Simmons v. I.C.C., s. 88-3211
| Decision Date | 02 August 1990 |
| Docket Number | Nos. 88-3211,89-1961,s. 88-3211 |
| Citation | 900 F.2d 1023 |
| Parties | Patrick W. SIMMONS, McLay Grain Company and Edenfruit Products Company, Petitioners, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents, and Chicago and North Western Transportation Company, Intervenor-Respondent. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Gordon P. MacDougall, Washington, D.C., John J. Naughton, Henslee, Monek & Henslee, Stuart F. Gassner, Myles L. Tobin, Chicago Northwestern Ry. Co., Law Dept., Chicago, Ill., for petitioners.
Anton R. Valukas, U.S. Atty., Thomas F. McFarland, Jr., Belnap, Spencer, McFarland, Emrich & Herman, Robert S. Burke, I.C.C., Washington, D.C., William Redmond, I.C.C., Chicago, Ill., Virginia Strasser, I.C.C., Edwin Meese, U.S. Atty. Gen., Dept. of Justice, Civ. Div., Appellate Section, Washington, D.C., Catherine G. O'Sullivan, David Seidman, Dept. of Justice, Antitrust Div., Appellate Section, Washington, D.C., for respondents.
Before CUMMINGS, FLAUM, and MANION, Circuit Judges.
Petitioners Patrick W. Simmons, McLay Grain Company, and Edenfruit Products Company, have asked this court to review the action of the Interstate Commerce Commission (ICC), which declined to revoke the "out-of-service" class exemption for the abandonment of Chicago and North Western Transportation Company's (C & NW's) Chemung-Poplar Grove line. For reasons which follow, the petitions are dismissed for lack of standing.
For a number of years, C & NW has sought to abandon its Illinois line between Harvard and South Beloit, a distance of 23.4 miles. C & NW filed its first abandonment application on March 31, 1981, contingent upon C & NW acquiring track rights over a line owned by Chicago, Milwaukee, St. Paul and Pacific Railroad Company (MILW) between Clinton Junction and Beloit, Wisconsin. A number of shippers filed protests. C & NW withdrew its application when MILW indicated it would abandon the Clinton Junction-Beloit line. A train derailed east of Poplar Grove in November 1986. The resulting damage has never been repaired. C & NW next filed for abandonment of the Harvard-South Beloit line on April 21, 1987, again encountering substantial opposition. C & NW again withdrew its application. In permitting C & NW to withdraw its abandonment request for the second time, the ICC stated that in the future C & NW would be required to comply with the System Diagram Map provisions, and file a notice of intent and updated evidence in any new abandonment application.
Rather than file a new application for abandonment of the Harvard-South Beloit line, C & NW instituted a series of transactions. These efforts were (1) the transfer of the eastern 3.5-mile Harvard-Chemung segment for operation by Chicago-Chemung Railroad Corporation (CCRC); (2) use of the out-of-service class abandonment exemption to secure automatic abandonment of the adjoining middle 6.5-mile Chemung-Poplar Grove segment; and (3) announcement of a forthcoming application to abandon the remaining western 13.4-mile Poplar Grove-South Beloit segment. On March 14, 1988, the ICC denied Patrick Simmons' petition to revoke CCRC's use of the class exemption for non-carrier acquisition of rail lines with respect to the eastern Harvard-Chemung segment. On September 12, the ICC denied Simmons' motion to reopen its decision not to revoke. Simmons subsequently filed a petition for review in this court. As to the 6.5-mile Chemung-Poplar Grove segment, C & NW invoked the abandonment class exemption for out-of-service lines. This class exemption was available not on the basis of the derailment, but instead because all traffic over the 6.5-mile segment within two years was overhead bridge business. No local business (business from shippers and receivers actually located on the segment) operated on the 6.5-mile segment. The exemption requires only that (1) no local traffic has moved for at least two years; (2) any overhead traffic can be rerouted over other lines; and (3) no user of rail service on the segment has complained. 49 C.F.R. Sec. 1152.50 (1989 ed.).
C & NW's notice of exemption asserted that no local traffic was handled on the 6.5-mile segment during the past two years, all overhead traffic was moving over an alternate route over the past one and one-half years, and no formal complaints regarding cessation of local service had been filed. The ICC gave public notice of C & NW's exercise of the exemption, stating petitions for stay and for reconsideration could be filed. McLay Grain Company, Edenfruit Products Company, and Patrick W. Simmons 1 filed a joint petition for stay of the abandonment exemption. McLay Grain Company, situated at Poplar Grove, formerly shipped about 600 cars per year, but has not shipped any traffic by rail since the 1970s. McLay claims it would suffer competitive injury if Seegers Grain Company at Chemung should acquire and McLay should lose rail service. Edenfruit Products Company has a private rail side track and unloading facilities at Poplar Grove. It shipped 15 carloads in 1978, 25 carloads in 1979, but only one carload in the past four years. Since the November 1986 derailment, C & NW has rerouted eastbound Poplar Grove traffic to South Beloit and from there over another route through Beloit, Wisconsin to Harvard, Illinois, adding approximately 32 miles to its Poplar Grove to Chicago operations. Neither Edenfruit nor McLay is situated on the 6.5-mile segment; the two are located a short distance to the west.
The petitioners claim that the abandonment of the Chemung-Poplar Grove segment would prejudice the ultimate disposition of the ongoing Harvard-Chemung proceeding. They also claim the stated use of the abandonment class exemption for the Chemung-Poplar Grove segment constituted an abuse of the class exemption because of its relationship with other C & NW claims for line disposition.
On November 3, 1988, the petitioners filed a petition to revoke and/or for reconsideration of the Chemung-Poplar Grove abandonment class exemption. The ICC denied the stay request by a 3-1 vote. The ICC majority stated that the use of the class exemption is fully consistent with the rail transportation policy so as to allow C & NW to abandon the least profitable segment, such as the one which has been out of service, and that at this point it is speculative whether C & NW will file an application to abandon the Poplar Grove-South Beloit segment or whether abandonment would be authorized. Moreover, if the Poplar Grove-South Beloit abandonment is filed and if it has environmental implications which carry over to the area between Chemung and Poplar Grove, those implications can be addressed at that time. The ICC majority stated it was unclear how petitioners would be prejudiced by the class exemption in the Harvard-Chemung case or a forthcoming South Beloit-Poplar Grove case. The ICC majority also reasoned that the public interest arguments had already been balanced in the class exemption itself.
On May 8, 1989, the ICC denied the petition for revocation and/or reconsideration by a 3-2 vote. The ICC majority concluded that even if C & NW retained the Harvard-Chemung line, it would have no incentive to repair the derailment in order to continue the Chemung-Poplar Grove operation. The ICC's decision faulted petitioners for not showing how segmented handling of the Harvard-South Beloit line could subject shippers to market abuse since truck service is available and McLay Grain Company has not used C & NW since the 1970s. The ICC found that the Poplar Grove complaints filed in the 1987 C & NW abandonment case did not constitute a formal complaint within the out-of-service regulations during the prior two-year period because the complaints were against abandonment of the entire Harvard-South Beloit line.
Finally, the ICC addressed the environmental issue. The ICC stated that it may approve a single application without first completing a comprehensive impact statement on all environmentally interrelated regionwide proposals. The ICC defended limiting its environmental review solely to the Chemung-Poplar Grove segment rather than to the Chemung-South Beloit line because Chemung and Poplar Grove are logical termini, the segment is substantially independent in terms of its utility, and allowing the segment's abandonment does not foreclose the opportunity to consider an alternative treatment of subsequently proposed segment abandonments.
Patrick Simmons, McLay Grain Company, and Edenfruit Products Company now file a petition for review with this court. The petitioners urge that we overturn the ICC's orders on a number of grounds: the class exemption as applied in a particular situation is subject...
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