SUNFLOUR RAILROAD, INC. v. EUGENE PAULSON, and HEARTLAND ORGANIC FOODS, INC., a South Dakota Corporation 2003 SD 122
Annotate this CaseSUNFLOUR RAILROAD, INC.,
Plaintiff and Appellee,
v.
EUGENE PAULSON, and HEARTLAND
ORGANIC FOODS, INC., a South
Dakota Corporation,
Defendants and Appellants.
[2003 SD 122]
South Dakota Supreme Court
Appeal from the Circuit Court of
The Fifth Judicial Circuit
Roberts County, South Dakota
Hon. Jon S. Flemmer, Judge
JEFFREY T. SVEEN
JULIA M. DVORAK of
Siegel, Barnett and Schutz, L.L.P.
Aberdeen, South Dakota
Attorneys for plaintiff and appellee.
EUGENE PAULSON
Heartland Organic Foods, Inc.
Rosholt, South Dakota
Pro se.
Considered on Briefs August 25, 2003
Opinion Filed 10/1/2003
#22642
SABERS, Justice
[¶1.] Eugene Paulson (Paulson), acting pro se on behalf of himself and Heartland Organic Foods, Inc. (Heartland), appeals from a judgment entered against Paulson and Heartland. Paulson and Heartland also appeal the dismissal of their counterclaim against Sunflour Railroad, Inc. (Sunflour).
FACTS[¶2.] Paulson and Heartland own property adjacent to a railroad right-of-way. Paulson and Heartland’s grain elevator encroaches on the right-of-way. Prior to July 2000, Soo Line Railroad owned the right-of way. Paulson and Soo Line had a lease agreement that allowed Paulson and Heartland to leave the elevator on the right-of-way. In July 2000, Sunflour purchased the right-of-way via Quit-Claim Deed. On March 16, 2001, Sunflour notified Paulson and Heartland that the lease with Soo Line was not binding upon Sunflour and that the elevator must be removed. Sunflour informed Paulson and Heartland that until the elevator was removed, Sunflour would charge $500 per month rent. Paulson and Heartland refused to remove the elevator or pay rent and Sunflour brought suit to force removal and payment of damages plus pre-judgment interest in connection with rent.
[¶3.] Paulson and Heartland brought a counterclaim alleging that Sunflour owed rent of $500 per month because Sunflour was using a siding track that encroached on their property.
[¶4.] The trial court entered judgment in favor of Sunflour for $9,000 for rent plus pre-judgment interest and ordered Paulson and Heartland to remove their elevator from Sunflour’s property.[1] The trial court found that it did not have jurisdiction to enter a judgment in favor of Paulson and Heartland on the counterclaim for the reasons stated in Issue 2.
[¶5.] Paulson and Heartland raise several issues on appeal. Because our standard of review for this case has been significantly restricted by the state of the record, we present the issues as:
1. Whether the circuit court’s findings supported the judgment against Paulson and Heartland.
2. Whether the circuit court’s findings supported dismissal of the Defendants’ counterclaim for lack of jurisdiction.
3. Whether Sunflour and its attorney committed fraud by raising the issue of federal preemption and by attempting to enforce the circuit court’s judgment.
The circuit court is affirmed on Issue 1, reversed on Issue 2 and we decline to reach Issue 3.
STANDARD OF REVIEW[¶6.] Paulson failed to order a transcript of the circuit court proceedings. It is well settled that the appellant bears the responsibility of presenting an adequate record on appeal. Specialty Mills, Inc. v. Citizens State Bank, 1997 SD 7, ¶16, 558 NW2d 617, 623, n6 (citing Baltodano v. North Cent. Health Serv., Inc., 508 NW2d 892, 894-95 (SD 1993)). By failing to order the transcript in a timely manner, the appellant waives the right to a transcript. Id. “Where the record contains no transcript, the record on appeal is confined to those pleadings and papers transmitted from the circuit court.” Selway Homeowner’s Association, Inc. v. Cummings, 2003 SD 11, ¶15, 657 NW2d 307, 312 (citing Baltodano, 508 NW2d at 894 ). Finally, “[w]hen confronted with incomplete records, our presumption is that the circuit court acted properly.” Specialty Mills, Inc., 1997 SD 7, ¶16, 558 NW2d at 623, n6.
[¶7.] Our review is further limited because Paulson also failed to propose findings of fact and conclusions of law and failed to object to Sunflour’s proposed findings of fact and conclusions of law. The Court is now “significantly limited 'to the question [] whether the findings support the conclusions of law and judgment.’” Selway Homeowners Association, 2003 SD 11, ¶14, 657 NW2d at 312 (quoting Huth v. Hoffman, 464 NW2d 637, 638 (SD 1991)).
[¶14.] 2. WHETHER THE CIRCUIT COURT’S FINDINGS SUPPORTED DISMISSAL OF PAULSON AND HEARTLAND’S COUNTERCLAIM FOR LACK OF JURISDICTION BASED ON THE DOCTRINE OF PREEMPTION.
[¶15.] The trial court concluded that the Surface and Transportation Board (STB) had exclusive jurisdiction over Paulson and Heartland’s counterclaim pursuant to 49 USC § 10501. The statute provides in part that the STB has exclusive jurisdiction over the “construction, acquisition, operation, abandonment, or discontinuance of a spur[.]” 49 USC § 10501(b)(2) (emphasis supplied). Based on its finding that, “Defendant’s counterclaim for rent . . . if allowed, could force the Plaintiff to abandon its use of a spur[,]” the trial court held that it did not have jurisdiction to entertain the counterclaim.
[¶16.] The state of the record, the trial court’s findings and the parties’ briefs offer no guidance on this issue. Paulson and Heartland offer no applicable authority for their argument that the trial court erred. Likewise, Sunflour offers only a very general statement of law from one case to support the assertion that the trial court properly found preemption. A review of 49 USC § 10501 and case law concerning the statute raises questions as to whether the trial court properly found its jurisdiction preempted based on the doctrine of preemption.
[¶17.] The jurisdiction granted to the STB in 49 USC § 10501 is both exclusive and preemptive. Courts have consistently held that the preemption clause of subsection (2) has a broad scope. See e.g. Dakota, Minnesota & Eastern RR Corp. v. South Dakota, 236 FSupp 2d 989 (DSD 2002); City of Auburn v. United States, 154 F3d 1025, 1030 (9th Cir 1998); Wisconsin Central Ltd. v. City of Marshfield, 160 FSupp2d 1009, 1013 (WDWis 2000). Despite its breadth, the jurisdiction of the STB does not foreclose every conceivable state claim. It is generally held that the exclusive and preemptive jurisdiction granted to the STB is over attempts to impose economic regulation on rail transportation. See e.g. Cedarapids, Inc., v. Chicago, Central & Pacific R.Co., 265 FSupp2d 1005, 1011 (ND Iowa 2003). The holdings are supported by the statute, which provides in part that, “the remedies provided under this part with respect to regulation of rail transportation are exclusive and preempt the remedies provided under Federal or State law.” 49 USC § 10501 (b)(2). Therefore, the question before the court was whether allowing a state law claim for rent, which may or may not lead to abandonment of a track, would constitute “regulation” of the railroad. This question was presumed affirmatively rather than supported or answered specifically in the court’s findings of fact and conclusions of law.
[¶18.] The statute does not define the term “regulate,” however, Black’s Law dictionary defines it as “the act or process of controlling by rule or restriction.” Black’s Law Dictionary 1289 (7th ed 1999). The court’s finding that imposition of rent “could” force Sunflour to “abandon” the track is insufficient to establish that imposition of judgment on a state law claim for rent constitutes “regulation” under 49 USC § 10501. Having raised the issue of preemption, it was incumbent upon Sunflour to support the assertion. See e.g. Eldridge v. City of Greenwood, 331 SC 398, 503 SE2d 191 (1998) (the party asserting preemption bears the burden of proof). Sunflour failed to meet its burden either here or below. The trial court’s single finding on this issue is insufficient to support its conclusion of preemption and therefore the issue must be remanded for the court to make the appropriate findings.
[¶19.] The trial court is reversed on Issue 2.
[¶20.] 3. WHETHER SUNFLOUR AND ITS ATTORNEY COMMITTED FRAUD BY RAISING THE ISSUE OF FEDERAL PREEMPTION AND BY ATTEMPTING TO ENFORCE THE CIRCUIT COURT’S JUDGMENT.
[¶21.] For the first time on appeal, Paulson alleges that Sunflour engaged infraudulent activity by raising the issue of federal preemption under 49 USC § 10501(b) at trial and by attempting to enforce the circuit court’s judgment. This Court does not decide issues which are raised for the first time on appeal. Fullmer v. State Farm Ins. Co., 514 NW2d 861, 866 (SD 1994) (citing Hawkins v. Peterson, 474 NW2d 90, 95 (SD 1991) (additional citations and quotations omitted)). Therefore, we decline to reach Issue 3.
[¶22.] GILBERTSON, Chief Justice, and KONENKAMP, ZINTER, and MEIERHENRY, Justices, concur.
[1] . Because the record available for our review assumes joint ownership and joint liability, and Paulson and Heartland argue nothing to the contrary, we assume judgment was properly entered against both.
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