Opinion ID: 6982234
Heading Depth: 2
Heading Rank: 2

Heading: Classification of the Transaction

Text: Both párties assume that we should review the STB’s decision under the ICA as it was prior to the ICC-TA, and they cast their arguments accordingly. We shall take their dispute as they frame it, of course; we pause only to note that there is an issue lurking in the background. The savings provisions of the ICC-TA distinguish between an “appeal” from an agency proceeding and a “suit” against the ICC. See ICC-TA §§ 204(b) & (c), 109 Stat. 941-42. † Without having engaged in any extended analysis of the savings provisions, heretofore we have consistently, with but one exception, treated petitions to review final orders of the ICC as “suits” within the meaning of § 204(c)(1). See Grainbelt Corp. v. STB, 109 F.3d 794, 796 n. 1 (1997); Western Resources, Inc. v. STB, 109 F.3d 782, 784 n. 1 (1997); Consolidated Rail Corp. v. STB, 93 F.3d 793, 794 (1996); Burlington Northern R.R. Co. v. STB, 75 F.3d 685, 688 (1996). But see Western Coal Traffic League v. STB, 169 F.3d 775, 778 n. 3 (1999) (treating petition for review as appeal from agency proceeding under § 204(b)(1)). Further, we have yet to analyze the question whether that section requires us to apply the ICC-TA to petitions for review filed after December 29, 1995. Indeed, we have been less than consistent in our approach. See Grainbelt, 109 F.3d at 796 n. 1 (not applying ICC-TA to petition for review filed in January, 1996); Western Resources, 109 F.3d at 784 n. 2' (implying that ICC-TA might apply to petition for review filed in August, 1995); Consolidated Rail, 93 F.3d at 794 (applying pre-ICC-TA law in case consolidating four petitions for review filed by December, 1995); Burlington Northern, 75 F.3d at 692-93 (applying pre-ICC-TA law to petition for review filed in September, 1994). Even if the parties disagreed on which law is applicable here we would not have to resolve the issue, however, for there is no material difference between, on the one hand, §§ 10901 and 11343 of the ICA as they were prior to enactment of the ICC-TA, and on the other hand, §§ 10902 and 11323 as enacted in the ICC-TA. To return to the case at hand, then, § 10901(a)(3) allows a rail carrier, with the ICC’s approval, to “acquire or operate an extended or additional railroad line.” The UTU argues that the transaction between CSS and the Port does not fit within that provision but instead comes within the literal terms of § 11343(a)(6): “acquisition by a rail carrier [namely, CSS] of trackage rights over ... a railroad line ... operated by another rail carrier [namely, CRL].” As the STB noted in its opinion, however, § 11343 is more plausibly interpreted as applying only to transactions between two or more carriers. Section 11343(a) begins by referring to “[t]he following transactions involving carriers,” and each of the six subsections that follow describes a transaction that necessarily involves multiple carriers. ‡ Indeed, in 1982 the ICC promulgated a regulation that reflected this very interpretation of § 11343. See 49 C.F.R. § 1150.1(a) (“Existing carriers require approval under section 10901 only to construct a new rail line or operate a line owned by a noncarrier, since acquisition by a carrier of an active rail line owned by a carrier is covered by 49 U.S.C. 11343”). In explaining this regulation, the ICC reasoned that “section 11343 is applicable only to acquisition^] where both the buyer and the seller are carriers.” Application Procedures for a Certificate to Construct, Acquire or Operate Railroad Lines, 365 I.C.C. 516, 518 (1982) (Notice of Final Rules). Moreover, this court upheld the ICC’s reading of § 11343 as a provision applicable only to multiple-carrier transactions and called it “a reasoned and permissible effectuation of the statutory scheme.” Simmons v. ICC, 829 F.2d 150, 157 (1987). The only distinction between this case and Simmons is that here CSS acquired operating rights over track owned by a noncarrier, while in the earlier case a carrier acquired the underlying track from a noncarrier. The STB argues that this is a distinction without a difference because neither the statute nor the regulation differentiates in any way between operating rights and ownership. See § 10901(a)(3) (rail carrier “may ... acquire or operate an ... additional railroad line”); see also 49 C.F.R. § 1150.1(a) (“subpart governs applications [for the] ... acquisition or operation of railroad lines”). Although the UTU attempts to invest the distinction with significance, as follows, we conclude that Simmons is controlling. The Union first contends that this case involves a “relationship within § 11343(a)(6)” because CSS and CRL have each agreed with the Port to allocate maintenance expenses based upon their proportionate use of the track and because the two carriers must collaborate in order to avoid collisions. Relationships, however, are not the stuff of § 11343(a)(6). As the Board correctly points out, § 11343 “focuses on whether two or more carriers have been brought under common management or control through a transaction.” Neither a maintenance agreement nor the coordination of schedules between two carriers is a control transaction, let alone a control transaction described in § 11343. Second, the UTU argues that § 10901 and the regulations that implement it presuppose that for each rail line there is a single operator, not multiple “nonexclusive operators.” As evidence, the Union cites 49 C.F.R. § 1150.3(c), which requires an applicant for approval under § 10901 to state “whether the rail line will be operated by [the] applicant. If not, the operator which has been selected must join in the application.” Id. As we read this regulation, it means only that the agency would not have entertained an application (from the Port, for example) in which the proposed operator (here CSS) had not joined. The Union also points to 49 C.F.R. § 1150.31, which establishes procedures for the expedited approval of applications under § 10901 and “also includes”: (1) Acquisition by a noncarrier of rail property that would be operated by a third party; (2) Operation by a new carrier of rail property acquired by a third party; [and] (3) A change in operators on the line.... Not only do the three listed transactions not preclude multiple operators, but the opening sentence of the regulation in question — which the Union neglects to quote — ■ provides that it “applies to all acquisitions and operations under section 10901” as interpreted in 49 C.F.R. § 1150.1. And, as the Board notes, § 1150.1 distinguishes between single and multiple carrier transactions without regard to the number of carriers ultimately operating the track. In sum, we see nothing in the statute or in the regulations promulgated thereunder that confirms the UTU’s reading of § 10901 or suggests a prohibition upon' multiple carriers operating a single line. Finally, the UTU maintains that the STB’s position that “there is no meaningful distinction between operating and operating over” a line is arbitrary and capricious. This claim evinces a misunderstanding of the Board’s decision. The Union had argued before the Board that § 10901 “distinguishes between operating and providing transportation over a line” and that § 10901 applies only to carriers that operate a line. In the UTU’s parlance, CRL operated the track because it had the maintenance contract, while CSS merely operated over it. The Board rejected this distinction, noting that the Port had separated operation of the line from maintenance of the line and that CSS “is operating the Port track in the. same manner as CRL.” Therefore, the Board concluded that both CSS and CRL operated the track or, in other words, that “there is no meaningful distinction between [what the UTU described as] operating and operating over” a line. The Board’s decision was consistent with its regulations, which, as noted above, we have previously held reflect a reasonable interpretation of an ambiguous statute. See Simmons, 829 F.2d at 157. Therefore, the ICC and the STB properly processed CSS’s acquisition of operating rights under § 10901. Further, the Board did not err in declining to exercise its discretionary power to impose labor protective conditions upon a transaction under § 10901. Recall that, as a matter of policy, the STB imposes such conditions only upon a showing of “exceptional circumstances.” The UTU did not attempt to make a showing of exceptional circumstances before either agency, and it acknowledges in its brief to this court that exceptional circumstances “are not asserted in this proceeding.”