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CSX Transportation, Inc. v. Healey

United States District Court, D. Massachusetts

July 13, 2016

CSX TRANSPORTATION, INC., CSX INTERMODAL TERMINALS, INC., NATIONAL RAILROAD PASSENGER CORPORATION and SPRINGFIELD TERMINAL RAILWAY COMPANY, Plaintiffs,
v.
MAURA HEALEY, Defendant.

          MEMORANDUM & ORDER

          Nathaniel M. Gorton, United States District Judge

         This case arises from allegations that the Massachusetts Earned Sick Time Law (“ESTL”) at M.G.L. c. 149 § 148C, approved by Massachusetts voters in 2014, is preempted by three federal statutes.

         Pending before the Court are three motions for partial summary judgment on Count 1 which asserts that the ESTL is expressly preempted by the Railroad Unemployment Insurance Act (“RUIA”), 45 U.S.C. § 351, et seq.. For the reasons that follow, the motion for partial summary judgment by plaintiffs will be allowed and the motions for partial summary judgment by defendant and the intervening unions will be denied.

         I. Background and procedural history

         Plaintiffs CSX Transportation, Inc., CSX Intermodal Terminals, Inc., National Railroad Passenger Corporation d/b/a Amtrak and Springfield Terminal Railway Company (collectively, “CSX” or “plaintiffs”) are operators of rail transportation systems and intermodal terminals located in Massachusetts. The parties agree that all plaintiffs are “employers” within the meaning of the RUIA and all individuals employed by them in Massachusetts are “employees” and thus eligible for federal statutory “sickness benefits” under the RUIA.

         Defendant Maura Healey (“Healey” or “defendant”) is the Attorney General of the Commonwealth of Massachusetts and is named in her official capacity. As Attorney General, she is charged with the rulemaking for, and enforcement of, the purportedly preempted portions of the ESTL.

         The intervening parties are the Transportation and Mechanical Divisions of the International Association of Sheet Metal, Air, Rail and Transportation Workers, the Brotherhood of Locomotive Engineers and Trainmen, the International Brotherhood of Electrical Workers, the National Conference of Firemen & Oilers District of Local 32BJ, SEIU, the Brotherhood of Railroad Signalmen and the Brotherhood of Maintenance of Way Employes Division/IBT (collectively, “the union intervenors”). They are the collective bargaining representatives for the employees who would be affected by the relief sought by plaintiffs.

         The United States (“the federal government”) is an interested party which submitted a “statement of interest” in this action to set forth its position concerning the effect of the express preemption provision of the RUIA on the ESTL. The federal government claims to have a “substantial interest” in ensuring that the scope of that RUIA provision does not “unduly interfere” with the traditional police powers of the states to establish minimum labor standards.

         The parties agree that in November, 2014, Massachusetts voters approved the Massachusetts Earned Sick Time Law at M.G.L. c. 149, § 148C which requires certain employers to provide “earned paid sick time” to qualifying employees in Massachusetts. That law became effective on July 1, 2015. Plaintiffs have not implemented or complied with the ESTL because they believe that it is preempted by federal law. Defendant has declined their request to “provide a permanent commitment not to enforce” the ESTL against them.

         Plaintiffs initiated this action by filing a complaint against Healey and the Massachusetts Office of the Attorney General in June, 2015 and an amended complaint naming Healey as the sole defendant in November, 2015. Plaintiffs seek declaratory judgments that the ESTL is preempted by the RUIA (Count 1), the Railway Labor Act (“RLA”) at 45 U.S.C. § 151, et seq. (Count 2) and the Employee Retirement Income Security Act (“ERISA”) at 29 U.S.C. § 1140, et seq. (Count 3). Plaintiffs also seek to enjoin Healey from enforcing or applying the ESTL against them.

         In February, 2016, this Court convened a scheduling conference during which the parties agreed to bifurcate the action and litigate the RUIA claim in Phase 1 and the RLA and ERISA claims in Phase 2.

         Plaintiffs moved for summary judgment on the RUIA claim in March, 2016. The Court allowed the union intervenors to participate in the action and move for summary judgment on the RUIA claim in May, 2016. Defendant submitted a motion for summary judgment on the same claim shortly thereafter. The parties stipulated that there are no material facts in dispute. The Court convened a hearing on those motions in July, 2016.

         II. Motions for summary judgment A. Legal standard

         The role of summary judgment is “to pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial.” Mesnick v. Gen. Elec. Co., 950 F.2d 816, 822 (1st Cir. 1991) (quoting Garside v. Osco Drug, Inc., 895 F.2d 46, 50 (1st Cir. 1990)). The burden is on the moving party to show, through the pleadings, discovery and affidavits, “that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a).

         A fact is material if it “might affect the outcome of the suit under the governing law”. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A genuine issue of material fact exists where the evidence with respect to the material fact in dispute “is such that a reasonable jury could return a verdict for the nonmoving party.” Id.

         If the moving party satisfies its burden, the burden shifts to the non-moving party to set forth specific facts showing that there is a genuine, triable issue. Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). The Court must view the entire record in the light most favorable to the non-moving party and make all reasonable inferences in that party's favor. O'Connor v. Steeves, 994 F.2d 905, 907 (1st Cir. 1993). Summary judgment is appropriate if, after viewing the record in the non-moving party's favor, the Court determines that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law.

         B. Application

         1. Express preemption

         The Supremacy Clause of the United States Constitution provides that the laws of the United States . . . shall be the supreme law of the land . . . any Thing in the Constitution or laws of any State to the contrary notwithstanding. U.S. CONST. art. VI, cl. 2. State laws which conflict with federal law are preempted and “without effect”. Altria Grp., Inc. v. Good, 555 U.S. 70, 76 (2008).

         Congressional purpose is the “ultimate touchstone” in every preemption case. Id. A court considering the preemptive effect of an express preemption clause in a federal statute must assess the substance and scope of Congress’s displacement of state law, id., in order to identify the matters that it did and did not intend to preempt, Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 541 (2001). The inquiry commences with the statutory language “which necessarily contains the best evidence of Congress’ pre-emptive intent”. CSX Transp., Inc. v. Easterwood, 507 U.S. 658, 664 (1993). The court may also consider the purpose, history and surrounding statutory scheme of the express preemption clause. Mass. Delivery Ass’n v. Coakley, 769 F.3d 11, 17 (1st Cir. 2014).

         If the preemption inquiry implicates the historic police powers of the state or a field traditionally occupied by the states, the court must apply the presumption against preemption which can be overcome by a finding of clear and unambiguous congressional intent to preempt state law. Altria, 555 U.S. at 77.

         1. Railroad Unemployment Insurance Act

         Congress enacted the first version of the Railroad Unemployment Insurance Act in 1938 to establish a system of unemployment insurance for covered employees. R.R. Ret. Bd. v. Duquesne Warehouse Co., 326 U.S. 446, 448 (1946). It amended the statute in 1946 to provide qualified employees with “unemployment benefits” and “sickness benefits” which would both be administered by the Railroad Retirement Board (“RRB”), § 352, and funded by contributions from employers, § 358.

         The amended statute defines “benefits” as monetary payments to an employee with respect to his or her unemployment or sickness and sets the daily benefits rate at 60% of his or her daily rate of compensation at the last position held. § 351(l)(1)(benefits); § 352(a)(2)(daily benefit rate). A qualified employee is entitled to “sickness benefits” which are benefits . . . for each day ...


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