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Administrative Law Keyed to Funk
United States v. Ludlum Steel Corp.
Citation:
406 U.S. 742 (1972)Facts
The Interstate Commerce Commission (ICC) promulgated two “car service rules” in 1969 that required freight cars, after being unloaded, to be returned in the direction of the owning railroad. These rules were previously part of a voluntary code established by railroads in 1902. The ICC’s investigation had found a nationwide shortage of freight cars, with railroads frequently unable to supply shippers with needed cars. The Commission determined that one principal factor causing this inadequate supply was the operation of the national car-pool system, which resulted in freight cars being on lines other than those of the owning road for extended periods. This practice reduced incentives for railroads to acquire new freight cars. The ICC reasoned that mandatory enforcement of these rules would encourage railroads with inadequate car ownership to acquire more cars, ultimately alleviating the nationwide shortage.
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