Buffalo Crushed Stone v. Surface Transp. Bd., No. 98-1505

CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)
Writing for the CourtTatel
Citation194 F.3d 125
Parties(D.C. Cir. 1999) Buffalo Crushed Stone, Inc.,Petitioner v. Surface Transportation Board and United States of America, Respondents R.J. Corman Railroad Company/Allentown Lines, Inc. and Consolidated Rail Corporation, Intervenors
Decision Date29 October 1999
Docket NumberNo. 98-1505

Page 125

194 F.3d 125 (D.C. Cir. 1999)
Buffalo Crushed Stone, Inc.,Petitioner
v.
Surface Transportation Board and United States of America, Respondents
R.J. Corman Railroad Company/Allentown Lines, Inc. and Consolidated Rail Corporation, Intervenors
No. 98-1505
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 13, 1999
Decided October 29, 1999

Page 126

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

William A. Mullins argued the cause for petitioner. With him on the briefs was David C. Reeves.

Theodore K. Kalick, Attorney, Surface Transportation Board, argued the cause for respondents. With him on the brief were Henri F. Rush, General Counsel, Ellen D. Hanson, Deputy General Counsel,

Page 127

Joel I. Klein, Assistant Attorney General, U.S. Department of Justice, John J. Powers, III and Robert J. Wiggers, Attorneys.

Jonathan M. Broder, Kevin M. Sheys, and Paul M. Laurenza were on the brief for intervenors.

Before: Ginsburg, Henderson and Tatel, Circuit Judges.

Opinion for the Court filed by Circuit Judge Tatel.

Tatel, Circuit Judge:

A Surface Transportation Board regulation provides that rail abandonment notices containing false information are "void ab initio" and must be "summarily reject[ed]." In this case, although a false statement in a notice of abandonment was not brought to the Board's attention until long after the notice was filed and the line sold to another carrier, petitioner argues that the regulation requires the Board to reject the notice and nullify the sale. Agreeing with the Board that the regulation does not unambiguously require that result and finding the Board's action neither arbitrary nor capricious, we deny the petition for review.

I.

Rail carriers seeking to abandon rail lines must first receive authorization from the Surface Transportation Board. Pursuant to 49 U.S.C. § 10903(d), the Board may affirmatively approve an abandonment upon finding that it is permitted by "public convenience and necessity." Alternatively, the Board may expedite the process by granting the carrier either an "individual" or "class" exemption from section 10903(d). See 49 U.S.C. § 10502. To initiate the expedited class exemption procedure--the process involved in this case--a carrier files with the Board a "notice of exemption," which must certify that no local traffic has moved over the line for at least two years. See 49 C.F.R. § 1152.50(b). If a notice of exemption contains false or misleading information, section 1152.50(d)(3) of the Board's regulations provides--in language central to this dispute--that "the use of the exemption is void ab initio and the Board shall summarily reject the exemption notice." 49 C.F.R. § 1152.50(d)(3).

The Board alerts the public to a proposed "class exemption" abandonment by publishing a notice in the Federal Register. See id. Publication affords interested parties a chance to submit an offer of financial assistance, known as an OFA, proposing to subsidize or purchase the line that is to be abandoned. See 49 U.S.C. § 10904; 49 C.F.R. § 1152.27. If a prospective purchaser and incumbent carrier agree to a purchase that will maintain service, the Board approves the sale and--again of significance to this case--dismisses the notice of exemption. See 49 C.F.R. § 1152.27(f)(2).

In July 1996, Conrail filed a notice of exemption proposing to abandon two rail lines running for several miles through Erie County, New York. As required by section 1152.50(b), Conrail's notice contained a certification that no traffic had moved over the lines for the previous two years. Responding to the Federal Register notice, R.J. Corman Railroad Company/Allentown Lines, Inc. (RJCN) filed an OFA proposing to acquire the two lines and to continue service. Conrail agreed to sell the lines to RJCN, and the Board dismissed Conrail's notice of exemption.

Approximately eighteen months later, petitioner Buffalo Crushed Stone, a shipper located near one of the lines, filed a petition with the Board to vacate Conrail's previously dismissed exemption notice. According to Buffalo, Conrail had falsely certified that no traffic had moved across the lines for the two years prior to the filing of the notice. Buffalo knew the certification was false because it had shipped at least twelve carloads of crushed stone over the lines during the relevant two year period. Relying on section 1152.50(d)(3), Buffalo argued that the exemption was

Page 128

"void ab initio" and that the Board must "summarily reject" the notice. Buffalo also urged the Board to revoke the sale to RJCN, since that transfer resulted from OFA procedures that had been triggered by the defective notice. Conrail never disputed the falsity of the certification, claiming instead that the mistake was "de minimis" and "inadvertent."

Buffalo also filed a formal complaint alleging that RJCN had refused to provide service to it across one of the lines acquired from Conrail and had discriminated against it by demanding unreasonable rates. According to Buffalo, this gave the Board an additional reason for revoking the sale. Alternatively, Buffalo asked the Board to order RJCN to provide it with trackage rights for reasonable fees.

The Board rejected Buffalo's petition to revoke the sale and dismissed its complaint against RJCN. Although the Board conceded that false information in an exemption notice normally results in a declaration that the notice is void ab initio, it identified several reasons why such action was inappropriate in the circumstances of this case. For one thing, vacating the exemption notice and subsequent sale would unfairly disadvantage RJCN, a bona fide purchaser who had acquired the line under section 10904's OFA procedures. More generally, the Board found that nullifying the sale would cause future OFA purchasers "to worry that their rights to the lines they acquire might be abrogated months and perhaps years later because of some defect in the underlying abandonment."The Board feared this would discourage the use of OFAs, thus "derogating section 10904." Finally, the Board...

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22 practice notes
  • Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule
    • United States
    • Federal Register June 03, 2010
    • June 3, 2010
    ...'' (quoting In re Trans Alaska Pipeline Rate Cases, 436 U.S. 631, (1978)); Buffalo Crushed Stone, Inc. v. Surface Transportation Board, 194 F.3d 125, 129-30 (DC Cir. (regulation of Surface Transportation Board providing that if a notice of exemption ``contains false or misleading informatio......
  • Louisiana Federal Land Bank v. Farm Credit Admin., No. Civ.A.00-1582(RMU).
    • United States
    • United States District Courts. United States District Court (Columbia)
    • August 23, 2001
    ...greater deference than its interpretation of the statute that it administers." See Buffalo Crushed Stone, Inc. v. Surface Transp. Bd., 194 F.3d 125, 128 (D.C.Cir. 1999) (citing Bush-Quayle Primary Comm., Inc., v. Federal Election Comm'n, 104 F.3d 448, 452 (D.C.Cir.1997)). As deferential as ......
  • Railroad Ventures, Inc. v. Surface Transp. Bd., No. 00-3261.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (6th Circuit)
    • August 1, 2002
    ...merit[] even greater deference than its interpretation of the statute that it administers." Buffalo Crushed Stone, Inc. v. STB, 194 F.3d 125, 128 (D.C.Cir.1999). However, a regulation from the agency charged with implementing the statute cannot stand if it is "arbitrary, capricious, or mani......
  • Mashack v. Jewell, Civil Action No. 15-2107 (ABJ)
    • United States
    • U.S. District Court — District of Columbia
    • February 26, 2016
    ...even greater deference than its interpretation of the statute that it administers.” Buffalo Crushed Stone, Inc. v. Surface Transp. Bd. , 194 F.3d 125, 128 (D.C.Cir.1999), citing Bush – Quayle Primary Comm., Inc., v. FEC , 104 F.3d 448, 452 (D.C.Cir.1997) (“The call for deference is even gre......
  • Request a trial to view additional results
19 cases
  • Louisiana Federal Land Bank v. Farm Credit Admin., No. Civ.A.00-1582(RMU).
    • United States
    • United States District Courts. United States District Court (Columbia)
    • August 23, 2001
    ...greater deference than its interpretation of the statute that it administers." See Buffalo Crushed Stone, Inc. v. Surface Transp. Bd., 194 F.3d 125, 128 (D.C.Cir. 1999) (citing Bush-Quayle Primary Comm., Inc., v. Federal Election Comm'n, 104 F.3d 448, 452 (D.C.Cir.1997)). As deferential as ......
  • Mashack v. Jewell, Civil Action No. 15-2107 (ABJ)
    • United States
    • U.S. District Court — District of Columbia
    • February 26, 2016
    ...even greater deference than its interpretation of the statute that it administers.” Buffalo Crushed Stone, Inc. v. Surface Transp. Bd. , 194 F.3d 125, 128 (D.C.Cir.1999), citing Bush – Quayle Primary Comm., Inc., v. FEC , 104 F.3d 448, 452 (D.C.Cir.1997) (“The call for deference is even gre......
  • Railroad Ventures, Inc. v. Surface Transp. Bd., No. 00-3261.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (6th Circuit)
    • August 1, 2002
    ...merit[] even greater deference than its interpretation of the statute that it administers." Buffalo Crushed Stone, Inc. v. STB, 194 F.3d 125, 128 (D.C.Cir.1999). However, a regulation from the agency charged with implementing the statute cannot stand if it is "arbitrary, capricious, or mani......
  • Nat'l Pork Producers Council v. United States Envtl. Prot. Agency, No. 08–61093.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (4th Circuit)
    • March 15, 2011
    ...1265, 1269 (5th Cir.1986) (citations and internal quotation marks omitted); see also Buffalo Crushed Stone, Inc. v. Surface Transp. Bd., 194 F.3d 125, 128–29 (D.C.Cir.1999) (“[D]eference is not without limit. We will reject an agency's interpretation if an alternative reading is compelled b......
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