The Board Declines to Issue a Declaratory Order, But Offers Guidance, Regarding Preemption of Certain Provisions of the Clean Water Act

The Surface Transportation Board (the Board or STB) issued a decision on December 30, 2020, denying a request by the Association of American Railroads (AAR) for a declaratory order regarding preemption of the Clean Water Act’s (CWA) National Pollutant Discharge Elimination System (NPDES) permitting program and discharge prohibition.  Ass’n of Am. R.R.—Pet. for Declaratory Order, FD 36369 (STB served Dec. 30, 2020).

On November 27, 2019, AAR had filed a petition for a declaratory order requesting that the Board find that “the preemption provision of the Interstate Commerce Act, 49 U.S.C. § 10501(b), as amended by the ICC Termination Act of 1995 (ICCTA), preempts two provisions of the CWA—[the] NPDES permitting program, 33 U.S.C. § 1342 and the discharge prohibition, 33 U.S.C. § 1311—as applied to discharges incidental to the operation of rail cars in transit.”  Id., slip op. at 1.  The Board instituted a proceeding on February 19, 2020 to consider AAR’s petition.  Ass’n of Am. R.R.—Pet. for Declaratory Order, FD 36369 (STB served Feb. 19, 2020).

In the December 30, 2020 decision, the Board explained that, under 49 U.S.C. § 10501(b), the jurisdiction of the Board over transportation by rail carriers is exclusive.  Section 10501(b) explicitly states that “the remedies provided under [49 U.S.C. §§ 10101-11908] with respect to regulation of rail transportation are exclusive and preempt the remedies provided under Federal or State law.”  When a federal law, such as the CWA potentially conflicts with the purposes of § 10501(b), the Board or a court is required to “strive to harmonize the two laws, giving effect to both laws  if possible.”  Ass’n of Am. R.R.—Pet. for Declaratory Order, FD 36369 (STB served Dec. 30, 2020).  Id., slip op. at 3 (internal citations omitted).

            The Board further explained that the CWA prohibits the discharge of any amount of a pollutant from a point source into navigable waters without a permit.  Id. (internal citations omitted).  Permits for discharges of pollutants are issued under the NPDES permitting program.  Id.  The Environmental Protection Agency (EPA) is permitted to authorize qualified states to administer all or part of the NPDES program.  Id.  The Board noted that “[n]either EPA nor any state has ever applied the NPDES permitting program to rail cars in transit.”  Id., slip op. at 5.

            In the petition for a declaratory order, AAR argued that the decision in Sierra Club v. BNSF Railway, No. 2:13-cv-00967 (W.D. Wash. Oct. 25, 2016), in which the court held that the rail cars in transit in that case were a point source subject to the CWA’s discharge prohibition and that the railroad could be liable for those discharges if the plaintiffs could establish that the discharges occurred, “created uncertainty regarding the application of the CWA to incidental discharges from rail cars in transit.”  Id.  According to AAR, the Board should resolve this uncertainty through a declaratory order.  Id.

In response, the Board determined that issuance of a declaratory order is premature.  Id., slip op. at 10.  The Sierra Club decision ended in settlement, and no party to the current proceeding had suggested that future enforcement efforts are planned or likely to occur.  Id.  Additionally, no state has proposed any regulation regarding discharges from rail cars in transit.  Id.  Nevertheless, the Board provided guidance “explain[ing] that the NPDES permitting program and discharge prohibition would likely be preempted by 49 U.S.C. § 10501(b) if applied to discharges incidental to the operation of rail cars in transit.”  Id., slip op. at 1.

According to the Board, “if individual states (and the EPA in those jurisdictions in which it administers the NPDES program) were to apply the NPDES permitting program to discharges from the incidental operation of rail cars in transit, it would likely result in a patchwork of differing regulations that cannot be harmonized with § 10501(b) and therefore would likely be preempted.”  Id., slip op. at 10.  The Board noted that the preemption issue would be ripe for review “[i]f there is any attempt in the future to establish NPDES permit requirements or enforce the discharge prohibition on discharges incidental to the operation of rail cars in transit.”  Id.  The Board further noted that a nationwide uniform general NPDES permit for incidental discharges from rail cars in transit that did not result in a patchwork of different regulations might not be preempted.  Id., slip op. at 15.

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