CSX Transp., Inc. v. Surface Transp. Bd. & United States, 13–1313.
| Decision Date | 16 December 2014 |
| Docket Number | No. 13–1313.,13–1313. |
| Citation | 774 F.3d 25 |
| Parties | CSX TRANSPORTATION, INC., Petitioner v. SURFACE TRANSPORTATION BOARD and United States of America, Respondents Total Petrochemicals & Refining USA, Inc., Intervenor. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
OPINION TEXT STARTS HERE
On Petition for Review of Orders of the Surface Transportation Board.
Paul A. Hemmersbaugh argued the cause for petitioner. With him on the briefs were G. Paul Moates, Matthew J. Warren, Peter J. Shudtz, Paul R. Hitchcock, and John P. Patelli.
Theodore L. Hunt, Attorney, Surface Transportation Board, argued the cause for respondents. With him on the brief were William J. Baer, Assistant Attorney General, U.S. Department of Justice, Robert B. Nicholson, Nickolai G. Levin, and Daniel E. Haar, Attorneys, Craig M. Keats, General Counsel, Surface Transportation Board, and James A. Read, Attorney.
Jeffrey O. Moreno and David E. Benz were on the brief for intervenor Total Petrochemicals & Refining USA, Inc. in support of respondents.
Before: KAVANAUGH, Circuit Judge, EDWARDS, Senior Circuit Judge, and GINSBURG, Senior Circuit Judge.
Opinion for the Court filed by Senior Circuit Judge EDWARDS.
The Surface Transportation Board (“STB” or “Board”) has exclusive jurisdiction over interstate rail transportation, including the power to review and modify railroad rates to ensure that they are reasonable. 49 U.S.C. §§ 10501, 10701, 10707. However, the Board can only examine the reasonableness of a rail carrier's rate if it determines that the railroad has “market dominance” over the transportation route to which the rate applies. Id. §§ 10707(b), (d). A railroad has market dominance over a route in the “absence of effective competition from other rail carriers or modes of transportation.” Id. § 10707(a).
On May 3, 2010, Total Petrochemicals & Refining USA, Inc. (“TPI”) filed a rate complaint with the STB, alleging that numerous CSX Transportation (“CSX”) common carrier rates were unreasonable. CSX moved for an expedited procedure with respect to questions related to market dominance. The Board granted the motion and bifurcated the adjudication into two phases—a market dominance phase and a second rate reasonableness phase. On May 31, 2013, the Board issued a decision, concluding that CSX had market dominance over 51 contested rates. On December 19, 2013, the Board rejected requests for reconsideration. CSX immediately sought review by this court of the Board's interlocutory ruling regarding the 51 rates with respect to which CSX was found to have market dominance.
The Board contends that this action should be dismissed because the contested market dominance decision is merely an interlocutory, non-final order. In response, CSX asserts that the Board's decision is a final order that is subject to review by this court because the decision concludes the agency's market dominance decisionmaking process. The railroad also argues that the decision is reviewable independent of finality because in determining market dominance the Board adopted a new legislative rule without notice and comment. The Board has the better of both arguments.
Under the Hobbs Act, 28 U.S.C. § 2342, this court has jurisdiction to review only “final” orders of the Board. “Finality under the Hobbs Act is to be narrowly construed.” Blue Ridge Envtl. Def. League v. Nuclear Regulatory Comm'n, 668 F.3d 747, 753 (D.C.Cir.2012) (citation and internal quotation marks omitted). In an administrative adjudication, a final order typically “disposes of all issues as to all parties.” Id. (citation omitted). There is no final order here because the Board has yet to inquire into the reasonableness of CSX's rates and has issued no adverse ruling with respect to any rate. That the STB acceded to CSX's request to bifurcate the adjudication does not change the fact that the decision in question is merely an interlocutory order issued in a matter that is still presently pending before the Board. And there is no exception to the final order rule for petitioners who allege that an agency has adopted a new legislative rule during the course of an adjudication without notice and comment. This is a matter that can be raised by CSX if it elects to appeal the Board's final decision at the conclusion of the adjudication. This court has no jurisdiction at this stage of the administrative adjudication to interfere with the Board's process.
On May 3, 2010, TPI filed a rate complaint with the STB. The complaint challenged the reasonableness of CSX's rates for transporting chemicals and plastics along a number of rail routes. Under the Board's normal procedure, parties submit evidence of market dominance and rate reasonableness simultaneously. See Expedited Procedures for Processing Rail Rate Reasonableness, Exemption and Revocation Proceedings, 1 S.T.B. 754, 760 (1996). However, CSX moved for an expedited determination of market dominance. The Board agreed, finding that CSX had raised “considerable doubts as to the shipper's ability to satisfy the Board's market dominance standard.” Total Petrochemicals USA, Inc. v. CSX Transp., Inc., No. R 42121, 2011 WL 1306807, at *3–4 (STB served Apr. 4, 2011).
The Board explained that Id. at *5. The Board also noted that if market dominance were resolved separately, the parties would be “spared the time and expense of filing rate reasonableness evidence where the carrier [would] not [be] found market dominant.” Id. at *3. Accordingly, the STB bifurcated the proceeding into a preliminary market dominance phase and a second rate reasonableness phase. Due to the complexity of the case, the Board decided to employ a streamlined method for evaluating evidence of market dominance, first developed in M&G Polymers USA, LLC v. CSX Transp., Inc., No. R 42123, 2012 WL 4469326 (STB served Sept. 26, 2012).
On May 31, 2013, after the parties had submitted evidence, the Board issued its interlocutory decision on the market dominance issue. Total Petrochemicals & Ref. USA, Inc. v. CSX Transp., Inc., No. OR 42121, 2013 WL 2367766 (STB served May 30, 2013). The Board determined that CSX has market dominance over 51 of 84 disputed rates, and that the STB has administrative authority to examine the reasonableness of those rates. Id. at *1. CSX conceded that it has market dominance over an additional 21 rates at issue before the Board. Id.
On December 19, 2013, the Board denied requests for reconsideration. CSX immediately appealed the Board's market dominance decision to this court. On appeal, the railroad argues that the M&G Polymers framework is a new legislative rule improperly adopted without notice and comment. CSX also argues that the new methodology is arbitrary and capricious and not in accordance with law. The Board has not yet determined whether any of CSX's rates are unreasonable, and has therefore issued no rulings affecting those rates.
As noted above, this court has jurisdiction under the Hobbs Act to review “final orders” issued by the STB. 28 U.S.C. § 2342(5). There are two considerations relevant to determining finality: “whether the process of administrative decisionmaking has reached a stage where judicial review will not disrupt the orderly process of adjudication and whether rights or obligations have been determined or legal consequences will flow from the agency action.” Port of Bos. Marine Terminal Ass'n v. Rederiaktiebolaget Transatlantic, 400 U.S. 62, 71, 91 S.Ct. 203, 27 L.Ed.2d 203 (1970). In the related context of reviewability under the Administrative Procedure Act (“APA”), the Supreme Court has explained that final orders (1) cannot be “tentative or interlocutory,” and (2) must determine rights, obligations, or legal consequences. Bennett v. Spear, 520 U.S. 154, 178, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997).
A final order in an administrative adjudication is normally “one that disposes of all issues as to all parties.” Blue Ridge, 668 F.3d at 753 (citation omitted). This rule is well understood in our jurisprudence and routinely applied with respect to all adjudications. As the Court noted in FTC v. Standard Oil Co. of California, 449 U.S. 232, 243, 101 S.Ct. 488, 66 L.Ed.2d 416 (1980), judicial review of agency action “should not be a means of turning [an agency regulator] into [a] defendant before adjudication concludes.”
CSX presents two arguments why the Board's interlocutory determination of market dominance should be considered final. First, it claims that the Board's decision was final because it was the consummation of the agency's market dominance decisionmaking process. According to CSX, the decision affected its rights and obligations by concluding that the railroad's rates are within the agency's jurisdiction. Second, CSX claims that, in following a new method to evaluate the evidence of market dominance, the Board impermissibly adopted a new legislative rule without first engaging in notice and comment rulemaking. According to CSX, this action by the Board, without more, was enough to allow it to seek interlocutory review. Both arguments are simply wrong.
The Board's decision on market dominance was an interlocutory order that did not “dispose[ ] of all issues as to all parties or fix the parties' rights and obligations.” Blue Ridge, 668 F.3d at 757 (citation and internal quotation marks omitted) (alteration in original). A finding that market dominance exists “merely authorizes the [Board] to proceed to an...
To continue reading
Request your trial