Reply Brief — National Railroad Passenger Corporation v. Boston & Maine Corp.

eupreme Court, Us

en) FEEL ETD

| JAN 3 1992

Nos. 90-1419 and 90-1769 |

ee

Iu the Supreme Court of the Wuited States

OCTOBER TERM, 1991

NATIONAL RAILROAD PASSENGER CORPORATION,

ET AL., PETITIONERS

Vv.

BOSTON AND MAINE CORPORATION, ET AL.

INTERSTATE COMMERCE COMMISSION AND

UNITED STATES OF AMERICA, PETITIONERS

U.

BOSTON AND MAINE CORPORATION, ET AL.

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

REPLY BRIEF FOR THE FEDERAL PETITIONERS

ROBERT S. BURK JOHN G. ROBERTS, JR.

General Counsel Acting Solicitor General

Interstate Commerce Department of Justice

Commission Washington, D.C. 20530

Washington, D.C. 20423 (202) 514-2217

LS ST NT A NR Ye nc

TABLE OF CONTENTS

Page

1. Section 402(d) authorizes Amtrak’s condemnation

of respondent’s track .... 2

2. Section 402(d), as construed by the ICC, is con-

I a eumiadnia ceeds ee 9

3. The ICC’s factual findings adequately support its

A RE ne eae a 16

TABLE OF AUTHORITIES

Cases:

Berman V. Parker, 348 U.S. 26 (1954) 12

Camp V. Pitts, 411 U.S. 188 (1973) —.....00000000... 6

Chevron U.S.A. Inc. v. Natural Resources Defense

Council, Inc., 467 U.S. 837 (1984) 6

Consolidated Rail Corp. V. National Association of

Recycling Industries, Inc., 449 U.S. 609 (1981). 17

Federal Power Comm'n V. Idaho Power Co., 344

Ua 29 (EGGS) ........... 17

Hawaii Housing « Authority V Vv. ‘Midki iff, + AGT U. S. 299

) _ .....12, 18, 14-15

ICC v. American Trucking Ass’ns, 467 U.S. 354

(1984) . ails 9

ICC V. Clyde S.S, Co., 181 U. S. 29 |.) 17

Michigan Citizens fer an Independent Press V.

Thornburgh, 868 F.2d 1285 (D.€. Cir.), aff'd,

493 U.S. 38 (1989) ......... sae ; 9

Moore Ice Cream Co. V. Rose, 289 U.S. 373 (1933) 10

National R.R. Passenger Corp. Vv. Boston & Maine

Corp., Nos. 72 & 74 (Nat’l Arb. Panel Nov. 7,

Re teil en a Oe Cee 10

National R. R. Passenger Corp. V. Tw 0 Poreels of

Land, 822 F.2d 1261 (2d Cir.), cert. denied, 484

I ene &

New Haven Inclusion Cases, 399 U.S. 392 (1970).. 13-14

Olcott Vv. The Supervisors, 83 U.S. 678 (1872) 13

Reconstruction Finance Corp. Vv. Denver & R.G. W.

R.R., 328 U.S. 495 (1946) .................. or 14

(1)

II

Cases—Continued : Page

Richmond, F. & P. R.R. vy. Louisa R.R., 54 US.

(13 How.) 71 (1851) . aeueeees 11

Secombe V. Railroad Co., 90 U. s. 108 (1874) a 13

United States v. Carmack, 329 U.S. 230 (1946) __. x

United States v. Gettysburg Elec. R.R., 160 US.

668 (1896) .... seeaeaes cepahen sasteunasoengetemenienesuimenembucemmins 12

United States v. Joint Traffic Ass'n, 171 U.S. 505

OES). 13

United States v. Locke, 471 U.S. 84 (1985) 0000. 10

Constitution and statutes:

U.S. Const. :

Art. 1,§7 ....... sanestasadarsederessesheveessensveuunsveumcumsuaeusss 4

Amend. V (Public Use Clause)... 1,9, 12, 14,15

Independent Safety Board Act Amunduante of

1990, Pub. L. No. 101-641, §9(a), 104 Stat.

Ce 2

Rail Passenger Service Act, 45 U.S.C. 501 et seq.:

§ 102(2), 45 U.S.C. 501a(2) 20. 7

$ 102(7),45 U.S.C. 501a(7) 7

§ 305(d), 45 U.S.C. 545(d) senpeetisenbeeenehoon 8

§ 402, 45 U.S.C. 562 2 e.. vee 06

§ 402(a), 45 U.S.C. 562(a) 0. 5 T

§ 402 (a) (2), 45 U.S.C. 562(a) (2) 7

§ 402(d), 45 U.S.C. 562(d) 1, 2, 5, 7, 8, 9, 10, 13, 14

§ 402(d) (1), 45 U.S.C. 562(d) (1) 0... 2

§$ 402(d) (1) (A), 45 U.S.C. 562 (d) (1) (A) 5, 16

§ 402(d) (1) (B), 45 U.S.C. 562(d) (1) (B) __.. 5

Miscellaneous:

Chicago South Shore & South Bend R.R. Discon-

tinuance of Passenger Trains Under 49 U.S.C.

10908, Finance Docket No. 31348 (1.C.C. served

Dec. 15, 1989) . 7-8

136 Cong. Rec. S17, 668 (daily ed. Oct. 27, 1990). 4,5

Iu the Supreme Court of the Wnited States

OCTOBER TERM, 1991

No. 90-1419

NATIONAL RAILROAD PASSENGER CORPORATION,

ET AL., PETITIONERS

v.

ROSTON AND MAINE CORPORATION, ET AL.

No. 99-1769

INTERSTATE COMMERCE COMMISSION AND

UNITED STATES OF AMERICA, PETITIONERS

v.

BOSTON AND MAINE CORPORATION, ET AL.

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

REPLY BRIEF FOR THE FEDERAL PETITIONERS

Respondent defends the judgment below on three

grounds. It contends that (1) the ICC’s order allow-

ing Amtrak to condemn respondent's track and trans-

fer it to Central Vermo... is unauthorized by Section

402(d) of the Rail Passenger Service Act, 45 U.S.C.

562(d); (2) if authorized by Congress, the condem-

nation violates the Public Use Clause of the Fifth

Amendment; and (3) if authorized and constitu-

tional, the ICC’s order is unsupported by sufficient

factual findings. None of those claims has merit.

(1)

2

1. Section 402(d) authorizes Amtrak’s condemnation of

respondent’s track

In the main, respondent’s statutory arguments are

addressed to the wrong issue; the question is not

whether the pre-amendment version of Section 402(d)

authorizes the condemnation in this case. Rather, the

question is whether this transaction is authorized

under Section 402(d) as amended by Congress in

1990—an amendment passed for the very purpose of

overruling the court of appeals’ initial and erroneous

‘statutory interpretation in this case.

a. As to the effect of the amendment, there can

be no doubt: Congress explicitly clarified that Amtrak

may validly condemn property under Section 402(d)

notwithstanding its intention to reconvey the inter-

est it acquires to a third party. The 1990 amendment

states: Amtrak “may subsequently convey title or

other interest in [condemned] property to a third

party, if such reconveyance is found by the Commis-

sion to further the purposes of this Act.” Independ-

ent Safety Board Act Amendments of 1990, Pub. L.

No. 101-641, $9(a), 104 Stat. 4568, amending 45

U.S.C. 562(d)(1) [hereinafter ISBA]. The purpose

of this amendment was to reject the court of appeals’

reasoning that, because Amtrak intended te reconvey

the fee interest it had condemned from respondent to

another railway, that interest could not be “required

for intercity rail passenger service’ under Section

402(d).’

' The centrality of that line of reasoning to the court of

appeals’ holding is evident throughout its opinion. See Pet.

App. 18a (“the property to be acquired must be for the use of

Amtrak, and not one which, as here, .\mtrak had no intention

of retaining”); id. at 20a (rejecting suggestion that Amtrak

could condemn property to have “a responsible owner for the

B&M segment, one that could be counted on to maintain the

3

Respondent barely attempts to reconcile the court

of appeals’ reasoning with the amendment. Respond-

ent states (Resp. Br. 34) that “[t]he amendment

* * * settles the point that Amtrak has statutory

authority to subsequently convey property that it has

properly condemned,” but ignores the point that the

very purpose of the amendment is to ensure that

Amtrak can consummate a transaction such as this,

in which Amtrak intends to reconvey condemned rail

property, used in its provision of passenger train

service, to a third-party owner.

Under respondent’s approach to ISBA, the amend-

ment serves no purpose at all. As we explain in our

opening brief (Pet. Br. 28-29; see Amtrak Br. 40-41)

Amtrak was fully empowered, prior to the 1990

amendment, to dispose of property it had acquired by

condemnation or otherwise. The amendment was not

needed to authorize such a conveyance; it was needed

to ensure that a plan by Amtrak to convey condemned

property would not invalidate the initial condemna-

tion, as the court of appeals had ruled. Yet under

respondent’s approach, the amendment could never

apply to any condemnation; if Amtrak attempted to

rely on it to convey condemned property, that action

would reveal that the property was not “required for

intercity rail passenger service” by Amtrak in the

first place.*

tracks in a condition suitable for the Montrealer,” because the

statute focuses on “Amtrak’s need” to own the property) ; id.

at 23a (ICC’s “construction of the phrase ‘required for inter-

city rai] passenger service’ contravenes the plain meaning of

section 402(d) as it allows the taking of property that was

neither needed nor even wanted by Amtrak”). After ISBA,

the court of appeals’ construction is untenable.

* This is made clear by respondent’s claim (Resp. Br. 21)

that under Section 402, “Amtrak is not authorized to condemn

4

F

Respondent’s only answer is to imply (Resp. Br.

33-34) that the 1990 amendment should not be taken

seriously because it was introduced “on the last full

day of the 1990 legislative session” and was not ac-

companied by committee reports. The amendment,

however, became law in exactly the way the Constitu-

tion provides: it was passed by both Houses of Con-

gress and signed by the President. Const. Art. I,

$7. Moreover, there can be no doubt that the legisla-

tors were aware of the purpose and effect of the

amendment. Senator Jeffords’ floor statement clearly

explained that “this provision is intended to clarify

the authority used by * * * [Amtrak] to acquire a

portion of the Montrealer route in the States of Ver-

mont and New Hampshire.” 136 Cong. Rec. $17,668

(daily ed. Oct. 27, 1990). The Senator noted that the

court of appeals had “ruled that Amtrak’s subsequent

transfer of the line to another railroad for rehabili-

tation and maintenance exceeded Amtrak’s powers,”

and that the “amendment clarifies that, with this and

any future case, Amtrak can convey interests in con-

any more property or any larger interest in property than is

required for intercity rail passenger service.” Respondent

goes on to say that its reading of the statute (even prior to

the amendment) would not prohibit Amtrak from conveying

property to a third party after having condemned it, such as

when Amtrak condemns an easement to fulfill a maintenance

need and then assigns the property and the maintenance obli-

gation to a third party. Resp. Br. 22. But respondent offers

no coherent analysis of the statute that distinguishes that

case from this one, and its struggle to do so (id. at 22 n.8)

simply reflects policy judgments about when it would be ap-

propriate to find that Amtrak “requires” property that it does

not wish ultimately to own. Before the amendment, policy

judgments of that sort were for the ICC, not for the courts:

by enacting the amendment, Congress itself established the

controlling policy.

5

demned property to a third party when such convey-

ance furthers Amtrak’s statutory purpose under the

Rail Passenger Service Act, as it did in the Mon-

trealer situation.” Jbid. Senator Jeffords’ remarks

do not “vary” the language of the amendment (Resp.

Br. 35); they underscore, with unusual clarity, that

the intent of the amendment is to authorize Amtrak

to condemn property even where, as here, it ulti-

mately wishes to use, rather than to own, the prop-

erty it has condemned.

b. Even as to the pre-amendment version of Sec-

tion 402(d), respondent errs in arguing (Resp. Br.

19) that the statute was “clear” that Amtrak could

not condemn property when all it really “required”

was trackage rights or service agreements under Sec-

tion 402(a). The statute says no such thing. As the

ICC’s order pointed out, the statute does not subordi-

nate the condemnation power under Section 402(d)

to a rule that Amtrak must first seek prescribed

trackage or service rights under Section 402(a). Pet.

App. 422-43a, 115a-ll6a. Rather, the statute gives

Amtrak the initiative in applying for the particular

form of relief it desires. 45 U.S.C. 462(d) (Amtrak

“may apply to the Commission for an order * * *.”).

Section 402(d) sets out the prerequisites to the ex-

ercise of condemnation authority, and exhaustion of

any relief available under Section 402(a) is not

among them.

The ICC must determine that the property to be

condemned is “required for intercity rail passenger

service,” but the statute does not compel the ICC to

adopt respondent’s definition of that phrase.’ Under

* Respondent misstates our position as being that Amtrak

“is entitled to any property it chooses” as long as the statu-

tory “need” requirement of Section 402(d)(1)(A) and (B)

6

respondent’s view of the “required” proviso, the ICC

must examine whether Amtrak had a truly com-

pelling “‘need” to take property, a need that could not

be satisfied through some other remedy provided in

Section 402. The difficulty with that contention is

that the “required” phrase does not say this; it may

reasonably be interpreted to mean instead that Am-

trak is limited to taking property that is useful or

appropriate in Amtrak’s provision of intercity pas-

senger train service, rather than property relating to

some other line of business. Pet. Br. 17. The ICC,

as the agency responsible for administering the stat-

ute, is authorized to resolve the ambiguity, see Chev-

ron U.S.A. Inc. vy. Natural Resources Defense Coun-

cil, Inc., 467 U.S. 837 (1984), and it did so here by

upholding this transaction‘ and by rejecting respon-

is satisfied. Resp. Br. 23-24. The Commission recognizes that

the property must be “required for intercity rail passenger

service”; the issue is what that phrase means.

* The ICC noted that Amtrak sought the condemnation here

“so that [Montrealer] passenger service may be resumed over

frespondent’s] line,” Pet. App. 122a, and it recounted Am-

trak’s explanation that “it was compelled to discontinue this

service in April 1987 due to the deterioration of [respond-

ent’s] tre-’. segments along the route”; that Amtrak “cannot

reach agreement with [respondent] for the resumption of this

service”; and that respondent “is considering discontinuance

of rail service altogether on the line.” Jhid. Against that

background, the ICC reasonably found that “Amtrak has

demonstrated sufficient reason to justify acquisition of owner-

ship of the line” in order to restore Montrealer service. /d.

at 43a. Contrary to the repeated claim of respondent and

its amici (Resp. Br. 2 n.1, 22 n.8, 42-43; Amici Concerned

Railroads Br. 30), that finding was adequate. “The explana-

tion may have been curt, but it surely indicated the determina.

tive reason for the final action taken.”” Camp V. Pitts, 411 U.S.

138, 143 (1973).

7

dent’s view that Amtrak must show that no “lesser”

interest than fee simple acquisition could possibly suf-

fice.” The ICC’s approach is a permissible one; it is

consistent with the language of the statute and it rea-

sonably implements the statute’s purpose of giving

Amtrak the remedies it needs to structure a network

of routes for intercity rail passenger service.

Respondent contends (Resp. Br. 26-28) that the

ICC’s interpretation allows Amtrak to enter into ar-

rangements that conflict with an asserted policy

against cross-subsidization within the rail industry.

The Rail Passenger Service Act, however, establishes

as goals for Amtrak the “[e]ncouragement of * * *

the private sector to share the costs of operating rail

passenger service * * * in order to minimize Federal

subsidies” and the “[d]evelopment of service on rail

corridors, subsidized by * * * private parties.” 45

U.S.C. 501a(2) and (7). Section 402(a) explicitly

allows the ICC to grant Amtrak prescribed trackage

rights upon paying the railroad’s incremental cost—

a rate that provides a subsidy to Amtrak since it does

not include a share of fixed costs.” In light of those

° The ICC did not delineat~ all of the other possible situa-

tions to which Section 402(d) might apply beyond the facts

presented to it. Accordingly, respondent’s claim (Resp. Br. 43

n.28) that the decision “undermine[s] any limitation on the

use of section 402(d) authority” is incorrect.

“The cross-subsidy that Section 402(a) prohibits is the

cross-subsidy of a freight railroad by Amtrak, when Amtrak

is the party granting trackage rights. 45 U.S.C. 562(a) (2).

Respondent cites no case applying a similar policy to Am-

trak’s receipt of services. Most of the “cross-subsidy” cases

cited by respondent (Br. 25 n.16) involve freight trains, not

passenge: trains, and the one that does involve passenger

trains does not involve Amtrak. In any event, the Commis-

sion subsequently vacated it when the parties settled. Chicago

8

provisions, the ICC’s approval of a reconveyance trans-

action under Section 402(d) is not invalid because it

permits a more efficient arrangement for the use of

the property by Amtrak.

Nor is the validity of the ICC’s construction under-

mined by a supposed conflict with “settled principles

of eminent demain law.” Resp. Br. 30. Respondent

argues that Section 402(d) must be construed nar-

rowly because it confers eminent domain authority

on a private corporation, and because of a presump-

tion that a private condemnor may take only the

amount of property that is strictly necessary to fulfill

the public use that justifies the taking. The eminent

domain authority in this case, however, is adminis-

tered by the ICC, an agency of the United States.’

The ICC is required to make the determinations iden-

tified by Congress to support the condemnation, and

it has the power to reject applications that constitute

South Shore & South Bend R.R. Discontinuance of Passenger

Trains Under 49 U.S.C. 10908, Finance Docket No. 31348

(served Dec. 15, 1989).

‘The procedure for condemnation under Section 402(d)

thus contrasts with Amtrak’s eminent domain authority under

Section 305(d), 45 U.S.C. 545(d), for the taking of non-rail

property. Section 305(d) permits Amtrak to file a condemna-

tion petition in district court; the ICC is not involved. In

National R.R. Passenger Corp. Vv. Two Parcels of Land, 822

F.2d 1261 (2d Cir.), cert. denied, 484 U.S. 954 (1987), the

court found Amtrak’s rights under Section 305(d) to be of

the more “limited” condemnation authority—because exercised

by a private party rather than the government—which does

“not include sovereign powers greater than those expressed or

necessarily implied.” United States v. Carmack, 329 U.S. 230,

243 n.13 (1946) (dictum). The ICC’s integral participation

in a taking under Section 402(d) distinguishes that provision

from Section 305(d).

9

an abuse of the Act. See Pet. App. 41a-42a (finding

that Amtrak “has not abused the process available

under § 402(d)” in this case). Cf. ICC v. American

Trucking Ass’ns, 467 U.S. 354, 365 (1984).

In entrusting Amtrak’s condemnation of rail prop-

erty to the administration of the ICC, Congress in-

vested the agency with the power to resolve the policy

questions raised by ambiguous statutory provisions;

the ICC is not required to use common law presump-

tions that apply when courts must fill gaps in vague

statutes. Chevron mandates judicial deference to the

ICC’s reasonable interpretations of a statute when

Congress has not spoken to the precise issue; that

rule does not contemplate judicial review to see

whether the agency’s analysis accords with how a

court might have interpreted the same provisions in

light of common law presumptions that may or may

not accord with agency policy and expertise. 467

U.S. at 843-844.*

2. Section 402(d), as construed by the ICC, is constitu-

tional

Respondent contends (Resp. Br. 36) that, if the

ICC did permissibly construe Section 402(d), the

taking in this case violates the Public Use Clause of

the Fifth Amendment because it permits “the trans-

fer of private property from one private owner to

* See Michigan Citizens for an Independent Press v. Thorn-

burg, 868 F.2d 1285, 1292 (D.C. Cir.) (“Chevron implicitly

precludes courts picking and choosing among various canons

of statutory construction to reject reasonable agency inter-

pretations of ambiguous statutes. If a statute is ambiguous,

a reviewing court cannot reverse an agency decision merely

- because it failed to rely on any one of a number of canons of

construction.”), aff’d by an equally divided Court, 493 U.S.

38 (1989).

10

another, with no corresponding change in public use.”

That claim is flawed both factually and legally.’

The ICC did not simply approve a transfer of ihe

line from A to B. The order instead approved a

transfer from a landlord that had allowed the line to

deteriorate, had no incentive to maintain the line in

the condition required by Amtrak, and had no agree-

ment with Amtrak permitting Amtrak to run its

trains on the track,"’ to a landlord that had main-

tained its portion of the line in the past (J.A. 48),

had every incentive to do so because (unlike respond-

ent) it had no alternative route for its trains, and

was willing to enter into a 20-year trackage rights

agreement with Amtrak. The result was not simply

a change in ownership from A to B but a consequent

® Also flawed is the suggestion of Amici Concerned Rail-

roads (Br. 23-30) that Section 402(d) should be construed to

avoid reaching this constitutional question. This Court has

remarked that it “cannot press statutory construction ‘to the

point of disingenuous evasion’ even to avoid a constitutional

question.” United States v. Locke, 471 U.S. 84, 96 (1985),

quoting Moore Ice Cream Co. V. Rose, 289 U.S. 373, 379

(1933). In light of Congress’s 1990 amendment of Section

402(d), that principle directly applies here. In any event,

there is no reason to avoid the issue because Section 402(d)

as construed by the ICC, is constitutional.

\ See National R.R. Passenger Corp. Vv. Boston & Maine

Corp., Nos. 72 & 74 (Nat’l Arb. Panel Nov. 7, 1988), slip op.

1. Respondent’s assertion (Resp. Br. 36) that the use of the

line did not change because, both before and after the con-

demnation, “Amtrak had a contract for the use of that line”’

is incorrect. Respondent gave notice to Amtrak on May 6,

1987, that it was cancelling the Operating Agreement between

the parties; respondent contended in the D.C. Circuit that the

trackage rights agreement with Amtrak had expired, see Pet.

Br. 5 n.4; and respondent informed the Commission that the

agreement between the parties was “terminated.” J.A. 97.

11

change in use allowing restoration of Montrealer

service over the line."

In the face of that record, there is no factual basis

for respondent’s claim that the condemnation and

transfer of the line did not bring about a “changed,”

and clearly valid, public use, even under the legal

test respondent advocates. It has long been settled

that the takings power can be used to transfer prop-

erty between railroads in order to permit the develop-

ment of new railroad uses. Richmond F. & P. R.R.

v. Louisa R.R., 54 U.S. (13 How.) 71 (1851) (up-

holding the authority of a State to exercise eminent

domain to take the property of one railroad that

is authorized to run passenger trains and convey it to

another railroad that is authorized to run freight

trains).

Respondent’s constitutional claim is also unsound

as a matter of legal principle. This Court has held

that the determination of what constitutes a “public

use” is essentially one for the legislature, and the

legislature has wide latitude to authorize the com-

pensated transfer of property between private own-

'! Prior to the condemnation, respondent’s line was not used

for any passenger train service. Respondent had been granted

permission in 1967 to abandon its common carrier obligation

to provide passenger service (see Pet. Br. 5 n.3), and Amtrak

discontinued Montrealer service on April 5, 1987, nearly one

year before instituting condemnation proceedings (Pet. App.

9a, 12la-122a). Following the condemnation, however, re-

spondent’s former line is used both for high-speed freight

traffic and for passenger service by Amtrak’s Montrealer.

After being condemned and transferred to Central Vermont,

the line was upgraded by Central Vermont (with $3.1 million

in funds supplied by Amtrak and additional funds supplied by

the State of Vermont, see Vermont Br. 9-10 & n.8) and

Montrealer service has resumed. Pet. App. 13a.

12

ers in order to accomplish a permissible public objec-

tive. In Berman v. Parker, 348 U.S. 26, 33 (1954),

this Court upheld legislation authorizing the taking

of real property in blighted areas of the District of

Columbia for the purpose of transferring it to pri-

vate entities that would redevelop it. /d. at 28-30.

The Court made clear that “[t]he role of the judici-

ary in determining whether that power [of eminent

domain] is being exercised for a public purpose is an

extremely narrow one.” 7d. at 32.

In Hawaii Housing Authority v. Midkiff, 467 U.S.

229, 242-243 (1984), the Court enunciated an equally

broad view of the legislative power to authorize com-

pensated transfers between private owners. There,

in order to reduce the concentration of ownership of

real property, Hawaii established a program author-

izing the transfer, with just compensation, of prop-

erty titles from lessors to lessees. In holding that the

program satisfied the requirements of the Public Use

Clause, the Court stated that “when the legislature

has spoken, the public interest has been declared in

terms well-nigh conclusive.” Jd. at 239, quoting

Berman, 348 U.S. at 32. The role of a reviewing

court is therefore “extremely narrow,” and a legis-

lative judgment as to a public use will be accepted

“unless the use be palpably without reasonable foun-

dation.” 467 U.S. at 241, quoting United States v.

Gettysburg Elec. R.R., 160 U.S. 668, 680 (1896).

“[W]here the exercise of the eminent domain power

is rationally related to a conceivable public purpose,

the Court has never held a compensated taking to be

proscribed by the Public Use Clause.” 467 U.S. at

241."

"In light of those holdings, respondent’s reliance (Resp.

Br. 37-38) on a handful of turn-of-the-century state cases is

13

Section 402(d) easily passes muster under those

principles. As amended in 1990, Section 402(d)

authorizes Amtrak to convey condemned rail prop-

erty to a third party only “if such reconveyance is

found by the [ICC] to further the purposes of this

[Rail Passenger Service] Act.” The purposes of the

Act—the provision of safe, reliable, and economical!

passenger train service—are undeniably ones within

Congress’s power to pursue. See United States vy.

Joint Traffic Ass’n, 171 U.S. 505, 570 (1898) (“Tak-

ing land for railroad purposes is a taking for a pub-

lic purpose, and the fact that it is taken for a public

purpose is the sole justification for taking it at all.

The business of a railroad carrier is of a public

nature.”’)."

misplaced. No decision of this Court has struck down a taking

on the “‘no change of use theory’; nor do the Nineteenth Cen-

tury cases of this Court cited by respondent articulate such a

limitation on the condemnation power. Berman and Midkiff

make clear that, on the level of generality at which respondent

analyzes the issue, it is fully permissible to change the owner-

ship of private property without changing its use, provided

there is an underlying public purpose to which the condemna-

tion is rationally related. See Midkiff, 467 U.S. at 243-244

(“The mere fact that property taken outright by eminent

domain is transferred in the first instance to private bene-

ficiaries does not condemn that taking as having only a pri-

vate purpose. * * * In such cases, government does not itself

have to use the property to legitimate the taking; it is only

the taking’s purpose, and not its mechanics, that must pass

scrutiny under the Public Use Clause.”).

'S As respondent acknowledges (Resp. Br. 42 n.27), it has

long been settled that railroad service is a “public use.”” See

Secombe V. Railroad Co., 90 U.S. (23 Wall.) 108, 118 (1874);

Olcott v. The Supervisors, 83 U.S. (16 Wall.) 678, 694-695

(1872). Likewise, it is settled that the public purposes served

by a national rail system may take precedence over the inter-

ests of particular private owners. See New Haven Inclusion

14

Section 402(d) is also a rational means to imple-

ment Congress’s purpose. This case illustrates how

Amtrak’s condemnation of rail property and subse-

quent transfer to another railroad can benefit the

operations of a national passenger train network.

Respondent’s parent owns a rail line that parallels

the track at issue in this case, and thus respondent

had neither the need nor the desire to maintain the

track in the high-speed condition that Amtrak re-

quires. J.A. 38-39. The predictable result was poor

maintenance and frequent delays. J.A. 41, 43. Cen-

ural Vermont, in contrast, has no alternative line and

therefore has an independent incentive to upgrade

the track to high-speed condition and to maintain the

track in good working order. J.A. 116, 118, 121.

Transfer of the track to Central Vermont therefore

affords substantial benefits to the regular and efficient

operation of the national passenger train service that

Amtrak was created to provide."

Whatever policy objections respondent may have to

this approach, those objections do not amount to a

valid claim under the Public Use Clause. This Court

stated in Midkiff that “[a] purely private taking’—

one “executed for no reason other than to confer a

Cases, 399 U.S. 392, 491-492 (1970) ; Reconstruction Finance

Corp. V. Denver & R.G. W. R.R., 328 U.S. 495, 535-536 (1946).

Against that background, there is no reason to think that any

compensated transfer of property between railroads, carried

out under conditions established by Congress, raises an issue

under the Public Use Clause.

'* Contrary to respondent’s contention (Resp. Br. 22 n.8),

the ICC’s counsel in the court of appeals did not disavow the

view that another party besides respondent was needed to

have the line rehabilitated; what the ICC’s counsel said was

that the root of the problem was not respondent’s competence

to maintain the line, but its “willingness to commit the re-

sources to do it.” Tr. 35.

15

private benefit on a particular private party’”—would

not be able to “withstand the scrutiny of the public

use requirement.” 467 U.S. at 245. Section 402(d)

does not authorize a “purely private taking.” If

Amtrak sought to take property solely to further the

objectives of a private party, the ICC could not, and

would not, authorize the transaction. But the ICC re-

jected respondent’s contention in this case that the

taking and reconveyance of its property were de-

signed solely to further private aims of Central Ver-

mont, and that conclusion is amply supported by the

record. Pet. App. 41a-42a.

The transaction in this case allowed Amtrak to

rehabilitate a rail line that was badly dilapidated,

and to obtain from Central Vermont a guaranty of

20 years of proper maintenance and a commitment

giving Amtrak the right to operate its trains at a

reasonable compensation level. Moreover, Amtrak

contributed $3.1 million towards the rehabilitation of

the line that Congress specifically appropriated to

revitalize the Montrealer. Pet. App. 41a-42a. The

State of Vermont and the Commonwealth of Massa-

chusetts supported the transaction before the ICC, as

did all of the affected shippers. Jd. at 85a. And the

ICC specifically determined that the transaction was

in the public interest." In light of that record, re-

spondent cannot sustain its claim that this transaction

violates the Public Use Clause.

'’ The ICC considered and rejected respondent’s claim that

Amtrak had “abused the process available under § 402(d) by

means of its dealings with [Central Vermont].” Pet. App.

42a. Prior to its approvai of the instant transaction, the ICC

also made clear that it “will not permit transfers that are not

in the public interest and consistent with the relevant statu-

tory criteria.” /d. at 43a.

16

3. The ICC’s factual findings adequately support its order

Finally, respondent contends that the ICC’s order

is infirm for lack of adequate factual findings.

Resp. Br. 40-45. First, respondent claims that the

ICC’s findings are insufficient to establish that the

property was “required for intercity rail passenger

service.” This argument, however, simply reformu-

lates respondent’s mistaken claim that, before per-

mitting a condemnation-and-transfer transaction, the

Commission must consider whether trackage rights,

an easement, a lease, or some other lesser estate would

suffice. Resp. Br. 43. As the ICC construed the stat-

ute, those findings were not necessary, and as Con-

gress confirmed in ISBA, even when Amtrak’s ulti-

mate aim is use, not ownership, Amtrak may still

condemn rail property if the ICC finds that the trans-

action will further the purposes of the Rail Passenger

Service Act.

Second, respondent faults the ICC’s consideration of

the issue of whether respondent would suffer “signifi-

cant impairment” of its common carrier functions as a

result of the condemnation. 45 U.S.C. 562(d)(1) (A).

As we explain in our opening brief (Pet. Br. 31-32),

the ICC expressly conditioned this condemnation on

a grant of trackage rights to respondent that ensured

that respondent could serve its existing local custom-

ers. The ICC was entitled to find, and did find, that

that agreement adequately protects respondent’s abil-

ity to fulfill its common carrier obligations. Pet.

App. 43a.

Third, respondent challenges the agency’s conclu-

sion that the parties were “unable” to reach agree-

ment for the sale of the property. It is clear enough,

however, that respondent told Amtrak in unqualified

terms that it saw “no need to pursue the very com-

—

17

plex ‘offer to purchase’’’ made by Amtrak, J.A. 60,

and the “detailed history of [Amtrak’s] dealings and

negotiations with B&M over the Conn River Line”

demonstrated that the parties’ positions were unlikely

to converge. The ICC permissibly concluded that the

parties were unable to agree on a sale. Pet. App.

130a.

In any event, if the ICC’s findings were not suffi-

cient to support its order, or if the ICC erred in its

interpretation of the criteria for establishing Am-

trak’s right to condemn the track at issue, the proper

disposition would be to remand the case to the ICC

for additional explanations, or for an evaluation of

facts in light of the correct legal standard. See JCC

v. Clyde S.S. Co., 181 U.S. 29, 32-33 (1901); Federal

Power Comm'n vy. Idaho Power Co., 344 U.S. 17, 20

(1952); Consolidated Rail Corp. v. National Associa-

tion of Recycling Industries, Inc., 449 U.S. 609, 612

(1981).

For the foregoing reasons and the reasons set forth

in our opening brief, it is respectfully submitted

that the judgment of the court of appeals should be

reversed.

JOHN G. ROBERTS, JR.

Acting Solicitor General *

ROBERT S. BURK

General Counsel

Interstate Commerce

Commission

JANUARY 1992

* The Solicitor General is disqualified in this case.

ty Uv S. GOVERNMENT PRINTING OFFICE 1992 $12324 45229