[Federal Register Volume 69, Number 58 (Thursday, March 25, 2004)]
[Notices]
[Pages 15433-15434]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-6802]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[STB Finance Docket No. 34487]


Greenville County Economic Development Corporation--Petition for 
Declaratory Order

AGENCY: Surface Transportation Board, DOT.

ACTION: Institution of declaratory order proceeding; request for 
comments.

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SUMMARY: The Surface Transportation Board is instituting a declaratory 
order proceeding and requesting comments on the following question: 
whether the preemption provisions of 49 U.S.C. 10501(b)(2) preclude a 
state court from hearing a lawsuit alleging that a railroad has failed 
to carry out its common carrier obligation to provide service.

[[Page 15434]]


DATES: Any interested person may file with the Board written comments 
concerning this issue by March 31, 2004. Replies will be due on April 
7, 2004.

ADDRESSES: Send an original and 10 copies of any comments referring to 
STB Finance Docket No. 34487 to: Surface Transportation Board, 1925 K 
Street, NW., Washington, DC 20423-0001. In addition, send one copy of 
any comments to: Andrew J. White, Jr., Haynsworth Sinkler Boyd, PA, 75 
Beattie Place, 11th Floor, P.O. Box 2048, Greenville, SC 29602 (counsel 
for Greenville County Economic Development Corporation); and Jason 
Elliott, Law Offices of John S. Simmons, LLC, 1711 Pickens Street, P.O. 
Box 5, Columbia, SC 29202 (counsel for Groome & Associates, Inc.).

FOR FURTHER INFORMATION CONTACT: Joseph H. Dettmar, (202) 565-1600. 
[Assistance for the hearing impaired is available through the Federal 
Information Relay Service (FIRS) at: (800) 877-8339.]

SUPPLEMENTARY INFORMATION: In Finance Docket No. 33752, Greenville 
County Economic Development Corporation--Acquisition Exemption--South 
Carolina Central Railroad Company, Inc., Carolina Piedmont Division, 
the Greenville County Economic Development Corporation (GCEDC) acquired 
an 11.8 mile unabandoned rail line between Greenville and Travelers 
Rest, S.C. (Served June 3, 1999). On June 30, 2003, in Docket No. AB-
490X, Greenville County Economic Development Corporation--
Discontinuance of Service Exemption--in Greenville County, SC, GCEDC 
sought to use the Board's class exemption procedures to obtain 
authorization to discontinue service over a line of railroad that it 
had acquired in 1999. In response, Lee Groome and Groome & Associates, 
Inc. (Groome), indicated that it had unsuccessfully sought service over 
the line, and that it was pursuing an action against GCEDC in South 
Carolina state court. Finding that Groome had raised sufficient 
concerns to make it inappropriate for GCEDC to use the expedited class 
exemption procedures--which are reserved for routine, noncontroversial 
matters--in a decision issued January 29, 2004, the Board dismissed the 
notice of exemption. The Board held that, to obtain discontinuance 
authority, GCEDC would have to proceed by filing a petition for an 
individual exemption under 49 U.S.C. 10502 or a full application under 
49 U.S.C. 10903, either of which would permit the issues to be examined 
more fully on a more thoroughly developed record.
    The Board in its decision did not address the state court 
proceeding other than to note that it provided an indication that the 
discontinuance matter was not uncontroversial. Subsequently, however, 
in a letter dated March 11, 2004, Andrew J. White, Jr., counsel for 
GCEDC, did raise questions about the state court's jurisdiction in 
light of the Federal preemption of state law embodied in 49 U.S.C. 
10501(b). Among other things, Mr. White furnished the agency with a 
recent decision issued in the Greenville County Court of Common Pleas 
in Groome & Associates, Inc., and Lee Groome v. Greenville County 
Economic Development Corporation, Civil Case No. 01-CP-23-2351 (filed 
Feb. 13, 2004). In that decision, the court rejected GCEDC's argument 
that the court lacks jurisdiction to hear claims for damages resulting 
from failure to provide service (Id. at 4); cited various provisions of 
the South Carolina Code as support for its authority to act (Id.); 
found it ``significant that the STB has made [its] ruling dismissing 
the carrier's action with full knowledge of the pending state court 
litigation,'' which, the court concluded, indicates that the Board 
``does not find the state court litigation to be offensive and 
apparently does not intend to preempt the jurisdiction of the state 
court in this matter'' (Id. at 5); and determined that it ``is for a 
jury to determine whether the defendant had fully complied with [its] 
common carrier obligations to provide rail service on the contested 
line.'' Id.
    Mr. White's letter will be treated as a petition for declaratory 
order and placed in the docket and on the Board's Web site, and a 
declaratory order proceeding will be instituted. It should be noted 
that, in disallowing use of the class exemption for the sought 
discontinuance, the Board has not addressed the merits of either the 
service dispute or the discontinuance. In this proceeding, however, the 
Board will not address any merits issues, but rather will look at a 
single question, which was not expressly or impliedly addressed in the 
decision on the discontinuance: whether the preemption provisions of 49 
U.S.C. 10501(b)(2) preclude a state court from hearing a lawsuit 
alleging that a railroad has failed to carry out its common carrier 
obligation to provide service.
    Under 49 U.S.C. 10501(b), the Board has exclusive jurisdiction over 
``transportation by rail carriers,'' and the remedies provided in the 
Interstate Commerce Act (IC Act), which the Board administers, 
``preempt [other] remedies provided under Federal or State law.'' 
Several courts have interpreted this provision and have found that it 
is extremely broad. See, e.g., CSX Transp., Inc. v. Georgia Public 
Service Commission, 944 F. Supp 1573, 1581 (N.D. Ga. 1996); Friberg v. 
Kansas City S. Ry., 267 F.3d 439, 443 (5th Cir. 2001). The Board has 
interpreted it in a variety of cases as well. See, e.g., Joint Petition 
for Decl. Order--Boston & Maine Corp. & Town of Ayer, MA, STB Finance 
Docket No. 33971 (STB served May 1, 2001) (Ayer),\1\ 2001 STB LEXIS 435 
(collecting court cases). But although at least one federal court of 
appeals has addressed the preemptive effect of section 10501(b) on 
state court actions in cases involving the common carrier obligation--
see Pejepscot Industrial Park v. Maine Central Railroad, 215 F.3d 195, 
204-05 (1st Cir. 2000) (``Congress intended only to preempt state law 
and remedies,'' but did not intend to oust concurrent federal district 
court jurisdiction over common carrier obligation claims under the IC 
Act)--the matter has never been formally brought before the Board, and 
so the Board has never ruled on it.
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    \1\ Aff'd, Boston & Maine Corp. v. Town of Ayer, 206 F. Supp. 2d 
128 (D. Mass. 2002), rev'd solely on attorneys' fee issue, 330 F.3d 
12 (1st Cir. 2003).

    Accordingly, by this notice, the Board is requesting comments on 
this matter. Board decisions and notices are available on our Web 
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site at www.stb.dot.gov.

    Decided: March 22, 2004.

    By the Board, Chairman Nober.
Vernon A. Williams,
Secretary.
[FR Doc. 04-6802 Filed 3-24-04; 8:45 am]
BILLING CODE 4915-01-P