Southern Pacific Transp. Co. v. United States

• Citation: 462 F. Supp. 1193
• Decision Date: 28 November 1978
• Docket Number: Civ. No. R-77-0180.
• Court: U.S. District Court — Eastern District of California
• Parties: SOUTHERN PACIFIC TRANSPORTATION CO., Plaintiff, v. UNITED STATES of America, Defendant.

462 F. Supp. 1193

SOUTHERN PACIFIC TRANSPORTATION CO., Plaintiff, v. UNITED STATES of America, Defendant.

Civ. No. R-77-0180.

United States District Court, E. D. California.

November 28, 1978.

COPYRIGHT MATERIAL OMITTED

James V. Diepenbrock, Jack V. Lovell, Jr., Carol A. Huddleston, Charity Kenyon, Diepenbrock, Wulff, Plant & Hannegan, Sacramento, Cal., for plaintiff.

Herman Sillas, U. S. Atty., Robert Browning Miller, James S. Joiner, Asst. U. S. Attys., Sacramento, Cal., for defendant.

OPINION

MacBRIDE, Chief Judge.

The question presently before this court is whether federal or state law provides the rule of decision governing the application of contributory or comparative negligence standards to this action under the Federal Tort Claims Act, 28 U.S.C. §§ 1346(b), 2671 et seq. The factual background in which the question arises can be stated briefly. On April 28, 1973, 18 DODX boxcars owned by the United States and laden with bombs being transported from Nevada to Port Chicago, California, by Southern Pacific Transportation Company (Southern Pacific) under contract with the Department of the Navy, exploded in the Antelope trainyard of Southern Pacific near Roseville, California. The explosions caused major damage to the trainyard and the surrounding area. As a result, Southern Pacific instituted this action under the Federal Tort Claims Act (FTCA) to recover, inter alia, for damage to the trainyard, railcars and lading in the railcars, loss of freight revenues, loss of use of Southern Pacific property and capital, and sums paid in settlement of third-party claims. All third-party suits arising from the explosions have been settled, so that the only claims remaining are the primary action by Southern Pacific for its damages and the counterclaim by the United States for loss of the boxcars and bombs.

The FTCA provides a statutory choice of law rule governing this action. Section 1346(b) provides:

the district courts . . . shall have exclusive jurisdiction of civil actions on claims against the United States, for money damages, . . . for injury or loss of property, or personal injury or death caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment, under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred.

28 U.S.C. § 1346(b). As the Supreme Court held in Richards v. United States, 369 U.S. 1, 82 S.Ct. 585, 7 L.Ed.2d 492 (1962), this section requires application of the whole law, including the choice of law rules, of the place where the act or omission occurred. In the usual case, the negligent act or omission and the resulting injury occur in a single state, and there is generally no dispute as to the applicable law. In this instance, however, negligent acts and omissions are alleged to have occurred in Nevada and California, and, to a significantly lesser extent, in other states, so that the selection of the state whose whole law is to apply is far more complicated. Superimposed on the selection of the applicable state law is the question whether federal law preempts some or all of the issues presented.

Section 2674 of the FTCA provides in part that the United States is to be liable "in the same manner and to the same extent as a private individual under like circumstances." If federal law were deemed to preempt state law in the context of a suit between private parties arising from an explosion in a railcar, then the argument is that federal law should also preempt otherwise applicable state law in this instance in order that the directive of the Act, that the United States be liable in the same manner and to the same extent as a private person in like circumstances, may be fulfilled.

Southern Pacific contends that federal law preempts state law in this instance because, it states:

Numerous aspects of the Roseville interstate shipment were governed by federal interstate commerce statutes and regulations. The Interstate Commerce Act regulates, inter alia, the common carrier's duty to furnish transportation and establish through routes (49 U.S.C. § 1(4)), the carrier's duty to establish just and reasonable rates (49 U.S.C. § 1(5)), the carrier's duty to make reasonable classifications of property for transportation with reference to which rates and tariffs may be prescribed (49 U.S.C. § 1(6)), the carrier's duty to furnish car service (49 U.S.C. § 1(11)), its duty to establish rules and regulations for car service (49 U.S.C. § 1(13), (14)), and the carrier's duty to refrain from discrimination in rates, interchange, and facilities (49 U.S.C. § 3). The Act prescribes the consequences of a carrier's violating regulations (49 U.S.C. § 10) and provides that the Commission is empowered to determine the lawfulness of carrier's rates and, on its own initiative, establish reasonable through routes and joint practices (49 U.S.C. § 15). The Act imposes liability on carriers for loss of freight and also prescribes limitations of liability (49 U.S.C. §§ 20(11), 101). The Act extensively regulates the form, content, terms, and conditions of bills of lading (49 U.S.C. §§ 81-124) . . .. Finally, the Act regulates safety appliances (49 U.S.C. § 26) and regulates the transportation of hazardous material (49 U.S.C. §§ 1801-1812). The regulations of the Interstate Commerce Commission and its offices regulate innumerable details of an interstate explosives shipment. The hazardous materials regulations (49 CFR §§ 102, 107, 170 et seq.) govern rulemaking procedures and petitions for . . . rulemaking, compliance orders and penalties, labeling, packaging, placarding, preparation of explosives for shipment, handling, loading, and inspection requirements.

Southern Pacific's brief, filed September 18, 1978, at 7-8. Certain of the statutes and regulations described, along with other federal laws and regulations, undeniably governed significant aspects of the relationship between Southern Pacific as common carrier and the United States as shipper.¹ Southern Pacific contends that, since the rights and duties of the parties had a federal source, federal law must govern all phases of this litigation. The theory, briefly stated, is that the pervasive federal regulatory program governing interstate shipments preempts state law that might otherwise apply and that, therefore, federal law provides the rule of decision applicable to this case. In the absence of specific federal legislation governing an aspect of the case, Southern Pacific contends that this court must adopt a rule of federal common law. In adopting a federal rule, the court may either incorporate state law as the operative federal rule or it may adopt a uniform federal rule; in either instance, the rule would be a federal one.

Although Southern Pacific takes the general position that federal law must govern all phases of this litigation because of preemption, the briefing presented to the court is directed primarily to the single specific local rule which Southern Pacific particularly asks this court to find preempted, namely, the Nevada contributory negligence doctrine. While this court will examine the preemption arguments of the parties in the context of the entire case, the court is specifically concerned with the contributory negligence/comparative negligence issue. This decision is final only with respect to that issue. It may be that the conclusions should differ as to other issues not raised and briefed; this decision does not foreclose that possibility.

The approach taken by Southern Pacific employs the following major premises. First, the rights and duties of the parties have a federal source and are substantially related to a federal regulatory program. Second, given this federal source, the Supremacy Clause² and the doctrine of federal preemption require that this court apply a federal rule of decision. Next, the federal rule of decision should displace state law with a uniform federal common law rule if the state law conflicts with or frustrates federal policy. Fourth, under this guideline, Nevada's contributory negligence rule conflicts with and defeats the purposes of the federal regulatory program governing interstate shipments by rail. Fifth, the FTCA requires that the liability of the United States be determined according to federal law if a private individual's liability would be so determined. Because of the conflict between Nevada's rule and federal policy, which Southern Pacific contends is to be derived from federal railroad regulatory statutes, a private individual's liability would be determined according to federal law. Finally, Southern Pacific urges that the appropriate federal common law in this instance would be a rule of comparative negligence, the rule that prevails in California.

The United States responds to these premises with the following arguments. First, the degree of federal interest necessary to trigger federal preemption does not exist in this instance. In support, it is urged that certain of the provisions of federal law cited by Southern Pacific as creating a federal regulatory scheme governing interstate rail shipments are (1) irrelevant to the issues before this court, (2) inapposite because they had not been enacted as of the date of the explosions, or (3) expressly intended not to preempt state law. Second, assuming arguendo that federal common law does govern the question of liability here because of preemption, the federal rule to be applied would be a rule of contributory negligence, and Nevada's rule is consistent with the federal scheme of regulation. Finally, the FTCA precludes the application of the federal preemption doctrine to impose a federal common law rule to this case.

Consideration of these arguments is complicated because, to a large extent, the arguments present a seamless web, each dependent...