Opinion ID: 185220
Heading Depth: 2
Heading Rank: 2

Heading: The Board's Regulatory Authority

Text: BNSF also challenges the moratorium under 5 U.S.C.s 706(2) as an unauthorized, as well as an arbitrary andcapricious, exercise of the Board's decisionmaking authority. It faults the Board for failing to indicate in its Notice ofPublic Hearing and Request for Comments either that it wasconsidering the moratorium or that the hearing and commentperiod described in the Notice was actually part of a rulemaking proceeding. In addition, it argues that insofar asthe moratorium is designed to maintain the competitivebalance within the industry while the Board re-examines itsstandards for determining the public interest, it is an impermissible attempt by the Board to restrain competition. Finally, BNSF asserts that, assuming there is a need forrevised merger standards, the Board acted arbitrarily andcapriciously in imposing the moratorium without first considering: (1) its past experience in processing an applicationwhile simultaneously pursuing a related rulemaking; (2) theflexible nature of its rules regarding the determination ofthe public interest; and (3) the need for a 15-month asopposed to a shorter moratorium. In response, the Board characterizes the moratorium as aprocedural rule for which it was not required to give noticeand an opportunity to comment, see Neighborhood TV, 742F.2d at 638, and argues that even if it is a substantive rule,the Board has authority under s 721(b)(4) to issue it as anappropriate order without regard to the APA. The Board further defends the moratorium on its merits as a reasonableexercise of the agency's authority to consider, and to devisestandards to protect, the public interest--not, as BNSF hasargued, the interests of particular competitors--in regulatingmergers. Finally, invoking its broad discretion to decide how bestto resolve the complex issues that come before it in mergercases, the Board explains that without a new set of standardsalready in place it would have no way to determine whetheran application is complete, or to ensure that a record compiled under the existing standards contains the informationthat will prove necessary under the new standards. Similarly, if the Board proceeded with the application before devisingnew standards, other participants in the merger proceedingwould have to respond to the BNSF/CN proposal withoutknowing the criteria under which the application ultimatelywould be evaluated. Having already concluded that imposing the moratoriumwas within the bounds of the Board's statutory authority, forthe same reasons we also hold that the decision to impose themoratorium was neither arbitrary and capricious nor otherwise improper. The Board provided ample opportunity forpublic comment in its proceeding, as well as ample justification for its decision. Given the Board's special cognizanceover the railroad industry, National Motor Freight TrafficAss'n v. ICC, 590 F.2d 1180, 1185 (D.C. Cir. 1978), we willdefer to its informed judgment, id., regarding the need forthe moratorium in order to develop new standards for determining the public interest in merger application proceedings.