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United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued March 16, 2004 Decided April 6, 2004
No. 03–1212
UNITED TRANSPORTATION UNION–GENERAL COMMITTEE OF
ADJUSTMENT, (G0–386),
PETITIONER
v.
SURFACE TRANSPORTATION BOARD AND
UNITED STATES OF AMERICA,
RESPONDENTS
On Petition for Review of an Order of the
Surface Transportation Board
Gordon P. MacDougall argued the cause and filed the
briefs for petitioner.
Alice C. Saylor, Attorney, Surface Transportation Board,
argued the cause for respondent. With her on the brief were
Robert H. Pate III, Assistant Attorney General, U.S. Depart-
ment of Justice, John J. Powers III and Robert J. Wiggers,
Bills of costs must be filed within 14 days after entry of judgment.
The court looks with disfavor upon motions to file bills of costs out
of time.
2
Attorneys, Ellen D. Hanson, General Counsel, Surface Trans-
portation Board, and Craig M. Keats, Deputy General Coun-
sel.
Before: EDWARDS and HENDERSON, Circuit Judges, and
WILLIAMS, Senior Circuit Judge.
Opinion for the Court filed by Senior Circuit Judge
WILLIAMS.
WILLIAMS, Senior Circuit Judge: In the final rule at issue
here the Surface Transportation Board adopted a class ex-
emption for temporary trackage rights agreements. See
Railroad Consolidation Procedures—Exemption For Tempo-
rary Trackage Rights, 68 Fed. Reg. 28,139 (May 23, 2003)
(‘‘final rule’’), codified at 49 C.F.R. § 1180(d)(8); see also
Decision, STB Ex parte No. 282 (Sub–No. 20) (May 9, 2003).
The United Transportation Union (‘‘UTU’’) petitions for re-
view, arguing that the rule doesn’t provide the employee
protective conditions that the statute requires on discontinu-
ance of the trackage rights. Oddly, the parties seem not to
disagree on the statutory necessity of labor protections at the
time of cessation; the Board has simply tied itself in linguistic
knots on the subject and thus created the appearance—
conceivably a correct appearance—of illegality. There being
no justification for the Board’s verbal disarray, we grant the
petition for review and reverse.
***
A trackage rights agreement allows a rail carrier to use a
railroad line owned or operated by another carrier. Short-
term trackage agreements are especially useful to enable
carriers ‘‘to perform extensive maintenance over portions of
their heavily used track.’’ Decision at 2. In the final rule the
Board adopted a class exemption for temporary trackage
rights agreements, providing a streamlined means by which
carriers may obtain Board authorization for agreements that
will expire by their terms on a specified date within a year of
their start. 49 C.F.R. §§ 1180.2(d)(8), 1180.4(g)(2)(iii); see
generally 49 U.S.C. § 10502(a).
3
UTU’s petition for review argues that the final rule lacks
statutorily required employee protective conditions. Several
background points are undisputed. First, in approving a
range of railroad transactions—including a discontinuance of
service—the Board must impose conditions protecting em-
ployees ‘‘who are affected by the transaction.’’ 49 U.S.C.
§ 11326(a); see also id. § 10903(b)(2) (requiring protective
conditions on Board approval of a discontinuance of rail
transportation). The termination of a trackage rights agree-
ment is among the transactions requiring Board approval,
Thompson v. Texas Mexican Ry. Co., 328 U.S. 134, 144–45
(1946), and such discontinuance requires labor protections,
Respondent’s Br. at 6. Further, the Board may not create
exemptions that relieve rail carriers of their obligations to
protect the interests of employees. 49 U.S.C. § 10502(g);
see also McGinness v. ICC, 662 F.2d 853, 859–60 (D.C. Cir.
1981).
UTU claims that the final rule breached these obligations
by failing to impose the employee protective conditions associ-
ated with discontinuance transactions, commonly known as
the Oregon Short Line conditions, Oregon Short Line R.R.
Co.—Abandonment—Goshen, 360 I.C.C. 91 (1979). Instead,
the only protections the rule explicitly required were those
associated with a carrier’s acquisition of trackage rights, the
Norfolk & Western conditions. See Decision at 5; Norfolk &
Western Ry. Co.—Trackage Rights—Burlington Northern
Inc., 354 I.C.C. 605 (1978), modified by Mendocino Coast Ry.
Inc—Lease and Operate—California W. R.R., 360 I.C.C. 653
(1980), aff’d sub nom. Railway Labor Executives’ Ass’n v.
United States, 675 F.2d 1248 (D.C. Cir. 1982).
The Board doesn’t seriously argue that the Norfolk &
Western conditions apply to the discontinuation of a trackage
rights agreement. Indeed, the final rule itself seems to
recognize that it is Oregon Short Line benefits that are
normally imposed on discontinuance transactions. See Deci-
sion at 3–4. But, while imposing only the Norfolk & Western
conditions, the final rule also states: ‘‘All transactions under
these rules will be subject to applicable statutory labor pro-
tective conditions.’’ 49 C.F.R. § 1180.2(d)(8) (emphasis add-
4
ed). The Decision includes similar broad language: ‘‘[A]ll
transactions authorized under these rules will be subject to
labor protective conditions as specified in 49 U.S.C. § 11326.’’
Decision at 5.
Tempting as it might be to find that this language satisfied
the Board’s obligation, the Board has undercut that approach
by adopting a narrow definition of ‘‘transaction’’ for purposes
of labor protections with regard to trackage rights. In
Norfolk & Western it said, ‘‘ ‘Transaction’ means acquisition
by a railroad of trackage rights over TTT any railroad line or
lines owned or operated by any other railroad, and terminals
incidental thereto.’’ 354 I.C.C. at 610. And in Mendocino
Coast, 360 I.C.C. 653 (1980), it retained that definition ‘‘as
relates to leases and trackage rights in lieu of the general
definition imposed in Oregon III being ‘any action taken
pursuant to authorization of this Commission on which these
provisions have been imposed.’ ’’ Id. at 663. Given the
definition of ‘‘transaction’’ in this context as merely the
‘‘acquisition’’ of trackage rights, the assurance that all ‘‘trans-
actions’’ were subject to required labor protections was con-
fusing at best, doubletalk at worst.
Before us the Board crosses the border into indisputable
doubletalk, saying that there was no need to specify discon-
tinuance-type labor protections because, given that discontin-
uance authority is granted up front, ‘‘no discontinuance au-
thority is needed to end limited-term authority [and] the
discontinuance provisions of the statute are never implicated.’’
Respondent’s Br. at 13–14; but see Decision at 5 (‘‘[T]he
authority to exercise trackage rights TTT only until a particu-
lar date, implicitly includes the authority to discontinue ser-
vice on that date.’’). This is nonsense. Statutory ‘‘discontinu-
ance provisions’’ do not lose their application simply because
the Board chooses to exercise its regulatory authority for a
specific set of transactions generically and in advance. The
Board’s exercise of its authority over discontinuance via a
generic exemption necessarily triggers the Oregon Short Line
employee protective conditions as would any other Board-
approved discontinuance. See 49 U.S.C. §§ 10903(a)(1)(B),
(b)(2).
5
***
The final rule is vacated insofar as it withholds Oregon
Short Line conditions from discontinuances thereunder and is
remanded for the Board to specify their application.
So ordered.