Petition for Writ of Certiorari — Tuolumne Park & Recreation District v. Interstate Commerce Commission

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3 9 = 7 Ol Supreme Court, U.S,

FILED

——EE_>E====____ MANS NO. JR,

: CLERK

IN THE | Ai

Supreme Court of the Buiter 8 aes

OCTOBER TERM, 1989

TUOLUMNE PARK and RECREATION DISTRICT,

and FRIENDS OF SIERRA RAILROAD, INC.,

- Petitioners,

INTERSTATE COMMERCE COMMISSION,

UNITED STATES OF AMERICA, and

FIBREBOARD CORPORATION,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TC THE

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

CHARLES H. MONTANGE

(Counsel of Record)

1400 - 16th Street, N.W., #301

Washington, D.C. 20036

(202) 797-5427

Attorney for Petitioners

Tuolumne Park and Recreation

District and Friends of Sierra

Railroad, Inc.

THOMAS MAROVICH

24 S. Washington Street

Sonora, California 95370

(209) 532-6937

Attorney for Petitioner

Tuolumne Park and Recreation

October 1989 District

Pa EE

WILSON - EPpzs PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001

ee eee

QUESTIONS PRESENTED

1. May federal agencies, under the guise of “fast

track” licensing procedures, abandon compliance with

fundamental environmental and historic preservation

laws, and insulate their unlawful conduct both from pub-

lic knowledge and input and from judicial review by

means of inadequate and fictional notification provisions?

2. Did the court of appeals err in holding that the 60-

day time period provided under 28 U.S.C. § 2344 for

seeking judicial review of an order of the Interstate Com-

merce Commission is applicable and runs from the date

of a Federal Register notice when (a) mere Federal Reg-

ister notice is inadequate and unlawful under binding

regulations of the Council on Environmental Quality in-

terpreting the National Environmental Policy Act

(NEPA), 42 U.S.C. § 4321, et seq., and is inconsistent

with equally applicable regulations of the Advisory Coun-

cil on Historic Preservation (ACHP) interpreting section

106 of the National Historic Preservation Act, 16 U.S.C.

$ 470f; (b) the parties seeking judicial review com-

plained of violations of NEPA and NHPA, which viola-

tions are clear and admitted, and which constituted a

total failure by ICC to do anything to comply with either

statute; and (c) the parties seeking judicial review did

not have actua! notice of the agency action, nor reason-

able access to the Federal Register, nor any reasonable

opportunity to raise issues before the agency, nor any

non-fictional opportunity even simply to seek enforcement

of NEPA and NHPA?

3. Are petitioners Tuolumne Park and Recreation Dis-

trict and Friends of Sierra Railroad denied due process

of law, in violation of the Fifth Amendment of the

United States Constitution, through a “constructive” no-

tice procedure virtually guaranteed not to reach parties

affected by agency action in time to allow them either to

(i)

exercise rights in front of the agency or to obtain judi-

cial review of clearly unlawful agency actions?

4, Did the court of appeals err in holding that this

Court’s decision in ICC v. Brotherhood of Steam Locomo-

tive Engineers, 482 U.S. 270 (1987), applies to cut off

any meaningful judicial review of agency action even

when, because of manifest lack of notice to interested

persons, the only realistic means to present an issue to

the agency is on a petition for reconsideration or to re-

open, and the agency refuses to do anything?

iii

PARTIES TO THE PROCEEDING

The parties are:

Petitioners:

Tuolumne Park and Recreation District and Friends cf

Sierra Railroad, Inc.

Respondents:

Interstate Commerce Commission, United States and Fi-

breboard Corporation.

TABLE OF CONTENTS

| eT

PARTIES TO THE PROCEEDING ..............................

Ce Ge ED vicercscninenneeeincennmesecemnemnnwens

SN MIT cepctcrnsesnianiinigiecesasnsssinnnaitnnacencinsiimeamints

JURISDICTION OF THIS COURT ....................

CONSTITUTIONAL PROVISIONS, STATUTES AND

REGULATIONS INVOLVED .......... Kiciliiceeieiccacteeiatiies

STATEMENT OF THE CASE ...........................0............

B. Sierra Railroad Abandonment .............................

REASONS FOR GRANTING THE WRIT .................

I. Constructive Notice as Provided Here Violated

Petitioners’ Due Process Rights ...........0....

II. ICC May Not Use Accelerated Abandonment

Procedures to Avoid Compliance with Manda-

tory Environmental Review Statutes Such as

RE ere. RN mee ck ae

III. The Nint!. Circuit Misapplied This Court’s De-

cision in ICC v. Brotherhood of Steam Locomo-

RU I incr iccteticcnicsisetniensiennthiahiduetbiteceintbiaainas

IV. ICC Cannot Avoid Compliance with NEPA and

NHPA on Harmless Error Grounds ...................

TE wsickixeciiennnsinesvnninapcnsisniaedeainieidataanabaiaiae

TABLE OF CONTENTS—Continued

APPENDICES Page

Appendix A—Ninth Circuit Opinion and Notice of

Judgment Entry .............. ; - la

Appendix B—ICC Decision served Jan. 26, 1988...... 18a

Appendix C—ICC Decision served July 20,1987... 3la

Appendix D—California State Historic Resources

Commission staff evaluations ; Letter,

T. King (ACHP) to C. Bausch

(ICC), Jan. 30, 1986; Letter, C.

Bausch to T. King, Feb. 18, 1986;

Memo, W. Southard to Donald Shaw,

/ 4 ) eee eee 5la

Appendix E—Constitutional Provisions, Statutes

RE TIED cccncvetemsnntntisnns 6la

vii

TABLE OF AUTHORITIES

Cases Page

Aberdeen & Rockfish R. Co. v. SCRAP, 412 US.

Si, MIE catenin tisnenntersbinenicmpensitennsianidbeeninemmmeandeamin 18

Aberdeen & Rockfish R. Co. v. SCRAP, 422 U.S.

Ge atriedllnn ac nsenitshinsnnntvenacnemnnnibiaainanitiethinniane 5, 26

Allison v. Block, 723 F.2d 631 (8th Cir. 1983) fie 16

Amoco Production Company v. United States, 619

fb 8 16

Andrus v. Sierra Club, 442 U.S. 347 (1979) .......... 5

Chicago & North Western Transp. Co. v. United

States, 678 F.2d 665 (7th Cir. 1982) .................. 24, 25

Cleveland Board of Education v. Loudermill, 470

es Ce SIE etenesssecneeenemnamnnnsmneuinebennnbinten 14

Harlem Valley Transp. Ass’ n v. Stafford, 500 F.2d

lenin 5

Illinois Commerce Commission v. ICC, 787 F.2d

I es Ne I eccnisrtcinnnncninitennthinicibidedibeinanaas 18

Illinois Commerce Commission v. ICC, 848 F.2d

1246 (D.C. Cir. 1988), cert. denied, 109 S.Ct.

SF EEO oe 5, 9, 18, 19, 20, 21, 22

International House v. NLRB, 676 F.2d 906 (2d

ESTEE ERE oer seer en ne SE 14

Interstate Commerce Commission v. Brotherhood

of Steam Locomotive Engineers, 482 U.S. 270

I iti stinnaiedielteeth ahd ctetesaine caida haan tata 12, 21, 22

LaFlamme v. FERC, 852 F.2d 389 (9th Cir.

REE Sie Pree ee ate ea ee eT ee oe OD en 21

Matzke v. Block, 732 F.2d 799 (10th Cir. 1984)... 16

Mullane v. Central Hanover Bank, 339 U.S. 306

FEE aa ee ie Ramee 14, 15, 16

National Center for Preservation Law v. Landrieu,

496 F. Supp. 716 (D.S.C.), aff'd, 635 F.2d 324

GD ne nia alcllioaadeeiendnetiiadinbhs 5

Northwest Coalition for Alternatives to Pesticides

v. Lyng, 844 F.2d 588 (9th Cir. 1988) .............. 20

Oil, Chemtcat-and Atomic Workers v. Zegler, 768

of bo § ) §. § an ll

Panama — Company v. — 293 U.S. 388

viii

TABLE OF AUTHORITIES—Continued

Page

Reed v. Meserve, 487 F.2d 646 (ist Cir. 1973)...... 25

Robertson v. Methow Valley Citizens Council, 109

SX ee eee 24

Telecommunications Research & Action Center v.

FCC, 750 F.2d 70 (D.C. Cir. 1984) —.................... ll

The Steamboaters v. FERC, 759 F.2d 1382 (9th

GE SED srneeiscesecnsccastnssessnntioanibniiciendaticnnhenaibadidahiiniatenn 5

Trustees for Alaska v. Hodel, 806 F.2d 1378 (9th

Cir. 1986) ......... sliaieinianeiniasisnainaseiiiatantidadtmcaiddgtadiniaiaadinn 19

United States v. Markgraf, 736 F.2d 1179 (7th

Cir. 1984), cert. dismissed per Rule 58, 469 U.S.

Ey SUITED ccnncinesnseesnbbnniintnieibiahndumentineiabiaiadbeeeimnetiion 16

WATCH v. Harris, 603 F.2d 310 (2d Cir. 1979) .... 21

U.S. Constitution

AEA

Statutes

Administrative Orders Review Act,

49 U.S.C. § 2344........... ioe adelaeiaaasnabepiahaaniainiiacanieans 12

Federal Register Act,

49 Stat. 500 (1935)... Aaibeinashesainaia cienaeibiedis me 16

Nationa! Environmental Policy Act,

Section 102, 42 U.S.C. § 4332 .............................. 2, 4,5

National Historic Preservation Act,

Section 106, 16 U.S.C. § 470f —...0.......... 2,5, 10,17

Section 211, 16 U.S.C. § 470s ........................... 5

Revised Interstate Commerce Act,

SR sacudctmnelional 4,5, 17,19

49 U.S.C. § 10908 .................... POLAR tee Otto Ss 8 3

TT A aE 3, 4,17

SE a sees 13, 24, 25

| eee 18

Other, :

EER eee ae TN 1

SE OEE nn eR 12

EERE, Ero — 2

a ee

TABLE OF AUTHORITIES—Continued

Regulations Page

Advisory Council on Historic Preservation

ee z 6

EE 6, 20

Interstate Commerce Commission

49 C.F.R. § 1152.50 (1985) .............. 2, 8, 5, 18, 19, 28

Council on Environmental Quality

RI ES 2, 5, 19, 20

Legislative History

Conf. Rep. No. 1430, 96th Cong., 2d Sess. (1980) .. 22

Books

3 Blackstone, Commentaries on the Laws of Eng-

land (1768)... ESET EA Ec DNV SEEDPEER EOD = 16

D. Deane, Sterra Railroad (1960)... 6

L. Jaffe & N. Nathanson, Administrative Law (3d

SEI SAREE Serer SRN ie ee 16

L. Jensen, The Movie Railroads a 6

Interstate Commerce Commission, 1988 Annual

I I ic 3

T. Wurm, Hetch-Hetchy and Its Dam Railroad

IES Se a 6

Other

43 Fed. Reg. 55978 (1978) 2.00. Seishiecabiadieceadaee 19

46 Fed. Reg. 18087 (1981)..................................000..... 5, 20

46 Fed. Reg. 22060 (1981) ae 7

50 Fed. Reg. 180 (1985)

IN THE

Supreme Court of the United States

OCTOBER TERM, 1989

No. 89-

TUOLUMNE PARK and RECREATION DISTRICT,

and FRIENDS OF SIERRA RAILROAD, INC.,

m Petitioners,

INTERSTATE COMMERCE COMMISSION,

UNITED STATES OF AMERICA, and

FIBREBOARD CORPORATION,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

The petitioners, Tuolumne Park and Recreation Dis-

trict and Friends of Sierra Railroad, Inc., respectfully

pray that a Writ of Certiorari issue to review a judg-

ment of the United States Court of Appeals for the Ninth

Circuit.

OPINIONS BELOW

The decision of the court of appeals below is reported

at 881 F.2d 663 (July 31, 1989). The decisions of the

Interstate Commerce Commission (ICC) are unreported.

All decisions are set forth in the appendix.

JURISDICTION OF THIS COURT

The decision and judgment of the court of appeals from

which this petition is taken was entered on July 31,

1989. Pursuant to 28 U.S.C. § 2101(c), petitions for a

writ of certiorari may be filed within ninety days after

entry of judgment. The jurisdiction of this Court is in-

voked under 28 U.S.C. § 1254(1).

CONSTITUTIONAL PROVISIONS, STATUTES

AND REGULATIONS INVOLVED

The following constitutional provisions, statutes and

regulations, all set forth in the appendix, are involved in

this case: (1) the Due Process Clause of the Fifth

Amendment of the United States Constitution; (2) sec-

tion 102 of the National Environmental Policy Act

(NEPA), 42 U.S.C. § 4832; (3) section 106 of the Na-

tional Historic Preservation Act, 16 U.S.C. § 470f; (4)

various provisions of the Revised Interstate Commerce

Act, including 49 U.S.C. §§ 10905-06; (5) various regu-

lations of ICC, including especially 49 C.F.R. § 1152.50

(1985); and (6) various regulations of the Council on

Environmental Quality (CEQ), including especially 40

C.F.R. § 1506.6.

STATEMENT OF THE CASE

This proceeding, arising out of a railroad abandon-

ment case before the ICC, presents questions of nation-

wide, and government-wide, importance relating to how

far federal agencies may go in avoiding any compliance

whatsoever with the Nation’s environmental and _his-

toric preservation laws through so-called “fast track”

licensing procedures. In this case, the fast-track proce-

dure involved manifestly deficient provisions for public

notice combined with non-existent review of environ-

mental and historic resource impacts. Local agencies and

preservational groups, including petitioners, interested in

avoiding adverse environmental and historic resource im-

pacts were totally deprived of rights guaranteed by fed-

eral law.

A. Statutory background.

ICC regulates railroad abandonments. Rail lines mov-

ing freight in interstate commerce in general may not

be abandoned nor may service be discontinued without

ICC approval.’ Congress has adopted an elaborate regime

providing for public notice of proposed abandonments,

and an opportunity to be heard, before the ICC acts. 49

U.S.C. § 10904. This notice includes publication of lines

for which abandonment is imminent in a “system dia-

gram map,” ? wide dissemination of a “notice of intent’

to file an abandonment application,’ newspaper notifica-

tion for at least three weeks in advance of filing of an

abandonment application,* posting of the “notice of in-

tent” at stations,® and provision of 30 days in which to

comment before the agency acts.®

Most rail abandonments, however, are no longer gov-

erned by these “statutory” notice procedures. To the

contrary, two-thirds to three quarters of all abandon-

ments are now governed by “exemption” procedures.’

149 U.S.C. § 10903(a) (1).

249 U.S.C. § 10904 (e) (3).

3 Jd. (a) (3).

* id. (a) (3) (C).

5 Id. (a) (3) (B).

6 Id. (b).

7Data from ICC’s 1988 Annual Report (p. 129) indicates as

follows:

FY 1986 FY 1987 FY 1988

abandonment

applications—filed 141 60 50

granted 117 60 47

notices of

exemption—filed 93 73 46

granted 56 88 43

petitions for

exemption—filed 30 50 84

granted 43 27 71

percentage

“exemptions” —filed 47% 67% 72%

granted 46% 66% 71%

The fact that most abandonments are now “fast-tracked”

underscores the importance of assuring that environ-

mental and historic resource requirements are not ignored

in the process.

More specifically, Congress has afforded ICC authority

to exempt certain transactions or classes of transactions

from full regulation. 49 U.S.C. § 10505. ICC has exer-

cised this “exemption” authority in the context of rail

abandonments in several ways. For example, the agency

frequently grants “petitions for exemption” on a case-

by-case basis, and has also issued “class exemptions.”

The “exemptions” do not exclude the action from ICC re-

view; rather, they “fast-track” that review by cutting

down on the economic data-which must be supplied.

One of the most heavily-used class exemptions in the

rail abandonment area is the class exemption for lines

not used for local traffic for two years. That regulation

is codified at 49 C.F.R. § 1152.50. Under that regulation,

a qualifying carrier files a “notice of exemption” with the

ICC. In contrast to the notice required by 49 U.S.C.

§ 10904, there is no notice to the public, including local

communities. Within 20 days, ICC publishes in the

Federal Register a brief “notice of exemption”—in effect

approving the abandonment without any prior right to

be heard on the part of affected members of the public.

The notice contains no environmental information. Any

interested member of the public has only ten days from

Federal Register publication in which to discover the

Commission’s action and to seek a stay; and twenty days

from Federal Register publication in which to petition for

reconsideration. No other notice to the public and no

other remedies to the public are afforded.

It is established beyond doubt that the requirements of

section 102 of the National Environmental Policy Act

(NEPA), 42 U.S.C. § 4332, apply to ICC abandonment

proceedings,* as do the requirements of section 106 of

the National Historic Preservation Act (NHPA), 16

U.S.C. § 470f.2. ICC expressly admits that, under 49

U.S.C. § 10505, it lacks power to exempt rail abandon-

ments governed by 49 U.S.C. § 1152.50 from these “en-

vironmental” review obligations.’° Under these circum-

stances, the agency in order to comply with NEPA § 102

and NHPA § 106 must consider the impact of each aban-

donment governed by 49 C.F.R. § 1152.50 upon the en-

vironment, including historic resources.

Under regulations of the Council on Environmental

Quality (CEQ), binding upon all federal agencies," reg-

ulatory bodies such as ICC must “[ml]ake diligent efforts

to involve the public” in NEPA related matters (i.e., rail

abandonments). 40 C.F.R. § 1506.6(a). Notice in the

Federal Register, standing alone, is insufficient under the

CEQ regulation even for actions of nationwide applica-

tion,’? much less for matters of local application, such as

most rail abandonments.'* Likewise, under binding’ reg-

ulations of the Advisory Council on Historic Preserva-

tion (ACHP), the ICC has an affirmative obligation to

8 Harlem Valley Transp. Ass’n v. Stafford, 500 F.2d 328, 336 (2d

Cir. 1974). See also Aberdeen & Rockfish R. Co. v. SCRAP, 422

U.S. 289 (1975) (SCRAP I) (NEPA applies to rail regulatory

proceedings).

® Illinois Commerce Commission v. ICC, 848 F.2d 1246, 1261 (D.C.

Cir. 1988) (ICC II).

10366 ICC at 890 & n. 10 (ICC lacks authority to exempt rail

abandonments from “relevant energy and environmental acts’’).

llAndrus v. Sierra Club, 442 U.S. 347, 357 (1979); The Steam-

boaters v. FERC, 759 F.2d 1382, 1392-93 (9th Cir. 1985).

12 40 C.F.R. § 1506.6(b) (1)-(2).

13 40 C.F.R. § 1506.6(b) (3); 46 Fed. Reg. 18037 (1981).

1416 U.S.C.§ 470s; National Center for Preservation Law v.

Landrieu, 496 F. Supp. 716, 742 (D.S.C.), aff'd, 635 F.2d 324 (4th

Cir. 1980).

notify persons and parties known to be interested in an

“undertaking” (including licensing actions) at each

stage in the process of assessing the effect of the proposed

undertaking on historic properties. See 36 C.F.R.

§§ 800.4(d) and 800.5(b), (e) (1) & (e) (3).

B. Sierra Railroad Abandonment.

The Sierra Railroad has been determined historic and

eligible for the National Register of Historic Places by

the California State Historic Resources Commission

(CSHRC)." Originally constructed to serve the gold

mining and timber industries in the southern portion of

California’s “Mother Lode” during California’s “second

gold rush,” '* the railroad also served in the construc-

tion of the dam in the Hetch Hetchy Canyon of Yosemite

National Park.'’ Scenic and traversing areas of natural

beauty, the line has been employed in many movies and

television productions.'* A state historic park, Railtown

1897, is located adjacent to it."* In 1981, in a finding

reiterated again in 1987, CSHRC unanimously deter-

mined that the Sierra Railroad was “the most intact his-

toric short line railroad in California.” ”

In 1981, the ICC, authorized the abandonment of the

line from milepost 50.0 to milepost 56.2 (termed milepost

57.2 in ICC’s decision) in Tuolumne City in Tuolumne

15 Staff Evaluation of August 7, 1981, reiterated February 6,

1987. See Petitioners’ Opening Brief, below, Exhibit E; reprinted

as an appendix to this Petition.

16 See D. Deane, Sierra Railway (1960) (L/C 60-15648).

17 Jd. 131; T. Wurm, Hetch-Hetchy and Its Dam Railroad 58,

59, 67 & 86 (1973) (L/C 73-87231).

18D. Deane, supra, at 152-54; L. Jensen, The Movie Railroads 5,

14-69, 213-20 (1981) (ISBN 0-933506-05-8).

19 Pro se Petition to Implement Section 106 Review, dated June

18, 1986, before the ICC, below, at 4.

20 See note 15 supra.

County, California.” In its order permitting termination

of common carrier freight service, the Commission noted

expressions of interest in preserving the line because of

its nature as an important historic resource. In par-

ticular, the Commission explained that

Friends of the Sierra Railroad . . . and several

Tuolumne County residents, a merchants association

and the historical society have filed petitions request-

ing that we consider the historic significance of the

route between Stanislaus and Tuolumne, CA. The

petitions chronicle the rich history of Sierra, and

argue that the historic integrity of the line will be

jeopardized by this [abandonment] proposal. The

line has been proposed for iisting in the National

they point out, the entire line must be maintained

intact... .™

Because the abandoning freight carrier had agreed to

hold the line available for a period of time for preserva-

tional purposes,” the Commission nevertheless authorized

the abandonment subject to revocation if the segment

involved was not in fact made available for historic pres-

ervation. The remainder of the line (mileposts 0.0 to

50.0) was transferred to a new owner for continued

freight rail operations, with the seller reserving rights

to operate passenger and movie train services. Negotia-

tions for acquisition of the line from milepost 50.0 to 56.2

for historic and excursion purposes proceeded, first with

Friends of Sierra Railroad (one of the petitioners herein)

and then with petitioner Tuolumne Park and Recreation

District. The District ultimately purchased this portion

of the line, including all track, ties, and structures, for

continued railroad use. The District intends to preserve

the historic railroad, to develop an excursion service to

21 46 Fed. Reg. 22060 (April 15, 1981).

22 46 Fed. Reg. 22060-61 (April 15, 1981).

23 Jd. 22061.

eel

complement the area’s tourist economy, and to stimulate

further movie and television use of the area. ICC staff

advised preservation advocates that they would receive

notice in the event of further proceedings in the matter.

Unbeknownst to the District, Friends of Sierra Rail-

road, or, so far as the record shows, any person or agency

in Tuolumne County, Sierra Railroad filed a “notice of

exemption” with the ICC in late 1984 for mileposts 49

to 50, invoking that agency’s “fast track” rail abandon-

ment procedure in 49 C.F.R. § 1152.50. Pursuant to

§ 1152.50, the Commission, approximately a month later,

without any public notice or opportunity for comment,

granted the exemption, publishing a brief notice to this

effect in the January 2, 1985, Federal Register. It is

undisputed that this is the only “notice” which ICC af-

forded to the citizens of Tuolumne County, including

those manifestly interested in the corridor, and it is

equally undisputed that the nearest Federal Register was

(and evidently still is) at least one hour’s drive from the

County." In the situation here, the “notice’’ could as well

have been published in the London Times, or in Pravda

or Izvestia. Any would have been as likely to inform the

interested public. Neither the Park District, nor Friends,

nor any related entity, nor—so far as petitioners can tell

—any representative of any organization or agency in

Tuolumne County, received any actual notice of the aban-

donment authorization.”

2450 Fed. Reg. 180 (Jan. 2, 1985). Pacific Gas & Electric, a

utility, evidently also was unaware of the notice, but filed a belated

petition for reconsideration on February 21, 1985, approximately

one month out-of-time. This petition was dismissed by ICC on

October 4, 1985, in an unreported and unpublished decision after

the parties amicably settled their differences. Judge Wallace, in his

rendition of the facts, thus incorrectly states that there were “no

objections” filed. 881 F.2d at 665.

25 881 F.2d at 667.

261CC does claim to have served copies of its decision upon cer-

tain state offices. If so, this is highly unusual for decisions under

The lack of any adequate notice exacerbated a key fail-

ing below: the lack of any compliance with NEPA or

NHPA whatsoever. In contrast to its handling of the

line from milepost 50 to 56.2 in 1981, and in the face

of its public acknowledgement of the historic significance

of the entire line at that time, ICC at no point before or

after granting the abandonment authorization for mile-

posts 49 to 50 did anything to comply with either section

106 of the NHPA (which requires ICC to consider the

impact of its action on historic resources and to consult

with the Advisory Council on Historic Preservation), or

section 102 of NEPA (which requires ICC to consider

the environmental and historic preservation impacts of its

actions).*7 As it happens, an historic building, namely

the Standard Railroad Depot, is virtually in the center

of the line from mileposts 49.0 to 50.0 and access to the

area of the Depot is necessary for a logical terminus and

staging area on a county road for excursion use of the

line.*

When, roughly a year later, local residents and officials

discovered, as a result of some destruction of tracks, that

49 C.F.R. § 1152.50, and ICC appears to have abandoned the prac-

tice. In any event, notice to state agencies is manifestly inadequate

here. As noted by the D.C. Circuit in Jilinots Commerce Commission

v. ICC, 848 F.2d 1246, 1260 (1988), “[t]he Commission . . . does not

advance any evidence that state public service agencies wil] [notify

interested local and environmental groups], and, in fact, the Com-

mission’s own staff in comments concerning another exempt.on pro-

ceeding suggest that state agencies do not carry out this function

very well. ‘The designated agency . . . cannot circulate the environ-

mental notice quickly enough to afford any meaningful opportuni-

ties for involvement in the ICC’s decisionmaking process.’ Com-

ments of the Section of Energy and Environment on Class Exemp-

tion for the Construction of Connecting Tracks under 49 U.S.C.

§ 10901.”

27 Letter, Thomas King (Advisory Council on Historic Preserva-

tion) te Carl Bausch (ICC), Jan. 30, 1986; Letter, Carl Bausch

(ICC) to Thomas King (ACHP), Feb. 13, 1986 (Appendix D).

28 See Friends of Sierra Railroad and Tuolumne Park and Rec-

reation District opening brief, below, at pp. 16-17 (map).

Aientesnsinemaie

an abandonment authorization for mileposts 49.0 to 50.0

had been granted, the period for petitioning ICC for a

stay (ten days) or reconsideration (20 days) under 49

C.F.R. § 1152.50 had long since passed.*” They neverthe-

less promptly communicated with ICC.” Similarly, the

Advisory Council on Historic Preservation wrote ICC

requesting compliance with section 106 of the NHPA,™

as did the California State Historic Preservation Officer.”

The Chief of ICC’s Section on Energy and Environment

admitted that the agency had acted oblivious to the ap-

plicability of section 106 of the NHPA,* and indicated

that ICC was seeking the cooperation of the railroad in

“voluntarily” complying.

“Voluntarism” unfortunately did not work. The rail-

road sold the line from mileposts 49.0 to 50.0 to Lou-

isiana Pacific Corporation (now Fibreboard Corporation )

2° In actuality, even if the petitioners had known of the abandon-

ment authorization, ICC procedures then applicable would have

been meaningless to vindicate “environmental” interests. ICC re-

quired extensive showings to obtain a stay, such showings would

be impossible in ten days even with notice, and as a practical mat-

ter the agency never granted a stay in “environmental” cases, not-

withstanding unresolved “environmental” issues. Absent a stay,

the abandonment would become effective (i.e., ICC would have taken

action) rendering environmental review subsequent and thus mean-

ingless. Further, the agency would then take the position that it

had lost jurisdiction to afford substantive relief.

*° E.g., Letter, Mr. Cassasa (FSR) to Mr. Maestro (ICC), April

21, 1986.

5! Letter, Thomas King (ACHP) to Carl Bausch (ICC), Jan. 30,

1986 (Appendix D).

32 Letter, Ms. Gualtieri (Cal. SHPO) to Mr. Car! Bausch (ICC),

Feb. 14, 1986.

33 Letter, Carl Bausch (ICC) to Thomas King (ACHP), Feb. 13,

1986 (Appendix D). ICC’s Director of Governmental Affairs made

a similar admission in response to congressional inquiry. Letter,

B. Gordon (ICC) to Rep. Lehman, Aug. 14, 1986.

1k:

by quitclaim deed recorded on June 18, 1986.% On the

same day Friends of Sierra Railroad petitioned ICC for

compliance with section 106 of the NHPA. This petition

was later joined in by the Tuolumne Park und Recreation

District, as well as supplemented.

ICC initially did nothing. On February 26, 1987,

Friends of Sierra Railroad filed a complaint in the U.S.

District Court for the District of Columbia to compel

compliance with the applicable statute.** On the basis of

Telecommunications Research & Action Center v. FCC,

750 F.2d 70 (D.C. Cir. 1984) and Oil, Chemical and

Atomic Workers v. Zegler, 768 F.2d 1480, 1483 (D.C.

Cir. 1985) (holding that for all cases reviewable in the

court of appeals, all ancillary remedies lie in the appel-

late court as well), this action was voluntarily dismissed

on March 26, 1987, and a petition for review of the

agency’s inaction was filed on the same date in the D.C.

Circuit. Friends filed a motion for summary disposi-

tion on May 8, 1987.

Before the D.C. Circuit acted, ICC, in an unpublished

decision served July 20, 1987,°' denied Friends of Sierra

Railroad and the Park District any relief. The D.C. Cir-

cuit case was dismissed on the basis of ICC’s argument

of July 21, contending that review would now lie from

the agency decision of July 20.

Friends of Sierra Railroad and the Park District filed,

with ICC, a motion to correct what they regarded as mis-

% Fibreboard owns a lumber mill in the sector encompassing

roughly mileposts 49 to 49.5 and is evidently adamantly opposed

to any form of public use of any portion of mileposts 49 to 50, even

for rail transport purposes. Such use has historically occurred, of

course, for well over three quarters of a century.

85 D.D.C. No. 87-0520.

%* D.C. Cir. No. 87-1134.

57 A copy of this decision is reproduced in the appendix.

————

statements in the agency’s July 20 decision.“ In addi-

tion, Friends and the Park District filed a timely petition

for judicial review in the Ninth Circuit under 28 U.S.C.

§ 2344 on September 2, 1987." The petition for review

was held in abeyance, pending resolution by ICC of the

motion to correct. ICC treated the latter motion as one

for reconsideration, and denied it in another unpublished

decision served on January 26, 1988.*°

In a decision issued July 31, 1989, the Court of Ap-

peals for the Ninth Circuit, per Circuit Judge Wallace,

denied the petition for review filed by Friends of Sierra

Railroad and the Park District on the procedural ground

that the court was without jurisdiction to hear the merits

of petitioners’ legal claims. Although the petition for

review was filed within 60 days of ICC’s refusal to com-

ply with NHPA and NEPA, Judge Wallace held that the

court lacked jurisdiction because the proceeding was not

commenced within 60 days of the January 2, 1985 Fed-

eral Register notice, even though the inadequacy of Fed-

eral Register notice was part and parcel of the complaint

of petitioners in the first place. Judge Wallace held in

essence that the legal fiction of constructive notice in the

Federal Register is in all cases binding on parties af-

fected by federal agency actions, and serves to cut off

their rights before the agencies and in the courts. Judge

Wallace reasoned that judicial review of ICC’s subse-

quent refusal to comply with environmental statutes was

barred this Court’s decision in JCC v. Brotherhood of

38 Friends complained in particular that the Commission mis-

takenly intimated it was not interested in invoking § 10905; er-

roneously asserted, without any substantiation whatsoever, that

Friends had “actual” notice; and made the Orwellian claim that

Friends and the Park District had “slept on their rights” when the

true sleepers were at the Commission.

%® Pursuant to 28 U.S.C. § 2321, review of ICC orders such as

those involved here is covered by 28 U.S.C. §§ 2341, et seq.

*° A copy of this decision is also set forth in the appendix.

Steam Locomotive Engineers, 482 U.S. 270 (1987), a

decision which limits judicial review of agency refusals

of petitions to reopen fully litigated administrative pro-

ceedings made by parties to those proceedings. The deci-

sion in effect insulates illegal and deficient “fast track”

licensing procedures from judicial review, so long as they

are coupled with illegal, deficient and fictional notice. It

authorizes government to play “catch me if you can”

rather than to comply with the public disclosure and par-

ticipation requirements that are the heart of NEPA and

NHPA.

The Tuolumne Park and Recreation District and Friends

of Sierra Railroad timely petitioned for certiorari.

REASONS FOR GRANTING THE WRIT

I. Constructive Notice as Provided Here Violated Peti-

tioners’ Due Process Rights.

There can be no doubt that petitioners Tuolumne Park

and Recreation District and Friends of Sierra Railroad

have an interest in preserving an historic resource suf-

ficient to warrant protection by at least the rudiments

of procedural due process in an ICC railroad regulatory

proceeding. That much was established in Aberdeen &

Rockfish R. Co. v. Students Challenging Regulatory

Agency Procedures (S.C.R.A.P.), 412 U.S. 669, 685-88

(1973) (SCRAP 1), which held that an organization

alleging various “environmental” injuries had standing

to litigate against the ICC. But in addition to their

general environmental interest, the Park District and

Friends enjoy rights to acquire the segment in question

under 49 U.S.C. § 10905 and, for that matter, certain

rights under 49 U.S.C. § 10906 as well, for continued rail

use and for public purposes, respectively. In short, the

Park District and Friends were deprived of substantive

as well as procedural rights, and if procedural rights had

hemes

14 .

been accorded, substantive “events on the ground” would

have been different: an historic resource and public

amenity would have been preserved.

One of the rudimentary precepts—indeed, the most

basie precept—of procedural due process is adequate and

timely notice of an opportunity for a meaningful hearing.

An elementary and fundamental requirement of due

process in any proceeding which is to be accorded

finality is notice reasonably calculated, under all the

circumstances, to apprise interested parties of the

pendency of the action and afford them an oppor-

tunity to present their objections. . . . The notice

must be of such nature as to convey the required

information ..., and it must afford a reasonable

time for those interested to make their appearance.

Mullane v. Central Hanover Bank, 339 U.S. 306, 314

(1950). See Cleveland Board of Education v. Loudermill,

470 U.S. 532, 542 (1985); International House v. NLRB,

676 F.2d 906, 911 (2d Cir. 1982).

The only notice afforded below to the public, including

Tuolumne Park and Recreation District and Friends of

Sierra Railroad, was a brief notice, published in the

Federal Register. As noted in the statement of the case,

the Federal Register is not even received in Tuolumne

County, and the Ninth Circuit (based on representations

by intervenor Fibreboard) found that the nearest Regis-

ter was an hour’s drive away.

Federal Register notice is generally adequate notice of

matters which have a national, regional, or even state-

wide impact, because the Register is monitored by at

least some state agencies, by industry trade associations

and major corporations, and by national environmental

groups. However, the notice published in this case re-

lated to an action which was very local in impact—the

~ abandonment of approximately one-mile of railroad

right-of-way in a rural county in California. Rural coun-

ties, their agencies, and their populace lack the resources

to monitor the Register, let alone on a daily basis. The

inadequacy of the notice is further compounded by the

incredibly brief period afforded for seeking critical relief

(namely, a stay)—-a mere ten days from the date of

publication under § 1152.50.

As Justice Jackson said in Mullane v. Central Hanover

Bank, supra, 339 U.S. at 315, “[i]t would be idle to pre-

tend that publication alone as prescribed here, is a reli-

able means of acquainting interested varties of the fact

that their rights are [at issue].” In Mullane, this Court

struck down as affording inadequate notice a state stat-

ute providing for “constructive notice” by way of four

weeks’ publication in a local newspaper. The Federal

relied for purposes of foreclosing all rights putatively

enjoyed by Tuolumne County’s agencies and citizens un-

der NEPA, NHPA, and the Revised Interstate Commerce

Act itself, is for purposes here far less effective notice

than the notice by publication disapproved by this Court

in Mullane. Indeed, the Director of ICC’s Office of

Transportation Analysis explained, with specific refer-

ence to this case, that

It is axiomatic in the law that notice must be of such

nature as reasonably to convey the required informa-

tion. See Mullane v. Central Hanover Bank and

Trust Co., 339 U.S. 306, 314 (1951). This principle

applies equally to the administrative process. The

notice procedures adopted by the ICC for abandon-

ment exemption proceedings are not of such nature,

especially as those procedures apply to the environ-

mental process, including National Historic Preser-

vation Act compliance..... =

41 Memorandum, W.R. Southard (ICC OTA) to D. Shaw (ICC

OP), July 31, 1986 (emphasis added) (reprinted in Appendix D

to this Petition).

There is a certain irony here. The Federal Register

Act, 49 Stat. 500 (1935), was adopted to require filing

and publication of agency orders and regulations in order

to prevent government by secret fiat after this Court’s

critique of such disorder in Panama Refining Company

v. Ryan, 293 U.S. 388 (1935). See L. Jaffe & N.

Nathanson, Administrative Law 63 n.* (3d ed. 1968).

The Act was not intended to permit federal agencies to

deprive local government agencies or citizens of their

federal rights and remedies by converting notice into an

inevitable legal fiction. In any event, “when notice is

a person’s due, process which is a mere gesture is not

due process.” Mullane v. Central Hanover Bank, supra,

339 U.S. at 315.

The doctrine of foreclosing rights on the basis of con-

structive notice is harsh, and resort to it is reluctant.

See Amoco Production Company v. United States, 619

F.2d 1383 (10th Cir. 1980). While ‘constructive notice”

in the Federal Register is frequently held valid against

a regulated industry ‘on the very plausible assumption

that it is the industry’s business to monitor applicable

regulation), such notice is not talismanice as applied to

the general public. For example, in Allison v. Block, 723

F.2d 631, 634-36 (8th Cir. 1983), and Matzke v. Block,

732 F.2d 799; 802 (10th Cir. 1984), the courts of appeal

found similar such “constructive notice” of the avail-

ability of federal remedies inadequate. Constructive no-

tice in the Federal Register is, as applied here, a legal

fiction. As Judge Posner has pointed out, “for more than

200 years we have been told that the proper office of

legal! fictions is to prevent, rather than to create, injus-

tices.” United States v. Markgraf, 736 F.2d 1179, 1187

(7th Cir. 1984) (dissenting opinion), cert. dismissed per

Rule 53, 469 U.S. 1199 (1985), citing 3 Blackstone,

Commentaries on the Laws of England 43 (1768). It is

not much consolation to tell some part-time park com-

missioners, or an interested gas station owner or cafe-

teria operator in Tuolumne County, that he or she ought

to drive an hour to study the Federal Register every day;

again to quote Judge Posner, “it is the kind of response

that breeds popular disrespect for law.” 736 F.2d at

1187.

II. ICC May Not Use Accelerated Abandonment Proce-

dures to Avoid Compliance with Mandatory Environ-

mental Review Statutes Such as NEPA and NHPA.

Congress has made extensive provision for notice in rail

abandonment proceedings. These notice provisions, if fol-

lowed, are adequate to alert interested local individuals,

groups and agencies, including environmental and preser-

vation interests. In particular, 49 U.S.C. § 10904 (e) (3)

operates to require at least four months’ pre-notification

that an abandonment may be sought. And 49 U.S.C.

§ 10904(a) (3) requires a rail carrier seeking authoriza-

tion to abandon a line to provide personal notice of a

proposed abandonment to state officials and to shippers

as well as comprehensive local notice to the affected local

public. Focussing on the notice due the public, the statute

specifically requires the carrier, among other things, to

post a copy of a notice of intent in each terminal and

station on the portion of line to be abandoned, and to

“publish a copy of the notice for 3 consecutive weeks in

a newspaper of general circulation in each county in

which each ... portion [of line to be abandoned] is

located. . . .” 49 U.S.C. § 10904(a) (3)(C) & (D).

In sum, Congress provided that ICC rail abandonment

proceedings should be heralded by more than an after-

the-fact announcement in the Federal Register. Yet that

was all that the public, including local agencies, received

here.

In 1983, ICC, purportedly acting under the authority

of 49 U.S.C. § 10505, adopted a regulation, codified at

49 C.F.R. § 1152.50, which eliminated all notice by the

carrier other than by mail to the chief executive officer of

the state involved. In its place, ICC substituted after-

13 -..

the-fact notification of the abandonment authorization,

by publication in the Federal Register. Under legal chal-

lerigé by ‘a group of state transportation officials and

labor groups, the agency’s so-called “two-year out-of-

service” exemption regulation was remanded in Illinois

Commerce Commission v. ICC, 787 F.2d 616 (D:-C. Cir.

1986)’ (ICC I). On‘remand, ICC without further notice

and ‘comment re-adopted its regulation. The re-adopted

regulation was again challenged by two state transporta-

tion regulatory agencies and by labor. In addition, three

“environmental” groups petitioned for review, noting -

that ICC has adopted 49 C.F.R. § 1152. 50 without com-

pliance with the National ‘Environmental Policy Act’

(NEPA). In particular, the agency had never prepared

an “environmental assessment,” much less an “environ-

mental impact statement” as required by NEPA and

binding regulations of the Council on Environmental

Quality for the regulation. Further, the environmental

groups complained that, under § 1152.50, ICC did not

independently evaluate the impact of its actions on en-

vironmental concerns and historic resources; ** the agency

unlawfully “relied” on “intervenors” to raise such con-

cerns; ** and the agency allowed its abandonment au-

thorizations to become fully effective without any environ-

mental or historic resource assessments. **

In orde¥ to sustain its regtilation, the agency agreed,

in ‘its Brief and at oral argument, independently to assess

the environmental impacts of ‘its actions and automati-

eally to stay the effectiveness of abandonments until com->

plianeé was had with NEPA and NHPA. The court of

appeals for the District of Columbia held that but’ for

these concessions the regulation would have again faced

remand, JCC II, 848 F.2d at 1260. The court indicated

42 ICC II, 848 F.2d at 1258 & n.23.

43 Td. at 1258.

44 Td. 848 F.2d at ‘1259-60.

‘19

that even with these concessions, the regulation, may not

be sufficient to withstand review in particular. instances

absent more from ICC. 848 F.2d at 1260 . (special, cir-

cumstances may render regulatory provisions wnreason-

able). The court admonished ICC that it could not dele-

gate to parties and intervenors its. own responsibility . to

investigate and assess the. environmental impacts of pro-

posals before it. 7d. at 1258.

The proceedings before ICC in the instant case un-

equivocally exhibit all the above infirmities .with ICC’s

procedures under § 1152.50: there was no evaluation of

environmental impacts or impacts on historic .resqurces

below, independently by the agency or otherwise,,.and, not

even an attempt by. the agency to prepare any sort of

environmental or historic resource assessment. The

agency relied wholly on “intervenors” to, raise the, issues,

but with a twist: The agency failed even to. give a d

notice adequate to alert. ‘“fntervenors” , that they had. to

raise the issues or risk foreclosure, and, the time. for

raising the issues would have been inadequate anyway:

ICC admits it cannot exempt itself and rail abandon-

ments from NEPA or-NHPA under 49. U.S.C..-§ 30505.°°

-Yet NEPA and NHPA require effective notice. . More. spe-

cifically, ICC’s proceeding below under -49 G.F;R.

$1152.50 violates binding ** regulations - issued , by . the

Council on, Environmental, Quality. . 40. C.F.R. -§ 1506,6

calls for facilitation of public involvement (see also

Trustees for Alaska, supra,.806 F.2d at 1383) and

specifies the minimum notice required. Federal Register

notice, standing alone, is. inadequate even for actions, of

national significance when they may affect environmental

45 The “environmental” petitioners in JCC JI,did not. seek cer-

tiorari. This Court denied certiorari from JCC, JI when sought by

the state and labor groups. See 109 S.Ct, 783 (1989).

48 366 ICC at 890 & n.10.

47 F.9., Trustees for Alaska v. Hodel, 806 F.2d 1878, 1382 .(9th

Cir. 1986) ; 43 Fed. Reg. 55978 (1978).

concerns. 40 C.F.R. § 1506.6(b) (1) requires notice also

to potentially interested representative groups, a list of

whom each agency is supposed to maintain. Further, each

agency is required to notify personally any person who

requests to be notified. Finally, for proposed actions of

local impact, the agency is given a choice of possible

means of affording notice, including newspaper publica-

tion and personal notice, but not notice limited to the

Federal Register.

The notice afforded by ICC in thé proceeding below

fell far short of ICC’s obligations under NEPA, violating

the binding CEQ regulation in at least two ways. First,

although the proposed action was of local impact, the

agency violated 40 C.F.R. § 1506.6(b) (1) by failing to

afford any notice adequate to reach the county and in-

stead by relying upon a notice procedure which was argu-

ably inadequate even for a regulation of national scope.

46 Fed. Reg. 18037 (1981) (CEQ expressly declares such

notice “a violation of the regulations”). Second, ICC, in

the earlier abandonment proceeding involving mileposts

50 to 56.2 in 1981-82, had pledged to notify locally inter-

ested parties of any actions affecting the line. The agency

of course did not, and this violated 40 C.F.R. § 1506.6

(b) (1). See Northwest Coalition for Alternatives to

Pesticides v. Lyng, 844 F.2d 588, 595 (9th Cir. 1988)

(agency violates § 1506.6(b) (1) in similar situation).

Likewise, the regulations of the ACHP implementing

the NHPA require public notice and involvement far

beyond what was afforded here. ICC flatly violated re-

quirements like 36 C.F.R. § 800.5(b) in its non-notifica-

tion below.

In short, the Federal Register notice violated the re-

quirements of NEPA and NHPA in this particular pro-

ceeding and was beyond ICC’s authority. It is the epitome

of circularity, and a true “Catch-22,” to hold, as the

Ninth Circuit in. effect did below, that an agency can

foreclose challenges to its compliance by adopting ac-

tetten

Ps tA

celerated “fast track” procedures which, themselves, vio-

late NEPA and NHPA guarantees of public notice. If

the Ninth Circuit is correct, then review of inadequate

notices is effectively foreclosed, and little is left of due

process guarantees and concepts of fundamental fair-

ness, at least where federal agencies are concerned.

This raises a related point on the Federal Register

notice afforded below. The court of appeals for the Dis-

trict of Columbia indicated in Jllinois Commerce Commiis-

sion v. ICC, 848 F.2d at 1258, that failure independently

to evaluate the impact of its actions on environmental

concerns, reliance on “intervenors,” and allowance of

abandonment authorizations to become effective without

a meaningful resolution of environmental and _ historic

preservation concerns violated the law, and would be

subject to remand. That of course is the customary re-

sult when an agency clearly violates NEPA and NHPA

as occurred below. E.g., LaFlamme v. FERC, 852 F.2d

389 (9th Cir. 1988) (license suspended pending NEPA

compliance); WATCH v. Harris, 603 F.2d 310, 325-26

(2d Cir. 1979) (pending compliance with NHPA). Yet

exactly these deficiencies applied to the proceeding at the

ICC below. When Tuolumne Park and Recreation Dis-

trict and Friends and Sierra Railroad sought corrective

action, which they did with all reasonable speed once they

ascertained what was happening, the ICC simply refused

to do anything and the court of appeals held that it was

without jurisdiction. The Ninth Circuit’s failure to re-

mand the instant case to the agency in the face of all

these deficiencies amounts to a conflict with the D.C. Cir-

cuit’s holdings in its second Jilinois Commerce Commis-

sion v. ICC decision.

Ill. The Ninth Circuit Misapplied This Court’s Decision in

ICC v. Brotherhood of Steam Locomotive Engineers.

The Ninth Circuit in its decision below also found that

its jurisdiction to entertain the petition for review filed

by Tuolumne Park and Recreation District and Friends

of Sierra Railroad was foreclosed by this Court’s decision

in ICC v. Brotherhood of Steam Locomotive Engineers,

482 U.S. 270 (1987). In the latter case, this Court held

that parties who did not timely petition for review from

final orders in litigated ICC proceedings could not obtain

belated judicial review on the basis of agency denial of

administrative petitions to reopen, wher those petitions

in turn were based solely on “material error” that could

have been presented to the agency in the first instance.

The Ninth Circuit’s construction of Brotherhood of

Steam Locomotive Engineers is clearly in error. First,

the holding in Brotherhood applies where the “error”

could have been presented to the agency in the first in-

stance. Here due to inadequate notice and inadequate

ICC procedures (no independent review of environmental

impacts, no stay of a decision pending resolution, and so

on), there was no meaningful opportunity to approach

the agency in the first instance. In extending Brother-

hood to this kind of situation, the Ninth Circuit is essen-

tially holding that it cannot review agency decisions to

refuse any relief even in the face of clear violations of

law. Surely this Court never intended to deprive inter-

ested parties of at least one reasonably fair shot at assert-

ing and defending their rights in federal agency regula-

tory proceedings. Surely this Court never intended to

open a loophole permitting federal agencies power to

evade NEPA and NHPA wholesale without fear of any

effective judicial review.

Second, ICC’s own regulations do not simply authorize

but require reopening here. ICC stated in its Brief in

the Ninth Circuit below (ICC Brief at P. 30 n.30), “Con-

gress expected for the exemption power [under 49 U.S.C.

$ 10505] to be used with after-the-fact review to correct

abuses,” citing Conf. Rep. No. 1430, 96th Cong., 2d Sess.

at 105 (1980). The D.C. Circuit made the same observa-

tion in Illinois Commerce Commission v. ICC, supra, 848

F.2d at 1248-49 n. 2. It is accordingly not surprising that

a Se ee eye ——-

49 C.F.R. § 1152.50 declares on its fave that a notice of

exemption is void ab initio if it is based on false or mis-

leading information. The idea behind an abandonment

authorization via 49 C.F.R. § 1152.50, is that it will be

granted ex parte and expeditiously, but that mistakes will

be corrected after the fact by voiding the § 1152.50

authorization.

In its filing with the ICC, the abandoning rail carrier

stated that the mile of right-of-way in question was not

suitable for public use. That is manifestly incorrect. The

entire line, including the mile at issue, had previously

been determined historic. The railroad knew that; indeed,

it had contested that determination by the California His-

toric Resources Commission. The Park District was ac-

tively negotiating to acquire the line from mileposts 50

to 56.2, and the logical western terminus for excursion

use of the line by the Park District was at the historic

Standard station at approximately milepost 49.5, right in

the middle of the segment in question. The railroad’s

declaration was thus misleading in the extreme. The no-

tice of exemption under ICC’s own regulation, and under

ICC’s representation of the intent of Congress, should be

declared by the agency to be null and void, ab initio.

IV. ICC Cannot Avoid Compliance with NEPA and NHPA

on Harmless Error Grounds.

ICC contended below that its failure to comply with

NEPA and NHPA was irrelevant, because compliance

would not have altered the course of the proceeding.

In other words, ICC claimed that it would eventually

have allowed the abandonment to become effective, the

corridor would inevitably have been lost, and historic re-

sources and environmental concerns unquestionably would

have been adversely affected. The Ninth Circuit never

reached ICC’s “harmless error” argument, because it er-

roneously found itself without jurisdiction to reach any

substantive issue. While the Park District and Friends

view the due process, notice, NEPA and NHPA questions

tendered above as of grave national importance in their

own right, we also note that ICC’s claim of “harmless

error” in this particular case is flatly wrong.

First and foremost, ICC’s argument ignores a funda-

mental purpose of the procedures and deliberative proc-

esses required by NHPA and NEPA. In Robertson v.

Methow Valley Citizens Council, 109 S.Ct. 1885, 1845

(1989), this Court stated that compliance with NEPA

serves the important informational function, independent

of the ultimate cutcome of the process, of giving “the pub-

lic the assurance that the agency ‘has indeed considered

environmental concerns in its decisionmaking process’. . . .

Further, agency compliance “provides a springboard for

public comment. .. .” Jd.

In any event, Tuolumne Park and Recreation District

and Friends of Sierra Railroad desire the line between

mileposts 49 and 50 for continued rail use. Congress has

provided a mechanism, codified at 49 U.S.C. § 10905, for

parties interested in purchasing a line for continued rail

use to obtain a stay of an abandonment authorization as

well as a period to negotiate a purchase. If negotiations

are not fruitful, either party may ask ICC to set the

terms and conditions (including amount of compensation)

for mandatory transfer for continued rail use. ICC sets

that amount at the constitutional minimum value, which

in general is the salvage value of track and ties, and the

adjusted across-the-fence value of property owned by the

railroad in the segment in question in fee. See Chicago

and North Western Transp. Co. v. United States, 678

F.2d 665 (7th Cir. 1982) (upholding ICC valuation pro-

cedure under § 10905).

Had ICC afforded adequate notice, much less otherwise

complied with NEPA and the NHPA, the Park District

and Friends would have invoked 49 U.S.C. § 10905 to

secure this line between mileposts 49 and 50. The Park

District, which has independent taxing authority under

California law, has the economic wherewithal to pay any

reasonable compensation set by ICC under the standards

applicable under 49 U.S.C. § 10905. In short, if ICC had

complied with the law, and if petitioners here had re-

ceived a real opportunity for a hearing, they would have

invoked § 10905 and obtained the line under it. This

would have served not only the purposes of the Revised

Interstate Commerce Act as manifest in § 10905, but

also the purposes of the National Historic Preservation

Act (because an historically significant line would have

been retained), and the purposes of NEPA (because the

loss of a line valuable to a public purpose would have been

mitigated). The real tragedy of ICC’s viclation of the

law in this case is that the errors the agency made were

anything but harmless.

In the administrative proceedings below, ICC claimed

that 49 U.S.C. § 10905 was not available for passenger/

excursion type rail uses, but only for freight rail pur-

poses. However, there is no such limitation on § 10905

either in the statute or in its legislative history. To the

contrary, Judge Posner explained, after a careful review

of the legislative history in Chicago & North Western

Transportation Company v. United States, supra, 678

F.2d at 667, that § 10905 was adopted as part of a pack-

age to foster preservation of lines for passenger pur-

poses. See also Reed v. Meserve, 487 F.2d 646 (1st Cir.

1973) (ICC does not overstep its authority where it con-

ditions abandonment to preserve historic rail line for ex-

cursion purposes and future use). Since we noted Judge

Posner’s decision to the agency, we do not understand

ICC to be continuing to assert that § 10905 is unavail-

able.** If ICC does another result-driven regression to

its earlier and erroneous claim that there is some myth-

ical freight-only limitation in § 10905, then it will again

be in direct conflict with the leading case interpreting

the provision.

‘8In any event, Tuolumne Park District will happily provide

freight service to offset some of the costs of maintenance.

CONCLUSION

ICC’s “footdragging and “papering over” of “defects”

in its approach to environmental and public interest

issues, and its failure to “deal{] with the substance of

the deficiencies” was criticized by Justice Douglas some

14 years ago in Aberdeen & Rockfish R. Co. v. SCRAP,

422 U.S. 289, 328 (1975) (‘SCRAP II). Time and tol-

erance have not generated an improvement. Insulating

violations of the law from judicial review through elab-

oration of legal fictions, as per the Ninth Circuit’s ruling

below, will only make the situation worse, in the ICC

generally and by extension of the dis-enforcement of

NEPA, NHPA, and notice rights, in ICC’s sister agencies

as well. Further, in this particular case, absent certio-

rari, an historic and publicly useful line apparently will

be irretrievably lost. This petition for certiorari to the

court of appeals for the Ninth Circuit should accordingly

be granted.

Respectfully submitted,

CHARLES H. MONTANGE

(Counsel of Record)

1400 - 16th Street, N.W., #301

Washington, D.C. 20036

(202) 797-5427

Attorney for Petitioners

Tuolumne Park and Recreation

District and Friends of Sierra

Railroad, Inc.

THOMAS MAROVICH

24 S. Washington Street

Sonora, California 95370

(209) 532-6937

Attorney for Petitioner

Tuolumne Park and Recreation

October 1989 District

APPENDICES

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

No. 87-7407

ICC No. AB-239X

FRIENDS OF SIERRA RAILROAD, INC. and TUOLUMNE PARK

AND RECREATION DISTRICT,

Petitioners,

Vv.

INTERSTATE COMMERCE COMMISSION ;

UNITED STATES OF AMERICA,

Respondents.

Appeal from a Decision of the

Interstate Commerce Commission

Argued and Submitted

April 11, 1989—San Francisco, California

Filed July 31, 1989

Before Herbert Y. C. Choy, J. Clifford Wallace and

Charles Wiggins, Circuit Judges.

Opinion by Judge Wallace

OPINION

WALLACE, Circuit Judge:

Friends of Sierra Railroad, Inc. (Friends) petitions

for review of the refusal of the Interstate Commerce

Commission (ICC) to reopen a class exemption granted

to the Sierra Railroad (Sierra) which permitted Sierra

to abandon a one-mile segment of its rail line.’ Friends

argued that the ICC granted the exemption through an

invalid procedure, and that even under that procedure

Sierra’s exemption was void. Friends sought through

reopening first to require the ECC to conduct an environ-

mental and historic preservation review of the abandon-

ment, and second to secure an option to purchase the

right-of-way of the abandoned segment. A petition was

timely filed. Because we lack jurisdiction to entertain

this petition, we dismiss.

Under the Staggers Act, a rail carrier may not aban-

don a rail line without first obtaining permission from

the ICC. 49 U.S.C. § 10903 et seg. The Staggers Act

contains a comprehensive and involved scheme of stand-

ards and procedures for abandoning rail lines. See id

As an exception to the otherwise burdensome procedures

required by that Act to abandon a line, 49 U.S.C. § 10505

directs the ICC to exempt a transaction or class of trans-

actions from regulation if it finds (1) its regulation is not

necessary to carry out the rail transportation policy

enunciated in 49 U.S.C. §1010la and (2) either the

transaction is of limited scope or regulation is unneces-

sary to protect shippers from abuse of market power. 49

U.S.C. § 10505. Pursuant to this statute, the ICC estab-

lished exempt abandonment procedures for rail lines out

of service for two years or longer. See 49 C.F.R. § 1152.50

(1984); Exemption of Out of Service Rail Lines, 366

1.C.C. 885 (1983).

On November 20, 1984, Sierra filed a notice of ex-

emption pursuant to section 10505 and 49 C.F.R. § 1152.50

(1984) to abandon its one-mile rail line and underlying

right-of-way between mileposts 49 and 50 in Tuolumne

County, California. Sierra provided the California De-

partment of Transportation with both advance notice of

its intention to file a notice of exemption and an environ-

mental notice pursuant to 49 C.F.R. § 1105.11 (1984).

On January 2, 1985, the ICC published a notice of ex-

emption in the Federal Register. 50 Fed. Reg. 188

(1985). This notice stated that the exemption would

become effective February 1, 1985, unless stayed pending

reconsideration. The notice advised that petitions to stay

had to be filed by February 11, 1985, and that petitions

for reconsideration had to be filed by February 21, 1985.

At the same time, the ICC sent copies of the notice to the

Governor of California and numerous California state

agencies: the State Resources Agency (notices went to

the Assistant Secretary, the State Historical Preservation

Office, the Department of Parks & Recreation, and the

Department of Parks & Recreation Planning Division) ;

the California Coastal Commission; the Publie Utilities

Commission (notices went to the Commission and to the

Chief of the Railroad Operations & Safety Branch); the

Department of Fish & Game; the Office of Planning &

Research; and the Rail Planning Branch of the Depart-

ment of Transportation. On January 21, 1985, the

California Public Utilities Commission mailed copies of

the notice to several potentially interested persons. No

objections were filed, and the exemption became effective

as scheduled on February 1, 1985.

On January 28, 1986, over a year after the notice of

exemption was published, Sierra began to salvage track

and material on the line. As a result of the salvage op-

eration, Friends became aware of the abandonment and

promptly contacted the Advisory Council on Historic

Preservation, which in turn informed the ICC’s Section

Energy & Environment (ICC Environmental Section)

that the California State Historical Resources Commis-

sion had previously determined that the line was eligible

for inclusion in the National Register of Historic Places

(National Register), and that the abandonment exemp-

tion had apparently been granted without review under

section 106 of the National Historic Preservation Act

(NHPA), 16 U.S.C. § 470(b).

The ICC Environmental Section responded that it was

unaware of the line’s eligibility for the National Register

and contacted Sierra “to encourage voluntary compliance

with the historic preservation process.” On May 6, 1986,

Sierra offered to sell the line to the California Depart-

ment of Parks & Recreation. When this department de-

clined this offer, Sierra then offered and sold the line

to Louisiana-Pacific Corporation. The deed of sale was

recorded on June 18, 1986.

Also on June 18, i986, Friends filed a petition asking

the ICC to reopen the proceeding. The ICC denied

Friends’s motion to reopen on July 20, 1987. Friends’s

“Motion to Correct Decision,” which the ICC treated as

a petition for reconsideration, was denied on January

26, 1988.

Friends filed its petition for review in this court pur-

suant to 28 U.S.C. § 2344 on September 2, 1987, within

the 60-day period after the ICC’s July 20, 1987, denial

of the petition to reopen. The petition in our court was

held in abeyance pending resolution of Friends’s petition

to the ICC for reconsideration.

As a threshold matter, we must determine whether we

have jurisdiction over this case. The Supreme Court re-

cently spoke to this question in ICC v. Brotherhood of

Locomotive Engineers, 482 U.S. 270 (1987) (Locomotive

Engineers). Under 28 U.S.C. § 2844, a party seeking

to challenge a final order of the ICC must file a petition

for review within 60 days after its entry. Clearly,

Friend’s petition is not timely for purposes of reviewing

the original exemption authority, which was administra-

tively final on February 1, 1985. See id. The time limit

in 28 U.S.C. § 2344 is jurisdictional, and we have held

that a subsequent unsuccessful petition to an agency to

reopen cannot create a new final order giving our court

jurisdiction over an untimely petition for review. Cali-

fornia Association of the Physically Handicapped, Inc. v.

FCC, 833 F.2d 1333, 1334 (9th Cir. 1987) ; Provisioners

Frozen Express, Inc. v. ICC, 5386 F.2d 1303, 1305 (9th

Cir. 1976). Thus, we have no jurisdiction to review the

original order.

Friends contends that, although we lack jurisdiction to

review the original order, we nonetheless may review the

ICC’s denial of Friends’s petition to reopen. The ICC’s

authority to reopen its prior actions arises from 49

U.S.C. § 10327(g). Locomotive Engineers, 482 U.S. at

277-78. 49 U.S.C. § 10327(g) provides in part:

(g) (i) The Commission may, at any time on its

own initiative because of material error, new evi-

dence, or substantially changed circumstances—

(A) reopen a proceeding;

(B) grant rehearing, reargument, or recon-

sideration of an action of the Commission; and

An interested party may petition to reopen and re-

consider an action of the Commission under this

paragraph under regulations of the Commission.

When the Commission refuses to reopen a proceeding, we

review only the lawfulness of the refusal. Locomotive

Engineers, 482 U.S. at 278. Our oversight is very lim-

ited. We may review the refusal to reopen only “[iJf

the petition that was denied sought reopening on the basis

of new evidence or changed circumstances . . . otherwise,

the agency’s refusal to go back over ploughed ground is

nonreviewable.” Jd. at 284. We cannot review such a re-

fusal to reopen where the petition alleges only “material

error.” In such cases, an appeal from the denial of the

petition “places before the courts precisely the same sub-

stance that could have been brought there by appeal from

the original order.” Jd. at 279. The Court expressly pro-

hibited such review even though it would serve the pur-

pose of extending indefinitely the time for judicial re-

view of “seriously mistaken agency orders.” Jd. at 280

(emphasis in original). Prohibiting review of denial of

petitions to reopen alleging only material error is juris-

dictional, not merely prudential, and is implicit in the

Hobbs Act 60-day jurisdictional time limit on judicial re-

view of ICC decisions. See id. at 281-82.

In evaluating reviewability of such petitions, we need

not and may not examine the reasoning expressed in an

ICC decision. Although here, as in Locomotive Engineers,

the ICC decision refusing to reopen discussed the merits

of the petition at length, we determine reviewability

solely by examining the bases advanced in the petition

to reopen. See id. at 280-81. The order denving Friends’s

petition is subject to review only if the petition sought

reopening on the basis of “new evidence” or “substan-

tially changed circumstances,” regardless of the analysis

contained in the ICC decision. We now determine whether

Friends’s petition to reopen qualifies to provide us juris-

diction.

We first consider an argument in Friends’s petition to

reopen which involves the new evidence exception. It con-

tends that the notice of exemption contained false or mis-

leading information, and was thus void ab initio under

49 C.F.R. § 1152.50/d) (8) (1984). For purposes of ob-

taining our review, this argument is inherently self-

defeating. Friends asserts tha: Sierra’s exemption notice

failed to disclose that the line was eligible for the Na-

tional Register under NHPA section 106 and that the

State of California had an option to purchase the line.

In other words, Friends is arguing that Sierra’s exemp-

tion notice omitted evidence available at the time. Friends

does not suggest that this is newly discovered evidence;

the essence of its argument is that the evidence was al-

ready available. Although Friends’s petition to reopen

may have raised this evidence for the first time in these

proceedings, newly raised evidence is not the same as

new evidence. See Union Mechling Corp. v. United States,

566 F.2d 722, 726-27 (D.C. Cir. 1977) ; Platnick Brothers,

Inc. v. Norfolk & Western Railway Co., 367 1.C.C. 782,

785 (1983) (Platnick Brothers); see generally United

States v. Northern Pacific Railway Co., 288 U.S. 490,

493-94 (1933). While section 10327(g) does not define

new evidence, “in an administratively final case it is only

fair that ‘new evidence’ be in fact new. Thus, evidence

that was reasonably available to the parties before the

proceeding is not new evidence for purposes of the stat-

ute.” Platnick Brothers, 367 I.C.C. at 785 (emphasis in

original). Friends’s petition in this argument raises “pre-

cisely the same substance that could have been brought

by appeal from the original order,” Locomotive Engineers,

482 U.S. at 279, and thus is not reviewable.

Friends argues, however, that the rule of Locomotive

Engineers is premised on the assumption that the party

bringing the petition to reopen has been involved in the

proceeding since the beginning. Friends contends that

while Locomotive Engineers may make sense as applied

to such a party, its rationale would not apply to a party

unable to participate until the time of its petition to re-

open. Friends argues that the notice provisions in the

TCC exempt abandonment procedure were inadequate, and

thus deprived Friends of the opportunity to present its

evidence on direct appeal of the original order, and in-

directly threatens to prevent us from reviewing this as-

pect of Friends’s appeal of the denial of the petition to

reopen. To support this argument, Friends points to

the explanation in Locomotive Engineers that review of

denial to reopen for new evidence or substantially changed

circumstances is available because otherwise the petitioner

might be “deprived of all opportunity for judicial con-

sideration . . . of facts which, through no fault of his

own, the original proceeding did not contain.” Jd. at 279.

This argument is unavailing because as a matter of

law Friends had adequate notice of the original proceed-

ing before the ICC. Complying with regulatory require-

ments, Sierra provided the required notice to the Califor-

nia Department of Transportation pursuant.to 49 C.F.R.

§ 1105.11 (1984). The ICC published a timely notice of

exemption in the Federal Register, see 50 Fed. Reg. 188

(1985), and sent copies of the notice to the Governor of

California and numerous state agencies, including the

State Historic Preservation office.

Friends complains that the Federal Register is unavail-

able in Jamestown, California, where Friends is located.

Friends does not dispute that it is available within an

hour’s drive. But our decision that notice was adequate

does not hinge on the driving distance between copies of

the Federal Register and the headquarters of potentially

interested parties to agency proceedings.

Publication in the Federal Register is legally sufficient

notice to all interested or affected persons regardless of

actual knowledge or hardship resulting from ignorance.

See 44 U.S.C. § 1507; Federal Crop Insurance Corp. -v.

Merrill, 332 U.S. 380, 384-85 (1947); Government of

Guam v. United States, 744 F.2d 699, 701 (9th Cir.

1984) ; Bennett v. Director, Office of Workers’ Compen-

sation Programs, 717 F.2d 1167, 1169 (7th Cir. 1988) ;

North Alabama Express, Inc. ». United States, 585 F.2d

783, 787 n.2 (5th Cir. 1978) (North Alabama Express).

The contents of the Federal Register notice plainly suf-

ficed to inform any reader that Sierra wished to abandon

the right-of-way. 50 Fed. Reg. 188 (1985). As the Fifth

Circuit explained, “an interested member of the public

should be able to read the published notice of [an] appli-

cation and understand the essential attributes of that

application. Others who see the notice should not have to

guess the applicant’s true intent.” North Alabama Ex-

press, 585 F.2d at 789 (substance of trucking company’s

published notice in Federal Register held inadequate to

alert interested parties to true nature of application).

The notice as published should apprise a reasonable per-

son of the issues involved in the proceeding. /d. at 786-

87. The notice hcre met this standard.

This notice issue is distinct from the question whether,

for purposes of 49 C.F.R. § 1152.50(d) (3), the notice

contained false or misleading information and was thus

void ab initio. Whether or not the exemption notice con-

tained such information, it was plainly sufficient to pro-

vide notice to all interested persons of the abandonment

proceeding. Therefore, we hold that this basis of Friends’s

petition to reopen, the argument that the notice of ex-

emption contained false or misleading information and

was thus void ab initio under 49 C.F.R. § 1152.50(d) (3),

does not present a reviewable issue.

Friends’s petition next argued that the ICC’s exempt

abandonment procedure had subsequently been invali-

dated by the Court of Appeals for the District of Colum-

bia in Illinois Commerce Commission v. ICC, 787 F.2d

616, 637 (D.C. Cir. 1986) (Jilinois Commerce 7), re-

manding and vacating, Exemption of Out of Service Rail

Lines, 366 I1.C.C. 885 (1983). This argument is based

not on changed circumstances or new evidence, but rather,

on material error, and therefore does not present a re-

viewable issue under Locomotive Engineers. See Platnick

10a

Brothers, 367 1.C.C. at 787. In Platnick Brothers, the

ICC considered a petition to reopen based in part on the

argument that the ICC’s market dominance guidelines

had been invalidated by the Fifth Circuit. Jd. at 783,

787. Although the petitioner characterized the circuit

court’s invalidation of ICC rules as a changed circum-

stance, the ICC explained that this ground fer reopening

was material error, not changed circumstances, because

the argument was that its decision had been based on an

invalid rule. 7d. at 787. Here, similarly. Friends argues

that the ICC’s original grant of an abandonment exemp-

tion for Sierra was based on an invalid rule, the exempt

abandonment procedure invalidated by the District of

Columbia Circuit in Jllinois Commerce I. Friends’s

ground for reopening is material error and thus unre-

viewable. See id.; see also Western Pacific Stockholders’

Protective Committee v. ICC, 848 F.2d 1301, 1303 (D.C.

Cir. 1988) (Western Pacific) (challenge to ICC valua-

tion methodology alleged only material error and was

therefore unreviewable); Central States Enterprises v.

ICC, 780 F.2d 664, 672-73 (7th Cir. 1983) (Central

States) (petition to reopen alleges material error where

ICC misapplied and misinterpreted statutory provision).

As previously explained, Friends had adequate notice of

the original proceeding. Friends could have challenged

the legal validity of the abandonment procedure at that

time. Cf. Pittston Coal Group v. Sebben, 109 S. Ct. 414,

424-25 (1988) ‘where administrative procedure judi-

cially invalidated, parties who sought direct judicial re-

view of adverse agency decisions under invalid procedure

could obtain readjudication of their cases; those who

failed to seek direct judicial review were barred). The

argument that this procedure is invalid “places before

[us] precisely the same substance that could have been

brought [here] by appeal from the original order.” Loco-

motive Engineers, 482 U.S. at 279. We hold, therefore,

that this ground of Friends’s petition to reopen does not

present a reviewable issue on appeal.

lla

The same principles which we applied in determining

the reviewabilitv of the denial of Friends’s petition to

reopen apply to the reviewability of the denial of Friends’s

petition for reconsideration. See Locomotive Engineers,

482 U.S. at 280-81, 285-86. If the petition is treated as

a genuine “Motion to Correct Decision” as it was titled,

that is, as seeking no more than correction of errors in

the ICC’s decision, “then the denial is unappealable be-

| cause [Friends] was not ‘aggrieved’ by it within the

) meaning of the Hobbs Act [28 U.S.C. § 2844].” Id. at

285. =

To the extent that this motion was a petition for recon-

: sideration, as the ICC treated it, it alleged only ma-

terial error, as the title “Motion to Correct Decision”

suggests. Friends’s first ground for reconsideration was

; to challenge the ICC’s statement that the California State

Historic Preservation Office had received notice of the

ICC’s January 2, 1985, Federal Register notice. This

assertion fails to present new evidence or substantially

changed circumstances. Friends’s second ground was that

Friends sought relief under 49 U.S.C. § 10905, and there-

fore the ICC erred in treating Friends’s petition solely

under 49 U.S.C. § 10906. This ground, like the first,

rests on no more than material error. See Western Pa-

cific, 848 F.2d at 1303 (petition to reopen rests on ma-

terial error claim and is thus unreviewable, where basis

is challenge to ICC’s choice of stock valuation methodol-

ogy) ; Central States, 780 F.2d at 672-73 (petition to re-

open alleges materia! error where ICC misapplied and

misinterpreted statutory provision); see also John D.

Copanos & Sons, Inc. v. FDA, 854 F.2d 510, 527 (D.C.

Cir. 1988) (petition unreviewable to extent that it elab-

orated on arguments already in record), quoting Locomo-

tive Engineers, 482 U.S. at 279-80. Finally, Friends

sought reconsideration on the ground that the ICC, erred

in asserting that Friends and the State Historic Preser-

SS.

12a

vation Office had actual notice and slept on their rights.

This argument placed no new evidence before the ICC,

but rather suggested material error in the ICC’s inter-

pretation of evidence it had already considered. There-

fore, there is nothing for us to review in the ICC’s denial

of the petition for reconsideration.

Friends’s petition for review presents no issue review-

able by this court. We therefore dismiss the petition

for want of appellate jurisdiction.

DISMISSED.

OFFICE OF THE CLERK

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

NOTICE OF ENTRY OF JUDGMENT

Judgment was entered in this case as of the file date

on the attached decision of the Court.

13a

APPENDIX B

[Service Date Jan. 26, 1988]

INTERSTATE COMMERCE COMMISSION

DECISION

Docket No. AB-239X

S. R. INVESTORS, LTD., DOING BUSINESS AS SIERRA

RAILROAD COMPANY—ABANDON MENT—IN

TUOLUMNE COUNTY, CA

Decided: January 20, 1988

On August 13, 1987, Friends of the Sierra Railroad

Company, Inc. (Friends or petitioner) filed a “Motion to

Correct”’ the Commission’s prior decision, served July 20,

1987, in this proceeding (the July 20th decision).' Peti-

tioner seeks substantive changes to an administratively

final action of the Commission; therefore, its pleading

should have been filed as a petition to reopen and recon-

10On September 2, 1987, Friends appealed the Commission’s July

20th Decision to the United States Court of Appeals for the Ninth

Circuit. Friends of Sierra Railroad, Inc., and Tuolumne Park and

Recreation District v. Interstate Commerce Commission and United

States of America, No. 87-7407 (Ninth Cir., filed September 2,

1987).

l4a

sider the July 20th decision.? As discussed below, we

have decided to accept Friends’ pleading and we will con-

sider it as a petition to reopen. Louisiana-Pacific Cor-

poration (LPC) replied to Friends’ petition.

BACKGROUND

On November 20, 1984, S.R. Investors, Ltd., d/b/a/

Sierra Railroad Company (Sierra) filed a notice of ex-

emption to abandon its 1-mile line of railroad between

milepost 49.0 and milepost 50.0 in Tuolumne County, CA.*

The California Department of Transportation (Caltrans)

received both an advance notice of Sierra’s intent to file

the notice of exemption and an environmental notice. On

January 2, 1985, the Commission published a notice of

exemption in the Federal Register (50 Fed. Reg. 188),

and invited interested persons to address environmental,

energy, and public use concerns. Twelve California agen-

cies received copies of the Commission’s notice of exemp-

tion,t and the California Public Utilities Commission

2 Under 49 CFR 1115.3(a), a discretionary appeal is permitted

when it is related to an action of the entire Commission in the

first instance, and must be designated as a “petition to reopen.”

3Sierra used the class exemption procedures at 49 CFR 1152,

Subpart F, Exempt Abandonments and Discontinuances of Track-

age Rights (49 CFR 1152.50). Those rules, which exempt carriers

from formal requirements under 49 U.S.C. 10903 for abandonment

or discontinuance of lines that have moved no local traffic for at

least two years, were adopted in Exemption of Out of Service Rail

Lines, 366 I.C.C. 885 (1983). (The proceeding was remanded for

further consideration in Illinois Commerce Commission v. ICC, 787

F.2d 616-(D.C. Gir. 1986), and the rules were reinstated in Exemp-

tion of Out of Service Rail Lines, 2 1.C.C.2d 146 (1986).)

4 Governor; State Resources Agency (three notices: Ass’t. to the

Secretary, Planning Div., and Dept. of Parks and Rec.) ; California

Publ. Util. Comm. (two notices); California Coastal Comm.; Dept.

of Fish & Game, Non-game Wildlife Coord.; State Historical Pres-

ervation Office (SHPO); Office of Planning Research; and Rail

Planning Branch. See July 20th decision, at 8, fn. 19.

Si Ae EN DNS ben

15a

(PUC) mailed copies to potentially interested persons.

There was no opposition to the exemption notice, and the

exemption became effective on February 1, 1985.

On February 21, 1985, Pacific Gas and Electric Com-

pany filed a petition for reconsideration seeking a public

use condition to secure an easement to transmit electricity

along the right-of-way. However, Pacific Gas later with-

drew its petition and on October 4, 1985, a decision dis-

missing its petition was served.

One year after the exemption notice was published,

Sierra began to saivage track and material on the right-

of-way. Friends then contacted the Advisory Council on

Historic Preservation (ACHP) and the ACHP, in turn,

notified the Commission’s Section of Energy and Environ-

ment (SEE) that the California State Historical Re-

sources Commission had previously determined that the

involved line was eligible for inclusion in the National

formed SEE that the abandonment exemption apparently

was granted without undertaking review under 16 U.S.C.

470(f) (“section 106 review’) of the National Historic

Preservation Act (NHPA). SEE notified ACHP that it

was unaware of the line’s eligibility status, but contacted

Sierra “to encourage voluntary compliance with the his-

toric preservation process.”

On May 6, 1986, Sierra extended to the California De-

partment of Parks and Recreation (CAP&R) the oppor-

tunity to purchase the abandoned right-of-way. After

CAP&R declined to exercise its right to purchase, Sierra

then offered to sell the property to LPC, the principal

shipper of the line. A deed of sale to LPC was recorded

on June 18, 1986.

The notice of exemption was in effect for over a year,

when, on June 18, 1986, Friends filed a petition to reopen

this proceeding. It asked the Commission to: (1) revoke

the exemption; (2) reassert its jurisdiction; (3) find that

16a

Sierra’s use of the class exemption procedures at 49 CFR

1152.50 was improper in this case; and (4) conduct an

abandonment proceeding in order to: (a) give Friends an

opportunity to request a public use condition under 49

U.S.C. 10906, or an interim trail use condition under 16

U.S.C. 1247(d); and (b) comply with NHPA by afford-

ing a section 106 review.

By decision served July 20, 1987, the Commission de-

nied reopening because it determined that it lacked juris-

diction to grant the relief requested.° The Commission

concluded that it was impossible to return to the status quo

ante, since the line has been abandoned and the right-of-

way sold. We do not alter that finding here and, based

on the evidence presented, once more deny reopening.

PRELIMINARY MATTERS

We will first address LPC’s contention that we reject

Friends’ “Motion to Correct Decision” because the Com-

mission’s rules of practice do not provide for such re-

lief. According to LPC, a petition to reopen is the more

appropriate remedy available to Friends, since it seeks

to correct “apparent mistakes” in the July 20th decision.

LPC argues, however, that under 49 CFR 1115.4, a peti-

tion to reopen an administratively final action of the

Commission may be filed only in certain circumstances.

It argues that Friends has not met any of the criteria for

reopening, as set forth under 49 CFR 1115.3(b) (1)-(3)

and 49 CFR 1115.3(c), and requests that reopening be

denied. It maintains that the requested corrections to the

July 20th decision do not substantially affect the correct-

ness of the Commission’s decision and are merely an at-

tempt to relitigate issues already decided.

We agree with LPC that our rules of practice do not

permit interested parties to file “motions to correct de-

—s

5 Nevertheless, we reviewed on the merits all of Friends’ conten-

tions and found them unpersuasive.

17a

cisions.” The relief Friends’ seeks can only be obtained

by filing a petition to reopen under section 1115.4, pur-

suant to the requirements of section 1115.3(c) and (d).

Although Friends has not styled its pleading as a peti-

tion for reconsideration that is, in fact, what the motion

is, and we will accept it as such. LPC’s motion to strike

petitioners’ motion will be denied. We will consider

Friends’ motion under the criteria governing petitions for

reconsideration. As discussed below, LPC will not be

prejudiced in this regard.

LPC also moves that we strike the documents appended

to petitioners’ motion or, in the alternative, allow it an

opportunity for rejoinder. These materials (a letter with

14 attachments *) seek to buttress petitioners’ earlier ar-

gument that it did not receive notice of the exemption and

that the Commission knew of the line’s historical signifi-

cance. The Commission’s appellate procedures address

specifically the introduction of new evidence at the appel-

late stage of a proceeding. 49 CFR 1115.3(c). Our regu-

lations require that when a party seeks to introduce new

evidence it must explain why that evidence was not pre-

viously adduced.

Friends did not respond to LPC’s motion to strike and

has not shown any materially changed circumstances that

would justify admission of the evidence attached to its

motion. The evidence it now seeks to introduce was

clearly available at the time Friends submitted its initial

statement. Petitioner has not explained why it did not

submit this evidence with that statement.

The rationale underlying our rule governing the intro-

duction of new evidence on appeal is one of fairness. A

party should not be able to withhold available evidence

until after it has obtained a result not to its liking, and

then introduce that evidence on appeal, to the surprise

of the other parties in the proceeding. Because Friends

6 A brief description of the enclosures appears in Appendix A.

18a

has offered no adequate explanation of why it did not

earlier introduce the evidence appended to its motion, we

will grant LPC’s motion’ and strike the challenged ma-

terial.®

DISCUSSION AND CONCLUSIONS

Friends’ initial petition to reopen was not filed until

June 1986, even though Sierra’s notice of exemption was

published in January 1985 and became effective on Feb-

ruary 1, 1985 because no objections to the exemption

notice were filed within the time limits provided by 49

CFR 1152.50(d) (3). Indeed, by the time Friends filed

its first pleading at the Commission, abandonment al-

7 We have reviewed the material in any event and find that it does

not support Friends’ contentions. Friends argues that the corre-

spondence it has supplied shows that the Commission knew or

should have known that the railroad was judged to be historically

significant. Friends submits this evidence to dispute the Commis-

sion’s contention that Friends slept on its rights by failing to

notify the Commission in the exemption proceeding of its interest

or its position. Friends also maintains that Commission staff had

promised to advise it of any change in the status of the Sierra

Railroad in a letter dated September 16, 1981.

The correspondence to which Friends refers was filed in connec-

tion with our earlier proceedings involving Sierra, Finance Docket

No. 29505 and Finance Docket No. 29506. The Commission main-

tains its files by docket number and is dependent on that system

for organizing the voluminous material submitted to it. The mate-

rial was not filed in Docket No. AB-239X, and the Commission de-

cided this case on the record made in this proceeding. To charge

the Commission with knowledge in each case involving a particular

carrier with matters outside that case because they were before the

agency at one time would be an unrealistic and impossible burden.

Moreover, the Commission’s commitment in the September 16, 1981

letter was an assurance that Friends had been placed on the service

list in Finance Docket No. 29506, and did not entitle Friends to

rely on the Commission to provide it notice of “any change in

status of the SRR line.”

8 Since we are striking these materials, LPC’s motion for an

opportunity to file a rejoinder is moot and will not further be

considered.

19a

ready had been consummated, the tangible property had

been salvaged, and the right-of-way had been sold. We

indicated in our prior decision, (at pp. 4-5, 10-11) that

in these circumstances we lack authority to grant the

relief Friends has requested, and found strong equitable

reasons for not reopening this proceeding. Nothing

Friends has offered following our July decision mandates

a different result.

The discussion of this point in our prior decision re-

quires some clarification here. As we said there, the

Commission generally loses jurisdiction over an abandon-

ment when it is consummated absent a showing of fraud

or ministerial error. We want to make clear, however,

that if a timely administrative petition is outstanding (or

a timely petition for judicial review is pending in court),

consummation does not divest us (or the reviewing court)

of jurisdiction to consider the pending ~-issues and grant

any relief that might be necessary. See Busboom Grain

Co. v. ICC, 830 F.2d 74 (7th Cir. 1987); 49 U.S.C.

10327 (g).

Moreover, section 10505 gives the agency the explicit

power to revoke the authority the Commission confers

under that provision. Section 10505(d) states that:

(d) the Commission may revoke an exemption, to

the extent it specifies, when it finds that application

of a provision of this subtitle to the person, class or

transaction is necessary to carry out the transporta-

tion policy of section 10101la of this title.

However, in deciding whether to exercise this authority

we must balance concerns of administrative finality, re-

pose and detrimental reliance with whatever factors favor

reopening. Here insufficient grounds to justify reopening

have been shown. In the notice of exemption issued in

® No evidence exists in this proceeding that the exemption was

obtained based on fraudulent or misleading representations by the

petitioner or that the exemption was unlawfully granted.

20a

this proceeding on January 2, 1986, the Commission in-

vited petitions to stay the exemption contained in the no-

tice (due 10 days after publication of the notice) and

invited petitions to revoke that exemption to be filed

within 20 days of the publication of the notice of exemp-

tion. Had a petition to revoke been timely filed, and had

petitioners nevertheless consummated abandonment, the

abandonment would have been subject to revocation de-

spite consummation. Defendant would have had notice

of the filing of the petitions to revoke and would have

consummated at the risk that the exemption would be

revoked.

In this case, Friends and the State agencies slept on

their rights. In these circumstances the parties’ expecta-

tions in acting on the Commission’s order should be ac-

knowledged and upheld. If rail carriers and shippers are

unable to rely upon a Commission decision over a year

after it has become final and effective (with no pending

petitions for judicial review or stays of effectiveness),

there would be no end to the administrative process and

no certainty in administrative decisionmaking.

At issue in this proceeding is whether our prior de-

cision contains material error warranting reopening.’®

As discussed infra, petitioner seeks a determination that

our prior decision contains several mistakes which should

be corrected. Its arguments are based primarily on

whether it or the State Historic Preservation Officer

(SHPO) received adequate notice, and whether its pro-

posal to use the right-of-way for recreation and rail ex-

10 Under 49 CFR 1115.3(b), a petition to reopen will be granted

only upon a showing of one or more of the following points: (1)

the prior action (all categories) will be affected materially because

of new evidence or changed circumstances; (2) the prior action was

taken by a division in the first instance or by a division in an

appellant capacity, and involves a matter of general transportation

importance; or (3) the prior action was taken by the entire Com-

mission in the first instance, and involves material error.

2la

cursion purposes properly fell within the confines of sec-

tion 10905 or section 10906. Although these issues were

properly resolved in the prior decision, we will give fur-

ther consideration to them here. Upon consideration of

the evidence presented, we conclude that Friends has

not demonstrated that the desired corrections are war-

ranted.

1. Friends’ notice argument is without merit. Peti-

tioner requests that we delete from page one, second para-

graph, lines 12-13 of our July decision the statement

that “the State Historical Preservation Office (SHPO)”

received a copy of the Commission’s January 2, 1985,

novice of exemption. It strongly believes that SHPO did

not receive notice of the abandonment. LPC replies that

notice of the exemption was published in the Federal Reg-

ister and that California state agencies were served on

several occasions.

As we noted in our prior decision, rail line abandon-

ments are subject to the National Environmental Policy

Act (NEPA) and NHPA. Sierra served on the Cali-

fornia Department of Transportation a notice inviting

interested parties to address environmental issues." Al-

though the railroad did not file an environmental report

(49 CFR 1105.7),’ the Commission served Sierra’s en-

vironmental notice on a number of state environmental

agencies, including SHPO. See July 20th decision at 1,

fn. 4. The Commission also published the notice of ex-

11 Under rule 1105.11, a carrier is required to serve an environ-

mental notice on a single designated state agency inviting inter-

ested persons to comment on environmental! issues.

12 We determined that Sierra’s failure to file an environmental

report under rule 1105.7 may have been “because the rule, on its

face, applies to applicants—a technical term that need not be read

to include exemptions.” See July 20th decision, at 10, fn. 22. Our

decision made clear that an environmental report will be required

in abandonment exemption proceedings in the future. July 20th de-

cision, at 10.

22a

emption in the Federal Register on January 2, 1985."* It

is difficult to conceive, therefore, how Friends could argue

that SHPO never received notice of the abandonment ex-

emption. Such statements are totally inconsistent with

the evidence. Petitioner, therefore, has not shown just

cause to support its requested correction on page one.

Nor would it be appropriate for us to delete our state-

ment that “We also emphasize that both the California

SHPO and Friends had actual notice of Sierra’s exemp-

tion but that Friends, the SHPO, and other California

agencies all slept on their rights” at page 10 paragraph

five, last sentence, as petitioner requests. Friends argues

that there is no evidence in the record to support the con-

clusion that Friends or SHPO had actual notice, or that

they slept on their rights.

LPC responds that Friends cannot impose on Sierra

the responsibility to give all potential litigants direct no-

tice of its intent to abandon. It maintains that Sierra

complied with all notice requirements and that any argu-

ments to the contrary were properly considered in the

prior decision.

As LPC states, Sierra was under no obligation specifi-

cally to inform Friends or other potential litigants of its

intention to file an exemption application. That is the

very reason our regulations require that we publish a

notice of exemption in the Federal Register. Publication

in the Federal Register ensures that all interested par-

ties are informed of a railroad’s intentions. In this case

an accurate notice of exemption was published. Moreover,

as described above, a considerable number of California

agencies were served with actual copies of the Commis-

sion’s January 2, 1985 notice of exemption. Thus, state

agencies that received copies of the notice of exemption

183 A copy of the service list attached to the served decision indi-

cates that SHPO was served. See Appendix B. The California

SHPO has not appeared in this proceeding.

28a

clearly had—but failed to use—an opportunity to par-

ticipate in this proceeding in a timely manner.

In sum, SHPO received actual notice of the abandon-

ment exemption. Friends did not. Petitioner was, how-

ever, afforded constructive notice by publication of the

notice of exemption in the Federal Register." The Com-

mission’s January 2, 1985, notice of exemption was,

therefore, binding on all who had an interest in the

abandonment, regardless of actual notice or of the hard-

ship resulting from innocent ignorance. Friends’ argu-

ments to the contrary are without merit.

Although we determine that Friends received construc-

tive and not actual notice of the abandonment exemption,

the distinction is immaterial, especially when there was

no statutory obligation to give Friends actual notice. Nor

is this a substantive change to warrant reopening. Thus,

our finding that Friends and SHPO received adequate no-

tice of the abandonment exemption was correct.

2. Friends’ proposal properly fell within the provisions

of section 10906. Petitioner contends that, if this pro-

ceeding were reopened, it would definitely invoke section

10905 and not section 10906, since it seeks to use the

right-of-way for rail purposes. It requests, therefore,

that we delete the expression “Friends’ proposal is not a

section 10905 one but, instead, falls under section

10906.” at page 5, second paragraph, lines 10-11.

LPC argues that, since this issue was never reached, it

need not be corrected. It submits that any arguments

regarding what Friends might have done had the pro-

ceeding been reopened is irrelevant to this proceeding.

LPC further argues that the Commission correctly found

that the relief petitioner sought was an impossibility. It

14 Publication in the Federal Register means constructive notice

to all who may be affected. See K. Davis, Administrative Law

Treatise, Vol. 1, Sec. 610, page 398 (1958); and Federal Crop Ins.

Corp. Vv. Merrill, 332 U.S. 380, 68 S.Ct. 1, 92 L.Ed. 10 (1947).

24a

contends that the determination cf whether Friends’ pro-

posal falls within section 10905 or section 10906 is within

the Commission’s discretion, and how an agency evaluates

a party’s position is determined by its expertise, juris-

diction and its interpretation of its statutes.

Friends sought reopening in order to use the right-of-

way for recreation and rail excursion purposes. This

proposal clearly falis outside of section 10905.

Section 10905 requires that the offeror demonstrate

that the offer is one for continued freight service.

Friends, on the other hand, seeks to use the right-of-way,

not the line itself, for recreational trail use and rail ex-

cursion purposes. Such use clearly falls within section

10906 or the Trails Act, not section 10905. See Rail

Abandonments—Use of Rights-Of-Way As Trails, 2

I.C.C.2d 591, 593-98 (1987).

Petitioner also appears to suggest that, because Sierra

held the right-of-way pursuant to a railroad easement,

the right-of-way would have been valued at zero for pur-_

poses of compulsory sale under section 10905." This ar-

gument is irrelevant since this is not a section 10905

case and Friends long ago lost the opportunity to invoke

the provisions of section 10905.’* After the notice of ex-

15 We have generally assigned a zero value for land in calculating

a carrier’s opportunity costs when the carrier does not hold mar-

ketable title. See Docket No. AB-43 (Sub-No. 136), Jllinois Central

Gulf Railroad Company-—Abandonment—In Christian, Macon, and

Shelby Counties, IL (not printed), served August 4, 1986; and

Chicago and North Western Transp. Co.—Abandonment, 363 I.C.C.

956, 959 (1981), aff'd Chicago and North Western Transp. Co. V.

U.S., 678 F.2d 655 (7th Cir. 1982).

16 Although section 10905 applies to abandonment applications

rather than abandonment exemptions, the Commission has adopted

a policy the offer of financial assistance provisions of section 10905.

See AB-269, Iowa Terminal Railroad Co.—Abandonment—In Cerro

Grando and Floyd Counties, IA (not printed), served March 31,

1987. *

25a

emption was published in the Federal Register, Friends

had 10 days to submit its offer of financial! assistance on

Sierra.’” This it failed to do. Thus, it is irrelevant what

value we would have assigned to the right-of-way. More-

over, Friends’ argument regarding compulsory sale also

lacks merit. As we previously stated, Congress has pro-

hibited forced sales for public use. See July 20th decision,

at 6.

We must conclude that Friends has failed to prove

that the July 20th decision contains “apparent mistakes”

warranting reopening. More importantly, Friends has

failed to show material error in our prior decision. Nor

has it shown that our prior decision would be affected

materially because of new evidence or changed circum-

stances. Friends’ allegations of error in our prior deci-

sion are unsupported by the evidence. Its evidence

throughout this proceeding has been unpersuasive at best,

even though we have allowed it further opportunity to

present its case. Friends should not further delay this

proceeding because all parties of interest had notice,

either actual or constructive, of Sierra’s intent to aban-

don the 1-mile line and Friends, the SHPO and other

California agencies all slept on their rights. Thus, we

will not reopen this proceeding and will deny Friends’

petition.

This action will not significantly affect either the qual-

ity of the human environment or energy conservation.

It is ordered:

1. LPC’s motion to strike Friends’ “Motion to Correct

Decision” is denied.

17 The Commission has applied its proposed rules in Ex Parte No.

274 (Sub-No. 16), Exemption of Rail Line Abandonments or Dis-

continuances—Offers of Financial Assistance, on an interim basis

to offers of financial assistance in exemption proceedings. Our final

rules were served December 21, 1987.

26a

2. LPC’s motion to strike the material attached to

Friends’ “Motion to Correct Decision” is granted.

3. Friends’ petition to reopen is denied.

4. This action is effective on the date of service.

By the Commission, Chairman Gradison, Vice Chair-

man Andre, Commissioners Sterrett, Lamboley and Sim-

mons.

NORETA R. MCGEE

[SEAL] ‘Secretary

27a

APPENDIX A

Enclosure A—A letter, dated September 16, 1981, from

the Commission’s Section of Energy and Environment

(SEE) to Bruce Cassasa indicates that Friends is placed

on the service list in Finance Docket No. 29506.

Enclosure B—A letter, dated January 24, 1981, from

Friends to the Commission refers to the historic status

of the line.

Enclosure C—A letter, dated September 1, 1981, from

Friends to the Commission indicates that Sierra’s 56-

mile line warranted historical status.

Enclosure D—A letter, dated November 5, 1981, from

LPC to Cassasa in opposition to any listing of the Sierra

in the NRHP.

Enclosure E—A letter, dated November 7, 1980, from

Cassasa to LPC regarding LPC’s opposition to the line’s

historic nomination.

Enclosure F—A letter, dated November 10, 1980, from

Cassasa to the Commission requests review of the Silver

Foot acquisition under the provisions of NHPA.

Enclosure G—A letter, dated November 26, 1980, from

Silver Foot’s attorneys to the Commission, in reply to

the November 10, 1980 letter mentioned above. The coun-

sel for Silver Foot objects to any protest of the sale

agreement between Silver Foot and Sierra.

Enclosure H—A newspaper article indicates that the

Commission approves the sale to Silver Foot of Sierra’s

freight operations. The article states that Friends seeks

to block abandonment of the last 7 miles of track because

of their historical significance. Although the Commission

authorized abandonment of those last 7 miles of track, it

specified that they remain in place until January 2, 1985.

The article also states that the historic portion is being

reviewed for possible purchase by the State.

28a

Enclosure I—A newspaper article indicates that the

State receives Friends’ request for historic nomination of

the entire 56-mile Sierra main-line, including a number

of historic buildings, a water tower and several wooden

trestles, in addition to tracks.

Enclosure J—A newspaper article, dated April 9, 1981,

describes Cassasa as a former bandit responsible for the

preservation of the Sierra Railroad from Oakdale to

Tuolumne, CA.

Enclosure K—A newspaper article, dated July 13, 1982,

indicates that Cassasa won his battle for the State to

run “Railtown 1897” as an historic park.

Enclosure L-—A newspaper article, dated May 3, 1981,

describes Cassasa’s desire to preserve the history of the

Sierra Railroad.

Enclosure M—A newspaper article, dated May 29, 1984,

indicates Friends’ desire to buy and repair 6.2-miles of

abandoned track in order to restore rail service to Tuo-

lumne. The article refers to the purchase price of

$200,000 as too excessive for Friends.

Enclosure N—A newspaper article, dated February 7,

1986, indicates that the removal] of Sierra track is halted

by the State due to opposition by Friends.

jo NO OA

29a

APPENDIX B

[Service Date Jan. 2, 1985]

INTERSTATE COMMERCE COMMISSION

Docket No. AB-239

S. R. INVESTORS, LTD., DOING BUSINESS AS SIERRA

RAILROAD COMPAN Y—-ABANDON MENT—

IN TUOLUMNE COUNTY, CA

NOTICE OF EXEMPTION

Applicant has filed a notice of exemption under 49

C.F.R. 1152 Subpart F—Exempt Abandonments to aban-

don its 1-mile line of railroad between milepost 49.0 and

milepost 50.0 in Tuolumne County, CA.

Applicant has certified (1) that no local traffic has

moved over the line for at least 2 years and that over-

head traffic is not moved over the line or may be rerouted,

and (2) that no formal complaint filed by a user of rail

service on the line (or by a State or local governmental

entity acting on behalf of such user) regarding cessation

of service over the line either is pending with the Com-

mission or has been decided in favor of the complainant

within the 2-year period. The appropriate State agency

has been notified in writing at least 10 days prior to the

filing of this notice.

As a condition to use of this exemption, any employee

affected by the abandonment shall be protected pursuant

to Oregon Short Line R. Co.-Abandonment-Goshen, 360

I.C.C. 91 (1979).

80a

The exemption will be effective February 1, 1985 (un-

less stayed pending reconsideration). Petitions to stay

must be filed by February 11, 1985, and petitions for

reconsideration, including environmental, energy, and

public use concerns, must be filed by February 21, 1985,

with:

Office of the Secretary

Case Control Branch

Interstate Commerce Commission

Washington, DC 20423

A copy of any petition filed with the Commission

should be sent to applicant’s representative:

Scott L. Glickson

36th Floor

444 North Michigan Avenue

Chicago, IL 60611

If the notice of exemption contains false or misleading

information, use of the exemption is void ab initio.

A notice to the parties will be issued if use of the ex-

emption is conditioned upon environmental or public use

conditions.

Decided: December 26, 1984.

By the Commission, Heber P. Hardy, Director, Office

of Proceedings.

/s/ James H. Bayne

JAMES H. BAYNE

[SEAL] Secretary

3la

APPENDIX C

[Service Date July 20, 1987]

INTERSTATE COMMERCE COMMISSION

DECISION

Docket No. AB-239X

S. R. INVESTORS, LTD., DOING BUSINESS AS

SIERRA RAILROAD COMPANY—ABANDONMENT—

IN TUOLUMNE COUNTY, CA

Decided: July 14, 1987

By petition filed June 18, 1986, and supplemented July

1, 1986, Friends of the Sierra Railroad, Inc. (Friends)

requests that we: (1) reopen this proceeding; (2) find

that use of the class exemption for abandonment of out-

of-service rail lines! at 49 CFR 1152.50 was improper in

this case; (3) reassert jurisdiction; and (4) conduct an

abandonment proceeding in order to (a) give Friends the

opportunity to request a public use condition under 49

U.S.C. 10906, or an interim trail use under 16 U.S.C.

1247(d), and (b) implement the National Historic Pres-

ervation Act (NHPA), by affording a review under 16

1 Exemption of Out-of-Service Rail Lines, 366 I.C.C. 885 1983),

vacated and remanded in Illinois Commerce Comm. v. ICC, 787 F.2d

616 (D.C. Cir. 1986), readopted in Exemption of Out-of-Service

RailLines, 2 1.C.C.2d 146 (1986).

82a

U.S.C. 470(f) (“section 106 review”). The petition will

be denied.

BACKGROUND

By Notice of Exemption (Notice) filed November 20,

1984, S. R. Investors, Ltd., d/b/a Sierra Railroad Com-

pany (Sierra) used the class exemption procedures at 49

CFR 1152, Subpart F, Exempt Abandonments and Dis-

continuances of Trackage Rights (49 CFR 1152.50), to

abandon its 1-mile line of railroad between milepost 49.0

and milepost 50.0 in Tuolumne County, CA.* Sierra

served both an advance notice of its intent to file a Notice

of Exemption, and an environmental notice® on the Cali-

fornia Department of Transportation (Caltrans). On

January 2, 1985, the Commission served and published a

notice of exemption in the Federal Register (50 Fed. Reg.

188). Twelve California agencies—including the State

Historical Preservation Office (SHPO) and the Chief,

Railroad Operations and Safety Branch, California Pub-

lie Utilities Commission (PUC)—received copies of the

Commission’s January 2, 1985, exemption notice. More-

over, on January 21, 1985, PUC mailed copies of the Com-

mission’s January 2nd notice to potentially interested

persons. No objections to the exemption notice were filed,

and the exemption became effective on February 1, 1985.

On February 21, 1985, Pacific Gas and Electric Com-

pany (PG&E) filed a petition for reconsideration® seek-

2 Sierra had previously abandoned the 6.2-mile end portion of its

line between milepost 50.0 and milepost 56.2.

3 Environmental notices, required by 49 CFR 1105.11, invite

interested persons to comment on environmental matters.

4The Commission’s notice of exemption described the line and

the nature of the exempted action, and indicated the effective date

of the exemption. It also invited interested persons to address, in

petitions for reconsideration due February 21, 1985, environmental,

energy, and public use concerns.

5 Under rule 1152.50(d) (3), petitions for reconsiderations are

due 20 days after a notice is served and published in the Federal

33a

ing a public use condition under section 10906 to secure

an easement to transmit electricity along the right-of-

way. However, by letter dated September 3, 1985, PG&E

voluntarily withdrew its petition, and on October 4, 1985,

a decision dismissing its petition was served.

On January 28, 1986, over one year after the exemp-

tion notice was published, Sierra began to salvage track

and material on the 1-mile right-of-way. As a result of

the salvage operations, Friends became aware of the

abandonment and contacted the Advisory Council on His-

toric Preservation (ACHP). ACHP, in a letter to the

Commission’s Section of Energy and Environment (SEE)

dated January 30, 1986, stated that the California State

Historical Resources Commission had previously deter-

mined that the involved line was eligible for inclusion in

the National Register of Historic Places (NRHP), and

that the abandonment exemption apparently was granted

without section 106 review ACHP asked SEE to investi-

gate the matter. In a letter to ACHP dated February 13,

1986, SEE stated that the Commission was unaware of

the line’s eligibility status, and that it had contacted

Sierra “to encourage voluntary compliance with the his-

toric preservation process.”

On May 6, 1986, Sierra extended to the California De-

partment of Parks and Recreation (CAP&R) the oppor-

tunity to purchase the abandoned right-of-way, at fair

market value, in accordance with a previously existing

agreement between Sierra and CAP&R.® In a letter dated

tions prior to the date that the exemption becomes effective. In

this case, petitions for reconsideration should have been due on

January 22, 1985, instead of on February 21, 1985, as the notice

stated. It appears that this error occurred because the due date

was improperly calculated from the effective date of the class ex-

emption, rather than the notice’s publication date.

6 The agreement, known as the “Amendment and Restatement of

Easement and Trackage Rights,” dated August 9, 1982, provides,

34a

June 9, 1986, CAP&R declined to exercise its right to pur-

chase. Sierra then offered the property to Louisiana-

Pacific Corporation (LPC), the principal shipper on the

line and the owner of the property on either side of all

but about 200 feet of the 1-mile right-of-way. The sale to

LPC was consummated and a deed of sale was recorded

on June 18, 1986:

OVERVIEW

On June 18, 1986, Friends filed a “Petition to Imple-

ment Section 106 Review, NHPA (16 U.S.C. 407f).” On

July 1, 1986, it filed a “Supplemental Petition to Re-

open,” asking the Commission to reopen and reconsider

the exemption proceeding. Friends contends: (1) that

Sierra’s Notice is void because the rules at 49 CFR

1152.50 were vacated;* (2) that Sierra’s Notice contained

false or misleading information regarding the line’s his-

toric significance and suitability for public use, and, there-

fore, Sierra’s use of the exemption is void ab initio; (3)

that, despite Federal Register publication, adequate no-

tice was not afforded to Friends or other historic preser-

vation offices; and (4) that the Commission did not con-

duct a section 106 review as required under NHPA. Ac-

cordingly, Friends argues that we should reopen this pro-

ceeding, void the exemption, reassert jurisdiction, and

order Sierra to refile for authority to abandon the line.

Friends states that, in the context of such new proceed-

ings, section 106 review must be conducted. Moreover,

in section 17.2, that in the event Sierra elects to abandon railroad

operations over all or any portion of its line, except that portion

between milepost 35 and milepost 41, Sierra is to offer that portion

of the property to the State at a cash price — to the fair

market value on the date of the offer.

7 The exemption rules were in effect from 1983 until April 1986,

when the D.C. Circuit vacated and remanded them in JUinois Com-

merce Comm’n. V. ICC, 787 F.2d 616 (D.C. Cir. 1986). The rules

were reinstated in December 1986, when the Commission issued its

decision on remand. See discussion infra.

aA tA a: Ae Uh Ac al

35a

Friends seeks the opportunity to request implementation

of interim trail use under section 1247(d), or imposition

of a public use condition under section 10906, requiring

Sierra to transfer to Friends the involved right-of-way

for recreation and rail excursion purposes. Friends ar-

gues that the Commission has the power to order a trans-

fer of right-of-way for excursion railroad purposes, citing

Reed v. Meserve, 487 F.2d 646 (1st Cir. 1973) (Reed).

Sierra and LPC oppose Friends’ request. They assert

that: (1) Sierra’s use of the abandonment class exemp-

tion rules was proper because the rules were valid when

Sierra invoked them in its exemption Notice and are valid

now; (2) Sierra’s notice contained no false or misleading

information; (3) Sierra fully complied with all applicable

rules; (4) NHPA is inapplicable; (5) Friends slept on

its rights by waiting 16 months after the exemption was

final to contest the abandonment; (6) reopening would

be futile because the right-of-way has been sold to LPC,

a good-faith purchaser for value, over whom the Commis-

sion has no jurisdiction; and (7) their expectations in

acting on a final Commission exemption decision should

be acknowledged and upheld. Under these circumstances,

they argue, the Commission cannot require Sierra and

LPC to return to the status quo ante.

After considering the issues presented in this case, we

conclude that we lack authority to reconsider this exemp-

tion proceeding. The line has been abandoned and the

right-of-way sold. Accordingly, we agree with Sierra and

LPC that reopening would be futile. Because we have no

remaining jurisdiction over the line, there is no way to

return to the status quo ante. Thus, it is not possible to

grant the ultimate relief Friends seeks.

PRELIMINARY MATTERS

On July 24, 1986, LPC filed a petition for leave to in-

tervene under 49 CFR 1112.4(b). LPC states that its

participation will not unduly disrupt this case or unduly

36a

broaden the issues. LPC opposes reopening, supports

Sierra’s arguments, and requests that reopening be de-

nied. LPC states that because it owns the right-of-way

and makes substantial use of Sierra (LPC provides 85

percent of Sierra’s outbound traffic), it has a vital in-

terest in the proceeding.’ We agree, but find it unneces-

sary to rule on the petition. The class exemption pro-

cedures do not require interested persons to petition to in-

tervene. Rather, appropriate petitions for reconsideration

(and replies) may be filed by any person who, like LPC,

demonstrates a legitimate interest in the proceeding. LPC

clearly has a genuine interest in the use of the right-of-

way. Similarly, Sierra’s and LPC’s arguments concern-

ing the allegedly improper intervention of Friends are

rejected. Friends also has a legitimate interest in the

right-of-way and its petition to reopen is properly before

us.

On August 18, 1986, Friends filed a ‘Reply to Petition

to Intervene.” In a motion to strike filed September 8,

1986, however, LPC argues that Friends’ reply is untimely

under 49 CFR 1104.13(a) and does not address LPC’s

intervention petition, but instead Sierra’s and LPC’s

July 24, 1986, “Reply in Opposition to the ‘Supplemental

Petition to Reopen’ Filed by Sierra Railroad Company and

Louisiana Pacific Corporation.” Thus, LPC contends that

Friends’ pleading is a reply to a reply, which is not per-

mitted under 49 CFR 1104.13(c).

On September 15, 1986, Friends responded to the LPC

motion and requested that its August 18th “reply” be

deemed a supplement to its prior petition to reopen since

the Commission’s rules of practice do not prohibit such

supplementa! pleadings.

8 LPC operates two lumber facilities in Tuolumne County: its

Standard Mill, which abuts nearly all the involved right-of-way in

this case; and a smaller mill at milepost 30.0 at Keystone, CA. In

addition, LPC is constructing a steam-generated electricity plant on

the line adjacent to milepost 49.0.

a eee wey

37a

LPC’s motion to strike will be denied. Although we

look with disfavor on attempts to thwart rule 1104.13(c),

given the nature of this controversy we have decided to

accept Friends’ “reply” to ensure that we have before us

all of its evidence and arguments. Given our ultimate

conclusion, we find that LPC will not be prejudiced in this

regard.

On July 24, 1986, LPC and Sierra filed a petition under

49 CFR 1104.13(a), 1117.1, and 1152.25(c) (4) request-

ing waiver of the 30-page limitation for replies in aban-

donment prceceedings. It will be granted.

On July 14, 1986, Friends filed a “Reply to Sierra Rail-

road” addressing certain matters raised in Sierra’s June

30, 1986, letter to Chairman Gradison in response to

Friends’ initial petition. We will waive rule 1104.13(c)

with respect to Friends’ July 14th pleading.

DISCUSSION AND CONCLUSIONS

1. We lack jurisdiction to grant the relief requested.

Plainly, the Commission, under 49 U.S.C. 10327, can re-

assert jurisdiction, reopen a proceeding, and revoke an

exemption where an abandonment (whether authorized in

an abandonment certificate or permitted by means of an

exemption) is not yet consummated.® Once abandonment

is consummated, however, the abandoned line is no longer

a part of, or functions in, interstate commerce and, thus,

is no longer subject to Commission jurisdiction. Hayfield

Northern R. Co. v. Chicago & N.W. Transp. Co., 467 U.S.

622, 623 (1984) (Hayfield). We have found that the only

exception to this rule is when there was fraud, mispre-

sentation, or ministerial error in authorizing abandon-

® Section 10327(g¢) (1) provides that the Commission may, at any

time, reopen a proceeding to address material error, new evidence,

or substantially changed circumstances. See also 49 U.S.C. 10505 (d)

which permits the Commission to revoke an exemption when it finds

38a

ment.” As discussed below, there is no fraud, misrepre-

sentation, or ministerial error here. Our regulations at

49 CFR 1152.50(d) (3) provide that, under the class ex-

emption invoked by Sierra, “If the notice of exemption

contains false or misleading information, the use of the

exemption is void ab initio and the Commission shall sum-

marily reject the exemption notice.” A purported aban-

donment undertaken without the Commission’s authority

—or based on a void notice—would simply be an unauth-

orized cessation of service and removal of track, and

would constitute a violation of section 10903. As will be

discussed below, the class exemption was properly avail-

able here and the notice submitted by Sierra was accurate

and complete.

In this case, it is clear that the abandonment was con-

summated. Indeed, the tangible property has been sal-

vaged and the right-of-way sold... Under these circum-

that application of the Interstate Commerce Act is necessary to

carry out the rail transportation policy under 49 U.S.C. 10101la.

10 Docket No. AB-11, Chicago & East. Ill. R. Co.-Abandonment

Between-Joppa Junction and Fayville Junction, IL (not printed),

served July 28, 1981; and Docket No. AB-1 (Sub-No. 183X), Chi-

cago & N.W. Transp. Co.-Abandonment Exemption in Hardin

County, LA (not printed), served July 18, 1985.

11 Abandonment is consummated when a certificate of public con-

venience and necessity (or, by analogy, an exemption notice) is

issued and has become effective, tariffs have been cancelled, and

operations have ceased. (The Commission no longer requires car-

riers to file a letter stating that abandonment has been consum-

mated.) See Black v. I.C.C., 762 F.2d 106, 112 (D. C. Cir. 1985)

(Black), and Common Carrier Status of States, State Agencies,

363 I.C.C. 182, 1385 n. 2 (1980). In this case, Sierra ceased opera-

tions at least 2 years before filing its Notice, and its exemption

became effective on February 1, 1985. No tariff cancellation has

occurred, however.

Nevertheless, it is possible, under certain circumstances, to find

that abandonment has been consummated despite the lack of a

tariff cancellation. When genuine questions arise about whether the

consummation criteria have been met, an inquiry about the actual

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39a

stances, we cannot reopen this proceeding and reassert

jurisdiction that we have already lost. Moreover, because

the right-of-way subsequently was sold, it would be im-

possible to return to the status quo ante.

Even if there were no such obstacles, we could not

grant the relief Friends ultimately seeks—an order re-

quiring Sierra to transfer the right-of-way to Friends

for public use or trail use. Contrary to Friends’ argu-

ment, we do not have the power to require railroads to

sell property for public use other than for continued rail

service under 49 U.S.C. 10905. Chicayo and North West-

ern Transp. Co.—Abandonment, 363 I.C.C. 975, 976

(1981). See also Chicago and N. W. Transp. Co. V.

United States, 582 F2d 1043, 1049 (7th Cir.) cert. denied

439 U.S. 1039 (1978). Friends’ proposal is not a section

10905 one but, instead, falls under section 10906."

intent of the railroad is appropriate. See Black, supra, at 112-1138.

The issue, thus, becomes whether Sierra intended to cease perma-

nently all transportation service on the 1l-mile segment. See Sim-

mons V. I.C.C., 808 F.2d 22 (7th Cir. 1987). Sierra: (1) stopped

its transportation service years ago; (2) filed for abandonment ex-

emption authority; (3) commenced salvage of the track and mate-

rials in January of 1986; (4) entered into arrangement to sell the

line [including extending to California the opportunity to purchase

the right-of-way under an agreement where abandonment was a

condition precedent (see n. 6, supra)]; and (5) did sell the right-

of-way to a non-transportation company whose property abuts both

sides of substantially all of the right-of-way.

These facts demonstrate conclusively that, even without tariff

cancellation, Sierra did intend to cease permanently its operations

over the line, and that this was its intent from the time it filed its

Notice. Accordingly, we conclude that Sierra fully abandoned the

line no later than January 28, 1986, the date Sierra began salvage

operations on the line.

12 Those situations in which a purchaser has no affirmative plans

for uninterrupted service or a continuation of service within a rea-

sonable time, but merely holds out the possibility of service at some

unspecified future time, are not properly considered offers of finan-

cial assistance to avoid abandonment or discontinuance and do not

fall within the scope of section 10905. Abandonment of R. Lines

(

40a

Recretational trail use also falls outside section 10905,

and is within the scope of either section 10906 or the

Trails Act, neither of which is a condemnation statute.

Rail Abandonments—Use of Rights-of-Way As Trails,

2 I.C.C.2d 591, 593-98 (1987). Moreover, Reed, supra,

the 1973 case Friends relies on, is inapplicable because

it predates enactment of sections 10905 and 10906.

Under present law, fashioned to deal specifically with

post-abandonment public use, Congress has limited any

general power we formerly exercised by prohiviting

forced sales for public use.

In short, section 10906 and the Trails Act are volun-

tary. We provide time for the parties to negotiate agree-

ments. We do not, however, require parties to actually

negotiate and we do not set terms.

Nor would it be appropriate for us to grant Friends’

belated request for section 106 review. In Morris City

Trust for Historic Preservation v. Pierce, 714 F.2d 271,

280 (3rd Cir. 1980) (Morris City), the court held that

the NHPA is applicable to ongoing Federal actions “at

any stage of an undertaking where alterations might be

made to modify its impact on historic preservation.” By

contrast, the NHPA is inapplicable where, as here, a pro-

ceeding is administratively final and jurisdiction over the

action is otherwise absent. For these reasons we are un-

able to grant the relief Friends seeks.

2. The class exemption was available here. Friends

argues that Sierra’s abandonment pursuant to the exemp-

tion procedures contained in 49 CFR 1152.50 is void be-

cause the Commission’s decision adopting the class exemp-

tion '* was vacated and remanded in Illinois Comm.

and Discontinuance of Serv., 365 1.C.C. 249, 260 (1981). Instead,

such proposals, like Friends’, fall under section 10906.

13 Exemption of Out of Service Rail Lines, 366 I.C.C. 885 (1983)

(Exemption 1).

4la

Com’n V. I.C.C., 787 F.2d 616 (D.C. Cir. 1986) (Jllinois).

On the other hand, Sierra relies on the fact that the ex-

emption was in effect at the time it used it. We agree

with Sierra.

An agency must apply the law in effect at the time it

renders a decision, unless doing so would result in mani-

fest injustice, or is contrary te a statutory directive or

legislative history. See Bradley v. Richmond School

Board, 416 U.S. 696, 711 (1974). The class exemption

under section 10505, and the implementing rules, 49

CFR 1152.50, were in full effect both when Sierra filed

its Notice, and when Sierra consummated abandonment.

There is no evidence that application of the rules would

result in manifest injustice. On the contrary, the legisla-

tive history of section 10505 not only encourages, but

mandates use of exemptions where appropriate findings

are made. IJIlinois did not hold that we could not adopt

the exemption, but simply found that our rationale for

doing so was inadequately explained (a deficiency that

has since been cured).'* The court’s order was not retro-

active in its effect. Thus, any abandonment consummated

in reliance upon, and pursuant to the terms of, the ex-

emption when it was effective is fully lawful, not void

as petitioners argue.

3. Sierra’s Notice was not false or misleading.

Iriends argues that, even if Sierra’s use of the class ex-

emption rules was proper, its exemption, nevertheless,

is void under rule 1152.50(d) (3), which provides, in

part, that if a Notice contains false or misleading infor-

mation, use of the exemption is void ab initio. In sup-

14 Indeed, in Exemption of Out of Service Rail Lines, 2 I.C.C.2d

146 (1986) (Exemption II), we reaffirmed and readopted Exemp-

tion I and the implementing rules. This later decision more fully

discusses the issues that /llinois found were inadequately addressed

in Exemption I. An appeal of Exemption II is pending in Illinois

Commerce Commission, et al. v. Interstate Commerce Commission,

et al., No. 86-1687 (D.C. Cir., filed Dec. 15, 1986).

42a

port, Friends states that Sierra was aware of the his-

toric, cultural, and recreational importance of the line,

and aware of the substantial state and local interest in

the preservation and potential for recreational use of the

line,® but that Sierra failed to disclose such information,

and incorrectly asserted in its Notice that the right-of-

way was not suitable for sale for public use under sec-

tion 10906. Friends argues that these omissions and

statements rendered the Notice false and misleading.

Friends similarly states that Sierra did not reveal the

existence of an alleged restriction on the title to the right-

of-way.’®

15 Friends states that Sierra has been aware, for example, that:

(1) the Tuolumne City Recreation District of Tuolumne City, CA,

is actively seeking to acquire Sierra’s abandoned right-of-way be-

tween milepost 50.0 and 56.2 for recreational and light rail transit

uses; (2) “Railtown 1897” State Historic Park, a 26-acre former

steam maintenance facility, is located at milepost 41.0 at James-

town, CA, and is part of the California State Park System; (3) the

State of California has an option to purchase substantial portions

of Sierra’s right-of-way upon abandonment by Sierra, including the

right-of-way portion at issue here; (4) the right-of-way is scenic

and has been used as a site for movie filming; (5) the right-of-way

is eligible for listing in the National Register of Historic Places;

and (6) abandonment would bifurcate the line, precluding a link-up

of the first 49 miles of the right-of-way with the 6.2 miles being

purchased by Tuolumne City, and impeding access to the 6.2-mile

right-of-way from an existing road.

16 Rule 1152.50(d) (2) requires, among other things, that notices

of exemption contain the information called for under 49 CFR

1152.22(a) (1)-(4) and (8), and (e)(5). Section 1152.22(e) (5)

states:

Statement of whether the properties proposed to be abandoned

are suitable for use for other public purposes, including roads

or highways, other forms of mass transportation, conservation,

energy production or transmission, or recreation. If the appli-

cant is aware of any restriction on the title to the property,

including any reversionary interest, which would affect the

transfer of title or the use of property for other than rail

purposes, this shall be disclosed.

43a

Sierra and LPC maintain that the Notice was accurate

and complete. They claim that it was appropriate to

characterize the right-of-way as unsuited for public use

because of its poor condition and location. They explain

that, because the line has not been used for freight serv-

ice for 23 years, or for passenger service since 1979, the

ties have deteriorated, the track has become overgrown

with vegetation, and the materials in the line have rusted.

Uncut logs from LPC milling operations are stacked

along the right-of-way. In addition, they state that a

study of Sierra’s entire 56.2-mile right-of-way, prepared

for the Tuolumne County and Cities Area Planning Coun-

cil of Sonora, CA (the Woodside Study), dated May 26,

1986 (Exhibit F. Sierra reply filed June 30, 1986), con-

cluded that the configuration of the right-of-way through

LPC’s logging yard would make passenger operations

difficult and potentially hazardous. The Woodside Study

also concluded that a Friends proposal to construct an

alternative route through LPC’s facility was impractical

because rehabilitation was expensive, passenger opera-

tions were economically unfeasible, and LPC opposed

the idea.

We conclude that Sierra’s Notice was not false or mis-

leading. The abandonment exemption rules do not require

disclosure of the information that Friends argues should

have been included in Sierra’s Notice. See 49 CFR

1152.50(d) (2). Moreover, we find that it was reasonable

for public use due to the deteriorated condition of the

line and proximity to LPC’s facilities. The Woodside

Study also supports Sierra’s position that the line seg-

ment at issue here is not suited to the type of public use

that Friends proposes.

Nor can Sierra’s failure to respond to the title restric-

tion question in rule 1152.22(c)(5)*" be characterized

as a material error. Friends has offered no specific evi-

1749 CFR 1152.22(c) (5) requires disclosure of any restriction

which could affect the transfer of title, or the use of property, for

other than rai] purposes.

44a

dence about the nature of any restriction. Although

PG&E apparently determined that it was not necessary

for it to obtain an easement from Sierra for transmis-

sion of electricity because Sierra did not have a fee sim-

ple title (see our October 4, 1985, decision in this pro-

ceeding), we know that Sierra offered the property to

CAP&R for nonrail purposes and subsequently sold the

property to LPC for nonrail purposes. Thus, without

more evidence, we conclude that Sierra’s title to the

right-of-way was not restricted in a manner contem-

plated by rule 1152.22(e)(5). In these circumstances,

we reject Friends’ title restriction ciaims.

4. Notice was adequate here. Friends admits that a

notice of this exemption was published in the Federal

it was unaware of the abandonment exemption, since the

Federal Register is unavailable in Jamestown, CA, where

it is located. Therefore, it argues that we should con-

sider, at this late date, its request for a public use or

trail use condition, and for section 106 review.

Sierra states that copies of the Federal Register are

maintained in Modesto and Stockton, CA, both within cne

hour’s drive of Jamestown, and that, therefore, Friends

had all of the notice to which it was entitled under the

class exemption rules. Sierra also points out that PG&E

filed a timely petition for reconsideration, but that

Friends, on the other hand, waited until 16 months after

the exemption became effective and 13 months after the

time for seeking judicial review under the Hobbs Act to

object to the abandonment.

There is no merit to Friends’ notice claims.’* Federai

18]Tf Friends is challenging the adequacy of the Commission’s

regulations, its argument is an improper collateral attack on the

abandonment class exemption rulemaking.

As for Friends’ section 10906 and Trails Act requests, we em-

phasize that the Federal Register notice provided in this case is

at ace nib le ai NOS Tad Nr Os hes Me

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45a

tion, a considerable number of other California State of-

fices and agencies were served with actual copies of the

Commission’s January 2, 1985, notice of exemption.’

However, despite this notice, neither Friends nor any of

these agencies filed a timely comment or petition to im-

plement either section 10906 or section 1247(d). Thus,

it is clear that the problem here is not adequacy of notice,

but the fact that Friends and the state agencies slept on

their rights. In these circumstances the parties’ expecta-

tions in acting on the Commission’s exemption order

should be acknowledge and upheld. If rail carriers and

shippers are unable to rely upon a Commission decision

over a year after it became final and effective (with no

pending petitions for judicial review or stays of effec-

tiveness), there would be no end to the administrative

process and no certainty in administrative decision mak-

ing. Friends and state agencies that received copies of

the notice of exemption clearly had—but failed to use—

their opportunity to participate in this proceeding. We

will not reopen to permit untimely requests to be made

at this time.

5. Section 106 review is not appropriate at this time.

Notwithstanding the fact that this line has been fully

abandoned—and that LPC bought the right-of-way in

June 1986”°—Friends asserts that the Commission now

precisely the notice required by our rules and procedures. Further-

more, regarding Friends’ ability to purchase the property, it is

significant that CAP&R actually had the opportunity to purchase

the abandoned right-of-way but declined to do so.

19 Governor; State Resources Agency (three notices: Ass’t. to

the Secretary, Planning Div., and Dept. of Parks and Rec.) ; Cali-

fornia Publ. Util. Comm. (two notices) ; California Coastal Comm.;

Dept. of Fish & Game, Non-game Wildlife Coord.; SHPO; Office;

Office of Planning Research; and Rail Planning Branch.

20 There is no merit to Friends’ argument that neither Sierra nor

LPC would be prejudiced by reopening because they consummated

the sale of the right-of-way with knowledge of Friends’ interest

in it.

46a

should implement section 106 review because on August

7, 1981, the California State Historical Resources Com-

mission determined that the entire Sierra right-of-way

was eligible for listing in the NRHP. Friends maintains

that, under section 106, all Federal agencies must, prior

to issuing any license, investigate the applicability of

NHPA and give the ACHP an opportunity to comment

where an agency’s action may have an effect on property

found eligible for inclusion in the NRHP.

Sierra and LPC maintain that Sierra complied with all

of the environmental rules and that Friends’ NHPA argu-

ments are flawed and untimely. They argue that because

the line’s NRHP eligibility determination occurred only

at the state level and was never forwarded to the Keeper

of the NRHP, it lack official status and cannot be a means

to trigger reopening and section 106 review, citing Com-

mittee, Etc. v. Birmingham Branch, Etc., 497 F. Supp.

504 (N.D. Ala. 1980) and Birmingham Realty Co. v.

General Services, 497 F. Supp. 1877 (N.D. Ala. 1980).

Contrary to Sierra’s arguments, eligibility under the

NHPA is not restricted to property that has been finally

determined eligible for inclusion in the NRHP. Rather,

property is eligible for NHPA review on the basis of

whether it meets NRHP criteria.** Thus, the involved

right-of-way qualified for NHPA review.

Section 106 of the NHPA provides that an agency hav-

ing jurisdiction over a Federally licensed undertaking

shall, prior to issuing the license, take into account the

effect of the undertaking on any site, structure, or build-

ing that is included in or eligible for inclusion in the

NRHP, and that the agency head shall afford the ACHP

the opportunity to comment on the undertaking. Like the

“1 See Boyd v. Roland 789 F.2d 347, 349 (5th Cir. 1986), where

the court disagreed with the arguments and rationale of the dis-

trict court decisions cited by Sierra and LPC in support of their

arguments.

47a

National Environmental Protection Act of 1969, 42 U.S.C.

4332 (NEPA), the NHPA is primarily procedural. Morris

Cty., supra, 714 F.2d at 278-79. The NHPA requires the

Commission to “take into account” historic preservation

goals, but does not preclude the agency from taking any

particular action or require that the goals of historic

preservation be elevated over other appropriate considera-

tions.

Rail line abandonments are subject to NEPA and

NHPA. Harlem Valley Transportation Ass’n. v. Stafford,

500 F.2d 328 (2nd Cir. 1974). The Commission cannot

exempt carriers from the requirements of NEPA, or other

environmental statutes. Exemption I, supra, 366 I.C.C.

at 890.

The Commission’s rules -implementing NEPA and

NHPA, at 49 CFR Part 1105, require applicants (i.e.,

proponents of an action) to provide environmental infor-

mation to the Commission. Two environmental rules—

rule 1105.7 involving reporting, and rule 1105.11 involv-

ing notice—are pertinent here. Under rule 1105.7(a),

persons initiating abandonment proceedings are required

to file environmental reports in application proceedings.

Such reports provide information about eligibility of prop-

erty for NHPA review, alternatives to a proposed action,

and the possible effects of the action on various areas of

environmental concern. Specifically, rule 1105.7(c) (10)

(i) asks whether sites or structures listed in the NRHP

will be affected, and, if so, asks that the effects be de-

scribed. Rule 1105.7 (c) (10) (ii) states that, if sites or

structure 50 years old or older and not listed on the NRHP

will be affected, the applicant must, at the earliest pos-

sible juncture, submit a description, map, and photographs

of the site or structure to the appropriate SHPO for re

view. Under rule 1105.7(c) (10) (iii), if culturally signi-

ficant locations will be affected, the applicant should con-

sult with the appropriate SHPO.

48a

Rule 1105.11 requires applicants to serve one ali-purpose

environmental notice of an action on a single designated

state agency, inviting interested persons to address en-

vironmental issues. An environmental notice contains no

affirmative statements about the impact of the action,

however.

Sierra filed an environmental notice under rule 1105.11

(which is cross-referenced under the exemption rules at

49 CFR 1152.50), but did not file an environmental re-

port. Thus, the California SHPO was not given the

precise information and notice provided under rule

1105.7 (¢c) (10), and the Commission received no specific

environmental information under rule 1105.7.

The environmental reporting requirements at 49 CFR

1105.7 should be applied to abandonment exemption pro-

ceedings under 49 U.S.C. 10505 (as well as to abandon-

ment applications filed under section 10903). An environ-

mental report is intended to ensure agency knowledge and

consideration of the possible environmental consequences

of pending proceedings. An environmental report also

ensures adequate notice to environmenta! agencies.

Although we want to make it clear that environmental

reports will be required in abandonment exemption pro-

ceedings in the future, we cannot and will not reopen this

proceeding for the filing of an environmental report. Nor

do we believe it would serve a useful purpose to attempt,

at this late date, to-mitigate harm to historic structures

through section 106 review.

There are also strong equitable reasons for not reopen-

ing this proceeding. These include the substantial amount

of time that has passed from the time Sierra’s abandon-

22 The environmental report regulations (49 CFR 1105.7) are not

cross-referenced under the exemption rules. Sierra may not have

filed an environmental report because the rule, on its face, applies to

“applicants”—a technical term that need not be read to include

exemptions.

49a

ment was exempted (February 1985) to the time that

Friends’ petition to reopen was filed (June 1986), and in

addition, the good faith reliance by Sierra and LPC on

the exemption authority in abandoning and purchasing,

respectively, the right-of-way. We also emphasize that

both the California SHPO and Friends had actual notice

of Sierra’s exemption, but that Friends, the SHPO, and

other California agencies all slept on their rights.

Objections to agency proceeding should be made while

the agency has the opportunity for correction. United

States v. Tucker Truck Lines, Inc., 344 U.S. 33, 37

(1952). As the Supreme Court there concluded (/d.):

[s]imple fairness to those who are engaged in the

tasks of administration and to litigants, requires as a

general rule that courts should not topple over ad-

ministrative decisions unless the administrative body

not only has erred but has erred against objection

made at the time appropriate its practice.

There is no valid excuse for the untimeliness of Friends’

petition for reconsideration—or for the extremely late

requests for section 106 review. We lack authority to re-

consider our exemption decision and the NHPA no longer

applies once a proceeding has become administratively

final, Morris Cty., supra, 714 F.2d at 280. Thus, NHPA

does not require, at this late date, that we reopen and

reconsider how to mitigate harm to historic structures.

This action will not significantly affect either the quality

of the human environment or energy conservation.

It is ordered:

1. The motion to strike the “Reply to Petition to Inter-

vene” filed by Friends of the Sierra Railroad on August

18, 1986, is denied.

2. The petition to waive the 30-page limitation for re-

plies in abandonment proceedings is granted.

50a

38. On our own motion, 49 CFR 1104.3 is waived with

respect to Friends’ pleading dated July 14, 1986.

4. The petition to reopen is denied for lack of jurisdic-

tion.

5. This action is effective on August 19, 1987.

By the Commission, Chairman Gradison, Vice Chair-

man Lamboley, Commissioners Sterrett, Andre, and

Simmons.

NORETA R. MCGEE

[SEAL] Secretary

eS eee

5la

APPENDIX D

STAFF EVALUATION

In 1981, the State Historical Resources Commission con-

sidered the nomination for the Sierra Railroad Historic

District, including Railtown and the 500 miles of line

associated with the Railroad. At that time the Commis-

sion approved the nomination, recommending listing at

the state level of significance. The nomination remained

at OHP, however, due to changes in federal regulations

regarding property owner notification, a lack of proper

photos in the file, staffing changes at OHP, and changes

in the railroad’s ownership. In 1986, the issue of the

railroad’s eligibility surfaced again, when the owners of

the railroad were involved in an environmental review

related to a permit to abandon service on part of the line.

(A federal permit was required). Since the nomination

had never been submitted to the Keeper of the Register,

the owners of the Railroad wished to have it reheard by

the Commission, with a view toward establishing that

the property was not eligible for listing. At its meeting.

on February 6, the Commission will be asked to consider

that argument. It is staff’s opinion, however, that the

railroad was eligible in 1981 and is still eligible today.

A recent study by John Snyder of the California Depart-

ment of Transportation has provided the basis for the

current nomination. No significant changes to the prop-

erty have taken place that would warrant a negative

determination, and the evaluation provided to the Com-

mission in 1981 is still valid. That evaluation, by Steven

Mikesell, currently historian with the California Depart-

ment of Transportation, is enclosed. The Commission

may wish to note that other railroads, including grades,

tracks and rolling stock have been listed in the National

or even unusual. The Cumbres and Toltec Railroad in

New Mexico (approximately 20-30 miles), and the Den-

52a

ver & Rio Grande Western from Durango to Silverton

Colorado (a distance of about 60-90 miles), have both

been listed. The fact that these lines have had periodic

maintenance and replacement of tracks, even recently,

has not been considered sufficient to have impaired their

integrity. The Sierra Railroad has also been subject to

such maintenance and replacement of tracks, yet again,

in staff’s opinion, integrity has not been significantly im-

paired. It is recommended that the Railroad be listed at

the state level of significance.

MARYLN BOURNE LORTIE

January 26, 1987

ae”

53a

STAFF EVALUATION—SIERRA RAILROAD

HISTORIC DISTRICT

The Sierra Railroad is, in the view of staff, eligible for

listing on the National Register at the state level of sig-

nificance. Historically, this railroad was vital to the

eeonomic life of a large region of the state, with tracks

extending through the counties of Stanislaus, Tuolumne,

and Calaverns. The Sierra was the transportation life-

line for such momentous developments as construction of

the Hetch Hetchy Dam, the reopening of the major

quartz mines in Calaveras and Tuolumne Counties, and

the opening of major timber stands in Tuolumne County.

The statewide significance of this property, however, is

best understood in terms of Criterion C rather tian

Criterion A. In the view of staff, the Sierra Railroad is

the most intact historic railroad system in California.

Other historic properties in the state retain integrity of

track alignment, rollingstock or railroad yard structures.

The Sierra is unique in that all of these major compo-

nents have been preserved.

Clearly, the focus of this application is the Railtown

complex in Jamestown. The eighteen structures here date

largely from the period, 1897-1910, and constitute a

workable turn-of-the-century railroad yard. Although

deteriorated, the components of the system work—the

repair shop is equipped to repair steam equipment, the

turntable turns, the water tower is watertight, and so

forth. The rollingstock is similarly functional and until

recently was used on a popular tourist railroad attrac-

tion. The California legislature in June, 1981, appro-

priated $1.5 million to purchase and restore the Rail-

town complex. It is anticipated that Railtown will be

added as a State Park unit some time in 1981.

The trackage beyond Railtown retains a lower degree of

integrity. Except for the depot at Standard, no historic

structures exist along this line. The alignment of tracks

54a

is generally historically accurate. Because the line runs

through uninhabited areas, the integrity of setting is ex-

ceptional, accounting for the popularity of the Sierra

Railroad as a set for Western movies.

The Sierra Railroad qualifies for listing on the National

nificance under Criteria A and C.

55a

~ ADVISORY

COUNCIL ON

HISTORIC

PRESERVATION

The Old Post Office Building

1100 Pennsylvania Avenue, NW, #809

Washington, DC 20004

[Jan. 30 1986]

Mr. Carl P. Bausch

Chief, Section of Energy and Environment

Office of Transportation Analysis

Interstate Commerce Commission

Washington DC 20423

Dear Mr. Bausch:

We have just been notified by Mr. Bruce Cassassa of the

Friends of the Sierra Railroad that the Sierra Railroad

is removing track between mileposts 49 and 50 on its

line near Sonora, California. This rail line has been

determined eligible for the National Register of Historic

Places.

Mr. Cassassa advises us that the work is being done

under an ICC exemption, docket number AB _239X. Ap-

parently this exemption was granted on November 1,

1985 without compliance with Section 106 of the Na-

tional Historic Preservation Act.

Would you please investigate this matter and advise us

of your findings? If the exemption was granted without

compliance with Section 106, we hope that ICC can find

a way to prevail upon the Sierra Railroad to halt work.

on the track removal until ICC has complied with our

regulations (36 CFR Part 800).

56a

I appreciate your prompt attention to this request. To

discuss the matter further, please contact Mr. Robert

Fink of our western Division of Project Review at

776-2682 (FTS) or 303/236-2682 (Commercial).

Sincerely,

/s/ Thomas F. King

THOMAS F. KING

Director, Office of

Cultural Resource Preservation

57a

INTERSTATE COMMERCE COMMISSION

WASHINGTON, D.C. 20423

OFFICE OF TRANSPORTATION ANALYSIS

February 13, 1986

Mr. Thomas F. King

Director, Office of Cultural

Resource Preservation

The Old Post Office Building

1100 Pennsylvania Avenue, N.W.

Room 809

Washington, D.C. 20004

Dear Mr. King:

Thank you for your letter of January 30, 1986, con-

cerning Docket No. AB-239X, a proceeding seeking to

exempt from economic regulation the abandonment of one

mile of Sierra Railroad track in or near Sonora, Califor-

nia. The exemption petition was granted by the ICC,

which was unaware that the railroad had been determined

to be eligible for listing in the National Register of

Historic Places.

We recently contacted the railroad in an effort to en-

courage voluntary compliance with the historic preserva-

tion process. We were informed that the railroad has

ceased salvage operations along the one-mile segment of

track that was the subject of its exemption petition. The

extent of loss has yet to be determined.

If, upon further investigation, it appears that what-

ever remains of the track is worthy of preservation, we

will proceed in accordance with our draft programmatic

memorandum of agreement (copy enclosed). That agree-

ment, which has been pending for more than six months,

strikes the most effective balance between the conflicting

statutory objectives of the Interstate Commerce Act and

58a

the National Historic Preservation Act. Accordingly, we

have chosen to operate under the terms of the agreement

despite the fact that it has not been ratified.

We will keep you informed with respect to any further

developments in this matter.

Sincerely,

/s/ Carl Bausch

CARL BAUSCH

Chief

Section of Energy and

Environment

Enclosure

59a

INTERSTATE COMMERCE COMMISSION

MEMORANDUM

Date: July 31, 1986

To: Donald Shaw, Acting Deputy Director

Office of Proceedings

From: Wm. R. Southard, Director

Office of Transportation Analysis

Subject: AB-239X SIERRA RAILROAD ABANDON-

MENT EXEMPTION PETITION

This responds briefly to your request for our views in

the matter of the Friends of the Sierra Railroad’s peti-

tion to reopen the subject abandonment exemption pro-

ceeding for the limited purpose of complying with section

106 of the National Historic Preservation Act. A review

of the ICC’s approach to compliance with the National

Historic Preservation Act would be helpful.

The ICC is aware of its nondelegable responsibilities

under the National Historic Preservation Act and imple-

mental rules promulgated by the Advisory Council on

Historic Preservation. In order to fulfill those responsi-

bilities, the ICC requires railroad abandonment applicants

in nonexempt proceedings to supply historic preservation

officers in each affected State with relevant information.

For reasons not entirely clear, the ICC did not incorporate

this requirement into its procedures governing exempt

transactions. Instead, an all purpose notice is provided

in exempt proceedings only to a single agency in each

affected State. The designated agency for most States is

the executive department.

Given the very accelerated processing schedule involved

in exempt proceedings, state historic preservation offices

seldom become aware of railroad abandonment exemption

proposals. This was the case with the Sierra Railroad’s

abandonment exemption petition.

60a

The notice procedures adopted by the ICC to fulfill its

National Historic Preservation Act responsibilities in the

context of nonexempt abandonment proceedings is work-

able and fair. The same may not be said of the notice

procedures applicable to abandonment exemption proceed-

ings.

It is axiomatic in the law that

This text is long and has been trimmed here. Open the source document for the complete record.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.