Chessie Logistics Co. v. Krinos Holdings, Inc.

• Decision Date: 15 August 2017
• Docket Number: No. 16-4257,16-4257
• Citation: 867 F.3d 852
• Parties: CHESSIE LOGISTICS COMPANY, Plaintiff–Appellant, v. KRINOS HOLDINGS, INC., et al., Defendants–Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

867 F.3d 852

CHESSIE LOGISTICS COMPANY, Plaintiff–Appellant,

v.KRINOS HOLDINGS, INC., et al., Defendants–Appellees.

No. 16-4257

United States Court of Appeals, Seventh Circuit.

Argued June 1, 2017

Decided August 15, 2017

Michael J. Barron, Jr., Attorney, Fletcher & Sippel, Chicago, IL, Ariel Alice Erbacher, Attorney, Chessie Logistics Company, LLC, Winnetka, IL, for Plaintiff–Appellant.

Peter A. Silverman, Marc S. Porter, Attorneys, Figliulo & Silverman, P.C., Chicago, IL, for Defendants–Appellees.

Before Bauer, Posner, and Hamilton, Circuit Judges.

Hamilton, Circuit Judge.

The plaintiff here is a rail carrier, Chessie Logistics, which claims it was injured when its neighbor Krinos damaged its railroad tracks. Chessie Logistics sued for trespass, negligence, and violation of a federal railroad statute. The district court dismissed the statutory claim and then granted summary judgment to defendants on Chessie's claims for trespass and negligence. On appeal, Chessie seeks to reinstate its claim under the Interstate Commerce Commission Termination Act of 1995 and its late effort to transform its common-law negligence theory into a negligence per se theory based on an Illinois statute. This appeal asks us to decide two questions: first, whether § 10903 of the federal Act creates an implied right of action, and second, whether Chessie was entitled to change its negligence theory as late as it did. We agree with the district court that the answers are both no. On appeal, Chessie has not challenged the summary judgment on its common-law claims for trespass and negligence. We affirm judgment for defendants.

I. Factual and Procedural Background

Plaintiff Chessie Logistics Company is a railroad authorized to operate just one mile of track in Melrose Park, Illinois, though it has apparently been many years since trains have actually run on those stretches of track. The defendants are a collection of companies that own and operate an industrial facility adjacent to Chessie's tracks. A spur track and a side track run over defendants' property; Chessie says it has easements to use those tracks. The defendants are related companies that include Krinos Holdings and Krinos Realty, and we refer to all defendants collectively as Krinos.

Chessie alleges that in 2012 and 2013, Krinos constructed a sewer line and did other drainage-management work near Chessie's tracks. Chessie claims that the work buried parts of its tracks and created a slope directing runoff onto another part of the tracks, damaging them and rendering them impassable. After Chessie told Krinos about the problem, Chessie says, Krinos removed the dirt from one track (damaging the track in the process) and put it onto another track and into a ditch Chessie needed to manage its drainage. Chessie filed suit in the Northern District of Illinois, asserting both federal question and diversity jurisdiction, noting that it is an Illinois citizen, all defendants are New York citizens, and the amount in controversy exceeds $75,000. See 28 U.S.C. § 1332(a).

Although Chessie did not need to include its legal theories in its complaint, e.g., Title Industry Assurance Co. v. First American Title Insurance Co. , 853 F.3d 876, 880 (7th Cir. 2017), its complaint laid out three such theories: trespass, negligence, and violation of 49 U.S.C. § 10903. Krinos counterclaimed, alleging that Chessie did not have easements to use the spur and side tracks and seeking a declaratory judgment, quiet title, and ejectment. Krinos also moved to dismiss Chessie's claim premised on § 10903 : that section, it argued, did not create a private right of action. Section 10903 regulates abandonment of rail lines; it requires rail carriers to receive permission from the Surface Transportation Board before abandoning parts of their lines. The district court agreed that § 10903 did not create a private right of action and dismissed that claim.

After discovery, the parties filed cross-motions for summary judgment. The district court granted Krinos's motion and denied Chessie's. Chessie Logistics Co. v. Krinos Holdings, Inc. , No. 13 C 8864, 2016 WL 7034101, at *7 (N.D. Ill. Dec. 2, 2016). Chessie had not shown that it had easements over some of Krinos's property, the court ruled, and even if it had, an independent contractor, not Krinos, caused the intrusion on Chessie's tracks. Id. at *5–6. The court therefore granted summary judgment against Chessie's trespass claim, and against its negligence claim "to the extent it is based on trespass." Id. at *6.

Chessie argued that its negligence claim was not based wholly on trespass. In its summary judgment brief, Chessie argued that Krinos was negligent per se. It cited the Illinois Adjacent Landowner Excavation Protection Act, which requires landowners to notify adjoining landowners before excavating. 765 Ill. Comp. Stat. 140/1. Krinos had not followed this statute, Chessie reasoned, and was therefore negligent per se. Krinos argued, and the district court agreed, that Chessie had never made that argument before and that the argument was therefore forfeited. The court granted summary judgment against Chessie's negligence per se claim. Krinos dismissed its counterclaims without prejudice, and Chessie appealed.

II. Analysis

A. Appellate Jurisdiction

Before addressing the parties' merits arguments, we pause to consider our jurisdiction. The only route to appellate jurisdiction in this case runs through 28 U.S.C. § 1291, which gives us jurisdiction over appeals from district courts' "final decisions." With certain exceptions not relevant here, a decision is final if it "disposes of all claims against all parties." Dale v. Lappin , 376 F.3d 652, 654 (7th Cir. 2004). Claims dismissed without prejudice have not been disposed of, and any resulting judgment is not final unless there is a clear legal bar to the claim's revival. First Health Group Corp. v. BCE Emergis Corp. , 269 F.3d 800, 801 (7th Cir. 2001) ("[D]ismissal of one claim or theory without prejudice ... makes the judgment non-final."); Dixon v. Page , 291 F.3d 485, 488 (7th Cir. 2002) (dismissal without prejudice for failure to exhaust prison grievance system's remedies was final because plaintiff was no longer a prisoner and could not access that system).

Krinos voluntarily dismissed its counterclaims without prejudice in the district court. If the story ended there, we would not have jurisdiction. India Breweries, Inc. v. Miller Brewing Co. , 612 F.3d 651, 657 (7th Cir. 2010) ; ITOFCA, Inc. v. MegaTrans Logistics, Inc. , 235 F.3d 360, 363 (7th Cir. 2000). "The finality rule is only rarely a ‘Swiss cheese.’ " India Breweries , 612 F.3d at 657, quoting Chang v. Baxter Healthcare Corp. , 599 F.3d 728, 732 (7th Cir. 2010). But this appeal "managed to wedge through one of its narrowest holes" when Krinos, during oral argument, unequivocally agreed that its counterclaims should be deemed dismissed with prejudice. See id. Accordingly, we have jurisdiction over Chessie's appeal and proceed to the merits.

Chessie raises two questions: whether 49 U.S.C. § 10903 creates a private right of action, and whether it forfeited its negligence per se claim. We agree with Krinos and the district court that 49 U.S.C. § 10903 creates no private right of action. Nothing in the statute's text implies such a right. We also hold that the district court acted within its discretion in refusing to hear Chessie's belated negligence per se claim.

B. Implied Private Right of Action?

The Interstate Commerce Commission Termination Act includes 49 U.S.C. § 10903, which regulates the abandonment of railroad lines. Subsection (a) provides that a "rail carrier providing transportation subject to" the Surface Transportation Board's jurisdiction "must file an application ... with the Board" if it intends to abandon or discontinue service on "any part of its railroad lines." The statute goes on to list the information that an application must include, whom the rail carrier must notify about the application, and how it must do so. § 10903(a)(2) & (a)(3). The statute gives the Board three options for responding to an application: approval, approval with modifications or conditions, or denial. § 10903(e). The applying rail carrier may not abandon the line unless the Board approves. § 10903(d).

Other statutory sections provide a variety of ways to enforce the § 10903 approval requirement. If a carrier violates the requirement, a person injured as a result can file a complaint with the Board or bring a civil action. 49 U.S.C. § 11704(b), (c)(1). Or the Board can initiate an investigation itself and take "appropriate action to compel compliance." § 11701(a). The Board's powers include authority to seek an injunction and to order payment of money. §§ 11702(1), 11704(c)(2). The Attorney General can also "bring court proceedings to enforce" the requirement. § 11703.

Chessie believes that the Act, in addition to providing these explicit remedies, implies another remedy: a right, possessed by rail carriers, to sue third parties whose wrongful acts force carriers to abandon lines. On Chessie's reading of the statute, Krinos violated § 10903 when its dirt rendered Chessie's tracks inoperable because it forced Chessie to abandon the tracks without Board approval. Chessie argues that it can sue Krinos and recover damages for that violation—not through § 11704(c)(1), which expressly allows persons injured by rail carriers' violations to sue, but through a cause of action in favor of a rail carrier implied by § 10903 itself.

In deciding whether § 10903 or any other federal statute creates an implied private right of action, our task is to "interpret the statute ... to determine whether it displays an intent to create" both a private right and a private remedy. Alexander v. Sandoval , 532 U.S. 275, 286, 121 S.Ct. 1511, 149 L.Ed.2d 517 (2001). "[R]ights-creating" language is "critical" to that analysis. Id. at 288, 121 S.Ct. 1511, quoting Cannon v. University of Chicago , 441 U.S....