Opposition Brief — Lundeen v. Canadian Pacific Railway Co (No. 06-528)

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No. 06-528

IN THE

Supreme Court of the United States

WILSON-EPES PRINTING CO INC — (202) 789-0096 - WasH NGTON.D C 20001

1OM LUNDE&cN. ef a/

Petitioners.

Vv.

CANADIAN PACIFIC RAILWAY COMPANY. ef al.

Respondents.

On Petition for Writ of Certiorari to the

United States Court of Appeals

for the Eighth Circuit

BRIEF INOPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

PMOTHY ROBERT THORNTON

Counsel of Ri rd

SCOTT G. KNUDSON

KEVIN M. DECKER

BRIGGS AND MORGAN, PLA.

2200 IDS Center

80 South Eighth Street

Minneapolis, MN 55402

(612) 977-8400

Attorneys for Respondents

Canadian Pacific Railway

Company, et al

QUESTION PRESENTED

Whether the decision below correctly adheres to unani-

mous circuit court precedent by confirming the complete pre-

emptive effect of the Federal Railroad Safety Act, without

regard to the relief available after removal jurisdiction

attaches?

PARTIES TO THE PROCEEDINGS

Petitioners are Tom and Nanette Lundeen, individually and

on behalf of Molly and Michael Lundeen, minors; Melissa

Todd; Irene Clare Korgel; Trent and Randi Lou Westmever;

Darla M. Just; Mary Beth Gross, individually and on behalf

of Brett Gross, a minor; Mark and Sandra Nesbit; LeRoy

Slorby; Ray Lokoduk; JoAnn Flick; Wilfred and Geraldine

Dahly; Marilyn Carlson; Gerald Wickman; Dion and Brenda

Darveaux, individually and on behalf of Kendall Darveuax,

a minor; Shelly Hingst; Bobby and Mary Smith; Richard

Muhlbradt; Doug Weltzin; Nathan and Nichole Freeman,

individually and on behalf of Ashlyn Freeman, a minor;

Charlotte Goerndt; Leo Gleason; Judy Deutsch, individually

and on behalf of Tyrone Deutsch, a minor; Denise Duchsh-

erer, Leo Duchsherer, and Joshua Duchsherer; Larry and

Carol Crabbe; Rebecca M. Behnkie, individually and on

behalf of Nathaniel Behnkie, a minor; Charles and Sandra

Swenson; Larry and Tami Schafer, individually on behalf of

Jenna Schafer, a minor; John Salling, individually, and

Lorenda Poissant Salling, individually and on behalf of

Sebastian Poissant, a minor; Rachelle Todosichuk:; Lonni

Shigley; and Richard McBride and Linda McBride.

Respondents are Canadian Pacific Railway Company,

Canadian Pacific Limited, Canadian Pacific Railway Limited,

and Soo Line Railroad Company.

ill

RULE 29.6 STATEMENT

Canadian Pacific Railway Company is a ‘ial

subsidiary of Canadian Pacific Railway Limited; Soo Line

Railroad Company is an indirect wholly-owned subsidiary

of Canadian Pacific Railway Company. Canadian Pacific

Limited changed its name to Fairmont Hotels & Resorts Inc.

as of October 1, 2001, and since that date has no relationship

to Canadian Pacific Railway Limited, Canadian Pacific

Railway Company or Soo Line Railroad Company. No other

publicly held corporation owns 10% or more of the shares of

either Canadian Pacific Railway Company, Canadian Pacific

Railway Limited, or Soo Line Railroad Company.

TABLE OF CONTENTS

QUESTION PRESENTED........ssssssocsscsssssssscceesssssssse

PARTIES TO THE PROCEEDINGS .........sssssesssseeeeees

LE FRG BEAT UIMIINE assent stirs victecsectdcranes

TABLE OF AUTHORITIES......sssssssssssssssecessssssseeese

NG IE csc csseeierrcreisistrsesnetincrtepeater

fs (RA ae ee eM BSS

RESPONDENTS’ STATEMENT OF THE CASE.......

UA TOEN ices lnintasestescnrtincsopinsniigeniuchicivteinisianiiae

II.

The Lundeen district court proceedings.......

The appellate proceedings ..................::00008

THE WRIT SHOULD BE DENIED.............cccccossscoesees

CIRCUIT COURTS AGREE -ABOUT

COMPLETE FRSA PREEMPTION .................

Complete preemption removal is_ well

ING estovhesecdlisvedphctnttubcnssisitsncteacaevens

The FRSA makes railroad regulatory

oversight nationally uniform ......... iad

. Federal court is open for completely

preempted FRSA claim...............cccccsssrssseess

Non-FRSA precedents do not repel the

statute’s jurisdictional force..............cc000

(v)

aon uu +f} +f LH fH

TABLE OF CONTENTS—Continued

E. Certiorari review is not justified..................

Il. FEDERAL REMEDY AVAILABILITY IS

ke SR eee eneerne

A. A substitute federal remedy is not the

Jurisdictional sine Qua NON........c.c.cceceeccece0e-

B. Grable lays the federal remedy prerequi-

SIE CONLENTIONS UO TES .......0c0cccecsersecereereseeese

C. Settled precedent challenges do not

WalTant CertiOrarl FEVIEW ............cccceeceseeseeees

STENT EI IIIITT -stilis Woscitieisanighiercsisaiinlielacessauidhadindanensia castle

Vil

TABLE OF AUTHORITIES

CASES Page

Allende v. Soo Line R.R. Co., No. 03-3093, slip

op. (D. Minn. Jan. 29, 2004)............cccccccesserrseees 5

Avco Corp. v. Aero Lodge No. 735, Int’l Ass'n of

Machinists & Aerospace Workers, 390 U.S.

8 | __. RERRRSEREL SEEN IRC nea, G8 toc ete mS passim

Bates v. Dow Agrosciences LLC, 544 U.S. 431

TTI alicnliscsseorshiideantedigiandibeideaianaddaledaddiisaitaseaddghabinires 15

Beneficial Nat'l Bank v. Anderson, 539 U.S. |

6. ARRAS ES Se APM ae AR ee AL ek 15, 16, 22

Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343

Ie a isch cikcpdiascasicdtsicaiceposlisetaite bibscenie innate 6

Caterpillar, Inc. vv. Williams, 482 U.S. 386

5 Ian eceakiediitnisinasiieniieilseupsiionesicolbnabiatiictasaanidiiacabapebda passim

Chapman v. Lab One, 390 F.3d 620 (8th Cir.

» ____ REERERIRER Eee ael Cn LK om COP IIe TF one Ds 6-7, 14

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

Oat aicaliiccevisscicaadinsibesiionsaalacalial iocsinbbiinsdeeiosiiaiiaaniaiaiie passim

CSX Transp., Inc. v, Williams, 406 F.3d 667

ct esl Ae. | SPEIRS ere eee aaciiideeteabinnatlali 10

Deford v. Soo Line R.R. Co., 867 F.2d 1080 (8th

Cir.), cert. denied, 492 U.S. 927 (1989)............ 1]

Franchise Tax Bd. v. Constr. Laborers Vacation

FOE Re Wastes BEA ita niticnttettenniniiainiiciinis 9

Gaming Corp. of Am. v. Dorsey & Whitney, 88

Fe EE Als 6 ID inceconsnstntnicttnincitnernesemives 6, 8

Grable & Sons Metal Prods., Inc. v. Darue

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

In re Derailment Cases, 416 F.3d 787 (8th Cir.

ST iainnthiidinniceebiniiiiliuiiadcctdiinssataabiaaaihiesibidabiiiiaidasoies 6

Vill

TABLE OF AUTHORITIES—Continued

Page

In re: the Soo Line Co. Derailment of Jan. 18,

2002 in Minot, ND, No. MC 04-007726, slip

op. (Minn. Dist. Ct. Dec. 21, 2005) 0.0... 5

Lundeen v. Canadian Pac. Ry. Co., 342 F. Supp.

Be See ED. BAD, BOO iicisciosccsesecmenes, Ko

Lundeen v. Canadian Pac. Ry. Co., 447 F.3d 606

ER, PN sctitetnicdinssinitimedaniciis Passim

Lundeen v. Canadian Pac. Ry. Co., No. 04-3220,

2005 WL 563111 (D. Minn. Mar. 9, 2005)........ 1,6

M. Nahas & Co., Inc. v. First National Bank of

Hot Springs, 930 F.2d 608 (8th Cir. 1991)........ 8

Mehl v. Canadian Pac. Ry. Ltd., 227 F.R.D. 505

ee, 5. | RONEN Ae RI Ry 4

Merrell Dow Pharms., Inc. v. Thompson, 478

Rate Pe COTY siinniccdanadiipilbueslumuuae ates 22

Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58

CRIT Beirwnsaceitinsetacuitensicadidiaaiacietiaad amen meee 8-9

Norfolk S. Ry. Co. v. Shanklin, 529 U.S. 344

GR cenicinesisnensigaiaaideeneaadmi ia tae 12, 16-17 -

Peters v. Union Pac. R.R. Co., 80 F.3d 257 (8th

als Bea icsininvnveseysbessinapineaniies iain ene passim

Pilot Life Insurance Co. v. Dedeaux, 481 U.S. 41

CR PIFE Disiasbeininsesieeapnaciedubiass heii picasa 8

Quackenbush v. Allstate Ins. Co., 517 U.S. 706

EF FPR Dhcccvissnsbiindetsisetishithcantansdaicashin tiiacacamaaioaiataaaea 6

Rayner v. Smirl, 873 F.2d 60 (4th Cir.), cert.

denied, 493 U.S. 876 (1989)... cccccccccescessecseeees passim

Rogers v. Tyson Foods, Inc., 308 F.3d 785 (7th

OWT SNE Pv voccesicessisisiusdiicede aati pr obncee ns 16-17

TABLE OF AUTHORITIES—Continued

Page

Schmeling v. NORDAM, 97 F.3d 1336 (10th Cir.

a centeupesiehionanens 20

Smallwood v. Ill. Cent. R.R. Co., 385 F.3d 568

(Sth Cir. 2004), cert. denied, 544 U.S. 992

ESE SESS A Oe 14-15

Swift & Co. v. United States, 276 U.S. 311

I cadapcesusonensevonns 19

Williams v. Caterpillar Tractor Co., 786 F.2d

| Ee 19

STATUTORY PROVISIONS

TT iiss cltaciiiectdnberaitionarsddveneenipionidoncesa 16

I occa cininlininnetibevdcceeeusbinceweres l

ITT sed aici bivhipnleiioeiesenioonbenoneneces I

TID cases as aceicecniscasacitsopnsntonuesettecdent’ 39

SITE IIIT i ivnistediasbesansedutnideessestessetaservecsnsors 5-6

TTT cust seksedecoinesceersedesonsebsesetensenoneosoes 12

ET i TTT snsccssdaskcecnsrcscshovevcvenresvesvossonsosess |

I isa iid entietrdactnsesecedenndobineenstotons 2

IIE IID osctictiidincevesvecsenerrecsesieversovncovaerenvers passim

TET TIN © sidseedGucecechartecswasseceqsqnootivesonesteese 11

8 ME | aT sed daiennehotientideets 1]

SEITE IEE BE scipntcuccteereripsenseccetvesecsereeesecocoesees 11-12

RR 8 2 ie | | 5

Re Ee 2 iy) | a ae 5

OTHER FEDERAL AUTHORITIES

OT Ee 7

TABLE OF AUTHORITIES—Continued

Page

ead Sie Daihen 10

Oe dt aie etic PP sinisiecsinbceccesocieasianeilaseniaiiintacs 7

OP CF the § BES AI DD cesiccrnciovcncositecsincrtnininsenens 7

a pe hs Th cxsecsctinisecitecevientinintnainiaaeniieeasie 13-14

TFC ti NITED shniechctininsiistsiiindleaailias thine 13-14

H.R. Rep. No. 103-180 (1993), reprinted in 1994

Satan ichintissivndeneatiaasiebinieeiisiae et 12

H.R. Rep. No. 91-1194 (1970), reprinted in 1970

SF aD: OY snecntiisccinpisiceetaleidinsiats oii passim

Us ic Wb: liclccinesenendestevialinedateathtialadnbckn oe passim

OPINIONS BELOW

The decision of the United States Court of Appeals for the

Eighth Circuit affirming removal on complete preemption

grounds is reported at 447 F.3d 606 and reproduced in

petitioners’ appendix (“Pet. App.”) at la-29a. The order

denying rehearing en banc and rehearing by the panel is

unreported, but reproduced at Pet. App. 53a.

The decision of the United States District Court for the

District of Minnesota denying an initial motion to remand is

reported at 342 F. Supp. 2d 826; the ultimate remand after

express references to federal law were excised from the

complaint is unreported, but available at 2005 WL 563111.

The district court’s decisions are reproduced at Pet. App. 30a- .

42a and Pet. App. 43a-52a, respectively. | :

JURISDICTION

Petitioners timely sought to invoke this Court’s jurisdiction

under 28 U.S.C. § 1254(1).

STATUTORY PROVISIONS INVOLVED

This Petition implicates the Federal Railroad Safety Act

(49 U.S.C. § 20101, et seg.) and provisions of Title 28

affording federal question removal jurisdiction (28 U.S.C.

§§ 1331 & 1441).

RESPONDENTS’ STATEMENT OF THE CASE

The nation’s railroads are the paradigm of interstate

commerce, prompting this Court to long ago recognize that

federal oversight “is practically indispensable to the operation

of an efficient and economical national railway system.”

S. Pac. Co. v. Arizona, 325 U.S. 761, 771 (1945). Congress

made that indispensable federal governance “exclusive” with

the enactment of the Federal Railroad Safety Act (“FRSA”).

The FRSA vests the Federal Railroad Administration

(“FRA”) with plenary authority to “prescribe regulations and

issue orders for every area of railroad safety.” 49 U.S.C.

§ 20103 (emphasis added). To safeguard against local

interference Congress preempted all state laws based upon

subject matters “covered” by FRA standards. 49 U.S.C.

§ 20106. This extraordinary preemptive force reflects both

the supremacy of federal law and superiority of a unitary

federal forum:

[SJafety in the nation’s railroads [is not] advanced

sufficiently by subjecting the national rail system to

a variety of enforcement in 50 different judicial and

administrative systems.

* k

[Indeed,] the railroad industry has very few local

characteristics. Rather, in terms of its operations, it

has a truly interstate character calling for a uniform

body of regulation and enforcement... . To subject

a carrier to enforcement before a number of

different state administrative and judicial systems in

several areas of operation could well result in an

undue burden on interstate commerce.

H.R. Rep. No. 91-1194 (1970), reprinted in 1970

U.S.C.C.A.N. 4104, 4109, 4110-11.

Petitioners decry the extension of federal jurisdiction to

claims “covered” by FRA regulations, but every circuit opin-

ion addressing the jurisdictional impact of the FRSA holds

the preemption effected to be “complete” so as to permit

removal. Lundeen v. Canadian Pac. Ry. Co., 447 F.3d 606,

607 (8th Cir. 2006); Peters v. Union Pac. R.R. Co., 80 F.3d

257, 262 (8th Cir. 1996); Rayner v. Smirl, 873 F.2d 60, 66

(4th Cir.), cert. denied, 493 U.S. 876 (1989).' In an attempt

' Complete pr emption does not require that “covered” claims “must

be removed,” “m » only be brought in federal court,” or “must be heard in

to invent a schism in authority petitioners castigate the

Lundeen court for not mechanicaily following other hold-

ings that have cabined the jurisdictional implications of

substantially different statutory schemes to cases in which

federal remedies are substituted for preempted state claims.

Pet. at 13-23.

Nothing about the distinct approaches to preemption that

discrete statutes have produced is “compelling.” Sup. Ct. R.

10. The jurisdictional boundaries of the FRSA cannot be

surveyed through the prisms of divergent statutory regimes.

On the contrary, the result is dictated by the language of

the statute, and not surprisingly the FRSA’s broad terms have

prompted circuit courts to unanimously recognize the statute’s

complete preemptive effect. Furthermore, the Court has

rejected the premise for this Petition: a federal remedy is not

a prerequisite to the exercise of federal question jurisdiction

by way of complete preemption or otherwise. Grable & Sons

Metal Prods., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308,

317-18 (2005); Caterpillar, Inc. v. Williams, 482 U.S. 386,

391 n.4 (1987).

With the circuit courts speaking as one and the federal

remedy prerequisite a fiction, this case 1s not a worthy vehicle

for illuminating the scope of federal jurisdiction; the path is

already well lit.

federal in federal court.” Petition (“Pet.”) at 2. Rather, as with all 28

U.S.C. § 1441 removals resort to a federal forum is at a defendant’s

option

BACKGROUND

I. THE ACCIDENT

On January 18, 2002, a Canadian Pacific Railway train

derailed near Minot, North Dakota. Amended Complaint,

{ VIII. Several tank cars carrying anhydrous ammonia

released their lading. /d. According to petitioners:

The Minot Derailment was caused by an ineffective

and inadequate inspection and maintenance pro-

gram by Defendant CPR. CPR’s inspection and

maintenance program failed to identify or replace

cracked joint bars before those joint bars com-

pletely fractured.

Id. at § XVI.

Petitioners seek redress for personal injuries and property

damages allegedly sustained. /d. at ] XXXVIII.

Il. THE ENSUING LITIGATION

This litigation ended up before the Eighth Circuit after a

most circuitous jurisdictional journcy. An overview of the

complex proceedings below follows.

A. The first Minot derailment lawsuits.

Even before debris from the derailment could be cleared a

putative class action was launched in North Dakota federal

court. See Mehl v. Canadian Pac. Ry. Ltd., 227 F.R.D. 505,

507 (D.N.D. 2005). A class encompassing these petitioners

was later certified. Jd. at 515, 522.

* The pleadings determine whether the subject matter of the claims is

“covered” for FRSA preemption purposes. CSX Transp., Inc. v. Easter-

wood, 507 U.S. 658, 665 (1993) (assuming the complaint “states a valid

cause of action”). Thus the “facts” upon which the preemption analysis

must be based are drawn from the complaint, reproduced in respondents’

appendix (“Resp. App.”’) at la-19a.

Approximately one year after the accident, dozens of North

Dakotans shopped individual lawsuits in a forum far from

Minot — the Hennepin County, Minnesota district court. See,

e.g., Allende v. Soo Line R.R. Co., No. 03-3093, slip op. (D.

Minn. Jan. 29, 2004) (Resp. App. at 20a-54a). The claimants

fled their home state because North Dakota tort reforms curb

punitive damages and eliminate joint and several liability.

N.D. Cent. Code § 32-03.2-02; N.D. Cent. Code § 32-03.2-

11(4).? Besides that, a jury drawn from metropolitan

Minneapolis was perceived to be more sympathetic.

The state court lawsuits were promptly removed to federal

court on complete preemption grounds. The federal court

remanded, believing that removal jurisdiction is foreclosed

by the FRSA’s failure to afford a substitute federal remedy

for the preempted state claims. Allende, slip op. at 18-20.

Unfortunately, that denial of federal jurisdiction escaped

appellate scrutiny. 28 U.S.C. § 1447(d).

B. The Lundeen district court proceedings.

Following Allende, litigation from Minot — including

petitioners’ cases — deluged the Minnesota court. The

Allende precedent precluded removal of the subsequent case

filings on complete preemption grounds. Petitioners, how-

ever, provided a path to the federal courthouse by pleading

federal environmental claims. Lundeen v. Canadian Pac. Ry.

Co., 342 F. Supo. 2d 826, 829 (D. Minn. 2004). This group

of cases was promptly removed.

The district court rejected petitioners’ first request for

remand because the federal claims expressed on the face of

the complaints invoked federal question jurisdiction. /d. at

829-31. A second remand motion succeeded after petitioners

> Petitioners’ stratagem ultimately failed: the Minnesota state court

rejected punitive damages and applied North Dakota law. Jn re: the Soo

Line Co. Derailment of Jan. 18, 2002 in Minot, ND, No. MC 04-007726,

slip op. at 1, 3 (Minn. Dist. Ct. Dec. 21, 2005} (Resp. App. at 55a-72a).

were allowed to purge all federal references. Lundeen v.

Canadian Pac..Ry. Co., No. 04-3220, 2005 WL 563111, at *3

(D. Minn. Mar. 9, 2005) (Pet. App. at 43a-52a). Because

federal jurisdiction had been initially accepted the second

remand order was discretionary and, therefore, appealable.

See, e.g., Quackenbush v. Allstate Ins. Co., 517 U.S. 706,

711-12 (1996) (remands not pursuant to 28 U.S.C. § 1447

subject to appellate review); Gaming Corp. of Am. v. Dorsey

& Whitney, 88 F.3d 536, 541-42 (8th Cir. 1996) (remand of

supplemental state claims appealable).

C. The appellate proceedings.

The remand order was challenged as an affront to the

forum shopping admonition in Carnegie-Mellon Univ. vy.

Cohill, 484 U.S. 343, 357 (1988). After the briefing had

closed, this Court affirmed the propriety of removal based

upon underlying substantial federal questions, notwithstand-

ing the absence of a parallel federal cause of action. Grable,

545 U.S. at 317-18. Shortly thereafter the Eighth Circuit

decided In re Derailment Cases, which confirmed the

pervasive implications of the FRSA in analogous derailment

litigation. 416 F.3d 787, 793-94 (8th Cir. 2005). Reacting to

these precedents the appellate court asked for supplemental

briefing. Lundeen v. Canadian Pac. Ry. Co., No. 05-1918,

slip order (8th Cir. Feb. 13, 2006) (Resp. App. at 73a).

After further consideration the court enabled the juris-

dictional effect of the FRSA to be realized. That result

flowed from two Eighth Circuit pronouncements regarding

the FRSA’s complete preemption ramifications: Peters v.

Union Pac. R.R. Co., 80 F.3d 257 (8th Cir. 1996) (affirming

removal); and Chapman v. Lab One, 390 F.3d 620 (8th Cir.

2004) (reversing removal). Prior to those decisions the

Fourth Circuit had similarly recognized the jurisdictional

effect of the FRSA. Rayner v. Smirl, 873 F.2d 60 (4th Cir.),

cert. denied, 493 U.S. 876 (1989).

Sinn’ the FRSA had already been understood to have

complete preemptive effect, the Lundeen panel merely needed

to assess whether FRA regulations “covered” the subject

matter of the claims as was the case in Peters and Rayner, or

not as in Chapman. Lundeen, 447 F.3d at 613-14. Using

negligent inspection allegations as a template, the Eighth

Circuit found petitioners’ claims to be subsumed by numer-

ous federal standards. In particular,

federal regulations establish a specific inspection

protocol including how, 49 C.F.R. § 213.233(b),

when, §§ 213.233(c) & .237(a)-(c), and by whom,

§§ 212.203, 213.7 & .233(a), track inspections must

be conducted; the regulations establish a national

railroad safety program intended to promote safety

in all areas of railroad operations, § 212.101(a);

federal and state inspectors determine the extent to

which the railroads, shippers, and manufacturers

have fulfilled their obligations with respect to,

among other things, inspection, § 212.101(b)(1);

and railroads face civil penalties for violations,

§ 213 App. B. It is clear the FRA regulations are

intended to prevent negligent track inspection and

there is no indication the FRA meant to leave open

a state law cause of action.

Id. at 614 (emphasis added). This regulatory “coverage” of

track inspections rendered the litigation removable.

At the Eighth Circuit petitioners entreated for the imposi-

tion of the same complete preemption prerequisite now

heralded before this Court — i.e., the substitution of a federal

remedy for the preempted state claims. Following this Court’s

guidance the appeliate court rejected petitioners’ pleas and

allowed the FRSA’s preemptive force to displace “covered”

claims:

“The issue of whether complete preemption exists

is separate from the issue of whether a private

remedy is created under a federal statute. Cater-

pillar|,482 U.S. at 391 n.4]. Complete preemption

can sometimes lead to dismissal of all claims in a

case. Although courts may be reluctant to conclude

that Congress intended plaintiffs to be left without

recourse, see M. Nahas & Co., Inc. v. First Na-

tionai Bank of Hot Springs, 930 F.2d 608, 612 (8th

Cir. 1991), the intent of Congress is what controls.

Pilot Life Insurance Co. v. Dedeaux, 481 U.S. 41,

45, 107 S. Ct. 1549, 95 L. Ed. 2d 39 (1987)

(citations omitted).”

Id. at 613 n.4 (quoting Gaming Corp., 88 F.3d at 542).

A petition for en banc reconsideration was turned away.

Pet. App. 53a.

THE WRIT SHOULD BE DENIED

I. CIRCUIT COURTS AGREE ABOUT COM-

PLETE FRSA PREEMPTION

Complete preemption removal is firmly rooted in Supreme

Court jurisprudence. The acknowledgement of complete

preemption under the FRSA does not break new ground: the

Fourth and Eighth Circuits have endorsed the statute’s juris-

dictional implications and no other circuit court has disagreed.

Such unanimity is antithetical to the “compelling reasons”

necessary to justify certiorari review. Sup. Ct. R. 10.

A. Complete preemption removal is well estab-

lished.

Complete preemption arises when “the pre-emptive force

of a statute is so ‘extraordinary’ that it ‘converts an ordinary

state common-law complaint into one stating a federal claim

for purposes of the well-pleaded complaint rule.’”” Cater-

pillar, 482 U.S. at 393 (quoting Metropolitan Life Ins. Co. v.

Taylor, 481 U.S. 58, 65 (1987)). The doctrine is an exception

to the general bar against removal on account of a federal

defense. /d.

The seminal precedent, Avco Corp. v. Aero Lodge No. 735,

Int’l Ass’n of Machinists & Aerospace Workers, delineates

the controlling analysis. 390 U.S. 557 (1968). The Avco

union removed a strike injunction lawsuit, arguing that § 301

of the Labor Management Relations Act (“LMRA”) over-

whelmed the state law claim. /d. at 558-59. This Court

agreed:

An action arising under § 301 is controlled by

federal substantive law even though it is brought in

a state court.... It is thus clear that the claim

under this collective bargaining agreement is one

arising under the “laws of the United States” within

the meaning of the removal statute.

Id. at 560 (citing 28 U.S.C. § 1441(b)).

Notably, the practical recourse available after removal was

not a federal lawsuit; rather, the union was only accountable

through a contractual dispute resolution process. The lack of

judicial relief after removal was, ssonetheless, irrelevant:

“(t]he necessary ground of decision [in Avco] was that the

preemptive force of § 301 is so powerful as to displace

entirely any state cause of action [within its scope].” Fran-

chise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1,

23 (1983) (emphasis added). Accord Metropolitan Life, 48}

U.S. at 64. Hence, the breadth of a federal statute’s

preemptive “power” — not the availability of federal redress —

is the touchstone of complete preemption, as Caterpillar and

Grable \ater confirmed. See infra at 18-23.

B. The FRSA makes railroad regulatory oversight

nationally uniform.

The preemptive effect of the FRSA is no less than the stat-

ute considered in Avco. Congress federalized regulation of

the nation’s rail transportation system regulation as follows:

Laws, regulations, and orders related to railroad

safety and laws, regulations, and orders related to

railroad security shall be nationally uniform to the

extent practicable. A State may adopt or continue

in_force_a_ law, regulation, or order related to

railroad safety or security until the Secretary of

Transportation (with respect to railroad safety

matters), or the Secretary of Homeland Security

(with respect to railroad security matters), pre-

scribes a regulation or issues an order covering the

subject matter of the State requirement. A State

may adopt or continue in force an additional or

more stringent law, regulation, or order related to

railroad safety or security when the law, regulation,

or order:

(1) 1s necessary to eliminate or reduce an essen-

tially local safety or security hazard;

(2) is not incompatible with a law, regulation, or

order of the United States Government; and

(3) does not unreasonably burden interstate com-

merce.

49 U.S.C. § 20106 (emphasis added). Accord 49 C.F.R.

§ 213.2.

Pursuant to this explicit mandate state law is displaced

whenever “regulations issued by the Sccretary cover the

subject matter of the .. . allegations.” Easterwood, 507 U.S.

at 665 (emphasis added). See also CSX Transp., Inc. v.

Williams, 406 F.3d 667, 672 (D.C. Cir. 2005) (“The FRSA

preemption provision ... authorizes the court only to deter-

mine whether the regulation covers the subject matter . . . <a

(emphasis in original). The statute’s express displacement of

state law could not be clearer or more powerful.

The genesis for FRSA preemption was the threat to inter-

state commerce posed by local oversight:

[T]he railroad industry has very few local charac-

teristics. Rather, in terms of its operations, it has a

truly interstate character calling for a uniform body

of regulation and enforcement. ... To subject a

carrier to enforcement before a number of different

state administrative and judicial systems in several

areas of operation could well result in an undue

burden on interstate commerce.

H.R. Rep. No. 91-1194 (1970), reprinted in 1970

U.S.C.C.A.N. 4104, 4110-11 (emphasis added). Congress

concluded that federal oversight would promote the safe

operation of the nation’s rail transportation system, a legisla-

tive judgment entitled to judicial obeisance.*

Giving effect to this purpose, the statute vests federal

authorities with “exclusive” administration of railroad safety

regulations. 49 U.S.C. § 20111(a). To protect against the

parochial tendencies of state regulators, courts and juries,

governmental authoritics are singularly charged with FRA

enforcement, and the forum for that enforcement is expressly

federal. 49 U.S.C. § 20112 (authorizing federal court re-

course by the United States Attorney General); 49 U.S.C.

§ 20113(a) & (b) (authorizing limited federal court action by

a participating “State authority” if federal authorities fail to

* Significantly, the complete preemptive effect of railroad legislation is

not newly recognized. The Railway Labor Act and Interstate Commerce

Act have both been held to completely preempt state claims. Deford v.

Soo Line R.R. Co., 867 F.2d 1080, 1084-85 (8th Cir.) (“We believe that

the fundamental question is whether the RLA or the ICA so pervasively

occupy the field of railroad governance that a competing state law claim

necessarily invokes federal law.”), cert. denied, 492 U.S. 927 (1989).

act). The statute contemplates litigation no place other than

in federal court and subject exclusively to federal law.

C. Federal court is open for completely preempted

FRSA claims.

The Fourth and Eighth Circuits are in synch: the FRSA is

“so powerful” as to enable removal. Rayner was the first to

recognize the statute’s complete preemptive effect. In that

wrongful discharge action the employee sought to elude the

National Railroad Adjustment Board by suing in state court.

Rayner, 873 F.2d at 62-63. The case was removed and

remand denied. /d. at 63.

In affirming the jurisdictional ramifications of the FRSA

the unanimous panel heeded Congress’s judgment that “rail-

road safety is better served by uniform federal action rather

than ‘by subjecting the national rail system to a variety of

enforcement in 50 different judicial and administrative Sys-

tems.” /d. at 65 (quoting H.R. Rep. No. 91-1194, reprinted

in 1970 U.S.C.C.A.N. 4104, 4109).°

The court reasoned:

Congress’ desire for national uniformity in railroad

safety practices clearly is implicated by Rayner’s

common law claims. In one sense, of course, all

the trier of fact need do in a wrongful discharge

action is determine the reason for the discharge. In

another sense, however, Rayner’s claim of wrong-

ful discharge for “whistleblowing” is inextricably

* Rayner addressed the previous codification of preemption at 45 U.S.C.

§ 434; the renumbering of the preemption provision to 49 U.S.C. § 20106

was implemented “without substantive change.” H.R. Rep. No. 103-180,

(1993), reprinted in 1994 U.S.C.C.A.N. 818, 818. The lack of substantive

change was recognized by this Court when the § 20106 iteration of FRSA

preemption was given identical treatment in Norfolk S. Ry. Co. v. Shanklin,

529 U.S. 344 (2000) as the previous preemption provision — § 434 — con-

sidered in Easterwood.

tied to the question of precisely what railroad safety

practices he was blowing the whistle on. To the

extent that the justifiable nature of the whistle-

blowing enters the calculus in wrongful discharge

actions, railroad safety laws might be subject to an

unpredictable medley of jury determinations, which

Congress, in its quest for national uniformity under

[the FRSA], sought to avoid.

Id. at 66.

Because “[c]ongressional intent in the FRSA is clear,” the

applicable whistleblower regulation completely preempted

parallel common law claims. /d. at 63-66.° That Fourth

Circuit holding follows exactly the statutory directive.

Peters was the next circuit court precedent to allow the

FRSA’s preemptive reach to be realized. 80 F.3d at 260-62.

The Peters plaintiff contested the railroad’s refusal to return

his engineer certificate by suing for conversion. After re-

moval the preemptive realm of the FRSA was enforced in

furtherance of the statutory intent to shut state courts out of

railroad regulatory enforcement. /d. at 261 n.2 (“The FRSA’s

legislative history also emphasizes that railroad safety is

better served by uniform federal action rather than by subject-

ing the national rail system to a variety of enforcement in 50

different judicial and administrative systems.”) (quotation

omitted). As in Rayner, complete preemption was deemed to

reign whenever the subject matter of a state law claim is

“covered” by FRA regulations. /d. at 261.

The appellate court found the certification process to be

subsumed by numerous FRA promulgations, in particular 49

° Although the Fourth Circuit reflected upon the “comprehensive reme-

dial scheme for aggrieved railroad employees” provided by the relevant

regulations, the appellate court engaged in that exercise only “to confirm

its preemptive scope.” /d. at 65. The words of the statute, not the

provision of an administrative remedy, were dispositive.

C.F.R. §§ 240.401-.411. Jd. at 261-62. Such “coverage”

completely preempted plaintiff's tort claim and afforded

federal jurisdiction. Jd. at 262.’ Removal was, therefore,

affirmed.

In the wake of Rayner and Peters, the Lundeen court

readily acknowledged the FRSA’s jurisdictional implications.

447 F.3d at 612-13. In doing so the Eighth Circuit dismissed

the contention that a federal remedy must be provided before

complete preemption will lie. /d. at 613 n.4. Rather, com-

plete preemption prevails upon the finding that the subject

matter is “covered” by FRA regulations. /d. at 613-14.°

In all, three circuit court decisions have assessed FRSA

complete preemption, and each has sustained removal. The

only ostensibly contrary authority petitioners could muster is

Smallwood vy. Ill. Cent. R.R. Co., 385 F.3d 568 (Sth Cir.

2004), cert. denied, 544 U.S. 992 (2005), and even then the

case is mentioned only in passing. Smallwood arises from a

car/train accident removed on diversity grounds despite the

joinder of a non-diverse co-defendant. /d. at 571-72. The

district court concluded that diversity jurisdiction attached

because the joinder was fraudulent.

Addressing only the propriety of joinder, an en banc Fifth

Circuit sent the case back to state court. /d. at 576. The

opinion did not address, much less apply, complete preemp-

tion. Jd. at 575-76 (“The railroad could not remove on the

” Like in Rayner the Eighth Circuit noted in dicta that some of the

“covering” regulations contemplated an administrative resolution of certi-

fication disputes. /d. at 261. These rules “serve[d] to confirm [the

FRSA’s] preemptive scope,” not to establish the threshold for complete

preemption. /d.

* Between Peters and Lundeen the Eighth Circuit acknowledged com-

plete FRSA preemption in Chapman, but concluded that the claims in

question were not “covered.” 390 F.3d at 629. Without “coverage,” pre-

emption could not prevail.

basis of federal question jurisdiction because the only federal

question appeared as a defense.”). Thus there is no conflict to

resolve; the improper joinder decision in Smallwood is not

discordant with the Rayner/Peters/Lundeen harmony.”

D. Non-FRSA precedents do not repel the statute’s

jurisdictional force.

Petitioners contrive a circuit split by referencing the appli-

cation of different statutes in obviously distinguishable cases.

Pet. at 12-17. This ruse fails in its premise because the

preemptive effects of distinct statutes cannot corral the

FRSA’s jurisdictional ramifications. See, e.g., Bates v. Dow

Agrosciences LLC, 544 U.S. 431, 446 (2005) (“[C]Jourts

[have] too quickly concluded that failure-to-warn claims were

pre-empted under [the Federal Insecticide, Fungicide, and

Rodenticide Act], as they were [under the Public Health

Cigarette Smoking Act], without paying attention to the rather

obvious textual differences between the two pre-emption

clauses.”’).

For example, petitioners take the FRSA analysis in Lundeen

to task with Beneficial Nat’l Bank v. Anderson, which applied

the National Bank Act (“NBA”). 539 U.S. 1 (2003).

Importantly, the NBA does not expressly preempt state law;

instead, its limits on interest rates and contemplation of

claims are deemed to displace conflicting state law actions.

Id. at 9-11. In assessing the NBA’s complete preemptive

* The petitioners also pronounce the FRSA to be “a particularly unsuit-

able candidate for complete preemption [because of] the fine lines and

particularized factual determinations that often divide the preempted

tort claim from the non-preempted claim.” Pet. at 20. But the operative

“coverage” analysis is driven by the pleadings, not by “particularized

factual determinations.” Easterwood, 507 U.S. at 665 (“The sole issuc

here is preemption, which depends on whether the regulations issued by

the Secretary cover the subject matter of the two allegations, cach of

which we may assume states a valid cause of action.”) (emphasis added).

effect the Court considered federal cause of action availabil-

ity, but because NBA preemption must be implied the federal

relief merely reflected Congress’s preemptive intent in the

absence of a complete or clear preemptive mandate. See also

infra at 18-23. By no means did the Court announce a

new prerequisite to complete preemption applicable to all

federal schemes.

The FRSA is substantially different. Congress displaced

all “covered” state law claims with 49 U.S.C. § 20106. Con-

sequently, the analysis does not depend upon additional evi-

dence to divine preemptive intent. Regardless, all evidence

points to an unmistakable congressional purpose to preclude

railroad oversight interference by state authorities, including

the courts. See, eg, H.R. Rep. No. 91-1194 (1970),

reprinted in 1970 U.S.C.C.A.N. 4104, 4110-11 (“To subject a

carrier to enforcement before a number of different state

administrative and judicial systems in several areas of

operation could well result in an undue burden on interstate

commerce.”). The express language and clear legislative

history obviate the need to discern congressional intent from

the nature of relief available after removal, contrary to the

statute at issue in Beneficial Nat’] Bank.

Petitioners also embrace authorities like Rogers v. Tyson

Foods, Inc., 308 F.3d 785 (7th Cir. 2002). But Rogers

addresses the Poultry Products Inspection Act (“PPIA”),

which is far more limited than the FRSA. Among other

differences, the PPIA circumscribes preemption to state laws

that seek to enforce standards “in addition to, or different

than” the established federal standards. 21 U.S.C. § 467e. In

other words, PPIA preemption is not invoked so long as

charges of negligence are consistent with the standard of care

imposed by the applicable federal regulation.

In contrast, the FRSA preempts all state claims regardless

of whether they are different from or in addition to FRA

mandates. See, e.g., Shanklin, 529 U.S. at 358 (if regulatory

“coverage” exists, “[i]t is this displacement of state law con-

cerning the [subject matter], and not . . . adherence to the

federal standard . . . that preempts state tort actions”)

(emphasis added). This wholesale preemption of all “covered”

claims 1s far more expansive than the PPIA’s “not in addition

to or different than” preclusion of state law. Consequently,

the extent of the FRSA’s preemptive effect cannot be meas-

ured by inapposite authorities like Rezers.

Again, the discrete statutory language controls when pre-

emption is express. As a result, the terms of more con-

strained preemptive provisions cannot define § 20106’s

impact on this litigation. Obvious textual distinctions prevent

analyses applicable to dissimilar legislation from being pro-

jected onto the FRSA im order to contrive the supposed

conflict upon which this Petition is based.

E. Certiorari review is not justified.

The Court has long recognized the doctrine of complete

preemption, and Lundeen brings the total of appellate prece-

dents that have enforced the FRSA’s complete preemptive

effect to three. There is no jurisprudential need for the Court

to weigh in on this most recent application of well-established

authority. Sup. Ct. R. 10 (“A petition for a writ of certiorari

is rarely granted when the asserted error consists of . . . the

misapplication of a properly stated rule of law.”).

No circuit court has ever rejected, much less distinguished,

Rayner, Peters, or Lundeen, and those decisions are firmly

rooted in the FRSA’s purposes. Accepting review on the basis

of divergent non-FRSA authorities would be disruptive: the

mere possibility that claims might experience a different out-

come under an inapplicable and substantively different preemp

tive scheme would become the rationalization for certiorari

review. The issue that drives the analysis is the displacement

of state law effected by the FRSA, not the result that might be

produced by some other statute’s preemption provision. Until

there is a true FRSA conflict among the circuits the Court has

no reason to squander certiorari review on Lundeen’s applica-

tion of complete preemption. Sup. Ct. R. 10.

il. FEDERAL REMEDY AVAILABILITY IS NOT

DISPOSITIVE

Certiorari review would not be warranted even if the

conflict conjured up by petitioners was more than a chimera.

The Court has taught that post-removal relief controls neither

the complete preemption calculus nor any other federal ques-

tion determination. This FRSA litigation is not an appropri-

ate vehicle for the Court to impose an absolute condition

upon the invocation of federal jurisdiction, especially when

the Court has already spoken to the contrary.

A. A substitute federal remedy is not the jurisdic-

tional sine qua non.

Petitioners want federal remedy availability to be the pass-

port for removal. That result would re-write Avco, in which

the Court blessed removal of a labor dispute despite federal

law preclusion of the relief sought. 390 US. at 560-61.

From that very beginning the Opportunity to secure satisfac-

tory redress after removal has not been a predicate to federal

jurisdiction: “The nature of the relief available after jurisdic-

tion attaches is, of course, different from the question whether

there is jurisdiction to adjudicate the controversy.” Jd. at 561.

Avco reiterated this critical distinction to emphasize the

removability of precluded state claims even though the dis-

placing federal statute affords no satisfactory remedy: “[T]he

breadth or narrowness of the relief which may be granted

under federal law in § 301 -cases is a distinct question from

whether the court has jurisdiction over the parties and the

subject matter.” /d. In the Court’s view. “{a]ny error in

granting or designing relicf ‘docs not go to the jurisdiction of

the court.”” /d. (quoting Swift & Co. v. United States, 276

U.S. 311, 331 (1928)) (citation omitted).

The federal jurisdiction / federal relief distinction was

amplified in Caterpillar, which arose out of a contract action

venued in state court. 482 U.S. at 390. The complaint sought

redress under California law, but the defendant removed to

federal court because the individual employment arrange-

ments had been merged into collective bargaining agree-

ments. /d. The district court retained jurisdiction and

dismissed for failure to state an LMRA claim. /d.

The Ninth Circuit reversed for reasons that mirror petition-

ers’ argument to this Court:

A state law cause of action has been “completely

preempted” when federal law both displaces and

supplants the state law — that is, when federal law

provides both a superseding remedy replacing the

state law cause of action and preempts that state

law cause of action. ... These are two distinct

inquiries, both of which must be satisfied to permit

removal of an action to federal court.

Williams v. Caterpillar Tractor Co., 786 F.2d 928, 932 (9th

Cir. 1986) (emphasis in original). The rationale as ex-

plained as follows:

Although this argument [that a federal remedy is

not necessary for removing completely preempted

claims] is persuasive, and not directly contradicted

by the Supreme Court’s decision in Franchise Tax

Board, we decline to follow it. It has long been the

law in this circuit that removal jurisdiction lies only

when federal law supplants, as well as displaces,

state law. The existence of a substitute federal

remedy, in addition to preemption, is required by

our precedent.

Id. at 932 n.2.

This Court flatly rejected the suggestion that “a case may

not be removed to federal court on the ground that it is

completely pre-empted unless the federal cause of action

relied upon provides the plaintiff with a remedy.” Caterpillar,

482 U.S. at 391 n.4. Conditioning removal jurisdiction

upon the provision of a federal remedy was “squarely

contradicted by [this Court’s] decision in Avco.” Id. Avco

was read to have

held that a § 301 claim was properly removed to

federal court although, at the time, the relief sought

by the plaintiff could be obtained only in state

court. We reasoned as follows: “The nature of the

relief available after jurisdiction attaches is, of

course, different from the question whether there is

jurisdiction to adjudicate the controversy... . [T]he

breadth or narrowness of the relief which may be

granted under federal law in § 301 cases is a dis-

tinct question from whether the court has juris-

diction over the parties and the subject matter.”. . .

Thus, although we affirm the Court of Appeals’

judgment, we reject its reasoning insofar as it is

inconsistent with Avco.

Id. (quoting Avco, 390 U.S. at 561).'°

Avco and Caterpillar belie the argument that complete

preemption is conditioned «pon a substitute remedy being at

hand. Like the Eighth Circuit, the Solicitor General whole-

heartedly supports that conclusion:

"Petitioners urge the adoption of authorities like Schmeling v

NORDAM, 97 F.3d 1336 (10th Cir. 1996) to promote a federal remedy re-

moval prerequisite. But that court’s open hostility to Caterpillar exposes

the jurisprudential flaws upon which Schmeling and its brethren are based.

Id. at 1341 (Caterpillar “strayed from the narrow path”); id. (“Caterpillar

neglected the emphasis in the previous cases . . . ”); id. at 1343 (“Rightly

or.wrongly, the Supreme Court read the ‘superseding remedy’ language as

contrary to Avco’s holding that the nature of the relief available is

irrelevant to the jurisdictional question.”’) (emphasis added).

Avco demonstrates that a plaintiff's ostensible state-

law claim may come within the scope of a federal

cause of action and be completely preempted, even

if the cause of action does not provide the plaintiff

with a remedy. Caterpillar, 482 U.S. at 391 n.4.

Avco thus supports an argument that a plaintiff's

claims may fall within the scope of a federal cause

of action and be completely preempted, even if the

plaintiff is unable to state a valid claim under the

cause of action, provided that the plaintiff's claim is

within the field regulated by the cause of action.

Brief for the United States as Amicus Curiae, Davis v. Int’]

Union, United Automobile, Aerospace & Agriculture Imple-

ment Workers of America, at 19 (U.S. May 2006) (No. 05-

107) (Resp. App. at 74a-100a) (emphasis added) (internal

citation omitted).

The Solicitor General’s reasoning shows the way: “[W]hen

the limits on the federal cause of action are an integral part of

the federal scheme, it would seem counterintuitive to find a

claim to be not completely preempted precisely because it

seeks relief antithetical to the pervasively federal regime.”

Id. For the same reason this case cannot become the means

for diminishing the FRSA’s preemptive effect exactly be-

cause the statue’s preempting force is, in fact, “complete.”

The enactment’s pervasive scope allows for no state law

governance of railroads; that congressional judgment must be

respected.

B. Grable lays the federal remedy prerequisite

contentions to rest.

Avco’s recognition that federal jurisdiction is not depend-

ent upon federal remedy availability was endorsed by Grable,

which arose out of a quiet title action calling an IRS property

seizure into question. 545 U.S. at 310-11. Although the

claim was a creature of state law, removal jurisdiction was

invoked based upon the inherent federal question. /d.

This Court affirmed jurisdiction because substantial federal

issues were implicated even though no federal remedy was

provided. /d. at 314-15. Grable eschewed the suggestion

that an alternative federal remedy alone affords federal forum

access. /d. at 317-18 (discussing Merrell Dow Pharms., Inc.

v. Thompson, 478 U.S. 804 (1986)). Instead, the Court

reminded that Merrell Dow had “disclaimed the adoption of

any bright-line rule” and “treat{[ed] the absence of a federal

private right of action as evidence relevant to, but not

dispositive of, the sensitive judgment about congressional

intent that § 1331 requires.” /d. at 317 (emphasis added).

The “primary importance” of federal remedy unavailability in

Merrell Dow only “emerged when the Court treated the com-

bination of no federal cause of action and no preemption of

state remedies for misbranding as an important clue to Con-

gress’s conception of the scope of jurisdiction to be exercised

under § 1331.” Jd. at 318 (emphasis added). In contrast,

§ 20106 expressly preempts state law of all stripes as soon as

regulatory “coverage” is extended.

Grable’s treatment of general § 1331 jurisdiction follows

the specific complete preemption doctrine applied in Avco,

Caterpillar, and the decision below. Those precedents reject

a federal remedy as talismanic of federal jurisdiction. Unlike

in Merrell Dow and cases like Beneficial Nat’l Bank, the

absence of a parallel remedy in the FRSA adds nothing to the

comprchensive preemption that Congress necessarily effected

by displacing all “covered” state claims. The statute’s un-

equivocal language obviates the nced to search for clues

about congressional intent as might be required when legisla-

tion is less explicit, like with the NBA.

C. Settled precedent challenges do not warrant

certiorari review.

The scope of preemption expressed by the FRSA could not

be more broad. All that is necessary is regulatory “coverage.”

To the extent circumstantial evidence about legislative intent

is apposite, the jurisdictional mandate is evident without

regard to a parallel remedial scheme:

[S]afety in the nation’s railroads [is not] advanced °

sufficiently by subjecting the national rail system to

a variety of enforcement in 50 different judicial and

administrative systems.

* * *

[Indeed,] the railroad industry has very few local

characteristics. Rather, in terms of its operations, it

has a truly interstate character calling for a uniform

body of regulation and enforcement. ... To subject

a carrier to enforcement before a number of

different state administrative and judicial systems in

several areas of operation could well result in an

undue burden on interstate commerce.

H.R. Rep. No. 91-1194 (1970), reprinted in 1970

U.S.C.C.A.N. 4104, 4109, 4110-11.

In the words of the Solicitor General, to hamstring the

preemptive effect of the FRSA precisely because petitioners

seek “relief antithetical to the pervasively federal regime”

would be perverse. The Eighth Circuit’s refusal to graft a

federal remedy prerequisite onto the removal jurisdiction

afforded by FRSA complete preemption complies with this

Court’s admonishments in Avco, as born out in both

Caterpillar and Grable. As such, the Eighth Circuit did not

come close to departing “from the accepted and usual course

of judicial proceedings.” Sup. Ct. R. 10. The Court does not

need to make jurisdictional pronouncements that would

simply reaffirm existing law.

CONCLUSION

Because there is no circuit conflict regarding the FRSA’s

jurisdictional effect, and because the Court has already

rejected the imposition of a federal remedy prerequisite upon

complete preemption and all other federal question juris-

diction, the Petition should be denied.

Respectfully submitted,

TIMOTHY ROBERT THORNTON

Counsel of Record

SCOTT G. KNUDSON

KEVIN M. DECKER

BRIGGS AND MORGAN, P.A.

2200 IDS Center

80 South Eighth Street

Minneapolis, MN 55402

(612) 977-8400

Attorneys for Respondents

Canadian Pacific Railway

Company, et al.

APPENDIX

APPENDIX A

STATE OF MINNESOTA

COUNTY OF HENNEPIN

Tom Lundeen, individually, and

Nanette Lundeen, individually,

and Tom Lundeen and Nanette

DISTRICT COURT

FOURTH JUDICIAL DISTRICT

Court File No.

Case Type: Personal Injury

Lundeen on behalf of, and as

parents and natural guardians of

Molly Lundeen, a minor, and

Michael Lundeen,

COMPLAINT AND DEMAND

FOR JURY TRIAL

Plaintiffs,

-VS-

Canadian ‘Pacific

Company, Canadian Pacific

Limited, Canadian Pacific

Railway Limited and Soo Line

Railroad Company,

Railway

Defendants.

COMES NOW the Plaintiffs and bring this action for

personal injury and property damage against the Defendants,

and in furtherance of these claims, allege and state a follows:

The Plaintiffs are Tom Lundeen, individually, and Nanette

Lundeen, individually, ant Tom Lundeen and Nanette

Lundeen, on behalf of and as parents and natural guardians o:

Molly Lundecen, a minor, and Michael Lundeen, who was a

minor at the time, who al resided at 716 36" Street S.W.,

Minot, North Dakota on January 18, 2002, and assert that

they were injured and damaged in their person and property

on that date as a result o: actions or inactions by the

Defendants.

If.

Defendant, Soo Line Railroad Company is a corporation

duly organized and existing under the laws of the state of

Minnesota with its principal place of business located at 50]

Marquette Avenue, Minneapolis, Minnesota.

Il.

Defendant, Soo Line Railroad Company is a wholly-owned

subsidiary of Defendant, Canadian Pacific Railway-Company

which, in turn, is a wholly-owned subsidiary of Defendant,

Canadian Pacific Limited. Defendant, Canadian Pacific

Railway Limited, is a Canadian corporation and a related

company to the other Defendants. All of these Defendants did

business in the state of Minnesota at relevant times to this

cause of action. Defendants, Canadian Pacific Railway

Company, Canadian Pacific Limited, Canadian Pacific

Railway Limited, and Soo Line Railroad Company were all

related companies and bear the responsibility and fault for the

train derailment subsequently described in paragraph VIII.

These Defendants shall be hereinafter collectively referred to

as “Defendant CPR.”

IV.

Defendant CPR is a duly licensed railroad in the United

States and authorized to operate a system of railroads as a

common carrier of freight in and through the states of North

Dakota and Minnesota and including Hennepin County,

Minnesota, as well as in other states in the United States of

America and in Canada.

Defendant CPR is subject to the rules, regulations,

governance and obligated to comply with all regulations of

the United States of America including the Federal Railroad

Administration (FRA) and subject to, among other

obligations, compliance with

FRA regulations and the Code of Federal Regulations

(CFR) and all other regulations of the states of North Dakota

and Minnesota and the United States of America for the

operation of a railroad.

VI.

Defendant CPR is subject to the jurisdiction of this court in

that the headquarters of Defendant CPR in the United States

is located in Hennepin County, Minnesota, and critical

decisions made by Defendant CPR were made in Hennepin

County, Minnesota, including management decisions

concerning track installation, track maintenance, assignment

of personnel, allocation of resources, train operations,

regulatory compliance and all manner of decisions affecting

equipment, operations and resources of Defendant CPR.

VIL.

Defendant CPR operates a railway that extends from

beyond Medicine Hat, Alberta, Canada, to beyond St. Paul,

Minnesota, and which runs northwest to southeast through the

state of North Dakota. The track in North Dakota is part of

the St. Paul Service Area. That portion of the track in the St.

Paul Service Area in northwestern North Dakota is denoted as

the Portal Subdivision. That portion of the track in the Portal

Subdivision from approximately Kenmare, North Dakota, to

approximately Minot, North Dakota, is denoted as the

Kenmare Section. The derailment described in paragraph VIII

occurred in the St. Paul Service Area, Portal Subdivision,

Kenmare Section of Defendant CPR’s main line track.

Vill.

At approximately 1:37 A.M. on January 18, 2002, an

eastbound CPR freight train, designated 292-16, traveling

about 41 miles per hour, derailed 31 of its 112 cars

approximately one-half mile west of the city limits of Minot,

North Dakota, at a location designated as MP ‘ 471.65. Five

tank cars containing liquefied anhydrous ammonia

catastrophically ruptured, _instantaneously releasing

approximately 146,700 gallons of anhydrous ammonia. Seven

pressurized tank cars were damaged, which subsequently lost

some or all of their contents, resulting in an additional release

of approximately 74,000 gallons of liquefied anhydrous

ammonia, for a total release of anhydrous ammonia of

approximately 221,000 gallons. This incident shall hereinafter

be referred to as the “Minot Derailment.”

IX.

At all times relevant, to the Minot Derailment, the train.

track, ballast, sub-ballast, lading, equipment, maintenance,

operations and personnel were all under the governance,

supervision, administration and control of Defendant CPR.

but subject to regulatory provisions of state and federal law.

The tracks at the location of the Minot Derailment were

classified as FRA Class 3 Track with a maximum speed limit

for freight trains of 40 miles per hour, subject to a lower but

not higher speed by regulation or CPR order. The CPR train

designated 292-16 was travelling in excess of the authorized

track speed at the time and location of the Minot Derailment,

in excess of a reasonable speed for conditions at the time of

the Minot Derailment, and in excess of a proper speed by

regulation.

XI.

The tracks in the Kenmare Section were represented and

contended to be continuous welded rail, a designation which

purports to be and represents a claim that the rail is without

joints, splices or plugs. In fact, at the time of the Minot

Derailment between mile post 471 and 472, there were ten or

more joints representing five or more plugs, which did not

meet. the definition of continuous welded rail and which, in

turn, affects authorized and reasonable speed of trains. Joints

are, and it is well known to Defendant CPR, much weaker

and more prone to failure than continuous welded rail.

XII.

The track at the time and place of the Minot Derailment

was 100-pound rail, which is the lightest weight rail in use in

the Defendant CPR’s rail system. Defendant CPR has over

14,000 miles of track in its system with only 65 miles of 100-

pound rail on its main line track. The entire 65 miles of 100-

pound rail in CPR’s rail system is found in North Dakota and

two-thirds of it is located in the Kenmare Section, the

remainder being in the adjoining section southeast of the

Kenmare Section. 100-pound rail is considered lightweight

rail not suitable for use on main lines that bear the amount of

traffic experienced by the track in question. The Defendant

CPR has increased track usage from approximately fifteen

million tons per year in 1992 to twenty-five million tons per

year, and this increased traffic heightens and increases the

probabilities of failure, particularly with the 100-pound

lightweight rail.

XIII.

The track at the time and place of the Minot Derailment

was installed in 1973, but was not new at the time of its

installation, having been salvaged from another location

believed to be in Wisconsin. The rail had been manufactured

sometime in the 1950’s-making it nearly fifty years old.

Further, the rail was worn, brittle and problematic. As a

result, the rail required frequent repairs as defects were

discovered, which Defendant CPR chose to repair by

installing plugs, creating two joints per plug instead of

welding. The height of the plugs used by Defendant CPR do

not match the height of the existing wom rail which, in turn,

puts additional stresses on the joints and increases the

probability, if not likelihood, of catastrophic derailments.

Plugs are far less safe than welding but less expensive to

CPR. CPR knew plugs were less safe but chose them to save

money.

XIV.

Defendant CPR is aware of and acknowledges that rail

containing joints is more likely to have separations, gaps,

pull-aparts, breaks or other failures during extremely cold

weather. Yct, during these times Defendant CPR furloughed

track maintenance workers and declined to perform normal

track maintenance, walking inspections or other inspections

designed to determine the presence of problems at joints,

including (but not limited to) cracked or broken joint bars,

bent or loose bolts, rail end batter and other clear indications

of problems likely to result in catastrophic derailments.

XI.

Defendant CPR has conducted a systematic and planned

reduction in force, including reducing personnel intended to

maintain and service its main line track in North Dakota. CPR

further designated work to the remaining maintenance

personnel in such a way as to prevent or severely curtail

welding of temporary joints. Defendant CPR further

discontinued the use of inspection and ultrasonic testing

devices which had, as their purpose, the identification of

cracked or broken joint bars. The use of such inspection and

testing devices had been implemented by CPR following the

hereinafter described Burlington Derailment which occurred

in 1994, and which was caused by the same negligent acts or

omissions as those that caused the Minot Derailment.

XVI.

Defendant CPR had adopted standards and practices for its

track, track maintenance, equipment and other matters

relating to the main line track effective for the time and place

of the Minot Derailment. Defendant CPR failed to adequately

train, inform, test or otherwise implement and verify that its

practices and procedures had been learned and implemented

by its personnel prior to the Minot Derailment.

XVI.

The Minot Derailment was caused by an ineffective and

inadequate inspection and maintenance program by

Defendant CPR. CPR’s inspection and maintenance program

failed to identify or replace cracked joint bars before those

joint bars completely fractured. This cracking led to a rail

separation, causing CPR train designated 292-16 to derail

which, in turn, caused the failure of pressurized tank cars

releasing 221,000 gallons of anhydrous ammonia, which

blanketed the area adjacent to the tracks and engulfed many

homes in the Minot and Minot area.

XVIII.

The Minot Derailment was caused by two broken joint bars

at a joint located at mile post 471.65 in Defendant CPR’s

Kenmare Section which was designated by its configuration

as a “temporary” joint. The broken joint bars were installed in

the north rail at milepost 471.65 in May of 2000. Joints

designated as temporary should be welded as soon as

practical, but certainly within thirty days of installing the joint

bars. CPR failed to weld the temporary joint for more than 20

months following its installation.

XIX.

The joint that failed and led to the Minot Derailment was

repaired by CPR in the summer of 2001 when it was

discovered that there were loose, bent or otherwise damaged

bolts and nuts. Loose, damaged, bent or broken nuts and bolts

are indicia of rail stress which, in turn, are indicia of likely or

imminent failure of a joint, requiring prompt, if not

immediate, welding of the rail and, in the interim, a reduction

in speed to decrease the probability of a catastrophic

derailment. CPR failed to weld the temporary joint for more

than six months following its repair and failed to reduce train

speed.

XX.

The nuts and bolts at joints, whether temporary or

permanent, are required to be torqued to 550-foot pounds.

The nuts and bolts at mile post 471.65 were removed

following the derailment and found to be 54-foot pounds,

126-foot pounds, 205-foot pounds and 402- foot pounds, all

of which are far below the specification of 550-foot pounds

for rail joint nuts and bolts and that loose nuts and bolts

results in additional stresses on railed joints and which, in

turn, lead to joint bar failure and resulting derailments.

XXI.

CPR has acknowledged that nuts and bolts are installed

using pneumatic torque wrenches which are supposedly pre-

set to 550-foot pounds. CPR, however, acknowledges that it

does not check, reset, or otherwise verify that its torque

wrenches are property set. CPR further acknowledges that

occasionally nuts and bolts are installed, reinstalled or

serviced using hand tools which do not measure torque,

making it impossible to know whether the nuts and bolts are

properly torqued.

XXII.

The bolts comprising the joint at mile post 471.65 showed

evidence of fretting and were bent, indicative of stress on the

joint in the form of longitudinal forces that cause or

contribute to joint bar failure and resulting derailments.

XXII.

The east end of the plug and the west end of the rail at mile

post 471.65 both, showed evidence of batter far in excess of

that permitted by Defendant CPR and far in excess of what is

reasonable. Specifically, batter was not to exceed .015 inches

and at the time of the derailment was between .06 and 19

inches, which is between four times and fourteen times the

amount of batter that should cause Defendant CPR to weld

the joint into solid rail and which is further indicative of joint

stress as well as likely or imminent joint failure and resulting

derailments. CPR acknowledges that, notwithstanding this

requirement, it failed to measure rail end batter and failed to

provide necessary but basic devices to its inspectors for

measuring batter

XXIV.

Rail end batter at joints to the degree found following the

Minot Derailment develops over time. Therefore, the joint

problems were evident for some time prior to the Minot

Derailment.

XXV.

Defendant CPR’s standards and practices require that

adjoining rail and plugs must be fully box anchored at every

tie for 195 feet from cach joint. The joint at mile . post 471.65

was anchored only at every other tie and the old anchors were

reinstalled following the insertion of the plug rather than

installing new anchors. Anchors are intended to minimize

longitudinal stresses and movement of the track and the

installation of only one-half of the number of anchors

necessary make more likely, if not inevitable, the failure of

the joint and resulting derailments.

XXVI.

Defendant CPR failed to comply with applicable rules,

regulations, standards, guidelines and practices including, but

not limited to, rules and regulations of the Federal Railroad

Administration, applicable provisions of the Code of Federal

Regulations, Defendant CPR’s own standard practice

circulars and industry wide standards. These violations were

as the result of and under the direction of the Defendant

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CPR’s management and were developed, examined,

reviewed, implemented, or not, as the case may be, by

management of Defendant CPR in Hennepin County,

Minnesota with full knowledge that its equipment and

personnel were placed in the impossible situation of trying to

maintain safe track and train operations with woefully

inadequate resources and commitment and that as a

consequence, derailments were likely, if not inevitable.

XXVII.

On February 27, 1994, a derailment occurred on Defendant

CPR’s main line at mile post 477.1, which is approximately

5.5 miles west of the Minot Derailment on the same main line

track and also in the Kenmare Section. The February 27,

1994, derailment resulted in a tanker car containing liquid

butane bursting into flames and causing serious, permanent,

devastating bum injuries to a then 16-year-old boy, and for

which Defendant CPR compensated that 16-year-old boy.

This derailment shall herein be referred to as the “Burlington

Derailment.”

XXVIII.

The Burlington Derailment, like the Minot Derailment, was

caused by undiscovered fractured joint bars, inadequate

inspection, inadequate repair and essentially the same causes

as the Minot Derailment.

XXIX.

Investigation of the Minot Derailment concluded numerous

irregularities and defective conditions were known prior to,

and after, the Burlington Derailment, and certainly before the

Minot Derailment. Said deficiencies and irregularities are

identical or very similar to the deficiencies and irregularities

that caused the Minot Derailment. As a result, Defendant

CPR knew or should have known well the consequences of

such deficiencies and irregularities as evidenced by the

ila

catastrophic injuries to the 16-year-old boy in the Burlington

Derailment.

XXX.

Subsequent to the Burlington Derailment, Defendant CPR

instituted a program of welding joints in the Kenmare Section

into continuous welded rail. Defendant CPR _ then

discontinued that welding program and, as a result, numerous

joints existed in the Kenmare Section and including at least

ten joints between mile post 471 and 472 at the time of the

Minot Derailment.

XXXII.

Following the Burlington Derailment, Defendant CPR

instituted a procedure where hand-held ultrasonic devices

were used to identify cracked or broken joint bars. The

ultrasonic testing of joint bars was discontinued sometime

prior to the Minot Derailment, while at the same time

Defendant CPR continued to install additional plugs. Other

than walking inspections and ultrasonic testing of joint bars,

there is no effective means for inspecting joint bars for cracks

and failures. The inspection system used by Defendant CPR

at the time of the Minot Derailment and for many years

before, was ineffectual, unreliable and known by Defendant

CPR to be such. Notwithstanding that information, Defendant

CPR failed to implement an effective means of inspection

and/or testing of joint bars and elimination of joints in a

timely manner by welding.

XXXII.

Prior to the Minot Derailment, Defendant CPR suffered a

derailment in 1988 near Bordulac, North Dakota, on the same

main line track, which resulted in a derailment of tank cars

carrying anhydrous ammonia. This derailment caused the

release of large quantities of anhydrous ammonia in a rural

area and resultant contamination of air and soil.

12a

XXXII.

Defendant CPR has experienced three derailments on its

main line in North Dakota, each resulting in catastrophic

failure of pressurized tank cars, and the release of hazardous

and toxic chemicals with resultant serious personal injury and

property damage. Yet, it failed to adequately inspect and

maintain its track in a conscious disregard to public health

and safety with known disastrous consequences and with little

or no apparent concern for public safety or property, putting

profits ahead of and in place of public safety.

XXXIV.

Defendant CPR, following the Burlington Derailment,

reduced its train speeds from 40 miles per hour to 25 miles

per hour in the Kenmare Section. Subsequently, in 1998,

Defendant CPR eliminated the joints in the main line by

welding. Thereafter, Defendant CPR increased the speed of

its trains to 40 miles per hour. The increase in speed revealed

numerous defects which, in turn, resulted in the insertion of

numerous plugs into the main line. At the same time,

Defendant CPR decreased welding of joints and discontinued

ultrasonic testing which, in turn, created the same situation

that existed at the time of the Burlington Derailment, thereby

making it inevitable that a subsequent catastrophic derailment

would occur again. Even so, Defendant CPR continued to

maintain its speed at 40 miles per hour with full knowledge of

the risk of catastrophic consequences and that a derailment

was almost certain.

XXXV.

The area of the Minot Derailment is “dark territory” which

is track that has no system for automatically notifying or

warning Defendant CPR if there is a pull-apart, break in the

line or other problem. Defendant CPR has “signal territory”

for most, if net all, of its other track. Track in “signal

territory” which provides an automatic warning of track

l3a

separation or failure. By failing to provide signal in the area

where the Minot Derailment occurred while, at the same time,

reducing manpower, using 100-pound rail, reducing

maintenance crews, reducing equipment, reducing

inspections, increasing speed, installing numerous temporary

joints, reducing welding of joints, eliminating ultrasonic

testing, diverting manpower and resources to less critical

purposes, and otherwise simply ignoring public safety and

good operating practices, Defendant CPR created an

unreasonable risk of derailments and resulting injuries and

damages.

XXXVI.

Defendant CPR made conscious and deliberate choices and

in disregard of known hazards and dangers with known

consequences of catastrophic derailments and the resulting

likelihood of death, severe personal injury and massive

property damage.

XXXVII.

Defendant CPR made its decisions for the sole purpose of

increasing profits and compensation of its executives and

shareholders and at the expense and detriment of the public’s

safety, knowing all the while that their acts and omissions

were wrongful and/or likely to result in derailments which, in

turn, cause death, severe personal injury and massive property

damage.

XXX VIII.

Plaintiffs have suffered serious personal injury, property

camage, disability, impairment, medical expenses, lost

income, lost productive time, unnecessary expenses and

services, pain, suffering, cconomic and non-economic losses,

for which they are entitled to compensation, having a value to

be determined by the finder of fact.

l4a

XXXIX.

Plaintiffs allege that the acts or omissions of Defendant

CPR warrant a finding for exemplary or punitive damages as

determined by the finder of fact. Defendant CPR is put on

notice that leave of court will be sought to amend these

pleadings to assert a claim for exemplary or punitive damages

THE PLAINTIFFS REALLEGE ALL ALLEGATIONS

SET FORTH PREVIOUSLY IN THIS COMPLAINT AS

TO EACH COUNT HEREINAFTER STATED AS

THOUGH EACH ALLEGATION WERE SET FORTH

IN EACH COUNT

COUNT ONE

The Minot Derailment was directly and proximately caused

as a result of the negligence, gross negligence, carelessness,

recklessness and willful, wanton, intentional and deliberate

acts and omissions of the Defendant CPR.

I].

Defendant CPR acted with willful indifference, and

deliberate and conscious disregard for the rights and safety of

others by failing to properly inspect, maintain, replace and

repair its tracks; by increasing track usage beyond that which

the track could reasonably handle; by operating the train at

the Minot Derailment in excess of track speed or in excess of

a reasonable speed; by refusing to install and maintain signal

in the territory; by refusing to adequately provide

maintenance crews: improper allocating of resources;

inadequate or lack of supervision or direction of employees

and equipment; and other acts which caused its equipment to

deteriorate into and remain in a defective and dangerous

condition in close proximity to populated areas with full

knowledge of the consequences of its acts and/or omissions

lSa

which included the probability of death, serious personal

injury and massive property damage from train derailments.

II.

Defendant CPR is guilty of one or more of the following

acts of negligence, carelessness, recklessness, and deliberate

acts with willful indifference and reckless and conscious

disregard to the rights and safety of others, including the

Plaintiffs:

Failure to adopt, install, implement, train and

enforce a safe method and procedure for the

proper inspection, maintenance, upkeep and repair

of the tracks, road bed, rails and equipment at the

time and location of the Minot Derailment;

Failure to properly construct, inspect, maintain

and ,epair the tracks, road bed, rails and other

property including equipment and lading;

Failure to properly supervise, regulate and operate

in North Dakota the safe movement of its engines,

cars and lading;

Negligent operation of CPR train designated 292-

16;

. Failure to properly construct, inspect, repair and

maintain the tracks, including the failure to hire or

maintain a sufficient workforce to adequately and

safely maintain the tracks when Defendant, CPR

knew the tracks were carrying hazardous, toxic,

explosive, dangerous and ultra-hazardous material

on tracks which are near peoples homes while

knowing that there was a high degree of

probability, if not certainty, of death, serious

personal injury and/or property damage;

Substantially increasing traffic loads on the

Kenmore Section, while at the same time

l6a

installing numerous plugs or other repairs,

curtailing or discontinuing welding and

discontinuing use of inspections intended to find

cracked or broken joint bars, on track that

Defendant CPR knew or should have known could

not handle the loads, usage or speeds imposed;

. Failing to install a signal system which would

notify Defendant CPR in the event of breaks or

pull-aparts of its track;

. Discontinuing the use of devices intended to

identify cracks or breaks in joint bars;

Delaying, severely curtailing or discontinuing

welding of joints for unreasonable lengths of time,

even in the face of joint problems discovered and

known to exist, or which should have been

discovered;

Knowing of and ignoring, or purposefully

ignoring, or implementing procedures and

practices which Defendant CPR knew full well

would not disclose or would allow dangerous or

defective conditions to exist in its track which

amount to purposeful avoidance of information

affecting public safety and including inadequate

training of personnel, non-measurement of rail end

batter, inadequate, unmeasured torquing of bolts,

excessive spacing between rail end and plug, non-

walking inspections, non-use of ultrasonic joint

bar testing devices, use of old, worn, deficient rail,

improperly reusing rail, mismatching rail height,

inadequate anchoring, ignoring bent, damaged

nuts and bolts, inadequate or non-existent record

keeping, unreasonably delaying of welding of

joints, and other acts representing a corscious

17a

disregard of facts or a conscious disregard of the

likelihood of facts; and

K. Failing to adopt, implement and comply with

necessary and required policies and procedures as

required by state and federal law, and further

failing to comply with requirements of state and

federal law including, but not limited to,

requirements of the FRA and CFR.

L. Other acts of negligence, carelessness,

recklessness, willful, wanton and intentional and

deliberate acts or failure to act which caused the

Minot Derailment and, consequently, the damages

suffered by the Plaintiffs.

COUNT TWO

IV.

Defendant CPR engaged in, at the time of the Minot

Derailment, an ultra-hazardous or extra-hazardous activity, as

defined by Minnesota law or the applicable law, and is

strictly liable to the Plaintiffs for the damages suffered by the

Plaintiffs while engaging in such activity.

COUNT THREE

The Defendant CPR violated applicable state law, both

North Dakota and Minnesota, as well as United States law,

resulting in the release of hazardous substances and which

amount to contamination, pollution, unauthorized release of

hazardous material and other violations of applicable

“environmental laws” and for which Defendant CPR is

strictly liable for damages occasioned thereby, including, but

not limited to, personal injury, property damage, statutory

18a

penalties, actual attorney’s fees, and other damages as

specified in applicable environmental laws.

COUNT FOUR

VI.

The acts and omissions of Defendant CPR created a

nuisance by the release of anhydrous ammonia, which

damaged the Plaintiffs for which Plaintiffs are entitled to

recover damages and all other remedies at law.

COUNT FIVE

VIL.

Defendant CPR caused, allowed, or otherwise permitted

lading under its exclusive control and direction to trespass

onto the property and person of the Plaintiffs, resulting in

damages to the Plaintiffs and their property for which

Defendant CPR is liable.

COUNT SIX

VUl.

Defendant CPR was engaged in an abnormally dangerous

activity: the transportation of hazardous material in populated

areas. As such, Defendant CPR is subject to liability for harm

to persons and property resulting from such activities even if

Defendant CPR exercised the utmost care being strictly liable

for damages suffered by the Plaintiffs.

COUNT SEVEN

IX.

Defendant CPR is liable to the Plaintiffs for their damages

as the result of CPRs breaches of statutory rules and

19a

regulations including, but not limited to, violations of FRA

rules and regulations, violations of the Code of Federal

Regulations, violations of Defendant CPR’s standard practice

circulars and other applicable state or federal law or

administrative regulatory agencies of the states of North

Dakota and Minnesota and the United States government.,

JURY TRIAL DEMANDED

Plaintiffs demand trial by the maximum number of jurors

permitted by law.

PRAYER FOR RELIEF .

WHEREFORE, Plaintiffs pray for relief against Defendant

CPR for damages for pain, suffering, disability, impairment,

personal injury, property damage, economic and non-

economic damages, mental anguish and all other damages

proximately caused by Defendant CPR’s wrongful acts or

omissions for which Plaintiffs are entitled to compensation in

an amount exceeding $50,000.00, together with attorncy’s

fees, costs, disbursements herein, and penalties provided by

applicable law, and for such other and further relief as the

court deems just and equitable.

Dated this 28th day of June, 2004.

BY:

Collin P. Dobrovolny (ND License #03295)

Bryan L. Van Grinsven (ND License #05357 And MN

License #261312)

MCGEE, HANKLA, BACKES & DOBROVOLNY, P.C.,

152°" Avenue SW - Wells Fargo Bank Center PO

Box 998

Minot, ND 58702-0998

Telephone No. (701) 852-2544

ATTORNEYS FOR PLAINTIFFS

20a

APPENDIX B

UNITED STATES DISTRICT COURT

DISTRICT OF MINNESOTA

[Filed Jan. 29, 2004]

CIVIL NO. 03-3093 (ADM/JSM)

MELISSA AND RICHARD ALLENDE.

Plaintiffs,

500 LINE RAILROAD COMPANY, a Minnesota corporation

d/b/a Canadian Pacific Railway, and CANADIAN PACIFIC

RAILWAY LIMITED, a Canadian Corporation

Defendants.

REPORT AND RECOMMENDATION

The above matter came on for hearing before the under-

signed upon plaintiffs’ Motion to Remand [Docket No. 8].

Daniel O'Fallon, Esq. appeared on behalf of the plaintiffs;

Timothy Thornton, Esq. and Scott Knutson, Esq. appeared on

behalf of defendants. The matter was referred to the under-

signed by the District Court for a Report and Recommenda-

tion pursuant to 28 U.S.C. § 636 (b)(1 )(B).

For the reasons discussed below, it is recommended that

plaintiffs’ Motion to Remand be granted.

FACTUAL BACKGROUND

On January 18, 2002, defendants were operating a freight

train on a single track traveling eastbound. See Complaint,

{ V. Plaintiffs claim that the freight train encountered a

“rough patch” of track. Jd. Subsequently, 31 of the freight

train’s cars derailed near Minot, North Dakota. Jd Seven of

2la

the cars allegedly contained anhydrous ammonia that plain-

tiffs claim formed a cloud that blanketed the City of Minot,

North Dakota, and the surrounding areas. Id. Plaintiffs claim

they were exposed to the 2004 anhydrous ammonia that

escaped into the air as a result of the freight train’s

derailment. /d. at § IV. Plaintiffs brought an action in

Minnesota District Court, Hennepin County, alleging that

defendants’ negligence resulted in their physical injury and

emotional harm. Specifically, plaintiffs assert that the

following actions by defendants led to the derailment and

release of anhydrous ammonia:

e Failure to adopt, install, implement and enforce a safe

method and procedure for the proper inspection,

maintenance, upkeep and repair of its tracks, roadbed,

property and rails;

e Failure to properly construct, inspect, maintain and

repair its roadbed, tracks, rails and properties, includ-

ing the failure to install appropriate weighted track,

failure to weld joints, failure to install permanent

joints when wielding would not be possible in a

timely fashion, failure to inspect the track on a regular

basis using appropriate available technology, such as

the KrautKremer device;

e Failure to exercise due care in the operation, inspec-

tion, maintenance and repair of tracks:

e Transporting dangerous chemicals on tracks that

defendants knew or should have known where danger-

ous, hazardous and certain to cause derailments; and

e Making the deliberate decision to reduce its workforce

at the expense of maintaining its tracks, roadbed, rails

and railway system.

See Complaint, 4 XVI.

Plaintiffs allege no federal statutes as the basis for their

22a

claims or any federal cause of action in their Complaint.

Nevertheless, defendants removed plaintiffs’ action to the

United States District Court, District of Minnesota, under the

complete precmption doctrine, relying on two federal statutes,

the Federal Railroad Safety Act (“the FRSA”) and the Inter-

state Commerce Commission Termination Act (“ICCTA”),

for the basis of the removal. Plaintiffs have brought the

present motion to remand to state court on grounds that

complete preemption does not exist in this case because the

FRSA and ICCTA do not create a private cause of action that

replaces the plaintiffs’ common law negligence claims.

DISCUSSION

I. Complete Preemption

Under 28 U.S.C. § 1441(b), an action filed in state court

may be removed to federal court if the claim is one “arising

under” federal law, i.e. arises under the Constitution, treaties

or laws of the United States. In determining whether a claim

arises under federal law, a court examines “the well pleaded’ ©

allegations of the complaint and ignore[s] potential defenses:

‘a suit arises under the Constitution and the laws of the

United States only when the plaintiff's statement of his own

cause of action shows that it is based upon those laws or that

Constitution.”’ Beneficial Nat. Bank v. Anderson, U.S.. 123

S.Ct. 2058, 2062, 156 L.Ed.2d 1 (2003) (quoting Louisville &

Nashville R. Co. v. Mottley, 211 U.S. 149, 152, 29 S.Ct. 42,

53 L.Ed. 126 (1908)) (citation omitted). In other words, the

well-pleaded rule requires that federal jurisdiction be present

on the face of a properly pleaded complaint in order to invoke

the jurisdiction of the federal court. See Gore v. Trans World

Airlines, 210 F.3d 944, 948 (8th Cir. 2000) (citation omitted).

An exception to the well-pleaded complaint rule is the

complete preemption doctrine. Jd. at 949: see also Magee v.

Exxon Corp., 135 F.3d 599, 601 (8th Cir. 1998) (citing

Caterpillar Inc. v. Williams, 482 U.S. 386, 393, 107 S.Ct.

23a

2425, 2430, 96 L.Ed.2d 318 (1987)). “The complete pre-

emption doctrine converts an ordinary state-law claim into a

federal claim where ‘the pre-emptive force of a statute is so

‘extraordinary’ that it ‘converts an ordinary state common-

law complaint into one stating a fedcral claim for purposes of

the well-pleaded complaint rule.”’ Gore, 210 F.3d at 948

(quoting Catepillar Inc., 482 U.S. at 393, 107 S.Ct. 2425,

quoting Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58. 65,

107 S.Ct. 1542, 95 L.Ed.2d 55 (1987)). Under the complete

preemption doctrine, “[o|]nce an area of state law has been

completely pre-empted, any claim purportedly based on that

pre-empted state law is considered, from its inception, a fed-

eral claim, and therefore, arises under federal law.” Magee,

135 F.3d at 601 (quoting Caterpillar Inc., 482 U.S. at 393.

“Congressional intent is the touchstone of the complete

preemption analysis.” /d. at 601; see also Minnesota ex rel.

Hatch v. Worldcom, Inc., 125 F.Supp.2d 365, 369 (D. Minn.

2000) (“‘[T]he touchstone of the federal district court’s re-

moval jurisdiction is not the ‘obviousness’ of the pre-emption

defense but the intent of Congress.”) (quoting Metropolitan

Life, 481 U.S. at 66, 107 S.Ct. at 1548)).

“When reviewing a motion to remand, a court must resolve

all doubts about federa} jurisdiction in favor of remand.”

Blaylock v. Hynes, 104 F. Supp.2d 1184, 1186 (D. Minn.

2000) (citing Jn re Bus. Men’s Assurance Co of Am., 992

F.2d 181, 183 (8th Cir. 1993)). “Because of the obvious

federalism implications of the complete-preemption doctrine,

its application has been extremely limited by the courts.”

C. Wright, A. Miller, and E. Cooper, 14B Federal Practice

and Procedure: Jurisdiction 3d § 3722.1, at 517 (1998). Con-

sequently, it is a conclusion courts reach reluctantly. Moline

Machinery, Ltd. v. Pillsbury Co., 259 F. Supp.2d 892, 896 (D.

Minn. 2003) (quoting Gaming Corp. of America v. Dorsey &

Whitney, 88 F.3d 536, 543 (8th Cir. 1996)).

24a

Plaintiffs are seeking damages for personal injury and emo-

tional distress arising out of defendants’ alleged negligence

under Minnesota common law. Thus, plaintiffs’ “well plead-

ed” complaint, on its face, includes only state law claims.

This Court must therefore remand this case to state court

unless it can find that the FRSA or ICCTA completely pre-

empts plaintiffs’ state law claims.

Defendants claim that plaintiffs’ state law claims for negli-

gence are completely preempted by Congress’ enactment of

the FRSA and the ICCTA, because the statutes so pervasively

regulate railroad matters, especially rail safety. . . .” See

Canadian Pacific Railway’s Opposition to Motion to Remand

(“Defs.” Memo.”) at p. 7. Plaintiffs, on the other hand, argue

that neither the FRSA nor the ICCTA completely preempt

their action because the statutes do not provide them with a

cause of action that replaces their common law negligence

claim for personal injuries. See Plaintiffs’ Memorandum of

Law in Support of its Motion to Remand, at p. 9. Defendants

cite to Avco Corp. v. Aero Lodge No. 735, Intern. Ass’n of

Machinists and Aerospace Workers, 390 U.S. 557, 88 S.Ct.

1235, 20 L.Ed.2d 126 (1968), Franchise Tax Bd of State of

Cal. v. Construction Laborers Vacation Trust for Southern

California, 463 U.S. 1, 103 S.Ct. 2841, 77 L.Ed.2d 420

(1983), and Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58,

107 S.Ct. 1542, 95 L.Ed.2d 55 (1987), in an attempt to

counter plaintiffs’ assertion that a replacement cause of action

is required for complete preemption. In order to address the

positions of both plaintiff and defendant, it is necessary to

review not only Avco, Franchise Tax Board and Metropolitan

Life, but also the Supreme Court’s decisions in Caterpillar

and Beneficial National Bank.

In Avco, the plaintiff filed a suit in Tennessee state court to

enjoin its union employees from striking at its plant. 390 U.S.

at 558, 88 S.Ct. at 1236. The focus of the complaint was a

“no-strike” clause in the collective bargaining agrcement,

25a

pursuant to which “grievances” between plaintiff and its

union employees were to be settled amicably or by binding

arbitration. Jd. The union removed the case to federal court,

citing § 301’ of the Labor Management Relations Act (the

“LMRA”) as the basis of federal court jurisdiction. /d. at 558-

59. 1236-37. The plaintiff subsequently moved to remand the

case to state court. /d. at 558-59, 1236. The Court found that

remand to state court was not appropriate, explaining as

follows:

The starting point is § 301 of the Labor Management

Relations Act, 1947, 61 Stat. 156, 29 U.S.C. § 185,

which, we held in Textile Workers Union of America v.

Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d

972, was fashioned by Congress to place sanctions

behind agreements to arbitrate grievance disputes. We

stated: ‘We conclude that the substantive law to apply in

suits under § 301(a) is federal law, which the courts

must fashion from the policy of our national labor laws.

* * * The Labor Management Relations Act expressly

furnishes some substantive law. It points out what the

parties may or may not do in certain situations. .

Federal interpretation of the federal law will govern, not

state law. But state law, if compatible with the purpose

of § 301, may be resorted to in order to find the rule that

will best effectuate the federal policy. * * * Any state

law applied, however, will be absorbed as federal law

and will not be an independent source of private rights.’

An action arising under § 301 is controlled by federal

substantive law even though it is brought in state

' Section 301(a) provides: “Suits for violation of contracts between an

employer and a labor organization representing employees in an industry

affecting commerce as defined in this chapter, or between any such labor

organizations, may be brought in any district court of the United States

having jurisdiction of the parties, without respect to the amount in con-

troversy or without regard to the citizenship of the parties.” 29 U.S.C.

§ 185(a).

26a

court. ... Removal is but one aspect of “the primacy of

the federal judiciary in deciding questions of federal law.

(Citations omitted.] It is thus clear that the claim under

this collective bargaining agreement is one arising under

the “laws of the United States” within the meaning of the

removal statute. 28 U.S.C. § 1441(b). It likewise seems

clear that this suit is within the “original jurisdiction”

of the District Court within the meaning of 28 U.S.C.

§§ 1441(a) and (b).

Id. at 559-60, 1237 (quoting Textile, 353 U.S., at 456-57, 77

S.Ct., at 917-18).

The Avco Court recognized that the “breadth or narrowness

of the relief which may be granted under federal law . . . is a

distinct question from whether the court has jurisdiction over

the parties and the subject matter.” /d. at 561, 1238. As such,

it did not matter to the Court that federal courts were not able

to provide injunctive relief in that case. However, the Avco

Court did recognize that § 301 provided some form of relief

to the plaintiff in the form of “specific performance of the

promise to arbitrate, to enforcement or annulment of an

arbitration award, to an award of compensatory damages.” /d.

(citations omitted).

In Franchise Tax Board v. Construction Laborers Vacation

Trust, 463 U.S. 1, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983), the

principle question in dispute was whether the Employment

Retirement income Security Act (“ERISA”), permitted state

tax authorities to collect unpaid state income taxes by levying

on funds that were held in trust for the defendants under an

ERISA-covered vacation benefit plan. Jd. at 4, 2843. The

Franchise Tax Board commenced a suit in state court against

the defendants seeking damages for defendants’ failure to

honor the levies and for a declaration that defendants were

legally obligated to honor all future levies of the Board. /d. at

7, 2845. The defendants removed the case to federal court.

and the Franchise Tax Board sought to remand the case back

27a

to state court. The defendants argued that the decision in Avco

should be applied to ERISA so as to completely preempt the

taxing authority’s state suit for monetary and declaratory

relief. Jd. at 22-26, 2853-2855. The United States Supreme

Court rejected the defendants’ argument finding that ERISA

did not completely preempt the Board’s suit and remanded

the case back to state court. In reaching its conclusion, the

Supreme Court stated that Avco “stands for the proposition

that if a federal cause of action completely preempts a state

cause of action any complaint that comes within the scope of

the federal cause of action necessarily ‘arises under’ federal

law.” Jd. at 23-24, 2854 (emphasis added). The Court stated

the necessary ground for complete preemption in Avco was

that “the pre-emptive force of § 301 is so powerful as to

displace entirely any state cause of action ‘for violation of

contracts between an employer and a labor organization’ .

(such that] [a]ny such suit is purely a creature of federal

law... .” Jd. at 23, 2853-54. The Court then found that the

Board’s action for damages was not completely preempted

under ERISA, the Board part, because § 502(a) taken in

conjunction with § §02(e)(1),° did not provide it with an

alternative cause of action to replace the state claim, (“ERISA

does not provide an alternative cause of action in favor of the

State to enforce its rights, while § 301 expressly supplied the

plaintiff in Avco with a federal cause of action to replace its

preempted state contract claim”), and in part, based on the

legislative history of ERISA. Id. at 24-27, 2854-55.

? Section 502(a) describes who is entitled to bring a civil action under

ERISA: plan participants, beneficiaries, fiduciaries, the Secretary of Labor,

and a state. Section 502(c)(1) states that “[except for actions under sub-

section (a)(l )(B) of this section, the district courts of the United States

shall have exclusive jurisdiction of civil actions under this subchapter

brought by the Secretary or by a participant, beneficiary, for] fiduciary

28a

Similarly, in connection with the Board’s claim for de-

claratory relief, the Court stated:

ERISA carefully enumerates the parties entitled to seek

relief under § 502; it does not provide anyone other than

participants, beneficiaries, or fiduciaries with an express

cause of action for a declaratory judgment on the issues

in this case. A suit for similar relief by some other party

+ does not “arise under” that provision.

Id. at 27, 2855.

In Metropolitan Life Insurance Co. v. T aylor, 481 U.S. 58,

107 S.Ct. 1542, 95 L.Ed2d 55 (1987), a former employee

sued his former employer and its insurer in state court alleg-

ing claims of breach of contract, retaliatory discharge and

wrongful termination of disability benefits. The employer and

insurer removed the case to federal court alleging federal

question jurisdiction over the disability benefits claim by

virtue of ERISA and pendent jurisdiction over the remaining

claims. /d. at 61, 1545. The Supreme Court found that the

employee’s state law contract and tort claims were com-

pletely preempted by ERISA, and his suit to recover benefits

from a covered plan, fell directly under § 502(a)(1)(B) of

ERISA,’ which provided an exclusive federal cause of action

for resolution of such disputes. Jd. at 63. 1546 (citation

omitted). In reaching its decision, the Supreme Court stated

that “the touchstone of the federal court’s removal jurisdic-

tion is . . . the intent of Congress.” Jd. at 66, 1548. It then

identified the relevant intent as one “to make causes of action

within the scope of the civil enforcement provisions of

§ 502(a) removable to federal court.” /d. In search of such

* § 502(a)(1 )(B) of ERISA provides: A civil action may be brought—

(1) by a participant or beneficiary—

(B) to recover benefits due to him under the terms of his plan, to

enforce his rights under the terms of the plan, or to clarify his rights to

future benefits under the terms of the plan

29a

intent, the Metropolitan Life Court noted ERISA’s uniquely

expansive express preemption clause:

““The district courts of the United States shall have

jurisdiction, without respect to the amount in contro-

versy or the citizenship of the parties, to grant the relief

provided for in subsection (a) of this section in any

action.”

Id. at 65, 1547 (quoting 29 U.S.C. § 1132(f)).

In ascertaining the intent of Congress, the Court also

looked to the legislative history of ERISA, and found that this

history set out a clear intention to make § 502(a)(1)(B) suits

brought by participants or bencficiaries federal questions for

the purpose of federal jurisdiction in like manner of § 301 of

the LMRA. /d. at 66, 1547-1548. In this regard, the Court

stated:

Senator Williams, a sponsor of ERISA, emphasized that

the civil enforcement section would enable participants

and beneficiaries to bring suit to recover benefits denied

contrary to the terms of the plan and that when they did

so ‘[i]t is intended that such actions will be regarded as

arising under the laws of the United States, in similar

fashion to those brought under section 301 of the Labor

Management Relations Act.’

Id. at 66, 1547-48 (quoting 120 Gong. Rec. 29933 (1974))

(citation omitted).

In Caterpillar, decided shortly after Metropolitan Life, the

Supreme Court was again confronted with the issue relating

to the preemptive effect of the LMRA. In Caterpillar, the

dispute arose out of state law breach of employment contract

claims involving contracts with individual employees and not

their collective bargaining agreement 482 U.S. at 394-95, 107

S.Ct at 2431. Caterpillar removed the case to federal court

on grounds that any individual employment contracts were

merged into and superceded by the collective bargaining

30a

agreement of the parties, and therefore, were governed by

federal substantive law. Jd. at 390, 2428. Citing to Metro-

politan Life and Franchise Tax Board. the Supreme Court

stated:

On occasion, the Court has concluded that the pre-

emptive force of a statute is so ‘extraordinary’ that it

‘converts an ordinary common-law complaint into one

stating a federal claim for purposes of the well-pleaded

complaint rule. Once an area of state law has been

completely pre-empted, any claim purportedly based on

that pre-empted state law is considered, from its incep-

tion, a federal claim, and therefore arises under federal

law.

Id. at 393, 2430.

The Supreme Court then concluded that § 301 of the

LMRA did not preempt the plaintiffs’ individual breach

of contract claims, stating, “[S]ection 301 governs claims

founded directly on rights created by collective-bargaining

agreements, and also claims ‘substantially dependent on

analysis of a collective-bargaining agreement. . . . Section

301 says nothing about the content or validity of individual

employment contracts. Jd. at 394, 2431 (citations omitted).

Further, the Court stated:

[N]ot every dispute concerning employment, or tangen-

tially involving a provision of a collective-bargaining

agreement, is pre-empted by § 301 or other provisions of

federal labor law. Claims bearing no relationship to a

collective bargaining agreement beyond the fact that

they are asserted by an individual covered by such a

agreement are simply not pre-empted by § 301. See also

Franchise Tax Board, 463 U.S. at 25, n. 28. 103 S.Ct. .

at 2854, .. 28 (‘[E]ven under § 301 we have never

intimated that any action merely relating to a contract

within the coverage of § 301 arises exclusively under

that section. For instance, a state battery suit growing out

3la

of a violent strike would not arise under § 301 simply

because the strike may have been a violation of an

employer-union contract.’)

Id. at 397, 2432 n. 10 (citation omitted).

Finally, in Beneficial Nat. Bank v. Anderson, _ U.S. _,

123 S.Ct. 2058, 156 L.Ed.2d 1 (2003), the Supreme Court

was presented with the issue of whether state “usury

violations” alleged in the complaint were completely

preempted by the National Bank Act. /d. at 2061. In this case,

taxpayers made pledges of their anticipated tax refunds to

secure short-term loans obtained from Beneficial National

Bank, a bank chartered under the National Bank Act. The

taxpayers then brought a suit in state court alleging that the

bank’s interest rates were usurious. /d. The bank removed the

case to federal court alleging that the National Bank Act

preempted the suit.

The Supreme Court analyzed its previous decisions in

Avco, Franchise Tax Board, and Metropolitan Life. With

respect to Metropolitan Life, it held that removal based on

ERISA was proper for two reasons:

First, the statutory text in § 502(a), 29 U.S.C. § 1132,

not only provided an express federal remedy for the

plaintiffs’ claims, but also in its jurisdiction subsection,

§ 502(f), used language similar to the statutory language

construed in Avco, thereby indicating that the two stat-

utes should be construed in the same way. 481 U.S., at

65, 107 S.Ct. 1542. Second, the legislative history of

ERISA unambiguously described an intent to treat such

actions as arising under the laws of the United States in

similar fashion to those brought under section 301 of the

Labor-Management Relations Act of 1947.” /d., at 65-

66, 107 S.Ct. 1542 (internal quotation marks and empha-

Sis omitted).

Thus, a state claim may be removed to federal court

in only two circumstances--when Congress expressly so

provides, such as in the Price-Anderson Act. supra. a

2062, or when a federal statute wholly displa

State-law cause of action through complete pre-emptior

When the federal statute completely pre-cmpts the stat

law cause of action, a claim which comes withi

scope of that cause of action, even if pleaded tn terms

State law, is in reality based on federal law. In the tw

categories of cases where this Court has found complete

pre-emption—certain causes of action under the LMRA

and ERISA—-the federal statutes at issue provided the

exclusive cause of action for the claim asserted and also

set forth procedures and remedies governing that cause

of action. See 29 U.S.C. § 1132 (setting forth procedures

and remedies for civil claims under ERISA): § 185 (de-

scribing procedures and remedies for suits under the

LMRA).

Id. at 2062-2063.

The Court then stated that the dispositive question in the

case before it was this. “Does the National Bank Act provide

the exclusive cause of action for usury claims against national

banks? If so, then the cause of action necessarily arises under

federal law and the case is removable. If not, then the

complaint does not arise under federal law and is not

removable.” /d. at 2063. The Supreme Court concluded that

the National Bank Act did preempt the taxpayers’ suit based

on the provisions of the Act* and the intention of Congress to

provide the exclusive cause of action for usury claims against

national banks. /d. at 2064.

*The Court found that § 85 of the Act explicitly set forth the

substantive limits on the rates of interest national banks could charge, and

§ 8 of the Act sct forth the elements of a usury claim, the statute of

‘wnntatroris for such a claim, the remedies available to borrowers who are

charged higher rates, and the procedures governing such a claim. /d. at

2063.

33a

Taken together, Avco, Franchise Tax Board, Metropolitan

Life, Caterpillar and Beneficial National Bank stand for this:

“Whether federal law preempts a state-law cause of action is

a question of congressional intent” Gore, 210 F.3d at 949

(citation omitted); see also Agre v. Rain & Hail LLC, 196 F.

Supp.2d 905, 911 (D. Minn. 2002) (citing Marcus v. AT&T

Corp., 138 F.3d 46, 54 (2d Cir. 1998)) (the complete

preemption doctrine applies only where Congress has clearly

manifested an intent to disallow state law claims in a particu-

lar field); Blaylock, 104 F. Supp.2d at 1187 (“The jurisdic-

tional question concerning ‘complete preemption’ centers on

whether it was the intent of Congress to make the cause of

action a federal cause of action and removable despite the fact

that the plaintiffs complaint identifies only state claims.”)

(quoting Whitman v Raley’s Inc., 886 F. 2d 1177, 1181 (9th

Cir. 1989)). Such Congressional intent has only been found

by the Supreme Court in those cases where (1) the federal

statute at issue contains some sort of remedial framework for

the plaintiffs claim; (2) the plaintiff was eligible to bring a

claim under that remedial framework; and (3) Congress has

evinced its intent to provide the exclusive cause of action for

that claim. However, these cases do not stand for the

proposition that the federal law must provide a superseding

remedy to replace the state cause of action. To the contrary,

such a premise was explicitly rejected by the Supreme Court

in Caterpillar where the Court stated:

The nature of the relief available after jurisdiction at-

taches, is of course, different from the question of

whether there is jurisdiction to adjudicate the contro-

versy. The breadth or narrowness of the relief which

may be granted under federal law in § 30! cases is a

distinct question from whether the court has jurisdiction

over the parties and the subject matter.

Caterpillar Inc., 482 U.S. at 391, 107 S.Ct. at 2429 (quoting

Avco, 390 U.S. at 561, 38 S.Ct. at 1237-38).

34a

With this framework in mind, this Court must determine

whether Congress intended the FRSA or ICCTA to provide

the exclusive civil remedy for plaintiffs’ negligence personal

injury claims.

Il. Federal Railroad Safety Act

Defendants allege plaintiffs’ claims are completely pre-

empted because the FRSA and regulations arising out of the

FRSA address the subject matter of plaintiffs’ claims. See

Defs.’ Memo. at p. 13. The FRSA was passed in 1970 “to

promote safety in every area of railroad operations and reduce

railroad-related accidents and incidents.” 49 U.S.C. § 20101.

Congress also created the FRSA to ensure that railroad safety

would be “‘nationally uniform to the extent practicable.

Peters v. Union Pacific R. Co., 80 F.3d 257, 261 (8th Cir.

1996) (quoting 45 U.S.C. § 434). The FRSA delegates to the

Secretary of Transportation the authority to “prescribe

regulations and issue orders for every area of railroad safety

supplementing laws and regulations in effect on October 16,

1970.” 49 U.S.C. § 20103(a).

Defendants point to 49 U.S.C. § 20106 to demonstrate the

preemptive force of the FRSA. This provision states:

Laws, regulations, and orders related to railroad safety

and laws, regulations, and orders related to railroad secu-

rity shall be nationally uniform to the extent practicable.

A State may adopt or continue in force a law, regulation,

or order related to railroad safety or security until

the Secretary of Transportation (with respect to railroad

safety matters), or the Secretary of Homeland Security

(with respect to railroad security matters), prescribes a

regulation or issues an order covering the subject matter

of the State requirement.

49 U.S.C. § 20106.

35a

While it is true that the FRSA and its accompanying regu-

lations, provide extensive control over railroad safety, the fact

Congress has established an ordered regulatory scheme does

not mean that it intended to preempt all state law claims

within a particular field. See Acre, 196 F. Supp.2d at 911

(citation omitted); Smith v. GTE Corp., 236 F.3d 1292, 1313

(11th Cir. 2001) (finding that FCC regulations standardizing

certain aspects of telephone industry insufficient to create

complete preemption); Virgil v. Reorganized M.W. Co., Inc.,

156 F. Supp.2d 624, 631 (S.D. Miss. 2001) (“Not even Con-

gressional intent to impose a uniform legal standard will

necessarily imply its intent to establish complete preemption

and hence federal removal jurisdiction.”)).

Defendants cite to Peters v. Union Pacific R. Co., 80 F.3d

257 (8th Cir. 1996) and Rayner v. Smirl, 873 F.2d 60 (4th Cir.

1989) for the proposition that complete preemption applies to

the FRSA.° See Defs.’ Memo. at pp. 11-12. In Peters, the

* Defendants have cited to several other cases which they acknowledge

arise out of the defensive preemption doctrine, as opposed to the complete

preemption context. Nonetheless, defendants claim these cases have bear-

ing on whether the FRSA and its regulations dealing with railway safety

are so powerful as to displace entirely any state cause of action. See Defs.’

Memo. at p. 8 n. 2: see e.g., CSX Transp., Inc. v. Easterwood, 507 U.S.

658, 675 113 S.Ct. 1732, 1743, 123 L.Ed.2d 387 (1993) (finding that that

the FRSA regulations on speed limits for trains preempted plaintiff's

state negligence claim that the conductor was going too fast.). This Court

reaches no decision as to defensive preemption under cither the FRSA or

the ICCTA as that issue is not before this Court. The “jurisdictional issue

of whether ‘complete preemption’ exists is very different from the sub-

stantive inquiry of whether a ‘preemption defense’ may be established.”

Blaylock, 104 F. Supp.2d at 1187 (citation omitted). “A case may not be

removed to federal court on the basis of a federal defense, including the

defense of pre-emption, even if the defense is anticipated in the plaintiffs

complaint, and even if both partics concede that the federal defense is the

only question truly at issue.” Caterpillar Inc., 482 U.S. at 393, 107 S.Ct.

at 2430 (emphasis in original) (citation omitted). Moreover, the exclusiv-

ity of @ statute together with its broad scope, without a federal cause of

action that the plaintiff could have plead, Is not enough under the

36a

railroad company issued the plaintiff a locomotive engineer

certificate, under the the FRSA, which permitted him to

operate a locomotive. 80 F.3d at 259 (citation omitted). The

railroad company suspended the plaintiffs certificate for

violating several locomotive operating regulations. Jd. The

plaintiff filed an action in state court alleging that the railroad

company had converted his certificate because it had not

retumed it after the one-month suspension. /d. at 260. The

court in Peters noted that pursuant to the FRSA, the Secretary

of Transportation had issued preemptive regulations concern-

ing engineer certification including:

[A] specific, detailed scheme setting out dispute resolu-

tion procedures. See 49 C.F.R. §§ 240.401-240.411

(1993). The regulations establish a review board to con-

sider petitions challenging a railroad’s denial of certi-

fication or recertification, or revocation of certification.

49 C.F.R. § 240.401(a), Any person denied certification

can petition the Locomotive Engineer Review Board

(Board) to determine whether the denial was improper.

49 C.F.R: § 240.401(a) (1993). Any party adversely

affected by the Board’s decision has a right of appeal. 49

C.F.R. § 240.411 (1993).

Id. at 261. The Eighth Circuit found that the comprehensive

remedial scheme provided by these regulations served to

confirm the FRSA’s preemptive scope with regards to issues

relating to the certification of locomotive engineers. /d.

(citing Rayner, 873 F.2d at 65).

In Rayner, the plaintiff alleged that he observed several

safety violations and reported them to his superiors. 873 F.2d

Supreme Court’s decisions in Avco, Franchise Tax Board. Metropolitan

Life, Caterpillar and Beneficial National Bank to create complete preemp-

tion. See Aaron v. National Union Fire Ins. Co. of Pittsburgh, Pa, 876

F.2d 1157, 1165-66 (Sth Cir. 1989), cert. denied, 493 U.S. 1074, 110 S.Ct.

1121, 107 L.Ed.2d 1028 (1990).

37a

at 62. The plaintiff was subsequently removed from his

position as a road foreman and reassigned as a locomotive

engineer. Id. The plaintiff alleged that the railroad removed

and reassigned him in retaliation for safety complaints he

made regarding the operation of the railroad. /d. The plaintiff

filed suit in state court asserting a wrongful discharge action

under Maryland law. Defendants removed the action to

federal district court, claiming that the plaintiffs state claim

for wrongful discharge was preempted by the FRSA. /d. at

62-63. The court disagreed with the plaintiff's assertion that

the FRSA had no preemptive effect on his claims because it

lacked a remedy, since the amendments to the FRSA in 1980

afforded explicit protection to whistleblowers. Jd. at 63 (cit-

ing 45 U.S.C. § 441(a)). The court in Rayner, like the Eighth

Circuit in Peters, found that “comprehensive remedial scheme

for aggrieved railroad employees provided in § 441 serves to

confirm its preemptive scope” —

The parties may petition for a hearing before the Na-

tional Railroad Adjustment Board and may be repre-

sented by counsel. An employee who prevails before the

Board may seek enforcement of the Board’s order in the

federal district courts, and either party may petition the

federal district courts for review of the Board’s deci-

sions. See generally 45 U.S.C. § 153. The specific reme-

dies for wrongfully discharged workers are also set

forth. The Board may award backpay to aggrieved rail-

road employees and may order employers to reinstate

discharged or demoted employees to their previous

positions. See 45 U.S.C. § 441(c)(2).

Rayner, 873 F.2a at 65. The court found that Congress in-

tended the federal remedy in § 441 to supersede state law in

dealing with “whistleblowers” because the “specific remedial

scheme illustrates a congressional intent that the FRSA rem-

edy for railroad ‘whistleblowers’ be exclusive.” /d. (citation

omitted). ,

38a

The difference between the present case and Peters and

Rayner is that the FRSA and its regulations explicitly pro-

vided remedial schemes for the injuries alleged by the

plaintiffs in Peters and Rayner, whereas in this case, the

FRSA and its supporting regulations do not have in place any

remedial framework to redress the plaintiff's personal inju-

ries.° “To determine whether state-law claims fall within the

scope of the provision, a court must first discern whether the

plaintiff is eligible to bring a claim under the section.”

Blaylock, 104 F. Supp. 2d at 1188 (citation omitted). See also

State of Minn. by Ulland v. International Ass’n of Entrepre-

neurs of America, 858 F. Supp. 937, 942 n. 9 (D. Minn. 1994)

(citing Franchise Tax. Bd., 463 U.S. at 26, 103 S.Ct. at 2855)

([It is} “important for the purposes of complete preemption

to determine whether [federal law] provides an alternative

cause of action for any state laws claims it might preempt.”);

Johnson v. Baylor Univ., 214 F.3d 630, 632 (Sth Cir.) cert.

denied, 531 U.S. 1012, 121 S.Ct. 567, 148 L.Ed.2d 486

(2000) (finding that to establish complete preemption, the

party claiming preemption must show that “the statute con-

tains a civil enforcement provision that creates a cause of

action that both replaces and protects the analogous area of

State law . . . .”) (citing Heimann vy. Nat’! Elevator Ind

Pension Fund, 187 F.3d 493, 501 (5th Cir. 1999)); Kelley v.

Norfolk & Southern Railway Co., 80 F. Supp.2d 587, 590 n. 3

(S.D.W.V. 1999) (citation omitted) (“If the Court finds that

[the FRSA] does in fact provide Kelley a remedy, the Court

has no doubt that Kelley’s claims for intentional infliction of

cmotional distress would be preempted.”).

°In fact, defendants are not claiming that plaintiffs would have a

FRSA-created cause of action for the facts they allege. See Hurt v. Dow

Chemica! Co., 963 F.2d 1142, 1144 (8th Cir. 1992) (finding that the

Federal Insecticide, Fungicide, and Rodenticide Act (“FLFRA”) did not

completely preempt state claims as it did not create a cause of action for

the facts pled by the plaintiff and “no one clairs that plaintiff would have

a FLFRA-created cause of action for the facts she alleges.”)

39a

Moreover, this Court can find no suggestion in the legisla-

tive history of the FRSA that Congress intended to create a

cause of action on behalf of third parties injured by a rail-

road’s violation of the safety rules and regulations promul-

gated by the Secretary of Transportation pursuant to the

FSRA. See H.R. Rep. 91-1194, U.S. Code Cong. & Admin.

News 1970. To the contrary, while the legislative history of

the FRSA is permeated with references to railroad safety,

descriptions of horrific injuries caused by railroad accidents

(including derailments resulting in the spillage or explosions

of hazardous materials), and the need for national and

uniform regulations to prevent such accidents (see e.g., H.R.

Rep. 91-1194, U.S. Code Cong. & Admin. News 1970, pp.

4105-4108), it is clear that the focus of the FRSA is on the

regulation and control of railroads for the purpose of

preventing future accidents, and not on the provision of a

mechanism or a remedy to redress those persons who are the

victims of an accident. Consequently, to the extent that the

legislative history of the FRSA discusses the enforcement of

and remedies for violation of the Act, it is limited to the

Secretary of Transportation’s or individual state’s authority to

seek compliance with the Secretary’s regulations through the

assessment of penalties or requests for injunctive relief

against any railroad which violates. See H.R. Rep. 91-1194,

U.S. Code Cong. & Admin. News 1970, pp. 4109-4111,

4112-4113, 4118-4121.

Therefore, based on the language of the FRSA and the

legislative history leading up to its enactment, this Court does

not find that Congress intended for the FRSA to provide the

exclusive cause of action for plaintiffs’ claims. Since the

FRSA does not completely preempt plaintiffs’ claims, it can-

not form the basis of removal of this case to federal court.’

” Defendants’ arguments that 49 U.S.C. §§ 21301-21303 provide an

enforcement mechanism to persons injured as a result of an accident in-

volving a railroad are without merit. Sections 21301-21303 only provide

40a

Ill. Interstate Commerce Commission Termination Act

Defendants claim that based on the express language of the

ICCTA, this Act completely preempts plaintiffs’ state negli-

gence claims for personal injury and emotional distress result-

ing from the train derailment. It is true that the ICCTA

provides that its purpose, in part, is to promote safe rail

transportation. See 49 U.S.C. § 10101(3), (8)).° In addition,

under § 1121(a)(1) of the ICCTA, the Surface Transportation

Board (“STB”), to whom the regulation of a railroad’s

operations have been delegated pursuant to the ICCTA, “may

require a rail carrier to provide facilities and equipment that

are reasonably necessary to furnish safe and adequate car

service if the Board decides that the rail carrier has materially:

failed to furnish that service.” 49 U.S.C. § 1121(a)(1).

Further, 49 U.S.C. § 11704 (a) and (b) state:

(a) A person injured because a rail carrier providing

transportation or service subject to the jurisdiction of the

Board under this part does not obey an order of the

Board, except an order for the payment of money, may

that violations of the FRSA will result in civil penaltics payable to the

United State Government. It provides no civil enforcement mechanisms to

those injured as a result of a violation of the FRSA or its supporting

regulations.

°49 U.S.C. § 10101 provides in relevant part:

In regulating the railroad industry, it is the policy of the United

States Government—

* * *

(3) to promote a safe and efficient rail transportation system by

allowing rail carriers to earn adequate revenues, as determined by

the Board;

*-_ * *

(8) to operate transportation facilities and equipment without det-

riment to the public health and safety . . . .

4la

bring a civil action in a United States District Court to

enforce that order under this subsection.

(b) A rail carrier providing transportation subject to the

jurisdiction of the Board under this part is liable for

damages sustained by a person as a result of an act or

omission of that carrier in violation of this part. A rail

carrier providing transportation subject to the juris-

diction of the Board under this part is liable to a person

for amounts charged that exceed the applicable rate for

the transportation.

49 U.S.C. § 11 704 (a)-(b).

Finally, under the ICCTA, the jurisdiction of the STB, pur-

suant to 49 U.S.C. § 10501(b), extends over:

(1) [T]ransportation 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 carri-

ers; 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.”

* With regards to the express preemption clause contained in 49 U.S.C.

§ 10501(b)(2), courts have found that “‘[i]t is difficult to imagine a broad-

er statement of Congress’ preemption intent to preempt state regulatory

authority over railroad operations.”* See Soo Line Railroad Co. v. City of

Minneapolis, 38 F. Supp.2d 1096, 1099 (D. Minn. 1998) (finding that

summary judgment in favor of the defendant was appropriate because the

ICCTA expressly preempts a city’s authority to withhold demolition

permits) (quoting CSX Transp., Inc. v. Georgia Pub. Serv. Comm'n, 944

42a

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

This Court agrees that some state law claims are com-

pletely preempted by the ICCTA, in part based on these

various provisions of the Act, and in part, based on the

legislative history of the statute. In this regard, the House

Committee Report on the ICCTA provides:

This provision [referring to the express preemption

clause] is conformed to the bills’ direct and general pre-

emption of State jurisdiction over economic regulation

of railroads. As used in the this section ‘State of Federal

law’ is intended to encompass all statutory, common

law, and administrative remedies addressing the rail-

related subject matter jurisdiction of the Transportation

Adjudication Panel.

H.R. Rep. 104-311 (1995) (emphasis added).

Nevertheless, while the ICCTA does refer to safety under

§ 10101(3) and (8), contains an explicit preemption provi-

sion for those remedies covered by the Act, 49 U.S.C.

§ 10501(b)(2), and includes an explicit enforcement provision

for certain types of claims, 49 U.S.C. § 11704 (a) and (b), this

Court finds that there is no complete preemption in this case

because none of plaintiffs’ claims are covered by the remedial

or enforcement mechanisms provided by the Act. The ICCTA

does not contain civil enforcement procedure for plaintiffs

F. Supp. 1573, 1581 (N.D. Ga. 1996)); see also Columbiana County Port

Authority v. Boardman Township Park District, 154 ¥. Supp.2d 1165,

1180 (N.D. Ohio 2001) (“The courts that have considered the preemption

issue following ICCTA’s enactment have consistently found that the

foregoing preemption clause is both clear and broad . . . It is clear that the

ICCTA has preempted all state efforts to regulate rail transportation.”)

(citations omitted); Guckenberg v. Wisconsin Central Ltd., 178 F. Supp.2d

954, 958 (E.D. Wis. 2001) (“Indeed, the language is ‘clear and broad,’ and

it is apparent that the “ICCTA has preempted all state efforts to regulate

rail transportation.”) (quotation omitted).

43a

similar to section 502 of ERISA, 29 USCA § 1132, or section

301 of the LMRA, 9 U.S.C.A. § 185(a). See City of Laredo v.

Texas Mexican Ry. Co., 935 F. Supp. 895, 898 (S.D. Tex.

1996). Rather, “[u]nder the statute, a person may file suit in

federal court only to enforce an order of the Board, to recover

overcharges or to recover under a bill of lading.” /d. (citing

49 U.S.C. §§ 11704(a); 11705(a), (e): and 11708(d)); see also

DeBruce Grain. Inc. v. Union Pacific R, Co., 983 F. Supp

1280, 1284 (W.D. Mo. 1997), affa, 149 F.3d 787 (8th Cir.

1998) (“[T]here is no provision governing the filing of a civil

action for damages other than with respect to the right to

recoup charges or to enforce the board’s orders.”). As such,

there is nothing in the ICCTA that permits a person to file a

suit in federal court to recover damages for personal injury

resulting from the action of a railroad governed by the

ICCTA.

Consequently, defendants reliance on Deford v. Soo Line

R. Co., 867 F.2d 1080 (8th Cir. 1989) and Grantwood Village

v. Missouri Pacific R. Co., 95 F.3d 654 (8th Cir. 1996), and

South Dakota ex rel. South Dakota R.R. Authority v.

Burlington Northern & Santa Fe Ry. Co., 280 F. Supp.2d 919

(D.S.D. 2003), for the proposition that the ICCTA completely

preempts plaintiffs’ negligence claims, is misplaced.

In Deford, the defendant agreed to sell a portion of its rail

lines. 867 F.2d at 1082. To comply with the Interstate Com-

merce Act (‘ICA”), the predecessor to the ICCTA, the defen-

dants were required either to obtain approval for the sale by

the Interstate Commerce Commission (“ICC”), the predeces-

sor to the STB, or receive an exemption. /d. The exemption

was granted over the objections of labor organizations. /d.

Subsequently, railroad employees adversely affected by the

sale of a portion of a railroad brought an action against their

railroad employer claiming common law creditors’ rights vio-

lations and violation of the Minnesota Uniform Fraudulent

Transfer Act. /d. at 1082-83. The Eighth Circuit found that

44a

both state claims were completely preempted by the ICA. In

so finding, the court noted that the ICA required the railroad

to obtain permission from the ICC, which could place labor

protective agreements on the railroad, before it acquired or

obtained a railway line. /d. at 1088 (citation omitted). The

Eighth Circuit also noted that ICC provided a forum for the

plaintiffs’ complaints and possible relief. /d. at 1090.

Grantwood, involved an abandonment under the ICA, in

which one party filed a request for interim use during

abandonment proceedings before the ICC. 95 F.3d at 656.

The ICC granted a notice of interim use and the parties

reached an agreement regarding trail use within the time

provided by the ICC. Id. A subsequent quiet title action raised

the question of whether the trail use agreement precluded

abandonment and reversion to the owners of the underlying

property. The Eighth Circuit held that removal of the case

from state court was proper given that the suit amounted to a

collateral attack on the ICC’s allowance for interim trail use

and that the ICC’s authorization of such trail use precluded a

finding that the right of way had been abandoned under state

law. Id. at 657.

In South Dakota ex rel. South Dakota R.R. Authority, the

State of South Dakota, by and through the South Dakota

Railroad Authority (“SDRA”), filed suit for specific perform-

ance and injunctive relief arising out a contract, which

allowed the SDRA and its designees to utilize a portion of the

defendant’s interchange access line. /d. at 923. In addition.

the complaint sought damages for breach of contract and tor-

tious interference with a busincss relationship. Jd. The court

found that the plaintiffs were seeking “state contract and tort

remedies arising out of contracts which were previously ap-

proved by the ICC and the STB pursuant to federal law.” Jd

at 929. In finding complete preemption, the court noted that

the ICCTA authorized the STB to regulate the contracts at

45a

issue and that contracts arose out of federal law and policy.

Id. at 932."°

These three cases demonstrate that in some instances com-

plete preemption of state actions is proper under the ICCTA.

In Deford, complete preemption from employce claims was

proper as the railroad had complied with the ICA and

obtained ’n exemption from regulation relating to its sale of a

rail line. In Grantwood, removal was proper because the state

action amounted to a collateral attack on the ICC’s authoriza-

tion of trait use precluded a finding that the right of way

had been abandoned under state law in South Dakota ex rel.

'° Defendants also cite to several cases dealing with defensive preemp-

tion, which they claim allegedly show that negligence actions are pre-

empted by the ICCTA. In Friberg v. Kansas City Southern Ry. Co., 267

F.3d 439 (Sth Cir. 2001), the plaintiffs, who operated a nursery, brought a

negligence action against the railroad claiming a loss in business because

their customers were required to wait for long periods in getting to their

nursery when the primary access road was blocked by waiting trains. /d. at

441. The plaintiffs had brought common law state claims of negligence

and negligence per se for the defendant's violation of Texas’ Anti-

Blocking Statue. /d. at 441-42. In finding preemption, the court empha-

sized the goal of uniformity in railroad operations and that it was

Congress’ apparent intent that the ICCTA further that goal at (cast as to

the economic realm. /d. at 443-44. See also Guckenberq, 178 F. Supp.2d

at 956 (finding common law nuisance claims brought by plaintiff, regard-

ing the construction of tracks by their home, preempted under the ICCTA

since the STB has exclusive jurisdiction, and provided the exclusive reme-

dies, regarding the construction and operation of side tracks); City of

Auburn v. United States Government, 154 F.3d 1025, 1027-28 (9th Cir.

1998) (finding that the local environmental review for a rail line acquisi-

tion was preempted by the ICCTA because 10501(b) gave the STB exclu-

sive jurisdiction authority over the acquisition of rail tracks). Although

these cases make it clear that economic regulations as to the acquisition,

construction, and operation of rail tracks are within the purview of the

STB, they do not provide any guidance as to whether the issue of rail

safety falls under the jurisdiction of the STB. See e.g., Friberg, 267 F.3d

at 444 (noting that the court was not ruling on whether the ICCTA

precludes state regulation of safety).

46a

removal was appropriate because it pertained to complete

preemption over contracts approved and regulated by the

STB. Nevertheless, all three cases are distinguishable from

the present case in that there has been no assertion by the

defendants that plaintiffs are using their lawsuit to usurp

previous actions of the STB pertaining to them. Moreover,

none of these decisions address the issue before this Court.

Whether the ICCTA completely preempts personal injury

claims premised on state common-law negligence claims.

Further, the legislative history of the ICCTA and the STB

support plaintiffs’ contention that the ICCTA does not pre-

empt plaintiffs’ state negligence claims for personal injury

and emotional distress resulting from the train derailment.

In 1887, Congress enacted legislation to regulate com-

merce, which crated the Interstate Commerce Commission

(“ICC”). See S. Rep. 104-176, 1995 WL 701522 at *2 (1995).

The ICC was initially created “to protect shippers from the

monopoly power of the railroad industry.” Jd. The ICC’s

regulatory authority over railroad companies was subse-

quently expanded. Jd. By the 1960’s, the ICC’s regulatory

structure was considered burdensome and restrictive and the

federal government created new agencies to deal with emerg-

ing transportation problems. Jd. at *3. “In 1967, the DOT was

created and virtually all of the ICC’s safety oversight func-

tions were transferred to the new agency. However, economic

regulation remained at the ICC.” Jd.

By 1970, despite the 1CC’s continued broad regulatory

powers, the country’s railroads were falling into bankruptcy.

Id. In 1977, noting the ineffectiveness of the ICC, President

Jimmy Carter created a task force that was charged with

streamlining the ICC and deregulation. /d. As a result, Con-

gress enacted the Railroad Revitalization and Regulatory

Reform (“4R”’) Act of 1976, which provided increased flexi-

bility for rail carriers to raise or lower rates to conform to

market forces. /d. In 1980, Congress enacted the Staggers

47a

providing the rail industry with many of the same

‘freedoms available to other competitive industries

removing antitrust immunity over collective rate-

ducing rail rate regulation, and easing the way for

id The ICCTA, enacted in 1995, eliminated the ICC

terred its duties to the STB”. Id. at *5. The ICCTA

ittempt to substantively change rail regulation. /d.

id, the ICCTA was meant to “preserve the careful

t in place by the 4R Act and the Staggers Act that

ramatic revitalization of the rail industry while

significant shipper and national interests.” /d.

'A was meant to retain those provisions needed

in efficient national rail network comprised of

lividual carriers including:

ral regulatory oversight of line constructions, line

lonments, line sales, leases, and trackage rights,

and other consolidations (under a broad public

t standard and with ongoing regulatory oversight),

ipply and interchange, antitrust immunity for cer-

‘ective activities (including pooling of equipment

‘rvices), Competitive access, financial assistance,

‘ine development, emergency service orders, and

rdation of equipment liens.

in addition, the ICCTA was to maintain pro-

‘ are necessary to protect rail shippers. /d. at *7.

ide the common carrier obligation, regulatory

the reasonableness of rail practices, maximum

n for captive traffic, advance notice of rate

ind rate tariffs for agricultural commodities and

) mention in the legislative history that the pur-

> 1CCTA was to provide oversight for the safety of

the contrary, the Senate Report’s impact state-

des tnat

48a

A wide variety of businesses and consumers would be

covered and potentially impacted by this bill. They

include rail carriers, certain pipeline carriers (those

transporting commodities other than oil, gas, Or water),

trucking companies, intercity bus companies, water

carriers, freight forwarders, and transportation brokers,

and their various customers. Government employees

who work for the ICC and FMC would also be affected

by this bill.

Id. at *17.

The Report contains no language to suggest that residents

in areas surrounding rail lines who sustain personal injuries

from a railroad’s unsafe operation of its trains, would be

affected by this legislation. In sum, the legislative history of

the ICCTA supports the position that the focus of the ICCTA

- and the STB is on economic regulation of rail transportation

and not the regulation of railway safety. “Although states

retain the police powers reserved by the Constitution, the

Federal scheme of economic regulation and deregulation is

intended to address and encompass all such regulation and to

be completely exclusive.” H.R. Rep. No. 104-311.

Moreover, a finding by this Court that the ICCTA and the

STB has exclusive jurisdiction over the safety of the railways

would run contrary to,the FRSA. Congress enacted the Fed-

eral Railroad Safety Act in 1970 “to promote safety in al!

areas of railroad operations.” 45 U.S.C. § 421. In order to

achieve this goal, “the Act authorized the Secretary of

Transportation to ‘prescribe, as necessary, appropriate rules,

regulations, orders and standard for all areas railroad safety.”

Burlington Northern Railroad Co. y. State of Minnesota, 882

F.2d 1349, 1351 n. 5 (8th Cir. 1989) (quoting 45 U.S.C.

§ 431). The Secretary of Transportation has delegated this

authority to the Federal Railroad Administrator (“FRA”). Jd.

(citing 49 C_F.R. § 1.49(m) (1988)).'' As such, a finding by

' 49 C.F.R. § 1.49 provides in relevant part:

49a

this Court that the STB has the exclusive jurisdiction over

train safety, would be in direct conflict with Congress’ dele-

gation to the Secretary of Transportation (and by the Secre-

tary, to the FRA), the authority over railroad safety.

“A primary rule of statutory construction is that when a

court interprets multiple statutes dealing with a related subject

or object, the statutes are in pari material and must be

considered together.” Linguist v. Bowen, 813 F.2d 884, 888

(8th Cir. 1987) (citing United States v. Freeman, 44 U.S. (3

How.) 556, 564-65; 11 L.Ed. 724 (1845)). A proper analysis

“reads the parts of a statutory scheme together, bearing in

mind the congressional intent underlying the whole scheme.”

Id. at 889 (citations omitted). “While the STB must adhere to -

federal policies. encouraging ‘safe and suitable working

conditions in the railroad industry,’ the 1CCTA and its legis-

lative history contain no evidence that Congress intended for

the STB to supplant the FRA’s authority over rail safety.”

Tyrrell v. Norfolk Southern Rv. Co., 248 F.3d 517. 523 (6th

Cir. 2001) (citation omitted). Instead, the “agencies’ comple-

mentary exercise of their statutory authority” demonstrates

Congress intent for the ICCTA and the FRSA to be construed

in pari material. Id. The STB and the FRA in their 1998

Safety Integration Plan rulemaking recognized that their joint

responsibility for promoting rail safety, but at the same time

found that “the FRA exercised primary authority over rail

safety matters under 49 U.S.C. § 20101 et seq., while the STB

handled economic regulation and environmental impact

assessment.” Tyrrell, 248 F.3d at 523 (citing Regulations on

Safety Integration Plans Governing Railroad Consolidations,

The Federal Railroad Administrator is delegated authority to—

£ 6

(m) Carry out the functions vested in the Secretary by the Federal

Railroad Safety Act of 1970 (Title I] of Pub.L. 91-458); 84 Stat.

971, 45 U.S.C. 421 ef. seqg.)....

50a

Mergers, and Acquisitions of Control; and Procedures for

Consideration of Safety Integration Plans in Cases Involving

Railroad Consolidations, Mergers, and Acquisitions of Con-

trol, STB Ex Parte No. 574, FRA Docket No. SIP-1, Notice

No. 1, 63 Fed. Reg. 72,225 (Dec. 31, 1998)).'

As stated previously, the ICCTA provides that its purpose,

in part, is to promote safe rail transportation. 49 U.S.C.

§ 10101(3), (8). Section 10101 establishes “the basic policy

directive against which all of the statutory provisions the

Board administers must be evaluated.” See F inal Rule, STB

Ex Parte No. 574, FRA Docket No. 1999-4985. This policy

applies to every transaction under the STB’s jurisdiction. /d.

However, 49 U.S.C. § 10101 does not establish on its face

that the STB has exclusive jurisdiction over safety; only that

it must consider issues of safety in transactions under its

Jurisdiction. In sum:

Based on the federal railway statutes, the STB and

FRA’s jurisdictional management, and the resulting

regulatory systems, Congress ‘vested the FRA with

primary authority over national rail safety policy and

assigned the STB the duty to encourage ‘safe and

suitable working conditions’ for railway employces

through its assessment of individual railway proposals

subject to its authority.

Tyrrell, 248 F.3d at 523.

Finally, in determining the jurisdiction of the STB, it is

also helpful to look at the agency’s own understanding of its

jurisdiction under the ICCTA. According to the STB, the

is See also Regulations on Safety Integration Plans Governing Rail-

road Consolidations, Mergers, and Acquisitions of Control; and Pro-

cedures for Consideration of Safety integration Plans in Cases Involving

Railroad Consolidations, Mergers, and Acquisitions of Control, STB Ex

Parte No. 574, FRA Docket No. 1999-4985, Notice No. 4 (Mar. 8, 2002)

(“Final Rule, STB Ex Parte No. 574, FRA Docket No. 1999-4985").

5la

functions it retained over rail regulation pursuant to 1995

enactment of the ICCTA are as follows:

Common Carrier Obligation. Exemptions. Rail Mergers.

Line Transfers, Leases, and Trackage Rights. Line Sales

to Noncarriers. Labor Protection. Rate Regulation for

Common Carriage, including: Public Disclosure of Rates

and Service Terms. Advance Notice of Rate Increases or

Changes in Service Terms. Maximum Rate Reasonable-

ness for Captive Traffic. Contracts for Transportation of

Agricultural Products requirements, including: Filing of

Summaries. Protest and Matching Rights. Equipment

Limitations. Rail Cost Adjustment Factor (RCAF) Com-

putation. Reasonableness of Practices. Rate Discrimina-

tion Car Supply and Interchange. Emergency Service

Orders. Competitive Access. Line Constructions, includ-

ing Line Crossings. Line Abandonments, including: Fi-

nancial Assistance. Rails-to-Trails. Public Use Provision

for Right-of-way. Feeder Line Development Program.

Collective Ratemaking (and Antitrust immunity)

InterLocking Officers and Directors Recording Liens.

Data Collection and Oversight{]

See Surface Transportation Board,-Who’s Who and What

Does it Do?, available at http:/lwww.stb.dot.gov/Publica

tions/whoswho.htm#Functions. Based on this list of retained

functions, it cannot be gleaned that the STB believes it has

‘retained jurisdiction over railway safety or accidents involv-

ing railroads. Moreover, according to the STB, “[i]n the per-

formance of its functions, the Board is charged with promot-

ing, where appropriate, substantive and procedural regulatory

reform in the economic regulation of surface transportation,

and with providing an efficient and effective forum for the

resolution of disputes.” Jd. It is apparent that the STB be-

lieves that it is charged with economic, and not safety, regula-

52a

tion of surface transportation.'*> Given the requirement that

the ICCTA and the FRSA must be construed in pari material,

the STB’s perception of its own jurisdiction, and the legisla-

tive history of the ICCTA, this Court finds that rail safety

does not fall under the primary jurisdiction of the STB.

For all of these reasons, a finding that the ICCTA com-

pletely preempt plaintiffs’ personal injury negligence claims

is not appropriate in this case.

IV. Plaintiffs’ Request for Attorneys’ Fees and Costs

Under 28 U.S.C. § 1447(c), “{a]n order remanding the case

may require payment of just costs and any actual expenses,

including attorney fees, incurred as a result of the removal.”

Under the language of Section 1447(c), the Court has discre-

tion to order the payment of costs and attorneys’ fees. See

Moline, 259 F.Supp.2d at 905. While this Court concludes,

and recommends, that remand is necessary in this case, the

question appears to be one of first impression in this Circuit,

and presents a close question. Therefore, as an exercise of

discretion, this Court recommends that plaintiffs’ request for

an award of attorneys’ fees and costs be denied.

V. Conclusion

This Court finds that neither the FRSA nor the ICCTA

completely preempt plaintiffs’ personal injury negligence

claims. The FRSA and its accompanying regulations, provide

extensive control over railroad safety. However, defendants

have not cited to, nor has this Court been able to find, any

part of FRSA, or its accompanying regulations, that provide

plaintiffs with a mechanism to redress the harms they have

' The STB’s interpretation of its jurisdiction of the ICCTA is Sup-

ported by the legislative history surrounding the ICC, the predecessor to

the STB. In 1967, the ICC had virtually all of its regulatory authority over

railroad safety transferred to the Department of Transportation, while it

retained jurisdiction over economic regulation.

53a

allegedly suffered. In addition, there is nothing within the

legislative history of the FRSA that demonstrates Congress’

intent to completely preempt personal injury claims resulting

from the actions of railroads.

As for the ICCTA, it, like the FRSA, does not contain a

mechanism for the plaintiffs to address the harms they have

sustained. The ICCTA’s power lies with the authority of STB

whose primary function pertains to the economic regulation

and not the regulation of safety of railroads. Further, the

legislative history of ICCTA undermines any assertion that

plaintiffs’ personal injury claims are preempted under this

Statute.

Since the FRSA and the ICCTA do not completely preempt

plaintiffs claims, this case should be remanded to state court.

RECOMMENDATION

For the reasons set forth above, it is recommended that:

1. Plaintiffs’ Motion to Remand [Docket No. 8] be

GRANTED, and that matter be remanded to the Minnesota

District Court, Fourth Judicial District; and

2. Plaintiffs’ request for attorneys’ fees and costs be

DENIED.

Dated: January 29, 2004

/s/ JANIE S. MAYERON

Janie S. Mayeron

United States Magistrate Judge

Pursuant to Local Rule 72.1(c)(2), any party may object to

this Report and Recommendation by filing with the Clerk of

Court, and by serving upon all parties on or before February

13, 2004 a copy of this Report, written objections which

specifically identify the portions of the Report to which

objections are made and the bases for each objection.

54a

Unless the parties stipulate that the District Court is not

required by 28 U.S.C. § 636 to review a transcript of the

hearing in order to resolve all objections made to this Report

and Recommendations, the party making the objections shall

timely order and file a complete transcript of the hearing on

or before February 13, 2004."

* See S. Rep. 104-176, 1995 WL 701522 at *3.

55a

APPENDIX C

[FILED 05 DEC 21]

STATE OF MINNESOTA DISTRICT COURT FOURTH

COUNTY OF HENNEPIN JUDICIAL DISTRICT

CASE TYPE: Personal Injury

In re the Soo Line Railroad Court File No. 04-007726

Company Derailment of January

18, 2002 in Minot, ND

MEMORANDUM OF LAW

REGARDING CHOICE OF LAW

I. INTRODUCTION

Defendants from the January 18, 2002 derailment outside

Minot, North Dakota have moved this Court for partial

summary judgment on choice of law. This Court has issued

an order granting Defendants’ motion to apply the substantive

laws of North Dakota to all actions arising out of the January

18, 2002 derailment outside of Minot, North Dakota. This

Memorandum memorializes this Court’s rationale for

granting Defendants’ motion.

Il. APPEARANCES:

J. Gordon Rudd, Esq., Zimmerman Reed, P.L.L.P., 651

Nicollet Mall, Suite 501, Minneapolis, MN 55402, Mike

Miller, Esg., Solberg, Stewart, Miller, Johnson, Tjon,

Kennelly and O’Keeffe, LTD., 1129 5™ Avenue South, P.O.

Box 1897 Fargo, ND 58107, George G. Eck, Esq., Dorsey &

Whitney LLP, 50 South Sixth Street, Suite 1500,

Minneapolis, MN 55402, Kristy L. Albrecht, Esq., Benjamin

Hasbrouck, Esq., Dorsey & Whitney LLP, 51 North

Broadway, Suite 402, Fargo, ND 58102, Ronald J. Barezak,

56a

Paula M. Jossart, Yaeger, JungBauer, Barczak & Vucinovich,

745 Kasota Av | >, Minneapolis, MN 55414, Daniel A.

O’Fallon, Robin. Saplan, Miller & Ciresi, L.L.P., 2800

LaSalle Plaza, 800 LaSalle Avenue South, Minneapolis, MN

55402-2015, Richard G. Hunegs, Steven M. Hunegs, Randal

W. LeNeave, Hunegs, Stone, LeNeave, Kvas & Thornton,

P.A., 1650 International Centre, 900 Second Avenue South,

Minneapolis, MN 55402, and Gregory N. McEwen, McEwen

Law Firm, Ltd., 1600 Pioneer Building, 336 N. Robert Street,

Saint Paul, MN 55101, appeared on behalf of the moving

plaintiffs (hereinafter, “Plaintiffs”),

Timothy R. Thornton, Esq., Scott G. Knudson, Esq.,

Thomas J. Basting, Jr.. Esq. and Kevin M. Decker, Esq.,

Briggs and Morgan, 2200 IDS Center, 80 South Eighth Street,

Minneapolis, MN 55402, appeared on behalf of Defendants

Canadian Pacific Railway Company, Canadian Pacific

Limited, Canadian Pacific Railway Limited, Soo Line

Railroad Company, Terry Kroll, and Michacl Hanson

(hereinafter, “Railroad Defendants”).

Ill. FACTS AND PROCEDURAL POSTURE

A. The derailment.

These cases involve events that took place in the early

morning hours of January 18, 2002, when a train owned by

Canadian Pacific Railway, on_ its way from Edmonton,

Alberta to St. Paul, Minnesota, derailed outside of the city of

Minot, North Dakota.

The derailment occurred at approximately 1:39 a.m.,

when a Canadian Pacific Railway freight train with 2

locomotives and 112 cars derailed 31 freight cars near

Minot, North Dakota. Seven of 15 cars that were carrying

anhydrous ammonia catastrophically failed, creating a

vapor plume about 5 miles long, and 2 1/2 miles wide,

which affected approximately 15,000 residents near the

derailment site and a portion of the city of Minot.

~5S7a

NTSB Press Release, June 28, 2002.

The accident “resulted in one fatality, over 300 injuries and

the displacement of residents for up to 30 days.” Id. It is

undisputed that the fatality mentioned in the preceding quote

is John T. Grabinger.

B. The ensuing litigation.

Since January 18, 2002 almost two-hundred separate

lawsuits have been filed by North Dakota residents claiming

they were injured by the toxic cloud. In addition, there are

two class-action cases currently pending. Approximately 160

of the individual cases were consolidated before the

undersigned by Order of Judge Kevin Burke dated June 18,

2003. This Court has also been assigned one of the two class-

action cases stemming from the derailment. This Court has

stayed that class action. The other class action is pending in

the Federal District Court of North Dakota.

Early in the litigation Plaintiffs indicated that they intended

to move for leave to add a claim for punitive damages. This

Court has, concurrent with this Court’s decision herein,

denied Plaintiffs’ motion, regarding punitive damages, under

both North Dakota and Minnesota law. It should be noted that

there are significant substantive differences between North

Dakota and Minnesota punitive damages law. For instance,

North Dakota tort reform efforts have capped punitive

damages awards at “two times the amount of compensatory

damages or two hundred fifty thousand dollars, whichever is

greater.” N.D.C.C. § 32-03.2-11(4). Minnesota, on the other

hand, has no such statutory cap. See Minn. Stat. § 549.20. A

second difference is that the threshold a plaintiff has to meet

in order to add a claim for punitive damages is higher under

North Dakota law. In North Dakota, a plaintiff must prove by

clear and convincing evidence that the defendant acted with

oppression, fraud, or actual malice. See N.D.C.C. § 32-03.2-

S8a

11(1). In contrast, Minnesota law requires a plaintiff to prove

by clear and convincing evidence that the defendant acted

with deliberate disregard of the plaintiff's rights. Minn. Stat.

§ 549.20, subd. I.

The Railroad Defendants moved for summary judgment on

the choice of law question. The Railroad Defendants argue

that North Dakota’s interest in this litigation overwhelm any

interest Minnesota might have. In fact, the Railroad

Defendants assert that Minnesota’s policy against forum

shopping overcomes any interest that Minnesota might have

in applying its punitive damages law, and further that

constitutional limitations on punishing out-of-state conduct

precludes Minnesota from applying its punitive damages law

to the out-of-state conduct that underlies this litigation.’

Plaintiffs argue that the law of the forum must apply

because punitive damages are merely a remedy and thus not

subject to a choice of law analysis. Plaintiffs further assert

that Minnesota law should apply even under choice of law

analysis because: (1) the Soo Line Railroad Company, one of

the Railroad Defendants, was incorporated in Minnesota and

has strong historic ties to Minnesota: (2) the corporate

conduct giving rise to the motion to add a claira for punitive

damages occurred in Minnesota: and (3) Minnesota has a

strong interest in compensating tort victims. '

C. The situs of the Railroad Defendants’ activities.

The place where relevant activities took place is important

to the choice of law consideration.

The accident took place on the western edge of the town of

Minot and injured exclusively Minot residents. All of the

environmental cleanup and activities relating to persons

injured by the derailment took place in Minot. Basic track

maintenance is likewise the responsibility of local North

' See this Court’s Memorandum of Law Denying Punitive Damages.

59a

Dakota crews who are assigned to particular “sections” along

the Canadian Pacific’s mainline. Six section crews totaling

nineteen employees are charged with performing basic

maintenance on the “Portal Subdivision,” which runs from

Portal, North Dakota to Harvey, North Dakota and includes

the location where the train derailed on January 18, 2002.

Overall supervision of the maintenance work done on the

“Portal Subdivision” takes place in Minnesota. Soo Line

Railroad Company has historic ties to Minnesota, having

been headquartered here since 1915. There are approximately

1,000 employees in the Twin Cities area and multiple aspects

of Soo Line Railroad operations are handled in Minnesota,

including: General Assistance, Accounting, Canadian Pacific

(US) Finance, Commercial Development, Copy Center,

Corporate Secretary, Canadian Pacific Police Services,

Customer Service Team/Revenue, Freight Claims, Legal

Services, Real Estate, and Public Affairs/Regional Carriers.

Funding for both basic and program maintenance is

allocated by management in Calgary, Alberta, Canada. The

same Calgary management also establishes the applicable

standards, policies, and .procedures for both basic track

maintenance and program projects.

IV. DISCUSSION OF LAW

A. Summary judgment standard.

Summary judgment is the proper mechanism for deciding

important legal issues such as choice of law. Under the

Minnesota Rules of Civil Procedure, summary judgment ts

properly granted when:

[T]he pleadings, depositions, answers to interrogatories,

and admissions on file, together with the affidavits, if

any, show that there is no issue as to any material fact

and that either party is entitled to judgment as a matter

of law.

60a

Minn. R. Civ. P. 56.03.

A material issue of fact is one which would affect the

outcome of the case. Pischke v. Kellen, 384 N.W. 2d 201, 205

(Minn. Ct. App. 1986) (citing Rathbun v. W.T. Grant Co., 219

N.W. 2d 641, 646 (Minn. 1974)).

Summary judgment has been characterized as a “blunt

instrument” that “should be employed only where it is

perfectly clear that no issue of fact is involved in the cause of

action.” Donnay v. Boulware, 144 N.W. 2d 711, 716 (Minn.

1966). The Minnesota Supreme Court has stated that the

“burden is on the moving party to show the absence of any

material fact.” Bixler v. J.C. Penny Co., Inc, 376 N.W. 2d

209, 215 (Minn. 1985) (citing Barilla vy. Clapshaw, 237

N.W.2d 830, 831 (Minn. 1976)); see Thiele v. Stich, 425

N.W. 2d 580, 583 (Minn. 1988) (the burden is on movant to

establish that no genuine issue of material fact exists). When

determining whether the moving party has sustained its

burden, the court must view the evidence in a manner most

favorable to the nonmoving party. See Sauter v. Sauter, 70

N.W. 2d 351, 353 (Minn. 1955); Ritter v. MA. Monenson

Co., 352 N.W. 2d 110, 112 (Minn. Ct. App. 1984) (citing

Greaton v. Enich, 185 N.W.2d 876, 878 (Minn. 1971)). All

doubts and factual inferences must be resolved against the

moving party and in favor of the nonmoving party. Nord vy.

Herreid, 305 N.W.2d 337, 339 (Minn. 1981); see Dempsey v.

Jaroscak, 188 N.W.2d 779, 781-82 (Minn. 1971).

It is only when the movant has satisfied its burden must the

nonmoving party then show the existence of a genuine issue

of material fact. Bixler, 376 N.W.2d at 215 (citing

Continental Sales and Equipment Co. v. Town of Stuntz, 257

N.W.2d 546, 550 (Minn. 1977). If the nonmoving party fails

to present specific facts indicating that a genuine issue of

material fact exists, summary judgment is proper. Hunt v.

IBM Mid Am. Employees Fed. Credit Union, 384 N.W.2d

853, 855 (Minn. 1986). In order to successfully oppose a

6la

r summary judgment, the nonmoving party cannot

‘ mere averments or denia

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