The U.S. Court of Appeals said yesterday that while the Louisville and Nashville Railroad Company had a "very poor safety record" for transportation of hazardous materials, that generalization was not enough to support a broad order by the Federal Railroad Administration to impose speed limits and other restrictions on the entire 10,600-mile system.

The appeals panel said that federal law does not authorize the FRA administrator to "take over the operation of an entire railroad" unless there is specific evidence to show all the track is in "unsafe condition." The administrator must show that some particular "facility or piece of equipment" is unsafe and thus creates an emergency situation, the appeals court said.

The majority noted that seven of 18 accidents cited in the FRA order were not caused by track defects.

"We are not unmindful of the large number of very serious accidents on the railroads of the United States involving hazardous materials," the majority said. The reasons for the accidents can be complex, however, and the FRA must set out the particular track or equipment that caused a hazard to justify an emergency order, the court said.

Judges George E. MacKinnon and Roger Robb joined in an unsigned opinion for the majority filed yesterday. The FRA had asked the appeals court to postpone the effectiveness of a ruling last June by U.S. District Court Judge Gerbard Gessell until the full case was heard on appeal. Gesell had set aside the FRA order.

In a dissenting opinion, Judge Malcolm R. Wilkey said the L&N railroad "stands high among the worst offenders" in the number of accidents, cars involved and the number of cars releasing hazardous materials. The statistics, Wilkey said, show that the "entire track facility" is in unsafe condition. The administrator issued a "broad brush order" because he was faced with "the breakdown of safe track conditions scattered all over the L&N system," Wilkey said.