Village of Barrington v. Surface Transportation Board
394 U.S. App. D.C. 353
| D.C. Cir. | 2011Background
- CN sought to acquire EJ&E Railway to bypass Chicago congestion, triggering environmental review by STB under NEPA.
- STB classified the transaction as a minor merger under 49 U.S.C. § 11324 and initiated environmental analysis.
- SEA prepared a substantial EIS after extensive public outreach; proposed mitigation including grade separations at two crossings.
- STB ultimately approved the merger and imposed Condition 14 allocating 67% of Ogden Ave. and 78.5% of Lincoln Highway grade-separation costs to CN.
- CN filed petitions for review challenging STB’s environmental conditioning authority and the substantive EIS findings; Barrington and others joined.
- The court split the questions into statutory interpretation of 11324 and NEPA adequacy of the EIS and mitigation measures.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does 49 U.S.C. § 11324 unambiguously bar environmental conditioning on minor mergers? | CN argues §11324(d) requires approval unless anticompetitive effects; conditioning could only relate to competition. | Board may impose environmental conditions under §11324(c) and §11326; §11324(d) does not unambiguously repeal conditioning. | Ambiguous; Board may impose environmental conditions. |
| Is STB's environmental conditioning interpretation entitled to Chevron deference? | CN contends no Chevron deference because no formal rulemaking or adjudication; Mead controls. | Board procedures resemble formal processes; Chevron applies and Board's reading is reasonable. | Chevron deference applies; Board's interpretation deemed reasonable. |
| Does NEPA authorize the Board to rely on environmental factors in interpreting §11324? | CN contends NEPA is procedural and cannot expand organic authority. | NEPA permits considering environmental factors within Board's discretion; NRDC supports this. | NEPA supports the Board's environmental conditioning reading within its statutory framework. |
| Did CN preserve its challenge to the Board's conditioning authority (waiver/estoppel)? | CN timely raised the issue; waiver should not bar review. | Board argues waiver/estoppel due to timing and consummation. | Waiver/estoppel not applied to bar a pure statutory interpretation challenge. |
| Were the environmental conditions, including CN's Condition 14, arbitrary or capricious under the APA? | CN argues cost allocation and selection criteria were flawed and inconsistent with standards. | STB provided reasoned explanations grounded in NEPA and FHWA guidance; policy considerations allowed. | Condition 14 upheld as not arbitrary or capricious; EIS thorough and mitigation rational. |
Key Cases Cited
- Vermont Yankee Nuclear Power Corp. v. NRDC, 435 U.S. 519 (1978) (requires timely presentation of agency challenges; fairness in agency proceedings)
- United States v. L.A. Tucker Truck Lines, 344 U.S. 33 (1952) (timely, forceful arguments needed to preserve appeal rights)
- Otter Tail Power Co. v. STB, 484 F.3d 959 (8th Cir.2007) (late-waived arguments can be fatal depending on context)
- National Ass'n of Home Builders v. Defenders of Wildlife, 551 U.S. 644 (2007) (implied amendments/repeals disfavored; context of statutes)
- United States v. Mead Corp., 533 U.S. 218 (2001) (agency interpretation not always entitled to Chevron deference; Mead framework)
- NRDC v. EPA, 859 F.2d 585 (D.C. Cir. 1988) (NEPA interpreting agency discretion to consider environmental factors)
- Village of Palestine v. ICC, 936 F.2d 1335 (D.C. Cir. 1991) (minor mergers review and scope of Board's authority)
- Illinois v. ICC, 687 F.2d 1047 (7th Cir.1982) (minor mergers and anticompetitive effects; framework for review)
- Lamoille Valley Railroad Co. v. ICC, 711 F.2d 295 (D.C. Cir. 1983) (discusses scope of conditioning authority in major mergers)
- Comm’r v. Lundy, 516 U.S. 235 (1996) (textual coherence in same act; identical terms mean same meaning)