Case Title: Amelia Smith v B N Santa Fe Rai

Citation: 2008 MT 225

Docket Number: 46f42134-6987-48b8-8ac7-f80bb57cd1a6

State: montana

Court: Montana Supreme Court

Date: 2008-06-20T00:00:00Z

Document:
FILED
une 202008
DA 06-0649
IN THE SUPREME COURT OF THE STATE OF MONTANA,
2008 MT 225

AMELIA M. SMITH by and through her mother and
next friend SAMANTHA R. REINERT, conservator
‘and personal representative ofthe estate of PHILLIP
DAVID SMITH, deceased,

Plaintiff and Appellant,
‘THE BURLINGTON NORTHERN AND SANTA FE

RAILWAY COMPANY, DON BOESPFLLUG.
‘and LANCE VALLONE,

 

Defendants and Appellees.

APPEAL FROM: District Court ofthe Thirteenth Judicial District,
In and For the County of Yellowstone, Cause No. DV 2004-888
Honorable Russell C. Fagg, Presiding Judge

  

‘COUNSEL OF RECORD:
For Appellant:

A. Clifford Edwards, Triel D. Culver, John Heenan, Edwards, Frickle,
‘Anner-Hughes & Culver, Billings, Montana

For Appellee:
Randy J. Cox, Matthew B. Hayhurst, Boone Karlberg, P.C., Missoula,
Montana

Submitted on Briefs: October 31, 2007
Decided: June 20, 2008

~ A
 

Justice Patricia O. Cotter delivered the Opinion of the Court.

1 Amelia Smith appeals a decision of the Thirteenth Judic

 

1 District Court granting
Burlington Northern and Santa Fe Railway Company's (BNSF) motion for partial
summary judgment. We reverse the grant of summary judgment and remand for further
proceedings consistent with this Opinion

FACTUAL AND PROCEDURAL BACKGROUND

2 On June 13, 2002, a twent

 

ix-yearold man named Phillip Smith was killed
when his automobile collided with a BNSF train at the Hesper railroad crossing outside
‘of Billings, Montana. On August 25, 2004, his daughter, appellant Amelia Smith
(Smith), filed a wrongful death and survival action against BNSF in the District Court of
the Thirteenth Judicial District, Yellowstone County. Smith's suit sought compensatory
and punitive damages based on BNSF’s alleged negligence in the maintenance of the
Hesper crossing and its negligent operation of the train involved in the collision. A
significant portion of Smith's claims revolved around allegations that BNSF was
negligent in the instalation of warming devices at the Hesper crossing which would
adequately protect people who were traveling along the highway.

{8 On April 26, 2006, BNSF moved for partial summary judgment seeking an order
that Smith's state law claims concerning the adequacy of the waming devices at the
Hesper crossing were preempted by federal law in accordance with Norfolk Southern Ry.
Co. v. Shanklin, $29 U.S. 344, 120 8, Ct. 1467 (2000). In that case, the United States
Supreme Court held that when federal funds are used to install waming devices at

railroad crossings, the Federal Railway Safety Act of 1970 (FRSA), Pub. L. No. 91-458,
£84 Stat. 971 (1970), preempts state law tort claims. Shanklin, 529 U.S. at 357, 120 8. Ct
at 1476, It was BNSF's contention that federal funds had been used to upgrade the
‘Hesper crossing under project RRP 4139, a joint statewide project between the Montana
Department of Transportation (MDOT) and the Federal Highway Administration
(FHWA) under the Federal Rail-Highway Crossings Program (Crossings Program).
Project RRP 4139 was designed to replace existing crossbucks at designated railway

crossings with double reflectorized crossbucks—ic., erossbucks with reflective mater

 

‘on the back and front of both the erossbucks—in accordance with the standards set forth
in the Manual on Uniform Traffic Control Devices. BNSF maintained that double
reflectorized erossbucks had been installed at Hesper crossing under project RRP 4139,
and thus Smith's state law tort claims were preempted by federal law as set forth in
‘Shanklin.

{4 The District Court held a hearing on the motion on July 21, and granted partial
summary judgment to BNSF on August 3, 2006. ‘The District Court found that those

state law tort claims which were premised upon the adequacy of the warming devices at

 

Hesper crossing were federally preempted under Shanklin because: (1) the federal

 

‘government had approved a project to install warning devices at several hundred railroad
crossings in Montana; (2) these improvements were actually completed; and (3) federal
funds were actually used to complete these projects, including the installation of double
reflectorized crossbucks at the Hesper crossing. Although Smith had alleged some state
aw claims which were unaffected by this ruling, the grant of partial summary judgment

effectively disposed of a huge portion of Smith's case against BNSF. Therefore, on
‘August 14, 2006, the District Court certified its ruling on the federal preemption issue as

  

4 final judgment pursuant to M. R, Civ. P. $4(b)
{8 A notice of appeal was filed with this Court on August 26, 2006. On August 8,
2007, after the case was fully briefed, Smith petitioned this Court for leave to file
supplemental briefs. Smith argued that Section 1528 of the “Implementing
Recommendations of the 9/11 Commission Act of 2007” (9/11 Act), Pub. L, No. 110-53,
121 Stat. 266 (2007), signed into law by President Bush on August 3, 2007, essentially
rendered moot the Shanklin preemption analysis upon which the District Court based its

decision to grant partial summary judgment. Smith asked us to reexamine the continued

 

bility of the Shanklin preemption analysis, and, consequently, the legal basis for the
District Court's grant of summary judgment. We granted Smith's motion, allowing
BNSF and Smith to simultancously file supplemental briefs “directed solely to the
ramification of the [9/11] Act upon this case.”

46 Both parties have filed supplemental briefs on this issue, and the matter is now

 

properly before this Court.
ISSUES

{7 We state the issues on appeal as follows:
8 Issue One: Does Section 1528 of the 9/11 Act overrule the federal preemption
‘analysis from Norfolk Southern Ry. Co. v. Shanklin’?
{9 Issue Two: Did the District Court ere when it granted partial summary judgment
toBNSF?

STANDARD OF REVIEW
 

$10 We review de novo a district court’s grant of summary judgment, using the same
standards applied by the district court under M. R. Civ. P. 56. Rich v. Ellingson, 2007
MT 346, 4 12, 340 Mont. 285, 4 12, 174 P.3d 491, 12. The moving party has the
‘burden of establishing the absence of genuine issue of material fact, and entitlement to
judgment asa matter of law. Rich, 12. Once the moving party has met this burden, the

non-moving party must present substantial evidence essential to one or more elements of

 

the case to raise a genuine issue of material fact. Rich, § 12. “The non-moving party
‘must set forth specific facts and cannot simply rely upon their pleadings, nor upon
speculative, fanciful, or conclusory statements.” Hiebert v. Cascade Co., 2002 MT 233,
421, 311 Mont. 471, $21, 56 P.3d 848, § 21 (quotation omitted).
11 We review the conclusions of law upon which the district court bases its decision
to determine if they are correct. Rich, 12.

DISCUSSION

mw

 

ue One: Does Section 1528 of the 9/11 Act overrule the federal preemption
‘analysis from Norfolk Southern Ry. Co. v. Shanklin?

13 _ In Shankiin the Supreme Court held that “[w]hen the FHWA approves a crossing
improvement project and the State installs the warning devices using federal funds

[federal law] establish{es] a federal standard for the adequacy of those devices that
displaces state tort law addressing the same subject . . . [and] pre-empts state tort
actions.” Shanklin, $29 U.S. at 357-58, 120 S. Ct. at 1476. In addition to the preemptive
force of the Supremacy Clause to the U.S Constitution, U.S. Const, Art, 1V. cl. 2, the

‘Shanklin decision rested on two statutory grounds: (1) the “preemption clause” of FRSA,
49 U.S.C. § 20106 (1994); and (2) regulations promulgated by the FHWA under the
authority of the Secretary of Transportation—found at 23 C.F.R. § 646,214(b)(3) and (4)
(1999)—concerning the design and adequacy of railway crossing waming devices
installed under the Crossings Program. Shanklin, $29 US. at 347-49, 120 S. Ct. at
1471-72,

{14 Section 1528 of the 9/11 Act amended the preemption clause of FRSA upon which
the holding in Shanklin was premised. From the time Shanklin was decided in 2000 until
the passage of the 9/11 Act in 2007, the FRSA preemption clause read as follows:

{§ 20106 National uniformity of regula

 

‘Laws, regulations, and orders related to railroad safety shall be nationally
uniform to the extent practicable. A State may adopt or continue in force &
law, regulation, or order related to railroad safety until the Secretary of
‘Transportation prescribes a regulation or issues an order covering the
subject matter of the State requirement. A State may adopt or continue in
force an additional or more stringent law, regulation, or order related to
railroad safety when the law, regulation, or order~

(1) is necessary to eliminate or reduce an essentially local safety hazard;

(2) is not incompatible with a law, regulation, or order of the United States

 

(3) does not unreasonably burden interstate commerce.
49 US.C. § 20106 (1994).

IS Section 1528 of the 9/11 Act (Section 1528) renumbered, but did not substantively

 

alter, the original preemption clause, After the passage of Section 1528, the FRSA
preemption clause reads as follows:

{§ 20106 Preemption.

(a) National uniformity of regulation.—(1) Laws, regulations, and orders

related to railroad safety and laws, regulations, and orders related to
railroad security shall be nationally uniform to the extent practicable.
(2) A State may adopt or continue in force a law, regulation, or order
related to railroad safety or security until the Secretary of Transportation
(with respect to railroad safety matters), or the Secretary of Homeland
Security (with respect to railroad security matters), prescribes a regulation
or issues an order covering the subject matter of the State requirement. A
State may adopt or continue in force an additional or more stringent law,
regulation, or order related to railroad safety or security when the law,
regulation, or order--

(A) is necessary to climinate 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

(©) does not unreasonably burden interstate commerce,

49 US.C.A. § 20106(a) (West Supp. 2007).
{16 Section 1528 did, however, add an additional subsection to the FRSA preemption
clause which clarifies its scope.

(b) Clarification regarding State law causes of action.—-(1) Nothing in
this section shall be construed to preempt an action under State law
seeking damages for personal injury, death, or property damage alleging
that a party-~

(A) has failed to comply with the Federal standard of care established by a
regulation or order issued by the Secretary of Transportation (with respect,
to railroad safety matters), or the Secretary of Homeland Security (with
respect to railroad security matters), covering the subject matter as
provided in subsection (a) of this section

{(B) has failed to comply with its own plan, rule, or standard that it created
pursuant to a regulation or order issued by either of the Secretaries; or

(C) has failed to comply with a State law, regulation, of order that is not
incompatible with subsection (a)2).

{@) This subsection shall apply to all pending State law causes of action
arising from events or activities occurring on or after January 18, 2002,

 

49 U.S.C.A. § 20106(b)(1) and (2) (West Supp. 2007).
{17 In her supplemental brief, Smith argues that the Section 1528 amendments to

FRSA demonstrate that “Congress has spoken clearly and unambiguously, against federal
preemption of claims like Smith’s under the (FRSA].” Smith asserts that § 20106(b) is in
essence an “anti-preemption clause” and “sends a loud and clear message that 49 U.S.C.
{§ 20106 in no way preempt state common law claims such as Amelia Smith's state court
action.”
{8 BNSF maintains Section 1528 does not effect a substantive change to the
‘preemption clause, but instead simply clarifies the scope of FRSA’s preemption clause,
More importantly, BNSF points out that subsection (bX(1X(C) of the clarifying
‘amendment specifically states that a state claim survives only if it is “not incompatible
with subsection (a)(2).” 49 U.S.C.A. § 20106(b\(1)(C) (West Supp. 2007). BNSF
‘maintains that subsection (a)(2) refers directly back to the original preemption clause
which was analyzed in Shanklin, meaning that unless one of the local hazard exceptions
to preemption from subsections (a)(2\(A), (B), or (C) apply, the original FRSA
preemption analysis from Shanklin remains in force.

{19 As further support of its argument that Section 1528 did not overrule the Shanklin
‘preemption analysis, BNSF points to the House of Representatives Conference Report on
Section 1528 which specifically states that the Section 1528 amendment was passed “to
rectify the federal court decisions related to the Minot, North Dakota accident that are in
‘conflict with precedent.” H.R. Conf, Rpt, 110-259 at 351 (July 25, 2007) (reprinted in
153 Cong. Rec. H8589-90 (daily ed. July 25, 2007)). The Minot accident was an incident
where a train derailment near Minot, North Dakota released a cloud of anhydrous
ammonia which allegedly caused multiple personal injuries and incidents of property

damage. Claims brought against the Canadian Pacific Railway Company by the affected
 

individuals were dismissed by federal district courts on the grounds that they were
federally preempted under Shanklin. See e.g, Mehl v. Canadian Pacific Ry. Ltd, 417
F, Supp. 2d 1104 (D.N.D. 2006); Lundeen v. Canadian Pacific Ry. Co., $07 F. Supp. 24
1006 (D. Minn, 2007). The claimants in Meh! and Lundeen alleged that Canadian Pacific
hhad breached a federal standard of care, Mehl, 417 F. Supp. 2d at 1116, and its own
internal procedures, Lundeen, 507 F. Supp. 2d at 1013, ultimately leading to the
derailment. However, the federal district courts in each case found that these claims were
preempted under the FRSA preemption clause. ‘The Section 1528 amendments to FRSA

remedied these situations by limiting its preemptive effect in cases where the claimant

 

alleges the defendant breached a federal standard of care or its own operating procedures.
49 US.CA. § 201060(b\11)(A) and (B) (West Supp. 2007).

{20 In light of the fact that the Conference Report explicitly states that Section 1528
‘was aimed at overruling these federal court decisions, BNSF argues it makes litle sense
to maintain that Congress also meant to overrule Shanklin but yet somehow failed to
‘mention it, especially given the fact that Shanklin is a landmark decision that has been
followed by numerous courts over the years. As further support for its construction of
Section 1528, BNSF points to @ proposed provision to the 9/11 Act by House
Representative Bennie Thompson (D-MS) which would have eliminated federal
preemption of state law claims under FRSA “unless compliance with State law would
‘make compliance with Federal requirements impossible.” H.R. 1401, 110th Cong. § 3(a)
(March 28, 2007). As BNSF notes, the Thompson proposal was rejected by the Senate

and President Bush in the final version of the 9/11 Act, thus lending further support to its
view that Congress did not overrule the Shanklin preemption analysis in enacting Section
1528,

I__ In order to demonstrate that Section 1528 has overruled the preemption analysis
from Shanklin, Smith has the burden of proving that Congress intended this change when
it passed Section 1528. Green v. Bock Laundry Mach. Co., 490 U.S. 504, 521, 109 8. Ct.

1981, 1991 (1989); Tome v. United States, 513 U.S. 180, 163, 115 8. Ct. 696, 704 (1995).

 

Smith, however, has failed to meet this burden.
{22 The starting point for statutory interpretation is the plain language of the statute
itself. United States v. Hanowsek, 176 F.3d 1116, 1120 (9th Cir. 1999); Sturchio v.
Wausau Underwriters Ins. Co., 2007 MT 311, 10, 340 Mont. 141, § 10, 172 P.3d 1260,

10. In this ease, the plain language of S.

 

jion 1528 supports BNSF’s construction of
the statute, Because Smith's claims allege BNSF violated state tort law, and not a federal

standard of care or its own plan, rule or standard, the exceptions listed in subsections

 

(b\(1(A) ot (B) do not apply to her claims (see $16); thus, Smith's state law claims will

survive federal preemption only if they are “not incompatible with subsection (a)(2)." 49

  

US.CA. § 20106(b)(1)(C) (West Supp. 2007). Subsection (a)(2), however, makes clear
that if @ federal law, regulation, or order has been adopted by the Secretary of
‘Transportation, then a state law or standard respecting that subject matter is preempted.
49 US.C.A, § 20106(a\2) (West Supp. 2007). Federal regulations concerning the design
and adequacy of railway crossing waming devices have been promulgated by the FHWA,

Which acts under the authority of the Secretary of Transportation. See 4 13. Thus,

10
‘Smith's claims will be preempted under Section 1528 provided the criteria discussed in
‘Shanklin have been satisfied.
423 We find BNSF’s supporting arguments which cite to the legislative history of

Section 1528 persuasive as well. The final version of Section 1528 rejected a proposal

 

‘which would have eliminated federal preemption outright unless it made compliance with

federal requirements impossible. See 20. As BNSF notes, Congress is generally

 

presumed “knowledgeable about existing law pertinent to the legislation it enacts ..
Goodyear Atomic Corp. v. Miller, 486 U.S. 174, 184-85, 108 S. Ct. 1704, 1712 (1988).
Moreover, Congress “does not intend sub silentio to enact statutory language that it has
earlier disregarded in favor of other language.” 1LN.S. v. Cardoza-Fonseca, 480 U.S. 421,
442-43, 107 S. Ct. 1207, 1219 (1987) (quotation omitted). The Conference Report to
Section 1528 explicitly states it is enacted to remedy the rulings from the Minot
derailment federal district court cases, and makes no mention of Shanklin, In light of
these facts, Smith's argument that Section 1528 was enacted to overrule Shanklin and its
progeny finds scant support and is contrary to settled law. “The normal rule of statutory
‘construction is that if Congress intends for legislation to change the interpretation of a
judicially created concept, it makes that intent specific.” Midlantic Nat. Bank v. New
Jersey Dept. of Envil. Protec., 474 U.S. 494, S01, 106 S. Ct. 755, 759 (1986) (citing
Edmonds v. Compagnie Generale Transatlantique, 433 U.S. 256, 266-67, 99 S. Ct. 2753,

2759-60 (1979))..

u
 

{24 For these reasons, we hold that Section 1528 of the 9/11 Act did not overrule the
FRSA preemption analysis as announced in Shanklin. ‘Therefore, we now tum to the
‘merits of Smith's original appeal.

{25 Issue Two: Did the District Court err when it ranted partial summary judgment
10 BNSF?

{26 In granting partial summary judgment to BNSF, the District Court found BNSF
offered persuasive evidence demonstrating that federal funds were expended to upgrade
the Hesper crossing, The first piece of evidence relied upon by the District Court was an
affidavit submitted by BNSF in conjunction with its summary judgment motion from
John Althof (Althof), an employee of MDOT who had the responsibility of overseeing
‘and managing railroad improvement programs throughout Montana. Although Althof did
not have personal knowledge that federal funds were expended at the Hesper crossing, he
reviewed a number of documents related to project RRP 4139. Of those documents, only
the following were attached to his affidavit: (1) an agreement between the State and
BNSF dated September 30, 1988 (Agreement), which stated that all public crossings in
‘Montana would receive federal funds for project RRP 4139; (2) an unverified lump sum
estimate for project RRP 4139; and (3) a blank railroad crossing installation form,

{27 Based on his review of various records related to the project, Althof stated in his,
affidavit thatthe State of Montana undertook project RRP 4139 in 1988, which included
the instalation of double reflectorized crossbucks at seven hundred and twenty-three
crossings in the BNSF Montana division of the State of Montana. He further stated that

the federal government approved the use of federal funds for project RRP 4139 through

12
the FHWA. Althof addi

 

ally stated that the Hesper crossing was designated United
‘States Department of Transportation Crossing No. 088451Y, and that BNSF had a bill,
showing that crossing No. 088451Y was included in project RRP 4139. Thus, Althot's
review of the records pertaining to this case led him to conclude that federal funds were
used in the installation of double reflectorized crossbucks at the Hesper crossing. In its
‘order, the District Court noted that this affidavit was very similar to an affidavit cited in
Lee v. Burlington Northern Santa Fe Ry. Co., 245 F.3d 1102 (9th Cir. 2001), where Judge
‘Molloy had found that the Shanklin analysis was satisfied and similar claims preempted.

{28 In addition to the affidavit itself, the District Court found persuasive other
documentary evidence of the RRP 4139 project which BNSF submitted in conjunction
with its summary judgment motion. One piece of evidence, which was attached to
BNSF’s reply brief, was a “Certificate of Completion,” dated May 23, 1991, which stated
that that project RRP 4139 had been inspected and its completion duly verified by state
officials with MDOT. Another piece of evidence, which was originally attached to
BNSF's motion for summary judgment, was a bill from BNSF to the State, dated May 8,
1989, in the amount of $57,327.20, which showed that BNSF billed the State for the
installation of double reflectorized crossbucks at the Hesper crossing, which was

designated at milepost #4.1, with the number 088-451-Y.

 

{29 The District Court also fon an affidavit supplied by BNSF from Verle

Ostrander (Ostrander), a former employee of BNSF who stated he was personally

 

familiar with the railroad grade crossbuck update project undertaken in Montana between

1988 and 1989. Ostrander stated that he also had reviewed the documents related to

1B
Project RRP 4139, as well as the Althof affidavit and a similar affidavit relied upon by
the federal district court in Lee, and concluded that double reflectorized crossbucks were
installed at the Hesper crossing by the use of federal funds.

$30 Lastly, the District Court relied on a deposition taken by Smith of Robert Tholt

(Thott), the MDOT construction supervisor who was one of the persons who had signed

 

the Certificate of Completion in 1991, Tholt stated in his deposition that although he did
not have any specific memory of the Hesper crossing, his staff would have verified all the
documentation related to that project, and that the project at the Hesper crossing would

hhave been properly checked before a Certificate of Completion had been signed and

 

in was also based on a

 

approved by him. Like Althof and Ostrander, Tholt’s deposit
review of documents supplied by BNSF related to the alleged upgrade at the Hesper
crossing under project RRP 4139,

{31 Smith challenges the propriety of the District Court reliance on these affidavits
and supporting exhibits, arguing that they should have been stricken from its

consideration by virtue of M. R. Civ. P. $6(c). For authority on this point, Smith cites to

 

the plain language of M. R. Civ. P. $6(e) and our decisions addressing the evidentiary

requirements of this Rule in Hiebert and Disler v. Ford Motor Credit Co., 2000 MT 304,

 

302 Mont. 391, 15 P.3d 864. In particular, Smith alleges that none of the affiants actually
hhad personal knowledge that federal funds were spent in upgrading the Hesper crossing
and, further, that they did not have personal knowledge sufficient to establish the
genuineness and authenticity of many of the documents which were considered by the

District Court in the summary judgment proceedings. For instance, in Althof's

4
deposition he conceded that he had no personal knowledge that federal funds actually
‘went into the improvements at Hesper crossing. Althof did, however, testify to the

‘genuineness of the Agreement. Si

 

ilarly, while Tholt had signed the Certificate of

 

Completion, upon examination in his deposition he stated that his staff had actually
Prepared the document and he did not have any personal knowledge as to whether the
Project was completed, but rather assumed his staff had properly reviewed all the project
documents. With respect to Ostrander’s affidavit, Smith argues in the first instance that it
‘was improperly considered by the District Court because this affidavit was first presented

in BNSF's reply brief to the partial summary judgment motion and Smith was never

 

fen an opportunity to depose him. Additionally, Smith points out that nowhere in his

 

affidavit does Ostrander state that he had personal knowledge that federal funds were
used at the Hesper crossing. More importantly, however, Smith maintains that these
affiants lacked the requisite personal knowledge which would allow them to testify to the
‘genuineness and contents of the documents upon which they relied in making their sworn
tatements as required under M. R. Civ. P. $6(e) and Hiebert.
{32 Thus, Smith argues, because these affidavits and supporting exhibits were not
based on the personal knowledge of any of the affiants as required under M. R. Civ. P.
56(@), they were improperly considered by the District Court. Smith maintains that under
Duncan v. Kansas City $, Ry. Co., 773 $0.24 670 (La. 2000), Mo. Pacific RR. Co. v.
Limmer, 180 $.W.3d 803 (Tex. App. 14 Dist. 2005), and Bonacorsi v. Wheeling & Lake

Brie Ry. Co., 767 N.E.24 707 (Ohio 2002), BNSF was required to “conclusively prove”

 

led to meet this

 

‘that federal funds were used to upgrade the Hesper crossing, but has

15
evidentiary burden under M. R. Civ, P. 56(e) and thus is not entitled to summary
Judgment,

{3 Additionally, Smith argues that genuine issues of material fact regarding the use of
federal funds at the Hesper crossing exist in this case which preclude the District Court

from granting summary judgment to BNSF. For instance, Smith points out that under the

 

terms of the Certificate of Completion, there shall be submitted an “Exhibit C” showing
that the particular crossing was actually upgraded. In this case, BNSF was unable to
provide an Exhibit C for the Hesper crossing. Moreover, Smith contacted officials from
MDOT to inquire whether the State ever actually paid BNSF for work done at the Hesper
crossing under RRP 4139, or whether the State had any actual knowledge as to when
such double reflectorized crossbucks were installed. MDOT, however, did not have in its
records definitive answer to this question. Lastly, Smith maintains that an affidavit it
submitted from a Ms. Ema Love, a longtime resident of the area around Hesper crossing,
created a genuine issue of material fact because she stated that crossbucks had been at the
Hesper crossing since 1975.

‘G4 Accordingly, Smith argues that the District Court erred in granting partial
‘summary judgment to BNSF because BNSF did not comply with the requirements of
MR. Civ. P, $6(¢), and failed to demonstrate a complete absence of any genuine issue of
material fact with regard to whether federal funds were actually expended to instal
double reflectorized crossbucks at the Hesper crossing. Smith argues tha, at a minimum,
BNSF should be required to prove to a jury that federal funds were expended at the

Hesper crossing improvements, thus triggering federal law preemption under Shanklin,

16
and maintains that a grant of pan

 

summary judgment on this issue was error.
‘Accordingly, Smith asks us to reverse the grant of partial summary judgment and remand
‘he case for futher proceedings. Further, Smith requests that we hold that BNSF has
failed as matter of law on its federal preemption argument, and that this defense be
stricken, thereby allowing Smith to pursue her state law claims against BNSF.

‘BS BNSF urges us to affirm the District Court. BNSF maintains it presented
Sulicient evidence to prove that federal funds were used at the Hesper crossing through
Project RRP 4139, thus triggering preemption under Shanklin. BNSF points o/a number
‘cases where courts have found that federal preemption under Shanklin was triggered
when @ party presented evidence that federal funding was approved in a state-wide
Project, and that a particular crossing was included in that project. E-g., O'Bannon v,
Union Pacific R.R. Co., 169 F.3d 1088 (8th Cir. 1999); MeDaniel v. Southern Pacific
Transp., 932 F. Supp. 163 (N.D. Tex. 1995); Hargrove v. Missouri Pacific RR. Co.,925
So.2d 25 (La. App. 3 Cir. 2006); Wagoner v. CSX Transp, Inc., 246 F. Supp. 2d 1002
(N.D. Ind, 2003); Security First Bank v. Burlington Northern and Santa Fe Ry. Co.,213
F, Supp. 24 1087 (D. Neb. 2002); Lee, 245 F.3d 1102. BNSF further asserts that the
District Court was correct to refuse to impose a special evidentiary requirement by
requiring BNSF to “conclusively prove” that federal funds were actually spent at Hesper
crossing. BNSF argues that such an evidentiary ruling would be at odds with other courts
that have analyzed federal preemption on summary judgment motions under Shanklin,

such a8 O'Bannon and Wagoner. In this regard, BNSF argues that Limmer and Duncan

 

are inapposite. BNSF also argues that imposing a higher evidentiary burden on its

"7
 

federal preemption defense would impermissibly defeat the federal policy of preemption
fs expressed in FRSA, and cites to Davis v. Wechsler, 263 U.S. 22, 44 8. Ct 13 (1923),
‘and Brown v. Western Ry. Of Al, 338 US. 294, 70 S. Ct. 105 (1950) in support of this,
position.

{36 BNSF maintains that by virtue of the affidavits and the documentary exhibits
attached thereto, it has met its burden under M. R. Civ. P, $6 and established that federal
funds were used to install double reflectorized crossbucks at Hesper crossing. Moreover,
BNSF argues that because Althof's testimony was based on matters within the scope of
his duties as MDOT manager of grade crossings improvements, it should be considered
based on his personal knowledge under Barthelemy v. Air Line Pilots Assn., 897 F.2d 999
(Sth Cit. 1990), and that the District Court did not abuse its discretion in considering his,

affida

 

in support of BNSF’s summary judgment motion. Similarly, BNSF objects to
‘Smith's suggestion that the state and business records attached to BNSF's motion for
‘summary judgment should be stricken, asserting that they fall within the M. R. Evid. 803
‘exception to the hearsay rule for public and business records.

{37 Asa result, BNSF argues that it has shifted the burden to Smith to demonstrate a
‘genuine issue of material fact, and Smith has failed to do so. BNSF argues that the lack
of an Exhibit C, see § 33, does not raise a genuine issue of material fact because, even
though this document cannot be produced, BNSF did produce the Certificate of
‘Completion showing that project RRP 4139 had been completed. BNSF points to the
deposition of Tholt, wherein he stated that such a certificate would not have been issued

by MDOT and signed by him unless that project had been fully and satisfactorily
completed, BNSF argues that the installation of double reflectorized crossbucks at the
Hesper crossing was also confirmed by an inventory taken of that site by MDOT on
March 1, 1989, BSNF asserts this is confirmed by Ostrander's affidavit wherein he
stated that such an inventory reflects that project RRP 4139 had been completed at the
Hesper crossing. BNSF argues that such state documents are entitled to a presumption of

regularity, making summary judgment proper. Lastly, BNSF maintains the affidavit of

 

Ema Love does not raise a genuine issue of material fact for the simple reason that her
affidavit says nothing about the presence of double reflectorized crossbucks (which
BNSF maintains were installed under project RRP 4139, see 4 3), but only that there were
‘erossbucks present at the Hesper crossing prior tothe upgrade under RRP 4139.

{B8 The threshold question before us is whether BNSF met its evidentiary burden
under M. R. Civ. P. 56 by demonstrating the absence of a genuine issue of material fact,
‘and entitlement to judgment as a matter of law. Rich, § 12. As we stated in Hiebert “{i}t
is well-settled that during summary judgment proceedings, the parties must limit

affidavits to evidence that would be otherwise admissible pursuant to the rules of

 

evidence.” Hiebert, §29. For affidavits to be admissible, they must be based on personal
knowledge as provided for in M. R. Civ. P. $6(e), which reads in pertinent part as

follows:

 

Rule 36(e). Form of affidavits -- further testimony ~ defens
required. Supporting and opposing affidavits shall be made on personal
knowledge, shall set forth such facts as would be admissible in evidence,
and shall show affirmatively thatthe affiant is competent to testify to the
‘matters stated therein, Swom or certified copies of all papers or parts
thereof referred to in an affidavit shall be attached thereto or served
therewith,

 
{39 This “personal knowledge” must be based on “firsthand observation or experience,
as distinguished from a belief based on what someone else has said.” Hiebert, § 30
(quotation omitted). Affidavits made without personal knowledge and based on hearsay
evidence should not be considered in a motion for summary judgment. Hiebert, § 30.
However, exhibits can be submitted in support of an affidavit for purposes of
MR. Civ. P. 56, so long as they are accompanied by an affidavit or swom discovery
response of an individual with personal knowledge of their genuineness, relevance, and

contents, or there is a foundation laid for such exhibits “based on any exception to the

 

rule excluding hearsay evidence.” Hiebert, $ 30-32; Disler, 11.

 

{40 BNSF suggests in its briefs that a district court's evidentiary rulings on summary
judgment motions should be reviewed under the abuse of diseretion standard; however, it
cites no authority which directly supports this proposition save for Barthelemy.
Barthelemy does seem to suggest that evidentiary rulings in the summary judgment
context are reviewed under the abuse of discretion standard. Barthelemy, 897 F.2d at
1018 (citing Kisor v. Johns-Manville Corp., 783 F.2d 1337, 1340 (9th Cir, 1986),
However, a cursory review of Barthelemy shows that itis flawed precedent on this point
for the simple reason that Kisor, upon which Barthelemy is premised, did not involve
‘evidentiary rulings in the summary judgment context, but instead concemed an
evidentiary ruling in the course of a normal jury trial, Kisor, 783 F.2d at 1338-40. Thus,
wwe do not find Barthelemy persuasive authority. While we acknowledge that some courts

have applied the abuse of discretion standard to evidentiary rulings in the context of

20
summary judgment proceedings, ¢g, International Biochemical Industries, Ine. v.
Jamestown Management Corp., 586 S.E.2d 442, 447 (Ga. App. 2003), we believe this
approach is at odds with the fact that we review summary judgment decisions under a de
novo standard of review.

41 It is true that we do review some ancillary rulings in the summary judgment
context under the abuse of discretion standard. Envtl. Contractors, LLC v. Moon, 1999
MT 178, 19, 295 Mont. 268, { 19, 983 P.2d 390, $19 (reviewing the denial of a motion
to continue discovery filed during summary judgment proceedings for an abuse of
discretion), However, we have never held that evidentiary rulings going directly to the
propriety of summary judgment are also reviewed for an abuse of discretion. Instead,
under our case law, strict compliance with Rule 56(e) is required, and we review de novo
whether the evidentiary requirements of Rule 56(e) have been satisfied. In Herron v.
Columbus Hosp., 284 Mont, 190, 943 P.2d 1272 (1997), for instance, we affirmed a
district court grant of summary judgment, finding that the moving party had met its initial
burden, but the non-moving party failed to raise a genuine issue of material fact because
his affidavit did not comply with Rule 36(e). “An affidavit submitted in a summary

judgment proceeding must be based on the affiant’s personal knowledge of the facts set

 

forth. Rule $6(e), M.R.Civ.P. If an affidavit does not comply with the requirements of
Rule 56(e), it does not raise a genuine issue of material fact as a matter of law.” Herron,
284 Mont, at 196, 943 P.2d at 1276 (citing Cooper v. Sisters of Charity, 265 Mont. 205,

208, 875 P.24 352, 354 (1994)).

a
{42 This same standard should also apply to a party moving for summary judgment
4nd attempting to demonstrate an absence of a genuine issue of material fact,
Accordingly, we hold that if a moving party’s affidavit does not comply with the
requirements of M R. Civ. P. 56(¢), it does not demonstrate the absence of a genuine
issue of material fact as a matter of law.

{43 In this case, the affiants’ “personal knowledge” was not from firsthand knowledge
or experience, but was based upon a review of documents related to project RRP 4139

and the alleged installation of double reflectorized crossbucks at the Hesper crossing. For

 

instance, the affidavit of Althof was based on his review of several documents which
were attached to his affidavit: ‘The Agreement between the State and BNSF for the

statewide installation of erossbucks under project RRP 413

 

by BNSF related to project RRP 4139, including the Certificate of Completion; and a bill
from BNSF to the State for the installation of double reflectorized crossbucks at the
Hesper crossing. Althof establishes an adequate foundation for the Agreement because
he states that “it is a true and correct copy of the Agreement for Montana Highway
Project RRP 4139." However, he does not establish a foundation for either the
Certificate of Completion, the bill rom BNSF, or the other documents upon which he
relied,"

44 Inhis affidavit Ostrander reviewed the Althof affidavit and the affidavit submitted

in Lee (see § 29), as well as a grade crossing inventory form of the Hesper crossing dated

"In his affidavit, Althof states that he has “reviewed the records of the Montana Department of
‘Transportation regarding the railroad crossing on Hesper Road in Yellowstone County,
Montana.” However, these records are nether further specified nor attached to his affidavit.

2
March 1, 1989. Ostrander did not attest to the genuineness of the exhibits upon which he
‘and the other affiants relied, nor did BNSF lay a foundation for these documents under an

exception to the hearsay rule.

 

larly, the deposition of Tholt shows that his testimony
‘was based upon a number of documents prepared by BNSF, to which he could not
personally testify as to their genuineness and contents, and which also had not been
‘admitted under an exception to the hearsay rule, Because Tholt signed the Certificate of
‘Completion, it is possible that he could properly authenticate this document even though
he admitted during his deposition that he had not personally prepared the document and
did not personally review the documents related project RRP 4139, With the exception of
the Agreement, and the possible exception of the Certificate of Completion, none of the
affiants personally attested to the genuineness and veracity of the BNSF bill, and the
other documents upon which they relied, based on their personal knowledge, nor did they
affirmatively lay a foundation therefore under an exception to the hearsay rule. See 4 39.

{45 While BNSF claims it could establish a foundation for these documents under the
public and business records exception to the hearsay rule, M. R. Evid. 803, the fact is it
did not do so, either in its briefs, affidavits, or in oral argument before the District Cour.

‘On the other hand, Smith did not allege that the exhibits themselves were fraudulent or
inauthentic, nor did Smith move to strike any of the exhibits under the Montana Rules of
Evidence. Instead, Smith lodged a generalized objection to the affidavits and their
supporting exhibits, based on the lack of the affiants” personal knowledge.

{46 Moreover, while Smith argues the affiants lack the personal knowledge to give

testimony under Rule $6(¢), she does not allege that these records upon which they based

2B
their testimony would necessarily be inadmissible under the Montana Rules of Evidence
‘As a result, we are confronted with this question: When the non-moving party argues an
affiant lacks the personal knowledge to establish the exhibits themselves are admissible,
‘must the party moving for summary judgment lay a foundation for each exhibit it asks the
‘court to rely upon in support ofits motion?

{47 Although we have not yet addressed this precise issue, the rule governing these
situations has been stated by the Ninth Cireuit as follows:

It is well established that unauthenticated documents cannot be
considered on a motion for summary judgment. Canada v. Blain's
Helicopters, Inc., 831 F.2d 920, 925 (9th Cir. 1987). To be considered by
the court, “documents must be authenticated by and attached to an
affidavit that meets the requirements of [Rule] $6(c) and the affiant must
'be a person through whom the exhibits could be admitted into evidence.”

Id; see also 10A C. Wright, A. Miller, & M. Kane, Federal Practice &
Procedure § 2722 at 58-60 (2d ed. 1983). A document which lacks a
proper foundation to authenticate it cannot be used to support a motion for
summary judgment. Canada, 831 F.2d at 925; Hamilton v. Keystone
Tankship Corp, $39 F.2d 684, 686 (9th Cir. 1976); United States v.
Dibble, 429 F.2d 598, 601-602 (Sth Cir. 1970),
Hal Roach Studios, Inc. v. Richard Feiner and Co., Inc., 896 F.2d 1542, 1550-51 (9th
Cir. 1999),
{48 It appears this rule is followed by many other courts. E.g., Martin v. John W.
‘Stone Oil Distributor, Inc., 819 F.24 $47, $49 (Sth Cir. 1987); Carmona v. Toledo, 215
F.3d 124, 131 (Ist Cir. 2000); Orsi v. Kirkwood, 999 F.2d 86, 92 (4th Cir. 1993); Guidry
¥ Aventis Pharmaceuticals, Inc., 418 F. Supp. 24 835, 839 (M.D. La, 2006); In re
Northgate Computer Systems, Inc., 240 B.R. 328, 338 (Bankr. D. Minn, 1999); see also

Wright, Miller and Kane, Federal Practice & Procedure vol. 10A, § 2722 n, 40, 382-84

 

4
(34 ed, West 1998) (collecting numerous other authorities in support of this proposition).
We determine it appropriate to adopt this rule.

49 There are two exceptions to this general rule which are arguably applicable to the
instant case. The first is an exception for self-authenticating documents. “Each
document submitted in support of summary judgment must be either properly
authenticated, or must be self-authenticating under the Federal Rules [of Evidence].”
Goguen v. Textron, Inc., 234 F.R.D. 13, 16 (D. Mass 2006). In Montana, M. R. Evid.
‘902, the counterpart to the federal rule discussed in Goguen, governs self-authenticating

documents. M. R. Evid, 902 provides ten categories of documents for which “{e}xtrinsic

 

evidence of authenticity as a condition precedent to admissibility is not required
‘These include: (1) Domestic public documents under seal; (2) Domestic public
documents not under seal; (3) Foreign public documents; (4) Certified copies of public
records; (5) Official publications; (6) Newspaper and periodicals; (7) Trade inscriptions
and the like; (8) Acknowledged documents; (9) Commercial paper and related
‘documents; and (10) Presumptions created by law. M. R. Evid. 902(1) through (10).

{50 In this case, Althof has properly authenticated the Agreement. The question
remains, therefore, whether the other documents relating to project RRP 4139 supplied by

BNSF—including the Certificate of Completion and the bill from BNSF—were properly

 

 

considered. The BNSF bill does not fall into any of categories described in M. R. Evi

 

902, and instead is more akin to a business record which may be admitted under
M.R. Evid, 803(6). Neither does the Certificate of Completion fall into any of these

ined by the

 

categories. Although the Certificate was presumptively created and mai

25
State, it was not certified as required in subsection (4), nor does it meet the requirements

in subsection (2), because there has been no certifi

 

n from a “public officer having a
seal and having official duties in the district or political subdivision of the officer or

employee . .. under seal that the signer has the official capacity and that the signature is

 

genuine.” M.R. Evid. 902(2).
51 A second exception applies in situations where the moving party fails to lay a

proper foundation for an exhibit

 

but the court's consideration of that document amounts
to harmless error under the circumstances of the case. In Hal Roach Studios, for instance,

the Ninth Circuit found that a moving party failed to lay @ proper foundation for a

 

 

particular exhibit, an S-1 Registration Statement filed with the Securities and Exchange

Commission, as requit

 

under Fed. R. Evid. 901(b) in support of a summary judgment
motion, Hal Roach Studios, 896 F.2d at 1550-51. Nonetheless, the Ninth Circuit
‘concluded this failure was harmless error because: (1) the moving party had submitted a
declaration of a corporate officer who could have authenticated the document by virtue of
his official position under Fed. R. Evid, 901(b)(1) and his personal knowledge regarding
the contents of the document; and (2) both parties had submitted copies of the
Registration Statement to the district court. Hal Roach Studios, 896 F.24 at 1551; accord
Bias v, Moynihan, 508 F.3d 1212, 1224 (9th Cir. 2007).

152 Because, as established above, these documents are not self-authenticating, the
only other possible basis for accepting them is that their consideration amounts to
“harmless error,” meaning that “a competent witness with personal knowledge could

hhave authenticated the document.” Burch v. Regents of the U. of Cal., 433 F. Supp. 24

26
 

1110, 1120 (E.D. Ca, 2006) (citing Hal Roach Studios, 896 F.2d at 1552). Here, none of
the affiants could have testified to the genuineness and authenticity of the BNSF bill
because none of the affiants had seen the BNSF bill prior to its production by BNSF. The

Certificate of Completion presents a slightly different situation because Tholt had

 

actually signed this document in his official state capacity. Thus, Tholt could have
authenticated this document under M. R. Evid. 902(2), and so its consideration amounts
to harmless error in this case,

{53 However, the BNSF bill, and the other documents upon which the affiants relied,

are not covered by the harmless error exception to the requirement that documents in

support of a summary judgment motion must be properly authenticated by the moving

 

party. Thus, the BNSF bill should not have been considered by the District Court in
‘granting summary judgment to BNSF. Similarly, the affiants and Tholt should not have
been permitted to rely on the BNSF bill, and any other unauthenticated and unspecified
documents, in support of BNSF’s motion under the requirements of M. R. Civ. P. $6(e).
‘Thus, we cannot affirm the District Court's grant of summary judgment in this case. “If
there is any doubt as to the propriety of a motion for summary judgment, it should be
denied.” Jarvenpaa v. Glacier Elec. Cooperative, Inc., 271 Mont. 477, 480, 898 P.24
£690, 692 (1995) (citing Rogers v. Swingley, 206 Mont. 306, 312, 670 P.2d 1386, 1389
(1983); Cheyenne Western Bank v. Young, 179 Mont. 492, 496, $87 P.2d 401, 404
(1978),

$54 While BNSF has cited to a number of cases which support its position that the

quantum of proof it has offered here was sufficient, none of these cases are particularly

27
hhelpful because they present situations where the underlying admissibility of the
affidavits and documents was cither assumed or unchallenged. In O'Bannon and

‘McDaniel, for instance, there was no mention of a challenge to the admissibility of the

 

‘evidence or affidavits under the Federal Rules of Civil Procedure. O'Bannon, 169 F.3d

at 1089-91; McDaniel, 932 F. Supp. at 167-68. Similarly, in Hargrove, a Louisiana

 

appeals court found that a witness without personal knowledge of the expenditure of
federal funds at a railroad crossing gave credible testimony in support of the Missouri
Pacific Railway Company's argument that federal funds had been expended in upgrading
that crossing, but there is no indication in that case that the witness lacked personal
knowledge of the documents upon which he relied in giving his testimony. Hargrove,
925 $0.2d at 30-31; see also Richardson v. Norfolk Southern Ry. Co., 923 $0.24 1002,
1009 (Miss. 2006); Security First Bank, 213 F. Supp. 24 at 1090 (no discussion of
whether documents attached to an affidavit must be admissible under hearsay exception);
Lee, 245 F.3d at 1106 (same); Wagoner, 246 F. Supp. 2d at 1005-07 (no discussion of
admissibility of exhibits attached to affidavit, and further, a declaration was presented by
an affiant with personal knowledge that federal funds used at a crossing).

{55 _ In sum, the cases cited by BNSF do not displace the clear evidentiary requirements
for summary judgment motions contained in M. R. Civ. P, $6 and the governing case law.
While this is arguably a close case, and BNSF may well be correct that it can supply the
proof necessary to ultimately prevail, the record establishes it has not yet done so for
purposes of summary judgment.

CONCLUSION

28
{56 We hold that the District Court erred in concluding that BNSF was entitled to
summary judgment, because BNSF failed to comply with the evidentiary requirements of
MR. Civ. P. $6(¢). We decline to strike the federal preemption defense, as requested by

Smith. Accordingly, we reverse the grant of summary judgment and remand for further

 

proceedings consistent with this Opi
y
ducia (MW

Justice

We concur:

 

   

Justices

29
Justice John Wamer concurs,
$57 I concur in the Court's opinion. The Court correctly reverses the District Court's
‘grant of summary judgment because the requirements of M. R. Civ. P, 56 were not met,
for the reasons stated. However, s0 as to not be misleading I am constrained to state my
‘opinion that Smith’s success on appeal may yet prove to be a hollow victory.

{58 The Court’s holding is contrary to Smith’s position that most of her state law
claims are not preempted by federal law, even if BNSF can prove that double
reflectorized crossbucks were installed at the Hesper crossing using federal funds. As a
fall-back position, Smith goes on to argue that in order to establish its preemption defense
BNSF must conclusively prove that double reflectorized crossbucks were installed using
federal funds. Such is not the case.

{59 There is no rule of evidence or law in Montana that would require that BNSF

 

prove conclusively that double reflectorized crossbucks were installed using federal
funds, notwithstanding Smith's citation to Mo, Pacific v, Limmer, 180 S.W.3d, 803 (Tex.
‘App. 2005), which case is inapposite.' Section 26-1-102(2)(b), MCA. The standard of
proof is by a preponderance of the evidence, §§ 26-1-402, 26-1-403(1), MCA, and
circumstantial evidence can be sufficient for proof of any fact. Dalbey v. Equitable Life
Assur, Socy. of US., 105 Mont. $87, 599, 74 P.2d 432, 435 (1937); In re Bragg’s Est,
106 Mont. 132, 139, 76 P.2d 57, 60-61 (1938); Jacques v. Mont. Natl. Guard, 199 Mont.

493, 496-97, 649 P.2d 1319, 1321 (1982).

"tn Appellant's brief, Mo. Pacific v. Limmer is mis-cited as Union Pacific v. Limmer,
30
{60 As Smith has presented nothing sufficient to raise a material issue of fact
concerning the matter, should BNSF satisfy evidentiary and foundational requirements
noted by the Court, after further proceedings on remand it might be entitled to summary

judgment ora directed verdict on the issue of preemption

a on

31