Bhd. of Locomotive Eng'rs & Trainmen v. Fed. R.R. Admin.

• Citation: 972 F.3d 83
• Decision Date: 28 August 2020
• Docket Number: No. 18-1235,18-1235
• Parties: BROTHERHOOD OF LOCOMOTIVE ENGINEERS AND TRAINMEN, a division of the Rail Conference of the International Brotherhood of Teamsters, and Transportation Division of the International Association of Sheet Metal, Air, Rail and Transportation Workers, Petitioners v. FEDERAL RAILROAD ADMINISTRATION and United States Department of Transportation, Respondents Kansas City Southern Railway Company and Texas Mexican Railway Company, Intervenors
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

972 F.3d 83

BROTHERHOOD OF LOCOMOTIVE ENGINEERS AND TRAINMEN, a division of the Rail Conference of the International Brotherhood of Teamsters, and Transportation Division of the International Association of Sheet Metal, Air, Rail and Transportation Workers, Petitioners

v. FEDERAL RAILROAD ADMINISTRATION and United States Department of Transportation, RespondentsKansas City Southern Railway Company and Texas Mexican Railway Company, Intervenors

No. 18-1235

United States Court of Appeals, District of Columbia Circuit.

Argued December 5, 2019

Decided August 28, 2020

Kathy L. Krieger, Washington, DC, argued the cause for petitioners. With her on the briefs were Michael S. Wolly, Washington, DC, and Lawrence M. Mann.

Jaynie Lilley, Attorney, U.S. Department of Justice, argued the cause for respondents. With her on the briefs were H. Thomas Byron III, Attorney, Steven G. Bradbury, General Counsel, U.S. Department of Transportation, Paul M. Geier, Assistant General Counsel for Litigation and Enforcement, Joy K. Park, Senior Trial Attorney, and Rebecca S. Behravesh, Senior Attorney, Federal Railroad Administration.

Aaron S. Markel, Detroit, MI, argued the cause for intervenors. With him on the brief was Donald J. Munro, Washington, DC.

Before: Tatel, Millett, and Pillard, Circuit Judges.

Opinion concurring in part and dissenting in part filed by Circuit Judge Tatel.

Millett, Circuit Judge:

By leave of the Federal Railroad Administration, two United States railroads began allowing engineers and conductors employed by their Mexican affiliate to operate trains on their tracks in the United States. Labor unions representing employees of the two railroads petition for review of the Railroad Administration's asserted approval of the new rail operations.

We grant the petition in part and vacate and remand in part because of the Railroad Administration's failure to provide a reasoned explanation for its approval of the materially altered engineer certification program administered by one of the railroads. As to that program approval, we agree with the Railroad Administration that it took final agency action and entered its decision, as required for jurisdiction to attach under the Hobbs Act, 28 U.S.C. §§ 2342(7), 2344. We also agree with the labor unions that their challenge to the approval was timely, and that the Railroad Administration's wholly unexplained approval of material decisions directly affecting railroad safety was arbitrary and capricious. We dismiss the petition's remaining challenges for lack of jurisdiction.

I

A

Title 49 of the United States Code governs "Transportation." Subtitle V of Title 49 deals specifically with "Rail Programs[,]" and Part A of Subtitle V is dedicated to "Safety[.]" We deal in this case with Chapter 201 of Part A, which Congress enacted "to promote safety in every area of railroad operations and reduce railroad-related accidents and incidents." 49 U.S.C. § 20101. To accomplish those goals, Congress directed the Secretary of Transportation, "as necessary," to "prescribe regulations and issue orders for every area of railroad safety[.]" Id. § 20103(a).

Congress's effort to increase rail safety included ensuring that only those locomotive engineers and train conductors who met federal training and safety standards could operate trains in the United States. To that end, Chapter 201 obligates the Secretary to "prescribe regulations and issue orders to establish a program requiring the * * * certification * * * of any operator of a locomotive," 49 U.S.C. § 20135(a), and "the certification of train conductors," id. § 20163(a).

Rather than charge the agency with certifying engineers and conductors itself, Congress placed the onus on each "railroad carrier[ ]" to develop and operate its own certification programs for the engineers and conductors it employs. See 49 U.S.C. §§ 20135, 20163. Congress then mandated that each railroad's certification program comply with minimum program requirements established by the Secretary, and that each program be individually approved by the Secretary. See id. §§ 20135, 20162 – 20163.

Congress defined a covered "railroad carrier" subject to those requirements as "a person providing railroad transportation, except that, upon petition by a group of commonly controlled railroad carriers that the Secretary determines is operating within the United States as a single, integrated rail system, the Secretary may by order treat the group of railroad carriers as a single railroad carrier[.]" 49 U.S.C. § 20102(3).

The Secretary has delegated to the Federal Railroad Administration the authority to "[c]arry out the functions and exercise the authority vested in the Secretary by * * * Subtitle V," 49 C.F.R. § 1.89, including the authority to approve railroads’ engineer and conductor certification programs.

In exercising its delegated authority, the Railroad Administration has promulgated regulations requiring "[e]ach railroad" to "have in effect a written program for certifying the qualifications of" both engineers and conductors. 49 C.F.R. § 240.101 (engineers); id. §§ 242.101–242.103 (conductors). Those programs must be approved and in effect "prior to commencing operations." Id.

A railroad's certification programs must ensure that the railroad's engineers and conductors satisfy baseline requirements set by the Railroad Administration in Part 240 (engineers) and Part 242 (conductors) of Title 49 of the Code of Federal Regulations. See 49 C.F.R. §§ 240.1, 242.1. Those regulatory requirements address such matters as the "eligibility, training, testing, certification and monitoring" of engineers and conductors. Id. For example, to be approved by the Railroad Administration, a railroad's engineer certification program must evaluate, among other things, an engineer's: (i) prior safety conduct, id. § 240.109; (ii) prior compliance with operating rules, id. § 240.117; (iii) history of substance abuse disorders and alcohol/drug rules compliance, id. § 240.119; (iv) visual and hearing acuity, id. § 240.121; (v) initial and continuing education, id. § 240.123; (vi) relevant knowledge, id. § 240.125; (vii) skill performance, id. § 240.127; and (viii) ongoing operational performance, id. § 240.129. See id. §§ 240.101(c), 240.203 ; see also id. §§ 242.101(a), 242.109 (requiring similar evaluations for conductor certification programs).

Each railroad must "submit its written certification program and a description of how its program conforms to the specific [regulatory] requirements" to the Railroad Administration "for approval at least sixty days before commencing operations." 49 C.F.R. § 240.103(a) ; see id. § 242.103(b).

The Railroad Administration does not issue any formal documentation approving a railroad's written certification program. Rather, the Railroad Administration has adopted a passive approval system. Under that scheme, if the Railroad Administration does not notify the railroad—in writing and within thirty days of submission—that the written certification program fails to meet the minimum regulatory criteria, then the program "is considered approved and may be implemented" by the railroad. 49 C.F.R. §§ 240.103(c), 242.103(g). The Railroad Administration's regulations are explicit that "[n]o formal approval document [regarding certification program submissions] will be issued by the [Administration]." Id. § 240 App. B (engineer programs); id. § 242 App. B (conductor programs).

Any material modifications to a previously approved certification program must also be submitted for the Railroad Administration's approval either thirty days (engineer programs) or sixty days (conductor programs) before implementation. See 49 C.F.R. §§ 240.103(e), 242.103(i). Those modifications are likewise approved passively by the Railroad Administration if not explicitly rejected within thirty days after submission. See id. §§ 240.103(e)(3), 242.103(i)(3).

When a railroad submits an original or modified conductor certification program to the Railroad Administration, it must simultaneously serve a copy of its submission on the president of every labor organization that represents the railroad's employees who are subject to Part 242. 49 C.F.R. § 242.103(c)(1). There is no similar requirement for Part 240 engineer certification program submissions. Cf. 84 Fed. Reg. 20,472, 20,478 (May 9, 2019) (Notice of Proposed Rulemaking announcing an intention to make the duty to serve equivalent for engineer certification programs). Once the conductor submission is shared with the labor organization, however, there is no continuing duty on the railroad to notify the labor organizations when (and if) the Railroad Administration either approves or disapproves the conductor certification program. Nor does anything in the Railroad Administration's regulations provide for the agency to "publish or give notice of [a] certification [program] approval." Oral Arg. Tr. 20:23–21:1 (counsel for Railroad Administration).

To enforce compliance with the certification requirements, Railroad Administration regulations prohibit any person from operating a locomotive as an engineer or serving as a conductor unless that person has been certified by a railroad under a written program approved by the Administration. See 49 C.F.R. §§ 240.201(d), 242.105(f). Any certificate must, among other things, "[i]dentify the railroad or parent company that is issuing it[,]" and "[i]dentify the person to whom it is being issued[.]" Id. §§ 240.223(a), 242.207(a). Any person who violates Part 240 or Part 242 is subject to civil penalties and potential disqualification from future railroad service. See id. §§ 240.11, 242.11.

Any person may petition the Railroad Administration for a formal waiver of compliance with the engineer certification requirements of Part 240 or the conductor certification requirements of Part 242. See 49 C.F.R. §§ 211.7, 211.9, 240.9, 242.9 ; see also 49 U.S.C. § 20103(d) – (e). Such a waiver may be issued, subject to any conditions the...