ASSOCIATION OF AMERICAN No. 2:23-cv-01154-DJC-JDP RAILROADS and AMERICAN SHORT LINE ASSOCIATION, Plaintiffs, v. LIANE M. RANDOLPH, in her official capacity as Chair of the California Air Resources Board; STEVEN S. CLIFF, in his official capacity as Executive Officer of the California Air Resources Board; and ROB BONTA, in his official capacity as Attorney General of the State of California, Defendants, and EAST YARD COMMUNITIES FOR COLLECTIVE FOR ENVIRONMENTAL JUSTICE, and SIERRA CLUB, Defendant-Intervenors.
Pending before this Court is Defendants Liane M. Randolph, Steven S. Cliff, and
Rob Bonta’s Motion to Dismiss Plaintiffs Association of American Railroads (“AAR”) and
American Short Line and Regional Railroad Association’s (“ASLRRA”) Amended
Complaint. (ECF No. 20.)
For the reasons set forth below, the Court will GRANT Defendants’ Motion in
part, and DENY it in part.
BACKGROUND1
I. California’s Locomotive Regulation
The California Air Resources Board (“CARB”) recently adopted an “In-Use
Locomotive Regulation” (“Regulation”) on April 27, 2023, the final version of which
was submitted to the California Office of Administrative Law (“OAL”) on September
15, 2023. (First Am. Compl. (“FAC”) (ECF No. 18) ¶ 1.) As amended, the Regulation
has four primary components, all of which target railroad operations: (1) the Spending
Account; (2) the In-Use Operational Requirements; (3) the Idling Requirements; and
(4) the Reporting and Recordkeeping Requirements. (Id. ¶¶ 42–63.) There is also an
Administrative Payment Provision. (Id. ¶ 50.)
1 The Court grants Defendants’ unopposed Request for Judicial Notice in Support of their Motion to Dismiss (“Defendants’ RNJ”). (ECF No. 21.) Specifically, the Court finds that Exhibits A and D of Defendants’ RJN are the proper subject of judicial notice, as the facts for which they are relied on “can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201. Further, the Court finds that Exhibits B, C, E, and F of Defendants’ RJN are proper subjects of judicial notice as they are publicly available on government websites and the facts for which they are relied upon can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned. See Daniels-Hall v. Nat’l Educ. Ass’n, 629 F.3d 992, 998–99 (9th Cir. 2010) (stating that it was appropriate to take judicial notice of information “made publicly available by government entities” on their websites where “neither party disputes the accuracy of the web sites or the accuracy of the information displayed herein”). The Court also grants Plaintiffs’ unopposed Request for Judicial Notice in Su pport of Their Opposition to Defendants’ Motion to Dismiss (“Plaintiffs’ RJN”). (ECF No. 28.) The Court finds that Exhibits A and B of Plaintiffs’ RJN are the proper subjects of judicial notice as the documents are publicly available on a government website, see Daniels-Hall, 629 F.3d at 998–99, and the facts for which they are relied on “can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201. Finally, Exhibit C of Plaintiffs’ RJN is also the proper subject of judicial notice because the fact for which it is relied on “can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201. Spending Account (§ 2478.42): By July 1, 2026, railroads must “establish a
Spending Account” into which they must make annual deposits “solely dedicated to
compliance with the Spending Account requirements.” § 2478.4(a)–(b); FAC ¶¶ 43,
46. The amount that a railroad must deposit is calculated based on its locomotive’s
emissions in California the previous calendar year. § 2478.4(f); FAC ¶ 44. Spending
Account funds are subject to purchase restrictions: they may be spent only to
purchase, lease, or rent clean locomotives; to convert dirtier locomotives into clean
ones; to purchase, lease or rent zero-emission equipment or infrastructure; or for
zero-emission pilot projects and demonstrations. § 2748.4(d); FAC ¶ 47.
In-Use Operational Requirements (§ 2478.5): Beginning in 2030, any
locomotive that is “23 years or older,” as determined by its original engine build date,
is banned from operating in California unless the locomotive has not exceeded a
specified quantity of energy usage over its lifetime or exclusively operates in a zero-
emission configuration3 (“ZE Configuration”) within California. § 2478.5(a); FAC ¶ 52.
The Regulation also sets dates after which all locomotives with engines built after
specified years—2030 for many locomotives and 2035 for those that haul freight long
distances—must operate “in a ZE Configuration at all times while in California.”
§ 2478.5(b)–(c); FAC ¶¶ 54–55.
Idling Requirements (§ 2478.9): The Idling Requirements, which take effect
immediately, regulate several aspects of a locomotive’s function and maintenance.
The Environmental Protection Agency (“EPA”) has long required locomotive
manufacturers to install automatic engine stop/start (“AESS”) devices on new
locomotives that shut down the engine “after no more than 30 continuous minutes of
idling.” 73 Fed. Reg. 25098, 25125 (May 6, 2008); Mot. Dismiss at 3. The Regulation
2 The Regulation is codified at Cal. Code Regs., tit. 13, §§ 2478–2478.17. Unless otherwise noted, all citations of regulatory provisions refer to that title. 3 In ZE Configuration, a locomotive emits no pollution of any kind—either because it is a zero-emission locomotive (e.g., one that runs exclusively on electricity or hydrogen fuel cells) or because it can use either a diesel engine or a zero-emission power source to run its electric motor and uses the latter in California. (FAC ¶ 49; Mot. Dismiss at 3 n.1.) requires operators to keep these idling devices in working condition. Specifically, the
Regulation prohibits railroads from disabling an AESS device unless necessary for
maintenance and requires railroads to ensure the AESS device is functional during
locomotive operation, with an obligation to replace or repair an inoperative AESS
device within 30 days. § 2478.9(b)–(c); FAC ¶ 58. In addition, the Regulation imposes
idling limits, such that locomotive operators must “ensure an AESS equipped
Locomotive Engine is shut off no more than 30 minutes after the Locomotive becomes
stationary” (subject to narrow exceptions), § 2478.9(a), and must “manually shut off”
the engine “no more than 30 minutes after the Locomotive becomes stationary” when
an AESS device is inoperative, § 2478.9(c)(2). (FAC ¶ 57.)
Reporting and Recordkeeping Requirements (§ 2478.11): Beginning July 1,
2026, locomotive operators must annually report a host of emissions information for
non-zero emissions locomotives, § 2478.11(b)(2), which are used to calculate
Spending Account deposits, § 2478.4(f); the “time, date, location, and duration of
each instance” an AESS-equipped locomotive “idled for longer than 30 minutes in
California,” § 2478.11(b)(3)(A); and an itemized list of the description and location of
each item purchased with the Spending Account, § 2478.11(c)(6). (FAC ¶¶ 60–63.)
Administrative Payment Provision (§ 2478.12): The Administrative Payment
Provision authorizes CARB to collect an annual payment of $175 per locomotive, with
certain limited exceptions. § 2478.12; (FAC ¶ 50.) The Administrative Payment
provision is due with the railroads’ submission of their annual emissions report.
§ 2478.12.
II. Regulation of Locomotive Emissions under the Clean Air Act
The Clean Air Act (“CAA”) (codified at 42 U.S.C. 7401 et seq.) requires the EPA
to establish emissions standards for “new” locomotives. 42 U.S.C. § 7547(a)(5). The
EPA’s regulations provide that a locomotive ceases to be “new” when the earlier of
two events occurs: (1) the locomotive’s equitable or legal title is transferred to an
ultimate purchaser,4 or (2) the locomotive is placed into service (or back into service if
the locomotive has been remanufactured). 40 C.F.R. § 1033.901. Congress has
prohibited states from setting standards for “new” locomotives, 42 U.S.C.
§ 7543(e)(1)(B), but permits states to regulate non-new locomotive emissions, subject
to the EPA’s approval. Specifically, under section 209(e)(2)(A) of the CAA, California is
permitted to adopt emissions “standards and other requirements” for “any nonroad
vehicles or engines other than those referred to in subparagraph (A) or (B),” 42 U.S.C.
§ 7543(e)(2)(A), where subparagraph (B) refers to “new locomotives,” id.
§ 7543(e)(1)(B). However, any such California regulations require authorization from
the EPA. Id. § 7543(e)(2)(A).
A section 209(e)(2)(A) authorization proceeding begins with a request from
California that includes the State’s determination that its nonroad vehicle “standards
will be, in the aggregate, at least as protective of public health and welfare as
applicable Federal standards.” 42 U.S.C. § 7543(e)(2)(A). The EPA must then consider
California’s request in a public proceeding. Id.; 40 C.F.R. § 1074.101(b). The CAA
provides three bases for denial: “(i) the determination of California is arbitrary and
capricious, (ii) California does not need such California standards to meet compelling
and extraordinary conditions, or (iii) California standards and accompanying
enforcement procedures are not consistent with this section.” 42 U.S.C.
§ 7543(e)(2)(A). If none of the three statutory bases for denial are established by the
record, the EPA “shall” grant the authorization. See id. The EPA’s action is reviewable
only in the appropriate Court of Appeals. Id. § 7607(b)(1).
III. Procedural History
On June 9, 2023, CARB first transmitted the Regulation to the OAL for review.
(FAC ¶ 80.) Soon after, Plaintiffs, who are associations representing both freight and
4 “Ultimate purchaser means the first person who in good faith purchases a new locomotive for purposes other than resale.” 40 C.F.R. § 1033.901. passenger railroads,5 filed this suit and moved for a preliminary injunction. (ECF Nos.
1, 8.) CARB withdrew the Regulation from OAL review, prompting Plaintiffs to
withdraw their motion for preliminary injunction. (FAC ¶ 81.) CARB then amended
and readopted the Regulation, leaving all the main substantive provisions in place
while moving back the effective date of some provisions (e.g., the deadline for the first
deposits into the Spending Account and the first annual emissions report) while
leaving others in place (e.g., the Idling Requirements, which come into force
immediately). (Id.) The Regulation became final under California law in October 2023
and is effective as of January 1, 2024. (Mot. Dismiss (ECF No. 20) at 5.) On November
7, 2023, CARB submitted a section 209(e)(2) authorization request to the EPA. (Id.;
Defendants’ RJN, Ex. D (ECF No. 21-1).)
Plaintiffs filed their Amended Complaint on October 13, 2023, bringing four
causes of action for declaratory/injunctive relief. Specifically, Plaintiffs allege: (1) the
Interstate Commerce Commission Termination Act (“ICCTA”) preempts the Regulation
in its entirety (FAC ¶¶ 93–103); (2) the CAA preempts the Spending Account and In-
Use Operational Requirements (id. ¶¶ 104–13); the Locomotive Inspection Act (“LIA”)
preempts the Idling Requirements (id. ¶¶ 114–18); and (4) the Regulation violates the
Dormant Commerce Clause (id. ¶¶ 119–24).
Defendants filed the pending Motion to Dismiss on November 10, 2023,
arguing: (1) Plaintiffs’ LIA preemption claim must be dismissed for lack of jurisdiction;
(2) Plaintiffs’ CAA preemption claim must be dismissed for lack of jurisdiction or failure
to state a claim; (3) Plaintiffs’ Amended Complaint must be dismissed under the
primary jurisdiction doctrine; (4) Plaintiffs have failed to state an ICCTA preemption
claim; and (5) Plaintiffs have failed to state a Dormant Commerce Clause claim. (See
generally Mot. Dismiss.)
5 Plaintiff AAR represents both freight and passenger railroads, and AAR’s members include some of the largest (Class I) and some of the smallest (Class III) railroads in the county. (FAC ¶¶ 12–16.) Plaintiff ASLRRA represents the interests of approximately 600 Class II and Class III railroads. (Id. ¶¶ 17–18.) Both Plaintiffs have members who own or lease and operate locomotives within California. (Id. ¶ 18.) The Court held a hearing on January 18, 2024, with Brian Burgess and Hayes
Hyde appearing for Plaintiffs, and Margaret Meckenstock and Dylan Johnson
appearing for Defendants. The Court took the matter under submission.
A party may move to dismiss a complaint for “lack of subject matter jurisdiction”
under Federal Rule of Civil Procedure 12(b)(1). “The party asserting federal subject
matter jurisdiction bears the burden of proving its existence.” Chandler v. State Farm
Mut. Auto. Ins. Co., 598 F.3d 1115, 1122 (9th Cir. 2010). In a “facial attack” under Rule
12(b)(1), “the challenger asserts that the allegations contained in a complaint are
insufficient on their face to invoke federal jurisdiction.” Safe Air for Everyone v. Meyer,
373 F.3d 1035, 1039 (9th Cir. 2004). “The district court resolves a facial attack as it
would a motion to dismiss under Rule 12(b)(6): [a]ccepting the plaintiff's allegations as
true and drawing all reasonable inferences in the plaintiff's favor, the court determines
whether the allegations are sufficient as a legal matter to invoke the court's
jurisdiction.” Leite v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014). “By contrast, in a
factual attack, the challenger disputes the truth of the allegations that, by themselves,
would otherwise invoke federal jurisdiction.” Meyer, 373 F.3d at 1039. In resolving a
factual attack on jurisdiction, the district court may review evidence beyond the
complaint without converting the motion to dismiss into a motion for summary
judgment, and the court need not presume the truthfulness of the plaintiff’s
allegations. White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000).
A party may also move to dismiss for “failure to state a claim upon which relief
can be granted.” Fed. R. Civ. P. 12(b)(6). The motion may be granted only if the
complaint lacks a “cognizable legal theory or sufficient facts to support a cognizable
legal theory.” Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir.
2008). The court assumes all factual allegations are true and construes “them in the
light most favorable to the nonmoving party.” Steinle v. City & County of San
Francisco, 919 F.3d 1154, 1160 (9th Cir. 2019). However, if the complaint's allegations do not “plausibly give rise to an entitlement to relief” the motion must be
granted. Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). A complaint need contain only a
“short and plain statement of the claim showing that the pleader is entitled to relief,”
Fed. R. Civ. P. 8(a)(2), not “detailed factual allegations,” Bell Atl. Corp. v. Twombly, 550
U.S. 544, 555 (2007). However, this rule demands more than unadorned accusations;
“sufficient factual matter” must make the claim at least plausible. Iqbal, 556 U.S. at
678. In the same vein, conclusory or formulaic recitations of elements do not alone
suffice. Id. “A claim has facial plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Id.
I. The Spending Account and In-Use Operational Requirements
Plaintiffs allege the Spending Account and In-Use Operational Requirements
are (1) preempted by the ICCTA, (2) preempted by the CAA, and (3) violate the
Dormant Commerce Clause. (FAC ¶¶ 95–97, 101–103, 105–113, 121–23.)
Defendants challenge Plaintiffs’ CAA preemption claim on ripeness grounds,
arguing there “is no case or controversy between the parties as to whether [the
Spending Account and In-Use Operational Requirements] are currently preempted by
CAA Section 209(e)(2)” because those sections seek to regulate locomotive emissions
and CARB must obtain EPA authorization prior to enforcement of those sections.
(Reply (ECF No. 39) at 2.) Defendants argue that the “parties agree that CARB cannot
presently enforce those requirements,” and point out that the Spending Account and
In-Use Operational Requirements cannot be enforced until July 2026 and January
2030, respectively, at the earliest. (Id. at 2–3.) Thus, Defendants argue there is no live
case or controversy for the Court to resolve because the EPA must approve the
Spending Account and In-Use Operational Requirements before they may be
enforced, and this Court cannot prejudge the outcome of the EPA proceedings.6 (Id.
at 3; Mot. Dismiss at 7–8.)
The Court finds that all of Plaintiffs’ claims concerning the Spending Account
and In-Use Operational Requirements, including Plaintiffs’ ICCTA preemption and
Dormant Commerce Clause claims, are not ripe. “The ‘basic rationale’ of the ripeness
requirement is ‘to prevent the courts, through avoidance of premature adjudication,
from entangling themselves in abstract disagreements.’” Portman v. County of Santa
Clara, 995 F.2d 898, 902 (9th Cir. 1993) (quoting Abbott Lab'ys v. Gardner, 387 U.S.
136, 148 (1967)). Ripeness involves both a constitutional and prudential component.
Coons v. Lew, 762 F.3d 891, 897 (9th Cir. 2014), as amended (Sept. 2, 2014). “The
constitutional component of the ripeness inquiry is often treated under the rubric of
standing and, in many cases, ripeness coincides squarely with standing's injury in fact
prong.” Thomas v. Anchorage Equal Rts. Comm’n, 220 F.3d 1134, 1138 (9th Cir.
2000); see also Susan B. Anthony List v. Driehaus, 573 U.S. 149, 157 n.5 (2014) (Article
III standing and ripeness issues often “boil down to the same question”). “In assuring
6 Defendants argue, in the alternative, that the primary jurisdiction doctrine applies and compels dismissal of Plaintiffs’ CAA preemption claim, reasoning the EPA’s determination as to whether the Spending Account and In-Use Operational Requirements fall within the scope of state regulation expressly anticipated by section 209(e)(2)(A) is a question of first impression that Congress has committed to the EPA. (Mot. Dismiss at 8–9.) Defendants also argue that dismissal of Plaintiffs’ CAA preemption claim under the primary jurisdiction doctrine necessitates dismissal of Plaintiffs’ LIA, ICCTA, and Dormant Commerce Clause claims as well, because any eventual approval by the EPA under the CAA will need to be harmonized with preemption under the LIA and ICCTA, as well as the limitations imposed by the Dormant Commerce Clause. (Id. at 9.) The primary jurisdiction doctrine allows courts to stay proceedings or to dismiss a complaint without prejudice pending the resolution of an issue within the special competence of an administrative agency. Clark v. Time Warner Cable, 523 F. 3d 1110, 1114 (9th Cir. 2008). The doctrine is a “prudential” one, under which a court determines that an otherwise cognizable claim implicates technical and policy questions that should be addressed in the first instance by the agency with regulatory authority over the relevant industry rather than by the judicial branch. Id. While this would appear to be a paradigmatic case for application of the primary jurisdiction doctrine over the CAA claims, as explained below, Defendants admit they cannot enforce the Spending Account and In-Use Operational Requirements absent EPA approval. Accordingly, the Court will dismiss all cla ims concerning those provisions, including Plaintiffs’ CAA preemption claim, for lack of ripeness. (Reply at 2–3.) As the Court lacks jurisdiction over Plaintiffs’ CAA preemption claim, the Court need not consider whether the primary jurisdiction doctrine applies. Concerning the Idling Requirements, Reporting and Recordkeeping Requirements, and Administrative Payment Provision, Defendants do not argue those provisions require EPA approval under section 209(e)(2)(A) to be enforced. Accordingly, the Court does not see how resolution of claims related to those provisions falls within the special competence of the EPA, or would need to be harmonized with EPA approval, and declines to exercise the primary jurisdiction doctrine accordingly. that this jurisdictional prerequisite is satisfied, [courts] consider whether the plaintiffs
face a realistic danger of sustaining direct injury as a result of the statute's operation or
enforcement.” Thomas, 220 F.3d at 1139 (internal quotation marks omitted). A
plaintiff's injury must be “concrete, particularized, and actual or imminent; fairly
traceable to the challenged action; and redressable by a favorable ruling.” Coons,
762 F.3d at 897 (quoting Clapper v. Amnesty Int'l USA, 568 U.S. 398, 409 (2013).)
Although “imminence is concededly a somewhat elastic concept,” it should not be
stretched beyond its purpose, which is to “ensure that the alleged injury is not too
speculative for Article III purposes.” Id. (quoting Clapper, 568 U.S. at 409). Thus,
courts have repeatedly held “that allegations of possible future injury are not
sufficient.” Id. (quoting Clapper, 568 U.S. at 409) (emphasis in original).
Here, Plaintiffs cannot show that enforcement of either the Spending Account
or In-Use Operational Requirements is sufficiently concrete or imminent for Article III
ripeness purposes. Defendants concede that California cannot enforce these
requirements absent EPA approval, and there is no clear timetable for EPA review.
And critically, EPA approval is far from guaranteed. As Plaintiffs themselves argue,
“[u]ntil April 2023, CARB had never issued rules directly regulating aspects of railroad
operations or locomotive emissions” (FAC ¶ 6) because CARB has historically
recognized it lacked authority to regulate railroad operations and emissions (FAC
¶¶ 71–84).
Indeed, CARB faces two hurdles with EPA’s review. As an initial matter, the EPA
is required to consider Plaintiffs’ arguments that the Spending Account and In-Use
Operational Requirements constitute an attempt to regulate “new” engines, which
California is absolutely prohibited from doing. (Opp’n at 6–7; FAC ¶¶ 107, 110–11.)
Specifically, the EPA may deny a requested authorization if “California standards and
accompanying enforcement procedures are not consistent with [section 209 of the
CAA].” 42 U.S.C. § 7453(e)(2)(A)(iii). The EPA’s regulations interpret this text as
requiring California’s regulatory program to be “consistent with section 209(a), section 209(e)(1), and section 209(b)(1)(C),” meaning, inter alia, that California may not
“regulate engine categories that are permanently preempted from state regulation”
under Section 209(e)(1), including new locomotives. 80 Fed. Reg. 76,685, 76,686
(Dec. 10, 2015) (emphasis added); see also 88 Fed. Reg. 77,004, 77,007–08 (Nov. 8,
2023) (EPA will consider whether California regulations are “prohibited by section
209(e)(1)(B)”). As California has never directly attempted to regulate emissions from
locomotives, the EPA has not yet clearly defined the line between new and non-new,
as evidenced by the Parties own arguments. (See Reply at 6 (“Plaintiffs assert EPA’s
definition does not determine the line between ‘new’ and ‘non-new[,]’ [b]ut they
identify no alternative place to draw that line.”).)
Even if the EPA concludes California is not regulating “new” locomotives, the
EPA must still consider whether to grant authorization for the Spending Account and
In-Use Operational Requirements under the other two statutory bases for denial, i.e.,
whether “the determination of California is arbitrary and capricious,” and
whether “California does not need such California standards to meet compelling and
extraordinary conditions,” 42 U.S.C. § 7543(e)(2)(A), which again, will be a question of
first impression for the EPA. The significant uncertainty over whether and when the
Spending Account and In-Use Operational Requirements will become enforceable
compels the conclusion that claims concerning these sections of the Regulation are
unripe at this juncture. See Hodgers-Durgin v. De La Vina, 199 F.3d 1037, 1044 (9th
Cir. 1999) (en banc) (“A claim is not ripe for adjudication if it rests upon contingent
future events that may not occur as anticipated, or indeed may not occur at all.”
(quoting Texas v. United States, 523 U.S. 296, 300 (1998))).
Accordingly, the Court dismisses Plaintiffs’ first cause of action (ICCTA
preemption), second cause of action (CAA preemption), and fourth cause of action
(Dormant Commerce Clause) as to the Spending Account and In-Use Operational
Requirements, without prejudice to renewal of these claims at a more appropriate
date. II. The Idling Requirements
Plaintiffs allege the Idling Requirements are (1) preempted by the ICCTA,
(2) preempted by the LIA, and (3) violate the Dormant Commerce Clause. (FAC ¶¶ 95,
98, 101–03, 116–18, 121–23.)
The Idling Requirements regulate both (1) locomotive equipment and
(2) locomotive operation. Plaintiffs allege that the equipment regulation aspect of the
Idling Requirements is preempted by the LIA, which “occup[ies] the entire field of
regulating locomotive equipment,” Kurns v. R.R. Friction Prods. Corp., 565 U.S. 625,
631 (2012) (quoting Napier v. Atl. Coast Line R.R. Co., 272 U.S. 605, 611 (1926)),
because it requires locomotive operators to keep EPA-mandated AESS equipment on
their locomotives, and to ensure that the equipment remains in working order. (FAC
¶¶ 116–17.) Plaintiffs allege that the locomotive operation aspect of the Idling
Requirements is preempted by the ICCTA, which “expressly preempts ‘a wide range
of state and local regulation of rail activity,’” Swinomish Indian Tribal Cmty. v. BNSF Ry.
Co., 951 F.3d 1142, 1152 (9th Cir. 2020) (quoting Ass'n of Am. R.Rs. v. S. Coast Air
Quality Mgmt. Dist. (“AAR”), 622 F.3d 1094, 1096–97 (9th Cir. 2010), because it
“mandate[s] that railroads shut off their locomotives (with limited exceptions) within 30
minutes of the locomotive becoming stationary” which “has the effect of managing or
governing rail transportation.” (FAC ¶ 98.) Finally, Plaintiffs allege that the Idling
Requirements generally violate the Dormant Commerce Clause as the Regulation’s
burdens on interstate commerce are excessive in relation to the Regulation’s local
benefits. (Id. ¶¶ 119–23.)
Defendants argue Plaintiffs lack standing to challenge the locomotive
equipment aspect of the Idling Requirements under the LIA because they have not
alleged any of their members intends to violate these requirements by removing
idling devices for purposes other than maintenance, or leaving devices inoperable for
more than 30 days after discovering a malfunction. (Mot. Dismiss at 6.) According to
Defendants, such conduct is already prohibited by federal law. Thus, Defendants argue it is unclear how any member is “imminently injured by a prohibition against
taking either of those actions.” (Id.)
The Court finds Plaintiffs lack standing as to their LIA preemption claim.
Typically, in a pre-enforcement challenge such as this one, plaintiffs must allege “a
concrete plan to violate the law in question” in order to establish “a realistic danger of
sustaining a direct injury.” Thomas, 220 F.3d at 1139 (internal quotations omitted).
While the plan need not be cast in stone, it must be more than a hypothetical intent to
violate the law.7 Arizona v. Yellen, 34 F.4th 841, 850 (9th Cir. 2022). Plaintiffs have
alleged no such intent here.
Plaintiffs argue their injury stems not from the risk of enforcement, however, but
rather economic harm, as the Regulation requires Plaintiffs’ members to ensure AESS
equipment remains in working order, forcing Plaintiffs’ members to incur incremental
operating and training costs to comply. (Opp’n (ECF No. 26) at 15.) As Plaintiffs
argue, these are classic pocketbook injuries sufficient to create standing. See Clark v.
City of Lakewood, 259 F.3d 996, 1007 (9th Cir. 2001) (“The Court routinely recognizes
. . . economic injury resulting from governmental actions . . . as sufficient to satisfy the
Article III ‘injury in fact’ requirement.” (quoting Clinton v. City of New York, 524 U.S.
417, 432-33 (1998)).)
However, Plaintiffs fail to sufficiently allege this pocketbook injury in their
Amended Complaint, stating only “[o]nce the Regulation becomes effective, Plaintiffs’
members will be forced immediately to follow the Idling Requirements.” (FAC ¶ 85.)
Plaintiffs attempt to substantiate their alleged pocketbook injury by pointing to
declarations submitted as part of their summary judgment papers. (See Opp’n at 15.)
Reference to material outside the Complaint, however, cannot rebut a facial attack on
standing. See Savage v. Glendale Union High Sch., 343 F.3d 1036, 1039 n.2 (9th Cir.
7 However, a plaintiff who wishes to challenge a law is not required “to confess that he will in fact violate that law.” Susan B. Anthony List, 573 U.S. at 163; see also Yellen, 34 F.4th at 850. Rather, it is sufficient that “petitioners’ intended future conduct is arguably proscribed by the statute they wish to challenge.” Susan B. Anthony List, 573 U.S. at 162. 2003) (in evaluating a facial jurisdictional challenge, a court can only consider
“allegations in the complaint” to resolve the motion).
Even considering those declarations, however the Court agrees with
Defendants that Plaintiffs have failed to sufficiently allege or show an economic injury.
Given that federal law appears to already mandate the activity that falls under LIA
preemption (that is, the locomotive equipment aspects of the Regulation), Plaintiffs fail
to establish what operational and training costs their members already incur to
maintain AESS equipment, and what additional costs they will incur comply with the
Regulation. (See Reply at 1–2.) For example, as Defendants argued at the hearing, 40
C.F.R. 1068.101(b), which sets forth federal idling requirements, already prohibits
“everyone” from removing or rendering inoperative AESS equipment even after a
locomotive is sold to an ultimate purchaser. Thus, Plaintiffs must explain what
equipment maintenance costs the Idling Requirements impose on their members
beyond the costs they already incur to comply with federal regulations.
By contrast, Plaintiffs do have standing to bring their ICCTA and Dormant
Commerce Clause claims as these implicate the portions of the Idling Requirements
that regulate locomotive operation and impose new requirements on Plaintiffs’
members, and Defendants do not challenge Plaintiffs’ standing as to those claims. For
example, Plaintiffs claim the Idling Requirements are preempted by the ICCTA
because their members will now be required to comply with idling limits while
operating locomotives, i.e., ensuring an AESS-equipped locomotive is shut off no
more than 30 minutes after the locomotive becomes stationary, including a
requirement to manually shut off locomotives when devices that would ordinarily do
so are inoperable. (See FAC ¶ 98 (explaining the “Idling Requirements mandate that
railroads shut off their locomotives (with limited exceptions) within 30 minutes of the
locomotive becoming stationary . . . [which] has the effect of managing or governing
rail transportation.”; § 2478.9(c)(2) (“For the time an AESS is inoperative, the
Locomotive shall be manually shut off no more than 30 minutes after the Locomotive becomes stationary . . . .”).) Unlike the rules governing equipment maintenance,
which Defendants argue already apply to Plaintiffs under federal law, the idling limits
impose requirements on them beyond what is currently required by federal law (FAC
¶ 59), giving rise to standing as to that portion of the Idling Requirements.
Accordingly, the Court dismisses Plaintiffs’ third cause of action (LIA
preemption) with leave to amend. However, for the reasons set forth above, as well as
in Section III infra, the Court declines to dismiss Plaintiffs’ first cause of action (ICCTA
preemption) and fourth cause of action (Dormant Commerce Clause) as to the Idling
Requirements.
III. Reporting and Recordkeeping Requirements
Plaintiffs allege the Reporting and Recordkeeping Requirements are
(1) preempted by the ICCTA and (2) violate the Dormant Commerce. (FAC ¶¶ 95, 99,
101–03, 121–23.)
Defendants argue Plaintiffs have failed to state either facial ICCTA preemption
or facial Dormant Commerce Clause claims because they have not established there
are no set of circumstances under which the Regulation would be valid under United
States v. Salerno, 481 U.S. 739 (1987). (Mot. Dismiss at 12, 14.) Defendants also argue
Plaintiffs have not stated as-applied claims as Plaintiffs have failed to sufficiently
identify a “defined subset” of the Regulations’ applications that are preempted or
violate the Dormant Commerce Clause, and lack standing to do so because the Court
needs the participation of individual railroads in order to craft a workable remedy. (Id.
at 13–14; Reply Mot. Dismiss at 9.)
Under Salerno, a facial challenge to legislation “must establish that no set of
circumstances exists under which the Act would be valid.” 481 U.S. at 745; see also
Rosenblatt v. City of Santa Monica, 940 F.3d 439, 444 (9th Cir. 2019). By contrast, an
as-applied attack does not necessarily challenge the entire statute, focusing instead
on “only one of the rules in a statute, a subset of the statute's applications, or the
application of the statute to a specific factual circumstance,” under the assumption that the court can separate valid from invalid subrules or applications. Hoye v. City of
Oakland, 653 F.3d 835, 857 (9th Cir. 2011).
A. ICCTA Preemption
The ICCTA preempts all state and local laws and regulations impacting railroad
operations unless they are (1) “rules of general applicability,” and (2) “do not
unreasonably burden railroad activity.” AAR, 622 F.3d at 1098. As Plaintiffs argue, the
Regulation, including the Reporting and Recordkeeping Requirements, fails both
prongs of this test as it is not a generally applicable law but rather specifically targets
the railroad industry, and burdens the railroad industry by, among other things,
imposing “onerous recordkeeping and reporting obligations.” (See FAC ¶¶ 93–103.)
Defendants argue, however, that there are local railroads operating only in
California which fall outside the scope of ICCTA preemption. (Mot. Dismiss at 12–13.)
“In order for federal preemption to apply under the ICCTA, the activity in question
must first fall within the statutory grant of jurisdiction to the Surface Transportation
Board [(“STB”)].” Or. Coast Scenic R.R., LLC v. Or. Dep’t State Lands, 841 F.3d 1069,
1072 (9th Cir. 2016). For the STB to have jurisdiction, the relevant activity must be
“(1) ‘transportation’ (2) ‘by rail carrier’ (3) ‘as part of the interstate rail network.’” Id. at
1073 (quoting 49 U.S.C. § 10501(a)). Thus, Defendants argue the Regulation is not
preempted as to locomotives that do not form part of an interstate rail network.
Plaintiffs do not dispute that there are some locomotives operating in California
outside the scope of STB jurisdiction. (Opp’n at 10–11;) see, e.g., Napa Valley Wine
Train, Inc. Petition for Declaratory Ord., 7 I.C.C.2d 954, 969 (I.C.C. July 18, 1991);
Peninsula Corridor Joint Powers Board – Petition for Declaratory Ord., No. FD 35929,
2015 WL 4065035, at *3 (S.T.B. July 2, 2015) (Caltrain commuter passenger service).
Rather, Plaintiffs argue that they may assert a facial challenge which has the
characteristics of both a facial challenge and as-applied challenge where the
challenge “does not seek to strike [a law] in all its applications,” but reaches beyond
the facts of a particular case to invalidate a defined subset. (Opp’n at 12 (quoting Doe v. Reed, 561 U.S. 186, 194 (2010)). For such a hybrid claim, Plaintiffs argue they need
only satisfy the “standards for a facial challenge to the extent of that reach.” Id.
The Court finds that Plaintiffs have failed to successfully allege a facial
challenge. The Supreme Court has explained that while “[n]ormally, a plaintiff
bringing a facial challenge must ‘establish that no set of circumstances exists under
which the law would be valid,’ or show that the law lacks a ‘plainly legitimate sweep,’”
in the “First Amendment context . . . we have recognized ‘a second type of facial
challenge, whereby a law may be invalidated as overbroad if a substantial number of
its applications are unconstitutional . . . .” Ams. for Prosperity Found. v. Bonta, 141 S.
Ct. 2373, 2387 (2021) (citations omitted). However, the Ninth Circuit has noted that,
although the “Supreme Court and this court have called into question the continuing
validity of the Salerno rule in the context of First Amendment challenges,” in “cases
involving federal preemption of a local statute” the “rule applies with full force.” Sprint
Telephony PCS, L.P. v. County of San Diego, 543 F.3d 571, 579 n.3 (9th Cir. 2008) (en
banc); see also Puente Ariz. v. Arpaio, 821 F.3d 1098, 1104 (9th Cir. 2016) (“Whether
the ‘substantial number of applications’ test applies to facial preemption challenges
has not yet been decided by the Supreme Court. Without more direction, we have
chosen to continue applying Salerno.”). Here, Plaintiffs mount a federal preemption,
not First Amendment, challenge, and accordingly, Salerno applies. Under Salerno,
Plaintiffs have failed to demonstrate there are no set of circumstances under which the
Regulation would be valid. Thus, Plaintiffs have failed to plead a facial ICCTA
preemption claim.
However, the Court finds that Plaintiffs have standing to bring an as-applied
claim. An entity has associational standing where (1) “its members would otherwise
have standing to sue in their own right;” (2) “the interests it seeks to protect are
germane to the organization's purpose;” and (3) “neither the claim asserted nor the
relief requested requires the participation of individual members in the lawsuit.”
AlohaCare v. Hawaii, 572 F.3d 740, 747 (9th Cir. 2009). Although the first two requirements are constitutional in nature, the third is prudential. United Food & Com.
Workers Union Loc. 751 v. Brown Group, 517 U.S. 544, 555–57 (1996). Defendants
challenge the third requirement of Plaintiffs’ associational standing, arguing the Court
will need the participation of individual railroads in order to craft a workable remedy.
The Court agrees with Plaintiffs, however, that there is no prudential reason here for
preventing Plaintiffs from seeking relief on behalf of their members. In particular,
Plaintiffs seek only prospective equitable relief, which is ideally suited for
representational lawsuits. See, e.g., Oklevueha Native Am. Church of Haw., Inc. v.
Holder, 676 F.3d 829, 839 (9th Cir. 2012). Additionally, as the Ninth Circuit has
reasoned, what matters at the motion to dismiss stage is “that Plaintiffs' allegations are
sufficient to establish . . . associational standing,” and “concerns about the details of
injunctive relief may be addressed if the court ultimately awards Plaintiffs [a] remedy.”
Id.
Further, although Defendants argue Plaintiffs have failed to clearly identify a
“defined subset” of the Regulation’s applications that are preempted at this stage, this
is not a strict pleading requirement. Rather, as the Supreme Court has instructed, “the
distinction between facial and as-applied challenges is not so well defined that it has
some automatic effect or that it must always control the pleadings and disposition in
every case . . . . The distinction . . . goes to the breadth of the remedy employed by the
Court, not what must be pleaded in a complaint.” Citizens United v. Fed. Election
Comm'n, 558 U.S. 310, 331 (2010); see also Bucklew v. Precythe, 139 S. Ct. 1112, 1127
(2019) (“A facial challenge is really just a claim that the law or policy at issue is
unconstitutional in all its applications. So classifying a lawsuit as facial or as-applied
affects the extent to which the invalidity of the challenged law must be demonstrated
and the corresponding breadth of the remedy, but it does not speak at all to the
substantive rule of law necessary to establish a constitutional violation.” (citations and
quotations omitted)). Plaintiffs identify the subset of the Regulation that is preempted
as all railroad transportation within the STB’s exclusive jurisdiction; that is sufficient at
this stage.8 (Opp’n at 13; FAC ¶ 33.)
Accordingly, the Court will not dismiss Plaintiffs’ first cause of action (ICCTA
preemption) as to the Reporting and Recordkeeping Requirements.
B. Dormant Commerce Clause
“[T]he Commerce Clause . . . is in its negative aspect . . . a limitation on the
regulatory authority of the states. Thus, although a state has power to regulate
commercial matters of local concern, a state's regulations violate the Commerce
Clause if they are discriminatory in nature or impose an undue burden on interstate
commerce . . . .” Shamrock Farms Co. v. Veneman, 146 F.3d 1177, 1179 (9th Cir.
1998) (citations and internal quotations omitted).
Defendants argue that Plaintiffs have failed to state a facial Dormant Commerce
Clause claim under Salerno because some railroads operate locomotives only within
California, and “Plaintiffs do not and cannot explain how application of the Regulation
to those purely intrastate locomotives would require changes to other locomotives
that may cross state borders or would affect the nationwide fleets of other operators.”
(Mot. Dismiss at 14.) Defendants also contend that the Complaint fails to adequately
allege an impact on interstate commerce. (Id.)
As with Plaintiffs’ ICCTA preemption claim, the Court finds that Plaintiffs have
failed to state a facial Dormant Commerce Clause claim as Plaintiffs concede they “are
not seeking to invalidate applications of the law that do not affect interstate
commerce.” (Opp’n at 13–14.) However, for the reasons stated in Section III.A supra,
8 The Court acknowledg es that, as argued by Defendants at the hearing, proceeding with this defined subset may make crafting an ultimate remedy complex as the STB’s determinations of whether it has jurisdiction over a particular activity of a particular railroad can be fact intensive. (See Hr’g Tr. (ECF No. 44) at 30:8–31:4.) To the extent Plaintiffs wish to amend their ICCTA preemption claim and define a different or narrower defined subset at this juncture, they are welcome to do so. However, the Court does not see how imposing this requirement on Plaintiffs at this stage impacts the law that must be applied to the merits of Plaintiffs’ claims. Accordingly, the Court finds that Plaintiffs’ ICCTA preemption claim is sufficiently pled. the Court finds that Plaintiffs have standing to bring an as-applied claim, and that
Defendants’ “defined subset” concerns need not be addressed at this stage.9
Further, the Court finds that Plaintiffs’ allegations concerning the burdens the
Regulation, including the Reporting and Record Keeping Requirements, will place on
interstate commerce are sufficient to state a Dormant Commerce Clause claim at this
juncture. (See, e.g., FAC ¶¶ 91 (“[T]he railroads will need to commit resources to
comply with the Reporting and Recordkeeping Requirements well before July 2026
. . . in order to ensure their systems are capable of collecting and recording the
required information on locomotive usage and idling.”); 99 (the Reporting and
Recordkeeping Requirements “mandate that railroads collect extensive operational
data and report it to CARB” which will “impose significant burdens on the railroad
industry” as the industry “will need to make technological adaptations to collect the
necessary data.”); 121–23 (asserting the Regulation’s costs will impose “significant
burdens on interstate transportation” in a manner that “is clearly excessive in relation
to the putative local benefits”).) Given the fact-intensive nature of the balancing
required by Pike v. Bruce Church, Inc., 397 U.S. 137 (1970), dismissal at the pleading
stage is inappropriate. Cf. id. at 142 (“Where the statute regulates even-handedly to
effectuate a legitimate local public interest, and its effects on interstate commerce are
only incidental, it will be upheld unless the burden imposed on such commerce is
clearly excessive in relation to the putative local benefits.”); Nat’l Pork Producers
Council v. Ross, 143 S. Ct. 1142, 1157 (2023) (“While many of our dormant Commerce
Clause cases have asked whether a law exhibits facial discrimination . . . the Pike line
serves as an important reminder that a law’s practical effects may also disclose the
presence of a discriminatory purpose.” (citations and quotations omitted)).
Accordingly, the Court will not dismiss Plaintiffs’ fourth cause of action
(Dormant Commerce Clause) as to the Reporting and Recordkeeping Requirements.
9 For the reasons stated in fn.8 supra, Plaintiffs are free to amend their Dormant Commerce Clause claim to allege a defined subset more clearly at this stage, but the Court will not impose this requirement. IV. Administrative Payment Provision
Plaintiffs allege that the Administrative Payment Provision independently
violates the Dormant Commerce Clause as it “imposes an annual flat fee of $175 per
locomotive operated in California,” which “penalizes interstate travel and imposes an
impermissible burden on interstate commerce.” (Compl. ¶ 124.)
Defendants argue this claim must be dismissed as the Administrative Payment
Provision is a flat, per-locomotive charge to cover the costs of administering the
Regulation, a type of charge the Supreme Court previously approved in American
Trucking Associations, Inc. v. Michigan Public Service Commission (“Michigan”), 545
U.S. 429 (2005). (Mot. Dismiss at 15.)
The Court finds Plaintiffs have adequately stated a claim. In Michigan, the
Supreme Court approved an annual $100 flat fee for trucks that undertook point-to-
point hauls between Michigan cities. Id. at 431. The Court found that the flat fee did
not violate the Dormant Commerce Cause primarily because it was imposed only
intrastate transactions, finding the “statute applie[d] evenhandedly to all carriers that
make domestic journeys” and “does not reflect an effort to tax activity that takes place,
in whole or in part, outside the State.” Id. at 434 (“Nothing in our case law suggests
that such a neutral, locally focused fee or tax is inconsistent with the dormant
Commerce Clause.”).
Here, on the other hand, nothing in the Regulation suggests that the
Administrative Payment Provision applies only to intrastate transactions. Thus, while
the Court is skeptical that $175 is “clearly excessive” in relation to the Regulation’s
local benefit, see Pike, 397 U.S. at 142, the Court finds that Plaintiffs’ allegations
concerning the Administrative Payment Provision are sufficient at this stage. See
Magna Legal Servs. v. Ariz. ex rel. Bd. of Certified Reps., No. CV-13-00802-PHX-NVW,
2013 WL 4478933, at *7 (D. Ariz. Aug. 21, 2013) (“A more searching application of the
Pike balancing test in this case would necessarily involve weighing of facts involving
the purposes of the Regulations, the burden on interstate commerce they in fact create, if any, and whether other less burdensome alternatives were available. That balancing will be more finely calibrated once the Court has had the opportunity to consider actual evidence.”). Thus, the Court will not dismiss Plaintiffs’ fourth cause of action (Dormant Commerce Clause) as to the Administrative Payment Provision. In accordance with the above, it is hereby ORDERED Defendants’ Motion to Dismiss (ECF No. 20) is GRANTED IN PART. Specifically, the Court GRANTS DISMISSAL of: 1. Plaintiffs’ first, second, and fourth causes of action on ripeness grounds as to the Spending Account and In-Use Operational Requirements, without prejudice to renewal of these claims at a later date. 2. Plaintiffs’ third cause of action on standing grounds. Plaintiffs are granted leave to amend this claim within twenty-one (21) days. The Court DENIES DISMISSAL of: 1. Plaintiffs’ first and fourth causes of action as to the Idling Requirements, Reporting and Recordkeeping Requirements, and the Administrative Payment Provision. IT IS SO ORDERED. Dated: _ February 16, 2024 “Darel A Ch brett Hon. Daniel alabretta UNITED STATES DISTRICT JUDGE DJC4 - Ass'nAmRR23-cv-1154.MTD 99