Presenting a live 90-minute webinar with interactive Q&A
Local Regulation of Railroads: Guidance forMunicipal Attorneys on Navigating theComplexities of Federal PreemptionStrategies for Exercising Local Control to Address Nuisance, Liability and Economic Issues
1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific
TUESDAY, MARCH 8, 2016
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Today’s faculty features:
1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific
Michael N. Conneran, Partner, Hanson Bridgett, San Francisco
Charles Spitulnik, Partner, Kaplan Kirsch Rockwell, Washington, D.C.
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Local Regulation of Railroads:Guidance for Municipal Attorneys onNavigating the Complexities of FederalPreemption
Strafford Live WebinarMarch 8, 2016Strafford Live WebinarMarch 8, 2016
Michael Conneran, Partner Charles Spitulnik, Partner
THE BASICS
• Surface Transportation Board
• Federal Railroad Administration
• Labor Issues
• The Courts - FELA
• Surface Transportation Board
• Federal Railroad Administration
• Labor Issues
• The Courts - FELA
6
Interstate Commerce Act of 1887
Imposed regulation of railroads:• Prohibited discrimination among shippers• Required publication of rates
7
Deregulation – 1976-1995
Combatting “the disappearing railroad blues,”Congress enacted new laws aimed at makingrailroads solvent:• 4R Act (1976) – Fewer controls on rates• Staggers Rail Act of 1980– More deregulation,
allows railroads to share tracks• Interstate Commerce Commission Termination
Act (ICCTA) of 1995
Combatting “the disappearing railroad blues,”Congress enacted new laws aimed at makingrailroads solvent:• 4R Act (1976) – Fewer controls on rates• Staggers Rail Act of 1980– More deregulation,
allows railroads to share tracks• Interstate Commerce Commission Termination
Act (ICCTA) of 1995
8
ICCTA of 1995
• Abolished Interstate Commerce Commission(ICC)
• Established Surface Transportation Board (STB)under the U.S. Department of Transportation• Now independent based on recent legislative
changes• More limited control of rail operations by federal
agency
• Abolished Interstate Commerce Commission(ICC)
• Established Surface Transportation Board (STB)under the U.S. Department of Transportation• Now independent based on recent legislative
changes• More limited control of rail operations by federal
agency
9
The STB
• Jurisdiction: Interstate Commerce• Rail (all), Water (some), Motor Carrier (some)• … “exclusive and plenary”• Commerce – rates; sales, leases and use
agreements; abandonments
• Jurisdiction: Interstate Commerce• Rail (all), Water (some), Motor Carrier (some)• … “exclusive and plenary”• Commerce – rates; sales, leases and use
agreements; abandonments
11
Other Agencies
• Federal Railroad Administration (FRA) – SafetyAgency that regulates tracks, vehicles, speeds,and conducts safety inspections
• State Public Utilities Commission (PUC)
• Federal Railroad Administration (FRA) – SafetyAgency that regulates tracks, vehicles, speeds,and conducts safety inspections
• State Public Utilities Commission (PUC)
12
Basics for Federal Jurisdiction
• Commerce Clause – Art. I, §8, Cl. 3• Supremacy Clause – Art. VI, Cl. 2
13
Federal Pre-Emption• Remember the key words: “exclusive and
plenary”• Chicago and North Western Transportation
Company v. Kalo Brick and Tile Co. (1991) 450U.S. 311:
“The ICA is among the most pervasive and comprehensive offederal regulatory schemes . . . . Since the turn of the century,we have frequently invalidated attempts by the States toimpose on common carriers obligations that are plainlyinconsistent with the plenary authority of the[ICC] . . .”
• Remember the key words: “exclusive andplenary”
• Chicago and North Western TransportationCompany v. Kalo Brick and Tile Co. (1991) 450U.S. 311:
“The ICA is among the most pervasive and comprehensive offederal regulatory schemes . . . . Since the turn of the century,we have frequently invalidated attempts by the States toimpose on common carriers obligations that are plainlyinconsistent with the plenary authority of the[ICC] . . .”
15
Federal Pre-Emption
• Chicago and North Western TransportationCompany v. Kalo Brick and Tile Co. (1991) 450U.S. 311:
“[There] can be no divided authority over interstatecommerce, and . . . the acts of Congress on thatsubject are supreme and exclusive. [Citation.]Consequently, state efforts to regulate commercemust fall when they conflict with or interfere withfederal authority over the same activity.”(Id. at 318-9.)
• Chicago and North Western TransportationCompany v. Kalo Brick and Tile Co. (1991) 450U.S. 311:
“[There] can be no divided authority over interstatecommerce, and . . . the acts of Congress on thatsubject are supreme and exclusive. [Citation.]Consequently, state efforts to regulate commercemust fall when they conflict with or interfere withfederal authority over the same activity.”(Id. at 318-9.)
16
• IT’S ALL ABOUT SAFETY
• 49 U.S.C. §20106: National Uniformity of Regulation Preemption of State Law
• IT’S ALL ABOUT SAFETY
• 49 U.S.C. §20106: National Uniformity of Regulation Preemption of State Law
17
• 49 CFR Part 209, Appendix AJoint Use of Rail Lines“Connection” of “electric interurban rail
system” to interstate rail system
• 49 CFR Part 209, Appendix AJoint Use of Rail Lines“Connection” of “electric interurban rail
system” to interstate rail system
18
What is an Interstate Carrier?
• Active• Discontinued• Abandoned (not the same as easement
abandonment)• Rails to Trails (“Railbanking”)– Grantwood
Village v. Missouri Pacific Railroad Company• Railroads that look wholly Intrastate• Tourist railroads, plant railroads not included (not
point-to-point)
• Active• Discontinued• Abandoned (not the same as easement
abandonment)• Rails to Trails (“Railbanking”)– Grantwood
Village v. Missouri Pacific Railroad Company• Railroads that look wholly Intrastate• Tourist railroads, plant railroads not included (not
point-to-point)
19
Railway Labor: Also a World Unto Itself
• Railway Labor Act, National Mediation Board• Railroad Retirement/Railroad Unemployment
Insurance• LABOR PROTECTION
• STB• Collective Bargaining• Transit Industry
• FELA
• Railway Labor Act, National Mediation Board• Railroad Retirement/Railroad Unemployment
Insurance• LABOR PROTECTION
• STB• Collective Bargaining• Transit Industry
• FELA
20
City of Auburn v Surface TransportationBoard, 154 F.3d 1025 (9th Cir. 1998)
Auburn:Cities file legal challenges to the re-opening ofStampede Pass line• 229 miles through the Cascades• Auburn at Western terminus – near Seattle N/S line
Auburn:Cities file legal challenges to the re-opening ofStampede Pass line• 229 miles through the Cascades• Auburn at Western terminus – near Seattle N/S line
21
City of Auburn v Surface TransportationBoard, 154 F.3d 1025 (9th Cir. 1998)
BNSF sought STB approval to reacquire line it hadsold to short line operator and segment it usedonly for local traffic• STB prepared Environmental Assessment (EA)
under National Environmental Policy Act (NEPA)
BNSF sought STB approval to reacquire line it hadsold to short line operator and segment it usedonly for local traffic• STB prepared Environmental Assessment (EA)
under National Environmental Policy Act (NEPA)
22
City of Auburn v Surface TransportationBoard, 154 F.3d 1025 (9th Cir. 1998)
City challenged STB decision that found that:i. Local environment permitting laws were
preempted by ICCTAii. STB’s use of Environmental Assessment
(i.e. finding that no Environmental ImpactStatement (EIS) needed to be prepared)
City challenged STB decision that found that:i. Local environment permitting laws were
preempted by ICCTAii. STB’s use of Environmental Assessment
(i.e. finding that no Environmental ImpactStatement (EIS) needed to be prepared)
23
City of Auburn v Surface TransportationBoard, 154 F.3d 1025 (9th Cir. 1998)
City of Auburn contentions on appeal to 9th Circuit:• City claims no express preemption of local
regulation:– Says Congress meant to preempt economic
regulation, not “essential local police powerrequired to protect the health or safety ofcitizens.”
City of Auburn contentions on appeal to 9th Circuit:• City claims no express preemption of local
regulation:– Says Congress meant to preempt economic
regulation, not “essential local police powerrequired to protect the health or safety ofcitizens.”
24
City of Auburn v Surface TransportationBoard, 154 F.3d 1025 (9th Cir. 1998)
Court rejects City’s position--opinion notes longhistory of judicial recognition that rail operationsneed to be regulated at the federal, not local, level
25
City of Auburn v Surface TransportationBoard, 154 F.3d 1025 (9th Cir. 1998)
Auburn court cited Chicago and North WesternTransportation Company v. Kalo Brick and TileCompany:• Interstate Commerce Act (ICA) is “among the
most persuasive and comprehensive federalregulatory schemes” (450 U.S. 311,318)
Auburn court cited Chicago and North WesternTransportation Company v. Kalo Brick and TileCompany:• Interstate Commerce Act (ICA) is “among the
most persuasive and comprehensive federalregulatory schemes” (450 U.S. 311,318)
26
City of Auburn v Surface TransportationBoard, 154 F.3d 1025 (9th Cir. 1998)
Does legislative history of ICCTA help city? No!1. 49 U.S.C. §10501(b)(2): STB will have
exclusive jurisdiction over “the construction,acquisition, operation, abandonment, ordiscontinuance of spur, industrial, team,switching, or side tracks, or facilities . . . .”
2. Remedies are exclusive and preempt local law
Does legislative history of ICCTA help city? No!1. 49 U.S.C. §10501(b)(2): STB will have
exclusive jurisdiction over “the construction,acquisition, operation, abandonment, ordiscontinuance of spur, industrial, team,switching, or side tracks, or facilities . . . .”
2. Remedies are exclusive and preempt local law
27
City of Auburn v Surface TransportationBoard, 154 F.3d 1025 (9th Cir. 1998)
Auburn court noted that STB also has exclusiveauthority over rail line mergers and acquisitionsand stated:• “[A] rail carrier participating in that approved or
exempted transaction is exempt from . . . allother law, including state and municipal law…”
Auburn court noted that STB also has exclusiveauthority over rail line mergers and acquisitionsand stated:• “[A] rail carrier participating in that approved or
exempted transaction is exempt from . . . allother law, including state and municipal law…”
28
City of Auburn v Surface TransportationBoard, 154 F.3d 1025 (9th Cir. 1998)
Also rejected City’s NEPA challenge, finding theEnvironmental Assessment was adequate and thepreparation of an Environmental Impact Statementwas not required.
29
Applying Auburn (and ICCTA) tospecific issues:• Construction and Operation• Environmental Review• Nuisances• Condemnation• Franchises• Crossings
• Construction and Operation• Environmental Review• Nuisances• Condemnation• Franchises• Crossings
30
Construction and Operation
Courts find state law controls are preempted:• Boston and Maine and Town of Ayer (Joint Petition for
Declaratory Order to STB) (Auto unloading facility)• Amer. Assn. of RR v. South Coast AQMD (diesel idling)Some exceptions:• Enforcement of public health and safety regulations where it
does not interfere with rail operations (Stampede Pass,Riverdale)
• Voluntary Agreements (Township of Woodbridge)• Enforcement of Clean Water Act (Humboldt Baykeeper)
Courts find state law controls are preempted:• Boston and Maine and Town of Ayer (Joint Petition for
Declaratory Order to STB) (Auto unloading facility)• Amer. Assn. of RR v. South Coast AQMD (diesel idling)Some exceptions:• Enforcement of public health and safety regulations where it
does not interfere with rail operations (Stampede Pass,Riverdale)
• Voluntary Agreements (Township of Woodbridge)• Enforcement of Clean Water Act (Humboldt Baykeeper)
31
Environmental Review
Courts find state law requiring reviews are preempted:• City of Encinitas (construction of side track for commute rail)
(North San Diego County Transit Development Board –Petition for Declaratory Order to STB)
• Friends of the Eel River v. North Coast Rail Authority (Cal.Supreme Court Case No S222472).
• City of Atherton v. California High Speed Rail Authority ((2014)228 Cal.App.4th) (Challenge to CA High Speed Rail Project)
• Green Mountain Railroad Corp. v State of Vermont (D.C.Vermont 2003) 1003 U.S. Dist. LEXIS 23774
Courts find state law requiring reviews are preempted:• City of Encinitas (construction of side track for commute rail)
(North San Diego County Transit Development Board –Petition for Declaratory Order to STB)
• Friends of the Eel River v. North Coast Rail Authority (Cal.Supreme Court Case No S222472).
• City of Atherton v. California High Speed Rail Authority ((2014)228 Cal.App.4th) (Challenge to CA High Speed Rail Project)
• Green Mountain Railroad Corp. v State of Vermont (D.C.Vermont 2003) 1003 U.S. Dist. LEXIS 23774
32
Nuisances
• Gluckenberg v. Wisc. Central Ltd.• Friberg• Village of Ridgefield Park
Courts, STB reject local attempts to regulate noise, etc. from railopertions• Recent STB Decision:
Norfolk Southern Railway received confirmation that Delawarestatute restricting locomotive idling is preempted
• Gluckenberg v. Wisc. Central Ltd.• Friberg• Village of Ridgefield Park
Courts, STB reject local attempts to regulate noise, etc. from railopertions• Recent STB Decision:
Norfolk Southern Railway received confirmation that Delawarestatute restricting locomotive idling is preempted
33
Condemnation
State court condemnation actions barred:• Commonwealth v. Bartlett (1st Cir. 1967) 384 F.2d 819• Wisconsin Central Ltd. V. City of Marshfield (W.D. Wisc. 2000)
160 F. Supp. 2d 1009• In re Metropolitan Transportation Authority (2006) 823
N.Y.S.2d 88Options:
-Condemnation of non-rail properties permitted-Potential to have track removed from federal jurisdiction
by means of “adverse abandonment”
State court condemnation actions barred:• Commonwealth v. Bartlett (1st Cir. 1967) 384 F.2d 819• Wisconsin Central Ltd. V. City of Marshfield (W.D. Wisc. 2000)
160 F. Supp. 2d 1009• In re Metropolitan Transportation Authority (2006) 823
N.Y.S.2d 88Options:
-Condemnation of non-rail properties permitted-Potential to have track removed from federal jurisdiction
by means of “adverse abandonment”
34
Franchises
• Union Pacific Railroad Company - Petition for DeclaratoryOrder, STB Finance Docket No. 34090 (Decided: November7, 2001):
“[E]ven assuming that the City's interpretation of theFranchise Agreement is correct, its enforcement of theFranchise Agreement is no less an attempt to regulatethe abandonment of an interstate line of railroad than ifthe City promulgated laws for the same purpose.”
• New Orleans Terminal, 366 F.2d at 163-64,• Des Moines v. Chicago & N.W. R. Co., 264 F.2d 454, 457-60
(8th Cir. 1959),
• Union Pacific Railroad Company - Petition for DeclaratoryOrder, STB Finance Docket No. 34090 (Decided: November7, 2001):
“[E]ven assuming that the City's interpretation of theFranchise Agreement is correct, its enforcement of theFranchise Agreement is no less an attempt to regulatethe abandonment of an interstate line of railroad than ifthe City promulgated laws for the same purpose.”
• New Orleans Terminal, 366 F.2d at 163-64,• Des Moines v. Chicago & N.W. R. Co., 264 F.2d 454, 457-60
(8th Cir. 1959),
35
Crossings
• People v. Burlington Northern Santa Fe Railroad(2012) 209 Cal.App.4th
State rule regulating blockage of grade crossingsfound to be preempted
• Not a preemption issue exclusively but a seriousconcern that merits some discussion
• People v. Burlington Northern Santa Fe Railroad(2012) 209 Cal.App.4th
State rule regulating blockage of grade crossingsfound to be preempted
• Not a preemption issue exclusively but a seriousconcern that merits some discussion
36
Stop that train?
• Not gonna happen
• At 55 mph, a train can take one mile to stop
• Safety focus must be on controlling cars andtrucks
• Not gonna happen
• At 55 mph, a train can take one mile to stop
• Safety focus must be on controlling cars andtrucks
37
Crossing Signals—Not Always Enough!
• 50% of collisions occur atsignalized intersections– Source: Operation Lifesaver
• 50% of collisions occur atsignalized intersections– Source: Operation Lifesaver
38
Sound the horn!
• Locomotive engineers rely on horns for safety
• Horns are noisy but the best safety deviceavailable
• Locomotive engineers rely on horns for safety
• Horns are noisy but the best safety deviceavailable
39
Federal Law Controls Local Attemptsto Limit Noisy Horns
• Federal law is supreme regarding regulation ofinterstate commerce
• Federal law is plenary with regard to railroadoperations
• “What part of ‘plenary’ don’t you understand?”
• Federal law is supreme regarding regulation ofinterstate commerce
• Federal law is plenary with regard to railroadoperations
• “What part of ‘plenary’ don’t you understand?”
40
Congress Acts: PL 103-44049 USC §20153• 1994 statute requires DOT to issue regulations
requiring that train horns be sounded at publiccrossings
• Allows FRA to grant exemptions via rulemakingprocess
• Regulations will pre-empt non-compliant localbans
• 1994 statute requires DOT to issue regulationsrequiring that train horns be sounded at publiccrossings
• Allows FRA to grant exemptions via rulemakingprocess
• Regulations will pre-empt non-compliant localbans
41
Who can establish quiet zones?
• “Public Authorities” = agencies “responsible fortraffic control or law enforcement” (i.e. cities,counties etc.)
• Not railroads, nor the state PUC
• “Public Authorities” = agencies “responsible fortraffic control or law enforcement” (i.e. cities,counties etc.)
• Not railroads, nor the state PUC
42
What can be done?
• Localities can now declare quiet zones underthe conditions specified in the FRA rule
43
Alternate Safety Measures
• Require prior FRA approval• Allows use of measures that don’t qualify as SSM’s• OK to use “corridor approach” to average risks within
quiet zone• Education/enforcement program (including photo
enforcement)
• Require prior FRA approval• Allows use of measures that don’t qualify as SSM’s• OK to use “corridor approach” to average risks within
quiet zone• Education/enforcement program (including photo
enforcement)
44
Issues for Cities and Counties• Who pays for intersection improvements?
– Federal rule is silent on this point– If you want a quiet zone, must you pay for it? (Answer:
probably!)
• Potential sources of funding:– Assessment Districts– Developer mitigations– Grants– Bond Proceeds– Sales Tax
• Who pays for intersection improvements?– Federal rule is silent on this point– If you want a quiet zone, must you pay for it? (Answer:
probably!)
• Potential sources of funding:– Assessment Districts– Developer mitigations– Grants– Bond Proceeds– Sales Tax
45
Railroad Concerns
• Railroads focused of freight movement• Railroads have other capital priorities for their
$$$• Liability issues are of concern
• Railroads focused of freight movement• Railroads have other capital priorities for their
$$$• Liability issues are of concern
46
Addressing Liability
• Text of rule is silent on liability• Federal law preempts certain state law actions,
such as:– Actions based on creation of quiet zones– Actions for failure to sound horn
• FRA declined to require localities to indemnifyRR’s
• RR’s may demand indemnity in exchange formaking improvements (no prohibition in rule)
• Text of rule is silent on liability• Federal law preempts certain state law actions,
such as:– Actions based on creation of quiet zones– Actions for failure to sound horn
• FRA declined to require localities to indemnifyRR’s
• RR’s may demand indemnity in exchange formaking improvements (no prohibition in rule)
47