III. Modifications to D.97-09-045

A. Performance Standards

In its petition for modification, Staff requests that the Commission's discussion of performance standards2 should be deleted because the Ninth Circuit found the Commission's rules were preempted by federal law. (Union Pacific v. CPUC, 346 F.3d 851, 857.)

The Railroads respond that many discussions within the Commission's decision are no longer correct in light of the decisions issued in Union Pacific v. CPUC. The Railroads contend it is not essential to correct all discussions within D.97-09-045 as long as the ultimate conclusions of law and ordering paragraphs are modified. The Railroads recommend inclusion of a single paragraph in the opening of the decision to state as follows:

At the conclusion of this rulemaking, the Railroads instituted a challenge to various regulations issued herein based on alleged violations of federal law. We have modified the original conclusions of law, ordering paragraphs, and regulatory appendices to conform to the decisions issued in that proceeding and the parties' settlement. See, Union Pacific Railroad Co. v. CPUC, 346, F.3d 851 (9th Cir. 2003) cert. den. 124 S.Ct. 1040 (2004) and the decisions of the U.S. District Court: Union Pacific Railroad Co. v. CPUC, 109 F. Supp.2d 1186 (N.D. Cal. 2000) and the Court's unpublished "Order Granting Motion to Amend Judgment" dated December 19, 2000. With limited exceptions, we have not modified the discussion of the issues as written in 1997. Even though the analysis of federal law set forth herein was rejected in part, we do not believe it is necessary to rewrite the discussion at this date. The decisions of the federal court overruling certain aspects of the Commission's reasoning are available for review.

We agree with the Railroads' proposal for a one paragraph addition to D.97-09-045. We will make this single change rather than attempt to delete all discussions that were subsequently preempted or modified by federal court action. We will modify D.97-09-045 to add the above paragraph to the "Summary" section of the order immediately following the paragraph that begins, "The statistical basis for identifying these local safety hazard sites is sound." (D.97-09-045, mimeo. at 5, 75 CPUC2d 1 at 11.)3 In addition, we will modify the 1997 order to include the parties' Stipulated Final Judgment and revised Appendix E, as set forth in Attachment D of this order.

B. Train Make-Up Rules

Staff requests that the Commission's discussion of the approval of the Railroads' train make-up rules should be deleted and replaced with the provisions of the parties' Stipulated Final Judgment. (D.97-09-045, 75 CPUC2d 1 at 35-37.)

In accordance with the discussion above, we will not delete any of the discussion of train make-up rules, but we will modify the appropriate findings of fact, conclusions of law, ordering paragraphs, and appendices on this topic.

C. Conclusions of Law and Ordering Paragraphs

Staff recommends several modifications to the Conclusions of Law and Ordering Paragraphs in D.97-09-045 to conform them to the Stipulated Final Judgment and to acknowledge that federal courts found the Commission's regulations preempted by federal law. The Railroads made minor additions and corrections to the Staff's recommended modifications. Each of the Railroads' suggested additions were supported by Staff in their August 20, 2004 reply comments. All the suggested modifications are unopposed and we find they reasonably reflect both the Stipulated Final Judgment and the federal court decisions arising from this heavily litigated matter. Therefore, we will adopt the changes described in detail below. Each suggested modification is described along with a citation to the court action leading to the modification.

1. Conclusion of Law 13 should be deleted in view of the Ninth Circuit's holding that site 9 (the Cantara Loop) is not an "essentially local safety hazard" under 49 U.S.C. Sec. 20106. (Union Pacific v. CPUC, 346 F.3d 851, 857.)

2. Conclusion of Law 14 on Track-Train Dynamics should be rewritten to conform to the Stipulated Final Judgment, in response to the remand on the issue of train make-up or track train dynamics by the Ninth Circuit. (Union Pacific v. CPUC, 346 F.3d 851 at 870.) Staff suggests a rewrite of the conclusion as follows:

    14. The Commission's staff has authority under P.U. Code § 314 and under the orders of this Decision to obtain from the Railroads all information necessary to analyze the track-train dynamics regulations and any modifications to them4 the Stipulated Final Judgment on Remand Issues to enforce the railroads own rules and regulations concerning train make-up at the identified local safety hazard sites and, further, to enforce the railroads' notification to the Commission of changes to those train make-up rules pursuant to the Stipulated Final Judgment on Remand Issues.

3. Conclusions of Law 15 through 19 on dynamic braking should be deleted because the court found these regulations preempted by federal law. (Union Pacific v. CPUC, 109 F.Supp.2d 1186 at 1209.)

4. Conclusions of Law 20 through 23 regarding "end of train devices" should be deleted because they are preempted by federal law. (Union Pacific v. CPUC, 109 F.Supp.2d at 1209 and 1211.)

5. Conclusions of Law 29 through 33 regarding training should be deleted because they are preempted by federal law. (Union Pacific v. CPUC, 109 F.Supp.2d at 1200-1201.)

6. Conclusions of Law 34 through 37 regarding track standards should be deleted because the Ninth Circuit found Site 9 was not a local safety hazard. Thus, increased track safety standards are preempted by federal law. (Union Pacific v. CPUC, 346 F.3d 851 at 860.)

7. Conclusions of Law 38 through 41 regarding train securement should be deleted because the parties agreed these issues were not sufficiently developed to permit a determination concerning preemption; the count dismissed the issues without prejudice. (Union Pacific v. CPUC, 109 F.Supp.2d n5 at 1192.)

8. Conclusions of Law 44, 47 and 48 should be deleted to be consistent with the preemptions discussed above.

9. Consistent with the legal grounds discussed above, Staff recommends the decision be modified to delete Ordering Paragraphs 1, 2, 3, 8, 9, 11 through 22, and 24 through 31.

10. Several Ordering Paragraphs should be modified in accordance with the Stipulated Final Judgment and federal court findings. Specifically, staff recommends modification of Ordering Paragraphs 4, 5, 6 and 7 as follows:

    4. No later than 60 days after the effective date of this decision, the Railroads must forward to Staff any corrections, additions or deletions to the Staff's identification of track-train dynamics rules in The Commission shall enforce the train make-up rules contained within Appendix E of the Stipulated Final Judgment on Remand Issues. Appendix E contains many of the Railroads' track-train dynamics rules but it is not intended to limit the Railroads' designation of other rules as track-train dynamics related operating rules.

    5. Beginning May 11, 2004, on the effective date of this decision the Railroads must notify staff when any Railroads' track-train dynamics rules that were in effect on July 1, 1997, as identified in Appendix E, including corrections, are changed, dropped or supplemented of any and all changes to Appendix E of the Stipulated Final Judgment on Remand Issues.

    6. Beginning May 11, 2004, the Commission shall enforce the notification of changes to the Railroads' train make-up rules as provided in the Stipulated Final Judgment on Remand Issues. the effective date of this decision the Railroads shall provide the scientific justification for any changes made to the track-train dynamics rules that were in use on July 1, 1997, including any corrections, additions or deletions made pursuant to Ordering Paragraph #4, supra.

    7. Pursuant to the Stipulated Final Judgment on Remand Issues, No later than 90 days after the effective date of this decision, each Railroad operating through sites Nos. 1, 3, 4, 7, 9, 12, 16, 22, 23, 26, 28, 29, and 31 shall make available to Staff an explanation of the processes or decision criteria employed by the Railroad in order to assess the safety of the proposed rules, as well as the application of that criteria to the site. all scientific justification for their operating track-train dynamics rules that will be in use at that time (i.e., 90 days after the effective date of this decision) for these respective sites.

D. Appendices A, B and E

Staff and the Railroads identified changes to Appendices A, B and E that are necessary to conform the Appendices to subsequent court action. Specifically, the parties recommend:

1. Appendix A, pages A-3 through A-55 should be stricken because they contain track-train dynamics and training regulations that have either been replaced by the Stipulated Final Judgment or the District Court found were preempted by federal law. We will modify Appendix A of D.97-09-045 as shown in the revised Appendix A attached to this order.

2. Appendix B of D.97-09-0456 should be modified to remove references to various regulations that were held to be preempted by the Federal Railroad Safety Act, 49 U.S.C. Sections 20101 et seq. We will modify Appendix B as shown in the revised Appendix B attached to this order.

3. Appendix E of D.97-09-0457 should be deleted and replaced with the Stipulated Final Judgment and a newly revised Appendix E setting forth train make-up rules for specific sites.

We agree and a revised Appendix E containing both the Stipulated Final Judgment and a revised Appendix E is attached to this order.

The changes to Appendices A, B, and E are undisputed and we will adopt them.

2 75 CPUC2d, 1 at 32-33.

3 All edits to the text of D.97-09-045 are set forth in Attachment A to this order.

4 Deletions to D.97-09-045 are marked by overstriking and additions are marked by underlining.

5 75 CPUC2d 1 at 86-88.

6 75 CPUC2d 1 at 88-89.

7 75 CPUC2d 1 at 122-339.

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