Western Coal Traffic League v. STB

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 4, 2021 Decided May 28, 2021
No. 20-1058
WESTERN COAL TRAFFIC LEAGUE,
PETITIONER
v.
SURFACE TRANSPORTATION BOARD AND UNITED STATES OF
AMERICA,
RESPONDENTS
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.
2
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.
SILBERMAN, Senior Circuit Judge: The Surface
Transportation Board deadlocked 1–1–1 on what, if anything,
to do about an existing rule governing rail carrier fuel
surcharges. After five years with no majority position on how
to proceed, the Board unanimously voted to discontinue its
Advanced Notice of Proposed Rulemaking (ANPRM) in the
interest of administrative finality. Petitioner Western Coal
Traffic League brings various arguments as to why the Board’s
action was unreasonable. But since the League lacks standing,
we dismiss its petition.
I
The Surface Transportation Board is charged with
oversight of the freight rail industry. It regulates carrier “rates”
and “practices.” 49 U.S.C. § 10702. Although the Board’s
regulation of rates is dependent on a determination that a rail
carrier “has market dominance,” id. § 10707(b), regulation of
practices does not require any such finding. At full strength,
the Board is composed of five members nominated by the
President and confirmed by the Senate. Id. § 1301(b)(1).
Members serve five-year terms, subject to for-cause removal.
Id. § 1301(b)(3).
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
3
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.,
1
Because the Rule addresses “the manner in which railroads
apply what they label a fuel surcharge” instead of the “the total
amount a rail carrier can charge,” the Rule purports to be a practice
regulation and not a rate regulation. Rail Fuel Surcharges at *4–5.
But see infra at 7 (Board Members questioning that premise). And
since the Rule regulates fuel surcharges as a practice (not a rate), it
need not find that a carrier has market dominance before declaring a
surcharge unreasonable. See Rail Fuel Surcharges at *4–5. The
regulation of rail fuel surcharges as a practice does not affect a
shipper’s ability to bring a challenge to the total rate. See id.
4
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
harbor index was designed to allow railroads to recover
incremental fuel costs—not to generate significant added
revenue. Yet, since the defendant carrier complied with the
safe harbor provision, the Board could not conclude that the
carrier’s practice was unreasonable.
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.
2In comments to the agency, the League asserted that between
2011 and 2013, two large carriers (BNSF and the Union Pacific
Railroad Company) collected safe harbor-based profits of over $846
million. J.A. 169–70, 210, 271–73.
5
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.
Rail Fuel Surcharges (Safe Harbor), No. EP 661 (SUB-No. 2),
2014 WL 2217800, at *2 (S.T.B. May 22, 2014).
Five years after the close of the ANPRM comment period,
the Board discontinued the Safe Harbor docket.3 The Board’s
3
Both Congress and Petitioner expressed their frustration with
the Board’s delay in the interim period. In the Surface
Transportation Board Reauthorization Act of 2015, Pub. L. 114–110
(2015), Congress required the Board to issue progress reports on
certain “major” unfinished regulatory proceedings. 49 U.S.C. § 1304
note. It also expanded the Board’s membership “from three
6
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 the Rule.4 The Board then succinctly stated:
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).
members to five in order to address inefficient quorum
requirements.” S. Rep. No. 114-52 at 11 (2015); see 49 U.S.C.
§ 1301(b). Petitioner filed a mandamus petition in this Court to
compel the Board to act. See Petition For Writ of Mandamus, In re
W. Coal Traffic League, No. 19-1080 (D.C. Cir. Apr. 4, 2019). But
once the agency discontinued its rulemaking docket, we granted the
Board’s unopposed motion to dismiss the mandamus petition as
moot.
4
The dissent calculates the comments, assuming the number in
support or opposition is relevant. But see Nat. Res. Def. Council, Inc.
v. EPA, 822 F.2d 104, 122 (D.C. Cir. 1987) (“[A]gency rulemaking
is [not] a democratic process by which the majority of commenters
prevail by sheer weight of numbers.”).
7
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
5
After this Petition was filed, two additional members of the
Board were appointed, bringing it to full strength—which, of course,
gives Petitioner a new avenue for relief. Although we questioned the
Parties about whether this development rendered the dispute moot,
we need not address that issue since the League lacks standing.
8
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 decision
because we lack the power to issue an order to break the
Board’s deadlock.
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.
9
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—
10
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 unaddressed jurisdictional defects has no precedential
effect.”).
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
11
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 28 U.S.C. §§ 2321(a), 2342(5)
(authorizing our review of “rules, regulations, or final orders”
of the “Surface Transportation Board”) with 49 U.S.C.
§ 1306(b)(3) (An individual Board Member “is entitled to
express the views of that individual.”). After all, when we
review the actions of a collective body such as the Board, “it is
its institutional decisions—none other—that bear legal
significance.” Pub. Serv. Comm’n v. Fed’l Power Comm’n,
543 F.2d 757, 776 (D.C. Cir. 1974).6 In this sense, the separate
6
We acknowledge that we have required the joint statements of
members of the Federal Election Commission when that agency
deadlocks and thereby dismisses a complaint contrary to the
12
statements of the Board Members are akin to concurring (or
dissenting) opinions of judges. And of course, a judge’s
separate statement cannot be imputed to an opinion of the
court. So too administrative decisions must be equally
respected. See United States v. Morgan, 313 U.S. 409, 422
(1941).
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
recommendation of its General Counsel. See Democratic Cong.
Campaign Comm. v. Fed. Election Comm’n, 831 F.2d 1131, 1133
(D.C. Cir. 1987); Common Cause v. Fed. Election Comm’n, 842 F.2d
436, 449 (D.C. Cir. 1988) (“[I]mportant statutory policies [are]
served by requiring an explanation for deadlock dismissals contrary
to the recommendation of the General Counsel.”). In that situation,
we review the joint statement of the “controlling commissioners”
who would decline to proceed as the rationale of the Commission (a
practice that we have characterized as a “fiction raising problems of
its own.”). Citizens for Resp. & Ethics in Washington v. Fed.
Election Comm’n, 892 F.3d 434, 437–38 (D.C. Cir. 2018). Here,
however, we have no “controlling commissioners”—each Board
Member would act differently. See id. at 438 n.4 (rhetorically
asking, “What if the three [FEC] Commissioners each expressed a
different reason for voting against enforcement proceedings?”).
Neither do we have a contrary recommendation of the agency’s
general counsel, nor are the same “statutory policies” at play.
Therefore, we don’t think our FEC precedents bear on our case.
13
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. v. Consumer Prod. Safety Comm’n, 990 F.2d
1298, 1305–08 (D.C. Cir. 1993). 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.
14
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 issue would influence any Board Member’s vote.
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
7
Paradoxically, the government asserts that we cannot review
the Board Members’ separate statements for reasonableness while
simultaneously allowing them to be considered as evidence in its
jurisdictional argument. Compare Resp’ts Br. 17 (only decisions “of
the Board” may be reviewed for reasonableness) with Oral Arg.
1:45:00–1:50:00 (Feb. 4, 2021) (arguing that the Cargill issue would
not have impacted the Board Members’ separate statements). The
dissent quite rightly points out this contradiction. But since both
Parties invite us to entertain these statements for the purpose of
assessing redressability, we accept their position only for the sake of
argument.
15
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
8
We cannot imagine why the dissent argues that our opinion,
holding that we lack jurisdiction, undermines State Farm, a case in
which jurisdiction is undisputed.
16
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
9
The dissent errs by relying on Perez v. Mortgage Bankers
Ass’n, 575 U.S. 92, 96 (2015), for the proposition that a failure to
respond to significant comments is procedural. There, the Court
used the word procedure to describe an agency’s order of analysis,
not whether any command of the APA is procedural or
substantive. At best, we have said, the failure to respond to
significant points raised during the comment period may be
“described as ‘quasi-procedural’ rather than ‘procedural.’” Nat’l
Ass’n of Home Builders v. EPA, 682 F.3d 1032, 1042 (D.C. Cir.
2012) (quoting Merrick B. Garland, Deregulation and Judicial
Review, 98 Harv. L. Rev. 505, 530 (1985)). That requirement is
concerned “not with the external process by which litigants
present their arguments to the agency, but with the internal
thought process by which an agency decisionmaker reaches a
rational decision. Thus, these requirements can be said to flow
not from the APA’s procedural dictates, but from its substantive
command that agency decisionmaking not be ‘arbitrary’ or
‘capricious.’” Id.; see also Am. Trading Transp. Co. v. United
States, 841 F.2d 421, 424 (D.C. Cir. 1988) (a court reviews both the
“substantive” question of whether an action is arbitrary and
capricious as well as the “procedures . . . employed in reaching its
decision.”).
17
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.
10
After the Board dismissed its ANPRM, the League sought
reconsideration of that decision, which the Board denied. Rail Fuel
Surcharges (Safe Harbor) Reconsideration Decision, Fed. Carr. Cas.
(CCH) ¶ 37432, 2019 WL 7484096 (S.T.B. Dec. 26, 2019).
Although Petitioner also sought review of the denial of its request for
reconsideration, it now concedes that the reconsideration decision “is
of no practical consequence in this case.” Reply Br. 17.
Accordingly, we similarly dismiss Petitioner’s challenge to the
reconsideration decision for lack of jurisdiction.
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 would also hold that the
Board’s discontinuation was arbitrary and capricious.
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.
49 U.S.C. §§ 10701; 10702. In 2007, the Board promulgated a
rule that addressed rail carriers’ assessment of fuel surcharges
on shippers. Before 2007, carriers calculated fuel charges
based on a base rate, which was market-based and not
grounded in actual fuel cost increases. As a result, carriers
were earning more from fuel surcharges than they were
spending on fuel. In response, the Board’s rule prohibited
carriers from assessing fuel surcharges as a percentage of that
base rate. Instead, the fuel surcharges had to be based on
factors directly related to fuel consumption. The rule, however,
did not prohibit additional surcharges; it only prohibited rail
carriers from identifying them as fuel surcharges if those
surcharges exceeded the amount spent on increased fuel costs.
The rule also did not set a uniform fuel index to measure
“incremental fuel costs”—additional fuel costs caused by
2
increased fuel prices that exceed a certain amount set in the fuel
surcharge formula. Instead, the rule adopted a “Highway
Diesel Fuel Index” (“HDF Index”), which served as a safe
harbor index that carriers could rely on instead of using their
actual incremental fuel costs.
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.
3True 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 through a modification of [the provision],”
and (4) “whether any problems with the safe harbor are
outweighed by its benefits.” Id.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
4
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
1The three Board members issued commenting statements.
Chairwoman Begeman stated that she believed the safe harbor
should be eliminated, but, because “there hasn’t been a majority to
coalesce around any approach (mine or any other one),” she voted
“to close the proceeding rather than wait for a full complement of
Board members in hopes that a majority view would be reached to
repeal the safe harbor provision.” J.A. 11. Board member Fuchs
commented that he was opposed to modifying or removing the safe
harbor provision out of fear of exacerbating the tension that would
result from different standards for the fuel surcharge and the overall
5
Western Coal then petitioned for reconsideration and
subsequently for judicial review. Western Coal claims that the
Board’s decision was arbitrary and capricious because it failed
to respond to the comments answering the Board’s own
question of whether the Cargill phenomenon was an
aberration. On review, Western Coal asks this Court to “hold
unlawful, vacate and set aside the Decision[] and grant such
further relief as may be deemed just and proper.” Pet. for
Review, Western Coal Traffic League v. Surface Transp.
Board, No. 20–1058, at 2 (Feb. 28, 2020).
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
rate. J.A. 12. In addition, Fuchs commented that carriers and
customers have relied on the HDF Index, so he proposed leaving it
in place and instead focusing on reforming the overall rate review
process. J.A. 12–13. Finally, Board member Oberman commented
that he thought that the relief sought in Cargill and the proposed
amendment here was “at base, rate relief” and not a regulation of
carrier practices. J.A. 13. Rather than eliminate the safe harbor
provision, Oberman preferred that the Board reverse its Rail Fuel
Surcharges decision, “which created the fuel surcharges rules and
their safe harbor provision.” Id. All three members, however, agreed
that the proper course of action was to discontinue the proceedings.
6
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
7
made clear that if the Cargill phenomenon was a common
occurrence, it would pose a problem that the Board needed to
address in one way or another. 2
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.
2
The majority suggests that because the Cargill question was only
one of four presented in the ANPR, it was not a material error for the
Board to fail to address the comments responding to that question.
Maj. Op. at 13. But the context shows that the Cargill question was
the entire reason for the rulemaking, and understanding the Cargill
issue was key to determining how best to proceed.
3
I highlight the number of comments not because their numerosity
indicates that the comments were correct, as suggested by the
majority, Maj. Op. at 6 n.4, but because their numerosity
demonstrates how much the Board contorted itself to avoid
acknowledging those comments. The Board’s silence in response to
what most of the commenters were saying is indeed deafening.
8
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 and costing
shippers hundreds of millions of dollars. There was never any
“rational connection between the facts found and the choice
4
These examples merely highlight that the Board could have done
what agencies do all the time to attempt to make progress on their
deliberations and potentially reach a solution. Perhaps the Board
would try one or more of these tactics, or perhaps it would try
something else—its specific path forward is irrelevant, as is Vermont
Yankee. Maj. Op. at 9. The point is that if the Board were forced to
consider all of the evidence before it, there is at least a possibility
that it would conclude the Cargill phenomenon is widespread and
merits further work towards a policy solution. It is often the case that
fully reckoning with the vast scope of an issue motivates compromise
and a solution. As the saying goes, “necessity is the mother of
invention.” This is not an intrusion on the Board’s prerogatives; it is
simply requiring the Board to base its action (or inaction) on a
consideration of all the material evidence, rather than on a cherry-
picked set of facts.
9
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
10
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 decision would be different if the agency had considered
the ignored comments. 5 To find no redressability on this
5
The majority relies on our decision in Narragansett, 949 F.3d at
13–14, to emphasize that Western Coal must “link a permissible
11
ground cuts against the grain of all our procedural injury
precedent. We have unequivocally stated that “[a] plaintiff
asserting procedural injury ‘never has to prove that if he had
received the procedure the substantive result would have been
altered.’” City of Dania Beach v. FAA, 485 F.3d 1181, 1186
(D.C. Cir. 2007) (quoting Sugar Cane Growers, 289 F.3d at
94); Am. Fuel & Petrochemical Mfrs. v. EPA, 937 F.3d 559,
595 (D.C. Cir. 2019) (per curiam) (“The Sierra Club need not
show that the EPA ‘would alter’ the 2018 rule if ordered to
comply with its ESA obligations, but rather that ‘the EPA could
reach a different conclusion.’ The Sierra Club has made this
showing. There ‘remains at least the possibility’ that the EPA
could set different standards, by, for example, invoking the
general waiver for severe environmental harm.” (quoting Ctr.
for Biological Diversity, 861 F.3d at 185) (citations omitted)).
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
court order to its concrete injury.” Maj. Op. at 15. But Narragansett
is inapposite. There, the harm to the Narragansett Tribe’s cultural
heritage had already occurred and could not be remedied by righting
the procedural injury. Narragansett, 949 F.3d at 13–14 (“[F]ixing
the alleged defect in the Commission’s regulatory procedures could
not possibly prevent or mitigate the harm to the Narragansett Tribe’s
cultural and religious interests” because “there was ‘no possibility’
that the already completed action could be undone”) (quoting
Humane Soc’y of the United States v. Babbitt, 46 F.3d 93, 100–01
(D.C. Cir. 1995)). Here, on the other hand, a remand to the Board
for further deliberation and consideration of the comments
addressing the Cargill phenomenon could undo the harm alleged by
Western Coal.
12
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.” 289 F.3d 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
dam (or, here, grant the tax credit).”); Western Org. of Res.
Councils v. Zinke, 892 F.3d 1234, 1249 (D.C. Cir. 2018)
(Edwards, J., concurring) (“[T]he right to challenge an
agency’s failure to act in preparing an EIS is not diminished by
the fact that such a suit protects merely a plaintiff’s ‘procedural
right’ to have the EIS issued, rather than any ‘substantive right’
regarding the action the agency will ultimately take.”). None
of these cases remanded to the agency because the court was
trying to “pick the winning policy position,” see Maj. Op. at
13
15, rather, the purpose of the remand was always simply to
compel the agency to follow the mandated procedures. So it is
here.
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
Section 553 of the APA. Id. Contrary to the protestations of
the majority, Maj. Op. at 16 n.9, the Court explicitly stated that
“the purpose” of Section 553 is to “say what procedures an
agency must use when it engages in rulemaking.” Perez, 575
U.S. at 101; see also id. at 109 (Scalia, J., concurring) (“The
Act [Section 553] guards against excesses in rulemaking by
requiring notice and comment. Before an agency makes a rule,
it normally must notify the public of the proposal, invite them
to comment on its shortcomings, consider and respond to their
arguments, and explain its final decision in a statement of the
rule’s basis and purpose.” (emphasis added)). Prior to Perez,
we had also described an agency’s failure to respond to
significant comments as a procedural injury. Int’l Fabricare
Inst. v. EPA, 972 F.2d 384, 389 (D.C. Cir. 1992) (citing PPG
Indust., Inc. v. Costle, 630 F.2d 462, 466 (6th Cir. 1980));
Home Box Office, 567 F.2d at 35–36. It is true, as the majority
points out, that State Farm described the failure to respond to
comments as a classic form of arbitrary and capricious
decision-making, 463 U.S. at 43, as have we, see Lilliputian
Systems, Inc. v. Pipeline & Hazardous Materials Safety
Admin., 741 F.3d 1309, 1312 (D.C. Cir. 2014); Allied Local &
Regional Mfrs. Caucus v. EPA, 215 F.3d 61, 80 (D.C. Cir.
2000); Public Citizen, Inc. v. FAA, 988 F.2d 186, 197 (D.C.
Cir. 1993). But that observation hardly strengthens the
14
majority’s position; rather, it shows that when an agency
ignores significant comments, it flouts both substance and
procedure. Yet the majority concludes that there is no
possibility that the agency would conduct itself differently if
forced to correct this double-error. Of course, standing was not
at issue in Perez or State Farm, but in each case, the Court
described the injury that occurs when an agency ignores
significant comments as a violation of cardinal principles of
administrative law. By applying a heightened, rather than
relaxed, standard of redressability in this case, the majority
responds to the injury described by Perez, State Farm, and a
plethora of other cases as so fundamental with little more than
a shrug, severely undermining the impact of these important
precedents.
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 a reasonable probability it would have
decided to continue working on a solution.6 That is all that
Western Coal requests from this Court. See Pet. for Review,
Western Coal Traffic League, No. 20–1058, at 2. And that is
all that is required to satisfy the “relaxed” standard of
redressability under our precedent. To hold otherwise fails to
apply the “relaxed” standard of redressability and grants
license for agencies to ignore evidence and pretend that
6
The majority concludes, and I agree, that we should look only to
the Board’s decision. Maj. Op. at 11. But the majority proceeds to
rely on the statements by Board Members Oberman and Fuchs to
confirm that they would not change their stance. Maj. Op. at 14.
And since the individual statements are “quite out of bounds,” we
should not consider them for the purposes of determining
redressability.
15
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.” 5 U.S.C. § 706(2)(A). “An agency
decision is arbitrary and capricious if it is not reasonably
explained.” Antilles Consol. Educ. Ass’n v. FLRA, 977 F.3d
10, 15 (D.C. Cir. 2020). And while “[t]he arbitrary and
capricious standard is deferential,” only requiring that the
“agency action simply be ‘reasonable and reasonably
explained,’” POET Biorefining, LLC v. EPA, 970 F.3d 392,
409 (D.C. Cir. 2020) (quoting Cmtys. for a Better Env’t v. EPA,
748 F.3d 333, 335 (D.C. Cir. 2014)), the agency must have
“examined the relevant considerations and articulated a
satisfactory explanation for its action, including a rational
connection between the facts found and the choice made.” Int’l
Longshore & Warehouse Union v. NLRB, 971 F.3d 356, 360
(D.C. Cir. 2020) (quoting FERC v. Elec. Power Supply Ass’n,
577 U.S. 260, 292 (2016)).
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
16
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 that “a more widespread phenomenon” could
“undermine the usefulness of the current safe harbor provision”
by “immuniz[ing] . . . over-recovery from scrutiny,” Cargill,
2013 WL 4067719, at *14. The Board’s framing in Cargill and
the ensuing ANPR thus placed it in the class of cases in which
an agency questions whether the factual premise underlying its
regulatory scheme is wrong in such a way that requires
amendment. See Am. Horse Prot. Ass’n, 812 F.2d at 5 (“[A]
refusal to initiate a rulemaking naturally sets off a special alert
when a petition has sought modification of a rule on the basis
of a radical change in its factual premises.”). Once the Board
reached this point, it was compelled to—at a minimum—
respond to comments stating that the Cargill phenomenon was
not an aberration, or, put differently, whether the factual
premise underlying its regulatory scheme had changed.
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
17
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).
7
And this characterization of the comment finding insufficient
evidence is dubious. In its comment, Dow Chemical stated that “the
phenomenon noted by the Board in Cargill may not be an
aberration.” J.A. 236. Dow Chemical commented that “[p]ublicly
available data raises serious questions about whether the significant
revenue generated by these fuel surcharge programs is limited solely
to recovery of the incremental fuel cost incurred by the railroads.”
Id. While Dow Chemical acknowledged that there was “a paucity of
publicly available data . . . evidence suggests the Board’s Cargill
concern is not misplaced,” and Dow urged the Board to “continue its
investigation into the fuel surcharge programs used by the nation’s
railroads.” J.A. 236–37.
18
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.