Birt v. Surface Transp. Bd.

• Citation: 90 F.3d 580,319 U.S. App. D.C. 357
• Decision Date: 02 August 1996
• Docket Number: No. 95-1211,95-1211
• Parties: , 26 Envtl. L. Rep. 21,609 Melinda BIRT, Petitioner, v. SURFACE TRANSPORTATION BOARD, et al., Respondents, Union Pacific Railroad Company and City of Nampa, Idaho, Intervenors.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

Page 580

90 F.3d 580

319 U.S.App.D.C. 357, 26 Envtl. L. Rep. 21,609

Melinda BIRT, Petitioner, v. SURFACE TRANSPORTATION BOARD, et al., Respondents, Union Pacific Railroad Company and City of Nampa, Idaho, Intervenors.

No. 95-1211.

United States Court of Appeals,

District of Columbia Circuit.

Argued April 22, 1996.

Decided August 2, 1996.

On Petition for Review of an Order of the Surface Transportation Board.

Nels J. Ackerson, Washington, DC, argued the cause and filed the briefs for petitioner.

Evelyn G. Kitay, Attorney, Surface Transportation Board, Washington, DC, argued the cause for respondents, with whom Henri F. Rush, General Counsel, Ellen D. Hanson, Deputy General Counsel and Jeffrey P. Kehne, Attorney, United States Department of Justice, were on the brief for respondents. J. Carol Williams entered an appearance.

Joseph D. Anthofer, Omaha, NE, Eric S. Rossman and William A. Morrow, Nampa, ID, were on the brief for intervenors.

Charles H. Montange and Andrea C. Ferster, Washington, DC, were on the brief for amicus curiae.

Before: EDWARDS, Chief Judge, WALD and SENTELLE, Circuit Judges.

Opinion for the Court filed by Circuit Judge WALD.

Dissenting opinion filed by Circuit Judge SENTELLE.

WALD, Circuit Judge:

Petitioner Melinda Birt owns a parcel of land in Canyon County, Idaho, across which intervenor Union Pacific Railroad Company ("UP") held a right-of-way for its railroad tracks. ¹ In April of 1993, UP sought to abandon a 16-mile segment of the line running through Canyon County, presumably because its operation was no longer profitable. Shortly thereafter, the city of Nampa, which lies near the stretch of tracks in question, indicated its interest in using the land for a nature trail pursuant to the Trails Act. The Trails Act allows a sponsoring organization to develop an unused railroad track for recreational or conservational purposes; under a "rails to trails" arrangement, the railroad does not relinquish its right to use the easement in the future, thereby preventing the reversionary interests of adjoining landowners (such as Birt) from vesting. In February of 1995, after the ICC granted several extensions in the time allotted for negotiating a rails-to-trails deal--the first of which was retroactive--UP and Nampa reached agreement and the ICC ² approved the conversion.

Birt petitions for review of the ICC's decisions granting extensions for negotiation and final approval of the agreement. She argues that UP had already abandoned the track before these decisions were issued, depriving the Commission of jurisdiction over UP's right-of-way. Birt also contends that the Commission lacked authority to retroactively extend the negotiating deadline. We reject both arguments. As to the first, we think that UP failed to demonstrate the requisite intent to abandon the track prior to finalizing the conversion agreement, and thus the Commission still had jurisdiction over the right-of-way when it issued the extensions and approval order. Secondly, we find that the ICC acted within its discretion in extending the negotiating period. Accordingly, we affirm the Commission's order approving the UP/Nampa rails-to-trails agreement.

I. BACKGROUND

A. "Rails-to-Trails" Conversions

For generations, American railroads played a critical role in our nation's economic development, at peak accounting for 272,000 miles of trackage in the 1920s. ³ Preseault v. ICC, 494 U.S. 1, 5, 110 S.Ct. 914, 918, 108 L.Ed.2d 1 (1990). Today, only 141,000 miles remain, and the system continues to lose an additional 3,000 miles each year. Id. Due to the competition of cars, trucks, buses, and planes, traffic on many rail lines has deteriorated to the point of unprofitability. Before it can cease service on an established line, however, a railroad must obtain a "certificate of abandonment" from the ICC. If granted, the railroad's rights-of-way generally revert back to the adjoining landowners across whose property the tracks run. Confronted with the Hobson's choice of forfeiting a national rail system through piecemeal abandonment of lines, or forcing railroads to maintain tracks on which they cannot turn a profit, Congress developed a third option: converting "rails" to "trails." ⁴ Section 1247(d) of the Trails Act ⁵ permits a railroad seeking to abandon a line to instead negotiate with a state or local government or private organization to assume financial and legal responsibility for the track. Under a "rails-to-trails" agreement, the railroad's right-of-way is transferred to the third-party sponsor for interim recreational or conservational purposes. Because this transfer is deemed by statute not to constitute an abandonment of the line, the reversionary interests of adjoining landowners do not vest, even though the railroad ceases service and takes up the tracks. The rail line instead retains the right to reassert control over the easement at some point in the future if it decides to revive rail service.

The regulations implementing § 1247(d) direct a potential third-party sponsor to file a statement with the ICC expressing interest in a rails-to-trails conversion and offering to assume financial and legal responsibility for the trail. 49 C.F.R. § 1152.29(a) (1996). If the third party has fully complied with the filing requirements and the railroad agrees to negotiate, the Commission will then issue a "Certificate of Interim Trail Use" ("CITU"). ⁶ A CITU stays the railroad's certificate of abandonment for 180 days, during which time the parties may negotiate over interim trail use. Id. § 1152.29(c)(1). During that time period, the railroad may take certain actions which are consistent with either discontinuing service as part of a trails conversion or full abandonment of the line: discontinuance of rail service, cancellation of tariffs, and removal of tracks. Id. If the parties reach agreement prior to expiration of the CITU, the sponsor takes over management of the right-of-way, subject to the railroad's option to reassert control over the line. If the parties do not reach agreement, the certificate of abandonment becomes effective upon expiration of the CITU. Id. ("[t]he CITU will ... permit the railroad to fully abandon the line if no agreement is reached 180 days after it is issued"). Once in possession of an effective abandonment certificate, the railroad may at any time thereafter exercise its option to fully abandon the line by clearly exhibiting its intent to do so.

B. UP/Nampa Trail Use Agreement

In April of 1993, UP applied to the ICC for an abandonment certificate covering a 16-mile stretch of tracks outside Nampa called the "Stoddard Branch." ⁷ The railroad proffered several justifications for abandonment: a major shipper on the line had ceased rail shipments; remaining traffic on the line was insufficient to offset maintenance and operation costs; and there were no reasonable prospects of enough income to justify continued operation of the line. A month later, the City of Nampa ⁸ wrote to the ICC indicating its interest in negotiating a rails-to-trails agreement with UP so that a four-mile segment of the track could be used as a recreational trail. Nampa expressed its willingness to assume financial responsibility and legal liability for the line, and asked the Commission to issue a CITU staying UP's certificate of abandonment. In response, UP informed the Commission that it was willing to enter into a trail use agreement with the City of Nampa for part, but not all, of the segment which Nampa had identified. Following up on this correspondence, Nampa reiterated its interest in a trail agreement for the portion of the Stoddard Branch referenced by UP.

On October 4, 1993, the ICC approved UP's request for an abandonment certificate, but it did not impose a trail condition because Nampa had not yet fully complied with the filing requirements for trail sponsorship; on November 26, 1993, it issued the actual certificate of abandonment, to become effective December 26, 1993. During the same month, Nampa re-filed its trail use request with the Commission, properly complying with all the relevant statutory requirements, and UP filed a letter indicating it was agreeable to Nampa's request. In response, the Commission amended UP's certificate of abandonment on December 21, 1993 to issue a CITU for a portion of the Stoddard Branch running between milepost 1.75 and 5.62, giving both sides 180 days to negotiate a trail use agreement. ⁹ The Commission's authority to issue this initial CITU is not contested.

On June 10, 1994 (11 days before the end of the 180-day negotiating period), Nampa requested that the ICC extend the negotiation period, stating that "[t]he City has made an offer to the Railroad and the Railroad is in the process of evaluating it. We feel that a price can be negotiated in the near future." Three days later, UP sent a letter to the ICC stating it was agreeable to an extension. The Commission granted an extension of 60 days, but did not do so until June 29, 1994--8 days after the initial CITU had expired. On July 4 (five days after the extension was granted), Birt filed an opposition to Nampa's extension request, advancing the same argument she presses before us: that the ICC lacked jurisdiction to grant the extension because UP had already consummated the abandonment prior to expiration of the CITU by taking up the tracks and informing the Commission of its intent to abandon in a letter dated January 3, 1994. Birt then appealed the extension, contending, inter alia, that the right-of-way had been fully abandoned prior to the extension, and that "the CFR's" (presumably the ICC's abandonment regulations) did not authorize the Commission to issue extensions. Later on, the ICC granted two additional 30-day extensions timely requested by both sides. ¹⁰ On September 20, UP and Nampa signed a final trail use agreement, and the ICC approved that agreement in an order dated February 16, 1995....