Association of American Railroads v. Seggos

Background

New York’s 2023 Waste By Rail Law requires certain coverings for solid waste transported by rail in the state. Putrescible waste must be covered with sealing hard lids, while non-putrescible waste must be covered with securely fastened hard tarping. The law authorizes New York’s Attorney General to bring enforcement proceedings and the Commissioner of the Department of Environmental Conservation to impose civil penalties and administrative sanctions.

The Association of American Railroads, the American Short Line and Regional Railroad Association, and the New York State Chapter of the National Waste & Recycling Association sued Basil Seggos and Letitia James in their official capacities. The plaintiffs sought to stop enforcement of the law and obtain a declaration that federal law preempts it—that is, prevents the state law from being enforced because federal law controls the subject. The defendants moved to dismiss the complaint.

Federal Railroad Safety Act

The court concluded that the plaintiffs plausibly alleged that the Waste By Rail Law does not concern railroad safety within the meaning of the Federal Railroad Safety Act. The court distinguished railroad-safety risks from public-health or environmental concerns, explaining that the complaint’s allegations did not show that the law’s health-related purposes created a hazard to the railroad system or its participants.

The defendants also argued that the law addressed railroad safety by reducing waste spills that could cause railroad accidents. The court found that the complaint alleged that the plaintiffs already used lids, tarping, specialized rail cars, and netting, and that the coverings required by the new law might not prevent waste from falling onto railway tracks. Those allegations undermined the defendants’ position at the motion-to-dismiss stage.

The court nevertheless reserved a final decision on whether the Waste By Rail Law relates to railroad safety because the parties disputed factual issues about the law’s effect on railroad safety. The court therefore did not address the plaintiffs’ alternative argument that the Federal Railroad Safety Act itself preempts the state law.

Interstate Commerce Commission Termination Act

The court held that the plaintiffs plausibly stated a preemption claim under the Interstate Commerce Commission Termination Act. That statute gives the federal Surface Transportation Board broad jurisdiction over transportation by rail and expressly preempts state laws that regulate rail transportation, while allowing laws with only a remote or incidental effect on rail activity.

The plaintiffs plausibly alleged that New York’s law regulates transportation by rail carriers and imposes an unreasonable burden on rail transportation. They alleged that the required coverings would be more complex and expensive, could create safety hazards, cause backlogs at transfer stations, make transportation more difficult, increase costs, and shift some waste transportation from rail to trucks. The court allowed this claim to proceed.

Hazardous Materials Transportation Act

The court dismissed the plaintiffs’ preemption claim under the Hazardous Materials Transportation Act. The complaint mentioned the statute in less than one sentence and did not allege the elements of the claim, provide supporting facts, or allege that the types of waste covered by the state law are hazardous materials under federal law.

The court stated that the plaintiffs would receive one opportunity to amend the complaint if they wished to pursue this claim. The opinion did not state that the dismissal was with or without prejudice.

Disposition

The court denied the defendants’ motion to dismiss in part and granted it in part. The plaintiffs’ Interstate Commerce Commission Termination Act claim was allowed to proceed, the Hazardous Materials Transportation Act claim was dismissed, and the court left the Federal Railroad Safety Act issue open pending possible factual development. The plaintiffs received 30 days to amend their complaint if they elected to do so and had a good-faith basis for amendment.