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March 26, 1965

The UNITED STATES of America and The Interstate Commerce Commission, Defendants

Per Curiam

This is an action brought by plaintiff motor carrier associations pursuant to 28 U.S.C. §§ 1336, 1398, 2284 and 2321-2325 (1958) and Section 10 of the Administrative Procedure Act, 5 U.S.C.A. 1009 (1958), to set aside and annul the report and orders of the Interstate Commerce Commission entered in Investigation and Suspension Docket No. M-17133, Drugs and Related Articles, New Jersey to Chicago (August 8, 1963), 322 I.C.C. 734 (1963) in which the Commission found proposed motor carrier rates to be just and reasonable under the principles adopted in Iron or Steel Scrap -- Conn., Mass. & R.I. to Pa., 318 I.C.C. 567 (1962).

Plaintiffs have exhausted their administrative remedies and the assailed decision is administratively final in accordance with the Commissions' General Rules of Practice *fn1" and the procedure prescribed by the Interstate Commerce Act. *fn2" By Court order of June 3, 1964, upon consent of all parties, numerous railroad companies were joined as intervening plaintiffs.

 In reviewing an order of the Interstate Commerce Commission, as with any administrative agency order, the court is limited in scope by settled principles of administrative law, both general *fn3" and statutory. *fn4" An exploration of these limitations is appropriate at the outset.

 The Commission is presumed to have properly performed its official duties; and this presumption supports its actions in absence of clear evidence to the contrary. *fn5" This presumption stems from the deference due the Commission because of its familiarity with the conditions in the industry which it regulates. *fn6" 'The Supreme Court has kept the boundary-line dividing judicial and I.C.C. functions a stark one, even when reversing a Commission judgment. For 'it is the Commission, not the courts, that brings an expertise to bear on the problem, that makes the findings, and that grants or denies the applications". *fn7" However, judicial deference to expertise is not boundless; and expertise is not sufficient in itself to sustain a decision. The order must be supported by substantial evidence *fn8" and must be made within the statutory limits placed on the Commission's powers by Congress. *fn9"

 With the Commission's expertise in mind, it is our duty to review the record and the conclusions reached, as required by the provisions of the Administrative Procedure Act. Under Section 10 of the Administrative Procedure Act, as applicable here, an order of the Interstate Commerce Commission may be invalidated if it is either '(1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law * * * (3) in excess of statutory jurisdiction, authority, or limitations, or short of statutory rights * * * (5) unsupported by substantial evidence * * *'. *fn10"

 'Arbitrary' and 'capricious' are to be understood in their legal sense as distinguished from their opprobrious or popular meaning. Accordingly these words mean 'without rational basis'. *fn11" So, if a rational basis for the order is found, then, so far as arbitrariness or capriciousness is concerned, the court will have exhausted its judicial function. *fn12"

 To merit judicial approbation, the Commission's order also must be within the statutory limits and authority expressed by Congress. The National Transportation Policy, 49 U.S.C. preceding 1, 301, 901, and 1001 (1958), 'is the yard-stick by which the correctness of the Commission's actions will be measured'. *fn13"

 'It is hereby declared to be the national transportation policy of the Congress to provide for fair and impartial regulation of all modes of transportation subject to the provisions of this Act, so administered as to recognize and preserve the inherent advantages of each; to promote safe, adequate economical, and efficient service and foster sound economic conditions in transportation and among the several carriers; to encourage the establishment and maintenance of reasonable charges for transportation service, without unjust discriminations, undue preferences or advantages, or unfair or destructive competitive practices; to cooperate with the several States and the duly authorized officials thereof; and to encourage fair wages and equitable working conditions; -- all to the end of developing, coordinating, and preserving a national transportation system by water, highway, and rail, as well as other means, adequate to meet the needs of the commerce of the United States, of the Postal Service, and of the national defense. All of the provisions of this Act shall be administered and enforced with a view to carrying out the above declaration of policy.' (Italics supplied)

 As here relevant, Section 216(b) of the Interstate Commerce Act, 49 U.S.C. § 316(b) (1958), requires all motor common carriers 'to establish, observe, and enforce just and reasonable rates * * * and just and reasonable regulations and practices relating thereto * * * and all other matters relating to or connected with the transportation of property in interstate or foreign commerce'.

 Section 216(d) requires all charges to be 'just and reasonable' and prohibits and declares unlawful every 'unjust and unreasonable charge'. Section 216(g) places the burden of proof upon a carrier at any hearing involving a change of rate to show that the proposed changed rate or practices is 'just and reasonable'.

 The court must satisfy itself that these policies have been followed. 'Just as we would overstep our duty by undertaking to evaluate the evidence according to our own notions of the public interest, we would shirk our duty were we summarily to approve the Commission's evaluation of the record without determining that the agency's evaluation had been made in accordance with the mandate(s) of Congress'. *fn14"

 As to the sufficiency of evidence to support the order, it is not the proper function of the court to substitute its judgment or to weigh evidence in place of Commission. *fn15" On the other hand, the court must review the record without a rubber stamp approach. As stated in Nashua Motor Exp., Inc. v. United States, supra note 15, 230 F.Supp. at 650:

 'This court is bound to inquire into every aspect of the proceedings below wherein it may appear that the Commission has otherwise applied an erroneous standard of law, or has made arbitrary findings, or has reached ultimate conclusions without adequate subordinate findings, or has failed in any other way to observe those procedures of investigation ...

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