ON PETITION FOR REVIEW OF AN ORDER OF THE INTERSTATE COMMERCE COMMISSION (Ex Parte No. 289)
Before Adams, Weis and Higginbotham, Circuit Judges.
Petitioners in these consolidated cases*fn1 request us to set aside an order of the Interstate Commerce Commission (ICC) entered on April 7, 1977, in Ex Parte No. 289, "Remittance of Demurrage Charges by Common Carriers of Property by Rail."*fn2 By its order, the ICC adopted a regulation requiring the remittance to freight car owners of all demurrage charges collected by the delivering carrier that are in excess of ten dollars per day per car.*fn3 Specifically, petitioners maintain that the order exceeds the statutory power of the agency; that it is arbitrary, capricious, and without rational basis; and that it fails to comply with the Administrative Procedure Act (APA)*fn4 and the Interstate Commerce Act (ICA).*fn5
For the reasons set forth below, we deny petitioners' request.
The regulation at issue is a recent attempt by the ICC to deal with the longstanding shortage in this country of railroad freight cars.*fn6 The car shortage, resulting from both an insufficient supply and an inefficient utilization of freight cars, is an outgrowth of the present national carpool system. Under the system, the freight cars that are owned by Individual Railroads constitute a single, common pool, used by All rail carriers. Thus, the same loaded freight car is transported over the lines of different connecting carriers to the ultimate destination point. While more efficient than the earlier practice of shifting freight from the car of one carrier to the car of another, the pool system has at the same time made it more advantageous economically for railroads to utilize the freight cars of the originating carriers than to purchase and maintain their own. The national freight car shortage is the acknowledged result.*fn7
During the past several years, the ICC has taken a number of major actions in an attempt to ease the car shortage: (1) it has adopted various "car service" rules to regulate the placement and movement of freight cars;*fn8 (2) it has established a uniform schedule of "per diem" charges, which are those incurred daily by one railroad for the use of another's cars;*fn9 (3) it has added an "incentive" element to the basic per diem rate;*fn10 and (4) it has imposed an increase in demurrage charges.*fn11
Ex Parte No. 289, the proceeding in question here, was instituted in October 1972, to determine whether remittance of the penalty portion*fn12 of the demurrage charges to the carriers owning the cars would create an added incentive for such carriers to acquire additional cars. Following notice in the Federal Register*fn13 and submission of written statements by a number of the ninety-seven participating parties, the ICC, on April 25, 1975, issued its Interim Report.*fn14 The Report adopted the principle of the proposed remittance rule and reopened the proceeding for receipt of additional evidence regarding the plan's feasibility and costs. Following notice of the proposed further rulemaking,*fn15 one hundred-eighteen parties submitted additional information to the ICC.
On April 7, 1977, the ICC issued its Report and Order in Ex Parte No. 289.*fn16 It concluded that adoption of the proposed remittance rule would be beneficial to the public and the rail industry, as well as administratively feasible. Consequently, the agency directed that the rule become effective on July 6, 1977. However, the effective date was subsequently stayed by the ICC pending judicial review.
The principal argument made in support of the petition to set aside the order in question is that the ICC lacks a statutory base to promulgate the demurrage remittance rule. The ICC, in turn, contends that it does have the requisite authority under 49 U.S.C.A. § 1(6) (Supp.1978), as amended by the Rail Revitalization and Regulatory Reform Act of 1976 (4R Act).*fn17
The 4R Act added a provision to § 1(6) which states that "demurrage charges shall be computed, and rules and regulations relating to such charges shall be established, in such a manner as to fulfill the national needs with respect to (a) freight car utilization and distribution, and (b) maintenance of an adequate freight car supply available for transportation of property."*fn18 Petitioners assert that the statutory directive that "demurrage charges shall be computed" cannot properly be interpreted to authorize the ICC to "divide" demurrage revenues between the delivering carrier and the owner of the car.
In analyzing a question of statutory construction, the Supreme Court has said that it accords deference to the interpretation given the statute by the officers or agency charged with its administration. Udall v. Tallman.*fn19 While the agency's interpretation is by no means controlling,*fn20 to sustain the ICC it is necessary only that we find its interpretation to be a reasonable one.*fn21 As Tallman recognized, "we need not find that (an agency's) construction is the only reasonable one or even that it is the result we would have reached had the question arisen in the first instance in judicial proceedings."*fn22
Petitioners in the present situation argue that the plain meaning of the phrase "demurrage charges shall be computed" should control, that previous use of the term by the ICC does not indicate an understanding that it confers upon the agency the power to divide demurrage revenues, and that the division of revenues is such a substantial change from prior ...