United States: Crude-By-Rail Update: Municipalities In The Bakken Push Back Against Increasing Train Traffic

Throughout the 19th and early 20th centuries, towns in the western United States grew and thrived around the railroad. In fact, the railroad tracks often became a central geographic feature within towns, birthing the colloquial phrase "the other side of the tracks." But with increasing train traffic, largely due to unit trains transporting Bakken crude oil, many small-town residents complain that traveling to the other side of the tracks now takes considerably more time.1

Frustrated with delays caused by idle trains, two North Dakota towns have taken action to limit the time trains may block railroad crossings.2 One town—Enderlin—passed an ordinance to that effect in October 2014.3 Last week, the Enderlin City Council repealed its ordinance in response to a lawsuit and pending preliminary injunction motion filed by Canadian Pacific.4

The other town—Berthold—chose a different route. Berthold ordered its police chief to ticket railroads for blocking both the town's crossings for more than 20 minutes.5 Rather than pass its own ordinance, Berthold relies on a seemingly little enforced provision of the North Dakota Century Code.6 Now, BNSF Railway engineers face a penalty of up to 30 days in jail and up to a $1,500 fine under state law for blocking railroad crossings in Berthold.7

While Enderlin backed down from its ordinance in the face of Canadian Pacific's lawsuit, Berthold's action presents a different hurdle. If BNSF files a lawsuit, BNSF will not be suing a small municipality with limited financial means for extraneous litigation costs. Rather, BNSF must challenge the validity of a state statute, which likely requires the North Dakota Attorney General to defend that law.8 And unlike the Enderlin City Council quickly repealing its ordinance, the North Dakota Legislature is unlikely to take any action related to the lawsuit.

Although the towns' actions directly target railroads, if validated by a court, similar ordinances and state laws could induce further delay into a railroad infrastructure already overburdened with record traffic. Furthermore, additional North Dakota municipalities—and potentially towns in other states with similar laws—may begin enforcing the railroad crossing prohibition.

Why should anyone but the railroads care? Other industries should take notice because additional railroad delays mean longer transportation times for all commodities, which impacts, for example, crude oil producers, refineries, farmers, coal producers, and power plants.

Conflicts between commodities—generally attributed to increases in crude-by-rail traffic in North Dakota9—have already attracted the attention of the Surface Transportation Board and have pitted industries against one another to secure a timely supply chain.10 Delays related to local and state interference with railroad operations may draw further attention from the federal regulators, with uncertain results for shipping crude oil by rail.

In the near term, BNSF will likely file a lawsuit, challenging Berthold's enforcement of the North Dakota law on grounds of federal preemption of railroad operations. If that lawsuit proves unsuccessful, however, more North Dakota municipalities—and other towns in states with similar statutes—may begin enforcing the railroad crossing law. Because of the far-reaching implications of increasing local and state interest in control of railroad operations, trade associations and individual companies should increase the priority of this issue.

Footnotes

1.See Energywire, Oil and Gas: Rail Company, N.D. Town at Odds Over Idle Trains, E & E Publishing (Nov. 26, 2014), http://www.eenews.net/greenwire/2014/11/26/stories/1060009612 ("When the trains stop for hourslong breaks, the entire city is put at a standstill, forcing residents to take long detours to get around.").

2.See, e.g., Lauren Donovan, Berthold Poses Challenge to BNSF Railway, The Bismarck Tribune (Jan. 6, 2015), available at http://bismarcktribune.com/news/state-and-regional/berthold-poses-challenge-to-bnsf-railway/article_07fd5a04-95c6-11e4-8a3e-23377ce4a5d2.html (discussing the status of ordinances prohibiting trains from blocking intersections in Enderlin and Berthold, North Dakota).

3.See Complaint at 1, Soo Line R.R. Co. v. City of Enderlin,No. 3:14-cv-00106 (D.N.D. Oct. 10, 2014), ECF No. 1 (alleging that Enderlin passed the relevant ordinance—"Blocking or Obstructing crossing with train—Penalty"—on October 8, 2014").

4.Order of Dismissal at 1, Soo Line R.R. Co. v. City of Enderlin,No. 3:14-cv-00106 (D.N.D. Jan. 1, 2015), ECF No. 31 ("[C]ounsel for the City of Enderlin informed the Court that during the evening of January 5, 2015, the Enderlin City Commission voted to repeal the ordinance in dispute.").

5.Donovan, supra note 2 ("The police chief in Berthold, a small oil patch town west of Minot, has new marching orders from city hall: Ticket the train engineer the next time a BNSF Railway train blocks both crossings in town for more than 20 minutes.").

6.Donovan, supra note 2 ("[January 6, 2015], [Mayor Alan] Lee said the town will rely on state law for writing the ticket and leave it to the court judge to determine what the fine should be, if any."). See N.D. Cent. Code § 49-11-19(1)–(2) ("A person may not operate any train in a manner as to prevent vehicular use of any roadway for a period of time in excess of ten consecutive minutes . . . . A person that violates this section is guilty of a class B misdemeanor.").

7.Donovan, supra note 2; N.D. Cent. Code § 12.1-32-01(6) ("Class B misdemeanor, for which a maximum penalty of thirty days' imprisonment, a fine of one thousand five hundred dollars, or both, may be imposed.").

8 See N.D. Cent. Code § 54-12-01 (listing the duties of the North Dakota Attorney General); About Our Office, N.D. Attorney General, http://www.ag.nd.gov/About/AboutOffice.htm (last visited Jan. 12, 2015). ("[The Attorney General] represents and defends the interests of the state (and therefore, the people) of North Dakota in civil and criminal actions.").

9.Blake Sobczak, TRANSPORT: Feds Require Crude-by-Rail Transparency as Railroads Grapple with Delays, E & E Publishing (Oct. 9, 2014), http://www.eenews.net/energywire/2014/10/09/stories/1060007126 ("[A]gricultural producers reported ongoing service woes even as crude-by-rail deliveries reached record highs over the summer.").

10.See id. ("The [STB's] new data requirements call for railroads to file system-average train speeds for a range of commodities including grain, coal, crude, ethanol and intermodal shipments."); Energywire, TRANSPORTATION: Railroad Ordered to Share Coal Plan Following Shortages, E & E Publishing (Jan. 8, 2014), http://www.eenews.net/energywire/2015/01/08/stories/1060011297 ("The [STB] has ordered BNSF Railway Co. to share its plan to help keep the lights on in Midwestern states in case of lagging coal deliveries to power plants.").

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