625 F2d 183 Soo Line Railroad Company v. United States

625 F.2d 183

The UNITED STATES of America and the Interstate Commerce
Commission, Respondent.
The Horner Flooring Company, Intervenor-Respondent.
Northern Hardwoods Div./Copper Range Company, Intervenor-Respondent.
State of Michigan, Department of Transportation,
United Transportation Union, Intervenor-Respondent.
Bureau of Industrial Development, Michigan Technological
University, Intervenor-Respondent.
Silver Forest Products, Inc., Intervenor-Respondent.
Railroad Steering Committee of the Copper Country Area
Industrial Council, Intervenor-Respondent.

No. 79-1667.

United States Court of Appeals,
Eighth Circuit.

Submitted March 10, 1980.
Decided March 17, 1980.
Rehearing and Rehearing En Banc Denied June 17, 1980.

C. Harold Peterson, Minneapolis, Minn., for petitioner.

view counter

Peter L. de la Cruz (on brief), Atty., Dept. of Justice, Washington, D. C., for respondent, U. S.; John H. Shenefield, Asst. Atty. Gen., Barry Grossman, Washington, D. C., on brief.


Denise M. O'Brien (on brief), Atty., I. C. C., Washington, D. C., for respondent, I. C. C.; Richard A. Allen, Gen. Counsel, Robert S. Burk, Deputy Gen. Counsel, Washington, D. C., on brief.


L. John Osborn (on brief), Washington, D. C., for intervenor-respondent, State of Michigan; Frank J. Kelley, Atty. Gen., Irena Kalvans, Asst. Atty. Gen., Lansing, Mich., Fritz R. Kahn, Sp. Asst. Atty. Gen., Dept. of Transp., Washington, D. C., on brief.


Mark W. Chessman (on brief), Dearborn, Mich., for intervenor-respondent, United Transportation Union; James F. Schouman, Dearborn, Mich., on brief.


Before BRIGHT, ROSS and McMILLIAN, Circuit Judges.




Soo Line Railroad Company (Soo Line) appeals a decision of the Interstate Commerce Commission which denied the railroad's application for abandonment of approximately 30 miles of branch line. Soo Line's application sought the abandonment of 50 miles of branch line located in the Upper Peninsula of Michigan. The Administrative Law Judge (ALJ) found that public convenience and necessity required abandonment of approximately 20 miles of the line but required continued operation on the balance of the line. Division 1 of the ICC affirmed and adopted the ALJ's findings with slight modification. No. AB-57 (Sub-No. 7), Soo Line Railroad Company-Abandonment Between Baraga (Baraga County) and Calument and Lake Linden (Houghton County), Michigan, decided June 7, 1979.

view counter

The ICC found that even if Soo Line's avoidable annual loss on the branch line was $123,400, as claimed by the railroad, full abandonment would not be authorized based on the "severe impact" to the area. Division 1 also noted that this burden was being placed on "a successful and financially sound railroad." However, the Commission in considering the burden placed on Soo Line specifically refused to consider "valuation of (the line's) assets" (opportunity costs) and "evidence relating to reproduction costs." Consideration of opportunity costs would, according to Soo Line, double the avoidable annual loss incurred by it in the operation of this branch line.


Recently, this court held in Missouri Pacific Railroad v. United States, 625 F.2d 178 (8th Cir. 1980) that the ICC should consider "opportunity costs" and should use replacement value rather than book value when evaluating abandonment applications. Therefore, we remand this case to Division 1 of the ICC for reconsideration consistent with this court's opinion in Missouri Pacific Railroad v. United States, supra.