FILED

United States Court of Appeals

Tenth Circuit

March 10, 2008

Elisabeth A. Shumaker

Clerk of Court

FILED

United States Court of Appeals

Tenth Circuit

March 10, 2008

Elisabeth A. Shumaker

PUBLISH Clerk of Court

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

PORT CITY PROPERTIES, an Oklahoma

corporation d/b/a Hodges Warehouse;

ALPINE PROPERTIES, LLC, an Oklahoma

limited liability company,

Plaintiffs-Appellants,

v.

UNION PACIFIC RAILROAD COMPANY,

a corporation,

Defendant-Appellee.

No. 06-5187

Appeal from the United States District Court

for the Northern District of Oklahoma

(D.C. No. 06-CV-321-JHP-FHM)

Kenneth L. Brune of Brune Law Firm, Tulsa, Oklahoma, for Plaintiffs-Appellants.

Christopher D. Wolek (Tom L. Armstrong, Robert D. Hart, and Laura L. Eakens

with him on the brief) of Gibbs Armstrong Borochoff Mullican & Hart, P.C.,

Tulsa, Oklahoma, for Defendants-Appellees.

Before KELLY, SEYMOUR, and MURPHY, Circuit Judges.

SEYMOUR, Circuit Judge.
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Port City Properties, Inc. d/b/a Hodges Warehouse and Alpine Properties,

LLC (collectively “Hodges”) appeal the district court’s denial of their request for

a preliminary injunction against Union Pacific Railroad Company (“Union

Pacific”). We affirm.

I

Hodges owns and operates a commercial public warehouse in an industrial

park located in Tulsa, Oklahoma. An industrial rail track is routed through the

park with rail service provided to Hodges’ warehouse via an additional private

track owned by Hodges. After Union Pacific determined the industrial rail track

servicing the warehouse was no longer safe, it ceased rail service thereon. 

Hodges brought this action against Union Pacific, alleging breach of contract,

tortious interference with business relations, and defamation. In pursuing those

claims, Hodges moved for a preliminary injunction to enjoin Union Pacific from

ceasing rail operations servicing his warehouse and from informing others that

Hodges could not receive shipments by rail. Hodges also moved for an order

directing Union Pacific to maintain and operate the line.

The matter was referred to a magistrate judge who held an evidentiary

hearing on the motion for preliminary injunction. The judge issued a Report and

Recommendation determining that all of Hodges’ claims, except for the breach of

contract claim, were preempted by the Interstate Commerce Commission
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Termination Act (“ICCTA”), 49 U.S.C. § 10101 et seq. The judge also

recommended that the district court deny Hodges’ motion for preliminary

injunction based on the breach of contract claim. The district court adopted the

Report and Recommendation and affirmed.

II

We review the district court’s determination on jurisdiction de novo. 

Prairie Band of Potawatomi Indians v. Pierce, 253 F.3d 1234, 1241 (10th Cir.

2001). We review the district court’s denial of a preliminary injunction for abuse

of discretion. Utah Licensed Beverages Ass’n v. Leavitt, 256 F.3d 1061, 1065

(10th Cir. 2001).

A. Jurisdiction

 Section 10501(b) of the ICCTA broadly grants jurisdiction to the Surface

Transportation Board (“STB”) over “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 . . . .” 49 U.S.C. § 10501(b)(2). This broad jurisdictional

grant is coupled with an express preemption clause mandating that “[e]xcept 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.” 49 U.S.C. § 10501(b). As a consequence,
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jurisdiction over “spur, industrial, team, switching or side tracks, or facilities”

rests solely with the STB. 49 U.S.C. § 10501(b)(2); see also United Transp.

Union Ill.-Legis. Bd. v. Surface Transp. Bd., 183 F.3d 606, 612 (7th Cir. 1999). 

In 49 U.S.C. § 10906, however, Congress provided that entities may construct,

transfer or operate spur or industrial tracks without STB approval. Hodges

contends § 10906’s withdrawal of authority from the STB creates a jurisdictional

void, thereby permitting jurisdiction over state causes of action related to such

tracks. 

To the contrary, § 10906 has been interpreted to preclude all regulation of

industrial or spur tracks: “When sections 10906 and 10501(b)(2) are read

together, it is clear that Congress intended to remove [STB] authority over the

entry and exit of these auxiliary tracks, while still preempting state jurisdiction

over them, leaving the construction and disposition of [them] entirely to railroad

management.” Cities of Auburn and Kent, 2 S.T.B. 330, 1997 WL 362017 at *7

(1997); see also Report on ICCTA, H.R. Rep. No. 104-422, 104th Cong., 1st.

Sess. 167 (1995) (explaining that § 10501(b)(2) was added “[i]n light of the

exclusive Federal authority over auxiliary tracks and facilities . . . .”). In short,

read together, § 10501 and § 10906 completely preempt Hodges’ state law tort

claims with respect to spur or industrial tracks. See, e.g., PCI Transp. v. Fort

Worth & Western R.R., 418 F.3d 535, 545 (5th Cir. 2005) (ICCTA completely

preempts non-contractual claims); Friberg v. Kansas City S. Ry. Co., 267 F.3d
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439, 444 (5th Cir. 2001) (ICCTA preempts claims of negligence and negligence

per se with respect to railroad’s alleged road blockages); Pejepscot Indus. Park,

Inc. v. Maine Cent. R.R. Co., 297 F.Supp.2d 326, 334 (D. Me. 2003) (state law

claims preempted by ICCTA); South Dakota ex rel. South Dakota R.R. Auth. v.

Burlington N. & Santa Fe Ry. Co., 280 F.Supp.2d 919, 934-35 (D.S.D. 2003)

(state law claims for punitive damages and tortious interference preempted by

ICCTA); Guckenberg v. Wis. Cent. Ltd., 178 F.Supp.2d 954, 958 (E.D. Wis.

2001) (state law nuisance claim preempted with respect to railway traffic issue);

Rushing v. Kan. City S. Ry. Co., 194 F.Supp.2d 493, 500-01 (S.D. Miss. 2001)

(ICCTA preempts state law nuisance and negligence claims intended to interfere

with railroad’s operation of switchyard).

In an attempt to avoid this result, Hodges seems to argue the track at issue

was not a spur or industrial track, but rather a regular railroad line subject to STB

jurisdiction. Factors used to determine whether a section of track is an extension

of a regular railroad line, as opposed to a “spur” or “industrial” track, include

whether the railroad maintains a train schedule or regular service over the track;

furnishes express, passenger, or mail service; maintains buildings, loading

platforms, or an agent along the trackage; and who completes the bills of lading. 

See Chicago, M., St. P. & P.R. Co. v. Chicago & E.I.R. Co., 198 F.2d 8, 12 (7th

Cir. 1952). It is also relevant whether the track has been or is to be used for

anything other than industrial delivery, see La. & Ark. Ry. Co. v. Mo. Pac. R.R.
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Co., 288 F.Supp. 320, 323 (D.C. La. 1968), the length of the track, whether the

track serves only a single customer, and whether the customer requested the

carrier to provide service. See Hughes v. Consol-Pa. Coal Co., 945 F.2d 594, 612

(3d Cir. 1991). 

The burden of establishing subject matter jurisdiction is on the party

asserting jurisdiction. See Basso v. Utah Power and Light Co., 495 F.2d 906, 909

(10th Cir.1974). Hodges presented no evidence that the track was a main line

within the meaning of the cases cited above. The only evidence that the track was

something other than a spur or industrial track was the testimony of Hodges’

owner, Dennis Kriz, who referred to it as a “lead track,” a term we do not find in

the statute. The evidence in the record establishes that the Katy Industrial Park

was created in 1956. The Missouri-Kansas-Texas Railroad Company (the

predecessor to Union Pacific) extended railroad tracks into the industrial park to

service businesses located there. In 1966, the railroad contracted with Hodges to

extend its “spur track” to connect with a “spur track” Hodges agreed to build on

its property. Aplt. App. at 218 (1966 Agreement). In 1999, when part of Union

Pacific’s “industrial lead track” in the Katy Industrial Park needed rehabilitation,

Hodges agreed to pay $62,000 to Union Pacific for the materials and work

necessary for the railroad to repair the line. Id. at 196 (1999 Agreement). These

documents reference the track at issue here and support the district court’s

conclusion that the track was an industrial or spur track. 
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Hodges also argues against preemption on the grounds that Union Pacific

was required to obtain prior permission from the STB for abandonment of its

service to the track pursuant to 49 U.S.C. § 10903(a)(1)(A) (rail carrier must file

application with STB if it intends to “abandon any part of its railroad lines”). As

discussed previously, the STB has no authority over the regulation of spur and

industrial tracks as opposed to main railroad lines. That authority is left entirely

to railroad management who may contract services as they see fit. As a result,

there was no requirement that Union Pacific request authorization for

abandonment from the STB.

In sum, Congress granted exclusive jurisdiction to the STB over the

construction, operation, and abandonment of spur or industrial lines, thereby

precluding state regulation. Congress then specifically withdrew regulation of

such lines from the STB, leaving their management solely to the respective

railroads.

B. Preliminary Injunctive Relief Based on Breach of Contract

 To obtain a preliminary injunction based on a contract, Hodges was

required to meet the test established in this circuit: 

It is well established that in order to obtain a preliminary injunction,

the moving party must establish four factors: (1) it will suffer

irreparable harm if the injunction is not granted, (2) its threatened

injury outweighs the harm caused to the opposing party as a result of

the injunction, (3) the injunction is not adverse to the public interest,

and (4) it has a substantial likelihood of success on the merits of the

case. In examining these factors, courts have consistently noted that
1

Hodges asserts the district court abused its discretion by limiting the scope

of evidence it would consider in making its determination on Hodges’ right to

injunctive relief. But Hodges did not raise this issue in his objection to the

Report and Recommendation and it was therefore waived. See United States v.

One Parcel of Real Property, 73 F.3d 1057, 1060 (10th Cir. 1996) ( “[A] party’s

objections to the magistrate judge’s report and recommendation must be both

timely and specific to preserve an issue for de novo review by the district court or

for appellate review.”). 

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because a showing of probable irreparable harm is the single most

important prerequisite for the issuance of a preliminary injunction,

the moving party must first demonstrate that such injury is likely

before the other requirements for the issuance of an injunction will

be considered.

Dominion Video Satellite, Inc. v. Echostar Satellite Corp., 356 F.3d 1256, 1260

(10th Cir. 2004) (citations and internal quotations omitted). “Likewise, because a

preliminary injunction is an extraordinary remedy, the right to relief must be clear

and unequivocal.” Id. (quotations and citations omitted).

A showing of irreparable harm requires that the injury “be both certain and

great, . . . and that it must not be merely serious or substantial.” Prairie Band,

253 F.3d at 1250 (internal citation and quotations omitted). The district court

determined that Hodges failed to show irreparable harm. Having reviewed the

record, we agree.1

 Mr. Kriz testified that the rail cargo he receives is a “small

part of [his] business.” Aplt. App. at 133. Further, he noted that loss of rail

service was “not going to put [him] out of business, but it definitely [was] costing

[him] money.” Id. at 136. Mr. Kriz also admitted that Union Pacific made

alternative arrangements for delivery of Hodges products and paid for them to be
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unloaded at another location a mile away. As the district court explained,

Hodges’ loss of business can be compensated in money damages. Economic loss

“usually does not, in and of itself, constitute irreparable harm. . . .” Heideman v.

South Salt Lake City, 348 F.3d 1182, 1189 (10th Cir. 2003) (citing 11A CHARLES

ALAN WRIGHT, ARTHUR R. MILLER & MARY KAY KANE, FEDERAL PRACTICE &

PROCEDURE § 2948.1, at 152-53 (2d. ed. 1995). Hodges has offered no evidence

demonstrating the type of loss that satisfies the element of irreparable harm. 

In addition, the district court held that Hodges failed to show a likelihood

of success on the merits because it offered no evidence of a contract requiring

Union Pacific to provide rail service to it. Hodges contends on appeal that the

district court erroneously relied on the 1966 Agreement between the parties in

making this determination. Hodges claims this is not the contract requiring “rail

service between Union Pacific and Hodges.” Aplt. Br. at 21. However, the 1999

Agreement, the document Hodges apparently relies on, was specifically

referenced by the court. As the court concluded, while the 1999 Agreement “may

support a subjective expectation of continued rail service for some period of time

after October 1, 1999, nothing within the [1999] Agreement obligates [Union

Pacific] to provide continued rail service to [Hodges’] warehouse for any period

of time.” Aplt. App. at 77. In fact, that agreement provided for termination upon

ten days’ notice. There is no contract for rail service by Union Pacific to Hodges’

warehouse. Accordingly, Hodges cannot show a likelihood of success on the
2

In his argument on likelihood of success, Hodges also contends Union

Pacific is a common carrier and is thereby required to provide rail service to

Hodges’ warehouse. Hodges did not specifically raise the issue of common

carrier status in his objection to the Report and Recommendation, and the issue is

therefore waived. See One Parcel of Real Property, 73 F.3d at 1060. 

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merits.2

 See PCI Transp., Inc., 418 F.3d at 545 (plaintiff cannot show likelihood

of success on contractual claim without evidence of contract). 

Without a showing of either of these two key preliminary injunction

factors, Hodges cannot succeed on its contention that the district court abused its

discretion when it determined Hodges was not entitled to a preliminary

injunction. The district court also correctly held that Hodges’ state law tort

claims were completely preempted by the relevant provisions of the ICCTA.

We AFFIRM.