New England Cent. R.R. v. Springfield Terminal

• Decision Date: 03 February 2006
• Docket Number: No. CIV.A. 04-30235-MAP.,CIV.A. 04-30235-MAP.
• Citation: 415 F.Supp.2d 20
• Parties: NEW ENGLAND CENTRAL RAILROAD, INC., Plaintiff v. SPRINGFIELD TERMINAL RAIWAY COMPANY and Boston and Maine Corporation, Defendants
• Court: U.S. District Court — District of Massachusetts

415 F.Supp.2d 20

NEW ENGLAND CENTRAL RAILROAD, INC., Plaintiff v. SPRINGFIELD TERMINAL RAIWAY COMPANY and Boston and Maine Corporation, Defendants

No. CIV.A. 04-30235-MAP.

United States District Court, D. Massachusetts.

February 3, 2006.

Robert B. Culliford, Guilford Transportation Industries, Inc., Portsmouth, NH, for Boston and Maine Corporation, Springfield Terminal Railway Company, Defendants.

Richard A. Davidson, Jr., Flynn & Associates, PC, Quincy, for New England Central Railroad, Inc., Plaintiff.

Michael B. Flynn, Flynn & Associates, PC, Quincy, for New England Central Railroad, Inc., Plaintiff.

Eric L. Hirschhorn, Winston & Strawn, Washington, DC, for Springfield Terminal Railway Company, Boston and Maine Corporation, Defendants.

MEMORANDUM AND ORDER REGARDING DEFENDANTS' PARTIAL MOTION TO DISMISS (Docket No. 20)

PONSOR, District Judge.

I. INTRODUCTION

This case concerns a dispute over liability for damages resulting from a train derailment. Plaintiff, New England Central Railroad, Inc., is seeking compensation under federal and state law for damage to its track and property, and for related economic losses, caused by Defendants, Springfield Terminal Railway Company and Boston and Maine Corporation

Defendants have moved to dismiss Plaintiff's state law claims on the ground that they are preempted by federal law. For the reasons set forth below, Defendants' Partial Motion to Dismiss will be denied.

II. FACTS AND PROCEDURAL HISTORY

A. The Derailment.

On July 3, 2004, at approximately 6:40 a.m., Defendants' nineteen-car freight train was en route on Plaintiff's Connecticut River Line, when the trailing wheels of the sixth freight car came off the tracks. Unaware that the wheels had derailed, the Defendants' train crew continued to operate the train, dragging the derailed car for approximately five miles, across a bridge and three graded crossings. Eventually, when its wheels hit a piece of track known as a "frog," the sixth car overturned, derailing the following six cars.

The incident caused extensive damage to Plaintiff's trackage and related property in the area of the derailment. About five miles of Plaintiffs track were shut down for several days. When the line subsequently reopened, it remained under a speed restriction for thirty days while repair work continued.

Plaintiff claims that damages from this incident include clean-up and repairs to the track, economic losses stemming from the period during which the National Railroad Passenger Corporation ("Amtrak") was not able to use the tracks and had to bus its passengers around the damaged track, lost Amtrak "run-time" financial incentives for the duration of the speed restrictions, and other costs incurred as a result of the track closure.

Defendants have been operating trains over Plaintiff's track since 1990 pursuant to a trackage rights agreement (the "Agreement") imposed by the Interstate Commerce Commission (ICC). See Amtrak—Conveyance of B & M in Conn. River Line in VT. & NH, 6 I.C.C.2d 539, 1990 WL 287265 (1990).¹

B. Surface Transportation Board Decisions.

On November 1, 2004, Defendants filed a formal complaint and petition for a declaratory order with the ICC's successor, the Surface Transportation Board (STB). In their complaint, Defendants alleged that the derailment was caused by Plaintiff's failure to adequately maintain the track, and that Defendants were therefore entitled to damages. In a decision served February 24, 2005, the STB dismissed Defendants' complaint and request for a declaratory order. The Board found that because the issues presented in the case were fact-bound and predominantly involved contract and tort claims, they were better suited for court adjudication. See Boston & Me. Corp. v. New England Cent. R.R., STB Fin. Dkt. No. 34612, 2005 WL 429631, slip op. at 3 (served Feb. 24, 2005). Defendants promptly filed a request for reconsideration.

In a decision served January 10, 2006, the Board partially granted Defendants' request for reconsideration of the February 2005 opinion. See Boston & Me. Corp. v. New England Cent. R.R., STB Fin. Dkt. No. 34612, 2006 WL 47366 (served Jan. 10, 2006). The Board "provide[d] guidance on the proper interpretation" of the Agreement's liability provision, but "continue[d] to defer to the courts the resolution of the remaining issues," which "predominantly involve claims of breach of contract and tort." Id., slip op. at 3.

Two days later, in response to the Board's decision, Defendants withdrew the portion of the motion now before this court that sought to refer Plaintiff's federal claims to the STB under the primary jurisdiction doctrine.

C. Complaint and Partial Motion to Dismiss.

On December 2, 2004, one month after Defendants' first STB filing, Plaintiff filed its complaint with this court. Plaintiff's amended complaint alleges ten federal and state counts against Defendants. Counts I through IV are federal claims: failure to obey an order of the STB (the Agreement) in violation of 49 U.S.C. § 11704(a) (Counts I and II); and failure to obey an order of the STB to pay damages specified under the Agreement in violation of 49 U.S.C. § 11704(b), (c) (Counts III and IV). The remaining counts assert state common law claims: breach of contract (Counts V and VIII); negligence (Counts VI and IX); and gross negligence and reckless conduct (Counts VII and X).

Defendants now move to dismiss Plaintiff s state law claims on the ground that they are preempted by federal law.

III. DISCUSSION

A. The Preemption Provision: 49 U.S.C. § 10501(b).

Defendants argue that Plaintiff's common law tort claims, Counts V—X must be dismissed because they are preempted by 49 U.S.C. § 10501(b). State law is preempted by federal law when: Congress' intent is "explicitly stated in the statute's language or implicitly contained in its structure and purpose;" it "actually conflicts with federal law;" or "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) (internal citations and quotations omitted).

The ICCTA's preemption provision states:

The jurisdiction of the Board over —

(1) transportation by rail carriers, and the remedies provided in this part with respect to rates, classifications, rules (including car service, interchange, and other operating rules), practices, routes, services, and facilities of such carriers; and

(2) the construction, acquisition, operation, abandonment, or discontinuance of spur, industrial, team, switching, or side tracks, or facilities, even if the tracks are located, or intended to be located, entirely in one State, is exclusive. 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) (2005) (emphasis added). While the language of the Act is broad, the narrow question at issue in this case is whether § 10501(b) preempts common law claims arising from a dispute between two railroads over liability for a derailment.

Where, as here, a statute includes language that expressly preempts state law, a court must still define the scope of the preemption by "identify[ing] the domain expressly preempted by that language." Medtronic, Inc. v. Lohr, 518 U.S. 470, 484, 116 S.Ct. 2240, 135 L.Ed.2d 700 (internal quotation omitted) (1996). "Congress' intent primarily is discerned from the language of the preemption statute and the `statutory framework' surrounding it." Id. at 486, 116 S.Ct. 2240.

The strong language of § 10501(b) demonstrates that the preemption provision has a broad scope. Cf. Sprietsma v. Mercury Marine, 537 U.S. 51, 63, 123 S.Ct. 518, 154 L.Ed.2d 466 (2002) (parsing the language of a narrower preemption provision). The only potential limitation on the face of the statute is the clause "with respect to regulation of rail transportation." 49 U.S.C. § 10501(b) (emphasis added). Thus, some courts have argued that § 10501(b) does not apply to all "rail transportation," but only to regulation of such transportation. See, e.g., Fl. E. Coast Ry. Co. v. City of West Palm Beach, 266 F.3d 1324, 1331 (11th Cir.2001); but see City of Auburn, v. United States, 154 F.3d 1025, 1030 (9th Cir.1998)("[T]here is nothing in the case law that supports Auburn's argument that, through the ICCTA, Congress only intended preemption of economic regulation of the railroads."); Wisconsin Cent. Ltd. v. City of Marshfield, 160 F.Supp.2d 1009, 1014 (W.D.Wis.2000) ("The ICCTA expressly preempts more than just state laws specifically designed to regulate rail transportation.").

The "statutory framework" surrounding § 10501(b) also guides an analysis of the scope of the preemption. The ICCTA is informed by a broad policy of railroad deregulation, and was enacted specifically to abolish the ICC and "substantially deregulate[]" the railroad industry. See Pejepscot Indus. Park, Inc. v. Maine Cent. R.R. Co., 215 F.3d 195, 197 (1st Cir.2000) (quoting H.R.Rep. No. 104-311, at 82 (1995)); see also Friberg v. Kan. City S. Ry. Co., 267 F.3d 439, 443 (5th Cir.2001) ("The regulation of railroad operations has long been a traditionally federal endeavor, to better establish uniformity in such operations and expediency in commerce, and it appears manifest that Congress intended the ICCTA to further that exclusively federal effort, at least in the economic realm." (footnote omitted)). Section 10501(b) is a broader preemption than the provisions in earlier railroad statutes, such that "[i]t is difficult to imagine a broader statement of Congress's intent to preempt state regulatory authority over railroad operations." CSX Transp., Inc. v. Ga. Pub. Serv. Comm'n, 944 F.Supp. 1573, 1581 (N.D.Ga. 1996); cf. Ill. Commerce Comm'n v. ICC, 879 F.2d...