Del Grosso v. Surface Transportation Board

United States Court of Appeals
For the First Circuit
No. 15-1069
DIANA DEL GROSSO;
RAY SMITH; JOSEPH HATCH; CHERYL HATCH;
KATHLEEN KELLEY; ANDREW WILKLUND; RICHARD KOSIBA,
Petitioners,
v.
SURFACE TRANSPORTATION BOARD; UNITED STATES,
Respondents,
GRAFTON & UPTON RAILROAD COMPANY,
Intervenor.
PETITION FOR REVIEW OF A FINAL ORDER OF THE SURFACE
TRANSPORTATION BOARD
Before
Torruella, Selya, and Dyk,*
Circuit Judges.
MEMORANDUM AND ORDER ON
PETITIONS FOR PANEL REHEARING
February 5, 2016
*
Of the Federal Circuit, sitting by designation.
DYK, Circuit Judge. An October 16, 2015, decision of
this panel vacated a declaratory order by the Surface
Transportation Board ("Board") and remanded for further
proceedings. Del Grosso v. Surface Transp. Bd., 804 F.3d 110 (1st
Cir. 2015). That declaratory ruling had determined that state and
local law was preempted with respect to a transloading facility in
Upton, Massachusetts.
The Board and the United States ("respondents")
petitioned for panel rehearing on November 30, 2015. Respondents’
petition was denied on December 14, 2015. A separate petition for
panel rehearing and rehearing en banc filed by intervenor Grafton
& Upton Railroad Company remains pending. We deny the intervenor’s
petition for panel rehearing and explain why both the respondents’
petition and the intervenor’s petition lack merit.
Both petitions allege that the panel erred in declining
to review the Board’s order under the deferential Chevron standard.
Chevron U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837
(1984). For example, respondents argue that "[t]here is no dispute
that the term ‘transportation by rail carrier’ in [49 U.S.C.]
§ 10501(a) is ambiguous and that the definition of ‘transportation’
is an issue within the Board’s expertise. In that situation, the
law is clear that an agency’s interpretation of the ambiguous
statutory jurisdictional term is entitled to Chevron deference."
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Resp’ts’ Pet. at 3 (citing City of Arlington v. FCC, 133 S. Ct.
1863, 1871 (2013)); see also Intervenor’s Pet. at 3-4.
An agency’s expertise with respect to a statute does not
automatically require a grant of Chevron deference to the agency’s
interpretation of that statute. See, e.g., United States v. Mead
Corp., 533 U.S. 218, 234 (2001) (no Chevron deference to Customs
classification rulings). For Chevron deference to apply, the
interpretation must be in an area where Congress has delegated
authority to the agency. In other words, the interpretation must
relate to the agency’s congressionally delegated administration of
the statute, typically its exercise of regulatory authority.
"Chevron deference . . . is not accorded merely because the statute
is ambiguous and an administrative official is involved. To begin
with, the rule must be promulgated pursuant to authority Congress
has delegated to the official." Gonzales v. Oregon, 546 U.S. 243,
258 (2006) (citing Mead, 533 U.S. at 226-27).
In Mead, the Supreme Court declined to apply Chevron
deference to certain declaratory rulings by the Customs Service,
given that "the terms of the congressional delegation give no
indication that Congress meant to delegate authority to Customs to
issue classification rulings with the force of law." Mead, 533
U.S. at 231-32, 234. "[Mead] requires that, for Chevron deference
to apply, the agency must have received congressional authority to
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determine the particular matter at issue in the particular manner
adopted." City of Arlington, 133 S. Ct. at 1874.
Here the Board interpreted the term "transportation" as
it appears in 49 U.S.C. § 10501(b), the preemption provision of the
Board’s authorizing statute, the Interstate Commerce Commission
Termination Act ("ICCTA"). Del Grosso, STB Docket No. FD 35652,
2014 WL 6852990, at *2 (S.T.B. Dec. 5, 2014). As the panel’s
opinion notes, the Supreme Court’s decision in Wyeth v. Levine held
that agencies have "no special authority to pronounce on pre-
emption absent delegation by Congress." Wyeth v. Levine, 555 U.S.
555, 576-77 (2009); see also Del Grosso, 804 F.3d at 116. Wyeth
declined to apply Chevron deference to agency preemption decisions,
as our sister circuits have recognized. Wyeth, 555 U.S. at 576-77;
see, e.g., Seminole Tribe of Fla. v. Stranburg, 799 F.3d 1324, 1338
(11th Cir. 2015); Steel Inst. of N.Y. v. City of New York, 716 F.3d
31, 39-40 (2d Cir. 2013); In re Universal Serv. Fund Tel. Billing
Practice Litig., 619 F.3d 1188, 1200 (10th Cir. 2010); Franks Inv.
Co. v. Union Pac. R.R. Co., 593 F.3d 404, 413-14 (5th Cir. 2010);
see also Del Grosso, 804 F.3d at 116-17.
To be sure, when an agency takes regulatory action under
an authorizing statute and preemption is a collateral consequence
of that action, there is an implicit delegation to the agency to
interpret the statute, just as in other regulatory contexts. For
example, in Smiley v. Citibank (South Dakota), N.A., the Supreme
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Court extended Chevron deference to a regulation by the Comptroller
of the Currency that interpreted the term "interest," as it
appeared in a provision of the National Bank Act. 517 U.S. 735,
740, 744 (1996). The Court noted that the regulation there was
part of a broader program of substantive interest rate and bank
regulation undertaken by the Comptroller pursuant to his delegated
authority, id. at 739, 742, and that its preemptive effect was
merely an ancillary consequence, id. at 743-44.
But here the Board took no substantive regulatory action.
The Board undertook to preempt local regulation of the Upton
transloading facility rather than to regulate the facility itself.
Del Grosso, 804 F.3d at 115. Indeed, the Board apparently believes
that it does not possess the authority to approve or disapprove
construction of transloading facilities of this type. Id. at 119
n.4; see also, e.g., Nicholson v. ICC, 711 F.2d 364, 368-69 (D.C.
Cir. 1983); Borough of Riverdale, 4 S.T.B. 380, 1999 WL 715272, at
*4 (1999) (declaratory order) ("Many rail construction projects are
outside of the Board's regulatory jurisdiction. For example,
railroads do not require authority from the Board to build or
expand facilities such as truck transfer facilities, weigh
stations, or similar facilities ancillary to their railroad
operations . . . .").
This is also not a situation where Congress has directly
authorized the Board to preempt state law. Del Grosso, 804 F.3d at
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117 n.3; see also Wyeth, 555 U.S. at 576 & n.9. The Board
interpreted the statutory term "transportation" in a declaratory
order issued under its ordinary APA powers, not under the
regulatory authority it has been granted by the ICCTA. Del Grosso,
804 F.3d at 117 n.3. The situation here is similar to that in
Mead, where the Supreme Court held that Chevron deference was not
owed to Customs declaratory rulings. Mead, 533 U.S. at 234.
Finally, we note that the Board does not rely here on any
rulemaking undertaken pursuant to the authority delegated to it by
the ICCTA. See 49 U.S.C. § 1321(a). If the Board had undertaken
a general notice and comment rulemaking to decide the scope of its
authority, a different issue would be presented.
The intervenor’s petition for panel rehearing is DENIED.
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