Big Win for the Confederated Tribes: Oil Trains in Oregon Face New Hurdle
March 11, 2017
The Confederated Tribes of the Umatilla Indian Reservation, Warm Springs Reservation of Oregon, and Bands of the Yakima Nation (collectively the “Treaty Tribes”) have been opposed to an Union Pacific oil-by-rail project that called for trains from oil-producing regions to deliver the crude to ports where ships could move it to refineries along the West Coast. Notwithstanding the oil train derailment in the City of Mosier last year, the Union Pacific Railroad (“Union Pacific”) seeks approval for a track expansion to increase the number of oil trains moving through the Northwest. The Wasco County Board of County Commissioners (“Wasco Board”) denied approval of the track expansion. The Wasco Board denied the project explaining that the rail expansion project affects treaty rights. Union Pacific appealed the denial to the Columbia River Gorge Commission (“Gorge Commission”) with jurisdiction over the decision under the Columbia River Gorge National Scenic Act.
Union Pacific sought review by the United States District Court for the District of Oregon claiming that the rail construction project is preempted by Interstate Commerce Commission Termination Act (ICCTA) in Union Pacific v. Runyon. Union Pacific sought a declaratory order stating that the ICCTA preempts the permitting process imposed by the County Ordinance, and that the County Ordinance impermissibly burdens interstate commerce in violation of the Commerce Clause under the U.S. Constitution.
After closely monitoring the development proposal, the Treaty Tribes immediately filed a Motion to Dismiss with prejudice (i.e. with no right to re-file the same case in federal court), for failure to name them as necessary parties to the lawsuit because the proceeding would impair or impede their ability to protect their treaty-reserved fishing rights. The Wasco Board and Oregon members of the Gorge Commission filed a concurring response agreeing that the tribes were necessary parties.
The court first considered whether treaty-reserved fishing rights may be an “interest” related to the subject matter of the action that makes the Treaty Tribes a necessary party. The court recognized that treaty-reserved fishing rights are a function of tribal sovereignty and allow tribes to enforce fishing laws against tribal members, and they are so strong that they survive conveyance of title to the underlying land. Further, the court found that these fishing rights closely relate to the subject of this lawsuit because the Wasco Board’s denial was based solely on the Treaty Tribes’ treaty-reserved fishing rights. Although Union Pacific argued that the case was not about fishing rights, but rather whether the preemption protection for rail construction project applied, the argument was a non-starter for the court. The court found that a party cannot avoid finding a party necessary to the suit merely by virtue of it own characterization of the issue. Moreover, if Union Pacific were to succeed on the merits of the preemption argument, the decision would affect the treaty-reserved fishing rights because it would enable the railway expansion project through land that is subject to those rights.
The court went on to find that no other party could adequately protect the Treaty Tribes rights in this case by analyzing the Shermoen factors. Although the Army Corps, one of the permittees for the Union Pacific railway expansion, has a fiduciary duty to take tribal treaty rights into consideration, the Corps was not a party to the case. No other defendants or intervenors represented they had the intent or ability to represent the Treaty Tribes’ interests. One last factor to consider is whether the Treaty Tribes would add new evidence or arguments that would bear on the adjudication of the preemption and Commerce Clause issues. The court determined that this factor was neutral because the tribes had not presented information on the factor. But in view of the all these factors together, the court determined that the Treaty Tribes are a necessary party.
The court also foreclosed the procedural remedy of “joinder.” Here, the Treaty Tribes specifically reserved their sovereign immunity so could not be compelled to join the case. The court also considered Union Pacific’s argument that the public rights exception applied, but the court concluded public rights exception did not apply because the Union Pacific claim was aimed at the Treaty Tribes’ interests. A full discussion of these items can be found in the opinion here.
The case is currently pending before the Gorge Commission through Union Pacific’s appeal of the Wasco Board decision. The court ruled that the appeal to the Gorge Commission provides an alternative forum for Union Pacific to attempt to overturn the denial of its permit application and argue its preemption question (or likely better phrased as a conflict of federal laws). The court ruled that administrative review by the Gorge Commission is appealable to state courts (the Gorge Commission is an interstate compact, and jurisdiction lies either in Washington or Oregon, as the case may be). The availability of this alternative forum weighed in favor of dismissing this case.
Now, consider the strategic decision making of Union Pacific. The court refers to it as “strategic maneuvering,” where Union Pacific decided to voluntarily seek Wasco County’s input, and by doing so, the Corps decided to defer to Wasco County’s determination of whether the application complied with the Columbia River Gorge National Scenic Area Act and its attendant tribal consultation requirements. The court factored in this strategic maneuvering in deciding to dismiss the case – in simple terms Union Pacific is getting what it asked for – the input of the County and its recognition of tribal rights.
We will likely see an appeal to the Ninth Circuit on the necessary party claim. And if the case moves forward with the Gorge Commission, then the commission will have the authority to handle preemption/conflict of law federal questions, and the Oregon state courts could ultimately be the appellate venue for those same federal questions.