Administrative Law

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7^th Circuit Court of Appeals

Case Name: Union Pacific Railroad Company v. Regional Transportation Authority

Case No.: 22-1445

Officials: Easterbrook, Jackson-Akiwumi, and Lee, Circuit Judges

Focus: Administrative Law

An Illinois state agency is responsible for overseeing Metra, a passenger railroad system operating from Chicago with lines radiating outwards. While Metra owns the rolling stock for three of these lines, Union Pacific (UP) provides the track, workforce, and ticket sales. The revenue generated from ticket sales goes to Metra, which then compensates UP for its services. Recently, UP informed Metra of its intention to cease its services.

In response, Metra asserted that UP cannot terminate the service unless it is relieved of its obligations by the Surface Transportation Board. Metra’s argument stems from the belief that UP is bound by its relationship with Metra due to the repeal of 49 U.S.C. 10908, 10909 by the 1995 ICC Termination Act. These were the only statutes giving the Board authority over the discontinuation of passenger service. On the other hand, UP contended that the repeal effectively deregulated passenger rail service, granting railroads the discretion to end passenger service based on business considerations. It’s important to note that federal law mandates the Board’s permission for abandoning all service over a line of track. However, UP plans to continue freight service, indicating that the lines will not be entirely abandoned.

The district court declined to defer to the Board’s primary jurisdiction in this matter because the dispute doesn’t require any factual findings by an agency. The Board itself agreed with this position. Subsequently, the Seventh Circuit Court upholds UP’s stance. The relevant contract between Metra and UP has long expired, which means any reduction in service would rely on adhering to all applicable statutory and regulatory provisions. Consequently, if UP qualifies as a common carrier instead of an independent contractor of Metra, it possesses the unrestricted authority to discontinue any service without the Board’s approval as long as it maintains the rail infrastructure and continues running some trains.

Affirmed

Decided 07/26/23

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