State v. Wisconsin Cent. Transp. Corp., 95-0070

• Decision Date: 10 January 1996
• Docket Number: No. 95-0070,95-0070
• Citation: 546 N.W.2d 206,200 Wis.2d 450
• Parties: STATE of Wisconsin, Plaintiff-Respondent, d v. WISCONSIN CENTRAL TRANSPORTATION CORPORATION, Defendant. WISCONSIN CENTRAL LTD. and Fox Valley & Western Ltd., Defendants-Third Party Plaintiffs-Appellants, v. James E. DOYLE, Attorney General of the State of Wisconsin and State of Wisconsin Department of Justice, Third Party Defendants. . Oral Argument
• Court: Wisconsin Court of Appeals

Page 206

546 N.W.2d 206

200 Wis.2d 450

STATE of Wisconsin, Plaintiff-Respondent, ^d v. WISCONSIN CENTRAL TRANSPORTATION CORPORATION, Defendant.

WISCONSIN CENTRAL LTD. and Fox Valley & Western Ltd., Defendants-Third Party Plaintiffs-Appellants, v. James E. DOYLE, Attorney General of the State of Wisconsin and State of Wisconsin Department of Justice,

Third Party Defendants.

No. 95-0070.

Court of Appeals of Wisconsin.

Oral Argument Jan. 10, 1996.

Opinion Released Feb. 28, 1996.

Opinion Filed Feb. 28, 1996.

Appeal from an order of the Circuit Court Fond du Lac County; Steven W. Weinke, Judge.

On behalf of the defendants-third party plaintiffs-appellants, there were briefs by Jon P. Axelrod and Joseph A. Ranney of DeWitt, Ross & Stevens, S.C. of Madison and David B. Potter and Jacob M. Holdreith of Oppenheimer, Wolff & Donnelly of St. Paul, Minnesota. There were oral arguments by Jon P. Axelrod.

On behalf of the plaintiff-respondent, there were briefs by James E. Doyle, Attorney General, Thomas L. Dosch, and Susan K. Ullman, Assistant Attorneys General. There were oral arguments by Thomas L. Dosch.

On behalf of the Soo Line Railroad Company, there was an amicus curiae brief by Patrick J. Nugent of Canadian Pacific Legal Services of Minneapolis, Minnesota.

Before ANDERSON, P.J., and BROWN and SNYDER, JJ.

SNYDER, Judge.

Wisconsin Central Ltd. and Fox Valley & Western Ltd. (Wisconsin Central) ¹ appeal from an order denying their motion for summary judgment. The single issue presented for review is whether § 192.255, STATS. (the "conductor law") is preempted by the Federal Railroad Safety Act (FRSA). Because we conclude that the conductor law is substantially subsumed by federal regulations promulgated under the FRSA, it is preempted. ² We therefore reverse the trial court ruling and grant summary judgment for Wisconsin Central.

In 1988, the United Transportation Union, a labor organization representing some employees of other railroads, filed a complaint with the Wisconsin Department of Transportation (DOT) accusing Wisconsin Central of violating the conductor law. Based on this complaint, the DOT commenced an investigation. Wisconsin Central responded with an action in federal court, challenging the constitutionality of the conductor law. ³ The federal lawsuit was dismissed after the parties reached a settlement agreement. ⁴

After the initial stay of the administrative proceeding had expired, Wisconsin Central returned to federal court, seeking a further injunction. That suit was dismissed when the federal court concluded that the State of Wisconsin had an important governmental interest in the enforcement of the conductor law.

Wisconsin Central again requested the Office of the Commissioner of Transportation (OCT) to stay any administrative proceedings pending the issuance of additional federal regulations. That stay was denied. The OCT report, which was issued following a public hearing and the filing of briefs, concluded that "it [was] likely that [Wisconsin Central] has violated and continues to violate § 192.255, Wis.Stats., in the manner in which it assigns conductors."

The state attorney general then brought an action seeking an injunction requiring Wisconsin Central to comply with the conductor law. Wisconsin Central filed a motion for summary judgment, arguing that the conductor law has been preempted by the FRSA. The trial court concluded that because the state law addresses only conductor standards, and federal regulations govern the training and certification of engineers, there was no preemption. Following denial of the summary judgment motion, Wisconsin Central requested immediate review of the resulting order. Pursuant to RULE 809.50, STATS., review was granted and this appeal followed.

Our review of a trial court's grant or denial of summary judgment is de novo, and we apply the same methodology as the trial court. See Universal Die & Stampings v. Justus, 174 Wis.2d 556, 560, 497 N.W.2d 797, 799 (Ct.App.1993). Summary judgment must be granted if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Section 802.08(2), STATS.

The issue presented is whether state regulation of conductors is preempted by the FRSA. The relevant portion of the conductor law, § 192.255, STATS., is as follows:

Qualifications of conductors and flagmen.

(1) No person shall act or be engaged to act as a conductor on a railroad freight or passenger train in this state without having for at least three years prior thereto served or worked in the capacity of a railroad brakeman.

This section now stands as the only section in ch. 192, STATS., which states qualifications for any railroad employee. ⁵

The preemption issue presents a question of statutory construction. Construction of a statute is resolved without deference to the trial court. Wisconsin Hosp. Ass'n v. Natural Resources Bd., 156 Wis.2d 688, 705, 457 N.W.2d 879, 886 (Ct.App.1990). In determining whether the conductor law is preempted, we first consider 49 U.S.C. § 20106, entitled "National uniformity of regulation." That section states in relevant part:

Laws, regulations, and orders related to railroad safety shall be nationally uniform to the extent practicable. A State may adopt or continue in force a law, regulation, or order related to railroad safety until the Secretary of Transportation prescribes a regulation or issues an order covering the subject matter of the State requirement. A State may adopt or continue in force an additional or more stringent law, regulation, or order related to railroad safety when the law, regulation, or order--

(1) is necessary to eliminate or reduce an essentially local safety hazard;

(2) is not incompatible with a law, regulation, or order of the United States Government; and

(3) does not unreasonably burden interstate commerce.

In CSX Transp., Inc. v. Easterwood, 507 U.S. 658, 113 S.Ct. 1732, 123 L.Ed.2d 387 (1993), the Supreme Court addressed the issue of preemption under the FRSA. Evidence of a preemptive purpose is first sought in the text and structure of the statute itself. Id. at 662-64, 113 S.Ct. at 1737. If the statute contains an express preemption clause, the task of statutory construction must first focus on the plain wording of the clause, which contains the best evidence of Congress' preemptive intent. Id.

In CSX Transp., the Court determined that the preemptive effect of the FRSA regulations was governed by "[45 U.S.C.] § 434, which contains express saving and pre-emption clauses." ⁶ Id. at 662, 113 S.Ct. at 1736. The Court then focused its analysis on the two terms "related to" and "covering" as dispositive of Congress' preemptive intent.

The Court cited to Morales v. Trans World Airlines, Inc., 504 U.S. 374, 383-84, 112 S.Ct. 2031, 2036-37, 119 L.Ed.2d 157 (1992), in construing "related to." The Court there determined that the ordinary meaning of the phrase is broad. Id. at 383, 112 S.Ct. at 2036-37. The Court stated that the phrase "relating to" expressed a broad preemptive purpose, had an "expansive sweep" and was "conspicuous for its breadth." Id. at 383-84, 112 S.Ct. at 2037.

The CSX Transp. Court went on to consider the term "covering." The Court concluded that it is a more restrictive term. CSX Transp., 507 U.S. at 664-66, 113 S.Ct. [200 Wis.2d 458] at 1738. The use of "relating to" in the saving clause and the more restrictive "covering" in the preemption clause suggests that the Congressional purpose was to allow states to enact regulations relating to railroad safety up to the point that federal legislation enacted a provision which specifically covered the same material. See generally id.

Use of these two terms in this statute led the Court to conclude that preemption will be found only if the federal regulations "substantially subsume the subject matter of the relevant state law." Id. at 664, 113 S.Ct. at 1738. The "substantially subsumes" test requires a showing that FRSA regulations cover the same subject matter as state law. They must do more than "touch upon" or "relate to" the subject matter of the state law. See id.

In a case applying the CSX Transp. test which found preemption, a federal district court in Massachusetts held that an FRSA regulation which governed handholds on rail tank cars, mandating the number, size and location of the handrails, substantially subsumed the subject matter of the design and placement of the handrail on the tank car for purposes of a negligence action. Ouellette v. Union Tank Car Co., 902 F.Supp. 5, 10 (D.Mass.1995). The court reasoned that since the Secretary of Transportation had specifically addressed the safe design and placement of handholds on tank cars, a common law negligence action disputing their safe placement was preempted.

In the present case, the analysis must address whether the subject matter of the conductor law is substantially subsumed by federal regulations governing engineers. In making this determination, it is necessary to compare the historical distinctions between conductors and engineers with present day practices.

Historically, the conductor has been the crew member who "is in charge of the train and gives orders for its movement; he [or she] also is concerned with the condition and operation of the equipment." Chicago & N.W. Ry. v. LaFollette, 43 Wis.2d 631, 649, 169 N.W.2d 441, 449 (1969). In contrast, the function of the engineer has been to operate only the locomotive; the conductor has had command of the overall governance of the train.

With technological advances, rail operations have changed dramatically, and the necessity of certain jobs and responsibilities has been eliminated. The historic requirement of a "five-man crew" (engineer, fireman, conductor, head brakeman and rear brakeman) has been reduced to only two crew members. ⁷ As a result of technological advances, Wisconsin Central assigns the direction and governance of the...