Railroad Ventures, Inc. v. Surface Transp. Bd.

• Decision Date: 01 August 2002
• Docket Number: No. 00-4346.,No. 01-3090.,No. 00-4303.,No. 00-4435.,No. 00-3261.,No. 00-4345.,No. 01-3091.,No. 00-3317.,No. 00-3275.,00-3261.,00-3275.,00-3317.,00-4303.,00-4345.,00-4346.,00-4435.,01-3090.,01-3091.
• Parties: RAILROAD VENTURES, INC. Boardman Township, Ohio and Boardman Township Park District, Petitioners, v. SURFACE TRANSPORTATION BOARD and United States of America, Respondents, Columbiana County Port Authority and Central Columbiana & Pennsylvania Railway, Inc., Intervenors.
• Court: U.S. Court of Appeals — Sixth Circuit

299 F.3d 523

RAILROAD VENTURES, INC. Boardman Township, Ohio and Boardman Township Park District, Petitioners, v. SURFACE TRANSPORTATION BOARD and United States of America, Respondents Columbiana County Port Authority and Central Columbiana & Pennsylvania Railway, Inc., Intervenors.

No. 00-3261.

No. 00-3275.

No. 00-3317.

No. 00-4303.

No. 00-4345.

No. 00-4346.

No. 00-4435.

No. 01-3090.

No. 01-3091.

United States Court of Appeals, Sixth Circuit.

Argued: January 30, 2002.

Decided and Filed: August 1, 2002.

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R. Joseph Parker (argued and briefed), John B. Nalbandian (briefed), Taft, Stettinius & Hollister, Cincinnati, OH, Richard R. Wilson (briefed), Altoona, PA, for Petitioners in Nos. 00-3261, 00-3317, 00-4303, 00-4435, 01-3090 and 01-3091.

Christopher C. Russell (argued and briefed), Porter, Wright, Morris & Arthur, Columbus, OH, for Petitioners in Nos. 00-3275, 00-4345 and 00-4346.

Cecelia H. Cannizzaro (argued and briefed), Surface Transportation Board, Washington, DC, Robert B. Nicholson (briefed), John P. Fonte (briefed), U.S. Department of Justice, Antitrust Division, Washington, DC, for Respondents in Nos. 00-3261, 00-3275, 00-3317, 00-4303, 00-4345, 00-4346, 01-3090 and 01-3091.

Evelyn G. Kitay, Cecelia H. Cannizzaro (argued and briefed), Surface Transportation Board, Washington, DC, Henry Rush, Office of the General Counsel, Surface Transportation Board, Washington, DC, Robert B. Nicholson (briefed), John P. Fonte (briefed), U.S. Department of Justice, Antitrust Division, Washington, DC, for Respondent in No. 00-4435.

Keith G. O'Brien (briefed), Rea, Cross & Auchincloss, Washington, DC, Richard H. Streeter (briefed), Barnes & Thornburg, Washington, DC, for Intervenors in Nos. 00-3261, 00-3275, 00-3317, 00-4303, 00-4345, 00-4346, 00-4435, 01-3090 and 01-3091.

Before: GUY and CLAY, Circuit Judges; NUGENT, District Judge.^*

OPINION

CLAY, Circuit Judge.

Petitioners, Railroad Ventures, Inc. ("RVI"), Boardman Township ("Boardman Township"), and Boardman Township Park District ("the Park District") seek review of several orders issued throughout the year 2000 by Respondent Surface Transportation Board ("the STB") during the course of a sale by RVI to Intervenor Columbiana County Port Authority ("CCPA") of a 35.7-mile rail line ("the rail line") extending from milepost 0.0 at Youngstown, Ohio to milepost 35.7 at Darlington, Pennsylvania, with a connecting one-mile segment near Negley, Ohio, pursuant to 49 U.S.C. § 10904. CCPA is a quasi-public agency established by the Board of County Commissioners of Columbiana County, Ohio. The other intervenor, Central Columbiana & Pennsylvania Railway, Inc., ("CCPR"), a wholly owned subsidiary of the Arkansas Short Line Railroads, Inc., has a lease to operate the rail line. The sale occurred after RVI, which acquired the rail line from Youngstown & Southern Railroad on November 8, 1996, submitted an application to the STB for exemption from certain regulations, pursuant to 49 U.S.C. § 10502, and for authority to abandon the rail line pursuant to 49 U.S.C. § 10903(a). For the reasons set forth below, we AFFIRM the STB's orders.

I. BACKGROUND

A. Statutory and Regulatory Framework

Congress has regulated the abandonment of railroad lines since the second decade of the last century when it entrusted the Interstate Commerce Commission ("the ICC") with jurisdiction over such abandonments pursuant to the Transportation Act of 1920, 41 Stat. 477-78.¹ To expedite the abandonment process, Congress modified the Interstate Commerce Act with the enactment of the Railroad Revitalization and Regulatory Reform Act of 1976 (4-R Act), Pub.L. No. 94-210, 90 Stat. 31 (1976), which added a provision, 49 U.S.C. § 10905 (now 49 U.S.C. § 10904), that suspended abandonment of a line for up to six months to allow time for a prospective purchaser to consummate the acquisition of a rail line from an abandoning carrier.² See Hayfield N. R.R. v. Chicago & N.W. Transp. Co., 467 U.S. 622, 628, 104 S.Ct. 2610, 81 L.Ed.2d 527 (1984). The Interstate Commerce Act was further amended by the passage of the Staggers Rail Act of 1980, Pub.L. No. 96-448, 94 Stat. 1895 (1980), which added a forced-sale provision to the former 49 U.S.C. § 10905, allowing the ICC to set the price and other terms of sale when a party to the sale requested it. Id. at 630, 104 S.Ct. 2610 ("The underlying rationale of § 10905 represents a continuation of Congress' efforts to accommodate the conflicting interests of railroads that desire to unburden themselves quickly of unprofitable lines and shippers that are dependent upon continued rail service."); GS Roofing Prods. Co. v. STB, 262 F.3d 767, 771 (8th Cir. 2001) ("GS Roofing II") ("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."); Consol. Rail Corp. v. ICC, 29 F.3d 706, 712 (D.C.Cir. 1994) (noting that the purpose of the forced-sale provision is "not simply the maintenance of rail lines, but the continuation of rail service") (emphasis in original).³

After the ICC ceased to exist, effective January 1, 1996, pursuant to the Interstate Commerce Commission Termination Act of 1995, 49 U.S.C. §§ 10101-16106 (1997) ("the ICCTA"), authority over the abandonment of railroad lines passed to the Surface Transportation Board ("the STB"). See 49 U.S.C. § 10903; GS Roofing II, 262 F.3d at 773; MidAmerican Energy Co. v. STB, 169 F.3d 1099, 1104 n. 8 (8th Cir.1999); RLTD Ry. Corp. v. STB, 166 F.3d 808, 810 (6th Cir.1999); Consol. Rail Corp. v. STB, 93 F.3d 793, 794 (D.C.Cir.1996) (noting that "many functions of the ICC, including authority over abandonment proceedings were transferred to the STB in the Department of Transportation"). The STB is now the federal agency with exclusive jurisdiction over transportation by railroad. Friends of the Atglen-Susquehanna Trail, Inc. v. STB, 252 F.3d 246, 250 n. 1 (3d Cir.2001) (citing 49 U.S.C. § 10501(a)(1)). Thus, if a railroad line falls within its jurisdiction, the STB's authority over abandonment is both exclusive and plenary. See Preseault v. ICC, 494 U.S. 1, 8, 110 S.Ct. 914, 108 L.Ed.2d 1 (1990) (citing Chicago & North Western Transp. Co. v. Kalo Brick & Tile Co., 450 U.S. 311, 321, 101 S.Ct. 1124, 67 L.Ed.2d 258 (1981); RLTD Ry. Corp., 166 F.3d at 808).

In addition, most of the provisions of the former Interstate Commerce Act were reenacted in the ICCTA. MidAmerican, 169 F.3d at 1104 n. 8. Specifically, the ICCTA recodified the former § 10905 as § 10904, amending the statute to limit the period in which the STB set the terms and conditions of the forced sale to thirty days and the duration of any subsidy for continued rail service. See Nat'l Ass'n of Reversionary Prop. Owners v. STB, 158 F.3d 135, 140 (D.C.Cir.1998) (noting that "[t]he ICCTA made some changes to the abandonment application process, such as eliminating the processing timetable and requiring that offers of financial assistance [OFA] be filed within four months of an abandonment application, see 49 U.S.C. § 10904(c)").

A rail carrier providing transportation subject to the jurisdiction of the STB may abandon its railroad line or discontinue the operation of all rail transportation over its railroad line only as authorized under the statute. 49 U.S.C. § 10903(a)(1).⁴ To abandon a railroad line or discontinue operation of rail service on a rail line, a rail carrier must file an application with the STB seeking prior approval or an exemption. 49 U.S.C. § § 10502(a), 10903(a)(1)(A); 49 C.F.R. §§ 1152.50, 1152.60; see Friends of the Atglen-Susquehanna Trail, 252 F.3d at 251 ("A rail carrier intending to abandon, and to be released from its obligations to retain or operate, any part of its railroad lines must file an application to do so with the STB and such abandonment must adhere to certain established procedures."). A line owner may "abandon any part of its railroad lines," 49 U.S.C. § 10903(d)(1), but cannot do so without the permission of the STB. 49 U.S.C. § 10903(a)(1)(A); see Kulmer and Schumacher v. STB, 236 F.3d 1255, 1256 (10th Cir.2001) ("Rail carriers must obtain STB authorization to abandon rail service over their lines."); GS Roofing Prods. Co. v. STB, 143 F.3d 387, 391 (8th Cir.1998) ("GS Roofing I"); Ethan Allen. Inc. v. Maine Cent. R.R. Co., 431 F.Supp. 740, 742-43 (D.Vt.1977) (noting that "the quasi-public nature of railroads entails a higher degree of public responsibility than is required of most private companies"). A rail line owner is generally obligated to maintain a diagram of the rail system it operates, and if the owner wishes to abandon, it must "identify each railroad line for which the rail carrier plans to file an application to abandon." 49 U.S.C. § 10903(c)(2)(B). 49 C.F.R. § 1152.22(a)(4) further specifies that the information comprising the abandonment application include:

[a d]etailed map of the subject line on a sheet not larger than 8×10½ inches, drawn to scale, and with the scale shown thereon. The map must show, in clear relief, the exact location of the rail line to be abandoned or over which service is to be discontinued and its relation to other rail lines in the area, highways, water routes, and population centers.

49 C.F.R. § 1152.22(a)(4).

The STB authorizes line abandonments in two ways. Redmond-Issaquah Ry. Pres. Ass'n v. STB, 223 F.3d 1057, 1059 n. 2 (9th Cir.2000). First, the STB may permit the abandonment of a railroad line by a rail carrier or the discontinuance of rail service if it finds that present or future public convenience and necessity supports such abandonment or discontinuance. 49 U.S.C. § 10903(d)(2). To implement this standard, the STB balances the potential harm to affected shippers and communities against the present and future burden that...