Motion to Dismiss — Aberdeen & Rockfish R. Co. v. Students Challenging Regulatory Agency Procedures (SCRAP)

IN THE oiiees

Supreme Court of the United State

Octoser TERM, 1974

Nos. 73-1966 and 73-1971

UniTep States or AMERICA and INTERSTATE CoMMERCE

Commission, Appellants

Vv.

_ STUDENTS CHALLENGING REGULATORY AGENCY

Procepures (8.C.R.A.P.) et al., Appellees

ABERDEEN AND RockFisH RAILROAD CoMPANY,

et al., Appellants

Vv.

STUDENTS CHALLENGING REGULATORY AGENCY

Procepures (S.C.R.A.P.) et al., Appellees

On Appeal from the United States District Court for the

District of Columbia

MOTION TO DISMISS OR FOR SUMMARY AFFIRMANCE

BY NATIONAL ASSOCIATION OF RECYCLING IN-

DUSTRIES, INC.. COMMERCIAL METALS Co... LV.

SUTPHIN CO. AND FRANKEL BROTHERS & CO. INC.

SSE

Epwarp L. MeRRIGAN

Attorney for Appellees National

Assocwation of Recycling Indus-

tries, Inc., Commercial Metals

Co., I. V. Sutphin Co. & Frankel

Brothers & Co. Ine.

888 17th Street, N. W. -

Washington, D. C. 20006

Pusss or Braon 8. Apams Paurrova, Inc., Wasninarom, D. C.

=>,

TABLE OF CONTENTS

Page

Motion To Dismiss or for Summary Affirmance and

SO IN, nooo os res wena oon kn vsken 2

ee ee Seen 2-11

Argument pou Aude irks ke, 12

I. This Court Lacks Jurisdiction Over Appellants’

Direct Appeals Under 12 U.S.C. § 1253 ........ 12-13

Il. The District Court’s Judgment Should Be Af:

firmed or The Appeals Dismissed Because The

Issues Presented Are Not Substantial ........ 13-18

CIE oii. kv cbacnhawawd weno cedabscnn kh cas. 19

TABLE OF CITATIONS >

CASES:

Baltimore & O.R.R. v. U.S., 386 U.S.372 (1967) ...... 13

Calvert Cliffs Coordinating Committee v. Atomic En-

ergy Commission, 146 U.S.App.D.C. 33, 38, 449

ee Beh, AOR LEED bch ocd noe henddecaesud 15, 16

City of New York v. United States, 337 F. Supp. 150

CERCA SOME Rbskanaes¥ecens teens 7, 8, 10, 14, 18

Conservation Council of North Carolina v. Froehlke,

4 Cir., 374 F.2d 664, 665 (1973) ......,......00. 15

Environmental Defense Fund, Inc. v. Froehlke, 8 Cir.,

See Fe Py ee CHEE hh eng nn cc tbaccknaaceass 15

Greene County Board v. Federal Power Commission,

455 F.2d 412 (2d Cir.), cert. denied 409 U.S. 849

6, 14, 15, 16, 18

Gunn v. University Committee To End The War, 399

cee SS Fe | rr er eee 12

Harlem Valley Transportation Association v. Stafford,

Chairman, Interstate Commerce Commission, 2d

Cir., June 18, 1974, Docket No. 73-2496 ........ 8, 9, 14

ii Table of Contents Continued !

Page

Hutcherson v. Lehtin, 399 U.S. 522, 90 S. Ct. 2238 ¥ |

CUDTO) occ nccncnciccensnseversccstovensonscecs eB

Public Service Commission of Missouri v. Brashear

Freight Lines, Inc., 306 U.S. 204, 59 S. Ct. 480,

83 L. Ed. 608 (1939) .......-- cece eee ee eeeeees 12, 13

Rockefeller v. Catholic Medical Center, 397 U.S. 820,

90 S. Ct. 1517, 25 L. Ed. 2d 806 (1970) ......... 12, 13

S.C.R.A.P. v. United States, 346 F. Supp. 189,198 .. 8

9.C.R.A.P. v. United States, 371 F. Supp. 1291 (1974) 15

United States v Allegheny-Ludlum Steel Corp., 406

UB. 74D (1972) 2. nn ccccec cc ceteensveccececees 13

United States v. S.C.R.A.P., 412 U.S. 669, 93 S. Ct.

2405, 37 L. Ed. 2d 254 (1973) ........-+. eee eee 14

STaTUTEs:

National Environmental Policy Act, 42 U.S.C. § 4321

Ot BOG. ccc cvcccccccncccescnndacvesecccrseccces 4,5

/ eis fae o) Qe rn rr eres bree 2,12

s Public Law 93-236, Regional Rail Reorganization Act

of 1973, Section 603 ........... cece eee eee eeeee 17

IN THE

Supreme Court of the United States

OcToBER TERM, 1974

Nos. 73-1966 and 73-1971

UNITED STATES OF AMERICA and INTERSTATE COMMERCE

ComMMISssION, Appellants

Vv.

STUDENTS CHALLENGING REGULATORY AGENCY

Procepures (8.C.R.A.P.) et al., Appellees

ABERDEEN AND RocKFiIsH RatLRoaD CoMPANY,

et al., Appellants

Vv.

STUDENTS CHALLENGING REGULATORY AGENCY

ProcepureEs (8.C.R.A.P.) et al., Appellees

On Appeal from the United States District Court for the

District of Columbia

MOTION TO DISMISS OR FOR SUMMARY AFFIRMANCE

BY NATIONAL ASSOCIATION OF RECYCLING IN-

DUSTRIES, INC. COMMERCIAL METALS CO., LV.

SUTPHIN CO. AND FRANKEL BROTHERS & CO. INC.

Appellees National Association of Recycling Indus-

tries, Inc. (NARI), Commercial Metals Co., L.V.

Sutphin Co. and Frankel Brothers & Co. Inc. hereby

. =

move, under and pursuant to the provisions of Rule \

16 of the Supreme Court Rules—

(1) to dismiss the two appeals filed by appel-

lants herein on the ground that this Court has no

jurisdiction over such direct appeals from a Dis-

trict Court judgment under the provisions of Title

28 U.S.C. § 1253; or in the alternative,

(2) for summary affirmance of the District

Court’s judgment reported at 371 F.Supp. 1291

on the ground it is manifest that the issues now

raised by appellants are not substantial and the

decision and judgment of the District Court are

plainly sound, reasonable and correct.

STATEMENT OF FACTS IN SUPPORT OF THE MOTION

Appellee NARI is the trade association for the non-

ferrous metals, waste paper, textile, plastics and rubber

recycling industries. Its membership consists of ap-

proximately 700 firms located throughout the United

States which collect, process and utilize for manufac-

turing purposes the aforementioned recyclable mate-

rials. Appellees Commercial Metals Co. of Dallas,

Texas, 1.V. Sutphin Co. of Cincinnati, Ohio, and

Frankel Brothers & Co., Inc. of Rochester, New York,

are, in turn, members of NARI and each is engaged

in the recycling of solid waste materials and recovery

of useful resources from discarded solid wastes which

otherwise would have to be burned, buried or sim-

ilarly disposed at public expense, with obvious adverse

effects upon the environment.

Over the years since 1968, NARI, numerous other

private recycling and environmental organizations, and

various agencies of the Federal Government (inelud-

3

ing the President’s Council on Environmental Quality,

the Environmental Protection Agency, the Depart-

ments of Commerce and Interior and the General Serv-

ices Administration) have repeatedly petitioned the

Interstate Commerce Commission not to license or ap-

prove any further across-the-board annual percentage

increases in railroad freight rates for the transporta-

tion of recyclable materials until the Commission first

takes effective action to correct the grossly discrim-

inatory, unreasonable base rates charged by the rail-

roads for such transportation, which rates have his-

torically impeded and stifled the marketing of re-

eyclable commodities and artificially stimulated the

utilization’ and depletion of competing, scarce virgin

natural resources, again with serious adverse effects

on the environment.

| The Commission and the railroads have been com-

pletely impervious to these pleas. The railroads have

| continued to seek and the Commission has’ approved,

without first investigating the unlawful nature of the

| base rate structure, the following annual percentage

| _ inereases in rates charged for the transportation of

recyclable commodities:

Increase In Increase In

Waste Paper Non-Ferrous Methl

ICC Case No. Year Rates Scrap Rates

Ex Parte 256 1967 3% 3%

Ex Parte 259 1968 5% 5%

Ex Parte 262 1969 6% 6%

Ex Parte 265 1970 6% 6%

Ex Parte 267 1971 11% 11%

Ex Parte 281 1972 2.5% surcharge plus 2.5% surcharge plus

3% 3%

The evidence developed in this case, however, now

demonstrates clearly that, as repeatedly asserted by

y

NARI and the others mentioned above, these constant

annual rate increases have been extremely damaging

to the pre-existing discriminatory rate structure in

that they have operated substantially to broaden the

net disparity in rates which already existed between

those charged by the railroads for the transportation

of recyclable commodities and those simultaneously

charged for the transportation of competing virgin

materials. That evidence, obtained from the Interstate

Commerce Commission itself, shows: *

(1) That during the period from 1959 through

1971, the net disparity in average rates charged

for the transportation of competing woodpulp and

waste paper grew from 13.9¢ per hundred pounds

to 18.6¢ per hundred pounds, the actual average

rates charged per hundredweight being as follows:

Year Woodpulp Waste Paper

1959 17.4¢ 31.3¢

1971 24.4¢ 43.0¢

(2) That during the same period (1959-1971),

the net disparity in average rates charged for the

transportation of competing non-ferrous metal

virgin ores and concentrates and non-ferrous metal

scrap grew from 13.3¢ per hundred pounds to

17.7¢, the actual rates per hundredweight being as

follows:

Year Virgin Ores Serap Metal

1959 51.7¢ 65.1¢

1971 . 10.3¢ 88.0¢

In 1966, while the railroads and the Commission were

proceeding in the manner just described, Congress

passed the National Environmental Policy Act (42

1 See Commission’s Environmental Impact Statement, Ex Parte

281, pgs. 84, 85.

—"

5

U.S.C. § 4321 et seq.). That statute states, at 42 U.S.C.

§ 4331(b) :

‘*(b) In order to carry out the policy set forth

in this chapter, it is the continuing responsibility

| of the Federal Government to use all practicable

means, consistent with other essential considera-

tions of national policy, to improve and coordinate

Federal plans, functions, programs, and resources

to the end that the Nation may—....

(6) enhance the quality of renewable re-

sources and approach the maximum attainable

recycling of depletable resources.’’ (Emphasis

supplied.)

Section 102 of NEPA (42 U.S.C. § 4332) thereupon

provides:

‘“‘The Congress authorizes and directs that, to

the fullest extent possible:

‘*(1) the policies, regulations, and public laws

of the United States shall be interpreted and

administered in accordance with the policies set

forth in this chapter, and

**(2) all agencies of the Federal Government .

shall—...

**(C) include in every recommendation or

report on... major Federal actions signifi-

cantly affecting the quality of the human en-

vironment, a detailed statement by the respon-

sible official on—

(i) the environmental impact of the pro-

posed action,

(ii) any adverse environmental effects

which cannot be avoided should the proposal

be implemented,

(iii) alternatives to the proposed action,

ee

(iv) the relationship between local short- {

- term uses of man’s environment and the

maintenance and enhancement of long-term

productivity, and

(v) any irreversible and _ irretrievable

commitments of resources which would be

involved in the proposed action should it be >

implemented.

‘‘Prior to making any detailed statement, the

responsible Federal official shall consult with ;and

obtain the comments of any Federal agency which

has jurisdiction by law or special expertise with

respect to the environmental impact involved.

Copies of such statement and the comments and

views of the appropriate Federal, State, and local

agencies, which are authorized to develop and en-

force environmental standards, shall be made avail-

able to the President, the Council on Environ-

mental Quality and to the public... and shall ac-

company the proposal through the existing agency

review processes.”’

Shortly after NEPA became effective, therefore,

parties appearing before the Commission in important /

railroad cases contended that the” ission could \_|

no longer completely ignore relevant environmental

considerations in its decision-making process, and that

henceforth its major actions necessarily had to be sup-

ported by Environmental Impact Statements prepared

as directed by NEPA. The Commission, however, ex-

hibited almost complete disdain for the new federal

statute, and as early as 1971, it sought to intervene in

Greene County Board v. Federal Power Commission,

C.C.A. 2, 1971, 455 F.2d 412, cert. denied 409 U.S. 849—

a case wherein the Federal Power Commission was

seeking to avoid regulatory agency compliance with

NEPA. ICC’s intervention was rejected, however; the

7

Second Circuit ruled against FPC’s position, and this

Court denied certiorari.

In City of New York v. United States, 337 F. Supp.

150 (D.C., N.Y. 1972), a case involving proceedings

before the Interstate Commerce Commission itself, the

Commission directly defied NEPA and endeavored to

license the abandonment of railroad facilities without

the preparation of a supporting Environmental Impact

Statement. A Three-Judge Court in New York criti-

cized the Commission for its ‘‘slow reaction’”’ to the

directives of NEPA and stated that the Commission

was powerless to “disregard ... the law’’ (337 F. Supp.

158-160). The Court remanded the case to the Com-

mission, stating, at 337 F. Supp. 160:

‘‘To permit an agency to ignore its duties under

NEPA with impunity because we have serious

doubts that its ultimate decision will be affected

by compliance would subvert the very purpose of

the Act and encourage further administrative

laxity in this area.... In any event, preservation

of the integrity of NEPA necessitates that the

Commission be required to follow the steps set

e forth in § 102, even if it seems likely that those

steps will lead it to adhere to the present result.

Thus, this proceeding must be remanded to the

Commission for it to bring itself into compliance

with the law.”’

Albeit the District Court’s decision in City of New

York, supra, was rendered on January 20, 1972, the

Commission nevertheless proceeded 12 days later (on

February 1, 1972) in the case at bar (Ex Parte No. 281,

Increased Freight Rates, 1972) to license another in-

crease in rates for the transportation of recyclables

without preparing any Environmental Impact State-

ment under NEPA. The Commission instead relied

8

on the same type of terse, unsupported conélusion it

made in City of New York, supra, to wit, that, in the

Commission’s opinion, the challenged rate increase

“‘would have no significant adverse effect .. . on the

quality of the human environment within the meaning

of NEPA” (See 341 I.C.C. 288, 314). On April’ 24,

1972, that rate increase was extended in duration, again

without any effort on the part of the Commission to

comply with NEPA.

The Commission’s continued defiance of ‘the law in

Ex Parte 281 thus led to the commencement of this

action by the original plaintiffs S.C.R.A.P. Faced

with this litigation, the Commission suddenly promised

both the District Court and the Chief Justice of this

Court that it intended to comply with all of the re-

“quirements of NEPA before it issued its final report

in Ex Parte 281 with reference to the allowance of

permanent rate increases for 1972 (See S.C.R.A.P. v.

United States, 346 F.Supp. 189, 198). Thereafter,

however, the Commission flatly ignored those promises,

and when it rendered its final report on October 4, 1972,

it supplied no supporting Impact Statement under

NEPA. Once again, it retreated to its old rejected,

unsustainable City of New York position by stating

(341 I.C0.C. 288, 314):

“Inasmuch as we conclude that our actions

herein will neither actually nor potentially sig-

nificantly affect the quality of the human environ-

ment, we have not included in our Report an ex-

tensive formal impact statement.’’

In the meantime, in still another case simultaneously

pending in the United States District Court for the

Southern District of New York (Harlem Valley Trans-

——~

9

portation Association v. Stafford,: Chairman, Inter-

state Commerce Commission ), the Commission was

contending, this time directly contrary to the position

taken by the Department of Justice in the same case,

that it had no obligation to prepare any Impact State-,

_ ments under NEPA until it reached its final decisions

in cases, i.e., the Commission had no duty under. NEPA

to prepare draft Impact Statements at earlier stages

of Commission | proceedings. That contention was

bluntly rejected by the District Court on June 21, 19739

and its decision was affirmed by the Court of Appeals

for the Second Circuit on June 18,'1974 (See Harlem

Valley Transportation Association, et al. v. Stafford,

, Chairman, Interstate Commerce Commission, C.0.A.

2, Docket No. 73-2496, decision rendered 6/18/74). In

its opinion, the Second Circuit'stated:

*. .. (W)hile we recognize there are limits to

what may reasonably be expected from agency

/

compliance with NEPA, we cannot excuse . . .

noncompliance with NEPA such as the ICC here

seeks to justify.”’ ;

In the ¢ase at bar, when the Commission once again»

failed to support its Final Report in Ex Parte 281 with

any Environmental Impact Statement under N EPA,

protesting petitions were filed with the Commission by

the Council on Environmental Quality, the Environ-

mental Protection Agency, appellees NARI et al.

and others (See 353 F. Supp. 320, 321). Plaintiffs.

S.C.R.A.P. went further and filed a motion for injune-

tive relief with the District Court in this action. At

that point, the Commission suspended its Final Report

and Order of October 4, 1972 in Ex Parte 281 as they

applied to recyclable commodities until it could further

evaluate the situation under NEPA.

10 |

)

It was therefore with this background of arbitrary, f

capricious resistanée and opposition to all of the basic

requirements of NEPA coupled with its deaf refusal

to respond in any way to thé persistent pleas it had re-

peatedly received over the years not to license any

» further increases in rates for the transportation of re-

eyclable commodities until it first eliminated the basic

rate discriminations involved, that the. Commission be-

latedly set out to prepare an Environmental Impact

Statement which might somehow be construed as suf-

ficient to support the groundless conclusions it had

already reached and expressed in its suspended Final

‘Report in Ex Parte.281. '

Appellee NARI, cognizant of that background and ‘

fearful of the Commission’s true motives, promptly

asked the Commission whether it intended to hold a

hearing on the environmental aspects of this case be-

fore it’ issued any further statements in this matter

under NEPA. In this regard, in City of New York v.

United States, supra, when the Commission was

ordered by a District Court to comply with NEPA, the

Commission, upon remand, immediately scheduled a

hearing at which ‘‘All parties were given full oppor-

‘tunity to present expert evidence on the environmental

aspects of the case’ (See 344 F.Supp. 929, 938). But

here, the Commission summarily rejected NARI’s

request for a hearing, stating the Commission intended

to proceed entirely ex parte.

It was thus hardly surprising that soon thereafter,

on March 5, 1973, the Commission issued a draft

Environmental Impact. Statement in this case which

both the Council on Environthental Quality and the

Environmental Protection Agency and others labeled

totally ‘‘inadequate”’ and otherwise violative of NEPA.

i d i i :

———

11

The Commission, plainly accustomed to such low grades

wunder NEPA, nevertheless issued the said Impact

Statement—in final form on May 2, 1973, over the

vigorous dissent of two of its own Commissioners and

the abstention of a third.

_The Commission thereupon reinstated its original

Final Report in Ex Parte 281 and licensed still an-

other 3% permanent increase in freight rates for re-

cyclable commodities. This sixth successive increase

since 1968 imposed another $9,600,000 a year in un-

lawful, grossly discriminatory freight rates upon the

recycling industry, without any effort on the part of

the Commission to investigate and correct the discrimi-

natory nature of the aggravated base rate structure.

Appellees promptly filed motions for summary

judgment and appropriate injunctive relief in the Dis-

trict Court. On February 19, 1974, the Three-Judge

Court ruled that “the Commission’s efforts to meet the.

commands of NEPA were substantially deficient.’’ The

case was thus remanded to the Commission “for ful-

fillment of its NEPA obligations” (371 F. Supp. 1291).

The District Court, however, refused to grant any

mjunctive relief, stating:

‘However, because of our uncertainty concern-

ing the meaning of the Supreme Court’s decision

last term in Atchison, Topeka & Santa Fe R. Co.

v. Wichita Board of Trade, 412. U.S. 800, 93 8. Ct.

2367, 37 L. Ed. 2d 350 (1973), we refrain from

issuing an injunction restraining the railroads

from collecting the increased rates pending the

Commission’s reconsideration.”

ARGUMENT

. ;

This Court Lacks Jurisdiction Over Appellants’ Direct Appeals

Under 12 U.S.C. § 1253 i

~ Both Government appellants and railroad appellants

rely exclusively on 28 U.S.C. § 1253 to support their {

direct appeals to this Court from the District Couft’s

judgment of February 19, 1974.* But 28 U.S.C. § 1253

allows direct appeals to this Court only from judg-

ments ‘“‘granting or denying .. . an interlocutory or

permanent injunction.”

These two appeals, however, are not appeals ‘*from

an order granting or denying... an... injunction.”

While the District Court did deny an injunction which

had been sought by appellees (371 F. Supp. 1307-10), “s

appellees have not perfected appeals from that denial.

Appellants, on the other hand, having clearly pre-

vailed on the injunction issue below so that the rail-

roads are still collecting the new rate increase of

$9,600,000 a year authorized by the Commission, have

no standing to appeal from that massive victory

(Public Service Commission of Missouri v. Brashear

Freight Lines, Inc., 306 U.S. 204, 59 S. Ct. 480, 83 L.Ed.

— 608 (1939); Gunn v. University Committee To End

The War, 399 U.S. 383, 391, 90 S.Ct. 2013 (1970) ;

Rockefeller v. Catholic Medical Center, 397 U.S. 820,

90 S.Ct. 1517, 25 L.Ed.2d 806 (1970). Indeed, the

District Court expressly ruled at 371 F.Supp. 1291,

1293: : }

“© . (Wie refrain from issuing an, injunction

restraining the railroads from colleeting the in-

a

2 Government’s Jurisdictional Statement, p. 2; Railroads’ Juris-

dictional Statement, p. 2.

13

creased rates pending the Commission’s recon-

sideration.”’

Patently therefore both direct appeals to this Court

must be dismissed for lack of jurisdiction under 28

U.S.C. § 1253 ( Public Service Commission v. Brashear,

supra; Hutcherson v. Lehtin, 399 U.S. 522, 90 S.Ct.

2238 (1970) ; Rockefeller v. Catholic Medical Center,

supra). a

The two cases upon which appellants rely to support

their jurisdictional claims are plainly inapposite be-

eause both involved appeals from orders “granting or

denying ...an...injunction.’’ Baltimore & O.R.R.

v. US., 386 US. 372 (1967) involved an appeal by

losing parties who had sought an injunction which was

denied by the court below. United States v. Allegheny-

Ludlum Steel Corp., 406 U.S. 742 (1972), in turn, in-

volved two cases, one in which an appealing party

requested injunetive relief that was denied, and the

other in which the Interstate Commerce Commission

had opposed an injunction that was granted by the

District Court.

II.

The District Court's Judgment Should Be Affirmed or the

Appeals Should Be Dismissed Because the Issues Presented

for Review Are Not Substantial.

In addition to the fatal jurisdictional barrier dis-

eussed hereinabove, the instant motion should be

granted because the two appeals do not present sub-

stantial questions for review by this Court.

Essentially, the only real question again presented

by appeallants is whether the Interstate Commerce

Commission, like all other federal agencies, is subject

to the National Environmental Policy Act, 42 U.S.C.

SEAS LENE MNT LIE RRA Pe

ne

4321 et seq., so that it must follow the procedures pre- \

scribed by that federal statute and thus fairly develop

and prepare environmental impact statements to sup-

port its major federal actions.

14

Clearly, this same basic question, raised time after

time in the past, has already been y resolved ;

against appellants by the decisions vi Greene County

Board v. Federal Power Commission, 455 F.2d 412

(2d Cir.), cert. denied 409 U.S. 849; City of New York

v. United States, 337 F.Supp. 150 (S.D.N.Y., 1972) ;

and Harlem Valley Transportation Association v.

Stafford, Chairman, Interstate Commerce Commission,

2d Cir., June 18, 1974, Docket No. 73-2496). .

correctness of these recent decisions is not sub-

jéct to doubt. As this Court recognized in United

States v. S.C.R.A.P., 412 U.S. 669, 93 S.Ct. 2405, 37

L.Ed.2d 254 (1973), the ‘‘policies and goals set forth

in [NEPA] are supplementary to those set forth in

existing authorizations of Federal agencies” (See 93

S.Ct. 2419; 42 U.S.C. § 4335); and Congress spe-

vifically directed all federal agencies, with no exemp-

tion of the Interstate Commerce Commission, to take

all actions necessary to conform their existing au-

thority and administrative procedures to the require-

ments of NEPA (See 42 U.S.C. § 4333). Thus, this

Court readily assumed in S.C.R.A.P. that “there is

general judicial power to determine if an agency has

complied with NEPA, and to grant equitable relief if

it has not’’ (See 93 S.Ct. 2420).

And, of course, this is precisely what the District

Court has now done in the case at bar. It exercised its

‘‘general judicial power to determine if the [ICC]

has complied with NEPA,” and when it found that the

ee:

15

Commission had not correctly complied, is simply re-

manded the case to the Commission for further pro-

eeedings consistent with the requirements of NEPA

(See S.C.R.A.P. v. United States, 371 F. Supp. 1291

(1974) ).

n line with the holding.in Calvert Cliffs Coordinat-

Committee v. Atomic Energy Commission, 146 U.S.

App. D.C. 33, 38, 449 F.2d 1109, 1114 (1971), the

District Court ruled that NEPA ‘‘sets a high‘ stand-

ard for the agencies, a standard which must be’ vigor-

ously enforced by the reviewing courts.’’ It also held,

consistent with Greene County Board and Calvert

Cliffs, supra, that the ICC, like other federal agencies,

must meet the procedural requirements of NEPA

‘fully and in good faith,” and its environmental impact

statement cannot be prepared in an arbitrary, capri-

cious manner, and it cannot be sustained if it patently

gives imsufficient weight and attention to environmental

values (See 146 U.S.App.D.C. at 39, 449 F.2d at 1115).

The District Court carefully restricted its review of

the Commission’s impact statement to matters of pro-

cedure under NEPA and it expressly avoided ‘‘any

substantive review,’’ albeit federal courts in other cir-

cuits previously extended their review of NEPA impact

statements to matters of substance (See Conservation _

Council of North Carolina v. Froehlke, 4 Cir., 473

F.2d 664, 665 (1973); Environmental Defense Fund

Inc. v. Froehlke, 8 Cir., 473 F.2d 346, 353 (1972)).

In essence, therefore, the District Court found that

in this case the Commission, which initially doggedly

refused to comply with NEPA at all, was now guilty of

mere pro forma compliance (See App. A, Govt’s J.S.,

pg. 28a.) ; that, contrary to Greene County Board and

~*~

.

a se

es

3

Calvert Cliffs, supra, the Commission’s impact state- \

ment is “‘deficient’’; it does not contain ‘‘individualized

. good faith consideration and balancing of environ-

mental factors’’; it is combative, defensive and advoca-

tory’’; and does not respond in any respect to sugges-

tions and recommendations made in good faith by other ,

federal agencies (See App. A, Govt’s J.S., pgs. 28a-

39a). i

Moreover, the District Court found that the Commis-

sion arbitrarily and capriciously failed to give any

consideration whatsoever to the discriminatory, debi-

litating wnderlying rate structure before it prepared

and finally adopted its pro forma impact statement

under NEPA. In this connection, the District Court

stated (See App. A, Govt’s J.S., pgs. 34a-39a) :

“Tt is the underlying rate structure which the

percentage increases aggravate; if this structure

contributes to the degradation of our environment,

then the increases would at least presumptively

aggravate that contribution. .. . The Commission’s .

failure to hold down the rate increases on recycl-

ables would thus have a cumulative impact on the

environment. Such cumulative impacts must be

considered in NEPA statements. ... ?

' “The necessity for the Commission to consider

the environmental impact of the underlying rate

structure before approving rate increases on re-

eyclable commodities is further underscored by the

recent enactment of Public Law 93-236, 93rd Con-

gress, the Regional Rail Reorganization Act of

1973. Section 603 of the Act requires the Commis-

sion to ‘adopt appropriate rules’ to ‘eliminate dis-

crimination against the shipment of recyclable

materials in rate structures . . . where such discri-

mination exists.’ This provision is a legislative

recognition of discrimination against recyclables in

the existing railroad rate structure and a legis-

16

>

:

17

lative direction to the Commission t» eliminate it.

The responsibility imposed by NEPA upon the

commission to ‘approach the maximum attainable

recycling of depletable resources,’ 42 U.S.C. §

4331(b)(6), surely cannot be’ fulfilled unless this

provision is complied with before rate increases on

recyclable commodities are approved.”’

Thus, the District Court acted properly and correctly

when it rejected the Commission’s pro forma, arbi-

trary, incomplete environmental impact statement, and

when it simply remanded this case to the Commission

for further administrative proceedings consistent with

the requirements of NEPA and Section 603 of Public

Law 93-236, referred to in the last mentioned excerpt

from the District Court’s opinion.

Plainly, therefore, there is absolutely no substance

to the railroads’ contention that the ‘‘lower court had

no authority to act in this case.’’ There is nothing

whatever in the Interstate Commerce Act or any other

statute which prevents judicial review of a federal

agency’s compliance or non-compliance with NEPA.

Indeed, as stated above, this Court indicated in United

States v. S.C.R.A.P., supra, that ‘‘there is general judi-

cial power to determine if an agency has complied with

_ NEPA, and to grant equitable relief if it has not’’

(See 93 S.Ct. 2420).

Nor is there any validity to tae Govérnment’s hollow

contention that the District Court’s decision somehow

“denies the railroads the benefit of timely general

revenue orders.’’ In the case at bar, the District Court

denied injunctive relief and expressly allowed the rail-

‘ roads to go ahead with the collection of the challenged

rate-increases while the Commission reconsiders the-

case under NEPA. If the Commission now comes to

grips in this case with the discriminatory nature of the

ENTER INET EAE OR NRG I SOIR ERO

IRS ee Ses,

-

—

18

underlying base rate structure, there will be no delays

in future cases because all of the relevant facts will have

been developed here, for use by the Commission and

the parties, in this case and in all future rate proceed-

ings. Thus, ix the final analysis, the District Court’s

order to the Commission in this case will actually

resolve that issue once and for all, and will thus result

in substantial time savings in future rate increase

proceedings.

Finally, the Government’s hearing contentions are

completely specious. In City of New York, supra, the

Interstate Commerce Commission, on its own motion,

expeditiously held a full hearing to develop the facts

it and the parties there- involved deemed necessary

for inclusion in a NEPA statement after the Commis-

sion was firmly ordered by the court in that case

to comply with NEPA. Also, the Commission reg-

ularly holds hearings in rate increase proceedings

under Section 15(7) of the Interstate Commerce Act,

so there is nothing strange or unusual about the Dis-

trict Court’s hearing directive to the Commission in

the instant Section 15(7) case. Finally; this Court

denied certiorari in Green County Board, supra, where

the Second Cireuit ruled, at 455 F.2d 422, just as the

District Court has now done in the case at bar:

“«,. [W]e conclude that the Commission was in

violation of NEPA by conducting hearings prior to

the preparation by its staff of its own impact state-

ment... ,

«|, [T]he [impact] statement may well go to

waste unless it is subject to the full scrutiny of the

hearing process... .”’

| CONCLUSION

19

The motion to dismiss or affirm should be granted.

Respectfully submitted :

> Epwarp L. MERRIGAN

Attorney for Appellees

National Association of

Recycling Industries, Inc.,

Commercial Metals Co., I. V.

Sutphin Co. & Frankel

Brothers & Co. Inc.

: 888 17th Street, N.W.

Washington, D.C. 20006

te : PGES LOA IE BS BLIP AIRE LPIA EI LAE BOLSTER:

att cocunaspantseeegneenenene ee ney SR,

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4

APPELLANTS

REPLY BRIEF

5 AEGEAN ae

3 pvt a . ry, wr - . ae ee On

Be A Ek a ne oeane tes gets ee Sil aS RAD ILE ILE ALLIS

By Os Wee ethe cael e eae oe ; ” F ; ; pe AF EO ahah ALDER EEA A NIST et 0h

. y Sie, Serta ere Suhre Pao .

No. 73-1966

IN THE

Supreme Court of the United States

OcTOBER TERM, 1974

ABERDEEN AND RockFIsH RAtLRoap Company, et al.,

Appellants,

Vv.

1 al

STUDENTS CHALLENGING RrGauLatory AGENCY

Procepures (8.C.R.A.P.), et al.,

Appellees,

be

ON APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

REPLY OF THE ABERDEEN AND ROCKFISH RAILROAD

COMPANY, ET AL.

nS

T. A. MILLER CHARLES A, Horsky

Southern Pacific : MicHagEL BoupIN

Transportation Co. WALTER HELLERSTEIN

One Market Street 888 Sixteenth Street, N.W.

San Francisco, Calif. 94105 Washington, D. C. 20006

Apert B. Russ, Jr. Epwarp A. KAIrEer

Seaboard Coast Line 1600 Three Penn Center

Railroad Philadelphia, Pa. 19102

P. 0. Box 27581 Figen 4, Wield

a ,. 9396 . I Pe ‘a A

Richmond, Va. 1 P.O. Box 1808

Washington, D.C. 20013 |.

Attorneys for Aberdeen

and Roackfish Railroad

Company, ct al.

August 1974

Page

nn, CANES ESL S SEER TOE Ne, ean eet een a 1

ES STE OIG IN Ia a SR 21

TABLE OF CASES

Cases :

Alabama Power Co. v. United States, 316 F. Supp. 337

(D.D.C. 1970), aff’d by an equally divided shoe y

oe 12

Algoma Coke & Coal Co. v. United States, 11 F. Supp.

IN ND 8s os oe hdd kc oon voe kccs 17

Atlantic City Elec. Co. v. United States, 306 F. Su p.

338 (S.D.N.Y. 1969), Oy by an equally divided

eee Oe Oe CU... fin. c.s 12

Ayrshire Collieries Corp. v. United States, 331 U.S.

NE As logis ce Non ice cs es 7

Chicago, M., St. P. d P. R.R. v. United States, 366 U.S.

kes Ee eee PEROT ene ye Cue 3

City of New York v. United States, 337 F. Supp. 150

Es RS EE AEs, BARI 18

City of New York v. United States, 344 F. Supp. 922

I eae, iid ycceeiys cs 18

Electronic Industries Ass’n v. United States, 401 U.S.

WE OUND i hen edeees casein oe 12-14, 16-17

Gulf R. € D. Co. v. Schlumberger Well Sur. Corp., 92

wae 6 (6.0, Cal 1000) .... .- 0. occa 10

Gunn v. University Committee to End the War, 339

14

Lambert Co. v. Baltimore & O. R.P., 258 U.S. 377

I Bao oe ibs ib ioscdiuss Midc css 11

‘ii Table of Contents Continued

Page

Rorick v. Board of Comm’rs, 307 U.S. 208 (1939) .... 14

Schaffer Transp. Co. v. United States, 355 U.S. 83

i. 5 BPEL ET TOUTE TIT TTT CETL Teer eee 3

Stainback v. Mo Hock Ke Lok Po, 336 U.S. 368 (1949) 9

‘ United States v. Griffin, 303 U.S. 226 (1938) .......... 11

United States v. National City Lines, 337 U.S. 78 (1949) 9

United States v. Railway Express Agency, 101 F.

Supp. 1008 (D. Del. 1951) ................. 00 ee ll

United States v. Ryder, 110 U.S. 729 (1884) ......... 9-10

United States v. SCRAP, 412 U.S. 669 (1973) ........ 17

Venner v. Michigan Central R.R., 271 U.S. 127 (1926) 11

ICC Procerepinos : r

Ex Parte No. 270, 340 I.C.C. 868 (1971) ..........05. 19-20

Bis Pate Be. TE nv ciiecnwunncecncesestcevsesssass 19

SraruteEs:

Expediting Act of 1903, 32 Stat. 823 ................ 5

Hepburn Act of 1906, 34 Stat. 589... 0... cece cece 45

Interstate Commerce Act:

SeotionWS, GOIIS.C. 15 .. 0... ccc ccc cece ween 16

Section’ 15(2), 49:.S.C. §15(2) ..............0.8. 13

National Envitonmental Policy Act, Section 102(2)(C),.

48 U.S.C. B 43323(2)(C)- 0. ccc cc ccnccecens 16-20

Urgent Deficiencies Act of 1913, 38 Stat. 208 ...... 4-7, 9-11

28 U.S.C. §§ 47, 47a €1940) ...c. ccc cece eee ees 7-9

28 U.S.C. §§ 380, 3802 (1940) ........... vinecerwes 9

28 U.S.C. 5 Serer rer rere 2, 8-10

SUM BE aacscnrdanseenciesscanssuesscnsesses ®

kh So ere err rrea arr err 2, 7-8, 13

_ §is 1p er emerrerrrer TTT ererr eer 2, 8, 13

ok ie | rereee Teer erer re, re 2, 8,13

ae Fel Pree ror rerer ry rr ere eer 2, 8, 10, 13

Bid 1s) . Serr error rrr err Te 2, 8-10, ‘-

eee Teer eee er re eT rere

SN, BE sia kc eee one ca seenne ea taneeeyssnenesxcies 5, 15

ee eR, GO x uk one hae nse aed ahenewnnshedsaecaivens

Table of Contents Continued . iii

Page

MISCELLANEOUS;

W. Barron, ‘‘The Judicial Code—1948 Revision,”’

8 F.R.D. 439 (1949) 2.00. 10

Burstein, ‘‘Judicial Review of ICC Orders,”’ 38 ICC

Prac. J. 174 (1971) 2... cece ee. 4

Federal Rule of Civil Procedure 62 ................. 13

Sy SENN Sa a Ot ee Se: SO ee, a Fo Ce ee eee Coe a a ee eae ee eee eae ee oe

IN THE

| Supreme Court of the Huited States

OcroBER TERM, 1974

No. 73-1966

ABERDEEN AND ROCKFISH RAILROAD CoMPANY, e¢ al.,

Appellants,

Vv.

STUDENTS CHALLENGING REGULATORY AGENCY

ProcepureEs (8.C.R.A.P.), et al.,

Appellees.

ON APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

REPLY OF THE ABERDEEN AND ROCKFISH RAILROAD

COMPANY, ET AL.

1. In opposing the appeals taken by the railroads

(No. 73-1966) and the Government (No. 73-1971), the

main contention of each of the three sets of appellees is

that this Court lacks. jurisdiction to entertain direct

appeals from the order entered by the three-judge dis-

trict court.’ Appellees’ legal position is directly con-

1 See motion to dismiss or affirm of EDF et al., pp. 2-6; motion

to dismiss or for summary affirmance of NARI et al., pp. 12-13;

and motion to dismiss of ISIS, pp. 2-3.

° , i.

2

trary to decades of settled practice under the statutes

here involved, and it is squarely refuted by the legisla-

tive history of the relevant statutes which is nowhere

mentioned in appellees’ motions. Indeed, as we show

below, only a few years ago this Court considered and

appears to have unanimously rejccted the purported

legal distinction that is the basis of the appellees’ ju-

risdictional argument here.

It is beyond-dispute that, under the governing stat-

utory provisions, an order of a district court ‘‘enjoin-

ing’? an ICC order (other than an ICC order for the

payment of money) can be issued only by a district

court of three judges? and such a district court order

is directly appealable to this Court.* In this case a

three-judge district court entered an order setting aside

two ICC orders, stating expressly that the two orders

were ‘‘vacated’’ (Gov. J.S. 2b), and the Government

and the railroads filed direct appeals to this Court.

Thus, the gist of the appellees’ motions is that, while

a district court order enjoining an ICC order ‘must

2 Under 28 U.S.C. § 2821, the provisions of 28 U.S.C. §§ 2322-25

govern all district court actions ‘‘to enforce, suspend, enjoin, annul

or set aside in whole or in part any order’’ of the ICC; the only

exception, which is not here relevant, is for ICC orders for the

payment of money, including fines, penalties or forfeitures. Sec-

tion 2325 provides that ‘‘[a]n interlocutory or permanent injunc-

tion restraining the enforcement, operation or execution, in whole

or in part, of any order’’ of the ICC shall not be granted ‘‘ unless

the application therefor is heard and determined by a district

court of three judges... .”’ e

3 Under 28 U.S.C. § 1253, except as otherwise provided by.law,

any party may appeal to this Court ‘‘from an order granting

or denying, after notice and hearing, an interlocutory or perma-

nent injunction in any civil action, suit or proceeditig required

by an Act of Congress to be heard and determined by a district

court of three judges.’’

ees TASE:

be heard by a three-judge district court and is directly

appealable here, an order of a three-judge district

court which sets aside an ICC order is distinguishable

and is not subject to direct appeal in this Court.

- provisions, buttressed by years of consistent practice

in this Court, refutes any such attempted distinction:

that history shows that Congress intended from the

outset that orders of the ICC would be reviewable by

|

The legislative history of the pertinent statutory

three-judge district courts and that orders of such

courts invalidating (or refusing to invalidate) the

ICC’s orders would be subject to direct appeal to this

Court. Moreover, Congress intended these require-

ments to apply whenever direct review of ICC orders '

was sought and without regard to whether the district

court’s own order was styled ‘as an order enjoining

the agency’s order, setting it aside, or invalidating it

in any other equivalent terms.. For years, these

| premises have been accepted as settled by this Court,

by commentators, by Congress and by the ICC itself.

As described more fully below, the requirement of

a three-judge district court and direct Supreme Court

review in actions seeking review of ICC orders—in-

cluding actions to ‘‘set aside’’ such orders—originated

in 1913 and has been maintained to the present time.

In any number of cases, this Court has considered

~ direct appeals from three-judge district courts in

actions described by this Court as ones to ‘‘set aside”’

ICC orders. E.g., Chicago, M., St. P. & P. R.R. v.

United States, 366 U.S. 745, 746 (1961); Schaffer

Transp. Co. v. United States, 355 U.S. 83, 87 (1957).

A leading treatise writer on federal practice has sum-

| marized the law by describing, as a paradigm case

appropriate for a three-judge court, ‘‘a suit to set

x ‘i ER agg SG ~ Se ee Qed Car ay > eye’) BPA 4

a

4

aside an Interstate Commerce Commission order.’’ -

C. Wright, Federal Courts 191 (2d ed. 1970). See also

Burstein, ‘‘Judicial Review of ICC Orders,’’ 38 ICC

Prac. J. 174, 181 (1971).

In recent hearings on a bill proposing to transfer

review of ICC orders to the courts of appeals, the

author of the bill, Senator Hruska, said that ‘“‘[a]t >

present, the judicial review of Interstate Commerce

Commission orders is under the jurisdiction of three-

judge district courts’’ and ‘‘[t]he decisions of such

courts are reviewable in the Supreme Court by ap-

peal.’”? The Deputy Assistant Attorney General in

charge of the Antitrust Division (which ordinarily rep-

resents the United States, the statutory defendant in

ICC review proceedings), said that ‘‘[s]Jince the

adoption of the Urgent Deficiencies Act of 1913, orders

of the Commission, except those for the payment of

money, have been reviewed in the U.S. district courts

by panels of three judges .... Appeals from these

statutory three-judge district courts lie directly to the

Supreme Court and are a matter of right.’’ The Chair-

man of the ICC in his prepared statement said that

‘¢[j]udicial review of orders of the Interstate Com-

merce Commission ... is by a U.S. District Court of

three judges . . . with the decisions of these three-

judge courts reviewable in the Supreme Court by ap-

peal... .’’*

Legislative history squarely confirms this generally

accepted construction. of the law. The Hepburn Act

* Hearing on 8. 3597 before the Subcommittee on Improvements

in Judicial Machinery of the Senate Judiciary Committee, 91st

Cong., 2d Sess. 1, 3, 17 (1970). See also id. at 27 (American Bar

Association), 29 (Association of American Railroads), 32 (Motor

Carrier Lawyers Association), 35. (Chief Judge Phillips of the

Sixth Circuit), 35 (Association of ICC Practitioners), 36 (National

Industrial Traffic League), 38 (American Trucking Associations).

—_

3)

of 1906 made ICC orders self-executing, and accord-

ingly provided for judicial review of the orders. 34

Stat. 589, 592. At this time, there already existed the

Expediting Act of 1903 (32 Stat. 823) which established

jurisdiction and procedures by which a circuit court

of three judges heard certain types of antitrust cases

and appeals were taken directly to the Supreme Court.

This three-judge court procedure, with direct appeal

to the Supreme Court, was made applicable by the

Hepburn Act to actions to ‘‘enjoin, set aside, antiul or

suspend any order or requirement of the Commission

...’? 34 Stat. 592. Thus, the convocation of a three-

judge court and direct review of its decision in this

Court was not dependent on a request for injunctive

relief. The three-judge court and direct review pro-

cedures in ICC cases originated independently of the

procedures for three-judge courts and direct Supreme

Court review in suits to enjoin the enforcement of

statutes alleged to be unconstitutional, which did not

develop until 1910. 36 Stat. 557.

After the brief experiment with review of ICC or-

ders by the Commerce Court, constituted especially

for that purpose (36 Stat. 539), the Urgent Deficiencies

Act of 1913 (38 Stat. 208, 219) reinstituted review by

three-judge courts. The Urgent Deficiencies Act pro-

vided in relevant part as follows:

> *“‘No interlocutory injunction suspending or re-

straining the enforcement, operation, or execution

of, or setting aside, in whole or in part, any order

made or entered by the Interstate Commerce Com-

mission shall be issued or granted by any district

court of the United States, or by any judge thereof,

or by any circuit judge acting as district judge,

unless the application for the same shall be pre-

sented to a circuit or district judge, and shall be

6

heard and determined by three judges, of whom at

least one shall be a circuit judge, and unless a

majority of said three judges shall concur in

granting such application. ... An appeal may

be taken direct to the Supreme Court of the United

States from the order granting or denying, after

notice and hearing, an interlocutory injunction,

in such ease if such appeal be taken within thirty

days after the order, in respect to which complaint

is made, is granted or refused; and upon the final

hearing of any suit brought to suspend or set aside,

in whole or in part, any order of said commission

the same requirement as to judges and the same |

procedure as to expedition and appeal shall apply.

‘A final judgment or decree of the district court

may be reviewed by the Supreme Court of the

United States if appeal to the Supreme Court be

taken by an aggrieved party within sixty days

after the entry of such final judgment or decree,

and such appeals may be taken in like manner as

appeals ave taken under existing law in equity

eases.”’? 38 Stat. 220 (emphasis supplied).

Plainly, under this language a suit such as the present

one, which resulted in setting aside orders of the ICC,

would require a three-judge district court and the dis-

‘trict court’s order granting or denying relief would be

subject to direct review in this Court. As shown below,

_ Congress has never indicated any intent to change the

substance of the Urgent Deficiencies Act on this issue

despite rephrasing of its language in the course of

codification.

The Urgent Deficiencies Act not only demonstrates

Congress’ intent under that statute that three judges

preside over actions to set aside ICC orders and that

their grant or denial of such relief be directly review-

able in this Court, but also that Congress did not re-

- > _

4

gard enjoining ICC orders and setting them aside as

separate concepts. Thus, the first sentence of that

statute quoted above contemplated that three judges

might grant an ‘‘interlocutory injunction . . . setting

aside’”’ an ICC order. Such an injunction might itself

be an incident of a suit to ‘‘set aside’’ finally the ICC

order, for which three judges were again required. In

Ayrshire Collieries Corp. v. United States, 331 U.S.

132, 141 (1947), this Court confirmed that to enjoin

and set aside ICC orders were essentially interchange-

able concepts; there it described the final hearing

clause of the Urgent Deficiencies Act—which in terms

refers to ‘‘any suit brought to suspend or set aside”’ an.

ICC order—as embracing any suit ‘brought to enjoin

the enforcement of a Commission order.”

The Urgent Deficiencies Act provisions here involved

remained in effect from 1913 to 1948.° In 1948, as part

of the revision of Title 28 and its enactment into posi-

tive law (62 Stat. 869), the Urgent Deficiencies Act

provisions were revised, but no intent whatever ap-

pears to alter their meaning, scope and purpose so far

as concerns the three-judge court requirement for re-

view of ICC orders and the provision for direct review

in this Court. As a result of the revision, whose per-

tinent language remains unchanged today, Section

2321 of Title 28 provided that the procedure in district

courts in ‘“‘actions to enforce, suspend, enjoin, annul

or set aside in whole or in part’’ any ICC order except

orders for payment of money, fines, penalties or for-

feitures ‘‘shall be as provided in this chapter.’’ Sec- ,

5In the intervening period the provisions were incorporated,

without relevant change in language, into the various codifications

of Title 28 which were not, in any event, positive law. E.g., 28

U.S.C. §§ 47, 47a (1940).

—S

i

8

tion 2325, the final section in the ‘‘chapter’’ refered

to in Section 2321, required three judges for ‘‘irter-

locutory or permanent injunctions restraining the en-

forcement, operation or execution, in whole or ir. part,

of any order’’ of the ICC. Section 1253 conso.idated

provisions for direct appeals from three-judge district

courts by providing that orders of such courts grant-

ing or denying interlocutory or permanent injunctions

were subject to direct review in this Court.

As appellees in this case seek to read the 1948 re-

vision, Congress would for the first time have intro-

duced a subtle and pointless distinction between actions

to enjoin ICC orders and all other actions seeking

directly to invalidate such orders. While an action to

‘‘suspend”’ or to ‘‘annul’’ or to “‘set aside’? an ICC

order would be subject to the requirement of the

chapter that the action be brought against the United

States (Section 2322), to the provision of the chapter

governing intervention by the ICC and other parties

(Section 2323), and to the provision granting the re-

viewing court stay powers (Section 2324), only an

action to ‘‘enjoin’”’ an order would be heard and deter-

mined by a court of three judges under Section 2325

or would be subject to direct appeal to this Court un-

der Section 1253. |

The legislative history of the 1948 revision which

produced Section 2325 and Section 1253 makes it

patent that ho such drastic change was ever contem-

plated either by the revisers or by Congress. The

reviser’s note to Section 2325 discloses inter alia that

it derived from ‘‘title 28, U.S.C., 1940 ed., § 47, (Oct.

®There is certainly no difference in practical effect. between '

enjoining an ICC order and setting it aside. In both cases, the

result is that on judicial review the order has been invalidated.

9

22, 1913, ch. 32, 38 Stat. 220),’’ which is the Urgent

Deficiencies Act,* and that the provision for direct

appeal to the Supreme Court in three-judge cases was

located in Sections 1253 and 2101 (which fixes the time

for appeal). The reviser’s note to Section 1253 states

pertinently that ‘‘[t]his section consolidates the pro-

visions of sections 47, 47a, 380, and 380a of title 28,

U.S.C., 1940 ed., relating to direct appeals from

decisions of three-judge courts involving orders of the

Interstate Commerce: Commission or holding State’ or

Federal laws repugnant.to the Constitution of the

United States.’’ Nothing in the reviser’s notes shows

any intent whatever to vary the scope of cases in- »

yolving ICC orders to which the three-judge require-

ment or direct appeal provisions apply.

The reviser’s notes are authoritative in the con-

struction of the 1948 revision. * Accordingly, the con-

struction here of Sections 2325 and 1253 is governed by

the long-standing principle of United States v. Ryder,

110 U.S. 729, 740 (1884), that ‘‘ [i]t will not be inferred

that the legislature, in revising and consolidating the

laws, intended to change their policy, unless such in-

tention be clearly expressed.’’? The chief reviser of

the 1948 revision of Title 28 confirmed that this prin-

ciple expressed the intention of the revisers, stating:

‘“‘Because of the necessity of consolidating, simplifying

7 The reviser’s note stated Both that Section 2325 was based on

Section 47 and that it was based on the first sentence of Section 47.

The first sentence of Section 47 related only to interlocutory relief

while Section 2325 explicitly covers both interlocutory and perma-

nent relief. The reviser’s reference to the first sentence of Section

47 can reasonably be understood to mean that certain language

from that sentence was utilized in phrasing Section 2325.

§ United States v. National City Lines, 337 U.S. 78, 81, 82 (1949); |

Stainback v. Mo Hock Ke Lok Po, 336 U.S. 368, 376 n.12 (1949).

—y

10

and clarifying numerous component statutory en-

actments no changes of law or policy will be presumed

from changes of language in revision unless an intent

to make such changes is clearly expressed.’’ *

The magnitude of the change that would be worked

by reading Sections 2325 and 1253 as inapplicable to

actions to set aside ICC orders is itself the surest proof

that no such change was intended sub silentio by the

revisers or by Congress. Virtually every case seeking

to enjoin an ICC order could as readily be cast as a

suit to set it aside and brought before a single judge no

matter how critically important the order. Indeed, if

the Urgent Deficiencies Act as well as Section 2325

were to be read in wholly mechanical fashion, the

change effected by the new section would be 180

degrees: for, in terms, the Urgent Deficiencies Act

applied the three-judge requirement to final hearings of

actions to ‘‘suspend or set aside’? ICC orders and not

to actions to enjoin such orders. *°

®W. Barron, ‘‘The Judicial Code—1948 Revision,’’ 8 F.R.D.

439, 445 (1949). Barron cited Ryder and numerous subsequent

decisions of this Court to the same effect. Id. at 446-48. Accord,

Gulf R. & D. Co. v. Schlumberger Well Sur. Corp., 92 F. Supp.

16, 18 (S.D. Cal. 1950) (quoting Barron).

10 Were Section 2325 now construed so literally as to allow a

single judge to decide actions to set aside ICC orders, at least one

other anomaly would arise so odd and contrary to history as to

preclude this construction. Section 2324 empowers the reviewing

court to ‘‘restrain or suspend . . . the operation of”’ the ICC order

under review pending a final determination ; and under any con-

struction of Section 2325, its requirement of three judges for an

‘*interlocutory ... injunction ... restraining the . . . operation’’ of

an ICC order would apply to such a temporary restraint or sus-

pension. The strange consequence woyld be that in an action to

_ set aside an ICC order, pendente lite yelief could be granted only '

by three judges but ultimate relief eguld be granted by a single * —

judge. :

_

The review of the generality of ICC orders by one-

judge district courts would also be contrary to the long-

established Congressional policy reflected in the

Urgent Deficiencies Act. By providing for three-

judge review followed by direct appeal, ‘‘Congress

sought to guard against. ill-considered action by a

single judge and to avert delays ordinarily incident to

litigation,”’ in cases having the public importance and

widespread effect of non-money ICC orders. See

United States v. Griffin, 303 U.S. 226, 233 ( 1938).

Use of one-judge district courts to review ICC orders

has always been narrowly limited, principally to eases

involving review of money orders. Indeed, the courts

have been alert to insure that actions which in. sub-

stance seek to set aside non-money ICC orders are

heard in three-judge courts, even though the com-

plaining parties otherwise described their actions. ™

ee: 11

Given the uniform practices of courts and the un-

. varying policy of Congress to maintain three-judge

review of ICC orders and direct appeals to this Court

during the many years prior to the 1948 revision of

Title 28, it would be bizarre indeed to conceive that

the revisers, without any mention of the point or the

barest notice to Congress, intended to curtail dras-

tically this procedure. Moreover, as noted at the

outset of this discussion, in the 26 years since 1948 this

Court, lower courts, commentators, legislators and

lawyers have all continued to regard the pertinent law

™! Thus, three judges are required in actions brought to enjoin

‘private parties from conduct directed or authorized in ICC orders

where indirectly these actions impeach the Commission’s orders.

See Lambert Co. v. Baltimore & O. R.R., 258 US. 377, 381-82

(1922); Venner v. Michijan Central R.R., 271 US. 127, 130

(1926) ; United States v. Railway Express Agency, 101 F. Supp.

1008, 1012 (D. Del. 1951).

12

as unchanged. Even the recent consideration in

Congress of bills to alter the governing statute, in a

way that would retain three-judge review of ICC

orders, but eliminate certain inconveniences by trans-

-ferring review to the courts of appeals, has proceeded

on the assumption that at present actions to set aside

ICC orders are reviewable in three-judge district

courts followed by direct review in this Court. See

p. 4, above. |

Finally, it appears that this Court only recently

determined, in the course of deciding Electronic Indus-

tries Ass’n v. United States, 401 U.S. 967 (1971), that

there was no jurisdictional difference between an

action to enjoin and am action to set aside an ICC

order, so that a decision by a three-judge district

court setting aside or refusing to set aside an ICC

order is directly reviewable in this Court, however the

district court’s order may be couched. The Electronic

Industries case was pending here when this Court by

a four-to-four vote affirmed decisions of two three-

judge district courts that ICC general revenue orders

are not reviewable, even where the attacks are

directed to the ICC’s general revenue findings and not

to the increases on particular classes of rates.”

Electronic Industries also involved attacks on the

same general revenue orders involved in the other two

eases, but unlike those two cases, the attacks in

Electronic Industries were clearly and exclusively

directed not to the general revenue findings but to the

rate increases on particular groups of commodities,

” Atlantic City Elec. Co. v. United States, 306 F. Supp. 338 .

(S.D.N.Y. 1969), and Alabama Power Co. v. United States, 316

F. Supp. 337 (D.D.C. 1970), both aff’d by an equally divided

Court, 400 U.S. 73 (1970).

naa

13

1.€., certain radio, television and other electronic com-

ponents or accessories. 310 F. Supp. at 1287.

After the first two decisions were affirmed by an

equally divided Court, this Court.turned to the Elec-

tronic Industries case and directed the parties to sub-

mit supplemental memoranda on two further, related

questions that are pertinent here.** In substance,

/ these questions posed the issue whether a suit to enjoin

ICC orders is precluded by the availability of a suit to

set them aside and, if so, whether the latter suit would

have to be tried to a three-judge district court. If

both questions were resolved in the affirmative, this

might have led this Court to remand the appeal on the

grounds the suit should have been brought before a

one-judge court with review in the court of appeals.

All the parties to the case—the appellant Electronic

Industries Association, the United States and the ICC,

and the railroads—submitted memoranda agreeing

that the questions had to be answered in the negative.

Setting forth the legislative history which is repeated

above, the memoranda concluded that there was no

pertinent distinction between actions to enjoin and

actions to set aside ICC orders and that such actions

.

18 The questions, posed by letters from the Clerk to the parties

on January 21, 1971, were as follows:

“In light of 49 U.S.C. § 15(2), 28 U.S.C. §§ 2321-2325, Fed.

Rule Civ. Proe. 62, and other 2pplicable provisions of Titles

28 and 49 of the United States Code:

1. Is injunctive relief precluded by the availability of an

adequate remedy in an action to set aside the ICC orders

which appellant sought to enjoin?

2. Must an action to set aside an ICC order be heard and

determined’ by a three-judge court?”’

14

were in both instances subject to the three-judge court

requirement. '* This Court did not remand the appeal ;

rather it unanimously affirmed the district court’s

judgment by an eight-to-zero vote."* This Court nec-

essarily acknowledged its jurisdiction over the appeal

by affirming rather than remanding, and it did so.after

a full consideration of legislative history set forth

above. The Court similarly has jurisdiction to enter-

tain the present appeals. “

Appelleestin their motions to dismiss ignore the leg-

islative history of the statutory provisions relating to

ICC orders and rest principally upon decisions con-

struing the statutory provisions involving injunctions

against unconstitutional statutes."* Both the legis-

lative development of these latter provisions and the

policies underlying them are different than those re-

14The United States and ICC confined their memoranda to

these issues. The railroads discussed these issues at length but

also contended that, without regard to the questions posed, no

one had been prejudiced by the court proceedings and that a

one-judge district court, like a three-judge district court, would

have been bound to dismiss the complaint.

15 Tt should be pointed out that the district court’s order in

that case, like the order of the district court in the present case,

was not literally couched in terms of an order granting or denying

an injunction. As the opinion in Electronic Industries shows, the

eourt euncluded by ordering that ‘‘the action is dismissed.’’ 310

F. Supp. at 1289.

16 F.g., Public Service Comm’n v. Brashear Freight Lines, Inc.,

306 U.S. 204 (1939); Mitchell v. Donovan, 398 U.S. 427 (1970) ;

Kennedy v. Mendoza-Martinez, ‘372 U.S. 144 (1963); Gunn v.

University Committee to End the War, 399 U.S. 383 (1970) ; Phil-

lips v. United States, 312 U.S. 246 (1941); Rorick v. Board of

Comm’rs, 307 U.S. 208 (1939).

PE EE ee eet ee Cae e i se a A Sine Se i nd

15

lating to the review of ICC orders.'’ Unlike the

narrow construction given to the latter provisions, the

provisions requiring three judges to review ICC orders

and allowing direct appeals from such decisions buve

always been construed generously. See p. 11. :pove. |

In sum, the cases and arguments advanced by appellees

do not even begin to raise any jurisdiction! doubts:

legislative history, past practice of this Ceurt, and the

common understanding of scholars aud legislators

confirm that the validity of ICC orders must be

determined by three-judge district courts and orders

of such courts sustaining or setting aside such ICC

orders are subject to direct appeal to this Court. '®

2. Appellees contend that, assuming that this Court

does have jurisdiction over the appeals of the railroads

and the Government, the substantive issues raised in

the jurisdictional statements do not require plenary

consideration and the district court’s decision should

be summarily affirmed on all points. The jurisdic-

17 Whereas the legislative history of the provisions relating to

ICC orders shows that they were designed to embrace actions to

invalidate ICC orders however the actions might be denominated,

the legislative history of the provisions relating to unconstitutional

statutes shows that they have always been couched to embrace only

actions seeking injunctive relief. See, ¢.g., 36 Stat. 557; Kennedy

v. Mendoza-Martinez, supra, 372 U.S. at 154-55.

18 Although the clear propriety of review in this Court makes

the point academic, it should be noted that appellees would not on

any view of the matter be entitled to dismissal of the appeals. Even

if this Court decided that the district court’s order here was not

direetly appealable to this Court, the established remedy would

be to ‘‘vacate the judgment below and remand the case’’ so that

the district court could enter a new order and afford appellants

the opportunity to take a timely appeal to the court of appeals.

See Mitchell v. Donovan, supra, 398 U.S. at 431-32 & n4 (citing

authorities).

— —— SRE ES len ~

16

tional statements of the railroads and the Govern-

ment showed at length that the questions presented

are substantial, recurring, and of great practical

significance both for the agency and for the rail trans-

portation system. In light of this showing, it is nec-

essary to comment only briefly_on the main contentions

made by the appellees. .

In the first question presented for consideration by

this Court, the railroads urged that under a long-

standing line of decisions in the district courts the

lower court in this case lacked authority to review

general revenue orders of the ICC. The railroads

noted that this view was supported by this Court’s own

recent eight-to-zero affirmance in the Electronic Indus-

tries case which, like the present case, involved an at-

tack on a particular category of rates. The lower

court’s departure from this settled. principle is not

only unnecessary and unwarranted but threatens to

delay the administrative process and to inflict serious

and irreparable harm upon the railroads. See R.R.J.S.

18-22.

In response, EDF asserts that prior cases holding

general revenue orders to be unreviewable involved

plaintiffs who had available remedies under Section

13 of the Act, 49 U.S.C. § 13, to challenge the lawfulness

of individual rates or rate groups. EDF motion 7-8.

The appellees in this case, however, are no less in-

terested in a particular category of rates, rates on

recyclable commodities, and such rates are equally

subject to complaint and investigation under Section

13. EDF also asserts that it is not seeking an altera-

tion of individual rates but enforcement of the ICC’s

duties under NEPA. The distinction is semantic:

prior attempts to review general revenue orders have

similarly been premised on claims that the Commis-

dl

sie —- PS ELPA SPE LOE IYI PE IE

. . RIT REEL IIT EE SY IRE LER

a Ke a Ti " io

17

sion’s action was inconsistent with statutory stand-

ards,’® and EDF’s objective, no less than in prior

attacks on general revenue orders, is simply to secure

lower rates on the commodities in which it asserts an

interest.

The lower court’s opinion in this case amply reveals

that the linchpin of ‘its claimed authority to review

general revenue orders is its view that NEPA has

altered preexisting jirisdictional or procedural limi-

tations. See 371 F. Supp. at 1297-98. In the rail-

roads’ submission, this is directly contrary to what this

Court held in SCRAP in considering the closely-

related issue of the lower court’s claimed authority to

enjoin railroads rates pending the outcome of ICC

‘general revenue proceedings. 412 U.S. at 694-95. In

all events, in the face of the established line of district

eourt decisions already referred to, the eight-to-zero

ecision in Electronic Industries Ass’n, and the de-

termination made by this Court in SCRAP, the ques-

tion of the lower court’s authority to review general

revenue orders certainly presents a substantial ques-

tion that makes summary disposition of the appeal here

inappropriate. ” .

See, ¢.g., Electronic Industries Ass’n v. United States, supra,

310 F. Supp. at 1288-89 ; Algoma Coke &: Coal Co. v. United States,

11 F. Supp. 487, 482 (E.D. Va. 1935).

20 ISIS in its motion (p. 7) asserts that it is ““unnecessary’’ for

this Court to reach this issue because allegedly ‘NEPA review

of general revenue orders is unlikely to be a recurring issue... .”’

In fact, the issue is inevitably going to be recurring, until resolved

by this Court, because of the frequency of general revenue proceed-

ings (see R.R.J.S. 22) and the economic interest of the shippers

in opposing rate increases despite railroad cost increases. More-

over, this case involves a direct appeal in which the lower court’s

authority to act and the validity of its decision are necessarily

presented.

<r

18

A second important question for review arises from

the lower court’s disapproval f the Commission’s

extensive and detailed environmental impact statement

in this case which, as the lower court acknowledged,

met ‘‘the prescriptions of NEPA as to form.’”’ 371

F. Supp. at 1301. The railroads’ jurisdictional state--

ment asserted that the lower court’s action went far

beyond the permissible limits of judicial review by

substituting the court’s judgment on substantive issues

for that of the agency and in virtually dictating the

course of proceedings on remand. The railroads also

directed attention to the continuing importance of the

questions whether impact statements are reviewable on

substantive grounds and if so, under what standard,

and to the division of authority on these questions in

the lower courts. *

The main response of all the appellees is that the

lower court in this case limited its review to de-

termining the ‘‘procedural adequacy’”’ of the impact

statement.” This contention is answered by even a

brief examination of the lower court’s opinion. In

detailed criticism on the substance of the ICC’s impact

7! NARI’s motion (pp. 7, 14) places special emphasis upon

City of New York v. United States, 337 F. Supp. 150 (E.D.N.Y.

1972), which required an environmental impact statement in a

railway abandonment proceeding where no such statement had

been prepared. In the present case, however, a detailed impact

statement has been prepared; and the pertinent decision is the

court’s second opinion in City of New York, 344 F. Supp. 929,

sustaining the impact statement and emphasizing the very limited

office of judicial review once the impact statement has been fur-

nished.

2 E.g., EDF motion 10. See also ISIS motion 9; NARI motion

15.

\

“

19

», statement, the court faults the statement on the alleged

grounds that it does not accept arguments of the en-

environmentalists (371 F. Supp. at 1302); does not

offer ‘‘any rigorous price sensitivity studies of its

own’’ (id: at 1303) ; omits ‘any comprehensive alterna-

tive analySis of the relative cost contribution of sec-

ondary and primary materials”’ (id.); does not re-

spond to a-particular statement made in a particular

study propounded by ISIS (id.); does not contain an

analysis ‘‘oF how the underlying rate structure itself

affects the environment” (id. at 1304) ; and omits ‘‘an

elasticity study’’ favored by the lower court (id. at

1305). Apart from the lack of support for these

criticisms (see, e.g., R.R.J.S. 24 n. 31), they do not

square with any claim that the court’s review was

merely-‘‘procedural.”’

One related contention made by the lower court is

repeated with great vigor in the motions of both EDF

and ISIS. Noting that the Commission focused

primarily on the environmental impact (if any) of the

rate increases involved in Ex Parte No. 281 and that

it is investigating the rate structure itself in Ex Parte

No. 270, EDF’s motion (pp. 12-14) asserts that this

amounts to a claim that the Commission may decide

for itself when it will comply with NEPA. See alsa

ISIS motion 7-8. The Commission’s approach, which

is the only feasible one (see Gov. J.S. 14-16), is

entirely consistent with NEPA. The statutory lan-

guage, ignored by appellees, requires an impact state,

ment addressed to the ‘‘proposed action’? before the:

agency (Section 102(2)(C)), and this surely requires

that the Commission’s environmental impact analysis

20

focus primarily upon the particular rate increase in-

volved in the proceeding.*

Finally, in discussing the single truly ‘‘procedural’’

issue in the case, the lower court declared an environ-

mental impact statement must be prepared not only

prior to the agency’s decision, but also prior to a

hearing, even though no decision is made at the hearing

stage. This is directly inconsistent with the language

of NEPA which requires only that the agency’s decision

‘‘inelude’’ an impact’ statement in appropriate cass

The statutory language that the impact statement sha

“aceompany’’ the proposal through ‘‘existing agency

review processes’’ simply has no application where, as

here, there is only one decision-making stage involved

_ in the proceeding and no subsequent ‘‘agency review

processes’’ exist.

On this point the appellees largely confine them-

selves to asserting that the lower court was correct and

make no effort to come to grips with the language of

NEPA or the fact that general revenue proceedings

involve only one decision-making stage. They do

contend that the request for review on this point merely

seeks an ‘‘advisory’’ opinion on this issue. E.g., ISIS

motion 12. This contention is clearly mistaken since

the lower court specifically relied on the lack of a

prehearing impact statement as a subsidiary basis for

invalidating the impact statement. 371 F. Supp. at

1300.

28 As the railroads previously noted (R.R.J.S. 24 n.31), the

Commission did in fact give attention to the underlying rate struc-

ture but, in view of Ex Parte No. 270, properly did not attempt to

turn the present general revenue proceeding into an extensive

discussion of all past and future ramifications of the rave struc-

ture for environmental interests.

21

The railroads demonstrated (R.R.J.S. 31-32) that

the lower court’s approach would require the Com-

mission to add an entirely new and complicating stage

to its general revenue proceedings.. Even under

existing practice, the Commission is often hard

pressed to complete such proceedings before the end of

the seven-month suspension period, and such delays

necessarily cause the railroads to lose substantial and

urgently needed revenues. Thus, the lower court’s

determination not only presents a serious legal issue

but also has immediate adverse consequences for the

efficient operation of the administrative process and

for the financial well being of the nation’s railroad

industry.

CONCLUSION

For the reasons stated, the Court should note prob-

able jurisdiction of the appeal.

Respectfully submitted,

T. A. MILLER CHARLES A. Horsky

Southerm Pacific MICHAEL BoupDIN

Transportation Co. WALTER HELLERSTEIN

One Market Street 888 Sixteenth Street, N.W.

San Francisco, Calif. 94105 Washington, D. C. 20006

ALBERT B. Russ, JR. Epwarp A. KAIER

Seaboard Coast Line 1600 Three Penn Center

Railroad Philadelphia, Pa. 19102

P. O. Box 27581

re JAMES L. TAPLEY

Richmond, Va. 23261 P. O. Box 1808

Washington, D.C. 20013

Attorneys for Aberdeen

and Rockfish Railroad

August 1974 Company, et al.