Trans Div of Intl Assc-Smart v. Fra ( 2021 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
TRANSPORTATION DIVISION OF THE No. 19-71787
INTERNATIONAL ASSOCIATION OF
SHEET METAL, AIR, RAIL, AND FRA No.
TRANSPORTATION WORKERS; FRA-2014-0033
BROTHERHOOD OF LOCOMOTIVE
ENGINEERS AND TRAINMEN,
Petitioners,
v.
FEDERAL RAILROAD
ADMINISTRATION; U.S. DEPARTMENT
OF TRANSPORTATION,
Respondents,
ASSOCIATION OF AMERICAN
RAILROADS,
Intervenor.
2 TRANSP. DIV. OF INT’L ASS’N-SMART V. FRA
CALIFORNIA PUBLIC UTILITIES No. 19-71802
COMMISSION,
Petitioner, FRA No.
FRA-2014-0033
v.
PETE BUTTIGIEG, Secretary of
Transportation; U.S. DEPARTMENT
OF TRANSPORTATION; RONALD L.
BATORY, Administrator of the
Federal Railroad Administration;
FEDERAL RAILROAD
ADMINISTRATION,
Respondents,
ASSOCIATION OF AMERICAN
RAILROADS,
Intervenor.
On Petition for Review of an Order of the
Federal Railroad Administration
TRANSP. DIV. OF INT’L ASS’N-SMART V. FRA 3
STATE OF WASHINGTON, No. 19-71916
Petitioner,
TRAN No.
v. FRA-2014-0033
U.S. DEPARTMENT OF
TRANSPORTATION; FEDERAL
RAILROAD ADMINISTRATION,
Respondents,
ASSOCIATION OF AMERICAN
RAILROADS,
Intervenor.
STATE OF NEVADA, No. 19-71918
Petitioner,
TRAN No.
v. FRA-2014-0033
PETE BUTTIGIEG, Secretary of
Transportation; U.S. DEPARTMENT OPINION
OF TRANSPORTATION; RONALD L.
BATORY, Administrator of the
Federal Railroad Administration;
FEDERAL RAILROAD
ADMINISTRATION,
Respondents,
ASSOCIATION OF AMERICAN
RAILROADS,
Intervenor.
4 TRANSP. DIV. OF INT’L ASS’N-SMART V. FRA
On Petition for Review of an Order of the
Department of Transportation
Argued and Submitted October 5, 2020
Seattle, Washington
Filed February 23, 2021
Before: Consuelo M. Callahan and Morgan Christen,
Circuit Judges, and Jed S. Rakoff, * District Judge.
Opinion by Judge Callahan;
Concurrence by Judge Christen
SUMMARY **
Federal Railroad Administration
The panel dismissed a petition for review filed by two
unions; granted petitions filed by California, Washington,
and Nevada; vacated the Federal Railroad Administration
(“FRA”)’s Order, 84 Fed. Reg. 24,735, purporting to adopt
a nationwide maximum one-person crew rule and to preempt
any state laws concerning that subject matter; and remanded
to the FRA.
*
The Honorable Jed S. Rakoff, United States District Judge for the
Southern District of New York, sitting by designation.
**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
TRANSP. DIV. OF INT’L ASS’N-SMART V. FRA 5
As a threshold matter, the panel addressed arguments
concerning jurisdiction raised by the intervenor Association
of American Railroads. First, the panel dismissed the
Unions’ petition because venue was not proper under
28 U.S.C. § 2343 where the Unions’ principal offices were
not in the Ninth Circuit. Second, the panel held that there
was jurisdiction over the petitions filed by the States because
all three States were sufficiently aggrieved to invoke
jurisdiction under 28 U.S.C. § 2344.
The panel held that the Order did not implicitly preempt
state safety rules.
Turning to the merits, the panel held that the FRA failed
to comply with the Administrative Procedures Act
(“APA”)’s minimum notice-and-comment provisions in
issuing the Order. Specifically, the panel held that there was
nothing in the FRA’s March 2016 Notice of Proposed
Rulemaking (“NPRM”) (proposing a national minimum
requirement of two member crews for trains) to put a person
on notice that the FRA might adopt a national one-person
crew limit.
Finally, the panel held, on this record, that the Order was
arbitrary and capricious, and must be vacated. Specifically,
the panel held that the Order’s basis for its action – that two-
member crews were less safe than one-person crews – did
not withstand scrutiny. Also, the panel held that the FRA’s
contemporaneous explanation – that indirect safety
connections might be achieved with fewer than two crew
members – was lacking. Despite the deference due FRA
decisions, the panel concluded that the States met their
burden of showing that the issuance of the Order violated the
APA.
6 TRANSP. DIV. OF INT’L ASS’N-SMART V. FRA
Judge Christen concurred, and joined parts I, II, III, and
IV.C of the opinion. She would vacate the notice of
withdrawal solely based on the conclusion that the Notice of
Proposed Rulemaking did not provide adequate notice or
opportunity to comment. She would not reach whether the
notice of withdrawal negatively preempted state laws or
whether the FRA provided a satisfactory explanation for the
notice.
COUNSEL
Kristin Beneski (argued) and Harry Fukano, Assistant
Attorneys General; Robert W. Ferguson, Attorney General;
Office of the Attorney General, Seattle, Washington;
Arocles Aguilar, General Counsel; Christine J. Hammond,
Enrique Gallardo, and Vanessa Baldwin, California Public
Utilities Commission, San Francisco, California; for
Petitioners State of Washington and California Public
Utilities Commission.
Kevin C. Brodar (argued), General Counsel, SMART-TD,
North Olmsted, Ohio; Lawrence M. Mann, Alper & Mann
P.C., Bethesda, Maryland; Michael S. Wolly, Michael S.
Wolly PLLC, Washington, D.C.; Joshua D. McInerney
BLET, Barkan Meizlish LLP, Columbus, Ohio; for
Petitioners Transportation Division of the International
Association of Sheet Metal, Air, Rail, and Transportation
Workers, and Brotherhood of Locomotive Engineers and
Trainmen.
Aaron D. Ford, Attorney General; Gregory L. Zunino,
Deputy Solicitor General; Brandee Mooneyhan, Deputy
Attorney General; Office of the Attorney General, Carson
City, Nevada; Jill C. Davis, Assistant General Counsel,
TRANSP. DIV. OF INT’L ASS’N-SMART V. FRA 7
Public Utilities Commission, Carson City, Nevada; for
Petitioner State of Nevada.
Martin Totaro and Abby C. Wright, Appellate Staff; Joseph
H. Hunt, Assistant Attorney General; Civil Division, United
States Department of Justice, Washington, D.C.; Steven G.
Bradbury, General Counsel; Paul M. Geier, Assistant
General Counsel for Litigation and Enforcement; Joy K.
Park, Senior Trial Attorney; Brett A. Jortland, Acting Chief
Counsel; Rebecca S. Behravesh, Senior Attorney; Federal
Railroad Administration, Washington, D.C.; for
Respondents.
Thomas H. Dupree, Jr. and Jacob T. Spencer, Gibson Dunn
& Crutcher LLP, Washington, D.C.; Kathryn D. Kirmayer
and Joseph St. Peter, Association of American Railroads,
Washington, D.C.; for Intervenor Association of American
Railroads.
Kwame Raoul, Attorney General; Jane Elinor Notz, Solicitor
General; Sarah A. Hunger, Deputy Solicitor General;
Christian Arizmendi, Assistant Attorney General; Office of
the Attorney General, Chicago, Illinois; Xavier Becerra,
Attorney General, Sacramento, California; Phil Weiser,
Attorney General, Denver, Colorado; Kathleen Jennings,
Attorney General, Wilmington, Delaware; Karl A. Racine,
Attorney General, Washington, D.C.; Maura Healey,
Attorney General, Boston, Massachusetts; Keith Ellison,
Attorney General, St. Paul, Minnesota; Jim Hood, Attorney
General, Jackson, Mississippi; Gurbir S. Grewal, Attorney
General, Trenton, New Jersey; Letitia James, Attorney
General, New York, New York; Ellen F. Rosenblum,
Attorney General, Salem, Oregon; Mark R. Herring,
Attorney General, Richmond, Virginia; Joshua L. Kaul,
Attorney General, Madison, Wisconsin; for Amici Curiae
8 TRANSP. DIV. OF INT’L ASS’N-SMART V. FRA
Illinois, California, Colorado, Delaware, District of
Columbia, Massachusetts, Minnesota, Mississippi, New
Jersey, New York, Oregon, Virginia, and Wisconsin.
William A. Mullins, Baker & Miller PLLC, Washington,
D.C.; Sarah G. Yurasko, General Counsel, American Short
Line and Regional Railroad Association, Washington, D.C.;
for Amicus Curiae American Short Line and Regional
Railroad Association.
OPINION
CALLAHAN, Circuit Judge:
In March 2016, the Federal Railroad Administration
(FRA) issued a Notice of Proposed Rulemaking (NPRM)
proposing a national minimum requirement of two crew
members for trains. Over three years later, on May 29, 2019,
the FRA issued an order purporting to adopt a nationwide
maximum one-person crew rule and to preempt “any state
laws concerning that subject matter.” 84 Fed. Reg. 24,735(the Order). Two Unions 1 and three states, Washington,
California, 2 and Nevada (collectively referred to as the
States), challenge the Order under the Administrative
Procedure Act (APA). We hold that the Order does not
implicitly preempt state safety rules, that the FRA failed to
comply with the APA’s notice-and-comment provisions in
1
The petition for review was filed by the International Association
of Sheet Metal, Air, Rail, and Transportation Workers and the
Brotherhood of Locomotive Engineers and Trainmen (collectively
referred to as the Unions).
2
The petition was actually filed by the California Public Utilities
Commission (California PUC).
TRANSP. DIV. OF INT’L ASS’N-SMART V. FRA 9
issuing the Order, and that the Order is arbitrary and
capricious. We dismiss the Unions’ petition for review but
grant the States’ petitions and vacate the Order.
I
The Safety Act empowers the Secretary of
Transportation to “prescribe regulations and issue orders”
addressing railroad safety. 49 U.S.C. § 20103(a). The
Secretary has delegated that authority to the FRA, an agency
within the Department of Transportation. See 49 C.F.R.
§ 1.89(a). However, the Safety Act also provides that states
may adopt or continue in force laws and regulations related
to railroad safety, even under certain conditions when they
are more “stringent” than the FRA’s rules. 49 U.S.C.
§ 20106(a)(2).
Following two major railroad accidents in 2013 at Lac-
Mégantic, Quebec, and Casselton, North Dakota, the FRA
asked the Rail Safety Advisory Committee (RSAC) to
review whether train crew staffing affected railroad safety.
The RSAC included representatives from all the major
players concerning railroads, including railroads, labor
organizations, suppliers, manufacturers, and the California
PUC. The RSAC appointed a Working Group. At its first
meeting, the FRA noted that it was concerned with railroad
safety, that safety was enhanced through redundancy, and
that the agency’s safety regulations were written with at least
a two-person crew in mind.
The Working Group was unable to reach a consensus.
Accordingly, consideration of the appropriate crew size was
submitted to the FRA for formal rulemaking. On March 15,
2016, the FRA issued an NPRM. 81 Fed. Reg. 13,918(March 15, 2016). The first three sentences of the summary
of the NPRM read:
10 TRANSP. DIV. OF INT’L ASS’N-SMART V. FRA
FRA proposes regulations establishing
minimum requirements for the size of train
crew staffs depending on the type of
operation. A minimum requirement of two
crewmembers is proposed for all railroad
operations, with exceptions proposed for
those operations that FRA believes do not
pose significant safety risks to railroad
employees, the general public, and the
environment by using fewer than two-person
crews. This proposed rule would also
establish minimum requirements for the roles
and responsibilities of the second train crew
member on a moving train, and promote safe
and effective teamwork.
Id. (emphasis added).
A public hearing on the NPRM was held on July 15,
2016, and the comment period was extended to August 15,
2016. The States assert that most commenters supported
“some kind of train crew staffing requirements.” No further
action was taken until the FRA issued the Order on May 29,
2019. 84 Fed. Reg. 24,735.
II
The Order’s summary states that the FRA “withdraws
the March 15, 2016 NPRM concerning train crew staffing,”
but adds that “[i]n withdrawing the NPRM, FRA is
providing notice of its affirmative decision that no regulation
of train crew staffing is necessary or appropriate for railroad
operations to be conducted safely at this time.” Id.The Order relates that the FRA had “hoped [the] RSAC
would provide useful analysis, including conclusive data
TRANSP. DIV. OF INT’L ASS’N-SMART V. FRA 11
addressing whether there is a safety benefit or detriment
from crew redundancy (i.e., multiple-person train crews).”
Id. However, the RSAC was unable to reach consensus and
the FRA issued the NPRM. The Order confirms that 1,545
out of nearly 1,600 comments supported some kind of
multiple crew staffing requirement. Id. at 24,736. Those
comments supporting staffing requirements came from
individuals, a variety of government officials and
organizations, and state and local governments. Id. They
raised four main points: “(1) [a] train crew’s duties are too
demanding for one person; (2) new technology will make the
job more complex; (3) unpredictable scheduling makes
fatigue a greater factor when there is only a one-person crew;
and (4) the idea of a one-person train crew is seemingly in
conflict with the statutory and regulatory requirements for
certification of both locomotive engineers and conductors.”
Id.The Order notes that the proposal to adopt a minimum
two-person crew rule was opposed primarily by railroads
and railroad associations. Id. at. 24,737. The Order states
that studies funded by the Association of American
Railroads (AAR) “concluded that safety data analysis show
single-person crew operations appear as safe as multiple-
person crew operations, if not safer.” Id. One study
“concluded that the proposed rule would greatly reduce U.S.
railroads’ ability to control operating costs, without making
the industry safer.” Id. A second study funded by the AAR
found that “European rail operations are comparable to U.S.
rail operations and therefore the success of the European
network in implementing single-person crew operations can
serve as a model for the U.S. rail system.” Id.The Order finds that there “is no direct safety connection
between train crew staffing and the Lac-Mégantic or
12 TRANSP. DIV. OF INT’L ASS’N-SMART V. FRA
Casselton accidents.” Id. It notes that the “FRA does not
have information that suggests that there have been any
previous accidents involving one-person crew operations
that could have been avoided by adding a second
crewmember.” Id. at 24,738 (quoting 81 Fed. Reg. at
13,921). The Order further reasons that although there were
“some indirect connections between crew staffing and
railroad safety with respect to . . . the accidents, those
connections are tangential at best and do not provide a
sufficient basis for FRA regulation of train crew staffing
requirements.” 3 Id.
The Order states that the FRA’s safety data “does not
establish that one-person operations are less safe than multi-
person train crews,” that “existing one-person operations
‘have not yet raised serious safety concerns,’” and that “it is
3
Reviewing the Casselton accident, the FRA commented that it:
believes that the same type of positive post-accident
mitigating actions were achievable with: (1) [f]ewer
than two crewmembers on the BNSF grain train
involved in the accident, and (2) a well-planned, post-
accident protocol that quickly brings railroad
employees to the scene of an accident. In other words,
the facts of the accident suggest that BNSF could have
duplicated the mitigating moves of the grain train crew
with responding emergency crewmembers. While
FRA acknowledges the BSNF key train crew
performed well, potentially saving each other’s lives,
it is possible that one properly trained crewmember,
technology, and/or additional railroad emergency
planning could have achieved similar mitigating
actions. Thus, the indirect safety connections cited in
the NPRM do not proved a sufficient basis for FRA
regulation of train crew staffing.
Id. at 24,738.
TRANSP. DIV. OF INT’L ASS’N-SMART V. FRA 13
possible that one-person crews have contributed to the
[railroads’] improving safety record.” Id. at 24,739 (quoting
81 Fed. Reg. at 13,950 and 13,932 (alteration in original)).
The FRA asserts that data collected over a 17-year period
did not allow it to “determine that any of the
accidents/incidents involving a one-person crew would have
been prevented by having multiple crewmembers.” Id. The
Order states that the reports to the Working Group “identify
safety issues that railroads should consider when evaluating
any reduction in the number of train crewmembers or a shift
in responsibilities among those crewmembers” but “do not
indicate that one-person crew operations are less safe and
therefore do not form a sufficient basis for a final rule on
crew staffing.” Id. at 24,740.
The Order notes that the received comments “do not
provide conclusive “data suggesting that . . . any previous
accidents involving one-person crew operations . . . could
have been avoided by adding a second crewmember.” Id.
Although “the comments note[d] some indirect connections
between crew staffing and railroad safety, such as post-
accident response or handling of disabled trains,” the FRA
believes that “the indirect safety connections cited in the
comments could be achieved with fewer than two
crewmembers with a well-planned, disabled-train/post-
accident protocol.” 4 Id.
4
This section of the Order concludes with the following paragraph:
FRA also does not concur with commenters who assert
that the idea of a one-person train crew is seemingly in
conflict with the statutory and regulatory requirements
for certification of both locomotive engineers and
conductors. There are no specific statutes or
regulations prohibiting a one-person train crew, nor is
14 TRANSP. DIV. OF INT’L ASS’N-SMART V. FRA
The Order next observes that railroads are moving away
from traditional systems and that “the integration of
technology and automation . . . has the potential to increase
productivity, facilitate freight movement, create new kinds
of jobs, and, most importantly, improve safety significantly
by reducing accidents caused by human error.” Id. It notes
that “DOT’s approach to achieving safety improvements
begins with a focus on removing unnecessary barriers and
issuing voluntary guidance, rather than regulations that
could stifle innovation,” and that “finalizing the train crew
staffing rule would have departed from FRA’s long-standing
regulatory approach of not endorsing any particular crew
staffing arrangement.” Id. The Order suggests that the “lack
of a legal prohibition means that each railroad is free to make
train crew staffing decisions as part of their operational
management decisions, which would include consideration
of technological advancements and any applicable collective
bargaining agreements.” Id.
Despite concerns with the insufficiency or
inconclusiveness of the data in the record, the last section of
the Order notes that “nine states have laws in place
regulating crew size,” and states that the Order’s intent is “to
there a specific requirement that would prohibit
autonomous technology from operating a locomotive
or train in lieu of a certified locomotive engineer.
However, the NPRM identified several regulations
that a railroad would need to be cognizant of when
adjusting its crew staffing levels, while
acknowledging that none of those regulations requires
a minimum number of crewmembers to achieve
compliance.
Id.
TRANSP. DIV. OF INT’L ASS’N-SMART V. FRA 15
preempt all state laws attempting to regulate train crew
staffing in any manner.” Id. at 24,741. It explains:
Provisions of the federal railroad safety
statutes, specifically the former Federal
Railroad Safety Act of 1970 (FRSA),
repealed and recodified at 49 U.S.C. § 20106,
mandate that laws, regulations, and orders
“related to railroad safety” be nationally
uniform. The FRSA provides that a state law
is preempted where FRA, under authority
delegated from the Secretary of
Transportation, “prescribes a regulation or
issues an order covering the subject matter of
the State requirement.” A federal regulation
or order covers the subject matter of a state
law where “the federal regulations
substantially subsume the subject matter of
the relevant state law.” A federal regulation
or order need not be identical to the state law
to cover the same subject matter. The
Supreme Court has held preemption can be
found from “related safety regulations” and
“the context of the overall structure of the
regulations.” Federal and state actions cover
the same subject matter when they address
the same railroad safety concerns. FRA
intends this notice of withdrawal to cover the
same subject matter as the state laws
regulating crew size and therefore expects it
will have preemptive effect.
Id. (footnotes omitted).
16 TRANSP. DIV. OF INT’L ASS’N-SMART V. FRA
The Order invokes “what the Supreme Court refer[s] to
as ‘negative’ or ‘implicit’ preemption,” quoting Ray v.
Atlantic Richfield Co., 435 U.S. 151, 178 (1978), for the
proposition that ‘“[w]here failure of . . . federal officials
affirmatively to exercise their full authority takes on the
character of a ruling that no such regulation is appropriate or
approved pursuant to the policy of the statute,’ any state law
enacting such a regulation is preempted.” Id.The Order concludes that the FRA has “determined that
issuing any regulation requiring a minimum number of train
crewmembers would not be justified because such a
regulation is unnecessary for a railroad operation to be
conducted safely at this time” and that “no regulation of train
crew staffing is appropriate, and that FRA intends to
negatively preempt any state laws concerning that subject
matter.” Id.On July 16, 2019, the Unions were the first to file a
petition for review. The California PUC filed its petition on
July 18, followed by petitions by Washington and Nevada.
All were timely filed within 60 days of the Order. See 28
U.S.C. § 2344.
III
Before reaching petitioners’ challenges to the Order’s
merits, we address the arguments concerning jurisdiction
raised by the intervenor, the AAR. It argues that the court
lacks jurisdiction over the Unions’ petition because 28
U.S.C. § 2343 states that venue is proper “in the judicial
circuit in which petitioner resides or has its principal office,
or in the United States Court of Appeals for the District of
Columbia Circuit.” The argument is well taken, as the
Unions’ principal offices are not within the Ninth Circuit.
Under other circumstances we might transfer the petition to
TRANSP. DIV. OF INT’L ASS’N-SMART V. FRA 17
a sister circuit, but because we determine that we have
jurisdiction over the petitions filed by the States and vacate
the FRA’s order, we dismiss the Unions’ petition.
AAR also claims that we should dismiss the States’
petitions, arguing that none of the States “participated in the
crew-size rulemaking” and thus are not “parties aggrieved”
and may not invoke our jurisdiction pursuant to § 2344. In
support of its position, AAR argues that the comment letters
submitted to the FRA by state public utilities commissions
do not count as participation because the PUCs are separate
entities from the states.
The FRA does not agree. It notes that the California
PUC participated in the working group through the
Association of State Rail Safety Managers and asserts that
this “satisfies the requirement that an aggrieved party has
participated in the challenged agency proceeding.”
We determine that all three States are sufficiently
aggrieved to invoke our jurisdiction under § 2344. All three
States did participate in the proceedings. California’s PUC
was part of the working group, and both Nevada and
Washington’s PUCs submitted letters. 5
5
Citing Armstrong v. Exceptional Child Center, Inc., 575 U.S. 320,
324 (2015), the AAR further argues that the preemptive effect of the
Order is not ripe for decision because preemption is determined by a
court, not the FRA. Armstrong, is inapposite. It concerned a Medicaid
provider’s attempt to invoke the Supremacy Clause to force state
compliance with federal law. Moreover, the Supreme Court recognized
that it has “long held that federal courts may in some circumstances grant
injunctive relief against state officers who are violating, or planning to
violate, federal law.” Id. at 326. There is no suggestion that the court
may not enjoin a federal agency from violating the APA.
18 TRANSP. DIV. OF INT’L ASS’N-SMART V. FRA
IV.
A. Standards of Review
There is no doubt that the FRA could withdraw the
NPRM. Indeed, it makes sense that when the comments
following the issuance of an NPRM do not convince the
agency to take action, the agency should withdraw the
NPRM. But the Order does much more than withdraw the
NPRM; it appears to adopt a one-person train crew rule and
purports to preempt any state safety laws concerning train
crew staffing. 84 Fed. Reg. 24,741.
In reviewing the challenges to the Order, we take our
guidance from two recent Supreme Court opinions,
Department of Homeland Security v. Regents of the
University of California, 140 S. Ct. 1891 (2020), and
Department of Comm. v. New York, 139 S. Ct. 2551 (2019).
In Regents, the Supreme Court reiterated that the APA “sets
forth the procedures by which federal agencies are
accountable to the public and their actions subject to review
by the courts” and “requires agencies to engage in reasoned
decisionmaking.” 140 S. Ct. at 1905 (internal citations
omitted). The APA “directs that agency actions be ‘set
aside’ if they are ‘arbitrary’ or ‘capricious.’” Id. (quoting 5
U.S.C. § 706(2)(A)). “Under this narrow standard of review,
. . . a court is not to substitute its judgment for that of the
agency, but instead to assess only whether the decision was
based on a consideration of the relevant factors and whether
there has been a clear error of judgment.” Id. (internal
citations and quotations omitted). The Court explained that
“[i]t is a foundational principle of administrative law” that
judicial review of agency action is limited to the grounds that
the agency invoked when it took the action.” Id. at 1907.
TRANSP. DIV. OF INT’L ASS’N-SMART V. FRA 19
In New York, the Court set forth four steps for reviewing
whether an agency’s stated reasons for taking action are
pretextual. “First, in order to permit meaningful judicial
review, an agency must disclose the basis of its action.” 139
S. Ct. at 2573 (quoting Burlington Truck Lines, Inc. v.
United States, 371 U.S. 156, 167–69 (1962)). “Second, in
reviewing agency action, a court is ordinarily limited to
evaluating the agency’s contemporaneous explanation in
light of the existing administrative record.” Id. “Third, a
court may not reject an agency’s stated reasons for acting
simply because the agency might also have had other
unstated reasons.” Id. Fourth, the Court “recognized a
narrow exception to the general rule against inquiring into
‘the mental processes of administrative decisionmakers’”
where there is “a strong showing of bad faith or improper
behavior.’” Id. at 2573–74 (quoting Citizens to Preserve
Overton Park, Inc. v. Volpe, 401 U.S 402, 420 (1971)).
In New York, the Court found that it had been presented
“with an explanation for agency action that is incongruent
with what the record reveals about the agency’s priorities
and decisionmaking process.” Id. at 2575. It explained that:
[t]he reasoned explanation requirement of
administrative law, after all, is meant to
ensure that agencies offer genuine
justifications for important decisions, reasons
that can be scrutinized by courts and the
interested public. Accepting contrived
reasons would defeat the purpose of the
enterprise. If judicial review is to be more
than an empty ritual, it must demand
something better than the explanation offered
for the action taken in this case.
20 TRANSP. DIV. OF INT’L ASS’N-SMART V. FRA
Id. at 2575–76. The Court concluded: “We do not hold that
the agency decision here was substantively invalid. But
agencies must pursue their goals reasonably. Reasoned
decisionmaking under the Administrative Procedure Act
calls for an explanation for agency action. What was
provided here was more of a distraction.” Id. at 2576.
In reviewing the challenges to the Order, we first address
the FRA’s assertion that the Order implicitly preempts state
safety rules. After determining that it does not, we consider
whether the Order violates the APA’s minimum notice-and-
comment requirements and whether the Order is arbitrary
and capricious. We conclude that the issuance of the Order
violated the APA’s notice-and-comment requirements and
that the Order is arbitrary and capricious, and therefore must
be vacated.
B. The States’ Safety Rules are not Negatively
Preempted by the Order
The FRA correctly asserts that cases such as CSX
Transportation, Inc. v. Easterwood, 507 U.S. 658 (1993),
Ray v. Atlantic Richfield Co., 435 U.S. 151 (1978), and
Burlington Northern Railroad Co. v. Montana, 880 F.2d
1104 (9th Cir. 1989), confirm that an order may implicitly
preempt state laws. However, the cases do not support the
FRA’s assertion that this Order did so.
CSX Transportation was an action by the widow of a
truck driver killed when hit by a train. The Court held that
federal regulations setting maximum train speeds on certain
classes of track preempted any common-law negligence
claim that the conductor was travelling too fast, despite
adhering to the federal speed limit. See 507 U.S. at 664, 676.
Ray concerned Washington’s safety regulations for tankers
entering Puget Sound. The Court held that the state’s
TRANSP. DIV. OF INT’L ASS’N-SMART V. FRA 21
limitation on the maximum size of a tanker that could enter
Puget Sound was preempted by federal regulation but that
the state’s requirements of local pilotage and tug escorts
were not preempted. 435 U.S. at 177–79. Burlington
concerned whether FRA regulations preempted a state law
requiring a caboose on trains longer than 2,000 feet. We held
that the state regulation was preempted because it covered
the same subject matter as the FRA regulations. 880 F.2d at1105–06. But Burlington’s application to this litigation is
limited by two factors: in Burlington the FRA had
“promulgated two regulations affecting cabooses”; and
Montana conceded that “its caboose law is not designed to
reduce an ‘essentially local’ safety hazard.” Id. at 1105.
Each of these cases concerned conduct that was subject to
existing agency regulation. Thus, although they affirm that
FRA regulations can preempt state safety regulations, they
do not compel a determination that the Order did so.
The Supreme Court has indicated that when reviewing
challenges to agency action under the APA a court should
consider the particular statutes and the facts in each case.
See Regents, 140 S. Ct. at 1905, 1908. Here, Congress
limited the preemptive effect of an FRA order by providing
in § 20106(a)(2) that states may “continue in force an
additional or more stringent law” that is “necessary to
eliminate or reduce an essentially local safety or security
hazard” and “is not incompatible with a [federal] law,
regulation, or order.” Thus, a state regulation is not
automatically preempted by FRA action. Rather, the state
regulation is preempted only when incompatible with the
FRA’s decision.
The Order, although declaring it “negatively preempt[s]
any state laws” concerning crew staffing, does not address
why state regulations addressing local hazards cannot
22 TRANSP. DIV. OF INT’L ASS’N-SMART V. FRA
coexist with the Order’s ruling on crew size. The Order
offers an economic rationale: “a train crew staffing rule
would unnecessarily impede the future of rail innovation and
automation.” 84 Fed. Reg. 24,740. But this is not a safety
consideration. The FRA also argues that state regulations
that apply statewide do not address essentially local hazards.
Id. at 24,741 n.46. This assertion is not fully addressed in
the Order and does not appear to be ripe for judicial
consideration at this time.
In sum, although preemption of state safety laws is not
beyond the FRA’s mandate, the Order does not do so
implicitly. Next, we turn to the merits of the Order.
C. The Order Violates the APA’s Minimum Notice-and-
Comment Requirements
As noted by the States, the most fundamental of the
APA’s procedural requirements are that (1) a “notice of
proposed rulemaking shall be published in the Federal
Register,” and (2) “the agency shall give interested persons
an opportunity to participate in the rule making through
submission of written data, views, or arguments” for the
agency’s consideration. See 5 U.S.C. § 553(b) and (c). In
Nat. Res. Def. Council v. U.S. E.P.A. (NRDC II), 279 F.3d
1180, 1186 (9th Cir. 2002), we stated that “[a] decision made
without adequate notice and comment is arbitrary or an
abuse of discretion” as a matter of law. We further reiterated
that “a final rule which departs from a proposed rule must be
a logical outgrowth of the proposed rule” and “[t]he essential
inquiry focuses on whether interested parties reasonably
could have anticipated the final rulemaking from the
[proposed rule].” Id. (quoting NRDC v. EPA (NRDC I), 863
F.2d 1420, 1429 (9th Cir. 1988)).
TRANSP. DIV. OF INT’L ASS’N-SMART V. FRA 23
More recently, in Empire Health Foundation for Valley
Hospital Medical Center v. Azar, 958 F.3d 873 (9th Cir.
2020), we reasserted that: (1) a decision made without
adequate notice and comment is arbitrary or an abuse of
discretion; (2) under the APA the adequacy of notice turns
on whether interested parties reasonably could have
anticipated the final rulemaking from the proposed rule; (3)
the key inquiry is whether the changes in the final rule are a
logical outgrowth of the notice and comments received; and
(4) a further consideration is whether a new round of notice
and comment would provide the first opportunity for
interested parties to offer comments that could persuade the
agency to modify its rule. Id. at 882–883.
The States argue that the NPRM, which proposed a
nationwide two-crewmember minimum requirement, gave
no indication that FRA “would affirmatively eradicate all
two-crewmember requirements, including those established
under state law.” They object that the Order “is far broader
than the NPRM indicated,” because it purports to preempt
“all” state laws regulating train crew staffing “in any
manner,” which could encompass “not only the number of
crewmembers, but also any non-federal requirements
pertaining to topics such as education, training, and
qualifications required for train crew staff.” Moreover,
according to the States, the FRA “did not cite any public
comments to justify its preemption decision.”
The FRA agrees that its final action is subject to the
APA’s rulemaking requirements and should be a logical
outgrowth of the proposed rule. However, it asserts that the
Order “plainly satisfies” the logical outgrowth requirement
because the NPRM “provided ‘fair notice’ to interested
parties of the possibility that the agency would determine
that no regulation was appropriate,” and thus the public
24 TRANSP. DIV. OF INT’L ASS’N-SMART V. FRA
knew “that the agency was considering whether to allow
one-person crews for ‘most existing operations.’” The FRA
further contends that it informed the public that it planned to
approve on a case-by-case basis “operations with less than
two crewmembers where a railroad provide[d] a thorough
description of that operation, ha[d] sensibly assessed the
risks associated with implementing it, and ha[d] taken
appropriate measures to mitigate or address any risks or
safety hazards that might arise from it.”
AAR similarly argues that the Order is a logical
outgrowth of the NPRM because it was reasonably
foreseeable that the FRA would “examine the safety
concerns regarding” one-person operations “and
affirmatively decide that no regulation is needed.” It asserts
that “it was also foreseeable that the agency’s final decision
would preempt all state laws addressing that same subject
matter.”
Although federal regulation of crew size was clearly
placed in issue by the NPRM, the Order’s preemption of all
state safety requirements was not a “logical outgrowth” of
the NPRM. There was nothing in the NPRM to put a person
on notice that the FRA might adopt a national one-person
crew limit. Rather, the NPRM stated that the FRA was
considering mandating a minimum requirement of two
crewmembers. The purpose of the proposed rule was to
“establish minimum requirements for the roles and
responsibilities of the second train crew member.” 81 Fed.
Reg. 13,959. Indeed, the FRA’s very argument that it had
informed the public that it planned to approve on a case-by-
case basis operations with fewer than two crewmembers
suggests that it was not contemplating the adoption of a
nationwide one-person train crew rule. The FRA does not
TRANSP. DIV. OF INT’L ASS’N-SMART V. FRA 25
contend that it ever issued any notice modifying that stated
purpose of the NPRM.
In sum, it appears that (1) the interested parties could not
have reasonably anticipated the Order, see Empire Health
Found., 958 F.3d at 882, (2) the Order is not a “logical
outgrowth of the notice and comments received,” id.
(quoting Rybachek v. U.S. E.P.A., 904 F.2d 1276, 1288 (9th
Cir. 1990)), and (3) “a new round of notice and comment
would provide the first opportunity for interested parties to
offer comments that could persuade the agency to modify its
rule.” Id. at 883 (quoting NRDC II, 279 F.3d at 1186).
D. On This Record We Conclude That the Order is
Arbitrary and Capricious and Must be Vacated
Although the Order describes itself as withdrawing an
NPRM, its real and intended effect is to authorize nationwide
one-person train crews and to bar any contrary state
regulations. In reviewing petitioners’ claim that the FRA
failed to comply with the APA, we look to “whether the
[FRA] examined the relevant data and articulated a
satisfactory explanation for [its] decision, including a
rational connection between the facts found and the choice
made.” New York, 139 S. Ct. at 2569 (citations and internal
quotation marks omitted). Applying the approach set forth
in New York, we determine that the record does not support
the Order’s embrace of a one-person train crew or its
preemption of state laws.
1. The Order’s Basis for Its Action Does Not
Withstand Scrutiny
The Order’s reasoning is problematic. It asserts that
there is still no “reliable or conclusive statistical data to
suggest whether one-person crew operations are generally
26 TRANSP. DIV. OF INT’L ASS’N-SMART V. FRA
safer or less safe than multiple-person crew operations.” 84
Fed. Reg. 24,737. Critically, this lack of data does not
support the promulgation of a one-person train crew rule and
the preemption of state safety laws.
A careful reading of the Order raises substantial
questions as to the soundness of its effective establishment
of a national one-person crew standard. 6 The Order
recognizes that even as to the two accidents that prompted
the NPRM there were “some indirect connections between
crew staffing and railroad safety,” but dismisses these as
“tangential at best.” Id. at 24,738. The Order recognizes
that it is impossible to “compare the accident/incident rate of
one-person operations to that of two-person train crew
operations.” 7 Id. at 24,739.
The Order further recognizes that the Working Group
identified “safety issues that railroads should consider when
evaluating any reduction in the number of train
crewmembers,” but opines that these “reports do not indicate
that one-person crew operations are less safe” and “do not
form sufficient basis for a final rule on crew staffing.” Id. at
24,740. The Order again recognizes “some indirect
connection between crew staffing and railroad safety, such
as post-accident response or handling of disabled trains,” but
opines that these concerns “could be achieved with fewer
than two crewmembers with a well-planned, disabled-
train/post-accident protocol.” Id. Similarly, addressing
Indeed, it is not entirely clear whether the Order even establishes a
6
one-person crew requirement or permits railroads, in their discretion, to
operate trains without any operator aboard the train.
7
It stands to reason that where a two-person crew avoided an
accident that might not have been avoided by a one-person crew, there
would be no accident report.
TRANSP. DIV. OF INT’L ASS’N-SMART V. FRA 27
whether “the idea of a one-person train crew” conflicts with
existing statutory and regulatory requirements, the Order
notes that no specific statute or regulation prohibits a one-
person train crew, but cautions that “the NPRM identified
several regulations that a railroad would need to be
cognizant of when adjusting its crew staffing levels.” Id.The Order alludes to safety concerns but does not really
address them.
It is not clear that there is a sound factual basis for the
Order’s suggestion that two-member crews are less safe than
one-person crews. The Order seems to rely on a study
submitted by the AAR that allegedly shows that “single-
person crew operations appear as safe as multiple person
crew operations, if not safer.” Id. at 24,737. But a single
study suggesting that one-person crew operations “appear as
safe” as two-person crews seems a thin reed on which to base
a national rule: particularly in light of all the comments
supporting a two-person crew rule and the proffered
anecdotal evidence.
Indeed, the Order fails to address the multiple safety
concerns raised by the majority of the comments on the
NPRM. For example, the States allege that the FRA’s own
research “identified crewmember fatigue as a critical
component of the safety-related reasons for regulating crew
size,” and correctly note that the Order does not discuss crew
fatigue at all. The States also argue that although the FRA
had previously recognized that mountainous terrain presents
technical challenges and complexities that favor multi-
person crews, the Order fails to consider these concerns.
Rather, the Order states that the FRA “believes” that “post-
accident responses [and] handling of disabled trains . . .
could be achieved with fewer than two crewmembers with a
well-planned disabled-train/post-accident protocol that
28 TRANSP. DIV. OF INT’L ASS’N-SMART V. FRA
quickly brings railroad employees to the scene of a disabled
train or accident.” Id. at 24,740 (emphases added). But the
Order does not require that a railroad have “a well-planned
disabled-train/post-accident protocol.” Moreover, with
trains crossing the Sierra and Cascade mountain ranges in
the winter, it seems unlikely that pursuant to the best “well-
planned” protocol, assistance could quickly reach a disabled
train on a mountain pass.
Even the Order’s assertion that “a train crew staffing rule
would unnecessarily impede the future of rail innovation and
automation,” id. at 24,740, is not explained. The Order
mentions that automation may reduce accidents caused by
human error, that unnecessary barriers should be removed,
and that some commentators “identified the train crew
staffing rulemaking as a potential barrier to automation or
other technology improvements.” Id. But there is no
discussion of how a two-person crew rule would actually
interfere with innovation or automation. Instead, the section
asserts that “requiring a minimum number of crewmembers
for certain trains . . . would have departed from FRA’s long-
standing regulatory approach of not endorsing any particular
crew staffing arrangement.” Id. But this begs the question
of why the promulgation of a one-person crew rule does not
also violate the long-standing approach of not endorsing a
particular crew staffing arrangement.
Finally, even if we were to accept the FRA’s assertion
that a “regulation requiring a minimum number of train
crewmembers . . . is unnecessary for a railroad operation to
be conducted safely,” this is not a sufficient reason to
“negatively preempt any state laws concerning that subject
matter.” Id. at 24,741. To the contrary, Congress recognized
the need to consider local conditions when it provided in
§ 20106(a)(2) that a state could “continue in force an
TRANSP. DIV. OF INT’L ASS’N-SMART V. FRA 29
additional or more stringent law” that is “necessary to
eliminate or reduce an essentially local safety or security
hazard.” The FRA’s assertion that it has the inherent
authority to implicitly preempt state law does not address
why preemption is necessary or desirable here.
Our review of the Order indicates that neither its
promulgation of a one-person train crew rule nor its
preemption of state safety laws fairly addresses the safety
issues raised in the comments to the NPRM.
2. The Agency’s Contemporaneous Explanation is
Lacking.
An alternative motive such as economic efficiency might
not render the Order arbitrary and capricious if it otherwise
addressed the safety concerns which are the FRA’s mandate.
See New York, 139 S. Ct. at 2573. As noted, the FRA
“believes” that indirect safety connections “could be
achieved” with fewer than two crewmembers with a well-
planned disabled-train/post-accident protocol” and that it
“expects” railroads to consider such protocol. 84 Fed. Reg.
at 24,740. Beliefs as to what “could be achieved” and
expectations as to what railroads will do are not a legitimate
ground for preempting state safety regulations.
Furthermore, other than arguing that state regulations for
“essentially local safety hazards” may not be “statewide in
character,” see id. at 24,741 n.46, the Order offers no safety
or economic justification for preemption.
V.
Despite the deference due FRA decisions, the States
have met their burden of showing that the issuance of the
30 TRANSP. DIV. OF INT’L ASS’N-SMART V. FRA
Order violated the APA’s minimum notice-and-comment
requirements and that the Order is arbitrary and capricious. 8
This case recalls a case commented on by the Supreme
Court in Regents. There the Court wrote:
That reasoning repeated the error we
identified in one of our leading modern
administrative law cases, Motor Vehicle
Manufacturers Association of the United
States, Inc. v. State Farm Mutual Automobile
Insurance Co. [463 U.S. 29 (1983)]. There,
the National Highway Traffic Safety
Administration (NHTSA) promulgated a
requirement that motor vehicles produced
after 1982 be equipped with one of two
passive restraints: airbags or automatic
seatbelts. Four years later, before the
requirement went into effect, NHTSA
concluded that automatic seatbelts, the
restraint of choice for most manufacturers,
would not provide effective protection.
Based on that premise, NHTSA rescinded the
passive restraint requirement in full.
We concluded that the total rescission was
arbitrary and capricious. As we explained,
NHTSA’s justification supported only
“disallow[ing] compliance by means of”
automatic seatbelts. It did “not cast doubt”
on the “efficacy of airbag technology” or
8
Because we vacate the Order on these grounds, we need not, and
do not, consider the States’ arguments that the Order was untimely and
violates the Safety Act.
TRANSP. DIV. OF INT’L ASS’N-SMART V. FRA 31
upon “the need for a passive restraint
standard.” Given NHTSA’s prior judgment
that “airbags are an effective and cost-
beneficial lifesaving technology,” we held
that “the mandatory passive restraint rule
[could] not be abandoned without any
consideration whatsoever of an airbags-only
requirement.”
140 S. Ct. at 1912 (internal citations omitted).
Here, too, the FRA seeks to change its position without
fully explaining its reasons for doing so and without
following its usual proceedings for rulemaking. The FRA
went from proposing, as required by safety concerns, a
national minimum two-person train crew rule, to imposing a
maximum one-person train crew rule and preempting state
safety laws based on a record that the FRA describes as
insufficient to show “whether one-person crew operations
are generally safer or less safe than multiple-person crew
operations.” 84 Fed. Reg at 24,737. As in State Farm, the
issue is not whether the FRA has the authority to issue a rule
that preempts state safety regulations, but whether it has
done so in a manner that complies with the APA. On this
record, we conclude that it did not.
Accordingly, the Order is vacated, and the matter is
remanded to the FRA. Although the FRA asserts that
vacatur “would result in a disruptive patchwork of state
laws,” it appears that Congress foresaw a variety of state
laws when it provided in § 20106 that states may have more
stringent laws as long as they are not incompatible with
federal law.
The petition filed by the Unions is DISMISSED. The
petitions filed by California, Washington, and Nevada are
32 TRANSP. DIV. OF INT’L ASS’N-SMART V. FRA
GRANTED, the Order, 84 Fed. Reg. 24,735, is
VACATED, and the matter is REMANDED to the Federal
Railroad Administration.
CHRISTEN, Circuit Judge, concurring:
I join parts I, II, III and IV.C of the opinion. Because
“[a] decision made without adequate notice and comment is
arbitrary or an abuse of discretion,” Nat. Res. Def. Council
v. U.S. E.P.A., 279 F.3d 1180, 1186 (9th Cir. 2002), I would
vacate the notice of withdrawal solely based on our
conclusion that the Notice of Proposed Rulemaking did not
provide adequate notice or opportunity to comment. I would
not reach whether the notice of withdrawal negatively
preempted state laws or whether the Federal Railroad
Administration provided a satisfactory explanation for the
notice.