WI: Railroad crossing changes within highly regulated industry exception

A railroad and the City of Fond de Lac were engaged in negotiations to replace a crossing with an overpass. The Wisconsin DOT wanted a soil sample off the right of way as part of its due diligence to construct the overpass. Relocating crossings and railroad right of way is subject to state law, always has been, and it’s clearly highly regulated. The court even cites the railroad drug testing case of Skinner. [Not even mentioned is implied consent from agreeing to a study and open fields because how does a railroad have a right of privacy on a railroad track?] Wisconsin Central Ltd v. Gottlieb, 2013 WI App 61, 348 Wis. 2d 141, 832 N.W.2d 359 (2013):

P17 Railroad operations—their construction, alteration, maintenance, and daily operations—are heavily regulated by state and federal statutes and administrative codes. See, e.g., Wis. Stat. chs. 190-92, 195, and Skinner v. Railway Labor Execs. Ass’n, 489 U.S. 602, 109 S. Ct. 1402, 103 L. Ed. 2d 639 (1989). WCL’s ability to close or alter its tracks where they cross public roadways is governed by state statutes, see Wis. Stat. §§ 195.28 and 195.29. WCL followed that law when it wanted to close or alter the crossing at Lakeshore Drive in North Fond du Lac, by initially petitioning the OCR in Petition No. 9164-RX-611. While WCL voluntarily withdrew its petition to close the crossing, it also voluntarily complied with the OCR’s order that it cofund (with the village) a study to develop a plan to change the crossing. And it was that study, done on behalf of the village and WCL, which expressly provided that “any project alternative selected for further development should include a HAZMAT investigation for the selected route,” and that such investigation “may require field sampling of soils and laboratory testing.” Thus, when the OCR ultimately approved of the parties’ settlement and authorized the village to construct the crossing “consistent with Alternative B as set forth in Exhibit 1,” it was also ordering that environmental due diligence would have to take place as set forth in the study.

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P20 We also reject WCL’s assertion that the DOT’s involvement in the overpass project and, in particular, its involvement in the environmental sampling of the railroad’s property is “anomalous.” WCL vehemently argues that the DOT is an agency it “does not answer” to and “is not regulated by.” But while WCL is correct as far as it goes—it is true that the DOT is not the state agency with regulatory authority over railroads—WCL’s argument ignores the fact that the DOT’s area of authority, the highway system, quite literally intersects with railroads on occasion.

P21 In fact, both state and federal regulations expressly direct how the DOT is to proceed in situations involving railroads. See, e.g., Wis. Admin. Code TRANS ch. 30 (program of loans for relocation of railroads and public utilities); Wis. Admin. Code § TRANS 400.08(1)(a)3. and (1)(c)1.c. In particular, as WCL itself pointed out at oral argument, the DOT regulations requiring the DOT to perform environmental due diligence in this project in large part mirror federal regulations that specify in minute detail exactly what sort of environmental due diligence must be done for a myriad of transportation projects.