Oregon Coast Scenic Railroad v. Oregon Department of State Lands

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

OREGON COAST SCENIC No. 14-35414

RAILROAD, LLC, an Oregon

nonprofit corporation, D.C. No.

Plaintiff-Appellant, 3:14-cv-00414-HZ

v.

OPINION

STATE OF OREGON DEPARTMENT

OF STATE LANDS; MARY M.

ABRAMS, Director of Department

of State Lands, in her official

capacity,

Defendants-Appellees.

Appeal from the United States District Court

for the District of Oregon

Marco A. Hernandez, District Judge, Presiding

Argued and Submitted October 5, 2016

Portland, Oregon

Filed November 23, 2016

Before: Sidney R. Thomas, Chief Judge, and Richard R.

Clifton and Jacqueline H. Nguyen, Circuit Judges.

Opinion by Chief Judge Thomas

2 OR. COAST SCENIC R.R. V. OR. DEP’T OF STATE LANDS

SUMMARY*

Surface Transportation Board

Reversing the district court’s judgment in favor of the

State of Oregon Department of State Lands, which sought to

enforce a state environmental law in connection with railroad

repair work, the panel held that the federal Surface

Transportation Board has exclusive jurisdiction over railroad

repair work done at the direction of a federally regulated rail

carrier but performed by a contractor rather than the carrier

itself.

The plaintiff, a non-profit operator of tourist trains, had

entered into an agreement with the Port of Tillamook Bay, a

federally regulated railroad, to repair a railroad track. The

plaintiff alleged that the Oregon law, known as a

“removal-fill” law, was preempted by the Interstate

Commerce Commission Termination Act, which governs

federal regulation of railroads.

The panel held that the repair work done by the plaintiff

under its agreement with the Port fell under the Board’s

jurisdiction because the work was done under the auspices of

a federally regulated rail carrier and was sufficiently related

to the provision of transportation over the interstate rail

network. The Oregon law therefore was preempted as

applied to this work. The panel reversed the district court’s

judgment and remanded for further proceedings with respect

*

This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

OR. COAST SCENIC R.R. V. OR. DEP’T OF STATE LANDS 3

to preliminary and permanent injunctive relief and

declaratory relief.

COUNSEL

Martin E. Hansen (argued) and Sarah E. Harlos, Francis

Hansen & Martin LLP, Bend, Oregon, for Plaintiff-Appellant.

Robert M. Wilsey (argued), Assistant Attorney General;

Anna M. Joyce, Solicitor General; Ellen F. Rosenblum,

Attorney General; Oregon Department of Justice, Salem,

Oregon; for Defendants-Appellees.

OPINION

THOMAS, Chief Judge:

This case presents the question whether the federal

Surface Transportation Board (“the Board”) has exclusive

jurisdiction over railroad repair work done at the direction of

a federally regulated rail carrier but performed by a contractor

rather than the carrier itself. We conclude that it does, and we

therefore reverse and remand.

I

The Oregon Coast Scenic Railroad (“Oregon Coast”) is a

non-profit corporation that operates tourist trains on a portion

of track in Oregon that is owned by the Port of Tillamook

Bay (“the Port”). The Port is a federally regulated railroad

authorized by the Board. The Port operates freight trains; it

formerly ran trains on the portion of the railroad used by

4 OR. COAST SCENIC R.R. V. OR. DEP’T OF STATE LANDS

Oregon Coast, but in 2007 part of the track was damaged by

a winter storm and freight traffic ceased on that portion of the

track.

In 2012, Oregon Coast and the Port entered into a five-

year agreement under which Oregon Coast would continue

leasing this portion of the track, but instead of paying the Port

for use of the track, Oregon Coast would instead use those

funds “for deferred maintenance and upgrading of [the Port’s]

rail line and right-of-way.” The agreement provided that

Oregon Coast would be “solely responsible” for rehabilitation

of the railway, track maintenance, and compliance with

federal and state safety and maintenance requirements. The

agreement contemplated that the repair work might re-

establish the track’s “connection to a mainline carrier

providing service,” and freight traffic might resume at some

point. If and when that happened, the parties agreed to

negotiate a modification to the agreement that would allow

Oregon Coast to continue to run tourist trains alongside the

Port’s anticipated freight traffic.

Oregon Coast began repair work under this agreement in

early 2014. On March 11, 2014, after approximately five

weeks of work had been completed and two to four weeks of

work remained, the State of Oregon’s Department of State

Lands (“the State”) sent Oregon Coast a cease and desist

order. The order alleged that Oregon Coast’s repair work was

violating a state “removal-fill law,” which, among other

things, requires a state permit for the removal of any amount

of material from waters designated as Essential Salmonid

Habitat. The State alleged that Oregon Coast was engaging

in unpermitted “removal-fill activity” in or near an Essential

Salmonid Habitat section of the Salmonberry River, and it

contested Oregon Coast’s assertion that federal law

OR. COAST SCENIC R.R. V. OR. DEP’T OF STATE LANDS 5

preempted application of this state law to railroad repair

work.

Oregon Coast filed a complaint in federal district court

the following day, seeking declaratory and injunctive relief.

Oregon Coast argued that the removal-fill law is preempted

by the Interstate Commerce Commission Termination Act

(“ICCTA”), 49 U.S.C. §§ 10101 et seq., which governs

federal regulation of railroads. Oregon Coast sought a

permanent injunction and a determination that application of

the state law is federally preempted; that enforcement of the

removal-fill law constituted an impermissible burden on

interstate commerce in violation of the Commerce Clause;

and that enforcement of the law violated Oregon Coast’s

federal rights under 42 U.S.C. § 1983. Oregon Coast also

immediately moved for a preliminary injunction against the

law’s enforcement.

The district court held a hearing on the preliminary

injunction in April 2014. At the State’s request, the district

court consolidated the preliminary injunction hearing with a

hearing on the merits; it then issued a single order on all of

Oregon Coast’s requested relief. The court concluded that the

removal-fill law was not preempted because Oregon Coast’s

tourist train activities were not sufficiently related to

interstate commerce to bring Oregon Coast within the

exclusive federal jurisdiction provision of the ICCTA. The

court also concluded that Oregon Coast’s agreement with the

Port was insufficient to establish federal preemption as to

Oregon Coast on the basis of the Port’s status as a federally

licensed carrier. Having concluded that Oregon Coast’s

claims failed on the merits, the district court denied Oregon

Coast’s requests for preliminary and permanent injunctions

and for declaratory relief, and it dismissed the case.

6 OR. COAST SCENIC R.R. V. OR. DEP’T OF STATE LANDS

Oregon Coast appeals, challenging (1) the district court’s

conclusion that federal preemption does not apply to the

repair work done by Oregon Coast; (2) its conclusion that

Oregon Coast was not acting as an agent of the Port; and

(3) its denial of Oregon Coast’s requests for preliminary and

permanent injunctions and declaratory relief. Oregon Coast

presents a federal question by alleging that enforcement of

the state removal-fill law is preempted by the federal ICCTA;

thus the district court had subject matter jurisdiction under

28 U.S.C. § 1331. See Indep. Training & Apprenticeship

Program v. Cal. Dep’t of Indus. Relations, 730 F.3d 1024,

1031 (9th Cir. 2013) (citing Shaw v. Delta Air Lines, Inc.,

463 U.S. 85, 96 n.14 (1983)). We have jurisdiction over the

appeal under 28 U.S.C. § 1291.

We review de novo a district court’s decision granting or

denying declaratory relief. Wagner v. Prof’l Eng’rs in Cal.

Gov’t, 354 F.3d 1036, 1040 (9th Cir. 2004). We review a

district court’s denial of a preliminary or permanent

injunction for abuse of discretion. All. for the Wild Rockies

v. Cottrell, 632 F.3d 1127, 1131 (9th Cir. 2011); Cummings

v. Connell, 316 F.3d 886, 897 (9th Cir. 2003). In this context,

“[a]n abuse of discretion will be found if the district court

based its decision ‘on an erroneous legal standard or clearly

erroneous finding of fact.’” Cottrell, 632 F.3d at 1131

(quoting Lands Council v. McNair, 537 F.3d 981, 986 (9th

Cir. 2008) (en banc)).

Because it is a question of law, we review de novo a

district court’s conclusion about the extent of federal

preemption. In re Korean Air Lines Co., Ltd., 642 F.3d 685,

691 n.3 (9th Cir. 2011). Here, because the district court’s

decisions on the preliminary injunction, permanent

injunction, and declaratory relief all relied on the same

OR. COAST SCENIC R.R. V. OR. DEP’T OF STATE LANDS 7

analysis of the preemption question, a legal error in that

analysis would affect the court’s decision on all three forms

of requested relief. We therefore focus our analysis on the

district court’s conclusion as to the federal preemption

question.

II

The ICCTA was passed in 1995, in part with the purpose

of expanding federal jurisdiction and preemption of railroad

regulation. See H.R. Rep. No. 104-311 at 95 (1995)

(“[C]hanges are made to reflect the direct and complete pre-

emption of State economic regulation of railroads.”). In order

for federal preemption to apply under the ICCTA, the activity

in question must first fall within the statutory grant of

jurisdiction to the Surface Transportation Board, one of

several federal agencies charged with railroad regulation.

49 U.S.C. § 10501(a). As modified by the ICCTA, 49 U.S.C.

§ 10501(a) provides in relevant part:

(1) Subject to this chapter, the Board has

jurisdiction over transportation by rail carrier

that is–

(A) only by railroad; or

(B) by railroad and water [under specified

circumstances].

(2) Jurisdiction under paragraph (1) applies

only to transportation in the United States

between a place in–

8 OR. COAST SCENIC R.R. V. OR. DEP’T OF STATE LANDS

(A) a State and a place in the same or

another State as part of the interstate rail

network . . . .

If the Board has jurisdiction under 49 U.S.C. § 10501(a), the

question whether jurisdiction is exclusive — i.e., whether

state regulation is preempted — is a separate question

governed by 49 U.S.C. § 10501(b), which provides that “[t]he

jurisdiction of the Board over . . . (1) transportation by rail

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.”

In short, under the factual scenario presented by this case,

Board jurisdiction under § 10501(a) is a threshold question

requiring that the disputed activity meet three statutory

prongs: it must be (1) “transportation” (2) “by rail carrier”

(3) “as part of the interstate rail network.” Id. The parties do

not dispute that the repair work done by Oregon Coast

qualifies as “transportation,” which the ICCTA defines as

including any “property, facility, instrumentality, or

equipment of any kind related to the movement of passengers

or property, or both, by rail” as well as “services related to

that movement.” 49 U.S.C. § 10102(9). The parties’ central

dispute focuses on the other two prongs of the jurisdiction

analysis — that is, on whether the repair work can be

considered work done “by rail carrier” through Oregon

Coast’s relationship with the Port, and whether maintenance

work done on an intrastate section of track can be considered

“part of the interstate rail network.” For the reasons

described below, we answer both questions in the affirmative.

OR. COAST SCENIC R.R. V. OR. DEP’T OF STATE LANDS 9

A

The ICCTA defines “rail carrier” as “a person providing

common carrier railroad transportation for compensation.”

49 U.S.C. § 10102(5). But the statute does not address

whether, in the jurisdiction provision, the term “transportation

by rail carrier” may include work actually performed by

another party under the auspices of the rail carrier. Here, it

is undisputed that the Port is a federally licensed and

regulated rail carrier, authorized by the Board under the

procedures set out in 49 U.S.C. § 10901. The State has

conceded that the track repair work in this case would fall

under the Board’s jurisdiction if the Port were undertaking

the repairs itself.1 Instead, the Port has essentially hired

Oregon Coast to do this maintenance work on its behalf

during the five-year agreement; the Port is paying Oregon

Coast in the form of free track use for the duration of the

agreement. This leaves us with the question whether the Port

somehow divested the Board of jurisdiction over the repairs

by hiring Oregon Coast to perform the work on its behalf.

We conclude that it did not.

The Board itself has considered this question in similar

contexts, and its decisions are instructive here.2 See Ass’n of

1

In fact, the Port undertook very similar maintenance and repair work

on almost the same segment of track in the mid-1990s. The Port hired a

contractor to perform this work, and that contractor has testified that he

completed the work under the auspices of the Port, without going through

state permitting processes.

2

Although the parties focus on whether an agency relationship was

created under Oregon law, the question whether a federal statute grants

jurisdiction over a particular activity is a question of federal law that does

not depend on the contours of a particular state’s agency law. See, e.g.,

10 OR. COAST SCENIC R.R. V. OR. DEP’T OF STATE LANDS

Am. R.R.s v. S. Coast Air Quality Mgmt. Dist., 622 F.3d 1094,

1097 (9th Cir. 2010) (drawing “guidance on the scope of

ICCTA preemption from the decisions of the Surface

Transportation Board . . . , to which we owe Chevron

deference” (citing DHX, Inc. v. Surface Transp. Bd., 501 F.3d

1080, 1086 (9th Cir. 2007))). The Board’s decisions show

that work done by a non-carrier can be considered activity

“by a rail carrier” if there is a sufficient degree of integration

between the work done by the non-carrier and the authorized

rail carrier’s own operations. See, e.g., City of Alexandria,

No. 35157, 2009 WL 381800, at *2 (S.T.B. Feb. 17, 2009);

Town of Babylon, No. 35057, 2008 WL 275697, at *3 (S.T.B.

Feb. 1, 2008); Hi Tech Trans, LLC, No. 34192, 2003 WL

21952136, at *4 (S.T.B. Aug. 14, 2003).

The Board’s decisions emphasize that this question is a

“case-by-case, fact-specific determination.” City of

Alexandria, 2009 WL 381800, at *2. Factors considered by

the Board include the degree of control exercised by the

carrier over the non-carrier’s operations, the involvement of

the carrier in day-to-day operations, the structure of payments

and cost agreements, and other terms of the agreement

between the carrier and the non-carrier. Id. The Board

weighs these factors to determine whether the non-carrier’s

activities are “an integral part of [the rail carrier’s] provision

of transportation by rail carrier.” Hi Tech, 2003 WL

21952136, at *4.

Ass’n of Am. R.R.s v. S. Coast Air Quality Mgmt. Dist., 622 F.3d 1094,

1096–98 (9th Cir. 2010) (analyzing the issue of Board jurisdiction and

preemption under federal law); City of Auburn v. United States, 154 F.3d

1025, 1029–31 (9th Cir. 1998) (same).

OR. COAST SCENIC R.R. V. OR. DEP’T OF STATE LANDS 11

Applying this framework to the current case, the repairs

are properly considered done by the Port. The agreement

between Oregon Coast and the Port gives Oregon Coast

responsibility for the specified repair and maintenance

operations; yet Oregon Coast must adhere to the agreed-upon

maintenance plan, which gives the Port a degree of control by

specifying particular tasks and timelines that Oregon Coast

must meet. Moreover, track maintenance and repair are

essential to providing transportation over a railway. Thus by

helping the Port maintain its track and re-establish its

connection to the interstate rail network, the repair work

performed by Oregon Coast is “an integral part of [the Port’s]

provision of transportation by rail carrier.” See id.

Finally, we note the absurd result that would occur if the

Port were able to divest the Board of jurisdiction simply by

hiring a contractor to perform repair or maintenance work on

its behalf. The ICCTA and its predecessor, the Interstate

Commerce Act, ch. 104, 24 Stat. 379 (1887), have “been

recognized as ‘among the most pervasive and comprehensive

of federal regulatory schemes,’” City of Auburn v. United

States, 154 F.3d 1025, 1027 (9th Cir. 1998) (quoting Chicago

& N.W. Transp. Co. v. Kalo Brick & Tile Co., 450 U.S. 311,

318 (1981)). Allowing a rail carrier to avoid federal

jurisdiction by hiring a contractor would defeat Congress’s

purpose in creating such a far-reaching regulatory scheme.

Because “statutory interpretations which would produce

absurd results are to be avoided,” Ma v. Ashcroft, 361 F.3d

553, 558 (9th Cir. 2004) (citing United States v. Wilson,

503 U.S. 329, 334 (1992)), we cannot conclude that Congress

intended to exclude from federal jurisdiction any party

carrying out a rail carrier’s essential transportation-related

functions on its behalf.

12 OR. COAST SCENIC R.R. V. OR. DEP’T OF STATE LANDS

Accordingly, the repair work done by Oregon Coast is

properly considered “transportation by rail carrier” within the

meaning of 49 U.S.C. § 10501(a)(1). The district court erred

in concluding otherwise.

B

Once the other prongs of the jurisdictional inquiry are

met, the ICCTA gives the Board jurisdiction over domestic

rail transportation “between a place in . . . a State and a place

in the same or another State as part of the interstate rail

network.” 49 U.S.C. § 10501(a)(2)(A). Because Oregon

Coast’s repair work takes place entirely within the state of

Oregon, it satisfies this prong if it is done “as part of the

interstate rail network.” Id. We conclude that it is.

The phrase “as part of the interstate rail network” is not

defined by statute, but the Board has interpreted it “broadly

to include (but not be limited to) facilities that are part of the

general system of rail transportation and are related to the

movement of passengers or freight[]in interstate commerce.”

DesertXpress Enters., LLC, No. 34914, 2010 WL 1822102,

at *9 (S.T.B. May 7, 2010). The Board has also emphasized

that the ICCTA actually expanded the Board’s jurisdiction to

ensure that “transportation between places in the same state

would be within the Board’s jurisdiction as long as that

transportation was related to interstate commerce.” Id. at *6.

We confirmed this interpretation in City of Auburn, where

we held that the Board had exclusive jurisdiction over an

intrastate railroad repair project that aimed to prepare a

section of track — at the time used only for local traffic — to

join a reestablished main line for through traffic. 154 F.3d at

1031. In that case, we “not[ed] that Congress and the courts

OR. COAST SCENIC R.R. V. OR. DEP’T OF STATE LANDS 13

long have recognized a need to regulate railroad operations at

the federal level.” Id. at 1029. We also highlighted the fact

that § 10501 itself expressly refers to the Board’s jurisdiction

over “the construction . . . 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.” Id.

at 1030 (emphasis added) (quoting 49 U.S.C. § 10501(b)(2)).3

The facts of the current case closely mirror City of

Auburn. Oregon Coast contracted with the Port to perform

repair work on a section of track that was previously

connected to the interstate rail network and that would, once

fully repaired, reconnect the track to the interstate rail

network. The agreement between Oregon Coast and the Port

expressly contemplates that the track may be reconnected to

the interstate network within the five-year span of the

agreement, allowing the parties to negotiate a modification to

the agreement — but leaving the agreement in place — if the

“rail connection to a mainline carrier providing service [is]

re-established and freight traffic resume[s].” Similarly, the

lease agreement gives Oregon Coast the “option . . . to

reinstall the rail line and recover” eighteen train cars that are

currently stranded on the severed portion of track. These

provisions suggest that Oregon Coast’s repair work is aimed

at reconnecting the disconnected track to the interstate rail

3

Although this language appears in the preemption provision,

49 U.S.C. § 10501(b), rather than in the jurisdictional grant, 49 U.S.C.

§ 10501(a), it nevertheless informs our interpretation of the jurisdictional

provision, because the general jurisdictional grant of § 10501(a) must be

at least as broad as the exclusive jurisdiction provision of § 10501(b). See

Medtronic, Inc. v. Lohr, 518 U.S. 470, 485–86 (1996) (explaining that a

court may properly look to the statutory framework and surrounding

provisions for guidance in interpreting the scope of preemption).

14 OR. COAST SCENIC R.R. V. OR. DEP’T OF STATE LANDS

network. Thus, as in Auburn, this repair work is done “as

part of the interstate rail network.”

Moreover, even if Oregon Coast’s work did not result in

full reconnection of the track, the repairs would still be

considered “part of the interstate rail network” because they

involve track that is still federally authorized as part of the

interstate rail system. In a similar case that is instructive

here, the Board concluded that it had jurisdiction over a

project to rehabilitate a depot serving a rail line that had not

been in service for years but was still federally authorized.

City of Creede, No. 34376, 2005 WL 1024483, at *8 (S.T.B.

May 3, 2005). Here, similarly, the repair work is being done

on track that is owned by the Port and is still federally

authorized under the Port’s Certificate of Public Convenience

and Necessity, despite the physical disconnection caused by

storm damage. The fact these repairs are integral to the

functioning of a federally authorized track segment

establishes that the repairs are done “as part of the interstate

rail network” within the meaning of § 10501(a)(2)(A).

Although the State cites several cases purportedly

demonstrating that the Board does not have jurisdiction over

wholly intrastate segments of track, those cases do not affect

our analysis. We note that Magner-O’Hara Scenic Railway

v. Interstate Commerce Commission, a Sixth Circuit case

considering a similar question, was decided before the

ICCTA expanded Board jurisdiction over intrastate

transportation. 692 F.2d 441, 442–43 (6th Cir. 1982). And

we are unpersuaded by the logic of more recent cases citing

Magner without acknowledging the significant expansion of

jurisdiction under the ICCTA. See RLTD Ry. Corp. v.

Surface Transp. Bd., 166 F.3d 808, 813 (6th Cir. 1999); Fun

OR. COAST SCENIC R.R. V. OR. DEP’T OF STATE LANDS 15

Trains, Inc., No. 33472, 1998 WL 92052, at *2 (S.T.B. Mar.

5, 1998).

We conclude, therefore, that the repair work performed by

Oregon Coast under the agreement with the Port is properly

considered done “as part of the interstate rail network.”

49 U.S.C. § 10501(a)(2)(A). Because the repair work also

qualifies as “transportation by rail carrier,” as discussed

above, we conclude that it falls within the Board’s

jurisdiction under 49 U.S.C. § 10501(a).

III

Once jurisdiction is established under 49 U.S.C.

§ 10501(a), the broad preemption provision of 49 U.S.C.

§ 10501(b) makes the Board’s jurisdiction exclusive over

“(1) transportation by rail 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.” This subsection also expressly

provides that “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). Because the repair work here falls

squarely within this preemption provision, we conclude that

state regulation is preempted.

Our decision on this question is controlled by City of

Auburn, in which we held that 49 U.S.C. § 10501(b)

preempted not just economic but also environmental

regulation, “[f]or if local authorities have the ability to

impose ‘environmental’ permitting regulations on the

railroad, such power will in fact amount to ‘economic

16 OR. COAST SCENIC R.R. V. OR. DEP’T OF STATE LANDS

regulation’ if the carrier is prevented from constructing,

acquiring, operating, abandoning, or discontinuing a line.”

154 F.3d at 1031. Looking to the language of 49 U.S.C.

§ 10501(b), we emphasized in City of Auburn that “[i]t is

difficult to imagine a broader statement of Congress’s intent

to preempt state regulatory authority over railroad

operations.” Id. at 1030 (quoting CSX Transp., Inc. v. Ga.

Pub. Serv. Comm’n, 944 F. Supp. 1573, 1581 (N.D. Ga.

1996)). As a result, we held that 49 U.S.C. § 10501(b)

“explicitly grant[ed] the [Board] exclusive authority over

railway projects like” the intrastate rail repair project at issue

in City of Auburn, which closely resembles the project in this

case. City of Auburn, 154 F.3d at 1030.

Our subsequent decision in Association of American

Railroads v. South Coast Air Quality Management District

clarified that the ICCTA “does not preempt state or local laws

if they are laws of general applicability that do not

unreasonably interfere with interstate commerce,” but it

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

the effect of managing or governing rail transportation.’”

622 F.3d 1094, 1097 (9th Cir. 2010) (first citing Bos. & Me.

Corp. & Town of Ayer, No. 33971, 2001 WL 458685, at *4–6

(S.T.B. May 1, 2001); then quoting N.Y. Susquehanna & W.

Ry. Corp. v. Jackson, 500 F.3d 238, 252 (3d Cir. 2007)). In

determining whether a law of general applicability is

permissible, we explained that “[w]hat matters is the degree

to which the challenged regulation burdens rail

transportation.” Id. at 1097–98 (quoting N.Y. Susquehanna,

500 F.3d at 252).

Here, the State’s removal-fill law requires that Oregon

Coast apply for and be granted a permit before removing “any

amount of material within waters designated Essential

OR. COAST SCENIC R.R. V. OR. DEP’T OF STATE LANDS 17

Salmonid Habitat.” Because “the ability to impose

‘environmental’ permitting regulations on the railroad” can

in fact give local authorities the power to “prevent[ a carrier]

from constructing, acquiring, operating, abandoning, or

discontinuing a line,” City of Auburn, 154 F.3d at 1031, such

a permitting scheme would “have the effect of managing or

governing rail transportation,” Ass’n of Am. R.R.s, 622 F.3d

at 1097 (quoting N.Y. Susquehanna, 500 F.3d at 252). Thus

even under the more subjective approach used in Association

of American Railroads, we conclude that the State’s removal-

fill law is preempted by the ICCTA as applied to the repair

work in this case.

IV

In sum, the repair work done by Oregon Coast under its

agreement with the Port falls under the Board’s jurisdiction

because the work is done under the auspices of a federally

regulated rail carrier and is sufficiently related to the

provision of transportation over the interstate rail network.

The State’s removal-fill law is preempted as applied to this

work, and the district court erred in concluding otherwise.

Because the district court’s rulings on the preliminary

injunction, permanent injunction, and declaratory relief were

all premised on this incorrect legal determination, we reverse

and remand for further proceedings with respect to each form

of relief.

REVERSED and REMANDED.