Court Opinion

ID: 3175229
Source: CourtListenerOpinion
Date Created: 2016-02-05 20:01:43.647955+00
Date Added: 2024-06-11T14:28:33.780958
License: Public Domain

United States Court of Appeals
                       For the First Circuit

No. 15-1069

                           DIANA DEL GROSSO;
                RAY SMITH; JOSEPH HATCH; CHERYL HATCH;
          KATHLEEN KELLEY; ANDREW WILKLUND; RICHARD KOSIBA,

                            Petitioners,

                                 v.

            SURFACE TRANSPORTATION BOARD; UNITED STATES,

                            Respondents,

                  GRAFTON & UPTON RAILROAD COMPANY,

                             Intervenor.

         PETITION FOR REVIEW OF A FINAL ORDER OF THE SURFACE
                         TRANSPORTATION BOARD

                               Before

                     Torruella, Selya, and Dyk,*
                          Circuit Judges.

                       MEMORANDUM AND ORDER ON
                    PETITIONS FOR PANEL REHEARING

                          February 5, 2016

     *
      Of the Federal Circuit, sitting by designation.
          DYK, Circuit Judge.           An October 16, 2015, decision of

this   panel     vacated   a     declaratory        order     by     the   Surface

Transportation     Board    ("Board")         and    remanded        for   further

proceedings.    Del Grosso v. Surface Transp. Bd., 804 F.3d 110 (1st

Cir. 2015).    That declaratory ruling had determined that state and

local law was preempted with respect to a transloading facility in

Upton, Massachusetts.

          The     Board    and    the     United     States        ("respondents")

petitioned for panel rehearing on November 30, 2015.                 Respondents’

petition was denied on December 14, 2015.            A separate petition for

panel rehearing and rehearing en banc filed by intervenor Grafton

& Upton Railroad Company remains pending. We deny the intervenor’s

petition for panel rehearing and explain why both the respondents’

petition and the intervenor’s petition lack merit.

          Both petitions allege that the panel erred in declining

to review the Board’s order under the deferential Chevron standard.

Chevron U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837

(1984). For example, respondents argue that "[t]here is no dispute

that the term ‘transportation by rail carrier’ in [49 U.S.C.]

§ 10501(a) is ambiguous and that the definition of ‘transportation’

is an issue within the Board’s expertise.             In that situation, the

law is clear that an agency’s interpretation of the ambiguous

statutory jurisdictional term is entitled to Chevron deference."

                                        -2-
Resp’ts’ Pet. at 3 (citing City of Arlington v. FCC, 133 S. Ct.
1863, 1871 (2013)); see also Intervenor’s Pet. at 3-4.

           An agency’s expertise with respect to a statute does not

automatically require a grant of Chevron deference to the agency’s

interpretation of that statute.       See, e.g., United States v. Mead

Corp., 533 U.S. 218, 234 (2001) (no Chevron deference to Customs

classification rulings).       For Chevron deference to apply, the

interpretation must be in an area where Congress has delegated

authority to the agency.     In other words, the interpretation must

relate to the agency’s congressionally delegated administration of

the   statute,   typically   its   exercise   of   regulatory   authority.

"Chevron deference . . . is not accorded merely because the statute

is ambiguous and an administrative official is involved.          To begin

with, the rule must be promulgated pursuant to authority Congress

has delegated to the official."      Gonzales v. Oregon, 546 U.S. 243,

258 (2006) (citing Mead, 533 U.S. at 226-27).

           In Mead, the Supreme Court declined to apply Chevron

deference to certain declaratory rulings by the Customs Service,

given that "the terms of the congressional delegation give no

indication that Congress meant to delegate authority to Customs to

issue classification rulings with the force of law."            Mead, 533
U.S. at 231-32, 234.    "[Mead] requires that, for Chevron deference

to apply, the agency must have received congressional authority to

                                    -3-
determine the particular matter at issue in the particular manner

adopted."    City of Arlington, 133 S. Ct. at 1874.

            Here the Board interpreted the term "transportation" as

it appears in 49 U.S.C. § 10501(b), the preemption provision of the

Board’s authorizing statute, the Interstate Commerce Commission

Termination Act ("ICCTA").    Del Grosso, STB Docket No. FD 35652,

2014 WL 6852990, at *2 (S.T.B. Dec. 5, 2014).         As the panel’s

opinion notes, the Supreme Court’s decision in Wyeth v. Levine held

that agencies have "no special authority to pronounce on pre-

emption absent delegation by Congress."    Wyeth v. Levine, 555 U.S.
555, 576-77 (2009); see also Del Grosso, 804 F.3d at 116.      Wyeth

declined to apply Chevron deference to agency preemption decisions,

as our sister circuits have recognized. Wyeth, 555 U.S. at 576-77;

see, e.g., Seminole Tribe of Fla. v. Stranburg, 799 F.3d 1324, 1338

(11th Cir. 2015); Steel Inst. of N.Y. v. City of New York, 716 F.3d
31, 39-40 (2d Cir. 2013); In re Universal Serv. Fund Tel. Billing

Practice Litig., 619 F.3d 1188, 1200 (10th Cir. 2010); Franks Inv.

Co. v. Union Pac. R.R. Co., 593 F.3d 404, 413-14 (5th Cir. 2010);

see also Del Grosso, 804 F.3d at 116-17.

            To be sure, when an agency takes regulatory action under

an authorizing statute and preemption is a collateral consequence

of that action, there is an implicit delegation to the agency to

interpret the statute, just as in other regulatory contexts.     For

example, in Smiley v. Citibank (South Dakota), N.A., the Supreme

                                 -4-
Court extended Chevron deference to a regulation by the Comptroller

of the Currency that interpreted the term "interest," as it

appeared in a provision of the National Bank Act.            517 U.S. 735,

740, 744 (1996).      The Court noted that the regulation there was

part of a broader program of substantive interest rate and bank

regulation undertaken by the Comptroller pursuant to his delegated

authority, id. at 739, 742, and that its preemptive effect was

merely an ancillary consequence, id. at 743-44.

            But here the Board took no substantive regulatory action.

The Board undertook to preempt local regulation of the Upton

transloading facility rather than to regulate the facility itself.

Del Grosso, 804 F.3d at 115. Indeed, the Board apparently believes

that it does not possess the authority to approve or disapprove

construction of transloading facilities of this type.           Id. at 119

n.4; see also, e.g., Nicholson v. ICC, 711 F.2d 364, 368-69 (D.C.

Cir. 1983); Borough of Riverdale, 4 S.T.B. 380, 1999 WL 715272, at

*4 (1999) (declaratory order) ("Many rail construction projects are

outside of the Board's regulatory jurisdiction.               For example,

railroads do not require authority from the Board to build or

expand   facilities    such   as   truck    transfer   facilities,     weigh

stations,   or   similar   facilities      ancillary   to   their   railroad

operations . . . .").

            This is also not a situation where Congress has directly

authorized the Board to preempt state law. Del Grosso, 804 F.3d at

                                    -5-
117 n.3; see also Wyeth, 555 U.S. at 576 & n.9.                 The Board

interpreted the statutory term "transportation" in a declaratory

order   issued   under   its   ordinary   APA   powers,   not   under   the

regulatory authority it has been granted by the ICCTA. Del Grosso,
804 F.3d at 117 n.3.      The situation here is similar to that in

Mead, where the Supreme Court held that Chevron deference was not

owed to Customs declaratory rulings.       Mead, 533 U.S. at 234.

             Finally, we note that the Board does not rely here on any

rulemaking undertaken pursuant to the authority delegated to it by

the ICCTA.     See 49 U.S.C. § 1321(a).    If the Board had undertaken

a general notice and comment rulemaking to decide the scope of its

authority, a different issue would be presented.

             The intervenor’s petition for panel rehearing is DENIED.

                                   -6-