WESTERN COAL TRAFFIC LEAGUE, PETITIONER v. SURFACE TRANSPORTATION BOARD AND UNITED STATES OF AMERICA, RESPONDENTS
No. 20-1058
United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 4, 2021 Decided May 28, 2021
On Petition for Review of Orders of the Surface Transportation Board
William L. Slover argued the cause for petitioner. With him on the briefs were John H. LeSeur and A. Rebecca Williams.
Erik G. Light, Attorney, Surface Transportation Board, argued the cause for respondents. With him on the joint brief were Michael F. Murray, Deputy Assistant Attorney General, U.S. Department of Justice, Robert B. Nicholson, Attorney, Craig M. Keats, General Counsel, Surface Transportation Board, and Anika S. Cooper, Deputy General Counsel. Kathleen S. Kiernan, Attorney, U.S. Department of Justice, entered an appearance.
Before: SRINIVASAN, Chief Judge, WILKINS, Circuit Judge, and SILBERMAN, Senior Circuit Judge.
Opinion for the Court filed by Senior Circuit Judge SILBERMAN.
Dissenting opinion filed by Circuit Judge WILKINS.
I
The Surface Transportation Board is charged with oversight of the freight rail industry. It regulates carrier “rates” and “practices.”
This petition concerns a Board Rule governing “fuel surcharges,” or charges that rail carriers impose to recover increases in fuel costs. Two decades ago (in response to rising fuel prices), rail carriers began to assess fuel surcharges as a separate, added percentage on top of the base rate for transportation. Shippers challenged the surcharges before the Board, arguing that imposing “fuel surcharges” was an unreasonable practice. Because the base rate is determined by market forces—not simply carrier costs—imposing the surcharge over the base rate as a fixed percentage, in the shippers’ view, resulted in overcharges for fuel.
In response to the shipper‘s complaints, the Board adopted a rule requiring carriers to calculate fuel surcharges based on factors tied to the movement of goods—e.g., mileage and weight—rather than a percentage over the base rate. Rail Fuel Surcharges, Ex Parte No. 661, 2007 WL 201205, at *4 (S.T.B. Jan. 25, 2007) (“the Rule“). The Board further specified that a fee may not be called a “fuel surcharge” if it recovers more than the carrier‘s actual fuel costs (carriers can still impose profit-generating fees under a different label). Id. Nevertheless, the Board also adopted a “safe harbor” fuel index that shippers could use to approximate actual changes in fuel prices. Id. at *8. To calculate a “fuel surcharge,” rail carriers could rely on changes in the safe harbor index (even if doing so generates a profit) instead of determining the actual change in fuel costs.1
Over time, the Board perceived a potential problem with its safe harbor provision. In Cargill, Inc. v. BNSF R. Co., Docket No. NOR 42120, 2013 WL 4067719 (S.T.B. Aug. 9, 2013), the defendant carrier had implemented a mileage-based fuel surcharge formula based on the safe harbor index. But the defendant‘s actual incremental fuel costs were far lower than its fuel surcharge (to the tune of some $181 million over five years). Id. at *11.2 The Board explained that this result could be attributed to a growing spread between index fuel prices and the carrier‘s de facto fuel prices. As the Board noted, the safe
Still, the Board noted that this result “raised concerns about the safe harbor,” explaining that the safe harbor “provides rail carriers with an unintended advantage” by offering them a choice. Id. at *14. If the change in actual fuel costs is greater than the change in the safe harbor index, a railroad can revise its fuel surcharge program to recover actual costs. But if the change in the index is greater than the change in actual costs, the safe harbor allows a railroad to collect a profit that cannot be challenged as an unreasonable practice. Id. Accordingly, “[b]ecause it is possible this aspect of the safe harbor provision could lead to future abuse” the Board stated its intention to “issue an [ANPRM] to give shippers, rail carriers, and other interested parties the opportunity to comment on the safe harbor, including whether it should be modified or removed.” Id.
As promised, the Board issued a broad ANPRM to facilitate evaluation of the existing safe harbor provision:
We are seeking comments from the public on whether the safe harbor provision of Fuel Surcharges should be modified or removed. In particular, we seek comments on: [1] whether or not the phenomenon that we observed in Cargill (a growing spread between a rail carrier‘s internal fuel costs and the [Safe Harbor] Index) was likely an aberration; [2] whether there are problems associated with the Board‘s use of the [Department of Energy‘s] Index as a safe harbor in judging the reasonableness of fuel surcharge programs; [3] whether any problems with the safe harbor could be addressed through a modification of it; and [4] whether any problems with the safe harbor are outweighed by its benefits. Parties are also encouraged to comment on any other matter that they believe bears on whether the safe harbor should be modified or removed.
Five years after the close of the ANPRM comment period, the Board discontinued the Safe Harbor docket.3 The Board‘s
decision described the history of the safe harbor index as well as noted the various perspectives contained in the 15 comments and 10 replies that it received. Those comments were varied; some commentors supported repeal of the safe harbor, some advocated for keeping it as is, and still others suggested keeping the safe harbor in some modified form. Similarly, the commenters did not agree on whether the Cargill issue was an aberration, whether there was enough information to answer that question, or whether Cargill represented an advantage or disadvantage of
Since the comment period closed in 2014, the Board has been unable to reach a majority decision on what additional Board action should be taken in response to the comments received. Because of the lack of a majority opinion and in the interest of administrative finality, the Board Members agree that this docket should be discontinued.
Safe Harbor, No. EP 661 (SUB-No. 2), 2019 WL 4127256, at *2 (S.T.B. Aug. 28, 2019).
Each of the Board‘s three members published separate statements explaining their preferred course of action. Board Chairman Ann Begeman explained her view that the safe harbor provision is “misguided” and should be repealed. Id. at *3. Board Member Martin Oberman would reverse the Rail Fuel Surcharges Rule in its entirety—not just the safe harbor provision. In his view, the Rule is really an impermissible rate regulation (as opposed to a practice regulation). Id. at *4. Board Member Patrick Fuchs thought the Rule suffered from internal tensions—if it was not self-contradictory. And he would not risk “exacerbating” those tensions “by modifying or removing the safe harbor provision.” Id. at *3. Citing reliance interests, Fuchs went on to explain that he would not reverse the entire Rule but would instead advance reforms to how the Board evaluated overall rates. Id. at *4.
The League sued to set aside the Board‘s termination of the ANPRM as arbitrary and capricious. Although Petitioner did not explicitly indicate what it thought would ensue if it prevailed, it seems that the League expected that such an order would lead to a continuation of the rulemaking process. In any event, in light of the Board‘s deadlock, we asked the Parties to explain how any order from this court would offer Petitioner relief. In other words, is Petitioner‘s injury redressable?5
II
Petitioner argues that the Board acted unreasonably by deadlocking. It contends that an impasse “does not excuse an agency from issuing a ‘well-reasoned’ merits decision that considers ‘the relevant factors.‘” Pet‘r Br. 25 (citing Radio Television News Dirs. Ass‘n v. FCC, 184 F.3d 872, 885-86 (D.C. Cir. 1999)). The Board counters that dismissal for deadlock was entirely proper.
We think Petitioner lacks standing. It is obvious that the League alleges an injury-in-fact: The costs of shipping are supposedly too high. Causation is also easily met because the Board‘s safe harbor provision, coupled with the Board‘s failure to issue a rule that would modify or eliminate that provision, plausibly created the higher rates. Petitioner‘s problem is the third standing requirement, redressability. To satisfy that requirement, the asserted injury must be “capable of resolution and likely to be redressed by judicial decision.” Sierra Club v. EPA, 755 F.3d 968, 973 (D.C. Cir. 2014). Here, Petitioner‘s claim is not capable of resolution through a judicial
The Board is deadlocked over the whole question as to what, if anything, it should do about fuel surcharges. That issue—as is true of all relevant policy decisions—is delegated to the agency, not our court. We certainly lack authority to order any individual Board Member to change his or her policy position. Yet, Petitioner implicitly asks us to compel the Members to reach agreement—akin to (but even exceeding the bounds of) an Allen charge that a district judge might issue to a deadlocked jury. But a federal administrative agency is not a jury; it is an organ of a coequal branch of government. We are without power to issue an order to break the deadlock.
According to the dissent, the Board should “hire consultants [or] hold hearings” as a prod to break the deadlock. Dissent at 8. That seems to us to be an imposition of added procedures exceeding the APA‘s requirements. See Vermont Yankee Nuclear Power Corp. v. Nat. Res. Def. Council, Inc., 435 U.S. 519, 543–545 (1978). In addition to imposing new procedures, the dissent‘s solution doesn‘t respect the Board‘s autonomy. In any event, given the five-year deadlock, the dissent‘s prescriptions are a recipe for the continued spinning of wheels.
Those suggestions highlight a fundamental disagreement that we have with the dissent. Of course, a favorable decision must be “likely to [] redress[]” the asserted injury. E.g., Valley Forge Christian Coll. v. Americans United for Separation of Church & State, Inc., 454 U.S. 464, 472 (1982). (Or, assuming a procedural injury, “some possibility” of redress, see Massachusetts v. EPA, 549 U.S. 497, 517 (2007).) This inquiry normally overlaps with causation, since correcting the conduct that causes an injury typically solves the problem. But rarely—as in this case—causation is satisfied but redressability is not. That is because the requested relief is itself an authority we do not possess. See e.g., Frothingham v. Mellon, 262 U.S. 447, 489 (1923); cf. Franklin v. Massachusetts, 505 U.S. 788, 802 (1992) (plurality) (separating out the “thornier standing question” of whether the judicial power extends to injunctive relief against the President).
Admittedly, we remanded to a deadlocked agency in Radio-Television. 184 F.3d 872. In that case, the FCC (after fifteen years of attempted rulemaking and two mandamus petitions) deadlocked 2–2 on its proposal to repeal personal attack and political editorial rules. Without addressing our jurisdiction—and without objection from the Commission— we issued an unpublished opinion requiring the two commissioners voting against repeal to explain their rationale in a joint statement. 159 F.3d 636 (D.C. Cir. 1998) (unpublished table decision). Later finding that court-mandated explanation inadequate, we vacated the joint statement and remanded to the Commission for further deliberation. 184 F.3d at 880–89. After the deadlock persisted for an additional two years, we issued a writ of mandamus directing the Commission to immediately repeal its rules. 229 F.3d 269, 272 (D.C. Cir. 2000).
Radio-Television does not stand for the proposition that we have the general power to break agency deadlocks. It is crucial to recognize that case does not constitute a precedent on jurisdiction because it failed to address that question. See Lewis v. Casey, 518 U.S. 343, 352 n.2 (1996) (“[T]he existence of
Even if it had contemplated jurisdiction, Radio-Television should be distinguished. There, the FCC had “imposed upon itself a particularly heavy burden” to justify its existing rules. 184 F.3d at 886 (internal quotation and citation omitted). In light of the Commission‘s elimination of the fairness doctrine (on which the attack and editorial rules were predicated), the FCC had previously articulated that its rules would be repealed unless it could articulate a good reason to keep them. We explained that the FCC had, rather uniquely, “framed the [] rulemaking proceeding in terms of providing a persuasive rationale for a rule that seemed unnecessary” (if not illegal). Id. (internal quotations and citations omitted). And, having taken on this heavy burden, we saw no problem with holding the agency to its self-imposed standard. But in the present case, the Board has accepted no such heightened burden, and an agency decision to dismiss an ANPRM is entitled to “very substantial” deference. Consumer Fed‘n of Am. v. Consumer Prod. Safety Comm‘n, 990 F.2d 1298, 1304–05 (D.C. Cir. 1993).
* * *
Creatively, Petitioner presents us with two arguments that indirectly attack the deadlock: (1) We should review the individual statements of the Board Members and conclude that two of the three are arbitrary and capricious (the third apparently agrees with Petitioner), and (2) the whole Board‘s failure to answer one of the four questions it posed in its ANPRM—whether the Cargill decision was an “aberration“—was itself unreasonable. “With that answer in hand,” the League explains, the Board “could turn to rationally address the issue of whether it should modify or eliminate the safe harbor.” Pet‘r Br. 24.
The first alternative argument is quite out of bounds. We exercise judicial review only over the actions of the Board, not over the substance of the views of the individual commissioners. Compare
statements of the Board Members are akin to concurring (or dissenting)
To be sure, we could examine the separate statements for the limited purpose of determining whether an agency‘s members have acted in bad faith. See San Luis Obispo Mothers for Peace v. U.S. Nuclear Regul. Comm‘n, 789 F.2d 26, 44–45 (D.C. Cir. 1986) (en banc). But that proposition does not extend to empowering a court to determine whether the positions of individual commissioners are reasonable. In this respect, the situation is similar to our refusal to consider internal deliberations that lead to the decision of a single head of a department or agency. We would permit such an inquiry only if faced with a strong showing of bad faith, which Petitioner does not argue is present here. See Citizens to Pres. Overton Park, Inc. v. Volpe, 401 U.S. 402, 420 (1971). Indeed, there is not a shred of evidence to suggest that the Members’ irreconcilable policy differences are somehow artificial or not in good faith.
We turn to Petitioner‘s other alternative argument, that the Board acted unreasonably when it did not consider whether the Cargill decision was an “aberration.” Although our review is highly deferential, it is true that we have required agencies (in the absence of a deadlock) to provide satisfactory explanations for the dismissal of a rulemaking docket. See, e.g., Consumer Fed‘n of Am., 990 F.2d at 1305–08. If not, we have set aside the agency‘s dismissal for it to adequately determine whether to continue the rulemaking. Williams Nat. Gas Co. v. FERC, 872 F.2d 438, 450 (D.C. Cir. 1989). Petitioner‘s view is not just that the deadlock is a problem, but that the agency failed to consider an important aspect of the problem. Overcoming the impasse, according to Petitioner, directly flows from appropriate consideration of the Cargill issue.
This argument is a distinction without a difference. In effect, the League attempts to end run the Board‘s deadlock. Petitioner‘s focus on Cargill is clever but rather arbitrary. After all, it was only one of four issues the Board mentioned in its ANPRM. And it is wholly speculative, assuming the Board would conclude that Cargill is not an aberration, that the Board would come to an agreement on what to do about fuel costs, and then reach an accord—after five years of impasse—about whether to modify the rule. The Board did not tell us that it was at loggerheads about Cargill—it was at loggerheads about what to do about the fuel surcharges problem all together.
Assuming we could review the Board Members’ separate statements as evidence in our jurisdictional inquiry, those statements confirm that considering Cargill would make no difference.7 It is not apparent how consideration of the aberration
It will be recalled that Chairman Begeman wished to repeal the safe harbor rule—and would thus give Petitioner the result it seeks. The views of Board Members Oberman and Fuchs, on the other hand, turn on their legal analysis, not the factual question of whether Cargill is an aberration. Board Member Oberman would reverse the Rule in its entirety—not just the safe harbor provision. In his view, challenges to fuel surcharges are really objections to the reasonableness of the overall rate. Such challenges must, as a matter of law, be brought as a rate challenge rather than a practice challenge. Board Member Fuchs similarly would not risk “exacerbating” the tension between the Board‘s standard of review for rail surcharges (as a practice) and the standard of review for rates (requiring market dominance) by eliminating or modifying the safe harbor.
The dissent agrees with Petitioner‘s Cargill-centric argument, reasoning that “[h]ad the Board acknowledged the evidence” that Cargill is a problem, “there is at least a reasonable probability it would have decided to continue working on a solution.” Dissent at 14. And that, in the dissent‘s view, “is all that Western Coal requests from this Court.” Id. But, if mere continued deliberation is really all Petitioner seeks, redressability of its injury is clearly lacking. Petitioner must, at least, link a permissible court order to its concrete injury, not simply to an extension of the (so far futile) deliberations. See Narragansett, 949 F.3d at 13–14 (injury not redressable where petitioner “does not explain how any correction of procedural course would help it or what it could obtain out of a remand.“).
Contrary to the dissent‘s suggestion, we do not hold that Petitioner must show that it would achieve a different substantive outcome. Our holding is a modest one: Where an agency has dismissed an ANPRM because it is mired in a good-faith deadlock, judges lack the power to pick the winning policy position. Sending the dispute back for continued deliberations—where nothing in the record indicates the reasonable possibility that remand would break that impasse—does not remedy Petitioner‘s injury.8
The dissent assumes that an alleged failure to address a major issue is a procedural injury. But we very much doubt that is so. Undeniably, we have “struggled” with the distinction between substance and procedure. See JEM Broadcasting Co., INC v. FCC, 22 F.3d 320, 327 (D.C. Cir. 1994). Depriving a party of the opportunity to participate in notice and comment is, for instance, a procedural injury. See Summers v. Earth Island Institute, 554 U.S. 488, 496–97 (2009). But the failure to respond to significant comments—which is what Petitioner essentially claims—violates a substantive guarantee of the APA. As Justice White famously described, agency action is arbitrary and capricious if it “entirely failed to consider an important aspect of the problem.” Motor Vehicle Mfrs. Ass‘n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983). He did so in a list of actions that are all substantive—not procedural—violations of the APA. Id.; see also Lilliputian Sys., Inc. v. Pipeline & Hazardous Materials Safety Admin., 741 F.3d 1309, 1312 (D.C. Cir. 2014).9 Logically, Petitioner‘s claim that the Board failed to consider whether Cargill was an aberration is no different than whether an agency properly considered a statutory provision. We don‘t
think that redressability is “relaxed” as the dissent believes. See Nat‘l Parks Conservation Ass‘n v. Manson, 414 F.3d 1, 5 (D.C. Cir. 2005) (whether an injury is categorized as substantive or procedural may affect our evaluation of chains of causation and redressability). However, assuming that the dissent is correct in describing the situation as involving a procedural injury, as we previously noted, the prospect of a remedy has to be a reasonable possibility. “Unadorned speculation will not suffice to invoke the judicial power.” Ctr. for L. & Educ. v. Dep‘t of Educ., 396 F.3d 1152, 1159 (D.C. Cir. 2005) (citations omitted).
Petitioner wishes us to hint that issue one in the ANPRM—whether Cargill is an aberration—is the crucial factor (even if cost-benefit analysis were to suggest no change is warranted). And the dissent appears to agree that the Cargill decision is, in fact, a problem. Even if we had jurisdiction over this case (which we do not), we think it is inappropriate to suggest that Petitioner is correct on the underlying issue, since that question is not before us.
The petition is dismissed.10
So ordered.
WILKINS, Circuit Judge, dissenting: The first step in solving a problem is recognizing there is one. In 2014, the Surface Transportation Board (“Board“) issued an advance notice of proposed rulemaking (“ANPR“) seeking comment from interested parties on whether the phenomenon it observed in the Cargill adjudication—where a rail carrier was found to have used a safe harbor provision to make over $180 million in revenue from the fuel surcharge—was an aberration, and, if so, whether and how to address this problem. Five years and one mandamus petition later, the Board discontinued the ANPR without responding to the comments it received. Contrary to the majority, I would hold that the Western Coal Traffic League (“Western Coal“) has standing to challenge the Board‘s discontinuation of the ANPR.
I.
The Surface Transportation Board is tasked with overseeing the freight rail industry and, in this capacity, reviews the rates rail carriers charge and the carriers’ practices.
In 2010, Cargill, Inc. (“Cargill“), a shipper of agricultural products, filed a complaint against carrier BNSF Railway Company (“BNSF“) with the Board. Cargill, Inc. v. BNSF Railway Co., 2013 WL 4067719 (S.T.B. 2013). Cargill alleged that BNSF was using the HDF Index to reap profits well in excess of its actual incremental fuel costs. The Board rejected Cargill‘s allegations. Id. at *5. The Board concluded that BNSF‘s reliance on the HDF Index to calculate the fuel surcharge was reasonable as long as BNSF used the “HDF Index as a proxy to measure changes in [its] internal fuel costs.” Id. at *11. The Board then calculated the changes in internal fuel costs using the HDF Index and concluded that BNSF did not over-recover fuel costs. Id. at *14.
But the Board recognized that BNSF‘s use of the safe harbor provision “raised concerns.” Id. The Board acknowledged that “the safe harbor can allow a rail carrier to recover more than its incremental fuel costs as measured by the carrier‘s internal fuel costs.” Id. In this instance, the Board calculated that BNSF‘s fuel surcharge revenues exceeded its incremental fuel costs by some $181 million over five years. Since the Board did “not know if this was a unique situation” or “a more widespread phenomenon” and was concerned that the safe harbor could “immunize . . . over-recovery from scrutiny,” the Board decided to “issue an advance[] notice of proposed rulemaking to give shippers, rail carriers, and other interested parties the opportunity to comment on the safe harbor, including whether it should be modified or removed.” Id.
True to its word, the Board issued an advance notice of proposed rulemaking in 2014. The Board requested “comments from the public on whether the safe harbor provision of Fuel Surcharges should be modified or removed.” J.A. 19. “In particular,” the Board requested comments on (1) “whether or not the phenomenon . . . observed in Cargill . . . was likely an aberration,” (2) “whether there are problems associated with the Board‘s use of the HDF Index as a safe harbor in judging the reasonableness of fuel surcharge programs,” (3) “whether any problems with the safe harbor could be addressed
The Board received a total of twenty-five comments from carriers, shippers (including Petitioner Western Coal Traffic League), and other interested parties. Most commenters who addressed whether the Cargill phenomenon was an aberration argued that it was not, and that carriers had pocketed hundreds of millions of dollars in profits from these fuel surcharges. One commenter suggested that it might be a common occurrence but warranted further study. The carriers unanimously supported preserving the status quo; the shippers were divided. Some shippers, including Petitioner, recommended that the Board eliminate the safe harbor. Other shippers suggested that the safe harbor be modified. One shipper suggested that the HDF Index was not the primary cause of fuel surcharge problems. The Board closed the record in October 2014.
Then the Board did nothing for five years. Two years after the record closed, Western Coal requested that the Board take action, but the Board denied its request. After five years of inaction, Western Coal petitioned this Court for a writ of mandamus. We referred the petition to a merits panel. Order, In re Western Coal Traffic League, No. 19–1080 (Aug. 23, 2019). Five days later, the Board issued its decision to
discontinue the ANPR, which rendered the mandamus petition moot.
In its decision, the Board catalogued the “varied” comments submitted in response to the ANPR. The Board acknowledged that “many [comments] did not directly address the Board‘s question about whether the . . . phenomenon seen in Cargill was an aberration.” J.A. 9. The Board noted that “[s]ome commenters claimed the Cargill outcome was an aberration, while another said there was insufficient evidence to answer the question.” Id. (footnote omitted). But the Board did not acknowledge the numerous commenters who argued that the Cargill phenomenon was not an aberration and the evidence they presented that suggested that shippers were reaping profits in the hundreds of millions of dollars.
The Board “recognize[d] and appreciate[d] that commenters devoted substantial time and effort to responding to the” ANPR. J.A. 10. But the Board stated that it was “unable to reach a majority decision on what additional Board action should be taken in response to the comments received.” Id. Thus, “[b]ecause of the lack of a majority opinion and in the interest of administrative finality,” the Board discontinued the ANPR. Id.1
II.
To establish the “irreducible constitutional minimum” of standing, the plaintiff must have “(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Spokeo, Inc. v. Robbins, 136 S. Ct. 1540, 1547 (2016) (quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 560-61 (1992)). “When determining whether a plaintiff has Article III standing,” we must assume that the plaintiff “will prevail on the merits.” Comm. on Judiciary of U.S. House of Reps. v. McGahn, 968 F.3d 755, 762 (D.C. Cir. 2020) (en banc). The majority concludes that Western Coal has failed to establish that its injury is redressable. I respectfully disagree.
We have held that when “a party alleges deprivation of its procedural rights, courts relax the normal standards of redressability.” Sierra Club v. FERC, 827 F.3d 59, 65 (D.C. Cir. 2016) (citing Summers v. Earth Island Inst., 555 U.S. 488, 496-97 (2009)). “[T]he relaxed redressability requirement is met when correcting the alleged procedural violation could still change the substantive outcome in the petitioner‘s favor; the petitioner need not go further and show that it would effect such a change.” Narragansett Indian Tribal Historic Pres. Office v. FERC, 949 F.3d 8, 13 (D.C. Cir. 2020). Thus, a party has satisfied the redressability prong when prevailing on the merits would require the agency to “incorporate into its . . . analysis the omitted” data, and “[u]pon considering [this data], the [agency] could change its position.” Sierra Club, 827 F.3d at 67; see also Ctr. for Biological Diversity v. EPA, 861 F.3d 174, 185 (D.C. Cir. 2017) (finding that the petitioner satisfied the redressability prong by showing that the agency “could reach a different conclusion” with the necessary data). The relaxed standard of redressability is clearly met here.
In issuing the ANPR, the Board specifically framed its central question of whether to modify or remove the safe harbor provision around “whether . . . the phenomenon . . . observed in Cargill . . . was likely an aberration.” J.A. 19. Although the Board did not know “if this was a unique situation,” Cargill, 2013 WL 4067719, at *14, it qualified that “a more widespread phenomenon . . . could undermine the usefulness of the safe harbor provision.” J.A. 19. The Board further recognized that “the safe harbor provision provides rail carriers with an unintended advantage.” Id. Consequently, the Board issued the ANPR, which specifically asked interested parties to address “whether or not the phenomenon . . . observed in Cargill . . . was likely an aberration.” Id. In so doing, the Board made clear that if the Cargill phenomenon was a common occurrence, it would pose a
In answering whether the Cargill phenomenon was a common occurrence, the majority of commenters responded “yes.” But you would never know that from reading the Board decision, which did not acknowledge those comments at all. Instead, the Board gave the misimpression that the commenters either did not address Cargill, believed that Cargill was an aberration, or were not sure whether Cargill was an aberration. J.A. 9-10. This was absolutely false. The Board received multiple comments stating that the Cargill phenomenon was not an aberration.3 And these comments were not solely from shippers. Indeed, the United States Department of Agriculture, a government agency with expertise in rail transportation matters, submitted a comment stating that the Cargill phenomenon was likely not an aberration. J.A. 31. In ignoring these comments, the Board made it easier for itself to dodge the problem—because the Board could discontinue the proceeding without ever acknowledging the considerable evidence that there was a problem.
It is axiomatic that the first step of addressing a problem is to acknowledge that it exists. That is why the basic rule from State Farm is that agencies cannot ignore relevant data. As the Supreme Court made clear, “the agency must examine the relevant data and articulate a satisfactory explanation for its action including a ‘rational connection between the facts found and the choice made.‘” Motor Vehicle Mfrs. Ass‘n of United States, Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) (quoting Burlington Truck Lines v. United States, 371 U.S. 156, 168 (1962)). To hold that the injury is not redressable here is to undermine the basic premise of State Farm. The Board made a choice to give up; it could instead have made a choice to hire consultants, to hold hearings, to strive for a compromise, or to take any number of other steps commonly used when trying to forge a solution.4 Yet the Board never articulated any explanation, let alone a “satisfactory” one, for choosing to give up in the face of evidence that the Cargill phenomenon it had identified was endemic
made,” id., because the Board refused to acknowledge the facts.
It is much easier to give up on a mission if you believe that you can later say, with a straight face, that the mission was not really that important after all. That is what the Board did here—it said no one presented evidence that the Cargill phenomenon was a common occurrence, which made it easier for the Board to walk away from further efforts to forge a solution to the problem identified in the Cargill case. All that is required to show redressability in these circumstances is that if the Board were forced to address the evidence that the problem identified in Cargill was a recurring one, to the tune of hundreds of millions of dollars, the Board could decide to keep working on the problem, rather than throwing in the towel. See Sierra Club, 827 F.3d at 67.
That is not a heavy lift. Even though we have recognized that members of an agency “may cast their votes solely to void an impasse, or otherwise to draw the administrative phase to a close,” Pub. Serv. Comm‘n v. Fed. Power Comm‘n, 543 F.2d 757, 777 (D.C. Cir. 1974), we also explained that “[w]e d[id] not mean to suggest that a commissioner‘s vote, once made, imprisons him in an intellectual strait-jacket.” Id. After all, there is no “requirement, statutory or otherwise, that members of administrative agencies maintain consistent positions throughout the course of lengthy proceedings.” Id. But that is precisely what the majority assumes when it concludes that the Board members could not have changed their minds after properly considering the record before them. We set a dangerous precedent if we hold that an agency that not just ignores, but misstates the comments and evidence before it, could not change its mind if forced to truly address the record on remand. “[I]t bears repeating that the duty to respond to significant comments finds a statutory basis in required notice and comment procedures, for ‘the opportunity to comment is meaningless unless the agency responds to significant points raised by the public.‘” Alabama Power Co. v. Costle, 636 F.2d 323, 384 (D.C. Cir. 1979) (quoting Home Box Office, Inc. v. FCC, 567 F.2d 9, 35-36 (D.C. Cir. 1977)); Sugar Cane Growers Coop. v. Veneman, 289 F.3d 89, 95 (D.C. Cir. 2002) (Silberman, J.) (“If a party claiming the deprivation of a right to notice-and-comment rulemaking under the APA had to show that its comment would have altered the agency‘s rule, section 553 would be a dead letter.“).
The majority does not seem to dispute that the Board ignored the numerous comments indicating that the Cargill phenomenon was not an aberration. Yet, without acknowledging our precedent that Board members are not confined to an “intellectual straitjacket” and can change their minds during the course of a lengthy proceeding, Pub. Serv. Comm‘n, 543 F.2d at 777, and notwithstanding the bedrock principle that agency decision-making should be based on a consideration of all of the relevant facts, State Farm, 463 U.S. at 43, the majority holds that the Board could not change its decision even if it actually considered all of the facts. “Don‘t confuse us with the facts” is now apparently acceptable agency practice.
The majority errs further by holding that remand is futile because the Board could not possibly break its deadlock, even if it is told to consider the record evidence that it ignored. Maj. Op. at 15. As best as I can tell, this is the first time we have ever presumed, in a case where the agency ignored clearly material comments, that there is no chance that the agency‘s final
For the same reason, the majority‘s repeated declaration that this Court has no power to break the Board‘s deadlock is a red herring. Maj. Op. at 8, 9, 10, 15. Petitioner has not asked us to break the deadlock, but to find that the Board acted unlawfully by failing to consider all of the significant comments and to remand. Pet‘r Br. at 2, 23-27, 29. In Sugar Cane Growers, we reversed the district court‘s holding that the plaintiffs could not show redressability because they could not prove that the agency would have adopted a different rule had it considered the significant comments that were ignored, because requiring the plaintiffs to show that consideration of all of the comments would lead to a different outcome “simply misstates the law.” Id. at 94. By requiring Petitioner to prove that we can (and should) break the deadlock, the majority addresses a remedy that was never even sought, and it erroneously raises the redressability bar contrary to Sugar Cane Growers and numerous other cases. See Lujan, 504 U.S. at 572 n.7 (“There is this much truth to the assertion that ‘procedural rights’ are special . . . . [U]nder our case law, one living adjacent to the site for proposed construction of a federally licensed dam has standing to challenge the licensing agency‘s failure to prepare an environmental impact statement, even though he cannot establish with any certainty that the statement will cause the license to be withheld or altered . . . .” (emphasis added)); West v. Lynch, 845 F.3d 1228, 1237 (D.C. Cir. 2017) (holding that when an agency prepares an environmental impact statement, “the plaintiff need not allege that, if he were to succeed in enforcing a NEPA-required procedure the defendant agency did not follow, the agency‘s substantive policy would change“); Fla. Audubon Soc‘y v. Bentsen, 94 F.3d 658, 669 (D.C. Cir. 1996) (en banc) (“[I]n EIS suits, a court should not review redressability—whether the preparation of the EIS might alter the decision to license
The majority “doubts” that the failure to respond to significant comments is a procedural injury. Maj. Op. at 15. But the Supreme Court has held otherwise. See Perez v. Mortgage Bankers Ass‘n, 575 U.S. 92, 96 (2015). In Perez, the Supreme Court explained that an agency‘s obligation to “consider and respond to significant comments received during the period for public comment” was part of the three-step procedure for notice-and-comment rulemaking pursuant to
When it issued the ANPR, the Board acknowledged that the entire motivation for commencing the proceeding was that “th[e] result [in Cargill] concerned the Board.” J.A. 18. Had the Board acknowledged the evidence suggesting that the magnitude and scope of the Cargill phenomenon was indeed vast, there is at least
problems within their purview do not exist. It‘s always easier to take the route of the ostrich, but members of federal agencies swear an oath to solve the problems assigned to them by the Congress.
The claims of Western Coal satisfy Article III standing. I would therefore proceed to the merits.
III.
Although it faces a heavier burden on the merits than on standing, I would also find for Western Coal on the merits and vacate and remand to the Board. We review the Board‘s decisions under the standards set forth in the APA. Snohomish Cnty. v. STB, 954 F.3d 290, 301 (D.C. Cir. 2020). Consequently, we will set aside an agency action if it is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”
When reviewing an agency‘s discontinuation of proceedings under an ANPR, we are more deferential to the agency than we are when it discontinues a notice of proposed rulemaking. But the agency receives less deference than it would were it denying a petition for rulemaking. Consumer Fed‘n of Am. v. Consumer Prod. Safety Comm‘n, 990 F.2d 1298, 1304-05 (D.C. Cir. 1993). Yet even when reviewing an agency‘s denial of a petition for rulemaking, which we will “overturn[] only in the rarest and most compelling of circumstances,” we have held that an agency‘s failure to provide any “articulation of the factual and policy bases for [the] decision” is sufficient to warrant a remand. Am. Horse Prot. Ass‘n, Inc. v. Lyng, 812 F.2d 1, 5-6 (D.C. Cir. 1987) (internal quotations and citations omitted) (second alteration in original).
In discontinuing the ANPR, the Board failed to respond to the significant comments that directly provided the information that the Board itself requested. The Board specifically solicited comments that addressed “whether or not the phenomenon . . . observed in Cargill . . . was likely an aberration,” J.A. 19, after it acknowledged
But the Board failed to meet this minimal requirement. Instead, the Board noted that some commenters (including BNSF, the respondent in Cargill) believed that the Cargill phenomenon was an aberration and acknowledged that one commenter stated that there was insufficient evidence to answer the question.7 J.A. 10. The Board failed to even tip its hat to the commenters who claimed that the Cargill phenomenon was not an aberration. These commenters stated that the safe harbor provision “can involve millions of dollars, even for a single shipper,” J.A. 32, that two carriers reaped almost $850 million in profits using the safe harbor provision during a three-year stretch, J.A. 81, and that the safe harbor provision “reduce[s] transparency and diminish[es] shipper confidence,” J.A. 171. And rather than acknowledge that it disagreed with these comments or that it had insufficient information to determine whether the Cargill phenomenon was an aberration, the Board stuck its head in the sand and ignored those comments entirely. This behavior falls short of the minimal process the decision to rescind an ANPR requires.
As stated earlier, it is a hallmark of administrative law that an agency must “examine the relevant data.” State Farm, 463 U.S. at 43. To adhere to this principle, the agency must “respond to significant points raised by the comments, especially when those comments challenge a fundamental premise underlying” the agency action. Carlson v. Postal Regul. Comm‘n, 938 F.3d 337, 345 (D.C. Cir. 2019).
Fundamentally, “the opportunity to comment is meaningless unless the agency responds to significant points raised by the public.” Home Box Office, 567 F.2d at 35-36 (footnote omitted). Indeed, we have repeatedly made clear that an agency‘s failure to consider relevant evidence is arbitrary and capricious. See, e.g., Butte Cnty v. Hogen, 613 F.3d 190, 194 (D.C. Cir. 2010) (“[A]n agency‘s refusal to consider evidence bearing on the issue before it constitutes arbitrary agency action within the meaning of § 706.“); Morall v. DEA, 412 F.3d 165, 178 (D.C. Cir. 2005) (“[The agency‘s] decision does not withstand review because the agency decisionmaker entirely ignored relevant evidence.“); ALLTEL Corp. v. FCC, 838 F.2d 551, 558 (D.C. Cir. 1988) (“[T]he Commission must do more than simply ignore comments that challenge its assumptions and must come forward with some explanation that its view is based on some reasonable analysis.“). As shown above, not only did the Board fail to respond to the comments suggesting that Cargill was not an aberration, it ignored them entirely, all to make it easier to justify its decision to discontinue efforts to reach an agreement. But the Board‘s claim of administrative impasse does not relieve it of its responsibility to respond to significant comments, and this abdication of responsibility cannot survive arbitrary-and-capricious review.
IV.
Because I believe that Western Coal has satisfied its Article III standing obligations by showing that the Board could have changed course had it considered the comments submitted, I respectfully dissent. Good government surely requires more than this.