Federal preemption in railroad-crossing litigation revisited.

A few years ago, using the federal preemption defense in railroad-crossing cases was a relatively new technique.(1) For the last several years, railroads and their attorneys have been expanding this defense to counter claims of negligence regarding grade-crossing warning devices, train speed, and locomotive safety equipment. Their defense is, simply, their compliance with federal regulations.

Meanwhile, attorneys for victims of crossing collisions have been striving to convince district and circuit courts to hold railroads accountable for failure to fulfill their common law duty of reasonable care - a failure that has resulted in an ever-increasing number of railroad-related deaths and injuries each year.

Recently, the U.S. Supreme Court spoke on the issue of federal preemption in CSX Transportation, Inc. v. Easterwood,(2) a case in which ATLA field an amicus brief in support of the plaintiff. While the Court's resolution is not entirely favorable to plaintiffs, our reading of the decision identifies several options still available to hold railroad companies responsible for their actions.

Federal Preemption Generally

The concept of federal preemption, while relatively new as a railroad defense, finds its origins in the Supremacy Clause of Article VI of the U.S. Constitution. That clause provides that federal law, namely, the Constitution and all acts of Congress passed pursuant to it, shall be "the Supreme Law of the Land."

In practice, this clause has been interpreted to imply the supremacy of federal law over state law in three particular situations:

* when Congress expressly preempts state law by the very terms of a federal statute;

* when the federal law conflicts with the state law and preempts it to that extent; and

* when Congress implicitly preempts state law by passing legislation that occupies or subsumes the entire field, leaving no room for supplemental state action. In addition, preemption may occur if Congress, through its failure to act on a specific issue, may be deemed to have prohibited any state regulation of the same issue.

Although the preemption argument has been successful in some arenas to defend certain claims, its constitutional origins by no means guarantee its success. Courts at every level note the strong presumption against preemption and emphasize their reluctance to restrict the police power of the states.(3) Generally, without a clear conflict between state and federal law, and in the absence of express preemption, courts will find preemption only if it is the clear intent of Congress in the language of the federal statute or agency regulation.(4)

Congressional intent to preempt state law should not be inferred if the relevant legislation includes an express preemption clause, which signifies that "Congress has considered the issue of preemption and has included in the enacted legislation a provision explicitly addressing that issue."(5)

The presumption "is even stronger against preemption of state remedies, like tort recoveries, when no federal remedies exist."(6) However, preemption, if found, may apply to state statutes and regulations as well as to common law and judge-made rules.(7)

Federal Legislation

Several federal laws affect railroad safety. Specifically, the Federal Railroad Safety Act (FRSA)(8) and regulations enacted under its authority have played a significant role in most preemption defenses. Section 421 identifies the purpose of the FRSA as the promotion of railroad "safety in all areas of railroad operations,"(9) while [sections] 434 speaks directly to the issue of preemption. In this section, "Congress declares that laws, rules, regulations, orders, and standards relating to railroad safety shall be nationally uniform to the extent practicable."(10) States can "adopt or continue in force any law, rule, regulation, order, or standard relating railroad safety until such time as the Secretary has adopted a rule, regulation, order, or standard covering the [same] subject matter. . . . "(11) Clearly, this sentence does not represent express preemption. It merely reiterates the generally accepted principle that a state law is preempted by a federal law that covers the same area.

Section 434 expressly allows states to adopt or continue in force an additional or more stringent law, rule, regulation, order, or standard relating to railroad safety when necessary to eliminate or reduce an essentially local safety hazard. . . ."(12) Thus, states may regulate railroads even when federal legislation would otherwise be considered preemptive, as long as the state regulations are not incompatible with any federal law and do not create an undue burden on interstate commerce."(13)

Plaintiffs should be aware that [sections] 434 represents Congress's attempt to address the preemption issue directly. When confronted with this explicit preemption clause, courts "must fairly but-in light of the strong presumption against preemption-narrowly construe [its] precise language. . . ."(14)

Because the negligence alleged in most railroad cases involves either excessive train speed or inadequate warning devices at grade crossings, railroads normally claim that the federal regulations addressing those two areas preempt state law.

It is therefore necessary to understand the federal regulations most often cited by railroads: Federal Highway Administration (FHWA) regulations concerning grade-crossing warning devices(15) and Federal Railroad Administration regulations concerning locomotive speed.(16) In light of these and [sections] 434 of the FRSA, the issues facing most courts in railroad negligence actions are as follows:

1. Docs the legislation involved cover the same area as the negligence claim?

2. If so, is there evidence of any "essentially local safety hazard" to counter a preemption defense?

Easterwood Decision

Last year, the U.S. Supreme Court tackled the issue of federal preemption head-on in Easterwood. The facts were predictably similar to those of other railroad-crossing cases. A motorist was struck and killed by a train at a grade crossing. His widow sued the railroad, alleging, among other things, inadequate warning devices and excessive speed.

The railroad countered with an equally predictable defense: preemption. The district court granted summary judgment for the railroad on both claims.(17) The court of appeals, however, found no preemption of the claim of inadequate warning devices but affirmed the judgment as to excessive speed.(18)

The Supreme Court agreed to hear the case, primarily "[b]ecause Courts of Appeals have differed over the preemptive effect of FRSA on negligence suits against railroads...."(19) Its decision, therefore, presumably was intended to resolve the confusion. Unfortunately, confusion continues.

The Supreme Court's decision ostensibly addressed only, the issue of whether the FRSA preempted negligence claims, but the opinion effectively resolved other points of controversy. However, the opinion also created new areas of dispute and left much room for the continued pursuit of negligence claims.

First, the Court decided what degree of similarity between federal and state rules constitutes "coverage" as required by [sections] 434 of the FRSA. Second, the Court decided whether preemption affects only statutory and regulatory enactments. Third, the Court considered the preemptive effect of the FHWA Manual on Uniform Traffic Control Devices for Streets and Highways (MUTCD).

What constitutes "coverage." For preemption to lie under 45 U.S.C. [sections] 434, there must be a federal rule, regulation, standard, or order "covering the subject matter of [the] State requirement." Clearly, then, "covering" must be defined. The Court required that "[t]o prevail on the claim that the regulations have preemptive effect, petitioner must establish more than that they |touch upon' or |relate to' that subject matter."20 In fact, the Court asserted that it will find preemption "only if the federal regulations substantially subsume the subject matter of the relevant state law."(21)

What may be preempted. In the past, arguments have been made that even if state regulations and statutes are found to be preempted, recovery under traditional common law negligence principles remains an option. Although the Court in Easterwood declined to find preemption of all negligence claims, it emphasized that where the regulations cover the same subject matter as [state] negligence law," tort recovery may be precluded.(22) The Court cited [sections] 434 on preemption of any "law, rule, regulation, order, or standard" and concluded that "[l]egal duties imposed on railroads by the common law fall within the scope of these broad phrases."(23)

This is not to say, however, that Easterwood stands for the premise that common law duties are generally preempted. Rather, the Court simply clarified that when preemption is found, its effect will not necessarily be limited to statutory rules and regulatory schemes.

What the effect of the MUTCD is. Because the railroad in the Easterwood case contended that the MUTCD standards had preemptive effect, the Court examined the language of the federal regulation requiring conformity with those very standards.(24) The Court disposed of this argument swiftly, distinguishing between installation standards and installation requirements, finding that the MUTCD provides a description of, rather than a prescription for, the allocation of responsibility for grade crossing safety between the Federal and State Governments and between States and railroads...."(25)

Finally, the Court looked at the language of the MUTCD itself and pointed out that "the Manual disavows any claim to cover the subject matter of that body of law."(26) This segment of the Easterwood decision is important because the MUTCD and its state-created counterparts are often cited by railroads as sources of preemption.

Lower courts have generally followed the Supreme Court's direction and refused to entertain this type of defense, concluding that a provision in a traffic manual requiring state approval of grade crossing systems

merely recognizes that different governmental bodies may have jurisdictional responsibility for a particular grade crossing ... and ... does not propose to exclude any other entity, including a railroad company, from selecting a particular traffic control device at a particular grade crossing, albeit with approval.(27)

The manuals, therefore, "do not evidence an intent to displace established negligence law."(28)

Essential Holdings

The crux of the Easterwood decision was its discussion of preemption with respect to excessive speed and inadequate warning devices at grade crossings.

Speed. On speed, the Court held that the relevant federal regulation, 49 C.F.R. [sections] 213.9(a), did preempt the particular claim in Easterwood, but only insofar as it represented a general allegation of negligently excessive speed. The regulation sets maximum allowable operating speeds for trains based on the class of track they use.

The Court rejected the plaintiff's claim that the speed was negligently excessive even though within federal speed limits. The Court held that the federal speed regulation "should be understood as covering the subject matter of [common law] train speed. . . ."(29) This holding is quite narrow, however, and lower courts interpreting Easterwood have recognized that the federal speed regulations preempt only general, common law excessive speed allegations.

As discussed above, [sections] 434 of the FRSA specifically allows states to impose stricter regulations on railroads to climinate local safety hazards. In light of this, the Easterwood Court explicitly stated that the preemption found in that case "does not bar suit for breach of related tort law duties, such as the duty to slow or stop a train to avoid a specific, individual hazard."(30) Railroads stil have a common law duty to require trains to slow down at hazardous crossings, particularly if the engineer knows of unique hazards or specific dangers and if he can take steps to prevent the hazard from leading to tragedy.(31)

Another source of a railroad's duty with regard to speed may be either a local ordinance or a railroad-made rule. The Easterwood Court addressed only the preemptive effect of federal regulations on general common law negligence. Nowhere did the Court hold that a municipality, for instance, would be preempted from passing and enforcing a local ordinance setting maximum speeds at particularly dangerous crossings; however, the plaintiff would have to show that the reduced speed was "necessary to eliminate or reduce an essentially local safety hazard."(32)

Nor are railroads themselves prohibited from setting their own speed limits, based on their knowledge of specific, local safety hazards. Either a local speed ordinance or a railroad-made speed limit, then, may require trains to slow down at a particular crossing.

Moreover, [sections] 434 of the FRSA specifically allows stricter regulations to eliminate or reduce local safety hazards. If a municipality or a railroad recognizes a unique local hazard and sets a lower speed limit at a crossing, a railroad's violation would clearly subject it to potential liability for negligence. A claim under state tort law is not necessarily preempted, even after Easterwood.

Again, lower courts have recognized that Easterwood did not address or decide this issue.(33) The only limitation set by [sections] 434 is that the stricter regulation must not be incompatible with any federal law and may not impose any undue burden on interstate commerce.

Grade-crossing warning devices. Like the speed regulations, the warning-device regulations were also found to have only limited preemptive effect. They relate to the warning devices at grade crossings and the conditions that necessitate their installation. 23 C.F.R. [sections] 646.214(b)(3) requires automatic gates with flashing lights when any one of a number of conditions exists at a crossing(34) or when gates are recommended by a diagnostic team. Active warning devices must be present at railroad crossings where these conditions exist unless a diagnostic team justifies their absence.(35)

If none of the conditions listed exists and a diagnostic team has not recommended placing the devices, then passive warning devices like signs may be installed, subject to FHWA approval.(36) In any case, all warning devices are subject to FHWA approval. These regulations apply, of course, only if federal funds support installing the devices or if the crossing is located within the limits of a federal highway project.(37)

The Easterwood Court examined these regulations and held that "when they are applicable, state tort law is preempted."(38) The ramifications of this holding are not as grim as they initially appear because a rigorous factual analysis must be made before these regulations can be said to be "applicable."

In determining whether preemption had occurred, the Court focused on the fact that the circuitry installed did not qualify as "warning devices" by the terms of the regulation and that "no other devices were installed."(39) Further, the plan ... was shelved and the funds allocated for use in another project."(40) Based on the incomplete installation and the diversion of federal funds, the Court concluded that the preconditions of the regulation did not apply and did not preempt state law.

The holding on this issue is fairly simple: Only when the installation of warning devices has been completed, approved by FHWA, and paid for by federal-aid funds, pursuant to 23 C.F.R. [sections] 646.214, will that regulation have preemptive force. Therefore, plaintiffs must carefully scrutinize every aspect of the warning devices at the railroad crossing in question.

First, does the crossing have any conditions listed in the regulation? If so, automatic gates and flashing lights are required. If the conditions exist but the gates and fights are absent, railroads bear the burden of proving that a diagnostic team justified their absence, the FHWA approved the existing warning devices, and they were paid for with federal funds. If any one of these conditions is not met, then the state common law is not preempted.

Second, plaintiffs should examine the installation procedure itself. When did the installation occur? Did a diagnostic team evaluate the crossing? Was FHWA approval obtained? Were federal funds actually used, or were they merely ear-marked in anticipation of the project? Was the installation completed or merely planned? And, finally, when was the installation completed? If it was completed before the FRSA existed, for example, federal funds would not have been used. In this case, the preconditions of [sections] 646.214 were clearly not met, and there will be no federal preemption.

Third, plaintiffs should examine the devices at a crossing. Do they satisfy the requirements of the regulations, or do they represent merely an upgrade to minimum standards of safety? If they are "adequate" under the terms of the regulation, were they functioning properly when the accident occurred? Were multiple parallel sets of fights and gates present at multiple-approach crossings as required by the MUTCD?

Applying Easterwood

Lower courts have followed this rigorous analysis in applying Easterwood to varying fact patterns.41 Preemption lies only in a very few situations, that is, where all preconditions of the regulation have been met, all appropriate procedures have been followed, and the installation has been completed according to the regulation.

Courts are taking a factually intensive approach in interpreting Easterwood. The important point is that only when all preconditions of 23 C.F.R. [sections] 646.214(3) and (4) are met will preemption bar a plaintiffs recovery in a grade-crossing warning-device claim.

Notes

(1) Dale Haralson & Adam Levine, Grade Crossings and Train Speed: Preemption, TRIAL, Feb. 1991, at 18. (2) 113 S. Ct. 1732 (1993). (3) Jones v. Rath Packing Co., 430 U.S. 519 (1977); Penn Dairies v. Milk Control Comm'n, 318 U.S. 261 (1943). (4) California Fed. Sav. & Loan Ass'n v. Guerra, 479 U.S. 272, 280 (1987); Hillsborough Country v. Automated Medical Labs. 471 U.S. 707, 713 (1985); Rice v. Santa Fe Corp., 331 U.S. 218, 230 (1947). (5) Cipollonc v. Liggett Groups, Inc., 112 S. Ct. 2608, 2618 (1992). (6) Abbot v. American Cyanamid Co., 844 F.2d 1108, 1112 (4th Cir.), cert denied, 488 U.S. 908 (1988). (7) Easterwood, 113 S. Ct. 1732, 1737-38. (8) 45 U.S.C. [subsection] 421-44 (1988). (9) Id. at [sections] 421. (10) Id. at [sections] 434. (11) Id. (12) Id. (13) Id. (14) Cipollone, 112 S. Ct. 2608, 2621. (15) 23 C.F.R. [sections] 646.114 (1992). (16) 49 C.F.R. [sections] 213.157 and app. A (1991). (17) Easterwood v. CSX Transp., Inc., 742 E Supp. 676 (N.D. Ga 1990). (18) Easterwood v. CSX Transp., Inc., 933 E2d 1548 (11th Cir. 1991), aff'd, 113 S. Ct. 1732 (1993). (19) 113 S. Ct. 1732, 1736. (20) 113 S. Ct. 1732, 1738. (21) Id. (22) Id. (23) Id. at 1737. (24) 23 C.F.R. [subsection] 646.214(B)(1), 655.603 (1992). (25) 113 S. Ct. 1732, 1740. (26) Id. (27) Martin v. Consol. Rail Corp., 620 N.E.2d 720, 726 (Ind. Ct. App. 1993). (28) Id. (29) 113 S. Ct. 1732, 1743. (30) Id. at n.15. (31) See Missouri Pac. R.R. Co. v. Lemon, 861 S.W.2d 501, 510 (Texas Ct. App. 1993). (32) 45 U.S.C. [sections] 434. (33) Martin, 620 N.E.2d 720, 724 n.7. (34) Conditions include multiple tracks, high-speed train operation combined with limited sight distance, high speed combined with high volume, of traffic, or any combination of high-volume vehicle traffic, numerous train movements, school buses or trucks carrying hazardous materials, unusually restricted sight distance, and continuing accident occurrences. 23 C.F.R. [sections] 646.214(b)(3)(i)(A)-(E) (1992). (35) Eldridge v. Missouri Pac. R.R., 832 F. Supp. 328, 333 (E.D. Okla. 1993). (36) 2 C.F.R. [sections] 646.214(b)(3),(4) (1992). (37) 23 C.F.R. [sections] 646.214(b)(2),(3)(i). (38) 113 S. Ct. 1732, 1740-41. (39) Id. at 1741. (40) Id. (41) See Eldridge, 832 F. Supp. 328, 333; Shots v. CSX Transp., No. TH 91-125-C (S.D. Ind. 1993).

Railroad Law Section;

On the Right Track

ATLA's Railroad Law Section, with approximately 400 members, aims to provide its membership with information on legal remedies and legislation regarding railroad law.

An annual directory lists members by state - including their names, addresses, telephone and fax numbers, and practice specialties.

Members may also be interested in The Exchange Brief Bank, which offers briefs, depositions, complaint, jury instructions, and memoranda on issues including railroad law. Those who submit a brief to the Brief Bank will receive a $45 discount on their order. For information on defective design or failure of railroad crossing signals, the Federal Employers' Liability Act (FELA), preemption, and other topics, section members should contact The Exchange at [phone].

The section is planning a full-day educational program on July 25 at the Annual Convention in Chicago. Proposed topics include railroad grade crossing cases, injured railroaders and the Americans with Disabilities Act, federal regulations and FELA, and railroad retirement benefits.