Failure to State Claim – Diversity Jurisdiction

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7^th Circuit Court of Appeals

Case Name: Soo Line Railroad Company d/b/c Canadian Pacific v. Consolidated Rail Corporation, et al.,

Case No.: 19-3100

Officials: SYKES, Chief Judge, and BAUER and ST. EVE, Circuit Judges.

Focus: Failure to State Claim – Diversity Jurisdiction 

Soo Line Railroad Company, which we refer to by its business name, Canadian Pacific, sought to bring state-law claims under the diversity jurisdiction of the district court. Its suit centered on a trackage rights agreement—a contract governing one railroad’s use of another’s track—that the Indiana Harbor Belt Railroad Company had signed with its majority shareholders at a price that Canadian Pacific, the minority shareholder, alleged was detrimental to Indiana Harbor’s profitability.

Canadian Pacific, though, had a problem. The Surface Transportation Board (STB) has exclusive authority to regulate trackage rights agreements, or to exempt such agreements from its approval process, and it had exempted Indiana Harbor’s agreement. The defendants argued that, by effect of this exemption authority, two statutes—49 U.S.C. §§ 10501(b) and 11321(a)—independently preempted Canadian Pacific’s claims. The district court agreed with both arguments, but in this appeal we focus on only one. The court concluded that § 11321(a) preempted the claims and noted that Canadian Pacific had made no argument otherwise. Because we agree that Canadian Pacific failed to contest this basis for dismissal, we affirm the judgment on grounds of waiver.

Affirmed

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Derek A Hawkins is trademark corporate counsel for Harley-Davidson. Hawkins oversees the prosecution and maintenance of the Harley-Davidson’s international trademark portfolio in emerging markets.