Redmond-Issaquah R.R. v. Surface Transp. Bd.

• Decision Date: 06 April 2000
• Docket Number: REDMOND-ISSAQUAH,No. 98-70906,98-70906
• Citation: 223 F.3d 1057
• Parties: (9th Cir. 2000) RAILROAD PRESERVATION ASSOCIATION, Petitioner, v. THE SURFACE TRANSPORTATION BOARD; UNITED STATES OF AMERICA, Respondents. and THE LAND AND CONSERVANCY OF SEATTLE AND KING COUNTY; and BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY, Intervenors. Office of the Circuit Executive
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1057

223 F.3d 1057 (9th Cir. 2000)

REDMOND-ISSAQUAH RAILROAD PRESERVATION ASSOCIATION, Petitioner, v. THE SURFACE TRANSPORTATION BOARD; UNITED STATES OF AMERICA, Respondents. and THE LAND AND CONSERVANCY OF SEATTLE AND KING COUNTY; and BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY, Intervenors.

No. 98-70906

Office of the Circuit Executive

U.S. Court of Appeals for the Ninth Circuit

Argued and Submitted April 6, 2000--Seattle, Washington

Filed September 14, 2000

Thomas F. McFarland, Jr., McFarland & Herman, Chicago, Illinois, for the appellant.

Robert B. Nicholson and John P. Fonte, Department of Justice, Washington D.C. and Evelyn G. Kitay, Surface Transportation Board, Washington, D.C., for the appellees.

Sarah Whitley Bailiff, The Burlington Northern and Santa Fe Railway Company, Forth Worth, TX and Betty Jo Christian, Carolyn Doozan Clayton, and Carol R. Goisan, Steptoe & Johnson LLP, Washington, D.C., for the intervening respondent The Burlington Northern and Santa Fe Railway Company. 11903

David J. Eldred, Deputy Prosecuting Attorney, King County, Seattle, WA and Charles H. Montange, The Land Conservancy of Seattle and King County, Seattle, Washington, for the intervening respondents, King County, Washington and The Land Conservancy of Seattle and King County.

Appeal from the Surface Transportation Board No. AB-6(Sub-No. 380X)

Before: Harry Pregerson and Dorothy W. Nelson, Circuit Judges, and Lawrence K. Karlton, District Judge.^*

D.W. NELSON, Circuit Judge:

The Redmond-Issaquah Railroad Preservation Association ("RIRPA"), an organization made up largely of homeowners living along Lake Sammamish in King County, Washington, appeals the Surface Transportation Board's ("STB") decision rejecting its Offer of Financial Assistance ("OFA") to acquire the Redmond-Issaquah railroad line; the line, measuring 12.45 miles, runs between Redmond and Issaquah along Lake Sammamish. The STB, determining that future traffic on the line was extremely speculative, concluded that RIRPA was not interested in continuing rail services. RIRPA appeals the STB's denial of its OFA, contending that the agency exceeded its statutory authority because the OFA approval procedure does not warrant using the continuation of rail services as an eliminating criterion. RIRPA also asserts that the STB's decision was arbitrary and capricious. We affirm.

I. FACTUAL AND PROCEDURAL BACKGROUND

The disposition of the Redmond-Issaquah line has been a highly contentious matter, with recreational trail advocates on one side and property owners on the other viewing it as a zero-sum issue. This appeal is only the most recent manifestation of the struggle which began when The Burlington Northern and Santa Fe Railway Company ("BNSF"), in April 1997, concluded that continued operation of the line was not economically viable; BNSF had suspended rail services the previous year for safety reasons. The company subsequently negotiated an agreement whereby it would transfer to The Land Conservancy the assets, rights, and obligations related to the Redmond-Issaquah line. The Land Conservancy, in return, agreed to pay BNSF $1.5 million and to assume or arrange for the assumption of all common carrier obligations pertaining to the line. As Congress, through the Interstate Commerce Commission Termination Act of 1995 ("ICCTA"),¹ has inhered in the STB the authority to review all acquisitions of rail lines, The Land Conservancy petitioned the STB for a non-carrier class exemption to acquire and operate the line without being subject to the usual certification procedure. See 49 U.S.C. S 10901 (1996). The STB granted the acquisition exemption and, on April 22, 1997, BNSF and The Land Con-servancy consummated the part sale and part charitable donation transaction.

Less than two months later, on June 11, 1997, The Land Conservancy petitioned the STB for authority to abandon the line in order to discontinue it for future rail service and remove it from the national transportation system.² As with acquisitions, owners may not abandon railroad lines without the STB's approval. See 49 U.S.C. S 10904 (1996). In granting the STB and its predecessor entity, the ICC, the authority to regulate abandonments, Congress sought to balance the railroad companies' need to manage its tracks in an economically efficient manner with the public's need for a functioning interstate railroad system. See Colorado v. United States, 271 U.S. 153, 168-69 (1926). At the same time The Land Conservancy sought abandonment, it petitioned the STB to use the Redmond-Issaquah line as a recreational trail. Under the National Trails System Act of 1983, more commonly known as the "Rails to Trails Program," the STB may approve the interim use of railroad corridors otherwise ripe for abandonment as recreational trails. See 16 U.S.C.S 1247(d) (1985). The use is deemed interim because the corridor is rail banked, or maintained, for possible future rail use.

The STB took issue with The Land Conservancy's plan to railbank the line and, in September 1997, revoked the acquisition exemption and ordered the organization to reconvey the Redmond-Issaquah line to BNSF:

The policy underlying the governing acquisition exemption procedures is to support the continued operation of rail lines in lieu of abandoning them. There is no set period of time during which a line must be operated before abandonment authority can be sought. However, when an acquiring noncarrier initiates abandonment proceedings within days after consummating the acquisition of the line, and there are no extenuating circumstances, our processes are being abused. The facts here support the conclusion that TLC never had any intention of reinstituting rail service on the line. It appears, rather, that TLC has put into effect a plan to convert the line to trail use as soon as possible following its acquisition of the line. This constitutes a misuse of our procedures, which envision that a party that acquires an active rail line does so to continue to provide rail service. Manifestly, TLC never had any such intent.

The Land Conservancy of Seattle and King County -Acquisition and Operation Exemption -The Burlington Northern and Santa Fe Ry. Co., STB Finance Docket No. 33389 at 3 (served Sept. 26, 1997). The STB, in a later decision consolidating the acquisition exemption and abandonment exemption proceedings, denied the petition to reconsider its decision revoking the acquisition and dismissed The Land Conservancy's petition to abandon the line. See The Land Conservancy of Seattle and King County -Acquisition and Operation Exemption -The Burlington Northern and Santa Fe Ry. Co., STB Finance Docket No. 33389; The Land Conservancy of Seattle and King County -Abandonment Exemption -in King County, WA, STB Docket No. AB-508X; The Burlington Northern and Santa Fe Ry. Co. -Abandonment Exemption -in King County, WA, STB Docket No. AB-6 (Sub-No. 380X) (served May 13, 1998) (hereinafter referred to collectively as "Acquisition and Abandonment Exemptions"). In addition, the STB reinstated the abandonment exemption proceeding initiated by The Land Conservancy, substituted BNSF as the petitioner, and granted it an exemption to abandon the line. See id. at 11. In so doing, the STB advised that if BNSF exercised the abandonment exemption, "any person desiring rail service to be continued" would have the opportunity to file an OFA under 49 U.S.C. S 10904 (1996). Id. at 13. An OFA, also referred to as a "forced sale," is the procedure by which a party may prevent a line's abandonment or discontinuance by purchasing it or subsidizing the carrier's service. The STB warned, however, that it would carefully review any OFA filed given the circumstances under which it revoked The Land Conservancy's acquisition of the line:

Specifically, because the information now before us shows that this line is not currently being used for rail service and that there is no apparent demand for rail service, any entity filing an OFA should be pre pared to submit not only evidence of its financial responsibility, but also evidence of a public need for continued rail service. . . . We will not tolerate abuse of the OFA procedures by either proponents or opponents of an OFA.

Id. at 14. RIRPA filed its OFA in June 1998 and immediately met with resistance. BNSF argued that RIRPA did not intend to continue rail service and The Land Conservancy, along with King County, charged that the association's primary aim was to frustrate the development of a nature trail in order to protect the privacy of its members' properties. Of significance here, the railroad corridor at issue is the largest missing link in a statewide trail extending from Puget Sound to northern Idaho.

The STB, taking into consideration opposition to RIRPA's OFA as well as evidence that future traffic was highly speculative, rejected the OFA:

Here, after considering all the evidence presented by RIRPA and the other parties, we conclude that the record does not permit us to conclude that the offer is motivated by a desire to provide continued rail service. Nor can we find that continued rail service is likely to result from the offer. That being the case, it would be an abuse of our processes to permit the section 10904 process to go forward . . . . That their primary motivation might be to defeat interim trail use would by itself not condemn an offer, as long as they were intending to provide rail service and there existed a real need for that service . . . . However, RIRPA's statements provide no basis for us to con clude that future traffic on the line is other than highly speculative.

The Burlington Northern and Santa Fe Ry. Co. -Abandonment Exemption -in King County, WA In the Matter of an Offer of Fin. Assistance, STB Docket No. AB-6 (Sub-No. 380X) at 7-8 (served Aug. 5, 1998) (hereinafter referred to as "Offer of Fin. Assistance"). By letter filed with the STB on August 10, 1998, BNSF indicated...