Opinion
NO. 1:00CV484-B-D
May 30, 2002
MEMORANDUM OPINION
This cause comes before the court on the following motions: the motion for partial judgment as to the issue of federal preemption filed by the Board of Supervisors of Alcorn County, Mississippi [Board of Supervisors], the motion to dismiss or, in the alternative, for summary judgment filed by Illinois Central Railroad Company [Illinois Central], the joint motion for summary judgment filed by Mississippi-Alabama Railroad Authority [MARA] and Redmont Railway Company, Inc. [Redmont] and the motion for summary judgment filed by Norfolk Southern Railway Company [Norfolk Southern]. Having held oral argument on these motions on May 13, 2002 and upon due consideration of the parties' memoranda and exhibits, the court is ready to rule.
I. FACTS
At issue in this declaratory action is an order issued by the Board of Supervisors on October 2, 2000 requiring Norfolk Southern, MARA and Redmont to pay the costs of increasing the weight limits of five overhead bridges in Alcorn County, Mississippi. The following facts are undisputed. For an unspecified number of years prior to 1988, Illinois Central owned and operated railroad tracks stretching from Fulton, Kentucky to Haleyville, Alabama that passed through Alcorn County, Mississippi. Illinois Central sold the line in 1988 to Norfolk Southern. In 1995, after a few years of operation, Norfolk Southern considered abandoning a section of the line here under consideration, but decided rather to convey it to MARA, which presently owns the tracks. Redmont agreed to lease the line acquired by MARA and has operated the line since that time. It was stipulated at the hearing on this matter that the section of the line presently owned by MARA and operated by Redmont covers only forty-one miles and services only a single train per week on behalf of one business, a petfood manufacturer.
Shortly prior to the date of the order at issue, Alcorn County's engineers examined the weight-bearing limits of five public roadway bridges that traverse over the tracks owned by MARA and operated by Redmont and thereby discovered that the maximum capacity of each bridge was well below the average weight of a school bus. In response to the finding of the county engineers, the Board of Supervisors rerouted its school buses and issued the order mandating Norfolk Southern, MARA and Redmont to pay an estimated cost of $1,905,000 to increase the weight capacity of the bridges so that school buses can safely travel over them. Illinois Central was not named in the order. The order was expressly issued pursuant to Miss. Code. § 77-9-251 which imposes a duty on railroad companies to "erect and keep in order" bridges at railroad-highway crossings.
According to the Board of Supervisors' order, the weight of an average loaded school bus is 24,000 lbs. The same order listed the weight-bearing capacity of the bridges as follows:
Miss. Code. § 77-9-251 provides:
It shall be the duty of the railroad company to erect and keep in order all bridges on any highway, at such points as bridges may be necessary to cross the railroad. Any company which shall fail to comply with these provisions within sixty days from the filing of written notice by the board of supervisors of the county in which the said crossing is located, served upon the agent of said railroad company located . . . shall forfeit the sum of the cost of construction of said bridge or crossing, to be recovered by action in the name of the county in which the bridge or crossing is situated, upon an itemized bill of cost of said work.
Norfolk Southern filed the instant action on December 5, 2000, requesting this court to declare the Board of Supervisors' order and Miss. Code. § 77-9-251 as void and to permanently enjoin the Board of Supervisors from enforcing the order. The complaint names the Board of Supervisors, MARA, Redmont and Illinois Central as co-defendants. Shortly thereafter, the Board of Supervisors filed cross-claims against MARA and Redmont. On May 13, 2002, the court held a hearing on the motions filed in this cause. At the hearing the parties stipulated the absence of a factual dispute with respect to Illinois-Central's liability; accordingly, the court issued a bench ruling granting Illinois-Central's summary judgment motion, leaving MARA, Redmont, Norfolk Southern and the Board of Supervisors as the remaining parties in this action.
II. LAW/DISCUSSION
A. Summary Judgment Standard
On a motion for summary judgment, the movant has the initial burden of showing the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 91 L.Ed.2d 265, 275 (1986) ("the burden on the moving party may be discharged by `showing' . . . that there is an absence of evidence to support the non-moving party's case"). Under Rule 56(e) of the Federal Rules of Civil Procedure, the burden shifts to the non-movant to "go beyond the pleadings and by . . . affidavits, or by the `depositions, answers to interrogatories, and admissions on file,' designate `specific facts showing that there is a genuine issue for trial.'" Celotex Corp., 477 U.S. at 324, 91 L.Ed.2d at 274. That burden is not discharged by "mere allegations or denials." Fed.R.Civ.P. 56(e). All legitimate factual inferences must be made in favor of the non-movant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 91 L.Ed.2d 202, 216 (1986). Rule 56(c) mandates the entry of summary judgment "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp., 477 U.S. at 322, 91 L.Ed.2d at 273. Before finding that no genuine issue for trial exists, the court must first be satisfied that no reasonable trier of fact could find for the non-movant. Matsushita Elec. Indus. v. Zenith Radio Corp., 475 U.S. 574, 587, 89 L.Ed.2d 538, 552 (1986).
B. Board of Supervisors' Partial Summary Judgment on ICCTA Preemption
The Supremacy Clause of the United States Constitution provides that "the Laws of the United States . . . shall be the supreme law of the land." U.S. Const. art VI, cl.2. As such, any state law that conflicts with federal law is preempted and thus "without effect." Cippollone v. Liggett Group, Inc., 505 U.S. 504, 516, 120 L.Ed.2d 407, 422 (1992). The United States Supreme Court has identified three forms of preemption: (1) express preemption, where Congress explicitly defines the extent to which its enactments preempt state law; (2) field preemption, where state law regulates conduct in a field that Congress intended the federal government to occupy exclusively; and (3) conflict preemption, where it is impossible to comply with both state and federal laws, or where state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress. English v. General Elec. Co., 496 U.S. 72, 78-79, 110 L.Ed.3d 65, 74 (1990). The overriding concern in any preemption analysis is the intent of Congress in enacting the federal law. Fidelity Federal Savings Loan Ass'n v. de la Cuesta, 458 U.S. 141, 152, 73 L.Ed.2d 664, 675-676 (1982).
Congress in 1995 significantly changed federal regulation of the railroad industry by enacting the Interstate Commerce Commission Termination Act [ICCTA], 49 U.S.C. § 701 et seq. ICCTA granted a newly-established regulatory agency, the Surface Transportation Board [STB], jurisdiction over rail transportation in both interstate and intrastate commerce. ICCTA provides:
(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.49 U.S.C. § 10501. The issue before the court is whether this express provision preempts Miss. Code § 77-9-251 and the Board of Supervisors' order.
As a general rule, there is a presumption, especially in fields where the states have traditionally reigned, that historic police powers should not be preempted by the federal statutes unless preemption was "the clear and manifest purpose of Congress." Medtronic, Inc. v. Lohr, 518 U.S. 470, 485, 135 L.Ed.2d 700, 715 (1996). The principle gives way, however, when the state or local law at issue bears upon "an area where there has been a history of significant federal presence." United States v. Lock, 529 U.S. 89, 108,146 L.Ed.2d 69, 88 (2000). MARA and Redmont maintain that given Congress' long-established domain over the railroad industry, the traditional presumption against preemption should not apply to this action. At issue in this cause, however, is not the railroad industry generally, but the specific matter of bridges over rail-highway crossings. It has been consistently held that state and local governments have the traditional police power reserved by the United States Constitution to regulate rail-highway crossings and allocate the costs of constructing, maintaining and improving such crossings to railroad companies. See, e.g., Atchison, T. S.F. Ry. Co. v. Public Utilities Commission of California, 346 U.S. 346, 98 L.Ed. 51 (1953); Lehigh Valley R. Co. v. Board of Public Utility Commissioners, 278 U.S. 24, 73 L.Ed. 161 (1928); Erie R. Co. v. Board of Public Utility Commissioners, 254 U.S. 394, 65 L.Ed. 322 (1921); Southern Ry. Co. v. City of Morristown, 448 F.2d 288 (6th Cir. 1971), cert. denied, 405 U.S. 922, 30 L.Ed.2d 792 (1972). Miss. Code § 77-9-251, which requires railroad companies to "make proper and easy grades" at rail-highway crossings and "erect and keep in order" all bridges at such crossings, is consistent with the police power of states and local governments to regulate crossings discussed in the aforementioned cases. Accordingly, the court finds that the traditional presumption against supplanting historic state or local police powers applies to this cause.
The remaining issue, therefore, is whether preemption by ICCTA of § 77-9-251 and the Board of Supervisors' order was "the clear and manifest purpose of Congress." At a minimum § 10501(b) of ICCTA supersedes regulation of areas of railroad operations enumerated in 10501(b) itself, including "rates, classifications, rules, practices, routes, services, and facilities" and "construction, acquisition, operation, abandonment, or discontinuance of spur, industrial, team, switching, or side tracks, or facilities." The subject matter at issue in this cause, highway bridges over railroad crossings, clearly does not fit within any of these areas. The court's research indicates that ICCTA's preemptive scope beyond the areas enumerated in 10501(b) is at best unclear, including those with respect to overhead bridges at crossings. Therefore, the court is unable to discern the requisite "clear and manifest" purpose of Congress to preempt the Board of Supervisors' order and § 77-9-251 to overcome the presumption against supplanting the well-established police power of states and localities to regulate crossings and bridges thereto. Accordingly, the court is of the opinion that § 10501(b) of ICCTA does not supersede Miss. Code § 77-9-251 and the Board of Supervisors' order and finds that the Board of Supervisors' motion for partial summary judgment as to the issue of federal preemption should be granted.
C. Railroad Companies' Motions for Summary Judgment
MARA, Redmont and Norfolk Southern maintain that they are each entitled to summary judgment even if this court finds against federal preemption. The court addresses the arguments of each railroad company hereinafter in separate sections.
1. MARA
MARA, the present owner of the tracks under the bridges at issue, is a non-profit entity created pursuant to an interstate compact between the States of Mississippi and Alabama as codified in Miss. Code § 77-9-531. The compact provides, inter alia, that MARA "shall be exempt from all state, county, municipal and other local taxation and from any assessment for public improvements . . ." Art. VIII, Miss. Code § 77-9-531. MARA contends that it is exempt from the Board of Supervisors' order under the aforementioned language of the compact since the order constitutes an "assessment for public improvements." MARA relies on Southeastern Pennsylvania Transportation Authority v. Pennsylvania Public Commission, 826 F. Supp. 1506 (E.D.Pa. 1993), which concerned a public utility commission's order virtually identical to the order at issue in the instant action. The issue in that case was whether the public utility commission's order fell within the definition of "taxes and other fees" under a federal exemption reserved for Amtrak and certain commuter authorities. Id. at 1522. In answering this issue in the affirmative, the court held specifically that the exemption "extends to assessments for local improvements." Id. at 1525. The court presumed that an order requiring the upkeep of bridges at crossings was an "assessment for local improvements." See Southeastern Pennsylvania Transportation Authority at 1525 (citing National R.R. Passenger Corp. v. Com. of Pa. Public Utility Com'n, 848 F.2d 436, 440 (3rd Cir.)).
The Board of Supervisors argues that Southeastern Pennsylvania Transportation Authority and National R.R. Passenger Corp. can be distinguished from the instant action on the ground that those decisions were based on principles of federal supremacy. The courts applied a liberal construction of the exemption on behalf of the commuter railroads due to their close federal ties with Amtrak, whereas the general rule in Mississippi is that a statute exempting property from taxation is to be strictly construed in favor of the taxing authority. See Local Union No. 845, United Rubber, Cork, Linoleum and Plastic Workers of America, Home Ass'n, Inc. v. Lee County Bd. of Sup'rs, 369 So.2d 497 (Miss. 1979). According to the Board of Supervisors, subsequent court decisions are contrary to those cited by MARA.
The Board of Supervisors misconstrues MARA's reliance on Southeastern Pennsylvania Transportation Authority and National R.R. Passenger Corp. MARA cites these cases not for their discussion of whether the order requiring the maintenance of bridges at crossings falls within the federal exemption, but for the courts' presumption in both cases that such an order constitutes an "assessment for public improvements." The subsequent cases cited by the Board of Supervisors reached contrary conclusions with respect to the issue of whether the order fell within the language of the federal exemption, not whether the order constituted an "assessment for public improvements." In fact, the court is unaware of a single case establishing that an order of the kind at issue in the instant cause does not meet the definition of "assessment for public improvements."
In addition, the Board of Supervisors' argument that extending MARA's exemption to encompass the order at issue exceeds legislative intent is completely without merit and has no legal basis. The language of the compact exempts MARA from "any assessment for public improvements" (emphasis added). Art. VIII, Miss. Code. § 77-9-531. The Board of Supervisors' order, which allocates the costs of raising the weight capacity of bridges in order to allow school buses to travel over them, clearly fits within this definition. Accordingly, the court finds that MARA's motion for summary judgment should be granted.
2. Redmont
As aforementioned in the factual summary, Redmont presently operates the rail line under the bridges at issue, pursuant to a lease agreement with MARA. The terms of the lease agreement provide, inter alia, that Redmont is to be relieved of any obligation for "the condition, maintenance, repair, rehabilitation, or replacement of, any of the overhead bridges. . . ." Redmont, therefore, argues it is exempt from the Board of Supervisors' order.
The Board of Supervisors observes that the compact explicitly prohibits extension of MARA's exemption to "operators or lessees of [MARA] from the payment of any tax, including licenses or privilege taxes levied by any party, state or any municipality in any party state." See Art. VIII, Miss Code § 77-9-531. The lease agreement between MARA and Redmont, nevertheless, exempts Redmont from any costs associated with bridges and also states that "MARA or a third party shall be responsible for . . . overhead bridges . . . crossing over . . . rail line[s]." The Board of Supervisors alleges an inconsistency between the aforementioned language of the compact and the lease agreement and further alleges that this inconsistency is a deliberate attempt on the part of MARA and Redmont to circumvent their statutory obligations and put "the public in a catch-22."
The court is unable to discern the alleged inconsistency between the above-cited exemption language of the compact and the lease agreement between MARA and Redmont. As aforementioned in the court's discussion of MARA's summary judgment motion, the order at issue is an "assessment for public improvement," not a "tax." The section of the compact exempting MARA provides that the same exemption should not be extended to lessees and operators to immunize them from "taxes," but nowhere states that lessees and operators are not to be exempt from "assessments." See Art. VIII, Miss. Code Ann. § 77-9-531. Therefore, the terms of the lease agreement exempting Redmont is consistent with the section of the compact addressing exemption of MARA's lessees and operators.
A contrary conclusion would undermine the very purpose of the MARA compact. The compact was created to promote the railroad industry in the States of Mississippi and Alabama by acquiring and making use of rail lines that would otherwise be abandoned. See Art. I, Miss. Code Ann. § 77-9-531. Redmont and MARA both maintain that to subject a private party leasing or operating a line which would otherwise be abandoned, as in the instant cause, to an order of the kind at issue in this cause would seriously impede MARA's ability to carry out the intended purpose of the compact. The court finds this argument to be well-taken.
Accordingly, the court finds that Redmont is exempt from the Board of Supervisors' order pursuant to the lease agreement with MARA and that Redmont's motion for summary judgment should be granted.
3. Norfolk Southern
Norfolk Southern offers two main arguments in support of its motion for summary judgment, both of which rest on the fact that it no longer retains any ownership rights of or any other ties with the tracks under the bridges at issue. Norfolk Southern first maintains that to enforce the Board of Supervisors' order against a previous owner would amount to an unconstitutional taking in violation of the Fifth Amendment of the United States Constitution. Norfolk Southern also contends that Miss. Code § 77-9-251 is not applicable to previous railroad property owners.
The court has doubts as to whether the Takings Clause has any application to the instant cause. In any event, the court is unable to find any evidence that a taking has actually occurred. Norfolk Southern maintains that the order, as applied against it, fails to meet the "rough proportionality" test for whether a taking has occurred since the detriment on a railroad company to pay for the costs of bridges over tracks it no longer owns does not in any meaningful sense bear a "rough proportionality" with the benefits to be gained by the same railroad company. See Dolan v. City of Tigard, 512 U.S. 374, 391,129 L.Ed.2d 304, 320 (when the government conditions the grant of building permits on dedication, the "rough proportionality" test requires the showing of a "rough proportionality" or reasonable relationship between the type and extent of the dedication and the impact of the proposed building development). The court rejects this argument. The burden imposed on Norfolk Southern by the order with respect to the bridges would not be "roughly proportional" to the benefits received by Norfolk Southern from the same bridges if the Board of Supervisors' order holds Norfolk Southern responsible for the condition of the bridges after the sale and transfer of the rail lines to MARA, since Norfolk Southern, having relinquished all ownership rights, indeed no longer gains any benefit from the bridges. The Board of Supervisors, however, clearly states that the order as applied to Norfolk Southern holds Norfolk Southern responsible for the condition of the bridges during its ownership of the tracks and presents the affidavit of Danny Crotts, Acting Supervisor for the Second District of Alcorn County, as evidence that the bridges were already in a deteriorated state at the time Norfolk Southern sold the line to MARA. Accordingly, since Norfolk Southern's liability under the order relates to the condition of the bridges during its period of ownership of the line, there is clearly at least a "rough proportionality" between the burden and benefits experienced by Norfolk Southern in connection with the bridges.
Norfolk Southern's other argument that Miss. Code § 77-9-251 does not extend to previous owners of tracks under bridges is also without merit. The express language of § 77-9-251 imposes a duty to erect and maintain bridges at crossings on a "railroad company," which can be reasonably construed to encompass former owners, as well as present owners. A narrow interpretation of "railroad company" to exclude previous owners of tracks under bridges would lead to the illogical conclusion that a railroad company can avoid liability under the statute as long as it relinquishes ownership of tracks under a bridge regardless of the extent to which it was actually responsible for the condition of the bridge. Norfolk Southern contends that, with one exception, the Mississippi Supreme Court held current owners of tracks under bridges liable, not previous owners. However, the liability of previous owners was not addressed in these cases. Norfolk Southern further contends that none of the parties to this action have adduced any evidence of Norfolk Southern's failure to discharge its duty with regard to the bridges at issue in this cause in a manner consistent with the standard in Graham. On the contrary, as aforementioned, the Board of Supervisors has submitted the affidavit of Danny Crotts, Acting Supervisor of the Second District of Alcorn County, stating that the bridges were already in a deteriorated state at the time Norfolk Southern sold the line to MARA. Therefore, there is clearly a factual dispute as to whether Norfolk Southern complied with its duty to maintain the bridges at issue under § 77-9-251 during the period in which it owned the line under the bridges. Accordingly, the court finds that Norfolk Southern is not entitled to summary judgment.
III. CONCLUSION
For the foregoing reasons, the court finds that the Board of Supervisors' motion for partial summary judgment as to the issue of federal preemption and MARA and Redmont's motion for summary judgment should be granted. The court further finds that Norfolk Southern's motion for summary judgment should be denied. An order will issue accordingly.
Bridge Number Limit 095 8,000 lbs. 099 6,000 lbs. 126 15,000 lbs. 128 10,000 lbs. 140 8,000 lbs. Miss. Code. § 77-9-251 provides:
It shall be the duty of the railroad company to erect and keep in order all bridges on any highway, at such points as bridges may be necessary to cross the railroad. Any company which shall fail to comply with these provisions within sixty days from the filing of written notice by the board of supervisors of the county in which the said crossing is located, served upon the agent of said railroad company located . . . shall forfeit the sum of the cost of construction of said bridge or crossing, to be recovered by action in the name of the county in which the bridge or crossing is situated, upon an itemized bill of cost of said work.