Union Pacific R. Co. v. California Pub. Utilities, C 97-3660 TEH.

Decision Date20 July 2000
Docket NumberNo. C 97-3660 TEH.,C 97-3660 TEH.
PartiesUNION PACIFIC RAILROAD COMPANY, et al., Plaintiffs, v. CALIFORNIA PUBLIC UTILITIES COMMISSION, et al., Defendants.
CourtU.S. District Court — Northern District of California

Maureen E. Mahoney, Latham & Watkins, Washington, D.C., Linda A. Bagley, Latham & Watkins, Menlo Park, CA, Laura McKinney, Environmental Law Foundation, Oakland, CA, Frederick L. Nelson, Oakland, CA, Lawrence M. Mann, Alper, Mann & Weisbaum, P.C., Washington, D.C., for plaintiffs.

Peter Arth, Jr., Mark Fogelman, Patrick S. Berdge, Lionel B. Wilson, Public Utilities Commission of the State of California, San Francisco, CA, Louis P. Warchot, Association of American Railroads, Washington, D.C., Judry L. Subar, Sandra M. Schraibman, U.S. Department of Justice, Washington, D.C., for defendants.

MEMORANDUM AND ORDER

HENDERSON, District Judge.

This matter came before the Court on May 1, 2000, on plaintiffs' and defendants' cross-motions for summary judgment. Having carefully considered the written and oral arguments presented by the parties, intervenors, and amicus curiae, and the voluminous record herein, the Court grants in part, and denies in part, the motions for summary judgment as set forth below.

FACTUAL BACKGROUND

As explained in our December 10, 1997 memorandum addressing plaintiffs' motion for preliminary injunction, this case has its genesis in two major railway accidents that occurred in 1991. On July 14, 1991, a train operated by the Southern Pacific Transportation Company derailed on the Cantara Loop Bridge near Dunsmuir, California with devastating results. Thousands of gallons of metam-sodium, which becomes highly toxic when mixed with water, spilled into the Sacramento River, killing all fish and vegetation along the river for 40 miles, and causing widespread health problems for area residents. The Sacramento River ecosystem may never recover given that some species were completely extricated from the river. See Bagley Decl., Vol. 1, ¶ 2, and appended Administrative Record (hereafter "AR") 2656-57. Two weeks later, on July 28, 1991, a Southern Pacific train was involved in another derailment near Seacliff, California. The release of toxic materials led to evacuations, the closing of a highway for approximately five days, and medical treatment for many. Id. at 2657; 57 CPUC2d 368.

The California legislature responded to these and other railroad accidents1 by directing the California Public Utilities Commission ("CPUC") to identify "local safety hazards" on California railways and to adopt regulations "to reduce the potential railroad hazards" at those sites. See CAL. PUB.UTIL.CODE §§ 7711(d), 7712; see also id. at § 765.5 (1991) (amended 1999); AR 2644-45. In August of 1991, the CPUC issued an order instituting an investigation into the July 14, 1991 Cantara Loop Bridge derailment. CPUC concluded that the derailment was caused by track-train dynamics, and in particular the configuration of the train cars, which in this case included heavy/light car and short/long car combinations too close to the head-end of the train. Re Southern Pacific Trans. Co., 57 CPUC2d 386, 400-01, 1994 WL 746871 (1994).

In December of 1994, the CPUC issued its decision regarding the Dunsmuir investigation, which found the Cantara Curve to be a local safety hazard. The CPUC issued rules regulating trains traveling over that site, including (1) a requirement that Southern Pacific utilize a state-approved locomotive maintenance quality improvement program; and (2) a requirement that trains operating over the Cantara site be configured in a specific manner. See Decision No. 94-11-069 at 403-06 (hereinafter "Dunsmuir Decision").

Meanwhile, in March of 1992, the CPUC issued an order instituting an investigation into potential railroad safety hazards in California generally. See Order Instituting Investigation No. 92-03-17. AR 12-44. On September 3, 1997, the CPUC issued a 174-page decision, 97-09-045, which identified 19 sites, located in and around California mountains, as "local safety hazard sites" and adopted numerous regulations governing operations at these sites. AR 2640-2817 (hereafter "Decision"). Among other things, the CPUC's order required the railroads to: (1) cooperate in developing performance-based standards for train configuration based on track-train dynamics principles; (2) develop standards for dynamic braking systems; (3) equip trains with two-way end-of-train telemetry devices; (4) institute new training programs regarding track-train dynamics principles; (5) install trackside defect detectors at 30 mile intervals; (6) adopt heightened standards for securing standing trains; (7) maintain current track strength at one particular site; and (8) not discipline railroad employees who report violations of the new regulations (the "whistleblower rule"). The Decision explained that:

[W]e implement these regulations not out of any sense of competition or dissatisfaction with the [Federal Railroad Administration ("FRA")] but, rather, out of sheer necessity to protect California's people, its environment and its commerce against the disastrous consequences of recent rail accidents and toxic spills. In issuing this Decision, we intend to complement the FRA's efforts and hope that both the Railroads and the FRA will join us in securing greater safety and fewer accidents in railroad operations in this state."

Id. at 2.

On October 9, 1997, plaintiffs Union Pacific Railroad ("Union Pacific"), Southern Pacific Transportation Company ("Southern Pacific"), and Burlington Northern and Santa Fe Railway Company ("Burlington Northern")2 sued to enjoin these CPUC regulations as preempted by (1) the Federal Railroad Safety Act, 49 U.S.C. § 20101 et seq.; (2) the Locomotive Boiler Inspection Act, 49 U.S.C. § 20701 et seq.; (3) the Safety Appliance Act, 49 U.S.C. § 20301 et seq.; (4) the Hazardous Materials Transportation Act, 49 U.S.C. § 5125; and (5) the Commerce Clause of the United States Constitution. Plaintiffs also claimed that aspects of two of the rules violate the First Amendment. Finally, plaintiffs sought to enjoin three state statutes governing railroad safety issues, Calif.Pub.Util.Code §§ 7672(b)-(c), 7672.5, 7673(c), as preempted by the Hazardous Materials Transportation Act, 49 U.S.C. §§ 5101 et seq., and the Federal Railroad Safety Act, 49 U.S.C. § 20101 et seq. Several environmental groups ("the Cantara intervenors")3 and unions ("the union intervenors")4 intervened as party defendants.

On November 26, 1997, this Court granted in part and denied in part plaintiffs' motion for preliminary injunction. On December 14, 1998, this Court granted partial summary judgment on some of the preemption issues presented by this action, holding that (1) Calif.Pub.Util.Code § 7672.5 is not preempted by the Hazardous Materials Transportation Act ("HMTA") or the Federal Railroad Safety Act, and (2) that Calif.Pub.Util.Code § 7673(c) is preempted by the HMTA. It also reconfirmed an earlier ruling that Calif. Public Util.Code § 7672(b)-(c) is preempted by the HMTA.

Now the parties move for summary judgment on all but two remaining claims.5 The Cantara Intervenors have joined in the CPUC's opposition and cross-motion for summary judgment. The Union Intervenors have filed separate papers in support of the CPUC. The United States of America, on behalf of the U.S. Department of Transportation ("DOT") and the Federal Railroad Administration ("FRA"), and the Association of American Railroads have also submitted briefs as amicus curiae.

DISCUSSION
I. PREEMPTION BY FEDERAL STATUTE OR REGULATION6

Under the Supremacy Clause, Congress may supplant state regulation with uniform national rules. Law v. General Motors, Corp., 114 F.3d 908, 909 (1997). "Given the importance of federalism in our constitutional structure, however, we entertain a strong presumption that federal statutes do not preempt state laws; particularly those laws directed at subjects — like health and safety — `traditionally governed' by the states." Id. at 909-10. Accordingly, a finding of preemption must rest on the clear and manifest purpose of Congress. Id. at 910.

Congress has addressed the issue of railroad safety and equipment in the three statutes at issue in these motions — the Federal Railroad Safety Act ("FRSA"), the Locomotive Boiler Inspection Act ("LBIA"), and the Safety Appliance Act ("SAA") — and delegated the administration of these laws to the Secretary of Transportation, who in turn has delegated implementation authority to the FRA, an operating administration within DOT. See 49 U.S.C. § 20103; 45 U.S.C. § 431; 49 C.F.R. § 1.49(n); CSX Transp. v. Easterwood, 507 U.S. 658, 662, 113 S.Ct. 1732, 123 L.Ed.2d 387 (1993). Together, these laws and their implementing regulations create an extensive network of federal railroad regulations; nonetheless, Congress has not occupied the entire field of railway regulation, and states may still promulgate and independently enforce rules in certain circumstances. 49 U.S.C. § 20106; See also Bagley Decl., Part II, Exh. E, App. B. at 187 (FRA Report to Congress acknowledging that while uniformity is emphasized by the FRSA, "state regulatory action can often point the way for national standards.")

In determining the preemptive effect of the FRSA, the LBIA, and the SAA, the Court is, of course, bound by their terms. "First, always, is the question of whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress." Chevron v. Natural Resources Defense Council, 467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Where, however, the statute is silent or ambiguous, then courts must defer to the agency's permissible construction of the statute. Id. at 843, 104...

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