Explicit preemption language

For decades scholars and practitioners have been asking Congress and administrative rulemakers to write explicit preemption language into statutes and regulations, avoiding battles over implied preemption. Well, sometimes even explicit language isn't enough. A new Arizona case, BNSF Railway Company v. Arizona Corporation Commission, No. 1 CA-CV 11-0002 (Jan. 3, 2012), shows why.

¶1  BNSF Railway Company (“BNSF”) appeals the judgment entered by the superior court affirming an October 21, 2009 order of the Arizona Corporation Commission (“Commission”). BNSF argues the superior court erred because the Commission’s authority to approve or deny the installation of  railroad wayside horns was preempted by federal law regulating the use of audible warnings at railroad crossings. For the following reasons, we agree with the superior court’s determination and affirm.

BNSF was not objecting to the installation of the horns themselves.

¶14   The reason BNSF is dissatisfied with the Commission’s order is that it objected to any  jurisdiction being exercised by the Commission. BNSF’s argument before the Commission and in the trial court, as it is now, is that the Commission was preempted from any action. BNSF has been harmed, from its perspective, by having to engage in lengthy and expensive Commission hearings it considered both unnecessary and unlawful.

(Emphasis in original.)

¶15   BNSF argues that the Commission did not have jurisdiction to enter its order because federal law concerning matters of railroad safety regulation expressly preempts the Commission.  To achieve national uniformity of regulation, Congress has directed that “[l]aws, regulations, and orders related to railroad safety and . . . security shall be nationally uniform to the extent practicable.”

However, in addition to express preemption the federal regulations expressly say that some related state actions are not preempted.

But the regulations expressly provide that their issuance “does not constitute federal pre emption of administrative procedures required under State law regarding the modification or installation of engineering improvements at highway-rail grade crossings."  49 C.F.R. § 222.7(e) (emphasis added).

¶16. BNSF argued that the Commission's action was not an "administrative procedure" and that the horns were not "engineering improvements".

The Arizona Corporation Commission is an unusual agency in that it is created by Arizona's Constitution and not its legislature. It has authority over a range of business and commercial matters independent of the governor. Because in this case the Commission held hearings and took evidence before making its decision, BNSF argued that this was a judicial or quasi-judicial action and not an "administrative procedure". The Commission and the Court looked to the federal APA and said that it didn't matter that it was quasi-judicial, it was still an administrative procedure. The Court cited to http://dictionary.reference.com/browse/improvement to determine that

Clearly, applying any common-sense definition, the installation of a wayside horn constitutes the installation of an “engineering improvement.”

¶31. From the practitioner's perspective, I suggest it is important to note that this case is one of a regulated entity subject to substantial federal regulation objecting to the jurisdiction of a state agency. One might suspect that there are other issues where states want to regulate railroads and the railroads do not want to have to deal with 50+ local agencies. EMM