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Idaho v. Interstate Commerce Comm'n

ELR Citation: 25 ELR 20191
Nos. No. 93-1015, 35 F.3d 585/39 ERC 1658/(D.C. Cir., 10/04/1994)

The court affirms the portion of an Interstate Commerce Commission (ICC) order granting a railroad's request to discontinue service on a branch line in northern Idaho and remands the portion of the ICC's order conditionally authorizing salvage activities so that the ICC may comply with the National Environmental Policy Act (NEPA). The court first holds that petitioner mining companies have standing to challenge the ICC's abandonment order, because they will have to find an alternative means of shipping their products and they fall squarely within the zone of interests protected by the Interstate Commerce Act provision that empowers the ICC to oversee rail abandonments. The court holds that because the companies have standing, it need not decide whether Idaho has standing. The court also holds that petitioners have standing to challenge the ICC's conditional authorization of salvage activities, because the branch line passes through land the state owns and the state has alleged that any salvage activities by the railroad will pollute the areas surrounding the branch line. The court holds that the state can assert its NEPA claim because the environmental injury it asserts falls squarely within the zone of interests that NEPA protects. The court also holds that the state has standing to assert an Endangered Species Act (ESA) claim because of its proprietary interest in the land around the branch line. Furthermore, the ESA specifically authorizes a state to bring an action to enforce its provisions.

Turning to petitioners' claim that the ICC violated the Interstate Commerce Act, the court holds that the ICC departed from its own principles by failing to account fully for the expected revenues from a startup company's future woodchip shipments. The court holds, however, that the ICC's error was harmless, because the upward adjustment is only $24,286, which still leaves the railroad with an avoidable loss of $97,481 if it abandons the branch line. The court next holds that the ICC properly rejected the startup company's projection for lumber shipments as too speculative. The court upholds the ICC's decision to include the cost of maintaining a customer services station in determining costs that are avoidable by abandoning the branch line. The railroad cannot close the station without the permission of the Idaho Public Utilities Commission (IPUC), which denied this permission in 1988. In addition, in her testimony, the president of the IPUC refused to guarantee that her agency would grant a request to close the station. After oral argument, petitioners notified the court for the first time that the IPUC had approved the railroad's request to close the station. But, the court holds, petitioners waived their right to rely on this approval, because they did not submit the approval decision to the ICC before the ICC denied appeals of its order and denied a stay, despite ample time to do so. The court next holds harmless any error the ICC made in fixing at zero the railroad's opportunity cost of continued service on the branch line. Although petitioners claim that opportunity costs would be negative due to steep environmental cleanup costs the company would incur under the ICC's abandonment order, mandating the cleanup of the contamination could occur whether or not the line was abandoned. Under this assumption, the true opportunity cost equals at least the salvage value of the rail materials. A positive opportunity cost would raise the total economic benefit of abandonment and thus further tip the balance in favor of that result. In addition, if cleanup is required only in the event of salvage, the ICC did not err, because by fixing the opportunity cost at zero, it captured the reality that the railroad would likely forego salvage activities if cleanup costs were to exceed salvage revenues.

Turning to petitioners' NEPA claims, the court finds that the ICC neither analyzed the potential harm nor weighed it against the economic benefits of abandonment. Instead of taking its own hard look at the potential environmental impacts of salvage, the ICC deferred to the scrutiny of others, and an agency cannot delegate its NEPA responsibilities in this manner. The court holds that a proceeding to enforce a particular condition of the ICC's order will not provide an opportunity for the comprehensive environmental review the court mandated in a prior decision. The court next holds that the ICC violated an ESA regulation providing that any federal agency required to prepare a biological assessment must do so within 180 days after receipt of or concurrence with a list prepared by the U.S. Fish and Wildlife Service or the National Marine Fisheries Service of endangered or threatened species the agency's proposed action will affect. The court holds, however, that the violation did not harm petitioners' interests and has not frustrated any of the apparent purposes of this or related provisions of the ESA or its implementing regulations. The court declines to address a Native American tribe's claim that the ICC's order effects an unconstitutional taking of the tribe's alleged reversionary interest in a right-of-way, because the tribe failed to raise the issue before the ICC. With respect to the tribe's claim that the ICC should have required the railroad to clean up alleged pollution on the branch line, the court holds that the proper vehicle for this sort of relief is a civil action against the railroad and notes that the tribe has filed such an action.

Counsel for Petitioners
Donald L. Howell II, Deputy Attorney General
Attorney General's Office
State House, Boise ID 83720
(208) 334-2400

Counsel for Respondents
Evelyn G. Kitay
Interstate Commerce Commission
12th & Constitution Ave. NW, Washington DC 20423
(202) 927-7119

Before BUCKLEY, WILLIAMS, and GINSBURG, Circuit Judges.