State v. Norfolk S. Ry. Co.

• Decision Date: 24 September 2018
• Docket Number: Supreme Court Case No. 18S-IF-193
• Citation: 107 N.E.3d 468
• Parties: STATE of Indiana, Appellant (Plaintiff) v. NORFOLK SOUTHERN RAILWAY COMPANY, Appellee (Defendant)
• Court: Indiana Supreme Court

107 N.E.3d 468

STATE of Indiana, Appellant (Plaintiff)

v.NORFOLK SOUTHERN RAILWAY COMPANY, Appellee (Defendant)

Supreme Court Case No. 18S-IF-193

Supreme Court of Indiana.

Argued: May 17, 2018

FILED September 24, 2018

ATTORNEYS FOR APPELLANT: Curtis T. Hill, Jr., Attorney General of Indiana, Thomas M. Fisher, Solicitor General, Andrew A. Kobe, Larry D. Allen, Deputy Attorneys General, Indianapolis, Indiana

ATTORNEYS FOR APPELLEE: Raymond A. Atkins, Hanna M. Chouest, Sidley Austin LLP, Washington, DC, Bryan H. Babb, Bradley M. Dick, Bose McKinney & Evans LLP, Indianapolis, Indiana, John C. Duffey, Heather L. Emenhiser, Stuart & Branigin LLP, Lafayette, Indiana

ATTORNEYS FOR AMICUS CURIAE THE ASSOCIATION OF AMERICAN RAILROADS: Harold Abrahamson, Jonathan E. Halm, Abrahamson, Reed & Bilse, Munster, Indiana

ATTORNEYS FOR AMICI CURIAE FRANCIS P. MULVEY AND CHARLES D. NOTTINGHAM : Stephen J. Peters, David I. Rubin, Plunkett Cooney, P.C., Indianapolis, Indiana

ATTORNEYS FOR AMICI CURIAE INDIANA RAILROAD COMPANY ET AL.: Karl L. Mulvaney, Margaret M. Christensen, Nana Quay-Smith, Bingham Greenebaum Doll LLP, Indianapolis, Indiana

On Petition to Transfer from the Indiana Court of Appeals, No. 02A03-1607-IF-1524

Rush, Chief Justice.

Indiana—The Crossroads of America¹ —is a railroad capital. Statewide, dozens of railroad companies run trains on more than four thousand miles of track. Roads intersect those tracks, creating 5,693 public railroad–highway grade crossings. That's one for every seventeen public-roadway miles—the highest concentration in the country.²

To aid public travel, the State bars railroads from blocking those crossings for more than ten minutes, except in situations outside the railroads' control. Violations carry minimum $200 fines. After 23 citations, Norfolk Southern challenged the State's regulation as preempted by federal law.

This issue of first impression in Indiana raises two questions. Does the standard presumption against preemption apply in the railroad-crossing context? And to what extent has Congress kept the tracks clear from state regulation of rail transportation?

We hold that while the longstanding presumption against preemption applies here, Indiana's blocked-crossing statute is a remedy that directly regulates rail transportation and is thus expressly preempted by the Interstate Commerce Commission Termination Act.

Facts and Procedural History

Indiana's blocked-crossing statute bars railroads from blocking railroad–highway grade crossings³ for more than ten minutes, except in circumstances outside the railroads' control. Ind. Code § 8-6-7.5-1 (2018). Violations are Class C infractions and carry a minimum $200 fine. I.C. § 8-6-7.5-3(a).

Between December 2014 and December 2015, Norfolk Southern collected 23 blocked-crossing citations for violations near its Allen County trainyard. Norfolk Southern moved for summary judgment on the citations, arguing that the Interstate Commerce Commission Termination Act ("ICCTA") and the Federal Railroad Safety Act ("FRSA") expressly preempt Indiana's blocked-crossing statute. It also designated evidence—undisputed by the State—that it faced a heavy compliance burden at grade crossings near the trainyard.

Based on that evidence, the trial court found that train-switching maneuvers, track congestion, and mechanical defects can all cause traffic blockages lasting more than ten minutes. It also found that, to shorten blockages, Norfolk Southern would have to run trains faster, run shorter trains, or "cut" trains into segments—an onerous process that requires more than ten minutes of reassembly and brake tests. The court then granted summary judgment for Norfolk Southern on all 23 citations, finding that both the ICCTA and the FRSA preempt the blocked-crossing statute.

The State appealed, arguing that neither federal act preempts Indiana's blocked-crossing statute, especially given the presumption against preemption. The Court of Appeals agreed, reversing the trial court because neither the ICCTA nor the FRSA explicitly list blocked-crossing statutes as preempted. State v. Norfolk S. Ry. , 84 N.E.3d 1230, 1236, 1238 (Ind. Ct. App. 2017).

Norfolk Southern petitioned to transfer, which we granted, vacating the Court of Appeals opinion. Ind. Appellate Rule 58(A).

Standard of Review

Preemption here turns on whether federal law expressly preempts Indiana's blocked-crossing statute. See Kennedy Tank & Mfg. Co. v. Emmert Indus. Corp. , 67 N.E.3d 1025, 1028 (Ind. 2017). We review that issue of law, and the trial court's grant of summary judgment, de novo. Id. ; Young v. Hood's Gardens, Inc. , 24 N.E.3d 421, 423 (Ind. 2015).

Discussion and Decision

Congress can preempt state law expressly, with explicit preemptive text, or impliedly, "under the twin doctrines of field and conflict preemption." KS & E Sports v. Runnels , 72 N.E.3d 892, 905 (Ind. 2017) ; see also Kennedy Tank , 67 N.E.3d at 1028. Field preemption exists when Congress imposes "exclusive federal regulation of the area." Kennedy Tank , 67 N.E.3d at 1028 (quoting Basileh v. Alghusain , 912 N.E.2d 814, 818 (Ind. 2009) ). And conflict preemption exists when compliance with both state and federal laws is "physically impossible" or when a state law does "major damage" to Congress's purpose. Id. at 1029.

Norfolk Southern argues only that Indiana's blocked-crossing statute is expressly preempted. The statute's current version says:

It shall be unlawful for a railroad corporation to permit any train, railroad car or engine to obstruct public travel at a railroad–highway grade crossing for a period in excess of ten (10) minutes, except where such train, railroad car or engine cannot be moved by reason of circumstances over which the railroad corporation has no control.

I.C. § 8-6-7.5-1. State statutes like this one are ordinarily covered by a presumption against preemption, see Kennedy Tank , 67 N.E.3d at 1028, but Norfolk Southern argues that the presumption does not apply here.

We disagree with Norfolk Southern and find at the outset that the presumption applies, given the State's legitimate interest in protecting the public use of grade crossings. With that presumption on board, we then address the ICCTA's express preemption provision. We conclude that because Indiana's blocked-crossing statute provides a remedy that regulates rail transportation, the ICCTA expressly preempts it.

I. Federalism dictates that the presumption against preemption applies to the blocked-crossing statute.

As a concept "central to the constitutional design," federalism requires that we not find preemption easily. Kennedy Tank , 67 N.E.3d at 1028 (quoting Arizona v. United States , 567 U.S. 387, 398, 132 S.Ct. 2492, 183 L.Ed.2d 351 (2012) ). So we carefully consider Norfolk Southern's challenge to the long-settled presumption against preemption, see id. , examining the federal and state interests in railroad-crossing regulation.

Since the presumption is animated by federalism, it "is not triggered when the State regulates in an area where there has been a history of significant federal presence." United States v. Locke , 529 U.S. 89, 108, 120 S.Ct. 1135, 146 L.Ed.2d 69 (2000). This presumption exception is strict, applying when "Congress has legislated in the field from the earliest days of the Republic, creating an extensive federal statutory and regulatory scheme." Id. (finding the presumption inapplicable in the maritime trade context).

So does the presumption against preemption apply in this railroad-crossing case, or does Locke 's exception derail it?

To start, we agree with Norfolk Southern that Congress comprehensively regulated the railroad industry dating back to the late nineteenth century. See United Transp. Union v. Long Island R.R. , 455 U.S. 678, 687, 102 S.Ct. 1349, 71 L.Ed.2d 547 (1982). But even then, regulating railroad crossings for the public welfare remained "one of the most obvious cases of the [states'] police power." Erie R.R. v. Bd. of Pub. Util. Comm'rs , 254 U.S. 394, 410, 41 S.Ct. 169, 65 L.Ed. 322 (1921).

Indiana has exercised that police power for over 150 years. In 1865, the legislature made it a misdemeanor to leave a train "standing across any public highway or street, to the hindrance of travel, for a longer time than ten minutes." Act of Dec. 20, 1865, ch. XXIV, 1865 Ind. Acts 119. Over decades, the General Assembly nuanced the regulation—adjusting the blockage time limit and the fine amount, and eventually regulating blockages by freight cars and passenger cars separately. See Ind. Rev. Stat. § 2176 (1896); Burns' Ind. Stat. Ann. § 2672 (1914); Burns' Ind. Stat. Ann. §§ 2903, 2904 (1926); Burns' Ind. Stat. Ann. §§ 10-3904, 10-3905 (1933); Burns' Ind. Stat. Ann. §§ 10-3904, 10-3905 (Repl. 1956). Then in 1972, the legislature passed the current statute, which has remained unamended. See P.L. 63-1972 (codified at I.C. § 8-6-7.5-1 ). Across their nuances, these statutes have aimed "to prevent delay to traffic using our avenues of travel at points where railroads intersect such avenues." Pa. R.R. v. Huss , 96 Ind. App. 71, 77, 180 N.E. 919, 921, (1932) (in banc), trans. denied . The State thus properly notes that Indiana has long regulated railroad crossings with a blocked-crossing statute.

Norfolk Southern responds that even if the blocked-crossing statute has protected the public interest for a long time, it remains a direct regulation of railroad operations. This is a fair point—and one that headlines our preemption analysis below—but it does not undermine the presumption against preemption.

Rather, the presumption covers "subject[s] traditionally governed by state law." CSX Transp., Inc. v. Easterwood , 507 U.S. 658, 663–64, 113 S.Ct. 1732, 123 L.Ed.2d 387 (1993). So in Easterwood , the Supreme Court of the United States applied the presumption in a challenge to a railroad's state-law tort duties to maintain both reasonable train speeds and proper warning devices at crossings. Id. at 661, 663–64, 668, 113 S.Ct. 1732. Those...