STB Jurisdiction Over Intrastate Passenger Rail

Originally published by Justin Marks.

In Florida, All Aboard Florida, a private entity, is about to launch passenger rail service from Miami to West Palm Beach, with future service extending to Orlando. In California, the California High-Speed Rail Authority is currently constructing a high-speed passenger rail line with the long-term goal of connecting the metro areas of San Francisco and the Los Angeles.  These projects have a common denominator: each envisions intercity passenger rail service entirely within one state.  But when it comes to economic regulation by the federal government, these projects are treated differently by the Surface Transportation Board (the “STB”).

STB jurisdiction carries with it preemption of state and local remedies, so STB regulation of an intrastate project can have a significant impact.  Not all proponents of intrastate projects want STB jurisdiction.  But, for those that do, preemption carries with it a powerful tool against would be project opponents.

STB Jurisdiction under ICCTA

STB jurisdiction over transportation by rail carrier is governed by 49 USC § 10501(a), enacted under the Interstate Commerce Commission Termination Act (“ICCTA”).  The STB’s jurisdiction “applies only to transportation in the United States between a place in …a State and a place in the same or another State as part of the interstate rail network.[1]  Under ICCTA, Congress specifically granted the STB authority over intrastate rail transportation if the transportation is part of the interstate rail network.

The question then becomes, how does the STB decide that an intrastate passenger rail project is part of the interstate rail network?  To answer this question, the STB applies a factoring test.[2]  Factors the STB will consider include whether the rail carrier will operate within a single state, whether the rail carrier will interchange with Amtrak (an interstate rail carrier), whether the rail carrier will arrange through ticketing with Amtrak, or whether the system is interconnected with Amtrak through use of the same stations.

All Aboard Florida

Applying those factors to the Florida project mentioned above, the STB concluded that it did not have jurisdiction because the project was not part of the interstate rail network.[3]  The Board considered the following factors that weighed against asserting its jurisdiction:

• The project would conduct operations entirely within the state of Florida;
• All passengers will board and deboard at local stations;
• The fact that the project would serve local airports did not weigh toward a determination that it was part of the interstate rail network. Additionally, the fact that the line is to be constructed within the freight corridor of an STB regulated freight railroad, the Florida East Coast Railway (“FECR”), on track owned by the FECR did not sufficiently connect it to the interstate rail network. Nor did the fact that FECR will dispatch the passenger trains cause the STB to consider extending its jurisdiction over the project.

California High-Speed Rail Authority

In the STB’s California High-Speed Rail Authority (“CHSRA”) decision[4], the STB concluded that a proposed intrastate high speed rail system was sufficiently connected to the interstate rail system to warrant STB jurisdiction over the project.  The STB’s conclusion relied on a factoring analysis that gave significant weight to the CHSRA’s relationship with Amtrak.

Several factors in the CHSRA proposal weighed against a determination that the project was sufficiently connected to the interstate rail network to justify STB jurisdiction.  First, the CHSRA proposal lies entirely within the state of California.  Second, the CHSRA had no agreement with Amtrak to permit through ticketing for the CHSRA project.

Despite the intrastate nature of the transportation and the lack of a thru-ticketing agreement with Amtrak, the STB determined that other aspects of the CHSRA’s proposal provided sufficient interconnectivity with Amtrak as to conclude that the proposed project was connected to the interstate rail network and justified STB jurisdiction.  The STB cited the CHSRA business plan and environmental documents to demonstrate the CHSRA planned to integrate with Amtrak through a “blended” approach to the construction and operation of the project.  This blended approach proposed:

• Operating Amtrak’s San Joaquin service operating over the CHSRA tracks;
• Locating CHSRA’s stations in Los Angeles, Sacramento, and San Jose so that the CHSRA project interconnected with Amtrak stations.

The STB distinguished the facts from the CHSRA project with those from its All Aboard Florida decision.  The STB said that it did not have jurisdiction over the Florida project “because the proposed rail line would serve only four local stations with no plans for through-ticketing and no connection to Amtrak or any other rail carriers.”

Conclusion

In determining whether it has jurisdiction, the STB views some type of arrangement with Amtrak as a factor because Amtrak is an interstate rail carrier.  But, the STB has not had the opportunity to consider a case where the intrastate passenger rail project holds an arrangement with some other type of interstate carrier.  Must the intrastate passenger rail project connect to another interstate railroad?  What if the intrastate project stopped at an airport and offered through ticketing with an interstate airline?  It might be a tough argument to sell to an agency primarily focused on transportation by rail, but with the right facts, the STB may be willing to extend its jurisdiction to an intrastate passenger rail carrier that connects to interstate commerce beyond Amtrak.

[1] 49 USC § 10501(a).
[2] All Aboard Florida – Operations LLC and All Aboard Florida – Stations Construction and Operation Exemption – In Miami, Fla. And Orlando, Fla., STB Finance Docket 35680, slip op at 3 (STB served Dec. 21, 2012).
[3] Id.
[4] California High-Speed Rail Authority – Construction Exemption – in Merced, Madera & Fresno Counties, California,  STB Finance Docket No. 35724 (STB served June 13, 2013)(“CAHRSA Decision”).

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