AVIATION (AIRLINE DERULATION ACT & PREEMPTION) – Airline Deregulation Act preempted state common law claims of unjust enrichment and tortious interference, among others, in putative class action brought by skycaps at Boston Logan Airport against airlines that each introduced a $2 per bag fee for curbside service for departing passengers at airports (i.e., that the airlines, not the skycaps, received).

Brown v. United Airlines, Inc., No. 12-1543 (U.S. Court of Appeals for the 1st Circuit, July 10, 2013). Free copy of court-issued opinion available here.

RAILROADS (FELA & FEDERAL RAIL SAFETY ACT) / Where (1) plaintiff in Federal Employers Liability Act claim against railroad alleged negligence based on railroad’s failure to inspect a particular switch more often than once per month, and (2) Federal Rail Safety Act prescribed inspections of specified railroad switches at specified frequencies under specified circumstances of a minimum of once per month – Held: Federal Rail Safety Act standard did NOT preempt as a matter of law a higher negligence standard to be applied under Federal Employers Liability Act.

The district court’s basic rationale: FELA is based on negligence concepts for the protection of railroad employees, and FRSA – it reasoned – was not enacted with the idea of preempting such negligence standards with a distinct federal statutory standard.  “Finding preclusion as between these two statues would thus be tantamount to concluding that with the FRSA Congress intended to reconfigure the basic structure for imposing liability under the FELA.”

Powell v. Union Pacific Railroad Company, No. Civ. 2:09-01857 (U.S. District Court for the Eastern District of California, May 2, 2013). Free copy available here.

FREIGHT LOSS (CARMACK), TORT (CONVERSION) & MOTOR CARRIER / Where interstate motor carrier took possession of shipper’s property (1) without shipper’s permission and (2) for the “purpose of its own gain”, shipper had a state law claim for “conversion” (the tort of stealing) and the federal Carmack Amendment did not prevent (through federal preemption) shipper’s lawsuit against carrier for “conversion”.

Another way of putting this decision is that the Carmack Amendment governing a railroad or motor carrier’s responsibility to the shipper for safe transport of freight to the consignor / destination requires in the first place that such shipper meant to place its freight with the carrier.

Subtext, one theme in Carmack Amendment cases is that a shipper wishes to sue the carrier for various state law torts (such as fraud, negligence or – as here – outright stealing or “conversion”) – and the carrier, correspondingly, wants to cut off such state law tort suits by convincing the court that the federal Carmack Amendment preempts such state law claims.

Dynamic Transit Co. v. Trans Pacific Ventures, Inc., 2012 WL 6712042 (Supreme Court of Nevada, December 27, 2012). Free copy available here.

Who is affected? Shippers by motor carrier and railroad whose freight moves are covered by the terms of the Carmack Amendment. Interstate carriers (i.e., those motor carriers and railroads covered by Carmack) who take possession of a shipper’s property without legal authorization. Continue reading

EMPLOYMENT, RAILROAD & PREEMPTION / In employee’s racial discrimination case against railroad carrier where employee was party to a collective bargaining agreement through his union, (1) Held: Plaintiff’s complaint under 42 U.S.C. § 1981 was preempted by federal Railway Labor Act for claims governed by collective bargaining agreement (CBA), (2) Obiter dictum: Possibly not for preempted for claims not governed by CBA.

Charles T. Lee v. Norfolk Southern Railway Co., 2012 WL 6189123 (U.S. District Court for the Western District of North Carolina, December 12, 2012). No free copy available at time of posting.

Who is affected? Railroad carriers and employees of railroad carriers who wish to bring actions at law against such carriers to remedy racial discrimination under 42 U.S.C. § 1981 where at the same time such employees are party to a collective bargaining agreement governed by the Railway Labor Act.

Of course a railroad carrier’s employee who is party to a collective bargaining agreement may bring an action to remedy racial discrimination by that rail carrier under such a collective bargaining agreement. This case holds that – for certain claims relating to racial discrimination – such employee may opt instead to bring such claims under 42 U.S.C. § 1981. 42 U.S.C. § 1981 is an 1866, post-Civil War statute designed to give “all persons”, regardless of race, specific legal rights – including the right to enter into and subsequently enforce contracts. Continue reading

BRIEFLY NOTED / TAXATION (FEDERAL PREEMPTION & STATE TAX LAW)

County of Scott Regular Division Southcross Shoppes, LLC v. County of Scott, 2012 WL 6217521 (Minnesota Tax Court, December 11, 2012). No free copy available at time of posting.

“… the Minnesota Supreme Court held the Airport and Airway Improvement Act preempted state law and entitled the taxpayers to property tax equalization relief” under Minnesota statute.

“Under the Act, a state may not: assess air carrier transportation property at a value that has a higher ratio to the true market value of the property than the ratio that the assessed value of other commercial and industrial property of the same type in the same assessment jurisdiction has to the true market value of the other commercial and industrial property.

“The Act “was designed to insulate interstate transportation companies from state regulations and taxing procedures which unreasonably burdened and discriminated against interstate commerce”.

The court ruled here that the petitioner before it was not “air carrier transportation property under 49 U.S.C. § 40116(d)(1)(A).”

BRIEFLY NOTED / AVIATION & PREEMPTION

Madorsky v. Spirit Airlines, 2012 WL 6049095 (U.S. District Court for the Eastern District of Michigan, December 5, 2012). Free copy available here.

Extended discussion of preemption provisions of the federal Airline Deregulation Act in the context of claims under (1) Florida unfair trade practices statute, and (2) Michigan Consumer Protection Act.

CASE STUDY: TORTS & RAILROAD / Mississippi Supreme Court reversed $3.75 million jury award in collision by plaintiff’s decedent auto driver with train. Set aside verdict (JNOV): (1) per state statutes on several safety standards and federal (preemption) on one other, (2) to “uncontradicted” testimony. Dissent: Testimony NOT “uncontradicted” – appellate majority invaded trier of fact function.

Illinois Central Gulf Railroad Co. v. Travis, 2012 WL 5951413 (Supreme Court of Mississippi, November 29, 2012). Free copy available here. 

Who is affected? Railroads and automobile drivers in collisions (& decedents).

This study of a case reported from the Mississippi Supreme Court last week illustrates the tactical uses of pre-trial and post-trail motions as a tool for either avoiding or by-passing triers of fact in a trial court – whether they be juries or a judge sitting as trier of fact. 

Here the majority opinions and dissent disagree as to whether the operative fact issues should have been decided by the trier of fact (here a jury) or, alternatively, that as a matter of law no reasonable jury could have found the defendant railroad liable based on the evidence admitted at trial.  Continue reading

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”.

RAILROAD / 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.

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.    

Who is affected? Railroad carriers, and state and local governments, especially land use and environmental protection functions. 

(November 21, 2012, Final rules ):

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