Court Opinion

ID: 8943564
Source: CourtListenerOpinion
Date Created: 2022-11-27 08:09:18.509378+00
Date Added: 2024-06-11T17:09:47.573502
License: Public Domain

ANDERSON, Circuit Judge,
dissenting:
The majority opinion1 reaches its result by rejecting the agency’s interpretation of its own regulation; and adopting a definition directly inconsistent with the statute and plain intention of congress. In so doing the majority destroys the use of a railroad capital asset expressly protected by congress, and establishes precedent which could cost the railroad industry millions of dollars.
The sleeping quarters building involved in this case was a wholly incidental part of a major railroad acquisition. On March 24, 1980, the St. Louis Southwestern Railway Company (“SSW”) purchased from the Chicago, Rock Island and Pacific Railroad (“Rock Island”) the approximately 850 mile route from Tucumcari, New Mexico to St. Louis, Missouri. Included within that acquisition were the switching yards within which the sleeping quarters were situated. The building had been continuously in use as crew sleeping quarters for more than thirteen years. Some months following the change in overall ownership economy moves resulted in different sleeping accommodations at the site in question. However, only the ownernship transition date is relevant to the majority opinion.
The pertinent statute makes it unlawful “to begin construction” of certain railroad facilities after July 8, 1976 (the date of enactment). 45 U.S.C. § 62(a)(4) (emphasis added). The question is whether the “acquisition” of an existing, protected, pre1976 facility as a minor and incidental part of a major railroad asset purchase, means that the acquiring railroad has begun construction of that facility. Plain English makes a negative answer mandatory. Statutory history confirms that conclusion.
The statute controls our inquiry just as it also controls the permissible scope of regulations issued in respect of the statute. Our analysis, therefore, proceeds in that order.
A. The Statute.
In 1976 Congress enacted legislation regulating sleeping quarters provided for railroad employees. One provision prohibited any sleeping quarters within a prescribed area “where railroad switching or humping operations are performed.”2 At House Subcommittee hearings on the proposed bill, representatives of the railroad industry objected to the bill’s application to existing facilities. Federal Railroad Safety Authorization Act of 1976: Hearings on H.R. 11804 and H.R. 11837 Before the Subcomm. on Transportation and Commerce of the House Comm, on Interstate and Foreign Commerce, 94th Cong., 2d Sess. (Feb. 24-26, 1976) (Serial No. 94-61) (“Hearings”). The Missouri Pacific Railroad speaking on behalf of the Association of American Railroads (“AAR”) said that “[t]o propose legislation rendering [such existing facilities] unusable would be grossly unwarranted.” Id. at 190 (statement of John G. German, Vice President-Engineering, Missouri-Pacific System). Ac*834cording to an AAR impact survey, the sample railroads (accounting for 67.5 percent of all Class I railroad employment) maintained or used 289 facilities within one mile of switching or humping activities. Id. at 122 (statement of Thomas A. Phemister, Assistant General Solicitor, Association of American Railroads). Extrapolating from that data, the AAR concluded that the industry would incur a one-time cost for the move of $20 million and an additional annual cost of $33 million for such expenditures as transportation and more costly facilities. Id. at 122-123. Southern Railway Company reported that its own “existing investment of $1,757,600 in dormitories would be a dead loss.” Id. at 109 (statement of Harold H. Hall, Vice President-Transportation, Southern Railway Co.).
After further scrutiny by the House Committee, the original sleeping quarters provision of the bill was substantially revised and its scope narrowed; the provision reported out of the House Committee was the version ultimately enacted. The revised bill provided:
It shall be unlawful for any common carrier, its officers or agents, subject to this Act—
******
(4) to begin construction or reconstruction of any sleeping quarters referred to in paragraph (3), on or after the date of enactment of this paragraph, within or in the immediate vicinity (as determined in accordance with rules prescribed by the Secretary) of any area where railroad switching or humping operations are performed.
45 U.S.C. § 62(a)(4) (Emphasis added).
In its explanation of the bill the House Committee Report states that all sleeping quarters, both existing and future, must meet the “clean, safe, and sanitary” standard and provide an opportunity for undisturbed rest, but that the location restriction applied only to “new construction or reconstruction of old sleeping quarters.” H.R.Rep. No. 1166, 94th Cong., 2d Sess. 5 (1976) (“House Report”) (emphasis added). The House Report explicitly confirms that only new construction or reconstruction, not use, of existing facilities is forbidden.
Nothing in the statute and nothing in the legislative history even remotely suggests that existing facilities would lose their statutory exemption and suddenly become “new construction” if the ownership of a railroad passed from one railroad to another. In July 1976, when the new construction prohibition was adopted, Congress was acutely aware of the economic vicissitudes of the railroad industry and of the likelihood of future mergers, bankruptcies, and reorganizations of existing railroad companies. Only four months had passed since Conrail was formed from five northeastern railroads. In such an economic climate, a nontransferrable exemption would have been so short-lived as to be almost worthless. Yet Congress described the location restriction as applying only to “new construction or reconstruction of old sleeping quarters,” without the caveat that transfer of ownership of the facility would trigger the prohibition. House Report at 5.3
Extended discussion is unnecessary. Legislative history clearly establishes congressional intent to prevent the abrupt loss of the railroad capital assets in question, through an artificial external event such as legislation, or changes in the ownership of railroads. That intent could not have been more plainly expressed in the statute. Neither dictionary definition nor common usage of the term “construction” equates that word with “acquisition.” When the statutory qualifying words “to begin” are added to “construction” it would simply defy the English language to equate that entire phrase with the word “acquisition.” When the ownership of a railroad changes hands the execution of the documents of transfer in a corporate board room clearly does not translate into the commencement of construction of existing sleeping facili*835ties, many years old, in place, on site, and unchanged.
B. The Regulation.
The regulation upon which the majority opinion focuses provides:
(c) As used in this subpart—
(1) “Construction” shall refer to the—
(i) Creation of a new facility;
(ii) Expansion of an existing facility;
(iii) Placement of a mobile or modular facility; or
(iv) Acquisition and use of an existing building.
49 C.F.R. § 228.101(c)(iv). It is instantly apparent that the purpose of those regulations was two-fold: subsections (i) and (ii) mirrored the words “construction” and “reconstruction” in the statute; subsections (iii) and (iv) were designed to prevent circumvention of the statute by some artful device.
In defining the “acquisition and use of an existing building” as a form of “construction” for purposes of section 62(a)(4), the rulemakers were explicitly concerned with situations in which the railroad rented or purchased, directly or through an agent, “an existing structure for use as sleeping quarters.” 43 Fed.Reg. 31,008 (1978). The preamble to the final rules cites the examples of a railroad (i) acquiring ownership or control of a commercial hotel or motel for the purpose of housing employees or (ii) renting an existing building that is not a place of public accommodation. Id. The rulemakers do not explicitly address the issue of whether railroads are prohibited from acquiring or using existing, “grandfathered” sleeping quarters owned by other railroads. The majority does not so contend. Rather, it argues that the FRA was expansive in its characterization of the regulation. However, expansive but ambiguous is quite different from expansive and specific. If there is any ambiguity in this case, we are compelled to defer to the agency’s interpretation of the regulation rather than tell the agency what we think they meant by their own language.
In reviewing the construction of a statute or regulation, courts must accord “great deference” to the interpretation given a statute or regulation by the agency charged with its administration. Udall v. Tollman, 380 U.S. 1, 16-17, 85 S.Ct. 792, 801-02, 13 L.Ed.2d 616 (1965); Hoover & Bracken Energies, Inc. v. United States Department of Interior, 723 F.2d 1488, 1489 (10th Cir.1983), cert. denied, — U.S. -, 105 S.Ct. 93, 83 L.Ed.2d 39 (1984); Grynberg v. Watt, 717 F.2d 1316, 1318 (10th Cir.1983), cert denied, 466 U.S. 958, 104 S.Ct. 2169, 80 L.Ed.2d, 553 (1984). Moreover, when an agency interprets its own regulation, the level of deference is heightened even more. Id. In Udall the Supreme Court stated:
When the construction of an administrative regulation rather than a statute is in issue, deference is even more clearly in order.
“Since this involves an interpretation of an administrative regulation a court must necessarily look to the administrative construction of the regulation if the meaning of the words used is in doubt____ [Tjhe ultimate criterion is the administrative interpretation, which becomes of controlling weight unless it is plainly erroneous or inconsistent with the regulation.”
Bowles v. Seminole Rock Co., 325 U.S. 410, 413-14, 65 S.Ct. 1215, 1217, 89 L.Ed. 1700, Udall, 380 U.S. at 16-17, 85 S.Ct. at 801-02. (Emphasis Added). The “plainly erroneous or inconsistent” standard of review applies to an administrative agency’s interpretation of its own regulation, Udall, 380 U.S. at 17; Hoover & Bracken Energies, 723 F.2d at 1489, and the agency’s construction of the regulation need only be a reasonable one, Udall, 380 U.S. at 16, 85 S.Ct. at 801.
Is the regulation clear and specific as to the meaning and application of “acquisition”? Is it beyond the need for interpreta*836tion? It must not be; otherwise, it would give us the answer to the following various permutations of the majority’s interpretation of “acquisition.” Does acquisition extend to changes in ownership through corporate stock purchases? Mergers? Railroad reorganizations? Railroad joint ventures in which a separate entity is created and assets transferred for joint venture purposes? Acquisition of a fractional undivided ownership interest in railroad assets (and, if so, what percentage of new ownership must be reached, one-percent? fifty-percent? eighty-percent?)? Examples could be multiplied but the foregoing illustrate the point, which is that the regulation is not as specific as the majority views it. Interpretation is required. In this case we have the agency’s interpretation, and that interpretation is not plainly inconsistent with an ambiguous, general regulation. Therefore, we are required to defer to the agency. It is utterly anomalous to say in this case that the agency had almost plenary power to interpret the statute by regulation, but has virtually no power to interpret the regulation upon which the majority relies.
Finally, even if by some stretch of the imagination the interpretation of the regulation employed by the majority is supportable, then the regulation is invalid. A regulation thus interpreted would be so inconsistent with the plain meaning of the statute, as pointed out previously, that it could not be enforced.
Because of the narrow ground upon which the issues have been framed by the majority opinion, it is inappropriate to examine and comment upon the issues in this case which were briefed and argued by the parties on appeal. Therefore, it is impossible in this dissent to state my views as to whether or not the judgment of the district court should be affirmed, reversed, or whether some other action should be taken. I state only that it is improper to reverse on the ground stated in the majority opinion.

. As introduced, the sleeping quarters’ provision of the bill (section 4 of H.R. 11804 and section 4 of S. 3119) would have made it unlawful, under section 2(a) of the Hours of Service Act:
(3) not to provide employees with sleeping quarters, including crew quarters, camp or bunk cars, and trailers, which (A) provide employees with an opportunity for uninterrupted rest in quarters having controlled temperatures, and (B) are located away from a yard where switching or humping is performed.
H.R.Res. 11804, 94th Cong., 2d Sess. § 4 (1976); S.Res. 3119, 94th Cong., 2d Sess. § 4 (1976) (emphasis added).

. Most of the foregoing information was either extracted or quoted from the brief filed in the district court on behalf of the Federal Railroad Association. R.Vol. I, at 89.