BNSF Railway Co. v. California Department of Tax and Fee Administration, No. 16-17130 (9th Cir. 2018)
Annotate this CaseThe Ninth Circuit affirmed the district court's preliminary injunction preventing implementation of California Senate Bill 84, which requires railroads to collect fees from customers shipping certain hazardous materials and then to remit those fees to California. The district court held that the railroads were likely to succeed on the merits of their claims. The panel agreed and held that SB 84 was preempted under the Interstate Commerce Commission Termination Act because it had a direct effect on rail transportation, and it was not protected from preemption by the Hazardous Materials Transportation Uniform Safety Act because the fees authorized by SB 84 were not "fair." The panel also held that the district court did not abuse its discretion in evaluating irreparable harm, the balance of the equities, and the public interest.
Court Description: Transportation / Preliminary Injunction. The panel affirmed the district court’s preliminary injunction preventing implementation of California Senate Bill 84, which requires railroads to collect fees from customers shipping certain hazardous materials and then to remit those fees to California. Railroads sued to enjoin SB 84, arguing that it violated three federal statutes and the federal Constitution. The district court concluded that the railroads were likely to succeed on the merits of their claims. The panel held that the * The Honorable Nancy Freudenthal, Chief United States District Judge for the District of Wyoming, sitting by designation. BNSF V. CDTFA 3 district court did not abuse its discretion in granting the preliminary injunction. The panel held that, even if SB 84 imposed a fee rather than a tax, it was preempted under the Interstate Commerce Commission Termination Act because it had a direct effect on rail transportation. The panel held that SB 84 was not protected from preemption by the Hazardous Materials Transportation Uniform Safety Act because the fees authorized by SB 84 imposed a burden on railroads that were not imposed on the trucking industry, and the fees therefore were not “fair.” The panel further held that the district court did not abuse its discretion in evaluating irreparable harm, the balance of the equities, and the public interest. The panel therefore affirmed the district court’s entry of the preliminary injunction. Dissenting in part, Judge Ikuta disagreed with the majority’s reasoning. She wrote that the HMTA does not supersede the ICCTA and cannot save a state law regulating railroad rates from preemption.
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