Could the Texas Railroad Commission approve railroad depot or agency closings for interstate carriers operating intrastate service?

Texas AG Opinion JM-867: Railroad Depot Closings

Plain-English summary

The chairman of the Texas Railroad Commission asked whether the federal Staggers Rail Act of 1980 prevented the Commission from considering applications to discontinue railroad "agencies" maintained under article 6498. That Texas statute required railroads to maintain passenger depots and freight facilities and authorized Commission regulation.

The Attorney General concluded that the Commission lacked authority over those discontinuance applications when the agencies were maintained by interstate carriers providing intrastate service. The Staggers Act required federal certification before a state could regulate intrastate rail rates, classifications, rules, and practices involving interstate carriers.

The opinion treated agency and depot discontinuances as regulated practices involving transportation facilities. Federal law defined rail-carrier rules and practices to include facilities for transportation, and it defined railroads and transportation to include depots, grounds, property, facilities, and related services.

Texas had not obtained the required certification from the Interstate Commerce Commission. Federal appellate courts had upheld that result and rejected Texas's statutory and constitutional challenges. Until federal authorization was granted, the Railroad Commission could not act on agency discontinuances or other preempted matters. The opinion noted separately that Texas retained railway-safety authority permitted by the Rail Safety Act of 1970.

Currency note

This opinion was issued in 1988. 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

What was a railroad "agency" in this opinion?

The opinion used the term for depot facilities maintained under article 6498, including passenger accommodations and freight depots used to receive, store, and deliver freight.

Why did federal law cover depot discontinuances?

The Staggers Act's definitions treated transportation practices as including transportation facilities, and treated railroads and transportation as including depots, property, facilities, and related services.

Could Texas regulate these intrastate operations without federal certification?

No. The opinion read 49 U.S.C. § 11501(b) as barring a noncertified state from regulating the covered intrastate practices of interstate carriers.

Had Texas received the required certification?

No. The opinion cited the Interstate Commerce Commission's denial and federal appellate decisions upholding it.

Did the opinion eliminate all Texas railroad authority?

No. A footnote stated that the Railroad Commission retained railway-safety authority allowed by the Rail Safety Act of 1970.

Background and statutory framework

Article 6498 required Texas railroads to maintain adequate passenger depots and freight facilities. Before the Staggers Act, state regulators had at least initial authority over intrastate aspects of rail transportation provided by interstate carriers, subject to federal commerce power.

The Staggers Rail Act adopted a federal policy of reducing rail regulation while allowing the industry to earn adequate revenues. It directed federal-state cooperation but required state regulation to conform to federal standards.

The opinion identified three preemption mechanisms: federal control of certain general intrastate rate increases, a requirement that state jurisdiction conform exclusively to the Act, and certification before a state could regulate covered intrastate transportation supplied by interstate carriers.

49 U.S.C. § 11501(b)(4)(A) allowed a certified state to use its own standards and procedures for five years. A state denied certification could not exercise jurisdiction over intrastate rates, classifications, rules, and practices until certified. Because federal definitions included transportation facilities and freight depots, the opinion applied that bar to agency discontinuances.

Citations

Federal and state materials:

• V.T.C.S. article 6498
• Staggers Rail Act of 1980, Public Law 96-448
• 49 U.S.C. sections 10101a, 11501(b), 10702(a)(2), and 10102(21)(C), (26)
• Rail Safety Act of 1970, 45 U.S.C. section 421 et seq.

Cases and federal proceeding:

• Houston, East & West Texas Railway Co. v. United States, 234 U.S. 342 (1914), the Shreveport Rate Cases
• Ex Parte No. 388 (Sub-No. 31), State Intrastate Rail Rate Authority - Texas
• Railroad Commission of Texas v. United States, 765 F.2d 221 (D.C. Cir. 1985)
• State of Texas v. United States, 730 F.2d 409 (5th Cir. 1984), modified on rehearing, 749 F.2d 1144 (5th Cir.), cert. denied, 472 U.S. 1032 (1985)
• State of Texas v. United States, 730 F.2d 420 (5th Cir. 1984)
• State of Texas v. United States, 730 F.2d 339 (5th Cir.), cert. denied, 469 U.S. 893 (1984)
• Illinois Commerce Commission v. Interstate Commerce Commission, 749 F.2d 875 (D.C. Cir. 1984), cert. denied, 474 U.S. 820 (1985)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-867
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1988/jm0867.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Obvious character-level OCR errors have been corrected, but minor errors may remain; the linked PDF is authoritative.

THE ATTORNEY GENERAL
OF TEXAS

March 3, 1988

Honorable Jim Nugent Opinion No. JM-867
Chairman
Railroad Commission of Texas Re: Whether the Railroad
P.O. Drawer 12967 Commission is prohibited
Capitol Station by federal law from exer-
Austin, Texas 78711 cising its jurisdiction
under article 6498,
V.T.C.S., to grant rail-
road discontinuances
(RQ-1312)

Dear Mr. Nugent:

You ask whether the Staggers Rail Act of 1980, Public Law 96-448, deprives the Railroad Commission of jurisdiction to consider applications submitted by railroads providing intrastate service in Texas for authority to discontinue "agencies" established under article 6498, V.T.C.S. That statute provides:

Each railroad company in this State shall provide and maintain adequate, comfortable and clean depots and depot buildings at their several stations for the accommodation of passengers, and keep said depot buildings well lighted and warmed for the comfort and accommodation of the traveling public. They shall keep and maintain apartments in such depot buildings for the use of passengers, and keep and maintain adequate and suitable freight depots and buildings for receiving, handling, storing and delivering of all freight handled by such roads, and the Commission shall require railroad companies to comply fully with the provisions of this law under such regulations as said Commission may deem reasonable.

V.T.C.S. art. 6498 (formerly V.T.C.S. art. 6693). We conclude that the Railroad Commission has, at present, no authority to consider applications for the discontinuance of agencies.

Until 1980, state regulatory authorities, such as the Texas Railroad Commission, had at least initial jurisdiction to regulate intrastate aspects of rail transportation furnished by interstate carriers. Of course, the federal government possesses the power to preempt state regulation of intrastate commerce to protect the free flow of interstate commerce. See Houston, East & West Texas Railway Co. v. United States, 234 U.S. 342 (1914) (the Shreveport Rate Cases). In the Staggers Rail Act of 1980, Pub. L. No. 96-448, 94 Stat. 1895 (codified in scattered sections of titles 11, 45, and 49 of the United States Code), Congress adopted a new national rail transportation policy designed both to reduce government regulation of railway companies and to allow the industry to earn "adequate revenues." See generally Staggers Rail Act of 1980, Pub. L. No. 96-448, 1980 U.S. Code Cong. & Admin. News (94 Stat.) 3978; 49 U.S.C. § 10101a(3).

Congress directed the Interstate Commerce Commission both to "cooperate with the States on transportation matters" and to "assure that intrastate regulatory jurisdiction is exercised in accordance with the standards established" in the Staggers Act. 49 U.S.C. § 10101a(9). The Staggers Act provides for the possible preemption of state jurisdiction in three different, but interrelated, ways:

(1) It preempts all state jurisdiction over certain general intrastate rate increases;

(2) It prohibits a state from exercising any jurisdiction over intrastate rail transportation provided by an interstate carrier unless the state "exercises such jurisdiction exclusively in accordance with the provisions of" the Staggers Act; and

(3) It preempts any state regulation of any aspect of intrastate rail transportation provided by an interstate carrier unless the federal government certifies that state regulatory standards and procedures are in accord with the Staggers Act.

See 49 U.S.C. § 11501(b)(1), (b)(3)(A), (b)(4)(A), and (b)(6).

The last provision is the most important in considering the Railroad Commission's authority to grant agency discontinuances. In particular, the Staggers Rail Act requires the Interstate Commerce Commission to affirmatively certify that a state regulatory program for intrastate rail transportation provided by an interstate carrier is in compliance with the Act. In relevant part, the Staggers Act provides:

Any State authority which is certified by the Commission . . . may use its standards and procedures in exercising jurisdiction over intrastate rail rates, classifications, rules, and practices during the 5-year period commencing on the date of such certification. Any State authority which is denied certification . . . may not exercise any jurisdiction over intrastate rates, classifications, rules, and practices until it receives certification. . . . (Emphasis added.)

49 U.S.C. § 11501(b)(4)(A). We note that "rules and practices" of rail carriers are defined, in part, to mean

rules and practices on matters related to . . . transportation or service, including rules and practices on . . . (D) facilities for transportation.

49 U.S.C. § 10702(a)(2). Additionally, a "railroad" is defined in the Interstate Commerce Act to include:

a freight depot, yard, and ground, used or necessary for transportation.

49 U.S.C. § 10102(21)(C). Finally, the Act defines "transportation" to include

(A) . . . property, facilit[ies], instrumentalit[ies], or equipment of any kind related to the movement of passengers or property . . .; and

(B) services related to that movement. . . .

49 U.S.C. § 10102(26).¹

Thus, in order for the Railroad Commission to be able to exercise the authority to grant agency or depot discontinuances, under article 6498, V.T.C.S., the State must be certified by the Interstate Commerce Commission to regulate intrastate rail transportation provided by interstate carriers. Texas has failed to earn that certification. Ex Parte No. 388 (Sub-No. 31), State Intrastate Rail Rate Authority - Texas (served April 20, 1984), aff'd sub nom. Railroad Commission of Texas v. United States, 765 F.2d 221 (D.C. Cir. 1985). See also State of Texas v. United States, 730 F.2d 409 (5th Cir. 1984), modified on rehearing, 749 F.2d 1144 (5th Cir.), cert. denied, 472 U.S. 1032 (1985); State of Texas v. United States, 730 F.2d 420 (5th Cir. 1984). Additionally, an attack by Texas on the constitutionality of the provisions of the Staggers Act preempting regulation by noncertified states failed. State of Texas v. United States, 730 F.2d 339 (5th Cir.), cert. denied, 469 U.S. 893 (1984); see also Illinois Commerce Commission v. Interstate Commerce Commission, 749 F.2d 875, 885-87 (D.C. Cir. 1984), cert. denied, 474 U.S. 820 (1985).

In the decision in Railroad Commission of Texas, supra, the Court of Appeals for the District of Columbia Circuit noted that Texas had failed to obtain the certification required under the Staggers Rail Act to enable it to regulate intrastate rail transportation provided by interstate carriers, thus leaving "the Texas regulatory apparatus out in the cold." 765 F.2d at 226. We find no basis to question either the findings of the Interstate Commerce Commission or the several appellate courts which have rejected the Railroad Commission's several attempts to avoid the preemption of its authority to regulate intrastate rail transportation provided by interstate carriers. Until the federal government grants the Texas Railroad Commission the necessary authority to regulate intrastate rail transportation provided by interstate carriers, the Railroad Commission is without jurisdiction to act on agency discontinuances, or any other matter preempted by the federal government.

SUMMARY

The Texas Railroad Commission's authority to regulate agency discontinuances, see article 6498, V.T.C.S., has been preempted by the federal government, insofar as the agencies are maintained by interstate carriers providing intrastate services.

JIM MATTOX
Attorney General of Texas

MARY KELLER
First Assistant Attorney General

LOU McCREARY
Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Don Bustion
Assistant Attorney General