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DSSURYHWKHVDOHRIWKHUDLOOLQHDQGWKDWLWVOctober 4, 2000 ',675,&7 

decision approving the sale was not erroneous to the extent 3HWLWLRQHUV 

that it ordered RVI to transfer its entire fee simple interest in 

the property constituting the rail line that was the subject of Y 

RVI’s abandonment petition. Further, we find the STB’s 

decisions to lower the salvage value of the track and materials 

and to order RVI to escrow $375,000 of the sale proceeds to 685)$&( 75$163257$7,21 

pay for track restorations and repairs were not arbitrary or %2$5'DQG81,7(' 67$7(6 

capricious. The STB also did not err in voiding the "Grade 2) $0(5,&$ 

Separated Crossing Settlement Agreement" ("GSCSA") 5HVSRQGHQWV 

entered into between RVI and Boardman Township and 

RVI’s transfer of surface rights in 4.012 acres of the line to 

the Park District. )RU WKH UHDVRQV VHW IRUWK DERYH ZH &2/80%,$1$ &2817< 3257 

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customers were required to endure long delays in getting to BBBBBBBBBBBBBBBBB

their nursery when the primary access road was blocked by

waiting trains. Finding that "[t]he language of the statute 23,1,21

could not be more precise, and it is beyond peradventure that BBBBBBBBBBBBBBBBB

regulation of KCS trains operations, as well as the

construction and operation of the KCS side tracks, is under &/$<&LUFXLW-XGJHPetitioners, Railroad Ventures, Inc.

the exclusive jurisdiction of the STB unless some other ("RVI"), Boardman Township ("Boardman Township"), and

provision in the ICCTA provides otherwise," the Fifth Circuit Boardman Township Park District ("the Park District") seek

in Friberg held that the plaintiffs’ common claims of review of several orders issued throughout the year 2000 by

negligence were preempted by the ICCTA. 267 F.3d at 443- Respondent Surface Transportation Board ("the STB") during

44. the course of a sale by RVI to Intervenor Columbiana County

Port Authority ("CCPA") of a 35.7-mile rail line ("the rail

In the present case, it is manifestly clear that Congress line") extending from milepost 0.0 at Youngstown, Ohio to

intended to preempt the Ohio state statutes, and any claims milepost 35.7 at Darlington, Pennsylvania, with a connecting

arising therefrom, to the extent that they intrude upon the one-mile segment near Negley, Ohio, pursuant to 49 U.S.C.

STB’s exclusive jurisdiction over "transportation by rail § 10904. &&3$LVDTXDVLSXEOLFDJHQF\HVWDEOLVKHGE\WKH

carriers" and "the construction, acquisition, operation, %RDUG RI &RXQW\ &RPPLVVLRQHUV RI &ROXPELDQD &RXQW\

abandonment, or discontinuance of spur, industrial, team, 2KLR  7KH RWKHU LQWHUYHQRU &HQWUDO &ROXPELDQD

switching, or side tracks, or facilities, even if the tracks are 3HQQV\OYDQLD 5DLOZD\ ,QF ³&&35´ D ZKROO\ RZQHG

located, or intended to be located, entirely in one State."  VXEVLGLDU\RIWKH$UNDQVDV6KRUW/LQH5DLOURDGV,QFKDVD

86&†E$OWKRXJK%RDUGPDQ7RZQVKLSFODLPV OHDVHWRRSHUDWHWKHUDLOOLQH The sale occurred after RVI,

WKDW WKH SXUSRVH RI WKH *6&6$ ZDV WR FRPSO\ ZLWK WKH which acquired the rail line from Youngstown & Southern

UHTXLUHPHQWVRIWKH2KLRVWDWXWHV†E has preemptive Railroad on November 8, 1996, submitted an application to

effect to the extent that these state statutes conflict with the STB for exemption from certain regulations, pursuant to

federal law. Cipollone, 505 U.S. at 516 (citing Maryland v. 49 U.S.C. § 10502, and for authority to abandon the rail line

Louisiana, 451 U.S. 725, 746 (1981)). pursuant to 49 U.S.C. § 10903(a). For the reasons set forth

below, we AFFIRM the STB’s orders.

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whether the Ohio statutes at issue are preempted by the Federal Railroad $6WDWXWRU\DQG5HJXODWRU\)UDPHZRUN

Safety Act (FRSA), 49 U.S.C. §§ 20101-20153. See CSX Transp. Inc. v.

City of Plymouth, 283 F.3d 812, 817 (6th Cir. 2002) (noting that the &RQJUHVVKDVUHJXODWHGWKHDEDQGRQPHQWRIUDLOURDGOLQHV

FRSA preempted WKH 0LFKLJDQ VWDWXWH SURKLELWLQJ WUDLQV IURP

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7UDQVSRUWDWLRQ$FWRI6WDW7RH[SHGLWHWKH 49 U.S.C. § 10501(b). As explained by the Ninth Circuit in

DEDQGRQPHQW SURFHVV &RQJUHVV PRGLILHG WKH ,QWHUVWDWH City of Auburn v. United States, 154 F.3d 1025, 1030 (9th

&RPPHUFH $FW ZLWK WKH HQDFWPHQW RI WKH 5DLOURDG Cir. 1998):

5HYLWDOL]DWLRQDQG5HJXODWRU\5HIRUP$FWRI5$FW

3XE / 1R   6WDW   ZKLFK DGGHG D Section 10501 of the ICCTA, which governs the STB's

SURYLVLRQ86&†QRZ86&†WKDW jurisdiction, states the [B]oard will have exclusive

VXVSHQGHG DEDQGRQPHQW RI D OLQH IRU XS WR VL[ PRQWKV WR jurisdiction over "the construction, acquisition, operation,

DOORZ WLPH IRU D SURVSHFWLYH SXUFKDVHU WR FRQVXPPDWH WKH abandonment, or discontinuance of spur, industrial, team,

switching, or side tracks, or facilities, even if the tracks

are located, or intended to be located, entirely in one

State." 49 U.S.C. § 10501(b)(2) (1997). The same



section states that "the remedies provided under this part

3XUVXDQW WR WKH ,QWHUVWDWH &RPPHUFH $FW RI   6WDW  with respect to regulation of rail transportation are

 &RQJUHVV FUHDWHG WKH ,&& WR UHJXODWH UDLOURDGV 6HH &KLFDJR exclusive and preempt the remedies provided under

1: 7UDQVS &R Y .DOR %ULFN 7LOH &R  86   

Federal or State law." 49 U.S.C. § 10501(b) (1997). . . .

UHFRJQL]LQJ WKH ,QWHUVWDWH &RPPHUFH $FW DV ³DPRQJ WKH PRVW SHUYDVLYH

DQG FRPSUHKHQVLYH RI IHGHUDO UHJXODWRU\ VFKHPHV´ 8QLWHG 6WDWHV Y The section unambiguously states: "The authority of the

%DOWLPRUH 25 &R   86    ³7KH ,QWHUVWDWH Board under this subchapter is exclusive." Id.

&RPPHUFH $FW LV RQH RI WKH PRVW FRPSUHKHQVLYH UHJXODWRU\ SODQV WKDW

&RQJUHVV KDV HYHU XQGHUWDNHQ´ 0LG$PHULFDQ (QHUJ\ &R Y 67%   154 F.3d at 1030 (emphasis in original).

)G   WK &LU  QRWLQJ WKDW ³WKH ,QWHUVWDWH &RPPHUFH

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In City of Auburn, the Ninth Circuit, endorsing a "broad

reading of Congress’ preemption intent, not a narrow one,"

WK &LU  QRWLQJ WKDW ³&RQJUHVV¶ DXWKRULW\ WR UHJXODWH UDLOURDGV LV

ZHOO HVWDEOLVKHG´ rejected the City’s argument that Congress, through the

ICCTA, only intended preemption of economic regulation of

,QLWLDOO\ WKH ,QWHUVWDWH &RPPHUFH $FW GLG QRW VXEMHFW UDLOURDG the railroads. Finding that Congressional intent was clear and

DEDQGRQPHQWV WR WKH MXULVGLFWLRQ RI WKH ,&& 6HH +D\ILHOG  86 DW

 +RZHYHU ZLWK WKH SDVVDJH RI WKH 7UDQVSRUWDWLRQ $FW RI 

that preemption of rail activity is a valid exercise of

&RQJUHVV VRXJKW WR SUHHPSW DFWLRQV E\ VWDWH DQG ORFDO DXWKRULWLHV WKDW Congressional power under the Commerce Clause, the Ninth

SUHYHQWHG UDLOURDGV IURP DEDQGRQLQJ XQSURILWDEOH OLQHV 5/7' 5\ &RUS Circuit affirmed the STB’s finding that state and local

Y 67%  )G   WK &LU  QRWLQJ WKDW ³&RQJUHVV VRXJKW environmental review laws were preempted pursuant to

WR EDODQFH WKH UDLOURDG FRPSDQLHV¶ QHHG WR GLVSRVH RI WUDFNDJH WKDW ZDV QR § 10501(b)(2).

ORQJHU SURILWDEOH ZLWK WKH SXEOLF¶V QHHG IRU D ZRUNLQJ LQWHUVWDWH WUDFN

V\VWHP´FLWLQJ 6WHYHQ 5 :LOG $ +LVWRU\ RI 5DLOURDG $EDQGRQPHQWV 

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The Fifth Circuit has also found preemption under 49

  )RU WKH PRVW SDUW IURP  XQWLO  &RQJUHVV VHW QR U.S.C. § 10501(b). In Friberg, 267 F.3d at 439, the Fifth

WLPH OLPLW IRU DEDQGRQPHQWV 6HH +D\ILHOG  86 DW  QRWLQJ Circuit ruled that suits against the railroad (KCS) for

WKDW ³>U@DLOURDGV FRQVHTXHQWO\ IRXQG WKHPVHOYHV HQPHVKHG LQ OHQJWK\ negligence were preempted by federal law under 49 U.S.C.

SURFHHGLQJV´ ZKLOH DWWHPSWLQJ WR ³XQEXUGHQ WKHPVHOYHV SURPSWO\ RI

XQSURILWDEOH OLQHV´ &RQVRO 5DLO &RUS Y 67%  )G   '&

§ 10501(b). In that case, the plaintiffs, who operated a

&LU  ³)RU PRVW RI WKLV SHULRG &RQJUHVV VHW QR WLPH OLPLW IRU

landscape nursery, alleged that they lost business and

DEDQGRQPHQW SURFHHGLQJV´ eventually were forced to close their business because their

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state law so conflict that it is impossible for a party to comply DFTXLVLWLRQRIDUDLOOLQHIURPDQDEDQGRQLQJFDUULHU6HH

with both simultaneously, or where enforcement of state law +D\ILHOG155Y&KLFDJR 1:7UDQVS&R86

prevents the accomplishment of the full purposes and 7KH,QWHUVWDWH&RPPHUFH$FWZDVIXUWKHU

objectives of federal law. See Cipollone v. Liggett Group, DPHQGHGE\WKHSDVVDJHRIWKH6WDJJHUV5DLO$FWRI

Inc., 505 U.S. 504, 516 (1992); Friberg v. Kansas City S. Ry. 3XE / 1R   6WDW   ZKLFK DGGHG D

Co., 267 F.3d 439, 442 (5th Cir. 2001). "If the statute IRUFHGVDOH SURYLVLRQ WR WKH IRUPHU  86& † 

contains an express preemption clause, the task of statutory DOORZLQJWKH,&&WRVHWWKHSULFHDQGRWKHUWHUPVRIVDOHZKHQ

construction must in the first instance focus on the plain DSDUW\WRWKHVDOHUHTXHVWHGLW,GDW³7KHXQGHUO\LQJ

wording of the clause, which necessarily contains the best UDWLRQDOHRI†UHSUHVHQWVDFRQWLQXDWLRQRI&RQJUHVV¶

evidence of Congress’ preemptive intent." CSX Transp. Inc. HIIRUWVWRDFFRPPRGDWHWKHFRQIOLFWLQJLQWHUHVWVRIUDLOURDGV

v. Easterwood, 507 U.S. 658, 664 (1993). Although there is WKDW GHVLUH WR XQEXUGHQ WKHPVHOYHV TXLFNO\ RI XQSURILWDEOH

a presumption under the Supremacy Clause that Congress did OLQHV DQG VKLSSHUV WKDW DUH GHSHQGHQW XSRQ FRQWLQXHG UDLO

not intend to preempt state law, "an assumption of nonpre- VHUYLFH´*65RRILQJ3URGV&RY67%)G

emption is not triggered when the State regulates in an area WK&LU³*65RRILQJ,,³7KH6WDJJHUV5DLO$FWRI

where there has been a history of significant federal  QRZ FRGLILHG DW  86& †  ZDV HQDFWHG WR

presence." United States v. Locke, 529 U.S. 89, 108 (2000). DGGUHVVFRQFHUQVDERXWWKHGHWHULRUDWLQJUDLOVHUYLFHSURYLGHG

RQ VRPH RI WKH VHFRQGDU\ UDLOURDG OLQHV WKURXJKRXW WKH

As set forth in 49 U.S.C. § 10501(b): FRXQWU\´&RQVRO5DLO&RUSY,&&)G'&

&LU  QRWLQJ WKDW WKH SXUSRVH RI WKH IRUFHGVDOH

(b) The jurisdiction of the Board over--

(1) transportation by rail carriers, and the remedies

provided in this part with respect to rates, classifications,

rules (including car service, interchange, and other

operating rules), practices, routes, services, and facilities

of such carriers; and



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(2) the construction, acquisition, operation, 86& †  DUH WR SUHVHUYH UDLO VHUYLFH IRU VKLSSHUV RYHU D OLQH WKDW

abandonment, or discontinuance of spur, industrial, team, ZRXOG RWKHUZLVH EH DEDQGRQHG ZKLOH SHUPLWWLQJ WKH RZQHU RI DQ

switching, or side tracks, or facilities, even if the tracks 6HH

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are located, or intended to be located, entirely in one 5DLOURDG 7UDQVSRUWDWLRQ 3ROLF\ $FW RI  +HDULQJV RQ 6 EHIRUH

WKH 6HQDWH &RPP RQ &RPPHUFH 6FLHQFH DQG 7UDQVSRUWDWLRQ 6 5HS 1R

State, is exclusive. Except as otherwise provided in this  DW  WK &RQJ VW 6HVV   QRWLQJ WKDW WKLV VHFWLRQ

part, the remedies provided under this part with respect ³VHWV XS D SURFHGXUH ZKHUH UDLO OLQHV DSSURYHG IRU DEDQGRQPHQW PD\ EH

to regulation of rail transportation are exclusive and SXUFKDVHG RU VXEVLGL]HG LQ RUGHU WR FRQWLQXH UDLO VHUYLFH´ +5 5HS 1R

preempt the remedies provided under Federal or State  DW  WK &RQJ G 6HVV   UHSULQWHG LQ 

law. 86&&$1 DW   QRWLQJ WKDW WKLV VHFWLRQ ZLOO ³DVVLVW VKLSSHUV

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SURYLVLRQLV³QRWVLPSO\WKHPDLQWHQDQFHRIUDLOOLQHVEXWWKH from its interpretation of two provisions of the OFA statute:

FRQWLQXDWLRQRIUDLOVHUYLFH´HPSKDVLVLQRULJLQDO the common carrier obligations of § 10904(f)(4)(A) and the

STB’s authority to set the terms and conditions of a forced

$IWHUWKH,&&FHDVHGWRH[LVWHIIHFWLYH-DQXDU\ sale pursuant to § 10904(f)(1). Section 10904(f)(4)(A) bars

SXUVXDQW WR WKH Interstate Commerce Commission a purchaser of a rail line from transferring or discontinuing

Termination $FWRI49 U.S.C. §§ 10101-16106 (1997) service during the two years after the purchase, and restricts

³WKH,&&7$´DXWKRULW\RYHUWKHDEDQGRQPHQWRIUDLOURDG the purchaser from transferring the line to anyone but the

OLQHVSDVVHGWRWKH6XUIDFH7UDQVSRUWDWLRQ%RDUG³WKH67%´ seller for a five-year post-sale period. Thus, the STB acted

6HH  86& †  *6 5RRILQJ ,,  )G DW  within its authority when it recognized that the GSCSA

0LG$PHULFDQ(QHUJ\&RY67%)GQ impeded a line owner’s ability to perform rail operations by

WK&LU5/7'5\&RUSY67%)G conditioning a line owner’s full resumption of service with

WK&LU&RQVRO5DLO&RUSY67%)G the obligation to complete the projected improvements set

'& &LU  QRWLQJ WKDW ³PDQ\ IXQFWLRQV RI WKH ,&& forth in the agreement. It was also reasonable for the STB to

LQFOXGLQJ DXWKRULW\ RYHU DEDQGRQPHQW SURFHHGLQJV ZHUH view the provisions of the GSCSA as an intrusion onto its

WUDQVIHUUHGWRWKH67%LQWKH'HSDUWPHQWRI7UDQVSRUWDWLRQ´ § 10904(f)(1) authority to fix the terms and conditions of an

7KH67%LVQRZWKHIHGHUDODJHQF\ZLWKH[FOXVLYHMXULVGLFWLRQ OFA sale. Noting that "section 10904 represents a clear

RYHU WUDQVSRUWDWLRQ E\ UDLOURDG  )ULHQGV RI WKH $WJOHQ legislative determination that rail service should be preserved

6XVTXHKDQQD7UDLO,QFY67%)GQG whenever there is an offeror willing to provide for continued

&LU  FLWLQJ  86& † D  7KXV LI D service," the STB did not act unreasonably in voiding the

UDLOURDGOLQHIDOOVZLWKLQLWVMXULVGLFWLRQWKH67%¶VDXWKRULW\ GSCSA to the extent it imposed obligations on parties other

RYHU DEDQGRQPHQW LV ERWK H[FOXVLYH DQG SOHQDU\  6HH than Boardman Township and RVI, and to the extent it

3UHVHDXOW Y ,&&  86    FLWLQJ &KLFDJR required construction of an overpass or underpass before the

1RUWK:HVWHUQ7UDQVS&RY.DOR%ULFN 7LOH&R86

5/7'5\&RUS)GDW resumption of rail service. Because the STB has acted

rationally and in accordance with law, we therefore affirm the

,QDGGLWLRQPRVWRIWKHSURYLVLRQVRIWKHIRUPHU,QWHUVWDWH order voiding the GSCSA.

&RPPHUFH$FWZHUHUHHQDFWHGLQWKH ICCTA. 0LG$PHULFDQ

)GDWQ6SHFLILFDOO\WKH,&&7$UHFRGLILHGWKH Finally, we note that the ICCTA preempts the Ohio state

IRUPHU†DV†DPHQGLQJWKHVWDWXWHWROLPLWWKH statutes in question to the extent that they intrude upon the

SHULRGLQZKLFKWKH67%VHWWKHWHUPVDQGFRQGLWLRQVRIWKH jurisdiction of the STB with regard to the regulation of rail

IRUFHGVDOHWRWKLUW\GD\VDQGWKHGXUDWLRQRIDQ\VXEVLG\IRU transportation under § 10501(b). Under the Supremacy

Clause, U.S. Const. art. 6, cl. 2, federal law preempts state or

local law in various ways: (1) express preemption where the

 intent of Congress to preempt state law is clear and explicit;

,Q 3UHVHDXOW Y ,&&  86    WKH &RXUW QRWHG WKDW

&RQJUHVV H[SUHVVHG FRQFHUQ DERXW ³WKH VKULQNLQJ UDLO WUDFNDJH´  86

(2) field preemption where Congress’ regulation of a field is

DW  $V QRWHG E\ -XVWLFH %UHQQDQ ³,Q  WKH 1DWLRQ¶V UDLOZD\ V\VWHP

so pervasive or the federal interest is so dominant that an

UHDFKHG LWV SHDN RI  PLOHV >LQ @ RQO\ DERXW  PLOHV intent can be inferred for federal law to occupy the field

>ZHUH@ LQ XVH DQG H[SHUWV SUHGLFW WKDW  PLOHV ZLOO EH DEDQGRQHG exclusively; and (3) conflict preemption, where federal and

HYHU\ \HDU WKURXJK WKH HQG RI WKLV FHQWXU\´ ,G

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is reactivated for rail service to submit the plans ". . . and FRQWLQXHGUDLOVHUYLFH6HH1DW¶O$VV¶QRI5HYHUVLRQDU\3URS

metes and bounds descriptions of any property to be 2ZQHUVY67%)G'&&LU (noting

appropriated for the construction of the Crossing Project that "[t]he ICCTA made some changes to the abandonment

. . . ," a later provision overrides the time period and application process, such as eliminating the processing

requires, among other things, completion of the project timetable and requiring that offers of financial assistance

and submission to [Boardman Township] of a 2-year [OFA] be filed within four months of an abandonment

maintenance bond on the improvements, before rail application, see 49 U.S.C. § 10904(c)").

service can be resumed in full.

$ UDLO FDUULHU SURYLGLQJ WUDQVSRUWDWLRQ VXEMHFW WR WKH

559HQWXUHV 2000 WL 1125904, at *2. MXULVGLFWLRQ RI WKH 67% PD\ DEDQGRQ LWV UDLOURDG OLQH RU

GLVFRQWLQXH WKH RSHUDWLRQ RI DOO UDLO WUDQVSRUWDWLRQ RYHU LWV

On appeal, Boardman Township challenges the STB’s UDLOURDGOLQHRQO\DVDXWKRUL]HGXQGHUWKHVWDWXWH86&

decisions declaring the GSCSA void and unenforceable † D7RDEDQGRQDUDLOURDGOLQHRUGLVFRQWLQXH

against CCPA, claiming that the purpose of the GSCSA was RSHUDWLRQRIUDLOVHUYLFHRQDUDLOOLQHDUDLOFDUULHUPXVWILOH

not to interfere with rail operations, but to secure the health, DQ DSSOLFDWLRQ ZLWK WKH 67% VHHNLQJ SULRU DSSURYDO RU DQ

safety, and well-being of the residents of Boardman Township H[HPSWLRQ  86& † † D D$  

pursuant to Ohio Rev. Code § 519.02, and to avoid the &)5 ††   VHH )ULHQGV RI WKH $WJOHQ

imposition of liability on political subdivisions "for injury, 6XVTXHKDQQD7UDLO)GDW³$UDLOFDUULHULQWHQGLQJ

death, or loss to persons or property caused by their failure to WRDEDQGRQDQGWREHUHOHDVHGIURPLWVREOLJDWLRQVWRUHWDLQRU

keep public roads, highways, streets, avenues, alleys, RSHUDWHDQ\SDUWRILWVUDLOURDGOLQHVPXVWILOHDQDSSOLFDWLRQ

sidewalks, bridges, aqueducts, viaducts, and public grounds WRGRVRZLWKWKH67%DQGVXFKDEDQGRQPHQWPXVWDGKHUHWR

within the political subdivisions open, in repair, and free from FHUWDLQ HVWDEOLVKHG SURFHGXUHV´  A line owner may

nuisance" under Ohio Rev. Code § 2744.02(B)(3). Boardman "abandon any part of its railroad lines," 49 U.S.C.

Township contends that the STB’s goal of continued rail § 10903(d)(1), but cannot do so without the permission of the

service, where appropriate, should not wholly displace its STB. 49 U.S.C.§ 10903(a)(1)(A); VHH .XOPHU DQG

concerns for public safety and its duty to its citizens arising 6FKXPDFKHUY67%)GWK&LU

under state law.

At the outset, we note that Boardman Township entered 

3XUVXDQW WR  86& † D UDLOURDGV DV FRPPRQ FDUULHUV

into the GSCSA with RVI on November 5, 1999. Because KDYH DQ REOLJDWLRQ WR SURYLGH UDLO VHUYLFH XSRQ UHDVRQDEOH UHTXHVW EXW

RVI had no legal right to transfer any property interests ³WKH FRPPRQ FDUULHU REOLJDWLRQ LV QRW DEVROXWH´ *6 5RRILQJ ,,  )G

associated with the rail line after filing its abandonment DW  $EDQGRQPHQW FRQVLVWV RI ³D SHUPDQHQW RU LQGHILQLWH FHVVDWLRQ RI

petition, we thereby uphold the STB’s invalidation of the UDLO VHUYLFH ZKLFK WHUPLQDWHV D UDLO FDUULHU¶V SXEOLF VHUYLFH REOLJDWLRQ´

GSCSA agreement. *LEERQV Y 8QLWHG 6WDWHV  )G   WK &LU  "An

abandoned railroad corridor is one that is no longer used for rail service

In addition, we note that the STB acted within its authority and is removed from the national transportation system." Nat’l Ass’n of

Reversionary Prop. Owners, 158 F.3d at 137 n.1 (citing Presault, 494

by invalidating the agreement on public policy grounds. U.S. at 6 n.3). ³$ OLQH WKDW LV QR ORQJHU LQ XVH EXW KDV EHHQ RIILFLDOO\

Here, the STB’s decision to invalidate the GSCSA stemmed DEDQGRQHG PD\ EH UHDFWLYDWHG ODWHU DQG LV WHUPHG µGLVFRQWLQXHG¶´ ,G

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³5DLOFDUULHUVPXVWREWDLQ67%DXWKRUL]DWLRQWRDEDQGRQUDLO 5. The STB did not err in voiding the "Grade Separated

VHUYLFHRYHUWKHLUOLQHV´*65RRILQJ3URGV&RY67% Crossing Settlement Agreement" ("GSCSA") entered

)GWK&LU³*65RRILQJ,´(WKDQ$OOHQ into between RVI and Boardman Township

,QFY0DLQH&HQW55&R)6XSS'9W

QRWLQJWKDW³WKHTXDVLSXEOLFQDWXUHRIUDLOURDGVHQWDLOV In its January 7, 2000 decision, the STB granted CCPA’s

DKLJKHUGHJUHHRISXEOLFUHVSRQVLELOLW\WKDQLVUHTXLUHGRI request to declare the GSCSA unenforceable against it,

PRVW SULYDWH FRPSDQLHV´  A rail line owner is generally finding that enforcement of the GSCSA against CCPA would

obligated to maintain a diagram of the rail system it operates, unreasonably interfere with CCPA’s purchase of the rail line

and if the owner wishes to abandon, it must "identify each and its future fulfillment of common carrier obligations. The

railroad line for which the rail carrier plans to file an STB reiterated these conclusions in its October 4, 2000

application to abandon." 49 U.S.C. § 10903(c)(2)(B). 49 decision, denying Boardman Township’s request for a stay

C.F.R. § 1152.22(a)(4) further specifies that the information pending appeal of the January 7, 2000 decision. In both

comprising the abandonment application include: decisions, the STB viewed the GSCSA as contrary to the

public interest in continued rail service. The STB’s January

[a d]etailed map of the subject line on a sheet not larger 7, 2000 decision provides a summary of the provisions of the

than 8x10 ½ inches, drawn to scale, and with the scale GSCSA:

shown thereon. The map must show, in clear relief, the

exact location of the rail line to be abandoned or over Specifically, the [GSCSA] states that "RVI or its

which service is to be discontinued and its relation to successors and assigns (hereinafter referred to as ‘Line

other rail lines in the area, highways, water routes, and Owner’) agree to undertake the necessary planning,

population centers. construction, and future maintenance of a grade separated

crossing at State Road 224 and at other such road

49 C.F.R. § 1152.22(a)(4). crossings as may be determined by [Boardman

Township] . . . ." Designating it as the "Crossing

7KH 67% DXWKRUL]HV OLQH DEDQGRQPHQWV LQ WZR ZD\V Project" the [GSCSA] requires the Line Owner, within 3

5HGPRQG,VVDTXDK5\3UHV$VV¶QY67%)G months from the date the line is reactivated for continued

 Q  WK &LU   )LUVW WKH 67% PD\ SHUPLW WKH rail service, to prepare and submit for the approval of

DEDQGRQPHQW RI D UDLOURDG OLQH E\ D UDLO FDUULHU RU WKH [Boardman Township] and various state authorities

GLVFRQWLQXDQFHRIUDLOVHUYLFHLILWILQGVWKDWSUHVHQWRUIXWXUH detailed plans and cost estimates for the acquisition of

SXEOLFFRQYHQLHQFHDQGQHFHVVLW\VXSSRUWVVXFKDEDQGRQPHQW additional property necessary for the construction of the

RUGLVFRQWLQXDQFH86&†G7RLPSOHPHQW new grade separated crossing, including adjustments to

WKLVVWDQGDUGWKH67%EDODQFHVWKHSRWHQWLDOKDUPWRDIIHFWHG the public highway, which will carry the rail line over or

VKLSSHUV DQG FRPPXQLWLHV DJDLQVW WKH SUHVHQW DQG IXWXUH under Route 224 and other designated road crossings.

EXUGHQ WKDW FRQWLQXHG RSHUDWLRQV ZRXOG LPSRVH RQ WKH According to the [GSCSA], the Line Owner is

UDLOURDGDQGRQLQWHUVWDWHFRPPHUFH6HH&RORUDGRY8QLWHG responsible for all the costs and expenses associated with

6WDWHV865HGPRQG,VVDTXDK the Crossing Project. While these specific terms state

)G DW  QRWLQJ WKDW ³&RQJUHVV VRXJKW WR EDODQFH WKH that the Line Owner has 3 months from the date the line

UDLOURDG FRPSDQLHV¶ QHHG WR PDQDJH LWV WUDFNV LQ DQ

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Kovalchick contract initially and it should not be able to HFRQRPLFDOO\HIILFLHQWPDQQHUZLWKWKHSXEOLF¶VQHHGIRUD

profit from withholding information pertinent to the OFA IXQFWLRQLQJLQWHUVWDWHUDLOURDGV\VWHP´7KH67%PD\DOVR

process. To hold otherwise would be to reward RVI for DXWKRUL]HDQDEDQGRQPHQWE\JUDQWLQJDQH[HPSWLRQIURPWKH

undermining the integrity of the OFA process. Moreover, we FHUWLILFDWLRQSURFHVV6HH86&†D+RZHYHU

note that RVI does not contend that the Kovalchick contract RQFHDUDLOOLQHKDVEHHQSURSHUO\DEDQGRQHGWKH67%ORVHV

is unenforceable or that RVI would be able to sell the track to MXULVGLFWLRQ3UHVHDXOW86DWQ5/7'5\&RUS

anyone other than Kovalchick. Therefore, the STB provided )GDW&RQVRO5DLO&RUS)GDW

a reasoned explanation for revaluing the track and materials

in accordance with the terms of the Kovalchick contract. 7KH ,&&7$ SURYLGHV IRU RIIHUV RI ILQDQFLDO DVVLVWDQFH

2)$ WR DYRLG WKH DEDQGRQPHQW RI UDLO OLQHV  86&

b. Escrow of Funds for Repairs †   &)5 †  DQG IRU WKH VDOH VXEMHFW WR

FRQGLWLRQVLPSRVHGE\WKH67%RIDEDQGRQHGUDLOSURSHUWLHV

RVI also challenges the STB’s action in the October 4, WKDW DUH DSSURSULDWH IRU SXEOLF XVH  86& † 

2000 decision requiring CCPA to place $375,000 of the 6HFWLRQ E GLUHFWV D UDLO FDUULHU VHHNLQJ DXWKRULW\ WR

purchase price in an escrow account to ensure that RVI paid DEDQGRQ D OLQH SXUVXDQW WR  86& †  WR SURYLGH

for restorations to the track and signals. The STB ordered the SURPSWO\ WR D SDUW\ FRQVLGHULQJ DQ 2)$ D UHSRUW RQ WKH

creation of the escrow account because RVI had authorized SK\VLFDOFRQGLWLRQRI³WKDWSDUWRIWKHUDLOURDGOLQHLQYROYHG

state workers to pave over parts of the track and damage LQWKHSURSRVHGDEDQGRQPHQW´WKHWUDIILFUHYHQXHDQGRWKHU

signals during its ownership of the embargoed line. RVI GDWDQHFHVVDU\WRGHWHUPLQHWKHDPRXQWRIDQQXDOILQDQFLDO

argues that the escrow order was arbitrary because it was not DVVLVWDQFHQHHGHG³WRFRQWLQXHUDLOWUDQVSRUWDWLRQRYHUWKDW

under a legal obligation to maintain the line for common SDUWRIWKHUDLOURDGOLQH´DQGDQHVWLPDWHRIWKHPLQLPXP

carrier operations due to its embargo status at the time that SXUFKDVHSULFHUHTXLUHG³WRNHHSWKHOLQHRUDSRUWLRQRIWKH

RVI authorized the pavement of parts of the line and the OLQHLQRSHUDWLRQ´86&†E

disconnection of signals. RVI also claims that the STB’s

escrow order was an unwarranted punitive measure. 7KH 2)$ SURYLVLRQV RI WKH VWDWXWH JXDUDQWHH DQ\

³ILQDQFLDOO\UHVSRQVLEOH´SDUW\WKHULJKWWRDFTXLUHDUDLOOLQH

RVI fails to demonstrate that the STB’s decisions in this WR SURYLGH IRU FRQWLQXHG UDLO VHUYLFH  86& † 

regard were arbitrary. Although RVI was not obligated to 8QGHU†FDSURVSHFWLYH2)$SXUFKDVHU³PD\RIIHU

provide service on the line during the pendency of the WRVXEVLGL]HRUSXUFKDVHWKHUDLOURDGOLQHWKDWLVVXEMHFWRI´DQ

embargo, see GS Roofing I, 143 F.3d at 391, the STB acted DEDQGRQPHQWDSSOLFDWLRQ.XOPHU)GDW³7KH

reasonably in finding that RVI had an obligation to pay for 2)$SURYLVLRQVFUHDWHDIRXUPRQWKZDLWLQJSHULRGZKHUHLQ

any damage to the line. Further, the record shows that, in a µDQ\SHUVRQPD\RIIHUWRVXEVLGL]HRUSXUFKDVHWKHUDLOURDG

series of letters from RVI Project Manager Dennis Matey to OLQH WKDW LV WKH VXEMHFW¶ RI DQ DEDQGRQPHQW DSSOLFDWLRQ

state and local officials in Ohio, RVI acknowledged that it †F´A party must file its OFA within ten days of

would be responsible for any repair and reconnection costs. a decision from the STB granting a petition for abandonment

Considering RVI’s conduct since acquiring the rail line, the or exemption. 49 U.S.C. § 10904(c); 49 C.F.R.

STB, quite wisely, required an escrow of funds to repair the § 1152.27(c)(1)(i)(B). After a prospective purchaser has

damage to the track done with RVI’s authorization. "offered financial assistance regarding that part of the railroad

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line to be abandoned or over which rail transportation is to be  7KH67%¶VGHFLVLRQVWRORZHUWKHVDOYDJHYDOXHRIWKH

discontinued," 49 U.S.C. § 10904(d)(1) obligates the STB to WUDFN DQG PDWHULDOV DQG WR RUGHU 59, WR HVFURZ

decide if the prospective purchaser is "financially  RI WKH VDOH SURFHHGV WR SD\ IRU WUDFN

responsible." 8QGHU  86& † D D ³ILQDQFLDOO\ UHVWRUDWLRQV DQG UHSDLUV ZHUH QRW DUELWUDU\ RU

UHVSRQVLEOHSHUVRQ´LVGHILQHGWREH FDSULFLRXV

DSHUVRQZKR± D 'RZQZDUG5HYDOXDWLRQRI7UDFNDQG0DWHULDOV

 LV FDSDEOH RI SD\LQJ WKH FRQVWLWXWLRQDO PLQLPXP 59, FKDOOHQJHV WZR RWKHU DFWLRQV RI WKH 67% LQ LWV

YDOXHRIWKHUDLOURDGOLQHSURSRVHGWREHDFTXLUHGDQG 2FWREHUGHFLVLRQ)LUVW59,FRQWHQGVWKDWWKH67%

DFWHGDUELWUDULO\E\UHYDOXLQJWKHWUDFNDQGPDWHULDOV,QLWV

LVDEOHWRDVVXUHWKDWDGHTXDWHWUDQVSRUWDWLRQZLOOEH -DQXDU\   GHFLVLRQ WKH 67% EDVHG LWV LQLWLDO WUDFN

SURYLGHGRYHUVXFKOLQHIRUDSHULRGRIQRWOHVVWKDQ YDOXDWLRQRQDILUPRIIHUIURP$ .5DLOURDG0DWHULDOV,QF

\HDUV WREX\DQGUHPRYHWKHWUDFNIRU7KH67%UHGXFHG

WKLVDPRXQWE\WRUHIOHFWQHHGHGUHVWRUDWLRQVLQJUDGH

86&†D If a party files a timely OFA, and the FURVVLQJV DUULYLQJ DW D QHW VDOYDJH YDOXH RI 

STB finds that the party is "financially responsible," then the 6HYHUDOPRQWKVODWHUWKH67%UHYLVLWHGLWVWUDFNDQGPDWHULDOV

STB must postpone the abandonment of the line. 49 U.S.C. YDOXDWLRQ DIWHU UHFHLYLQJ QHZ HYLGHQFH IURP &&3$

§ 10904(d)(2). %HWZHHQWKH-DQXDU\DQG2FWREHUGHFLVLRQV&&3$

VXEPLWWHGHYLGHQFHRI59,¶VFRQWUDFWVHOOLQJWKHWUDFN

Postponement of abandonment remains in effect until the VDOYDJHULJKWVWR.RYDOFKLFNIRU7KH67%GHFLGHG

line owner and the prospective OFA purchaser (offeror) have WKDWWKHVDOHQXOOLILHGVXEVHTXHQWILUPSXUFKDVHRIIHUV

come to an agreement on the terms of sale, or until the STB DQGWKDWWKHYDOXHRIWKHWUDFNFRXOGQRWH[FHHGWKHDPRXQW

sets the terms of sale upon the request of either the line owner 59,KDGUHFHLYHGDFFRUGLQJWRFRQWUDFW

or purchaser. 49 U.S.C. § 10904(d)(2)-(f).Pursuant to 49

C.F.R. § 1152.27(h)(3), "[t]he offeror has the burden of proof &RQWUDU\WR59,¶VFRQWHQWLRQWKH67%¶VGHFLVLRQWRUHGXFH

as to all issues in dispute." See Iowa Terminal Ry. Co. v. WKHVDOYDJHYDOXHZDVQRWDUELWUDU\RUFDSULFLRXV$OWKRXJK

ICC, 853 F.2d 965, 969 (D.C. Cir. 1988) (noting that the 59,PDLQWDLQVWKDWWKH67%DFWHGDUELWUDULO\LQOLPLWLQJWKH

buyer "must present sufficient evidence of the line’s value to WUDFNVDOYDJHYDOXHWRWKHDPRXQWUHFHLYHGIURPWKH

meet that burden"). When setting the terms and conditions of .RYDOFKLFNFRQWUDFW because the contract with Kovalchick did

a sale of a rail line, the STB cannot set a price lower than the not concern the fair market value of the track in 2000, and

"fair market value of the line." 49 U.S.C. § 10904(f)(1)(B). because the contract with Kovalchick included a deeply

Under § 10907(b)(2), the "constitutional minimum value of discounted salvage value based on the STB’s future

a particular railroad line shall be presumed to be not less than abandonment authorization, the STB properly points out that

the net liquidation value of such line or the going concern RVI would not have been able to sell the track for any more

value of such line, whichever is greater." 49 U.S.C. than it had received in 1996. Further, the STB justifies its

§ 10907(b)(2); 49 C.F.R. § 1152.27(h)(6); GS Roofing II, 262 track revaluation, as stated in the October 4, 2000 decision, on

F.3d at 771 (noting that "Congress authorized the Board, the ground that RVI failed to come forward with the

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assembled corridor." 559HQWXUHV:/DW under particular circumstances, to force the sale of a railroad

6HH3RUWODQG7UDFWLRQ&R±$EDQGRQPHQW([HPSWLRQ± line at its ‘constitutional minimum value’ to a ‘financially

LQ 0XOWQRPDK  &ODFNPDV &RXQWLHV 'RFNHW 1R $% responsible person’").

6XE1R;:/DW 'HFLGHG-DQ

DFFHSWLQJFRUULGRUYDOXDWLRQRQWKHEDVLVRIDQH[HFXWHGVDOHV 49 U.S.C. § 10904(f)(2) gives an offeror ten days in which

FRQWUDFW to withdraw the offer to purchase a rail line following a

decision of the STB setting the terms of the sale. See also 49

,QGHFLGLQJWKHYDOXDWLRQLVVXHZHDUHFRQVWUDLQHGE\WKH C.F.R. § 1152.27(h)(7). By statute, only the offeror is

QDUURZ VWDQGDUG RI UHYLHZ DSSOLFDEOH WR DJHQF\ GHFLVLRQV authorized to withdraw from the terms of a STB-directed sale.

ZKLFKJHQHUDOO\UHTXLUHVDIILUPDQFHRIWKH67%¶VYDOXDWLRQ 49 U.S.C. § 10904(f)(2). Without a withdrawal by the offeror

GHFLVLRQV$VQRWHGLQ,RZD7HUPLQDO within the ten-day period, the STB’s decision becomes

binding on both parties. 49 U.S.C. § 10904(f)(2);.XOPHU

,QFRQVLGHULQJHDFKHOHPHQWRIWKHYDOXDWLRQRUGHUZH )GDW³,IWKH67%ILQGVWKDWDQRIIHUPHHWVFHUWDLQ

DUHPLQGIXOWKDWWKH>67%¶V@GHFLVLRQ³PXVWEHXSKHOGLI FULWHULDWKHUDLOURDGLVIRUFHGWRVHOOWKHOLQHWRWKHRIIHURU

EDVHGRQWKHUHFRUGEHIRUHLWWKH>67%¶V@GHFLVLRQLVQRW DFFRUGLQJ WR WKH WHUPV QHJRWLDWHG E\ WKH SDUWLHV RU ZKHQ

DUELWUDU\RUFDSULFLRXV´,OOLQRLV&HQW*XOI55&RY QHFHVVDU\WHUPVLPSRVHGE\WKH67%´2QFHWKHUDLOOLQH

,&&)GWK&LU:KLOHZHPD\ KDVEHHQDFTXLUHGWKHSXUFKDVHUPD\QRWGLVFRQWLQXHVHUYLFH

QRWVXEVWLWXWHRXUMXGJPHQWIRUWKDWRIWKHDJHQF\ZH IRU DW OHDVW WZR \HDUV   86& † I$ Nat’l

PXVW QHYHUWKHOHVV VDWLVI\ RXUVHOYHV WKDW WKH >67%@ Ass’n of Reversionary Prop. Owners, 158 F.3d at 138 n.4

FRQVLGHUHGDOOUHOHYDQWIDFWRUVDQGSURYLGHGDUHDVRQHG (noting that abandonment authorization in accordance with

H[SODQDWLRQIRULWVGHFLVLRQ the exemption procedures under § 10502 is available "when

,RZD7HUPLQDO)GDWFLWLQJ0RWRU9HKLFOH0IUV no local traffic has run on the line in at least two years").

$VV¶Q  86 DW   $SSO\LQJ WKLV QDUURZ VWDQGDUG RI %6WDWHPHQWRI)DFWV

UHYLHZZHILQGWKDWWKH67%GLGQRWDFWLQDQDUELWUDU\RU

FDSULFLRXVIDVKLRQE\UHIXVLQJWRFUHGLWDOORI59,¶VFRUULGRU 7KHVHFRQVROLGDWHGFDVHVLQYROYHDPLOHUDLOURDGOLQH

YDOXDWLRQHYLGHQFH$VWKH67%SRLQWVRXWLQLWVDUJXPHQWV UXQQLQJIURP<RXQJVWRZQ2KLRWR'DUOLQJWRQ3HQQV\OYDQLD

WRWKLV&RXUWWKH67%LVXQGHUDOLPLWHGVWDWXWRU\WLPHIUDPH ZLWK D FRQQHFWLQJ RQHPLOH VHJPHQW QHDU 1HJOH\ 2KLR

WKLUW\ GD\V LQ ZKLFK WR PDNH D GHWHUPLQDWLRQ RI WKH IDLU Without the authorization of the STB, 59,DFTXLUHGthe rail

PDUNHWYDOXHRIWKHOLQH7RPDNHDUHDVRQHGGHWHUPLQDWLRQ line in question from the former Youngstown and Southern

WKH 67% PXVW HVWDEOLVK JXLGHOLQHV IRU FRQVLGHULQJ DQG Railroad Company for $730,000 on November 8, 1996. See

FUHGLWLQJYDOXDWLRQHYLGHQFH,QWKLVFDVHZHEHOLHYHWKDWWKH R.R. Ventures, Inc. ± $EDQGRQPHQW ([HPSWLRQ ± Between

67%E\UHTXLULQJVLJQHGVDOHVFRQWUDFWVRUELQGLQJSXUFKDVH Youngstown, OH, and Darlington, PA, in Mahoning and

RIIHUVDVHYLGHQFHRIDFRUULGRUYDOXHIRUDOORUSDUWRIDOLQH Columbiana Counties, OH, and Beaver County, PA, 67%

KDVPDGHDUHDVRQHGDQGZRUNDEOHFKRLFH 'RFNHW1R$%6XE1R;:/DW 

6HUYLFH'DWH-DQUpon purchasing the line, RVI

entered into a management agreement with OLE, Ltd.

("OLE"), whose managing member was David L. Handel, the

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current president of RVI. Unbeknownst to the STB, RVI and a 20.6 acre (4.2 mile) easement to the Park District for

OLE, under the management agreement, expressed their $600,000, submitted by RVI initially in support of its

"intent to liquidate the property in whole or in part to assembled corridor valuation. While the STB did not explain

maximize the cash flow potential to both parties," why it had not included the Park District agreement in the

contemplating the complete removal of railroad track and ties, first valuation decision, it nonetheless stated that "RVI’s

which the agreement termed "debris." See R.R. Ventures, Inc. evidence sufficiently described the location of this land, and

 Abandonment Exemption  Between Youngstown, OH, and the signed sales contract was good evidence of the value of

Darlington, PA, in Mahoning and Columbiana Counties, OH, that real estate." The STB refused to credit any other

and Beaver County, PA, STB Docket No. AB-556 (Sub-No. evidence proffered by RVI in support of corridor valuation,

2X), 2000 WL 1801264, at *1 6HUYLFH'DWH'HF particularly an 11.7-mile aerial easement RVI had earlier

To that end, RVI promptly sold the future right to salvage the granted to Ohio Edison Company. RVI had included with its

line’s tracks and materials to another company. RVI also evidentiary submissions evidence of a land easement to First

immediately canceled the lease of the Ohio & Pennsylvania Energy Company covering the same tract, but the STB

Railroad Company ("OPRC"), the only operator authorized to concluded that including that easement in the valuation would

provide service on the line, thus terminating rail service for permit RVI to receive double compensation for the land. The

several shippers on the rail line, including Darlington Brick STB also refused to consider evidence submitted by RVI

and Clay Products Company ("Darlington Brick") and Insul pertaining to the sale of the four-acre parcel to the Park

Products, Inc. ("Insul"). R.R. Ventures, 2001 WL 41202, at District, concluding that RVI had failed to distinguish its

*1. location from the 20.6-acre easement to the Park District, and

easement proposals from three other entities. The STB

As a consequence, OPRC declared an embargo on concluded that RVI had showed only that the entities had

November 19, 1996, stating the cancellation of its lease as the obtained funding for trails, not that they had entered into an

cause. However, upon receiving complaints from Darlington agreement with RVI.

Brick and Insul, the STB’s Office of Compliance and

Enforcement ("OCE") investigated the cessation of rail Applying the proper burden of proof standard, the STB, in

service. Thereafter, the STB reached an agreement with the its January 7, 2000 decision, determined that RVI’s evidence

parties for service to be restored, and the embargo was was less authoritative in comparison to CCPA’s evidence.

canceled. RVI also agreed to seek belated authority from the The STB explained that it did not ordinarily accept

STB to acquire the line. However, on December 18, 1996, assembled-corridor valuation, absent executed sales contracts

about one week after service on the line was restored, a for the entire corridor. See Boston & Maine Corp. 

weather-related washout occurred that again prevented rail Abandonment  In Hartford & New Haven Counties, Conn.,

STB Docket No. AB-355 (Sub-No. 23), 1998 WL 348755, at

*3 (Service Date July 1, 1998). In its October 4, 2000

 decision, the STB further explained: "In setting terms and

³$Q HPEDUJR LV µDQ HPHUJHQF\ PHDVXUH SODFHG LQ HIIHFW EHFDXVH RI

conditions of a sale under section 10904, we cannot credit



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speculative evidence, but rely upon firm bids (from a

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purchaser) or signed contracts in establishing the value of an

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At the time the STB rendered its January 7, 2000 decision, service on the line. See R.R. Ventures, Inc.  Acquisition and

RVI and CCPA produced estimates of land value according Operation Exemption  Youngstown & S. Ry. Co., STB

to two methodologies. RVI contended that the highest and Finance Docket No. 33385, 1997 WL 392877, at *1 (Service

best value of the land was as a single non-rail corridor, with Date July 15, 1997).

a small number of purchasers obtaining easements or rights-

of-way over segments of the corridor. (J.A. at 1085-1119.) Thereafter, on January 3, 1997, RVI filed a notice of

CCPA proffered evidence of value according to the "across exemption invoking the class exemption provision at 49

the fence" ("AFT") methodology: dividing the tract into a C.F.R. 1150.31(a)(1) for retroactive authorization of its

large number of parcels, valuing each parcel as if sold to purchase of the rail line, stating that it had been unaware of

owners of adjoining parcels, and totaling the values of the the need to obtain the STB’s approval to acquire the line and

parcels. RVI’s assembled corridor methodology produced a that it had purchased the line "for the purpose of conducting

value of $1,472,930, while CCPA’s "AFT" methodology rail freight common carrier operations" on it.,QUHVSRQVH

estimated the land value at $450,000. &&3$ DQG WKH 2KLR 5DLO 'HYHORSPHQW &RPPLVVLRQ

³25'&´ILOHGSHWLWLRQVWRUHMHFWUHYRNHRUVWD\WKHQRWLFH

As between the two methodologies, the STB decided RIH[HPSWLRQFODLPLQJWKDW59,GLGQRWLQWHQGWRRSHUDWHWKH

CCPA’s approach was more appropriate. Specifically, the OLQHDQGWKDWLWKDGSUHYLRXVO\PDGHDUUDQJHPHQWVWRVFUDSWKH

STB rejected RVI’s assembled corridor methodology, OLQH,QDQRUGHUHQWHUHGRQ-DQXDU\WKH67%UHMHFWHG

explaining that "[u]nless there is a specific documented 59,¶V QRWLFH RI H[HPSWLRQ EHFDXVH 59, KDG QRW

interest expressed by a potential purchaser of an intact DFNQRZOHGJHG LWV FRPPRQ FDUULHU REOLJDWLRQV WR SURYLGH

corridor, we do not consider this to be an acceptable method VHUYLFHRQWKHOLQHDQGEHFDXVH&&3$KDGDOOHJHGWKDW59,

of valuation for [net liquidation value] purposes." Although ZRXOGQRWRSHUDWHRUDUUDQJHIRUDQRWKHUSDUW\WRRSHUDWHWKH

RVI proffered copies of purchase agreements from the Park OLQH 6HH R.R. Ventures, Inc.  Acquisition and Operation

District and Ohio Edison Company for trail and utility Exemption  Youngstown and S. Ry. Co., STB Finance

easements, the STB rejected RVI’s estimate of value as Docket No. 33336, 1997 WL 7537, at *1-2 (Service Date Jan.

insufficient because the agreements pertained to portions of 9, 1997).

the corridor, rather than the corridor as a whole. In contrast,

the STB accepted CCPA’s appraisal as "complete and Subsequently, the Ohio & Pennsylvania Railroad Company

adequately supported and its . . . values appropriately ("OPRC"), ORDC, CCPA, the North East Ohio Trade &

adjusted," describing the values stated in the appraisal as Economic Consortium, Mahoning County Commissioners,

"reasonable based on the comparable sales data presented." and other public agencies provided funding for the repairs to

Having accepted CCPA’s evidence, and subtracting $100,000 the line. However, when the Wintrow Construction

to represent an assignment by RVI for lease and interest Corporation ("Wintrow") attempted on January 31, 1997 to

income, the STB reached a land value of $350,000.

Thereafter, in its October 4, 2000 decision, the STB 

8QGHU  86& †  D SDUW\ WKDW LV QRW D UDLO FDUULHU PD\

revisited the land valuation. The STB decided to adjust the LQYRNH WKH SURFHGXUHV IRU FODVV H[HPSWLRQ XQGHU  &)5  

land value upward to include an executed sale agreement for  WR DFTXLUH DQ DFWLYH UDLO OLQH UDWKHU WKDQ ILOH D GHWDLOHG DSSOLFDWLRQ

XQGHU  &)5   

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obtain, through a general release, RVI’s permission to repair 559HQWXUHV:/DW FLWLQJ&KLFDJRDQG

the rail line in order to restore rail service, RVI rejected 1RUWK:HVWHUQ7UDQVS&R$EDQGRQPHQW,&&

Wintrow’s general release form and refused to permit the /DNH*HQHYD/LQHDII¶GVXEQRP&KLFDJRDQG

necessary repairs to be made. As a result, the ORDC and 1RUWK:HVWHUQ7UDQVS&RY8QLWHG6WDWHV)G

CCPA filed a declaratory action on February 5, 1997 to WK&LU

prevent RVI from interfering with the repairs. On the same

date, the STB’s OCE sent a letter to RVI giving it 20 days to As previously stated, the regulations place the burden of

refile for the requisite authority to acquire the rail line and proof on the offeror for all issues in dispute concerning the

admonishing it not to interfere with OPRC’s rail operations terms and conditions of the sale. 49 C.F.R. § 1152.27(h)(3).

in the interim. See R.R. Ventures, 1997 WL 392877, at *2. In its January 7, 2000 decision, the STB noted:

In its response on February 25, 1997, RVI claimed that it had

reached an agreement with the contractor hired to repair the Placing the burden of proof on the offeror is particularly

flood-damaged track, and that repairs would begin on appropriate in these proceedings because the offeror may

February 28, 1997 and would take about two months to withdraw its offer at any time prior to its acceptance of

complete. Id. RVI also indicated its intention to file for the terms and conditions that we establish pursuant to a

legal acquisition of the rail line within 30 days of its letter. Id. party’s request. The rail carrier, on the other hand, is

required to sell its line to the offeror at the price we set,

Given these assurances, the STB subsequently authorized even if the railroad views the price as too low.

RVI’s retention of the line. A verified notice of exemption

allowing RVI to acquire and operate the rail line was 559HQWXUHV 2000 WL 1125904, at *5. The STB explained

published on April 24, 1997. Notwithstanding the concerns how this burden affected its method of valuing rail lines as

of the ORDC and CCPA that "RVI has not demonstrated the follows:

remotest interest in undertaking the obligations and

responsibilities involved in an acquisition of an active line for The burden of proof standard requires that, absent

the purpose of conducting continuing rail freight common probative evidence supporting the offeror’s estimates, the

carrier obligations," the STB denied their petition for a rail carrier’s evidence is accepted. In areas of

declaratory order on July 15, 1997, as well as their petition to disagreement, the offeror must present more specific

reject or revoke the notice of exemption. To allay the evidence or analysis or provide more reliable and

concerns of the ORDC and CCPA, however, the STB verifiable documentation than that which is submitted by

required RVI to "submit biweekly reports to the OCE on the the carrier. Absent specific evidence supporting the

status of the lines’ restoration and to provide specific details offeror’s estimates and contradicting the rail carrier’s

of the cause of any delays in restoring service." Id. at *3. estimates, the fact that the burden of proof is on the

offeror requires that we accept the carrier’s estimates in

Thereafter, RVI filed reports infrequently, and rail service these forced sales proceedings.

was restored for only a short period of time in 1997. After

repairs funded by state and local agencies were made to the Id.

line, another washout occurred. After this washout, RVI

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intervenor’s argument regarding demand for an evidentiary refused to fund any repairs and did not cooperate with the

hearing because another party "did not assert this specific public agencies that sought to restore service, despite the

claim before us") (citing Ill. Bell Tel. v. FCC, 911 F.2d 776, repeated requests of local shippers and local and state

786 (D.C. Cir. 1990)). Accordingly, we DIILUPthe STB’s government officials to resume rail service. See R.R.

October 4, 2000 decision to the extent that it ordered RVI to Ventures, Inc.  Abandonment Exemption  Between

transfer its entire fee simple interest in the rail line as Youngstown, OH, and Darlington, PA, in Mahoning and

described in RVI’s abandonment petition. Columbiana Counties, OH, and Beaver County, PA, STB

Docket No. AB-556 (Sub-No. 1X), 1999 WL 23286, at *2

3. The STB’s determination of the land value of the line (Service Date Jan. 22, 1999). 6SHFLILFDOO\ ,QVXO PDGH D

was not unreasonable or arbitrary IRUPDO UHTXHVW RQ 'HFHPEHU   IROORZHG E\

'DUOLQJWRQ%ULFNRQ-DQXDU\IRUUDLOVHUYLFHWREH

When setting the terms and conditions of a sale of a rail UHVWRUHGWRWKHLUIDFLOLWLHV

line, the STB cannot set a price lower than the "fair market

value of the line." 49 U.S.C. § 10904(f)(1)(B). Pursuant to $W WKLV SRLQW 59, ILOHG D QRWLFH RI FODVV H[HPSWLRQ RQ

49 U.S.C. § 10907(b)(1), the STB is directed to set the -DQXDU\WRDEDQGRQWKHUDLOOLQHFODLPLQJWKDW³WKH

purchase price for the forced sale of a rail line at "not less OLQHLVQRWHFRQRPLFDOO\YLDEOH´DQGWKDW³LWVKRXOGEHDOORZHG

than the constitutional minimum value." The "constitutional WR DEDQGRQ DQG HLWKHU VDOYDJH LW RU SHUPLW RWKHU LQWHUHVWHG

minimum value" is defined as "not less than the net SDUWLHV WR DFTXLUH WKH OLQH WKURXJK WKH RIIHU RI ILQDQFLDO

liquidation value of such line or the going concern value of DVVLVWDQFHSURFHGXUHVXQGHU86&†DQG&)5

such line, whichever is greater." GS Roofing II, 262 F.3d at ´,GDW 2QWKHVDPHGDWHWKH235&DOVRILOHGD

774; see also &)5†KGHILQLQJ³IDLUPDUNHW QRWLFH RI FODVV H[HPSWLRQ XQGHU  &)5  WR

YDOXH´DV³FRQVWLWXWLRQDOPLQLPXPYDOXHZKLFKLVWKHJUHDWHU GLVFRQWLQXHVHUYLFHRYHUWKHUDLOOLQH+RZHYHUEHFDXVH59,

RIWKHQHWOLTXLGDWLRQYDOXHRIWKHOLQHRUWKHJRLQJFRQFHUQ DQG 235& LPSURSHUO\ LQYRNHG WKH FODVV H[HPSWLRQ

YDOXHRIWKHOLQH´7KH67%PXVWGHWHUPLQHWKHVDOHSULFH SURFHGXUHWKH67%LQDGHFLVLRQILOHGRQ-DQXDU\

³RQWKHEDVLVRIZKDWWKHVHOOHUZRXOGKDYHUHDOL]HGIURPWKH GHQLHGERWKUHTXHVWVZLWKRXWSUHMXGLFHWRDOORZWKHPWRUHILOH

VDOHRIWKHDVVHWVKDGWKHOLQHLQIDFWEHHQDEDQGRQHG´,RZD WKHLU UHVSHFWLYH SHWLWLRQV IRU  DEDQGRQPHQW DQG

7HUPLQDO  )G DW   ,Q WKH 67%¶V -DQXDU\   GLVFRQWLQXDQFH

GHFLVLRQVHWWLQJWKHLQLWLDOVDOHSULFHWKH67%H[SODLQHGLWV

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$V WKH 67% H[SODLQHG

FRQWLQXHG UDLO XVH WKH SURSHU YDOXDWLRQ VWDQGDUG LQ ,I WKH DEDQGRQPHQW RI WKH OLQH LV ZDUUDQWHG E\ LWV HFRQRPLFV

SURFHHGLQJVIRURIIHUVWRSXUFKDVHXQGHUVHFWLRQ WKLV FRXOG ZHOO EH DQ DFFHSWDEOH DSSURDFK IRU UHVROYLQJ WKH

LV WKH >QHW OLTXLGDWLRQ YDOXH@ RI WKH UDLO SURSHUWLHV IRU VHUYLFH LVVXHV VXUURXQGLQJ 59,¶V DFTXLVLWLRQ RI WKLV OLQH DQG

WKHLUKLJKHVWDQGEHVWQRQUDLOXVH>1HWOLTXLGDWLRQYDOXH@ FRXOG DFFRPPRGDWH DQ\ LQWHUHVW LQ FRQWLQXHG UDLO VHUYLFH RYHU

LQFOXGHVWKHYDOXHRIWKHUHDOHVWDWHSOXVWKH>QHWVDOYDJH WKH OLQH 7KH FODVV H[HPSWLRQ SURFHGXUH KRZHYHU GRHV QRW

YDOXH@RIWKHWUDFNDQGPDWHULDOV SURYLGH WKH LQIRUPDWLRQ WKDW WKH %RDUG QHHGV WR PDNH WKLV

GHWHUPLQDWLRQ EHFDXVH LW GRHV QRW SURYLGH IRU D SURMHFWLRQ RI WKH

ILQDQFLDO UHVXOWV RI IXWXUH RSHUDWLRQ RI WKH OLQH 7KLV LQIRUPDWLRQ

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2Q0D\59,VXEPLWWHGDQRWKHUDSSOLFDWLRQWRWKH County of Allegheny, 74 Pa. Cmwlth. 85, 90, 459 A.2d 1298,

67%IRUH[HPSWLRQIURPFHUWDLQUHJXODWLRQVSXUVXDQWWR 1300 (1983) ("Black’s Law Dictionary defines a fee simple

86& †  DQG IRU DXWKRULW\ WR DEDQGRQ WKH UDLO OLQH estate as ‘one in which the owner is entitled to the entire

SXUVXDQWWR86&†D,QLWVSHWLWLRQ59,VWDWHG property, with unconditional power of disposition during his

WKDWWKHOLQHKDGEHHQRXWRIVHUYLFHIRUWZR\HDUVGXHWRWKH life, and descending to his heirs and legal representatives

ZDVKRXW DQG DQ HPEDUJR  59,¶V SHWLWLRQ DOVR LQFOXGHG D upon his death intestate.’").

YHULILHG VWDWHPHQW RI 'DYLG +DQGHO 59,¶V SUHVLGHQW ZKR

VWDWHGWKDW59,¶VULJKWRIZD\H[WHQGHGIURPPLOHSRVWWR Moreover, contrary to RVI’s contention, there was no

PLOHSRVWFRQVLVWLQJRIDFUHVDQGWKDWLWVQHW unconstitutional taking in this case. See U.S. Const. amend

OLTXLGDWLRQYDOXHRIPLOOLRQZDVEDVHGXSRQDIXOOIHH V ("[N]or shall private property be taken for public use,

LQWHUHVWLQWKHSURSHUW\ without just compensation."); In re Chicago, Milwaukee, St.

Paul and Pacific Ry. Co., 799 F.2d 317, 324 (7th Cir. 1986).

&&3$ WKHQ UHOLHG XSRQ +DQGHO¶V GHVFULSWLRQ RI WKH As set forth in 49 U.S.C. § 10907(b)(1), Congress authorized

SURSHUW\DQGKLVYDOXDWLRQRIWKHIXOOIHHLQWHUHVWLQWKHUDLO the STB to force the sale of a railroad line at its

OLQHZKHQLWSUHSDUHGLWVHVWLPDWHRIWKHSXUFKDVHSULFHGXULQJ "constitutional minimum value" to "a financially responsible

WKH2)$SURFHVV2Q$XJXVW&&3$LQYRNLQJWKH person." GS Roofing II, 262 F.3d at 771.  7KDW LV ZKDW

2)$SURFHGXUHVVHWIRUWKLQ86&†DQG&)5 RFFXUUHGKHUH6HH8QLWHG6WDWHVY$FUHVRI/DQG

D UHTXHVWHG ILQDQFLDO GDWD DQG LQIRUPDWLRQ IURP 86QQRWLQJWKDWWKHFRQVWLWXWLRQDOPHDVXUH

59,FRQFHUQLQJDQHVWLPDWHRIWKHPLQLPXPSXUFKDVHSULFH RIMXVWFRPSHQVDWLRQLVZKDWDZLOOLQJEX\HUZRXOGSD\LQ

UHTXLUHG WR NHHS WKH OLQH LQ RSHUDWLRQ WKH HVWLPDWHG QHW FDVKWRDZLOOLQJVHOOHUTXRWLQJ8QLWHG6WDWHVY0LOOHU

OLTXLGDWLRQYDOXHRIWKHOLQHDQGGRFXPHQWDWLRQVKRZLQJWKDW 86

59,KDGPDUNHWDEOHWLWOHWRWKHODQGAlthough RVI provided

some of the information on August 10, 1999, it advised Finally, although it appears that the STB approved certain

CCPA to arrange for copying the valuation maps and deeds transactions by RVI with third parties after RVI filed its

for the line at RVI’s offices. However, when CCPA arranged abandonment petition, we note that these transactions are not

for its retained appraiser, Mr. John Rossi of Real Estate being challenged on appeal. Specifically, CCPA, as an

Appraisal Associates, to visit RVI’s business office, he was intervening party in these proceedings pursuant to Rule 15(d)

of the Federal Rules of Appellate Procedure, has not appealed

from the STB’s orders and has requested affirmance of its

decisions. Because CCPA has not challenged the STB’s

LV UHTXLUHG IRU WKH %RDUG WR PDNH DQ LQIRUPHG GHFLVLRQ RQ approval of RVI’s conveyance of certain property interests

ZKHWKHU WR DSSURYH WKH DEDQGRQPHQW RI WKLV OLQH RI UDLOURDG DQG associated with the rail line after RVI filed its abandonment

IRU RWKHU SDUWLHV ZKR PLJKW EH LQWHUHVWHG LQ SXUFKDVLQJ WKH OLQH petition, it is therefore unnecessary to remand for further

XQGHU VHFWLRQ  WR UHVWRUH VHUYLFH proceedings since CCPA is not seeking to acquire those

R.R. Ventures, Inc.  Abandonment Exemption  Between Youngstown, property interests not conveyed to it. See Platte River

OH, and Darlington, PA, in Mahoning and Columbiana Counties, OH, Whooping Crane Critical Habitat Maintenance Trust v.

and Beaver County, PA, STB Docket No. AB-556 (Sub-No. 1X), 1999 FERC, 962 F.2d 27, 37 n.4 (D.C.Cir.1992) (refusing to reach

WL 23286, at *2 (Service Date Jan. 22, 1999).

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Notwithstanding, RVI argues that it should not be required denied access by RVI to the relevant valuation maps and

to convey a fee simple interest in the rail line because the deeds.

STB in its January 7, 2000 decision only required it to

transfer "all property by quit claim deed." As RVI notes, a On September 2, 1999, the STB granted RVI’s petition for

"quit-claim deed transfers only those rights which a grantor exemption pursuant to 49 U.S.C. § 10502, stating that any

has at the time of the conveyance." Finomore v. Epstein, 18 party interested in purchasing the line for continued rail

Ohio App.3d 88, 89, 481 N.E.2d 1193, 1196 (Ohio App. service could submit an offer of financial assistance ("OFA"),

1984) (citing Jonke v. Rubin, 170 Ohio St. 41, 41, 162 N.E.2d pursuant to 49 U.S.C. § 10904 and 49 C.F.R. § 1152.27(c)(1),

116, 116 (1959)); Greek Catholic Congregation of Borough by September 13, 1999. See R.R. Ventures, Inc. 

of Olyphant v. Plummer, 338 Pa. 373, 377, 12 A.2d 435, 437 Abandonment Exemption  Between Youngstown, OH, and

(Pa. 1940). At the time of the conveyance in these cases, RVI Darlington, PA, in Mahoning and Columbiana Counties, OH,

was required to transfer a full fee interest in the property. and Beaver County, PA, STB Docket No. AB-556 (Sub-No.

Thus, the STB’s order directing RVI to transfer "all property 2X), 1999 WL 714565 (Service Date Sept. 3, 1999). In the

by quit-claim deed" was tantamount to ordering it to transfer absence of an OFA, the exemption became effective October

a fee simple interest in the property associated with the rail 3, 1999, allowing RVI to salvage track, ties, and other

line. railroad appurtenances, and to dispose of the right-of-way.

In addition, because CCPA acquired a fee simple interest in On September 3, 1999, one day after the STB granted

the rail line, RVI was required to transfer all its property RVI’s exemption petition, CCPA formally notified RVI and

interests associated with the rail line. Under Ohio law, a fee the STB that it was considering an OFA to purchase the line

simple is the highest right, title and interest that one can have for rail service. CCPA also petitioned the STB to toll the

in land; it is the full and absolute estate in all that can be period for submitting an OFA until 30 days after RVI had

granted. Masheter v. Diver, 20 Ohio St.2d 74, 78, 253 N.E.2d supplied all requested documents and information.

780, 782 (1969); see also 20 Ohio Jurisprudence 2d 237,

Estates, Section 8 ("An estate in fee simple is the entire

interest and property in the land."); Muirfield Ass’n, Inc. v.

Franklin County Bd. of Revision, 73 Ohio St.3d 710, 711, 654



6XEVHTXHQWO\ &&3$ DOVR VRXJKW WR DFTXLUH D UDLOURDG OLQH EHWZHHQ

N.E.2d 110, 111 (1995) (defining "fee simple" as "[a]bsolute 6WUXWKHUV DQG <RXQJVWRZQ2KLR IURP WKH EDQNUXSWF\ HVWDWH RI 3LWWVEXUJK

/DNH (ULH 3URSHUWLHV ,QF WR DOORZ &HQWUDO &ROXPELDQD 3HQQV\OYDQLD

ownership unencumbered by any other interest or estate; 5DLOZD\ ,QF ³&&35´ ³WR RSHUDWH IURP 'DUOLQJWRQ WR WKH SRLQW RI

subject only to the limitations of eminent domain, escheat, LQWHUFKDQJH ZLWK &6; 7UDQVSRUWDWLRQ ,QF DW PLOHSRVW  DW RU QHDU

police power, and taxation") (quoting the American Institute 6WUXWKHUV DQG ZLWK 1RUIRON 6RXWKHUQ 5DLOZD\ &RPSDQ\ DW PLOHSRVW 

of Real Estate Appraiser’s Dictionary of Real Estate DW +DVHOWRQ <DUG´ Columbiana County Port Auth.  Acquisition

Appraisal (1984)). Equally, under Pennsylvania law, "[a] fee Exemption  Certain Rail Assets of Pittsburgh & Lake Erie Props., Inc.,

simple absolute is a form of ownership in which a party has in Mahoning County, OH, STB Finance Docket No. 33880, 2000 WL

821476, at *1 (Service Date June 26, 2000). :H QRWH WKDW <RXQJVWRZQ

unlimited power to sell, transfer, alienate, or bequeath the 6RXWKHUQ 5DLOURDG &RPSDQ\ ZKLFK RZQHG WKH UDLO OLQH DW LVVXH LQ WKH

property in any lawful manner." In re Estate of Rider, 711 SUHVHQW FDVHV EHIRUH LWV SXUFKDVH E\ 59, ZDV D ZKROO\ RZQHG VXEVLGLDU\

A.2d 1018, 1021 (Pa. Super. 1998); see also Captline v. RI WKH 0RQWRXU 5DLOURDG &RPSDQ\ ZKLFK LQ WXUQ ZDV D ZKROO\ RZQHG

VXEVLGLDU\ RI 3LWWVEXUJK /DNH (ULH 3URSHUWLHV ,QF

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6SHFLILFDOO\&&3$UHTXHVWHGWKDW59,SURYLGHLQIRUPDWLRQ over the matter, any transactions affecting the property

DERXWLWVHVWLPDWHGPLQLPXPSXUFKDVHSULFHWRFRQWLQXHUDLO interests associated with the rail line entered into by a rail

RSHUDWLRQV LWV HVWLPDWHG QHW OLTXLGDWLRQ YDOXH RI WKH OLQH owner after filing an abandonment petition are invalid

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DOORZLQJ&&3$WRILOHDQ2)$ZLWKLQWKLUW\GD\VRI59,¶V GHFLVLRQWRWKHH[WHQWWKDWLWordered RVI to transfer its

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UHTXLUHGE\&)5D´6HHR.R. Ventures, Inc.  abandonment. In this case, RVI, in its abandonment petition

Abandonment Exemption  Between Youngstown, OH, and dated May 19, 1999, submitted the verified statement of its

Darlington, PA, in Mahoning and Columbiana Counties, OH, president, David Handel, stating that RVI sought to abandon

and Beaver County, PA, STB Docket No. AB-556 (Sub-No. the rail line comprising 302.016 acres from milepost 0.0 to

2X), 1999 WL 715271, at *2 (Service Date Sept. 10, 1999). milepost 35.7, including "a short spur line and several

The STB also extended the effective date of RVI’s exemption buildings referred to generically as the Negley Shops." RVI

until forty days after RVI had provided the information. Id. placed the fair market value of the full fee interest "for the

at *3. 302.016 acres of ground comprising the RVI right of way" at

$1,162,555. When CCPA thereafter inquired about the

Shortly thereafter, by a letter dated September 20, 1999, property to be sold, RVI confirmed that "an ample description

CCPA’s attorney advised the STB and RVI that CCPA of the line in question and the acreage involved in this rail

expected to acquire a full fee interest held by RVI as well as line" was provided in its abandonment petition. (J.A. at 860,

"all of the interests encompassed in RVI’s estimate of 1681.) RVI also advised both the STB and CCPA in a letter

purchase price to keep the line in operation." (J.A. at 545.) dated September 21, 1999 that "[s]hould CCPA determine

RVI’s counsel responded the following day, stating that that it is necessary to acquire a fee interest in the right of way

"should CCPA determine that it is necessary to acquire a fee in order to operate the rail line under 49 C.F.R. § 1152.27,

interest in the right of way in order to operate the rail line RVI will convey such an interest . . . pursuant to the

under 49 C.F.R. § 1152.27, RVI will convey such an requirements of the STB’s OFA regulations." (J.A. at 546.)

interest." (J.A. at 546.) Based upon RVI’s representations in its abandonment

petition, it was then CCPA’s prerogative, as a prospective

In a letter filed on October 12, 1999, CCPA informed the OFA purchaser, to determine how much of the rail line it

STB that RVI had provided sufficient information for CCPA wished to acquire. In this case, CCPA sought to acquire a fee

to continue with its OFA and that it would file an OFA on or simple interest in the entire rail line as described in RVI’s

before November 8, 1999, thirty days after receipt of the abandonment petition. Therefore, CCPA was entitled to

information from RVI. See R.R. Ventures, Inc.  acquire the entire fee simple interest in the property

Abandonment Exemption  Between Youngstown, OH, and comprising the rail line that was the subject of RVI’s

Darlington, PA, in Mahoning and Columbiana Counties, OH, abandonment petition.

and Beaver County, PA, STB Docket No. AB-556 (Sub-No.

2X), 1999 WL 1030076, at *1 (Service Date Nov. 12, 1999).

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these reasons, we conclude that the STB’s interpretation is On November 8, 1999, CCPA filed a timely OFA to purchase

unreasonable. the line for $419,360. This offer consisted of $350,000 for

the land and $69,360 for the track and materials. CCPA

Under § 10904(f)(1)(B), the STB’s task is not to determine compared its offer with RVI’s stated net liquidation value of

the extent of the property associated with the rail line that is $1,607,555 ($1,162,555 for the real estate and $445,000 for

being transferred, but to set the terms of the sale in the event track salvage), offering explanations for the disparity in the

that the parties cannot come to an agreement about these values, as required by 49 C.F.R. § 1152.27(c)(ii)(C ). Id. In

terms. As explained, the determination about what property particular, CCPA’s estimate of a total track value of $69,360

is being conveyed in the sale of a rail line is made by the was based upon the cost of disposing of approximately

parties to the transaction. Pursuant to the abandonment and 125,214 bad cross ties, roughly 99% of the cross ties on the

OFA provisions of the ICCTA, the abandoning rail line owner line. Using RVI’s own estimate of tie disposal costs, CCPA

identifies the property that is being abandoned in its reduced RVI’s estimate by $375,642. Id. at *2.

abandonment petition, while the prospective OFA purchaser

submits an offer to buy the rail line being abandoned, either In a decision on November 12, 1999, the STB found CCPA

in whole or part. None of this requires the STB to determine to be "financially responsible" pursuant to 49 U.S.C.

how much of the rail line is being acquired; the parties do § 10904(d)(1). Id. The STB therefore postponed, pursuant to

that. However, if the parties cannot come to an agreement 49 U.S.C. § 10904(d)(2), the effective date of the exemption

about the terms of the sale, the STB has the authority under § authorizing RVI’s abandonment of the line during the

10904(f)(1)(B) to set the terms and force the sale of a railroad pendency of the OFA process. Id. The STB informed RVI

line at its constitutional minimum value. and CCPA that if they were unable to agree on a purchase

price for the line, then either party could request the STB, on

Reading the ICCTA as a whole, we hold that once a rail or before December 8, 1999, to set the terms and conditions

line owner files a petition seeking authority to abandon a rail of the sale pursuant to 49 U.S.C. § 10904(e). Id.

line, a qualified OFA purchaser is entitled to determine

whether to purchase the rail line, as described in the By December 8, 1999, CCPA and RVI were unable to

abandonment petition, in whole or part. Therefore, a rail agree on the amount to be paid for the rail line. Thus,

owner seeking authority to abandon a rail line is not permitted exercising its statutory right under § 10904(f)(1), CCPA filed

to reduce or diminish the property associated with the rail its request on December 8, 1999 for the Board to establish the

line, as identified in the abandonment petition, until the OFA terms of the sale. CCPA requested a purchase price of

process is concluded. Once a qualified OFA buyer has $441,700, consisting of $350,000 for the land and $91,705.67

offered to purchase the rail line, as described in the for track materials. See R.R. Ventures, Inc.  Abandonment

abandonment petition, postponement of the abandonment Exemption  Between Youngstown, OH, and Darlington, PA,

petition remains in effect until the line owner and prospective in Mahoning and Columbiana Counties, OH, and Beaver

OFA buyer have come to an agreement on the terms of the County, PA, STB Docket No. AB-556 (Sub-No. 2X), 2000

sale or until the STB sets the terms of the sale upon the WL 1125904, at *1 (Service Date Jan. 7, 2000). CCPA also

request of either party. 49 U.S.C. § 10904(d)(2)-(f). As a requested that the STB clarify the property interests CCPA

consequence, until such time that the STB loses jurisdiction would receive in acquiring the line. CCPA specifically asked

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the STB to require RVI to "convey to CCPA a full fee title possibility of interference with future rail service as a result

interest in the land comprising the right-of-way, except in any of conflicts between the purchaser of the rail line and parties

instance where, prior to the institution of this OFA perhaps holding subsurface, aerial or easement rights acquired

proceeding, RVI did not possess such an interest in the right- after the abandoning rail carrier filed its petition seeking the

of-way." In addition, CCPA advised the STB that it had STB’s authority to abandon the line.

recently discovered that RVI, after being advised of CCPA’s

OFA submission, had entered into a series of transactions to Interpreting § 10904(f)(1)(B) as part of a symmetrical and

reduce the size and value of the property. Specifically, CCPA coherent regulatory scheme, we therefore conclude that the

sought invalidation of the November 5, 1999 Grade Separated STB erred in construing the statutory provision as implying

Crossing Settlement Agreement ("GSCSA") that RVI had a "rebuttable presumption" under which an OFA purchaser is

entered into with Boardman Township, purportedly extending entitled to purchase all the property interests associated with

to RVI’s successors in interest, requiring the construction of a rail line subject to an abandonment petition unless the

an overpass or underpass at a crossing between the railway abandoning rail line owner shows that effective rail service

and a highway as a precondition to restoration of rail service. can be provided with less than the entire rail line. There are

Id. at * 2. CCPA also challenged other transactions entered several problems with the STB’s interpretation. First, there

into by RVI without the STB’s authorization in violation of is no apparent textual support in the statutory provisions or

the OFA procedures that reduced the value of the right-of- the regulations governing the abandonment and OFA process

way, including: (1) the sale of utility crossing easements to for implying a "rebuttable presumption." But more important,

First Energy Corporation (Ohio Edison Company) for by reading a rebuttable presumption into the statute, the STB

$893,000, allowing for permanent aerial easements along and shifts the burden of proof to the abandoning rail line owner,

across the property; (2) the assignment to Venture Properties which is contrary to its own regulation that states that "the

of Boardman, Inc. ("VPB") of all right, title, and interest to offeror has the burden of proof as to all issues in dispute." 49

income, proceeds, accounts receivable, royalties, and other C.F.R. 1152.27(h)(3). As a practical matter, this may lead to

payments arising from third-party agreements which are intractable problems in consummating the sale of rail lines, as

attributable to the line; (3) the sale of a 4.012-acre segment to the present cases exemplify, defeating the purpose of having

Boardman Township Park District for $140,000; and (4) a an expedited abandonment process. Specifically, the STB’s

contingent agreement for the sale of approximately 20.6 acres construal of the statute as implying a rebuttable presumption

of the right-of-way for a 4.2 mile bicycle trail. Id. at * 4. creates the prospect of protracted abandonment proceedings

as the parties argue about what property associated with the

rail line is or is not necessary for effective rail service. The

STB’s interpretation is also problematic because it raises

questions about applying the statute in a way that is not

 arbitrary or capricious. As argued by RVI in these cases, the

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effective rail service appears arbitrary because it does not

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from a practical perspective since a prospective OFA buyer 59,UHSOLHGWR&&3$¶VUHTXHVWWRVHWWKHWHUPVRIWKHVDOH

has to act quickly, examining and evaluating pertinent data RQ'HFHPEHUcontending that the STB should order

about the condition of the line, its traffic and revenue before it to convey no more than the minimum property interest

submitting an OFA, which is due within ten days of the necessary for the provision of rail operations, which it defined

decision of the STB granting a petition for abandonment or as the track, related track appurtenances and a surface

exemption. 49 U.S.C. § 10904(c); 49 C.F.R. easement for rail purposes. RVI suggested that a sufficient

§ 1152.27(c)(1)(i)(B). Thus, to ensure the efficacious interest would consist of surface rights enabling the purchaser

valuation of a rail line, it is essential that the property interests to use the line for rail purposes, "conveyed by means of an

associated with the rail line remain stable. easement, right of way agreement or quit claim deed subject

to various reservations or reversionary interests." RVI further

Maintenance of the status quo upon the filing of an asked the STB not to set aside its third-party transactions

abandonment petition also promotes the practical goal of pertaining to the line, contending that it was not obligated to

properly administering the statute since the STB is obligated inform CCPA of those transactions, since they would not

to make certain decisions within a highly constrained time affect CCPA’s use of the right-of-way for rail services.

frame so as to advance the goal of continuous rail service. Despite the fact that RVI had valued the entire line at $1.6

Specifically, it accords with the purpose of the forced-sale million in its abandonment petition, RVI also challenged

provision set forth in 49 U.S.C. § 10904, which is to promote CCPA’s requested purchase price, claiming that the limited

the continuation of viable rail service, not simply the property interest in the rail line that it was prepared to sell to

maintenance of the rail line itself. See Hayfield, 467 U.S. at CCPA was now worth $2,261,490, almost three times as

630 (noting that the present § 10904 "represents a much as RVI paid for the rail line when it purchased it on

continuation of Congress’ efforts to accommodate the November 8, 1996. Specifically, RVI disputed CCPA’s

conflicting interests of railroads that desire to unburden valuation method, offering its valuation of the surface rights

themselves quickly of unprofitable lines and shippers that are in the line as an assembled corridor to be worth $1,472,930

dependent upon continued rail service"); Consol. Rail Corp, and valuing the track materials at $788,560.

29 F.3d at 712. Accordingly, the objective of continuing

viable rail service in behalf of interstate commerce in this 1. The STB’s January 7, 2000 decision setting the

country, as well as commerce throughout the continent, is terms and conditions of the sale

better achieved by not permitting the transfer of property

interests associated with the rail line after the filing of the The STB issued its decision setting the terms and

abandonment petition. It also protects the integrity of the conditions for the sale of the rail line on January 7, 2000.

OFA process by ensuring transparency. Ultimately, it Explaining that the offeror in a forced sale bore the burden of

produces finality and certainty in the OFA process, leading to proof, the STB stated that it would accept the seller’s (RVI)

the expeditious acquisition of a rail line and eliminating the price estimates unless the offeror (CCPA) "present[s] more

specific evidence or analysis or provide[s] more reliable and

verifiable documentation." Id. at *5. Adhering to this

 framework, the STB accepted RVI’s track value of $788,560,

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reach a net salvage value for track and materials of $730,560. sale, however, the STB cannot place any burden on the

Id. at *6. The STB rejected, however, RVI’s valuation of the offeree (i.e., the abandoning rail owner). See 49 C.F.R.

land as an assembled corridor. The STB explained: §1152.27(h)(3) ("The offeror has the burden of proof as to all

issues in dispute.")

Unless there is a specific documented interest expressed

by a potential purchaser of an intact corridor, we do not In short, once the owner of a rail line submits a petition

consider this to be an acceptable method of valuation for seeking the STB’s authority to abandon the line, it must allow

[net liquidation value] purposes. The highest and best a prospective OFA purchaser the opportunity to determine

non-rail use is to sell parcels to adjoining landowners or how much of the line to acquire, as the line is described in the

other interested parties. See Boston and Maine Corp.  abandonment petition. Thus, at the point of filing the

Abandonment  In Hartford and New Haven Counties, abandonment petition, the abandoning rail line owner cannot

CT, STB Docket No. AB-32 (Sub-No. 83), et al., slip op. reduce or diminish the rail line or the nature of the property

at 4 (STB served July 1, 1998) [1998 WL 348755, at *3]. interests associated with the line. Because a rail line owner

is subject to the STB’s jurisdiction until such time that the

Id. at *6. The STB summarized RVI’s evidence for valuing line has been properly abandoned or sold, it therefore must

the land as an assembled corridor as amounting to two maintain the status quo with respect to its property interests

appraisals and copies of purchase agreements for trail and in the rail line as described in its abandonment petition.

utility easements, as well as expressions of interest to buy

some sections of the line, "but no firm offers to purchase the The primary reason for maintaining the status quo with

entire right-of-way, much less an executed sales contract." Id. respect to the property interests associated with the rail line as

Absent an executed sales contract or firm purchase offer for described in the abandonment petition is to allow a

an assembled corridor, the STB concluded that RVI could not prospective OFA buyer sufficient opportunity to assess

demonstrate that an assembled corridor was the "highest and whether the acquisition of the line is economically viable and

best use" of the line. Id. to determine what valuation to place on the rail line that it

seeks to acquire. In this respect, it is evident that a rail line

In contrast, the STB accepted CCPA’s "across-the fence" embraces more than just the track necessary for the provision

("ATF") valuation methodology, finding it "complete and of rail service. See Iowa Terminal, 853 F.2d at 965 (rejecting

the abandoning railroad’s attempt to limit the transfer of land

to two, rather than ten, acres, even though eight acres of land

had been leased for nonrail purposes for several years, since

"[t]he purpose of the statute empowering the [STB] to

mandate a sale is to keep viable lines in operation"); see also

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(noting that a "‘railroad line’ is not merely the service being

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provided, but the physical properties and interests belonging

to the debtor that constitute the line"). Holding the status quo

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which a prospective OFA buyer may offer to buy the line that adequately supported." Id. at *6. The STB also accepted

is the subject of an abandonment application"). )XUWKHU CCPA’s reduction in the value of the land by $100,000 due to

H[SHGLWLQJ WKH DEDQGRQPHQW SURFHHGLQJV LV WKH UHJXODWLRQ RVI’s assignment of lease and interest income to a third

VKRUWHQLQJWKHWLPHIRUILOLQJDQ2)$WRWHQGD\V  6HH party. Accordingly, the STB valued the land for the entire

&)5E:KHQDQ2)$LVPDGHE\DILQDQFLDOO\ line at $350,000, added in $730,560 for track and materials,

UHVSRQVLEOHSDUW\³UHJDUGLQJWKDWSDUWRIWKHUDLOURDGOLQHWREH and set a purchase price of $1,080,560.

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OLQHLVWKHQSRVWSRQHGXQWLOWKHWHUPVDQGFRQGLWLRQVRIWKH In addition to setting these terms and conditions for the

VDOHDUHHVWDEOLVKHG86&†G purchase of the line, the STB also addressed RVI’s third-party

transactions. Concerning the Grade Separated Crossing

Thus, while a railroad may "abandon any part of its railroad Settlement Agreement ("GSCSA") between RVI and

lines" under 49 U.S.C. § 10903(a)(1)(A), the STB is Boardman Township, the STB acknowledged that while it

permitted to authorize a prospective buyer under the OFA favored privately negotiated agreements in general, it would

provisions to purchase "that part of the railroad line to be deem void as against public policy any agreement imposing

abandoned" under 49 U.S.C. § 10904(d). The line owner can restrictions unreasonably interfering with common carrier

seek authority to abandon all or a part of its rail line, but if it obligations, citing United States v. Baltimore & Ohio R.R.

does so, then, pursuant to § 10904(f)(1)(B), a qualified OFA Co., 333 U.S. 169, 177-78 (1948) for the proposition "that

purchaser is entitled to determine how much of the line it parties may not enter into trackage rights agreements that

wishes to acquire. Once the offeror seeks to purchase the abrogate rights and responsibilities under the statutory

entire rail line or a portion thereof as described in the provisions of the Interstate Commerce Act." Id. at *2. CCPA

abandonment petition, 49 U.S.C. § 10904(c), the STB is then opposed the GSCSA on the grounds that it created a condition

statutorily obligated to render a decision setting price and precedent to reestablishment of rail service and obliged

other sale terms as to what the offeror seeks to buy, within CCPA (or RVI’s successor in interest) to undertake extremely

thirty days of a request to set conditions. 49 U.S.C. costly construction projects to build the projected overpass or

§ 10904(f)(1)(A). Under this statutory provision, then, it underpass. According to CCPA, enforcement of the GSCSA

necessarily follows that neither the abandoning rail carrier nor would cause it to forego its acquisition of the rail line, since

the STB can alter or amend what the OFA buyer has offered CCPA estimated that the cost of one overpass or underpass

to buy; rather, the STB can only set the terms on what the would likely exceed the net liquidation value of the entire rail

offeror has proposed to purchase. In setting the terms of the line. As a result, the STB found that the terms of the GSCSA



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imposing obligations on parties other than RVI and Boardman Kulmer, 236 F.3d at 1257.

Township and requiring construction of the grade separated

crossing as a precondition to resuming rail operations Reading the statutory and regulatory scheme as a whole, we

unreasonably interfered with common carrier operations and discern a clear symmetry between the abandonment and OFA

the OFA process. Id. Because the STB also found these provisions of the ICCTA. While a line owner may "abandon

terms to "circumvent [its] statutory authority to set the terms any part of its railroad lines," it cannot do so without the

and conditions of the sale under 49 U.S.C. [§] 10904(f)(1)," STB’s approval. 49 U.S.C. § 10903(a)(1)(A); GS Roofing I,

it thus concluded that these terms were unenforceable as 143 F.3d at 391. Significantly, when the owner of a rail line

contrary to public policy. Id. seeks to abandon a line, it must "identify each railroad line for

which the rail carrier plans to file an application to abandon."

Although the STB voided the GSCSA, it decided not to set 49 U.S.C. § 10903(c)(2)(B). Under 49 C.F.R. § 1152.22, an

aside the other transactions between RVI and other third owner seeking to abandon a rail line must set forth the

parties, which CCPA had challenged on the grounds that they following information in its abandonment application:

diminished the value of the line. As for the sale of utility

crossing easements to First Energy Corporation (Ohio Edison [a d]etailed map of the subject line on a sheet not larger

Company), the transfer of all rights to Venture Properties of than 8x10 ½ inches, drawn to scale, and with the scale

Boardman, Inc. ("VPB") arising from third-party agreements shown thereon. The map must show, in clear relief, the

attributable to the line, the sale of a 4.012-acre segment to the exact location of the rail line to be abandoned or over

Park District, and the contingent sale of about 20.6 acres of which service is to be discontinued and its relation to

the right-of-way for a 4.2 mile bicycle trail, the STB other rail lines in the area, highways, water routes, and

concluded that they did not interfere with rail operations, but population centers.

would be factored into its calculation of the line’s value. Id.

at * 4-5. In particular, the STB noted that the sale of 4.012 49 C.F.R. § 1152.22(a)(4). The ICCTA also directs that a rail

acres to the Park District was explicitly conditioned on the carrier seeking authorization to abandon a rail line under 49

continuation of rail service on the line. U.S.C. § 10903 must promptly provide a party considering an

OFA with a report on the physical condition of "that part of

The STB instructed CCPA to accept or reject the terms in the railroad line involved in the proposed abandonment," as

writing within ten days, ordered RVI and CCPA to close on well as other information required to determine the amount of

the deal within ninety days, and required RVI to convey "all financial assistance needed "to continue rail transportation

property by quitclaim deed." The STB further stated that if over that part of the railroad line" and an estimate of the

CCPA withdrew from the sale or failed to accept by timely minimum purchase price required "to keep the line or a

written notification, then it would issue, within twenty days, portion of the line in operation." 49 U.S.C. § 10904(b). An

a decision authorizing abandonment. RVI, Boardman OFA purchaser then has four months after the abandonment

Township, and the Boardman Township Park District have petition has been filed to "offer to subsidize or purchase the

filed petitions with this Court for review of the STB’s railroad line that is the subject of such application." 49 U.S.C.

January 7, 2000 decision. § 10904(c); see Kulmer, 236 F.3d at 1256 (noting that "[t]he

OFA provisions create a four-month waiting period" during

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(holding that city could condemn a tract of land for public 2. The STB’s March 3, 2000 decision that CCPA

use, such as for a street, but could not take property to sell it accepted the terms and conditions of the sale

at a profit and pay for the improvement), aff’d, 281 U.S. 439

(1930). Following the STB’s January 7, 2000 decision, CCPA sent

a letter dated January 12, 2000, which was received by the

The STB disagrees with RVI’s construction of 49 U.S.C. STB on January 14, 2000, stating that it "hereby accepts the

§ 10904(f)(1)(B), arguing that the language on which RVI terms and conditions established by the Board in its decision

focuses  "all facilities on the line or portion necessary to served on January 7, 2000 for acquisition of Railroad

provide effective transportation services"  does not pertain Ventures’ 35.7 mile line of railroad extending from milepost

to how much of the rail line a line owner can choose to 0.0 at Youngstown, OH to milepost 35.7 at Darlington, PA,

transfer, but instead concerns the extent of the line an OFA and a connecting one mile line segment near Negley, OH."

purchaser may choose to buy. If the purchaser views less CCPA added:

than the entire amount of property as sufficient for rail

operations, then the purchaser may offer to purchase only that [CCPA] does so on the understanding, (1) that it will be

amount. See, e.g., Iowa Terminal, 853 F.2d at 968 receiving a fee simple estate in the subject property free

(describing purchaser’s offer for a 10.4-mile segment of a and clear of any reservations, liens, encumbrances,

26.1-mile line). If, however, an offeror, such as CCPA, licenses, leases, easements or restrictions except those

wishes to obtain all the property described in the which were in existence prior to November 8, 1999, and

abandonment petition, the STB argues that it is reasonable to considered by Mr. Rossi in the appraisal which was

presume that the entire amount is necessary for effective rail adopted by the Board, and (2), that taxes on the subject

services. property will be apportioned as between the parties as of

the date of settlement.

Although the STB’s construction of § 10904 is entitled to

deference, courts ultimately have the responsibility for (J.A. at 1211.) CCPA also sent the same letter to RVI on

interpreting federal statutes. Crounse Corp., 781 F.2d at January 12, 2000. After receiving this letter, RVI wrote to the

1183. As pointed out by the Tenth Circuit in Kulmer: STB on January 18, 2000, objecting that CCPA’s letter did

not constitute a valid acceptance of the STB’s sale terms. On

"In determining whether Congress has specifically January 20, 2000, RVI followed this letter with a petition to

addressed the question at issue, a reviewing court should the STB to vacate the decisions postponing the effective date

not confine itself to examining a particular statutory of the abandonment authority. RVI contended that by

provision in isolation." FDA v. Brown & Williamson accepting the STB’s terms "on the understanding" that it

Tobacco Corp., 529 U.S. 120, 130-132, 120 S. Ct. 1291, would receive an unencumbered fee simple estate, CCPA

1300, 146 L. Ed.2d 121 (2000). Rather, a court must sought to alter in a material way the terms set by the STB,

read the relevant provisions in context and, insofar as which had ordered conveyance pursuant to a quitclaim deed,

possible, "interpret the statute ‘as a symmetrical and without requiring RVI to make any warranty regarding the

coherent regulatory scheme.’" Id., 529 U.S. at 132-134, title it possessed. RVI also argued that CCPA’s acceptance

120 S. Ct. at 1301 (quoting Gustafson v. Alloyd. Co., 513 was "conditional," not "absolute." Relying upon principles of

U.S. 561, 569, 115 S. Ct. 1061, 131 L.Ed.2d 1 (1995)).

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contract law, RVI urged the STB to view CCPA’s letter as a 49 U.S.C. § 10904(f)(1)(B). In its October 4, 2000 decision,

rejection of the terms set forth in the decision of January 7, the STB interpreted the parenthetical language as follows:

2000 and to treat the letter as the submission of a counteroffer

by CCPA. it serves merely to clarify that an offeror need not

purchase the entire property slated for abandonment, but

On March 3, 2000, the STB issued a decision rejecting can opt to acquire less than the full length of the line

RVI’s arguments regarding CCPA’s acceptance of the terms where the offeror wishes to provide for continued rail

set forth in the January 7, 2000 decision. See R.R. Ventures, service on only a portion of the line.

Inc.  Abandonment Exemption  Between Youngstown, OH,

and Darlington, PA, in Mahoning and Columbiana Counties, R.R. Ventures, 2000 WL 1470451, at *6. In rejecting RVI’s

OH, and Beaver County, PA, STB Docket No. AB-556 (Sub- proposed interpretation of § 10904(f)(1)(B), the STB

No. 2X), 2000 WL 246367 (Service Date Mar. 3, 2000). The articulated a presumption, rebuttable by the line owner, that

STB viewed CCPA’s letter dated January 12, 2000 as "a an OFA purchaser would need all the property interests

valid acceptance" of the sale terms, noting that CCPA associated with the rail line in order to provide effective

followed RVI’s initial objection with another letter transportation operations. Applying this rebuttable

"unequivocally" reiterating its acceptance. The STB presumption, the STB decided that RVI had failed to show

described CCPA’s second letter as follows: that CCPA could provide effective rail services on less than

the entire rail line.

By letter filed on January 19, 2000, CCPA states that it

has accepted the terms and conditions of the January 7 In opposition to the STB’s interpretation, RVI construes 49

decision and explains that, given the history of its U.S.C. § 10904(f)(1)(B) as Congressional recognition that an

dealings with RVI, the additional language in its owner need not transfer all property comprising the line, and

acceptance letter indicating its understanding of the as a rejection of the STB’s plenary power to force conveyance

transaction was prudent and necessary. of all property interests, particularly those unrelated to rail

operations. RVI explains that Congress recognized that some

Id. at *2. The STB then ordered RVI to convey by quitclaim of the property included in a rail line abandonment petition

deed "all of its property interests, as discussed in this might be necessary for rail operations, but some would not.

decision, in its 35.7-mile line of railroad extending from Further, according to RVI, the Fifth Amendment limits the

milepost 0.0 at Youngstown, OH, to milepost 35.7 at STB’s authority to force the sale of property for public

Darlington, PA, and a connecting 1-mile line segment near purposes. See Chicago & N.W. Transp. Co. v. United States,

Negley, OH" provided that CCPA tendered payment on or 678 F.2d 665, 668 (7th Cir. 1982) (suggesting that the price

before April 6, 2000. Id. at *4. The STB also admonished set under the OFA proceeding must satisfy "just

RVI that it should not "unilaterally diminish the assets or their compensation" principles of the Fifth Amendment). RVI

argues that government agencies, such as the STB, can only

require a transfer of the quantity of property or degree of

interest necessary to accomplish the public purpose. Cf. City

of Cincinnati v. Vester, 33 F.2d 242, 245 (6th Cir. 1929)

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SUHVHUYLQJUDLOVHUYLFHZKHQHYHUSRVVLEOHIRUWKHEHQHILWRI value." Id. RVI has filed a petition with this Court to review

VKLSSHUVDQGWKHJHQHUDOSXEOLFcomporting with the need to the STB’s March 3, 2000 decision.

sustain "DIXQFWLRQLQJLQWHUVWDWHUDLOURDGV\VWHP´ 5HGPRQG

,VVDTXDK)GDW%\QRWUHTXLULQJDFFHSWDQFHRQ  7KH67%¶V2FWREHUGHFLVLRQFRQYH\LQJWKH

WKHSDUWRIDTXDOLILHG2)$SXUFKDVHU&RQJUHVVPDGHFOHDU UDLOOLQHWR&&3$

WKDWWKHRYHUULGLQJREMHFWLYHZDVWRSUHVHUYHUDLOVHUYLFHIRU

VKLSSHUVRYHUDOLQHWKDWZRXOGRWKHUZLVHEHDEDQGRQHG &&3$ QRWLILHG WKH 67% RQ 0DUFK   that it was

prepared to tender payment to RVI, but that it had discovered

7KXV LW LV XQQHFHVVDU\ IRU DQ 2)$ SXUFKDVHU VXFK DV some inconsistencies between specimen deeds drafted by RVI

&&3$WRILOHDQDFFHSWDQFHRIWKHWHUPVRIWKHVDOHGiven and the property description used by CCPA’s appraiser in

that CCPA never withdrew its offer to acquire the rail line valuing the line. CCPA followed this letter with a petition,

that RVI wanted to abandon, the sale was binding upon both submitted on March 28, 2000, for a declaratory order from the

parties. 49 U.S.C. § 10904(f)(2). Accordingly, the STB had STB invalidating any post-September 3, 1999 transfers or

jurisdiction to approve the sale of the rail line. assignments of property interests from RVI that were not

included in CCPA’s appraisal report. CCPA specifically

2. The STB’s October 4, 2000 decision was not expressed concern about RVI’s secret conveyances of the

erroneous to the extent that it ordered RVI to line’s non-rail crossing, aerial, and subsurface rights to its

transfer its entire fee simple interest in property affiliate VPB in late October and early November of 1999,

constituting the rail line that was the subject of RVI’s without informing CCPA or the STB about them. To ensure

exemption petition for abandonment that it would actually acquire what it purchased, CCPA

requested the STB to void "all transfers or assignments of

RVI next argues that the STB exceeded its jurisdiction property rights in the railroad property not specifically

under the statute because it ordered RVI to transfer more of reflected in CCPA’s evidence on the value of the line." (J.A.

its property than was necessary for CCPA to provide effective at 1250.)

rail service. While CCPA requested RVI to convey a fee

simple interest in all the property comprising the rail line, Consequently, in a decision issued on April 5, 2000, the

RVI contends that to conduct effective rail operations CCPA STB ordered RVI to show cause why it should not set aside

requires no more than a surface fee or easement over the line. the transfers of subsurface and aerial rights to VPB, and why

In support of its contention that an owner need not transfer all

the property comprising the line, RVI relies upon 49 U.S.C.

§ 10904(f)(1)(B), which provides that when a party to an 

,Q WKH FRPSDQLRQ FDVH DOVR GHFLGHG E\ WKH 67% RQ 0DUFK  

OFA proceeding asks the STB to set terms, the STB must WKH 67% UHMHFWHG WKH SHWLWLRQV RI VKLSSHUV 'DUOLQJWRQ %ULFN DQG ,QVXO WR

UHRSHQ 59,¶V DFTXLVLWLRQ GHFLVLRQ 7KHVH VKLSSHUV FRQWHQGHG WKDW 59,

determine the price and other terms of sale, except that in KDG XQGHUWDNHQ FHUWDLQ DFWLRQV WKDW PDGH UHVWRUDWLRQ RI WKH OLQH PRUH

no case shall the Board set a price which is below the fair GLIILFXOW DQG WKDW WKH 67% VKRXOG KDYH PRUH YLJRURXVO\ HQIRUFHG LWV RZQ

SROLF\ ZLWK UHJDUG WR 59,¶V YLRODWLRQV RI LWV FRPPRQ FDUULHU REOLJDWLRQV

market value of the line (including, unless otherwise

##Ventures, Inc.  Acquisition and Operation Exemption  Youngstown

mutually agreed, all facilities on the line or portion & S. R.R. Co., STB Finance Docket No. 33385, 2000 WL 24367, at *3

necessary to provide effective transportation services). (Service Date Mar. 3, 2000).

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the entire property considered in the January 7, 2000 decision regulation is "manifestly contrary to the statute." Ragsdale,

should not be transferred to CCPA. See R.R. Ventures, Inc. 122 S. Ct. at 1160. Under the clear terms of § 10904(f)(2),

 Abandonment Exemption  Between Youngstown, OH, and the offeror need not file an acceptance of the STB’s decision

Darlington, PA, in Mahoning and Columbiana Counties, OH, setting the terms of the sale. Rather, an offeror needs to

and Beaver County, PA, STB Docket No. AB-556 (Sub-No. respond to the STB’s decision only in the event that it wants

2X), 2000 WL 351356, at *2 (Service Date April 5, 2000). to withdraw its offer to purchase the line. Thus, once an

The STB explained that after RVI supplied information about offeror has made an offer to purchase a line being abandoned,

the line to CCPA on October 8, 1999, RVI had a continuing and the STB has made a decision setting the terms of the sale,

duty to keep CCPA informed of any changes in the then the sale of the rail line is binding upon both the rail

information. The STB stated that "[b]y transferring assets carrier selling the line and the offeror, unless the offeror

after October 8, 1999, and failing to immediately inform the withdraws its offer within ten days of the STB’s decision

offeror and the STB, RVI has undermined the OFA process." setting the terms of the sale.

Id. at *1. The STB also noted that RVI’s proposed quitclaim

deeed to convey the 4.2 acre parcel to Boardman Township In effect, the position of a prospective OFA purchaser

Park District "directly contravenes our March 3, 2000 mirrors that of the abandoning rail owner abandoning the line.

decision" and that "RVI may not transfer this parcel to the In a forced sale under § 10904(f)(2), neither the purchaser nor

Park District." Id. at *2 n. 2. the abandoning rail owner is required to accept the STB’s

terms of the sale. However, the statute permits an OFA

RVI responded to the show cause order on April 20, 2000 purchaser, but not the abandoning rail owner, to withdraw its

by claiming that 49 U.S.C. § 10904 required only the sale of offer within ten days of the STB’s decision imposing the

a surface easement, denying any intent to convey a fee simple terms of the sale. Absent a withdrawal on the part of the OFA

interest in the property. According to RVI, it only intended buyer, the sale is consummated in accordance with the terms

to "convey an easement for railroad purposes together with all imposed by the STB, pursuant to its exclusive and plenary

track." Thus, RVI argued that if the STB forced RVI to jurisdiction. Thus, the statute imposes, if you will, a "forced

transfer its entire interest in all the property, including parts acceptance" on the part of the OFA purchaser, unless the

that RVI believed were not related to rail service, at a price of buyer takes the affirmative action of withdrawing its offer.

$350,000, the STB would commit an unconstitutional taking Such a "forced acceptance" is the logical counterpart of the

in violation of the Fifth Amendment. Further, RVI forced sale provision of § 10904(f)(2), requiring the

challenged the STB’s jurisdiction over "non-rail assets which abandoning line owner to sell in accordance with the terms of

are not necessary for the provision of rail transportation the sale established by the STB.

service," demanding that the STB dismiss its show cause

order and issue an order completing the sale. Here, we construe the absence of any language in the

statute requiring a qualified OFA purchaser to accept the

In support of its position, RVI submitted a verified terms of the forced sale as signaling Congress’ clear intention

statement from its president, David Handel, who stated that not to require acceptance on the part of the purchaser. We

RVI had informed CCPA of the transfer of subsurface and air believe that the omission of language regarding acceptance by

rights, third-party agreements, and surface easements at a an OFA purchaser UHIOHFWV &RQJUHVV¶ RYHUDUFKLQJ JRDO RI

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agreed to its sale terms and denied RVI’s motions to vacate meeting on November 30, 1999. Handel noted that CCPA’s

and to stay the sale of the rail line. appraiser John Rossi, who had filed an earlier verified

statement, disclaiming prior knowledge of the transfers of

To determine whether the STB had jurisdiction to force subsurface and aerial rights, was not present at the meeting,

RVI to sell the line, we begin by examining the pertinent and thus had not included the transfers in his appraisal filed

statutory language. Pursuant to 49 U.S.C. § 10903, the STB in December of 1999. According to Handel, RVI "had

has exclusive and plenary jurisdiction over a rail carrier consistently maintained throughout this proceeding that

seeking to abandon a rail line. 3UHVHDXOW86DWFLWLQJ subsurface and aerial rights were not part of the interest which

.DOR%ULFN86DW5/7'5\&RUS)GDW RVI was prepared to convey to CCPA for purposes of

)ULHQGV RI WKH $WJOHQ6XVTXHKDQQD 7UDLO  )G DW continued rail operations."

QAs previously stated, 49 U.S.C. § 10904(f)(2) gives

an offeror ten days in which to withdraw the offer to purchase In response to RVI’s show cause filing, CCPA denied any

a rail line following a decision of the STB setting the terms of knowledge about the conveyance of subsurface or aerial rights

the sale. Without a withdrawal by the offeror, the STB’s prior to March 23, 2000, stating that "a third party" brought

decision becomes binding on both parties. the matter to CCPA’s attention. CCPA also highlighted that

Handel had valued the land for abandonment purposes on the

While the statute does not impose any requirements or time basis of a full fee interest, and that RVI’s counsel had, on

constraints on the offeror concerning the acceptance of the September 21, 1999, stated that RVI would convey a fee

terms and conditions set by the STB, 49 C.F.R. interest in the land. Finally, CCPA stated that an official of

§ 1152.27(h)(7) does require the offeror to accept or reject the Central Columbiana & Pennsylvania Railways, Inc.

STB’s terms and conditions within ten days. Specifically, 49 ("CCPR") had determined that the entire area of land,

C.F.R. § 1152.27(h)(7) provides: including noncontiguous parcels, was necessary for rail

operations on the line. The official, Timothy Robbins, further

Within 10 days of the service date of the Board’s explained in a verified statement that RVI had undertaken or

decision, the offeror must accept or reject the Board’s authorized the removal of some track and the overpaving of

terms and conditions with a written notification to the some rail crossings. Another CCPR employee, Walter Gane,

Board and all parties to the proceeding. provided a verified statement that RVI "has not only allowed

the line to deteriorate, but has tacitly approved the destruction

49 C.F.R. § 1152.27(h)(7). of portions of the line, as well as other actions that have

In this instance, there is a clear conflict between the plain caused the line to be inoperable, including paving over

language of the statute and the implementing regulation. The multiple roadway crossings." Because the cost of restoring

statutory language of § 10904(f)(2) does not require the these alterations was estimated to be approximately $335,000,

offeror to "accept" the terms imposed by the STB within a CCPA consequently requested that the STB order RVI to

designated period of time, yet the implementing regulation place sufficient funds in escrow to cover the repair costs.

requires the offeror to accept or reject the terms within ten On May 10, 2000, RVI moved the STB to reopen the OFA

days. Here, we conclude that 49 C.F.R. § 1152.27(h)(7) valuation process on the basis of new evidence concerning the

must give way to 49 U.S.C. § 10904(f)(2) because the

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"highest and best use" of the line. RVI accompanied this WKHVWDWXWH´5DJVGDOHY:ROYHULQH:RUOG:LGH,QF6

motion with a verified statement from Handel, representing &WTXRWLQJ&KHYURQ86DW

that Williams Communications, Inc. ("Williams") had

contacted both RVI and CCPA about installing fiber optic ,QDGGLWLRQXQGHUWKH$GPLQLVWUDWLYH3URFHGXUHV$FWWKLV

cable along the line. Handel stated that this information &RXUW FDQQRW VHW DVLGH WKH 67%¶V GHFLVLRQV ILQGLQJV DQG

"validates the contentions of RVI that the highest and best use FRQFOXVLRQVXQOHVVWKH\DUH³DUELWUDU\FDSULFLRXVDQDEXVHRI

of its right-of-way is as a non-rail linear corridor." Though GLVFUHWLRQRURWKHUZLVHQRWLQDFFRUGDQFHZLWKODZFRQWUDU\

RVI claimed that Williams intended to install a fiber optic WR FRQVWLWXWLRQDO ULJKW SRZHU SULYLOHJH RU LPPXQLW\ LQ

cable along RVI’s right-of-way, RVI admitted that "Williams H[FHVV RI VWDWXWRU\ MXULVGLFWLRQ>@    RU XQVXSSRUWHG E\

has not conducted any further negotiations with RVI" after VXEVWDQWLDO HYLGHQFH´   86& † $ ( )LOP

RVI submitted a proposal to it on behalf of VPB. 7UDQVLW,QFY,&&)GWK&LU,Q

GHWHUPLQLQJZKHWKHUDGHFLVLRQE\WKH67%ZDVDUELWUDU\RU

CCPA also petitioned the STB on May 19, 2000 to reopen FDSULFLRXV WKLV &RXUW PXVW FRQVLGHU ZKHWKHU WKHUH ZDV D

the proceedings based on new evidence, having just learned ³UDWLRQDOFRQQHFWLRQEHWZHHQWKHIDFWVIRXQGDQGWKHFKRLFH

that RVI’s former president Ron Hall had previously PDGH´,G$GHFLVLRQLVQRWDUELWUDU\RUFDSULFLRXVZKHQLW

contracted on November 15, 1996 to sell the salvage right to LVSRVVLEOHWRRIIHUDUHDVRQHGHYLGHQFHEDVHGH[SODQDWLRQIRU

the line’s track and track materials to Kovalchick Corporation D SDUWLFXODU RXWFRPH 0RWRU 9HKLFOH 0IUV $VV¶Q Y 6WDWH

("Kovalchick") for $400,000. The agreement conditioned )DUP0XW$XWR,QV&R863HUU\Y

Kovalchick’s right to remove track upon RVI’s obtaining 8QLWHG)RRG &RPP:RUNHUV'LVW8QLRQV 

abandonment or exemption authority from the STB. In its )GWK&LU,QGHWHUPLQLQJZKHWKHUWKH

response to the STB, RVI admitted the sale of the salvage 67%¶V ILQGLQJV DUH VXSSRUWHG E\ VXEVWDQWLDO HYLGHQFH WKLV

rights to Kovalchick, but contended that the sale was &RXUWH[DPLQHVZKHWKHUWKH67%FRQVLGHUHG³VXFKUHOHYDQW

conditional and subject to the STB’s abandonment authority. HYLGHQFHDVDUHDVRQDEOHPLQGPLJKWDFFHSWDVDGHTXDWHWR

VXSSRUWWKHFRQFOXVLRQUHDFKHG´53&DUERQH&RQVWU&R

On October 4, 2000, the STB issued its decision regarding Y2FFXSDWLRQDO6DIHW\ +HDOWK5HYLHZ&RPP¶Q)G

its show cause order and resolved various issues that had WK&LU

arisen since the January 7, 2000 decision setting the terms of

the sale. The STB first rejected RVI’s argument that, %$QDO\VLV

pursuant to 49 U.S.C. § 10904(f)(1), it was only obligated to

convey an easement for railroad purposes and rail materials.  7KH67%KDGMXULVGLFWLRQWRDSSURYHWKHVDOHRIWKH

The STB stated: UDLOOLQH

2Q DSSHDO 59, ILUVW FRQWHQGV WKDW WKH 67% ODFNHG

Where (as here) the offeror does not seek to purchase less MXULVGLFWLRQWRIRUFHWKHVDOHRIWKHOLQHDIWHUWKH-DQXDU\

than the entire property, we believe that it is reasonable  DQG 2FWREHU   GHFLVLRQV EHFDXVH CCPA never

to assume that the entire property is needed for effective properly accepted the STB’s terms of sale. Accordingly, RVI

transportation services. After all, that is the property the urges us to vacate the STB’s March 3, 2000 and November 2,

selling/abandoning carrier (or its predecessor) assembled 2000 decisions, in which the STB determined that CCPA had

for, and dedicated to, rail service.

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of RVI and VPB’s remaining rights in the rail line. R.R. R.R. Ventures, Inc.  Abandonment Exemption  Between

Ventures, Inc.  Abandonment Exemption  Between Youngstown, OH, and Darlington, PA, in Mahoning and

Youngstown, OH, and Darlington, PA, in Mahoning and Columbiana Counties, OH, and Beaver County, PA, STB

Columbiana Counties, OH, and Beaver County, PA, STB Docket No. AB-556 (Sub-No. 2X), 2000 WL 1470451, at *6

Docket No. AB-556 (Sub-No. 2X), 2001 WL 1396719, at * (Service Date Oct. 4, 2000). In reaching this conclusion, the

4 (Service Date Nov. 9, 2001). In view of RVI’s interference STB imposed a "heavy burden" on the abandoning carrier to

with the administration of the escrow fund, WKH67%IXUWKHU rebut the presumption that all the property was necessary for

GLUHFWHG&&3$³WRPDQDJHWKHIXQGVGLUHFWO\´DQG³FRPSOHWH effective rail operations. The STB concluded that RVI failed

DOOUHSDLUVIRUZKLFKWKHHVFURZIXQGVDUHWREHXVHGZLWKLQ to sustain this burden, finding that RVI’s "assurance" that the

GD\VIURPWKHHIIHFWLYHGDWHRIWKLVGHFLVLRQ´,GDW  property interests that it intended to convey to CCPA would

be sufficient to operate the rail line was "entitled to little, if

,,',6&866,21 any, weight, considering that RVI has not had any experience

operating this, or any other, rail line." Id. The STB further

$6WDQGDUGRI5HYLHZ reasoned that dividing the surface rights from other property

When asked to review a decision of an administrative rights in the land would be "impractical and unworkable" and

agency, this Court employs a narrow standard of review. See "could create constant tension between the owner of the rail

Simms v. Nat’l Traffic Safety Admin., 45 F.3d 999, 1003 (6th line (here, RVI’s affiliate VPB) or other easement holders . . .

Cir. 1995). )LUVWWKLV&RXUW³PXVWJLYHFRQVLGHUDEOHZHLJKW and the holder of surface rights to conduct rail operations

DQGGXHGHIHUHQFHWRWKH>67%¶V@LQWHUSUHWDWLRQRIWKHVWDWXWHV (here, CCPA)." Id. Although RVI claimed that there would

LW DGPLQLVWHUV XQOHVV LWV VWDWXWRU\ FRQVWUXFWLRQ LV SODLQO\ be no problems between a railroad with surface rights and

XQUHDVRQDEOH´5/7'5\&RUS)GDWTXRWLQJ other parties with subsurface or aerial rights, the STB was

%URWKHUKRRGRI/RFRPRWLYH(QJ¶UVY,&&)G not persuaded, however, that there can be any assurance

WK&LUVHHJHQHUDOO\&KHYURQ86$,QFY1DWXUDO that rail operations will be unhampered unless the offeror

5HVRXUFHV 'HIHQVH &RXQFLO  86   

KROGLQJWKDWUHYLHZLQJFRXUWPXVWRQO\DVNZKHWKHUDJHQF\ (who will be responsible for ensuring that rail service is

DFWLRQ³LVEDVHGRQDSHUPLVVLEOHFRQVWUXFWLRQRIWKHVWDWXWH´ provided) possesses sufficient property rights to

³:KLOHDQDJHQF\¶VLQWHUSUHWDWLRQRIDVWDWXWHLVHQWLWOHGWR determine unimpeded who may enter the right-of-way at

GHIHUHQFHµIHGHUDOFRXUWVEHDUWKHXOWLPDWHUHVSRQVLELOLW\IRU what times and under what circumstances, as well as

LQWHUSUHWLQJ IHGHUDO VWDWXWHV¶´ &URXQVH &RUS Y ,&&  whether any underground or additional overhead cables

)GWK&LUTXRWLQJ0HDGH7RZQVKLSY or similar structures would interfere with its own rail use

$QGUXV)GWK&LU:HDOVRQRWHWKDW of the right-of-way.

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HYHQ JUHDWHU GHIHUHQFH WKDQ LWV LQWHUSUHWDWLRQ RI WKH VWDWXWH Id. Accordingly, the STB ordered RVI to include in the

WKDWLWDGPLQLVWHUV´%XIIDOR&UXVKHG6WRQH,QFY67% conveyance to CCPA "all property in the right-of-way,

)G'&&LU+RZHYHUDUHJXODWLRQIURP including the subsurface and air rights, all real estate and

WKH DJHQF\ FKDUJHG ZLWK LPSOHPHQWLQJ WKH VWDWXWH FDQQRW track, and all other rail materials." Id. at *12.

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 5DLOURDG9HQWXUHVHWDO 1RV 1RV 5DLOURDG9HQWXUHVHWDO 

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The STB also voided RVI’s transfers of subsurface and continued rail service." Id. at *2. The STB also rejected a

aerial rights to its affiliate, VPB, and the sale of 4.012 acres request from RVI to include language in the bill of sale

to the Park District. Citing Kalo Brick, 450 U.S. at 320, the conditioning the sale on CCPA’s assumption of liability for

STB held that these transfers violated the STB’s "continuing repair of track fixtures, concluding that this language

and exclusive regulatory jurisdiction over the rail line prior to contravened the STB’s order creating an escrow account for

its abandonment." Id. at *7. According to the STB, RVI’s RVI’s payment of track repairs and restoration. Id. at * 3.

attempted conveyances after the commencement of the OFA Howeve

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