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Under the Administrative Procedure Act, the case for deference to an agency's decision not to undertake rulemaking is even stronger when the alternative is not maintenance of the status quo but formulation of standards through case-by-case adjudication. The choice between rulemaking and case-by-case adjudication lies primarily in the informed discretion of the administrative agency. Where the reasons offered by the agency for its choice constitute a sensible response to a new situation, the court must defer to the agency's decision that adjudication best serves its purpose.
Petitioner utility companies filed a petition with the respondent Interstate Commerce Commission (ICC) to institute a rulemaking proceeding under § 10707a(e)(2)(B), (C). The utility companies requested carrier-specific data that they claimed was necessary to comply with the policy of the Long-Cannon Amendment to the Staggers Rail Act (Amendment), 49 U.S.C.S. § 10707a(e)(2)(B), (C). The ICC issued a decision refusing to institute a rulemaking proceeding and announcing that the factors in § 10707a(e)(2)(B), (C) would be considered on a case-by-case basis. The utility companies appealed the decision and requested a review of the policy statement.
Did the ICC err in refusing to institute a rulemaking proceeding, as requested by the petitioners?
The court affirmed the ICC's refusal to institute a rulemaking proceeding, and the court declined to comment on the policy statement. The court held that there was no basis in the record to compel rulemaking. The ICC's decision to avoid the compilation of unnecessary data was sound, and it had the discretion to make the decision under the Amendment. The policy statement was not ripe for judicial review because it was a non-binding statement of future intent, and it did not pose any hardship on the utility companies. Review by the court was only appropriate after the policy was applied to a concrete fact situation.