United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued April 20, 2009 Decided June 26, 2009
No. 07-1401
CONSOLIDATED RAIL CORPORATION,
PETITIONER
v
.
SURFACE TRANSPORTATION BOARD AND UNITED STATES OF
AMERICA,
RESPONDENTS
CITY OF JERSEY CITY ET AL.,
INTERVENORS
Consolidated with 07-1529, 08-1019, 08-1052
On Petitions for Review of Orders
of the Surface Transportation Board
Robert M. Jenkins III argued the cause for petitioner
Consolidated Rail Corporation. Jonathan M. Broder was on
brief.
Fritz R. Kahn argued the cause for petitioners 212 Marin
Boulevard, L.L.C. et al.
Ronald Molteni, Attorney, Surface Transportation Board,
2
argued the cause for the respondents. Deborah A. Garza, Acting
Assistant Attorney General, United States Department of
Justice, at the time the brief was filed, Robert B. Nicholson and
John P. Fonte, Attorneys, Ellen D. Hanson, General Counsel,
Surface Transportation Board, and Evelyn G. Kitay, Associate
General Counsel, were on brief. Craig M. Keats, Associate
General Counsel, entered an appearance.
Andrea Ferster and Charles H. Montange were on brief for
the intervenors.
Before: HENDERSON, TATEL and GARLAND, Circuit Judges.
Opinion for the Court filed by Circuit Judge HENDERSON.
“[R]ailway termini . . . are our gates to the glorious and
the unknown. Through them we pass out into
adventure and sunshine, to them, alas! we return.”
—E.M. Forster, Howards End 16 (1921)
KAREN LECRAFT HENDERSON, Circuit Judge: Consolidated
Rail Corporation (Conrail) and 212 Marin, infra note 7, petition
for review of an order of the Surface Transportation Board (STB
or Board) concluding that Conrail must obtain authorization
from the Board to abandon certain railroad trackage located in
Jersey City, New Jersey. City of Jersey City—Petition for
Declaratory Order, STB Fin. Docket No. 34818, 2007 WL
2270850 (Aug. 9, 2007) (STB Order), recons. denied, Docket
No. 34818, 2007 WL 4429517 (Dec. 19, 2007) (STB Recons.
Order). For the reasons set out below, we vacate the Board’s
order.
I.
In the 1960s and early 1970s, “[a] rail transportation crisis
seriously threatening the national welfare was precipitated when
eight major railroads in the northeast and midwest region of the
country entered reorganization proceedings under . . . the
3
Bankruptcy Act.” Blanchette v. Conn. Gen. Ins. Corps., 419
U.S. 102, 108 (1974). To resolve the crisis, the Congress
enacted the Regional Rail Reorganization Act of 1973, Pub. L.
No. 93-236, 87 Stat. 985 (1974) (codified as amended at 45
U.S.C. §§ 701 et seq.) (Rail Act), which provided for the
“reorganization of the railroads, stripped of excess facilities, into
a single, viable system operated by a private, for-profit
corporation.” Blanchette, 419 U.S. at 109; see also Rail Act
§ 101(b), 87 Stat. at 986 (setting forth purposes of Rail Act).
The Rail Act established the United States Railway Association
(USRA), an incorporated nonprofit association, to carry out the
reorganization and Conrail, a railroad headquartered in
Philadelphia, to own and operate the reorganized railroad
system. Rail Act §§ 201, 202, 301, 302, 87 Stat. at 988-92,
1004-05. In July 1975, the USRA published the Final System
Plan (FSP) designating which “rail properties” of railroads in
reorganization were to be transferred to Conrail.1 See Rail Act
§§ 202(a)(1), 206(c)(1)(A), 87 Stat. at 990, 995. The FSP
designated for transfer to Conrail certain “rail lines,” FSP at 261
(JA 842), which, “[u]nless otherwise specified, . . . include[] all
rail properties . . . connected with, controlling or in any way
pertaining to or used or usable by the designee in connection
with the rail line designated including . . . connecting spur and
storage tracks,” id. at 241 (JA 965); see also id. at 261 (JA 842)
(designating for transfer “[t]ransferors’ interest in all freight
yards associated with rail lines designated to Con[r]ail”).
Among the “rail lines” designated for transfer was “Line Code
1420,” described as running from the “Jersey City” station at
milepost “1.0” to the “Harrison” station at milepost “7.0.” Id. at
1
“Rail properties” was defined as “assets or rights owned, leased,
or otherwise controlled by a railroad which are used or useful in rail
transportation service.” Rail Act § 102(10), 87 Stat. at 987.
4
272 (JA 846).2 The FSP listed “Harsimus Branch” as the
“branch name” for “Line Code 1420.” Id.
In March 1976, the Special Court, a United States district
court composed of three federal judges selected by the Judicial
Panel on Multi-District Litigation, ordered the trustee or trustees
of each railroad in reorganization to convey to Conrail the rail
properties designated for transfer in the FSP. Order of
Conveyance to Trustees of Railroads in Reorganization in the
Region, Misc. No. 75-3(A), at 8-9 (Reg’l Rail Reorg. Ct. Mar.
25, 1976) (Conveyance Order) (JA 648-49); see Rail Act
§§ 209(b), (c), 303(b)(1), 87 Stat. at 999-1000, 1006; 28 U.S.C.
§ 1407(d).3 Pursuant to the Conveyance Order, the trustee of the
2
The United New Jersey Railroad and Canal Company
(UNJRCC) owned the rail property designated as “Line Code 1420.”
In 1871, the Pennsylvania Railroad leased “Line Code 1420” from
UNJRCC. In 1968, the Pennsylvania Railroad Company merged into
the Penn Central Transportation Company (Penn Central). In
performing an inventory of rail lines and related facilities, the USRA
referred in part to the Penn Central Engineering Department’s records,
“which assign[ed] a unique four-digit code, called a line code, to each
individual railroad line.” FSP at 241 (JA 965). The USRA created a
file “listing each individual line of railroad . . . and showing line-code
designations as contained in the Penn Central’s Engineering
Department records . . . , including origin and destination (by
milepost, geographic reference and branch name).” Id.
3
Specifically, the Conveyance Order states in pertinent part: “The
trustee or trustees of each Transferor identified in each Conveyance
Document shall execute . . . and on or before the Conveyance Date
shall deliver such Conveyance Document to the Transferee identified
therein . . . .” Conveyance Order at 8 (JA 648). The USRA prepared
and submitted the conveyance documents referred to in the order to
the Special Court along with the FSP. See id. at 4-5 (JA 644-45);
Deed Between Fairfax Leary, as Trustee of the United New Jersey
Railroad and Canal Company, Debtor and Consolidated Rail
5
UNJRCC conveyed “Line Code 1420” to Conrail. Deed at 1-4
(JA 909-12). The Deed described the property as follows:
Situate in the County of Hudson, State of New
Jersey, and being the United New Jersey Railroad and
Canal Company’s line of railroad known as the Penn
Central Harsimus Branch and being all the real
property in the County lying in, under, above, along,
contiguous to, adjacent to or connecting to such line.
Such line originates in the County at Harsimus
Cove, passes through Journal Square, and terminates in
the County near the junction with the Penn Central
New York-Philadelphia Main Line, west of the New
Jersey Turnpike Overhead Bridge.
The line of railroad described herein is identified
as Line Code 1420 in the records of the United States
Railway Association.
Id. at A-2 (JA 914). Attached to the Deed were six valuation
maps numbered V-2.1/S.T.-1 through S.T.-6 and a seventh
numbered V-1.01/S.T.-2. (JA 926-33).4 The six maps
Corporation at 4 (executed Mar. 31, 1976) (Deed) (JA 912).
4
According to the verified statement of Victor Hand, the USRA
director of facilities planning, “USRA chose to use as the basis of the
conveyance of real property the railroad ‘valuation maps’ that had
been prepared [following surveys conducted during 1915-1920] by all
steam railroads pursuant to an order of the Interstate Commerce
Commission.” Verified S[t]atement of Victor Hand at 2 (Mar. 10,
2006) (Hand Statement) (JA 796). In many instances, the valuation
maps were attached to the deeds conveying rail property to Conrail.
Id. at 3 (JA 797). Hand described the deeds as “negative
conveyances” because the deeds conveyed all of the transferor’s rail
property “except certain parcels of property . . . , which were marked
6
numbered V-2.1/S.T.-1 through S.T.-6 showed trackage running
from Exchange Place, located on the west bank of the Hudson
River in Jersey City, west to Harrison, New Jersey. (JA 926-
931).5 The seventh map numbered V-1.01/S.T.-2 showed part
of the Harsimus Cove Yard, located on the west bank of the
Hudson River immediately to the north of Exchange Place, with
portions of the yard marked as “sold.” (JA 933). Another
valuation map, numbered V-1.01/S.T.-1 and not attached to the
Deed, showed trackage branching off the Main Line at Waldo
Avenue and running east along 6th Street on a series of
embankments and bridges to the Harsimus Cove Yard. (JA
932).6 The Harsimus Cove Yard “contained coal piers,
on specifically prepared valuation maps that were made part of the
deed.” Id.
5
We refer to the trackage running from Exchange Place to
Harrison as the Main Line.
6
Hand explained that the valuation map numbered V-1.01/S.T.-1
was not included in the Deed because “no excepted property was on
this map.” Hand Statement at 5 (JA 799). Nevertheless, the UNJRCC
trustee conveyed the trackage shown on the map. Id. According to
Richard James, a member of the board of trustees of the Pennsylvania
Railroad Harsimus Stem Embankment Coalition and a respondent
herein, the series of embankments and bridges over which the trackage
ran was built from 1901 to 1905. The Pennsylvania Railroad
Harsimus Branch Embankment, Jersey City, New Jersey, State &
National Registers of Historic Places Nomination at 1 (1999) (JA
157). The embankments were made of stone retaining walls filled
with earth built between roads running north-south. Id. The bridges
connecting the embankments ran east-west and spanned the north-
south roads. Id. The Harsimus Cove Yard was at the eastern end of
the trackage running over the embankments and bridges. The western
end of the trackage on the embankments was connected to the Main
Line at Waldo Avenue by an elevated, two-track line. Id. The two-
track connecting line converted to seven tracks running over the
7
warehouses, grain elevators and stockyards, and were the major
facilities handling rail-marine traffic to piers and yards in New
York City.” Hand Statement at 4 (JA 798). By the 1970s,
however, rail traffic in the Harsimus Cove Yard had decreased
significantly and parts of the yard were no longer used. Id.
According to Conrail’s real estate director, Conrail began
operating the Main Line, Embankment and Harsimus Cove Yard
in April 1976. Verified Statement of Robert W. Ryan at 2 (Apr.
17, 2006) (JA 816). He stated that “by the mid-1980s Conrail
had sold off most of the Harsimus Cove Yard track to several
developers, as well as [to] the [Jersey City] Redevelopment
Agency.” Id. at 11 (JA 824). In the late 1980s, the last shipper
left Harsimus Cove Yard. Id. Conrail continued to use part of
the Embankment as turnaround space for trains until 1994. Id.
at 12 (JA 825). By 1997, all of the trackage and bridges on the
Embankment had been removed. Id. at 14 (JA 827). The Jersey
City Redevelopment Agency negotiated with Conrail to
purchase the Embankment properties—consisting of eight
parcels of land on which the individual embankments are
located—but negotiations ended without agreement. Id. at 14-
15 (JA 827-28). In July 2005, Conrail sold the Embankment
properties to a private real estate developer.7
embankments and bridges into the Harsimus Cove Yard. Id. The
trackage served freight traffic going to the Harsimus Cove Yard from
the Main Line and vice versa. Id.; see also Hand Statement at 3-4 (JA
797-98). We refer to the embankments, bridges and trackage running
over them as the Embankment. As noted later, all that remains of the
Embankment are the individual embankments.
7
Conrail sold the Embankment properties to 212 Marin
Boulevard, L.L.C., 247 Manila Avenue, L.L.C., 280 Erie Street,
L.L.C., 317 Jersey Avenue, L.L.C., 354 Coles Street, L.L.C., 389
Monmouth Street, L.L.C., 415 Brunswick Street, L.L.C. and 446
Neward Avenue, L.L.C., (collectively 212 Marin) which are New
8
In January 2006, Jersey City, the Rails to Trails
Conservancy, the Pennsylvania Railroad Harsimus Stem
Embankment Coalition and State Assemblyman Louis M.
Manzo (collectively respondents) petitioned the STB for an
order under 5 U.S.C. § 554(e)8 declaring that Conrail was
required to obtain authorization from the Board in order to
abandon the Embankment. STB Order at 1. A rail carrier must
obtain prior authorization from the Board to “abandon any part
of its railroad lines” or “discontinue the operation of all rail
transportation over any part of its railroad lines.” 49 U.S.C.
§ 10903(a)(1). Abandonment is appropriate “only if the Board
finds that the present or future public convenience and necessity
require or permit the abandonment.” Id. § 10903(d). If the
Board finds such public convenience and necessity, “it shall . . .
approve the application.” Id. § 10903(e). No authorization is
required, however, for the “abandonment[] or discontinuance of
spur, industrial, team, switching, or side tracks.” Id. § 10906.
Conrail had not obtained abandonment authorization from the
Board before selling the Embankment properties to 212 Marin.
In August 2007, the Board declared that “the Embankment
property sold to [212 Marin] remains part of the national rail
system subject to the Board’s exclusive jurisdiction until
appropriate abandonment authority is obtained.” STB Order at
11. In December 2007, the Board denied 212 Marin’s petition
for reconsideration. STB Recons. Order at 8. Conrail and 212
Marin separately petitioned for review of the Board’s decisions
and we consolidated the petitions. Order, Cons. Rail. Corp. v.
Jersey limited liability real estate developers. 212 Marin was a party
in the Board proceedings and, as noted earlier, is a petitioner here.
8
“The [STB], with like effect as in the case of other orders, and
in its sound discretion, may issue a declaratory order to terminate a
controversy or remove uncertainty.” 5 U.S.C. § 554(e).
9
STB, No. 07-1401 (Feb. 5, 2008); Order, Cons. Rail. Corp. v.
STB, No. 07-1401 (Mar. 18, 2008); see 28 U.S.C. § 2321(a)
(“[A] proceeding to enjoin or suspend, in whole or in part, . . .
[an] order of the Surface Transportation Board shall be brought
in the court of appeals . . . .”); 28 U.S.C. § 2342(5) (“The court
of appeals . . . has exclusive jurisdiction to enjoin, set aside,
suspend (in whole or in part), or to determine the validity of . . .
final orders of the Surface Transportation Board made
reviewable by section 2321 . . . .”).
II.
We begin—and end—by examining the Board’s jurisdiction
to consider the respondents’ petition for a declaratory order.9
The Rail Act, as amended, provides:
The original and exclusive jurisdiction of the special
court shall include any action, whether filed by any
interested person or initiated by the special court itself,
to interpret, alter, amend, modify, or implement any of
the orders entered by such court pursuant to section
743(b) of this title in order to effect the purposes of this
chapter or the goals of the final system plan.
45 U.S.C. § 719(e)(2).10 The Special Court was “abolished
effective 90 days after October 19, 1996,” on which date “all
jurisdiction and other functions of the special court [were]
9
212 Marin first challenged the Board’s jurisdiction in its petition
for reconsideration in the Board proceedings and renews its challenge
here. Although 212 Marin’s jurisdictional challenge is apparently
untimely (having not been pressed until the reconsideration stage), see
BNSF Ry. Co. v. STB, 453 F.3d 473, 478-79 (D.C. Cir. 2006), the
Board does not raise a timeliness objection.
10
Section 743(b) authorized the Special Court to order the
conveyance of properties designated for transfer in the FSP. 45 U.S.C.
§ 743(b)(1).
10
assumed by the United States District Court for the District of
Columbia.” Id. § 719(b)(2). In Consolidated Rail Corp. v.
Pittsburgh and Lake Erie Railroad Co., 459 F. Supp. 1013
(Reg’l Rail Reorg. Ct. 1978), the Special Court concluded that
it had exclusive jurisdiction of an action seeking a declaratory
judgment regarding the trackage rights of the Pittsburgh and
Lake Erie Railroad Co. (P&LE). 459 F. Supp. at 1017-18.
Pursuant to the Special Court’s conveyance order and the FSP,
P&LE and Conrail executed an “operating rights grant” and an
implementing agreement giving P&LE certain trackage rights.
Id. at 1014. The Special Court noted that it was undisputed that
trackage rights had been granted. Id. at 1017. “The question,
rather, is the nature and extent of the privileges conveyed,”
which the Special Court determined “raises substantial questions
with respect to the interpretation of the FSP and [the]
conveyance orders themselves.” Id. In Consolidated Rail Corp.
v. Penn Central Corp., 533 F. Supp. 1351 (Reg’l Rail Reorg. Ct.
1982), the Special Court concluded that it had exclusive
jurisdiction of an action seeking a declaratory judgment that its
conveyance order “conveyed to Conrail all of Penn Central’s
right, title and interest in a lease of certain railroad equipment.”
533 F. Supp. at 1352. The Special Court concluded that
“interpretation of a conveyance order is clearly within [its]
exclusive original jurisdiction.” Id. at 1353. It also concluded
that it had “jurisdiction to consider at least some aspects of [the
conveyance document]” because “it involves the implementation
of [the] conveyance order.” Id. at 1353-54.11
11
The Special Court observed that “not every challenge ‘relating
to the [Rail] Act’ is within its exclusive jurisdiction,” Penn Central
Corp., 533 F. Supp. at 1353 (quoting Consol. Rail Corp. v. Illinois,
423 F. Supp. 941, 948 (Reg’l Rail Reorg. Ct. 1976), but that it had
“exclusive jurisdiction where resolution of the dispute involves the
court’s ‘central functions,’” id. (quoting P&LE, 459 F. Supp. at 1017).
The term “central functions” appears in the legislative history of the
11
It is undisputed that the FSP designated the Embankment
for transfer and that the UNJRCC in fact conveyed the
Embankment to Conrail pursuant to the Conveyance Order. The
issue, rather, is the “nature” of the conveyance, P&LE, 459 F.
Supp. at 1017, that is, as a line of railroad or as spur and yard
track. See STB Order at 8 (“The issue before us here is whether
the Embankment was transferred to Conrail as a line of railroad
included under Line Code 1420, in which case Board
abandonment authority would be required, or whether the
Embankment was only ancillary spur and yard track that can be
abandoned under 49 U.S.C. 10906 without regulatory
approval.”). As noted, the FSP designated for transfer certain
“rail lines,” freight yards associated with those rail lines and
“connecting spur and storage tracks.” FSP at 241, 261 (JA 842,
965). The Board interpreted “Line Code 1420” in the FSP to
include the Embankment as a “rail line.” STB Order at 8-10
(“[W]e conclude that Conrail acquired the Embankment as a line
of railroad under Line Code 1420 of the FSP.”). Conrail and
212 Marin argued that the Embankment was spur and yard track
Railroad Revitalization and Regulatory Reform Act of 1976, Pub. L.
No. 94-210, 90 Stat. 31, which amended the Rail Act to add, inter
alia, section 209(e)(2). Id. § 602, 90 Stat. at 86. As explained in
P&LE, the original bill to amend section 209 would have given the
Special Court original and exclusive jurisdiction “to enforce or declare
any rights under this Act.” P&LE, 459 F. Supp. at 1016 (internal
quotations omitted). The conference committee removed the clause,
explaining that “[m]any actions covered by this provision undoubtedly
would be within the exclusive jurisdiction of the special court under
other provisions of this bill, but still others may be of no concern to
the central functions of the special court under the Rail Act of 1973.”
Id. at 1016-17 (internal quotations omitted and emphasis added). The
Special Court itself has held that interpreting conveyance documents
“so as to give effect to the intention formulated by USRA and
approved by Congress is within ‘the central functions’ of [the Special]
Court.” Id. at 1017-18.
12
ancillary to “Line Code 1420” under the FSP and Conveyance
Order. All parties before us appear to agree that the FSP used
the phrase “rail line” in the sense relevant to the Board’s
abandonment authority (i.e., as distinguished from “spur”) and
consequently that the FSP resolves the Embankment’s status for
this purpose. The petition for a declaratory order in this case,
therefore, “raises substantial questions with respect to the
interpretation of the FSP and [the Special Court’s] conveyance
orders themselves,” P&LE, 459 F. Supp. at 1017, and,
accordingly, the petition falls within the “original and exclusive
jurisdiction” of the United States District Court for the District
of Columbia as successor to the Special Court “to interpret . . .
[an] order[] entered by [the Special Court].” 45 U.S.C.
§ 719(e)(2). We conclude that the Board was without
jurisdiction to consider the respondents’ petition for a
declaratory order pursuant to 5 U.S.C. § 554(e).
Nevertheless, the Board asserts that “[a]scertaining the
status of track and rail property is an implicit part of every
abandonment proceeding” and that requiring the district court
qua the Special Court to ascertain the status of rail property
“would make it very difficult for the [Board] to exercise its
responsibilities.” Resp.’s Br. at 31-32. In its decision denying
reconsideration, the Board concluded it had jurisdiction under its
statutory authority to approve or deny applications for
abandonment pursuant to 49 U.S.C. § 10903. STB Recons.
Order at 8; see also Rail Act § 304(e) (codified as amended at
45 U.S.C. § 744(g)) (“After the rail system to be operated by
[Conrail] . . . under the [FSP] has been in operation for 2 years,
the Commission may authorize . . . abandon[ment of] any rail
properties as to which it determines that rail service over such
properties is not required by the public convenience and
necessity . . . .”). Because the Board “does not have
authority . . . over . . . abandonment . . . of spur, industrial, team,
switching, or side tracks,” 49 U.S.C. § 10906, the Board’s
approval or denial of an abandonment application presupposes
13
that the trackage for which abandonment is sought is “part of
[the rail carrier’s] railroad lines” subject to the Board’s
abandonment authority under section 10903. In abandonment
proceedings in which the Board’s authority is not disputed based
on the nature of the trackage, however, the issue of the track’s
nature would presumably not arise. See, e.g., Consol. Rail
Corp., STB Docket No. AB-167 (Sub-No. 1178X), 1997 WL
453441 (Aug. 12, 1997) (exempting abandonment of rail line
from prior approval requirement). In other proceedings, the
nature of the trackage may be contested but resolution of the
issue would not require interpretation of the FSP or the Special
Court’s conveyance orders and thus would not implicate the
Special Court’s (now district court’s) exclusive jurisdiction.
See, e.g., Chelsea Prop. Owners, 8 I.C.C. 2d 773, 789-91 (1992)
(concluding trackage was “rail line” subject to abandonment
authorization and not “spur” without reference to FSP or
conveyance orders). Only in proceedings in which the Board’s
authority is challenged and an interpretation of the FSP or the
Special Court’s conveyance order under 45 U.S.C. § 719(e)(2)
is required does the Board lack jurisdiction to resolve the
question of the nature of the trackage sought to be abandoned.
In such a case, as here, we see no conflict between 45 U.S.C.
§ 719(e)(2) and 49 U.S.C. §§ 10903 and 10906. The Board
retains its authority under sections 10903 and 10906 to approve
or deny an abandonment application. Under 45 U.S.C.
§ 719(e)(2), however, the district court qua the Special Court
retains its exclusive jurisdiction to decide the antecedent
question if it arises, namely, whether the trackage was conveyed
by the FSP as “part of [the rail carrier’s] railroad lines.” 49
U.S.C. § 10903(a)(1)(A).
For the foregoing reasons, we conclude that the Surface
Transportation Board’s orders in City of Jersey City—Petition
14
for Declaratory Order issued outside its jurisdiction and we
therefore vacate the same.
So ordered.