Lead Opinion
Opinion for the Court filed by Circuit Judge SILBERMAN.
Opinion concurring in denying the petition for review filed by Circuit Judge RUTH BADER GINSBURG.
This is a petition brought by the United Transportation Union (“UTU”),
I.
In the Staggers Rail Act of 1980,
Pursuant to that congressional direction, the ICC published, in April of 1988, a notice of proposed rulemaking that would exempt all interlocking directorates between two railroads — except those involving two “class I” railroads
In its accompanying explanation, the Commission explained its determination that the rule satisfied the requirements for granting exemptions set out in 49 U.S.C. § 10505(a). It first asserted that the exemption promoted several of the fifteen factors that comprise the national rail
The ICC then concluded that the rule satisfied both of the two alternative tests of § 10505(a)(2) — that the exemption is of limited scope and that the prior approval requirements of § 11322(a) are not needed to protect shippers from the abuse of market power. Its scope is “limited” because the exemption will not apply to interlocks between two class I carriers and the substantive provisions of § 11322(b), prohibiting certain actions by interlocking officers and directors, are not affected by the rule. And shippers do not need the protection of § 11322(a), according to the ICC, because the small size of class II and class III railroads and the vigorous competition present in the transportation industry made it “highly unlikely for any linkage to succeed in allowing one carrier to dominate or influence the other carrier contrary to the other rail carrier’s or shipper’s interests.”
The petitioner argues that the ICC’s decision is inconsistent with § 10505(a) and that it is arbitrary and capricious. The government challenges petitioner’s standing on both prudential and constitutional grounds. Our colleague — apparently of the view that the standing issue is too difficult to resolve — believes we should pass on to the merits without deciding whether we have the constitutional authority to hear the case. To be sure, this court has on occasion followed that course, although not often in recent times, but we are unaware of any case where a panel was criticized for not employing that technique; in other words, for assuming its constitutional obligation. Here the parties have briefed the standing issue and we have accordingly done our best to answer the jurisdictional question raised. It is hard to understand why, under these circumstances, it could be thought a judicial virtue not to do so.
II.
To satisfy the standing requirements of Article III, a complaining party must “show that he personally has suffered some actual or threatened injury as a result of the putatively illegal conduct of the defendant, ... and that the injury fairly can be traced to the challenged action and is likely to be redressed by a favorable decision.” Valley Forge Christian College v. Americans United for Separation of Church and State, Inc.,
We are mindful that in analyzing standing issues, we “must accept as true all material allegations of the complaint,” Warth v. Seldin,
To decide this case we need not settle the uncertainty concerning our obligation to credit allegations of the cause of existing injuries since, unlike Simon and Warth, where the plaintiffs had already suffered an alleged injury-in-fact which they attempted to attribute to the official action in question, the alleged injury here is itself purely prospective — the petitioner makes no claim that the ICC’s exemption has hurt any union member yet. We must therefore reject any of the petitioner’s allegations that we determine to be overly speculative. Moreover, we note that any petitioner alleging only future injuries confronts a significantly more rigorous burden to establish standing. Although “[t]he fact that harm or injury may occur in the future is not necessarily fatal to a claim of standing[,] ... [it can] lessen the concreteness of the controversy and thus mitigate [sic] against a recognition of standing.” Harrington v. Bush,
The only allegation of injury that we can discern from the petitioner’s brief is that railroad workers “stand to be hurt” by the “unauthorized control and manipulation of carriers” and by “the financial wrecking of rail carriers” that will supposedly result from the exemption for interlocking directorates. Although not explicitly set forth, we can surmise that petitioner is asserting that the ICC’s new rule will lead to the creation of at least one interlocking directorate that would not have been created but for the exemption from § 11322(a), that one of those additional interlocking directorates will result in some anticompetitive behavior or a railroad bankruptcy that would not have occurred but for the interlocking directorate; and that a member of the United Transportation Union will thereby suffer an injury. We believe that this chain of allegations — no link of which is of the type that we must “accept as true” — is fatally speculative and therefore does not suffice to confer standing.
In the first place, we see no reason — and the petitioner offers us none — to credit the proposition that an interlocking directorate involving a class II or class III
If the petitioner instead is alleging that workers will be injured because of possible anticompetitive collusion of carriers whose directorates are interlocked (which is the classic purpose of prophylactic measures such as § 11322(a)), we think that claim inadequate, primarily because it is wholly speculative whether decreased competition in the railroad industry will harm rather than help UTU members. Theoretically, the ultimate effect of reduced competition on railroad workers — as distinguished from shippers — is indeterminate. Reduced competition is often associated with decreased output, which could translate into fewer job opportunities and/or lower wages for employees. On the other hand, carriers facing less competitive pressure from other carriers will also face less pressure to cut their costs, including labor costs. See Associated Gen. Contractors v. California State Council of Carpenters,
Even if petitioner could pass over the above hurdles, we would also have to assume that the hypothetical interlocking directorate that facilitated the injurious behavior would not have been formed but for the rule removing the prior approval requirements of § 11322(a). Since the ICC has not rejected any application for the types of interlocking directorates covered by the rule in nearly twenty years, the prior approval procedure seems to have been primarily a nuisance — discouraging applications, if at all, on the basis of bother or expense. While it is possible that the exemption will result in a greater number
Any one of the factors discussed above might be enough to place the petitioner’s allegation in the category of “unadorned speculation,” Simon,
It is suggested nevertheless that the petitioner’s allegation must be credited for Article III purposes because Congress, in passing § 11322(a), expressed its belief that interlocking directorates would lead to the financial ruin of rail carriers.
Decisions about Article III standing are decisions about the constitutional boundaries of the federal judicial power. While Congress indisputably may preclude the federal courts from hearing cases that they would be constitutionally permitted to hear, the Congress surely cannot expand the constitutional jurisdiction of the federal courts — in essence, amend the Constitution — merely by legislating. See Dellums,
That is not to suggest, of course, that courts should pay no attention to Congress’ predictions of the effect of legislation. “[A]s a matter of comity, it is unseemly for a federal court to ignore such legislative opinion.” Dellums,
In light of those analytical differences, it is a difficult question whether we
The legislative history of the interlocking directorate provision, 49 U.S.C. § 11322(a) contains a few statements that arguably support the proposition that interlocking directorates may lead to railroad bankruptcies. First, a report submitted by the House Committee on Interstate and Foreign Commerce in May of 1914 stated that:
Whether the necessity for this provision is so great as represented or not, and whether the anticipated benefits are exaggerated or not, there is a general impression that most of the wreck and ruin of railroads and consequent damage to public service and the public interest has been due to the machinations of men who managed different corporations and by the policies adopted for the different corporations constituting a system or about to be consolidated into a system wrought ruin to some or all of the carriers involved.
H.R.Rep. No. 681, 63d Cong., 2d Sess. 3 (1914), reprinted in 51 Cong.Rec. 9598 (June 1, 1914) (emphasis added). In addition, there were three brief statements made during floor debates in the House in June of 1914 that asserted, in a conclusory fashion, that interlocking directorates were evil, the source of collusion, and an incentive for executives to sacrifice the interests of one carrier to those of another.
III.
One final issue merits discussion. In comments submitted to the ICC opposing the proposed rule, petitioner stated that, “[t]he Commission’s present procedure [requiring prior approval] is quite simple. Moreover, there is developed a public record as to the relationships, which better enables public protection.” And petitioner states in its brief to this court that: “The non-filing of a notice that the interlocking directorate exemption is being invoked requires UTU to seek review of the class exemption to prevent injury prior to a specific exercise of the exemption, since changed directors affect rail operations.” While we are somewhat puzzled as to what this means, even read generously to allege a procedural injury — that it will be more difficult for the union to challenge interlocking directorates in the future because it will not have prior notice of them — we do not think that it confers standing on the petitioner since it bears no plausible nexus to a “substantive” injury.
It is beyond dispute that the federal courts may entertain suits alleging procedural injuries. See, e.g., McGarry v. Secretary of the Treasury,
Given the utter speculativeness of the petitioner’s allegation of substantive injury, any allegation of procedural injury fails as well. The procedural injury arguably alleged here is as tenuously connected to a potential substantive injury as the allegation we found overly speculative in Dimond v. District of Columbia,
We therefore dismiss the petition for review.
Notes
. This case was originally brought by Patrick Simmons, the Illinois Legislative Director of the UTU, under his own name. Since Simmons does not even have putative standing as an individual and since subsequent submissions indicate that he actually represents the UTU, we have changed the name of the case.
. For a union to have standing to represent its members under Hunt v. Washington State Apple Advertising Comm'n,
. Pub.L. No. 96-448, 94 Stat. 1895 (codified at 49 U.S.C. §§ 10101-11917).
. Section 10101a provides that:
In regulating the railroad industry, it is the policy of the United States Government — (1) to allow, to the maximum extent possible, competition and the demand for services to establish reasonable rates for transportation by rail; (2) to minimize the need for Federal regulatory control over the rail transportation system and to require fair and expeditious regulatory decisions when regulation is required; (3) to promote a safe and efficient rail transportation system by allowing rail carriers to earn adequate revenues, ... (4) to ensure the development ... of a sound rail transportation system with effective competition among rail carriers and with other modes ... (5) to foster sound economic conditions in transportation ... (6) to maintain reasonable rates where there is an absence of effective competition ... (7) to reduce regulatory barriers to entry into and exit from the industry; (8) to operate ... facilities ... without detriment to the public health and safety; (9) to cooperate with the States on transportation matters ... (10) to encourage honest and efficient management of railroads ... (11) to require rail carriers ... to rely on individual rate increases ... (12) to encourage fair wages and safe ... working conditions ... (13) to prohibit predatory pricing and practices, to avoid undue concentrations of market power and to prohibit unlawful discrimination; (14) to ensure the availability of accurate cost information in regulatory proceedings ... (15) to encourage and promote energy conservation.
. The ICC divides the nation’s railroads into three classes according to annual operating revenues for three consecutive years. Class I railroads are the largest carriers; there are only 16 of them but collectively they operate approximately 82 percent of the nation's track mileage, employ 90 percent of the railroad labor force and earn 92 percent of the revenues of the rail industry. There are a total of 484 class II and class III railroads.
. Section 11322(a) provides in full:
A person may hold the position of officer or director of more than one carrier as defined in section 11301(a)(1) of this title only when authorized by the Interstate Commerce Commission. The Commission may authorize a person to hold the position of officer or director of more than one of those carriers when public or private interests will not be adversely affected.
. This principle was recognized by our circuit as least as early as Harrington v. Bush,
[t]he harm alleged by appellant ... would take place, if at all, at some undetermined time in the future_ As the time span between challenged activity and the resulting harm to a protected interest increases, it becomes more difficult to maintain the credibility of the specific link between the two. If this linkage cannot be demonstrated, the standing claim must fail even if the underlying injury is judicially cognizable. In this case, the harm that is alleged will take place at such a time in the future so as to render any potential injury ‘speculative’ ...
Id. at 208-09 (quoting Simon,
We do not believe that the court’s opinion in International Ladies’ Garment Workers’ Union (“ILGWU") v. Donovan,
. Even with these allegations we apparently retain some discretion to reject those that we find unconvincing. Since the Lyons Court characterized as "incredible" the past and present facts that the complainant would have had to allege to have Article III standing — "either (1) that all police officers in Los Angeles always choke any citizen with whom they happen to have an encounter, ... or (2) that the City ordered or authorized police officers to act in such a manner,” id.
. In Simon, for instance, the Court denied standing to low-income citizens and organizations representing them that sought to challenge an IRS rule that they believed prompted hospi-tais to deny treatment to indigent patients. . The Court dismissed the complaint, concluding that the link between the alleged injury and the challenged IRS rule was too speculative and that the injury was not likely to be redressed by a favorable decision. The Court stated that it accepted as true the allegation that the IRS rule "encouraged” hospitals to deny treatment. See Simon,
. Notwithstanding the suggestion of our concurring colleague, see Concurring Opinion at 919, this proposition is no more coextensive with the merits of this case than the question of injury-in-fact ever is. To decide the merits, we would have to determine whether the ICC acted arbitrarily and capriciously or contrary to law in adopting the challenged exemption, quite apart from whether that exemption could be thought ultimately to harm railroad workers. We therefore do not agree that the merits and standing questions "are resolved by the same inquiry." See id. at 920.
. We note also that the ICC retains the power to revoke any interlocking directorate that appears to threaten any such extraordinary, consequences, see 49 U.S.C. § 10505(d).
. To be sure, this circuit has allowed labor interests to sue where their alleged injuries have been far from certain, but those decisions are readily distinguishable from this one. In International Union of Bricklayers v. Meese,
. That Congress may also have been concerned about anticompetitive behavior is irrelevant; as we have previously discussed, see supra at 913-914, that possible consequence does not give standing to the UTU as it might shippers.
. Neither Public Citizen v. F.T.C.,
. Congressman Rayburn stated that:
the interlocking of directorates of great corporations of this country has been one of the greatest of the evil tendencies of the times.... It is as natural for a man who controls these corporations to work for the interest of the one in which he has the greatest pecuniary interest as it is for water to flow downhill.
51 Cong.Rec. 9688 (June 2, 1914). Two days later, Congressman Aswell opined that:
It is greatly to be doubted if any single cause has contributed more to business corruption than the modern corporate business procedure of interlocking directorates. It is shown by a recent congressional report that ... one man ... was a director at one time in 67 great companies, at least one-half of them being railroad companies and one of them being the greatest industrial enterprise in the Nation, which sold its products to those same railroads, and at the same time he was fiscal agent for the railroad companies — thus he was fiscal agent, buyer, and seller at one and the same time.
51 Cong.Rec. 9814 (June 4, 1914). Finally, Congressman Barkley commented that:
One of the great evils of this generation ... has been the fact that the same men have been and are officers and directors in many corporations which ought to be competing companies, but which ... are bound together by unnatural and unholy ties. We seek to change that condition in this bill with reference to railroads ...
51 Cong.Rec. 9828 (June 4, 1914).
These statements were actually made in 1914, when the provision at issue here, § 11322(a), first passed the House, but that provision did not pass the Senate in 1914 and indeed was not enacted until Congress passed the Transportation Act in 1920. The legislative history of the Transportation Act of 1920, consisting of weeks of debate in both houses, filling hundreds of
Concurrence Opinion
concurring in denying the petition for review:
This is a case in which standing and merits merge. It is best resolved, I believe, by the simple point my colleagues make “[i]n the first place”: the petitioner has shown no cause “to credit the proposition that an interlocking directorate involving a class II or class III railroad will damage, let alone lead to the ‘financial ruin’ of, a carrier.” Ct.Op. at 914. A case so slim seems to me an inappropriate one in which to rehearse at length, albeit again without resolving for this circuit, the large “question whether we owe any deference to congressional predictions or assessments of cause and effect when we analyze a standing problem.” Id. at 917. I write separately, therefore, to disassociate myself from the courts extended essay.
I.
As the court’s opinion tellingly demonstrates, standing in this case indeed depends totally on the merits of the claim that the challenged exemption will open the way for “the financial wrecking of rail carriers,” and thereby hurt railroad workers. Id. at 913. But cf. Warth v. Seldin,
A reviewing court, after finding the Commission’s decision entirely reasonable, might say, as my colleagues do, that the injury petitioner asserts is imaginary, so petitioner has no standing. There is respectable authority, however, for preter-mitting the difficult justiciability issue when, as in this case, the questions of standing and merits blend, and the merits are decidedly against the complainant. See, e.g., Secretary of the Navy v. Avrech,
II.
The court suggests, although it ultimately does not hold, that we should treat congressional determinations that bear on standing differently from other legislative policy judgments. I resist the suggestion, and would apply to standing analysis, as to merits matters, the general axiom the legislative judgments on social and economic issues enjoy a strong presumption of constitutionality. When no “fundamental right” or class attracting heightened scrutiny is affected, Supreme Court jurisprudence for a half century or more has cautioned judges to defer to economic and social prescriptions, proscriptions, and predictions by elected representatives, so long as one can posit a rational basis for the legislative determination. See, e.g., Ferguson v. Skrupa,
My colleagues imply that we should subject legislative judgments relevant to standing to a far more stringent brand of judicial review. They observe that “Congress surely cannot expand the constitutional jurisdiction of the federal courts — in essence, amend the Constitution — merely by legislating.” See Ct.Op. at 915-16. But deference to rational congressional predictions no more charters Congress to amend article III than deference to the legislators’ rational policy judgments allows Congress to amend substantive constitutional constraints on its authority. The courts can and do exercise a check. The issue is whether courts start their inquiry with an initial bias in favor of the disposition of a co-equal branch, or whether they owe “[no] deference to congressional predictions,” Ct.Op. at 917, and therefore must be “convinced” that the legislature’s judgment is not only reasonable, but right. See Ct.Op. at 916 n. 14.
By so brigading article III, effectively exalting it over other constitutional constraints on legislative action, the court is led to posit a broad category of measures that the Constitution permits Congress to place in the charge of administrators, but prohibits judges from monitoring; the court describes these measures as ones that only “approximately or imprecisely ... affect the behavior of men.” Id. at 916 (internal quotation omitted). In this domain, it is apparently the court’s vision that executive officers and commissions reign supreme, unchecked by the safeguard of judicial review.
Conclusion
This easy case did not require us to air “a difficult question.” See Ct.Op. at 916. Underscoring that the court eventually reserves decision of the weighty issue to another day and more appropriate case, and satisfied that the Commission acted rationally, not arbitrarily, I concur in denying the petition for review.
So positioning executive officers is in tension with the precept that ordinarily no man (or body of men) should ultimately judge his own cause. Cf. The Federalist No. 10, at 58 (J. Madison) (Ford ed. 1898); see also In re Sealed Case,
