Vermont Railway, Inc. v. Town of Shelburne et al

Filing 269

OPINION AND ORDER re: 209 Motion for Preliminary Injunction converted to a request for a permanent injunction. The Court permanently enjoins enforcement of the Storage Ordinance against the Railway and its facilities, and §§ 1950.1 and 1950.2(A) of the Towns Performance Standards against the Railway and its facilities are preempted and permanently enjoined. Signed by Judge William K. Sessions III on 12/7/2017. (law)

UNITED STATES DISTRICT COURT
FOR THE
DISTRICT OF VERMONT
VERMONT RAILWAY, INC.,
Plaintiff,
v.
TOWN OF SHELBURNE,
Defendant.

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Case No.: 2:16-cv-16

OPINION AND ORDER
This case arises out of Plaintiff Vermont Railway’s
(“Railway”) development of property located in Shelburne,
Vermont for use as a salt transloading facility (“transloading
facility” or “facility”). Currently before the Court is the
Railway’s Motion for Preliminary Injunction (ECF 209), which has
been converted to a request for a permanent injunction. Among
other things, the Railway now seeks an order permanently
enjoining Defendant Town of Shelburne (“Town”) from enforcing
its recently enacted Ordinance Regulating the Storage, Handling
and Distribution of Hazardous Substances (“Storage Ordinance”).
The Town passed the Storage Ordinance along with an
Ordinance to Regulate Motor Trucks on Town Highways (“Trucking
Ordinance”) on August 8, 2017.1 The Trucking Ordinance was passed
with an immediate effective date, and the Storage Ordinance had

1

The Storage Ordinance was subsequently amended on October 24,
2017.
1 

an effective date of October 7, 2017. On August 9, 2017, the
Town stated in a court filing that it would enforce these new
ordinances as well as the Town’s Zoning Bylaws2 and Subdivision
Regulations against the Railway. ECF 199.
Among other actions, the Storage Ordinance allows the Town
to impose daily fines on the Railway for violations of its salt
storage and release restrictions, to issue “health orders”
directing the Railway to remove the road salt, and to limit the
amount of fuel and other commodities the Railway can temporarily
store. The Court previously found that the facility would be
used primarily for unloading bulk salt arriving by rail for
local distribution by truck and for temporary storage in sheds
pending distribution. ECF 84, p. 19. These regulations would
impose severe restrictions on the Railway’s ability to conduct
its business.
The Court began a preliminary injunction hearing on
September 25, 2017, but ultimately postponed the hearing and
entered a Temporary Restraining Order (“TRO”) preventing the
Town from enforcing the Storage Ordinance during the intervening

2

The Town’s Performance Standards are part of its Zoning Bylaws.
2 

time.3 ECF 224. The Court held a two-day permanent injunction
Hearing on November 1-2, 2017.
After considering the evidence and testimony presented at
the hearing, as well as the post-hearing memoranda, the Court
concludes that the Storage Ordinance is preempted by the
Interstate Commerce Commission Termination Act (“ICCTA”). The
Storage Ordinance does not fit within the police power exception
to preemption, as detailed in Green Mountain R.R. Corp. v. Vt.,
404 F.3d 638, 643 (2d Cir. 2005) and Norfolk S. Ry. Co. v. City
of Alexandria, 608 F.3d 150, 160 (4th Cir. 2010), because (1) it
discriminates against the Railway and (2) the significant burden
it places on the Railway outweighs the Town’s inconclusive and
overstated public health and safety concerns. The Railway has
satisfied the requirements for a permanent injunction because it
has suffered an irreparable injury, remedies such as monetary
damages will not suffice, the balance of the hardships tilts in
its favor, and the public interest is not disserved by a
permanent injunction. See eBay v. MercExchange, L.L.C., 547 U.S.
388, 391 (2006). Thus, the Court permanently enjoins the

3

The TRO went into effect on October 6, 2017 and lasted for 14
days. ECF 224. The TRO did not need to be extended because the
Town agreed that it would not seek to enforce the Storage
Ordinance until the Court issued its order following the
permanent injunction hearing. ECF 243.
3 

enforcement of the Storage Ordinance against the Railway and its
facilities.
In the summer of 2016, the Court ordered the Town to
identify precisely the regulations it intended to enforce
against the transloading facility. ECF 84. Over a year later,
the Town identified 21 pages of its Zoning Bylaws and
Subdivision Regulations that it is seeking to enforce.4 ECF 199.
For many of these provisions, it is impossible for the Court to
conduct preemption and injunction analyses since it is not clear
precisely which regulations the Town is seeking to enforce or
which regulations the transloading facility is violating.
Therefore, the Court is generally not going to address the
Zoning Bylaws and Subdivision Regulations. However, these 21
pages the Town submitted to the Court include a section of the
Zoning Bylaws entitled “Performance Standards,” and §§ 1950.1
and 1950.2(A) under that heading have a very similar focus to
that of the Storage Ordinance. See ECF 199, Ex. 6, p. 8. Thus,
because §§ 1950.1 and 1950.2(A) of the Performance Standards are

4

The focus of the current dispute has largely been on the
Storage Ordinance, and the Town seems to have simply attached
numerous provisions of its Bylaws as an afterthought. See ECF
199. Further, the Court has already found some of these
regulations—specifically the ones concerning pre-construction
review—to be preempted. The Zoning Bylaws and Subdivision
Regulations have been virtually ignored by the parties in their
briefing.
4 

so similar to the Storage Ordinance, these two sections are
preempted and permanently enjoined.
BACKGROUND
On June 29, 2016, the Court granted the Railway’s request
for a declaratory judgment that the ICCTA preempts the Town’s
pre-construction zoning regulations as applied to the facility.5
ECF 84. The Court held that “the construction and operation of
the Railway’s planned intermodal facility constitute
‘transportation by [a] rail carrier[]’ as defined by the ICCTA.”6
Id. at 25. The Court denied the Town’s request for contrary
declaratory relief and a preliminary injunction. On September
17, 2016, the Town moved the Court for a temporary restraining
order, for relief from this Court’s June 29, 2016 Opinion and
Order, for a stay of its appeal of that order, and for expedited
discovery and a hearing. ECF 90. The Court held a five-day
evidentiary hearing on the Town’s motions on March 27-29 and
April 3 and 5, 2017. On June 28, 2017, the Court issued an
Opinion and Order denying the Town’s motions and reaffirming its
finding that the activity on the Shelburne property constitutes

5

The Court reserved judgment on the question of whether the
ICCTA preempts other, unspecified local regulations relating to
the operation of the Railway’s facility.
6

The Town appealed this Order, but later withdrew the appeal.
See Vermont Ry., Inc. v. Town of Shelburne, No. 16-2648, 2017
U.S. App. LEXIS 14646 (2d Cir. Jan. 26, 2017).
5 

transportation by a rail carrier and is thus subject to
preemption under the ICCTA. ECF 191.
In its June 29, 2016 order, the Court stated that “[w]hen
the Railway has finalized its plans for development, and when
the Town has indicated precisely which zoning regulations it
intends to enforce, the Court will determine whether those
regulations can survive ICCTA preemption pursuant to the police
power exception.” ECF 84, p. 3. The Railway produced copies of
the final plan for development (ECF 85) on July 22, 2016, and
requested that the Town identify which police powers, if any, it
intended to enforce against the project. The Railway then
constructed the first of the two planned salt storage sheds at
the facility and began operations in late fall 2016. The Railway
completed construction of the second salt shed in June 2017.
After the Town failed to specify the ordinances it intended
to enforce for over a year, the Railway filed a Motion to
Enforce on July 24, 2017 requesting an order that the Town
comply with the Court’s June 29, 2016 Order. ECF 196. The Town
requested an extension of time to file its response until August
9, 2017, the day after the Town Selectboard’s next meeting. ECF
197. At the August 8, 2017 meeting, the Town Selectboard enacted
the Storage Ordinance that is the subject of the present Motion
for Preliminary Injunction. On August 9, 2017, the Town filed
its Response to the Railway’s Motion to Enforce and stated that
6 

it would enforce the Storage Ordinance, the Trucking Ordinance,
and provisions contained in the Town of Shelburne Zoning Bylaws
and Subdivision Regulations with respect to the Railway’s
facility. ECF 199. The Town identified the Storage Ordinance as
falling under the post-construction police powers it intends to
enforce against the Railway, as requested by the Court’s June
29, 2016 Order.
The Railway filed a Reply to the Town’s Response on August
11, 2017, arguing that “[w]ith respect to the Zoning Bylaws and
the Ordinance Regulating Motor Trucks on Town Highways, the Town
has failed to comply with the Court’s Order by indicating
‘precisely’ the regulations it intends to enforce.” ECF 200. The
Railway requested an order requiring the town to identify the
provisions in these regulations it intends to enforce. Id. The
Railway also argued that the Storage Ordinance is preempted and
noted that it would be challenged in a separate filing (the
present Motion for Preliminary Injunction). Id.
On August 21, 2017, the Court entered Final Judgment on the
June 29, 2016 Declaratory Order. ECF 204. The Court stated that
“[i]n accordance with that Order dated June 29, 2016 (ECF 84),
and the Opinion and Order dated June 28, 2017 (ECF 191), the
Interstate Commerce Commission Termination Act of 1995 (“ICCTA”)
preempts the Town of Shelburne’s pre-construction permit
requirement and related zoning regulations as to the Shelburne
7 

transload facility.” Id. The Town did not appeal Final Judgment
and the deadline to do so has now passed.
The Railway filed the present Motion for Preliminary
Injunction on September 1, 2017. ECF 209. The Town responded to
the Motion on September 18, 2017. ECF 216. At the beginning of
the September 25, 2017 preliminary injunction hearing, it was
apparent that the parties were not ready to proceed, and the
Court decided to postpone the hearing. After the parties
conducted discovery, the hearing was converted to a permanent
injunction hearing, which was held on November 1-2, 2017.
THE STORAGE ORDINANCE
Pursuant to its municipal charter, as codified in 24A
V.S.A. § 147, the Town adopted the Storage Ordinance on August
8, 2017, with an effective date of October 7, 2017. The Town
subsequently enacted an amended Storage Ordinance on October 24,
2017 with an immediate effective date. Storage Ordinance § 15.0.
The Storage Ordinance states that it is being adopted by the
Town “pursuant to its police powers,” with the aim of
“protecting the health, safety and welfare of its citizens from
the inherent risks associated with the storage, handling and
distribution of hazardous substances, which may be ignitable,
corrosive, reactive and/or toxic.” Id. § 1.0.
The Storage Ordinance sets quantity, duration, and location
restrictions as to the storage of certain substances. A
8 

substance is deemed to be stored when it is located on a site or
in a facility for more than seventy-two hours.7 Id. § 5.0 The
Storage Ordinance prohibits the storage of substances above
specified quantities within 250 meters of any school or
waterway.8 Id. § 6.0. Those specified quantities are: 550 tons9
of Sodium Chloride (road salt), Calcium Chloride, Magnesium
Chloride, or Potassium Chloride; 2,000 gallons10 of Hydraulic
Oil, Diesel Fuel, Unleaded Fuel, Heating Oil, Propane, Motor
Oil, Natural Gas, or Petroleum Crude Oil; and 34,500 gallons11 of
Ammonia, Chlorine, or Hydrogen Fluoride. Id. Table 1: Storage
Limitations.
The Storage Ordinance also prohibits the release or
discharge of the substances listed above within the Town of

7

The plan for the transloading facility is to store road salt
for months at a time (until it is needed in the winter).
8

The transloading facility is located within 250 meters of the
LaPlatte River.
9

The Railway’s facility holds 80,000 tons. Notably, the capacity
of the Town’s salt shed is 550 tons. See Tr. 254:3-12.
10

A locomotive fuel tank can hold as much as 3,000 gallons of
diesel fuel. See Tr. 69:22-70:5. The Storage Ordinance exempts
the contents of fuel tanks where that tank is used for actively
operating the railcars.
11

34,500 gallons happens to be the exact volume that a rail tank
car holds. See Tr. 78:2-17.
9 

Shelburne (except for specified purposes such as road and
driveway de-icing).12 Id. § 5.0, 6.0.
The Storage Ordinance permits the inspection of facilities13
by either the Town’s Health Officer or other designated official
in order to enforce the provisions of the Ordinance. Id. § 9.0.
It institutes a process whereby the Town Health Officer and the
Town Selectboard can issue “Health Orders” to require noncomplying sites to come into compliance and/or take action to
remove the non-complying substance. Id. The Storage Ordinance
also institutes a fine of $800.00 per day for violation of the
ordinance, with each day of the violation constituting a
separate offense. Id. § 10.0. If the local Board of Health
brings an action in Superior Court for a violation, the Storage
Ordinance states that the violator may be subject to civil
penalties not to exceed $10,000.00 per violation, with each day
constituting a separate violation. Id. Finally, the Storage
Ordinance notes that these penalties may be in addition to any
costs and fees incurred by the town to “conduct the removal,
remediation or monitoring of the site itself.” Id.

12

This would likely cover any spillage of road salt that occurs
in the transloading process.
13

“Facility” is defined to include buildings, structures, rail
cars, and “[a]ny site or area where a hazardous substance is
present on site, has been deposited, is stored, disposed of,
placed or otherwise is located.” Id. § 5.0.
10 

THE TRANSLOADING FACILITY
The Railway has undergone an extensive permitting process
for its transloading facility through the State of Vermont and
has implemented a sophisticated environmental monitoring and
mitigation plan. The Railway hired a professional environmental
consultant, Mr. Jeffrey Nelson of VHB, to oversee its MultiSector General Permit (“MSGP”) application. As mandated by the
MSGP, the Railway prepared a Storm Water Pollution Prevention
Plan (“SWPPP”) and applied for an authorization to discharge
from the Vermont Department of Environmental Conservation
(“DEC”). The Town was invited to, and did, participate in the
SWPPP process. The DEC, in consultation with the Vermont
Department of Fish and Wildlife and other State agencies,
considered the plan for the facility and its potential impact on
water quality, wetlands, and endangered species. Following this
review, the DEC approved the SWPPP and issued an authorization
to discharge on November 21, 2016.14 See Railway Ex. 30. An
annual report must be filed with the DEC disclosing any SWPPP
compliance issues as well as any corrective action taken. See
Railway Ex. 30.
The SWPPP mandates groundwater and surface water monitoring
as well as adherence to numerous environmentally-focused best

14

Notably, the Town did not appeal this authorization.
11 

management practices (“BMPs”). Importantly, compliance with the
SWPPP is required by the DEC. See Tr. 523:12-25; Railway Ex. 30
§ 4; Vermont SWPPP Instruction Booklet, p. 18;15 Vermont SWPPP
Template, p. 20 and Appendix F.16 Several monitoring wells were
installed around the transloading facility as well as in the
LaPlatte River. See Railway Ex. 29 and 31.
VHB is monitoring the LaPlatte River both upstream and
downstream of the facility, and the measurements have shown no
impact from the facility downstream in the river. See Tr.
176:16-19. Increased levels of sodium chloride were recently
detected in Monitoring Wells 301 and 306 on the facility site
itself. Mr. Nelson and other VHB employees immediately
investigated the cause of this increase. See TR. 155:14-16;
166:12-25. They concluded that salt had spilled during the
transloading process17 and a problem with the pitch of the
pavement in one area of the facility had caused some stormwater
to flow into the wetland (where these monitoring wells are

15

Available at:
http://dec.vermont.gov/sites/dec/files/wsm/stormwater/docs/Multi
SectorGeneralPermit/sw_SWPPP_instruction_booklet.pdf.
16

Available at:
http://dec.vermont.gov/sites/dec/files/wsm/stormwater/docs/Multi
SectorGeneralPermit/sw_fillinable_SWPPP.doc.
17

These increases were not related to the actual storage of salt
in the sheds. Tr. 168:10-20. Notably, there were not
significantly elevated readings at the various other parts the
property (i.e. near the storage sheds). Tr. 155:10-12.
12 

located) instead of into the stormwater basin. VHB and the
Railway quickly worked to correct the problem. Tr. 156:12159:11. This example demonstrated how the SWPPP functions—the
monitoring requirements caught the problem and prompted
corrective action.
DISCUSSION
I.

PREEMPTION
A.

Legal Standard

In its June 29, 2016 Order, the Court discussed at length
the Supremacy Clause of the United States Constitution, the
history of the ICCTA, and the limited police powers local bodies
retain to protect public health and safety. ECF 84. A brief
recapitulation of that discussion is warranted here in order to
assess the validity of the Storage Ordinance.
The Supremacy Clause of the United States Constitution
provides that federal law “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.
Accordingly, “[u]nder the doctrine of preemption, a corollary to
the Supremacy Clause, any state or municipal law that is
inconsistent with federal law is without effect.” Greater New
York Metro. Food Council, Inc. v. Giuliani, 195 F.3d 100, 104-05
(2d Cir. 1999) (abrogated on other grounds). “Federal law may
preempt state and municipal law expressly or impliedly,” id. at
13 

105, and express preemption occurs “when a federal statute
expressly directs that state law be ousted,” Island Park, LLC v.
CSX Transp., 559 F.3d 96, 101 (2d Cir. 2009) (internal quotation
omitted). In the present case, the statute at issue is the
ICCTA.
The ICCTA vested the Surface Transportation Board (“STB”)
“with broad jurisdiction over ‘transportation by rail
carriers.’” Id. (quoting 49 U.S.C. § 10501(b)(1)). The ICCTA
gave the STB exclusive jurisdiction over “(1) transportation by
rail carriers . . . and (2) the construction, acquisition,
operation, or discontinuance of . . . tracks, or facilities.” 49
U.S.C. § 10501(b). The ICCTA defines “transportation” to
include:
(A) a locomotive, car, vehicle, vessel, warehouse,
wharf, pier, dock, yard, property, facility,
instrumentality, or equipment of any kind related to
the movement of passengers or property, or both, by
rail, regardless of ownership or an agreement
concerning use; and
(B) services related to that movement, including
receipt, delivery, elevation, transfer in transit,
refrigeration, icing, ventilation, storage, handling,
and interchange of passengers and property.
49 U.S.C. § 10102(9). It defines “rail carrier,” in relevant
part, as “a person providing common carrier railroad
transportation for compensation.” 49 U.S.C. § 10102(5). In its
June 29, 2016 and June 28, 2017 orders, the Court found that the
activity at the Railway’s facility constitutes transportation by

14 

a rail carrier for purposes of 49 U.S.C. § 10501. ECF 84; ECF
191.
In addition to the above-cited jurisdiction provision, the
ICCTA contains an express preemption clause. Specifically, the
statute indicates that “the remedies provided under this part
with respect to regulation of rail transportation are exclusive
and preempt the remedies provided under Federal or State law.”
49 U.S.C. § 10501(b). Interpreting that clause, the Second
Circuit has held that the “ICCTA preempts all state laws that
may reasonably be said to have the effect of managing or
governing rail transportation, while permitting the continued
application of laws having a more remote or incidental effect on
rail transportation.” Island Park, LLC, 559 F.3d at 102
(internal quotations omitted).
Because the Court has already determined that the
activities conducted at the facility constitute transportation
by a rail carrier and are thus subject to the ICCTA’s preemption
clause, the Court now needs only to determine whether the
Storage Ordinance falls within the scope of ICCTA preemption.
N.Y. Susquehanna & W. Ry. Corp. v. Jackson, 500 F.3d 238, 252
(3d Cir. 2007) (hereinafter “N.Y. Susquehanna”). As noted above,
the plain language of the ICCTA grants the STB broad authority
to regulate the railway industry. Nonetheless, it is well
established that “not all state and local regulations are
15 

preempted [by the ICCTA]; local bodies retain certain police
powers which protect public health and safety.” Green Mountain
404 F.3d at 643. In order for a state or local regulation to
escape ICCTA preemption under the police power exception, the
regulation “must not (1) discriminate against rail carriers or
(2) unreasonably burden rail carriage.” Norfolk S. Ry. Co. v.
City of Alexandria, 608 F.3d 150, 160 (4th Cir. 2010) (citing
N.Y. Susquehanna, 500 F.3d at 254 (citing Green Mountain, 404
F.3d at 643)). The Second Circuit has further explained that
state and local regulations are not preempted “at least to the
extent that the regulations protect public health and safety,
are settled and defined, can be obeyed with reasonable
certainty, entail no extended or open-ended delays, and can be
approved (or rejected) without the exercise of discretion on
subjective questions.” Green Mountain, 404 F.3d at 643.
B.

The Storage Ordinance is Preempted

The Storage Ordinance enacted by the Town does not meet the
requirements of the police power exception to ICCTA preemption.
First, the timing of its enactment, the focus and thresholds
included in it, and the severe penalties permitted by it all
point toward discrimination against the Railway. Second, the
Storage Ordinance would place significant restrictions on when
and where rail cars move and when and where rail commodities are
shipped and stored. These restrictions as applied to the
16 

facility unreasonably burden rail transportation and do not
meaningfully protect public health and safety. Thus, the Storage
Ordinance is not a valid use of the Town’s police powers and is
preempted by the ICCTA with respect to the Railway’s facility.
1.

Discrimination

The Storage Ordinance was enacted one day before the Town
submitted its Response to the Railway’s Motion to Enforce the
Court’s June 26, 2016 Order. The Town argues that an ordinance
of this nature has been contemplated by the Town for several
years, long preceding the Railway’s transloading facility. While
it may be true that the Town has considered regulating hazardous
materials generally in the past, the timing of the Storage
Ordinance’s enactment in the context of the present case is
indicative of a desire to specifically target the Railway’s
facility. Similarly, the focus of the Ordinance on salt storage
and the threshold limits point towards discrimination. The
Storage Ordinance permits storage of up to 550 tons of salt,
which allows the Town’s salt shed to continue to operate despite
the fact that it is located adjacent to a school and the
LaPlatte River. As there are only two salt storage facilities in
Shelburne (the Town’s salt shed and the Railway’s facility), the
Railway points out that its facility is the only facility to
which the salt storage provisions of the Storage Ordinance would
apply. Similarly, provisions of the Storage Ordinance restrict
17 

the temporary storage of commodities such as fuel transported by
the Railway but exempt from its regulations existing gas
stations and “heating oil [], propane or natural gas, if held in
a storage tank on a residential, institutional, governmental or
commercial property strictly for the home, business or property
owner’s residential or commercial [] needs.” Storage Ordinance §
6.0. The Storage Ordinance also permits the release/discharge of
road salt into the environment relating to road and driveway deicing purposes but likely prohibits it relating to the
facility’s transloading process. Id. § 5.0; 6.0. Based on the
focus, thresholds, and practical impact, these provisions
clearly target and discriminate against the Railway’s facility.
The testimony of several Town Selectboard members at the
permanent injunction hearing supports a finding that the Storage
Ordinance was enacted as a result of this litigation and in an
effort to discriminate against the Railway. While evidence was
presented that the Town had concerns about hazardous materials
in general for several years, there was no discussion of
problems created by the storage of road salt, nor the drafting
or enacting of the Storage Ordinance, until after the Court’s
ruling on June 28, 2017. Selectboard members Dr. Colleen Parker,
Dr. Josh Dein, and former Selectboard Vice Chair John Kerr
testified that that they first heard of the drafting of the
Storage Ordinance in either July or August of 2017. See Tr.
18 

505:7-12; 280:12-15; 295:23-296:5. Selectboard Chairman Gary von
Stange stated that: “Certainly this litigation has impacted the
passage of the [Storage] ordinance, but the passage of the
[Storage] ordinance followed the same exact path of every other
ordinance and it was targeted towards the substance just like
every other ordinance we’ve passed.” (Tr. 516:4-9).
In response to public concern about provisions in the
Storage Ordinance enacted on August 8, 2017, the Town made
several changes and enacted an amended Storage Ordinance on
October 24, 2017. Fuel tank limits were increased, Town
residents are now clearly permitted to spread road salt on their
driveways, and clarifications were made with respect to the
impact on existing gas stations. Tr. 63:1-12. Notably, while
many other interested parties’ concerns about the Storage
Ordinance were resolved, the Railway’s concerns were not
meaningfully addressed. The 550 ton sodium chloride storage
limit was not increased. The storage time limit was increased
from twenty-four hours to seventy-two hours, but this does not
meaningfully help the Railway, as the plan for the facility is
to store salt until it is needed by customers during the winter
months.
The Town’s contention that the Storage Ordinance is one of
general applicability may be a matter of some dispute.
Nonetheless, the timing of its enactment with respect to this
19 

litigation, as well as the fact that its road salt restrictions
essentially only apply to the Railway’s facility, clearly show
discrimination.
2.

Unreasonable Burden

The Storage Ordinance would have a severe impact on the
Railway’s operations at the facility. This impact needs to be
balanced against the Town’s interest in protecting public health
and safety.
i.

Impact on the Railway

The Storage Ordinance would impose a seventy-two hour limit
on the storage of salt and other materials at the facility.
Storage Ordinance § 5.0. The Railway’s operational plan is to
load salt into storage sheds at the facility during the summer
months when it is more efficient, and to have the salt ready
when needed during the winter months. Putting a seventy-two hour
time restriction on storage at the facility is not feasible.
Both before and during the winter, customers throughout Vermont—
such as the Town itself—will receive shipments of salt from the
facility as needed to replenish their salt sheds. This
logistical plan would be significantly impeded by a requirement
that the salt leave the facility within seventy-two hours of its
arrival.
Furthermore, the Storage Ordinance would limit the quantity
of salt stored at the facility to 550 tons. Id. § 6.0, Table 1.
20 

The Railway’s facility is designed to store 80,000 tons of salt.
Without this storage capacity, there is no way to satisfy
customer demand. Additionally, without this capacity, the
Railway will be in breach of its contract with Cargill (the
owner of the road salt). The Storage Ordinance would also
regulate the contents of rail cars on tracks and sidings in
Shelburne. Id. § 5.0. These tracks and sidings are already
subject to extensive federal regulations. Finally, the Storage
Ordinance prohibits the “release of [salt] into the
environment.” Id. § 5.0; see also §6.0(B). The term “release” is
potentially vague enough to permit the Town to take enforcement
action in response to the unloading of salt at the facility.
The Town suggests that the Railway could simply build a new
transloading facility in another town despite the fact that the
existing transloading facility purportedly cost $5.5 million to
build and is in a strategic location. The Town has offered Mr.
Gary Hunter, a railroad operations expert, who opined that
operations at the facility could be halted and moved to another
town, such as Ferrisburgh, Vermont. Mr. Hunter also stated that
the Railway could comply with the seventy-two hour storage
limitation by immediately shipping the salt to other sites.
Neither of these suggestions are remotely feasible. If the
facility were located in Ferrisburgh, the trucks transporting
the road salt would need to drive the entire length of the Town
21 

of Shelburne to reach the interstate, which would likely have a
greater impact on public welfare as compared to the current
location (which minimizes truck traffic through the Town). Also,
the whole point of the facility is for it to be gradually filled
during the summer months and then unloaded when the salt is
needed during the winter months. Mr. Hunter’s suggestion about
compliance with the seventy-two hour time limit is not
realistic. In listening to Mr. Hunter’s testimony, it was
apparent that he lacked familiarity with the particularities and
needs of the Vermont region, the Town, and the Railway.
ii.

Public Health and Safety Concerns

A significant portion of the testimony at the permanent
injunction hearing focused on whether the Storage Ordinance
actually promotes public health and safety and whether the
facility is actually a danger. After a thorough review process,
the Vermont Department of Environmental Conservation
specifically permitted the activities that are occurring at the
transloading facility. The DEC is also overseeing compliance
with the SWPPP’s monitoring requirements. The Court is not
convinced that the Town had a reasonable basis for classifying
road salt as a hazardous substance that is harmful to public
health and safety and attempting to regulate it as such. The
Court is also not convinced that the activities at the Railway’s
facility that appear to violate the Storage Ordinance are
22 

sufficiently dangerous to public health and safety to escape
ICCTA preemption. And the Court is not convinced that monitoring
by DEC would be inadequate to protect public health.
First, the Town’s experts knew of no other federal or state
legislation that classified road salt as a hazardous material
aside from that of the Town of Shelburne. See Tr. 436:15-20;
386:5-11. Second, the Railway’s facility is a brand new,
professionally engineered facility with an extensive
environmental monitoring system in place. Comparatively, it
appears that the only other salt shed in Shelburne (the one
owned by the Town that is effectively exempted from the Storage
Ordinance) does not have any such environmental monitoring in
place. While the Town’s expert, Mr. Hunter, focused on the need
to protect the “health, safety, and welfare” of the Town’s
residents, see, e.g., Tr. 458:1-2; 474:13-14; 478:15-16; 478:2122; 490:18; 491:6-7, those same concerns are some of the primary
goals of the facility’s SWPPP. Further, the State of Vermont has
played an active role in analyzing the public health and safety
concerns with the facility. Third, the Town has not put forward
any convincing evidence that the storage duration or storage
quantities of road salt are dangerous to public health and
safety. The Railway’s storage of road salt, by definition, keeps
the road salt contained. From both a common sense and scientific
perspective, it is hard to see how the mere storage of road
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salt, in any quantity and for any duration, negatively impacts
public health. The Town has highlighted various articles
demonstrating environmental concerns with the spreading of road
salt on roads, but there has been a total dearth of convincing
information as to how the storage itself is dangerous.
The Storage Ordinance also prohibits the release or
discharge of road salt except for de-icing of roads, driveways,
and sidewalks. Storage Ordinance § 5.0. This would likely
prohibit any spillage that occurs during the Railway’s
transloading process. It is unclear why this likely minor
spillage would be regulated while the extensive and deliberate
release of road salt throughout the town for the de-icing of
roads would be exempted. The transloading process is a necessary
part of the Vermont region’s road salt operations. Further, one
questions the Town’s sensitivity to the environmental impact of
road salt when the Town itself deliberately releases road salt
into the environment by spreading it all over the Town’s roads
throughout the winter in an effort to maintain safe driving
conditions.
The mere duration and quantity of road salt that is stored
appears to have no impact on the purported health and safety
risks. The transloading process and any related spillage is
being closely monitored by the SWPPP. The transloading process

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is a necessary component of the overall road salt operation, and
the Railway is clearly attempting to minimize spillage.
While it is true that the ICCTA does not preempt all local
regulations and a police power exception exists, the Storage
Ordinance does not fit within the exception. The Court is not
convinced that the Storage Ordinance achieves any meaningful
health or safety goals that outweigh the significant burden it
places on the Railway.
PERMANENT INJUNCTION
A.

Legal Standard

A plaintiff seeking a permanent injunction must satisfy a
four-factor test before a court may grant such relief:
(1) that it has suffered an irreparable injury; (2)
that remedies available at law, such as monetary
damages, are inadequate to compensate for that injury;
(3) that, considering the balance of hardships between
the plaintiff and defendant, a remedy in equity is
warranted; and (4) that the public interest would not
be disserved by a permanent injunction.
eBay v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006).
B.

Enforcement of the Storage Ordinance against the
Railway and its facilities is permanently enjoined

The Railway has satisfied the four-factor test for a
permanent injunction as to the Storage Ordinance. See eBay, 547
U.S. at 391. First, its injury is irreparable because it cannot
divest itself of the 80,000 tons of salt its sheds hold within
seventy-two hours. Further, the entire point of the facility is

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to store salt until it is needed by customers during the winter—
a much greater time period than seventy-two hours. The Railway
has spent $5.5 million on the transloading facility and,
according to Railway President Mr. David Wulfson, the Railway
would potentially go out of business if it attempted to
construct a new facility in a different location. This
restriction would also put the Railway in breach of its longterm, multi-million-dollar contract with Cargill, the owner of
the road salt.
Second, the only adequate remedy for this injury is to
enjoin the enforcement of the Storage Ordinance. Monetary
damages will not suffice, as it is not feasible for the Railway
to operate in constant violation of a Town ordinance. Third, the
balance of the hardships tilts in the Railway’s favor. The
facility is already regulated by the State of Vermont, has
received a permit to discharge, and its environmental impact is
constantly monitored pursuant to its SWPPP. The burden the
Storage Ordinance places on the Railway is very significant,
while the Town has failed to establish a sufficient basis for
its public health and safety concerns. Finally, the public
interest is not disserved by this permanent injunction. In fact,
in the absence of this injunction, the public would likely be at
much greater risk because of the serious impact the Storage
Ordinance would have on this winter’s road salt operations.
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C.

Performance Standards

In addition to its request for an order permanently
enjoining enforcement of the Storage Ordinance, the Railway
seeks an order permanently enjoining the Town from enforcing its
Performance Standards, which are part of the Town’s Zoning
Bylaws, against the Railway and its facilities.
The Town has been directed to identify precisely which
police power regulations it intends to enforce. ECF 84. The Town
has not identified any violations of its Zoning Bylaws or
Subdivision Regulations—the Town has merely attached numerous
provisions without any mention of how the transloading facility
is in violation of any particular provision.18 ECF 199, Ex. 6.
The parties have not focused on these provisions in their
briefing.
Given the lack of attention paid to the Zoning Bylaws and
Subdivision Regulations, the Court is generally not going to
address them. That being said, §§ 1950.1 and 1950.2(A) of the
Performance Standards are extremely similar to the Storage
Ordinance. Section 1950.1 prohibits the use of any land or
building in a manner creating a dangerous, noxious, or otherwise

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The Court also notes that many of the provisions of the Town’s
Zoning Bylaws and Subdivision Regulations relate to the preconstruction review process that the Court has already found to
be preempted.
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objectionable use or hazard. See ECF 199, Ex. 6, p. 8. Section
1950.2(A) states that “[a]ll activities involving use, handling
or storage of hazardous material shall be provided with adequate
safety devices against the hazard of fire and explosion” and
that the “[s]torage of flammable liquids, with the exception of
propone gas and gasoline/diesel fuel in containers of six
gallons or less, in residential areas is prohibited.” Id. These
provisions could be enforced to prohibit the same activities the
Town intended to prohibit with the Storage Ordinance, and their
enforcement would place the same significant burden on the
Railway. Thus, for the same reasons discussed above in Section
II.B with respect to the Storage Ordinance, §§ 1950.1 and
1950.2(A) of the Performance Standards are preempted and their
enforcement with respect to the transloading facility is
permanently enjoined.
D.

Enforcement of all police powers in the future is not
enjoined

Finally, the Railway has essentially requested an order
from the Court stating that the Town is enjoined from enforcing
any and all zoning or subdivision regulations under the Town’s
police powers ever into the future. The Court appreciates the
bitterness of this dispute, but this request is a step too far.
Such an order would forever bar the Town’s exercise of its
police powers even if enacted by subsequent selectboards. While

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not issuing such a broad injunction, the Court notes that the
Railway would certainly have recourse if it is subjected to
frivolous litigation related to its transloading facility in the
future.
CONCLUSION
The storage facilities constructed by Vermont Railway are
technologically sophisticated structures designed to minimize
leakage of salt into the environment. The facilities are
monitored closely through systems reviewed and approved by the
Vermont Department of Environmental Conservation. In light of
the State’s involvement in the storage facilities and efforts by
the Railway to minimize environmental impact, the Court is
convinced these structures do not pose an irresponsible risk to
the health and safety of the community. Shelburne’s Storage
Ordinance and §§ 1950.1 and 1950.2(A) of its Performance
Standards pose unreasonable restrictions on the Railway in its
operation of the storage facilities and are preempted under the
ICCTA. Enforcement of the Storage Ordinance and §§ 1950.1 and
1950.2(A) of the Town’s Performance Standards against the
Railway and its facilities is permanently enjoined.

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Dated at Burlington, in the District of Vermont, this 7th
day of December, 2017.
/s/William K. Sessions III
William K. Sessions III
District Court Judge

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