Justia U.S. 7th Circuit Court of Appeals Opinion Summaries

Several rail carriers challenged a Final Rule issued by the Surface Transportation Board (STB) that allows a railway shipper or receiver to request a "reciprocal switching agreement." This agreement requires a rail carrier with a monopoly over a certain rail line to compete with another carrier for specific rail traffic. The carriers argued that the Final Rule exceeded the STB's statutory authority under the Staggers Rail Act of 1980, which grants the agency authority to prescribe reciprocal switching. They also contended that aspects of the Final Rule exceeded the Board's ancillary powers and were arbitrary, capricious, and unsupported by the record.The STB issued the Final Rule after a notice-and-comment period, aiming to address service performance issues of Class I rail carriers, which were exacerbated by the COVID-19 pandemic. The Board held a hearing in April 2022 and required several Class I carriers to submit service recovery plans. Subsequently, the Board proposed new regulations to improve service by increasing competition, leading to the Final Rule. The rule establishes procedures for shippers or receivers to request reciprocal switching agreements if the incumbent carrier fails to meet certain performance standards.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court held that the Final Rule exceeded the STB's statutory authority because it did not require a finding of inadequate service by the incumbent carrier before prescribing a reciprocal switching agreement. The court emphasized that the Staggers Rail Act requires such a finding to determine that a reciprocal switching agreement is "in the public interest." Consequently, the court granted the petition, vacated the Final Rule, and remanded the case to the STB for further proceedings. View "Grand Trunk Corporation v STB" on Justia Law

Timothy Hoffstead, a canine handler for Metra, was suspended after testing positive for amphetamines and opioids during a random drug test. Hoffstead attributed the positive result to his prescribed medications for ADD, migraines, and a wrist injury. The medical review officer (MRO) attempted to contact Hoffstead for an explanation but was unsuccessful. Consequently, Hoffstead was suspended and later not considered for an open canine handler position. Despite providing proof of his prescriptions and having his test results revised to negative, Metra required him to complete a rehabilitation program. Hoffstead eventually returned to work but left Metra for other employment.The United States District Court for the Northern District of Illinois granted summary judgment in favor of Metra. The court found that Hoffstead failed to demonstrate that Metra's actions were due to his disability. The court also ruled that it could not consider Hoffstead's claim regarding the exercise of seniority under the collective bargaining agreement (CBA) due to the Railway Labor Act (RLA), which prohibits courts from interpreting CBAs.The United States Court of Appeals for the Seventh Circuit reviewed the case and affirmed the district court's decision. The appellate court held that Hoffstead did not provide sufficient evidence to show that Metra's actions were motivated by his disability. The court noted that Hoffstead's failure to respond to the MRO and his decision to waive an investigation in favor of the rehabilitation program were the primary reasons for Metra's actions. The court also found that the RLA did not preclude adjudicating Hoffstead's claim regarding the seniority rules but concluded that Hoffstead failed to demonstrate a link between his disability and Metra's actions. View "Hoffstead v Northeast Illinois Regional Commuter Railroad Corp" on Justia Law

Shawn Montgomery was severely injured when his truck was hit by a tractor-trailer driven by Yosniel Varela-Mojena, who was employed by motor carrier Caribe Transport II, LLC. The shipment was coordinated by C.H. Robinson Worldwide, Inc., a freight broker. Montgomery sued Varela-Mojena, Caribe, and Robinson, alleging that Robinson negligently hired Varela-Mojena and Caribe and was vicariously liable for their actions.The United States District Court for the Southern District of Illinois granted partial summary judgment in favor of Robinson on the vicarious liability claim, finding that Varela-Mojena and Caribe were independent contractors, not agents of Robinson. Following the Seventh Circuit's decision in Ye v. GlobalTranz Enterprises, Inc., which held that the Federal Aviation Administration Authorization Act (FAAAA) preempts state law claims against freight brokers for negligent hiring, the district court also granted judgment for Robinson on the negligent hiring claims. Final judgment was entered in favor of Robinson to facilitate Montgomery's appeal, while his claims against Varela-Mojena and Caribe were stayed.The United States Court of Appeals for the Seventh Circuit reviewed the case de novo. The court affirmed the district court's decision, agreeing that Robinson did not exercise the necessary control over Caribe and Varela-Mojena to establish an agency relationship, thus negating vicarious liability. The court also declined to overrule its precedent in Ye, maintaining that the FAAAA preempts state law negligent hiring claims against freight brokers. Consequently, the court affirmed the district court's judgment in favor of Robinson. View "Montgomery v. C.H. Robinson Company" on Justia Law

Wisconsin Central Ltd. and Soo Line Railroad Company are in dispute over the location for exchanging rail traffic in the Chicago area. Wisconsin Central prefers the Belt Railway yard near Chicago, while Soo Line prefers the Spaulding yard near Bartlett, 35 miles away. The Surface Transportation Board initially ruled against Wisconsin Central, stating that it could not use Belt Railway's yard because it did not own it outright, despite having a contractual right to use it. The Seventh Circuit Court of Appeals remanded the case, clarifying that a railroad could have the power to designate facilities by contract as well as by ownership.Upon remand, the Surface Transportation Board held that the Belt Railway yard was not a reasonable location for the exchange. The Board found that both locations could cause congestion but concluded that it was unreasonable for Wisconsin Central to insist that Soo Line bear the costs of moving cars to Chicago and the fees charged by Belt Railway. Additionally, the Board emphasized the importance of negotiation and agreement in selecting exchange locations, rather than allowing one party to unilaterally change the location.The United States Court of Appeals for the Seventh Circuit reviewed the Board's decision. The court held that the Board's interpretation of "reasonable" was within its discretion and that considering costs as part of reasonableness was appropriate. The court also noted that Wisconsin Central did not preserve its argument regarding substantial evidence for review. Consequently, the court found that the Board's decision was neither arbitrary nor capricious and did not embody a legal error. The petition for review was denied. View "Wisconsin Central Ltd. v. Surface Transportation Board" on Justia Law

The case involves the crash of Lion Air Flight JT 610, a Boeing 737 MAX, which took off from Jakarta, Indonesia, and crashed into the Java Sea on October 29, 2018, killing all on board. The plaintiffs are family members and representatives of the estates of two passengers, Liu Chandra and Andrea Manfredi. They filed lawsuits against Boeing and other defendants, seeking damages under various legal theories, including the Death on the High Seas Act (DOHSA), state law, and other federal statutes.The Chandra case was initially filed in Illinois state court and then removed to the United States District Court for the Northern District of Illinois. The Manfredi case was filed directly in the same federal court. Both sets of plaintiffs demanded a jury trial and asserted claims under DOHSA, state law, and other federal statutes. Boeing filed motions to limit the plaintiffs' claims to DOHSA and to preclude a jury trial. The district court ruled in favor of Boeing, holding that DOHSA was the exclusive remedy and that the plaintiffs were not entitled to a jury trial. The court dismissed all non-DOHSA claims and certified the jury trial issue for interlocutory appeal.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court affirmed the district court's rulings, holding that DOHSA preempts all other claims and mandates a bench trial. The court reasoned that DOHSA's language and legislative history indicate that claims under the statute must be brought in admiralty, which does not carry the right to a jury trial. The court also noted that Congress has not amended DOHSA to allow for jury trials in federal court, despite longstanding judicial interpretations to the contrary. Therefore, the plaintiffs' claims must proceed without a jury. The court's decision was to affirm the district court's rulings. View "Buehler v. Boeing Company" on Justia Law

The Middle Mississippi is the 195-mile-long stretch from St. Louis, Missouri, where the Missouri River flows into the Mississippi, to Cairo, Illinois, where the Ohio River flows into the Mississippi and doubles its flow. The 1910 Rivers and Harbors Act authorized the Army Corps of Engineers to construct permanent river training structures in the Middle Mississippi and perform supplemental dredging to maintain a channel sufficient for commercial traffic. The Corps has for decades built and maintained structures—dikes, jetties, and chevrons—along the Middle Mississippi to ensure that the channel is at least nine feet deep and 300 feet wide for commercial navigation. In 1976, under the National Environmental Policy Act, the Corps prepared an environmental impact statement (EIS) assessing the project's ecological impacts. In 2013, the Corps decided to supplement its 1976 EIS, based on newly designated threatened and endangered species, and new information on the effects of river training structures and dredging. In the final supplemental EIS and record of decision, the Corps chose the “Continue Construction Alternative.” Because the exact locations and types of future river training structures are unknown, the supplemental statement studied environmental impacts at a programmatic level and will perform site-specific environmental assessments before actually building additional river training structures.In a challenge brought by environmental groups, the Seventh Circuit affirmed summary judgment for the government, rejecting arguments that the supplemental EIS did not comply with the Water Resources Development Act of 2007, 121 Stat. 1041, or the National Environmental Policy Act, 42 U.S.C. 4321. View "National Wildlife Federation v. United States Army Corps of Engineers" on Justia Law

An Illinois state agency oversees Metra, a railroad with passenger service over lines radiating from Chicago. For three lines, Metra owns the rolling stock, while Union Pacific supplies the track, the workforce, and ticket sales. Ticket revenue goes to Metra, which pays UP for its services. UP notified Metra that it would discontinue its services. Metra replied that UP cannot drop the service unless relieved of its obligations by the Surface Transportation Board. Metra argued that UP is locked into its relationship with Metra because the 1995 ICC Termination Act repealed 49 U.S.C. 10908, 10909, the only statutes giving the Board authority over the discontinuation of passenger service. UP argued that the repeal deregulated passenger rail service so that railroads can end passenger service when business considerations dictate. Federal law requires the Board’s permission to abandon all service over a line of track but UP will continue freight service; the lines will not be abandoned.The district court declined to defer to the Board’s primary jurisdiction because the dispute does not require any findings of fact by an agency. The Board agreed. The Seventh Circuit affirmed in favor of UP. The controlling contract has long expired. Any reduction in service, therefore, depends on “compliance with all applicable statutory and regulatory provisions.” To the extent that UP is a common carrier—rather than an independent contractor of Metra—it has unfettered authority to discontinue any service without the Board’s approval if it keeps the rails in place and continues running some trains. View "Union Pacific Railroad Co. v. Regional Transportation Authority" on Justia Law

Ye sought to recover against GlobalTranz, a freight broker, following the death of her husband in a highway accident. Ye claimed, under Illinois law, that GlobalTranz negligently hired the motor carrier (Sunrise) that employed the driver of the truck that caused the accident. Ye obtained a $10 million default judgment against Sunrise.The district court concluded that the Federal Aviation Administration Authorization Act’s express preemption provision in 49 U.S.C. 14501(c)(1) bars Ye’s claim against GlobalTranz and that the Act’s safety exception in 14501(c)(2)(A) does not save the claim. The Seventh Circuit affirmed, noting the significant economic effects that would result from imposing state negligence standards on brokers. Congress broadly disallowed state laws that impede its deregulatory goals, with a specific carveout for laws within a state’s “safety regulatory authority." Ye’s negligent hiring claim against GlobalTranz falls within 14501(c)(1)’s express prohibition on the enforcement of state laws “related to a ... service of any ... broker ... with respect to the transportation of property.” Rejecting the "safety exception" claim, the court reasoned that a common law negligence claim enforced against a broker is not a law that is “with respect to motor vehicles." View "Ye v. GlobalTranz Enterprises, Inc." on Justia Law

Jaranowski worked as a conductor for the Railroad for 22 years. While operating a railroad switch in 2020, he seriously injured his neck. He sued the railroad under the Federal Employers’ Liability Act (FELA), 45 U.S.C. 51, alleging that he was injured because the railroad failed to maintain the switch properly. He accused the railroad of ordinary negligence and negligence per se based on alleged violations of Federal Railroad Administration (FRA) Track Safety Standards, 49 C.F.R. 213. The district court concluded that Jaranowski had failed to present evidence that would support a finding that the railroad had actual or constructive notice of any defect in the switch before he was injured and granted the Railroad summary judgment.The Seventh Circuit reversed. Actual or constructive notice is required to violate the federal Track Safety Standards, however, Jaranowski presented sufficient evidence to create a genuine dispute as to whether the railroad at least should have known that the switch was defective before he was injured. A reasonable jury could accept Jaranowski’s account of the facts and the report of his expert, who examined the switch, to conclude that the Railroad’s prior inspection was performed without due care. View "Jaranowski v. Indiana Harbor Belt Railroad Co." on Justia Law

Humphrey was a Riteway driver. His trips began in Illinois, often ending in another state. In 2013 Humphrey drove a truck to Indiana. After he delivered the freight, Riteway directed him to another site in Fort Wayne. While driving to the pickup site, Humphrey’s truck collided with Wright's car. After cooperating with the police, Humphrey picked up his load and delivered it to Illinois. Wright sued Riteway in Indiana state court and obtained a default judgment. Riteway's Prime Insurance policy contained an endorsement that provides payments to an injured party even when the insurer need not defend or indemnify its client. A federal court determined that Riteway had forfeited the benefit of Prime’s policy but reserved questions about whether Wright could recover under the endorsement. The Indiana judiciary declined to allow Prime to attack the default judgment.Prime sought a declaratory judgment that the endorsement did not apply. The endorsement applies to any judgment “resulting from negligence ... subject to the financial responsibility requirements of Sections 29 and 30 of the Motor Carrier Act of 1980.” Those statutes have been repealed but the parties stipulated that 49 U.S.C. 31139(b)(1) applies and provides that all motor freight transportation from a place in one state to a place in another is covered. The district court ordered Prime to pay. The Seventh Circuit affirmed. Humphrey was engaged in interstate freight transportation under the statutory definition regardless of intent, whether a truck was carrying freight, or the “totality” of the circumstances. View "Prime Insurance Co. v. Wright" on Justia Law