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National Ass'n of Recycling Indus. v. Interstate Commerce Comm'n

ELR Citation: 8 ELR 20653
Nos. No. 77-1187, 585 F.2d 522/12 ERC 1517/(D.C. Cir., 08/02/1978)

The court vacates an Interstate Commerce Commission (ICC) order which declined to modify existing railroad freight rate structures for recyclable and virgin resource materials.In response to petitions for review supported by the Environmental Protection Agency and the Federal Energy Administration, the court finds that the order did not constitute reasoned compliance with §204 of the Railroad Revitalization and Regulatory Reform Act of 1976, which directed the ICC to modify rates for recyclable and virgin materials not shown by the railroads to be just, reasonable, and nondiscriminatory. The ICC has failed to appreciate that this statutory reversal of the burden of proof erected an evidentiary presumption against the lawfulness of the existing disparate rate structures. In addition, the Commission improperly gave greater weight to railroad profitability than to the environmental and energy goals underlying the mandated rate investigation. The ICC order does not comply with §204 because it does not adequately address the central issue of whether the substantial rate disparities between recyclable and virgin materials are justified by the transportation characteristics of the materials involved. Moreover, the ICC's findings that the existing rate structures were reasonable because the volume of recyclable materials traffic had not diminished and were nondiscriminatory because there is no competition between recyclables and virgin materials were inadequately supported and arbitrary. The case is remanded to the Commission for further proceedings.

Counsel for Petitioner
Edward L. Merrigan
Smathers, Merrigan & Herlong
1700 K St. NW, Washington DC 20006
(202) 785-5300

Counsel for Respondent Interstate Commerce Commission
Kenneth G. Caplan; Robert S. Burk, Deputy General Counsel; Charles H. White Jr.; Frederick W. Read III, Associate General Counsel; Mark L. Evans, General Counsel; Peter A. Fitzpatrick
Interstate Commerce Commission, Washington DC 20423
(202) 275-7312

Counsel for Respondent United States
James F. Ponsoldt, Barry Grossman, Lloyd John Osborn, Carl D. Lawson
Antitrust Division
Department of Justice, Washington DC 20530
(202) 739-5109

Before WRIGHT, Chief Judge, and SWYGERT* and LEVENTHAL, Circuit Judges.