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Association of American Railroads v. South Coast Air Quality Management Dist.

September 15, 2010

ASSOCIATION OF AMERICAN RAILROADS; BNSF RAILWAY COMPANY; AND UNION PACIFIC RAILROAD COMPANY, PLAINTIFFS-APPELLEES,
v.
SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT; AND THE GOVERNING BOARD OF SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT, DEFENDANTS-APPELLANTS.



Appeal from the United States District Court for the Central District of California John F. Walter, District Judge, Presiding D.C. No. CV-06-01416-JFW.

The opinion of the court was delivered by: Graber, Circuit Judge

FOR PUBLICATION

Argued and Submitted June 4, 2009 -- Pasadena, California.

Before: Pamela Ann Rymer, Susan P. Graber, and Raymond C. Fisher,*fn1 Circuit Judges.

OPINION

An array of federal, state, and local laws governs the operation of railroads, including laws that regulate the effect of the railroad industry on the environment. Here, a local governmental agency enacted rules aimed at limiting the air pollution created by idling trains. Several entities within the railroad industry filed suit. After a bench trial, the district court held that federal law preempts the local rules. On de novo review, Davis v. Yageo Corp., 481 F.3d 661, 673 (9th Cir. 2007); J & G Sales Ltd. v. Truscott, 473 F.3d 1043, 1047 (9th Cir. 2007), we affirm.

The State of California divides its geographic territory into 35 air quality management districts. One of the air quality districts located in Southern California is the South Coast Air Quality Management District ("the District"). The District performs two related functions that are relevant here. First, California law grants some regulatory authority to the District. Cal. Health & Safety Code § 40001. Provided that the District's rules are within the scope of its regulatory authority and that the District meets all procedural and other state-law requirements, the District's rules have the force and effect of state law.

Second, California law tasks the District with drafting and proposing an air quality management plan for its region. Id. § 40460. If approved by the state agency, the California Air Resources Board ("CARB"), then the plan becomes part of the statewide air quality management plan. Id. § 40460(d). Additionally, CARB submits the statewide air quality management plan to the federal Environmental Protection Agency ("EPA") as part of California's proposed overall "state implementation plan" under the federal Clean Air Act. Id.; see generally Union Electric Co. v. EPA, 427 U.S. 246 (1976) (discussing in detail the mechanism of using state implementation plans to meet the requirements of the federal Clean Air Act). "Once approved by EPA[,] [state implementation] plans have the force and effect of federal law." Safe Air for Everyone v. EPA, 488 F.3d 1088, 1091 (9th Cir. 2007) (original brackets and internal quotation marks omitted).

In late 2005 and early 2006, the District enacted the three rules that are the subject of this case. The District had identified emissions from idling trains as a source of air pollution. The District enacted rules in an attempt to reduce that pollution. One of the rules limits the permissible amount of emissions from idling trains (through a series of alternative options for achieving that goal). The other two rules impose various reporting requirements, backed by threat of penalties, on rail-yard operators.

In response, the Association of American Railroads, BNSF Railway Company, and Union Pacific Railroad Company (collectively, "the Railroads") filed this action against the District and its governing board. The Railroads contend that the Interstate Commerce Commission Termination Act of 1995 ("ICCTA"), Pub. L. No. 104-88, 109 Stat. 803, a federal act that substantially deregulated the railroad industry, preempts the District's rules. See generally DHX, Inc. v. Surface Transp. Bd., 501 F.3d 1080, 1082-83 (9th Cir. 2007) (discussing ICCTA). The district court agreed and entered a permanent injunction against the District and its governing board, precluding them "from implementing or enforcing any provision of [the challenged rules]."*fn2 The District timely appeals.

[1] ICCTA contains an express preemption provision over regulation of rail transportation:

The jurisdiction of the [Surface Transportation] 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 ...


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