PETITION FOR REVIEW OF A FINAL ORDER OF THE INTERSTATE COMMERCE COMMISSION
Before Adams, Gibbons and Rosenn, Circuit Judges.
This is a petition pursuant to 28 U.S.C. § 2342(5) (1976) to review an order of the Interstate Commerce Commission (Commission) granting the Octoraro Railway, Inc. (OCTR) a Certificate of Public Convenience and Necessity for a freight rail service over a 41.7 mile line between Colora, Maryland and Wawa, Pennsylvania.*fn1 The petition challenges only the grant of authority to operate the easterly nine mile portion of the line between Chadds Ford Junction, Pennsylvania, and Wawa. Petitioners are Concord Township and the Nicholas Newlin Foundation which are located in the nine mile segment, and a number of other property owners whose properties are located along the line between Concordville (situated between Chadds Ford Junction and Wawa) and Wawa. They contend that the Commission erred in determining that public convenience and necessity would be enhanced by the grant to OCTR of a certificate to operate over the disputed nine mile segment, and that it also erred in concluding that an environmental impact statement was unnecessary. We conclude that the petition for review should be granted. Since the applicable law and the scope of review differ with respect to the petitioners' separate contentions, we consider them separately.
I. FACTUAL AND PROCEDURAL BACKGROUND
On November 8, 1976, OCTR filed an application with the Commission pursuant to section 1(18) of the Interstate Commerce Act,*fn2 for a Certificate of Public Convenience and Necessity to operate a freight railroad on the line described above. The right of way for this proposed freight line was a former Penn Central Transportation Company branch line, which had provided freight and passenger service from 1859 to 1948, and only freight service from 1948 until September, 1971. In that month, Hurricane Agnes caused a huge flood in the area, making the line totally inoperable. An application for abandonment was filed with the Commission in March, 1972. The Commission's jurisdiction over that railroad abandonment proceeding terminated with the enactment of the Regional Rail Reorganization Act, 45 U.S.C. §§ 701-794 (Supp.1979), and the Penn Central abandonment petition was consequently dismissed without Commission action on the merits. Thereafter, the United States Railway Commission excluded this branch line from the Final System Plan for Conrail. In 1976, the Southeastern Pennsylvania Transportation Authority (SEPTA), an agency of the Commonwealth, acquired the inoperative right-of-way under section 206(c)(1)(D) of the Regional Rail Reorganization Act, 45 U.S.C. § 716(c)(1)(D), with funds supplied by the federal Urban Mass Transit Authority (UMTA). SEPTA leased the right-of-way to the Board of Commissioners of Chester County, Pennsylvania, and they in turn leased the line to OCTR, a private corporation, for the purpose of establishing and operating a freight service on the line.
Verified statements on the need for the service were evaluated under the Commission's Modified Procedure. See 49 C.F.R. § 1100.43 (1979). On October 25, 1978, Commission Review Board Number 5 approved the application for operation between Colora, Maryland, and Chadds Ford Junction, Pennsylvania, but denied authority to operate from Chadds Ford Junction eastward to Wawa. Administrative appeals from the Review Board's decision were filed by OCTR, the operator of the freight service, and by SEPTA, the actual owner of the right-of-way. Some of the petitioners opposed these appeals. In May of 1979, the Commission, by a divided vote, modified the Review Board's decision to authorize freight service over the entire line. This petition for review followed.
Repairs have been made to the westerly portions of the right-of-way between Colora and Chadds Ford Junction, funded from several public and private sources. The easterly segment is still inoperable. A freight service is now being provided by OCTR over the westerly segment.
II. THE DETERMINATION OF SHIPPER NEED
The governing statute provides that a rail carrier may be authorized to operate a line
only if the Commission finds that the present or future public convenience and necessity require or will be enhanced by the construction or acquisition (or both) and operation of the railroad line.
49 U.S.C. § 10901(a). The sine qua non for such a finding is evidence of shipper need, actual or prospective. This application was supported by eleven shippers located along the segment of the line west of Chadds Ford Junction, by the Korman Corporation, a landowner with undeveloped property along the easterly segment, by the Commissioners of Chester County, and by the State of Maryland. The disputed segment, of course, is not located in Maryland. Reviewing the evidentiary submissions, Review Board No. 5 concluded:
(1) (The) OCTR has presented no evidence indicating that there is any need for service on the Chadds Ford Junction to Wawa segment of the line. . . . No shippers have come forward to demand service. The only potential shipper in this segment, the Korman Corporation, is years away from having a facility in need of rail service. According to the (Concord) Township, there are no other industries in the segment that need rail service. There is no economic development planned in the (Concord) Township that can use the OCTR. The OCTR's response that the existence of the railroad service will attract service is speculative. . . .
(2) SEPTA does not know when and if the segment of the line will be rebuilt. SEPTA has no immediate plans to rebuild the two bridges between Concordville and Wawa and restore that segment of the line. OCTR cannot provide rail service until repairs are made. We cannot issue a certificate authorizing operations over this ...