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BNSF Railway Company v. Arizona Corporation Commission - 1/3/2012

Arizona Court of Appeals Division One Affirms Arizona Corporation Commission’s Authority over Installation of Horns at Railroad Crossings As Not Preempted by Federal Regulation.

The City of Flagstaff applied for permission from the Arizona Corporation Commission, the state agency responsible for grade crossing safety, to install audible warning devices, wayside horns, at various railroad crossings.  The Commission designated BNSF Railway Company, the railroad that operates over the affected crossings, as the respondent in that application; BNSF supported the City’s planned upgrades.  The Commission held hearings on the application and procedure for installing the wayside horns.  Throughout these hearings, BNSF objected to the Commission’s jurisdiction over the railroad crossing upgrades.  BNSF argued that the Federal Railroad Administration’s Train Horn Rules preempted the Commission.  The Commission approved the installation of the wayside horns, and the Superior Court affirmed that decision on BNSF’s appeal.

The court of appeals held that BNSF had standing to appeal the Commission’s decision because it was a party in interest that was dissatisfied by the Commission’s exercise of jurisdiction, even though the Commission ultimately sided with the City and BNSF on the merits of the application.  The court of appeals also held that the Commission was not preempted by the federal regulations concerning safety because they expressly provided that they did not preempt administrative procedures required by state law.  The process used by the Commission—including holding an evidentiary hearing, receiving briefs containing factual and legal positions, and rendering findings of fact and conclusions of law—qualified as an administrative procedure.  It was the inquiry underlying the process, and not the form of the process itself, which determined the nature of the process.  Because the Commission’s inquiry related to the engineering modifications of the railroad crossing, which was not preempted by federal regulation, it was an administrative procedure.

Judge Barker authored the opinion, Judges Timmer and Winthrop concurred.

Posted by: Chelsea Durkin

Posted On: 1/6/2012