New Orleans & Gulf Coast Railway Co. v. Barrois

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT United States Court of Appeals

Fifth Circuit

FILED

June 25, 2008

No. 06-31142

Charles R. Fulbruge III

Clerk

NEW ORLEANS & GULF COAST RAILWAY COMPANY,

Plaintiff - Appellant,

v.

ANGEL MARINOVICH BARROIS; DARREN J BARROIS; BECKY HINGLE

KALISZESKI; JASON C KALISZESKI; BRADY J MILLER; TRACY

WINDHAM MILLER; BETTY ST GERMAIN NELSON; KEVIN A NELSON;

JERRY J RAYBORN, SR; LAWRENCE JOSEPH TILLOTSON; PATRICIA

LERILLE TILLOTSON; FURNITURE MART - REAL ESTATE HOLDINGS

LLC; CAROL PLAISANCE GAINEY; LEONARD JOURDAN, JR; BRUCE

KENNAIR; TAMMY L KENNAIR; ANN FROST KOEN; EARL HERMAN

KOEN, JR; SANDRA R RABALIAS; MARTHA RIDDLE; WINNIE L SOULE;

MARIE VERDIN SOULET; RENE SOULET; DAWN P TREADWAY; JOHN

W TREADWAY; CARL STEVEN WOODALL; ROBIN MEYER WOODALL,

Defendants - Appellees.

Appeal from the United States District Court

for the Eastern District of Louisiana

Before REAVLEY, SMITH, and GARZA, Circuit Judges.

EMILIO M. GARZA, Circuit Judge:

The plaintiff-appellant New Orleans & Gulf Coast Railway Company

(“NOGCR” or the “Railroad”) brought this action to prevent the defendants-

appellees, a collection of Louisiana property owners (the “Landowners”), from

installing or using private, at-grade railroad crossings, which the Railroad has

not authorized, but which Louisiana state property law allegedly has. The

No. 06-31142

district court dismissed the case for lack of subject matter jurisdiction. We

AFFIRM.

I

NOGCR is a short-line railroad company that operates in Louisiana. The

Landowners are the owners of enclosed estates, a group of Louisiana property

owners whose only access from their estates to any public road is blocked by the

Railroad’s tracks. This dispute involves the right of the Landowners to cross the

Railroad’s tracks to reach these public roads.

Article 689 of the Louisiana Civil Code permits the owner of an estate with

no access to a public road to claim a right of passage over neighboring property

to the nearest public road in exchange for indemnity. LA. CIV. CODE art. 689.

With this Louisiana authority as background, the Landowners have built

private, at-grade1 railroad crossings of various types and quality over the

Railroad’s tracks.2

The Railroad seeks to regulate these private crossings and has attempted

to require the Landowners to obtain Railroad-issued permits, at some cost, to

construct and operate the crossings. According to the Railroad, these private

crossings impose substantial burdens on the Railroad in terms of both cost and

safety. The crossings supposedly make it more difficult and thus more costly for

the Railroad to upgrade, maintain, and monitor its tracks. The Railroad claims

that it has incurred expense in correcting and improving the substandard

workmanship of some of these crossings and repairing damage to the tracks

caused by these crossings. The crossings also allegedly make it difficult for the

1

An “at-grade” crossing is a crossing at the level of the tracks, as opposed to, for

example, a crossing via bridge or tunnel.

2

In its complaint, NOGCR alleges that it assumed control of the railroad in 1999 and

that, at that time, its 24 miles of tracks were burdened by over 270 private crossings. This

lawsuit seeks relief against only a handful of those crossings, 12 total.

2

No. 06-31142

Railroad to comply with various federal regulations governing railroad operation

and safety. In short, these private crossings increase the Railroad’s operating

costs, imposing what the Railroad characterizes in its complaint as “onerous

economic requirements on NOGCR’s railroad operations.”

As a result, the Railroad brought this action in federal court seeking

injunctive and declaratory relief either to prohibit or regulate these private

crossings, which the Railroad allegedly has not permitted. In its complaint, the

Railroad sought a permanent injunction ordering the Landowners to “cease and

desist from their continuing trespass and intrusion upon its right-of-way and

interference with railroad operations by use of unauthorized and substandard

crossings.” Further, as part of its prayer for relief, the Railroad sought to

prohibit private railroad crossings “without [its] express written permission.”

The Railroad also sought a declaratory judgment that, in short, its right-of-way

in the Railroad vis-à-vis Louisiana state law was superior to any claimed right

of passage by the Landowners. Moreover, the Railroad sought a declaration

that Louisiana Civil Code Article 689, the basis for the Landowners’ claimed

right of passage, was preempted by federal law, specifically the Interstate

Commerce Commission Termination Act (“ICCTA”), the Federal Railroad Safety

Act (“FRSA”), and the Commerce Clause.

Some time after the Railroad filed its declaratory judgment action, one of

the defendants in the case, Jerry J. Rayborn, Sr., filed an action against the

Railroad in Louisiana state court seeking a temporary restraining order, a

preliminary injunction, and a permanent injunction to prevent the Railroad from

interfering with the private railroad crossings located on Rayborn’s property.

The Louisiana state court granted a temporary restraining order that prevented

the Railroad from barricading or removing Rayborn’s two existing private

crossings, which provided the Rayborn property with access to a public road.

The order also required Rayborn to post a $2,500 bond. The Railroad removed

3

No. 06-31142

Rayborn’s case to federal court, where the case was consolidated with the

Railroad’s declaratory judgment action, while the temporary restraining order

remained in effect.

Before the district court, the Railroad asserted jurisdiction based both on

the presence of a federal question and diversity, 28 U.S.C. §§ 1331 and 1332.

Regarding federal question jurisdiction, the Railroad claimed that the case was

one “arising under” the Constitution and laws of the United States because two

federal statutes, the ICCTA and the FRSA, and the Constitution’s Commerce

Clause preempted the inconsistent Louisiana state law authorizing the railroad

crossings. The district court rejected these claims, dismissing the Railroad’s

declaratory judgment action for lack of subject matter jurisdiction and, for the

same reason, remanding the Rayborn action to the Louisiana state court.

The Railroad now appeals. The Railroad does not, however, appeal the

district court’s Commerce Clause or diversity jurisdiction rulings. Rather, the

Railroad’s appeal focuses on its claim that federal jurisdiction is proper under

28 U.S.C. § 1331 because it seeks injunctive relief based on a federal statute,

because of the completely preemptive force of the ICCTA and the FRSA, and

because the case otherwise presents a substantial federal question.

II

We review a district court’s determination of subject matter jurisdiction

de novo. PCI Transp., Inc. v. Forth Worth & W. R.R. Co., 418 F.3d 535, 540 (5th

Cir. 2005) (quoting Hoskins v. Bekins Van Lines, 343 F.3d 769, 772 (5th Cir.

2003)). The district court “has the power to dismiss for lack of subject matter

jurisdiction on any one of three separate bases: (1) the complaint alone; (2) the

complaint supplemented by undisputed facts evidenced in the record; or (3) the

complaint supplemented by undisputed facts plus the court’s resolution of

disputed facts.” Williamson v. Tucker, 645 F.2d 404, 413 (5th Cir. 1981).

4

No. 06-31142

Jurisdictional findings of fact are reviewed for clear error. Krim v. pcOrder.com,

Inc., 402 F.3d 489, 494 (5th Cir. 2005). The party seeking to assert federal

jurisdiction, in this case the Railroad, has the burden of proving by a

preponderance of the evidence that subject matter jurisdiction exists. See

Howery v. Allstate Ins. Co., 243 F.3d 912, 919 (5th Cir. 2001); Paterson v.

Weinberger, 644 F.2d 521, 523 (5th Cir. 1981).

However, pursuant to 28 U.S.C. § 1447(d), we lack jurisdiction to entertain

an appeal of a district court’s remand order when that order is based on, among

other things, lack of subject matter jurisdiction. Things Remembered, Inc. v.

Petrarca, 516 U.S. 124, 127–28 (1995); Schexnayder v. Entergy Louisiana, Inc.,

394 F.3d 280, 283 (5th Cir. 2004); see also Thermtron Prods., Inc. v.

Hermansdorfer, 423 U.S. 336, 351 (1976) (“[T]o prevent delay in the trial of

remanded cases by protracted litigation of jurisdictional issues, Congress

immunized from all forms of appellate review any remand order issued on the

grounds specified in § 1447(c), whether or not that order might be deemed

erroneous by an appellate court.” (citation omitted)).

Therefore, under § 1447(d), we lack jurisdiction to consider the district

court’s remand order for lack of subject matter jurisdiction, and we DISMISS

that portion of the appeal challenging the district court’s decision to remand the

Rayborn action to state court.

III

Turning to the declaratory judgment action, the Railroad presents four

arguments why the district court erred in dismissing its case for lack of subject

matter jurisdiction. First, the Railroad argues that federal question jurisdiction

is established because it seeks injunctive relief against an allegedly preempted

state law or regulation. Second, relying on the complete preemption doctrine,

the Railroad argues that the ICCTA preempts any state law claim to a right of

5

No. 06-31142

passage over the Railroad’s tracks, rendering such a claim either wholly federal

or nothing at all. Third, the Railroad argues that the FRSA also completely

preempts any state law claim to a right of passage. Fourth, the Railroad argues

that a substantial and disputed federal question underlies its complaint, thus

establishing federal question jurisdiction. We consider and reject each of these

claims below.

A

The Railroad first argues that federal question jurisdiction is established

because it seeks declaratory and injunctive relief from state regulation on the

ground that the state regulation is preempted by federal law.

The federal question statute, 28 U.S.C. § 1331, provides district courts

with “original jurisdiction of all civil actions arising under the Constitution,

laws, or treaties of the United States.” To determine whether a case is one

“arising under” federal law for these purposes, we ordinarily apply the well-

pleaded complaint rule. PCI Transp., 418 F.3d at 543; Hoskins, 343 F.3d at 772.

Pursuant to the well-pleaded complaint rule:

[W]hether a case is one arising under the Constitution or a law or

treaty of the United States, in the sense of the jurisdictional

statute, . . . must be determined from what necessarily appears in

the plaintiff’s statement of his own claim in the bill or declaration,

unaided by anything alleged in anticipation of avoidance of defenses

which it is thought the defendant may interpose.

Franchise Tax Bd. of State of Cal. v. Constr. Laborers Vacation Trust for S. Cal.,

463 U.S. 1, 10 (1983) (alterations in original) (quoting Taylor v. Anderson, 234

U.S. 74, 75–76 (1914)); Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 672

(1950). The well-pleaded complaint rule focuses on whether the plaintiff has

affirmatively alleged a federal claim, thus providing a basis for federal

jurisdiction; anticipated or potential defenses, including defenses based on

federal preemption, do not provide a basis for federal question jurisdiction. PCI

6

No. 06-31142

Transp., 418 F.3d at 543 (citing Beneficial Nat’l Bank v. Anderson, 539 U.S. 1,

6 (2003)); see also Caterpillar Inc. v. Williams, 482 U.S. 386, 393 (1987) (“[I]t is

now settled law that a case may not be removed to federal court on the basis of

a federal defense, including the defense of pre-emption, even if the defense is

anticipated in the plaintiff’s complaint, and even if both parties concede that the

federal defense is the only question truly at issue.”).

Where, as here, a plaintiff brings a declaratory judgment claim pursuant

to 28 U.S.C. §§ 2201 and 2202, in applying the well-pleaded complaint rule we

ask whether “if the declaratory judgment defendant brought a coercive action to

enforce its rights, that suit would necessarily present a federal question.”

Franchise Tax Bd., 463 U.S. at 19; TTEA v. Ysleta del Sur Pueblo, 181 F.3d 676,

681 (5th Cir. 1999). A plaintiff cannot evade the well-pleaded complaint rule by

using the declaratory judgment remedy to recast what are in essence merely

anticipated or potential federal defenses as affirmative claims for relief under

federal law. See TTEA, 181 F.3d at 681 (stating that “an anticipatory federal

defense is insufficient for federal jurisdiction”) (citing Louisville & Nashville

R.R. Co. v. Mottley, 211 U.S. 149, 152 (1908)). “Where the complaint in an action

for declaratory judgment seeks in essence to assert a defense to an impending

or threatened state court action, it is the character of the threatened action, and

not of the defense, which will determine whether there is federal-question

jurisdiction. . . .” Pub. Serv. Comm’n of Utah v. Wycoff Co., Inc., 344 U.S. 237,

248 (1952) (dictum).

In this case, the Railroad’s declaratory judgment action seeks to resolve

whether the Landowners may rely upon Louisiana state property law to

establish a right, as enclosed estate owners, to construct and use private at-

grade crossings over the Railroad’s tracks. If the Landowners, the declaratory

judgment defendants, brought coercive actions to claim a right of passage over

the Railroad’s tracks, such actions would arise exclusively under state law.

7

No. 06-31142

Although the Railroad also seeks a declaration that this state property law

constitutes a form of preempted state regulation, this claim arises merely as an

anticipatory federal defense to a state law cause of action, which is generally

insufficient to establish federal question jurisdiction.

Nonetheless, the Railroad argues that jurisdiction is established based on

Shaw v. Delta Air Lines, Inc., 463 U.S. 85 (1983). In Shaw, the Supreme Court

explained:

It is beyond dispute that federal courts have jurisdiction over suits

to enjoin state officials from interfering with federal rights. See Ex

parte Young, 209 U.S. 123, 160–162 (1908). A plaintiff who seeks

injunctive relief from state regulation, on the ground that such

regulation is pre-empted by a federal statute which, by virtue of the

Supremacy Clause of the Constitution, must prevail, thus presents

a federal question which the federal courts have jurisdiction under

28 U.S.C. § 1331 to resolve.

Id. at 96 n.14. The Railroad argues that because it seeks injunctive relief from

state regulation on preemption grounds, Shaw applies and federal jurisdiction

is established.

Shaw, among the progeny of Ex parte Young, clearly establishes a federal

right of action against “state officials” to enjoin the enforcement of preempted

state regulations. This cause of action against state officials is an affirmative

federal claim that can form the basis for federal jurisdiction. See, e.g., Planned

Parenthood of Houston and Se. Tex. v. Sanchez, 403 F.3d 324, 331 (5th Cir. 2005)

(suit against Texas state officials to enjoin the enforcement of allegedly

preempted state abortion laws); Gillis v. Louisiana, 294 F.3d 755, 760 (5th Cir.

2002) (suit against Louisiana and Louisiana state officials to enjoin as

preempted Louisiana’s regulation of pilotage off the state’s coastline). However,

Shaw does not address whether a comparable right of action can be asserted

exclusively against private parties in the absence of any allegation of state

action.

8

No. 06-31142

On this issue, Professor Wright explains:

On principle it should be held that the rule of these cases is confined

to actions to which state officials are parties. The best explanation

of Ex parte Young and its progeny is that the Supremacy Clause

creates an implied right of action for injunctive relief against state

officers who are threatening to violate the federal Constitution and

laws. . . . That implied right of action does not reach to a suit by one

private party against another and it ought to be held that there is

no federal jurisdiction of an action for a private party that federal

law has preempted a duty he would otherwise owe to another

private party.

13B CHARLES ALAN WRIGHT, ARTHUR R. MILLER & EDWARD H. COOPER, FEDERAL

PRACTICE AND PROCEDURE § 3566. In line with this understanding, the First

Circuit has stated: “Jurisdiction over actions for declarations of pre-emption can

logically only be asserted where a state official is the defendant.” Colonial Penn

Group, Inc. v. Colonial Deposit Co., 834 F.2d 229, 237 (1st Cir. 1987). Likewise,

when confronted with a declaratory judgment action raising preemption issues

and involving only private parties, the Second Circuit distinguished Shaw

because “[the plaintiffs] have not sued state officials to enjoin them from

enforcing an unconstitutional state law.” Albradco, Inc. v. Bevona, 982 F.2d 82,

87 (2d Cir. 1992).

We agree with these authorities that the principle articulated in

Shaw—that a plaintiff who seeks injunctive relief on preemption grounds

necessarily presents a federal question—does not apply in a suit exclusively

between private parties, in the absence of some showing of state action. Shaw

reemphasized that an affirmative federal cause of action exists against state

officials who interfere with federal rights, including where the state official seeks

to enforce federally preempted state regulations. Shaw did not, however,

establish a comparable right of action against private parties, nor did it

eviscerate that aspect of the well-pleaded complaint rule providing that

9

No. 06-31142

anticipated or potential defenses, including defenses based on federal

preemption, do not establish a basis for federal question jurisdiction.

Because the Railroad sought relief exclusively against private parties and

because the Railroad’s preemption claim arises as an anticipated or potential

federal defense, the Railroad’s argument that federal jurisdiction is established

under Shaw fails.

B

The Railroad next argues that the ICCTA completely preempts the

Louisiana statutory scheme for enclosed estate owners, which has allegedly

authorized the Landowners’ construction and use of these private, at-grade

railroad crossings.

The complete preemption doctrine is an exception to the well-pleaded

complaint rule. McAteer v. Silverleaf Resorts, Inc., 514 F.3d 411, 416 (5th Cir.

2008) (citing Beneficial Nat’l Bank, 539 U.S. at 8). Under the complete

preemption doctrine, what otherwise appears as merely a state law claim is

converted to a claim “arising under” federal law for jurisdictional purposes

because “the federal statute ‘so forcibly and completely displace[s] state law that

the plaintiff’s cause of action is either wholly federal or nothing at all.’” Hoskins,

343 F.3d at 773 (quoting Carpenter v. Wichita Falls Indep. Sch. Dist., 44 F.3d

362, 366 (5th Cir. 1995)). The question in complete preemption analysis is

whether Congress intended the federal cause of action to be the exclusive cause

of action for the particular claims asserted under state law. See PCI Transp.,

418 F.3d at 544; Hoskins, 343 F.3d at 775–76. If Congress intended the federal

cause of action to be exclusive, the state law cause of action is completely

preempted, and federal jurisdiction exists.

The complete preemption doctrine must be distinguished from the concept

of ordinary preemption. See Sullivan v. Am. Airlines, Inc., 424 F.3d 267, 272–73

10

No. 06-31142

(2d Cir. 2005) (distinguishing “complete preemption” from “defensive

preemption” or “ordinary preemption”). “Complete preemption is a

‘jurisdictional doctrine,’ while ordinary preemption simply declares the primacy

of federal law, regardless of the forum or the claim.” Lontz v. Tharp, 413 F.3d

435, 440 (4th Cir. 2005); Johnson v. Baylor Univ., 214 F.3d 630, 632 (5th Cir.

2000) (“‘Complete preemption,’ which creates federal removal jurisdiction, differs

from more common ‘ordinary preemption’ (also known as ‘conflict preemption’),

which does not.”); see also Sullivan, 424 F.3d at 272 n.5 (suggesting that the

term “jurisdictional preemption” would reflect more accurately the doctrine’s

theoretical underpinnings). As a general matter, complete preemption is less

common and more extraordinary than defensive or ordinary preemption. See

Sullivan, 424 F.3d at 272–73 (“Many federal statutes—far more than support

complete preemption—will support a defendant’s argument that because federal

law preempts state law, the defendant cannot be held liable under state law.”).

We have held that the complete preemption doctrine applies to state

causes of action that “fall squarely” under 49 U.S.C. § 10501(b) of the ICCTA.

See PCI Transp., 418 F.3d at 540, 545 (concluding that the ICCTA provided the

exclusive cause of action for the plaintiff’s non-contractual relief that effectively

sought to regulate the operation of a short-line railroad’s switching yard and

therefore fell squarely under § 10501(b)). Section 10501(b) provides:

(b) The jurisdiction of the Board 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,

11

No. 06-31142

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).

The “Board” refers to the Surface Transportation Board (“STB”), 49 U.S.C.

§ 10102(1), which is the body authorized by Congress to administer the ICCTA.

See Friberg v. Kansas City S. Ry. Co., 267 F.3d 439, 442 (5th Cir. 2001) (noting

that with the ICCTA Congress abolished the Interstate Commerce Commission

(“ICC”) and replaced it with the STB to perform many of the regulatory functions

previously performed by the ICC). “As the agency authorized by Congress to

administer the [ICCTA], the Transportation Board is uniquely qualified to

determine whether state law should be preempted by the [ICCTA].” Emerson

v. Kansas City S. Ry. Co., 503 F.3d 1126, 1130 (10th Cir. 2007) (alterations in

original) (quoting Green Mountain R.R. Corp. v. Vermont, 404 F.3d 638, 642 (2d

Cir. 2005)).

Although PCI Transportation applied the complete preemption doctrine

to an asserted state remedy that fell “squarely” under § 10501(b) of the ICCTA,

that decision focused on whether the complete preemption doctrine applied, as

opposed to what extent it applied. We have never defined the precise contours

of complete preemption under § 10501(b) or stated how broadly the complete

preemption doctrine extends in the context of the ICCTA.

The STB has articulated a comprehensive test for determining the extent

to which a particular state action or remedy is preempted by § 10501(b).

However, the STB’s test applies to ordinary preemption analysis under

§ 10501(b); the test does not necessarily apply to complete preemption.

Nonetheless, as discussed below, the STB’s test clarifies the status of routine

crossing cases within the framework of the ICCTA and thus is instructive.

12

No. 06-31142

The STB’s § 10501(b) preemption analysis distinguishes between two types

of preempted state actions or regulations. First, there are those state actions

that are “categorically preempted” by the ICCTA because such actions “would

directly conflict with exclusive federal regulation of railroads.” CSX

Transportation, Inc.—Petition for Declaratory Order, STB Finance Docket No.

34662, 2005 WL 1024490, at *2–*3 (S.T.B. May 3, 2005). Regulations falling

within this first category are “facially preempted” or “categorically preempted”

and come in two types:

The first is any form of state or local permitting or preclearance

that, by its nature, could be used to deny a railroad the ability to

conduct some part of its operations or to proceed with activities

that the Board has authorized. . . .

Second, there can be no state or local regulation of matters directly

regulated by the Board—such as the construction, operation, and

abandonment of rail lines (see 49 U.S.C. 10901–10907); railroad

mergers, line acquisitions, and other forms of consolidation (see 49

U.S.C. 11321–11328); and railroad rates and service (see 49 U.S.C.

10501(b), 10701–10747, 11101–11124).

Id. at *2 (citations and footnote omitted). State actions such as these constitute

“per se unreasonable interference with interstate commerce.” Id. at *3. As such,

the preemption analysis for state regulations in this first category is addressed

to “the act of regulation itself” and “not to the reasonableness of the particular

state or local action.” Id.

The second category of preempted state actions and regulations are those

that are preempted as applied. Section 10501(b) of the ICCTA may preempt

state regulations, actions, or remedies as applied, based on the degree of

interference the particular state action has on railroad operations. “For state or

local actions that are not facially preempted, the section 10501(b) preemption

analysis requires a factual assessment of whether that action would have the

effect of preventing or unreasonably interfering with railroad transportation.”

13

No. 06-31142

Id. Citing our decision in Friberg, 267 F.3d at 439, the STB stated that “it is

well settled that states cannot take an action that would have the effect of

foreclosing or unduly restricting a railroad’s ability to conduct any part of its

operations or otherwise unreasonably burdening interstate commerce.” Id. at

*4.

The STB has clearly identified where routine crossing disputes, such as

the one at issue in this case, fall in this scheme of ICCTA preemption. Routine

crossing disputes are not typically preempted. Crossing disputes, despite the

fact that they touch the tracks in some literal sense, thus do not fall into the

category of “categorically preempted” or “facially preempted” state actions. The

STB has explained that “[t]hese crossing cases are typically resolved in state

courts.” Maumee & W. R.R. Corp. and RMW Ventures, LLC–Petition for

Declaratory Order, STB Finance Docket No. 34354, 2004 WL 395835, at *2

(S.T.B. March 2, 2004). “[R]outine, non-conflicting uses, such as non-exclusive

easements for at-grade road crossings, wire crossings, sewer crossings, etc., are

not preempted so long as they would not impede rail operations or pose undue

safety risks.” Id.; see also CSX Transp., Inc., 2005 WL 1024490, at *6 (approving

the proposition that “a state’s traditional authority over the safety of roads and

bridges at grade-separated rail/highway crossings pursuant to other statutory

schemes is not preempted by section 10501(b) so long as no unreasonable burden

is imposed on a railroad”); City of Lincoln v. Surface Transp. Bd., 414 F.3d 858,

863 (8th Cir. 2005) (STB adopting the position that “it is well established that

nonconflicting, nonexclusive easements across railroad property are not

preempted if they do not hinder rail operations or pose safety risks.”). Thus,

within the STB’s analytical framework, preemption claims in routine crossing

cases fall into the category of as-applied preemption challenges.

14

No. 06-31142

The STB’s position with respect to these routine crossing cases is

consistent with the historical, pre-ICCTA rule governing these crossing disputes.

As the Supreme Court long-ago explained:

The care of grade crossings is peculiarly within the police power of

the states, and, if it is seriously contended that the cost of this grade

crossing is such as to interfere with or impair economical

management of the railroad, this should be made clear. It was

certainly not intended by the Transportation Act to take from the

states or to thrust upon the Interstate Commerce Commission

investigation into parochial matters like this, unless by reason of

their effect on economical management and service, their general

bearing is clear.

Lehigh Valley R.R. Co. v. Bd. of Pub. Util. Comm’rs, 278 U.S. 24, 35 (1928)

(citations omitted); see also Erie R.R. Co. v. Bd. of Pub. Util. Comm’rs, 254 U.S.

394, 409 (1921) (Holmes, J.) (“It is well settled that railroad corporations may be

required, at their own expense, not only to abolish existing grade crossings but

also to build and maintain suitable bridges or viaducts to carry highways, newly

laid out, over their tracks or to carry their tracks over such highways.” (internal

quotation marks omitted)).

The Railroad argues that the Louisiana statutory scheme for enclosed

estate owners, which allegedly authorizes the Landowners’ construction and use

of these private at-grade crossings, is completely preempted by the ICCTA

because the scheme prevents or unreasonably interferes with railroad

operations. Framing the Railroad’s argument within the structure of the STB’s

preemption analysis, the Railroad raises an as-applied preemption challenge to

the Louisiana state law. However, the Railroad does not argue why the STB’s

test for ordinary preemption under the ICCTA should also govern or help define

the scope of the distinct jurisdictional doctrine of complete preemption. More

specifically, the Railroad fails to explain whether and why the fact-intensive

inquiry for as-applied preemption challenges should be considered as part of a

complete preemption analysis under § 10501(b).

15

No. 06-31142

We decline to define the precise contours of the complete preemption

doctrine under the ICCTA. Even assuming that the complete preemption

doctrine extends to as-applied preemption challenges, such as the one raised by

the Railroad in this case, the Railroad has failed to demonstrate that the

Louisiana scheme for enclosed estate owners unreasonably interferes with

railroad operations.

The fatal defect in the Railroad’s argument is that the Railroad fails to

establish that any unreasonable interference with railroad operations is caused

by operation or application of the Louisiana state law as opposed to the

independent actions of private parties. The Railroad bears the burden of

establishing that federal jurisdiction exists. The presumption against

preemption applies with full force to this generally applicable state property law,

even if applied to permit a private, at-grade railroad crossing. See In re Davis,

170 F.3d 475, 481 (5th Cir. 1999) (en banc) (“Deference to our federalism

counsels a presumption that areas of law traditionally reserved to the states,

like police powers or property law, are not to be disturbed absent the ‘clear and

manifest purpose of Congress.’”); Lehigh Valley R.R. Co., 278 U.S. at 35 (“The

care of grade crossings is peculiarly within the police power of the states.”).

Louisiana Civil Code Article 689 provides: “The owner of an estate that

has no access to a public road may claim a right of passage over neighboring

property to the nearest public road. He is bound to indemnify his neighbor for

the damage he may occasion.” This provision operates as follows:

[Article 689] is not self-executing. It does however confer on the

owner of an enclosed estate a legal servitude on the subordinate

property which entitles the owner to a forced passage for indemnity.

The enclosed landowner has the right to go into court and demand

that the passage be fixed, and the establishment of the location of

the right of way either through agreement or by judicial decision, is

a conventional servitude of passage. See LA. CIV. CODE ANN. art.

689; A. YIANNOPOULOS, 4 LOUISIANA CIVIL LAW TREATISE, Predial

Servitudes § 92 (3rd ed. 2004).

16

No. 06-31142

Batton v. United States, No. Civ.A. 05-1219, 2006 WL 568295, at*3 (W.D. La.

Mar. 8, 2006) (Hayes, Mag. J.). Thus, by operation of law, the Landowners—as

enclosed estate owners—have the right under Article 689 to demand a right of

passage over the Railroad’s tracks. Yet while Article 689 permits an enclosed

landowner to demand a right of passage over neighboring lands, it does not

authorize the enclosed landowner to exercise that right however the owner

deems fit. Rather, to obtain the actual, fixed physical manifestation of this right

of passage, the enclosed landowner must either go to court and demand that the

passage be fixed or obtain an agreement from the owner of the subservient

estate.

The Railroad complains that this Louisiana statutory scheme

unreasonably interferes with railroad operations. However, the Railroad’s

primary support for this argument is misleading. To support this argument, the

Railroad focuses on the alleged substandard at-grade crossings that the

Landowners have installed and used, detailing how the number of these

crossings, combined with the substandard workmanship of the crossings,

increase the Railroad’s operating costs and impair the Railroad’s ability to

regularly inspect and maintain its tracks in accordance with federal safety

standards.

The Railroad does not allege that private crossings generally are

fundamentally inconsistent with the Railroad’s ability to operate. Rather, one

aspect of the Railroad’s complaint is that the Landowners have refused to obtain

permits from the Railroad to operate these private crossings. Among other

things, these permits would shift to the Landowners some of the Railroad’s

increased operating costs caused by the private railroad crossings. More

importantly, these permits presumably would allow the Landowners to continue

using the private crossings on terms and conditions approved by the Railroad.

Thus, the Railroad’s willingness and desire to enter into these permit

17

No. 06-31142

agreements suggests that there are methods for constructing and using these

private crossings that minimize any interference with Railroad operations. We

do not read the Railroad’s complaint as suggesting that all crossings

unreasonably interfere with railroad operations. Rather, the Railroad’s primary

complaint is that the particular implementation of the Landowners’ private

crossings unreasonably interferes with railroad operations.

The problem with the Railroad’s argument based on the actual, fixed,

physical implementation of these crossings is that the Railroad fails to link the

interference caused by the implementation of these crossings to Article 689. The

Railroad’s complaint in reality is directed at the actions of private parties, not

the operation of Article 689.

The law in Louisiana is clear: Article 689 is not self-executing. While

Article 689 authorizes the Landowners to demand a right of passage over the

Railroad’s tracks, implementation of the right of passage must be fixed by either

judicial order or the agreement of the parties. The Railroad has not alleged that

any of the purported substandard private crossings at issue here were fixed by

any judicial order entered under the authority of Article 689. Indeed, the

Railroad’s complaint acknowledges and alleges that the Landowners do not have

a legal right to unilaterally install and use these private crossings. As such, the

Railroad has failed to show that any interference with railroad operations

allegedly caused by the construction and use of these substandard crossings can

be attributed to operation of Article 689 as opposed solely to the conduct of

private parties.3

3

We take no position on the legal status of these crossings, many of which have existed

well prior to the Railroad’s acquisition of the track. We simply note that the Railroad has not

satisfied its burden of establishing that Article 689 creates any conflicting scheme of state

regulation subject to the complete preemption doctrine. We discuss these issues only to reach

the conclusion that the federal courts lack subject matter jurisdiction over this crossing

dispute. Because there is no federal jurisdiction in this case, none of our comments should be

construed as passing on the substantive merits of this dispute.

18

No. 06-31142

In addition, the Railroad has not established that Article 689, as it

actually operates, necessarily causes unreasonable interference with railroad

operations. Article 689 is a generally applicable state property law that does not

specifically apply to railroad crossings. This state law is capable of being applied

in a manner that does not unreasonably interfere with railroad operations.

First, Article 689 contains a cost-shifting mechanism; the law requires the

enclosed estate owner to indemnify the owner’s neighbor for any damages the

right of passage may occasion. One of the Railroad’s primary complaints about

these crossings is the damages caused by the crossings in the form of increased

operating costs. We doubt whether increased operating costs are alone sufficient

to establish “unreasonable” interference with railroad operations. See, e.g.,

Lehigh Valley R.R. Co., 278 U.S. at 33–34 (requiring a railroad to bear an

additional $100,000 expense in constructing an overheard crossing to preserve

the straightness of a road for safety reasons held near, but not beyond, the line

of reasonableness). Regardless, Article 689 can be interpreted to avoid the issue

of costs entirely by shifting some of these costs to the Landowners.

The Louisiana statutory scheme for enclosed estates does not specifically

apply to railroad crossings, and the scheme is silent on the proper placement and

construction of such crossings. A strong rationale supports granting a forced

right of passage for enclosed landowners: “As land becomes less available, more

necessary for public habitation, use, and support, it would run contrary to public

policy to encourage landlocking of such a valuable asset and forever removing

it from commerce and from public as well as private benefit.” Rockholt v. Keaty,

237 So.2d 663, 668 (La. 1970). The Louisiana statutory scheme for enclosed

estate owners is sufficiently broad and flexible to permit the Louisiana courts to

take account of this important public interest without unreasonably interfering

with railroad operations. See generally Bailey v. McNeely, 918 So.2d 1124, 1130

(La. Ct. App. 3d Cir. 2005) (“After considering the record in this matter,

19

No. 06-31142

although the placement of the servitude by the trial court may not be the

shortest route to the nearest public road, or the most economical passage, the

trial court’s judgment takes into account all the particular circumstances of the

subject property, as well as existing servitudes, and provides the most practical,

feasible and aesthetic resolution possible.”); see also Erie R.R. Co., 254 U.S. at

410 (“Grade crossings call for a necessary adjustment of two conflicting

interests—that of the public using the streets and that of the railroads and the

public using them. Generically, the streets represent the more important

interest of the two.”). In light of these considerations, the Railroad has not

established and we cannot conclude that Article 689 and the statutory scheme

for enclosed estate owners necessarily would be applied in a manner that

unreasonably interferes with railroad operations.

For these reasons, the Railroad has not established that § 10501(b) of

the ICCTA completely preempts Article 689 and the Louisiana statutory

scheme for enclosed estate owners. The Railroad has thus failed to establish

jurisdiction on the basis of complete preemption under the ICCTA.4

C

The Railroad next argues that jurisdiction is proper because Article 689

is completely preempted by the Federal Railroad Safety Act (“FRSA”). The

FRSA was enacted “to promote safety in all areas of railroad operations and to

4

The parties do not address the fact that § 10501(b) of the ICCTA speaks of the

“exclusive” jurisdiction of the STB with respect to certain matters related to regulation of rail

transportation. The court in PCI Transportation likewise did not address this issue, although

on remand in that case the district court ultimately dismissed the parties’ claims as falling

within the exclusive jurisdiction of the STB. See PCI Transp., Inc. v. Forth Worth & W. R.R.

Co., Inc., No. 4:04-CV-211-Y (N.D. Tex. Sept. 26, 2006). Because the parties do not address

the issue and because we conclude that there is no federal jurisdiction, we do not address this

issue.

20

No. 06-31142

reduce railroad-related accidents, and to reduce deaths and injuries to

persons . . . .” CSX Transp., Inc. v. Easterwood, 507 U.S. 658, 661 (1993). The

FRSA grants the Secretary of Transportation broad power to promulgate

regulations “for all areas of railroad safety.” Id. at 662. The preemptive scope

of the FRSA is outlined in 49 U.S.C. § 201065 and explained more fully by the

Secretary’s regulation on preemption:

Under 49 U.S.C. 20106, issuance of these regulations preempts any

State law, regulation, or order covering the same subject matter,

except an additional or more stringent law, regulation, or order that

is necessary to eliminate or reduce an essentially local safety

hazard; is not incompatible with a law, regulation, or order of the

United States Government; and that does not impose an

unreasonable burden on interstate commerce.

49 C.F.R. § 213.2. In Lundeen v. Canadian Pac. Ry. Co., the Eighth Circuit held

that the plaintiffs’ state common law claim of negligent track inspection against

a railroad was completely preempted by the FRSA. 447 F.3d 606, 614–15 (8th

Cir. 2006). Whether a specific state statute or regulation is preempted by the

FRSA may require a fact-intensive inquiry to determine the nature, if any, of the

conflict between state and federal regulations. See, e.g., Mo. Pac. R.R. Co. v.

5

Section 20106(a) provides:

(2) A State may adopt or continue in force a law, regulation, or order

related to railroad safety or security until the Secretary of

Transportation (with respect to railroad safety matters), or the Secretary

of Homeland Security (with respect to railroad security matters),

prescribes a regulation or issues an order covering the subject matter of

the State requirement. A State may adopt or continue in force an

additional or more stringent law, regulation, or order related to railroad

safety or security when the law, regulation, or order—

(A) is necessary to eliminate or reduce an essentially local safety

or security hazard;

(B) is not incompatible with a law, regulation, or order of the

United States Government; and

(C) does not unreasonably burden interstate commerce.

21

No. 06-31142

R.R. Comm’n of Tex., 833 F.2d 570, 575 (5th Cir. 1987) (remanding for further

factual development regarding the overlap between federal track regulations and

state regulations regarding walkway requirements); see also Mo. Pac. R.R. Co.

v. R.R. Comm’n of Tex., 948 F.2d 179 (5th Cir. 1991) (affirming district court’s

decision that state walkway requirement was preempted).

We do not decide whether the complete preemption doctrine could ever

apply in the context of the FRSA, because in this case it is clear that the

complete preemption doctrine does not apply. The Railroad’s FRSA complete

preemption claim fails for many of the same reasons as its ICCTA claim. First,

the Railroad has failed to allege any safety issue under the FRSA that arises

from the operation or application of Article 689 as opposed to the actions of

private parties. Article 689 is silent on how a right of passage over the

Railroad’s tracks should be implemented or how a crossing should be

constructed. To the extent that the Railroad’s argument for complete

preemption under the FRSA is somehow based on the increased costs incurred

by the Railroad to maintain their tracks in accordance with federal safety

standards, we note again that Article 689 contains a specific cost-shifting

mechanism that could be applied to alleviate these concerns. The Railroad bears

the burden of establishing the court’s jurisdiction, and we of course decline to

presume that the Louisiana state courts would apply Article 689 in a manner

that needlessly conflicts with federal safety standards for railroads.

In addition, the Railroad has not demonstrated that there are any federal

safety standards regulating the implementation of private, at-grade crossings.

The Federal Railroad Administration (“FRA”), the administrative body charged

with enforcing the FRSA, has acknowledged that private crossings are governed

by—if anything—state law, and not federal, law. See Safety of Private Highway-

Rail Grade Crossings; Notice of Safety Inquiry, 71 Fed. Reg. 42716 (Dep’t of

Transp. July 27, 2006).

22

No. 06-31142

For these reasons, without deciding whether complete preemption under

the FRSA might apply in other circumstances, we conclude that the Railroad has

failed on the facts of this case to establish that the Louisiana statutory scheme

for enclosed estate owners is completely preempted under the FRSA.

D

Finally, the Railroad argues that federal question jurisdiction is

established because the Railroad’s claims implicate significant federal issues,

citing the doctrine first developed in Smith v. Kansas City Title & Trust Co., 255

U.S. 180 (1921). According to the Supreme Court’s most recent formulation of

this doctrine, “the question is, does a state-law claim necessarily raise a stated

federal issue, actually disputed and substantial, which a federal forum may

entertain without disturbing any congressionally approved balance of federal

and state judicial responsibilities.” Grable & Sons Metal Prods., Inc. v. Darue

Eng’g & Mfg., 545 U.S. 308, 314 (2005).

Here, the Railroad argues that they have raised a disputed and

substantial question of federal law arising from the need to control the

Landowners’ interference with its railroad right-of-way for providing interstate

transportation services; the Railroad also states that there is a strong federal

interest in maintaining railroad service throughout the country. However, the

Railroad does not identify which state law claim it has asserted that (a)

necessarily raises a stated federal issue that is (b) disputed and substantial and

that (c) does not upset the federal and state balance. In essence, the Railroad’s

broad argument on this point attempts to establish federal jurisdiction on the

basis of the general federal interest in interstate railroad transportation. In the

absence of a more specific argument that attempts to address the standard

outlined in Grable & Sons, we cannot conclude that the Railroad has raised a

significant federal issue sufficient to establish federal question jurisdiction.

23

No. 06-31142

IV

We DISMISS that portion of the appeal challenging the district court’s

decision to remand the Rayborn action to state court.

With respect to the Railroad’s declaratory judgment action, because the

Railroad has failed to establish any basis for federal jurisdiction, we AFFIRM

the district court’s dismissal for want of jurisdiction.

24