Aberdeen & Rockfish Railroad v. Students Challenging Regulatory Agency Procedures

Background

The Interstate Commerce Commission and many major railroads sought to impose a temporary 2.5% across-the-board freight surcharge to raise revenue. A group of law students calling itself SCRAP and several environmental organizations sued, saying the Commission failed to prepare the environmental review required by the National Environmental Policy Act (NEPA) before allowing the surcharge. A three-judge federal court issued a preliminary injunction stopping railroads from collecting the surcharge on shipments destined for recycling pending further order.

Reasoning

The core question was whether the Commission’s action required an environmental impact statement and whether a court could stop collection of the surcharge for recycling shipments while that question is resolved. The District Court held that NEPA’s procedural requirements applied and that potential environmental harm outweighed the railroads’ financial loss. Acting alone as Circuit Justice, Chief Justice Burger noted the importance and difficulty of the issues, including standing and possible conflicts with prior rulings, but deferred to the three-judge court’s balancing of harms and therefore refused to pause the injunction.

Real world impact

As a result of this order, the injunction preventing collection of the surcharge on recyclable goods remains in effect during the appeal, causing immediate revenue loss for rail carriers. The opinion also flags a broader consequence: if upheld on the merits, the decision could require federal agencies with similar suspension powers to prepare environmental impact statements before allowing temporary rate changes. The final, nationwide rule will depend on the full Court’s later review.