## Facts

- The Interstate Commerce Commission (ICC) regulated railroad rates for interstate shipments, including rates charged to “captive shippers” that depended on a market-dominant carrier.
- Arkansas Power & Light Co. and other coal-burning electric utilities were major rail shippers of coal and claimed they needed access to carrier-specific rate and cost data to challenge market-dominant rail rates.
- Congress enacted the Long-Cannon Amendment to the Staggers Rail Act, directing the ICC, in certain captive-shipper contexts, to consider specified factors when deciding whether to investigate proposed rate increases and when evaluating rate reasonableness. See 49 U.S.C. § 10707a(e)(2)(B), (C) (Supp. V 1981).
- The utilities petitioned the ICC to institute notice-and-comment rulemaking that would:
  - require broad, carrier-specific data collection to build a database for Long-Cannon analysis; and
  - establish general evidentiary standards and disclosure rules for Long-Cannon proceedings.
- The ICC denied the petition, reasoning that the proposed data collection would be unnecessarily burdensome and that standards could be developed more productively through case-by-case adjudication in rate proceedings.
- In denying rulemaking, the ICC stated it would provide adequate procedures in individual adjudications to allow shippers to seek and obtain the kinds of information they wanted through rulemaking.
- The ICC also announced a policy statement describing how it intended to apply the Long-Cannon Amendment in adjudications, but the policy had not yet been applied to decide the merits of any specific rate dispute involving the utilities.
- The utilities petitioned the D.C. Circuit for review of both the denial of rulemaking and the announced policy statement.

## Issues

1. Whether the ICC’s refusal to institute the requested rulemaking (data collection and general evidentiary standards for Long-Cannon matters) was arbitrary, capricious, an abuse of discretion, or otherwise contrary to law.
2. Whether the ICC’s announced but unapplied Long-Cannon policy statement was reviewable at that stage (including whether it constituted final agency action and was ripe for judicial review).

## Decision

- The court upheld the ICC’s denial of the petition to institute rulemaking.
- The court declined to conduct broad review of the ICC’s announced but unapplied policy statement, treating challenges to that policy as premature in the absence of a concrete application in a specific adjudication.
- The petitions for review were denied.

## Legal Principles

- An agency’s decision not to initiate rulemaking is subject to judicial review only in a narrow, highly deferential manner; reversal is rare absent a clear statutory command or an agency’s failure to provide a reasoned explanation.
- Under arbitrary-and-capricious review, an agency must consider the relevant considerations and explain the choice it made; concerns about administrative burden and resource demands may support denying a rulemaking petition.
- Unless a statute requires rulemaking, an agency generally may choose to develop policy through adjudication rather than through legislative rules, including in technical, fact-dependent areas such as rate reasonableness.
- A policy statement that announces how an agency expects to approach future cases, but is not yet applied to determine rights or obligations in a particular dispute, ordinarily lacks the concrete legal effect associated with final agency action.
- Ripeness principles generally counsel against reviewing an agency’s abstract or prospective policy positions before they are applied, because later application provides a concrete record and clearer legal consequences.
- When an agency reasonably explains that adjudicatory procedures will allow parties to seek needed information in individual cases, a court may accept that approach in reviewing the agency’s choice not to impose broad, upfront data-collection requirements through rulemaking.

## Conclusion

Arkansas Power & Light Co. v. ICC sustained the ICC’s decision to deny a utilities’ rulemaking petition seeking broad carrier-specific data collection and general evidentiary standards for Long-Cannon proceedings, holding the ICC reasonably chose to proceed by case-by-case adjudication and could rely on available procedures in individual cases to develop records, and it treated challenges to the ICC’s announced but unapplied Long-Cannon policy statement as premature until the policy is applied in a specific, reviewable rate decision.


Arkansas Power & Light Co. v. Interstate Commerce Commission, 725 F.2d 716 (1984)