Vermont Railway, Inc. v. Town of Shelburne

Court: 2nd Circuit
Case Number: Docket No. 18-188-CV
Decision Date: March 07, 2019
Case Type: Commerce Clause
The 2nd Circuit held that a town ordinance which regulated the storage, handling, and distribution of hazardous substances violated the Interstate Commerce Commission Termination Act (ICCTA) because its restrictions did not meaningfully protect public health and safety to fit within an exception to the ICCTA. Vermont Railway purchased property in the town in 2015 along its main line to develop a transloading facility, particularly to stockpile and transport road salt. When the town attempted to enforce a pre-construction permit requirement against the railroad the railroad sought injunctive and declaratory relief under the ICCTA. 

The district court held that the ICCTA preempted the town's pre-construction permit requirements and a few weeks after the district court ruling the town enacted the ordinance at issue which it identified as part of its post-construction police powers. Shortly thereafter, the railroad moved for a preliminary injunction against the enforcement of the ordinance and the district court permanently enjoined the town from enforcement of the ordinance against the railroad. The town appealed and the 2nd Circuit held that the ordinance did not achieve any meaningful health or safety goals. The court also held that the town's own experts did not know of any other legislation that classified road salt as a hazardous material and the town's own salt storage shed did not have the same restrictions placed upon it. Futhermore, the court found that the ordinance outlawed spilling road salt at the railroad facility but allowed spreading of road salt for purposes of deicing roads in the town.