Vt. Ry., Inc. v. Town of Shelburne

287 F. Supp. 3d 493
CourtDistrict Court, D. Vermont
DecidedDecember 7, 2017
DocketCase No.: 2:16–cv–16
StatusPublished
Cited by1 cases

This text of 287 F. Supp. 3d 493 (Vt. Ry., Inc. v. Town of Shelburne) is published on Counsel Stack Legal Research, covering District Court, D. Vermont primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Vt. Ry., Inc. v. Town of Shelburne, 287 F. Supp. 3d 493 (D. Vt. 2017).

Opinion

William K. Sessions III, District Judge

This case arises out of Plaintiff Vermont Railway's ("Railway") development of property located in Shelburne, Vermont for use as a salt transloading facility ("transloading facility" or "facility"). Currently before the Court is the Railway's Motion for Preliminary Injunction (ECF 209), which has been converted to a request for a permanent injunction. Among other things, the Railway now seeks an order permanently enjoining Defendant Town of Shelburne ("Town") from enforcing its recently enacted Ordinance Regulating the Storage, Handling and Distribution of Hazardous Substances ("Storage Ordinance").

The Town passed the Storage Ordinance along with an Ordinance to Regulate Motor Trucks on Town Highways ("Trucking Ordinance") on August 8, 2017.1 The Trucking Ordinance was passed with an immediate effective date, and the Storage Ordinance had an effective date of October 7, 2017. On August 9, 2017, the Town stated in a court filing that it would enforce these new ordinances as well as the Town's Zoning Bylaws2 and Subdivision Regulations against the Railway. ECF 199.

Among other actions, the Storage Ordinance allows the Town to impose daily fines on the Railway for violations of its salt storage and release restrictions, to issue "health orders" directing the Railway to remove the road salt, and to limit the amount of fuel and other commodities the *495Railway can temporarily store. The Court previously found that the facility would be used primarily for unloading bulk salt arriving by rail for local distribution by truck and for temporary storage in sheds pending distribution. ECF 84, p. 19. These regulations would impose severe restrictions on the Railway's ability to conduct its business.

The Court began a preliminary injunction hearing on September 25, 2017, but ultimately postponed the hearing and entered a Temporary Restraining Order ("TRO") preventing the Town from enforcing the Storage Ordinance during the intervening time.3 ECF 224. The Court held a two-day permanent injunction Hearing on November 1-2, 2017.

After considering the evidence and testimony presented at the hearing, as well as the post-hearing memoranda, the Court concludes that the Storage Ordinance is preempted by the Interstate Commerce Commission Termination Act ("ICCTA"). The Storage Ordinance does not fit within the police power exception to preemption, as detailed in Green Mountain R.R. Corp. v. Vt. , 404 F.3d 638, 643 (2d Cir. 2005) and Norfolk S. Ry. Co. v. City Of Alexandria , 608 F.3d 150, 160 (4th Cir. 2010), because (1) it discriminates against the Railway and (2) the significant burden it places on the Railway outweighs the Town's inconclusive and overstated public health and safety concerns. The Railway has satisfied the requirements for a permanent injunction because it has suffered an irreparable injury, remedies such as monetary damages will not suffice, the balance of the hardships tilts in its favor, and the public interest is not disserved by a permanent injunction. See eBay v. MercExchange, L.L.C. , 547 U.S. 388, 391, 126 S.Ct. 1837, 164 L.Ed.2d 641 (2006). Thus, the Court permanently enjoins the enforcement of the Storage Ordinance against the Railway and its facilities.

In the summer of 2016, the Court ordered the Town to identify precisely the regulations it intended to enforce against the transloading facility. ECF 84. Over a year later, the Town identified 21 pages of its Zoning Bylaws and Subdivision Regulations that it is seeking to enforce.4 ECF 199. For many of these provisions, it is impossible for the Court to conduct preemption and injunction analyses since it is not clear precisely which regulations the Town is seeking to enforce or which regulations the transloading facility is violating. Therefore, the Court is generally not going to address the Zoning Bylaws and Subdivision Regulations. However, these 21 pages the Town submitted to the Court include a section of the Zoning Bylaws entitled "Performance Standards," and §§ 1950.1 and 1950.2(A) under that heading have a very similar focus to that of the Storage Ordinance. See ECF 199, Ex. 6, p. 8. Thus, because §§ 1950.1 and 1950.2(A) of the Performance Standards are so similar to the Storage Ordinance, these two sections are preempted and permanently enjoined .

*496BACKGROUND

On June 29, 2016, the Court granted the Railway's request for a declaratory judgment that the ICCTA preempts the Town's pre-construction zoning regulations as applied to the facility.5 ECF 84. The Court held that "the construction and operation of the Railway's planned intermodal facility constitute 'transportation by [a] rail carrier[ ]' as defined by the ICCTA."6 Id. at 25. The Court denied the Town's request for contrary declaratory relief and a preliminary injunction. On September 17, 2016, the Town moved the Court for a temporary restraining order, for relief from this Court's June 29, 2016 Opinion and Order, for a stay of its appeal of that order, and for expedited discovery and a hearing. ECF 90. The Court held a five-day evidentiary hearing on the Town's motions on March 27-29 and April 3 and 5, 2017. On June 28, 2017, the Court issued an Opinion and Order denying the Town's motions and reaffirming its finding that the activity on the Shelburne property constitutes transportation by a rail carrier and is thus subject to preemption under the ICCTA. ECF 191.

In its June 29, 2016 order, the Court stated that "[w]hen the Railway has finalized its plans for development, and when the Town has indicated precisely which zoning regulations it intends to enforce, the Court will determine whether those regulations can survive ICCTA preemption pursuant to the police power exception." ECF 84, p. 3. The Railway produced copies of the final plan for development (ECF 85) on July 22, 2016, and requested that the Town identify which police powers, if any, it intended to enforce against the project. The Railway then constructed the first of the two planned salt storage sheds at the facility and began operations in late fall 2016. The Railway completed construction of the second salt shed in June 2017.

After the Town failed to specify the ordinances it intended to enforce for over a year, the Railway filed a Motion to Enforce on July 24, 2017 requesting an order that the Town comply with the Court's June 29, 2016 Order. ECF 196.

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Bluebook (online)
287 F. Supp. 3d 493, Counsel Stack Legal Research, https://law.counselstack.com/opinion/vt-ry-inc-v-town-of-shelburne-vtd-2017.