 United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT



Argued January 23, 2008           Decided February 22, 2008

                       No. 07-1088

                      HOLRAIL, LLC,
                       PETITIONER

                             v.

          SURFACE TRANSPORTATION BOARD AND
              UNITED STATES OF AMERICA,
                    RESPONDENTS

               CSX TRANSPORTATION, INC.,
                     INTERVENOR


         On Petition for Review of an Order of the
              Surface Transportation Board



     Jeffrey O. Moreno argued the cause and filed the briefs
for petitioner.

     Jeffrey D. Komarow, Attorney, Surface Transportation
Board, argued the cause for respondent. With him on the
brief were Thomas O. Barnett, Assistant Attorney General,
U.S. Department of Justice, Robert B. Nicholson and John P.
Fonte, Attorneys, Ellen D. Hanson, General Counsel, Surface
Transportation Board, and Evelyn G. Kitay, Associate General
                               2
Counsel. Craig M. Keats, Deputy General Counsel, entered
an appearance.

    Louis E. Gitomer was on the brief for intervenor. Paul R.
Hitchcock entered an appearance.

    Before:    TATEL, BROWN, and KAVANAUGH, Circuit
Judges.

    Opinion for the Court filed by Circuit Judge TATEL.

     TATEL, Circuit Judge: Under 49 U.S.C. § 10901(d), an
existing railroad may not, except in certain limited
circumstances, block construction of a new rail line by
“refusing to permit the [new] carrier to cross its property.” In
this case, the Surface Transportation Board held that the word
“cross” does not include one carrier’s construction of a new
line on another’s right-of-way. We agree.

                               I.
     In 1894, Andrew Carnegie, unhappy with the rates the
Pennsylvania Railroad was charging to ship coke to his steel
mills in Pittsburgh, joined New York Central Railroad’s
attempt—led by its chief stockholder, William Henry
Vanderbilt—to build a competing railroad, the South
Pennsylvania. See DAVID NASAW, ANDREW CARNEGIE 252-
55 (2006). Over a century later and following in Carnegie’s
footsteps, petitioner HolRail LLC, unhappy with the service
provided and rates charged by CSX Transportation, Inc.
(CSXT), proposes to build its own railroad to ship materials
to and from its cement and masonry products plant in Holly
Hill, South Carolina. CSXT provides exclusive rail service
for the Holly Hill facility for both outgoing products and
incoming raw materials. Its tracks run south for two miles
                               3
from the Holly Hill facility along a narrow right-of-way,
bordered by wetlands to the east and a highway to the west, to
a line operated by the Norfolk Southern. HolRail proposes to
build its own line connecting the Holly Hill facility to the
Norfolk Southern line.

    In a petition to the Surface Transportation Board, HolRail
proposed two possible routes for its 2.3-mile railroad. But
unlike Carnegie and Vanderbilt, who started building their
new railroad on their own property—which, after the
project’s abandonment, became the roadbed for part of the
Pennsylvania Turnpike—HolRail’s preferred route ran for 1.7
miles along CSXT’s right-of-way. Its alternate route ran
parallel to CSXT’s tracks but on HolRail’s own property.

     Ordinarily, carriers wishing to construct a railroad ask the
Board to issue a certificate of “public convenience and
necessity” pursuant to 49 U.S.C. § 10901(c). HolRail instead
sought an exemption from the certificate requirement by
filing a petition under 49 U.S.C. § 10502(a), which allows the
Board to exempt carriers from certain rail transportation
requirements. All parties agree, however, that HolRail’s
decision to file a section 10502(a) exemption petition rather
than a section 10901(a) petition for a certificate of public
convenience and necessity makes no difference: if the Board
grants a section 10502(a) exemption request, it summarily
issues a certificate of public convenience and necessity. See
Midwest Generation, LLC, 6 S.T.B. 398, 401-02 (Oct. 3,
2002).

    In its exemption petition, HolRail said that to construct
the preferred route, it would file a petition pursuant to 49
U.S.C. § 10901(d) to “cross” CSXT’s right-of-way. Section
10901(d) provides:
                               4
       (1) When a certificate has been issued by the
       Board under this section authorizing the
       construction or extension of a railroad line, no
       other rail carrier may block any construction or
       extension authorized by such certificate by
       refusing to permit the carrier to cross its
       property if—
           (A)      the    construction    does     not
           unreasonably interfere with the operation
           of the crossed line;
           (B) the operation does not materially
           interfere with the operation of the crossed
           line; and
           (C) the owner of the crossing line
           compensates the owner of the crossed line.

49 U.S.C. § 10901(d)(1) (emphasis added). If a carrier
refuses to consent to a crossing, the owner of the crossing line
may petition the Board for authority to cross.               Id.
§ 10901(d)(2) (“If the parties are unable to agree on the terms
of operation or the amount of payment for purposes of
paragraph (1) of this subsection, either party may submit the
matters in dispute to the Board for determination.”). Denying
consent to the crossing, CSXT moved to dismiss HolRail’s
exemption petition.

    The Board, observing that “HolRail’s entire case—
indeed, even the details of how its construction proposal will
look—is inextricably bound up with the crossing issue,”
deferred judgment on HolRail’s exemption request until
HolRail filed its crossing petition. STB Finance Docket No.
34421 (Sub-No. 1) at 3 (Oct. 20, 2004). “As a practical
matter,” one Board member wrote, “it appears that the only
way HolRail could build its preferred route is by ‘taking’
                               5
CSXT’s right-of-way for essentially the entire line it wants to
construct.” Id. at 5.

     Following discovery, HolRail filed a formal crossing
petition for its preferred route. CSXT opposed the petition
but took no position on the alternate route. The Board then
denied HolRail’s crossing petition, concluding that
“HolRail’s request does not come within the intended scope
and purpose of [49 U.S.C. § 10901(d)].” STB Finance
Docket No. 34421 (Sub-No. 1) at 1 (Feb. 9, 2007) (“Crossing
Decision”). The Board explained:

        We do not believe that Congress envisioned or
        meant to mandate arrangements of the sort
        presented here, where the proponent of a new
        line seeks to use section 10901(d) as a
        substitute for obtaining its own right-of-way
        for a significant amount of the property that it
        would need. . . . There is no indication that by
        enacting the crossing statute Congress meant
        to provide a means by which a new carrier
        could avail itself of a significant portion of an
        incumbent carrier’s right-of-way in lieu of
        obtaining its own right-of-way, regardless of
        the difficulties it would otherwise face. Had
        Congress meant to provide for a new
        competitor to access the private property of an
        incumbent rail carrier to that degree, it
        presumably would have discussed such a
        significant change.

Id. at 5.

    Having denied the crossing petition, the Board dismissed
as moot HolRail’s exemption petition, “which depend[ed]
                                6
upon that crossing authority.” Id. at 7. HolRail’s alternate
route remains pending before the Board. HolRail now
petitions for review. See 28 U.S.C. § 2342(5) (authorizing
review by the Court of Appeals of “all rules, regulations, or
final orders of the Surface Transportation Board”).

                               II.
     We review the Board’s interpretation of section 10901(d)
under the familiar principles of Chevron U.S.A. Inc. v. NRDC,
Inc., 467 U.S. 837 (1984). We first “employ[] traditional
tools of statutory construction” to determine “whether
Congress has directly spoken to the precise question at issue.”
Id. at 842, 843 n.9. “If the intent of Congress is clear, that is
the end of the matter.” Id. at 842. “[I]f the statute is silent or
ambiguous with respect to the specific issue,” however, we
proceed to step two and defer to any “permissible
construction of the statute” offered by the agency. Id. at 843;
see also W. Coal Traffic League v. Surface Transp. Bd., 216
F.3d 1168, 1171 (D.C. Cir. 2000) (deferring to the Board’s
reasonable interpretation).

     HolRail argues that the Board’s interpretation of section
10901(d) contravenes Congress’s unambiguously expressed
intent. According to HolRail, “the only grounds for denying a
crossing of property by a Board-authorized rail construction
are those listed in sub[sections] (A)-(C).” Pet’r’s Opening Br.
29. Under those subsections, railroads must permit other
carriers to cross their property if the new line will not
“interfere with the operation of the crossed line” and if “the
owner of the crossing line compensates the owner of the
crossed line.” 49 U.S.C. § 10901(d)(1)(A)-(C). If these
conditions are met, HolRail argues, the Board must grant the
crossing petition.
                                7
    HolRail ignores section 10901(d)’s operative phrase,
“cross its property.” Before the Board considers whether
subsections (A) through (C) apply, it must first determine
whether HolRail’s preferred route even amounts to a crossing.
Absent a crossing, the Board would have no need to consider
subsections (A) through (C), and nothing in section 10901(d)
or any other provision of the statute would prohibit CSXT
from denying HolRail access to its right-of-way.

     Therefore, as HolRail concedes in its reply brief, the
“precise question at issue,” Chevron, 467 U.S. at 842, is
“whether HolRail’s [p]referred [r]oute falls within the
meaning of ‘to cross [another railroad’s] property’ in 49
U.S.C. § 10901(d)(1).” Pet’r’s Reply Br. 3-4 (third alteration
in original). According to HolRail, the answer to this
question is unambiguously yes.             Invoking dictionary
definitions, HolRail argues that “any and all Board-authorized
construction of a rail line that involves an incursion onto,
across or over the property of another railroad” qualifies as a
crossing, and that its preferred route satisfies these definitions
because it “crosses” onto CSXT’s property. Id. at 7. For its
part, the Board concluded that the statute unambiguously
supports its position, i.e., that HolRail’s preferred route does
not qualify as a “crossing.” “As the plain language of the
statute makes clear,” the Board explained, “Congress’s
purpose was to remove an incumbent carrier’s ability to
obstruct or prevent the construction and operation of a new
rail line by unreasonably refusing to provide the sort of
reasonable accommodations that have long been common in
the railroad industry and which enable the constructing carrier
to intrude slightly upon the incumbent’s property to connect
segments of the proposed new line that would otherwise be
separated.” Crossing Decision at 5.
                               8
     We agree with the Board. Although the term “cross”
may have multiple meanings in some circumstances,
“[a]mbiguity is a creature not of definitional possibilities but
of statutory context.” Brown v. Gardner, 513 U.S. 115, 118
(1994). “In determining whether a statutory provision speaks
directly to the question before us, we consider it in context.”
Holly Sugar Corp. v. Johanns, 437 F.3d 1210, 1213 (D.C.
Cir. 2006). Thus, “[t]he issue is not so much whether the
word ‘[cross]’ is, in some abstract sense, ambiguous, but
rather whether, read in context . . . , the term ‘[cross]’
encompasses” HolRail’s preferred route. Cal. Indep. Sys.
Operator Corp. v. FERC, 372 F.3d 395, 400 (D.C. Cir. 2004).
Viewed in the “context” of this case, the word “cross” is
hardly ambiguous. HolRail’s preferred route never crosses
CSXT’s right-of-way in any ordinary sense of that word.
Instead, it enters CSXT’s right-of-way, runs along it for 1.7
miles—or two-thirds of the route’s length—then exits the
right-of-way on the same side from which it entered. If this
amounts to a “crossing,” then nothing would prevent HolRail
from using section 10901(d) to force Norfolk Southern—or
for that matter, any other carrier that ships its products—to
permit the construction of a competing line on its right-of-
way as well. Nothing in section 10901(d)’s text or legislative
history even hints that Congress intended the provision to be
used in such a way. As the Board pointed out, “[h]ad
Congress meant to provide for a new competitor to access the
private property of an incumbent rail carrier to that degree, it
presumably would have discussed such a significant change.”
Crossing Decision at 5. Because the statute, read in context,
clearly resolves the case in the Board’s favor, we have no
need to proceed to Chevron step two.

    Before the Board, HolRail relied on Burlington Northern
& Santa Fe Railway Co., 6 S.T.B. 862 (May 9, 2003), in
which the Board allowed one carrier, whose tracks had
                              9
always crossed the right-of-way of another carrier, to use the
latter’s right-of-way for a quarter of a mile in order to
accommodate a track realignment that had disrupted the
existing crossing. As the Board explained, that situation
differed significantly from HolRail’s preferred route. In that
case, the crossing carrier “was not seeking to use [the crossed
carrier]’s property to attract new customers or reach new
markets, but only to continue to access its own shippers on its
own line after a track realignment that necessitated a change
in what had been a longstanding crossing.” Crossing
Decision at 6.

                             III.
     Finally, HolRail argues that the Board should have
resolved its section 10502(a) exemption petition before
addressing the crossing issue. In support, it points out that
section 10901(d) begins “[w]hen a certificate has been issued
by the Board . . . .” From this, HolRail contends that the
Board may consider a crossing petition only after it has issued
a certificate of public convenience and necessity pursuant to
section 10901(c). We disagree. Although section 10901(d)
certainly requires the Board to consider a crossing petition
once it has issued a certificate of public convenience and
necessity, nothing in that provision or anything else in the
statute bars the Board from proceeding first with the crossing
issue where, as here—and as HolRail’s counsel conceded at
oral argument—HolRail has no way of proceeding with its
preferred route without obtaining crossing authority. See Vt.
Yankee Nuclear Power Corp. v. NRDC, 435 U.S. 519, 524
(1978) (stating that absent statutory requirements, “the
formulation of procedures [i]s basically to be left within the
discretion of the agencies to which Congress ha[s] confided
the responsibility for substantive judgments”). Indeed, it
would make no sense at all to require the Board to issue a
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certificate of public convenience and necessity for a rail line
that could never be built. We deny the petition for review.

                                                   So ordered.
