Opinion ID: 4520228
Heading Depth: 2
Heading Rank: 1

Heading: Jurisdiction to Review the Initial Order

Text: Before we may reach the merits, we must determine whether we have jurisdiction to review the Board’s Initial Order pursuant to either of the County’s petitions for review. We examine petitions for review of orders of the Surface Transportation Board under the Hobbs Act, see 28 U.S.C. §§ 2321(a), 2342(5), which allows “[a]ny party aggrieved by [a] final order” to, “within 60 days after its entry, file a petition 13 to review the order in the court of appeals wherein venue lies,” id. § 2344. We consider our jurisdiction over each petition in turn.
Snohomish County first petitioned for review of the Board’s Initial Order on February 7, 2019, three days after filing for reconsideration within the agency. The Board moved to dismiss that first petition because the County’s petition for reconsideration was pending before the Board. We held the petition in abeyance until the Board denied reconsideration and then consolidated the first petition with the new petition the County filed following entry of the Reconsideration Order. We now hold that the first petition for review was incurably premature. Parties are not required to file petitions for reconsideration, but they may not “simultaneously move for reconsideration before the agency and petition this court for review.” TeleSTAR, Inc. v. FCC, 888 F.2d 132, 133 (D.C. Cir. 1989) (per curiam); see generally ICC v. Bhd. of Locomotive Eng’rs, 482 U.S. 270, 285 (1987). Moreover, “when a petition for review is filed before the challenged action is final and thus ripe for review, subsequent action by the agency on a motion for reconsideration does not ripen the [earlier-filed] petition for review or secure appellate jurisdiction.” TeleSTAR, 888 F.2d at 134. Rather, in order to “cure the defect, the challenging party must file a new notice of appeal or petition for review from the now-final agency order.” Id.; see also Clifton Power Corp. v. FERC, 294 F.3d 108, 110 (D.C. Cir. 2002). Because the County’s filing of a petition for reconsideration on February 4 rendered the Board’s Initial Order non-final, its first petition was incurably premature and must be dismissed. The County does not dispute any of the above reasoning. Instead, it suggests that its own petition for the Board’s 14 reconsideration was untimely under the Board’s regulations, and so could not affect the finality of the Initial Order. Snohomish Br. 8-9. The Board’s regulations provide that a petition for reconsideration “must be filed within 20 days after the service of the [Board] action or within any further period (not to exceed 20 days) as the Board may authorize.” 49 C.F.R. § 1115.3(e). During the time period in question, the Board altered its procedural deadlines due to the partial government shutdown, providing notice that “any material due to be submitted to the Board during the partial Federal government shutdown period . . . will now be due no later than February 4, 2019.” Filings Submitted or Due To Be Submitted During the Partial Federal Government Shutdown, 84 Fed. Reg. 1264, 1264 (Feb. 1, 2019). Here, the County took advantage of the Board’s extension and filed its petition for reconsideration on February 4, 2019—53 days after it received service of the Board’s Initial Order. The County now suggests that the Board lacked authority to change its procedural deadlines to account for this unusual circumstance. But an agency generally has flexibility to adjust procedural rules set by regulation, see, e.g., Am. Farm Lines v. Black Ball Freight Serv., 397 U.S. 532, 539 (1970), and the Board’s general extension of deadlines in response to the shutdown contravened no statutory authority, see 49 U.S.C. § 1322(c) (permitting the Board to grant reconsideration “at any time”). We therefore conclude that the County’s petition for reconsideration was timely, that this timely petition for reconsideration rendered the Initial Order non-final under the Hobbs Act, and that the County’s first petition must be dismissed as incurably premature.
Snohomish County timely petitioned for review a second time on June 21, 2019, after the Board denied reconsideration on May 17, 2019. That petition appears to seek review only of 15 the Board’s Reconsideration Order, raising a separate jurisdictional question whether it supports our review of the Initial Order. A petition for review must “specify the order or part thereof to be reviewed.” FED. R. APP. P. 15(a)(2)(C). An inaccurate specification in this context could have particularly severe consequences, because the County’s petition for reconsideration was premised on a claim of “material error.” J.A. 487. The Supreme Court has held that, “where a party petitions an agency for reconsideration on the ground of ‘material error,’ i.e., on the same record that was before the agency when it rendered its original decision, an order which merely denies rehearing of the prior order is not itself reviewable.” Bhd. of Locomotive Eng’rs, 482 U.S. at 280 (alterations and internal quotation marks omitted). This court has repeatedly echoed that conclusion. For example, in Village of Barrington v. Surface Transportation Board, we observed that the Board had “denied rehearing of its 2008 decision, and it made no alteration in that underlying order[, so] there is nothing more we can say about Barrington’s claims of material error.” 758 F.3d 326, 328 (D.C. Cir. 2014); see also Entravision Holdings, LLC v. FCC, 202 F.3d 311, 315 (D.C. Cir. 2000); Schoenbohm v. FCC, 204 F.3d 243, 250 (D.C. Cir. 2000). Here, the second petition for review stated that “Snohomish County hereby petitions the Court of Appeals for review of the Decision of the Surface Transportation Board . . . served May 17, 2019,” and linked to and attached only the Board’s May 17 Reconsideration Order. Snohomish Cty. Pet. for Review at 1, No. 19-1136 (D.C. Cir. June 21, 2019). To the extent the second petition seeks review of the Board’s Reconsideration Order, we must therefore dismiss the petition. Nonetheless, we conclude that the second petition for review also manages to invoke our jurisdiction over the Initial 16 Order. We have made clear that our examination of compliance with Rule 15(a) is not formalistic. A “mistaken or inexact specification of the order to be reviewed” is “not fatal” if “[i] the petitioner’s intent to seek review of a specific order can be fairly inferred from the petition for review or from other contemporaneous filings, and [ii] the respondent is not misled by the mistake.” Entravision Holdings, 202 F.3d at 313. We conclude both factors support review here. First, to determine whether the intent to seek review of a specific order may be “fairly inferred,” this court generally looks to “contemporaneous filings,” such as a docketing statement or statement of issues. Id. In American Rivers v. FERC, for example, we reviewed an order not explicitly identified in the petition because an intent to seek its review could be fairly inferred by looking to the motion to consolidate petitions, the docketing statement, the statement of issues, and the attached decisions. 895 F.3d 32, 44 (D.C. Cir. 2018); see also Martin v. FERC, 199 F.3d 1370, 1371-73 (D.C. Cir. 2000) (same, looking to a contemporaneously filed motion to stay, and later-filed docketing statement and certificate of rulings under review); Damsky v. FCC, 199 F.3d 527, 532-34 (D.C. Cir. 2000) (same, looking to references in a contemporaneously filed notice of appeal and concise statement of reasons). The difficulty is that some of the sources of intent to seek review that have informed our decisions in other cases are absent here because we chose to hold the County’s first petition in abeyance, rather than dismiss it as incurably premature, and pretermitted further filings by sua sponte consolidating the two petitions a week after the County filed its second petition. In these circumstances, we think it proper to consider the contemporaneous filings accompanying the then-still-pending first petition for review. Indeed, these facts resemble those in Domtar Maine Corporation v. FERC, where an earlier petition 17 sought review of an agency ruling, Ruling 4, and a later petition listed only another ruling, Ruling 6. 347 F.3d 304, 308 (D.C. Cir. 2003). There, we noted that “[w]e did not dismiss Domtar’s [earlier] petition for review, which listed Ruling 4, until several months after the company filed its [later] petition,” so, “at the time it filed that petition, Domtar already had a petition pending that sought review of Ruling 4.” Id. As a result, we concluded that “Domtar’s decision to list only Ruling 6 in its [later] petition is more reasonably viewed, both now and at the time it was filed, as evincing the company’s effort to ensure that all of the Commission’s orders would be reviewed, rather than as a sudden decision to reverse course and abandon any attempt to have this court review Ruling 4.” Id. So too here. The County did not expressly list or attach the Initial Order to its second petition but made clear in its first petition that it sought review of the Board’s Initial Order. The County’s briefing in response to the Board’s motion to dismiss the first petition further confirms that intent. The County there observed that, if its petition for reconsideration rendered the Initial Order non-final, it could “file a new petition for review to the extent necessary upon agency action in response to the February 4 petition for administrative reconsideration.” Snohomish Cty. Resp. in Opp’n to Mot. to Dismiss at 3-4, No. 19-1030 (D.C. Cir. Feb. 26, 2019). And the County also explained that it filed the first petition only because it was unsure of the shutdown’s effect on the various Board and Hobbs Act deadlines. Id. at 4-5. As the County put it, “the County wishe[d] to be cautious rather than sorry, and should not suffer a penalty on that account.” Id. at 8. Just as in Domtar, we are here “convinced that [the Board] could fairly infer not only” that the County wished to challenge the Board’s Initial Order in its second petition, but also that the County “had simply made a mistake when it listed only [the Reconsideration Order] in that petition.” 347 F.3d at 308. 18 As for the second factor bearing on our assessment of the scope of a notice of appeal under Entravision, at no point has the Board suggested that it has been misled by the County’s mistake. Indeed, in its reply to the County’s opposition to its motion to dismiss the first petition, the Board recognized that the County would likely seek judicial review of the Initial Order following a denial of its petition for reconsideration, assuring the court that “Snohomish will not be deprived of the opportunity to obtain judicial review if the Board should deny the administrative petition for reconsideration.” Board Reply in Support of Mot. to Dismiss at 4-5, No. 19-1030 (D.C. Cir. Mar. 5, 2019). In its brief before this court, the Board does not contend that it has been misled. And, at oral argument, the Board conceded that its jurisdictional challenge focused only on the first part of Entravision, regarding the County’s intent. See Oral Arg. Rec. 25:19-25:36. Given the County’s efforts over several months to gain review of the Initial Order, it is difficult to see how the Board could have argued otherwise. Because both aspects of the Entravision inquiry support our review, we conclude that we have jurisdiction to reach the merits of the County’s challenge to the Initial Order via the second petition for review. B. The County’s Arbitrary-and-Capricious Challenge On the merits, we review the Board’s denial of the County’s petition under the Administrative Procedure Act, examining whether the agency’s action was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A); see Mfrs. Ry. v. Surface Transp. Bd., 676 F.3d 1094, 1096 (D.C. Cir. 2012); Riffin v. Surface Transp. Bd., 592 F.3d 195, 197 (D.C. Cir. 2010). The “requirement that agency action not be arbitrary and capricious includes a requirement that the agency 19 adequately explain its result.” Jost v. Surface Transp. Bd., 194 F.3d 79, 85 (D.C. Cir. 1999) (quoting Dickson v. Sec’y of Def., 68 F.3d 1396, 1404 (D.C. Cir. 1995)). This court “may not supply a reasoned basis for the agency’s decision that the agency itself has not given.” Id. (quoting Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto Ins. Co., 463 U.S. 29, 43 (1983)). Rather, the Board “must articulate the reasoning behind its decision with sufficient clarity to enable petitioners and this court to understand the basis for its decision.” Id. at 88. Here, we conclude that the Board’s failure to consider whether the notices of exemption were misleading, even if not demonstrably false as a matter of state or federal law, was arbitrary and capricious. Recall that, under the Board’s regulations, a notice of exemption is void ab initio if it “contains false or misleading information.” 49 C.F.R. § 1150.32(c) (emphasis added). In its petitions to revoke, the County made clear that it was arguing both that the notices were false and, at minimum, misleading. For example, in its petition to revoke the Eastside exemption, the County argued that, “[a]t the very least the verified notice of exemption was misleading by omission: Engle and [Eastside] should have advised this Board that Engle on behalf of GNP had already conveyed the freight rail easement to Engle’s father Earl and wife Joanne, and that the easement was no longer in the bankrupt estate.” J.A. 55; see also J.A. 62 (reiterating that “at the very least [Eastside] misrepresented by omission the facts on ownership”). And in its petition to revoke the Ballard exemption, the County again argued that “failure to disclose material information can render a notice misleading by omission, and therefore void ab initio.” J.A. 363 n.1 (internal quotation marks omitted). The Board itself was aware that the County was raising both challenges, observing in its Initial Order that the County’s petitions claimed the notices contained 20 both “false and misleading information.” Initial Order at  (J.A. 481) (emphasis added). Nonetheless, the Board’s Initial Order collapsed the two inquiries into one, limited to falsity. The Board provided one paragraph of meaningful analysis, beginning with the bare assertion that “[i]t is clear from these facts that the questions that must be resolved to determine whether the notices of exemption were false or misleading involve questions of ownership, which in turn involve issues of state property and contract law and federal bankruptcy law.” Id. (J.A. 482). Operating from that premise, the Board ultimately concluded that it would “deny the County’s petitions to revoke because they are based on claims concerning [Eastside’s] property interests in the Line that should be addressed by an appropriate court,” id. at  (J.A. 476), and that “[w]ithout resolution of the ownership issues, the Board cannot determine whether the verified notices contained false or misleading information,” id. at  (J.A. 483). We need not decide whether the Board permissibly declined to address the County’s arguments about the falsity of Engle’s filings, but see infra Concurring Op. at 2-6, because the Board’s reasons do not in any event support its denial of the separate claim that the notices of exemption were misleading. The record before the Board contained ample evidence of potential misleadingness, notably the omissions and inconsistencies in Engle’s account that the County and others flagged. For example, Engle’s verified notice for the Eastside acquisition stated that Eastside had purchased “all assets, operating and lease rights of GNP RLY,” including a “line of railroad formerly owned by BNSF,” J.A. 9, all the while omitting the publicly recorded transfer (and the purported but unrecorded re-transfer) of the easement between Engle and his family that Engle now claims occurred. In addition, Engle’s 21 reply to the Eastside petition appears to be internally inconsistent, stating both that Engle and his family relinquished ownership of the easement by October 2011 and that they retained enough of an interest in the easement to sell it to NW Signal in 2017. Even the Board’s Initial Order recognized that the “actions of Engle” were “troubling,” “concerning,” and “demonstrate[d] a disregard for the Board’s regulatory process.” Id. at  (J.A. 483). Yet the Order failed to explain how judicial resolution of the easement’s ownership would help the Board determine whether the Board itself had been misled by Engle’s representations. Indeed, the Board failed to say anything at all about the County’s claim of misleadingness. Existing Board precedent makes clear that misleadingness is an independent basis upon which to void a notice of exemption. The Board has recognized that the “[f]ailure to disclose potential issues regarding ownership of the issue line in a notice could be found to be materially misleading by omission.” Black Hills Transp. Inc. d/b/a/ Deadwood, Black Hills & Western R.R.—Modified Rail Certificate, FD 34924, 2010 WL 302027, at  (STB served Jan. 27, 2010). Similarly, the Board has held that a party’s “failure to disclose [a] condemnation action in its notice of exemption renders the notice’s assertions regarding [] ownership of the property materially misleading by omission, rendering the notice void ab initio.” U.S. Rail Corp.—Lease & Operation Exemption—Shannon G., LLC, FD 35042, 2008 WL 4534375, at  (STB served Oct. 8, 2008). The County cited both of those cases in its petitions, and the Board’s Initial Order acknowledged that ownership of the easement was a material fact. Initial Order at  6 (J.A. 482). Yet, despite being presented with the relevant precedent and Engle’s apparently material omissions, the Board’s Initial Order provided no explanation of its denial with respect to misleadingness. An “agency’s failure to come to grips with conflicting precedent” 22 in this manner “constitutes an inexcusable departure from the essential requirement of reasoned decision making.” Jicarilla Apache Nation v. U.S. Dep’t of Interior, 613 F.3d 1112, 1120 (D.C. Cir. 2010) (internal quotation marks omitted). The Board might or might not ultimately determine that it has not been misled by Engle’s maneuvering. We do not answer that question here. But because the Board has not “articulate[d] the reasoning behind its decision with sufficient clarity to enable petitioners and this court to understand the basis for its decision,” Jost, 194 F.3d at 88, we conclude its denial of the County’s petitions was arbitrary and capricious.