Consolidated Rail Corp. v. City of Bayonne

• Decision Date: 09 November 1989
• Docket Number: Civ. A. No. 89-3570.
• Citation: 724 F. Supp. 320
• Parties: CONSOLIDATED RAIL CORPORATION; Bayonne Industries, Inc.; IMTT-Bayonne and East Jersey Railroad, Plaintiffs, v. The CITY OF BAYONNE, a New Jersey municipal corporation, Defendant.
• Court: U.S. District Court — District of New Jersey

724 F. Supp. 320

CONSOLIDATED RAIL CORPORATION; Bayonne Industries, Inc.; IMTT-Bayonne and East Jersey Railroad, Plaintiffs, v. The CITY OF BAYONNE, a New Jersey municipal corporation, Defendant.

Civ. A. No. 89-3570.

United States District Court, D. New Jersey.

November 9, 1989.

Francis J. Calise, Clifton, N.J., for plaintiff Consol. Rail Corp.

Robinson, Wayne & La Sala by Thomas D. Ruane, Newark, N.J., and Coleman, Dutrey & Thomson, New Orleans, La., for plaintiffs Bayonne Industries, Inc., IMTT-Bayonne and East Jersey R.R.

Wilson, Elser, Moskowitz, Edelman & Dicker by James C. Orr, Newark, N.J., for defendant The City of Bayonne.

OPINION

BISSELL, District Judge.

This civil action was filed on August 23, 1989 seeking, inter alia, a preliminary injunction and declaratory relief from the actions of defendant, the City of Bayonne. Plaintiffs, Consolidated Rail Corporation ("Conrail"), Bayonne Industries, Inc., International-Matex Tank Terminals-Bayonne ("IMTT-Bayonne"), and East Jersey Railroad ("East Jersey"), operate and utilize a gasoline storage and blending facility in Bayonne. (Compl., ¶¶ 9-11; Br. in Support at 1-2). Bayonne Industries owns the 330 acre tract of land where IMTT operates its marine terminal facility. (Compl., ¶ 9; Br. in support at 2). The facility is located in an industrial section of Bayonne and is bordered on the south side by the Kill Van Kull. (Id.) IMTT's business consists of the receipt, processing, storage and redelivering of petroleum products by marine vessels, tank trucks and rail tank cars. (Id.) The majority of products, including the butane shipments that are the subject of this action, travel in interstate commerce. (Compl., ¶¶ 10, 14).

At issue in this action is the shipment of butane in rail tank cars to the IMTT facility for use in the blending and processing of gasoline. (Id. at ¶ 11). The butane is shipped by rail from Canada and from a variety of states in the United States to Conrail's Oak Island Transportation Switching Yard in Newark, New Jersey. (Id. at ¶¶ 16-18). At the switching yard, the cars are organized and delivered to designated interchange tracks by Conrail and then delivered to IMTT by East Jersey. (Id. at ¶¶ 18-19). The IMTT facility has the capacity to offload seven cars at one time, while any excess cars remain under the control of East Jersey on its tracks. (Id. at ¶ 19).

The transportation and handling of butane rail cars is heavily regulated by federal statutes, including the Federal Railroad Safety Act, 45 U.S.C. § 421 et seq. ("FRSA"), and the Hazardous Materials Transportation Act, 49 U.S.C. § 1801 et seq. ("HMTA"). (Id., ¶¶ 20-24). In addition to federal regulation, the City of Bayonne alleges that it also has the authority to regulate on-site activities pursuant to Public Health Nuisance Code § 20-3.1-3.3. (Id., ¶ 34; Br. in Opp. at 11). On or about December 21, 1988, the city's Fire Prevention Bureau began issuing summonses for violations of this municipal code. (Compl., ¶¶ 34-37, Exh. B). The code proscribes activity "which is or may become detrimental or a menace to the health of the inhabitants of this municipality (Bayonne)." (Id., ¶ 34). The violations are based upon City Planning Board Resolution # SPR-80-071285 dated August 13, 1985 which set the maximum number of butane rail cars permitted on the site at 20. (Id., ¶ 37, Exh. C). Conrail and IMTT received 12 summonses between December 21, 1988 and January 4, 1989. (Id., ¶ 35, Exh. B).

I. Prior Proceedings

On August 23, 1989, plaintiffs filed their complaint against the City of Bayonne seeking among other remedies, a permanent injunction prohibiting defendant from enforcing the municipal code summonses and its attempted regulation of the IMTT-Bayonne operation. (See, e.g., Compl., ¶ 54(b)). Specifically, the municipal code and planning board resolution limits the number of loaded or unloaded butane rail cars permitted on IMTT's facility at any one time. (Compl., ¶ 36). On August 24, 1989, plaintiffs appeared before United States District Judge Nicholas Politan seeking an order to show cause with temporary restraints. Plaintiffs presented the verified complaint and affidavits from H.J. Kiley (Assistant Division General Manager for Conrail) and Richard R. Fisette (Plant Manager of IMTT-Bayonne) in support of their application for a temporary restraining order. Judge Politan held a hearing on this motion on August 24, 1989 with counsel for plaintiffs and defendant present. (See Transcript of Proceedings).

At the hearing, plaintiffs requested an order to show cause why a municipal court trial scheduled for September 14, 1989 should not be enjoined, and for temporary restraints enjoining Bayonne from issuing further summonses until the return date of the order to show cause. (Tr. at 5-6). The defendant did not object to an order to show cause, however, it did object to the temporary restraints. (Id. at 6). Counsel for Bayonne pointed out that he didn't expect the city to issue additional summonses and that IMTT had been in compliance with the ordinance for several months. (Id.)

At the hearing, the parties finally agreed that the city could issue additional summonses but would serve them on plaintiffs' counsel rather than directly on plaintiffs. (Id. at 14-15). Judge Politan did restrict the defendant from "interfering in any manner with the movement or handling of the butane cars on the tracts." (Id. at 15). He instructed the defendant that if additional violations were observed, to issue the summonses but not to harass the operation of plaintiffs. (Id.) Judge Politan established a briefing schedule for the cross-motions for summary judgment and found, based upon the evidence before him, that this case was ripe for summary judgment resolution. (Id. at 11-12). Judge Politan held that plaintiffs had made a "strong showing" that the movements of butane are subject to extensive federal regulation, and as such, preempt local ordinances and regulations. (Id. at 15-16). Accordingly, Judge Politan issued the temporary restraining order on August 24, 1989. (Id.)

On September 29, 1989, defendant, by notice of motion, sought to dissolve the temporary restraining order. This Court heard oral argument and declined to dissolve the order having found no changed circumstances that would make the continuation of the order "inequitable."

Presently before the Court are plaintiffs' motion for summary judgment and defendant's cross-motion for summary judgment.

II. Summary Judgment Motions

Under Federal rule of Civil Procedure 56(c), summary judgment should be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." In deciding a motion for summary judgment, the facts must be viewed in the light most favorable to the nonmoving party and any reasonable doubt as to the existence of a genuine issue of fact is to be resolved against the moving party. Continental Insurance Co. v. Bodie, 682 F.2d 436, 438 (3d Cir.1982). The moving party has the burden of establishing that there exists no genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The Supreme Court recently stated that in applying the criteria for granting summary judgment,

the judge must ask himself not whether he thinks the evidence unmistakably favors one side or the other but whether a fair-minded jury could return a verdict for the plaintiff on the evidence presented. The mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff. The judge's inquiry, therefore, unavoidably asks whether reasonable jurors could find by a preponderance of the evidence that the plaintiff is entitled to a verdict....

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 2509, 91 L.Ed.2d 202 (1986).

The Court determines that in this case there are no genuine issues of material fact and the case can be adjudicated by determining which party is entitled to summary judgment as a matter of law.

A. Federal Preemption

To prevail on their motion for summary judgment in this matter, plaintiffs must show as a matter of law, either that federal regulations and statutes either occupy or preempt the entire field and prohibit municipalities from regulating in this area, or that compliance with both federal and state law is impossible. Conversely, for defendant to prevail, it must prove that the field is not entirely preempted and that its regulation is a permissible exercise of its police powers.

When a state's exercise of its police power to promote the health, safety or welfare of its citizens is challenged under the Supremacy Clause, the court must "start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress." Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230, 67 S.Ct. 1146, 1152, 91 L.Ed. 1447 (1947). In determining whether Bayonne's regulation is federally preempted under the Supremacy Clause, this Court must inquire "whether Congress explicitly or implicitly declared that the states are prohibited from regulating" the subject matter of the regulation. Ray v. Atlantic Richfield Co., 435 U.S. 151, 158, 98 S.Ct. 988, 994, 55 L.Ed.2d 179 (1978). If no federal law deals directly with the number of butane rail cars permitted in any one location, then the inquiry must focus on implied, rather than express, preemption. The Supreme Court in Ray explained that "`where failure of ... federal officials affirmatively to exercise their full authority takes on the character of a ruling that no such regulation is appropriate or approved pursuant to the...