Union Pacific R. Co. v. California Public Utilities, 01-15141.

Citation346 F.3d 851
Decision Date17 June 2003
Docket NumberNo. 01-15531.,No. 01-15141.,01-15141.,01-15531.
PartiesUNION PACIFIC RAILROAD COMPANY, Southern Pacific Transportation Company, Burlington Northern and Santa Fe Railway Company, Plaintiffs-Appellants, and Brotherhood of Locomotive Engineers, United Transportation Union, Intervenors, v. CALIFORNIA PUBLIC UTILITIES COMMISSION, P. Gregory Conlon, Jessie J. Knight, Henry M. Duque, Josiah L. Neeper, Richard A. Bilas, Commissioners of the California Public Utilities Commission, in their individual capacities, Defendants-Appellees. Union Pacific Railroad Company, Southern Pacific Transportation Company, Burlington Northern and Santa Fe Railway Company, Plaintiffs-Appellees, and Brotherhood of Locomotive Engineers; United Transportation Union, Intervenors, v. California Public Utilities Commission, Defendant-Appellant, and P. Gregory Conlon, Jessie J. Knight, Henry M. Duque, Josiah L. Neeper, Richard A. Bilas, Commissioners of the California Public Utilities Commission, in their individual capacities, Defendants.
CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)

Maureen E. Mahoney, Latham & Watkins, Washington, D.C., argued the cause for the plaintiffs-appellants-cross-appellees and filed briefs; William S. Carnell, Latham & Watkins, Washington, D.C., Carol A. Harris, Union Pacific Railroad Company, San Francisco, California, and Richard E. Weicher and Ward D. Werner, The Burlington Northern & Santa Fe Railway Company, Fort Worth, Texas, were on the briefs.

Patrick S. Berdge, Public Utilities Commission of the State of California, San Francisco, California, argued the cause for the defendants-appellees-cross-appellants and filed briefs; Gary M. Cohen and Ellen S. Levine, Public Utilities Commission of the State of California, San Francisco, California, were on the briefs.

Lawrence M. Mann, Alper & Mann, Washington, D.C., argued the cause for the intervenors United Transportation Union and Brotherhood of Locomotive Engineers, and filed a brief.

Irene M. Solet, Attorney, Appellate Staff Civil Division, Department of Justice, Washington, D.C., argued the cause for the amicus curiae, United States, and filed briefs; Kirk K. Van Tine, General Counsel, Rosalind A. Knapp, Acting General Counsel, Paul Geier, Assistant Attorney General Counsel, and Paul Smith, Senior Trial Attorney, Department of Transportation, Washington, D.C., S. Mark Lindsey, Chief Counsel, Daniel C. Smith, Assistant Chief Counsel, and Colleen Brennan, Trial Attorney, Federal Railroad Administration, Washington, D.C., and Robert D. McCallum, Jr., Assistant Attorney General, Stuart E. Schiffer, Acting Assistant Attorney General, Robert S. Mueller, III, United States Attorney, David W. Shapiro, United States Attorney, and Douglas Letter, Attorney, Appellate Staff Civil Division, Department of Justice, Washington, D.C., were on the briefs.

Appeal from the United States District Court for the Northern District of California; Thelton E. Henderson, District Judge, Presiding. D.C. No. CV-97-03660-TEH(PJH).

Before: William C. Canby, Jr., Diarmuid F. O'Scannlain, and William A. Fletcher, Circuit Judges.

OPINION

O'SCANNLAIN, Circuit Judge.

We must decide whether California's regulations governing railroad track standards and internal railroad rules, which were adopted in response to train derailments within the state, are preempted by federal railroad safety laws or regulations.

I

On July 14, 1991, a train operated by the Southern Pacific Transportation Company derailed at the Cantara Loop near Dunsmuir California and spilled metam sodium into the Sacramento River. The metam sodium killed fish and vegetation along the river for forty miles and caused wide-spread health problems for area residents. Two weeks later, a Southern Pacific train was also involved in another toxic spill resulting from a derailment near Seacliff, California.

The California legislature responded to these accidents by directing the California Public Utilities Commission ("CPUC") to identify "local safety hazard[s]" on California's railways and to adopt regulations "to reduce the potential railroad hazards" at those sites. Cal. Pub. Util.Code §§ 7711, 7712. CPUC was directed to consider factors such as (1) the severity of the grade and curve, (2) the value of special skills of train operators in negotiating such sites, (3) the value of special railroad equipment in negotiating the rail segment, (4) the types of commodities transported on the segment, (5) the hazard posed by the release of the commodity into the environment, (6) the proximity of railroad activity to human activity or sensitive environmental areas, and (7) the history of accidents at or near hazard sites. Id. § 7711(d), (e).

CPUC was further directed to consider "[e]stablishing special train operating standards for trains operated over railroad sites identified as posing a local safety hazard." Id. § 7712(c). Specifically, CPUC was required to consider standards governing "the length, weight, and weight distribution" of trains and "special training, personnel and performance standards for operators of trains" that travel on the identified sites. Id. § 7712(c), (d).

In August 1991, CPUC ordered an investigation into the Dunsmuir and Seacliff derailments. In December 1994, CPUC issued its decision regarding the derailment, which found the Cantara Loop to be a "local safety hazard." CPUC concluded that the derailment was caused by tracktrain dynamics ("TTD") and the configuration of the train cars. In this case, light empty railcars were placed at the head-end of the train on a severe grade and curve combination. In re S. Pac. Transp. Co., 57 CPUC 2d 386, 400-01 (Nov. 22, 1994). The light railcars were pulled off the inside radius of the Cantara Loop by the heavier loaded railcars behind them causing the train to derail. Id. CPUC concluded that the railroad "knew or should have known" of the likelihood of derailment due to the unsafe configuration. Id. The railroad, however, was not in violation of any FRA rules or of its own internal TTD rules, and accordingly, no disciplinary action was taken against it. Id. at 404.

Following the California legislature's direction, CPUC also issued an order in March 1992 instituting an investigation into all potential railroad safety hazards in California. CPUC issued a final order in 1997 identifying nineteen sites located in California mountains as local safety hazards1 and adopting regulations governing operations at thirteen of these sites. See Rulemaking on Comm'ns Own Motion to Provide for Mitigation of Local Rail Safety Hazards within California, 75 CPUC 2d 1, 120-43, available at 1997 WL 616304 (Sept. 3, 1997) (hereinafter "1997 CPUC Rulemaking"). CPUC's order required the Railroads: (1) to cooperate in developing performance-based standards for train configuration based on TTD; (2) to develop standards for dynamic braking systems (3) to equip trains with two-way end-of-train telemetry devices; (4) to institute new training programs; (5) to install more hot bearing trackside defect detectors; (6) to adopt heightened standards for securing standing trains; (7) to maintain current track strength at one particular site; and (8) not to discipline railroad employees who report violations of the new regulation. Id. at 168-73. According to CPUC, these rules were enacted "out of sheer necessity to protect California's people, its environment and its commerce against the disastrous consequences of recent rail accidents and toxic spills." Id. at 2.

On October 9, 1997, Union Pacific Railroad, Southern Pacific Transportation Company,2 and Burlington Northern & Santa Fe Railway Company (collectively "the Railroads") sued to enjoin some of the regulations contending that they were preempted by, among other laws, the Federal Railroad Safety Act ("FRSA"), the Locomotive Boiler Inspection Act ("LBIA"), or the Safety Appliance Act ("SAA"), and that they impermissibly burdened interstate commerce. The United Transportation Union and Brotherhood of Locomotive Engineers (collectively "the Unions") intervened as party defendants.3

The district court granted the Railroads' motion for a preliminary injunction in part on November 26, 1997. We affirmed the grant on September 4, 1998, without resolving the merits of the underlying legal challenges. See Union Pac. R.R. v. Cal. Pub. Utils. Comm'n, 161 F.3d 16, 1998 WL 613794, at *3 (9th Cir. Sept. 4, 1998) 1998 U.S.App. LEXIS 22118.

On July 20, 2000, the district court, in a memorandum and order that were later amended, granted both parties' motions for summary judgment in part.4 The court concluded that the following CPUC rules were preempted:5 (1) rule requiring the Railroads to cooperate in the development and implementation of performance-based train make-up standards for sites 1, 3, 4, 7, 9, 12, 16, 22, 23, 26, 28, 29, and 31;6 (2) rule requiring the Railroads to obtain CPUC approval prior to making changes to their own internal TTD rules; and (3) rule requiring separate training program for train make-up rules. Union Pac. R.R. v. Cal. Pub. Utils. Comm'n., 109 F.Supp.2d 1186, 1218-19 (N.D.Cal.2000). The court held the following CPUC rules were not preempted:7 (1) rule requiring the Railroads to comply with their own train make-up rules at sites 1, 3, 4, 7, 9, 12, 16, 22, 23, 26, 28, 29, 31; and (2) rule governing track standards at site 9, a ten-mile stretch of track which includes the Cantara Loop, the site of the 1991 derailment. Id. at 1219.

After the district court amended its memorandum and order on December 20, 2000, the Railroads filed a timely notice of appeal. CPUC filed a motion for reconsideration, which was denied on March 14, 2001. Shortly thereafter, the CPUC filed its timely notice of appeal. As amicus curiae, the United States of America, on behalf of the U.S. Department of Transportation ("DOT")...

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