Emerson v. Kansas City Southern Railway Co.

FILED
United States Court of Appeals
Tenth Circuit

PUBLISH
September 24, 2007
Elisabeth A. Shumaker
UNITED STATES CO URT O F APPEALS Clerk of Court

TENTH CIRCUIT

LA RRY EM ER SO N ;
STEPH A N IE EM ER SO N ,

Plaintiffs,

and No. 06-7081

REVOC AB LE TRUST OF CHA RLEY
L. D A V IS; R EV O CA BLE TR UST OF
ANNIE O . DAVIS,

Plaintiffs-Appellants,

v.

KAN SAS CITY SOUTHERN
R AILW AY C O MPA N Y ,

Defendant-Appellee.

A PPE AL FR OM T HE UNITED STATES DISTRICT COURT
FO R TH E EASTERN DISTRICT O F O K LAH O M A
(D.C. NO . 05-CV-331-K EW )

D. Kenyon W illiams, Jr., H all, Estill, H ardwick, Gable, Golden & Nelson, P.C.,
for Plaintiffs-Appellants.

W .G. “Gil” Steidley, Jr., Steidley & Neal, P.L.L.C. (C. Ryan Norton, Rex M .
Terry, Hardin, Jesson & Terry, PLC, with him on the brief), for
Defendant-Appellee.
Before LUCERO , Circuit Judge, BROR BY, Senior Circuit Judge, and
M cCO NNELL, Circuit Judge.

M cCO NNELL, Circuit Judge.

This case concerns the preemptive scope of the Interstate Commerce

Commission Termination Act of 1995 (ICCTA). Kansas City Southern Railway

Company (Railroad), the defendant below, argued to the district court that the

ICCTA preempts the state tort claims brought by the plaintiffs, who own land

adjacent to the Railroad’s track in Sequoyah County, Oklahoma. The district

court accepted this argument and granted summary judgment in the R ailroad’s

favor. After reviewing the record, however, we conclude that the ICCTA does

not expressly preempt the plaintiffs’ tort claims. W e also conclude that there

were insufficient facts in the record for the district court to determine whether the

ICCTA impliedly preempts the plaintiffs’ claims. W e therefore REVERSE the

judgment of the district court. 1

I.

The plaintiff landowners in this case are the Revocable Trust of Charley L.

Davis and the Revocable Trust of Annie O . Davis (Landowners). Their property

1
After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument.

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abuts a floodplain drainage ditch that is adjacent to a portion of the Railroad’s

track. The ditch itself contains a culvert system. The Landowners allege that

when the Railroad replaced old, deteriorated wooden railroad ties, it regularly

discarded the used rails in the drainage ditch. They also allege that the Railroad

failed to cut the vegetation in the drainage ditch on a regular basis, and that when

it cut the vegetation, it disposed of the debris in the right-of-way. The

Landowners claim that the improperly discarded railroad ties and vegetation

debris impeded the flow of water through the drainage ditch and culvert system

adjacent to their properties. This, in turn, allegedly resulted in a gradual build-up

of sediment in the drainage ditch and in the flooding of the Landowners’ property

on a number of occasions. These incidents led the Landowners to sue the

Railroad in O klahoma state court, alleging state torts of trespass, unjust

enrichment, public and private nuisance, negligence, and negligence per se. They

sought actual and punitive damages, abatement, remediation, and other relief.

The Railroad removed the case to federal court, invoking the court’s

diversity jurisdiction. See 28 U.S.C. § 1441(b). It then filed a motion for

summary judgment, arguing that the Landowners’ state law claims were

preempted by the ICCTA, Pub. L. No. 104-88, 109 Stat. 803 (codified at

49 U.S.C. §§ 10101-16106). The district court agreed. It held that “the facts

which [were] necessary to evaluate w hether federal preemption applies to

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Plaintiffs’ state law claim [were] not in dispute.” Appellant’s App. 124. The

Landowners now appeal. W e have jurisdiction under 28 U.S.C. § 1291.

II.

“W e review the grant of summary judgment de novo, applying the same

legal standard employed by the district court.” King v. PA Consulting Group,

Inc., 485 F.3d 577, 585 (10th Cir. 2007). Summary judgment is appropriate “if

the pleadings, depositions, answers to interrogatories, and admissions on file,

together with the affidavits, if any, show that there is no genuine issue as to any

material fact and that the moving party is entitled to judgment as a matter of law.”

Fed. R. Civ. P. 56(c). W hen applying this standard, “‘we view the evidence and

draw all reasonable inferences therefrom in the light most favorable to the party

opposing summary judgment.’” Reinhart v. Lincoln County, 482 F.3d 1225, 1229

(10th Cir. 2007) (quoting Terra Venture, Inc. v. JDN Real Estate-Overland Park,

L.P., 443 F.3d 1240, 1243 (10th Cir. 2006)) (brackets omitted).

III.

Congress has the power to pre-empt state law under Article VI of the

Constitution, which provides that “the Laws of the United States shall be the

supreme Law of the Land; . . . any Thing in the Constitution or Laws of any state

to the Contrary notwithstanding.” U.S. Const. art. VI. See Choate v. Champion

Home Builders Co., 222 F.3d 788, 791 (10th Cir. 2000). Because of the

supremacy of federal law, “state law that conflicts with federal law is ‘without

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effect,’” Cipollone v. Liggett Group, Inc., 505 U.S. 504, 516 (1992) (quoting

M aryland v. Louisiana, 451 U.S. 725, 746 (1981)), be it state common law or

statutory law, see Rivera v. Philip M orris, Inc., 395 F.3d 1142, 1146 (9th Cir.

2005) (“Under the Supremacy Clause of the U nited States Constitution, Congress

may preempt state common law as well as state statutory law through federal

legislation.”); see also Dist. 22 United M ine Workers of Am. v. Utah, 229 F.3d

982, 987 (10th Cir. 2000) (same).

Federal pre-emption of state law may be either express or implied. Choate,

222 F.3d at 792. Express pre-emption occurs w hen Congress “define[s] explicitly

the extent to which its enactments pre-empt state law.” Id. Implied preemption

comes in two varieties. The first is field pre-emption, which occurs when “the

scope of a statute indicates that Congress intended federal law to occupy a field

exclusively.” Sprietsma v. M ercury M arine, 537 U.S. 51, 64 (2002), quoting

Freightliner Corp. v. M yrick, 514 U.S. 280, 287 (1995), quoting English v.

General Electric Co. 496 U.S. 72, 78-79 (1990). The second is implied conflict

pre-emption, which occurs w hen “it is ‘impossible for a private party to comply

with both state and federal requirements,’ or where state law ‘stands as an

obstacle to the accomplishment and execution of the full purposes and objectives

of Congress.’” Sprietsm a, 537 U.S. at 64, quoting Freightliner, 514 U.S. at 287,

quoting Hines v. Davidowitz, 312 U.S. 52, 67 (1951). See Choate, 222 F.3d at

792. W hatever its form, pre-emption analysis “starts with the assumption that the

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historic police powers of the States are not to be superseded by . . . Federal Act

unless that is the clear and manifest purpose of Congress. Accordingly, the

purpose of Congress is the ultimate touchstone of pre-emption analysis.”

Cipollone, 505 U.S. at 516 (internal quotation marks, citations, and brackets

omitted).

This case involves claims of both express and conflict preemption. See

Sprietsm a, 537 U .S. at 65 (“Congress’ inclusion of an express pre-emption clause

‘does not bar the ordinary working of conflict pre-emption principles.’”) (quoting

Geier v. American Honda M otor Co., 529 U.S. 861, 869 (2000)) (emphasis in

original).

A. Express Preemption

The ICCTA states that “[e]xcept as otherwise provided in this part, the

remedies provided under this part with respect to regulation of rail transportation

are exclusive and preempt the remedies provided under Federal or State law.”

49 U.S.C. § 10501(b). Because the ICCTA “contains an express pre-emption

clause, our ‘task of statutory construction must in the first instance focus on the

plain wording of the clause, which necessarily contains the best evidence of

Congress’ pre-emptive intent.’” Sprietsma, 537 U.S. at 62–63 (quoting CSX

Transp., Inc. v. Easterwood, 507 U.S. 658, 664 (1993)). The Act defines

“transportation” as:

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 (A) a locomotive, car, vehicle, vessel, warehouse, wharf, pier,
dock, yard, property, facility, instrumentality, or equipment of
any kind related to the movement of passengers or property, or
both, by rail, regardless of ownership or an agreement
concerning use; and

(B) services related to that movement, including receipt,
delivery, elevation, transfer in transit, refrigeration, icing,
ventilation, storage, handling, and interchange of passengers
and property[.]

Id. § 10102(9)(A)–(B).

W hile certainly expansive, this definition of “transportation” does not

encompass everything touching on railroads. Subsection (A) focuses on physical

instrumentalities “related to the movement of passengers or property,” and

subsection (B) on “services related to that movement.” W e do not think that the

plain language of this statute can be read to include the conduct that the

Landowners complain of here— discarding old railroad ties into a wastewater

drainage ditch adjacent to the tracks and otherw ise failing to maintain that ditch.

These acts (or failures to act) are not instrumentalities “of any kind related to the

movement of passengers or property” or “services related to that movement.” Id.

Rather, they are possibly tortious acts committed by a landowner who happens to

be a railroad company. Because these acts or omissions are not “transportation”

under § 10102(9), the ICCTA does not expressly preempt the generally applicable

state common law governing the Railroad’s disposal of waste and maintenance of

the ditch.

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 This reading is consistent with other interpretations of the ICCTA’s

preemptive scope. W e look, for instance, to rulings by the Surface Transportation

Board, the agency Congress created in the ICCTA, id. § 10102(1), and to which

Congress gave “extensive authority in this area,” City of Lincoln v. Surface

Transp. Bd., 414 F.3d 858, 861 (8th Cir. 2005). The STB has exclusive

jurisdiction over:

(1) transportation by rail carriers, and the remedies
provided in this part with respect to rates,
classifications, rules (including car service, interchange,
and other operating rules), practices, routes, services,
and facilities of such carriers; and

(2) the construction, acquisition, operation, abandonment, or
discontinuance of spur, industrial, team, switching, or side
tracks, or facilities, even if the tracks are located, or intended
to be located, entirely in one State[.]

49 U.S.C. § 10501(b). “As the agency authorized by Congress to administer the

[ICCTA], the Transportation Board is uniquely qualified to determine whether

state law should be preempted by the [ICCTA].” Green Mountain R.R. Corp. v.

Vermont, 404 F.3d 638, 642 (2d Cir. 2005) (internal quotation marks omitted); see

also R.R. Ventures, Inc. v. Surface Transp. Bd., 299 F.3d 523, 548 (6th Cir. 2002)

(“[T]his Court must give considerable weight and due deference to the [STB’s]

interpretation of the statutes it administers unless its statutory construction is

plainly unreasonable.”) (second brackets in original; internal quotation marks

omitted).

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 In one of its latest decisions addressing the preemptive scope of the

ICCTA, the STB held:

[T]he courts have found two broad categories of state and local
actions to be preempted regardless of the context or rationale for the
action. The first is any form of state or local permitting or
preclearance that, by its nature, could be used to deny a railroad the
ability to conduct some part of its operations or to proceed with
activities that the Board has authorized.

Second, there can be no state or local regulation of matters directly
regulated by the Board— such as the construction, operation, and
abandonment of rail lines (see 49 U.S.C. §§ 10901–10907); railroad
mergers, line acquisitions, and other forms of consolidation (see
49 U.S.C. §§ 11321–11328); and railroad rates and service (see
49 U.S.C. §§ 10501(b), 10701–10747, 11101–11124)[.]

CSX Transp., Inc.–Petition for Declaratory Order, 2005 W L 1024490, at *2-*4

(Surface Transp. Bd. M ay 3, 2005) (citations and footnote omitted) (denying

petitions for reconsideration and reopening).

Subjecting the Railroad to state law would not cause this case to fall into

either of these categories. State tort law obviously has no pre-approval

component, as it necessarily addresses w rongs that have already occurred; and if

the Landowners prevail on remand, the applicable remedy under state law would

not deny the Railroad the ability to operate or to proceed with an STB-approved

activity. Further, the STB does not directly regulate the Railroad’s disposal of its

old railroad ties or its maintenance of vegetation along its right-of-way.

W hile not necessary to our conclusion, our holding is confirmed by the

ICCTA’s legislative history, which shows that Congress did not intend to

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pre-empt all state and federal law that might touch on a railroad’s property or

actions. For example, one House Report states:

The Conference provision [of 49 U.S.C. § 10501(b)] retains this
general rule [of increased exclusivity for Federal remedies], while
clarifying that the exclusivity is limited to remedies with respect to
rail regulation— not State and Federal law generally. For example,
criminal statutes governing antitrust matters not pre-empted by this
Act, and laws defining such criminal offenses as bribery and
extortion, remain fully applicable unless specifically displaced,
because they do not generally collide with the scheme of economic
regulation (and deregulation) of rail transportation.

H.R. Rep. No. 104-422, at 167 (1995), reprinted in 1995 U.S.C.C.A.N. 850, 852.

W e do not think that a generally applicable state law regulating the disposal of

detritus, or maintenance of vegetation, collides with the Federal scheme of

economic regulation or deregulation. Such laws are general state laws that

“remain fully applicable unless specifically displaced.” Id. W e conclude that no

such displacement has occurred here.

In addition, our holding finds support in the precedents of other courts. For

example, in Rushing v. Kansas City Southern Railway Co., 194 F. Supp. 2d 493

(S.D. M iss. 2001), the court held that the ICCTA preempted state nuisance and

negligence claims brought to quell noise and vibrations emanating from the

railroad’s switching yard. Those causes of action, the court reasoned, sought “to

enjoin the [railroad] from operating its sw itch yard in the manner it currently

employs”— authority the ICCTA plainly and exclusively gives to the STB, not the

states. Id. at 500–01.

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 Rushing, however, also held that the ICCTA did not preempt plaintiffs’

claims for negligence and nuisance based on the railroad’s construction of an

earthen berm, which “was constructed to reflect and absorb noise emissions

originating from the rail yard” and resulted in “the pooling of rainwater on [the

plaintiffs’] property.” Id. at 501. The ICCTA did not preempt those claims

because “the design/construction of the berm does not directly relate to the

manner in which the Defendant conducts its switching activities.” Id. The court

also found “that an order . . . directing the [railroad] to compensate and correct

drainage problems resulting from the construction of the berm would not

implicate the type of economic regulation Congress was attempting to prescribe

when it enacted the ICCTA.” Id. The latter holding is closely analogous to our

own.

In Friberg v. Kansas City Southern Railway Co., 267 F.3d 439 (5th Cir.

2001), the Fifth Circuit held that the ICCTA preempted a negligence suit against a

railroad by owners of a defunct business. The plaintiffs’ theory was that their

business failed because the railroad began more frequently using its side track

near their store, and the increase in train crossings led to a decrease in customers.

The court held that it was “beyond peradventure that regulation of KCS train

operations, as w ell as the construction and operation of the KCS side tracks, is

under the exclusive jurisdiction of the STB,” id. at 443, because those items were

specifically listed in the ICCTA. The court also noted that “[r]egulating the time

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a train can occupy a rail crossing impacts, in such areas as train speed, length and

scheduling, the way a railroad operates its trains, with concomitant economic

ramifications.” Id.

Likewise, in City of Auburn v. United States, 154 F.3d 1025, 1028,

1030–31 (9th Cir. 1998), the Ninth Circuit held that the ICCTA preempted state

regulation requiring a railroad to conduct a local environmental review as a

permitting precondition to re-establishing a certain railroad spur as a main route.

The court found support for its holding in “the plain language of two sections of

the ICCTA [that] explicitly grant the STB exclusive authority over railway

projects” like the one in that case. Id. at 1030. It also disregarded the state’s

attempt to justify its permitting requirements as a valid exercise of state police

power. It held that if “local authorities have the ability to impose ‘environmental’

permitting regulations on the railroad, such power will in fact amount to

‘economic regulation’ if the carrier is prevented from constructing, acquiring,

operating, abandoning, or discontinuing a line.” Id. at 1031.

Though the courts in Friberg and Auburn concluded that the state laws in

question were preempted, their reasoning supports our conclusion of

non-preemption. These courts looked to the ICCTA’s plain language and found a

statutory provision that expressly granted the STB authority to govern the

railroads’ allegedly tortious actions. The courts also found that the states’

regulations would have an adverse economic effect on aspects of the railroads’

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operations that are within the STB’s exclusive jurisdiction. Here, in contrast, no

ICCTA provision gives the STB authority to dictate how the Railroad should

dispose of detritus or maintain drainage ditch vegetation. Nor would the state

remedies adversely affect the economic aspects of the Railroad’s operations

subject to STB control.

M oreover, the Railroad’s argument has no obvious limit, and if adopted

would lead to absurd results. If the ICCTA preempts a claim stemming from

improperly dumped railroad ties, it is not a stretch to say that the Railroad could

dispose of a dilapidated engine in the middle of M ain Street— a cheap way to be

rid of an unwanted rail car. After all, in this hypothetical, as in this case, the

Railroad is merely disposing of unneeded railroad equipment in a cost-conscious

fashion. Our holding, which is consistent with the ICCTA’s legislative purpose,

interprets the ICCTA’s preemption clause such that this absurd result is avoided.

See Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 575 (1982).

In sum, based on the statute’s plain language and the STB’s interpretation

of the statutory text, and consistent with the legislative history and precedent

from other courts, we hold that the state tort remedies at issue in this case are not

expressly preempted by § 10501(b).

B. Conflict Preemption

W e next consider conflict preemption: whether it is impossible for the

Railroad to comply with both Federal and Oklahoma law, or whether application

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of the state tort laws at issue would “stand[] as an obstacle to the accomplishment

and execution of the full purposes and objectives of Congress.” Choate, 222 F.3d

at 792.

As discussed above, Congress’s purpose in passing the ICCTA was to

establish an exclusive Federal scheme of economic regulation and deregulation

for railroad transportation. But the STB has recognized that federal preemption

under the ICCTA “does not completely remove any ability of state or local

authorities to take action that affects railroad property. To the contrary, state and

local regulation is permissible w here it does not interfere with interstate rail

operations, and localities retain certain police powers to protect public health and

safety.” M aumee & W. R.R. Corp. and RM W Ventures, LLC — Petition for

Declaratory Order, 2004 W L 395835, at *1 (Surface Transp. Bd. M ar. 2, 2004).

In a separate order, the STB gave examples of permissible state regulation:

[T]here are areas w ith respect to railroad activity that are reasonably
within the local authorities’ jurisdiction under the Constitution. For
example, even in cases where we approve a construction or
abandonment project, a local law prohibiting the railroad from
dumping excavated earth into local waterways would appear to be a
reasonable exercise of local police power. Similarly, as noted by the
Secretary, a state or local government could issue citations or seek
damages if harmful substances were discharged during a railroad
construction or upgrading project. A railroad that violated a local
ordinance involving the dumping of waste could be fined or penalized
for dumping by the state or local entity. The railroad also could be
required to bear the cost of disposing of the waste from the
construction in a way that did not harm the health or well being of
the local community. W e know of no court or agency ruling that
such a requirement would constitute an unreasonable burden on, or

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 interfere with, interstate commerce. Therefore, such requirements
are not preempted.

Cities of Auburn & Kent, WA— Petition for Declaratory Order— Burlington N.

R.R. Co.–Stampede Pass Line, 2 S.T.B. 330, 1997 W L 362017, at *6 (July 1,

1997) (emphasis added).

Circuit courts have agreed with the STB on this point. The Second Circuit

has held that “not all state and local regulations are preempted [by the ICCTA];

local bodies retain certain police powers which protect public health and safety.”

Green M ountain R.R., 404 F.3d at 643 (internal quotation marks omitted). It

continued:

[S]tates and towns may exercise traditional police powers over the
development of railroad property, at least to the extent that the
regulations protect public health and safety, are settled and defined,
can be obeyed with reasonable certainty, entail no extended or
open-ended delays, and can be approved (or rejected) without the
exercise of discretion on subjective questions. Electrical, plumbing
and fire codes, direct environmental regulations enacted for the
protection of the public health and safety, and other generally
applicable, non-discriminatory regulations and permit requirements
would seem to withstand preemption.

Id.

The STB has held that to decide whether a state regulation is preempted

“requires a factual assessment of whether that action would have the effect of

preventing or unreasonably interfering with railroad transportation.” CSX

Transp., Inc., 2005 W L 1024490, at *3. W e agree with this standard and adopt it.

W e therefore hold that in order to decide whether § 10501(b) impliedly preempts

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application of the Oklahoma tort laws at issue here, a factual assessment must be

made as to whether requiring the Railroad to remedy the injury claimed by the

Landowners w ould have the effect of preventing or unreasonably interfering with

railroad transportation.

Applying that test, we conclude that the district court erred by granting

summary judgment because the Railroad did not present sufficient evidence to

satisfy its burden of production. See Fifth Third Bank ex rel. Trust Officer v. CSX

Corp., 415 F.3d 741, 745 (7th Cir. 2005) (“Federal preemption is an affirmative

defense upon which the defendants bear the burden of proof.”).

The district court’s order w as grounded on an answer that the Landowners

gave to an interrogatory requesting that they “describe in detail the actions [they]

contend[ed] need[ed] to be performed n (sic) order to remedy the flooding

problems described in the pleadings.” Appellant’s App. 47. Part of the

Landowners’ response was that “additional culverts or a railroad bridge/trestle

should be installed to allow the unimpeded flow of surface storm water through

and under Defendant’s railroad.” Id. The district court held that:

Plaintiffs state that the manner in which they expect Defendant to
rectify the drainage deficiencies along the track is to install
“additional culverts or a railroad bridge/trestle.” Clearly, any such
measures bear directly upon the “practices,” “operation,” and
“construction” in regard to Defendant’s “facilities,” namely the track
in the affected area-matters which are expressly reserved to the
exclusive jurisdiction of the STB.

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Id. at 127. The district court reasoned that this interrogatory answer was

sufficient to distinguish this case from Rushing’s second holding— that the

ICCTA did not preempt a state negligence action— because “[w]ithout doubt, the

construction of a trestle and culverts beneath the track which [Landowners] seek

does directly relate to the operation of [Railroad’s] track and would adversely

impact upon [Railroad’s] economic activities.” Id. at 128.

W e conclude, however, that the district court read too much into this

interrogatory answer. Interpreting the evidence in the light most favorable to the

party opposing summary judgment, as we must, the Landowners’ response to the

interrogatory was nothing more than a wish for a remedy that they would like to

obtain. The Landow ners’ petition asked for actual and punitive damages,

abatement and remediation, and other relief. The Landowners’ answer to the

interrogatory also stated that they would like to see the drainway resculpted “to

its 1976 depth and configuration [to] restore the original design volume and

enhance both flow and detention characteristics of the drainway”; that they

wanted the Railroad to stop throwing its used ties into the drainage ditch; and that

they wanted dead trees, vegetation, and debris removed from the drainage ditch

on a regular basis. Appellant’s App. 47. There is nothing in the record to suggest

that the Landowners had any engineering or other expertise that would qualify

them to provide an expert opinion on the precise steps that would need to be taken

to prevent further flooding.

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 Therefore, while we agree that maintenance is an integral part of running a

railroad, we do not agree that any state or local regulation of such maintenance or

disposal of maintenance byproducts is necessarily preempted. And although it is

possible that some potential remedies would have the effect of preventing or

unreasonably interfering with railroad transportation, the record as it exists

provides no clear indication of what actions by the Railroad could have prevented

the previous flooding and what would be required of the Railroad at this time to

remedy the situation. The district court therefore erred in granting summary

judgment in favor of the Railroad.

IV.

The judgment of the district court is REVERSED, and the case is

REM ANDED to the district court for further proceedings.

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