Southern Pacific Transp. Co. v. Public Service Com'n of Nevada

• Citation: 909 F.2d 352
• Decision Date: 18 July 1990
• Docket Number: No. 88-15541,88-15541
• Parties: SOUTHERN PACIFIC TRANSPORTATION CO., a corporation; Thomas M. Tompkins, Plaintiffs-Appellants, v. PUBLIC SERVICE COMMISSION OF NEVADA; Scott M. Craigie, Fred Schmidt, Thomas E. Stephens, Jo An Kelly, Stephen Wiel, as Commissioners of Public Service Commission of Nevada; Thomas P. Wright, District Attorney of Storey County; William Rogers, District Attorney of Lyon County, Nevada, Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 352

909 F.2d 352

SOUTHERN PACIFIC TRANSPORTATION CO., a corporation; Thomas M. Tompkins, Plaintiffs-Appellants, v. PUBLIC SERVICE COMMISSION OF NEVADA; Scott M. Craigie, Fred Schmidt, Thomas E. Stephens, Jo An Kelly, Stephen Wiel, as Commissioners of Public Service Commission of Nevada Thomas P. Wright, District Attorney of Storey County William Rogers, District Attorney of Lyon County, Nevada Defendants-Appellees.

No. 88-15541.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Dec. 11, 1989.

Decided July 18, 1990.

John MacDonald Smith, San Francisco, Cal., for plaintiffs-appellants.

Neil E. Grad and William H. Kockenmeister, Carson City, Nev., for defendants-appellees.

Appeal from the United States District Court for the District of Nevada.

Before POOLE, REINHARDT and BEEZER, Circuit Judges.

BEEZER, Circuit Judge:

Appellants, Southern Pacific Transportation Company ("SPTC"), and Thomas M. Tompkins appeal the district court's order granting summary judgment for Public Service Commission of Nevada ("PSC"). Appellants argue that PSC regulations requiring rail carriers to obtain an annual permit prior to loading, unloading, transferring or storing hazardous material on railroad property within the state are preempted by the Hazardous Materials Transportation Act and the Federal Railroad Safety Act. They also argue that the district court failed to give sufficient deference to an inconsistency ruling by the United States Department of Transportation ("DOT") and that the PSC regulations violate the Commerce Clause. We reverse.

I

Congress enacted the Hazardous Materials Transportation Act, 49 U.S.C. App. Sec. 1801, et seq. ("HMTA"), in 1975 to replace a patchwork of state and federal laws and regulations concerning hazardous materials transport with a scheme of uniform, national regulations. Jersey Cent. Power & Light Co. v. Lacey, 772 F.2d 1103, 1112 (3d Cir.1985), cert. denied, 475 U.S. 1013, 106 S.Ct. 1190, 89 L.Ed.2d 305 (1986); S.Rep. No. 1192, 93rd Cong., 2d Sess. 1 (1974), U.S.Code Cong. & Admin.News 1974, 7669. The HMTA commences with a congressional declaration of policy:

It is declared to be the policy of Congress in this chapter to improve the regulatory and enforcement authority of the Secretary of Transportation to protect the Nation adequately against the risks to life and property which are inherent in the transportation of hazardous materials in commerce.

49 U.S.C.App. Sec. 1801. Pursuant to its delegated authority, the DOT has enacted a series of comprehensive regulations governing the transportation of hazardous materials, including explosives, by rail and highway. 49 C.F.R. pts. 171-179 ("HMR").

In January, 1986, the PSC adopted a series of regulations, Nevada Administrative Code Secs. 705.310 to 705.380, to ensure that loading, unloading, transfer or temporary storage of hazardous materials on a railroad's property be accomplished in as safe a manner as practical. Nev. Rev. Stat. Sec. 223.064 Statement, P.S.C. Gen. Sess. Jan. 27, 1986. "The Commission's goal in adopting [these regulations] was to establish a procedure for consistent statewide evaluation of potential on-and-off loading and temporary storage sites for the materials listed in the regulation." Id.

The Nevada regulations require a carrier to obtain an annual permit prior to loading, unloading, transferring or storing certain hazardous materials on railroad property. Applicants are required to submit:

(a) A map of the proposed site for loading, unloading, storage or transfer, including the indicators of its location on the track and all structures at the site;

(b) A report identifying each switch, siding, spur or branch of track at the site and its purpose;

(c) A copy of any report made by a federal or state inspector during the preceding 6 months on defects in the track and the remedial action taken;

(d) A summary of all major construction or other work on the track at the site during the preceding year;

(e) A summary of all hazardous material carried by the railroad during the preceding 12 months;

(f) A summary of all unintended releases of hazardous material during the preceding 12 months which were reported by the applicant pursuant to 49 C.F.R. Secs. 171.15 and 171.16;

(g) An outline of the procedure to be used in the loading, unloading, transfer or storage of the hazardous material;

(h) A description of the measures to be used by the railroad to ensure that the hazardous material is safe from vandalism, theft or sabotage; and

(i) An outline of all plans to be used in the event of an accident.

Nev. Admin. Code Sec. 705.330. The application also requires a $200 fee. Id.

In evaluating an application, PSC considers:

1. The topography of the proposed site;

2. The proximity of the proposed site to:

(a) Centers of population;

(b) Heavily traveled highways;

(c) Hospitals;

(d) Schools;

(e) Sources of water; and

(f) Other sites for the storage of hazardous materials;

3. The expected duration of the operation at the site;

4. The availability of alternative sites;

5. The quality of the track;

6. The security at the site;

7. The plans to be used in the event of an accident at the site;

8. The equipment and resources available in the event of an accident at the site; and

9. Any other pertinent information requested by the Commission.

Nev. Admin. Code Sec. 705.340. PSC is required to give notice of any application for a permit or renewal at least 30 days before the date on which it intends to take action. Nev. Admin. Code Sec. 705.370.

Upon a showing of "compelling need," PSC may issue a temporary permit which is valid while the application for an annual permit is pending. Nev. Admin. Code Sec. 705.350.1. However, this provision is of concern primarily to carriers seeking their initial permit. Others seeking to renew their permits can ensure that they do not expire prior to a determination on their applications by submitting a complete application for renewal at least 60 days before the expiration of their permits. Nev. Admin. Code Sec. 705.350.4.

A permit may be suspended or revoked if a carrier violates the terms of the permit, if suspension or revocation is necessary to protect against risks to life or property, or if the permit was issued on the basis of false, fraudulent or misleading representations or information. Nev. Admin. Code Sec. 705.360.

On September 15, 1986, PSC instituted criminal proceedings in the Storey County Justice Court against Thomas Tompkins, SPTC's supervisor of rail operations, for storing class A explosives at SPTC's Hafed, Nevada siding without a permit. Additional proceedings were later instituted with regard to SPTC's storage of explosives at its Wabuska siding.

On October 21, 1986, following the procedures set forth in 49 C.F.R. Sec. 107.203, SPTC applied for an administrative ruling on the question of whether the Nevada regulations were preempted by the HMTA. On June 23, 1987, the Director of the Office of Hazardous Materials Transportation issued Inconsistency Ruling IR-19, finding Nev. Admin. Code Secs. 705.310 through 705.370 to be inconsistent with the HMTA and, therefore, preempted. PSC filed an appeal of IR-19 with the Administrator of the Research and Special Programs Administration, pursuant to 49 C.F.R. Sec. 107.211. On April 1, 1988, the Administrator issued a decision affirming the inconsistency ruling.

On September 19, 1986, plaintiffs SPTC and Thomas M. Tompkins (collectively "SPTC") filed suit against defendants PSC, its individual commissioners, and the district attorneys of Storey County and Lyon County, Nevada (collectively "PSC"), seeking declaratory judgment and injunctive relief against the Nevada regulations. The parties filed cross motions for summary judgment. On September 28, 1988, summary judgment was entered in favor of PSC and against SPTC. Timely notice of appeal was filed by SPTC on October 24, 1988.

II

We review a grant of summary judgment de novo. Kruso v. Int'l Tel. & Tel. Corp., 872 F.2d 1416, 1421 (9th Cir.1989). We must determine, viewing the evidence in the light most favorable to the nonmoving party, whether there are any genuine issues of material fact and whether the district court correctly applied the relevant substantive law. Tzung v. State Farm Fire & Casualty Co., 873 F.2d 1338, 1339-40 (9th Cir.1989).

III

The HMTA expressly preempts state or local regulations inconsistent with federal law:

(a) Except as provided in subsection (b) of this section, any requirement, of a State or political subdivision thereof, which is inconsistent with any requirement set forth in this chapter, or in a regulation issued under this chapter, is preempted.

49 U.S.C.App. Sec. 1811(a). Such regulations are "inconsistent" when (1) compliance with both the state or local regulation and the HMTA or DOT regulation is impossible, or (2) the state or local regulation is an obstacle to the accomplishment and execution of the HMTA or DOT regulation. 49 C.F.R. Sec. 107.209.

In this case, the district court held that the Nevada regulations were not inconsistent with the HMTA and HMR. However, SPTC argues that the district court erred by failing to accord sufficient deference to the inconsistency ruling issued by the DOT. We agree.

The DOT found that its regulations and the Nevada regulations address many of the same matters. For instance, it found that several of its own regulations already address storage incidental to the transportation of hazardous materials, the primary focus of the Nevada regulations. Additionally, the Nevada regulations address other matters related to the transportation of hazardous materials. Because the Nevada regulations address matters already covered by the federal regulations, impose substantial burdens on applicants, and create the risk of confusion, conflicts, and delays, the DOT determined that they were inconsistent with the federal regulations. See DOT Research and Special Programs Administration,...