Bd. of Selectmen of the Town of Grafton v. Grafton & Upton R.R. Co.

Decision Date22 May 2013
Docket NumberCIVIL ACTION NO. 12-cv-40164-TSH
PartiesBOARD OF SELECTMEN OF THE TOWN OF GRAFTON and ROBERT S. BERGER, Grafton Building Inspector, Plaintiffs, v. GRAFTON & UPTON RAILROAD COMPANY, Defendant.
CourtU.S. District Court — District of Massachusetts

AMENDED MEMORANDUM AND ORDER GRANTING

PLAINTIFF'S MOTION TO DISMISS FOR LACK OF REMOVAL JURISDICTION

HILLMAN, District Judge.

I. INTRODUCTION

Plaintiffs, the Board of Selectmen of the Town of Grafton and Grafton Building Inspector, Robert S. Berger, (collectively, the "Town"), have sued the Grafton & Upton Railroad Company (the "G&U") seeking injunctive relief to halt the construction and development of a propane transloading facility which, if completed, will violate the Town's zoning by-laws (Docket Nos. 1-3, 38). Pending now before the Court is the Town's Motion to Dismiss for Lack of Removal Jurisdiction that the Court will consider as a motion to remand. (Docket No. 22). After hearing arguments during a five-day bench trial on both the jurisdictional questions and substantive merits of the case, the Court took the present action under advisement. For the following reasons, the Town's motion is GRANTED and the action is hereby remanded to Worcester Superior Court for further disposition.

II. BACKGROUND
A. The Parties

The G&U is a Class III "shortline" railroad that runs upon a 16.5-mile track through the towns of Grafton (at its northern terminus), Upton, Hopedale, and Milford (at its southern terminus). Def.'s Proposed Findings of Fact ("Def.'s PFF") ¶¶ 1-2 (Docket No. 50). It has operated continuously for the last 140 years. Id. The Town is a municipality incorporated in Worcester County, Massachusetts. Pl.'s Proposed Findings of Fact ("Pl.'s PFF") ¶ 1 (Docket No. 52).

B. The Facility

In 2010, the G&U began planning to construct a liquefied propane gas transloading facility located on its property at 50 Westboro Road in the Town. Def.'s PFF ¶ 5; Pl.'s PFF ¶ 4. Once operational, it is estimated that the facility would be able to handle approximately 2,000 propane rail cars per year. Def.'s PFF ¶ 36. By the end of 2011, the G&U performed "site work" on the property that included: clearing, grading and compacting land, and laying new rails to form a "spur" line that would branch off from the G&U's mainline. Id. ¶¶ 12, 15. In February 2012, the G&U purchased an abutting property located at 42 Westboro Road. Id. ¶¶ 12-13; Pl.'s PFF ¶ 5. The proposed site also included plans to install four pressurized tanks for storing propane prior to distribution. Def.'s PFF ¶ 16. The tanks are substantial; each weighs approximately 225,000 pounds, stands 15 feet tall, measures 120 feet in length and holds up to 80,000 gallons of liquefied propane. Pl.'s PFF ¶¶ 22-23; Def.'s PFF ¶ 19. Based on the G&U's site plans, part of the facility would extend onto the parcel located at 42 Westboro Road. Pl.'s PFF ¶ 5; Def.'s PFF ¶ 12.

C. The Town's Regulations

The construction of the proposed facility conflicts with the Town's existing zoning by-laws ("ZBLs") for several reasons. First, although the G&U's original property at 50 Westboro Road is zoned for "industrial" uses, the recently added property at 42 Westboro Road falls under zoning district "R20" for residential use as well as the Town's Water Supply Protection Overlay District. Pl.'s PFF ¶¶ 6-7; Pl.'s Ex. A (the Town's Zoning Map); Pl.'s Ex. D (the Town's ZBLs), ZBL § 3.2.3.1. Next, rail terminals, freight yards and warehouses are expressly prohibited within R20 districts. Pl.'s PFF ¶¶ 8-9; Pl.'s Ex. D, ZBL § 3.2.3.1. Further, the Town's ZBLs do not permit any use variances for industrial purposes and proscribe the transport, sale, storage and industrial use of petroleum-based products like propane on any properties zoned under R20. Pl.'s PFF ¶¶ 7, 10; Pl.'s Ex. D, ZBL § 7.4.C.9. Currently, the G&U has not filed for construction permits with the Town's Zoning Board of Appeals nor has it filed for a "land license" from the Commonwealth that is required prior to constructing a propane facility under Mass. Gen. Laws ch. 148, § 13.1 Pl.'s PFF ¶¶ 11, 17.

D. Proceedings

Although the amount and nature of information disclosed between the parties during the relevant timeline of events remains disputed, representatives from the Town and the G&U did meet on several occasions to discuss plan proposals. Id. ¶¶ 12-13, 16-18, 20, 38-40. During a June 2011 meeting, employees from the G&U met with the Town's Fire Chief and other state officials to inform them of the G&U's preliminary plans to build a propane transloading facility. Def.'s PFF ¶¶ 121-22. At that meeting, Jacob Nunnemacher, a Fire Protection Engineer with theMassachusetts Department of Fire Services, informed the G&U's representatives that certain "land licenses" were required before constructing a propane facility. Id.; Pl.'s PFF ¶ 17.

Sometime in the spring of 2012, the G&U's President, Jon Delli Priscoli ("Delli Priscoli") toured a Town administrator around the G&U's property and informed him that the proposed facility would be used for propane transloading. Def.'s PFF ¶¶ 125-26. At that same meeting, Delli Priscoli also stated that the G&U would forgo the normal permitting processes because any proposed transloading facility on the G&U's property would be exempted by federal preemption. Id. ¶ 127. Thereafter, during a March 20, 2012 Board of Selectmen meeting, Delli Priscoli told the Town's board members that although the G&U had not yet determined what specific commodity it planned to transport, store and sell on its property, it would keep the Town appraised of any further developments to the plans. Pl.'s PFF ¶¶ 12-13. Later in the summer of 2012, representatives from the Town and G&U met on two separate occasions to discuss safety and security issues on the property. Def.'s PFF ¶¶ 129-30; Pl.'s PFF ¶¶ 20-21. The Town avers that it was not informed that the proposed facility would be for transloading liquefied propane gas until the fall of 2012. Pl.'s PFF ¶ 38; Def.'s PFF ¶¶ 139-40.

On December 11, 2012, Delli Priscoli informed the Town's Board of Selectmen that the four propane storage tanks would be delivered and installed between December 13 and December 20, 2012. Pl.'s PFF ¶¶ 45-46. Because delivery of the tanks was imminent, the Town immediately filed suit in Worcester Superior Court seeking, inter alia, a preliminary injunction to enforce their cease and desist order halting the delivery of storage tanks (Docket No. 1-3). The G&U maintains that although the Complaint establishes only state law claims, removal under 28 U.S.C. § 1441(a) is appropriate because the Town's causes of action are preempted under 49U.S.C. § 10501(b) of the Interstate Commerce Commission Termination Act (the "ICCTA") and thus, this Court is the proper forum under 28 U.S.C. § 1331 (Docket No. 1).

III. LEGAL STANDARDS

The instant action represents a unique opportunity to clarify the jurisdictional bounds and preemptive effect under the ICCTA in this District. Thus, the issue presented for the disposition of this motion is whether or not the underlying state causes of action are, in reality, federal claims that can only be vindicated under this Court's jurisdiction. In order to address this issue, this Court sets forth the pertinent legal standards in the following manner:

A. The ICCTA

Congress passed the ICCTA in 1995 in order to fundamentally deregulate the railroad industry. See, e.g., Cedarapids, Inc. v. Chicago, Cent. & Pac. R.R. Co., 265 F. Supp. 2d 1005, 1011 (N.D. Iowa 2003) ("Congress sought to federalize many aspects of railway regulation that previously had been reserved for the states in an effort to ensure the success of Congress' attempt to deregulate and thereby revitalized the industry."). Regulating railroads has traditionally been "among the most pervasive and comprehensive of federal regulatory schemes." Chicago & N.W. Transp. Co. v. Kalo Brick & Tile Co., 450 U.S. 311, 318 (1981). This comprehensive set of statutes under 49 U.S.C. § 10101 et seq. were designed to supersede the Interstate Commerce Act ("ICA"). CSX Transp. Co. v. Novolog Bucks Cnty., 502 F.3d 247, 251 n.1 (3d Cir. 2007).

To promote the goal of "federalizing" railroad regulation, Congress established the Surface Transportation Board (the "STB"), an administrative agency charged with "administer[ing] the ICCTA." See 49 U.S.C. § 701(a) ("There is hereby established within the Department of Transportation the Surface Transportation Board."); New Orleans & Gulf Coast Ry. Co. v. Barrois, 533 F.3d 321, 331 (5th Cir. 2008); Pejepscot Indus. Park, Inc. v. Me. Cent.R.R. Co., 215 F.3d 195, 204 (1st Cir. 2000). The STB derives its "exclusive" jurisdiction from Section 10501 that states in relevant part:

The jurisdiction of the [Surface Transportation] Board over-
(1) transportation by rail carriers, and the remedies provided in this part with respect to rates, classifications, rules (including car service, interchange, and other operating rules), practices, routes, services, and facilities of such carriers; and
(2) the construction, acquisition, operation, abandonment, or discontinuance of spur, industrial, team, switching, or side tracks, or facilities, even if the tracks are located, or intended to be located, entirely in one State,
is exclusive. Except as otherwise provided in this part, the remedies provided under this part with respect to regulation of rail transportation are exclusive and preempt the remedies provided under Federal or State law.

49 U.S.C. § 10501(b). Things that qualify as "transportation" under the ICCTA include: Locomotive[s], car[s], . . . warehouse[s], . . . yard[s], property, facilit[ies], . . . or equipment of any kind related to the movement of passengers or property, or both, by rail." Id. § 10102(9)(A). An entity is considered a "rail carrier" under the ICCTA if it "provid[es] common carrier railroad transportation for compensation . . . ." Id. § 10102(5). Transloading facilities are considered part of a "r...

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