CSX Transp. v. Public Utilities Com'n of Ohio

• Decision Date: 12 December 1988
• Docket Number: No. C2-88-1023.,C2-88-1023.
• Citation: 701 F. Supp. 608
• Parties: CSX TRANSPORTATION, INC., et al., Plaintiffs, v. The PUBLIC UTILITIES COMMISSION OF OHIO, et al., Defendants.
• Court: U.S. District Court — Southern District of Ohio

701 F. Supp. 608

CSX TRANSPORTATION, INC., et al., Plaintiffs, v. The PUBLIC UTILITIES COMMISSION OF OHIO, et al., Defendants.

No. C2-88-1023.

United States District Court, S.D. Ohio, E.D.

December 12, 1988.

Patrick J. Smith, Robert W. Trafford, Janet J. Henry, Kathleen M. O'Malley, Samuel H. Porter, Porter, Wright, Morris & Arthur, Columbus, Ohio, for plaintiffs.

Sally J. Kircher, Jacksonville, Fla., for plaintiff, CSX Transp., Inc.

John R. Jenchura, Philadelphia, Pa., for plaintiff, Consolidated Rail Corp.

A. Gayle Jordan, Norfolk, Va., for plaintiff Norfolk and Western Ry. Co.

Mary P. Sclawy, Detroit, Mich., for plaintiff Grand Trunk Western Ry. Co.

Anthony J. Celebrezze, Jr., Atty. Gen. of Ohio, and Robert S. Tongren and James B. Gaines, Asst. Attys. Gen., Public Utilities Section, Columbus, Ohio, for defendants.

OPINION AND ORDER

GRAHAM, District Judge.

In 1970 Congress enacted the Federal Railroad Safety Act (FRSA), 45 U.S.C. § 421 et seq. which authorized the Secretary of the Department of Transportation to adopt railroad safety regulations. Congress included in the act broad preemption provisions excluding the states from legislating in any area of railroad safety already covered by regulations adopted by the Secretary. In 1974 Congress enacted the Hazardous Materials Transportation Act (HMTA), 49 U.S.C.App. § 1801 et seq. authorizing the Secretary to adopt rules and regulations governing the transportation of hazardous materials by any mode of transportation. The preemption provisions of the HMTA permit the states to adopt and enforce their own laws and rules regulating the transportation of hazardous materials so long as they are not inconsistent with federal rules adopted under the HMTA. This case presents the question of whether state legislation regulating the transportation of hazardous materials by rail is governed by the strict preemption provisions of the FRSA or by the more liberal preemption provisions of the HMTA.

The State of Ohio has recently passed legislation incorporating into Ohio law the federal regulations adopted by the Secretary of Transportation under the HMTA relating to the transportation of hazardous materials by rail. See Ohio Rev.Code § 4907.64 (effective September 26, 1988) (authorizing the Public Utilities Commission of Ohio (PUCO) to adopt railroad safety laws "consistent with, and equivalent in scope, coverage, and content to, the provisions of the HMTA, and regulations adopted under it."); Ohio Admin.Code § 4901:3-1-10 (effective December 10, 1988) (adopting the provisions of the HMTA regulations contained in 49 C.F.R. §§ 171-179 governing the transportation of hazardous materials by rail). Ohio seeks to enforce these rules against railroads through its own system of enforcement, which includes civil penalties. See Ohio Rev.Code § 4905.83; Ohio Admin.Code §§ 4902:2-7-01 through 4901:2-7-22.

This legislation resulted from a study of state and federal hazardous materials regulation, enforcement and emergency response conducted by a group of state agencies collectively known as the Ohio Hazardous Substances Emergency Team (OHSET) which was formed in response to the July, 1986 disaster in Miamisburg, Ohio when a number of railroad cars operated by plaintiff CSX Transportation, Inc., derailed near Miamisburg, Ohio. A rail car containing phosphorous ignited and burned, spreading a cloud of toxic gas throughout the area and forcing the evacuation of 40,000 citizens. The Ohio act reflects the judgment of the executive and legislative branches of state government that federal enforcement of regulations governing hazardous materials transported by rail is inadequate.

Plaintiffs are four major railroads engaged in interstate rail transportation in and through Ohio who challenge the constitutionality of the newly enacted Ohio statutes and administrative regulations. Defendants are the PUCO, its chairman and commissioners. Plaintiffs challenge the Ohio statutes and regulations on the grounds that they violate the Supremacy Clause of the United States Constitution, the preemption provisions of the FRSA and the HMTA and on the further grounds that they impose an undue burden on interstate commerce. The matter is now before the Court on the plaintiffs' motion for summary judgment and the defendants' cross motion for summary judgment. In their motions, the parties seek summary judgment on the issue of federal preemption.

The United States Supreme Court has recently summarized the various tests enunciated for determining whether federal law has preempted state legislation:

The Supremacy Clause of Art. VI of the Constitution provides Congress with the power to pre-empt state law. Preemption occurs when Congress, in enacting a federal statute, expresses a clear intent to pre-empt state law, Jones v. Rath Packing Co., 430 U.S. 519, 97 S.Ct. 1305, 51 L.Ed.2d 604 (1977), when there is outright or actual conflict between federal and state law, e.g., Free v. Bland, 369 U.S. 663, 82 S.Ct. 1089, 8 L.Ed.2d 180 (1962), where compliance with both federal and state law is in effect physically impossible, Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132 83 S.Ct. 1210, 10 L.Ed.2d 248 (1963), where there is implicit in federal law a barrier to state regulation, Shaw v. Delta Air Lines, Inc., 463 U.S. 85 , 103 S.Ct. 2890, 77 L.Ed.2d 490 (1983), where Congress has legislated comprehensively, thus occupying an entire field of regulation and leaving no room for the States to supplement federal law, Rice v. Santa Fe Elevator Corp., 331 U.S. 218 67 S.Ct. 1146, 91 L.Ed. 1447 (1947), or where the state law stands as an obstacle to the accomplishment and execution of the full objectives of Congress. Hines v. Davidowitz, 312 U.S. 52 , 61 S.Ct. 399, 85 L.Ed. 581 (1941). Pre-emption may result not only from action taken by Congress itself; a federal agency acting within the scope of its congressionally delegated authority may pre-empt state regulation. Fidelity Federal Savings & Loan Assn. v. De la Cuesta, 458 U.S. 141 , 102 S.Ct. 3014, 73 L.Ed.2d 664 (1982); Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691 , 104 S.Ct. 2694, 81 L.Ed.2d 580 (1984).

Louisiana Public Service Commission v. FCC, 476 U.S. 355, 358-369, 106 S.Ct. 1890, 1898-99, 90 L.Ed.2d 369 (1986).

At the heart of each of these standards is the discernment of the true purpose of Congress. "The critical question in any pre-emption analysis is always whether Congress intended that federal regulation supersede state law." Louisiana Public Service Commission, 476 U.S. at 369, 106 S.Ct. at 1899.

The stated purpose of the FRSA is "to promote safety in all areas of railroad operations." 45 U.S.C. § 421. The Act requires the Secretary of Transportation to prescribe appropriate rules, regulations, orders and standards for all areas of railroad safety and to conduct research, development, testing, evaluation and training in all areas of railroad safety. In 45 U.S.C. § 434 Congress declared its intention that laws, rules, regulations, orders and standards relating to railroad safety should be nationally uniform to the extent practicable. The statute reads as follows:

The Congress declares that laws, rules, regulations, orders, and standards relating to railroad safety shall be nationally uniform to the extent practicable. A State may adopt or continue in force any law, rule, regulation, order, or standard relating to railroad safety until such time as the Secretary has adopted a rule, regulation, order, or standard covering the subject matter of such State requirement. A State may adopt or continue in force an additional or more stringent law, rule, regulation, order, or standard relating to railroad safety when necessary to eliminate or reduce an essentially local safety hazard, and when not incompatible with any Federal law, rule, regulation, order, or standard, and when not creating an undue burden on interstate commerce.

Thus, under 45 U.S.C. § 434, a state may legislate in areas relating to railroad safety only until such time as the Secretary has adopted a rule, regulation, order or standard covering the same subject matter. A state, within limitations, may adopt an additional or more stringent rule only when necessary to address a local safety hazard. This exception does not apply to this case.

The FRSA, however, does contemplate a limited state role in enforcement. Title 45, U.S.C. § 435 provides that a state may participate in investigation and surveillance in connection with any rule or standard prescribed by the Secretary under the FRSA pursuant to certification provisions contained in the statute. The section provides, however, that "the Secretary shall retain the exclusive authority to assess and compromise penalties ... for the violation of rules, regulations, orders, and standards prescribed by the Secretary" under the FRSA.

The stated purpose of the HMTA is "to improve the regulatory and enforcement authority of the Secretary of Transportation to protect the Nation adequately against the risks to life and property which are inherent in the transportation of hazardous materials in commerce." 49 U.S.C. App. § 1801. The Act authorizes the Secretary to issue regulations for the safe transportation of hazardous materials which "shall be applicable to any person who transports ... a hazardous material." 49 U.S.C.App. § 1804(a). The Act authorizes the Secretary to issue regulations governing not only the transportation of hazardous materials, but also their handling and the manufacture, repair and testing of the containers in which they are transported. 49 U.S.C.App. §§ 1804, 1805.

In 49 U.S.C.App. § 1811, Congress provided for preemption of state laws on the subjects covered by the HMTA only when they are inconsistent with the Act or regulations adopted pursuant to it.

(a) Except as provided in subsection (b) of this section, any requirement, of a State or political subdivision thereof, which is inconsistent with

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