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Norfolk Southern Railway Co. v. Public Utility Commission

Supreme Court of Pennsylvania

October 2, 2013

NORFOLK SOUTHERN RAILWAY COMPANY, Appellee
v.
PUBLIC UTILITY COMMISSION, Appellant, PENNSYLVANIA DEPARTMENT OF TRANSPORTATION, COUNTY OF LANCASTER, EAST HEMPFIELD TOWNSHIP, Intervenors

Argued March 6, 2013

Appeal fro the Order of the Commonwealth Court at No. 2157 CD 2010 dated 12/1/11, reconsideration denied 1/27/12, affirming in part and reversing in part the order of the PUC at No. I-00000088 dated 9/16/10 and entered on 9/17/10.

Gina M. D'Alfonso, Esq., Jason D. Sharp, Esq., PA Department of Transportation, for Department of Transportation, Intervenor.

Deanne M. O'Dell, Esq., Mark Scott Stewart, Esq., Eckert Seamans Cherin & Mellott, LLC, Harrisburg, Kyle Jarrett Meyer, Esq., for County of Lancaster, Intervenor.

Theresa A. Monglovi, Esq., Angela Holt Sanders, Esq., Blakinger Byler & Thomas, P.C., for East Hempfield Township, Intervenor.

Elizabeth A. Lion Januzzi, Esq., Bohdan R. Pankiw, Esq., Eric Albert Rohrbaugh, Esq., PA Public Utility Commission, for Public Utility Commission.

Scott Everett Coburn, Esq., for PA State Association of Township Supervisors, Appellant Amicus Curiae.

Benjamin Charles Dunlap Jr., Esq., Nauman, Smith, Shissler & Hall, L.L.P., Harrisburg, for Norfolk Southern Railway Company.

Sara Aliya Aliabadi, Esq., Christian David Sheehan, Esq., Nancy L. Winkelman, Esq., Schnader Harrison Segal & Lewis LLP, Philadelphia, for The Keystone State Railroad Assoc, Consolidated Rail Corp., CSX Transportation, Inc., Appellee Amicus Curiae.

CASTILLE, C.J., SAYLOR, EAKIN, BAER, TODD, MCCAFFERY, ORIE MELVIN, JJ. MR. JUSTICE SAYLOR. Former Madame Justice Orie Melvin did not participate in the consideration or decision of this case. Mr. Chief Justice Castille, Messrs. Justice Eakin and Baer, Madame Justice Todd and Mr. Justice McCaffery join the opinion.

OPINION

Page 620

[621 Pa. 314] MR. SAYLOR, JUSTICE

This appeal concerns the limits of the Public Utility Commission's authority to allocate costs associated with a rail-highway crossing project. We consider the Commonwealth Court's holding that the Commission may not allocate costs to a transportation utility which regularly uses a crossing site in railroad operations but does not own real property or facilities there.

[621 Pa. 315] I. Background

Per Section 2702(a) of the Public Utility Code, the Pennsylvania Public Utility Commission (the " PUC" or the " Commission" ) has jurisdiction over construction, alteration, relocation, suspension, and abolishment

Page 621

(collectively, " alterations" ) of rail-highway crossings. See 66 Pa.C.S. § 2702. Before alterations may be undertaken, the Commission's approval must be obtained. See id. § 2702(a). Furthermore, the agency directs the manner and conditions under which alterations, operations, maintenance, and protection are undertaken, in furtherance of public safety. See id. § 2702(b). Indeed, upon its own motion or otherwise, the Commission may require alterations to be made " by any public utility or municipal corporation concerned or by the Commonwealth," among others. Id. § 2702(c) (emphasis added). Most relevant here, the PUC also is responsible generally to allocate the costs of alterations to rail-highway crossings among " concerned" parties and the Commonwealth, as follows:

[T]he cost of [alterations and protection of a rail-highway] crossing . . . shall be borne and paid . . . by the public utilities, municipal corporations [or] municipal authority . . . concerned, or by the Commonwealth, in such proper proportions as the commission may, after due notice and hearing, determine, unless such proportions are mutually agreed upon and paid by the interested parties.

Id. § 2704(a) (emphasis added).[1]

The Colebrook Road Bridge in East Hempfield Township, Lancaster County, was long part of a grade-separated, rail-highway crossing. The bridge carried a local road above train tracks owned and used by the National Railroad Passenger Corporation, also known as Amtrak. Pursuant to an express, written easement and an operating agreement with Amtrak, Appellee, Norfolk Southern Railway Company (" Norfolk" ), operates freight trains on the same tracks.

[621 Pa. 316] Over the years, the condition of the bridge deteriorated, and, in 2003, the PUC directed the Township to remove it. The Township bore the bulk of the initial expense, subject to a later, final allocation of costs among concerned parties per Section 2704(a).

Norfolk, the Township, the County, the Pennsylvania Department of Transportation (" PennDOT" ), and Amtrak participated in the ensuing, final cost allocation proceeding. For its part, Norfolk contended that any allocation to it would be unjust and unreasonable, since the company owned no property or facilities at the crossing site and paid Amtrak for the privilege of operating on that railroad's line. Norfolk also cited City of Chester v. PUC, 798 A.2d 288 (Pa. Cmwlth. 2002), for the proposition that the PUC lacked authority to allocate costs to a transportation utility which had no ownership interest associated with a rail-highway crossing. See id. at 294 (" [I]t is the ownership interest at the crossing, not mere usage that gives the Commission the authority to allocate costs[.]" ).

Norfolk highlighted City of Chester's explanation that this ownership focus, relative to transportation utilities, traces to the common law mandate upon railroads laying tracks to construct and maintain bridges necessary to continued, safe use of intersecting road systems. See id. at 293 (quoting City of Phila. v. PUC, 676 A.2d 1298, 1305 (Pa. Cmwlth. 1996)). City of Chester further observed that this duty evolved into a shared one with municipalities, and, thus, the court took the position that the track-owning railroads and local

Page 622

governments were the core parties " concerned" with rail-highway crossing projects at the time the Public Service Commission, and later, its successor, the PUC, attained jurisdiction over such projects. See id. at 294 (quoting City of Phila., 676 A.2d at 1305-06).

Upon her review, an administrative law judge (the " ALJ" ) rejected Norfolk's position and recommended allocation of $78,816 -- or fifteen percent of the primary disputed amount of allocable costs ($525,441) -- to Norfolk. See Recommended Decision on Final Cost Allocation [" Recommended Decision" ], [621 Pa. 317] Investigation of Crossing Structure Carrying Colebrook Road Above the Grade of the Tracks of [Amtrak] in East Hempfield Twp., Lancaster Cty. [" Investigation" ], I-00000088, slip op. at 17, Finding of Fact [" FF" ] ¶ 73 (Pa. PUC June 1, 2010) (citing, inter alia, Nat'l R.R. Passenger Corp. v. PUC, 848 F.2d 436 (3d Cir. 1988)). As to the Township, the County, PennDOT, and Amtrak, the ALJ recommended allocation of seventy percent ($367,809), ten percent ($52,544), five percent ($26,272), and zero percent, respectively. See id.

Underlying her recommendation, the ALJ explained that the Commission generally is not limited to any fixed rule or formula in cost apportionment, but, rather, takes all relevant circumstances into account. See, e.g., AT& T v, PUC, 558 Pa. 290, 306, 737 A.2d 201, 209 (1999). As a frame of reference, the ALJ cited a series of non-exclusive factors collected in Greene Twp. Bd. of Supervisors v. PUC, 668 A.2d 615 (Pa. Cmwlth. 1995), including the following considerations:

1. The party that originally built the crossing. Related to this factor is the issue of whether the road existed before or after ...

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