes the Commission from reopening a case on its own initiative after the 180 day time limit to rule on a capital incentive rate. The part of § 10729 pertinent to the problem of voluntary remand reads: Once a rate, classification, rule, or practice becomes effective under this section, the Commission may not, for 5 years, sus- pend or set it aside as violating section 10701, 10726, 10741, 10744, or 11103 of this title. However, the Commis- sion may order the rate, classification, rule or practice to be revised to a level equal to the variable costs of providing the transportation when the Commission finds the level then in effect reduces the going concern value of the carrier. (emphasis added). In this case, the Commission wishes to recon- sider, among other things, whether the rate for CP&L’s traffic violates § 10741, prohibiting discriminatory rates; and if the Commission finds market dominance to exist on voluntary remand, it would have to determine whether the rate is reasonable under § 10701. Both provisions are included in § 10729’s five year prohibition against Commission action. [12] The language of §10729 sweeps broadly, placing no limita- tions on the preclusion imposed upon the Commission not to sus- pend an incentive rate for five years. It might be argued that A-21 § 10729 prohibits the Commission from reconsidering a rate only at the instigation of a shipper under § 10707, but does not pre- clude the Commission itself from reconsidering a rate. We do not perceive such a qualification in the language of § 10729. If any- thing, the sentence in § 10729 giving the Commission authority to reconsider a rate which reduces the going concern value of the carrier implies that in other situations the Commission lacks such authority to set a rate aside. We agree with the District of Colum- bia Circuit, when in a slightly different context, it stated: In our view, what the statute means is that the Commission has no authority to provide agency generated reconsidera- tion of its approval of a rate whether the approval is ex- pressed positively, in an order, or passively, by failure to in- tercede. Houston Lighting & Power Co. v. United States, 606 F.2d at 1144.” The Commission attempts to distinguish this language by arguing that a voluntary remand still requires an order by this court, and thus is not “agency generated.” We think this distinc- tion is without merit and ignores the reality of the Commission’s motion. A court would have no reason to remand without con- sideration of the merits absent a request by the Commission. In effect, the Commission, in making its motion, is asking that the court authorize it to do what it otherwise could not do. [13] There is nothing in the legislative history addressed to the particular question of whether the Commission could, on its own initiative, seek a voluntary remand in a rate incentive case. How- *Although the parties have cited extensively to this language as it relates to the possibility of a voluntary remand, it is actually dictum. The question in Houston Lighting & Power was whether the court had authority to review the merits of a rate incentive decision and whether the Commission could act after remand following a review on the merits. In this part of our opinion, the question is whether the Commission has the authority to request a voluntary remand. We discuss Houston Light- ing & Power more fully below in Part V1, Scope of Commission’s Au- thority on Remand. A-22 ever, we do perceive in the legislative history a policy which would be violated by a voluntary remand. The Reform Act traces its roots back to the 93rd Congress. The House Committee on Inter- state and Foreign Commerce in that Congress, after considering a bill sponsored by the Department of Transportation, “ reported to the House a bill, H.R. 5386, with a rate incentive provision essen- tially the same-as that found in § 10729, the primary difference being that the House bill offered 3 years, instead of 5 years, pro- tection to an incentive rate.” In the debate on the floor of the House, Rep. Adams explained that the rate incentive provision was known as the “Big John” provision because it was aimed at ameliorating problems such as that encountered by the Southern Railway in its efforts to publish new rates for shipment of grain in innovative “Big John” cars it had developed.” Rep. Adams stated this provision would: give some assurance to a carrier or a shipper that if he invests a million dollars in a new service, he will receive a prompt decision one way or another on that rate from the ICC and that if a rate is permitted it will remain in effect for 3 years. 93rd Cong., 2d Sess., 120 Cong. Rec. 38,736 (1974). This bill passed only the House and was never enacted. In the 94th Congress, bills were again introduced in both the House and Senate to revitalize the nation’s railroads.” These bills, which “H.R. 12891, 93rd Cong., 2d Sess., (1974), reprinted in Staff of 93rd Cong., 2d Sess., “Surface Transportation Act of 1974: Background In- formation” (Comm. Print No. 20). *H.R. 5386, 93rd Cong., 2d Sess. (1974), reprinted in H.R. Rep. No. 93 1381, 93rd Cong., 2d Sess. (1974). “Southern Railway's difficulties can be traced in Grain in Multiple Car Shipments River Crossings to the South, 318 1.C.C. 641 (Division 2), reversed, 321 1.C.C. 582 (1963) (Full Commission), reversed sub nom. Cincinnati, N. O. & T. P. Ry. Co. v. United States, 229 F.Supp. 572 (S.D. Ohio 1964), vacated per curiam sub nom. Arrow Transport Co. v. Cincinnati, N. O. & T. P. Ry. Co., 379 U.S. 642, 85 S. Ct. 610, 13 L.Ed.2d 550, on remand, 325 1.C.C. 752 (1965). ”H.R. 10979, 94th Cong., Ist Sess. (1975), reprinted in H.R. Rep 94 725, 94th Cong., Ist Sess. (1975). S. 2718, 94th Cong., Ist Sess. (1975), reprinted in S.Rep. 94-499, 94th Cong., Ist Sess. (1975), U.S. Code Cong. & Admin. News 1976, p. 14. A-23 were eventually combined and enacted as the Reform Act, again contained essentially the same rate incentive provisions.” The committee reports to both bills emphasized that they were meant to remedy the serious regulatory lag hampering rail rate cases.” In pursuit of this goal, special incentive rate cases brought under § 10729, as well as regular rail rate cases brought under § 10707, are subject to time limits for consideration, both types of cases requiring prompt Commission action. Were we to permit this requested voluntary remand, the goal of prompt Commission res- olution in rail cases would be frustrated. In effect, we would be giving the Commission additional time beyond the 180 day requirement of § 10729 in which to determine a capital incentive rate. Although we do not believe that the Commission in this case is using a voluntary remand as a ploy to circumvent § 10729’s time limitations,” it would be an obvious threat to the procedural integrity of § 10729 and the concerns of Congress if voluntary remands were allowed. Accordingly, we believe they are barred by § 10729. *H.R. 10979, § 303, reprinted in H.R. Rep. 94-725, 94th Cong., Ist Sess., 14 (1975). S. 2718, § 107, reprinted in S. Rep. 94-499, 94th Cong., Ist Sess. (1975). “H.R. Rep. 94-725, 94th Cong., Ist Sess., 60 62 (1975). S. Rep. 94- 499, 94th Cong., Ist Sess., 15 (1975). “We are concerned, though, that the Commission, as its own motion to remand indicates, failed to address two major allegations argued strenuously by CP&L, namely, that the railroads’ rates were discrimi- natory and that the railroads had failed to provide evidence in their possession necessary to establish costs. (We discuss these allegations more fully below in Part IX, Section 10741 Attack on Rate as Dis- criminatory and Railroads’ Duty to Produce Evidence.) We are also concerned about the Commission's apparent departure from prior deci- sions on several issues without adequate explanation. While the 180 day limit on consideration of an incentive rate case may be onerous, it does not excuse the failure to address all the issues raised, nor does it excuse the failure to adequately explain holdings. A-24 VI. SCOPE OF COMMISSION’S AUTHORITY UPON REMAND [14] The railroads do not contest the jurisdiction of this court to review the Commission’s decision in this case.” However, the rail- roads argue that, after a court generated remand,” the Com- mission has no authority, because of the five year prohibition of § 10729, to reconsider, or revise its findings. The railroads admit that this limitation on the Commission’s authority would as a practical matter make judicial review largely a pointless exercise.” But they steadfastly argue that the Commission’s power, even on court generated remand, is limited under the language of § 10729 to changing the rate only after 5 years have passed. The same argument was made to the Houston Lighting & Power court: In intervenors’ [railroads’] view, this language [in § 10729 limiting Commission’s authority to suspend a rate] deprives the Commission of authority to find a capital incentive rate unlawful and to set it aside even when a reviewing court has remanded the Commission’s initial decision approving the rate because of defects under the Administrative Procedure Act. 606 F.2d at 1143. The court there rejected the argument and we agree. To have judicial review of an agency action with no author- "Cf. Southern Railway Co. v. Seaboard Allied Milling Corp., 442 U.S. 444, 99 S.Ct. 2388, 60 L.Ed.2d 1017 (1979) and Georgia Power Co. v. United States, 617 F.2d 107 (Sth Cir. 1980), both holding appel- late courts have no jurisdiction to review a Commission’s decision not to investigate a rate under § 10707. In this case, there has been an inves- tigation of market dominance and jurisdiction is clearly established under § 10709(b) establishing judicial review over determinations of market dominance. “We define “court generated remand” and contrast it with “voluntary remand”, supra, p. 145. The railroads suggest that judicial review without Commission cor- rection of legal error would at least have precedential value in future cases. A-25 ity in that agency to correct errors is a futile exercise. We do not perceive in the legislative history of § 10729, the “clear and con- vincing evidence” necessary to conclude that Congress intended to restrict normal judicial review. Dunlop v. Bachowski, 421 U.S. 560, 567, 95 S. Ct. 1851, 1857, 44 L.Ed.2d 377 (1975), Abbott Laboratories, Inc. v. Gardner, 387 U.S. 136, 141, 87 S.Ct. 1507, 1511, 18 L.Ed.2d 681 (1967). While Congress wished to give rail- roads assurances that if they made substantial investments, rates associated with these investments would remain undisturbed for 5 years, there is no hint it wished to protect erroneous Commission action. On remand, accordingly, the Commission shall have au- thority to take whatever action our opinion requires. VII. PRESUMPTIONS As noted above, the Commission has promulgated four rebut- table presumptions found at 49 C.F.R. 1101.1(f) and (g) to aid it in speedily determining whether market dominance exists. The Commission found that none of these presumptions applied to CP&L’s movement; we must review the Commission’s action with respect to each.” “Our review of Commission decisions reveals this to be the first case involving unit coal train traffic in which, after an investigation, the Com- mission did not find one of the presumptions to apply and market domi- nance to exist. In only one case brought to our attention has the Commission said there was no market dominance in a coal movement. In Increased Rate on Coal Arco, Tennessee to Harllee, Georgia, SOU and CGA, Docket No. I & S 9217, Decision Served August 23, 1979 (by Division 1) (unprinted), reconsideration denied, Decision served Oc- tober 19, 1979 (by Commission) (unprinted), petition denied sub nom. Georgia Power Co. v. United States, 617 F.2d 107 (Sth Cir. 1980), the Commission refused to investigate a coal traffic rate under § 10707 because of the protestants’ failure to demonstrate a likelihood of success and because intramodal competition indicated no market dominance. This was a one page decision cursorily finding no market dominance without an investigation or elaboration and as such lends no support to the Commission’s conclusion in this case. A-26 A. Rate Bureau Presumption [15] CP &L claimed before the Commission that one factor i dicating market dominance was that the carriers considered tl schedule within their rate bureau, the Southwestern Freight Bu eau. Establishing that a rate has been discussed, considered, « approved upon a rate bureau agreement does not establish rebuttable presumption of market dominance per se. Instead, establishes a rebuttable presumption that a carrier participatir in the rate or in such discussion or consideration does not provic effective competition to the proponent rail carrier for the involve traffic. 49 C.F.R. 1109.1(f). The evidence CP&L placed in tl record on this point is admittedly sparse, consisting only of a n tice published on July 12, 1977, that the proposed rate had bec docketed, inviting interested parties to comment and to request public hearing, and a subsequent withdrawal of the rate from tl public docket on September 26, 1979. (J.A. III, pp. 1622-3). The Commission did not address CP&L’s allegation of ra bureau activity. The railroads defend the Commission’s failure address this issue by pointing to the language of the rate bures presumption which provides that the presumption arises when tl “evidence addressed establishes that the rate in issue has been di cussed, considered, or approved upon a rate bureau agreement 49 C.F.R. 1109.1(f). The railroads argue that docketing tl proposed rate for independent action is not the same as discu sion, consideration or approval.” “We are not convinced that the record has evidence of only docketi the rate for CP&L’s traffic. In evidence concerning the railroads’ neg tiation with CP&L, one railroad witness testified that the railroa received a wire from the Missouri Pacific of its intention not to make quote on CP&L’s movement. (J.A. II, p. 805). The evidence does not i dicate that the Missouri Pacific learned of CP&L’s movement throu, the rate bureau or that the Missouri Pacific declined so openly to maki quote on CP&L’s movement through the procedure of the rate burea However, the fact that the Missouri Pacific wired the railroads wi whom and through whom negotiations were being conducted may | dicate that rate bureau procedures were being relied upon. A-27 [16] We are not convinced that the rate bureau presumption should be read as narrowly as the railroads request. In Ex parte No. 320, Interim Report, the Commission stated: Ordinarily, no presumption will attach when a proposal is docketed for independent action pursuant to the rate bureau procedures. We do note, however, that the presumption will apply when two or more carriers which have previously dis- cussed or considered a conference rate later publish the same or similar rates at or about the same time, pursuant to their right of independent action. The circumstances underlying independent action are too varied to permit any uniform in- ference, and the circumstances surrounding such publication will be considered on a case by case basis. 353 L.C.C. at 891. The use of the adverb “ordinarily” implies [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385007_2247%3A1. Public record. Not legal advice.