Minnesota Federal Court Dismisses Challenge to Railroad Tariff Without Prejudice Under Doctrine of Primary Jurisdiction

On May 27, 2014, the U.S. District Court for the District of Minnesota dismissed a case brought by manufacturers of toxic inhalation hazard (“TIH”) commodities and their trade associations that challenged a railroad’s amended tariff under the Hazardous Materials Transportation Act and 49 U.S.C. § 11101, which codifies the common-carrier obligations of railroads.  The tariff at issue took effect on April 14, 2014 and requires that any tank car containing TIH commodities offered to the railroad for transport be constructed of normalized steel.  Plaintiffs argued that the U.S. Department of Transportation has the sole authority to regulate the shipment of hazardous materials and that the railroad is not allowed to impose safety requirements stricter than those imposed by the DOT.

Both federal courts and the Surface Transportation Board (“STB”) have jurisdiction to determine whether a railroad’s practices violate 49 U.S.C. § 11101.  However, citing the STB’s “institutional tools and expertise to consider the problem from a national perspective,” the court concluded that it would be better for the parties’ dispute to be addressed by the STB and dismissed the case without prejudice under the doctrine of primary jurisdiction.  The court also determined that the plaintiffs’ possibility of success before the STB was not substantial enough to justify a preliminary injunction and denied plaintiffs’ motion for a temporary restraining order and preliminary injunction.