Duluth, Winnipeg, and Pacific v. City of Orr ( 2008 )


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  •                     United States Court of Appeals
    FOR THE EIGHTH CIRCUIT
    ___________
    No. 07-2689
    ___________
    Duluth, Winnipeg, and Pacific Railway *
    Company, a Minnesota corporation,          *
    *
    Plaintiff - Appellant,      *
    *
    v.                                         *
    *
    City of Orr, a Minnesota Municipal         * Appeal from the United States
    corporation; Doran Klakoski, in his        * District Court for the
    Capacity as Mayor of Orr; State of         * District of Minnesota.
    Minnesota,                                 *
    *
    Defendants - Appellees,     *
    *
    ---------------------------                *
    *
    Association of American Railroads,         *
    *
    Amicus on Behalf of         *
    Appellant.                  *
    ___________
    Submitted: April 18, 2008
    Filed: June 20, 2008
    ___________
    Before MURPHY, COLLOTON, and SHEPHERD, Circuit Judges.
    ___________
    MURPHY, Circuit Judge.
    The Duluth, Winnipeg & Pacific Railway Company (railway) brought this
    action seeking a declaratory judgment that the Federal Railway Safety Act preempts
    a state law limiting the speed of trains passing through Orr, Minnesota. Both sides
    moved for summary judgment, and the district court concluded that the special law
    fell within the savings clause of the federal preemption statute. The railway appeals
    from the adverse judgment. We reverse.
    Congress passed the Federal Railway Safety Act (the Act) in 1970 to "promote
    safety in every area of rail operations," 49 U.S.C. § 20101, and authorized the
    Secretary of Transportation to make regulations and issue orders "for every area of
    railroad safety." 49 U.S.C. § 20103. The Secretary, acting through the Federal
    Railway Administration (FRA), prescribes comprehensive national track safety
    standards which address maintenance, repair, and inspection of tracks. 49 C.F.R. Part
    213.
    The Act and regulations are to be "nationally uniform to the extent practicable,"
    and generally preempt state laws covering the same subject matter. 49 U.S.C. §
    20106(a). Section 20106(a)(2) nevertheless creates a narrow exception to preemption
    through its savings clause. That clause allows a state to enact an otherwise preempted
    law or regulation directed at railroad safety or security if it "(A) is necessary to
    eliminate or reduce an essentially local safety or security hazard; (B) is not
    incompatible with a law, regulation, or order of the United States Government; and
    (C) does not unreasonably burden interstate commerce." The purpose of the savings
    clause is to "enable the states to respond to local situations not capable of being
    adequately encompassed within the uniform national standards." H.R. Rep. No. 91-
    1194, at 11 (1970), reprinted at 1970 U.S.C.C.A.N. 4104, 4117.
    The railway owns a Class 4 railroad track running through the municipality of
    Orr, which is a community of 250 inhabitants located on the shores of Pelican Lake
    in St. Louis County, Minnesota. The railway runs approximately 16 trains through
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    Orr each day, some of which carry hazardous material. The track and crossings in Orr
    meet or exceed state and federal standards. The railway is authorized by 49 C.F.R. §
    213.9(a) to set the train speed on this Class 4 track to a maximum of 60 mph. The
    railway undertook a major track improvement project in 2002, and in December 2003
    it chose to increase the maximum speed on the Orr track from 49 to 60 mph but
    limited the speed around a sharp curve north of Orr to 55 mph.
    In March 2004 a special law was introduced in the Minnesota legislature to
    prohibit railway corporations from permitting a train "to be operated at a speed in
    excess of 30 [mph] while any portion of the engine or train is within the limits of the
    City of Orr in St. Louis County." Minn. Special Law 2005, H.F. No. 140 Sec. 101.
    The railway alleges that Orr officials indicated that the city would withdraw the
    special law if it would fund a feasibility study to determine if the track could be
    relocated so that the city could expand its downtown. The railway would not agree,
    and Orr gave its approval to the special law, which became effective on August 22,
    2005.
    On November 30, 2005 the railway initiated this action seeking a declaratory
    judgment that the special law is preempted by the Act and regulations thereunder.
    Both parties filed motions for summary judgment. The district court concluded that
    the Act and the regulations in 49 C.F.R. § 213.9 cover the subject matter of train speed
    and therefore would normally preempt the special law, but that the special law met all
    three requirements of the § 20106 savings clause. According to the district court, five
    conditions in Orr combined to create an essentially local safety hazard under §
    20106(a)(2)(A) (swampy soil; extreme temperatures; lake, buildings, and propane
    tanks adjacent to track); the special law was not incompatible with federal law under
    § 20106(a)(2)(B); and the special law did not unreasonably burden interstate
    commerce when viewed in isolation (§ 20106(a)(2)(C)). Concluding that the special
    law was saved from preemption, the district court granted summary judgment in favor
    of Orr.
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    The railway appeals, arguing that the special law is not directed at an
    "essentially local safety hazard" because none of the five factors cited by the district
    court is uniquely local to Orr and each has been or is capable of being encompassed
    in the regulations, that the special law is incompatible with 49 C.F.R. § 213.9(a) which
    authorizes railroads to set speed limits for each class of track, and that it will
    unreasonably burden interstate commerce in light of the cumulative effect of similar
    laws which could be enacted in Minnesota and other states. The city of Orr urges us
    to affirm, arguing that the special law was designed to address a specific local hazard
    consisting of a unique combination of factors and that the commercial burden imposed
    by the special law alone is not unreasonable.
    Our review of a district court's grant of summary judgment is de novo, and the
    facts and all reasonable inferences are to be viewed in "the light most favorable to the
    nonmoving party. In order to create an issue for trial the nonmoving party must
    produce sufficient evidence to support a verdict in [its] favor based on more than
    'speculation, conjecture, or fantasy.'" Doe v. Dep't of Veterans Affairs, 
    519 F.3d 456
    ,
    460 (8th Cir. 2008) (internal quotation omitted). Federal Rule of Civil Procedure
    56(c) "'mandates the entry of summary judgment, after adequate time for discovery
    and upon motion, against a party who fails to make a showing sufficient to establish
    the existence of an element essential to that party's case, and on which that party will
    bear the burden of proof at trial.'" Erenberg v. Methodist Hosp., 
    357 F.3d 787
    , 792
    (8th Cir. 2004), quoting Celotex Corp. v. Catrett, 
    477 U.S. 317
    , 322 (1986).
    If a state law conflicts with or frustrates federal law, the state law generally is
    preempted. CSX Transp., Inc. v. Easterwood, 
    507 U.S. 658
    , 663 (1993); see U.S.
    Const. art. VI. It is the burden of the party advocating preemption under §
    20106(a)(2) to show that a federal law, regulation, or order covers the same subject
    matter as the state law, regulation, or order it seeks to preempt. See Fifth Third Bank
    ex rel. Trust Officer v. CSX Corp., 
    415 F.3d 741
    , 745 (7th Cir. 2005). If that showing
    is made, the burden shifts to the party resisting preemption to prove that the state law,
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    regulation, or order meets all three requirements of the savings clause in §
    20106(a)(2). These requirements are that the law (A) is necessary to eliminate or
    reduce an essentially local safety or security hazard; (B) is not incompatible with a
    law, regulation, or order of the United States; and (C) does not unreasonably burden
    interstate commerce.
    It is undisputed here that federal law covers the same subject matter as the
    special law since both it and 49 C.F.R. § 213.9 cover train speed, see 
    Easterwood, 507 U.S. at 675
    ("§ 213.9(a) should be understood as covering the subject matter of train
    speed with respect to track conditions"). The question at issue is whether Orr has
    offered evidence from which a jury could find that the special law meets all three
    requirements of the savings clause.
    The district court found that the combination of five factors present in Orr
    created an "essentially local safety hazard" under § 20106(a)(2)(A). These factors
    were 1) the track's proximity to a lake could cause contamination from spillage in case
    of a derailment; 2) swampy soil upon which the track is built could cause a
    "continuing problem" for restructuring and rebuilding track in the future; 3) the
    location of propane tanks close to the tracks created a risk of explosion; 4) churches
    and businesses were dangerously located between 67 and 278 feet from tracks; and
    5) extreme seasonal temperature changes in northern Minnesota limited possible
    alternatives to speed regulation such as relocation of tracks.
    The definition of an "essentially local safety hazard" is a question of first
    impression in this circuit. Other courts have addressed this issue and "[a]lthough we
    are not bound by another circuit's decision, . . .a sister circuit's reasoned decision
    deserves great weight and precedential value." United States v. Auginash, 
    266 F.3d 781
    , 784 (8th Cir. 2001) (internal quotations omitted). The courts of appeal which
    have addressed the issue have defined essentially local safety hazards as "local
    situations which are not statewide in character and not capable of being adequately
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    encompassed within national uniform standards." Nat'l Ass'n of Regulatory Util.
    Comm'rs v. Coleman, 
    542 F.2d 11
    , 14-15 (3d Cir. 1976); also CSX Transp., Inc. v.
    Williams, 
    406 F.3d 667
    , 672 (D.C. Cir. 2005) (per curiam); Norfolk & W. Ry. v. Publ.
    Utils. Comm'n, 
    926 F.2d 567
    , 571 (6th Cir. 1991); see also Union Pac. R.R. Co. v. Ca.
    Pub. Utils. Comm'n, 
    346 F.3d 851
    , 860 (9th Cir. 2003). This definition reflects the
    Act's legislative history:
    The purpose of [the savings clause] is to enable the states to respond to
    local situations not capable of being adequately encompassed within the
    uniform national standards. . . . Since these local hazards would not be
    statewide in character, there is no intent to permit a state to establish
    statewide standards superimposed on national standards covering the
    same subject matter.
    H.R. Rep. No. 91-1194, at 11 (1970), reprinted at 1970 U.S.C.C.A.N. 4104, 4117. We
    are persuaded that the definition adopted by the other circuits is useful and consistent
    with the statute and its history.
    If the local situation is actually statewide in character or capable of being
    adequately encompassed within national uniform standards, it will not be considered
    an essentially local safety hazard. There is no dispute that each of the conditions cited
    by the district court is by itself statewide in character. Orr’s expert acknowledged that
    "all five of those categories are items that can exist statewide along the [railway's]
    line." The district court recognized that "many towns have propane tanks and
    buildings close to railroad tracks, and thousands of miles of track runs [sic] through
    cold climates." The Ninth Circuit has noted that "more than 10,000 miles of track are
    adjacent to waterways in North America," 
    id. at 862,
    and it is fair to assume that a
    significant amount of that track closest to the water runs on swampy soil. Because
    none of the five conditions cited by the district court is unique to Orr, none of them
    standing alone may be considered an essentially local safety hazard.
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    In each relevant case cited by Orr, at least one of the conditions allegedly
    contributing to an essentially local safety hazard was unique to the locale. In In the
    Matter of the Speed Limit for the Union Pac. R.R. through the City of Shakopee, 
    610 N.W.2d 677
    (Minn. Ct. App. 2000), there was a "truly distinguishing characteristic
    of a track that runs between opposing lanes of traffic down the middle of a downtown
    street," aggravated by other "common, hazardous" factors. 
    Id. at 686
    (emphasis
    added). Moreover, there was evidence in the Shakopee record that the segment of
    track to which the regulation applied was "the only place in Minnesota exhibiting this
    unique combination of factors." 
    Id. at 685.
    In Monongahela Connecting R.R. Co. v.
    Pa. Pub. Util. Comm'n, 
    404 A.2d 1376
    , 1380 (Pa. Cmwlth. 1979), the court noted that
    a state order directing a railroad to install a special signal at the approaches of a blind
    curve “relates to no other section of railroad track in the Commonwealth. It is purely
    local and is designed to reduce or eliminate a purely local safety hazard.” And in
    Stone v. CSX Transp., Inc., 
    37 F. Supp. 2d 789
    , 796 (S.D. W.Va. 1999), the allegation
    at issue, that a grade crossing signal on the only road out of town had experienced
    repeated false activations, could if proven amount to a "local safety hazard." Without
    proof of repeated false activations at this grade crossing, the combination of “the
    terrain, the sight lines, and the limited access [to town]” would not constitute a truly
    unique condition. 
    Id. It is
    undisputed in this case that not one of the five cited conditions is unique
    to Orr. Although Orr’s expert opined that "while any one of these issues may be
    found somewhere else, the magnitude of combining all of them in this small area that
    is impacted by the railroad is what makes this an essentially local safety hazard," the
    evidence in the record does not support a conclusion that this combination of
    conditions could not exist in other places in the state or elsewhere in the country. We
    conclude that the situation in Orr is not fundamentally local.
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    In order to show that the situation in Orr is an "essentially local safety hazard"
    the city must also establish that the local conditions it cites are not capable of being
    addressed by the national track safety standards. The national track safety standards
    explicitly address myriad railroad safety concerns including soil conditions, 49 C.F.R.
    § 213.103 (track must be supported by material which adequately transmits loads,
    restrains track under stress, and provides drainage). The standards also deal with
    conditions such as nearby buildings, objects, and bodies of water by excluding them
    from consideration in setting maximum speeds for various classes of track:
    FRA's current regulations governing train speed do not afford any
    adjustment of train speeds in urban settings or at grade crossings. This
    omission is intentional. FRA believes that locally established speed
    limits may result in hundreds of individual speed restrictions along a
    train's route, increasing safety hazards and causing train delays. The
    safest train maintains a steady speed.
    Federal Railroad Administration, Track Safety Standards, 63 Fed. Reg. 33992, 33999
    (1998).
    It is undisputed that each condition cited by Orr has been or could be adequately
    addressed within the national track safety standards, for its own expert acknowledged
    that all five conditions "are things that the FRA can consider when enacting
    regulations." The FRA cannot be required to address every conceivable combination
    of conditions which are individually encompassed within the standards. See, e.g.,
    Union 
    Pac., 346 F.3d at 862
    (not essentially local safety hazard because a "steep
    grade/sharp curve combination can be adequately addressed by national standards").
    We conclude that because each particular condition cited by the district court is
    capable of being covered by the national track safety standards, the combination of
    these conditions is also.
    -8-
    The Act and regulations are intended to avoid a patchwork of individual speed
    restrictions along a track. The district court erred in concluding that the conditions in
    Orr amount to an essentially local safety hazard, for there is no evidence that these
    conditions amount to a hazard "which is not statewide in character and not capable of
    being adequately encompassed within national uniform standards," whether analyzed
    separately or in combination.1
    Since the special law does not meet the first of the three requirements to come
    within the § 20106 savings clause, we conclude that it is preempted by 49 C.F.R. §
    213.9(a). This conclusion is consistent with attempts by Congress and the Secretary
    to regulate train speed at the federal level and to give railroads authority to decide
    these operational issues. Congress passed the Act as a response to an unsafe railroad
    environment which had resulted in part from regulatory variations from state to state.
    1970 U.S.C.C.A.N. at 4109 ("The Committee does not believe that safety in the
    Nation's railroads would be advanced sufficiently by subjecting the national rail
    system to a variety of enforcement in 50 different judicial and administrative
    systems.").
    For these reasons we reverse the judgment of the district court and remand for
    entry of judgment in favor of the railway.
    _____________________________
    1
    We have found no case other than Shakopee in which a court has held that a
    citywide speed limit addresses an essentially local safety hazard. The other cases
    upholding state regulations on train speed have addressed dangers specific to
    particular crossings. Some courts have concluded that an entire city cannot amount
    to an "essentially local safety hazard" and therefore held that citywide speed limits are
    preempted because they fail the first requirement of the savings clause. See Landrum
    v. Norfolk S. Corp., 
    836 F. Supp. 373
    , 375 (S.D. Miss. 1993); Santini v. Consol. Rail
    Corp., 
    505 N.E.2d 832
    , 838 (Ind. App. 1987).
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