Opinion
No. 00-CV-0179-DRH.
February 7, 2001.
MEMORANDUM AND ORDER
Before the court today is Plaintiff Madison County Mass. Transit Company's "Motion for Stay Pending Submission to Surface Transportation Board or Referral pursuant to 28 U.S.C. § 1336(b) for compliance with Doctrine of Primary Jurisdiction" (Doc. 34). For the reasons set forth below, the Court DENIES Plaintiff's motion.
PROCEDURAL BACKGROUND
Plaintiff Madison County Transit filed suit in this court against Defendants William Hanfelder and Mary L. Hanfelder seeking a declaratory judgment confirming its right to a railroad easement on Defendant's property (Doc. 1). Plaintiff later filed an Amended Complaint against William Hanfelder, individually and as Executor of the Estate of Mary L. Hanfelder (Doc. 9). Defendants moved to dismiss the action for lack of subject matter jurisdiction (Doc. 2). This Court denied that motion (Doc. 17). Plaintiff then moved for summary judgment (Doc. 21). This Court denied that motion as well. (Doc. 30).
The Court set forth the history of this litigation and an analysis of the governing statutes in its memorandum and order denying Defendant's motion to dismiss (Doc. 17), and in its memorandum and order denying Plaintiff's motion for summary judgment (Doc. 33).
In denying Plaintiff's motion for summary judgment, this Court identified three issues of material fact that precluded judgment as a matter of law. "[T]he Court concludes that genuine fact issues remain regarding (a) the contract between Madison Transit and N W concerning the Property, (b) the issuance of ICC/STB Decisions approving any agreement reached for interim trail use of the Property, and (c) the Hanfelders' receipt of notice regarding Madison Transit's attempt to convert the Property to interim trail use." (Doc. 30, p. 7).
Plaintiff then filed the present motion seeking a stay or referral (Doc. 34). Plaintiff argues that the issues of material fact identified by this Court actually constitute one overall issue, that being whether the railroad easement was legally railbanked or abandoned. This issue, claims Plaintiff, should be resolved only by the Surface Transportation Board, under the doctrine of "Primary Jurisdiction." Plaintiff's Motion (Doc. 34, pp. 3-5).
Plaintiff contends that Defendant's real defense to its claim is to argue that the railroad line at issue was never properly railbanked, and therefore abandoned. Id. This argument, says Plaintiff, is an administrative matter, within the expertise of the Surface Transportation Board ("STB").
"All three issues identified by this Court as matters for trial are aspects of defendant Hanfelder's argument in support of his position that the line is not railbanked. Indeed, all three matters relate directly to the question whether the rail line at issue in this proceeding is now abandoned and thus outside the jurisdiction of the STB, because the effort to railbank the line was somehow deficient under STB practices or regulations."
Id. at 3. This issue, Plaintiffs urge, must be referred to the STB under the doctrine of "primary jurisdiction." The doctrine, says Plaintiff, mandates the Court to stay this proceeding so that the STB can resolve it, or refer it to the STB directly, since questions of abandonments and railbanking are within the "special competence" of the Board. Id. at 2-4. Plaintiff states that the STB has exclusive power to regulate freight railroad abandonments, Id. at 2, and asserts that "[w]hether the line continues to be subject to STB's jurisdiction as properly railbanked, or whether the line has passed outside STB's jurisdiction due to consummation of an abandonment authorization is the epitome of a question within the special competence of that agency." Id. at 4.
Plaintiff does not assert that any regulatory practice or procedure is unreasonable. Plaintiff argues instead that the STB is in the best position to determine whether it complied with the STB's regulations and orders. "If there has been a deficiency in compliance with 16 U.S.C. § 1247(d) (the railbanking statute) and any relevant ICC/STB regulations or orders, the proper remedy may simply be further agency proceedings to correct the deficiency . . . . STB, as the administrative agency, is the proper entity to correct any deficiency, if there is a deficiency, in regulatory compliance." Id. at 7.
ANALYSIS
Where a claim is originally cognizable in a district court, but where enforcement of that claim requires resolution of issues that have been placed within the special competence of an administrative body within a regulatory scheme, the judicial process is suspended pending the referral of those issues to the administrative body. United States v. Western Pacific Railroad Co., 352 U.S. 59, 63-64 (1956). This rule is the doctrine of primary jurisdiction. Id. Like the doctrine of exhaustion of administrative remedies, primary jurisdiction "is concerned with promoting proper relationships between the courts and administrative agencies charged with particular regulatory duties." Id.
"No fixed formula exists for applying the doctrine of primary jurisdiction. In every case the question is whether the reasons for the existence of the doctrine are present and whether the purposes it serves will be aided by its application in the particular litigation." Id. In Western Pacific, the Supreme Court set forth two factors that are commonly used: (1) whether administrative agency determination would foster uniform interpretation of the relevant law; and (2) whether the issue requires the specialized knowledge and technical expertise of the administrative agency. Id. More recent Seventh Circuit cases tend to emphasize the second of these two factors. See, e.g., Baltimore Ohio Chicago Terminal Railroad Co. v. Wisconsin Central Ltd., 154 F.3d 404, 411 (7th Cir. 1998) (Posner, J.); Gross Common Carrier, Inc. v. Baxter Healthcare Corp., 51 F.3d 703, 706, fn. 3 (7th Cir. 1995).
Primary jurisdiction requires a "fact-specific inquiry peculiar to the circumstances of each case." Id. at 705. A court must consider in each case whether administrative referral will serve the purposes for which the doctrine was created. Ryan v. Chemlawn Corp., 935 F.2d 129, 131 (7th Cir. 1990). Where the issue is whether a particular agency practice is reasonable, primary jurisdiction applies. "The judgment as to what constitutes reasonableness belongs exclusively to the Commission." Chicago and North Western Transportation Co. v. Kalo Brick Tile Co., 450 U.S. 311, 325 (1981). Accordingly, an issue involving the reasonableness of a tariff is subject to administrative referral. Reiter v. Cooper, 507 U.S. 258, 269 (1993); Baltimore Ohio, 154 F.3d at 410-11; see also McCarty Farms v. Surface Transportation Board, 158 F.3d 1294, 1296 (D.C. Cir. 1998).
However, where the issue presented is purely legal, primary jurisdiction does not apply, notwithstanding the extent of the regulatory scheme or the expertise of the administrative agency. Nader v. Allegheny Airlines, 426 U.S. 290 (1976). In Nader, the Supreme Court held that primary jurisdiction did not require that a civil suit involving complicated airline regulations be referred to the Civil Aeronautics Board.
"The action brought by the Petitioner does not turn on a determination of the reasonableness of a challenged practice, a determination the could be facilitated by an informed evaluation of the economics or technology of the regulated industry. The standards to be applied . . . are within the conventional competence of the courts, and the judgment of a technically expert body is not likely to be helpful in the application of these standard to the facts of this case."
Id. at 305-06.
Similarly, the Seventh Circuit held that primary jurisdiction applies where the issue involves the reasonableness of an administrative practice, but not where the issue is the interpretation of such a practice. That question, said the Court, is one that courts can resolve.
"The central issue that the doctrine [of primary jurisdiction] confides to the agency is the reasonableness of the terms in the tariff. . . The doctrine of primary jurisdiction is also sometimes invoked with regard to issues of tariff interpretation involving highly technical matters central to the agency's mission and expertise. An issue of tariff interpretation that does not involve such matters may . . . be decided by the court without reference to the agency."
Baltimore Ohio, 154 F.3d at 410-11 (citations omitted). Similarly, the Seventh Circuit reversed a district court's referral of a case to an administrative agency under the doctrine of primary jurisdiction where the issue was compliance with an administrative standard, rather than whether that standard was reasonable. United States v. Elrod, 627 F.2d 813, 818 (7th Cir. 1980). "The doctrine is not applicable where the issue, regardless of its complexity, is not the reasonableness of the rate or rule, but a violation of such rate or rule." Id. (citation omitted) (quotation omitted).
Moreover, some courts have suggested that primary jurisdiction does not require referral where the court already has clear guidance from the agency on the issue, and where referral would cause only further delay. Consolidated Rail Corp. v. Certainteed Corp., 835 F.2d 474, 477-78 (3rd Cir. 1987). The Seventh Circuit stressed that one of the primary purposes of the doctrine is to foster judicial economy, and reversed a district court's referral of a case to an administrative agency where if found, inter alia, that judicial economy would have been better served by letting the case go forward in the district court, rather than the administrative agency. Ryan, 935 F.2d at 131-32.
APPLICATION TO THIS CASE
The Court finds that the doctrine of primary jurisdiction does not require referral of this case to the STB, and therefore DENIES Plaintiff's motion.
First, the Court notes that Plaintiff is not challenging the reasonableness of an agency action or practice, but whether such an act or practice has been complied with. Plaintiff explicitly argued that point in its motion. "If there has been a deficiency in compliance with 16 U.S.C. § 1247(d) (the railbanking statute) and any relevant ICC/STB regulations or orders, the proper remedy may simply be further agency proceedings to correct the deficiency . . . . STB, as the administrative agency, is the proper entity to correct any deficiency, if there is a deficiency, in regulatory compliance." (Doc. 34, p. 7). Primary jurisdiction does not require referral when the issue is compliance with an administrative practice or rule, not its reasonableness. Nader, 426 U.S. at 305-06; Baltimore Ohio, 154 F.3d at 410-11; Elrod, 627 F.2d at 818.
Moreover, the Court finds that this case does not require the STB's expertise. In denying Plaintiff's summary judgment motion, the Court held that "genuine fact issues remain regarding (a) the contract between Madison Transit and N W concerning the Property, (b) the issuance of ICC/STB Decisions approving any agreement reached for interim trail use of the Property, and (c) the Hanfelders' receipt of notice regarding Madison Transit's attempt to convert the Property to interim trail use." (Doc. 30, p. 7). The first two issues involve contract formation and construction. Such issues are within the competence of this Court, not the STB. The third issue, whether the Defendants received proper notice, is also well within the competence of this Court to decide. Because the outstanding issues identified by this Court do not require the special competence and expertise of the STB, there is no need to refer this case.
Finally, this case has a presumptive trial month of April, 2001 (Doc. 4). If this Court should grant Plaintiff's motion, there is no way of knowing how long it would take the STB to resolve any outstanding issues. It seems highly unlikely to the Court that the STB could resolve this case before the presumptive trial month has come and gone. This Court finds that referral will not foster judicial economy, but instead is far more likely to result in unnecessary delay. See Ryan, 935 F.2d at 132; Consolidated Rail, 835 F.2d at 478.
CONCLUSION
For the reasons set forth above, the Court DENIES Plaintiff's "Motion for Stay Pending Submission to Surface Transportation Board or Referral pursuant to 28 U.S.C. § 1336(b) for compliance with Doctrine of Primary Jurisdiction" (Doc. 34).
IT IS SO ORDERED.