Friberg v. Kansas City Southern Railway Co.

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 00-40270

GUNARD FRIBERG, Etc.; EL AL.,
Plaintiffs,

GUNARD FRIBERG, Individually & as
Executor of the Estate of Martha Friberg,
Deceased; CARL FRIBERG,
Plaintiffs-Appellees,

versus

KANSAS CITY SOUTHERN RAILWAY
COMPANY,
Defendant-Appellant.

Appeals from the United States District Court
for the Eastern District of Texas

October 5, 2001

Before POLITZ and EMILIO M. GARZA,* Circuit Judges, and HEAD,** District
Judge.

*
Judge Emilio M. Garza concurs except as to footnote 18.
**
District Judge of the Southern District of Texas, sitting by designation.
POLITZ, Circuit Judge:

The Kansas City Southern Railway Company appeals an adverse jury verdict

finding it negligent and negligent per se for repeatedly blocking the primary road

leading to the Fribergs’ business, allegedly resulting in the failure of that business.

Concluding that the causes of action asserted are preempted by the Interstate

Commerce Commission Termination Act of 1995, we must reverse.

BACKGROUND

In 1964 the Fribergs purchased a home and acreage near Leesburg, Texas, and

began operating a landscape nursery there. The property was located along County

Road 3540 just south of State Highway 11, and approximately 250 feet south of both

the main line and a side track crossing CR 3540 operated by the Kansas City Southern

Railway (“KCS”). Although customers could reach the nursery by two other routes

that were not affected by the side track, CR 3540 was the primary access road because

it was the most direct route from highway 11. Until the late 1990's the existing side

track was seldom used as most trains operated by KCS exceeded the approximate 3300

foot length of the side track.1

1
Side tracks are used to park a train going one direction on a main line while a train
going the opposite direction passes. They can also be used as a detour to circumvent
places on the main line where the tracks become unusable due to washouts, accidents,
maintenance, etc. Obviously, to allow a train going in the opposite direction to pass,
the other train must be able to pull completely on to the side track leaving no cars on
2
 In 1995, utilizing right-of-way it already owned, KCS lengthened the side track

to more than 9900 feet so it could accommodate the longer trains it was operating. As

a result of this improvement, in 1996 KCS began using the side track with increased

frequency, which meant CR 3540 was blocked by waiting trains more often than in the

past and customers using the road encountered delays in getting to or from the nursery.

The Fribergs experienced a general decline in business, occasioned by the

county road blockages, and they contacted various authorities and railroad personnel

in an attempt to alleviate the blocking problem. All efforts were to no avail. In 1998

the nursery was permanently closed and the Fribergs filed suit against KCS, alleging

both negligence and negligence per se.2

KCS moved for summary judgment contending that the Fribergs’ claims were

preempted by the Interstate Commerce Commission Termination Act of 1995

the main line. The record reflects that the KCS has side tracks approximately every 20
miles along its main line between Shreveport, Louisiana, and Dallas, Texas.
2
At the time of the events at issue TEX. TRANS. CODE ANN. § 471.007(a) (“Texas
Anti-Blocking Statute”) prohibited railroad officers, agents, servants or receivers from
wilfully allowing a standing train to block a street, highway or railroad crossing for
more than five minutes. That provision has since been amended to prohibit a railroad
from permitting its train to block any street, highway or railroad crossing for more than
ten minutes, extending the time limit and deleting the “standing train” limitation. The
Fribergs also asserted claims for mental anguish, which were dismissed on a Motion
for Directed Verdict.
3
(“ICCTA”),3 the Federal Railway Safety Act of 1970 (“FRSA”), and the Commerce

Clause of the federal Constitution.4 The trial court denied the motion and, after a trial,

the jury found the railroad liable on both claims, but it could not reach a unanimous

verdict on damages. The Fribergs and KCS then agreed to accept a less-than-

unanimous verdict on the damages issue with both sides retaining all rights to appeal,

and they agreed to specific terms respecting the damages due depending upon the

outcome of any appeal .5

ANALYSIS

I Consent Judgment

We first address the Fribergs’ motion asserting that the Final Judgment entered

3
49 U.S.C. § 10101, et seq.
4
49 U.S.C. § 20101, et seq. At the close of evidence KCS also moved for directed
verdict based on the same contentions.
5
The agreement states that if the judgment is appealed and affirmed, KCS will pay
the Fribergs $120,000, or double the jury’s award of $60,000 in damages; if the
judgment is appealed and reversed and rendered KCS will pay nothing; and if the
judgment is appealed and reversed and remanded the agreement will be null and void.
Testimony relating to the damages agreement was sealed by the trial court at the
request of the parties; however, both sides have disclosed the agreement’s terms in
their briefs, waiving any confidentiality of those terms. The Fribergs subsequently
moved to dismiss the appeal, contending that the agreement rendered the Final
Judgment filed in the case a consent judgment which, despite its language preserving
both sides’ appeal rights, could not be appealed. That motion has been carried with the
case and for the reasons stated herein is denied.
4
in this case is a consent judgment not subject to appeal. The motion is resolved by a

careful examination of the agreement between the Parties. The jury unanimously found

the railroad liable on both the negligence and the negligence per se counts, but

deadlocked 7-1 on damages, with the nigh-unanimous majority finding that the railroad

owed the Fribergs $60,000. The Parties agreed to waive their rights to a unanimous

verdict on the damages issue, and the February 14, 2000, Final Judgment reflects both

that agreement and the express provision that “each party retain[s] all rights of appeal

of that verdict the same as if it had been rendered unanimously.”6 Agreeing to accept

a less-than-unanimous verdict, where the jury dictates the terms of the Judgment, is

patently distinct from consenting to a Judgment wherein the Parties themselves settle

and agree to all of the terms.7 Nor do the agreement’s terms conditioning damages to

6
Indeed the record reflects that the issue whether or not there would be an appeal
was specifically discussed during the announcement of the settlement agreement in
court, and counsel for KCS bound the railroad to appeal when counsel for the Fribergs
questioned what damages would be due if there was no appeal. Furthermore, counsel
for the Fribergs agreed there would be no attempt to collect the judgment while the case
was on appeal. It is apparent that both sides contemplated this appeal when agreeing
to accept a less-than-unanimous verdict on damages.
7
See, e.g., Vineyard v. Wilson, 597 S.W.2d 21, 23 (Tex. Civ. App. – Dallas 1980,
no writ)(“In order for a consent judgment to be valid, the parties must have definitely
agreed to all the terms on which it was based. Nothing should be left for the court to
provide.”) Here, the Parties may be estopped from challenging the Judgment because
it is based upon a less-than-unanimous verdict, but they are not estopped from
challenging its validity as to liability.
5
be paid upon the outcome of the appeal transform the agreement into a consent

judgment. As the Supreme Court found in Haven’s Realty Corp. v. Coleman,8 such an

agreement merely liquidates the damages due. Accordingly, the Motion to Dismiss is

denied.

II Preemption

Whether a state statute or common law cause of action is preempted by federal

law is a question of law we review de novo.9 Preemption under the Supremacy Clause

of the federal Constitution may arise in several ways, i.e., (1) express preemption

where the intent of Congress to preempt state law is clear and explicit; (2) field

preemption where state law intrudes in an area that Congress has reserved for federal

jurisdiction; and (3) conflict preemption, where enforcement of state law cannot be

accomplished while simultaneously complying with federal law.10 Our analysis begins

by looking to the expression of Congress, i.e., whether Congress either specifically

stated that regulation of railroad operations and side tracks is reserved to the federal

government, or implicitly so stated in defining the structure and purpose of the relevant

8
455 U.S. 363 (1981)(finding that an agreement tying the damages payable to
whether the Supreme Court granted certiorari did not extinguish the claims so as to
make the appeal moot).
9
Meredith v. Louisiana Federation of Teachers, 209 F.3d 398, 404 (5th Cir. 2000).
10
English v. General Electric Co., 496 U.S. 72 (1990).
6
federal legislation.11

ICCTA

The ICCTA became effective on January 1, 1996, abolishing the Interstate

Commerce Commission and creating the Surface Transportation Board (“STB” or

“Board”) to perform many of the regulatory functions formerly performed by the

Commission. Where a statute contains a specific preemption clause, the language of

that clause becomes the focus of our analysis.12 Section 10501 of the ICCTA is entitled

General Jurisdiction, and states in relevant part:

(b) The jurisdiction of the Board over –

(1) transportation by rail carriers, and the remedies provided in this part
[49 U.S.C. §§ 10101 et seq.] 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,

is exclusive. Except as otherwise provided in this part [49 U.S.C. §§

11
See, e.g., Shaw v. Delta Air Lines, Inc., et al., 463 U.S. 85, 95 (1982)(collecting
cases).
12
CSX Transportation, Inc. v. Easterwood, 507 U.S. 658, 664 (1993)(“If the
statute contains an express preemption clause, the 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’ preemptive intent.”).
7
 10101 et seq.], 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.

The language of the statute could not be more precise, and it is beyond

peradventure that regulation of KCS train operations, as well as the construction and

operation of the KCS side tracks, is under the exclusive jurisdiction of the STB unless

some other provision in the ICCTA provides otherwise.13 The regulation of railroad

operations has long been a traditionally federal endeavor, to better establish uniformity

in such operations and expediency in commerce,14 and it appears manifest that

Congress intended the ICCTA to further that exclusively federal effort, at least in the

economic realm.

The trial court, in finding no preemption, delved into the legislative history of the

ICCTA. We respect that effort, but find that the plain language of the statute itself, and

in particular its preemption provision, is so certain and unambiguous as to preclude any

need to look beyond that language for congressional intent.15 We cannot accept the

13
Although railroad side tracks are under the exclusive jurisdiction of the STB, rail
carriers do not need prior STB approval to construct and operate those tracks. 49
U.S.C. § 10906.
14
See, e.g., City of Auburn v. United States, 154 F.3d 1025, 1029 (9th Cir.
1998)(collecting cases describing the history of federal railroad regulation).
15
See Demarest v. Manspeaker, 498 U.S. 184, 190 (1991)(“When we find the
terms of a statute unambiguous, judicial inquiry is complete except in rare and
8
trial court’s reasoning that the Texas Anti-Blocking Statute is a criminal provision that

does not reach into the area of economic regulation of railroads. Regulating the time

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 that are not obviated or lessened merely because the provision carries a

criminal penalty.

The Fribergs assert that § 10502 of the ICCTA, which is implemented through

49 C.F.R. § 1121.1 et seq., provides an exemption from the STB’s jurisdiction. Section

10502, however, grants the power to exempt an entity to the Board itself, not to any

other authority.16 Further, § 10502 offers relief from administrative procedures for

those seeking to acquire, operate or abandon rail lines, not to those seeking to regulate

such rail operators.17

exceptional circumstances.”); and United States v. Gonzalez, 520 U.S. 1, 6
(1997)(“Given the straightforward statutory command, there is no reason to resort to
legislative history.”).
16
Subsection 10502(a) states in relevant part: “In a matter related to a rail carrier
providing transportation subject to the jurisdiction of the Board under this part, the
Board, to the maximum extent consistent with this part, shall exempt a person, class
of persons, or a transaction or service . . . .” (emphasis added).
17
See, e.g., 66 Fed. Reg. 31,275 (June 11, 2001)(STB granting rail carrier a track
abandonment exemption); 66 Fed. Reg. 27,545 (May 17, 2001)(STB granting rail
carriers and non-rail carrier holding company a change of control exemption); 63 Fed.
Reg. 58,093 (October 29, 1998)(STB granting rail carrier a track purchase exemption);
9
 Nothing in the ICCTA otherwise provides authority for a state to impose

operating limitations on a railroad like those imposed by the Texas Anti-Blocking

Statute, nor does the all-encompassing language of the ICCTA’s preemption clause

permit the federal statute to be circumvented by allowing liability to accrue under state

common law, where that liability arises from a railroad’s economic decisions such as

those pertaining to train length, speed or scheduling. We thus hold that the Texas Anti-

Blocking Statute, as well as the Fribergs’ common law claim of negligence, are

preempted by the ICCTA.18

62 Fed. Reg. 39,593 (July 23, 1997)(STB granting rail carrier a rail construction and
operation exemption); and 61 Fed. Reg. 46,901 (September 5, 1996)(STB granting rail
carrier a track lease exemption). See also Friends of the Atglen-Susquehanna Trail,
Inc. v. Surface Transportation Board, 2001 WL 584802 (3rd Cir. 2001)(discussing
exemptions under § 10502 for rail carriers seeking to abandon rail lines); and Lee’s
Summit, Missouri v. Surface Transportation Board, 231 F.3d 39 (D.C. Cir.
2000)(discussing exemption granted to a rail carrier to restore service over a
preexisting line). Anyone can petition to have an exemption revoked and seek judicial
review of STB determinations. 49 U.S.C. § 10502(d); 49 C.F.R. § 1115.1 et seq.; and
49 C.F.R. § 1121.4(f). See e.g., City of Ottumwa v. Surface Transportation Board, 153
F.3d 879 (8th Cir. 1998)(denying city and labor union’s petitions for review of STB’s
actions, which included denying their petitions to revoke an exemption granted under
§ 10502).
18
Because of today’s holding we need not and do not decide whether the Fribergs’
claims are also preempted by the FRSA or the Commerce Clause of the federal
Constitution. It is important to note that we are not faced with, and do not herein
decide, what impact the ICCTA would have upon a state provision pertaining strictly
to such traditionally state-controlled safety issues as local law enforcement and
emergency vehicle access. That issue remains for another day and may have a
substantially different result. Further, we recognize that our decision today could be
10
 The judgment appealed is REVERSED.

interpreted by reasonable minds as allowing a taking without just compensation.
Although the supremacy of federal law in the regulation of rail transportation cannot
be denied, the federal government’s failure to take appropriate steps to alleviate the
blocking problems that the various state provisions have attempted to address enables
the railroads to operate in such a manner as to severely diminish the use and value of
private property without any compensation to those affected. That loss and the
resolution thereof likewise remains for another day.
11