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DSSURYHWKHVDOHRIWKHUDLOOLQHDQGWKDWLWVOctober 4, 2000 ',675,&7
decision approving the sale was not erroneous to the extent 3HWLWLRQHUV
that it ordered RVI to transfer its entire fee simple interest in
the property constituting the rail line that was the subject of Y
RVI’s abandonment petition. Further, we find the STB’s
decisions to lower the salvage value of the track and materials
and to order RVI to escrow $375,000 of the sale proceeds to 685)$&( 75$163257$7,21
pay for track restorations and repairs were not arbitrary or %2$5'DQG81,7(' 67$7(6
capricious. The STB also did not err in voiding the "Grade 2) $0(5,&$
Separated Crossing Settlement Agreement" ("GSCSA") 5HVSRQGHQWV
entered into between RVI and Boardman Township and
RVI’s transfer of surface rights in 4.012 acres of the line to
the Park District. )RU WKH UHDVRQV VHW IRUWK DERYH ZH &2/80%,$1$ &2817< 3257
WKHUHIRUH$)),50WKHGHFLVLRQVRIWKH67% $87+25,7<DQG&(175$/
&2/80%,$1$
3(116U@DLOURDGV FRQVHTXHQWO\ IRXQG WKHPVHOYHV HQPHVKHG LQ OHQJWK\ negligence were preempted by federal law under 49 U.S.C.
SURFHHGLQJV´ ZKLOH DWWHPSWLQJ WR ³XQEXUGHQ WKHPVHOYHV SURPSWO\ RI
XQSURILWDEOH OLQHV´ &RQVRO 5DLO &RUS Y 67% )G '&
§ 10501(b). In that case, the plaintiffs, who operated a
&LU ³)RU PRVW RI WKLV SHULRG &RQJUHVV VHW QR WLPH OLPLW IRU
landscape nursery, alleged that they lost business and
DEDQGRQPHQW SURFHHGLQJV´ eventually were forced to close their business because their
5DLOURDG9HQWXUHVHWDO 1RV 1RV 5DLOURDG9HQWXUHVHWDO
Y6XUIDFH7UDQVS%G Y6XUIDFH7UDQVS%G
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state law so conflict that it is impossible for a party to comply DFTXLVLWLRQRIDUDLOOLQHIURPDQDEDQGRQLQJFDUULHU6HH
with both simultaneously, or where enforcement of state law +D\ILHOG155Y&KLFDJR 1:7UDQVS&R86
prevents the accomplishment of the full purposes and 7KH,QWHUVWDWH&RPPHUFH$FWZDVIXUWKHU
objectives of federal law. See Cipollone v. Liggett Group, DPHQGHGE\WKHSDVVDJHRIWKH6WDJJHUV5DLO$FWRI
Inc., 505 U.S. 504, 516 (1992); Friberg v. Kansas City S. Ry. 3XE / 1R 6WDW ZKLFK DGGHG D
Co., 267 F.3d 439, 442 (5th Cir. 2001). "If the statute IRUFHGVDOH SURYLVLRQ WR WKH IRUPHU 86&
contains an express preemption clause, the task of statutory DOORZLQJWKH,&&WRVHWWKHSULFHDQGRWKHUWHUPVRIVDOHZKHQ
construction must in the first instance focus on the plain DSDUW\WRWKHVDOHUHTXHVWHGLW,GDW ³7KHXQGHUO\LQJ
wording of the clause, which necessarily contains the best UDWLRQDOHRI UHSUHVHQWVDFRQWLQXDWLRQRI&RQJUHVV¶
evidence of Congress’ preemptive intent." CSX Transp. Inc. HIIRUWVWRDFFRPPRGDWHWKHFRQIOLFWLQJLQWHUHVWVRIUDLOURDGV
v. Easterwood, 507 U.S. 658, 664 (1993). Although there is WKDW GHVLUH WR XQEXUGHQ WKHPVHOYHV TXLFNO\ RI XQSURILWDEOH
a presumption under the Supremacy Clause that Congress did OLQHV DQG VKLSSHUV WKDW DUH GHSHQGHQW XSRQ FRQWLQXHG UDLO
not intend to preempt state law, "an assumption of nonpre- VHUYLFH´ *65RRILQJ3URGV&RY67%)G
emption is not triggered when the State regulates in an area WK&LU ³*65RRILQJ,, ³7KH6WDJJHUV5DLO$FWRI
where there has been a history of significant federal QRZ FRGLILHG DW 86& ZDV HQDFWHG WR
presence." United States v. Locke, 529 U.S. 89, 108 (2000). DGGUHVVFRQFHUQVDERXWWKHGHWHULRUDWLQJUDLOVHUYLFHSURYLGHG
RQ VRPH RI WKH VHFRQGDU\ UDLOURDG OLQHV WKURXJKRXW WKH
As set forth in 49 U.S.C. § 10501(b): FRXQWU\´ &RQVRO5DLO&RUSY,&& )G '&
&LU QRWLQJ WKDW WKH SXUSRVH RI WKH IRUFHGVDOH
(b) The jurisdiction of the Board over--
(1) transportation by rail carriers, and the remedies
provided in this part with respect to rates, classifications,
rules (including car service, interchange, and other
operating rules), practices, routes, services, and facilities
of such carriers; and
7KH REMHFWLYHV RI WKH SUHVHQW 86& WKH IRUPHU
(2) the construction, acquisition, operation, 86& DUH WR SUHVHUYH UDLO VHUYLFH IRU VKLSSHUV RYHU D OLQH WKDW
abandonment, or discontinuance of spur, industrial, team, ZRXOG RWKHUZLVH EH DEDQGRQHG ZKLOH SHUPLWWLQJ WKH RZQHU RI DQ
switching, or side tracks, or facilities, even if the tracks 6HH
XQSURILWDEOH UDLO OLQH WR VHOO LW SURPSWO\ IRU LWV IDLU PDUNHW YDOXH
are located, or intended to be located, entirely in one 5DLOURDG 7UDQVSRUWDWLRQ 3ROLF\ $FW RI +HDULQJV RQ 6 EHIRUH
WKH 6HQDWH &RPP RQ &RPPHUFH 6FLHQFH DQG 7UDQVSRUWDWLRQ 6 5HS 1R
State, is exclusive. Except as otherwise provided in this DW WK &RQJ VW 6HVV QRWLQJ WKDW WKLV VHFWLRQ
part, the remedies provided under this part with respect ³VHWV XS D SURFHGXUH ZKHUH UDLO OLQHV DSSURYHG IRU DEDQGRQPHQW PD\ EH
to regulation of rail transportation are exclusive and SXUFKDVHG RU VXEVLGL]HG LQ RUGHU WR FRQWLQXH UDLO VHUYLFH´ +5 5HS 1R
preempt the remedies provided under Federal or State DW WK &RQJ G 6HVV UHSULQWHG LQ
law. 86&&$1 DW QRWLQJ WKDW WKLV VHFWLRQ ZLOO ³DVVLVW VKLSSHUV
ZKR DUH VLQFHUHO\ LQWHUHVWHG LQ LPSURYLQJ UDLO VHUYLFH ZKLOH DW WKH VDPH
WLPH SURWHFWLQJ FDUULHUV IURP SURWUDFWHG OHJDO SURFHHGLQJV ZKLFK DUH
FDOFXODWHG PHUHO\ WR WHGLRXVO\ H[WHQG WKH DEDQGRQPHQW SURFHVV´
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SURYLVLRQLV³QRWVLPSO\WKHPDLQWHQDQFHRIUDLOOLQHVEXWWKH from its interpretation of two provisions of the OFA statute:
FRQWLQXDWLRQRIUDLOVHUYLFH´ HPSKDVLVLQRULJLQDO the common carrier obligations of § 10904(f)(4)(A) and the
STB’s authority to set the terms and conditions of a forced
$IWHUWKH,&&FHDVHGWRH[LVWHIIHFWLYH-DQXDU\ sale pursuant to § 10904(f)(1). Section 10904(f)(4)(A) bars
SXUVXDQW WR WKH Interstate Commerce Commission a purchaser of a rail line from transferring or discontinuing
Termination $FWRI 49 U.S.C. §§ 10101-16106 (1997) service during the two years after the purchase, and restricts
³WKH,&&7$´ DXWKRULW\RYHUWKHDEDQGRQPHQWRIUDLOURDG the purchaser from transferring the line to anyone but the
OLQHVSDVVHGWRWKH6XUIDFH7UDQVSRUWDWLRQ%RDUG ³WKH67%´ seller for a five-year post-sale period. Thus, the STB acted
6HH 86& *6 5RRILQJ ,, )G DW within its authority when it recognized that the GSCSA
0LG$PHULFDQ(QHUJ\&RY67% )G Q impeded a line owner’s ability to perform rail operations by
WK&LU 5/7'5\&RUSY67%)G conditioning a line owner’s full resumption of service with
WK&LU &RQVRO5DLO&RUSY67% )G the obligation to complete the projected improvements set
'& &LU QRWLQJ WKDW ³PDQ\ IXQFWLRQV RI WKH ,&& forth in the agreement. It was also reasonable for the STB to
LQFOXGLQJ DXWKRULW\ RYHU DEDQGRQPHQW SURFHHGLQJV ZHUH view the provisions of the GSCSA as an intrusion onto its
WUDQVIHUUHGWRWKH67%LQWKH'HSDUWPHQWRI7UDQVSRUWDWLRQ´ § 10904(f)(1) authority to fix the terms and conditions of an
7KH67%LVQRZWKHIHGHUDODJHQF\ZLWKH[FOXVLYHMXULVGLFWLRQ OFA sale. Noting that "section 10904 represents a clear
RYHU WUDQVSRUWDWLRQ E\ UDLOURDG )ULHQGV RI WKH $WJOHQ legislative determination that rail service should be preserved
6XVTXHKDQQD7UDLO,QFY67%)GQ G whenever there is an offeror willing to provide for continued
&LU FLWLQJ 86& D 7KXV LI D service," the STB did not act unreasonably in voiding the
UDLOURDGOLQHIDOOVZLWKLQLWVMXULVGLFWLRQWKH67%¶VDXWKRULW\ GSCSA to the extent it imposed obligations on parties other
RYHU DEDQGRQPHQW LV ERWK H[FOXVLYH DQG SOHQDU\ 6HH than Boardman Township and RVI, and to the extent it
3UHVHDXOW Y ,&& 86 FLWLQJ &KLFDJR required construction of an overpass or underpass before the
1RUWK:HVWHUQ7UDQVS&RY.DOR%ULFN 7LOH&R86
5/7'5\&RUS)GDW resumption of rail service. Because the STB has acted
rationally and in accordance with law, we therefore affirm the
,QDGGLWLRQPRVWRIWKHSURYLVLRQVRIWKHIRUPHU,QWHUVWDWH order voiding the GSCSA.
&RPPHUFH$FWZHUHUHHQDFWHGLQWKH ICCTA. 0LG$PHULFDQ
)GDWQ6SHFLILFDOO\WKH,&&7$UHFRGLILHGWKH Finally, we note that the ICCTA preempts the Ohio state
IRUPHU DV DPHQGLQJWKHVWDWXWHWROLPLWWKH statutes in question to the extent that they intrude upon the
SHULRGLQZKLFKWKH67%VHWWKHWHUPVDQGFRQGLWLRQVRIWKH jurisdiction of the STB with regard to the regulation of rail
IRUFHGVDOHWRWKLUW\GD\VDQGWKHGXUDWLRQRIDQ\VXEVLG\IRU transportation under § 10501(b). Under the Supremacy
Clause, U.S. Const. art. 6, cl. 2, federal law preempts state or
local law in various ways: (1) express preemption where the
intent of Congress to preempt state law is clear and explicit;
,Q 3UHVHDXOW Y ,&& 86 WKH &RXUW QRWHG WKDW
&RQJUHVV H[SUHVVHG FRQFHUQ DERXW ³WKH VKULQNLQJ UDLO WUDFNDJH´ 86
(2) field preemption where Congress’ regulation of a field is
DW $V QRWHG E\ -XVWLFH %UHQQDQ ³,Q WKH 1DWLRQ¶V UDLOZD\ V\VWHP
so pervasive or the federal interest is so dominant that an
UHDFKHG LWV SHDN RI PLOHV >LQ @ RQO\ DERXW PLOHV intent can be inferred for federal law to occupy the field
>ZHUH@ LQ XVH DQG H[SHUWV SUHGLFW WKDW PLOHV ZLOO EH DEDQGRQHG exclusively; and (3) conflict preemption, where federal and
HYHU\ \HDU WKURXJK WKH HQG RI WKLV FHQWXU\´ ,G
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is reactivated for rail service to submit the plans ". . . and FRQWLQXHGUDLOVHUYLFH6HH1DW¶O$VV¶QRI5HYHUVLRQDU\3URS
metes and bounds descriptions of any property to be 2ZQHUVY67%)G '&&LU (noting
appropriated for the construction of the Crossing Project that "[t]he ICCTA made some changes to the abandonment
. . . ," a later provision overrides the time period and application process, such as eliminating the processing
requires, among other things, completion of the project timetable and requiring that offers of financial assistance
and submission to [Boardman Township] of a 2-year [OFA] be filed within four months of an abandonment
maintenance bond on the improvements, before rail application, see 49 U.S.C. § 10904(c)").
service can be resumed in full.
$ UDLO FDUULHU SURYLGLQJ WUDQVSRUWDWLRQ VXEMHFW WR WKH
559HQWXUHV 2000 WL 1125904, at *2. MXULVGLFWLRQ RI WKH 67% PD\ DEDQGRQ LWV UDLOURDG OLQH RU
GLVFRQWLQXH WKH RSHUDWLRQ RI DOO UDLO WUDQVSRUWDWLRQ RYHU LWV
On appeal, Boardman Township challenges the STB’s UDLOURDGOLQHRQO\DVDXWKRUL]HGXQGHUWKHVWDWXWH 86&
decisions declaring the GSCSA void and unenforceable D 7RDEDQGRQDUDLOURDGOLQHRUGLVFRQWLQXH
against CCPA, claiming that the purpose of the GSCSA was RSHUDWLRQRIUDLOVHUYLFHRQDUDLOOLQHDUDLOFDUULHUPXVWILOH
not to interfere with rail operations, but to secure the health, DQ DSSOLFDWLRQ ZLWK WKH 67% VHHNLQJ SULRU DSSURYDO RU DQ
safety, and well-being of the residents of Boardman Township H[HPSWLRQ 86& D D $
pursuant to Ohio Rev. Code § 519.02, and to avoid the &)5 VHH )ULHQGV RI WKH $WJOHQ
imposition of liability on political subdivisions "for injury, 6XVTXHKDQQD7UDLO)GDW ³$UDLOFDUULHULQWHQGLQJ
death, or loss to persons or property caused by their failure to WRDEDQGRQDQGWREHUHOHDVHGIURPLWVREOLJDWLRQVWRUHWDLQRU
keep public roads, highways, streets, avenues, alleys, RSHUDWHDQ\SDUWRILWVUDLOURDGOLQHVPXVWILOHDQDSSOLFDWLRQ
sidewalks, bridges, aqueducts, viaducts, and public grounds WRGRVRZLWKWKH67%DQGVXFKDEDQGRQPHQWPXVWDGKHUHWR
within the political subdivisions open, in repair, and free from FHUWDLQ HVWDEOLVKHG SURFHGXUHV´ A line owner may
nuisance" under Ohio Rev. Code § 2744.02(B)(3). Boardman "abandon any part of its railroad lines," 49 U.S.C.
Township contends that the STB’s goal of continued rail § 10903(d)(1), but cannot do so without the permission of the
service, where appropriate, should not wholly displace its STB. 49 U.S.C.§ 10903(a)(1)(A); VHH .XOPHU DQG
concerns for public safety and its duty to its citizens arising 6FKXPDFKHUY67%)G WK&LU
under state law.
At the outset, we note that Boardman Township entered
3XUVXDQW WR 86& D UDLOURDGV DV FRPPRQ FDUULHUV
into the GSCSA with RVI on November 5, 1999. Because KDYH DQ REOLJDWLRQ WR SURYLGH UDLO VHUYLFH XSRQ UHDVRQDEOH UHTXHVW EXW
RVI had no legal right to transfer any property interests ³WKH FRPPRQ FDUULHU REOLJDWLRQ LV QRW DEVROXWH´ *6 5RRILQJ ,, )G
associated with the rail line after filing its abandonment DW $EDQGRQPHQW FRQVLVWV RI ³D SHUPDQHQW RU LQGHILQLWH FHVVDWLRQ RI
petition, we thereby uphold the STB’s invalidation of the UDLO VHUYLFH ZKLFK WHUPLQDWHV D UDLO FDUULHU¶V SXEOLF VHUYLFH REOLJDWLRQ´
GSCSA agreement. *LEERQV Y 8QLWHG 6WDWHV )G WK &LU "An
abandoned railroad corridor is one that is no longer used for rail service
In addition, we note that the STB acted within its authority and is removed from the national transportation system." Nat’l Ass’n of
Reversionary Prop. Owners, 158 F.3d at 137 n.1 (citing Presault, 494
by invalidating the agreement on public policy grounds. U.S. at 6 n.3). ³$ OLQH WKDW LV QR ORQJHU LQ XVH EXW KDV EHHQ RIILFLDOO\
Here, the STB’s decision to invalidate the GSCSA stemmed DEDQGRQHG PD\ EH UHDFWLYDWHG ODWHU DQG LV WHUPHG µGLVFRQWLQXHG¶´ ,G
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³5DLOFDUULHUVPXVWREWDLQ67%DXWKRUL]DWLRQWRDEDQGRQUDLO 5. The STB did not err in voiding the "Grade Separated
VHUYLFHRYHUWKHLUOLQHV´ *65RRILQJ3URGV&RY67% Crossing Settlement Agreement" ("GSCSA") entered
)G WK&LU ³*65RRILQJ,´ (WKDQ$OOHQ into between RVI and Boardman Township
,QFY0DLQH&HQW55&R)6XSS '9W
QRWLQJWKDW³WKHTXDVLSXEOLFQDWXUHRIUDLOURDGVHQWDLOV In its January 7, 2000 decision, the STB granted CCPA’s
DKLJKHUGHJUHHRISXEOLFUHVSRQVLELOLW\WKDQLVUHTXLUHGRI request to declare the GSCSA unenforceable against it,
PRVW SULYDWH FRPSDQLHV´ A rail line owner is generally finding that enforcement of the GSCSA against CCPA would
obligated to maintain a diagram of the rail system it operates, unreasonably interfere with CCPA’s purchase of the rail line
and if the owner wishes to abandon, it must "identify each and its future fulfillment of common carrier obligations. The
railroad line for which the rail carrier plans to file an STB reiterated these conclusions in its October 4, 2000
application to abandon." 49 U.S.C. § 10903(c)(2)(B). 49 decision, denying Boardman Township’s request for a stay
C.F.R. § 1152.22(a)(4) further specifies that the information pending appeal of the January 7, 2000 decision. In both
comprising the abandonment application include: decisions, the STB viewed the GSCSA as contrary to the
public interest in continued rail service. The STB’s January
[a d]etailed map of the subject line on a sheet not larger 7, 2000 decision provides a summary of the provisions of the
than 8x10 ½ inches, drawn to scale, and with the scale GSCSA:
shown thereon. The map must show, in clear relief, the
exact location of the rail line to be abandoned or over Specifically, the [GSCSA] states that "RVI or its
which service is to be discontinued and its relation to successors and assigns (hereinafter referred to as ‘Line
other rail lines in the area, highways, water routes, and Owner’) agree to undertake the necessary planning,
population centers. construction, and future maintenance of a grade separated
crossing at State Road 224 and at other such road
49 C.F.R. § 1152.22(a)(4). crossings as may be determined by [Boardman
Township] . . . ." Designating it as the "Crossing
7KH 67% DXWKRUL]HV OLQH DEDQGRQPHQWV LQ WZR ZD\V Project" the [GSCSA] requires the Line Owner, within 3
5HGPRQG,VVDTXDK5\3UHV$VV¶QY67%)G months from the date the line is reactivated for continued
Q WK &LU )LUVW WKH 67% PD\ SHUPLW WKH rail service, to prepare and submit for the approval of
DEDQGRQPHQW RI D UDLOURDG OLQH E\ D UDLO FDUULHU RU WKH [Boardman Township] and various state authorities
GLVFRQWLQXDQFHRIUDLOVHUYLFHLILWILQGVWKDWSUHVHQWRUIXWXUH detailed plans and cost estimates for the acquisition of
SXEOLFFRQYHQLHQFHDQGQHFHVVLW\VXSSRUWVVXFKDEDQGRQPHQW additional property necessary for the construction of the
RUGLVFRQWLQXDQFH 86& G 7RLPSOHPHQW new grade separated crossing, including adjustments to
WKLVVWDQGDUGWKH67%EDODQFHVWKHSRWHQWLDOKDUPWRDIIHFWHG the public highway, which will carry the rail line over or
VKLSSHUV DQG FRPPXQLWLHV DJDLQVW WKH SUHVHQW DQG IXWXUH under Route 224 and other designated road crossings.
EXUGHQ WKDW FRQWLQXHG RSHUDWLRQV ZRXOG LPSRVH RQ WKH According to the [GSCSA], the Line Owner is
UDLOURDGDQGRQLQWHUVWDWHFRPPHUFH6HH&RORUDGRY8QLWHG responsible for all the costs and expenses associated with
6WDWHV86 5HGPRQG,VVDTXDK the Crossing Project. While these specific terms state
)G DW QRWLQJ WKDW ³&RQJUHVV VRXJKW WR EDODQFH WKH that the Line Owner has 3 months from the date the line
UDLOURDG FRPSDQLHV¶ QHHG WR PDQDJH LWV WUDFNV LQ DQ
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Kovalchick contract initially and it should not be able to HFRQRPLFDOO\HIILFLHQWPDQQHUZLWKWKHSXEOLF¶VQHHGIRUD
profit from withholding information pertinent to the OFA IXQFWLRQLQJLQWHUVWDWHUDLOURDGV\VWHP´ 7KH67%PD\DOVR
process. To hold otherwise would be to reward RVI for DXWKRUL]HDQDEDQGRQPHQWE\JUDQWLQJDQH[HPSWLRQIURPWKH
undermining the integrity of the OFA process. Moreover, we FHUWLILFDWLRQSURFHVV6HH 86& D +RZHYHU
note that RVI does not contend that the Kovalchick contract RQFHDUDLOOLQHKDVEHHQSURSHUO\DEDQGRQHGWKH67%ORVHV
is unenforceable or that RVI would be able to sell the track to MXULVGLFWLRQ3UHVHDXOW 86DWQ 5/7'5\&RUS
anyone other than Kovalchick. Therefore, the STB provided )GDW &RQVRO5DLO&RUS )GDW
a reasoned explanation for revaluing the track and materials
in accordance with the terms of the Kovalchick contract. 7KH ,&&7$ SURYLGHV IRU RIIHUV RI ILQDQFLDO DVVLVWDQFH
2)$ WR DYRLG WKH DEDQGRQPHQW RI UDLO OLQHV 86&
b. Escrow of Funds for Repairs &)5 DQG IRU WKH VDOH VXEMHFW WR
FRQGLWLRQVLPSRVHGE\WKH67%RIDEDQGRQHGUDLOSURSHUWLHV
RVI also challenges the STB’s action in the October 4, WKDW DUH DSSURSULDWH IRU SXEOLF XVH 86&
2000 decision requiring CCPA to place $375,000 of the 6HFWLRQ E GLUHFWV D UDLO FDUULHU VHHNLQJ DXWKRULW\ WR
purchase price in an escrow account to ensure that RVI paid DEDQGRQ D OLQH SXUVXDQW WR 86& WR SURYLGH
for restorations to the track and signals. The STB ordered the SURPSWO\ WR D SDUW\ FRQVLGHULQJ DQ 2)$ D UHSRUW RQ WKH
creation of the escrow account because RVI had authorized SK\VLFDOFRQGLWLRQRI³WKDWSDUWRIWKHUDLOURDGOLQHLQYROYHG
state workers to pave over parts of the track and damage LQWKHSURSRVHGDEDQGRQPHQW ´WKHWUDIILFUHYHQXHDQGRWKHU
signals during its ownership of the embargoed line. RVI GDWDQHFHVVDU\WRGHWHUPLQHWKHDPRXQWRIDQQXDOILQDQFLDO
argues that the escrow order was arbitrary because it was not DVVLVWDQFHQHHGHG³WRFRQWLQXHUDLOWUDQVSRUWDWLRQRYHUWKDW
under a legal obligation to maintain the line for common SDUWRIWKHUDLOURDGOLQH ´DQGDQHVWLPDWHRIWKHPLQLPXP
carrier operations due to its embargo status at the time that SXUFKDVHSULFHUHTXLUHG³WRNHHSWKHOLQHRUDSRUWLRQRIWKH
RVI authorized the pavement of parts of the line and the OLQHLQRSHUDWLRQ´ 86& E
disconnection of signals. RVI also claims that the STB’s
escrow order was an unwarranted punitive measure. 7KH 2)$ SURYLVLRQV RI WKH VWDWXWH JXDUDQWHH DQ\
³ILQDQFLDOO\UHVSRQVLEOH´SDUW\WKHULJKWWRDFTXLUHDUDLOOLQH
RVI fails to demonstrate that the STB’s decisions in this WR SURYLGH IRU FRQWLQXHG UDLO VHUYLFH 86&
regard were arbitrary. Although RVI was not obligated to 8QGHU F DSURVSHFWLYH2)$SXUFKDVHU³PD\RIIHU
provide service on the line during the pendency of the WRVXEVLGL]HRUSXUFKDVHWKHUDLOURDGOLQHWKDWLVVXEMHFWRI´DQ
embargo, see GS Roofing I, 143 F.3d at 391, the STB acted DEDQGRQPHQWDSSOLFDWLRQ.XOPHU)GDW ³7KH
reasonably in finding that RVI had an obligation to pay for 2)$SURYLVLRQVFUHDWHDIRXUPRQWKZDLWLQJSHULRGZKHUHLQ
any damage to the line. Further, the record shows that, in a µDQ\SHUVRQPD\RIIHUWRVXEVLGL]HRUSXUFKDVHWKHUDLOURDG
series of letters from RVI Project Manager Dennis Matey to OLQH WKDW LV WKH VXEMHFW¶ RI DQ DEDQGRQPHQW DSSOLFDWLRQ
state and local officials in Ohio, RVI acknowledged that it F ´ A party must file its OFA within ten days of
would be responsible for any repair and reconnection costs. a decision from the STB granting a petition for abandonment
Considering RVI’s conduct since acquiring the rail line, the or exemption. 49 U.S.C. § 10904(c); 49 C.F.R.
STB, quite wisely, required an escrow of funds to repair the § 1152.27(c)(1)(i)(B). After a prospective purchaser has
damage to the track done with RVI’s authorization. "offered financial assistance regarding that part of the railroad
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line to be abandoned or over which rail transportation is to be 7KH67%¶VGHFLVLRQVWRORZHUWKHVDOYDJHYDOXHRIWKH
discontinued," 49 U.S.C. § 10904(d)(1) obligates the STB to WUDFN DQG PDWHULDOV DQG WR RUGHU 59, WR HVFURZ
decide if the prospective purchaser is "financially RI WKH VDOH SURFHHGV WR SD\ IRU WUDFN
responsible." 8QGHU 86& D D ³ILQDQFLDOO\ UHVWRUDWLRQV DQG UHSDLUV ZHUH QRW DUELWUDU\ RU
UHVSRQVLEOHSHUVRQ´LVGHILQHGWREH FDSULFLRXV
DSHUVRQZKR± D 'RZQZDUG5HYDOXDWLRQRI7UDFNDQG0DWHULDOV
LV FDSDEOH RI SD\LQJ WKH FRQVWLWXWLRQDO PLQLPXP 59, FKDOOHQJHV WZR RWKHU DFWLRQV RI WKH 67% LQ LWV
YDOXHRIWKHUDLOURDGOLQHSURSRVHGWREHDFTXLUHG DQG 2FWREHUGHFLVLRQ)LUVW59,FRQWHQGVWKDWWKH67%
DFWHGDUELWUDULO\E\UHYDOXLQJWKHWUDFNDQGPDWHULDOV,QLWV
LVDEOHWRDVVXUHWKDWDGHTXDWHWUDQVSRUWDWLRQZLOOEH -DQXDU\ GHFLVLRQ WKH 67% EDVHG LWV LQLWLDO WUDFN
SURYLGHGRYHUVXFKOLQHIRUDSHULRGRIQRWOHVVWKDQ YDOXDWLRQRQDILUPRIIHUIURP$ .5DLOURDG0DWHULDOV,QF
\HDUV WREX\DQGUHPRYHWKHWUDFNIRU7KH67%UHGXFHG
WKLVDPRXQWE\WRUHIOHFWQHHGHGUHVWRUDWLRQVLQJUDGH
86& D If a party files a timely OFA, and the FURVVLQJV DUULYLQJ DW D QHW VDOYDJH YDOXH RI
STB finds that the party is "financially responsible," then the 6HYHUDOPRQWKVODWHUWKH67%UHYLVLWHGLWVWUDFNDQGPDWHULDOV
STB must postpone the abandonment of the line. 49 U.S.C. YDOXDWLRQ DIWHU UHFHLYLQJ QHZ HYLGHQFH IURP &&3$
§ 10904(d)(2). %HWZHHQWKH-DQXDU\DQG2FWREHUGHFLVLRQV&&3$
VXEPLWWHGHYLGHQFHRI59,¶V FRQWUDFWVHOOLQJWKHWUDFN
Postponement of abandonment remains in effect until the VDOYDJHULJKWVWR.RYDOFKLFNIRU7KH67%GHFLGHG
line owner and the prospective OFA purchaser (offeror) have WKDWWKH VDOHQXOOLILHGVXEVHTXHQWILUPSXUFKDVHRIIHUV
come to an agreement on the terms of sale, or until the STB DQGWKDWWKHYDOXHRIWKHWUDFNFRXOGQRWH[FHHGWKHDPRXQW
sets the terms of sale upon the request of either the line owner 59,KDGUHFHLYHGDFFRUGLQJWRFRQWUDFW
or purchaser. 49 U.S.C. § 10904(d)(2)-(f).Pursuant to 49
C.F.R. § 1152.27(h)(3), "[t]he offeror has the burden of proof &RQWUDU\WR59,¶VFRQWHQWLRQWKH67%¶VGHFLVLRQWRUHGXFH
as to all issues in dispute." See Iowa Terminal Ry. Co. v. WKHVDOYDJHYDOXHZDVQRWDUELWUDU\RUFDSULFLRXV$OWKRXJK
ICC, 853 F.2d 965, 969 (D.C. Cir. 1988) (noting that the 59,PDLQWDLQVWKDWWKH67%DFWHGDUELWUDULO\LQOLPLWLQJWKH
buyer "must present sufficient evidence of the line’s value to WUDFNVDOYDJHYDOXHWRWKHDPRXQWUHFHLYHGIURPWKH
meet that burden"). When setting the terms and conditions of .RYDOFKLFNFRQWUDFW because the contract with Kovalchick did
a sale of a rail line, the STB cannot set a price lower than the not concern the fair market value of the track in 2000, and
"fair market value of the line." 49 U.S.C. § 10904(f)(1)(B). because the contract with Kovalchick included a deeply
Under § 10907(b)(2), the "constitutional minimum value of discounted salvage value based on the STB’s future
a particular railroad line shall be presumed to be not less than abandonment authorization, the STB properly points out that
the net liquidation value of such line or the going concern RVI would not have been able to sell the track for any more
value of such line, whichever is greater." 49 U.S.C. than it had received in 1996. Further, the STB justifies its
§ 10907(b)(2); 49 C.F.R. § 1152.27(h)(6); GS Roofing II, 262 track revaluation, as stated in the October 4, 2000 decision, on
F.3d at 771 (noting that "Congress authorized the Board, the ground that RVI failed to come forward with the
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assembled corridor." 559HQWXUHV:/DW under particular circumstances, to force the sale of a railroad
6HH3RUWODQG7UDFWLRQ&R±$EDQGRQPHQW([HPSWLRQ± line at its ‘constitutional minimum value’ to a ‘financially
LQ 0XOWQRPDK &ODFNPDV &RXQWLHV 'RFNHW 1R $% responsible person’").
6XE1R; :/DW
'HFLGHG-DQ
DFFHSWLQJFRUULGRUYDOXDWLRQRQWKHEDVLVRIDQH[HFXWHGVDOHV 49 U.S.C. § 10904(f)(2) gives an offeror ten days in which
FRQWUDFW to withdraw the offer to purchase a rail line following a
decision of the STB setting the terms of the sale. See also 49
,QGHFLGLQJWKHYDOXDWLRQLVVXHZHDUHFRQVWUDLQHGE\WKH C.F.R. § 1152.27(h)(7). By statute, only the offeror is
QDUURZ VWDQGDUG RI UHYLHZ DSSOLFDEOH WR DJHQF\ GHFLVLRQV authorized to withdraw from the terms of a STB-directed sale.
ZKLFKJHQHUDOO\UHTXLUHVDIILUPDQFHRIWKH67%¶VYDOXDWLRQ 49 U.S.C. § 10904(f)(2). Without a withdrawal by the offeror
GHFLVLRQV$VQRWHGLQ,RZD7HUPLQDO within the ten-day period, the STB’s decision becomes
binding on both parties. 49 U.S.C. § 10904(f)(2);.XOPHU
,QFRQVLGHULQJHDFKHOHPHQWRIWKHYDOXDWLRQRUGHUZH )GDW ³,IWKH67%ILQGVWKDWDQRIIHUPHHWVFHUWDLQ
DUHPLQGIXOWKDWWKH>67%¶V@GHFLVLRQ³PXVWEHXSKHOGLI FULWHULDWKHUDLOURDGLVIRUFHGWRVHOOWKHOLQHWRWKHRIIHURU
EDVHGRQWKHUHFRUGEHIRUHLWWKH>67%¶V@GHFLVLRQLVQRW DFFRUGLQJ WR WKH WHUPV QHJRWLDWHG E\ WKH SDUWLHV RU ZKHQ
DUELWUDU\RUFDSULFLRXV´,OOLQRLV&HQW*XOI55&RY QHFHVVDU\WHUPVLPSRVHGE\WKH67%´ 2QFHWKHUDLOOLQH
,&&)G WK&LU :KLOHZHPD\ KDVEHHQDFTXLUHGWKHSXUFKDVHUPD\QRWGLVFRQWLQXHVHUYLFH
QRWVXEVWLWXWHRXUMXGJPHQWIRUWKDWRIWKHDJHQF\ZH IRU DW OHDVW WZR \HDUV 86& I $ Nat’l
PXVW QHYHUWKHOHVV VDWLVI\ RXUVHOYHV WKDW WKH >67%@ Ass’n of Reversionary Prop. Owners, 158 F.3d at 138 n.4
FRQVLGHUHGDOOUHOHYDQWIDFWRUVDQGSURYLGHGDUHDVRQHG (noting that abandonment authorization in accordance with
H[SODQDWLRQIRULWVGHFLVLRQ the exemption procedures under § 10502 is available "when
,RZD7HUPLQDO)GDW FLWLQJ0RWRU9HKLFOH0IUV no local traffic has run on the line in at least two years").
$VV¶Q 86 DW $SSO\LQJ WKLV QDUURZ VWDQGDUG RI %6WDWHPHQWRI)DFWV
UHYLHZZHILQGWKDWWKH67%GLGQRWDFWLQDQDUELWUDU\RU
FDSULFLRXVIDVKLRQE\UHIXVLQJWRFUHGLWDOORI59,¶VFRUULGRU 7KHVHFRQVROLGDWHGFDVHVLQYROYHDPLOHUDLOURDGOLQH
YDOXDWLRQHYLGHQFH$VWKH67%SRLQWVRXWLQLWVDUJXPHQWV UXQQLQJIURP,@Q WKH DEVHQFH RI D KLJKHU JRLQJ FRQFHUQ YDOXH IRU
$V WKH 67% H[SODLQHG
FRQWLQXHG UDLO XVH WKH SURSHU YDOXDWLRQ VWDQGDUG LQ ,I WKH DEDQGRQPHQW RI WKH OLQH LV ZDUUDQWHG E\ LWV HFRQRPLFV
SURFHHGLQJVIRURIIHUVWRSXUFKDVHXQGHUVHFWLRQ WKLV FRXOG ZHOO EH DQ DFFHSWDEOH DSSURDFK IRU UHVROYLQJ WKH
LV WKH >QHW OLTXLGDWLRQ YDOXH@ RI WKH UDLO SURSHUWLHV IRU VHUYLFH LVVXHV VXUURXQGLQJ 59,¶V DFTXLVLWLRQ RI WKLV OLQH DQG
WKHLUKLJKHVWDQGEHVWQRQUDLOXVH>1HWOLTXLGDWLRQYDOXH@ FRXOG DFFRPPRGDWH DQ\ LQWHUHVW LQ FRQWLQXHG UDLO VHUYLFH RYHU
LQFOXGHVWKHYDOXHRIWKHUHDOHVWDWHSOXVWKH>QHWVDOYDJH WKH OLQH 7KH FODVV H[HPSWLRQ SURFHGXUH KRZHYHU GRHV QRW
YDOXH@RIWKHWUDFNDQGPDWHULDOV SURYLGH WKH LQIRUPDWLRQ WKDW WKH %RDUG QHHGV WR PDNH WKLV
GHWHUPLQDWLRQ EHFDXVH LW GRHV QRW SURYLGH IRU D SURMHFWLRQ RI WKH
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2Q0D\ 59,VXEPLWWHGDQRWKHUDSSOLFDWLRQWRWKH County of Allegheny, 74 Pa. Cmwlth. 85, 90, 459 A.2d 1298,
67%IRUH[HPSWLRQIURPFHUWDLQUHJXODWLRQVSXUVXDQWWR 1300 (1983) ("Black’s Law Dictionary defines a fee simple
86& DQG IRU DXWKRULW\ WR DEDQGRQ WKH UDLO OLQH estate as ‘one in which the owner is entitled to the entire
SXUVXDQWWR 86& D ,QLWVSHWLWLRQ59,VWDWHG property, with unconditional power of disposition during his
WKDWWKHOLQHKDGEHHQRXWRIVHUYLFHIRUWZR\HDUVGXHWRWKH life, and descending to his heirs and legal representatives
ZDVKRXW DQG DQ HPEDUJR 59,¶V SHWLWLRQ DOVR LQFOXGHG D upon his death intestate.’").
YHULILHG VWDWHPHQW RI 'DYLG +DQGHO 59,¶V SUHVLGHQW ZKR
VWDWHGWKDW59,¶VULJKWRIZD\H[WHQGHGIURPPLOHSRVWWR Moreover, contrary to RVI’s contention, there was no
PLOHSRVWFRQVLVWLQJRIDFUHVDQGWKDWLWVQHW unconstitutional taking in this case. See U.S. Const. amend
OLTXLGDWLRQYDOXHRIPLOOLRQZDVEDVHGXSRQDIXOOIHH V ("[N]or shall private property be taken for public use,
LQWHUHVWLQWKHSURSHUW\ without just compensation."); In re Chicago, Milwaukee, St.
Paul and Pacific Ry. Co., 799 F.2d 317, 324 (7th Cir. 1986).
&&3$ WKHQ UHOLHG XSRQ +DQGHO¶V GHVFULSWLRQ RI WKH As set forth in 49 U.S.C. § 10907(b)(1), Congress authorized
SURSHUW\DQGKLVYDOXDWLRQRIWKHIXOOIHHLQWHUHVWLQWKHUDLO the STB to force the sale of a railroad line at its
OLQHZKHQLWSUHSDUHGLWVHVWLPDWHRIWKHSXUFKDVHSULFHGXULQJ "constitutional minimum value" to "a financially responsible
WKH2)$SURFHVV2Q$XJXVW &&3$LQYRNLQJWKH person." GS Roofing II, 262 F.3d at 771. 7KDW LV ZKDW
2)$SURFHGXUHVVHWIRUWKLQ 86& DQG &)5 RFFXUUHGKHUH6HH8QLWHG6WDWHVY$FUHVRI/DQG
D UHTXHVWHG ILQDQFLDO GDWD DQG LQIRUPDWLRQ IURP 86Q QRWLQJWKDWWKHFRQVWLWXWLRQDOPHDVXUH
59,FRQFHUQLQJDQHVWLPDWHRIWKHPLQLPXPSXUFKDVHSULFH RIMXVWFRPSHQVDWLRQLVZKDWDZLOOLQJEX\HUZRXOGSD\LQ
UHTXLUHG WR NHHS WKH OLQH LQ RSHUDWLRQ WKH HVWLPDWHG QHW FDVKWRDZLOOLQJVHOOHU TXRWLQJ8QLWHG6WDWHVY0LOOHU
OLTXLGDWLRQYDOXHRIWKHOLQHDQGGRFXPHQWDWLRQVKRZLQJWKDW 86
59,KDGPDUNHWDEOHWLWOHWRWKHODQGAlthough RVI provided
some of the information on August 10, 1999, it advised Finally, although it appears that the STB approved certain
CCPA to arrange for copying the valuation maps and deeds transactions by RVI with third parties after RVI filed its
for the line at RVI’s offices. However, when CCPA arranged abandonment petition, we note that these transactions are not
for its retained appraiser, Mr. John Rossi of Real Estate being challenged on appeal. Specifically, CCPA, as an
Appraisal Associates, to visit RVI’s business office, he was intervening party in these proceedings pursuant to Rule 15(d)
of the Federal Rules of Appellate Procedure, has not appealed
from the STB’s orders and has requested affirmance of its
decisions. Because CCPA has not challenged the STB’s
LV UHTXLUHG IRU WKH %RDUG WR PDNH DQ LQIRUPHG GHFLVLRQ RQ approval of RVI’s conveyance of certain property interests
ZKHWKHU WR DSSURYH WKH DEDQGRQPHQW RI WKLV OLQH RI UDLOURDG DQG associated with the rail line after RVI filed its abandonment
IRU RWKHU SDUWLHV ZKR PLJKW EH LQWHUHVWHG LQ SXUFKDVLQJ WKH OLQH petition, it is therefore unnecessary to remand for further
XQGHU VHFWLRQ WR UHVWRUH VHUYLFH proceedings since CCPA is not seeking to acquire those
R.R. Ventures, Inc. Abandonment Exemption Between Youngstown, property interests not conveyed to it. See Platte River
OH, and Darlington, PA, in Mahoning and Columbiana Counties, OH, Whooping Crane Critical Habitat Maintenance Trust v.
and Beaver County, PA, STB Docket No. AB-556 (Sub-No. 1X), 1999 FERC, 962 F.2d 27, 37 n.4 (D.C.Cir.1992) (refusing to reach
WL 23286, at *2 (Service Date Jan. 22, 1999).
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Notwithstanding, RVI argues that it should not be required denied access by RVI to the relevant valuation maps and
to convey a fee simple interest in the rail line because the deeds.
STB in its January 7, 2000 decision only required it to
transfer "all property by quit claim deed." As RVI notes, a On September 2, 1999, the STB granted RVI’s petition for
"quit-claim deed transfers only those rights which a grantor exemption pursuant to 49 U.S.C. § 10502, stating that any
has at the time of the conveyance." Finomore v. Epstein, 18 party interested in purchasing the line for continued rail
Ohio App.3d 88, 89, 481 N.E.2d 1193, 1196 (Ohio App. service could submit an offer of financial assistance ("OFA"),
1984) (citing Jonke v. Rubin, 170 Ohio St. 41, 41, 162 N.E.2d pursuant to 49 U.S.C. § 10904 and 49 C.F.R. § 1152.27(c)(1),
116, 116 (1959)); Greek Catholic Congregation of Borough by September 13, 1999. See R.R. Ventures, Inc.
of Olyphant v. Plummer, 338 Pa. 373, 377, 12 A.2d 435, 437 Abandonment Exemption Between Youngstown, OH, and
(Pa. 1940). At the time of the conveyance in these cases, RVI Darlington, PA, in Mahoning and Columbiana Counties, OH,
was required to transfer a full fee interest in the property. and Beaver County, PA, STB Docket No. AB-556 (Sub-No.
Thus, the STB’s order directing RVI to transfer "all property 2X), 1999 WL 714565 (Service Date Sept. 3, 1999). In the
by quit-claim deed" was tantamount to ordering it to transfer absence of an OFA, the exemption became effective October
a fee simple interest in the property associated with the rail 3, 1999, allowing RVI to salvage track, ties, and other
line. railroad appurtenances, and to dispose of the right-of-way.
In addition, because CCPA acquired a fee simple interest in On September 3, 1999, one day after the STB granted
the rail line, RVI was required to transfer all its property RVI’s exemption petition, CCPA formally notified RVI and
interests associated with the rail line. Under Ohio law, a fee the STB that it was considering an OFA to purchase the line
simple is the highest right, title and interest that one can have for rail service. CCPA also petitioned the STB to toll the
in land; it is the full and absolute estate in all that can be period for submitting an OFA until 30 days after RVI had
granted. Masheter v. Diver, 20 Ohio St.2d 74, 78, 253 N.E.2d supplied all requested documents and information.
780, 782 (1969); see also 20 Ohio Jurisprudence 2d 237,
Estates, Section 8 ("An estate in fee simple is the entire
interest and property in the land."); Muirfield Ass’n, Inc. v.
Franklin County Bd. of Revision, 73 Ohio St.3d 710, 711, 654
6XEVHTXHQWO\ &&3$ DOVR VRXJKW WR DFTXLUH D UDLOURDG OLQH EHWZHHQ
N.E.2d 110, 111 (1995) (defining "fee simple" as "[a]bsolute 6WUXWKHUV DQG @ RU XQVXSSRUWHG E\
has not conducted any further negotiations with RVI" after VXEVWDQWLDO HYLGHQFH´ 86& $ ( )LOP
RVI submitted a proposal to it on behalf of VPB. 7UDQVLW,QFY,&& )G WK&LU ,Q
GHWHUPLQLQJZKHWKHUDGHFLVLRQE\WKH67%ZDVDUELWUDU\RU
CCPA also petitioned the STB on May 19, 2000 to reopen FDSULFLRXV WKLV &RXUW PXVW FRQVLGHU ZKHWKHU WKHUH ZDV D
the proceedings based on new evidence, having just learned ³UDWLRQDOFRQQHFWLRQEHWZHHQWKHIDFWVIRXQGDQGWKHFKRLFH
that RVI’s former president Ron Hall had previously PDGH´,G$GHFLVLRQLVQRWDUELWUDU\RUFDSULFLRXVZKHQLW
contracted on November 15, 1996 to sell the salvage right to LVSRVVLEOHWRRIIHUDUHDVRQHGHYLGHQFHEDVHGH[SODQDWLRQIRU
the line’s track and track materials to Kovalchick Corporation D SDUWLFXODU RXWFRPH 0RWRU 9HKLFOH 0IUV $VV¶Q Y 6WDWH
("Kovalchick") for $400,000. The agreement conditioned )DUP0XW$XWR,QV&R86 3HUU\Y
Kovalchick’s right to remove track upon RVI’s obtaining 8QLWHG)RRG &RPP:RUNHUV'LVW8QLRQV
abandonment or exemption authority from the STB. In its )G WK&LU ,QGHWHUPLQLQJZKHWKHUWKH
response to the STB, RVI admitted the sale of the salvage 67%¶V ILQGLQJV DUH VXSSRUWHG E\ VXEVWDQWLDO HYLGHQFH WKLV
rights to Kovalchick, but contended that the sale was &RXUWH[DPLQHVZKHWKHUWKH67%FRQVLGHUHG³VXFKUHOHYDQW
conditional and subject to the STB’s abandonment authority. HYLGHQFHDVDUHDVRQDEOHPLQGPLJKWDFFHSWDVDGHTXDWHWR
VXSSRUWWKHFRQFOXVLRQUHDFKHG´53&DUERQH&RQVWU&R
On October 4, 2000, the STB issued its decision regarding Y2FFXSDWLRQDO6DIHW\ +HDOWK5HYLHZ&RPP¶Q)G
its show cause order and resolved various issues that had WK&LU
arisen since the January 7, 2000 decision setting the terms of
the sale. The STB first rejected RVI’s argument that, %$QDO\VLV
pursuant to 49 U.S.C. § 10904(f)(1), it was only obligated to
convey an easement for railroad purposes and rail materials. 7KH67%KDGMXULVGLFWLRQWRDSSURYHWKHVDOHRIWKH
The STB stated: UDLOOLQH
2Q DSSHDO 59, ILUVW FRQWHQGV WKDW WKH 67% ODFNHG
Where (as here) the offeror does not seek to purchase less MXULVGLFWLRQWRIRUFHWKHVDOHRIWKHOLQHDIWHUWKH-DQXDU\
than the entire property, we believe that it is reasonable DQG 2FWREHU GHFLVLRQV EHFDXVH CCPA never
to assume that the entire property is needed for effective properly accepted the STB’s terms of sale. Accordingly, RVI
transportation services. After all, that is the property the urges us to vacate the STB’s March 3, 2000 and November 2,
selling/abandoning carrier (or its predecessor) assembled 2000 decisions, in which the STB determined that CCPA had
for, and dedicated to, rail service.
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of RVI and VPB’s remaining rights in the rail line. R.R. R.R. Ventures, Inc. Abandonment Exemption Between
Ventures, Inc. Abandonment Exemption Between Youngstown, OH, and Darlington, PA, in Mahoning and
Youngstown, OH, and Darlington, PA, in Mahoning and Columbiana Counties, OH, and Beaver County, PA, STB
Columbiana Counties, OH, and Beaver County, PA, STB Docket No. AB-556 (Sub-No. 2X), 2000 WL 1470451, at *6
Docket No. AB-556 (Sub-No. 2X), 2001 WL 1396719, at * (Service Date Oct. 4, 2000). In reaching this conclusion, the
4 (Service Date Nov. 9, 2001). In view of RVI’s interference STB imposed a "heavy burden" on the abandoning carrier to
with the administration of the escrow fund, WKH67%IXUWKHU rebut the presumption that all the property was necessary for
GLUHFWHG&&3$³WRPDQDJHWKHIXQGVGLUHFWO\´DQG³FRPSOHWH effective rail operations. The STB concluded that RVI failed
DOOUHSDLUVIRUZKLFKWKHHVFURZIXQGVDUHWREHXVHGZLWKLQ to sustain this burden, finding that RVI’s "assurance" that the
GD\VIURPWKHHIIHFWLYHGDWHRIWKLVGHFLVLRQ´,GDW
property interests that it intended to convey to CCPA would
be sufficient to operate the rail line was "entitled to little, if
,,',6&866,21 any, weight, considering that RVI has not had any experience
operating this, or any other, rail line." Id. The STB further
$6WDQGDUGRI5HYLHZ reasoned that dividing the surface rights from other property
When asked to review a decision of an administrative rights in the land would be "impractical and unworkable" and
agency, this Court employs a narrow standard of review. See "could create constant tension between the owner of the rail
Simms v. Nat’l Traffic Safety Admin., 45 F.3d 999, 1003 (6th line (here, RVI’s affiliate VPB) or other easement holders . . .
Cir. 1995). )LUVWWKLV&RXUW³PXVWJLYHFRQVLGHUDEOHZHLJKW and the holder of surface rights to conduct rail operations
DQGGXHGHIHUHQFHWRWKH>67%¶V@LQWHUSUHWDWLRQRIWKHVWDWXWHV (here, CCPA)." Id. Although RVI claimed that there would
LW DGPLQLVWHUV XQOHVV LWV VWDWXWRU\ FRQVWUXFWLRQ LV SODLQO\ be no problems between a railroad with surface rights and
XQUHDVRQDEOH´5/7'5\&RUS)GDW TXRWLQJ other parties with subsurface or aerial rights, the STB was
%URWKHUKRRGRI/RFRPRWLYH(QJ¶UVY,&& )G not persuaded, however, that there can be any assurance
WK&LU VHHJHQHUDOO\&KHYURQ86$,QFY1DWXUDO that rail operations will be unhampered unless the offeror
5HVRXUFHV 'HIHQVH &RXQFLO 86
KROGLQJWKDWUHYLHZLQJFRXUWPXVWRQO\DVNZKHWKHUDJHQF\ (who will be responsible for ensuring that rail service is
DFWLRQ³LVEDVHGRQDSHUPLVVLEOHFRQVWUXFWLRQRIWKHVWDWXWH´ provided) possesses sufficient property rights to
³:KLOHDQDJHQF\¶VLQWHUSUHWDWLRQRIDVWDWXWHLVHQWLWOHGWR determine unimpeded who may enter the right-of-way at
GHIHUHQFHµIHGHUDOFRXUWVEHDUWKHXOWLPDWHUHVSRQVLELOLW\IRU what times and under what circumstances, as well as
LQWHUSUHWLQJ IHGHUDO VWDWXWHV¶´ &URXQVH &RUS Y ,&& whether any underground or additional overhead cables
)G WK&LU TXRWLQJ0HDGH7RZQVKLSY or similar structures would interfere with its own rail use
$QGUXV )G WK&LU :HDOVRQRWHWKDW of the right-of-way.
³>D@QDJHQF\¶VLQWHUSUHWDWLRQRILWVRZQUHJXODWLRQ>V@PHULW>@
HYHQ JUHDWHU GHIHUHQFH WKDQ LWV LQWHUSUHWDWLRQ RI WKH VWDWXWH Id. Accordingly, the STB ordered RVI to include in the
WKDWLWDGPLQLVWHUV´%XIIDOR&UXVKHG6WRQH,QFY67% conveyance to CCPA "all property in the right-of-way,
)G '&&LU +RZHYHUDUHJXODWLRQIURP including the subsurface and air rights, all real estate and
WKH DJHQF\ FKDUJHG ZLWK LPSOHPHQWLQJ WKH VWDWXWH FDQQRW track, and all other rail materials." Id. at *12.
VWDQGLILWLV³DUELWUDU\FDSULFLRXVRUPDQLIHVWO\FRQWUDU\WR
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The STB also voided RVI’s transfers of subsurface and continued rail service." Id. at *2. The STB also rejected a
aerial rights to its affiliate, VPB, and the sale of 4.012 acres request from RVI to include language in the bill of sale
to the Park District. Citing Kalo Brick, 450 U.S. at 320, the conditioning the sale on CCPA’s assumption of liability for
STB held that these transfers violated the STB’s "continuing repair of track fixtures, concluding that this language
and exclusive regulatory jurisdiction over the rail line prior to contravened the STB’s order creating an escrow account for
its abandonment." Id. at *7. According to the STB, RVI’s RVI’s payment of track repairs and restoration. Id. at * 3.
attempted conveyances after the commencement of the OFA However, the STB granted a request from RVI to include
process amounted to "a blatant effort to strip away as much of language in the instruments of conveyance indicating that the
the property as possible to avoid including those portions of transfer to CCPA was subject to future orders and decisions
the property in the OFA sale." Id. The STB further viewed of the STB and this Court.
the transfers as "undermin[ing] the OFA sale by jeopardizing
CCPA’s ability to provide effective, uninterrupted rail CCPA then moved this Court for an injunctive order
service." Id. Based upon the need "to protect the integrity of compelling RVI to comply with the STB’s decisions and
the OFA process," the STB, relying upon its inherent enjoining RVI from collaterally attacking the STB’s decision.
regulatory authority, reaffirmed its order directing that "RVI In an order issued on January 5, 2001, a panel of this Court
sell to CCPA all of the interests that it acquired in this rail partially granted CCPA’s motion, directing RVI to comply
line with the exception of the licenses and crossings to which with the October 4, 2000 and December 7, 2000 decisions of
CCPA has acquiesced by reducing its assessment of the the STB requiring the transfer of the rail line to CCPA. This
valuation of the line . . . ." Id. Court remanded the matter to STB "for the limited purpose of
specifying the form of the deed and bill of sale to be utilized
The STB also addressed evidence of RVI’s 1996 sale of the for the transfer and scheduling a new date for the closing."
track salvage rights to Kovalchick. While CCPA Pursuant to this Court’s January 5, 2001 order, the STB
characterized the Kovalchick sale as evincing RVI’s clear issued a decision on January 17, 2001, rejecting the proposed
lack of intention to operate the line and requested revocation deeds proffered by RVI, directing the parties to use the
of the abandonment exemption on this ground, the STB proposed deeds proffered by CCPA, as well as its proposed
declined to revoke the exemption, but instead decided to bill of sale, and setting a closing date of January 23, 2001.
revalue the track and materials in light of the evidence of the R.R. Ventures, Inc. Abandonment Exemption Between
sale to Kovalchick. Specifically, the STB explained that RVI Youngstown, OH, and Darlington, PA, in Mahoning and
had withheld information about the Kovalchick sale during its Columbiana Counties, OH, and Beaver County, PA, STB
earlier valuation of the line, "render[ing] meaningless the later Docket No. AB-556 (Sub-No. 2X), 2001 WL 41202, at *2-3
offer upon which [the] STB had relied." The STB determined (Service Date Jan. 17, 2001).
that the net salvage value for the track should be reduced to
the $400,000 that Kovalchick had paid for the right to salvage Thereafter, in May of 2001, CCPA filed a request with the
the materials in the future. Id. at *8-9. STB seeking clarification of the assets to be transferred to it
and the establishment of a procedure for disbursing the funds
The STB also refused RVI’s request that the STB reopen from the escrow account to pay for repairs to the line. In a
the line valuation to consider evidence of the line as an decision on November 9, 2001, the STB clarified the extent
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FRUULGRU 7KH 67% H[SODLQHG WKDW LW KDG FUHGLWHG DOO WKH assembled corridor, except for in one limited area, adjusting
³FRQYLQFLQJHYLGHQFH´RIDVVHPEOHGFRUULGRUYDOXHOLPLWHG the value of the land upward somewhat to reflect timely
WR WKH FRQWUDFW IRU VDOH RI DFUHV RI ODQG WR %RDUGPDQ evidence of a contingent sale of 20.6 acres to the Park District
7RZQVKLSDQGWKHHDUOLHUVDOHRIDQDHULDOHDVHPHQWWR2KLR for a 4.2 mile bicycle trail, for which RVI had earlier
(GLVRQ&RPSDQ\7KH67%UHIXVHGWRFUHGLWRWKHUFRUULGRU submitted a signed contract. Because RVI had a contract to
YDOXDWLRQHYLGHQFHEecause RVI had not presented it in the sell its rights on the 4.2 mile segment to the Park District in
form of a signed sale agreement or firm purchase offer. Id. at the event that the line were abandoned, the STB revalued the
* 6-7. Finally, the STB reconfirmed its conclusion that the acreage sold to the Park District at the contract price of
proper track salvage value was limited to $400,000 based $600,000, and revalued the remaining portion of the land
upon the 1996 sale to Kovalchick. The STB explained that within Boardman Township (approximately two acres) at
"if abandonment had occurred, RVI could not have resold the $19,306. The STB’s revaluation of the land thus yielded a
track and materials to a different company for any price, total land value of $817,868, from which it subtracted
because it earlier had sold the future salvage rights for $100,000 for income assigned by RVI to a third party. The
$400,000." Id. at *7. RVI has filed a petition for this Court’s STB added the $717,868 to the new $400,000 track value and
review of the STB’s November 2, 2000 decision. By an order reached a total value for the rail line of $1,117,868. Id. at *
dated November 17, 2000, this Court denied RVI’s request 10-11.
for a stay pending judicial review.
However, the STB rejected all of RVI’s other reasons for
5. The STB’s December 7, 2000, January 17, 2001 and revaluing the land as an assembled corridor, concluding that
November 9, 2001 decisions RVI’s evidence, which included proposals by other park
districts to gain funding for trails on the line and an offer by
After the STB’s November 2, 2000 decision, a number of RVI to sell an easement to Williams for installation of fiber
issues arose between the parties resulting in several more optic cable, was not submitted prior to its setting the land
decisions of the STB. On December 7, 2000, the STB valuation in the January 7, 2000 decision and was
rejected a request from RVI to bind CCPA and its prospective "speculative." The STB explained:
operator, CCPR, to the 1996 "management agreement"
between RVI and OLE, Ltd., which required the payment to With the exception of the completed sale of an easement
a property manager of ten percent of the gross receipts from to Ohio Edison [that the Board had included in its prior
the operation, rent, or transfer of the rail line. R.R. Ventures, valuation of the land], there is no comparable signed
Inc. Abandonment Exemption Between Youngstown, OH, contract for sale of rights for other utility easements on
and Darlington, PA, in Mahoning and Columbiana Counties, any portion of the right-of-way. Nor is there a firm bid
OH, and Beaver County, PA, STB Docket No. AB-556 (Sub- from a purchaser that would be binding upon RVI’s
No. 2X), 2000 WL 1801264, at *2-3 (Service Date Dec. 7, acceptance.
2000). The STB found that this obligation, costing
approximately $137,000, subjected CCPA to unnecessary and Id. at * 9. The STB also refused to include the 4.012-acre
burdensome costs, possibly thwarting a sale of the rail line sale to the Park District because RVI had not identified the
under the OFA process, and was contrary to the primary
purpose of 49 U.S.C. § 10904, which is "to provide for
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location of the parcel, and did not argue that the contract for The STB then issued a decision on November 2, 2000,
sale demonstrated the value of the land. Id. at * 10. denying RVI’s motions to vacate and to stay the sale. R.R.
Ventures, Inc. Abandonment Exemption Between
Finally, the STB discussed CCPA’s evidence regarding Youngstown, OH, and Darlington, PA, in Mahoning and
removal of, or damage to, segments of the line and track. Columbiana Counties, OH, and Beaver County, PA, STB
Specifically, the STB responded to correspondence Docket No. AB-556 (Sub-No. 2X), 2000 WL 1648143
introduced by CCPA that showed that RVI authorized "state (Service Date Nov. 2, 2000). The STB explained that
road crews [to] pave over the line while it was still an active pursuant to 49 U.S.C. § 10904(f)(2), an offeror, such as
rail line and at the same time that shippers were requesting CCPA, is obligated to file a notice of withdrawal from a sale
service." Because the STB found that RVI acted in "blatant within ten days of a STB decision setting terms, but it is not
disregard of its common carrier obligations to provide statutorily obligated to file a notice of acceptance. The STB
service," it acceded to CCPA’s request to establish an escrow also rejected RVI’s argument that CCPA had failed to comply
account for funding "to ensure that RVI pays for uncovering with the ten-day period for accepting or rejecting in writing
and restoring paved-over track and for reconnecting signal the STB’s terms pursuant to 49 C.F.R. § 1152.27(h)(7).
equipment at road crossings." Id. at * 11. The STB According to the STB, CCPA had provided proper written
accordingly directed that $375,000 of the sale price be placed notice when the STB set the initial sale terms on January 7,
into an escrow account, and ordered RVI to permit CCPA and 2000, and thus had complied with the regulation because the
its agents to inspect the line for damage. The STB then STB had not required another notice of CCPA’s acceptance
ordered RVI to convey to "CCPA all land, track, and related of its October 3, 2000 decision. The STB further rejected
material, and property interests covered by [its] previous RVI’s motion to vacate in light of CCPA’s October 20, 2000
order, as clarified here, within 45 days of the date of service letter of acceptance. Id. at * 3-4.
of this decision according to the terms of closing stated in this
decision." Id. at * 12. RVI, Boardman Township, and the 7KH 67% DOVR GHQLHG 59,¶V PRWLRQ IRU D VWD\ SHQGLQJ
Park District have filed petitions for review from the STB’s MXGLFLDOUHYLHZRIWKH2FWREHUGHFLVLRQ7KH67%
October 4, 2000 decision. ILUVW UHMHFWHG 59,¶V DUJXPHQW WKDW &&3$ KDG QRW SURSHUO\
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4. The STB’s November 2, 2000 decision denying WKHDUJXPHQWWKDWWKH67%FRXOGRQO\IRUFHDQRZQHUWRVHOO
RVI’s motions to vacate and to stay the sale DVPXFKSURSHUW\DVQHFHVVDU\IRUUDLORSHUDWLRQVDQGWKDW
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After the STB’s October 4, 2000 decision, RVI filed a 67%¶V WHUPV 7KH 67% UHLWHUDWHG LWV ³UHEXWWDEOH
motion to vacate the sale and vacate postponement of the SUHVXPSWLRQ´WKDWDSXUFKDVHUZRXOGQHHGDOORIWKHVHOOHU¶V
abandonment exemption on the grounds that CCPA had not LQWHUHVWV³WRSURYLGHHIIHFWLYHWUDQVSRUWDWLRQVHUYLFHEHFDXVH
timely accepted the STB’s new sale terms. RVI also WKDWLVWKHSURSHUW\WKHVHOOHU RULWVSUHGHFHVVRU DVVHPEOHG
requested a stay of the sale pending review by this Court. IRU DQG GHGLFDWHG WR UDLO VHUYLFH´ FRQFOXGLQJ WKDW &&3$
CCPA responded to this motion with a letter to the STB dated ZRXOGQHHGDOORI59,¶VLQWHUHVWLQWKHOLQH,GDW
October 20, 2000, advising both the STB and RVI that "it
accepts the revised terms and conditions." 7KH67%DOVRUHMHFWHG59,¶VFRQWHQWLRQWKDWWKH67%KDG
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