WPCO 9W :wX<8)vUSp^:9W U>ߴP\}&O#䒆#uќSɜ-%)_E%ŠiugnH:壎ƴ4-@̿iZnk~y^r[~<h›2-nb]B=ִrȐp.iͤF#̔M r|Dpֈb_aTLF1<$ Tdwdˑ8?b5 (ȵyv_R6E.A"~\vw?ay@~/Tj b3bzNqlXyujy>T5:P+_\n j1"~(XU ND#MZrPƇ3.pZ-t {cI 5 V+J Aԣ};*4+OJU zY~N}6W*@(~1XQ@CjBL0#U Na % 0:U FE5N7^ 9wE4I]l mnU48U40 0UBb U> 0D[  U2  BhfaMcYW"Gj',3/3/ N3m? BRERERERE oEoE{H=L]ELHP LaserJet 5/5M - Standard,,,,0(A Z6Times New Roman Regular($USUS.,<  9Z+.Courier New Regular"x1s L=1y File3|xU<4 9Z+ Courier New <\( 9Z+Courier (wG2$ !USUS.,    =add=  x  0  <6X9`(*Courier 12pt10cpi- -\( 9Z+&Courier Regular(#$  0    $USUS.,  =9dd=     2    _=9dd=Ӏ  XDX InM#XDXXXD #XDXXXDay2002,BAR'ssubsidiary,VanBurenBridgeCompany  (VBBC),filedforvoluntarybankruptcyunderChapter11ofthe  BankruptcyCode.ThecourtappointedHowardasthetrusteeforits p proceedingsaswell.#XDXXXDp# # XXD*#)bF  ZCG Times   $USUS.,  =9dd=     1    _XDX =9dd=ӀXDXXXDThepartiesandtheSTBagreethattheSTBdoesnothave  regulatoryauthorityoverthisagreement.# XXD##  *#   $USUS.,  =9dd=     6    _=9dd=Ӏ  XDX Thelanguageofsection1170refersonlyto"abandonments."  AsCNpointsout,an"abandonment"isdistinctfroma  "discontinuance."See49U.S.C.10903(d). Despitethis,the p legislativehistorystatesthat"[t]hesubchapterprovidesthatthe F courtratherthanthe[STB]hastheauthoritytoauthorize l abandonmentsordiscontinuancesofrailservice."S.Rep.No.95 B 989,at12(1978),reprintedin1978U.S.C.C.A.N.5787,5798   (emphasisadded).#XDXXXD #XDXXXDԀThiscaseinvolvestheabandonmentofthe   WaterlooeasementandthediscontinuanceofCN'strackage z  agreement.Bothpartieshavetakentheterm"abandonment"in P   section1170tocoverbothabandonmentanddiscontinuance.We & v  pursueitnofurther.#XDXXXD## XXD*# 8 $USUS.,  =9dd=     12    _XDX d=9dd=ӀTXDXXXDhetrusteesaysthatitsearlierthreeagreementswithCN,  reachedinlateMarch2001,beforetheDecember2001bankruptcy,  haveproventobebaddealsforBAR(nowMM&A).Thetrusteeargues \ thatthefeesitispaidbyCNarenotasprofitableasBARwould 2 likeandsoBARhasaninterestinforcingCNtoabandonits X rights.Thisisalsothesortof"cashdrain"referredtointhe . legislativehistory,hesays. However,asFraserpointsout,the   trusteedoesnotsayBARislosingmoneyfromitsoperationunder   thehaulageagreement.HesaysonlythatBARcanmakemoremoney `  ifCNhadnorights.BAR(nowMM&A)essentiallywouldhavea 6   monopolyifCNwereoustedanditcouldexercisemonopolypricing.# XXD#d#  2# TABLE A  $USUS.,  =9dd=     3    _=9dd=Ӏ  XDX Unlikethedistrictcourt,wedonotrelyonthelater  enacted45U.S.C.904(a)(1)i#XDXXXD #XDXXXDndeterminingthemeaningof11  U.S.C.1170.#XDXXXD## XXD*#    $USUS.,  =9dd=     11    _XDX =9dd=ӀXDXXXDUnder11U.S.C.1166,aftertheSTBgrantsthedebtorthe  righttogoforwardwiththeraillineorservice,thebankruptcy  courtmustalsoapprovetheplaniftheseactionsrequire"the \ expenditure...ofmoneyfromtheestate."11U.S.C.1166(1).# XXD#Ԁ 2 Ѐ#  +# O $USUS.,  =9dd=     4    _  =9dd=ӀXDX FraserpointsoutthatevenifBARoustsCNandbringsin  morerevenuetoMM&A,somehowMM&Ahastofinancethefivemillion  dollarpaymenttoBAR.ThatneedtofinancecouldweakenMM&A's p financialcondition,raisingtheprospectthatMM&Awouldsuffer F thesamefateasBARandthattheMadawaskamillwouldbeleftwith l norailservice.#XDXXXD# # XXD+#  $USUS.,  =9dd=     14    _=9dd=Ӏ  XDX Inthealternative,thetrustee,inhisreplybriefandat  oralargument,arguedanarrowerinterpretationofthestatute.  Thetrusteesinterpretationwouldlimitthebankruptcycourt's p reach,butstillallowthiscourttograntthereliefthatthe F trusteeseeks.Heproposesallowingthebankruptcycourtauthority l overabandonmentsofanondebtor'sraillinesandtrackagerights B insituationsinwhichthedebtorhasapropertyorcontract   interestinthenondebtor'slinesortrackagerights.    Significantly,theinterpretationresolvesnoneoftheproblems t  discussedinthisopinion,andwerejectit.#XDXXXD ## XXD+# = $USUS.,  =9dd=     5    _=9dd=Ӏ  XDX Thebankruptcycourtdoesnotspecificallyaddresstheissue  ofstanding.Thebankruptcycourtcommentedthatthiswas  essentiallya"transportationdispute"betweenCNandMM&A,butd p  drecognizedthetrustee'sdesiretoeffectaplanandtheimportance  ofthefivemilliondollarstotheestate.Also,thebankruptcy  courtincluded,upontherequestofCN,aprovisioninitsOctober \ 9,2002orderapprovingthesaleofBAR'sestateassetstoMM&A 2 thatexpresslyreserved"allrightsandobligationsoftheparties X totheCNJunctionSettlementAgreement,theCNTrackageRights . Agreement,andtheWaterlooEasement...subjecttofurther   rulingbythisCourtoranyothercourtofcompetentjurisdiction."   # XXD*#XDX     ' Turner0Turner .     $USUS.,  =9dd=     10    _XDX X |XXXD=9dd=Ӏ#XDXXX |#XDXXXDThetrusteealsoarguesthatInre#XDXXXDm#XDXXXDNewYork,Susquehanna&  W.R.R.Co.,160F.2d29,32(3dCir.1946),illuminatesthe  meaningof11U.S.C.1170. Susquehannapresentsafactual x scenariosimilartotheonebeforeus,butthesimilaritiesstop N there.Susquehannawasdecidedbeforethepassageofsection1170, $t anditdidnotsquarelyaddressthequestionbeforeustoday.# XXD##  # $USUS.,  =9dd=     7    _=9dd=Ӏ  XDX Thestandardsusedbythebankruptcycourttodetermine  whethertopermitabandonmentundersection1170arenotidentical  tothoseusedbytheSTBundersection10903.Thecourtmustfind p thattheabandonmentis(1)"inthebestinterestoftheestate"or F "essentialtotheformulationofaplan"and(2)"consistentwith l thepublicinterest."11U.S.C.1170(a)(1)(2);seealso11 B U.S.C.1165("Inapplyingsection[]...1170...thecourt   andthetrusteeshallconsiderthepublicinterestinadditionto   theinterestsofthedebtor,creditors,andequitysecurity t  holders.").dTheSTB'sadvisoryreportissupposedtorepresentthe J   publicinterestwhilethetrusteeandvariouscreditorsrepresent  p  whatisinthebestinterestofthedebtoranditscreditors.S.  F  Rep.No.95989,at12(1978),reprintedin1978U.S.C.C.A.N.5787,   5798#XDXXXD #XDXXXD.d"Thecourtwillbalancethevariousinterestsandmakean   appropriatedecision."#XDXXXD#XDXXXDH.Rep.No.95595,at424(1978), ~  reprintedin1978U.S.C.C.A.N.5963,#XDXXXD#XDXXXD6380. T    dTheSTBmaypermitabandonmentofraillinesordiscontinuance 0  ofoperations"onlyifthe[STB]findsthatthepresentorfuture V publicconvenienceandnecessityrequireorpermittheabandonment , ordiscontinuance."49U.S.C.10903d(d).Unlikethecourt,the  STBisnotrequiredtoconsiderwhatisinthebestinterestsof  thedebtor'sestate.Further,indeterminingthepublicinterest, ^ theSTBmustconsiderwhethertheabandonmentordiscontinuance 4 willhavea"serious,adverseimpactonruralandcommunity  Z development."Id.TheSTBmustalsoadheretothenational 0 transportationpolicyofpromotingcompetitionbetweenrail  carriers.49U.S.C.10101(1),(4).Inapplyingthepublic  intereststandard,theSTBweighstheinterestsofthecarrier,the b affectedshippers,thecommunity,andinterstatecommerce 8 generally.Purcellv.UnitedStates,315U.S.381,384(1942).# XXD*##  M# c $USUS.,  =9dd=     9    _XDX =9dd=ӀXDXXXDOfcourse,BAR,pursuanttoagreementwithMM&A,doesnot  seektheabandonmentoftheunderlyingMadawaskaline,onlythe  discontinuanceofCN'strackagerightsoverthatlineandthe \ abandonmentofCN'seasement.BARwantstokeepthelinesandoust 2 CN,sotheissueitraisesdoesnotapplytoitsownsituation. X   Inanyevent, requiringthedebtortoapplytotheSTBforthe . adversediscontinuanceofthetrackagerightsofanondebtorwill   notpreventthebankruptcycourtfromdiscontinuingthedebtor's   railoperationsoverthatline.Thebankruptcycourtcanstill `  discontinuethedebtor'sown"moneylosingoperationsoverthe 6   line"intheshorttermtostemthecashdrainthattherail  \  operationiscausingthedebtor. # XXD##  *# d  $USUS.,  =9dd=     13    _  =9dd=ӀXDX ThepartieshaveessentiallyframedtheissueasifBAR  continuedtoownthelineandhavenotsuggestedthatthesaleof  thelinetoMM&Amootsthematter.Asthesaleofthelinewas p partofthereorganizationplan,thistreatmentisareasonable F positionandwedonotlookbehindit.#XDXXXD## XXD+#  $USUS.,  =9dd=     15    _XDX XDXXXD=9dd=ӀWeemphasizetheword"some."Theagencyissuedits  interpretationasanadvisoryopiniontothebankruptcycourt  # _pursuant_Ԁto11U.S.C.1170(b).Anadvisoryopinion,asopposed  tothefinalorderissuedundersection10903,doesnothavethe  forceoflawandindeedisnotbindingonthebankruptcycourt. \ #XDXXXD#XDXXXDSeeChristensenv.HarrisCounty,529U.S.576(2000).__  S $USUS.,  =9dd=     8    _XDX =9dd=ӀXDXXXDThetrusteearguesitishighlyunlikelyacourtwouldever  rulecontrarytotheSTB'sadvisoryopinion.#XDXXXD*#XDXXXDԀThisisironic,given  thattheSTBhasalreadyruledthatthereliefthetrusteeseeksis \ againstthepublicinterestandwhatthetrusteewantsisasecond 2 biteattheappleindistrictcourt.# XXD#Ԁ#  # !USUS.,  _ shOY   ` UnitedStatesCourtofAppeals#9sh@#9     `    FortheFirstCircuit 0 # 0 #XDX   A') ` dE<` A      `     h No.041800   Ѐ u    @@(( JAMESE.HOWARD,Chapter11TrusteeofBangorandAroostook K  RailroadCompanyandVanBurenBridgeCompany, ! q @$Petitioner,    @tt)v. y    @@TT SURFACETRANSPORTATIONBOARDandUNITEDSTATESOFAMERICA, %u  Respondents. ! A') ` dE<R` A S # XXD#XDX #Xh XXXDF#XDX XXh   @  @` PETITIONFORREVIEWFROMTHESURFACE 8  @  @`  @  @  @  @`  @  @ TRANSPORTATIONBOARD @  ^ 'A') ` dE<` A   #Xh XXXD#XDX XXh# XXD#XDX 4No.041819  Ѐ u   @@ JAMESE.HOWARD,Chapter11TrusteeofBangorandAroostook K RailroadCompanyandVanBurenBridgeCompany, !q h@Plaintiff,Appellant,     @  @`  @  @  @h  @ v. y! # XXD#XDX #Xh XXXD#XDX XXh @  @` 0 @ CANADIANNATIONALRAILWAYCOMPANYandWATERLOORAILWAYCOMPANY, %!u# @@Defendants,Appellees. "!% A') ` dE<|$` A }$'  @  @`  @  @  @h  @  @  @`  $(  @  @` APPEALFROMTHEUNITEDSTATESDISTRICTCOURT b% ) @@0 0 FORTHEDISTRICTOFMAINE0 @  8&!* [Hon.GeorgeZ.Singal,U.S.DistrictJudge] '^"+ A') ` dE<(` A ( $- @@'Before )$/ @@((Torruella,CircuitJudge, u*%0 Coffin,SeniorCircuitJudge, K+&1 Lynch,CircuitJudge. !,q'2 A') ` dE<-` A -)4  -,)5       #Xh XXXD: #XDX XXh# XXD#XDX ThomasM.Reiter,withwhomRoryFitzPatrick,StevenP.  Wright,Kirkpatrick&Lockhart,LLP,RogerA.Clement,Jr.,Andrew  R.Sarapas,andVerrill&Dana,LLP,wereonbrief,forappellant \ andpetitioner. 2   WilliamC.Sippel,withwhomThomasJ.Litwiler,Fletcher& X Sippel,LLC,GeorgeJ.Marcus,andMarcus,Clegg&Mistretta,P.A., . wereonbrief,forappelleesCanadianNationalRailwayCompanyand   WaterlooRailwayCompany.     AliceC.Saylor,Attorney,SurfaceTransportationBoard,Ellen `  D.Hanson,GeneralCounsel,CraigM.Keats,DeputyGeneralCounsel, 6   R.HewittPate,AssistantAttorneyGeneral,DepartmentofJustice,  \  MakanDelrahim,DeputyAssistantAttorneyGeneral,RobertB.  2  Nicholson,Attorney,andJohnP.Fonte,Attorney,wereonbrieffor   respondentsSurfaceTransportationBoardandUnitedStatesof   America. d    CharlesA.Spitulnik,AlexMenendez,andMcLeod,Watkinson& :  MillerwereonbriefforFraserPapersLimited,intervenor.# XXD ##9  # `  *'ddd Xdd Xdd X(#(#,( dd ,( dd ,( dd +  *6&)*6&  SIJ+&* @@38314@@S 9XDX November24,2004  ,p',  # XXD##9 }# RHC,F(-" @@38314 @@ R (J+&.  (OY    x   8DXXdd8*,X` XX*   9XDX =DXXdd==DXXdXXd= ` LYNCH,CircuitJudge .Theseconsolidatedappealspresent  theissueoflawofwhethertheterm"abandonment"insection1170 x oftheBankruptcyCodegivesthebankruptcycourtsthepowerto $t adverselyabandonanondebtorrailroad'seasementandtrackage   rightsoverraillinesownedbythedebtoratthetimeofthe |  bankruptcy.Thisappearstobeanissueoffirstimpressioninthe ( x  courtsofappeals. $   ` Section1170,whichresultedfromthe1978Bankruptcy   CodeAmendments,isanexceptiontothenormalrulethatonlythe ,|  SurfaceTransportationBoard(STB),thesuccessortotheearlier ( InterstateCommerceCommission(ICC),hasjurisdictiontoauthorize  theabandonmentofraillinesorthediscontinuanceofoperations 0 overanypartofarailline.See49U.S.C.10903.Inthe , section1170abandonmentprocess,theSTBstillplaysarole,but  itisanadvisoryone.See11U.S.C.1170(b),(c).Outsideof 4 thecontextofabankruptrailroad,inordertoachievean 0 abandonmentoradiscontinuance,railcarriersmustapplytothe   STBforpermission. 8!"  ` Adiscussionofsomeoftheparlanceoffederalrailroad "4$ regulationishelpful.Generally,whenarailcarrierorathird $& partywishesto"abandon"itsownrailline,itmustseek <&!( permissionfromtheSTB.49U.S.C.10903.Ifarailcarrieris '8#* operatingrailtransportationoveritsownlineoroverthelineof )$, anotherbythegrantofindependenttrackagerights,itmustseek @+&. permissionfromtheSTBto"discontinue"theservice.Id.The  STB'sauthorityandthestandardsgoverningitsdecisionsarethe \ sameregardlessofwhetheritisgrantinganabandonmentora X discontinuance.SeeId.10903(d).    ` Under49U.S.C.10903,thisapplicationcanbebrought `  totheSTBbytherailcarrieritselfor,inamoreunusual  \  circumstance,byathirdparty.SeeConsolidatedRailCorp.v.   I.C.C.,29F.3d706,70809(D.C.Cir.1994).Iftherailcarrier d  appliestoabandonordiscontinueitsownlinesorservice,the `  applicationisforan"abandonment"or"discontinuance"(whatwe   willcalla"direct"abandonmentordiscontinuanceforpurposesof h clarity).Bycontrast,ifathirdpartyappliestoabandonor d discontinuethelinesorservicesofanotherrailcarrierinanSTB  proceeding,itiscalledan"adverse"abandonmentor l discontinuance.Id.TheSTBcangrantanadverseabandonmentor h discontinuanceonathirdparty'spetitioneveniftheownerofthe  lineorthetrackagerightsobjects.Thetextofsection10903 p  itselfdoesnotdistinguishbetweenadverseanddirect !l" abandonments,butthecaselawmakesitclearthattheSTBhas "$ authoritytohearbothtypesofapplications.Thompsonv.Texas t$& MexicanRy.Co.,328U.S.134,145(1946)("Thereisnorequirement  &p!( ...thattheapplication[forabandonmenttotheSTB]bemadeby '#*  thecarrierwhoseoperationsaresoughttobeabandoned."). x)$,  ` Herethedebtorrailroadthroughitstrusteeseeksto   adverselyabandonnotitsowninterest,buttheinterestsofa \ thirdpartyinaneasementandtrackagerightsoverlinesonce X ownedbythedebtoratthetimeofbankruptcy.Therubisthatit   seekstodosointhebankruptcycourt,notbeforetheSTB.The `  districtcourtheldthatthestatutorylanguageinsection1170,  \  givingthebankruptcycourtauthorityoverabandonmentsofrail   lines,doesnotincludetheauthoritytograntadverseabandonments d  ofanondebtor'strackageorotherrights.Theplaintiff/trustee `  inbankruptcyappealsthisdecision.    ` Weaffirmthedistrictcourt'sdismissalofCountIIIof h thetrustee'scomplaint.Indoingso,weholdthatthebankruptcy d courtdoesnothavetheauthorityundersection1170toadversely  abandonthelinesortrackagerightsofanondebtor,onthe l petitionofadebtorrailroadwhoownedthoselinesatthetimeof h bankruptcy.Suchauthoritylies,instead,withinthejurisdiction  oftheSTBunder49U.S.C.10903.Wealsoaffirmthedecisionof p  theSTBunder49U.S.C.10903denyingpermissionfortherelief !l" thetrusteeseeks. "$    I.  t$& %. ` InMarch2001,Bangor&AroostookRailroadCompany(BAR) <&!( andCanadianNational(CN)(whichincludesCanadianNational '8#* RailwayCompany(CNR)anditssubsidiary,WaterlooRailwayCompany )$, (Waterloo))enteredintoaseriesofprebankruptcyagreements @+&. involvingthemovementofrailcarsovertheMadawaskarailline.  Atthetimeoftheagreements,BARanditswhollyownedsubsidiary, \ VanBurenBridgeCompany(VBBC),ownedthisline. TheMadawaska X linerunsfromtheFraserpapermillinMadawaska,Maine,toan   interchangewithaCNlineatSt.Leonard,NewBrunswick,Canada. `   ` Inexchangefortherightsgrantedundertheagreements,  \  CNpaidBARfivemilliondollarsincash.Thefirstagreement   betweenthetwopartieswasaJunctionSettlementAgreement,under d  whichBARagreedtomoveCN'srailcarsoverBAR'sMadawaskaline, `  betweentheconnectionwithCN'sraillinesatSt.Leonardandthe   Fraserpapermill. #  1      ׀CNagreedtopayBARaspecifiedpercarprice h forperformingthesehaulageservicesandhasdoneso.Theparties d alsoenteredintoaTrackageRightsAgreement.Underthis  agreement,CNRacquiredlimitedlocaltrackagerightswhichallowed l ittorunitsowntrainsovertheMadawaskalinetotheFraser h papermill.Finally,inathirdagreementBARgrantedWaterlooa  nonexclusivefreighteasement,underwhichWaterloocouldalso p  operateitstrainsovertheline.Itisthelasttwoagreements !l" whichthetrusteeseekstoundohere.  "$  ` TheSTBapprovedtheTrackageRightsandEasement t$& AgreementsonanapplicationbyCNonMarch21,2001. Sincethis  &p!( time,CNhasnotitselfuseditsowntrackagerightsorthe '#* easement;dinsteaddithasreliedonthehaulageagreementtoservice  theFrasermill,andpaysBARafeeforitsservices.  \  ` OnAugust15,2001,certaincreditorsfiledan X involuntaryChapter11bankruptcyproceedingagainstBAR.In   December2001,thebankruptcycourtenteredanorderforrelief `  underChapter11.ItappointedJamesHowardastrusteein  \  bankruptcy. #  2      ׀ Aspartofthebankruptcyplan,Montreal,Maine&   AtlanticRailwayLTD(MM&A)acquiredtheMadawaskalineandother d  BARrailassetsfromthetrusteeinJanuary2003. Theeffectof `  theagreementbetweenMM&AandBARisthatthetrusteenolonger   hasownershiprightsastotheline. h  ` Therewasalsowhatwesuspectwasanunusualarrangement d inapartoftheacquisitionagreement:MM&AagreedtopayBARfive  milliondollarsifBARsuccessfullyremovedCNfromtheMadawaska l linedpriortoJanuary1,2005.dThetrustee'ssoleremaining h interestinthelineisthepotentialfivemilliondollarpayout  fromMM&A.Asaresult,BARhadafinancialincentivetoattempt p  tooustCNfromtheMadawaskaline,althoughitnolongerownsthe !l" line.CN,ofcourse,hadnointerestinabandoninganyofits "$ rightsinthatline(whichitrecentlyhadpaidfivemillion t$& dollarstoBARtoacquire).  &p!(  ` InMarch2002,thetrusteefiledamotioninbankruptcy  courttorejecttheJunctionSettlementAgreement,theTrackage \ RightsAgreement,andtheeasementasexecutorycontractsunder11 X U.S.C.365.Thetrusteeinitiallyacknowledgedthatthe   eliminationofCN'strackagerightsandeasementwassubjecttothe `  exclusivejurisdictionoftheSTB,butlaterchangedhisposition  \  onthisissue.     ` InMay2002,thebankruptcycourtstayedtheproceedings d  pendingactionbytheSTBonappropriaterequestsforreliefbythe `  trusteetotheSTB.WiththeSTB,thetrusteefiledapetitionto   "revoke"CN'strackageandeasementrights,pursuantto49U.S.C. h 10502(d). Thiseffortwasunsuccessful,andtheSTBexplained d thatbecauseCN'strackageandeasementrightswere"authorizedby , theagency,[they]willremainineffectuntildiscontinuance  authorityisgranted[under49U.S.C.10903]."CanadianNat'lRy. 4 Co.,STBFinanceDocketNo.34014,2002WL1365812at*6(STBJune 0 25,2002). Basically,theSTBsaidthetrusteehadusedthewrong   proceduralvehicle.TheSTBalsosaidthatevenifitwereto 8!" construeapetitiontorevokeasarequestforadverse "4$ discontinuanceunder49U.S.C.10903(thecorrectvehicle),there $& wasnobasisintherecordtograntsucharequest.Id.at*7. <&!(  ` AftertheSTB'srejectionofthetrustee'spetitionto '8#*  revoke,thebankruptcycourtextendedthestayoftheproceedings, )$, pendingthetrustee'scompletionoftheadverseabandonment  proceedingsbeforetheSTBunder49U.S.C.10903.  \   ` Thetrusteethenswitchedtracks(metaphorically).On X April16,2003,thetrusteeassertedforthefirsttimein   bankruptcycourtthattheSTBdidnothavefinalauthorityoverthe `  forcedabandonmentofCN'srights,andthatthebankruptcycourt  \  couldunilaterallyoustCNfromthelinepursuanttoitsauthority   under11U.S.C.1170. Itisapparentthatthetrustee d  calculated,rightlyorwrongly,thathewasmorelikelytogetthe `  fivemilliondollarpaymentfromMM&Abybeinginbankruptcycourt   ontheadverseabandonmentissue,ratherthanbeforetheSTB. h  ` OnMay7,2003,thebankruptcycourtissuedanoralorder d thatliftedthestayontheproceedingsandconvertedthematterto  anadversaryproceeding. Thetrusteefiledhiscomplaintinthe l adversaryproceedingsagainstCNonJune17,2003.CountIIIof h thecomplaintsoughtanorderfromthebankruptcycourtauthorizing  thediscontinuanceofCN'strackagerightsandtheabandonmentof p  CN'seasement.  !l"  ` Afteratelephoneconferencewiththeparties,the "$ bankruptcycourtissuedaproceduralorderdatedJune19,2003. t$& ThecourtstatedthatitwasuncertainwhetherBAR'sefforts"not  &p!( todiscontinueitsownexistingserviceoveraportionofarail '#* line,but...to'adverselyabandon'[CN's]rightstouse[BAR's] x)$, tracks"werewithinthescopeofabankruptcycourt'spowerunder $+t&. 11U.S.C.1170. OnJune25,2003,CNfiledanunopposedmotion  towithdrawreferenceoftheadversaryproceedingtothebankruptcy \ court. ThemotionwasgrantedonJune30,2003,andallfurther X proceedingstookplaceinthefederaldistrictcourtofMaine. On   July22,2003,CNmovedtodismissthetrustee'scomplaint,arguing `  thatthebankruptcycourthadnoauthoritytoissueadverse  \  abandonmentsofanondebtor'slinesunder11U.S.C.1170.     ` Themagistratejudgeissuedarecommendeddecisionthat d  section1170oftheBankruptcyCodedidnotapplytothetrustee's `  effortstoremoveCNfromtheMadawaskaLine,andthattherelief   soughtbythetrusteecouldonlybeobtainediftheSTBgrantedthe h adverseabandonmentpursuanttosection10903. Thedecision d concludedthattheplainlanguageofthestatutedidnotdetermine  itsmeaningandthatrecoursetothelegislativehistorywas l appropriate.Themagistratejudgeconcludedthatthelegislative h historymadeit"reasonablyclearthatinenactingsection1170  Congresswasconcernedwithstreamliningandacceleratingthe p  processofabandonmentordiscontinuanceofacashstrapped !l" debtor'sownraillines,"notthelinesofnondebtors. This "$ interpretationwasfurthersupportedbytheSTBsdecisionin t$& Chicago,RockIsland&Pac.R.R.Co.,363I.C.C.150(1980),which  &p!( themagistratejudgefound"reasonably...construedsections '#* 10903and1170,intandem,topreserve[theSTB's]power...to x)$, adjudicateanadverseabandonmentpetitionfiledbyadebtor $+t&. railroad."Finally,themagistratejudgeconcludedthatthe  languageusedbyCongressinenactingdifferentlegislationin1979 \ whichappliedsection1170tothethenpendingMilwaukeeRailroad X restructuringsupportedaninterpretationlimitingtheabandonment   authorityofthebankruptcycourttothedebtor'sownlines.In `  thislegislation,Congressstated,"thebankruptcycourtmay  \  authorizetheabandonmentoflinesoftheMilwaukeeRailroad   pursuanttosection1170ofTitle11."45U.S.C.904(a)(1). #  3       d   ` OnNovember18,2003,thedistrictcourtagreedwiththe `  decisionofthemagistratejudgeandadopteditsreasoning. The   districtcourt'sordergrantedCN'smotiontodismissCountIIIof  thecomplaintunderRule12(b)(6),Fed.R.Civ.P.Italso 0 deferredadjudicationofthemotionasitpertainedtothe , remainingcountsofthetrustee'scomplaintpendingtheSTB's  dispositiononthetrustee'sadversediscontinuanceapplication. 4  ` Inthemeantime,thetrusteehadfiledonOctober6, 0 2003,anapplicationwiththeSTBfortheabandonmentofCN's   trackagerightsandeasementovertheMadawaskaline. Thiswas 8!" essentiallyanapplicationforanadverseabandonmentundersection "4$ 10903;butthetrusteenotedthathispositionwasthatifthe $& finalauthoritywasinthebankruptcycourtundersection1170, <&!( thentheSTBsopinionshouldbeviewedonlyasanadvisory_opinion '8#* aspermittedbysection1170. Fromtheperspectiveofthe_STB_,  whetheritisactinginanadvisorycapacityorasthefinal \ authority,thesubstantivestandardsforthetwodeterminationsare X thesame.Treatingitasamatterundersection10903,the_STB_Ԁon   April30,2004,deniedtheapplicationbecauseitfoundthetrustee `  hadfailedtomeetitsburdenofshowingthatthe"public  \  convenienceandnecessity"requiredtheousterofCNfromthe   _Madawaska_Ԁline.WaterlooRy.Co.,_STB_ԀDocketNo.AB124,2004WL d  941227,at*1(_STB_ԀApril30,2004).  `   ` The_STB_Ԁdeterminedthatthepublicisbestservedby   allowingCNtoremainonthe_Madawaska_Ԁline.Incomingtoits h conclusion,the_STB_Ԁbalancedthecompetingbenefitsandburdenson d allinterestedparties.OnesuchinterestedpartywasFraser  Papers.FraserPapershadintervenedinandopposedthetrustee's l abandonmentactionbeforethe_STB_. Fraserstressedthatinthe h pastitsmillat_Madawaska_,Maine,hadbeenservedonlybyBARand  thatinlate2000ithadexpressedstrongconcerntoCNthatBAR's p  financialcondition #  4      ׀wasdeterioratingandthataconsequentloss !l" ofrailservicewouldlikelyresultina_shutdown_Ԁofthe_Madawaska_ "$ mill. Frasersaidthatthe_Madawaska_Ԁmillishighlyinterdependent t$& _withanothermillinEdmundston,NewBrunswick,Canada.Ifthe  Madawaskamillwereshutdown,theEdmundstonmillwouldbeshut \ downaswell,depriving1600employeesofworkanddeprivingFraser X of8.5milliondollarsinrevenueperweek. TheSTBagreedthat   thelossofcompetitiverailservicewouldbeadetrimenttoFraser `  andperhapswouldimpacttheeconomicdevelopmentandwellbeingof  \  communitiesandruralareasnearthemill.Id.at*4*5,*8.   Ѐ ` Althoughitwasnotrequiredbystatutetodoso,theSTB d  alsodconsideredtheneedsofBAR'screditors,thebenefitstothe `  bankruptestate,andthefairnessofthearrangementtotheparties   involved.Id.at*5*8,*8*9.TheSTBfoundthatthetrackage h rightsobligationbetweenCNandBAR(andnowhonoredbyMM&A)in d March2001wasfairandenteredintoatarm'slength.Italso  determinedthattheretentionofCNontheMadawaskalinewouldnot l affectMM&A'ssurvivalorcausetheabandonmentofotherMM&Aline h segments.TheBoardultimatelydeterminedthatthedinterestsof  thebankruptestatedidnot"justifystrippingCNofitsrightto p  providecompetitiverailservicetoFraserordeprivingFraserof !l" itsrighttoreceivethatservice."Id.at*9. "$ Ѐ ` TheSTBrejectedchallengesmadetothestandingofthe t$& trusteeinlightofthesaleofthelinebyBARtoMM&A.Id.at  &p!( *3.! #  5      ׀ d Nopartychallengesthatdeterminationonappeal.dAfterthe '#* STBissueditsdecision,thetrusteefiledincourtaconsentedto  motionforthevoluntarydismissaloftheremainingcountsofthe \ trustee'scomplaintwithoutprejudice,pursuanttoRule41(a)(2), X Fed.R.Civ.P.OnJune3,2004,thedistrictcourtgrantedthe   voluntarydismissalwithoutprejudiceastotheremainingcountsof `  thetrustee'scomplaintandenteredaseparateandfinaljudgment  \  inCN'sfavor,pursuanttoRule58(a),Fed.R.Civ.P.Thetrustee   timelyappealedthedismissalofCountIIItothisCourtinNo.04 d  1819. Fraserhasintervenedandhasfiledabriefinthiscourtin `  supportofaffirmanceofthedistrictcourt'sopinion.    ` InNo.041800,thetrusteealsotimelypetitionedthis h courtforreviewoftheSTB'sorderdenyingthetrustee's d applicationfordiscontinuanceandabandonment.See28U.S.C.  2321.BothFraserandCNhaveintervenedinthismatter.The l trusteearguesthattheSTBhadnojurisdictiontoissueabinding h decisionunder49U.S.C.10903andthatitcouldonlyissuean  advisoryreportunder11U.S.C.1170.Thetrusteedoesnot p  attackthemeritsoftheSTB'sdecision.Inresponse,theSTBhas !l" alsofiledabrief,pointingoutthatithadbeenmadeapartyonly "$ inappealNo.041800,andthattheissueofwhethersection1170  appliedwasanissueonlyinappealNo.041819.TheSTBsaysthat \ whatevertheoutcomeofthatquestion,thetrusteehaswaivedany X argumentaddressedtothemeritsoftheSTB'sdetermination.The   STBasksthatweaffirmtheBoard'sdecision.  `  [.   II.   \  v ` ReviewofthedismissalofaclaimunderRule12(b)(6) $  forfailuretostateaclaimuponwhichreliefcanbegrantedisde   novo.Martinv.AppliedCellularTech.,Inc.,284F.3d1,5(1st ,|  Cir.2002). (  ` Thetrusteemakesanargumentbasedonthe"plain  meaning"ofthestatutorytextof11U.S.C.1170.Therelevant 0 partsofsection1170provideasfollows: ,  ` (a)Thecourt,afternoticeandahearing,mayauthorize  0 ` theabandonmentofalloraportionofarailroadlineif ^ suchabandonmentis4` (#` (#  `  (1)(A)inthebestinterestoftheestate;or  Z  `  (B)essentialtotheformulationofaplan;and 0  `  (2)consistentwiththepublicinterest.  0 ` (b)If...suchabandonmentwouldrequireapprovalby   the[STB]underlawoftheUnitedStates,thetrustee b ! shallinitiateanappropriateapplicationforsuch 8!" abandonmentwiththe[STB].Thecourtmayfixatime "^# withinwhichthe[STB]shallreporttothecourtonsuch "4$ application.# %` (#` (# 0 ` (c)Afterthecourtreceivesthereportofthe[STB],or $& theexpirationofthetimefixedundersubsection(b)of f% ' thissection,whicheveroccursfirst,thecourtmay <&!( authorizesuchabandonment,afternoticetothe[STB], 'b") theSecretaryofTransportation,thetrustee,anyparty '8#* ininterestthathasrequestednotice,anyaffected ($+ shipperorcommunity,andanyotherentityprescribedby )$,  thecourt,andahearing.8yj*%-` (#` (# 11U.S.C.1170.Thetrusteearguesthatsection1170isnot   limitedtoabandonmentofthedebtor'sownoperationsandthatthe \ phrase"alloraportionofarailline"showsthattheterm X "abandonment"isnotsolimited. #  6          ` Infact,BAR'sargumentdoesnotrelyontheplaintext `  ofsection1170,butrequiresreferencetoapriorjudicial  \  constructionofsection10903.Therelevantpartsofthatsection,   inturn,provide: d  0 ` (d)Arailcarrierprovidingtransportationsubjectto `  thejurisdictionoftheBoardunderthispartmay6` (#` (#  `  (1)abandonanypartofitsrailroadlines;or   0 ` 0 ` (#` (#(2)discontinuetheoperationofallrail  transportationoveranypartofitsrailroad h lines;> (# (# 0 ` onlyiftheBoardfindsthatthepresentorfuturepublic d convenienceandnecessityrequireorpermitthe : abandonmentordiscontinuance.` (#` (# 49U.S.C.10903.BAR'sargumentisthattheterm"abandonment" l asusedinsection10903hasbeenconstruedbyboththeagencyand h thecourtstoincludeadverseabandonment.SeeConsolidatedRail  Corp.,29F.3dat70809.Fromthis,thetrusteearguesthat p  Congresswasawareoftheconstructionof"abandonment"insection  10903andispresumedtohaveadoptedthatconstructioninsection \ 1170.  X  ` Thetrusteealsoarguesthathisreadingofsection1170   issensibleandwouldnothaveimpropereffectsonthirdparties. `  Thetrusteesaysfirstthatconcernsaboutnondebtorrailroadsare  \  irrelevantbecauseanyconsequencestothemareexactlywhat   Congressintended,astheplaintextddemonstrates. Furtherd,the d   trusteepointsoutthatsection1170requiresthecourttoconsult `  theSTBandconsiderthepublicinterest.% #  7      ׀Thatisenough,the  trusteesays,toallayanyuntowardeffectsonthirdparties./ #  8      󀀀 \    ` Indeedthetrusteeattacksthedistrictcourtruling X itselfasleadingtountowardresults.Thetrusteeargues,for   example,thatifthedebtorwantstoabandonitsownunderlying `  raillines,thebankruptcycourtcouldnotgrantthisabandonment  untilthedebtorfirstsoughtanapplicationwiththeSTBto \ discontinuetheoverlyingtrackagerightsofanondebtor.SeeMo. X Pac.R.R.Co.,9I.C.C.2d1228,1230(1993)(An"abandonmentmay   notbeconsummateduntil[therailcarrierwithtrackagerights'] `  discontinuancehasbeenauthorizedandinterestedpersonsaregiven  \  anopportunitytoseekimpositionoftrailuseandpublicuse   conditions.").& #  9       d   ` Finally,thetrusteearguesthatlegislativehistory `  shouldnotbeconsidered,butthatifitis,itsupportsthe   trustee'sinterpretation.#  #  10      ׀ Wetakeeachargumentinturn. h  ` Themeaningoftheterm"abandonment"asitisusedin11 d U.S.C.1170isnotselfevidentandcannotberesolvedontextual  plainmeaninggrounds.Onecannottellbyreadingtheterm l "abandonment"insection1170whetherthetermincludes"adverse  abandonment."Norcanonetellwhetherthisissosimplyfromthe \ factthattheterm"abandonment"insection10903hasbeen X construedtoincludeadverseabandonmentsaswell.Indetermining   whatthestatutemeans,wecannotsimplyrelyonafewphrasesin `  acomplicatedstatutorystructure.Section1170mustbereadin  \  thecontextofwhatCongresswastryingtodowhenitgavethe   bankruptcycourtabandonmentauthorityoveradebtorrailroadin d  bankruptcy.Boththatcontextandthelegislativehistoryleadus `  torejectthetrustee'sinterpretation.    ` Indesigningthestatutoryscheme,Congresssetupan h interplaybetween11U.S.C.1170and49U.S.C.10903.Under d section10903,theSTBistheregulatoryboardchargedwith  implementingoverallCongressionalrailtransportationpolicy. l RailcarriersaresubjecttothejurisdictionoftheSTB,andwhen h arailcarrierintendstoabandonitsunderlyingraillinesor  discontinuerailtransportationortrackagerightsoveraline,it p  mustseekpermissionbyfilinganapplicationwiththeSTB.49 !l" U.S.C.10903.ddGenerally,theSTB'sauthorityoverabandonmentof "$ raillinesisexclusiveandplenary.Chicago&N.W.Transp.Co.v. t$& KaloBrick&TileCo.,450U.S.311,32123(1981).  &p!(  ` OneexceptiontothisexclusiveSTBauthorityisthe '#* abandonmentofraillineswhenadebtorrailroadisinbankruptcy. x)$, Congressdesignedspecialprovisionsinthoselimited_circumstances $+t&. forrailroadreorganizationthatattemptedtoallowtherailroadto  emergeas"aliving,notadying,...enterprise."SeeNewHaven \ InclusionCases,399U.S.392,431(1970)(internalquotations X omitted).Onesuchprovisioncanbefoundinthe1978Amendments   totheBankruptcyCode,11U.S.C.1170. `  Ѐ ` Section1170replacedsection77(o)oftheBankruptcy  \  Act,formerlycodifiedat11U.S.C.205(o).Thecourtshad   construedtheformersectiondealingwithrailroadsinbankruptcy d  torequirean_STB_Ԁdeterminationofwhetheranabandonmentofa `  debtor'sraillinewasadversetothepublicinterestasa   prerequisitetoabandonmentinbankruptcy.E.g.,Palmerv. h Massachusetts,308U.S.79,8788(1939).dPalmerinvolvedadirect d abandonmentbyadebtorraillineofitsownlines. d Inaneffort  tostreamlinetheprocess,Congressmadeitclearinenacting11 l U.S.C.1170thatitwantedthebankruptcycourt,notthe_STB_,to h makethefinaldeterminationofwhetheradebtor'sraillinescould  beabandonedandthe_STB_Ԁtoplayanadvisoryrole,subjecttotime p  constraints.Thiswouldspeedupthedecisionalprocess. !l"  ` Importantly,the_STB_Ԁwasnotoustedofitsexclusive "$ jurisdictionoverallmatterspertainingtobankruptrailroads. t$& See11U.S.C.1166("Exceptwithrespecttoabandonmentunder  &p!( section1170[andcertainothersituations]...thetrusteeand '#* thedebtoraresubjecttotheprovisionsofsubtitleIVoftitle49 x)$, [thechapterauthorizingthe_STB_]thatareapplicabletorailroads $+t&. ....).If,forexample,thedebtoraspartofits  reorganizationplanwantedto"constructanextensiontoanyofits \ railroadlines,""constructanadditionalrailroadline,"or X "providetransportationover...anextendedoradditional   railroadline,"itwouldfirsthavetoapplytothe_STB_Ԁfora `  certificateauthorizingsuchactivity.See49U.S.C.10901. #  11      ׀  \   ` Undersection1170,the_STB_Ԁstillplaysanimportant   advisoryroleinthegrantingofpermissionfortheabandonmentof d  areorganizingdebtor'sraillines.Ifthe_STB_Ԁissuesanadvisory `  reportwithinthetimeallowedbythebankruptcycourt,the   bankruptcycourtshouldconsiderthe_STB_'sreport,butthe_STB_'s h conclusionsarenotbinding.11U.S.C.1170(b),(c). d  ` Thelegislativehistoryofsection1170illuminates  Congress'sintentinseveralways.First,itidentifiesthe l regulatoryproblemthatneededtoberemedied.Second,it h identifiesthetypeofproblemssufferedbydebtorrailroadswhich  wereofconcern.Third,itfocusesonwhichrailroads'(debtoror p  nondebtor)interestswereofconcern.Fourth,itemphasizesthat !l" othertypesofissuesconcerningadebtor'sraillineremainwithin "$  the_STB_'sexclusivejurisdiction. t$& _ ` Inenactingsection1170,Congresswasattemptingto   remedyspecificproblemswhicharosefromthejudicial \ interpretationoftheoldscheme.Theregulatoryproblemwasthat X whenthedebtorwasfirstrequiredtogototheSTBtoseekthe   abandonmentwithoutanytimelimitsfortheSTBdecisionsandthen `  gotothecourt,therewasadelay.TheSenateReportstates:  \  <0 ` Theincorporationofrailroadreorganizationsintothe   generalreorganizationprovisionsofthebilleliminates   thecumbersomeandduplicativeprocedureofsection77 d  underwhichplansofreorganizationshuttledbackand :  forthbetweenthe[STB]andthecourtsandproceedings `  wereinevitablymoretimeconsumingandexpensive.Under 6 thebill,thebankruptcycourt,ratherthanthe[STB],   assumestheprimaryresponsibilityforthereorganization  proceeding.h` (#` (# S.Rep.No.95989,at1112(1978),reprintedin1978U.S.C.C.A.N. d 5787,579798.Inturn,thisdelayexacerbatedthecashdrain #  12      ׀on  arailcarrieroperatingafinanciallyunsoundlinewhilewaiting x fortheSTBtoconsideritsapplicationtoabandonthatline: $t 0 ` Inthecaseofarailroadbeingadministeredundertitle   11,thenecessitytostemthebankruptcarrier'scash  drainrequiresexpeditioustreatmentofabandonment |   applications.Thissubchapterprovidesthatthecourt R ! ratherthanthe[STB]hastheauthoritytoauthorize  abandonmentsordiscontinuancesofrailservices.` (#` (#  H.Rep.No.95595,at423(1978),reprintedin1978U.S.C.C.A.N. 2 5963,6379.ThelegislativehistorymakesitclearthatCongress : wasconcernedwithmakingthesystemfortheabandonmentofdebtor   railroadsraillinesquicker,moreefficient,andlesscostlyfor B   thedebtorrailroad.  >   ` Thelegislativehistoryemphasizesthatmanyofthe   operationsofthedebtorrailroadremainwithintheexclusive F  jurisdictionoftheSTB: B 0 ` [S]inceaplanofreorganizationforarailroadmay  proposechangesintransportationpatternsoroperation t by,amongotherthings,grantingoperatingrightsover, J ortransferring,thedebtor'sraillines,thebill  p retainsthe[STB's]jurisdictionwithrespecttosuch F proposals.Thesubchapterrequiresthatsuchproposals  bereferredtothe[STB]foritsapproval,disapproval,  ormodificationandrequiresthereorganizationcourtto x givebindingeffecttothe[STB's]findingsonsuch N aspectsofaplan.$t` (#` (# S.Rep.No.95989,at11(1978),reprintedin1978U.S.C.C.A.N.   5787,5797(emphasisadded).Inreferringtothepowersthatare   exclusivelyretainedbytheSTB,thelegislativehistorysays,"the 4!" debtor'sraillines,"evidencethatCongress'sconcernwasforthe "0$  debtor'sownlines,+ #  13      ׀notthoseofafinanciallysoundrailroad. $& o ` Againstthisbackdrop,thereislittlereasontothink   Congressintended,byusingtheword"abandonment"insection1170 \ toinclude"adverseabandonment"byadebtorrailroad,toousta X thirdpartyfromrightsinthedebtor'sownlines,andthus   silentlystriptheSTBofitsexclusivejurisdictionoverthe `  abandonmentofanondebtorslinesortrackagerights.  #  14      ׀  \   ` Inadditiontobeingatoddswiththeexpressedintentof   Congress,thetrustee'sinterpretationwouldcreateanewsetof d  problems.Includedamongthoseproblemsisthecreationof `  financialincentivesforbankruptrailroadstoattempttodisrupt   theoperationofotherhealthyrailroads.Thisisagainstpublic h policy.Congresssurelydidnotintendtocreateabountysystem, d ashere,thatallowsdebtorsinbankruptcytoselltheirlinesto  anondebtorandthenusebankruptcycourts,nottheSTB,to l eliminatecompetitionbetweenothernondebtorrailcarriers. h  ` Finally,totheextenttheSTBhasspokenonthisissue,  wegivesome-  #  15      ׀weighttowhatithassaid.Inanadvisoryopinion p  tothebankruptcycourt,Chicago,RockIsland&Pac.R.R.Co.,363  I.C.C.150,171(1980),theSTBstatedthatthebankruptcycourt \ cannotabandonordiscontinuelinesjointlyownedbydebtoranda X financiallyhealthycompany.TheSTBnotedthattheonlywayfor   theselinestobeabandonedisthroughanapplicationtotheSTB, `  pursuantto49U.S.C.10903.Thisholdingobviouslyis  \  consistentwithourdispositionhere.    ` Itfollowsnotonlythatthebankruptcycourthadno d  powertoapprovetheadverseabandonmentanddiscontinuancesought `  bythetrusteehere,butalsothattheSTBhadpowertoissuea   bindingfinalorderinthiscase.Noattackonthemeritsofthe h STB'sdecisionhavingbeenmadebythetrustee,suchanattackhas d beenwaived.We affirm thedistrictcourt'sdismissalofCountIII  ofthetrustee'scomplaintforfailuretostateaclaimuponwhich  reliefcanbegranted.We affirm theSTBsfinalorderdenyingthe 4 trustee'sapplicationtoadverselydiscontinueandabandonthe L trackagerightsandeasementofCN.Soordered.Costsareawarded   toCNandFraser.# XXD##9 # T!" vADXXdXXd!A 9=DXXdXXd=