Peters v. Union Pacific R. Co.

Decision Date01 April 1996
Docket NumberNo. 95-1599,95-1599
Citation80 F.3d 257
PartiesStephen H. PETERS, Appellant, v. UNION PACIFIC RAILROAD COMPANY, Appellee.
CourtU.S. Court of Appeals — Eighth Circuit

Appeal from the United States District Court for the Eastern District of Missouri; Catherine D. Perry, Judge.

Jerome Schlichter, St. Louis, MO, argued (Steven L. Groves, on brief), for appellant.

Harry W. Wellford, Jr., St. Louis, MO, argued (Stephen D. Smith, on brief), for appellee.

Before MAGILL, FLOYD R. GIBSON, and HENLEY, Circuit Judges.

MAGILL, Circuit Judge.

Stephen H. Peters brought a conversion action in Missouri state court against Union Pacific Railroad for its refusal to return his locomotive engineer certificate. Union Pacific Railroad successfully motioned to remove the action to federal court and to dismiss.

Peters now appeals the district court's 1 denial of remand to state court and subsequent dismissal of his state conversion action. He argues that his motion for remand was proper because his conversion claim relied solely on Arkansas law and therefore fell outside the jurisdiction of the federal courts. He also argues that dismissal was improper because federal law did not preempt his state claim. Because the Federal Railroad Safety Act preempts Peters' claim and because Peters failed to exhaust administrative remedies, we affirm.


Union Pacific Railroad Company (Union Pacific) employed Stephen H. Peters as a locomotive engineer from 1991 until the end of 1992. As required by the Federal Railroad Safety Act (FRSA), Union Pacific issued Peters a locomotive engineer certificate which permitted him to operate a train locomotive on the general railway system. 45 U.S.C.S. § 431(i) (1992 & Supp.1995).

On November 30, 1992, Peters violated several locomotive operating regulations. Union Pacific determined, after a hearing, that Peters had operated a locomotive above the maximum allowed speed, failed to sound the whistle at railroad crossing grades, and missed a required inspection. As a result of these findings, Union Pacific sanctioned Peters on December 14, 1992. Consistent with Federal Railroad Administration regulations, Union Pacific suspended Peters' certificate for one month. It also discharged Peters from further employment based on company operating rules.

The Brotherhood of Locomotive Engineers challenged Peters' dismissal by filing an appeal under the collective bargaining agreement. After protracted discussions, the parties reached a settlement under which Peters "would be reinstated to service on a leniency basis without pay for time lost and this claim (under the collective bargaining agreement) withdrawn." Thus, approximately six months after dismissing Peters, Union Pacific allowed him to return to work and reissued his engineer certificate.

Peters filed suit against Union Pacific in Missouri state court on January 19, 1994, claiming that Union Pacific had converted his engineer certificate in violation of Arkansas law. Peters had requested the return of his certificate at the end of his one-month suspension period, but Union Pacific refused. Instead, Union Pacific waited until it reached a settlement with his union five months later. As a result, Peters claims he lost $45,000 in wages because Union Pacific denied him the opportunity to work as an engineer for another railroad.

Based on the federal question presented, namely whether Peters had a property right to an engineer certificate under the FRSA, Union Pacific removed the matter to federal court. Peters filed a motion to remand on the grounds that his action rested solely on the conversion of his personal property under state law. Any application of federal law, he argued, was collateral to his state tort claim. The court denied Peters' motion to remand.

Union Pacific then moved to dismiss, asserting that because the state law claim was preempted by the Federal Railroad Safety Act, 45 U.S.C.S. §§ 421-447 (1992 & Supp.1995), and the Railway Labor Act (RLA), 45 U.S.C.S. §§ 151-163 (1992 & Supp.1995), the court lacked subject matter jurisdiction over the state conversion claim.

The court agreed and dismissed Peters' claim under Federal Rule of Civil Procedure 12(b)(1), holding that it was preempted because it fell within the scope of the administrative remedies provided in FRSA and RLA. It noted that while Peters characterizes his claim as one of common law conversion of his engineer certificate, in reality he sought recertification, which is specifically addressed by FRSA regulations. Any right Peters had to possess the certificate derived wholly from federal law. Peters appeals the district court's denial of remand and dismissal for lack of subject matter jurisdiction.


The propriety of removal to federal court depends on whether the claim comes within the scope of the federal court's subject matter jurisdiction. See 28 U.S.C. § 1441(b). A claim may be removed only if it could have been brought in federal court originally. See id.; Merrell Dow Pharmaceuticals, Inc. v. Thompson, 478 U.S. 804, 808, 106 S.Ct. 3229, 3232, 92 L.Ed.2d 650 (1986). Because Peters cannot establish diversity jurisdiction, see 28 U.S.C. § 1332(a), removal is proper only if Peters' claim raises a federal question. See 28 U.S.C. § 1441. A federal question is raised in "those cases in which a well-pleaded complaint establishes either that federal law creates the cause of action or that the plaintiff's right to relief necessarily depends on resolution of a substantial question of federal law." Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 27-28, 103 S.Ct. 2841, 2856, 77 L.Ed.2d 420 (1983).

A plaintiff's characterization of a claim as based solely on state law is not dispositive of whether federal question jurisdiction exists. In certain instances, the preemptive force of a federal statute is so complete that it transforms complaints styled as ordinary common-law claims into ones stating a federal claim. Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 65, 107 S.Ct. 1542, 1547, 95 L.Ed.2d 55 (1987). Once an area of state law has been completely preempted, any claim based on that preempted state law claim is considered, from its inception, to raise a federal claim and therefore arises under federal law. Humphrey v. Sequentia, Inc., 58 F.3d 1238, 1242 (8th Cir.1995) (citing Caterpillar Inc. v. Williams, 482 U.S. 386, 393, 107 S.Ct. 2425, 2430, 96 L.Ed.2d 318 (1987)); see also Deford v. Soo Line R.R., 867 F.2d 1080, 1084 (8th Cir.) (complete preemption "prohibits a plaintiff from defeating removal by failing to plead necessary federal questions in a complaint") cert. denied, 492 U.S. 927, 109 S.Ct. 3265, 106 L.Ed.2d 610 (1989).

We examine the text and structure of a statute to determine if it is the "clear and manifest purpose of Congress" to preempt an area of state law. CSX Transp. v. Easterwood, 507 U.S. 658, 662-64, 113 S.Ct. 1732, 1737, 123 L.Ed.2d 387 (1993); see also Cipollone v. Liggett Group, Inc., 505 U.S. 504, 516-17, 112 S.Ct. 2608, 2617-18, 120 L.Ed.2d 407 (1992) (explaining that the purpose of Congress is the ultimate consideration when determining whether federal preemption exists). If the statute contains an express preemption clause, then the statutory construction should center on its plain meaning as the best evidence of Congress's preemptive intent. This appeal requires us to define the preemptive scope of the FRSA and determine whether Peters' claim comes within it.


Congress created the FRSA to ensure that railroad safety would be "nationally uniform to the extent practicable." 45 U.S.C.S. § 434 (1992 & Supp.1995). The FRSA specifically provides for the establishment of a program requiring licensing for any operator of a locomotive. 45 U.S.C.S. § 431(i). To that end, the Department of Transportation promulgated comprehensive regulations to ensure that only qualified individuals operate trains. 49 C.F.R. §§ 240.1-240.411 (1993). These regulations include provisions for engineer certification, denial of certification, and replacement of lost, stolen or mutilated certificates.

The FRSA contains an express preemption clause:

[L]aws, rules, 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.

45 U.S.C.S. § 434 (1992 & Supp.1995) (emphasis added); see also Burlington Northern R.R. v. State of Minn., 882 F.2d 1349, 1352 (8th Cir.1989) ("Section 434 on its face provides for broad preemption, permitting state regulation of railroad safety in only two circumstances: (1) if the FRA has not acted to '[cover] the subject matter' of the state law, or (2) where the FRA has so acted, if the state law is necessary to eliminate an essentially local safety concern and satisfies the other specified conditions."). 2

Pursuant to § 434, the Secretary of Transportation issued preemptive regulations concerning engineer certification. See 49 C.F.R. §§ 240.1-240.411 (1993). Included in these regulations is a specific, detailed scheme setting out dispute resolution procedures. See 49 C.F.R. §§ 240.401-240.411 (1993). The regulations establish a review board to consider petitions challenging a railroad's denial of certification or recertification, or revocation of certification. 49 C.F.R. § 240.401(a). Any person denied certification can petition the Locomotive Engineer Review Board (Board) to determine whether the denial was improper. 49 C.F.R. § 240.401(a) (1993). Any party adversely affected by the Board's decision has a right of appeal. 49 C.F.R. § 240.411 (1993). This "comprehensive remedial scheme ... serves to confirm [the FRSA's] preemptive scope." Rayner, 873 F.2d at 65.


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