In a blow to the city’s ongoing efforts to shut down a hazardous material facility on the city’s West End, a federal body regulating railroads issued a ruling this week denying an attempt by city officials to exert their zoning authority over the operation. Although the Feb. 17 ruling by the Surface Transportation Board closes the city’s attempt to exert its regulatory authority, the city attorney’s office is still seeking to limit the number of trucks that can use city streets on a daily basis. That effort, prompted by a “haul route permit,” is still under consideration by Judge James Cacheris of the United States District Court in the Eastern District of Virginia.

“This is a bummer, but we’re still very hopeful on the federal lawsuit,” said Ingrid Sanden, president of the Cameron Station Civic Association. “We’re keeping our fingers crossed and looking toward the future.”

Last summer, former City Attorney Ignacio Pessoa filed a petition seeking a declaratory order making the transloading facility and its operation subject to the city's special use permit process. The Norfolk Southern Railroad, which owns the land where RSI Logistics operates an ethanol “transloading station,” replied that the city’s zoning authority was not applicable under federal laws governing “transportation by rail carrier.” At issue in the case was the question of whether the Surface Transportation Board had jurisdiction over the transloading operation at the Van Dorn Yard, consequentially preempting local zoning and regulatory authority.

“Under existing rules, state and local governments have the right to receive notice and to comment when a railroad proposes to abandon a railroad line in their community,” said Vice Mayor Del Pepper during a Surface Transportation Board hearing on the issue last summer. “Doesn’t it make sense that we should have an opportunity to comment when a new and potentially hazardous facility like this is going to be opened as well?”

This week, the board answered that question — ruling that facility is part of Norfolk Southern’s rail operations and that RSI is not conducting an independent business. Although board members encouraged “rail carriers” to contact local officials to inform them of planned transloading activities before commending operations, the ruling was clear that the city had no authority over the operation. Because the railroad owns the facility and spent its own money to construct the transloading infrastructure, board members rejected the city’s argument that RSI’s operation was not part of Norfolk Southern’s rail transporation service.

“There is no evidence that RSI holds itself out as providing transloading service at the facility or that RSI has any contractual relationships relating to the facility with any of the ethanol shippers,” the ruling concluded. “Indeed, a provision of the NS-RSI operating agreement specifically provides that RSI does not have the right to market the facility.”

The Surface Transportation Board’s seven-page ruling found that all of RSI’s activities were contractual services that were part of Norfolk Southern’s rail transportation business, which included ethanol transloading. Board members found that the city’s legal argument failed to show that the service RSI provides to the railroad company differ from any other type of contract service that a rail carrier might utilize to conduct business.

“We have found in this decision that the board has jurisdiction over the operations at the facility, and, thus, that federal preemption applies to those activities,” the board concluded. “Consequentially, local zoning and other requirements that could interfere with or prevent the transloading activities are preempted.”