North Coast Railroad Authority v. Friends of the Eel River, et al.

The ICC Termination Act of 1995 (ICCTA) expressly “preempt[s]” state law “with respect to regulation of rail transportation.” 49 U.S.C. § 10501(b). The Surface Transportation Board (STB), which the statute vests with “exclusive” jurisdiction over rail transportation, has long ruled that ICCTA categorically preempts state laws that require the permitting or preclearance of activities that are authorized by the STB. The federal courts of appeals have uniformly agreed. In this case, two environmental groups have sued two railroads—one state-owned, the other privately owned—under the California Environmental Quality Act (CEQA). Alleging a failure to comply with the statute’s project-approval requirements, their consolidated citizen suits seek to enjoin the railroads’ track repairs and STB-authorized freight service. A unanimous California Supreme Court correctly held that ICCTA categorically preempts application of CEQA’s pre-approval requirements to the private railroad. But—in acknowledged conflict with the STB—a divided court reached the opposite conclusion as to the state-owned railroad, holding that the imposition of CEQA’s pre-approval requirements on the state-owned railroad through citizen suits is an act of self-governance implicating the Tenth Amendment rather than an act of state regulation preempted by ICCTA. The question presented is: Whether citizen suits that seek to enforce state environmental approval requirements against a state-owned railroad by enjoining activities subject to the STB’s exclusive jurisdiction are categorically preempted by ICCTA.