Thiele v. Norfolk & Western Ry. Co., 95-1083

• Decision Date: 12 October 1995
• Docket Number: No. 95-1083,95-1083
• Citation: 68 F.3d 179
• Parties: Linda THIELE, Guardian of the Person and Estate of Craig Thiele, Plaintiff-Appellant, v. NORFOLK & WESTERN RAILWAY COMPANY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 179

68 F.3d 179

Linda THIELE, Guardian of the Person and Estate of Craig Thiele, Plaintiff-Appellant, v. NORFOLK & WESTERN RAILWAY COMPANY, Defendant-Appellee.

No. 95-1083.

United States Court of Appeals Seventh Circuit.

Argued May 12, 1995.

Decided Oct. 12, 1995.

Robert A. Clifford, Chicago, IL, Philip H. Corboy, David C. Wise (argued), David C. Wise, J.M. Dudley, Robert J. Bingle, Corboy & Demetrio, Chicago, IL, G. Stanley Hood, Roby & Hood, Fort Wayne, IN, for Plaintiff-Appellant.

John C. Duffey (argued), Russell H. Hart, A. James Chareq, Stuart & Branigin, Lafayette, IN, for Defendant-Appellee.

Before BAUER, MANION, and KANNE, Circuit Judges.

KANNE, Circuit Judge.

Craig Thiele was severely injured when a Norfolk & Western freight train collided with his car at a railroad crossing in Yoder, Indiana. Thiele's guardian sued the railroad, alleging that it had been negligent in failing to install adequate warning devices at the crossing and in placing a signal control box near the tracks. The district court granted summary judgment against Thiele, finding that his claims were preempted by federal law and, alternatively, that no reasonable jury could find in his favor. We affirm.

I. Background

Yoder is a small town in Allen County in northern Indiana. Its major road is, aptly enough, Yoder Road, a two-lane road that runs east-west. Two sets of railroad tracks running north-south intersect Yoder Road at the crossing where Thiele's accident occurred.

At the time of the accident, several passive warning devices guarded the Yoder Road crossing. Pavement markings and a round, yellow-and-black railroad sign, located about five hundred feet on the west side of the crossing, warned eastbound motorists of the approaching crossing. The area around the crossing was flat, so the crossing itself was visible from some distance. Closer to the intersection on both sides were crossbucks, the familiar reflective signs with crossed arms. Additionally, stop signs were placed prominently in front of the tracks. All these devices had been in place some time before the accident; the federal government had no role in their installation or upkeep.

In October 1991, Norfolk & Western ("NW"), Allen County, and the Indiana Department of Transportation executed an agreement to upgrade the warning devices at the Yoder Road crossing. The plan called for automatic gates and flashing lights to supplement the already existing passive warning devices. The agreement specified building procedures, construction materials, and the construction schedule. The agreement was contingent on approval by the Federal Highway Administration ("FHA"); the FHA approved the entire agreement on November 19, 1991. Federal funds were to finance 90% of the project, with Allen County providing the rest.

Shortly before the accident, the railroad began installing the gates and flashers. Some holes had been dug and posts installed for the gates, but no part of the new devices was operational. A signal control box for the new devices had, however, been installed in the northwest corner of the crossing.

On March 6, 1992, at about noon, Craig Thiele drove toward the tracks from the west. He drove through the stop sign without stopping and stopped on the tracks, according to several eyewitnesses. A NW train approached from the north and repeatedly sounded its whistle. Thiele remained on the tracks; his car was later found in the "Park" gear position. The train struck Thiele's car, and he was severely and permanently injured. Thiele's guardian brought this diversity suit.

II. Analysis

The district court granted summary judgment for NW, holding that the Federal Railway Safety Act of 1970 ("FRSA"), 49 U.S.C. Sec. 20101 et seq., ¹ preempted Thiele's claims of inadequate warning devices at the Yoder Road crossing, as well as his claims of negligent placement of the signal control box. We review a district court's grant of summary judgment de novo. Hedberg v. Indiana Bell, 47 F.3d 928, 931 (7th Cir.1995). We draw all reasonable inferences in favor of the nonmoving party. Id. A district court must grant summary judgment where the record before it shows that "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED.R.CIV.P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986).

There is a presumption against finding federal preemption of state law. CSX Transp., Inc. v. Easterwood, --- U.S. ----, ----, 113 S.Ct. 1732, 1739, 123 L.Ed.2d 387 (1993). "Pre-emption will not lie unless it is 'the clear and manifest purpose of Congress.' " Id. at ----, 113 S.Ct. at 1737 (quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230, 67 S.Ct. 1146, 1152, 91 L.Ed. 1447 (1947)). The FRSA, a comprehensive system of railway safety regulations, explicitly provides that it and connected regulations preempt state law, but it allows state law to continue in effect "until the Secretary of Transportation prescribes a regulation or issues an order covering the subject matter of the State requirement." 49 U.S.C. Sec. 20106.

Two regulations adopted by the Secretary are relevant to Thiele's case. ² Both regulations apply "on any project where Federal-aid funds participate in the installation of" warning devices at railroad crossings. 23 C.F.R. Sec. 646.214(b)(3) provides that on such a federally aided project warning devices must include automatic gates if any one of several listed conditions is present. See Shots v. CSX Transp., 38 F.3d 304, 306 (7th Cir.1994). 23 C.F.R. Sec. 646.214(b)(4) provides that if subsection (b)(3) does not mandate the installation of automatic gates and flashers, "the type of warning device to be installed ... is subject to the approval of" the Secretary. See Shots, 38 F.3d at 306. Subsection (b)(3) applied to the Yoder Road crossing upgrade--the crossing had multiple tracks, a condition specified in (b)(3), and the crossing was to receive the warning devices specified in (b)(3), automatic gates with flashing lights.

The Supreme Court examined Sec. 646.214(b)(3)-(4) in Easterwood, --- U.S. ----, 113 S.Ct. 1732. The Court specifically addressed when subsections (b)(3) and (4) preempt state tort claims of inadequate warning devices. It held that "for projects in which federal funds participate in the installation of warning devices, the Secretary has determined the devices to be installed and the means by which railroads are to participate in their selection. The Secretary's regulations therefore cover the subject matter of state law...." Id. at ----, 113 S.Ct. at 1741.

In Easterwood, CSX had agreed to install automatic gates at a crossing, the Secretary had approved the plan, federal funds had been set aside, and motion detection circuitry had been installed. However, the upgrade was never completed because the city declined to approve a necessary, related street project. Eventually the federal funds set aside for the upgrade plan were transferred to another project. The Supreme Court held that the regulations did not preempt the claims of inadequate warning devices, because it was "not establish[ed] that federal funds 'participate[d] in the installation of the [warning] devices' at [the crossing]." Id. at ----, 113 S.Ct. at 1741.

Easterwood thus instructs that federal financial participation in a railroad crossing upgrade is necessary for preemption under Sec. 646.214(b)(3)-(4). Courts have interpreted Easterwood as providing that the mere fact of some federal financial participation is not necessarily sufficient to trigger preemption. The Tenth Circuit has held that the degree of participation must be "significant," rather than merely a "casual financial connection." Armijo v. Atchison, Topeka & Santa Fe Ry. Co., 19 F.3d 547, 550 (10th Cir.1994). The Eighth Circuit has held that federal financial participation triggers preemption only when warning devices have been completely installed and are operating. St. Louis S.W. Ry. Co. v. Malone Freight Lines, 39 F.3d 864, 866-67 (8th Cir.1994), cert. denied, --- U.S. ----, 115 S.Ct. 1963, 131 L.Ed.2d 854 (1995). See also Hester v. CSX Transp., Inc., 61 F.3d 382 (5th Cir.1995) (finding preemption after extensive participation of federal funds and completed installation of warning devices).

This Circuit has only once addressed the preemptive effect of Sec. 646.214(b)(3)-(4) in light of Easterwood. In Shots, 38 F.3d at 306, CSX had agreed with the State of Indiana to make minimal upgrades at several thousand crossings, adding crossbucks where before there had been no warning devices. The Secretary of Transportation approved the upgrade plan generally, but did not specifically approve the crossbucks as adequate warning devices pursuant to Sec. 646.214(b)(4). However, the federal government provided funds for the upgrade. We held that the mere fact of federal financial participation in a warning system upgrade did not automatically preempt state law tort claims. Id. at 307. Instead, we held that for warning systems subject to subsection (b)(4), the Secretary's specific approval of a warning system, in addition to federal financial participation, was necessary for preemption. Id. at 308-09.

NW contends, and the district court found, that preemption necessarily occurred when the Secretary approved the agreement for the upgrade on November 19, 1991. Thiele argues that preemption only occurred when the devices were installed and operational, i.e., after his accident. NW argues that Shots dictates the result it wants, even though in Shots the accident occurred after installation was complete. NW relies on dicta from Shots that "[w]e do not doubt that the Secretary can approve a warning device before or after its installation." 38 F.3d at 308. NW interprets this to mean that the Secretary's November 19 approval necessarily triggered preemption. However, we interpret Shots differently.

Initially, we...