Bhd. of R.R. Signalmen v. Surface Transp. Bd.

• Decision Date: 05 May 2011
• Docket Number: No. 10–1138.,10–1138.
• Citation: 638 F.3d 807
• Parties: BROTHERHOOD OF RAILROAD SIGNALMEN et al., Petitionersv.SURFACE TRANSPORTATION BOARD and United States of America, RespondentsMassachusetts Department of Transportation and CSX Transportation, Inc., Intervenors.
• Court: U.S. Court of Appeals — District of Columbia Circuit

638 F.3d 807

190 L.R.R.M. (BNA) 2646

395 U.S.App.D.C. 32

BROTHERHOOD OF RAILROAD SIGNALMEN et al., Petitioners

v.SURFACE TRANSPORTATION BOARD and United States of America, RespondentsMassachusetts Department of Transportation and CSX Transportation, Inc., Intervenors.

No. 10–1138.

United States Court of Appeals, District of Columbia Circuit.

Argued Feb. 10, 2011.Decided March 29, 2011.Rehearing En Banc Denied May 5, 2011.

On Petition for Review of an Order of the Surface Transportation Board.Richard S. Edelman argued the cause for the petitioners. Michael S. Wolly was on brief.Jeffrey D. Komarow, Attorney, Surface Transportation Board, argued the cause for the respondents. Robert B. Nicholson and John P. Fonte, Attorneys, United States Department of Justice, and Raymond A. Atkins, General Counsel and Craig M. Keats, Deputy General Counsel, Surface Transportation Board, were on brief.Keith G. O'Brien, Peter J. Shudtz and Louis E. Gitomer were on brief for the intervenors.Before: HENDERSON, GRIFFITH and KAVANAUGH, Circuit Judges.Opinion for the Court filed by Circuit Judge HENDERSON.KAREN LeCRAFT HENDERSON, Circuit Judge:

The petitioners—the Brotherhood of Railroad Signalmen, the Brotherhood of Maintenance of Way Employees Division/IBT and the American Train Dispatchers Association (collectively, Unions)—challenge a decision of the Surface Transportation Board (STB, Board) holding that the purchase by the Massachusetts Department of Transportation (MassDOT) of railroad track and other rail assets from CSX Transportation (CSXT), which reserved a permanent, exclusive freight easement over the track, is not the acquisition of a “railroad line” requiring STB authorization or exemption under the Interstate Commerce Commission Termination Act of 1995 (ICCTA),¹ 49 U.S.C. § 10901(a)(4). Mass. Dep't of Transp.—Acquisition Exemption—Certain Assets of CSX Transp., Inc., Fin. Docket No. 35312 (STB May 3, 2010) (MassDOT Dec.). Because the STB's decision reflects a reasonable interpretation of the statute—and in particular of the term “railroad line” as used therein—we uphold the Board's decision.²

I.

In 2009, MassDOT agreed to purchase from CSXT property interests in 70–plus miles of track and real estate (Railroad Assets), including rights-of-way and related assets, in order to expand the commuter rail system MassDOT operates through its Massachusetts Bay Transportation Authority (MBTA). Under the purchase agreement, CSXT retains a permanent and exclusive freight easement over the track and MassDOT assumes all of the dispatch and maintenance responsibilities.³ On November 24, 2009, MassDOT filed a notice seeking an exemption under 49 U.S.C. § 10502 ⁴ from the statutory requirement that a “person other than a rail carrier” obtain a certificate of authorization in order to “acquire a railroad line.” 49 U.S.C. § 10901(a)(4).⁵ At the same time, MassDOT also filed a motion to dismiss the notice on the ground that neither authorization nor exemption therefrom was required because the Railroad Assets do not constitute a “railroad line” within the meaning of section 10901(a)(4).

In a May 3, 2010 decision, the STB granted MassDOT's motion to dismiss based on a line of precedent extending back almost 20 years to its decision in Maine Department of Transportation—Acquisition & Operation Exemption—Maine Central Railroad Co., 8 I.C.C.2d 835 (I.C.C.1991) ( State of Maine ). In State of Maine, the STB's predecessor—the ICC—concluded it lacked jurisdiction under section 10901 over the State of Maine's acquisition of 15.66 miles of railroad track from the Maine Central Railroad Company (Maine Central) because the State of Maine purchased only physical assets, while Maine Central retained a permanent easement to conduct its common carrier freight operations. The ICC explained it did not consider the transaction to constitute the acquisition of “a railroad line” triggering mandatory review under section 10901(a)(4) because “no common carrier rights or obligations [we]re being transferred” as “both parties agree[d] that [Maine Central] retain [ed] the common carrier obligation and that it could not cease to offer service on the line without ICC permission.” 8 I.C.C.2d at 837.

Granting MassDOT's motion to dismiss, the Board concluded the Unions did not meet their burden of showing that a departure from State of Maine—which the ICC and STB have followed in more than 60 cases—was “warranted ... as a matter of law or policy.” MassDOT Dec. 6–7 (citing Nat'l Cable & Telecomms. Ass'n v. FCC, 567 F.3d 659, 667 (D.C.Cir.2009)). The Board underscored the policy reasons behind the State of Maine decision, noting that the “main reason is ‘to remove obstacles which might inhibit States from acquiring lines so that service can be continued,’ ” while “ensur[ing] long term freight service to shippers”—with the “added benefit” of “facilitat[ing] intrastate commuter operations.” MassDOT Dec. at 7 (quoting State of Maine, 8 I.C.C.2d at 837 n. 7) (internal quotation omitted). The same policies, the Board explained, are served here because MassDOT's acquisition of the Railroad Assets will assure that adequate freight service as well as intercity passenger service continues and will allow MassDOT to expand commuter rail passenger service as well. Id. By contrast, abruptly abandoning State of Maine 's policy “could have widespread impacts on transportation planning throughout the country.” Id. at 8. The Unions timely petitioned for review.

II.

Notwithstanding the long line of agency precedent applying State of Maine, the Unions argue it was wrongly decided because its holding is inconsistent with the statutory language and with other precedent. We address each of their arguments in turn.

A. The Statutory Language

First, the Unions assert that the language of section 10901 unambiguously mandates that MassDOT obtain STB authorization or exemption therefrom before it may acquire the Railroad Assets. “We review the [Board's] interpretation of section 10901, a statute it is charged with enforcing, under the principles set forth in Chevron USA Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984).” Detroit/Wayne County Port Auth. v. ICC, 59 F.3d 1314, 1315 (D.C.Cir.1995). At Chevron step 1, if the “Congress has directly spoken to the precise question at issue,” we “must give effect to the unambiguously expressed intent of Congress.” Chevron, 467 U.S. at 842–43, 104 S.Ct. 2778. “If, however, the court determines Congress has not directly addressed the precise question at issue” but is “silent or ambiguous with respect to the specific issue, the question for the court”—at Chevron step 2—“is whether the agency's answer is based on a permissible construction of the statute.” Id. at 843, 104 S.Ct. 2778. At issue here is the proper interpretation of the term “railroad line” and whether it may encompass more than “simply a portion of a railroad” consisting of “physical assets.” Pet'rs' Br. 21.

The ICCTA does not define “railroad line” but it does define “railroad” as

includ[ing]—

(A) a bridge, car float, lighter, ferry, and intermodal equipment used by or in connection with a railroad;

(B) the road used by a rail carrier and owned by it or operated under an agreement; and

(C) a switch, spur, track, terminal, terminal facility, and a freight depot, yard, and ground, used or necessary for transportation; ....

49 U.S.C. § 10102(6). Relying on this definition, the Unions assert that a “railroad line is simply a portion of a railroad,” reasoning:

[I]f “railroad” is defined as including track, switches, spurs, and roadbed, a “railroad line” is necessarily comprised of track, switches, spurs, and roadbed. Accordingly, the Section 10901 requirement for Board approval of a non-carrier's acquisition of a railroad line means the physical assets of the line; the road, track, roadbed, bridges, switches, and spurs, used for railroad transportation.

Pet'rs' Br. 21. Thus, the Unions maintain, section 10901(a)(4) requires that the Board must either authorize or exempt MassDOT's acquisition of the physical assets which constitute a portion of CSXT's railroad. But the Union's focus on the statutory definition of “railroad” ignores that the operative term here is “railroad line.” See Nicholson v. ICC, 711 F.2d 364, 369 (D.C.Cir.1983) (“There is a distinction in the statute between ‘railroad’ and ‘railroad line.’ Petitioner's reasoning simply ignores the significance of the term ‘line’ in the phrase ‘railroad line’....”) (citation omitted). Nor is “railroad line” necessarily limited to a “portion” of a railroad's assets; it may refer to a railroad's entire railroad operation. See VIII Oxford English Dictionary 978 (2d ed. 1989) (“line”: “In railway lang[uage] ... applied ... sometimes to an entire system of railways under one management”); Princeton Univ., “railroad line,” WordNet 3.0, http:// wordnetweb. princeton. edu (last visited Mar. 24, 2011) (“railroad line” is “line that is the commercial organization responsible for operating a system of transportation for trains that pull passengers or freight”). Because “railroad line” is an ambiguous term and the ICCTA is silent on its meaning, it is left to the STB to reasonably interpret the term at Chevron step 2. Cf. Detroit/Wayne County Port Auth., 59 F.3d at 1316 (D.C.Cir.1995) (“Because the Transportation Act nowhere defines the terms ‘extension’ or ‘addition,’ we proceed to step two of Chevron to determine whether the Commission's interpretation of section 10901(a) is permissible.”).

Since State of Maine, the STB has defined “railroad line” to include not only physical railroad property but also the interstate freight transportation authority attached to the physical property. As the Board observed, “ordinarily, the Board exercises its regulatory authority under section 10901(a)(4) where a noncarrier becomes a carrier by acquiring a railroad line” and “typically the noncarrier...