the Staggers Rail Act indicates supporters of the legislation considered these potentials for abuse could be effectively dealt with by the ICC.
G & T urges, as an interpretation of the legislative history, that Congress fully intended to protect individual shippers from abuse by retaining traditional common law protections. G & T points to the statements of Senator Exon during floor debates of the Staggers Rail Act in which the Senator indicated the legislation contained adequate protection for smaller or captive shippers: "All of the protections in the Senate bill as passed on April 1 of this year are contained in the conference agreement. These include discrimination protection, the common carrier obligation, car limitation provision, and the contract rate advisory service for shippers of agricultural, forest, and paper products." Yet these protections were all specifically built into the Staggers Rail Act and were to be enforced by the ICC. There is simply no basis for claiming Congress intended these protections be maintained and enforced independently by the courts. See, e.g., 49 U.S.C. § 10701 (rates must be reasonable); 49 U.S.C. § 11101 (common carriers must provide service on reasonable request); 49 U.S.C. § 10741 (common carrier may not discriminate as to rates or service among similar shippers). The legislative history establishes no more than that Congress expected the legislation to achieve the goals of deregulation with a minimal amount of abuse; such abuse was to be addressed by the ICC.
While no court has squarely addressed the issue now before this Court, decisions in sufficiently analogous situations bolster the conclusion that the Congressional intent behind the Staggers Rail Act was to have the ICC monitor both the deregulation of the railroad industry and the inevitable abuses springing from that deregulation. As a preliminary matter, the Supreme Court has stated that the courts should exercise restraint in reviewing aspects of national transportation policy, as established by or delegated to the ICC: "Congress has therefore delegated the enforcement of transportation policy to a permanent expert body and has charged it with the duty of being responsive to the dynamic character of transportation problems. . . . It is not for us [the Court] to tinker with" one element of that national policy. Board of Trade v. United States, 314 U.S. 534, 546, 548, 62 S. Ct. 366, 372, 86 L. Ed. 432 (1942). The Supreme Court has, more recently, emphasized the importance of allowing the ICC to handle issues involving the regulation of carrier rates. In reversing a Court of Appeals decision interfering with the ICC's authority over carrier rates, the Supreme Court stated: "[The Court of Appeals' action] undermines the Commission's ability to exercise the primary jurisdiction delegated to it by Congress to insure equitable and uniform rates." Burlington Northern Inc. v. United States, 459 U.S. 131, 142, 103 S. Ct. 514, 521, 74 L. Ed. 2d 311 (1982). Although these cases arose prior to the ICC's invocation of its exemption power, they demonstrate a long-standing recognition that maintenance and enhancement of national transportation policy has long been properly within the immediate jurisdiction of the ICC.
The Supreme Court's decision in Transcontinental Gas Pipe Line Corp. v. State Oil and Gas Bd., 474 U.S. 409, 106 S. Ct. 709, 88 L. Ed. 2d 732 (1986) (" Transco "), while not directly on point, provides some insight as to policies courts should consider in determining Congressional intent where Congress has authorized deregulation in a previously highly regulated field. The case required a judicial determination of Congressional intent behind enactment of the National Gas Policy Act of 1978, 15 U.S.C. § 3301 et seq., a statute which in part revoked the power of the Federal Energy Regulatory Commission ("FERC") to regulate aspects of sales of natural gas. The case arose as a challenge to a Mississippi State Gas and Oil Board ("Board") order. The order required a purchaser of natural gas from a single source that had several producers to purchase gas without discrimination in favor of any one producer of the source's gas. The state courts had affirmed the Board order, holding that when Congress determined to preclude federal regulation over such sales of natural gas, it did not intend to preempt state regulation over such sales of natural gas.
The Supreme Court reversed the state courts, holding that when Congress decided to curb federal regulation, thereby giving "market forces a more significant role in determining the supply, the demand, and the price of natural gas," Congress did not intend "to give the states the power it had denied FERC." Id. at 717. Although the decision is arguably not controlling insofar as it involved review of a decision of a state's regulatory authority rather than review of a court invoking common law principles, several related underlying concerns raised by Justice Blackmun in the opinion appear to have general applicability to the case at hand.
One such concern was whether allowing state regulation (in the case at bar this concern would be with judicial intervention via common law) in an area Congress intended to relieve of federal regulation would conflict with the underlying Federal interest in deregulation. A second inquiry was whether Congress intended to give states (in the case at bar this concern would be with the courts) regulatory authority Congress had denied to Federal authorities. A related concern was whether permitting the state (in the case at bar, the courts) to regulate where Federal authorities could not, would disrupt the uniformity of the Federal regulatory scheme. Id. at 717-18. Deciding that each of these concerns warranted against allowing the states to step in where Congress had caused the federal authority to step out, the Court held: "In light of Congress' intent to move toward a less-regulated natural gas market, its decision to remove jurisdiction from FERC cannot be interpreted as an invitation to the States to impose additional regulations." Id. at 717.
Each of the concerns raised in Transco is applicable to the case at bar. Recognizing a judicial common law cause of action for discriminatory rates would in effect give license to de facto judicial regulation over common carrier rates. This is regulation that Congress, through the ICC, has decided is unnecessary at least until it appears the ensuing abuses cannot otherwise be curbed. Certainly permitting adjudication of discriminatory rate claims would interfere with the Congressional intention that abuses flowing from deregulation be uniformly corrected, as those abuses surface, by ICC corrective action. Although it is true by definition adjudication is a legal process distinct from administrative regulation, in terms of practical application the inevitable effects of adjudication may not be so distinct. As the Supreme Court pointed out in Chicago & North Western Transportation Co. v. Kalo Brick & Tile Co., 450 U.S. 311, 326, 101 S. Ct. 1124, 1134, 67 L. Ed. 2d 258 (1981): "A system under which each State could, through its courts, impose on railroad carriers its own version of reasonable service requirements could hardly be more at odds with the uniformity contemplated by Congress in enacting the Interstate Commerce Act."
The problems arising when various state and Federal bodies and courts become involved in reviewing issues such as the one now before this Court, were aptly pointed out in W.D. Lawson & Co. v. Penn Central Co., 456 F.2d 419 (6th Cir.1972). That case involved common law and statutory claims arising from the destruction of property shipped by the defendant railroad. In ruling that the plaintiff's common law claims had been pre-empted by Federal statutory remedies, the court quoted the Supreme Court's decision in Adams Express Co. v. Croninger, 226 U.S. 491, 33 S. Ct. 148, 57 L. Ed. 314 (1913):
'Some States allowed carriers to exempt themselves from all or a part of the common-law liability, by rule, regulation, or contract; others did not; the Federal courts sitting in the various States were following the local rule, a carrier being held liable in one court when under the same state of facts he would be exempt from liability in another; hence this branch of interstate commerce was being subjected to such a diversity of legislative and judicial holding that it was practically impossible for a shipper engaged in a business that extended beyond the confines of his own State, or for a carrier whose lines were extensive, to know without considerable investigation and trouble, and even then oftentimes with but little certainty, what would be the carrier's actual responsibility as to goods delivered to it for transportation from one State to another.' Quoting, Southern Pacific Co. v. Crenshaw [Bros.], 5 Ga.App. 675, 687, 63 S.E.Rep. 865.
W. D. Lawson, 456 F.2d at 422. Given the legislative history to the Staggers Rail Act previously cited, it cannot be said Congress intended to return to a state-by-state regulatory scheme by reintroducing common law remedies for allegedly discriminatory rates.
Although the March 5, 1986 Decision is not binding on this Court, its views on the scope of its jurisdiction under the Act are entitled to due respect. See Blum v. Bacon, 457 U.S. 132, 141, 102 S. Ct. 2355, 2361, 72 L. Ed. 2d 728 (1982). The ICC's conclusions support the position that Congress intended, and the ICC understands Congress to have intended, that even after the ICC had invoked its exemption authority to deregulate a segment of the railroad industry, the ICC remained the principal authority responsible for interpreting and applying national transportation policy. As pointed out by the ICC: "If another body were allowed to replace the regulatory restrictions dismantled at the Commission, the agency's exemptive actions would be nugatory. Worse, the potential for variation and conflict among various decision-makers could make the post-exemption regime more restrictive of rail carriers than the one suspended by the exemption." March 5, 1986 Decision at 5. The ICC's point is well taken. If aggrieved shippers could resort to the courts for relief from discriminatory rates resulting from abuses under the deregulatory scheme, the ICC may never have an opportunity to review such abuses and address them. Such a result is clearly contrary to the evident Congressional intent behind the ICC's exemption-revocation authority.
G & T cites to Nader v. Allegheny Airlines, Inc., 426 U.S. 290, 96 S. Ct. 1978, 48 L. Ed. 2d 643 (1976), as support for its position that common law remedies remain available to aggrieved shippers despite the presence of an arguably controlling preclusive regulatory scheme. In Nader, the plaintiff had been "bumped" from an airline flight, despite his confirmed reservation. The plaintiff asserted common law tort claims and statutory claims against the airline. The Court of Appeals ruled, inter alia, the District Court should have withheld decision on the common law claim pending a determination by the Civil Aeronautics Board of plaintiff's statutory claim. In reversing the Court of Appeals and allowing the plaintiff's common law tort claims to proceed, the Supreme Court explained "we are not faced with an irreconcilable conflict between the statutory scheme and the persistence of common-law remedies. . . . The court in the present case . . . is not called upon to substitute its judgment for the agency's on the reasonableness of a rate -- or, indeed, on the reasonableness of any carrier practice." Id. at 299-300, 96 S. Ct. at 1984-1985.
As has already been discussed, however, G & T's position in this action that this Court should entertain its common law claim of rate discrimination does irreconcilably conflict with the underlying deregulatory scheme enacted by Congress and implemented by the ICC. Contrary to the situation in Nader, this Court is being asked to interpret the reasonableness of a common carrier's practice. The legislative history suggests this inquiry is to be brought before the ICC in a challenge to the underlying exemption.
In sum, G & T claims it is the victim of discriminatory rates. If such rates are in fact being charged, competition in the transportation industry is not operating effectively as Congress and the ICC expected it would when the ICC issued the exemption for carriers of agricultural products. Consequently, Conrail is allegedly in a position where it can effectively abuse its monopoly power to the detriment of G & T and other similarly situated shippers. This is precisely the type of abuse Congress intended the ICC to address "after the fact" of deregulation. H.Conf.Rep. No. 1430, 96th Cong. 2d Sess, reprinted in 1980 U.S. Code Cong. & Ad.News 4110, 4137. Conrail's motion to dismiss G & T's common law claim of rate discrimination is granted.
B. G & T's Motion to Restore Claims Under the Act
Plaintiffs have moved the Court to restore those aspects of the original complaint asserting that Conrail's discriminatory rates constitute an effort to deny plaintiffs their statutory right to pursue liability claims for goods damaged while being shipped. 49 U.S.C. § 11707 provides shippers the right to pursue such damage claims, and 49 U.S.C. § 10505(e) provides that no ICC exemption decision can deny shippers such right. G & T claims that Conrail's increased rates seek to deny indirectly a right that may not be denied directly. Conrail counters that Judge Ackerman has already squarely examined and rejected this claim, and nothing new has been added to the record to warrant rejection of Judge Ackerman's decision.
At oral argument, heard by this Court on October 20, 1986, counsel indicated that G & T's damage claims are being independently pursued in New York proceedings. In his opinion rendered from the bench on September 24, 1984, Judge Ackerman recognized that those damage claims were underway in New York, and rejected the very claim plaintiffs now seek to resurrect: "I am not persuaded by [plaintiff's] arguments. Plaintiffs' damage claims are being independently . . . litigated in separate legal proceedings. These claims will be adjudicated according to the law and amount of plaintiffs' recovery for their alleged losses will be . . . unaffected by the rates charged by defendant in the interim." Ackerman, J., Opinion, filed September 28, 1984, at 11-12. With respect to plaintiffs' damage liability claims, there is nothing new in the record to indicate Judge Ackerman's decision should be overturned. Clearly G & T may continue to actively pursue its damage claims through appropriate channels.
Plaintiffs' attempt to restore this aspect of the original complaint essentially does nothing more than raise the same charge of discriminatory rates against Conrail alleged in its common law claim. As explained earlier in this opinion, Conrail's ability to drive up G & T's rates without fear of losing G & T's business to a competitor carrier is evidence of something amiss in the deregulatory scheme envisioned by Congress and the ICC. As has already been concluded, such irregularities were intended by Congress to be addressed and corrected by the ICC. To hold otherwise would permit every shipper with a grievance against allegedly discriminatory rates, to fashion a claim under the Act that the carrier's rates were designed to curtail the shipper's liability claims. Such a result was not intended by Congress. Because the record before me offers no tenable grounds for readdressing Judge Ackerman's decision on this issue, plaintiffs' motion seeking restoration of Counts III and IV of the complaint is denied.
Counsel for Conrail is to submit an appropriate order.