863 F.3d 816
8th Cir.2017Background
- PRIIA (2008) §207 directed the FRA and Amtrak to develop metrics and minimum standards for intercity passenger rail performance, including an on-time performance metric; those metrics feed FRA reports, Amtrak evaluations, contracts, and can trigger STB investigations under §213(a).
- §213(a) authorizes the Surface Transportation Board (STB) to initiate investigations if (1) on-time performance averages below 80% for two consecutive quarters, or (2) service quality standards established under §207 fail for two consecutive quarters.
- In 2010 the FRA and Amtrak promulgated §207 metrics (including on-time performance), but subsequent litigation led to the D.C. Circuit invalidating §207 on due-process grounds, and the §207 rule became unenforceable.
- While §207 litigation proceeded, the STB concluded it could investigate under §213(a) despite the invalidated §207 rule, and in 2016 the STB adopted a final rule defining “on-time performance” (arriving/departing within 15 minutes, all-stations approach).
- Freight railroads challenged the STB’s Final Rule, arguing the STB lacked authority to define on-time performance because §207 expressly delegated metric development to FRA/Amtrak; the Eighth Circuit granted the petitions and vacated the STB rule.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether STB had authority under §213(a) to promulgate an on-time performance rule after §207 was invalidated | Freight RRs: §213(a) incorporates the §207 on-time metric; STB cannot supplant FRA/Amtrak authority | STB: §213(a) contains two independent triggers—an 80% on-time trigger (for which STB may define on-time) and a separate §207-linked service-quality trigger; STB may fill the gap left by §207’s invalidation | Held: STB exceeded authority; on-time performance in §213(a) refers to the §207 metric developed by FRA/Amtrak; STB rule vacated |
| Whether the STB may rely on a gap-filling / necessity rationale to assume another agency’s expressly delegated rulemaking function | Freight RRs: Congress expressly delegated metric rulemaking to FRA/Amtrak in §207; gap-filling cannot transfer that delegation to STB | STB: invalidation of §207 left a regulatory gap that STB must fill to carry out §213(a) investigations | Held: Gap-filling cannot be used to assume authority Congress expressly delegated to a different agency; the Board’s necessity argument fails |
| Whether the Court should defer to STB’s new textual interpretation of §213(a) (Chevron) | Freight RRs: STB relied on gap-filling at rulemaking; new textual basis is a post-hoc rationale; no Chevron deference because STB lacks delegated authority | STB: §213(a) language supports independent on-time trigger; Chevron deference should apply | Held: Court considered the textual argument despite procedural posture but concluded Chevron does not rescue STB (and the statute is clear) |
| Whether the Court should interpret “on-time performance” independently from §207 | Freight RRs: term should be read to mean the §207-developed metric (same phrase presumed same meaning across the statute) | STB: grammatical reading allows “service quality” to be tied to §207 while leaving “on-time performance” unlinked and thus for STB to define | Held: Context and statutory design show "on-time performance" refers to the §207 metric; STB interpretation rejected |
Key Cases Cited
- Bowen v. Georgetown Univ. Hosp., 488 U.S. 204 (1988) (agency regulations must stem from congressional delegation)
- City of Arlington v. F.C.C., 569 U.S. 290 (2013) (scope of agency’s jurisdictional determinations for Chevron)
- U.S. ex rel. O’Keefe v. McDonnell Douglas Corp., 132 F.3d 1252 (8th Cir. 1998) (agency rulemaking without statutory authority must be set aside)
- Sidney Coal Co. v. Soc. Sec. Admin., 427 F.3d 336 (6th Cir. 2005) (agency reassignment after invalidation where statute directed assignments)
- Pittston Co. v. United States, 368 F.3d 385 (4th Cir. 2004) (similar to Sidney Coal regarding reassignment consistent with statute)
- Bayou Lawn & Landscape Servs. v. Sec’y of Labor, 713 F.3d 1080 (11th Cir. 2013) (agency exceeded authority by issuing rules for a program Congress had not delegated to it)
- United States v. Booker, 543 U.S. 220 (2005) (principle of preserving functioning statutory provisions when possible)