Chlorine Institute, Inc. v. Federal Railroad Administration

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 4, 2013 Decided June 11, 2013

No. 12-1298

CHLORINE INSTITUTE, INC.,

PETITIONER

v.

FEDERAL RAILROAD ADMINISTRATION, ET AL.,

RESPONDENTS

On Petition for Review of a Final Rule

of the Federal Railroad Administration

Paul M. Donovan argued the cause for the petitioner.

Mark W. Pennak, Attorney, United States Department of

Justice, argued the cause for the respondents. Stuart F. Delery,

Principal Deputy Assistant Attorney General, Michael Jay

Singer, Attorney, Paul M. Geier, Assistant General Counsel,

United States Department of Transportation, Peter J. Plocki,

Deputy Assistant General Counsel, and Christopher Perry and

Rebecca S. Behravesh, Trial Attorneys, Federal Railroad

Administration, were on brief.

Thomas H. Dupree Jr., Michael R. Huston, Louis P.

Warchot and Michael J. Rush were on brief for amicus curiae

Association of American Railroads in support of the

respondents.

2

Before: HENDERSON, BROWN and KAVANAUGH, Circuit

Judges.

Opinion for the Court filed by Circuit Judge HENDERSON.

Concurring Opinion filed by Circuit Judge KAVANAUGH.

KAREN LECRAFT HENDERSON, Circuit Judge: The Chlorine

Institute, Inc. (Institute)1 challenges the final rule promulgated

by the Federal Railroad Administration (FRA) to implement

section 104 of the Rail Safety Improvement Act of 2008 (Act),

which requires that a qualifying rail carrier submit an

implementation plan to install a “positive train control” (PTC)

system2 no later than December 31, 2015 on certain tracks used

for passenger service or for transporting “poison- or toxic- by-

inhalation” hazardous material (PIH or TIH), such as chlorine,

Pub. L. No. 110-432 § 104(a)(1), 122 Stat. 4848, 4857 (Oct. 16,

2008) (49 U.S.C. §20157(a)(1)). Positive Train Control Systems

(RRR), 77 Fed. Reg. 28,285 (May 14, 2012) (2012 Final Rule).

The 2012 Final Rule establishes 2008 as the baseline year for

determining whether tracks carry passengers or PIH so as to

require PTC—subject to an exclusion/removal exception for

segments that will no longer carry such traffic as of the

December 31, 2015 implementation deadline. The Institute

challenges as arbitrary and capricious and contrary to

congressional intent FRA’s decision to omit from the 2012 Final

Rule a two-part risk assessment test a carrier had been required

1

The Institute is a trade association representing producers,

packagers, distributors, users and suppliers of chlorine and related

products.

2

A PTC system is “a system designed to prevent train-to-train

collisions, over-speed derailments, incursions into established work

zone limits, and the movement of a train through a switch left in the

wrong position.” 49 U.S.C. § 20157(i)(3); see 49 C.F.R. subt. B, ch.

II, pt. 236, Subpt. I.

3

to meet to qualify for exclusion/removal under two previous

PTC rules. Because the Institute has not established that its

members now face a present or imminent injury from the 2012

Final Rule’s omission, we conclude its challenge is not ripe.

I.

In 2008, the Congress enacted the Act with the intent, inter

alia, “to prevent railroad fatalities, injuries, and hazardous

materials releases.” Pub. L. No. 110-432, 122 Stat. at 4848.

Section 104 of the Act governs the “[i]mplementation of

positive train control systems” and requires that no later than 18

months after its enactment date of October 16, 2008, each Class

I railroad carrier3 and any entity providing regularly scheduled

intercity or commuter rail passenger transportation develop and

submit to the Department of Transportation

a plan for implementing a positive train control system

by December 31, 2015, governing operations on—

(A) its main line over which intercity rail

passenger transportation or commuter rail

passenger transportation, as defined in section

24102, is regularly provided;

(B) its main line over which poison- or toxic-

by-inhalation hazardous materials, as defined in

[49 C.F.R. §§] 171.8, 173.115, and 173.132 . . . ,

are transported; and

(C) such other tracks as the Secretary [of

Transportation] may prescribe by regulation or

order.

3

A Class I carrier is one having annual operating revenues of

$250 million or more. Commuter Rail Div. of Reg’l Transp. Auth. v.

Surface Transp. Bd., 608 F.3d 24, 28 n.2 (D.C. Cir. 2010) (citing 49

C.F.R. § 1201.1-1).

4

49 U.S.C. § 20157(a)(1).4 Section 104 further (1) authorizes the

Secretary to “provide technical assistance and guidance to

railroad carriers in developing the [required PTC] plans,” (2)

requires the Secretary to conduct an annual review to ensure the

carriers’ compliance therewith and to report to the Congress no

later than December 31, 2012 on the carriers’ progress and (3)

authorizes the Secretary to assess civil penalties for violating

any of section 20157’s provisions. Id. § 20157(b)-(e). In

addition, section 104(g) vests the Secretary with broad

implementation authority:

The Secretary shall prescribe regulations or issue

orders necessary to implement this section, including

regulations specifying in appropriate technical detail

the essential functionalities of positive train control

systems, and the means by which those systems will be

qualified.

Id. § 20157(g).5 Accordingly, in July 2009, FRA issued a notice

of proposed rulemaking to implement the mandate. Positive

Train Control Systems, 74 Fed. Reg. 35,950 (July 21, 2009).

FRA has since promulgated three successive final rules

governing PTC. The first rule, issued in January 2010,

established calendar year 2008 as the baseline year for

determining whether a main line carries either passenger or PIH

traffic so as to require PTC. Positive Train Control Systems, 75

Fed. Reg. 2598, 2700 (Jan. 15, 2010) (January 2010 Final Rule)

(49 C.F.R. § 236.1005(b)(2) (2010)). Recognizing, however,

4

“The term ‘main line’ means a segment or route of railroad

tracks over which 5,000,000 or more gross tons of railroad traffic is

transported annually . . . .” 49 U.S.C. § 20157(i)(2).

5

The Secretary delegated to the FRA his authority to implement

the Act. 49 C.F.R. § 1.49(oo) (2009), recodified at id. § 1.89(b)

(2012).

5

that routing could change between the 2008 baseline and the

Act’s December 31, 2015 PTC implementation deadline, the

January 2010 Final Rule permitted a railroad to request the

“[e]xclusion or removal of track segments from [the] PTC

baseline . . . based upon changes in rail traffic such as reductions

in total traffic volume or cessation of passenger or PIH service.”

Id. at 2701 (49 C.F.R. § 236.1005(b)(4)(I) (2010)). “In the case

of cessation of PIH traffic over a track segment,” the request

was to be approved “upon a showing by the railroad that . . .

[t]here is no remaining local PIH traffic expected on the track

segment” and that the PTC exclusion/removal satisfied a two-

part test, which included: (1) an “alternative route” analysis

requiring that alternative route(s) to the excluded tracks be

“shown to be substantially as safe and secure” as the excluded

tracks; and (2) a “residual risk” analysis, requiring that, after

cessation of PIH traffic, “the remaining risk associated with

PTC-preventable accidents” not exceed the average comparable

risks of other tracks required to be PTC-equipped. Id. at 2701-

02 (49 C.F.R. § 236.1005(b)(4)(I) (2010), superseded by 49

C.F.R. § 236.1020 (effective Nov. 26, 2010)).6

Finally, the January 2010 Final Rule warned:

This is a final rule; however, FRA has identified

specific provisions for which we are considering

making changes to the final rule, if warranted by the

public comments received. We expect to publish our

response to those comments, including any possible

6

The two-part test was new in the January 2010 Final Rule. The

proposed rule had simply “said that changes from the 2008 base could

be granted if ‘consistent with safety.’ ” January 2010 Final Rule, 75

Fed Reg. at 2619. FRA explained that the two-part test “fleshes out

the ‘consistent with safety’ notion contained in the proposed rule with

the desired objective of providing greater predictability, transparency,

and consistency in decision making.” Id. at 2620.

6

changes to the rule made as a result of them, as soon as

possible following the end of the comment period.

However, the limited areas of this rule open for

additional comment do not affect the requirement for

railroads to prepare and submit plans in accordance

with the deadlines established in this final rule.

Id. at 2598. In particular, it advised:

FRA will continue to seek comments limited to

increasing the clarity, certainty, and transparency of the

criteria governing the removal from a PTC[

Implementation Plan] (and therefore from the

requirement to install PTC) of any track segments on

which PTC systems have yet to be installed for which

a railroad seeks relief from the requirement to install

PTC. . . . Any further comments should be limited to

the scope of the issues indicated in this preamble to

which FRA seeks further comments.

Id. at 2605.

After further comments and a hearing, FRA promulgated its

second final rule in September 2010. Positive Train Control

Systems, 75 Fed. Reg. 59,108 (Sept. 27, 2010). (September 2010

Final Rule). The September 2010 Final Rule left the

exclusion/removal provision largely unchanged but moved it to

a separate, newly promulgated regulation, 49 C.F.R. § 236.1020

(“Exclusion of track segments for implementation due to

cessation of PIH materials service or rerouting.” (2010-11)). 75

Fed. Reg. at 59,117. Under the reworded (but substantively

unchanged) regulation, each carrier was required to show that

there was “no remaining local PIH materials traffic expected on

the track segment” and that the rerouting passed both the

“alternative route” and the “residual risk” prongs of the

qualifying test. Id. at 59,117 (49 C.F.R. § 236.1020(b)(1)(-3)

(2010)).

7

The Association of American Railroads (AAR) petitioned

this court to review both the January 2010 Final Rule and the

September 2010 Final Rule, challenging, inter alia, the

“backward-looking” 2008 baseline. See Pet’r Br., Ass’n of Am.

R.Rs. v. Fed. R.R. Admin., Nos. 10-1198 & 10-1308, at 36 (D.C.

Cir. Nov. 10, 2010). On March 2, 2011, AAR and FRA reached

a settlement, agreeing to move to hold the case in abeyance

pending a new rulemaking proceeding. On March 3, 2011, we

granted their motion. Ass’n of Am. R.Rs. v. Fed. R.R. Admin.,

Nos. 10-1198 & 10-1308 (D.C. Cir. filed Mar. 3, 2011) (per

curiam order).

Pursuant to the settlement, in August 2011, FRA filed a new

Notice of Proposed Rulemaking to consider eliminating the two-

part test for exclusion/removal from the 2008 baseline. Positive

Train Control Systems, 76 Fed. Reg. 52,918, 52,921 (Aug. 24,

2011). In May 2012, FRA published the 2012 Final Rule, which

did precisely that, stating in the preamble: “Having considered

the public comments on the [Notice of Proposed Rulemaking],

FRA is promulgating this final rule eliminating the two

qualifying tests.” 77 Fed. Reg. at 28,286. FRA explained that

retaining the two-part test “could potentially require PTC system

implementation at a great cost to the railroads on lines that will

not carry PIH materials traffic as of December 31, 2015.” Id. at

28,298. Accordingly, under the 2012 Final Rule, an

exclusion/removal request is approved upon a showing that, as

of December 31, 2015, there will be no passenger service or PIH

traffic on the tracks. Id. at 28,305 (codified at 49 C.F.R.

§ 236.1005(b)(4)(ii) (2012)). The Institute timely petitioned for

review.

II.

Ordinarily, we would review FRA’s interpretation of the

Act under Chevron USA Inc. v. Natural Resources Defense

Council, 467 U.S. 837 (1984), and FRA’s application of the

statute pursuant to the Administrative Procedure Act, 5 U.S.C.

8

§§ 701 et seq. See Ass’n of Am. R.Rs. v. Dep’t of Transp., 38

F.3d 582 (D.C. Cir. 1994). Here, however, we lack jurisdiction

to consider the Institute’s arguments on the merits because its

challenge is not ripe. See Exxon Mobil Corp. v. FERC, 501 F.3d

204, 207 (D.C. Cir. 2007) (“Before we reach the merits . . . , we

consider whether the issue is ripe for judicial review. . . . The

question of ripeness goes to our subject matter jurisdiction, and

thus we can raise the issue sua sponte at any time.” (quotation

marks omitted)).

The ripeness doctrine is “designed ‘to prevent the courts,

through avoidance of premature adjudication, from entangling

themselves in abstract disagreements over administrative

policies, and also to protect the agencies from judicial

interference until an administrative decision has been formalized

and its effects felt in a concrete way by the challenging parties.”

Nat’l Park Hospitality Ass’n v. Dep’t of Interior, 538 U.S. 803,

807-08 (2003) (quoting Abbott Labs. v. Gardner, 387 U.S. 136,

148–149 (1967)). “Part of the doctrine is subsumed into the

Article III requirement of standing, which requires a petitioner

to allege inter alia an injury-in-fact that is ‘imminent’ or

‘certainly impending.’ ” Am. Petroleum Inst. v. EPA, 683 F.3d

382, 386 (D.C. Cir. 2012); see Blanchette v. Conn. Gen. Ins.

Corps., 419 U.S. 102, 138 (1974) (“[I]ssues of ripeness involve,

at least in part, the existence of a live ‘Case or Controversy’

. . . .”); Wyo. Outdoor Council v. U.S. Forest Serv., 165 F.3d 43,

48 (D.C. Cir. 1999) (“Just as the constitutional standing

requirement for Article III jurisdiction bars disputes not

involving injury-in-fact, the ripeness requirement excludes cases

not involving present injury.”); Nat’l Treasury Emps. Union v.

United States, 101 F.3d 1423, 1427 (D.C. Cir. 1996) (“Ripeness,

while often spoken of as a justiciability doctrine distinct from

standing, in fact shares the constitutional requirement of

9

standing that an injury in fact be certainly impending.”).7 The

Institute has failed this part of the ripeness test because it has not

demonstrated that it faces an imminent or certainly impending

injury.

To establish such an injury, the Institute must show that “at

least one of its members ‘is under threat of suffering “injury in

fact” that is concrete and particularized [and] the threat must be

actual and imminent, not conjectural or hypothetical.’ ” Nat’l

Ass’n of Home Builders v. EPA, 667 F.3d 6, 12 (D.C. Cir. 2011)

(quoting Summers v. Earth Island Inst., 555 U.S. 488, 493

(2009)); see also Lujan v. Defenders of Wildlife, 504 U.S. 555,

560 (1992). The Institute claims its members are “directly

injured by FRA’s policy decision to no longer rely upon traffic

movements during 2008 as the basis for PTC Implementation

Plans [] and by the elimination of the two-part test and the

resulting ability of the railroads to restrict or eliminate chlorine

transportation by rail,” because PIH traffic will no longer be

able to travel over those tracks that a carrier does not equip with

PTC. Pet’r Br. 6; see also id. at 7-8 (citing “the injury imposed

by FRA in eliminating 2008 as the base year for determining

track segments requiring PTC, and eliminating the two-part test

allowing the nation’s major railroads to reduce the trackage over

which they carry chlorine and other TIH materials”); id. at 9

(“The causal relationship between the elimination of the 2008

base year and the two-part test was to injure chlorine and other

TIH shippers by limiting or eliminating their ability to ship their

products by rail.”). According to the Institute, the “most

immediate impact on TIH shippers, including chlorine shippers,

would be to severely limit or eliminate their ability to ship

product by rail, and thus to remain in the chlorine manufacturing

7

“Even if a case is ‘constitutionally ripe,’ though, there may also

be ‘prudential reasons for refusing to exercise jurisdiction.’ ” Am.

Petroleum Inst. v. EPA, 683 F.3d at 386.

10

and consuming business” Id. at 9 (emphasis added). But the

described impact is—at most—speculative. At this stage, we do

not know which track segments will be fitted with PTC under

the plans that are submitted by carriers and ultimately approved

by FRA—much less whether any Institute member’s ability to

ship PIH will be significantly affected because more tracks will

not require PTC under the 2012 Final Rule than would have

under the January 2010 and September 2010 Final Rules. Cf.

Id. (“No one can predict the result of each and every application

of the two-part test to any track segment . . . .”). Nor has the

Institute asserted any carrier has diminished—or is about to

diminish—any individual member’s shipping ability—only that

a carrier could do so. See, e.g., Id. at 8 (“[W]ith the passage of

the [Act] the railroads were inadvertently given the perfect

opportunity to restrict or eliminate chlorine shipments by rail.”

(emphasis added)); Reply Br. 13-14 (“[T]he railroads will be

permitted to avoid PTC installation on thousands of miles of rail

tracks. The absence of PTC on those tracks will prohibit the

Institute’s members from shipping chlorine over those tracks

and eliminate the ability for those members to market their

chlorine in the normal course of business.” (emphasis added)).

FRA acknowledges that eliminating the two-part test will result

in a “smaller map of PTC-equipped line segments,” causing

more rerouting of PIH traffic than under the 2010 rules. See

2012 Final Rule, 77 Fed. Reg. at 28,291. But rerouting—which

is a necessary consequence of the Congress’s decision to restrict

PIH traffic to PTC-equipped tracks—does not necessarily

“severely limit” or “eliminate” a chlorine shipper’s ability to

ship its product by rail—it simply requires a different shipping

route be used. At this point, we do not know how routing may

change—or whether the additional rerouting under the 2012

Final Rule will affect—an Institute member’s ability to transport

11

chlorine.8 As the PTC Implementation Plan process advances

and its impact becomes clearer, such an injury may indeed

emerge and the Institute’s challenge may thereby ripen.9 It is

not ripe now.

For the foregoing reasons, we dismiss the Institute’s petition

for lack of jurisdiction.

So ordered.

8

The picture is further blurred by the prospect that three separate

federal agencies may be involved in shaping it: (1) FRA, which

regulates PTC; (2) the Pipeline and Hazardous Materials Safety

Administration, which carries out “duties and powers related to

pipeline and hazardous materials transportation and safety,” 49 U.S.C.

§ 108(f), including overseeing rail carrier routing, 49 C.F.R. §

172.820; and (3) the Surface Transportation Board (STB), which

generally regulates rail carrier transportation, service and rates, see 49

U.S.C. § 11101. FRA insists that the STB’s exercise of its own

authority to enforce a railroad carrier’s statutory obligation to “provide

[] transportation or service on reasonable request,” id. § 11101(a), will

ensure the availability of rail carriage to PIH shippers. See Oral

Argument Recording at 37:50 (Apr. 4, 2013) (“Positive Train Control

takes a backseat to the common carriage requirement.”). We need not

unravel the tangled regulatory interaction but only note that it adds to

the unpredictability regarding future PIH transportation availability.

9

Under the 2012 Final Rule, third parties such as the Institute

“have an opportunity to express their views on the plans submitted

pursuant to the PTC rule.” 77 Fed. Reg. at 28,290. Under 49 C.F.R.

§ 236.1011(e):

Upon receipt of a [PTC plan], FRA posts on its public web

site notice of receipt and reference to the public docket in

which a copy of the filing has been placed. FRA may

consider any public comment on each document to the

extent practicable within the time allowed by law and

without delaying implementation of PTC systems.

KAVANAUGH, Circuit Judge, concurring: I join the

Court’s opinion but add a point significant to my resolution of

the case. As was discussed at oral argument, the Surface

Transportation Board will ensure that chlorine shippers

continue to receive common-carrier transportation on

railroads when such transportation is reasonably requested.

See 49 U.S.C. § 11101(a) (“A rail carrier providing

transportation or service subject to the jurisdiction of the

Board under this part shall provide the transportation or

service on reasonable request.”). When the Board requires a

railroad to provide common-carrier service to chlorine

shippers, the railroad will have to allow the shipment and, if

necessary under the Rail Safety Improvement Act of 2008,

will have to equip the relevant track with positive train

control. With that understanding, I join the judgment and

opinion of the Court holding that the Chlorine Institute does

not at this time face an actual or imminent injury from the

2012 Final Rule.