BNSF Ry. Co. v. Arizona Corp. Comm'n
| Decision Date | 03 January 2012 |
| Docket Number | No. 1 CA–CV 11–0002.,1 CA–CV 11–0002. |
| Citation | 228 Ariz. 481,625 Ariz. Adv. Rep. 12,268 P.3d 1138 |
| Parties | BNSF RAILWAY COMPANY, a Delaware corporation, Plaintiff/Appellant, v. ARIZONA CORPORATION COMMISSION; Kristin K. Mayes, Chairman; Gary Pierce, Commissioner; Paul A. Newman, Commissioner; Sandra D. Kennedy, Commissioner; and Bob Stump, Commissioner, Defendants/Appellees. |
| Court | Arizona Court of Appeals |
OPINION TEXT STARTS HERE
Fennemore Craig, P.C. By William L. Thorpe, Theresa Dwyer–Federhar, Patrick J. Black, Phoenix, Attorneys for Appellant.
Arizona Corporation Commission, Legal Division By Charles H. Hains, Kimberly A. Ruht, Phoenix, Attorneys for Appellees.
¶ 1 BNSF Railway Company (“BNSF”) appeals the judgment entered by the superior court affirming an October 21, 2009 order of the Arizona Corporation Commission (“Commission”). BNSF argues the superior court erred because the Commission's authority to approve or deny the installation of railroad wayside horns was preempted by federal law regulating the use of audible warnings at railroad crossings. For the following reasons, we agree with the superior court's determination and affirm.
¶ 2 On February 19, 2009, the City of Flagstaff (“City”) filed an application for approval to upgrade two crossings by installing additional audible warning devices, wayside horns. The City sought to create a Quiet Zone in accordance with title 49, section 222 of the Code of Federal Regulations (“C.F.R.”). The two crossings, the Steves Boulevard crossing and the Fanning Drive crossing, would be included in this Quiet Zone. The application also indicated that three other crossings would be included in the Quiet Zone; however, they would not require modifications subject to the Commission's approval.
¶ 3 A wayside horn is a “stationary horn located at a highway-rail grade crossing, designed to provide, upon the approach of a locomotive or train, audible warning to oncoming motorists.” 49 C.F.R. § 222.9. The horn is a digital recording of an actual train horn that plays from a pole mounted at the crossing as the locomotive approaches. See 49 C.F.R. §§ 222.59, 222 App. E. The signal given by a wayside horn obviates the need for a locomotive to blow its horn as it approaches a crossing and lowers the noise pollution in surrounding areas. 49 C.F.R. § 222.59.
¶ 4 Prior to filing the application, the City had complied with federal requirements regarding implementing a Quiet Zone. The City provided a notice of intent to BNSF (the railroad operating over the crossing), the Arizona Department of Transportation (the state agency responsible for highway and road safety), and the Arizona Corporation Commission (the state agency responsible for grade crossing safety). The City would fund the project.
¶ 5 On February 27, the Commission issued a procedural order scheduling a hearing to consider the City's application. In this procedural order, the Commission directed that BNSF appear as a Respondent.1 As the railroad company operating the tracks, and as a public service corporation, BNSF is subject to the Commission's jurisdiction with regard to the safety of the crossings. On March 27, the Commission's Safety Division (“Staff”) recommended approving the City's application.
¶ 6 On April 6, the City filed proof of having sent notice of the application to all statutorily required parties, and the matter was opened to public comment.2 However, after being made aware that alterations may have already been made to the Steves and Fannning crossings, the Commission continued the hearings indefinitely to investigate. At a hearing on May 6, the City stated that equipment for the wayside horns at the Steves and Fanning crossings had been installed, but that the horns were not yet operational. To formulate recommendations for the proper way to address the premature installation of the wayside horns, the Commission continued further hearings. The Commission also directed the City and Staff, and invited BNSF, to file briefs addressing questions about the safety implications of the changes to the crossings and the nature of the Commission's authority over decisions regarding sounding horns at the crossings. Pending the Commission's approval of the application, the City removed the horns on May 15, 2009.
¶ 7 On July 8, 2009, the Commission held a full evidentiary hearing at which the City, BNSF, and Staff were represented by counsel. All parties presented testimony and were asked to file various late-filed exhibits addressing aspects of the crossings. The City, BNSF, and Staff were also directed to file post-hearing briefs regarding preemption and the City's compliance with the requirements for designation of a Quiet Zone. In its brief, BNSF argued that the Commission did not have jurisdiction to approve or deny installation of wayside horns at the crossing because of federal preemption under the Train Horn Rules, a federal scheme aimed at achieving national uniformity in railroad safety. 49 C.F.R. pts. 222 and 229. Staff argued that while the Train Horn Rules would preempt the Commission from regulating the sounding of horns or the safety of the other three crossings in the Quiet Zone that did not require the horn installation, the Commission did have jurisdiction to approve or deny the modifications at the Steves and Fanning crossings.
¶ 8 On October 21, 2009, the Commission issued an opinion and order approving the City's application to modify the Steves and Fanning crossings. The Commission made “no finding as to the safety of the crossings at Beaver Street and San Francisco Street once the Quiet Zone is established.” In the opinion, the Commission recited its authority under A.R.S. § 40–336 over the installation, use, and modification of safety or other devices at grade crossings. The opinion also noted the Commission's “exclusive power to determine and prescribe the manner and the terms of installation, operation, maintenance, use, and protection of each crossing.”
¶ 9 The opinion considered whether the Commission was preempted from regulating crossings under the Train Horn Rules. The Commission concluded that its authority was preempted in part and not preempted in part. Specifically, it concluded that
the Train Horn Rules preempt the Commission's authority to require that train horns be sounded at public highway-rail grade crossings and/or to impose requirements related to the use of safety measures specifically to accommodate for the silencing of train horns at such crossing.
It also concluded, however, that
the Train Horn Rules do not preempt the Commission's “administrative procedures” regarding applications for the alteration of public at-grade crossings included or to be included in Quiet Zones, to the extent that the alterations contemplated involve modification or installation of “engineering improvements.” Thus, the Commission retains the authority to approve or deny applications for the alteration of such crossings to the extent that the alterations contemplated involve modification or installation of engineering improvements.
In reaching this conclusion, the Commission relied upon 49 C.F.R. § 222.7(e), which provides:
Issuance of this part does not constitute federal preemption of administrative procedures required under State law regarding the modification or installation of engineering improvements at highway-rail grade crossings.
49 C.F.R. § 222.7(e). The Commission determined that the hearing held on July 8 was an administrative procedure and that the wayside horns are engineering improvements.
¶ 10 Following the Commission's opinion and order, BNSF filed an application for rehearing. The Commission did not act on the application for rehearing, and it was denied by operation of law. BNSF then filed a complaint in superior court challenging the Commission's decision. BNSF brought the action for judicial review under A.R.S. § 40–254 and asked the court to vacate the order or “declare that certain conclusions of law included in the Order are incorrect as a matter of law.”
¶ 11 In the superior court, BNSF again argued that the Commission lacked jurisdiction to issue the order because federal law preempted the Commission's authority. The Commission challenged BNSF's standing to appeal the Commission's order as an aggrieved party because BNSF had supported the installation of wayside horns at the Steves and Fanning crossings and the Commission approved the application. On November 17, 2010, the court affirmed the Commission's order without indicating the basis for its decision. BNSF timely appealed the judgment. We have jurisdiction pursuant to A.R.S. § 12–2101(B) (2003).
¶ 12 BNSF asks this court to reverse both the superior court's judgment and the Commission's order affirmed by that judgment. On appeal from a superior court judgment reviewing an order of the Commission, we review the superior court's decision, not the underlying decision of the Commission. Babe Invs. v. Ariz. Corp. Comm'n, 189 Ariz. 147, 150, 939 P.2d 425, 428 (App.1997). Where parties are appealing the court's grant of summary judgment, we view the facts and reasonable inferences in a light most favorable to “the party against whom judgment was granted.” Burlington N. & Santa Fe Ry. Co. v. Ariz. Corp. Comm'n, 198 Ariz. 604, 606, ¶ 9, 12 P.3d 1208, 1211 (App.2000). “If no genuine issues of material disputed facts remain and the moving party is entitled to judgment as a matter of law, we must affirm the decision of the trial court.” Tonto Creek Estates Homeowner's Ass'n v. Ariz. Corp. Comm'n, 177 Ariz. 49, 55, 864 P.2d 1081, 1087 (App.1993). However, we can draw our “own legal conclusions[,] ... determine whether an agency erred in its determination of law, [and] substitute our judgment for agency conclusions regarding the legal effect of its factual findings.” Sanders v. Novick, 151 Ariz. 606, 608, 729 P.2d 960, 962 (App.1986) (citations...
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