658 F.2d 816 | D.C. Cir. | 1980
Lead Opinion
Opinion for the Court filed by Circuit Judge WILKEY.
Dissenting opinion filed by Circuit Judge MIKVA.
This is a case involving several cognate commodities, each of which is a raw material used by Far East manufacturers of paper products. The three raw materials — recyclable wastepaper, processed woodpulp, and virgin woodchips — -travel westbound across the Pacific at widely divergent shipping rates. Petitioners are shippers who claim that their product, wastepaper, faces prevailing freight rates which are unreasonably high and discriminatory in violation of the Shipping Act of 1916 (the Act).
A Federal Maritime Commission (FMC or Commission) administrative law judge (ALJ) found that the administrative record showed unreasonably high shipping rates that discriminated against wastepaper to the detriment of United States commerce in that commodity in violation of statutory provisions.
The Commission has not provided a reasoned decision based on substantial evidence explaining how it could overrule its ALJ though it accepted the same basic economic predicates as found by the ALJ. The Commission engaged in wholly insufficient analysis of the harm posed to United States commerce by the high shipping rates for wastepaper — the principal flaw being the Commission’s illogical disregard for the pernicious commercial effects which attend unreasonably steep freight costs. Hence, the FMC’s orders declining to disapprove the challenged rates must be set aside. The Commission’s laxity challenges the very character of the Act which, on the one hand, grants considerable license to carriers, and on the other, obligates the Commission to ensure that that license does not work to the disadvantage of the national commerce. The basically facile agency reversal of the ALJ, as evidenced by these formidable and unfounded rate differentials cannot stand.
I. BACKGROUND
On 20 July 1972 the FMC initiated this inquiry to examine alleged violations of the Act.
Since the Commission and ALJ proceedings are incongruous, some basic facts warrant special emphasis, because this appeal poses subtle questions of unsatisfactory, agency showings of substantial evidence and reasoning in the decisionmaking process. To resolve whether the Commission upheld its statutory responsibility to disapprove unreasonable and economically deleterious rates set by a conference of carriers, we need to consider three things: (1) Is wastepaper a commodity similar to others which have more favorable shipping costs?; (2) Do the PWC fixed wastepaper rates conform to standard ratemaking factors of cost, value of service, or other transportation conditions?; and (3) Is commerce in wastepaper impeded by materially less advantageous rates? A brief view of these considerations will allow us not only to see whether the PWC abused the limited rate-making authority it has under the Act, but more critically, whether the FMC has ignored its statutory mandate to define those limits in the public interest and oversee the license granted to shipping conferences.
A. Similarity and Differences of Wastepaper to Woodpulp and Woodchips
Simply and practically speaking, there is really one characterization which separates the various positions asserted in this case: it is that the Commission has been obstinately oblivious to the existence of competition among the various raw materials used in paper production. That competition, or “interchangeability,” the argument would run, is preserved if and only if the transportation costs of those materials are reconciled with their correlative production characteristics. The considerations elaborated below will show that the FMC has viewed with a strange astigmatism the competition which wastepaper can mount against wood-pulp and woodchips in the context of acceptable shipping rates in a generally expanding market.
1. Competition. Before we turn to the effect of price differentials in our analysis of wastepaper as a competitor, it is necessary to check whether, in any event, wastepaper can be used like woodpulp or woodchips in the production process of paper goods: in other words, is there positive cross-elasticity of demand?
The lawfulness of the rate structures was not to be governed by the fact that recyclable products had been unable to attain actual competitive status with virgin products under existing rates. Instead, we believe that to warrant dispositive findings of no competition the Commission was required to find that the various*73 products were neither actually nor potentially competitive for transportation purposes.15
One can only conclude, then, that wastepaper shippers sell in a market where the use of their product is commensurable with — and therefore necessarily comparable to — the only obvious substitutable alternatives around: woodpulp or woodchips.
Competition, or its corollary, interchangeability, is a long run as well as a short run phenomenon. The longer time horizon necessitates a broader perspective on the extent — and even nature — of competition. It affords the potential of demand-side adjustment. Buyers and users of raw materials can and do modify their production processes to accommodate alternative suppliers; they can even diversify their end-product line to offer their customers more attractive goods. Naturally, this broader vision of which goods compete together is contingent on relative price attractiveness (as delivered) and other factors like dependability of supply. In this case, a cheap, abundant and regular source of wastepaper is available. A controlling question, then, for the potential competitiveness of wastepaper concerns the cost of delivery. An unreasonably high rate could only impair competition and suppress perceived interchangeability.
But in the long run, relative shipping rates are one factor that will influence, to some degree, industrial choices to build new plants with production processes that use either higher or lower proportions of scrap versus raw materials. This factor leads logically to a finding of competition when one focuses on the long run.18
Over the long run, metaphorically speaking, even apples and oranges may compete notwithstanding their exclusive characteristics. Orange juice may not ever come out of an apple press, or vice-versa, but manufacturers can always retool, or consumers may always shift their drinking tastes in line with their pocketbooks. Apples and oranges, then, are sufficiently similar for fruitjuicing purposes to imply competition; perhaps more so, we can imagine, do the raw materials of papermaking.
Before continuing we point out what should be apparent, that is, the distinction of our approach from that of the Commission. For the Commission, “detriment to commerce” vel non was a preemptive question, which in this case terminated further exploration.
2. Reasonableness of Rate Differentials. The original Commission Order of Investigation
These rates, it must be emphasized, apply to shipments of either commodity in containers, and Gertrude Stein might have said: “A container is a container is a container.”
3. Effect on Commerce. Approximately two-thirds of wastepaper’s delivered price in the Far East is attributable to shipping charges set by the PWC; the purchaser is paying mostly for freight.
Given that the impact of high PWC rates would be to mitigate the otherwise impressive dimensions of the potential market, we need to know about the conference’s monopoly status. It suffices to point out that the PWC carries about 95 percent of the wastepaper shipments, to the Far East.
“The findings of fact,” wrote the ALJ, “detail the manifest harm suffered by wastepaper dealers as a result of PWC’s rates on that commodity. In sum, the facts establish that wastepaper movement was inhibited and the dealers suffered a loss of profit.”
First, in fixing wastepaper rates so unreasonably high as to be a detriment to commerce, PWC misused its conference agreement to contravene the regulatory purpose of section 18(b)(5). In employing its agreement so injuriously, PWC operated beyond the scope of the Commission’s grant of partial immunity from the antitrust laws. The abusive use of the agreement operated to the detriment of the commerce of the United States and contrary to the public interest. . . .
Second, PWC’s rate making practices were unjustly unfair as between wastepaper and woodpulp shippers, exporters and importers in violation of an express provision of section 15. . . . These illegalities also operated to the detriment of the commerce of the United States and contrary to the public interest.36
II. DISCUSSION
The Commission has taken the position that the mere existence of some improvement in the sales record of wastepaper precludes the required finding of “detriment to commerce.” The Commission may not erect a “substantial evidence” shield around defective investigative and analytic processes. Substantial evidence is, of course, the appropriate standard.
A. Legal Standard of Review
A court undertaking substantial evidence review
The importance of testimonial evidence and witness credibility to the factual findings in the instant litigation endow the ALJ’s vision with particular acuity.
Therefore, even before reaching the specific elements of the “substantial evidence” on which the Commission decided the claims based on sections 15 and 18, we hold that the Commission was arbitrary and capricious in the very way it handled the evidence in the record; the Commission unreasonably disregarded testimonial evidence of some probative value — evidence which was believed by the ALJ, and not contradicted by any evidence of a similar import.
B. Substantial Evidence in the Record Shows a Violation of the Act
In our examination of the record, looking for substantial evidence under the Universal Camera standard, it appears inescapable that unreasonably high shipping rates for wastepaper set by the PWC monopoly detract from United States Commerce in violation of section 18(b)(5) of the Act.
At this point, it is worth noting that the United States, a statutory respondent, as represented in this action by the Antitrust Division of the Department of Justice, has adopted a position directly opposed to the Commission.
A question arises, however, with respect to section 15 of the Act,
Rather, only the reasonableness and deleteriousness of rates undeniably subject to Commission scrutiny and control is in issue. Both sections 15 and 18(b)(5) grant the Commission broad authority to disapprove or set aside rates seen as harmful to the public interest. As the Supreme Court wrote of section 15 in light of the 1961 amendments to the Act,
Section 18(b)(5) allows an analytically simpler approach to the propriety of fixed rates which allegedly affect commerce adversely. The legal question involved here concerns the duty of the Commission to order the cancellation or lowering of rates to fulfill its statutory mandate. Section 18(b)(5) provides the basis for this analysis as well as the agency’s authority to control detrimental rates.
2. Detriment to Commerce. “[W]e believe that a party may show that a rate appears to be unreasonable by reference to a lower rate on a similar commodity which moves in a reciprocal or competitive trade.”
Detriment to commerce has slipped past the Commission here just because of the rigid analytic framework it imposed on the rate structure under consideration. The Commission’s inflexible focus on the fact of some noticeable quantitative increase in wastepaper exports, and viewing this as dispositive, was unduly rigid. The Commission, by its oversimplification, failed to resolve plain factual conflicts in the record,
The Commission should have appreciated the logical relation of “unreasonable” rates and “detriment to commerce.” These criteria are dependent, not independent as the Commission insisted. The logical rela
The Commission’s error is thus two-fold. First, it did not seriously rely on the whole record to reach its decision; a decision which, hence, cannot and does not rest on substantial evidence. Second, the Commission’s methodology has been severely incomplete and arbitrary, its reasoning demonstrably flawed; its rationale does not take us from point A to point X, because it ignores point A to start with, as well as a few stations along the way; compared to that of the ALJ, the Commission’s reasoning is totally unconvincing.
C. Remaining Issues
1. National Environmental Policy Act of 1969 (NEPA).
The Office of Environmental Analysis based its environmental recommendation on certain economic assumptions, namely, that lower rates would increase wastepaper exports, and that wastepaper is adequately competitive and interchangeable with woodpulp and woodehips in the Japanese papermaking industry.
2. Other Shipping Act Issues. Petitioners sought to question the wastepaper rates fixed by the PWC under sections 16 First and 17 of the Act.
III. CONCLUSION
Finding that the Commission has failed to provide a reasoned decision based on substantial evidence that supports its position reversing the ALJ, we order that approval of these particular wastepaper rates be vacated under section 18(b)(5) of the Shipping Act. We hold only that these rates may not be approved on the basis of the existing administrative record. The Commission may in the future undertake section 18(b)(5) review of any such rate structures in full consideration of both the reasonableness of the conference-fixed rates and the detriment to commerce latent in those rates. The Commission is free to engage in any further administrative proceedings in this case not inconsistent with this opinion.
So ordered.
. 46 U.S.C. §§ 801 et seq. (1976).
. See Shipping Act of 1916, § 15, 46 U.S.C. § 814 (1976).
. The Commission shall by order, after notice and hearing, disapprove, cancel or modify any agreement, or any modification or cancellation thereof, whether or not previously approved by it, that it finds to be unjustly discriminatory or unfair as between carriers, shippers, exporters, importers, or ports, or between exporters from the United States and their foreign competitors, or to operate to the detriment of the commerce of the United States, or to be contrary to the public interest, or to be in violation of this [Act]----
Id. (emphasis added).
The Commission shall disapprove any rate or charge filed by a common carrier by water in the foreign commerce of the United States or conference of carriers which, after hearing, it finds to be so unreasonably high or low as to be detrimental to the commerce of the United States.
Id. § 18(b)(5), 46 U.S.C. § 817(b)(5) (1976) (emphasis added).
. Petitioners also allege inappropriate ex parte contacts and FMC prejudgment of the issues in this case. We reject petitioners’ allegations as entirely groundless. Petitioners failed to adduce evidence of impropriety; we presume the Commission to be honest and impartial. Withrow v. Larkin, 421 U.S. 35, 47, 95 S.Ct. 1456, 1464, 43 L.Ed.2d 712 (1975).
. Order of Investigation, Docket No. 72-35, reprinted in Joint Appendix (J.A.) at 24-28.
. 46 U.S.C. §§ 814, 815 First, 816, & 817(b)(5) (1976).
. Initially the inquiry involved only shipments from the United States to Japan, but by an amendment to the Order of Investigation served 27 October 1972, reprinted in J.A. at 30 -31, it was extended to include shipments to the Philippines, Taiwan, Korea, South Vietnam and Thailand.
. 42 U.S.C. § 4321 et seq. (1976).
. The major growth in the raw materials market was certainly in woodchips. Woodpulp exports as reported by PWC carriers, in fact, showed a small overall, but not particularly significant, decrease. Cf. FMC Report, served 9 March 1979 (Report) at 23-24 & nn. 38-39, reprinted in J.A. at 230-31 & nn. 38-39. Department of Commerce statistics, however, reflecting all U.S. wood fiber exports to the Far East (f. e., not merely PWC totals) show the marginal significance of the limited negative trend in woodpulp exports. See Wood Fiber Exports to Japan, Korea and East Asia 1970-1976, Appendix A, Table 1, reprinted in J.A. at 361. This chart clearly identifies woodchips as the big winner in the Far East. In Japan, for example, woodchip exports went up 62% over the seven years of the study. By contrast, wastepaper exports increased only 40%, while woodpulp increased by 11%. In light of the fact that Japan imported no woodchips in the mid-1960’s, see administrative law judge’s Initial Decision served 15 August 1977 (I.D.) at 34 n.36, reprinted in J.A. at 65 n.36, this market growth is truly meteoric.
It is helpful to distinguish early the relevancies of the woodchip and woodpulp factors to our analysis: We are interested in woodchip export data mainly because of the estimate they provide of market dimensions in the Far East. We can thereby reach conclusions about
. We do not want, after all, blithely to compare apples and oranges. Likewise, an agency should also avoid unavailing comparisons of nonsubstitutes. Though apples and oranges are not without some analogous properties, their similarities would not suggest to manufacturers of orange juice, for instance, that apples might be an attractive, alternative raw material, given the right price. So, a preliminary question asks whether wastepaper and wood-pulp or woodchips are “apples and oranges”? As the ALJ found, it seems rather plain that they are not.
. These are the kind of rates which the Act requires the FMC to disapprove. See note 3 supra.
. I.D. at 72, reprinted in J.A. at 103.
. Id. (emphasis added).
. FMC Report at 10, reprinted in' J.A. at 217 (emphasis added). The fact that the interchangeability of wastepaper and woodpulp is somewhat circumscribed by technology (/. e., that the raw materials at issue are not categorical functional equivalents over the entire range of paper manufacturing processes) does not convert the similar commodities into “apples and oranges.” It appears that even the PWC understood the commodities to be similar and competitive. See I.D. at 97, reprinted in J.A. at 129. In any event, “functional equivalence” is not the standard for establishing sufficient nexus among shipped goods such that the variability in their associated shipping rates can be shown to be either reasonable or unreasonable. “Similarity” suffices. See Investigation of Ocean Rate Structures, 12 F.M.C. 34, 58 (1968) (citing Iron and Steel Rates, Export-Import, 9 F.M.C. 180, 191-92 (1965)).
. NARI v. ICC, 585 F.2d 522, 540 (D.C. Cir. 1978), cert. denied, 440 U.S. 929, 99 S.Ct. 1266, 59 L.Ed.2d 485 (1979). Naturally, the ICC and FMC are governed by different organic statutes. Nevertheless, their functions are analogous and each must sanction rates according to the indicia of the public interest. Thus, NARI v. ICC, supra, is controlling authority on this particular point.
. As a virgin commodity, not yet technologically processed or adulterated, woodchips potentially displace — /. e., compete with — the other two materials over the entire range of possible end uses. See I.D. at 21, reprinted in J.A. at 52. For this reason especially, the competitive universe of wastepaper must include market data on woodchips. The freight charges relevant to woodchips transported in the cargo holds of tramp ships may be inapposite to the costs of containerized transport applicable to wastepaper and woodpulp. Still, sales statistics on woodchips are validly descriptive of overall market conditions in the Far East. It is essential to contemplate, though the FMC did not, the significance that the dramatic increase in woodchip exports holds for understanding the generalized demand for (competitive) papermaking raw materials. See note 31 infra and accompanying text.
. Cf. NARI v. ICC, 585 F.2d 522 (D.C. Cir. 1978), cert. denied, 440 U.S. 929, 99 S.Ct. 1266, 59 L.Ed.2d 485 (1979) (potential competition may be considered by agency along with actual competition for transportation purposes).
. NARI v. ICC, 627 F.2d 1328, 1335 (D.C. Cir. 1980) (Wilkey, J.).
. See Report at 13, reprinted in J.A. at 220:
Because the PWC rates at issue, even if unreasonable, have not been shown to result in detriment to commerce, it is not necessary to discuss the reasonableness of PWC’s wastepaper rates. Our decision turns on the “detriment to commerce” standard of section 18(b)(5).
*74 A footnote conceding that the ALJ found “exorbitant and outrageously high” rates is omitted. This excerpt from the FMC Report is the crux of our difficulty with the Commission’s analysis.
.The Commission’s Office of Environmental Analysis (OEA) did appreciate the market interrelationships. The environmental impact statement prepared by the OEA was based on assumptions indicating an understanding that the competition among wastepaper, woodpulp and woodchips was complex and multivariable. See Report at 21-22 n.36, reprinted in J.A. at 228-29 n.36. We can agree with this, of course. The position taken by the FMC is definitely antithetical to the environmental interests of conservation and reducing unnecessary industrial activity, as well as to the expressed intent of Congress in this area. See notes 60-62 infra and accompanying text. We address the NEPA issue in Part II. C. 1. infra.
. Reprinted in J.A. at 24-28 (served 20 July 1972).
. Id. at 25.
. See Chart I, Rate History, I.D. at 10, reprinted in J.A. at 41.
. Naturally, the ALJ found that containerized wastepaper was no more costly to handle than containerized woodpulp. I.D. at 7-8, 74, reprinted in J.A. at 38-39, 105. “Yet,” he wrote, “containerized wastepaper rates [in 1972] exceeded profitable rates on containerized wood-pulp by 166% to 200% and exceeded costs by even greater percentages.” Id.
. See id. at 72, reprinted in J.A. at 103.
. See id. at 8, 74, reprinted in J.A. at 39, 105.
. See id. at 80-84, reprinted in J.A. at 111-15.
*75 Insofar as the relationship between value of commodity and freight rates is concerned, as shown by Chart II, a comparison of West Coast dealer prices for selected types of wastepaper and woolpulp in 1972, the values of wastepaper were only about 42%, 17% and 15% of the value of comparative types of woodpulp at that time, yet the lower valued commodity in each instance took much the higher rate than the higher valued commodity-
id. at 24, reprinted in J.A. at 55 (emphasis added).
. Id. at 84, reprinted in J.A. at 115.
. Id. at 61, reprinted in J.A. at 92.
. See J.A. at 286.
. See I.D. at 20-22, reprinted in J.A. 51-53.
. See id. at 63, reprinted in J.A. at 94.
. See id. at 26, reprinted in J.A. at 57.
. PWC’s contract rules have “the effect of locking wastepaper shippers into PWC.” Id.
. Id. at 84, reprinted in J.A. at 115 (footnotes omitted).
. Id. at 96, reprinted in J.A. at 128 (footnotes omitted).
. Id. at 63, reprinted in J.A. at 94.
. See 5 U.S.C. § 706 (1976).
. The Act requires that “[o]rders of the Commission relating to any violation of this [Act] .. . shall be made only after full hearing.” 46 U.S.C. § 822 (1976). Hence, the Commission must act on the basis of substantial evidence, and may not act arbitrarily or capriciously. 5 U.S.C. § 706(2)(A) & (E) (1976). See Consolo v. FMC, 383 U.S. 607, 618-19, 86 S.Ct. 1018, 1025-26, 16 L.Ed.2d 131 (1966); Puerto Rico Ports Authority v. FMC, 642 F.2d 471, 478 (D.C.Cir.1980). Under this standard, an agency must act rationally and resolve any conflicts in the evidence pursuant to statutory criteria. See Bowman Trans., Inc. v. Arkansas-Best Freight System, Inc., 419 U.S. 281, 284-86, 95 S.Ct. 438, 441-42, 42 L.Ed.2d 447 (1974); Burlington Truck Lines v. United States, 371 U.S. 156, 167-68, 83 S.Ct. 239, 245-46, 9 L.Ed.2d 207 (1962); Greater Boston Television Corp. v. FCC, 444 F.2d 841, 851 (D.C. Cir. 1970), cert. denied, 403 U.S. 923, 91 S.Ct. 2229, 29 L.Ed.2d 701 (1971).
. See Universal Camera Corp. v. NLRB, 340 U.S. 474, 493, 71 S.Ct. 456, 467, 95 L.Ed. 456 (1951) (reviewing court determines substantiality of evidence of record including examiner’s report even if report opposes agency view).
. Id.
. See NLRB v. Universal Camera Corp., 19F.2d 429, 430 (2d Cir. 1951) (remand) (examiner findings based on witness demeanor entitled to substantial weight).
. I.D. at 60, reprinted in J.A. at 91.
. Report at 15, reprinted in J.A. at 222.
. 5 U.S.C. § 556(d) (1976). “No rule should exist that evidence inadmissible in a jury case may not be substantial. Substantiality of evidence should be determined by appraising it in its full context.” K. Davis, Administrative Law of the Seventies, § 14.11, at 341 (1976).
. See I.D. at 60, reprinted in J.A. at 91. The Commission also refused to consider documentary evidence, e. g.t “letters received by PWC from wastepaper receivers in the Far East claiming that they would have to shift to wood-pulp unless PWC reduced its freight rates for wastepaper.” See Report at 15 n.24, reprinted in J.A. at 222 n.24. “These letters,” the Commission wrote, “in no way change our position.” Id. The Commission displayed an unfortunate, capricious reluctance to assimilate the proffered evidence tending to show detrimental impact on the commerce in wastepaper.
. 46 U.S.C. § 817(b)(5) (1976).
. See 28 U.S.C. §§ 2344, 2348 (1976).
. Brief for the United States at 31 (footnote omitted). See generally id. at 23-34.
. Id. at 34. See also United States Lines v. FMC, 584 F.2d 519, 526 (D.C. Cir. 1978).
. 46 U.S.C. § 814 (1976).
. See, e. g., Note, Antitrust and the Shipping Industry: Interpretation of the Shipping Act of 1916, 12 N.Y.U.J. Int’l L. & Pol. 115 (1979).
. But cf. Sabre Shipping Corp. v. American President Lines, LTD., 285 F.Supp. 949 (S.D.N.Y. 1968), cert. denied sub nom. Japan Line, LTD. v. Sabre Shipping Corp., 407 F.2d 173 (2d Cir.), cert. denied, 395 U.S. 922, 89 S.Ct. 1774, 23 L.Ed.2d 239 (1969).
. 46 U.S.C. § 813a (1976).
. Pub. L. No. 87-346, 75 Stat. 762 (1961).
. FMC v. Svenska Amerika Linien, 390 U.S. 238, 243, 88 S.Ct. 1005, 1008-09, 19 L.Ed.2d 1071 (1968).
. See American Export-Isbrandtsen Lines, Inc. v. FMC, 417 F.2d 749 (D.C. Cir. 1969).
. Cf. Marine Space Enclosures, Inc. v. FMG, 420 F.2d 577 (D.C. Cir. 1969) (FMC failure to hold hearings on restrictive shipping contracts was violation of § 15 as failure to guard the public interest); Interpool Ltd. v. FMC, No. 79-1194, slip op. at 18 (D.C. Cir. 18 Nov. 1980) (“Commission did not satisfy its responsibility to safeguard the public interest by deciding the case without determining how the rules would affect competition”). See generally Volkswagenwerk Aktiengesellschaft v. FMC, 390 U.S. 261, 273-74, 88 S.Ct. 929, 936, 937, 19 L.Ed.2d 1090, modified, 392 U.S. 901, 88 S.Ct. 2049, 20 L.Ed.2d 1361 (1968); FMC v. Pacific Maritime Ass’n, 435 U.S. 40, 53-54, 98 S.Ct. 927, 935-936, 55 L.Ed.2d 96 (1978); FMC v. Seatrain Lines, Inc., 411 U.S. 726, 739, 93 S.Ct. 1773, 1781-1782, 36 L.Ed.2d 620 (1973); U.S. Lines, Inc. v. FMC, 584 F.2d 543, 545-46 (D.C. Cir. 1978).
.There is, of course, a danger that § 18(b)(5) could swallow up a sizable chunk of the antitrust freedom originating in § 15. The shipping conferences are, to be sure, primarily ratemaking organs. Still, there is no debate that § 18(b)(5) does qualify the liberty of ratemakers to set rates. Whether abusive of antitrust immunity or not, conferences are obliged to set reasonable and non-detrimental rates, or the Commission will be obligated to disapprove them. The purpose of § 18(b)(5) “is to provide the new Commission with authority to protect shippers against excessive rates established in dual-rate contracts or in conference tariffs on a noncontract basis.” Index to Legislative History of the Steamship Conference/Dual Rate Law, 87th Cong., 2d Sess. (1962) (referring to the “1961 amendments”) (Pub. L. No. 87-346, 75 Stat. 762 et seq.). Recognizing that § 15 could be too broadly pre-empted if § 18(b)(5) were not tempered, we would only have the Commission disapprove this particular rate structure proffered by the PWC. The ALJ’s proposed remedy of mandating that wastepaper rates be “open,” goes further than necessary at this time. The Commission must simply be prepared to monitor the conferences. Our problem here is not with the conference’s
. NARI v. ICC, 585 F.2d 522, 535 (D.C. Cir. 1978), cert. denied, 440 U.S. 929, 99 S.Ct. 1266, 59 L.Ed.2d 485 (1979) (footnote omitted) (emphasis in original).
. See id. (discussing specifically § 204 of the Railroad Revitalization and Regulatory Reform Act of 1976, Pub. L. No. 94-210, 90 Stat. 40 (1976)).
. NARI v. ICC, 585 F.2d 522, 531 n.45 (D.C. Cir. 1978), cert. denied, 440 U.S. 929, 99 S.Ct. 1266, 59 L.Ed.2d 485 (1979) (discussing NEPA, 42 U.S.C. § 4331 (1970); National Materials Policy Act §§ 201-06, Pub. L. No. 91-512 (1970); Energy Supply and Environmental Coordination Act of 1974 § 8(a)(2), Pub. L. No. 93-319; Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq. (1976).
. Investigation of Ocean Structures, 12 F.M.C. 34, 58 (1968).
. Id. at 61.
. Id. (emphasis added).
. See note 46 supra and accompanying text.
. See notes 63-64 supra and accompanying text.
. “The Commission shall disapprove any rate ... it finds to be so unreasonably high ... as to be detrimental to the commerce of the United States.” 46 U.S.C. § 817(b)(5) (1976) (§ 18(b)(5) of the Act) (emphasis added).
. 42 U.S.C. §§ 4321 et seq. (1976).
.Id. § 4332.
. See Final Environmental Impact Statement, prepared by the FMC’s Office of Environmental Analysis at 28, reprinted in J.A. at 267.
. Id.
. Id. at 5, reprinted in J.A. at 244.
. Report at 21-22 n.36, reprinted in J.A. 228-29 n.36.
.The ALJ did not consider environmental evidence in reaching his decision. The Commission instructed him to limit his investigation to the economic record. See I.D. at 31, reprinted in J.A. at 34.
. 46 U.S.C. §§ 815 First, 816 (1976).
. I.D. at 99, reprinted in J.A. at 131.
Dissenting Opinion
dissenting:
Judge Wilkey’s analysis of the economics of wastepaper shipment across the Pacific is quite plausible, and if we were sitting as Federal Maritime Commissioners I might well concur. But as a judge applying the substantial evidence test to a decision of a presumptively expert agency, I believe the record requires us to uphold the Commission’s determination. The disagreement between the Commission and its Administrative Law Judge does not entitle us to substitute our own views on cross-elasticity and market trends.
The evidence is not so unequivocal as the majority claims. For example, the alleged unreasonableness of wastepaper rates was to be shown by comparison with woodpulp rates, and petitioners offered evidence that their customers would “shift to woodpulp unless [the Pacific Westbound Conference] reduced its freight rates for wastepaper.” Majority opinion at 825 n.46. Yet the record demonstrates that the great success of woodchips was not shared by woodpulp, and that Conference members experienced a decline in woodpulp exports. Id. at 819 n.9. This evidence would support some skepticism about the theory that the boom in woodchips must inevitably extend to wastepaper if the rates were lowered.
I am also somewhat perplexed by the majority’s reliance on NARI v. ICC, 585 F.2d 522 (D.C.Cir.1978), cert. denied, 440 U.S. 929, 99 S.Ct. 1266, 59 L.Ed.2d 485 (1979), as support for a congressional mandate to the Federal Maritime Commission to encourage recycling. That decision was based on section 204 of the Railroad Revitalization and Regulatory Reform Act of 1976, Pub. L. No. 94-210, 90 Stat. 40 (1976) (codified at 45 U.S.C. § 793 note (1976)),
In short, while the Federal Maritime Commission may have been mistaken, I believe that it committed no error of law, and that substantial evidence in the record as a whole supports its findings. I respectfully dissent.