Opposition Brief — CSX Transportation, Inc. v. Fritsch

Supreme Court, U.S.

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No. 95-962

Jn the Supreme Court of the Gnited States

OcTOBER TERM, 1995

CSX TRANSPORTATION, INC., ET AL., PE’

hi

JANET FRITSCH, E1

ON PETITION FOR A WRIT OF CERTIORARI Tt

NITED STATES COURT OF APPEALS FOR TH!

DISTRICT OF COLUMBIA CIRCUTI

BRIEF FOR THE FEDERAL RESPONDENTS IN

OPPOSITION

DREW S. Days, II]

So mciroer (re nerd

LOIS J. SCHIFFER

ASSISTaw}i Attorne i Cr@ii¢

JEFFREY P. KEHN]

y

Depart Prt oF J

Washington, D.t

HENRI F. RUSH

(re hie ral ( ‘OU) Ni

EVELYN G. KITAY

Attorney

Nurtace Transportat oO?

Washington, ax MOS

QUESTIONS PRESENTED

1. Whether the court of appeals properly exercised

jurisdiction over a petition for review of the Inter-

state Commerce Commission’s refusal to reopen a

final administrative decision.

2. Whether the court of appeals erred in holding

that a railroa.’ could effectuate an abandonment of a

rail line notwithstanding the Interstate Commerce

Commission’s imposition of a public use condition for

a 180-day period.

(1)

TABLE OF CONTENTS

Page

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TABLE OF AUTHORITIES

Cases:

Federal Crop Insurance Corp j Merrill, 332

i dasa steal paausiaes .

Friends of Sierra RR v. IC¢ ', S81 F.2d 663 (9th

Cir. 1989), cert. denied, 493 U.S. 1093 (1990) ......... i)

Hayfie ld Northern R.R. v. Chicago & N.W

Transp. Sad GUE MP, EE CUED oo. cc ccacancccccecceceocs 1]

ICC v. Brotherhood of Locomotive Engineers,

SE MITT EEE? =nescccdecocecvncscecestecensstéeseses 6, 7, 8, 9, 10

Lyng v. Payne, 476 U.S. 926 (1986) ............00..... i .

National Wildlife Federation v. ICC, 850 F.2d

a , conmidantsetobeesaeens i

Preseault v. ICC, 494 U.S.-1 (1990) ................... a. 4. 7

Rail Abandonments—tU'se of Rights-of-Way as Trails,

2 1.C.C.2d 591 (1986) ............... Laeusihesaamabetiededubdsicialanias 10

Statutes and regulations:

ICC Termination Act of 1995, Pub. L. No. 104-88,

109 Stat. 803:

§ 102(a), 109 Stat. 823 (49 U.S.C. 10903) «2.0.0.0... 2

§ 102(a), 109 Stat. 827 (49 U.S.C. 10905) .............. 2,3, 7

eR 8 ES Ee cebieekinidnas 2

ey ETE cnn dcnennonrenaacebesassencconns 2

National Trails System Act Amendments of 1983,

Pub. L. No. 98-11, 97 Stat. 48:

ee 3 Elo ome. . ” | See eae Z, 3, 12

(IIT)

28 U.S.C. 2

44 U.S.C.

19 U.S.C.

19 C.F.R.:

[V

Statutes and regulations—Continued:

Page

, 6

Section 1104.12(a) ........ cnmbauhiibadiacnaandidadsalsdeianioa ]

NI Scr kd ee ;)

IND RIED Soectce ee g

CREED REMNNUNNED Sovcren pict 12

Miscellaneous:

58 Fed. Reg. 8635 (1993) ........... jasish vais ounce Rnainkents 3

H.R. Conf. Rep. No. 422, 104th Cong., Ist Sess.

(1995)

Jn the Supreme Court of the United States

OCTOBER TERM, 1995

No. 95-962

CSX TRANSPORTATION, INC., ET AL., PETITIONERS

JANET FRITSCH, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR THE FEDERAL RESPONDENTS IN

OPPOSITION

OPINION BELOW

The opinion of the court of appeals (Pet. App. la-

13a) is reported at 59 F.3d 248,

JURISDICTION

The judgment of the court of appeals was entered on

July 18, 1995. Petitions for rehearing were denied on

September 18, 1995. Pet. App. 16a-17a. The petition

for a writ of certiorari was filed on December 18, 1995

(a Monday). The jurisdiction of this Court is invoked

under 28 U.S.C. 1254(1).

(1)

STATEMENT

1. This case concerns a rail abandonment pro-

ceeding before the former Interstate Commerce

Commission (ICC).' On January 25, 1993, petitioner

CSX Transportation, Inc. (CSX) filed a “notice of

exemption” to abandon an “out-of-service” rail line

that it had operated between Bloomington and Bed-

ford, Indiana. See Pet. App. 18a-20a. On February 1,

1993, petitioner Monroe County Parks and Recrea-

tion Department (Monroe County) notified the ICC

that it was interested in using the line for interim

trail use under Section 208 of the National Trails

System Act Amendments of 1983, Pub. L. No. 98-11, 97

Stat. 48, 16 U.S.C. 1247(d) (Trails Act). Monroe

' On December 29, 1995, the President signed Pub. L. No.

104-88, 109 Stat. 803, “The ICC Termination Act of 1995”

(ICCTA). That statute abolished the ICC and transferred

many of its rail functions to the Surface Transportation Board

(STB), effective January 1, 1996. However, the new Act does

not affect suits commenced before its effective date where, as

here, the suit involves functions transferred to the STB. See

ICCTA Section 204(c)(2). The functions at issue in this

proceeding, which were formerly performed by the ICC, are

now vested in the STB by virtue of 49 U.S.C. 10903 and 10905,

as reenacted in the ICCTA. Section 204(a) of the ICCTA pro-

vides that all regulations previously issued by the ICC “shall

continue in effect according to their terms until modified, ter-

minated, superseded, set aside, or revoked in accordance with

law by the” STB. This brief will refer to the ICC and to the

provisions of the Interstate Commerce Act as they existed

prior to the enactment of the ICCTA. However, we request

that the records in this case be changed to substitute the STB

for the ICC as a respondent in this proceeding.

* The Trails Act directs the Commission not to permit aban-

donment where a State, political subdivision, or qualified

private organization is prepared to assume full responsibility

County requested that the ICC impose a public use

condition under 49 U.S.C. 10906° to give it additional

time to pursue a trail use agreement with CSX. See

Pet. App. 3a, 41a. On February 16, 1993, the ICC pub-

lished a notice of the abandonment proposal in the

Federal Register. See 58 Fed. Reg. 8635 (1993). The

notice specifically alerted the public that (1) requests

for trail use and/or public use conditions could be

made and (2) environmental, historic preservation,

for management of such rights-of-way and for any legal

liability arising out of such “interim use” as a trail; that policy

serves “to preserve established railroad rights-of-way for

future reactivation of rail service.” 16 U.S.C. 1247(d). Section

1247(d) provides that interim trail use “shall not be treated, for

purposes of any law or rule of law, as an abandonment of the

use of such rights-of-way for railroad purposes.” See Preseau/t

v. 1CC, 494 U.S. 1, 6-9 (1990). The Trails Act was not changed

in the ICCTA.

* Former 49 U.S.C. 10906 (1988) provided in pertinent part:

When the [ICC] finds [that abandonment or discontinuance

is to be permitted], the Commission shail find further

whether the rail properties that are involved in the

proposed abandonment * * * are suitable for use for

public purposes, including highways, other forms of mass

transportation, conservation, energy production or trans-

mission, or recreation. If the Commission finds that the rail

properties proposed to be abandoned are suitable for public

purposes, the properties may be sold, leased, exchanged, or

otherwise disposed of only under conditions provided in the

order of the Commission. The conditions may include a

prohibition on any such disposal for a period of not more

than 180 days after the effective date of the order, unless

the properties have first been offered, on reasonable terms,

for sale for public purposes.

The ICCTA public use provision (Section 10905) is similar

but adds that proposals for “continued rail operations” will take

priority.

public use and/or trail use conditions would be

imposed, where appropriate, in a subsequent decision.

The authority to abandon was scheduled to take effect

in March 1993, unless stayed pending reconsideration.

See Pet. App. 18a-20a.

In a submission dated March 16, 1993, CSX in-

formed the ICC that it had decided not to negotiate a

trail use agreement with Monroe County. On March

18, 1993, the ICC issued a decision (served on March

22), indicating that it was unable to impose a trail use

condition at that time, due to CSX’s unwillingness to

consider trail use. See Pet. App. 41a-44a.* To permit

additional time for consideration of public use options,

the ICC imposed a 180-day public use condition. Jbid.

On March 23, 1993, CSX wrote to the ICC indicating

that it had “abandoned” the line. See id. at 4a. Never-

theless, CSX and Monroe County negotiated for the

next several months concerning possible use of the

right-of-way as a trail. See id. at 22a-23a. On

September 14, 1993, just before the 180-day period

expired, CSX again wrote to the ICC, stating that it

had reached an agreement with Monroe County for

interim trail use. See id. at 5a. CSX asked the ICC to

reopen the abandonment proceeding and to .issue a

Notice of Interim Trail Use (NITU) to permit the

trail use. See id. at 4a-5a.°

By decision served on September 27, 1993, the ICC

imposed the trail condition. Pet. App. 2la-24a. In its

4 Trail conditions may not be imposed without the full

consent of the railroad. See National Wildlife Federation v.

ICC, 850 F.2d 694, 699-702 (D.C. Cir. 1988).

° The ICC issues an NITU when a prospective trail user has

requested an interim trail use arrangement and the carrier has

indicated its willingness to negotiate such an arrangement. See

Preseault, 494 U.S. at 7 n. 5.

I

decision, the ICC found that it retained authority to

impose a trail condition because it had maintained

jurisdiction over the property while the public use

condition was in force. Jd. at 23a. No petition for

judicial review of that decision was filed within the

60-day period established by statute for the initiation

of judicial challenges to ICC decisions."

On November 8, 1993, 43 days after service of the

ICC order imposing the trail condition, 18 landowners

(including Victor Oolitic Stone Company, one of the

petitioners below), purporting to act for themselves

and others similarly situated, moved for administra-

tive reconsideration of the ICC order. Pet. App. 37a-

40a.’ The motion for reconsideration was untimely

under ICC rules, which allow a maximum of 40 days

for the filing of motions seeking reconsideration of

rail abandonment decisions. 49 C.F.R. 1115.3; see Pet.

App. 6a-7a. The ICC denied reconsideration by deci-

sion issued on March 22, 1994. Id. at 28a-36a. The

landowners then petitioned for review of the March 22

refusal to reopen the proceeding.

2. On review of the refusal to reopen, the court of

appeals reversed the ICC’s decision to impose a trail

condition. Pet. App. la-13a. The court first rejected

the intervenors’ challenge to its jurisdiction. Jd. at

6a-9a. The court acknowledged the jurisdictional

6 Under 28 U.S.C. 2344, a provision of the Hobbs Act, any

“party aggrieved by the final order [of the ICC or, now, the

STB] may, within 60 days after its entry, file a petition to

review the order in the court of appeals wherein venue lies.”

7 The ICC also received a number of letter protests in late

September 1993. Because those letters were not served on

parties to the proceeding and omitted required elements of

motions for reconsideration, they were added to the ICC file as

letter protests. See Pet. App. 25a-27a.

6

limitation imposed by /CC v. Brotherhood of Locomo-

tive Kngineers, 482 U.S. 270 (1987) (Locomotive

Engineers), which held that where a party seeks

reconsideration of a prior agency order on the ground

of “material error,” the agency’s denial of recon-

sideration is not subject to judicial review.” The

court of appeals distinguished Locomotive Engineers

on the ground that the landowners’ petition to reopen

the ICC’s abandonment decision had been based on

“non-pretextual grounds of new matter or changed

circumstances, and not merely on [allegations of|

material error in the original agency decision.” Pet.

App. 8a (citing Locomotive Engineers, 482 U.S. at

281). .

The court of appeals next considered the land-

owners’ challenge to the ICC’s authority to impose a

trail condition based on the agreement reached be-

tween CSX and Monroe County. The court again

found for the landowners, ruling that the ICC’s

jurisdiction had ended in March 19938, when CSX

initially claimed to have abandoned the disputed rail

line. The court determined that neither the 180-day

public use condition imposed under 49 U.S.C. 10906

nor any other provision of the ICC’s March 18 order

* As the court of appeals observed (Pet. App. 6a), the

petition for review here, filed May 19, 1994, was well outside

the 60-day period established by 28 U.S.C. 2344 for seeking

review of the ICC’s September 27, 1993, decision to issue an

NITU. It was, however, filed within 60 days of the Commis-

sion’s March 22, 1994, order denying the landowners’ motion

for reconsideration.

~)

had limited CSX’s authority to consummate abandon-

ment. Pet. App. 9a-13a.”

ARGUMENT

We agree with petitioners that this case was

wrongly decided by the court. of appeals. The court

misapplied this Court’s decision in Locomotive

Engineers and misconstrued 49 U.S.C. 10906 (now 49

U.S.C. 10905). Further review of the issues raised

here, however, does not appear warranted at this time.

1. The court of appeals erred in ruling that it had

jurisdiction to review the ICC’s decision." This

Court in Locomotive Engineers distinguished _ be-

tween an agency’s denial of a petition to reopen based

upon a claim of “‘material error’ in the original

agency decision” (which is not judicially reviewable)

and denial of a petition to reopen based upon a claim of -

“new evidence or changed circumstances” (which is

subject to judicial review). 482 U.S. at 278-279.

Acknowledging that “the question may be a close

one” (Pet. App. 9a), the court of appeals ruled (id. at

8a) that the landowners presented “new material”

within the meaning of Locomotive Engineers in their

petition for reconsideration. That conclusion was

incorrect. The only argument for reconsideration

presented in the landowners’ November 8, 1993,

motion to reconsider concerned the ICC’s allegedly

erroneous assertion of authority to impose a trail

* An authorized abandonment, once fully exercised or “con-

summated,” removes the line from the national transportation

system. See Preseault, 494 U.S. at 5-6 n. 3.

” Although the government did not contest the court of

appeals’ jurisdiction in its brief to the court of appeals panel,

see Gov't C.A. Br. 1, we now agree with petitioners that the

court lacked jurisdiction.

condition after CSX had informed the ICC that it had

“abandoned its common carrier obligations in the

railroad corridor on or about March 19, 1993.” Jd. at

38a. Thus, the petition for reconsideration raised

neither new evidence nor changed circumstances; it

simply alleged that the ICC’s decision to impose a

trail condition was unlawful at the time it was made.

Under Locomotive Engineers, the petition for review

should therefore have been dismissed.

The court of appeals concluded that “the Commis-

sion was in fact presented with new material accom-

panying the motion to reopen. Specifically, [the land-

owners] asserted before the Commission that they

were denied the opportunity to submit protests,

arguing that CSX’s request to reopen the proceeding

was made beyond the Commission’s procedural dead-

lines to file protests, and that [the landowners] were

unaware of the filing of the CSX motion.” Pet. App.

7a-8a (footnote omitted). Even if we assume that an

interested party’s belated awareness that a matter is

before an agency might sometimes constitute “new

material” or “ehanged circumstances” within the

meaning of Locomotive Engineers, the court of

appeals erred in exercising jurisdiction here. The

ICC’s February 16, 1993, Federal Register notice

specifically alerted the interested public that “trail

use\rail banking conditions could be imposed in a later

decision.” Pet. App. 20a."" The Commission’s regula-

!! It is well settled that publication in the Federal Register

provides legally sufficient notice to all interested or affected

persons, regardless of actual knowledge or hardship resulting

from ignorance. See, e.g., Lyng v. Payne, 476 U.S. 926, 942

(1986) (Federal Register notice adequate to publicize the avail-

ability of certain low interest loans); Federal Crop Insurance

Corp. v. Merrill, 332 U.S. 380, 384-385 (1947) (wheat crop insur-

9

tions provide that “[iJnterested persons may become

parties to an abandonment or discontinuance _pro-

ceeding by filing written comments or protests with

the Commission.” 49 C.F.R. 1152.25(a). Those regu-

iations also require that “[e]very document filed with

the Commission” must be served “upon all parties to

the proceeding.” 49 C.F.R. 1104.12(a). Having de-

clined to become parties to the abandonment. pro-

ceeding, the landowners should not have been per-

mitted to invoke their belated awareness of CSX’s

September 14, 1993, filing as “new material” or a

“changed circumstance.”

Even if the belated discovery of the September 14,

1993, filing were deemed to be reasonable, moreover,

the landowners had ample opportunities to protect

their rights. A timely petition for reconsideration

would have tolled the time for seeking judicial review

of the September 27, 1993, NITU itself.” See Locomo-

tive Engineers, 482 U.S. at 279, 284. Alternatively,

the landowners might have sought judicial review

within the 60-day period after the September 27, 1993,

NITU, since the filing of a request for agency recon-

ance regulations were binding after insured’s Federal Register

publication regardless of actual knowledge of the regulations).

Accord 44 U.S.C. 1507 (publication in Federal Register “is

sufficient to give notice of the contents of the document to a

person subject to or affected by it”); Friends of Sierra RR v.

ICC, 881 F.2d 663, 667-668 (9th Cir. 1989), (Federal Register

notice legally sufficient in ICC exempt abandonment pro-

ceeding), cert. denied, 493 U.S. 1093 (1990).

“The motion for reconsideration stated that the relevant

events “were only recently discovered by the Class of adjacent

property owners,” Pet. App. 39a, but did not assert that the in-

formation had been discovered so “recently” as to preclude

timely filing of a petition for reconsideration.

10

sideration is not a prerequisite to a petition for

judicial review. See id. at 284-285. The need to seek

judicial review of the agency’s refusal to reopen arose

only because the landowners failed to exercise either

of those dptions.

Despite the court of appeals’ error, there appears to

be no compelling need for this Court’s review at the

present time. The practical effect of the court’s error

is likely to be limited. The court of appeals cited and

, purported to apply Locomotive Engineers. Its mis-

application of Locomotive Engineers was based on its

evaluation of the facts presented to it regarding the

abandonment of this particular railroad line. See Pet.

App. 7a-8a.

2. The court of appeals also erred in holding that

the [CC’s imposition of a public use condition under

Section 10906 did not prevent the railroad from aban-

doning the disputed line. Since its enactment in 1976,

Section 10906 has been an important tool in providing

time for interested parties to attempt to acquire rail

rights-of-way for public purposes through arm’s |

length negotiations. Since 1986, the ICC has inter-

preted Section 10906 to permit it to bar the railroad

from disposing of the right-of-way for up to 180 days,

pending voluntary negotiations for interim trail use.”

The court of appeals erred in substituting its own

interpretation of Section 10906 for the reasonable,

long-standing interpretation of the agency charged

with administering the statute.

Contrary to the court of appeals’ view, the language

of Section 10906 is broad enough to support the [CC’s

a aan tt ee

Rail Abandonments - Use of Rights-of-Way as Trails, 2

1.C.C.2d 591, 609 (1986) (Section 10906 applies to easements as

well as property owned in fee by the railroad).

eR Lm mT eT oes |

1]

construction. Under Section 10906, if the ICC

authorizes an abandonment, it must determine

whether the rail properties “are suitable for use for

public purposes, including * * * recreatidn.” If the

ICC determines that use for public purposes may be

suitable, the ICC has the authority to bar the sale,

lease, exchange, or any other disposition of the rail

properties involved for up to 180 days, unless the

properties have first been offered, on reasonable

terms, for sale for public purposes.

Thus, Section 10906 permits the ICC to prohibit

any disposal of the rail properties (i.e., to require the

railroad to keep the transportation corridor intact)

for up to 180 days pending negotiations for public

use (including trail or other recreational use).

Nothing in the language of Section 10906 compels

the court of appeals’ conclusion that public use con-

ditions cannot forestall legal abandonment of a rail

line where reversionary interests may be involved.

Unlike Hayfield Northern R.R. v. Chicago & N.W.

Transp. Co., 467 U.S. 622, 633-634 (1984), which held

that the consummation of unconditioned abandon-

ment authority removes the property from the ICC’s

control, after which it may be dealt with by state and

local jurisdictions in the same manner as other

property within their borders, the property at issue

‘4 Indeed, this is confirmed by the legislative history of the

ICCTA, which explains (H.R. Conf. Rep. No. 422, 104th Cong.,

Ist Sess. 181-182 (1995)) (emphasis added):

In replacing former Section 10906, this provision retains

existing agency authority to examine the possibility that a

line proposed for abandonment may be suitable for alterna-

tive public uses. Abandonment may be postponed for up to 6

months to allow for the pursuit of such alternatives.

12

in this proceeding was the subject of an unexpired

public use condition.

Notwithstanding the defect in the court’s con-

struction of Section 10906, we see no compelling need

for further review at this time. The court’s ruling,

which is largely fact-bound (see Pet. App. 1la-12a),

does not present an issue of sufficient general

importance to warrant review by this Court at this

point. The impact of the court’s ruling likely will be

limited because parties seeking to ensure interim

trail use have an alternative remedy: invoking the

Trails Act during the abandonment proceeding.

Under the regulatory procedures implementing 16

U.S.C. 1247(d), when a prospective trail user requests

an interim trail use arrangement and the carrier

indicates its willingness to negotiate such an ar-

rangement, the ICC (now the STB, see note 1, supra)

issues an NITU. 49 C.F.R. 1152.29(d). When an

NITU is issued, the parties have a 180-day period in

which to negotiate an interim trail use arrangement.

If no agreement is reached, the NITU automatically

con-verts into an effective certificate authorizing

abandonment. In turn, if a trail use agreement is

reached, it is automatically authorized by the NITU.

Moreover, a railroad wishing to consider trail use can

avoid the effect of the court of appeals’ decision by

simply refraining from submitting a letter declaring

that it has abandoned the line of railroad. See Pet.

App. lla.

Ls

)

CONCLUSION

The petition for a writ of certiorari should be

denied.

Respectfully submitted.

DREW S. DAYs, II]

Solicitor (re nera

LOIS J. SCHIFFER

Assistant Attorne if (re perdu

JEFFREY P. KEHNI

Attorney

HENRI F. RUSH

(6 fi ral ( "OUNRE j

EVELYN G. KITA

Attorney

SUTTTAICe Transpo farion Board

FEBRUARY 1996