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

Citation879 F.2d 917
Decision Date12 October 1989
Docket NumberNo. 87-1088,87-1088
Parties, 58 USLW 2079 ILLINOIS COMMERCE COMMISSION, et al., Petitioners, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents, Chicago and North Western Transportation Co., Illinois Department of Transportation, National Association of Regulatory Utility Commissioners, Association of American Railroads, Intervenors.
CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)

Gordon P. MacDougall, Washington, D.C., and James E. Weging, Illinois Special Asst. Atty. Gen., Chicago, Ill., with whom Walter J. Binder, Jr., Cary, Ill., was on the brief for petitioners.

Evelyn G. Kitay, Atty., I.C.C., with whom Robert S. Burk, Gen. Counsel, and Ellen D. Hanson, Associate Gen. Counsel, I.C.C., Washinton, D.C., were on the brief for respondent I.C.C.

James E. Weging, Chicago, Ill., entered an appearance for intervenor Illinois Department of Transportation.

Catherine G. O'Sullivan and Andrea Limmer, Attys., Dept. of Justice, Washington, D.C., entered appearances for respondent United States of America.

L. John Osborn, with whom Myles L. Tobin, Chicago, Ill., and Fritz R. Kahn, Washington, D.C., were on the brief for intervenor Chicago and North Western Transp. Co.

Paul Rodgers and Charles D. Gray, Washington, D.C., were on the brief for intervenor National Association of Regulatory Utility Commissioners.

J. Thomas Tidd and John B. Norton were on the brief for intervenor Association of American Railroads.

William J. Dwyer was on the brief for amicus curiae New York State Dept. of Transp., urging reversal.

Timothy R. Baker was on the brief for amicus curiae Montana Department of Public Service Regulation, Public Service Commission, urging reversal.

Merrell M. Peters, Asst. Atty. Gen., State of Iowa, was on the brief for amicus curiae State of Iowa, urging reversal.

Daniel D. Stier, Madison, Wis., entered an appearance for amicus curiae Wisconsin Office of Commissioner of Transportation.

Before ROBINSON, RUTH B. GINSBURG and SENTELLE, Circuit Judges.

Opinion for the Court filed by Circuit Judge SPOTTSWOOD W. ROBINSON, III.

SPOTTSWOOD W. ROBINSON, III, Circuit Judge:

The Interstate Commerce Act confers upon the Interstate Commerce Commission power to regulate abandonments of railroad lines, 1 but excepts from this grant abandonments of spur tracks located entirely within a single state. 2 At issue here is a Commission decision and order holding that the Act preempts all authority of a state agency over abandonment of spur tracks lying wholly within the state's borders. 3 We reverse.

I. BACKGROUND

Chicago and North Western Transportation Company (C & NW), an interstate rail carrier, decided to abandon a 570-foot strip of track located in the Village of Cary, McHenry County, Illinois. C & NW petitioned the Commission for an exemption from compliance with the Act's provisions governing abandonments of railroad lines. 4 After public notice 5 and comment, 6 the Commission ruled that the trackage was a line of railroad rather than a spur because it was "used as part of the actual transportation movement to and from [the shipper]," and on that account was subject to the agency's jurisdiction. 7 The Commission granted the requested exemption, 8 and denied applications for reconsideration and a stay. 9

The Illinois Commerce Commission and others petitioned the United States Court of Appeals for the Seventh Circuit for review of the Commission's decision to grant the exemption, 10 and there they succeeded in overturning it. 11 While acknowledging that the Commission's conclusion as to whether trackage is spur or line of railroad is entitled to "the greatest deference" because of the agency's expertise, 12 the court declared that the matter was "a 'mixed question of law and fact to be determined judicially rather than administratively.' " 13 After reviewing the record in light of applicable judicial precedents, the court vacated the Commission's finding that the trackage was a line of railroad on the ground that it was "insufficiently supported by reasoned analysis." 14 The court observed that

[e]ven accepting the ICC's contention that the use of the track controls, however, we have not been persuaded that the Cary Spur is used as a line of railroad. This case is readily distinguishable from cases finding track to be a line of railroad. 15

Remanding the case for reconsideration, the court noted that the Commission had not addressed "the division of responsibility between the Illinois Commerce Commission and the ICC" in its analysis of whether the trackage was a line of railroad or a spur. 16

On remand, the Commission reversed its original stance and held unanimously the trackage was a spur and thus was not subject to its abandonment jurisdiction. 17 It further held, however, with two commis sioners dissenting, that abandonment of the Cary spur was also outside the domain of state regulatory authority. 18 The Commission took the large body of Supreme Court precedent 19 as assuming, "apparently without argument on the point," residual state jurisdiction over spur abandonments; 20 as allowing state authority to be preempted when there was an "overriding Federal interest in protecting interstate commerce from State-imposed burdens;" 21 and as producing "curious results." 22 Then, combining the Act's definition of "railroad"--which includes "spur track 'used or necessary for transportation' " 23--with the Act's "broad preemption of all economic regulation of trackage used for the conduct of interstate commerce," the Commission concluded that intrastate spurs fall within its general jurisdiction and outside only its abandonment authority, 24 and that state power to regulate local spurs over which traffic moves in interstate commerce was preempted. 25 The Commission felt that the legislative history of the Act supported this interpretation, 26 and that the Staggers Rail Act of 1980 27 removed any lingering doubt on that score. 28 The Commission reasoned that the Illinois Commerce Commission derives its power to regulate intrastate rail transportation from the Interstate Commerce Act and that the Staggers Rail Act directs state commissions to apply federal standards, with the result that the state agency does not have authority to regulate spur abandonments when the Commission lacks jurisdiction to do so. 29

Petitioners now seek review in this court. The parties accept the Commission's ruling that the trackage in question is a spur. We turn, then, to the parts of the Commission's decision in which the authority of petitioner Illinois Commerce Commission to regulate the abandonment of the spur was held to have been preempted.

II. THE STANDARD OF REVIEW

The Commission argues here that "the statute is silent or ambiguous with respect to this issue," that "the Commission's interpretation is reasonable," and accordingly that "the Commission's interpretation should be upheld." 30

Ordinarily, a court reviewing an agency's construction of a statute which it administers must first ascertain "whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter...." 31 If, however, the statute is silent or ambiguous on the particular issue, the court must then determine whether the agency's interpretation is a permissible construction of the statute. 32 The agency's construction must be accepted 33 when it is reasonable, 34 but not if it is contrary to clear congressional intent. 35

There is in this case, however, another important consideration, arising from the Commission's invocation of two separate statutory provisions as independent bases for its holding that state authority was preempted. The Commission's position is that preemption was wrought, not by action of the agency within the scope of its delegated authority, but by force of the federal statutory provisions themselves. 36 In situations of the latter type "[w]here ... the field which Congress is said to have pre-empted has been traditionally occupied by the States, ... 'we start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.' " 37 "The critical question in any preemption analysis," then, "is always whether Congress intended that federal regulations supersede state law." 38 Accordingly, "federal regulation of a field of commerce should not be deemed preemptive of state regulatory power in the absence of persuasive reasons--either that the nature of the regulated subject matter permits no other conclusion, or that the Congress has unmistakably so ordained." 39

We have recognized that the necessity and propriety of Chevron deference in contests over preemption remain open questions, 40 and we have no occasion to resolve them here. For on each of the two statutory provisions upon which the Commission relies, we find that it fails to meet either set of standards.

III. THE EXCEPTION OF SPUR TRACKS

At the outset, we note that the "Interstate Commerce Act is among the most pervasive and comprehensive of federal regulatory schemes." 41 Yet, while the Commission's authority to regulate abandonments of lines of railroad is exclusive 42 and plenary, 43 the Act, in Section 10907(b)(1), explicitly excludes therefrom "spur, industrial, team, switching, or side tracks if the tracks are located ... entirely in one State." 44

This language plainly excepts abandonments of intrastate railroad spurs from Commission regulation. It does not, however, expressly answer the question whether a state agency has authority to regulate them; it simply provides that the Commission may not. Nonetheless, we think state power to do so follows as inevitably as night follows day. Absent federal control of railroading, the states, as...

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