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Del Grosso v. Surface Transportation Board

United States Court of Appeals, First Circuit

October 16, 2015

DIANA DEL GROSSO; RAY SMITH; JOSEPH HATCH; CHERYL HATCH; KATHLEEN KELLEY; ANDREW WILKLUND; RICHARD KOSIBA, Petitioners,
v.
SURFACE TRANSPORTATION BOARD; UNITED STATES, Respondents, GRAFTON & UPTON RAILROAD COMPANY, Intervenor

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PETITION FOR REVIEW OF A FINAL ORDER OF THE SURFACE TRANSPORTATION BOARD.

Mark Bobrowski, with whom Blatman, Bobrowski & Mead LLC was on brief, for petitioners.

Erik G. Light, Attorney, Surface Transportation Board, with whom William J. Baer, Assistant Attorney General, Robert B. Nicholson and Shana Marie Wallace, Attorneys, Department of Justice, Craig M. Keats, General Counsel, and Evelyn G. Kitay, Deputy General Counsel, were on brief, for respondents.

James E. Howard, with whom John A. Mavricos, Jonah M. Temple, Christopher, Hays, Wojcik & Mavricos LLP, Linda J. Morgan, and Nossaman, LLP, were on brief, for intervenor.

Before Torruella, Selya, and Dyk,[*] Circuit Judges.

OPINION

Page 113

DYK, Circuit Judge.

Diana del Grosso, et al. (" petitioners" ) petitioned the Surface Transportation Board (" Board" ) for a declaratory order that state and local regulations of a facility owned by Grafton & Upton Railroad Company (" G& U" ) were not preempted by the Interstate Commerce Commission Termination Act (" ICCTA" ), Pub L. No. 104-88, 109 Stat. 803. The Board held that state and local regulations were preempted because the facility was part of " transportation by rail carrier." 49 U.S.C. § 10501(a)(1). We affirm the Board's decision that the facility was operated by a " rail carrier." But because the Board relied on an erroneous standard in concluding that the activities at the facility were a part of " transportation," we vacate and remand.

I.

Under the ICCTA, the Board has jurisdiction over " transportation by rail carrier." Id. Where the Board has such

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jurisdiction, it is exclusive. Whether or not the Board is exercising its regulatory authority over the transportation, state and local[1] laws governing such transportation are generally preempted. See id. § 10501(b) (" [T]he remedies provided under this part with respect to regulation of rail transportation are exclusive and preempt the remedies provided under Federal or State law." ); Norfolk S. Ry. Co. v. City of Alexandria, 608 F.3d 150, 157 (4th Cir. 2010); Green Mountain R.R. Corp. v. Vermont, 404 F.3d 638, 642 (2d Cir. 2005); City of Auburn v. U.S. Gov't, 154 F.3d 1025, 1030 (9th Cir. 1998); see also Borough of Riverdale -- Petition for Declaratory Order, STB Finance Docket No. 33466, 1999 WL 715272, at *4 (S.T.B. Sept. 9, 1999) (preemption even where rail construction project outside Board's regulatory authority). Such preemption is not limited to state and local economic regulation of rail transportation. See N.Y. Susquehanna & W. Ry. Corp. v. Jackson, 500 F.3d 238, 252 (3d Cir. 2007); Green Mountain, 404 F.3d at 644-45; City of Auburn, 154 F.3d at 1031. But see Fla. E. Coast Ry. Co. v. City of W. Palm Beach, 266 F.3d 1324, 1337-39 (11th Cir. 2001).

In order for an activity to count as " transportation by rail carrier," it has to be both " transportation" and operated by a " rail carrier." Tex. Cent. Bus. Lines Corp. v. City of Midlothian, 669 F.3d 525, 530 (5th Cir. 2012). " Transportation" is a broad category that includes any " property, facility, instrumentality, or equipment" connected to " movement . . . by rail," as well as various " services related to that movement." 49 U.S.C. § 10102(9)(A)-(B). Whether an activity is conducted by a " rail carrier" is a case-by-case factual determination based on, inter alia, how much control a rail carrier is exercising over the activity. See Tex. Cent., 669 F.3d at 530-31 (internal quotation marks, citations omitted). The Board routinely grants declaratory orders as to whether particular activities are preempted, but the ICCTA does not delegate to the Board the determination of whether state and local law is preempted. See 49 U.S.C. § 10501(b).

II.

Here, G& U is a licensed rail carrier that began operations in 1873. It owns a railroad line that extends from North Grafton, Massachusetts, to Milford, Massachusetts. Upton is a town located between Grafton and Milford. In 2008, G& U decided to expand its rail yard in Upton and develop it into a rail-to-truck transloading facility. As a part of that plan, G& U undertook to build a wood pellet facility that would receive wood pellets in bulk from hopper railcars and transfer them, after some processing and bagging, onto trucks. G& U also entered into a Terminal Transloading Agreement with Grafton Upton Railcare LLC (" GU Railcare" ), a part of Dana Companies, a group of companies with ...


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