[00:00:02] Speaker 00: Case number 14-1207, Association of American Railroads Petitioner versus Federal Railroad Administration at L. Mr. Dupree for the petitioner, Mr. Perry for the respondents. [00:01:50] Speaker 05: Good morning. [00:01:51] Speaker 02: Good morning. [00:01:51] Speaker 02: May it please the Court? [00:01:54] Speaker 03: Tom Dupree on behalf of the Association of American Railroads. [00:01:57] Speaker 03: We are here today challenging a letter from the Federal Railroad Administration holding that the hours of service laws apply to individuals who run an automated self-test function on cab signal systems. [00:02:12] Speaker 03: We are asking this court to vacate the letter ruling because it's contrary to the plain text of the statute, because the agency has improperly jettisoned its longstanding narrowing of construction of the statute, and because the agency has now acknowledged before this court that its letter ruling contains a fundamental error. [00:02:33] Speaker 03: It assumes mistakenly that the agency had already decided [00:02:37] Speaker 03: the question presented in this case. [00:02:39] Speaker 01: Mr. Dupree, you argued that the self-test does not affect the safe functioning of the system, and I wonder what is the purpose of this testing if not, in fact, to assure the safe functioning of the system? [00:02:55] Speaker 03: Right. [00:02:55] Speaker 03: Judge Paul, maybe I could clarify what we mean there. [00:02:58] Speaker 03: What we mean is that the employee's operation of the self-test doesn't have a direct impact on safety. [00:03:06] Speaker 03: The self-test, as its name suggests, means it's an automated test. [00:03:09] Speaker 03: It's the computer that's doing all of the testing. [00:03:13] Speaker 03: The human operator's role doesn't play a role on safety, because if he or she messes it up, the system itself says something's wrong here. [00:03:23] Speaker 01: I know that there's in the record a video and some information about this test. [00:03:27] Speaker 01: Is there information sufficient from which an agency could discern, could verify what you're saying about the fail-safe characteristics of this test? [00:03:38] Speaker 03: I believe there is, Your Honor. [00:03:41] Speaker 03: I think that both the video as well as other documents in the administrative record demonstrate that. [00:03:47] Speaker 03: I think the video is probably the clearest aspect of it. [00:03:51] Speaker 03: But one thing I would point out to Your Honor is that none of the reasoning that the government puts forward in its appellate brief where it [00:03:58] Speaker 03: discusses whether this is in fact failsafe, none of that reasoning appears in the agency's letter ruling. [00:04:03] Speaker 03: And of course, as this court knows, it upholds or vacates the agency order based on the reasoning the agency offer, not looking at their policy. [00:04:10] Speaker 01: I actually had sort of a basic question about that that isn't, I know it isn't really the way that the case was briefed, but you were seeking, in effect, an exemption from ruling from them that you wouldn't be covered by what the, [00:04:26] Speaker 01: what had traditionally covered all testing. [00:04:28] Speaker 01: And you're saying, look, testing's changed. [00:04:30] Speaker 01: We've got this automated fail-safe test. [00:04:34] Speaker 01: We're not in that world anymore. [00:04:36] Speaker 01: So can you assure us in advance that we wouldn't be covered by this? [00:04:42] Speaker 01: And they said no. [00:04:43] Speaker 01: Isn't it your burden in that situation to show that you warrant different treatment rather than their burden to justify why they aren't giving you that exemption? [00:04:55] Speaker 01: I mean, you're just wondering about, given that what you're seeking is a little different way, an updated way of operating, given the new technology. [00:05:05] Speaker 03: Well, I certainly agree with Your Honor's point that this is an updated way of operating, given the new technology. [00:05:09] Speaker 03: But I think I would take issue with the notion that we were somehow seeking an exception from the rule that has prevailed. [00:05:16] Speaker 03: As Your Honor knows, what the agency has said year after year after year is not that all testing is automatically covered. [00:05:24] Speaker 03: They have never adopted a per se rule saying testing is covered. [00:05:28] Speaker 03: Quite the contrary. [00:05:29] Speaker 03: What they have said is ordinarily [00:05:31] Speaker 03: we deemed testing a covered service, ordinarily meaning in many cases, perhaps most cases, but not all cases. [00:05:38] Speaker 01: But haven't they also said that they've never, they've never before [00:05:44] Speaker 01: taken out of the hours of service coverage, any testing, and engine testing like this? [00:05:51] Speaker 03: See, I'm not sure I agree with that characterization of what the agency is saying, Your Honor, because again, I harp on the word, I come back to the word ordinarily, because to me, ordinarily suggests that in most cases, yes, but in some cases, no. [00:06:05] Speaker 03: And so if in fact, as your honor posits, they've always said in every case testing is covered, they wouldn't have said ordinarily we think testing is covered. [00:06:14] Speaker 03: The fact that they say ordinarily suggests that there are situations where testing is not covered. [00:06:19] Speaker 03: That's been their approach. [00:06:20] Speaker 03: What they do is they approach this very sensibly. [00:06:23] Speaker 03: on an individual case-by-case basis. [00:06:26] Speaker 03: That's what they did in the SEPTA proceeding, which is in the record, where what they did was they flooded the zone with inspectors. [00:06:32] Speaker 03: FRA officials went to SEPTA's rail yard. [00:06:35] Speaker 03: They sat in. [00:06:35] Speaker 03: They looked at the guys operating the test. [00:06:38] Speaker 03: The FRA lawyers got into the chair themselves. [00:06:40] Speaker 03: They did the tests. [00:06:41] Speaker 03: So that's how they normally adjudicate these cases. [00:06:44] Speaker 03: They do an individualized determination so they understand the technology and what's involved in running it. [00:06:49] Speaker 01: Did you invite them to do that with your UltraCab, too? [00:06:53] Speaker 03: Well, you should ask her. [00:06:54] Speaker 03: They've actually done that after we filed our appeal in this court and they saw our brief. [00:06:57] Speaker 03: But did you, in the end, approve? [00:06:58] Speaker 03: Oh, absolutely. [00:06:59] Speaker 03: We wanted them to come. [00:07:00] Speaker 03: We showed them the video. [00:07:01] Speaker 03: We had a meeting. [00:07:02] Speaker 03: I mean, anytime they want to come, and as I said, they've actually now, subsequent to our filing the brief in this court, they said, oh, after we pointed out their mistake that they thought they had already ruled on UltraCab, [00:07:13] Speaker 03: At that point, FRI sent a battalion of lawyers out to the railyard to actually inspect the technology, which is obviously what they should have done before they issued the letter ruling, because that's the approach they've consistently taken for decades. [00:07:25] Speaker 04: So you've been describing it as a letter ruling, and I guess there is an antecedent question about whether it's a ruling, and a ruling that has any binding legal force in the way that we normally require for something to be final agency action. [00:07:37] Speaker 04: So let's assume that it's the consummation of the agency's process. [00:07:41] Speaker 04: So for the first prong of the two-prong test, [00:07:43] Speaker 04: We say that it's gotten finality with respect to that. [00:07:46] Speaker 04: But on whether legal consequences flow from it, can you address that, given the predicate that, A, this agency, according to both parties' understanding, lacks rulemaking authority, and B, that our cases say that practical consequences that follow from a ruling won't suffice to constitute legal consequences for finality? [00:08:06] Speaker 03: Absolutely, Your Honor. [00:08:07] Speaker 03: I think there is a very tangible legal effect here. [00:08:11] Speaker 03: The FRA, to be sure, as we all agree, it does not have rulemaking authority under the statute. [00:08:16] Speaker 03: But what it does have, in fact, this is one of the things that distinguishes this case from the American tort reform case that Your Honor cited in your briefing order. [00:08:24] Speaker 03: But what the agency does have is enforcement authority against us and adjudicative authority against us. [00:08:30] Speaker 03: This is a situation [00:08:32] Speaker 03: where our regulator, the people who enforce these, who sanction us with penalties and who then subsequently adjudicate these proceedings, come to us with a ruling and they say, comply with our legal adjudication. [00:08:43] Speaker 05: Are they in fact required to do that? [00:08:45] Speaker 05: Is it binding upon them? [00:08:47] Speaker 05: The safety inspector, who would do this? [00:08:49] Speaker 05: Is this what you call a letter ruling? [00:08:51] Speaker 05: Is that binding on them, or do they have discretion when they come at it? [00:08:53] Speaker 03: The agency appears to treat it as binding, Your Honor. [00:08:56] Speaker 03: They have told us, and I'm confident my colleague Mr. Perry will agree with us, that it is the agency's position that railroads need to comply. [00:09:03] Speaker 03: In fact, one other point I would make going to your point, Judge Srinivasan, is we have already been sanctioned and penalized and issued notices of violation based on the legal interpretation in the letter rule. [00:09:14] Speaker 04: But what does that mean you've been issued? [00:09:17] Speaker 04: I don't know what that means. [00:09:18] Speaker 03: Yes, since the letter ruling. [00:09:19] Speaker 03: I don't know what that means. [00:09:21] Speaker 03: What that means is that earlier this year, in 2015, [00:09:25] Speaker 03: One of my clients, CSX, received a notice of violation from the FRA saying the violation is you didn't comply with the hours of service statute with regard to the UltraCat 2 self-test. [00:09:39] Speaker 03: But what does that do? [00:09:41] Speaker 04: What follows from that? [00:09:42] Speaker 03: What follows from that is that then we get subject to an internal agency proceeding where the chief counsel's office [00:09:50] Speaker 03: brings you in and they basically say, we are assessing $10,000 in penalties against you. [00:09:56] Speaker 03: Typically, the way this works in practice is that- Can they have assessed penalties? [00:10:01] Speaker 03: They have given us a notice of violation. [00:10:04] Speaker 03: The way this typically works is that [00:10:06] Speaker 03: There are often many violations over the course of the year. [00:10:09] Speaker 03: And so ultimately what happens is the railroads come in, they sit down with the chief's counsel's office, and they resolve, they negotiate a solution. [00:10:18] Speaker 04: So that's the compromise process. [00:10:20] Speaker 03: But that's typically how it works. [00:10:21] Speaker 04: But as I understand it. [00:10:22] Speaker 04: And correct me if this is a misunderstanding. [00:10:25] Speaker 04: As I understand it, they do issue this notice of some variety that says you're subject to a particular penalty. [00:10:31] Speaker 04: But that's not self-executing. [00:10:33] Speaker 04: And so the way that that penalty gets actually meted out is that there's an enforcement proceeding that comes. [00:10:39] Speaker 04: And you can, in that enforcement proceeding, they have the burden to show that you're in fact subject to the penalty. [00:10:45] Speaker 04: Now, of course there's this compromise process. [00:10:46] Speaker 04: I get that. [00:10:47] Speaker 04: That's a practical consequence. [00:10:48] Speaker 04: You could compromise it if you want to. [00:10:49] Speaker 04: But if you don't, [00:10:50] Speaker 04: you go to the enforcement proceeding. [00:10:52] Speaker 04: At least they have to go to the enforcement proceeding. [00:10:54] Speaker 04: And if they go to the enforcement proceeding, it's the burdens on them to prove that their understanding of the law is correct. [00:10:59] Speaker 03: But Judge Rivasan, I don't think this case is terribly different than the Supreme Court's decision in Sackett, where you had the EPA basically saying, we think you're in violation. [00:11:08] Speaker 03: And the agency in that case said, well, we're not sure this is final agency action, because nothing's going to happen until the enforcement proceeding. [00:11:14] Speaker 03: The Supreme Court said no. [00:11:16] Speaker 04: But I think the difference, I think, is that that agency has rulemaking authority. [00:11:20] Speaker 04: They could issue pronouncements with the force of law, whereas this agency doesn't. [00:11:24] Speaker 03: But when you say counsels with the force of law, we, as a legal matter, we are required to comply with what they are telling us or else we are subject to... No, I think you're not, because I think, as I understand it, sorry. [00:11:38] Speaker 04: You're required to comply with the law, for sure, but what they're telling you is the law is not the law until a court in an enforcement proceeding says it is. [00:11:45] Speaker 04: And they don't get chevron deference to their interpretation even. [00:11:49] Speaker 03: Well, but I think, I mean, my understanding is if an enforcement agency and also the initial adjudicators in this say, this is our interpretation of the law, we require you to comply or... Is that right? [00:12:01] Speaker 05: When the adjudicator is in that proceeding, will the adjudicator look at this letter of ruling and say, this is the law? [00:12:06] Speaker 03: That is what the FRA has told us. [00:12:09] Speaker 03: Well, it's the same entity that's doing it. [00:12:11] Speaker 03: The FRA's chief counsel's office is effectively the adjudicator in these proceedings. [00:12:17] Speaker 03: So it's a situation where I'm sorry. [00:12:19] Speaker 05: And they will consider that letter, what you call the letter ruling, they will consider that law. [00:12:23] Speaker 03: That is certainly what they've told us, and that is how they appear to be operating. [00:12:26] Speaker 03: I mean, it's possible my colleague will say that they're disregarding the law, but in practice, they've been enforcing it against us. [00:12:31] Speaker 04: How is it different from a prosecutor? [00:12:33] Speaker 04: So you have a prosecutor who says, here's my understanding of the law. [00:12:36] Speaker 04: I think you're violating the law. [00:12:37] Speaker 04: And then I have the superior authority in my office. [00:12:39] Speaker 04: Let's call him the adjudicator, or the adjudicator. [00:12:43] Speaker 04: And the adjudicator says, yeah, that's our determination of what the law is. [00:12:46] Speaker 04: And then you, as the regulated person, just say, OK, that's interesting. [00:12:50] Speaker 04: I don't care. [00:12:51] Speaker 04: And then they have to bring a case in order to cement that. [00:12:55] Speaker 03: But I think the fact that there may be enforcement proceedings on the back end doesn't suggest this is not final agency action. [00:13:00] Speaker 03: I think possibly one of the clearest authorities on this is the Seventh Circuit case on bank decisions cited in our briefs, the Atchison-Topeka case, which was brought up by the Supreme Court. [00:13:07] Speaker 04: I know that case, and you're right that that case says that, but then if you look at our decision in the National Association of Holden Durst case, I think it was cited in the order that we issued. [00:13:18] Speaker 04: So in that one, it was similar in that there was practical consequences that definitely followed. [00:13:22] Speaker 04: The agency had issued an interpretation that lacked binding force, but that agency actually could issue interpretations with binding force, it just didn't in that instance. [00:13:31] Speaker 04: And it had practical consequences that were asserted because the regulated entity said, look, you told us what you think this means. [00:13:37] Speaker 04: We have to do this or else we're subject to an enforcement proceeding. [00:13:40] Speaker 04: And in that enforcement proceeding, we're on the hook. [00:13:43] Speaker 04: And the court said, well, it's too bad. [00:13:45] Speaker 04: It's true that you're practically at risk, but that's just the nature of the beast. [00:13:51] Speaker 03: Well, I guess I'd make two points, Your Honor. [00:13:52] Speaker 03: The first is with regard to the Seventh Circuit point, which I think Your Honor acknowledged supports us. [00:13:57] Speaker 03: Again, same agency, same statute, same sort of letter ruling. [00:14:01] Speaker 03: And of course, that case went up to the Supreme Court, where the Court, as this Court knows, needs to ascertain its own jurisdiction and be satisfied that there's final agency action. [00:14:08] Speaker 03: And the Supreme Court affirmed the Seventh Circuit on the merits. [00:14:11] Speaker 04: I don't think they addressed this issue, is that right? [00:14:13] Speaker 03: That's true. [00:14:14] Speaker 01: You're saying by implication because they have to verify that. [00:14:18] Speaker 01: But let me ask you, I'm just really curious about what you said about how they came down after the letter rolling to take a look at the Ultra Cab 2 and get familiar with it. [00:14:27] Speaker 01: I mean it feels [00:14:28] Speaker 01: It feels non-final to me in the sense that are they doing that because they love trains, which I know they do. [00:14:34] Speaker 01: But surely they're doing that because they're in an ongoing process of educating themselves about the claims you're making and are open, perhaps, to persuasion once the rubber hits the road in enforcement. [00:14:47] Speaker 01: Are you saying that's not how you understand it? [00:14:50] Speaker 01: Well, that's not how we understand it, Your Honor. [00:14:52] Speaker 01: And here's another question going to that. [00:14:54] Speaker 01: Yes. [00:14:57] Speaker 01: How do they, when they've said, you know, you violated here, you're obligated, you're on the hook for $10,000, that's in the range for non-willful violation, right? [00:15:07] Speaker 01: I believe that's right. [00:15:08] Speaker 01: $25,000 or over for willful. [00:15:10] Speaker 01: So they're not really saying, like, in the face of a definitive ruling on our part that this is covered, you're nonetheless not complying. [00:15:19] Speaker 01: I mean, so there's... [00:15:21] Speaker 01: I mean, I think if they were taking the position that your noncompliance in the face of this letter bumped you up and turned into willful fines, that would be... [00:15:31] Speaker 01: more final in my view. [00:15:32] Speaker 03: Well, Your Honor, I think it's, regardless of whether we get sanctioned a mere $50,000 or $200 for a willful violation at the end of the day, it's a very substantial penalty. [00:15:43] Speaker 04: No, but I think Judge Pillers' point is that if it were bumped up to the more substantially serious penalty, that would indicate that the agency thinks it's bound, that you are bound by its letter ruling. [00:15:54] Speaker 04: Because you would have looked at the face of something that should regulate you and you would have said, I don't care. [00:15:59] Speaker 03: Well, but I believe, and again, my good friend Mr. Perry will correct me if I'm wrong, I believe it is FRA's position that this is their final and definitive ruling on this. [00:16:09] Speaker 03: They've never said anything to the commentary. [00:16:11] Speaker 05: As I read Home Builders, one of the key inquiries is whether the letter ruling cabins prosecutorial discretion. [00:16:18] Speaker 05: Does this? [00:16:19] Speaker 03: It certainly appears to, in the sense that it is a letter from the agencies, I believe they're top safety officials, saying that this particular function that's running the self-test on the UltraCab 2 is covered service, period. [00:16:36] Speaker 05: And when we are given that letter... I'm not interested in you right now, I'm interested in the prosecutorial discretion of the safety inspector. [00:16:45] Speaker 03: Well, again, I can't speak to whether the FRA used themselves as having prosecutorial discretion. [00:16:51] Speaker 03: But I would say this. [00:16:53] Speaker 03: From the view of the regulated party, Your Honor, with respect, it would be cold comfort. [00:16:57] Speaker 05: But it gets to the practical consequences versus legal consequences. [00:17:01] Speaker 05: And as you know, practical consequences doesn't end the inquiry. [00:17:05] Speaker 05: It's necessary, but it's not sufficient. [00:17:07] Speaker 05: We have to look to whether there are legal consequences. [00:17:09] Speaker 05: And I'm asking for your help in understanding how home builders [00:17:13] Speaker 05: informs our analysis here, because Home Builders tells us one of the factors we look to is whether there's a cabining of the prosecutorial discretion. [00:17:22] Speaker 05: If there is legal consequences that flow from it, you have more likely to have final agency action. [00:17:27] Speaker 05: So I'm asking for your help. [00:17:29] Speaker 03: I'm just not aware of anything that would give them prosecutorial discretion on this. [00:17:32] Speaker 03: They have always come to us as an absolute, Your Honor, comply or be sanctioned. [00:17:37] Speaker 01: Mr. Dupree, I have a much more basic question, which is, [00:17:40] Speaker 01: How is it that these employees would not otherwise be covered because the hours of service rule applies to railway employees? [00:17:49] Speaker 01: Who are these people that do these tests? [00:17:51] Speaker 03: Well, the answer is they are railroad employees, but who fall outside the hours of service provisions. [00:17:59] Speaker 03: The hours of service provisions are fairly narrowly drafted. [00:18:02] Speaker 03: They certainly do not encompass all railroad employees. [00:18:04] Speaker 03: If they did, frankly, we wouldn't be here. [00:18:06] Speaker 03: Where this letter ruling has bite, it applies as to those employees whose only thing they do during a 24-hour provision that's even arguably covered service is this four-minute self-test. [00:18:19] Speaker 03: That's it. [00:18:20] Speaker 01: So it's not the people who drive the trains who do it. [00:18:23] Speaker 01: Is it 21103 covers train employees? [00:18:28] Speaker 01: They're also not train employees. [00:18:31] Speaker 03: These are individuals who don't qualify for any of the possible covered service activities. [00:18:36] Speaker 03: If it were, say, a train engineer who's covered and he runs the self-test, we don't care about that. [00:18:41] Speaker 03: They don't care. [00:18:41] Speaker 03: This is already covered. [00:18:42] Speaker 01: Right. [00:18:43] Speaker 01: So who does that? [00:18:44] Speaker 01: I'm just curious. [00:18:44] Speaker 03: Who is doing it? [00:18:46] Speaker 03: It could be someone who's just [00:18:48] Speaker 03: works in the back office and monitors who's coming in and out of the building and he's got five minutes and he goes out and he runs the self-test. [00:18:57] Speaker 03: And then Ben, he automatically becomes a covered employee which brings down a whole host of regulatory requirements on us. [00:19:04] Speaker 01: So you don't have a sense of what the regular routine is, who these people are. [00:19:07] Speaker 03: It varies by railroad, Judge Piller. [00:19:09] Speaker 03: It varies by railroad. [00:19:10] Speaker 03: And again, in cases where it's someone who's clearly a covered employee, we have no gripe about this. [00:19:15] Speaker 03: This is people whose only arguably covered function is that four-minute self-test. [00:19:20] Speaker 03: And by virtue of that four-minute self-test, they get swept in to this entire regime. [00:19:25] Speaker 03: And into my rebuttal time, I hope I can preserve some. [00:19:28] Speaker 03: And if possible, I would love to address some of the merits very, very briefly, with the court's permission. [00:19:33] Speaker 05: Sure, go ahead. [00:19:34] Speaker 03: Thank you. [00:19:35] Speaker 03: We have put forward three reasons why we think this letter ruling should be vacated. [00:19:39] Speaker 03: The first is we believe it's contrary to the plain language of the statute, which does not apply to testing activities. [00:19:46] Speaker 03: We have alerted the court to a companion provision in the federal code in Title 49 in which Congress treats signal systems maintenance as distinct from signal systems testing, which tells us [00:20:00] Speaker 03: consistent both with common sense as well as common usage in the industry, that these are different functions. [00:20:05] Speaker 03: So we don't believe the agency had authority to sweep testing within the provisions of the statute. [00:20:11] Speaker 03: The second point is we believe that the agency has improperly abandoned its long-held narrowing construction. [00:20:17] Speaker 03: Within its letter ruling, the agency said that it believed its long-standing test was no longer necessary and that it was an on-again-off-again switch, where it simply declined to apply its long-standing test in this case. [00:20:29] Speaker 05: And then, wouldn't the most elegant way for us to reach the merits be relying on your argument about the SEPTA ruling? [00:20:36] Speaker 03: Yes. [00:20:36] Speaker 05: That we just haven't, we haven't yet seen the FRA give any reason decision-making about the Ultra-Cab 2, right? [00:20:44] Speaker 02: That's exactly what I'm talking about, Judge Griffin. [00:20:45] Speaker 05: Well, why did you put that third in your argument? [00:20:48] Speaker 02: That was your third argument. [00:20:49] Speaker 05: You gave two pages to him. [00:20:51] Speaker 03: Well, we wanted to save the best for last. [00:20:53] Speaker 03: I see. [00:20:53] Speaker 03: In all seriousness. [00:20:54] Speaker 03: The reason why we put it last is because, at least if the court meant more. [00:20:58] Speaker 05: If you're right about that, that doesn't color everything. [00:21:00] Speaker 05: We don't have anything. [00:21:02] Speaker 05: So the argument would go. [00:21:02] Speaker 05: I hope I don't mess up your argument for you. [00:21:04] Speaker 05: But so the argument would go, in light of that, everything else that we have in front of us has been skewed. [00:21:10] Speaker 05: We just don't know what the decision making has been. [00:21:13] Speaker 02: Completely agree, Judge Griffin. [00:21:14] Speaker 04: But I take it if you went on your statutory argument, then the agency wouldn't even have discretion. [00:21:18] Speaker 02: Well, that's where I was going to go next. [00:21:21] Speaker 04: That's the go big theory of your kids. [00:21:23] Speaker 03: If the court ruled on statutory grounds, that would preclude the agency from regulating testing per se. [00:21:28] Speaker 04: Can I ask you something about the [00:21:30] Speaker 04: the ground that's less beneficial to you, the one that Judge Griffith was alluding to. [00:21:36] Speaker 04: Is there some process, informal or formal, in the agency to write a follow-up letter or to communicate to them, look, you issued us a letter, it focuses on variety of testing A, and the letter purports to say that that's what we're dealing with here, but actually it's just to remind you it's variety of testing B. [00:21:53] Speaker 03: Well, I suppose nothing prevents us from sending a letter to the agency. [00:21:56] Speaker 03: And frankly, the agency, in its own discretion, we thought there was a possibility, once we pointed out in our briefs the error, that they might acknowledge the error and simply withdraw the letter. [00:22:06] Speaker 04: I'm just wondering if there's any pre-petition for review. [00:22:09] Speaker 04: Was there any back and forth about this? [00:22:11] Speaker 03: Here's the thing, Dr. Srinivasan. [00:22:12] Speaker 03: When we first got that letter, we [00:22:14] Speaker 03: We're not parties to the SEPTA proceeding. [00:22:16] Speaker 03: We didn't know. [00:22:17] Speaker 03: And so when we got the letter, we said, oh my goodness, they've already decided this ultra-cabin SEPTA proceeding. [00:22:23] Speaker 03: And then lo and behold, when we filed our petition for review, we got the administrative record. [00:22:27] Speaker 03: We looked at the SEPTA proceeding, and we kind of struck our head. [00:22:30] Speaker 03: And we said, oh my god, it's a different system. [00:22:31] Speaker 03: They got it completely wrong. [00:22:34] Speaker 03: So no, we didn't realize until we got the record that they had just completely gotten it wrong. [00:22:39] Speaker 03: And I think, I mean, look, this court obviously sees a lot of administrative law cases. [00:22:42] Speaker 03: I've been involved in a lot. [00:22:43] Speaker 03: This is pretty clear agency error. [00:22:45] Speaker 03: They thought they decided the question when, in fact, they hadn't. [00:22:48] Speaker 03: So I agree, Judge Griffith, the most elegant way for this court to resolve this case is simply to say it proceeded on the false assumption, had already decided it, vacated, and we go back. [00:22:58] Speaker 03: Thank you. [00:23:10] Speaker 05: Mr. Perry, could I ask you to address the threshold question first, whether this is final agency action? [00:23:16] Speaker 06: Yes, Your Honor. [00:23:17] Speaker 06: Christopher Perry of the Department of Transportation. [00:23:18] Speaker 06: I'm half of respondents. [00:23:20] Speaker 06: Your Honor, it's the agency's position that this letter ruling that's under review did constitute final and reviewable agency action, and that this matter is ripe for the Court's determination now. [00:23:30] Speaker 06: Looking at the court's traditional analysis under Bennett v. Spears in the first instance, as Judge Schwender-Lassen mentioned, this was the consummation of the agency's decision-making process. [00:23:41] Speaker 06: It was a letter ruling by the Senior Associate Administrator for Safety, who is the Chief Safety Officer of the Federal Railroad Administration. [00:23:49] Speaker 06: It's a senior competent official to make this kind of determination, someone who's very familiar with hours of service determinations, and there was no expectation when the agency put out its letter that there would be any further pronouncements on the issue, nor was there any obligation on the part of AAR to submit anything further. [00:24:06] Speaker 05: What about the consequences of it? [00:24:08] Speaker 05: How did it change the legal terrain? [00:24:09] Speaker 06: I think in the first instance, Your Honor, as Mr. Dupree mentioned, this letter ruling or the interpretation that came from the letter ruling is being relied upon by the agency as a basis of its enforcement. [00:24:21] Speaker 06: To go to the question that was posed in the court's order from Monday, it's not of any consequence that the agency doesn't have rulemaking authority with respect to the specific definition that comes under the statute. [00:24:31] Speaker 06: The agency undoubtedly has interpretive authority. [00:24:34] Speaker 06: It has the ability to interpret the meaning of that statute, and it has to be able to do that to carry out a meaningful enforcement regime. [00:24:40] Speaker 04: So that was equally true in Home Builders, the agency that issued the pronouncement. [00:24:44] Speaker 04: relied on, could have relied on it in a subsequent enforcement action. [00:24:49] Speaker 06: Yeah. [00:24:49] Speaker 06: I think one thing that makes Home Builders distinct, Your Honor, is in that case, it was very clear from what the agency was doing that it was a tentative action and it was actually styled as a recommendation. [00:24:59] Speaker 06: But I don't think in this case that it ultimately matters, particularly taking account of what the Supreme Court has said in Abbott Labs, which involves the very related, substantially overlapping question of ripeness. [00:25:10] Speaker 06: It has to be looked at from the perspective of the practical consequences. [00:25:14] Speaker 06: And in this instance, with this letter ruling, the railroads are every day under an obligation to schedule their operations and to make labor arrangements that conform to this letter. [00:25:25] Speaker 06: This is done from the agency's perspective. [00:25:27] Speaker 06: There's no need to await an enforcement proceeding for this to come up in a concrete case, because the agency's not going to revisit in that enforcement proceeding the discrete question that it decided in this letter. [00:25:37] Speaker 04: And in that enforcement proceeding, which you would have to bring in order to activate any penalty, right? [00:25:42] Speaker 06: Well, to be clear again, Your Honor, to explain how the enforcement works, as Mr. Dupree mentioned, there is a compromise process that ends up happening at the end of the fiscal year covering the variety of different types of safety violations that the railroad is being looked at for, not just hours of service, including hours of service, but going beyond that. [00:25:58] Speaker 06: And my understanding from speaking with the agency is that compromise process resolves things all the time. [00:26:05] Speaker 04: Sure. [00:26:05] Speaker 04: Like plea bargaining does. [00:26:06] Speaker 01: It's under the shadow of the law. [00:26:08] Speaker 01: It's going to matter what the law is. [00:26:10] Speaker 01: And it seems like a very peculiar position for the agency to be taking that is willing to stake its interpretation on this extremely thin record. [00:26:20] Speaker 01: I mean, what can you point to that shows [00:26:23] Speaker 01: that this, uh, ultra cab to test procedure actually involves skill, that it actually affects safety. [00:26:32] Speaker 06: Well, it certainly affects safety, Your Honor, and that's clear with any signal system. [00:26:38] Speaker 01: Well, when they say it doesn't actually, because if it's not done properly, I mean, if it's not done properly, it's fail safe. [00:26:46] Speaker 01: It's going to shut down. [00:26:47] Speaker 01: The train will not move. [00:26:48] Speaker 06: We disagree with that, Your Honor, and that's a determination over which [00:26:51] Speaker 06: the agency's expertise and experience. [00:26:53] Speaker 01: You don't have a record on that in this letter. [00:26:58] Speaker 01: So I'm really surprised that you want to stake your regulation on this record. [00:27:02] Speaker 06: We do, Your Honor, because we feel that we have sufficient information from which to make that determination. [00:27:06] Speaker 06: And the agency knows how this system operates. [00:27:09] Speaker 06: It received this additional evidence from AAR now. [00:27:11] Speaker 06: But point being, not just how this system operates, [00:27:14] Speaker 06: As a matter of law, as a matter of the agency's regulations, the system can't be fail safe because the agency doesn't simply accept a computer printout from a system like the UltraCAD 2 to suffice for a test. [00:27:26] Speaker 01: So whose burden is it? [00:27:28] Speaker 01: So I was asking Mr. Dupree, I'd ask you the same question. [00:27:32] Speaker 01: Do you think it's their burden to show that this does not involve the kinds of safety considerations and high level of skill [00:27:41] Speaker 01: that your interpretation adverts to, or is it your burden to show that your interpretation applies to this situation? [00:27:48] Speaker 06: I believe it's their burden, Your Honor, and that's particularly the case in this context, because what AAR was asking the agency to do was to depart from the general principle that the agency's been applying since 1977. [00:27:59] Speaker 04: Well, it's their burden in the context of what? [00:28:01] Speaker 04: Are we talking about an enforcement action? [00:28:03] Speaker 06: No, Your Honor, not an enforcement action. [00:28:05] Speaker 01: But the sort of seeking a safe harbor in advance kind of thing, which they were doing. [00:28:09] Speaker 06: Correct, Your Honor. [00:28:09] Speaker 06: In other words, when, as in this case, AAR comes back to the agency and says, we want an interpretation that's effectively going to provide us with relief, regulatory relief, and that will get us off the hook, will save us money, will allow us to schedule operations in a different kind of way, the question becomes, why should the agency depart from the way it's been treating this issue forever? [00:28:29] Speaker 06: What the agency said in a federal registry notice, it's Joint Appendix 1 going back to 1977, we're not going to carve out testing from the statute because in the ordinary course we think that that is critical to system maintenance. [00:28:40] Speaker 06: And that's what the agency did here. [00:28:42] Speaker 06: It just so happens that the agency made it explicit with respect to a new form of technology. [00:28:45] Speaker 04: Does the agency view itself bound by the letter? [00:28:49] Speaker 06: Yes, Your Honor, in the sense that the agency has no expectation that it's going to revisit the question that the letter was based upon, at least in any foreseeable circumstances. [00:28:58] Speaker 06: So to make it more clear, if we're going to an enforcement proceeding later on this year, let's say, if there's a violation that depends upon the specific interpretation of the statute, the agency's not going to revisit this question. [00:29:10] Speaker 01: What about the willfulness question? [00:29:15] Speaker 01: They say on page two of their brief, without citation, agency officials have specifically warned that freight railroads must comply with the August 18 letter ruling or face sanctions for willful violations of the hours of service laws. [00:29:27] Speaker 01: Is that your position? [00:29:29] Speaker 06: I don't know when that specifically happened. [00:29:31] Speaker 06: I can't say that the agency does expect the railroads to comply with that. [00:29:36] Speaker 06: Now, whether or not the agency would call that a willful violation to which additional consequences attach, I can't say that in this context right now. [00:29:43] Speaker 06: But the agency does expect that the railroads will comply with this. [00:29:47] Speaker 04: Does the agency consider it to be willful when you issue a letter that doesn't have the force of law, but you issue a letter and a regulated entity says, that's interesting, that's your interpretation. [00:29:57] Speaker 04: That's not my interpretation. [00:29:58] Speaker 04: I'm willing to stake my reputation on an enforcement proceeding. [00:30:02] Speaker 04: And then would you say, well, that's willful because you disagreed with us what we said in the letter, which by our own estimation doesn't have the force of law. [00:30:09] Speaker 06: I think the agency has the ability to do that, Your Honor, but I don't know that the agency necessarily has to. [00:30:15] Speaker 06: And I also don't know that it's necessarily a legal consequence of the finality determination that it wouldn't. [00:30:20] Speaker 06: I think it has the ability to do it. [00:30:21] Speaker 06: I think the more important point, again, looking at it from a practical consideration point of view is the affected community, the regulated community, has been, is, and will continue to be on the hook for the interpretation that's important. [00:30:34] Speaker 05: I just want to make sure that I'm perfectly clear here. [00:30:36] Speaker 05: So you're saying in the enforcement proceeding, [00:30:39] Speaker 05: the letter ruling will be the law that will be used to indicate the dispute. [00:30:44] Speaker 04: Yes, Your Honor. [00:30:45] Speaker 06: Again, for the foreseeable future. [00:30:46] Speaker 04: Well, it can't be the law. [00:30:48] Speaker 04: It's not the law. [00:30:50] Speaker 04: What you mean is, maybe I misunderstood the question, but it seems to me there's two different questions. [00:30:57] Speaker 04: One is whether you're binding yourself to carry forward that same interpretation, which that's a question that I think you were asked. [00:31:05] Speaker 04: But another question is, [00:31:07] Speaker 04: does that agency constitute law? [00:31:08] Speaker 04: Does that letter constitute law in the proceeding? [00:31:10] Speaker 04: I don't understand how that could possibly constitute law in the proceeding. [00:31:13] Speaker 06: Well, it constitutes the agency's interpretation of the law that it's applying for purposes of carrying out the enforcement regime. [00:31:19] Speaker 01: If it's agency enforcement, it would be the law for purposes of [00:31:23] Speaker 05: It'll be the standard by which the adjudicator will resolve the dispute. [00:31:27] Speaker 06: Correct. [00:31:28] Speaker 06: With the understanding, Your Honor, that's the case for the foreseeable future. [00:31:31] Speaker 06: A party could come back and seek a different determination from the agency. [00:31:33] Speaker 06: We just don't have any basis to think that that's what the agency's going to do unless there was some real change. [00:31:37] Speaker 04: But when the adjudicator resolves the dispute, what is that? [00:31:44] Speaker 04: Does anything happen? [00:31:46] Speaker 04: Is there anything that follows from the adjudication of this? [00:31:50] Speaker 06: Again, Your Honor, to answer your question, because of the compromise process, it becomes very difficult to even talk about it in terms of an adjudication as we would typically think about it in agency practice. [00:31:59] Speaker 06: Because when the railroads actually pay to compromise, [00:32:03] Speaker 06: They're not making any admission that they actually broke the law or anything in that event. [00:32:07] Speaker 06: And in my experience and speaking with the agency about it, it's been at least 20 years since there was any further proceeding based upon a disagreement that came out of the compromise process. [00:32:16] Speaker 04: So practically people compromise in the same way that practically parties sell. [00:32:20] Speaker 04: Correct. [00:32:20] Speaker 04: Correct. [00:32:21] Speaker 06: If I may, Your Honor, with my remaining time, I do want to address some of the points on the merits, if I can. [00:32:27] Speaker 06: Turning first to AAR's broad legal argument with respect to testing falling under the definition of maintaining, installing, and repairing signal systems. [00:32:35] Speaker 06: In the first instance, the Court doesn't need to reach that argument on the merits, and it shouldn't reach that argument on the merits, because that was not an issue that was presented to the agency in the proceedings below. [00:32:45] Speaker 06: In fact, that has been the way the agency has looked at that for 40 years. [00:32:49] Speaker 06: And if the court were to change that now, that would be a much bigger issue than anything else that we're dealing with in this case. [00:32:55] Speaker 06: All that AAR did when it requested a meeting with the agency and all that it did in presenting its PowerPoint presentation and its video was to say, we want the agency to look at its interpretation as it applies to this new form of technology. [00:33:08] Speaker 06: And of course the last technical bulletin which is sort of the best source of how the agency views the issue goes back to 1999-2000 when the form of technology that we're looking at here really wasn't in use. [00:33:20] Speaker 01: I know this is counterfactual, but imagine that you have a full record that established that the Ultracab 2 could be operated by a four-year-old, that all you had to do was go in and push a button, and that, in fact, it really was fail-safe. [00:33:37] Speaker 01: If anything was not done properly, that completely verified the safety of [00:33:42] Speaker 01: The engine, it wouldn't be able to go anywhere. [00:33:46] Speaker 01: In that situation, would it be covered by the Office of Service Law? [00:33:51] Speaker 06: Your Honor, it depends because it goes back to the question of whether or not a human being is able to certify that the test was done correctly. [00:33:59] Speaker 06: And that's what this comes down to. [00:34:01] Speaker 01: Let's say the test itself can so certify, correct, incorrect. [00:34:05] Speaker 01: And so all you have to do is when the engineer comes on the train to actually, I don't know if it is the engineer who drives the train, but the person who drives the train gets in the RAC and it'll just say, test performed or not. [00:34:18] Speaker 01: performed or not covered? [00:34:23] Speaker 06: It depends upon whether or not the person who's pushing the button is the person who is signing the statement required by agency regulation to say that a test has been properly performed, meaning that a test of the system has occurred and it ensures that all of the different safety requirements that are in the CFRs are met. [00:34:42] Speaker 06: So if one person just pushes a button and does nothing more, that's one thing. [00:34:45] Speaker 06: What the agency requires is for someone to actually be watching the test as it's done and using their own independent judgment and expertise to make sure that it's done correctly. [00:34:54] Speaker 01: So it may be that as technology develops, it will be that the driver of the engine can jump in the cab, see that it's done, sign that form and [00:35:03] Speaker 06: It is possible someday, Your Honor, depending upon a number of different changes with respect to technology, with respect to the way this operates and how the agency understands those forms of technology. [00:35:13] Speaker 06: As always, we're trying to catch up with the technology as it develops and figure out what we do with it within the regulatory regime. [00:35:19] Speaker 01: Maybe your opponents think that day is already here. [00:35:21] Speaker 06: And we disagree, Your Honor, and we believe that it's our ability and really our prominence to be able to make that determination as a matter of expertise. [00:35:29] Speaker 06: As just one example that was mentioned in the letter with respect to calibration we mentioned again in our brief, there are speed restrictions that apply along different areas of a railroad that's in coded cab signal territory. [00:35:40] Speaker 06: In other words, those portions of the railroad where there is electronic circuitry that is on the rails. [00:35:44] Speaker 01: Right, and they say that's all taken into account. [00:35:46] Speaker 06: Right. [00:35:46] Speaker 01: Tests for every place. [00:35:47] Speaker 06: Right. [00:35:47] Speaker 06: We disagree because even if this test is going to be run for all those different territories, the human being who's testing it must be watching to make sure that the computer is doing the test according to the actual correct parameters that are required by law. [00:36:02] Speaker 06: So it's not a self-test, it can't be a self-test. [00:36:05] Speaker 06: There has to be a human being who is actually making sure that the test is being done correctly. [00:36:11] Speaker 06: Furthermore, Your Honor, it's not just that it's overseen in that way. [00:36:13] Speaker 06: The person who's doing the test is not merely clicking a button, but is actually taking other steps that are like hardware steps, not like clicking on a mouse to install computer software. [00:36:22] Speaker 06: In this instance, they're actually talking about manipulating locomotive controls, including brakes. [00:36:27] Speaker 05: How do you respond to your opponent's argument that your decision here was based on the wrong test, that you've never tested UltraCab 2? [00:36:35] Speaker 06: Well, Your Honor, going back to the SEPTA proceeding, the agency in its letter in this instance said that the SEPTA proceeding involved an UltraCab 2. [00:36:43] Speaker 06: Now that's essentially a factual determination. [00:36:46] Speaker 06: It's correct that in the record in the SEPTA proceeding, which consists of nothing more than SEPTA's request letter and the agency's response, that doesn't specifically mention the Ultra-Cab 2. [00:36:56] Speaker 06: I think it mentions Harmon, my understanding from the railroad experts is. [00:36:59] Speaker 06: Harmon makes Ultra-Cab 2 and other systems like it. [00:37:02] Speaker 06: But I think at the end of the day, it doesn't make a difference, Your Honor, because as the agency said in its letter, it didn't just exactly look at it and say, oh, this is precisely the same. [00:37:10] Speaker 06: We're bound to do exactly the same thing. [00:37:12] Speaker 06: The agency noted that it had taken consideration of additional evidence and information that had been provided by AAR. [00:37:18] Speaker 06: And it said to the extent that that differed from what it had already received in the sector proceeding, that distinction didn't matter. [00:37:24] Speaker 04: Yeah, but that's because, I mean, that argument makes perfect sense if the position of the agency were, we tested this thing once. [00:37:31] Speaker 04: You're giving us some new arguments as to why the thing we already tested, we reached the wrong result as to that. [00:37:37] Speaker 04: And you say, well, the new stuff doesn't convince us that our test of that thing was wrong. [00:37:41] Speaker 04: It's entirely different to say, we tested a different thing. [00:37:44] Speaker 04: but actually in our letter ruling, we're saying that we tested the same thing. [00:37:49] Speaker 04: That seems like an entirely different set of circumstances. [00:37:52] Speaker 06: Well, I think, Your Honor, it's sufficient that in this case, the agency looked at the SEPTA proceeding, which is the closest thing that it had before it, where the request for relief and the information that was provided by both parties were so virtually the same with respect to the legal issues that were presented and also the factual issues. [00:38:07] Speaker 06: The agency could additionally depend upon its own expertise and its experience out in the field looking at these systems. [00:38:12] Speaker 06: It's not the same. [00:38:13] Speaker 04: It definitely could. [00:38:14] Speaker 04: It definitely could. [00:38:15] Speaker 04: But the question is what did it do? [00:38:17] Speaker 04: And if you look at this letter, what this letter does is it says, we already tested this. [00:38:20] Speaker 04: And unless you're taking the position, and it sounded like you were starting to take it, that in fact the SEPTA proceeding did involve a test of the UltraCab 2. [00:38:28] Speaker 04: That just seems to me to be a different issue. [00:38:30] Speaker 04: One reading of the letter is that it says, we tested UltraCab 2 once already. [00:38:36] Speaker 04: We reached a determination. [00:38:38] Speaker 04: Now, if that's the reading of the letter that's on the table, are you taking the position that the letter can be sustained? [00:38:45] Speaker 06: Well, yes, Your Honor. [00:38:46] Speaker 06: My position is the letter can be sustained either way, and here's the reason. [00:38:49] Speaker 06: The letter that the agency put out here said that the SEPTA proceeding involved the ULTRACAP-2. [00:38:55] Speaker 06: If you go back to the record in the SEPTA proceeding, which only again has two documents in it, it does not specifically mention the ULTRACAP-2. [00:39:01] Speaker 04: Did the SEPTA proceeding involve the ULTRACAP-2? [00:39:04] Speaker 06: My understanding is, yes, it probably did, but I cannot completely tell it to the court because it's not in that record. [00:39:12] Speaker 06: What I do know is that the Harmon system that was being looked at... So we don't know. [00:39:15] Speaker 04: So the answer is, you don't know whether the subject proceeding dealt with the UltraCat 2. [00:39:20] Speaker 04: But you would tell us that we should affirm a letter on the basis that the agency said it involved the UltraCat 2, even though as you stand here today, you're telling us you don't know if it did. [00:39:29] Speaker 06: But, Your Honor, the other point, of course, is that we have to look at the record as it's written. [00:39:33] Speaker 06: And I have to say, if the record as it's written doesn't make specific mention of the UltraCab 2, so that's what we need to look at. [00:39:37] Speaker 01: Is it not? [00:39:38] Speaker 01: So I was a little confused about that. [00:39:39] Speaker 01: Is the US... That's the UltraCab 2 cab signal system. [00:39:45] Speaker 01: Yeah, I thought that was UltraCab 2. [00:39:47] Speaker 01: It is. [00:39:48] Speaker 01: So the letter, this is JA-70, talks about that in a prior request for a waiver of the hours of service law with respect to, [00:39:59] Speaker 01: the U.S. [00:40:01] Speaker 01: to C.S.S. [00:40:03] Speaker 01: docket number and it's referring to the septic case, right? [00:40:06] Speaker 01: Found that. [00:40:06] Speaker 01: So this letter does assert that the septa situation involved the ultra cap too. [00:40:13] Speaker 01: And you're saying standing here today, you actually don't have any reason to doubt that. [00:40:17] Speaker 01: You don't have reason to verify it, but you also don't have reason to verify it. [00:40:20] Speaker 06: That's exactly correct, Your Honor. [00:40:21] Speaker 06: I want to be clear. [00:40:22] Speaker 06: It's my best understanding from speaking with the folks who deal with this issue day in and day out at FRA that they believe that the separate proceeding did, in fact, involve an Ultra-Cab 2. [00:40:30] Speaker 06: And Harmon, which is mentioned in the other, makes both. [00:40:33] Speaker 06: The point that I'm trying to make is it's our view that that doesn't actually matter because the agency made clear that it wasn't just making its determination on that basis. [00:40:43] Speaker 06: It took account of it. [00:40:44] Speaker 04: But it was at least making its determination apart on that basis. [00:40:46] Speaker 04: But it was making once you do that, are we in the land of wondering whether it's independent? [00:40:51] Speaker 04: The ground that's left is independently sufficient to sustain the agency determination. [00:40:55] Speaker 06: I don't even think the court needs to get to that, Your Honor. [00:40:57] Speaker 06: Even if it did, I think there would be plenty of independent basis. [00:41:00] Speaker 06: But in this instance, Your Honor, the agency made specific note of the fact that the technology that we're talking about here [00:41:08] Speaker 06: The agency took account of all the evidence that it got, and it made all relevant comparisons that it need to make between what it got in this proceeding and the information that it got in the other proceeding. [00:41:18] Speaker 04: So to sort of say in this instance, you know, well, the agency- Right, but assume that what it got, what it was doing in the other proceeding is testing the same thing. [00:41:25] Speaker 04: And it turns out that at least we don't know that it was. [00:41:27] Speaker 06: Well, Governor, again, going back to Judge Coates' point, I'm trying to be very clear. [00:41:31] Speaker 06: There is nothing in the SEPTA proceeding that especially mentions or specifically mentions the UltraCab 2. [00:41:36] Speaker 04: Right. [00:41:36] Speaker 06: OK. [00:41:36] Speaker 06: My understanding from speaking with our enforcement folks is the other proceeding did mention the UltraCab 2. [00:41:41] Speaker 06: I can't verify it on the basis of the record that existed there. [00:41:45] Speaker 01: OK. [00:41:45] Speaker 01: And your overall position has to be it's their burden. [00:41:48] Speaker 01: Indeed. [00:41:49] Speaker 01: So to the extent that the record is limited, to the extent that it's unclear what it shows, [00:41:53] Speaker 01: they haven't jumped high enough to get a safe harbor from you in advance of whatever enforcement actions might proceed. [00:42:02] Speaker 01: What's curious to me is that you're also taking the position that this is definitive, even though you're going out and looking at the Ultra-Cav-2 on site, and it may be that when you get more information in the context of, as I gather, the negotiation, [00:42:18] Speaker 01: further interactions are going to be with A, they may change your mind, but you're saying no. [00:42:25] Speaker 06: Correct. [00:42:26] Speaker 06: Let me first address the point with respect to the site visit. [00:42:29] Speaker 06: The site visit occurred after the petition here was filed. [00:42:33] Speaker 06: And the purpose of that site visit was not to re-adjudicate the issue or was not to revisit the issue. [00:42:40] Speaker 06: The purpose, really, as I understood it, and it was really for my benefit, was to give me a concrete illustration of what this is and how it works. [00:42:48] Speaker 06: Because I had no idea what this was about. [00:42:49] Speaker 06: It was only about the issues. [00:42:51] Speaker 06: Yes, Your Honor. [00:42:53] Speaker 06: At least that's the way I was viewing it. [00:42:54] Speaker 06: It certainly wasn't going to make any further determination or change the view in this case. [00:42:58] Speaker 06: didn't know anything about these systems before this came into play, didn't know anything about the letter. [00:43:02] Speaker 06: It's helpful, but the agency had no further process that it was going to undertake with respect to going out and doing that kind of visit. [00:43:09] Speaker 06: It got delayed for different reasons, scheduling reasons, and so forth. [00:43:12] Speaker 06: It's true that it ended up occurring, I believe, after AAR's opening brief was filed, but there was no particular reason for withholding on that basis. [00:43:19] Speaker 06: I think it was requested earlier. [00:43:21] Speaker 06: I don't want to make too much of the site visit because it was really, as I understand it, and it was really for my benefit among some of the other folks for illustrative purposes. [00:43:29] Speaker 06: But the agency, again, is not going back [00:43:31] Speaker 06: to make a different determination in the foreseeable future on any of the issues that are raised in this letter. [00:43:37] Speaker 06: And if there were a future enforcement proceeding, there may be other factual issues that could get looked at that would go to whether or not an hours of service violation occurs, but not as to the specific issue that was addressed in this letter. [00:43:50] Speaker 06: There's no further questions. [00:43:51] Speaker 06: Thank you very much. [00:44:00] Speaker 03: Thank you, Your Honor. [00:44:01] Speaker 03: Just briefly, I think one thing all of us can agree on is that this two-page letter is not a model of agency reasoning. [00:44:06] Speaker 03: This is an immensely important issue for the industry, and we are in a situation where I think Mr. Perry, to his credit, conceded that he simply can't say whether the agency was right when they claimed they had already adjudicated this question. [00:44:19] Speaker 03: Obviously, the agency has the burden of coming up with substantial evidence supporting its reasoning, and when their lawyer stands before this court and admits there's nothing in the record that suggests the SEPTA proceeding concerned UltraCab, Mr. Perry said the record doesn't specifically mention UltraCab. [00:44:35] Speaker 03: I mean, translated, it doesn't mention UltraCab. [00:44:37] Speaker 03: There's no mention of it at all. [00:44:39] Speaker 03: And the fact that even today, having had the benefit of months and months and months to talk with his clients, talk to the people who did SEPTA, he still, to this day, cannot say definitively whether or not it involved UltraCab, I think is sufficient for this Court to vacate the ruling. [00:44:54] Speaker 03: Judge Piller, your point about the agency's thin rulemaking record, that's absolutely right. [00:44:58] Speaker 03: Mr. Perry spoke about the agency's expertise and judgment and all of that, but none of that is evident in this letter. [00:45:04] Speaker 03: This court obviously reviews the sufficiency of the agency's action based on the record that the agency created, and the record, the reasoning set forth in the agency's ruling, none of which is present here. [00:45:15] Speaker 03: We believe that this court should vacate the letter as to the point about finality. [00:45:19] Speaker 03: I think Mr. Perry said it well, that the agency views this as binding, that there's no going back. [00:45:25] Speaker 03: This is their final determination. [00:45:27] Speaker 03: We've already been subject to sanctions proceedings. [00:45:30] Speaker 03: No one's ever actually litigated an enforcement action in more than 20 years. [00:45:33] Speaker 03: And of course, the Seventh Circuit has already held that an FRA letter ruling construing the hours of service statute is final agency action, affirmed on the merits by the Supreme Court. [00:45:43] Speaker 03: So for all those reasons, Your Honor, we believe this letter is deficient. [00:45:46] Speaker 03: The agency should be sent back to do it over. [00:45:49] Speaker 03: And we ask that this court vacate the letter ruling. [00:45:52] Speaker 03: If there are no further questions. [00:45:53] Speaker 05: Thank you very much. [00:45:54] Speaker 05: The case is submitted.