Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-11-01480/USCOURTS-caDC-11-01480-0/pdf.json

Parties Involved:
James Riffin
Petitioner
Surface Transportation Board
Respondent
United States of America
Respondent

Document Text:

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 13, 2013 Decided October 25, 2013

No. 11-1480

JAMES RIFFIN,

PETITIONER

v.

SURFACE TRANSPORTATION BOARD 

AND UNITED STATES OF AMERICA,

RESPONDENTS

On Petition for Review of an Order 

of the Surface Transportation Board

James Riffin, pro se, argued the cause and filed the briefs

for petitioner.

Jeffrey D. Komarow, Attorney, Surface Transportation

Board, argued the cause for respondents. With him on the brief

were Robert B. Nicholson and Finnuala K. Tessier, Attorneys,

U.S. Department of Justice, Raymond A. Atkins, General

Counsel, Surface Transportation Board, and Craig M. Keats,

Deputy General Counsel. Theodore L. Hunt, Attorney, Surface

Transportation Board, entered an appearance.

Before: ROGERS, TATEL and GRIFFITH, Circuit Judges.

Opinion for the Court by Circuit Judge ROGERS.

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ROGERS, Circuit Judge: James Riffin petitions for review of

a decision by the Surface Transportation Board (“the Board”)

rejecting his application for a certificate authorizing the

acquisition and operation of a small length of industrial railroad

track because his application refused any obligation to transport

“toxic inhalation hazard” products. For the following reasons,

we deny the petition for review.

I.

On September 1, 2011, Riffin and Eric Strohmeyer filed a

joint application with the Board pursuant to 49 U.S.C. § 10901

to acquire and operate approximately 800 feet of

privately-owned railroad track located in New Jersey

(hereinafter “Riffin Application”). Section 10901 provides that

a person other than a rail carrier may “acquire a railroad line or

acquire or operate an extended or additional railroad line, only

if the Board issues a certificate authorizing such activity.” 49

U.S.C. § 10901(a)(4) (2006). The Board “shall issue” an

authorization certificate “unless the Board finds that such

activities are inconsistent with the public convenience and

necessity. Such certificate may approve the application as filed,

or with modifications, and may require compliance with

conditions . . . the Board finds necessary in the public interest.” 

Id. § 10901(c).

In the application, Riffin and Strohmeyer proposed to

interchange with the Consolidated Rail Corporation (“Conrail”)

at the western end of the track and provide rail service to

adjacent properties and transfer cargo to local shippers. They

“explicitly propose[d] to limit the goods to be shipped to

non-Toxic Inhalation Hazard [“TIH”] products.” Riffin

Application Part 3. They stated that “[t]his limitation on their

obligation to carry is warranted, since a common carrier is only

required to carry that which it is capable of carrying.” Id. Part

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5. They also stated that to carry TIH would result in insurance

premiums that would be too expensive and that their lessor had

requested they not carry TIH out of concern for its own

potential liability. Further, Riffin and Strohmeyer sought “a

temporary waiver of their obligation [under 49 C.F.R. Part

1150] to provide financial information, traffic projections, lease

agreement, details about potential shippers, and their

interchange agreement with Conrail,” stating they expected to

provide most of this information in two weeks. Id. Part 11.

The Board solicited comments on the Riffin Application. 

In comments filed on September 8, 2011, Conrail stated that,

notwithstanding the request for a temporary waiver of 49 C.F.R.

§ 1150.10(a), until Riffin and Strohmeyer submitted all of the

information required under the Board’s regulations, the

application was defective as a matter of law. On this basis,

Conrail requested that the Board either reject the application

without prejudice or hold it in abeyance until all the information

was provided.

On October 18, 2011, the Board rejected the Riffin

Application. Although agreeing with Conrail that Riffin and

Strohmeyer had not submitted a significant amount of required 

information, the Board stated that “their application must be

rejected because it contains an even more basic defect:

Strohmeyer and Riffin expressly condition their request . . . on

receiving a common carrier obligation that would be limited by

excluding any obligation to transport a shipment designated as

a toxic inhalation hazard (TIH).” Eric Strohmeyer, STB Docket

No. 35527, 2011 WL 5006471, at *1 (Oct. 18, 2011)

(hereinafter “Decision”). The Board observed it had explained

in two recent decisions that “railroads have not only a right but

a statutory common carrier obligation to transport hazardous

materials where the appropriate agencies have promulgated

comprehensive safety regulations.” Id. (internal quotation

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marks and alterations omitted). The Board noted that a number

of federal agencies, including the Department of Transportation,

Federal Railroad Administration, Transportation Security

Administration, and Nuclear Regulatory Commission, had

promulgated “extensive regulations governing the transportation

of hazardous materials by rail.” Id. The Board further observed

that because freight rail carriers have a statutory obligation to

transport hazardous materials “applications that seek to limit the

requested certificate of public convenience and necessity in

such a way as to exclude the transportation of TIH from the

applicant’s common carrier responsibilities are inherently

defective, and therefore incomplete.” Id. 

Strohmeyer, but not Riffin, filed a petition to reopen the

Decision on the asserted ground that an applicant seeking to

become a common carrier need not agree to carry hazardous

materials because common carriers had a common-law right to

designate the goods they were willing to carry for hire. On May

10, 2012, the Board denied the petition, rejecting Strohmeyer’s

attempt to distinguish an applicant seeking to become a

common carrier from existing carriers, as the Board saw no

basis for distinguishing new and existing carriers’ respective

obligations. The Board faulted the petition for “fail[ing] to

confront the reality that allowing new applicants to limit their

common carrier obligation in whatever ways they choose would

produce gaps in the existing rail system with regard to specific

traffic, thereby undermining Congress’ clear intent to establish

an integrated national network.” Eric Strohmeyer, STB Docket

No. 35527, 2012 WL 1686170, at *2, 2012 STB LEXIS 187, at

*7 (May 10, 2012) (hereinafter “Reopening Decision”). The

Board noted that Strohmeyer’s assertion that carriers

historically had the right at common law to decide what goods

they would carry was not relevant to a railroad’s statutory

obligations under 49 U.S.C. § 11101. See id. at *2 n.4.

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II.

Riffin petitions for review of the Decision on the ground

that under the common law common carriers could designate

which commodities they intended to transport and those which

they did not. The Board rejects this position on several grounds

but as a threshold matter contends that Riffin has forfeited this

argument by failing to raise it before the Board. We conclude

no forfeiture occurred here. On the merits, however, Riffin’s

argument is unpersuasive.

A.

As a “general rule,” the Supreme Court has “recognized in

more than a few decisions, and Congress has recognized in

more than a few statutes, that orderly procedure and good

administration require that objections to the proceedings of an

administrative agency be made while it has opportunity for

correction in order to raise issues reviewable by the courts.” 

United States v. L. A. Tucker Truck Lines, 344 U.S. 33, 36–37

(1952) (internal footnotes omitted). Accordingly, reviewing

courts generally will not consider an argument that was not

raised before the agency “at the time appropriate under its

practice.” Id. at 37. This court has previously declined to

consider arguments that were not timely raised before the

Board. See BNSF Ry. Co. v. STB, 604 F.3d 602, 610–11 (D.C.

Cir. 2010); BNSF Ry. Co. v. STB, 453 F.3d 473, 479 (D.C. Cir.

2006). 

The Board’s forfeiture claim rests on its position that Riffin

failed to raise his common-law arguments in the Riffin

Application itself, maintaining he had both an opportunity and

obligation to demonstrate that he could refuse to carry TIH

products. Riffin was, the Board claims, “on notice that his

proposed refusal to transport TIH products was contrary to

Board policy” in light of his frequent appearances before the

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Board and the prior Board and court decisions discussing

railroads’ statutory obligation to transport hazardous materials. 

Respt’s Br. 13–14. 

This court has held that a petitioner need not seek

administrative reconsideration from the Board in order to raise

an argument for which it lacked notice until the Board issued its

final decision. CSX Transp., Inc. v. STB, 584 F.3d 1076, 1079

(D.C. Cir. 2009). This is what happened here. The only other

party in the Board proceedings, Conrail, had objected to the

Riffin Application on the ground that it was incomplete, not that

it conflicted with Board policy regarding transportation of

hazardous materials. Rather, the Board sua sponte raised the

hazardous materials issue in its Decision without first providing

Riffin an opportunity to address the issue. Neither 49 U.S.C.

§ 10901 nor the Board’s regulations require an applicant for a

§ 10901 certification to include a memorandum of law in the

application. Cf. 49 C.F.R. § 1150.8 (2012). Even if Riffin

frequently appeared in proceedings, it is not entirely implausible

that the Board might view new entrants in Riffin’s situation

somewhat differently for purposes of carrying hazardous

material; its precedent did not specifically address the question. 

Under the circumstances, Riffin had no reason to think he had

to make his common-law arguments part of his application to

the Board. 

B. 

Riffin contends that there is no statutory common carrier

obligation to transport hazardous materials because Congress

did not enact legislation requiring common carriers to transport

all goods and, consequently, the common law remains in effect. 

Under common law, he claims, carriers could designate which

commodities they intended to transport. Riffin observes that the

Board’s predecessor, the Interstate Commerce Commission

(“the ICC”), historically ruled that it lacked jurisdiction to

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compel carriage pursuant to § 1(4) of the Interstate Commerce

Act, now 49 U.S.C. § 11101(a) (2006). 

Section 11101(a) provides that “[a] rail carrier providing

transportation or service subject to the jurisdiction of the Board

under this part [49 U.S.C. §§ 10101–11908] shall provide the

transportation or service on reasonable request.” Riffin does not

contest that the rail service he sought to provide is subject to

“this part.” The Board has exclusive regulatory authority over

transportation conducted over the interstate rail network. See id.

§ 10501(a). The question is whether § 11101(a), in conjunction

with the Board’s licensing authority under § 10901, authorizes

the Board to compel new carriers to transport TIH materials. 

The court reviews the Board’s interpretation of the statute it

administers under the familiar framework of Chevron U.S.A. Inc.

v. Natural Resources Defense Council, Inc., 467 U.S. 837

(1984). We hold that the Board’s interpretation of the freight

carriage obligations required under § 11101(a) is a permissible

interpretation of the statute. See Chevron, 467 U.S. at 842–43. 

As the Supreme Court recently confirmed in City of

Arlington, TX v. FCC, — U.S. —, 133 S.Ct. 1863, 1868 (2013),

an agency’s interpretation of a statutory ambiguity that concerns

the scope of its regulatory authority is entitled to deference

under Chevron. Because “every new application of a broad

statutory term can be re-framed as a[n] . . . extension of the

agency’s jurisdiction,” “the question in every case is, simply,

whether the statutory text forecloses the agency’s assertion of

authority, or not.” Id. at 1871. In United States v. Pennsylvania

Railroad Co., 323 U.S. 612, 615–19 (1945), the Supreme Court

upheld the ICC’s authority to compel railroads to interchange

their rail cars with water carriers despite the statute’s silence on

the subject. Rejecting the view “that the absence of specific

language indicates a purpose of Congress not to require” the

activities the ICC had ordered, id. at 616, the Court concluded

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that the Interstate Commerce Act “provide[s] sufficient

authorization for the Commission’s order.” Id. at 619. The

Court explained: 

The very complexities of [rail transportation] have

necessarily caused Congress to cast its regulatory

provisions in general terms. Congress has, in general,

left the contents of these terms to be spelled out in

particular cases by administrative and judicial action,

and in the light of the congressional purpose to foster

an efficient and fair national transportation system. 

Id. at 616. 

Similarly, the Supreme Court recognized that the ICC

retained its regulatory authority even when it had previously

declined to exercise jurisdiction over the issue in question. In

American Trucking Ass’ns v. Atchison, Topeka & Santa Fe

Railway Co., 387 U.S. 397 (1967), the Court held that the ICC

had authority to compel rail carriage even though its new rules

would have departed from its established policies. 

Acknowledging that for over 25 years the ICC had expressly not

required the service it now sought to compel, the Court observed

that “the Commission, faced with new developments or in light

of reconsideration of the relevant facts and its mandate, may

alter its past interpretation and overturn past administrative

rulings and practice.” Id. at 416. Regulatory agencies “are

neither required nor supposed to regulate the present and the

future within the inflexible limits of yesterday.” Id. 

Riffin declinesto engage with the effect ofthis precedent on

his position. Instead, he cites decisions that do not discuss the

statutory common carrier obligation under § 11101(a) and, the

Board notes, either were decided before enactment of the

National Transportation Act of 1920 giving the ICC licensing

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authority or, if post-1920 cases, do not deal with the Board’s

authority to require common carrier railroads to handle certain

commodities as part of their common carrier obligation. In

American Trucking, 387 U.S. at 406, the Supreme Court stated

that it is an “obvious fact that the Interstate Commerce Act

codified the common-law obligations of railroads as common

carriers,” and that it does so “in the most general terms.” See

also Dir. Gen. of R.R.s v. Viscose Co., 254 U.S. 498, 504 (1921). 

Tracing the history of railroad regulation and § 1(4) of the Act,

the Court noted that under that section (the predecessor to 49

U.S.C. § 11101(a)) the “obligation as common carriers is

comprehensive and exceptions are not to be implied.” Am.

Trucking Ass’ns, 387 U.S. at 407. 

This court engaged in a similar historical analysis in Cellco

Partnership v. FCC, 700 F.3d 534, 545–47 (D.C. Cir. 2012),

observing that, “[o]ver the decades, these common law duties [of

common carriers] were codified in a variety of statutory

regimes,” including the Interstate Commerce Act, and that given

“the evolving meaning of common carriage . . . in the midst of

changing technology and the evolving regulatory landscape,” the

relevant administrative agencies have “significant latitude to

determine the bounds of common carriage in particular cases.” 

Addressing a similar common carriage provision for airlines, the

court explained in Delta Air Lines, Inc. v. CAB, 543 F.2d 247,

259 (D.C. Cir. 1976), that “[t]he extent to which the airline

carriers of today have a right to delineate what they will carry

and for whom depends not only upon their common law

responsibilities as common carriers, but also upon the statutory

obligations and regulatory powers created by the Federal

Aviation Act.” 

More directly, the Sixth Circuit concluded in Akron, Canton

& Youngstown Railroad Co. v. ICC, 611 F.2d 1162, 1166 (6th

Cir. 1979), that although the Interstate Commerce Act “codified

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the common-law obligations of railroads as common carriers,

this does not mean that the Act created no purely statutory

obligations of rail carriers” (internal citation omitted). While

recognizing that “at common law carriers could pick and choose

the goods which they would transport in common carriage,” the

court observed that “even at common law, railroad companies,

‘whose property and facilities are affected with a public interest,

[were] ordinarily held to be common carriers of goods delivered

to them for transportation.’” Id. (quoting 12 C.J.S. Carriers § 6). 

The court further observed that the ICC “has primary

jurisdiction to execute the National Transportation Policy’s

mandate . . . [under] 49 U.S.C. § 10101,” and that “[i]f the

Congressional delegation to the Commission of power to

implement the National Transportation Policy is to be effective,

the Commission must have the statutory authority exercised by

its order . . . [stating its] preference of rail over truck carriage of

spent fuel.” Id. at 1168.

Riffin’s efforts to demonstrate that § 11101 must be read to

support the view that a new common carrier may decline to

provide transportation of certain commodities are to no avail. 

He urges that § 11101 by its plain text speaks only to a carrier

already “providing [certain] transportation or service” that must

provide “the transportation or service” upon reasonable request. 

49 U.S.C. § 11101(a) (emphasis added). So, he suggests, if a

new carrier opts not to provide transportation for a particular

commodity, then it need not do so in the future, even on

reasonable request. Riffin compares different text in the

predecessor provision (former 49 U.S.C. § 1(4)) and points to

general policy statements made by Congress elsewhere in the

ICC Termination Act of 1995, 49 U.S.C. § 10101(1)–(8).

In rejecting the Riffin Application, the Board relied

principally on two decisions where it had stated that freight

“[r]ailroads have not only a right but a statutory common carrier

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obligation to transport hazardous materials ‘where the

appropriate agencies have promulgated comprehensive safety

regulations.’” Decision at *1 (citing BNSF Ry., FD 35164, slip

op. at 6 (STB served Dec. 2, 2010) (quoting Union Pac. R.R.,

FD 35219, slip op. at 3–4 (STB served June 11, 2009))). In

Union Pacific, the Board issued a declaratory order upon

determining that a railroad had a statutory common carrier

obligation to transport chlorine, a TIH, through urban areas

despite alternative sources of chlorine closer to the requested

destinations. See Union Pac. R.R., FD 35219, slip op. at 1. 

Stating that railroads have a statutory common carrier obligation

under 49 U.S.C. § 11101(a) to provide transportation or service

“upon reasonable request,” id. at 3, the Board observed that

“[w]hat constitutes a reasonable request for service is not

statutorily defined but depends on all the relevant facts and

circumstances.” Id. at 3–4. It also observed that “Court and

Board precedent have addressed the extent of the common

carrier obligation with regard to transporting hazardous

materials” and that “the common carrier obligation requires a

railroad to transport hazardous materials where the appropriate

agencies have promulgated comprehensive safety regulations.” 

Id. at 4. At that time the Department of Transportation and

Transportation Security Administration had comprehensive

regulatory programs addressing the safety and security risks of

transporting hazardous materials by rail. The Board concluded

that allowing a railroad to avoid its obligation to transport

hazardous materials nonetheless would require it improperly to

substitute its judgment about safety for that of the regulatory

agencies. Id. at 5–6. In BNSF, FD 35164, slip op. at 6, the

Board applied that view of common carrier obligations, ruling

that BNSF’s transportation of hazardous materials did not pose

an impermissible safety threat to area residents because the

petitioner offered no evidence that BNSF had violated any

applicable safety regulations. 

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The rule established by BNSF and Union Pacific represents

at least a permissible interpretation of the statutory requirement

that a “rail carrier providing transportation or service subject to

the jurisdiction of the Board . . . shall provide the transportation

or service on reasonable request.” 49 U.S.C. § 11101. Where

an agency has promulgated comprehensive safety regulations for

a particular type of cargo (helping to ensure the safety of

shipments of that category of freight), those regulations can be

viewed as transforming a shipping request into a presumptively

reasonable one under § 11101. Although the Board had no

occasion to address a distinction between new and existing

carriers in BNSF and Union Pacific, the rule from those cases

embraces new and existing carriers. In denying Strohmeyer’s

petition to reopen the Decision, the Board explained that a

distinction between new and existing carriers who transport TIH

products would prove unworkable because it could produce gaps

in the national rail network. Reopening Decision at *2. 

Riffin’s response, that approving his application would not

create any such “gap” because he sought to operate only a small

length of track at the tail end of an existing rail, misses the point. 

The “gaps” of concern to the Board are those that would arise

from permitting new carriers to define the scope of their own

common carrier obligations, not the 800-foot “gap” that would

result from Riffin’s opt-out in particular. The Riffin Application

sought a blanket exemption that would shield Riffin and

Strohmeyer from the obligation to entertain requests to carry

TIH. Much as the Sixth Circuit observed in Akron, 611 F.2d at

1168, the Board’s stated interest, given the complexity and

interdependence of the national rail system, in ensuring the

freight rail network remains open to transportation of hazardous

materials without any gaps implements a public interest in

consistency and provides a reasonable basis for treating new and

existing carriers alike. Riffin’s argument, that “[i]mposing more

limited obligations on new carriers promotes an efficient rail

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transportation system and promotes the continuation of a sound

rail transportation system and facilitates entry into the industry,”

Reply Br. 25 (internal quotation marks, ellipses, and citations

omitted), was not presented in his opening brief, which means

it “ordinarily comes too late for our consideration,” Students

Against Genocide v. Dep’t of State, 257 F.3d 828, 835 (D.C. Cir.

2001); in any event, it is the Board, not this court, that makes

such policy judgments. 

 The Board’s reasoning for rejecting the distinction between

existing and new common carrier obligations was neither

arbitrary nor capricious nor contrary to law. See Vill. of

Barrington, Ill. v. STB, 636 F.3d 650, 670 (D.C. Cir. 2011). 

Likewise the Board’s response to Riffin’s statement about costprohibitive insurance premiums. The Board explained that

“[a]pplicants for common carrier authority . . . cannot lawfully

make fulfilling their statutory obligations contingent upon

whether they think it is ‘worth it’ to do so”; “a carrier must

adhere to its statutory obligations even if it suffers hardship in

so doing.” Decision at *2 (quoting Pejepscot Indus. Park, Inc.,

6 S.T.B. 886, 898 (2003) (citing Decatur Cnty. Comm’rs v. STB,

308 F.3d 710, 715 (7th Cir. 2002)), reconsideration granted in

part, 7 S.T.B. 220 (2003)) (internal quotation marks omitted). 

Rather, “[t]he only appropriate mechanisms a railroad may

employ to excuse itself, either permanently or temporarily, from

its common carrier obligations on a line of railroad are

abandonment, discontinuance, or embargo.” Id. In Pejepscot,

the Board instructed that if a line of rail track has not been

abandoned or embargoed, there is “an absolute duty to provide

rates and service over the [l]ine upon reasonable request,” and

a “failure to perform that duty [is] a violation of section 11101.” 

6 S.T.B. at 899. The Board’s position reflects the public interest

in ensuring the network remains open for transport of hazardous

materials where comprehensive security and safety regulations

are present.

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Accordingly, because the Board has permissibly 

determined the scope of a freight railroad’s common carrier

obligation under 49 U.S.C. § 11101(a), and the Board’s rejection

of Riffin’s application was reasonable, we deny the petition for

review.

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