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Griffioen v. Cedar Rapids and Iowa City Railway Co.

Supreme Court of Iowa

June 22, 2018

MARK GRIFFIOEN, JOYCE LUDVICEK, MIKE LUDVICEK, SANDRA SKELTON, and BRIAN VANOUS, Individually and on Behalf of All Others Similarly Situated, Appellants,

          Appeal from the Iowa District Court for Linn County, Paul D. Miller, Judge.

         Property owners appeal a district court's order granting judgment on the pleadings to railroads based on federal preemption.

          Russell G. Petti of Law Offices of Russell G. Petti, La Canada, CA; Sam Sheronick of Sam Sheronick Law Firm, P.C., Cedar Rapids; C. Brooks Cutter and John R. Parker Jr. of Cutter Law P.C., Sacramento, CA; Edward A. Wallace and Amy E. Keller (until withdrawal) of Wexler Wallace LLP, Chicago, IL; and Eric J. Ratinoff of Eric Ratinoff Law Corp., Sacramento, CA, for appellants.

          Alice E. Loughran of Steptoe & Johnson LLP, Washington, DC; Charles T. Hvass Jr. of Donna Law Firm P.C., Minneapolis, MN; and Bruce E. Johnson of Cutler Law Firm, P.C., West Des Moines, for appellees Union Pacific Railroad Company and Union Pacific Corporation.

          Timothy R. Thornton and Leah Ceee O. Boomsma of Briggs and Morgan, P.A., Minneapolis, MN; and Kevin Collins and Sarah J. Gayer of Nyemaster Goode, P.C., Cedar Rapids, for appellees Cedar Rapids and Iowa City Railway Company and Alliant Energy Corportion.

          MANSFIELD, Justice.

         This case is yet another outgrowth from the terrible flooding that struck our state a decade ago. Property owners in Cedar Rapids have sued the owners of certain railroad bridges across the Cedar River, alleging that their misguided efforts to protect those bridges from washing out worsened the effects of the flooding for other property owners. We must decide whether the property owners' state-law damage claims against the railroad bridge owners are preempted by the Federal Interstate Commerce Commission Termination Act (ICCTA). See 49 U.S.C. § 10501(b) (2006). The ICCTA confers "exclusive" jurisdiction on the Federal Surface Transportation Board over "transportation by rail carriers" and over the "construction" or "operation" of rail tracks or "facilities." Id. The ICCTA expressly provides "exclusive" remedies "with respect to regulation of rail transportation" and expressly preempts any other "remedies provided under Federal or State law." Id.

         After careful review of the ICCTA and authorities interpreting it, we conclude this federal law does indeed preempt the property owners' action alleging that the railroads' design and operation of their railroad bridges resulted in flood damage to other properties. Accordingly, we affirm the district court's ruling granting the defendants' motion for judgment on the pleadings.

         Our decision is consistent with the federal authorities examining this question of federal law. Clearly, not all state-law tort claims involving railroads are preempted by the ICCTA. But state tort claims like the ones alleged here that involve second-guessing of decisions made by railroads to keep their rail lines open are expressly preempted by Title 49 § 10501(b) of the ICCTA. See Tubbs v. Surface Transp. Bd., 812 F.3d 1141, 1144-46 (8th Cir. 2015) (quoting § 10501(b) and then concluding that it preempts the plaintiffs' tort claims "as applied"); Jones Creek Inv'rs, LLC v. Columbia County, 98 F.Supp.3d 1279, 1291-94 (S.D. Ga. 2015) (agreeing with the railroad's contention that the ICCTA "expressly preempts [the plaintiff's] state law tort claims"); Waubay Lake Farmers Ass'n v. BNSF Ry., No. 12- 4179-RAL, 2014 WL 4287086, at *6 (D.S.D. Aug. 28, 2014) (finding that plaintiffs' state-law tort claims "fall squarely within the express terms of the ICCTA's preemption clause"); In re Katrina Canal Breaches Consol. Litig., No. 05-4182, 2009 WL 224072, at *4-6 (E.D. La. Jan. 26, 2009) (describing § 10501(b) as an "express preemption provision" and applying it to preempt plaintiffs' state-law tort claims); Maynard v. CSX Transp., Inc ., 360 F.Supp.2d 836, 842 (E.D. Ky. 2004) (stating that "section 10501(b) of the ICCTA expressly preempts Plaintiff's [common-law tort] claims"); A & W Props., Inc. v. Kan. City S. Ry., 200 S.W.3d 342, 347 (Tex. App. 2006) (finding that there is no "blanket exception" from section 10501(b) for state-law tort claims and that "preemption is express" for the tort claims asserted by the plaintiff).

         Two categories of state-law tort claims typically are not preempted by the ICCTA. One is a tort claim that challenges a railroad's activities other than the maintenance and operation of its rail lines. See Guild v. Kan. City S. Ry., 541 Fed.Appx. 362, 368 (5th Cir. 2013) (declining to find that a state-law tort claim that the defendant damaged plaintiff's private spur track by temporarily parking train cars of excessive weight on that private track was preempted); Emerson v. Kan. City S. Ry., 503 F.3d 1126, 1130 (10th Cir. 2007) (finding that § 10501(b) does not preempt a claim relating to a railroad "discarding old railroad ties into a wastewater drainage ditch adjacent to the tracks and otherwise failing to maintain that ditch"); Rushing v. Kan. City S. Ry., 194 F.Supp.2d 493, 499-501 (S.D.Miss. 2001) (finding that § 10501(b) preempted tort claims relating to the railroad's operation of its switch yard but not relating to its erection of an earthen berm outside the switch yard); Jones v. Union Pac. R.R., 94 Cal.Rptr.2d 661, 666-67 (Ct. App. 2000) (finding no preemption where there was a triable issue whether the railroad ran its engines and sound "solely to harass plaintiffs" rather than for safety reasons or "in furtherance of [defendant's] railroad operations").

         A second category of claims are those relating to rail safety, where a separate, narrower preemption provision in the Federal Rail Safety Act (FRSA) applies. See 49 U.S.C. § 20106; Tyrrell v. Norfolk S. Ry., 248 F.3d 517, 523-25 (6th Cir. 2001) (finding that the FRSA rather than the ICCTA governed a trainman's personal injury claim and the claim was not preempted); Waneck v. CSX Corp ., No. 1:17cv106-HSO-JCG, 2018 WL 1546373, at *4-6 (S.D.Miss. Mar. 29, 2018) (finding in a personal injury case that tort claims relating to the design and maintenance of the crossing and related rail structures were governed by the ICCTA and therefore preempted, whereas claims relating to the railroad's failure to slow the train related to rail safety, were therefore governed by the FRSA, and were not preempted).

         In short, "there is nothing in the case law that supports [the] argument that, through the ICCTA, Congress only intended preemption of economic regulation of the railroads." City of Auburn v. U.S. Gov't, 154 F.3d 1025, 1030 (9th Cir. 1998). If a state-law tort claim requires second-guessing of a railroad's operation and management of its own rail lines as opposed to other activities, and the claim does not pertain to rail safety, it is preempted by the ICCTA. Hence, after careful consideration, we conclude this tort action seeking a large sum of damages for flooding allegedly caused by the railroads' maintenance of their rail bridges is preempted. In this instance, as in many preemption cases, we do not believe further development of the record is needed, and accordingly we affirm the district court's grant of judgment on the pleadings.

         I. Background Facts & Proceedings.

         Because this case was resolved on a motion for judgment on the pleadings, we assume the truth of the facts stated in the pleadings. See Hussemann ex rel. Ritter v. Hussemann, 847 N.W.2d 219, 222 (Iowa 2014) ("The court should grant a party's motion for judgment on the pleadings only if the uncontroverted facts stated in the pleadings, taken alone, entitle a party to judgment."). Certain facts can also be judicially noticed. See Iowa R. Civ. P. 1.415. In the summer of 2008, Iowa residents experienced devastating flooding. Cedar Rapids was hit particularly hard with the worst flooding in its history. More than ten square miles were impacted by the floodwaters, and an estimated 10, 000 residents were displaced by the flood.

         The plaintiffs own property in Cedar Rapids. The defendants- Cedar Rapids and Iowa City Railway Company, Union Pacific Railroad Company, Union Pacific Corporation, and Alliant Energy Corporation- own railroad bridges traversing the Cedar River in Cedar Rapids. On June 10, 2008, the defendants parked railcars laden with rocks on their bridges to weigh down the bridges in an effort to keep them from washing away during the flooding. Two days later, two of the four bridges collapsed.

         The fallen railcars clogged the Cedar River and therefore caused or exacerbated the damage to plaintiffs' property. The two bridges that did not collapse also caused damage when the rising water reached the railcars atop the bridges, creating a dam effect and diverting water to low-lying areas.

         On June 7, 2013, the plaintiffs filed a class action petition at law in the Linn County District Court, alleging negligence, strict liability for engaging in an abnormally dangerous or ultra-hazardous activity, and strict liability based on violations of Iowa Code sections 468.148 and 327F.2 (2009). The plaintiffs sought actual damages of $6 billion and punitive and treble damages.[1]

         The defendants removed the action to the United States District Court for the Northern District of Iowa on the theory that the plaintiffs' claims were completely preempted by the ICCTA. The district court denied the plaintiffs' motion to remand, held that complete preemption applied, and dismissed the case. Griffioen v. Cedar Rapids & Iowa City Ry., 977 F.Supp.2d 903, 908-09 (N.D. Iowa 2013). The United States Court of Appeals for the Eighth Circuit reversed and remanded. Griffioen v. Cedar Rapids & Iowa City Ry., 785 F.3d 1182, 1192 (8th Cir. 2015). That court reasoned,

The absence from the ICCTA of a substitute federal cause of action that would embrace the Griffioen Group's claims leads us to conclude that Congress has not expressed the clear intent necessary to overcome the exceptionally strong presumption against complete preemption . . . .

Id. At the same time, the court added, "Our holding is, of course, limited to the issue of federal-question jurisdiction, and so we offer no views regarding any preemption defense that may be raised in state court." Id.

         Following remand to the Linn County District Court, the defendants moved for judgment on the pleadings based on preemption. In its ruling on February 12, 2016, the district court granted the motion for judgment on the pleadings. The court reasoned,

The uncontroverted facts, as stated in the pleadings, establish that the ICCTA expressly preempts the state law claims stated by Plaintiffs. The bridges at issue with respect to Plaintiffs' claims are . . . inextricably intertwined with the railroad Defendants' tracks, which affects rail transportation. Plaintiffs, having made complaints about how the railroad Defendants loaded and positioned their rail cars; as to where and when they parked their rail cars; and as to the design, construction and maintenance of the bridges, have stated claims that go directly to rail transport regulation. . . . Plaintiffs are complaining about actions taken by the railroad Defendants that are an essential part of the railroads' operations, and that would result in Plaintiffs managing or governing the operations of the railroads. . . .
. . . .
Plaintiffs' state law claims are expressly preempted by federal law because the claims fall within the scope of the ICCTA preemption clause.

         The plaintiffs appealed, and we retained the appeal.

         II. Standard of Review.

         We review a district court's ruling on a motion for judgment on the pleadings for the correction of errors at law. Hussemann, 847 N.W.2d at 222. "The district court should only grant the motion if the pleadings, taken alone, entitle a party to judgment." Meinders v. Dunkerton Cmty. Sch. Dist ., 645 N.W.2d 632, 633 (Iowa 2002).

         III. Analysis.

         A. The ICCTA.

         In 1995, Congress enacted the ICCTA, which abolished the Interstate Commerce Commission and created the Surface Transportation Board (STB). ICC Termination Act of 1995, Pub. L. No. 104-88, 109 Stat. 803 (codified at 49 U.S.C. §§ 10101-16106). The purpose of the ICCTA was to create "the direct and complete pre-emption of State economic regulation of railroads" and thereby deregulate the economic activity of the industry. H.R. Rep. No. 104-311, at 82, 95 (1995), as reprinted in 1995 U.S.C.C.A.N. 793, 793, 807; see also S. Rep. No. 104-176, at 2, 5, 7 (1995) (noting that because "the Committee [was] impressed with the positive effects rail deregulation . . . had on the railroad industry," the bill as initially proposed would "significantly reduce[ ] regulation of surface transportation industries" and would "continue[ ] the deregulation theme" of the past several years).

         To accomplish this deregulation, Congress vested the STB with exclusive regulation of rail transportation and operations, including remedies related to railway transportation. The ICCTA contains an express preemption provision:

         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 U.S.C. § 10501(b).

"[T]ransportation" includes-
(A) a locomotive, car, vehicle, . . . property, . . . instrumentality, or equipment of any kind related to the movement of passengers or property, or both, by rail . . .; and
(B) services related to that movement . . . .

Id. § 10102(9). Railroad bridges, like railroad crossings, railroad tracks, and roadbeds for tracks, meet this statutory definition. See Pere Marquette Hotel Partners, L.L.C. v. United States, No. 09-5921, 2010 WL 925297, at *4 (E.D. La. Mar. 10, 2010). "[R]ailroad" as statutorily defined includes bridges. 49 U.S.C. § 10102(6)(A).

         The defendants' position is that the property owners' claims are expressly preempted by the foregoing language in the ICCTA.[2] They contend that the defendants' decisions to park railcars loaded with rock on railroad bridges in order to keep those bridges open, and their prior construction of those bridges, related to the "construction" and "operation" of "facilities," as to which the STB's jurisdiction is exclusive. They maintain that allowing an Iowa district court to second-guess those decisions ...

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