Norfolk Southern Railway Company v. Surface Transportation Board and United States of America

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued May 9, 2023 Decided June 30, 2023
No. 22-1209
NORFOLK S OUTHERN R AILWAY C OMPANY ,
P ETITIONER
v.
S URFACE TRANSPORTATION B OARD AND UNITED S TATES OF
AMERICA,
R ESPONDENTS
CSX TRANSPORTATION , INC .,
INTERVENOR
On Petition for Review of a Decision
of the Surface Transportation Board
Shay Dvoretzky argued the cause for petitioner. With him
on the briefs were William A. Mullins, Crystal M. Zorbaugh,
Parker Rider-Longmaid, and Hanaa Khan.
Laura M. Wilson, Attorney, Surface Transportation Board,
argued the cause for respondent. With her on the brief were
Robert B. Nicholson, Attorney, U.S. Department of Justice,
Robert J. Wiggers, Attorney, Craig M. Keats, General Counsel,
Surface Transportation Board, and Anika Sanders Cooper,

-- 1 of 20 --

2
Deputy General Counsel. Theodore L. Hunt, Associate
General Counsel, entered an appearance.
Benjamin L. Hatch argued the cause for intervenor CSX
Transportation, Inc. in support of respondent.
Before: H ENDERSON, WILKINS and WALKER , Circuit
Judges.
Opinion for the Court filed by Circuit Judge HENDERSON.
KAREN LEC RAFT H ENDERSON, Circuit Judge: Norfolk
Southern Railway Company (Norfolk Southern) petitions for
review of a decision of the Surface Transportation Board (STB
or Board), the successor agency to the Interstate Commerce
Commission (ICC) charged with authorizing certain rail carrier
transactions under the Interstate Commerce Act, 49 U.S.C.
§§ 10101 et seq. Norfolk Southern is a rail carrier that owns a
57.14 per cent share of the Norfolk & Portsmouth Belt Line
Railroad Company (Belt Line), the operator of a major
switching terminal in Norfolk, Virginia, known as the Norfolk
International Terminal. Norfolk Southern’s majority interest
goes back to 1982, when its corporate family acquired and
consolidated various rail carriers with smaller ownership
interests in the Belt Line. Norfolk Southern’s competitor, CSX
Transportation, Inc. (CSX), owns the remainder of the Belt
Line’s shares (42.86 per cent).
Alleging Norfolk Southern and the Belt Line conspired to
impede CSX’s access to the switching terminal, CSX sued both
entities in the Eastern District of Virginia (Eastern District
court). It pressed federal antitrust, state-law conspiracy and
contractual claims. Norfolk Southern asserted immunity under
49 U.S.C. § 11321(a), which provides that a “rail carrier . . .
participating in [an ICC/Board-] approved or exempted

-- 2 of 20 --

3
transaction is exempt from the antitrust laws and from all other
law . . . as necessary to let that rail carrier . . . exercise
control . . . acquired through the transaction.”
The Eastern District court referred to the Board the
question whether the ICC had granted control authority of the
Belt Line to Norfolk Southern in the 1982 transaction. The
Board answered no, reasoning that the parties to the transaction
never sought ICC approval of control authority of the Belt
Line. Norfolk Southern does not appeal that ruling to this or
any court.
This case involves a different question raised before the
Board for the first time, viz., whether the ICC/Board approvals
of Norfolk Southern’s subsequent corporate-family
consolidations in 1991 and 1998 authorized Norfolk Southern
to control the Belt Line. The Board again answered no, for
essentially the same reason: the Belt Line was not mentioned
in the consolidation proceedings.
Norfolk Southern petitions for review, asserting that the
Board’s decision regarding the 1991 and 1998 consolidations
was arbitrary and capricious. Respondent STB and Intervenor
CSX challenge our jurisdiction because the agency decision
arose from the Eastern District court’s referral order. See
28 U.S.C. § 1336(b). As detailed below, we conclude that we
have jurisdiction to review the challenged portions of the
Board’s decision, 28 U.S.C. §§ 2321(a), 2342(5), and deny
Norfolk Southern’s petition for review on the merits.

-- 3 of 20 --

4
I.
A.
The Interstate Commerce Act (ICA) vests the Board—or
before 1996, the ICC1—with “exclusive authority to examine,
condition, and approve proposed mergers and consolidations of
transportation carriers within its jurisdiction.” Norfolk & W.
Ry. Co. v. Am. Train Dispatchers’ Ass’n, 499 U.S. 117, 119–
20 (1991) (citing 49 U.S.C. § 11343(a)(1), now at 49 U.S.C.
§ 11323(a)). Pursuant to this authority, the Board must
“approve and authorize” certain transactions involving rail
carriers “when it finds the transaction is consistent with the
public interest.” 49 U.S.C. § 11324(c); see id. § 11323(a)
(identifying transactions subject to section 11324(c)). One
such transaction is the “[c]onsolidation or merger of the
properties or franchises of at least 2 rail carriers into one
corporation for the ownership, management, and operation of
the previously separately owned properties.” Id. § 11323(a)(1).
Another is one rail carrier’s “[a]cquisition of control” of
another rail carrier. Id. § 11323(a)(3). Control “includes actual
control, legal control, and the power to exercise control” by
various means, including stock ownership. Id. § 10102(3). In
determining whether a transaction is consistent with the public
interest, the Board must consider, inter alia, the
anticompetitive effects of the transaction, id. § 11324(b)(5),
(d), and should it authorize the transaction, the Board “may
impose conditions governing the transaction,” id. § 11324(c).
1 “The ICC Termination Act of 1995 (ICCTA) abolished the
Interstate Commerce Commission (ICC) and established the STB in
its stead.” United Transp. Union v. STB, 114 F.3d 1242, 1243 n.1
(D.C. Cir. 1997) (citing Pub. L. No. 104–88, 109 Stat. 803). We refer
to the ICC or the Board as appropriate.

-- 4 of 20 --

5
Once the Board approves a transaction, “[a] rail carrier,
corporation, or person participating in that approved or
exempted transaction is exempt from the antitrust laws and
from all other law, including State and municipal law, as
necessary to let that rail carrier, corporation, or person carry out
the transaction, hold, maintain, and operate property, and
exercise control or [sic] franchises acquired through the
transaction.” Id. § 11321(a). Section 11321’s immunity
provision becomes effective at the time of the Board approval.
ICC v. Bhd. of Locomotive Eng’rs, 482 U.S. 270, 298–299
(1987) (Stevens, J., concurring).
The Board may approve a transaction in one of two ways:
(1) through the ordinary, formal application process or (2) by
granting an exemption from the ordinary process. In the first
route, the formal application process, the Board evaluates a
voluminous application from “the person seeking [Board]
authority” for the transaction. 49 U.S.C. § 11324(a); see id.
§ 11325 (providing general application procedure); 49 C.F.R.
§ 1180.4(a)–(c) (identifying general, prefiling and filing
requirements for applications). The other route for Board
approval is the exemption route, which “streamlines the
regulatory process by eliminating notice and comment in some
cases, by making a hearing unnecessary, and by expediting the
final decision.” Vill. of Palestine v. ICC, 936 F.2d 1335, 1337
(D.C. Cir. 1991). The Board’s exemption authority flows from
49 U.S.C. § 10502(a).2 That section also authorizes the Board
2 The ICCTA renumbered various provisions of the Interstate
Commerce Act, including § 10502, which was formerly codified
under 49 U.S.C. § 10505. Section 10502 provides in relevant part:
[T]he Board, to the maximum extent consistent with
this part, shall exempt a person, class of persons, or
a transaction or service whenever the Board finds
that the application in whole or in part of a provision

-- 5 of 20 --

6
to “revoke an exemption, to the extent it specifies,” whenever
it concludes that revocation is “necessary to carry out the
transportation policy of section 10101.” Id. § 10502(d).
The Board administers section 10502(a)’s exemption
authority through a “[n]otice of exemption” process, 49 C.F.R.
§ 1180.4(g), for those transactions falling within one of nine
“class exemptions,” id. § 1180.2(d). For each of the nine class
exemptions, see id. § 1180.2(d)(1)–(9), the Board has
determined that “its prior review and approval of these
transactions is not necessary to carry out the rail transportation
policy of 49 U.S.C. [§] 10101; and is of limited scope or
unnecessary to protect shippers from market abuse.” 49 C.F.R.
§ 1180.2(d). Of relevance here, section 1180.2(d)(3) contains
the class exemption for corporate-family transactions,
providing streamlined review for “[t]ransactions within a
corporate family that do not result in adverse changes in service
levels, significant operational changes, or a change in the
competitive balance with carriers outside the corporate
family.” Id. § 1180.2(d)(3).
“A notice must be filed to use one of these class
exemptions” using the procedures “set out in § 1180.4(g).” 49
C.F.R. § 1180.2(d). A party must, inter alia, “file a verified
notice of the transaction with the Board,” id. § 1180.4(g)(1),
and describe the proposed transaction for which exemption is
sought, id. § 1180.4(g)(1) (citing 49 C.F.R. § 1180.6(a)(1)(i)–
of this part—(1) is not necessary to carry out the
transportation policy of section 10101 of this title;
and (2) either—(A) the transaction or service is of
limited scope; or (B) the application in whole or in
part of the provision is not needed to protect
shippers from the abuse of market power.
49 U.S.C. § 10502(a).

-- 6 of 20 --

7
(iii), (a)(5)–(6), (a)(7)(ii)), including “[t]he purpose sought to
be accomplished by the proposed transaction,” id.
§ 1180.6(a)(1)(iii). Despite the streamlined nature of the
exemption proceedings, the regulation cautions that “[i]f the
notice contains false or misleading information . . . , the Board
shall summarily revoke the exemption for that carrier and
require divestiture.” Id. § 1180.4(g)(1)(iv).
B.
The Belt Line was established in 1896 as a joint venture of
eight railroads to provide switching services in Norfolk,
Portsmouth and Chesapeake, Virginia. Before 1980, Belt
Line’s stock was held by four different rail systems. In 1980,
CSX acquired two of the railroads, giving it ownership of 42.86
per cent of the Belt Line’s stock. This is the same percentage
that CSX holds today. That same year, a noncarrier holding
company, Norfolk Southern Corporation (NSC), applied for
ICC authorization to acquire the other two railroads, Norfolk
and Western Railway Company (NW) and Southern Railway
Company (SR)—SR being Norfolk Southern’s predecessor.3
The application made no mention of the Belt Line “except in a
chart attached as Appendix 2 to Volume 2 of the Application
(Appendix 2) listing all the railroad companies in which NW
and SR[] held an ownership interest” and in a discussion of the
operating plan. Norfolk Southern Railway Company—Petition
for Declaratory Order, Docket No. FD 36522, 2022 WL
2191932, at *3 & n.8 (S.T.B. June 17, 2022); see also NWS
3 The holding company’s name at the time of the application
was NWS Enterprises, Inc. but by the time the transaction was
approved the company had changed its name to Norfolk Southern
Corporation (NSC). See Norfolk Southern Railway Company—
Petition for Declaratory Order, Docket No. FD 36522, 2022 WL
2191932, at *2 & n.2 (S.T.B. June 17, 2022). NSC is Petitioner
Norfolk Southern’s parent company.

-- 7 of 20 --

8
Enterprises; Application to Control Norfolk and Western
Railway Co. and Southern Railway Co., Fin. Dkt. No. 29430,
46 FED. R EG. 173, 173–76 (Jan. 2, 1981). The ICC approved
the acquisition in 1982. Norfolk Southern, 2022 WL 2191932,
at *4. As a result of the 1982 transaction, CSX held 42.86 per
cent of the Belt Line and NSC held the remaining 57.14 per
cent.4
In 1991, the ICC, pursuant to the exemption for
transactions “within a corporate family,” see 49 C.F.R.
§ 1180.2(d)(3), granted SR authority to acquire NW as a
subsidiary. The exemption, as published in the Federal
Register, noted that as a result of the transaction, SR “will
obtain direct control of NW and indirect control of [NW’s
subsidiaries].” Southern Railway Co.—Control Exemption—
Norfolk and Western Railway Co., Fin. Dkt. No. 31791,
56 FED. R EG. 1541, 1541 (Jan. 15, 1991). Moreover, as part of
the transaction, SR changed its name to Norfolk Southern
Railway Company (Norfolk Southern). Id. Neither SR’s notice
of exemption nor the Federal Register made any mention of
SR, Norfolk Southern or any other entity acquiring control of
the Belt Line as a result of the transaction;5 instead, the
transaction was “intended to effect operating efficiencies.”
56 FED. R EG. at 1541. The ICC found, as required by 49 C.F.R.
4 During that decade, CSX and NSC agreed to proportional
representation on the Belt Line’s board of directors; CSX had the
right to appoint two members and NSC the right to appoint three.
5 SR’s notice stated: “The exempt transactions are (1) direct
control through stock ownership of NW by SR and indirect control
by SR of NW’s rail carrier subsidiaries; and (2) guarantee by SR of
NW’s obligations in respect of certain mortgage bonds and
debentures.” J.A. 788–89. The “rail carrier subsidiaries” of NW were
identified as Chesapeake Western Railway, the Toledo Belt Railway
Company and Wabash Railroad Company. J.A. 790.

-- 8 of 20 --

9
§ 1180.2(d)(3), that the transaction “will not result in adverse
changes in service levels, significant operational changes, or a
change in the competitive balance with carriers outside the
corporate family.” 56 F ED. R EG. at 1541. As a result of the 1991
transaction, Norfolk Southern assumed control of 57.14 per
cent of Belt Line’s stock.
In 1998, pursuant to another corporate-family transaction
exemption, the Board authorized the merger of NW into its
parent, Norfolk Southern (formerly SR). The Federal
Register’s publication of the exemption stated that “[t]he
transaction will simplify [Norfolk Southern]’s corporate
structure and eliminate costs associated with separate
accounting, tax, bookkeeping and reporting functions.” Norfolk
Southern Railway Company; Merger Exemption; Norfolk and
Western Railway Company., Fin. Dkt. No. 33648, 63 FED. R EG.
46278 (Aug. 31, 1998). Again, the Board made the requisite
finding under 49 C.F.R. § 1180.2(d)(3) but neither the notice
of exemption nor the Federal Register mentioned acquisition
of control of the Belt Line. Instead, the notice stated that the
transaction was “designed to further the goal of corporate
simplification.” J.A. 809. After the 1998 transaction, the
separate corporate existence of NW ceased and Norfolk
Southern acquired ownership of all of NW’s assets.
C.
Fast forward 20 years: in 2018, CSX sued Norfolk
Southern and the Belt Line in the Eastern District of Virginia,
alleging antitrust, conspiracy and contract law violations
arising from Norfolk Southern’s and the Belt Line’s alleged
actions to deprive CSX of rail access to the Norfolk
International Terminal. See Complaint, CSX Transp., Inc. v.
Norfolk S. Ry. Co., No. 2:18-cv-530 (E.D. Va. filed Oct. 4,
2018), ECF No. 1. It alleged that Norfolk Southern and the Belt

-- 9 of 20 --

10
Line conspired to use the Belt Line “as a chess piece” to
establish and maintain Norfolk Southern’s “monopolistic
control over intermodal transportation.”6 Compl. at 3. Norfolk
Southern moved to dismiss, relying on its immunity from suit
pursuant to 49 U.S.C. § 11321(a). See CSX Transp., Inc. v.
Norfolk S. Ry. Co., No. 2:18-cv-530, 2021 WL 2908649, at *2
(E.D. Va. May 18, 2021).
On May 18, 2021, the Eastern District court issued its
referral order. See id. at *1–11. After setting out the history of
the 1982 consolidation and the parties’ immunity arguments, it
concluded “that the STB is the proper authority to clarify the
contours of the 1982 consolidation at issue in this case.” Id. at
*9. It then granted Norfolk Southern’s stay motion and referred
“[t]he following discrete question” to the Board:
Did the 1982 consolidation, whereby NSC
acquired an indirect 57 percent interest in Belt
Line, involve the ICC/STB granting NSC
“approval” to control Belt Line, and if so, did
such authorized “control” render it necessary
for antitrust and/or state conspiracy laws to
yield, whether because Belt Line was then
deemed a “franchise” of NSC, or for any other
reason?
Id. at *11.
On referral, the Board concluded that “the ICC did not
authorize NSC to control [the Belt Line].” Norfolk Southern,
2022 WL 2191932, at *7. It reasoned that, in 1980, NSC had
6 Intermodal transportation uses two modes of freight, including
ship and rail, to transport goods. See Nat’l Customs Brokers &
Forwarders Ass’n of Am., Inc. v. United States, 883 F.2d 93, 101 n.9
(D.C. Cir. 1989).

-- 10 of 20 --

11
asserted that including the names of the “non-system
companies”—i.e., railroad companies in which NW and SR
had interests but did not control, see id. at *2—and submitting
their information would “substantially burden the record” and
“serve no useful purpose.” Id. at *8 (quoting original 1980
petition). The unmentioned Belt Line was one of those non-
system companies. Id.; see also 46 FED. R EG. at 174, 176
(omitting Belt Line from list of “[t]he rail carrier subsidiaries
of NW and the SR consolidated system carriers” of which NSC
acquired control). “The Petition did not name the non-system
companies or provide any information about them except to
state that NW and SRC held a 50% or less interest in these
companies, did not control them, had no intention of
controlling them after the transaction, and the records for these
companies were maintained separately from the NW and SR[]
consolidated data.” Norfolk Southern, 2022 WL 2191932, at
*8. “The only logical reading of the Petition,” the Board
determined, “is that petitioners were telling the Board that the
non-system companies were outside the scope of the control
authority being requested.” Id. at *9.
Having concluded that the 1982 ICC approval did not
grant authority to control the Belt Line, the Board turned to
Norfolk Southern’s other argument, not made before the
Eastern District court, that the ICC/Board’s subsequent
decisions in 1991 and 1998 granted Norfolk Southern this
authority. See id. at *13. Noting that the Belt Line “was not
mentioned in either of these proceedings,” it held that “an
exemption under 49 C.F.R. § 1180.2(d)(3) could not have been
used to grant authority to any member of NSC’s corporate
family to control NPBL unless authority had previously been
granted for some other member of that corporate family to
control NPBL.” Id. The Board rejected the Belt Line’s
invitation to “retain this matter and allow [Norfolk Southern]
to seek authority to now control [the Belt Line],” id. at *14, but

-- 11 of 20 --

12
also noted that it “expects the parties to take appropriate steps
to address the unauthorized control issue immediately
following resolution of the district court proceeding, including
any appeals,” id. at *14 n.25.
On August 15, 2022, Norfolk Southern petitioned for
review in this Court, challenging only that part of the Board’s
decision holding that the 1991 and 1998 transactions did not
grant Norfolk Southern control authority over the Belt Line.7
CSX intervened and both CSX and the STB moved to dismiss
for lack of jurisdiction.
II.
All parties agree that Norfolk Southern has standing to
maintain this action. Nevertheless, we “ha[ve] an ‘independent
obligation’ to review petitioner’s standing before addressing
the merits.” New Jersey v. EPA, 989 F.3d 1038, 1045 (D.C. Cir.
2021) (quoting Summers v. Earth Island Inst., 555 U.S. 488,
499 (2009); Grocery Mfrs. Ass’n v. EPA, 693 F.3d 169, 174
(D.C. Cir. 2012)). After Norfolk Southern filed its petition for
review in this Court, the Eastern District court entered final
judgment, Judgment in a Civil Case, CSX Transp., Inc. v.
Norfolk S. Ry. Co., No. 2:18-cv-530 (E.D. Va. Apr. 19, 2023),
ECF No. 644, having dismissed CSX’s claims against Norfolk
Southern—including all federal antitrust and state-law
contractual claims—as either time-barred, pre-empted or
unsupported. See Opinion and Order at 1–2, 15–17, 22–23,
CSX Transp., Inc. v. Norfolk S. Ry. Co., No. 2:18-cv-530 (E.D.
Va. Apr. 19, 2023), ECF No. 643; CSX Transp., Inc. v. Norfolk
S. Ry. Co., No. 2:18-cv-530, 2023 WL 2552343, at *11 (E.D.
Va. Jan. 27, 2023); CSX Transp., Inc. v. Norfolk S. Ry. Co., No.
7 Norfolk Southern also filed a “protective complaint under
§ 1336(b)” in the Eastern District court, asking it “to hold the case in
abeyance pending” our review. Pet’r Br. at 22.

-- 12 of 20 --

13
2:18-cv-530, 2023 WL 25344, at *27, 33, 35 (E.D. Va. Jan. 3,
2023). Accordingly, we first address whether the Eastern
District court’s disposition of CSX’s lawsuit renders Norfolk
Southern’s petition moot. See Chafin v. Chafin, 568 U.S. 165,
171–72 (2013).
We are satisfied that Norfolk Southern’s petition is not
moot. Its injury arises from the Board’s determination that the
ICC/Board never authorized Norfolk Southern to control the
Belt Line. Absent authorization, Norfolk Southern cannot avail
itself of an immunity defense in the CSX litigation, see
49 U.S.C. § 11321(a), and that litigation remains pending in the
U.S. Court of Appeals for the Fourth Circuit, see CSX Transp.,
Inc. v. Norfolk S. Rwy. Co., No. 23-1537 (4th Cir. filed May 18,
2023). Reversal of the district court’s dismissal “may be
uncertain or even unlikely,” see Mission Prod. Holdings, Inc.
v. Tempnology, LLC, 139 S. Ct. 1652, 1660 (2019), but
“uncertainty does not typically render cases moot,” Chafin,
568 U.S. at 175. That Norfolk Southern may assert an
immunity defense at a later stage in the CSX litigation, coupled
with the Board’s conclusion that an “unauthorized control
issue” exists and must be resolved “immediately” lest Norfolk
Southern incur regulatory penalties, see Norfolk Southern,
2022 WL 2191932, at *14 nn.24–25, satisfies any Article III
concern that a live controversy regarding the 1991 and 1998
approvals exists.
III.
Norfolk Southern contends that the Board’s decision
regarding the 1991 and 1998 transactions is inconsistent with
the Board’s regulation, see 49 C.F.R. § 1180.2(d)(3), and that
the Board failed to reasonably explain its decision. Respondent
STB and Intervenor CSX move to dismiss the petition for lack

-- 13 of 20 --

14
of subject matter jurisdiction and also defend the Board’s
action on the merits.
A.
We resolve the jurisdictional challenge before turning to
the merits of Norfolk Southern’s APA challenge. See McCarty
Farms, Inc. v. STB, 158 F.3d 1294, 1298 (D.C. Cir. 1998)
(citing Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94
(1998)). The issue is whether we can exercise jurisdiction over
the challenged portion of the Board’s decision pursuant to the
Hobbs Act. Ordinarily, the Hobbs Act confers jurisdiction to
review “all . . . final orders of the Surface Transportation Board
made reviewable by section 2321 of this title.” 28 U.S.C.
§ 2342(5); see id. § 2321(a) (vesting “the court of appeals”
with jurisdiction over “proceeding[s] to enjoin or suspend, in
whole or in part, . . . [an] order of the” STB). But the Congress
has excepted from this type of review questions referred by a
district court to the Board. Id. § 1336(b); see McCarty Farms,
158 F.3d at 1298–99. 28 U.S.C. § 1336(b) provides:
When a district court . . . refers a question or
issue to the [STB] for determination, the court
which referred the question or issue shall have
exclusive jurisdiction of a civil action to
enforce, enjoin, set aside, annul, or suspend, in
whole or in part, any order of the [STB] arising
out of such referral.
28 U.S.C. § 1336(b). Put simply, “review of orders of the STB
that ‘arise’ out of a referral from a district court are within that
court’s exclusive jurisdiction.” McCarty Farms, 158 F.3d at
1298.

-- 14 of 20 --

15
CSX and the STB submit that the Board decision in its
entirety arose out of the referral order. See Intervenor Br. at 1;
Resp. Br. at 2. As a result, they contend, the Eastern District of
Virginia retains jurisdiction over the Board’s rulings regarding
the 1991 and 1998 transactions. Norfolk Southern claims that
only the Board’s holdings regarding the 1982 transaction arose
from the referral order and thus we can review the issues
surrounding the later transactions. See Pet’r Br. at 31. The
question, then, is how we determine the extent to which the
Board order is encompassed in the referral.
We believe our holding in McCarty Farms provides the
answer. 158 F.3d 1294.8 There, we gave a “strict construction”
to section 1336(b), establishing a “bright line rule” for parties
“seeking review of an STB decision.” Id. at 1300. We held that
“issues expressly set out in the district court’s referral order”
fall under section 1336(b) but “[t]he court of appeals reviews
all other issues” under sections 2321(a) and 2342(5). Id.
Because the Eastern District court referred only the
“discrete question” whether “the 1982 consolidation”
authorized control of the Belt Line, CSX Transp., 2021 WL
2908649, at *11, we are free to decide the effect, if any, of the
1991 and 1998 transactions on the Belt Line control issue. CSX
contends that McCarty Farms supports its position because
whether the later transactions conferred antitrust immunity on
Norfolk Southern is “inextricably intertwined” with the
8 The STB maintains the approaches taken by the Third,
Seventh and Eighth Circuits are superior to ours. See Resp. Br. at 15–
18 (citing Ry. Lab. Execs.’ Ass’n v. ICC, 894 F.2d 915, 917 (7th Cir.
1990); United Pac. R.R. Co. v. Ametek, Inc., 104 F.3d 558, 559, 562
(3d Cir. 1997); R.R. Salvage & Restoration, Inc. v. STB, 648 F.3d
915, 917–18 (8th Cir. 2011)). But McCarty Farms itself noted that
our reading of section 1336(b) put us in the minority of circuits that
had considered the issue. See 158 F.3d at 1299.

-- 15 of 20 --

16
referred question regarding the 1982 merger. See Intervenor Br.
at 6. But whether control of the Belt Line was authorized in
1982 versus whether such control was authorized in 1991 or
1998 can be analyzed separately, as the Board did in its order.
See Norfolk Southern, 2022 WL 2191932, at *13–14.
We reject CSX’s and the STB’s additional challenges to
our jurisdiction. First, they claim that McCarty Farms equated
“issues” with “broad claims for relief.” See Resp. Br. at 20;
Intervenor Br. at 18. But we conclude that McCarty Farms
means what it said: “issues” not “expressly set out in the district
court’s referral order” are to be reviewed by the court of
appeals. 158 F.3d at 1300 (emphasis added). CSX also argues
the “bright line rule” language is dicta. See Intervenor Br. at
18–19. In applying a “strict construction of Section 1336(b),”
however, McCarty Farms intended a bright line rule for parties
to follow in seeking review of a Board decision. 158 F.3d at
1300. We decline CSX’s invitation to undercut precedent and
undermine the reliance expectations of those parties. CSX next
argues that it is “implausible to suggest that the referring
district court was not seeking to have the STB resolve [Norfolk
Southern]’s immunity arguments in toto.” Intervenor Br. at 20.
Yet the rule from McCarty Farms examines only “the language
of the district court’s referral.” 158 F.3d at 1300 (quoting
United Pac. R.R. Co. v. Ametek, Inc., 104 F.3d 558, 566 (3d
Cir. 1997) (Roth, J., dissenting)), and the Eastern District court
referred only the issue of the “1982 consolidation,” see CSX
Transp., 2021 WL 2908649, at *11. Finally, CSX and the STB
make a judicial-efficiency argument. See Intervenor Br. at 20–
21; Resp. Br. at 15. But McCarty Farms weighed—and found
wanting—the judicial economy objection. 158 F.3d at 1300.9
9 “Although members of Congress may have expressed an
intent to further judicial economy, that laudable goal will not compel
a construction whereby claims that are only tangentially related to

-- 16 of 20 --

17
In short, we conclude that we have jurisdiction pursuant to
the Hobbs Act, 28 U.S.C. §§ 2321(a), 2342(5), and,
accordingly, proceed to the merits of Norfolk Southern’s
petition.
B.
On the merits, Norfolk Southern mounts an APA
challenge, see 5 U.S.C. § 706(2)(A), arguing, first, the Board’s
holding as to the 1991 and 1998 transactions is inconsistent
with the regulatory text and structure, see Pet’r Br. at 49–55;
and second, the Board failed to explain its reasoning, see id. at
59–60. We reject both arguments.
To determine whether an agency’s action or interpretation
comports with its regulations, a court “must apply all
traditional methods of interpretation” to the regulations. Kisor
v. Wilkie, 139 S. Ct. 2400, 2419 (2019) (plurality opinion); see
Green v. Brennan, 578 U.S. 547, 553 (2016). Text comes first.
See Kisor, 139 S. Ct. at 2419. If the agency’s interpretation
“would contravene the plain text of its own regulations,” we
reject it. See Hispanic Affs. Project v. Acosta, 901 F.3d 378,
387 (D.C. Cir. 2018).
The corporate-family exemption provides a class
exemption for “[t]ransactions within a corporate family” that
meet three requirements. See 49 C.F.R. § 1180.2(d)(3). The
transaction cannot result in “adverse changes in service levels,”
id., it cannot result in “significant operational changes,” id., and
it cannot result in “a change in the competitive balance with
those referred by the district court arise out of that referral along with
those specifically referenced by the district court. Further, there is
little danger of ‘piecemeal appeals’ where the disputed claims are not
raised with the district court, but rather are brought before the STB
in the first instance.” McCarty Farms, 158 F.3d at 1300.

-- 17 of 20 --

18
carriers outside the corporate family,” id. But it is
(understandably) silent regarding whether previously
unauthorized control can become authorized via the corporate-
family exemption. The Board reasoned that “49 C.F.R.
§ 1180.2(d)(3)’s requirement that the transaction be ‘within a
corporate family’” demands “that the member of the corporate
family whose ownership is changing as a result of the
transaction was previously authorized to be controlled by a
member of the corporate family.” Norfolk Southern, 2022 WL
2191932, at *14. In other words, the carrier of which control
authority is sought must be “lawfully within” or already
authorized within the corporate family. Cf. Resp. Br. at 26.
Norfolk Southern contends there is no room for such an
implicit requirement, relying on the expressio unius est
exclusio alterius interpretive tool. See, e.g., NLRB v. SW Gen.,
Inc., 580 U.S. 288, 302 (2017); see Pet’r Br. at 45 (“[W]hen a
regulation sets out a series of precise requirements, it is
unlikely that the regulation intended further requirements.”).
Norfolk Southern’s point is fair in theory but the reading its
construction would compel—that the corporate-family
exemption can cure a previously unauthorized acquisition of
control—would effectively override the specific Board
approval procedures for control acquisitions. See 49 U.S.C.
§ 11325; 49 C.F.R. § 1180.4(a)–(c); see also 49 U.S.C.
§ 10502(a); 49 C.F.R. § 1180.4(g).
Although Norfolk Southern characterizes the Board’s
position as a “policy concern,” see Pet’r Br. at 56, the Board’s
previous-authorization rule is compelled by the ICA’s
regulatory framework. As the Board noted, Norfolk Southern’s
alternate reading “would allow the corporate family exemption
to effectively nullify other Board requirements since parties
could acquire control of a carrier without informing the Board
in a transaction that would normally require an application or
another type of exemption under the Board’s rules and then

-- 18 of 20 --

19
cure that unauthorized acquisition by reorganizing the
corporate family and seeking a corporate family transaction
exemption.” Norfolk Southern, 2022 WL 2191932, at *14. And
as the Board reasonably emphasized, “[t]he Board and the
public must be able to clearly understand the control authority
sought and granted, particularly given the significance of the
immunity from antitrust laws and other laws that comes with
control authority.” Id. at *9; see also id. at *11 (similar).
The APA challenge also includes the claim that the Board
failed to explain its reasoning. See Pet’r Br. at 59–60. Norfolk
Southern contends that “the Board made no effort to explain
why its newly announced rule and the regulatory text were
consistent,” id. at 59, and, instead, rested purely on “conclusory
policy rationales,” id. at 60. Both assertions fail. The Board
supported its commonsense reading of the regulation, first,
with the text itself and, second, with the structure of the
Board’s and ICA’s requirements. The Board reasonably
explained that the corporate-family exemption cannot
constitute an independent basis for control authority without a
corporate family member “ha[ving] previously been granted”
control authority of the carrier. Norfolk Southern, 2022 WL
2191932, at *13. As the Board concluded, 49 C.F.R.
§ 1180.2(d)(3)’s exemption cannot authorize—after the fact—
a new control acquisition (i.e., of an entity outside the corporate
family) that alters the competitive landscape, contradicts the
regulation’s language (“within the corporate family”) and
undermines the regulatory framework. See Norfolk Southern,
2022 WL 2191932, at *14.
For the foregoing reasons, we conclude that the Board’s
decision regarding the 1991 and 1998 transactions is neither
arbitrary nor capricious. The Board reasonably sought to avoid
an absurd interpretation of 49 C.F.R. § 1180.2(d)(3)’s
corporate-family exemption that would allow a carrier to gain

-- 19 of 20 --

20
control of a new entity without following the Board’s review
requirements and then “cure that unauthorized acquisition by
reorganizing the corporate family.” Norfolk Southern,
2022 WL 2191932, at *14. The Board reasonably rejected
Norfolk Southern’s claim that, by reshuffling the pieces of its
corporate family, it acquired control authority of the Belt Line
sub silentio.
Accordingly, we deny Norfolk Southern’s petition for
review.
So ordered.

-- 20 of 20 --