Pci Transp., Inc. v. Fort Worth & Western R. Co., 04-10965.

Citation418 F.3d 535
Decision Date26 July 2005
Docket NumberNo. 04-10965.,04-10965.
PartiesPCI TRANSPORTATION, INC., Plaintiff-Appellant, v. FORT WORTH & WESTERN RAILROAD COMPANY, Defendant-Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)

Hugh Allen Pennington, Jr. (argued), Pennington, Hill & Baker, Fort Worth, TX, for Plaintiff-Appellant.

Richard C. DeBerry (argued), Russell Alan Devenport, Michael Chad Parsons, McDonald Sanders, Fort Worth, TX, for Defendant-Appellee.

Appeal from the United States District Court for the Northern District of Texas.

Before HIGGINBOTHAM, WIENER and CLEMENT, Circuit Judges.

WIENER, Circuit Judge:

Appellant PCI Transportation, Inc. ("PCI") appeals the district court's orders denying (1) remand, and (2) a preliminary injunction. We affirm.

I. FACTS AND PROCEEDINGS

PCI receives and distributes rail cargo in Fort Worth, Texas, via a distribution warehouse serviced by a spur that comes off of railroad lines of the Union Pacific Railroad ("Union Pacific") and the Burlington Santa Fe Railroad ("BNSF"). Appellee Fort Worth & Western Railroad Co. ("FWWR") is a short-line railroad that operates passenger and freight trains within Texas. FWWR operates a switching yard that, via PCI's spur, links its warehouse to the Union Pacific and BNSF railroads. Under various agreements, Union Pacific and BNSF deliver railcars to FWWR's switching yard, after which FWWR switches and delivers these cars to customers of Union Pacific and BNSF, such as PCI, for unloading. After the railcars are unloaded, FWWR returns the empty cars to the main railroads' lines. BNSF and Union Pacific compensate FWWR for its switching services, but the railroads also charge FWWR for the time that it retains the railcars at its switching yard. In turn, FWWR collects demurrage1 fees from end-use customers such as PCI.

In August 2001, after a dispute had arisen concerning demurrage charges imposed on PCI by FWWR, these parties entered into a contract (the "contract") aimed at avoiding further conflict, a goal that the contract has obviously failed to attain. The entire contract is a one page letter, and is self-styled with two different names — "Confidential Demurrage Contractual Agreement" and "Confidential Contractual Agreement for Free Time." The language of the contract provides that (1) PCI will have four demurrage-free days, and (2) FWWR is committed to providing PCI with a minimum of one "switch" daily, seven days per week. The contract also establishes the demurrage rate applicable after free time expires. (The contract was never placed in evidence before the district court, but following oral argument on appeal, it was submitted to us under seal.) PCI alleges that, since the execution of the contract and in conformity with common industry practice, FWWR has delivered cars to PCI on a first-in, first-out ("FIFO") basis.

In February 2004, more than two years after execution of the contract, a new dispute arose between PCI and FWWR concerning demurrage charges for the month of June 2003. PCI contends that FWWR had engaged in several practices that resulted in improper demurrage fees being charged to PCI, to wit: (1) FWWR varied from its practice of delivering cars to PCI on a FIFO basis, with the result that FWWR held cars intended for PCI's customers for longer than four days; (2) at times, FWWR had delivered rail cars on PCI's spur backwards, making it impossible for PCI to unload those cars and requiring FWWR to move the cars out, reverse them, then bring them back in again with the next group of cars; (3) FWWR provided PCI with a delivery schedule the effect of which virtually guaranteed that some of the cars would be held in the FWWR yard for more than four days, thereby unnecessarily incurring demurrage costs.

PCI filed suit in state court alleging that FWWR had breached the contract. PCI also claimed intentional interference with contractual relations and requested a TRO, a "temporary injunction," and a permanent injunction restraining FWWR for a period of ten years from (1) "providing purported notice of cancellation of any agreements between PCI and FWWR"; (2) "refusing to deliver less than ten (10) PCI-bound railroad cars with cargo per day to PCI on its spur, to the extent such cars are available"; (3) "delivering cars to PCI's spur on any basis other than on the basis of delivery of those PCI-bound cars which have been in FWWR's possession the most number of days"; and (4) "imposing or attempting to impose any demurrage charges upon PCI, or in the alternative, imposing or attempting to impose any demurrage charges upon PCI when timely delivery of PCI's cars on a first-in, first-out basis would have resulted in no demurrage charges, and in those situations where no demurrage charges would accrue but for FWWR's service failures". The state court granted PCI's request for a TRO.

FWWR then removed the case to federal court, asserting that PCI's state law claims were completely preempted by the Interstate Commerce Commission Termination Act of 1995 ("ICCTA").2 The ICCTA overhauled the Interstate Commerce Act ("ICA"), including the elimination of the Interstate Commerce Commission and replacing it with the Surface Transportation Board ("STB"). PCI filed a motion for remand, arguing that the suit was outside the ambit of the ICCTA. The district court denied PCI's motion, concluding that removal was proper under the doctrine of complete preemption.

PCI filed a request for a temporary injunction and hearing in the district court, seeking essentially the same relief that it had sought in state court. This was PCI's second motion for injunctive relief. Its first motion was denied for procedural reasons. The district court denied PCI's motion without a hearing, holding that, as a result of PCI's failure to proffer into evidence the contract on which it based its claims for relief, it had not demonstrated, prima facie, that the district court, as distinguished from the STB, had jurisdiction to entertain PCI's requested injunctive relief. The district court also held that PCI failed to demonstrate that it would suffer irreparable injury absent an injunction. PCI appeals the district court's denial of its remand motion, denial of its motion for a preliminary injunction, and refusal to hold a hearing on the motion for a preliminary injunction.

II. ANALYSIS
A. Appeal of the Remand Order

An order denying a motion to remand is not appealable as a final decision within the meaning of 28 U.S.C. § 1291; standing alone, such a ruling cannot be appealed unless certified by the district court under 28 U.S.C. § 1292(b).3 PCI nevertheless contends that we have jurisdiction to consider its appeal of the remand order, citing the Ninth Circuit's decision in O'Halloran v. University of Washington.4 The court in O'Halloran held that an appeal from an order denying a motion to remand is reviewable prior to final judgment when joined with an interlocutory appeal from an order granting or denying an injunction.5

Several other circuits have held the same, either expressly or implicitly.6 We have not previously addressed the question whether the denial of a remand order becomes reviewable when it is coupled with an interlocutory appeal of an injunction order under 28 U.S.C. § 1292(a)(1). We did conclude in Texas v. Real Parties in Interest, however, that the denial of a remand order can be reviewed in conjunction with the interlocutory appeal of an order denying a claim of Eleventh Amendment immunity, the latter order being appealable under the collateral order doctrine.7 In deciding that we could consider the order denying remand, we looked solely to whether the Eleventh Amendment immunity issue was non-frivolous and properly before us on appeal.8 Implicit in that decision is the conclusion that, once appellate jurisdiction has been established, we are compelled to address questions of federal jurisdiction.

In the context of the collateral order doctrine, we perceive no difference in the distinction between Eleventh Amendment immunity and remand. We thus conclude that PCI's appeal of the denial of its motion for a preliminary injunction is both non-frivolous and properly before us. Consonant with our holding in Real Parties in Interest, we first consider the jurisdictional question whether the district court erred in denying PCI's motion to remand the case to state court.

B. Removal and Remand

The district court denied PCI's motion to remand the case, relying primarily on (1) the Northern District of Iowa's reasoning in Cedarapids, Inc. v. Chicago, Central & Pacific Railroad Co.9 and (2) § 10501 of the ICCTA. Section 10501 provides:

(b) 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.10

PCI contends that removal was improper because the relief that PCI requests is expressly excluded from the reach of the ICCTA by § 10709 of that act. "We exercise plenary, de novo review of a district court's assumption of subject matter jurisdiction."11

1. PCI's § 10709 Argument

FWWR establishes rates for its transportation services, as well as rules and practices related to those services, including specifically the rules relating to the imposition of demurrage fees.12 The injunctive relief PCI seeks would regulate the operation of FWWR's switching yard and would...

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