Wis. Cent. LTD v. Gottlieb

• Decision Date: 24 April 2013
• Docket Number: No. 2012AP1019.,2012AP1019.
• Citation: 832 N.W.2d 359,2013 WI App 61,348 Wis.2d 141
• Parties: WISCONSIN CENTRAL LTD, Plaintiff–Appellant, v. Mark GOTTLIEB, Secretary, Wisconsin Department of Transportation, Defendant–Respondent.
• Court: Wisconsin Court of Appeals

348 Wis.2d 141

832 N.W.2d 359

2013 WI App 61

WISCONSIN CENTRAL LTD, Plaintiff–Appellant,

v.Mark GOTTLIEB, Secretary, Wisconsin Department of Transportation, Defendant–Respondent.

No. 2012AP1019.

Court of Appeals of Wisconsin.

Oral Argument March 19, 2013.

Opinion Filed April 24, 2013.

On behalf of the plaintiff-appellant, the cause was submitted on the briefs of Russell W. Wilson and Terri M. Smith of Ruder Ware, L.L.S.C. of Wausau. There was oral argument by Russell W. Wilson.

On behalf of the defendant-respondent, the cause was submitted on the brief of Chad R. Gendreau, assistant attorney general, R. Duane Harlow, assistant attorney general, and J.B. Van Hollen, attorney general. There was oral argument by Chad R. Gendreau.

Before BROWN, C.J., NEUBAUER, P.J., and REILLY, J.

BROWN, C.J.

[348 Wis.2d 143]¶ 1 This case concerns a troublesome railroad crossing where busy railroad tracks owned by Wisconsin Central LTD (WCL) intersect with high volume vehicle traffic on Lakeshore Drive leading into and out of the city of Fond du Lac. Pursuant to an order of the Office of the Commissioner of Railroads (OCR), the Wisconsin Department of Transportation (DOT) is managing a project through which vehicle traffic on Lakeshore Drive will be redirected onto an overpass, separated from the railroad tracks. The overpass project was the outcome of a settlement agreement between WCL and the village of North Fond du Lac, approved by the OCR. The OCR, pursuant to that settlement, authorized the village to seek funding and move forward with construction of the overpass. The DOT is in charge of the project and seeks soil samples from portions of WCL's property that are in the project construction corridor, as part of the environmental due diligence that is required by state and federal regulations before the project can move from the design phase to the construction phase.

¶ 2 WCL objects to the DOT's taking the soil samples, arguing that such action would amount to an unreasonable search and seizure of its property in violation of the Fourth Amendment. It sued the DOT to stop it from taking such samples, and now appeals from a judgment of the Fond du Lac county circuit court denying its motion for an injunction and dismissing its action seeking declaratory and injunctive relief. We hold that WCL expressly consented to the overpass project, including, specifically, the soil sampling required to complete the design phase. We affirm.

Background

¶ 3 The intersection of WCL's railroad with Lakeshore Drive in North Fond du Lac is causing traffic and safety problems for the community. WCL's records as of 2007 showed that the crossing was blocked by rail traffic for at least 5.75 hours per day. In proceedings concerning the crossing, the OCR found that the blocked traffic causes “enormous public inconvenience in delays” and increased costs of travel and forces public safety agencies to use other routes, which “more than double[s] response time” in some emergencies. Hence, it is beyond dispute that, as the OCR concluded, “[c]hanging the existing [crossing] ... will promote public safety and convenience.”

¶ 4 Formal proceedings concerning the crossing were initiated in 2005 when WCL petitioned the OCR to close or alter the crossing, as provided by Wis. Stat. §§ 195.28 and 195.29 (2011–12).¹SeeIn re Petition No. 9164–RX–611, PSC Ref. # 178625, 1, 2005 WL 6800161 (Nov. 3, 2005) (interim order). After initial proceedings,WCL withdrew its request to close the crossing and revised its petition to alter the crossing. Id. In addition, the village added its own petition to the proceedings, seeking an order that there should be a grade separation at the crossing—i.e., that the railroad tracks and the roadway should be separated, with one going over the other. Id.

¶ 5 Faced with these petitions, the OCR first issued an interim order granting WCL's revised petition to alter the tracks and ordering the following:

the WCL to fund 50% of the cost of a study to evaluate the feasibility of constructing a grade-separated crossing at or near the Lake Shore Drive crossing, provided that the Village Board of North Fond du Lac passes a resolution ... authorizing Village staff to commence such a study whether with its own personnel, through the Wisconsin Department of Transportation, through the Regional Planning Commission or through some other entity or mechanism.

Id. at 2 (alteration in original). Nothing in the record suggests that either WCL or the village objected to or sought review of this order, and the study was completed in 2007.

¶ 6 The study cofunded by the village and WCL presented five alternatives for a grade separation at the crossing. The village and WCL both agreed that one design, Alternative B, was the best, as it “has the lowest estimated cost,” provides desirable grades for approach, and needs relatively “modest” real estate acquisition. The commissioned study also set forth the following “environmental” information applicable to any of the designs for separating the grades at the crossing:

This report did not investigate the potential for underground contamination of lands required for the alternative projects. A[t] least one site on railroad property is known to have been identified in the past and remediated. Because of the age of the yard and the nature of operations in rail yards, any project alternative selected for further development should include a HAZMAT investigation for the selected route. The HAZMAT investigation should be performed by qualified individuals and may require field sampling of soils and laboratory testing.

The report also reviewed “possible funding sources,” including details about three DOT-managed programs.

¶ 7 In January 2007, shortly after the study was issued, the village and WCL executed a proposed settlement agreement documenting their agreement to share costs of constructing the overpass as described in Alternative B of the study. In this agreement, the village promised to seek “a Federal earmark for a grant” and WCL promised to pay the village $800,000 if it was able to secure the needed funds. The agreement also provided that “[e]ach party will be fully compensated by the other for the fair market value of property taken by the other for purposes of the project.”

¶ 8 In April 2007, the OCR issued its final decision resolving the petitions concerning the intersection. In re Petition No. 9164–RX–611, PSC Ref. No. 178623, 1–2, 2007 WL 7767963 (April 2, 2007) (final decision). The final decision approved of the proposed settlement agreement and expressly found that “[t]he Village and railroad agreed on the same alternative” for the overpass. The OCR also expressly authorized the village “to construct a grade-separated crossing (consistent with Alternative B as set forth in Exhibit 1) of Lakeshore Drive” and “[t]hat the cost of the crossing construction shall be apportioned according to” the settlement agreement,which was attached as Exhibit 4 to the order and “incorporated ... by reference.”

¶ 9 The study that served as the basis of the final decision approving construction “consistent with AlternativeB,” also discussed “possible funding sources,” most of which were programs managed by the DOT. In particular, the study pointed out the federal “earmark” funds that the village ultimately promised to pursue in its settlement with WCL necessarily required that the DOT would “bid out” the construction project. Specifically, the study explained,

If an attempt is made to obtain earmark funds for the ... project, the Village must work with Federal legislators to pursue this funding source. In addition, the community will need to partner with WisDOT in making design decisions, and the construction work would be bid out as a WisDOT contract.

That is precisely what happened. At some time after the final decision was issued, the DOT began handling the project.

¶ 10 The DOT handles highway construction projects via planning, design, construction, and maintenance stages. The overpass project at the crossing has been in the design phase throughout the proceedings in this case. The design phase precedes construction. In the design phase, inspections are done to determine “field conditions out there, what residences may be impacted, environmental concerns, things of that nature.” Geotechnical inspections examine the subsurface to tell if its properties will support the planned construction. Environmental inspections ensure that contamination is minimized or avoided. In addition, the DOT is required by federal and state regulations to conduct and document its environmental review during the design stage. SeeWis. Admin. Code § TRANS 400.06(5); see generallyWis. Admin. Code ch. 400 and 23 C.F.R. pt. 771 (2012).

[348 Wis.2d 148]¶ 11 The DOT moved forward with the planning and design of the overpass project as outlined in Alternative B and authorized by the OCR's final decision. In 2010, the DOT conducted geotechnical inspections, including taking soil borings, some of which were taken from WCL's property. Before removing those samples, the DOT gave WCL notice of its plans to take the soil, and received no objections from WCL.

¶ 12 Also as part of the design phase, a consultant prepared a Phase 1 Hazardous Materials Assessment concerning the project. That assessment concluded that further hazardous materials investigations needed to be done at various sites in the construction corridor. Specifically, the investigation discovered three sites that were “directly adjacent to the project corridor,” one of which is on WCL's property. Therefore, the Phase 1 investigation recommended “further hazardous materials” investigation for a number of sites, including an area of concern on WCL's property.

¶ 13 After receiving that report, the DOT sent notice to WCL that it intended to enter its property to take the soil samples as was recommended by the consultant. WCL objected and refused to give its consent to environmental...