What's Happening?
The Surface Transportation Board (STB) has released a policy statement, Docket No. EP 791, titled 'Policy Statement on Jurisdiction and Preemption Under the ICC Termination Act,' which will become final on November 9, 2026. This document, placed on public
inspection for the Federal Register, provides a concise overview of existing precedents regarding the STB's jurisdiction over rail carriers and the preemption of conflicting state and federal laws under the ICC Termination Act (49 U.S.C. 10501). The statement is intended to consolidate explanations of these principles rather than establish new binding case holdings. It distinguishes between express preemption, typically treated as categorical, and implied preemption, which is usually applied on a case-by-case basis. The STB was created on January 1, 1996, succeeding the Interstate Commerce Commission, and this policy statement was prompted by a request from a coalition of six organizations in September 2025.
Why It's Important?
This policy statement is significant for the U.S. rail industry and related stakeholders as it clarifies the boundaries of federal regulatory authority over railroads. By providing a consolidated explanation of jurisdiction and preemption, the STB aims to reduce ambiguity for rail carriers, state and local governments, and rail customers. The document outlines various fact patterns, including abandonment of rail property, complete takings of rail-carrier property, utilities in rights-of-way, blocked crossings, and environmental permitting, indicating how preemption principles apply. This clarity can help prevent disputes and streamline regulatory processes, benefiting rail operators by providing a more predictable legal landscape. Conversely, state and local governments may need to adjust their regulatory approaches to ensure compliance with federal preemption, particularly concerning issues that could impact rail operations. The statement also emphasizes that rail customers are generally not under the direct jurisdiction of the Board, except when their activities directly restrict or dictate common-carrier rail service.
What's Next?
The policy statement will become final on November 9, 2026, at which point it will serve as a guiding document for future interpretations of STB jurisdiction and preemption under the ICC Termination Act. While it does not establish new binding case holdings, it will inform the evaluation of specific disputes. The STB explicitly states that it is not making binding determinations in this policy statement and that it should not predetermine the outcome of any particular dispute. Future cases will continue to be judged on their specific facts, circumstances, and applicable laws. The statement also encourages railroads to engage in communication, information sharing, and cooperation with local public officials, suggesting a continued emphasis on collaborative solutions despite federal preemption. Stakeholders, including rail carriers, state and local governments, and rail customers, will need to familiarize themselves with this clarified framework to navigate regulatory challenges effectively.
Beyond the Headlines
The STB's policy statement delves into the nuanced interplay between federal and state authority, particularly concerning property rights and local regulations affecting rail infrastructure. The discussion on 'complete takings' highlights a potential shift towards categorical preemption for state and local claims seeking exclusive possession of rail rights-of-way, which could significantly strengthen railroads' ability to maintain operational control over their property. However, non-exclusive easements, such as at-grade crossings or subterranean utility lines, will continue to be assessed on an as-applied basis, indicating a more flexible approach where rail use is not entirely excluded. The statement also addresses regulations aimed at rail customers, clarifying that while customers are not directly under STB jurisdiction, actions that restrict or dictate common-carrier rail service may still fall under preemption. This distinction is crucial for manufacturers and other businesses that rely on rail services, as it defines the limits of local regulatory intervention. The STB's call for railroads to be responsive to local officials, despite preemption, underscores an ethical dimension, promoting good faith and cooperation to mitigate potential community friction.
