# Opposition Brief — B. J. Alan Co. v. Interstate Commerce Commission

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1992
- **Citation:** 503 U.S. 1004

## Text

No. 91-1267 APR 2 1992
OFFICE a 8 . | bmn =
In the Supreme Court of the Gnited States

OCTOBER TERM, 1991

B.J. ALAN COMPANY, INC., ET AL., PETITIONERS
v.

INTERSTATE COMMERCE COMMISSION AND
UNITED STATES OF AMERICA, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR THE FEDERAL RESPONDENTS
IN OPPOSITION

KENNETH W. STARR
Solicitor General
Department of Justice
Washington, D.C. 20530

(202) 514-2217

ROBERT S. BURK
General Counsel
CRAIG M. KEATS
Associate General Counsel
MICHAEL L. MARTIN
Attorney
Interstate Commerce Commission
Washington, D.C. 20423

4)

QUESTION PRESENTED

Whether this Court’s decision in Maislin Industries,
U.S., Inc. v. Primary Steel, Inc., 110 S. Ct. 2759 (1990), is
a changed circumstance requiring the Interstate
Commerce Commission to reopen a decision finding that
a common carrier did not violate its common carrier
obligation by refusing to carry common fireworks.

TABLE OF CONTENTS

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TABLE OF AUTHORITIES

(‘ases:

American Trucking Ass’ns, Inc. v Atchison, T. & S.F.

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B.J. Alan Co. v. ICC, 897 F.2d 561 (D.C. Cir. 1990).........
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Chevron U.S.A. Inc. v. National Resources Defense

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ICC vy. Brotherhood of Locomotive Engineers, 482 U.S.
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Lechmere, Inc. v. NLRB, 112 S. Ct. 841 (1992).......00.......

Maislin Industries, U.S., Inc. v. Primary Steel, Inc., 110

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National R.R. Passenger Corp. v. Boston & Maine Corp.,

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Pennsylvania R.R. v. Puritan Coal Mining Co., 237 U.S.
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Restrictions on Service by Motor Common Carriers, 111
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United Parcel Service, Inc. (Ohio), In re, 889 F.2d 1195
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Statutes and regulation:

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Statutes and regulation—Cont.:

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49 U.S.C. 10762
49 U.S.C. 11101(a)

Miscellaneous:

Elimination of Certificates as the Measure of “Holding

Out”, 48 Fed. Reg. 11,136 (1985)

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In the Supreme Court of the Chuted States

OCTOBER TERM, 1991

No. 91-1267
B.J. ALAN COMPANY, INC., ET AL., PETITIONERS
i «

INTERSTATE COMMERCE COMMISSION AND
UNITED STATES OF AMERICA, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR THE FEDERAL RESPONDENTS
IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. la-5a) and
the underlying agency decisions (Pet. App. 8a-17a, 18a-
25a) are all unreported.

JURISDICTION

The judgment of the court of appeals was entered on
October 4, 1991, and a petition for rehearing was denied
on December 10, 1991 (Pet. App 6a). The petition for a
writ of certiorari was filed on February 3, 1992. The
jurisdiction of this Court is invoked under 28 U.S.C.
1254(1).

2

STATEMENT

1. The “filed rate doctrine” of the Interstate Com-
merece Act (ICA) requires that motor common carriers
file tariffs with the Interstate Commerce Commission
setting forth the rates that they charge for the services
they hold out. 49 U.S.C. 10761 and 10762. Under the
common earrier obligation, which is codified in the ICA
at 49 U.S.C. 11101(a), common carriers must provide
service within the scope of their holding out on
reasonable request. Congress did not define the term
“reasonable request,” nor did it specify how carriers can
broaden or narrow their holding out.

In the early days of regulation, when licenses were
narrowly drawn and entry into the industry was limited,
the ICC construed the obligation relatively strictly: the
Commission’s policy was to equate a carrier’s holding
out with its license, and to require carriers to serve all
shippers within the scope of their licenses. See
Restrictions on Service by Motor Common Carriers,
111 M.C.C. 151 (1970) (Restrictions). As motor carrier
entry controls and rate regulation were relaxed,
however, the Commission moved away from this strict
interpretation, and in 1983 it announced that carriers
can reasonably refuse to provide service that is within
the scope of their licenses if providing such service
would be “economically or operationally impracticable.”
BRlimination of Certificates As the Measure of “Holding
Out”, 48 Fed. Reg. 11,136 (1985) (Rlimination).

The Commission's 1983 action in E/imination, which reversed
the approach set out in Restrictions, followed the declaration of
the United States Court of Appeals for the Fifth Circuit that “[a]
common carrier is free to carve out as large or as small a [niche] as

it feels appropriate.” Steere Tank Lines, Inc. v. ICC, 675 F.2d 105,
105 (Sth Cir. 1982) (per curiam), citing Pennsylrania RR.
Puritan Coal Mining Co., 237 U.S. 121, 183 (1915).

2. In 1987, United Parcel Service, Inc., a motor
common carrier, filed with the Interstate Commerce
Commission a tariff announcing its intention to
terminate its holding out to carry common fireworks.
After unsuccessfully seeking to enjoin the tariff in
court, various fireworks shippers filed a complaint
before the ICC, alleging that the tariff was unlawfully
discriminatory and in violation of the common carrier
obligation. The Commission initially held that UPS's
termination of service was unreasonably discriminatory
(Pet. App. 6la-88a) “U/PS 1). On reconsideration, how-
ever, the Commission reversed, finding that UPS’s
action could not be discriminatory because it treated all
fireworks shippers the same (Pet. App. 26a-60a) (UPS
I1).8

3. In UPS II the Commission assessed UPS's pro-
posed service termination in light of the standard it had
set up in 1983 in Elimination. Applying the “oper-
ationally impracticable” test, the ICC found that UPS
had justified its refusal to serve fireworks shippers. The
fireworks trade, which is subject to a variety of federal,
state, and local laws, is highly concentrated during the
short season preceding the July 4th holiday. The
Commission found that, because many fireworks ship-
pers had proven “unwilling or unable to conform” (Pet.
App. 39a n.8) to destination prohibitions and permit
requirements, the expensive and time-consuming task of
ensuring compliance had fallen on UPS. /d. at 29a-50a,
45a. Adding to this burden was the fact that, during this
concentrated transportation period, UPS had to comply
with United States Department of Transportation

2 In re United Parcel Service, Inc. (Ohio), 839 F.2d 1195 (6th
Cir. 1988) (per curiam).

That finding was summarily affirmed on appeal (B./. Alan

Co. vy. 1CC, 897 F.2d 561, 564 n.8 (D.C. Cir. 1990) (B.J. Alan 1)),
and is not at issue here.

2

4

regulations requiring placards on trucks transporting
1,000 pounds or more of fireworks. /d. at 30a, 45a-46a.
These unique difficulties, the Commission found, ham-
pered the efficient operation of a “system that derives its
strength from the ability to ignore the contents of the
package and treat all packages alike.” /d. at 39a n.8.
Accordingly, the Commission approved UPS’s proposed
‘ancellation of service. |

4. The court of appeals affirmed. B.J. Alan Co. v. ICC,
897 F.2d 561 (D.C. Cir. 1990) (BJ. Alan 1).4 The court
thoroughly addressed and rejected petitioners’ claim
that “laln unlimited duty of carriage was [historically |
the rule” (B.J.Alan I, 897 F.2d at 563), and that thus the
Commission lacked authority to approve UPS's discon-
tinuance of service. The court also affirmed the Commis-
sion’s factual finding that fireworks shipments cansed
UPS inordinate operational problems and that, there-
fore, the service was operationally impracticable. /d. at
564-565.

5. Petitioners did not seek further review of B./.
Alan I either before the court of appeals or before this
Court. Instead, they filed various papers before the
agency seeking to have the proceeding reopened.’ Long
after UPS II had become administratively final,
petitioners filed the instant petition to reopen, con-
tending that under Maislin Industries, U.S., Inc. v.
Primary Steel, Inc., 110 S. Ct. 2759 (1990), the Com-
mission could not allow carriers to limit their holding

‘ Petitioners’ application for a stay of the Commission’s decision
pending the appeal was denied by this Court. B.J. Alan Co. v. ICC,
492 U.S. 935 (1989).

Under 49 U.S.C. 10327(g)(1) and 49 C.F.R. 1115.4, the
Commission may reopen a proceeding at any time on its own
initiative or at the request of a party because of material error,
new evidence, or substantially changed circumstances.

5

out to anything less than the full extent of their existing
operational capacity.®

6. The Commission refused to reopen the proceeding.
Pet. App. 8a-17a. Noting that the common carrier
obligation—unlike the filed rate doctrine—has never
been considered absolute, the Commission found that
JPS II was not inconsistent with any statutory
directive or Supreme Court precedent. /d. at 12a-13a. For
that reason, it concluded that petitioners’ “reliance on
Maislin as a basis to reopen is misplaced.” Jd. at 14a.

7. Petitioners sought review of the refusal to reopen
in the United States Court of Appeals for the Sixth
Circuit, which transferred the proceeding to the
District of Columbia Circuit. Finding that the Maislin
decision established no new principles of law, the
District of Columbia Circuit concluded that petitioners
had not demonstrated that Maislin was a changed
circumstance, and that petitioners’ real basis for
reopening was their claim of material error. Pet. App. 2a-
24 (B.J. Alan II). Because an agency’s decision not to
reconsider based on material error is unreviewable (JCC
v. Brotherhood of Locomotive Engineers, 482 U.S. 270
(1987)), the court summarily denied the petition for
review. Pet. App. 3a.

ARGUMENT

The opinion of the court of appeals is correct and does
not conflict with any decision of this Court or of any
other court of appeals. Further review by this Court is
not warranted.

6 In Maislin, this Court held that the Commission had violated
the legislatively and judicially mandated filed rate doctrine by
adopting a policy under which common carriers that had offered
reduced (but unfiled) rates might be barred from collecting their
higher filed rates in a later collection case.

SS

6

Petitioners incorrectly contend that Maislin estab-
lished a new rule of law that requires reconsideration of
the decisions in the UPS litigation. In fact, Maislin
simply reiterates the established principle that an
agency must follow its statute, as interpreted by a series
of Supreme Court decisions establishing a longstanding
precedent.’ That is scarcely a new principle of law con-
stituting a changed circumstance sufficient to require a
reopening in this case.*

Nor does the specific holding of Maislin—that the
ICC may not undercut the filed rate doctrine by requir-
ing carriers to charge their negotiated but unfiled
rates—require reopening of the Commission’s decision
in the UPS litigation, which involved the interpretation

‘ Petitioners’ contention that Maislin placed new limitations on
the ICC’s discretion under Chevron U.S.A. Inc. v. National
Resources Defense Council, Inc., 467 U.S. 837 (1984), to interpret
ambiguous statutory language is refuted by National R.R.
Passenger Corp. v. Boston & Maine Corp., No. 90-1419 (Mar. 25,
1992), slip op. 8-11. In National R.R. Passenger Corp., this Court
explained that “[jjudicial deference to reasonable interpretations by
an agency of a statute that it administers is a dominant, well
settled principle of federal law” (slip op. 9, citing Chevron)—in
that case, those principles required deference to the ICC
interpretation of a term in the Rail Passenger Service Act of 1970,
45 U.S.C. 562(d). See also Maislin, 110 S. Ct. at 2771-2772 (Scalia,
J., concurring); Lechmere, Inc. v. NLRB, 112 5S. Ct. 841 (1992).
Nor did Maislin reduce the agency’s ability to modify policies to
keep up with new developments in the industry. 110 S. Ct. at 2770,
citing American Trucking Ass’ns, Inc. v. Atchison, T. & S.F. Ry.,
387 U.S. 397 (1967).

* Petitioners also contend that the Commission incorrectly
interpreted its governing statute and longstanding precedent
concerning the extent of the common carrier obligation. But that is
the very argument that petitioners advanced unsuccessfully in
B.J. Alan I. Petitioners did not seek timely review of B.J. Alan 1
in this Court, and therefore cannot challenge that aspect of the
decision now.

eeeeeeeEeEee

7

of an entirely different provision of the ICA. Petitioners
assert that the logic of Maislin requires the conclusion
that a common carrier may not narrow its holding out of
service to less than the full extent of its authority. This
assertion ignores the differences both in the relevant
statutory commands, and in the applicable judicial
precedents.

As the Court emphasized in Maislin, 110 8. Ct. at
2765-2767, the ICA has long been read to “create strict
filed rate requirements” (id. at 2766) which “govern|] the
legal relationship between shipper and carrier” (id. at
2765)—a “rigid approach” (id. at 2766) deemed necessary
to prevent evasion of the Act’s requirements. In
contrast, 49 U.S.C. 11101(a), incorporating the common
carrier obligation, requires the carrier to “provide the
transportation or service on reasonable request”—thus
providing room for consideration of equitable and
discretionary factors in the determination of what
constitutes a “reasonable” request.'°

Although they rely heavily on a few passing
references to the common carrier obligation in early
cases (Pet. 15), petitioners cite no decision of this Court
construing the “reasonable request” requirement as
narrowly as they suggest here. And they certainly offer
no explanation of why the reasonableness of the request
should not be considered in light of current conditions,

9 Indeed, to the extent that Maislin nas any relevance to this
case, UPS complied with the filed rate doctrine by putting its
service limitation into a tariff.

10 As the Commission observed in UPS //, “even in the earliest
rail cases, the obligation to provide service was not held to be
absolute, but rather was qualified by a rule of reason that excused
carriers from service failures that were reasonable under the
prevailing circumstances.” Pet. App. 41a, citing Pennsylvania
R.R. v. Puritan Coal Mining Co., 237 U.S. 121, 183 (1915).

8

including the current regulatory and economic context
in which the shipper and the carrier are operating.
Petitioners’ contention that Maislin constitutes a
changed circumstance requiring reopening of the UPS
litigation thus overlooks the significant differences be-
tween the filed rate doctrine and the cases interpreting
that doctrine on the one hand, and the common carrier
obligation and the cases interpreting that obligation on
the other.

In sum, petitioners have not demonstrated the exis-
tence of any material changed circumstance or new evi-
dence requiring reconsideration of UPS II. Instead, peti-
tioners’ only rea) claim is that that decision involved ma-
‘terial error—the claim that was rejected in B../. Alan I.
It is clear that the refusal to reopen UPS II to consider a
claim of material error is not itself reviewable. JCC v.
Brotherhood of Locomotive Engineers, 482 U.S. 270, 280
(1987). Thus, the court of appeals correctly denied the in-
stant petition for review.

CONCLUSION
The petition for a writ of certiorari should be denied.
Respectfully submitted.

KENNETH W. STARR
Solicitor General

ROBERT S. BURK

General Counsel
CRAIG M. KEATS

Associate General Counsel
MICHAEL L. MARTIN

Attorney

Interstate Commerce Commission

APRIL 1992

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386011_0154%3A3. Public record. Not legal advice.