BNSF Railway Prevails In Hazmat Transport Fee Challenge

Munger, Tolles & Olson represented BNSF Railway Company in winning a dispute barring California from levying fees for rail transport of hazardous materials.

On Sept. 13, 2018, the U.S. Court of Appeals for the Ninth Circuit affirmed a lower court’s ruling granting a preliminary injunction against the California Department of Tax and Fee Administration (CDTFA), which sought to implement a 2015 state law, SB 84, imposing a $45 fee per car carrying crude oil and gasoline, among other hazardous materials.

BNSF argued that the law put an unfair burden on railroads, as it did not apply the same standards to the trucking industry.

“The district court found that the Railroads would suffer irreparable harm if an injunction did not issue because some shippers would choose to ship hazardous materials by truck, or by other means, in order to avoid paying the fees mandated in SB 84,” wrote Judge William A. Fletcher in the opinion.

The Munger, Tolles & Olson team was led by Benjamin J. Horwich.