United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 18, 2009 Decided January 22, 2010
No. 08-1190
JAMES RIFFIN,
PETITIONER
v.
SURFACE TRANSPORTATION BOARD AND UNITED STATES OF
AMERICA,
RESPONDENTS
BOARD OF COUNTY COMMISSIONERS OF ALLEGANY COUNTY,
MARYLAND, ET AL.,
INTERVENORS
On Petition for Review of an Order
of the Surface Transportation Board
James Riffin, pro se, argued the cause and filed the briefs
for petitioner.
Erik G. Light, Attorney, Surface Transportation Board,
argued the cause for respondents. With him on the brief were
Deborah A. Garza, Acting Assistant Attorney General, U.S.
Department of Justice, Robert B. Nicholson and John P.
Fonte, Attorneys, Ellen D. Hanson, General Counsel, Surface
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Transportation Board, and Craig M. Keats, Deputy General
Counsel.
Charles A. Spitulnik, W. Eric Pilsk, and Allison I. Fultz
were on the brief for intervenors Board of County
Commissioners of Allegany County, Maryland, et al. in
support of respondents.
Before: GINSBURG, HENDERSON and GARLAND, Circuit
Judges.
Opinion for the Court filed by Circuit Judge GINSBURG.
GINSBURG, Circuit Judge: The Surface Transportation
Board denied James Riffin’s petition for an order declaring
that 49 U.S.C. § 10501(b), a provision of the Interstate
Commerce Act as modified by the ICC Termination Act of
1995, preempts all state and local regulations insofar as they
affect rail lines and that the Board has exclusive jurisdiction
over Riffin’s activities at one of his properties. Because the
STB failed adequately to explain its decision, as required by
the Administrative Procedure Act, we grant Riffin’s petition
for review and remand this matter to the agency for further
proceedings.
I. Background
Riffin claimed, and the STB assumed, he owns or
controls (1) an 8.54-mile section of rail line in Allegany
County, Maryland;* and (2) a parcel of land in Cockeysville,
*
See James Riffin (Riffin I), STB Fin. Docket No. 34997, 2008 WL
1924680, 2008 STB LEXIS 242, slip op. at 3 n.9 (May 1, 2008).
Three days before oral argument of this case, the Board in a
different proceeding concluded that Riffin “does not own the line.”
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Maryland adjacent to a rail line known as the Cockeysville
Industrial Track (CIT). The two properties are about 160
miles apart. Riffin plans to use his Cockeysville property as a
maintenance-of-way facility to support the Allegany line. He
has not begun working on the Allegany line but has done
extensive work on the Cockeysville parcel.
Under 49 U.S.C. § 10501(b), “[t]he jurisdiction of the
Board over (1) transportation by rail carriers ... and (2) the
construction ... [or] operation of ... facilities ... is exclusive.”
Riffin petitioned the STB for an order declaring § 10501(b)
“completely preempts State and local regulation of
transportation by rail carrier” and the activities at
maintenance-of-way facilities “are subject to the exclusive
jurisdiction of the Board.” The STB denied Riffin’s broad
request on the ground that, although the preemptive effect of
the statute is great, “there are limits to its scope.” James
Riffin (Riffin I), STB Fin. Docket No. 34997, 2008 WL
1924680, 2008 STB LEXIS 242, slip op. at 4, 6 (May 1,
2008). Turning to Riffin’s properties in particular, the STB
concluded that, as to the Allegany line, some but not all “state
and local laws that would otherwise apply would be
preempted”; Riffin’s activities at the Cockeysville property,
however, “would not come within the Board’s jurisdiction.”
Id. at 5–6. At oral argument in this court, Riffin abandoned
his position that § 10501(b) preempts all state and local
jurisdiction, conceding that there are limits to the preemptive
effect of the statute.
James Riffin (Riffin II), STB Fin. Docket No. 35245, 2009 WL
2942969, 2009 STB LEXIS 428, slip op. at 6 (Sept. 15, 2009).
That order is not under review here, nor is it part of the record in
this case.
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II. Analysis
We review the Board’s denial of Riffin’s petition under
the APA, asking 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 City of
South Bend, IN v. STB, 566 F.3d 1166, 1169 (D.C. Cir. 2009).
Precisely how much deference we owe the decision of a
federal regulatory agency that holds against preemption of a
state or local law is an open question in this circuit. See
Albany Engineering Corp. v. FERC, 548 F.3d 1071, 1074–75
(2008) (leaving “open the question of whether or not an
agency decision that avoids preemption of a state law ... is
still deserving of Chevron deference”); cf. Wyeth v. Levine,
129 S. Ct. 1187, 1201 (2009) (quoting Geier v. American
Honda Motor Co., 529 U.S. 861, 883 (2000) (giving “some
weight” to agency’s reasoning about preemption)). We need
not resolve that question in the present case because even if
we give the Board the deference due the agency under
Chevron U.S.A. Inc. v. Natural Resources Defense Council,
Inc., 467 U.S. 837 (1984) (reviewing court should defer to an
agency’s interpretation of statute it administers), we cannot
uphold the order under review.
The STB explained its decision by reference to whether
Riffin could ship maintenance equipment between his two
properties over a rail line that he owns or operates:
The [maintenance-of-way] activities proposed
by petitioner for the Cockeysville property
would not be considered to be part of or
integral to rail transportation by a rail carrier,
and thus would not come within the Board's
jurisdiction. Petitioner's statements make clear
that he cannot operate as a rail carrier on the
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CIT. The Cockeysville property is
disconnected from any line of railroad over
which petitioner may have authority to operate
as a rail carrier. Even if petitioner were to ship
his [maintenance-of-way] equipment and
materials by rail over the CIT to a rail line that
he owns or operates, petitioner would have to
arrange transportation with another rail carrier.
In that situation, petitioner would likely be no
more than a shipper on the CIT. Accordingly,
the section 10501(b) preemption would not
apply to any of petitioner’s planned activities
at the Cockeysville property.
Riffin I, slip op. at 5–6 (citing Hi Tech Trans, LLC, STB Fin.
Docket No. 34192, 2002 WL 31595417, 2002 STB LEXIS
693, slip op. at 3–4 (Nov. 19, 2002)).
The STB did not explain why, in order for it to have
jurisdiction, Riffin must transport his maintenance-of-way
equipment by rail using tracks he owns or operates rather than
transporting the equipment by truck or as a shipper over track
he does not own or operate. At oral argument, Riffin
represented that, contrary to the STB’s unexplained
assumption, he plans to move equipment between the
Cockeysville site and the Allegany line not by rail but by
truck, following industry practice. Counsel for the STB then
argued ex tempore that moving maintenance-of-way
equipment between Cockeysville and the Allegany line by
truck is not “a reasonable, ... commercially practicable plan.”
The STB, however, did not address the commercial
practicability of trucking maintenance equipment in its
decision and hence we cannot uphold its decision upon that
basis. See SEC v. Chenery Corp., 332 U.S. 194, 196 (1947)
(“a reviewing court, in dealing with a determination or
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judgment which an administrative agency alone is authorized
to make, must judge the propriety of such action solely by the
grounds invoked by the agency”).
We agree with counsel for the STB that it “would have
been better if the Board had been clear” about its reason for
holding state and local regulation of Riffin’s properties is not
preempted by § 10501(b). The APA requires the agency to
“articulate a satisfactory explanation for its action including a
‘rational connection between the facts found and the choice
made.’” Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto.
Ins. Co., 463 U.S. 29, 42 (1983) (quoting Burlington Truck
Lines, Inc. v. United States, 371 U.S. 156, 168 (1962)).
The STB’s decision rested upon Riffin’s inability to
transport maintenance equipment over rail lines he controlled
even though he contemplated transportation by truck. The
decision of the Board offers no rationale for assuming Riffin
would transport equipment by rail or, having made that
assumption, for denying preemption on the ground that he
would not control the entirety of the rail lines over which he
would have to move equipment. If, following the lead of its
counsel, the agency intends to rest its decision upon a
standard of commercial practicability for transporting
equipment by truck, then it must state its reasons for doing so
and conduct an appropriate analysis.
III. Conclusion
We conclude the Board’s order is arbitrary and capricious
because it does not adequately explain why Riffin’s activities
at the Cockeysville property do not fall under the Board’s
jurisdiction and within the preemptive ambit of § 10501(b).
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The petition for review is therefore granted, the order of
the Board vacated, and this matter remanded to the Board for
further proceedings.
So ordered.