Ninth Circuit Says State Environmental Law is Preempted in Railway Repair

Steven D. Schwinn, John Marshall Law School

The Ninth Circuit ruled this week that the Interstate Commerce Commission Termination Act preempted an Oregon state environmental measure as it related to repairs on a tourist rail line.

The ruling means that the state "removal-fill law," which requires a state permit for the removal of any amount of material from waters designated as Essential Salmonid Habitat, does not apply to the repair project.

The case arose when the Port of Tillamook Bay, which owns railways in Oregon, contracted with the Oregon Coast Scenic Railroad, which operates tourist trains on a portion of the Port's tracks, to repair some of the track. But when Oregon Coast started work, the Department of State Lands sent Oregon Coast a cease and desist order, alleging that the repair work would violate the state's removal-fill law. Oregon Coast sued, arguing that the federal ICCTA preempted Oregon's removal-fill law.

The Ninth Circuit agreed. The court ruled that the ICCTA preempts if an activity is (1) "transportation" (2) "by rail carrier" and (3) "as part of the interstate rail network." The court noted that the parties agreed that the activity was "transportation" under the ICCTA. It went on to say that the work was "by rail carrier," because "the repair work performed by Oregon Coast is 'an integral part of [the Port's] provision of transportation by rail carrier.'" Finally, the court held that the work was "part of the interstate rail network," because the line, while not currently attached to an interstate rail line, once was attached to an interstate rail line, and, when the repairs were finished, would once again be attached to an interstate rail line.

The court said that under ICCTA preemption, the work falls under the exclusive jurisdiction of the federal Surface Transportation Board, and that state regulation--including environmental regulation--is preempted.