                   United States Court of Appeals
                         FOR THE EIGHTH CIRCUIT
                                    ___________

                               No. 98-3544/3993
                                ___________

Burlington Northern and Santa Fe     *
Railway Company, a Delaware          *
corporation,                         *
                                     *
             Appellant,              *
                                     *
       v.                            *
                                     * Appeals from the United States
State Tax Commission, Missouri;      * District Court for the
Van E. Donley, member of the         * Western District of Missouri
Missouri State Tax Commission;       *
Bruce E. Davis, member of the        *
Missouri State Tax Commission;       *
Douglas W. Burnett, member of        *
the State Tax Commission,            *
                                     *
             Appellees.              *
                                ___________

                            Submitted:    April 19, 1999

                                   Filed: September 1, 1999
                                    ___________

Before McMILLIAN, LOKEN and MURPHY, Circuit Judges.
                           ___________

McMILLIAN, Circuit Judge.
       Burlington Northern & Santa Fe Railway Co. (BNSR) appeals from two final
orders entered in the United States District Court1 for the Western District of Missouri,
one denying BNSR's application for preliminary injunction and the other granting
summary judgment in favor of the Missouri State Tax Commission (the State). See
Burlington Northern and Santa Fe Ry. v. State Tax Comm'n, Case No. 98-0760-CV-W-
5 (Burlington I) (E.D. Mo. Sept. 2, 1998) (Order Denying Plaintiff's Motion for
Preliminary Injunction); id. (Burlington II) (Nov. 20, 1998) (Order Granting
Defendant's Motion for Summary Judgment). In this consolidated appeal, BNSR
argues that the district court erred in finding that the Missouri personal property tax as
applied to BSNR's rolling stock did not discriminate against BNSR in violation of §
603(1)(d) of the Railroad Revitalization and Regulatory Reform Act of 1976 (4R Act),
codified at 49 U.S.C. § 11503(b)(4). For the reasons discussed below, we affirm.



       Jurisdiction in the district court was proper based upon 49 U.S.C. § 11501(c).
Jurisdiction in the court of appeals is proper based upon 28 U.S.C. § 1292(a)(1) and
28 U.S.C. § 1291.

                                     BACKGROUND

      The State assesses personal property taxes on property owned by individuals and
corporations in the State.2 However, the State exempts from taxation that personal
property which is "in transit through [the] state." MO. REV. STAT. § 137.910 (1994).
The statute defines personal property subject to the exception as personal property
which: (a) is moving through or over Missouri in interstate commerce or (b) is stored

      1
        The Honorable Nanette K. Laughrey, United States District Judge for the
Western District of Missouri.
      2
         The State does not assess real estate, money, and personal items in the home
for personal property taxes.

                                           -2-
in a warehouse in Missouri while awaiting shipment to another destination out of state.
See id.

       The controversy in this case arose when the State assessed BSNR's Missouri
personal property at $132,990,958.00 for tax year 1998.3 This assessment included a
valuation of BNSR's rolling stock--train cars and locomotives--at $38,389,041.00,
which corresponds to approximately $2,000,000.00 in property taxes. The State makes
similar personal property tax assessments on the "instrumentalities" of transport on
airlines, individual rail cars owners, truck lines based in Missouri, and boat or barge
owners who reside in Missouri, i.e., airplanes, rail cars, trucks, and boats or barges.

       BNSR initiated this action in federal district court seeking injunctive and
declaratory relief. BNSR argued that the rolling stock is personal property moving in
interstate commerce, which should be exempt from Missouri personal property taxes
under § 137.910, and that the State's failure to exempt it constituted discrimination in
violation of § 11503(b)(4). The district court denied BNSR’s motion for preliminary
injunction finding that BNSR had not met its burden to prove the State had violated §
11503(b)(4) or that it was likely to do so. See Burlington I, Slip op. at 18-19. BNSR
filed an interlocutory appeal to this court. One month after denying the preliminary
injunction, the district court sua sponte transformed the State’s motion for judgment on
the pleadings into a motion for summary judgment. After hearing from a witness for
the Commission, the district court granted the State's motion for summary judgment,
finding that the tax assessment of the rolling stock did not discriminate against BNSR.
See Burlington II at 27-28. BNSR timely appealed. This court consolidated BNSR’s
two appeals.



      3
        The State assessed the value of BNSR's Missouri personal property by taking
a percentage of the value of all the railroad’s property which corresponded to the
amount of the railroad’s property that could reasonably be allocated to the State.

                                          -3-
                                      DISCUSSION
                                           A
       We review a denial of a motion for preliminary injunction for abuse of discretion
or clear error. See United Industries Corp. v. Clorox Co., 140 F.3d 1175, 1179 (8th
Cir. 1998). We review the grant of summary judgment de novo, applying the same
standard as the district court. See United States v. Scherping, No. 98-2009, 1999 WL
600469 at *3 (8th Cir. Aug. 11, 1999) (citing Dillon v. Yankton Sioux Tribe Housing
Authority, 144 F.3d 581, 583 (8th Cir.1998)). Summary judgment is proper when,
viewed in the light most favorable to the non-moving party, there is no genuine issue
of material fact and the moving party would be entitled to judgment as a matter of law.
See id. (citing Fed. R. Civ. P. 56(c)).

       Applying these standards of review, we conclude that the district court did not
abuse its discretion in denying BNSR's motion for preliminary injunction nor did it err
in granting summary judgment for the State. We will combine our discussion of the
two appeals because the facts, legal arguments, and analysis are substantially the same.



                                           B

      BNSR argues that the State discriminated against it in violation of § 11503(b)(4)
when it refused to apply the § 137.910 exception to the general personal property tax
to BNSR's rolling stock. BNSR contends that its rolling stock falls within the
exemption because it is personal property moving in or through interstate commerce,
and that the State's decision not to include it within the exception constituted
discriminatory taxing of a railroad because the State did not assess the personal
property in interstate commerce of other industries. We disagree.

      The 4-R Act protects railroads from discriminatory State taxation. It was passed
to "eliminate the long-standing burden on interstate commerce resulting from

                                          -4-
discriminatory State and local taxation of common and contract carrier transportation
property." Ogilvie v. State Bd. of Equalization, 657 F.2d 204, 206 (8th Cir.
1981)(quoting the statement of purpose accompanying S. 927, S. Rep. No. 1483, 90th
Cong., 2d Sess. 1 (1968), and S. 2289, S. Rep. No. 91-630, 91st Cong., 1st Sess. 1
(1969), both of which dealt with taxation of railroads and were later integrated into the
4-R Act). In particular, § 11503(b)(4) prohibits States from imposing "another tax"
which discriminates against railroads. In this case we are not confronted with a specific
tax applied only to railroads, but rather BNSR's allegation that the State's failure to
apply a tax exemption subjected BNSR to a different taxation scheme than other
industries.

        In Department of Revenue v. ACF Industries, 510 U.S. 332 (1994) (ACF
Industries), the Supreme Court held that "a State may grant exemptions from a
generally applicable ad valorem property tax without exposing the taxation of railroad
property to invalidation under [§ 11503] (b)(4)." Id. at 339. Confronting the
contention that this holding would allow States to evade the 4-R Act and impose
discriminatory taxes on railroads as long as it did so through exemptions rather than
direct taxation, the Court pointed out that in ACF Industries, the railroad was not taxed
"alone or as part of some isolated and targeted group" while all others were exempted.
Id. at 345.

       In Burlington Northern R. R. v. Bair, 60 F.3d 410 (8th Cir. 1995) (Bair), we had
the opportunity to apply the ACF Industries reasoning. In Bair, we held that to
determine whether a tax exemption scheme violated the 4-R Act under ACF Industries,
the court must compare the "exempt" category with the "general application" category,
because if the exempt category is too large, the tax cannot be considered generally
applicable. Id. at 412. We concluded that the Iowa tax scheme in question violated §
11503(b)(4) because it subjected railroad property to taxation under a purported tax of
general application but exempted nearly all other industries. See id. at 413. As such,
the exemption singled out railroads for taxation not imposed on other industries.

                                          -5-
        Thus, our inquiry here turns on whether the State singles out railroad property
for taxation because it exempts all or nearly all other personal property from taxation
under § 137.910. BNSR compares the State's treatment of the rolling stock with the
State's treatment of other industries' personal property in interstate commerce. Because
the majority of personal property in interstate commerce is exempted from the personal
property tax under § 137.910, BNSR contends that the personal property tax cannot be
considered a tax of general application as applied to such industries. The State
contends that the personal property tax is a tax of general application because it applies
to all personal property in the State and because § 137.910 is a limited exception that
applies only to a small portion of taxable personal property.

       As we noted above, Missouri assesses all personal property in the State for tax
purposes. Section 137.910(1) exempts personal property that is in interstate commerce.
We do not believe that the exemption of goods in interstate commerce or for resale in
another state is sufficiently broad to swallow the general personal property tax. Thus,
the taxation of personal property is still a tax of general application under Bair, despite
the § 137.910 exception. Furthermore, we do not believe that the State's decision not
to exempt BNSR's rolling stock under § 137.910(1) constitutes discriminatory taxation
of a railroad in violation of § 11503(b)(4). Here, the State has chosen not to exempt
the "instrumentalities" of interstate commerce--such as BNSR's rolling stock–which do
the actual carrying of goods in or over Missouri in interstate commerce--under §
137.910(1). We note that the State does not single out railroads with this policy,
because it also taxes airplanes, individual rail cars, and Missouri-based trucks and
boats or barges, even though, under BNSR's reasoning, these too should be exempted.
This group is large enough to satisfy us that the State did not attempt to single out
railroads for different taxation than other industries. See ACF Industries, 510 U.S. at
345; Bair, 60 F.3d at 412.




                                           -6-
                                   CONCLUSION

       Because the State's action does not single out railroads for discriminatory
taxation, we hold that there was no 4-R Act violation. Accordingly, we affirm the
denial of preliminary injunction relief and the grant of summary judgment in favor of
the State.

      A true copy.

             Attest:

                CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.




                                         -7-
