State of Idaho By and Through Idaho Public Utilities Com'n v. I.C.C.

Decision Date04 October 1994
Docket NumberNo. 93-1015,93-1015
Citation35 F.3d 585
Parties, 308 U.S.App.D.C. 268, 25 Envtl. L. Rep. 20,191 STATE OF IDAHO, BY AND THROUGH IDAHO PUBLIC UTILITIES COMMISSION; Hecla Mining Co.; ASARCO, Inc.; Coeur d'Alene Mines Corp., Petitioners, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents, Union Pacific Railroad Co., Coeur d'Alene Tribe, Intervenors.
CourtU.S. Court of Appeals — District of Columbia Circuit

Petition for Review of an Order of the Interstate Commerce Commission.

Donald L. Howell II, Deputy Atty. Gen., Boise, ID, for the State of Idaho, with whom Thomas F. McFarland, Jr., Chicago, IL, Nathaniel K. Adams, Coeur d'Alene, ID, and Fred Gibler, Kellogg, ID, were on the briefs, for petitioners.

Evelyn G. Kitay, Atty., I.C.C. ("ICC"), with whom Henri F. Rush, Acting Gen. Counsel, ICC, Ellen D. Hanson, Sr. Associate Gen. Counsel, ICC, Anne K. Bingaman, Asst. Atty. Gen., John J. Powers III, Andrea Limmer, and John A. Bryson, Attys., U.S. Dept. of Justice, Washington, DC, were on the briefs, for respondents.

Raymond C. Givens, Coeur d'Alene, ID, argued the cause and filed the brief, for intervenor Coeur d'Alene Tribe.

Joseph D. Anthofer, Omaha, NE, was on the brief, for intervenor Union Pacific R. Co.

Before BUCKLEY, WILLIAMS, and GINSBURG, Circuit Judges.

Opinion for the court filed by Circuit Judge BUCKLEY.

BUCKLEY, Circuit Judge:

The State of Idaho and three mining companies ("petitioners") mount environmental and economic challenges to an order of the Interstate Commerce Commission authorizing the abandonment of the Wallace Branch, a stretch of railroad track in northern Idaho. The order allows the Union Pacific Railroad Company to discontinue service on the Branch and to salvage the rails and other materials subject to certain conditions. The Coeur d'Alene Tribe has intervened, arguing that the Commission should have required Union Pacific to clean up alleged pollution on the Branch.

We affirm in part and remand in part. The Commission reasonably found that the Wallace Branch was unprofitable and thus properly permitted Union Pacific to discontinue service under the Interstate Commerce Act. In addition, the Commission correctly concluded that it lacked authority to grant the relief sought by the Coeur d'Alene Tribe; and although the Commission violated the Endangered Species Act, this violation was harmless because the Commission promised to evaluate the biological impact of any salvage activities before authorizing them. The Commission failed, however, to take a hard look at the potential environmental consequences of salvage activity as required by the National Environmental Policy Act.

I. BACKGROUND

For years, the Wallace Branch has been a transportation link for mining companies and other shippers in the Silver Valley, the largest silver-producing area in the world. The Branch runs east-west for 71.5 miles across northern Idaho, traversing the Bunker Hill toxic waste site, Heyburn State Park, the Coeur d'Alene Indian Reservation, and the Coeur d'Alene River Wildlife Management Area. The Wildlife Management Area is a mostly state-owned habitat for various fish and wildlife, including the bald eagle, a species currently listed as "endangered" under the Endangered Species Act. See 16 U.S.C. Secs. 1532(20), 1533(c) (1988); 50 C.F.R. Sec. 17.11(h) (1993). (After oral argument, the U.S. Fish and Wildlife Service proposed to reclassify the bald eagle from "endangered" to "threatened" in most states, 59 Fed.Reg. 35,584 (1994) (to be codified at 50 C.F.R. pt. 17); adoption of this proposal would not affect our analysis).

On August 22, 1991, Union Pacific sought permission to abandon the Wallace Branch under 49 U.S.C. Sec. 10903 (1988), which allows abandonment "if the Commission finds that the present or future public convenience and necessity require or permit" it. Id. Sec. 10903(a). The Wallace Branch serves five shippers, and train service is provided once a week. In its abandonment application, Union Pacific claimed that the revenues generated by this traffic were insufficient to cover operating and maintenance expenses. It also asserted that "significant opportunity costs are being incurred because of operation over the line." Abandonment Application, Joint Appendix ("J.A.") at 84. One of the opportunity costs listed in the application was the annualized cost of the capital tied up in the line.

Several parties, including the Coeur d'Alene Tribe, some affected shippers, the State of Idaho (actually the Idaho Public Utilities Commission, which appeared before the Commission, as it does here, on behalf of the State), and several of its elected officials, filed comments with the Commission on the abandonment application. Most of the comments raised economic and environmental objections. For example, the State and the shippers charged that Union Pacific had understated the profitability of the Wallace Branch. In addition, the State and the Coeur d'Alene Tribe claimed that the soil along the Branch's right-of-way is polluted with metal concentrates that have leaked over the years from passing railroad cars; they asserted that disturbance of the polluted rail bed during any salvage activities by Union Pacific could release metal contaminants into the air and water. While not opposing abandonment, the Tribe urged the Commission to require Union Pacific to clean up this alleged pollution.

In a 3-2 decision, the Commission approved Union Pacific's application, finding that abandonment of the Wallace Branch was consistent with the "public convenience and necessity" under 49 U.S.C. Sec. 10903. Union Pacific R.R. Co.--Abandonment--Wallace Branch, ID, 9 I.C.C.2d 325, 359 (1992). Assessing economic considerations, the Commission found that Union Pacific would incur a loss of $121,767 if forced to continue service during the upcoming year. Id. at 350. It also made several findings not challenged here. Id. at 350-59.

The Commission began its discussion of the potential environmental consequences of permitting Union Pacific to engage in salvage activities as follows:

We share the parties' concern that [metal] concentrates may pose a serious threat to human health and safety, whether left in place or disturbed. However, [the Environmental Protection Agency] and/or [the Idaho Division of Environmental Quality] have the appropriate jurisdiction and responsibility for developing and implementing remediation plans for sites where hazardous materials are present, including (1) determining the extent of contamination, (2) developing risk assessments and (3) determining the need for any monitoring and decontamination plans.

Id. at 337. Noting that "we cannot predict whether--or when--salvage activity will take place on this line" because the costs to Union Pacific of cleaning the track might outweigh the benefits of salvaging it, id. at 338 n. 19, the Commission imposed the following six conditions "to ensure adequate protection of the environment if salvage operations ultimately are undertaken":

1. [Union Pacific] shall not salvage any railroad infrastructure, including the rails and ties, along the entire right-of-way until it has consulted with the Idaho Department [sic] of Environmental Quality and the U.S. Environmental Protection Agency. This consultation will ensure that if and when salvage activity ultimately takes place it will be in compliance with the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. [Secs.] 9601 et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Sec. [Sec.] 6901 et seq. and/or other applicable laws and regulations.

2. Pursuant to the U.S. Fish and Wildlife Service's request, [Union Pacific], prior to any salvage activity, shall determine, using National Wetland Inventory Maps, if wetlands are located along the right-of-way. If wetlands are located along the right-of-way, [Union Pacific] shall consult with the USFWS prior to any disturbance of the right-of-way and comply with any applicable requirement of the U.S. Fish and Wildlife Coordination Act, 16 U.S.C. Sec. 661.

3. [Union Pacific] shall not undertake any salvage activities on the Wallace Branch until compliance with Sec. 7 of the Endangered Species Act of 1973, 16 U.S.C. Sec. 1531, has been completed. As a part of the Sec. 7 compliance process, [Union Pacific] shall retain an independent biological consultant, to work under [the supervision of the Commission's Section of Energy and Environment] and in cooperation with USFWS, to prepare a biological assessment.

4. A Water Pollution Control Act permit under 35 U.S.C. Sec. 1251 et seq., may be required prior to salvage of the portion of the Wallace Branch where it crosses the Coeur d'Alene River. Prior to any salvage activities, [Union Pacific] shall contact the Idaho Department of Water Resources to determine if such a permit is required and take the necessary steps to secure a permit.

5. The U.S. Army Corps of Engineers (CORPS) has expressed concerns regarding impacts to wetlands and water quality if [Union Pacific] salvages the right-of-way. In addition, the CORPS has indicated that materials in the area through which the track passes should be tested prior to any attempt to remove it. Accordingly, [Union Pacific] shall consult with the CORPS prior to undertaking any salvage activities to determine what appropriate mitigation may be required.

6. [Union Pacific] shall retain its interest in and take no steps to alter the historic integrity of all structures, including the line itself, that are 50 years old or older until completion of the Sec. 106 process of the National Historic Preservation Act, 16 U.S.C. Sec. 470f.

Id. at 339. The Commission found that "with the above-mentioned protective conditions, this abandonment proposal will not significantly affect the quality of the human environment." Id. It thus declined to prepare an Environmental Impact Statement (...

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