In the

United States Court of Appeals 

For the Seventh Circuit ____________________ 

No. 20-3507 

WISCONSIN CENTRAL LTD., 

Petitioner, 

v.

SURFACE TRANSPORTATION BOARD and UNITED STATES OF 

AMERICA, 

Respondents, 

and

SOO LINE RAILROAD COMPANY, 

Intervening Respondent. 

____________________ 

Petition for Review of a Decision of the

Surface Transportation Board. 

Finance Docket No. 36397. 

____________________ 

ARGUED SEPTEMBER 24, 2021 — DECIDED DECEMBER 8, 2021 

____________________ 

Before EASTERBROOK, ROVNER, and KIRSCH, Circuit Judges. 

EASTERBROOK, Circuit Judge. Belt Railway of Chicago is the 

largest switching and terminal railroad in the United States, 

with more than 250 miles of track in its main yard just south 

of Midway Airport. Jointly owned by six railroads—BNSF, 
2 No. 20-3507 

Canadian National, Canadian Pacific, CSX, Norfolk Southern, 

and Union Pacific—Belt Railway dispatches more than 8,000 

cars a day, enough to make up 40 to 50 miles of train. 

An observer may suppose that Belt Railway’s six owners 

would be able to agree on how its facilities should be used, or 

at least provide their own dispute-resolution mechanism. But 

this case pits Wisconsin Central (a subsidiary of Canadian National) against Soo Line (a subsidiary of Canadian Pacific). 

The question is where, in the Chicago area, Wisconsin Central 

will receive traffic from Soo Line. Wisconsin Central prefers 

Belt Railway’s yard; Soo Line prefers the Spaulding yard near 

Bartle`, Illinois, about 25 miles to the west. The Surface Transportation Board ruled that Wisconsin Central cannot insist 

that Soo Line deliver to Belt Railway. 2020 STB LEXIS 428 (Oct. 

29, 2020). 

According to the Board, a carrier’s power to designate a 

place where it will receive traffic is limited to portions of line 

that the designating carrier owns. Because Wisconsin Central 

does not wholly own Belt Railway, it may be used to interchange traffic only with the consent of the other carrier. We 

get the sense that this fight is principally about who should 

bear the cost of Belt Railway’s services, but the Board did not 

resolve that dispute. Instead it held categorically that, in the 

absence of agreement about where to exchange traffic, the receiving carrier must designate a place on its own property. 

The exchange of rail traffic is governed by statute, not by 

regulation or common law. The governing statute is 49 U.S.C. 

§10742, which provides: “A rail carrier providing transportation subject to the jurisdiction of the Board under this part 

shall provide reasonable, proper, and equal facilities that are 

within its power to provide for the interchange of traffic between 
No. 20-3507 3 

... its respective line and a connecting line of another rail carrier” (emphasis added). This language shows the problem 

with the Board’s decision. The Board treated “that are within 

its power to provide” as if it read “that it owns.” But these two 

phrases differ. A rail carrier can have the “power to provide” 

facilities as a result of contract, just as it can have that power 

by ownership. Treating ownership as a sine qua non cuts down 

on the scope of this statute. 

The Board also wrote that §10742 does not apply in the 

first place unless the two railroads have physically intersecting lines. Yet the statute does not contain such a condition 

precedent, and the phrase “within its power to provide” is inconsistent with this supposed condition. True, the statute has 

the phrase “connecting line”, but we know from Atlantic Coast 

Line R.R. v. United States, 284 U.S. 288, 293 (1932), that “connecting line” can include connection through an intermediary—and we so held about a predecessor to §10742. See 

Atchison, Topeka & Santa Fe Ry. v. Chicago, 240 F.2d 930, 936–37 

& n.17 (7th Cir. 1957), affirmed, 357 U.S. 77 (1958). 

The Board discussed at length what amounts to a common-law tradition under which receiving carriers that designate interchange locations on their own lines also allow the 

delivering carriers free transportation over those lines to 

reach the place where the cars will be switched. According to 

the Board, designation of Belt Railway would frustrate this 

free-transit aspect of historical practice. But it did not explain 

why that is so. 

If the parties cannot agree about where to exchange traffic, 

three distinct questions could require resolution: (1) may the 

receiving carrier ever designate a willing third party to receive traffic on its behalf?; (2) if yes, is the proposed location 
4 No. 20-3507 

for interchange “reasonable” (another important word in 

§10742) compared with the place where switching otherwise 

would occur?; (3) if yes to both of these questions, who pays 

the third party? By mixing these up, and smuggling an assumption about the answer to Question 3 into its decision 

about Question 1, the Board erred. 

In addition to making an assumption about expense, the 

Board relied on a common-law norm that a delivering railroad cannot compel a receiving railroad to exercise a contractual right to require a third party to receive traffic. The Board 

thought that it follows from this that Wisconsin Central cannot compel Soo Line to deliver cars to Belt Railway. It is far 

from clear that §10742 supports the Board’s view that a delivering railroad cannot compel a receiving carrier to accept traffic at a place that by contract is within the receiving carrier’s 

“power to provide”. But suppose the Board is right. Wisconsin Central, the receiving line, is willing to accept traffic 

through the Belt Railway, and Belt Railway is willing to accept 

that traffic. Whether Soo Line can be required to tender its 

traffic there rather than at the Spaulding yard depends on the 

language of the statute, not on extra-statutory doctrines. 

Still, the Board insists, it is entitled to resolve such issues 

for itself with the benefit of judicial deference under Chevron 

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

837 (1984). We do not think that Chevron helps the Board, for 

two reasons. First, the phrase “that are within its power to 

provide” is not ambiguous and cannot reasonably be treated 

the same as “on its own track.” Second, the Board did not even

purport to be making policy choices using authority delegated 

by Congress. Cf. United States v. Mead Corp., 533 U.S. 218 

(2001). It did not see any ambiguity in the statutory language 
No. 20-3507 5 

or the historical practice; instead the Board wrote that it was 

applying a deterministic framework established long ago. By 

taking that approach, the Board cut itself off from any support 

in Chevron. See, e.g., Meza Morales v. Barr, 973 F.3d 656, 667 n.7 

(7th Cir. 2020); Transitional Hospitals Corp. v. Shalala, 222 F.3d 

1019, 1029 (D.C. Cir. 2000); Alarm Industry Communications 

CommiLee v. FCC, 131 F.3d 1066, 1069 (D.C. Cir. 1997). The 

statutory word “reasonable” gives the Board interpretive leeway; the statutory phrase “that are within its power to provide” does not. 

The petition for review is granted, the Board’s decision is 

vacated, and the ma`er is remanded for further proceedings 

consistent with this opinion.