Indiana Boxcar Corporation v. Railroad Retirement Board

Summary

The D.C. Circuit reviewed the Railroad Retirement Board’s determination that Indiana Boxcar Corporation was an employer under the Railroad Retirement Act and Railroad Unemployment Insurance Act because it was under common control with railroad subsidiaries and performed services connected with railroad transportation. The court held that the Board departed from its precedent concerning parent-subsidiary relationships without adequately explaining or justifying the departure. The court therefore found the decision arbitrary and capricious, vacated it, and remanded the matter to the Board.

Holdings

1. The Board's determination that Indiana Boxcar and its railroad subsidiaries were under common control conflicted with the Board's prior precedent applying Union Pacific to parent-subsidiary relationships, including closely held private corporations.
2. An agency acts arbitrarily and capriciously when it departs from its past precedent without reasonably explaining and justifying the departure.

Questions Presented

1. Whether the Railroad Retirement Board reasonably determined that Indiana Boxcar was under common control with its railroad subsidiaries under the Railroad Retirement Act and the Railroad Unemployment Insurance Act.
2. Whether the Board acted arbitrarily and capriciously under the Administrative Procedure Act by departing from its precedent without adequately explaining and justifying the departure.

Disposition

vacated