City of Girard v. Youngstown Belt Railway Co. ( 2012 )


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  • [Cite as Girard v. Youngstown Belt Ry. Co., 
    134 Ohio St. 3d 79
    , 2012-Ohio-5370.]
    THE CITY OF GIRARD, APPELLANT, v. YOUNGSTOWN BELT RAILWAY
    COMPANY ET AL., APPELLEES.
    [Cite as Girard v. Youngstown Belt Ry. Co.,
    
    134 Ohio St. 3d 79
    , 2012-Ohio-5370.]
    Federal preemption—Interstate Commerce Commission Termination Act—49
    U.S.C. 10101 et seq.—Eminent domain.
    (No. 2011-1850—Submitted June 19, 2012—Decided November 21, 2012.)
    APPEAL from the Court of Appeals for Trumbull County,
    No. 2010-T-0079, 
    196 Ohio App. 3d 271
    , 2011-Ohio-4699.
    __________________
    MCGEE BROWN, J.
    {¶ 1} In this case, we are called upon to determine the extent to which
    the Interstate Commerce Commission Termination Act (“ICCTA”), 49 U.S.C.
    10101 et seq., preempts a state’s eminent-domain action over a parcel of property
    owned by a railway company. Based on our interpretation of the legislation at
    issue and its application to the unique facts of this case, we find no preemption,
    and we therefore reverse the judgment of the court of appeals.
    Factual and Procedural Background
    {¶ 2} Since 1997, Youngstown Belt Railway Company (“Youngstown
    Railway”) has been the owner of a 55-acre parcel of land, called Mosier Yard.
    Youngstown Railway operates an active track that runs along the outside of the
    eastern border of Mosier Yard. The remainder of the parcel is vacant, though
    Youngstown Railway uses three to four acres for temporary staging and storage
    approximately once or twice per year.
    {¶ 3} In July 2004, Youngstown Railway entered into an initial purchase
    agreement with Total Waste Logistics of Girard, L.L.C., for the purchase of
    SUPREME COURT OF OHIO
    Mosier Yard in fee simple at the rate of $5,000 per acre. In April 2005, the
    parties entered into a more comprehensive purchase agreement for the purchase of
    Mosier Yard for a total of $275,000. The sale was contingent upon Total Waste
    Logistics’ attainment of appropriate permits to use the property as a construction-
    and-demolition-debris landfill. The purchase agreements make no mention of any
    future intent by Total Waste Logistics to grant easements to Youngstown Railway
    or any future intent to enter into a debris-hauling-service agreement with
    Youngstown Railway. The sale to Total Waste was never consummated.
    {¶ 4} In April 2006, the city of Girard passed a resolution declaring its
    intent to appropriate a portion of Mosier Yard, covering approximately 41.5 acres.
    The 13.5 acres to be retained by Youngstown Railway included the existing track
    and right-of-way as well as additional space for the staging and storing of
    materials or for the potential future construction of an additional track. In June
    2006, the city passed an additional resolution, declaring the value of the property
    to be $41,500. After the city and Youngstown Railway were unable to reach any
    agreement, the city commenced an appropriation action at the Trumbull County
    Court of Common Pleas in November 2006.
    {¶ 5} Youngstown Railway filed a motion for summary judgment,
    asserting that the appropriation proceedings were preempted by the ICCTA and
    subject to the exclusive jurisdiction of the Surface Transportation Board (“STB”)
    because the intended appropriation would have the effect of burdening or
    interfering with railway transportation. Youngstown Railway pointed out that its
    current location for storing materials is outside the 13.5-acre area and further
    asserted that it had planned since purchasing the property in 1997 to develop the
    property for “industrial, transloading, and/or warehousing purposes to be serviced
    by rail,” as evidenced by its current purchase agreement with Total Waste
    Logistics.
    2
    January Term, 2012
    {¶ 6} The city opposed Youngstown Railway’s motion and filed its own
    motion for summary judgment, arguing that the appropriation would have no
    effect on Youngstown Railway’s operation of its railway. The city pointed out
    that the appropriated 41.5 acres did not contain any existing or abandoned rail
    lines or approach the right-of-way of any neighboring rail lines and that
    Youngstown Railway’s chief engineering officer agreed that the 13.5 acres to be
    retained by Youngstown Railway would accommodate its need for storage space.
    The city further asserted that Youngstown Railway’s plan to sell the entire 55-
    acre parcel in fee simple to a landfill company undermined Youngstown
    Railway’s stance that the land would be used for railway transportation.
    {¶ 7} Youngstown Railway’s response to the city’s motion pointed to the
    affidavit of Youngstown Railway’s president, in which he averred that in addition
    to the parties’ written contract, Youngstown Railway and Total Waste Logistics
    “entered a verbal agreement regarding future business relations” between the two
    companies. The president as well as the director of operations for Total Waste
    Logistics averred that once Total Waste Logistics obtained the necessary permits
    to create the landfill, Total Waste Logistics planned to grant easements to
    Youngstown Railway so that Youngstown Railway could transport landfill debris
    into the landfill by rail.
    {¶ 8} In its May 2010 judgment entry, the trial court held that the city’s
    appropriations proceedings were preempted by the ICCTA. However, the court
    ordered the parties to apply to the STB “for a determination as to whether it
    chooses to exercise its right of preemption” under the ICCTA and held that it was
    temporarily retaining jurisdiction pending the STB’s response. The Eleventh
    District Court of Appeals held that the trial court’s order was not appealable and
    remanded the matter for a definitive ruling on whether preemption applied.
    {¶ 9} Upon remand, the trial court held that when a railway company
    uses land on an annual basis for storing and staging materials, an appropriation
    3
    SUPREME COURT OF OHIO
    action for that land would be preempted by the ICCTA both expressly, under a
    per se analysis, and impliedly, under an as-applied analysis. The trial court held
    that it would be inappropriate to consider Youngstown Railway’s potential sale to
    Total Waste Logistics or any other “futuristic intention,” but determined that
    Youngstown Railway’s use of a portion of the appropriated land for storage
    caused the city’s action to be preempted by the ICCTA. The trial court therefore
    committed jurisdiction to the STB.
    {¶ 10} A majority of the panel from the Eleventh District affirmed the
    trial court’s decision, though not without rejecting a large portion of the trial
    court’s underlying reasoning. Girard v. Youngstown Belt Ry. Co., 196 Ohio
    App.3d 271, 2011-Ohio-4699, 
    963 N.E.2d 193
    . Contrary to the trial court’s
    conclusion, the Eleventh District held that the city’s appropriation action was not
    expressly preempted by the ICCTA, because its “remote” and “incidental” effect
    “would not function to regulate railroad transportation.” 
    Id. at ¶
    41. Under the
    as-applied analysis, the Eleventh District held that Youngstown Railway’s use of
    a small portion of the appropriated land for storage was not enough, by itself, to
    trigger implied preemption. The appellate court further held that it was not
    inappropriate to consider Youngstown Railway’s future plans within the federal-
    preemption analysis. The Eleventh District then determined that Youngstown
    Railway’s role in its future plans with Total Waste Logistics fell within the
    definition of railway transportation and held that the city’s appropriation action
    was impliedly preempted by the ICCTA because it would unreasonably interfere
    with that railway transportation. Alternatively, the Eleventh District held that the
    city’s appropriation action would be preempted even if Youngstown Railway’s
    plans with Total Waste Logistics were not realized, because the appropriation
    action would interfere with Youngstown Railway’s unspecified future plans to
    expand railway operations. The Eleventh District further held that Youngstown
    Railway’s unspecified plans could have an effect on interstate commerce, that
    4
    January Term, 2012
    future plans related to the “economic realm” of a railway fall within the purview
    of the ICCTA, 
    id. at ¶
    54, and that the city’s prevention of the development of
    such plans would have a negative economic impact on the railway, requiring
    preemption.
    {¶ 11} A dissenting judge would have found that federal preemption did
    not apply to the city’s action because Youngstown Railway would have been able
    to continue its present railway operations and store its materials on the 13.5 acres
    that it would retain after the appropriation, because Youngstown Railway did not
    meet its burden of proving that the appropriation would interfere with future
    operations, and because Youngstown Railway’s hypothetical services to Total
    Waste Logistics do not fall within the definition of railway transportation.
    {¶ 12} We accepted discretionary jurisdiction to hear the city’s appeal,
    
    131 Ohio St. 3d 1437
    , 2012-Ohio-331, 
    960 N.E.2d 986
    , which addresses two main
    issues: first, the extent to which a state court of common pleas may exercise
    jurisdiction to determine whether ICCTA preemption applies, and second,
    whether preemption under the ICCTA applies to the particular appropriation
    action in this case.
    Analysis
    Federal Preemption of State Law
    {¶ 13} The doctrine of federal preemption originates from the Supremacy
    Clause of the United States Constitution, which provides that “the Laws of the
    United States * * * shall be the supreme Law of the Land; and the Judges in every
    State shall be bound thereby, anything in the Constitution or Laws of any State to
    the contrary notwithstanding.” U.S. Constitution, Article VI, cl. 2. Pursuant to
    the Supremacy Clause, the United States Congress has the power to preempt state
    laws. In re Miamisburg Train Derailment Litigation, 
    68 Ohio St. 3d 255
    , 259, 
    626 N.E.2d 85
    (1994).
    5
    SUPREME COURT OF OHIO
    {¶ 14} Preemption may be either expressed or implied. Gade v. Natl.
    Solid Wastes Mgt. Assn., 
    505 U.S. 88
    , 98, 
    112 S. Ct. 2374
    , 
    120 L. Ed. 2d 73
    (1992).
    Express preemption occurs when Congress explicitly defines “the extent to which
    its enactments pre-empt state law.” English v. Gen. Elec. Co., 
    496 U.S. 72
    , 78,
    
    110 S. Ct. 2270
    , 
    110 L. Ed. 2d 65
    (1990). Implied preemption of state law may
    occur when Congress has created a “ ‘scheme of federal regulation * * * so
    pervasive as to make reasonable the inference that Congress left no room for the
    States to supplement it,’ or where an Act of Congress ‘touch[es] a field in which
    the federal interest is so dominant that the federal system will be assumed to
    preclude enforcement of state laws on the same subject.’ ” 
    Id. at 79,
    quoting Rice
    v. Santa Fe Elevator Corp., 
    331 U.S. 218
    , 230, 
    67 S. Ct. 1146
    , 
    91 L. Ed. 1447
    (1947).
    {¶ 15} Preemption is fundamentally a question of congressional intent.
    Cipollone v. Liggett Group, Inc., 
    505 U.S. 504
    , 516, 
    112 S. Ct. 2608
    , 
    120 L. Ed. 2d 407
    (1992). However, in all preemption cases, we start with the presumption that
    the states’ historic police powers shall not be superseded by federal law unless
    that is shown to be the clear and manifest purpose of Congress. Rice at 230. See
    also Medtronic, Inc. v. Lohr, 
    518 U.S. 470
    , 485, 
    116 S. Ct. 2240
    , 
    135 L. Ed. 2d 700
    (1996) (“because the States are independent sovereigns in our federal system, we
    have long presumed that Congress does not cavalierly pre-empt state-law causes
    of action”). The party seeking to overcome the presumption against preemption
    bears a heavy burden. De Buono v. NYSA-ILA Med. & Clinical Servs. Fund, 
    520 U.S. 806
    , 814, 
    117 S. Ct. 1747
    , 
    138 L. Ed. 2d 21
    (1997). Further, the scope of
    preemption, if any, is to be determined while keeping this presumption in mind.
    Medtronic at 485. Accordingly, “[t]he applicable preemption provision must be
    read narrowly ‘in light of the presumption against pre-emption of state police
    power regulations.’ ” In re Miamisburg at 264, quoting Cipollone at 518.
    6
    January Term, 2012
    State Court Jurisdiction to Determine Preemption
    {¶ 16} As an initial matter, we note that the Trumbull County Court of
    Common Pleas correctly exercised jurisdiction to entertain the city’s action and to
    consider the merits of Youngstown Railway’s preemption claim under the
    ICCTA. In the absence of a patent and unambiguous lack of jurisdiction, a court
    of general subject-matter jurisdiction has the ability to determine the bounds of its
    own jurisdiction. State ex rel. Enyart v. O’Neill, 
    71 Ohio St. 3d 655
    , 
    646 N.E.2d 1110
    (1995). In determining the scope of its jurisdiction under a federal statute, a
    state court of general subject-matter jurisdiction possesses a “ ‘deeply rooted
    presumption in favor of concurrent’ ” state and federal jurisdiction. Mims v.
    Arrow Fin. Servs., L.L.C., ___ U.S. ___, ___, 
    132 S. Ct. 740
    , 748, 
    181 L. Ed. 2d 881
    (2012), quoting Tafflin v. Levitt, 
    493 U.S. 455
    , 459, 
    110 S. Ct. 792
    , 
    107 L. Ed. 2d 887
    (1990); see also Herbst v. Resolution Trust Corp., 
    66 Ohio St. 3d 8
    ,
    10, 
    607 N.E.2d 440
    (1993). The presumption of concurrent jurisdiction can be
    overcome only if (1) the federal statute expressly vests jurisdiction exclusively in
    the federal courts, (2) the legislative history unmistakably implies that jurisdiction
    was to be vested exclusively in the federal courts, or (3) state jurisdiction is
    clearly incompatible with concurrent federal jurisdiction. Elek v. Huntington
    Natl. Bank, 
    60 Ohio St. 3d 135
    , 138, 
    573 N.E.2d 1056
    (1991), quoting Gulf
    Offshore Co. v. Mobil Oil Corp., 
    453 U.S. 473
    , 478, 
    101 S. Ct. 2870
    , 
    69 L. Ed. 2d 784
    (1981).
    {¶ 17} State courts across the nation regularly evaluate preemption under
    the ICCTA. See, e.g., Wolf v. Cent. Oregon & Pacific RR., Inc., 230 Or.App. 269,
    
    216 P.3d 316
    (2009) (the ICCTA did not preempt state jurisdiction over grade
    crossings); Seattle v. Burlington N. RR. Co., 145 Wash.2d 661, 669, 
    41 P.3d 1169
    (2002) (the ICCTA preempted regulations regarding signaling at railroad
    crossings); In re Vermont Ry., 
    171 Vt. 496
    , 503, 
    769 A.2d 648
    (2000) (the ICCTA
    did not preempt a city’s zoning conditions for a railway’s salt-shed facility).
    7
    SUPREME COURT OF OHIO
    Because the ICCTA does not explicitly deny concurrent jurisdiction to state
    courts and state courts routinely adjudicate matters regarding the ICCTA, the
    Trumbull County Court of Common Pleas did not exceed its authority in
    evaluating whether the ICCTA preempted the city of Girard’s ability to institute
    eminent-domain proceedings against Youngstown Railway. Consequently, this
    court possesses the authority to review the decisions of the trial and appellate
    courts and offer final judgment.
    Application of the ICCTA
    {¶ 18} The federal law at issue in this case is the ICCTA, which abolished
    the Interstate Commerce Commission, created the STB, and granted the STB
    exclusive jurisdiction over certain aspects of interstate rail activity. 49 U.S.C.
    10101 et seq. The ICCTA was enacted to encourage competitive rates for rail
    transportation, to minimize regulatory control, and to promote efficiency as well
    as public health and safety. 49 U.S.C. 10101.
    {¶ 19} The ICCTA grants exclusive jurisdiction to the STB over
    (1) transportation by rail carriers, and the remedies
    provided in this part 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)(1) and (2).
    {¶ 20} The ICCTA defines “transportation” to include
    8
    January Term, 2012
    (A) a locomotive, car, vehicle, vessel, warehouse, wharf,
    pier, dock, yard, property, facility, instrumentality, or equipment of
    any kind related to the movement of passengers or property, or
    both, by rail, regardless of ownership or an agreement concerning
    use; and
    (B) services related to that movement, including receipt,
    delivery, elevation, transfer in transit, refrigeration, icing,
    ventilation, storage, handling, and interchange of passengers and
    property.
    49 U.S.C. 10102(9)(A) and (B).
    {¶ 21} The ICCTA contains an express preemption clause, which
    provides: “Except as otherwise provided in this part, the remedies provided under
    this part with respect to regulation of rail transportation are exclusive and preempt
    the remedies provided under Federal or State law.” 49 U.S.C. 10501(b).
    {¶ 22} In shorter form, the ICCTA provides the STB with exclusive
    jurisdiction over all physical instrumentalities possessed and all services provided
    by rail carriers that are related to the movement of passengers and/or property.
    This broad, sweeping language shows Congress’s intent to preempt any state
    effort to regulate rail transportation. However, although the ICCTA’s wording is
    expansive, the ICCTA’s legislative history indicates that Congress did not intend
    to preempt any and all state laws that might touch upon or indirectly affect
    railway property. Emerson v. Kansas City S. Ry. Co., 
    503 F.3d 1126
    , 1131 (10th
    Cir.2007), quoting H.R.Rep. No. 104-422, at 167 (1995), reprinted in 1995
    U.S.C.C.A.N. 850, 852 (“the exclusivity [of 49 U.S.C. 10501(b)] is limited to
    remedies with respect to rail regulation-not State and Federal law generally. * * *
    [State and federal laws] remain fully applicable unless specifically displaced,
    9
    SUPREME COURT OF OHIO
    because they do not generally collide with the scheme of economic regulation
    (and deregulation) of rail transportation”).
    {¶ 23} Further, various federal circuit courts have adopted the position
    that “Congress narrowly tailored the ICCTA pre-emption provision to displace
    only ‘regulation,’ i.e., those state laws that may reasonably be said to have the
    effect of ‘manag[ing]’ or ‘govern[ing]’ rail transportation, Black’s Law
    Dictionary 1286 (6th Ed.1990), while permitting the continued application of laws
    having a more remote or incidental effect on rail transportation.” Florida E.
    Coast Ry. Co. v. W. Palm Beach, 
    266 F.3d 1324
    , 1331 (11th Cir.2001). See also
    Franks Invest. Co., L.L.C. v. Union Pacific RR. Co., 
    593 F.3d 404
    , 410 (5th
    Cir.2010); PCS Phosphate Co., Inc. v. Norfolk S. Corp., 
    559 F.3d 212
    , 218 (4th
    Cir.2009); Adrian & Blissfield RR. Co. v. Blissfield, 
    550 F.3d 533
    , 539 (6th
    Cir.2008); New York Susquehanna & W. Ry. Corp. v. Jackson, 
    500 F.3d 238
    , 252
    (3d Cir.2007). We therefore adopt this interpretation of the ICCTA.
    Categorical Preemption
    {¶ 24} The preemption analysis regularly employed by the STB
    distinguishes between express and implied preemption by classifying actions as
    “per se preempted,” or “categorically preempted,” versus “preempted as applied.”
    Adrian & Blissfield R. 
    Co., 550 F.3d at 539-540
    . Turning first to the issue of
    categorical preemption, the Eleventh District Court of Appeals held, and we
    agree, that the city’s eminent-domain action against a portion of Mosier Yard is
    not categorically preempted by the ICCTA.
    {¶ 25} The STB has recognized that categorical preemption applies to two
    main categories of state or local actions:
    The first is any form of state or local permitting or
    preclearance that, by its nature, could be used to deny a railroad the
    10
    January Term, 2012
    ability to conduct some part of its operations or to proceed with
    activities that the Board has authorized. * * *
    Second, there can be no state or local regulation of matters
    directly regulated by the Board–such as the construction,
    operation, and abandonment of rail lines (see 49 U.S.C. 10901-
    10907); railroad mergers, line acquisitions, and other forms of
    consolidation (see 49 U.S.C. 11321-11328); and railroad rates and
    service (see 49 U.S.C. 10501(b), 10701-10747, 11101-11124).
    CSX Transp., Inc.—Petition for Declaratory Order, STB Finance Docket No.
    34662, 
    2005 WL 1024490
    , at *2 (May 3, 2005).
    {¶ 26} Clear-cut examples of categorically preempted state actions
    include state and local permitting laws and zoning regulations. See Auburn v.
    United States Govt., 
    154 F.3d 1025
    (9th Cir.1998) (attempt to impose local
    environmental-permitting laws on improvements and repairs to a rail line that had
    been approved by the STB); Norfolk S. Ry. Co. v. Austell, N.D.Ga. No.
    CIVA1:97-CV-1018-RLV, 
    1997 WL 1113647
    (Aug. 18, 1997) (attempt to
    impose land-use-permitting requirement pursuant to local zoning ordinance).
    Courts also generally recognize that eminent-domain actions that seek to take
    property containing active rail lines are categorically preempted by the ICCTA.
    See Union Pacific RR. Co. v. Chicago Transit Auth., N.D.Ill. No. 07-cv-229, 
    2009 WL 448897
    , at *6-7 (Feb. 23, 2009) (a city’s attempted condemnation of a 95-
    foot, 2.8-mile strip of rail line’s right-of-way, including multiple active tracks,
    was categorically preempted by the ICCTA); Wisconsin Cent. Ltd. v. Marshfield,
    
    160 F. Supp. 2d 1009
    (W.D.Wis.2000) (holding that the city’s attempted
    condemnation of a portion of a railroad’s track was categorically preempted by
    the ICCTA).
    11
    SUPREME COURT OF OHIO
    {¶ 27} However, neither the federal circuit courts nor the STB has held
    that there is any “blanket rule that any condemnation action against railroad
    property is impermissible.”        Lincoln Lumber Co.—Petition for Declaratory
    Order, STB Finance Docket No. 34915, 
    2007 WL 2299735
    (Aug. 10, 2007).
    Instead, because eminent-domain actions are specific to the unique parcel of land
    the state seeks to control, they cannot necessarily be categorized as laws or
    regulations of general applicability that seek to manage or govern rail
    transportation in general. Union Pacific RR. Co. v. Chicago Transit Auth., 
    647 F.3d 675
    , 679 (7th Cir.2011). Because eminent-domain actions are unique, and
    because this case does not involve more extreme circumstances such as an
    attempted taking of an active rail line, we hold that the categorical-preemption
    analysis is inapplicable here.
    As-Applied Preemption
    {¶ 28} When a proposed state action against a rail carrier is not
    categorically preempted pursuant to the foregoing analysis, courts have generally
    applied the STB’s standards to determine if the action is preempted as applied.
    See Franks Invest. Co., 
    L.L.C., 593 F.3d at 413-414
    ; PCS Phosphate Co., 
    Inc., 559 F.3d at 220-221
    ; Adrian & Blissfield RR. 
    Co., 550 F.3d at 540-541
    ; Emerson
    v. Kansas City S. Ry. Co., 
    503 F.3d 1126
    , 1133 (10th Cir.2007). The STB has
    articulated the standard for as-applied ICCTA preemption as follows: “For state
    or local actions that are not facially preempted, the section 10501(b) preemption
    analysis requires a factual assessment of whether [the] action would have the
    effect of preventing or unreasonably interfering with railroad transportation.”
    CSX Transp., Inc., 
    2005 WL 1024490
    , at *3. Thus we are required to conduct a
    fact-specific inquiry to determine whether the city’s action is preempted by the
    ICCTA in this case. Because it is Youngstown Railway who is seeking ICCTA
    preemption, and because of our general presumption against preemption,
    12
    January Term, 2012
    Youngstown Railway bears the burden of persuasion here. See Elam v. Kansas
    City S. Ry. Co., 
    635 F.3d 796
    , 802 (5th Cir.2011).
    {¶ 29} Our analysis at this point risks becoming tenuous, because the
    parties have presented us not with the mere present reality of Youngstown
    Railway’s operations at Mosier Yard, but with multiple hypothetical future
    scenarios.   Under normal circumstances, we decline to address hypothetical
    questions. In re Application of Columbus S. Power Co., 
    128 Ohio St. 3d 512
    ,
    2011-Ohio-1788, 
    947 N.E.2d 655
    , ¶ 48; Fortner v. Thomas, 
    22 Ohio St. 2d 13
    , 14,
    
    257 N.E.2d 371
    (1970). However, some courts have found it appropriate to
    examine a railway company’s future intentions when determining whether a state
    action will unreasonably interfere with railway transportation. See Lincoln v.
    Surface Transp. Bd., 
    414 F.3d 858
    , 862 (8th Cir.2005); Union Pacific RR. 
    Co., 647 F.3d at 681
    ; Reading Blue Mountain & N. RR. Co. v. UGI Util., Inc.,
    M.D.Penn. No. 3:11-CV-2182, 
    2012 WL 251960
    (Jan. 25, 2012). We therefore
    find it appropriate to entertain Youngstown Railway’s hypothetical scenarios only
    in the specific context of our as-applied ICCTA preemption.
    Present Use of Property Does Not Call for Preemption
    {¶ 30} Starting with the present status of Mosier Yard, we hold that there
    is no preemption under the ICCTA. It is undisputed that the portion of Mosier
    Yard sought to be appropriated by the city contains no active or abandoned tracks,
    contains no portion of rights-of-way of any rail lines, contains no permanent
    structures, and is undeveloped as a whole.       These facts make Youngstown
    Railway’s situation completely distinguishable from many cases finding
    preemption as applied under the ICCTA.         See, e.g., Lincoln, 
    414 F.3d 858
    (preemption based on interference with right-of-way); Soo Line RR. Co. v. St.
    Paul, 
    827 F. Supp. 2d 1017
    (D.C.Minn.2010) (preemption based on interference
    with right-of-way); Wisconsin Cent. Ltd. v. Marshfield, 
    160 F. Supp. 2d 1009
    (W.D.Wisc.2000) (preemption based on attempted taking of rail line); Union
    13
    SUPREME COURT OF OHIO
    Pacific RR. Co., N.D.Ill. No. 07-cv-229, 
    2009 WL 448897
    (preemption based on
    interference with right-of-way).
    {¶ 31} The sole factor that could potentially support a finding of
    unreasonable interference with railway transportation is the fact that Youngstown
    Railway uses “three to four random acres” of Mosier Yard annually for staging
    and storing materials.    Girard, 
    196 Ohio App. 3d 271
    , 2011-Ohio-4699, 
    963 N.E.2d 193
    , at ¶ 15. However, Youngstown Railway’s agents have admitted that
    their need for the staging and storage of materials is not married to one specific
    area of Mosier Yard and that the remaining land after the taking would
    accommodate the storage of materials.        Compare 
    Lincoln, 414 F.3d at 861
    (storage and loading area, located in right-of-way, could not be accommodated
    elsewhere).   There is no permanent structure or any other impediment that
    prevents Youngstown Railway from storing materials in one area versus another
    on the property; the only requirement is a general need for three to four acres near
    the rail line, which Youngstown Railway would still have after the taking.
    Accordingly, under the present scenario, Youngstown Railway has not established
    that the proposed taking would interfere with railway transportation, and
    preemption under the ICCTA would not be called for.
    Future Operations by Total Waste Logistics Do Not Constitute
    Transportation by a Railway Carrier
    {¶ 32} As for Youngstown Railway’s proposed future scenario of selling
    Mosier Yard to Total Waste Logistics, we hold that there is also no preemption
    under the ICCTA. Based on the plain and straightforward language of the written
    contract between Total Waste Logistics and Youngstown Railway, Total Waste
    Logistics will become the owner in fee simple of the entirety of Mosier Yard,
    including the area sought to be appropriated by the city. Despite this finalized
    written instrument, agents of both Total Waste Logistics and Youngstown
    Railway averred that the parties entered into contemporaneous oral agreements
    14
    January Term, 2012
    that Total Waste Logistics would grant easements and enter into service contracts
    with Youngstown Railway in order to transport waste into Total Waste Logistics
    landfill. Even if we were to give credence to this parol evidence, the future
    activities that would take place on Total Waste Logistics property would not
    constitute railway transportation.
    {¶ 33} It is true that the loading and unloading of transported materials,
    including waste materials, may fit within the broader definition of
    “transportation” as defined by the ICCTA.        49 U.S.C. 10102(9).      However,
    satisfaction of the term “transportation” does not end the analysis. In order for
    transportation to constitute railway transportation under the ICCTA, the activity
    must be “ ‘performed by, or under the auspices of, a “rail carrier.” ’ ” New York
    & Atlantic Ry. Co. v. Surface Transp. Bd., 
    635 F.3d 66
    , 71-72 (2d Cir.2011),
    quoting Babylon—Petition for Declaratory Order, STB Finance Docket No.
    35057, 
    2008 WL 4377804
    (Sept. 24, 2008). A “rail carrier” is defined as an
    entity “providing common carrier railroad transportation for compensation.” 49
    U.S.C. 10102(5). “The fundamental test of common carriage is whether there is a
    public profession or holding out to serve the public.” New England Transrail,
    L.L.C.—Construction, Acquisition, and Operation Exemption, STB Finance
    Docket No. 34797, 
    2007 WL 1989841
    , *6 (June 29, 2007).
    {¶ 34} When the loading, unloading, or transloading of materials is
    performed by a rail carrier, on property owned by the rail carrier, through services
    rendered as a common carrier to the public, such activity has been found to fall
    under the purview of the ICCTA. See, e.g., New England Transrail at *8-10
    (transloading and storage of various commodities and waste materials, but not
    processing of waste, would constitute rail transportation if the owner and operator
    of the facility were authorized as a rail carrier); Green Mountain RR. Corp. v.
    Vermont, 
    404 F.3d 638
    , 644 (2d Cir.2005) (transloading and temporary storage of
    commodities by a rail carrier constituted rail transportation and was governed by
    15
    SUPREME COURT OF OHIO
    the ICCTA); Norfolk S. Ry. Co., 
    1997 WL 1113647
    , at *6 (operation of
    intermodal facility by rail carrier constituted rail transportation and was governed
    by the ICCTA).
    {¶ 35} However, when a transloading, shipping, or receiving facility is
    operated by an entity that is not a rail carrier, the facility’s activities are not
    considered to fall under the ICCTA, regardless of whether railway transportation
    is used up to the point that the materials arrive or depart from the facility. See,
    e.g., Babylon, 
    2008 WL 4377804
    (transloading of construction and demolition
    debris by non-rail-carrier tenant of railway property did not constitute rail
    transportation and was not governed by the ICCTA); New York & Atlantic Ry.
    
    Co., 635 F.3d at 73
    (waste-transfer facility, operated by a nonrail carrier that was
    not acting as an agent for any rail carrier, did not constitute rail transportation and
    was not governed by the ICCTA); Florida E. Coast Ry. 
    Co., 266 F.3d at 1332
    -
    1336 (construction-aggregate distribution center, operated by a non-rail-carrier
    lessee of railway property, did not constitute rail transportation and was not
    governed by the ICCTA); Milford, Mass.—Petition for Declaratory Order, STB
    Finance Docket No. 34444, 
    2004 WL 1802301
    (Aug. 11, 2004) (despite
    contractual agreement with a rail carrier, the transloading of steel by a nonrail
    carrier in a manner that was not being offered as part of common-carrier services
    for the public did not constitute rail transportation and was not governed by the
    ICCTA); Hi Tech Trans, L.L.C. v. New Jersey, 
    382 F.3d 295
    , 308-309 (3d
    Cir.2004) (bulk-waste transloading facility, operated by a nonrail carrier on rail
    carrier’s property, did not constitute rail transportation and was not governed by
    the ICCTA). The proposed ownership and operation of Mosier Yard by Total
    Waste Logistics would fall squarely within this latter category.
    {¶ 36} The Hi Tech decision in particular informs our decision today. In
    that case, a nonrail carrier, Hi Tech, and a rail carrier, Canadian Pacific Railroad,
    contracted for Hi Tech to build and operate a solid-waste facility on the railroad’s
    16
    January Term, 2012
    property. 
    Id. at 298-299.
    Construction and demolition waste was to be delivered
    to Hi Tech’s facility by truck, and after processing the waste at Hi Tech’s facility,
    the waste was loaded into rail cars to be transported out of the property by
    Canadian Pacific Railroad. 
    Id. The Third
    Circuit determined that Hi Tech’s
    facility
    does not involve “transportation by rail carrier.”     The most it
    involves is transportation “to rail carrier.” * * * The mere fact
    that the [Canadian Pacific Railroad] ultimately uses rail cars to
    transport the [construction and demolition] debris Hi Tech loads
    does not morph Hi Tech’s activities into “transportation by rail
    carrier.” Indeed, if Hi Tech’s reasoning is accepted, any nonrail
    carrier’s operations would come under the exclusive jurisdiction of
    the STB if, at some point in a chain of distribution, it handles
    products that are eventually shipped by rail by a railcarrier [sic].
    The district court could not accept the argument that Congress
    intended the exclusive jurisdiction of the STB to sweep that
    broadly, and neither can we.
    (Emphasis sic.) 
    Id. at 308-309.
               {¶ 37} The facts here are strikingly similar to those in Hi Tech, with a few
    exceptions: Youngstown Railway will be delivering rather than receiving
    construction and demolition debris, and Total Waste Logistics will have
    ownership and control of both the waste facility and the property as a whole.
    Thus, unlike in Hi Tech, what we have here is “transportation from rail carrier”
    rather than “transportation by rail carrier.” We cannot conclude that the activities
    on Mosier Yard would constitute railway transportation from the mere fact that
    17
    SUPREME COURT OF OHIO
    waste materials are delivered into the property through the use of railway
    transportation.
    {¶ 38} Accordingly, under this primary hypothetical scenario, the
    activities in Mosier Yard would not constitute rail transportation. The city’s
    eminent-domain action would therefore not be preempted by the ICCTA under
    the as-applied analysis.
    Future Unspecified Use Is Too Vague to Be Considered
    {¶ 39} Under Youngstown Railway’s secondary hypothetical scenario, we
    also hold that there is no preemption under the ICCTA. Youngstown Railway
    claims that it wants to use Mosier Yard in the future for expansion and
    development in order to accommodate the growing interstate railway business in
    the area. However, Youngstown Railway has no concrete plans to put these
    hypothetical plans into execution and in fact is selling the property to Mosier
    Yard. Without anything more specific, Youngstown Railway’s evidence of a
    general desire for future development is not enough to establish that the property
    will be used for railway transportation.
    {¶ 40} While it is acceptable and sometimes necessary to consider a
    railway company’s future plans when determining if the ICCTA applies to an
    eminent-domain action, it is also necessary to consider whether it is likely that the
    railway company’s plans “will come to fruition.” 
    Lincoln, 414 F.3d at 862
    .
    Keeping in mind that Youngstown Railway bears the burden of demonstrating
    that the city’s action is preempted by the ICCTA, mere “conclusory allegations
    are not sufficient to support removal.” Bayou DeChene Reservoir Comm. v.
    Union Pacific RR. Corp., W.D.La. No. 09-0429, 
    2009 WL 1604658
    , at *3-4 (June
    8, 2009); see also Texas Cent. Business Lines Corp. v. Midlothian, 
    669 F.3d 525
    ,
    535 (5th Cir.2012) (“The mere prospect that there will be less space going
    forward, on this extensive tract, without definite plans to develop, and without an
    18
    January Term, 2012
    explanation of how future projects would be affected does not amount to an
    unreasonable burden [on rail transportation]”).
    {¶ 41} It is true that in some cases it has been appropriate to look to a
    railway company’s future intentions, even without concrete plans, in order to
    determine whether a taking would eventually unreasonably interfere with railway
    transportation. Lincoln at 862; Norfolk S. Ry.—Petition for Declaratory Order,
    STB Finance Docket No. 35196, 
    2010 WL 691256
    (Feb. 26, 2010). However,
    those cases are distinguishable from the one at hand because they involved
    already existing tracks or rights-of-way. Both Lincoln and Norfolk S. stand for
    the principle that a locality cannot justify an eminent-domain action over a rail
    line or right-of-way merely because the line is not currently being used. This
    principle does not extend to an undeveloped parcel of land containing no rail line
    and no right-of-way.
    {¶ 42} Here, Youngstown Railway is not being asked to justify the
    continued existence of an already developed rail line. Instead, the property sought
    to be acquired is vacant land, with which Youngstown Railway has done nothing
    in terms of development from its purchase of the land in 1997 up to the present
    day. It is far from evident that Youngstown Railway’s alleged intentions for the
    future will ever actually be executed. We are therefore not confronted with a
    situation in which the city’s eminent-domain action could forever close off the use
    of a previously constructed rail line.
    {¶ 43} Youngstown Railway’s alternative future plans are too vague and
    speculative to allow us to conclude that the city’s eminent-domain action would
    unreasonably interfere with railway transportation. Consequently, Youngstown
    Railway has failed to establish that the city’s eminent-domain action would be
    preempted by the ICCTA.
    19
    SUPREME COURT OF OHIO
    Conclusion
    {¶ 44} We hold that the Trumbull County Court of Common Pleas had
    jurisdiction to determine the question of ICCTA preemption.             Applying the
    generally accepted fact-intensive test for as-applied preemption under the ICCTA,
    we hold that the city’s proposed eminent-domain action against an undeveloped
    portion of Youngstown Railway’s property, which does not contain any tracks or
    rights-of-way and does not have any concrete projected use that would constitute
    rail transportation by a rail carrier, is not preempted under the ICCTA.
    {¶ 45} For these reasons, we reverse the appellate court’s decision finding
    preemption by the ICCTA and committing the matter to the STB, and we remand
    the case to the trial court for further proceedings consistent with this opinion.
    Judgment reversed
    and cause remanded.
    O’CONNOR, C.J., and PFEIFER, LUNDBERG STRATTON, O’DONNELL,
    LANZINGER, and CUPP, JJ., concur.
    __________________
    Frank R. Bodor; and Brian C. Kren, Girard City Law Director, for
    appellant.
    Manchester, Bennett, Powers & Ullman, L.P.A., C. Scott Lanz, and
    Thomas J. Lipka, for appellee Youngstown Belt Railway Company.
    Michael DeWine, Attorney General, Alexandra T. Schimmer, Solicitor
    General, and Michael L. Stokes, Assistant Attorney General, for amicus curiae,
    state of Ohio.
    ______________________
    20
    

Document Info

Docket Number: 2011-1850

Judges: Brown, O'Connor, Pfeifer, Stratton, O'Donnell, Lanzinger, Cupp

Filed Date: 11/21/2012

Precedential Status: Precedential

Modified Date: 10/19/2024

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