Beware of Applicants Disguised as Railroad Claiming Federal Preemption

Railroad claiming federal preemption?

We have seen an uptick in local communities being challenged by the railroad industry over their exemption from local regulations regarding siting of wireless facilities on railroad property.  While there is in fact a federal preemption, it is not as expansive as the rail industry would like you to believe.

The Interstate Commerce Commission Termination Act of 1995 (“ICCTA”) (49 U.S.C.A. §10101 et seq.) abolished the Interstate Commerce Commission and gave the Surface Transportation Board exclusive jurisdiction over: (1) transportation by rail carriers and the remedies provided with respect to rates, classifications, rules (including car service, interchange, and other operating rules), practices, routes, services, and facilities of such
carriers; and (2) the construction, acquisition, operation, abandonment, or discontinuance of spur, industrial, team, switching, or side tracks, or facilities, even if the tracks are located, or intended to be located, entirely in one state. 49 U.S.C. § 10501(b).

The ICCTA preempts state and local regulation, i.e., “those state laws that may reasonably be said to have the effect of ‘managing’ or ‘governing’ rail transportation.” Norfolk Southern Railway Company v. City of Alexandria, 608 F.3d 150, 157-158 (4th Cir. 2010) (city ordinance regulating the transportation of bulk materials, including ethanol, and city permit unilaterally issued to the railroad under the ordinance regulating the transport of  ethanol to the railroad’s transload facility, was preempted by the ICCTA). Thus, the ICCTA preempts the state and local regulation of matters directly regulated by the Surface transportation Board, such as the construction, operation, and abandonment of rail lines.  Whether a state or local regulation is preempted requires a factual assessment of whether the action would have the effect of preventing or unreasonably interfering with railroad transportation.

A leading case that says that state and local regulation regarding non-railroad activity on railroad property IS NOT preempted is FEC v. City of West Palm Beach  266 F.3d 1324 (11th Cir. 2001)   In that case, the railroad leased out part of its rail yard to a construction company to use for storing and treating aggregate (dirt).  In that instance, the Court found that the city’s regulations applied to that non-Railroad use and were not preempted.  The same rationale applies to wireless siting requests on railroad property.  IF the purpose of the structure is to be exclusively for railroad purposes, then the ICCTA would pre-empt local regulations;  however, if it will also be used by third parties for non-railroad purposes, then the ICCTA would not preempt the local government’s regulations.

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