Csx Transp., Inc. v. Georgia Public Serv. Com'n

Decision Date28 October 1996
Docket NumberCivil No. 1:96-CV-0894-JEC.
Citation944 F.Supp. 1573
PartiesCSX TRANSPORTATION, INC., Plaintiff, v. GEORGIA PUBLIC SERVICE COMMISSION, Defendant.
CourtU.S. District Court — Northern District of Georgia

Mary Taylor Tapley Daly, Nelson, Mullins, Riley & Scarborough, Atlanta, GA, Walter Holloway Bush, Jr., Arnall, Golden & Gregory, Macon, GA, for Plaintiff.

Thomas K. Bond, State of GA Law Dept., Alan Grantzhorn, Office of State Atty. Gen., James D. Fagan, Jr., Stanford, Fagan & Giolito, Atlanta, GA, for Defendant.

ORDER

CARNES, District Judge.

This case is presently before the Court on plaintiff CSX Transportation's (hereinafter "CSX") Motion for Summary Judgment [11], plaintiff Norfolk's Motion for Summary Judgment [14], Transportation Communication Union's (hereinafter "TCU") Motion to Intervene as a Defendant [15], plaintiff CSX's Motion for Leave to Amend Complaint [21], plaintiff Norfolk's Motion for Leave to Amend Complaint [24], and defendant Georgia Public Service Commission's (hereinafter "GPSC") Motion for Summary Judgment [18]. The Court has reviewed the record and the arguments of the parties and, for the reasons set out below, concludes that plaintiffs' Motions to Amend their Complaints should be GRANTED, TCU's Motion to Intervene should be GRANTED, plaintiffs' Motions for Summary Judgment should be GRANTED, and defendants' Motions for Summary Judgment DENIED.

BACKGROUND

Defendant GPSC has regulated the operation of railroads in Georgia since 1897. (See Def. Brief in Support of Mot. for Sum. J. [18] at 2.) Pursuant to its regulatory authority under O.C.G.A. § 46-8-21, defendant has required railroads operating in Georgia to seek approval before modifying railroad services, including railroad agencies.1

The present dispute springs from defendant's refusal to grant plaintiffs approval to modify railroad agencies operated in Georgia. In May of 1995 plaintiff CSX filed an application with defendant to scale its Cordele agency down from two to one employees. (Compl. at 8.) A hearing was held on the Cordele application before defendant, ending in defendant's denial of the application. (Id.) Plaintiff Norfolk operates approximately 25 railroad agencies in Georgia for which defendant has denied permission to discontinue, and currently has approximately 50 applications pending before defendant requesting permission to modify other services or facilities in Georgia. (Compl. at 4.)

Plaintiffs contend that defendant's authority to regulate the modification or discontinuance of agencies in Georgia was terminated by Congress's passage of the ICC Termination Act of 1995, 49 U.S.C. § 10101, et seq. The ICC Termination Act went into effect on January 1, 1996. The Act was passed in an effort to reduce the regulation of railroads and other modes of surface transportation. See 49 U.S.C. § 10101. The Act abolished the Interstate Commerce Commission (hereinafter "ICC"), and created the Surface Transportation Board (hereinafter "STB") to perform some of the functions previously performed by the ICC. The Act also made several changes to its predecessor, the Staggers Rail Act, in line with the policy of Congress to decrease regulatory controls over the railroad industry. Plaintiffs contend that one of these changes is federal preemption of state regulatory control over railroad services such as agencies.

The parties agree that the preemptive effect of the ICC Termination Act is a question of law appropriate for resolution by summary judgment. They have filed cross motions for summary judgment on the issue whether defendant still has the authority to regulate agency closings in Georgia. (Compl. at 11.)

DISCUSSION
I. Jurisdiction

Defendants do not contest the Court's jurisdiction over this litigation. Plaintiffs address the issue nevertheless, and the Court notes that it has jurisdiction to entertain the present suit under 28 U.S.C. § 1331 and the Supreme Court's opinion in Shaw v. Delta Air Lines, 463 U.S. 85, 103 S.Ct. 2890, 77 L.Ed.2d 490 (1983). In Shaw, the Court held that a plaintiff seeking injunctive relief from state regulation claimed to be preempted by a federal statute presents a federal question which the federal courts have jurisdiction under 28 U.S.C. § 1331 to resolve. Id. at 96, 103 S.Ct. at 2899. Because plaintiffs' complaints seek to enjoin the exercise of regulatory authority by GPSC, which plaintiffs claim has been preempted by the ICC Termination Act, plaintiffs' claims arise under federal law, and are within this Court's jurisdiction under 28 U.S.C. § 1331.

II. Motion to Amend Complaint

Plaintiffs have moved for leave to amend their original complaints pursuant to FED.R.CIV.P. 15(a). Rule 15(a) provides that leave to amend "shall be freely given when justice so requires." The standard for allowing amendments under Rule 15(a) is a liberal one. See Foman v. Davis, 371 U.S. 178, 181, 83 S.Ct. 227, 230, 9 L.Ed.2d 222 (1962) (stating that "[i]f the underlying facts or circumstances relied upon by a plaintiff may be a proper subject of relief, he ought to be afforded an opportunity to test his claim on the merits"); Rosen v. TRW, Inc., 979 F.2d 191, 194 (11th Cir.1992) (holding that "where a more carefully drafted complaint might state a claim, a plaintiff must be given at least one chance to amend the complaint before the district court dismisses the action with prejudice"); and Shipner v. Eastern Air Lines, Inc., 868 F.2d 401, 406 (11th Cir.1989) (holding that leave to amend under Rule 15(a) should be granted unless substantial reason exists for its denial). The generally liberal standard for allowing amendments can be overcome by factors such as "undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, and futility of the amendment." Nolin v. Douglas County, 903 F.2d 1546, 1550 (11th Cir.1990) (citing Foman v. Davis, 371 U.S. 178, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962)).

None of these factors appear to be applicable to the present suit. Plaintiffs seek to amend their original complaints to name individual members of GPSC as defendants, instead of naming GPSC itself. The GPSC has in a recently filed motion for summary judgment asserted Eleventh Amendment immunity as a defense. (See Def. Mot. for Sum. J. [18] at 12.) As discussed infra, the Eleventh Amendment bars suit in federal court against state agencies such as GPSC. An exception to Eleventh Amendment immunity was created by the Supreme Court's decision in Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908). The doctrine of Ex parte Young allows a plaintiff to sue individual state officials for declaratory and injunctive relief to stop alleged continuing violations of federal law. The amendment plaintiffs request would allow plaintiffs to argue that their suit comes within the Ex parte Young exception to the Eleventh Amendment, and have this action resolved on the merits.

Given the liberal standard that district courts must use for allowing amendments, and the absence of any factors such as bad faith outweighing the policy of liberally allowing amendments2, the Court finds that plaintiffs should be allowed to amend their complaints in order to press their argument that as amended their complaints come within the Ex parte Young exception to Eleventh Amendment immunity.

III. Motion to Intervene

TCU has moved to intervene as a defendant in this action. It argues that it is entitled to intervene as a matter of right under FED.R.CIV.P. 24(a), or alternatively that the Court should use its discretion to allow permissive intervention under Rule 24(b). Rule 24(a) provides in relevant part that "upon timely application anyone shall be permitted to intervene in an action ... when the applicant claims an interest relating to the property or transaction which is the subject of the action and the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant's ability to protect that interest, unless the applicant's interest is adequately represented by existing parties." FED. R.CIV.P. 24(a). In order to intervene as of right under Rule 24(a) TCU must show: (1) that its application to intervene is timely; (2) that TCU has an interest relating to the property or transaction which is the subject of the main action; (3) that disposition of the main action may cause practical harm to TCU; and (4) that TCU's interest is inadequately represented by existing parties. Federal Sav. & Loan Ins. Corp. v. Falls Chase Special Taxing Dist., 983 F.2d 211, 215 (11th Cir.1993) (citing Chiles v. Thornburgh, 865 F.2d 1197, 1213 (11th Cir.1989)). Although it is undisputed that TCU's motion to intervene is timely, plaintiffs challenge each of the remaining elements that TCU must show in order to intervene as of right.

A. Interest

Although the Supreme Court has not articulated precisely the type of interest that is necessary for intervention as of right, it is clear that Rule 24(a) does not require that an individual have a property or economic interest or that an individual be bound by judgment in a case in order to intervene as of right. See 7C CHARLES ALAN WRIGHT, ARTHUR R. MILLER & MARY KAY KANE, FEDERAL PRACTICE & PROCEDURE § 1908, at 283-84 (hereinafter "WRIGHT") (citing Smuck v. Hobson, 408 F.2d 175 (D.C.Cir.1969) (en banc)). The 1966 Amendments to Rule 24(a) were passed to eliminate these requirements, which were thought to be too restrictive. Id.

The Court finds that TCU has a sufficient interest in the present litigation to justify intervention under Rule 24(a). TCU is a union organization that represents railworkers in Georgia. It maintains that its members have a continuing interest in whether GPSC will continue to regulate railroads because its members are usually adversely affected by...

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