Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-16-01187/USCOURTS-ca8-16-01187-0/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 

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United States Court of Appeals

For the Eighth Circuit

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No. 16-1186

No. 16-1187

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City of Ozark, Arkansas, a municipal corporation

lllllllllllllllllllll Plaintiff - Appellee

v.

Union Pacific Railroad Company

lllllllllllllllllllll Defendant - Appellant

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Appeals from United States District Court 

for the Western District of Arkansas - Ft. Smith

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 Submitted: September 21, 2016

 Filed: December 19, 2016

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Before LOKEN, GRUENDER, and BENTON, Circuit Judges.

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LOKEN, Circuit Judge.

The City of Ozark, Arkansas sued Union Pacific Railroad Company in state

court seeking an order requiring Union Pacific to restore a public at-grade rail

crossing or, alternatively, allowing the City to condemn Union Pacific’s land across

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that public crossing. Union Pacific removed the action, and the parties filed cross 1

motions for summary judgment. The district court granted the City summary

judgment and a permanent injunction, rejecting Union Pacific’s contention that the

Interstate Commerce Commission Termination Act (“ICCTA”) grants the Surface

Transportation Board (“STB”) exclusive jurisdiction over the City’s claims. 

“[P]reemption is not at issue,” the court ruled, because the crossing was unlawfully

closed. City of Ozark, Ark. v. Union Pac. R.R., 149 F. Supp. 3d 1107, 1116 (W.D.

Ark. 2015). 

Union Pacific appeals this preemption ruling, an issue we review de novo. See

Keller v. City of Fremont, 719 F.3d 931, 937 (8th Cir. 2013), cert. denied, 131 S. Ct.

2140 (2014). We conclude that ICCTA’s express preemption provision, 49 U.S.C.

§ 10501(b), applies to this dispute. We further conclude Union Pacific has made a

strong showing that the remedy the City seeks would “impede rail operations or pose

undue safety risks,” the STB’s governing preemption standard. See Maumee & W.

R.R. & RMW Ventures, LLC, Fin. Dkt. No. 34354, 2004 WL 395835, at *2 (S.T.B.

Mar. 2, 2004). We therefore remand to the district court with instructions to rule on

Union Pacific’s motion to dismiss the City’s amended complaint for lack of

jurisdiction unless the City obtains a ruling from the STB that it lacks or declines

exclusive jurisdiction over this dispute.

I.

The City of Ozark sits on a bend in the Arkansas River. Union Pacific owns

and operatesrailroad tracks on a right of way running east-west between the City and

the river, a mainline track and a long side track used to store rail cars and to place

Whether the action was removable is not an issue on appeal, and we do not

1

address it. See generally Elam v. K.C. So. Ry., 635 F.3d 796, 806-08 (5th Cir. 2011).

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local trains that “meet” a train on the main track. Before 1970, an at-grade crossing 

(“the Crossing”) allowed Ozark residentsto access a small neighborhood south of the

tracks that included several houses, a horse barn, a lumber company, and the City’s

dump. In the late 1960’s, most of this neighborhood was flooded when the Army

Corps of Engineers constructed the McClellan-Kerr Arkansas River Navigation

System. This reduced use of the area south of the tracks to sporadic recreation, but

some residents continued to use the Crossing, and Union Pacific locomotives

continued to sound their horns when approaching it. By 2001, at least one Ozark

resident had complained about the train whistles. Ozark’s Mayor contacted Union

Pacific, which agreed -- no doubt readily -- to remove the Crossing at its own

expense. The Mayor informed Ozark City Council members. No member objected,

but the Council did not pass an ordinance vacating a public street. See Ark. Code

Ann. § 14-301-304(a) (1987). Union Pacific closed the Crossing in 2001.

Some yearslater, the City formulated plans to develop land along the Arkansas

River, including construction of a marina or dock to encourage boaters to stop in

Ozark, and recreational trails near and along the river. The City urged Union Pacific

to reinstall the Crossing at its expense. When Union Pacific refused, the City filed

this action alleging that Union Pacific must restore the public Crossing it had

unlawfully closed by not properly vacating a public street. 

The City moved for partial summary judgment, seeking (i) a declaratory

judgment that the Crossing was a public easement and Union Pacific violated Ark.

Code Ann. § 14-301-301(a) by closing the Crossing without the ordinance required

by § 14-301-304(a); (ii) an order requiring Union Pacific to reinstall the Crossing;

and (iii) a permanent injunction barring Union Pacific frominterfering with the City’s

use of the Crossing. See Ozark, 149 F. Supp. 3d at 1111. Union Pacific moved for

summary judgment, arguing that ICCTA preempts the City’s state law claims and

asserting the affirmative defenses of laches, waiver, and estoppel. Both parties

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submitted extensive evidence regarding the impact of restoring the Crossing on

railroad operations and safety, as well as argument on the preemption issue.

After a lengthy summary judgment hearing, the district court granted judgment

in the City’s favor. The court first ruled that the Crossing was a public easement over

Union Pacific’s tracks and that Union Pacific violated Ark. Code Ann. § 14-301-

301(a) by removing the Crossing without an ordinance vacating the public street as

required by § 14-301-304(a). See id. at 1112-15. The court rejected Union Pacific’s

ICCTA preemption defense, explaining:

At first blush, it may appear that the ICCTA is germane here, as

reopening the Crossing to the public would certainly impact rail

operations in some manner, due in part to Union Pacific’s use of a side

track it installed at the area of the Crossing after 2001. However,

preemption is not at issue because the Crossing was not closed legally

to begin with. . . . Union Pacific’s lack of legal authority to close the

Crossing is the controlling factor.

Id. at 1116. The court ordered Union Pacific to restore the Crossing “to its pre-2001

condition” at Union Pacific’s expense. Id. at 1120. It concluded the City’s

alternative condemnation claim was moot. Id. at 1111 n.2.

On appeal, Union Pacific argues that we must remand because the district court

erred when it failed to apply the governing, fact-intensive ICCTA preemption test. 

II.

Congress enacted ICCTA in 1995, replacing the Interstate Commerce

Commission with the STB. “ICCTA repealed much of the economic regulation

previously conducted by the ICC and by state railroad regulators working in

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conjunction with the ICC.” Iowa, Chicago & E. R.R. v. Washington Cty., 384 F.3d

557, 559 (8th Cir. 2004). To further the goal of limited state regulation of interstate

rail transportation, Congress included a broadly worded preemption provision,

codified at 49 U.S.C. § 10501(b): 

(b) The jurisdiction of the [STB] over --

(1) transportation by rail carriers, and the remedies provided in

this part with respect to rates, classifications, rules (including car

service, interchange, and other operating rules), practices, routes,

services, and facilities of such carriers; and 

(2) the construction, acquisition, operation, abandonment, or

discontinuance of spur, industrial, team, switching, or side tracks, or

facilities, even if the tracks are located, or intended to be located,

entirely in one State,

is exclusive. Except as otherwise provided in this part, the remedies

provided under this part with respect to regulation of rail transportation

are exclusive and preempt the remedies provided under Federal or State

law.

Union Pacific is a “rail carrier.” See § 10102(5). “Transportation” is broadly defined

to include “property, facility, instrumentality, or equipment of any kind related to the

movement of passengers or property, or both, by rail.” § 10102(9). 

There has been extensive litigation before the STB and state and federal courts

addressing the scope of ICCTA’s preemption provision. The STB has held that

§ 10501(b) applies to three types of state statutes, regulations, and judicial remedies. 

First, “any form of state or local permitting or preclearance that, by its nature, could

be used to deny a railroad the ability to conduct some part of its operations” is

preempted. Second, “there can be no state or local regulation of matters directly

regulated by the [STB] -- such asthe construction, operation, and abandonment ofrail

lines.” These two types of state regulation are “facially” or categorically preempted. 

Third, “[f]or state or local actions that are not facially preempted, the section

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10501(b) preemption analysis requires a factual assessment of whether that action

would have the effect of preventing or unreasonably interfering with railroad

transportation.” CSX Transp., Inc., Fin. Dkt. No. 34662, 2005 WL 1024490, at *2-3

(S.T.B. May 3, 2005). The STB callsthisthird category “as-applied” preemption, but

it is part of the agency’s interpretation of the express preemption statute. This court

and other circuits have approved the STB’s approach as a reasonable, permissible

interpretation of 49 U.S.C. § 10501(b). See Tubbs v. Surface Transp. Bd., 812 F.3d

1141, 1144-45 (8th Cir. 2015) (collecting cases).

Railroad crossing disputes are not uncommon; they arise in a variety of factual

and legal contexts. The STB applies its as-applied standard to most crossing disputes,

reflecting a pragmatic approach to the question whether it has exclusive jurisdiction

over a particular dispute:

[R]outine, non-conflicting uses, such as non-exclusive easementsfor atgrade road crossings, wire crossings, sewer crossings, etc., are not

preempted so long as they would not impede rail operations or pose

undue safety risks. . . . [C]ourts can, and regularly do (sometimes with

input from the [STB] through referral) make determinations as to

whether proposed eminent domain actions would impermissibly

interfere with railroad operations.

Maumee, 2004 WL 395835, at *2. Courts agree that, although all railroad crossings

affectrail transportation to some extent, “preemption claims in routine crossing cases

fall into the category of as-applied preemption challenges.” Franks Inv. Co. LLC v.

Union Pac. R.R., 593 F.3d 404, 413 (5th Cir. 2010) (en banc). Applying this analysis,

when a state or federal court determines that the railroad has made no showing that

a remedy allowing use of a particular crossing would unreasonably interfere with rail

transportation, then the court may proceed to resolve the crossing dispute applying

relevant state law contract, property, or condemnation principles. See id. at 415; PCS

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Phosphate Co. v. Norfolk S. Corp., 559 F.3d 212, 221-23 (4th Cir. 2009). However,

if the court concludes that a proposed crossing easement would unreasonably

interfere, then § 10501(b) grants the STB exclusive jurisdiction, and the lawsuit or

condemnation proceeding must be dismissed or enjoined for lack of jurisdiction. See

Union Pac. R.R. v. Chicago Transit Auth., 647 F.3d 675, 683 (7th Cir. 2011);

Anderson v. BNSF Ry., 291 S.W.3d 586, 594 (Ark. 2009); accord Harris Cty. v.

Union Pac. R.R., 807 F. Supp. 2d 624, 632 (S.D. Tex. 2011); Tri-City R.R., Dkt. No.

FD 35915, 2016 WL 5904750, at *9 (S.T.B. Sept. 12, 2016). 

The district court concluded that ICCTA preemption does not apply -- “is not

at issue” -- in this case, because the City seeks to restore a rail crossing that was

closed in violation of state law. Neither the court nor the City cite authority

supporting this conclusion. We emphatically disagree. Whether § 10501(b)(1)

applies to preempt a state-law claim or remedy is a question of federal law that turns

on congressional intent to broadly preemptstate laws and remedies that interfere with

“transportation by rail carriers.” The focus of the STB’s exclusive jurisdiction is

interstate rail transportation, at present and in the future. City of Lincoln v. Surface

Transp. Bd., 414 F.3d 858, 861-62 (8th Cir. 2005); Tri-City, 2016 WL 5904750, at

*7-8. ICCTA preemption does not depend upon the source of a state law claim. The

claim is preempted if the requested remedy will, in the words of the STB’s governing

test, “impede rail operations or pose undue safety risks.” Whether that interference

with rail transportation arises from a public or private easement, or from opening a

new crossing or restoring an abandoned crossing, is irrelevant to the federal

preemption analysis. Thus, an order requiring Union Pacific to restore the Crossing

“to its pre-2001 condition” because it was closed in violation of state law more than

fifteen years ago is preempted if that restoration will unreasonably interfere with rail

operations asthey are conducted today or are likely to be conducted in the future. For

these reasons, we agree with Union Pacific that the district court’s order must be

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reversed and the case remanded for a determination whether this crossing dispute is

within the exclusive jurisdiction of the STB. 

III.

As we have noted, the STB has encouraged courts to make the determination

that a grade crossing dispute involves a “routine non-conflicting use” that is not

preempted, in which case the court may proceed to resolve the crossing dispute based

on applicable state law, as in Mid-Am. Locomotive & Car Repair, Inc., Fin. Dkt. No.

34599, 2005 WL 1326958, at *4 (S.T.B. Jun. 6, 2005). But in many cases, one or

more of the parties involved in disputes involving crossings and other arguably nonconflicting uses have petitioned the STB for an order declaring the agency’s position

on the preemption issue, and the agency has conducted Declaratory Order

proceedings when appropriate. For example, in Wichita Terminal Ass’n, BNSF Ry.

& Union Pac. R.R., Dkt. No. FD 35765, 2015 WL 3875937, at *2 (S.T.B. Jun. 22,

2015), the state trial court ordered the petitioning railroads to construct a crossing at

a particular site, and the appellate court remanded, instructing the trial court to direct

the railroads to petition the STB “to resolve any issues concerning the STB’s

jurisdiction.” After receiving evidence and arguments, the STB ruled that “any

Kansas court order requiring a crossing at [that site] is federally preempted because

it would unreasonably burden or interfere with interstate commerce.” Id. at *6. 

However, as an alternative to preempting any permanent crossing, the railroads had

urged the STB to find that a current temporary crossing at another location along the

interchange tracks was acceptable for a permanent crossing. On this issue, the STB

ruled:

[W]e do not conclude that any crossing over the [interchange tracks]

necessarily would be preempted. . . . [C]rossing disputes are generally

subject to state and local law as long as the crossing location will not

unreasonably interfere with railroad operations. Based on the current

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record, it does not appear that a court-ordered crossing at the location of

the temporary crossing . . . would have that same effect on interstate

railroad operations. It would be reasonable for a state court, applying

state law, to address those issues in light of the preemption standards

discussed in this decision. Id. at *8, citing Maumee, 2004 WL 395835. 

In this case, in support of its motion for summary judgment, Union Pacific

submitted extensive evidence and expert opinion testimony showing that restoration

of the Crossing would have significant adverse effects on current rail operations, and

would pose significant safety risks to Union Pacific employees; to those traversing

the Crossing, which sits on a curve in the main line track where there are limited sight

lines; and to those using recreational trails on a narrow strip of land between the

tracks and the river, risks that would create a danger of disastrous derailments of

high-speed trains that often transport hazardous materials. The City countered with

an expert who opined that the reopened Crossing “causes no more safety concerns to

railroad employees or the general public than those experienced in any other small

town with low volume vehicular traffic.” 

Here, Union Pacific has presented concrete evidence that reopening this

specificCrossing would “impede rail operations or pose undue safety risks,” evidence 

it failed to marshal in Franks, 593 F.3d at 415. On thisrecord, it appearsthat an order

reopening the Crossing is within the STB’s exclusive jurisdiction under 49 U.S.C.

§ 10501(b). But as the STB’s decision in Wichita Terminal illustrates, if presented

the preemption issue the agency could determine that any order restoring this

Crossing is preempted, or that some accommodation of the parties’ interests may be

compatible with sound rail transportation, in which case state law rights and duties

would come into play. Cf. Adrian & Blissfield R.R. v. Vill. of Blissfield, 550 F.3d

533, 542 (6th Cir. 2008) (whether railroad must pay for construction of noninterfering sidewalks a matter of state law). In these circumstances, it would be

appropriate for the district court to defer entry of a final judicial determination

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whether the City’s claims are preempted if the City requests an opportunity to petition

the STB for a declaratory order resolving the issue of its exclusive jurisdiction. See

Wichita Term. Ass’n v. F.Y.G. Inv., Inc., 303 P.3d 13, 22-23 (Kan. Ct. App. 2013);

City of Creede, Co., Fin. Dkt. No. 34376, 2005 WL 1024483 (S.T.B. May 3, 2005).

Accordingly, the Judgment of the district court is reversed, the permanent

injunction is vacated, and the case is remanded for further proceedings not

inconsistent with this opinion.

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