Chlorine Institute, Inc. v. Federal Railroad Administration

does, fact, in tion as to how it relied to its detriment on establish adjudication is no doubt that the policy prior policy at issue. There in its alleged —neither adjudication set forth the inter- Edgewater brief, directly argu- nor when asked at oral governs prior that this case pretation assuming Edgewater even ment.6 So rulemaking, alleged so the retro- the 2004 “retroactively” applied rule was not one of retroactive activity problem is cost-reporting period, it would not rulemaking. retroactivity constitute the sort of unfair Thus, only remaining question, may agency that render an decision arbi- thought to have been might be trary capricious. judgment The of the applying the implicitly, is whether raised court is therefore reversed. district interpretation “retroactively” to Edgewater So ordered. though improper. Health is Even Catholic retroactive, adjudication by its nature recognized “denying] that retro

we have to a rule announced in an

active effect adjudication” may proper be where

agency “substituyes] adjudication ... new law reasonably clear” and

for old law was doing “necessary pro so is ... where INSTITUTE, CHLORINE expectations tect the settled of those who INC., Petitioner preexisting had relied rule.” FERC, Natural Gas Co. v. Williams (D.C.Cir.1993) (quoting Al- F.3d RAILROAD FEDERAL FERC, Hydro Assocs. v. iceville ADMINISTRATION, et (D.C.Cir.1986)). By “retroac al., Respondents. effect,” course, typically we refer to tive penalty an order or with economic conse No. 12-1298. quences, application not retroactive Appeals, United States Court of all, Wyman-Gor- rule itself—after under District of Columbia Circuit. don, adjudication must have retroactive effect, it or else would be considered a Argued April 2013. 763-66, rulemaking. 394 U.S. 89 S.Ct. Decided June 2013. 1426. parties extensively argued have Edgewater interpretation whether the con- is, legal stituted a volte whether face—that

pre-jEdgewater agency statements and de- did, fact, contrary

cisions in establish

policy. unnecessary But it is us question

decide that in this case because presented explana-

Catholic Health has no briefing might parties' agency well does not touch all on have been foreclosed from reliance, along detrimental but this prevailing point pro- on this so late in these issue— rulemaking adjudication with the broader vs. ceedings. any But counsel made never such explored framework discussed above—was suggestion briefing argument— or at oral —in argument. some detail at oral Had Catholic having we construe Catholic Health as so argued Secretary Health that the waived the argument. itself waived waiver reliance, right argue a lack then the argued

Paul M. Donovan the cause petitioner. (PIH TIH), Pennak, tion” hazardous material Attorney, United Mark W. chlorine, No. 110-432 Justice, such as Pub.L. argued Department States (Oct. 16, 104(a)(1), Stat. F. De- respondents. Stuart cause for the 20157(a)(1)). (49 2008) § Positive U.S.C. Attorney Deputy Assistant lery, Principal (RRR), Systems 77 Fed. Train Control General, Jay Singer, Attorney, Michael 2012) (2012 14, 28,285 Final (May Reg. Counsel, Geier, Assistant General Paul M. Rule). Final Rule establishes The 2012 Department Transporta- of United States determining year as the baseline for 2008 Plocki, tion, Deputy Assistant Peter J. or PIH carry passengers tracks whether Counsel, Perry Christopher and General subject an require to to exclu- so as Behravesh, PTC — Trial Attor- and Rebecca S. exception segments for sion/removal Administration, Railroad Federal neys, carry such traffic as of the longer will no on brief. were 31, dead- implementation December Jr., Michael R. Hu- Dupree Thomas H. challenges arbitrary line. The Institute as ston, and Michael J. Louis P. Warchot contrary congres- and capricious amicus curiae Asso- on brief for Rush were to omit from sional intent FRA’s decision support Railroads in of of American ciation the 2012 Final Rule a risk assess- respondents. required a ment test carrier had been un- qualify meet to for exclusion/removal HENDERSON, BROWN and Before: previous rules. Because the der two PTC KAVANAUGH, Judges. Circuit that its mem- Institute has not established by for the Court filed Circuit Opinion inju- imminent present bers now face a Judge HENDERSON. omission, ry the 2012 Final Rule’s we challenge ripe. conclude its is not

Concurring Opinion filed Circuit Judge KAVANAUGH. I. HENDERSON, KAREN LeCRAFT 2008, Congress In enacted the Act Judge:

Circuit intent, alia, prevent inter “to rail- with the (Institute) Institute, Inc. Chlorine fatalities, injuries, and hazardous ma- road challenges promulgated the final rule 110-432, 122 terials releases.” Pub.L. No. the Federal Railroad Administration gov- 104 of the Act Stat. 4848. Section (FRA) implement section 104 of the Rail “Complementation positive of train erns 2008(Act), Safety Improvement Act of later systems” requires control that no requires qualifying that a rail carri- date of than 18 months after its enactment implementation plan er install 16, 2008, submit each Class I railroad October (PTC) system2 train “positive a control” any entity providing regularly carrier3 and 31, no later than December 2015 on certain rail intercity pas- scheduled or commuter passenger senger transportation develop tracks used for service or for and submit toxic-by-inhala- Department Transportation of transporting “poison- or wrong repre- through position.” a Institute is a trade association switch left in the distributors, 20157(i)(3); senting producers, packagers, 49 C.F.R. subt. see II, 236, B, pt. Subpt. suppliers related ch. I. users and of chlorine and products. having oper- 3.A Class I carrier is one annual system system designed pre- ating $250 or more. 2. A PTC is “a revenues million collisions, Reg’l Transp. Auth. v. over-speed de- Commuter Rail Div. vent train-to-train railments, Bd., 24, Transp. 28 n. 2 incursions into established work Surface 1201.1-1). limits, (D.C.Cir.2010) (citing 49 C.F.R. and the of a train zone movement train FRA has implementing positive promulgated a since three suc- plan 31, 2015, system by December control final governing cessive rules PTC. The governing operations on— rule, first issued in estab-

(A) main line over which inter- year lished calendar 2008 as the baseline city passenger transportation rail or year for determining whether a main line transporta- passenger commuter rail passenger carries either or PIH traffic so tion, as defined section to require as PTC. Positive Train Control regularly provided; (Jan. Systems, (B) poison- its main line over which 2010) Rule) (49 (January 2010 Final C.F.R. mate- toxic-by-inhalation or hazardous 236.1005(b)(2) (2010)). § Recognizing, rials, as defined in C.F.R. [49 §§] however, that routing change could be- 171.8, 173.115, ..., and 173.132 are tween the 2008 baseline and the Act’s De- and transported; implementation cember 2015 PTC (C) such other tracks as the Secre- deadline, January the per- Final Rule tary Transportation] may pre- [of mitted a railroad request to the “[e]xelu- by regulation scribe or order. sion segments or removal of track 20157(a)(1).4 § fur- 49 U.S.C. Section 104 PTC baseline ... upon [the] based (1) Secretary “pro- ther authorizes the to changes in rail traffic such as in reductions guidance vide technical and to assistance total traffic volume or cessation of passen- railroad in the developing [re- carriers (49 ger or PIH service.” Id. at 2701 (2) quired plans,” requires the Secre- PTC] 236.1005(b)(4)® (2010)). § C.F.R. “In the tary to conduct an annual review to ensure case of of PIH traffic cessation over a compliance the carriers’ therewith and to segment,” request track was to be report Congress to thé no later than De- approved “upon by a showing the railroad progress cember on the carriers’ ... remaining is no PIH [t]here local (3) Secretary and authorizes the to assess expected traffic segment” the track and penalties violating any civil for of section that the PTC a satisfied exclusion/removal 20157(b)-(e). § In provisions. 20157’s Id. (1) test, two-part included: which “al- addition, 104(g) Secretary section vests the analysis ternative route” requiring that al- implementation authority: with broad route(s) ternative to the excluded tracks Secretary prescribe regula- shall substantially be “shown to be as safe necessary imple- tions or issue orders (2) tracks; secure” as the excluded a section, including regulations ment this that, analysis, requiring “residual risk” af- in specifying appropriate technical detail traffic, ter of PIH remaining cessation “the positive the essential functionalities of PTC-preventable risk associated with acci- train systems, control and the means average dents” not comparable exceed the systems qualified. which those will be required risks of other tracks to be PTC- § 20157(g).5 Accordingly, July Id. in (49 equipped. Id. 2701-02 C.F.R. proposed FRA issued a notice of rulemak- 236.1005(b)(4)® (2010), § superseded by 49 ing implement the mandate. Positive (effective 35,950 § C.F.R. 236.1020 Nov. Systems, Fed.Reg. Train Control 2009). 2010)).6 (July 1.49(oo) (2009), 1.89(b) segment § § term line’ a "The 'main means recodified at id. 5,000,000 route of railroad tracks over which (2012). gross or more tons of railroad traffic is trans- 20157(f)(2). ported annually....” January 6.The test was new in the proposed 2010 Final Rule. rule had sim- Secretary delegated 5. The to the FRA his au- thority implement the Act. 49 C.F.R. due to cessation of materi- January Final Rule mentation

Finally, the (2010-11)). 75 rerouting.” als service or warned: the reworded Under rule; however, FRA has final This is a (but substantively unchanged) regulation, for provisions specific identified required to show that each carrier was making changes to considering we are PIH materi- remaining there was “no local rule, public if warranted the final segment” track expected als traffic on the expect pub- comments received. We rerouting passed and that both comments, response to those lish our route” and the “residual risk” “alternative including any possible changes 59,117 qualifying test. Id. at them, prongs as as rule made as result soon (2010)). (49 236.1020(b)(l-3) com- 49 C.F.R. following the end of the possible However, limited ar- period. ment Railroads The Association of American open for additional com- eas of this rule (AAR) both petitioned this court review requirement not affect the ment do Sep- 2010 Final Rule and plans and submit prepare railroads to Rule, challenging, Final inter tember 2010 with the deadlines estab- accordance alia, “backward-looking” 2008 the baseline. in this final rule. lished Br., Am. v. Fed. See Pet’r Ass’n. R.Rs. of particular, In it advised: Id. at 2598. Admin., 10-1308, at R.R. Nos. 10-1198 & 2010). (D.C. 2, FRA continue to seek comments 10, will Cir. Nov. On March 36 clarity, increasing settlement, the certain- 2011, limited AAR and FRA reached a transparency gov- of the criteria ty, abey- in agreeing to move to hold the case [Imple- a erning the removal from PTC rulemaking a pending proceed- ance new (and 2011, therefore from the 3, Plan] mentation ing. granted March we their On PTC) of track requirement to install R.R. motion. Ass’n. Am. R.Rs. Fed. of systems (D.C. have segments Admin., on which PTC Nos. 10-1198 & 10-1308 2011) order). a railroad yet 3, to be installed for which curiam (per Cir. filed Mar. in- requirement relief from the seeks settlement, August to the in Pursuant Any further comments stall PTC.... 2011, Proposed FRA a Notice of filed new scope be limited to the should Rulemaking eliminating to consider the in preamble issues indicated this from two-part test for exclusion/removal FRA further comments. which seeks Train the 2008 baseline. Positive Control Id. at 2605. 52,918, 52,921 Systems, Fed.Reg. (Aug. 76 2011). 24, 2012, May published In FRA hearing, comments and a

After further Rule, Final precisely FRA its second final rule in the 2012 which did promulgated that, “Having in stating preamble: 2010. Positive Train September Control 59,108 27, public comments on the Systems, Fed.Reg. (Sept. 75 considered Rule). 2010). Proposed Rulemaking], of FRA is (September [Notice 2010 Final eliminating this final rule September promulgating 2010 Final Rule left the exclu- 28,- 77 at provision largely unchanged qualifying two tests.” sion/removal that newly promul- explained retaining it a 286. FRA separate, but moved two-part potentially require test “could gated regulation, 49 C.F.R. 236.1020 (“Exclusion system implementation great at a segments imple- of track PTC proposed rule with the de-

ply changes the 2008 base contained in the “said " safety.' granted with could be if ‘consistent objective greater predict- providing of sired Rule, Reg. 2010 Final 75 Fed consistency ability, transparency, and in deci- explained FRA that the test making.” Id. at 2620. sion safety' with notion "fleshes out 'consistent

927 148-149, 1507, that will not 87 S.Ct. 18 L.Ed.2d 681 the railroads on lines cost to (1967)). traffic as of Decem- “Part of the doctrine is subsumed PIH materials carry III 31, Accordingly, requirement into the Article of stand 2015.” Id. at ber Rule, ing, requires petitioner allege an a 2012 Final under the exclusion/re- showing injury-in-fact that is ‘immi approved upon inter alia request moval ” that, 31, 2015, ‘certainly impending.’ nent’ or Am. Petro there will as of December EPA, 382, service or PIH traffic on leum Inst. v. 683 F.3d 386 passenger be no (codified (D.C.Cir.2012); 28,305 at 49 see Blanchette v. Conn. the tracks. Id. (2012)). 102, 138, 236.1005(b)(4)(ii) Corps., The Gen. Ins. 419 U.S. 95 C.F.R. (1974) (“[I]ssues timely for review. L.Ed.2d 320 petitioned Institute S.Ct. involve, ripeness part, of at least II. existence of a live ‘Case or Controver ”); sy’.... Wyo. Outdoor Council v. U.S. review FRA’s Ordinarily, we would (D.C.Cir. Serv., Forest 48 Act under Chevron interpretation of the 1999) (“Just standing as the constitutional Inc. v. Natural Resources USA Defense jurisdiction requirement for Article III Council, 81 467 U.S. S.Ct. involving injury-in-fact, not disputes bars (1984), application FRA’s L.Ed.2d 694 ripeness requirement excludes cases Administra pursuant the statute of injury.”); Trea involving present not Nat’l Act, seq. §§ 701 et tive Procedure States, sury Emps. Union v. United Dep’t Transp., Ass’n Am. R.R. v. See (D.C.Cir.1996) (D.C.Cir.1994). Here, (“Ripeness, F.3d F.3d howev spoken justiciability while often of as a er, jurisdiction lack to consider the we in fact standing, doctrine distinct from arguments on the merits be Institute’s requirement shares the constitutional of challenge ripe. is not See Exxon cause its FERC, 204, standing injury certainly 207 that an in fact be Corp. v. 501 F.3d Mobil (“Before (D.C.Cir.2007) The Institute has failed impending.”).7 we reach the mer ..., part ripeness the this of the test because it has we consider whether issue that it an immi question review.... The not demonstrated faces ripe judicial for subject certainly impending injury. nent or ripeness goes of to our matter jurisdiction, and thus we can raise the injury, To such an the establish any (quotation at time.” sponte issue sua show that “at least one of Institute must omitted)). marks suffering ‘is under threat of its members “injury par in fact” that is concrete and ripeness

The doctrine is “de courts, ticularized the threat must be actual signed prevent through [and] ‘to the imminent, conjectural hypo or adjudication, from and not premature avoidance of ” Home Builders in abstract dis thetical.’ Nat’l Ass’n entangling themselves of (D.C.Cir.2011) EPA, 12 v. agreements policies, over administrative Inst., judi (quoting v. Earth Island protect agencies and also to the Summers 488, 493, de 555 U.S. 129 S.Ct. cial interference until an administrative (2009)); De Lujan L.Ed.2d 1 see also has formalized and its effects cision been 555, 560, Wildlife, 112 challenging 504 U.S. way by felt in a concrete the fenders of ” (1992). 2130, 119 L.Ed.2d 351 Park Ass’n v. S.Ct. parties.’ Hospitality Nat’l 807-08, “directly are Interior, Institute claims its members 538 123 Dep’t U.S. of (2003) decision to no (quot injured by policy FRA’s S.Ct. 155 L.Ed.2d Gardner, during traffic movements longer rely upon ing Abbott Labs. v. 387 U.S. ” refusing jurisdiction.’ Am. 'constitutionally ripe,’ for to exercise 7. "Even if a case is EPA, F.3d at 386. though, may 'prudential Petroleum Inst. v. there also be reasons (“No Implementation predict Id. one can the result of 2008 as the basis PTC Cf. every application two-part the elimination of the each and of the Plans and [] ability any track two-part resulting segment....”). test and the test Nor has any or eliminate chlo- the Institute asserted carrier the railroads to restrict has di- rail,” transportation by rine because minished'—or is about to diminish— longer shipping ability only be to travel over individual member’s traffic will no able — See, equip e.g., that a carrier does not that a carrier could those tracks do so. Id. (“[WJith 6; passage Pet’r Br. see also id. at 7-8 at 8 the [Act] with PTC. injury imposed by inadvertently FRA in were (citing given “the railroads year eliminating perfect opportunity 2008 as the base for de- to restrict or eliminate PTC, segments requiring chlorine termining shipments (emphasis track rail.” (“[T]he added)); allowing Reply eliminating test Br. 13-14 rail- major permitted the nation’s railroads to reduce the roads will be to avoid in- PTC trackage they carry over which chlorine stallation on thousands of miles of rail (“The materials”); and other TIH id. at 9 tracks. absence of PTC on those relationship prohibit causal between the elimina- tracks will mem- Institute’s year tion of the 2008 base and the from shipping two- bers chlorine over those injure part ability test was to chlorine and other tracks and eliminate the for those shippers by TIH limiting eliminating members to market their chlorine in the ability ship products by their their normal (emphasis course of business.” rail.”). added)). Institute, According acknowledges FRA that elimi- impact shippers, nating “most immediate on TIH the two-part test will result in a including shippers, map chlorine would be to “smaller of PTC-equipped seg- line severely ments,” limit ability causing or eliminate their rerouting more of PIH rail, product by ship and thus to remain in traffic than under the 2010 rules. See Rule, manufacturing consuming chlorine 2012 Final added). (emphasis rerouting business” Id. But But necessary is a con- —which the described impact specu- sequence is—at Congress’s decision to re- most— stage, lative. At this we do not know strict PIH traffic to PTC-equipped which track segments will be fitted with not necessarily “severely tracks —does plans PTC under the that are limit” submitted or “eliminate” a chlorine shipper’s ultimately by carriers and approved ability ship product by its rail —it sim- FRA—much less whether ply requires Institute a different shipping route be ability ship sig- member’s point, will be used. At this we do not know how nificantly routing affected because more may change tracks whether the addi- —or require will not PTC under the 2012 Final tional rerouting under the 2012 Final Rule Rule than would have under the affect—an ability will Institute member’s September 2010 and 2010 Final transport Rules. chlorine.8 As the PTC Im- picture (STB), pros- 8. The blurred generally regulates further tion Board which pect rates, separate agencies may that three transportation, federal rail carrier service and FRA, (1) shaping § be involved in it: which see 49 U.S.C. 11101. FRA insists that the PTC; (2) regulates Pipeline authority and Hazard- STB’s exercise of its own to enforce Administration, Safety statutory ous Materials obligation a railroad carrier’s powers “provide transportation carries out "duties and related to [] or service on rea- pipeline 11101(a), transporta- request,” § hazardous materials sonable id. will ensure 108(f), safety,” including § availability carriage tion and 49 U.S.C. ship- of rail to PIH overseeing routing, pers. Argument Recording rail carrier 49 C.F.R. See Oral at 37:50 172.820; (3) 4, 2013) ("Positive Transporta- (Apr. the Surface Train Control takes face an actual and not this time or imminent process Plan advances plementation injury from the 2012 Final Rule. clearer, injury such impact becomes the Institute’s emerge and may indeed thereby ripen.9 It is not

challenge may

ripe now. reasons, we dismiss foregoing

For the jurisdic- for lack of petition Institute’s America, UNITED STATES tion. Appellant ordered.

So ALI, Ali Mohamed also known as Adan, Ahmed Ali also known KAYANAUGH, Judge, Circuit Ali, Appellee. as Ismail concurring: No. 12-3056. add a join opinion I the Court’s but of Appeals, United States Court my resolution of the point significant District of Columbia Circuit. argument, at oral case. As was discussed Transportation Board will en- the Surface Argued Nov. 2012. shippers that chlorine continue to re- sure Decided June 2013. transportation ceive common-carrier En transportation Rehearing such is rea- Banc Denied railroads when Aug. sonably requested. See 11101(a) (“A providing rail carrier trans- subject jurisdic- or service portation part

tion of the Board under this shall transportation or service on

provide the Board request.”).

reasonable When

requires provide a railroad to common- shippers,

carrier service to chlorine shipment

railroad will have to allow

and, necessary Safety if under the Rail

Improvement Act of will have to positive track with train

equip relevant understanding, join I

control. With that judgment opinion of the Court

holding that the Chlorine Institute does carriage require- Upon receipt plan], posts a [PTC backseat to the common FRA ment.”). tangled We need not unravel the receipt public notice of web site regulatory only interaction but note that it public docket in which a reference unpredictability regarding adds to the future copy filing placed. FRA has been transportation availability. may any public each consider comment on practicable within document to the extent Rule, parties

9. Under the 2012 Final third delay- the time allowed law and without opportunity to such as the Institute “have an systems. ing implementation of PTC plans express their views on the submitted pursuant to the PTC rule.” 77 236.1011(e): Under 49 C.F.R.

Case Details

Case Name: Chlorine Institute, Inc. v. Federal Railroad Administration

Court Name: Court of Appeals for the D.C. Circuit

Date Published: Jun 11, 2013

Citation: 718 F.3d 922

Docket Number: 12-1298

Court Abbreviation: D.C. Cir.