Missouri Pacific R. Co. v. Railroad Com'n of Texas

• Decision Date: 17 June 1987
• Docket Number: Civ. No. A-86-CA-569.
• Citation: 671 F. Supp. 466
• Parties: MISSOURI PACIFIC RAILROAD COMPANY, Southern Pacific Transportation Company, the Atchison, Topeka and Santa Fe Railway Company, Burlington Northern Railroad Company, Missouri-Kansas-Texas Railroad Company, St. Louis-Southwestern Railway Company, Kansas City Southern Railway Company and Louisiana and Arkansas Railway Company v. RAILROAD COMMISSION OF TEXAS and its members, Hon. James E. Nugent, Hon. Mack Wallace and Hon. Clark Jobe.
• Court: U.S. District Court — Western District of Texas

671 F. Supp. 466

MISSOURI PACIFIC RAILROAD COMPANY, Southern Pacific Transportation Company, the Atchison, Topeka and Santa Fe Railway Company, Burlington Northern Railroad Company, Missouri-Kansas-Texas Railroad Company, St. Louis-Southwestern Railway Company, Kansas City Southern Railway Company and Louisiana and Arkansas Railway Company v. RAILROAD COMMISSION OF TEXAS and its members, Hon. James E. Nugent, Hon. Mack Wallace and Hon. Clark Jobe.

Civ. No. A-86-CA-569.

United States District Court, W.D. Texas, Austin Division.

June 17, 1987.

COPYRIGHT MATERIAL OMITTED

Robert B. Burns, Jr., Wilson, Grosenheider & Burns, Austin, Tex., for Topeka Santa Fe Ry. Atchison, Kansas City Southern Ry. Co., Louisiana and Arkansas Ry. Co., and Missouri Pacific Ry. Co., plaintiffs.

Frank W. Calhoun, Lidell, Sapp & Zivley, Houston, Tex., for Burlington Northern R. Co. plaintiff.

Michael E. Roper, MKT R. Co., Legal Dept., Dallas, Tex., for Missouri-Kansas-Texas R. Co. plaintiff.

Hugh L. McCulley, Houston, Tex., for Southern Pacific Transp., St. Louis-Southwestern Ry. Co., plaintiffs.

Douglas B. Fraser, Energy Div./Transp., Austin, Tex., for Clark Jobe, James E. Nugent, R.R. Comm. of Texas and Mack Wallace, defendants.

AMENDED MEMORANDUM OPINION AND ORDER

NOWLIN, District Judge.

Pursuant to Rule 60(a), the Court hereby amends its Memorandum Opinion and Order of May 8, 1987, and substitutes this corrected version.

Before the Court is the Plaintiff's Complaint for Declaratory and Injunctive Relief. The Court, having considered all of the briefs and evidence filed in this case, enters the following Memorandum Opinion.

I. BACKGROUND

On June 16, 1986 the Railroad Commission of Texas (RRC) adopted a rule requiring a caboose on most trains operating in Texas. The rule is codified at 16 TEX.ADMIN. CODE § 5.622. The rule had an effective date of July 7, 1986, and a compliance date of January 7, 1987. The Plaintiffs filed this action on October 17, 1986, and moved for a Temporary Restraining Order on January 5, 1987. On January 6, 1987 the Court, finding that the Plaintiff railroads (Railroads) were likely to succeed on the merits of their preemption claims, granted the TRO. The Railroads then filed a Motion for Preliminary Injunction, which came on for hearing before this Court on January 20, 1987. At the hearing, the parties submitted extensive testimony in affidavit form, and presented detailed legal arguments. At the close of the hearing, the Court made an oral ruling that the Railroads were entitled to the injunction.

Before the hearing began, the RRC made an oral motion to consolidate the hearing on the preliminary injunction with the trial on the merits, pursuant to FED.R.CIV.P. 65(a)(2). The Court directed the RRC to reduce that motion to writing and file it with the Clerk. The RRC has done so, and although the Railroads initially opposed the motion, they have since stated that they have no objection to such a consolidation. Thus, this matter is now before the Court for a final judgment. As noted, the hearing on the Railroads' Motion for Preliminary Injunction addressed only the preemption arguments. The Railroads have also stated claims for relief based upon arguments that the rule violates the commerce and contract clauses of the Constitution, that adoption of the rule was an ultra vires act by the RRC, and that the rule was an arbitrary and capricious act by the RRC. In keeping with the "settled practice" of not reaching constitutional issues unless necessary to resolve the case, see F.C.C. v. Pacifica Foundation, 438 U.S. 726, 735, 98 S.Ct. 3026, 3033, 57 L.Ed.2d 1073 (1978), the Court will not address the constitutional challenges to the rule. The Court also declines to rule on whether the RRC acted arbitrarily or capriciously in enacting the rule, or whether the act was ultra vires. Rather, the Court will address only the preemption arguments made by the Railroads, as those arguments are dispositive of the case.

II. JURISDICTION

As noted, this is an action for a declaratory judgment that the rule at issue is preempted by federal law, and for a permanent injunction enjoining enforcement of the rule. The RRC has made several arguments disputing the Court's jurisdiction over this matter. Those arguments are: (1) the Railroads lack standing to assert the interests of the federal government; (2) no case or controversy exists; (3) the case is not ripe; and (4) no federal question jurisdiction exists. The Court has examined these identical arguments, made in identical form, in another case. Missouri Pacific Railroad Company, et al v. Railroad Commission of Texas, et al, 653 F.Supp. 617 (W.D.Tex.1987) (MoPac I). In the Court's order granting summary judgment in that case, the Court found that all the arguments were without merit. Rather than restate what has already been said elsewhere, the Court will incorporate into this opinion that part of the order granting summary judgment in MoPac I which relates to jurisdiction. The arguments made in this case, identical to those made in MoPac I, have no more merit here than they did there, and will be rejected for the reasons stated in MoPac I. The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 2201 and 28 U.S.C. § 1331.

III. PREEMPTION

The Railroads have articulated several bases for a finding that section 5.622 is preempted by federal law. They argue that the rule is preempted by the Locomotive Boiler Inspection Act (LBIA), 45 U.S.C. § 22 et seq. (1986); the Federal Railroad Safety Act (FRSA), 45 U.S.C. § 421 et seq. (1986); and the Hazardous Materials Transportation Act (HMTA), 49 U.S.C. § 1801 et seq. (1976).

The Supremacy Clause, U.S. CONST. art. VI, cl. 2, nullifies state laws that "interfere with or are contrary to" federal law. Hillsborough County v. Automated Medical Laboratories, Inc., 471 U.S. 707, 105 S.Ct. 2371, 2375, 85 L.Ed.2d 714 (1985) (quoting Gibbins v. Ogden, 9 Wheat 1, 211, 6 L.Ed. 23 (1824) (Marshall, C.J.)); Rollins Environmental Services, Inc. v. Parish of St. James, 775 F.2d 627, 634 (5th Cir.1985). Congress is authorized to absolutely preempt state and local rulemaking authority in a particular field. Pacific Gas & Electric Co. v. State Energy Resources Comm'n, 461 U.S. 190, 203-04, 103 S.Ct. 1713, 1721-22, 75 L.Ed.2d 752 (1983); Jones v. Rath Packing Co., 430 U.S. 519, 525, 97 S.Ct. 1305, 1309, 51 L.Ed.2d 604 (1977).

Even where Congress has not entirely displaced state and local rulemaking in a specific area, those lower laws are preempted to the extent that they conflict with federal law. Where a lower law `stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress,' Hines v. Davidowitz, 312 U.S. 52, 67 61 S.Ct. 399, 404, 85 L.Ed. 581 (1941), it is preempted.

Rollins, 775 F.2d 634. Congressional intent to preempt state law in a given area may be inferred from the existence of a comprehensive scheme of federal regulation. Hillsborough, 105 S.Ct. at 2375. Preemption is also inferred when the area of law is one in which "the federal interest is so dominant that the federal system will be assumed to preclude enforcement of state laws on the same subject." Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230, 67 S.Ct. 1146, 1152, 91 L.Ed. 1447 (1947). Finally, state laws can be preempted by federal regulation as well as by federal statute. Hillsborough, 105 S.Ct. at 2375 (citing Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691, 699, 104 S.Ct. 2694, 2700, 81 L.Ed.2d 580 (1984)).

A. The LBIA

Although the LBIA does not contain an express preemption provision, the Supreme Court has held that the LBIA wholly preempts the subject matter of locomotive equipment. Napier v. Atlantic Coast Line Railroad Co., 272 U.S. 605, 613, 47 S.Ct. 207, 210, 71 L.Ed. 432 (1926). This rule was recently affirmed in Consolidated Rail Corp. v. Pennsylvania Public Utility Commission, 536 F.Supp. 653, 656-57 (E.D.Pa.1982), aff'd mem., 696 F.2d 981 (3d Cir.1982), aff'd mem., 461 U.S. 912, 103 S.Ct. 1888, 77 L.Ed.2d 280 (1983). The rule, as stated in Napier is that

state legislation is precluded, because the Boiler Inspection Act, as we construe it, was intended to occupy the field. The broad scope of authority conferred upon the Commission leads to that conclusion. Because the standard set by the Commission must prevail, requirements by the states are precluded, however commendable or however different their purpose.

Napier, 272 U.S. at 613, 47 S.Ct. at 210.

B. The FRSA

The FRSA contains an express preemption provision:

The Congress declares that laws, 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.

45 U.S.C. § 434 (1986). Thus, when the Secretary of Transportation promulgates rules or regulations that cover rail safety, a state may adopt or continue in force similar laws, rules or regulations only

1) when necessary to eliminate or reduce an essentially local safety hazard, and

2) when not incompatible with any federal provision, and

3) when not creating an undue burden on interstate commerce.

E.g., Donelon v. New Orleans Terminal Co., 474 F.2d 1108, 1112 (5th Cir.), cert. denied, 414 U.S. 855, 94 S.Ct. 157, 38 L.Ed.2d 105 (1973). If a state's rules or regulations covering a federally-addressed rail safety issue are to survive...