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07/16/79 National Railroad v. Te Commerce Commission and

July 16, 1979




Before McGOWAN and TAMM, Circuit Judges, and HOWARD F. CORCORAN,* Senior District Judge for the District of Columbia.



Petition for Review of an Order of the Interstate Commerce commission.



In this case, as in National Railroad Passenger Corp. v. ICC, 197 U.S.App.D.C. 346, 610 F.2d 865 (D.C.Cir. 1979), we are called upon to review the Interstate Commerce Commission's (Commission) application of section 402(a) of the Rail Passenger Service Act of 1970 (1970 Act), as amended by the Amtrak Improvement Act of 1973 (1973 Act), 45 U.S.C. 562(a) (1976) (current version at 45 U.S.C.A. ยง 562(a) (1978)).1 We decide whether the Commission correctly applied section 402(a) to determine the amount of payments the National Railroad Passenger Corporation (Amtrak) owes the Washington Terminal Company for use of WTC's all-passenger terminal of which Amtrak is half-owner and at least an eighty-five percent user.2 We hold that, in the context of this case, the Commission acted properly in charging Amtrak its allocated share of WTC's operating costs pursuant to a pre-existing agreement governing use of the passenger terminal. Further, the Commission's assessment of specific charges to Amtrak was "just and reasonable." I

WTC owns and operates a joint passenger service terminal in Washington, D.C. The terminal consists of Union Station, the Eckington Car and Engine Yard, which houses tracks, roundhouses and other maintenance facilities, and the Virginia Avenue track connection. Amtrak has voluntarily become a party3 to a 1907 Operating Agreement, Joint Appendix at 188-229, which apportions expenses of WTC among the terminal's users.4 Each user pays (1) all costs directly generated by its operations, and (2) an allocated share, based on percentage of use, of the remaining common costs.5

From Amtrak's creation in 1970, See Rail Passenger Service Act of 1970, Pub.L. No. 91-518, 84 Stat. 1327 (current version in scattered sections of ch. 14, 45 U.S.C.A. (1978)), until July 1, 1973, Amtrak operated intercity passenger trains previously run by the Trustees of the Property of Penn Central Transportation Company (Penn Central), the Baltimore and Ohio Railroad Company , The Chesapeake and Ohio Railway Company , and the Richmond, Fredericksburg and Potomac Railroad Company . Amtrak obtained access to the terminal by agreeing with the railroads to use their rights of access under the 1907 Agreement. Amtrak's agreements with those railroads expired July 1, 1973; and it then petitioned the Commission to determine WTC's just and reasonable compensation for continued use of the terminal. In the interim, WTC continued to bill the parties to the 1907 Agreement who then forwarded to Amtrak the charges relating to its operations.

In a decision issued on June 27, 1975, Division 3 of the Commission ordered Amtrak to become a party to the 1907 Agreement and to pay its resulting share of costs on the same basis as other user railroads, with two adjustments. Amtrak & Washington Terminal Company, Use of Tracks & Facilities & Establishing Just Compensation , 348 I.C.C. 86 (1975). First, the Commission held that "business" cars, I. e., official cars of a railroad used to transport railroad officers, should be counted in computing each railroad's use of the terminal. Id. at 104-05, 108. Second, the Commission ordered the adjustment of Amtrak's payments to account for conversion of the old Union Station into a National Visitor Center while a new station was being built adjacent to the Visitor Center. Id. at 107-08. Specifically, the Commission stated that the area of the station devoted to the construction of the Visitor Center should be "quasi-excessed,"6 by removing from the rental base the area occupied by the Visitor Center and by setting apart the costs related to the Visitor Center. Id.

Amtrak petitioned for reconsideration of the Commission's decision. Shortly thereafter, Amtrak acquired the interests of Penn Central and its subsidiary, the Philadelphia, Baltimore and Washington Railroad Company in the terminal. Thus, Amtrak now holds one-half ownership of WTC, one-half interest in the maintenance facilities, and sole ownership of the Virginia Avenue connection.7

Upon reconsideration in 1977, the Commission reaffirmed the 1975 order that Amtrak be joined to the 1907 Agreement. Amtrak & Washington Terminal Company, Use of Tracks & Facilities & Establishing Just Compensation , 348 I.C.C. 859, 859-60 (1977). The Commission, however, made two modifications in the 1975 decision. The Commission determined that Amtrak should not pay ownership expenses and rent for those portions of the Union Station building removed from railroad service by the Visitor Center, but that Amtrak should pay its share of other common operating expenses. Id. at 865-68. The Commission also reversed its 1975 decision to include business cars in the railroad car counts for the purpose of allocating Amtrak's share of the costs. Id. at 868.

Amtrak's petition for review in this court followed the 1977 Commission decision.8 Prior to oral argument, Amtrak voluntarily signed the 1907 Agreement, thereby mooting any dispute over the Commission's power to order Amtrak to join.9 Amtrak continues, however, to protest the terms of the Agreement as applied to it. II

Amtrak strongly attacks the Commission's decision requiring it to join the 1907 Agreement on the same basis as other user railroads. Specifically, Amtrak charges that it is being forced to bear the cost of non-incremental services although no quality standards govern WTC's service to Amtrak. According to Amtrak, this result violates the express statutory mandate of section 402(a) of the Rail Passenger Service Act, which provides, in part:

The Corporation may contract with railroads or with regional transportation agencies for the use of tracks and other facilities and the provision of services on such terms and conditions as the parties may agree. In the event of a failure to agree, the Interstate Commerce Commission shall, within ninety days after application by the Corporation, if it finds that doing so is necessary to carry out the purposes of this chapter, order the provision of services or the use of tracks or facilities of the railroad by the Corporation, on such terms and for such compensation as the Commission may fix as just and reasonable, and the rights of the Corporation to such services or to the use of tracks or facilities of the railroad or agency under such order or under an order issued under subsection (b) of this section shall be conditioned upon payment by the Corporation of the compensation fixed by the Commission. In fixing just and reasonable compensation for the provision ...

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