Court rejects town ordinance to curb Vt. Railway operation

Townspeople are waiting to hear the Shelburne Selectboard’s next move in a legal battle with Vermont Railway, that was dealt a serious blow in federal court last week.

On Tuesday night, multiple residents were eager to know if the town will appeal the court ruling, or if it is ready to end its efforts to thwart the railroad’s salt storage facility near the LaPlatte River.

Last Thursday, a federal judge issued a permanent order banning the Shelburne town government from enforcing a hurriedly passed ordinance dealing with the storage, handling and distribution of hazardous substances — an ordinance that the court said targeted Vermont Railway and its new salt-storage facility.

The rules would “pose unreasonable restrictions on the railway in its operation of the storage facilities and are pre-empted” under the federal Interstate Commerce Commission Termination Act, Senior Judge William K. Sessions III said in his ruling.

He ruled the ordinance must be struck “because (1) it discriminates against the railway and (2) the significant burden it places on the railway outweighs the town’s inconclusive and overstated public health and safety concerns.”

Sessions said the permanent injunction is necessary because the railway “has suffered an irreparable injury” and remedies such as monetary damages will not suffice. He said “the public interest is not disserved by a permanent injunction.”

Marc Heath, one of the lawyers from Downs Rachlin Martin representing the railroad said his client was happy with the ruling.

“We are very pleased the judge agreed with what we had said,” Heath said. “Judge Sessions not only permanently enjoined the haz-mat ordinance, but he also permanently enjoined the town from attempting to enforce other portions of its zoning bylaws. As he noted, the town cannot enforce any pre-construction requirements — conditional use, subdivision, building permits etc.”

Heath said Judge Sessions also permanently enjoined the sections dealing with “performance standards” that the selectboard had attempted to implement.

The selectboard members heard comments from residents Tuesday evening but stopped short of outlining their intentions regarding the court case. Instead, they said they would meet in closed session late Wednesday afternoon to discuss legal strategy, after the Shelburne News went to press this week. It was not clear when a decision would be announced.

Any potential appeal would be to the U.S. Second Circuit Court of Appeals in New York City. In the meantime, Judge Sessions’ permanent injunction would remain in place.

Former selectboard member Chris Boyd was among the speakers Tuesday urging the town to pull the plug on the two-year-old legal case.

“It’s gone on far enough,” Boyd declared.

Local resident Sean Moran said his son, who is a lawyer, called the recent ruling a “public spanking.”

Ahead of Tuesday’s meeting, vice chairman Jerry Storey called Sessions’ decision “a pretty clear rendering of a judgment” and acknowledged there will be pressure to let it stand.

“I think we fought the good fight. That is as much as I am going to say for now,” Storey said.

The town’s legal battle has cost taxpayers $451,000 since January 2016, Town Manager Joe Colangelo said. It was unclear if all the legal bills from the town’s law firm, Monaghan Safar Ducham, have been sent or if all the experts hired by the town attorney have been paid.

“I respect members of the Shelburne Selectboard for staying true to their values in the face of adversity,” the town manager said. “The passions and commitment to civic life from a cross-section of the community make Shelburne a unique and special place.”

The $5.5 million facility, which received several permits from the state but did not undergo local development review, is used to store road salt until it can be hauled to town and state highway department storage areas. Critics, including town officials, question whether the facility can operate without polluting the nearby river, groundwater and Lake Champlain.

The judge wrote that the railroad facility off Route 7 north of the village includes a “sophisticated environmental monitoring and mitigation plan,” and state government monitors its operation.

The judge stopped short of approving a railroad request to block Shelburne from enforcing any zoning or subdivision regulations forever against the salt sheds.

“The court appreciates the bitterness of this dispute, but this request is a step too far,” Sessions wrote. He said such a wide ban would block possible action attempted by future selectboards.

However, “the court notes that the railway would certainly have recourse if it is subjected to frivolous litigation related to its transloading facility in the future,” Sessions wrote in his 30-page decision.

As Sessions noted, the legal battle has been bitter at times. The case has split the town and even the selectboard, which approved the ordinance 3-2 on Aug. 8. The chairman, Gary von Stange, the then-Vice Chairman John Kerr and member Dr. Colleen Parker were in favor.

Selectboard members Storey and Dr. Josh Dein voted against, saying the town needed to slow down and study the issue more. The selectboard did postpone the effective date until late October so members could rewrite some problem areas. Several changes were adopted Oct. 24, but little was done for the ongoing concerns of Vermont Railway.

The ordinance was approved the night before the town was required to file long-awaited information with the federal court, and only after the railway had said it acted in good faith by giving the town extra time.

In rejecting the town’s position, Judge Sessions wrote, “First, the timing of its enactment, the focus and thresholds included in it, and the severe penalties permitted by it all point toward discrimination against the railway. … The storage ordinance would place significant restrictions on when and where rail cars move and when and where rail commodities are shipped and stored.

“These restrictions, as applied to the facility, unreasonably burden rail transportation and do not meaningfully protect public health and safety. Thus, the storage ordinance is not a valid use of the town’s police powers” and is pre-empted by the federal Interstate Commerce Commission Termination Act.

In one section of his ruling under the headline “discrimination,” the judge noted Shelburne is trying to stop Vermont Railway, but had no trouble allowing the town’s own salt shed, which is near a school and the LaPlatte River, to continue to store 550 tons of road salt.

The ordinance would have allowed the town to fine the railroad up to $10,000 a day, and to issue health orders to remove the road salt and to limit the amount of fuel and other commodities the railway can temporarily store.

“These regulations would impose severe restrictions on the Railway’s ability to conduct its business,” the judge said.

Residents Tuesday also asked the selectboard about comments circulating on social media that suggest a private donor may pay up to $20,000 to fund a town appeal.

Only Storey addressed that question saying it would be inappropriate for a municipality to accept such a gift saying it would “establish a special interest.”

Shelburne News reporter Lisa Scagliotti contributed to this report.

2 Responses to "Court rejects town ordinance to curb Vt. Railway operation"

  1. Sharon Palady   December 14, 2017 at 1:49 pm

    Transparency happens behind the guise of Executive Session’!

  2. Sean Moran   December 17, 2017 at 8:14 am

    Indeed- like anyone doesn’t know how they vote- STILL in the block against two logical voices


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