Burlington Northern Santa Fe Corp. v. Anderson

• Decision Date: 24 March 1997
• Docket Number: No. CV 96-55-H-CCL.,CV 96-55-H-CCL.
• Citation: 959 F.Supp. 1288
• Parties: BURLINGTON NORTHERN SANTA FE CORPORATION; Burlington Northern Railroad Company, Plaintiff, v. Bob ANDERSON, Commissioner of MT Dept of Public Service Commission; Dave Fisher, Commissioner of MT Dept of Public Service Commission; Nancy McCaffree, Commissioner of MT Dept of Public Service Commission; Danny Oberg, Commissioner of MT Dept of Public Service Commission; Bob Rowe, Commissioner of MT Dept of Public Service Commission; Defendant, and Transportation Communications International Union, Intervenor/Defendant, and United Transportation Union, Intervenor/Defendant.
• Court: U.S. District Court — District of Montana

Page 1288

959 F.Supp. 1288

BURLINGTON NORTHERN SANTA FE CORPORATION; Burlington Northern Railroad Company, Plaintiff, v. Bob ANDERSON, Commissioner of MT Dept of Public Service Commission; Dave Fisher, Commissioner of MT Dept of Public Service Commission; Nancy McCaffree, Commissioner of MT Dept of Public Service Commission; Danny Oberg, Commissioner of MT Dept of Public Service Commission; Bob Rowe, Commissioner of MT Dept of Public Service Commission; Defendant and Transportation Communications International Union, Intervenor/Defendant and United Transportation Union, Intervenor/Defendant.

No. CV 96-55-H-CCL.

United States District Court, D. Montana, Helena Division.

March 24, 1997.

COPYRIGHT MATERIAL OMITTED

Betty J. Christian, Carolyn D. Clayton, Steptoe & Johnson, Washington, DC, Leo Berry, Mark D. Etchart, Browning, Kaleczyc, Berry & Hoven, PC, Helena, MT, Janice G. Barber, Sarah J. Whitley, Burlington Northern Santa Fe, Fort Worth, TX, for Burlington Northern Santa Fe Corp. and Burlington Northern R. Co.

Martin Jacobson, Montana Public Service Com'n, Helena, MT, for Bob Anderson, Dave Fisher, Nancy McCaffree, Danny Oberg and Bob Rowe.

Peter M. Meloy, Meloy & Morrison, Helena, MT, Clinton J. Miller, III, Daniel R. Elliott, III, United Transp. Union, Cleveland, OH, for United Transp. Union.

Turner C. Graybill, Graybill, Ostrem & Crotty, Great Falls, MT, Joseph Guerrieri, Jr., Guerrieri, Edmond & Clayman, Washington, DC, for Transportation-Communications Intern. Union.

ORDER

LOVELL, District Judge.

This matter came on for hearing on February 21, 1997 on Plaintiffs' and Defendants' cross motions for summary judgment. Intervenor Defendants Transportation Communications International Union (TCU) and United Transportation Union (UTU) were represented by separate counsel at the hearing but did not participate in oral argument. Upon consideration of the arguments, the motions and the briefs submitted herein, the court is prepared to rule on the cross motions.

ISSUE

The issue before the court is whether The Interstate Commerce Commission Termination Act of 1995 (ICCTA or Act), 49 U.S.C. §§ 10501, et seq., preempts Montana law authorizing the Montana Public Service Commission (MPSC) to exercise regulatory authority over railroad agencies in Montana.

BACKGROUND

Burlington Northern Railroad Company (BN), a subsidiary of Burlington Northern Santa Fe Corporation (BNSF), has long been engaged in interstate and intrastate railroad business in Montana and neighboring states. In that capacity, BN has maintained agencies, or business offices, in various cities and towns served by the railroad.¹ The MPSC historically has regulated BN's intrastate economic activities, including the closure of agencies.

Section 69-1-110 of the Montana Code Annotated provides in pertinent part:

(3) The commission may adopt rules to govern its proceedings and to regulate the mode and manner of all investigations and hearings concerning railroad companies and other parties before it in the establishment of rates, orders, charges, and other acts required of it under the law.

Mont.Code Ann. § 69-1-110 (1995). Also, section 69-14-111 provides for MPSC supervision of railroads engaged in the transportation of passengers or property in Montana. Mont.Code Ann. § 69-14-111 (1995). Section 69-14-117 authorizes the MPSC to compel railroads subject to its authority to provide reasonable accommodations and services to the public. Mont.Code Ann. § 69-14-117 (1995). Under section 69-14-202, such railroads must maintain and staff shipping and passenger facilities to the extent that they were maintained on January 1, 1987, unless upon proper showing and after the opportunity for public hearing, the MPSC finds that the facility is not necessary for public convenience. Mont.Code Ann. § 69-14-202 (1995). Finally, section 69-14-1001 provides for protection of employees affected by closure, consolidation, or centralization of a "station or other facility." Mont.Code Ann. § 69-14-1001 (1995). Pursuant to this statutory scheme, the MPSC has promulgated regulations requiring railroad companies to seek and receive MPSC approval before discontinuing station agents, abandoning stations on main or branch lines or abandoning or removing sidetrack or spur track. Mont. Admin. R. 38.4.301 (1995).

In accordance with this Montana law, BN has in the past filed applications with the MPSC for authority to discontinue railroad agencies in the Montana communities of Eureka, Froid, Kalispell, and Shelby. The MPSC denied all of the applications, twice in the cases of the Eureka and Froid agencies, the latest of the orders being served on September 18, 1995. BN proposes, due to extensive modernization and centralization of services, to discontinue nine agencies in Montana by September 1997.²

The ICCTA became effective on January 1, 1996. The Act amended certain sections of Title 49 of the United States Code, which governs the economic regulation of railroads. Following the effective date of the Act, the MPSC considered the impact that the Act has on the MPSC. The MPSC determined that the Act does not clearly preempt its regulation of agencies and that it would continue to regulate railroad activities as it has in the past.

Plaintiffs filed their complaint on August 2, 1996, requesting a declaratory judgment, pursuant to 28 U.S.C. § 2201, that the Act preempts Montana law under which Defendants exercise jurisdiction over the maintenance, closure, consolidation or centralization of railroad shipping facilities, stations and station agencies in Montana. Plaintiffs also seek injunctive relief, pursuant to 28 U.S.C. § 2202 and Fed.R.Civ.P. 65, preventing Defendants from exercising their authority under the Montana statutes in regulating said railroad activities. On August 23, 1996, TCU filed a motion to intervene as a party defendant. The following week, on August 27, Plaintiffs and Defendants filed simultaneous motions for summary judgment. Then, on August 29, UTU filed its motion to intervene. The court granted the motions by TCU and UTU, and the matter was set for hearing on the summary judgment motions.

DISCUSSION

The court has jurisdiction over this case under 28 U.S.C. § 1331, as Plaintiffs' claim asserting federal preemption of a state regulation arises under the Constitution and laws of the United States, in particular, the Supremacy Clause, Art. VI, Clause 2. Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 96 n. 14, 103 S.Ct. 2890, 2899 n. 14, 77 L.Ed.2d 490 (1983).

Under Rule 56(b) of the Federal Rules of Civil Procedure, summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to prevail as a matter of law. Fed.R.Civ.P. 56(b); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). The parties agree that there are no genuine issues of material fact and that the matter is ripe for resolution by summary judgment. The only issue is whether the Act preempts state authority to regulate the economic activities of railroads in the state of Montana, specifically the discontinuance of railroad agencies.

This case arises from the MPSC's refusal to grant BN's application to discontinue certain railroad agencies and from MPSC's finding that the ICC Termination Act of 1995 does not affect its economic regulation of railroad activities in Montana. Plaintiffs contend that Defendants' authority to regulate the maintenance, closure, consolidation or centralization of railroad shipping facilities, stations and station agencies in Montana was terminated on January 1, 1996, the effective date of the Act.

Defendants argue that the Act does not express or imply federal preemption of state regulation in regard to railroad agencies. In essence, they argue that since the Act does not specifically, in so many words, provide preemption of state regulation of agencies, the court must find that no preemption exists.

Article VI of the United States Constitution provides that "the Laws of the United States ... shall be the supreme Law of the Land." U.S. Const. art VI, cl. 2. As such, any state law that conflicts with federal law is "without effect." Cipollone v. Liggett Group, Inc., 505 U.S. 504, 516, 112 S.Ct. 2608, 2617, 120 L.Ed.2d 407 (1992). In determining a preemption issue, however, the district court must proceed from the presumption that the historic police powers of the state are not to be superseded by a federal act unless preemption is found to be "the clear and manifest purpose of Congress." Id. at 516, 112 S.Ct. at 2617; Jones v. Rath Packing Co., 430 U.S. 519, 525, 97 S.Ct. 1305, 1309, 51 L.Ed.2d 604 (1977).

The Supreme Court, in English v. General Electric Co., 496 U.S. 72, 110 S.Ct. 2270, 110 L.Ed.2d 65 (1990), identified three circumstances in which state law is preempted by federal law: (1) express preemption, where Congress explicitly defines the extent to which its enactments preempt state law; (2) field preemption, where state law regulates conduct in a field that Congress intended the federal government to exclusively occupy; and (3) conflict preemption, where it is impossible to comply with both state and federal requirements, or where state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress. English, 496 U.S. at 78-80, 110 S.Ct. at 2274-76. The overriding consideration is whether Congress intended to preempt state law. Medtronic v. Lohr, ___ U.S. ___, ___, 116 S.Ct. 2240, 2255, 135 L.Ed.2d 700 (1996); English, 496 U.S. at 80, 110 S.Ct. at 2275-76.

The court should find preemption if the intent of Congress either is explicitly stated in the statute's language or is implicitly contained in its structure and purpose. Shaw, 463 U.S. at 95, 103 S.Ct. at 2899. This doctrine is tempered, however, by caveats against assuming that preemption exists based solely on general statements and broad implications of national...