OCTOBER TERM, 1991
Syllabus
NATIONAL RAILROAD PASSENGER CORPORATION ET AL.
v. BOSTON
& MAINE CORP. ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE
DISTRICT OF COLUMBIA CIRCUIT
No. 90-1419. Argued January 13, 1992-Decided March 25, 1992*
The Rail Passenger Service Act of 1970 (RPSA) created petitioner
N ational Railroad Passenger Corporation (Amtrak), a private
corporation, to provide intercity and commuter rail passenger
service. The Act permits Amtrak to enter into "trackage rights"
agreements to use tracks owned and used by freight railroads, 45 U.
S. C. § 562(a), and allows Amtrak to ask petitioner Interstate
Commerce Commission (ICC) to condemn railroad property "required
for intercity rail passenger service" if Amtrak and the railroad
cannot agree upon sale terms, § 562(d). For purposes of the I CC's
condemnation order, Amtrak's "need for the property" "shall be
deemed to be established" unless the conveyance will significantly
impair the railroad's ability to carry out its obligations as a
common carrier and unless Amtrak's obligations can adequately be
met by the acquisition of alternative property.
Ibid. Amtrak
had a "trackage rights" agreement with respondent Boston and Maine
Corporation (B&M) to operate its "Montrealer" train between
Washington, D.
C., and Montreal. Amtrak claims it was forced
to discontinue this service because of B&M's poor maintenance
of its track segment. Subsequently, Amtrak entered into an
agreement with petitioner Central Vermont Railroad (CV) which
provided that, among other things, Amtrak would acquire the B&M
track and reconvey it to CV, and CV would grant trackage rights to
Amtrak and usage rights to B&M. When B&M did not accept
Amtrak's purchase offer for the track, Amtrak sought, and received,
an ICC order compelling conveyance for just compensation. The ICC
found, among other things, that § 562(d) created a statutory
presumption of Amtrak's need for the track, which B&M failed to
rebut. The Court of Appeals remanded the case for further
proceedings, concluding that, because Amtrak did not intend to
retain the track, it needed only its use, not its ownership. While
petitions for rehearing were pending, § 562(d) was amended to allow
Amtrak to subsequently convey title to acquired property to a third
party if the ICC finds the reconveyance furthers the RPSA's
purposes. Nonetheless, the court
*Together with No. 90-1769, Interstate Commerce Commission et
al. v.
Boston &
Maine Corp. et al., also on
certiorari to the same court.
408
408 NATIONAL RAILROAD PASSENGER CORPORATION
v.
BOSTON & MAINE CORP.
Syllabus
denied rehearing, holding that the condemnation was not valid
because the property was not "required for intercity rail passenger
service."
Held:
1. The ICC's decision was based on a reasonable interpretation
and application of § 562(d). Pp. 417-424.
(a) The ICC's interpretation of the word "required" is due
deference as a reasonable interpretation of an ambiguous term in a
statute that the ICC administers. See,
e. g., Chevron U. S.
A. Inc. v.
Natural Resources Defense Council, Inc.,
467 U. S. 837.
The existence of alternative dictionary definitions for "required"
indicates that the statute is open to interpretation. The ICC's
interpretation gives effect to § 562(d)'s presumption of need. In
contrast, the Court of Appeals' view-that "required" establishes a
separate condition that Amtrak's condemnation authority is limited
to property that is indispensable to its operations-is in clear
tension with the presumption. In addition, § 562(d)'s amendment
confirms the ICC's definition, while the Court of Appeals' strict
rule would make the amendment superfluous by barring condemnation
whenever Amtrak's purpose is to reconvey property. Pp. 417-420.
(b) The ICC was not required to make specific findings regarding
Amtrak's actual need for the condemnation because its oversight
responsibility is limited to ensuring that condemned property will
be used in Amtrak's rail operations. The statute's structure and
its presumption of need create a strong inference that it
authorizes Amtrak to make a reasonable business judgment that
condemnation is advisable, unless the statutory presumption is
rebutted. Pp. 420-421.
(c) B&M's several arguments against the ICC's interpretation
are rejected. The eminent domain power has been given to the ICC,
not a private entity, and thus is not limited as suggested by cases
such as
United States v.
Carmack, 329 U. S. 230, 243, n.
13. Furthermore, these cases turn on the need for deference to the
ICC, not to Amtrak. The ICC's interpretation of § 562(d) also did
not violate the "public use" requirement of the Fifth Amendment's
Takings Clause, since the ICC's determination that the condemnation
will serve a public purpose by facilitating Amtrak's rail service
was not irrational. See,
e. g., Hawaii Housing Authority v.
Midkiff, 467
U. S. 229, 240-241. Moreover, the ICC did not err in concluding
that the statutory prerequisite that the parties were "unable to
agree upon terms for the sale" mandated nothing more than a factual
determination that they would be unable to reach agreement through
further negotiations. Nor did it make inadequate factual findings
in concluding that B&M had not rebutted the presumption of
need. The ICC was not unreasonable in consid-
409
ering the effect of trackage rights and the just compensation
award in assessing whether the conveyance would significantly
impair B&M's ability to carry out its obligations, or in
interpreting the availabilityof-alternative-property provision as
referring only to whether Amtrak could provide service using an
alternative route, not whether a lesser interest in property would
suffice to meet Amtrak's needs. Pp.421-424.
2. The parties' challenges to the ICC's just compensation
finding as well as certain other issues should be resolved on
remand. P. 424.
286 U. S. App. D. C. 1,
911 F.2d
743, reversed and remanded.
KENNEDY, J., delivered the opinion of the Court, in which
REHNQUIST, C. J., and STEVENS, O'CONNOR, SCALIA, and SOUTER, JJ.,
joined. WHITE, J., filed a dissenting opinion, in which BLACKMUN
and THOMAS, JJ., joined,
post, p. 424.
Acting Solicitor General Roberts argued the cause for
petitioners in both cases. With him on the briefs for petitioners
in No. 90-1769 were Deputy Solicitor General Wallace, Michael R.
Dreeben, Robert S. Burk, Henri F. Rush, and Charles A. Stark.
Robert P. vom Eigen, Charles 1. Appler, Theodore A. Howard, Richard
F. Riley, Jr., Louis R. Cohen, Stephen C. Rogers, and Frederick C.
Ohly filed briefs for petitioners in No. 90-1419.
Irwin Goldbloom argued the cause for respondents in both
cases and filed a brief for respondent Boston & Maine
Corporation.
Jeffrey L. Amestoy, Attorney General of
Vermont,
John K. Dunleavy, Assistant Attorney General,
Rex E. Lee, G.
Paul Moates, Ronald S.
Flagg,
Robert J. Baum, and
Michael F. McBride
filed a brief for respondents State of Vermont et al.t
JUSTICE KENNEDY delivered the opinion of the Court. The
Interstate Commerce Commission (ICC or Commission) issued an order,
upon the request of petitioner National
tLaurence Z. Shiekman, Paul A. Cunningham, Robert M. Jenkins
III, and Bruce B. Wilson filed a brief for Concerned Railroads as
amicus curiae urging affirmance.
410
410 NATIONAL RAILROAD PASSENGER CORPORATION
v.
BOSTON & MAINE CORP.
Railroad Passenger Corporation, requiring conveyance of 48.8
miles of railroad track from respondent Boston and Maine
Corporation (B&M) to the Corporation. In these consolidated
cases we must decide whether the ICC's decision was based on a
reasonable interpretation and application of § 402(d) of the Rail
Passenger Service Act, 45 U. S. C. § 562(d), the statute the
Corporation invoked in the proceeding. We hold the ICC's decision
is authorized by the statute, and so reverse the judgment of the
Court of Appeals for the District of Columbia Circuit, which set
aside the Commission's action.
I
The National Railroad Passenger Corporation, or Amtrak, is a
private, for-profit corporation created by Congress in the Rail
Passenger Service Act of 1970 (RPSA), Pub. L. 91-518, 84 Stat.
1328, 45 U. S. C. § 501
et seq. The purpose of Amtrak is to
provide modern and efficient intercity and commuter rail passenger
service. §§ 501, 541. Amtrak is not an agency or instrumentality of
the United States Government, § 541, but it has been supported over
the years by congressional appropriations. Most of Amtrak's
passenger trains run over existing track systems owned and used by
freight railroads. In the RPSA Congress authorized Amtrak to enter
into "trackage rights" agreements which would allow Amtrak to use
those tracks. When Amtrak and a freight railroad are unable to
agree on the terms of such an agreement, Amtrak may request the ICC
to order the track to be provided on reasonable terms. §
562(a).
In 1973 Congress amended the RPSA to add subsection (d) of §
402, 45 U. S. C. § 562(d). Section 562(d) provides in pertinent
part:
"(1) If the Corporation [Amtrak] and a railroad are unable to
agree upon terms for the sale to the Corporation of property
(including interests in property) owned by the railroad and
required for intercity rail passenger
411
service, the Corporation may apply to the Commission [ICC] for
an order establishing the need of the Corporation for the property
at issue and requiring the conveyance thereof from the railroad to
the Corporation on reasonable terms and conditions, including just
compensation. Unless the Commission finds that-
"(A) conveyance of the property to the Corporation would
significantly impair the ability of the railroad to carry out its
obligations as a common carrier; and
"(B) the obligations of the Corporation to provide modern,
efficient, and economical rail passenger service can adequately be
met by the acquisition of alternative property (including interests
in property) which is available for sale on reasonable terms to the
Corporation, or available to the Corporation by the exercise of its
authority under section 545(d) of this title,
"the need of the Corporation for the property shall be deemed to
be established and the Commission shall order the conveyance of the
property to the Corporation on such reasonable terms and conditions
as it may prescribe, including just compensation."
Amtrak may condemn nonrail property under a somewhat similar
provision, § 545(d), a statute not at issue here.
The Amtrak train the "Montrealer" began offering passenger
service between Washington, D. C., and Montreal in 1972. In parts
of Massachusetts, Vermont, and New Hampshire the train used the
tracks of the Connecticut River Line (Conn River Line), portions of
which are owned by B&M and other portions by the Central
Vermont Railroad (CV). B&M and CV have operated freight trains
on the Conn River Line under reciprocal "trackage rights"
agreements dating back to 1930.
In 1977 Amtrak entered into a "trackage rights" agreement with
B&M under which B&M agreed to maintain its portions of the
Conn River Line. Those portions include a 48.8-mile
412
412 NATIONAL RAILROAD PASSENGER CORPORATION
v.
BOSTON & MAINE CORP.
segment of track on the Conn River Line between Brattleboro and
Windsor, Vermont. This is the segment of track at issue here. At
first the arrangement to maintain the track proceeded well, but in
the early 1980's problems developed. Guilford Transportation
Industries, Inc., purchased B&M out of bankruptcy, and
purchased also a railroad operating a parallel line. Amtrak's claim
is that neglect of track maintenance resulting from this purchase
caused delays in Montrealer service. Maintenance of the
Brattleboro-Windsor track was so poor that at points the train was
slowed to five miles an hour. Negotiations for better maintenance
were unsuccessful. In April 1987 Amtrak was forced to discontinue
its Montrealer service.
Congress responded to these events in July 1987 by appropriating
$5 million to upgrade the Montrealer route. Act of July 11, 1987,
Pub. L. 100-71, 101 Stat. 447-448. Amtrak decided not to spend the
money to upgrade the Conn River Line while B&M continued to own
it, because in Amtrak's view B&M could not be relied upon to
maintain the track once restored. Amtrak began negotiations with CV
and, in early 1988, reached a preliminary agreement. Amtrak
promised to use its statutory condemnation power to acquire the
48.8 miles of track in question, to at once reconvey the track to
CV, and to provide up to $3.1 million to upgrade and rehabilitate
the segment. In return, CV promised to provide the balance of the
funds necessary to upgrade the track, to maintain the track for 20
years in a condition meeting Amtrak's standards, to grant Amtrak
trackage rights for 20 years, and to grant B&M trackage rights
to serve its existing customers. As a prerequisite to invoking §
562(d), Amtrak made an offer to B&M to purchase the segment for
$1 million, on a take-it-or-Ieave-it basis. B&M offered to
negotiate the terms under which it would be willing to upgrade the
segment and stated: "[I]t appears clear that there is no need to
pursue the very complex 'offer to purchase' set forth in your
letter." App.60. B&M's refusal to accept the offer
413
seems to have been anticipated by Amtrak and CV; as indicated by
an internal CV Memorandum written in January 1988. App. 94.
Interpreting the B&M communication as a rejection of its
offer, Amtrak instituted this proceeding before the ICC to compel
conveyance of the track. CV filed a simultaneous request for an
exemption from ICC regulation for its acquisition of the segment
upon reconveyance from Amtrak.
B&M assessed the transaction as a significant shift in its
long competition with CV for freight traffic. CV already owned
large parts of the Conn River Line and after the proposed
transaction it would own most of it. Though B&M would have
trackage rights, CV would gain not only ownership of the segment,
but also the right to obtain new customers on its route. B&M
alleged this gave a new advantage to CV's corporate parent, the
Canadian National Railway Company, for each railroad links up with
competing companies in Canada. CV's lines link to Canadian
National, while B&M's lines link to the Canadian Pacific, Ltd.,
Canadian National's competitor. B&M challenged the transaction
as simply a device to shift ownership among railroads, not to give
ownership to Amtrak, which, B&M argued, was the sole purpose of
the condemnation provision.
B&M filed initial objections to the § 562(d) proceeding on
two grounds: that Amtrak had not shown that the parties were unable
to agree on reasonable terms of sale, and that § 562(d) did not
authorize condemnation of railroad lines. The ICC rejected
B&M's arguments and in a condemnation proceeding held that
Amtrak had shown the inability of the parties to agree to terms. It
ruled that § 562(d) covers railroad tracks because tracks are "rail
property 'required for intercity rail passenger service.'" App. to
Pet. for Cert. in No. 90-1419, pp. 130a-133a. B&M next sought
to convert the proceeding into a trackage rights proceeding under §
562(a), but the ICC again rejected B&M's position, holding that
Amtrak had an "election of remedies" under § 562 and
414
414 NATIONAL RAILROAD PASSENGER CORPORATION
v.
BOSTON & MAINE CORP.
so had no obligation to seek trackage rights under subsection
(a) before invoking subsection (d).
Id., at 115a-116a.
Meanwhile, CV and the States of Vermont and Massachusetts, as well
as numerous other parties, intervened in the ICC proceeding. (CV
appears as a petitioner before this Court, and Vermont and
Massachusetts support petitioners.)
This was the first decided case involving Amtrak's condemnation
powers under § 562(d).
Id., at 39a. The ICC issued its final
decision in 1988 and ordered conveyance of the segment with just
compensation of $2,373,286. It reaffirmed earlier rulings and found
that Amtrak "ha[d] met the statutory criteria for the institution
of a proceeding" under § 562(d).
Id., at 40a-42a, 81a.
The ICC concluded that the presumption of Amtrak's need for the
track contained in § 562(d)(1) was applicable. In its view both
statutory criteria must be met to rebut the presumption, and
B&M had established neither. As to alternative property
(subsection (B)), the ICC found that no reasonable alternative
route existed for the Montrealer service. And as to significant
impairment of B&M's ability to carry out its common carrier
obligations (subsection (A)), the ICC found that because B&M
had been awarded just compensation and could continue to serve its
customers under the "trackage rights" agreement which was part of
the transaction, its ability had not been impaired.
Id., at
45a-46a. The bulk of the ICC's final decision deals with the
question of just compensation, which is not before this Court. See
infra, at 424.
On petition for review, a divided panel of the Court of Appeals
for the District of Columbia Circuit granted the petition and
remanded the matter to the ICC for further proceedings. 286 U. S.
App. D. C. 1,
911 F.2d
743 (1990). The majority held that § 562(d) does not permit
Amtrak to condemn railroad property which it intends to reconvey to
another railroad. It acknowledged that the ICC had inter-
415
preted § 562 in a different way, and that in the usual course
judicial deference would be given to its interpretation under the
principles enunciated in
Chevron U. S.
A. Inc. v.
Natural Resources Defense Council, Inc., 467 U. S. 837 (1984); but
the court concluded that § 562(d) is unambiguous in light of its
language and history, and so no deference was due. The panel
majority reasoned that because Amtrak did not intend to retain the
track to be condemned, it needed only its use, not its ownership.
As Amtrak could obtain use of the property by obtaining either a
"trackage rights" agreement under § 562(a), or by condemning an
easement under § 562(d), the entire fee interest was not "'required
for intercity rail passenger service.'" 286 U. S. App. D. C., at 8,
911 F. 2d, at 750. The majority stated that its holding was
confirmed by other considerations, including: (1) the potential
constitutional problems, under the Takings Clause, raised by the
ICC's interpretation of § 562(d); (2) the structure of § 562, which
indicated an intent on the part of Congress to relegate Amtrak to
trackage rights under § 562(a) when seeking only the use of track;
and (3) Congress' policy against crosssubsidization between sectors
of the railroad industry, which the majority concluded would have
been violated by this transaction. Judge Ruth B. Ginsburg concurred
separately, rejecting the majority's interpretation of the statute,
but concluding that a remand to the ICC was necessary because the
ICC had not made adequate findings to determine whether Amtrak in
fact needed to shift ownership of the segment from B&M to CV to
protect its interests.
Id., at 11-13,911 F. 2d, at 753-755.
This factual question, whether Amtrak's portrayal of a recalcitrant
B&M is accurate, remains in dispute. Under our resolution of
the case, however, the issue need not be reached.
Amtrak and the ICC filed petitions for rehearing, and while the
petitions were pending Congress amended § 562(d). The amendment,
adopted in specific response to the Court of
416
416 NATIONAL RAILROAD PASSENGER CORPORATION
v.
BOSTON & MAINE CORP.
Appeals' decision in this case, added the following sentence to
§ 562(d)(1): "The Corporation may subsequently convey title or
other interest in such property to a third party, if such
reconveyance is found by the Commission to further the purposes of
this Act." Independent Safety Board Act Amendments of 1990 § 9(a),
Pub. L. 101-641, 104 Stat. 4658. The amendment was made applicable
to all pending cases, § 9(b), and B&M does not dispute that it
applied in this case even while it was before the Court of Appeals
on rehearing. Brief for Respondent B&M 33-35. The Court of
Appeals considered the 1990 amendment, but denied rehearing
nonetheless. 288 U. S. App. D. C. 196,
925 F.2d
427 (1991). The panel majority held that while § 9 made it
clear Amtrak was authorized to reconvey condemned property
"subsequent to a condemnation that is otherwise valid under
[§ 562(d)]," it did not change the statutory limitation that the
property be "'required for intercity rail passenger service'" in
the first place.
Id., at 197, 925 F. 2d, at 428 (emphasis in
original). The majority reasoned that since its original decision
was based on Amtrak's failure to satisfy that requirement, the
amendment did not affect its holding. The majority also
distinguished a case from the Second Circuit,
National Railroad
Passenger Corp. v.
Two Parcels of Land, 822 F.2d
1261, cert. denied, 484 U. S. 954 (1987), which had interpreted
§ 545(d)(1) (the provision authorizing Amtrak to condemn nonrail
property) to permit reconveyance following condemnation. 288 U. S.
App. D. C., at 196-197, 425 F. 2d, at 427428. In a separate
opinion, Judge Ginsburg wrote that the amendment confirmed her view
that the ICC had not misinterpreted the statute, but that a remand
remained necessary for further factual determinations.
Amtrak and CV, in No. 90-1419, and the ICC, in No. 901769, filed
separate petitions seeking review of the Court of Appeals'
decision. We granted certiorari and consolidated the cases. 502 U.
S. 807 (1991). We now reverse.
417
II
The primary question raised by these cases is a straightforward
matter of statutory interpretation: whether § 562(d), as amended,
authorizes the condemnation and transaction approved by the ICC but
set aside by the Court of Appeals. The Court of Appeals disallowed
the transaction based on its own interpretation of the language
"required for intercity rail passenger service" in § 562(d)(1). In
so holding it limited Amtrak's condemnation authority to property
that was necessary, in the sense of indispensable, to Amtrak's
operations. The ICC interpreted the relevant statutory language to
give Amtrak more latitude, and it is our task to determine whether
the Commission had authority for its statutory interpretation.
Judicial deference to reasonable interpretations by an agency of
a statute that it administers is a dominant, wellsettled principle
of federal law. We relied upon it in
Chevron U. S.
A.
Inc. v.
Natural Resources Defense Council, Inc.,
467 U. S. 837
(1984), and have reaffirmed it often. See,
e. g.,
K mart Corp. v.
Cartier, Inc., 486 U. S. 281, 292-293
(1988);
Pauley v.
BethEnergy Mines, Inc., 501 U. S. 680, 696-697
(1991). These decisions mandate that when a court is reviewing an
agency decision based on a statutory interpretation, "if the
statute is silent or ambiguous with respect to the specific issue,
the question for the court is whether the agency's answer is based
on a permissible construction of the statute."
Chevron U. S.
A., supra, at 843. If the agency interpretation is not in
conflict with the plain language of the statute, deference is due.
K mart Corp., 486 U. S., at 292. In ascertaining whether the
agency's interpretation is a permissible construction of the
language, a court must look to the structure and language of the
statute as a whole.
Id., at 291;
Sullivan v.
Everhart, 494
U. S. 83, 89 (1990). If the text is ambiguous and so open to
interpretation in some respects, a degree of deference is granted
to the agency, though
418
418 NATIONAL RAILROAD PASSENGER CORPORATION
v.
BOSTON & MAINE CORP.
a reviewing court need not accept an interpretation which is
unreasonable.
Under these principles the ICC's interpretation of § 562(d) was
permissible, and the Court of Appeals' decision was in error to
disregard it. While the ICC's opinion is not explicit in all of its
details, the Commission's decision is based on a reading of the
statute quite different from the Court of Appeals'. The ICC agreed
that property Amtrak seeks to condemn under § 562(d) must be
"required for intercity rail passenger service." It determined,
however, that the word "required" need not mean, as the Court of
Appeals' opinion suggests, indispensable or necessary. Instead, the
ICC gave effect to the statutory presumption of Amtrak's need for
the track, and in so doing implemented and interpreted the statute
in a manner that comports with its words and structure. The
analysis of the Court of Appeals is inconsistent with the
Commission's interpretation of the statutory presumption of need.
The ICC's position before the Court is that "required" can also
mean "useful or appropriate," Brief for Petitioners in No. 90-1769,
p. 17, and that the order under review adopted that meaning. We
agree that the manner in which the ICC has applied the statute in
this case has that interpretation as its basic premise. App. to
Pet. for Cert. in No. 90-1419, pp. 42a-46a.
In its brief the ICC cites a dictionary definition in support of
its view. Brief for Petitioners in No. 90-1769, p. 17, citing
Webster's Third New International Dictionary 1929 (1986). The
existence of alternative dictionary definitions of the word
"required," each making some sense under the statute, itself
indicates that the statute is open to interpretation. See
Sullivan v.
Everhart, supra. Few phrases in a complex
scheme of regulation are so clear as to be beyond the need for
interpretation when applied in a real context. Further, the
structure of the provision reinforces our conclusion that statutory
interpretation is appropriate and that the Court of Appeals'
interpretation is itself open to serious question.
419
The court defined the word "required" to establish a separate
condition that the property sought to be condemned be necessary
(indispensable) for Amtrak's operations, a view which is not
without support. See,
e. g., American Heritage
Dictionary of the English Language 1105 (2d ed. 1981). This
interpretation, though, leaves little substance to the statutory
presumption in favor of Amtrak's need and so is in clear tension
with that part of the statute.
We decide that § 562(d) is ambiguous in some respects and
conclude that the ICC's interpretation of the word "required" is a
reasonable one. We defer to its interpretation. This is not to say
that the issue is beyond dispute, but these alternative
interpretations are as old as the jurisprudence of this Court. In
McCulloch v.
Maryland, 4 Wheat. 316, 413 (1819),
Chief Justice Marshall, in a choice of interpretations with some
parallels to this one, read the word "necessary" to mean
"convenient, or useful," rejecting a stricter reading of the term
which would have limited congressional power under the Constitution
to the "most direct and simple" means available. We think that as a
matter of definition and interpretation in the context of this
statute it is plausible, if not preferable, to say that Amtrak can
find that an acquisition is required when it is a useful and
appropriate way to accomplish its goals.
The Commission's interpretation is consistent also with the 1990
statutory addition enacted by Congress. While the amendment does
not modify the specific language of § 562(d) at issue here, it
confirms the ICC's view. The interpretation given to § 562(d) by
the Court of Appeals and B&M, on the other hand, would make the
amendment superfluous, because if the word "required" has the
strict meaning they seek to attribute to it, condemnations by
Amtrak would seem to be barred whenever Amtrak's purpose is to
reconvey the property.
Contrary to the position of the dissent, we are not "deferring
to what we imagine an agency had in mind."
Post, at
420
420 NATIONAL RAILROAD PASSENGER CORPORATION
v.
BOSTON & MAINE CORP.
428. Rather, we defer to an interpretation which was a necessary
presupposition of the ICC's decision. We recognize the
well-established rule that an agency's action may not be upheld on
grounds other than those relied on by the agency.
SEC v.
Chenery Corp., 318 U. S. 80, 88 (1943).
But the fact that the ICC did not in so many words articulate its
interpretation of the word "required" does not mean that we may not
defer to that interpretation, since the only reasonable reading of
the Commission's opinion, and the only plausible explanation of the
issues that the Commission addressed after considering the factual
submissions by all of the parties, is that the ICC's decision was
based on the proffered interpretation.
Chenery does not
require a remand under those circumstances. It is noteworthy in
this regard that neither party contends the ICC's decision was not
informed and governed by this statutory interpretation. B&M's
primary argument to the Court is that the word required must mean
necessary. Brief for Respondent B&M 16, 22, 44. But this, as we
have said, is quite inconsistent with the statutory presumption of
need to which the ICC gave effect.
There is no dispute on this record that Amtrak intends to use
the condemned track for its Montrealer service. Under the ICC's
view that use is sufficient to satisfy the statutory command that
the rail property be "required for intercity rail passenger
service." This is a reasonable interpretation and application of
the RPSA. And it ends the judicial inquiry on this point.
What we have said also answers Judge Ginsburg's concern that the
ICC must make specific findings regarding Amtrak's actual need for
the condemnation. The contention that such a finding was necessary,
to implement the statutory criterion that the property be "required
for intercity rail passenger service," was the basis for Judge
Ginsburg's concurrence in the Court of Appeals. 286 U. S. App. D.
C., at 12, 911 F. 2d, at 754. That position, however, appears to be
based on the same interpretation of the word "required" as that
adopted
421
by the Court of Appeals' majority, and so is inconsistent with
the ICC's interpretation. The ICC contends that the factual finding
is not mandated. It argues that the structure of the statute,
combined with the presumption created by the statute of Amtrak's
need for the property sought, creates a strong inference that the
statute authorizes Amtrak to make a reasonable business judgment
that condemnation of the property is advisable. We agree. The ICC's
oversight responsibility, exercised by enforcing the "required for
intercity rail passenger service" language as interpreted by the
Commission, is limited to ensuring that the condemned property will
be used in Amtrak's rail operations. The further determination of
need is delegated to Amtrak, unless the statutory presumption is
rebutted; and it is not rebutted here. Indeed, as our discussion
above indicates,
supra, at 418-419, it seems to us that any
other interpretation may be inconsistent with the statutory
presumption of need. In all events, the ICC's interpretation is a
reasonable one, and we may not substitute a different view.
Arguing against the ICC's interpretation, B&M cites to us
cases such as
United States v.
Carmack, 329 U. S. 230, 243, n. 13
(1946), which suggest that delegations of eminent domain power to
private entities are of a limited nature. We do not believe that
argument has any relevance here because Amtrak does not exercise
eminent domain power under § 562(d). Rather, the statute gives that
power to the ICC, a Government agency. To be sure, the statute
creates a presumption in favor of conveyance to Amtrak. But the ICC
must assess the impact of any condemnation and make a determination
as to just compensation. Since § 562(d) is a proper exercise of
regulatory authority, and the ICC's oversight of Amtrak is intended
to ensure compliance with the statute, the eminent domain power
here is not private.
Furthermore, this case turns on the need for deference to the
ICC, not Amtrak. There is nothing in the cases B&M cites
contradicting the rule of judicial deference to an
422
422 NATIONAL RAILROAD PASSENGER CORPORATION
v.
BOSTON & MAINE CORP.
agency's statutory interpretation, even when the statute is one
authorizing condemnation of private property. In short, the
principle advanced by B&M does not prevail over
Chevron's rule of deference.
We also reject B&M's constitutional objections. B&M
claims that § 562(d) as interpreted by the Commission violates the
"public use" requirement of the Fifth Amendment's Takings Clause,
because the transaction leaves unchanged the use made by Amtrak of
the condemned track. B&M's position cannot be reconciled with
our precedents. We have held that the public use requirement of the
Takings Clause is coterminous with the regulatory power, and that
the Court will not strike down a condemnation on the basis that it
lacks a public use so long as the taking "is rationally related to
a conceivable public purpose."
Hawaii Housing Authority v.
Midkiff, 467
U. S. 229, 240-241 (1984); see also
Berman v.
Parker, 348 U.
S. 26, 32-34 (1954). In
Midkiff we upheld land reform
legislation which authorized condemnations for the specific purpose
of transferring ownership to another private party, in order to
eliminate a land oligopoly. In
Berman we permitted land
condemnations which contemplated reselling the land to
redevelopers, as part of a plan to restore dilapidated sections of
the District of Columbia. In both
Midkiff and
Berman,
as in the present case, condemnation resulted in the transfer of
ownership from one private party to another, with the basic use of
the property by the government remaining unchanged. The Court held
these exercises of the condemnation power to be constitutional, as
long as the condemning authorities were rational in their positions
that some public purpose was served. Those holdings control here,
for there can be no serious argument that the ICC was irrational in
determining that the condemnation will serve a public purpose by
facilitating Amtrak's rail service. That suffices to satisfy the
Constitution, and we need not make a specific factual determination
whether the con-
423
demnation will accomplish its objectives.
Midkiff, supra,
at 242-243.
As a last effort, B&M argues that this matter must be
remanded to the ICC because the Commission did not make adequate
and accurate findings regarding several different matters. B&M
claims that Amtrak failed to prove the parties were "'unable' to
agree" on terms of sale. In B&M's view, § 562(d) demands that
Amtrak engage in "good faith ... negotiations" before it may invoke
its condemnation powers. Brief for Respondent B&M 42. The ICC
construed the language of § 562(d) in a more narrow fashion, to
mandate nothing more than a factual determination that the parties
will not be able to reach agreement through further negotiations.
App. to Pet. for Cert. in No. 90-1419, pp. 130a-131a ("Nothing in
this record provides any indication that Amtrak and B&M will
ever reach agreement on terms of sale"). This is a reasonable
interpretation of the phrase "unable to agree upon terms for the
sale," and we do not substitute a different view. Thus the
Commission did not err in concluding that this statutory
prerequisite was satisfied.
B&M argues further that the ICC made inadequate factual
findings in concluding: (1) that this conveyance will not
significantly impair B&M's ability to carry out its obligations
as a common carrier, § 562(d)(1)(A); and (2) that Amtrak's
obligations cannot be met by the acquisition of alternative
property, § 562(d)(1)(B). As to significant impairment, B&M's
argument, like the decision of the Court of Appeals on this point,
286 U. S. App. D. C., at 8-9,911 F. 2d, at 750-751, relies on the
notion that in assessing impairment the ICC may consider only the
conveyance itself, not any mitigating measures adopted in response
to the conveyance, such as the grant of trackage rights to B&M.
We find no basis in the text or structure of § 562(d) for this
position and cannot say that the statute must be interpreted to
mandate such a restrictive inquiry. The ICC was not unreasonable in
considering the effect of the "trackage rights" agreements and the
just com-
424
424 NATIONAL RAILROAD PASSENGER CORPORATION
v.
BOSTON & MAINE CORP.
WHITE, J., dissenting
pensation award in assessing significant impairment; and the
ICC's conclusion, that B&M's ability to carry out its common
carrier obligations will not be impaired by the transaction in any
significant way, is supported by substantial evidence. As to the
availability of alternative property, the ICC interpreted that
provision as referring only to whether Amtrak could provide service
using an alternative route, not whether a lesser interest in
property would suffice to meet Amtrak's needs. Again, this was a
reasonable reading to which we defer. Since B&M would have to
prevail on both the significant impairment and alternative property
issues to rebut Amtrak's presumption of need, there can be no doubt
that the ICC's finding that Amtrak established its need for the
property must be affirmed.
III
For the reasons we have stated, we hold that the ICC did not
exceed its authority in ordering conveyance of the 48.8mile segment
of the Conn River Line from B&M to Amtrak. Because of its
contrary holding on this point, the Court of Appeals did not
address the parties' challenges to the ICC's just compensation
finding as well as certain other issues.
Id., at 11, 911 F.
2d, at 753. These questions should be resolved on remand. The
judgment of the Court of Appeals is reversed, and the cases are
remanded for further proceedings consistent with this opinion.
It is so ordered.
JUSTICE WHITE, with whom JUSTICE BLACKMUN and JUSTICE THOMAS
join, dissenting.
The majority opinion proceeds from the well-established
principle that courts should defer to permissible agency
interpretations of ambiguous legislation.1
Chevron U. S.
A.
1 I agree with the majority that the Court of Appeals erred in
concluding that § 402(d) of the Rail Passenger Service Act (RPSA),
45 U. S. C. § 562(d), unambiguously prohibits transactions such as
the sale and leaseback ar-
425
Inc. v.
Natural Resources Defense Council, Inc.,
467 U. S. 837,
843 (1984);
Pauley v.
BethEnergy Mines, Inc.,
501 U. S. 680,
696-697 (1991). I have no quarrel with that general proposition. I
do, however, object to its invocation to justify the majority's
deference, not to an agency interpretation of a statute, but to the
post hoc rationalization of Government lawyers attempting to
explain a gap in the reasoning and factfinding of the Interstate
Commerce Commission (ICC or Commission).
Motor Vehicle Mfrs.
Assn. of United States, Inc. v.
State Farm Mut. Automobile
Ins. Co., 463 U.
S. 29, 50 (1983).
Section 402(d) of the RPSA, codified at 45 U. S. C. § 562(d),
provides that Amtrak may apply to the ICC for an order directing
the conveyance of another railroad's property
if Amtrak can
meet two conditions: Amtrak and the other railroad must be unable
to agree upon terms for sale of the property, and the property must
be "required for intercity rail passenger service." If these
conditions are met, "the need of [Amtrak] for the property shall be
deemed to be established," and the other railroad will be able to
retain its property only if it can rebut the strong presumption of
Amtrak's need.
Ibid.
Because conferring upon Amtrak the presumption of need will
determine the outcome of most disputes under this section, the two
conditions that Amtrak must establish to receive the benefit of the
presumption assume particular importance. However, in the present
case, the ICC failed to address one of these factors. Although the
Commission determined that the parties had been unable to come to
terms for sale of the disputed property, see App. to Pet. for Cert.
in No. 90-1419, pp. 130a-131a, it neither interpreted nor applied
the second condition, that the property be "required
rangement between Amtrak and the Central Vermont Railroad.
Legislation passed while this case was pending before the Court of
Appeals makes it clear that such transactions are permissible.
Independent Safety Board Act Amendments of 1990 § 9(a), Pub. L.
101-641, 104 Stat. 4658.
426
426 NATIONAL RAILROAD PASSENGER CORPORATION
v.
BOSTON & MAINE CORP.
WHITE, J., dissenting
for intercity rail passenger service." Instead, after rejecting
respondent Boston & Maine Corporation's argument that Amtrak
could restore Montrealer service by obtaining trackage rights or an
easement, the ICC simply concluded that "Amtrak has demonstrated
sufficient reason to justify acquisition of ownership of the line."
Id., at 43a.
The majority acknowledges that "the ICC's opinion is not
explicit in all of its details," see
ante, at 418, but
nevertheless concludes that the Commission's reading of the statute
is entitled to deference because it "gave effect to the statutory
presumption of Amtrak's need for the track, and in so doing
implemented and interpreted the statute in a manner that comports
with its words and structure."
Ibid. But this begs the
question of what showing Amtrak must make to establish that the
track is "required" so that Amtrak may therefore obtain the benefit
of the presumption of need.
The simple fact is that
the ICC never addressed this
point, and therefore failed to construe a key portion of the
statute. The omission is particularly significant because this is
the first action treating Amtrak's condemnation powers under §
402(d) of the Act; it will guide future adjudications.
Rather than acknowledging the ICC's omission and remanding for
clarification and factfinding, the majority relies on the
Government's argument that the Commission must have interpreted the
word "required" as meaning "useful or appropriate."
Ibid.
But this interpretation was not developed by the ICC during its
administrative proceedings. Indeed, the explanation was not even
proposed in the Commission's argument to the Court of Appeals.2
This ICC
2 This is how the Commission framed its argument to the Court of
Appeals:
"Under
Chevron [[7: S.
A. Inc. v.
Natural
Resources Defense Council, Inc., 467 U. S. 837 (1984)],
the Commission had broad discretion to interpret RPSA in this
proceeding. This is certainly true with regard to the central
issu[e] of determining ... what must be shown to justify a taking
under section 402(d) .... As to [this] issue, the statute merely
states that Amtrak's need for the property will be presumed unless
the transfer will significantly impair the ability of the carrier
to carry out its common
427
definition of "required" debuted in the Commission's briefs
before this Court. It is nothing more than a creation of appellate
counsel, concocted to fill the gaps in the Commission's analysis.
"The short-and sufficient-answer to [this] submission is that the
courts may not accept appellate counsel's
post hoc
rationalizations for agency action .... It is well established that
an agency's action must be upheld, if at all, on the basis
articulated by the agency itself."
Motor Vehicle Mfrs.
Assn., supra, at 50 (emphasis added), citing
Burlington
Truck Lines, Inc. v.
United States, 371 U. S. 156, 168
(1962); SEC v.
Chenery Corp., 332 U. S. 194, 196-197
(1947);
American Textile Mfrs. Institute, Inc. v.
Donovan, 452
U. S. 490, 539 (1981). Therefore, the majority is simply wrong
in asserting that, even though "the ICC did not in so many words
articulate its interpretation of the word 'required,'" the
Court may nevertheless defer to the Commission's decision. See
ante, at 420 (emphasis added).
Because of the gap in the ICC's interpretation of the statute,
"[t]here are no findings and no analysis here to justify the choice
made, no indication of the basis on which the Commission exercised
its expert discretion."
Burlington Truck Lines, Inc., supra,
at 167. The majority concludes, again based on the agency's
presumed interpretation of the statute, that the Commission was not
obligated to make specific findings as to whether the property was"
'required for intercity rail passenger service.'" See
ante,
at 420. This magnifies the ICC's mistake; an administrative "agency
must make findings that support its decision, and those findings
must be supported by substantial evidence."
Burlington Truck
Lines, Inc., 371 U. S., at 168.
Deferring to a federal agency's construction of the legislation
that it is charged with administering is one thing. But deferring
to inferences derived from reading between the lines of an agency
decision or excerpted from the brief of
carrier obligations
and Amtrak's needs can be met with
alternative property." Joint Brief for Respondents in No. 88-1631
(CADC), pp. 15-16.
428
428 NATIONAL RAILROAD PASSENGER CORPORATION
v.
BOSTON & MAINE CORP.
WHITE, J., dissenting
a Government lawyer is another matter entirely. "For the courts
to substitute their or counsel's discretion for that of the
Commission is incompatible with the orderly functioning of the
process of judicial review."
Id., at 169. Because the ICC
has failed to provide a clear, authoritative construction of
"required for intercity rail passenger service," we should return
this case to the Commission so that the agency can do its job
properly. But we should not strain the
Chevron principle by
deferring to what we imagine an agency had in mind when it applied
a statute. Therefore, I respectfully dissent.
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