In a case of national significance, the United States Court of Appeals for the Fifth Circuit has upheld a landowner’s right to bring a state law possessory action to prevent a railroad from unilaterally abolishing a long-established right to use at-grade railroad crossings. Slover & Loftus LLP participated in the representation of the affected landowner, which matter focused on issues of federal preemption under the ICC Termination Act (“ICCTA”).

The case, Franks Investment Co. v. Union Pacific R.R. Co., No. 08-30236 (5th Cir. Jan. 6, 2010) (en banc), involved an action by the landowner, Franks Investment, seeking to enjoin the Union Pacific Railroad Company’s (“UP’s”) removal of four established private at-grade railroad crossings that had provided the owner access to property (consisting of approximately 1,000 acres in Caddo Parish, Louisiana currently being used as farmland) for over 80 years. The UP invoked federal preemption to prevent the landowner from seeking any redress under generally applicable state property law. The United States District Court for the Western District of Louisiana concluded that Franks Investment’s Louisiana possessory action was expressly preempted by ICCTA, 49 U.S.C. § 10501(b). ICCTA provides the Surface Transportation Board (“STB”) with certain exclusive jurisdictional authority over railroad transportation matters, as well as certain exclusive remedial authority that may preempt remedies provided under another law. A panel of the Fifth Circuit affirmed the judgment in a decision issued on July 3, 2008, but the full court withdrew the opinion and agreed to rehear the case en banc.

After a new hearing, the Fifth Circuit, en banc, reversed, holding that ICCTA did not preempt the property rights claims. The Fifth Circuit agreed with Franks Investment that routine, non-conflicting crossing use cases are not categorically preempted, and where a crossing (and/or use thereof) merely incidentally affects rail transportation, but does not have the effect of managing or governing the transportation, state law claims may proceed. The court also determined that “[t]here is no evidence in the record to permit a finding that the four crossings created any unusual interference with the railroad,” but instead found that “[t]hese were typical crossings and a typical dispute” that was not preempted. The court remanded the matter for proceedings on the merits of the state law claims.

The Franks Investment case raised issues of considerable legal importance beyond the concerns of the immediate participants. If the trial court’s expansive interpretation of ICCTA preemption was upheld and relied upon, rail carriers could have an unfettered ability to close any and all crossings at will, with no regard to the protected rights of property owners, potentially threatening thousands of landowners nationwide that depend on rail crossings to access their property. Because of the important issues raised, the Texas Farm Bureau and constitutional law scholars that teach and write about federal preemption of state law participated in the appeal as amici curiae in support of the landowner. The STB also filed an amicus curiae brief in general support of the landowner.

A copy of the full decision may be found at Franks Investment.

Questions on this decision or on federal preemption matters generally, may be directed to Peter Pfohl or Kelvin Dowd of Slover & Loftus LLP.