Association of American Railroads v. PSC OF W. VA.

• Decision Date: 27 December 1989
• Docket Number: Civ. A. No. 2:86-0725.
• Citation: 745 F. Supp. 1175
• Court: U.S. District Court — Southern District of West Virginia
• Parties: ASSOCIATION OF AMERICAN RAILROADS, Plaintiff, v. PUBLIC SERVICE COMMISSION OF WEST VIRGINIA, and Michael D. Greer, Otis D. Casto and Charlotte R. Lane, as members of the Public Service Commission of West Virginia, Defendants, and West Virginia Mining and Reclamation Association and West Virginia Coal Association, Intervening Defendants.

745 F. Supp. 1175

ASSOCIATION OF AMERICAN RAILROADS, Plaintiff, v. PUBLIC SERVICE COMMISSION OF WEST VIRGINIA, and Michael D. Greer, Otis D. Casto and Charlotte R. Lane, as members of the Public Service Commission of West Virginia, Defendants, and West Virginia Mining and Reclamation Association and West Virginia Coal Association, Intervening Defendants.

Civ. A. No. 2:86-0725.

United States District Court, S.D. West Virginia, at Charleston.

July 14, 1989.

Final Order and Judgment December 27, 1989.

William C. Beatty, Huddleston, Bolen, Beatty, Porter & Copen, Huntington, W.Va., R. Eden Martin, Sidley & Austin, Chicago, Ill., or Washington, D.C., for plaintiff.

J. Steven Hunter, Richard E. Hitt, Raymond Keener, III, Charleston, W.Va., for Public Service Com'n of W.Va., Greer, Casto and Lane.

Douglas A. Smoot, Jackson, Kelly, Holt & O'Farrell, Charleston, W.Va., for West Virginia Coal Ass'n.

Ricklin Brown, Bowles, McDavid, Graff & Love, Charleston, W.Va., for West Virginia Min. and Reclamation Ass'n.

MEMORANDUM ORDER

COPENHAVER, District Judge.

This matter is before the court on the motion for partial summary judgment as to counts I, II and III of the amended complaint filed by the plaintiff, Association of American Railroads (hereinafter, "AAR"); the motion to dismiss counts II, III, IV and V and for partial summary judgment as to counts I, II and IV filed by the defendants Public Service Commission of West Virginia (hereinafter, "PSC"), and its members, Michael D. Greer, Otis D. Casto, and Charlotte R. Lane; and the motion for judgment on the pleadings as to count I and motion for partial summary judgment as to count I filed by the intervening defendant, West Virginia Coal Association.

I. Background

Concerned with the ability of rail carriers to gain access to rail tracks located in the State of West Virginia,¹ the West Virginia Legislature enacted in 1986 Senate Bill 278, codified at W.Va.Code §§ 24-1-1(a)(6) and 24-3-3b(a)-(g). Section 24-3-3b(b) requires all rail carriers owning track in West Virginia to provide all other rail carriers with open access to their tracks.² Where the accessed and accessing carrier cannot voluntarily agree upon a reasonable access fee, the PSC is given the authority to prescribe the appropriate fee.³ Under § 24-3-3b(c), the PSC is charged with the duty of establishing regulations to implement the access provisions of Senate Bill 278.⁴ Finally, § 24-3-3b(g) prohibits rail carriers owning track in West Virginia from abandoning or discontinuing the use of their tracks without obtaining prior authorization from the PSC.⁵

On June 27, 1986, plaintiff AAR brought a declaratory action against the PSC and its members,⁶ challenging the constitutionality of the access and abandonment provisions of Senate Bill 278. Specifically, plaintiff alleged that the access provisions were in violation of the supremacy and commerce clauses of the United States Constitution, and that the abandonment provision was in violation of the supremacy clause. By order dated November 20, 1986, the court granted the parties' joint motion to hold further proceedings in abeyance pending the PSC's adoption of final regulations implementing the access provisions pursuant to the Commission's statutory authority under W.Va.Code § 24-3-3b(c).

The PSC, by order dated October 14, 1987, adopted its final access regulations.⁷ Thereafter, plaintiff filed an amended complaint alleging in counts I and II that the access provisions together with the PSC's implementing regulations violate, respectively, the supremacy and commerce clauses of the United States Constitution. Amended Complaint at ¶¶ 45-56. Count III of the amended complaint mirrors plaintiff's allegations in its original complaint that the abandonment provision violates the supremacy clause. Amended Complaint at ¶¶ 57-62. Count IV adds an allegation that the access provisions, combined with the access regulations, violate the takings clause of the United States Constitution. Amended Complaint at ¶¶ 63-68. The final count adds the allegation that the access regulations are inconsistent with the access provisions, are devoid of adequate supporting evidence, and are arbitrary, irrational and an abuse of discretion, all in violation of state law. Amended Complaint at ¶¶ 69-71.

On December 14, 1987, three separate motions were filed with the court. Plaintiff filed a motion for summary judgment on counts I, II and III of its amended complaint. Defendants filed a motion for summary judgment with respect to counts I, II and IV of the amended complaint, and a motion to dismiss counts II, III and IV on ripeness grounds, and to dismiss count V on abstention principles. Intervening defendant West Virginia Coal Association filed a motion for judgment on the pleadings and for partial summary judgment as to count I of the amended complaint.⁸

Although three separate motions have been filed, the issue presented in each of the three motions with respect to count I of the amended complaint is the same and involves judicial resolution of the purely legal question of whether the state's access provisions and regulations are preempted by the Interstate Commerce Act, 49 U.S.C. § 10101 et seq. In this regard, plaintiff argues that embodied within the Interstate Commerce Act is a comprehensive scheme of regulation of interstate rail transportation, including carriers'⁹ attempts to gain access to other carriers' tracks for use in interstate commerce, which has long been recognized as preempting state regulation in this area. With respect to access to tracks for use in intrastate commerce, plaintiff maintains that upon passage of the Staggers Rail Act of 1980, Pub.L. No. 96-448, 94 Stat.1914 (1980), states are permitted to regulate intrastate rail transportation, including access to other carriers' tracks, only if the state's standards and practices are certified by the Interstate Commerce Commission (hereinafter, "ICC") and are consistent with federal law. Defendants respond that although the ICC has been given considerable authority under the Interstate Commerce Act to regulate interstate rail transportation, states still retain some regulatory authority pursuant to their traditional police powers. With respect to regulation of intrastate rail transportation, defendants contend that the requirements under the Staggers Rail Act that states receive ICC certification and regulate consistently with federal law is limited to state regulation of intrastate rail rates and that states retain their authority to freely regulate nonrate-related aspects of intrastate rail transportation, including carriers' access to tracks for use in intrastate commerce.

Similarly, the issue with respect to count III of the amended complaint involves judicial resolution of the purely legal questions of whether the state's abandonment provision is preempted by the Interstate Commerce Act, and whether the question is ripe for review. In this regard, plaintiff states that recent Supreme Court authority acknowledges the primacy of ICC regulation of abandonments under the Interstate Commerce Act which also extends to abandonments of tracks used in intrastate commerce that affect interstate commerce. Defendants argue that the issue is not ripe for review because neither the PSC nor the state's highest court has interpreted the meaning of the state's abandonment provision. To this ripeness argument, plaintiff counters that the question is ripe for review because it presents a facial challenge to the wording of the statute.

II. Discussion

The supremacy clause contained in Article VI, cl. 2 of the United States Constitution provides:

This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.

U.S. Const., Art. VI, cl. 2. The supremacy clause has been interpreted as invalidating all state laws that conflict or interfere with an act of Congress. See Rose v. Arkansas State Police, 479 U.S. 1, 3, 107 S.Ct. 334, 335, 93 L.Ed.2d 183 (1986) (per curiam). Similarly, administrative regulations promulgated pursuant to congressional authorization are deemed to carry the same preemptive effect as federal statutes. See Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691, 699, 104 S.Ct. 2694, 2700, 81 L.Ed.2d 580 (1984).

The Supreme Court has delineated three ways in which federal law may preempt state law. First, Congress can expressly preempt state law by declaring its intent in express terms to preclude state regulation in a given area. Second, Congress can impliedly preempt state law by occupying an entire field of regulation leaving no room for state supplementation. Third, Congress can for all practical purposes preempt state law where compliance with both state and federal law is impossible or where state law stands as an obstacle to accomplishment and execution of the full purposes and objectives of Congress. See Capitol Cities Cable, Inc. v. Crisp, 467 U.S. 691, 698-99, 104 S.Ct. 2694, 2699-2700, 81 L.Ed.2d 580 (1984); Pacific Gas & Electric v. Energy Resources Commission, 461 U.S. 190, 203-04, 103 S.Ct. 1713, 1721-22, 75 L.Ed.2d 752 (1983). See also L. Tribe, American Constitutional Law § 6-26 at 481 n. 14 (1988).

Plaintiff maintains that Congress has vested in the ICC exclusive authority to regulate interstate rail transportation, including the means by which one rail carrier gains access to another carrier's tracks and facilities.

There are three types of arrangement by which a rail carrier may gain access to another carrier's tracks and facilities. First, the two carriers could agree to establish through routes by which an accessed carrier would carry the traffic over its own lines and thereafter transfer...