Ass'n of American Railroads v. South Coast Air Quality Management District

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

ASSOCIATION OF AMERICAN 

RAILROADS; BNSF RAILWAY

COMPANY; and UNION PACIFIC

RAILROAD COMPANY,

Plaintiffs-Appellees, No. 07-55804

v.

 D.C. No.

CV-06-01416-JFW

SOUTH COAST AIR QUALITY

MANAGEMENT DISTRICT; and THE OPINION

GOVERNING BOARD OF SOUTH COAST

AIR QUALITY MANAGEMENT

DISTRICT,

Defendants-Appellants.



Appeal from the United States District Court

for the Central District of California

John F. Walter, District Judge, Presiding

Argued and Submitted

June 4, 2009—Pasadena, California

Filed September 15, 2010

Before: Pamela Ann Rymer, Susan P. Graber, and

Raymond C. Fisher,* Circuit Judges.

Opinion by Judge Graber

*Judge Raymond C. Fisher was drawn to replace Judge Ann Aldrich.

He has read the briefs, reviewed the record, and listened to the tape of oral

argument held on June 4, 2009.

14191

ASS’N AMERICAN RAILROADS v. S. COAST AIR QUALITY 14193

COUNSEL

Daniel P. Selmi, Los Angeles, California; and Elena K. Sax-

onhouse and Gabriel M.B. Ross, Shute, Mihaly & Weinberger

LLP, San Francisco, California, for the defendants-appellants.

Kevin M. Fong, Pillsbury Winthrop Shaw Pittman LLP, San

Francisco, California; and Robert M. Jenkins III, Mayer

Brown LLP, Washington, D.C., for the plaintiffs-appellees.

Suma Peesapati, Lozeau/Drury LLP, Alameda, California;

and David Pettit, Natural Resources Defense Council, Inc., for

the amici curiae.

OPINION

GRABER, Circuit Judge:

An array of federal, state, and local laws governs the opera-

tion of railroads, including laws that regulate the effect of the

14194 ASS’N AMERICAN RAILROADS v. S. COAST AIR QUALITY

railroad industry on the environment. Here, a local govern-

mental agency enacted rules aimed at limiting the air pollu-

tion created by idling trains. Several entities within the

railroad industry filed suit. After a bench trial, the district

court held that federal law preempts the local rules. On de

novo review, Davis v. Yageo Corp., 481 F.3d 661, 673 (9th

Cir. 2007); J & G Sales Ltd. v. Truscott, 473 F.3d 1043, 1047

(9th Cir. 2007), we affirm.

The State of California divides its geographic territory into

35 air quality management districts. One of the air quality dis-

tricts located in Southern California is the South Coast Air

Quality Management District (“the District”). The District

performs two related functions that are relevant here. First,

California law grants some regulatory authority to the Dis-

trict. Cal. Health & Safety Code § 40001. Provided that the

District’s rules are within the scope of its regulatory authority

and that the District meets all procedural and other state-law

requirements, the District’s rules have the force and effect of

state law.

Second, California law tasks the District with drafting and

proposing an air quality management plan for its region. Id.

§ 40460. If approved by the state agency, the California Air

Resources Board (“CARB”), then the plan becomes part of

the statewide air quality management plan. Id. § 40460(d).

Additionally, CARB submits the statewide air quality man-

agement plan to the federal Environmental Protection Agency

(“EPA”) as part of California’s proposed overall “state imple-

mentation plan” under the federal Clean Air Act. Id.; see gen-

erally Union Electric Co. v. EPA, 427 U.S. 246 (1976)

(discussing in detail the mechanism of using state implemen-

tation plans to meet the requirements of the federal Clean Air

Act). “Once approved by EPA[,] [state implementation] plans

have the force and effect of federal law.” Safe Air for Every-

one v. EPA, 488 F.3d 1088, 1091 (9th Cir. 2007) (original

brackets and internal quotation marks omitted).

ASS’N AMERICAN RAILROADS v. S. COAST AIR QUALITY 14195

In late 2005 and early 2006, the District enacted the three

rules that are the subject of this case. The District had identi-

fied emissions from idling trains as a source of air pollution.

The District enacted rules in an attempt to reduce that pollu-

tion. One of the rules limits the permissible amount of emis-

sions from idling trains (through a series of alternative options

for achieving that goal). The other two rules impose various

reporting requirements, backed by threat of penalties, on rail-

yard operators.

In response, the Association of American Railroads, BNSF

Railway Company, and Union Pacific Railroad Company

(collectively, “the Railroads”) filed this action against the

District and its governing board. The Railroads contend that

the Interstate Commerce Commission Termination Act of

1995 (“ICCTA”), Pub. L. No. 104-88, 109 Stat. 803, a federal

act that substantially deregulated the railroad industry, pre-

empts the District’s rules. See generally DHX, Inc. v. Surface

Transp. Bd., 501 F.3d 1080, 1082-83 (9th Cir. 2007) (discuss-

ing ICCTA). The district court agreed and entered a perma-

nent injunction against the District and its governing board,

precluding them “from implementing or enforcing any provi-

sion of [the challenged rules].”1 The District timely appeals.

[1] ICCTA contains an express preemption provision over

regulation of rail transportation:

The jurisdiction of the [Surface Transportation]

Board over—

(1) transportation by rail carriers, and the remedies

1

The district court also held, in the alternative, that the District’s rules

were not within the scope of the District’s state-law regulatory authority.

The Railroads reiterate that view on appeal. We need not, and do not,

decide that issue of state law. For purposes of this opinion, we assume

without deciding that the rules fall within the District’s regulatory author-

ity.

14196 ASS’N AMERICAN RAILROADS v. S. COAST AIR QUALITY

provided in this part with respect to rates, classifica-

tions, rules (including car service, interchange, and

other operating rules), practices, routes, services, and

facilities of such carriers; and

(2) the construction, acquisition, operation, aban-

donment, 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(b) (emphases added); see also id.

§ 10102(9) (defining “transportation,” in part, as “a locomo-

tive, car, vehicle, vessel, warehouse, wharf, pier, dock, yard,

property, facility, instrumentality, or equipment of any kind

related to the movement of passengers or property, or both, by

rail, regardless of ownership or an agreement concerning use”

(emphases added)).

We held in City of Auburn v. United States Government,

154 F.3d 1025, 1029-31 (9th Cir. 1998), that Congress

intended to preempt a wide range of state and local regulation

of rail activity. We find further guidance on the scope of

ICCTA preemption from the decisions of the Surface Trans-

portation Board (“STB”), to which we owe Chevron defer-

ence, DHX, 501 F.3d at 1086, and from decisions of our sister

circuits.

If an apparent conflict exists between ICCTA and a federal

law, then the courts must strive to harmonize the two laws,

giving effect to both laws if possible. See In re Bos. & Me.

Corp. & Town of Ayer, Mass., No. 33971, 2001 WL 458685,

ASS’N AMERICAN RAILROADS v. S. COAST AIR QUALITY 14197

at *6 n.28 (S.T.B. Apr. 30, 2001) (citing Matsushita Electric

Indus. Co. v. Epstein, 516 U.S. 367, 381 (1996); Blanchette

v. Conn. Gen. Ins. Corps., 419 U.S. 102, 133-34 (1974); Uno-

cal Corp. v. Kaabipour, 177 F.3d 755, 769 (9th Cir. 1999)).

If an apparent conflict exists between ICCTA and a state or

local law, however, different rules apply.

[2] Generally speaking, ICCTA does not preempt state or

local laws if they are laws of general applicability that do not

unreasonably interfere with interstate commerce. Bos. & Me.

Corp., 2001 WL 458685, at *4-6; see also In re Cities of

Auburn & Kent, Wash., No. 33200, 1997 WL 362017, at *3-6

(S.T.B. July 1, 1997) (discussing ICCTA preemption of state

and local laws). For instance, the STB has recognized that

ICCTA likely would not preempt local laws that prohibit the

dumping of harmful substances or wastes, because such a

generally applicable regulation would not constitute an unrea-

sonable burden on interstate commerce. Auburn & Kent, 1997

WL 362017, at *6; see also Fla. E. Coast Ry. Co. v. City of

W. Palm Beach, 266 F.3d 1324, 1337 (11th Cir. 2001) (“The

statutory changes brought about by the ICCTA reflect the

focus of legislative attention on removing direct economic

regulation by the States, as opposed to the incidental effects

that inhere in the exercise of traditionally local police powers

such as zoning.”). As stated by our sister circuits, ICCTA

“preempts all ‘state laws that may reasonably be said to have

the effect of managing or governing rail transportation, while

permitting the continued application of laws having a more

remote or incidental effect on rail transportation.’ What mat-

ters is the degree to which the challenged regulation burdens

rail transportation . . . .”2 N.Y. Susquehanna & W. Ry. Corp.

v. Jackson, 500 F.3d 238, 252 (3d Cir. 2007) (quoting Fla. E.

Coast Ry., 266 F.3d at 1331); see also Franks Inv. Co. v.

2

For that reason, the District greatly overstates its case when it claims

that a finding of preemption here would mean that all state and local regu-

lation that happened to affect railroads, such as criminal laws and con-

sumer protection laws, would be preempted.

14198 ASS’N AMERICAN RAILROADS v. S. COAST AIR QUALITY

Union Pac. R.R. Co., 593 F.3d 404, 410 (5th Cir. 2010) (en

banc) (agreeing with that “persuasive” interpretation of the

scope of ICCTA preemption). Both we and our sister circuits

have rejected the argument—advanced by the District here—

that ICCTA preempts only economic regulation. N.Y. Susque-

hanna, 500 F.3d at 252; Auburn, 154 F.3d at 1031.

[3] The STB has explained that this system preserves a

role for state and local agencies in the environmental regula-

tion of railroads in at least two ways. First, to the extent that

state and local agencies promulgate EPA-approved statewide

plans under federal environmental laws (such as “statewide

implementation plans” under the Clean Air Act), ICCTA gen-

erally does not preempt those regulations because it is possi-

ble to harmonize the ICCTA with those federally recognized

regulations. See, e.g., Bos. & Me. Corp., 2001 WL 458685, at

*5 (“[N]othing in section 10501(b) is intended to interfere

with the role of state and local agencies in implementing Fed-

eral environmental statutes, such as the Clean Air Act [and

the federal clean water statutes].”). Second, to the extent that

state and local agencies enforce their generally applicable reg-

ulations in a way that does not unreasonably burden railroad

activity, ICCTA does not preempt such regulation, despite the

fact that the regulation does not have the force and effect of

federal law.

[4] Here, the District’s rules do not have the force and

effect of federal law. The District alleges that it will submit

the rules to the state agency, CARB, for its approval and that,

if CARB approves, CARB will submit the rules to the federal

EPA as part of California’s state implementation plan. Once

approved by EPA, state implementation plans have “the force

and effect of federal law.” Safe Air for Everyone, 488 F.3d at

1091 (internal quotation marks omitted). The corollary to that

rule is that, until approved by the EPA, state implementation

plans do not have the force and effect of federal law. For that

reason, it is irrelevant that the Clean Air Act reserves certain

regulatory authority to the states and localities. Because the

ASS’N AMERICAN RAILROADS v. S. COAST AIR QUALITY 14199

District’s rules have not become a part of California’s EPA-

approved state implementation plan, they do not have the

force and effect of federal law, even if they might in the

future. Accordingly, there is no authority for the courts to har-

monize the District’s rules with ICCTA.

[5] Because the District’s rules have the force and effect of

state law, ICCTA preempts those rules unless they are rules

of general applicability that do not unreasonably burden rail-

road activity. The District’s rules plainly cannot meet that

test. The rules apply exclusively and directly to railroad activ-

ity, requiring the railroads to reduce emissions and to provide,

under threat of penalties, specific reports on its emissions and

inventory. Because ICCTA “preempts all state laws that may

reasonably be said to have the effect of managing or govern-

ing rail transportation,” N.Y. Susquehanna, 500 F.3d at 252

(internal quotation marks omitted), ICCTA preempts the Dis-

trict’s rules here.

AFFIRMED.