Manufacturers Railway Co. v. Surface Transportation Board
400 U.S. App. D.C. 157
D.C. Cir.2012Background
- STB regulates rail transportation and imposes employee-protective conditions when authorizing abandonment or discontinuance.
- Dismissal allowances are commonly required up to six years, subject to a longstanding entire-system exception.
- The entire-system exception excludes dismissal allowances when a carrier abandons or discontinues service over its entire system and no operating carrier remains to fund the payments.
- Manufacturers Railway sought to discontinue its entire system and obtained Board authorization to do so.
- The Board ordered dismissal allowances despite the entire-system exception, distinguishing cases where lines are owned by the carrier but operations have ceased.
- Unions argued the statutory directive requires employee protections in all abandonments, but their challenge was not litigated before the court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Board reasonably departed from its entire-system exception. | Manufacturers argues the exception should apply to complete system discontinuance. | STB contends the exception does not apply when the carrier owns the lines in question. | Board departure was arbitrary and capricious; the exception should have applied. |
| Whether ownership of the lines by Manufacturers justified departing from the entire-system exception. | Ownership does not negate the exception if no ongoing operations remain to fund dismissal payments. | Ownership allowed the Board to justify a departure from the exception. | Board failed to reasonably justify the deviation from the longstanding exception. |
| Whether the unions' textual challenge to the entire-system exception was properly before the court. | Statutory text requires dismissal allowances in all abandonments, negating the exception. | Unions’ textual challenge was not adequately presented to the court and not decided here. | Not addressed on the merits; not presented to the court. |
Key Cases Cited
- Oregon Short Line Railroad, 360 I.C.C. 91 (1979) (dismissal allowances generally required; cited for baseline rule)
- Wellsville, Addison & Galeton Railroad Corp., 354 I.C.C. 744 (1978) (entire-system exception background)
- Northampton & Bath Railroad Co., 354 I.C.C. 784 (1978) (early articulation of entire-system rationale)
- Simmons v. ICC, 697 F.2d 326 (D.C. Cir. 1982) (implications of entire-system reasoning)
- Railway Labor Executives' Ass'n v. ICC, 735 F.2d 691 (2d Cir. 1984) (role of employee protections in rail abandonments)
- New York Cross Harbor Railroad v. STB, 374 F.3d 1177 (D.C. Cir. 2004) (distinctions between abandonment and discontinuance; Board jurisdiction)
- Village of Barrington v. STB, 636 F.3d 650 (D.C. Cir. 2011) (APA arbitrary-and-capacious review framework)