Case Title: 25 Residents of Sevier County v. Arkansas Highway and Transp. Comm'n

Citation: 

Docket Number: 

State: arkansas

Court: Arkansas Supreme Court

Date: 1997-10-30T00:00:00Z

Document:
25 RESIDENTS of Sevier County and the United
Transportation Union v. ARKANSAS HIGHWAY and
TRANSPORTATION COMMISSION

97-340                                             ___ S.W.2d ___

                    Supreme Court of Arkansas
               Opinion delivered October 30, 1997


1.   Railroads -- state law preempted by federal law -- three
     examples. -- Preemption of state law by federal law may occur
     as follows:  (1) express preemption, where Congress defines
     explicitly the extent to which its enactments preempt state
     law; (2) field preemption, where Congress's regulation of a
     field is so pervasive or the federal interest so dominant that
     an intent to occupy the entire field can be inferred, and (3)
     conflict preemption, where state law stands as an obstacle to
     the accomplishment of the full purposes and objectives of a
     federal statute. 

2.   Statutes -- preemption analysis -- principle that guides state
     review. -- In any preemption analysis, the overriding
     principle that must guide state review is whether Congress
     intended to preempt state law; this analysis depends primarily
     on statutory and not constitutional interpretation.

3.   Railroads -- preemption analysis -- Congress clearly intended
     act to cover transportation by rail carriers and
     discontinuation of their carriers' related facilities. -- The
     Interstate Commerce Commission Termination Act of 1995,
     Section 10501(b)(1), in establishing the parameters of the
     Surface Transportation Board's jurisdiction, clearly covers
     "transportation by rail carriers" and the discontinuation of
     their carriers' related facilities.  

4.   Railroads -- station agencies -- considered related facilities
     within meaning of federal act -- state law on railroad agency
     discontinuations expressly preempted. -- Where Arkansas courts
     had not yet addressed the issue, the supreme court looked to
     three recent cases from other jurisdictions and their holdings
     that station agencies are related "facilities" within the
     meaning of the ICC Termination Act and that, by the federal
     act, Congress expressly preempted state law on railroad-agency
     discontinuations, and further that state law was preempted by
     virtue of both field and conflict preemption. 

5.   Railroads -- Congress intended to preempt state's authority to
     engage in economic regulation of rail carriers -- Ark. Code
     Ann.  23-2-611 preempted by ICC Termination Act of 1995. --
     Given the broad language of the Act itself, its statutory
     framework, and considering the recent decisions interpreting
     the act, the supreme court found it clear that Congress
     intended to preempt the states' authority to engage in
     economic regulation of rail carriers; the preemptive strike
     includes regulation of agency station discontinuations;
     accordingly, Ark. Code Ann.  23-2-611 (1987), which gives the
     Arkansas Highway and Transportation Commission the authority
     to regulate such closings, is preempted by the ICC Termination
     Act of 1995.

6.   Commerce -- interstate commerce -- power of Congress to
     regulate. -- The Supreme Court has held that Congress may
     regulate (1) the use of channels of interstate commerce, (2)
     the instrumentalities of interstate commerce, or persons or
     things in interstate commerce, even though the threat may come
     only from intrastate activities, and (3) activities having a
     substantial relation to interstate commerce; Congress's
     authority to regulate extends even to intrastate aspects of
     the operation of railroads; Congress has the power to regulate
     railroad boxcars traveling exclusively intrastate because of
     their inherent mobility and connection to interstate commerce.
     
7.   Commerce -- Congress's authority to regulate intrastate
     aspects of railroads clear -- preemptive effect of act does
     not violate Congress's power to regulate railroad agency
     station discontinuations -- dismissal of petition for lack of
     jurisdiction affirmed. -- Congress's authority to regulate
     even intrastate aspects of railroads under the Commerce Clause
     is not undercut by recent United States Supreme Court
     decisions; when complete regulation of interstate commerce
     requires incidental regulation of intrastate commerce, the
     Commerce Clause authorizes such regulation; Congress's
     regulation of intrastate railroad agencies under the Act is
     part of a larger regulation of economic activity, in which the
     regulatory scheme would be undercut unless the intrastate
     activity were regulated; therefore, the preemptive effect of
     the Act does not violate Congress's power to regulate
     railroad-agency station discontinuations; the dismissal of the
     residents' petition by the Pulaski County Circuit Court for
     lack of jurisdiction due to preemption was affirmed.


     Appeal from Pulaski Circuit Court; Morris Thompson, Judge;
affirmed.
     Youngdahl, Sadin, Morgan & McGowan, by:  Thomas H. McGowam and
Nga Ostoja-Starzewski, for appellant.
     Robert Wilson, Chief Counsel and Tom G. Lorenzo, for appellee
Arkansas State Highway & Transp. Comm'n.
     Friday, Eldredge & Clark, by:  John Dewey Watson and Allison
Graves, for appellee DeQueen & Eastern R.R.

     Tom Glaze, Justice.
     On January 26, 1996, pursuant to Ark. Code Ann.  23-12-611
(1987), the DeQueen and Eastern Railroad (Railroad) filed an
application to discontinue its agency station in Dierks, Arkansas. 
The Railroad operates as a rail carrier that transports goods,
property, and raw materials in interstate and intrastate commerce. 
By discontinuing the Dierks agency station, the Railroad intended
to consolidate that station with the agency operation in nearby
DeQueen, Arkansas.  Notice of the proposed discontinuation was
filed with the Arkansas Highway and Transportation (AHT)
Commission, and it provided the discontinuation would be effective
in ninety days. 
     Twenty-five registered voters, who were residents of Dierks,
petitioned the AHT Commission, asking it to reestablish the agency
station operation.  See  23-12-611(b).  The Commission set a
hearing on the matter for May 21, 1996, but the hearing was
postponed so that the respective parties could brief the following
question:
     Whether the federal Interstate Commerce Commission (ICC)
     Termination Act of 1995 preempts state jurisdiction of
     the discontinuation of railroad agency stations?
See 49 U.S.C.  10101 (1994) et seq.  On June 4, 1996, the
Commission entered its report and order concluding that it no
longer had jurisdiction over the matter, because the ICC
Termination Act, specifically  10501, granted the Federal Surface
Transportation Board the exclusive jurisdiction over
"transportation by rail carriers" as part of the interstate rail
network.  The Commission's decision resulted in its dismissing the
residents' petition.  
     Next, the residents appealed the Commission's decision to the
Pulaski County Circuit Court, and the court affirmed the holding of
the Commission.  The residents then filed this appeal, and assign
two points of error by the circuit court.  First, the residents
argue that the federal act does not preempt  23-12-611, and the
AHT Commission retains jurisdiction over agency station closings in
the state.  Second, the residents contend that Congress's enactment
of the ICC Termination Act violates the Commerce Clause.  Only
these two questions of law need be addressed to decide this appeal.
     In their first point of error, the residents claim that state
law is preempted only when it conflicts with federal law, and no
conflict is shown to exist in the federal and state laws here.  The
residents further argue that the federal act not only lacks
specific language requiring preemption, but also that the state has
long regulated the discontinuation of agency stations under state
authority and should continue to do so.  The Railroad counters by
declaring preemption of  23-12-611 has been effected by passage of
the 1995 ICC Termination Act, and submits such preemption was
accomplished in the three ways the Supreme Court sanctioned in
English v. General Electric Co.,