Vill. of Barrington v. Surface Transp. Bd.
| Citation | 636 F.3d 650 |
| Decision Date | 15 March 2011 |
| Docket Number | 09–1073.,Nos. 09–1002,09–1028,09–1049,09–1048,s. 09–1002 |
| Parties | VILLAGE OF BARRINGTON, ILLINOIS, Petitionerv.SURFACE TRANSPORTATION BOARD and United States of America, Respondents.Canadian National Railway Company, et al., Intervenors. |
| Court | United States Courts of Appeals. United States Court of Appeals (District of Columbia) |
OPINION TEXT STARTS HERE
On Petitions for Review of an Order of the Surface Transportation Board.Kevin M. Sheys argued the cause for Community Petitioners. With him on the briefs were Barry M. Hartman, Edward R. Gower, Joel D. Bertocchi, and Richard H. Streeter.Paul A. Cunningham argued the cause for petitioners Canadian National Railway Company and Grand Trunk Corporation. With him on the briefs were David A. Hirsh and Theodore K. Kalick.Evelyn G. Kitay, Associate General Counsel, Surface Transportation Board, argued the cause for respondents. With her on the brief were Mary Gabrielle Sprague, Robert B. Nicholson, and John P. Fonte, Attorneys, U.S. Department of Justice, Craig M. Keats, Acting General Counsel, Surface Transportation Board, and Jeffrey D. Komarow, Theodore L. Hunt, and J. Frederick Miller, Jr., Attorneys, Surface Transportation Board. John C. Cruden, Assistant Attorney General, U.S. Department of Justice, entered an appearance.Kevin M. Sheys, Barry M. Hartman, and Richard H. Streeter were on the joint brief of Community intervenors.Paul A. Cunningham, David A. Hirsh and Theodore K. Kalick were on the brief for intervenors Canadian National Railway Company and Grand Trunk Corporation in support of respondents.Before: HENDERSON, TATEL, and GRIFFITH, Circuit Judges.Opinion for the court filed by Circuit Judge TATEL.TATEL, Circuit Judge:
This case presents a difficult question of statutory interpretation: in enacting the Staggers Rail Act of 1980, did Congress deprive the Surface Transportation Board of its authority to impose environmental conditions when approving so-called minor mergers? For the reasons set forth in this opinion, we conclude that it did not and that the Board therefore retains its environmental conditioning authority. We also conclude that in approving the merger at issue in this case, the Board complied with the National Environmental Policy Act and that the environmental conditions it imposed are neither arbitrary nor capricious.
Player with Railroads and the Nation's Freight Handler;
Stormy, husky, brawling,
City of the Big Shoulders.
Today, almost a century after Carl Sandburg's paean to America's Second City, Chicago remains “the Nation's Freight Handler.” Chicago is the only city where all seven of America's Class I railroads—railroads with annual operating revenues of $250 million or more—operate. Canadian Nat'l Ry. Co.—Control—EJ & E W. Co., STB Finance Docket No. 35087, Final Environmental Impact Statement, at 1–3 (Dec. 5, 2008) (“ FEIS ”). Each day, 600 freight trains carrying approximately 2.5 million tons of freight pass through Chicago. Id. at 1–4. Converging in the Chicago Terminal District—a 2,800 mile rail network containing 70 train yards and terminals—these freight trains compete for track and yard space with each other and with over 750 commuter trains and 78 Amtrak trains per day, which together serve over 84 million passengers a year. Id. The resulting congestion slows freight traffic to a crawl. By one estimate, “[m]oving freight across the Chicago region by rail ... typically takes two days or more, with train speeds averaging between 6.8 and 12 m.p.h.” Business Leaders for Transportation, Critical Cargo: A Regional Freight Action Agenda 1 (Apr. 2002). Because “[o]ne-third of all rail freight in the United States currently moves to, from, or through Chicago,” FEIS at 1–4, the city's congestion affects the entire nation.
Petitioner Canadian National, a Class I railroad, operates over twenty thousand miles of track in North America, connecting the Gulf Coast to its transcontinental rail network in Canada. Id. at 1–6. Canadian National's Chicago rail system consists of five rail lines that converge on the city like the spokes of a wheel from the north, west, southwest, south, and southeast. Because Canadian National's lines meet in the heart of the Chicago Terminal District, even those trains that merely pass through the city—about two-thirds of the company's Chicago trains—must contend with the city's congestion. Canadian National estimates that its freight trains may take as long as 24 hours to move the thirty miles through the metropolitan area. Id. at 1–4.
Looping around Chicago, the 120–mile Elgin, Joliet, & Eastern main line, once known as the “J” line and referred to throughout these proceedings as the EJ & E line, starts near the Lake Michigan waterfront, north of Chicago in Waukegan, Illinois, arcs south and west through the city's suburbs including Lake Bluff, Barrington, and Aurora, to Joliet, Illinois, travels east to Gary, Indiana, and finally turns northwest and travels along Lake Michigan towards Chicago. Along the way, the EJ & E cuts across all five Canadian National rail lines. This rail beltway has encircled Chicago since the late nineteenth century when J.P. Morgan assembled it to “avoid the Chicago bottleneck.” David M. Young, The Iron Horse and the Windy City 115 (2005). Although daily traffic along the EJ & E line peaked during World War II at as many as fifty trains, the line has generally averaged between ten and twenty trains, dropping by the mid–2000s to between three and eighteen trains per day. Canadian Nat'l Ry. Co.—Control—EJ & E W. Co., STB Finance Docket No. 35087, Decision No. 16, at 5, 2008 WL 8139694 (Dec. 24, 2008) (“ Approval ”); FEIS app. A, at 391, 394.
Canadian National, anticipating that owning the EJ & E line would enable it to avoid Chicago's congestion, agreed to acquire the EJ & E Railway Company (a non-Class I railroad) for $300 million on September 25, 2007. Using the EJ & E line and its three rail yards, Canadian National planned to re-route freight trains from its five Chicago lines around the congestion that ensnarls the city's Terminal District. The effect on the EJ & E line and on Canadian National's five existing lines is expected to be significant. While freight traffic will likely decline along Canadian National's existing tracks within the beltway, daily traffic on the EJ & E line will rise to between twenty and forty-two trains, some almost as long as two miles.
Before Canadian National could complete its acquisition of the EJ & E Railway Company, it was required to obtain the Surface Transportation Board's approval, which it sought on October 30, 2007. See 49 U.S.C. § 11323. Because the acquisition involved only one Class I railroad, the Board classified the transaction as a “minor” merger, meaning that it needed to approve the transaction within 180 days unless it found that the merger was likely to cause substantial anticompetitive effects. See 49 U.S.C. §§ 11324(d), 11325(a), (d). Finding that the substantial increase in freight traffic along the EJ & E line resulting from this transaction would “significantly affect[ ] the quality of the human environment,” 42 U.S.C. § 4332(2)(C), the Board also directed its Section of Environmental Analysis (SEA) to prepare an environmental impact statement. The Board explained that it would use the environmental impact statement to decide whether to impose “environmental mitigation conditions” if and when it approved the transaction. Canadian Nat'l Ry. Co.—Control—EJ & E W. Co., STB Finance Docket No. 35087, Decision No. 2, at 15 (Nov. 26, 2007).
In the course of preparing the final environmental impact statement, SEA engaged in extensive public outreach, which included publishing notices in the Federal Register and ads in local newspapers, holding twenty-two public meetings attended by over 7200 people, consulting with local, state, and federal agencies and officials, publishing for comment a 3500 page draft environmental impact statement, holding a sixty day comment period on that draft, and receiving nearly 13,500 comments. Commenters raised concerns about the effect of Canadian National's acquisition on traffic congestion, rail crossing safety, emergency response times, hazardous material spills, and wildlife, among other issues.
Given that nearly 340,000 people live in close proximity to the EJ & E line and that 73% of road crossings lack bridges over the tracks, SEA considered how increased freight traffic on the EJ & E line would worsen vehicle congestion and increase the risk of collisions between trains and vehicles. SEA winnowed the list of 112 railroad crossings along the EJ & E line down to the 13 most “substantially affected” crossings. For four of those crossings, SEA recommended traffic advisory signals. But for the two “substantially affected” crossings for which traffic delays and the threat of collision were particularly serious, SEA recommended “grade separation”—i.e., a bridge over the tracks.
After SEA completed the final environmental impact statement, the Surface Transportation Board approved Canadian National's acquisition of the EJ & E Railway Company on December 24, 2008—approximately four hundred days after Canadian National first sought approval. See Approval. The Board concluded “that the proposed control transaction is unlikely to cause a substantial lessening of competition or to create a monopoly or restraint of trade,” id. at 13, and that “even if there were some modest anticompetitive effect, it would be outweighed by the public interest in meeting significant transportation needs,” id. at 15.
The Board also responded to comments made during the preparation of the environmental impact statement. Chief among them was a memorandum Canadian National submitted on September 30, 2008, the last day of the comment period, which challenged the Board's statutory authority to impose environmental conditions on “minor” tr...
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