Appendix — American Trucking Assns. v. Interstate Commerce Commission

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g8-2117 0 rirrs™

No.

JUN 22 1984

Se ee

ALEXANDER L. STEVAs,

In THE CLERK

Supreme Court of the Uuiten States

OCTOBER TERM, 1983

AMERICAN TRUCKING ASSOCIATIONS, INC., et al.,

and

INTERNATIONAL BROTHERHOOD OF TEAMSTERS,

Petitioners,

V.

INTERSTATE COMMERCE COMMISSION and

UNITED STATES OF AMERICA,

and

ASSOCIATION OF AMERICAN RAILROADS, et al.,

Respondents.

APPENDIX TO

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

NELSON J. COONEY GEORGE KAUFMANN

KENNETH E. SIEGEL (Counsel of Record)

1616 P Street, N.W. ROBERT J. HIGGINS

Washington, D.C. 20036 JOAN M. DARBY

(202) 797-5347 2101 L Street, N.W.

Attorneys for Washington, D.C. 20037

American Trucking (202) 785-9700

Associations, Inc., et al. Attorneys for

International Brotherhood of

Teamsters

WILSON - EPES PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001

@ E> 0

Appendix

Appendix

Appendix

Appendix

Appendix

Appendix

TABLE OF CONTENTS

A—Opinion of the Interstate Commerce

Commission in Ex Parte No. MC-156 ....

B—Opinion of the United States Court of

Appeals for the Fifth Circuit in Ameri-

can Trucking Assns., Inc., et al. v. Inter-

state Commerce Commission, et al. (Jan.

OO Te a ccesisccecieencncincerncee

C—Judgment of United States Court of Ap-

peals for the Fifth Circuit in American

Trucking Assns., Inc., et al. v. Interstate

Commerce Commission, et al. ................

D—Decision of the Interstate Commerce

Commission in No. MC-78786 (Sub./No.

ON i a a

E—Opinion of the United States Court of

Appeals for the Fifth Circuit in Ameri-

can Trucking Assns., Inc., et al. v. Inter-

state Commerce Commission, et al. (July

RE ig ee eR a ee

F—Statutory provisions involved -...............

Page

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29a

49a

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APPENDIX A

Served January 6, 1983

M-13230

INTERSTATE COMMERCE COMMISSION

Ex Parte No. MC-156

APPLICATIONS FOR MOTOR CARRIER OPERATING

AUTHORITY BY RAILROADS AND RAIL AFFILIATES

Decided December 17, 1982

The Commission is eliminating the “special circum-

stances” doctrine to make it easier for railroads and

rail affiliates to obtain unrestricted motor carrier au-

thority. This action is mandated by changes in the

transportation industry since the passage of the 1935

Motor Carrier Act and recent revisions to the Inter-

state Commerce Act reducing entry requirements for

obtaining motor carrier authority, requiring less re-

stricted motor carrier operations, and encouraging in-

termodal transportation and competition between and

among rail and motor carriers.

DECISION

BY THE COMMISSION:

This proceeding was instituted by a notice of proposed

policy statement, served October 9, 1981, and published

at 46 F.R. 50,423 (October 13, 1981). The notice sought

public comment on the continued viability of the “special

2a

circumstances” doctrine in light of recent amendments to

the Interstate Commerce Act embodied in the Motor Car-

rier Act of 1980 (MCA), Public Law 96-296, and the

Staggers Rail Act of 1980 (Staggers Act), Public Law

96-448. The “special circumstances” doctrine requires the

restriction to incidental rail service of motor carrier

operating authority issued to railroads or rail affiliates

in licensing proceedings unless special circumstances are

shown that unrestricted authority is required to fulfill a

compelling public need for service not being offered by

independent motor carriers. The aim of the doctrine is

to prevent rail domination of motor carrier markets.

Comments were received from shippers, freight for-

warders, motor carrier and rail carrier interests, and the

United States Department of Transportation (DOT).

In general, railroads, rail-affiliated motor carriers, and

DOT favor abolition of the doctrine, contending that it

has outlived its usefulness in light of the comparable eco-

nomic positions of today’s rail and truck industries and

the recent amendments to the Interstate Commerce Act

which encourage competition. Shippers, freight forward-

ers, and independent motor carriers argue for retention

of the “special circumstances” doctrine, citing its salutary ©

effects on rail-motor competition and the continuing stat-

utory basis for the doctrine’s application.

1 Parties filing comments include Grain Processing Corporation ;

Monsanto Company; Air Cargo Terminals, Inc. and Armellini Ex-

press Lines, Inc.; The American Trucking Associations, Inc.

(ATA); The Regular Common Carrier Conference of the ATA;

Central Freight Lines Inc.; Garrett Freight Lines; The Associa-

tion of American Railroads; The Santa Fe Trail Transportation

Company; The Family Lines Rail System and Seacoast Transpor-

tation Company, Inc.; Consolidated Rail Corporation and Pennsyl-

vania Truck Lines, Inc.; Kansas City Southern Railway Company

and Louisiana & Arkansas Railway Company; The Milwaukee

Motor Transportation Company; Sanderville Railroad Company and

B-II Transfer Co.; The Western Pacific Railroad Company; and

Union Pacific Railroad Company and Union Pacific Motor Freight

Company.

3a

After careful analysis of the record in this proceeding,

we conclude in this final policy statement that the “spe-

cial circumstances” doctrine should be eliminated from

motor carrier licensing proceedings. Given the explicit

directives of the revised act for eased motor carrier entry

requirements, broad, less restricted motor operating au-

thority, intermodal promotion, and minimized regulation

of railroads, special or unusual circumstances are no

longer required to be shown in support of unrestricted

motor carrier licensing applications by railroads and rail

affiliates.

The “special circumstances” doctrine is not a viable policy

under the newly revised Interstate Commerce Act

Recent amendments to the motor carrier provisions of

the Interstate Commerce Act embodied in the MCA have

established “a new Federal policy which is designed to

promote a competitive and efficient motor carrier in-

dustry.” H.R. Rept. 1069, 96th Cong., 2d sess. 14 (1980).

At the heart of this legislation is the mandate for eased

regulatory entry requirements offering “increased oppor-

tunities for new carriers to get into the trucking business

and for existing carriers to expand their services.” Id.

at p. 3. The new licensing provisions at 49 U.S.C. 10922

and 10923 markedly reduce the burden of proof of those

seeking motor carrier authority and substantially in-

crease the burden of proof of those opposing the issuance

of motor carrier authority. New section 10922(h) re-

quires the removal of inefficient restrictions on motor

carrier authority.

The Staggers Rail Act of 1980 endorses more competi-

tive, less restricted rail operations and stresses minimized

federal control over the rail transportation system. The

Staggers Act, has established a new rail transportation

policy which evidences Congress’ intent “to foster sound

economic conditions in transportation and to ensure effec-

tive competition and coordination between rail carriers

4a

and other modes.” 49 U.S.C. 10101(a) (5). In passing

the Staggers Act, Congress found that “today most trans-

portation is competitive and many Government regula-

tions affecting railroads have become unnecessary and

inefficient.” H.R. Rept. 1480, 96th Cong., 2d sess. 79

(1980). Congress also emphasized that “{m]odernization

of economic regulation of railroads, with greater reliance

on the marketplace is essential to achieve maximum utili-

zation of railroads, to save energy and combat inflation.”

Id.

The “special circumstances” doctrine has its origins in

the earliest days of the Commission’s regulation of motor

carriers. The underlying policy against granting un-

restricted motor carrier operating authority to railroads

or their affiliates originated in the motor-rail acquisition

and control section 213(a)(1) of the Interstate Com-

merce Act as amended by the Motor Carrier Act of 1935.

This legislation prohibited a railroad from acquiring or

merging with a motor carrier “unless * * * the trans-

action * * * [would] promote the public interest by

enabling the [rail] carrier * * * to use service by motor

vehicle to public advantage in its operations and not

unduly restrain competition.” Pursuant to this statutory

language, the Commission restricted motor operations

resulting from rail-motor acquisitions proceedings to those

auxiliary or supplemental to rail service. See Pennsyl-

vania Truck Lines, Inc—Control—Barker, 1 M.C.C. 101

(1936). The rationale for this policy was to protect the

nascent motor carrier industry from anticompetitive con-

trol by the more mature railroads with their dominant

size and great financial resources. Id. at p. 112.

Although there was no express statutory requirement

for doing so, this principle was extended to motor carrier

licensing proceedings under sections 207 and 209 of the

act. See Kansas City S. Transport Co., Inc., Com. Car.

Application, 10 M.C.C. 221, 240-41 (1938) (The Com-

mission found that the motor carrier applicant’s affilia-

5a

tion with a railroad required imposition of specific

auxiliary-to-rail restrictions).2 The basis for this was

both the Commission’s interpretation of the acquisition

section 213(a) (1), and the requirements of the Declara-

tion of Policy of the Motor Carrier Act of 1935, which

provided that the Commission was—

to regulate transportation by motor carriers in such

manner as to recognize and preserve the inherent

advantages of, and foster sound economic conditions

in, such transportation and among such carriers in

the public interest; promote adequate, economical,

? Typically, all or some of the following restrictions have been

imposed in rail-motor acquisition an licensing cases:

1. Service performed by the rail-affiliated motor carrier

should remain auxiliary to or supplemental of rail service mean-

ing in part that shipments must be consigned on a rail carrier

bill of lading at rail carrier rates.

2. Service could not be rendered to or from any point not

on the rail line of the railroad.

3. Service could not be performed between or through any

large termini on the rail line. This restriction is commonly

referred to as the “key point” restriction, and in effect pre-

vented the motor carrier from participating independently in

most major traffic flows.

4. The motor carrier might be limited to handling only

freight which had a prior or subsequent movement on the

rail line.

5. Contractual agreements between the railroad and the

motor carrier had to be reported to the Commission and were

subject to Commission modification.

6. The Commission retained the right to impose further

conditions necessary to insure that service remained auxiliary

or supplemental to rail service.

This practice received Supreme Court approval in J.C.C. v. Parker,

326 U.S. 60, rehearing denied 326 U.S. 603 (1945). In United

States v. Rock Island Transit Co., 340 U.S. 419, rehearing denied,

341 U.S. 906 (1951), the Court upheld the Commission’s power to

modify these restrictions.

6a

and efficient service by motor carriers, * * * improve

the relations between, and coordinate transportation

by and regulation of, motor carriers and other

carriers * * *.

The “special circumstances” doctrine itself was a

departure from the strict requirement of imposing

auxiliary-to-rail restrictions on motor carrier authority

issued to railroads or rail affiliates in licensing proceed-

ings. The doctrine allowed issuance of unrestricted au-

thority where the rail-affiliated applicant could show a

“compelling need” for its service by demonstrating (1)

that a grant of unrestricted authority would not result

in undue restraint of competition, and (2) that the public

interest requires the proposed operation which was not

being furnished by independent motor carriers. See e¢.g.,

Rock Island M. Transit Co.—Purchase—White Line M.

Frt., 40 M.C.C. 457 (1946).

This evidentiary requirement has been imposed in addi-

tion to a rail-affiliated applicant’s burden of proving a

public need for proposed motor common carrier service

under former section 207 and present section 10922, and

motor contract carrier service under former section 209

and present section 10923 of the act.

The extraordinary licensing and operational restric-

tions on rail-affiliated motor carriage embodied in the

“special circumstances” doctrine are the product of past

policies which stressed limited competition and regulatory

protection as the proper methods of preserving the “in-

herent advantages of motor carriage.” The “special cir-

cumstances” doctrine and its underlying policies are

incompatible with the regulatory scheme now mandated

by Congress under the revised Interstate Commerce Act.

The application of the “special circumstances” policy

proves this point. The “compelling necessity” standard

of proof generally applied in “special circumstances”

proceedings is at odds with the mandate of the revised

7a

act for eased motor carrier entry requirements and in-

creased competition. The fact that there may be inde-

pendent motor carriers which are authorized to perform

a service cannot preclude or inhibit authorization of a

new, competitive service. The presumption against motor

carrier competition, including rail-related motor carrier

competition which underlies the “special circumstances”

doctrine as it is presently constituted, has been reversed

by the act’s new licensing policies. The maintenance of

the presumption would still be required if the burden of

proof were shifted in “special circumstances” from rail

applicants to those opposing their applications, as has

been suggested by some commenting parties in this pro-

ceeding. However, the extraordinary barriers maintained

by a “special circumstances”-type doctrine are inapposite

to the procompetitive policies of the new licensing provi-

sions of the revised Interstate Commerce Act. Therefore,

these barriers must be removed.

Under the Interstate Commerce Act, as amended by

the MCA, an applicant for motor carrier authority (in-

cluding a rail-affiliated motor carrier) must demonstrate

that it is fit, willing, and able to perform the proposed

service, and that the service will serve a useful public

purpose, responsive to a public demand or need. 49

U.S.C. 10922(b) (1). A person protesting the issuance

of a certificate must then demonstrate that “the trans-

portation to be authorized by the certificate is inconsist-

ent with the public convenience and necessity,” Jd. How-

ever, diversion of traffic from an existing carrier is not

in and of itself inconsistent with the public convenience

and necessity. 49 U.S.C. 10922(b)(2)(B). The exist-

ence of other motor carriers authorized to perform the

service is insufficient to demonstrate inconsistency with

the public convenience and necessity. The showing re-

quired under the “special circumstances” doctrine of com-

pelling necessity for unrestricted authority for rail-affi-

liated motor carriers has no place in the procompetitive

8a

licensing regulations of the revised Interstate Commerce

Act.

Moreover, the relative economic positions of today’s

truck and rail industries as well as the ability of motor

carriage to compete successfully with other forms of

transportation undercuts the basic protective rationale

for the “special circumstances” doctrine. This is em-

phasized in the legislative histories of the MCA and the

Staggers Act as a basis for the passage of this legisla-

tion. The motor carrier industry as a whole generates

about 75 percent of the revenues earned by all forms of

transportation. See H.R. Rept. 1069, supra, at p. 2.

Over the years the railroads have handled a continuously

declining share of available traffic. Today, the once domi-

nant railroad industry accounts for only 36 percent of

the intercity ton-miles of freight. See H.R. Rept. 1035,

96th Cong., 2d sess. 35 (1980). Moreover, earnings by

the railroad industry are the lowest of any transporta-

tion mode and are insufficient to generate funds for nec-

essary capital improvements. See H.R. Rept. 1430, 96th

Cong., 2d sess. 79 (1980). Clearly, motor carriers com-

pete successfully with rail carriers, and the Commission’s

regulation under the amended Interstate Commerce Act

must reflect this fact.

Additionally, both Congress and the Commission in-

creasingly have endorsed rail-motor competition through

policies of rail rate flexibility. Section 205 of the Rail-

road Revitalization and Reform Act of 1976 (now sub-

stantively codified at 49 U.S.C. 10704(a)(2)) encour-

aged intermodal competition by mandating that no rate

of a common carrier by railroad shall be held up to a

particular level to protect the traffic of any other car-

rier or mode of transportation unless the Commission

finds that such rate reduces or would reduce the going

concern value of the carrier charging the rate. In Cost

Standards for Railroad Rates, 362 1.C.C. 800 (1980),

pursuant to the directives of the 4R Act, the Commission

9a

established a presumption of minimum rate reasonable-

ness at a modest, cost-related level which required that

a rate need only cover the “directly variable cost of

providing transportation” (i.e., line-haul cost of the

lading, applicable switching costs, and station clerical

costs) in order to be deemed to contribute to the going

concern value of the carrier. In addressing arguments

of possible predatory pricing under its liberal policy of

minimum rate reasonableness, the Commission stated

that—

the economic structure of motor and water carriers

is such that they are not truly susceptible to preda-

tory pricing practices. Even if driven out of a mar-

ket temporarily, by a railroad rate reduction, they

can always reenter quickly if the railroad raises its

rates again. Thus, while a railroad rate reduction

can divert traffic from other modes, it cannot elimi-

nate those modes as competitive influences. In con-

clusion we believe that truly predatory or destructive

pricing practices are unlikely as between the rail-

roads and their intermodal competitors. Jd. at p.

825.

In a continuation of the proceeding in Cost Standards

for Railroad Rates, 364 I.C.C. 898 (1981), the Commis-

sion implemented the new statutory minimum rate stand-

ard of section 201 of the Staggers Act (49 U.S.C. 10701a

(c) (2)) and concluded that when a rate covers the “di-

rectly variable cost of providing the transportation” the

rate is conclusively presumed to contribute to the going

concern value of the carrier and therefore is reasonable.

In changing the liberal presumption of minimum rate

reasonableness under the 4R Act into an even more

liberal conclusive presumption under the Staggers Act

the Commission found that—

The objective of the minimum rate provisions of

49 U.S.C. 10701a is to accord rail carriers maximum

10a

flexibility to lower rates in order to meet competi-

tion and otherwise attract traffic. Id. at p. 905.

We are convinced that Congress’ mandate for increased

intermodal competition through relaxed motor licensing

and rail rate flexibility policies req.ire the elimination

of the “special circumstances” doctrine as a barrier to

rail-motor competition.

Several parties argue that we may not modify the

“special circumstances” doctrine because the Supreme

Court has affirmed the policy in American Trucking

Assns. V. United States, 355 U.S. 141 (1957) and Amer-

ican Trucking Assns. v. United States, 364 U.S. 1 (1960).

However, these decisions do not require the maintenance

of the “special circumstances” doctrine. First, in neither

of those decisions did the Supreme Court find that there

was an absolute statutory prohibition. While the Court

affirmed the Commission’s policy of applying the pro-

visions of 49 U.S.C. 11844(c) to an operating rights

application under 49 U.S.C. 10922 and 10923, it also

noted that this policy was not rigid and that occasional

unrestricted licenses were not beyond the statutory

framework then in existence. In the second American

Trucking Associations case the Court again stated that

under normal circumstances the policy of 49 U.S.C.

11344(c) should be carried through into licensing. But

the Court did not endorse the wisdom of that follow-

through, saying simply that the transportation legisla-

tion required it and “the pardoning power” belonged to

Congress.

Thus, there are two quite significant points that should

be emphasized in considering the precedential value of

these cases. The first is that the Court, even under the

old national transportation policy, was satisfied to permit

departures in the licensing area when circumstances war-

ranted. Second, the Court’s interpretation is based on the

statute as then written. In the two decades since, circum-

lla

stances and the transportation legislation have changed

markedly. Indeed, when the relative competitive strengths

of the rail and motor sectors are considered along with

the competitively-oriented amendments to the national

transportation policy and the Interstate Commerce Act,

a reevaluation of the special circumstances doctrine

hardly seems a departure from judicial expectation. The

departure would be continued adherence to the superficial

requirements of the AJA cases, when their underlying

mandate, that the Commission read the act as a whole,

leads to the conclusion that the artificial separation of

these two modes makes no sense.*

Finally, as the Fifth Circuit recently confirmed, the

special circumstances doctrine is an agency “created and

transformed” doctrine, American Trucking Assns, Inc. V.

ICC, 682 F. 2d 487, 492 (5th Cir. 1982). As such, it is

not an immutable doctrine, but one that must change

with the changing realities of the economy and the indus-

tries regulated by the Commission. Those realities have

changed, and we are changing our policy to reflect this.

The relationship between rail-motor acquisition provisions

and licensing provisions of the revised Interstate Com-

merce Act require the abolition of the “special circum-

stances” doctrine

The strong endorsement of competition embodied in the

amendments to the Interstate Commerce Act has altered

dramatically the relationship between the Commiasion’s

restrictive interpretation of rail-motor acquisition provi-

sions in 49 U.S.C. 11844(c) and the motor carrier licens-

ing provisions of 49 U.S.C. 10922 and 10923. Prior to

the passage of the MCA, restrictive motor carrier entry

3 While the statutory language in section 11344(c) remains un-

changed, rail-motor acquisition policy gets its content both from

the legislation and interpretation. We will shortly issue a proposed

policy statement to reexamine our interpretation of this provision

in the light of the Motor Carrier Act and the Staggers Rail Act.

12a

policies blurred the distinction between a rail carrier’s

request for a motor carrier license and a rail carrier’s

request to acquire motor carrier operations. That is, the

Commission’s obligation “to apply the Act as a whole”

prevented it, in general, from authorizing unrestricted

rail-related motor carriage under the licensing provisions

which it would not authorize under the rail-motor acqui-

sition provisions. However, this obligation has never dic-

tated identical application of the licensing and acquisition

provisions of the act to rail-related carriers. The “special

circumstances” doctrine itself and the several exceptions

to the stringent application of the doctrine were devel-

oped in order to blunt the impact of the restrictive inter-

pretation of the rail-motor acquisition legislation on

motor carrier licensing provisions.‘

Those arguing for maintenance of the “special circum-

stances” doctrine cite new section 10505(g)(1) of the

revised act as support for their position. Section 10505

generally places broad authority in the Commission to

exempt from regulation rail transportation in situations

where the Commission finds that regulation is not needed

to prevent abuses of market power, regardless of the

4 Over the years, the Commission has carved out several excep-

tions to the strict “compelling necessity” standard of the “special

circumstances” doctrine. These exceptions have allowed rail affili-

ates to obtain motor carrier authority unencumbered by incidental-

to-rail restrictions in proceedings where: (1) there is little opposi-

tion (see New York Central Transport Co. Ext.—Oakbrook, IU..,

99 M.C.C. 94 (1965)); (2) loss of the involved traffic from the

affiliated rail carrier is so great that the existence of rail service

is threatened (see H. C. Gabler, Inc., Ext.—Cement from Md. and

Pa. Counties, 86 M.C.C. 447 (1961)); (3) the applicant proposes

a unique and innovative service (see Railway Exp. Agency Inc.,

Extension—Nashua, N.H., 91 M.C.C. 311 (1962)); (4) service

for small shippers at small points is shown to be required (see

Santa Fe Trail Transp. Co. Ext.—Colo. & Kans. Points, 111 M.C.C.

224 (1970); and Southern Pac. Transp. Ext.—Elimination of Re-

strictions, 117 M.C.C. 224 (1972), affirmed sub nom American

Trucking Associations, Inc. v. United States, 373 F. Supp. 252

(W.D. Tex. 1973), affirmed by the Supreme Court at 414 US.

1105 (1973) ).

13a

presence of effective competition. See H. R. Rept. 1430,

supra, at 105. Yet subsection (g) (1) of section 10505

specifically excludes from that exemption authority, any

power “to authorize intermodal ownership which is other-

wise prohibited by this title.”

Section 10505(g) (1) does not require the continuation

of the “special circumstances” doctrine. First, that sec-

tion applies solely to an exercise of Commission authority

under section 10505, which gives the Commission author-

ity to exempt rail carrier transportation. In this pro-

ceeding, we are merely revising a Commission policy re-

garding motor carrier operating authority applications by

rail-affiliated motor carriers. We are not exempting such

carriers from their obligation under the statute to apply

for motor carrier operating authority under either 49

U.S.C. 10922 or 10923. Second, even if section 10505

(g) (1) could be deemed to express some broader con-

gressional policy, that section prohibits the Commission

from “authoriz[ing] intermodal ownership that is other-

wise prohibited by this title * * * [emphasis supplied.”

Our change in policy as expressed in this decision does

not authorize prohibited intermodal ownership contrary

to that policy. Rather, it permits rail-affiliated motor car-

riers to expand their operations consistent with the over-

all congressional policies embodied in the MCA.

The historic interpretation of the acquisition legisla-

tion which requires restrictive barriers to rail-related

motor carrier operations no longer applies to the pro-

competitive licensing provisions. We see no proper justi-

fication to maintain the “special circumstances” doctrine

to coincide with this restrictive interpretation of the

acquisition legislation in view of the overriding procom-

petitive licensing policies of the revised act.®

5 As noted the Commission intends to issue a proposed policy

statement to reexamine the interpretation of the rail-motor acqui-

sition statutory provision in light of the Motor Carrier Act and the

Staggers Rail Act.

14a

Preservation of the inherent advantages of the various

modes of transportation is inconsistent with maintenance

of the “special circumstances” doctrine under the revised

act

The “special circumstances” doctrine has erected bar-

riers against rail incursions into motor carrier markets

except upon a demonstration of compelling necessity. Re-

stricting rail-related motor carrier operations to those

incidental to rail, it was felt, was necessary to prevent

rail domination of motor carriage and ultimately the

demise of responsive motor carrier operations along with

their inherently flexible service aspects.

However, we are convinced that elimination of the

“special circumstances” doctrine is required not only

because its stringent limitations on unrestricted rail-

affiliated motor carrier competition are inconsistent with

the overall procompetitive thrust of the amended act’s

licensing provisions, but also because the inherent advan-

tages of each mode of transportation are best preserved

by increased competition among carriers as endorsed by

the revised act.

In the past, the Commission found that the inherent

advantages of rail and motor transportation were best

preserved by erecting barriers to unrestricted motor car-

rier operations by rail affiliated motor carriers. We con-

clude that this is no longer the case. Increased competi-

tion endorsed by the revised act produces operating effi-

ciencies and more responsive and innovative services. It

sharpens the inherent advantages of each transportation

mode. For example, permitting rail-affiliate motor car-

riers to offer a full range of motor carrier services,

rather than only service limited to auxiliary-to-rail serv-

ice, enhances the carrier’s ability to compete with other,

unaffiliated motor carriers. The continuation of a policy

of imposing auxiliary-to-rail restrictions encumbers the

inherent advantages of the motor carrier. Clearly, the

15a

strong endorsement of competition between and among

carriers and overall reduced regulatory control expressed

in the MCA and Staggers Act are incompatible with the

method of preserving the inherent advantages of each

mode of transportation under the “special circumstances”

doctrine by inhibiting rail-affiliated motor operations.

The policy embodied in the “special circumstances”

doctrine of imposing auxiliary-to-rail restrictions upon

motor carrier authority, albeit motor authority issued to

a railroad or rail affiliate, is entirely contrary to the

congressional mandate for more efficient, less restricted

operating authority expressly embodied in the MCA at 49

U.S.C. 10922(h). See H.R. Rept. 1069 supra, at pp. 17-

18. Moreover, in Removal of Restrictions, Motor Car. of

Property, 1382 M.C.C. 374 (1980), the Commission found

that inefficient operating restrictions similar to those

which define auxiliary-to-rail service were inconsistent

with the licensing provisions of the MCA and the Com-

mission’s established procedures pursuant to 49 U.S.C.

10922(h) for their removal from existing authorities.

See the restriction Removal Rules at 49 CFR Part 1165.¢

While the Removal of Restrictions decision deferred

judgment concerning the validity of auxiliary-to-rail re-

strictions because of the statutory basis for their im-

position in acquisition proceedings (supra, at p. 394),

nevertheless the general findings in that decision are

instructive in our decision to eliminate the “special cir-

cumstances” doctrine with its attendant policy of impos-

ing these restrictions.

Auxiliary-to-rail restrictions are incompatible with the

revised act’s mandate for efficient motor carrier opera-

tions authorized under sections 10922 and 10923. See

H.R. Rept. 1069, supra, at pp. 17-18. See also section

6 Former 49 CFR Part 1137 has been redesignated as part 1165

in Ex Parte No. 55 (Sub-No. 55), Revision and Redesignation of

The Rules of Practice, 47 F.R. 49534 (1982).

16a

10922(b) (i) (B) (v) which mandates removal of restric-

tions contrary to the public interest; No. MC-78786 (Sub.

No. 268), Pacific Motor Trucking Co. Ext. of Common

Carrier Operations (not printed), served April 19, 1981,

(restrictions were removed because the public interest no

longer required them). The rail bill of lading and the

prior or subsequent rail movement restrictions prevent

flexible interlining abilities and a comprehensive common

carrier service to the general public and complete con-

tract carrier service to contract shippers. The restric-

tion of service to points on rail lines and exclusion of

service at “key points” on the line produces fragmented

operations which waste fuel resources. Moreover, the

restriction which enables the Commission to modify agree-

ments between railroads and their affiliated motor car-

riers is, we believe, inconsistent with the Staggers Act’s

mandate for minimized Federal control of the rail trans-

portation system. In short, motor carrier operations

which are limited by auxiliary-to-rail restrictions are

simply incompatible with the revised act’s conception of

what responsive motor carriage should be.

Moreover, among the major objectives of both the

MCA and the Staggers Act is the promotion of inter-

modal transportation. Specifically, the MCA amends the

national transportation policy expressing Congress’ in-

tent “to promote competitive and efficient transportation

services in order to * * * promote intermodal transporta-

tion.” 49 U.S.C. 10101(a)(7)(H). Moreover, section

213 of the Staggers Act codified at 49 U.S.C. 10505 (f)

grants specific authority to the Commission to exempt

from regulation transportation provided by a rail car-

rier as part of a continuous intermodal movement.’

7In Improvement of TOFC/COFC Regulation, 364 I.C.C. 731

(1981), affirmed in part sub nom. American Trucking Ass’ns, Inc.

v. ICC, 656 F.2d 1115 (5th Cir. 1981), the Commission exempted

rail and truck service provided by rail carriers in connection with

TOFC and COFC service (in trucks that are owned and operated by

the railroad itself). In Ex Parte No. 230 (Sub-No. 6), Jmprove-

17a

Clearly, these are further expressions on the part of

Congress that rail-motor competition and coordination

are the best methods of preserving the inherent advan-

tages of these modes of transportation.

Consequently, the probable imposition of auxiliary-to-

rail restrictions under the “special circumstances” doc-

trine could not help but dampen enthusiasm for the de-

velopment of intermodal operations. Railroad-affiliated

comments argue persuasively that these restrictions pre-

vent their provision of comprehensive intermodal serv-

ice to their customers. Variance from these restrictions

could formerly be had only after an extensive eviden-

tiary hearing and a showing of “special circumstances.”

In addition, the Commission has in the past exercised its

reserved jurisdiction to retroactively impose additional

restrictions on ongoing operations. See United States v.

Rock Island Motor Transit Co., 340 U.S. 419 (1950). The

“special circumstances” doctrine results not only in un-

necessary and inefficient operating restrictions on exist-

ing rail-affiliated motor carriage, but also in restrictions

on rail carrier planning and strategy, resulting in public

harm through the failure of rail carriers to institute

what might otherwise be useful intermodal services.

Elimination of the “special circumstances” doctrine will

reduce this “chilling effect” on rail-motor operations al-

lowing fuller development of the inherent advantages of

the various modes of transportation through increased in-

termodal operations and competition.

Therefore, Commission treatment of rail-related motor

carrier authority applications will not include the im-

position of auxiliary-to-rail restrictions. Accordingly, in

ment of TOFC/COFC Regulation (Railroad—A filiated Motor Car-

riers), (not printed), served February 19, 1981, we are considering

extending this exemption to rail-affiliated motor carriers and all

other motor carriers. Nothing in our findings here should be con-

strued as a prejudgment of the issues concerning rate exemptions

for various intermodal services involved in that proceeding.

18a

the future the Commission will treat the motor authority

applications of rail-related carriers under the general

standards of the revised licensing provisions of 49 U.S.C.

10922 and 10923.

In light of our decision here, restrictive authority ob-

tained in the past by rail carriers in licensing proceedngs

will be considered to be within the ambit of the expe-

dited restriction removal procedures at 49 CFR part

1165 for removal of existing auxiliary-to-rail restric-

tions. An application to remove auxiliary-to-rail restric-

tions imposed in a licensing proceeding shall contain (1)

a reference to this proceeding as the Commission decision

which found the restriction inappropriate (See 49 CFR

1655.10(b) (5) and 1165.25(7)), (2) a certification that

the authority sought to be broadened was _ received

through a licensing proceeding, and (3) the docket num-

ber of the licensing proceeding. Furthermore, because

the Commission has continued to impose these restric-

tions, where appropriate, after the MCA, we will waive

the regulation (49 CFR 1165.2) which limits restriction

removal filings to certificates and permits issued pursu-

ant to applications filed before December 28, 1980, to al-

low rail-affiliated carriers to reform authority issued

pursuant to applications filed before the effective date

of this policy statement.

REGULATORY FLEXIBILITY ANALYSIS

We conclude that this policy statement will have a

modest, yet beneficial economic impact upon an unascer-

tainable number of small entities. The elimination of

the “special circumstances” doctrine will make it eas‘er

for small, rail-related motor carriers to obtain operatiy ©

authority unencumbered by inefficient and unduly re«t

tive auxiliary-to-rail restrictions. The compret="r:.«

and flexible motor carrier and rail-motor intermodz’

erations which this change in policy is likely to produ

will provide more responsive and flexible service © ”

small as well as large shippers.

19a

ENERGY AND ENVIRONMENTAL

CONSIDERATIONS

This policy statement does not significantly affect the

quality of the human environment or conservation of

energy resources.

AUTHORITY FOR ACTION

This statement is issued pursuant to 49 U.S.C. 10101,

10101la, 10922, 10928, and 5 U.S.C. 553.

INDEX

The subjects involved in this policy statement are:

Motor Carriers

Railroads

Intermodal Transportation

COMMISSIONER ANDRE, joined by COMMISSIONER STER-

RETT, concurring:

I concur in the issuance of this policy statement. It

marks a long overdue change in the Commission’s atti-

tude toward intermodai licensing. The only reservation

that I have is that the statement does not announce a

change in intermodal acquisition policy. As it now stands

the Commission has cleared the way for interested rail-

roads to expand into general trucking. But the method

of expansion has been restricted to new operations un-

der new authorities. The alternative of expansion

through the acquisition of an existing trucking company

remains largely foreclosed. The foreclosure is not based

on any judgment about the relative impact on the public

interest of new entry as opposed to acquisition. As far

as I can discern, the foreclosure is caused by the fact

that acquisitions are governed by a specific section of the

Interstate Commerce Act. Because additional legal is-

sues are raised, acquisitions are to be treated separately

at some future time.

20a

I think the separation of these investment alternatives

is unwise. The Commission and the courts have long

treated licensing and acquisition policies as if they were

necessarily related. Continued reconciliation of these poli-

cies is required to avoid the charge that the Commission

has arbitrarily reversed itself. Moreover, the choice be-

tween one type of entry and the next is not one that the

Commission should make unless commanded to do so by

law. There is no way of predicting the extent of com-

mercial interest in integrated intermodal operation, but

to the extent that there is some pent-up demand it has

now been channeled into the formation of new operations

which must compete with existing firms to gain market

share. Maybe that is all to the good, but in the current

slumping market there is the equally plausible argument

that buying a struggling firm will be less expensive and

no less effective. The latter course may also be less dis-

ruptive of existing labor and investor relationships. But

in any case it is a-judgment that the market is better

suited to make correctly, since the Commission’s delibera-

tions center on the niceties of the law rather than the

dictates of commercial efficiency.

Of course, if the Interstate Commerce Act forbids ex-

pansion through acquisition, then the best course is to

proceed in the licensing area, as we have done, and hope

for approval from the appellate courts. The law does

not require that result however, or at least I do not read

it to do so. A more detailed presentation will, I hope,

make it very clear why a change in both licensing and

acquisition policy is the natural outcome of recent com-

mercial and legislative developments.

A railroad cannot lawfully acquire a regulated motor

carrier without receiving approval from this Commission.

In addition to general standards, the Interstate Com-

merce Act contains a provision which applies specifically

to acquisitions of a motor carrier by a rail carrier.

2la

When a rail carrier, or a person controlled by or

affiliated with a rail carrier, is an applicant and the

transaction involves a motor carrier, the Commission

may approve and authorize the transaction only if it

finds that the transaction is consistent with the pub-

lic interest, will enable the rail carrier to use motor

carrier transportation to public advantage in its op-

erations, and will not unreasonably restrain competi-

tion.®

This provision was designed to give the Commission the

power to protect the motor carrier industry from rail-

road domination. It was considered at the time to

be > FF &

important to the welfare and progress of the motor

carrier industry that the acquisition of control of

the carriers be regulated by the Commission so that

the control * * * not get into the hands of other

competing forms of transportation, who might use

the control as a means to strangle, curtail, or hinder

progress in highway transportation for the benefit

of other competing transportation.? [Emphasis sup-

plied. ]

Consistent with the legislature’s initial views, the

Commission has normally declined to approve the ac-

quisition of a motor carrier by a railroad unless it is

shown that the motor carrier service will be either “aux-

8 The provision appeared first as section 218 of the Motor Car-

rier Act of 1935; the Transportation Act of 1940 reincorporated

the provision as section 5(2)(b); and, as a result of the codifica-

tion of the Interstate Commerce Act in 1978, section 5(2) (b)

became section 11344. In the 1935 version rail carriers had to

demonstrate that their applications would “promote the public

interest”; this burden was relaxed to “consistent with the public

interest” in the 1940 act. The provision is now found in 49 U.S.C.

11344(c).

®79 Congressional Record 12685, July 31, 1935.

22a

iliary to or supplemental of” the acquiring carrier’s rail

service.” The Commission believed that it would not be

conducive to * * *

future healthful competition between rail and truck

service * * * to give the railroads free opportunity

to go into the kind of truck service which is strictly

competitive * * * rather than auxiliary to their rail

services * * * (because * * * the financial and so-

liciting resources of the railroads could easily be so

used in this field that the development of independ-

ent service would be greatly hampered and re-

stricted * * *)™

The appellate courts ultimately declared that certain

amendments passed in 1940 reflected congressional knowl-

edge of the Commission’s restrictive interpretation of

rail-motor entry policy and amounted to legislative ap-

provul of the Commission’s course. The linchpin of this

statutory argument for a protective approach to inter-

modal competition became the statement in 1940 national

transportation policy to the effect that the Commission

should regulate to preserve the inherent advantages of

the differing modes.

Amendments to the Interstate Commerce Act have

progressively reflected the profound changes in commer-

cial circumstances that have taken place in the years

since 1940. In particular, Congress has eliminated the

intermodal protectionism that was once considered a near

universal requirement of the national transportation pol-

icy. As the full Commission’s statement notes, the 1976

Railroad Revitalization and Regulatory Reform Act al-

tered the ICC ratemaking framework to allow sensible

10 See Pennsylvania Truck Lines, Inc.—Control—Barker M. Frt.,

1 M.C.C. 101, 111 (19386) and 5 M.C.C. 9, 11 (1987); Rock Island

Motor Transit—Purchase—Spears, 39 M.C.C. 59, 69.

11 Pennsylvania Truck Lines, Inc.—Control—Barker, supra, 1

M.C.C. at 111-12.

23a

price reductions by railroads. Before enactment of the

4R Act, rail rates were typically held far above variable

costs to protect what were then thought to be the inher-

ent advantages of competing modes. Congress reserved

this approach in 1976 by precluding the Commission from

finding a railroad rate unreasonable if it covers the vari-

able cost of carrying the Traffic. No otherwise rational

rate of a railroad can now be denied simply to protect

the markets of another mode.”

In effect the 4R Act eliminated the “inherent advan-

tages” argument from railroad ratemaking. This devel-

opment is not only a sensible one, but one with im-

portant implications for entry and acquisition policy as

well. The courts and the Commission have consistently

emphasized that the act must be read as a whole, mean-

ing that some consistency should be sought in policy in-

terpretation. Therefore, if the restraints have been taken

off price competition, there is at least good reason to

suggest that entry policy should not reflect a protection-

ist cast.

Whatever doubts the foregoing analysis might have

met in 1976, the passage of the Motor Carrier Act and

the Staggers Rail Act in 1980 confirm the fact that entry

protection is no longer the hallmark of public transporta-

tion policy. The national transportation policy has been

twice amended to elevate competition to the role of prin-

cipal regulator of price and entry behavior. Specific en-

actments shift the burden of persuasion to those who seek

to impose anticompetitive restrictions on motor licenses,

and still other amendments promote intermodal opera-

tions. Most of the pertinent sections of the new laws

have been examined in the Commission’s principal state-

12 See, American Commercial Lines, Inc. ¥. Louisville & Nashville

R. Co., 872 U.S. 744 (1968).

18 See Public Law 94-210, 94th Cong., 2d Sess., sections 202(b)

and 206.

24a

ment and there is no need to dwell on them further. The

crucial point is that reference to the preservation of in-

herent modal advantages in the national transportation

policy has become far too slim a [r]eed to support a pro-

hibitive entry regime. It is too slim because the overall

policy direction of the Interstate Commerce Act has

changed markedly, and because technological advances in

internal c{o] mbustion, tire manufacture, roadbuilding and

the like have been, in retrospect, more than sufficient

guarantors of the real advantages of motor freight.

The problem now is whether the more specific provision

in section 11344(c) comm[a]nds a split in entry policy,

establishing a statutory preference for new licenses over

acquisition of existing operations. The Commission has

announced its intention to look into the matter, but the

announcement is problematical. It gives industry little

information as to timing and even less indication as to

how the Commission presently views rail-motor acquisi-

tions. What is worse is the possibility that the pendency,

or in this case the potential pendency, of a general in-

vestigation may foreclose a decision on some application

that surfaces in the interim. Industry could be excused

if it abandoned the planning of otherwise rational ac-

quisitions because of the government’s bias in favor of

new licenses—a bias that is the creature of inaction.

To attempt to avoid this interference with investment

planning I would like to offer some preliminary thoughts

on the proper interpretation of section 11344(c) in the

post Staggers Act era. Certainly I cannot speak for the

Commission, and even for myself I would like to reserve

some room for reconsideration when a case in controversy

comes up. Nevertheless, since I believe that section

11344(c) is open to a procompetitive interpretation it is

important to make these observations now.

Section 11344(c) requires that rail-related motor ac-

quisitions be examination (beyond the general require-

25a

ments applicable to all acquisition applications) on the

issues of whether the railroad can use the motor carrier

to public advantage in its operations, and whether the

acquisition threatens an unreasonable restraint of trade.

The first issue seems to me straightforward up to the

point of the phrase “in its operations.” Clearly inter-

modal integration meets the criterion of public advan-

tage. At least Congress thinks so, and has repeatedly so

legislated. But would a general motor freight operation

that never, or only occasionally exchanged traffic with a

rail parent be used to public advantage “in its opera-

tions,” meaning the operations of the railroad? One can

see scholastics lining up to defend the proposition that

“in its operations” requires a close physical connection

with the running of trains. Admittedly it is just such

an interpretation that has governed for decades.* But

it is not the only satisfactory interpretation, nor even the

interpretation that immediately commends itself to some-

one coming to the subject for the first time.

Obviously the issue is what are “its operations’? In

an environment that is increasingly populated by inte-

grated transportation companies the answer would seem

to be “in the marketing and delivery of transportation

service.” Consider the fact that the Staggers Act gave

the ICC the explicit authority to exempt intermodal op-

erations provided»by rail carriers.“ The obvious impli-

cation is that Congress sees railroad operations as in-

creasingly integrated between truck and rail. Even

more to the point is the litigation challenging the Com-

mission’s exercise of this exemption authority. The Com-

mission’s exemption was formulated so relief from regu-

lation reached not only rail transportation, but transpor-

141It is not altogether clear whether this interpretation has been

applied unfailingly. Cases such as Burlington Truck Lines, Inc.—

Purchase—Pirnie, 85 M.C.C. 363 (1960) indicate that it has not.

45 Public Law 96-448, section 213 amending 49 U.S.C. 10505.

26a

taiion provided by truck owned by the railroads. The

trucking industry challenged this extension on literal

grounds, arguing that under the statute the transporta-

tion had to be “provided by a rail carrier” and truck

carriage could not qualify. The reviewing court affirmed

the Commission’s broader interpretation, stating that the

truck portion of intermodal service is transportation pro-

vided by a rail carrier, the use of trucks notwithstand-

ing.** While there is some roughness in the analogy, it is

at least fair to say that the phrase “in its operations” is,

as is the phrase “provided by a rail carrier,” open to an

interpretation that does not bind the freight to trains.”

Adopting this broader meaning will not result in read-

ing “in its operations” out of the act. There is no ques-

tion that the Interstate Commerce Act does require a

rail carrier to make beneficial use of a motor carrier if

it buys one. This is not a surprising requirement since

at the time of the 1935 enactment there was widespread

concern that the railroads were inclined to use any avail-

able tactic to protect their markets. Buying up a com-

petitor and selling off its assets piecemeal is, in hind-

sight, no more unlikely than others among the predatory

16 American Trucking Associations, Inc. v. ICC, 655 F.2d 1115

(5th Cir. 1981).

17 Before leaving the Staggers exemption section another point is

worth addressing by way of anticipation. Admittedly the provision

prohibits the use of the exemption power to authorize intermodal

ownership that would be unlawful under the terms of section

11344(c). That prohibition does not, however, have any substan-

tive impact on the meaning of section 11344(c), or reflect a con-

gressional commitment to any single interpretation of that section

—particularly an unnecessarily restrictionist interpretation that

would run counter to the underlying purposes of the new law. As

the House stated “This (limitation on the exemption provision)

should not, however, be construed as a prohibition of the Commis-

sion’s authority, to approve intermodal ownership consistent with

section 1344.” See, Comm. on Interstate and Foreign Commerce,

Report on the Rail Act of 1980, H.R. Rept. 96-1035, at p. 60, 96th

Cong., 2d Sess. (1980).

27a

strategies ascribed to railroads. Reading section 11344 (c)

to prohibit this kind of conduct preserves its prophylactic

purpose, but avoids ascribing to it such scope that it pre-

vents useful and efficient integration between companies

that have many overlapping marketing, operational and

administrative functions. If such a reading departs from

precedent, it is an evolutionary departure which can be

supported by many of the same legislative developments

that lead to the conclusion that rail-motor licensing policy

should be made less restrictive.

As to the requirement that the Commission avoid re-

straints of trade by denying such applications as threaten

them, it might be enough to say that such is Commission

policy regarding all motor carrier acquisitions cases.’®

Furthermore, since acquisitions are considered on a case-

by-case basis, an adequate record can be developed to

determine if any special anticompetitive potential exists.

In short, the admonition to avoid restraints of trade, like

the requirement of use in operations, can be given a

meaningful interpretation without imposing on it the

overwhelming restrictiveness that current policy implies.

These remarks have been offered in the hope that they

will advance the Commission and the industry to a more

rapid conclusion on the issue of rail-motor acquisitions.

They are not intended to diminish the importance of the

licensing policy statement on which there is unanimous

accord. But the Commission’s jurisdiction runs beyond

licensing to mergers, consolidations, even exit from the

marketplace. It is important to keep a coordinated view

of these responsibilities to avoid the creation of distorted

investment incentives. Market entry through the acquisi-

tion of an existing firm can be the fastest and most effec-

tive way of bringing new energy and new ideas into the

marketplace. In some instances it may be the only cost-

effective way.

18 See, Red Ball Motor Frt. Inc.—Control and Merger—Spector,

127 M.C.C. 787 (1980).

28a

I would offer one final observation. I am in complete

agreement with the Commission’s decision to permit the

restriction removal procedures to be used by rail-

affiliated motor carriers. Nevertheless, from an agency

standpoint, the availability of restriction removal is com-

pletely severable from the issue of new licensing through

the standard application process. No harm can come

from proceeding with the consideration of new applica-

tions even if the availability of the restriction removal

process cannot be guaranteed.

By the Commission, Chairman Taylor, Vice Chairman

Gilliam, Commissioners Sterrett, Andre, Simmons, and

Gradison. Commissioner Andre, joined by Commissioner

Sterrett, concurred with a separate expression.

AGATHA L. MERGENOVICH,

Secretary.

[SEAL]

29a

APPENDIX B

UNITED STATES COURT OF APPEALS

FIFTH CIRCUIT

Nos. 81-4389, 83-4039

AMERICAN TRUCKING ASSOCIATIONS, INC., et al.,

Petitioners.

Vv.

INTERSTATE COMMERCE COMMISSION and

UNITED STATES OF AMERICA,

Respondents.

Jan. 20, 1984

Petitions for Review of Orders of the

Interstate Commerce Commission

Before GARZA, WILLIAMS and HIGGINBOTHAM,

Circuit Judges.

PATRICK E. HIGGINBOTHAM, Circuit Judge:

I

In these two consolidated cases, we consider whether

the Interstate Commerce Act, as revised by the Motor

Carrier Act of 1980 and the Staggers Rail Act of 1980,

requires the Interstate Commerce Commission to adhere

to its longstanding policy in motor carrier licensing pro-

ceedirgs of generally restricting rail-affiliated motor car-

riers to operations “auxiliary to or supplemental of” the

rail operations of the company, unless the particular rail-

affiliated trucking company can demonstrate “special cir-

cumstances” that justify an exception to the general rule.

30a

We conclude that the revised I.C.A. does not require this

singling-out of rail-affiliated motor carriers for especially

restrictive treatment in licensing proceedings. We deny

the petition to review the Commission’s decision to ab-

rogate the old “auxiliary to or supplemental of” general

rule and its “special circumstances” exception in licensing

proceedings under 49 U.S.C. § 10322. See Ex Parte No.

MC-156, Applications for Motor Carrier Operating Au-

thority by Railroads and Rail Affiliates, 132 M.C.C. 978

(1982) (C.I. 22). It follows that we deny the petition

to review the Commission’s granting of unrestricted

motor carrier operating authority to Pacific Motor Truck-

ing Company, a rail-affiliated motor carrier, without a

finding of “special circumstances.” See MC-78786 (Sub-

No. 281) F, Pacific Motor Trucking Company Extension—

Nationwide General Commodities (unpublished).

PMT, a wholly-owned subsidiary of Southern Pacific

Transportation Company, a rail carrier, applied for na-

tionwide operating authority for its trucking business.

An [I.C.C. Review Board granted PMT’s application and

the Commission confirmed without a finding of special

circumstances that would justify the broad grant of op-

erating authority beyond auxiliary-to-rail service. One of

the petitions before us to review and set aside the Com-

mission’s order followed. During the pendency of our re-

view, the Commission began to reexamine the validity of

the special circumstances doctrine in light of the 1980

amendments to the I.C.A. A panel of this court heard

PMT’s petition, but, citing the doctrine of primary juris-

diction, stayed proceedings until the Commission ruled.

American Trucking Associations, Inc. v. I.C.C., 682 F.2d

487 (5th Cir. 1982). The Commission decided that a

rail-affiliated trucking company no longer needs to prove

special circumstances to justify an unrestricted grant of

authority, and the other petition before us followed. ATA

accepts that we ought to uphold PMT’s grant if we up-

hold the Commission’s decision to no longer apply the

special circumstances doctrine in licensing proceedings.

8la

Therefore the only issue before us is whether the I.C.A.

requires application of the special circumstances doctrine

in all licensing proceedings.

II

Before the Motor Carrier Act of 1935, the trucking

industry was unstable economically, dominated by

ease of competitive entry and a fluid rate picture.

And as a result, it became overcrowded with small

economic units which proved unable to satisfy even

the most minimal standards of safety or financial

responsibility. So Congress felt compelled to require

authorization for all interstate operations to pre

serve the moicr transportation system from over-

competition ....

American Trucking Assns. v. United States, 344 U.S. 298,

73 S.Ct. 307, 97 L.Ed. 337 (1953). Congress in 1935

responded by raising barriers to expansion or entry in

the trucking industry. The 1935 Act authorized the Com-

mission to issue a certificate of public convenience and

necessity to a qualified carrier

if it is found that the applicant is fit, willing and

able properly to perform the service proposed and to

conform to the provisions of this part and the re-

quirements, rules and regulations of the Commission

thereunder, and that the proposed se:vice . . . will

be required by the present or future public conven-

ience and necessity.

Pub. L. No. 74-255, §207(a), 49 Stat. 551-52 (1935).

In Pan-American Bus Lines the I.C.C. developed the

measures for granting a certificate:

whether the new operation or service will serve a

useful public purpose, responsive to a public demand

or need; whether this purpose can and will be served

as well by existing lines or carriers; and whether it

can be served by applicant with a new operation or

32a

service proposed without endangering or impairing

the operations of existing carriers contrary to the

public interest.

1 M.C.C. 190, 203 (19386). Under the traditional ap-

proach, burdens of proof of eligibility for a certificate

fell on the applicant. See, e.g., John Novak Contract

Carrier Application, 108 M.C.C. 555 (1967). A certifi-

cate became a grant of a francise protecting motor car-

riers from threatening competition. See Anderson, Jer-

man & Constantin, Railroad versus Motor Carrier View-

points on Regulatory Isswes, 45 1.C.C.Prac.J. 294, 302-03

(1978). Inadequacy of existing service was the funda-

mental inquiry in deciding public convenience and nec-

essity, see, e.g., Southern Kan. Greyhound Lines, Inc. v.

United States, 184 F.Supp. 502, 509-10 (W.D.Mo. 1955) ;

Hudson Transit Lines v. United States, 82 F.Supp. 153,

157 (S.D.N.Y. 1948); an application proposing no trans-

pertation services not already available over the lines of

existing carriers was ordinarily denied. See, e.g., Worthen

Extension—Cranberries, 117 M.C.C. 470, 477-78 (1972) ;

Walter C. Benson Co., Inc., Extension—N.Y., N.J. & Pa.,

61 M.C.C. 128, 1380 (1952). Furthermore, the Commis-

sion generally held that a lowering of rates could not be

considered in determining whether a proposed service was

in the public interest. Roadway Express, Inc., Extension

—Eastern Md. Counties, 120 M.C.C. 578, 584 (1974);

Southland Produce Co. Contract Carrier Application, 81

M.C.C. 625, 628 (1959).

Protecting truckers from other truckers was only one

part of the regulatory scheme. Protecting motor carriers

from railroads rounded out the picture. The Commission

stated the anti-railroad rationale in the original deci-

sion establishing the general policy in licensing proceed-

ings of imposing auxiliary-to-rail restrictions on rail-

affiliated trucking companies:

[RJailroad controlled motor carriers might ulti-

mately be able to prevail over independent competi-

33a

tors, not because of any superiority in service or op-

eration, but through their ability to draw upon the

financial and other resources of their parent compa-

nies, and . . . the motor-carrier industry is more

likely to develop in inherent strength and efficiency

if it continues, as in the past, to remain largely in

independent hands.

Kansas City S. Transport Co., Inc., Com. Car. Applica-

tion, 10 M.C.C. 221, 237 (1938).

The statutory footing of the restrictions on rail-

affiliated trucking companies was what are now 49 U.S.C.

§§ 11844(c), which enacted high barriers to rail compa-

nies’ acquisition of trucking companies, and 10101(a),

the National Transportation Policy, containing the state-

ment that one policy was to “recognize and preserve the

inherent advantages of each mode of transportation.” *

The language of both continues essentially unchanged into

the present Act.

The acquistions section proved to be particularly in-

fluential in establishing a policy of protecting trucking

from railroads because it explicitly allowed rail carriers

accuisition of a motor carrier only if the motor carrier

was to operate under 2*:*!‘‘ary-to-rail restrictions. In

pertinent part, § 11344(c) ss=as:

[W]hen a rail carrier, or person controlled by or

affiliated with a rail carrier, is an applicant and the

transportation involves a motor carrier, the commis-

sion may prove and authorize the transaction only

if it finds that the transaction is consistent with the

public interest, will enable the rail carrier to use

motor carrier transportation to public advantage in

1 The predecessors to §11844(c) were §5(2)(b) of the I.C.A.

as amended in 1940, and § 218(a) of the Motor Carrier Act of 1935.

Section 10101 (a)’s predecessors were § 202(a) of the Motor Carrier

Act of 1935, and the National Transportation Policy as prefixed

to the I.C.A. of 1940, 54 Stat. 899.

34a

its operations, and will not unreasonably restrain

competition.

The phrase, “to use service by motor vehicle in its opera-

tions,” has been read as expressing a congressional intent

that railroads were at least generally not to be allowed

to acquire trucking companies unless they were to be used

in rail-related activities.*

The licensing requirements did not explicitly provide

for auxiliary-to-rail restrictions, but nearly from the

start the Commission read the restraints of the acquisi-

tions section into its licensing policy. Kansas City S.

Transport Co., Inc., Com. Car. Application, 10 M.C.C. at

237. The Commission interpreted § 11344(c)’s language

to mean, not only that railroads could not acquire, but

also that they could not generally operate as unrestricted

trucking companies. As part of this reading the Com-

mission also pointed to the National Transportation Pol-

icy’s requirement of preserving “the inherent advantages

of each mode,” under the logic that, withow: protection

2 See Commissioner Eastman, Hearings before Subcommittee of

the Committee on Interstate Commerce, United States Senate, on

S. 3606, 75th Cong., 3d Sess. 23 (1938 hearings to consider amend-

ments to the Motor Carrier Act of 1935):

The reason for that proviso was that at the time when this act

was under consideration by your committee, there was a feel-

ing on the part of many that railroads, for example, ought

not be permitted to acquire motor carriers at all. Jt was

pointed out, in opposition to that view, that there were many

cases where railroads could use motor vehicles to great ad-

vantage in their operations, in substitution for rail service, as

many of them are now doing. Many railroad men, for example,

feel that the operation of way trains has become obsolete; that

the motor vehicle can handle such traffic between small stations

much more economically and conveniently than can be done by

a way train; and the motor vehicles are being used fn that way

by many railroads. The same is true of many terminal opera-

tions. The motor vehicle is a much more flexible unit than a

locomotive switching car, and it can be used to great advantage

with great economy in many railroad operations.

35a

against the railroads, the infant trucking industry might

not develop to its maximum extent. Railroads objected,

but in 1.C.C. v. Parker, 326 U.S. 60, 65 S.Ct. 1490, 89

L.Ed. 2051 (1945), and later in United States v. Rock

Island Co., 340 U.S. 419, 71 S.Ct. 382, 95 L.Ed. 391

(1950), the Supreme Court affirmed the Commission’s

power to condition a rail-affiliated trucking company’s

license with auxiliary-to-rail restrictions. In particular,

the Court noted that Congress had in 1940 reenacted the

“in its operations” language in full knowledge that this

language was also being applied in licensing proceedings.

Id, at 432, 71 S.Ct. at 390. Further, it backed up the

Commission’s interpretation of the National Transporta-

tion Policy, stating that “[{c]omplete rail domination was

not envisaged as a way to preserve the inherent advan-

tages of each form of transportation.” Jd. at 433, 71

S.Ct. at 390.

The next and predictable chapter in this regulatory

history was the Commission’s adoption of an exception to

its general rule. In Rock Island Motor Transit Co. Com.

Car. Application, 638 M.C.C. 91 (1954), the Commission

first applied the “special circums‘ances” exception. The

Commission held that unrestricced authority could be

granted to a rail-affiliated trucexing company if the rail-

affiliate could prove, (1) the grant would not restrain

competition, and, more imp ctantly, (2) the public inter-

est required the propose’ service, which already certifi-

cated carriers had not offered except where it suited their

convenience. Jd. at 102. Protestants appealed this deci-

sion, and in American Trucking Assns. v. United States,

355 U.S. 141, 149-50, 78 S.Ct. 165, 170-71, 2 L.Ed.2d 158

(1957), the Supreme Court affirmed the Commission’s

use of the special circumstances exception, stating:

Section 207 [the licensing section] . . . makes no

reference to the phrase “service . . . in its opera-

tions” used in § 5(2)(b) [the acquisitions section],

nor is there any language even suggesting a manda-

teenie

86a

tory limitation to service which is auxiliary or sup-

plementary. ...

The legislative history of the Motor Carrier Act

of 1935 gives no indication that § 213(a)(1), the

predecessor of §5(2)(b), was to be considered a

limitation on applications under § 207... .

In interpreting § 207, the Commission has accepted

the policy of § 5(2)(b) as a guiding light, not as a

rigid limitation... .

We conclude, therefore, that the Congress did not

intend the rigid requirement of § 5(2) (b) to be con-

sidered as a limitation on certificates issued under

§ 207.

Id. at 149, 78 S.Ct. at 170. Despite this language, the

Court reaffirmed that the licensing and acquisitions sec-

tions are interpretive brothers. The Court concluded:

We repeat . . . that the underlying policy of

§5(2)(b) must not be divorced from proceedings

for new certificates under § 207. Indeed, the Com-

mission must take ‘cognizance’ of the National

Transportation Policy and apply the Act ‘as a whole.’

But . . . we do not believe that the Commission acts

beyond its statutory authority when in the public in-

terest it occasionally departs from the auxiliary and

supplementary limitations in a § 207 proceeding.

Id. at 151-52, 78 S.Ct. at 171.

Three years later the Court struck down a perceived

Commission deviation from its use of the special circum-

stances doctrine. In American Trucking Assns. v. United

States, 364 U.S. 1, 6, 80 S.Ct. 1570, 1574, 4 L.Ed.2d 1527

(1960) (ATA II), “(tlhe critical issue raised... [was]

whether the Commission exceeded its statutory authority

by granting the permits in question to a railroad sub-

sidiary without imposing more stringent limitations than

it did.” Finding that “[{bJoth the Commission and this

87a

Court have recognized that Congress has expressed a

strong general policy against railroad invasion of the

motor field,” the Court reversed the Commission’s grant

of unrestricted authority to a rail-affiliated carrier where

the Commission had not found sufficient special circum-

stances to justify the grant. Jd. The Court noted that

“[{t]he Commission long ago concluded that the policy of

the transportation legislation requires that the standards

of [the acquisitions section] be followed as a general rule

in other situations, notably in application for common

carrier certificates of convenience and necessity.” Id.

The Court further stated that “the policy of opposition to

railroad incursions into the field of motor carrier service

. . . has not been implemented merely by way of a more

or less unguided suspicion of railroad subsidiaries, but

rather has evolved through a series of Commission deci-

sions from embryonic form into a set of reasonably firm,

concrete standards.” Id. at 7, 80 S.Ct. at 1574. As in the

case before us, it was argued in AT7‘A II that changed

conditions in the trucking and railroad industries had

obviated the need for the presumption against rail-

affiliated trucking companies. Nevertheless, the Court

said:

Appellees say these safeguards [erected to prevent

railroad domination of trucking] are no longer

needed, because indepeudent trucking is no longer an

“infant industry.” This is an immaterial argument

in this forum. We do not condemn the wisdom of the

Commission’s action. We simply say that the trans-

portation legislation does, and that the pardoning

power in this case belongs to Congress.

Id.

III

We may not set aside the Commission’s decision unless

it exceeds statutory authority or is “arbitrary, capri-

cious, an abuse of discretion, or otherwise not in accord-

ance with law.” 5 U.S.C. §706(2)(A); Batterton v.

38a

Francis, 482 U.S. 416, 425-26, 97 S.Ct. 2399, 2406, 53

L.Ed.2d 448 (1977). Even if an agency’s interpretation

would not be the one we would adopt if looking at a

ste*ute completely afresh, we ordinarily accept that

~gemcy’s interpretation of its own statute if the inter-

-yetation “has a reasonable basis in law.” Aberdeen &

Rockfish Railroad Co. v. United States, 682 F.2d 1092,

1096 (5th Cir. 1982), quoting Volkswagenwerk Aktienge-

sellschaft v. FMC, 390 U.S. 261, 272, 88 S.Ct. 929, 935,

19 L.Ed.2d 1090 (1968).

IV

Petitioners’ arguments against the Commission’s inter-

pretation are strong. Nevertheless, we are persuaded of

the reasonableness of the Commission’s position that the

new I.C.A., as amended in 1980, permits the abrogation

of the special circumstances doctrine in licensing proceed-

ings. We do not say that the new Act requires the Com-

mission to treat rail-affiliated licensing applicants on the

same footing as other applicants. We hold that the Com-

mission’s decision was permissible as measured by our

standard of review.

V

In a point-counter-point process the parties marshal

statutory sections to support their arguments. The basic

interpretive conflict nonetheless remains straightforward.

The Commission relies on Congress’ fundamental shift to

a deregulatory policy, as embodied in specific changes in

the licensing provisions and in additions to the broad

policy statements contained in the Act. The Commission

points to Congress’ new policy of encouraging “inter-

modal” transportation, and on changed conditions in the

motor carrier and rail industries. Petitioners mainly rely

on the retention of the acquisitions section in the same

form since 1940, and the retention in the National Trans-

portation Policy of the requirement of preserving the in-

herent advantages of each mode, to support the conten-

tion that the Act still embodies the old anti-railroad pol-

39a

icy in licénsing proceedings that these two statutory sec-

tions have always been interpreted to require.

Petitioners’ strongest argument is that repeal of the

special circumstances doctrine in licensing proceedings

would fall into the category of a “repeal by implication,”

and that the Commission’s touted statutory changes are

not enough to meet the stiff burden finding an implied

repeal involves. The argument is that the special circum-

stances doctrine in licensing proceeding was recognized

by the Supreme Court to be statutorily required by the

acquisitions section and the Nation Transportation Pol-

icy, and that the recent changes in the I.C.A. do not con-

stitute an “irreconcilable conflict” necessary to find an

implied repeal of the statutory requirement. See Kremer

v. Chemical Construction Corp., 456 U.S. 461, 468, 102

S.Ct. 1883, 1890, 72 L.Ed.2d 262 (1983).

This argument has special force because of the broad

language quoted above in AT7'A II that “the transporta-

tion legislation” required the application of the special

circumstances doctrine in that case. Yet the ATA II

Court was faced not with the Commission’s overruling of

the special circumstances doctrine in licensing proceed-

ings in general, as here, but rather with only the limited

circumstances of the Commission’s ¢2parture in a single

case from its longstanding policy of applying the special

circumstances doctrine in licensing proceedings. We can-

not find from the Court’s opinion its own interpretation

that the “in its operations” language of the acquisitions

section was in effect also in the licensing section. Scat-

tered phrases in ATA II and in the previous Court opin-

ions may be read to indicate that the Court adopted its

own interpretation of the I.C.A. as requiring the special

circumstances doctrine in licensing. But in no case was

the Court’s focus clearly on the importance of the dis-

tinction between the Court’s approval of a Commission

interpretation and the Court’s adoption of an interpreta-

tion themselves. In the face of the Court’s clear espousal

40a

of a philosophy of according regulatory agencies maxi-

mum flexibility, see American Trucking Associations,

Inc. v. Atchison, Topeka & Santa Fe Railway Co., 387

U.S. 397, 416, 87 S.Ct. 1608, 1618, 18 L.Ed.2d 847

(1967), we believe the Court’s opinions can most fairly

be read as approving the Commission’s interpretation of

its statute to require that the restrictions of the acquisi-

tions section also be applied in the licensing area, and

holding the Commission to this interpretation in all cases

in the absence of the Commission’s overruling of its pol-

icy in general. We do not believe the Supreme Court

went as far as to state according to its own interpreta-

tion of the I.C.A. that the restrictions of acquisitions

proceedings also had to be applied in licensing proceed-

ings.

That the special circumstances doctrine in licensing

was not held by the Court to be statutorily required, but

rather simply a Court-approved Commission interpreta-

tion of its statute, answers petitioners’ efforts to require

the Commission to demonstrate a repeal by implication.

The Commission need not meet the difficult burden of

proving that the new L.A. provisions present the “ir-

reconcilable conflict” necessary to find a repeal by impli-

cation. Instead the Commission must meet the much

easier burden necessary to justify a change in a long-

standing policy or interpretation by an agency of its

statute.

Courts usually accord great weight to longstanding

policies and interpretations announced by an agency,

closely scrutinizing departure from agency precedent.

See, e.g., NLRB v. Bell Aerospace Co., 416 U.S. 267, 274-

75, 94 S.Ct. 1757, 1761-62, 40 L.Ed.2d 134 (1974) ; Zemel

v. Rusk, 381 U.S. 1, 11-12, 85 S.Ct. 1271, 1278, 14 L.Ed.

2d 179 (1965).* On the other hand, as the Court noted

3 Petitioners argue that, in addition to the normal weight given

to longstanding policies and interpretations, the “doctrine of reen-

actment” should apply. The argument is that Congress’ reenact-

4la

in American Trucking Associations, Inc. v. Atchison,

Topeka & Santa Fe Railway Co., 387 U.S. 397, 416, 87

S.Ct. 1608, 1618, 18 L.Ed.2d 847 (1967),

[T]he Commission, faced with new developments or

in light of reconsideration of the relevant facts and

its mandate, may alter its past interpretations and

overturn past administrative rulings and practices

. . . « Regulatory agencies do not establish rules of

conduct to last forever; they are supposed, within

the limits of the law and of fair and prudent ad-

ministration, to adopt their rules and practices to the

Nation’s needs in a volatile, changing economy. They

are neither required nor supposed to regulate the

present and the future within the inflexible limits of

yesterday.

Given these principles and in light of the changes in

both the industries involved and the I.C.A., we find rea-

sonable the Commission’s interpretation of its statute as

allowing abandonment of the special circumstances doc-

trine in licensing proceedings.

VI

Under the old Act, the focus of the licensing provi-

sions was on protection of already-operating truckers

from new competitors. The new Act takes a radically

ment of the “in its operations” and “inherent advantages” language

after the Commission’s establishment of the special circumstances

doctrine in licensing proceedings precludes a subsequent change by

the Commission. To bring the “doctrine of reenactment” into play,

however, Congress must not orily be aware of the agency’s interpre-

tation, but must give some affirmative indication of its intent to

preclude an agency change in interpretation. Commissioner v.

Glenshaw Glass Co., 348 U.S. 426, 481-82, 75 S.Ct. 478, 476-77,

99 L.Ed. 483 (1955); Ryder Truck Lines, Inc. v. United States,

716 F.2d 1369, 13880 n. 14 (11th Cir. 1983); Ass’n of Am. R.R. v.

I.C.C., 564 F.2d 486, 498 (D.C.Cir. 1977). We see no such affirma-

tive indication here.

424

different, deregulatory approach in its licensing provi-

sions. The new licensing section as applied to motor car-

riers of property retains only the old “fitness” require-

ment, and further requires only that the applicant prove

that the proposed operations “will serve a useful public

purpose, responsive to a public demand or need... ..”

49 U.S.C.A. § 10922(b) (1) (B) (West Supp. 1983). In

effect, this language codifies the first Pan-American cri-

terion of useful public purpose and deletes the second

and third Pan-American criteria of determining whether

existing service is sufficient, and whether the proposed

service might hurt existing carriers. Further, § 10922

changes the burden of proof in licensing proceedings. It

is no longer necessary for the applicant to prove that the

proposed operations are consistent with the public con-

venience and necessity; the burden is now shifted to pro-

testants to prove such operations are “inconsistent with

the public convenience and necessity.” Id. § 10922(b) (1).

The statute goes on to direct the Commission not to con-

clude that the burden on protestants has been satisfied

solely by proving “diversion of revenue or traffic from

an existing carrier” to be a result of new entry. Id.

§ 10922(b) (2) (B). Furthermore, the House Report spe-

cifically disapproved the traditional protectionist philos-

ophy, stating that “increased . . . competition will bring

about the most efficient and economical delivery of trans-

portation services to the public.” House Comm. on Pub-

lic Works and Transportation, Report on the Motor Car-

riage Act of 1980, H.R. Rep. No. 1069, 96th Cong. 2d

Sess. 1, 14, reprinted in 1980 U.S. Code Cong. & Ad.

News 2283, 2296.

Petitioners point out that Congress did not go as far

as to completely deregulate entry into the trucking busi-

ness. For example, Congress decided to continue to re-

quire individual licensing proceedings, thus overturning

the Commission’s rulings asserting that the Commission

had the power to issue blanket approval of licenses to

43a

whole classes of applicants. See Senate Comm. on Com-

merce, Science and Transportation, Report on the Motor

Carrier Reform Act of 1980, S.Rep. No. 641, 96th Cong.,

2d Sess. 6; H.R. Rep. No. 1069 at 15, reprinted in 1980

U.S.C.C.A.N. at 2297. Furthermore, Congress specifically

directed the Commission not to go beyond its statutory

mandate in its decisionmaking; see Pub.L. No. 96-296,

§3(a), 94 Stat. 79, reproduced at 49 U.S.C. § 10101

note; H.R. Rep. No. 1069 at 10-11, reprinted in 1980

U.S.C.C.A.N. at 292-93; S.Rep. No. 641 at 23 (1980);

126 Cong. Rec. H 5345 (June 19, 1980); this admoni-

tion reflected a concern that the Commission might de-

regulate more than Congress directed in the revised law.

See H.R. Rep. No. 1069 at 97, reprinted in 1980

U.S.C.C.A.N. at 2333.

Notwithstanding that Congress did not completely de-

regulate the trucking industry, the 1980 amendments un-

questionably embody a strong new deregulatory philos-

ophy. One of its cornerstones is the Motor Carrier Act’s

eased entry requirements under the licensing provisions,

offering “increased opportunities for new carriers to get

into the trucking business and for existing carriers to

expand their service.” H.R. Rep. No. 1069 at 3, 1980

U.S.C.C.A.N. at 2285. Where Congress has lowered bar-

riers to entry into the trucking industry, we are per-

suaded that the Commission acted reasonably in conclud-

ing that Congress did not nonetheless intend that high

barriers should be retained for the railroads alone.

Our conclusion is buttressed by the fact that the old

policy requiring auxiliary-to-rail restrictions on rail-

affiliated trucking companies has never been ironclad;

even in acquisitions proceedings where the “in its opera-

tions” language explicitly required some sort of auxiliary-

to-rail restrictions, railroads could acquire trucking com-

panies with unrestricted operations under special circum-

stances. See American Trucking Ass’ns., Inc. v. United

States, 425 F.Supp. 903 (D.D.C. 1975), aff'd 425 USS.

44a

955, 96 S.Ct. 17385, 48 L.Ed.2d 201 (1976). In other

words, even under the old protective regulatory scheme

there was no automatic, per se exclusion of railroads

from unrestricted trucking operations. If there had been

such distrust of railroads built into the regulatory policy,

the Commission position would be less persuasive. We

find it easier than it otherwise would be to affirm the

Commission’s decision that the éxception should now

swallow the rule, that “special circumstances” should no

longer be so special.

Thus we believe that the Commission was within its

authority in abolishing the special circumstances doc-

trine in licensing proceedings, even if the doctrine sur-

vives in acquisitions proceedings. We do not decide

whether the “in its operations” language of § 11344(c)

may now be given a new meaning. We need not and do

not decide the question of whether § 11344(c) still re-

quires the retention of the special circumstances doctrine

in acquisition proceedings.* Even if § 11344(c) still de-

mands proof of special circumstances in acquisitions pro-

ceedings,® we are persuaded that under the revised I.C.A.

the acquisitions and licensing sections are not required to

be interpreted in tandem.

*In Ex Parte No. 488, Acquisition of Motor Carriers by Railroads

(August 17, 1983), the Commission announced its new policy of

no longer requiring that special circumstances be shown to justify

acquisitions by rail carriers of motor carriers whose operations go

beyond auxiliary-to-rail operations.

5 Confining the expansion of railroads into the trucking industry

by using the special circumstances doctrine essentially is a response

to antitrust concerns, to fears that the railroads would dominate

the trucking industry. Arguably entry by acquisition raises more

immediate anti-competitive concerns than licensing because acqui-

sitions may increase concentration in the relevant market, as

opposed to the internal expansion of licensing, which may decrease

concentration, at least in the short term.

45a

VII

We address here petitioners’ remaining arguments.

They argue that the retention of the requirement in the

National Transportation Policy of preserving “the inher-

ent advantages of each mode,” which traditionally has

buttressed the application of § 11344(c) to licensing pro-

ceedings, means that Congress intended to retain the old

anti-railroad bias in licensing proceedings. We have al-

ready disposed of the argument that under the pre-1980

.C.A. the “in its operations” and “inherent advantages”

provisions mandated the special circumstances doctrine in

licensing proceedings. We note further that the broad

“inherent advantages” language could be argued to sup-

port a pro-railroad position as well as an anti-railroad

position. Congress has recognized the change in the rela-

tive economic positions of the rail and trucking indus-

tries. For example, one House Report notes that earn-

ings by the railroad industry are the lowest of any trans-

portation mode and are insufficient to generate funds for

necessary capital improvements. See Report of the Com-

mittee on Conference on S. 1946, Staggers Rail Act of

1980, H.R. Rep. No. 1430, 96th Cong., 2d Sess. 79 (1980).

Congress has further decided that a lowering of entry

barriers in the trucking industry would help the truck-

ing industry. It is therefore not without reason to be-

lieve that the abolition of the special circumstances doc-

trine in licensing proceedings might strengthen the truck-

ing industry by improving its competitive environment as

well as strengthen the railroads financially—thus pre-

serving “the inherent advantages of each mode.” In a

real sense a mechanistic continuation of the old approach

to preserving the inherent advantages of each in a

changing regulatory environment begs the essential ques-

tion of means.

But, more concretely, another broad policy announced

by Congress supports the Commission’s action. In both

the Motor Carrier Act and the Staggers Rail Act Con-

46a

gress indicated its intention to promote “intermodal”

transportation—meaning shipping involving the transfer

of goods to and from trucks and railroads. See 49

U.S.C.A. §§ 10101(a) (2) (I), 10505(f) (West Supp.

1983). The Commission argues forcefully that the spe-

cial circumstances doctrire has a “chilling effect” on

intermodal operations, deterring industry executives from

planning comprehensive new rail-motor strategies be-

eause of the long delays involved in leaping the special

circumstances hurdle.

Petitioners cite new sections 10505(g), 10322(b) (2),

and 11844(e) to support their position. Section 10505 (g)

states: “the Commission may not exercise its authority

under this section [granting the Commission authority to

exempt rail carrier transportation from regulation in

certain instances] (1) to authorize intermodal ownership

that is otherwise prohibited by this title... .” As the

Commission noted in its opinion, this provision is inap-

posite for two reasons. First, the Commission has not

proposed to exempt rail-affiliated trucking companies

from the requirement of participating in individual li-

censing proceedings. Second, even if this section could be

interpreted to express a broader congressional policy, the

policy would be applicable only to acquisitions, not to

licensing proceedings that merely permit rail-affiliated

trucking companies to expand their operations. See 132

M.C.C. at 985-86.

Section 11344(e) expressly requires the Commission to

approve an acquisition of a trucking company by a rail-

road or rail-affiliated carrier under one particular cir-

cumstance. The Commission must approve an acquisi-

tion made in order to serve shippers located near rail

service and motor carrier service incidental to that rail

service, where that rail service is provided by a company

other than the acquiring compary and the services are

seriously “impaired.” That this section relating only to

acquisitions would be unnecessary if the Congress meant

47a

to completely abrogate the old speciai circumstances doc-

trine in acquisitions and licensing proceedings does not

necessarily mean that Congress intended to retain the

entire doctrine. We will not “leap from [this] particular

authorization to a pervasive prohibition.” American

Trucking Associations, Inc. v. Atchison, Topeka & Santa

Fe Railway Co., 387 U.S. 397, 411, 87 S.Ct. 1608, 1616,

18 L.Ed.2d 847 (1967). It is difficult to reason from the

circumstance that Congress mandated approval of an

acquisition on a given set of facts that it did not other-

wise leave to the relevant agency the regulatory discre-

tion to grant approvals in other circumstances.

Petitioners further urge that Congress’ failure to ex-

empt_ trailer-on-flatear (TOFC) transportation from

Commission regulation precludes the abolition of the spe-

cial circumstances doctrine in license proceedings. See

126 Cong. Rec. S. 3636 April 15, 1980. Rather than to-

tally exempting proposed TOFC service from licensing

requirements, Congress adopted § 10322(b) (2), which re-

quires expedited treatment of TOFC applications. Peti-

tioners’ argument again is misconceived because by abo-

lition of the special circumstances doctrine the Commis-

sion did not exempt rail-affiliated motor carriers from

meeting licensing requirements; rail-affiliated motor car-

riers must still come to the Commission to obtain operat-

ing authority under 49 U.S.C. § 10922, expedited or not.

Finally, petitioners contend that the Commission is

wrong about the relative positions of the trucking and

rail industries, and that in reality there is a “compelling

need for increased protection of the struggling and de-

pressed trucking industry in comparison to the financially

stronger and well-capitalized rail industry.” The Com-

mission found that “the relative economic positions of to-

day’s truck and rail industries as well as the ability of

motor carriage to compete successfully with other forms

of transportation undercuts the basic protective rationale

48a

for the ‘special circumstances’ doctrine.” 132 M.C.C. at

982. On this fact issue we defer to the Commission.

VIII

Railroads were the bogeymen of an earlier congres-

sional age. Congress has found that fear of them is no

longer justified and has decided to allow the economy to

operate more freely in the trucking industry. We are

persuaded that it is not unreasonable in light of the new

I.C.A. for the Commission to allow railroads into the

fray on the same grounds as any other competitor. We

deny the petition to review the Commission’s approval of

PMT’s application, and deny the petition to review the

Commission’s abolition of the special circumstances doc-

trine in licensing proceedings.

Petitions to Review and Set Aside are DENIED.

49a

APPENDIX C

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

Nos. 81-4389 & 83-4039

ICC MC-78786 (Sub-No. 281) F &

ICC Ex Parte No. MC-156

AMERICAN TRUCKING ASSOCIATIONS, INC., et al.,

Petitioners,

¥,

INTERSTATE COMMERCE COMMISSION and

UNITED STATES OF AMERICA,

Respondents.

Petitions for Review of Orders of the

Interstate Commerce Commission

Before GARZA, WILLIAMS and HIGGINBOTHAM, Circuit

Judges.

JUDGMENT

These causes came on to be heard on the petitions of

American Trucking Associations, Inc., et al., for review

of orders of the Interstate Commerce Commission, and

were argued by counsel: .

ON CONSIDERATION WHEREOF, It is now here

ordered and adjudged by this Court that the petitions

for review of the orders of the Interstate Commerce Com-

50a

mission in these causes be, and the same are herein, de-

nied;

IT IS FURTHER ORDERED that Petitioners and

Petitioner-Intervenor, International Brotherhood of Team-

sters, pay to the Respondents and Respondents-Interven-

ors, Pacific Motor Trucking Company, Inc., et al., the

costs on appeal, to be taxed by the Clerk of this Court.

January 20, 1984

Issued as Mandate: Apr. 17, 1984

5la

APPENDIX D

[Service Date Aug. 25, 1981]

INTERSTATE COMMERCE COMMISSION

DECISION

No. MC-78786 (Sub-No. 281) F

PACIFIC MOTOR TRUCKING COMPANY EXTENSION—

NATIONWIDE GENERAL COMMODITIES

Decided: August 7, 1981

By decision of February 17, 1981, (served February

25, 1981), Review Board Number 1 granted the above

entitled application in its entirety.

On March 17, 1981, appeals for administrative review

of this decision were filed by protestants Centra] Freight

Lines, Inc., and Steere Tank Lines, Inc. Applicant filed a

reply to these petitions on April 1, 1981.

On March 19, 1981, a petition was filed by American

Trucking Association’s, Inc. (ATA), for leave to inter-

vene and for administrative review. The petition will be

granted. Applicant has filed a timely response to the peti-

tion (by separate pleading also dated April 1, 1981) and

no party will be prejudiced by our permitting the sought

intervention.

Late tendered appeals were also submitted for filing by

protestants Bowman Transportation, Inc., (on April 13,

1981, embracing a motion for receipt of the pleading)

and Southwestern Motor Transport, Inc., (on April 21,

1981). We will accept the late tendered appeals for fil-

ing because protestants have shown good cause for their

acceptance; neither pleading raises any new or additional

issues (as acknowledged by applicant in a (letter) reply

to the Bowman appeal dated April 23, 1981); and no

party will be prejudiced as a consequence.

52a

We have considered the record in this proceeding in-

cluding the appeals and applicant’s responsive pleadings.

We conclude that each of the appeals should be denied,

and that based on the facts of record and applicable law

PMT be authorized to provide the service sought and au-

thorized by the review board.'

This action does not significantly affect either the

quality of the human environment or conservation of en-

ergy resources.

It is ordered:

The late tendered appeals filed by protestants Bowman

Transportation, Inc., and Southwestern Motor Transport,

Inc. are accepted for filing.

The petition for leave to intervene and administrative

review filed by American Trucking Associations, Inc., is

_ granted.

The appeals filed by protestants Central Freight Lines,

Inc., Steere Tank Lines, Inc., Bowman Transportation,

Inc., and Southwestern Motor Transport, Inc., and by

intervenor American Trucking Associations, Inc., are

denied.

Operations may begin only following the service of a

certificate and upon compliance with the following re-

quirements set forth in the Code of Federal Regulations:

1 The arguments raised by the parties on appeal, however, point

out clearly the need for us to reexamine the “special circumstance

doctrine” as it has been applied to applications involving rail-

affiliated motor carriers. This is particularly warranted now in

light of the recently enacted Motor Carrier Act of 1980 [Pub. L.

No. 96-296] and Staggers Rail Act of 1980 [Pub. L. No. 96-448].

We believe that a proceeding allowing for notice and public comment

(as opposed to an adjudication) is the best vehicle for addressing

a question of this magnitude. Accordingly, we will issue a pro-

posed policy statement in the near future requesting comments on

these matters.

58a

insurance (49 CFR 1943), designation of process agent

(49 CFR 1044), and tariffs (49 CFR 1310).

This decision will be effective 15 days from the date of

service.

By the Commission, Chairman Taylor, Commissioners

Gresham, Clapp, and Gilliam. Commissioners Gresham

and Gilliam concurred with separate expressions. Com-

missioner Clapp concurred in part and dissented in part

with a separate expression. Chairman Taylor dissented

with a separate expression.

AGATHA L. MERGENOVICH

Secretary

[SEAL]

54a

COMMISSIONER GRESHAM, concurring:

While I would prefer to issue a more comprehensive

decision which explains fully the basis for a grant of

unrestricted authority, the issuance of a more detailed

decision is impossible because a majority of the Commis-

sion cannot be achieved to approve what should be in-

cluded in the decision.

In my opinion, the decision first should explain that

we need not decide here whether the special circumstances

doctrine should be retained. Because special circum-

stances have been established on the record in this pro-

ceeding, a ruling on the survival or demise of the doc-

trine is unnecessary to the decision here. Furthermore,

and particularly because of the limited public participa-

tion in this proceeding, the issue should be resolved in a

non-adversary proceeding in which we will seek public

comments.

Next, the decision should review the development of the

Commission’s application and interpretation of the doc-

trine and exceptions to that doctrine. A review of Com-

mission decisions would show that both the doctrine and

exceptions to it have been increasingly and continuously

liberalized since their inception.

Finally, the decision should explain why, in this par-

ticular case, special circumstances have been established.

Among the factors which collectively show that the bur-

den of proof has been met are (1) shippers are encoun-

tering difficulties with other carriers and need applicant’s

service to alleviate their problem; (2) only four carriers

have appealed the decision granting unrestricted author-

ity, thus reflecting a lack of significant continuing op-

position to that grant; and, (3) there is no reason to

believe that this carrier has engaged in anticompetitive

conduct in the past or will do so in the future. Further,

I believe the decision should find that protestants have

failed to meet their burden of proof, which is so clearly

55a

stated in the Motor Carrier Act of 1980, to show incon-

sistency with the public interest.

COMMISSIONER GILLIAM, concurring:

Although not advocating that the Commission depart

from the special circumstances doctrine, it is my opinion

that passage of the Motor Carrier Act of 1980 and the

Staggers Act caused a significant expansion of the doc-

trine.

_ Applicants in this case express a desire to utilize the

authority requested to institute a TOFC/COFC move-

ment. Absent a showing of harm on the part of pro

testants, it is my opinion that the desirability of encour-

aging intermodalism, as clearly articulated by the Con-

gress in both Acts, should lead the Commission to exercise

greater flexibility in this area. I agree with Chairman

Taylor and Commissioner Clapp that a policy statement

is long overdue.

COMMISSIONER CLAPP, concurring in part and dissenting

in part:

I agree that applicant has provided sufficient evidence

for a restricted authority but for the reasons noted below

I believe it has failed to meet its affirmative burden of

proving special circumstances.

It is appropriate to note at the outset of these com-

ments that I was the first to call for an extensive re-

examination of the special circumstances doctrine under

the 1980 Motor Carrier and Staggers Acts and io sug-

gest that this be done with proper notice and comment in

a non adversary proceeding. That clearly is needed as the

range of opinions in this case attests. Although the Com-

56a

mission has found in recent proceedings’ that there are

strong arguments for retention of the concept,’ it is nec-

essary to consider its proper role in light of changed cir-

cumstances in the industry as well as the significant

policy changes which have resulted from Congressional

action. Both may well support a more expansive view

and the current Commission has unanimously agreed to

this fresh analysis. In my opinion, the time to renegoti-

ate this doctrine is in that proceeding—not the instant

one. Nor can the issue be ignored by merely denying the

appeals.

1See, for example, No. MC-60012 (Sub-No. 100), Rio Grande

Motor Way, Inc., Extension-Dallas (not printed, served July 23,

1981; No. MC-139960 (Sub-No. 1), WPX Freight, System, Ince.,

Extension-Five Western States (not printed), served July 22,

1981.

2 The special circumstances doctrine had its origins in the 1935

Motor Carrier Act and the 1940 Interstate Commerce Act and the

relevant policies and statutes have been incorporated into the 1980

Act. (For example, section 213(a) became 5(2)(b) and is now

found at 49 U.S.C. 11844(c)). The National Transportation

Policy which sought to insure maximum development of the rail

and motor carrier industries as coordinate transportation services

still requires the Commission to recognize and preserve the in-

herent advantages of each mode of transportation. 49 U.S.C.

10101(a) (1). Thus the Commission has granted railroad motor

carrier affiliates certificates under section 10922 (formerly 207)

only when auxiliary to and supplemental of rail services uniess

special circumstances were present which were sufficient to support

a decision not to impose restrictions. This compelling public inter-

est test was discussed at length in tw. Supreme Court proceedings.

American Trucking Association Inc. v. United States, 364 U.S.C.

(1960) and 355 U.S. 141 (1957). Thus, although one may argue

strongly for modifications of the doctrine, as former section 5 (2) (b)

remains and the National Transportation Policy still contains the

“inherent advantages” clause the guiding principles that led to

the above court cases still govern. (Irdeed it may be argued that

section 10505(g) (1) of the Staggers Act specifically reaffirms past

policies regarding rail-motor affiliation.)

“ a

57a

Here the record is devoid of any attempt to show spe-

cial circumstances. In fact, applicant has begun and

ended its case on the premise that the doctrine has not

survived the 1980 Acts—a premise which unfortunately

does not coincide with the facts. See Notes 1 and 2.

There may well be special circumstances here but it is

not the Commission’s task to ferret them out. It has

been suggested that special circumstances may lie in

TOFC/COFC service. But, applicant has requested au-

thority to provide motor carrier suthority completely di-

vorced from its parent’s rail service. It has also been

suggested that special circumstances might be found by

the very act of proving a public need. But this is the

standard operating rights test and special circumstances

must go beyond this. It is an affirmative burden placed

on an applicant as part of its prima facie case. See

United States v. Rock Island Motor Transit Co., 340 U.S.

419, 428, rehearing denied, 341 U.S. 906 (1951). While

it is arguable that the 1980 Motor Carrier Act shifted

this burden, in light of the extant statutory language of

the National Transportation Policy and former section

5(2) (b) I do not believe we can blithly change this bur-

dent without serious analysis, a view which the General

Counsel shares.

Two possible solutions to this proceeding come to mind

which strike me as more fair and more legally defensible

than that adopted here. We could recognize applicant’s

error in relying on its assu:aption that the special cir-

cumstances doctrine is dead and allow it to present evi-

dence on this issue—with appropriate responses from

protestants. In that situation we would have an adequate

record upon which to determine applicant’s request. In

the alternative, we could find that applicant had simply

failed to meet its burden, issue a restricted certificate but

note that should any subsequent policy statement change

the burden applicant is free to petition for modification.

58a

CHAIRMAN TAYLOR dissenting:

In order to obtain authority, an applicant is required

to make a prima facie showing that the service proposed

will serve a useful public purpose, responsive to a public

demand or need. Shipper support, existing authority, and

other forms of evidence can be used to present a prima

facie case in normal circumstances.

Here, a motor carrier subsidiary of a railroad is seek-

ing nationwide general commodities authority. Prior to

enactment of both the Motor Carrier Act of 1980, Pub. L.

No. 96-296 and the Staggers Rail Act of 1980, Pub. L.

No. 96-448, in order for a motor carrier subsidiary of a

railroad to obtain additional operating rights, it was re-

quired to show that the grant of authority has not re-

sulted and probably will not result in the undue restraint

of competition, and that the public interest requires the

proposed operation, which the authorized independent

motor carriers have not furnished, except where it suited

their convenience. American Trucking Associations, Inc.

v. United States, 355 U.S. 141 (1957). This is the spe

cial circumstances doctrine.

Regardless of the extent to which the special circum-

stances doctrine has been modified or liberalized by the

recent legislation, applicant must still present a prima

facie case showing public need and addressing special cir-

cumstances. The evidence of record does not present a

prima facie case. For this reason, the application should

be denied.

59a

APPENDIX E

UNITED STATES COURT OF APPEALS

FIFTH CIRCUIT

No. 81-4389

AMERICAN TRUCKING ASSOCIATIONS, INC., SOUTHWESTERN

MoToR TRANSPORT, INC., CENTRAL FREIGHT LINES,

INc., STEERE TANK LINES, INC. and BOWMAN TRANS-

PORTATION, INC.,

Petitioners,

V.

INTERSTATE COMMERCE COMMISSION and

UNITED STATES OF AMERICA,

Respondents.

July 29, 1982

Kenneth E. Siegel, Washington, D.C., for American

Trucking Associations, Inc.

Leroy Hallman, Dallas, Tex., for Southwestern Motor

Transport, Inc.

Maurice F. Bishop, Birmingham, Ala., for Bowman.

Hugh T. Matthews, Dallas, Tex., for Steere.

Laurence H. Schecker, I.C.C., Robert B. Nicholson,

Atty., Antitrust Div., Dept. of Justice, Washington, D.C.,

for respondents.

Raymond J. Salasi, Jr., New Orleans, La., Lloyd M.

Roach, Dallas, Tex., John MacDonald Smith, San Fran-

cisco, Cal., for intervenor Pacific Motor Trucking.

Petition for Review of An Order of the

Interstate Commerce Commission

60a

Before BROWN and RANDALL, Circuit Judges, and

DUPLANTIER", District Judge.

JOHN R. BROWN, Circuit Judge:

Pacific Motor Trucking Company (PMT), a motor

common carrier and subsidiary of Southern Pacific Trans-

portation Company (SP), a rail carrier, applied for and

received from the Interstate Commerce Commission

(ICC) a certificate of public convenience and necessity to

transport general commodities nationwide. Five protest-

ants before the ICC have filed an action to review and

set aside the decision of the ICC in Docket No. MC-78786

(Sub-No. 281) F, Pacific Motor Trucking Company Ex-

tension—Nationwide General Commodities. The principal

issue raised in the petition for review is whether the

“special circumstances” doctrine as applied to a rail-

affiliated motor carrier seeking unrestricted motor car-

rier operating authority continues unchanged in light of

the Motor Carrier Act of 1980. Finding that the issue

of “special circumstances” is one properly left initially

with the primary jurisdiction of the ICC and one which

the ICC is currently considering in an administrative

proceeding, Ex Parte No. MC-156, Applications for Mo-

tors Carrier Operating Authority by Railroads and Rail

Affiliates, 46 Fed.Reg. 50, 423 (Oct. 18, 1981), we stay

the proceedings in this Court pending final determina-

tion of Ex Parte No. MC-156 and certification of that

decision to this Court for consideration and decision by

this Court on briefs, argument, or both.

Point of Departure

PMT, a wholly owned subsidiary of Southern Pacific,

has operated as both an intermodal carrier, carrying

freight in conjunction with its parent railroad, and as an

over-the-road truck operator in its own right. In Septem-

* District Judge of the Eastern District of Louisiana, sitting by

designation.

6la

ber 1980, PMT applied for a certificate for unrestricted

nationwide authority, seeking to commence “single re-

sponsibility service’ by providing intermodal services

with railroads other than its affiliate, Southern Pacific,

and combining rail and motor carrier operations to pro-

vide efficient, fuel-saving alternatives. In support of its

application, PMT submitted verified statements from 37

shippers who desired single-line service, generally nation-

wide. Twenty-eight carriers filed protests in opposition

to PMT’s application, based on their fear of diversion of

traffic if PMT’s application was granted. In February

1981, Review Board No. 1 granted PMT’s application,

finding that PMT was “fit, willing, and able” to perform

the service and that “a public need for the proposed serv-

ice is shown by the evidence in this record.” Further,

the Review Board determined that the record did not es-

tablish any materially adverse effects upon the protestant

carriers."

From the Review Board’s decision, Steere Tank Lines,

Inc., Central Freight Lines, Inc.,2 Bowman Transporta-

1 The Review Board stated:

A public need for the proposed service is shown by the evi-

dence in this record. The supporting shippers have a need for

applicant’s services in addition to those available from pro-

testants and other existing carriers. The record does not estab-

lish that a grant of authority here will have a materially ad-

verse effect upon protestants’ operations. We cannot find that

a complete grant of the authority sought will impair protest-

ants’ operations in a manner contrary to the public_interest.

. . . We conclude that the benefits to be derived by the support-

ing witnesses and the shipping public in general from the au-

thority sought here outweigh any detriment, real or potential,

to the protesting carriers.

Pacific Motor Trucking Co. Extension of Common Carrier Opera-

tions, No. MC-78786 (Sub-No. 281) F —

2 After oral argument in this Court, Central Freight moved to

withdraw as a petitioner in the review of the Commission’s order,

which motion was granted.

62a

tion, Inc., and Southwestern Motor Transport, Inc. ap-

pealed to the full Commission. The American Trucking

Associations, Inc. (ATA) was given leave to intervene.

Steere contended that PMT should not have been granted

authority to transport commodities in bulk and that the

application should have been denied since there was no

showing of “special circumstances.” In its petition to

intervene, ATA also challenged the Board’s failure to re-

quire or discuss “special circumstances.” Finally, Bow-

man, in its appeal, contended that the grant had been

made without required findings and that PMT had failed

to establish a prima facie case.

First Stop, the Commission

In August 1981, the Commission, at that time then

composed of only four Commissioners,* affirmed by an

equally divided vote the Review Board’s decision, with an

opinion which included two concurrences, one concurrence

in part and dissent in part, and one dissent. While af-

firming the grant of authority to PMT, the Commission

indicated the necessity of reexamining the “special cir-

cumstances” doctrine in light of the Motor Carrier Act

of 1980 and the Staggers Rail Act of 1980.‘

3 At the time of the decision, the Commission consisted of four

Commissioners, Chairman Taylor, Commissioner Gilliam, Commis-

sioner Gresham, and Commissioner Clapp. Only two of them pres-

ently remain, Chairman Taylor and Commissioner Gilliam. See

note, 7, infra.

* In a footnote to its decision, the Commission stated :

The arguments raised by the parties on appeal, however,

point out clearly the need for us to reexamine the “special cir-

cumstance doctrine” as it has been applied to applications in-

volving rail-affiliated motor carriers. This is particularly war-

ranted now in light of the recently enacted Motor Carrier Act

of 1980 ... and Staggers Rail Act of 1980. ... We believe that

a proceeding allowing for notice and public comment (as op-

posed to an adjudication) is the best vehicle for addressing a

question of this magnitude. Accordingly, we will issue a pro-

posed policy statement in the near future requesting comments

on these matters.

63a

Commissioner Gresham, concurring in the decision, in-

dicated that a majority of the Commission could not be

attained. His position was that the decision need not

reach the “special circumstances” doctrine “[b]ecause

special circumstances have been established on the record

in this proceeding, a ruling on the survival or demise of

the doctrine is unnecessary to the decision here.” Com-

missioner Gresham thought that the opinion should in-

clude a review of the Commission’s decisions reflecting

its application and interpretation of the special circum-

stances doctrine and explaining why special circum-

stances had been established in this case. Finally, he

stated that the protestants had failed to meet their bur-

den of proof “which is so clearly stated in the Motor

Carrier Act of 1980, to show inconsistency with the pub-

lic interest.” Commissioner Gilliam, in a concurrence,

indicated that while he was not “advocating that the

Commission depart from the special circumstances doc-

trine”, he believed that the 1980 statutory changes had

“eaused a significant expansion of the doctrine.” He also

stressed the absence of harm to protestants. In a partial

concurrence and dissent, Commissioner Clapp found that

PMT had provided sufficient evidence for restricted au-

thority but had failed to meet its affirmative burden of

proving special circumstances, a burden placed on an

applicant as part of its prima facie case. Chairman Tay-

lor, in a dissent, indicated that PMT had failed to present

a prima facie case showing public need and addressing

special circumstances.

The protestants’ subsequent request for a stay of the

grant of authority to PMT pending judicial review was

denied, again by an equally divided vote, the Commission

failing to reach a majority. In October 1981, the Com-

mission filed a Notice of Proposed Policy Statement in

Ex Parte No. MC-156 which requested comments on the

effect of the recent statutory changes on the “special

64a

circumstances” doctrine. The proceeding is still pending,

awaiting further action or orders by the ICC, either on

the basis of the “record” so far developed or as expanded

by virtue of our expressed interest in the importance of

the matter and the considered judgment of the Commis-

sion.

A Slight Detour

The underlying issue in this appeal is whether and to

what extent the “special circumstances” doctrine remains

in effect under the Motor Carrier Act of 1980. If the

“special circumstances” doctrine retains a role after the

statutory changes, there is the subsidiary question of

whether the statutory revisions affect the burden of proof

of this issue. The “special circumstances” doctrine de-

rives from section 11344(c) of the Interstate Commerce

Act, 49 U.S.C. § 11844(c) and the National Transporta-

tion Policy, 49 U.S.C. § 10101. Basically the “special cir-

cumstances” doctrine reflects the policy against issuing

unrestricted motor carrier operating authority to rail-

roads or their affiliates so as to prevent anticompetitive

rail control of the trucking industry. The Motor Carrier

Act of 1935 prohibited rail acquisition or a merger with

a motor carrier “unless . .. the transaction . . . [would]

5In requesting comments on the effect of statutory changes on

the “special circumstances” doctrine, the Commission stated:

It is possible that the applicability of the “special circum-

stances” doctrine to motor carrier operating rights proceedings

has been significantly altered or, that the doctrine is no longer

applicable to such proceedings at all. It is the Commission’s

intention to examine the statutory provisions and existing law

to determine whether, and to what extent, the “special circum-

stances” doctrine is still applicable. In recent proceedings be-

fore the Commission, we have noticed a great deal of interest

in the subject, and, think that public comments would be help-

ful in formulating our policy. We, invite comment on whether,

or to what extent, the doctrine of “special circumstances”

should survive recent statutory changes, and the reasoning

which supports those views.

65a

promote the public interest by enabling such [rail] car-

rier . . . to use service by motor vehicle to public advan-

tage in its operations and will not unduly restrain com-

petition.” This section was recodified in the Transporta-

tion Act of 1940 and eventually formed section 11344(c).

The Commission, in granting motor carrier authority to

a railroad or rail aifiliate, generally restricted the motor

operations to those auxiliary or supplemental to rail

service.

The “special circumstances” doctrine was formulated

to allow the Commission to issue unrestricted motor car-

rier authority to railroads or rail affiliates where the ap-

plicant could meet the additional burden of showing that

a grant of unrestricted authority did not result in undue

restraint of competition and that the public interest re-

quired the proposed operation which was not being fur-

nished by independent motor carriers. Through the years,

the Commission has carved out several exceptions to the

“special circumstances” doctrine. Although the amended

Interstate Commerce Act retains the provisions which

form the basis for restricting grants of authority to rail

affiliated motor carriers, 49 U.S.C. §§10101(a) and

11344(c), 49 U.S.C. § 10922(b) has changed the appli-

cable standards for obtaining a grant of motor common

carrier authority, lightening the applicant’s burden and

placing upon the prot: stants the burden of showing that

the proposed service would be “inconsistent with the pub-

lic convenience and necessity.” Even if the “special cir-

cumstances” doctrine survives the recent statutory

changes, both the Commission and those appearing before

it have questioned whether recent statutory changes at

the minimum affect the burden of establishing “special

circumstances.”

Changing Destinations

The doctrine of primary jurisdiction, far from an ab-

dication of judicial responsibility, allows a court when

66a

faced with an issue which calls into question an area of

special expertise of an agency to suspend proceedings

pending referral of the issue to the agency for its official

position.

The doctrine of primary jurisdiction, like the rule

requiring exhaustion of administrative remedies, is

concerned with promoting proper relationships be-

tween the courts and administrative agencies charged

with particular regulatory duties. .. . “Primary ju-

risdiction,” . . . applies where a claim is originally

cognizable in the courts, and comes into play when-

ever enforcement of the claim requires the resolution

of issues which, under a regulatory scheme, have

been placed within the special competence of an ad-

ministrative body; in such a case the judicial proc-

ess is suspended pending referral of such issues to

the administrative body for its views.

United States v. Western Pacific R.R. Co., 352 U.S. 59,

63-64, 77 S.Ct. 161, 165, 1 L.Ed.2d 126, 182 (1956)

(citation omitted). In explaining the use of primary

jurisdiction in Far East Conference v. United States, 342

U.S. 570, 72 S.Ct. 492, 96 L.Ed. 576 (1952), the Su-

preme Court stated:

The Court thus applied a principle, now firmly es-

tablished, that in cases raising issues of fact not

within the conventional experience of judges or cases

requiring the exercise of administrative discretion,

agencies created by Congress for regulating the sub-

ject matter should not be passed over. This is so

even though the facts after they have been appraised

by specialized competence serve as a premise for

legal consequences to be judicially defined. Uniform-

ity and consistency in the regulation of business en-

-trusted to a particular agency are secured, and the

limited functions of review by the judiciary are more

rationally exercised, by preliminary resort for ascer-

67a

taining and interpreting the circumstances underly-

ing legal issues to agencies that are better equipped

than courts by specialization, by insight gained

through experience, and by more flexible procedure.

342 U.S. at 574-75, 72 S.Ct. at 494, 96 L.Ed. at 582.

The Court «also indicated that this technique was ori-

ginally applied in the context of ICC proceedings.

This Court, following the path established by the Su-

preme Court, has invoked the principle of primary juris-

diction within a variety of contexts,* when faced with

“an agency statutorily invested with responsibility for

the determination and effectuation of policy within the

given field which will be affected or influenced by, or

influence, the issue posed for Court determination.” Usery

v. Tamiami Trail Tours, Inc., 581 F.2d 224, 248 (5th

Cir. 1976). When faced with two roads diverging, one

leading through the unmarked forest of judicial guess-

work and one leading through the clearing of agency ex-

pertise, this Court has preferred to take the less traveled

by, that of primary jurisdiction. Although primary ju-

risdiction provides a temporary refuge from a difficult

decision, we carefully examine the question presented to

6 See Usery v. Tamiami Trail Tours, Inc., 531 F.2d 224 (5th Cir.

1976) ; (Brown, C. J., concurring, suggesting the use of primary

jurisdiction) ; Geisser v. United States, 518 F.2d 862 (5th Cir.

1975) (analogizing to the use of primary jurisdiction) ; Mobil Oil

Corp. v. Oil Chemical and Atomic Workers International Union,

504 F.2d 272 (5th Cir. 1974) (en banc) (Brown, C. J., dissenting

for failure to invoke primary jurisdiction), rev’d, 426 U.S. 407, 96

S.Ct. 2140, 48 L.Ed.2d 736 (1976); International Paper Co. v.

Federal Power Commission, 476 F.2d 121 (5th Cir. 1973) (Brown,

C. J., concurring) ; J. M. Huber Corp. v. Denman, 367 F.2d 104 (5th

Cir. 1966) ; Weymouth v. Colorado Interstate Gas Co., 367 F.2d 84

(5th Cir. 1966); Carter v. American Telephone & Telegraph Co.,

865 F.2d 486 (5th Cir. 1966), cert. denied, 385 U.S. 1008, 87 S.Ct.

714, 17 L.Ed.2d 546 (1967); Agricultural Transportation Associa-

tion of Texas v. King, 349 F.2d 873 (5th Cir. 1965); Lowisville &

Nashville R. R. v. Knox Homes Corp., 348 F.2d 887 (5th Cir. 1965).

68a

us to determine whether the rationale underlying pri-

mary jurisdiction applies and whether further determi-

nation by the agency will illuminate those issues before

us. “What bears continual emphasis is that the Court

neither passes off final decision on to another tribunal

nor escapes from its ultimate duty to decide. For after

the exercise of primary jurisdiction determination by the

agency concerned, the case comes back in a suitable way

for the Court, as a Court, to act.” Usery, 531 F.2d at

241.

A significant example of this approach is this Court’s

action in Tenneco Oil Co. v. FERC, 580 F.2d 722 (5th

Cir. 1978), in which we (i) stayed an appeal from a

District Court and (ii) approved the continuation of a

like directed administrative proceeding pending final de-

cision by the F.P.C. and which is now pending before the

Fifth Circuit on petition for review of the F.P.C. order

and appeal from the District Court.

Neat Stop, the Commission

In this case, the ICC’s own actions emphasize the need

to invoke primary jurisdiction. The doctrine of “special

circumstances,” created and transformed by the agency

itself, is one raising issues of great public policy, the

effect of implementation being within the agency’s ex-

pertise. The ICC, aware of the need for more informa-

tion, has issued a policy statement and requested com-

ments from those affected by the regulation. Thus the

agency is in a better position to evaluate the various fac-

tors involved and to inquire in more depth into the issue

of “special circumstances.” Unlike this Court, working

with a limited record, the agency, with its expertise and

access to information, can provide a basis for rational

decision when this Court again reviews the issue. In this

ease, the ICC has already initiated administrative pro-

ceedings and is well on its way to formulating a policy.

Deferring to the ICC’s jurisdiction to determine the ef-

69a

fect of statutory revisions on the “special circumstances”

doctrine also encourages uniformity. The issue of “spe-

cial circumstances” has already arisen in several Review

Board decisions and is currently pending in some form

in three cases before the Tenth Circuit.

In addition to the fact that there is currently pending

an administrative proceeding before the ICC, we find this

case appropriate for primary jurisdiction since the

agency, even in the decision here under review, has not

spoken authoritatively on the issue of “special circum-

stances” as affected by the 1980 statutory revisions. The

Commission, at the time composed of only four Commis-

sioners, was unable to reach a consensus itself. Two of

the four Commissioners involved in the decision, one con-

curring and one concurring and dissenting, are no longer

with the Commission. The Commission presently has six

Commissioners, only two of whom were involved in the

decision in this case.? The Commission, aware of its ex-

pertise and of the implications of the “special circum-

stances” doctrine in further proceedings has made clear

its intention to act. With a fuller complement on board,

we doubt that the Commission will end up deadlocked as

in the previous decision. Presented with broader infor-

mation and more viewpoints, the Commission will be able

to provide an authoritative interpretation of the underly-

ing issues which takes into consideration the full impli-

cations of the issue posed for this Court.

7 At the time of the decision in this case, the Commission con-

sisted of: Chairman Taylor, Vice-Chairman Gilliam, Commissioner

Gresham, and Commissioner Clapp. The current Commission mem-

bers are: Chairman Taylor, whose terms expires December 31,

1983; Vice-Chairman Gilliam, whose term expires December 31,

1982; Commissioner Sterrett, whose term expires December 31,

1987; Commissioner Andre, whose term expires December 31, 1987;

Commissioner Simmons III, whose terms expires December 31,

1985; and Commissioner Gradison, whose term expires December

31, 1988.

70a

In light of our determination that the invocation of

primary jurisdiction is appropriate in this case, we stay

further proceedings in this Court until the ICC has is-

sued ts final order or decision in Ex Parte No. MC-156.°

PROCEEDINGS STAYED.

8 On the issuance of the final order of the ICC, the parties with-

out further leave are to file, as desired, briefs pro and con on the

correctness, validity, and effects of the order and the appropriate

action for this Court to take.

Tla

APPENDIX F

The pertinent provisions of the Interstate Commerce

Act as amended by the Motor Carrier Act of 1980, P.L.

96-296, 94 Stat. 793, et seg. and the Staggers Rail Act

of 1980, P.L. 96-448, 94 Stat. 1895 et seq. are as follows:

§ 10101. Transportation policy

(a) Except where policy has an impact on rail car-

riers, in which case the principles of section 10101la of

this title shall govern, to ensure the development, co-

ordination, and preservation of a transportation system

that meets the transportation needs of the United States,

including the United States Postal Service and national

defense, it is the policy of the United States Government

to provide for the impartial regulation of the modes of

transportation subject to this subtitle, and in regulating

those modes—

(1) to recognize and preserve the inherent ad-

vantage of each mode of transportation;

(2) to promote safe, adequate, economical, and

efficient transportation ;

(3) to encourage sound economic conditions in

transportation, including sound economic conditions

among carriers;

(4) to encourage the establishment and main-

tenance of reasonable rates for transportation with-

out unreasonable discrimination or unfair or destruc-

tive competitive practices;

(5) to cooperate with each State and tiie officials

of each State on transportation matters;

(6) to encourage fair wages and working condi-

tions in the transportation industry; and

(7) with respect to transportation of property by

motor carrier, to promote competitive and efficient

72a

transportation services in order to (A) meet the

needs of shippers, receivers, and consumers; (B)

allow a variety of quality and price options to meet

changing market demands and the diverse require-

ments of the shipping public; (C) allow the most

productive use of equipment and energy resources;

(D) enable efficient and well-managed carriers to

earn adequate profits, attract capital, and maintain

fair wages and working conditions; (E) provide

and maintain service to small communities and small

shippers; (F) improve and maintain a sound, safe,

and competitive privately-owned motor carrier sys-

tem; (G) promote greater participation by minori-

ties in the motor carrier system; and (H) promote

intermodal transportation.

(b) This subtitle shall be administered and enforced

to carry out the policy of this section.

Pub.L. 95-478, Oct. 17, 1978, 92 Stat. 1337; Pub.L. 96-

296, § 4, July 1, 1980, 94 Stat. 793; Pub.L. 96-448, Title

I, § 101(b), Oct. 14, 1980, 94 Stat. 1898.

§1010la. Rail transportation policy

In regulating the railroad industry, it is the policy of

the United States Government—

(1) to allow, to the maximum extent possible,

competition and the demand for services to establish

reasonable rates for transportation by rail;

(2) to minimize the need for Federal regulatory

control over the rail transportation system and to

require fair and expeditious regulatory decisions

when regulation is required;

(3) to promote a safe and efficient rail trans-

portation system by allowing rail carriers to earn

adequate revenues, as determined by the Interstate

Commerce Commission ;

73a

(4) to ensure the development and continuation

of a sound rail transportation system with effective

competition among rail carriers and with other

modes, to meet the needs of the public and the na-

tional defense;

(5) to foster sound economic conditions in trans-

portation and to ensure effective competition and

coordination between rail carriers and other modes;

(6) to maintain reasonable rates where there is

an absense of effective competition and where rail

rates provide revenues which exceed the amount

necessary to maintain the rail system and to attract

capital;

(7) to reduce regulatory barriers to entry into

and exit from the industry;

(8) to operate transportation facilities and equip-

ment without detriment to the public health and

safety ;

(9) to cooperate with the States on transporta-

tion matters to assure that intrastate regulatory

jurisdiction is exercised in accordance with the

standards established in this subtitle;

(10) to encourage honest and efficient manage-

ment of railroads and, in particular, the elimination

of noncompenastory rates for rail transportation;

(11) to require rail carriers, to the maximum ex-

tent practicable, to rely on individual rate increases,

and to limit the use of increases of general appli-

cability;

(12) to encourage fair wages and safe and suit-

able working conditions in the railroad industry;

(13) to prohibit predatory pricing and practices,

to avoid undue concentrations of market power and

to prohibit unlawful discrimination ;

74a

(14) to ensure the availability of accurate cost

information in regulatory proceedings, while mini-

mizing the burden on rail carriers of developing

and maintaining the capability of providing such

information; and

(15) to encourage and promote energy conserva-

tion.

Added Pub.L. 96-448, Title I, §101(a), Oct. 14, 1980,

84 Stat. 1897.

§ 10505. Authority to exempt rail carrier transportation

(a) In a matter related to a rail carrier providing

transportation subject to the jurisdiction of the Inter-

‘ state Commerce Commission under this subchapter, the

Commission shall exempt a person, class of persons, or a

transaction or service when the Commission finds that

the application of a provision of this subtitle—

(1) is not necessary to carry out the transporta-

tion policy of section 10101a of this title; and

(2) either (A) the transaction or service is of

limited scope, or (B) the application of a provision

of this subtitle is not needed to protect shippers

from the abuse of market power.

(b) The Commission may, where appropriate, begin

a proceeding under this section on its own initiative or

on application by the Secretary of Transportation or an

interested party.

(ec) The Commission may specify the period of time

during which an exemption granted under this section

is effective.

(d) The Commission may revoke an exemption, to the

extent it specifies, when it finds that application of a

provision of this subtitle to the person, class, or trans-

portation is necessary to carry out the transportation

policy of section 10101a of this title.

ba

(e) No exemption order issued pursuant to this sec-

tion shall operate to relieve any rail carrier from an

obligation to provide contractual terms for liability and

claims which are consistent with the provisions of section

11707 of this title. Nothing in this subsection or section

11707 of this title shall prevent rail carriers from of-

fering alternative terms nor give the Commission the

authority to require any specific level of rates or services

based upon the provisions of section 11707 of this title.

(f) The Commission may exercise its authority under

this section to exempt transportation that is provided

by a rail carrier as a part of a continuous intermodal

movement.

(g) The Commission may not exercise its authority

under this section (1) to authorize intermodal ownership

that is otherwise prohibited by this title, or (2) to re-

lieve a carrier of its obligation to protect the interests

of employees as required by this subtitle. Pub.L. 95-473,

Oct. 17, 1978, 92 Stat. 1861; Pub.L. 96-448, Title II,

§ 213, Oct. 14, 1980, 94 Stat. 1912.

§ 10922. Certificates of motor and water common car-

riers

(a) Except as provided in this section and section

10930(a) of this title, the Interstate Commerce Com-

mission shall issue a certificate to a person authorizing

that person to provide transportation subject to the ju-

risdiction of the Commission under subchapter III of

chapter 105 of this title as a water common carrier if

the Commission finds that—

(1) the person is fit, willing and able—

(A) to provide the transportation to be au-

thorized by the certificate; and

(B) to comply with this subtitle and regula-

tions of the Commission; and

76a

(2) the transportation to be provided under the

certificate is or will be required by the present or

future public convenience and necessity.

(b) (1) Except as provided in this section, the Inter-

state Commerce Commission shall issue a certificate to

a person authorizing that person to provide transporta-

tion subject to the jurisdiction of the Commission under

subchapter II of chapter 105 of this title as a motor

common carrier of property if the Commission finds—

(A) that the person is fit, willing, and able to

provide the transportation to be authorized by the

certificate and to comply with this subtitle and reg-

ulations of the Commission; and

(B) on the basis of evidence presented by persons

supporting the issuance of the certificate, that the

service proposed will serve a useful public purpose,

responsive to a public demand or need;

unless the Commission finds, on the basis of evidence

presented by persons objecting to the issuance of a cer-

tificate, that the transportation to be authorized by the

certificate is inconsistent with the public convenience and

necessity.

(2) In making a finding under paragraph (1) of this

subsection, the Commission shall consider and, to the

extent applicable, make findings on at least the following:

(A) the transportation policy of section 10101 (a)

of this title; and

(B) the effect of issuance of the certificate on

existing carriers, except that the Commission shall

not find diversion of revenue or traffic from an ex-

isting carrier to be in and of itself inconsistent with

the public convenience and necessity.

77a

(h) (1) Not later than 180 days after the date of en-

actment of this subsection, the Commission shall—

(A) eliminate gateway restrictions and circuitous

route limitations imposed upon motor common car-

riers of property; and

(B) implement, by regulation, procedures to proc-

ess expeditiously applications of individual motor

carriers of property seeking removal of operating

restrictions in order to—

(i) reasonably broaden the categories of prop-

erty authorized by the carrier’s certificate or

permit;

(ii) authorize transportation or service to in-

termediate points on the carrier’s routes;

(iii) provide round-trip authority where only

one-way authority exists;

(iv) eliminate unreasonable or excessively

narrow territorial limitations; or

(v) eliminate any other unreasonable restric-

tion that the Commission deems to be wasteful

of fuel, inefficient, or contrary to the public

interest.

= + 7 -

(j) A motor common carrier of property may deliver

to or receive from a rail carrier a trailer moving in

trailer-on-flat-car service at any point on the route of the

rail carrier if the motor carrier is authorized to serve

the origin and destination points of the traffic.

Pub.L. 95-478, Oct. 17, 1978, 92 Stat. 1409; Pub.L. 96-

296, §§ 5(a), 6, 34(a), July 1, 1980, 94 Stat. 794, 796,

825; Pub.L. 96-454, § 30(a), Oct. 15, 1980, 94 Stat.

2021.

78a

§ 10923. Permits of motor and water contract carriers

and freight forwarders

(a) Except as provided in this section and section

10930 of this title, the Interstate Commerce Commission

shall issue a permit to a person authorizing the person

to provide transportation subject to the jurisdiction of

the Commission under subchapter II or III of chapter

105 of this title as a motor contract carrier or water

contract carrier, respectively, or to provide service sub-

ject to that jurisdiction under subchapter IV of chapter

105 as a freight forwarder, if the Commission finds

that—

(1) the person is fit, willing, and able—

(A) to provide the transportation or service

to be authorized by the permit; and

(B) to comply with this subtitle and regula-

tions of the Commission; and

(2) the transportation or service to be provided

under the permit is or will be consistent with the

public interest and the transportation policy of sec-

tion 10101 of this title.

(e) A motor contract carrier of property may deliver

to or receive from a rail carrier a trailer moving in

trailer-on-flat-car service at any point on the route of

the rail carrier if the motor carrier is authorized to

serve the origin and destination points of the traffic.

Pub.L. 95-473, Oct. 17, 1978, 92 Stat. 1410; Pub.L. 96-

258, §1(9), June 3, 1980, 94 Stat. 426; Pub.L. 96-296,

§§ 10(a) (2), (3), 34(b), July 1, 1980, 94 Stat. 799, 800,

825.

19a

§ 11344. Consolidation, merger, and acquisition of con-

trol: general procedure and conditions of ap-

proval

* o * *

(c) The Commission shall approve and authorize a

transaction under this section when it finds the transac-

tion is consistent with the public interest. The Commis-

sion may impose conditions governing the transporta-

tion. When the transaction contemplates a guaranty or

assumption of payment of dividends or of fixed charges

or will result in an increase of total fixed charges, the

Commission may approve and authorize the transaction

only if it finds that the guaranty, assumption or increase

is consistent with the public interest. When a rail car-

rier, or a person controlled by or affiliated with a rail

carrier, is an applicant and the transaction involves a

motor carrier, the Commission may approve and au-

thorize the transaction only if it finds that the transac-

tion is consistent with the public interest, will enable the

rail carrier to use motor carrier transportation to public

advantage in its operations, and will not unreasonably

restrain competition. When a rail carrier is involved in

the transaction, the Commission may require inclusion of

other rail carriers located in the area involved in the

transaction if they apply for inclusion and the Commis-

sion finds their inclusion to be consistent the public in-

terest.

Pub.L. 95-473, Oct. 17, 1978, 92 Stat. 1436; Pub.L. 96-

448, Title II, § 228(a)-(c), Oct. 14, 1980, 94 Stat. 1931;

Pub.L. 97-261 $21(f), (g), Sept. 20, 1982, 96 Stat.

1123.