Courts are divided on whether federal regulations of rail carriers preempt state common law negligence claims against those carriers.^[1] Specifically, they split on whether such claims, which provide their own set of remedies, effectively regulate a rail carrier’s operations or rail transportation. If the answer to that question is yes, then they are preempted by the Interstate Commerce Commission Termination Act of 1995 (ICCT Act), and any remedy is limited to those that are listed therein.^[2] If the answer to that question is no, then such claims are not preempted. In June 2023, in Horton v. Kansas City Southern Railway Company, the Texas Supreme Court answered that question in the negative.^[3]

Two federal laws establish federal regulatory authority over the economic and safety aspects of rail carriers’ operations.^[4] The first, the ICCT Act, created the Surface Transportation Board (STB) and, among other things, vested the STB with exclusive jurisdiction over the remedies provided in the Act.^[5] Section 10501(b) of the ICCT Act further states that the Act’s remedies “with respect to regulation of rail transportation are exclusive and preempt the remedies provided under Federal or State law.”^[6] The second law, the Federal Rail Safety Act (Safety Act), vests the Secretary of Transportation with rail safety regulatory authority.^[7] But it permits states to adopt rail safety regulations that are “not incompatible with” the Secretary’s regulations and that “do[ ] not unreasonably burden interstate commerce.”^[8]

When sued for negligence by the children of a woman killed in a railroad crossing accident, the Kansas City Southern Railway Company (KC Southern) argued that the ICCT Act’s provisions preempted their claim regarding the crossing itself.^[9] The suit alleged that KC Southern negligently maintained the crossing by raising the tracks and crossing over time to form a “humped crossing” and negligently failed to replace a missing yield sign.^[10] Only a white, X-shaped crossbuck sign marked the tracks on each side of the crossing.^[11] At trial, in response to a single, broad-form negligence question, the jury found the decedent and KC Southern equally responsible for the accident.^[12] The jury did not specify, however, whether it considered KC Southern to have been negligent because of the humped crossing or because of the missing yield sign.^[13]

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The court of appeals reversed.^[14] Although the court held that sufficient evidence existed for a jury to find that the missing yield sign proximately caused the accident, it agreed with KC Southern’s argument that the ICCT Act’s provisions preempted the humped crossing claim.^[15] Since the court could not discern which theory the jury relied upon in reaching its verdict, the court reversed and remanded the case for a new trial solely on the negligence claim involving the yield sign.^[16]

On appeal, the Texas Supreme Court, in a unanimous opinion authored by Justice Jeff Boyd, reversed the lower court and held that the ICCT Act’s provisions did not preempt common law negligence claims concerning railroad crossing safety.^[17] The court, at least initially, held that a new trial was still necessary, but for a different reason.^[18] The court concluded that insufficient evidence existed for a jury to find that the absence of the yield sign proximately caused the decedent to enter the crossing as the train approached.^[19] Because the court could not determine which negligence theory the jury relied upon in reaching its verdict, the court held that the trial court’s use of a single, broad-form negligence question was not harmless error. In a possible about-face, however, the court has since vacated this portion of its judgment and granted rehearing regarding the sufficiency of the evidence.^[20]

Regarding the humped crossing theory of negligence, the court disagreed with the lower court, concluding that the plain text of the ICCT Act—which, in the court’s view, has been “underemphasized” by other courts that have considered this issue—does not expressly preempt common law negligence claims.^[21] Indeed, the STB asserted that the question of whether humped crossing claims are preempted “should be governed by the preemption provisions of the [Safety Act],” not by Section 10501(b), except in “rare cases” when both acts might apply.^[22] The “remedies” provided by the ICCT Act “with respect to regulation of rail transportation,” the court explained, preempt remedies provided by laws that directly regulate rail transportation, but not those provided by general laws that only incidentally affect rail transportation.^[23] The court then observed that while a negligence claim could so seek to control or manage a rail carrier’s operations that it qualifies as a “remedy with respect to regulation of rail transportation,” negligence claims concerning railroad crossing safety rarely rise to such a level of control.^[24]

The court further concluded that Section 10501(b) does not impliedly preempt the humped crossing negligence claim.^[25] Other courts, it noted, found a conflict with the ICCT Act for purposes of implied preemption when a state remedy, as applied in a particular case, “unreasonably burden[s] or interfer[es] with rail transportation.”^[26] The court questioned whether unreasonable burdens and interference alone create conflict preemption.^[27] But because the parties agreed that this test was the appropriate one, “and for the sake of consistency with courts across the country,” the court proceeded to apply it.^[28] The court did so, however, “without suggesting” that the test is proper in other conflict preemption contexts.^[29]

Based on the evidence presented at trial, the Texas Supreme Court concluded that KC Southern failed to establish that the negligence claim would unreasonably burden or interfere with its operations.^[30] KC Southern specifically failed, the court noted, to provide definitive evidence regarding the costs and impacts of the claim on its operational methods, including the burdens of lowering the track or raising the road.^[31] The court also noted that increased costs alone do not constitute an unreasonable burden or interference.^[32] Because it held that the ICCT Act does not expressly preempt common law negligence claims and KC Southern had failed to meet its burden based on the facts of this case to establish implied preemption, the Texas Supreme Court reversed the court of appeals’ judgment as to the humped crossing claim.^[33]

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Justice Brett Busby, in a concurrence joined by Justices John Devine, Jimmy Blacklock, and Evan Young, challenged so-called implied conflict or obstacle preemption—which requires courts to consider whether state law creates an “obstacle” to Congress’s purposes and goals and thus is preempted. Busby argued obstacle preemption is a “distorted application of the Supremacy Clause” and “one of the most damaging constitutional doctrines of modern times.”^[34] Calling on the U.S. Supreme Court to reconsider its 1941 opinion in Hines v. Davidowitz,^[35] in which the court established the test, Justice Busby leveled several objections to implied obstacle preemption based in part on Justice Clarence Thomas’s critiques of the doctrine, as well as Professor Caleb Nelson’s research.^[36] First, Busby argued, implied obstacle preemption lacks “originalist provenance,” as the Supremacy Clause only directs that federal law preempts or “repeals” state law when the two cannot operate together.^[37] Second, it is unworkable, asking judges to investigate the “unspoken thoughts, feelings, and trepidations of individual legislators.”^[38] Third, it is standardless, giving judges boundless discretion to determine what is “unreasonable.”^[39] Fourth, it “undermines federalism,” allowing judges to wander from a statute’s text into policy disputes that have little to do with that text.^[40] And fifth, while recent administrative law jurisprudence requires Congress to speak clearly when transferring core state power to a federal agency, implied obstacle preemption presumes that such powers are transferred if necessary to accomplish Congress’s purposes and objectives.^[41]

Moreover, Busby stated that the appropriate question is not about the scope of preemption, but “whether Congress clearly delegated to the STB the exclusive authority to provide a remedy.”^[42] Echoing Justice Boyd’s majority opinion, but treating Section 10501(b) as a “jurisdictional provision,” he concluded that Congress granted exclusive jurisdiction to regulate only “certain economic and operational aspects of rail transportation.”^[43] Busby then concluded that no “logical contradiction” existed between the humped crossing negligence claim and Section 10501(b).^[44] The suit did not seek to stop KC Southern from doing something that federal law expressly permits.^[45] In sum, he concluded, “railroad safety is governed by a regime of cooperative federalism, not top-down federal uniformity.”^[46]

[1] See Horton v. Kan. City S. Railway, No. 21-0769, 2023 WL 427830, at *5–6 (Tex. June 30, 2023).

[2] Id. at *5–6.

[3] Id. at *1, *14.

[4] Id. at *2–4.

[5] Id. at *2–3 (quoting 49 U.S.C. § 10501).

[6] Id. at *2–3 (quoting 49 U.S.C. § 10501(b)).

[7] Id. at *3.

[8] Id. (quoting 49 U.S.C. § 20106(a)(2)).

[9] Id. at *2.

[10] Id. at *1.

[11] Id.

[12] Id. at *2.

[13] Id. at *1, *19.

[14] Id. at *2.

[15] Id.

[16] Id.

[17] Id.

[18] Id. at *1.

[19] Id. at *1, *15.

[20] Order, Horton v. Kan. City S. Ry. Co., No. 21-0769 (Tex. Dec. 15, 2023).

[21] Horton, 2023 WL 427830, at *7, *11.

[22] Id. at *7, *9 (quoting Waneck v. CSX Corp., No. 1:17CV106-HSO-JCG, 2018 WL 1546373, at *1 (S.D. Miss. Mar. 29, 2018)).

[23] Id. at *9-10.

[24] Id. at *11.

[25] Id. at *14.

[26] Id. at *11.

[27] Id.

[28] Id.

[29] Id.

[30] Id. at *12–13.

[31] Id.

[32] Id. at *13.

[33] Id. at *14.

[34] Id. at *19, *36 (Busby, J., concurring).

[35] Id. at *20 (Busby, J., concurring).

[36] Id. at *19–20 (Busby, J., concurring) (quoting Merck Sharp & Dohme Corp. v. Albrecht, 587 U.S. 299, 318 (2019) (Thomas, J., concurring); citing Caleb Nelson, Preemption, 86 Va. L. Rev. 225 (2000)).

[37] Id. at *19, *23, *26–27 (Busby, J., concurring).

[38] Id. at *19, *33–34 (Busby, J., concurring).

[39] Id. (Busby, J., concurring).

[40] Id. at *19, *28 (Busby, J., concurring).

[41] Id. at *20, *30 (Busby, J., concurring).

[42] Id. at *20 (Busby, J., concurring).

[43] Id. at *21 (Busby, J., concurring).

[44] Id. at *35 (Busby, J., concurring).

[45] Id. (Busby, J., concurring).

[46] Id. (Busby, J., concurring).