Opinion ID: 3026300
Heading Depth: 4
Heading Rank: 1

Heading: Susquehanna’s Control over the

Text: Transloading Process Our Hi Tech decision dealt with whether transloading activities were performed “by a rail carrier.” Hi Tech Trans, LLC v. N.J., 382 F.3d 295, 308–10 (3d Cir. 2004). In that case, we noted that Hi Tech, the transloader, operated the transloading facility under a license agreement with CPR, the rail carrier and owner of the land. Id. at 308. Hi Tech constructed and maintained the facility. Id. Moreover, the license agreement established that Hi Tech was not CPR’s agent, and CPR disclaimed any liability from Hi Tech’s operations. Id. CPR did not charge shippers a fee for using the Hi Tech transloading 28 facility (presumably, the shippers paid Hi Tech for the service). Id. This case is different because (1) the rail carrier owned (or leased) the land and built the transloading facilities, (2) shippers pay the rail carrier to load their freight, and (3) the rail carrier does not disclaim liability for the loading process. The Board noted that the Hi Tech situation was “substantially different from a situation in which a rail carrier builds and owns a truck-to-rail transloading facility, and holds it out to the public as its own facility, but chooses to have a contract operator,” which, presumably, would qualify as transportation by rail carrier. Hi Tech Trans, LLC (Hi Tech STB), 2003 WL 21952136, at  n.13 (denying request for a declaratory order). Relying on this language, the District Court concluded that our case is just what the Board describes: a rail carrier (Susquehanna) building, owning, and advertising its own transloading facilities, which it uses a contract agent to operate. While the District Court’s conclusion that this case is distinguishable from Hi Tech is correct, a footnote from our Hi Tech decision complicates the issue. We wrote that “[w]e do not . . . suggest that a party can contractually determine its status as a railroad carrier for regulatory purposes.” 382 F.3d at 308 n.19. This is a perplexing statement because the contract before us obviously plays some role in determining the “nature of [the loader’s] . . . relationship to [the railroad].” Id. That is, after all, why it exists—to define the parties’ relationship. Our point in 29 Hi Tech, though, was that railroads and loaders may not change by contract what in practice is a substantively different relationship. Here, Susquehanna contracts with shippers to load their waste, which it then pays a loading agent to do on its behalf. In Hi Tech, the loader contracted with shippers directly. The State argues that this is a distinction without a material difference, as Susquehanna essentially just funneled money from shipper to loader (often the exact same amount). The difference, however, is that Susquehanna, by contracting directly with the shipper, assumed more liability than the Hi Tech rail carrier. Susquehanna could be sued for breach of contract (or potentially negligence or some other tort) if something went wrong; the Hi Tech railroad could not, as it was not a party to the shippers’ and loaders’ agreements. We regard this as a substantive difference between the Hi Tech case and this one, and therefore conclude that the District Court appropriately distinguished it.