Armijo v. Atchison, Topeka and Santa Fe Ry. Co., 95-2114

• Decision Date: 05 July 1996
• Docket Number: No. 95-2114,95-2114
• Citation: 87 F.3d 1188
• Parties: Nancy ARMIJO, personal representative of the Estate of Luz Armijo, deceased, Plaintiff-Appellant, v. ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1188

87 F.3d 1188

Nancy ARMIJO, personal representative of the Estate of Luz Armijo, deceased, Plaintiff-Appellant, v. ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY, Defendant-Appellee.

No. 95-2114.

United States Court of Appeals Tenth Circuit.

July 5, 1996.

Rehearing Denied Aug. 8, 1996.

Chris S. Key, Albuquerque, New Mexico, for Plaintiff-Appellant.

John S. Thal, Atkinson & Thal, P.C. (Timothy C. Holm and Donald A. DeCandia, Modrall, Sperling, Roehl, Harris & Sisk, P.A., with him on the brief), Albuquerque, New Mexico, for Defendant-Appellee.

Before BALDOCK, BRORBY and EBEL, Circuit Judges.

BRORBY, Circuit Judge.

On October 23, 1987, Luz Armijo was killed when his vehicle collided with a train operated by the Atchison, Topeka and Santa Fe Railway Co. (hereafter "Santa Fe") at the North Gabaldon crossing in Valencia County, New Mexico. Acting as the personal representative for her husband's estate, Nancy Armijo brought this action for wrongful death and punitive damages under New Mexico law, alleging Santa Fe negligently or recklessly failed to provide adequate warnings at the North Gabaldon crossing and negligently operated the train that collided with Mr. Armijo. The district court granted partial summary judgment in favor of Santa Fe on Ms. Armijo's negligent failure to warn claim on the ground that claim is preempted by federal law, Armijo v. Atchison, Topeka & Santa Fe Ry. Co., 754 F.Supp. 1526, 1528-34 (D.N.M.1990), and certified its decision as final pursuant to Fed.R.Civ.P. 54(b).

We reversed the grant of partial summary judgment and held, as a matter of law, that Ms. Armijo's failure to warn claim was not preempted. Armijo v. Atchison, Topeka & Santa Fe Ry. Co., 19 F.3d 547 (10th Cir.1994) (Armijo I ). We later granted Santa Fe's petition for rehearing and revisited Armijo I. In the order on rehearing, we concluded that, as a matter of fairness, Santa Fe should be allowed to further develop the evidence bearing on the preemption issue in light of the Supreme Court's decision in CSX Transportation, Inc. v. Easterwood, 507 U.S. 658, 113 S.Ct. 1732, 123 L.Ed.2d 387 (1993), and our decision in Hatfield v. Burlington N. R.R. Co., 1 F.3d 1071 (10th Cir.1993) (Hatfield I ), both decided after the district court issued its ruling. Armijo v. Atchison, Topeka & Santa Fe Ry. Co., 27 F.3d 481 (10th Cir.1994) (Armijo II ).

Upon remand, Santa Fe renewed its motion for partial summary judgment and submitted additional evidence. The district court again granted summary judgment ¹ on Ms. Armijo's claim Santa Fe negligently failed to provide adequate warning devices at the North Gabaldon crossing. Ms. Armijo then dismissed her remaining claims for compensatory damages with prejudice, and the district court entered final judgment in favor of Santa Fe. This appeal followed.

I

Ms. Armijo contends the district court erred in concluding her state law failure to warn claims are preempted. In Easterwood, the Supreme Court considered whether certain regulations issued by the Secretary of Transportation pursuant to the Federal Railroad Safety Act of 1970, as amended, 45 U.S.C. § 434, preempt state law claims against a railroad, alleging the railroad acted negligently failing to erect and maintain adequate warning devices at a railroad grade crossing. ² The regulations in question require the states to "develop and implement, on a continuing basis, a highway safety improvement program which has the overall objective of reducing the number and severity of accidents and decreasing the potential for accidents on all highways." 23 C.F.R. 924.5 (1995). As part of the program, the states are to establish priorities for addressing all manner of highway hazards, including railroad grade crossings. 23 C.F.R. § 924.9(a)(4) (1995). For all railroad grade crossings, the regulations require the states to use warning devices conforming with the Federal Highway Administration Manual on Uniform Traffic Control Devices for Streets and Highways (hereafter "the Manual"). 23 C.F.R. §§ 646.214(b)(1) and 655.603 (1995). However, "Adequate warning devices ... on any project where Federal-aid funds participate in the installation of the devices are to include automatic gates with flashing light signals" under certain circumstances, 23 C.F.R. § 646.214(b)(3)(i) (1995) (emphasis in original), or, if such devices are not required under the regulations, "the type of warning device to be installed, whether the determination is made by a State regulatory agency, State highway agency, and/or the railroad, is subject to the approval of FHWA." 23 C.F.R. § 646.214(b)(4) (1995).

The Supreme Court held § 924 and the requirement the states comply with the Manual do not preempt state law failure to warn claims. Easterwood, 507 U.S. at 668-70, 113 S.Ct. at 1739-41. The Court held, however, that when §§ 646.214(b)(3) and (4) apply, state tort law is preempted, because these regulations "displace state and private decisionmaking authority by establishing a federal-law requirement that certain protective devices be installed or federal approval obtained." Easterwood, 507 U.S. at 670, 113 S.Ct. at 1741. These sections apply whenever "federal funds participate in the installation of the [warning] devices." Id. (footnote omitted). We further refined the Easterwood analysis in Hatfield v. Burlington N R.R. Co., 64 F.3d 559 (10th Cir.1995) (Hatfield II ), by clarifying the type of federal participation required to trigger preemption. We reiterated our conclusion in Hatfield I that there must be "significant" federal participation, which requires " 'more than a casual financial connection' between the federal government and the project." Hatfield II, 64 F.3d at 561 (quoting Hatfield I, 1 F.3d at 1072). We noted, however, that in Hatfield I "we also made it clear that federal financial participation may include utilization of non-cash resources, such as federally funded personnel resources, and that federal participation may occur at any point in the project, including the planning stage." Id. We further explained we must look at the "crossing project broadly--from its planning inception to its construction completion--in determining when significant federal participation first occurred." Id.

In Hatfield II, we held federal preemption was triggered in early 1985, at which time $619.17 in federal funds had been spent on preliminary engineering, federally mandated active warning devices had been selected pursuant to 23 C.F.R. § 646.214(b)(3), and the crossing was scheduled for installation of federally funded active warning devices. Id. We rejected the contention that the proportionality of the federal funds to the overall cost of the project is "the sole touch-stone in determining the significance of a federal financial commitment." Hatfield II, 64 F.3d at 562.

Instead, we believe that the financial commitment must be such that it shows a clear federal intent to require a federally approved warning device at the crossing in question, backed up by the actual expenditure of federal resources of more than a casual or de minimis nature, and specifically directed toward the ultimate installation of the improved warning devices at that crossing.

Id. At the moment the federal government manifests such intent, the "financing of the improvement project and its direction and control" are removed from the railroad, and claims against the railroad relating to the adequacy of the warnings are preempted. Id.

In light of Easterwood, Hatfield II, and our other post-Easterwood decisions, the issue in this case is whether federal funds participated in some significant way in the installation of warning devices at the North Gabaldon crossing before October 23, 1987, the date of the accident. Our review of the record shows federal participation began, and New Mexico law was preempted, no later than January 25, 1983. On that date, the Secretary of Transportation agreed to provide ninety percent of the funds required to install reflectorized crossbucks at a number of railroad grade crossings in New Mexico, including the North Gabaldon crossing. At this point, the North Gabaldon crossing became a "project where Federal-aid funds participate in the installation of [warning] devices," 23 C.F.R. § 646.214(b)(3)(i), and the type of warning device used was under the control of the Secretary of Transportation. The Secretary of Transportation's authorization of passive warning devices was tantamount to a determination, pursuant to 23 C.F.R. § 646.214(b)(4), that only passive, rather than active, warning devices were sufficient, and that determination took the matter out of New Mexico's and Santa Fe's hands.

Ms. Armijo draws our attention to the Seventh Circuit's decision in Shots v. CSX Transp. Inc., 38 F.3d 304 (7th Cir.1994), which reached the opposite conclusion on facts very similar to those in this case. Mr. Shots was injured at a railroad grade crossing in Indiana in 1989. Id. at 305. At the time of the accident, the crossing was equipped only with reflectorized crossbucks. Id. In 1975, the state of Indiana and the railroad entered into an agreement to " 'upgrade the passive protection at the Railroad's public rail-highway crossings in Indiana to minimum standards, as established by the State' " by installing reflectorized crossbucks at a number of crossings, including the crossing where Mr. Shots was injured. Id. at 306. The Secretary of Transportation approved the project five days after 23 C.F.R. § 646.214 became effective and provided federal funding, but did not receive a report from a diagnostic team regarding the type of warning systems required at each crossing under that regulation. Id. The Seventh Circuit acknowledged that if the Secretary of Transportation's approval and funding of the project could be interpreted as an express determination that the reflectorized crossbucks were sufficient under 23 C.F.R. § 646.214(b)(4), Mr. Shots' claim would be preempted....