Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-95-02114/USCOURTS-ca10-95-02114-0/pdf.json

Nature of Suit Code: 350
Nature of Suit: Motor Vehicle Personal Injury
Cause of Action: 

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PUBLISH 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

NANCY ARMIJO, personal representative of the Estate ofLuz Armijo, ) 

deceased, ) 

) 

Plaintiff-Appellant, ) 

) 

v. ) 

) 

ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY, ) 

) 

Defendant-Appellee. ) 

JUL 05 1991 

PATRICK PtSHE'R Clerk 

No. 95-2114 

ON APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF NEW MEXICO 

(D.C. No. CIV-89-293-JC) 

ChrisS. Key, Albuquerque, New Mexico, for Plaintiff-Appellant. 

JohnS. Thal, Atkinson & Thal, P.C. (Timothy C. Holm and Donald A. DeCandia, Modrall, Sperling, 

Roehl, Harris & Sisk, P.A. with him on the brief), Albuquerque, New Mexico, for DefendantAppellee. 

Before BALDOCK, BRORBY and EBEL, Circuit Judges. 

BRORBY, Circuit Judge. 

On October 23, 1987, Luz Armijo was killed when his vehicle collided with a train operated 

by the Atchison, Topeka and Santa Fe Railway Co. (hereafter "Santa Fe") at the North Gabaldon 

crossing in Valencia County, New Mexico. Acting as the personal representative for her husband's 

Appellate Case: 95-2114 Document: 01019276540 Date Filed: 07/05/1996 Page: 1 
estate, Nancy Armijo brought this action for wrongful death and punitive damages under New 

Mexico law, alleging Santa Fe negligently or recklessly failed to provide adequate warnings at the 

North Gabaldon crossing and negligently operated the train that collided with Mr. Armijo. The 

district court granted partial summary judgment in favor of Santa Fe on Ms. Armijo's negligent 

failure to warn claim on the ground that claim is preempted by federal law, Armijo v. Atchison, 

Topeka & Santa Fe Ry. Co., 754 F. Supp. 1526, 1528-34 (D.N.M. 1990), and certified its decision 

as final pursuant to Fed. R. Civ. P. 54(b). 

We reversed the grant of partial summary judgment and held, as a matter of law, that Ms. 

Armijo's failure to warn claim was not preempted. Armijo v. Atchison, Topeka & Santa Fe Ry. Co., 

19 F.3d 547 (lOth Cir. 1994) (Armijo I). We later granted Santa Fe's petition for rehearing and 

revisited Armijo I. In the order on rehearing, we concluded that, as a matter of fairness, Santa Fe 

should be allowed to further develop the evidence bearing on the preemption issue in light of the 

Supreme Court's decision in CSXTransportation, Inc. v. Easterwood, 507 U.S. 658 (1993), and our 

decision in Hatfield v. Burlington N. R.R. Co., 1 F.3d 1071 (lOth Cir. 1993) (Hatfield I), both 

decided after the district court issued its ruling. Armijo v. Atchison, Topeka & Santa Fe Ry. Co., 27 

F.3d 481 (lOth Cir. 1994)(Armijo II). 

Upon remand, Santa Fe renewed its motion for partial summary judgment and submitted 

additional evidence. The district court again granted summary judgment' on Ms. Armijo's claim 

1 In its letter ruling, the district court commended counsel for both parties for "the excellent 

argument [they] presented at the hearing" on Santa Fe's motion for partial summary judgment. We too 

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Santa Fe negligently failed to provide adequate warning devices at the North Gabaldon crossing. 

Ms. Armijo then dismissed her remaining claims for compensatory damages with prejudice, and the 

district court entered final judgment in favor of Santa Fe. This appeal followed. 

I 

Ms. Armijo contends the district court erred in concluding her state law failure to warn 

claims are preempted. In Easterwood, the Supreme Court considered whether certain regulations 

issued by the Secretary of Transportation pursuant to the Federal Railroad Safety Act of 1970, as 

amended, 45 U.S.C. § 434, preempt state law claims against a railroad, alleging the railroad acted 

negligently failing to erect and maintain adequate warning devices at a railroad grade crossing.2 The 

regulations in question require the states to "develop and implement, on a continuing basis, a 

highway safety improvement program which has the overall objective of reducing the number and 

severity of accidents and decreasing the potential for accidents on all highways." 23 C.P.R. 924.5 

( 1995). As part of the program, the states are to establish priorities for addressing all manner of 

highway hazards, including railroad grade crossings. 23 C.P.R. § 924.9(a)(4) (1995). For all 

railroad grade crossings, the regulations require the states to use warning devices conforming with 

the Federal Highway Administration Manual on Uniform Traffic Control Devices for Streets and 

commend counsel on their candor and skill in addressing the challenging issues presented in this appeal. 

2 Congress has repealed 45 U.S.C. § 434. Pub. L. 103-272, § 7(b), July 5, 1994, 108 Stat. 1379, 

1386. The repeal has no impact on this case, however. !d., 108 Stat. 1379 (repeal has no effect on 

"proceedings that were begun before the date of the enactment" of Pub. L. 103-272, July 5, 1994). 

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Highways (hereafter "the Manual"). 23 C.F.R. §§ 646.214(b)(1) and 655.603 (1995). However, 

"Adequate warning devices ... on any project where Federal-aid funds participate in the installation 

of the devices are to include automatic gates with flashing light signals" under certain circumstances, 

23 C.F.R. § 646.214(b)(3)(i) (1995) (emphasis in original), or, if such devices are not required under 

the regulations, "the type of warning device to be installed, whether the determination is made by 

a State regulatory agency, State highway agency, and/or the railroad, is subject to the approval of 

FHWA." 23 C.F.R. § 646.214(b)(4) (1995). 

The Supreme Court held § 924 and the requirement the states comply with the Manual do 

not preempt state law failure to warn claims. Easterwood, 507 U.S. at 668-70. The Court held, 

however, that when §§ 646.214(b)(3) and (4) apply, state tort law is preempted, because these 

regulations "displace state and private decisionmaking authority by establishing a federal-law 

requirement that certain protective devices be installed or federal approval obtained." Easterwood, 

507 U.S. at 670. These sections apply whenever "federal funds participate in the installation of the 

[warning] devices." Id (footnote omitted). We further refined the Easterwood analysis in Hatfield 

v. Burlington N R.R. Co., 64 F.3d 559 (lOth Cir. 1995)(Hatfield I[), by clarifying the type of federal 

participation required to trigger preemption. We reiterated our conclusion in Hatfield I that there 

must be "significant" federal participation, which requires "'more than a casual financial connection' 

between the federal government and the project." Hatfield II, 64 F .3d at 561 (quoting Hatfield I, 1 

F.3d at 1072). We noted, however, that in Hatfield I "we also made it clear that federal financial 

participation may include utilization of non-cash resources, such as federally funded personnel 

resources, and that federal participation may occur at any point in the project, including the planning 

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stage." Id We further explained we must look at the "crossing project broadly-- from its planning 

inception to its construction completion -- in determining when significant federal participation first 

occurred." Id 

In Hatfield IL we held federal preemption was triggered in early 1985, at which time $619.17 

in federal funds had been spent on preliminary engineering, federally mandated active warning 

devices had been selected pursuant to 23 C.F.R. § 646.214(b)(3), and the crossing was scheduled for 

installation of federally funded active warning devices. Id We rejected the contention that the 

proportionality of the federal funds to the overall cost of the project is "the sole touch-stone in 

determining the significance of a federal financial commitment." Hatfield II, 64 F .3d at 562. 

Instead, we believe that the financial commitment must be such that it shows a clear 

federal intent to require a federally approved warning device at the crossing in 

question, backed up by the actual expenditure of federal resources of more than a 

casual or de minimis nature, and specifically directed toward the ultimate installation 

of the improved warning devices at that crossing. 

Id At the moment the federal government manifests such intent, the "financing of the improvement 

project and its direction and control" are removed from the railroad, and claims against the railroad 

relating to the adequacy of the warnings are preempted. Id 

In light of Easterwood, Hatfield II, and our other post-Easterwood decisions, the issue in this 

case is whether federal funds participated in some significant way in the installation of warning 

devices at the North Gabaldon crossing before October 23, 1987, the date of the accident. Our 

review of the record shows federal participation began, and New Mexico law was preempted, no 

later than January 25, 1983. On that date, the Secretary of Transportation agreed to provide ninety 

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percent of the funds required to install reflectorized crossbucks at a number of railroad grade 

crossings in New Mexico, including the North Gabaldon crossing. At this point, the North Gabaldon 

crossing became a "project where Federal-aid funds participate in the installation of [warning] 

devices," 23 C.F .R. § 646.214(b )(3)(i), and the type of warning device used was under the control 

of the Secretary of Transportation. The Secretary of Transportation's authorization of passive 

warning devices was tantamount to a determination, pursuant to 23 C.F.R. § 646.214(b)(4), that only 

passive, rather than active, warning devices were sufficient, and that determination took the matter 

out ofNew Mexico's and Santa Fe's hands. 

Ms. Armijo draws our attention to the Seventh Circuit's decision in Shots v. CSX Transp. 

Inc., 38 F.3d 304 (7th Cir. 1994), which reached the opposite conclusion on facts very similar to 

those in this case. Mr. Shots was injured at a railroad grade crossing in Indiana in 1989. Id. at 305. 

At the time of the accident, the crossing was equipped only with reflectorized cross bucks. /d. In 

1975, the state of Indiana and the railroad entered into an agreement to "'upgrade the passive 

protection at the Railroad's public rail-highway crossings in Indiana to minimum standards, as 

established by the State'" by installing reflectorized cross bucks at a number of crossings, including 

the crossing where Mr. Shots was injured. /d. at 306. The Secretary of Transportation approved the 

project five days after 23 C.F.R. § 646.214 became effective and provided federal funding, but did 

not receive a report from a diagnostic team regarding the type of warning systems required at each 

crossing under that regulation. /d. The Seventh Circuit acknowledged that if the Secretary of 

Transportation's approval and funding of the project could be interpreted as an express determination 

that the reflectorized crossbucks were sufficient under 23 C.F.R. § 646.214(b)(4), Mr. Shots' claim 

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would be preempted. /d. at 308. The Seventh Circuit concluded, however, Mr. Shots' state law 

claims were not preempted. /d. at 309. The court explained: 

The [1975] agreement does not state or imply that the thousands of crossings 

covered by it would be adequately safe if equipped with reflectorized 

cross-bucks. The point is rather that these are the only form of safety device 

that the agreement covers. This limitation of scope is reinforced by the fact 

that the agreement is explicitly limited to providing the "minimum" in 

passive protections -- the minimum being standard reflectorized cross-bucks 

for crossings, such as the one in question in this case, that lacked even that 

much in the way of a warning device. Minimum is not a synonym for 

optimum, or even adequate. We must not forget the context of the 

agreement. The State oflndiana had thousands of substandard crossings, and 

limited funds, even with federal largesse, to bring them all up to the optimal 

standard of safety. The task was to maximize grade-crossing safety in the 

state as a whole, subject to a budget constraint, so it was to be expected that 

adequate safety might be sacrificed at some crossings to enable minimum 

safety to be achieved at all. So far as can be gathered from the record 

compiled in the district court, the agreement was a step on the road to 

adequate safety rather than a determination by the State of Indiana or the 

federal Secretary of Transportation as to what safety devices would be 

adequate at each of the thousands of crossings covered by it. 

Thus we do not think it can be realistically said, to use the 

formulation in Easterwood, that "the Secretary has determined the devices to 

be installed" at these crossings merely because he authorized federal funds 

to bring them up to minimum standards, utilizing passive warning devices 

solely. Indeed, it would have been an extraordinary act of irresponsibility for 

the Secretary of Transportation, by approving the agreement, to preclude tort 

liability for the railroad's failing to have active warning devices at any of the 

thousands of crossings covered by the agreement, or otherwise to prevent the 

state from requiring adequate safety devices at the busiest or most dangerous 

of these crossings, when no one in the federal government had made a 

determination that the improvements to be made would bring all the crossings 

up to a level of safety adequate to satisfy federal standards. 

Id. at 308-09. 

Ms. Armijo contends, and we agree, that the Seventh Circuit's analysis in Shots arguably 

supports her position the Secretary of Transportation's approval and funding of the 1983-1984 

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cross buck project did not trigger preemption. It is undisputed that the purpose of the project was to 

bring a large number of railroad grade crossings into compliance with the requirements of the 

Manual, and that the Secretary of Transportation's approval of the project was not the result of an 

express administrative finding pursuant to 23 C.F.R. § 646.214(b)(4) that only passive, rather than 

active warning systems were required at the crossings in question. It is only an academic question 

whether Ms. Armijo would fare better under Shots, however, because we join the Fifth and Eighth 

Circuits in declining to follow that decision. See Elrod v. Burlington N R. R. Co., 68 F .3d 241, 244 

(8th Cir. 1995); Hester v. CSXTransportation, Inc., 61 F.3d 382,387 & n.9 (5th Cir. 1995), cert. 

denied, 116 S. Ct. 815 (1996). In Hester, the Fifth Circuit stated, and we agree, that "[t]he fact that 

federal funds participated in the installation of the warning devices legally presupposes that the 

Secretary approved and authorized the expenditure, which in turn legally presupposes that the 

Secretary determined that the safety devices installed were adequate to their task." Hester, 61 F.3d 

at 387. In the absence of clear evidence showing that, at the time the Secretary of Transportation 

approved the crossbuck project in 1982, the Secretary had concluded the crossbucks, though 

desirable, were not adequate in themselves to warn the public of the danger at the North Gabaldon 

crossing, we assume the Secretary of Transportation made a finding the cross bucks were adequate 

under 23 C.F .R. § 646.214(b )( 4 ), and we will not delve into the question of whether that finding was 

wise or well informed. 

Finally, Ms. Armijo makes much of the fact that in 1984, after the crossbuck project was 

complete, the New Mexico Railroad Safety Program Diagnostic Team (hereafter "the Diagnostic 

Team") placed the North Gabaldon crossing on a list of twenty-two railroad grade crossings 

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requiring federally funded installation of active warning systems once funds became available. 

(App. 60.) She also notes one of the members of the Diagnostic Team was Douglas Bennett, a 

United States Department of Transportation engineer, and that Mr. Bennett signed an affidavit 

stating his signature on the Diagnostic Team's report "represented the [Secretary ofTransportation]'s 

approval of the recommendations" contained in that report. Ostensibly, Ms. Armijo would have us 

hold that even if the Secretary of Transportation's initial determination (that passive warning systems 

were active at the North Gabaldon crossing as of early 1982) preempted state law, the subsequent 

decision (that an active warning system was needed as of 1984) somehow suspended the preemption 

of state law until federal funds participated in some significant way in the installation of the active 

warning devices. We decline to so hold. The fundamental issue under both Easterwood and our 

post-Easterwood decisions is whether the federal government has "displace[d] state and private 

decisionmaking authority by establishing a federal-law requirement that certain protective devices 

be installed or federal approval obtained" and "effectively set the terms under which railroads are 

to participate in the improvement of crossings." Easterwood, 507 U.S. at 670; see Hatfield II, 64 

F.3d at 562. The mere fact that the federal government has changed its opinion regarding what 

warning devices are needed at a particular crossing at some point after making a prior determination 

a lesser warning system is sufficient is of no real significance: the issue is not what warning system 

the federal government determines to be necessary, but whether the final authority to decide what 

warning system is needed has been taken out ofthe railroad's and the state's hands under 23 C.F.R. 

§ 646.214(b)(3) & (4). The only situation we can envision in which preemption could arguably be 

considered suspended or terminated would be where the Secretarty of Transportation does not 

merely change his or her view regarding the type of warning system needed, but affirmatively 

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abandons the project and either withdraws federal funding or allows previously allocated funding 

to be used at another site, which did not occur in this case. See Easterwood, 507 U.S. at 673 (no 

preemption in part because city "scotched" plans to build warning gate at the Cook Street, federal 

funds earmarked for the projected were transferred to other projects, and "[t]he decision to install 

gate arms at the Cook Street crossing was placed on a list of projects to be considered at a later 

time"). 

II 

For the reasons stated, the judgment of the district court is AFFIRMED. 

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95-2114, Armijo v. Atchison. Topeka & Santa Fe 

EBEL, Circuit Judge, dissenting. 

I agree that preemption initially occurred at the time the federal 

government significantly participated in the installation of reflectorized 

crossbucks. 1 However, I diverge from the majority's conclusion reached in the 

last lengthy paragraph of the opinion that preemption continued past 1984, when 

the diagnostic team decided automatic gates were needed at the North Gabaldon 

crossing. Instead, I agree with Armijo that the decision to install automatic gates 

removed the preemptive effect of the cross bucks' installation and, therefore, 

1 Although I agree with the majority that preemption occurred as a result of 

the federal government's participation in the installation of reflectorized 

cross bucks, I disagree with some of the language in the majority opinion 

concerning the time when such preemption first arose. The majority opinion 

concludes that preemption occurred, at the latest, on January 25, 1983, the date on 

which the Secretary of Transportation agreed to provide ninety percent of the 

funds required to install reflectorized crossbucks. However, we held in Hatfield 

v. Burlin~ton N. R.R. Co., 64 F.3d 559, 562 (lOth Cir. 1995) ("Hatfield II"), that 

preemption takes place when the federal government: (1) commits itself through 

a significant event or events, to a project to install active warning devices; and (2) 

expends significant federal resources on the project. Therefore, it is insufficient 

under the second prong of the Hatfield II test merely to authorize that federal 

funds be spent on upgrading a crossing; instead Hatfield II requires "the actual 

expenditure of federal resources of more than a casual or de minimis nature" 

before preemption occurs. ld. (emphasis added.) ~United States v. Zapata, 

997 F.2d 751, 759 n.6 (lOth Cir. 1993) (noting that a three-judge panel of the 

court cannot overturn an earlier opinion from the same court). Nevertheless, that 

date is not critical in this case because here it is clear that the federal government 

had reimbursed the state for the cost of engineering or installing the reflectorized 

cross bucks. Therefore, prior to the time of this accident the federal government's 

participation was significant enough to trigger preemption under 23 C.F .R § 

646.214(b )( 4). 

Appellate Case: 95-2114 Document: 01019276540 Date Filed: 07/05/1996 Page: 11 
Armijo's claims were not preempted at the time of her husband's 1987 accident. I 

therefore respectfully dissent. 

My disagreement with the majority concerns whether preemption was in 

place at the time of the accident in 1987. In CSX Transp .. Inc. v. Easterwood, 

507 U.S. 658 (1993), the Supreme Court held that preemption applies when the 

preconditions for the application of either section (b )(3) or section (b)( 4) have 

been met. 507 U.S. at 670-72. Looking at these regulations as applied to the 

North Gabaldon crossing at the time of the accident, the preconditions for section 

(b)( 4) no longer were met in 19 8 7. The regulation addressing section (b)( 4) 

provides: 

For crossings where the reguirements of § 646 .214(b )(3) are not 

applicable, the type of warning device to be installed, whether the 

determination is made by a State regulatory agency, State highway 

agency, and/or the railroad, is subject to the approval of FHWA. 

23 C.F.R. § 646.214(b)(4) (emphasis added). Thus, a railroad may invoke 

preemption under section (b)( 4) only so long as "the requirements of § 

646.214(b)(3) are not applicable" to the particular crossing in question. One 

requirement of section (b )(3) is that a "diagnostic team recommends" automatic 

gates. ~ 23 C.F.R. § 646.214(b)(3)(I)(F). It is undisputed that in 1984 a 

diagnostic team recommended that automatic gates be installed at the North 

Gabaldon crossing. Therefore, although section (b)( 4) at one time operated to 

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preempt state claims because of the government's significant participation in the 

installation of reflectorized cross bucks, this preemption ceased in 1984 once a 

diagnostic team recommended automatic gates. 

The majority concludes that the diagnostic team's 1984 recommendation of 

automatic gates did not remove the cross bucks' preemptive effect because the 

Secretary of Transportation did not affirmatively abandon the cross bucks project 

and either withdraw federal funding or allow previously allocated funding to be 

used at another site. No case law requires such an affirmative withdrawal, and I 

believe that such a requirement is in conflict with the plain language of sections 

(b )(3) and (b)( 4 ). Rather, I believe that the regulations recognize that as 

conditions surrounding a particular crossing change and make the crossing more 

dangerous to motorists, a determination that passive warning devices are 

sufficient to protect motorists in one year should not continue to preempt state 

claims when it is determined the passive devices provide insufficient warning in a 

later year. Also, considering the "presumption against preemption" applied by the 

Supreme Court in Easterwood, 507 U.S. at 667-68, I believe that we must 

conclude that neither section (b)(3) nor section (b)(4) operated to preempt 

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Armijo's claims at the time of the accident. 2 Accordingly, I would reverse the 

decision of the district court and remand this action for further proceedings. 

2 I do not believe that preemption occurred under section (b )(3) at the time 

of the accident because in 1987, the federal government had not committed itself 

significantly to the installation of automatic gates at the North Gabaldon crossing. 

Instead, federal participation was limited to a single federal employee 

participating on a diagnostic team which selected 22 crossings requiring warning 

signal upgrades during the next five years. In contrast with Hatfield II, no 

engineering study had been performed at the crossing until after the accident 

occurred. Also, the second element of the Hatfield II test was not met at the time 

of the accident. The federal resources expended here were limited to the sole 

federal employee participating on the diagnostic team. Although Santa Fe 

estimates that the federal government spent $1,250 on the engineer's salary while 

he served on the diagnostic team, this amount must be apportioned among the 22 

crossings he considered in detail, as well as more than 100 crossings he 

considered on an original list of crossings. 

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