Petition for Writ of Certiorari — Vermont v. Green Mountain Railroad

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Connecticut River and on the west side by railroad tracks

and other property. Jd. The Connecticut River in this

area contains valuable fisheries and is a prime

recreational resource. Joint Appendix, Second Circuit, at

85 (hereinafter, “JA-xxx”).

a. The Buffer Zone Condition. In 1997, GMRC

sought an Act 250 permit to construct a 20-foot by 30-foot

office building and to operate a “forest products

distribution yard” at the Riverside site.’ App. 18a. In the

permit application, GMRC proposed a 75-foot buffer zone

along the Connecticut River to satisfy environmental

criteria under Act 250, Vt. Stat. Ann. tit. 10, §§

6086(a)(1)E) & (F) (streams and shorelines). App. 4a.

Because riparian buffers play a crucial role in protecting

rivers such as the Connecticut (JA-089), the Vermont

Agency of Natural Resources recommended that the

buffer zone be enlarged from 75 to 100 feet. App. 4a.

On November 12, 1997, the District #2 Environmental

Commission, which is the state authority that oversees

projects in the Rockingham area, issued Land Use Permit

#2W0038-2 (the “Dash Two” permit). App. 4a. Condition

14 of the permit required:

The permittees shall maintain a 100-foot

undisturbed, naturally vegetated buffer strip with

no mowing or cutting of vegetation between the top

of the bank of the Connecticut River and any

disturbed areas.

App. 18a.

* GMRC did not initially dispute Act 250’s pre-construction

permitting requirement.

b. The Salt Shed Permit. In the spring of 1998,

GMRC sought an amendment to its Act 250 permit, called

the “Dash Three” permit application, to construct a 100-

foot by 275-foot salt storage shed. App. 5a. The district

environmental commission issued the Dash Three permit

on January 13, 1999.

In October 1999, GMRC sought another amendment,

the “Dash Three-B” permit application, to modify the size,

type, color and location of the salt storage building. App.

5a. In November 1999, GMRC began construction of the

modified salt storage shed without having obtained a final

Dash Three-B permit. Id.

In January and February of 2000, the State issued two

separate notices of violation to GMRC for various Act 250

violations at the Riverside site, including the construction

of the unapproved salt shed and the storage of materials

within the 100-foot buffer zone.’ App. 5a.

4. Proceedings Below

a. On June 6, 2001, GMRC filed a complaint in federal

district court where it admitted to various Act 250

violations, but claimed that the ICCTA preempted

enforcement of those conditions.’ App. 16a. GMRC also

alleged that, as a railroad, it did not need to obtain an Act

250 permit for future construction, such as a proposed

cement facility at the Riverside site, because any attempt

by the State to -require the railroad to obtain pre-

construction permits was preempted by federal law. Id.

* There is no dispute in this case that GMRC failed to maintain

the buffer zone or that it constructed a salt shed without an

approved permit.

* On June 5, 2001, GMRC filed a similar petition to institute

declaratory proceedings before the STB, which denied the

petition on May 24, 2002. App. 5a-6a.

In a motion to dismiss filed on July 17, 2001, the State

argued that Act 250 is not preempted on its face by

Section 10501(b) and that Act 250 has only an incidental

impact on the economic activities of GMRC. App. 16a.

b. The District Court granted in part, and denied in

part, the State’s motion to dismiss: “[T]o the extent the

Defendants ask the Court to dismiss Green Mountain’s

claim that the ICCTA preempts Act 250 under all

circumstances, the motion is granted. Act 250 retains

viability where its provisions do not unduly interfere with

the provisions and purposes of the ICCTA.” JA-020

(District Court’s Ruling on Pending Motions, Sept. 26,

2001) (emphasis added).

On July 15, 2003, the State filed a motion for summary

judgment, and on August 22, 2003, GMRC filed a cross-

motion for summary judgment. The State restated its

argument that Section 10501(b) does not preempt Act 250

in this case because Act 250 does not unduly burden the

railroad.

In a decision dated December 15, 2003, the District

Court contradicted its earlier order and held that the

State “may not apply a law like Act 250 so as to require

pre-construction approval and permitting.” App. 28a. It

granted GMRC’s cross-motion for summary judgment and

denied the State’s motion for summary judgment. App.

32a. The State appealed.

c. The Second Circuit affirmed on April 14, 2005,

stating that the ICCTA “expressly preempts ‘remedies

provided under Federal and State law.” App. 2a. It

further found that the plain language of Section 10501

“reflects clear congressional intent to preempt state and

local regulation of integral rail facilities.” App. 15a.

The court held that “the permitting process itself” was

preempted as applied to railroads because “the railroad is

restrained from development until a permit is issued; the

requirements for the permit are not set forth in any

schedule or regulations that the railroad can consult in

order to assure compliance; and the issuance of the permit

awaits and depends upon the discretionary ruling of a

state or local agency.” App. 11a.

The court rejected the State’s arguments that Act 250 is

not preempted on its face and that the court should assess

the actual impact of any conditions imposed. App. 1la. It

held, instead, that preemption applied even if there were

“permit applications affecting railroad facilities that could

be promptly approved without the slightest imposition on

rail operations.” Jd. The court therefore found it

unnecessary to “conduct a fact-based inquiry weighing the

economic impact of Act 250’s permitting process upon

Green Mountain.” App. 15a.

It likewise disagreed that only economic regulations —

i.e., direct economic regulations or those that have a

substantial economic impact — are preempted by the

ICCTA. App. 13a. The court found the distinction “not

useful” because the permitting process “necessarily

interferes” with GMRC’s ability to construct facilities and

conduct economic activities. App. 13a-14a.

Finally, the court was unmoved by the State’s argument

that the district court’s decision leads to illogical

consequences. The State argued that because the

activities at issue are ancillary projects and not under the

STB’s regulatory authority, they would be subject to no

environmental review whatsoever if Act 250 were

preempted. Despite this gap in regulatory coverage, the

Court held that Act 250 was per se preempted. -

REASONS FOR GRANTING THE PETITION

Since its enactment over ten years ago, federal and

state courts have repeatedly disagreed over the

preemptive force of Section 10501(b) of the ICCTA as it

applies to railroad operations in general, and also as it

applies to ancillary projects — which are not under federal

regulatory control. In this case, the Second Circuit took

an expansive view that stretches the preemptive scope of

the ICCTA beyond its breaking point. Unlike most other

courts, it held that pre-construction permitting programs

are per se preempted.

This Court should grant certiorari for three reasons.

First, this Court should resolve the conflict among the

courts, including a direct split between the Vermont

Supreme Court and its corresponding circuit court of

appeals, on the preemptive scope of Section 10501(b).

Second, this is a recurring issue that goes to the heart of

federal-state relations and that has been fully developed

by the lower courts. Third, the Second Circuit misapplied

this Court’s precedents and erred when it held that

railroads are completely exempt from pre-construction

permitting programs.

I. The Second Circuit’s Decision Is In Sharp

Conflict With Decisions Of Other Courts. Of

Appeals And State Supreme Courts.

Courts across the country are divided over the level of

preemption intended by Section 10501(b).“ The tests

* The federal district court for the District of Columbia in

District of Columbia v. 109,205.5 Square Feet of Land, 2005 WL

975745 at *3 (D.D.C. Apr. 21, 2005), recently recognized the

conflict among the courts on the preemptive breadth of Section

10501(b). It stated:

applied by the courts to determine preemption

demonstrate a fundamental disagreement over how to

interpret the plain language of Section 10501(b), and,

more specifically, what effect to give the phrase “with

respect to the regulation of rail transportation” as that

phrase is used in that section. The courts have applied

four distinct and conflicting tests when determining the

scope of preemption of Section 10501(b).

First, the Second Circuit in this case interpreted Section

10501(b) to preempt all pre-construction permitting

programs as applied to railroads because they

“necessarily interfere” with a railroad’s ability to

construct facilities and conduct economic activities.’

App. 14a (internal quotations omitted). Relying

extensively on the Ninth Circuit’s ruling in City of

Auburn v. United States, 154 F.3d 1025 (9th Cir. 1998),

cert. denied, 527 U.S. 1022 (1999), the Second Circuit

construed the section expansively, finding “[i]t is difficult

to imagine a broader statement of Congress’s intent to

preempt state regulatory authority over railroad

Courts have been split on the broadness of preemption

under ICCTA; some have held it preempts all state

efforts, City of Auburn [v. United States], 154 F.3d [1025,]

1029-1030 [9th Cir. 1998]; Wis[consin] Cen[tral] Ltd. [v.

City of Marshfield], 160 F. Supp. 2d [1009,] 1013 [W.D.

Wis. 2000], and others have held it applies only to the

regulation of rail transportation. Jowa, Chi. & E. R.R. v.

Wash{ington]. County, 584 F.3d 557, 561 (8th Cir. 2004);

Fla. E. Coast R.R. Co. v. City of West Palm Beach, 266

F.3d 1324, 1331 (11th Cir. 2001).

Presumably unaware of the Second Circuit’s decision seven

days earlier, the district court failed to cite the opinion below.

* The STB, which filed an Amicus Brief in the case below, also

claims that pre-construction permitting requirements are

entirely preempted.

operations.” App. 15a. Thus, pursuant to the decision

below, all state and local pre-construction permitting

processes are completely preempted regardless of whether

they delay, interfere, or otherwise impose any burden on

railroad operations.’

Second, the Vermont Supreme Court, in direct conflict

with the decision below, has held that pre-construction

permitting programs are not absolutely preempted.

Instead, the court has required examination of permit

conditions to determine whether they interfere with

railroad operations.

Third, the Eleventh Circuit and the Alaska Supreme

Court have similarly rejected the Second Circuit’s broad

view of preemption. These courts have ruled that Section

10501(b) does not preempt regulations that have only a

minimal or remote impact on rail transportation.

Fourth, the Eighth -Circuit and, most recently, the

North Dakota Supreme Court, have looked to whether the

ICCTA addressed the same issue as the state regulation

in question. These courts have found no preemption

where the ICCTA does not specifically regulate the matter

at issue.

* The Second Circuit’s reliance on City of Auburn, however,

was misplaced because the Ninth Circuit’s ruling turned on the

presence of an additional and broader preemption provision of

the ICCTA that is not at issue here.

” Although not reviewing a pre-construction permitting

program, the Fifth Circuit has also taken a broad view of

preemption under Section 10501(b). See Friberg v. Kansas City

Southern Railway, 267 F.3d 439 (5th Cir. 2001).

A. The Decision Below Conflicts With A

Decision Of The Vermont Supreme Court.

The Vermont Supreme Court’s holding in In re Appeal

of Vermont Railway, 769 A.2d 648 (Vt. 2000), directly

conflicts with the decision below. Despite examining a

very similar land use scheme, the Vermont Supreme

Court rejected the notion that Section 10501(b) amounts

to a per se bar to pre-construction permitting

requirements.

In Vermont Railway, an affiliate of GMRC, Vermont

Railway, appealed various permit conditions imposed by

the City of Burlington, Vermont, in connection with a

facility that Vermont Railway operated. Id. at 651.

Some of these conditions included requirements relating

to the proposed expansion and use of a salt shed at that

facility. Id. - The railroad claimed that Burlington’s

zoning ordinances were “preempted entirely” by Section

10501(b). Id. at 650. :

The Vermont Supreme Court refused to find that

Section 10501(b) preempted the imposition of the pre-

construction permitting program. Id. at 654. The court,

citing the STB’s decision in King County, WA, Petition for —

Declaratory Order, S.T.B. Finance Docket No. 32974,

1996 WL 545598 at *4 (1.C.C.) (September 25, 1996),

recognized that “the ICCTA does not usurp the right of

state and local entities to impose appropriate public

health and safety regulation on interstate railroads.” 769

A.2d at 653. The court concluded that this included the

power to protect the environment. Id. at 655 (upholding

* Thus, the STB has acknowledged that not ail state and local

regulation is preempted entirely by Section 10501(b). It

appears, however, to have drawn a distinction with pre-

construction permitting programs. See supra note 5.

conditions that were “designed to avert -potential

contamination from the salt shed”).

The court held that “the proper approach” under Section

10501(b) is to determine whether the permit conditions

“stood as an obstacle to the goals of the ICCTA.” 7d. at

655. Only if those conditions “interfere[d] with railway

operations” would they be preempted. Jd. (emphasis in

original); contra GMRC, App. Qa _ (pre-clearance

requirements are preempted because they “unduly

interfere with interstate commerce”). The Vermont

Supreme Court explicitly rejected the railroad’s argument

that any permit condition “necessarily has an economic

impact on its railway operations such that it is

preempted.” 769 A.2d at 654 (emphasis in original).

In reaching its contrary position that pre-construction

permitting programs are per-se preempted, the Second

Circuit relied upon three factors: [1] “the railroad is

restrained from development until a permit is issued; [2]

the requirements for the permit are not set forth in any

schedule or regulation that the railroad can consult in

order to assure compliance; and [3] the issuance of the

permit awaits and depends upon the discretionary ruling

of a state or local agency.” App. 11a.

Yet, Burlington’s Zoning Ordinances (“BZO”), which

were at issue in Vermont Railway, share these same

characteristics. Both Act 250 and Burlington’s Zoning

Ordinances impose pre-construction permitting

requirements. BZO § 4.1.3 (“No land development may be

commenced within Burlington without a zoning permit”);

Act 250, Vt. Stat. Ann. tit. 10, § 6081(a) (“No person shall

. . . commence development without a permit”). Both

have criteria to help guide applicants and reviewing

agencies, but there is no ability to assure that a permit

will be issued for certain projects. BZO, § 7.1.6

(development board guided by standards “in conducting

its review and imposing conditions and safeguards”); Vt.

Stat. Ann. tit. 10, § 6066 (conditions and criteria for

granting permits). Both give the permitting authority

discretion to determine whether a project complies with

certain criteria. BZO § 13.1.6(a) (board required to find

that major impact developments will “not result in undue

water, air or noise pollution”); Vt. Stat. Ann. tit. 10,

§ 6086(a)(1) (commission must find that the development

“will not result in undue water or air pollution”).

Consequently, the division between the Second Circuit

and the Vermont Supreme Court could not be more stark.

Reviewing virtually identical pre-construction permitting

schemes, the Second Circuit held that these programs are

automatically preempted, while the Vermont Supreme

Court held that the permit conditions imposed must be

evaluated to see whether they interfere with railroad

operations. Whether such pre-construction permitting

programs are preempted under Section 10501(b) thus

depends entirely on which court heard the case. The

ruling of the Second Circuit and that of the Vermont

Supreme Court cannot be reconciled. Such a conflict

requires resolution by this Court.

B. The Decision Below Conflicts With

Decisions Of The Eleventh Circuit And The

Alaska Supreme Court.

The Second Circuit’s decision also conflicts with the

Eleventh Circuit’s decision in Florida East Coast Railway

v. City of West Palm Beach, 266 F.3d 1324, 1339 (11th

Cir. 2001), and the Alaska Supreme Court’s decision in

Native Village of Eklutna v. Alaska R.R., 87 P.3d 41, 57

(Alaska 2004).

1. Florida East Coast Railway v. City of West

Palm Beach

At issue in Florida East Coast Railway was whether

Section 10501(b) preempted the zoning ordinances of

West Palm Beach. The Eleventh Circuit found that the

plain language of Section 10501(b) did not reflect broad

congressional intent to preempt all local regulation of rail

transportation. 266 F.3d at 1330-31; contra GMRC, App.

15a (“the plain language of Section 10501 reflects clear

congressional intent to preempt state and local regulation

of integral rail facilities”). Rather, the court determined

that the phrase “with respect to regulation of rail

transportation” placed express limitations on the scope of

preemption of Section 10501(b). 266 F.3d at 1331. The

Eleventh Circuit ruled that Congress had “narrowly

tailored the ICCTA pre-emption provision to displace only

‘Tegulation,’ i.e., those state laws that may reasonably be

said to have the effect of ‘managling]’ or ‘govern[ing]’ rail

transportation . . . while permitting the cantinued

application of laws having a more remote or incidental

effect on rail transportation.” Jd. (citations omitted).

* Numerous state courts have similarly found no preemption

under Section 10501(b) where regulations impose only

incidental burdens on railroads. Jones v. Union Pac. R.R., 94

Cal. Rptr. 2d 661, 666-67 (Cal. Ct. App. 2000) (noting “{[s)tate

and local regulation of Union Pacific's trains is permissible if it

does not interfere with Union Pacific's interstate rail

operations”); Soo Line R.R. v. City of Minneapolis, 625 N.W.2d

834, 836 (Minn. Ct. App. 2001) (designation of roundhouse for

local heritage preservation was not preempted by ICCTA

because designation did not interfere with any plan of railway

to use the roundhouse); State ex rel. Oklahoma Corp. Comm'n v.

Burlington N. and Santa Fe Railway, 24 P.3d 368, 371 (Okla.

Ct. App. 2000) (statute requiring railroads to construct fences

along railway rights-of-way was not preempted by ICCTA).

Even though the application of the zoning regulations

might not be “optimally efficient for (the railroad’s]

operations,” the court concluded, the “requirements do not

impede the interstate functioning of the railroad

industry” and could not be considered the “regulation of

rail transportation” under Section 10501(b). Id. at 1339;

contra GMRC, App. 15a (the court “need not conduct a

fact-based inquiry weighing the economic impact of Act

250’s permitting process upon Green Mountain”).

The decision of the Eleventh Circuit directly conflicts

with the ruling below in two key respects. First, the

Eleventh Circuit’s narrow interpretation of the plain

language of Section 10501(b) is diametrically opposed to

the Second Circuit’s broad view. Second, the Eleventh’s

Circuit focus on the impact of the regulation in question

diverges from the Second Circuit’s facial preemption

analysis.

2. Native Village of Eklutna v. Alaska R.R.

The Alaska Supreme Court’s decision in Native Village

of Eklutna v. Alaska R.R. also conflicts with the Second

Circuit’s decision as to whether Section 10501(b)

completely preempts pre-construction permitting

programs.

In Native Village of Eklutna, the Alaska Railroad

Corporation began operation of a quarry on culturally

significant land near Anchorage, Alaska. 87 P.3d at 43-

44. Eklutna, joined by Anchorage, brought suit to enjoin

the railroad from operating the quarry without a

conditional use permit. Jd. The railroad argued that it

was not required to obtain a conditional use permit

because Section 10501(b) preempted the ordinances with

respect to railroad property. Id. at 56.

18 Z

Like the Eleventh Circuit, the Alaska Supreme Court

looked to whether the zoning ordinances had “more than

[an] incidental impact on [the railroad’s] operations.” 87

P.3d at 57. In finding that the regulations and the

conditional use permit requirement were not preempted,

the court recognized that “Congress’s focus on economic

regulation makes clear that it had no intention of

preempting all state or local regulation that touches

railroads in any way.” Id. (emphasis added). The

Alaska Supreme Court stated:

ICCTA’s preemption is aimed at improving the

“nationwide efficiency of the railroad industry,” not

at stopping all regulation that “prevents an

individual firm from maximizing its profits.” Local

regulation may bring some hardship or

inconvenience to a railroad without causing the sort

of economic impact that would trigger preemption.

Id. (footnote omitted); contra GMRC, App. l4a

(permitting process “necessarily interferes with Green

Mountain’s ability to construct facilities and conduct

economic activities”) (internal quotations omitted).

“ Many courts have recognized that Congress’s purpose in

enacting the ICCTA was to preempt only the economic

regulation of railroads by States — not all regulation relating to

railroads. See, e.g., CSX Transp., Inc. v. City of Plymouth, 92 F.

Supp. 2d 643, 658 (E.D. Mich. 2000) (discussing findings of

several courts that have found that the ICCTA “preempts state

law regulation of railroads in an economic sense”), aff'd on other

grounds, 283 F.3d 812 (6th Cir. 2002); Burlington N. Santa Fe

Corp. v. Anderson, 959 F. Supp. 1288, 1296 (D. Mont. 1997)

(holding that the “statutory language and accompanying

legislative record [of the ICCTA] evidence Congress’ clear and

manifest intent to occupy the entire field of economic regulation

of railroad transportation”).

Finally, the Alaska Supreme Court acknowledged that

requiring the railroad to get a conditional use permit “will

at least delay the operation of the [project] by the time

needed for the Railroad to obtain a conditional use

permit, and may bar the Railroad’s use of the land

altogether, if the permit is denied.” 87 P.3d at 57 (quoting

Vermont Railway, 769 A.2d at 654). It noted that

“[wlhether this amounts to undue interference with the

Railroad’s operation is a ‘fact-bound determination.” Jd.

Contrary to the reasoning of the Second Circuit, the

Alaska Supreme Court found such factors insufficient to

require per se preemption. Contra GMRC, App. 9Ya-10a,

15a (permitting process preempted because “it can be

time-consuming, allowing a local body to delay

construction of railroad facilities almost indefinitely” and

the court “need not conduct a fact-based inquiry weighing

the economic impact of Act 250’s permitting process upon

Green Mountain”).

Therefore, the test applied by both the Eleventh Circuit

and the Alaska Supreme Court, which looks to the

regulation’s effect on rail transportation, is in conflict

with the Second Circuit’s broad view of both the plain

language and the preemptive scope of Section 10501(b).

C. The Decision Below Conflicts With

Decisions Of The Eighth Circuit And The

North Dakota Supreme Court.

The Second Circuit’s decision is also incompatible with

the Eighth Circuit’s ruling in Jowa, Chicago & Eastern

R.R. v. Washington County, 384 F.3d 557, 561 (8th Cir.

2004), and the North Dakota Supreme Court’s ruling in

Home of Economy v. Burlington Northern Santa Fe R.R.,

694 N.W.2d 840, 846-47 (N.D. 2005). Under the analysis

of these courts, preemption is not required under Section

10501(b) unless the ICCTA specifically addresses the

same issue as the state regulation in question.

1. Jowa, Chicago & Eastern R.R. v. Washington

County

In Iowa, Chicago & Eastern R.R., Washington County,

Iowa petitioned the Iowa Department of Transportation

for a ruling that the railroad must pay to replace or repair

four “severely deficient” railroad bridges pursuant to state

statutory law. 384 F.3d at 558. The railroad then sought

a declaratory judgment that the Iowa statute was

preempted by the ICCTA. Id.

In analyzing the preemptive scope of Section 10501(b),

the Eighth Circuit concluded that because the ICCTA did

not address the repair and replacement of railway-

highway bridges, “[ilts silence cannot reflect the requisite

‘clear and manifest purpose of Congress’ to preempt

traditional state regulation” of this kind. Jd. at 561

(quoting CSX Transp., Inc. v. Easterwood, 507 U.S. 658,

664 (1993)). That finding was reinforced by the long-time

federal-state partnership addressing rail safety in the

Federal Rail Safety Act and also by the “traditional state

regulation of public roads and bridges that Congress has

encouraged in numerous other statutes.” Id. The court

explicitly rejected the railroad’s “broad argument that the

ICCTA preempted this type of state regulation of railroad

‘facilities.” Id. (emphasis in original).

2. Home of Economy v. Burlington Northern

Santa Fe R.R.

Similarly, in Home of Economy v. Burlington Northern

Santa Fe R.R., which was decided on April 6, 2005, a

landowner sued a railroad claiming that he had a

common-law right to have the railroad re-open a “grade

crossing” to allow him access to his property. 694 N.W.2d

21 :

840-41. The railroad claimed such common-law actions

were preempted by the ICCTA. The North Dakota

Supreme Court reviewed Section 10501(b) and found, like

the Eighth Circuit, that it preempted only matters that

were specifically addressed in the ICCTA. The court

concluded that Section 10501(b) did not preempt the

landowner’s common-law suit because the ICCTA did not

“explicitly deal with grade crossings.” Id. at 844. On the

contrary, the court recognized that the states possess

“traditional authority regarding grade crossings.” Id. at

846.

The test applied by the Eighth Circuit and the North

Dakota Supreme Court to determine preemption conflicts

with the decision below. These courts took a narrow view

and looked to whether the ICCTA specifically addressed

the state regulation in question, while the Second Circuit

took an expansive view, finding Section 10501(b)

demonstrates “Congress’s intent to preempt state

regulatory authority over railroad operations” —

regardless of whether the ICCTA addresses the exact

issue in question. App. 15a.

In sum, the preemptive scope of Section 10501(b) has

greatly divided state and federal courts of this country.

This Court’s review is necessary to resolve this conflict

among the courts. |

II. This Court Should Resolve A Recurring Issue

Of National Import That Has Been Fully

Developed By The Lower Courts.

This case involves an important and well-developed

issue of federalism that should be determined by this

Court. The decision below severely eviscerates state and

local authorities’ historic police powers, such as enforcing

land use, zoning and environmental regulations, as they

are applied to railroads. In addition, this is a recurring

issue that has been subject to ample analyses by the

lower courts so that no further review is necessary before

this Court rules on the matter.

A. This Is An Issue Of Exceptional Importance

That Goes To The Heart Of Federal-State

Relations. |

By holding that the ICCTA displaces all state and local

land use and environmental protections that operate

through pre-construction permit programs, the Second

Circuit has dealt a crippling blow to the ability of states

and localities to protect the environment and to control

development. Although the Second Circuit suggested that

not ali regulations are preempted, the remaining laws do

not protect these areas of concern. See GMRC, App. 10a

(finding that railroads are subject to some local regulation

such as electrical, plumbing and fire codes).

Like Vermont’s use of Act 250, local authorities

traditionally regulate land use and protect the

environment using their own zoning ordinances.

Although municipalities may call the permitting schemes

by different names, including “variances,” “conditional

use permits,” and “non-conforming use permits,” most

municipalities have some type of pre-clearance

requirement for commercial projects. Because most

permitting programs require site-plan or project review

before development, they would likely be preempted

under the Second Circuit’s sweeping decision.

Such land use regulations play a significant role in

protecting the nation’s natural resources. Both Congress

and this Court have recognized the states’ primary role in

regulating land use and preserving the environment. See,

e.g., Solid Waste Agency of Northern Cook County v.

United States Army Corps of Eng’rs, 531 U.S. 159, 174

(2001) (the states, not the federal government, exercise

“traditional and primary power over land and water use”).

Furthermore, state and local laws protect numerous

interests that are not directly regulated by federal law,

such as preservation of wildlife habitat and natural areas

and protection of agricultural soils. See Vt. Stat. Ann. tit.

10, § 6086(a\(8) & (9). Eliminating Act 250 and similar

local regulations leaves these interests entirely

unprotected. Although critically important, federal

environmental laws are not intended to, and cannot,

substitute for comprehensive state regulation like Act 250

and other permit processes.

Moreover, the Second Circuit’s decision produces the

illogical result that these types of permitting programs

are preempted regardless of what railroad projects are at

issue. Thus, a railroad can claim that virtually any

project tangentially related to rail transportation is

exempt from regulation. And, as demonstrated by this

case, this means there would be no environmental review

— federal, state or local — over many “ancillary” projects

where the STB has jurisdiction, but no regulatory

authority. See Appeal of Vermont Railway, 769 A.2d at

653 n.* (citing STB acknowledgment that it has only

limited regulatory authority). For example, under the

Second Circuit’s decision, if a railroad wanted to operate

and use a solid waste landfill, or a rock quarry, see, e.g.,

Native Village of Eklutna, 87 P.3d at 56-57, supra pp. 17-

19, at the terminus of or along side a rail line, it would

evade all federal, state and local environmental

permitting requirements. Congress could not have

intended to exempt these “ancillary” projects from all

environmental review, while requiring “core” rail

transportation projects to be reviewed by the STB under

the National Environmental Policy Act. 42 U.S.C. §

4332(2\C); 49 C.F.R. § 1105.6.

Nothing in the language or history of the ICCTA shows

that Congress intended to completely displace historic

state police powers that may only touch upon rail

transportation. Environmental regulation by state and

local authorities for projects outside federal regulatory

control is entirely consistent with the federal-state

partnership in environmental protection, with the states’

historic power to regulate in this area, and with the goals

of the ICCTA.

B. This Question Will Continue To Challenge

The Lower Courts And They Have Fully

- Developed The Issue.

The Ninth Circuit in City of Auburn v. United States

was the first circuit court of appeals to review the pre-

emptive scope of the ICCTA. In 1999, the United States -

in its brief in opposition to granting certiorari in City of

Auburn, wrote that “the administrative and judicial

process of construing the ICCTA and its effect on state

and local regulation has only recently begun,” and that “it

would be premature for this Court to review questions

about the ICCTA’s preemptive scope before the Board and

the lower courts have had the opportunity to consider the

preemptive question in a variety of concrete factual

settings.” Brief for the Federal Respondents in

Opposition to Certiorari at 11, No. 98-1511, City of

Auburn v. United States.

Courts have now had that opportunity. As recognized

by the North Dakota Supreme Court in Home of Economy,

some courts have broadly construed Congress’s

preemption language in Section 10501(b) and concluded

that it preempted state or local laws. See 694 N.W.2d at

844 (citing 9 cases). Other courts have narrowly

construed the section and have concluded that it did not

preempt state or local laws. See id. at 844-45 (citing 6

cases). The matter has been fully vetted by the courts of

this nation.

Given the continued importance of this issue, the

divergent views of all these courts, and the impact of the

Second Circuit’s far-reaching decision, it is now time for

this Court to provide guidance on this issue.

III. The Second Circuit Misapplied This Court’s

Precedents And Reached The Wrong Result.

This Court’s preemption analysis is well established.

The ultimate goal is to ascertain Congress’s intent in

crafting a preemption provision. Medtronic, Inc. v. Lohr,

518 U.S. 470, 485 (1996) (“purpose of Congress is the

ultimate touchstone” in every preemption case). To

determine that purpose, this Court has instructed that

the language of the statute, the statutory scheme, and the

legislative history should be examined. ‘In areas where

states have traditionally exercised their police powers,

even greater care must be taken to assure that

preemption goes no further than Congress intended.

Here, the Second Circuit’s decision incorrectly analyzes

each of the above factors and arrives at a result that can

not be squared with prior decisions of this Court.

The Second Circuit misread the plain language of

Section 10501(b), and erred by not giving effect to every

clause and word of the statute. Bennett v. Spear, 520 US.

154, 173 (1997). Although the Second Circuit purported

to apply a plain language analysis, the court broadly, and

inaccurately, stated that the ICCTA “expressly

preempts ‘remedies provided under Federal and State

law.”" App. 2a. The actual wording of Section 10501(b),

however, makes clear that only the remedies set out in

Part A are exclusive. App. 34a (42 U.S.C. § 10501(b))

(remedies “provided in this part . . . are exclusive”); c.f,

Cipollone v. Liggett Group, Inc., 505 U.S. 505, 517 (1992)

(Congress’s “enactment of a provision defining the

preemptive reach of a statute implies that matters beyond

that reach are not preempted”).

In addition, Section 10501(b) contains additional

limiting language overlooked by the Second Circuit.

Congress made the remedies in Part A exclusive, but only

“with respect to regulation of rail transportation.” App.

34a (42 U.S.C. § 10501(b)) (emphasis added). Congress’s

choice to include this language demonstrates its intent to

preempt only state regulation that could be considered

“regulation of rail transportation.” The Second Circuit’s

failure to appreciate the significance of this phrase, which

acts to restrict the preemptive scope of Section 10501(b),

further undermines the court’s legal analysis. See, e.g.,

Florida East Coast Railway, 266 F.3d at 1331 (phrase

“with respect to regulation of rail transportation” places

express limitations on the scope of preemption under

Section 10501(b)).

The Second Circuit also should have considered Section

10501(b) in pari materia with other sections in the

ICCTA. Crawford Fitting Co. v. J. T. Gibbons, Inc., 482

U.S. 437, 445 (1987). Other preemption provisions found

in Part A of title 49 severely undercut the Second

" The court also erred when it stated that the plain language

gave the STB “wide authority” over the facilities at issue in this

case. App. 7a. Although the STB may have jurisdiction, it does

not have regulatory power over the projects. See supra p. 4.

Circuit’s broad interpretation of Section 10501(b). For

example, Section 11501, entitled “tax discrimination

against rail transportation property,” states:

The following acts unreasonably burden and

discriminate against interstate commerce, and a

State, subdivision of a State, or authority acting for

a State or subdivision of a State may not do any of

them.

App. 36a (49 U.S.C. § 11501(b)).

This provision would be entirely unnecessary if the

Second Circuit’s broad interpretation of the preemptive

scope of Section 10501(b) were correct. In other words, if

Section 10501(b) represented “Congress’s intent to

preempt state regulatory authority over railroad

operations,” as the Second Circuit asserts (GMRC, App.

15a), Congress would not have needed to expressly

preempt the states’ ability to impose certain taxes on

railroads in Section 11501(b). These activities would have

already béen preempted by Section 10501(b). See also 49

U.S.C. § 11321(a) (exempting railroads “from the

antitrust laws and from all other law” when engaging in

certain activities).

This Court’s decision in Rice v. Santa Fe Elevator

Corp., 331 U.S. 218 (1947), further evidences the Second

Circuit’s misguided analysis. In that case, the Court

examined whether a federal law, which gave a federal

agency wide jurisdiction over the operation of grain

warehouses, preempted state efforts to regulate in that

area. Section 29 of the U.S. Warehouse Act stated that

“the power, jurisdiction, and authority conferred upon

the Secretary of Agriculture under this act shall be

exclusive.” See Id. at 223-24. In finding that certain

claims were not preempted, the Court held:

The test, therefore, is whether the matter on

which the State assets [sic] the right to act is in

any way regulated by the Federal Act. If it is, the

federal scheme prevails though it is a more

modest, less pervasive regulatory plan than that of

the State.

Id. at 236.

The Court then analyzed each of the allegations in the

complaint and found that the act “contain[ed] no

‘provisions relating expressly” to several of the matters

at issue. Id. at 237. It concluded that “Congress has

not foreclosed state action by adopting a policy of its

own on these matters,” and found no preemption. Id.

The Rice Court’s analysis demonstrates that the —

Second Circuit’s holding is not supportable. The

requirement that GMRC go through Act 250’s

permitting process does not implicate, much less, clash

with, any of the remedies provided in the ICCTA —~

especially considering that the STB lacks regulatory

authority over the projects at issue. Accord California

Coastal Comm’n v. Granite Rock Co., 480 U.S. 572, 580

(1987) (preemption applies only where “no possible set of

conditions” could be placed on permit that would not

conflict with federal law). -

The Second Circuit decision also fails to adhere to this

Court’s instruction that when “Congress legislates in a

field which the States have traditionally occupied .. .

[courts] start with the assumption that the historic

police powers of the States were not to be superseded by

the Federal Act unless that was the clear and manifest

purpose of Congress.” Rice, 331 U.S. at 230 (emphasis

added); see also CSX Transp., Inc., 507 U.S. at 664. No

clear and manifest purpose to preempt all pre-

construction permitting requirements can be inferred

from the language of Section 10501(b).

That conclusion is reinforced by the ICCTA’s

legislative history. See, e.g., Mid-Con Freight Sys. Inc. v.

Michigan Public Service Comm’n, 545 U.S. __, 125

S.Ct. 2427, 2433 (2005) (“Our reading of the text finds

confirmation in historical context”). Contrary to the

view of the Second Circuit, a cursory review of the -

legislative history on the development of the preemptive

scope of Section 10501(b) confirms that Congress sought

to limit the scope of preemption. Initially, the House and

the Senate could not agree on a common version, and a

Committee of Conference was formed to produce a final

bill. The Senate “intend[ed] that those States regulating

intrastate rail transportation continue to be required to

regulate only in a manner consistent with the [Interstate

Commerce Act].” S. Rep. 104-176, at 5, 1995 WL 701522

at *6. The House sought to eliminate the states’ authority

“to administer economic regulation of railroads,” and

further advocated the complete exclusivity of federal

remedies, which was “intended to encompass ll

statutory, common law, and administrative remedies

addressing the rail-related subject matter jurisdiction of

the (STB].”. H.R. Rep. No. 104-311, at 95, 1995

U.S.C.C.A.N. at 807. The House had proposed: “Except as

otherwise provided in this part, the remedies provided

under this part are exclusive and preempt the remedies

provided under Federal or State law.” Id. at 793.

In formulating a compromise, the Committee of

Conference rejected the House’s broader scope, and added

the limiting phrase “with respect to regulation of rail

transportation” to the House’s proposed preemption

clause. The Committee of Conference “clariflied] that the

exclusivity is limited to remedies with respect to rail

regulation — not State and Federal law generally.” H.R.

Conf. Rep. 104-422, at 167, 1995 U.S.C.C._A.N. at 852.

Therefore, preemption under Section 10501(b) was never

intended to apply to all state laws that touch on rail

transportation. See, e.g., Florida East Coast Railway, 266

F.3d at 1331 (preemption only extends to “regulation of

rail transportation”).

Finally, the Second Circuit’s faulty decision is further

evidenced by the illogical result it produces. As discussed

above, see supra pp. 23-24, the per se preemption of

permitting programs such as Act 250 allows many

railroad projects to evade state and local environmental

review. Because many of these projects are also outside of

the STB’s regulatory authority, railroads can operate in a

“regulatory void” — completely free of oversight. Congress

could not have intended this conclusion.

By not following this Court’s precedents and failing to

give the phrase “with respect to regulation of rail

“transportation” the limiting effect that Congress

expressly intended, the Second Circuit erred in

concluding that Act 250 was entirely preempted.

CONCLUSION

For all the foregoing reasons, the petition for a writ of

certiorari should be granted.

Respectfully submitted,

WILLIAM H. SORRELL

Attorney General

State of Vermont

JULY 2005

REBECCA M. ELLIS

JEANNIE ELIAS

TIMOTHY B. TOMASI

KEVIN O. LESKE*

Assistant Attorneys General

109 State Street

Montpelier, VT 05609

(802) 828-3171

Counsel for State of Vermont,

Agency of Natural Resources,

and William H. Sorrell, as

Attorney General of Vermont

(*Counsel of Record)

APPENDIX

United States Court of Appeals,

Second Circuit.

GREEN MOUNTAIN RAILROAD CORPORATION,

Plaintiff-Appellee,

Vv.

State of VERMONT, Vermont Agency of Natural

Resources and William H. Sorrell, as Attorney General of

the State of Vermont,

Deferdants-Appellants.

No. 04-0366-CV.

Argued: Dec. 6, 2004.

Decided: April 14, 2005.

*639 Jeanne Elias, Assistant Attorney General for the

State of Vermont, (Rebecca M. Ellis, Bridget Asay,

Assistant Attorneys General, on the brief) Montpelier,

VT, for Defendants-Appellants.

Robert B. Luce, (Eric A. Poehlmann, on the brief)

Downs Rachlin Martin PLLC, Burlington, VT, for

Plaintiff-Appellee.

Evelyn G. Kitay (Ellen D. Hanson, General Counsel, on

the brief) Washington, D.C. for Amicus Curiae Surface

Transportation Board.

Robert M. Jenkins III, David M. Gossett, Mayer Brown

Rowe & Maw LLP, Washington D.C.; Louis P. Warchot,

Dennis J. Starks, Association of American Railroads,

Washington, D.C.; George A. Aspatore, Sarah J. Bailiff,

Paul Guthrie, Thomas J. Healey, Paul R. Hitchcock,

Theodore K. Kalick, Robert T. Opal, Louise Anne Rinn,

Peter J. Shudtz, Sidney L. Strickland, Jr., of Counsel, on

submission, for Amicus Curiae Association of American

Railroads.

Before: CARDAMONE, JACOBS, CABRANES, Circuit

Judges.

JACOBS, Circuit Judge.

Green Mountain ~ Railroad Corporation ("Green

Mountain") proposed to build transloading facilities on its

property in Vermont, and brings this action seeking a

declaration that Vermont's environmental land use

statute, Act 250, Vt. Stat. Ann. Tit. 10, § 6001 et seq., is

for that purpose preempted by the Interstate Commerce

Commission Termination Act of 1995, 49 U.S.C. § 10101

et seg. (the "Termination Act"). The State of Vermont, its

Agency of Natural Resources and the.State Attorney

General appeal from a judgment entered in the United

States District Court for the District of Vermont (Murtha,

J.), granting Green Mountain's motion for summary

judgment on the preemption ground. Green Mountain

R.R. Corp. v. Vermont, No. 01-CV-181, 2003 U.S. Dist.

LEXIS 23774, at *2-3 (D.Vt. Dec. 15, 2003).

The Termination Act expressly preempts "remedies

provided under Federal or State law" and vests with the

Surface Transportation Board (the "Transportation

Board"), a federal agency, exclusive jurisdiction over

"transportation by rail carriers" and "the construction ...

of ... facilities ...." 49 U.S.C. § 10501(b). The term

“transportation” includes a “warehouse ... yard, property,

facility, instrumentality, or equipment of any kind related

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

rail." 49 U.S.C. § 10102.

"We review a district court's grant of summary

judgment de novo." See Young v. County of Fulton, 160

F.3d 899, 902 (2d Cir.1998). In so doing, we construe the

evidence in the light most favorable to the State as the

non-moving party, and draw all reasonable inferences in

its favor. See *640 Anderson v. Liberty Lobby, Inc., 477

U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). For

the reasons that follow, we affirm.

Green Mountain is a "rail carrier" as defined by the

Termination Act, 49 U.S.C. § 10102(5), with 52 miles of

track between Rutland, Vermont and Cold River, New

Hampshire. The line serves transhipping industries, 1.e.,

industries that rely on trucks to transport goods from the

rail site for processing elsewhere. Along its rail line in

Rockingham, Vermont, Green Mountain owns a 66-acre

tract known as “Riverside,” bounded by the Connecticut

River on the east. Portions of Riverside are wetlands

unusable for development.

Green Mountain proposed to build facilities at

Riverside to serve the following operations: (1) unloading

bulk salt arriving by rail for local distribution by truck or

for temporary storage in a shed pending distribution; (2)

temporary storage and transport of "non-bulk goods, such

as steel pipe[s]"; and (3) unloading bulk cement arriving

by rail for storage in silos and eventual transport by

truck. Some of these operations are conducted within a

100-foot strip alongside the Green Mountain tracks and

the Connecticut River.

Vermont argues that construction of the transloading

facilities is subject to Act 250, an environmental land use

statute that mandates preconstruction permits for land

development. Permit applications are filed with one of

nine District Commissions that evaluate environmental

impact using ten criteria, including: "undue water or air

pollution,” Vt. Stat. Ann. Tit. 10, § 6086(a)(1), and "undue

adverse effect on the scenic or natural beauty of the area,

aesthetics, historic sites or rare and irreplaceable natural

areas,’ Vt. Stat. Ann. Tit. 10, § 6086(a)(8). The District

Commission's decisions are appealable to Vermont's

Environmental Board; decisions of the Environmental

Board are appealable directly to the Vermont Supreme

Court. Vt. Stat. Ann. Tit. 10, § 6089(a) & (b). Most permit

decisions under Act 250 are issued within 60 days from

the filing of an application. [FN1]

FN1. Green Mountain contends that this expedited

schedule (as cited by the State) applies only to

"minor" amendments to existing permits, whereas

its proposal is likely to be treated as a “major”

application. State statistics collected from January

1998 through December 2002 indicate that the

average timetable for "major" permit applications

was 303.39 days. More than half of landowner

appeals of District Commission decisions to the

Vermont Environmental board took more than nine

months in 2001.

In 1997, PMI Lumber leased part of Riverside and

applied for an Act 250 construction permit. PMI Lumber

proposed to satisfy environmental criteria by a 75-foot

buffer zone along the-river.—The Vermont Agency of

Natural Resources recommended that the buffer be

increased to 100 feet.

A local permitting agency subsequently issued Land

Use Permit # 2W0038-2 (the "dash-2 permit") in the

names of PMI Lumber and Green Mountain. Condition

14 required maintenance of a 100-foot buffer zone. When

PMI Lumber ceased operations at the site, Green

Mountain used it for its transloading activities. Green

Mountain encroached on the buffer zone with a settling

pond, storage of materials, and vehicles.

In Spring 1998, Green Mountain sought to amend the

dash-2 permit to allow construction of a 100-foot by 275-

foot salt storage shed. In January 1999, the State

granted Land Use Permit # 2W0038-3 (the "dash-3

permit"), which stipulated conditions, including that the

shed be rectangular, and either brown or dark green.

Several months later, in October 1999, Green Mountain

applied for another permit *641 amendment (the "dash-

3B permit" application) to modify the size, color and

location of the salt shed. Although no such permit issued,

Green Mountain started construction of its modified salt

shed in November 1999.

In January 2000, the State issued a notice of violation

of the dash-2 permit, citing (among other things) storage

of materials within the 100-foot buffer zone. The State

issued a second notice of violation in February 2000,

alleging construction of the salt shed without the dash-3B

permit.

In Spring 2000, the State conducted hearings on Green

Mountain's dash-3B salt shed permit application. Green

Mountain objected orally and in writing that the State

Environmental Commission lacked jurisdiction to

adjudicate the pending permit application because the

Termination Act, which expressly preempts "remedies

provided under Federal or State law" and vests with the

Transportation Board, a federal agency, exclusive

jurisdiction over "transportation by rail carriers," 49

U.S.C. § 10501, preempts Act 250.

_Faced with the threatened enforcement of Act 250,

Green Mountain filed this suit in June 2001, seeking a

declaration that the Termination Act preempts Act 250.

Simultaneously, Green Mountain requested a declaratory

order to the same effect from the Transportation Board.

The Transportation Board denied the declaratory relief

in May 2002, deferring to the district court. In the

meantime, the State moved to dismiss the district court

action. While that motion was pending, the State issued

the dash-3B permit in August 2001. A month later, the

district court granted the State's motion to dismiss Green

Mountain's facial challenge to the applicability of Act 250,

but ordered “further development of the record" to

determine whether the State's “effort to enforce one or

more conditions of the [dash-2] Permit violates the

[Termination Act] in this particular case." Green

Mountain R.R., No. 1: 01CV181, 2003 U.S. Dist. LEXIS

23774, at *2 (quoting an earlier ruling) (internal

quotation marks omitted).

Following discovery, the parties cross-moved for

summary judgment. On December 15, 2003, the court

granted Green Mountain's motion (and denied the State's

motion) on the ground that “the state's efforts to enforce

Act 250 in this case are preempted under the

[Termination Act]." Id.

The question presented is whether the Termination Act

preempts Vermont's Act 250 with respect to the

underlying permit controversy. State law is preempted by

- federal law when: (1) the preemptive intent is " ‘explicitly

stated in [a federal] statute's language or implicitly

contained in its structure and purpose’ "; (2) state law

“actually conflicts with federal law"; or (3) “federal law so

thoroughly occupies a legislative field ‘as to make

reasonable the inference that Congress left no room for

the States to supplement it.' “ Cipollone v. Liggett Group,

Inc., 505 U.S. 504, 516, 112 S.Ct. 2608, 120 L.Ed.2d 407

(1992) (quoting Jones v. Rath Packing Co., 430 U.S. 519,

525, 97 S.Ct. 1805, 51 L.Ed.2d 604 (1977), and Fidelity

Fed. Sav. & Loan Ass'n v. De la Cuesta, 458 U.S. 141,

153, -102 S.Ct. 3014, 73 L.Ed.2d 664 (1982)). The

"ultimate touch-stone" of preemption analysis is

congressional intent: "Congress' intent, of course,

primarily is discerned from the language of the pre- -

emption statute and the statutory framework

surrounding it." Medtronic, Inc. v. Lohr, 518 U.S. 470,

485-86, 116 S.Ct. 2240, 135 L.Ed.2d 700 (1996) (internal

quotation marks omitted).

The Termination Act contains an express. preemption

clause:

Except as otherwise provided in this part, the

remedies provided under this *642 part with respect

to regulation of rail transportation are exclusive and

preempt the remedies provided under Federal or

State law.

49 U.S.C. § 10501(b). The Termination Act Section

10501 vests the Transportation Board with exclusive

jurisdiction over “transportation by rail carriers" and "the

construction, acquisition, operation, abandonment, or

discontinuance of spur, industrial, team, switching, or

side tracks, or facilities, even if the tracks are located, or

intended to be located, entirely in one State." 49 U.S.C. §

10501(b). “Transportation” is expansively defined to

include: “a locomotive, car, vehicle, vessel, warehouse ...

yard, property, facility, instrumentality, or equipment of

any kind related to the movement of passengers or

property, or both, by rail." 49 U.S.C. § 10102(9).

Certainly, the plain language grants the Transportation

Board wide authority over the transloading and storage

facilities undertaken by Green Mountain. See City of

Auburn v. United States, 154 F.3d 1025, 1029-31 (Sth

Cir.1998); see also R.R. Ventures, Inc. v. STB, 299 F.3d

523, 530 (6th Cir.2002) ("{Iif a railroad line falis within its

jurisdiction, the [Transportation Board's) authority over

abandonment is both exclusive and plenary.").

Other federal courts recognize that the Termination

Act preempts most pre-construction permit requirements

imposed by states and localities. See, e.g., City of Auburn,

154 F.3d at 1030-31 (affirming the Transportation Board's

finding that the Termination Act preempted a local

environmental permitting requirement); Soo Line R.R.

Co. v. City of Minneapolis, 38 F.Supp.2d 1096, 1101

(D.Minn.1998) ("The Court concludes that the City's

demolition permitting process upon which Defendants

have relied to prevent [the railroad] from demolishing five

buildings ... that are related to the movement of property

by rail is expressly preempted by the [Termination Act].");

CSX Transp., Inc. v. Ga. Pub. Serv. Comm'n, 944 F.Supp.

1573, 1585 (N.D.Ga.1996) (finding state regulation of

railroad agency closing preempted by the Termination

Act).

For example, the Ninth Circuit concluded, in affirming

a Transportation Board decision, that the Termination

Act preempted state and local environmental regulations

requiring a railway to submit to a permitting process

before making repairs and improvements on its track line.

City of Auburn, 154 F.3d at 1027-28, 1030-31.

"[C)ongressional intent is clear, and the preemption of rail

activity is a valid exercise of congressional power under

the Commerce Clause." Jd. at 1031; see also Ga. Pub.

Serv. Comm'n, 944 F.Supp. at 1580-82.

The Transportation Board has likewise ruled that

"state and local permitting or preclearance requirements

(including environmental requirements) are preempted

because by their nature they unduly interfere with

interstate commerce." Joint Petition for and Declaratory

Order--Boston and Maine Corp. and Town of Ayer, MA,

STB Finance Docket No. 33971, 2001 WL 458685, at *5

(S.T.B. Apr. 30, 2001), affd, Boston & Maine Corp. v.

Town of Ayer, 191 F.Supp.2d 257 (D.Mass.2002)(affirming

the Transportation Board's determination that town's

pre-construction permit requirement was preempted by

the Termination Act); see also Green Mountain R.R. Corp.,

Petition for Declaratory Order, STB Finance Docket No.

34052, 2002 WL 1058001 (S.T.B: May 24, 2002). As the

agency authorized by Congress to administer the

Termination Act, the Transportation Board is " ‘uniquely

qualified to determine whether state law ... should be

preempted' " by the Termination Act. [FN2] *643 Ga.

Pub. Serv. Comm'n, 944 F.Supp. at 1584 (quoting

Medtronic, 518 U.S. at 496, 116 S.Ct. 2240).

FN2. Whether the Transportation Board is entitled

to deference under Chevron U.S.A., Inc. v. Natural -

Res. Def. Council, Inc., 467 U.S. 837, 843-44, 104

S.Ct. 2778, 81 L.Ed.2d 694 (1984) is not material to

the Court's decision. We therefore decline to reach

the issue.

Like the regulations and ordinances consistently struck

down by federal courts and by the Transportation Board,

Act 250 mandates a pre-construction permit. Act 250's

pre-construction permit requirement is preempted for two

reasons: (i) it "unduly interfere[s) with interstate

commerce by giving the local body the ability to deny the

carrier the right to construct facilities or conduct

operations," Town of Ayer, STB Finance Docket No.

33971, 2001 WL 458685, at *5; and (ii‘ it can be time-

consuming, allowing a local body to delay construction of

10a

railroad facilities almost indefinitely. Green Mountain

R.R. Corp., 2003 U.S. Dist. LEXIS 23774, at *13.

Nevertheless, as the district court observed, “not all

state and local regulations are preempted [by the

Termination Act]; local bodies retain certain police

powers which protect public health and safety." Jd. It

therefore appears that states and towns may exercise

traditional police powers over the development of railroad

property, at least to the extent that the regulations

protect public health and safety, are settled and defined,

can be obeyed with reasonable certainty, entail no

extended or open-ended delays, and can be approved (or

rejected) without the exercise of discretion on subjective

questions. Electrical, plumbing and fire codes, direct

environmental regulations enacted for the protection of

the public health and safety, and other generally

applicable, non-discriminatory regulations and permit

requirements would seem to withstand preemption. Cf.

Vill. of Ridgefield Park v. New York, Susquehanna & W.

Ry. Corp., 163 N.J. 446, 750 A.2d 57, 64 (2000) (noting the

Transportation Board's position that: (1) "while state and

local government entities ... retain certain police powers

and may apply non-discriminatory regulation to protect

public health and safety, their actions must not have the

effect of foreclosing or restricting the railroad's ability to

conduct its operations or otherwise unreasonably

burdening interstate commerce"; and (2) “railroads are

exempt from the traditional permitting process but not ...

from most other generally applicable laws").

The legislative history of the Termination Act supports

this approach: "Although States retain the police powers

reserved by the Constitution, the Federal scheme of

economic regulation and deregulation is intended to

lla

address and encompass all such regulation and to be

completely exclusive." See H.R.Rep. No. 104-311, at 96

(1995), reprinted in 1995 U.S.C.C.A.N. 793, 808. We need

not draw a line that divides local regulations between

those that are preempted and those that are not, because

in this case preemption is clear: the railroad is restrained

from development until a permit is issued; the

requirements for the permit are not set forth in any

schedule or regulation that the railroad can consult in

order to assure compliance; and the issuance of the permit

awaits and depends upon the discretionary rulings of a

state or local agency.

Ill

The State's primary appellate argument is that Act 250

cannot be preempted on its face unless there is “no

possible set of conditions that [the permitting authority]

could place on its permit that would not conflict with

federal law." See Cal. Coastal Comm'n v. Granite Rock

Co., 480 U.S. 572, 580, 107 S.Ct. 1419, 94 L.Ed.2d 577

(1987) (applying facial challenge standard in a statutory

preemption case). We disagree. *644 No doubt, there

could be permit applications affecting railroad facilities

that could be promptly approved without the slightest

imposition on rail operations. However, what is

preempted here is the permitting process itself, not the

length or outcome of that process in particular cases. Cf.

Chamber of Commerce v. Lockyer, 364 F.3d 1154, 1169

(9th Cir.2004) (noting that in certain situations federal

law preempts "the act of regulation itself, net the effect of

the state regulation in a specific factual situation”).

California Coastal Commission is easily distinguished on

that basis, as well as on the absence of a preemption

provision. [FN3]

12a

FN3. In California Coastal Commission, a mining

company sought to enjoin a state agency from

requiring the company to obtain a permit to mine on

federal land. The Supreme Court ruled that in the

federal mining statutes, “Congress specifically

disclaimed any intention to pre-empt pre-existing

state authority” and that the federal mining statute

"does not automatically pre-empt all state

regulation of activities on federal lands." 480 U.S.

at 593, 107 S.Ct. 1419. The federal mining statutes

required that land-use plans of the federal agency

charged with administering the federal mining

statutes "provide for compliance with" existing state

and federal environmental laws. Jd. at 587, 107

S.Ct. 1419 (internal quotation marks omitted).

Because the mining company sought injunctive

relief “before discovering what conditions the

Coastal Commission would have placed on the

permit," the Court concluded that the mining

company's "case must stand or fal] on the question

whether any possible set of conditions attached to

the Coastal Commission's permit requirement

would be pre-empted." Jd. at 588, 107 S.Ct. 1419.

Vermont failed to raise explicitly this facial

preemption argument with the district court. As a

result, the district court's opinion does not discuss -

California Coastal Commission. Generally, we do

not consider an issue raised for the first time on

appeal. See Silverman v. Mut. Benefit Life Ins. Co.,

138 F.3d 98, 103 (2d Cir.1998). However, Vermont

points out that, although it never cited to California

Coastal Commission in its submissions to the

district court, it preserved this issue for appellate

13 a

review by arguing, in its August 2001 reply to Green

Mountain's oppusition to its motion to dismiss, that

to succeed on its facial preemption claim, Green

Mountain was obligated to show “that there are no

circumstances under which Act 250 could be found

constitutional," and did not press the argument

thereafter because it believed that the district court

adopted the State's positiori on facial preemption

when it stated, granting in part the State's motion

to dismiss: “to the extent the [State] ask[s] the

Court to dismiss Green Mountain's claim that the

[Termination Act] preempts Act 250 under all

circumstances, the motion is granted."

"The facial/as-applied distinction would be relevant

only if we might find some applications of the statute

preempted and others not.... [WJhere a state statute is in

direct conflict" with a federal statute “or one of its

processes,” the “focus is the act of regulation itself, not the

effect of the state regulation in a specific factual

situation.” Lockyer, 364 F.3d at 1169.

The State argues that Act 250 withstands preemption

because it is an environmental, rather than economic,

regulation. The distinction is not useful. "[I]f local

authorities have the ability to impose ‘environmental’

permitting regulations on the railroad, such power will in

fact amount to ‘economic regulation’ if the carrier is

prevented from constructing, acquiring, operating,

abandoning, or discontinuing a line." City of Auburn, 154

F.3d at 1031. Green Mountain serves industries that rely

on trucks to transport goods from the rail site for

processing; so the proposed transloading and storage

facilities are integral to the railroad's operation and are

l4a

easily encompassed within the Transportation Board's

exclusive jurisdiction over "rail transportation."

Notwithstanding the environmental goals of the

legislation, Act 250's permitting process "necesserily

interfere[s]" with Green Mountain's “ability to construct

facilities and conduct economic activities." Green *645 —

Mountain R.R. Corp., 2003 U.S. Dist. LEXIS 23774, at

*13.

The State argues that Ace Auto Body & Towing, Ltd. v.

City of New York, 171 F.3d 765 (2d Cir.1999), compels a

different conclusion. In Ace Auto Body, this Court held

that the section of the Termination Act relating to motor

carrier operations (49 U.S.C. § 14501) did not preempt

New York's police power to suppress the practice of

“chasing,” whereby tow trucks compete for business by

racing ("often recklessly") to accidents broadcast on police

radio frequencies. Ace Auto Body, 171 F.3d at 769, 779.

The State's reliance on Ace Auto Body is misplaced. The

federal preemption language at issue in that case

provides that a state or municipality "may not enact or

enforce a law ... related to a price, route, or service of any

motor carrier ... with respect to the transportation of

property." Jd. at 770 (quoting 49 U.S.C. § 14501(c\(1)).

The Court held that the "related to” phrase focused the

preemption on economic regulations and reflected

congressional intent to leave the state's historic police

powers undisturbed where “only incidental economic

burdens can be discerned." Id. at 774. We concluded that

the chasing regulations were “sufficiently safety-oriented"

while having no more than an incidental economic effect

on the industry. Id.

15a

In contrast to the federal statute at issue in Ace Auto

Body, the plain language of Section 10501 reflects clear

congressional intent to preempt state and local regulation

of integral rail facilities. "It is difficult to imagine a

broader statement of Congress's intent to preempt state

regulatory authority over railroad operations." Ga. Pub.

Serv. Comm'n, 944 F.Supp. at 1581 (holding that the

Termination Act preempted state regulation of railroad

agency closing). We therefore need not conduct a fact-

based inquiry weighing the economic impact of Act 250's

permitting process upon Green Mountain; based on the

facts before the Court, the State's effort to regulate rail

transportation through the Act 250 pre-permitting

process is necessarily preempted by the Termination Act.

CONCLUSION

For the foregoing reasons, we affirm the judgment of

the district court.

404 F.3d 638

16a

UNITED STATES DISTRICT COURT

- DISTRICT OF VERMONT

GREEN MOUNTAIN RAILROAD

CORPORATION

STATE OF VERMONT, VERMONT AGENCY OF

NATURAL RESOURCES, AND WILLIAM H. SORRELL,

as Attorney General of the State of Vermont

RULING ON CROSS MOTIONS FOR

S x ME

(Papers 52 and 63)

This case involves the extent to which, consistent with

the Interstate Commerce Commission Termination Act of

1995 (hereinafter "ICCTA"), the State of Vermont and its

Agency of Natural Resources (collectively referred to as

"defendants" or the "state") may apply its environmental

regulation statute, Act 250, to the Green Mountain

Railroad Corporation's (hereinafter "Green Mountain")

use and expansion of its facilities in Rockingham. The

state argues the railroad’'s activities must comply with

Act 250 and all permits issued thereunder. Green

Mountain's position is any application of Act 250 is

preempted by the ICCTA.

On July 17, 2001, the state moved to dismiss the

plaintiff's facial challenge to the applicability of Act 250

for failure to state a claim upon which relief can be

granted. See Defendants’ Motion to Dismiss or, in the

Alternative, to Abstain (Paper 9) at 1. Finding this

17a

preemption issue “requires case-by-case analysis," the

Court held: "[T]o the extent the defendants ask the Court

to dismiss Green Mountain's claim that the ICCTA

preempts Act 250 under ail circumstances, the motion is

granted.. | However, whether the defendants’ effort to

enforce one or more conditions in the 1997 Permit violates

the ICCTA in this particular case requires further

development ofthe record . . ." Ruling on Pending

Motions (Paper 21) at 8, 10. ;

Having provided the Court with a record supplemented

by affidavits and discovery, the parties have filed cross

motions for summary judgment. Upon review of the

undisputed, material facts, the Court finds the state's.

efforts to enforce Act 250 in this case are preempted

under the ICCTA. Therefore, for the reasons discussed

below, Green Mountain's Motion for Summary Judgment

is GRANTED, and the state defendants' Motion for

Summary Judgment is DENIED.

I. Background

On a motion for summary judgment, the moving party

has the initial burden of informing the Court of the basis

for its motion and of identifying the absence of any

genuine issue of material fact. See, e.g., Chambers v.

TRM Copy Centers,, Corp., 43 F.3d 29, 36 (2d Cir. 1994).

Where, as here, a motion for summary judgment is

supported by affidavits or other documentary evidence,

the party opposing that motion must set forth specific

facts showing there is a genuine, material issue for trial.

See Rexnord Holdings, Inc. v. Bidermann, 21 F.3d 522,

526 (2d Cir. 1994). Only disputes over facts which might

affect the outcome of the suit under the governing law

preclude the entry of summary judgment. See Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

18a

Upon review of the record, the Court finds the following

material facts undisputed. Green Mountain has 52 miles

of track between Rutland, Vermont and Cold River, New

Hampshire. See generally Verified Statement of Jerome

Hebda (hereinafter "Hebda Statement"Xappended to

Paper 65 as Ex. A). It primarily operates as an interstate

freight railroad, although it derives approximately 10

percent of its revenue from passengers. See Hebda

Statement at para. 3.

About six years ago, in an attempt to expand its

business and increase profitability, Green Mountain

acquired 62 acres of land to add to its existing site in

Rockingham known as "Riverside." Riverside now is

approximately 66 acres and is bounded on the west by a

state highway and Green Mountain's railroad line and on

the east by the Connecticut River. Green Mountain uses

Riverside as a yard for transloading freight between

trains and trucks and for storing freight and railroad

equipment. See, e.g., Hebda Statement at paras. 4, 8.

The Riverside site is within the jurisdiction of

Vermont's District #2 Environmental Commission

(hereinafter the “District 2 Commission"). On November

12, 1997, Green Mountain and its then tenant, PMI

Lumber Transfer, Inc. (hereinafter "PMI"), obtained from

the District 2 Commission Permit #2W0038-2 (hereinafter

the "Dash 2 Permit"). See Dash 2 Permit (appended to

Paper 55, Affidavit of April Hensel, as Ex. C). The Dash 2

Permit authorized the construction of a 20-foot by 30-foot

office building and the operation of a forest products

distribution yard. See Dash 2 Permit at 1. It also

contained 27 conditions, including: "The permittees shall

maintain a 100-foot undisturbed, naturally vegetated

buffer strip with no mowing or cutting of vegetation

19a

between the top of the bank of the Connecticut River and

any disturbed areas." Dash 2 Permit at para. 14. PMI left

Riverside in 1998, and Green Mountain continued using

the site for transloading activities. See Hebda Statement

at para. 8.

On January 13, 1999, the District 2 Environmental

Commission issued Green Mountain Permit #2W0038-3

(hereinafter the "Dash 3 Permit"), which authorized the

railroad to construct a salt storage shed, conveyor pit, rail

siding and truck scale at Riverside. See Dash 3 Permit

(appended to Paper 55, Affidavit of April Hensel, as Ex.

E) at 1. The Dash 3 Permit contained 24 conditions,

including that the storage shed be rectangular, next to

the rail, and either brown or dark green. See Dash 3

Permit at para. 19.

Green Mountain eventually abandoned the Dash 3

Permit project as originally proposed and, on October 14,

1999, submitted another permit application, which the

District 2 Commission delineated permit application

#2W0038-3B (hereinafter the "Dash 3B permit"). See

Dash 3B Permit Application (appended to Paper 55,

Affidavit of April Hensel, as Ex. F). The Dash 3B Permit

Application included a proposal for a new salt siding

project and a different salt shed to be built in a different

location from the one first proposed in the Dash 3 Permit.

Although no final "Dash 3B Permit" was issued, Green

Mountain built its proposed salt transload and storage

shed.

On January 24, 2000, the District 2 Commission issued

Green Mountain a notice of alleged violation of several

conditions of the Dash 2 Permit, primarily relating to the

failure to maintain the 100-foot buffer zone. Specifically,

the state asserts the railroad has conducted prohibited

20a

activities in the buffer zone, including storing brick,

lumber and train parts, permitting the entry of vehicles

in the zone, and arranging for the installation of utility

poles. See Notice of Alleged Violation (appended to Paper

55, Affidavit of April Hensel, as Ex. G). Several weeks

later, on February 8, 2000, it issued a notice of violation

to Green Mountain for its construction of the "Dash 3B"

salt shed without a permit. See Notice of Alleged

Violation (appended to Paper 55, Affidavit of April

Hensel, as Ex. H). |

Anticipating an unfavorable outcome in _ state

administrative proceedings, in October 2001, and again in

February 2002, Green Mountain requested a declaratory

order from the Surface Transportation Board (hereinafter

"STB"). Through those requests, it sought permission to

continue construction at Riverside to permit it to

transload bulk cement and otherwise expand its

operations. According to Green Mountain, its proposed

facility requires construction of a spur track within the

100-foot buffer zone. Citing this Court's enforcement

authority and its intent to resolve these issues without

referring the matter, the STB declined to issue the

requested declaratory order. See In re Green Mountain,

Railroad Corp., STB Finance Docket No. 34052, 2002 WL

1058001 (ICC)(May 24, 2002) (appended io Paper 65 at

Ex. S).

In December 2002, Green Mountain requested a

declaratory ruling from Vermont's District Environmental

Coordinator as to whether its proposed construction of

cement silos and a utility building requires an

amendment to its existing Act 250 permit or whether the

project falls within a statutory exception to the permit

requirement. The District Coordinator determined an

2la

amendment to the permit was required, and Green

Mountain appealed the jurisdictional opinion to the

Environmental Board. The Environmental Board held a

hearing on Green Mountain's appeal on June 25, 2003,

and ultimately affirmed the District Coordinator's

advisory opinion. See Declaratory Ruling #422 (appended

to Paper 65 as Ex. I) at 8, sections B and C.

According to Green Mountain's president, Jerome

Hebda, the expansion of Riverside that has thus far been

completed has been "modestly successful." See Hebda

Affidavit at para. 5 (In 1997, Green Mountain originated

and terminated 416 carloads; by 2000, that number had

nearly doubled). Nevertheless, Mr. Hebda maintains the

state's Act 250 requirements are economically

detrimental to the railroad's operations. He explains:

[T]he circumstances now faced by GMRC [Green

Mountain] are not the same as those we faced in

1997, when PMI and GMRC jointly sought Act 250

authority to construct an office building and forest

' products distribution yard at Riverside. The

expansion of GMRC's Riverside business since that

time requires that GMRC utilize its property more

extensively than appeared to be necessary in 1997.

Ground storage of goods that have arrived by rail

and await removal by truck, or which arrive by

truck and await loading into rail cars, is an

essential part of our business and requires more

land as the business grows. Our customers have

requested rate quotations from GMRC that include

transloading and temporary storage of goods

between rail and truck shipments, and GMRC has

provided such rates in order to attract and retain

the business. . . . Moreover, storage areas must be

22 4

interspersed with passageways for vehicular access

and must be situated as closely as possible to rail

tracks in order to minimize the distance and time

consumed in the removal of shipments from railcars

and the loading of shipments into railcars... .

Electric service is needed at the site to provide

electric power and illumination during short days.

Depriving GMRC of the use of all land at Riverside

within 100 feet of the Connecticut River would not

only bring business growth to a standstill, but limit

GMRC's ability to handle existing business.

Hebda Statement at para. 22.

II. Discussion

A. Act 250 as a Preclearance Statute

Act 250 is Vermont's land use statute. It was enacted to

protect the state's environmental resources and to

preserve its public lands. See Southview Assoc. v.

Bongartz, 980 F.2d 84, 89 (2d Cir. 1992). The Act

establishes a statewide pertitting process for various

forms of land development. Sce 10 V.S.A. § 6001-6108.

When implementing Act 250, the state attempts to

coordinate maximum economic development with

minimal environmental impact. As applied, however, Act

250 establishes a preclearance permitting process; a

development subject to Act 250 cannot proceed until it

has received state approval and an Act 250 permit. See In

re Spring Brook Farm Found., Inc., 164 Vt. 282, 285

(1995)("Vermont's land use law, Act 250, requires a

permit prior to the commencement of any development.”)

When Green Mountain and PMI, a _ non-railroad

business, jointly operated at Riverside, the site arguably

had been partially subject to Act 250 regulation, as least

so far as PMI's activities were concerned. Now, as a rail

23 a

carrier operating alone at Riverside, Green Mountain's

activities are subject to oversight under the ICCTA, 49

U.S.C. §§ 10101 et seq., as administered by the STB, 49

U.S.C. § 10501.

The plaintiff maintains all conditions included in

permits issued pursuant to Act 250 now are preempted by

the ICCTA, and the state cannot enforce its permits or

require a new permit for the proposed Riverside

expansion. "State law is preempted by federal law only

when 1) a federal statute expressly preempts state action,

2) state law is in direct conflict with federal law, or 3)

federal regulation is pervasive in the field." Omva, Inc. v.

Vermont, 80 F. Supp. 2d 211, 217 (D. Vt. 2000) (citing

Cipollone v. Ligaett Group, Inc.,, 505 U.S. 504, 516

(1992)).

The ICCTA contains the following preemption provision:

The jurisdiction of the [STB] over

(1) transportation by rail carriers, and the remedies

provided in this part with respect to rates,

classifications, rules (including car_ service,

interchange, and other operating rules), practices,

routes, services, and facilities of such carriers; and

(2) the construction, acquisition, operation,

abandonment, or discontinuance of spur, industrial,

team, switching, or side tracks, or facilities, even if

the tracks are located, or intended to be located,

entirely in one State,

is exclusive. Except as otherwise provided in this

part, the remedies provided under this part with

respect to regulation of rail transportation are

exclusive and preempt the remedies provided under

Federal or State law.

49 U.S.C. § 10501(b).

By this provision, Congress granted the STB broadened

preemptive jurisdiction over facilities that are an integral

part of railroad transportation. See City of Auburn v.

United States, 154 F.3d 1025, 1029-31 (9th Cir. 1998); see

also CSX Trans. Corp. v. Georgia Pub. Serv. Comm'n, 944

F. Supp. 1573, 1585 (N.D. Ga. 1996)(ICCTA preempts

state regulatory authority over rail agency closings).

When addressing the preemptive scope of 49 U.S.C. §

10501(b), courts have found most zoning ordinances and

local land use permit requirements are preempted. See,

e.q., Railroad Ventures, Inc. v. STB, 299 F.3d 523, 530

(6th Cir. 2002)"if a railroad line falls within its

jurisdiction, the STB's authority over abandonment is

both exclusive and plenary"); CSX Transp., Inc. v. City of

- Plymouth, 92 F. Supp. 2d 643, 659 (E.D. Mich. 2000)"if

there is to be a limit on the amount of time that a train is

preempted because they necessarily interfere with a rail

permitted to block a crossing, it must come from the

federal government”), affd, 283 F.3d 812 (6th Cir. 2002);

see also Guckenberg v. Wisconsin Cent. Ltd., 178 F. Supp.

2d 954, 959 (E.D. Wis. 2001) (common law nuisance claim

is preempted where suit “seeks to proscribe activity ... on

[railway's] side track").

Specifically, courts have noted that preclearance

requirements, including environmental requirements, are

carrier's ability to construct facilities and conduct

economic activities. "To the extent the state law is viewed

as having the effect of requiring the railroad to undergo

substantial capital improvements, [it] is preempted by the

Interstate Commerce Commissicn Termination Act.” CSX

Transp., 92 F. Supp. 2d at 658.

25a

Nevertheless, not all state and local regulations are

preempted; local bodies retain certain police powers which

protect public health and safety. See Dakota, Minnesota

& Eastern R.R. Corp. v. South Dakota, 236 F. Supp. 2d

989, 1011 (D.S.D. 2002) (state eminent domain statute

which requires railroad to provide free easement to utility

companies is not preempted by ICCTA); Laviqne v. CXS

Transp., Inc:, 2002 WL 1424808 (Mich. App. 2002)

(affirming trial court's granting-of an easement by

necessity over tracks for access to plaintiff's property). For

example, the Vermont Supreme Court has found certain

City of Burlington zoning ordinances are not preempted

by the ICCTA, including "control activities such as

routing of trucks leaving the facility," and “vonditions

designed to avert potential contamination from the salt

shed" because such regulations do not interfere with

railroad operations, but rather address matters within a

municipality's traditional police pewers. See In re

Vermont Ry., 171 Vt. 496 (2000). The parameters of

ICCTA preemption have been elucidated in some STB

decisions as well As the agency charged with

administering the ICCTA, the STB's interpretation of the

statute and its preemptive reach is entitled to

consideration. See Chevron U.S.A., Inc. v. Natural Res.

Def. Council, Inc., 467 U.S. 837, 843-44 (1984); In re

Vermont Ry., 171 Vt. at 500.

In Joint Petition for Declaratory Order-Boston and

Maine Corp. and Town of Aver, STB Finance Docket No.

33971, 20C1 WL 458685 (ICC) at *5-6 (Apr. 30, 2001), the

STB provided guidance as to how 49 U.S.C. § 1051(b)

applies to state and local regulation of an existing facility.

In part, the STB opined:

26 a

Court and agency precedent interpreting the

statutory preemption provision have made it clear

that, under this broad preemption regime, state and

local regulation cannot be used to veto or

unreasonably interfere with railroad operations.

Thus, state and local permitting or preclearance

requirements (including environmental

requirements) are preempted because by their

nature they unduly interfere with interstate

commerce by giving the local body the ability to

deny the carrier the right to construct facilities or

conduct operations. . . .

This does not mean that all state and local

regulations that affect railroads are

preempted ... . [S]tate and local regulation is

permissible where it does not interfere with

interstate rail operations, and localities retain.

certain police powers to protect public health and

safety. For example, non-discriminatory

enforcement of state and local requirements such as

building and electrical codes generally are not

preempted .... While a locality cannot require

permits prior to construction, the courts have found

that a railroad can be required to notify the local

government “when it is undertaking an activity for

which another entity would require a permit” and to

furnish its site plan to the local government. .

Furthermore, a town may seek court enforcement of

voluntary agreements that the town had entered

into with a railroad, notwithstanding section

10501(b), because the preemption provisions should

not be used to shield the carrier from its own

commitments, and "voluntary agreements must be

27a

seen as reflecting the carrier's own determination

and admission that the agreements would not

unreasonably interfere with interstate commerce.” .

Finally, nothing in section 10501(b) is intended to |

interfere with the role of state and local agencies in

implementing Federal environmental statutes, such as

the Clean Air Act. . . . Thus, the lack of a specific

environmental remedy at the Board or under state and

local laws (as to construction projects such as this, over

which the Board lacks licensing power) does not mean

that there are no environmental remedies under other

Federal laws.

Of course, whether a particular Federal environmental

statute, local land use restriction, or other local regulation

is being applied so as to not unduly restrict the railroad

from conducting its operations, or unreasonably burden

interstate commerce, is a fact-bound question.

Accordingly, individual situations need to be reviewed

individually to determine the impact of the contemplated

action on interstate commerce and whether the statute or

regulation is being applied in a discriminatory manner, or

being used as a pretext for frustrating or preventing a

particular activity, in which case the application of the

statute or regulation would be preempted. (citations and

footnotes omitted).

Thus, local governments may require railroads such as

Green Mountain, in advance of construction, to “share

their plans with the community, when they are

undertaking an activity for which another entity would

require a permit... ." Id. at *7; see also 49 C.F.R. §

1105.1 et seq. (administrative rules which ensure the

STB's consideration of environmental and energy factors

28 a

under federal laws like NEPA). It is clear that, in cases

such as this one, they may not apply a law like Act 250 so

as to require pre-construction approval and permitting.

Such a procedure is preempted by the ICCTA. See Cities

of Auburn and Kent, Wa.-Petition for Declaratory Order-

Burlington Northern Railroad Co-Stampede Pass Line,

STB Finance Docket No. 33200, 1997 WL 362017

(ICC)(July 1, 1997) (state or local permitting process for

prior approval of project, even an environmental review

process, is preempted).14

B. The Salt Shed

The state, in part, contends Green Mountain built a salt

shed prior to obtaining an Act 250 permit and continues

to use the salt shed without a permit. See Defendants’

Reply Memorandum (Paper 66) at 13. This claim is

somewhat confusing in that the Dash 3 Permit authorizes

"the construction and operation of a 100-foot by 275-foot

salt storage shed, conveyor pit, rail siding and truck

scale." See Dash 3 Permit at 1. In any event, as discussed

supra, the state cannot order Green Mountain to obtain

an Act 250 permit prior to constructing a salt shed

because this action would operate as a prohibited

preclearance requirement.

The January 13, 1999 permit also provides, "[t]he

building shall be either brown or dark green in color to

mitigate the visual impact of its 300 [foot] length." Dash 3

Permit at para. 19. The Dash 3 Permit Application later

proposed the building would be an "“earthtone" or

“sandstone” color. See Dash 3B Application at criterion 8.

The state maintains the roof of the salt shed is "beige"

and does not comply with the permit's requirement of

being either "brown" or "dark green.” See Defendants'

Memorandum of Law (Paper 53) at 17 n.5.

29 a

At most, this appears to be a de minimis transgression.

Green Mountain argues that, to comply with the state's

"color demand," it “would essentially have to scrap the old

shed and construct a new one." Plaintiffs Memorandum

of Law (Paper 64) at 23. Any order requiring substantial

“renovation or destruction to the salt shed because of its —

color would obviously unduly interfere with rail

operations and thereby run afoul of the ICCTA. In any

event, assuming this "color" requirement is similar to a

non-discriminatorily-applied planning and zoning

requirement which the STB has suggested is within local

discretion, the Court concludes that the color "tan" is

sufficiently "brown" or "“earthtone" so as to be in

compliance with the Dash 3 Permit's requirement.

C. Planned Cement Silo and Spur Track

Green Mountain also has proposed improvements at

Riverside which include a rail siding, a new roadway, four

22foot-diameter silos to hold cement, ramps, and a 12' x

20' office and utility building. If operated as planned, the

cement cargo will arrive in hopper cars, be dumped into a

pit, moved by a conveyor belt into a silo, and then

dispensed from the silo to trucks for distribution.

According to Green Mountain, this project "requires

alterations to existing rail track, a truck scale, and

modification of vehicular access, and - like the salt shed

siding - will involve less than 10 acres of disturbed land."

See Paper 64 at 14.

The cement silos Green Mountain has proposed to

construct for use by a transloading customer will have a

500-ton capacity, the equivalent of five rail cars, and will

approach 100 feet in height. If necessary, the railroad will

employ sound barriers to diffuse undue noise. See Hebda

Statement at para. 14. The Green Mountain customer

30a

which plans to use these silos will generate approximately

$180,000 per year in revenue. See Hebda Statement at

para. 16. Green Mountain also explains that it plans

to construct a 1000 foot spur track to enhance commercial

flexibility for its customers. See Hebda Statement at para.

19.

"[WIhen section 10501(b) grants the STB exclusive

jurisdiction over ‘transportation by rail carriers’," it

logically includes the yard, property, facilities, and any

intermodal equipment used in connection with a railroad,

or related to the movement of passengers or property."

Soo Line R.R. Co. v. City of Minneapolis, 38 F. Supp. 2d

1096, 1099 (D. Minn. 1998). While the state has the right

to review these plans, it cannot, consistent with ICCTA

preemption, require Green Mountain to secure Act 250

permits before commencing construction.

C. The Buffer Strip

Condition 14 of the Dash 2 Permit requires Green

Mountain to maintain a 100-foot undisturbed, naturally

vegetated buffer strip with no mowing or cutting of

vegetation between the top of the bank of the Connecticut

River and any disturbed areas. This condition was

renewed in the Dash 3 Permit. It is undisputed that

Green Mountain's activities and construction have

disturbed portions of the strip.

According to the plaintiff, of the approximately 66 acres

at the Riverside site, about 31 acres are unusable

wetlands. Of the remaining 35 acres, the state-imposed

buffer zone consumes approximately 19 acres, thereby

severely restricting the railroad's ground storage capacity

and other usable land. Green Mountain also states that

its current use of the buffer zone to store materials is

necessary to carry out its rail activities. See Paper 65 at

3la

para. 20. According to Green Mountain, these facts

demonstrate the buffer zone's undue interference with its

rail operations. See Plaintiffs Reply (Paper 69) at 4 and

n.3.

It is undisputed that Riverside is located near the

Connecticut River, a valuable environmental and

recreational resource. According to the state, the buffer

zone protects the fish habitat, prevents erosion of the

stream bank, helps maintain water quality, and provides

an aesthetic benefit. Nevertheless, maintenance of this

buffer zone necessarily has an economic impact on Green

Mountain's ability to expand its business. Under similar

circumstances, both courts and the STB have determined

that state environmental regulations, however laudable,

are preempted under the ICCTA. See supra at Section IIA

Il. Conclusion

To the extent the state is applying Act 250 to Green

Mountain's plans as a preclearance permitting process, its

actions are preempted by the ICCTA. The state, however,

is not without remedies. It may require prior notification

of proposed projects and seek voluntary compliance with

applicable Act 250 standards. It may also have standing

to seek compliance with applicable federal laws, such as

the Clean Air Act and the Clean Water Act. See Joint

Petition, 2001 WL 458685 at *5 ("nothing in section

10501(b) is intended to interfere with the role of state and

local agencies in implementing Federal environmental

statutes .. .").

Green Mountain's Motion for Summary Judgment is

GRANTED. The state's Motion for Summary Judgment is

DENIED. SO ORDERED.

Dated at Brattleboro, Vermont, this 15 day of

December, 2003. :

32a

United States District Court-

District of Vermont

GREEN MOUNTAIN RAILROAD CORPORATION,

Plaintiff,

STATE OF VERMONT, VERMONT. AGENCY OF

NATURAL RESOURCES, and WILLIAM H. SORRELL,

as Attorney General of the State of Vermont,

Defendants.

JUDGMENT IN A CIVIL CASE

CASE.NUMBER: 1:01-CV-181cft

0 Jury Verdict. This action came before the Court for

trial by jury. The issues have been tried and the jury has

rendered its verdict.

X Decision by Court. This action came to trial or

hearing before the Court. The issues have been tried or

heard and a decision has been rendered.

IT IS ORDERED AND ADJUDGED that pursuant to

the Court's Ruling on Cross Motions for Summary

Judgment (Paper No. 70) filed December 15, 2003,

plaintiffs Cross-Motion for Summary Judgment (Paper

No. 63) is GRANTED and defendants’ Motion for

Summary Judgment (Paper No. 52) is DENIED.

JUDGMENT is hereby entered for plaintiff Green

Mountain Railroad Corporation against defendants State

of Vermont, Vermont Agency of Natural Resources, and

William H. Sorrell.

RICHARD PAUL WASKO

Clerk

Date: December 16, 2003

33 a

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

U.S. Const. Art. VI cl. 2:

This Constitution, and the Laws of the United States

which shall be made in Pursuance thereof; and all

Treaties made, or which shall be made, under the

Authority of the United States, shall be the supreme Law

of the Land; and the Judges in every State shall be bound

thereby, any Thing in the Constitution or Laws of any

State to the Contrary notwithstanding.

United States Code

Title 49. Transportation

Subtitle IV. Interstate Transportation

Part A. Rail

Chapter 105. Jurisdiction

§ 10501. General jurisdiction

(a)(1) Subject to this chapter, the Board has jurisdiction

over transportation by rail carrier that is--

(A) only by railroad; or

(B) by railroad and water, when the transportation is

under common control, management, or arrangement for

a continuous carriage or shipment.

(2) Jurisdiction under paragraph (1) applies only to

transportation in the United States between a place in—

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

part of the interstate rail network;

(B) a State and a place in a territory or possession of the

United States;

34a

place in another such territory or possession;

(D) a territory or possession of the United States and

another place in the same territory or possession;

(E) the United States and another place in the United

States through a foreign country; or

(F) the United States and a place in a foreign country.

(b) The jurisdiction of the Board over--

(1) transportation by rail carriers, and the remedies

provided in this part with respect to rates, classifications,

rules (including car service, interchange, and other

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

of such carriers; and

(2) the construction, acquisition, operation, abandonment,

or discontinuance of spur, industrial, team, switching, or

side tracks, or facilities, even if the tracks are located, or

intended to be located, entirely in one State,

is exclusive. Except as otherwise provided in this part,

the remedies provided under this part with respect to

regulation of rail transportation are exclusive and

preempt the remedies provided under Federal or State

law.

(cX1) In this subsection--

(A) the term "local governmental authority"--

(i) has the same meaning given that term by section

5302(a) of this title; and

(ii) includes a person or entity that contracts with the

local governmental authority to provide transportation

services; and

35a

(B) the term "mass transportation" means transportation

services described in section 5302(a) of this title that are

provided by rail.

(2) Except as provided in paragraph (3), the Board does

not have jurisdiction under this part over mass

transportation provided by a local governmental

authority.

(3)(A) Notwithstanding paragraph (2) of this subsection, a

local governmental authority, described in paragraph (2),

is suvject to applicable laws of the United States related

to--

(i) safety;

(ii) the representation of employees for collective

bargaining; and

(iii) employment, retirement, annuity, and unemployment

systems or other provisions related to dealings between

employees and employers.

(B) The Board has jurisdiction under sections 11102 and

11103 of this title over transportation provided by a local

governmental authority only if the Board finds that such

governmental authority meets all of the standards and

requirements for being a rail carrier providing

transportation subject to the jurisdiction of the Interstate

Commerce Commission that were in effect immediately

before January 1, 1996. The enactment of the ICC

Termination Act of 1995 shall neither expand nor contract

coverage of employees and employers by the Railway

Labor Act, the Railroad Retirement Act of 1974, the

Railroad Retirement Tax Act, and the Railroad

Unemployment Insurance Act.

36 2

United States Code

Title 49. Transportation

Subtitle IV. Interstate Transportation

Part A. Rail

Chapter 115. Federal-state Relations

§ 11501. Tax discrimination against rail

transportation property

(b) The following acts unreasonably burden and

discriminate against interstate commerce, and a State,

subdivision of a State, or authority acting for a State or

subdivision of a State may not do any of them:

(1) Assess rail transportation property at a value that has

a higher ratio to the true market value of the rail

transportation property than the ratio that the assessed

value of other commercial and industrial property in the

same assessment jurisdiction has to the true market

value of the other commercial and industrial property.

(2) Levy or collect a tax on an assessment that may not be

made under paragraph (1) of this subsection.

(3) Levy or collect an ad valorem property tax on rail

transportation property at a tax rate that exceeds the tax

rate applicable to commercial and industrial property in

the same assessment jurisdiction.

(4) Impose another tax that discriminates against a rail

carrier providing transportation subject to the jurisdiction

of the Board under this part.

37a

VERMONT STATUTES ANNOTATED

TITLE TEN. Conservation and Development

CHAPTER 151. State Land Use and Development

SUBCHAPTER 1. General Provisions

§ 6001 Definitions

When used in this chapter:

(3)(A) "Development" means:

(i) The construction of improvements on a:tract or tracts

of land, owned or controlled by a person, mvolving more

than 10 acres of land within a radius of five miles of any

point on any involved land, for commercial or industrial

purposes in a municipality that has adopted permanent

zoning and subdivision bylaws.

(ii) The construction of improvements for commercial or

industrial purposes on more than one acre of land within

a municipality that has not adopted permanent zoning

and subdivision bylaws.

(iii) The construction of improvements for commercial or

industrial purposes on a tract or tracts of land, owned or

controlled by a person, involving more than one acre of

land within a municipality that has adopted permanent

zoning and subdivision bylaws, if the municipality in

which the proposed project is located has elected by

ordinance, adopted under chapter 59 of Title 24, to have

this jurisdiction apply.

(iv) The construction of housing projects such as

cooperatives, condominiums, or dwellings, or construction

or maintenance of mobile homes or trailer parks, with 10

or more units, constructed or maintained on a tract or

tracts of land, owned or controlled by a person, within a

radius of five miles of any point on any involved land, and

within any continuous period of five years.

38 a

(v) The construction of improvements on a tract of land

involving more than 10 acres that is to be used for

municipal, county or state purposes. In computing the

amount of land involved, land shall be included that is

incident to the use such as lawns, parking areas,

rozdways, leaching fields and accessory buildings.

(vi) The construction of improvements for commercial,

industrial or residential use above the elevation of 2,500

feet.

(vii) Exploration for fissionable source materials beyond

the reconnaissance phase or the extraction or processing

of fissionable source material.

(viii) The drilling of an oil and gas well.

(B) Notwithstanding the provisions of subdivision (3)(A) of

this section, if a project consists exclusively of any

combination of mixed income housing or mixed use and is

located entirely within a downtown development district

designated pursuant to 24 V.S.A. § 2793, "development"

means:

(i) Construction of mixed income housing with 100 or

more housing units or a mixed use project with 100 or

more housing units, in a municipality with a population of

20,000 or more.

(ii) Construction of mixed income housing with 50 or more

housing units or a mixed use project with 50 or more

housing units, in a municipality with a population of

10,000 or more but less than 20,000.

(iii) Construction of mixed income housing with 30 or

more housing units or a mixed use project with 30 or more

housing units, in a municipality with a population of

5,000 or more and less than 10,000.

39 a

(iv) Construction of mixed income housing with 2C or

more housing units or a mixed use project with 20 or more

housing units, in a municipality of less than 5,000.

(v) Construction of 10 or more units of mixed income

housing or a mixed use project with 10 or more housing

units where the construction involves the demolition of

one or more buildings that are listed on or eligible to be

listed on the state or national register of historic places.

subdivisions (3)(A) and (3)(B) of this section:

(i) Housing units constructed by a person partially or

completely outside a designated downtown development

district shall not be counted to determine jurisdiction over

housing units constructed by a person entirely within a

designated downtown development district.

(ii) Within any continuous period of five years, housing

units constructed by a person entirely within a designated

downtown district shall be counted together with housing

units constructed by a person partially or completely

outside a designated downtown development district to

determine jurisdiction over the housing units constructed

by a person partially or completely outside the designated

downtown development district and within a five-mile

radius.

(iii) All housing units constructed by a person within a

designated downtown development district within any

continuous period of five years, commencing on or after

the effective date of this subdivision, shall be counted

together.

(iv) In the case of a project undertaken by a railroad, no

portion of a railroad line or railroad right-of-way that will

not be physically altered as part of the project shall be

40a

tA ae ew eee p vedas WAS Gidley ~-Sawada UAVS STs LUE

case of a project undertaken by a person to construct a

‘rail line or rail siding to connect to a railroad’s line or

right-of-way, only the land used for the rail line or rail

siding that will be physically altered as part of the project

shall be included in computing the amount of land

involved.

VERMONT STATUTES ANNOTATED

TITLE TEN. Conservation and Development

CHAPTER 151. State Land Use and Development

SUBCHAPTER 4. Permits

§ 6081 Permits required; exemptions

(a) No person shall sell or offer for sale any interest in any

subdivision located in this state, or commence

construction on a subdivision or development, or

commence development without a permit. This section

shall not prohibit the sale, mortgage or transfer of all, or

an undivided interest in all, of a subdivision unless the

sale, mortgage or transfer is accomplished to circumvent

the purposes of this chapter.

***

(i) The repair or replacement of railroad facilities used for

transportation purposes, as part of a _ railroad's

maintenance, shall not be considered to be substantial

changes and shall not require a permit as provided under

subsection (a) of this section, provided that the

replacement or repair does not result in the physical

expansion of the railroad's facilities.

*: FILED

4 4 : ee

(~Y SEP 2 6 205

No. 05-89 OFFICE OF THE CLERK

In the Supreme Court of the Anited States

STATE OF VERMONT, e¢ al.,

Petitioners,

Vv.

GREEN MOUNTAIN RAILROAD CORPORATION,

Respondent.

On Petition for a Writ of Certiorari to the

United States Court of Appeals for the Second Circuit

BRIEF FOR THE RESPONDENT IN OPPOSITION

ROBERT B. LUCE ROBERT M. JENKINS III

ERIC A. POEHLMANN Counsel of Record

Downs Rachlin Martin DAVID M. GOSSETT

PLLC Mayer, Brown, Rowe &

Courthouse Plaza _ _ Maw LLP

199 Main Street 1909 K Street, NW

P.O. Box 190 Washington, DC 20006

Burlingion, VT 05402 (202) 263-3000

ERIC R. BENSON ANDREW P. GOLDSTEIN

6A Hillside Lane McCarthy, Sweeney &

Westford, VT 05494 Harkaway, P.C.

2175 K Street, NW

Washington, DC 20037

Counsel for Respondent

- = WASHINGTON, D. C. 20001

QUESTION PRESENTED

The ICC Termination Act of 1995 (“ICCTA”), Pub. L.

No. 104-88, 109 Stat. 803, codified in relevant part at 49

U.S.C. §§ 701-727, 10101-11908, amended and expanded

the scope of the Interstate Commerce Act’s express preemp-

tion provision. As amended, the statute specifies:

The jurisdiction of the [Surface Transportation

Board (“STB”)] over—

(1) transportation by rail carriers * * *, and

(2) the construction, acquisition, operation,

abandonment, or discontinuance of spur, indus-

trial, team, switching, or side tracks, or facilities

is exclusive. Except as otherwise provided in this

part, the remedies provided under this part with re-

spect to regulation of rail transportation are exclu-

sive and preempt the remedies provided under Fed-

eral or State law.

49 U.S.C. § 10501(b). The question presented is whether lo-

cal or state governments may require railroads to participate

in pre-construction permitting programs before undertaking

rail transportation activities and operations that, pursuant to

this provision, fall within the STB’s “exclusive” jurisdiction.

RULE 29.6 STATEMENT

Resmeadent Green Mountain Railroad Corporation

(“Green Mountain”) has no parent corporations and no pub-

licly held company owns 10% or more of its stock. Green

Mountain is one of five shortline railroads that share com-

mon ownership and that together comprise the Vermont Rail

System. The four other railroads in the Vermont Rail System

are the Vermont Railway, Inc., The Clarendon and Pittsford

Railroad Company, the Washington County Railroad Com-

pany, and the New York & Ogdensburg Railway Co., Inc.

The recently formed Otter Creek Railroad Company is also

part of the Vermont Rail System, but has not yet applied for

STB licensure. ‘

QUESTION PRESENTED

RULE 29.6 STATEMENT

TABLE OF AUTHORITIES

STATEMENT

A. The History Of Railroad Regulation. .................

Cee CN ia os niich cesses ccenabbssisessece

REASONS FOR DENYING THE PETITION

II.

TABLE OF CONTENTS

THERE IS NO CONFLICT AMONG THE

LOWER COURTS OVER WHETHER

SECTION 10501(6) PREEMPTS PRE-

CONSTRUCTION PERMITTING PROCESSES

AS APPLIED TO RAIL TRANSPORTATION

ACTIVITIES AND FACILITIES THAT FALL

WITHIN THE STB’S EXCLUSIVE

Fane Ie Es lasaelsnsesctitiblininanscthaidbeneninnasanseciplonpanentnnn

PETITIONERS’ POLICY ARGUMENTS FOR

REVIEW ARE BASELESS. ....0.:cjecsscnsconcestnssonsseseses

Ill. THE SECOND CIRCUIT WAS PLAINLY

CORRECT IN HOLDING PETITIONERS’

PERMITTING PROCESS TO BE PREEMPTED

BE ES IF Pi edincroneesescelppinawesceniplaatoceasegbiakiceeessibe

CONCLUSION

iii

SORTER ET HEHEHE EEE THEE TEH ETE SESE TERETE

PESO R SESE SSE EET ETERS TESTE ESE EESEEE EH ESE SESE ESTES ESHER EE SE

SPOTS EEE EEE EE EE EEE EEE EET EE ETE EEE EEE EEEEEEEE ESSER EEE EOE ES

Metin |

ae 7

asian 13

TABLE OF AUTHORITIES

Page(s)

CASES

Cal. Coastal Comm'n v. Granite Rock Co.,

A C8 IED issn sain tessicctvccisieenitcinen toSqeigihinssibaaiiilion 29

Canadian Nat’l Ry. Co. v. City of Rockwood,

2005 WL 1349077 (E.D. Mich. June 1, 2005)............... 15

Cedarapids Inc. v. Chicago Cent. & Pac. R.R.,

265 F. Supp. 2d 1005 (N.D. Iowa 2003) .........eccsceeeeeee 15

Chicago & N.W. Transp. Co. v. Kalo Brick & Tile Co.,

Te U8 UE iid strrcesnsnstcigh ih disologhbuasheniniaaien 2,3

City of Auburn v. United States, 154 F.3d 1025

Ply SP isi vclnahsincsisatiaidiinveaiensesbanennenbbiagsesct passim

City of Lincoln v. STB, 414 F.3d 858 (8th Cir. 2005) .... 20, 21

City of Stafford v. ICC, 69 F.3d 535 (Sth Cir. 1995) ........... 25

CSX Transp., Inc. v. City of Plymouth,

92 F. Supp. 2d 643 (E.D. Mich. 2000) ............ecceesseeee 30

CSX Transp., Inc. v. Ga. Pub. Serv. Comm'n,

944 F. Supp. 1573 (N.D. Ga. 1996) .0......cccceeeees $,a3,15

CSX Transp., Inc. v. Williams,

TE DE Gr as Gk, NOD scknipnsstsinescsctesenbcsncoccnstpnses 30

Detroit/Wayne County Port Auth. v. ICC,

Ft EGG Ce. LGD sins sssesin titans haitacctattiatn 26

Fla. E. Coast Ry. v. City of West Palm Beach,

266 F.3d 1324 (11th Cir. 2001)......... cc cssessseeess 18, 19, 20

Flynn v. BNSF Corp., 98 F. Supp. 2d 1186

SOR PII Ge crcsieshisiihnsshctinn<ckantatasineincenniabosansnshiinhelioa 15

Friberg v. Kansas City S. Ry. Co., 267 F.3d 439

es EE Do wintiesicecss nsicieinienncnbivicsaedonessapatalananuiiiall 14

TABLE OF AUTHORITIES-CONTINUED

Page(s)

G&T Terminal Packaging Co. v. Consol. Rail Corp.,

ee ae At Gs SOIT iitccsessciiernonsssgudeasinirscoseicecs 25

Hi Tech Trans, LLC v. New Jersey, 382 F.3d 295

I I I ico tatactaas can ctodasiag eae nansetadbinrnaestni 14,17

Home of Economy v. Burlington N. Santa Fe

R.R., 694 N.W.2d 840 (N.D. 2005) 0.0... eeeees 20, 21

Bs V. ROE, SEG 2 OO CAFE D vnncciccksccsnsccctasbanscecsaitincnses 3

Ill. Commerce Comm'n v. ICC, 879 F.2d 917

8, Re tae an erage 3, 26

In re Appeal of Vermont Railway,

FOP BiB GAB CVE. FIO) on sicinsnsencsnciiercrsesccsexcences 16, 17, 18

In re Spring Brook Farm Found., Inc.,

pe Re. aS 3) ee Ee eer tee 7

Iowa, Chicago & E. R.R. v. Washington

County, 384 F.3d 557 (8th Cir. 2004) .0..... ee. 20, 21

Morales v. Trans World Airlines, Inc.,

NN ied ictchitininbinasisipdiiseasodasehanennccts 24, 25

Native Vill. of Eklutna v. Alaska R.R. Corp.,

87 P.3d 41 (Alaska 2004)... .cccsecesscsscsesesseeeceeees 19, 20

Norfolk & W. Ry. Co. v. Am. Train

Dispatchers Ass’n, 499 U.S. 117 (1991) .....cceceseceseees 29

Norfolk S. Ry. Co. v. City of Austell, 1997 WL

1113647 (N.D. Ga. Aug. 18, 1997)... cece eceeceseeee 15

Pittsburgh & Lake Erie R.R. Co. v. Ry. Labor

Executives Ass'n, 491 U.S. 490 (1989) .......ccccccseeseeeeeeee l

Rice v. Santa Fe Elevator Corp.,

Se Be RRR ai icaies oe ar eS 29

TABLE OF AUTHORITIES-CONTINUED

Page(s)

Schneidewind v. ANR Pipeline Co.,

ED rie A IE el virtcicesicionsdapititeenenntansnatsonixtasesoen 25

Soo Line R.R. v. City of Minneapolis,

38 F. Supp. 2d 1096 (D. Minn. 1998) ...... cece ceeeeeeeee 15

Texas & Pac. Ry. Co. v. Abilene Cotton Oil Co.,

PE ir OTN sites ccthehccsadla siilintasccociennshihcotocinsticinthades 3

Texas & Pac. Ry. Co. v. Gulf; Colorado &

Santa Fe Ry., 270 U.S. 266 (1926)..........scccsscssssserseseees 26

Transcon. Gas Pipe Line Corp. v. State Oil & Gas Bd.

Of Miss., 474 U.S. 409 (19GB). ....-.....ccccrecesnsssscossccesessaces 25

United States v. Locke, 529 U.S. 89 (2000) ..........cccscesseseees 30

Vill. of Ridgefield Park v. New York, Susquehanna

& W. Ry. Corp., 750 A.2d 57 (N.J. 2000)..............06 12, 15

Wis. Cent. Ltd v. City of Marshfield,

160 F. Supp. 2d 1009 (W.D. Wisc. 2000) .............. cee 15

AGENCY DECISIONS

Borough of Riverdale—Petition for Declaratory

Order—The New York, Susquehanna, & W. Ry.

Corp., STB Fin. Dkt. No. 33466, 1999 WL

715272 (served Sept. 10, 1999).........cc.ccccsssesesssereses 15, 16

Cities of Auburn & Kent, WA—Petition for

Declaratory Order—Burlington N. R.R. Co.—

Stampede Pass Line, STB Fin. Dkt. No. 33200,

1997 WL 362017 (served July 2, 1997)...............004 16, 26

City of Detroit v. Canadian Nat'l Ry. Co.,

CIC ON i. “ase 25, 26

_TABLE OF AUTHORITIES-CONTINUED

Page(s)

City of Stafford v. S. Pac. Transp. Co., \CC Fin.

Dkt. No. 32395, 1994 WL 613381 (served

PO iy SE Nice dicicivicniacnuatanseinm tlacuadiccosdassigiccedie 25

Green Mountain R.R. Corp.—Petition for

Declaratory Order, STB Fin. Dkt. No. 34052,

2002 WL 1058001 (served May 28, 2002).......... 9, 10, 12

Hi Tech Trans, LLC—Petition for Declaratory

Order—Hudson Cty., NJ, STB Fin. Dkt. No.

34192, 2002 WL 31595417 (served Nov. 20, 2002)...... 17

Joint Petition for Declaratory Order—Boston &

Maine Corp. & Town of Ayer, MA, STB Fin.

Dkt. No. 33971, 2001 WL 458685 (served ~

PE Bi BOD icin bi eisai soneadigspha vasiesinstadinididiitaoas 10, 22

Joint Petition for Declaratory Order—Boston &

Maine Corp. & Town of Ayer, MA, STB Fin.

Dkt. No. 33971, 2001 WL 1174385 (served

FR BS RANI rte aN RNAY HON REE D DE: ARR ES 15

N. San Diego County Transit Dev. Bd.—Petition for

Declaratory Order, STB Fin. Dkt. No. 34111,

2002 WL 1924265 (served Aug. 21, 2002)..............000: 15

Union Pac. R.R.—Petition for Declaratory Order—

Rehabilitation of Mo.-Ks.-Tx. R.R. Between

Jude and Ogden Junc., TX, STB Fin. Dkt.

No. 33611, 1998 WL 525587 (served Aug. 21, 1998) .. 26

STATUTES, RULES AND REGULATIONS

FFs WT isicdahananlasnscicnnsdamcactsdeuithinnietaishdinabanninaaibs 8

49 U.S.C. § 10102(9)......... ee piss baleibiseheabantbainaneil passim

Se Sas: FS sas scihscctsdevdbeacsabadcawnsnissshinnedcecentlGbcidmsateibionncons 4

Vii

TABLE OF AUTHORITIES-CONTINUED

Page(s)

ee ne ae “

49 U.S.C. § 10501(b)..........00000 Bi aha Cet 3s passim

ne ON se 17

kN , Se ct ON aL: 6, 26

I 4

I Oe ORION oni 2

PRET 6 MOUNT NOON oi iii ince 2

SD ON RRS ORE nti ea ee a eater 7

USC. 6 100000) (1907)... 26

eae sea aes. 3

rr oe BTL LOL LS , ecemmmneneereeert tence 2

EERSTE ILE, 29

Dn RE LEGIT IAT SEE 14

eee NIST os 2

REI SRA aie ee PA Che 28

NR NN os 28

BRASS Ea ARR Rao A case 28

SS SEBEL LEE TOOL TM 12

Federal Railroad Safety Act of 1970, Pub. L. No.

a 20

ICC Termination Act of 1995 (“ICCTA”), Pub. L.

No. 104-88, 109 Stat. 803, codified in relevant

part at 49 U.S.C. §§ 701-727, 10101-11908........... passim

Vill

TABLE OF AUTHORITIES-CONTINUED

Interstate Commerce Act of 1887 (“ICA”),

Pub. L. No. 49-104, 24 Stat. 379... ecsseseseeeee

National Environmental Policy Act (“NEPA”),

S2US.C; B86 4521-AT Oaks

Railroad Revitalization and Regulatory Reform

Act of 1976, Pub. L. No. 94-210, 90 Stat. 31......

Staggers Rail Act of 1980, Pub. L. No. 96-448, 94

ahs, Bei diciabsscimnnsiplabahatohsingasitbadiphhdessanpibadatnaiiatnanies

Transportation Act of 1920, Pub. L. No. 66-152,

Oe tO itd aintictligintscbccahinhigabinidauascamsaciedaneed

Act 250, codified at Vt. Stat. Ann. Tit. 10

IE MI ance sicendesineh dnadasteprebiacinstensichaalassaoentisch

Vt. Stat. Amn. Tit. 10 § 6084 oo... seccesccosscsssseeee

Vt. Stat. Ainn. Tit. 10 § 6085 .o.cccccccsscsscsssessseessoee

Vt. Stat. Ann. Tit. 10 § 6085(C)...c.ccccecccsescsseseenees

Vt. Stat. Ain. Tit. 10 § 6086 ......cc.cccscsscsesessseseeeee

Vt. Stat. Ann. Tit. 10 § 6086(a)(1) ....scssssccsseseoeee

Vt. Stat. Ann. Tit. 10 § 6086(a)(8) ......-..cse..0se--

Vt. Stat. Ann. Tit. 10 § 6086(C)......cscccscsesesssesennee

Vt. Stat. Ainn. Tit. 10 § 6089 ....ccsccccsscsssecsseeseeee

Ps 1 BS) A | Sain Ce nod

MISCELLANEOUS

H.R. ConF. REP. No. 104-422 (1995),

reprinted in 1995 U.S.C.C.A.N. 850..........0000005

Page(s)

.... passim

TABLE OF AUTHORITIES-CONTINUED

Page(s)

H.R. REP. No. 104-311 (1995), reprinted in 1995

Re ADs FOR cities ciienineeddcoccsanniaceaniinsicncbiaiangetl passim

is BUEN, SAPO FOP CE ks a saccicoccitgoasoliscabadiccsnoinall 4, 23, 24

BRIEF FOR THE RESPONDENT IN OPPOSITION

As the court of appeals ably demonstrated, 49 U.S.C.

§ 10501(b) precludes states or localities from requiring rail-

roads to participate in pre-construction permitting processes

for rail transportation activities and operations that fall within

the exclusive jurisdiction of the Surface Transportation

Board (“STB” or “Board”). Although petitioners identify

numerous cases that they assert conflict with the Second Cir-

_cuit’s decision on this question, in fact there is no such dis-

agreement; rather, every court to consider the issue has so

held, as has the STB.

Petitioners have never disputed that the facilities Green

Mountain proposed to construct in-this case fall within the

scope of the STB’s jurisdiction over rail transportation activi-

ties and operations—as both the district court and the court of

appeals found. Every court to consider the applicability of a

state permitting statute to rail transportation facilities within

the STB’s jurisdiction has concluded that the state permitting

system is preempted by Section 10501(b). The cases that pe-

titioners assert conflict with the decision below have instead

involved a different, fact-bound question: whether specific

activities undertaken by a railroad fell within the statutory

definition of rail “transportation,” and thus within the exciu-

sive jurisdiction of the STB. That issue is distinct from

whether a state may require a railroad to participate in a prior

permitting scheme for rail transportation activities or facili-

ties that unquestionably do fall within the STB’s jurisdiction.

Thus, these cases in no way conflict with the decision below,

and there is no reason for this Court to grant review.

STATEMENT

A. The History Of Railroad Regulation.

1. Congress has extensively regulated the nation’s rail-

road system for over a century. See Pittsburgh & Lake Erie

R.R. Co. v. Ry. Labor Executives Ass'n, 491 U.S. 490, 510

(1989); City of Auburn v. United States, 154 F.3d 1025, 1029

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