Green Mountain R.R. Corp. v. Vermont

Decision Date14 April 2005
Docket NumberNo. 04-0366-CV.,04-0366-CV.
Citation404 F.3d 638
PartiesGREEN MOUNTAIN RAILROAD CORPORATION, Plaintiff-Appellee, v. State of VERMONT, Vermont Agency of Natural Resources and William H. Sorrell, as Attorney General of the State of Vermont, Defendants-Appellants.
CourtU.S. Court of Appeals — Second Circuit

Jeanne Elias, Assistant Attorney General for the State of Vermont, (Rebecca M. Ellis, Bridget Asay, Assistant Attorneys General, on the brief) Montpelier, VT, for Defendants-Appellants.

Robert B. Luce, (Eric A. Poehlmann, on the brief) Downs Rachlin Martin PLLC, Burlington, VT, for Plaintiff-Appellee.

Evelyn G. Kitay (Ellen D. Hanson, General Counsel, on the brief) Washington, D.C. for Amicus Curiae Surface Transportation Board.

Robert M. Jenkins III, David M. Gossett, Mayer Brown Rowe & Maw LLP, Washington D.C.; Louis P. Warchot, Dennis J. Starks, Association of American Railroads, Washington, D.C.; George A. Aspatore, Sarah J. Bailiff, Paul Guthrie, Thomas J. Healey, Paul R. Hitchcock, Theodore K. Kalick, Robert T. Opal, Louise Anne Rinn, Peter J. Shudtz, Sidney L. Strickland, Jr., of Counsel, on submission, for Amicus Curiae Association of American Railroads.

Before: CARDAMONE, JACOBS, CABRANES, Circuit Judges.

JACOBS, Circuit Judge.

Green Mountain Railroad Corporation ("Green Mountain") proposed to build transloading facilities on its property in Vermont, and brings this action seeking a declaration that Vermont's environmental land use statute, Act 250, Vt. Stat. Ann. Tit. 10, § 6001 et seq., is for that purpose preempted by the Interstate Commerce Commission Termination Act of 1995, 49 U.S.C. § 10101 et seq. (the "Termination Act"). The State of Vermont, its Agency of Natural Resources and the State Attorney General appeal from a judgment entered in the United States District Court for the District of Vermont (Murtha, J.), granting Green Mountain's motion for summary judgment on the preemption ground. Green Mountain R.R. Corp. v. Vermont, No. 01-CV-181, 2003 U.S. Dist. LEXIS 23774, at *2-3 (D.Vt. Dec. 15, 2003).

The Termination Act expressly preempts "remedies provided under Federal or State law" and vests with the Surface Transportation Board (the "Transportation Board"), a federal agency, exclusive jurisdiction over "transportation by rail carriers" and "the construction ... of ... facilities...." 49 U.S.C. § 10501(b). The term "transportation" includes a "warehouse... yard, property, facility, instrumentality, or equipment of any kind related to the movement of passengers or property, or both, by rail." 49 U.S.C. § 10102.

"We review a district court's grant of summary judgment de novo." See Young v. County of Fulton, 160 F.3d 899, 902 (2d Cir.1998). In so doing, we construe the evidence in the light most favorable to the State as the non-moving party, and draw all reasonable inferences in its favor. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). For the reasons that follow, we affirm.

I

Green Mountain is a "rail carrier" as defined by the Termination Act, 49 U.S.C. § 10102(5), with 52 miles of track between Rutland, Vermont and Cold River, New Hampshire. The line serves transhipping industries, i.e., industries that rely on trucks to transport goods from the rail site for processing elsewhere. Along its rail line in Rockingham, Vermont, Green Mountain owns a 66-acre tract known as "Riverside," bounded by the Connecticut River on the east. Portions of Riverside are wetlands unusable for development.

Green Mountain proposed to build facilities at Riverside to serve the following operations: (1) unloading bulk salt arriving by rail for local distribution by truck or for temporary storage in a shed pending distribution; (2) temporary storage and transport of "non-bulk goods, such as steel pipe[s]"; and (3) unloading bulk cement arriving by rail for storage in silos and eventual transport by truck. Some of these operations are conducted within a 100-foot strip alongside the Green Mountain tracks and the Connecticut River.

Vermont argues that construction of the transloading facilities is subject to Act 250, an environmental land use statute that mandates preconstruction permits for land development. Permit applications are filed with one of nine District Commissions that evaluate environmental impact using ten criteria, including: "undue water or air pollution," Vt. Stat. Ann. Tit. 10, § 6086(a)(1), and "undue adverse effect on the scenic or natural beauty of the area, aesthetics, historic sites or rare and irreplaceable natural areas," Vt. Stat. Ann. Tit. 10, § 6086(a)(8). The District Commission's decisions are appealable to Vermont's Environmental Board; decisions of the Environmental Board are appealable directly to the Vermont Supreme Court. Vt. Stat. Ann. Tit. 10, § 6089(a) & (b). Most permit decisions under Act 250 are issued within 60 days from the filing of an application.1

In 1997, PMI Lumber leased part of Riverside and applied for an Act 250 construction permit. PMI Lumber proposed to satisfy environmental criteria by a 75-foot buffer zone along the river. The Vermont Agency of Natural Resources recommended that the buffer be increased to 100 feet.

A local permitting agency subsequently issued Land Use Permit # 2W0038-2 (the "dash-2 permit") in the names of PMI Lumber and Green Mountain. Condition 14 required maintenance of a 100-foot buffer zone. When PMI Lumber ceased operations at the site, Green Mountain used it for its transloading activities. Green Mountain encroached on the buffer zone with a settling pond, storage of materials, and vehicles.

In Spring 1998, Green Mountain sought to amend the dash-2 permit to allow construction of a 100-foot by 275-foot salt storage shed. In January 1999, the State granted Land Use Permit # 2W0038-3 (the "dash-3 permit"), which stipulated conditions, including that the shed be rectangular, and either brown or dark green. Several months later, in October 1999, Green Mountain applied for another permit amendment (the "dash-3B permit" application) to modify the size, color and location of the salt shed. Although no such permit issued, Green Mountain started construction of its modified salt shed in November 1999.

In January 2000, the State issued a notice of violation of the dash-2 permit, citing (among other things) storage of materials within the 100-foot buffer zone. The State issued a second notice of violation in February 2000, alleging construction of the salt shed without the dash-3B permit.

In Spring 2000, the State conducted hearings on Green Mountain's dash-3B salt shed permit application. Green Mountain objected orally and in writing that the State Environmental Commission lacked jurisdiction to adjudicate the pending permit application because the Termination Act, which expressly preempts "remedies provided under Federal or State law" and vests with the Transportation Board, a federal agency, exclusive jurisdiction over "transportation by rail carriers," 49 U.S.C. § 10501, preempts Act 250.

Faced with the threatened enforcement of Act 250, Green Mountain filed this suit in June 2001, seeking a declaration that the Termination Act preempts Act 250. Simultaneously, Green Mountain requested a declaratory order to the same effect from the Transportation Board.

The Transportation Board denied the declaratory relief in May 2002, deferring to the district court. In the meantime, the State moved to dismiss the district court action. While that motion was pending, the State issued the dash-3B permit in August 2001. A month later, the district court granted the State's motion to dismiss Green Mountain's facial challenge to the applicability of Act 250, but ordered "further development of the record" to determine whether the State's "effort to enforce one or more conditions of the [dash-2] Permit violates the [Termination Act] in this particular case." Green Mountain R.R., No. 1: 01CV181, 2003 U.S. Dist. LEXIS 23774, at *2 (quoting an earlier ruling) (internal quotation marks omitted).

Following discovery, the parties cross-moved for summary judgment. On December 15, 2003, the court granted Green Mountain's motion (and denied the State's motion) on the ground that "the state's efforts to enforce Act 250 in this case are preempted under the [Termination Act]." Id.

II

The question presented is whether the Termination Act preempts Vermont's Act 250 with respect to the underlying permit controversy. State law is preempted by federal law when: (1) the preemptive intent is "`explicitly stated in [a federal] statute's language or implicitly contained in its structure and purpose'"; (2) state law "actually conflicts with federal law"; or (3) "federal law so thoroughly occupies a legislative field `as to make reasonable the inference that Congress left no room for the States to supplement it.'" Cipollone v. Liggett Group, Inc., 505 U.S. 504, 516, 112 S.Ct. 2608, 120 L.Ed.2d 407 (1992) (quoting Jones v. Rath Packing Co., 430 U.S. 519, 525, 97 S.Ct. 1305, 51 L.Ed.2d 604 (1977), and Fidelity Fed. Sav. & Loan Ass'n v. De la Cuesta, 458 U.S. 141, 153, 102 S.Ct. 3014, 73 L.Ed.2d 664 (1982)). The "ultimate touch-stone" of preemption analysis is congressional intent: "Congress' intent, of course, primarily is discerned from the language of the pre-emption statute and the statutory framework surrounding it." Medtronic, Inc. v. Lohr, 518 U.S. 470, 485-86, 116 S.Ct. 2240, 135 L.Ed.2d 700 (1996) (internal quotation marks omitted).

The Termination Act contains an express preemption clause:

Except as otherwise provided in this part, the remedies provided under this part with respect to regulation of rail transportation are exclusive and preempt the remedies provided under Federal or State law.

49 U.S.C. § 10501(b). The Termination Act Section 10501 vests the Transportation Board with exclusive jurisdiction over "transportation by rail carriers" and "the...

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