# Appellees Brief — Aberdeen & Rockfish R. Co. v. Students Challenging Regulatory Agency Procedures (SCRAP) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386414_0458%3A12 ## Record - **Collection:** Supreme Court brief - **Document type:** Appellees Brief - **Published:** January 1, 1975 - **Citation:** 422 U.S. 289 ## Text ~ Super Court af the Ruited States be ~ Oorosen Term, 1974 —_—E Nos. ents and 73-1971 a | Use STATES or Amsarica and Interstate COMMERCE Commission, Appellants ~ v. . » Srupents CHALLENGING RecuLatory AGENCY me: Procepurss (8.0.R.A.P.) Er Au., Appellees 7 _ ABERDEEN AND RockrisH Ramzoap Company, Er AL., Eau STUDENTS ees cae ReGvuLAToORY AGENCY Procepures (8.0.R.A.P.) Er Au., Appellees —— On’ Appeal from the United States District Court for the District of Columbia _ BRIEF FOR APPELLEES NATIONAL ASSOCIATION _ OF RECYCLING INDUSTRIES. INC.. COMMERCIAL METALS CO., L. V. SUTPHIN CO. AND FRANKEL BROS, & CO. INC. = Howano L. = ttorney pellees NARI et. mee 888 17th ie W. Washington, D. C. 20006 . oe s ottere eens eee BS 2G TABLE OF CONTENTS Page So Po cs a 2 I 5k elvis 5s eo ss fe kc ee 2 Gonstie Petawen ..- ooo ki 2 CounTER-STATEMENT OF THE CASE ................... 4 MN ig ears cick ik 22 I. This Court Lacks Jurisdiction Over Appellants’ Direct Appeals Under 28 U.S.C. § 1253. The © Appeals Should Therefore Be Dismissed ..... 22 II. The District Court Clearly Had Jurisdiction To Determine Whether the Commission Had Com- plied With the National Environmental Policy Act and To Grant Appropriate Relief When It . Found The Commission Had Not ............. 24 III. The Commission’s Post-Mortem Environmental Impact Statement, Drafted for the First Time Five Months After the Commission’s Final Re- port and Order of October 4, 1972 and There- after Issued in Final Form Seven Months A fter the Commission’s Said Final Report-and Order, Is Totally in Violation of NEPA and Is Thus ee Oe WORE cela ec 26 IV. The Commission’s Final Environmental Impact BM is Ee ee 32 V. The Commission Has Constantly Exhibited Hos- — tility and Contempt for the Requirements of NEPA, Both in This Case and in Other Statu- tory Proceedings. Accordingly, the District Court Properly Exercised Its Judicial Power To ii Table of Contents Continued | Page Review Not Only the Form of the Commission’s Belated Asserted Compliance With NEPA in This Case, but the Substance As Well...:..... 44 VI. The Nation’s Urgent Interests in Resource Con- servation, Resource Recovery, Restriction of Unnecessary Foreign Imports of Critical Mate- rials and Energy Conservation Will All Be Seriously Damaged If This Court Is Misled by Some of the False Assertions Presently Ad- vanced by Appellants in This Case ......-..... 51 (1) The Commission’s Assertion That the Basic Rate Structure For All Recyclable Com- modities Is the Subject of Investigation in Fe PO 0 5 oo c ovine ve tawctnccdasss 51 (2) The Government’s Assertion That Coustant te Increases for Recyclables Are Neces- sary Because the Railroads Are in Desper- ate Financial Condition ..............++++ 52 ConcLusion Be pe She ORIOL ee re eee Pe eT ee 54 Ce sea See ae re Pe rr Me ee ere eee ete i la ee See err rrr Tee ee 3a TABLE OF CITATIONS CasEs: Alabama Power Co. v. United States, D.C.D.C. 1969, 316 F. Supp. 337, affd. by divided court, 400 U.S. co... = Algo:n1 Coal & Coke Co. v. United States, D.C.E.D. Va., : 1935, 11 F. Supp. 487 .........- cece eee eee ees 26 Atchison, Topeka & Santa Fe Railway Co. v. United States, 284 U.S. 248, 262 (1932) .............+-- 40 Baltimore & O.R.R. v. U.S., 386 U.S. 372 (1967) ...... 23 Calvert Cliffs’ Coordinating Commission v. United States Atomic Energy Commission, 146 U.S. App. DG. 38, 440 F.3d TOD . wo... dees 25, 26, 28, 46 City of New York v. United States, E.D.N.Y., 337 F. : aa, BI fie se hashn se sivensrenatenys .. .28, 44, 45 : City of New York v. United States, U.S.D.C. E.D.N.Y., 1972, 344 F. Supp. 929 ........csceccscvenveess 39 0 ee ee a eS ee ee ee Table of Contents Continued iii Page Committee for Nuclear Responsibility, Inc. v. Seaborg, 149 U.S. App. D.C. 380, 463 F.2d 783 ...:....... 25, 26 District of Columbia v. Volpe, 3 E.R-C. 1143 (D.C. Cir. 5G ak nas Ve ow ns 4k ok ee Electronic Industries Assn. v. United States, D.C. D.C. 1970, 310 F. Supp. 1286, affd. per curiam, 401 5 | gee See Swain ay von akc kh ben eow es 26 Environmental Defense Fund v. Corps of Engineers, E.D. Arb., 1972, 342 F. Supp. 1211, 1214 ........ Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011 (1970) 36, 37 Greene County Planning Board v. Federal Power Com- mission, CCA 2, 1972, 455 F.2d 41s, cert. denied, Se 2s 0, WO CAI ova 8 a veh ose 28, 29, 30, 31, 38, 44, 46 Gunn v. University Committee to End the War, 399 U.S. 363, 301, 90 &. Ct. 2013 (1970) .:............ 23 Harlem Valley Transportation Association et al v. Stafford, Chairman, Interstate Commerce Com- mission, OCA 2, 1974, 500 F.2d 328 ............ 29, 46 © Hutcherson v. Lehtin, 399 U.S. 522, 90 S. Ct. 2238 RN 6a a ok a a a ech ccc eevee 23 Interstate Commerce Commission v. Louisville & Nash- ville Railroad, 227 U.S. 88 (1913) .............. 37, 38 Koppers Co. v. United States, D.C. W.D., Pa. 1955, We ee, SE es os disk le hawk échvce cis Mitchell v. Donovan, 398 U.S. 427, 90 S. Ct. 1763, 26 Bic te Oe ee 56s Eas eh eck, voces. 23 Northeast Airlines, Inc. v. Civil Aeronautics Board, CCA 5, 1965, 345 F.2d 484, cert. denied 382 U.S. ce, he pcb Bag en ean 42 Public Service Commission of Missouri v. Brashear Freight Lines, Inc., 306 U.S. 204, 59 S. Ct. 480, 83 Gi OD os oes hc ns oc ns Chocks 23 Rockefeller v. Catholic Medical Center, 397 U.S. 820, 90 S430, SO teed. 20 BOS (1970) 2.22... .. «5s 23 SCRAP v. United States, 346 F. Supp. 193 .......... 18 SCRAP v, United States, 412 U.S. 669 (1973) ........ 20 SCRAP ¥. United States, 371 F. Supp. 1291 ....20, 21, 22, 23, 41, 50 Sierra Club v. Froehlke, D.C. Wis., 1972, 345 F. Supp. sch np AE EE OE EOE PRES AA Fr Oe Mem ae 47 United States v. Allegheny-Ludlum Steel Corp., 406 PUR OPI ooo ose oa ih cece cc ens ss 23, 24 iv Table of Contents Continued Page ICC Ex Parte Rare Increase Proceepines: BE DEON eGs BE kok ko Ww as ee ead aeaa abies 51, 52 Me RO TO We i os ine Sh co's vn ee daticas 2, 17, 18, 19, 20, 24, 27, 31, 35, 45 Be I I brs obs ba ow eelaws cas oakekoacans ee Te i FIs CIES ia ie vk eee 6, 7,8 Be SE Oe UE 6 Se brie etacesissiawe cee 53 STATUTES: Administrative Procedure Act: 5 USC, Section 554(a)(c) ............0e4oere 40, 41, 42 ee ee ee Sa ere Ais ae 40, 41, 42 ee ee re Oe ea 40, 41, 42 Rei II OE oo ois eign soc Sse hve bs ees vce 41 Interstate Commerce Act: Section 15(7), 49 USC §$15(7) .7~"....... 2, 3, 26, 40, 54 National Environmental Policy Act: Section 101 et seq., 42 USC § 4331 et seq. ...7...... 2 Section 102(2) (ce), 42 USC § 4332 (2) (ce) ....... 2, 3, 16 We SUMS BBO ok 60 8 is acd no caccacucdeceebian 2, 22, 23, 24 Be WE AE aS che Fasee i nkcurcuviececeidseceet es 25 i ee OF of bors Sach ooewiaies octet 15 OTHER AUTHORITIES: — . Report of the Study Grou <4 on the Caseload of the Supreme Court, 57 FRD 573 (1972) ............ 24 Council on Environmental Quality Guidelines, 40 CFR, §§ 1500.7(d), 1500. ss hex wid 28, 1978= 7... 40, 43 MISCELLANEOUS: Mandate of the National Environmental Policy Act: The Preparation of Environmental Impact State- ments, 41 Journal of the Bar Association of the District of Columbia, No. 1, January-June, 1974... 29 Federal Maritime Commission Docket 72-35, Pacific Westbound Conference—Waste Paper and Wood- pulp Investigation, Record .........2.....0.005 IN THE Supreme Court of the United States OctoBerR TERM, 1974 Nos. 73-1966 and 73-1971 UNITED States or AMERICA and INTERSTATE COMMERCE CoMMISssION, Appellants Vv. STUDENTS CHALLENGING REGULATORY- AGENCY Procepures (S8.C.R.A.P.) Er Au., Appellees ABERDEEN AND RockFIsH RAILROAD Company, Et Ax., Appellants Vv. STUDENTS CHALLENGING REGULATORY AGENCY Procepures (8.C.R.A.P.) Er AL., Appelleés On Appeal from the United States District Court for the District of Columbia BRIEF FOR APPELLEES NATIONAL ASSOCIATION OF RECYCLING INDUSTRIES, INC., COMMERCIAL METALS CO., I. V. SUTPHIN CO. AND FRANKEL BROS. & CO. INC. — soargens er cin te eek take Te Cider Mek Wa ER et thea ee OE Lek 5 te / « 2 OPINIONS BELOW The opinion of the three-judge district court is reported at 371 F. Supp. 1291. The Interstate Com- merce Commission’s opinion and order issued October , 4, 1972 is reported at 341 LC.C. 290. The Com- mission’s final environmental impact statement in Hz Parte 281 is reported at 346 L.C.C. 88. The Commis- sion’s order of May 2, 1973 is not reported, but can he found in Appendix E to the Government’s Jurisdic- tional Statement in this case. , , JURISDICTION Appellees contend this Court has no jurisdiction over the two direct appeals here involved under the provisions of 28 U.S.C. § 1253, and they urge the Court to reconsider appellees’ earlier motion to dismiss for lack of direct appellate jurisdiction. QUESTIONS PRESENTED 1. Whether appellants are entitled, under 28 U.S.C. § 1253, to maintain a direct appeal to this Court from a district court order which refused to grant injunctive relief and where no appeals have been taken by those who were denied injunctive relief. | ' | 2. Whether the district court had jurisdiction to review orders issued by the Interstate Commerce Com- mission under 49 U.S.C. §15(7) in response to com- plaints alleging that said orders violated provisions of another federal statute, the National Environmental Policy Act (NEPA), 42 U.S.C. § 4331 et seq. 3. Whether the Interstate Commerce Commission, which has an established record of adamantly refusing 3 to comply with the plain requirements of Section 102(2)(C) of the National Environmental Policy Act (NEPA), 42 U.S.C. § 4332(2)(C), may lawfully ignore those statutory directives by arbitrarily failing and _ refusing to prepare any acceptable or sustainable En- vironmental Impact Statement prior to the rendition of its final decision and order in a nationwide freight rate increase proceeding, wherein it expressly approved another across-the-board, unreasonable, discrimina- tory, pyramidic increase in transportation rates for recyclable wastepaper, textiles and scrap metal. 4. Whether the Interstate Commerce Commission may lawfully defeat and cireumvent the plain require- ments of Section 102(2)(C) of NEPA by waiting until several months after it has already rendered a final de- cision and order in a nationwide freight rate increase proceeding, wherein it expressly approved another across-the-board increase in transportation rates for recyclable commodities, to prepare for the first time, a post-mortem Environmental Impact Statement, the sole purpose of which is to rationalize, nunc pro tunc, the rate increase theretofore approved seven months be- fore. 5. Whether the Interstate Commerce Commission, which is obliged by Section 15(7) of the Interstate Commerce Act, 49 U.S.C. § 15(7), to hold meaningful -hearings to determine the “‘lawfulness’”’ of proposed rate increases, may properly issue a final order approv- ing such rate increases and only thereafter consider the ‘‘lawfulness’’ of such approved increases under the National Environmental Policy Act in post-decision proceedings that flatly deny the right to any hearing on the new issues thus belatedly raised. BT 4 6. Whether in a case of this nature where the Com- mission has constautly exhibited hostility to the require- ments of the National Environmental Policy Act, the district court properly exercised its judicial power to review not only the form of the Commission’s alleged, belated compliance with NEPA, but the substance of that alleged compliance as well; and where the court found the Commission’s alleged compliance to be seri- ously inadequate or capricious, was it proper for the court to remand the case to the Commission for further administrative proceedings cousistent with the court’s decree. COUNTER-STATEMENT OF THE CASE Appellee National Association of Recycling Indus- tries, Inc. (NARI) is the trade association for the wastepaper, textile and non-ferrous metals recycling in- dustries. NARI intervened as a plaintiff in the case below to represefit the interests of its 700 members, all of whom engage in the collection, processing or manu- facturing utilization of the aforementioned recyclable commodities. ” Appellees Commercial Metals Co. of Dallas, Texas, 1.V. Sutphin Co. of Cincinnati, Ohio, and Frankel Bros. & Co. Inc. of Rochester, New York also intervened as plaintiffs in the district eourt. Each is engaged in the recycling of solid waste materials which, if not so utilized, would have been burned, buried or otherwise. disposed at public expense, with obvious adverse effects on the environment; and all, of course, use the nation’s railroads to ship recyclable commodities. Recyclable wastepaper utilized by NARI’s member- ship competes with virgin pulpwood or woodpulp in the nation’s paper and boxboard manufacturing industries. 5 Similarly, recyclable non-ferrous metals (aluminum, copper, lead, zine, ete.) and virgin non-ferrous ores and concentrates are competing raw materials in metal man- ufacturing, while recyclable textiles eempete with vir- ' gin fibers throughout the textile manufacturing indus- try. By and large, these competing virgin. and -recyel- able commodities are jnterchangeable in manufactur-. ing processes, and where they are not completely sub- stitutable, manufacturers use one as a supplement for the other to produce various types and grades of goods . and products, Almost without exception, the virgin commodities in each of the industries mentioned above are able to de- mand raw material prices far in excess of those manu- facturers are willing to pay for competing recyclable counterparts. Pulpwood or, woodpulp, for example, is typically sold at prices far higher that those simultane- ously paid for competing wastepaper, and the same situation applies to competing sales of virgin ores and recyclable scrap, and those involving virgin and re- eyclable textiles. Thus, from the very outset, one is tempted automa- tically to conclude that certainly the high-priced virgin commodities ‘must be paying higher transportation rates than those exacted for the movement of compet- ing, low-priced recyclable commodities. Unfortu- nately, however, the record in this case demonstrates that this is not true. On the contrary, the record before _this Court shows that the railroad freight rate system administered by the Interstate Commerce Commission, in partnership with the nation’s railroads, has created an abominable, incongruous situation where environ- mentally-charged, low-priced recyclable commodities have been compelled, for a long period of years, to pay hoe rates far higher than those charged for the transporta- tion of competing virgin commodities, and that the situation is getting worse with each passing year. In this connection, the record shows: * Pulp v. Wastepaper (1) In 1959, the average nationwide rates charged by the railroads for the transportation of competing pulp and wastepaper were: Pulp 17.4¢ per cwt. Wastepaper” 31.3¢ per cwt. Net Difference: 13.9¢ per ewt. in favor of virgin pulp. (2) By 1971, as a result of % rate increases sought by the railroads and approved by the Com- mission ina series of Ex Parte proceedings, the average nationwide rates for the trans tion of these two commodities had changed as follows: Pulp _ 24.4¢ per ewt. Wastepaper 43.0¢ per cwt. Net Difference: 18.6¢ per ewt. in favor of virgin pulp. (3) Since 1971, the railroads have continued to seek, and the Commission has either approved or is in the process of studying, the following addi- tional % rate increases for the transportation of these competing commodities (in some cases, how- ever, pulp was expressly exempted from any in- crease whatsoever) : ed 1 See Commission’s Environmental Impact Statement, Ex Parte 281, App. 146, 147. Rate Increase Case Year % Increase Ex Parte 281 1972 2.5% surcharge, plus 3% Ex Parte 295, Sub. 1 1973 3% Ex Parte 299 1974 28% Ex Parte 303 1974 3.3% plus 10%’ Ex Parte 310 1975 7%° When and if the two last mentioned © increases go into effect as have the others mentioned above, ~ the competitive transportation situation for com- peting pulp and wastepaper will be as follows, on an average nationwide rate basis: Pulp 30¢ per cwt. Wastepaper 58¢ per ewt. Net Difference: 28¢ per ewt. in favor of virgin pulp. Non-Ferrous Ores v. Metal Scrap The picture is very much the same for competing non-ferrous ores or concentrates and metal scrap. The _ record before the Court demonstrates that— (i) In 1959, the virgin ores enjoyed a favor- able 13.3¢ per ewt. average nationwide rate differ- ential ; (ii) By 1971, the differential in favor of the virgin commodity had grown to 17.7¢ per ewt.; and (iii) In 1975, the differential in favor of the virgin commodity will expand to 34¢ per ewt., when 2The Commission authorized the railroads to put the 10% in- crease into effect by individual tariff filings, and the railroads, as a group, are now proceeding to put the increase into effect. 8 The railroads’ application is now before the Commission for action. PEPE TRE PR EY SS aes PRR a . Lo and if the Ar Parte 305 and 310 inereases are put into effect as aforesaid. The severe adverse impact of these constantly-ex- panding rate disparities on the ability of reeyelable commodities to compete with their virgin competitors in the marketplace is not fully understood until one real- izes, as conceded by the Government in its brief,® that (a) transportation costs often far exceed the price paid for low-value recyclable wastepaper, textiles amd serap, and (b) manufacturing plants are traditionally lo- cated much nearer to the mines and forests where vir- gin commodities are found than to the large metropoli- tan areas where wastepaper, recyclable cans and textiles are collected from the solid waste stream—tmeaning, of course, that longer travel distances necessarily impose greater transportation costs, at disproportionately higher rates, on the competing reeyelable materials. This explains in large part, therefore, why our na- tional reeycling rates have actually declined in reeent years and are threatened with further deterioration. Statisties compiled by the Environmental Protection Agency and made available to the Commission demon- strate that the following national recycling rates inter alia are already dangerously low— ¢ Current Reeyeling Yommodities Rates Textiles 4%, Zine 18% Aluminum 18% Wastepaper 19%, *Similar inexplicable rate disparities exist in favor of »virgin textile fibers, which, as aforesaid, compete with recyclable textile materials. ® See Government's brief, pg. 30. 9 amg “ — In wastepaper, for e: nay kh the EPA statisties show that, as recently as 1952, our national reeyeling rate was 27'(,, and that in other countries such as Japan, the present recycling rate is far higher. Moreover, while our reeyeling rates have been declining, the national production of solid waste materials has been dramat- ieally inereasing. In textiles, KPA warns that while the reeyeling rate is an almost meaningless 4°7, the production of textiles in this country will increase from 10 billion pounds in 1970 to 15 billion pounds in 1980. The same statistics, which were available to the Com- mission in this case, demonstrate that, in paper, the na- tional production in 1969 was 58.5 million tons, less than 20%, of which was reeyeled, leaving more than 42 mil- lion tons to be burned or buried. By 1980, EPA and the paper industry itself project that the consumption of paper in the United States will grow to 80 million tons a year, and that unless the current reeyeling rate of only 19% is significantly increased, rather than de- creased, our nation is in danger of being buried in its own undisposed, unreeyeled trash." Simultaneously, of course, other agencies of the Fed- eral Government have repeatedly warned the Congress and the President that our nation is also in danger of exhausting its supplies of precious ores and pulp in the years ahead, and that unless we reduce our voracious industrial consumption of these virgin materials, we will-be foreed to depend on foreign imports, particul- ® See also 1970 Report to Congress, President’s Council on En- vironmental Quality, pgs. 105-108; June 1, 1972 Report to the President, Citizens’ Advisory Committee on Environmental Qual- ity; March, 1973 Report to EPA by National League of Cities-U.S Conference of Mayors, entitled ‘‘Cities and the Nation’s Disposal Crisis.”’ _ arly in metals—and, of course, increased dependence on imports submits the United States to new foreign sour- ‘ees of cartel pricing and commodity embargoes, as well as serious damage to our already strained balance of payments position.’ In 1973, the Director of EPA’s Office of Solid Waste Management described the situa- tion in pulp, in sworn testimony as follows:* ‘“‘The U.S. Forest Service has predicted that by the year 2,000 a shortage of 20 billion board feet of softwood saw timber will exist. ... The short- age would reach 10 billion board feet by 1980. 1 million tons of wastepaper recycled saves 1.4 billion board feet of timber, which could to some extent be used to offset this projected timber short- age.... ‘“The land commitment required to produce an annual timber growth sufficient to yield 1 million » tons of pulp per year is roughly 2.5 million acres. 10 ‘Hach ton of paper recycled would allow land to be used for other purposes, such as lumber pro- duction or for a non-forestry function, such as rec- reation.”’ 7 See 1970 Report to Congress, President’s Council on Environ- mental Quality, pg. 158; June 1973 Final Report to the Presi- dent and the Congress, The National Commission on Materials Policy; 1973 Report to Congress, Environmental Protection Agency; March, 1973 Report to EPA by National League of Cities-U.S. Gonference of Mayors, entitled ‘‘Cities and the Nation’s Disposal Crisis’’; April 5, 1973 Report of The Council of State Governments, entitled ‘‘The States’ Roles in Solid Waste Manage- ment’’; May 21, 1973 issue of Newsweek magazine, which stated: ‘‘As Government officials and environmentalists search for ways to cut the drain on the nation’s natural resources, their thoughts turn increasingly to recycling.”’ 8 Federal Maritime Commission Docket 72-35, Pacific Westbound Conference—Waste Paper and Woodpulp Investigation, Record, 654-655. za arene | 11 Similarly, in metals, the U.S. Geological Survey, in a publication entitled ‘‘United States Mineral Re- sources’? (U.S. Geological Survey Paper No. 829 1973), geographically illustrated the dangerous ten- dency of growing U.S. dependence on foreign basic raw materials. In summary, the Survey reported that, of the 13 basic industrial raw materials required, the U.S. in 1950 was dependent on imports for more than Y%, of its supplies of four —aluminum, manganese, nickel and tin; by 1970, the list had increased to siz, as zinc and chromium were added; by 1985, the U.S. will depend on imports-for more than 1% of its supplies : ‘ ; ir of nine basic raw materials—as, ead and tungsten are added to the list; and by the end of the century, our country will depend on foreign sources for more than \% of its supply of each of the 13 raw materials except phosphate. (See also Geological Survey Circular No. 698, entitled ‘‘Mineral~Resources: Potentials and Problems’’) Faced with these gloomy predictions, the Deputy As- sistant Secretary of the Interior for Mineral Resources, described the ultimate financial implications for the United States in this manner: ® ‘In the case of metals, the forecast indicates a continuing rapid rise in demand, but at the same time, a very small increase in supply from domes- tie sources. ‘This results in a forecast that, in metals, reli- ance on foreign sources will increase from Five Billion in 1970 to an annual level of Sixteen Bil- lion Dollars by 1985 and to a staggering Thirty- Six Billion Dollars by the year 2000. ‘‘And that is what can happen unless something is done.”’ ®“*Minerals In The Future,’’ June 16, 1973 by Dep. Asst. Secre- tary of the Interior Rigg; See also May 21, 1973 issue of News- week Magazine. 12 | Finally, in the vitally important energy area, the Atomic Energy Commission and EPA conducted sepa- rate studies which proved that industrial utilization of recyclable commodities in place of competing virgin materials results in vast savings of precious oil and gas. In a report entitled ‘‘Energy In Solid Waste,’’ issued in early 1975, the President’s.Advisory Committee on Environmental Quality stated, at page 5: ‘‘F'rom an energy conservation point of view, the ... recycling of paper requires less than one-third of the fossil fuel energy needed to make paper from primary sources. If, as EPA’s Second Report to Congress indicates, it is technically possible to re- cover half of the 70% of the mixed wastepaper, the recycling of this portion (13.7 million tous) plus the 11.7 million tons of the easily separable items could mean a fossil fuel energy saving equiv- alent to 2.4 billion gallons of gasoline per year. This exceeds the fuel energy equivalent of 2.2 bil- lion gallons of gasoline that could be produced an- nually by burning the same amount of trash paper. ... Thus, the recycling of paper—as opposed to burning—would produce a net energy benefit of about 200 million gallons of gasoline, enough to drive 270,000 cars 10,000 miles a year at a rate of 13.3 miles per gallon.”’ (Italics supplied.) In the metals area, the President’s Committee re- ported, at page 7: “©. recycled aluminum requires less than 3% ofthe energy needed tc produce aluminum from bauxite ore. Recycled steel requires less than half the energy needed to produce steel)from virgin ore. When it is assumed that about 70% of the alumi- num and 90% of the steel in the 1971 National Trash Can could be recovered, these factors trans- late to a potential recycling energy equivalent sav- 13 ing of 226.5 trillion BTU’s or 1.8 billion gallons of gasoline—enough to make nearly 7 million one- way car trips per year from New York to San Francisco on the basis of 13.3 miles per gallon.” (Italies supplied.) Considering all of these divergent factors of urgent national interest, it is hardly surprising that there has been a mounting clamor from all levels of Federal, State, and local government calling upon the Inter- state Commerce Commission immediately to eliminate the outrageous disparity in freight rates for the trans- portation of reeyelable commodities—and in each ease, the Commission has been urged not to license any fur- ther % rate increases until the basic disparities here- inabove described have been eliminated. In its June, 1972 Report to the President, his Citizens’ Advisory Committee on Environmental Quality, chaired by Laurence Rockefeller, stated, at pages 33-41: ‘*Solid waste problems have become staggering. There are few environmentally effective ways to handle it. In a very short time urban areas will have run out of landfill sites. ... Large-scale, low- cost incineration which does not contribute to air pollution is not yet available. ... “Freight Rates ‘Traditionally, freight rates established by the Interstate Commerce Commission (ICC) for the most part discourage recycling. ... (T)hey work against recovery of solid waste... . ‘*... In our 1971 Report, the Committee rec- ommended that ICC initiate comprehensive reme- dial action as soon as possible. We urge prompt further action.” 14 Similarly, in its March, 1973 report entitled ‘‘ Cities and the Nation’s Disposal Crisis,’’ the U.S. Confer- ence of Mayors states (at page 1-21): ‘‘The disposal of wastes and the conservation of resources are two of the greatest problems to be understood and solved by this nation in the latter third of the century. . ‘Recycling and resource recovery as a solution is potentially the most. oie paige cost effec- tive and responsible approach. . “Discriminatory freight rates are . . . contrib- uting to a disadvantaged marketing position for recycled solid wastes.... Before secondary mate- rials handlers can buy and sell recycled municipal wastes in a competitive market and before cities can attempt rail haul of wastes to distant sites for .major land reclamation efforts, rate adjustments must be made. Since regulatory rates of the In- terstate Commerce Commission have exacerbated the unfavorable economics of waste transport, fed- eral action is required.” An almost identical position was expressed by The Council of State Governments in its April 5, 1973 Re- port entitled ‘‘The States’ Roles In Solid Waste Man- agement,’’ at pages 41-44, where it is stated: “Freight Rates ‘“‘A substantial difference in freight rates charged by rail carriers exists between virgin raw materials and.recycled materials. . Therefore, , freight rai abled by the Interstate Com- merce Commission should be set in a manner that does not give an advantage to either type of mate- rial through set tariff charges.’’ In June, 1973, The National Commission on Mate- rials Policy, established by Congress and appointed by 15 the President under Title II of the Resource Recovery | Act of 1970, P.L. 91-512, issued its final report to the President and the Congress, in which it too concluded, at pages 4D17, 18: “Rail freight rates are an important factor in the economics of recycling. Transportation costs are a large percentage of the total cost of using some secondary materials. Often they determine whether recycling can be profitable. Certain rail- road freight rates appear to discriminate against | | ne materials in favor of virgin mate- | rials. . **Cost data available . . . indicate obvious dis- ° crimination against scrap. Two different studies, one published by the ICC and the other by the Department of Transp6rtation, show that shippers of scrap materials pay freight rates that more than cover the full costs of transportation service re- ceived. Shippers of virgin materials often do not. “We recommend that ... the Federal Govern- ment take thé necessary steps to correct the exist- ing freight rate differentials between secondary and primary materials.” More particularly; in Ex Parte 281, the case now be- fore this Court, the President’s Council on Environ- mental Quality, the Environmental Protection Agency, the Departments of Commerce and Interior and the General Services Administration all appeared to urge the Interstate Commerce Commission not to grant any : further % increases in the existing rates for recyclable eeemiodbibie until the Commission first eliminates the basie disparities in rates for competing virgin and re- eyclable materials. Indeed, these agencies and appel- lee NARI have been appearing in various ICC Ez _ Parte rate increase proceedings since 1968 to assert y é that same position, but the Commission repeatedly | turned a deafear and continued, as hereinabove dem- onstrated, to raise the rates on recyclables in such a manner that the net disparities in rates for competing virgin and recyclable commodities have automatically been exacerbated and expanded beyond the limits of reasonable explanation or understanding. In 1969, while the Commission was proceeding in the manner just described, Congress passed the National Environmental Policy Act (42 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.”’ 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 Govern- 16 ‘ment shall—... **(C) inelude in every recommendation or report on... major Federal actions sig- én —_— TOSSA nificantly affecting the quality of the human environment, a detailed statement by the re- sponsible official on— . (i) the environmental impact of the proposed action, (ii) any adverse, environmental effects which cannot be ayoided should the proposal . be implemented, (iii) alternatives to the proposed ac- tion, (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 ae- company the proposal through the existing agency review processes.”’ Accordingly, when the railroads filed an application in late 1971 in Ez Parte 281—Increased Freight Rates and Charges, 1972 requesting permission to add another 2.5% surcharge to the existing freight rates for recyclable commodities, the original plaintiffs in ROR 18 this cage (S.C.R.A.P.) demanded that the Commission fully comply with the mandates of the new statute NEPA before any definitive action was taken on the railroads’ latest % rate increase proposal. The Com- mission, however, in line with the myopic attitude toward environmental issues it had repeatedly exhib- ited prior to the enactment of NEPA, failed to pre- pare any draft or final Environmental Impact State- ment as required by Section 102(2)(C)(2), and on February 1, 1972, it issued a blunt order approving the proposed 2.5% surcharge, in which it simply concluded (See 346 F. Supp. 193) : ‘*.. . the involved general increase will have no significant adverse effect on... the quality of the human environment within the meaning of the Environmental Policy Act of 1949.”’ The railroads thereafter filed a further request in Ex Parte 281 for another permanent % rate increase of 4.1%, such increase to become effective no earlier than May 1, 1972. In the meantime, S.C.R.A.P. and others were engaged in negotiations with the Commis- sion in an effort to secure compliance with NEPA. On February 3, 1972, S.C.R.A.P. and ICC entered into a ‘Memorandum of Understanding’? whereby S.C.R.A.P. agreed not to seek an injunction against the Commission’s February 1 order in exchange for ICC’s promise to “issue a draft environmental state- ment in accordance with the requirements of NEPA and ... otherwise to comply with the requirements of the Act in Ex Parte 281.’ (See 346 F. Supp. 193.) In response to this pressure from 8.C.R.A.P. and other appellees in this case, the Commission did issue a six-page document called a ‘‘Draft Environmental 19 Impact Statement’”’ on March 6, 1972. The Nature of ; this draft statement, upon which the Commission now relies so heavily in the Government’s brief before this Court, was described by the district court, as follows in its July 10, 1972 decision in this case (See 346 F. Supp. 1938, 194): ‘Nhe Commission has never adequately ex- plained why it bothered to prepare a draft state- ment premised on facts it knew to be false, and the reason why the ICC finds itself with the re- sources necéssary to prepare draft statements on false hypotheses while it is assertedly without re- sources to prepare impact statements as required by NEPA based on real facts remains one of the enduring mysteries of this case.”’ In any event, the extremely brief draft statement prepared by the Commission in March, 1972 aimlessly concluded (346 F. Supp. 194): *... It is impossible at this point in the investi- gation to assess with any certainty the environ- mental impact of assessment of, or failure to assess, a surcharge on various recyclable commodities. ”’ The Commission thus allowed the 2.5% surcharge to remain in effect allegedly without any knowledge of the impact that action might have on the recyclables involved, but it did solemnly promise the district court a detailed final impact statement would be filed before a final order was issued regarding the proposed per- manent rate increases "—a promise it later broke, as hereinbelow set forth. At this point in the Er Parte 281 proceedings, ap- pellee S.C.R.A.P. commenced the instant action. The various legal proceedings that subsequently ensued are 10 See 346 F. Supp. 194. IEEE LILLE SELES LET ET POE By LE FESTA EE OO TR EE eraser 20 | detailed in this Court’s earlier opinion in this case reported at 412 U.S. 669 (1973). Indeed, while this ease was before this Court on the earlier appeal, the Commission also promised the Chief Justice that it was | developing an impact statement under NEPA, and that same would be issued before the final rate deci- sion in Ez Parte 281 was announced—but the Commis- ston thereafter proceeded likewise to ignore and violate © that further undertaking to this Court (See 371 F. Supp. 1291, 1294). In fact, no statement was prepared for distribution to the parties or for consideration by the Commission before the Commission issued its final report in Ex Parte 281 on October 4, 1972, in which it, approved the additional permanent rate increases for the transportation of recyclables requested by the rail- roads (See 371 F. Supp. 1294). Once again, without the preparation of a NEPA statement, the Commission arbitrarily concluded, in its final report of October 4, 1972, that the new approved % inereases on recyclables ‘‘would not significantly affect the quality of the human environment’’ (See 371 F. Supp. 1294): The Commission thus asserted (See 371 F. Supp. 1294)— . ‘there is thus no necessity for a formal impact statement.”’ The Commission’s failure to prepare a NEPA state- ment provoked vehement protestations from the Presi- dent’s Council on Environmental Quality, the Envi- ronmental Protection Agency, and appellees (See 371 F. Supp. 1294). CEQ, in its letter to the Commission, felt that the Commission’s action was totally ‘‘unre- sponsive to the language of our NEPA guidelines” (See 371 F. Supp. 1294, ftn. 8). . : dl SSSA OS PE ES ER ENGI EEE OAM TI RALLIES 21 Appellee SCRAP thereupon filed a motion for in- junctive relief against the Commission. On the same day, November 7, 1972, the Commission suddenly shifted its position, and suspended until June, 1973, the already-approved rate increases on recyclables (See 371 F. Supp. 1294). The Commission thereupon announced that it intended to conduct a post-mortem proceeding for the ‘limited purpose of further evalu- ating .. . the environmental effects of increased rail- road freight rates and charges on . . . commodities being transported for the purpose of recycling’’ (See 371 F. Supp. 1294). On March 5, 1973, 5 months after the Commission issued its final report of October 4, 1972 approving the new rate increase on recyclables, the Commission finally issued its post-mortem draft environmental impact statement now before the Court in this ease. Although numerous Executive agencies and depart- ments, including EPA, CEQ, GSA. and the Depart- ments of Commerce and Interior, filed extensive com- ments that were highly critical of the Commission’s draft statement and the arbitrary conclusions therein contained, the Commission, on May 7, 1973, 7 months after it issued its final report of October 4, 1972 ap- proving the new rate increase for recyclables, issued another post-mortem order which adopted the draft impact statement theretofore issued without substan- tial change (371 F. Supp. 1295). Appellees thereupon filed motions for summary judgment in the pending court proceedings, which the district court granted on February 19, 1974. The court vacated the Commission’s post-mortem order of May, 1973 which put the previously-approved a PELE ASTER TE ORO NIE LPL CIM ER TEE ENN RL eT Pe 22 rate increases -into effect, and it remanded the case to the Commission ‘‘for fulfillment of its NEPA obligations’’. The district court then proceeded to rule (371 F. Supp. 1293): _ “However, because of our uncertainty concerning 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 (1973), we refrain from issuing an injunction restraining the railroads from collecting the increased rates pend- ing the Commission’s reconsideration.”’ Appellant railroads aad the Government appealed. Injunctive relief having been completely denied, how- ever, shippers of recyclable commodities have been forced to pay another $8 to 10 million a year since June, 1973 in new, arbitrary rate increases while this case has proceeded through the courts. ARGUMENT L This Court Lacks Jurisdiction Over Appellants’ Direct Appeals Under 28 U.S.C. § 1253. The Appeals Should Therefore Be Dismissed. 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 court’s judgment of February 19, 1974." But, 28 U.S.C. § 1253 allows direct appeals to this Court only from judgments “‘granting or denying .. . an interlocutory or permanent injunction’’. . These two appeals, however, are not appeals ‘‘from an order granting or denying... an... injunction’’. 11 See Government’s brief, pg. 2; railroads’ brief, pg. 2. 23 While the district court did deny an injunction which had been sought by appellees (371 F. Supp. 1307-10), 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 railroads are still collecting the new rate increase of $10 million a year authorized by the Commis- sion, have no standing to appeal from that mas- sive victory (Public Service Commission of Mis- sourt 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). In this case, the district court expressly ruled (371 F. Supp. 1291, 1293) : ‘‘.-«. (W)e refrain from issuing an injunction restraining the railroads from collecting the in-— creased rates pending the Commission’s reconsid- eration.’’ 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 Freight Lines, supra; Hutcherson v. Lehtin, 399 U.S. 522, 90 S. Ct. 2238 (1969) ; Mitchell v. Donovan, 398 U.S. 427, 90 S. Ct. 1763, 26 L. Ed. 2d 378 (1970). The two cases upon which appellants rely to support their jurisdictional claims are plainly inapposite be- cause, contrary to the situation here, both involved appeals from orders granting or denying an injunction. Baltimore & O. R.R. v. U.S., 386 U.S. 372 (1967) in- volved 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 . 7 (1972), in turn, involved two cases, one in which an appealing party requested injunctive relief that was denied, and the other in which the Interstate Com- merce Commission opposed an injunction that had been granted by the district court. Appellants have continuously contended that cases involving ICC actions should be placed in some sort of ‘“snecial category’’, so that direct appeals to this Court should be allowed under 28 U.S.C. § 1253 even in cases where no injunctive relief is present. The short answer to that claim is found in the recent Report of the Study Group on the Caseload of the Supreme Court, which stated at 57 F.R.D. 573, 597 (1972) : ‘‘Sinece many ICC eases are not of sufficient im- portance to require review by the Supreme Court, it is clear that the unique treatment of ICC orders - is a burden on the Supreme Court that can no longer be justified.”’ Here, therefore, the direct appeals, which have no foundation whatsoever under 28 U.S.C. § 1255, should plainly be dismissed. II. The District Court Clearly Had Jurisdiction To Determine Whether the Commission Had Complied With the National Environmental Policy Act and To Grant Appropriate Re- lief When It Found the Commission Had Not. Railroad appellants speciously argue that the district eourt lacked jurisdiction to determine whether the Interstate Commeree Commission properly complied with NEPA in Ex Parte 281. Government appellants seemingly do not jon in that contention. In any event, it ‘s perfectly clear that the district court did possess the necessary jurisdiction. Indeed, — | - . when this case was last here in 1973, this Court seem- ingly,readily agreed that (93 S. Ct. 2420)— 4 | there is general judicial power to determine } if an agency has complied with:NEPA, and to grant equitable relief if it has not. v i At that time, this Court appeared to cite with ap- proval the earlier holdings of the Circuit Court of Ap- peals for the District of Columbia in Galvert Cliffs’ Coordinating Committee v. United States Atomic En- : ergy Commission, 146 U.S. App. D.C. 33, 449 F.2d 1109 and Committee for Nuclear Responsibility, Inc. v. Sea- borg, 149 U.S. App. D.C. 380, 463 F.2d 783, wherein it was ruled that district courts have full jurisdiction to determine if federal agencies have complied with NEPA, and to grant effective relief when such com- pliance was either lacking or inadequate. In this re- gard, this Court stated, at 93 S. Ct. 2420: “Calvert €liffs’ held that a federal court had power to review rules promulgated by the Atomic Energy Commission, and there the court ordered further consideration of the rules on the ground there had not been compliance with NEPA. In Committee for Nuclear Responsibility it was held that federal courts had jurisdiction to consider whether an executive decision to conduct a nuclear test had satisfied the procedural requirements of NEPA...” 7 Moreover, there can be no question about the statu- tory jurisdiction of the district court to review orders of the Interstate Commerce Commission. 28 U.S.C. 1336 states: ; ‘‘Except as otherwise provided by Act of Congress, the district courts shall have jurisdiction of_ any civil action to enforce, enjoin, set aside, annul or suspend, in whole or in part, any order of the In- terstate Commerce Commission.’’ 26 Appellants, of course, have pointed to no Act of Congress which deprived the district court of jurisdic- tion in cases of this kind. On the contrary, through the National Environmental Policy Act, Congress has ac- tually provided an additional, separate basis for such jurisdiction over cases of this nature (Calvert Cliffs’, supra; Committee for Nuclear Responsibility, supra; City of New York v. United States, E.D. N.Y., 337 F. Supp. 150). For these reasons, therefore, cases such as Algoma Coal & Coke Co v. United States, D.C. E.D. Va., 1935, 11 F. Supp. 487, Koppers Co. v. United States, D.C. W.D., Pa. 1955, 132 F. Supp. 159, Alabama Power Co. v. United States, D.C. D.C. 1969, 316 F. Supp. 337, affd. by divided court, 400 U.S. 73, and Electronic In- dustries Assn. v. United States, D.C. D.C. 1970, 310 F. Supp. 1286, affd. per curiam, 401 U.S. 967, upon whieh the railroads rely so heavily, are totally inap- posite. None of those cases involved NEPA, or a com- plaint that the Commission had completely failed to comply with a séparate federal statute (NEPA) in its proceedings under Section 15(7) of the Interstate Commerce Act. III. The Commission’s Post-Mortem Environmental Impact State- ment, Drafted for the First Time Five Months After the Commission’s Final Report and Order of October 4, 1972 and Thereafter Issued in Final Form Seven Months After the Commission’s Said Final Report and Order, Is Totally in Violation of NEPA and Is Thus Null and Void. On October 4, 1972, after the conclusion of statutory hearings under the Interstate Commerce Act on April 20, 1972, the Commission issued its final statutory 27 report and order in Ex Parte 281, Increased Freight Rates and Charges, 1972, 341 I.C.C. 288. In that final report, the Commission stated (See 341 I.C.C. 314): ‘Inasmuch as we conclude that our actions herein will neither actually nor potentially significantly affect the quality of the human environment, we have not included in our report an extensive formal impact statement.”’ On November 7, 1972, after plaintiff S.C.R.A.P. moved for further injunctive relief in this action to prevent the rate increases thus authorized by the Com- mission from going into effect, the Commission sud- denly reopened Ex Parte 281 to ‘‘evaluate the environ- mental effects of (these) increased rates and charges on the movements of commodities being transported for the purposes of recycling’ (App. 91). N o further hearings were thereafter held by the Commission. On March 5, 1973, approximately five months after the Commission issued its report and order of October 4, 1972 licensing permanent 1972 increases in rates for recyclables, the Commission finally issued a ‘‘draft impact statement.’’ That “‘post-mortem” draft state- ment simply concluded (App. 92, 93): ‘*,.. the selective freight rate increases (already) approved in this proceeding as to commodities moving for the purposes of recycling would not have a significant adverse impact upon the equality of the human environment. It was found that any environmental costs which may result from that action would be outweighed by the economic benefits derived by the railroads...” Thereafter, on May 2, 1973, approximately seven months after the Commission’s rate-increase report and order of October 4, 1972, the Commission prepared , 28 and issued a Final Environmental Impact Statement, which the Commission itself described as follows (App. ; 89) : a ‘“‘This report represents, in accordance with the National Environmental Policy Act ‘of 1969 (NEPA), 42 U.S.C. 4321 e¢ seq., our final state- ment as to the environmental effects of these in- creases in the railroad freight rates and charges on movements of commodities being transported for the purposes of recycling found in our prior report and order (341 I.C.C. 288) to be just, peneeeente: and otherwise lawful.’’ Once again, the commission concluded, in “post- mortem’’ fashion long after the issuance of its final report and order of October 4, 1972 (App. 236) : ‘*In conclusion, we do not believe that the action we take in this proceeding will have a significant adverse impact upon the quality of our human environment. Had we found, however, that our action would have some adverse effects upon the environment, it would not preclude our granting the relief sought by the respondent (railroads) to the extent permitted in this decision.’’ Based on this record, we respectfully submit that the Commission’s said Environmental Impact State- ment, drafted for the first time five full months after the Commission’s rate-increase report and order of October 4, 1972 and thereafter released in final form seven full months after the said report and order, was totally violative of NEPA and was thus null and void ab initio (Calvert Cliffs Coordinating Committee et al v. United States Atomic Energy Commission, 146 U.S. App. D.C. 33, 449 F.2d 1109 (1971); Greene County Planning Board v. Federal Power Commission, CCA 29 2, 1972, 455 F.2d 412, cert. denied, 93 S. Ct. 56 (1972) ; Harlem Valley Transportation Association et al v. Stafford, Chairman, Interstate Commerce Commission, CCA 2, 1974, 500 F.2d 328). ! The rule to be applied here was succinctly sum- marized in a recent article entitled ‘Mandate of the National Environmental Policy Act: The Prepara- tion of Environmental Impact Statements’’, written by an attorney from the Department of Justice and printed in The Journal of the Bar Association of the District of Columbia, Vol. 41, No. 1, January-June, 1974 issue, at page 30: ; “Timing and Responsibility For The Prepara- tion of Environmental Impact Statements “The time to prepare the statement—NEPA states in Section 102(2) (¢) that the environmental impact statement and the comments received shall accompany the proposal through ‘the existing agency review processes.’ The CEQ Guidelines (38 Fed. Reg. 20552, Sect. 1500.7 (a)) state that ‘draft statements on administrative actions should be prepared and circulated for comment prior to the first significant point of decision in the agency reyiew process.’ For the analysis presented in an environmental impact statement to be fully inte- grated into agency decision making, the NEPA process should be well underway prior to the ren- dering of firm decisions by the agencick.”’ (Italics: supplied) In Greene County Planning Board v. Federal Power Commission, supra, the Federal Power Commission argued it had no obligation to prepare an Environ- mental Impact Statement under NEPA “until it files tts final decision’’ (See 455 F.2d 418,419). The Second | Circuit rejected even that contention, holding that ee NEPA contains a Congressional mandate to regulatory agencies such as FPC and ICC which requires that they carefully ‘‘consider en vironmental values ‘at every distinctive and comprehensive state of the [agency’s] process;’ ’’ and that they issue their own draft environ- mental impact statement in each case “prior to any formal hearings’’ (See 455 F.2d 412, 419-20). The Second Circuit meticulously explained in Greene County that ‘‘NEPA went far beyond the requirement that the agency merely consider environmental factors and include those factors in the record subject to re- view by the courts’’ (See 455 F.2d 412). Under NEPA, | the court wrote, agencies such as FPC and ICC have the “nondelegable responsibility” to prepare detailed environmental statements at the earliest possible stage of every environmentally-charged agency proceeding, and to consider the environmental values thus involved “at every distinctive and comprehensive stage of the agency’s process” (See 455 F.2d 420). In fact, the Second Circuit, in Greene County heavily relied on the prior decision of the District of Columbia Circuit in Calvert Cliffs’ Coordinating Committee v. Atomic En- ergy Commission, supra, wherein it was stated, at pages 1117, 1118: po «|. NEPA was meant to do more than regulate the flow of papers ‘in the federal bureaucracy. The word “accompany” in Section 102(2)(c) must not be read so narrowly as to make the Act ludicrous. It must, rather, be read to indicate a Congressional intent that environmental factors, as compiled in the “detailed statement,” be con- sidered through agency review processes. “Beyond Section 102(2)(c), NEPA requires ' that agencies consider the environmental impact of their actions ‘‘to the fullest extent possible.”’ — / a Sr eee ee _ ee 31 The Act is addressed to agencies as a whole, not only to their professional staffs. Compliance to the “‘fullest”’ possible extent would seem to demand that environmental issues be considered at every important stage in the decision making process - concerning a purticular action—at every stage where an overall balancing of environmental fac- tors is appropriate and where alterations might be made in the proposed action to minimize environ- mental costs.’’ (Italics supplied) There can be no doubt, we submit, about the complete correctness of the Second Circuit’s ruling in Greene County and the D. C. Cireuit’s holding in Calvert Cliffs. Both decisions do no more than fully sustain the statutory requirement of Section 102(2)(e) of NEPA (42 U.S.C. § 4322(2)(¢)) which states: ‘*Copies of such [environmental impact] state- ment and the comments and views of the appro- priate Federal, State, and local agencies . . . shall accompany the pr oposal through the existing agency review processes.’ (Italics supplied) The briefs filed by the railroads and the Government impliedly concede the correctness of this rule which has become so firmly established in the various cir- cuits. However, they now belatedly contend that some- how the Commission, which arbitrarily failed and re- fused to have the necessary impact statement available at every meaningful stage of the agency proceeding, somehow nevertheless complied with NEPA by simply continuing to rule throughout that indeed no statement was required because its actions allegedly would have no significant impact on the environment. The utter fallaciousness of that position, however, is laid bare 32 by the Commission’s own belated admission that it had not properly complied with NEPA prior to the rendition of its final decision of October 4, 1972, and that accordingly it would have to spend seven months tn the preparation of a post-mortem impact statement in an attempt to rationalize the final decision it had already issued. In conclusion, therefore, we urge the Court to hold— (i) that the Commission violated NEPA when it failed to prepare or issue any impact statement to support the final decision it released on October 4, 1972 in Ex Parte 281, in which it approved an- other cumulative % rate increase for the transpor- tation of recyclables, and that accordingly, the rate increase so licensed was unlawful; and (ii) that the Commission further violated NEPA when it prepared for the first time, five months after its final order of October 4, 1972, a post-mortem NEPA statement, the only purpose of which was to try to rationalize the new rate increase on recyclables it had already approved in final form many months before. IV. The Commission’s Final Environmental Impact Statement. Issued After the Commission's Order of Investigation of November 7, 1972, Without a Hearing and Without the Right of Confrontation, Is Unconstitutional and Violative of the Interstate Commerce Act, the Administrative Pro- cedures Act and the CEQ Guidelines Under the National Environmental Policy Act. On October 4, 1972, the Commission issued its final report and order in Ex Parte 281 without preparing or filing any environmental impact statement pursuant 4 33 } to NEPA. Petitions vehemently protesting the Com- mission’s conduct were thereupon filed by CEQ, EPA, appellees and other parties. On November 7, 1972, therefore, the Commission issued an Order of Investi- gation in Ex Parte 281, which read in part as follows: “Tt is ordered, That the above-entitled proceed- ing be, and it is hereby, reopened for the limited purpose of further evaluating, in accordance with the National. Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.), the environmental effects of increased railroad freight rates and charges on the movements of commodities being transported for the purpose of recycling. . . . “It tis further ordered, That in view of the fore- going actions, and because there is reason to believe that the tariff schedules identified in the appendix - to this order may, if permitted to become effective, result in .. . rates and charges, rules, regulations, or practices which would not be in conformity with the report in Ex Parte No. 281, Increased Freight Rates and Charges, 1972, 341 LC.C. 288, decided September 27, 1972, as modified by this order, an investigation be, and it is hereby, insti- tuted into and concerning the rates, charges, and regulations contained in said schedules, with a view to making such findings and orders as the facts and circumstances shall warrant... . “Tt is further ordered, That the investigation in this proceeding shall not be confined to the matters — and issues hereinbefore stated as the reason for imstituting this investigation, but may include all matters and issues with respect to the lawfulness of the said schedules under the Interstate Com- merce Act... .” (Italics supplied) EE 34 Plaintiffs and intervenor-plaintiffs thereupon re- quested that hearings be scheduled with reference to any and all matters within the scope of said investiga- tion (App. 93). They also asserted the right to con- front and cross-examine witnesses and Commission personnel who might participate in the Commission’s fact-finding mission, especially those upon whose ° expertise the Commission would rely in the prepara- tion of the belated environmental impact statement (App. 93). The Commission flatly refused to schedule any hearings, and it rejected the requests for confron- tation and cross-examination, stating (App. 102): ‘‘We see no benefit to be derived by allowing further hearings in this proceeding. . . . The pres- ent environmental record has been developed in substantial part by our own independent efforts and there appears no reasonable basis for now con- cluding that the parties can make any further rational contribution to that record. ... ‘‘The record in this proceeding is complete and further public procedures herein would be imprac- ticable, unnecessary, and contrary to the public interest.’’ (Italics supplied) It is perfectly clear, of course, that the Commis- sion’s position in this regard was totally arbitrary and capricious. It had nowhere theretofore disclosed the so-called ‘‘environmental record’ allegedly pro- duced as a result of ‘‘its own independent efforts’’— certainly, it had never confronted the parties with any such record for the purpose of cross-examination, refu- tation or rebuttal. It had not yet issued the draft environmental impact statement, later released in a - 35 March, 1973, and the Commission had theretofore stead- fastly foreclosed presentation of the true environ- mental facts by simply concluding unilaterally that increased freights rates do not adversely affect either recycling or the human environment. Indeed, even in its final environmental impact statement of May 1, 1973, the Commission once again failed to make any findings regarding the last-mentioned crucial threshhold en- vironmental issue, stating (App. 102): ‘*.,. Chairman Russell B. Train of CEQ... has conveyed to us his belief that ‘several rail haul cost biases currently exist’, and certain of the parties herein aver that discriminatory railroad rates and charges impede the movement of waste materials and favor the transportation of primary materials with ‘obvious’ adverse consequences to the envir- onment. ‘As recently as the last general rate proceeding, we pointed out that such a case does not provide an appropriate vehicle for examining these issues (Increased Freight Rates, 1970 and 1971, 339 I.C.C. 125, 189 (1971)). Thus, we do not attempt to determine whether the particular rates which result from the increases are maximum reasonable rates. ... Appellees respectfully submit, therefore, that the Commission’s refusal to schedule hearings with refer- ence to all matters covered by its Order of Investiga- tion of November 7, 1972 in Ex Parte 281 violated the parties’ rights under the Due Process Clause of the Fifth Amendment and under the Interstate Commerce Act, the Administrative Procedure Act and the applic- able Guidelines issued by CEQ under NEPA. SRSA PRR TERRE RON POPE HTS RN 36 In Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011 (1970), this Court extended ‘‘rudimentary due process”’ to cases involving the termination of federally-assisted welfare benefits on the basis of the following general rules which, we submit, should be equally applied in a | ease of this nature, where a federal agency is engaged in the licensing of millions of dollars in increased freight rates on recyclable commodities (at 397 U.S. 267-271) : ‘**The fundamental requisite of due process of law is the opportunity to be heard.’ Grannis v. Ordean, 234 U.S. 385, 394, 34 S.Ct. 779, 783, 58 L.Ed. 1363 (1914). ‘The hearing must be at a meaningful time and in.a meaningful manner.’ Armstrong v. Manzo, 380 U.S. 545, 552, 85 S.Ct. 1187, 1191, 14 L. Ed. 2d 62 (1965).... ‘‘The opportunity to be heard must be tailored to the capacities and circumstances of those who are to be heard. It is not enough that a welfare recipient may present his position in writing. . . . Written submissions are an unrealistic option. .. . Moreover, written submissions do not afford the flexibility of oral presentations; they do not permit the recipient to mold his argument to the issues the decisionmaker appears to regard as import- ant.... “Tn almost every setting where important deci- sions turn on questions of fact, due process re- quires an opportunity to confront and cross- examine adverse witnesses. ... **Finally, the decisionmaker’s conclusion .. . must rest solely on the legal rules and evidence adduced at the hearing. ...’’ (Italics supplied) As early as 1913, of course, this Court applied essen- tially the same rules of due process of law to rate 6s USER E NE. LS A _— M 37 proceedings before the Interstate Commerce Commis- sion, and that 1913 decision was relied on by Mr. Jus- "4 tice Brennan in the raajority 1970 decision in Goldberg : v. Kelly, supra, In that case, Interstate Commerce ~ Commission v. Louisville & Nashville Railroad, 227 i U.S. 88 (1913), the Commission contended that its de- cisions in rate cases, were absolutely conclusive and } could not be set aside even where the Commission’s findings were wholly without substantial evidence to support them (See 227 U.S. 91). This Court unani- mously rejected the Commission’s position, stating, at pages 91, 92: “A finding without evidence is arbitrary and baseless. And if the Government’s contention is correct, it would mean that the Commission had a power possessed by no other officer, administra- tive body or tribunal under our Government. It would mean that where rights depended upon facts, the Commission could disregard all rules of evidence, and ecapriciously make findings by administrative fiat. Such authority, however bene- ficently exercised in one case, could be injuriously exerted in another; is inconsistent with rational justice, and comes under the Constitution’s con- demnation of all arbi rary exercise of power. Se ee Ns ‘“‘In the comparatively few cases in which such. questions have arisen it has been distinctly recog- nized that administrative orders, quasi-judicial in character, are void if a hearing was denied: if that granted was inadequate or manifestly unfair; if the finding was contrary to the ‘indisputable char- acter of the evidence’... .”’ ‘*...A finding without evidence is beyond the power of the Commission. An order based thereon is contrary to law and must, in the language of the statute ‘he set aside by a court of competent juris- diction’. ...’’ (Italics supplied) - ee ae Ne 7 — BEL ORE Oe pa OL RE IE OI PE ELIF RE PPE RETF TEI ELOISE EL PAIL ALE, RITE. OED “a 38 In Louisville & Nashville R.R., supra, this Court, in a further holding particularly relevant to the case at bar, went on to state, at pages 93, 94: ‘‘The Government further insists that the Com- merce Act... requires the Commission to obtain information necessary to enable it to perform the duties and carry out the objects for which it was created, and having been given legislative power to make rates it can act, as could Congress, on such information, and therefore its findings must be presumed to have been supported by such infor- mation, even though not formally proved at a hear- ing. But such a construction would nullify the right to a héaring—for manifestly there is no hear- ing when the party does not know what evidence is offered or considered and ts not given an oppor- tunity to test, explain or refute. ... All parties must be fully apprised of the evidence submitted or to be considered, and must be given opportunity to cross-examine witnesses, to inspect documents and to offer evidence in explanation or rebuttal. In no other way can a party maintain its rights or make its defense. In no other way can it test the sufficiency of the facts to support the finding; for otherwise, even though it appeared that the order was without evidence the manifest defi- ciency could always be explained on the theory that the Commission had before it extraneous, unknown but presumptively sufficient information to support the finding.’’ (Italics supplied) Clearly, therefore, these long standing rules of con- stitutional law, directly applicable to rate proceedings before the Commission, explain why the Second Cir- cuit, in Greene County Planning Board v. Federal Power Commission, supra, ruled, in 1972, that federal regulatory agencies such as FPC and ICC must issue their draft environmental impact statements under ar — P ® 39 NEPA “prior to any formal hearings” (See 455 F.2d 419). These same rules of constitutional law directly ap- plicable to proceedings before the Commission also undoubtedly explain why the Interstate Commerce Commission itself felt constrained to schedule ‘‘fur- ther hearings”’ in City of New York v. United States, U.S.D.C. E.D.N.Y., 1972, 344 F. Supp. 929, when the district court in New York rejected the Commission’s earlier order approving the abandonment of railroad facilities pending full compliance by the Commission with NEPA. Under obvious scrutiny of the district court in New York, the Commission let all interested _ parties participate fully in these ‘‘further hearings” _ which dealt with the ‘‘environmental questions”’ there | raised under NEPA (See 344 F. Supp. 931). Totally unlike its arbitrary, capricious hearing denial in the ease at bar, the Commission proceeded as follows in City of New York, supra, (See 344 F. Supp. 936-939) : ‘*Together with its order directing further hear- ings following remand, the Commission issued a draft environmental impact statement to provide a basis for exploration of the Railroad’s abandon- ment at the hearing. ... ‘* Although not compelled to do so by the terms of our remand, see 337 F. Supp. at 164, the Com- mission held five days of hearings, a substantial portion of which were focused on the environ- mental questions. All parties were given full op- portunity to present evidence on the environmental aspects of the case... . ‘“‘This procedure was consonant with that man- dated in Greene County Planning Bd. v. FPC, supra, 455 F.2d at 422, where the Second Circuit 40 held that the FPC violated ““NEPA by conducting hearings prior to preparation by its staff of its own impact statemnt.’’ (Italics supplied) Clearly, therefore, the Commission’s refusal to hold hearings in the case at bar after issuance of its Order of Investigation on November 7, 1972 violated appel- lees’ rights under the Fifth Amendment; and the Com- mission’s failure to hold any hearings whatsoever after issuance of its draft environmental impact statement on March 5, 1973, violated NEPA, as construed by the Second Circuit in Greene County, supra—a_ case wherein this Court denied certiorari. Moreover, the Commission’s procedures in this case were simultaneously violative of the Interstate Com- merce Act (Title 49 U.S.C. § 15(7)), the Administra- tive Procedure Act (Title 5 U.S.C. §§ 554-556), and the Guidelines issued by the President’s Council on Environmental Quality pursuant to NEPA (40 C.F.R. § 1500.7(d), effective 1/28/73, 40 C.F.R. 1500.14). The Commerce Act (49 U.S.C. § 15(7)) plainly re- quires a “‘full hearing” in all rate cases of this nature after the Commission decides to investigate ‘‘the law- fulness of such rate.’’ Indeed, in Atchison, Topeka & Santa Fe Railway Co. v. United States, 284 U.S. 248, 262 (1932), a case like the instant action involving a reopened rate proceeding, this Court ruled that the Commerce Act requires the Commission to hold a full, fair hearing, even in reopened rate proceedings under the Act, whenever such a hearing ‘‘is required by the essential demands of justice.’’ The Court admonished the Commission (284 U.S. 262): ‘‘In the discharge of its duty, a fair hearing is a fundamental requirement. ... In the instant cH | —— = i 41 proceeding, the [original] hearing accorded re- lated to conditions which had been radically i changed, and a hearing [in the reopened proceed- 4 ing] .. . would have permitted the presentation " of evidence relating to existing conditions, was denied. We think this action was not within the permitted range of the Commission’s discretion, but was a denial of rights. The order of the Com- mission which ‘was thus made effective, and the ensuing supplemental order, cannot be sustained.”’ In the case at bar, the Commission’s November 7, 1972 Order of Investigation reopened Ex Parte 281 for ‘*(i) the purpose of re-evaluating the environ- mental effects under NEPA of the increased freight rates ordered by the Commission’s report of September 27, 1972, and (ii) the purpose of investigating any and all other matters and issues with respect to the Jaw- fulness of the . . . schedules under the Interstate Commerce Act.’’ Ergo, appellees were patently entitled to the hearing they demanded in the said reopened investigation un- der both NEPA and the Commerce Act itself, and the Commission violated the latter as well as the former when it flatly denied that right. The same conclusion is equally compelling under the Administrative Procedure Act (5 U.S.C. §§ 554-556) and the CEQ Guidelines under NEPA. Under 5 U.S.C. § 554(a), (ec) hearings must be granted, in accordance with 5 U.S.C. §§ 556 and 557, ‘‘in every case of adjudi- cation required by statute to be determined on the record after opportunity for agency hearing.”’ Here, a hearing is required by the Commerce Act, so 5 U.S.C. a a rien eneene en nett a 42 554-556 are entirely apposite to the case at bar. Under 5 U.S.C. § 556, it is provided: ‘‘A party is entitled to present his case ... by oral or documentary evidence, to submit rebuttal evidence, and to conduct such cross-examination as may be required for a full and true disclosure of the facts.’’ ‘ Finally, under 5 U.S.C. § 556(e), it is provided: ‘‘The transcript of testimony and exhibits, to- gether with all papers and requests filed in the proceeding, constitutes the exclusive record for decision... When an agency decision rests on official notice of a material fact not appearing in the evidence in the record, a party is entitled, on timely request, to an opportunity to show the con- trary.”’ (Italics supplied) All of these rights and protections were denied ap- pellees in this case when the Commission arbitrarily ; and unlawfully refused to conduct any hearings after . it reopened Ex Parte 281g November, 1972 and sched- uwled a further investigation, under both the Commerce Act and NEPA. In Northeast Airlines, Inc. v. Civil Aeronautics Board, CCA 5, 1965, 345 F.2d 484, cert. denied 382 U.S. 845, 86 S.Ct. 41 (1966), a case wherein the CAB reopened a case theretofore heard by the Board, CAB elected to rely exclusively on its own data and statistics and it denied Northeast Airlines’ demand for a hearing under the Administrative Procedure Act. The Fifth Cireuit rejected the Board’s — stating at 345 F.2d 487: ‘‘Having opened the door to new data, the Board was obliged to take a full look. No useful pur- pose would be served in our discussing each aspect, but we suggest that fairness may require that 43 Northeast’s opportunity to rebut and explain what the Board has already noticed should extend to as recent developments as may be available at the date of the hearing. ...”’ In conclusion, the Court’s attention is directed to the Guidelines under NEPA published by CEQ and made effective and applicable ‘‘to all draft and final impact statements filed with the Council after J anuary 28, 1973.’’ These guidelines state, at 40 C.F .R. 1500.7 (d) : ‘“‘Agency procedures developed pursuant to § 1500.3(a) of these guidelines should indicate as explicitly as possible those types of agency deci- sions or actions which utilize hearings as part of the normal agency review process, either as a re- sult of statutory requirement or agency practice. To the fullest extent possible, all such hearings shall include consideration of the environmental aspects of the proposed action. Agency procedures shall also specifically include provision for public hearings on major actions with environmental im- pact.... In deciding whether a public hearing is appropriate, an agency should consider ... . the degree of interest in the proposal, as evidenced by requests from the public and from Federal . . . authorities that a hearing be held... . Agencies should make any draft environmental statements ' to be issued available to the public at least fifteen (15) days prior to the time of such hearings.” (Italics added) A fortiori, the Commission’s final environmental im- pact statement of May 2, 1973 in Ex Parte 281 is un- constitutional, completely unlawful and it must there- fore be rejected by this Court (See: Atchison, Topeka & Santa Fe Railway Co. v. Wichita Board of Trade, 93 8.Ct. 2367, 2374 wherein this Court recently re- | affirmed the rule that decisions of the Commission in cal rate cases may be rejected by the courts ‘‘upon a show- ing that they ... were made without a hearing, exceed constitutional limits, or for some reason amount to abuse of power’’). | Vz. The Commission Has Constantly Exhibited Hostility and Con- tempt for the Requirements of NEPA, Both in This Case and in Other Statutory Proceedings. Accordingly, the District Court Properly Exercised Its Judicial Power to Review Not Only the Form of the Commission's Belated Asserted Compliance With NEPA in This Case, but the Substance as Well. The Commission, over the years since 1970 when NEPA became effective, has exhibited almost com- plete disdain and contempt for the requirements of that federal statute. As early as 1971, it sought to intervene in Greene County Board v. Federal Power Commission, supra, in support of the Federal Power Commission’s attempt to avoid regulatory agency com- pliance with NEPA. ICO’s intervention was rejected ; the Second, Circuit overruled FPC’s position, and this Court denied certiorari. In City of New York v. United States, supra, a 1972 case involving proceedings before the Commission it- self, ICC directly defied NEPA and endeavored to license the abandonment of railroad facilities without the preparation of a supporting impact statement. A three-judge court in New York criticized the Commis- sion for its ‘‘slow reaction’? to NEPA, and stated the Commission is powerless to ‘‘disregard . . . the law’’ _ (337 F. Supp. 158-160). The Court remanded the case . to the Commission, stating, at 337 F. Supp. 160: “‘To permit an agency to ignore its duties under NEPA with impunity because we have serious OIE AE Siok, IROPR SE AC CRN se DSO SCOTIA TEMES UI AM Dee rl ORES ese MrT Ie et at eee 45 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 Commis- sion be required to follow the steps set forth in § 102, even if it seems likely that these 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 decision in City of New York, supra, was rendered on January 20, 1972, the Commission never- theless proceeded just 12 days later (on February 1, 1972) in this case to license another increase in rates for the transportation of recyclables without preparing any impact statement under NEPA. The Commission instead arbitrarily continued to rely on the same type of terse, unsupported conclusion it espoused in City of New York, to wit, that, in its opinion, the approved new increase ‘‘would have no significant effect .... on the quality of the human environment withirthe mean- ing of NEPA” (See 341 I.C.C. 288, 314). The Commission’s continued defiance of the law in Ex Parte 281 thus led to the commencement of this action, and although the Commission promised both the district court and the Chief Justice of this Court that it would fully comply with all of the requirements of NEPA before it issued its fina] report in this case, the record shows that once again, the Commission rendered that report on October 4, 1972 without pre- paring a final impact statement under N EPA. In the meantime, in still another case simultaneously pending in New York, the Commission, contrary to the 46 position taken by the Department of Justice in the same case, contended that it had no obligation even to prepare a NEPA impact statement until it was ready to reach its final decision in a case—i.e. ICC argued it had no duty to prepare its statement at any earlier stage of the proceedings (See Harlem Valley Transpor- tation Association v. Stafford, Chairman, ICC, 500 F.2d 328 (1974). That contention was bluntly rejected by the courts in New York, and the Second Circuit stated: ... (W)hile we recognize there are limits to what may reasonably be expected from an agency, we cannot excuse honcompliance with NEPA such as the ICC here seeks to justify.”’ Ergo, it is plain, we submit, in light of this rec- ord which demonstrates constant hostility and con- tempt on the part of the Commission for the require- ments of NEPA, both in this case and in all others recently before the courts, that the district court clearly had the power and duty to review not only the form of the Commission’s alleged belated compliance with NEPA in the case at bar, but the substance of that compliance as well. In this regard, the courts have held that federal agencies must at least make a good faith effort to com- ply with NEPA (Environmental Defense Fund v. Corps of Engineers, E.D. Arb., 1972, 342 F. Supp. 1211, .1214). NEPA does not permit impact statements to be slanted or biased and it utterly precludes those which amount to mere pro forma rituals, since clearly such statements negate the requirement of good faith (Hn- vironmental Defense Fund, Inc. v. Corps of Engineers, supra, at pg. 1214; Calvert Cliffs Coordinating Com- mittee v. Atomic Energy Commission, supra, at pgs. . all a sinbiit Caliteean DO at eats 47 1114, 1117, 1128). Indeed, when an impact statement falls into one of the last mentioned categories, it must be rejected by the courts because of NEPA’s insistence ‘“‘upon unbiased and open-minded evaluations in spite of the Agency’s contradictory roles” (District of Co- lumbia v. Volpe, 3 E.R.C. 1143 (D.C. Cir., 1971); Sierra Club v. Froehlke, D.C. Wis., 1972, 345 F. Supp. 440, 445). Here, it is plain, we submit, that the post-mortem Environmental Impact Statement released by the Com- mission 7 months after the rendition of its final report in Ex Paxte 281 was not ‘‘a good faith effort to comply with NEPA.”’ Rather, it was a mere pro-forma ritual, the sole purpose of which was to rationalize the Com- mission’s earlier conclusion that the rates for transpor- tation of recyclables should suffer still another % in- - crease and that such action, blindly taken exclusively with the interests of the railroads in mind, allegedly would not (in the Commission’s judgment) adversely affect the environment. Any doubt about the absolute validity of this assessment is dispelled by the following comments filed by other Federal Government agencies regarding the Commission’s post-mortem production: (i) U.S. Department of Commerce— ‘. . . the draft impact statement was written to support the prior conclusions of (the) Commission and not to inform the public’’ (App. 100). (ii) General Services Administration— “GSA does not believe recyclables should be required to bear their full share of the earriers’ revenue re- quirements. It suggests that where it can be de- termined that reduced rail freight levels might reasonably be expected to result in increased re- cycling of solid wastes, serious consideration should be given to the establishment of rate ceil- 48 ings on such traffic no lower than the compensa- tory level’? (App. 271). or (iii) U.S. Department of Interior— ‘. . . the involved statement does not provide a careful multi-disciplinary examination ofthe environmen- tal effect’’ (App. 274). (iv) Environmental Protection Agency— ‘‘EPA has classified the draft environmental impact state- ment as Category 3—Inadequate. ... (T)he state- ment does not adequately assess the environmental impact of the proposed freight rate increases on the movement of secondary materials; and... it does not consider in reasonable detail the range of alternatives to the proposed action’’ (App. 275). (v) President’s Council on Environmental Qual- ity— ‘‘... (T)he draft statement fails to consider how freight rates affect longrun decisions on in- vestment in scrap-intensive production facilities ... and it finds it difficult to believe that the eco- nomic well-being of the Nation’s railroads is at stake in this proceeding. CEQ does not under- stand why the Commission cannot design incentive rates for recycling.”’ * - Moreover, the record before the Court demonstrates that two members of ICC itself dissented from the Commission’s order which approved the post-mortem impact statement, and both suggested that a mora- torium should be placed on any further rate increases for recyclables until the Commission comes to grips with the basic rate disparities which grow wider with each % increase in the rates (App. 237, 238). Based on this record, we respectfully submit it was absolutely incumbent upon the district court to review not only the form, but also the substance of the Com- mission’s post-mortem alleged compliance with NEPA — 49 in this case. And, upon such review in this case, we submit further that it was wholly correct and proper for the court to find— (1) ‘*The Commission’s mode of preparation and utilization of the challenged impact statement here violated both Section 102(2)(C)’s funda- mental purpose and .. . specific command”’ (371 F. Supp. 1299). ¢ (2) ‘*The Commission . . . neither intended to give nor actually gave full reconsideration to the question of thé recyclable rate increase’ (371 F. Supp. 1299). (3) ‘*[The Commission’s statement] makes no attempt to integrate the considerations of national transportation policy justifying the rate increase with the environmental considerations analyzed in the impact statement’”’ (371 F. Supp. 1299). (4) ‘‘[The Commission] refused to hold... a hearing to reconsider the increase on recyclables. ..”’ (371 F. Supp. 1300). (5) “. . . a reader of the statement must be struck by the combative, defensive and advocatory language and style in which it is written’? (371 F Supp. 1302). (6) ‘‘We find the Commission’s failure to alter its draft impact statement in response to three of ¥ the critical comments of other federal agencies par- ticularly troublesome’’ (371 F. Supp. 1302). (7) “*. . . (T)he draft statement’s . . . most fundamental and important deficiency (is) the limitation of its analysis to the marginal impact of the most recent rate increase with no discussion of whether the underlying rate structure itself sig- nificantly affects the environment” (371 F. Supp. 1303, 1304). 50 Considering the aforementioned fact that constant annual % rate increases in the last few years have seri- ously aggravated the nationwide average disparities in freight rates for the transportation of competing re- eyclables and virgin natural resources—to wit, (a) in the case of wastepaper and pulp, from 13.9¢ per ewt. in 1959 to 28¢ per ewt. in 1975 in favor of pulp, and (b) in the case of non-ferrous metal ores and scrap, from 13.3¢ per ewt. in 1959 to 24¢ per ewt. in favor of the virgin ores— it was likewise perfectly correct and proper for the district court to hold, at 371 F. Supp. 1304: ‘‘We fail to understand how any consideration of the environmental impact of approving the re- eyclable rate increases could be full without an analysis of how the underlying rate structure itself affects the environment. It is the underlying rate structure which the percentage increases aggra- vate; if this structure contributes to the degrada- tion of our environment, then the increases would at least presumptively aggravate that contribution. ... Any impact on the underlying structure could be eliminated by holding down recyclable rate in- ereases each time the railroads requested a general rate increase. The Commission’s failure to hold down the rate increases on recyclables would thus have a cumulative impact on the environment.”’ (Italics supplied.) These findings by the court are in full accord with the position taken by 5 federal agencies in this case and by 2 of the ICC Commissioners. They are like- wise fully responsive to the constant positions taken in recent years by the League of Cities-U.S. Confer- ence of Mayors, Council of State Governments, Na- ts 51 tional Gio laches on Materials Policy, and the Presi- dent’s Citizens Advisory Committee on Environmental Quality, all of which are a matter of record in this case. Ergo, the district court’s decision, based on volumi- nous supporting evidence before the Court, should plainly be affirmed. VI. The Nation’s Urgent Interests in Resource Conservation, Re- source Recovery, Restriction of Unnecessary Foreign Imports of Critical Materials and Energy Conservation Will All Be Seriously Damaged If This Court Is Misled by Some of the False Assertions Presently Advanced by Appellants in This Case. Before concluding, NARI feels constrained to direct the Court’s attention to some of the inaccurate, base- less contentions advanced by appellants in this case, not only because they thréaten a fair and just decision in the instant action, but also because, if believed, they could result in serious adverse impacts on our nation’s vital, urgent interests in resource conservation, recyel- ing, restriction of unnecessary foreign imports of critical raw materials and energy conservation. (1) THE COMMISSION’S ASSERTION THAT THE BASIC RATE STRUCTURE FOR RECYCLABLE COMMODITIES IS THE SUBJECT OF INVESTIGATION IN EX PARTE 270. Throughout its brief, the Government attempts to claim that Ex Parte 270, a long, malingering study ICC has been conducting off and on for the past 4 years and which will apparently continue for another 4, is the proper place for an examination of the basic rate struc- ture for recyclables (Govt’s brief, pgs. 16, 17; 41). The record before the Court, however, demonstrates that when NARI applied to Commissioner Hardin, the ICC : 2 52 | Commissioner-in-Charge of Ex Parte 270 on No- vember 7, 1973 for assurance that the basic rate — structure for recyclable wastepaper, textiles and non-ferrous serap would be included in the Er Parte 270 rate investigation proceedings (See Ap- pendix A hereto), Commissioner Hardin refused to include those commodities in the Ez Parte 270 investigation proceedings because allegedly the Com- mission’s ‘‘investigative abilities are limited in terms ~_ of money and manpower.’’ Commissioner Hardin went Ps to state (Appendiz B hereto) : ‘With respect to your... suggestion that a(n) ... investigation be instituted with respect to non- ferrous metal scrap, wastepaper, and the virgin competitive products, ...I am not in a position to advise . . . when and if such an investigation will be instituted... . ‘‘Rather than await an initiating response from the Commission, . . . I suggest that you meet with the railroad industry in order to determine whether or not it is possible to agree upon a relevant data base and limit the areas of controversy... .”’ As of this date, the Commission has not embarked upon any investigation of the rate structure for these basic recyclable solid waste materials, and thus it is absolutely misleading for the Government to take the position it has regarding Ex Parte 270 in its brief. (2) THE GOVERNMENT'S ASSERTION THAT CONSTANT RATE INCREASES FOR RECYCLABLES ARE NECESSARY BECAUSE THE RAILROADS ARE IN DESPERATE FINANCIAL CONDI. TION. The Court certainly knows that fortunately - only some of the nation’s railroads have been mismanaged to the point of financial embarrassment. Railroads such 53 as the Southern System, the Burlington N orthern, the Southern Pacific, the Union Pacific, the Chessie Sys- tem and others are operating with handsome profits. SS aN ee et Oe Te ee ee Moreover, in each of the general revenue proceed- ings in recent years, the railroads themselves have either totally or partially exempted long lists of com- modities, inclading some virgin commodities such as ' pulp which competes with waste-paper, from the re- ' quested rate increases. The point, therefore, is that the rate increases sought on recyclables are not essential to the continued opera- tion of the railroads, and it is exceedingly unreason- able and damaging for the railroads constantly to ag- gravate the existing rate disparities against recyclables by increasing the rates for those commodities, while exempting scores of other commodities for reasons known only to the railroads themselves. Finally, the Commission itself recently received extensive evidence in Ex Parte 310— Nationwide Freight Rate Increases, 1975, which demonstrates, as the Commission’s records already reflected, that typi- cally, virgin commodities are traveling on the nation’s railroads at rates far below the railroads’ variable costs, while recyclable commodities are concomitantly compelled to pay rates that far exceed the railroads’. costs. How, therefore, could the Commission possibly justify any further increases in transportation rates for recyclables when virgin commodities are carried at rates substantially below the railroads’ costs? And, how can the railroads justly demand further increases for the carriage of recyclables when daily they transport long lists of other commodities at rates which do not even defray their own costs? . ee 54 CONCLUSION - The two appeals should be dismissed for lack of jur- isdiction. If the Court reaches the merits, the district court’s judgment should be affirmed, or in the alterna- tive, this Court should rule that the 1972 rate increases on recyclables, approved by the Commission’s order issued on October 4, 1972, without the preparation of any impact statement under NEPA, are unlawful; and the Commission’s post-mortem attempt to legalize those unlawful rate increases is unsustainable. Respectfully submitted : Epwarp L. MERRIGAN Attorney for Appellees NARI et al. 888 17th Street, N. W. Washington, D. C. 20006 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386414_0458%3A12. Public record. Not legal advice.