W. Coal Traffic League v. Surface Transp. Bd. & USA.

Decision Date14 July 2000
Docket Number00-1118,00-1120,Nos. 00-1115,s. 00-1115
Citation216 F.3d 1168
Parties(D.C. Cir. 2000) Western Coal Traffic League, et al.,Petitioners v. Surface Transportation Board and United States of America, Respondents Norfolk Southern Corporation, et al., Intervenors
CourtU.S. Court of Appeals — District of Columbia Circuit

On Petitions for Review of an Order of theSurface Transportation Board

Roy T. Englert, Jr. argued the cause for petitioners. With him on the briefs were Erika Z. Jones, David I. Bloom, Adam C. Sloane, William L. Slover, C. Michael Loftus, Robert D. Rosenberg, Paul A. Cunningham, David A. Bono, Richard B. Herzog, Gerald P. Norton, Richard E. Weicher, Robert B. Fiske, Jr. and Guy Miller Struve.

Robert P. vom Eigen, Roderick B. Williams, Frederic L. Wood, Nicholas J. DiMichael, Harold A. Ross and Daniel R. Barney were on the joint brief of intervenors Gaylord Container Corporation, et al., and amici curiae The Fertilizer Institute, et al., in support of petitioners. Thomas J. Litwiler and Peter S. Glaser entered appearances.

Craig M. Keats, Associate General Counsel, Surface Transportation Board, argued the cause for respondents. With him on the brief was Ellen D. Hanson, General Counsel.

George A. Aspatore, G. Paul Moates, Vincent F. Prada, Paul A. Hemmersbaugh, Peter J. Shudtz, Dennis G. Lyons, Terence M. Hynes, James V. Dolan, Louise A. Rinn, J. Michael Hemmer, David L. Meyer, William A. Mullins, Clinton J. Miller III, Daniel R. Elliott, III, Gregory B. Robertson, Daniel A. LaKemper and John D. Sharer were on the joint brief of intervenors Norfolk Southern Corporation, et al., and amici curiae James River Coal Company, et al., in support of respondent. Louis E. Gitomer, Donald H. Smith and William A. Mullins entered appearances.

Before: Williams, Ginsburg and Sentelle, Circuit Judges.

Opinion for the Court filed by Circuit Judge Ginsburg.

Dissenting opinion filed by Circuit Judge Sentelle.

Ginsburg, Circuit Judge:

The Western Coal Traffic League, the Canadian National Railway Company (CN), the Burlington Northern Santa Fe Corporation, and the Burlington Northern and Santa Fe Railway Company (BNSF) (collectively, BNSF) petition for review of a decision by the Surface Transportation Board to place a 15-month "moratorium" upon the filing of railroad merger applications. The Board initiated the moratorium after BNSF and CN had notified the Board that they planned to submit a merger application. BNSF argues that the Board lacks the authority to impose a moratorium upon the filing of merger applications; by declaring the moratorium the Board violated its statutory duty to consider and to rule upon merger applications within a prescribed period of time; and that the Board's decision was arbitrary and capricious. We conclude the Board neither violated the statute nor otherwise exceeded its authority by imposing the moratorium and deny the petition for review.

I. Background

The railroad industry has undergone a considerable consolidation in recent years, with the result that there remain only four large railroads in the United States and two in Canada.According to the Board, the most recent of these consolidations have led to severe disruptions in service. After BNSF and CN announced in December 1999 their proposal to merge as soon as the Board approved, the Board expressed concern that the merger could further exacerbate service problems;the Board also determined that the merger could well be the first in a final round of mergers that would leave only two major lines serving all of North America.

After BNSF and CN formally notified the Board on December 20, 1999 that they would file a merger application in three to six months, see 49 C.F.R. 1180.4(b), the Board issued a Notice of Public Hearing and Request for Comments on the future of the railroad industry and on the proper role of mergers in shaping that future. See Decision, Public Views on Major Rail Consolidations, Ex Parte No. 582 (January 24, 2000). The Notice indicated that, although the Board was prompted to consider consolidation in the railroad industry in part because of the BNSF/CN proposal, the agency intended to consider the issues raised by consolidation separately from, and not as a "prejudgment" of, the BNSF/CN application. The Board did not mention in the Notice that it might impose a moratorium upon the filing of merger applications. At the conclusion of the comment period, however, the Board announced a 15-month moratorium upon the filing of merger applications because

the rail community is not in a position to now undertakewhat will likely be the final round of restructuring of theNorth American railroad industry, and because [theBoard's] current rules are simply not appropriate foraddressing the broad concerns associated with reviewingbusiness deals geared to produce two transcontinentalrailroads.

Decision, Public Views on Major Rail Consolidations, STB Ex Parte No. 582 (March 16, 2000); see also Corrected Decision, Public Views on Major Rail Consolidations, STB Ex Parte No. 582 (April 7, 2000). The Board stated it would use this time to review and revise its standards for considering merger proposals. Among the concerns raised by commentors, the Board noted the service disruptions that had resulted from prior mergers, and the decreased competition that could result from further consolidation within the industry. The Board acknowledged that "holding up [the BNSF/CN] merger application proceeding would itself be viewed negatively by the financial markets as creating uncertainty," but found the potential benefits to the carriers of going forward at once on the merger application out weighed by the uncertainty of processing the application "without appropriate rules in place at the beginning to govern the proceeding."

BNSF contends--in a variety of ways--that the Board may not lawfully postpone its acceptance or its review of a railroad merger proposal. The petitioners' central argument and the theme underlying most of its arguments is that, under the timeline set out in 49 U.S.C. 11325, the Board must accept when proffered any merger application that is complete, and must decide whether to approve the proposed merger within 16 months of receiving the application.

II. Analysis

To the extent BNSF argues that the Board lacks the statutory authority to impose a moratorium, we review the Board's construction of the statute under the standards established in Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-44 (1984). At step one we ask whether the Congress "has directly spoken to the precise question at issue." Id. at 842. If it has, then we are bound to "give effect to the unambiguously expressed intent of Congress." Id. at 843. If it has not, then we proceed to step two, and defer to the Board's interpretation of the statute so long as it is "based on a permissible construction of the statute." Id. Our inquiry at step two is informed by the Supreme Court's recent teaching in Food and Drug Administration v. Brown & Williamson Tobacco Corp., 120 S. Ct. 1291, 1300-01 (2000), that a reviewing court should "examin[e] a particular statutory provision ... '[in] context and with a view to [its] place in the overall statutory scheme' ... [and] be guided to a degree by common sense as to the manner in which Congress is likely to delegate a policy decision of such economic and political magnitude to an administrative agency."

If we find (as we do) that the Board has the statutory authority to impose a moratorium, we will uphold its decision to do so as long as it "examine[d] the relevant data and articulate[d] a satisfactory explanation for its action including a 'rational connection between the facts found and the choice made.' " Motor Vehicle Mfrs. Ass'n v. State Farm Mutual Auto. Ins. Co., 463 U.S. 29, 43 (1983) (quoting Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962)).

A.The Board's Statutory Authority

The main statutory direction for the Board's review of merger proposals appears in 49 U.S.C. 11324 and 11325.In 11324(a) the Board is instructed to begin considering a merger application upon receipt of the application and to consider, among other things, "whether the proposed transaction would have an adverse effect on competition among rail carriers." 49 U.S.C. 11324(b)(5). The Board must "approve and authorize" a merger it finds to be "consistent with the public interest." 49 U.S.C. 11324(c).

Section 11325 instructs the Board within 30 days of receiving an application either to reject it as incomplete or, if it is complete, to publish notice of the application in the Federal Register. See 49 U.S.C. 11325(a). The Board must conclude its evidentiary proceedings within one year of publishing the notice, and issue a final decision within 90 days of concluding the evidentiary proceedings. Id. 11325(b)(3).

1. The Positions of the Parties

In the Decision announcing the moratorium, the Board explained that it could not then adequately determine whether any further railroad mergers were in the public interest. Indeed, the Board imposed the moratorium specifically in order to review its criteria for determining the public interest. In addition to the "public interest" mandate of 11324(c), the Board cited as authority for the moratorium 49 U.S.C. 721(a), which authorizes the Board to "carry out ... [and] prescribe regulations in carrying out" merger proceedings, and 49 U.S.C. 721(b)(4), which authorizes the Board, "when necessary to prevent irreparable harm, [to] issue an appropriate order without regard to [certain requirements of the Administrative Procedure Act]."

BNSF emphasizes that 11325 by its terms requires the Board to adhere to a strict timetable; once a complete application is proffered--and the Board does not claim that the BNSF/CN application will be incomplete--the Board must accept and consider it pursuant to the...

To continue reading

Request your trial
8 cases
  • U.S. v. Johnson
    • United States
    • U.S. Court of Appeals — District of Columbia Circuit
    • 11 Marzo 2008
    ... ... have probable cause to believe that a traffic violation has occurred, see Whren v. United ... ...
  • Mylan Laboratories, Inc. v. Thompson
    • United States
    • U.S. Court of Appeals — District of Columbia Circuit
    • 30 Noviembre 2004
    ...a permissible construction of the applicable FDCA provisions and therefore satisfies Chevron. See Western Coal Traffic League v. Surface Transp. Bd., 216 F.3d 1168, 1173 (D.C.Cir.2000) (reviewing under Chevron agency resolution of "unanticipated conflict" arising from application of A. Conv......
  • Sunny v. Biden
    • United States
    • U.S. District Court — Eastern District of New York
    • 12 Noviembre 2021
    ...resources in the optimal way." In re Barr Laboratories, Inc., 930 F.2d 72, 76 (D.C. Cir. 1991) ; cf. W. Coal Traffic League v. Surface Transp. Bd., 216 F.3d 1168, 1175 (D.C. Cir. 2000) (finding delay in an adjudication appropriate because the defendant agency had the discretion to set its o......
  • Sunny v. Biden
    • United States
    • U.S. District Court — Eastern District of New York
    • 12 Noviembre 2021
    ... ... ceilings based on the USA's overall limit. The ENA ... provides that ... Cir ... 1991); cf W. Coal Traffic League v. Surface Transp ... Bd, ... ...
  • Request a trial to view additional results
3 books & journal articles
  • Statutory Exemptions for Regulated Industries
    • United States
    • ABA Antitrust Library Handbook on the Scope of Antitrust Regulated industries and targeted exemptions
    • 1 Enero 2015
    ...Control & Operating Leases/Agreements—Conrail, Inc., & Consol. Rail Corp., 3 S.T.B. 196 (1998). 382. Western Coal Traffic League v. STB, 216 F.3d 1168, 1170 (D.C. Cir. 2000). The STB’s authority to institute the moratorium was upheld by the D.C. Circuit Court of Appeals. Id. at 1176-77. 383......
  • Table of Cases
    • United States
    • ABA Antitrust Library Handbook on the Scope of Antitrust Procedural issues
    • 1 Enero 2015
    ...1991), 325 Table of Cases 407 Western Coal Traffic League v. STB, 169 F.3d 775 (D.C. Cir. 1999), 338 Western Coal Traffic League v. STB, 216 F.3d 1168 (D.C. Cir. 2000), 338 Western States Wholesale Natural Gas Antitrust Litig., In re, 661 F. Supp. 2d 1172 (D. Nev. 2009), 148 Wheat Rail Frei......
  • Regulated Industries
    • United States
    • ABA Antitrust Library Antitrust Law Developments (Ninth Edition) - Volume II
    • 2 Febrero 2022
    ...where necessary to carry out its duties to preserve competition and carry out the public interest.” Western Coal Traffic League v. STB, 216 F.3d 1168, 1175 (D.C. Cir. 2000). 1767. Public Views on Major Rail Consolidations, 4 S.T.B. at 548. 1768. Major Rail Consolidation Procedures, 5 S.T.B.......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT