# Petition — NATIONAL ASSOCIATION OF REGULATORY UTILITY COMMISSIONERS v. UNITED STATES (Nos. 83-1119, 83-943, 83-1030) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385011_1061%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1984 ## Text 83 - 1 1 1 9 Office oTL ED US JAN 6 1984 No. ———— ALEXANDER L. STEVAS. = —= a we AI IN THE x Supreme Court of the Wuited States OCTOBER TERM, 1983 NATIONAL ASSOCIATION OF REGULATORY UTILITY COMMISSIONERS, Petitioner, Vv. UNITED STATES OF AMERICA AND INTERSTATE COMMERCE COMMISSION, Respondents. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT WILLIAM PAUL RODGERS, JR.* Genera! Counsel CHARLES D. GRAY Assistant General Counsel GENEVIEVE MORELLI Deputy Assistant General Counsel National Association of Regulatory Utility Commissioners 1102 ICC Building Post Office Box 684 Washington, D.C. 20044 (202) 628-7324 * Counsel of Record Dated: January 9, 1984 WILSON - Eres Printing Co., Inc. - 789-0096 - WasHINGTON, D.C. 20001 QUESTIONS PRESENTED FOR REVIEW The Motor Carrier Act requires a motor carrier which transports property for compensation, inter alia, to obtain operating authority from the Interstate Commerce Com- mission. A shipper transporting its own freight is not subject to regulation by the Commission under the Act. When a shipper leases both equipment and drivers from a single source to transport its freight, the Commission and State regulatory agencies, to properly enforce the requirements of the Act, must decide if such transporta- tion is for-hire carriage subject to regulation or exempt private carriage. With this background, the following questions are presented in this petition: 1. Whether the Eleventh Circuit erred in affirming an ICC “policy statement” which for practical purposes elim- inates the distinction between regulated for-hire carriage and private carriage upon which State enforcement of Federal economic regulatory laws is based? 2. Whether the decision of the Eleventh Circuit affirm- ing the ICC’s “policy statement” is consistent with this Court’s decision in Drum that the definitions of for-hire and private carriage contained in the Act must establish practical and enforceable limitations upon private ship- pers? (i) i, THE PARTIES The parties to the proceeding before the Eleventh Cir- cuit are listed below. Petitioners and intervenors supporting petitioners were as follows: American Movers Conference, American Trucking Associations, Inc., Bowman Transportation, Inc., Charter Express, Inc., Common Carrier Conference—Irregular Route (now “Interstate Carriers Conference’) , Frank Bros. Trucking Co., Hedrick Associates, Inc., Import Dealers Service Corporation, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, J. H. Rose Truck Lines, Inc., National Association of Regulatory Utility Commis- sioners, National Automobile Transporters Association, National Tank Truck Carriers, Inc., North Alabama Transportation, Inc., Osborne Truck Lines, Inc., Port Norris Express Co., Inc., Regular Common Carrier Conference, Inc., Ryder Truck Lines, Inc., Senn Trucking Company, Southern Intermodal! Logistics, Inc., Specialized Carriers and Rigging Association, and Steel Carriers’ Tariff Association, Inc. Respondents and intervenors supporting respondents were as follows: United States of America, Interstate Commerce Commission, National-American Wholesale Grocers’ Association, iii National Industrial Traffic League (now “National Industrial Transportation League”), Private Carrier Conference, Inc., and Private Truck Council of America Petitioner National Association of Regulatory Utility Commissioners (NARUC) is a quasi-governmental non- profit organization. Within its membership are the gov- ernmental agencies of the fifty States and of the District of Columbia, Puerto Rico and the Virgin Islands engaged in the regulation of carriers and utilities. More specifi- cally, the members of the NARUC include the State offi- cials responsible for ensuring that motor carriers operat- ing in their respective jurisdictions provide transporta- tion services in a lawful, financially responsible manner. TABLE OF CONTENTS Page QUESTIONS PRESENTED FOR REVIEW ............... i EES A I al tne ii Se er a v TABLE OF AUTHORITIES ..0......--ccccccosssscccsssssseeseee vi ERR ei ae ec 1 ELE TIT ier een RE Ree AO 2 STATUTES AND REGULATIONS ...000..0....-cccccsceeeee- 2 STATEMENT OF THE CASE 0.0.......c..ccccccccescesceseess 2 REASONS FOR GRANTING THE WRIT .................. 5 a. This case is of exceptional national importance because of its critical impact on the ability of State regulatory officials to enforce lawful motor carrier operations in the public interest 5 b. The decision of the Eleventh Circuit affirming the Commission’s single-source leasing policy directly conflicts with this Court’s decision in Drum that definitions of for-hire and private carriage must establish practical and enforce- able limitations upon private shippers ETI eiscksstcathiesbectnishietininssseniesitagcaeapicoe senntiinantasdid 17 (v) vi TABLE OF AUTHORITIES CASES: Page Ex Parte No. MC-122 (Sub-No. 1) Lease of Equip- ment and Drivers to Private Carriers, 182 M.C.C. a ao sienaaeed 2-3 H.B. Church Truck Service Co., Common Carrier Application, 27 M.C.C. 191 (1940) ......00.... 9,10 Oklahoma Furniture Manufacturing Co.—Investi- gation of Operations, 79 M.C.C. 403 (1959) _....... 9 United States v. Casale Car Leasing, Inc., 385 F.2d of 4, ee 10 United States v. Drum, 368 U.S. 370 (1962) ......3, 4, 9, 10, 13, 14, 15, 17 STATUTES: a eRe”) ERAS 4 LN 4 a 2 I a i SD 8 ae Ae PA ees 2 A ae PR ee 16 et SR Ce ie eres 5 ee 5 ACT eee be Li OM me A 5 er i i ie 5, 7 Motor Carrier Act of 1980, Pub.L. No. 96-296, 94 4 ESA oy Se See erete oe 15 Public Law 89-170, 79 Stat. 648 (1965) 0... 5, 6 REGULATIONS: Be I I ID viccicsncxcenissvaqmicienitstinasideinstiniacimeciiniticiassid 6, 7,8 | RC SEER atine Terra aN =e 8,9 EE a EL ROR SE 8,9 ETAT SPLOT NE = 6 | SEER Sates Oe EN 3 ll MISCELLANEOUS: National Association of Regulatory Utility Com- missioners, 1982 Annual Report on Utility and Carrier Regulation (Washington, D.C. 1988)... 6,7 IN THE Supreme Court of the United States OCTOBER TERM, 1983 No. — NATIONAL ASSOCIATION OF REGULATORY UTILITY COMMISSIONERS, Petitioner, Vv. UNITED STATES OF AMERICA AND INTERSTATE COMMERCE COMMISSION, Respondents. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT The National Association of Regulatory Utility Com- missioners (NARUC) petitions for a writ of certiorari to review the judgment of the United States Court of Appeals for the Eleventh Circuit entered on October 11, 1983. OPINIONS BELOW The opinion of the United States Court of Appeals for the Eleventh Circuit, attached as Appendix A, is reported at 716 F.2d 1369 (1983). The opinion of the Interstate Commerce Commission, attached as Appendix B, is re- ported at 132 M.C.C. 756 (1982). 2 JURISDICTION The decision of the Eleventh Circuit was entered on October 11, 1983. This petition was filed within 90 days of that date. The jurisdiction of this Court is invoked under 28 U.S.C. § 1254(1). STATUTES AND REGULATIONS Relevant statutory provisions and regulations are set forth in Appendix E. STATEMENT OF THE CASE The Motor Carrier Act (MCA) [as codified in the Interstate Commerce Act, Subtitle IV of Title 49, U.S. Code] defines motor common carriers and motor contract carriers as those carriers which transport the property of others for compensation in interstate and foreign com- merce. 49 U.S.C. §§ 10102(12) and( 13). Under the MCA, a motor private carrier is defined as a carrier transporting its own property. 49 U.S.C. § 10102(14). A carrier transporting goods for compensation (a for- hire carrier) is subject to the regulatory authority of the Interstate Commerce Commission (ICC or the Commis- sion) under the MCA, 49 U.S.c. § 10521, and therefore must, inter alia, obtain operating authority from the ICC. Private carriers are exempt from regulation under the MCA, and therefore, need not obtain ICC operating rights. Given the thousands of motor vehicles operated on a daily basis by both for-hire and private carriers, State and Federal enforcement officers must frequently and consistently determine whether an individual fact sit- uation constitutes regulated or exempt interstate trans- portation. On February 17, 1982, following notice and comment, the Commission served its decision in Ex Parte No. MC- 1 Unless otherwise noted, all references to Title 49, U.S. Code are to West Supp. 1982. 3 122 (Sub-No. 1), Lease of Equipment and Drivers to Pri- vate Carriers, 182 M.C.C. 756 (1982) Appendix B. In the words of the ICC, the primary purpose of this deci- sion was to redefine “the distinction between private and for-hire carriage in the context of leases of equipment with drivers to shippers.” App. B at 26b. In this sweep- ing decision, the ICC explicitly rejected the “control and substance” test employed by the Commission, the States, and the judiciary for determining whether a lease to a shipper of both the motor vehicle and its driver from a single source constitutes regulated for-hire carriage or exempt private carriage. Under this legal test, a shipper that undertakes such single-source leasing must both control the transportation (i.e., direct, dominate and con- trol the transportation), and assume in substance the characteristic burdens of transportation (i.e., bear the financial risk for the operation of the vehicle, employ- ment of its driver and carriage of its goods) to be classi- fied as an exempt private carrier. Importantly, under this test a given single-source lease was presumed to con- stitute for-hire carriage unless rebutted by the leasing parties. This two-pronged test for drawing the boundary between regulated and exempt carriage was established by this Court in United States v. Drum, 368 U.S. 370 (1962). To replace the longstanding “control and substance” test, the Commission in its February 1982 decision cre- ated a new legal standard—the “control and responsibil- ity” test to define the boundary between regulated and exempt carriage. This new test abolishes the presump- tion that absent rebuttal, single-source leasing arrange- ments constitute for-hire carriage. Under the test, a shipper need not establish an employer/employee rela- tionship with the driver of a leased vehicle to establish private carriage. Neither must the shipper assume the customary burdens associated with the financial risks of vehicle maintenance or nonutilization. 4 Petitions for review of the Commission’s decision were filed with the Eleventh Circuit in No. 82-5247 on Feb- ruary 26, 1982, and in No. 82-8133 on March 4, 1982, pursuant to 28 U.S.C. §§ 2342(5) and 2344. The cases were consolidated. On April 19, 1982, the Eleventh Cir- cuit granted the NARUC’s petition to intervene in No. 82-8133. Before the Eleventh Circuit, the NARUC argued that the ICC’s new test for establishing the boundary between for-hire and private carriage would have a devastating affect upon efforts of State regulatory agencies to enforce the requirements of State and Federal law within their respective jurisdictions. Relying upon this Court’s deci- sion in Drum, supra, holding that the definitions of for- hire and private carriage must “impose practical limita- tions” upon unregulated competition “in a manner which transcends the merely formal” (368 U.S. at 375), the NARUC asserted that when the ICC’s new policy took effect, there would be no practical basis for State en- forcement and regulatory officials to determine whether an individual single-source leasing arrangement consti- tuted private carriage or unlawful for-hire carriage. On October 11, 1983, the Eleventh Circuit issued its decision affirming the ICC. Appendix A. Subsequently, it stayed its mandate pending proceedings before this Court. Appendices C and D. On December 7, 1983, the American Trucking Associations, Inc., et al., filed a petition for writ of certiorari, No. 83-943. On December 22, 1983, Ryder Truck Lines, Inc. filed a separate petition for certiorari in No. 83-1030. 5 REASONS FOR GRANTING THE WRIT a. This Case Is Of Exceptional National Importance Be- cause Of Its Critical Impact On The Ability Of State Regulatory Officials To Enforce Lawful Motor Carrier Operations In The Public Interest In 1965, the Congress enlisted willing States to join the efforts of the Interstate Commerce Commission to en- force the regulatory requirements of the MCA against interstate carriers of passengers and property. Section 1 of the statute—Public Law 89-170, 79 Stat. 648 (1965)*—authorized the ICC to enter into cooperative agreements with the States “to enforce the economic laws and regulations of . . . . the United States concerning highway transportation”. 49 U.S.C. § 11502(a) (2) (C). Under section 2 of Public Law 89-170, Congress per- mitted individual States to require that interstate for- hire motor carriers register their Commission-granted operating authority. Specifically, under 49 U.S.C. § 11506, a State may require that interstate common and contract carriers file the following information with its State regulatory commission or department of transpor- tation: (1) copies of certificates (in the case of common carriers) and permits (in the case of contract carriers) issued by the Commission under 49 U.S.C. §§ 10922 and 10923 (Appendix E at 8e- 10e) ; (2) a list of motor vehicles operating pursuant to such certificates and permits; (8) evidence of liability and cargo insurance cover- age or qualification 2s a self-insurer; and ‘4) the name of an agent for the service of process within the State. 2 Codified at 49 U.S.C. § 11502, see Appendix E at 12e. * Codified at 49 U.S.C. § 11506, see Appendix E at 13e. 6 The Commission has promulgated regulations imple- menting Public Law 89-170 (49 C.F.R. Part 1023) which provide the States with a Federally sanctioned mechanism to enforce these registration requirements against inter- state motor carriers. Under the enforcement provisions of these regulations, 49 C.F.R. § 1023.103,*‘ a participat- ing State may impose criminal and civil penalties against a motor carrier operating within its borders that, for ex- ample, performs regulated interstate motor carriage with- out a certificate or permit issued by the ICC, fails to register its certificate or permit with the State regula- tory agency, lacks adequate insurance, operates motor vehicles not previously registered with the State, or fails to designate a resident agent for the service of process. Sanctions imposed by a State for such violations may in- clude fines, vehicle impoundment and criminal prosecu- tion. According to the most recent information collected by the NARUC from its member commissions, forty States apply and enforce the Public Law 89-170 registra- tion requirements against interstate motor carriers pos- sessing operating authority issued by the Commission.° On an operational level, the basic enforcement tech- nique used by the States to monitor operations of all classes and types of motor carriers remains the road check.* As * Appendix E at l6e. 5 National Association of Regulatory Utility Commissioners, 1982 Annual Report on Utility and Carrier Regulation (Washington, D.C. 1983) at 759. (“NARUC Annual Report”) The forty States: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connec- ticut, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Massachusetts, Michigan, Minnesota, Mississippi, Mis- souri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Wash- ington, West Virginia, Wisconsin and Wyoming. In addition, be- ginning on February 1, 1984, New York will enter this enforcement program. * State regulation of interstate carriers possessing ICC operating authority is complicated by the fact that two additional categories 1 7 the name implies, State enforcement personne] set up road blocks and stop motor vehicles to examine the law- fulness of carrier operations. Regulated and exempt in- terstate carriers, as well as intrastate carriers, are asked to produce evidence of proper State registration, proper insurance coverage, and resident agent designation, in addition to lawful vehicle size and weight compliance. Many States have extremely active road check programs which result in high levels of fines and arrests for viola- tions of Federal economic law. For example, in calendar 1982, the State of Montana observed a total of 113,826 interstate trucks and buses, uncovering 3,001 violations, resulting in $238,794 in fines. In 1982, Georgia made 1,321 arrests for interstate carriers collecting $311,400 in fines. Iowa arrested 4,208 interstate carriers and col- lected $177,885 in fines.” In sum, a vast majority of the States have taken seri- ously their responsibility to enforce the requirements of of carriers provide transportation services in and through the re- spective State jurisdictions: interstate carriers exempt from Com- mission regulation and intrastate carriers subject to State economic regulation. To enforce lawful and financially responsible exempt interstate carriage, many States have extended the registration and enforcement program established by P.L. 89-170 to exempt carriers. By passing legislation patterned after 49 U.S.C. § 11506 and 49 C.F.R. Part 1023, 27 States have implemented registration and enforcement programs which require interstate exempt carriers such as private carriers to register their operations, to maintain adequate levels of insurance, and to designate local process agents. NARUC Annual Report, at 759. Regarding intrastate motor carriage, 45 States require that motor carriers providing transportation services within their respective boundaries obtain operating authority from their State regulatory agencies. In addition to issuing intrastate authorities, these State agencies pervasively regulate major aspects of intrastate carriage: operating territories, service abandonments, rates, accounting prac- tices, safety, levels of insurance coverage and even the issuance of securities. NARUC Annual Report, at 773-774. 7 NARUC Annual Report at 753. 8 the MCA. Strong State enforcement efforts are sanc- tioned and encouraged by Public Law 89-170, as well as the National Transportation Policy, 49 U.S.C. § 10101 ° (NTP), which prescribes a safe, economically sound na- tional transportation system regulated in cooperation with the States and State officials, in which Federal law is “enforced to carry out the [NTP].” 49 U.S.C. § 10101(b).* Clearly then, such broad and active involve- ment by the States in the enforcement of Federal laws as specifically and explicitly authorized and encouraged by Congress creates an issue of national significance and importance when the effectiveness of these efforts is jeop- ardized. There can be little doubt that the decision of the Com- mission as affirmed by the Eleventh Circuit does consti- tute a grave threat to State motor carrier enforcement through a road check system. One of the first and most crucial issues confronting a State enforcement officer is whether the interstate carrier he or she has stopped is a private carrier needing no ICC operating rights or a for- hire carrier that’ must provide proof of its authority through the registration requirements contained in 49 C.F.R. Part 1023.° The determination that the State officer must make which is affected by the Commission’s decision involves that vehicle that is stopped at a road check which: (a) contains commodities.which are subject to ICC regulation; (b) operates in interstate commerce; (c) is owned by an owner-operator or a leasing company and driven by the owner-operator (or his employee) or the employee of the leasing company; (d) is purportedly 8 Appendix E at 2e. * Jd. 1° Under 49 C.F.R. § 1023.11 an interstate for-hire carrier may not operate in a participating State unless and until its authority has been properly registered. Appendix E at 15e. In additivn, the carrier may be required to identify each vehicle operated pursuant to its authority. 49 C.F.R. § 1023.31. Jd. 9 exempt from Commission regulation as a private carrier operating under a single-source lease; and (e) is there- fore not previously registered with the State under 49 C.F.R. §§ 1023.11 and 1023.31. With this vehicle and this carrier in mind, a comparison of the tests employed by the ICC to draw the line between for-hire and private carriage before and after its February 1982 decision makes clear the enforcement problems created for the States by that decision. “ In H.B. Church Truck Service Co., Common Carrier Application, 27 M.C.C. 191 (1940) (Church), the Com- mission held that a lease of equipment with driver to shipper creates a presumption of regulated, for-hire car- riage by the lessor. Only if the shipper-lessee could prove that it had “the exclusive right and privilege of directing and controlling the transportation service” could the pre- sumption of for-hire carriage be rebutted. 27 M.C.C. at 195-196. In Oklahoma Furniture Manufacturing Co.— Investigation of Operations, 79 M.C.C. 403 (1959) (Ok- lahoma Furniture), the Commission provided further guidance for the enforcement of the distinction between regulated and private carriage. The ICC, in interpreting the Church control test, held that an owner-operator driv- ing his own vehicle has the power to defeat “any sup- posed right to control that the shipper-lessee may believe exists.” 79 M.C.C. at 411. This decision necessarily strengthened the presumption in favor of regulated car- riage in cases in which the driver of the leased vehicle was also its owner. In United States v. Drum, 368 U.S. 370 (1962) (Drum), this Court affirmed the Commis- sion’s decision in Oklahoma Furniture, holding that the lease arrangement under review therein did not constitute private carriage because “the Company—([the shipper- lessee] was able to spare itself—and pass to the owner- operators—certain characteristic burdens of the trans- portation business.” 368 U.S. at 379." 11 The “burdens” of transportation which the Court found crucial in Drum included the owner-operators’ capital investment in equip- 10 Returning to the example described supra at 8-9, the “control and substance” test distilled from Church and Drum provides the State enforcement officer with a read- ily applicable and intelligible rule of law to determine whether the driver’s claim to be exempt from regulation is bona fide, or whether the vehicle is in fact engaged in unlawful for-hire transportation of regulated commodi- ties in interstate commerce without ICC authority. Under the Church and Drum analysis, the lessor is presumed to be engaged in unauthorized for-hire carriage unless the enforcement officer is satisfied that the lessor has satis- factorily rebutted the presumption by providing evidence that the shipper-lessee exercises sufficient control of the transportation service and has assumed the burdens of the transportation business. United States v. Casale Car Leasing, Inc., 385 F.2d 707, 711 (2nd Cir. 1967). Ab sent the production of some evidence of “control and sub- stance’’,” the fact that the vehicle is found transporting regulated commodities in interstate commerce without ICC authority creates the presumption of for-hire car- riage which establishes probable cause for the officer to take enforcement action in a road check situation. In place of the “control test” announced in Church coupled with the “substance test” announced in Drum, the Commission’s February 1982 decision would reverse the presumption of for-hire carriage as long as six “min- imum criteria for the performance of private carriage by a shipper” were met. Appendix B at 57b.* The most ment, risk of premature depreciation or loss, unforeseen increases in operating and maintenance costs, and the risk of non-utilization of “high-priced equipment.” 368 U.S. at 379-380. 12 Such evidence would include bills of lading, employment status of the driver, copies of written lease agreements, and markings on the vehicle. 18 These six criteria, in essence, establish the minimum terms of a single-source lease which the ICC indicates will satisfy its new definition of private carriage: (1) the lease must be for 30 days or 11 significant change in the legal tests for distinguishing for-hire from regulated carriage, of course, is the ICC’s decision to eliminate the presumption of for-hire carriage. See also Appendix B at 26b. The elimination of this presumption will fundamentally affect State enforcement procedures. Returning to the example supra, under the Commission’s decision, the State officer will no longer be able to base a finding of probable cause solely on the unrebutted fact that the vehicle in question is transport- ing regulated commodities in interstate commerce with- out an ICC certificate or permit. Simply stated, he or she can no longer presume that such carriage is unlawful for-hire carriage. Rather, the officer must determine if the single-source lessor has satisfied the six “minimum criteria”, drawing no inference from the carrier’s here- tofore apparent for-hire status. Although the six minimum criteria upon which the officer must now determine the status of the single-source lessor would appear to establish objective measures for drawing the line between for-hire and private carriage, they are so riddled with exceptions and qualifications as to render them unenforceable. The most serious and obvious deficiency is the fact that the Commission’s decision does not require that single- source leases be in writing. Appendix B at 37b. In ef- fect, the Commission has determined that hard evidence of the six minimum criteria deemed necessary to estab- lish private carriage need not be available to State en- more; (2) the equipment subject to the lease must be exclusively committed to the shipper’s use; (3) the shipper must agree to except exclusive control and responsibility for the use of the equip- ment; (4) the shipper must provide liability insurance and equip- ment identification; (5) the shipper must ensure safety compliance; and (6) the shipper must maintain cargo insurance. See Appendix B at 57b. 14 The ICC does, however, require written leases between for-hire regulated carriers and owner operators. 49 C.F.R. § 1057.11(a). 12 forcement officers in a road check situation. Presumably then, the officer confronting the purported private carrier must accept as evidence of the shipper’s “control and responsibility” the driver’s oral explanation of an oral lease agreement. We submit that standing alone the lack of a written lease requirement in the Commission’s deci- sion creates a formula for chaos for State enforcement efforts.’* The Commission’s decision creates additional enforce- ment problems for the States beyond the question of a written lease. Although the Commission appears to re- quire that equipment subject to a single-source lease be committed exclusively to the shipper’s use for the term of the lease and that the shipper must accept exclusive con- trol over leased equipment (Appendix B at 57b), the ICC would permit subleasing to third parties during the leas- ing period. Appendix B at 34b-35b. Moreover, the Com- mission would apparently permit multiple subleases dur- ing the period of the principal lease. Jd. Presumably, such subleases may be oral leases with other shippers which comply with the six minimum criteria. In light of the [CC’s decision, we return once more to the road check situation described supra: the State offi- cer confronting the unregistered interstate vehicle trans- porting regulated commodities without ICC authority now finds that the driver has no written single-source lease; rather, the driver claims to be operating on an oral sub- lease with a shipper during the period of an oral lease with a second shipper. Under the ICC’s decision, this arrangement may be perfectly legitimate private car- riage, or it may be a subterfuge to avoid for-hire regula- tion. Although the true status of this carrier may be 15 In its decision, the Commission contends that it has no author- ity to require a written lease. Appendix B at 38b. Yet, it found the authority to require that leases apply for 30 days or more, or that shipper-lessees meet safety and insurance requirements. Appendix B at 57b. 13 determinable in a judicial-type proceeding, the State offi- cer must determine on the spot whether this purported private carrier is in fact performing illegal for-hire car- riage. We submit that the enforcement problems inherent in this situation are obvious. Without the presumption of for-hire carriage, without a written lease requirement, and without a binding exclusivity requirement, we sub- mit that State enforcement will become no more than guesswork. As we have shown, the ICC’s decision is of excep- tional national importance, directly and seriously harm- ing the efforts of at least forty-one States to vindicate Federal and State policies that lawful motor carriage be vigorously enforced on the Nation’s highways. In light of the importance of this case, the Eleventh Circuit’s de- cision to affirm the Commission requires review by this Court because that decision directly conflicts with this Court’s decision in United States v. Drum, supra, an is- sue to which we now turn. b. The Decision Of The Eleventh Circuit Affirming The Commission’s Single-Source Leasing Policy Directly Conflicts With This Court’s Decision In Drum That Definitions Of For-hire And Private Carriage Must Establish Practical And Enforceable Limitations Upon Private Shippers In United States v. Drum, supra, this Court agreed to review the identical question presented herein: whether the ICC properly developed a legal standard for distin- guishing regulated for-hire carriage from exempt private carriage. There, in the context of an individua! enforce- ment pruceeding, the Court held that in light of the “im- precise definitional language” of the statute (i.e., the MCA), the ICC was obligated to establish workable and practical definitions of for-hire and private carriage to ensure that unregulated private carriage would not en- croach upon regulated industry: 14 “Accordingly, the statutory definitions, while con- firming that a shipper is free to transport his own goods without utilizing a regulated instrumentality, at the same time deny him the use of ‘for compensa- tion’ or ‘for hire’ transportation purchased from a person not licensed by the Interstate Commerce Com- mission. Because the definitions must, if they are to serve this purpose, impose practical limitations upon unregulated competition in a regulated industry, they are to be interpreted in a manner which transcends the merely formal.” “The problem is one of determining—by reference to the clear but broad remedial purpose of a regulatory statute committed to agency administration—the ap- plicability to a narrow fact situation of imprecise definitional language which delineates the coverage of the measure.” 368 U.S. 375-376. Clearly, by this language, this Court intended that the ICC devise and implement definitions of for-hire and pri- vate carriage which are practically discernible (“which transcend the merely formal”) in order that the imprecise statutory definitions could be molded into an effective mechanism for enforcing the licensing requirements of the MCA against shippers seeking to avoid the reach of the regulatory statute. As we have shown, supra, the ICC’s February 1982 decision, despite its extended discussion of “changed cir- cumstances”, new Congressional policy and the like, con- tains no workable mechanism which would enable State enforcement personnel to practically distinguish for-hire and private carriage on a daily basis."° We respectfully 16 Indeed, in order to establish a consistent enforcement policy aimed at preventing the subterfuge of for-hire regulation, a State would be well-advised to issue citations to the driver of every single- source vehicle its officers can observe. Ultimate resolution of the * 15 submit that the Eleventh Circuit’s affirmance of the Com- mission’s failure to abide by the instructions of this Court in Drum is error, requiring review by this Court. The Eleventh Circuit devoted little attention to the en- forcement issue in its affirmance. Appendix A at 38a. Basically, the Court concluded that the enforceability of the Commission’s single-source leasing policy was best left for another day “in the context of individual en- forcement proceedings.” Jd. In avoiding this issue, the Court agreed with the Commission’s argument that “changed circumstances” justified its new leasing policy, but admonished the ICC to respond accordingly to evi- dence that subterfuge of for-hire carriage requirements “continue as a threat to a stable and efficient regulated industry... .” Jd., at n.23. In reaching these conclusions, the Eleventh Circuit’s misunderstanding of the requirements of Drum is ap- parent. First, the Court’s’reliance upon so-called “changed . circumstances” is misplaced. The statutory definitions of common carrier, contract carrier, and private carrier, and the requirement that regulated carriers obtain certifi- cates or permits have not changed since this Court’s de- cision in Drum 17. Despite major reforms to the MCA,” Congress has chosen to preserve the basic distinction be- tween for-hire and private carriage, and to require that parties performing for-hire transportation be regulated under the MCA. Although as in Drum, the statutory definitions remain imprecise, the ICC’s new single-source leasing policy, as we have shown, is so destructive of the operational distinction between regulated and exempt carrier’s claim of private carriage would then occur in a judicial proceeding better suited to determining compliance with the ICC's new definitions. 17 See Appendix E. 18 Most notably, the Motor Carrier Act of 1980, Pub. L. No. 96- 296, 94 Stat. 798 (1980). 16 carriage necessary for effective enforcement that the Eleventh Circuit’s conclusion to affirm requires review. Second, contrary to the Eleventh Circuit’s language, subterfuge is not prosecuted to maintain a “stable and efficient regulated industry.” Rather, States seek to pre- scribe unlawful for-hire carriage because it is illegal pur- suant to the requirement of 49 U.S.C. § 10921 (Appendix E at 83) that all for-hire carriers be licensed by the ICC. Clearly, a State does not prosecute an individual carrier because his unauthorized for-hire carriage poses a threat to regulated industry. Indeed, it would be virtually im- possible for any party to prove, for example, that the unlawful operations of a single owner-operator occasioned such a broad threat. Yet, the Eleventh Circuit apparently directs the Commission (and presumably the States) to take action against subterfuge only when violation of the MCA reaches epidemic proportions. Appendix A at 33a, n.23. In issuing this directive, the Eleventh Circuit again misapprehends the requirement of Drum that the defini- tions of the MCA impose practical limitations on unregu- lated private carriage. Finally, despite its concern that the ICC’s policy may destroy an enforceable line between for-hire and private carriage, the Eleventh Circuit concludes that the Com- mission’s policy “if applied in a reasonable manner” should be upheld. Appendix A at 38a-34a, n.24. We re- spectfully submit that the Commission’s policy, based as it is upon six “minimum criteria” with their attendant loopholes and exceptions (Appendix B at 57b), is incapa- ble of application “in a reasonable manner” in the con- text of State enforcement activities. As we have shown, the crucial determination which must be made by a State officer confronting a single-source leasing situation (i.e., whether the carrier is a private or illegal for-hire car- rier) will be mere guesswork. It is difficult to conceive of a more arbitrary enforcement policy, but the States may well be forced to cite each privately leased driver 17 they observe in order to apprehend that percentage of carriers which will abuse the ICC’s new leasing policy. Clearly, this Court should review this policy to avoid such a result. For these reasons, we submit that the Eleventh Cir- cuit’s decision conflicts with this Court’s holding in Drum that the definitions of the MCA “be interpreted in a man- ner which transcends the merely formal.” 368 U.S. at 375. The Commission’s policy, ill-suited as it is to effec- tive, practical enforcement of the laws of the United States and the States, is precisely the sort of formalism that Drum would proscribe. CONCLUSION For all of the reasons set forth herein, Petitioner prays that a writ of certiorari be issued to the United States Court of Appeals for the Eleventh Circuit. Respectfully submitted, WILLIAM PAUL RODGERS, JR. General! Counsel CHARLES D. GRAY Assistant General Counsel GENEVIEVE MORELLI Deputy Assistant General Counsel National Association of Regulatory Utility Commissioners 1102 ICC Building Post Office Box 684 Washington, D.C. 20044 (202) 628-7324 Dated: January 9, 1984 APPENDICES la APPENDIX A UNITED STATES COURT OF APPEALS ELEVENTH CIRCUIT Nos. 82-5247, 82-8133 RYDER TRUCK LINES, INC., Petitioner, V. UNITED STATES OF AMERICA and INTERSTATE COMMERCE COMMISSION Respondents. BOWMAN TRANSPORTATION, INC., et al., Petitioners, Vv. UNITED STATES OF AMERICA, and THE INTERSTATE COMMERCE COMMISSION, Respondents. Oct. 11, 1983 Petitions for Review of Orders of the Interstate Commerce Commission Before KRAVITCH, HENDERSON and ANDERSON, Circuit Judges. R. LANIER ANDERSON, Circuit Judge: 2a Petitioners’ request that we set aside a policy state- ment issued by the Interstate Commerce Commission (ICC or Commission) in a proceeding formally entitled Ex Parte No. MC-122 (Sub-No. 2), Lease of Equipment and Drivers to Private Carriers (February 9, 1982). In essence, the ICC has announced a new formula for determining whether a particular transportation leasing arrangement constitutes “for-hire carriage,” subject to ICC regulation, or “private carriage” exempt from such regulation. Because we conclude that a rational basis exists for the new formula proposed by the ICC, we deny the petition. : I. The Regulation of “For-Hire” Carriage. The Motor Carrier Act of 1935, 49 Stat. 543-67, 49 U.S.C.A. § 10101, et seg. (West 1982 Pamphlet), sub- jects the provision of for-hire motor transportation to regulation by the ICC. The aim of the act generally is “to assure that shippers . . . will be provided a healthy system of motor carriage to which they may resort to get their goods to market.” United States v. Drum, 368 U.S. 370, 374, 82 S.Ct. 408, 410, 7 L.Ed.2d 360 (1962) ; see S.Doc. No. 152, 73rd Cong., 2d Sess. (1934); H.R. Doc. No. 89, 74th Cong., Ist Sess. (1935) ; H.R.Rep. No. 1645, 74th Cong., 1st Sess. (1985). In order to achieve this goal of a stable transportation industry, the Act provides for collective rate-making and erects stringent 1 Petitioners in these consolidated actions include Ryder Truck Lines, Inc., American Trucking Associations, Inc., Common Carrier Conference-Irregular Route, Regular Common Carrier Conference, National Tank Truck Carriers, Inc., Specialized Carriers and Rig- ging Association, National Automobile Transporters Association, Bowman Transportation, Inc., and the Steel Carriers Tariff As- sociation, Inc. The following parties are intervenors in this action: the National Association of Regulatory Utility Commissioners, the American Movers Conference, and the International Brotherhood of Teamsters, Chauffeurs, Warehousemen, and Helpers of America. All petitioners and intervenors hereinafter will be referred to col- lectively as “petitioners.” 3a barriers to entry into the transportation industry to en- sure the need for, and reliability of, those carriers au- thorized to engage in for-hire transportation. The Act also recognizes the need to allow a merchant to continue to transport its own goods “in furtherance of its non- transportation business.” Mercury Motor Express, Inc. v. United States, 648 F.2d 315, 317 (5th Cir. June 18, 1981) ;? see S.Rep. No. 482, 74th Cong., 1st Sess. (1935) ; H.R.Rep. No. 1645, supra. The Act therefore regulates only “common” or “contract” carriers that engage in transportation for compensation or “for-hire carriage.” See 49 U.S.C.A. §§10102(11) & 10102(12). The Act specifically exempts from regulation private carriage. 49 U.S.C.A. § 10102(13). The original Motor Carrier Act, however, did not pro- vide a substantive definition of private carriage, but rather defined private carriers as transporters of prop- erty who are neither common nor contract carriers. Thus, from the outset the ICC was entrusted with the responsibility of determining when the provision of trans- portation services constitutes exempt private carriage. Moreover, the ICC was required to define this exemption in a manner consistent with Congress’ desire to protect shippers from the diversions of traffic that would result from an overly competitive transportation industry. See United States v. Drum, 368 U.S. at 374-76, 82 S.Ct. at 410-11. This policy of protecting the motor carrier in- dustry, requiring stringent barriers to entry into the industry, led the ICC at an early date to scrutinize closely nominally private transportation arrangements. Of par- ticular concern to the ICC was a practice known as “single-source leasing,” in which the shipper leases both vehicle and driver from the same source. For example, 2In Bonner v. City of Prichard, 661 F.2d 1206 (11th Cir. 1981) (en banc), this court adopted as binding precedent all of the deci- sions of the former Fifth Circuit handed down prior to the close of business on September 30, 1981. Jd. at 1209. 4a when a shipper leases the vehicle and driving services of an owner/operator, the ICC must determine whether that owner/operator is engaging in transportation for com- pensation (for-hire carriage) or whether the shipper is legitimately engaged in procuring equipment and service necessary to engage in private carriage, incidental to its primary non-transportation business. A single-source ar- rangement potentially can be used to evade the ICC’s regulatory authority. In H.B. Church Truck Service Co. Common Carrier Application, 27 M.C.C. 191 (1940), overruled, 132 M.C.C. 758 (1982), the ICC recognized the possibility of subterfuge in single-source leasing and attempted to lay down a test to be used when determining whether such arrangements constitute private carriage. The Commis- sion stated that “[e]ssentially the issue is as to who has the right to control, direct, and dominate the performance of the service.” Jd. at 195. If that right of control re- mained with the lessor, then the lessor would be engaged in for-hire carriage, and subject to ICC regulation On the other hand, if the right to control, direct and domi- nate remained with the lessee (i.e., shipper), then the shipper would be engaged in exempt private carriage. Equally important, however, the Commission announced that a presumption of for-hire carriage would arise when the shipper leases both vehicle and driver from a single source, such as an owner/operator or a leasing agency. This presumption would yield “to a showing that the shipper has the exclusive right and privilege of directing and controlling the transportation service, as, for exam- ple, if the equipment were operated by the shipper’s em- ployee.” Jd. at 196. Finally, the determination necessary to rebut the presumption of for-hire carriage would be made in light of all facts and circumstances, none of which would be conclusive by itself.* Thus, the Church In Church the Commission found that the arrangement at issue did constitute for-hire transportation. The particular facts which 5a case formulated the “control” test for distinguishing pri- vate carriage from for-hire carriage, and created a re- buttable presumption of for-hire carriage when the shipper engages in single-source leasing. In 1958, Congress, seeing the need to reinforce the Commission’s efforts at preventing subterfuge and eva- sion of its authority, amended the Motor Carrier Act to clarify somewhat the definition of private carriage. This amendment provided that in order to constitute exempt private carriage it is necessary that: (1) the property is transported by a person engaged in a business other than transportation; and (2) the transportation is within the scope of, and furthers a primary business (other than transporta- tion) of the person. Pub.L. 85-626, 72 Stat. 574 (1958), codified at 49 U.S.C.A. §10524 (West 1982 pamphlet) (emphasis added); see H.R.Rep. No. 1922, 85th Cong., 2d Sess. (1958); S.Rep. No. 1647, 85th Cong., 2d Sess. (1958).* led the Commission to hold that the shipper had not exercised suffi- cient control over the lessor were: (1) the lessor was responsible for maintenance of the vehicle; (2) the lessor paid operating ex- penses, drivers’ salaries, taxes and unemployment compensation; and (3) the lessor provided liability and collision insurance. See 27 M.C.C. at 195-96. * The “primary business” test may be viewed as the overall defi- nition of private carriage, while the “control” test, and later, the “substance” test, see below, are the means for determining whether transportation is incidental to a primary business. See Farris & Southern, Federal Regulatory Policy Affecting Private Carrier Trucking, 49 1.C.C.Prac.J. 508, 512-15 (1982). Congress’ adoption of the primary business test was caused by the proliferation of so- called “buy-sell” arrangements under which carriers attempted to avoid ICC regulation by literally purchasing the goods to be trans- ported and then selling them upon reaching their destination. By engaging in such arrangements carriers would literally be shipping their own goods: superficially, this would seem to constitute pri- 6a Contemporaneously with the 1958 amendments, the Commission itself began to reformulate the control test it had announced in Church. Thus, in Pacific Diesel Rental Co.—Investigation of Operations, 78 M.C.C. 161 (1958), the Commission held that the contro] test re- quired an answer to the following question: “Are any persons ... in substance engaged in the business of in- terstate or foreign transportation . . . for hire?” Id. at 172 (using both new formulation and older “control” test). The reformulation signaled a more searching in- quiry that was to focus not only on the physical aspects of control and direction, but also on the financial ar- rangements existing between the lessor and the shipper." This refinement reached its culmination in Oklahoma Furniture Manufacturing Co.—Investigation, Operations, 79 M.C.C. 408, 409-10 (1959), overruled, 132 M.C.C. 758 (1982), in which the Commission announced that the con- trol test was a separate inquiry from that required in Pacific Diesel, and that Pacific Diesel in essence created a supplementary test of “substance.” Under the Com- vate carriage. Both the Commission and Congress, however, saw the arrangement quite differently. See Brooks Transp. Co. v. United States, 93 F.Supp. 517 (E.D. Va. 1950), aff'd, 340 U.S. 925, 71 S.Ct. 501, 95 L.Ed. 668 (1951) (mem.). Thus, the Senate Report states that the amendment was intended “to correct most of the abuses that have arisen in the name of private carriage and yet would not in any way jeopardize or interfere with the operations of private carriers to provide transportation service—even if the charge is made—as an integral part of a primary business func- tion.” S.Rep. No. 1647, supra, at 5. See also Nuclear Diagnostic Laboratories, Inc., Contract Carrier Application, 131 M.C.C. 578, 581-84 (1979). Perhaps more significant, however, was the Senate’s continued concern with the diversion of traffic from regulated car- riers to illegitimate private carriers. Such illegitimate carriers could avoid not only ICC rate and licensing requirements, but could also avoid payment of federal excise taxes. S.Rep. No. 1647, supra, at 23. 5 See generally, M. Fair & J. Guandolo, Transportation Regula- tion 84 (8th ed. 1979). Ta mission’s new two-pronged test, in order to find that a particular arrangement constitutes private carriage, it would be necessary that no person other than the shipper had “any right to control, direct, and dominate” the transportation service and that no person was “in sub- stance, engaged in the business of . . . transportation of property ... for hire.” 79 M.C.C. at 410. Moreover, the Commission stated that with regard to the first prong, the control test, “there is present, whenever the owner- operator drives his own equipment, the right and power of the lessor to defeat any supposed right to control that the shipper lessee may believe exists.” Jd. at 411 (em- phasis added). As a result of this two-prong test, the exercise of physical contro] and domination by the shipper no longer would necessarily suffice to support a finding of private carriage. Rather, under the “substance” prong of the inquiry, the Commission would examine the finan- cial relationship between the lessor and the shipper in an effort to determine whether the lessor was in effect providing a transportation service to the shipper.*® This new formulation by the Commission was expressly upheld by the United States Supreme Court in United States v. Drum, 368 U.S. 370, 82 S.Ct. 408, 7 L.Ed.2d 360 (1962). During the course of its opinion, the Su- preme Court examined Commission case law and stated that the new two-prong test announced by the Commis- * The financial factors found by the Commission in Drum, which proved the existence of for-hire carriage, were as follows: (1) the owner/operators provided exclusive use for a continuous period of time; (2) equipment was furnished, maintained and driven by the owners; (3) all operating costs and trip expenses were borne by the owners; and (4) the owners guaranteed a fixed cost for the transportation and assumed the risk of all losses. 79 M.C.C. at 412. One authority has identified 14 factors that often are considered by the Commission in making its determination. See generally, Mat- thews, Truck Leasing by Shippers and the Problem of Dangling Instrumentalities, 32 1.C.C.Prac.J. 370 (1964). For a concise history of the development of the Commission’s views as to what constitutes private carriage, see Farris & Southern, supra note 3, at 505-16. 8a sion was in reality “an explicit recognition [of] a premise which has long been implicit in [the Commis- sion’s] decisions: That some indicia of private carriage may be assumed, and detailed surveillance of operations undertaken, without a shipper’s having significantly shouldered the burdens of transportation.” 368 U.S. at 383-84, 82 S.Ct. at 414-15 (emphasis added). The court thus interpreted the Commission’s examination of the financial relations between the parties as permissibly treating financial risks as a significant burden of trans- portation. Jd. at 385, 82 S.Ct. at 415. To date, the Com- mission generally has followed the analysis set forth in United States v. Drum, and has examined not only the degree of contro] exercised by the shipper but also the financial obligations, liabilities, and risks allocated to each party. Further, the Commission has continued to rely on the presumptions announced in Church and Drum. See, e.g., All Points, Inc.—Investigation of Operations, 123 M.C.C. 242 (1975) ; Snyder’s Wholesale Liquors, Inc., Petition, 113 M.C.C. 528 (1971); American Equipment Rental, Inc.—Investigation, 96 M.C.C. 383 (1964). Com- pare Ontario Co.—Declaratory Order, 112 M.C.C. 211 (1970); Rayette, Inc.—Investigation of Operations, 108 M.C.C. 410 (1969). II. The Policy Statement The instant proceeding commenced on December 24, 1980, when the ICC made public a proposed policy state- ment, Ex Parte No. MC-122 (Sub-No. 2) Lease of Equip- ment and Drivers to Private Carriers, 132 M.C.C. 351, 45 Fed. Reg. 86766 (Dec. 31, 1980) (Notice of Proposed Policy Statement). The purpose of the proposal was “to consider whether, in light of the exempt nature of private carriage operations, [the Commission] should modify [the] current policy prohibiting persons who do not hold operating authority from this Commission (e.g., owner/ operators) from leasing their equipment with drivers di- 9a rectly to private carriers for the performance of private carriage operations. .. .” 132 M.C.C. at 352. Accord- ingly, the Commission solicited notice and comment from all interested parties, held a public hearing during the course of the proceeding, and issued its final policy state- ment on February 9, 1982. See Lease of Equipment and Drivers to Private Carriers, 132 M.C.C. 756 (1982), 47 Fed. Reg. 7885 (Feb. 23, 1982).’ The substance of this new policy was a reformulation of the criteria to be applied in determining whether a particular leasing arrangement constitutes private or for- hire carriage. Specifically, the Commission declared that no longer would it employ the presumption announced in Church that leases of equipment with drivers (single- source leases) ordinarily constitute for-hire transporta- tion by the lessor. Further, the Commission rejected the presumption announced in Oklahoma Furniture and up- held in Drum that an owner/operator when driving his own equipment has the inherent right and power to de feat the shipper’s ability to control, direct and dominate transportation. In addition to eliminating these presump- tions, the Commission promulgated a list of factors that it will examine when determining whether exempt private carriage exists.* Further, the Commission announced a list of minimum requirements which if included in a lease between a shipper and an owner/operator would create a presumption that “the transportation being per- 7 The final policy statement was to become effective 30 days after publication in the Federal Register, thus complying with § 4 of the Administrative Procedure Act. See 5 V.S.C.A. $553(d) (West 1977). 8 According to the Commission: [Wle intend to focus on control, responsibility, and the per- formance of key organizing and management functions of a transportation service as the critical elements of determining who is performing service, and in characterizing the type of carriage being performed. 132 M.C.C. at 777. 10a formed is private carriage controlled by the shipper.” 132 M.C.C. at 778. According to the Commission, such a presumption could be rebutted by a showing that the actual operation of the lease arrangement indicated an absence of the degree of control and responsibility re- quired of the shipper.®* * The list of minimum requirements is as follows: (1) the leased equipment must be exclusively committed to the lessee’s use for the term of the lease; (2) the lessee must have exclusive dominion and control over the transportation service during the term of the lease; (3) the lessee must maintain liability insurance for any injury caused in the course of performing the transportation service; (4) the lessee must be responsible for compliance with safety regula- tions; (5) the lessee must bear the risk of damage to cargo; and (6) the term of the lease must be for a minimum period of 30 days. 132 M.C.C. at 778-79. According to the Commission, when the fore- going terms are embodied in a lease, then a presumption of private carriage will arise. Additionally, the Commission enumerated ten other factors which, though not conclusive, are entitled to weight: (1) whether the lease is in writing; (2) whether the lease is for round trips; (3) whether the driver becomes the lessee’s employee; (4) whether the equipment is sometimes driven by a person other than the owner/operator or someone selected by him; (5) whether the lease is of tractor only, or of tractor and trailer; (6) who as- sumes the risk of loss or damage to the equipment, and who pays for fire, theft, and collision insurance thereon; (7) whether the lessee pays or reimburses the driver for such expenses as fuel, oil, tolls, en route repairs, and loading/unloading charges; (8) whether the lessor is required to repair and maintain the equipment; (9) whether the lease provides for some fixed minimum payment, re- gardless of use; and (10) whether the lessee is assisting the !essor to finance the equipment, and/or whether it holds legal title in trust for the lessor. Jd. at 780-82. The primary thrust of the Commis- sion’s enumeration is to deemphasize certain of the factors referred to in Drum as “significant burdens of transportation.” 368 U.S. at 385, 82 S.Ct. at 415. In particular, the Commission no longer views as highly significant such factors as whether the shipper has avoided the need for capital investment, whether the lessor assumes the risk of non-utilization of property, whether maintenance is per- formed at the expense of the lessor, and whether compensation is based on mileage or is at a flat fee. Compare 132 M.C.C. at 776, with Heavy Equipment Rental Co., Investigation, 98 M.C.C. 365 (1964). According to the Commission, other factors are equally or lla The policy statement makes clear, however, that the Commission will not rely upon any precise formula or list of criteria, or: restrict [its] inquiry to the formal recitals of the lease agreement, but will—as in the past—examine all surrounding facts and circumstances and the actual conduct of operations under the lease to as- certain if the true substance of the arrangement is in accord with that recited in the formal agree- ment.” Id, at 776." more indicative of private carriage. See 182 M.C.C. at 776 (“Our present view of what the term ‘characteristic burdens of transporta- tion’ encompasses is not the same as that utilized in the Commis- sion’s earlier decisions”). 10 The Commission’s list of criteria which give rise to a presump- tion that service is private carriage is comparable to the criteria now used to determine whether an owner/operator may lease his equipment and services to a regulated common carrier. Indeed, the Commission has explicitly stated that henceforth the same test of control shall govern regardless of whether the user is a regulated carrier or a private shipper: When a private carrier furnishes service in vehicles owned and operated by others, it must control the service to the same ex- tent as if it owned the vehicles, but need control the vehicles only to the extent necessary to be responsible to the public and the Department of Transportation. 132 M.C.C. at 777 (paraphrasing standard of control used for leases by owner/operators to regulated carriers, see Lease and Interchange of Vehicles by Motor Carriers, 52 M.C.C. 675, 681 (1951) ), modified, 64 M.C.C. 361 (1955), modified, 68 M.C.C. 558 (1956); see 49 C.F.R. § 1057.-11-.12. During the course of this proceeding, the Commission placed great reliance on the inherent logic of applying the same test of control to private shippers that has always been applied to common carriers leasing from a single source. The logic is not compelling, however. As the Commission points out, the use of different standards of “control,” depending upon whether the lessee is a shipper or a regulated carrier, may be explained by the earlier policy of encouraging owners and operators 12a On March 4, 1982, parties in opposition to the policy statement petitioned the Commission for a stay of its order pending judicial review. This petition was denied on March 18, and a petition for judicial review of the Commission’s policy statement was duly filed in this court. Although the great number of petitioners has resulted in an even greater number of issues, petitioners’ essential to ally themselves with the regulated industry. By affirmatively discouraging the use of owner/operators by shippers, the ICC could ensure that they would be regulated by virtue of their relationship to a regulated carrier. See 182 M.C.C. at 767. Thus, the Commis- sion argues, because Congress is no longer concerned with protect- ing carriers from diversions of traffic, there is no reason to con- tinue discouraging owner ‘operators from working for private ship- pers. This argument has a superficial appeal, but is vulnerable in several respects. First, the Commission's parity argument ignores the reality of the regulations regarding the owner/operator- common carrier relation. Regulated carriers which utilize the services of owner/operators have for some time been subject to “Truth in Leasing” regulations which are aimed primarily at pro- tecting owner/operators. See 49 C.F.R. § 1057. The requirements contained in those regulations go much further toward ensuring that common carriers assume control and responsibility for leased owner ‘operators than anything the Commission has proposed as between shippers and owner/operators. Second, a more relaxed standard of control in the regulated carrier context would be rea- sonable because there is no possibility for subterfuge; owner/ operators hauling goods for others through some kind of arrange- ment with a regulated carrier will be regulated in any event, either by direct regulation of the owner/operator, or, if controlled by the carrier, by regulation of the carrier. There can be no escape from regulation. It is for precisely this reason, i.e., escaping regulation, that owner operators may attempt to lease to private carriers. Thus, the potential for subterfuge is present only in the private carriage context. Further, the Commission's “parity” argument does not take into account the significant reasons, other than eco- nomic, for encouraging owner/operators to bring themselves under the control of regulated rather than private carriers. See Record at 155-71 (documenting safety requirements imposed by common carrier on owner/operators). For these reasons, the Commission's attempt to equate the control requirements in the regulated and private context is not, by itself, persuasive. 13a contentions are as follows: (1) the Commission im- properly proceeded by way of a general statement of policy rather than through rule-making; (2) the pro- posed changes are beyond the Commission’s statutory au- thority; (8) the change in policy is arbitrary, capricious, or an abuse of discretion; and (4) the Commission failed to abide by the requirements of the National Environ- mental Policy Act (NEPA), 42 U.S.C.A. § 4321, et seq. (West 1977), and the Energy Policy and Conservation Act (EPCA), 42 U.S.C.A. § 6201, et seg. (West 1977). Each of these contentions will be discussed in turn. III. Policy Statement or Rule-Making Petitioners first argue that because of the far reaching and binding effect which the policy statement will have on future adjudication the Commission acted improperly in proceeding by way of a general statement of policy rather than through a rule-making procedure in accord- ance with the requirements of § 4 of the Administrative Procedure Act, 5 U.S.C.A. § 553 (West 1977)." Petitioners concede that though this proceeding was labeled a “proposed policy statement,” the Commission complied with the notice and comment requirements of $4. Nonetheless, in order to determine the relevant standard of review, see 5 U.S.C.A. §706(2) (West 1977), we must determine whether the Commission’s action was properly denominated a general statement of 1! Section 553 requires generally that the agency provide notice of a proposed rule-making in the Federal Register, reference to the legal authority under which the rule is proposed, and a description of the subjects and issues involved. Further, § 553 requires that interested parties have an opportunity to submit relevant data, comments, and arguments. Finally, the agency must publish the rule 30 days prior to its effective date, and incorporate in the rule a “concise genera] statement” of the rule’s basis and purpose. See 5 U.S.C.A. § 553 (West 1977). However, § 553 exempts from the “notice and comment” requirements “interpretive rules, general statements of policy, or rules of agency organization, procedure, or practice.” 5 U.S.C.A. §553(b) (A) (emphasis added). l4a policy. Although making this determination is often “akin to wandering lost in the Serbonian bog,” Jean v. Nelson, 711 F.2d 1455 (11th Cir. 1983), reh’g granted, 714 F.2d 96 (1983), “enshrouded in considerable smog,” Noel v. Chapman, 508 F.2d 1023, 1030 (2d Cir.), cert. denied, 423 U.S. 824, 96 S.Ct. 37, 46 L.Ed.2d 40 (1975), the question need not detain us long. Generally, whether a particular agency proceeding an- nounces a rule or a general policy statement depends upon whether the agency action establishes “a binding norm.” Guardian Federal Savings and Loan Association v. Federal Savings and Loan Insurance Corp., 589 F.2d 658, 666 (D.C. Cir. 1978) (quoting Pacific Gas & Elec- tric Co. v. FPC, 506 F.2d 33, 38 (1974); see American Trucking Association v. ICC, 659 F.2d 452, 463 (5th Cir. Oct. 23, 1981) (Unit A), cert. denied, — U.S. —, 1038 S.Ct. 1272, 75 L.Ed.2d 493 (1983); Mercury Motor Ex- press, Inc. v. United States, 648 F.2d at 319; Brown Express, Inc. v. United States, 607 F.2d 695, 701 (5th Cir. 1979); Regular Common Carrier Conference of the American Trucking Associations, Inc. v. United States, 628 F.2d 248, 250-51 (D.C. Cir. 1980). The key inquiry, therefore, is the extent to which the challenged policy leaves the agency free to exercise its discretion to fol- low or not to follow that general policy in an individual case, or on the other hand, whether the policy so fills out the statutory scheme that upon application one need only determine whether a given case is within the rule’s criterion. As long as the agency remains free to consider the individual facts in the various cases that arise, then the agency action in question has not established a bind- ing norm. See Aierican Trucking Associations, Inc. v. ICC, 659 F.2d at 463; Regular Common Carrier Con- ference of the American Trucking Associations, Inc. v. United States, 628 F.2d at 251 (if agency explicitly says new policy leaves open free exercise of informed discre- tion, then rights and duties have not actually been 15a diminished, and binding norm has not been established) ; Guardian Federal Savings and Loan Association v. Fed- eral Savings and Loan Insurance Corp., 589 F.2d at 667 (agency must remain prepared to defend policy in sub- sequent proceeding and may not claim matter is fore closed). As noted earlier, the Commission has explicitly stated that each case shall be decided by examining the totality of the facts bearing upon the relationship between the lessor and the shipper. Although the Commission has enumerated various criteria which establish a presump- tion of private carriage, this presumption remains re buttable. In particular the Commission has stated that it will scrutinize the actual operation of apparently con- forming leases to determine whether the terms have been followed. The use of such presumptions generally serves to direct the analysis but not necessarily the answer. Therefore, the use of presumptions does not reasonably transform a statement of policy into a binding norm. See Regular Common Carrier Conference of the Ameri- can Trucking Associations, Inc. v. United States, 628 F.2d at 251 (use of rebuttable presumptions preserves discretion to determine each case on its own factual cir- cumstances). In our view this case is quite similar to Guardian Federal Savings and Loan Association v. Fed- eral Savings & Loan Insurance Corp., supra.** We con- 2 In Guardian Federal Savings and Loan, the agency promul- gated criteria by which to measure the adequacy of audits required of certain lending institutions. The court held that although the criteria were quite specific, nonetheless they were not determinative of the adequacy of an audit, and the agency remained free to accept nonconforming audits. See 589 F.2d at 666-68. Likewise, although a lease between a shipper and lessor may comply with the terms recommended by the Commission’s policy statement, if the facts indicate that the actual operation of the arrangement constitutes the provision of transportation services, or if factors above and beyond the provisions contained in the lease indicate same, then the Commission remains free to deny private carrier status. l6a clude that, to the extent the Commission abides by its dis- claimer of having established a binding norm, its char- acterization of this action as a general statement of policy was correct. As a general statement of policy, the Commission’s action is reviewed by this court only to determine whether it is arbitrary, capricious, an abuse of discretion, or otherwise contrary to law or in excess of the Commis- sion’s statutory authority. 5 U.S.C.A. § 706(2) (A)-(D) (West 1977) ; see Mercury Motor Express, Inc. v. United States, 648 F.2d at 319; Assure Competitive Transporta- tion, Inc. v. United States, 635 F.2d 1301, 1307 (7th Cir. 1980). Under this standard our task is limited to deter- mining “whether the decision was based on a considera- tion of the relevant factors and whether there has been a clear error of judgment.” Bowman Transportation, Inc. v. Arkansas-Best Freight System, 419 U.S. 281, 285, 95 S.Ct. 488, 441, 42 L.Ed.2d 447 (1974) ; see American Trucking Association, Inc. v. United States, 642 F.2d 916, 920 (5th Cir. April 17, 1981) (court inquires only to see that statement rationally supported, that agency jconsidered relevant factors and avoided clear errors, and “that agency articulated rational connection between facts found and conclusions premised on those facts) ; National Tour Brokers Association v. ICC, 671 F.2d 528, 532 (D.C. Cir. 1982) (review under arbitrary and capricious standard confined to whether rational basis may be found in facts of the record) ; Consolidated Rail Corp. v. United States, 619 F.2d 988, 993 (3d Cir. 1980) (same). Thus, as long as the “agency policy is within the agency’s dele- gated power and meets the test of reasonableness, a court may not upset it without usurping the agency’s power.” 2 K. Davis, Administrative Law Treatise § 7.5, at 25 (2d ed. 1979). See also Baltimore Gas and Electric Co. v. National Resources Defense Council, Inc., — U.S. —, —, 103 S.Ct. 2246, 2257, 76 L.Ed.2d 437, 452 (1983). We proceed to a determination of whether the policy statement satisfies these limited requirements. 17a IV. The Commission’s Statutory Authority to Define Private Carriage. Petitioners’ primary contention is that the Commis- sion’s attempt to reformulate the test for defining pri- vate carriage was beyond its statutory authority. Peti- tioners advance the following three arguments in sup- port of this contention: (1) the Motor Carrier Act re- quires adherence to the definition and presumptions announced in Church and in Drum; (2) adherence to the definition and the presumption formerly relied upon are mandated by the Supreme Court’s opinion in Drum; and (3) adherence to the definition and its presumptions is required by implicit Congressional approval of the Drum case. In our view these contentions must ultimately fail. First, the parties have brought to our attention no congressional comment on either the definition of private carriage as formulated in Drum or the presumptions regarding single-source leasing adopted by the Commis- sion in the Church and Oklahoma Furniture decisions. The only attempt by Congress to legislate with regard to the substantive definition of private carriage occurred in the 1958 amendments to the Motor Carrier Act. In those amendments, Congress ratified the Commission’s decision to adopt the “primary business test” when determining whether a shipper’s carriage of goods in addition to its own private carriage rendered that shipper or the carrier leased by that shipper a common or contract carrier sub- ject to ICC permit and licensing regulations. See Nuclear Diagnostic Laboratories, Inc., Contract Carrier Applica- tion, 1381 M.C.C. 578, 581-84 (1979). Although congres- sional explanation of the amendment centered on the continued concern for diversion of traffic from regulated carriers to illegitimate private carriers, see S.Rep. No. 1647, supra, at 23, neither the House nor the Senate at- tempted to formulate a comprehensive distinction between private and for-hire carriage. Rather, the amendment was aimed at a specific type of arrangement commonly | 18a used to avoid the label of for-hire carriage. See supra note 3.'* Likewise, although the Motor Carrier Act of 1980 addressed certain limited aspects of the unregulated carriage industry, there is no discussion in either the House or the Senate Report regarding the appropriate distinction between private and for-hire carriage. Thus, there is no merit to the contention that adherence to the Drum analysis with its concomitant presumption is man- dated by congressional statements in the Motor Carrier Act and its amendments. Similarly, we are convinced that the Drum case itself does not require continued use of the presumptions re- jected by the ICC in this proceeding. Rather, throughout its opinion in Drum the Supreme Court reiterated the need to accord the Commission some discretion in deter- mining the appropriate scope of for-hire carriage. For example, the Court commented on the evolving “tech- nique” of analysis used by the Commission. In upholding the Commission’s formulation of an appropriate definition of private carriage, the Court explicitly stated that the Commission’s conclusions “were well within the range of responsibility Congress assigned to the Commission.” 368 U.S. at 385, 82 S.Ct. at 415. It is true that the Court imposed certain constraints upon the Commission’s discretion. For example, the 18 The following excerpt from House Report 1922 is indicative of the sentiments expressed in support of the amendment: This amendment provides that no person shall, in connection with any other business enterprise, transport property by motor vehicle in interstate or foreign commerce unless such transportation is incidental to, and in furtherance of, the primary business enterprise (other than transportation) of such person. There is no intention on the part of this com- mittee in any way to jeopardize or interfere with bona fide private carriage, as recognized in [Brooks Transp. Co. v. United States, 340 U.S. 925, 71 S.Ct. 501, 95 L.Ed. 668 (1951), aff’g 93 F.Supp. 517 (E.D. Va. 1950) }. H.R.Rep. No. 1922, supra, at 18. 19a Court stated that because the statutory definitions of private and for-hire carriage “must, if they are to serve their purpose, impose practical limitations upon unregu- lated competition in a regulated industry, they are to be interpreted in a manner which transcends the merely formal.” Jd. at 375, 82 S.Ct. at 410. Moreover, the Court suggested that the Commission’s occasional reformula- tions of the distinction between private and for-hire car- riage were permissible largely bec: use each formulation revolved around a central and implicit theme: “a pur- ported private carrier who hires the instrumentalities of transportation from another must—if he is not to utilize a licensed carrier—assume in significant measure the characteristic burdens of the transportation business.” Id. at 375, 82 S.Ct. at 410. Indeed, since Drum the Commission has frequently re stated its test of substance in terms of the “characteristic burdens of transportation.” See Personnel Service, Inc.— Investigation of Operations and Practices, 110 M.C.C. 695, 704-06 (1969); Heavy Equipment Rental Co., In- vestigation, 98 M.C.C. 365, 394 (1964). Overall, how- ever, the Court’s opinion reflects a deference to the Com- mission’s informed judgment as to what types of burdens are characteristic of the provision of for-hire transporta- tion. See 368 U.S. at 385, 82 S.Ct. at 415 (Commission’s belief that financial risks are a significant burden of transportation is well within range of responsibility as- signed to Commission) ; id. at 374, 82 S.Ct. at 410 (for- mulation of private carriage in Drum is recent instance of Commission’s developing technique of decision) ; id. at 376, 82 S.Ct. at 411 (Commission’s current resolution of problem does not violate coherence of body of administra- tive and judicial precedents so far developed in this area). Finally, the Court expressly sanctioned an anal- ysis which focuses on the totality of circumstances rather than the dispositive significance of any one factor. See id. at 384, 82 S.Ct. at 415 (emphasizing use of totalities 20a and noting that indicia are “instruments of decision, not touchstones”; “Commission allowably dealt with this novel situation as an integral and unique problem in judgment, rather than simply as an exercise in counting common- places’). Although the Commission’s new statement of policy abandons the presumptions regarding single-source leas- ing announced in Church and Oklahoma Furniture, and affirmed in Drum, the Commission has continued to ad- here to an approach that requires examination of all cir- cumstances regarding the relationship between the lessor and the shipper. Moreover, this adherence to an intensely factual determination informed by relevant criteria at least facially ensures the interpretation of private car- riage “in a manner which transcends the merely formal.” Id. at 375, 82 S.Ct. at 410. At most the Commission’s new policy articulates new criteria for determining when the control of the transportation by the shipper indicates that the shipper has shouldered the burdens of trans- portation necessary to have assumed control over the lessor. Thus, rejecting the presumption of for-hire car- riage arising from single source leasing, and the pre sumption that the owner/operator possesses the inherent power to defeat the contro] of the transportation by the shipper, is indicative only of the Commission’s new views as to which burdens constitute significant indicia of pri- vate transportation. Compare Personnel Service, Inc.— Investigation of Operations and Practices, 110 M.C.C. at 709-10. See also supra note 8. We therefore conclude that the Supreme Court’s opinion in Drum does not preclude the Commission’s reconsideration of the pre- sumptions announced in Church and Oklahoma Furniture. Finally, petitioners assert that the Commission’s long- standing interpretation of private carriage, combined with Congress’ failure to articulate a differing inter- pretation, precludes the Commission from formulating a different test at this late date. Thus, petitioners argue 2la that Congress has implicitly approved the standards de- scribed in Drum. Generally, courts place great weight upon long-stand- ing interpretations and policies announced by an agency, and closely scrutinize departure from agency precedent. See, e.g., NLRB v. Bell Aerospace Co., 416 U.S. 267, 94 S.Ct. 1757, 40 L.Ed.2d 184 (1974); Atchison, Topeka & Santa Fe Railway Co. v. Wichita Board of Trade, 412 U.S. 800, 93 S.Ct. 2367, 37 L.Ed.2d 350 (1973); Ameri- can Trucking Associations v. Atchison, Topeka and Santa 14 Although NLRB v. Bell Aerospace Co. involved an agency in- terpretation of its statute rather than a policy statement, the anal- ysis used by the Supreme Court is instructive. In Bell, the NLRB had certified a union as the bargaining representative of a group of “managerial employees.” In so doing, the NLRB rejected its long-standing interpretation that managerial employees are not pro- tected by the labor laws; instead, the NLRB held that only man- agerial employees responsible for “the formulation and implemen- tation of labor relations policies” are excluded by the National Labor Relations Act. 416 U.S. at 269-72, 94 S.Ct. at 1759-61. The Supreme Court reversed the NLRB, holding that the Board was bound by its earlier, long-standing interpretation. In support of its holding, the Court relied primarily on Congress’ legislative reac- tion to the NLRB’s interpretation at the time of the Taft-Hartley Act. When drafting the Act, Congress inserted specific provisions to make clear that certain types of employees were excluded by the Act. In other instances, however, Congress explicitly found it un- necessary to legislate with regard to certain employees, including managerial employees, because such employees already were ez- cluded under the Board’s interpretation of the NLRA. See id. at 277-84, 94 S.Ct. at 1763-67. Subsequent to passage of the Taft- Hartley Act, the Board continued to adhere to this interpretation for over two decades. Thus, the Court concluded that Congress’ express reliance on the Board’s interpretation, combined with the Board’s long-standing adherence, made that interpretation binding on the Board. See id. at 285-89, 94 S.Ct. at 1767-69. See also Asso- ciation of American Railroads v. ICC, 564 F.2d 486, 493 (D.C. Cir. 1977) (“doctrine of reenactment” applies only if Congress was aware of agency interpretation and affirmatively indicated intent not to change interpretation). As indicated earlier, there is no evi- dence that Congress has made any relevant statements regarding Drum sufficient to call into play the doctrine of reenactment. 22a Fe Railway, 387 U.S. 397, 87 S.Ct. 1608, 18 L.Ed.2d 847 (1967); Mercury Motor Express, Inc. v. United States, 648 F.2d 315 (5th Cir. 1981); Missouri-Kansas-Texas Railroad Co. v. United States, 632 F.2d 392 (5th Cir. 1980), cert. denied, 451 U.S. 1017, 101 S.Ct. 3004, 69 L.Ed.2d 388 (1981). On the other hand, the Supreme Court has stated: [T]he Commission, faced with new developments or in light of reconsideration of the relevant facts and its mandate, may alter its past interpretation and overturn past administrative rulings and prac- tice... . [T]his kind of flexibility and adaptability to changing needs and patterns of transportation is an essential part of the office of a regulatory agency. American Trucking Associations v. Atchison, Topeka and Santa Fe Railway Co., 387 U.S. at 416, 87 S.Ct. at 1618 (national transportation policy may authorize Commis- sion departure from precedent even when Congress has considered specific proposals to legislate particular change promulgated by Commission immediately prior to Com- mission’s action) ; see Atchison, Topeka & Santa Fe Rail- way Co. v. Wichita Board of Trade, 412 U.S. at 808, 93 S.Ct. at 2375 (agency may flatly repudiate past norms, deciding that changed circumstances no longer require those norms in order to effectuate congressional policy, so long as agency clearly sets forth grounds for such de- parture) ; Missouri-Kansas-Texas Railroad Co. v. United States, 632 F.2d at 402-03 (Commission changes in guide- lines valid when the result of process of weighing the public interest which is entrusted to Commission). The Commission has seized upon its responsibility to monitor the effect of its policies on the industry, and has argued throughout this proceeding that its policy change is supported by changed circumstances. According to the Commission, these circumstances include passage of the 1980 amendments to the Motor Carrier Act and overall 23a changes in the transportation industry. The test gen- erally used for determining the validity of agency changes in policy is essentially the same as the test for determining whether agency action is arbitrary, capri- cious, or an abuse of discretion. Because both determina- tions depend upon the existence of a rational basis for the agency action, see Mercury Motor Express, Inc. v. United States, 648 F.2d at 319; Assure Competitive Transportation, Inc. v. United States, 635 F.2d at 1307; Association of American Railroads v. ICC, 564 F.2d at 495, we will treat these two determinations as one. V. Basis for the Policy Change. The Commission argues that changes in the nature of the trucking industry occurring since passage of the 1935 Act provide adequate support for its change in policy. Specifically, the Commission contends that neither the regulated sector nor the private carriage sector occupies the tenuous position it occupied in 1935." The Commission apparently infers from the increased stability of both the regulated and unregulated sectors that there is a reduced need for protection of regulated carriers from encroachment by private carriers. The Commission further reasons that reduced barriers to en- try into the regulated sector decrease the likelihood of subterfuge which motivated the Commission to adopt at an early date a stringent test for defining private car- riage. See All Points, Inc.—Investigation of Operations, 123 M.C.C. 242, 250-52 (1975). The Commission con- cludes that its new policy statement, retaining as it does the basic test of control announced 40 years ago, will 15 See 182 M.C.C. at 768 (motor carrier industry bears little resemblance to precarious, fragmented, and unstable industry of the mid-30’s). According to the Commission, approximately 40% of truck carriage in this country is transported by private carriers, and private carriers outnumber regulated carriers 9 to 1. Jd. at 769. 24a have no “major effect on the overall balance between the regulated and private sectors of the industry.” 132 M.C.C. at 769. The Commission further argues that adopting the more lenient approach toward single-source leasing by private shippers will increase both competition and efficiency in the private sector by opening up an additional source “of fleet augmentation.” Additionally, the new policy will provide added opportunities to owner/operators at a time in which they are in dire economic straits. The Commis- sion therefore concludes that all of these factors together indicate that circumstances have changed sufficiently in 40 years to allow a corresponding change in the Com- mission’s treatment of single-source leasing by private shippers. As additional support for its policy change, the Com- mission relies upon “changes in Statutory direction,” 132 M.C.C. at 757, resulting from the 1980 amendments to the Motor Carrier Act. See Pub.L. 96-296, 94 Stat. 1898 (1980), codified at 49 U.S.C.A. § 10101, et seq. (West 1982 Pamphlet). In particular, the Commission points to the amendments in the National Transportation Policy, which stress the promotion of “competitive and efficient transportation services,” and contends that these amend- ments demonstrate congressional awareness of basic changes in the motor carrier industry. 49 U.S.C.A. § 10101.*° The Commission believes ‘that a more lenient 16 The 1980 amendments added the following language to the Na- tional Transportation Policy: [I]t 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—]... . (7) with respect to transportation of property by motor carrier, to promote competitive and efficient transportation services in order to (A) meet the needs of shippers, re- ceivers, and consumers; (B) allow a variety of quality and price options to meet changing market demands and the 25a approach to single-source leasing by private carriers will provide both private carriers and owner/operators with more options when structuring their respective trans- portation arrangements. The Commission concludes that its reformulation of the test for private carriage will result in greater utilization of equipment and necessary support for the private carrier industry, thereby foster- ing the competition desired by Congress. The Commission also points to various amendments either specifically addressed to exempt carriage or which reasonably suggest a different regulatory treatment of such carriage. For example, prior to the 1980 amend- ments Commission rules prohibited the hauling of the shipper’s goods by a member of the shipper’s corporate family, such as a wholly-owned subsidiary, without a certificate: In the Commission’s view this did not con- stitute private carriage. Section 9 of the 1980 Act, how- ever, removed this restriction and permitted such inter- corporate hauling, provided the parent corporation owned a 100% interest in the transporting subsidiary. See 49 U.S.C.A. $ 10524(b). The 1980 Act also expanded vari- ous existing exemptions in order to permit more efficient use of unregulated carriage. Thus, $7 of the Act in- creased the number and type of exempt commodities in order to decrease the incidence of empty backhauls, and increased the exemption for motor carrier transportation diverse requirements of the shipping public; (C) allow the most productive use of equipment and energy re- sources; (D) enable efficient and well-managed carriers to earn adequate profits, attract capital, and maintain fair wages and working conditions; (E) provide ad maintain service to small communities and small shippers; (F) im- prove and maintain a sound, safe, and competitive pri- vately-owned motor carrier system; (G) promote greater participation by minorities in the motor carrier system; and (H) promote intermodal transportation. Pub.L. 96-296, 94 Stat. 793 (1980), codified at, 49 U.S.C.A. § 10101(a) (7) (West 1982 Pamphlet). 26a incidental to air transportation.’ The Commission con- tends that these specific provisions all support a more lenient approach to defining private carriage in order to eliminate inefficiency and foster competition in the over- all transportation industry. In the Commission’s view, however, the most sig- nificant support for its change in policy stems from the reduction in barriers to entry resulting from the amend- ments. For example, §5 of the 1980 Act substantially reduces the burden of proof on persons applying for com- mon carrier certification and contract carrier licensing. See 49 U.S.C.A. §§ 10922, 10923 (West 1982 Pam- phlet}.'* The Commission emphasizes that Congress has turned away from the protectionist attitude embodied in the 1935 Act, which required strict maintenance of the line between private and common carriage in order to prevent diversions of traffic detrimental to both the ship- pers and the transportation industry. Rather, in an- nouncing a transportation policy which focuses on ease 1? See 49 U.S.C.A. § 10526 (West 1982 Pamphlet) ; H.R.Rep. No. 1069, supra, at 18, reprinted in 1980 U.S. Code Cong. & Ad. News 2283, 2300 (to alleviate backhaul problem unregulated motor car- rier should be allowed to transport certain farm supply items back to areas of agricultural production); id. at 19, reprinted in 1980 U.S. Code Cong. & Ad. News 2301 (discussing purpose of expand- ing “incidental-to-air” exception). 18 The House Report states: Section 5 reflects the Committee’s strong belief that increased competition and potential competition will bring about the most efficient and economical delivery of transportation service to the public. The new entry section provides for a balanced approach to entry, which, by lessening the burden of proof on applicants and correspondingly increasing the burden on persons opposing the application, will encourage new applicants to file for au- thority to provide needed service. H.R.Rep. No. 1069, supra, reprinted in 1980 U.S. Code Cong. & Ad. News 2283, 2296. 27a of entry and competition, Congress has implicitly sanc- tioned more lenient treatment of nominally private car- riage. Presumably these reduced standards will permit many more businesses to enter the regulated transporta- tion industry, with the result that existing carriers will be less protected from natural competitive forces and more subject to diversions of traffic. Thus, the Commis- sion concludes: [T]he 1980 Act gives evidence that Congress is much less concerned than it formerly was over the pos- sibility of diversion of traffic from existing regulated carriers. New section 10922(b) (2) (B) provides that the Commission shall not find diversion of revenue or traffic from an existing carrier to be in and of itself inconsistent with the public convenience and necessity. It is true, as several commentators point out, that this provision is in the context of admission of new carriers into the regulated industry. It has no direct application to determining the boundary line between private and for-hire carriage. But the avoidance of diversion was never an end of itself. Rather, it was a policy adopted in order to achieve an earlier regulatory objective of maintaining a stable traffic base for a relatively limited number of regulated carriers—an objective which has now been subordinated by Congress in the act in favor of heightened competition. Since fear of diversion of traffic from regulated to private carriers provided much of the motivation for the Commission’s former policy, we think that Congress’ lessened concern over traffic diversion can and should legitimately be con- sidered in reappraising that policy. We also think that the 1980 Act, by reducing the barriers to the entry of new carriers into the regu- lated industry, has also reduced any incentive such carriers might have to devise subterfuges to remain outside the reach of regulation. See Pacific Diesel, 28a supra. Since the fear of subterfuges and evasion was a major part of the Commission’s motivation in adopting its presumption of for-hire carriage in Church, supra, of control defeasance by owner- operators in Oklahoma, supra, and in scrutinizing owner-operator leases to shippers in subsequent cases, the greatly decreased incentives to evade regu- lation under the 1980 Act strongly suggest a reap- praisal of both presumptions. 132 M.C.C. at 771. Admittedly, the evidence adduced by the Commission in support of a change in circumstances is not over- whelming. A reading of the statutory language as well as the relevant House and Senate report suggests that when Congress was speaking of greater competition in the transportation industry, it was concerned primarily with competition within the requlated transportation industry. See S.Rep. No. 641, 96th Cong., 2d Sess. 2-6 (1980) .'* Moreover, Congress’ relaxed concerns for diversions of traffic from existing carriers might be read as limited to the context of determining whether to grant certificates *® According to the Senate Committee, the central feature of the 1980 Act was the reduction of entry barriers into the regulated sector. This goal would be achieved primarily by lessening the “public necessity and convenience” requirement necessary to secure certification, and by creating a presumption that applicants would operate in the public necessity and convenience. Further, the amendment reduced the ICC’s power to regulate motor carrier rates. However, the Committee stressed the need for “entry free- dom” in order to “produce a competitive environment in which rates will not be excessively high.” S.Rep. No. 641, supra, at 6. This reference to competitive environment apparently is addressed primarily to the regulated sector. The competitive environment would be achieved by balancing ease of entry with rate flexibility. Id. at 11. The House Report mirrors the Senate’s concerns and goals. See H.R.Rep. No. 1069, supra, at 8-17, reprinted in 1980 U.S. Code Cong. & Ad. News 2290-99. ; 29a of public convenience and necessity. Thus, Congress’ di- rective that the agency no longer consider diversion of traffic as itself inconsistent with public convenience and necessity may simply have been another mechanism for reducing barriers to entry into the regulated sector. See S.Rep. No. 641, supra, at 24. See generally 49 U.S.C.A. $ 10922 (procedure and criteria to be used in issuing cer- tificates to common carriers). In fact, greater leniency in determining whether a particular arrangement con- stitutes private carriage might be viewed as inconsistent with a congressional policy of encouraging entry into the regulated sector. Cf. S.Rep. No. 641, supra, at 116 (100% ownership requirement for intercorporate hauling “pre- serves the essential role of private carriage, but does so with a minimum of conflict with the common carrier con- cept’’). Finally, it is not clear what inferences may be drawn from Congress’ extension of certain specific exemptions in the 1980 Act. For example, although the amendments do allow intercorporate hauling by a wholly-owned sub- sidiary, Congress rejected proposals that would have al- lowed such hauling by less than wholly-owned subsidi- aries. See Economic Regulation of the Trucking Indus- try: Hearings Before the Committee of Commerce, Sci- ence, and Transportation on S. 2245, 96th Cong., 2d Sess. 1463-64 (1980) (§8 of the Senate bill would have ex- empted intercorporate hauling from regulation when the parent corporation owned 51% of transporting subsidi- ary). Similarly, Congress rejected a proposal aimed spe- cifically at allowing private carriers which transport ex- empt commodities on a “front haul” to carry nonexempt commodities on the back haul, thereby increasing carry- ing capacity and eliminating inefficiencies in the private carrier sector. See id. at 1461-63. See also Economic Regulation of the Trucking Industry: Hearings before the Committee on Commerce, Science, and Transportation on S. 2245, 96th Cong., 2d Sess. 1765-1810 (1980) (testi- 30a mony regarding back haul exemptions for “true owner/ operators”). Further, in suprort of a provision in the 1980 Act exempting the transportation of processed food, the Senate specifically commented upon the extent to which private carriage had taken much of the business away from the regulated carriers: With respect to the motor carrier transportation of [processed, nonexempt food], almost 70 percent is transported today by private carriage. In other words, by their actions shippers in this country have indicated that the regulated motor carrier system is not meeting their needs to a substantial extent. S.Rep. No. 641, supra, at 8. The foregoing language im- plies a continued concern for the diversion of traffic by private carriers from the regulated carrier industry.” 2° Various petitioners have asserted that in fact Congress con- sidered and rejected proposals to accomplish what the Commission has here sought to do. Our review of the legislative materials, however, has not disclosed any specific proposals debated and re- jected. Moreover, even if Congress had been confronted with such legislative proposals, we would not necessarily conclude that the Commission was precluded from acting on its own. In its report, the Senate stated: In addition to the specific provisions of this bill, there are other areas where the Committee did not act, either because it ap- proved current Commission policy or felt that the Commission was the proper forum for the interested parties to address the issues. S.Rep. No. 641, supra, at 4. This statement by Congress substan- tially weakens any argument that through its inaction Congress has prohibited the changes sought by the Commission in its policy statement. Petitioners argue further, however, that in effect this policy statement is an attempt to institute “master licensing” based on general findings and conclusions rather than individual adjudi- cations. Congress specifically prohibited such an approach with re- gard to certification. See 49 U.S.C.A. § 10922(b). In our view, how- ever, petitioners’ contention is without merit. See American Truck- ing Ass'n, Inc. v. United States, 642 F.2d at 920-22. 3la In the end, however, we are mindful of the Commis- sion’s responsibility for reexamining its rules and policies in light of changed circumstances. See American Truck- ing Associations v. Atchison, Topeka and Santa Fe Rail- way Co., 387 U.S. at 415-16, 87 S.Ct. at 1618 (Commis- sion’s flexibility and adaptability to changing needs and patterns of transportation are essential part of the office of regulatory agency; national transportation policy is yardstick by which correctness of Commission’s actions will be measured). Thus, the Commission may reject long-standing policies, interpretations, and guidelines so long as its action is rationally based and consistent with the Commission’s statute. See, e.g., Atchison, Topeka & Santa Fe Railway Co. v. Wichita Board of Trade, 412 U.S. at 808, 93 S.Ct. at 2375; Mercury Motor Express, Inc. v. United States, 648 F.2d at 319; National Tour Brokers Association v. ICC, 671 F.2d at 531-33. More- over, in finding that changed circumstances reasonably permit a change in policy an agency is entitled to rely to some extent on the experience and expertise it has ac- quired during the course of its existence, see Mercury Motor Express, Inc. v. United States, 648 F.2d at 319; National Tour Brokers Association v. ICC, 671 F.2d 532- 33, as long as this reliance on agency experience is docu- mented and made a part of the record so that the courts can determine whether the agency’s action is facially ra- tional. See Mercury Motor Express, Inc. v. United States, 648 F.2d at 319; National Tour Brokers Association v. ICC, 671 F.2d at 533. As discussed above, the proposed policy change is not inconsistent with the provisions of the Motor Carrier Act. Further, we find no clear error of judgment in the Com- mission’s assertion that competition will be enhanced by the proposed relaxation of standards with respect to sin- gle-source leasing by shippers. Even if the amendments to the National Transportation Policy were concerned only with the regulated sector, it would be rational to assume that providing owner/operators alternatives to 32a employment solely with common and contract carriers would lead to greater competition for their services with- in that sector. Such competition would in turn foster a healthier transportation industry in both the regulated and unregulated sectors. See National Tour Brokers As- sociation v. ICC, 671 F.2d at 533 (Commission may rely on experience as long as it fully explains perceptions supporting action, and makes its experience part of rec- ord) .7? Recently, in Mercury Motor Express, Inc. v. United States, supra, a panel of the former Fifth Circuit con- sidered a similar policy change. In Mercury Motor the Commission had announced that in light of changes in the industry it was abandoning its forty-year-old policy of denying incidental contract authority to private ship- pers. 648 F.2d at 317." According to the Commission, the “dynamic expansion” of the motor carrier industry no longer supported the protectionist attitude behind the rule, while such factors as the need for energy efficiency clearly required reconsideration. The court thus held that the changed policy was consistent with the Motor Carrier Act and “rational on its face.” Jd. at 320. Here, too, we conclude that the Commission’s assertion of changes in the industry, as supported by the National Transporta- tion Policy, provides a rational basis for reconsidering and rejecting the presumptions announced in Church and Oklahoma Furniture. 21 It is important to reflect on the fundamental change rendered by the 1980 amendments to the Motor Carrier Act. From 1935 until the present, Congress has steadfastly adhered to the goal of a stable and efficient transportation system. From 1935 until 1980, the primary means for securing such a system was by protecting a relatively small pool of common and contract carriers. In 1980, however, Congress apparently decided that the goal of a stable and efficient system now could be attained by substantially greater com- petition. 22 Under the rule of Geraci Contract Carrier Application, 7 M.C.C. 369 (1938), the Commission would generally deny common or con- 33a Petitioners contend that MC-122 will result in an in- crease in subterfuge to avoid regulation, and that the new criteria effectively destroy the distinctions between private and for-hire carriage. In our view, however, it is well within the Commission’s area of expertise to postu- late a decreased danger of subterfuge.** Further, the Commission has expressly declared that it intends to main- tain the distinction between private and for-hire car- riage, see 132 M.C.C. at 770, and that it will continue to ferret out for-hire schemes which purport to be private shipping. Jd. at 772. In our view the better arena for holding the Commission to these promises and ensuring that its determinations are made in “a manner which transcends the merely formal,” United States v. Drum, 368 U.S. at 375, 82 S.Ct. at 410, will be in the context of individual enforcement proceedings. We conclude that the new policy is a rational response to the Commission’s findings of changed circumstances. See Regular Common Carrier Conference of the American Trucking Associa- tions, Inc. v. United States, 628 F.2d at 252.4 tract authority to a private s»ipper unless it could be shown that the incidental authority woule 4“ no way impinge upon the interests of existing regulated carriers. This rule was deemed necessary to protect a weak industry. 23 It should be recalled that the danger of subterfuge was largely the cause for the Commission’s heretofore strict reading of private carriage. Of course, should subterfuge continue as a threat to a stable and efficient regulated industry, we expect the Commission to respond accordingly. 24In Regular Common Carrier Conference, supra, a panel of the United States Court of Appeals for the District of Columbia Circuit approved a similar ICC policy change. The court added a caveat, however, which we deem particularly appropriate, and therefore adopt: We emphasize that, although we do not set aside the Com- mission’s pronouncement, neither do we place an imprimatur on certain ambiguous—and perhaps legally unsound—comments in it.... [O]nly subsequent adjudications will reveal whether, as petitioners fear, the Commission is attempting to evade [a] 34a VI. Compliance With NEPA and EPCA. Under the NEPA, agencies are required to consider possible environmental effects of proposed federal actions. Generally, this consideration takes the form of any Envi- ronmental Impact Statement (EIS). See 42 U.S.C.A. § 4332 (West 1977). Additionally, the EPCA requires statutory requirement .... If such an attempt is revealed, it will then be proper for a court to act. 628 F.2d at 252. In particular, we have some concern with some of the Commission’s language which might be interpreted to place overwhelming significance upon the rather vague concept of “a complete transportation service,” 132 M.C.C. at 773, as a prereq- uisite for finding for-hire carriage. The Commission describes this concept only as involving “key management and organizational functions that characterize a transportation company,” including “dispatch, scheduling movements, and genera) coordination.” Id. An overemphasis on this concept, and a pro-private carriage bias in the application thereof, could result in a complete blurring of the line between private and for-hire carriage. For example, there would be serious question about a finding of private carriage in the case of a single owner/operator who controlled all of his own activities subject only to a shipper’s designation of a pick up time and place and a time and place of destination. Such an owner/ operator would seem clearly, under any reasonable standard, to be hauling the goods of another; or conversely, the arrangement would seem clearly not to reflect a “shipper or manufacturer whici. trans- ports its own goods.” Jd. at 787. And yet, we cannot be sure such an owner/operator, who in effect manages and schedules only his own activities, would fall clearly within the “complete transporta- tion service” concept. Our concern is alleviated to a great extent by the fact that the Commission’s decision also places significant re- liance on whether or not the shipper exercises control and responsi- bility, and on the Commission’s assurances that the determination will be based upon the totality of the circumstances, that the prac- tical distinction between private and for-hire carriage will be main- tained, and that subterfuges will not be tolerated. Moreover, liti- gants will be free to challenge the Commission’s application of the instant policy in individual enforcement proceedings. We are satisfied that the Commission's policy, if applied in a rea- sonable manner, is a rational response to changed circumstances, and is within the range of responsibility assigned the Commission by Congress. 35a the ICC to consider the possible effect of its actions on reducing energy consumption. When necessary, this re- quirement includes preparing a Statement of Energy Im- pact (SEI). See 42 U.S.C.A. § 6362(b) (West 1977). The obligations to prepare an EIS and an SEI, however, are not mandatory. Rather, the requirements of the NEPA are triggered only for “major federal actions sig- nificantly affecting the quality of the human environ- ment,” 42 U.S.C.A. § 4332(2)(C), and the EPCA re quires an energy statement only where practicable. 42 U.S.C.A. § 6362(b). Thus, with regard to both State- ments, the Commission is accorded a large amount of discretion in determining either the necessity for prepar- ing the Statement or the scope of the inquiry it will per- form. See Mercury Motor Express, Inc. v. United States, 648 F.2d at 319-20 (decision by Commission that action is neither major federal action significantly effecting human environment nor major regulatory action under the EPCA is reversible only if arbitrary, capriciousyer abuse of discretion); American Trucking Association, Inc. v. United States, 642 F.2d at 923 (5th Cir. 1981) (agency may reasonably conclude that impact statement not necessary); Sierra Club v. Hassell, 636 F.2d 1095, 1098 (5th Cir. 1981) (Unit B). We conclude that the agency’s determination that the proposed action is ex- pected to reduce fuel consumption in the industry was sufficient under the EPCA. Further, the Commission’s conclusion that no environmental impacts are expected comports with the Commission’s own regulations and general practice. See 49 C.F.R. §§ 1105.6, 1106.5. CONCLUSION On the basis of the foregoing, the petitions for review of MC-122 are DENIED. EC lb APPENDIX B INTERSTATE COMMERCE COMMISSION EX PARTE No. MC-122 (Sub-No. 2) LEASE OF EQUIPMENT AND DRIVERS TO PRIVATE CARRIERS AGENCY: ACTION: SUMMARY: Interstate Commerce Commission Policy Statement By this notice, the Commission modifies and makes fina] its proposed policy statement in Lease of Equipment and Drivers to Private Carriers, 132 M.C.C. 351 (1980), 45 Fed. Reg. 86766 (December 31, 1980), concerning the distinction between private and for-hire car- riage where a private carrier conducts its op- erations with equipment and drivers leased from unregulated lessors, including owner- operators. Discussed is the practical and legal distinction, and the factors that the Commis- sion will now consider in determining whether such operations by private carriers fall outside the scope of the Commission’s jurisdiction, 49 U.S.C. § 10524(a), or instead constitute for- hire transportation by the lessor of the equip- ment with drivers, for which a certificate or permit is required. EFFECTIVE DATE: This policy is effective 30 days from the date of pub- lication of this notice in the Federal Register. 2b For FURTHER INFORMATION CONTACT: Robert G. Rothstein (202) 275-7912 or Edward E. Guthrie (202) 275-7691 SUPPLEMENTARY INFORMATION: This proceeding was instituted on December 31, 1980, by the publication of a notice in the Federal Register’ stating our intention to reexamine the Commission’s tests used to distinguish private from for-hire carriage. The tests operate generally to preclude owner-operators and others not holding authority from the Commission from leasing their equipment with drivers directly to private carriers. We recognize the continued need to maintain a workable distinction between for-hire and private car- riage. We propose (a) to focus primarily on the control exercised over a lessor, and (b) to repudiate the presump- tion that construed lessors to be carriers for hire where their lessees are private carriers. Comments—Generally The Commission received approximately 155 comments, representing over 200 persons.2 Commentors may be placed in four general groups. There were approximately 40 comments from individuals, the vast majority of whom identified themselves as owner-operators. With four ex- ceptions, all owner-operators endorsed our proposal. Com- ments were received from 30 manufacturers and shippers, many of which operate private fleets. All shippers and manufacturers agreed with the basic principle of allowing 145 Fed. Reg. 86766 (December 31, 1980), Lease of Equipment and Drivers to Private Carriers, 182 M.C.C. 351 (1980). 2 See Appendix A. 3b owner-operators to lease directly to shippers/private car- riers, although many commentors in this group proposed modifications. Over 30 associations and trade groups re- sponded. Generally, associations representing owner-op- erator and shipper interests were in favor of the proposal, while associations and trade groups representing the regulated motor carrier industry opposed it. Lastly, over 120 regulated motor carriers voiced their opposition to the proposal. In addition to written comments, the Commission on October 14, 1981, conducted an oral hearing in Washing- ton for the purpose of eliciting additional views and sup- plementing the record.* Twenty-seven parties, represent- ing over 45 interests, appeared and presented evidence which substantially echoed their respective or representa- tive comments filed earlier. Conclusions In light of recent changes in statutory direction, and the Commission’s changes in regulatory policy over the past few years, we believe it is reasonable to reassess the Commission’s approach to defining the line between pri- vate and for-hire carriage. We think we can prospectively draw the line somewhat differently than we have in the past when considering whether a particular lease ar- rangement constitutes private vis-a-vis for-hire carriage, based on the consideration of factors not previously iden- tified in Commission decisions. We shall continue to look at all the circumstances sur- rounding a lease arrangement to determine whether the lessor holds out only the use of the instrumentalities of transportation, i.e., truck and driver, or whether it in- stead holds out what is in substance a complete trans- portation service for compensation. The former would be % See Notice Of Oral Argument On Proposed Policy Statement, served September 29, 1981, 46 Fed. Reg. 48344. 4b exempt, while the latter would be subject to regulation. In making individual determinations, we will focus on the elements of control, responsibility, and performance of the key organizing and management functions of a trans- portation company as the critical elements in evaluating the character of the service provided. We will, however, no longer employ the rebuttable presumption announced in the Church case, infra, that leases of equipment with drivers to shippers ordinarily give rise to for-hire trans- portation by the lessor. Neither will we use the virtually irrebuttable presumption contained in the Oklahoma Fur- niture decision infra, that an owner-operator driving his own equipment has the right and power to defeat the lessee’s control. We will abandon the suggestion contained in earlier cases that legitimate private carriage results only when an owner-operator becomes an employee of the private carrier. We also believe that there is no longer any justification for maintaining different standards for judging lease arrangements with drivers, depending on whether the lessee is a private or for-hire carrier. We are confident that our new approach is in accord with existing statutory requirements. Nevertheless, we intend to monitor the practical effects of the policy change we are adopting on the regulated sector, private carriers, owner-operators, and the shipping public on a continuing basis. If actual operations under the new policy disclose effects that are clearly contrary to the public interest or the National Transportation Policy, we are prepared to make adjustments or changes in our policy. Preliminary Matters Various commentors raise three objections directed more to the Commission’s procedures than to the merits of our proposal. Commentors claim, first, that Congress has recently considered and rejected a similar proposal, and that we may not now proceed to overturn that legislative determination; second, that a policy statement is an inap- 5b propriate vehicle for our proposed changes; and, third, that we have evidenced a prejudgment of the issues pre- sented. We find no merit in any of these claims. 1. Legislative History. Nothing in the legislative his- tory prevents the action we are proposing. The com- mentors have not pointed out to us, and our research has not revealed, any measure similar to our proposal here which was explicitly examined by either the Senate or the House during their deliberations on the Motor Carrier Act of 1980. Congress plainly left a number of regula- tory problems unaddressed in the Act. The fact that Con- gress could have legislated further, or that Congress di- rectly addressed certain concerns, cannot be considered as an explicit determination to preclude the exercise of our statutory authority to reexamine policy areas not specifi- cally addressed by Congress, provided our ultimate deter- mination is consistent with the law and is a reasonable exercise of our discretionary authority. 2. Use of a Policy Statement. Several commentors object to the use of a policy statement rather than a sub- stantive rule as a vehicle for setting forth new guidelines regarding the distinction between private and for-hire carriage. Ryder Truck Lines, for example, contends that our policy statement will have a substantial impact on motor carrier operations and, therefore, should be con- ducted within the ordinary rulemaking provisions of the Administrative Procedure Act (APA). The procedural objections of the various commentors are without merit since we have in fact given full notice of our proposal, have received comments, and, following * Schneider Transport et al., assert that Congress rejected pro- posals to grant owner-operators backhaul authority for all com- modities and authority to lease to shippers. (See their comments at page 3.) They point to no express rejection, however. The over- all tone of their presentation suggests that any such rejection is to be implied from the fact that the area of private carriage was gen- erally considered during development of the Motor Carrier Act. 6b examination of the comments, are announcing the new guidelines on 30 days’ notice, all as required by section 553 of the APA. In other words, we have fully complied with all applicable requirements for notice-and-comment rulemaking. See American Bus Ass’n v. United States, 627 F.2d 525 (D.C. Cir. 1980). However, we believe that something less rigid than a forma] rule is more suitable to our purposes here. An interpretative rule is a statement issued by an agency to advise the public of the agency’s construction of the statute it administers, or what the court described in Guardian Federal Savings and Loan Ass’n. vy. FSLIC, 589 F.2d 658, 664 (D.C. Cir. 1978), as a clarification or explanation of an existing statute. A policy statement is a statement issued by an agency to advise the public prospectively of the manner in which the agency proposes to exercise a discretionary power. See generally, Attorney General’s Manual on the [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385011_1061%3A1. Public record. Not legal advice.