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March 18, 1971

UNITED STATES of America and Interstate Commerce Commission

Aldisert, Circuit Judge, Marsh, Chief District Judge, and Miller, District Judge.

The opinion of the court was delivered by: ALDISERT

ALDISERT, Circuit Judge.

 The Interstate Commerce Commission has promulgated mandatory rules governing the manner in which empty freight cars in the possession of nonowning railroads are to be returned to their owners. Before us is an action brought by fifteen steel producers and the American Iron and Steel Institute *fn1" seeking to enjoin, annul and set aside the order. We must determine whether the Commission's order is supported by "substantial evidence" and satisfies the statutory test of reasonableness. 49 U.S.C. § 1(14)(a).

 The rules under review derive from a lengthy study begun in December, 1963, in which the Commission undertook to ascertain the adequacy vel non of the nation's supply of railroad freight cars. There followed on June 1, 1964, an announcement by the Commission's Division Three that there existed "a substantial inadequacy" of freight car ownership among America's railroads. 323 I.C.C. 48 (1964). At the same time, the Commission issued a formal notice of proposed rulemaking, pursuant to Section 1(14)(a) of the Interstate Commerce Act, 49 U.S.C. § 1(14)(a), broadening its inquiry to include all phases of car ownership, utilization, and distribution with a view toward alleviating the car shortage problem.

 A seven-year study followed. Thirty verified statements were submitted by interested parties. In response to a verified statement by C.C. Robinson, of the Commission's Bureau of Enforcement, which advocated mandatory observance of car service rules promulgated by the railroad industry, *fn2" at least twenty corporations and shippers' associations, including the steel plaintiffs, obtained leave to intervene. They filed reply verified statements and were joined by twenty-five railroads, the American Short Line Railroad Association, The Association of American Railroads and many shipping interests. Over eight-five reply verified statements were received.

 A hearing before an examiner commenced on March 28, 1967, extended 50 days and produced almost 6,000 pages of testimony. The hearing examiner filed a 63-page report recommending discontinuance of the proceeding. He concluded:

the record does not contain competent evidence upon which to base a conclusion as to the adequacy of freight car ownership; and that the adoption of the proposed car ownership formula, regulations, and car service rules has not been shown to be justified.

 Eighteen months thereafter, in August, 1969, Division Three of the Commission reached a contrary conclusion, finding that the railroads lacked an adequate supply of freight cars, and ordering that car service rules 1 and 2 be mandatorily observed in order to increase car ownership by the railroads. *fn3" In February, 1970, the I.C.C. modified its order to permit certain exceptions to the rules and to extend the effective date. In July, 1970, this court issued an order restraining enforcement of the order pending a determination in these proceedings.

 At the threshold we are met with certain settled principles of law. Because the decision of the Commission carries a presumption of validity, the plaintiffs have the burden of showing that it is invalid. Waite v. United States, 161 F. Supp. 856, 860 (W.D. Pa. 1958); W.J. Dillner Transfer Co. v. I.C.C., 193 F. Supp. 823, 826 (W.D. Pa.), aff'd., 368 U.S. 6, 82 S. Ct. 16, 7 L. Ed. 2d 16 (1961); W.J. Dillner Transfer Co. v. United States, 214 F. Supp. 941, 944 (W.D. Pa. 1963). Moreover, in the limited scope of our judicial review of I.C.C. decisions, we defer to the expertise of the Commission and will disturb its orders only if there is no "warrant in the law and the facts for what the Commission has done." Leonard Express, Inc. v. United States, 298 F. Supp. 556, 559 (W.D. Pa. 1969). Yourga Trucking, Inc. v. United States, 308 F. Supp. 625, 626-627 (W.D. Pa. 1969). In addition, there exists a special statutory standard by which car service rules must be measured: "The Commission may, after hearing * * * establish reasonable rules, regulations, and practices with respect to car service by common carriers by railroads subject to this chapter. * * *" 49 U.S.C. § 1(14)(a).

 The Commission's report declares that the rules "are not designed to improve the utilization of freight cars, except insofar as return loading is compatible with the primary objective of increasing availability of cars to the owner." 335 I.C.C. at 294. From this flows the necessary conclusion that the "primary objective" of the rules was to increase the availability of freight cars to the car owning line. *fn4" Under the caption "Conclusions," the report states that

there is a continuing freight car shortage which requires affirmative, remedial action at this time. We believe that this situation results from a combination of an inadequate ownership of general purpose type freight cars by respondents as a group and improper utilization of the available freight car fleet. * * * Therefore, we will attempt to supply the solution by requiring mandatory observance of the rules.

 335 I.C.C. at 308.

The United States Court of Appeals for this circuit has pointed out that as a general rule a Commission's findings should be given much weight in cases in which they have specialized and intimate knowledge of the whole proceedings. However, they point out that a slightly different rule is applicable when a final determination by the Administrative Agency rejects the findings of a hearing examiner. It would appear that an examiner's report is not as unassailable as a master and can be reversed by the Commission. The reviewing court while it need not give a trial examiner's findings more weight than they deserve in the light of reason and judicial experience, they should be accorded the relevance that ...

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