DIANA DEL GROSSO; RAY SMITH; JOSEPH HATCH; CHERYL HATCH; KATHLEEN KELLEY; ANDREW WILKLUND; RICHARD KOSIBA, Petitioners,
SURFACE TRANSPORTATION BOARD; UNITED STATES, Respondents, GRAFTON & UPTON RAILROAD COMPANY, Intervenor.
PETITION FOR REVIEW OF A FINAL ORDER OF THE SURFACE
Bobrowski, with whom Blatman, Bobrowski & Haverty, LLC
was on brief, for petitioners.
G. Light, Attorney, Surface Transportation Board, with whom
Makan Delrahim, Assistant Attorney General, Robert B.
Nicholson and Adam D. Chandler, Attorneys, Department of
Justice, Craig M. Keats, General Counsel, and Theodore L.
Hunt, Associate General Counsel, were on brief, for
E. Howard for intervenor.
Torruella, Thompson, and Kayatta, Circuit Judges.
THOMPSON, CIRCUIT JUDGE.
dispute - back here a second time - takes us once again into
the arcane world of the Interstate Commerce Commission
Termination Act ("ICCTA"). The combatants are the
same. On one side of the controversy are petitioners Diana
Del Grosso, Ray Smith, Joseph Hatch, Cheryl Hatch, Kathleen
Kelley, Andrew Wilklund, and Richard Kosiba (collectively
"petitioners"). On the other side are respondents
Surface Transportation Board ("STB") and the United
States, as well as intervenor Grafton & Upton Railroad
Company ("G&U"). Petitioners believe the STB went
off track by concluding that certain activities at a G&U
facility involving wood pellets - vacuuming, screening,
repelletizing, bagging, palletizing, and shrink-wrapping
(more on those later) - qualify as "transportation by
rail carrier" and so fall within the STB's exclusive
jurisdiction. Respondents and intervenor take the exact
opposite position, unsurprisingly. Disagreeing with
petitioners and agreeing with respondents and intervenor, we
deny the petition for review.
begin by cluing the reader in on the key aspects of the
in 1995 to terminate the Interstate Commerce Commission, the
ICCTA gives the STB - an independent federal agency -
exclusive jurisdiction over "transportation by rail
carrier . . . in the United States between a place in . . . a
State and a place in the same or another State as part of the
interstate rail network." See 49 U.S.C. §
10501(a)(1), (a)(2)(A), and (b); see also Del Grosso
I, 804 F.3d at 113-14. Federal regulation of railroads
is "pervasive and comprehensive." Chi. &
N.W. Transp. Co. v. Kalo Brick & Tile Co., 450 U.S.
311, 318 (1981). But it does have its limits - for instance,
the STB's jurisdiction does not extend to purely
intrastate rail networks.
ICCTA defines "transportation" broadly to encompass
both the facilities and equipment "related to the
movement of passengers or property, or both, by rail" as
well as "services related to that movement." 49
U.S.C. § 10102(9)(A) and (B). Examples of "services
related to that movement . . . include receipt, delivery,
elevation, transfer in transit, refrigeration, icing,
ventilation, storage, handling, and interchange of passengers
and property." Id. § 10102(9)(B); see
also Del Grosso I, 804 F.3d at 117-18. Of course, the
use of the word "include" indicates the list is
illustrative rather than comprehensive. See United States
v. Cianci, 378 F.3d 71, 79 (1st Cir. 2004); see also
Include, Black's Law Dictionary 880 (10th
and it's a big but - while the definition of
transportation is "expansive," it most certainly
"does not encompass everything touching on
railroads." Del Grosso I, 804 F.3d at 118
(quoting Emerson v. Kan. City S. Ry. Co., 503 F.3d
1126, 1129 (10th Cir. 2007)). So, for example,
"'manufacturing and commercial transactions that
occur on property owned by a railroad that are not part of or
integral to the provision of rail service are not embraced
within the term "transportation."'"
Id. (quoting New Eng. Transrail, LLC, d/b/a
Wilmington & Woburn Terminal Ry. - Constr., Acquisition
& Operation Exemption - in Wilmington & Woburn,
MA, STB Finance Docket No. 34797, 2007 WL 1989841, at *6
(S.T.B. June 29, 2007) ("New Eng.
Transrail")). Ultimately, though, whether an
activity amounts to transportation "is a case-by-case,
fact-specific determination." Padgett v. Surface
Transp. Bd., 804 F.3d 103, 108 (1st Cir. 2015) (quoting
Tex. Cent. Bus. Lines Corp. v. City of Midlothian,
669 F.3d 525, 530 (5th Cir. 2012)).
STB has jurisdiction, the next question usually is whether
that jurisdiction preempts state and local regulation, given
the facts of the case. See Del Grosso I, 804 F.3d at
113-14; Padgett, 804 F.3d at 107-08. But making our
job easier, petitioners - as the STB notes, without
contradiction - did not and do not dispute that if the
challenged activities come within the STB's jurisdiction,
then the ICCTA would preempt the application of various local
ordinances to those activities.
this legal landscape, we turn to the particulars of
petitioners' case. In so doing, we borrow generously from
our earlier opinion.
relevant facts are simple and uncontroversial. We offer only
a summary, knowing that anyone wanting more details can
consult our prior decision.
late 2000s, G&U redeveloped its rail yard (located in
Upton, Massachusetts) and an adjoining tract of land
(formerly used as a municipal landfill) into a rail-to-truck
transloading facility. Since then, G&U has used that facility
to transload a variety of bulk commodities, including wood
countries use wood pellets as fuel in power plants. But New
Englanders use them as home-heating fuel in wood-burning
stoves. Manufacturers make wood pellets from raw materials
like small logs, wood chips, and saw dust. They chip, dry,
pulverize, and steam the materials, and then press them
through dies to form uniformed pellets. After cooling,
they screen the newly-formed pellets to remove dust and
broken pieces, material known as "fines," which
they recycle into new pellets by repeating the just-described
manufacturing process. And when the pellets are ready for
shipping, they contain only a tiny amount of fines -
typically less than 1% of the total shipment.
the wood pellets shipped to G&U's facility for
transloading, the vast majority are made by two companies:
Georgia Biomass, LLC, located in Georgia, and Pinnacle
Renewable Energy ("Pinnacle"), located in British
Columbia. Operating the largest pellet-manufacturing facility
in the United States, Georgia Biomass produces roughly 750,
000 metric tons of pellets a year. Pinnacle operates 7
pellet-manufacturing plants and can produce about 1, 500, 000
metric tons of pellets a year. Georgia Biomass sells its
pellets in bulk only. It has no facilities for bagging them.
And it ships them by rail in hopper cars - the use of
rail-hopper cars results in fewer pellets breaking than if
the pellets had been shipped by rail or truck in bags.
Pinnacle sells only about 1% of its pellets in bags. And it
ships these bagged pellets only short distances to places in
the Pacific Northwest. The pellets shipped to G&U's
facility come not in bags but in bulk in rail-hopper cars.
customers are wood-pellet distributors who, after buying the
wood pellets from the manufacturers, sell the pellets either
to retailers or to homeowners. As the pellets' owners,
the distributors pay the rail-freight charges plus the
transloading charges. The distributors have no facilities in
New England where they can take the bulk-form pellets by
rail, place them in bags, and put them on pallets for
distribution by truck. Perhaps not surprisingly, the