Jost, Kevin v. STB

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 4, 1999 Decided October 22, 1999
No. 99-1054
Kevin Jost, et al.,
Petitioners
v.
Surface Transportation Board and
United States of America,
Respondents
Central Kansas Railway, Limited Liability Company,
Intervenor
On Petition for Review of an Order of the
Surface Transportation Board
Nels J. Ackerson argued the cause and filed the briefs for
petitioners.
Troy W. Garris, Attorney, Surface Transportation Board,
argued the cause for respondents. With him on the brief
were Henri F. Rush, General Counsel, and Ellen D. Hanson,
Deputy General Counsel, and M. Alice Thurston, Attorney,
United States Department of Justice.
Thomas F. McFarland, Jr. was on the brief for intervenor.
Before: Edwards, Chief Judge, Wald and Williams,
Circuit Judges.
Opinion for the Court filed by Circuit Judge Wald.
Wald, Circuit Judge: Kevin Jost petitions for review of an
order of the Surface Transportation Board ("the Board")
declining to reopen a proceeding wherein the Board issued a
notice of interim trail use ("NITU") for a railroad line former-
ly operated by the Central Kansas Railway ("CKR").1 Jost
sought to reopen the proceeding on the grounds that, as a
result of right-of-way sales by CKR, CKR's notice of exemp-
tion was void for misleading statements, rail banking and
interim trail use were not possible, and CKR had abandoned
the line. Jost also challenged the Board's refusal to review
the financial fitness of the Central Kansas Conservancy
("CKC" or "the Conservancy"), the trail sponsor that ac-
quired the line from CKR.
We uphold the Board's decision not to review the fitness of
the Conservancy to be a trail sponsor. However, we find that
the Board has not adequately explained why Jost's evidence
concerning the right-of-way sales did not require reopening
the proceeding. Accordingly, we grant the petition for review
and remand to the Board for further proceedings.
I. Background
As part of its jurisdiction over the common carrier respon-
sibilities of railroads, the Surface Transportation Board must
approve the abandonment of a railroad line.2 Pursuant to a
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1 Jost's petition is joined by Alvin Kroupa, Allen Schlehuber, and
the Citizens Association of Marion and McPherson Counties. For
convenience, we will refer to petitioners simply as "Jost."
2 Once abandonment occurs, "as a general proposition [the agen-
cy's] jurisdiction terminates." Preseault v. ICC, 494 U.S. 1, 5-6 n.3
(1990).
statutory mandate, the Board has established an abbreviated
process for abandonment of "out-of-service" lines.3 See 49
U.S.C. s 10502 (Supp. III 1998); 49 C.F.R. s 1152.50 (1998).
When a railroad files a verified "notice of exemption" stating
it wishes to abandon an out-of-service line, the Board pub-
lishes a notice in the Federal Register which states that the
railroad will be authorized to abandon the line in thirty days,
unless the Board stays the exemption pursuant to a petition.4
The notice also states that the exemption is void ab initio if
the railroad's notice contains false or misleading information.
See 49 C.F.R. s 1152.50(d)(3).
At this point, the "rails-to-trails" program established un-
der the Trails Act, 16 U.S.C. s 1247(d), may come into play.
The Trails Act authorizes the Board "to preserve for possible
future railroad use rights-of-way not currently in service and
to allow interim use of the land as recreation trails." Pre-
seault v. ICC, 494 U.S. 1, 6 (1990). Thus, the Trails Act has
two goals, to preserve railroad rights-of-way and to encourage
the creation of new recreation trails. See Preseault, 494 U.S.
at 17-18.
The Trails Act comes into play if, while the exemption is
pending, a private organization files a "statement of willing-
ness" with the Board. The statement of willingness is an
indication that the private organization (the "trail sponsor") is
willing to take over management of and financial responsibili-
ty for the right-of-way, for the purposes of "rail banking" the
line and establishing a trail on the right-of-way.5 If the
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3 A line is considered "out-of-service" if "no local traffic has
moved over the line for at least 2 years and any overhead [i.e.,
through] traffic on the line can be rerouted over other lines" and no
complaints about reduced rail service are pending or have been
decided adverse to the railroad in the prior two years. 49 C.F.R.
s 1152.50(b) (1998).
4 Once the exemption becomes effective, the railroad is authorized
to abandon the line. Under current regulations, the railroad must
file a notice with the Board to consummate abandonment. See 49
C.F.R. ss 1152.50(e), 1152.29(e)(2).
5 "Rail banking" refers to the preservation of the right-of-way for
possible future reinstitution of rail service. In addition to private
railroad indicates its willingness to negotiate transfer of the
line to the trail sponsor, then the Board will issue a notice of
interim trail use ("NITU"). Under the NITU, the authoriza-
tion to abandon the line is stayed for a set period of time and
the railroad is instead authorized to transfer the line for rail
banking and interim trail use. If the parties' negotiations are
successful, then the line is conveyed for interim trail use and
possible future rail service. If the negotiations are unsuc-
cessful, then the railroad's exemption takes effect, and the
line may be abandoned. Whether the negotiations over inter-
im trail use are successful or not, the Board need not reopen
the proceeding once the NITU is issued.6
In February 1996, the Central Kansas Railway sought to
abandon a 33.4 mile rail line that it owned largely as ease-
ments over land belonging to others. CKR filed a notice of
exemption with the Board, indicating that the line qualified as
"out-of-service." The Board published a notice in the Federal
Register stating that the exemption would be effective April
12, 1996, unless the Board took further action. Central
Kansas Ry., LLC--Abandonment Exemption--in Marion &
McPherson Counties, KS, 61 Fed. Reg. 10,428, 10,429 (1996).
The notice also states that the exemption would be void ab
initio if CKR's notice contained false or misleading informa-
tion. Id.
On April 9, 1996, CKR indicated to the Board that it had
not abandoned the line and was willing to negotiate rail
banking-interim trail use with an entity (Jennings & Co.) that
had filed a statement of willingness to assume responsibility
for the line. On April 12, 1996, the Board issued a notice of
interim trail use and stayed the exemption for six months.
The Board subsequently granted two additional extensions of
time for the parties to negotiate rail banking-interim trail use.
In June 1997, the Central Kansas Conservancy also filed a
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organizations, state and local governments may also serve as trail
sponsors. See 16 U.S.C. s 1247(d) (Supp. III 1998).
6 However, on request of the parties, the Board will reopen the
proceeding to grant further stays of the exemption to allow the
parties more time for negotiations.
statement of willingness and requested a NITU. On June 12,
1997, in its final action in this proceeding (other than the
denial of the petition to reopen), the Board decided to issue a
NITU and to postpone the effective date of the exemption
until December 13, 1997. On September 19, 1997, pursuant
to this NITU, the railroad conveyed the 33.4 mile line to the
Conservancy for rail banking-interim trail use.
On September 25, 1997, Jost, who owns land over which the
line passes, filed a petition to reopen the abandonment pro-
ceeding on the grounds of material error and changed circum-
stances. Jost stated that both before and after filing its
notice of exemption, CKR had conveyed portions of the right-
of-way, which rendered the line unsuitable for rail banking,
and therefore for interim trail use. Jost argued that CKR's
failure to disclose these sales caused the Board to erroneously
issue a NITU. Jost also stated that CKR's conveyance of
portions of the right-of-way, together with the lack of service
on the line and the removal of rails, ties, and ballast, showed
that CKR had consummated abandonment of the line. Final-
ly, Jost argued that changed circumstances, i.e., recent ex-
pressions of opposition to interim trail use by local govern-
ments, indicated that the Conservancy would be unable to
meet its financial obligations for trail management.
CKR responded to Jost's filings by stating that, although it
had conveyed back some right-of-way along the line, it had
retained sufficient right-of-way in all sales to allow for rail
banking-interim trail use.7 Since the right-of-way sales did
not impact rail banking or interim trail use, CKR argued it
was not misleading to omit them.
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7 The pre-sale right-of-way width was from 100-300 feet. The
post-sale right-of-way width, according to CKR, was from 50-230
feet. Right-of-way as little as 30 feet wide has been found to be
sufficient for safe rail operations. See Boston & Maine Corp. &
Springfield Terminal Ry. Corp.--Abandonment & Discontinuance
of Service in Hartford County, CT in the Matter of a Request to Set
Terms & Conditions, (Docket No. AB-32) (Sub.-No. 43) (Aug. 9.
1991) (citing examples of 30-, 30- and 50-foot wide rights-of-way,
but noting that question is highly fact specific). Thus, CKR con-
tends it only sold "excess" right-of-way.
Jost responded by arguing that CKR had not simply con-
veyed "excess" right-of-way. Jost presented affidavits stat-
ing that, in three places, CKR had sold the entire, or "full-
width," right-of-way, breaking up the continuity of the line.
CKR replied that the deeds in question were facially ambigu-
ous, and that it believed it had only conveyed excess right-of-
way.8
The Board denied Jost's petition to reopen the abandon-
ment proceeding. The Board concluded that CKR's discon-
tinuance of service and removal of rails, ties and ballast did
not consummate abandonment, particularly in light of CKR's
ongoing negotiations over rail banking-interim trail use.
Central Kansas Ry., LLC--Abandonment Exemption--in
Marion & McPherson Counties, KS, (Docket No. AB-406)
(Sub.-No. 6X) (Dec. 19, 1998) ("CKR--Abandonment Exemp-
tion"), slip op. at 3 (citing Birt v. STB, 90 F.3d 580 (D.C. Cir.
1996)). The Board also found that Jost had not made a
specific showing that the Conservancy would be unable to
meet its financial obligations, and therefore the Board would
not reopen the proceeding to examine the Conservancy's
financial capacity.
Finally, the Board stated:
CKR has refuted these allegations [that the right-of-way
sales made interim trail use and rail banking impossible]
by submitting a verified statement specifically stating
that a sufficient width of right-of-way was conveyed to
CKC in all instances to permit trail use and to permit rail
service to be reinstituted for the entire length of the
right-of-way should there be an occasion for reestablish-
ment of such rail service in the future. Moreover, while
all of the parties' filings will be accepted into the record,
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8 The description of property to be conveyed in each case was a
map which contained both a written description and a yellow-shaded
area indicating what was to be conveyed. However, the written
description was inconsistent with the amount of right-of-way within
the yellow-shaded area. CKR submitted affidavits that its intent
was to sell only the amount indicated within the yellow-shaded area,
and not the entire amount of right-of-way in the written description.
we will not attempt to resolve all of the property issues
that these filings raise. State courts appear to be the
proper place for parties to resolve property disputes
about the parties' expectations and how much property
has been transferred and how much has been retained.
Id. at 5. The Board did not directly address Jost's contention
that the right-of-way sales rendered the notice of exemption
misleading and false, or that the right-of-way sales were
evidence of abandonment.
Jost petitioned for review of the Board's decision not to
reopen the proceeding, arguing that it was arbitrary and
capricious for the Board not to examine whether the Conser-
vancy was financially capable of being a trail sponsor, not to
find that the notice of exemption was void ab initio, not to
reconsider whether interim trail use was appropriate in light
of the sale of portions of the right-of-way, and not to find that
the line had been abandoned.
II. Discussion
A. Standard of Review
At the outset we must resolve the parties' disagreement
over the standard of our review of the Board's decision not to
reopen the proceeding. The Board contends that it is enti-
tled to a particularly deferential standard of review, since
Jost seeks review of a decision not to reopen a prior proceed-
ing. Jost, however, contends that the Board's decision not to
reopen the proceeding was clearly arbitrary and capricious
because it was flatly contrary to the Board's own regulations.
We agree with neither contention.
We have recently held that "a petition seeking review of an
agency's decision not to reopen a proceeding is not reviewable
unless the petition is based upon new evidence or changed
circumstances." Southwestern Bell Tel. Co. v. FCC, 180 F.2d
307, 311 (D.C. Cir. 1999). Southwestern Bell stated that the
"test for new evidence" is whether the evidence identified by
petitioners are " 'facts which through no fault of [the petition-
er's], the original proceeding did not contain.' " Id. at 312 (quoting ICC v. Brotherhood of Locomotive Eng'rs, 482 U.S.
270, 279 (1987)) (alterations in original).
In this case, we cannot fault petitioners for the lack of
information in the record about CKR's right-of-way sales.
First, the three sales where it is alleged that "full-width"
right-of-way was sold did not occur until after the notice of
exemption was filed. In addition, because the grant of a
NITU appears to be virtually automatic once a potential trail
sponsor and a railroad indicate their willingness to negotiate
interim trail use, there is very little time when a request for a
NITU is pending before the Board.9 Thus, the issuance of a
NITU is not a typical agency adjudication where any interest-
ed party has an opportunity to put evidence in the record for
the agency's consideration before the agency reaches its
decision. We do not see this process as being inconsistent
with, or an unreasonable interpretation of, the Trails Act, but
we cannot fault petitioners for failing to raise the question of
the right-of-way sales in the brief period in which the request
for a NITU was pending.10
It is true that the literal language of Jost's petition sought
to reopen the proceeding on the grounds of "material error,"
which would ordinarily not be a valid basis for a petition for
review. See Locomotive Eng'rs, 482 U.S. at 280; Southwest-
ern Bell, 180 F.3d at 311. However, Jost repeatedly indicates
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9 For example, in this case, the first statement of willingness was
filed April 9, 1997, and the Board decided to issue the NITU on
April 11, 1997, while the second statement of willingness was filed
on June 6, 1997, and the Board decided to issue a NITU on June 12,
1997.
10 This is not to say that the timing of the petition is irrelevant.
It may be that the Board is entitled to refuse to reopen a proceed-
ing where there is evidence a petitioner slept on her rights. At oral
argument, counsel for the Board suggested that the delay in raising
the issue of right-of-way sales was a valid reason not to reopen this
proceeding, but there is nothing in the Board's decision which
suggests that it was relying on that rationale. See SEC v. Chenery,
332 U.S. 194, 196 (1947) (reviewing court must "judge the propriety
of [agency] action solely by the grounds invoked by the agency").
that the "material error" he alleges is not that the Board
wrongly issued the NITU on the basis of the evidence in front
of it, but rather that the Board's decision was "based on
inaccurate, incomplete and misleading information provided
by [CKR]." Joint Appendix ("J.A.") at 94; see also id. at 103 ("STB's imposition of trail use conditions on the railroad
corridor was in material error because it was based on
inaccurate and insufficient facts presented to the STB.").
Thus, we believe that it is clear that the purpose of Jost's
petition was not to challenge the Board's reasoning but to
bring new material to its attention, and therefore the decision
not to reopen the proceeding is reviewable. See Fritsch v.
ICC, 59 F.3d 248, 252 (D.C. Cir. 1995) (reviewing ICC's
decision not to reopen abandonment/trail condition proceed-
ing because "[w]e ... interpret Locomotive Engineers as
permitting merits review of a refusal to reopen where the
motion to reopen was based on non-pretextual grounds of new
matter or changed circumstances, and not merely on material
error in the original agency decision").
While we believe that the Board's decision not to reopen is
reviewable, we do not accept Jost's contention that the Board
was required to reopen the proceeding once he filed a petition
containing new evidence. There is nothing in the Board's
regulations governing either petitions for reconsideration or
petitions to reopen proceedings which requires the Board to
grant such a petition. See 49 C.F.R. ss 1115.3, 1115.4.
Accordingly, we will review the Board's decision not to reopen
the proceeding under the familiar arbitrary and capricious
standard. See 5 U.S.C. s 706(2)(A).
"The requirement that agency action not be arbitrary and
capricious includes a requirement that the agency adequately
explain its result. The arbitrary and capricious standard of
the APA mandates that an agency take whatever steps it
needs to provide an explanation that will enable the court to
evaluate the agency's rationale at the time of decision."
Dickson v. Secretary of Defense, 68 F.3d 1396, 1404 (D.C. Cir.
1995) (internal quotation marks, brackets and citations omit-
ted). "[W]e may not supply a reasoned basis for the agency's
decision that the agency itself has not given. We will,
however, uphold a decision of less than ideal clarity if the
agency's path may reasonably be discerned." Motor Vehicles
Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29,
43 (1983) (citation omitted). In this case, we can discern the
agency's rationale with regard to the question of the Conser-
vancy's fitness to be a trail sponsor. We are, however, unable
to discern the agency's path in addressing CKR's sale of
portions of the right-of-way.
B. CKR's Right-of-Way Sales
Jost presented three reasons why the alleged sale of full-
width sections of the right-of-way required the Board to
reconsider its decision to allow interim trail use over the line.
First, Jost argued that the railroad's failure to disclose the
sale of portions of its right-of-way constituted false and
misleading information. See 49 C.F.R. s 1152.50(d)(3) (notice
of exemption void ab initio if it contains false or misleading
information). Second, Jost argued that the sale of full-width
right-of-way would cut the rail line in two, making it impossi-
ble to "rail bank" any part of the line, and therefore making
interim trail use inappropriate. Third, Jost argued that the
sale of portions of the line was additional evidence that CKR
consummated abandonment of the line, and therefore the
Board lost jurisdiction over the line, prior to issuance of the
NITU.
It appears that the sale of full-width right-of-way would be
material to the Board's decision in all of these three areas.
On the first issue, the Board argues in its brief that CKR's
notice of exemption is not void because there was no material
false statement. The Board relies on the fact that sale of the
right-of-way would not affect CKR's ability to use the exemp-
tion proceeding to abandon the line. However, sale of full-
width right-of-way certainly could affect CKR's ability to
obtain a NITU and convey the line for interim trail use. We
do not see--and the Board has not seen fit to tell us--why
false statements that affect the issuance of a trail condition, if
not the exemption itself, are not material to the proceeding.
At oral argument, counsel for the Board also suggested that
CKR may not have been under any obligation to inform the
Board that it had sold off portions of the right-of-way once it
filed its notice of exemption. Thus, it is possible that the
notice was not void ab initio because at the moment it was
filed it did not contain any material false statements, since
the right-of-way sold up to that point was not "full-width,"
and did not bisect the line. However, we are extremely
reluctant to accept that theory as a valid basis for upholding
the Board's decision, particularly in the absence of any evi-
dence that the Board itself relied on such a theory. In the
first place, it appears that five sales of right-of-way took place
before the notice of exemption was filed, and the Board never
addressed the significance of those sales to the feasibility of
either conversion to trail use or eventual reinstitution of rail
service.11 See J.A. 117-18. Perhaps more importantly, in the
absence of a definitive statement by the Board that petition-
ers are under no obligation to supplement a filing which
becomes false or misleading due to subsequent events, such
as the later sale of full-width right-of-way, we do not think
counsel's statement at argument, that no regulation specifical-
ly requires updating information in the notice of exemption, is
sufficient to demonstrate that the Board takes such a parsi-
monious and time-limited view of its own regulations barring
false statements.12 Cf. 49 C.F.R s 1114.29 (party engaged in
discovery in a Board proceeding "is under a duty seasonably
to correct his response" if he "knows or later learns that his
response [to a discovery request] is incorrect"). Since the
Board never discussed the false statement issue in its deci-
sion, we cannot assume that any false statements CKR may
have made were not material.
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11 Since apparently none of these sales involved "full-width" right-
of-way, there might be good reason for the Board to find that the
omission of these sales was not a material false statement, even as
to the NITU. However, we are not willing to assume such a finding
in the absence of any discussion by the Board of the question.
12 It is possible that such a limited view of what constitutes a false
statement could itself be "arbitrary, capricious, an abuse of discre-
tion, or otherwise not in accordance with law," but we have no
occasion to decide that question here. 5 U.S.C. s 706(2)(A).
As to the second issue, the effect of right-of-way sales on
rail banking, we do not read the Board's decision as saying
that, if full-width right-of-way sales had taken place, that fact
would not be material to its decision to impose a trail condi-
tion. The Board recognized that the parties were contesting
whether "CKR's [sales] have made interim trail use and rail
banking impossible" and indicated that if Jost's allegations
proved to be true, the Board "would revisit the issues."
CKR--Abandonment Exemption, slip op. at 5. Again, we see
no reason, and the Board's decision gives us none, why the
possibility that full-width sales occurred would not be materi-
al to the Board's decision to impose a trail condition.
Finally, we also think that the sale of right-of-way is
material evidence for the Board to consider in deciding
whether CKR abandoned the line prior to the issuance of the
NITU. We have previously indicated that "the pivotal issue"
in determining whether a railroad has consummated abandon-
ment "is the intent of the railroad--as evidenced by a spec-
trum of facts varying as appropriate from case to case." Birt
v. STB, 90 F.3d 580, 585 (D.C. Cir. 1996) (internal quotation
marks omitted). In this case, the Board looked to CKR's
discontinuance of service, its removal of rails, ties and ballast,
its negotiations over interim trail use, and its ultimate state-
ment that it had conveyed the line for interim trail use. We
can see no reason why the sale of portions of the right-of-way
would not also be an appropriate fact for the Board to
consider in evaluating the intentions of the railroad. It would
be strange, to say the least, if the removal of rails, ties and
ballast were material facts, but the sale of the entire right-of-
way at a given point were not. Cf. RLTD Ry. Corp. v. STB,
166 F.3d 808, 812 (6th Cir. 1999) (upholding Board's conclu-
sion that "a de facto abandonment occurred because the line
was no longer linked to and part of the interstate rail
system") (internal quotation marks omitted).
Since the possibility that CKR had sold off full-width right-
of-way was material to the issues before the Board, the Board
needed to address forthrightly the issue of whether CKR did
sell off full-width right-of-way, or, at least, explain why the
possibility that full-width right-of-way was sold would not
alter the Board's decision to issue a NITU. However, the
only reference by the Board to any of these issues was the
passage quoted at length above. Unfortunately, that passage
is entirely too opaque to enable us to review meaningfully the
Board's decision.
It is possible to read the sentence which states that "CKR
has refuted [Jost's] allegations" as a factual finding by the
Board, based on the affidavits in the record, that CKR had
not sold full-width right-of-way. In that case, we could
review the Board's finding to determine whether it had
sufficient support in the record not to be arbitrary and
capricious. However, in the very next sentence, the Board
states that it "will not attempt to resolve all of the property
issues that these filings raise," and suggests that the parties
should resolve their differences in state court.13
The basis for an administrative action
must be set forth with such clarity as to be understanda-
ble. It will not do for a court to be compelled to guess at
the theory underlying the agency's action; nor can a
court be expected to chisel that which must be precise
from what the agency has left indecisive. In other
words, [w]e must know what a decision means before the
duty becomes ours to say whether it is right or wrong.
SEC v. Chenery Corp., 332 U.S. 194, 196-97 (1947) (internal
quotation marks omitted).
In this case, we simply cannot tell what the decision means,
i.e., on what basis the Board concluded that Jost's evidence of
the sale of full-width right-of-way did not require reopening
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13 The Board's brief similarly attempts to straddle these two
approaches. In one place the brief states that "[t]he Board placed
substantial weight on CKR's verified statement ... [and] concluded
that petitioners had not proven that the conveyance of interests in
certain lots ... makes reactivation of rail service impossible."
Resp'ts' Br. at 13. Elsewhere the brief suggests that the Board
"declined to speculate on the outcome of a [state court] quiet-title
action," id. at 24, and "[p]roperly [d]eferred" to a state court
determination. Id. at 23.
the proceeding. It appears unlikely that the Trails Act either
requires the Board to determine for itself in every case the
validity of the railroad's property rights, or allows the Board
to disregard totally prima facie evidence that the railroad no
longer owned an adequate right-of-way. Cf. Idaho N. & Pac.
R.R. Co.--Abandonment & Discontinuance Exemption--In
Washington & Adams Counties, ID, Docket No. AB-433
(Sub.-No. 2X) (April 1, 1998) ("Idaho Northern") ("[I]f a trail
use arrangement is successfully negotiated, and a landowner
or other interested party presents evidence to call into ques-
tion the continued application of the Trails Act, we would
reopen the proceeding to afford the trail user an opportunity
to demonstrate that it continues to meet the requirements of
the statute.").14 At the same time, even if some full-width
right-of-way was sold, it may be that the Act authorizes
interim trail use over the remaining right-of-way, assuming
the Board retains jurisdiction over the line. We would defer
to the Board's reasonable interpretation of what the Act
requires, see Chevron U.S.A. Inc. v. Natural Resources De-
fense Council, Inc., 467 U.S. 837, 842-43 (1984), if we could
discern the Board's interpretation in its decision.
Unfortunately, the Board's decision "cross[es] the line from
the tolerably terse to the intolerably" elliptic. Greater Bos-
ton Television Corp. v. FCC, 444 F.2d 841, 852 (D.C. Cir.
1970). The Board needs to articulate how it proceeds when
faced with an allegation that sales of full-width right-of-way
have occurred, and why it believes that practice is consistent
with statutory requirements governing its jurisdiction and the
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14 We do not hold that the Board is required to resolve disputed
issues of state property law, or even that the Board is necessarily
required to reopen the proceeding on the evidence presented by
Jost. If the Board chooses to reopen the proceeding, it may be
appropriate for the Board to stay proceedings pending action in a
state court. Alternatively, the Board may choose to make its own
determination, subject to revision upon notice of a final state court
judgment. We only require that the Board address the material
issues of fact which have been raised concerning the applicability of
the Trails Act in whatever way the Board finds most consistent with
the language and goals of the Act.
Trails Act. At that point, if petitioners are still dissatisfied,
this court will have something to review.
If the Board was elliptic about why it need not consider
whether the sales made rail banking impossible, it was mute
on why it need not consider whether the sales made CKR's
notice of exemption void, or constituted evidence of abandon-
ment of the line. Again, we presume neither to suggest a
rationale nor to find one in the tea leaves of the Board's
opinion. We simply hold that the Board must articulate the
reasoning behind its decision with sufficient clarity to enable
petitioners and this court to understand the basis for its
decision.
C. The Conservancy's Fitness to Serve as Trail Sponsor
The Board's treatment of Jost's challenge to its decision
not to reopen the proceeding to examine the financial fitness
of the Conservancy to serve as trail sponsor illustrates well
the Board's ability to articulate the basis for its decision.
Jost's petition, construed somewhat generously, challenged
both the Board's general policy concerning financial "fitness
tests" and the application of that policy to the Conservancy.
In rejecting Jost's challenge, the Board clearly stated the
standard it was applying, the rationale for that standard, and
why the petition did not satisfy that standard.
In its decision, the Board followed and restated the policy
with regard to financial "fitness tests" that was explained in
Idaho Northern. In Idaho Northern, the Board indicated
that it interpreted the phrase "qualified private organization"
in section 1247(d) to mean any organization willing to assume
management and financial responsibility for the line in ques-
tion. In this case, as in Idaho Northern, the Board noted
that negotiation over a trail condition delays abandonment of
a line, and extends the railroad's responsibility for the right-
of-way. Accordingly, "the primary purpose of a fitness test
would be to protect a railroad from wasting its time negotiat-
ing with an unfit trail sponsor. However, the railroad al-
ready has the ability to protect itself from that result merely
by refusing to consent to the issuance of the trail condition."
CKR--Abandonment Exemption, slip op. at 4; see also Idaho
Northern (employing similar reasoning and noting that ten
years of experience with the Act had not shown any problem
with trail sponsors failing to meet their responsibilities). The
Board stated that not only was a financial fitness test for trail
sponsors unnecessary, but such a test would be contrary to
the intent behind the Trails Act because it could have the
effect of deterring or delaying interim trail use.
For these reasons, the Board applies a presumption that
any private organization that files a statement of willingness
meets the statutory requirement to be a trail sponsor. How-
ever, the Board's presumption that a trail sponsor is qualified
is rebuttable. The Board has indicated that "if it is shown
that the trail sponsor does not have the ability to continue to
meet the financial and liability conditions of the statute, the
trail condition would be involuntarily revoked." CKR--Aban-
donment Exemption, slip op. at 4-5.
Jost characterizes this policy as an abdication of the
Board's statutory responsibilities. We disagree and conclude
that the Board's policy is a reasonable interpretation of its
obligation under the statute. There certainly is nothing in
the statute which expresses a congressional intent contrary to
the Board's practices. Cf. Chevron, 467 U.S. at 842-43 ("[T]he court, as well as the agency, must give effect to the
unambiguously expressed intent of Congress."). The Trails
Act is virtually silent on what makes a private organization
"qualified" to be a trail sponsor. The Act is clear, however,
that the Board "shall" impose a trail condition, and not permit
abandonment of a line, whenever a railroad is prepared to
convey the right-of-way to an organization that is "prepared
to assume full responsibility" for management of the line, for
liability, and for taxes owed. 42 U.S.C. s 1247(d) (Supp. III
1998); see also Goos v. ICC, 911 F.2d 1283, 1295 (8th Cir.
1990) (statute gives agency "little, if any, discretion to fore-
stall a voluntary agreement to effect a conversion to trail
use"). It is certainly reasonable for the Board to draw from
the Act a congressional intent "to preserve for possible future
railroad use rights-of-way not currently in service and to
allow interim use of the land as recreation trails," Preseault,
494 U.S. at 6, and to carry out its mandate in ways that
further, rather than unnecessarily hinder, those goals. The
Board's explanation of why a presumption of fitness is consis-
tent with the goals of the Act is reasonable. See CKR--
Abandonment Exemption, slip op. at 4 ("A railroad presum-
ably would not agree to negotiate with a prospective trail
sponsor unless the railroad believes the trail sponsor will be
able to manage the right-of-way and assume legal liability and
pay taxes. ... Pending an agreement with the proponent of
any interim trail, or the consummation of the abandonment,
the right-of-way remains the responsibility of the railroad.
Thus, the carrier is the most appropriate party to determine
whether any offer is likely to prove successful both in meeting
the railroad's desires and in fulfilling the statutory and regu-
latory liability requirements of the Trails Act. Requiring the
proponent of a trail ... to pass a fitness test whenever the
Board issues a trail condition could deter or delay interim
trail use, which would be contrary to Congress' intent to
facilitate and encourage rail banking and interim trail use
....") (citation omitted). In short, we believe the Board's
use of a rebuttable presumption in these circumstances is a
reasonable interpretation of the Trails Act, and, therefore, we
will not overturn it.15 See Chevron, 467 U.S. at 845.
Having found the Board's policy to be reasonable under the
statute, the next question is whether the Board's application
of that policy in this case was arbitrary and capricious. See 5
U.S.C. s 706(2)(A). Jost argues that he presented sufficient
information to rebut the presumption that the Conservancy
was capable of meeting its responsibilities as trail sponsor.
The information Jost presented was that three local govern-
ments had expressed their opposition to interim trail use, and
also that Kansas state law would impose substantial responsi-
bilities on a trail sponsor, such as weed and litter control, and
the installation of signs and fencing.
The Board found that "there has been no specific showing
here that the trail sponsor has not met, or likely will not be
able to meet, its financial obligations regarding this trail."
CKR--Abandonment Exemption, slip op. at 5. The Board
__________
15 Similarly, we see nothing in the Trails Act that requires the
Board to license petitioners to engage in discovery of the financial
fitness of potential trail sponsors.
stated that "the Trails Act does not require a trail to be
'developed' in any particular way" and "there is no absolute
time limit for how quickly a trail must be developed to its
intended level of use." Id.
We see no basis for finding that this conclusion was arbi-
trary or capricious. Jost offered nothing but speculation that
the Conservancy would be unable to meet its responsibilities.
The Conservancy never indicated to the Board that it was
relying on local governments for funding, so it is not clear
why their opposition should raise any inference that the
Conservancy could not raise needed funds. In the absence of
any real evidence that the Conservancy was failing to meet,
or would fail to meet, its responsibilities, there is no reason to
believe that the presumption of financial fitness had been
rebutted. Accordingly, we will uphold the Board's decision
not to examine the Conservancy's fitness to be a trail sponsor.
III. Conclusion
We conclude that the Board's decision not to reopen the
proceeding to examine Central Kansas Conservancy's fitness
to be a trail sponsor was not arbitrary and capricious. How-
ever, because we are unable to discern the basis for the
Board's decision that it was unnecessary to reopen the pro-
ceeding to consider Central Kansas Railway's right-of-way
sales, we remand this case to the Board for further proceed-
ings consistent with this opinion.
So ordered.