DOT Must Redo Railroad Hazmat Plan Rule, DC Circ. Told

Law360 (July 15, 2019, 6:58 PM EDT) -- A new U.S. Department of Transportation rule ensuring railroads are prepared to handle oil spills and other accidents involving trains carrying hazardous materials must be retooled to safeguard railroads' confidential information, Union Pacific told the D.C. Circuit on Monday.

Union Pacific Railroad Co. asked the D.C. Circuit to order the DOT's Pipeline and Hazardous Materials Safety Administration to redo part of a rule it finalized in February requiring freight railroads to file a comprehensive oil spill response plan for high-hazard flammable trains, or HHFTs.

The rule also requires railroads to share operational information with state and tribal emergency response commissions, such as reasonable estimates of the number of HHFTs that the railroad expects to operate each week in each jurisdiction, the routes those trains will travel, the material being transported, and a contact person for state or local authorities.

"This is a simple case. Congress directed the Pipeline and Hazardous Materials Safety Administration to make rules that require railroads to share information about trains carrying crude oil with state and local authorities and 'establish security and confidentiality protections' for that information," Union Pacific said in an opening brief to the appeals court. "The agency did the first but not the second. That is unlawful."

The rule was first proposed in 2016 to fulfill a mandate in the long-term surface transportation funding bill, the Fixing America's Surface Transportation Act of 2015. But Union Pacific argues that the rule doesn't protect the confidential routing and traffic information that railroads have to include in the plans.

The Omaha, Nebraska-based railroad giant said PHMSA's rule "inexplicably contains no security and confidentiality protections" because the agency indicated it had determined — before Congress passed the FAST Act in 2015 — that this information is not sensitive and would not be harmful if released, according to the brief.

"Union Pacific is 'threatened with the loss of a right which [the FAST Act] was designed to protect,'" the railroad said. "And the loss of that right presents 'the risk of real harm,' because Union Pacific's confidential routing and traffic information is (as Congress and the agency have recognized) both security- and competitively-sensitive. The rule thus presents the precise risks that Congress sought to guard against in the FAST Act."

The rule is intended to give local communities more of a heads up so they'll be better prepared for potential accidents or derailments involving crude oil-carrying trains. It applies to HHFTs that are transporting petroleum oil in a block of 20 or more loaded tank cars and trains that have a total of 35 loaded petroleum oil tank cars, according to PHMSA. The rule took effect April 1, and railroads must make sure they're in compliance starting Aug. 27, PHMSA says.

But railroads and other industry watchers worried that the rule's stringent new reporting requirements would force railroads to disclose sensitive details — most of which would be subject to public disclosure laws such as the Freedom of Information Act — that would needlessly expose railroads and communities to security risks, hamper the railroads' competitiveness and increase railroads' compliance burden.

There's provision in the rule allowing railroads to "indicate" information they "believe is security sensitive or proprietary," which puts the states receiving those oil spill response plans "on notice" of "what information the railroads consider inappropriate for public release." But that's not enough, Union Pacific argues.

"Even if railroads identify sensitive information, nothing in the rule stops a recipient from disclosing that information in response to a public-records request, printing it in the newspaper, or — as one state has already done — posting it on a public website," the company said in reference to Oregon posting Union Pacific's oil spill response plan online.

Federal officials have previously explained that the data is intended for people with a need to know, including first responders at the state and local level, as well as other appropriate emergency response planners.

Representatives for the parties were not immediately available for comment on Monday.

Union Pacific is represented by Raymond A. Atkins, Matthew J. Warren, Tobias S. Loss-Eaton and Joshua W. Moore of Sidley Austin LLP and in-house counsel David P. Young, Melissa B. Hagan and Connie S. Roseberry.

The DOT and PHMSA are represented by Sushma Soni and Daniel Tenny of the U.S. Department of Justice's Civil Division.

The case is Union Pacific Railroad Co. v. Pipeline and Hazardous Materials Administration et al., case number 19-1075, in the U.S. Court of Appeals for the District of Columbia Circuit.