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Prairie Central Railway Co. v. United States

decided: February 23, 1984.

PRAIRIE CENTRAL RAILWAY COMPANY, PETITIONER,
v.
INTERSTATE COMMERCE COMMISSION AND UNITED STATES OF AMERICA, RESPONDENTS, AND ILLINOIS CENTRAL GULF RAILROAD COMPANY AND PATRICK W. SIMMONS, INTERVENING RESPONDENTS



Pell, Posner, and Coffey, Circuit Judges.

Author: Pell

PELL, Circuit Judge.

The petitioner, Prairie Central Railroad Company (Prairie Central), petitions this court for review of decisions of the Interstate Commerce Commission (the Commission) granting the Illinois Central Gulf Railroad Company's (Illinois Central) motions to strike Prairie Central's notices of intent to purchase certain railroad lines in central Illinois. Prairie Central contends, as it did before the Commission, that the notices of intent to purchase indefeasibly vested the Commission's jurisdiction. The Commission decided otherwise. Prairie Central now requests this court to set aside the Commission decisions and to remand the cases for further consideration.

I. THE FACTS

Congress enacted section 401 of the Staggers Rail Act of 1980 to ensure continuous rail service on so-called "feeder" lines, access lines to main rail lines. Staggers Rail Act of 1980, Pub. L. No. 96-448, 1980 U.S. Code Cong. & Ad. News (94 Stat.) 3988-89, 4111, 4156-57. The Act gave the Commission authority to "prescribe such regulations and procedures as may be necessary to carry out the provisions of this section." 49 U.S.C. § 10910(k) (Supp. V 1981). Under section 401 of the Staggers Act, the Commission must require a track owner to sell a line if a financially responsible applicant files an application to purchase the line while the owners has the line listed in category 1 of its system diagram map. Category 1 designates those lines that a carrier anticipates will be the subject of an abandonment application within the following three years. 49 C.F.R. § 1152.10(b)(1) (1982).

On September 18, 1981, Illinois Central filed a system diagram map with the Commission. On the system diagram map, the railroad designated the two disputed lines in category 1 for the first time. In March 1982, pursuant to the feeder line program, Prairie Central filed notices of intent to purchase the two lines. See 49 U.S.C. § 10910(b)(1)(B) (Supp. V 1981). Under the regulations then in effect, a carrier which sought to acquire a railroad line had to wait ninety days after it filed a notice of intent to purchase before it could file its application to purchase. 49 C.F.R. § 1128.2(a) (1981).

On April 6, 1982, during the ninety-day waiting period, Illinois Central filed an amended system diagram map. The amended map changed the designation of the two disputed lines from category 1, lines anticipated to be the subject of abandonment within three years, to category 5, which encompasses "all other lines." 49 C.F.R. § 1152.10(b)(1), (5) (1982). Thereafter, Illinois Central filed with the Commission motions to strike the notices of intent to purchase the lines. Illinois Central claimed that only an actual application to purchase, not a mere notice of intent to purchase, could engage the Commission's jurisdiction.

Prairie Central argued, in response to the motions to strike, that a notice of intent is sufficient to vest jurisdiction indefeasibly in the Commission. Otherwise, Prairie Central maintained, the removal of railroad lines from system diagram maps after the filing of a notice of intent to purchase would frustrate the feeder program altogether.

The Commission ruled in favor of Illinois Central. Citing 49 C.F.R. § 1121.23 (1981), the Commission declared: "A carrier may amend its SDM at any time." The cited regulation, now found at 49 C.F.R. § 1152.13(a) (1982), states: "Amendments may be filed at any time and will be subject to all carrier filing and publication requirements. . . ." Prairie Central has never contended that Illinois Central failed to meet the filing and publication requirements. Accordingly, the Commission granted Illinois Central's motions to strike Prairie Central's notices of intent to purchase.

Prairie Central has petitioned this court for review to annul the Commission decisions which granted Illinois Central's motions to strike. Prairie Central relies upon the same argument advanced before the Commission: that the filing of a notice of intent to purchase the lines indefeasibly invoked the jurisdiction of the Commission. Consequently, according to Prairie Central, Illinois Central's subsequent amendment of its system diagram map did not preclude the finalization of the Commission's jurisdiction.

II. THE CISCO CASE

This court recently decided the case of Cisco Cooperative Grain Co. v. Interstate Commerce Commission, 717 F.2d 401 (7th Cir. 1983). In Cisco, Illinois Central had listed several railroad lines in category 1, for abandonment, on its system diagram map. After Cisco and Prairie Central filed notices of intent to purchase the lines, but before they could file an application to purchase because of the ninety-day waiting period, Illinois Central filed applications to abandon. Under its regulatory program then in effect, the Commission decided that, because Illinois Central's application to abandon preceded any application to purchase, the Commission's jurisdiction never vested. Therefore, the Commission granted the motions to strike the notices of intent to purchase. Despite the subsequent revocation, discussed below, of the regulation that required ninety days to elapse between the notice of intent to purchase and the application to purchase, the court held that the regulation was both a prerequisite to Commission jurisdiction and "a reasonable interpretation of the statute." 717 F.2d at 407.

The Cisco case made the Commission realize that the ninety-day waiting period created a mechanism whereby a railroad contemplating abandonment could avoid Commission jurisdiction by filing for abandonment within the period. Consequently, the Commission has since eliminated the waiting period provision. 48 Fed. Reg. 9,649 (1983).

Moreover, "to achieve an interpretation compatible with the Congressional intent," 128 Cong. Rec. H5821 (daily ed. Aug. 12, 1982) (remarks of Rep. Florio), Congress amended part of the feeder program statute to assure that jurisdiction vests in the Commission as soon as a carrier files a notice of intent to purchase. Thus, the Commission's jurisdiction now vests whenever a railroad line is in category 1 on a system diagram map and there is an application to purchase "or any required preliminary filing with ...


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