                                                                                                                           Opinions of the United
2004 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


9-2-2004

Hi Tech Trans LLC v. State of NJ
Precedential or Non-Precedential: Precedential

Docket No. 03-2773




Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2004

Recommended Citation
"Hi Tech Trans LLC v. State of NJ" (2004). 2004 Decisions. Paper 290.
http://digitalcommons.law.villanova.edu/thirdcircuit_2004/290


This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova
University School of Law Digital Repository. It has been accepted for inclusion in 2004 Decisions by an authorized administrator of Villanova
University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.
                        PRECEDENTIAL              SCHILLER, District Judge*

   UNITED STATES COURT OF                         Argued: September 19, 2003
          APPEALS
    FOR THE THIRD CIRCUIT                         (Filed: September 2, 2004)

                                         ANDREW L. INDECK, ESQ. (Argued)
                                         Scarinci & Hollenbeck, LLC
         Nos: 03-2773/2849               1100 Valley Brook Avenue
                                         Lyndhurst, NJ 07071
  HI TECH TRANS, LLC; DAVID              Attorneys for Appellants
           STOLLER,
                                         PETER C. HARVEY, ESQ.
                  Appellants             Attorney General of New Jersey
                                         ANDREA M. SILKOWITZ, ESQ.
                                         Assistant Attorney General
                   v.                    JAMES H. MARTIN, ESQ. (Argued)
                                         Deputy Attorney General
   STATE OF NEW JERSEY,                  R. J. Hughes Justice Complex
      DEPARTMENT OF                      25 Market Street
ENVIRONMENTAL PROTECTION;                P.O. Box 112
WOLFGANG SKACEL, C.H.M.M.*;              Trenton, NJ 08625
  BRADLEY M. CAMPBELL*                   Attorneys for Appellees

*(Amended in accordance with Clerk's
       Order dated 7/22/03)
                                                          OPINION


Appeal from the United States District
                 Court
     for the District of New Jersey      McKEE, Circuit Judge.
     (D.C. Civil No. 03-cv-02751)
                                                Hi Tech Trans, LLC, which
District Judge: Hon. Faith S. Hochberg
                                         operates a solid waste disposal facility in
                                         Newark, New Jersey, and its Chairman and
                                         Chief Executive Officer, David Stoller
                                         (hereinafter collectively referred to as “Hi
Before: McKEE and SMITH, Circuit
           Judges, and
                                              *
                                               Honorable Berle M. Schiller, U.S.
                                         District Judge for the Eastern District of
                                         Pennsylvania, sitting by designation.
Tech”), sought declaratory relief against an                  I. BACKGROUND
administrative enforcement proceeding the
                                                   A. New Jersey’s Regulatory Scheme
New Jersey Department of Environmental
Protection (“NJDEP”) brought against Hi                   New Jersey has established a
Tech. Hi Tech claimed that certain permit          comprehensive statutory scheme for
and license requirements imposed on solid          regulating solid waste disposal based upon
waste disposal facilities by the New Jersey        a legislative determination that “disposal
Solid Waste Management Act (“SWMA”),               and utilization of solid waste is a matter of
N.J.S.A. 13:1E-1 to -207, and its                  grave concern . . . and . . .that the health,
implementing regulations1 are preempted            safety and welfare of the people of [New
because its solid waste disposal facility          Jersey] require efficient and reasonable
involves transportation by railroad and is         solid waste collection and disposal service
therefore subject to the exclusive                 or efficient utilization of such waste.”
jurisdiction of the Surface Transportation         N.J.S.A. 13:1E-2(a).
Board (“STB”).2 The district court did
                                                            The collection, transportation,
not directly address the merits of Hi
                                                   transfer, processing and disposal of solid
Tech’s preemption argument. Rather, the
                                                   waste is regulated by the SWMA and
court invoked the doctrine of abstention
                                                   corresponding regulations located at
under both Burford v. Sun Oil Co., 319
                                                   N.J.A.C. 7:26-1.1 et seq. The SWMA
U.S. 315 (1943), and Younger v. Harris,
                                                   grants the NJDEP the authority to regulate
401 U.S. 37 (1971), and dismissed the
                                                   all solid waste facilities and register all
complaint.     Hi Tech now appeals the
                                                   persons engaged in the collection or
dismissal of its declaratory action.
                                                   disposal of solid waste. N.J.S.A. 13:1E-
Although our analysis differs from the
                                                   2(b)(6), N.J.S.A. 13:1E-4(a). In its
analysis the district court relied upon, for
                                                   regulatory capacity, NJDEP can impose
the reasons the follow, we will affirm.3
                                                   liability on any “person” who violates the
                                                   SWMA or the solid waste regulations.
   1
       See N.J.A.C. 7:26-1.1 et seq.               N.J.S.A. 13:1E-9(b). Regulations define a
                                                   “ pe r son” to includ e indiv iduals ,
   2
     As we will discuss below, the STB is          corporations and corporate officials.
the federal agency having exclusive                N.J.A.C. 7:26-1.4. “Solid Waste” is
jurisdiction over rail transportation.             defined broadly to include waste material
Friends of the Atglen-Susquehanna Trail,           that is stored or deposited in a manner that
Inc. v. Surface Transportation Board, 252          “such material or any constituent thereof
F.3d 246, 250 n.1 (3d Cir. 2001).                  may enter the environment or be emitted
                                                   into the air or discharged into ground or
        3
        We may affirm for any reason
supported by the record, even if the
grounds we rely upon differ from the               Nicini v. Morra, 212 F.3d 798, 805 (3d
grounds the district court relied upon.            Cir. 2000).

                                               2
surface waters.” N.J.A.C. 7:26-1.6© ),               New Jersey law states that no “person”
N.J.A.C. 7-26-2.13(g)(1)(iii). Hi Tech’s             may operate a solid waste disposal facility.
OIRY facility is a “Solid waste facility”            . . without first obtaining a certificate of
under the SWMA.5 It also constitutes a               public convenience and necessity. N.J.S.A.
“transfer station” under the SWMA.6                  48:13A-6.8 A person operating a solid
                                                     waste facility in violation of that
        New Jersey’s enviro nmental
                                                     requirement is subject to fines ranging
regulatory scheme prohibits “construction
                                                     from $10,000 for a first offense, to not
or operation of a solid waste facility
                                                     more than $50,000 for a third or
without first obtaining a Solid Waste
                                                     subsequent offense. N.J.S.A. 48:13A-
Facility (“SWF”) Permit unless exempted
                                                     12(b).
pursuant to N.J.A.C. 7:26-1.1, -1.7 or -
1.8.” 7 In addition to requiring a SWF,                         B. Hi Tech’s Business


       5
       The statute defines a “solid waste            N.J.A.C. 7:26-5.4(g)(2), and each day a
facility” to include any site or building            violation continues constitutes a separate
used for the “storage, collection,                   and distinct offense. N.J.S.A. 13:1E-9(e).
processing, transfer, transp ortation,                      8
                                                              N.J.S.A. 48:13A-6 provides in
separation, recycling, recovering or
                                                     pertinent part:
disposal” of solid waste material. N.J.A.C.
7-26-1.4.
                                                     No person shall engage, or be permitted to
   6
        A “transfer station” is defined as “a        engage, in the business of solid waste
solid waste facility at which solid waste is         collection or solid waste disposal unless
transferred from one solid waste vehicle to          found . . . to be qualified by experience,
another solid waste vehicle, including a             training or education to engage in such
rail car, for transportation to an off-site          business, is able to furnish proof of
solid waste facility, or a solid waste               financial responsibility, and unless that
facility at which [certain kinds of] liquid          person holds a certificate of public
waste (as defined at N.J.A.C. 7:26-2.13(h))          convenience and necessity. . . .
is received, stored, treated or transferred[].
. . . ” N.J.A.C. 7:26-1.4.                           In order to obtain that certificate, an
                                                     applicant must disclose the names and
   7
     A “[s]olid waste facility permit” or a          addresses of all persons with a legal or
“SWF permit” is “a certificate of approved           beneficial interest in the applicant’s
registration and engineering design                  business. N.J.A.C. 7:26H-1.8(a)(1). The
approval for a nonhazardous solid waste              applicant must also give appropriate
facility. N.J.A.C. 7:26-1.4 The minimum              information regarding his/her skill,
mandatory penalty for operating a solid              experience or education and financial
waste facility without a permit is $5,000,           responsibility. N.J.A.C. 7-26H-1.8(a)(2)

                                                 3
       Hi Tech’s principal       place of         License Agreement limits Hi Tech to using
business is located at the Oak Island Rail        “the Premises only for the transfer of
Yard (“OIRY”), in Newark, New Jersey.             Waste Products from truck to railcars
David Stoller is Chairman and CEO of Hi           operated by CPR.”
Tech. In 1990, the Canadian Pacific
                                                          Hi Tech began operations at the
Limited, now known as the Canadian
                                                  facility (which it refers to as the
Pacific Railroad (“CPR”), purchased the
                                                  “Transload Facility”), on September 17,
assets and “trackage rights” of the former
                                                  2001.     Hi Tech’s Transload Facility
Delaware and Hudson Railway Company.9
                                                  operates as follows: (1) trucks hauling
Those assets included trackage rights into
                                                  C&D waste arrive at the facility; (2) the
the OIRY.
                                                  trucks discharge C&D into a hopper that
        On November 6, 2000, CPR and Hi           Hi Tech provides at the facility; and (3) the
Tech entered into a License Agreement             C&D waste is then loaded directly into rail
whereby Hi Tech agreed to develop and             cars from the hoppers. C&D waste is
operate a construction and demolition             neither stored nor processed at the facility.
debris (“C&D”) bulk waste loading facility        Once the rail cars have been filled, CPR
at the OIRY.10 Paragraph 4(a) of the              transports them exclusively to out-of-state
                                                  disposal facilities.

        9
                                                  C. The NJDEP Investigation at OIRY
        “Trackage rights agreements are
arrangements by which one railroad                       On April 16, 2003, NJDEP
company allows another to use its railroad        investigators conducted a site visit at the
tracks. These agreements can take one of          Hi Tech facility at OIRY. While there,
two different forms. The owner railroad           they saw solid waste origin/disposal
may allow the tenant railroad to serve
freight customers along the leased track or
may limit the tenant railroad to use of the
track from one point to another,
withholding permission to serve customers                demolition debris (“C&D”)
along the route.” Illinois Commerce                      and non-hazardous
Comm. v Interstate Commerce Comm.,                       contaminated soils (“Soils”),
819 F. 2d 311, 313 (D.C. Cir., 1987).                    and intermodal transloading
                                                         of containerized sludges and
   10
      The Agreement provided in relevant                 solid waste (“Containerized
part that:                                               Waste”) (C&D, Soils and
                                                         Containerized Waste are
            CPR desires to utilize a                     herein afte r colle ctively
            portion of the Railyard . . .                referred to as “Waste
            for the transloading of non-                 Products”) . . . .
            hazardous construction and

                                              4
(“O&D”) forms11 and weigh tickets taken              C&D (ID #13C) and bulky waste (ID #13)
in and generated for solid waste loads               were thereafter observed entering the
accepted that day.     All loads were                facility and proceeding to the inbound
classified on the O&D forms as either ID             scale. The trucks went to the “east box”12
# 13 or ID #13C. See note 11.                        to dump their loads of solid waste and
                                                     thereafter a crane loaded the waste into a
       Records       i n d i c at e d   t h at
                                                     waiting open-top rail car. Loads were
approximately 12 “roll-off vehicles” had
                                                     visually inspected prior to dumping, and
delivered solid waste to the facility for
                                                     the crane operator had a full view of what
transfer from Hi Tech’s facility prior to the
                                                     was being dumped out of the roll-off
NJDEP’s investigators’ arrival on April
                                                     container.
16, 2003.
                                                            After dumping and leaving the “east
       Before Joseph Levy, Hi Tech’s
                                                     box” area, trucks crossed the railroad
general manager, arrived at the facility, the
                                                     tracks and proceeded to “weigh out” at the
investigators also observed 4 loaded
                                                     outbound scale. There, drivers turned in
gondola rail cars containing bulky waste
                                                     O&D forms and signed off on scale tickets
materials such as plaster, lathe, treated
painted wood, plastic bags, cardboard,
drywall, and sheet metal.               The              12
                                                           The “east box” refers to a roofless
investigators met with Levy and asked him
                                                     dumping area with approximately 12' high
to accompany them to observe the actual
                                                     metal sides observed to be active during
“tipping operation” and to answer
                                                     the inspection. The “west box” is a
questions regarding the operation.
                                                     dumping area which was not active during
        Inbound roll-off trucks transporting         the inspe ct io n , a lt ho u gh N JD E P
                                                     investigators observed and photographed
                                                     several cubic yards of demolition waste
   11
      Solid waste facilities are required to         present in the west box. Both dumping
maintain waste origin/disposal records for           areas are similarly constructed with an
each load of waste received by waste type            earthen/C&D ramp on which the grappler
ID number. N.J.A.C. 7:26-2.13(g). “Type              operates to load the deposited waste into
13" is “Bulky waste: Large items of waste            adjacent gondola rail cars. Likewise, each
material, such as appliances and furniture.”         dumping area has 1" steel plate bottom
N.J.A.C. 7:26-2.13(g)(iii). “Type 13C” is            area onto which waste is deposited. A
“Construction and demolition waste:                  steel frame ramp with wooden slats was
Waste building material and rubble                   observed constructed at each dumping area
resulting from construction, remodeling,             to accommodate roll off trucks. A lower
repair, and demolition operations on                 dumping area (at ground level) was
houses, commercial buildings, pavements,             observed at each dumping area to
and other structures.” N.J.A.C. 7:26-                accommodate larger transfer trailers and
2.13(g)(iv).                                         the overflow traffic of roll off vehicles.

                                                 5
prior to leaving the site. During the several       penalty was assessed, but Hi Tech and
minutes that investigators observed this            Stoller were ordered to cease solid waste
operation, they saw several roll-off                operations within twenty days.
containers from various commercial and
                                                            The Order was served upon Hi
non-commercial solid waste haulers dump
                                                    Tech and Stoller on May 28, 2003, with an
loads into the east box before the crane
                                                    effective date of June 17, 2003. As will be
loaded that waste into a waiting rail car.
                                                    detailed later, Hi Tech and Stoller filed a
They also saw approximately 15 loads
                                                    complaint in the district court on June 6,
(approximately 375 cubic yards) of ID
                                                    2003, seeking, a declaration that state
#13 or ID #13D solid waste tipped for
                                                    regulation of the OIRY facility was
transfer at the facility.
                                                    preempted by federal law. However, as of
        Based upon this investigation, the          June 16, 2003, the day the district court
NJDEP determined that Hi Tech was                   dismissed the complaint, Hi Tech and
operating a transfer station, and that OIRY         Stoller had not availed themselves of their
was a “solid waste facility.” As noted              right to request either an administrative
above, solid waste facilities require solid         hearing, a stay from the NJDEP, or any of
waste facility permits and NJDEP approval           the other relief afforded under New
of engineering designs. Based upon                  Jersey’s Administrative Procedure Act.14
observations during the site visit, the
NJDEP issued an Administrative Order
after determining that Hi Tech was                  stated that Stoller was in violation of
operating the facility without the required         N.J.A.C. 7:26-2.8(f) (failure to obtain a
permits, registration, or design approvals          SWF permit prior to constructing or
and that Hi Tech was therefore operating            operating a solid waste facility); and
the facility in violation of N.J.A.C. 7:26-         N.J.A.C. 7:26H-1.6(a) (failure to obtain a
2.8(f). The Administrative Order also               Certificate of Public Convenience and
charged that Hi Tech was operating in               Necessity prior to engaging in the business
violation of N.J.A.C. 7:26H-1.6(a) because          of solid waste disposal).
it was engaging in the business of solid
                                                             14
waste disposal without a Certificate of                         New Jersey’s Administrative
Public Convenience and Necessity.13 No              Procedure Act, N.J.S.A. 52:14B-1, sets
                                                    forth the procedures to be followed in the
                                                    initial adjud icatory phase of an
      13
          The Administrative Order also             administrative procedure wherein the
determined that David Stoller, as                   NJDEP will exercise its quasi-judicial
Chairman and CEO of Hi Tech, had actual             function to determine the allegations set
responsibility for the operation of the             forth in the administrative cease and desist
illegal solid waste facility and could have         order. A party may take an appeal as of
prevented the violation but failed to do so.        right to the Superior Court of New Jersey,
Accordingly, the Administrative Order               Appellate Division, for review of final

                                                6
Instead, they waited until June 17, 2003,                  NJDEP filed exceptions to that Initial
the day after the district court dismissed                 Decision on August 25, 2003.
the complaint in this case, and then sought
                                                                   In his Final Decision, the
a hearing and stay from the NJDEP.
                                                           Commissioner of E nviro nm enta l
           On June 30, 2003, Bradley                       Protection of the State of New Jersey
Campbell, New Jersey’s Commissioner of                     reversed the ALJ’s decision and held
Environmental Protection, ordered “that                    instead that Hi Tech’s facility was not
the Office of Solid Waste Compliance and                   subject to the exclusive jurisdiction of the
Enforcement shall forbear from seeking                     STB and that NJDEP’s authority was
judicial enforcement of the cease and                      therefore not preempted. Accordingly, Hi
desist order for a period of 60 days, or                   Tech was ordered to immediately cease
until further order of the Department                      and desist its operations at the OIRY.
vacating or amending this order for                        State of New Jersey, Department of
emergency relief, to enable [Hi Tech and                   Environmental Protection v. Hi Tech
S t o l l e r ] t o o b t a i n a p p r o p r i a te       Trans, LLC, Final Decision, OAL Docket
administrative due process on an expedited                 No. ESW 05815-03 (September 29,
basis pursuant to the Administrative                       2003). 15
Procedure Act.”
                                                                II. DISTRICT COURT
        As noted, on June 17, 2003, Hi                     PROCEEDINGS
Tech requested an administrative hearing
                                                                  On June 6, 2003, Hi Tech filed the
to contest the administrative cease and
                                                           instant complaint against the NJDEP in
desist order. Thereafter, the Acting Chief
                                                           United States District Court for the District
Administrative Law Judge of the State of
                                                           of New Jersey.        Hi Tech sought a
New Jersey issued an Initial Decision in
                                                           declaration that state laws requiring solid
which he accepted Hi Tech’s argument
                                                           waste transfer stations like the OIRY to
that it was involved in transportation by
                                                           obtain a solid waste facility permit and a
railroad and was, therefore, subject to the
exclusive jurisdiction of the STB. State of
New Jersey, Department of Environmental                        15
                                                                   On June 11, 2004, the Appellate
Protection v. Hi Tech Trans, LLC, OAL
                                                           Division of the Superior Court of New
Docket No. ESW 05815-03 (N.J. Office of
                                                           Jersey affirmed the Final Decision. State
Administrative Law Aug. 13, 2003). The
                                                           o f New Jerse y, De partm ent o f
                                                           Environmental Protection v. Hi Tech
                                                           Trans, LLC, No. A-29-03T3, (N.J. Super.
action of any state administrative agency                  Ct. App. Div. June 11, 2004) (per curiam).
or officer and for review of the validity of               Hi Tech has filed a Notice of Appeal and
any rule promulgated by any state agency                   a Notice of Petition for Certification to
or officer. See N.J. Court Rule 2:2-                       Appeal the Appellate Division’s decision
3(a)(2).                                                   to the Supreme Court of New Jersey.

                                                       7
certificate of public convenience and               “that [New Jersey] can take no action to
necessity, are preempted as applied to Hi           enforce [its] law against [Hi Tech] . . .
Tech.        Based upon its preemption              unless that action has been authorized by
argument, Hi Tech also sought appropriate           the Surface Transportation Board.” Id. at
equitable relief including a preliminary            31.
injunction barring NJDEP from enforcing
                                                           On June 20, 2003, the district court
provisions of state law relevant to
                                                    dismissed the amended complaint on
NJDEP’s purported regulatory authority
                                                    grounds of Burford and Younger
over Hi Tech and its OIRY based upon Hi
                                                    abstention, and this appeal followed.17
Tech’s claim of preemption. The NJDEP
responded by arguing that the district court                   III. JURISDICTION
should abstain, and that the court lacked
                                                            Hi Tech contends that we have
jurisdiction pursuant to the Eleventh
                                                    appellate jurisdiction under 28 U.S.C. §
Amendment. 16           The district court
                                                    1292(a)(1) because the district court’s
agreed with Hi Tech’s Eleventh
                                                    dismissal of its amended complaint
Amendment argument and dismissed the
                                                    pursuant to Younger and Burford
complaint, but Hi Tech filed an amended
                                                    abstention principles amounts to a denial
compliant the same day naming two
                                                    of its request for preliminary injunctive
individual defendants in their official
                                                    relief. Although we do not agree that we
c apacities: B r ad le y C amp bell ,
                                                    have jurisdiction pursuant to § 1292(a)(1),
Commissioner of NJDEP, and Wolfgang
                                                    w e n e v e r t h el e ss h a v e a p pe l l at e
Skacel, Director of the Office of Solid &
                                                    jurisdiction.
Hazardous Waste Compliance and
Enforcement of the NJDEP. The amended                       A Burford abstention order is a
complaint essen tially repea ted the                final, appealable order under § 1291
allegations of the dismissed complaint. Hi          because the district court dismisses the
Tech’s entire basis for relief was its claim        case and consigns it to the state system.
that its facility is subject to the exclusive       Riley v. Simmons, 45 F.3d 764, 770-771
“authority of the Surface Transportation            (3d Cir. 1995). At one time we suggested
Board . . . .” App., vol. II, at 30. Hi Tech        that a Younger abstention order deferring
thus requested a declaratory judgment               to state administrative proceedings may
affirming that its operations are “exempt           not be a final order if the state
from [New Jersey’s] administrative                  administrative proceeding cannot give the
permitting and licensing regulations[]” and         plaintiff all of the requested relief but


   16                                                   17
     The NJDEP also argued that Hi Tech                  Hi Tech does not contest the district
failed to make the threshold showing                court’s holding that the Eleventh
required as a condition precedent to                Amendment bars its suit against the
preliminary injunctive relief.                      NJDEP.

                                                8
federal law can. See Williams v. Red Bank                   “The Supremacy Clause18 allows
Bd. of Ed., 662 F.2d 1008 (3d Cir. 1981),           Congress to preempt state legislation if it
overruled on other grounds as recognized            so intends.” Olde Discount Corp. v.
in Schall v. Joyce, 885 F.2d 101 (3d Cir.           Tupman, 1 F.3d 202, 206 (3d Cir. 1993)
1989). However, in Quackenbush v.                   (citation om itted ).        H ow eve r, a
Allstate Ins. Co., 517 U.S. 706, 713                “preemption analysis should be ‘tempered
(1996), the Supreme Court concluded that            by the conviction that the proper approach
abstention stay orders are appealable               is to reconcile the operation of both
because they put the “litigants ‘effectively        statutory schemes with one another rather
out of court[.]’ ” The prevailing view now          than holding one completely ousted.’”
is “that for all of the abstention doctrines,       F o r d M o t o r C o . v . In s u r a n c e
a federal court’s decision to abstain is            Commissioner of the Commonwealth of
immediately appealable, but its refusal to          Pennsylvania, 874 F.2d 926, 936 (3d Cir.
abstain is not appealable until there is a          1989) (citing Merrill Lynch v. Ware, 414
final judgment.” Erwin Chemerinsky,                 U.S. 117, 127 (1973)).
Federal Jurisdiction, § 12.3 at 768.
                                                           The Supreme Court has
   IV. CONTROLLING LEGAL                                   recognized three general
PRINCIPLES.                                                ways in which federal law
                                                           may preempt, and thereby
       Hi Tech claims that its solid waste
                                                           displace, state law: (1)
disposal activities in the OIRY facility are
                                                           ‘express preemption,’ which
subject to the exclusive jurisdiction of the
                                                           arises when there is an
Surface Transportation Board. According
                                                           explicit statutory command
to Hi Tech, any state regulation of its
                                                           that state law be displaced;
operations at the OIRY facility is therefore
                                                           (2) ‘field preemption,’
preempted by federal law. In Hi Tech’s
                                                           which arises when federal
view, since state law is preempted by the
                                                           law so thoroughly occupies
federal regulatory scheme enforced by the
                                                           a legislative field as to make
STB, the district court erred in abstaining,
                                                           reasonable the inference the
and should have instead granted the
                                                           Congress left no room for
requested declaratory relief and issued a
                                                           the States to supplement it;
preliminary injunction. Before turning to
                                                           and      (3)      ‘conflict
the merits of Hi Tech’s preemption
argument, it will be helpful to first discuss
the principles of preemption and                          18
                                                            In relevant part, the Supremacy
abstention.                                         Clause provides that the “Constitution, and
              A Preemption.                         the Laws of the United States which shall
                                                    be made in Pursuant thereof . . . shall be
                                                    the supreme Law of the Land . . . .” U.S.
                                                    Const. Art. VI cl.2.

                                                9
               preemption,’ which                     extraordinary and narrow exception to the
               arises when a state                    ‘virtually unflagging obligation of the
               law makes it                           federal courts to exercise the jurisdiction
               impossible to comply                   given them.’ ” Id. (quoting Colorado River
               with both state and                    Water Conservation Dist. v. United States,
               federal law or when                    424 U.S. 800, 817 (1976)). Consequently,
               the state law stands                   abstention is justified “only in the
               as an obstacle to the                  exceptional circumstances where the order
               accomplishment and                     to the parties to repair to the State court
               execution of the full                  would clearly serve an important
               purposes        and                    countervailing interest.”         Id. (citation
               objectives         of                  omitted). In other words, “[a]bstention
               Congress.                              from the exercise of federal jurisdiction is
                                                      appropriate only under certain limited
                                                      circumstances.” Chez Sez III Corp. v.
The St. Thomas – St. John Hotel and                   Township of Union, 945 F.2d 628, 630 (3d
Tourism Assoc., Inc. v. Gov’t of the United           Cir. 1991) (citation omitted).          Those
States Virgin Islands, 218 F.3d 232, 237-8            circumstances “are loosely gathered under
(3d Cir. 2000) (citations and most internal           discrete concepts of abstention named after
quotations omitted). Since “[p]reemption              l e a d in g S u p r e m e C o u r t C a s e s , ”
is based on the Supremacy Clause of the               Chiropractic America v. LaVecchia, 180
United States Constitution, [it] does indeed          F.3d 99, 103 (3d Cir. 1999), viz.,
raise a constitutional challenge which                “Pullman” (Railroad Comm’n of Texas v.
draws the abstention doctrine to the                  Pullman, 312 U.S. 496 (1941)); “Burford”
forefront of our consideration.” Zahl v.              (Burford v. Sun Oil Co., 319 U.S. 315
Harper, 282 F.3d 204, 208 (3d Cir. 2002).             (1943)); “Younger” (Younger v. Harris,
.                                                     401 U.S. 37 (1971)); and “Colorado
                                                      R i v e r ” ( C o l o r a d o R i v e r W a te r
             B. Abstention.
                                                      Conservation District v. United States, 424
        “Abstention is a judicially created           U.S. 800 (1976)). As we noted at the
doctrine under which a federal court will             outset, this appeal involves both Burford
decline to exercise its jurisdiction so that a        and Younger abstention.
state court or agency will have the
                                                               (1). Burford abstention.
opportunity to decide the matters at issue.”
Kentucky West Virginia Gas Co. v.                             “In Burford, the Supreme Court
Pennsylvania Public Utility Commission,               stated that a federal court should refuse to
791 F.2d 1111, 1114 (3d Cir. 1986)                    exercise its jurisdiction in a manner that
(citation omitted). The doctrine is rooted            would interfere with a state’s efforts to
in concerns for the maintenance of the                regulate an area of law in which state
federal system and “represents an                     interests predominate and in which

                                                 10
adequate and timely state review of the            491 U.S. 350, 361 (1989)(quoting
regulatory scheme is available .”                  Colorado River Water Conservation
Chiropractic America v. LaVecchia, 180             District v. United States, 424 U.S. at 814).
F.3d at 104 (citing Burford v. Sun Oil Co.,         Burford abstention therefore “calls for a
319 U.S. at 332-334). The purpose of               two-step analysis.” Riley v. Simmons, 45
Burford is to “avoid federal intrusion into        F.3d 764, 771 (3d Cir. 1995)(citing New
matters of local concern and which are             Orleans Publ. Serv. Inc., at 361). “The
within the special competence of local             first question is whether timely and
courts.” Id. (citation omitted). The               adequate state law review is available.”
Supreme Court has “provided a clear                Id. (citation omitted). “Only if a district
definition of the Burford doctrine.”               court determines that such review is
Chiropractic America, 180 F.3d at 104. In          available, should it turn to other issues and
New Orleans Pub. Serv., Inc. v. Council of         determine if the case before it involves
the City of New Orleans (“NOPSI”), the             difficult questions of state law impacting
Court wrote:                                       on the state’s public policy or whether the
                                                   district court’s exercise of jurisdiction
       Where timely and adequate
                                                   would have a disruptive effect on the
       state-court review is
                                                   state’s efforts to establish a coherent
       available, a federal court
                                                   public policy on a matter of important state
       sitting in equity must
                                                   concern.” Id.
       decline to interfere with the
       proceedings or orders of                           The second prong of the
       state administrative                        Burford doctrine, as refined in NOPSI,
       agencies: (1) when there are                requires a court to examine three issues:
       "difficult questions of state               “(1) whether the particular regulatory
       law bearing on policy                       scheme involves a matter of substantial
       problems of substantial                     public concern; (2) whether it is the sort of
       p u b l i c i mp o rt w ho s e              complex technical regulatory scheme to
       importance transcends the                   which the Burford abstention doctrine
       result in the case then at                  usually is applied; and (3) whether federal
       bar";      or (2) where the                 review of a party’s claims would interfere
       "exercise of federal review                 with the state’s efforts to establish and
       of the question in a case and               maintain a coherent regulatory policy.”
       in similar cases would be                   Chiropractic America, 180 F.3d at 105.
       disruptive of state efforts to
                                                           (2). Younger abstention.
       establish a coherent policy
       with respect to a matter of                        Younger abstention is similar in that
       substantial public concern.                 it “espouse[s] a strong federal policy
                                                   against federal court interference with
                                                   pending state judicial proceedings absent


                                              11
extraordinary circumstances.” Middlesex               including administrative proceedings.
County Ethics Commission v. Garden
                                                             The Court has set out a three-part
State Bar Assoc., 457 U.S. 423, 431
                                                      test for determining whether Younger
(1982). “The policies underlying Younger
                                                      abstention is appropriate: “[a]bstention is
abstention have been frequently reiterated”
                                                      appropriate when: (1) there is a pending
by the Court. Id. “The notion of comity
                                                      state judicial proceeding;        (2) the
includes a proper respect for state
                                                      proceeding implicates important state
functions, a recognition of the fact that the
                                                      interests; and (3) the state proceeding
entire country is made up of a Union of
                                                      affords an adequate opportunity to raise
separate state governments, and a
                                                      constitutional challenges.”
continuance of the belief that the National
Government will fare best if the States and           Id., at 209 (citing Garden State, 457 U.S.
their institutions are left free to perform           at 432). “Even if this test is met, however,
their separate functions in their separate            abstention is not appropriate if the plaintiff
way,.” id., (citations and internal quotation         e stab l i sh e s t h a t ex t r a o rd i n a ry
marks omitted), as long as they can do so             circumstances exist such that deference to
without contravening the supremacy of                 the state proceeding will present a
federal law. “Minimal respect for the state           significant and immediate potential for
processes, of course, precludes any                   irreparable harm to the federal interests
presumption that the state courts will not            asserted.” Id., at 210 (citation, ellipses and
safeguard constitutional rights.”          Id.        internal quotation marks omitted).
(emphasis in original).
                                                                   V. DISCUSSION
        In Younger, the district court
                                                              Hi Tech insists that the district
enjoined the Los Angeles County District
                                                      court erred in abstaining in favor of the
Attorney from prosecuting the defendant
                                                      state regulatory process because the court
under a constitutionally-suspect state
                                                      was confronted with a preemption claim
statute. The Supreme Court reversed,
                                                      arising from its rail activity.
finding that the district court’s injunction
was “a violation of the national policy                   A. Hi Tech’s Preemption claim.
forbidding federal courts [from] stay[ing]
                                                              In 1995, Congress enacted the
or enjoin[ing] pending state court
                                                      I nte rsta te Commer ce C om missio n
proceedings except under spec ial
                                                      Termination Act (“ICCTA”), Pub. L. No.
circu mstances.” 401 U.S. 37, 41.
                                                      104-88, 109 Stat. 803 (1995) (codified as
“Although Younger involved a state court
                                                      amended at various locations in 49 United
criminal proceeding, the national policy
                                                      States Code), which abolished the
against enjoining pending state court
                                                      Interstate Commerce Commission (“ICC”)
proceedings has since been extended to
                                                      and created the Surface Transportation
noncriminal judicial proceedings.” Zahl,
                                                      Board,        Friends of the Altgen-
282 F.3d at 208 (citation omitted),
                                                      Susquehanna Trail, 252 F.2d at 250 n.1, an

                                                 12
independent agency within the Department                   n.7. Hi Tech has not offered anything to
of Transportation. Commonwealth of                         demonstrate that the court’s conclusion
Pennsylvania v. Surface Transportation                     that Hi Tech “never obtained status as a
Board, 290 F.3d 522, 525 (3d Cir. 2002).                   rail carrier” is erroneous.     Indeed, in a
The ICCTA provides that the STB “would                     related case, the district court held that Hi
perform all the functions that previously                  Tech is not a “rail carrier” within the
were performed by the ICC as of the                        meaning of the ICCTA. Hi Tech Trans,
effective date of the Act.” Id. at 525 n.3                 LLC v. Hudson County Improvement
(citation omitted). Accordingly, the STB                   Authority, No. 02-3781, slip op. at 2-3
“perform[s] the core rail and trucking                     (D.N.J. Apr. 2, 2003). Given the nature of
responsibilities formerly conducted by the                 its loading activities, that holding is not
ICC.” Peter A. Pfohl, Who Should Pay                       surprising.
For Agency Adjudication? A Study of
                                                                    Hi Tech nevertheless claims that it
$200,000 Filing Fees at the Surface
                                                           is subject to the exclusive jurisdiction of
Transportation Board, 25 Transp. L. J. 57,
                                                           the STB because its facility falls under the
59 (1997). Under the ICCTA, the STB
                                                           ICCTA’s definitions of “transportation”
h a s e x c l u s iv e j u r is d i c ti o n o v er
                                                           and “railroad.” In Hi Tech’s view, because
“transportation by rail carrier” and its
                                                           it falls under both definitions, its facility is
regulation of rail carriers preempts state
                                                           subject to the STB’s exclusive jurisdiction
regu latio n wit h r e s p e c t t o r a il
                                                           and, therefore, New Jersey’s SWMA and
transportation. 49 U.S.C. § 10510(b).
                                                           its implementing re gulations are
        The ICCTA defines a “rail carrier”                 preempted as applied to it. It submits:
as a “person providing common carrier
                                                                  Hi Tech operates a
railroad transportation for compensation.”
                                                                  “railroad” insofar as it
49 U.S.C. § 10102(5). There are formal
                                                                  opera t e s i n t e rm o d a l
procedures that must be followed to obtain
                                                                  equipment used by or in
the STB’s authorization to act as a rail
                                                                  connection with a railroad
carrier. See 49 U.S.C. § 10910. This
                                                                  and operates a terminal
record establishes that Hi Tech has never
                                                                  facility and yard and ground
received such formal certification from the
                                                                  used for transportation. Hi
STB. The district court notes that “on July
                                                                  T e c h       p r o v i d e s
3, 2000, Hi Tech filed a Notice of
                                                                  “transportation” insofar as it
Exemption in accordance with 49 C.F.R. §
                                                                  provides a yard, property,
1150.32 in an attempt to ‘commence
                                                                  facility and equipment
common carrier rail service over 641 miles
                                                                  related to the movement of
of Canadian Pacific rail track, [but] Hi
                                                                  property by rail and services
Tech withdrew its Notice of Exemption on
                                                                  relating to that movement.
July 17, 2000, and has never obtained
                                                                  When taken together, Hi
status as a rail carrier.” App., vol. I, at 10
                                                                  Tech’s facility and activity

                                                      13
              fall directly within                 whether to abstain from resolving issues of
              the definitions set                  preemption. For example, in Olde
              forth in the ICCTA                   Discount Corp., we stated “a claim of
              and the regulations                  federal preemption, in and of itself, is not
              thereof by state and                 entitled to more deferential treatment than
              local authorities is                 other constitutional claims in the face of an
              expressly preempted.                 abstention challenge.” 1 F.3d at 214.
              Thus, the STB, by
                                                           There, the district court enjoined
              virtue of its exclusive
                                                   the Delaware Securities Commissioner
              j u r is d ictio n o v e r
                                                   from seeking recission on behalf of
              transportation by rail
                                                   investors who had signed an arbitration
              carriers,          has
                                                   agreement before the dispute arose. We
              exclusive jurisdiction
                                                   had to address a question of preemption as
              over Hi Tech and its
                                                   O l d e D i s c ount arg ued th at th e
              regulation preempts
                                                   congressional policy favoring arbitration
              state law.
                                                   underlying the Federal Arbitration Act
                                                   (“FAA”) preempted the Commissioner’s
                                                   right of recission under Delaware Law.
Hi Tech’s Br. at 18-19.
                                                   The case therefore presented “a novel
    B. The Relationship Between                    question of the relationship between a
Abstention and Preemption Here.                    contracting party’s right to enforcement of
                                                   an arbitration agreement under the [FAA]
         We are, of course, mindful that
                                                   and a state’s interest in pursuing a remedy
there is no absolute rule prohibiting
                                                   of rescission in an adm inistrative
abstention whenever a preemption claim is
                                                   proceeding.” 1 F.3d at 204. We affirmed
asserted. See, e.g., Ford Motor Co., 874
                                                   the district court’s injunction and rejected
F.2d at 934; Kentucy West Virginia Gas
                                                   Olde Discount’s contention that the district
Co., 791 F.2d at 1117. In NOPSI, the
                                                   court should have abstained in favor of the
Court stated, “[I]t is clear that the mere
                                                   proceedings in state court. In doing so, we
assertion of a substantial constitutional
                                                   focused on the centrality of the preemption
challenge to state action will not alone
                                                   claim stating, “[i]ndeed, the circumstances
c o m p e l the exerc ise of fed eral
                                                   presented make clear that a nonfrivolous
jurisdiction.” 491 U.S. at 365. That
                                                   claim of FAA preemption of a state
statement was, however, not part of the
                                                   remedy necessarily presents an exception
holding in NOPSI as the Court relied on
                                                   to the Younger doctrine.” Id., at 211. We
the fact that the state proceeding at issue
                                                   reasoned that “abstention in this case
there was not the kind of proceeding that
                                                   would be difficult to justify in light of the
can trigger abstention under Younger. See,
                                                   congressional intent reflected in [the
id., at 367. Nevertheless, this dicta in
                                                   FAA].” Id., at 21.
NOPSI has often guided courts in deciding

                                              14
       Thereafter, in resolving the tension                As Olde Discount and Ford Motor
between preemption and abstention in                Co. illustrate, abstention is usually
Chiropractic America, we stated, “[o]ur             inappropriate in such a case because
focus should not be on whether a federal            “Supremacy Clause claims are essentially
claim has been presented, but rather on the         ones of federal policy, so that the federal
nature of that claim.” 180 F.3d at 108              courts are particularly appropriate bodies
(emphasis in original). We added that               for the application of preemption
“[c]ourts have held almost uniformly, for           principles.” Chiropractic America, 180
example, that abstention is inappropriate           F.3d at 108. Moreover, where the federal
when a federal plaintiff asserts a                  interest is so strong that it preempts state
preemption/Supremacy Clause claim.” Id.;            law, there will rarely be a state interest
see also Kentucky West Virginia Gas Co.,            sufficient to justify a federal court’s
791 F.2d at 1115-16; Hotel & Restaurant             decision to abstain from its “unflagging
Employees & Bartenders Int’l Local 54 v.            obligation” to exercise its jurisdiction. See
Danziger, 709 F.2d 815, 832 (3d Cir.                Colorado River Water Conservation Dist.
1983), vacated on other grounds, 468 U.S.           v. United States, 424 U.S. 800, 817
491 (1984).                                         (1976)).
        Similarly, in Ford Motor Co., we                    This follows because “[a]bstention
addressed the propriety of abstention when          is predicated solely upon the significance
balancing “the federal scheme designed to           of the federal interest invoked.” Zahl, 282
assist the nation’s failing savings and loan        F.3d at 210 (citation and internal
companies and the important state interest          quotations omitted). Therefore, “[w]here
in regulating the state insurance industry.”        ‘Congress has created a statutory scheme
874 F.2d at 928. We there held that, given          . . . which arguably preempts the local
the pervasive federal regulation of                 regulation complained of, a fundamental
banking, abstention in favor of state law           element of Burford abstention is thrown
was inappropriate.        In doing so, we           into doubt, for we must question whether
approvingly quoted the district court as            the case indeed involves an essentially
follows: “‘ dispositive [of the issue] is a         local issue.” Kentucky West Va. Gas Co.,
line of cases from the Courts of Appeals            791 F.2d at 1116.      Moreover, abstention
for the Third, Eighth, and Eleventh                 under Younger can afford the Supremacy
Circuits that hold that there can be no             Clause no less priority.
important state interests that the federal
                                                           Claims of federal preemption thus
court should defer to in enforcing a state
                                                    “require[] review of the state interest to be
law that has been preempted by federal
                                                    served by abstention, in tandem with the
law.’” 874 F.2d at 988. (Emphasis added)
                                                    federal interest that is asserted to have
(quoting Ford Motor Co., v. Insurance
                                                    usurped the state law.” Ford Motor Co.,
Commissioner of Pennsylvania, 672 F.
                                                    874 F.2d at 934. The “notion of comity, so
Supp. 841, 849-50 (E.D. Pa. 1987)).
                                                    central to the abstention doctrine, is not

                                               15
strained when a federal court cuts off state                  interest justifying federal abstention.
proceedings that encroach upon the federal
                                                                      As noted earlier, Hi Tech claims
domain.” Zahl, 282 F.3d at 210 (citation
                                                              that it is subject to the exclusive
and internal quotations omitted).
                                                              jurisdiction of the STB even though it is
Furthermore,
                                                              not certified as a “railcarrier” because its
        [t]he determ ination of                               facility falls under the ICCTA’s definitions
        whether abstention is proper                          of “transportation” and “railroad.
        where preemption is alleged
                                                                     “ [ T ]r a n s p o r t a t i o n ” is
        does not rest upon whether
                                                                     defined, under the ICCTA,
        the preemption claim will
                                                                     inter alia, as a
        ultimately prevail.
        Accordingly, just as the                                     yard, property, facility,
        presence of a claim of                                       instrum entality, or
        preemption will not                                          equipment of any kind
        preclude abstention in every                                 related to the movement of
        case, the decision that                                      passengers or property, or
        abstention is improper in                                    both, by rail, regardless of
        light of a claim of                                          ownership or an agreement
        preemption that has been                                     concerning use; and . . .
        asserted, need not result in                                 services related to that
        the finding that the state                                   movemen t, includ ing
        statute has in fact been                                     receipt, delivery, transfer in
        preempted.                                                   transit, refrigeration, icing,
                                                                     v e n t i la t i o n, s t o r a g e ,
                                                                     handling, and interchange of
Ford Motor Co., 874 F.2d at 935 n.12.                                passengers and property. . .
                                                                     .”
           Hi Tech’s claim is bottomed upon,
and limited to, its assertion that its
operations at the OIRY facility implicate
                                                              49 U.S.C. §§ 10102(9)(A), (B). Under the
the STB’s authority over railroads. Hi
                                                              ICCTA, a “railroad” is, inter alia,
Tech contends that this is therefore a case
                                                              “intermodal equipment used by or in
of express preemption given the statutory
                                                              connection with a railroad” and a
definitions of “transportation” and
                                                              “terminal facility, and a freight depot,
“railroad” contained in the ICCTA. Since
                                                              yard, and ground, used or necessary for
the Surface Transportation Board has
                                                              transportation .”      49 U.S.C . §§
e x c l u s iv e j u r i s d i c ti o n o v e r r a il
                                                              10102(6)(A), (c).
transportation, Friends of the Atglen-
Susquehanna Trail, 252 F.3d at 250 n.1,                             Even if we assume arguendo that
Hi Tech insists that there is no local                        Hi Tech’s facility falls within the statutory

                                                         16
definition of “transportation” and/or                           Accordingly, it is clear that Hi Tech
“railroad,” the facility still satisfies only a        simply uses CPR’s property to load C&D
part of the equation. The STB has                      debris into/onto CPR’s railcars. The mere
exclusive jurisdiction over “transportation            fact that the CPR ultimately uses rail cars
by rail carrier.” 49 U.S.C. § 10510(a), (b)            to transport the C&D debris Hi Tech loads
(emphasis added). However, the most                    does not morph Hi Tech’s activities into
cursory analysis of Hi Tech’s operations               “transportation by rail carrier.” Indeed, if
reveals that its facility does not involve             Hi Tech’s reasoning is accepted, any
“transportation by rail carrier.” The most             nonrail carrier’s operations would come
it involves is transportation “to rail                 under the exclusive jurisdiction of the STB
carrier.” Trucks bring C&D debris from                 if, at some point in a chain of distribution,
construction sites to Hi Tech’s facility               it handles products that are eventually
where the debris is dumped into Hi Tech’s              shipped by rail by a railcarrier.          The
hoppers. Hi Tech then “transloads,” the                district court could not accept the
C&D debris from its hoppers into rail cars             argument that Congress intended the
owned and operated by CPR, the railroad.               exclusive jurisdiction of the STB to sweep
It is CPR that then transports the C&D                 that broadly, and neither can we.
debris “by rail” to out of state disposal
                                                               However, as we noted at the outset,
facilities. As we noted above, Hi Tech
                                                       the district court stated that it was
operates its facility under a License
                                                       abstaining under Burford and Younger,
Agreement with CPR. Pursuant to the
                                                       and announced that it would therefore not
terms of that license agreement, Hi Tech is
                                                       decide Hi Tech’s action for declaratory
permitted to use a portion of CPR’s OIRY
                                                       relief. Nevertheless, it is clear from its
for transloading. Hi Tech is responsible
                                                       amended complaint that Hi Tech sought
for constructing and maintaining the
                                                       only a declaration that it is exempt from
facility and CPR disclaims any liability for
                                                       state regulations relating to its “intermodal
Hi Tech’s operations.                  License
                                                       rail operations.” App., vol. II, at 194. Hi
Agreement, ¶¶ 4(d), 7. Thus, the License
                                                       Tech included a request for “[s]uch other
Agreement essentially eliminates CPR’s
                                                       relief as this Court deems just and
involvement in, and responsibility for, the
                                                       equitable.” Id. at 194. However, that was
operation of Hi Tech’s facility. Hi Tech
                                                       clearly just an attempt to allow for a
does not claim that there is any agency or
                                                       remedy if it prevailed on its preemption
employment relationship between it and
                                                       claim. It does not alter the fact that the
CPR or that CPR sets or charges a fee to
those who bring C&D debris to Hi Tech’s
transloading facility.19
                                                       contractually determine its status as a
                                                       railroad carrier for regulatory purposes.
                                                       Rather, we cite it merely because it further
        19
        We do not cite the License                     reflects the nature of Hi Tech’s activities
Agreement to suggest that a party can                  and its relationship to CPR.

                                                  17
only issue before the district court was                       waste facilities in a densely
whether New Jersey’s environmental                             populated state that has
regulations were preempted because Hi                          suffered the scourge of
Tech’s facility is subject only to regulation                  unregulated solid waste
by the STB. The district court responded                       facilities for decades.20
to Hi Tech’s request by concluding in
relevant part:
                                                          20
       While the federal interest in                        On June 17, 2003, eleven days after
       r e g u l a t in g i n t e rs t a te           Hi Tech filed its first complaint in the
       railroads is indeed strong,                    district court, Hi Tech filed a petition with
       the federal interest in this                   the STB. It relied upon substantially the
       case is vitiated at least in                   same preemption arguments we reject here
       part by the unprecedented                      and requested a declaratory order that its
       claim of Hi Tech to be                         facility is therefore not subject to
       treated as a “railroad,” when                  regulation by New Jersey’s SWMA and
       it is in fact a solid waste                    its implementing regulations.
       transfer station operating
       pursuant to a license from a                          In a decision of the Director of the
       railroad.                                      Office of Proceedings of the STB, dated
                                                      August 14, 2003, Hi Tech’s argument was
                                                      rejected. Hi Tech Trans, LLC – Petition
App., vol. I, at 10 n.7. The court held that          for Declaratory Order, 2003 WL
since New Jersey’s interest in regulating             21952136, STB Finance Docket No.
its solid waste disposal facilities is as real        34192 (Sub. -No. 1). After discussion and
as it is critical, and since Hi Tech’s                analysis, the STB concluded:
claimed federal interest in regulating
railroads was virtually non-existent given                     In sum, Hi Tech’s activities
Hi Tech’s business, Hi Tech’s preemption                       at its transloading facility at
claim was meritless. The district court                        CP’s Oak Island Yard and
explained:                                                     related activities are not part
                                                               of “transportation by rail
       [b]alancing [Hi Tech’s]                                 carrier” as defined under 49
       rather attenuated federal                               U.S.C. § 10501(a). Hi Tech
       interest against the interests                          is merely using CP’s
       of the State of New Jersey,                             property to transload cargo.
       there is a well-recognized                              Thus, the Board does not
       compelling state interest in                            have jurisdiction over those
       the DEP’s enforcement of                                activities, and section
       its own environmental laws                              10501(b) preemption does
       especially as to the uniquely                           not apply to the state and
       vexing problem of solid                                 local regulations at issue
                                                 18
Id. We agree. In fact, the district court’s            on to state in the very same paragraph of
balance of the federal and state interests is          its Order: “upon balancing the state and
as compelling as it is poignant. However,              federal interests in this case, . . . this Court
that’s the jurisprudential “rub.” For we are           will abstain from entertaining [Hi Tech’s]
at a loss to understand why the court went             Amended Complaint and will exercise its
                                                       discretion not to grant the declaratory
                                                       relief sought by Hi Tech.” Id. As noted
               here. Therefore, Hi                     above, Hi Tech only asked the court to
               Tech’s petition to                      d e c l a r e w h e t h e r N e w J e r s e y’ s
               institute a declaratory                 environmental regulations were preempted
               order proceeding will                   by federal law. Although the amended
               be denied.                              complaint also asked for “such other relief
                                                       as [the] Court deems just and equitable,” it
2003 WL 21952136 at *5.                                is clear that the Court concluded as a
        For reasons best known to counsel              matter of law that injunctive relief was
for Hi Tech, Hi Tech never saw fit to                  neither just nor equitable because it
inform us of the declaratory proceeding it             correctly rejected Hi Tech’s claim of a
instituted before the STB or the Board’s               preempting federal interest. Thus, there
decision. The NJDEP referred to it in its              was nothing left for the district court to
brief, at 14, but we did not learn about the           abstain from.21 The court gave Hi Tech all
Director’s August 14, 2003, decision until             it asked for; a declaration of whether
counsel for the NJDEP sent a letter                    federal law preempted state environmental
pursuant to F.R.A.P. 28(j) on August 27,               regulation of the OIRY.               “Once a
2003.                                                  judgment disposing of all issues on which
                                                       the parties sought a declaration is entered
        Hi Tech filed an appeal of the                 by a court,” the matter is at an end.
Director’s decision, but on June 18, 2004,             Henglein v. Colt Industries Operating
Hi Tech filed a letter with the STB                    Corp., 260 F.3d 201, 210 (3d Cir. 2001).
withdrawing that appeal. Counsel for Hi
Tech similarly did not see did not see fit to
                                                         21
inform this court of its decision to                        Indeed, even Judge Smith is forced to
withdraw its appeal, and we also learned               examine the strength of the federal interest
of it only in a “28(j)” letter that counsel for        here in explaining why abstention was
NJDEP sent on July 19, 2004. We do not                 proper. In his opinion, Judge Smith,
know why counsel for Hi Tech thought it                agrees that the comparative weight of the
appropriate to refrain from informing this             federal interest here does not support a
court of matters so germane to this appeal,            finding of preemption. Nevertheless, he
but we are certainly troubled by the level             concludes that the district court should
of professionalism and apparent lack of                have abstained even though, given the
candor it reflects.                                    required preemption analysis, there was
                                                       nothing left to abstain from.
                                                  19
Therefore, although the district court              (1982). 22 And the majority does not
correctly dismissed the amended                     id e n t i f y a n y “ ‘e x t r a o rd i n a ry
complaint, it did so for the wrong reason.          circumstances’” by which “‘deference to
It should not have relied on concepts of            the state proceeding will present a
abstention; it didn’t actually abstain.             significant and immediate potential for
Rather, it should have dismissed the                irreparable harm to the federal interests
amended complaint because there was no              asserted.’”     Zahl, 282 F.3d at 209
basis for relief given Hi Tech’s                    (emphasis added) (quoting Schall v. Joyce,
“untenable” and meritless preemption
claim.
                                                            22
             CONCLUSION                                           First, there was a pending
                                                    administrative enforcement proceeding
        Accordingly, for the reasons set            before the New Jersey Department of
forth above, we will affirm the order of the        Environmental Protection, for which New
district court insofar as it rejected Hi            Jersey law provides Hi Tech with a right to
Tech’s preemption claim and dismissed Hi            a hearing and a right to judicial review.
Tech’s amended complaint.                           N.J. Stat. Ann. §§ 52:14B-1 to 52:14B-24;
                                                    Zahl v. Harper, 282 F.3d 204, 209 (3d Cir.
                                                    2002) (holding that similar proceedings
                                                    under the New Jersey Administrative
SMITH, Circuit Judge, concurring in the             Procedure Act “are clearly judicial in
judgment:                                           nature, and therefore meet the first part of
                                                    the [Younger] test”). Second, “there is a
       I agree with the majority that the           well-recognized compelling state interest
District Court should have dismissed Hi             in the [NJDEP’s] enforcement of its own
Tech’s complaint. I disagree, however,              environmental laws especially as to the
with the majority’s conclusion that the             uniquely vexing problem of solid waste
complaint should have been dismissed on             facilities in a densely populated state that
the merits rather than on abstention                has suffered the scourge of unregulated
grounds. In my view, the District Court             solid waste facilities for decades.” Slip
properly abstained from reaching the                Op. at 30 (quoting App. at 10). Third,
merits of this case under Younger v.                there was an adequate opportunity to
Harris, 401 U.S. 37 (1971).                         address Hi Tech’s preemption argument in
       The majority recognizes that this            the state proceedings. Indeed, preemption
case satisfies the three-part test for              appears to have been the only issue raised
abstention under the doctrine of Younger.           in the state proceedings. What is more, the
See Middlesex County Ethics Comm. v.                New Jersey ALJ ruled in favor of Hi Tech
Garden State Bar Ass’n, 457 U.S. 423, 432           on its preemption argument. NJDEP v. Hi
                                                    Tech Trans, LLC, OAL Dkt. No. ESW
                                                    05815-03 (N.J. Office of Administrative
                                                    Law Aug. 13, 2003).
                                               20
885 F.2d 101, 106 (3d Cir. 1989)); accord                 Nevertheless, the m ajo rity
Younger, 401 U.S. at 53 (abstention may             concludes that the District Court should
not be appropriate under “extraordinary             have resolved Hi Tech’s declaratory
circumstances” where “irreparable injury”           judgment action on the merits, despite an
would result).23                                    ongoing state proceeding that was more
                                                    than capable of addressing Hi Tech’s

   23
      In my view, the majority overstates
the significance that the presence of a             characterization with which I disagree and
preemption claim should have on a federal           which is unnecessary to the majority’s
court’s decision whether to abstain under           disposition of this case— and discusses
Younger.      The Supreme Court has                 opinions from this Court that either pre-
addressed this relationship in no uncertain         date NOPSI or that involved abstention
terms:                                              under Burford v. Sun Oil Co., 319 U.S.
                                                    315 (1943), rather than Younger.
        There is no greater federal
        interest in enforcing the                           To be sure, cases involving
        sup r e m a c y o f f e deral               preemption under the Supremacy Clause
        statutes than in enforcing                  may present a significant and immediate
                                                    threat of irreparable harm to federal
        the supremacy of explicit                   interests such that abstention under
        constitutional guarantees,                  Younger is inappropriate. E.g., Olde
        and          constitutional                 Discount Corp. v. Tupman, 1 F.3d 202,
        challenges to state action, no              212-13 (3d Cir. 1993) (Younger abstention
        less than pre-emption-based                 not appropriate where state proceeding
        c h a l l e n g e s , c a l l i n to        presented “an immediate potential for
        question the legitimacy of                  irreparable harm” to party’s right to
        the State’s interest in its                 arbitration under Federal Arbitration Act).
        proceedings reviewing or                    We re Hi T ech’s claim “facially
        enforcing that action. Yet it               conclusive,” for example, the threat of
        is clear that the mere                      irreparable harm might be significant and
        assertion of a substantial                  immediate. NOPSI, 491 U.S. at 366
        constitutional challenge to                 (suggesting that “[i]rreparable injury may
        state action will not alone                 possibly be established . . . by a showing
        compel the exercise of                      that the challenged state statute is
        federal jurisdiction.                       ‘flagrantly and patently violative of
                                                    express constitutional prohibitions.’”
New Orleans Pub. Serv., Inc. v. Council of          (quoting Younger, 401 U.S. at 53-54)).
the City of New Orleans (“NOPSI”), 491              But that is certainly not the case here, as
U.S. 350, 365 (1989). The majority                  the majority concludes that Hi Tech’s
characterizes this passage as dicta—a               claims are without merit.
                                               21
preemption claim. In my view, it is                 the challenge d sta te la ws w e re
precisely this sort of “federal interference        constitutional. 401 U.S. at 67-68, 73. The
with pending state judicial proceedings”            Supreme Court “affirm[ed] the judgment
that Younger abstention is designed to              dismissing the complaint, but solely on the
avoid. Slip Op. at 19 (quoting Garden               ground that, in the appropriate exercise of
State Bar Ass’n, 457 U.S. at 431).                  the court’s discretion, relief by way of
                                                    declaratory judgment should have been
       “The notion of ‘comity’
                                                    denied without consideration of the
       includes ‘a proper respect
                                                    merits.” Id. at 73. Consistent with
       for state fu nctions , a
                                                    Samuels, the District Court in this case
       recognition of the fact that
                                                    dismissed Hi Tech’s complaint, declining
       the entire country is made
                                                    to issue a judgment on the merits of Hi
       up of a Union of separate
                                                    Tech’s preemption claim despite the
       state governments, and a
                                                    court’s express doubts regarding the
       continuance of the belief
                                                    preemption issue. The majority affirms,
       that the          National
                                                    but, contrary to Samuels, affirms on the
       Government will fare best if
                                                    ground that Hi Tech’s complaint should
       t h e S t a t e s a n d t h e ir
                                                    have been dismissed on the merits. The
       institutions are left free to
                                                    m a j o r i t y r e a c h e s th e c o r r e ct
       perform their separate
                                                    result—affirmance of the District
       functions in their separate
                                                    Court—but on grounds that, in my
       ways.’”
                                                    opinion, are contrary to Supreme Court
                                                    precedent.
Slip Op. at 19 (quoting Garden State Bar                    The difficulty in this case is that Hi
Ass’n, 457 U.S. at 431 (quoting Younger,            Tech’s preemption claim is translucently
401 U.S. at 44)).                                   thin. Reading the majority’s analysis of
                                                    that claim, I have every confidence that
        Although Younger involved an
                                                    their treatment of the preemption issue is
action to enjoin an ongoing state
                                                    correct. My confidence is bolstered by the
proceeding, the companion case of
                                                    fact that both the NJDEP and the Superior
Samuels v. Mackell, 401 U.S. 66, 73-74
                                                    Court of New Jersey Appellate Division
(1971), concluded that the same comity
                                                    came to the same conclusion. New Jersey
and federalism principles preclude federal
                                                    v. Hi Tech Trans., LLC, No. A-929-03T3
courts from reaching the merits of a
                                                    (N.J. Super. Ct. App. Div. June 11, 2004);
declaratory judgment action. See Garden
                                                    New Jersey v. Hi Tech Trans., LLC, No.
State Bar Ass’n, 457 U.S. at 431 n.10. The
                                                    SWE PEA030001-U131 (NJDEP Sept. 29,
majority today reaches precisely the
                                                    2003).     In my view, however, these
opposite conclusion as that which I believe
                                                    observations simply reinforce the basic
is required by Samuels. In Samuels, the
                                                    premise of Younger: “Minimal respect for
district court dismissed the declaratory
                                                    the state processes, of course, precludes
judgment action on the merits, holding that
                                               22
any presumption that the state courts will
not safeguard federal constitutional
rights.” Slip Op. at 19 (quoting Garden
State Bar Ass’n, 457 U.S. at 431).
        The dispute in this case is a dispute
between the NJDEP and Hi Tech,
commenced in a state administrative
tribunal with judicial review in the state
courts. These proceedings were ongoing
at the time Hi Tech filed its complaint in
federal court, and there is no question that
these proceedings were and continue to be
capable of resolving the preemption issue
raised by Hi Tech. Due regard for the state
institutions involved in this dispute
required the District Court to decline Hi
Tech’s invitation to consider a declaratory
judgment that w ould obv iate the
substantial time and effort that New Jersey
has expended on these matters. Because
the majority’s reasoning suggests the
opposite, I am constrained to concur only
in the judgment.




                                                23
