## In the



# U n ited S ta tes Co urt o f Ap p ea ls

F o rth eS e v e n th C ir cu it
N o. 09

- 3945 H E RZ OG T RAN SITS ERVICES, I NCO RPORATE D , et a l., P etitio ners , v . U NIT ED S TATE SR AI LROAD R ET I R EME NTB O ARD , Res pond e nt
.

Pe tition fo r Review o f anOrd er o f the Railro ad Retire mentBo ard

No . 09- 53
A RGUED M AY 26, 2010

— D ECI DE D O CT OB ER 22, 2010

Befo re R IPPLE, K ANN E a nd S YKES, C ircu it Judges . R IPPLE, Cir cu i tJudg e . Herzo g Tr ansi t S er vi ces ( “ H er zog ”) op er at es , un d er co n tr ac t w ith D alla s A re a R a p id T ra n sit ( “DART”) an d F o r t W o r th Tr an spo r ta ti o n Auth o r i ty( “the T”), a com m uterr ai lse rv i ce o n a l i ne co nnecti ng Dal l as an d For t W or th , Te x as . H er zo g d isp at c h es al l t r a intra ffic al o ngth i s l i n e , i n c l u d i n gi n t e r s t a t e fr e i g h tt r a i n s . The2 N o. 09

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4 5 U. S
. C. § § 2 3 1

- 2 3 1 v. 1 45 U.S. C. §§ 351- 69. 2 Rai l ro ad Reti re m ent Boa rd ( “R RB ” o r“ Bo a r d” ) de ter m i ned tha tHe r z o gi s a c o v e r e d e mpl o y e ru nd e rthe R a i l ro ad Reti re m ent Act ( “RRA ”) and the Rai l ro ad U nem plo y- 1 m ent Insurance A ct ( w hi ch w e s hal lso m eti m es re ferto 2 col l ecti vel y a s “ the Acts”) , but onl y with re spect to these dispat chi ng operat i ons. H er zog, DA RT and the T peti ti on f orr evi ew o fthi s dete rm i nati on. Fo r the r eas ons set f o r th i n th i s o p i n i o n, we d e n y th e p e t i t i o n f o rr e v i e w.

I B AC KGR OUND 1. H er zog i s a co ntra ct o perat oro fco m m uterr ai l ro ads. I n 199 4, th e R R B deter m i ned that H er zogwas not a co ver ed em plo yerunder the A cts. A t th at t im e, H er zog o pe r a t e d c o mm ut e rr a i ls e r v i c e s i n the Mi a mi , F l o r i da ar ea f orthe Tri

- County Com m uterRai lOrga n iza ti on ( now kno w n as So uth Flo ri da Regi onalTra nsport ati on A uthor i ty, o r SF RTA )
. S i nce then, H er zoghas engag ed i n si x new oper ati ons i n fi ve othe r sta tes : N or th Carol i na, N ew J er sey, N ew M exi co, Cal i f or ni a a nd Texas. This peti ti on co ncer ns o nl y the o perat i on in Texas. DA RT and the T j oi ntl y o w n a l i ne o ftr ain t ra c k b etwe enDa l l as a nd F o r th W o r th, Te xa s. On thi s l i ne , DART an d the T pr o vi de co m m ut errail ser vi ce , kno wn as theN o. 09

- 3945 3 Tri ni ty Rai l w ay Ex press (“T rini ty” o r “TRE ”)
. These com m utertr ai ns have bee n oper ate d by Herzo g s i nce 19 96
. F o uri nt er st at e freightc ar r i er s al so o per at e o n the line . Th e U nion Pac ific Railr oad Com p an y a n d the B N SF R ail w ay C om p an y, intersta te frei gh t carriers, use th e e nt ire l i ne . The Da l l as , Ga r l an d & N o r th ea st ern Ra i l r o ad an d the F o r t W o r th & W es te r n Ra i l r o ad, al so i nt er state f r ei g ht car ri er s, use onl y par t o fthe l i ne. Since 20 01, H er zoghas perf or m ed dis patchi ng functi ons f oral ltr ai n tr affic on the l i ne. The o perat i ng ag re em en ts am o ngthe par ti ci pat i ngl i ne s ( DA RT, the T an d the fr ei g htc ar r i er s) r equi r e H er zo gt o g i ve pr i o r i tyt o the Tr i ni tytr ains , b uta l so r equi r e i t to a l l o w the fr ei g ht car ri er s t o use the l i ne.

2. I n N ove m ber20 03, Ri chard C. Beal l, an e m plo ye e of H erzog, w rote to the R R B and asked the B oa rd to det erm i ne tha t H er zo gwas a c o ve r ed empl o y erunde rthe Act s . In F e b r u a r y 2 0 0 6 , th e B o a r d o r d e r e d th a ta h e a r i ng be he l d on wh ether ther e has “bee n a change i n the o peratio n s o f H er zo g T ra n sitSer v i c es , In c ., w h ich w ou ld affect i ts sta tus a s a n em plo yerunder the R ailr oad Retir em en t a n d R ailr oa d U n em p loy m en t In su ra n c e A c ts .” A. R. 1 25 6. A he ar i ngwas h eld on M ay1 6, 2 00 6. The H ear i ng E xam i ner i ssued a re port, and the Board r endered a d ec isio n . Th e B oa rd affi r m e d an d ad op te d th at d ec isio n upon re consi derat i on. W e s hal ldi scuss i n de ta il on ly th e p ar t o f th e B oa rd ’s d ec isio n p er tin en t t o th is4 N o. 09

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I n a ddit i on t o the por t i on ofthe dec i s i on c onc er ni ng 3 H erz og ’ s d i sp a t c hin g activ ities in T exa s, the B oa rd also h eld tha t, in all otherres pects , H erzog w as not a c overed em ployer u nd er th e A cts. T he B oa rd rejected the a rg u m en t, no t ren ew ed on ap p eal, 4 tha t it s ho u ld ha v e focu sed on w he th e r the in d iv id u al d ispatchers i n quest ion were s tatutory em ployees ofa rail ro ad u n d er 45 U .S.C . § 2 3 1 (b )(1) a n d (d )(1). 20 C .F.R
. § 20 2.3(a) pro v id es in p art: 5 W ith resp ect to a ny com p an y or p erso n p rinc ip ally en gage d i n bus i ne s s oth erthanc ar ri erbus i ne s s , but (co n tin u ed ...) p etition, na m ely, the B o ard ’s discu ssion of H erzog’s dispat chi ng ac ti vi ti es i n Texas. 3 T h e B oa rd fram ed th e is su e a s w h e t h er H er zo g, a cont ra c tor, was a c ove re d em plo yerunder the A cts. 4 Foc usi ng o n the nature o fthe ac ti vi ty conducted by H er zog, the Board e m phasi zed that“di spatchi ng i s a s in ex tr ica b le a p ar t o ft h e a c tu al m ot ion of tr ain s a s is th e o per at i o n o fa t r ain’ s l o co m o ti ve c o nt r o l s bythe engi neer . ” A.R. 7. Dis patch er s, sai d the Boar d, dir ect and contr olthe m ove m ent o ftr ai ns; no tr ai n can m ove w i thout an o rderfro m the dispat cher

. There f or e, w here “the tr ai n dis patchi ng incl ud es tr ai ns thato perat e i nter sta te, the enti ty dispat chin g t ra i ns o perat es as a ra il ca r r ier ” u n d er th e A c ts
. Id. Be cau se H erzog’s pr i nc i pa lb us i ne s s i s i nt r a s t a t e p a s s e ng e rs e r vi ce, how ever, t he Boar d fo und o nl y i ts dispat chi ng uni t t o be a covered em p loyer. 5N o. 09

- 3945 5

(
. . . c on t i nu e d) 5 w hich, i n add it ion t o suc h princi pal busines s, engages i n s om e c a r r i e r bu s i ne s s , the Bo a r d wi l l r e q ui r e s ub

m i s s i on ofi nf or m at i on per t ai ni ng t o the hi s t or y an d all oper ati ons ofs uch com pany or pers on w ith a view to d eterm i ning whe the r s om e i dentifiable an d sep ara b le en terp rise con d u cted b y t h e p erso n o r com p an y is to be consi dered to be the em ployer. 49 C .F.R
. § 24 1.5 p ro v id es tha t “d ispa tch” m ean s in p art: 6 (1) T o p erform a fun ction tha t w o u l d b e classifi ed as a du ty of a “d is patching s ervic e em ployee, ” as thatte rm i s de fi ne d b y the h ou r s ofs e r vi c e l a ws a t4 9 U. S
. C. 21 10 1( 2) , i fthe func t i on were t o be pe rf or m ed i n the Uni t ed S t at es . Fore xa m pl e, to dispa t ch m e a ns, by the use ofan el ect ri cal or m echani cal dev ic e

— ( i ) To co nt ro l the m ove m en tofa t ra i n o r othe r ontr ack equipm en t b y the i ss uance ofa writt en or verbal author i t y orpe rm i s s ion affec t i ng a r ai l ro ad ope ra t i on, or by est ablis hing a route thr oug h the use of a rai lr oad s i gna l or t ra i n c ont ro l s ys t em butnot m er el y by a l i gni ng o r re al i gni ng a s wit c h; or ( ii ) To control the occupancy of a track by a roadw ay w o rk er o r st a tio n a ry o n -tr a ck eq u ip m en t, o r b o th

. . . . (ita lic s in o ri g in a l). I n supp or t o fthi s co ncl usi on, the B oa rd i denti fi ed fi ve consi derat i ons. Fi rs t, the Board note d that the Fed er al Ra i l r o ad Ad m inist r at i o n ( “F RA”) ha s i ss ue d r egul at i o ns hi ghl i ghti ng the co ntro lo fdisp at cher s o vertr ai n m ove m ent. S eco nd , the B oard note d that a co m m on ca rr i er

6 i s th e in su re r ofthe goo ds i t ca rr i es. Thi rd, bec ause dis-6 N o. 09

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SeeEm pl oye r Sta t us Det er m i nat i on

— R ai l Temps, Inc. , B.C. D
. 03- 7 3 8 (ser v ed M a y 6, 2 0 0 3 ); Em pl oye r Sta t us Det er m i nat i on

—M ass. Bay C om m u ter R
. R
. C o. , B.C. D
. 03- 23 ( se rved M ar. 3, 2 0 0 3 ); Em pl oye r Sta tus Det er m i nat i on

— S . C al. R eg ’lR . A u th ., S eg r eg a t i o n o

f D isp a tc h in gD ep ’t, B.C. D
. 02- 12 ( se rved Feb. 12, 2 0 0 2 ). patchi ng i s a n i nd i spensabl e co m pon ent o fcar ri er service an d m us t b e d eli vered w ith su ch service, H erzog’s po si ti o n was a na l o g o us t o tho se o fc ont racto r s an d othe r enti ti es p re vi ousl y found by the Boar d to be co ve r ed em p lo y er s. The se pr ev i o us de te r m i na ti o ns i n- 7 cl ude d a c o m m ut era utho r i tytha t p ro vi ded di spa tc hi ng ser vi ces f ori nter sta te fre i ght tra i ns o perat i ng o n i ts l i ne . F o ur th, the Bo ar d no te d tha t, i fTr i ni ty( DA RT a nd th e T) p erform ed t h e interstat e frei gh t service itself, i t would be a cove red em plo yer ; Trini ty coul d not re m ove an e sse n tia las pect o fcar ri ero perat i on fro m cove ra ge by re m ov ing i t fro m the cove re d i nter sta te fre i ght c ar ri er s. In thi s co ntext, the Board r efer re d to i ts deci si o n in Em pl oye rSt at us D e t e r m i nat i on

— Rail r oad Ven

tures, Inc. , B .C .D . 00-4 7 (s e r v e d N ov . 7, 200 0). Rail r oad V entu res se t f o r th a te st to det er m i ne when a rail l i ne ow ne r that co nt racts out rail road activiti es ne verthel ess r em ai ns a cove re d em plo yer . Th e B oa rd st ate d that und erthi s t est, Trini ty ( DA RT and the T) w oul d not have b een a co ver ed em plo yerwh en the i nter sta te fre igh t t ra in s p er for m ed th eir o w n d isp at c h in g. O n c e it “t o o kb ac k ” co nt r o lo ve rdi spa tc hi ngoper at i o ns a nd ass i gned them to H er zog, h ow eve r, H er zogbec am e a n em plo yer as l ess ee of the dispat chi ng oper ati ons. A
. R. 41

-N o. 09

- 3945 7

B e c a u se H e r z o g i s th e p a r t y d i r e c t l y a g g r i e v e d b y th e B o a r d ’s 8 dec i s i on, the ar gum en t s we s hal l addr es s pe rt ai n to the s t atus ofHer zog . The re f or e, f or c l ar i t y, we s hal l re fer t o the j oi nt p et iti o n er s a s “ H er z o g .” 42 . Fifth, th e B oa rd em p h as iz e d t h at its d ec isio n w ou ld not neces sa ri l y hav e a dvers e co nsequences on o ther si m i l ar l y s i tu at ed enti ti es because the Board co nsi ders, i n eac h case , the parti cul arf acts befor e i t. T h e M an a g em en t M em b er d iss en te d , bu t w ro te on ly th at he disagree d w ith “th e p ortion of th e m aj ority’ s deci si on that a ffi rm s the Boa rd ’ s ini ti aldeter m i nati on fi nd i ng di spatcher s work i ng f orH er zogTra nsi t S er vi ces to b e co ve r ed unde rthe Ra i l r o ad Re tirem entActa nd th e R a i l r o a d Un e mpl o y me n t[ I ] n s u r a n c e Ac t
. ” A. R
. 9 A. He r z o g, D AR T a n d th e T n o w p e t i t i o n f o rr e v i e w. 8

II A N A L Y S IS W e begin, as w e m us t, w ith th e gove rning statu tory schem e. W e fi rs t s hal ldescr ibe i t g en er al l y. W e then sh all tu rn to a m or e p re c ise d isc u ss ion of th e p ro visi ons m ostdi re ctl y r el evantto o ur a nal ysi s.

A. 1. Inth e e ar l y p ar t o f th e t w en tie th ce n tu ry , pr iva te railro ads adm i ni ste re d p en sio n pla ns. These pla ns pro vi ded8 N o. 09

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The s t atut e was r evi s ed s i gni fi c ant l y i n 1 974, al thoughthe 9 cov era g e p ro v ision at i ssue in this case w as no t su b stan tiv ely a l t e r e d. sm al lbene fi ts and had str i ct elig ibi l i ty re quir em ents. As a r e s u l t, th e y p r o v i d e d l i t t l e i n c e n t i v e f o ro l d e re mpl o y ee s to r etire, the r eb y k ee pi ngy o ung erwor k er s o ut ofthe i nd ustr y. But the ol der w or kers w er e di ssa ti sfi ed as we l l ; a s o n e f o r me r As s o c i a t e Ge n e r a l C o u n s e l to t he RRB has p ut i t, “[ t] he o l der m en co m pla i ned because these pensi on pl ans were l i ke an um bre l l a th at di d not open wh eneve r i t r ai ned, o ffer ed l i ttl e pr ote cti on w hen i t di d o pen, a nd hardly anywhenthe he av y r ains cam e. ” Davi d B. Sch re iber, The Legi sl ati ve H i sto ryo f th e Ra i l r o ad Re ti r ementa nd Ra i l r o ad Unem pl o y m en t I ns ura nc e System s 2 (1978) ( he reinafter Sch reiber). T he Ra ilroa d Ret irem en t A ct w as d irected tow ard re m edyi ng thi s s i tuati on. The fi rs t v er si on o fthe A ct was en ac te d in 1 93 4 an d s tr u c k d ow nby th e Su p re m e C ou rt . A new A ct was pas sed i n 193 5 a nd pro m ptl y c hal l enged i n c o u r t
. A d i s t r i c tc o u r te nj o i n e d th e B o a r d fr o m c o mpel l i ng the r ai l ro ads to pro vi de i nfo rm ati on nee ded to admi ni st erthe Act ; ho wev er, the c o ur t di d no t pr ev en t th e Bo ar d fr o m a dj udi ca tinga nnui ti es a nd mak i ng aw ar ds i fi t had the nece ssa ryinf or m ati on. Schreiberat 16- 17. W hi l e the li ti gat i on w as pend i ng on appeal, a thi rd A ct, w hi ch r epres ented a nego ti ate d c om prom i se between m anage m ent a nd l aborthatbo th si d es supp or ted, was en ac te d in 1 93 7. See S. Rep. N o. 697, at 2 ( 1937 ). T h e 1 937 9 A ct was styl ed as an am endm ent to the 1 935 A ct, but i t wasN o. 09

- 3945 9

Tho se w ith few er than ten year s ofs ervic e ( or five years 10 a c c r u i n g a ft e r 1 9 9 5 ) a r e c o v e r e d b y th e S o c i a l S e c u r i t y s y s t e m. 20 C. F. R
. § 404. 1401. es se n tia lly a re w rit in g. See50 S tat
. 30 7 ( 193 7). T h e Act e s t ab l i s h e s a n n u i t y b e n e fi t s f o r r e t i r e d wo r k e r s i n t he r ai l r o ad i ndus try. F ul la nnui ti es a r e av ai l ab l e i n the curr ent v er si on o fthe A ct t o thos e w h o h av e co m ple ted ten ye ar s o fse rv i ce t o one orm or e e m plo yer s ( orfi ve yea rs acc rui ng after19 95) and re ach the r eti re m ent a ge provi ded bythe So ci alS ecu rit y Act, as wellas to tho se w ho have r eac h ed the age o fsi xty a nd co m ple ted thi rty y ea r s ofs er vi ce . 4 5 U. S
. C. § 2 31 a( a) ( 1) ( i ) , ( i i )
. The 10 am ounts ofthes e a nnuit ies ar e ca l cul ate d pu rs uant to 45 U .S. C. § 2 31b. Reduced annu i ti es ar e a vai l abl e t o thos e w ho have r each ed t h e a ge of62 and com ple ted atl eas t ten ( orfi ve, al lacc rui ng after19 95 ) bu t few erthan th irt y y e a rs of se rv ice
. Id. § 231a ( a) ( 1) ( i i i )
. A dd i ti onal l y, c er ta ind isa b led ind ivid u als are en tit led to an n u itie s. Id. § 2 31a( a) ( 1) ( i v) , ( v)
. The statute als o provi des fo r annuit i es to sp ou se s, as w ell as su p p lem en t a l an n u itie s t o c er ta in em p loy ee s. Id. § 231a ( b) , ( c)
. W hen an a nnuityhas becom e d ue bu t h a s not be en pa id p riorto the ind ivi d ua l’ s death, i t i s payabl e t o a s urvi vi ng s p ouse, wh o w as li ving w ith th e ind ivi d ua l at t h e t im e of th e ind ivi d ua l’ s d ea th

. Id. § 23 1e (a)( 1). Inligh t o f th es e b en e f i t s , i t is unsurpri sin g that the S uprem e Cour t has obser ved that “[ t] he Rai l ro ad Reti re m ent Act i s s ubstanti al l y a S oci al Se curi ty A ct for e m p loy ees o fco m m on ca rr i er s. ” Eiche l v. Ne w York Cen t
. R. R. Co. , 3 75 U
. S. 25 3, 25 4 ( 1963 ) ( per cu riam ) (qu otation m arks an d citation om itted ).10 N o. 09

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The c o v e r a g e p r o v i s i o n s o fth e Ra i l wa y L a b o r Ac td i d not 11 m ater ially d iffer fro m tho se of the R ailro ad R etirem en t A ct. C om pare 48 St a t. 1 1 8 5 (Ju n e 2 1 , 19 3 4 ), w ith 48 St at. 1283 (J une 27, 1 9 3 4 ). T he Ret irem en t A ct is j us t one com p one nt of th e overallstatu tory sch em e. T he Railroad U ne m p loym en t I ns ura n c e A c t, e n a c t e d i n 1 9 3 8 , e s t ab l i s h e s a s y s t e m o fu n e mplo ym ent insurance f orthi s s am e g ro up o fem plo ye es. Che ney R. R. Co. v. R. R. Re t
. Bd. , 5 0 F
. 3 d 1 0 7 1 , 1 0 74 ( D. C. Cir
. 19 95)
. Em plo ye rs and em plo yee s s ubj ect to the Acts m ust pay a payr ol lta x akin to the soc i alse c u ri ty tax re quir e d o fo the re mpl o y e r s a nd e mpl o y e e s . T he s e t a xe s, estab li sh ed by the Railroad R etirem en t T a x A ct, are h igh er th an th e s oc ial s e c u rit y t ax . SeeStandard O ff ice B ldg . Co rp. v. U nited Sta tes , 819 F.2d 137 1, 1373 ( 7th Cir. 1987 ). The Reti re m ent Act ai m ed to prot ect the nati on’ s r ai l ro ad em p l o y e e s . See4 8 S t a t
. 1 2 8 3 ( 1 9 3 4 ) ( “ AN ACT T o p r o v i de a r e t i r e me n ts y s t e m fo rr a i l r o a d e mp l o y e e s , t o p r o v i de un e mpl o y men tr e l i e f, a nd f o ro the rp ur po s es. ” ) ; H. R e p. 1988 , at 1 ( 1934 ) ( “The bi l lpro poses to es tabl i sh a ra i l ro ad r et i r ementpe ns i o n s y st em f o ra l lc ar r i er s su bj ec t to the R ail w ay L abor A ct an d a llem p loyees of su ch carriers. ”). 11 I n or der t o preve nt r ai l ro ads fro m avo i ding the Ac t by cre ati ve cor pora te str u cturing, the A ct fro m i ts i ncepti on h a s c o ve re d “a n y c om p an y w h ich is d ire c tly or in d ire c tly o wned or con tr o l l ed by, o runde rc o m m o n c o nt r o lwi th, o ne o rmo r e empl o y e r s . . . a nd wh i c h o pe r a t e s a nye qu i pmen to rf a c i l i t y o rp e r f o r ms a nys e r v i c e . . . i n c o nnecti onN o. 09

- 3945 11

For com pl et en es s , we no t e thatthe an al ogous pr ovi s i on of 12 the R ail road U nem ploym ent Ins urance Act c overs “a rai lr oad subjec t to the j uris dicti on of the Surf ace Transporta- (co n tin u ed ...) w i th the tr anspor tat i on ofpasse nger s o r proper ty by ra ilroa d .” 45 U .S.C . § 23 1(a )(1) (ii); see also 48 S tat
. 12 83 ( 1934 )
. I fnotf orthi s pro vi si on, r ai l ro ads co uld r em ove mos to f the i r wo r k e r s fr o m the Act s i mpl y b y s e t t i ng up a w h olly ow n ed su b sid iar y. S e eDe s pa t c h S ho ps, In c . v . R. R. Ret
. Bd. , 154 F.2d 417, 419 (2d Cir. 1946). I n i ts curr ent for m , the Reti re m ent Act d efi nes a co ver ed em plo yeri n fi ve w ays . In thi s ca se, the Board rel i ed on 4 5 U .S.C . § 23 1(a )(1) (i), w h ich h as be en a p ar t o f th e A c t, in sim il ar for m , since 1 9 3 4 . I t prov ides that “em p loyer” s ha l li nc l ud e ( i ) any car ri erby rai l ro ad subj ect to the j uri sdic ti on ofthe Sur f ace Transpor tat i on Boar d und er p ar t A of s u b tit le IV of T itle 49
. . . . 45 U
. S. C
. § 231(a)( 1)(i ). T h e p ar tie s a ss u m e t h at “e m p loy er ” is d efin ed in id en tic al fa sh ion i n t h e U n em p loy m en t In su ra n c e A c t. SeePet’r Br. 8 n. 11 ( “subst anti vel y i denti cal ”) ; Resp’ t B r. 3 ( “substa nti al l y s i m i l ar ”)
. Otherco u rt s have so note d oras su m ed

. Se eA m . O r i e ntE xpre s s R y. C o. v. Sur f ac eTr ans p. Bd. , 484 F.3d 554, 556 (D
. C
. Cir. 2007) (i m p lic it ly assu m ing); Che ney R. R. Co. , 5 0 F
. 3d at 1074 (exp li citly not ing); Atl. La nd & Im pro vem ent C o . v. U nited Sta tes , 79 0 F
. 2d 8 53, 85 5- 56 (11 th C ir. 19 86 ) (ex p licit ly n ot in g t h e “ vir tu ally id en tical ” l anguage )
. W e a gr ee. 1212 N o. 09

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(
. . . c on t i nu e d) 12 t i o n B o a r d u n d e r p a r t A o f s u b t i t l e I V o f t i t l e 4 9
. ” 4 5 U. S
. C. § 35 1 (b ). The T ax Act is adm ini st ered by the Int ernal Rev enue Servic e. 13 Inte rs t at e Q ual i ty S ervs . , Inc. v. R
. R
. R et
. Bd. , 83 F. 3d 1463, 1464 (D .C . C ir . 19 9 6 ). As we d id in our dec i s i on i n Li vi ngst on R ebui l d C ent er, Inc. v. 14 R ai l road R et i rem ent B oard , 97 0 F .2 d 2 9 5 , 29 9 (7t h C ir . 19 9 2 ), (co n tin u ed ...) The Reti re m ent Act and the U nem plo ym ent Insurance Acta r e a dmi ni s t e r e d b y the R a i l r o a d R e t i r e men tBo a rd

. 13 The Bo a r d i s a n i nd e pe nd e nte xe c ut i v e a g e nc y wi th thr e e me mbe r s , a l la pp o i nt e d b y the P r e s i de nt
. 4 5 U. S
. C. § 2 31f ( a)
. The Board a d j ud i cate s cl ai m s forbene fi ts u n d er th e A c t. R. R. R e t
. B d. v. D uq ue s neWare hous eCo. , 32 6 U .S. 44 6, 44 7 (1 94 6 ) ; see also 45 U
. S. C
. § 231f(b). Th e B oard al so deter m i nes the st atus, as co ver ed ornon- cove re d, of parti cul arem plo yer s a nd em plo yee s. 20 C
. F. R. § 259. 1. I ts deci si ons, i ftheydeter m i ne “the r i ghts orl iab i l i ti es ofany perso n, ” m ay be a pp eal ed to the Co urts o f A p p ea ls for th e Se ve n th C irc u it, th e D ist ric t o f C olu m b ia C irc u it, or t o th e C ou rtof A p p ea ls in w h ich th e p et iti onerr esi des, “o r w i l lhave had his pr i nci pal pl ace of busi ness o r pri nci pal exec uti ve offi ce. ” 4 5 U.S
. C. § 2 31g ; 45 U
. S. C
. § 355(f)

.
B. W i th thi s ba ckg ro und , we turn no w to an e xam i nati on ofthe provi si ons m ostper ti nent t o the c ase befor e us. 14N o. 09

- 3945 13

(
. . . c on t i nu e d) 14 w e pret erm ita deter m ination ofw hetherw e ow e the deter

m inat ion ofthe Board a parti cular degree ofdef erenc e. 1 0 9 St a t. 8 0 3 (19 9 5 ). 15 A s we note d ear l i er, the parties focus on the pro vi si on ofthe RRA thatdefi nes a co ver ed em plo yeras : ( i ) any ca r r i e rb y rai l r oad subj ect to t hej ur i s di ct i on of t heSu r f ac eTr ans por t at i on B o a r d und erpartA o f su b tit le IV of T itle 49
. . . . 45 U
. S. C . § 231( a) ( 1) ( em phasi s s up pli ed). Thi s s ubsection con tains sev e r a l term s and ph rases th at req uire fur th eri nv es ti g at i o n.

1. W e tu r n fi r stt o the phr as e “c ar r i erb y r ai l r o ad. ” The R R A p r o v i d e s n o d e fi n i t i o n o fth i s t e r m. No t ab l y, h o weve r, the I nter sta te Com m er ce Com m i ssi on Ter m i nati on A ct o f19 95 ( “I CC TA ”) , wh i ch del ineate s the j uri sdic

15 ti on o fthe Sur f ace Transpor tat i on Boar d (“ STB”), d efi nes “ra il c ar ri er ” a s a “a per son provi ding co m m o n ca rrier r a i l ro ad t r ans por t at i on f o rc o mpe ns a t i o n. ” 4 9 U. S
. C. § 1 0102 ( em phasi s s upp l i ed). The RRB se em ed to ass um e, and w e s ee no r ea so n to di sag re e, thatCongr ess i ntended “car ri er ” t o have the s am e m eani ng i n both of these clo sel y r el ate d statutes and that the RRA st atute th e r e f o r e a ff o r d s n o b r o a d e rc o v e r a g e th a n th e I C C T A. The I CCTA de fi ni ti o n o f“ r ai lc ar r i er ” pr es en ts , i n tur n, i ts ow n in te r na li ss ue s. The I CCTA do es no t defi ne14 N o. 09

- 3945

Fa ya r d v. N e . Ve hi cl e Se r vs . , LLC, 5 3 3 F .3d 42 , 46 (1s t C ir . 20 0 8 ); 16 A m . Ori ent Expres s R y. C o. v. Surf aceTrans p. Bd. , 484 F. 3d 554, 557 (D .C . C ir . 20 0 7 ); N ew York Susquehanna & W
. R y. C orp. v. Jackso n , 500 F. 3d 238, 250 ( 3d C ir . 2 0 0 7 ) ; Black’ s Law D ic ti onary 242 ( 9th e d. 20 09 ) ( “A c om m er c i al e nt er pri s e thatho l ds i t selfout t o the publ i c as offer i ng t o t ran sp ortfre i ghtor pas s en ge rs f or a fee .”). “c o m m o n c ar r i er . ” Oth er c our ts ha ve a ss um ed th atthe ter m sho uld be gi ven the sa m e m eani ng as i t i s given i n the c o m m o n l aw : a n e nt i tytha t ho l ds i ts el fo utt o the p ub li c as offering trans p ortati on serv ices to allw ho are w il ling to pay i ts tariff

. 16 T he I C C T A also d efi ne s “ tran sp ortation.” Th at term i s defi ned to i ncl ud e: ( A ) a l oco m oti ve, car, ve hi cl e, ve sse l, warehouse , whar f, pi er, do ck, y ar d , pro per ty, f ac i l i ty, i ns trum ental i ty, o r equi pm en t ofany ki nd r el ate d to th e m o ve m en t o fpa ssen g er s o rpr o per ty, o rb o th, by r ai l, r eg ar dl es s o fo wner sh i p o ra n a g r ee m en t co nc erni ngus e; a nd ( B) s e r v i c e s r e l a t e d t o th a tmo v e me n t, i n c l u d i ng re c ei pt, del i ver y, el evat i on, tr ansferi n tr ansi t, re fri ger ati on, i ci ng, venti l ati on, stor age , handling, an d int er c h an ge of p as se n ge rs an d p ro p er ty
. . . . 49 U
. S. C
. § 10102(9).N o. 09

- 3945 15 2. S ec ti o n 2 31 ( a) ( 1) a l so de fi ne s empl o y erb y r equir i ng that the “ carrie r by ra i l ro ad” be subj ect to the j uri sdic

ti o n o fthe S ur f ac e Tr an spo r tati on Bo ar d. The r el ev an t sta tute, w hi ch i s depend ent on the defini ti ona l se cti on w e hav e j ust r efer enced, pro vi des thatthe Board has j urisd iction over: tran spo rtat io n by rail ca rrier th at is

— ( A ) o nl y b y r ai l ro ad; o r ( B) b y r ai l ro ad and w ate r, wh en the tr anspor tat i on is und er com m on con trol, m an agem en t, or arra ngem ent fora continuous car ri age o r shi pm ent. 49 U. S
. C. § 1 0 5 0 1 ( a ) ( 1 ) ( e mpha s i s s up pl i e d)

. S TB j ur i s dicti o n atta ch es t o s ucht r an spo r ta ti o n tha t i s par t o fthe in te rs ta te rail n et w or k. Id. § 10501(a)(2)( A ).

C. W i th the se sta tutory pr ovi si ons as ou r deci si onal m at r ix, w e no w exa m i ne the RRB’ s r es o l ut i o n o fthe si tuati on pre sente d by thi s ca se.

1. I n de te r m i ni ngtha t H er zo g ’ s di spa tc hi ngo per at i o ns w er e co ver ed by the Acts, the B oar d rea sone d that T rin ity (D A R T an d th e T ), as t h e o w n er of th e ra i l l i n e in que st ion, f or m er l y had l eas ed the ri ght t o run i nter sta te r ai lo per at i o ns o ve ri ts l ine to the f o uri nt er st at e fr ei g ht ra i l own er s that oper ate i nter sta te fre i ght tr ai ns ov er16 N o. 09

- 3945

45 U .S. C
. § 23 1(a)( 1) pr ov id es: 17 Th e t e r m “ e m pl oy e r ” s ha l l i nc l ude

— ( i ) an y c ar ri erby r ai l ro ad s ubj ec t t o the j ur i s di c t i on of t h e S u r f a c e T r a n s p o r t a t i o n Bo a r d u n de r p a r t A of (co n tin u ed ...) i ts l in es . Havi ng r eta i ned no par t o fthe i nter sta te oper ati on o f r a i l t r a ns po r t a t i o n f o r i t s e l f, Tr i ni t y wa s not, dur i ng that e arlier pe r i od, a c o ve r ed empl o y erunde rthe A cts. In Jan ua ry 2001, how ever, T r inity al tered that arr an g e me n t b y t a k i n g b a c k o n e a s p e c t o f th e r i g h t t o r un i nter sta te ra i lo perat i ons ove r i ts l i nes

— di spa tc hi ng

— an d vest ing tha t ri gh t in H erzog T ran sit, w hich a ls o ope rate d an i ntra sta te com m uter lin e overthe sam e t ra ck. H er zogthen p er for m ed the dispat chi ng functi on for the inter sta te oper ati ons as w el las t h e c om m uterl i ne. I n th e Bo ar d’ s vi ew, Her zo g ’ s di spa tc hi ngfunc ti o n c o nsti tutes a necess ar y an d integr alparto fthe oper ati on ofi nter sta te tr ai ns o verTrini ty’ s t ra cks and, ther ef or e, i ts acti vi ty a s a di s p a t c herco n st itu te s o p er at ion as a ra il c a r r i e rs u bj e c tt o th e R R A.

2. I n deter m i ni ng wh etherthe Boa rd ’ s a nal ysi s co m port s wi th the s t a t ut o r y ma nd a t e tha twe h a v e de s c r ib e d, w e b elie ve th at, as a firstst ep , i t is es se n t i a l t o k ee p in m i nd two ov erar chi ng co nsi derat i ons. Fi rs t, the subsection of th e RR A that w e hav e ana lyzed i s p a rt of a m uch bro ader provi si on that br i ngs withi n the sc op e o f an“ empl o y er ” m any di ffer en t en ti ti es . The se v ar i o us 17N o. 09

- 3945 17

(
. . . c on t i nu e d) 17 subti tl e I V ofTit le 49; (ii ) an y com p an y w hich is d i r ectly or in d irectly owned or co nt ro l l ed by, or under c om m on c ont ro l with, one or m or e em pl oye rs as defi ne d i n par agr aph ( i) of thi s s ub d iv i s i on, an d whic h o per at es an y e qui pm en t or f ac i l i t y orpe rfor m s a ny se rvi c e ( ex c eptt ru c ki ng s er vi c e, c as ual s er vi c e, an d the c as ual opera t i on of equipm ent or f aci li ti es ) i n connect ion with the t ra ns port at i on ofpas se nge rs or pr ope rty by r ai l ro ad, or the re ce ip t, d el iv er y , ele v a tio n, tra n sfe r in tr a n sit, re frigeration or icin g , stora g e, or ha n d l i n g of pr op erty tran spo r t e d b y r a i l r oa d; ( i i i ) any re c ei ver, t ru s t ee , or othe r i ndi vi dual or body, j udi c i al or oth erwi s e, wheni n the pos s es s i on ofthe p ro p erty or o p era ting all or a ny p art o f the b u siness ofany em pl oye r as defi ne d i n pa ra gr aph ( i ) or ( i i ) of thi s s ubdivi s i on; (iv ) an y ra ilr o a d a sso ci a tio n, tra ffic a sso ci a tio n, ta ri ff bure au, dem ur ra ge bur ea u, wei ghi ng a nd i ns pec t i on bure au, c ol l ec t i on age nc y a nd an y othe r as s oc i at i on, bure au, ag en c y, or or gan i za t i on whic hi s c ont ro l l ed a nd m aint ained w holl y or princi pally by tw o or m ore em p loy ers as d efined in p ara g rap h (i) , (ii ), or ( iii) of this su bdi vi s i ona nd whi c h i s e ng a ge d i n the pe r f or m ance of serv ices in co nn ectio n w ith o r i nc id en tal to ra ilro ad t ra ns por t at i on; an d ( v) any r ail w ay labor organizat ion, nati onal i n sc ope, w hi c h ha s be e n orm a y be o r ga ni z e d i n a c c or da nc e w ith the prov is ions o f the Railway Lab or Act, as am en ded [45 U. S. C. 15 1 e ts eq . ] , an d i t s St at e and (co n tin u ed ...)18 N o. 09

- 3945

(
. . . c on t i nu e d) 17 N atio na l legislativ e com m ittees, g en era l com m ittees, insu ran ce d ep artm en ts, a nd lo cal lod g es an d d iv ision s, e s t a b l i s h e d p u r s u a n t t o th e c o n s t i t u t i o n o r byl a ws ofs uc h o rg ani za t i on. (B ra ck et s in o ri g in a l). I ti s al s o a ppar en tthatthe var i ous s ubgr oups w ithin the 18 sta tu te ’s co v er a g e a re n o t n ec es sa ri ly ex cl u siv e. I n a n y e v e n t, th e o th e r su b se c t i o n s m a k e e v i d e n tC o n g r e ss ’s d eci s i on t o pl ac e withi n the r ai l ro ad r et i re m en ts ys t em tho se em pl oye d i n di re c t l y s uppor t i ng the r unni ng o fthe i nterstate r a i l s ys t e m . Our r e a di ngo fthe s t a t ut or y l a ng ua ge fi nd s s up por tas w ell in d ec i s i ons dea l i ng wi th whe the r a s ubs i di ar y of a ra ilroa d is an “em p loy er.” I n t h at co nte xt, ou r collea g u es in the D is tr ic t ofColum b ia C ir cuithave em phasized that “[t] he statu tes requ ire tha t serv ices b e p erform ed m erely ‘ in connect ion with’ rai l act ivity. ” Interst ate Q u al i ty Servs. , 83 F. 3d at 1464. su bs ec ti o ns a r e des i g ne d pr i m ar i l y t o b r i ngwi th i n the r ai l r o ad r et i r ements ch eme e m pl o y ee s who pl aymany di ffer en t r oles i n the i nt er st at e r ai l way s y st em o fthe Uni te d S ta te s. W he n r ea d t o g ethe r, the se s ubs ecti o ns m ake c l ea rtha t Con g r es s en vi si o ne d a b r o ad r eti r ement pr o g r am fore m pl o y ee s pl ay i ngmany r o l es wi th i n the ra i l ro ad ind ustr y. S ee U nite d States R
. R
. Ret. Bd
. v. Fr itz , 449 U
. S. 16 6, 16 8 ( 1980 ) ( noting tha t the 19 37 A ct was inten d ed to bene fi t “ p erson s w ho p urs ue d careers i n the r ai l r o a d ind us t r y ” )
. I twa s “ de s i g ne d t o p r o v i de 18 pensi ons f or em plo yee s ‘ of the N ati on’ s ra il ro ad tr anspor tat i on syst em . ’ ” Id. ( quoti ng H
. Rep. N o. 10 69, atN o. 09

- 3945 19

T he A m erica n P u b lic Tr an sp or tatio n A ssociatio n, as am icu s, 19 i nf or m s us th at “a c om m ut err ai l ope ra t or ve ry oft eni s the di s pat c he r ofal l the trains ons har ed t ra c k, i nc l udi ng f rei ght tr ains
. ” Am ic us Br. 4. 2 ( 19 37 ) )
. In s ho r t, thi s be dr o ckpr o vi si o n m akes e vi den t th at, as o u r c oll e a g u e s in t h e D ist ric t o f C olu m b ia C irc u it ha v e p uti t, the s t a tute ha s a “ b r o a d p ur po s e ” a nd a “pro tect i ve chara cter
. ” Che ney R. R. Co. , 5 0 F
. 3 d a t1 0 7 8
. As the j ud ges of the Dist ri ct of Col um bi a Cir cui t also h ave sa i d, the l eg i sl ati ve hi st o r y s uppo r ts a r ea di ngo fthe te x t t h at giv es e f f e c t t o C on gr es s’s cle ar int en t t h at th is benefi t s tatute “ be c onst rued br oadl y. ” Id. at10 77- 78. S econd l y, a s we r ec o g ni ze d i n Liv ing ston R ebuild C enter, Inc . v. Ra ilro a d R etirem ent B o a rd, 97 0 F. 2d 295, 29 8- 99 ( 7th C ir. 1992 ), the p rovisi ons of th is statut ory sch em e are not to be c onst ra i ned b y th e busi ness m odel s co m m on atthe t i m e o fthe pa ss age of th e Act. Unl es s an d un t i lCo ng r e s s de e ms o the r wi s e , the y a r e equal l y a ppli cabl e t o today’ s r ail ro ad i nd ustr y a nd the or gani zation al r el ati onshi ps ofto day’ s business envi ro nm ent, w hi ch r efl ect, am ong othe r f acto rs, i ncre ase d com peti ti on and the incre ase d fr equency o fi ntra sta te com m uterl i nes shar i ng tr acka ge and otherf aci l i ti es w i th p ar ti ci pants i n the N ati on’ s inter sta te ra i l w ay system
. I t i s no t u n u su al for an en tit y, th e a c tiv itie s o f w h ich ge n er ally d o n o ti n v o l v e i n t e r s t a t e t r a n s p o r t a t i o n, t o p e r f o r m a parti cul arfuncti on that i s a n i ntegr alparto fint er sta te tr anspor tat i on byr ai land that ther ef or e i s s ubj ect to th e A c ts
. T h e R R A m ay h av e b ee n e n a c t ed w h en all

1920 N o. 09

- 3945

T he B oa rd ’ s au tho ri t y to p ro m u lga te suc h re g u lation s is 20 fo u n d at 45 U .S.C . § 2 3 1 f(b )(5). fu n c tio n s in te gr al t o in te rs t at e t ra n sp or ta tio n u su ally w er e per f or m ed by car ri er s o r thei r affi l i ate s. Today, th e railtrans p ortation ind us try has ad op ted other effi cien c ies. Our duty nev er thel ess r em ai ns the sa m e. W e m us t ap p ly th e s t a t ut e to ensu re i nd ivi d ua ls perf orm i ng the se i ntegr alfuncti ons to i nter sta te ra i ltr ansp ortation are cov ered and thereb y effectu ate C ong ress’s bro ad prot ecti ve pu rpos e. N otabl y, i n ord er t o kee p the Acts fro m r eachi ng to o bro adly, the Board has pro m ulg ate d regula ti ons that ac co untf o re nt i ti es tha t per f orm “ ca r r i erb us i ne ss ” but ar e pr i nci pal ly en gaged i n other busi ness. S uch enti ti es 20 m ay , su bj ec t t o c er ta inco n sid er a t i on s, b e c ov er ed on ly w i th r espectto tho se em plo yee s per f or m i ng the i nteg ra l functi ons. These re gul ati ons sta te that cove ra ge w i l lbe co m pat ibl e wi th th e st atut o r y di r ec ti ve o nl y wh en the functi on per f or m ed b y th e e nti ty has a di re ct l i nk to th e ac tu alo per at i o n o fi nt er st at e tr ains . Sp ec i fi ca l l y, the re g ul at i o n i den ti fi es a s er i es o ff ac to r s whi chthe Board m ust co nsi der in deter m ini ng wh ethersuch a n en tity m ayb e co ve r ed bythe Act s. Acco r di ngt o the RRB’ s r egul at i o n, i n mak i ngs ucha de te r m i na ti o n, the Board co ns i der s th e “h i st o r y a nd a l lo per at i o ns ” o fthe c o mp a n y “ wi th a v i e w t o d e t e r mi n i n gw h e th e rs o me i den ti fi ab l e an d s epa r at e en te r pr i se c o nduc ted bythe [ com pany] i s to be consi dered to be the e m plo yer . ” 2 0 C.F
. R. § 202. 3. The Boar d consi ders the fol l owing f acto rs :N o. 09

- 3945 21 ( 1) The pri m ar y purpose o fthe com pany or per son o n a nd s i nc e the da t e i twa s e s t ab l i s he d; ( 2) The functi onaldom i nance o r subservience o f i ts car ri erbusi ne ss in r el ati on t o i ts non- car ri er busi ness; ( 3 ) T h e a mo u n t o f i t s c a r r i e r b u s i n e s s a n d t he ra ti o ofsuch business to i ts enti re busi ness; ( 4) W he th eri ts c arrier bus i ne ss i s a se par at e an d dist i nct e nter pri se. Id. T h is app ro ach i s ce rt ai nl y c om patibl e with l ongs t a n d i n gj u d i c i a li n t e r p r e t a t i o n . E v e rs i n c e th e S u p r e me Cou r t’ s se m i na lde ci si o n in Rail r oad Ret i r e m ent Board v. D uq ue s neWare hous eCo. , 32 6 U.S . 4 46 (1946) , the key i nqui r y ha s b e e n no t whe the r a n e nt i t y no t o wne d by th e i nt er st at e r ai l road s p r o vi des the s ame s er vi ce , b ut whethe rthe i nt er st at e ca r r i erc o ul d have p er f o r m ed th e w or k a n d ch ar ge d for it. Id. at45 4; s e ealso A tl. L a nd & Im prove m e ntCo. , 79 0 F
. 2d at 856; R.R. Con cret e C ross ti e Corp
. v. R. R. Re t
. Bd. , 709 F.2d 140 4, 1410 ( 11th Cir. 1983). Dispatc h i ng se rv i ces ar e a nece ssa ryparto fthe oper atio n of an y t ra in, in c lu d in g in te rs ta te tra in s. T h er e is gr eatf or ce in the RRB ’ s point thatthe Feder alR ailroa d A dm i ni strati on, char ged with car ry i ng o ut “a l lr ai l ro ad safety law s of th e U nited State s ,” 4 9 U
. S. C
. § 103(b), con side rs disp atch ing services to be cen tral to the safe o p e r a t i o n o fa t r a i n and h a s d e s c r ib e d th e m i n i t s o wn re gul ati ons i n ter m s that underl i ne the i r centr al i ty to22 N o. 09

- 3945

S eenote 6, s up ra. 21 The R AIL TR AN dec i s i onpr e da t e d the c r e a t i ono fthe S TB 22 and, th eref or e, was dec i ded by the pr ede c es s or ag en c y, the I n t e r s t a t e C o mm e r c e C o mm i s s i o n . F o r e a s e o fr e a di n g , we s ha l l r e fe r t o i t s de c i s i ona s tha to fthe S TB. t r a i n o pe r a t i o n. I nt e r s t a t e r a i l c a r r i e r s c a n, a nd o f ten 21 do, undertak e t o p er f or m thi s functi on them sel ves and, w hen theyi ncur s uch an expense, can no doubt charg e fori t. Th e Bo a r d’ s o wn a dmi ni s t r a t i v e pr e c e de nt a l s o s up port s our deci si on. I n thi s case , the Board re l i ed on it s ea r l i er dec i si on in Em pl oye rSt at us D e t e r m i nat i on

— S. C al. Re g ’ lR
. Auth. , S e g r e g a t i o n o fDi s pa t chi ngDe p’ t, B. C. D. 02- 12 ( ser ved Feb. 12 , 20 02)
. There, a go ver nm entalenti ty charg ed w i th the adm i ni str ati on o fco m m uterr ai lo peratio n s (“ SC R R A ”) h ad co n tr ac te d th e o p er at i o n o f all tr ain s to A M T R A K
. It n ev er th ele ss b ec a m e a p ar tia lly c o v e r e d e mpl o y e rwh e n i td e c i d e d t o p r o v i d e i ts o wn dispat chi ng se rv i ces f or a ll t ra ffi c, i nter sta te and i ntra
st at e, o ve ri ts t r ac k s. The Bo ar d no ted th atS CRRA had or gani zed t h e d i spatchi ng se rv i ces i nto a s epara te i denti fi abl e depart m ent that m ai ntai ned str i ct per sonnel separ ati on fro m the re m ai nd ero fthe agen c y’s acti vi ti es and that w as und erthe sol e s up er vi si on o fa disp atch ing m an ager. W e c an n otac c ep t H er zo g’s vie w th at anea rlier d ec is i o n o f the S TB i nv o l v i ng the s a me l i ne c o mm a nd s 22 an op p os i t e r es u lt in th e p re se n t c as e. Se eCi ty of Dal l as, Ci ty of

F or tWor t h an d D/F W

RAIL TRAN, Pet i t i on f orN o. 09

- 3945 23 D ecla rato ry O rder, I
. C
. C
. F i n . D o c k e t N o . 3 2 4 0 6 , 1 9 9 3 WL 54 03 95 (se rv ed D ec . 30, 19 93 ). RAIL TRAN co nc erne d the sam e line s involved i n th e pres en t case, althou gh un d er a d i ffe r e n ts t r u c t u r e th a n th e c u r r e n ti t e r a t i o n. A tth e t i me of t h e R A IL TR A N d ecision, th e citi es of Dallas and Fort W o r th o wne d the r a i ll i ne a nd a s t a t e a dmi ni s t r a t i ve age ncy, RA I LT RA N , was tasked with the r esponsibi l i ty to “p re se rv e an d m an ag e th e [lin e] for c om m u te r r a il ser vi ce. ” Id. at * 1. Pur su an t to a th en - ex i st i ngo per at i ng ri ghts agr eem ent, a ra i l ro ad com pany pai d rentf oruse ofthe l i nes a nd was re sponsibl e form ai ntenance, o peratio n an d d isp at c h in g o n th e lin e. Id. at* 2. The ci ti es had the ri ght to choos e an oper ato r w ho w ou ld co ntra ct w i th the r ai l ro ad to perf or m co m m uterr ai lse rvi ces. F r ei g hto per at i o ns wer e co nduc te d b y th e rai l r o ad an d w er e s ubj ect to exi sting r i ghts ofo therr ai l ro ads. The part ies nego ti ate d new ag re em ents that m odi fi ed these exi sting re l ati onshi ps, and they sought a d ec l ar ato r y j udg m en t from the S TB abo utwhethe rthe pe ndi ng contr actualar ra ngem ents w oul d al terthe non- car ri er sta tus o fthe ci ti es and ofRA I LT RA N
. U nd erthe new ag r ee m en t, th e c i ti es a nd RAI LTRAN woul d ha ve the ri ght a nd r esponsibi l i ty to both se lec t and contr act w i th an en tit y o r en tit ies to op er at e c om m u te r ra il a nd perfo rm di s pat ch i ng on the tr ack. The STB hel d that thi s p ro posed ar ra ngem ent woul d not tr ansf or m the exi sting non- car rier sta tus o fthe ci ti es and ofRA I LT RA N , bec ause the pr oposa l“w ou l d not change thei r re l ati onshi p to the l i ne. ” Id. at* 4. Thati s, the ci ti es a nd RA I LTRAN woul d r emai n n o n- o per at i ng24 N o. 09

- 3945

o wne r s wh o wo ul d c o nt r a c twi th o the rpa r t i e s to p r o v i de th e co m m ut ero per at i o ns a nd di spa tc hi ng . Acco r di ng to the STB , noth ing in that arrange m en t w ou ld con vert the no n-o perat i ng, non- dispat chi ng o w ners them sel ves i nto cove re d enti ti es. W e ac k no wl edg e th e su per fic i als i m i l ar i ti es i n the factualb ac k g r o und u nde r l y i ngb o tho fthe se de ci si o ns fr o m di ffer en t admi ni st r ati ve a g en ci es . In e ac h, a no noper ating o w ner ass um es re sponsibi l i ty f ori nter sta te rail road -rel ated fun ctions and cont racts w ith a third p a r t y t o e x e c u t e th a t r e s p o n s ib i l i t y . I mp o r t a n t l y, h o wev er, the a g en ci es ’ i nqui r i es f o cus ed on tw o di ffer en t en ti ti es i n the se t r an sa ct i o ns a nd a ns wer ed di ffer en t que st ions. The S TB was eva l uati ng i ts j uri sdic ti on a t th e r eque sto fthe pr ede ce ss o r s- i n-int er es t o fTr i ni ty, the n on -op er at in g ow n er , an d fou n d th at it h ad n on e. In th e presentcas e, the Board’ s inquir y c oncerned H er zog, the e nti ty that w oul d be pe r f or m i ngthe dispat chi ng functi ons. The a n al og to H er zogi n the pri orS TB cas e h ad n otye t b ee n id en tifie d , alth ou gh t h e la n gu ag e in th e o p i n i o n su gg es ts th at th e p ar tie s c on te m p lat ed it woul d b e o ne o fthe i nt er st at e rail r o ads a l r ea dy se r vi cing the l i ne. Fur ther, to the extent that the pr ese nt cas e do es address Trini ty i tse l f, i t r eaches the sam e co ncl usi on as that rea ch ed i n RAIL TRAN

— that Tri ni ty i s no t a cove re d enti ty. A .R
. 8 ( “Tri ni ty i tse l fi s no t a co ver ed em plo yerto the extent that the tr ai n dis patchi ng o perati ons conduct ed on Tri ni ty’ s be hal f[ ar e] r epor ted by H er zo g T ra n sit .” ). In d ee d , th es e t w o d ec isio n s a re an im ate d by a singl e, co nsi ste nt princi ple

. Those enti ti es th ata ssu m e di r ec t r es po ns ibi l i tyf o rthe move m en tN o. 09

- 3945 25

W e no t e i n p a ssing tha t the ST B ha s f ollo w ed this p rinc ip le 23 when dea l i ng di re c t l y with e nt i ties t o whi c h the di s pat c hi ng functi on is delegat ed. Ifthe perti nent agre em ent renders m i ni m al the e ffe c twhi c h the di s pa t c hi ngfun c t i onwi l l h a ve on the i nter st ate m ovem ent o f t ra ins , the STB has determ ined tha t the en tity p erform ing the fun ction is n ot su b ject to fed er a l re g u la tio n . SeeUtah Transi tA uth.

— A cqui si t i on Exempt i on

— Unio n Pa c . R. R. C o. , S.T. B. Fi n. D ocket N o. 35008, 2007 W L 21 0 7 1 2 3 , at*5 (se r v e d Ju ly 23 , 20 0 7 ); L os A n g eles C ou n ty Tra n s. C o m m ’n

— Pet
. f orExempti on

—A cqui si t i on f ro m Un i on Pac. R .R . C o., S. T.B. Fin. D ocket N o . 3 2 3 7 5, 1996 W L 408632 , at *3 (se rv ed Ju ly 23 , 19 9 6 ). oftr ai ns i n i nter sta te com m erce a re subj ect to federa l re gu latio n. Those e n tit ies w h os e p ar tic ip at ion in i nt er st at e com m erce i s i ndi r ec t ar e no t su bj ec t to the federa lst atute s. 23 H er e, Trini ty acqui re d the dut y to perfor m the dispat ch i ng func ti o n f o r th e i nt er st at e r ai l o per at i o ns alon g i ts t r acks

. It the n de l eg at ed th i s func ti o n t o Her zo g, the oper ato r ofthe i ntra sta te se rv i ce o n i ts tr acks

. H er zog, ther ef or e, i n perfor m i ng the di spatchi ng functi on for th e interstat e frei gh t traffic on Trinity’s track, i s p erf or m i ng the fun c tion ofa com m on ca rr i eri n i nter sta te com m er ce an d i s a co ver ed em plo yerunder the st atute , atl ea stwi thr es pec t to the di spa tc hi ngfunc ti o n.
Conclusi on The Rai l ro ad R et ire m ent Boa rd co rr ectly dete rm i ned th at H er zo gwas , i ns o f ara s i t per f o r m ed th e di spa tc hi ng26 N o. 09

- 3945 function fori nter sta te tr ai ns usi ng the tr acks o fTrini ty, a co ver ed em plo yer . A ccor dingl y, the peti ti on forr evie w is d en ied

. P E T I T I ON D ENI ED

S YKES, Cir cu i tJudg e, d iss en tin g. A n em p loy er is co ve r ed bythe Ra i l r o ad Re ti r ementa nd Unempl o y m en t I nsurance A cts ( and ther ef or e r equi re d t o c ontribute t o these fe de r a lfun ds ) i fi ti s a “ c a r r i e rb y r a i l r o a d s ubj e ct to th e jur isd ict ion o ft h e Su rfa c e T ra n sp or ta tio n B oa rd .” 45 U
. S. C. § 2 31( a) ( 1) ( I) (R ai l ro ad Reti re m ent Act) ; 45 U
. S. C. § 3 51(b) ( Rai l ro ad U nem plo ym ent Insurance A ct)
. The Tra nsport ati on Boar d’s j uri sdic tion is l i m i ted to “tr anspor tat i on byr ai lcar ri erthati s . . . b y r ai l ro ad [ op er ating inte rs tate ]
. ” 4 9 U.S
. C. § 1 0501 ( a) ( Transpor tatio n B oa rd h as j u ris d ict ion o v er tra n sp or ta tio n by rail ca r r i ertha t i s “in the Uni te d S ta te s” a nd “ par t o fthe i nter sta te ra i lnet w ork” orbetw een a pl ace i n one sta te and a pl ace i n another sta te, U
. S. t er rit ory, o r f or ei gn countr y)
. A “r ai lcar ri er, ” in turn, i s d efin ed as a “pers on provi ding com m on ca rr i err ai l ro ad tr anspor ta ti on for com pensati on. ” Id. § 1010 2( 5)
. “Com m on ca rrie r” i s no t defined, but as m y c ol l eagues hav e no ted, the Transpo r ta ti o n Bo ar d a nd the c o ur ts ha ve us ed th e co m m o n-N o. 09

- 3945 27

F or ease o f referen ce, I refer t o D A R T an d the T collectiv ely 1 as “D A R T,” unles s the contex t r equire s otherwise

. l aw de fi ni ti o n: a n e nt i tythat “ hol ds i ts el fo utt o the g en er alpub l i c as e ng ag ed i n the b us i ne ss o ft r an spo r ting perso ns o r proper ty from pl ace to pla ce forco m pensati on. ” A m . O rient E xp ress Ry . Co ., S. T. B. Fin . Dock et N o. 34 502, at4 ( ser ved Dec. 29 , 20 05) , 20 05 W L 3 55 2968; Am
. O r i e ntExpre s s Ry. Co. v. S urfac eTr ans p. Bd. , 484 F. 3d 554, 55 7 ( D.C. Ci r. 2 00 7) ( affi rm i ng the Tra nsp ortation B oard ’s use of this definition). Pu t t i n g th e s e e l e me n t s t o g e th e r, t o b e c o v e r e d b y t he Acts , a n e m pl o y ermustpro vi de i nt er st at e co m m o nc a r r i e rt r a n s p o r t a t i o n b y r a i l

. Mo r e s p e c i fi c a l l y, th e e mp loyer m us t hold itself ou t to th e p ub li c as offerin g in t e rs t a t e p assen ger or freight railtrans p ortation for a tari ff

. See M aj or i ty Op
. at14 (giv i ng “c om m on ca rr i er ” i ts co m m o n- l aw me an ing: “ ane nt i tytha t ho l ds i ts el fo ut to th e p u b lic a s o ffer in g t ra n sp or ta tio n se rv ice s t o a ll w ho are w il ling to pay i ts tariff”). Pe ti ti o ne r s Dal l as Are a Ra pid Tr an si t ( “DART”) a nd Fort W orth T r an sp ortation A ut hority (“the T ”) are re gi onalpubli c-tr anspor tat i on a uthor i ti es and pol i ti cal subdivi si ons ofthe St ate o fTexas. S i nce 19 99 they 1 have j oi ntl y o w ned a l i ne o f train tr ack that runs b etween the c i ti es of Dal l as and For th W or th. The ci ti es previ ousl y o w ned the li n e, havi ng ac quir ed i t in 198 4 fro m t h e Tr ustee i n bankr up tcy f orthe Ch i cago , Rock Isla n d an d P ac ific R ailr oa d C om p an y. See C ityof D a lla s, C i tyo f F o r tWo r t h & D/F W RA IL TR AN, I
. C.C. Fin. Docke t28 N o. 09

- 3945 N o. 32 406 ( ser ved Dec. 30 , 19 93) , 19 93 W L 5 40395 ( “RA IL TRAN ”)
. DA RT p rovi des co m m uterr ai lse rv i ce o n th e s u bj e c tl i n e ma r k e t e d u n d e rth e b r a n d n a me “T rin ity R ailw ay E x p re ss .” H er zo g T ra n sitSer vic es , In c ., o per at es this servi ce unde ra c o nt r ac t wi thDART. The l i ne o ftrac k a nd the com m uterr ai lse rv i ce o perat i ng o n i t a re enti re l y intrastate, r unning onl y b etween Dal l as an d F o r t W o r th

. Fouri nter sta te fre i ght r ai l ro ads al so use thi s l i ne o f tr ack pu rs uant to preexi sting ea sem ents and rel ate d ag r ee m en ts tha t ha ve b ee n modi fi ed o ve rt i m e a s th e o wner sh i p o f th e l i ne ha s tr an sfer r ed to Dal l as an d Fort W or th and then to D A R T. In 200 1 DA RT exp anded He r z o g ’ s c o nt r a c to pe r a t i ngr e s po ns ib i l i t i e s t o i nc l ud e m ain te n an c e o f th e t ra c k a n d d i sp at c h in g of a ll tra in tr affi c. In re spon se to thi s m ove , and base d on an i nquir y from a H er zogem plo yee , the Rai l ro ad Reti re m ent Boa rd o pened a pro ceedi ng f oran “ em ployer statu s d eterm in a tion.” In a sp li t d ecision, th e B oard hel d that Herzo g i s a co ver ed em plo yer un der the A cts wi thr esp ect t o i ts e m pl o y ee s who per f o r m di spa tc hi ng se rv ice s. Em p’ rSt at us D e t e r m i nation

— D ec. on R eco ns., Tri ni ty Ry. Exp re ss

— T ra inD isp at c h in g, H er zo g T ra n sit Se rv s., In c ., B .C .D
. 09 -53 (se rv ed O c t. 28 , 2 0 0 9 ) , ava il able athttp: //w w w . rrb. gov/b l aw /b cd/bcd09- 53. asp ( l astvi si ted O ct. 12, 2010). A s m y c olle ag u es h av e n ot ed , th e B oa rd ’s ra tio n ale w as that because “[ d]i spatchin g ser vi ce i s a n i nd i spensabl e co m ponent o fcar ri erse rv i ce a nd m ust be del i ver ed as a pa r t o fc arr i ers er vi ce , ” di spa tc hi ngo per at i o nsN o. 09

- 3945 29

ar e c ov er ed by th e A c ts
. Id. at 4. The Boar d fur ther held that “[ w ] here , as i n thi s ca se, the tr ai n dis

pat ch i ngi nc l ude s tr ains tha t o per at e i nt er st at e, the en tit y d isp at c h in g t ra in s o p er at es as a r a i l c ar rie r w ith in th e m ea ni ngo fthe de fi ni ti o n o fa n e m pl o y erunde rthe R ail road R etirem en t an d R ail road U ne m p loym en t In s urance A cts. ” Id. D A R T , the T , and H erzog j o in t ly pet iti one d this cou rt f orr evi ew . In a s chol ar l y o pinio n , m y c ol l eagues hav e o ut l i ne d the a ppl i cabl e st atut es a nd r egulati ons a nd provi ded a thor ough e xplanat i on o fthe hi sto ri calbac kgr ound ofthe A c ts. In m y v i ew thi s s houl d l ead us t o rej ec t t h e B o a r d ’ s d ec isio n . B u t m y c olle ag u es ac c ep t it an d t h er ef or e deny the pet i ti on forr evi ew . Idi sag re e. The Board’ s deci si on ignor es the s tatutor y r equi re m ents f o rc o ve r ed- empl o y ers ta tu s unde rthe Act s an d c o nfl i cts w i th the Inter sta te Com m er ce Com m i ssi on’ s ( “I CC ”) dec i si o n in RAIL TRAN, whi cha d d ress ed th e co m m o ncarrier statu s of th e pre d eces sor ope rator o f th is very sam e Dal l as- For t W or th c om m uterr ai ll i ne under si m i l arci rcum sta nces as thos e pr ese nted her e. Li k e th e B o a r d , my c o l l e a g u e s r e s t th e i r d e c i s i o n o n t he f act that dispat chi ng i s “ a nec ess ar y a nd i ntegr alpart ” o f in te rs ta te rail tr an s p o r ta tio n . M ajorit y O p . at 1 6. It go es w ith ou t s ay in g t h at a tr ain

— whethe rr unning w hol l y intra state ori nter sta te

— do es no t m o ve wi th o ut an o rderfro m a dispat ch er . B u t i t doe s no t fol l ow that dispat chi ng al one i s e nough to tr i gge r covere d-em plo yer st at us u n d e rth e Ac t s . Un d e rth e i n t e r l o c k i n gd e fi n i t i o ns inth e s ta tu to ry sc h em e, co ve re d -em p loy er st at u s is30 N o. 09

- 3945

T he re m ay b e an excep tion f or entities tha t ha v e the p ow er to 2 “m ater ial ly i nter fere” w ith the operati ons ofa c om m on carri er. The Transportati on Bo ard has st rongly im plie d thata no ncarri er with the power t o “ m at er i al l y i nt er fer e” with th e ope ra t i ons ofa c om m on c ar ri eri s i t s el fs ubj ect to the j ur i s di c t i on ofthe T ra n sp o rt a tio n B o a rd

. S ee M etro -N . C om m u ter R .R . C o., S
. T. B. F i n . D o c k e tN o . 3 4 2 9 3 , a t3 ( s e r v e d Ma y 13 , 20 0 3 ) , 2 0 0 3 WL 2 1 0 6 2 8 7 6 ; see a ls o M d . Tra n sit A d m in., S. T. B. Fi n. Docke tNo. 34 97 5 ( s er ved Oct

. 9, 20 07 ) , 20 07W L 29 36 13 4. H ow ever, the “m at er i al l y i nt er fer e” i nqu i ry i s pr act i c al, no tabs t ra c t, an d l ooks t o whethe r the non c ar ri eris act ual ly i n a pos i t i on t o e xe rtm ea ni ngful neg at i ve i nfl uen c e ove r a c om m on c ar ri er ’ s ope ra t i ons . Her e, DA RT’ s ag re em en twith Her zog s i gn i fi c a nt l y l i m i t e d He r z og ’ s di s pa t c hi ngdi s c r e t ion by s ub

j ec t i ng i tt o the Gene ra l Code of Op er at i ng Rule s and e s t abl i s hi ngs t r i c tpr i or i t y r ul e s f ort r a i ns r un ni ng on the s ub j e c tl i ne . J
. A. at 26 6. H erz og is the refore no t in a p osition to m ater ially i nt er fer e with the operat i ons ofa c om m on c ar ri eran d i s no t subjec t t o the j uris dicti on of th e T ransportat ion Board und er thi s al t er nat i ve the or y. lim ite d t o in te rs ta te “c om m on ca rrie rs ” b y ra il

— that i s, to enti ti es that hol d them sel ves out to the publ i c as pro vide rs of in terstat e railtrans p ortation for pass en gers orfre i ght. Pro vi ders ofsubsi diary s er vi ces that m ake i nter sta te ra i ltr anspor tat i on pos sibl e a re notthem sel ves “in te rs ta te co m m on ca rrie rs .” 2 It m ake s no di ffer ence to the c om m on- car ri eranal ysis th atDART “t [ o o ] kb ac k one a spe cto fthe r i g htt o r un i nter sta te ra i lo perat i ons ove r i ts l i nes

— di spa tc hi ng

— an d ves t[ed ] thatr i ght in H er zogTra nsi t. ” Id. T h is a n aly sis m i sc o ns true s th e co nt r ac tu ala r r an g ement s a m o nga ndN o. 09

- 3945 31 be twe enthe pa r ti es . As the o wnero fthe l i ne , DART h ad th e rig h t t o d isp at c h tra in s o n th e t ra c k. Itco u ld perf or m thi s functi on i tse l fo r contr actual l y desi gnate an ot h er to d o it

— one ofthe fre i gh t ra i l ro ads, per haps, o r H er zo g o r anothe r contr acto r. But i t i s no t co rr ect to sugge st that by desi gnating H er zogto do the di spatchi ng, DA RT effecti vel y “ too k b ack one aspect ofth e right to ru n int er st at e ra il op er at ion s o ve r its line s” an d ve st ed it inH e r z o g . Id. The i nter sta te fre i ght r ai l ro ads had preex i st i ngr i g ht s, v i a eas emento ro th erc o nt r ac ts , t o r un thei r tr ai n s o n thi s t ra ck. DA RT d i d not “ tak e ba ck” these ri ghts fro m them

. DA RT ow ns the l i ne but n ev er o w ned i nter sta te fre i ght r i ghts ( ori nter sta te passe ngerr i ghts, f ortha t m att er ) and neveras sum ed re sponsibi l i ty f or i nter sta te ra i lse rv i ce. To the co ntra ry, DA RT o w n s an d thro ugh i ts contr act partner( H er zog ) o perat es a wholly int ra stateco m m uter l i ne. A s s uch, nei ther D A R T nor H er zogi s a n i nter sta te co m m on c ar r i er . I fDART was di spa tc hi ngthe t r ains i tself, it w oul d not, byvi rtue o fthatfuncti on a l one, beco m e a n inte rs tat e co m m on ca rr i er . That i t a ssi gned the di spatchi ng function t o H er zogdoes notm ake H erzog an i nt erstate com m on ca rri er, either. Thi s was e ss en ti al l y the ho lding i n R A IL TR A N, a 1993 deci si on by the I CC ( the predeces sor to th e T ransport ati o n Board ) in a c as e i nv o l vingthe c i ti es o fDa l l as a nd F o r thW o r tha nd thi s ve r y s am e comm ut err ai ll i ne . The ci ti es had fo rm ed RA I LT RA N to m an age and oper ate th e l i n e f o r c o mmut e r r a i l s e r v i c e a n d we r e i n t he proce ss ofr est ructur i ng th ei r contr actualar ra ngem ents32 N o. 09

- 3945 wi ththe i nt er st at e fr ei g htc ar r i er s th ata l so us ed th e c o r r i do r . T he y s o ughta de c l a r a t o r y o r de rfr o m the I CC on th e q u es tio n w h et h e r R A IL T R A N or th e c itie s w ou ld b e c o me c o mmo n c a r r i e r s ( a n d the r e f o r e c o v e r e d e mplo yer s under the Acts) i ftheyas sum ed cer tain functi o ns

— i nc l udi ngdi spa tc hi ng

— ne ce ss ary t o o perat e th e lin e . T h e IC C h eld th at th e p ro p os ed ag re em en ts w ou ld not tr i gge r i ts j uri sdic ti on; the agr eem en ts , the ag ency hel d, “w i l lnotchange the non- car ri er s ta tu s” of R A IL T R A N or th e c itie s. RAIL TRAN, I
. C.C. Fi n. Docke t N o. 32 40 6, 19 93 W L 54 03 95 , at *4 . Th e a gr ee m en ts “w ou ld perm i t [ the c i ti es or RA I LT RA N ] to se l ect a Desi gnee to perf or m cer tain c ontr act du ti es such as m ai ntenance, d isp at c h in g an d o p er at ion al c on tr ol” o f t h e lin e, “[b ]u t . .
. that author i ty w oul d not chang e thei r re l ati onshi p to the l i ne. ” Id. The I CC co nc l ude d tha t the c it i es a nd RA I LTRAN “ wi l lno t be co m e co m m o n c ar r i er s unde rthe A ct by executi ng or car ry i ng out [ the propos ed agr eemen t s ] , o r b y c o nt r a c t i ngf o ra n Op e r a t o rt o p r o v i de ra i lco m m uterse rv i ce o r Desi gnee to d i spatch a nd /o r m ai ntai n the Corr i dor f orj oi nt use. ” Id. a t* 5
. T he I CC furtherco ncl ud ed that i ts author iza ti on was notr equ i r e d ( tha ti s , i t s j ur i s di c t i o n wo ul d n o tb e t r i g g e r e d) ifRA I L T R A N w ere to “d ispa tch or m aintain the C orr i do r[ i ts el f ] o rt o s el ect a Des i g ne e o th ertha n [ o ne o fthe i nter sta te fre i ght c ar ri er s] to per f or m thi s functi on. ” Id. RAIL TRAN, i t s eem s t o m e, i s di re ctl y o n poi nt. I ts ho l d ing, a s appl i ed he r e, mean s th atDART’ s as si g nm en t of the dispat chi ng functi on to H er zog does not m ake either DA RT o r H er zogan inter sta te com m on ca rr i ersubj ect to the Tr anspor tat i on Boar d’s j uri sdic ti on. I t is tr ue thatN o. 09

- 3945 33 the pet i ti oner s di d not a l er t the Boar d to the RAIL TRAN d ecision d uring th e agen cy p roceed ings. B ut th e B oard h as n ot r el i ed on wai verdoctr i ne and i nstea d has devote d consi derabl e s pace in i ts ap pel l ate br i efto di scu ssing this case. D esp ite i ts length , how ever, the B oard ’s di sc us si o n of RA IL TR A N ha s no t per su as i ve l y di st i ngui shed i t. B ecau se th e B oard ’s dec isi on fail s to ap p ly th e statu tory sta nd ar ds f orco ve re d-em plo yerst atus und erthe A cts an d c o nfl i ct s wi ththe I CC’ s dec i si o n in R A IL TRAN, Iwould gr ant the petiti on forr evi ew and re ver se. A ccor dingl y, Ir espect fully di sse nt.

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