Franks Investment Co. LLC v. Union Pacific Railroad

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT United States Court of Appeals

Fifth Circuit

FILED

January 6, 2010

No. 08-30236 Charles R. Fulbruge III

Clerk

FRANKS INVESTMENT COMPANY LLC

Plaintiff - Appellant

v.

UNION PACIFIC RAILROAD CO.

Defendant - Appellee

Appeal from the United States District Court

for the Western District of Louisiana

Before JONES, Chief Judge, and KING, JOLLY, DAVIS, SMITH, BARKSDALE,

GARZA, BENAVIDES, STEWART, CLEMENT, PRADO, OWEN, ELROD,

SOUTHWICK, and HAYNES, Circuit Judges.1

Leslie H. Southwick, Circuit Judge.

The question before the en banc court is whether the preemption provision

of a federal statute preempts a state law possessory action filed by a landowner

to preserve a long-existing crossing over railroad tracks. We conclude that this

landowner’s state law action, removed to federal court based on diversity of

citizenship, is not preempted. Consequently, we REVERSE the district court

and REMAND for adjudication of the merits of the state law claims.

1

Judges WIENER and DENNIS did not participate in this decision.

No. 08-30236

I. BACKGROUND

Franks Investment Company owns a large tract of land in Louisiana. It

leases portions of that land for farming. One boundary of the Franks land is

parallel to Louisiana Highway 1 for about two miles. The tracks of the Union

Pacific Railroad are laid on a 100-foot-wide strip of land it owns between the

Franks property and Highway 1. The Union Pacific operates freight service on

this line between Shreveport and Alexandria.

For decades, four private railroad crossings provided access to the Franks

property from Highway 1. Wooden planks were laid between the rails, while the

approaches consisted of dirt and gravel. In 2005, the Union Pacific posted

notices of intent to close two of the four crossings that accessed Franks’s

property. Franks and the railroad entered negotiations, but there was no

satisfactory resolution.

In December 2007, the Union Pacific closed and removed two of the

crossings. It then threatened to remove the other two. In January 2008, Franks

filed suit in state court under Louisiana Code of Civil Procedure Article 3655,

claiming that it possessed a real right to use the four crossings. Franks sought

an injunction to prevent the Union Pacific from closing the two remaining

crossings and to compel it to replace the two crossings it removed.

The Union Pacific removed the case to federal court, as there was diversity

of citizenship. Following a two-day bench trial, the district court ruled in favor

of the railroad. The court found that Franks’s state law action was preempted

by a federal statute that we will discuss. A unanimous panel of this court

affirmed, agreeing that Franks’s possessory action was expressly preempted.

Franks Inv. Co., LLC v. Union Pac. R.R. Co., 534 F.3d 443 (5th Cir. 2008).

Franks’s petition for rehearing en banc was granted, causing the panel opinion

to be withdrawn. Franks Inv. Co., LLC v. Union Pac. R.R. Co., 562 F.3d 710 (5th

Cir. 2009). We now address the preemption issues anew.

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No. 08-30236

II. DISCUSSION

The statutory provisions at the center of this dispute are in the Interstate

Commerce Commission Termination Act (“ICCTA”). Pub. L. 104-88, 109 Stat.

803. In one of its sections, the jurisdiction of the Surface Transportation Board

(“STB”) is defined and the preemptive effect of the statute is declared.

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,

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).

We will explore this language at length. First, we review some basics.

The preemptive effect of a federal statute is a question of law that we

review de novo. Friberg v. Kan. City Southern Ry. Co., 267 F.3d 439, 442 (5th

Cir. 2001).

In determining the existence and reach of preemption, Congress’s purpose

is “the ultimate touchstone” to use. Medtronic, Inc. v. Lohr, 518 U.S. 470, 485

(1996) (quoting Retail Clerks v. Schermerhorn, 375 U.S. 96, 103 (1963)).

Congress can show its purpose in one of two ways. First, it may “indicate pre-

emptive intent through a statute’s express language.” Altria Group, Inc. v.

Good, 129 S. Ct. 538, 543 (2008). However, even when there is an express

preemption clause in a statute, “the question of the substance and scope of

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No. 08-30236

Congress’ displacement of state law still remains.” Id. Second, Congress may

impliedly preempt state law “if the scope of the statute indicates that Congress

intended federal law to occupy the legislative field, or if there is an actual

conflict between state and federal law.” Id.; see Friberg, 267 F.3d at 442.

There is also a presumption that the “historic police powers of the States

[are] not to be superseded by the Federal Act unless that was the clear and

manifest purpose of Congress.” Altria Group, 129 S. Ct. at 543 (quoting Rice v.

Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947)). The presumption is relevant

even when there is an express pre-emption clause. That is because “when the

text of a pre-emption clause is susceptible of more than one plausible reading,

courts ordinarily ‘accept the reading that disfavors pre-emption.’” Id. (quoting

Bates v. Dow Agrosciences LLC, 544 U.S. 431, 449 (2005)). Thus, the

presumption operates both to prevent and to limit preemption.

This court has explained that the presumption against preemption is

applicable to “areas of law traditionally reserved to the states, like police powers

and property law. . . .” Davis v. Davis, 170 F.3d 475, 481 (5th Cir. 1999) (en

banc). More recently and topically, we discussed the presumption against

preemption in another railroad crossing case. New Orleans & Gulf Coast Ry. Co.

v. Barrois, 533 F.3d 321 (5th Cir. 2008). We found the no-preemption

presumption to apply “with full force to this generally applicable state property

law, even if applied to permit a private, at-grade railroad crossing.” Id. at 334.

However, the specific preemption issue in Barrois was different. We

considered whether there was “complete preemption” under the ICCTA. Under

that doctrine, a state law claim will be transformed into one that arises under

federal law when a federal statute commands the entire legal arena and in effect

displaces any competing state law. Id at 331. Such preemption actually creates

federal jurisdiction by its domination of the arena. Id. We found no complete

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No. 08-30236

preemption. Id. at 338. Today we address the more common, indeed, the

ordinary category of preemption.

We conclude, though, that the presumption need not be invoked in this

case. Even without analyzing how that presumption might limit the preemptive

effect of this enactment, we decide that preemption does not apply.

Today’s dispute was created by the physical intersection of railroad

operations and an owner’s access to its land. Consequently, the law to be

applied, absent preemption, is that which Louisiana applies to real property

disputes.

A. Express Preemption

Because the relevant statute contains a preemption clause, statutory

construction analysis begins with “the plain wording of the clause, which

necessarily contains the best evidence of Congress’ pre-emptive intent.” CSX

Transp., Inc. v. Easterwood, 507 U.S. 658, 664 (1993).

The parties disagree over the meaning of the text. The entire relevant

section of the statute is only two, though lengthy, sentences. A structural issue

is the relationship between the two sentences. The Union Pacific argues, first,

that what controls is the section’s first sentence, namely, that jurisdiction of the

STB over “transportation by rail carriers” is exclusive. Next, the power of the

word “exclusive” leads to federal preemption of all state court proceedings

affecting rail transportation. In the railroad’s view, because the present dispute

concerns either transportation by rail carriers under Section 10501(b)(1) or rail

facilities under Section 10501(b)(2), the STB is the only venue.

Conversely, Franks insists that we should focus on the second sentence of

Section 10501(b)(2), as it contains the preemption clause. That sentence states

that “the remedies provided under this part with respect to regulation of rail

transportation are exclusive,” a clause that contains several words important

to our interpretation. The sentence closes by saying that the provided remedies

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No. 08-30236

“preempt the remedies provided under Federal or State law.” To Franks, use of

the word “regulation” indicates that only laws that specifically regulate railroad

transportation are preempted, while generally applicable laws that merely

impact railroad transportation are not preempted.

As we seek to understand these words, we need to understand their

context. The Act’s title reveals that at least one of its effects was to terminate

the Interstate Commerce Commission. The jurisdiction of the STB over what

used to be regulated by the ICC needed to be defined. We focus today on Section

10501(b). The entirety of Section 10501 – too long to quote unless necessary, and

it is not – provides that the STB has jurisdiction over transportation by rail

carriers, which includes transportation only by rail, and also that which occurs

by rail and water in some situations. 49 U.S.C. § 10501(a)(1). The next

subsection provides that the transportation subject to STB’s jurisdiction has

certain geographical requirements, such as occurring between a place in one

state and a place in a territory of the United States, or between two different

places in the same state so long as the transportation is part of an interstate rail

network. Id. §§ 10501(a)(2) (A) & (B). It is following these statements of

jurisdictional conditions that Congress dropped in the language of Section

10501(b), that the jurisdiction is exclusive and the remedies are preemptive.

Other limitations then follow, such as the STB’s authority in quite narrow

situations over local rail transportation. Id. § 10501(c)(3)(B).

The remedies available at the STB dealing with “rates, classifications,

rules, . . . practices, routes, services, and facilities of such carriers,” are exclusive.

Some of those remedies are set out in Section 10701, which establishes

standards for rates. Other provisions of the ICCTA deal with general

requirements for rail operations. Obviously, many of the subjects listed in the

exclusive jurisdiction section are significant ones dealing with the basics of the

functions of railroads, e.g., rates and routes.

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No. 08-30236

We view the Union Pacific’s arguments using the light given by this

context. For the first time before the en banc court, it argues that tracks are

railroad facilities under Section 10501(b)(2). Today is too late; this argument is

waived. See United States v. Brace, 145 F.3d 247, 250 (5th Cir. 1998) (en banc).

Next, it is argued that railroad crossings fit within the definition of

“transportation” under Section 10501(b)(1). The district court found the relevant

part of the ICCTA’s definition of “transportation” to be this: “a locomotive, 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.” 49 U.S.C. § 10102(9)(A). After quoting this definition, the

district court cited an opinion from the Northern District of New York, that had

found that any physical improvement made to railroad tracks necessarily

impacts the movement of passengers or property. See Island Park, LLC v. CSX

Transp., Inc., No. 1:06-CV-310, 2007 WL 1851784 (N.D.N.Y. June 26, 2007),

rev’d, 559 F.3d 96 (2d Cir. 2009). As a result, all railroad crossings disputes fall

within the definition of transportation.

We have the luxury not provided to the district court of knowing that the

precedent on which it relied, and particularly the expansive definition of

“transportation,” was rejected on appeal. See Island Park, 559 F.3d at 102. The

Second Circuit held, in reversing the district court’s opinion that was relied on

here, that a state court action involving whether a private railroad crossing used

to transport farm equipment should be closed was not preempted. Id. at 99, 103.

The court noted:

In our view, the term rail “transportation” does not encompass

the closure of this private rail crossing. Rail transportation does

include “property . . . related to the movement of passengers or

property . . . by rail,” 49 U.S.C. § 10102(9)(A), and a rail crossing

does constitute “an improvement to railroad tracks that allows

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No. 08-30236

vehicles, equipment, and persons to traverse the tracks.” 2007 WL

1851784, at *12. But we cannot conclude that all state action

related to a railroad crossing is pre-empted. The appropriate

questions are: what does the state seek to regulate and does the

proposed regulation burden rail transportation?

Id. at 103 (footnote omitted). The court went on to conclude that closing a

crossing does not relate to movement of passengers or property.

The Union Pacific distinguishes Island Park on the basis that it involved

a state administrative order requiring a railroad to close a crossing for safety

reasons. Franks is a private landowner using a state law to keep a railroad

crossing open. This distinction is unimportant. Both cases involve state laws

that affect railroad crossings. It does not matter whether the impetus behind an

attempt to close a crossing comes from the state or the railroad owner. In either

case, preventing the railroad owner from making its own decisions regarding

railroad crossings creates the same amount of potential interference with

railroad operational decisions.

We conclude that the relevant part of Section 10501(b) is its second

sentence. The first, and longer one, is defining the authority of the STB in

dealing with the fundamental aspects of railroad regulation, and barring others

from interfering with those decisions by making the jurisdiction exclusive. We

will return to that part of the statute later, but not until after we review the

source of the preemption – the second sentence of the section.

We break the second sentence down into its component parts. What is

declared to be exclusive are “the remedies provided under this part,” which we

have to some extent already discussed. There are proceedings before the STB

that can be held on such matters as rates, rules, practices, and routes.

Complaints about such matters can be brought to the STB. Remedies through

administrative action are the exclusive ones.

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Those remedies are exclusive “with respect to regulation,” that last word

being the one fought over in this case and in the precedents. The Eleventh

Circuit has held that “Congress narrowly tailored the ICCTA pre-emption

provision to displace only ‘regulation,’ i.e., those state laws that may reasonably

be said to have the effect of ‘manag[ing]’ or ‘govern[ing]’ rail transportation, . . .

while permitting the continued application of laws having a more remote or

incidental effect on rail transportation.” Fla. E. Coast Ry. Co. v. City of W. Palm

Beach, 266 F.3d 1324, 1331 (11th Cir. 2001).2 We find this interpretation of the

ICCTA to be persuasive. The text of Section 10501(b), with its emphasis on the

word regulation, establishes that only laws that have the effect of managing or

governing rail transportation will be expressly preempted.

Finally, the remedies that are preempted are those “provided under

Federal or State law,” but those remedies receive their meaning from the earlier

part of the sentence. To the extent remedies are provided under laws that have

the effect of regulating rail transportation, they are preempted.

This analysis is consistent with the STB’s explanation of preemption under

the ICCTA. Our Barrois opinion reviewed the STB’s interpretation, and found

that it distinguished between two types of state actions:

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.” 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

2

A number of other circuits have explicitly adopted this position as well. See, e.g., PCS

Phosphate Co. v. Norfolk Southern Corp., 559 F.3d 212, 218 (4th Cir. 2009); Adrian &

Blissfield R.R. Co. v. Vill. of Blissfield, 550 F.3d 533, 539 (6th Cir. 2008); N.Y. Susquehanna

& Western Ry. Corp. v. Jackson, 500 F.3d 238, 252, 254 (3d Cir. 2007) (noting also that “[i]n

particular, we agree that a state law that affects rail carriage survives preemption if it does

not discriminate against rail carriage and does not unreasonably burden rail carriage”).

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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; railroad mergers,

line acquisitions, and other forms of consolidation; and

railroad rates and service.

Barrois, 533 F. 3d at 332 (citations omitted). Such regulation would by its very

nature be “unreasonable interference with interstate commerce” and must be

preempted. Id. We went on to discuss a second category of state actions that the

STB found to be “preempted as applied.” Id. We will discuss those in a later

section of the opinion.

Resolving the typical disputes regarding rail crossings is not in the nature

of regulation governed by the exclusive jurisdiction of the STB. The relevant

question under the ICCTA is whether Franks’s railroad crossing dispute invokes

laws that have the effect of managing or governing, and not merely incidentally

affecting, rail transportation. It does not. Franks brought a possessory action,

claiming that it had a servitude of passage similar to an easement over the

crossings. This suit is governed by Louisiana property laws and rules of civil

procedure that have nothing to do with railroad crossings. Railroads are only

affected when the servitude happens to cross a railroad. These property laws are

not meant to regulate railroad transportation, though at times they may have

an incidental effect on railroad transportation.

The cases on which the district court relied can be viewed as consistent

with this interpretation of preemption. The case that may have been most

heavily relied on by the district court was from this circuit and involved a state

law tort suit against a railroad company for allowing trains to block railroad

crossings. Friberg, 267 F.3d at 440-41. It is clear that a tort suit that attempts

to mandate when trains can use tracks and stop on them is attempting to

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manage or govern rail transportation in a direct way, unlike a state law property

action regarding railroad crossings. As we noted in Friberg, “[r]egulating the

time a train can occupy a rail crossing impacts, in such areas as train speed,

length and scheduling, the way a railroad operates its trains, with concomitant

economic ramifications . . . .” Id. at 443. These same concerns are not present

in Franks’s state law property action.

The district court also cited a Ninth Circuit case involving state and local

environmental laws that were impeding the ability of a railroad company to buy,

improve, and reopen a railroad track. City of Auburn v. United States, 154 F.3d

1025 (9th Cir. 1998). That case also involved an attempt to manage or govern

rail transportation, not an incidental effect on rail transportation.

Additionally, the district court relied on an Eighth Circuit opinion

involving a city’s condemning twenty feet of a one-hundred-foot-wide right-of-

way over a length of several city blocks. City of Lincoln v. Surface Transp. Bd.,

414 F.3d 858, 858-59 (8th Cir. 2005). The City desired the long stretch of land

in order to improve a storm sewer and for a recreational trail. The only issue on

appeal, though, concerned the taking of the property for a trail. Id. at 863 (the

STB did not rule on the use of property as a storm sewer).

After the railroad revealed that it would argue federal preemption if the

City sought to condemn the property, the City filed for a declaratory judgment

from the STB. The STB ruled, and the Eighth Circuit affirmed, that the City’s

eminent domain action would “unduly interfere with railroad operations and

interstate commerce.” Id. at 860. To be clear, the dispute in City of Lincoln was

whether “losing a 20 foot strip from the right of way along four blocks of the line

would leave insufficient room for storage, loading, and unloading, as well as

access to the track for maintenance and derailment response.” Id. at 861.

The Lincoln opinion is quite relevant. It sustained the STB’s application

of an as-applied test, as can be seen in this section of the STB’s decision:

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Based on our review of the record in this proceeding, we find

that [the City of] Lincoln has not adequately refuted [the railroad’s]

contentions that it uses all of its right-of-way, including the

northernmost 20 feet, for rail transportation purposes, and that the

narrowing of the right-of-way to construct a trail would hinder or

halt those legitimate transportation operations and create safety

hazards. The burden is on Lincoln to justify its extraordinary

request to allow a taking of actively used railroad property. We

conclude, based on the record, that Lincoln has not met that burden.

Lincoln has not proffered convincing evidence that [the railroad] can

satisfy its present and future rail transportation needs using less

than the full width of its right-of-way, or that the proposed trail can

safely be placed so near [an] active rail line. Because Lincoln has not

made such a showing, we cannot declare, as Lincoln requests, that

its proposed taking will not unduly interfere with interstate

commerce.3

After the Eighth Circuit’s affirmance, the City continued its plan to

condemn the property for a storm sewer, though not as a surface trail. This led

to a second declaratory judgment action at the STB and a different outcome.

Courts have held that Federal preemption can shield railroad

property from state eminent domain law where the effect of the

eminent domain law would have been to prevent or unreasonably

interfere with railroad operations. But neither the court cases, nor

Board precedent, suggest a blanket rule that any condemnation

action against railroad property is impermissible. Rather, routine,

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.

Courts can, and regularly do (sometimes with input from the

Board through referral) make determinations as to whether

proposed eminent domain actions such as this would interfere with

railroad operations. The uses that [the railroad] has raised concerns

about here are common and of the type that the courts are

well-suited to address. While the Board enjoys broad discretion to

institute a declaratory order proceeding to eliminate a controversy

3

City of Lincoln – Petition for Declaratory Order, STB Finance Docket No. 34425, 2004

WL 1802302 (S.T.B. August 11, 2004) (citations omitted).

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or remove uncertainty, the particular facts of this case do not

suggest that further Board involvement is needed here.4

Why the Lincoln storm sewer project was less disruptive than the

recreational trail was not explained. Likely the surface use would only be during

construction; the storm sewer would be underground; the railroad eventually

would reclaim use of its entire surface right of way.

The set of City of Lincoln rulings are informative because they highlight

relevant distinctions. Substantial interference with railroad operations will be

preempted; routine crossing disputes will not. Barrois, 533 F.3d at 332-33.

For a state court action to be expressly preempted under the ICCTA, it

must seek to regulate the operations of rail transportation. Franks’s possessory

action invokes only state property laws and is not expressly preempted.

B. Implied Preemption

Our next question is which test should be used to determine whether

Franks’s action is impliedly preempted. Franks argues that we should adopt the

test used by the STB for such a determination.

The STB’s amicus brief to the en banc court explained the two-part test it

applies to preemption questions. We have already discussed the STB’s view

about the kinds of state regulation that are expressly preempted. According to

its brief, other state law actions “may be preempted as applied—that is, only if

they would have the effect of unreasonably burdening or interfering with rail

transportation, which involves a fact-bound case-specific determination.”

We discover articulations of such a test in STB decisions:

For state or local actions that are not facially preempted, the section

10501(b) preemption analysis requires a factual assessment of

4

Lincoln Lumber Co.—Petition for Declaratory Order—Condemnation of a Railroad

Right-of-Way for a Storm Sewer, STB Finance No. 34915, 2007 WL 2299735, *2-3 (STB Aug.

10, 2007) (citations omitted).

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whether that action would have the effect of preventing or

unreasonably interfering with railroad transportation.5

In Barrois, we expressed interest in but did not need to endorse or reject

the STB’s as-applied analysis for railroad crossing disputes. 533 F.3d at 333. We

observed that the usual crossing disputes were not “categorically preempted” or

“facially preempted” under the STB test but were to be resolved in state court.

Id. Instead, “within the STB’s analytical framework, preemption claims in

routine crossing cases fall into the category of as-applied preemption

challenges.” Id. We today go further in our review of the STB’s test.

Franks and the STB argue that we should give deference to the STB’s

interpretation of the preemptive effect of the ICCTA and therefore apply the

STB’s preemption analysis. We acknowledged in Barrois that the STB was “the

agency authorized by Congress to administer” the ICCTA, making it “uniquely

qualified to determine whether state law should be preempted by the” ICCTA.

533 F.3d at 331 (internal quotation marks and citations omitted). However, the

Supreme Court has recently reminded us that the reach of preemption is

unlikely to be a matter within the expertise of an agency:

While agencies have no special authority to pronounce on

pre-emption absent delegation by Congress, they do have a unique

understanding of the statutes they administer and an attendant

ability to make informed determinations about how state

requirements may pose an obstacle to the accomplishment and

execution of the full purposes and objectives of Congress. The

weight we accord the agency’s explanation of state law’s impact on

the federal scheme depends on its thoroughness, consistency, and

persuasiveness.

Wyeth v. Levine, 129 S. Ct. 1187, 1201 (2009) (internal quotation marks and

citations omitted).

5

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

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

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Therefore, the STB’s decision regarding the preemptive effect of the

ICCTA and the test it uses to determine preemption are not binding on us. Still,

we are free to adopt the STB’s preemption test to the extent that we find it to be

reasonable and a persuasive interpretation of the relevant considerations. The

STB’s test places in ICCTA specifics the general concerns of conflict preemption,

those concerns being whether compliance with both state and federal law is

impossible. Friberg, 267 F.3d at 442. We adopt the STB’s as-applied preemption

analysis as appropriate for implied preemption under the ICCTA.6

Under this fact-based test, state law actions can be preempted as applied

if they have the effect of unreasonably burdening or interfering with rail

transportation. The district court did not reach the issue of implied preemption

because it found Franks’s state law claims to be expressly preempted.

Franks makes several arguments regarding why its claim should not be

impliedly preempted. Franks’s primary argument is that the facts as proven in

the district court do not show that these private railroad crossings unreasonably

burden or interfere with rail transportation. The Union Pacific argues that the

district court made specific findings that private railroad crossings like the ones

at issue in this case affect safety, drainage, and maintenance issues and that

these factual findings cannot be ignored unless they are clearly erroneous. The

Union Pacific maintains that those findings support a conclusion that Franks’s

private crossings unreasonably burden and interfere with railroad operations.

In this case, the district court conducted a two-day bench trial before

finding that Franks’s state law claims were expressly preempted. There was

6

Other circuits have utilized in their ICCTA implied preemption analysis the STB’s

fact-specific approach of determining whether a law or action has the effect of unreasonably

interfering with the railroad. See Island Park, 559 F.3d at 103-06 (conducting factual inquiry

specific to the crossing at issue for preemption analysis, though the court never explicitly

states that it is using the STB’s as-applied test); PCS Phosphate Co., 559 F.3d at 220-22;

Adrien & Blissfield R.R. Co., 550 F.3d at 540-42 (adopting the STB’s two-part test in its

entirety); Jackson, 500 F.3d at 253-54; Emerson, 503 F.3d at 1133.

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argument and evidence presented regarding how private crossings affect

railroad operations. The Union Pacific noted that the crossings at issue were

made of wooden planks with approaches made out of dirt and gravel. The tracks

were said to be located in a low-lying area prone to flooding, and the land under

the tracks was often wet due to its low elevation and the high water table.

Through testimony from some of its employees, the railroad argued that

the presence of private crossings can increase the risk of derailment and made

track maintenance much more expensive and time consuming. The Union

Pacific maintained that the crossings trap water under the track, which

degrades the ballast and the crossties. This leads to increased track instability

and can cause trains to have to move at a slower speed over affected portions of

the track. Additionally, the crossings intersect a portion of the track that can be

used as a staging area where trains are held to regulate traffic flow in and out

of the nearby terminal.

Franks disputed each of these points. In questioning the Union Pacific’s

employees, Franks established that there had never been derailments in the

area. Further, there was no evidence that trains had needed to slow down

during the seventy years that the crossings had been present. Franks also

maintained that regardless of whether trains staged there, it just wanted to

have access to the crossings when trains were not present. There was also no

evidence of the specific crossings at issue causing safety issues.

Franks now argues that all of the evidence relating to railroad crossings

introduced at the trial was general and not specific to the four railroad crossings

at issue in this case. Therefore, Franks argues that the Union Pacific has not

shown that the four crossings at issue unreasonably burden or interfere with

railroad operations. The Union Pacific argues that it has shown that private

crossings of the type at issue here do burden railroad transportation and that

the district court’s findings support its position.

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The source for the Union Pacific’s argument appears to be the district

judge’s statement during his ruling from the bench that a “crossing is a physical

addition to the tracks that allows vehicles to cross the tracks; and that,

according to trial testimony, affects safety, drainage, and maintenance issues.”

We do not see this statement as a fact finding based on the specifics of the four

crossings at issue in this case. While the statement includes the language

“according to trial testimony,” the finding relates to all railroad crossings, not

just private ones or the ones at issue in this case.

We conclude that the district court decided only that all railroad crossings

affect rail transportation. Certainly at one level that is true. We have held,

though, that more is required before preemption applies. This same reasoning

undermines the Union Pacific’s argument that general testimony regarding

railroad crossings satisfies the burden of proving preemption under the as-

applied test. The Union Pacific presented testimony that private crossings like

the ones at issue here can affect drainage, increase track maintenance costs, and

cause trains to move at slower speeds. However, the railroad did not tie any of

these specific problems to these four crossings. Though the Union Pacific

provided two district court opinions that found preemption based on potential

interference with rail transportation, both of those cases involved actions that

would have the effect of regulating when a railroad or its facilities could

operate.7 These would be instances to apply express preemption and not as-

applied preemption under the STB’s test. By definition, an as-applied challenge

would need to address specific crossings. Otherwise, a finding of as-applied

preemption in this case would be nothing more than a finding that private

7

See Fayard v. Northeastern Vehicle Servs., LLC, 490 F. Supp. 2d 134, 141-42 (D.

Mass. 2007), rev’d on other grounds, 533 F.3d 42 (1st Cir. 2008); Rushing v. Kan. City Southern

Ry. Co., 194 F. Supp. 2d 493, 499 (S.D. Miss. 2001).

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crossing disputes are always preempted, at least in low-lying areas. We have

rejected that view of ICCTA preemption.

There is no evidence in the record to permit a finding that the four

crossings created any unusual interference with the railroad. These were typical

crossings and a typical dispute. It is not one that is federally preempted.

III. CONCLUSION

Section 10501(b) of the ICCTA does not expressly preempt Franks’s state

law action regarding use of its private railroad crossings. No evidence in this

record leads to a finding of implied preemption.

We REVERSE the district court’s judgment and REMAND for proceedings

on the merits of Franks’s state law claims.

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No. 08-30236

RHESA HAWKINS BARKSDALE, Circuit Judge, joined by Judges JOLLY and

STEWART, dissenting:

Regarding express preemption, while the result reached by the well-

written majority opinion may reflect what the ICCTA should say, the majority

fails to enforce what the ICCTA does say. The ICCTA expressly grants the

Surface Transportation Board (STB) exclusive jurisdiction over “transportation

by rail carriers”; and, such “transportation” includes rail crossings.

Understandably, this statutorily-mandated result may be inconvenient, or

burden the STB, or even be an undesirable policy choice. That, of course, does

not authorize our altering the statute’s vesting exclusive jurisdiction in the STB.

Accordingly, I must respectfully dissent.

Primarily at issue is whether Congress, through the ICCTA, expressly

preempted laws such as Louisiana Code of Civil Procedure Article 3655. This

analysis, of course, focuses on the language of the preemption clause. CSX

Transp., Inc. v. Easterwood, 507 U.S. 658, 664 (1993). Regarding the STB’s

exclusive jurisdiction and concomitant preemption, the ICCTA provides:

The jurisdiction of the [Surface Transportation] 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,

is exclusive. Except as otherwise provided in this part, the

remedies provided under this part with respect to

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No. 08-30236

regulation of rail transportation are exclusive and preempt

the remedies provided under Federal or State law.

49 U.S.C. § 10501(b) (emphasis added).

Pursuant to this section, the STB has “exclusive” jurisdiction over

“transportation by rail carriers”, which, as discussed infra, includes the rail

crossings at issue. This is one of the “remedies” provided by this section for the

“regulation of rail transportation”, addressed in the above preemption provision.

Pursuant to the above section, that remedy is “exclusive and prempt[s] the

remedies provided under Federal or State law”, including the Louisiana

possessory action at issue.

This is the plain meaning of the section. Our court applies the plain

meaning of a statute unless doing so would lead to an absurd result. E.g.,

Tesfamichael v. Gonzales, 411 F.3d 169, 173 (5th Cir. 2005). Vesting exclusive

jurisdiction in the STB over railroad crossings does not lead to such a result.

Obviously, for matters of this type, resolution should initially be through the

STB, not the courts. Judicial review is available. 28 U.S.C. § 2321 (judicial

review of STB orders). Moreover, as discussed infra, other sources, including the

STB’s interpretation of this section, should not be allowed to alter this plain

meaning.

The majority takes an approach at odds with this plain meaning. Under

the majority’s analysis, the questions are: does a rail crossing constitute

“transportation by rail carriers”; and, does a state judicial remedy that affects

operation of a crossing constitute “regulation of rail transportation”? (Even

under this approach, there should be express preemption.)

In the light of the ICCTA’s broad definition of “transportation”, the

district court concluded correctly that a railroad crossing constitutes

“transportation by rail carriers”. The ICCTA defines “transportation” to

include, inter alia, “a locomotive, car, vehicle, . . . property, facility,

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No. 08-30236

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”. 49 U.S.C. § 10102(9)(A) (emphasis added). That a rail crossing falls within

this definition is inescapable.

The majority rejects this obvious conclusion but does not explain how a

railroad crossing is not “equipment of any kind related to the movement of

passengers or property, or both, by rail”, other than by citation to Island Park,

LLC v. CSX Transp., Inc., 559 F.3d 96 (2d Cir. 2009). See Maj. Op. at 7–8. Yet

the Second Circuit admitted (in the very quotation relied upon by the majority):

“Rail transportation does include ‘property . . . related to the movement of

passengers or property . . . by rail,’ 49 U.S.C. § 10102(9)(A), and a rail crossing

does constitute an improvement to railroad tracks that allows vehicles,

equipment, and persons to traverse the tracks”. 559 F.3d at 103 (internal

quotation omitted); Maj. Op. at 7-8.

Although the Second Circuit implicitly recognized that, under the

statute’s plain language, a rail crossing does constitute “transportation by rail

carriers”, it nonetheless held “the term rail ‘transportation’ does not encompass

. . . this private rail crossing”. Id. at 103. The Second Circuit reached this

conclusion by conflating the question raised by the first sentence of 49 U.S.C.

§ 10501(b) (what is transportation) with that raised by its second sentence (what

is regulation of rail transportation), but then added a factor not found in the

section: “what does the state seek to regulate and does the proposed regulation

burden rail transportation”? Id.

The majority follows suit and, while keeping the two inquiries separate,

asks whether the state law at issue substantially interferes with railroad

operations. Maj. Op. at 13. Some might posit that, from a policy perspective,

this is desirable. This “substantial interference” approach, however, has no

basis in the language of the ICCTA.

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No. 08-30236

Our court’s binding precedent in Friberg v. Kansas City Southern Railway

Co., 267 F.3d 439 (5th Cir. 2001), is instructive. Friberg addressed whether the

ICCTA expressly preempted the Texas Anti-Blocking Statute, Tex. Transp.

Code. Ann. § 741.007(a). That statute limited, inter alia, the length of time a

train could occupy a railroad crossing. Friberg noted: “Regulating the time a

train can occupy a rail crossing impacts, in such areas as train speed, length and

scheduling, the way a railroad operates its trains . . . .” Id. at 443. Accordingly,

our court held the ICCTA expressly preempted Texas’ attempt to regulate a

railroad’s use of railroad crossings. Id. at 444.

The majority attempts to distinguish Friberg by stating: “These same

concerns are not present in Franks’s state law property action”. Maj. Op. at 11.

No further explanation is given, however. On the other hand, the district court

found such concerns present when it found regulation of the ownership and use

of railroad crossings affects safety, drainage, and maintenance, which

necessarily affect “rail transportation”.

In the absence of preemption, a remedy under Louisiana Code of Civil

Procedure Article 3655 could both compel the reinstallation of the destroyed

crossings and enjoin the closing of others. In short, this is “regulation of rail

transportation”, over which the STB has exclusive jurisdiction.

As stated, to circumvent this conclusion, the majority holds the ICCTA

preempts state regulation of crossings only if such regulation constitutes a

“[s]ubstantial interference with railroad operations”. Maj. Op. at 13. Again,

this approach cannot be justified under the ICCTA’s plain language; nor should

our court look past that language to other sources, including the STB’s flawed

analysis.

Finally, because the ICCTA expressly preempts Franks’ state-law action,

I do not reach implied preemption vel non, except to agree with the majority, of

course, that the district court’s findings about how crossings affect “rail

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No. 08-30236

transportation” related to all railroad crossings, not just to those at issue in this

action.

I respectfully dissent.

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