The Chlorine Institute, Inc. v. Soo Line Railroad

United States Court of Appeals
For the Eighth Circuit
___________________________
No. 14-2346
___________________________
The Chlorine Institute, Inc.; The American Chemistry Council; The Fertilizer
Institute; Erco Worldwide; PVS Chemicals
lllllllllllllllllllll Plaintiffs - Appellants
v.
Soo Line Railroad, doing business as Canadian Pacific Railway Company
lllllllllllllllllllll Defendant - Appellee
____________
Appeal from United States District Court
for the District of Minnesota - Minneapolis
____________
Submitted: February 12, 2015
Filed: July 2, 2015
____________
Before BYE, BEAM, and BENTON, Circuit Judges.
____________
BYE, Circuit Judge.
The Chlorine Institute, Inc., the American Chemistry Council, the Fertilizer
Institute, Erco Worldwide, and PVS Chemicals (collectively "Appellants") filed this
suit seeking to enjoin Soo Line Railroad, d/b/a Canadian Pacific Railway Company
("CP") from imposing a requirement that any toxic inhalation hazard ("TIH")1
materials transported on CP's railways be transported in normalized steel rail cars.2
Under the doctrine of primary jurisdiction, the district court3 held the Surface
Transportation Board ("STB") should address whether CP's requirement is reasonable
in the first instance, denied the request for injunctive relief, and dismissed the suit
without prejudice. We affirm.
I
In 2009, the Pipeline and Hazardous Materials Safety Administration
("PHMSA") of the Department of Transportation ("DOT")—the agency tasked with
regulating the transportation of hazardous materials—finalized extensive amendments
to the regulations for the transportation of TIH materials. See Hazardous Materials:
Improving the Safety of Railroad Tank Car Transportation of Hazardous Materials,
74 Fed. Reg. 1770 (Jan. 13, 2009) (codified in 49 C.F.R. pts. 171-174 & 179). The
regulations included substantial background information regarding the safety issues
concerning the transportation of hazardous materials and prior train derailments
leading to tragic harms.
The amendments explained there was a "need to enhance the crashworthiness
protection of railroad tank cars" because "although rail transportation of hazardous
materials is a safe method for moving large quantities of hazardous materials over
1
In the industry, "poison inhalation hazard" and "toxic inhalation hazard" are
interchangeable terms.
2
Normalization produces steel with more ductile properties at lower
temperatures. As such, non-normalized steel train cars are more prone to brittle
fractures than normalized steel cars at the same temperature.
3
The Honorable Patrick J. Schiltz, United States District Judge for the District
of Minnesota.
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long distances, rail tank cars used to contain these materials have not been designed
to withstand the force of high-speed derailments and collisions." Id. The
amendments specifically noted several high-profile train derailments involving TIH
materials, including the CP derailment in Minot, North Dakota, in 2002,4 and
explained that the failure of the tank cars in a derailment often leads "to fatalities,
injuries, evacuations, and property and environmental damage." Id. at 1771. As a
result of these incidents and concerns, the PHMSA initiated a strategy to improve the
safety of transporting hazardous materials via rail tank cars by addressing "(1) [t]ank
car design and manufacturing; (2) railroad operational issues such as human factors,
track conditions and maintenance, wayside hazardous detectors, signals and train
control systems; and (3) improved planning and training for emergency response."
Id. In the proposed regulations, the agency proposed improving "tank-head and shell
puncture-resistance standards" in the following way:
The enhanced standards proposed to require tank cars that transport PIH
materials in the United States to be designed and manufactured with a
shell puncture-resistance system capable of withstanding impact at 25
mph and with a tank-head puncture resistance system capable of
withstanding impact at 30 mph. To ensure timely replacement of the
PIH tank car fleet, we proposed an eight-year implementation schedule,
contemplating design, development, and manufacturing ramp-up in the
first two years, replacement of 50% of the fleet within the next three
years, and replacement of the remaining 50% of the fleet in the
following three years. As part of this implementation plan, we proposed
the expedited replacement of tank cars used for the transportation of PIH
materials manufactured before 1989 with non-normalized steel head or
shell construction.
Id. at 1772-73.
4
As explained in the amendments, the 2002 derailment in Minot, North Dakota,
involved a CP train and resulted "in the catastrophic release of anhydrous ammonia,
leading to one death and 11 serious injuries." 74 Fed. Reg. at 1772.
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Commentators to the proposed regulations, however, expressed numerous
concerns including the feasibility of the existing technology to accomplish the
resistance goals and the proposed eight-year implementation period as
"overly-aggressive and not realistic." Id. at 1773-76. Furthermore, as particularly
relevant to this case, "[w]ith regard to the proposed rule's requirement that all PIH
tank cars constructed of non-normalized steel in the head or shell be replaced within
five years . . . , several commentators note[d] the PIH shipping industry's voluntary
efforts already underway to phase out these tank cars." Id. at 1777. Based on these
concerns, the agency explained it was not going to force the retirement of such cars:
We also are modifying our proposal for phasing out cars constructed
prior to 1989 with non-normalized steel in the head or shell. Although
we continue to believe that an accelerated phase out of these cars is
justified, we recognize the voluntary efforts already underway by many
fleet owners to phase out these cars, in many cases on schedules more
aggressive than the five-year deadline proposed in the NPRM. Rather
than imposing a fixed deadline, this rule requires rail car owners that
elect to retire or remove rail tank cars from PIH service, other than
because of damage to the cars, to prioritize the retirement or removal of
pre-1989 non-normalized steel cars.
Id. at 1777-78. In other words, the rule "does not implement the proposed expedited
replacement requirement for PIH tank cars" but instead "requires that tank car owners
prioritize retirement or replacement of pre-1989 non-normalized steel cars when
retiring or removing cars from PIH materials service." Id. at 1785 (emphasis added).
However, the PHMSA recognized, in passing the regulations, that "the standards set
forth . . . shall apply . . . pending the development and commercialization of more
stringent performance standards." Id. at 1771 (emphasis added).
On April 14, 2014, CP put into effect its Item 55 of Tariff 8 which requires TIH
materials transported on CP's railways to be shipped in normalized steel tank cars.
The change was intended to increase safety and reduce the likelihood of a TIH
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materials spill in the event of a derailment. An executive from CP provided an
affidavit explaining the potential drastic consequences of a TIH spill and CP's
business reasons for pursuing a safer method of transport. The affidavit cites the
derailment in Minot and explains that it was one of the driving forces behind the
change.
After receiving notice about CP's intended requirement, Appellants filed this
suit and brought claims against CP under the Hazardous Materials Transportation Act
("HMTA"), 49 U.S.C. §§ 5101-5128, and under 49 U.S.C. § 11101, which codifies
the common-carrier obligations for rail carriers. The next day, Appellants filed a
motion for declaratory and injunctive relief. On May 27, 2014, after a hearing on the
merits of the motion, the district court issued its order holding, under the doctrine of
primary jurisdiction, the STB should address the raised issue in the first instance,
dismissing the suit without prejudice, and denying the request for injunctive relief
after balancing the relevant factors.
II
On appeal, Appellants argue (1) there was no reason to defer to the expertise
of the STB under the doctrine of primary jurisdiction because the question of whether
CP has impermissibly expanded on the regulations promulgated by the DOT is a legal
question; (2) even if the district court properly applied the doctrine of primary
jurisdiction, it should have stayed the action rather than dismiss it; and (3) the district
court erred in denying the preliminary injunction, even if the matter is referred to the
STB. We address each issue in turn.
A
Before addressing the application of the doctrine of primary jurisdiction, we
must first consider our standard for reviewing a district court order applying the
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doctrine. There appears to be disagreement between our sister courts on whether such
review is de novo or for an abuse of discretion, with the majority applying a
deferential standard. Compare Endo Pharm. Inc. v. Actavis Inc., 592 F. App'x 131,
133 (3d Cir. 2014); Envtl. Tech. Council v. Sierra Club, 98 F.3d 774, 789 (4th Cir.
1996); Wagner & Brown v. ANR Pipeline Co., 837 F.2d 199, 201 (5th Cir. 1988);
Reid v. Johnson & Johnson, 780 F.3d 952, 958 (9th Cir. 2015); S. Utah Wilderness
Alliance v. Bureau of Land Mgmt., 425 F.3d 735, 750 (10th Cir. 2005); Boyes v.
Shell Oil Prods. Co., 199 F.3d 1260, 1266 n.13 (11th Cir. 2000); Nat'l Tel. Coop.
Ass'n v. Exxon Mobil Corp., 244 F.3d 153, 156 (D.C. Cir. 2001), with Ellis v.
Tribune Television Co., 443 F.3d 71, 83 n.14 (2d Cir. 2006); see also Consol. Rail
Corp. v. Grand Trunk W. R.R Co., No. 13-2269, 2015 WL 1727306, at *5 (6th Cir.
Apr. 15, 2015).
On two prior occasions we avoided deciding the issue. See Access Telecomms.
v. S.W. Bell Tel. Co., 137 F.3d 605, 608 (8th Cir. 1998) ("Without deciding the
standard-of-review question, . . . we accept the parties' invitation to review the
primary jurisdiction issue de novo."); DeBruce Grain, Inc. v. Union Pac. R.R. Co.,
149 F.3d 787, 790 n.4 (8th Cir. 1998) ("This court has not definitively stated the
standard of review for the application of the doctrine of primary jurisdiction. Since
the district court can be affirmed under de novo review, it is not necessary to consider
the possible application of the clearly erroneous standard." (internal citation
omitted)). In a subsequent decision, we stated "[t]his court appears to review primary
jurisdiction de novo" but gave no analysis and made no express holding on the proper
standard for review. United States v. Henderson, 416 F.3d 686, 691 (8th Cir. 2005)
(emphasis added). In a more recent decision, we reviewed the issue of primary
jurisdiction de novo but once again provided no analysis on the issue and made no
reference to the disagreement among our sister courts. See United States v. Rice, 605
F.3d 473, 475 (8th Cir. 2010). Because the district court in Rice never had the
opportunity to address the question of primary jurisdiction, and we found the doctrine
to be inapplicable to that specific criminal case, we did not address the government's
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argument that the issue should be reviewed for plain error. Appellants argue that
Rice resolved the issue and controls here. We do not believe the Court in Rice
intended to resolve a two-decade old circuit split without any analysis or without
addressing this Court's prior hesitation to do so on two occasions. We think the better
reading of the statement in Rice is that the Court simply reviewed the issue in that
specific case de novo (it could not have done otherwise). Since we believe the district
court in this case reached the correct conclusion even under a de novo review, we
need not now decide the standard of review issue.
The doctrine of primary jurisdiction applies to claims "properly cognizable in
court that contain some issue within the special competence of an administrative
agency." Reiter v. Cooper, 507 U.S. 258, 268 (1993). "Under the doctrine of primary
jurisdiction a court may leave an issue for agency determination when it involves the
special expertise of the agency and would impact the uniformity of the regulated
field." DeBruce Grain, 149 F.3d at 789. "No fixed formula exists for applying the
doctrine of primary jurisdiction. In every case the question is whether the reasons for
the existence of the doctrine are present and whether the purposes it serves will be
aided by its application in the particular litigation." United States v. W. Pac. R.R.
Co., 352 U.S. 59, 64 (1956).5
Appellants argue CP cannot, as a matter of law, override the requirements set
forth by the PHMSA, which is a question of law that does not raise any issue within
the STB's special expertise. They believe "[t]he DOT has exclusive jurisdiction
regarding the specifications of the design, materials and construction of rail tank cars
used to transport all hazardous materials in commerce." As such, "no circumstances
exist that would allow the STB to overrule the DOT's edict that TIH materials can be
5
Neither party disputes both the district court and the STB have jurisdiction to
address Appellants' § 11101 claim. See Pejepscot Indus. Park, Inc. v. Me. Cent. R.R.
Co., 215 F.3d 195, 197 (1st Cir. 2000).
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transported in non-normalized steel rail cars safely and securely." According to
Appellants, "[t]o permit otherwise would allow the STB to collaterally attack the
DOT's exclusive jurisdiction and subject the DOT regulations to an STB veto power."
The district court correctly found Appellants' arguments lacking.
Generally, a railway carrier is required to provide transport upon a reasonable
request. See 49 U.S.C. § 11101(a) ("A rail carrier providing transportation or service
subject to the jurisdiction of the Board under this part shall provide the transportation
or service on reasonable request."). As such, a railway carrier cannot outright refuse
to transport TIH materials. See Riffin v. Surface Transp. Bd., 733 F.3d 340, 346-48
(D.C. Cir. 2013); see also Radioactive Materials, M.-Kansas-Texas R.R. Co., 357
I.C.C. 458, 464 (1977) ("Moreover, a carrier may not assert before this Commission
that, as a general proposition, shipments meeting DOT and NRC requirements are too
hazardous to transport. Such an assertion would amount to a collateral attack on the
regulations of DOT and NRC. Any attacks on the regulations of DOT or NRC should
be brought before those agencies." (citation omitted)). The question presented in this
case, however, is not whether a carrier may refuse to transport TIH materials outright,
but whether it may require criteria beyond those stated in the DOT regulations.
Although we have not had occasion to address this issue, two of our sister
courts have concluded that the Interstate Commerce Commission ("ICC")—the
predecessor agency to the STB6—has authority to review the imposition of
requirements by carriers and railroads beyond those promulgated by the DOT in its
regulations. In Consolidated Rail Corp. v. Interstate Commerce Commission, 646
F.2d 642, 652 (D.C. Cir. 1981), the court held the ICC had the authority and
jurisdiction to review the railroads' imposition of additional rates for the
6
"In 1995, Congress enacted the ICC Termination Act (ICCTA), which
abolished the 108-year-old Interstate Commerce Commission and substantially
deregulated the rail and motor carrier industries." Pejepscot Indus., 215 F.3d at 197.
"In the ICC's place, the ICCTA established the [STB] within the [DOT]." Id.
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transportation of radioactive materials. In that case, the railroads sought to impose
additional tariffs premised on the use of "special train service" ("STS") for the
transportation of the dangerous materials. Id. at 644-45. The ICC held the tariffs
were "unreasonably high" because the railroads failed to show the use of special
trains was reasonable: "based on the evidence at hand, the special train requirement
is wasteful transportation and an unreasonable practice in violation of Section
10701(a) of the act." Id. at 645. In affirming the ICC, the court considered and
addressed the varying arguments regarding the scope of the railroad, the ICC, and the
DOT's authority and jurisdiction to impose regulations and requirements for the
transportation of such materials. The railroads argued the ICC "lack[ed] authority to
second-guess the railroads' 'rational judgment' on an 'operational' issue such as the
need for STS." Id. at 646. The shippers argued the DOT had exclusive jurisdiction
over the issue. Id. The ICC argued it "properly considered all available safety
evidence to determine whether tariffs covering the cost of STS were reasonable." Id.
The court explained that the ICC should "defer[] to the expertise and primary
jurisdiction of the [Nuclear Regulatory Commission (NRC)] and DOT both in
determining which particular measures are reasonably required to produce the
necessary level of safety, and in deciding whether any particular safety measure will
likely produce benefits commensurate with its cost . . ." but nevertheless held the
"railroads may indeed seek to prove the reasonableness of additional safety
measures." Id. at 650 (emphasis added). The court found the "safety regulations
promulgated by DOT and NRC are entitled to be considered by the ICC as
embodying prima facie the appropriate balance between safety and nuclear
development," but did not exclude the possibility the railroads could satisfy their
burden of showing the additional requirements were reasonable. Id. at 651.
The Sixth Circuit reached a similar conclusion: a carrier "cannot refuse to haul
any materials which meet (DOT and NRC) standards, but it may seek approval of a
stricter practice which is shown to be just and reasonable." Akron, Canton &
Youngstown R.R. Co. v. Interstate Commerce Comm'n, 611 F.2d 1162, 1169 (6th Cir.
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1979) (emphasis added). "[W]hile DOT and NRC have exclusive authority to
promulgate Industry-wide standards for the carriage of radioactive materials, the ICC
may allow Individual carriers to make more (but not less) stringent rules for their own
carriage of hazardous materials." Id. at 1170. The STB has also suggested carriers
may impose additional requirements. See, e.g., Union Pac. R.R. Co.–Petition for
Declaratory Order, STB Fin. Docket No. 35219, 2009 WL 1630587, at *2 (S.T.B.
June 11, 2009) ("[C]arriers are not precluded from seeking imposition of stricter
safety standards . . . .").
Appellants have not cited us to any authority supporting their position and fail
to meaningfully distinguish the prior case law. Their reliance on Louisville &
Nashville Railroad Co. v. F.W. Cook Brewing Co., 223 U.S. 70 (1912) is entirely
misplaced. In Louisville, the Supreme Court held the question of whether a railroad
could refuse to transport intoxicating liquors, which were prohibited by state law, did
not need to be presented to the ICC because there were no questions of fact to decide.
Id. at 84. However, the Court was merely analyzing the legal question of whether a
railroad could outright refuse (not reasonably limit) its transportation obligations
pursuant to federal law based on a state law. Id. at 82. Furthermore, the Court
specifically distinguished the case from one that would involve "the reasonableness
of a rate[, which] . . . is primarily [a question] of administrative character, and the
propriety of a prior resort to the Commission to obtain a ruling upon the question of
reasonableness." Id. at 84. Here, we do not deal with an outright refusal to transport
or with issues of competing state and federal regulations. While we recognize
Appellants' argument that the STB's decision on this issue may have an impact on
uniformity between railway carriers, the concern is better raised to the STB.
Accordingly, we find the STB has the authority and jurisdiction to consider whether
a carrier may impose a reasonable requirement beyond the minimum regulations set
by the PHMSA.
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Since we find CP's restrictions are not barred as a matter of law, we consider
whether the question of reasonableness of the restrictions should be addressed by the
district court or the STB. We believe the STB is better positioned to address the
issue.
Determining whether any given transportation request is "reasonable" is no
easy task. "Congress did not further elucidate the requisites of the common carrier
obligations, leaving to the Commission and the courts the task of clarifying, on a
case-by-case basis, a more precise definition of 'reasonable request' . . . ." Nat'l Grain
& Feed Ass'n v. United States, 5 F.3d 306, 310 (8th Cir. 1993). Determining whether
a request is reasonable is a complex, fact-intensive inquiry that requires knowledge
and consideration of the industry at issue. The task is usually best left to the
STB—the agency most experienced in evaluating the particular circumstances of each
case. See Granite State Concrete Co. v. Surface Transp. Bd., 417 F.3d 85, 92 (1st Cir.
2005) ("The STB has been given broad discretion to conduct case-by-case fact-
specific inquiries to give meaning to these terms, which are not self-defining, in the
wide variety of factual circumstances encountered."). And in other cases where the
central issue was reasonableness, this Court and others have applied the doctrine of
primary jurisdiction to defer claims to the STB. See, e.g., DeBruce Grain, 149 F.3d
at 789-90 ("The question of the reasonableness of a railroad's response to a shortage
of cars [was] . . . one best left for agency resolution due to the need for specialized
expertise and uniform national treatment."); Pejepscot Indus., 215 F.3d at 205
(holding referral to the STB under the doctrine of primary jurisdiction was
appropriate for a claim that the defendants unlawfully refused to provide service on
reasonable request).
The decisions discussed above not only demonstrate that the STB can consider
requirements beyond the DOT regulations but also that the STB will usually be best
equipped to determine if such additional requirements are "reasonable." Like the
ICC, "promoting safe rail transportation is one of the [STB's] statutory
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responsibilities." Consol. Rail Corp., 646 F.2d at 648. No one would dispute that
"[t]he railroads have a responsibility to protect their employees, their property and the
public from harmful radiation" or other potentially toxic materials. Id. (quoting the
ICC). It is the PHMSA's responsibility to balance the safety and economic concerns
in the railroad industry and promulgate applicable regulations. When it comes to
determining if any requirements beyond those regulations are reasonable, the STB,
with its expertise in the industry, is better equipped than federal courts to address
fact-intensive questions of whether a particular safety requirement beyond the
regulations is consistent with the regulations and national policy.
Determining the issue in this case will likely involve consideration of the
benefits offered by the requirement, the impact it will have on the industry, and the
technical comparison between normalized and non-normalized steel cars. Given the
complex economic and technical concerns raised by the entities objecting to the
requirement of normalized steel cars in the consideration of the regulations, referral
of this issue to the STB is appropriate. See id. at 650 ("The ICC therefore properly
defers to the expertise and primary jurisdiction of the NRC and DOT both in
determining which particular measures are reasonably required to produce the
necessary level of safety, and in deciding whether any particular safety measure will
likely produce benefits commensurate with its cost and will be economical."
(emphasis added) (footnote omitted)); Akron, 611 F.2d at 1170 ("[T]he ICC may
allow Individual carriers to make more (but not less) stringent rules for their own
carriage of hazardous materials." (emphasis added)).7 Additionally, unlike the district
7
Appellants filed an unopposed motion to supplement the record before this
Court with the petition (a matter of public record) by the Association of American
Railroads to the PHMSA to mandate the phase out of non-normalized steel train cars
for transporting TIH materials by no later than December 31, 2016. Appellants'
motion is granted. We have considered the petition, which asserts that transporting
TIH materials in non-normalized steel cars "poses an unnecessary risk to the general
public" and that many shippers have already voluntarily retired such cars. Its detailed
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court, the STB can solicit comments from all interested parties and the DOT to
address the issue from a more uniform perspective rather than merely the dispute
between the parties in this case. Moreover, a resolution by the STB would promote
uniformity in the question of "reasonableness" rather than the potential of separate
district courts reaching inconsistent resolutions in each individual case.
As in DeBruce Grain, "[a]ssessing the reasonableness . . . [of the requirements]
in this case . . . would involve issues related to national rail policy, and a judicial
ruling could affect rail transportation throughout the country." 149 F.3d at 789. The
analysis will require "'an informed evaluation of the economics [and] technology of
the regulated industry,' which supports the invocation of primary jurisdiction." Id.
(quoting Nader v. Allegheny Airlines, Inc., 426 U.S. 290, 305 (1976)). Therefore, we
find the district court correctly applied the doctrine of primary jurisdiction and
appropriately referred the issue to the STB.
B
Once a district court decides to refer an issue or claim to an administrative
agency under the doctrine of primary jurisdiction, it may either dismiss or stay the
action. We review its decision on the issue for an abuse of discretion. See Reiter,
507 U.S. at 268-69 (holding district court has discretion "either to retain jurisdiction
or . . . to dismiss the case"). Appellants offer nothing beyond conclusory arguments
and fall far short of demonstrating the without-prejudice dismissal was an abuse of
discretion.
discussion of the capabilities and differences between normalized and non-
normalized steel cars further reaffirms the complexity and technical nature of the
question before the Court.
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We believe the district court properly dismissed the action without prejudice.
Staying the matter may have been appropriate if the district court was referring only
a specific factual question to the expertise of the STB that was part of a claim, which
would ultimately be decided by the district court. In this instance, the STB's
resolution of the referred issue will likely dispose of the entire case. Moreover,
Appellants offer no reason why they have suffered any prejudice based on the
dismissal. Therefore, the district court did not abuse its discretion in dismissing the
action without prejudice. See DeBruce Grain, 149 F.3d at 790 (finding "[d]ismissal
without prejudice was appropriate since it did not disadvantage DeBruce" and the
STB's decision could be appealed to this Court).
C
In considering the denial of a motion for a temporary restraining order and
preliminary injunction, we "review the district court's factual findings for clear error,
its legal conclusions de novo, and its exercise of equitable judgment for abuse of
discretion." Gen. Motors Corp. v. Harry Brown's, LLC, 563 F.3d 312, 316 (8th Cir.
2009). "An abuse of discretion occurs where the district court fails to consider an
important factor, gives significant weight to an irrelevant or improper factor, or
commits a clear error of judgment in weighing those factors." Id.
Appellants argue that even if the issue should be resolved by the STB rather
than the district court, the district court erred in not granting injunctive relief to
prohibit CP from imposing its requirement until after the STB has decided the issue.
In considering whether to issue a preliminary injunction, the district court must
consider four factors: "(1) the threat of irreparable harm to the movant; (2) the state
of the balance between this harm and the injury that granting the injunction will
inflict on other parties []; (3) the probability that [the] movant will succeed on the
merits; and (4) the public interest." Dataphase Sys., Inc. v. C L Sys., Inc., 640 F.2d
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109, 114 (8th Cir. 1981) (en banc). "The burden is on the movant to establish the
need for a preliminary injunction . . . ." DISH Network Serv. L.L.C. v. Laducer, 725
F.3d 877, 881 (8th Cir. 2013) (internal quotation marks omitted). We find no error
in the district court's denial of a preliminary injunction.
1 – Likelihood of Success
The primary argument for success advanced by Appellants is that CP cannot
impose requirements beyond the regulations promulgated by the DOT. Because we
have already rejected this argument, we consider whether Appellants are likely to
convince the STB the requirement CP seeks to impose is unreasonable.
The presumption that the DOT has appropriately balanced the safety and
economic policy reasons in promulgating adequate regulations favors Appellants.
See Consol. Rail Corp., 646 F.2d at 652 ("[T]he safety regulations promulgated by
DOT and NRC are entitled to be considered by the ICC as embodying prima facie the
appropriate balance between safety and nuclear development."). CP may rebut the
presumption, for example, by showing
DOT and NRC did not intend to establish comprehensive regulations to
assure safe transportation of radioactive materials, but rather hoped that
other agencies or private industry would substantially supplement their
regulations; or else it might be shown that the regulations were drafted
without any knowledge of the [relevant requirement]; or that the
railroads lacked any meaningful opportunity to present the [relevant
requirement] to DOT or NRC; or that some unusual or special
conditions . . . made imposition of [the relevant requirement] reasonable
in their case.
Id. at 651. Here, the change of the PHMSA's position between the proposed and
promulgated rules in 2009 suggests that the agency may have intended to apply the
regulations as the minimum for safety standards. CP argues that several indications
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support such an inference. For instance, the agency repeatedly explained in its notice
that it "continue[d] to believe that an accelerated phase out of these cars is justified,"
demonstrating it still believed there were safety reasons to require normalized steel
cars. Moreover, it specifically noted "the voluntary efforts already underway by
many fleet owners to phase out these cars, in many cases on schedules more
aggressive than the five-year deadline proposed in the NPRM" as evidence for not
mandating but merely prioritizing the retirement of such cars. Thus, CP asserts the
agency continued to believe normalized steel cars were safer but found it unnecessary
to impose stringent time lines since it appeared that the industry was voluntarily
moving in that direction. These are at least plausible reasons to rebut the prima facie
balance.
At this time, on the record before us, it is difficult to make an accurate
prediction on the likely outcome before the STB. Indeed, this is precisely why
referral to the STB was appropriate. For all of the reasons already discussed above,
this task is best determined by the STB based on its expertise. Therefore, we find this
factor does not favor either side.
2 – Threat of Irreparable Harm
"Irreparable harm occurs when a party has no adequate remedy at law, typically
because its injuries cannot be fully compensated through an award of damages." Gen.
Motors, 563 F.3d at 319. "[L]oss of consumer goodwill can be irreparable harm," id.,
however, "[e]conomic loss, on its own, is not an irreparable injury so long as the
losses can be recovered." DISH Network, 725 F.3d at 882. "[T]he absence of
irreparable injury is by itself sufficient to defeat a motion for a preliminary
injunction." Id.
Appellants argue they would suffer irreparable harm if required to ship TIH
materials in normalized steel cars because they "will be forced to forego transporting
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their product and receivers will be prevented from obtaining those products."
Condensed, their argument is that the requirement will cease the shipment of TIH
materials. But the only shipper who provided record evidence stated that only 31 of
its 100 leased cars will not meet the requirement. Thus, at least sixty-nine percent of
business for this shipper should remain unchanged. Appellants also submitted an
affidavit estimating that twenty-one percent of the chlorine train cars in North
America—responsible for twenty percent of chlorine shipments in North
America—are non-normalized steel cars. This is a far cry from their assertion that no
one will ship any products or that they will become unavailable. Additionally, CP
introduced evidence that "approximately 95% of the TIH-lading cars on CP's railroad
were constructed after 1989"—such that they would be made of normalized
steel—and that "in the last five years, the amount of TIH lading moved by rail has
decreased by 17%."
The district court found Appellants offered "remarkably little evidence" that
the requirement would make it impossible to move TIH materials through the rail.
Chlorine Inst., Inc. v. Soo Line R.R., No. 14-CV-1029 (PJS/SER), 2014 WL
2195180, at *6 (D. Minn. May 27, 2014). It noted Appellants failed to explain why
they could not obtain a sufficient supply of normalized steel cars, particularly since
these have been the standard since 1989 and should have been gradually replacing
older cars, as dictated in the 2009 regulations. Id. The court also discredited their
arguments because they failed to "give any indication that they have even attempted
to find alternative ways to meet their needs for normalized-steel cars, much less
explained their efforts and their success or lack of success." Id. In summary,
Appellants failed to introduce sufficient probative evidence that they could not
overcome any effective reduction in the eligible fleet by obtaining other tank cars that
meet the requirement or shipping the cargo through other means. Moreover, we do
not find record evidence that the shippers were at full capacity and using all of their
fleet all the time. As such, even a reduced number of cars may be able to fully
accommodate their shipping needs. Even assuming, however, that the shippers were
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using all available train cars at all times, the evidence showed the reduction would not
be particularly significant and the cargo could be moved by alternative means.
Appellants' assertion that "[a] rail car shortage . . . will inevitably result sooner
rather than later" is too speculative. See, e.g., Novus Franchising, Inc. v. Dawson,
725 F.3d 885, 895 (8th Cir. 2013) ("In order to demonstrate irreparable harm, a party
must show that the harm is certain and great and of such imminence that there is a
clear and present need for equitable relief." (internal quotation marks omitted));
S.J.W. ex rel Wilson v. Lee's Summit R-7 Sch. Dist., 696 F.3d 771, 779 (8th Cir.
2012) ("Speculative harm does not support a preliminary injunction."). Merely
demonstrating the "possibility of harm" is not enough. See Roudachevski v. All-
American Care Ctrs., Inc., 648 F.3d 701, 706 (8th Cir. 2011). Appellants also assert
that if CP is permitted to enforce this requirement, other railways may adopt it as
well; but even if true, Appellants have failed to show it would result in irreparable
harm. Finally, the district court properly recognized that any increase in costs or
reduction in business as a result of requiring normalized steel cars would simply be
compensable economic harm and does not constitute irreparable harm.
Accordingly, we find no likelihood of irreparable harm and this factor favors
the denial of an injunction.
3 – Balance of Harms and Public Interest
Appellants argue CP is unlikely to suffer any harm if the injunction is granted
because it merely returns the parties to their status quo prior to the effective date of
the Tariff. However, they ignore the prior significant and devastating train
derailments that have continued to occur in the past decade which initially prompted
the discussions of mandating, more than six years ago, what CP now seeks to require.
Requiring CP to transport TIH materials on its railways in contravention to a safety
measure it voluntarily imposed, believing it to be necessary, could result in
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devastating harm to both CP and the public should there be another derailment. CP
and the public both have interests in minimizing the risk and catastrophic effect of
any potential derailments by providing for the safest possible transport of TIH
materials. Since we do not agree with Appellants that CP's requirement would
amount to a national crisis for an adequate water supply or fertilizer for crops, any
minimum reduction in the ability to transport TIH materials by rail does not outweigh
the real concerns which prompted CP to implement the requirement.
We find these two factors also favor denying injunctive relief. Accordingly,
we hold the district court did not abuse its discretion in denying Appellants' request
for injunctive relief.
III
For the reasons above, the district court's order is affirmed in all respects.
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