NE Railroad v. Boston Maine et al

2008 DNH 218

• Court: District Court, D. New Hampshire
• Decided: December 31, 2008
• Docket: CV-07-403-JL
• Status: Published

Opinion

NE Railroad v . Boston Maine et al CV-07-403-JL 12/31/08 P UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

New England Southern Railroad Co.

v. Civil N o . 07-CV-403-JL Opinion n o . 2008 DNH 218 P

Boston and Maine Co., Springfield Terminal Railway Co., and Pan Am Railways, Inc.

O R D E R

This case involves this court’s jurisdiction under the

Interstate Commerce Commission Termination Act (ICCTA) over

common law breach of contract claims. The plaintiff, New England

Southern Railroad Co., asks the court to reconsider its dismissal

of the case for lack of subject matter jurisdiction. New England

S . R.R. C o . v . Boston and Maine Co., N o . 07-403-JL, 2008 WL

4449420 (D.N.H. Sept. 3 0 , 2008). After oral argument, and for

the following reasons, the plaintiff’s motion is denied.

“[A] motion for reconsideration should be construed as a

motion to alter or amend a judgment under Rule 59(e).” Marie v .

Allied Home Mtg. Corp., 402 F.3d 1 , 7 (1st Cir. 2005); see also

Fed. R. Civ. P. 59(e). To prevail on a Rule 59(e) motion, the

moving party must “demonstrate either that newly discovered

evidence (not previously available) has come to light or that the rendering court committed a manifest error of law.” Palmer v .

Champion Mtg., 465 F.3d 2 4 , 30 (1st Cir. 2006). The plaintiff

asks the court to rethink its prior order dismissing the

complaint because (1) the court wrongly construed 49 U.S.C. §

10501(b) to vest jurisdiction over its breach of contract claims

exclusively with the Surface Transportation Board (the “Board”);

and (2) even if the Board possessed discretionary authority to

hear its claims, the court should nonetheless exercise

jurisdiction because the Board regularly refuses to hear claims

for breach of contract.

As stated in the court’s prior order, New England S . R.R.,

2008 WL 4449420, at * 4 , the plaintiff bears the burden of

rebutting the presumption that a cause of action lies outside the

district court’s limited jurisdiction. See Kokkonen v . Guardian

Life Ins. C o . of Am., 511 U.S. 375, 377 (1994); see also United

States v . Coloian, 480 F.3d 4 7 , 50 (1st Cir. 2007). In

attempting to do s o , the plaintiff invokes a specific provision:

§ 10501(b) of the ICCTA.1 See 49 U.S.C. § 10501(b). The

uncompromising language of this statutory provision, however,

grants the Board exclusive jurisdiction over any case involving

1 The plaintiff cited this provision in the jurisdictional allegation in its complaint (document n o . 1 ) , in its objection to the motion to dismiss (document n o . 1 2 , pages 3 , 4 , and 6 ) , and in its motion for reconsideration (document n o . 1 5 , page 4 ) .

2 “transportation by rail carriers.” Id.; but see Pejepscot Indus.

Park v . M e . Cent. R.R., 215 F.3d 195, 201 (1st Cir. 2000) (noting

that “later sections of the ICCTA strongly suggest that certain

actions may be filed in federal district court”). As courts have

noted, “if Congress wishes to confer exclusive jurisdiction on a

federal administrative agency and divest the district courts of

that jurisdiction, it would be within its constitutional power to

do so.” MCI Telecomm. Corp. v . Teleconcepts, Inc., 71 F.3d 1086,

1109 (3d Cir. 1995); cf. Mississippi v . Louisiana, 506 U.S. 7 3 ,

77-78 (1992) (noting that a grant of exclusive jurisdiction to

one court “necessarily denies jurisdiction of such cases to any

other federal court”).

The remaining statutory provisions cited by the plaintiff

merely set forth a rail carrier’s obligation to furnish safe and

adequate service to rail cars, see 49 U.S.C. § 11121, and

establish the Board’s authority to set the rate of compensation

to be paid to hire these cars, see id. § 11122. The plaintiff

cites, and the court’s research reveals, no case in which these

provisions were held to divest the Board of its exclusive

jurisdiction over such matters, or to create concurrent

3 jurisdiction between the Board and federal courts.2 Indeed, in

the lone case where a court has expressly confronted the

propriety of federal jurisdiction premised upon either § 11121 or

§ 11122, jurisdiction was found to lie exclusively with the

Board. See DeBruce Grain, Inc. v . Union Pac. R.R., 983 F. Supp.

1280, 1283 (W.D. M o . 1997) (noting that § 10501(b) “bestows

exclusive authority upon the Board to impose remedies associated

with a carrier’s service, which would include a carrier’s

obligations under . . . 11121(a)(1)”).

In its final argument that jurisdiction lies in this court,

the plaintiff cites several District of Massachusetts cases in

support of the proposition “that the adjudication of Car Hire

claims alone convey[s] subject matter jurisdiction on this

Court.” In the plaintiff’s words, “this Court’s [jurisdictional

2 The only case cited by the plaintiff where jurisdiction was found based on the theory it has set forth, Clinchfield Railroad C o . v . Boston and Maine, 258 F.Supp. 467, 468 (S.D.N.Y.), is readily distinguishable from the matter before the court. In Clinchfield, the court held that “[i]t would be both illogical and inequitable were [a rail] carrier precluded from suing in federal court for [car hire] charges after having provided such car service under federal direction, and while itself being subject to liability in federal court.” Id. The Clinchfield case, however, was decided (1) well before the ICCTA was enacted in 1995, (2) under the ICCTA’s predecessor statute, the Interstate Commerce Act, and (3) while the railroad industry was under the jurisdiction of the Interstate Commerce Commission, a federal agency that was abolished and replaced by the Surface Transportation Board.

4 dismissal] puts it at odds with its sister court in and for the

District of Massachusetts,” which “has retained jurisdiction over

numerous Car Hire cases.” The court’s review of each of these

cases, however, reveals that they support no such conclusions.

The vast majority were settled early in the litigation process,

while the few remaining cases were either dismissed for reasons

unrelated to the plaintiff’s jurisdictional claim, or are still

pending before that court. Importantly, as the plaintiff

acknowledged at oral argument, none of the cases included

jurisdictional challenges, and the opinions contain no express

jurisdictional rulings regarding the breach of contract claims.

This court’s jurisdictional dismissal did not, as the

plaintiff argues, leave its contract claims “in a legal ‘no man’s

land.’”3 While the plaintiff is correct that “there is no

3 Although the plaintiff acknowledged this at oral argument, it correctly pointed out that the Board generally declines to adjudicate private contract disputes. See Burlington N., Inc. v . Chicago & N.W. Transp. Co., 649 F.2d 556, 558 (8th Cir. 1981)(“The ICC [the predecessor to the Board] has primary authority to determine its own jurisdiction.”). Indeed, the Board has previously issued an advisory opinion stating that Congress, by enacting the ICCTA, “expressly removed all matters and disputes arising from rail transportation contracts from the ICC’s (and now the Board’s) jurisdiction.” Interpretation of the Term “Contract” in 49 U.S.C. 10709, STB Ex Parte N o . 669, 2007 WL 934379, at *2 (Mar. 2 9 , 2007); see also PCI Transp., Inc. v . Fort Worth & W . R.R. Co., STB Docket N o . 42094 (Sub-1), 2008 WL 1840576, at *3 (Apr. 2 4 , 2008) (“transportation provided under a contract is not subject to the Act and may not be challenged before the Board or the courts on the grounds that the contract

5 provision in ICCTA expressly mandating [Board] jurisdiction over

contract claims such as those at issue here,” the ICCTA does

address jurisdiction over contracts entered into between rail

carriers. For example, the ICCTA expressly provides:

The exclusive remedy for any alleged breach of a contract entered into under this section[4] shall be an action in an appropriate State court or United States district court, unless the parties otherwise agree. This section does not confer original jurisdiction on the district courts of the United States based on section 1331 or 1337 of title 2 8 , United States Code.

49 U.S.C. § 10709(c)(2) (emphasis added). This provision

authorizes the bringing of claims for breach of a contract

entered into under the ICCTA in any court, state or federal,

which possesses an independent basis for original jurisdiction;

i.e., inter alia, a federal court sitting in diversity, see 28

U.S.C. § 1332(a), or a state court adjudicating an ordinary

common law contract dispute. Here, as complete diversity does

not exist between the parties to this action, see Olympic Mills

violates the Act”). Standing alone, however, the fact that the Board would likely refuse to adjudicate the plaintiff’s case does not confer jurisdiction on this court. 4 Contracts entered into under § 10709 include all contracts where “[o]ne or more rail carriers providing transportation subject to the jurisdiction of the Board under this part . . . enter into a contract with one or more purchases of rail services to provide specified services under specified rates and conditions.” 49 U.S.C. § 10709(a).

6 Corp. v . Rivera Siaca, 477 F.3d 1 , 6 (1st Cir. 2007), this court

lacks original jurisdiction, which expressly is not conferred by

§ 10709(c)(2). Accordingly, under § 10709(c)(2), the plaintiff’s

“exclusive remedy” for what it describes as its “contract” claim

is “an action in an appropriate State court . . . .” 5

Finally, the plaintiff has made it a point to correct the

court’s mischaracterization of its argument construing the ICCTA

to confer jurisdiction over its breach of contract claims on both

the Board and the courts.6 More accurately, the court should

have pointed out that the plaintiff’s argument, which appeared to

suggest that there was concurrent jurisdiction over its claims,

at least ostensibly invoked the reasoning employed by the court

of appeals in Pejepscot. See 215 F.3d at 199 (“despite the

description in § 10501(b) of the [Board]’s jurisdiction as

‘exclusive,’ other sections of the ICCTA permit the filing of

certain types of suits in federal district court”). To the

5 As stated in the court’s prior order, New England S . R.R., 2008 WL 4449420, at *9 n.4, the plaintiff’s state-law contract claims may be subject to federal preemption. The court expresses no opinion on this matter, but notes that the forum (i.e. state or federal court) has no bearing on federal preemption analysis. 6 The court has relied on the plaintiff’s opposition papers which both (1) acknowledged that the Board possessed “exclusive jurisdiction over ‘the remedies provided in this part’”; and (2) argued that the court possessed jurisdiction over its breach of contract claims. The plaintiff now makes clear that it never argued for concurrent jurisdiction.

7 extent that the plaintiff relies on Pejepscot as a jurisdictional

foothold, that case is of no help. In Pejepscot, the court of

appeals determined only that under § 11704(c)(1) of the ICCTA,

federal district courts and the Board possess concurrent

jurisdiction over a shipper’s claim that a rail carrier

unlawfully refused to provide rail service upon reasonable

request, an obligation imposed by § 11101(a). See id. at 197.

The reasoning employed in Pejepscot is inapposite here because,

among other reasons, the plaintiff has neither claimed that the

defendants violated a specific obligation imposed by the ICCTA,

nor invoked § 11704(c)(1) as a basis for jurisdiction.

After several attempts, the plaintiff still has not cited a

provision of the ICCTA that establishes federal district court

jurisdiction, concurrent or otherwise, over breach of contract

claims involving rail transportation. Absent a provision

expressly conferring such jurisdiction, the court will construe §

10501(b) to means what it says: jurisdiction over the plaintiff’s

claims does not lie in this court. The plaintiff’s motion for

reconsideration is denied, and the court’s dismissal stands.

SO ORDERED. /s/Joseph N . Laplante Joseph N . Laplante United States District Judge Date: December 3 1 , 2008 cc: Martin P. Honigberg, Esq. Kevin M. O’Shea, Esq. Michael J. Connolly, Esq.