GS Roofing Products Co. v. Surface Transp. Bd., GIFFORD-HILL
| Decision Date | 10 January 2001 |
| Docket Number | 00-2213,GIFFORD-HILL,Nos. 99-3218,s. 99-3218 |
| Citation | 262 F.3d 767 |
| Court | U.S. Court of Appeals — Eighth Circuit |
| Parties | (8th Cir. 2001) GS ROOFING PRODUCTS COMPANY, INC; HANSON AGGREGATES WEST, FORMERLY KNOWN AS& COMPANY, INC.; BEAN LUMBER COMPANY; CURT BEAN LUMBER COMPANY, PETITIONERS, v. SURFACE TRANSPORTATION BOARD; UNITED STATES OF AMERICA, RESPONDENTS, ARKANSAS MIDLAND RAILROAD COMPANY, INTERVENOR ON APPEAL. GS ROOFING PRODUCTS COMPANY, INC; HANSON AGGREGATES WEST, FORMERLY KNOWN AS& COMPANY, INC.; BEAN LUMBER COMPANY; CURT BEAN LUMBER COMPANY; DARDANELLE & RUSSELLVILLE RAILROAD COMPANY; EAST TEXAS CENTRAL RAILROAD COMPANY, PETITIONERS, v. SURFACE TRANSPORTATION BOARD; UNITED STATES OF AMERICA, RESPONDENTS, ARKANSAS MIDLAND RAILROAD COMPANY, INTERVENOR ON APPEAL. ARKANSAS MIDLAND RAILROAD COMPANY, PETITIONER, v. SURFACE TRANSPORTATION BOARD; UNITED STATES OF AMERICA, RESPONDENTS, GS ROOFING PRODUCTS COMPANY, INC.; HANSON AGGREGATES WEST, INC., FORMERLY KNOWN AS& COMPANY; BEAN LUMBER COMPANY; CURT BEAN LUMBER COMPANY; DARDANELLE & RUSSELLVILLE RAILROAD COMPANY; EAST TEXAS CENTRAL RAILROAD COMPANY, INTERVENORS ON APPEAL. , and 00-2740 Submitted: |
Petition for Review of an Order of the Surface Transportation Board. [Copyrighted Material Omitted]
[Copyrighted Material Omitted] Before Wollman, Chief Judge, Fagg, and Hansen, Circuit Judges.
This is the third time we have been called upon to address disputes related to the Norman Branch, a 52-mile stretch of railroad in southwestern Arkansas. On May 5, 2000, after extensive administrative proceedings and subsequent to our decisions in Caddo Antoine and Little Missouri Railroad Company v. United States, 95 F.3d 740 (8th Cir. 1996) (Caddo Antoine) and GS Roofing Products Company v. Surface Transportation Board, 143 F.3d 387 (8th Cir. 1998) (GS Roofing I), the Surface Transportation Board (Board) consolidated and issued rulings on three cases involving the Norman Branch. First, pursuant to the feeder line provisions now found in 49 U.S.C. § 10907, the Board ordered the Arkansas Midland Railroad Company (AMR) to sell the Norman Branch to the Caddo Antoine and Little Missouri Railroad Company (Caddo Antoine), a noncarrier subsidiary of the Dardanelle & Russell Railroad Company, and set the purchase price at the net liquidation value of the entire line (the feeder line case). Second, the Board set compensation for trackage rights on the southernmost three miles of the Norman Branch at $7.00 per car (the compensation case). Finally, the Board found AMR liable to two shippers for damages in the amount of $192,564.60 (the damages case). In this consolidated petition, we review each of the Board's holdings. We affirm in part and reverse and remand in part.
Our recitation of the relevant facts relies heavily on our opinions in Caddo Antoine and GS Roofing I, as well as on the Board's summary of the background of this case in its May 5, 2000, decision.
AMR acquired the Norman Branch line from Union Pacific Railroad in 1992. The line extends from milepost 426.87, near Gurdon, Arkansas, to milepost 479.2, near Birds Mill, Arkansas. The principal shipper on the line, International Paper Company (International Paper), is located approximately 3 miles from Gurdon, where the line connects at its southern end with Union Pacific's main line. The line also serves GS Roofing Products Company, Inc. (GS Roofing), Hanson Aggregates West, Inc., previously known as Gifford-Hill & Company (Gifford-Hill), and Bean Lumber Company and Curt Bean Lumber Company (Bean Lumber) (collectively, the shippers). The shippers are all located on the northern part of the Norman Branch.
On or about December 3, 1993, a severe storm caused washouts at mileposts 475.9 and 477.2 of the Norman Branch. On December 15, 1993, AMR announced that the resulting poor track conditions required it to embargo service to GS Roofing and to Bean Lumber. AMR extended the embargo to Gifford-Hill on February 22, 1994. It continued to provide service to International Paper Company, however, over the southern section of the line.
After the embargo was imposed, the shippers entered into negotiations with AMR and Union Pacific in an attempt to restore service on the Norman Branch. Although Union Pacific offered financial assistance in excess of $1.1 million to aid in re-establishing service on the line, AMR concluded that it required at least an additional $500,000 to rehabilitate the Norman Branch and accordingly refused to make repairs or restore service. In February of 1994, AMR indicated its intention to abandon the entire Norman Branch. Shortly thereafter, however, AMR determined that it would continue to provide rail service to International Paper by continuing to operate only the southernmost section of track.
The prospect of discontinuance of rail service to the shippers precipitated three related actions before the Interstate Commerce Commission (ICC).1 First, at the request of the shippers, Caddo Antoine filed a feeder line application under 49 U.S.C. § 10907 (formerly 49 U.S.C. § 10910) to acquire the entire Norman Branch and resume service to the shippers (the feeder line case). Second, Caddo Antoine requested that the ICC issue a directed service order pursuant to former 49 U.S.C. § 11125 that would allow it to begin immediate operations over the entire Norman Branch (the compensation case). Third, the shippers filed a complaint against AMR seeking damages for injuries allegedly resulting from the embargo (the damages case).
After extensive administrative and judicial proceedings, as described below, the Board directed the parties to work with an administrative law judge in an attempt to reach a negotiated resolution of the three cases. On January 13, 1999, the shippers notified the Board that mediation attempts with the ALJ had failed and requested that the Board rule on the three pending cases. Accordingly, the Board consolidated the three cases and, on May 5, 2000, issued the decision giving rise to this appeal. We have jurisdiction pursuant to 28 U.S.C. § 2321(a) and § 2342(5).
The Staggers Rail Act of 1980, now codified at 49 U.S.C. § 10907, was enacted to address concerns about the deteriorating rail service provided on some of the secondary railroad lines throughout the country. Caddo Antoine, 95 F.3d at 744. In furtherance of this goal, Congress authorized the Board, under particular circumstances, to force the sale of a railroad line at its "constitutional minimum value" to a "financially responsible person." 49 U.S.C. § 10907(b)(1). The Act further provides that "the constitutional minimum value of a particular railroad line shall be presumed to be not less than the net liquidation value of such line or the going concern value of such line, whichever is greater." 49 U.S.C. § 10907(b)(2).
On March 18, 1994, in response to AMR's service embargo, Caddo Antoine filed a feeder line application for the forced sale of the Norman Branch. While this application was pending, AMR entered into a lease and option to purchase agreement with Glenwood & Southern Railroad Company for the northern portion of the line, the section providing service to the shippers. After the ICC disallowed this action, Glenwood & Southern filed a competing feeder line application for forced sale of the Norman Branch, which the ICC also denied. Thereafter, on April 18, 1995, the ICC partially granted Caddo Antoine's feeder line application, forcing the sale of the 49-mile northern portion of the Norman Branch, but refusing to direct the sale of the three-mile southern section of track that AMR was continuing to operate to provide service to International Paper. Caddo Antoine declined to acquire only part of the Norman Branch and petitioned for judicial review of the Board's decision. On September 13, 1996, we reversed the Board's attempt to bifurcate the line and remanded for further consideration of Caddo Antoine's application to purchase the entire Norman Branch. Caddo Antoine, 95 F.3d 740.
Accordingly, the Board reopened the feeder line proceedings and directed the filing of additional evidence related to Caddo Antoine's application to purchase the Norman Branch, including updated information on the constitutional minimum value of the line. In August of 1999, the Board granted Caddo Antoine's feeder line application for the sale of the Norman Branch, setting the purchase price at $1,628,727, which was the sum of the net liquidation value (NLV) of the northern portion of the line ($901,834) and the going concern value (GCV) of the southern portion of the line ($726,893).
AMR subsequently sought administrative reconsideration of the purchase price, arguing that the Board had underestimated the GCV of the southern segment of the line. The shippers also urged reconsideration, arguing that our holding in Caddo Antoine foreclosed the use of NLV for the northern part of the track and GCV for the southern portion of the line and, alternatively, that the Board had erred in calculating the GCV of the southern portion of the line.
In its May 5, 2000, decision, the Board reconsidered the purchase price of the Norman Branch and concluded that its initial calculation of the GCV of the southern portion of the line was inaccurate. The Board furthermore concluded that the supplemented record did not contain sufficient information to calculate an accurate GCV for the southern section of the Norman Branch. The Board also questioned the propriety, in light of our holding in Caddo Antoine, of combining the NLV of the northern part of the Norman Branch with the GCV of the southern portion of the line. Accordingly, the Board revalued the Norman Branch at the NLV of the entire line, setting the purchase price at $961,096.24.
In March of 1994, the ICC denied...
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