Are Oregon's laws requiring state approval before railroads close their agencies preempted by federal rail deregulation?
Plain-English summary
ORS 823.073 and 823.075 required Oregon railroads to get ODOT's written approval before closing an "agency" (a staffed location serving the public with freight, billing, or passenger services). The ICC Termination Act of 1995 abolished the Interstate Commerce Commission, created a new Surface Transportation Board, and gave the new Board exclusive jurisdiction over rail regulation. ODOT's railroad services coordinator asked whether Oregon's agency-closing approval laws survived.
Attorney General Hardy Myers concluded they didn't. 49 USC § 10501(b) gave the Surface Transportation Board exclusive jurisdiction over "transportation by rail carriers," with the federal remedies "exclusive" and preempting state remedies. A federal district court in Georgia (CSX Transportation v. Georgia Public Service Commission) and the Nebraska Supreme Court (Burlington Northern v. Page Grain Co.) had read that exclusivity broadly. Even though the Act doesn't expressly regulate agency closings, the absence of a federal remedy is part of the deregulatory point. Oregon couldn't fill the gap because the Act's scope and the legislative history showed Congress meant to occupy the field of rail economic regulation completely.
Currency note
This opinion was issued in 1997. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.
Common questions
Q: What's a railroad "agency"?
A: Under ORS 823.071(1), a place provided by a for-hire carrier for receipt, delivery, billing, or routing of freight, or loading and discharge of passengers, with an agent (a staffed location). Closing one cuts service to shippers and passengers at that station.
Q: How can preemption apply if the federal law doesn't say anything about agency closings?
A: The express preemption clause in 49 USC § 10501(b) sweeps in "remedies provided under Federal or State law" with respect to rail transportation regulation. The Act's deregulatory point is that the Surface Transportation Board has exclusive jurisdiction; the absence of federal regulation on a topic doesn't mean states can regulate it.
Q: What recourse do shippers have?
A: Congress simultaneously created a Railroad-Shipper Transportation Advisory Council (49 USC § 726) to address shipper concerns within the deregulated framework. The mechanism is advisory and private-sector, not state-regulatory.
Q: Could Oregon enforce other rail-related laws?
A: Yes, but only laws of general application unrelated to rail economic regulation. The conference report (HR Conf Rep No. 422) notes that criminal statutes like antitrust laws, bribery, and extortion remain applicable; what's preempted is state economic regulation of rail.
Q: When did the change take effect, and does the agency's own view matter?
A: The ICC Termination Act took effect January 1, 1996. The opinion notes that agency deference principles (Udall v. Tallman) reinforce reading the preemption broadly in favor of the Surface Transportation Board's exclusive jurisdiction.
Background and statutory framework
The ICC Termination Act of 1995 (Public Law No. 104-88), effective January 1, 1996, eliminated the Interstate Commerce Commission and the Federal Maritime Commission, transferring residual functions to the Surface Transportation Board (49 USC § 702, § 721). The Board's jurisdiction over "transportation by rail carriers" is "exclusive" (49 USC § 10501(b)).
The Act's policy statement (49 USC § 10101) emphasizes deregulation: minimum-feasible economic regulation, competition, reduced regulatory barriers, efficient management. The Senate Committee report says the bill "would also eliminate Federal certification and review procedures for State regulation of intrastate rail transportation." Federal occupation of the field is intentional.
Two cases followed the same logic: CSX Transportation v. Georgia Public Service Commission (ND Ga 1996) held that Georgia's parallel rail agency-closing approval law was preempted. Burlington Northern Railroad Co. v. Page Grain Co. (Neb 1996) reached the same result for Nebraska. The Oregon AG follows.
Citations and references
Statutes:
- ORS 823.071, 823.073, 823.075, Oregon rail agency closing laws
- 49 USC § 10501(b), exclusive STB jurisdiction
- 49 USC § 10101, ICC Termination Act policy
- 49 USC § 10903, federal abandonment regulation
- 49 USC § 726, Railroad-Shipper Advisory Council
- Public Law No. 104-88, ICC Termination Act
Cases:
- CSX Transportation v. Georgia Public Service Commission, 944 F Supp 1573 (ND Ga 1996)
- Burlington Northern Railroad Co. v. Page Grain Co., 545 NW 2d 749 (Neb 1996)
- CSX Transp. Inc. v. Easterwood, 507 US 658 (1993), express preemption analysis
- Medtronic v. Lohr, 116 S Ct 2240 (1996), preemption methodology
- Cipollone v. Liggett Group, Inc., 505 US 504 (1992)
- English v. General Elec. Co., 496 US 72 (1990), three categories of preemption
- Teper v. Miller, 82 F3d 989 (11th Cir 1996)
- Udall v. Tallman, 380 US 1, agency deference
Source
- Landing page: https://www.doj.state.or.us/oregon-department-of-justice/office-of-the-attorney-general/attorney-general-opinions/
- Original PDF: https://www.doj.state.or.us/wp-content/uploads/1997/05/op8249.pdf
Original opinion text
May 8, 1997
No. 8249
This opinion is in response to a question from Claudia L. Howells, Railroad Services Coordinator, Oregon Department of
Transportation, concerning the state statutes regulating the abandonment of railroad agencies.
QUESTION PRESENTED
Are ORS 823.073 and 823.075,(1) which require approval from the Oregon Department of Transportation
(department) before railroads may abandon their agencies located within Oregon, preempted by the federal
ICC Termination Act of 1995 (the Act).
ANSWER GIVEN
We conclude that as applied to railroad agency closings ORS 823.073 and 823.075 are preempted by the Act and that
railroads do not need approval from the department before closing their agencies.
DISCUSSION
The preemption doctrine is rooted in the Supremacy Clause of the United States Constitution, which requires that federal
law control conflicts between state and federal law. US Const Art VI, cl 2. Teper v. Miller, 82 F3d 989, 993 (11th Cir
1996). Enforcement of any state law that conflicts with a valid federal statute is prohibited. Taylor v. General Motors
Corp., 875 F2d 816, 826 (11th Cir 1989).
The courts have recognized three categories of preemption: (1) express preemption, when Congress defines explicitly the
extent to which its enactments preempt state law; (2) field preemption, when Congress' regulation of a field is so pervasive
or the federal interest so dominant that an intent to occupy the entire field can be inferred; and (3) conflict preemption,
when state law stands as an obstacle to the accomplishment of the full purposes and objectives of a federal statute. Teper at
993, citing English v. General Elec. Co., 496 US 72, 78-79, 110 S Ct 2270, 110 L Ed2d 65 (1990). The critical question in
any preemption analysis is whether Congress intended to preempt state law. "[A]ny understanding of the scope of a
preemption statute must rest primarily on `a fair understanding of congressional purpose.'" Medtronic v. Lohr, 116 S Ct
2240, 2250, 135 L Ed2d 700 (1996), citing Cipollone v. Liggett Group, Inc., 505 US 504, 112 S Ct 2608, 120 L Ed2d 407
(1992).
The intent of Congress to preempt state law is primarily discerned from the language of the preemption statute, although
the policy behind the statute, as well as the structure and purpose of the statute as a whole, is also relevant in determining
whether Congress intended the statute to preempt state law. Medtronic at 2250-2251.
The Act went into effect January 1, 1996. Public Law No. 104-88, 109 Stat 805-852 (1995).(2) The Act eliminated the
Interstate Commerce Commission (ICC) and the Federal Maritime Commission, repealed various ICC regulatory functions
and transferred the residual functions relevant to your question to a new Intermodal Surface Transportation Board (board).
See 49 USC § 702, 721.
As to the board's jurisdiction and preemption of state law, the Act provides:
(b) The jurisdiction of the Board 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,
is exclusive. 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 USC § 10501(b) (emphasis added).
"If [a] statute contains an express preemption clause, the task of statutory construction must * * * focus on the plain
wording of the clause, which necessarily contains the best evidence of preemptive intent." CSX Transp. Inc. v.
Easterwood, 507 US 658, 664, 113 S Ct 1732, 123 L Ed2d 387 (1993). The last sentence of 49 USC § 10501(b) is such an
express preemption clause. Therefore, we first focus on the plain wording of that clause.
49 USC § 10501(b) provides that, except as otherwise provided under Part A of the Act,(3) the "remedies" under that part
"with respect to regulation of rail transportation are exclusive and preempt" remedies available under federal or state law.
The plain meaning of this provision is that the federal remedies provided under the Act are the only remedies available as
to the regulation of rail transportation and, except where the Act expressly provides otherwise, those remedies are
exclusive of any state remedies.
Although the Act regulates the abandonment of railroad lines, 49 USC § 10903, it does not expressly regulate the
abandonment of railroad agencies. Consequently, there are no "remedies" provided in the Act for unlawful abandonment
of railroad agencies. In CSX Transportation v. Georgia Public Service Commission, 944 F Supp 1573 (ND Ga 1996), the
court considered an argument by the state commission that its authority to regulate railroad agency closings in Georgia was
not preempted because 49 USC § 10501(b) preempts state remedies only when federal remedies are provided under the
Act and the Act does not provide a "remedy" for railroad agency closings. The court rejected the state's argument, holding
that the plain language of section 10501(b) expressly preempts any remedies provided under state law for railroad agency
abandonments. Id. at 1581.
We similarly conclude that Oregon may not provide remedies for unlawful abandonment of railroad agencies. The Act
specifies that its remedies not only "preempt" state remedies, but that they are also "exclusive" with respect to the
"regulation of rail transportation." The broadly inclusive phrase "regulation of rail transportation" evidences Congress'
intent to preclude state remedies for violation of any state laws or rules regulating rail transportation.(4) If the state could
provide remedies for violating state law with respect to abandonment of agencies, the remedies provided under Part A of
the Act would not be the exclusive or only remedies with respect to regulation of rail transportation. Moreover, because
state regulation with respect to the abandonment of railroad agencies is meaningless without the authority to provide
remedies for violation of the state law, we also conclude that the Act preempts ORS 823.073 and 823.075, which require
railroads to obtain written authority from the department before abandoning their agencies in Oregon.
We reach the same conclusion based on the remaining language of 49 USC § 10501(b) and the overall intent of the Act. 49
USC § 10501(b) grants exclusive jurisdiction to the board over "transportation by rail carriers" and the "abandonment or
discontinuance of * * * facilities, even if the tracks are located * * * entirely in one state." The Act defines "transportation"
as including "property, facility, instrumentality, or equipment of any kind related to the movement of passengers or
property, or both, by rail * * * and services related to that movement, including receipt, delivery * * * storage, handling,
and interchange of passengers and property." 49 USC § 10102(9). For purposes of ORS 823.073 and 823.075, "agency" is
defined as
any place provided by a for-hire carrier for the accommodation of the public in the receipt, delivery, billing
or routing of freight, or in the loading or discharge of passengers, at which an agent is provided to serve the
public.
ORS 823.071(1). An "agent" is "the person in charge of the transaction of business with the public at any station or
agency." ORS 823.071(2). Thus, railroad agencies come within the meaning of "transportation" by rail carriers over which
the board is given exclusive jurisdiction in 49 USC § 10501(b).
The exclusivity of the board's jurisdiction could be interpreted to refer to either regulatory or adjudicatory jurisdiction, or
both. The plain language of 49 USC § 10501(b)(1) demonstrates that Congress intended the board to have exclusive
jurisdiction over both regulation and adjudication of rail transportation. 49 USC § 10501(b)(1) grants the board exclusive
jurisdiction over "transportation by rail carriers, and the remedies provided" in Part A of the Act with respect to specific,
listed subjects. (Emphasis added.) If Congress had intended the board's exclusive jurisdiction to be only adjudicatory, e.g.,
depriving the courts of jurisdiction, the reference to remedies alone would have been sufficient. Instead, Congress granted
the board exclusive jurisdiction over the regulation of virtually all aspects of railroad operations, expressly including the
"abandonment or discontinuance of * * * facilities." 49 USC § 10501(b)(2).
The Act was passed to continue the deregulation of the railroad industry that Congress has fostered since 1980. The Act's
policy statement emphasizes this goal of deregulation.
In regulating the railroad industry, it is the policy of the United States Government--
(1) to allow, to the maximum extent possible, competition and the demand for services to establish
reasonable rates for transportation by rail;
(5) to foster sound economic conditions in transportation and to ensure effective competition and
coordination between rail carriers and other modes;
(7) to reduce regulatory barriers to entry into and exit from the industry;
(9) to encourage honest and efficient management of railroads[.]
49 USC § 10101. The Act's legislative history makes the extent of the deregulation even more apparent. The Senate
Commerce, Science and Transportation Committee explained in its report that the bill under consideration would eliminate
"unnecessary and burdensome regulatory requirements and restrictions on the rail industry."
The bill would also eliminate Federal certification and review procedures for State regulation of intrastate
rail transportation. However, nothing in this bill should be construed to authorize States to regulate railroads
in areas where Federal regulation has been repealed by this bill. * * * Subjecting rail carriers to regulatory
requirements that vary among the States would greatly undermine the industry's ability to provide the
"seamless" service that is essential to its shippers and would waken [sic] the industry's efficiency and
competitive viability.
S Rep No. 176, 104th Cong., 1st Sess. (1995), 1995 WL 701522. See also HR Rep No. 311, 104th Cong, 1st Sess 95-96
(1996), reprinted in 1996 USCCAN 793, 807-808 (reflecting "the Federal policy of occupying the entire field of economic
regulation of the interstate rail transportation system").(5)
To fill the gap left by the Act's elimination of state jurisdiction and policy of deregulation, Congress simultaneously
created a Railroad-Shipper Transportation Advisory Council to address shipper concerns. 49 USC § 726. The Senate
Commerce, Science and Transportation Committee explained the purpose of creating such a council, as follows:
The Committee recognizes that certain affected groups - most notably smaller shippers and smaller
railroads - believe that further legislative changes are necessary or desirable to more fully protect their
interests. However, the Committee is concerned that such additional measures would necessarily cast an
overly broad regulatory net and even then might be ineffective * * . The Committee believes that the better
approach, at this juncture, is to establish a mechanism which would (1) define and prioritize the most
compelling problems faced by shippers and others today, (2) encourage those problems to be addressed
without resorting to reregulation or some other governmental action in an area that might be more
effectively addressed in the private sector, * * .
S Rep No. 176, supra, 1995 WL 701522. The Railroad-Shipper Advisory Council is mandated to advise the chairman of
the board, among others, "with respect to rail transportation policy issues [the Council] considers significant" and "to
develop within the private sector mechanisms to prevent, or identify and effectively address, obstacles to the most
effective and efficient transportation system practicable." 49 USC § 726(f).
Our conclusion that the Act preempts state regulation as to abandonment of railroad agencies is consistent with the two
court decisions interpreting 49 USC § 10501. In CSX Transportation v. Georgia Public Service Commission, 944 F Supp
at 1584, the court reasoned that the Act's grant of exclusive jurisdiction over almost all matters of rail regulation to the
board, including areas formerly regulated by states exclusively, demonstrates "an intent by Congress to assume complete
jurisdiction, to the exclusion of the states, over the regulation of railroad operations," thus preempting state regulation of
railroad agency closings. In Burlington Northern Railroad Co. v. Page Grain Co., 545 NW 2d 749, 751 (Neb 1996),
railroad shippers sought review of the Nebraska Public Service Commission's grant of a railroad's application to
discontinue a service agency. The Nebraska Supreme Court stated:
The rail service agency in question is a service of Burlington to its shipping customers, as well as a facility
of that railroad. As such, the regulation of and remedies relevant to the rail service agency in question is
under the exclusive jurisdiction of the federal government.
Based on the plain language of the federal statute, legislative history and court decisions, we conclude that the Act has
preempted state regulation of railroad agency closings. Accordingly, we find that ORS 823.073 and 823.075 are preempted
as to railroad agency closings by the Act. The Supremacy Clause of the United States Constitution prohibits enforcement
of these state statutes as to railroads.
HARDY MYERS
Attorney General