FILED

United States Court of Appeals

Tenth Circuit

April 3, 2020

Christopher M. Wolpert

Clerk of Court

PUBLISH

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

NANCY LITTLE, individually and as

personal representative of the estate of

Robert L. Rabe,

Plaintiff - Appellee,

v. No. 19-3014

THE BUDD COMPANY, INC.,

Defendant - Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF KANSAS

(D.C. NO. 5:16-CV-04170-DDC)

Toby Crouse, Crouse, LLC, Overland Park Kansas (Vincent E. Gunter,

Rasmussen, Dickey & Moore, LLC, Kansas City, Missouri; and Clayton J. Kaiser,

Foulston Siefkin LLP,Wichita, Kansas, with him on the briefs), for Appellant.

John Roven, Roven-Kaplan, LLP, Houston, Texas (Blain D. Myhre, Blain Myhre,

LLC, Englewood, Colorado, with him on the brief), for Appellee.

Before HOLMES, MURPHY, and PHILLIPS, Circuit Judges.

MURPHY, Circuit Judge.
I. INTRODUCTION

Robert Rabe worked as a pipefitter in an Atchison Topeka & Sante Fe

Railroad (“ATSF”) repair shop. In that capacity, he replaced pipe insulation on

passenger cars manufactured by The Budd Company (“Budd”). Rabe died from

malignant mesothelioma. Nancy Little, individually and as personal

representative of Rabe’s estate, brought state common-law tort claims against

Budd, claiming Rabe died from exposure to asbestos-containing insulation

surrounding the pipes on Budd-manufactured railcars. A jury ruled in Little’s

favor. On appeal, Budd asserts Little’s state tort claims are preempted by the

Locomotive Inspection Act (“LIA”), 49 U.S.C. §§ 20701 to 20703. Budd’s theory

on appeal is that the claims are preempted because all passenger railcars are

“appurtenances” to a complete locomotive. See id. § 20701 (requiring all

locomotives and their appurtenances to comply with LIA); Kurns v. R.R. Friction

Prods. Corp., 565 U.S. 625, 637-38 (2012) (holding preempted all state tort

claims that attempt to regulate LIA-covered locomotive equipment). Because

Budd did not raise this issue before the district court, and because Budd does not

seek plain-error review, this particular assertion of error is waived. Alternatively,

Budd asserts Little’s tort claims are preempted by the Safety Appliance Act

(“SAA”), 49 U.S.C. §§ 20301 to 20306. This assertion, however, is foreclosed by

the Supreme Court’s decision in Atlantic Coast Line Railroad Co. v. Georgia, 234

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U.S. 280 (1914). Accordingly, this court exercises jurisdiction pursuant to

28 U.S.C. § 1291 and affirms the district court’s judgment.

II. BACKGROUND

Because the issues raised by Budd on appeal are purely legal in nature, the

relevant background facts are mostly procedural in nature. Because this appeal is

before this court following a jury verdict, we state the facts in the light most

favorable to the jury’s decision. See Macsenti v. Becker, 237 F.3d 1223, 1242

(10th Cir. 2001).

In 2012, Rabe died of malignant mesothelioma. Rabe was a pipefitter for

forty years with ATSF’s Topeka car shops, a maintenance facility for

non-motorized passenger railcars. No locomotives were serviced at ATSF’s car

shops. Budd, a manufacturer of passenger cars, sold hundreds of such cars to

ATSF during the 1950s and 1960s.

On arrival at the car shops, passenger cars were hoisted onto tripods to

reveal the undercarriage. The car shops employed pipefitters, like Rabe, who

worked under the cars removing, repairing, insulating, and reinstalling a maze of

steam, water, and air conditioning pipes. All types of pipe were insulated with

asbestos; a “cotton-like material” in a black jacket that wrapped around the pipes.

Over time, the black jacket deteriorated and the underlying asbestos disintegrated

into pieces and particles. After pipefitters stripped the old insulation away from

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the pipes, laborers disposed of it with shovels, brooms, and wheelbarrows. This

created dusty conditions in the car shops.

1

Steam, water, and air conditioning pipes ran alongside one another in the

undercarriage of Budd-manufactured passenger cars, with each type of pipe

having different terminal connections. Ultimately, after the cars were assembled

and assigned to trains, the steam pipes connected to either a boiler in the rear of

locomotives or steam generator cars containing their own boilers. These steam

generator cars were independent of, and unconnected to, any locomotive. Rabe

also worked on asbestos-wrapped air conditioning and water pipes. Each car had

its individual water tank and piping, not connected to the steam line. Budd’s

mechanical specifications revealed that each air conditioned car during Rabe’s

tenure had electro-mechanical compressors not powered by steam. Both water

and air conditioning pipes, therefore, had zero connection to any steam line or

locomotive.

After Rabe’s death, Little filed an action against Budd for survival and

wrongful death. In addition to other claims not at issue in this appeal, Little

asserted state law causes of action sounding in negligence, strict liability/design

defect, and failure to warn. In response, Budd filed a Fed. R. Civ. P. 12(c)

1Budd concedes Rabe’s mesothelioma was caused by exposure to asbestos.

Little v. Budd Co., 339 F. Supp. 3d 1202, 1220 (D. Kan. 2018).

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motion for judgment on the pleadings. Budd argued that, taken together, LIA and

SAA preempted all state-law claims, whether based on positive or common law,

relating to train equipment.

2

The district court denied Budd’s Rule 12(c) motion, concluding, at least at

the pleading stage, neither LIA nor SAA independently preempted Little’s claims

and, therefore, they did not do so jointly. Little v. Budd Co., No. 16-4170, 2018

WL 398458, at *5-9 (D. Kan. Jan. 12, 2018). As to LIA, the district court

concluded Little’s complaint did not conclusively establish that her state-law

causes of action were directed at the equipment of locomotives. Id. at *6 (citing

In re Asbestos Prods. Liab. Litig. (No. VI), 822 F.3d 125, 131 (3d Cir. 2016)).

The district court noted Little’s complaint did not establish either that

(1) passenger railcars are locomotives or (2) “pipe insulation in passenger railcars

is an ‘integral and essential part of a completed locomotive’” so as to qualify as a

part or appurtenance thereof. Id. (quoting S. Ry. Co. v. Lunsford, 297 U.S. 398,

2

In a reply in support of its Rule 12(c) motion, Budd made clear it was not

arguing, at that procedural juncture, that LIA independently preempted Little’s

state-law claims. Budd recognized questions of fact could exist as to whether

steam pipes were a possible appurtenance to a locomotive. In so recognizing,

Budd acknowledged it was litigating a case similar to Little’s in the Third Circuit,

In re Asbestos Products Liability Litigation (No. VI), 822 F.3d 125 (3d Cir. 2016).

At issue in Asbestos Litigation (No. VI) was whether asbestos-wrapped steam

pipes were appurtenances to a locomotive for purposes of LIA preemption. Id. at

131-36. The Third Circuit concluded material issues of fact existed as to that

question because there was at least some evidence the source of steam was

“power cars” rather than locomotives. Id. at 135.

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402 (1936)). As to SAA, the district court concluded its preemptive effect was

limited to railcar “safety appliances” and Little’s complaint did not establish that

the pipe insulation at issue in this case was a safety appliance for purposes of

SAA. Id. at *8. Finally, the district court indicated Budd had identified no

precedent for supporting its theory of “joint preemption.” Id. at *9 (“[T]his

argument theorizes that adding the two Acts together achieves a result that neither

Act, by itself, can achieve. [Budd] cites no case law that has reached such a

sweeping conclusion.”).

After the parties conducted discovery, Budd sought summary judgment. As

relevant to the issues on appeal, Budd’s summary judgment motion asserted as

follows: (1) Little’s tort claims were preempted by LIA because Rabe “was

injured from exposure to carcinogenic insulation that was part of a trainwide

heating system powered by the locomotive,” meaning “the heating system

constituted a locomotive appurtenance”; and (2) Little’s tort claims were

preempted by SAA because the asbestos “insulation constituted a railcar safety

appliance.”

The district court denied Budd’s motion for summary judgment. Little v.

Budd Co., 339 F. Supp. 3d 1202 (D. Kan. 2018). As to the question of LIA

preemption, the district court concluded there were disputed issues of fact that

precluded the determination as a matter of law that railcar heating systems were

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locomotive appurtenances. Id. at 1211-13. In particular, there was evidence in

the record indicating Budd “designed the main steam lines of all the passenger

rail cars to connect to each other and their power source—which sometimes

(albeit ‘most infrequently’) was a steam generator car, not a locomotive.” Id. at

1212. In addition, the district court noted evidence existed demonstrating that

asbestos insulation was used on water and air conditioning pipes, pipes that were

never connected to the steam lines or the locomotive. Id. at 1213. As to SAA

preemption, the district court ruled as follows:

the court concludes that Congress did not intend to occupy the entire

field of railcar safety appliances when it enacted the SAA. Instead,

the court concludes, Congress just intended to regulate the subject of

those devices that are listed in the statute. Plaintiff’s state law

claims here rest on her father’s exposure to asbestos-containing pipe

insulation. The SAA never lists pipe insulation as one of the safety

features that railroad carriers must attach to their railcars. The court

thus holds that the SAA does not preempt plaintiff's state law claims

based on asbestos-containing pipe insulation.

Id. at 1217 (quotation, citation, and footnote omitted). In denying Budd summary

judgment, however, the district court made clear Budd was entitled to reargue

both of its preemption defenses “on a full trial record.” Id. at 1218.

Before trial, both parties filed motions in limine to limit expert opinion

regarding the coverage of LIA and SAA. Little sought to prevent Budd’s

Industrial Hygienist from offering opinions that asbestos pipe covering

constituted a safety appliance. Budd sought to prevent Little’s expert, a retired

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Federal Railroad Administration (“FRA”) official, from explaining the FRA’s

application of LIA and SAA. The parties ultimately resolved these dueling

motions through a “Stipulation Regarding Federal Preemption.” Budd agreed not

to argue before the jury that pipe insulation was a safety appliance, a “device

intended for the safety of employees,” or a “locomotive part or appurtenance.”

Little agreed to withdraw the video of her FRA expert.

At the close of Little’s case, Budd filed a Fed. R. Civ. P. 50(a) “Motion for

Directed Verdict based on Federal Preemption.” The motion reasserted Budd’s

claim SAA preempts all forms of state regulation over railcar equipment intended

for the protection and safety of railroad employees, not just the specific safety

appliances listed in the Act. Notably, the issue of LIA preemption was not raised

in Budd’s Rule 50(a) motion. The district court denied Budd’s motion for a

directed verdict in an oral ruling from the bench, specifically noting it was

denying the motion for those reasons it previously articulated in denying Budd’s

request for summary judgment. At trial, Budd proposed no jury instructions or

factual submissions to the jury on either of its proffered preemption defenses.

The jury returned a verdict for Little. It concluded the total damages “sustained

by plaintiff Nancy Little, Individually and as Personal Representative of the

Estate of Robert L. Rabe” was $139,500.00. The jury further concluded that

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seven percent of the fault was attributable to Budd and ninety-three percent was

attributable to ATSF.

After the jury rendered a verdict in Little’s favor, Budd sought judgment as

a matter of law under Fed. R. Civ. P. 50(b). In addition to renewing the issue of

SAA preemption set out in its Rule 50(a) motion, Budd also attempted to

revitalize its LIA preemption defense. As to the issue of LIA preemption, Budd

claimed “factual testimony from [Little’s] witnesses,” proved “insulated steam

lines were appurtenances to the locomotive.” The district court denied that

portion of Budd’s Rule 50(b) motion based on SAA preemption for the reasons it

previously articulated in denying Budd’s motion for summary judgment. As to

the issue of LIA preemption, the district court assumed, without deciding, that

Budd did not waive the issue by failing to raise it in its Rule 50(a) motion. It

concluded, nevertheless, that Budd’s motion failed on the merits:

[Little] asserts that [Budd] failed to offer evidence at trial

establishing that its pipe insulation is a locomotive appurtenance as a

matter of law. The court agrees. [Budd] cites . . . trial testimony . . .

that [Budd’s] insulated steam pipes ran under the railcars and

connected directly to locomotives. But that wasn’t the only evidence

the jury heard on this issue. [Little] presented evidence that decedent

was exposed to asbestos dust from insulation covering

air-conditioning and water lines running under [Budd’s] railcars.

Those pipes connected to a water tank—not the locomotive. The

parties never asked the jury to decide—explicitly—whether [Budd’s]

steam pipes qualify as a locomotive appurtenance. But from the facts

adduced at trial, it was reasonable for the jury to conclude that the

decedent was exposed to asbestos dust from equipment that never

connected to the locomotive. Thus, on the evidentiary record created

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during the trial, the court cannot conclude that the LIA preempts

[Little’s] claims as a matter of law.

III. ANALYSIS

On appeal, Budd contends the district court erred in determining Little’s

state common law tort claims are not preempted by LIA or SAA. To the extent

the preemption issues advanced by Budd on appeal are preserved, this court’s

review is de novo. Cerveny v. Aventis, Inc., 855 F.3d 1091, 1096 (10th Cir. 2017)

(holding that existence of federal preemption is a legal issue). On the other hand,

absent extraordinary circumstances, arguments raised for the first time on appeal

are waived. McDonald v. Kinder-Morgan, Inc., 287 F.3d 992, 999 (10th Cir.

2002). This is true whether the newly raised argument is “a bald-faced new issue

or a new theory on appeal that falls under the same general category as an

argument presented at trial.” Id. (quotations omitted); see also Lyons v. Jefferson

Bank & Tr., 994 F.2d 716, 721 (10th Cir. 1993) (“[A] party may not lose . . . on

one theory of the case, and then prevail on appeal on a different theory.”).

A. LIA

On appeal, Budd argues Little’s state common law claims are preempted by

LIA because passenger railcars are locomotive appurtenances. As should be clear

from the procedural recitation set out above, however, Budd never made this

argument at any point before the district court. Instead, Budd argued asbestos-

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wrapped pipes that delivered steam from the locomotive to the railcar heating

systems were locomotive appurtenances.

For instance, Budd’s motion for summary judgment specifically argued it

was the heating system that was an appurtenance for purposes of LIA preemption.

App. at 266 (“Little claims that her father was injured from exposure to

carcinogenic insulation that was part of a trainwide heating system powered by

the locomotive. Are Counts 1–3 preempted because the heating system

constituted a locomotive appurtenance?”). At no point in that motion did Budd

ever assert the relevant unit of assessment for purposes of resolving the question

of LIA preemption was the entire railcar. Instead, Budd’s summary judgment

memorandum was laser-focused on the asbestos-wrapped pipes:

The LIA preempts all State regulation of locomotive

appurtenances. Ms. Little alleges that her father was exposed to

railcar pipe insulation that contained asbestos. Budd manufactured

railcars with a main steam pipe that ran underneath the railcar, which

was designed to attach to the same pipe underneath other railcars and

to the locomotive. The locomotive supplied steam to these pipes to

heat the trailing railcars. Budd wrapped the pipes with insulation

containing asbestos.

This kind of interconnected heating system qualifies as a

locomotive appurtenance, as the word appurtenance was understood

when Congress enacted the LIA:

Ap*purt*e*nance (#), n. . . . an adjunct; an appendage;

an accessory; something annexed to another thing more

worthy . . . .

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Importantly, the word adjunct meant “something joined or

added to another thing, but not essentially a part of it.” This

describes the heating system perfectly.

One district court has agreed that a trainwide heating system

powered by the locomotive is a locomotive appurtenance. In In re

Asbestos Products Liability Litigation, the Eastern District of

Pennsylvania ruled that asbestos claims based on exposure to pipe

insulation are preempted when the insulation was part of the heating

system powered by the locomotive.

App. at 273-74 (footnotes omitted). Then again, in the conclusion of its

memorandum in support of summary judgment, Budd asserted Little’s state-law

claims were preempted because “[t]he heating system is a locomotive

appurtenance because it was designed to be connected to, and powered by, the

locomotive.” Likewise, Budd’s Rule 50(b) motion was focused exclusively on the

argument it was the insulated steam pipes that constituted an appurtenance.

Furthermore, in making that argument, Budd recognized that was the argument it

had made throughout the case before the district court:

In prior motions and memoranda defendant Budd advanced the

position that the insulated steam pipes running under the railcars are

appurtenances to the locomotive since they are connected directly to

the locomotive. The court denied the pretrial motions for a variety of

reasons, one being factual. At trial witnesses James Shaw and Nate

Morales testified that the insulated steam pipes running under the

railcars, which is what plaintiff proved exposure to, were connected

directly to the locomotives which generated the steam. Therefore,

there is an ample evidentiary predicate for a finding as a matter of

law that plaintiff’s claims are preempted under the LIA because the

insulated steam lines are appurtenances to the locomotive. . . .

App. at 1596-97.

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The record verifies that at no point in the proceedings before the district

court did Budd ever argue that Little’s state-law claims were preempted because

each and every railcar is an appurtenance to the locomotive to which it is

attached. Because the issue was not raised below, and because Budd has not

offered any (let alone an extraordinary) justification for its failure to do so, this

issue is waived. McDonald, 287 F.3d at 999; see also Richison v. Ernest Group,

Inc., 634 F.3d 1123, 1128 (10th Cir. 2011).

3

3

In attempting to resist this conclusion, Budd asserts it raised the issue in

its Rule 12(c) motion. In particular, Budd cites to pages 104-07 of the appendix,

a portion of its Rule 12(c) motion asserting LIA and SAA, jointly, result in

“trainwide preemption.” This assertion is based on a mischaracterization of the

record. At no point in its Rule 12(c) arguments in favor of trainwide preemption

does Budd assert such preemption flows from the railcar’s status as an

appurtenance to a locomotive. Instead, Budd argued LIA and SAA broadly

preempt the entire field of train safety equipment, without regard to whether the

relevant device or part is a locomotive appurtenance or listed in the SAA. Indeed,

Budd made this point crystal clear in its reply in support of its Rule 12(c) motion

when it argued as follows:

Budd argues that the two statutes operate in tandem to preempt

State regulation of train equipment. For this reason, Lunsford [a

Supreme Court case dealing with LIA preemption] is irrelevant to

this Motion. It matters not whether a piece of equipment is a

locomotive part or appurtenance or railcar safety equipment. If the

LIA and the SAA preempt State regulation of train equipment—and

they do for the reasons argued in this Reply and in Budd’s opening

brief—then it is irrelevant how any individual piece of equipment is

characterized.

App. at 214. Thus, even under the most solicitous reading, it cannot be

reasonably argued that Budd’s Rule 12(c) motion raised and preserved the theory

(continued...)

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B. SAA

SAA “govern[s] common carriers by railroad engaged in interstate

commerce.” Gilvary v. Cuyahoga Valley Ry. Co., 292 U.S. 57, 60 (1934). It

requires railroad carriers to equip railcars with listed safety features, including

designated types of couplers, brakes, running boards, and handholds. 49 U.S.C.

§ 20302(a). The list of required features set out in § 20302(a) does not include

insulation of any kind. Nevertheless, Budd asserts the asbestos insulation at issue

in this case relates to railroad worker safety and is, thus, regulated by SAA. That

is, Budd asserts, whether by statute or common law cause of action, states cannot

regulate any railcar safety device whether the device is listed or not in SAA.

Budd’s strikingly broad proposition is foreclosed by the Supreme Court’s

decision in Atlantic Coast Line Railroad Co. v. Georgia, 234 U.S. 280 (1914). In

Atlantic Coast Line, the Court addressed a railroad company’s challenge to a

Georgia statute mandating headlights on locomotives. The railroad company

claimed, inter alia, that with SAA, Congress had occupied the field to “promote

the safety of railway operations.” Id. at 293. Atlantic Coast Line decisively

rejected this argument, concluding SAA’s preemptive field applied only to those

safety devices listed in the Act. Id. at 293-94 (“It does not appear, however, . . .

3

(...continued)

it advances on appeal in support of preemption.

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that Congress . . . has established any regulation so far as headlights are

concerned. As to these, the situation has not been altered by any exertion of

Federal power, and the case stands as it has always stood; without regulation,

unless . . . supplied by local authority.”); see also Little, 339 F. Supp. 3d at 1215-

16 (discussing at length the decision in Atlantic Coast Line).

Budd asserts, however, that the Supreme Court broadened the preemptive

reach of SAA with its decisions in Southern Railway Co. v. Railroad Commission

of Indiana, 236 U.S. 439, 446 (1915), and Gilvary, 292 U.S. at 60-61. This

argument is entirely unconvincing. It is certainly true, as recognized by the

district court, that the Supreme Court used “more sweeping language” in these

cases to describe the scope of SAA preemption. Little, 339 F. Supp. 3d at 1216.

That language, however, must be considered in context. In both Southern

Railway and Gilvary, the Court was dealing with safety devices specifically listed

in SAA. S. Ry., 236 U.S. at 444 (grab irons)

4

; Gilvary, 292 U.S. at 52 (automatic

coupler).

5 Given that both Southern Railway and Gilvary involve covered safety

devices, in which preemption is obvious, and that neither purported to alter or

4

See 49 U.S.C. § 20302(a)(2) (requiring “secure grab irons or handholds”

on the ends and sides of a covered “vehicle” “for greater security to individuals in

coupling and uncoupling vehicles”).

5

See 49 U.S.C. § 20302(a)(1)(A) (requiring use of “couplers coupling

automatically by impact, and capable of being uncoupled, without the necessity of

individuals going between the ends of the vehicles”).

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overrule Atlantic Coast Line, Atlantic Coast Line remains binding as to the

nonpreemptive effect of SAA on devices not specifically listed in the Act. This is

especially true given that the Supreme Court has continued to rely on Atlantic

Coast Line in noting the limited preemptive impact of SAA. See Atchison, T. &

S.F. Ry. Co. v. Scarlett, 300 U.S. 471, 475 (1937) (holding that when the claim

involved an allegedly negligently placed brace rod, a piece of equipment not

listed in SAA, “[t]he law to be applied . . . is the common-law rule of negligence,

and not the inflexible rule of the [SAA]”); Napier v. Atl. Coast Line R. Co., 272

U.S. 605, 611 (1926) (“Does the legislation of Congress manifest the intention to

occupy the entire field of regulating locomotive equipment? Obviously, it did not

do so by the [SAA], since its requirements are specific.”).

Alternatively, assuming this court is unconvinced by its argument that the

Supreme Court has abandoned its holding in Atlantic Coast Line, Budd asks this

court to assume the Supreme Court would do so if presented with the question. In

so arguing, Budd notes that in the years after the decision in Atlantic Coast Line,

the Supreme Court has adopted a much more robust form of preemption as to

matters within the cognizance of LIA. See Kurns, 565 U.S. at 631-34 (describing

capacious nature of LIA preemption). In so arguing, Budd is asking this court to

undertake an analysis the Supreme Court has indicated is forbidden. That is, even

entertaining the dubious assumption that the analysis in Atlantic Coast Line is

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somehow inconsistent with the analytical approach the Supreme Court later

adopted in analyzing LIA, it is the Supreme Court’s prerogative to reconcile the

two inconsistent lines of precedent. The Supreme Court has made clear that if

one of its precedents “has direct application in a case, yet appears to rest on

reasons rejected in some other line of decisions, the Court of Appeals should

follow the case which directly controls, leaving to this Court the prerogative of

overruling its own decisions.” Agostini v. Felton, 521 U.S. 203, 237 (1997)

(quotation and citation omitted).

Because Atlantic Coast Line is directly on point and specifically holds that

SAA does not preempt state common-law suits involving railcar safety as long as

the suit does not relate to one of the listed devices, it resolves this issue. Little’s

state-law claims relate to asbestos-wrapped pipes, a matter not regulated by SAA.

Those claims, therefore, are not preempted by SAA.

IV. CONCLUSION

For those reasons set out above, the judgment in favor of Little entered by

the United States District Court for the District of Kansas is hereby AFFIRMED.

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