74 F.4th 884
7th Cir.2023Background
- Metra (RTA’s commuter-rail division) provides passenger service; Union Pacific (UP) owns the tracks, supplies crews, and sells tickets; Metra owns the rolling stock and pays UP for operations.
- UP notified Metra it would discontinue operating three commuter lines; UP would continue freight service and leave tracks in place.
- Metra argued UP cannot cease commuter operations without Surface Transportation Board (STB) approval, relying on pre-1995 statutes governing discontinuation of passenger service.
- UP argued the 1995 ICC Termination Act (ICCTA) repealed the statutes that once required agency approval to discontinue passenger services, leaving only §10903 (abandonment of a line) under STB authority.
- The district court granted UP a declaratory judgment that UP may stop providing the passenger service (no STB approval required) and denied Metra’s late counterclaim; the STB declined to assert primary jurisdiction.
Issues
| Issue | Union Pacific's Argument | Metra's Argument | Held |
|---|---|---|---|
| Whether the district court should defer to the STB under primary jurisdiction | No—this dispute requires no agency fact-finding and is fit for judicial resolution | Yes—STB is the proper forum for carrier obligations and service-discontinuation questions | No deference; primary-jurisdiction referral not required (district court properly proceeded) |
| Whether there is an Article III case or controversy | Yes—UP has a concrete dispute and seeks a declaration to avoid penalties if it stops service | No—Metra says the suit is abstract, about future pricing/framework, not a justiciable controversy | Justiciable; declaratory relief proper under 28 U.S.C. §2201 |
| Effect of ICCTA repeal on STB authority to block discontinuation of passenger service | Repeal of §§10908/10909 deregulated discontinuation of particular passenger services; STB retains authority only over abandonments under §10903 | Repeal does not strip STB authority to prevent UP from ending commuter service | Repeal removed prior statutory constraint; UP may discontinue passenger operations so long as §10903 (abandonment) is not implicated |
| Whether contracts bind UP to continue service until STB approval | UP: controlling contracts expired or do not obligate UP to continue indefinitely; operative language does not require STB approval | Metra: contract clauses (including a 2017 extension and older agreements) require compliance with statutory/regulatory procedures—i.e., STB approval—before termination | Contracts do not prevent UP from discontinuing service; relevant contract expired or promises were not by UP to continue service indefinitely |
| Whether the district court abused discretion denying Metra’s belated counterclaim | UP: Metra waited too long and the contracts would not change the federal ruling; suit should end in federal court | Metra: contractual claims are central and should be adjudicated | No abuse of discretion; district court properly denied the late-filed counterclaim |
Key Cases Cited
- United States v. Western Pacific R.R., 352 U.S. 59 (1956) (discusses doctrine and requirements for primary jurisdiction)
- National Railroad Passenger Corp. v. Atchison, Topeka & Santa Fe Ry., 470 U.S. 451 (1985) (addresses agency approval to discontinue passenger service)
- New Jersey v. New York, Susquehanna & Western R.R., 372 U.S. 1 (1963) (addresses discontinuation of rail passenger services)
- American Airlines, Inc. v. Wolens, 513 U.S. 219 (1995) (deregulation does not eliminate state-law contract claims)
- Aetna Life Ins. Co. v. Haworth, 300 U.S. 227 (1937) (supporting the availability of declaratory judgments in appropriate controversies)