Opposition Brief — CSXT, Inc. v. Pitz

NO. 89-1227 |<

IN THE

SUPREME COURT OF THE UNIT

OCTOBER TERM, 1989

CSXT, INC.,

Petitioner,

vs.

JAMES J. PITZ, DIRECTOR OF THE DEPARTMENT

OF TRANSPORTATION OF THE STATE OF MICHIGAN,

NORMA J. FLEMING, ADMINISTRATOR

OF THE RAILROAD SAFETY AND TARIFFS

DIVISION OF THE DEPARTMENT

OF TRANSPORTATION OF THE STATE OF MICHIGAN

and THE DEPARTMENT OF TRANSPORTATION OF

THE STATE OF MICHIGAN

and

UNITED TRANSPORTATION UNION,

Respondents.

ON PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

Respondent United Transportation Union’s

Brief in Opposition

William Reid Ralls *

Leland R. Rosier

Bruce H. Edwards

Rallis Urban & Rosier, P.C.

118 W. Ottawa Street

Lansing, Michigan 48933

(517) 372-6622

Attorneys for Respondent

United Transportation Union

*COUNSEL OF RECORD

BEST AVAILABLE COPY

COUNTER-STATEMENT OF QUESTIONS PRESENTED

Whether a Michigan Department of Transportation (MDOT)

Rule requiring ‘adequate toilet facilities be made available’’,

but which does not require toilets on locomotives textually or

by agency or state court construction, provides the basis for a

facially conclusive preemption challenge under the Locomotive

Boiler Inspection Act, 45 USC 22 et seq. (LBIA), which only

regulates locomotives and not the entire consist.

Il.

Whether a State Rule requiring ‘‘adequate toilet facilities be

made available”’ is facially preempted by the Federal Railroad

Safety Act (FRSA) where the Secretary of Transportation has

not prescribed rules directly governing locomotive toilets and the

FRSA expressly allows states to adopt or continue in force any

rule related to railroad safety until the Secretary has adopted

a rule covering the subject matter.

Il.

Whether this Court should use this case to determine if a facial-

ly conclusive preemption claim renders abstention inappropriate

where CSXT does not have a facial claim of federal preemption,

where the Court below did not directly address the question and

where other lower courts have not directly addressed this issue,

leaving this Court without the benefit of lower court decisions.

il

IV.

Whether the State administrative hearing at issue should be

considered ‘‘judicial’’ in nature for purposes of Younger absten-

tion where the hearing was to be held in accordance with Chapter

4 of the Michigan Administrative Procedures Act which provides,

inter alia, for representation by counsel, the filing of pleadings,

subpoenaing of witnesses and documents, direct and cross ex-

amination of witnesses, a decision by a neutral administrative

law judge and judicial review in the state court system.

v.

Whether the Court should grant certiorari to a case which

would require it to determine the merits of two arguments rais-

ed by UTU below which were not addressed by the Court of Ap-

peals, i.e. (1) CSXT’s claim should be dismissed because it fail-

ed to exhaust its administrative remedies, and (2) the District

Court failed to seek a construction of the Rule which would avoid

the constitutional challenge but instead impermissibly rendered

an advisory opinion and improperly enjoined one possible

construction.

ili

LIST OF PARTIES AND RULE 28.1 LIST

The parties before the Court of Appeals and this Court are all

listed in the caption.

United Transportation Union has the following parent companies,

subsidiaries and affiliates: NONE

iV

TABLE OF CONTENTS

Page

ee tS a a Gian’ a phe wea Re ew 8 Sodas |

I hs oe da ae onic die ae Pceee oe hare 2

CONSTITUTIONAL PROVISIONS. STATUTORY

PROVISIONS & REGULATIONS INVOLVED ...... 2

DU PUWUEEOE TOE BUMS CPR ccc cect ces ceress 3

REASONS FOR DENYING THE PETITION.......... 4

CONCLUSION & RELIEF REQUESTED ........... 15

APPENDICES

Oa soy ce 6 4k elses 60 ose Foch wie bees A-|

Judgment of the Court of Appeals

ero aan eas Sen oi eek Ree as B-|

Opinion of the Court of Appeals

IN a ota te wk a 5a os dp dle ase Dope C-]

Court of Appeals Order Denying Rehearing

a _ OSSIRE SE SIR ae ir gare ar ae rere D-|

Opinion of the District Court

a Laren ohne at a bi c-s'b ab sees be hae Oe E-]

Michigan Statutes controlling the

Administrative Hearing

-

TABLE OF AUTHORITIES

CASES: PAGE

Aircraft and Diesel Equipment Corporation v

Hirsh, 331 U.S. 752, 67 S. Ct. 1493, 91

RA re Peer ee 13, 14

Attorney General v Michigan Public Service

Commission, 412 Mich 385, 316 N.W.2d 187

CUE i nos 5-0 OS cca ca eae eee kes ea as 8

Fleming v Nestor, 363 U.S. 603, 80 S. Ct.

3 mee me 8, TER a eer eee 14

Johnson v Robinson, 415 U.S. 361, 94 S. Ct.

1160, 39 L.Ed.2d 389 (1974)............... Jaga 14

Middlesex County Ethics Committee v Garden

State Bar Association, 457 U.S. 423, 102

Fe ee ae 11

Missouri Pacific Railroad Co. v Railroad

Commission of Texas (MOPAC 1), 833 F.2d

ey RR ee fee at ee ere 4

Moore v Sims, 442 U.S. 415, 99 S. Ct. 2371,

OD Ste OT at csc ewe oe alsa ns cones 15

Myers v Bethleham Shipbuilding Corp. , 303

U.S. 41, 58 S. Ct. 459, 82 L.Ed. 638 (1938) ....... 13

Napier v Atlantic Coastline R. Co., 272 U.S.

605, 47S. Ch 207.78 Lie OSs CIR ow cee ets 4

New Orleans Public Service, Inc. v Council

of the City of New Orleans, 491 U.S.

109 S. Ct. 2506. 105 L.Ed.2d 298 (1989)........... 7.9.11

New York v Ferber, 458 U.S. 747, 102 S. Ct.

3348. 73 L.Ed.2d 1113 (1982) ..............0000-- 14

Ohio Civil Rights Commission v Dayton

Christian School, 477 U.S. 619, 106 S. Ct.

py) Bee ee 10, 11

Prentis v Atlantic Coastline Co., 211 U.S.

230, Je S.C. Gi ae ec Be A nck vce eee 1]

Public Utility Commission of Ohio v United

Fuel Gas Co., 317 U.S. 456, 63 S. Ct. 369,

SF Ree Sees 6 eee whee eae a ee aoe 10, 14

vi

CASES: PAGE

Railroad Commission v Pullman. 312 U.S. 496.

61 S. Ct. 643, 85 L.Ed. 971 (1941) ............... 10

Withrow v Larkin, 421 U.S. 35. 95 S. Ct.

1456. 43 L.Ed.2d 712 (1975) ..................... |?

Younger Vv Harris, 401 U.S. 37. 91 S. Ct.

746, 27 L.Ed.2d 669 (1971) ...................... 10

Constitution, Statutes and Regulations

Michigan Constitution:

Article II], §2 6... eee. 12

Federal Statutes:

Federal Railroad Safety Act 45 USC § 421

et seq. (““FRSA™) .................. cc cece . 3.6

Locomotive Boiler Inspection Act 45 USC §

22 et.seq. (*LBIA™’) ............................ 4.5

Michigan Statutes:

MICH. COMP. LAWS ANN. § 462.41 ............ 2

State regulations:

MICH. ADM. CODE, Rule 460.1473.............. 2-3,6.7

No. 89-1227

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1989

CSXT, INC.,

Petitioner,

vs.

JAMES J. PITZ, DIRECTOR OF THE DEPARTMENT

OF TRANSPORTATION OF THE STATE OF MICHIGAN,

NORMA J. FLEMING, ADMINISTRATOR

OF THE RAILROAD SAFETY AND TARIFFS

DIVISION OF THE DEPARTMENT

OF TRANSPORTATION OF THE STATE OF MICHIGAN

and THE DEPARTMENT OF TRANSPORTATION OF

THE STATE OF MICHIGAN

and

UNITED TRANSPORTATION UNION,

Respondents.

ON PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

Respondent United Transportation Union (UTU) respectfully re-

quests that this Court deny the petition for writ of certiorari seeking

review of the Sixth Circuit’s opinion in this case.

OPINIONS BELOW

Contrary to the representation of CSXT, the opinion of the Court

of Appeals is reported, see 883 F.2d 468 (Appendix B). The opin

ion of the District Court is reported at 669 F. Supp 127

(Appendix D).

2

JURISDICTION

UTU accepts CSXT’s jurisdiction statement.

: CONSTITUTIONAL PROVISIONS, STATUTORY

PROVISIONS AND REGULATIONS INVOLVED

UTU accepts listings | through 6 presented by CSXT. UTU denies

the legal conclusion in No. 7 that the Michigan Department of

Transportation (MDOT) lacks judicial power and affirmatively states

that the administrative hearing at issue was “‘judicial’’ in nature.

One additional statute addressing MDOT’s powers is MICH. COMP.

LAWS ANN. § 462.41, which provides in part as follows:

‘Upon the request of the commission [pow MDOT] it shail be

the duty of the attorney general, or the prosecuting attorney of

the proper county, to aid in any investigation, prosecution, hear-

ing, or trial had under the provisions of this act, and to institute

and prosecute all necessary actions or proceedings for the en-

forcement of this act and of all other laws of this state relating

to common carriers, and for the punishmeni of all violations

thereof.’” (Emphasis added).

MICH. ADM. CODE RULE 460.1473 is set forth below in its

entirety for ease of reference:

~

‘*(1) Adequate toilet facilities shall be made available for

trainmen, enginemen and yardmen, after hearing thereon and

order by the commission, which toilet facilities shall be kept

in a reasonably clean and sanitary condition.

(2) All yard diesels shall have the floors cleaned and the win-

dows washed at reasonable intervals.

(3) All cabooses shall have the interior washed once each year.

Road cabooses used on trains handling ore in open top equip-

ment, and all yard and transfer cabooses, shall have the floors

scrubbed or mopped once each month, if the crew using same

request it.

Windows on all cabooses shall be washed once a month, ex-

cept in freezing weather.

(4) When required by the season of the year,doors and win-

dows of cabooses shall be equipped with adequate metal strip-

ping. Similarly, when required by the season of the year,

3

cabooses shall be equipped with screen doors or screen panels,

and windows on each side of each caboose shall be screened.

Sliding screen windows, however, shall be deemed adequate.

(5) An adequate supply of cool, sanitary water, satisfactory

for drinking purposes, shall be made available for the use of

trainmen, enginemen and yardmen. Suitable sanitary containers,

equipped with a faucet or other dispenser, shall be maintained

on cabooses and locomotives, and individual drinking cups shall

be furnished by the company.

(6) Every caboose used in any train in this state, regardless

of service, shall be provided with a stove or other adequate means

of heating. A sufficient amount of fuel for the trip or shift shall

be made available.

(7) Baggage and express cars, when occupied by employees

coming under the provisiuns of this act, will be so arranged in

the train that employees required to ride such cars will have ac-

cess to the drinking water, toilet and washing facilities provid-

ed in a coach in said train and, if it is found impractical to so

arrange said cars in the train, then drinking water, toilet and

washing facilities must be furnished for the employees riding

said cars upon formal order of and by the commission.

STATEMENT OF THE CASE

UTU is unable to accept CSXT’s statement of the case. UTU refers

the Court to the statement of facts presented in the Court of Ap-

peals and District Court opinions.

UTU must also point out that the contested Rule does not textual-

ly require installing toilets on locomotives and that it has never been

authoritatively construed by MDOT to so require. CSXT’s state-

ment of the case fails to note that UTU has suggested alternative

constructions.

CSXT has stated that two-thirds of its locomotives are already

equipped with toilets. As UTU pointed out to the Courts below, the

Rule could be complied with by using nonequipped locomotives on

any consist (road train) where either another equipped locomotive

is present or where an equipped passenger car or an equipped caboose

is part of the same consist. Since most train consists include more

than one locomotive, and since only one locomotive in the consist

must be equipped, one of the unequipped locomotives could be

4

used on most consists in Michigan. Nonequipped locomotives also

may be used in the yard areas since adequate facilities are usually

available in the yard area. CSXT’s Appendix G-6 recognizes this.

REASONS FOR DENYING THE PETITION

I. The Court of Appeals’ observation that the LBIA does not

prohibit concurrent state regulation or purport to occupy

the field of railroad regulation was: (1) accurate, (2) does

not conflict with prior rulings of this or other Courts, and

(3) was superfluous to its holding that Younger abstention

was appropriate.

The first argument raised by CSXT inaccurately portrays the deci-

sion * the Court of Appeals. CSXT claims that a comment made

by the Court of Appeals in a paragraph providing background to

the dispute was a holding that contradicted other Court decisions.

The complained of observation was not, however, a ‘*holding”’

of the Court of Appeals. The complained of language was mere dicta

and not necessary to the Court of Appeals’ finding that Younger

abstention was appropriate.

The background comment about which CSXT complains is where

the Court said the LBIA:

‘lists certain equipment required for locomotives and railroad

cars ... does not prohibit concurrent state regulation or purport

to occupy the field of railroad [regulation]*."’ (App. B, p. B-4).

*Misprinted in the text of the opinion as ‘‘negotiation’’.

This statement is in fact correct as far as it goes. CSXT is im-

properly reading the phrase ‘‘railroad regulation’’ to mean

‘‘locomotive regulation’’. These two phrases are, however, quite

different. This Court held in Napier v Atlantic Coastline, 272 U.S.

605, 47 S. Ct. 207, 71 L.Ed. 432 (1926) that the LBIA occupied

the field of locomotive equipment. The Court of Appeals did not

deny this. The Court of Appeals merely said that the LBIA does

not occupy the field of railroad regulation. Railroad regulation covers

a much broader category than that of locomotives. This was recent-

ly recognized by the Fifth Circuit when it held in Missouri Pacific

Railroad Co. v Railroad Commission of Texas, (MOPAC 1), 833

5

F.2d 570, 576 (CA 5, 1987) that cabooses are not within the pur-

view of the LBIA. The Court upheld a state rule requiring fire ex-

tinguishers and first-aid kits on cabooses and rejected an LBIA

preemption claim. The LBIA would thus not preempt a state rule

requiring toilets on cabooses or roadcars, which would be consis-

tent with the disputed Rule’s text.

The cases cited by CSXT which supposedly conflict with the obser-

vation of the Court of Appeals all specifically address regulation

of locomotives and, therefore, are not in conflict with the Court of

Appeals’ statement that the LBIA does not occupy the field of railroad

regulation. Railroad regulation encompasses the entire consist, road-

cars, cabooses, railroad tracks, etc. and not only locomotives.

CSXT’s argument is also erroneous in that it seems to assume that

the Court of Appeals found the Rule was not preempted by the LBIA.

A careful reading of the Court of Appeals’ decision shows this is

not the case. The Court of Appeals held that abstention was ap-

propriate and then noted that the State Court system had jurisdic-

tion to, and was capable of, resolving CSXT’s constitutional claims.

The Court of Appeals’ statement that the LBIA does not occupy

the field of railroad regulation was in fact correct, does not confiict

with any of the cases cited by CSXT and was unrelated to and did

not affect its holding that Younger abstention was appropriate. The

statement, therefore, does not provide a basis for granting certiorari.

CSXT is still free to argue in the State Court system that the Rule

is preempted by the LBIA.

II. A facial preemption claim is not presented where the

Rule merely requires ‘‘adequate toilet facilities be made

available‘*, where the Secretary of Transportation has

not prescribed rules covering locomotive toilets, aid

where the Federal Railroad Safety Act, 45 USC 421 et

seq. (FRSA) allows state rules until the Secretary adopts

a rule covering the subject matter.

CSXT complains that the Court of Appeals rendered a conflic-

ting decision concerning the FRSA. This argument is incorrect in

that the complained of language was not a ‘‘holding’’ of the Court

but merely dicta found in a background paragraph. The complained

of language 1s in fact correct and did not provide a basis for the

Court’s holding that Younger abstention was appropriate.

6

The comment about which CSXT complains is where the Court

said the FRSA allows the Secretary of Transportation to:

‘‘prescribe appropriate rules for all areas of railroad safety,’’

including rules concerning equipment and operating procedures.

(Citing FRSA § 431 (a)). The Act allows limited concurrent state

regulation.’ (App B, p. B-4).

CSXT objects to the statement that the FRSA allows limited con-

current state regulation. The footnote at the end of the complained

of language refers the reader to 45 USC § 434, the statute which

sets forth the two instances when the FRSA does allow limited con-

current state regulation. The statement of the Court of Appeals was

correct and is not in conflict with any court decisions.

The Sixth Circuit made an accurate statement, i.e., limited con-

current state regulation is allowed. CSXT has not cited any cases

which state that § 434 of the FRSA is not the law. It would indeed

be unusual to find a conflict here since the Court was merely sum-

marizing a statute.

CSXT’s discussion of how ‘‘cover the subject matter’’ should be

construed is irrelevant to the instant petition because the Court of

Appeals did not even address this issue. The Court’s decision does

not foreclose CSXT from arguing in favor of FRSA preemption in

the state court proceedings.

The disputed MDOT rule is not facially preempted by the FRSA.

The Rule textually requires *‘adequate toilet facilities be made

available.’’ The Court of Appeals correctly stated on page 5 of its

opinion that the Secretary has not prescribed rules directly govern-

ing locomotive toilets. The District Court stated that ‘*locomotive

commodes do not appear as specific regulated items’’, see Appen-

dix D-5. These statements fully demonstrate that the disputed MDOT

Rule is not ‘‘facially"’ preempted by the FRSA. A fair argument

exists concerning how ‘“‘covers the subject matter’’ should be con-

strued and, therefore, the Rule may be valid as the Secretary has

not adopted a rule covering toilets. A facial preemption claim thus

simply does not exist.

The alleged conflict does not exist. The complained of statement

is irrelevant to the Court of Appeals’ holding that Younger absten-

tion was appropriate. The complained of statement was dicta and

in fact quite accurate.

7

Ill. This is not an appropriate case to determine if a facial-

ly conclusive preemption claim renders abstention in-

appropriate because CSXT’s claim is not facial, only

, the lower court did not directly address the

issue and other courts have not yet directly addressed

the issue.

CSXT claims that the Sixth Circuit held that Younger abstention

is appropriate in facially conclusive preemption claims. This is an

incorrect assessment of the Court’s decision.

In New Orleans Public Service, Inc. v Council of City of New

Orleans (NOPSI), 491 U.S. , 109 S. Ct. 2506, 105 L.Ed.2d

298 (1989), this Court rejected an argument that Younger does not

require abstention in the face of a substantial preemption claim. This

Court said it disagreed with such a contention. Thereafter, in dicta.

this Court said that perhaps a facially conclusive (in contrast with

a substantial claim) preemption claim would render Younger absten-

tion inappropriate.

The Court of Appeals did not, however, acknowledge the possi-

ble distinction between a facially conclusive and a substantial preemp-

tion claim suggested by the dicta in NOPSI/. The Court of Appeals

relied on this Court’s direct rejection of the claim that Younger absten-

tion is foreclosed due to a substantial preemption claim. The Court

of Appeals stated:

‘“We do not see any reason to analyze abstention cases involv-

ing a preemption claim differently than other abstention cases.’

(App. B, p. B-9).

Thus, the Sixth Circuit did not directly address whether Younger

abstention is appropriate when a facially conclusive preemption claim

is presented. CSXT cannot argue that the Court of Appeals decided

this issue. CSXT even states on pages 11-12 of its petition that the

Court of Appeals did not acknowledge that NOPS/ distinguished be-

tween ‘‘substantial’’ preemption claims and ‘‘facia!ly conclusive”’

preemption claims. Thus, the very issue framed by CSXT is not

supported by the Sixth Circuit’s decision. The Court of Appeals’

decision does not purport to answer the question left open by the

NOPSI Court's dicta.

This case is not an appropriate vehicle to determine if Younger

abstention is inappropriate when a federal Court is faced with a facial-

ly conclusive preemption claim because CSXT’s claim is not facially

8

conclusive and because this issue has not yet had a chance to per-

colate through the lower courts.

A. CSXT’s preemption claim is not facially con-

clusive.

The disputed Rule requires that ‘adequate toilet facilities’’ be made

available for trainmen, enginemen, and yardmen. The Rule never

mentions the word locomotive and does not use the word installa-

tion. CSXT’s entire preemption claim is premised on a construc-

tion of the Rule which would require the installation of toilets on

its presently non-equipped locomotives. CSXT claims that MDOT

interprets the Rule to require installation of toilets on its locomotives.

It is true that the assistant attorney general representing the enforce-

ment division of MDOT has advocated this construction in the

preliminary stages of this proceeding. This, however, is not the same

thing as a definitive construction of the Rule by the agency itself.

This is clearly set forth in Attorney General v Michigar Public

Service Commission, 412 Mich 385, 420; 316 NW2d 187 (1982),

where the Michigan Supreme Court said:

‘*While lawyers often make concessions binding on their clients in

particular litigation, the views of a lawyer representing a regulatory

commission should not be accepted by this Court as an authoritative

construction by an agency charged with the administration of an act.

The authoritative statement of the views of the commission regard-

ing its concept of the meaning of the utility securities act is to be

found in its decisions and opinions.’’ (emphasis added).

This language is applicable to the Rule before this Court. This

disputed Rule has not been construed by an MDOT administrative

law judge or by the Transportation Commission itself. No agency

decisions or opinions exist which provide the agency's interpreta-

tion of the Rule.

UTU believes that requiring toilets on all locomotives is one way

to enforce the Rule. This, however, is a long way from saying that

it is the only way to comply with the Rule. The Rule textually does

not require the installation of toilets on locomotives. In fact, a review

of all seven subsections of the rule demonstrates that the rulemakers

were not averse to prescribing rules for particular train cars. For

example, the seven subsections of the Rule list the following train

cars: yard diesels, road cabooses, yard cabooses, transfer cabooses,

9

locomotives, baggage cars, express cars and coaches. Specific re-

quirements are set forth for these listed train cars. No particular cars

are listed in the first subsection of the Rule, which is the portion

of the Rule disputed herein. The thrust of the first subsection is

availability of toilet facilities to trainworkers and not on which train

car such facilities must be made available. The failure to use the

word locomotive in the first subsection,when it is used in the fifth

subsection, shows a lack of intent to impose a specific requirement

upon locomotives as the only way with which the rule may be com-

plied. Therefore, it cannot fairly be said that a facial preemption

claim exists.

In NOPSI, this Court analyzed whether a facial preemption claim

existed. The Court said:

But we cannot conclusively say it is wrong without further fac-

tual inquiry — and what requires further factual inquiry can hard-

ly be deemed *‘flagrantly’’ unlawful for purposes of a threshold

abstention determination. (VOPS/, 491 U.S. , 109 S. Ct.

at 2517). ae

Thus, further inquiry negated a claim of facial preemption. The

text of the disputed Rule, which has never been authoritatively con-

strued, cannot be deemed flagrantly in violation of the LBIA or

FRSA. The Rule on its face cannot be said to be plainly invalid.

One must look beyond the face of the Rule to find preemption.

B. The issue has not percolated through the lower

courts.

Even if the disputed Rule textually required the installation of toilets

on locomotives (which it does not), this would not be an appropriate

case to determine if Younger abstention is inapplicable to facially

conclusive preemption claims.

The possibility that facially conclusive preemption claims may not

be subject to Younger abstention was raised for the first time in dic-

ta by this Court in its June 19, 1989 decision in NOPSI/. The Sixth

Circuit’s opinion did not directly address this issue. CSXT has not

cited any other lower court decisions which have attempted to answer

this question. Given the recent origin of this possible distinction,

this Court would be well advised to let the lower courts grapple with

the issue. This will allow the competing policy issues and legal

theories to be applied in a variety of factual situations. Once these

have been considered in the lower courts, a consensus may be reached

10

or at least competing legal theories may be presented from which

this Court may choose. It would be premature for this Court to seek

to resolve this question without the benefit of lower court decisions.

There can be no question that this issue is deserving of a thorough

airing in the lower courts before this Court attempts to resolve it.

The above reasoning also applies to CSXT’s suggestion that this

Court should clarify that Public Utilities Co. umission of Ohio v United

Fuel Gas, 317 U.S. 456, 63 S. Ct. 369, 87 L.Ed. 396 (1943) sur-

vives Younger v Harris, 410 U.S. 37, 91 S. Ct. 746, 27 L.Ed.2d

669 (1971), and Ohio Civil Rights Commission v Dayton Christian

Schools, 477 U.S. 619, 106 S. Ct. 2718, 92 L.Ed.2d 1 (1986). Once

again, this is a question the Sixth Circuit did not address, and CSXT

has not cited any Court opinion that has addressed this issue.

Moreover, it is not clear that any clarification is necessary. United

Fuel Gas invalidated orders that were plainly invalid on their face.

Younger allows invalidation of a statute that is flagrantly and patently

unconstitutional.

The Court also should recognize that CSXT’s statement on page

14 of its petition that United Fuel Gas refused to apply abstention

to a facially conclusive claim neglects to mention that it was Pullman

abstention which was not applied, Railroad Commission v Pullman,

312 U.S. 496, 61 S. Ct. 643, 85 L.Ed. 971 (1941). Younger was

not decided until 1971.

UTU further refers the Court to the decision of the Sixth Circuit,

which demonstrates that no good reason exists to analyze absten-

tion cases involving a preemption claim differently from other absten-

tion cases.

IV. The Court of Appeals’ decision that the MDOT ad-

ministrative proceeding was ‘‘judicial’’ in nature was

correct and not in conflict with any decisions of this

Court or the Michigan Supreme Court.

CSXT contends that the administrative hearing at issue was not

‘‘judicial’’ in nature and, therefore, Younger abstention was

inappropriate.

Pages 9-12 of CSXT’s Appendix G reproduce the notice of hear-

ing issued by the administrative law judge. The notice indicates that

the contemplated hearing was to be conducted in accordance with,

inter alia, 1969 PA 306 Ch 4, i.e., Chapter 4 of the Michigan

11

Administrative Procedures Act, MICH. COMP LAWS ANN. §

24.271-287 (pertinent parts reproduced verbatim in Appendix E).

These statutes provide for a contested hearing containing all the

hallmarks of a hearing which are ‘‘judicial’’ in nature. These statutes

provide for the following:

1. Representation by counsel.

2. The filing of pleadings.

3. Subpoenaing of witnesses and documents.

4. Direct and cross examination of witnesses.

5. A decision by a neutral administrative law judge (presiding

officer).

6. A decision by the agency.

All of the above listed procedures fully indicate that the ad-

ministrative hearing at issue was ‘‘judicial’’ in nature.

Further guidance is provided by NOPSI. Therein the Court ex-

plained that an agency’s proceedings are characterized as judicial

or legislative depending on the ‘‘nature of the final act’’ which it

is designed to produce. NOPSI, 109 S. Ct. at 2519. NOPSI cited

with approval the following language from Prentis v Atlantic Coast

Line Inc., 211 U.S. 210, 226, 20 S. Ct. 67, 53 L.Ed. 150 (1908),

where the Court said:

‘*A judicial inquiry investigates, declares and enforces liabilities

as they stand on present or past facts and under laws supposed

already to exist. That is its purpose and end. Legislation on the

other hand looks to the future and changes existing conditions

by making a new result to be applied thereafter to all or some

part of those subject to its power.”’

The hearing at issue was to investigate and determine if CSXT

had violated a state Rule in the past and therefore can only be

characterized as ‘‘judicial’’ in nature.

In Middlesex County Ethics Comm v Garden State Bar Associa-

tion, 457 U.S. 423, 433-434, 102 S. Ct. 2515, 73 L.Ed.2d 116

(1982), and in Ohio Civil Rights Commission v Dayton Christian

Schools, Inc., 477 U.S. 619; 106 S. Ct. 2718; 92 L.Ed.2d 1 (1986),

the court found state administrative hearings to be ‘‘judicial’’ in

nature.

12

CSXT’s reference to the Michigan Constitutional provision that

requires separation of powers is inapplicable, Mich. Const. Art II

§ 2. In Michigan, an agency may exercise quasi-judicial powers not-

withstanding the separation of powers provision of the Michigan Con-

stitution. Were this not true, all of Chapter 4 of the Michigan Ad-

ministrative Procedures Act would be unconstitutional. MDOT was

tO be exercising quasi-judicial power when it held the contestec case

hearing, and this is sufficient to constitute a proceeding ‘hat is

‘*judicial’’ in nature.

CSXT next contends that the administrative hearing was not

‘‘judicial’* in nature because MDOT was acting as both the **adver-

sary and decisionmaker’’.

MDOT is a large state agency with many divisions. A complaint

was filed by UTU alleging that CSXT had violated a Rule. MDOT’s

enforcement division investigated the claim. Upon a determination

that the complaint merited further review, a hearing was scheduled.

The hearing was to be held by an impartial administrative law judge.

The enforcement division was to be represented by an assistant at-

torney general. CSXT was allowed to have its own counsel. The

administrative law judge was to determine if the Rule had been

violated. The agency thereafter would issue a final order. If still

aggrieved, CSXT could seek judicial review through the State Court

system.

The claim that MDOT was both adversary and decisionmaker is

thus without merit. In reality, the hearing was similar to a criminal

prosecution in that a party files a complaint, a prosecutor authorizes

the filing of charges and thereafter a trial is held before a judge.

Under CSXT’s convoluted reasoning, the State is the adversary and

decisionmaker in criminal proceedings; after all, the police, pro-

secutor, and judge all work for the government. In Withrow v Larkin,

421 U.S. 35, 95 S. Ct. 1456, 43 L.Ed.2d 712 (1975), the Court

Stated that it was permissible for a judge to preside at a bench trial

over a defendant even where the same judge had previously authoriz-

ed an arrest warrant because probable cause existed to believe a crime

had been committed.

CSXT states that the essence of a judicial proceeding is a neutral

forum. The Michigan Administrative Procedures Act meets this con-

cern by requiring that administrative hearings be conducted in an

impartial manner before an unbiased officer, MICH. COMP. LAWS

ANN. § 24.279.

13

— The Court of Appeals’ decision that the Michigan administrative

proceeding at issue was “‘judicial’’ in nature was clearly correct ane

not in conflict with any Court holdings.

V. The Court should not grant certiorari to this case because

grounds not considered below exist which this court

would also have to accept if certiorari is granted.

UTU raised several grounds for reversal in its appeal before the

Sixth Circuit. That Court only addressed one of the issues raised,

i.e., Younger abstention. The Court did not address other arguments

UTU had presented. These other meritorious issues would have to

be evaluated by this Court if it were to grant certiorari. Having to

rule on these issues without having the benefit of a decision from

the Court of Appeals to review militates against granting CSXT’s

petition.

A. CSXT Failed to Exhaust its Administrative Remedies

UTU argued before the District Court and Court of Appeals that

CSXT was not entitled to any relief in federal court because it had

not exhausted its administrative remedies. If certiorari is granted,

this Court will have to address the merits of this contention without

having the benefit of a ruling from the District Court or Court of

Appeals on the issue.

The doctrine of exhausting administrative remedies provides that

no one is entitled to judicial relief for a supposed or threatened in-

jury until the prescribed administrative remedy has been exhausted,

Myers v Bethleham Shipbuilding Corp. , 303 U.S. 41, 50-51, 58 S.

Ct. 459, 82 L.Ed. 638 (1938). CSXT failed to exhaust its ad-

ministrative remedies in that it did not participate in the scheduled

contested hearing or thereafter appeal any order entered against it.

At the time CSXT filed suit, MDOT had not ordered CSXT to do

anything.

Exhaustion is warranted when the matter involves an unsettled

question of law or when the agency could resolve the matter on non-

constitutional grounds. Aircraft & Diesel Equipment Corp. v Hirsch,

331 U.S. 752, 67 S. Ct. 1493, 91 L.Ed. 1767 (1947).

The Sixth Circuit stated on page 7 of its opinion that *‘it is not

prudent for courts to interfere in the regulatory process before the

facts are sorted out and the regulatory rule is defined and applied’

14

(emphasis added). The Rule at issue has not been defined or ap-

plied by the state administrative law judge or the Transportation Com-

mission on review of the administrative law judge's decision. UTU

had made clear that CSXT’s challenge to the Rule could have been

resolved by the agency on nonconstitutional grounds. This Court

carefully noted inUnited Fuel Gas that the federal court plaintiff had

exhausted its administrative remedies prior to seeking an injunction

in federal court, 317 U.S. at 470.

The Rule textually only requires availability, not installation of

toilets on locomotives. Two-thirds of CSXT’s locomotives have

toilets already installed on them. In light of the fact that almost all

consists have two or more locomotives on them, the problem for

CSXT could be considered one of dispatching and not installation.

See page 6 of CSXT’s exhibit G which acknowledges this. Ii is ap-

parent that CSXT jumped the gun. MDOT had not authoritatively

construed the Rule. MDOT had not entered a cease and desist order.

MDOT was never given the chance to construe the Rule. If MDOT

had entered an order forbidding CSXT from running consists in

Michigan without having one equipped locomotive or some other

equipped car, then CSXT would not be required to instal! any toilets.

Other rulings MDOT could have made short of ordering the installa-

tion of toilets demonstrate the reason the District Court’s opinion

was premature, advisory and totally unwarranted. The express policy

reasons which gave rise to the holding of Hirsch are present in the

case before the Court.

B. The District Court ignored its duty to give the rule

a limiting construction which would save it from

the perceived preemption but instead improperly

enjoined one possible construction of the Rule.

Statutes (and administrative rules) are to be presumed constitu-

tional, Fleming v Nestor, 363 U.S. 603, v17, 80 S. Ct. 1367, 4

L.Ed.2d 1435 (1960). It is a cardinal principle that Courts are to

seek statutory constructions which avoid constitutional doubts,

Johnson v Robinson, 415 U.S. 361, 366-367, 94 S. Ct. 1160, 39

L.Ed.2d 389 (1974). A state statute which has not been authoritatively

construed by a state court should be construed in a manner that will

avoid constitutional questions, New York v Ferber, 458 U.S. 747,

102 S. Ct. 3348; 73 L.Ed.2d 1113 (1982).

15

The District Court failed to pay homage to or to obey either of

these admonitions. The disputed Rule has never been authoritative-

ly construed by the Transportation Commission, an MDOT ad-

ministrative law judge or a state court. The District Court put the

cart before the horse by advising that one construction was preempted

instead of abstaining so the agency or state court could construe the

Rule. At a minimum, the District Court should have given the Rule

a limiting construction. The Court in Moore v Sims, 442 U.S. 415,

429-430, 99 S. Ct. 2371, 60 L.Ed.2d 994 (1979) stated that Younger

abstention:

‘‘offers the opportunity for narrowing constructions that might

obviate the constitutional problem and intelligently mediate

federal constitutional concerns and state interests’’.

This language fully supports the Court of Appeals’ decision to

require abstention.

CONCLUSION AND RELIEF REQUESTED

For the reasons set forth above, respondent United Transporta-

tion Union submits that a writ of certiorari should not be granted

in this case.

Respectfully submitted,

William Reid Ralls—

Counsel of Record

Leland R. Rosier

Bruce H. Edwards

118 West Ottawa Street

Lansing, Michigan 48933

(517) 372-6622

Dated: February 23, 1990

er

APPENDIX A

A-1l

United States Court of Apprals

For THE SLxtH CIRcuItT

No. 88-1629

CSXT, INC, a Virginia corporation,

Plaintiff-Appellee,

v.

James J. Prrz and Norma J. FLEMING, in their official capacities;

DEPARTMENT OF TRANSPORTATION OF THE STATE OF MICHIGAN,

Defendants-Appellants (88-1642),

THE UNITED TRANSPORTATION UNION,

Intervening Defendant-

Appellant (88-1629).

Before: MERRITT and BOGGS, Circuit Judges; and CONTIE,

Senior Circuit Judge.

JUDGMENT

ON APPEAL from the United States District Court for the

Western District of Michigan.

THIS CAUSE came on to be heard on the record from the

said district court and was argued by counsel.

ON CONSIDERATION WHEREOF, It is now here or-

dered and adjudged by this court that the judgment of the

said district court in this case be and the same is hereby

vacated and the case is remanded with instructions to

dismiss.

A-2

IT IS FURTHER ORDERED that Appellants recover

from Plaintiff-Appellee the costs on appeal, as itemized

below, and that execution therefor issue out of said district

court, if necessary.

ENTERED BY ORDER OF

THE COURT

Leonard Green, Clerk

/s/ LEONARD GREEN

Clerk

A True Copy.

Attest:

/s/ (Tom BENNIGNUS

Deputy Clerk

Issued as Mandate: October 12, 1989

COSTS: APPELLANT TO RECOVER

Filing Fee........... $

PUNE on csccssoseess $176.00

ee renniaasees $

APPENDIX B

BEST AVAILABLE COPY

.

Br

-

hi

v

B-]

Nos. 88-1629; 88-1642

United States Court of Apprals

For Turk Sixtn Circuit

CSXT, Inc..a Virginia corporation, 4

Piaintiff-Appellee,

Vv.

James J. Prrz. Director of the Depart-

ment of Transportation of the State

of Michigan, Norma J. FLeminc. Ad- | Ox appear from the

ministrator of the Railroad Safety United Stat Dis.

and Tariffs Division of the Depart- parang? Pret rll “

ment of Transportation of the State f Westere Distelet of

of Michigan, and the DrrartTMENT Mickinan

OF TRANSPORTATION OF THE STATE OF a

MICHIGAN.

Defendants-Appellants (88-1642),

and

THE UNITED TRANSPORTATION UNION.

Intervening

Defendant-Appellant (88-1629). J

Decided and Filed August 22, 1989

Before: MERRITT and BOGGS, Circuit Judges; and

CONTIE, Senior Circuit Judge.

MERRITT. Circuit Judge. The defendants, James J. Pitz,

Norma J. Fleming and Michigan Department of Transporta-

tion, and the intervening defendant, United Transportation

Union. appeal on abstention grounds a District Court injunc-

tion restraining the Department from enforcing any state

administrative action or rule requiring toilets in railroad

locomotives. The injunction was issued on grounds that

such a Michigan rule would be preempted by the Locomotive

B-2

Boiler Inspection Act, 45 U.S.C. §§ 22-43 (1976) and the

Federal Railroad Safety Act of 1970, 45 U.S.C. §§ 421-44

(1976). The District Court held that the preemption doc-

trine prohibits the state agency from conducting the contem-

plated proceeding.’ The central problem raised by the

appeal is whether abstention is appropriate in preemption

cases. We conclude under the circumstances of this case

that abstention is appropriate; and we, therefore, reverse

the order of the District Court. CSXT, Inc. vc. Pitz, 699

F.Supp. 127 (W.D. Mich. 1988).

I.

The facts are not in dispute. The plaintiff, CSXT. is an

interstate railroad system operating in Michigan. About

one-third of CSXT’s locomotives are not equipped with

toilets. The defendant, Michigan Department of Transporta-

tion, has a general rule requiring that all railroads have

“adequate toilet facilities” for the health of their emplovees.

Mich. Adm. Code Rule 460.1473(a).°

The intervening defendant-appellant, United Transporta-

tion Union, is an international union representing CSXT

train crews working in Michigan. After receiving reports

that crew members were being asked to work on CSXT

locomotives that did not provide toilet facilities, the Union

' The language of the District Court's injunction is as follows:

In accordance with the accompanying opinion, this Court

grants plaintiff’ s motion for summary judgment. declares that

the LBIA and the FRSA each preempts Rule 460.1-473(a),

insofar as it is construed to require commodes on locomotives

operating in Michigan, and enjoins MDOT from so construing

and enforcing the rule.

° Rule 460.1473(a) provides in pertinent part:

Adequate toilet facilities shall be made available for train-

men, enginemen and vardmen, after hearing thereon and

order of the commission, which toilet facilities shall be kept

in a reasonably clean and sanitary condition.

B-3

filed a complaint with the Michigan Department of Trans-

portation. The complaint charged CSXT with violating the

Michigan rule requiring railroads to have “adequate toilet

facilities.” .

The agency scheduled a hearing before an administrative

law judge after CSXT had filed a motion to stay the adminis-

trative proceedings. CSXT then filed a suit for injunctive

and declaratory relief in federal court. After a hearing, the

ALJ denied CSXT’s motion for stay. She stated that she

doubted that the agency had the authority to entertain the

constitutional claims but cited Michigan authority holding

that although Michigan administrative agencies ordinarily

do not entertain constitutional claims, such claims may be

raised in court on review of the agency's decision. Joint

Appendix at 107. Additionally, the ALJ said that the sanitary

regulations at issue were well within the police powers of

the state. She refused to hold that the federal statutes relied

upon by CSXT were intended “to prohibit state regulation

in an area so hasic to public health.” Id. at 108.

The federal District Court granted the Union's motion to

intervene on February 4, 1988, and on the same date entered

a preliminary injunction restraining the state agency from

enforcing its rule and restraining the agency from conducting

the scheduled administrative proceedings until the District

Court ruled on CSXT’s motion for summary judgment. On

February 1(‘, 1988, the Union filed a motion to abstain. The

District Court did not expressly consider or rule on the

Union’s abstention motion. The court found the state rule

as applied to locomotives to be preempted by federal law

and, therefore. without oral argument granted CSXT’s sum-

mary judgment motion and issued a permanent injunction.

This appeal requires us to answer two questions. First,

does the fact that this case raises preemption rather than

other types of constitutional issues require us to modify the

classic abstention analysis? And second, once the proper

B-4

mode of analysis is determined, does it require abstention

in this case?

Il.

The first question presented is whether the fact that this

case is a preemption case, rather than another type of federal

question case, should alter the way in which we view the

abstention question. We conclude that it should not.

Two federal statutes are claimed to preempt the Michigan

regulation. The Federal Boiler Inspection Act, 45 U.S.C.

§§ 22-43 (1976), first adopted in 1911, lists certain equip-

ment required for locomotives and railroad cars. Enforce-

ment of the act is by civil penalty (“not less than $250

and not more than $2500”) assessed by the Secretary of

Transporation, which may be collected by suit in federal

court. Id. at §34. The Act does not prohibit concurrent

state regulation or purport to ‘occupy the field of railroad

negotiation. The Railroad Safety Act, 45 U.S.C. §§ 421-44

(1976), adopted in 1970, is broader. It allows the Secretary

to “prescribe . . . appropriate rules . . . for all areas of railroad

safety,” including rules concerning equipment and operating

procednres. Id. at § 431(a). The Act allows limited concur-

rent state regulation.» The Act also provides for a similar

but more elaborate system of enforcement through the

> The Act states:

The Congress declares that laws... relating to railroad

safety shall be nationally uniform to the extent practicable. A

State may adopt or continue in force any law. .. relating to

railroad safety until such time as the Secretary has adopted a

rule... covering the subject matter of such State requirement.

A State may adopt or continue in force an additional or more

stringent law ... relating to railroad safety wher necessary to

eliminate or reduce an essentially local safety hazard, and

when not incompatible with any Federal law ...and when

not creating an undue burden on interstate commerce.

45 U.S.C. § 434 (1976)(emphasis added).

B-5

assessment and collection of civil penalties. Id. at § 436.

The Secretary has not prescribed rules directly governing

locomotive toilets, but CSXT argues that the Secretary has

adopted general rules “covering the subject matter” and,

therefore, has preempted Michigan law.

The Supreme Court in New Orleans Public Service, Inc. tv.

Council of City of New Orleans, U.S. , 109 S.Ct.

2506 (1989) (holding federal abstention not appropriate in

favor of state administrative proceedings which are legisla-

tive in character), reversing 798 F.2d 858 (5th Cir. 1986),

has recently rejected the argument that the presence of a

preemption question bars a court from applying Younger

abstention. The Court rejected NOPSI’s contention that a

district court presented with a preemption-based request

for equitable relief was a priori divested of its power to

abstain.’

The recent ruling in NOPSI casts doubt on the holding of

the Eighth Circuit in Middle South Energy, Inc. v. Arkansas

Public Service Comm’n, 772 F.2d 404, 417 (8th Cir. 1985).

There the Eighth Circuit declined to abstain in a nuclear

power case in which it found that the Arkansas Public Service

Commission was interfering with the jurisdiction of the

Federal Energy Regulatory Commission. The state agency

threatened to hold illegal certain purchase contracts be-

tween a large, multi-state, electric utility and its Arkansas

subsidiary. The Arkansas agency apparently wanted to deter

the state subsidiary from taking nuclear power from the

parent, and the court suggested that such a state decision

would have a serious effect on the parent's construction of

+[O]ne of the issues in the present case is whether the

principle of Younger can properly be extended to this type of

suit. NOPSI argues that Younger does not require abstention

in the face of a substantial claim that the challenged state

action is completely pre-empted by federal law.... We

disagree.

NOPSI, 109 S.Ct. at 2516.

B-6

a multi-billion dollar nuclear power plant. The basis of the

Court's abstention ruling is not entirely clear, but it appears

that the Court declined to abstain because it considered

federal regulatory jurisdiction over the power contracts in

question to be exclusively vested in the federal power

agency. The Eighth Circuit did not discuss whether it

considered the federal court's jurisdiction over the preemp-

tion issue to be exclusive or concurrent with the state court's.

The abstention issue in preemption cases should not turn

on a determination concerning the location of exclusive

regulatory jurisdiction in a federal or state agency. The

state-federal regulatory jurisdictional issue usually turns, in

one form or another, on whether the activity in question is

characterized as intrastate or interstate. See, e.g., Federal

Power Act, 16 U.S.C. § 824(b)(1)(1976)(distinction stated

as “transmission of electrical energy in interstate commerce”

or “the sale of electrical energy at wholesale” versus “local

distribution” or “the transmission of eletrical energy in

intrastate commerce”). Under such statutes, the regulatory

jurisdiction is exclusively state if the activity is intrastate,

and exclusively federal if interstate. Such determinations of

regulatory jurisdiction are often highly fact-specific and

address themselves in the first instance to the expertise of the

administrative agencies charged with economic regulation of

the particular industry. In such cases both Congress and the

state legislature have delegated frontline authority to find

facts and devise economic regulations to administrative

bodies with specialized knowledge of the industries to be

regulated. Ordinarily, it is not prudent for courts to interfere

in the regulatory process before the facts are sorted out and

the regulatory rule is defined and applied.

In the present case there is no grant of exciusive jurisdic-

tion to federal courts to resolve federal railroad safety ques-

tions or preemption claims in this area of the law. State

courts do not lack jurisdiction over railroad safety issues or

preemption claims. State courts normally have concurrent

B-7

jurisdiction of federal issues unless such jurisdiction is with-

drawn by federal statute. Gulf Offshore Co. v. Mobil Oil

Corp., 453 U.S. 473, 478-79 (1981); Chivas Products Ltd.

c. Owen, 864 F.2d 1280, 1282-86 (6th Cir. 1988).

Other policies support our holding that abstention cases

involving preemption should not be treated differently than

other abstention cases. We reject the oft-repeated assertion

that the federal courts have “unique expertise” in adjudicat-

ing preemption claims because they are “comparatively

more skilled at interpreting and applying federal law and

are much more likely to correctly ascertain congressional

intent.” Note, The Preemption Dimension of Abstention, 89

Colum.L.Rev. 310, 322-23 (1989). State judges are not

inferior to federal judges. They have the ability to interpret

federal statutes, however complex. Though preemption is

a constitutional issue, it is not of a differrent order of

magnitude than due process, first amendment and other

constitutional issues which often arise during the course of

a state or federal administrative and judicial proceeding. To

hold that a state court mav decide federal constitutional

issues generally but should not decide preemption issues

makes little sense.

State courts frequently decide such issues. It may be

argued that state judges are somewhat more inclined to

read state regulatory jurisdiction more broadly than federal

judges. Compare Michigan Gas Storage Co. vc. Michigan

Public Service Comm’n, 405 Mich. 376, 275 N.W.2d 457

(1979), in which the Michigan Supreme Court, after exten-

sive analysis of the federal Natural Gas Act, concluded that

the Act does not preempt state regulation of the securities

of gas companies, with ANR Pipeline Co. v. Schneidewind,

801 F.2d 228 (6th Cir. 1986), aff'd, 108 S. Ct. 1145 (1988),

reaching the opposite result. But see Natural Gas Pipeline

Co. t. Illinois Commerce Comm'n, 33 Iil.2d 214, 210 N.E.2d

490 (1965), in which the Illinois Supreme Court held Illinois

regulation of natural gas securities preempted by the Natural

B-8

Gas Act. Even if it were true that state judges were less

inclined to displace state regulatory jurisdiction than federal

judges, this tendency is not a sufficient reason to modify the

doctrine of abstention by substituting federal for state judges

in cases raising preemption issues.

The Tennessee Court of Appeals recently decided a pre-

emption issue under the Federal Railroad Safety Act similar

to the one raised in the present case. The issue was whether

the federal Act preempts state administrative proceedings

enforcing a requirement concerning the construction of

“walkways” in railroad switching yards. Judge Cantrell, after

extensive analysis of the issue, concluded that Tennessee's

walkways rule was not covered by a federal rule on the same

subject matter and, therefore, was not preempted. Illinois

Central Gulf Ry. Co. c. Tennessee Public Service Comm'n,

736 §$.W.2d 112, 115 (Tenn.App. 1987).

In fact, state courts are often in a better position to decide

preemption issues because they would do so on review of

an administrative decision finding the facts. The threshold

determination of whether jurisdiction over an activity is

exclusively federal or state or is concurrent is often highly

fact-specific and often requires the specialized knowledge

of the state administrative agency to which regulation of the

activity has been delegated.

Moreover, even if we accepted the proposition that some

state courts lacked the necessary expertise, the resulting

harm—that a case could be decided incorrectly by a state

court and be denied certiorari by the United States Supreme

Court so that federal-court review of the incorrectly decided

constitutional claim was precluded—is no greater than it is

when a federal court incorrectly decides a case, and the

United States Supreme Court declines review. If the federal

decision to abstain and the state decision to assert jurisdiction

were inappropriate, it may be that the doctrine of res

judicata should not apply in full force to the state court

B-9

judgment. See Key v. Wise, 454 U.S. 1103 (1981)(Brennan,

].. dissenting from denial of certiorari).

-In summary, we do not see any reason to analyze absten-

tion cases involving a preemption claim differently than

other abstention cases. In particular, we do not agree that

the decisive abstention question in preemption cases arising

from pending state administrative proceedings is whether

the regulatory authority over the particular activity in ques-

tion is exclusively federal or exclusively state. A federal

court need ask itself only two questions: whether the state

court has concurrent judicial jurisdiction to decide the

preemption question, and, if the answer to that question is

“Yes,” whether a federal court should abstain in favor of

ongoing state proceedings originating in the state regulatory

agency. There is no question in the present case that

concurrent judicial jurisdiction exists. We, therefore, pro-

ceed to inquire whether abstention is appropriate.

Ill.

Abstention pursuant to the judicially-crafted rule an-

nounced in Younger tc. Harris, 401 U.S. 37 (1971), is appro-

priate only where a court can answer all three of the follow-

ing questions in the affirmative:

|Flirst, do [the relevant state proceedings] . . . constitute

an ongoing state judicial proceeding; second, do the

proceedin s implicate important state interests; and

third, is there an adequate opportunity in the state

proceedings to raise constitutional challenges.

Middlesex County Ethics Comm. v. Garden State Bar Ass'n,

457 U.S. 423, 432 (1982). In the present case we answer

affirmatively all three questions.

Is the administrative proceeding here an “ongoing state

judicial proceeding?” Middlesex, 457 U.S. at 432. Under

the Supreme Court's recent analysis is NOPSI, it clearly is.

There the Court explained that an agency's proceeding will

B-10

be characterized as judicial or legislative depending on the

“nature of the final act” which it is designed to produce.

NOPSI, 109 S.Ct. at 2519 (quoting Prentis v. Atlantic Coast

Line Co., 211 U.S. 210, 226-27 (1908)(Holmes, J.)). Where

the proceeding “investigates, declares and enforces liabil-

ities as they stand on present and past facts and under laws

supposed already to exist,” it is judicial. Id. at 2520 (quoting

Prentis, 211 U.S. at 226). We are faced with an administra-

tive proceeding before the Michigan Department of Trans-

portation in which the interpretation and application of a

state rule requiring “adequate toilet facilities” are in ques-

tion and in which the final result will be a determination

whether CSXT is liable for a violation of this established

rule. There is, thus, an ongoing state proceeding that is

judicial in nature, and we must acknowledge that it impli-

cates all the comity concerns that motivate the Younger

doctrine.

The third requirement—of an “adequate opportunity” to

raise the issue—is also met, even though the state adminis-

trative agency may have no power to hear CSXT’s constitu-

tional claim, because Michigan law supplies full judicial

review of this agency proceeding. The Michigan Administra-

tive Procedures Act, Mich. Comp. Laws § 24.301, provides

for review of such proceedings, and the Michigan courts will

entertain the federal question on review. See Michigan Gas

Storage Co., supra (reviewing preemption issues); Blue Cross

and Blue Shield of Michigan tv. Baerwaldt, 726 F.2d 296,

300 (6th Cir. 1984).

Our analysis of this question has been decisively settled

by decisions of the Supreme Court and this Court. In Watts

v. Burkhart, 854 F.2d 839 (6th Cir. 1988), our Court traced

the development of the doctrine of abstention as it applies

to pending state administrative proceedings. In Watts, a

doctor faced a license suspension proceeding before the

Tennessee Board of Medical Examiners, a proceeding in

which his federal constitutional claims could first be adjudi-

B-11

cated only by a state court in review of the decision of the

Board. Judge Contie, writing for our Court, concluded that

Supreme Court's decision in Ohio Civil Rights Comm'n t.

Dayton Christian Schools, Inc., 477 U.S. 619 (1986), governs

the question:

Watts contends that he will not be permitted to assert

his constitutional claims in the administrative proceedings

before the Board. This contention is supported by the

record, which shows that after Watts asserts his constitu-

tional claims as affirmative defenses to the Division's

motion to summarily suspend his license, the Division

successfully brought a motion to strike those defenses on

the ground that they were not within the scope of review

of proceedings before the Board of Medical Examiners.

This fact alone does not, however, establish that Watts will

be deprived of an opportunity to present his constitutional

claims. In Dayton Christian Schools, the Supreme Court

stated that “it is sufficient... that constitutional claims

may be raised in state court judicial review of the adminis-

trative proceeding.”

Watts, 854 F.2d at 848. The Full quotation from the Dayton

Christian Schools case is as follows:

In any event, it is sufficient . . . that constitutional claims

may be raised in state-court judicial review of the

administrative proceeding. Section 4112.06 of Ohio

Rev. Code Ann. (1980) provides that any “respondent

claiming to be aggrieved by a final order of the commis-

sion ...may obtain judicial review thereof.” Dayton

cites us to no Ohio authority indicating that this provi-

sion does not authorize judicial review of claims that

agency action violates the United States Constitution.

477 U.S. at 619.

Finally, we do not agree that the state proceedings which

CSXT seeks to have enjoined do not implicate vital state

interests. The unsanitary disposal of human waste creates a

risk of pollution and disease: preventing such risks is one of

B-12

the preeminent functions of the state’s police power to

protect the health and safety of its residents. A finding of

preemption will bar the enforcement of a state law, but it is

not a finding that the state has no important interest. Rather

it is finding that the federal interest is more important or

more vital than the state interest, so that the supremacy

clause requires that the federal interest prevail.

The case before us thus involves an ongoing state adminis-

trative proceeding that is judicial in nature; it involves a state

administrative proceeding from which CSXT may appeal to

Michigan state courts to obtain a ruling on its constitutional

claim, and it arises in an area in which Michigan has a vitul

state interest. Every element of abstention is present.

IV.

For all the foregoing reasons, we conclude that the District

Court should have abstained. Our holding should not be

read as applying a hard and fast rule of abstention in all

state administrative matters involving preemption, for as

Professor Shapiro has aptly warned:

The complexity of our federal system—the tension

between notions of separateness and interdependence,

between the existence and the limits of federal suprem-

acy—makes it impossible to frame a simple rule that

will resolve every case. Sometimes these tensions cut

in favor of federal action. At other times, they counsel

reluctance to pull apart federal and state issues that are

not easily separated; to disrupt ongoing state proceed-

ings unless the very prosecution of those proceedings,

regardless of their outcome, threatens impairment of

federal rights; to take over the management of state

institutions; or to assume the inability of state courts to

recognize and enforce federal rights.

Shapiro, Jurisdiction and Discretion, 60 N.Y.U.L. Rev. 543,

583 (1985). We find no considerations in this case, however,

which would counsel the federal courts to interfere with

the ongoing railroad safety proceeding in the Michigan

Department of Transportation. Accordingly, the judgment

of the District Court is vacated and the case remanded with

instructions to dismiss.

APPENDIX C

C-1

No. §§-1629

United States Court of Appeals

For THE SLxTH CIRCUIT

CSXT, INC., a Virginia corporation, >

Plaintiff-Appellee,

Ve

JaMEs J. Pitz, Director of the Depart-

ment of Transportation of the State

of Michigan, et al.,

> ane

ORDER

Defendants,

UNITED TRANSPORTATION UNION,

Defendant-Appellant :

Before: MERRITT, Chief Judge, BOGGS, Circuit Judge,

and CONTIE, Senior Circuit Judge

The Court having received a petition for rehearing en

banc, and the petition having been circulated not only to

the original panel members but also to all other active judges

of this Court, and no judge of this Court having requested

a vote on the suggestion for rehearing en banc, the petition

for rehearing has been referred to the original hearing panel.

The panel has further reviewed the petition for rehearing

and concludes that the issues raised in the petition were

fully considered upon the original submission and decision

of the case. Accordingly, the petition is denied.

ENTERED BY ORDER OF

THE COURT

/s/ LEONARD GREEN

Leonard Green, Clerk

APPENDIX D

" BEST AVAILABLE COPY ¥

CXST, INC., a Virginia

Corporation, Plaintiff,

— Vv.

James J. PITZ, Director of the Department of Transportation

of the State of Michigan, Norma J. Fleming, Administrator

of the Railroad Safety and Tariffs Division of the Depart-

ment of Transportation of the State of Michigan, and the

Department of Transportation of the State of Michigan,

Defendants,

and

The United Transportation Union,

Intervening Defendant.

No. L 88-17 CA 5.

United States District Court,

W.D. Michigan, S.D.

May 13, 1988.

Railway company operating in both Canada and United

States sought declaratory judgment that state rule requiring

locomotives operating within state to have commodes in

them was preempted by federal law. The District Court,

Robert Holmes Bell, J., held that both Federal Railroad

Safety Act and Locomotive Boiler Inspection Act completely

preempted state regulations dealing with locomotives, its

boiler, tender, and all parts and appurtenances including

state regulation requiring locomotives to have commodes.

Judgment for plaintiff.

D-2

Emplovers’ Liability Key 46

States Key 15.45

Both Federal Railroad Safety Act and Locomotive Boiler

Inspection Act completely preempted state regulation deal-

ing with a locomotive, its boiler, tender, and all parts and

appurtenances thereof, including state regulation requiring

locomotives to have commodes; state regulation was within

subject matter already contained within federal regulations.

Boiler Inspection Act, 45 U.S.C.A § 22 et seq.; Federal

Railroad Safety Act of 1970, § 101 et seq., 45 U.S.C.A. § 421

et seq.; U.S.C.A. Const. Art. 6, cl. 2

Patrick E. Hackett, Carol Hackett-Garagiola, Bloomfield

Hills, Mich., Sally J. Kircher, Jacksonville, Fla., for plaintiff.

Frank J. Kelley. Atty. Gen., State of Mich. by Susan Peck

lannotti, William Reid Ralls, Lansing, Mich., for defendants.

OPINION

ROBERT HOLMES BELL, District Judge.

Before this Court is plaintiff's motion for summary judg-

ment on its complaint. In its complaint plaintiff seeks

a judgment declaring that the Michigan Department of

Transportation (MDOT) Rule 460.1473(a) is preempted by

the Locomotive Boiler Inspection Act (LBIA), 45

U.S.C. § 22 et seq., and the Federal Railroad Safety Act

(FRSA), 45 U.S.C. § 421 et seq. and an injunction prohibiting

defendant MDOT from enforcing Rule 460.1473(a) against

CSXT.

BACKGROUND

CSXT is a railway company operating in Canada and

twenty states including Michigan. United Transportation

Union (UTU). intervening defendant, represents railroad

workers and complained to MDOT that CSXT violated Rule

D-3

460.1473(a) by failing to provide commodes on locomotives

operating in Michigan. MDOT scheduled a hearing on the

complaint before an administrative law judge for February

10, 1988. On January 23, 1988, CSXT filed this lawsuit for

declaratory and injunctive relief. On january 27, 1988, an

MDOT administrative law judge denied CSXT’s motion to

stay state administrative proceedings pending this Court's

determination of CSXT’s claims that Rule 460.1473(a) was

preempted. On February 8, 1988, this Court granted

CSXT’s motion for a preliminary injunction restraining de-

fendants from enforcing Rule 460.1473(a) until August 4,

1988, or until this Court's ruling on CSXT’s motion for

summary judgment.

Of CSXT’s 3,000 locomotives approximately 1,000 do not

have commodes. Some unequipped locomotives operate in

Michigan. However, CSXT indicates that it plans to equip

all of its locomotives with commodes within three vears.

The disputed rule textually requires “adequate toilet facili-

ties.” but does not specifically require equipping each loco-

motive with an individual commode. Nevertheless, MDOT

has argued its position assuming that enforcement of Rule

460.1473(a) would require equipping locomotives with

commodes. The administrative law judge's analysis pre-

sumes the same. Although UTU does not concur with MDOT

that the rule requires a commode on every locomotive, for

purposes of its preemption analysis this Court assumes that

application of the rule would require installation of a com-

mode on each CSXT locomotive operating in Michigan. Rule

460.1473(a) provides:

Running Facilities

Rule 3. (1) Adequate toilet facilities shall be made avail-

able for trainmen, enginemen and yardmen, after hearing

thereon and order by the commission, which toilet facili-

ties shall be kept in reasonably clean and sanitary

condition.

D-4

ANALYSIS

The issue before this Court is whether Rule 460.1 473(a)

is preempted by the Boiler Inspection Act (LBIA), 45 U.S.C.

§ 22 et seq., and the Federal Railroad Safety Act (FRSA), 45

U.S.C. § 421 et seq.

The doctrine of preemption is based upon the supremacy

clause of the Constitution, art. VI, cl. 2, which mandates

that federal law overrides any conflicting state regulation.

Moreover, when exercising one of its plenary powers, Con-

gress can occupy an entire regulable field with federal

law and effectively prohibit any parallel state legislation.

Missouri-Pacific Railroad Company t. Porter, 273 U.S. 341,

47 S.Ct. 383, 71 L.Ed. 672 (1927). Congress can clearly

manifest its intention to preempt state law by explicitly

stating its intent to totally occupy a field. Or in lieu of

any clear manifestation courts will discern the clarity of

Congress’ intent to preempt state regulation by the perva-

siveness of the federal regulatory scheme, the need for

national uniformity, or the potential for conflict between

‘administering federal and state programs. Florida Lime and

Avacado Growers, Inc. c. Paul, 373 U.S. 132, 83 $.Ct. 1210,

10 L.Ed.2d 248 (1963), Pennsylvania v. Nelson, 350 U.S.

497, 76 S.Ct. 477, 100 L.Ed. 640 (1956).

Locomotive Boiler Inspection Act

CSXT argues that the LBIA preempts Rule 460.1473(a)

because in the LBIA Congress intended to occupy the entire

field of locomotive equipment regulation as determined by

the Supreme Court in Napier v. Atlantic Coast Line Railroad,

272 U.S. 605, 47 S.Ct. 207, 71 L.Ed. 432 (1926). Defen-

dants and amicus respond that Napier is no longer good law

because the FRSA has impliedly superseded the LBIA.

The LBIA, 45 U.S.C. § 23, provides:

It shall be unlawful for any carrier to use or permit to

be used on its line any locomotive unless said locomotive,

— << i ”

D-5

its boiler, tender, and all parts and appurtenances thereof

are in proper condition and safe to operate in the service

to which the same are put, that the same may be employed

in the active service of such carrier without unnecessary

peril to life or limb, and unless said locomotive, its boiler,

tender, and all parts and appurtenances thereof have

been inspected from time to time in accordance with the

provisions of sections 22 to 29 and 31 to 34 of this

title and are able to withstand such test or tests as may

prescribed in the rules and regulations hereinafter pro-

vided for.

In Napier the Court held that LBIA preempted a Georgia

state statute requiring automatic doors on locomotive fire-

boxes and a Wisconsin statute requiring locomotive cab

curtains. The Court recognized that the LBIA comprehen-

sively empowered the Interstate Commerce Commission

|jauthority now resident with the Secretary of Transportation

and the Federal Railroad Administration, 49 U.S.C.App.

§§ 103 and 1655(e)(1)(E)] to promulgate regulations regard-

ing material, construction, and design of locomotives and all

their appurtenances in order to enforce compliance with the

LBIA. Napier, at 609, 47 S.Ct. at 208. The Court also noted

that no federal regulation existed as to the specific items,

fire-box doors and cab curtains, that the state regulation

required. However, the Court determined that Congress

intended the LBIA to occupy the entire field of locomotive

equipment and consequently the LBIA preempted the state

legislation, Napier, at 612-613, 47 S.Ct. at 209-10.

Even though Napier was decided in 1926, contemporary

federal courts continue to accept it as binding precedent

recognizing that Congress intended that the LBIA would

occupy totally the field of locomotive equipment and pre-

empt any state regulation of it. Further, this Court is

unaware of any federal court authority overruling Napier.

Marshall c. Burlington Northern, Inc., 720 F.2d 1149 (9th

Cir.1983), Missouri Pacific Railroad Co. v. Railroad Commis-

D-6

sion of Texas, 833 F.2d 570 (5th Cir.1987), Consolidated

Rail Corp. cv. Pennsylvania Public Utility, 536 F.Supp. 653

(E.D.Pa.1982), affd mem., 696 F.2d 981 (3rd Cir.1982),

aff'd mem., 461 U.S. 912, 103 S.Ct. 1888, 77 L.Ed.2d 280

(1983). Moreover, the various authorities proffered by

defendants are neither binding precedent on this Court nor

reasonably persuasive.

This Court is similarly convinced that in the LBIA Con-

gress clearly manifested its intent to fully occupy the field

of locomotive equipment regulation by employing language

providing for “rules and regulations” covering a “locomotive,

its boiler, tender, and all parts and appurtenances thereof.”

Defendants contend that the FRSA, passed subsequently

to the LBIA, indicates an unambiguous change in Congress’

alleged intent to occupy the field of locomotive equipment

regulation. Defendants refer to the legislative history of the

FRSA identifying its primary purpose to “promote safety in

all areas of railroad operations” and calling “for broadscale

Federal legislation with provisions for active State participa-

tion to assure a much higher degree of railroad safety in the

vears ahead.” H.R.Rep. No. 1194, 91st Cong., 2d Sess. 19-

20 (1970), reprinted in 1970 U.S.Code Cong. & Admin.News

4104-4105. (Report 1194, with cites to USSCAN).

CSXT, however, notes that Report 1194, at 4113-4114,

underscores the continuing effect of existing federal railroad

safety law when commenting on § 202 of the FRSA:

The committee added the words “supplementing provi-

sions of law and regulations in effect on the date of

enactment of this title” to the Secretary's rulemaking

authority to make clear that this grant of jurisdiction does

not replace the existing rail safety statutes and implemen-

ting regulations transferred to the Department of

Transportation. ... It is the committee's intent that those

existing statutes will continue to be enforced and adminis-

tered by the Department in their respective area and that

D-7

the new authority will be implemented with respect to

those areas of rail safety not now subject to Federal

jurisdiction. In other words, it is the intent of the commit-

tee that the existing statutes continue to be administered

and enforced as if this legislation had not been enacted.

Since the LBIA was in effect on the date of the FRSA’s

enactment, this legislative history indicates that Congress

did not intend that the FRSA would supersede the LBIA.

This Court acknowledges that in the LBIA Congress in-

tended to occupy the field of locomotive equipment regula-

tion, as recognized in Napier, and determines that the FRSA

did not impliedly modify the LBIA. Consequently, this

Court determines that the LBIA preempts Rule 460.1473(a)

insofar as it may be construed to require commodes on

locomotives operating in Michigan.

Federal Railroad Safety Act

CSXT claims that the FRSA preempts Rule 460.1473(a)

because the rule attempts to regulate the same subject

matter as the FRSA, does not qualify under the FRSA’s

provision for limited state regulation. Defendants and

amicus argue that the FRSA specifically provides for state

regulation such as Rule 460.1472(a).

The FRSA, § 205, 45 U.S.C. § 434, provides:

The Congress declares that laws, rules. regulations,

orders. and standards relating to railroad safety shall be

nationally uniform to the extent practicable. A State may

adopt or continue in force any law, rule, regulation, order,

or standard relating to railroad safety until such time as

the Secretary has adopted a rule, regulation, order, or

standard covering the subject matter of such State require-

ment. A State may adopt or continue in force an additional

or more stringent law, rule, regulation, order, or standard

relating to railroad safety when necessary to eliminate or

reduce an essentially local safety hazard, and when not

D-5

incompatible with any Federal law, rule, regulation, order,

or standard, and when not creating an undue burden on

interstate commerce.

This Court recognizes that Congress prefaces this section

with its policy declaration that railroad safety laws “shall be

nationally uniform to the extent practicable.” This Court

further notes that Congress provides for individual state

regulations relating to railroad safety until a federal regula-

tion is promulgated covering the “subject matter” of the

state regulation. CSXT asserts that “subject matter” should

be construed as regulable categories, such as, locomotive

equipment. Defendants and amicus maintain that “subject

matter” should be narrowly construed to mean particular

and specific items, such as, sanitary facilities on locomotives.

The pivotal issue is the scope of the phrase “subject matter.”

This Court acknowledges Congress’ explicit statement

that railroad safety laws should be as nationally uniform as

practicable. This reasonably suggests that the “subject

matter” under state regulation should be circumscribed and

distinct from the “subject matter” under federal regulation.

Nevertheless, Congress does provide for additional or more

stringent state regulation of a federally regulated “subject

matter” in order to eliminate or reduce an “essentially local

safety hazard.” But that is not the present case as the parties

themselves recognize.

Congress’ mandate of national uniformity also logically

implies a broad construction of the term “subject matter” as

a category, class, or group, rather than a specific, particular,

or individual item. If “subject matter” were construed

narrowly as item specific, then states would be free to

interstitially impose a myriad of gap filling safety regulations

in areas where Congress may have regulated comprehen-

sively, although not exhaustively. This approach would

promote piecemeal, ad hoc, and fragmentary regulation,

and, thereby, effectively destroy national uniformity.

D-9

This Court acknowledges and endorses the rationale of

Norfolk and Western Ry. Co. ct. Burns, 587 F.Supp. 161

-(E.D.Mich. 1984). In Burns the court determined that

the FRSA preempted state regulation of railroad walkways

because walkways comprised an unspecified part of the

general track structure, which was a federally regulated

“subject matter.” The Burns court recognized the potential

“subject matter” conflict arising from Congress’ intent to

provide uniform railway safety regulations and the states’

limited right to regulate for safety:

—

To the degree that this pronouncement suggests federal

preemption, it is equally important to note that the matter

of permissible state regulation is specifically addressed.

First, it is clear that there can be no preemption unless

the Secretary has actually adopted a railroad safety stan-

dard. That does not necessarily mean that the standard

adopted must detail every conceivable item that might be

contemplated thereby; but, at least, there has to be some

action generally indicating that the Secretary is acting

pursuant to the powers vested in him by Congress. (em-

phasis added)

Burns, at 164.

In the instant case, federal regulations exist comprehen-

sively governing locomotive design and equipment. Railroad

locomotive safety standards are extensively specified in 49

C.F.R. §§ 229.1-229.141 (1987) detailing numerous individ-

ual items of locomotive equipment. This Court recognizes

the expansive range and comprehensive scope of these safety

standards for locomotive design and equipment. This Court

also acknowledges that locomotive commodes do not appear

as specific regulated items. Nevertheless, this Court deter-

mines that the phrase. “subject matter,” is most reasonably

construed broadly as a category, group, or class because of

the comprehensive scope and character of existing federal

locomotive safety regulations. Even though these compre-

hensive federal regulations do not exhaustively “detail every

D-10

conceivable item that might be contemplated,” they, in fact,

define a category of “subject matter” by their scope and

range of which this Court determines that locomotive com-

modes are part and parcel. Therefore, the existing compre-

hensive federal regulation of locomotive equipment, which

this Court recognizes as constituting a category, class, group,

or field of “subject matter” under the FRSA, § 205, preempts

state regulation requiring locomotive commodes.

CONCLUSION

Accordingly, this Court determines that the LBIA and

the FRSA each preempt Rule 460.1473(a) insofar as it is

construed to require commodes on locomotives operating

in Michigan.

<=

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BEST AVAIL

E-]

E. RELEVANT SECTIONS

MICHIGAN ADMINISTRATIVE PROCEDURES ACT

CHAPTER 4. PROCEDURES IN CONTESTED CASES

24.271 Parties in contested case; time and notice of hearing; ser-

vice of notice or other process on legislator.

Sec.71.(1) The parties in a contested case shall be given an op-

portunity for a hearing without undue delay.

(2) The parties shall be given a reasonable notice of the hear-

ing, which notice shall include:

(a) A statement of the date, hour, place, and nature of the

hearing. Unless otherwise specified in the notice the hearing shall

be held at the principal office of the agency.

(b) A statement of the legal authority and jurisdiction under

which the hearing is to be held.

(c) A reference to the particular sections of the statutes and

rules involved.

(d) A short and plain statement of the matters asserted. If the

agency or other party is unable to state the matters in detail at the

time the notice is given, the initial notice may state the issues in-

volved. Thereafter on application the agency or other party shall

furnish a more definite and detailed statement on the issues.

* * *

24.272 Defaults; written answers; evidence; arguments;

cross-examination.

Sec. 72. (1) lf a party fails to appear in a contested case after pro-

per service of notice, the agency, if no adjournment is granted, may

proceed with the hearing and make its decision in the absence of

the party.

(2) A party who has been served with a notice of hearing may

file a written answer before the date set for hearing.

(3) The parties shall be given an opportunity to present oral and

written arguments on issues of law and policy and an opportunity

to present evidence and argument on issues of fact.

(4) A party may cross-examine a witness, including the author

of a document prepared by, on behalf of, or for use of the agency

and offered in evidence. A party may submit rebuttal evidence.

History: 1969, Act 306, Eff. July 1, 1970.

E-2

24.273 Subpoenas; issuance; revocation.

Sec. 73. An agency authorized by statute to issue subpoenas, when

a written request is made by a party in a contested case, shall issue

subpoenas forthwith requiring the attendance and testimony of

witnesses and the production of evidence including books, records.

correspondence and documents in their possession or under their

control. On written request, the agency shall revoke a subpoena if

the evidence, the production of which is required, does not relate

to 4 matter in issue, or if the subpoena does not describe with suffi-

cient particularity the evidence the production of which is required.

or if for any other reason sufficient in law the subpoena is invalid.

Witness fees shall be paid to subpoenaed witnesses in accordance

with section 2552 of Act No. 236 of the Public Acts of 1961, as

amended, being section 600.2552 of the Compiled Laws of 1948.

In case of refusal to comply with a subpoena, the party on whose

behalf it was issued may file a petition. in the circuit court for Ing-

ham county or for the county in which the agency hearing is held.

for an order requiring compliance.

History: 1969, Act 306, Eff. July 1, 1970;-AM. 1970, Act 40,

Imd. Eff. July 1. 1970.

24.274 Oaths; depositions; disclosure of agency records.

Sec. 74.(1) An officer of an agency may administer an oath or

affirmation to a witness in a matter before the agency, certify to

official acts and take depositions. A deposition may be used in lieu

of other evidence when taken in compliance with the general court

rules. An agency authorized to adjudicate contested cases may adopt

rules providing for discovery and depositions to the extent and in

the manner appropriate to its proceedings.

(2) An agency that relies on a witness in a contested case, whether

or not an agency employee, who has made prior statements or reports

with respect to the subject matter of his testimony, shall make such

statements or reports available to opposing parties for use on cross-

examination. On a request for identifiable agency records, with

respect to disputed material facts involved in a contested case, ex-

cept records related solely to the internal procedures of the agency

or which are exempt from disclosure by law, an agency shall make

such records promptly available to a party.

History: 1969, Act 306, Eff. July 1, 1970.

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24.275 Evidence; admissibility, objections, submission in writ-

ten form.

Sec. 75. In a contested case the rules of evidence as applied in

a nonjury civil case in circuit court shall be followed as far as prac-

ticable, but an agency may admit and give probative effect to evidence

of a type commonly relied upon by reasonably prudent men in the

conduct of their affairs. Irrelevant, immaterial or unduly repetitious

evidence may be excluded. Effect shall be given to the rules of

privilege recognized by law. Objections to offers of evidence may

be made and shall be noted in the record. Subject to these re-

quirements, an agency, for the purpose of expediting hearings and

when the interests of the parties will not be substantially prejudiced

thereby, may provide in a contested case or by rule for submission

of all or part of the evidence in written form.

History: 1969. Act 306. Eff. July 1. 1970:-Am. 1970, Act 40.

Imd. Eff. July 1, 1970.

” *-_ *

24.276 Evidence to be entered on record; documentary evidence.

Sec. 76. Evidence in a contested case, including records and

documents in possession of an agency of which it desires to avail

itself, shall be offered and made a part of the record. Other factual

information or evidence shall not be considered in determination of

the case, except as permitted under section 77. Documentary evidence

may be received in the form of a copy or excerpt, if the original

is not readily available, or may be incorporated by reference. if the

matetials so incorporated are available for examination by the par-

ties. Upon timely request, a party shall be given an opportunity to

compare the copy with the original when available.

History: 1969, Act 306, Eff. July 1, 1970.

24.277 Official notice of facts; evaluation of evidence.

Sec. 77. An agency in a contested case may take official notice

of judicially cognizable facts, and may take notice of general,

technical or scientific facts within the agency's specialized

knowledge. The agency shall notify parties at the earliest practicable

time of any noticed fact which pertains to a material disputed issue

which is being adjudicated, and on timely request the parties shall

be given an opportunity before final decision to dispute the fact or

E-4

its materiality. An-ageney may use its experience. technical com-

petence and specialized knowledge in the evaluation of evidence

presented to it.

History: 1969, Act 306, Eff. July 1, 1970:-Am. 1970. Act 40.

Imd. Eff. July 1, 1970.

24.278 Stipulations; disposition of cases, methods.

Sec. 78.(1) The parties in a contested case by a stipulation in writing

filed with the agency may agree upon any fact involved in the con-

troversy. which stipulation shall be used as evidence at the hearing

and be binding on the parties thereto. Parties are requested to thus

agree upon facts when practicable.

(2) Except as otherwise provided by law. disposition may be made

of a contested case by stipulation, agreed settlement, consent order.

waiver, default or other method agreed upon by the parties.

History: 1969. Act 306, Eff. July 1. 1970:-Am. 1970. Act 40, Imd.

Eff. July 1.1970.

24.279 Presiding officers; designation; disqualification, inability.

Sec. 79. An agency, | or more members of the agency. a person

designated by statute dr t or more hearing officers designated and

authorized by the agency to handle contested cases, shall be presiding

officers in contested cases. Hearings shall be conducted in an im-

partial manner. On the filing in good faith by a party of a timely

and sufficient affidavit of personal bias or disqualification of a

presiding officer, the agency shall determine the matter as a part

of the record in the case, and its determination shall be subject to

judicial review at the conclusion of the proceeding. When a presiding

officer is disqualified or it is impracticable for. him to continue the

hearing. another presiding officer may be assigned to continue with

the case unless it is shown that substantial prejudice to the party will

result therefrom.

History: 1969, Act 306, Eff. July 1, 1970;-Am. 1970, Act 40,

Imd. Eff. July 1, 1970.

24.280 Presiding officer; powers and duties; **nonmeeting day”’

defined

Sec. 80.(1) A presiding officer may do all of the foliowing:

E-5

(a) Administer oaths and affirmations.

(b) Sign and issue subpoenas in the name of the agency, requir-

ing attendance and giving of testimony by witnesses and the pro-

duction of books, papers, and other documentary evidence.

(c) Provide for the taking of testimony by deposition.

(d) Regulate the course of the hearings, set the time and place

for continued hearings, and fix the time for filing of briefs and other

documents.

(e) Direct the parties to appear and confer to consider simplifica-

tion of the issues by consent of the parties.

(f) Act upon an application for an award of costs and fees under

sections 121 to 127.

(2) in order to assure adequate representation for the people of

this state, when the presiding officer knows that a party in a con-

tested case is a member of the legislature of this state, and the

legislature is in session, the contested case shall be continued by

the presiding officer to a nonmeeting day.

(3) In order to assure adequate representation for the people of

this state, when the presiding officer knows that a party to a con-

tested case is a member of the legislature of this state who serves

on a legislative committee, subcommittee, commission, or council

that is scheduled to meet during the legislative session while the

legislature is temporarily adjourned, or that is scheduled to meet

during the interim between legislative sessions after the legislature

has adjourned sine die, or when the partisan caucus of which the

legislator is a member is scheduled to meet, the contested case shall

be continued to a nonmeeting day.

(4) In order to assure adequate representation for the people of

this state, when the presiding officer knows thai a witness in a con-

tested case is a member of the legislature of this state, and the

legislature is in session, or the member is serving on a legislative

committee, subcommittee, commission, or council that is schedul-

ed to meet during the legislative session while the legislature is tem-

porarily adjourned or during the interim between legislative sessions

after the legislature has adjourned sine die, or when the partisan

caucus of which the legislator is a member is scheduled to meet the

contested case need not be continued, but the taking of the legislators

testimony, as a witness shall be postponed to the earliest practicable

nonmeeting day.

(5) The presiding officer shall notify all parties to the contested

E-6

case. and their attorneys. of any continuance granted pursuant to

this section.

(6) As used in this section, **nonmeeting day"’ means a day on

which there is not a scheduled meeting of the house of which the

party or witness is a member. nor a legislative committee meeting

or public hearing scheduled by a committee, subcommittee, com-

mission, or council of which he or she is a member, nor a sched-

uled partisan caucus of the members of the house of which he or

she is a member.

History: 1969. Act 306. Eff. July 1. 1970:-Am. 1970. Act 40.

Imd. Eff. July 1. 1970;-Am. 1984. Act 28, Imd. Eff. March 1, 1984;-

Am. 1984, Act 196, Imd. Eff. July 3, 1984.

24.281 Proposals for decision; contents.

Sec. 81.(1) When the official or a majority of the officials of the

agency who are to make a final decision have not heard a contested

case or read the record, the decision, if adverse to a party to the

proceeding other than the agency itself, shall not be made until a

proposal for decision is served on the parties, and an opportunity

is given to each party adversely affected to file exceptions and pre-

sent written arguments to the officials who are to make the deci-

sion. Oral argument may be permitted with consent of the agency.

(2) The proposal for decision shall contain a statement of the

reasons therefor and of each issue of fact and law necessary to the

proposed decision. prepared by a person who conducted the hear-

ing or who has read the record.

(3) The decision, without further proceedings, shall become the

final decision of the agency in the absence of the filing of excep-

tions or review by action of the agency within the time provided

by rule. On appeal from or review of a proposal of decision the agen-

cy, except as it may limit the issue upon notice or by rule, shall

have all the powers which it would have if it had presided at the

hearing.

(4) The parties, by written stipulation or at the hearing, may waive

compliance with this section.

History: 1969, Act 306, Eff. July 1, 1970;-Am. 1970, Act 40,

Imd. Eff. July 1, 1970 :

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24.282 Communications by agency staff; limitations; exceptions.

Sec. 82. Unless required for disposition of an ex parte matter

authorized by law, a member or employee of an agency assigned

to make a decision or to make finding of fact and conclusions of

law in a contested case shall not communicate, directly or indirect-

ly, in connection with any issue of fact, with any person or party,

nor, in connection with any issue of law, with any party or his

representative, except on notice and opportunity for all parties to

participate. This prohibition begins at the time of the notice of hear-

ing. An agency member may communicate with other members of

the agency and may have the aid and advice of the agency staff other

than the staff which has been or is engaged in investigating or pro-

secuting functions in connection with the case under consideration

or a factually related case. This section does not apply to an agency

employee, or party representative with professional training in ac-

counting, actuarial science, economics, financial analysis or rate-

making, in a contested case before the financial institutions bureau,

the insurance bureau or thepublic service commission insofar as the

case involves rate-making or financial practices or conditions.

History: 1969, Act 306. Eff. July 1, 1970;-Am. 1970, Act 40,

Imd. Eff. July 1. 1970.

24.285 Final decisions and orders.

Sec. 85. A final decision or order of an agency in a contested case

shall be made, within a reasonable period, in writing or stated in

the record and shall include findings of fact and conclusions of law.

Findings of fact shall be based exclusively on the evidence and on

matters officially noticed. Findings of fact, if set forth in statutory

language, shall be accompanied by a concise and explicit statement

of the underlying facts supporting them. If a party submits propos-

ed findings of fact which would control the decision or order, the

decision or order shall include a ruling upon each proposed finding.

Each conclusion of law shall be supported by authority or reasoned

opinion. A decision or order shall not be made except upon con-

sideration of the record as a whole or such portion thereof as may

be cited by any party to the proceeding and as supported by and

in accordance with the competent, material and substantial evidence.

A copy of the decision or order shall be delivered or mailed forth-

with to each party and to his attorney of record.

a

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History: 1969, Act 306. Eff. July 1, 1970:-Am. 1970, Act 40,

Imd. Eff. July 1, 1970.

24.286 Official records of hearings.

Sec. 86. (1) An agency shall prepare an official record of a hear-

ing which shall include:

(a) Notices, pleadings, motions and intermediate rulings.

(b) Questions and offers of proof objections and ruling thereon.

(c) Evidence presented.

(d) Matters officially noticed, except matters so obvious that

a Statement of them would serve no useful purpose.

(e) Proposed findings and exceptions.

(f) Any decision, opinion, order or report by the officer presiding

at the hearing and by the agency.

(2) Oral proceedings at which evidence is presented shall be record-

ed. but need not be transcribed unless requested by a party who shall

pay for the transcription of the portion requested except as other-

wise provided by law.

History: 1969, Act 306. Eff. July 1, 1970:-Am. 1970, Act 40,

Imd. Eff. July 1. 1970.

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