Illinois Commerce Com'n v. I.C.C.

• Decision Date: 24 May 1988
• Docket Number: Nos. 86-1687,87-1015,87-1278,s. 86-1687
• Citation: 848 F.2d 1246,270 U.S. App. D.C. 214
• Parties: ILLINOIS COMMERCE COMMISSION and Patrick W. Simmons, Petitioners, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents, Association of American Railroads, Rails to Trails Conservancy, and Iowa Trails Council, Intervenors. COMMISSIONER OF TRANSPORTATION OF the STATE OF NEW YORK, Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents. RAILS TO TRAILS CONSERVANCY, IOWA TRAILS COUNCIL, and Conservation Federation of Maryland, Petitioners, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1246

848 F.2d 1246

270 U.S.App.D.C. 214

ILLINOIS COMMERCE COMMISSION and Patrick W. Simmons, Petitioners, v. INTERSTATE COMMERCE COMMISSION and United States of America,

Respondents,

Association of American Railroads, Rails to Trails

Conservancy, and Iowa Trails Council, Intervenors. COMMISSIONER OF TRANSPORTATION OF the STATE OF NEW YORK, Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America,

Respondents.

RAILS TO TRAILS CONSERVANCY, IOWA TRAILS COUNCIL, and Conservation Federation of Maryland, Petitioners, v. INTERSTATE COMMERCE COMMISSION and United States of America,

Respondents.

Nos. 86-1687, 87-1015, 87-1278.

United States Court of Appeals District of Columbia Circuit.

Argued Feb. 25, 1988.

Decided May 24, 1988.

As Amended May 24, 1988.

Gordon P. MacDougall, Washington, D.C., with whom James E. Weging, Sp. Asst. Atty. Gen., Chicago, Ill., were on the brief for petitioners Illinois Commerce Com'n and Patrick W. Simmons in No. 87-1687.

William J. Dwyer, Albany, N.Y., for petitioner Com'r of Transp. of the State of N.Y. in No. 87-1015.

Charles H. Montange, Washington, D.C., for petitioners Rail to Trails Conservancy, Iowa Trails Council, and Conservation Federation of Maryland in No. 87-1278.

Louis Mackall, Atty., ICC, with whom Robert S. Burke, General Counsel, Ellen D. Hanson, Associate Gen. Counsel, Anne S. Almy, Asst. Chief, Land and Natural Resources Div., Dept. of Justice, and J. Carol Williams, Atty., Dept. of Justice, Washington, D.C., were on the joint brief for Respondents the ICC and the U.S.

John T. Sullivan and J. Thomas Tidd, Washington, D.C., were on the brief for intervenor, Ass'n of American Railroads.

Before MIKVA, STARR and SILBERMAN, Circuit Judges.

Opinion for the Court PER CURIAM.

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

PER CURIAM:

This case is before us a second time following a remand to the Interstate Commerce Commission. The controversy relates to the ICC's relaxation of regulatory strictures triggered by a railroad's proposed abandonment of rail lines that have fallen into a state of rail-traffic desuetude. In our prior consideration, we concluded that the ICC's order establishing a class exemption for abandonments was, in certain respects, deficient under the applicable standards of the Administrative Procedure Act, 5 U.S.C. Sec. 706(2)(A) (1982). Specifically, we concluded that in three particulars the Commission failed adequately either to address salient points adumbrated in comments submitted to the ICC or to marshall the requisite factual support for the conclusions undergirding the Commission's final rule.

The question now before us is whether the ICC complied on remand with both the APA's strictures and the specific requirements previously articulated by this court. In addition, an entirely new set of questions arose during the course of the proceedings on remand, namely, whether the ICC's actions comply with various federal environmental statutes. For the reasons that follow, we uphold the Commission's decision.

I

The order in question involves an expedited method of effecting abandonment of "out of service" rail lines, ¹ which are defined as those carrying no local traffic for at least two years. The Commission promulgated the regulation, 49 C.F.R. Sec. 1152.50 (1985), pursuant to the deregulatory mandate of the Staggers Rail Act of 1980, ² specifically section 10505. 49 U.S.C. Sec. 10505 (1982). Section 10505 requires the ICC to exempt a transaction or class of transactions from regulation when the Commission finds that (1) regulation is not necessary to carry out the multi-faceted national rail transportation policy (RTP), as set forth in 49 U.S.C. Sec. 10101a; and (2) either (a) the transaction is of limited scope, or (b) regulation is not needed to protect shippers from the abuse of market power. Id. Sec. 10505(a). The statutory and procedural background of the rulemaking is thoroughly chronicled in our previous opinion, the upshot of which was to dispatch the rulemaking back to the Commission for further consideration and explanation. Illinois Commerce Comm'n v. ICC, 787 F.2d 616 (D.C.Cir.1986).

In directing a remand, our colleagues faulted the Commission's order in several respects. First, the ICC had failed adequately to consider whether the abandonment regulations from which it was exempting eligible rail lines were necessary to effectuate relevant goals of the RTP, specifically: (1) energy conservation, (2) maintenance of reasonable rates, (3) meeting the needs of the national defense, and (4) cooperation with States in respect of transportation matters. Id. at 629-32. ³ Second, the Commission had neglected to assess the adequacy of its findings concerning the limited scope of the exemption and the potential for abuse of market power, in light of the expanded definition of "out of service" adopted in the final rule. Id. at 634-35. The originally proposed definition of "out of service," which encompassed only rail lines carrying no traffic at all for at least two years, had been expanded in the final rule to include lines carrying overhead traffic, i.e., traffic that neither originates nor terminates on a line and can be rerouted over other lines. Id. at 634. Finally, the original regulation had specified no clear procedure for challenging the sufficiency of employee protections automatically provided under the exemption. Id. at 636.

On remand, the ICC readopted the class exemption for "out of service" lines, but elaborated on the points found wanting in our prior opinion. Exemption of Out of Service Rail Lines, 2 I.C.C.2d 146 (1986). Unenamored of this result, the Illinois Commerce Commission and Patrick Simmons (Illinois) filed a petition with the ICC requesting a stay of the decision's effective date pending appeal. Expanding the already broad horizons of the proceeding, Rails to Trails Conservancy (RTC), joined by two other nonprofit organizations, ⁴ entered the fray for the first time by petitioning the ICC for reconsideration and a stay of its decision. Ex Parte No. 274 (Sub-No. 8) Exemption of Out of Service Rail Lines, (not printed) decided June 15, 1987. RTC argued, first, that the rulemaking constituted a major federal action triggering the requirements of the National Environmental Policy Act (NEPA), 42 U.S.C. Sec. 4332 (1982), with which the Commission had failed to comply; second, that the exemption requirements failed to assure compliance with a number of applicable environmental statutes, including NEPA and the National Historic Preservation Act (NHPA), 16 U.S.C. Sec. 470f (1982); and, finally, that the ICC failed adequately to consider the effect of the regulations on public use of abandoned lines under the National Trails System Act, 16 U.S.C. Sec. 1247 (1982), and the public use provision of the Interstate Commerce Act, 49 U.S.C. Sec. 10906 (1982). Id. The Commission denied all the petitions, and these petitions for review followed. ⁵

II

A

In our earlier decision, the first area of concern articulated by our colleagues related to the ICC's treatment of the RTP or, more specifically, the agency's examination of the five RTP goals listed above. See 49 U.S.C. Sec. 10505(a)(1). Now, after reviewing the agency's analysis on remand of each of these five factors, we are persuaded that the Commission's conclusion (that application of the abandonment regulations to "out of service" lines is not necessary to carry out the RTP) is neither arbitrary nor capricious; to the contrary, the Commission's analysis is reasonable and adequately supported by the record. Cf. Illinois Commerce Comm'n v. ICC, 819 F.2d 311, 317 (D.C.Cir.1987) (applying "arbitrary and capricious" standard to trackage rights agreements); Brae Corp. v. ICC, 740 F.2d 1023, 1038 (D.C.Cir.1984), cert. denied, 471 U.S. 1069, 105 S.Ct. 2149, 85 L.Ed.2d 505 (1985) ("arbitrary and capricious" review of exemption of boxcar freight rates from regulation).

In our prior consideration of this case, the court faulted the agency's finding that exemption would promote energy conservation, 49 U.S.C. Sec. 10101a(15), as being "utterly lacking in record support." Illinois Commerce Comm'n, 787 F.2d at 629. On remand, the agency modified this particular determination, concluding "upon further reflection ... that energy conservation is unlikely to be affected in any significant way." Out of Service, 2 I.C.C.2d at 148. In arriving at this latter, more modest conclusion, the Commission reasoned as follows: where a line has carried no traffic at all, abandonment will have no effect on energy consumption since there is no traffic to be cut off or diverted to other routes or modes of transportation. Although abandonment of a line that has carried overhead traffic may result in some increase (or decrease) in fuel consumption due to rerouting, any such change, the ICC reasoned, should be insignificant since it is in the carrier's interest to maintain the most efficient routes and to aggregate traffic in order to minimize energy costs. Id.

Illinois attempts to derail this line of reasoning by arguing that even if carriers operate efficiently, they will nonetheless reroute traffic in ways that save costs elsewhere in their operations, but not necessarily in a manner that conserves energy. Brief for Illinois at 13. Illinois further contends that rerouting traffic may involve much more than a minimal increase in fuel consumption. Id. Illinois cites nothing, however, in support of either of these speculative assertions. Nor do petitioners point to anything indicating that application of the abandonment regulations is, as the statute contemplates, necessary to the promotion and encouragement of energy conservation. In contrast to petitioners' creative exercise in the realm of the hypothetical, the ICC's analysis logically and persuasively explains why the agency believes the effect on energy matters will be de minimis; ⁶ in the...