918 F.3d 82
2d Cir.2019Background
- Vermont Railway bought land in Shelburne to build a rail-to-truck transloading facility to store and distribute road salt; the Facility holds ~80,000 tons and sits within 250 meters of the LaPlatte River.
- The Town enacted a post-construction "Ordinance Regulating the Storage, Handling and Distribution of Hazardous Substances" (Aug. 2017) limiting storage quantities near schools/waterways and imposing inspections, fines, and health orders; the Town also enforced zoning provisions §§1950.1 and 1950.2(A).
- Railway had obtained state stormwater permits (MSGP) and was subject to state monitoring; the Town did not appeal the state authorizations.
- Railway sued, alleging the Interstate Commerce Commission Termination Act (ICCTA) preempted the Town's regulations as applied to its rail transportation activities; the District Court earlier (June 29, 2016) held the Railway’s activities were "transportation by rail carrier." The Town did not appeal that partial final judgment.
- The District Court (Dec. 7, 2017) enjoined enforcement of the Ordinance and relevant zoning provisions, finding the Ordinance: (1) discriminatory in timing/focus/penalties and (2) an unreasonable burden on rail transportation that did not meaningfully protect public health and safety.
- Second Circuit affirmed: it limited review to whether the Ordinance fits the ICCTA police-powers exception and agreed the Ordinance fails that exception because it does not meaningfully protect health/safety and discriminates against rail.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Ordinance is preempted by ICCTA or falls within the police-powers exception | Railway: ICCTA preempts Town regulations affecting rail transportation; police-powers exception does not apply because the Ordinance is not a valid health/safety measure | Town: Ordinance is a valid exercise of municipal police powers protecting public health and safety, so ICCTA does not preempt it | Held: Ordinance is preempted; it fails police-powers exception because it does not meaningfully protect health/safety and discriminates against rail |
| Whether the District Court’s earlier finding that the Facility is "transportation by a rail carrier" is reviewable here | Railway: implicit in seeking relief; underlying finding supports preemption ruling | Town: did not appeal the earlier partial final judgment, so Railway’s classification should not be binding here | Held: Majority: not relitigable on jurisdictional/forfeiture grounds; concurrence would have reviewed and affirmed the classification |
| Whether §§1950.1 and 1950.2(A) zoning bylaws survive independent analysis | Railway: these provisions are duplicative of the Ordinance and thus preempted | Town: did not press this issue on appeal | Held: District Court’s preemption ruling on these bylaws stands and challenge is waived on appeal |
| Whether permanent injunction was proper remedy after finding preemption | Railway: injunction necessary to prevent enforcement of preempted law | Town: did not contest injunction analysis on appeal | Held: Court affirmed the permanent injunction without separate analysis after concluding preemption was established |
Key Cases Cited
- Green Mountain R.R. Corp. v. Vermont, 404 F.3d 638 (2d Cir. 2005) (establishing police-powers exception to ICCTA preemption and its limits)
- Entergy Nuclear Vt. Yankee, LLC v. Shumlin, 733 F.3d 393 (2d Cir. 2013) (discussing federal preemption principles and conflict preemption)
- Shrader v. CSX Transp., Inc., 70 F.3d 255 (2d Cir. 1995) (appellate jurisdiction limited to matters designated in the notice of appeal)
- Bowles v. Russell, 551 U.S. 205 (2007) (failure to timely appeal deprives appellate court of jurisdiction)
- Island Park, LLC v. CSX Transp., 559 F.3d 96 (2d Cir. 2009) (analysis begins by asking whether activities constitute "transportation by rail carrier")
- Marentette v. Abbott Laboratories, Inc., 886 F.3d 112 (2d Cir. 2018) (standard of review for preemption questions)