New York Susquehanna v. Jackson

• Decision Date: 04 September 2007
• Docket Number: No. 07-1675.,07-1675.
• Citation: 500 F.3d 238
• Parties: NEW YORK SUSQUEHANNA AND WESTERN RAILWAY CORPORATION, Plaintiff/Fourth Party Defendant v. Lisa P. JACKSON, in her official capacity as Commissioner of the New Jersey Department of Environmental Protection; New Jersey Meadowlands Commission; Robert R. Ceberio, in his official capacity as Executive Director of the New Jersey Meadowlands Commission; James Anzevino, in his official capacity as a Commissioner of the Meadowlands Commission; Michael J. Gonnelli, in his official capacity as a Commissioner of the New Jersey Meadowlands Commission; Leonard R. Kaiser, in his official capacity as a Commissioner of the New Jersey Meadowlands Commission; Mia M. Macri, in her capacity as a Commissioner of the New Jersey Meadowlands Commission; Eleanore Nissley, in her official capacity as a Commissioner of the New Jersey Meadowlands Commission; Charles A. Richman, in his official capacity as a Commissioner of the New Jersey Meadowlands Commission; Arlene Walther, in her official capacity as a Commissioner of the New Jersey Meadowlands Commission, Appellants Defendants/Counter-claimants/Third Party Plaintiffs v. Cardella Trucking Co., Inc.; Crossroads Recycling, Inc.; Hudson-National, LLC; MHF Logistical Solutions, Inc.; Millenium Resource Recovery, Ltd.; OnTrack Loading Company, Inc.; Precise Construction Contracting, Inc.; Rail-Tech, LLC.; Scott Excavating, LLC; Slane Rail Transport, LLC; Susquehanna Bulk Systems; X-Press Rail Transfer, LLC d/b/a 94th Street Rail Transfer, LLC, Third Party Defendants v. Slane Rail Transport, Inc., Fourth Party Plaintiff
• Court: U.S. Court of Appeals — Third Circuit

500 F.3d 238

NEW YORK SUSQUEHANNA AND WESTERN RAILWAY CORPORATION, Plaintiff/Fourth Party Defendant v. Lisa P. JACKSON, in her official capacity as Commissioner of the New Jersey Department of Environmental Protection; New Jersey Meadowlands Commission; Robert R. Ceberio, in his official capacity as Executive Director of the New Jersey Meadowlands Commission; James Anzevino, in his official capacity as a Commissioner of the Meadowlands Commission; Michael J. Gonnelli, in his official capacity as a Commissioner of the New Jersey Meadowlands Commission; Leonard R. Kaiser, in his official capacity as a Commissioner of the New Jersey Meadowlands Commission; Mia M. Macri, in her capacity as a Commissioner of the New Jersey Meadowlands Commission; Eleanore Nissley, in her official capacity as a Commissioner of the New Jersey Meadowlands Commission; Charles A. Richman, in his official capacity as a Commissioner of the New Jersey Meadowlands Commission; Arlene Walther, in her official

capacity as a Commissioner of the New Jersey Meadowlands Commission, Appellants Defendants/Counter-claimants/Third Party Plaintiffs v. Cardella Trucking Co., Inc.; Crossroads Recycling, Inc.; Hudson-National, LLC; MHF Logistical Solutions, Inc.; Millenium Resource Recovery, Ltd.; OnTrack Loading Company, Inc.; Precise Construction Contracting, Inc.; Rail-Tech, LLC.; Scott Excavating, LLC; Slane Rail Transport, LLC; Susquehanna Bulk Systems; X-Press Rail Transfer, LLC d/b/a 94th Street Rail Transfer, LLC, Third Party Defendants v. Slane Rail Transport, Inc., Fourth Party Plaintiff

No. 07-1675.

United States Court of Appeals, Third Circuit.

Argued July 10, 2007.

Opinion filed September 4, 2007.

Stuart Rabner, Attorney General of New Jersey, Nancy Kaplen, Assistant Attorney General, Kevin P. Auerbacher, (Argued), Deputy Attorney General, Jung W. Kim, Deputy Attorney General, R.J. Hughes Justice Complex, Trenton, NJ, for Appellants.

G. Paul Moates, Esquire (Argued), Paul A. Hemmersbaugh, Esquire, Matthew J. Warren, Esquire, Sidley Austin LLP, Washington, DC, for Appellee, N.Y. Susquehanna and Western Railway Corp.

John M. Scagnelli, Esquire (Argued), Kathleen J. Devlin, Esquire, Scarinci & Hollenbeck, LLC, Lyndhurst, NJ, for Appellee Third-Party Defendant MHF Logistical Solutions, Inc.

Carter H. Strickland, Jr., Esquire (Argued), Rutgers Environmental Law Clinic, Newark, NJ, for Amicus Curiae Appellant Raritan Baykeeper, Inc., Hackensack Riverkeeper, Inc. and Pinelands Preservation Alliance.

Harold L. Segall, Esquire, Beveridge & Diamond, P.C., Washington, DC, Stephen M. Richmond, Esquire, Marc J. Goldstein, Esquire, Beveridge & Diamond, P.C., Wellesley, MA, for Amicus Curiae Appellant National Solid Wastes Management Association.

Susan Shinkman, Esquire, Richard P. Mather, Sr., Esquire, Susan M. Seighman, Esquire, Commonwealth of Pennsylvania, Department of Environmental Protection, Harrisburg, PA, for Amici Curiae Appellant Commonwealth of Pennsylvania, Commonwealth of Massachusetts, State of New York, State of Maine, and State of Colorado.

Christine D. Petruzzell, Esquire, Wilentz, Goldman & Spitzer, Woodbridge, NJ, for Appellees OnTrack Loading Co., Cardella Trucking Co.

Before: AMBRO and HARDIMAN, Circuit Judges, SHAPIRO,^* District Judge.

OPINION OF THE COURT

AMBRO, Circuit Judge.

Shipping solid waste to Midwestern landfills has become big business—particularly in places like New Jersey where capacity at in-state landfills is scarce. Railroads are prime beneficiaries of the increased demand for the means of shipping waste across the country. Many railroads accommodate this demand by building facilities within their rights-of-way for the storage and loading of waste, which often is brought to the loading facility by truck. As one might imagine, transferring solid waste from truck to rail car is not the cleanest of businesses, and so the State of New Jersey has tried to regulate it. Railroading, however, is historically the subject of federal regulation, so any state regulation affecting it raises the question of preemption. Because we conclude that the District Court's factfinding does not support its conclusion that all of the State's environmental regulations at issue are preempted here, we remand for consideration of each regulation individually.

I. Facts and Procedural History

In business since the mid-19th century, the New York Susquehanna and Western Railway Corporation ("Susquehanna") operates 400 track-miles in New York, New Jersey, and Pennsylvania. This dispute centers on activities at five of its New Jersey solid waste transloading facilities.¹

Four of the facilities at issue dealt primarily or exclusively in solid waste generated at construction and demolition sites ("C & D waste"). Susquehanna built these facilities itself and either leased or owned the land. At each facility, Susquehanna sold most of its shipping capacity to a primary customer. These primary customers, known as "shippers," acted as middlemen between the generators of waste and the railroad. For a fee, they took title to C & D waste from the operators of the sites that generated it and hauled it by truck to Susquehanna's C & D transloading facilities. They then paid Susquehanna to load the waste onto rail cars and ship it to out-of-state landfills (which they paid to take final title to the waste). Because the shippers' value added was their ability to move waste efficiently from C & D sites to landfills, they used guaranteed-capacity contracts with Susquehanna to ensure that they could do so. Rather than operating the transloading facilities itself, Susquehanna hired a loading company to unload the trucks bringing in the waste, oversee its storage, and load it onto rail cars.

The fifth facility dealt only in contaminated soil, which was stored in sealed containers and emptied directly into sealed rail cars. The loading agent at that facility was a Susquehanna subsidiary, and the shipper had an exclusive contract with Susquehanna. Because the facility catered to only one customer, that customer controlled access to the facility.

At least initially, the transloading facilities were a mess.² Nearby residents complained that their houses and yards were covered in dust and grime, the noise was excessive, and the wastewater and storm-water runoffs were dirty. Of equal (if not more) concern to state officials was that the facilities posed, in the officials' judgment, potentially deadly fire hazards. The pollution and its perceived danger caused a public outcry, and New Jersey officials responded by promulgating a series of health, safety, and environmental rules that have come to be known as the "2D regulations". See N.J.A.C. § 7:26-2D.1.

For transloading facilities that deal only in containerized solid waste, the 2D regulations require that:

• the rail carrier provide the State with a narrative from an officer of the rail carrier describing the facility operations and certifying that containers will not be opened and that employees, the public or the environment will not be exposed to solid waste except as allowed in accordance with state law;

• nonputrescible [not decaying] solid waste not remain at the rail facility for more than 10 days, putrescible [decaying] solid waste for not more than 72 hours, and nonhazardous liquid waste in sealed containers not more than 180 days;

• solid waste received, stored or transferred at the rail facility be contained in sealed containers that do not leak any liquids or solid materials and are not opened for any purpose at the facility, except that a container holding liquid waste may be opened briefly for the purpose of sampling the liquid provided the container is immediately resealed;

• the operation not result in the migration of odors outside the confines of the rail carrier's property;

• all solid waste containers staged or stored at the facility be secured at all times in a manner that prevents unauthorized access to the containers and their contents;

• an adequate water supply and adequate fire-fighting equipment be maintained or be readily available to extinguish any and all types of fires;

• solid waste vehicles not be queued or staged on any public roadway;

• the queuing and staging of solid waste vehicles be conducted so as to prevent traffic backups and related traffic hazards on access roads servicing the facility;

• facilities and all appurtenances, other than those owned or operated by rail carriers, including vehicles while on-site, be positioned and buffered in such a manner that sound levels generated by the operation not exceed limits established pursuant to noise control rules;

• only solid waste vehicles properly registered and displaying the appropriate registration number and solid waste decal be admitted at the facility;

• the State's designated representatives and inspectors be admitted to inspect any building, or any other portion of the rail facility, at any time;

• any release or discharge of any solid waste that would harm human health and the environment at the facility be immediately reported by the facility operator or its designee to the State;

• an on-site emergency coordinator be designated who will be available during all hours of operation for the purpose of handling emergency situations, such as, but not limited to, spills, discharges or releases of solid wastes at the facility; and • the facility maintain daily records of waste and submit quarterly reports within 20 days of the end of each calendar quarter summarizing waste receipts.

See generally N.J.A.C. § 7:26-2D.1(c).³

For facilities that deal in waste that is not confined to sealed containers, the regulations provide that:

• all facility processing, tipping,⁴ sorting, loading, storage and compaction of materials (that is, solid waste and mixtures of solid waste and recyclable materials) occur within the confines of an enclosed building that complies with all requirements of the Uniform...