REMARKS: RAILROAD & ENVIRONMENTAL / “Congress in 2008 reduced the U.S. Surface Transportation Board’s power to authorize the location of solid waste rail transfer facilities over the objection of states and localities – and the proposed new rule implementing this is complex”.

From New Rules & Decisions week of November 19, 2012.

U.S. STB Notice of proposed rule making.

Gist of the new law:

In these final rules the U.S. STB implements Congress’ recent curtailing through the Clean Railroads Act of 2008 of U.S. STB’s power to approve placement of solid waste rail transfer facilities at places or under circumstances where state and local authorities seek to exercise their “police power” to protect health, safety and the environment. Before that the federal Interstate Commerce Commission Termination Act fully preempted any contrary state or local law relating to the question.

Business take-away:

Where an individual business or entire industry sector uses (more accurately, where it aligns itself with) sheer federal power to overcome a state or local government policy that the business or sector finds to be an impediment to its operations, those states and localities whom you “defeated” this time can reverse the tables by convincing Congress to change federal law later on.

Stated another way, when a company or industry deploys a federal statute to bypass the objections of a state agency executive like Lisa P. Jackson (Commissioner of the New Jersey Department of Environmental Protection in 2007), it might meet her again in a year or two after she has become a member of the President’s cabinet (Lisa P. Jackson, named by President Obama as Administrator of the U.S. Department of Environmental Protection in 2008, and serving from 2009 to the present).

How this worked here:

In each of the two cases cited in the rules’ announcement by the U.S. STB:

  • A railroad wished to place a solid waste disposal facility at a specified place under specified terms of use.
  • A state or local government disagreed.
  • The U.S. STB agreed with the railroad.
  • The facility went in as the railroad (now with the U.S. STB’s approval) wanted it to go in – against the express contrary wishes of state environmental authorities and without any (reported at least) negotiation or compromise with the local folks.

Why? Under the federal Interstate Commerce Commission Termination Act, the  “Jurisdiction of the [U.S. Surface Transportation] Board over transportation by rail carrier . . . is exclusive . . . . [T]he remedies provided under this part with respect to the regulation of rail transportation are exclusive and preempt the remedies provided under Federal and State law.” 49 U.S.C. § 10501(b).

Strictly speaking, the fact that Lisa P. Jackson was a New Jersey envirionmental official who disagreed with the railroad in what became, N.Y. Susquehanna & W. Ry. v. Jackson, 500 F.3d 238, 252-55 (3d Cir. 2007) bears no direct connection to the Clean Railroads Act of 2008 in terms of its legal doctrine. And as its title indicates, the new statute was enacted before President Obama – and U.S. EPA Director Jackson with him – were voted into office.

But the intervening political change brought to the U.S. STB a new team who wrote the new rule that now implements the Clean Railroads Act of 2008.

Legal take-away: Whatever law governs today can be trumped by tomorrow’s election results.

The railroads’ lawyers prior to the Clean Railroads Act of 2008 and prior to these new rules were correct as a matter of then-current legal doctrine to advise that their clients’ prerogatives would prevail over state and local environmental concerns through the doctrine of federal preemption.

But query whether or not it was wise for those railroads to rely on the letter of their federal statutory powers in this way? What the railroads may have seen as the straight forward application of preemption doctrine those state and local officials instead likely viewed as a stiff-arm that was dismissive of their concerns for their citizens under the state “police power”.