Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-99-01054/USCOURTS-caDC-99-01054-0/pdf.json

Parties Involved:
Central Kansas Railway, Limited Liability Company
Intervenor
Citizens Association of Marion and McPherson Counties
Petitioner
Kevin Jost
Petitioner
Alvin Kroupa
Petitioner
Allen Schlehuber
Petitioner
Surface Transportation Board
Respondent
United States of America
Respondent

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 4, 1999 Decided October 22, 1999

No. 99-1054

Kevin Jost, et al.,

Petitioners

v.

Surface Transportation Board and

United States of America,

Respondents

Central Kansas Railway, Limited Liability Company,

Intervenor

On Petition for Review of an Order of the

Surface Transportation Board

Nels J. Ackerson argued the cause and filed the briefs for

petitioners.

Troy W. Garris, Attorney, Surface Transportation Board,

argued the cause for respondents. With him on the brief

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were Henri F. Rush, General Counsel, and Ellen D. Hanson,

Deputy General Counsel, and M. Alice Thurston, Attorney,

United States Department of Justice.

Thomas F. McFarland, Jr. was on the brief for intervenor.

Before: Edwards, Chief Judge, Wald and Williams,

Circuit Judges.

Opinion for the Court filed by Circuit Judge Wald.

Wald, Circuit Judge: Kevin Jost petitions for review of an

order of the Surface Transportation Board ("the Board")

declining to reopen a proceeding wherein the Board issued a

notice of interim trail use ("NITU") for a railroad line formerly operated by the Central Kansas Railway ("CKR").1 Jost

sought to reopen the proceeding on the grounds that, as a

result of right-of-way sales by CKR, CKR's notice of exemption was void for misleading statements, rail banking and

interim trail use were not possible, and CKR had abandoned

the line. Jost also challenged the Board's refusal to review

the financial fitness of the Central Kansas Conservancy

("CKC" or "the Conservancy"), the trail sponsor that acquired the line from CKR.

We uphold the Board's decision not to review the fitness of

the Conservancy to be a trail sponsor. However, we find that

the Board has not adequately explained why Jost's evidence

concerning the right-of-way sales did not require reopening

the proceeding. Accordingly, we grant the petition for review

and remand to the Board for further proceedings.

I. Background

As part of its jurisdiction over the common carrier responsibilities of railroads, the Surface Transportation Board must

approve the abandonment of a railroad line.2 Pursuant to a

__________

1 Jost's petition is joined by Alvin Kroupa, Allen Schlehuber, and

the Citizens Association of Marion and McPherson Counties. For

convenience, we will refer to petitioners simply as "Jost."

2 Once abandonment occurs, "as a general proposition [the agency's] jurisdiction terminates." Preseault v. ICC, 494 U.S. 1, 5-6 n.3

(1990).

statutory mandate, the Board has established an abbreviated

process for abandonment of "out-of-service" lines.3 See 49

U.S.C. s 10502 (Supp. III 1998); 49 C.F.R. s 1152.50 (1998).

When a railroad files a verified "notice of exemption" stating

it wishes to abandon an out-of-service line, the Board publishes a notice in the Federal Register which states that the

railroad will be authorized to abandon the line in thirty days,

unless the Board stays the exemption pursuant to a petition.4

The notice also states that the exemption is void ab initio if

the railroad's notice contains false or misleading information.

See 49 C.F.R. s 1152.50(d)(3).

At this point, the "rails-to-trails" program established under the Trails Act, 16 U.S.C. s 1247(d), may come into play.

The Trails Act authorizes the Board "to preserve for possible

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future railroad use rights-of-way not currently in service and

to allow interim use of the land as recreation trails." Preseault v. ICC, 494 U.S. 1, 6 (1990). Thus, the Trails Act has

two goals, to preserve railroad rights-of-way and to encourage

the creation of new recreation trails. See Preseault, 494 U.S.

at 17-18.

The Trails Act comes into play if, while the exemption is

pending, a private organization files a "statement of willingness" with the Board. The statement of willingness is an

indication that the private organization (the "trail sponsor") is

willing to take over management of and financial responsibility for the right-of-way, for the purposes of "rail banking" the

line and establishing a trail on the right-of-way.5 If the

__________

3 A line is considered "out-of-service" if "no local traffic has

moved over the line for at least 2 years and any overhead [i.e.,

through] traffic on the line can be rerouted over other lines" and no

complaints about reduced rail service are pending or have been

decided adverse to the railroad in the prior two years. 49 C.F.R.

s 1152.50(b) (1998).

4 Once the exemption becomes effective, the railroad is authorized

to abandon the line. Under current regulations, the railroad must

file a notice with the Board to consummate abandonment. See 49

C.F.R. ss 1152.50(e), 1152.29(e)(2).

5 "Rail banking" refers to the preservation of the right-of-way for

possible future reinstitution of rail service. In addition to private

railroad indicates its willingness to negotiate transfer of the

line to the trail sponsor, then the Board will issue a notice of

interim trail use ("NITU"). Under the NITU, the authorization to abandon the line is stayed for a set period of time and

the railroad is instead authorized to transfer the line for rail

banking and interim trail use. If the parties' negotiations are

successful, then the line is conveyed for interim trail use and

possible future rail service. If the negotiations are unsuccessful, then the railroad's exemption takes effect, and the

line may be abandoned. Whether the negotiations over interim trail use are successful or not, the Board need not reopen

the proceeding once the NITU is issued.6

In February 1996, the Central Kansas Railway sought to

abandon a 33.4 mile rail line that it owned largely as easements over land belonging to others. CKR filed a notice of

exemption with the Board, indicating that the line qualified as

"out-of-service." The Board published a notice in the Federal

Register stating that the exemption would be effective April

12, 1996, unless the Board took further action. Central

Kansas Ry., LLC--Abandonment Exemption--in Marion &

McPherson Counties, KS, 61 Fed. Reg. 10,428, 10,429 (1996).

The notice also states that the exemption would be void ab

initio if CKR's notice contained false or misleading information. Id.

On April 9, 1996, CKR indicated to the Board that it had

not abandoned the line and was willing to negotiate rail

banking-interim trail use with an entity (Jennings & Co.) that

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had filed a statement of willingness to assume responsibility

for the line. On April 12, 1996, the Board issued a notice of

interim trail use and stayed the exemption for six months.

The Board subsequently granted two additional extensions of

time for the parties to negotiate rail banking-interim trail use.

In June 1997, the Central Kansas Conservancy also filed a

__________

organizations, state and local governments may also serve as trail

sponsors. See 16 U.S.C. s 1247(d) (Supp. III 1998).

6 However, on request of the parties, the Board will reopen the

proceeding to grant further stays of the exemption to allow the

parties more time for negotiations.

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statement of willingness and requested a NITU. On June 12,

1997, in its final action in this proceeding (other than the

denial of the petition to reopen), the Board decided to issue a

NITU and to postpone the effective date of the exemption

until December 13, 1997. On September 19, 1997, pursuant

to this NITU, the railroad conveyed the 33.4 mile line to the

Conservancy for rail banking-interim trail use.

On September 25, 1997, Jost, who owns land over which the

line passes, filed a petition to reopen the abandonment proceeding on the grounds of material error and changed circumstances. Jost stated that both before and after filing its

notice of exemption, CKR had conveyed portions of the rightof-way, which rendered the line unsuitable for rail banking,

and therefore for interim trail use. Jost argued that CKR's

failure to disclose these sales caused the Board to erroneously

issue a NITU. Jost also stated that CKR's conveyance of

portions of the right-of-way, together with the lack of service

on the line and the removal of rails, ties, and ballast, showed

that CKR had consummated abandonment of the line. Finally, Jost argued that changed circumstances, i.e., recent expressions of opposition to interim trail use by local governments, indicated that the Conservancy would be unable to

meet its financial obligations for trail management.

CKR responded to Jost's filings by stating that, although it

had conveyed back some right-of-way along the line, it had

retained sufficient right-of-way in all sales to allow for rail

banking-interim trail use.7 Since the right-of-way sales did

not impact rail banking or interim trail use, CKR argued it

was not misleading to omit them.

__________

7 The pre-sale right-of-way width was from 100-300 feet. The

post-sale right-of-way width, according to CKR, was from 50-230

feet. Right-of-way as little as 30 feet wide has been found to be

sufficient for safe rail operations. See Boston & Maine Corp. &

Springfield Terminal Ry. Corp.--Abandonment & Discontinuance

of Service in Hartford County, CT in the Matter of a Request to Set

Terms & Conditions, (Docket No. AB-32) (Sub.-No. 43) (Aug. 9.

1991) (citing examples of 30-, 30- and 50-foot wide rights-of-way,

but noting that question is highly fact specific). Thus, CKR contends it only sold "excess" right-of-way.

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Jost responded by arguing that CKR had not simply conveyed "excess" right-of-way. Jost presented affidavits stating that, in three places, CKR had sold the entire, or "fullwidth," right-of-way, breaking up the continuity of the line.

CKR replied that the deeds in question were facially ambiguous, and that it believed it had only conveyed excess right-ofway.8

The Board denied Jost's petition to reopen the abandonment proceeding. The Board concluded that CKR's discontinuance of service and removal of rails, ties and ballast did

not consummate abandonment, particularly in light of CKR's

ongoing negotiations over rail banking-interim trail use.

Central Kansas Ry., LLC--Abandonment Exemption--in

Marion & McPherson Counties, KS, (Docket No. AB-406)

(Sub.-No. 6X) (Dec. 19, 1998) ("CKR--Abandonment Exemption"), slip op. at 3 (citing Birt v. STB, 90 F.3d 580 (D.C. Cir.

1996)). The Board also found that Jost had not made a

specific showing that the Conservancy would be unable to

meet its financial obligations, and therefore the Board would

not reopen the proceeding to examine the Conservancy's

financial capacity.

Finally, the Board stated:

CKR has refuted these allegations [that the right-of-way

sales made interim trail use and rail banking impossible]

by submitting a verified statement specifically stating

that a sufficient width of right-of-way was conveyed to

CKC in all instances to permit trail use and to permit rail

service to be reinstituted for the entire length of the

right-of-way should there be an occasion for reestablishment of such rail service in the future. Moreover, while

all of the parties' filings will be accepted into the record,

__________

8 The description of property to be conveyed in each case was a

map which contained both a written description and a yellow-shaded

area indicating what was to be conveyed. However, the written

description was inconsistent with the amount of right-of-way within

the yellow-shaded area. CKR submitted affidavits that its intent

was to sell only the amount indicated within the yellow-shaded area,

and not the entire amount of right-of-way in the written description.

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we will not attempt to resolve all of the property issues

that these filings raise. State courts appear to be the

proper place for parties to resolve property disputes

about the parties' expectations and how much property

has been transferred and how much has been retained.

Id. at 5. The Board did not directly address Jost's contention

that the right-of-way sales rendered the notice of exemption

misleading and false, or that the right-of-way sales were

evidence of abandonment.

Jost petitioned for review of the Board's decision not to

reopen the proceeding, arguing that it was arbitrary and

capricious for the Board not to examine whether the Conservancy was financially capable of being a trail sponsor, not to

find that the notice of exemption was void ab initio, not to

reconsider whether interim trail use was appropriate in light

of the sale of portions of the right-of-way, and not to find that

the line had been abandoned.

II. Discussion

A. Standard of Review

At the outset we must resolve the parties' disagreement

over the standard of our review of the Board's decision not to

reopen the proceeding. The Board contends that it is entitled to a particularly deferential standard of review, since

Jost seeks review of a decision not to reopen a prior proceeding. Jost, however, contends that the Board's decision not to

reopen the proceeding was clearly arbitrary and capricious

because it was flatly contrary to the Board's own regulations.

We agree with neither contention.

We have recently held that "a petition seeking review of an

agency's decision not to reopen a proceeding is not reviewable

unless the petition is based upon new evidence or changed

circumstances." Southwestern Bell Tel. Co. v. FCC, 180 F.2d

307, 311 (D.C. Cir. 1999). Southwestern Bell stated that the

"test for new evidence" is whether the evidence identified by

petitioners are " 'facts which through no fault of [the petitioner's], the original proceeding did not contain.' " Id. at 312

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(quoting ICC v. Brotherhood of Locomotive Eng'rs, 482 U.S.

270, 279 (1987)) (alterations in original).

In this case, we cannot fault petitioners for the lack of

information in the record about CKR's right-of-way sales.

First, the three sales where it is alleged that "full-width"

right-of-way was sold did not occur until after the notice of

exemption was filed. In addition, because the grant of a

NITU appears to be virtually automatic once a potential trail

sponsor and a railroad indicate their willingness to negotiate

interim trail use, there is very little time when a request for a

NITU is pending before the Board.9 Thus, the issuance of a

NITU is not a typical agency adjudication where any interested party has an opportunity to put evidence in the record for

the agency's consideration before the agency reaches its

decision. We do not see this process as being inconsistent

with, or an unreasonable interpretation of, the Trails Act, but

we cannot fault petitioners for failing to raise the question of

the right-of-way sales in the brief period in which the request

for a NITU was pending.10

It is true that the literal language of Jost's petition sought

to reopen the proceeding on the grounds of "material error,"

which would ordinarily not be a valid basis for a petition for

review. See Locomotive Eng'rs, 482 U.S. at 280; Southwestern Bell, 180 F.3d at 311. However, Jost repeatedly indicates

__________

9 For example, in this case, the first statement of willingness was

filed April 9, 1997, and the Board decided to issue the NITU on

April 11, 1997, while the second statement of willingness was filed

on June 6, 1997, and the Board decided to issue a NITU on June 12,

1997.

10 This is not to say that the timing of the petition is irrelevant.

It may be that the Board is entitled to refuse to reopen a proceeding where there is evidence a petitioner slept on her rights. At oral

argument, counsel for the Board suggested that the delay in raising

the issue of right-of-way sales was a valid reason not to reopen this

proceeding, but there is nothing in the Board's decision which

suggests that it was relying on that rationale. See SEC v. Chenery,

332 U.S. 194, 196 (1947) (reviewing court must "judge the propriety

of [agency] action solely by the grounds invoked by the agency").

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that the "material error" he alleges is not that the Board

wrongly issued the NITU on the basis of the evidence in front

of it, but rather that the Board's decision was "based on

inaccurate, incomplete and misleading information provided

by [CKR]." Joint Appendix ("J.A.") at 94; see also id. at 103

("STB's imposition of trail use conditions on the railroad

corridor was in material error because it was based on

inaccurate and insufficient facts presented to the STB.").

Thus, we believe that it is clear that the purpose of Jost's

petition was not to challenge the Board's reasoning but to

bring new material to its attention, and therefore the decision

not to reopen the proceeding is reviewable. See Fritsch v.

ICC, 59 F.3d 248, 252 (D.C. Cir. 1995) (reviewing ICC's

decision not to reopen abandonment/trail condition proceeding because "[w]e ... interpret Locomotive Engineers as

permitting merits review of a refusal to reopen where the

motion to reopen was based on non-pretextual grounds of new

matter or changed circumstances, and not merely on material

error in the original agency decision").

While we believe that the Board's decision not to reopen is

reviewable, we do not accept Jost's contention that the Board

was required to reopen the proceeding once he filed a petition

containing new evidence. There is nothing in the Board's

regulations governing either petitions for reconsideration or

petitions to reopen proceedings which requires the Board to

grant such a petition. See 49 C.F.R. ss 1115.3, 1115.4.

Accordingly, we will review the Board's decision not to reopen

the proceeding under the familiar arbitrary and capricious

standard. See 5 U.S.C. s 706(2)(A).

"The requirement that agency action not be arbitrary and

capricious includes a requirement that the agency adequately

explain its result. The arbitrary and capricious standard of

the APA mandates that an agency take whatever steps it

needs to provide an explanation that will enable the court to

evaluate the agency's rationale at the time of decision."

Dickson v. Secretary of Defense, 68 F.3d 1396, 1404 (D.C. Cir.

1995) (internal quotation marks, brackets and citations omitted). "[W]e may not supply a reasoned basis for the agency's

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decision that the agency itself has not given. We will,

however, uphold a decision of less than ideal clarity if the

agency's path may reasonably be discerned." Motor Vehicles

Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29,

43 (1983) (citation omitted). In this case, we can discern the

agency's rationale with regard to the question of the Conservancy's fitness to be a trail sponsor. We are, however, unable

to discern the agency's path in addressing CKR's sale of

portions of the right-of-way.

B. CKR's Right-of-Way Sales

Jost presented three reasons why the alleged sale of fullwidth sections of the right-of-way required the Board to

reconsider its decision to allow interim trail use over the line.

First, Jost argued that the railroad's failure to disclose the

sale of portions of its right-of-way constituted false and

misleading information. See 49 C.F.R. s 1152.50(d)(3) (notice

of exemption void ab initio if it contains false or misleading

information). Second, Jost argued that the sale of full-width

right-of-way would cut the rail line in two, making it impossible to "rail bank" any part of the line, and therefore making

interim trail use inappropriate. Third, Jost argued that the

sale of portions of the line was additional evidence that CKR

consummated abandonment of the line, and therefore the

Board lost jurisdiction over the line, prior to issuance of the

NITU.

It appears that the sale of full-width right-of-way would be

material to the Board's decision in all of these three areas.

On the first issue, the Board argues in its brief that CKR's

notice of exemption is not void because there was no material

false statement. The Board relies on the fact that sale of the

right-of-way would not affect CKR's ability to use the exemption proceeding to abandon the line. However, sale of fullwidth right-of-way certainly could affect CKR's ability to

obtain a NITU and convey the line for interim trail use. We

do not see--and the Board has not seen fit to tell us--why

false statements that affect the issuance of a trail condition, if

not the exemption itself, are not material to the proceeding.

At oral argument, counsel for the Board also suggested that

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CKR may not have been under any obligation to inform the

Board that it had sold off portions of the right-of-way once it

filed its notice of exemption. Thus, it is possible that the

notice was not void ab initio because at the moment it was

filed it did not contain any material false statements, since

the right-of-way sold up to that point was not "full-width,"

and did not bisect the line. However, we are extremely

reluctant to accept that theory as a valid basis for upholding

the Board's decision, particularly in the absence of any evidence that the Board itself relied on such a theory. In the

first place, it appears that five sales of right-of-way took place

before the notice of exemption was filed, and the Board never

addressed the significance of those sales to the feasibility of

either conversion to trail use or eventual reinstitution of rail

service.11 See J.A. 117-18. Perhaps more importantly, in the

absence of a definitive statement by the Board that petitioners are under no obligation to supplement a filing which

becomes false or misleading due to subsequent events, such

as the later sale of full-width right-of-way, we do not think

counsel's statement at argument, that no regulation specifically requires updating information in the notice of exemption, is

sufficient to demonstrate that the Board takes such a parsimonious and time-limited view of its own regulations barring

false statements.12 Cf. 49 C.F.R s 1114.29 (party engaged in

discovery in a Board proceeding "is under a duty seasonably

to correct his response" if he "knows or later learns that his

response [to a discovery request] is incorrect"). Since the

Board never discussed the false statement issue in its decision, we cannot assume that any false statements CKR may

have made were not material.

__________

11 Since apparently none of these sales involved "full-width" rightof-way, there might be good reason for the Board to find that the

omission of these sales was not a material false statement, even as

to the NITU. However, we are not willing to assume such a finding

in the absence of any discussion by the Board of the question.

12 It is possible that such a limited view of what constitutes a false

statement could itself be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law," but we have no

occasion to decide that question here. 5 U.S.C. s 706(2)(A).

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As to the second issue, the effect of right-of-way sales on

rail banking, we do not read the Board's decision as saying

that, if full-width right-of-way sales had taken place, that fact

would not be material to its decision to impose a trail condition. The Board recognized that the parties were contesting

whether "CKR's [sales] have made interim trail use and rail

banking impossible" and indicated that if Jost's allegations

proved to be true, the Board "would revisit the issues."

CKR--Abandonment Exemption, slip op. at 5. Again, we see

no reason, and the Board's decision gives us none, why the

possibility that full-width sales occurred would not be material to the Board's decision to impose a trail condition.

Finally, we also think that the sale of right-of-way is

material evidence for the Board to consider in deciding

whether CKR abandoned the line prior to the issuance of the

NITU. We have previously indicated that "the pivotal issue"

in determining whether a railroad has consummated abandonment "is the intent of the railroad--as evidenced by a spectrum of facts varying as appropriate from case to case." Birt

v. STB, 90 F.3d 580, 585 (D.C. Cir. 1996) (internal quotation

marks omitted). In this case, the Board looked to CKR's

discontinuance of service, its removal of rails, ties and ballast,

its negotiations over interim trail use, and its ultimate statement that it had conveyed the line for interim trail use. We

can see no reason why the sale of portions of the right-of-way

would not also be an appropriate fact for the Board to

consider in evaluating the intentions of the railroad. It would

be strange, to say the least, if the removal of rails, ties and

ballast were material facts, but the sale of the entire right-ofway at a given point were not. Cf. RLTD Ry. Corp. v. STB,

166 F.3d 808, 812 (6th Cir. 1999) (upholding Board's conclusion that "a de facto abandonment occurred because the line

was no longer linked to and part of the interstate rail

system") (internal quotation marks omitted).

Since the possibility that CKR had sold off full-width rightof-way was material to the issues before the Board, the Board

needed to address forthrightly the issue of whether CKR did

sell off full-width right-of-way, or, at least, explain why the

possibility that full-width right-of-way was sold would not

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alter the Board's decision to issue a NITU. However, the

only reference by the Board to any of these issues was the

passage quoted at length above. Unfortunately, that passage

is entirely too opaque to enable us to review meaningfully the

Board's decision.

It is possible to read the sentence which states that "CKR

has refuted [Jost's] allegations" as a factual finding by the

Board, based on the affidavits in the record, that CKR had

not sold full-width right-of-way. In that case, we could

review the Board's finding to determine whether it had

sufficient support in the record not to be arbitrary and

capricious. However, in the very next sentence, the Board

states that it "will not attempt to resolve all of the property

issues that these filings raise," and suggests that the parties

should resolve their differences in state court.13

The basis for an administrative action

must be set forth with such clarity as to be understandable. It will not do for a court to be compelled to guess at

the theory underlying the agency's action; nor can a

court be expected to chisel that which must be precise

from what the agency has left indecisive. In other

words, [w]e must know what a decision means before the

duty becomes ours to say whether it is right or wrong.

SEC v. Chenery Corp., 332 U.S. 194, 196-97 (1947) (internal

quotation marks omitted).

In this case, we simply cannot tell what the decision means,

i.e., on what basis the Board concluded that Jost's evidence of

the sale of full-width right-of-way did not require reopening

__________

13 The Board's brief similarly attempts to straddle these two

approaches. In one place the brief states that "[t]he Board placed

substantial weight on CKR's verified statement ... [and] concluded

that petitioners had not proven that the conveyance of interests in

certain lots ... makes reactivation of rail service impossible."

Resp'ts' Br. at 13. Elsewhere the brief suggests that the Board

"declined to speculate on the outcome of a [state court] quiet-title

action," id. at 24, and "[p]roperly [d]eferred" to a state court

determination. Id. at 23.

the proceeding. It appears unlikely that the Trails Act either

requires the Board to determine for itself in every case the

validity of the railroad's property rights, or allows the Board

to disregard totally prima facie evidence that the railroad no

longer owned an adequate right-of-way. Cf. Idaho N. & Pac.

R.R. Co.--Abandonment & Discontinuance Exemption--In

Washington & Adams Counties, ID, Docket No. AB-433

(Sub.-No. 2X) (April 1, 1998) ("Idaho Northern") ("[I]f a trail

use arrangement is successfully negotiated, and a landowner

or other interested party presents evidence to call into question the continued application of the Trails Act, we would

reopen the proceeding to afford the trail user an opportunity

to demonstrate that it continues to meet the requirements of

the statute.").14 At the same time, even if some full-width

right-of-way was sold, it may be that the Act authorizes

interim trail use over the remaining right-of-way, assuming

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the Board retains jurisdiction over the line. We would defer

to the Board's reasonable interpretation of what the Act

requires, see Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43 (1984), if we could

discern the Board's interpretation in its decision.

Unfortunately, the Board's decision "cross[es] the line from

the tolerably terse to the intolerably" elliptic. Greater Boston Television Corp. v. FCC, 444 F.2d 841, 852 (D.C. Cir.

1970). The Board needs to articulate how it proceeds when

faced with an allegation that sales of full-width right-of-way

have occurred, and why it believes that practice is consistent

with statutory requirements governing its jurisdiction and the

__________

14 We do not hold that the Board is required to resolve disputed

issues of state property law, or even that the Board is necessarily

required to reopen the proceeding on the evidence presented by

Jost. If the Board chooses to reopen the proceeding, it may be

appropriate for the Board to stay proceedings pending action in a

state court. Alternatively, the Board may choose to make its own

determination, subject to revision upon notice of a final state court

judgment. We only require that the Board address the material

issues of fact which have been raised concerning the applicability of

the Trails Act in whatever way the Board finds most consistent with

the language and goals of the Act.

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Trails Act. At that point, if petitioners are still dissatisfied,

this court will have something to review.

If the Board was elliptic about why it need not consider

whether the sales made rail banking impossible, it was mute

on why it need not consider whether the sales made CKR's

notice of exemption void, or constituted evidence of abandonment of the line. Again, we presume neither to suggest a

rationale nor to find one in the tea leaves of the Board's

opinion. We simply hold that the Board must articulate the

reasoning behind its decision with sufficient clarity to enable

petitioners and this court to understand the basis for its

decision.

C. The Conservancy's Fitness to Serve as Trail Sponsor

The Board's treatment of Jost's challenge to its decision

not to reopen the proceeding to examine the financial fitness

of the Conservancy to serve as trail sponsor illustrates well

the Board's ability to articulate the basis for its decision.

Jost's petition, construed somewhat generously, challenged

both the Board's general policy concerning financial "fitness

tests" and the application of that policy to the Conservancy.

In rejecting Jost's challenge, the Board clearly stated the

standard it was applying, the rationale for that standard, and

why the petition did not satisfy that standard.

In its decision, the Board followed and restated the policy

with regard to financial "fitness tests" that was explained in

Idaho Northern. In Idaho Northern, the Board indicated

that it interpreted the phrase "qualified private organization"

in section 1247(d) to mean any organization willing to assume

management and financial responsibility for the line in question. In this case, as in Idaho Northern, the Board noted

that negotiation over a trail condition delays abandonment of

a line, and extends the railroad's responsibility for the rightof-way. Accordingly, "the primary purpose of a fitness test

would be to protect a railroad from wasting its time negotiating with an unfit trail sponsor. However, the railroad already has the ability to protect itself from that result merely

by refusing to consent to the issuance of the trail condition."

CKR--Abandonment Exemption, slip op. at 4; see also Idaho

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Northern (employing similar reasoning and noting that ten

years of experience with the Act had not shown any problem

with trail sponsors failing to meet their responsibilities). The

Board stated that not only was a financial fitness test for trail

sponsors unnecessary, but such a test would be contrary to

the intent behind the Trails Act because it could have the

effect of deterring or delaying interim trail use.

For these reasons, the Board applies a presumption that

any private organization that files a statement of willingness

meets the statutory requirement to be a trail sponsor. However, the Board's presumption that a trail sponsor is qualified

is rebuttable. The Board has indicated that "if it is shown

that the trail sponsor does not have the ability to continue to

meet the financial and liability conditions of the statute, the

trail condition would be involuntarily revoked." CKR--Abandonment Exemption, slip op. at 4-5.

Jost characterizes this policy as an abdication of the

Board's statutory responsibilities. We disagree and conclude

that the Board's policy is a reasonable interpretation of its

obligation under the statute. There certainly is nothing in

the statute which expresses a congressional intent contrary to

the Board's practices. Cf. Chevron, 467 U.S. at 842-43

("[T]he court, as well as the agency, must give effect to the

unambiguously expressed intent of Congress."). The Trails

Act is virtually silent on what makes a private organization

"qualified" to be a trail sponsor. The Act is clear, however,

that the Board "shall" impose a trail condition, and not permit

abandonment of a line, whenever a railroad is prepared to

convey the right-of-way to an organization that is "prepared

to assume full responsibility" for management of the line, for

liability, and for taxes owed. 42 U.S.C. s 1247(d) (Supp. III

1998); see also Goos v. ICC, 911 F.2d 1283, 1295 (8th Cir.

1990) (statute gives agency "little, if any, discretion to forestall a voluntary agreement to effect a conversion to trail

use"). It is certainly reasonable for the Board to draw from

the Act a congressional intent "to preserve for possible future

railroad use rights-of-way not currently in service and to

allow interim use of the land as recreation trails," Preseault,

494 U.S. at 6, and to carry out its mandate in ways that

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further, rather than unnecessarily hinder, those goals. The

Board's explanation of why a presumption of fitness is consistent with the goals of the Act is reasonable. See CKR--

Abandonment Exemption, slip op. at 4 ("A railroad presumably would not agree to negotiate with a prospective trail

sponsor unless the railroad believes the trail sponsor will be

able to manage the right-of-way and assume legal liability and

pay taxes. ... Pending an agreement with the proponent of

any interim trail, or the consummation of the abandonment,

the right-of-way remains the responsibility of the railroad.

Thus, the carrier is the most appropriate party to determine

whether any offer is likely to prove successful both in meeting

the railroad's desires and in fulfilling the statutory and regulatory liability requirements of the Trails Act. Requiring the

proponent of a trail ... to pass a fitness test whenever the

Board issues a trail condition could deter or delay interim

trail use, which would be contrary to Congress' intent to

facilitate and encourage rail banking and interim trail use

....") (citation omitted). In short, we believe the Board's

use of a rebuttable presumption in these circumstances is a

reasonable interpretation of the Trails Act, and, therefore, we

will not overturn it.15 See Chevron, 467 U.S. at 845.

Having found the Board's policy to be reasonable under the

statute, the next question is whether the Board's application

of that policy in this case was arbitrary and capricious. See 5

U.S.C. s 706(2)(A). Jost argues that he presented sufficient

information to rebut the presumption that the Conservancy

was capable of meeting its responsibilities as trail sponsor.

The information Jost presented was that three local governments had expressed their opposition to interim trail use, and

also that Kansas state law would impose substantial responsibilities on a trail sponsor, such as weed and litter control, and

the installation of signs and fencing.

The Board found that "there has been no specific showing

here that the trail sponsor has not met, or likely will not be

able to meet, its financial obligations regarding this trail."

CKR--Abandonment Exemption, slip op. at 5. The Board

__________

15 Similarly, we see nothing in the Trails Act that requires the

Board to license petitioners to engage in discovery of the financial

fitness of potential trail sponsors.

stated that "the Trails Act does not require a trail to be

'developed' in any particular way" and "there is no absolute

time limit for how quickly a trail must be developed to its

intended level of use." Id.

We see no basis for finding that this conclusion was arbitrary or capricious. Jost offered nothing but speculation that

the Conservancy would be unable to meet its responsibilities.

The Conservancy never indicated to the Board that it was

relying on local governments for funding, so it is not clear

why their opposition should raise any inference that the

Conservancy could not raise needed funds. In the absence of

any real evidence that the Conservancy was failing to meet,

or would fail to meet, its responsibilities, there is no reason to

believe that the presumption of financial fitness had been

rebutted. Accordingly, we will uphold the Board's decision

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not to examine the Conservancy's fitness to be a trail sponsor.

III. Conclusion

We conclude that the Board's decision not to reopen the

proceeding to examine Central Kansas Conservancy's fitness

to be a trail sponsor was not arbitrary and capricious. However, because we are unable to discern the basis for the

Board's decision that it was unnecessary to reopen the proceeding to consider Central Kansas Railway's right-of-way

sales, we remand this case to the Board for further proceedings consistent with this opinion.

So ordered.

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