UNITED STATES COURT OF APPEALS FOR THE D.C. CIRCUIT


WE COAL TRAF LEAG

v.

STB


00-1115a

D.C. Cir. 2000


*	*	*


United States Court of Appeals


FOR THE DISTRICT OF COLUMBIA CIRCUIT


Argued June 13, 2000 Decided July 14, 2000 


No. 00-1115


Western Coal Traffic League, et al.,  Petitioners


v.


Surface Transportation Board and United States of America, 
Respondents


Norfolk Southern Corporation, et al., Intervenors


Consolidated with  00-1118, 00-1120


On Petitions for Review of an Order of the  Surface Transportation
Board


Roy T. Englert, Jr. argued the cause for petitioners. With  him on the
briefs were Erika Z. Jones, David I. Bloom, 


Adam C. Sloane, William L. Slover, C. Michael Loftus,  Robert D.
Rosenberg, Paul A. Cunningham, David A. Bono,  Richard B. Herzog,
Gerald P. Norton, Richard E. Weicher,  Robert B. Fiske, Jr. and Guy
Miller Struve.


Robert P. vom Eigen, Roderick B. Williams, Frederic L.  Wood, Nicholas
J. DiMichael, Harold A. Ross and Daniel R.  Barney were on the joint
brief of intervenors Gaylord Con- tainer Corporation, et al., and
amici curiae The Fertilizer  Institute, et al., in support of
petitioners. Thomas J. Litwiler  and Peter S. Glaser entered


Craig M. Keats, Associate General Counsel, Surface Trans- portation
Board, argued the cause for respondents. With  him on the brief was
Ellen D. Hanson, General Counsel.


George A. Aspatore, G. Paul Moates, Vincent F. Prada,  Paul A.
Hemmersbaugh, Peter J. Shudtz, Dennis G. Lyons,  Terence M. Hynes,
James V. Dolan, Louise A. Rinn, J.  Michael Hemmer, David L. Meyer,
William A. Mullins,  Clinton J. Miller, III, Daniel R. Elliott, III,
Gregory B.  Robertson, Daniel A. LaKemper and John D. Sharer were on 
the joint brief of intervenors Norfolk Southern Corporation,  et al.,
and amici curiae James River Coal Company, et al., in  support of
respondent. Louis E. Gitomer, Donald H. Smith  and William A. Mullins
entered appearances.


Before: Williams, Ginsburg and Sentelle, Circuit Judges.


Opinion for the Court filed by Circuit Judge Ginsburg.


Dissenting opinion filed by Circuit Judge Sentelle.


Ginsburg, Circuit Judge: The Western Coal Traffic  League, the Canadian
National Railway Company (CN), the  Burlington Northern Santa Fe
Corporation, and the Burling- ton Northern and Santa Fe Railway
Company (BNSF) (col- lectively, BNSF) petition for review of a
decision by the  Surface Transportation Board to place a 15-month
"moratori- um" upon the filing of railroad merger applications. The 
Board initiated the moratorium after BNSF and CN had 


notified the Board that they planned to submit a merger  application.
BNSF argues that the Board lacks the authority  to impose a moratorium
upon the filing of merger applica- tions; by declaring the moratorium
the Board violated its  statutory duty to consider and to rule upon
merger applica- tions within a prescribed period of time; and that the
Board's  decision was arbitrary and capricious. We conclude the  Board
neither violated the statute nor otherwise exceeded its  authority by
imposing the moratorium and deny the petition  for review.


I. Background


The railroad industry has undergone a considerable consoli- dation in
recent years, with the result that there remain only  four large
railroads in the United States and two in Canada.  According to the
Board, the most recent of these consolida- tions have led to severe
disruptions in service. After BNSF  and CN announced in December 1999
their proposal to merge  as soon as the Board approved, the Board
expressed concern  that the merger could further exacerbate service
problems;  the Board also determined that the merger could well be the
 first in a final round of mergers that would leave only two  major
lines serving all of North America.


After BNSF and CN formally notified the Board on De- cember 20, 1999
that they would file a merger application in  three to six months, see
49 C.F.R. s 1180.4(b), the Board  issued a Notice of Public Hearing
and Request for Comments  on the future of the railroad industry and
on the proper role  of mergers in shaping that future. See Decision,
Public  Views on Major Rail Consolidations, Ex Parte No. 582 (Janu-
ary 24, 2000). The Notice indicated that, although the Board  was
prompted to consider consolidation in the railroad indus- try in part
because of the BNSF/CN proposal, the agency  intended to consider the
issues raised by consolidation sepa- rately from, and not as a
"prejudgment" of, the BNSF/CN  application. The Board did not mention
in the Notice that it  might impose a moratorium upon the filing of
merger applica- tions. At the conclusion of the comment period,


Board announced a 15-month moratorium upon the filing of  merger
applications because


the rail community is not in a position to now undertake  what will
likely be the final round of restructuring of the  North American
railroad industry, and because [the  Board's] current rules are simply
not appropriate for  addressing the broad concerns associated with
reviewing  business deals geared to produce two transcontinental 


Decision, Public Views on Major Rail Consolidations, STB Ex  Parte No.
582 (March 16, 2000); see also Corrected Decision,  Public Views on
Major Rail Consolidations, STB Ex Parte  No. 582 (April 7, 2000). The
Board stated it would use this  time to review and revise its
standards for considering merg- er proposals. Among the concerns
raised by commentors,  the Board noted the service disruptions that
had resulted  from prior mergers, and the decreased competition that
could  result from further consolidation within the industry. The 
Board acknowledged that "holding up [the BNSF/CN] merg- er application
proceeding would itself be viewed negatively by  the financial markets
as creating uncertainty," but found the  potential benefits to the
carriers of going forward at once on  the merger application
outweighed by the uncertainty of  processing the application "without
appropriate rules in place  at the beginning to govern the


BNSF contends--in a variety of ways--that the Board may  not lawfully
postpone its acceptance or its review of a railroad  merger proposal.
The petitioners' central argument and the  theme underlying most of
its arguments is that, under the  timeline set out in 49 U.S.C. s
11325, the Board must accept  when proffered any merger application
that is complete, and  must decide whether to approve the proposed
merger within  16 months of receiving the application.


II. Analysis


To the extent BNSF argues that the Board lacks the  statutory authority
to impose a moratorium, we review the  Board's construction of the
statute under the standards estab-


lished in Chevron U.S.A. Inc. v. Natural Resources Defense  Council,
Inc., 467 U.S. 837, 842-44 (1984). At step one we  ask whether the
Congress "has directly spoken to the precise  question at issue." Id.
at 842. If it has, then we are bound  to "give effect to the
unambiguously expressed intent of  Congress." Id. at 843. If it has
not, then we proceed to step  two, and defer to the Board's
interpretation of the statute so  long as it is "based on a
permissible construction of the  statute." Id. Our inquiry at step two
is informed by the  Supreme Court's recent teaching in Food and Drug
Adminis- tration v. Brown & Williamson Tobacco Corp., 120 S. Ct. 
1291, 1300-01 (2000), that a reviewing court should "examin[e]  a
particular statutory provision ... '[in] context and with a  view to
[its] place in the overall statutory scheme' ... [and]  be guided to a
degree by common sense as to the manner in  which Congress is likely
to delegate a policy decision of such  economic and political


If we find (as we do) that the Board has the statutory  authority to
impose a moratorium, we will uphold its decision  to do so as long as
it "examine[d] the relevant data and  articulate[d] a satisfactory
explanation for its action including  a 'rational connection between
the facts found and the choice  made.' " Motor Vehicle Mfrs. Ass'n v.
State Farm Mutual  Auto. Ins. Co., 463 U.S. 29, 43 (1983) (quoting
Burlington  Truck Lines, Inc. v. United States, 371 U.S. 156, 168


A. The Board's Statutory Authority


The main statutory direction for the Board's review of  merger
proposals appears in 49 U.S.C. ss 11324 and 11325.  In s 11324(a) the
Board is instructed to begin considering a  merger application upon
receipt of the application and to  consider, among other things,
"whether the proposed transac- tion would have an adverse effect on
competition among rail  carriers." 49 U.S.C. s 11324(b)(5). The Board
must "ap- prove and authorize" a merger it finds to be "consistent
with  the public interest." 49 U.S.C. s 11324(c).


Section 11325 instructs the Board within 30 days of receiv- ing an
application either to reject it as incomplete or, if it is 


complete, to publish notice of the application in the Federal 
Register. See 49 U.S.C. s 11325(a). The Board must con- clude its
evidentiary proceedings within one year of publish- ing the notice,
and issue a final decision within 90 days of  concluding the
evidentiary proceedings. Id. s 11325(b)(3).


1. The Positions of the Parties


In the Decision announcing the moratorium, the Board  explained that it
could not then adequately determine wheth- er any further railroad
mergers were in the public interest.  Indeed, the Board imposed the
moratorium specifically in  order to review its criteria for
determining the public inter- est. In addition to the "public
interest" mandate of  s 11324(c), the Board cited as authority for the
moratorium  49 U.S.C. s 721(a), which authorizes the Board to "carry
out  ... [and] prescribe regulations in carrying out" merger pro-
ceedings, and 49 U.S.C. s 721(b)(4), which authorizes the  Board,
"when necessary to prevent irreparable harm, [to]  issue an
appropriate order without regard to [certain require- ments of the


BNSF emphasizes that s 11325 by its terms requires the  Board to adhere
to a strict timetable; once a complete  application is proffered--and
the Board does not claim that  the BNSF/CN application will be
incomplete--the Board  must accept and consider it pursuant to the
statutory time- line.* Because the moratorium "drains the force" of




__________

n * The petitioner argues that we should analyze this case under 
Chevron step one; that is, the petitioner claims that the Congress 
has specifically addressed whether the Board has the authority to 
impose the moratorium. See Blue Br. 21-22. Although the dissent 
questions whether Chevron applies here, see Dis. Op. 1-2, we take  the
arguments as we find them and do not on our own initiative  review the
agency's actions more searchingly than the petitioners  request. See
Frederick Cty. Fruit Growers Ass'n v. Martin, 968  F.2d 1265, 1272
(D.C. Cir. 1992); see also Forester v. Consumer  Prod. Safety Comm'n,
559 F.2d 774, 789-90 n.22 (D.C. Cir. 1977)  (declining to apply more
stringent standard of review because,  among other things, neither
party argued the point). And under  Chevron step one our dissenting
colleague and we are in agreement 


deadlines set up in s 11325, BNSF maintains that authority  for a
moratorium must come "clearly" from the Congress.


As BNSF notes, none of the provisions cited by the Board  expressly
authorizes the agency to impose a moratorium upon  the filing of
merger applications. The general rulemaking  authority of s 721(a)
does not "trump" the specific require- ments of s 11325 and, even
assuming arguendo that the  moratorium properly may be considered an
injunctive-type  order, which BNSF disputes, s 721(b)(4) does not
relieve the  Board of any of its statutory duties except adherence to
the  APA. Finally, BNSF urges that the Board's mandate to  consider
the "public interest" does not relieve the agency of  the obligation
to do so within the time frame provided in  s 11325.


In response, the Board argues that the moratorium is  consistent with
its governing statute, understood in the light  of applicable case
law. First, the Board notes that it has  been delegated by the
Congress "exclusive and broad authori- ty to determine whether rail
mergers are in the public  interest"; this "broad delegation" of
authority, it argues,  implicitly carries with it the discretion to
place "a temporary  hold" upon the receipt of merger applications when
warranted  by "extraordinary circumstances." Second, the Board relies 
upon several cases in which courts have upheld various  agency
decisions to place a moratorium or "freeze" upon the  processing of
applications. See, e.g., Permian Basin Area  Rate Cases, 390 U.S. 747,
777-81 (1968) (approving moratori- um on rate proceedings under s 4(d)
of Natural Gas Act);  Neighborhood TV Co., Inc. v. FCC, 742 F.2d 629,
634-40 (D.C.  Cir. 1984) (approving interim processing procedures,
pending  promulgation of final rules, including freeze upon filing of 
certain applications for broadcast licenses); Westinghouse  Elec.
Corp. v. NRC, 598 F.2d 759, 769-76 (3d Cir. 1979)  (upholding two-year
suspension of pending rulemaking and  related licensing proceedings);
Krueger v. Morton, 539 F.2d  235, 239-40 (D.C. Cir. 1976) (upholding




__________

n that "the statute is not free of ambiguity," and that we must 
therefore proceed under Chevron step two.


coal permits as not abuse of discretion); Kessler v. FCC, 326  F.2d
673, 679-85, (D.C. Cir. 1963) (upholding "freeze" upon  acceptance of
applications pending adoption of new rules).  The Board argues that,
like the agencies in the cited cases, it  was reasonable in imposing
the moratorium in order properly  to determine where the public
interest lies in light of the  recent changes in the railroad
industry, including increased  concentration and the service
disruptions that resulted from  previous mergers.


2. Resolution


The statute does not address the unanticipated conflict this  case
presents between the process by which the Board is to  review a
proposed merger and the purposes for which the  Board is to conduct
its review. Because the Congress has not  "directly spoken to the
precise question at issue," Chevron,  467 U.S. at 842, we review the
Board's resolution of that  conflict under Chevron step two. Here we
take BNSF's  argument as implicitly including, in the alternative, the
posi- tion that the Board's interpretation is unreasonable under 
Chevron step two. We acknowledge that it would not be  illogical to
infer that, because the Congress intended in  s 11325 to expedite the
Board's review of merger proposals, a  moratorium that delays the
start of that review depends upon  an unreasonable reading of the
statute as a whole. We are  persuaded otherwise, however, by the
numerous cases up- holding agency decisions to defer actions mandated
by statute  (here, review of a proposed merger pursuant to the
timetable  in s 11325) where doing so is administratively necessary in
 order to realize the broader goals of the same statute (here, 
maintenance of rail service to the public and "competition  among rail


For example, in Westinghouse, the Third Circuit consid- ered whether
the Nuclear Regulatory Commission had statu- tory authority to suspend
for two years a rulemaking and a  related licensing proceeding for
recycling and reusing spent  nuclear fuel. See 598 F.2d 762-64. The
NRC was prompted  to halt such proceedings after President Carter
issued a  policy statement expressing concerns about the use of


cled nuclear fuel. Id. at 764-65. The Commission also  wanted time to
receive the results of two on-going studies.  Id. at 770. The
petitioners argued that the Commission was  bound by s 103 of the
Atomic Energy Act of 1954 (AEA),  which governs the grant of
commercial licenses, to consider  the applications under a set of
criteria previously established  by the Commission; that is, the
agency could not issue a  moratorium in the middle of an on-going
proceeding. The  court agreed with the petitioners' reading of s 103
but none- theless rejected their argument, holding that the Commis-
sion's general duty to protect the common defense and securi- ty
warranted its decision not to comply with the precise  requirements of


We agree with petitioners that under s 103, once an  applicant complies
with the provisions of the AEA and  Commission rules and regulations,
the NRC must issue a  license unless it determines that "the issuance
of a  license to such person would be inimical to the common  defense
and security or to the health and safety of the  public." But we do
not believe that a finding of inimicali- ty or noncompliance with the
applicable requirements  has to be made before the NRC may suspend
license  application proceedings. This would appear to be partic-
ularly true where a moratorium is declared to enable the  Commission
to make a reasoned decision regarding the  rules and regulations that
should be applied and whether  the issuance of licenses would be
inimical to the common  defense and security.


Id. at 772; see also Krueger, 539 F.2d at 239-40 (Secretary's  decision
to suspend grants of coal permits consistent with  larger objectives
of statute).


Likewise, in Commonwealth of Pennsylvania v. Lynn, 501  F.2d 848 (D.C.
Cir. 1974), we considered whether the Secre- tary of Housing and Urban
Development was authorized to  suspend several federal housing subsidy
programs in order to  study and evaluate whether the programs actually
were  achieving--rather than frustrating--the purposes of the Con-
gress in authorizing them. The relevant provisions of the 


housing statutes authorized the Secretary to enter into hous- ing
contracts, directed the Secretary to issue "pertinent regu- lations,"
and authorized the appropriation of sums necessary  to conduct the
programs. See id. at 852-53. There was no  indication on the face of
the statutes that the Secretary could  suspend operation of the
programs. See id. at 854.


Noting that the suspension " 'reflects real concern about  the equity
and efficiency of these programs,' " we asked: "(1)  whether the
Congress gave the Secretary discretion to halt  the programs for
program-related reasons, and (2) if so,  whether that discretion was
abused." Id. at 852. We then  noted that determining whether the
Congress had vested the  Secretary with the discretion he claimed was
"preeminently a  question of intent." Id. An examination of the
relevant  statutes and legislative history yielded a further-refined


The real question here is whether the Secretary has the  discretion, or
indeed the obligation, to suspend the pro- grams' operation when he
has adequate reason to believe  that they are not serving Congress's
purpose of aiding  specific groups in specific ways, or are
frustrating the  national housing policies applicable to all housing
pro- grams. We think he has this limited discretion.


Id. at 855-56. We recognized that although ordinarily the  Secretary
would report to the Congress any major difficulty  he was having with
a particular program and await its action,  in some situations the
delay inherent in such a process may  be untenable:


If the programs are indeed disserving congressional poli- cy, their
continued operation at normal levels for the  nine-month period deemed
necessary for their evaluation  would implicate the Secretary in a
massive frustration of  that policy. Commitments made under these
programs  may obligate the federal government, irrevocably, to  make
very substantial outlays for ... many ...  years.... A court is
properly reluctant to conclude that  Congress forbade the Secretary to
withhold commit- ments of so vast a magnitude when he has good reason


believe that exercising his authority would be contrary to  the
purposes for which Congress authorized him to act.


Id. at 856.


In the present case, the Board believes that without an  opportunity to
re-evaluate its standards for determining the  public interest, it too
risks a "massive frustration" of congres- sional policies, here the
substantive policies prescribed in  ss 11324(b)(5) & (c). The agency's
concern in Lynn is equal- ly present in this case: forcing the Board's
hand before it is  ready to act could bring about momentous changes in
the  railroad industry, including a loss of competition that may 
never be restored.


BNSF would have the court distinguish the line of cases  just canvassed
on the ground that the statutes in question did  not contain specific
timelines for processing applications.  True enough, but we have also
considered numerous cases in  which an agency failed to meet a
statutory deadline; in these  cases we have similarly considered
whether the agency has  demonstrated a reasonable need for delay in
light of the  duties with which it has been charged. As we first
indicated  in Telecommunications Research and Action Center v. FCC, 
750 F.2d 70 (D.C. Cir. 1984), the specificity of the statutory 
timetable is merely one of six factors we consider when  determining
whether a protestant is entitled to relief from the  agency's delay.
See TRAC, 750 F.2d at 80. For example, the  importance of meeting the
statutory deadline must be  weighed against the effect of expedited
action upon "agency  activities of a higher or competing priority,"
and the length of  the delay must be considered.*




__________

n * We recognize, of course, that unlike most unreasonable delay  cases
under TRAC, this is not a mandamus proceeding; BNSF's  burden is not
to demonstrate that it has a "clear and indisputable  entitlement to
relief" but that the agency's interpretation of the  statute it
administers is not "permissible." The standards are  similar, however,
in that the considerations relevant in a mandamus  case based upon
unreasonable agency delay play a part in this case  as well. The
agency's defense of its interpretation depends primar- ily upon the
claimed need to make a trade off between statutory 


Consider In re Barr Laboratories, Inc., 930 F.2d 72 (D.C.  Cir. 1991),
which involved a 1984 amendment to the Food,  Drug, and Cosmetic Act
that required the Food and Drug  Administration " '[w]ithin one
hundred and eighty days of the  initial receipt of a [generic drug]
application ... [to] approve  or disapprove the application.' " 930
F.2d at 74 (quoting 21  U.S.C. s 355(j)(4)(A)). The applicant claimed
that the FDA  had repeatedly exceeded the 180-day deadline in
processing  its applications, often taking more than twice the time
allowed  to process an application. See id. Despite the clear 180-day 
deadline in the statute, we denied the company's petition for 
mandamus because we simply were not in a position to dictate  to the
agency how to set its priorities:


The agency is in a unique--and authoritative--position to  view its
projects as a whole, estimate the prospects for  each, and allocate
its resources in the optimal way. Such  budget flexibility as Congress
has allowed the agency is  not for us to hijack.


Id. at 76.


Similarly, we will not dictate that the Board must comply  with a
deadline for determining whether a merger application  is in the
public interest when it claims, in apparent good faith,  that in its
"unique--and authoritative" view it needs time to  reconsider its
standards for evaluating the public interest.  Although s 11325
clearly indicates a congressional intent for  the Board to conduct
merger reviews expeditiously, we must  bear in mind that the Board is
also charged, in reviewing  merger proposals, with considering among
other things "the  effect of the proposed transaction on the adequacy
of trans- portation to the public," and "whether the proposed transac-
tion would have an adverse effect on competition among rail 




__________

n goals--expediting merger review, on the one hand, and preserving 
competition and service to the public on the other--that seem to 
conflict in the circumstances of this case. If these conflicting 
circumstances make reasonable the Board's interpretation of its 
authority to delay the processing of a merger application, then it 
must prevail regardless whether the question is that posed under 
Chevron step two or under TRAC.


carriers." 49 U.S.C. s 11324(b)(1), (5); see also id.  s 10101(4)
(policies for regulating railroad industry include  ensuring
"effective competition among rail carriers" and that  rail carriers
"meet the needs of the public"). As the Board  noted in announcing the
moratorium, increased consolidation  in the railroad industry gave
rise to concerns about preserv- ing competition in the industry, and
the service disruptions  that have resulted from previous mergers have
similarly  given rise to concerns about the ability of carriers to
meet the  needs of the public. Neither the statute nor the legislative
 history give any indication that the Congress considered  compliance
with the timeline in s 11325 more important than  the substantive
purposes for which the Board reviews merger  applications. Indeed,
forcing the Board to proceed pursuant  to s 11325 before it has had an
opportunity to determine  where the public interest lies would defeat
altogether the  purpose of the agency's review, whereas allowing the
Board  to focus for a reasonable time upon revising its criteria would
 likely enable the Board to continue to meet its deadlines once  it
resumes processing applications.


The present state of the railroad industry thus is one of  those
"unanticipated circumstances" that require us to "con- strue the
relevant statutes in a manner that most fully  effectuates the
policies to which Congress was committed."  Lynn, 501 F.2d at 857. In
doing so, we conclude under step  two of Chevron that the Board has
reasonably interpreted the  relevant statutes to accommodate a
moratorium where neces- sary to carry out its duties to preserve
competition and  protect the public interest. Where, as in this case,
there is no  evidence (or indeed, allegation) of bad faith on the part
of the  agency, and the agency has demonstrated a reasonable need  for
delay, "we have no reason to think that judicial interven- tion would
advance either fairness or Congress's policy objec- tives." In re Barr


As the TRAC cases make clear, however, we do not grant  the agency a
free pass; we expect that the Board's effort to  devise new standards
will be undertaken expeditiously, and  that the agency will resume its
acceptance and review of  merger applications promptly at the end of
the 15-month 


moratorium. See also In re United Mine Workers of Amer- ica Int'l
Union, 190 F.3d 545, 550-51, 556 (D.C. Cir. 1999)  (holding Mine
Safety and Health Administration violated  express statutory timetable
for issuing regulation but, instead  of issuing writ of mandamus,
retaining jurisdiction over case  to assure final agency action
without undue further delay).  Otherwise, as the Board correctly
acknowledged at oral argu- ment, should BNSF bring a claim of
unreasonable delay after  the 15 months have run, the duration of the
moratorium  would be included in calculating the length of the
agency's  delay. See Kessler, 326 F.2d at 684 & n.10.


B. The Board's Regulatory Authority


BNSF also challenges the moratorium under 5 U.S.C.  s 706(2) as an
unauthorized, as well as an arbitrary and  capricious, exercise of the
Board's decisionmaking authority.  It faults the Board for failing to
indicate in its Notice of  Public Hearing and Request for Comments
either that it was  considering the moratorium or that the hearing and
comment  period described in the Notice was actually part of a "rule-
making" proceeding. In addition, it argues that insofar as  the
moratorium is designed to maintain the "competitive  balance" within
the industry while the Board re-examines its  standards for
determining the public interest, it is an imper- missible attempt by
the Board to restrain competition. Fi- nally, BNSF asserts that,
assuming there is a need for  revised merger standards, the Board
acted arbitrarily and  capriciously in imposing the moratorium without
first consid- ering: (1) its past experience in processing an
application  while simultaneously pursuing a related rulemaking; (2)
the  "flexible nature" of its rules regarding the determination of 
the public interest; and (3) the need for a 15-month as  opposed to a


In response, the Board characterizes the moratorium as a  "procedural
rule" for which it was not required to give notice  and an opportunity
to comment, see Neighborhood TV, 742  F.2d at 638, and argues that
even if it is a substantive rule,  the Board has authority under s
721(b)(4) to issue it as an  "appropriate order" without regard to the
APA. The Board 


further defends the moratorium on its merits as a reasonable  exercise
of the agency's authority to consider, and to devise  standards to
protect, the public interest--not, as BNSF has  argued, the interests
of particular competitors--in regulating  mergers.


Finally, invoking its "broad discretion" to decide how best  to resolve
the complex issues that come before it in merger  cases, the Board
explains that without a new set of standards  already in place it
would have no way to determine whether  an application is complete, or
to ensure that a record com- piled under the existing standards
contains the information  that will prove necessary under the new
standards. Similar- ly, if the Board proceeded with the application
before devising  new standards, other participants in the merger
proceeding  would have to respond to the BNSF/CN proposal without 
knowing the criteria under which the application ultimately  would be


Having already concluded that imposing the moratorium  was within the
bounds of the Board's statutory authority, for  the same reasons we
also hold that the decision to impose the  moratorium was neither
arbitrary and capricious nor other- wise improper. The Board provided
ample opportunity for  public comment in its proceeding, as well as
ample justifica- tion for its decision. Given the Board's "special
cognizance"  over the railroad industry, National Motor Freight
Traffic  Ass'n v. ICC, 590 F.2d 1180, 1185 (D.C. Cir. 1978), we will 
defer to its "informed judgment," id., regarding the need for  the
moratorium in order to develop new standards for deter- mining the
public interest in merger application proceedings.


III. Conclusion


For the reasons stated above, the petition for review is


Denied.


Sentelle, Circuit Judge, dissenting: Congress has dele- gated to the
Surface Transportation Board the authority to  "approve and authorize"
railroad mergers in 49 U.S.C.  s 11324. In the controversy before us,
two major railway  corporations, Burlington Northern and Santa Fe
Railway  Company, and Canadian National Railway Company, notified  the
Board on December 20, 1999, of their intention to file a  merger
application in three to six months pursuant to a  notification
requirement imposed by the Board in 49 C.F.R.  s 1180.4(b). Rather
than proceeding to receive the applica- tion and process it, the Board
issued a Notice of Public  Hearing and Request for Comments on the
future of the  railroad industry, specifically on the role of major
railroad  consolidations, following which it imposed a moratorium on 
the filing of merger applications. The Board contends, and  the court
holds, that the moratorium is within the discretion  of the Board
under the applicable statutes analyzed in the  framework of Chevron
U.S.A. Inc. v. Natural Resources  Defense Council, 467 U.S. 837


First, I seriously question whether Chevron provides the  appropriate
framework for analysis. Under that familiar  rubric, as the Court
reminds us, we are to proceed in a two- step analysis, asking in step
one whether Congress "has  directly spoken to the precise question at
issue," id. at 842;  and in step two, whether the agency's
interpretation is "based  on a permissible construction of the
statute," id. at 843, in  which case we are to defer to it. While we
have repeatedly  applied Chevron in the context of various forms of
agency  interpretation, the Supreme Court has more recently cau-
tioned that its application should not be automatic where "an 
interpretation" is "not one arrived at after, for example, a  formal
adjudication or notice-and-comment rulemaking."  Christensen v. Harris
County, 120 S. Ct. 1655, 1662 (2000).  Although the Board undertook a
notice and comment pro- ceeding in the present case, the moratorium
imposed by the  Board does not purport to be the product of that
process, but  only a hesitation while the Board conducts further
notice and  comment proceedings. I therefore question the
applicability  of Chevron. However, I do not contend that we must
decide  that Chevron is inapplicable, because in my view, even if it


At Chevron step one, I will concede that the statute is not  free of
ambiguity. To that extent, I accept the majority's  statement on its
face that "[t]he statute does not address the  unanticipated conflict
this case presents between the process  by which the Board is to
review a proposed merger and the  purposes for which the Board is to
conduct its review." Maj.  Op. at 8. In this case that is another way
of saying, "the  statute is silent as to the Board's authority to
impose a  moratorium, and we therefore examine the relevant statutory 
provisions under step two of Chevron." However, in accept- ing that
proposition, I do note that as a general matter, the  absence of a
statutory grant of power is not an ambiguity or  silence on the
question of whether Congress has granted such  a power. See, e.g.,
Adams Fruit Co. v. Barrett, 494 U.S. 638,  649 (1990); Backcountry
Against Dumps v. EPA, 100 F.3d  147, 150-51 (D.C. Cir. 1996); Ethyl
Corp. v. EPA, 51 F.3d  1053, 1060 (D.C. Cir. 1995). As we have noted
repeatedly in  the past, "to suggest ... that Chevron step two is
implicated  any time a statute does not expressly negate the existence
of  a claimed administrative power (i.e. when the statute is not 
written in 'thou shalt not' terms), is both flatly unfaithful to  the
principles of administrative law ... and refuted by prece- dent."
Railway Labor Executives' Ass'n v. National Media- tion Bd., 29 F.3d
655, 670-71 (D.C. Cir. 1994) (en banc); see  also Backcountry Against
Dumps, 100 F.3d at 151; Ethyl  Corp., 51 F.3d at 1060; Oil, Chem. and
Atomic Workers Int'l  Union v. NLRB, 46 F.3d 82, 90 (D.C. Cir. 1995);
American  Petroleum Inst. v. EPA, 52 F.3d 1113, 1120 (D.C. Cir. 1995).
 "[W]ere courts to presume a delegation of power absent an  express
withholding of such power, agencies would enjoy  virtually limitless
hegemony, a result plainly out of keeping  with Chevron and quite
likely with the Constitution as well."  Backcountry Against Dumps, 100
F.3d at 151 (internal quo- tation marks omitted). Therefore, I am
concerned that we  not be too facile in accepting the proposition that
Congress  has left an ambiguity as to a power grant simply by not 
mentioning it. Again, however, I will accept the majority's  assertion
of ambiguity, because I think even accepting it does  not compel the


two of Chevron and examine whether the interpretation is a 
permissible, i.e. reasonable, one, I would hold that it is not.


As I understand the rationale of Chevron, it is that Con- gress by
entrusting an ambiguous statutory provision to the  elucidating
authority of an agency implicitly delegates to the  agency the power
to enter authoritative constructions for the  purpose of accomplishing
the goals of the "statutory scheme  it is entrusted to administer."
Chevron, 467 U.S. at 844; see  also Adams Fruit, 494 U.S. at 649 ("A
precondition to  deference under Chevron is a congressional delegation
of  administrative authority."). In determining whether an inter-
pretation subjected to Chevron step two analysis is a reason- able
exercise of the implicit grant created by the ambiguity,  we are to
"examin[e] a particular statutory provision" in  " 'context and with a
view to [its] place in the overall statuto- ry scheme.' " Food and
Drug Admin. v. Brown and Wil- liamson Tobacco Corp., 120 S. Ct. 1291,
1300-01 (2000)  (quoting Davis v. Michigan Dep't of Treasury, 489 U.S.


The statutory scheme under which the Surface Transporta- tion Board
operates is not limited to directing the Board to  review mergers with
the mandate to consider the public  interest, and authorizing the
Board to promulgate regulations  to accomplish that command. As the
majority lays out,  Congress also mandated that the Board is to
receive filings of  merger applications, reject them if incomplete, or
give notice  of their filing if complete, within thirty days. See 49
U.S.C.  s 11325(a) (Supp. III 1997). The Board then undertakes an 
evidentiary proceeding, which it must conclude within one  year of the
publication of the notice. See id. s 11325(b)(3).  Lastly, the Board
must issue a final decision within ninety  days of the conclusion of
that proceeding. Id. In other  words, Congress included very specific
statutory directives  concerning the process and time frame for the
Board to  accomplish its adjudicatory task. The fact that Congress, in
 enacting these provisions, shortened the statutory review  period
from 31 to 16 months further supports the conclusion  that Congress
intended the merger review process to be 


completed expeditiously within the statutory deadlines. Com- pare ICC
Termination Act of 1995, Pub. L. No. 104-88,  s 102(a), 109 Stat. 803,
841-42 (codified at 49 U.S.C. s 11325),  with Railroad Revitalization
and Regulatory Reform Act of  1976, Pub. L. No. 94-210, s 402, 90
Stat. 31, 62-63.


In the interpretation before us, rather than determining  the
application of a theretofore ambiguous provision in such a  fashion as
to carry out the apparent will of Congress, the  Board appears to me
to have taken the license granted it  under Chevron as an invitation
to distort the language of  Congress in such a way as to defeat the
unambiguous will of  that body. Granted, Congress places deadlines
only upon the  processing of applications once filed. See 49 U.S.C.  s
11325(a), (b). However, Congress also provides for the  refusal only
of incomplete applications. See id. s 11325(a).  It seems to me
unreasonable to believe that Congress could  have intended to expedite
all completed applications by dead- lines on handling of such filed
applications only to leave the  agency with the unbridled discretion
to thwart the congres- sional mandate of expedition by the exercise of
a power  nowhere expressly granted--to refuse filing in the first in-


Despite the clarity and specificity with which Congress  articulated
its wish that the merger review process be com- pleted expeditiously
within a given series of deadlines, the  majority nevertheless
concludes that, in combination, two  separate lines of judicial
precedent permit the Board to  disregard an express congressional
mandate. In one series of  cases, the Supreme Court and we have
recognized agency  discretion to delay considering applications where
no manda- tory statutory deadline scheme such as the one at issue here
 existed. See, e.g., Permian Basin Area Rate Cases, 390 U.S.  747,
777-81 (1968) (involving only an optional five-month  suspension of
proposed rates, plus the authority to reverse  rates retroactively
should the agency's investigation exceed  five months); Westinghouse
Elec. Corp. v. NRC, 598 F.2d  759, 771-76 (3d Cir. 1979) (noting that
the statute in question  was "free of close prescription ... as to how
[the agency]  shall proceed in achieving the statutory objectives")


Siegel v. Atomic Energy Comm'n, 400 F.2d 778, 783 (D.C.  Cir. 1968));
Krueger v. Morton, 539 F.2d 235, 239-40 (D.C.  Cir. 1976) (containing
no mention of statutory or regulatory  deadlines of any sort);
Pennsylvania v. Lynn, 501 F.2d 848,  854-61 (D.C. Cir. 1974)
(mentioning no statutory deadline  which might contradict the
suspension in question, and recog- nizing instead evidence of
congressional acceptance of the  moratorium's legality). Notably,
moreover, a number of the  cases cited by both the Board and the
majority as supporting  the application of the same proposition here
do not involve  challenges to the authority of the agencies in
question to  freeze applications, but instead ask only whether the
agencies  followed proper procedure or acted arbitrarily and
capricious- ly. See Neighborhood TV Co. v. FCC, 742 F.2d 629, 634-40 
(D.C Cir 1984) (raising no statutory authority issue at all, but 
rather focusing upon whether the agency's decision to freeze 
applications violated Administrative Procedure Act require- ments);
Kessler v. FCC, 326 F.2d 673, 679-85 (D.C. Cir. 1963)  (mentioning no
statutory or regulatory deadlines, and consid- ering only whether the
agency followed proper procedure or  was arbitrary and capricious in


Although it acknowledges that these various cases did not  involve
specific timelines for processing applications, see Maj.  Op. at 11,
the majority nevertheless points to another group  of cases stemming
from Telecommunications Research and  Action Center v. FCC, 750 F.2d
70 (D.C. Cir. 1984) (TRAC),  in which we have weighed six factors to
determine whether to  take the extraordinary step of granting mandamus
relief  where agencies have failed to satisfy specific statutory dead-
lines. Granted, as the majority observes, in such cases, we  have
previously declined to use our equitable powers to  micromanage an
agency's efforts to balance its priorities,  even in the face of a
clear statutory timetable. See, e.g., In re  Barr Lab., Inc., 930 F.2d
72, 76 (D.C. Cir. 1991) (viewing the  agency delay in question as a
consequence of the agency's  allocation of its budgetary resources).
TRAC and Barr Labo- ratories did not involve an agency's express
interpretation of  its governing statute, however. Unlike those cases,


present one does not merely involve an agency that has  simply failed
to act within the statutory time frame. Rather,  the Board has issued
an order affirmatively asserting that  particular statutory provisions
implicitly delegate to it the  authority to disregard the express
commands of other statu- tory provisions as it sees fit. It is that
pronouncement, and  not merely the arguably inequitable consequences
of the  Board's delay, that we are called upon to consider here. In 
sum, none of the cited precedents dictates the outcome  reached by the
court today.


I also find unconvincing the argument of the agency that it  could not
accept the application because it did not have in  place proper rules
under which to process the same. For the  most part, the Board has had
the same rules since 1982.  Granted, it has expressed its intent to
modify those rules.  Whenever that modification is completed, some
application  will have been the last processed under the old rules,
some  other the first under the new. I see nothing other than 
arbitrariness and caprice to justify requiring the present 
application to fill the role of the latter rather than the former.  I