Hochul Calls for Rail Safety Regulations — After Vetoing Keystone Rail Safety Bill

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IN THE WAKE of the recent train derailment and toxic chemical release in East Palestine, Ohio, Governor Kathy Hochul called on the federal government to enact stricter regulations on hazmat trains and said that safety is her top priority. Her transportation commissioner said that, under Hochul’s leadership, the state is “laser focused on safety in all modes of transportation, especially rail safety.”

Less than three months ago, Hochul struck a different tone with her veto pen. The proposed two-person crew law — which the governor rejected on December 9, 2022 — would have required most freight trains to be operated by at least a conductor and an engineer, a safety measure that both rail unions and bipartisan lawmakers supported. Railroad companies and business groups opposed it.

Two-person crew laws have passed in states around the country, and the federal government is currently considering its own, as rail companies have slashed their workforces by nearly 30 percent in recent years and are operating longer and heavier trains with smaller crews. Rail unions, federal regulators, and lawmakers have argued that the minimum staffing laws are essential for maintaining safety.

“This bill was one part of a bigger look at the rail industry, and attempted to strengthen protections for both workers and the communities they travel through every day,” Democratic Senator Tim Kennedy, the transportation committee chair and the bill’s state Senate sponsor, told New York Focus. “The devastation that continues to unfold in East Palestine is the strongest form of evidence that rail safety needs to be prioritized, both in New York and across our country.”

Though New York’s bill passed in May with bipartisan support — approved by margins of 48 to 13 in the Senate and 121 to 28 in the Assembly — it met fierce opposition from the rail industry. Business groups including Railroads of New York, the statewide industry group that represents CSX, Canadian National, Canadian Pacific, and Norfolk Southern, among others, reported lobbying on the bill in state filings reviewed by New York Focus.

Hochul said in her veto memo that federal laws and pending rulemaking preempt state two-person crew legislation — an argument the railroads and their lobbying groups have used to oppose state staffing bills. But two-person crew laws have been enacted in other states without legal challenges, and legal experts disagree with Hochul’s assessment of the preemption.

Hochul’s office pointed New York Focus to a court decision blocking an Illinois two-person crew law and to the federal government’s rulemaking on the issue, but declined to provide on-record comment.

James Louis, National Vice President of the 57,000-member Brotherhood of Locomotive Engineers and Trainmen, told New York Focus that by citing the preemption issue in her veto memo, Hochul may be helping the industry fight crew size laws in other states.

“She had an opportunity to improve rail safety and she let it go,” said Louis, who lobbied for New York’s legislation. “If she feels [safety is important] we could get that bill reintroduced and put it through — except now the railroads are using her argument that it’s preempted.”

Fierce Pressure

A federal version of the two-person rule was first introduced by the Obama administration in 2016, in the wake of a series of high-profile crude oil train derailments. The proposed rule noted that the Federal Railroad Administration (FRA) “has studies showing the benefits of a second crewmember and other information detailing the potential safety benefits of multiple-person crews.”

Around that time, nearly every Class I freight railroad in the United States adopted a new scheduling system known as “precision scheduled railroading,” an aggressive cost-cutting measure. Under the new system, trains operate on fixed schedules rather than being dispatched as needed, with the aim of reducing “dwell time,” or the time trains spend waiting in yards. In practice, the system of constant movement has heralded longer trains, smaller workforces, and shorter safety inspections — or none at all.

This is the model Norfolk Southern uses in Ohio — and nationwide. The railroad industry has argued the system does not impact safety, but the unions disagree.

“What I can tell you from our members on the ground is that they feel like safety has degraded,” Greg Regan, president of the AFL-CIO’s Transportation Trades Department, told CBS News about precision-scheduled railroading. “There is a real impetus to go faster. And so we‘ve seen that pressure decrease the inspection times from about two minutes down to an average of 30 to 45 seconds.”

Between 2016 and 2022, Class I railroads eliminated an estimated 29 percent of their workforces. In turn, railroads are pushing to be able to operate ever-lengthening trains with just a single engineer. In the wake of the recent derailment in East Palestine, Ohio, which preliminary investigations suggest was caused by the type of mechanical issue that crew members don’t have time to catch in inspections — or are instructed to ignore — lawmakers and regulators have heightened their scrutiny on the push for speed and profits over safety in the railroad industry.

When Donald Trump took office in January 2017, the Obama administration’s two-man crew rule still wasn’t finalized, and the Trump administration abandoned it. President Joe Biden’s Department of Transportation has proposed its own version of a two-person crew rule, but has not moved to finalize it. In the meantime, numerous states have passed their own two-person crew laws — including California, Colorado, Illinois, Nevada, Washington, West Virginia, and Wisconsin.

New York’s two-person crew bill, first proposed in 2020 and passed in 2022, had wide support from state labor unions, including the New York State AFL-CIO; Sheet Metal, Air, Rail Transportation Union (SMART) Transportation Division of New York; the Brotherhood of Locomotive Engineers and Trainmen; and the International Brotherhood of Teamsters.

“This legislation is intended to protect not only railroad workers, but the general public as well,” said the Brotherhood of Locomotive Engineers and Trainmen’s then-national president Dennis R. Pierce in a June 2022 statement. “Through your strong grassroots support, we have been able to overcome fierce pressure from railroad corporation lobbyists. Please contact the governor and help us get this bill across the finish line.”

Railroads of New York, the industry group that includes Norfolk Southern, wrote in an August 2022 memo that it “strongly opposes” the legislation, claiming “numerous studies have shown that mandating at least two crew members would have no impact on the safety of railroad operations.”

The group wrote that it sought tech-based safety solutions, and “imposing increased crew size mandates would impede these technological advances as freight rail companies would be less inclined to invest in new technologies that could not be maximized in the presence of such increased regulation.”

Scott Wigger, Railroads of New York’s executive director, told New York Focus that the railroads should be regulated at the federal level. “The rail network, it’s just national in nature, it doesn’t stop at state boundaries,” Wigger said. “At the end of the day, you just can’t have different states with different laws. That’s why we always feel that the federal level — the FRA — they’re the ones who are properly empowered to make these laws.”

When asked whether the group supported the federal two-person crew rule, Wigger said that the group only weighs in on state-level laws and regulations.

Corporate lobbying groups including the Capital Region Chamber Of Commerce, the National Federation of Independent Business, the New York State Economic Development Council, and the Business Council also reported lobbying on the legislation.

“Years ago, it was commonplace to have five employees on trains,” said the Business Council, which was registered to lobby on the legislation, in a statement. Citing technological advancements that “modernized” staffing and “eliminated redundancy,” the council argued that “attempts to require two-person crews ignore the successful use of single ones through the successful deployment of technology.”

Federal Preemption

In December, when Hochul vetoed the two-person rule with little fanfare — it was one of 14 bills vetoed that day — she wrote that the legislation was preempted by federal law and pending federal rulemaking.

While Hochul’s veto memo did not say which federal law preempted the legislation, an office spokesperson directed New York Focus to a 2020 Illinois court decision which blocked a two-person crew law there.

The lawsuit was based on a 2019 regulation issued by Trump, which has since been repealed. When Trump’s Federal Railroad Administration withdrew the Obama-era two-person rule, it issued a notice announcing that the withdrawal would “preempt all state laws attempting to regulate train crew staffing.”

Illinois passed its 2019 crew size bill in spite of the Trump order, joining nine other states that then had two-person crew laws on the books. A regional railroad and two railroad lobbying groups sued to block the Illinois law, arguing that federal rules — including the Trump order — preempted it. A federal district court struck the law down, providing the opinion Hochul’s office cited.

But other states had filed suits against Trump’s preemption rule, and a federal circuit court struck the order down in February 2021. The Illinois ruling that Hochul’s office cited to New York Focus had lost its legal basis. (Hochul’s office did not respond to a follow-up question noting the change.)

The railroad and rail lobbying groups sued again, reaching farther back than the Trump rule to argue for federal preemption. The second time, the plaintiffs successfully based their preemption claim on the 1973 Regional Rail Reorganization Act, which authorized the creation of Conrail, a federal publicly owned railroad, and preempted state regulations in places where Conrail operated.

While the rail groups won that case, others have argued that the 1973 law is obsolete — Conrail was split up in 1999. The FRA noted in a 2011 report that the preemption provision’s “narrow and specifically defined purpose” had been met, and the provision should be repealed. Larry Mann, one of the principal drafters of the earlier 1970 Federal Railroad Safety Act, wrote in 2020 that the Conrail law “is unconstitutionally vague and lacks any rational basis.”

In Maryland, where Republican former Governor Larry Hogan vetoed a two-person crew law in 2019, the SMART union echoed Mann’s argument during an attempt to revive the bill in 2021. The Maryland attorney general’s office concurred in a letter stating that the bill “appears to neither violate, nor is preempted by, federal law as it relates to crew member requirements for trains used in connection with the movement of freight in the State.”

At least five states remain with laws governing train crew size. A separate federal circuit court has upheld a Wisconsin crew size law.

For the time being, Hochul’s office is deferring to the supposed federal preemption with the rulemaking process still ongoing, now under a third president. Mann told New York Focus that citing a proposed rule as preempting state law “makes no sense. The FRA has been considering crew size regulation for more than 6 years, and still there is no final rule promulgated.”

In his view, waiting for federal rulemaking in this manner allows industry to oppose state laws on the basis that a federal proposal is being considered — and lacks legal backing. “To carry NY’s view to the fullest extent would mean an agency could simply issue a notice that it is considering a regulation, and a state would be preempted,” Mann said. “The agency would not even need to issue a final rule. Such a conclusion would create complete turmoil in administrative law and is not the law.”

“After having passed both houses, I was certainly disappointed to see [the two-person crew rule] vetoed,” said Kennedy, the Senate sponsor, “but that doesn't mean our work is finished — in fact, far from it.”

In the wake of Hochul’s veto, Louis, of the Brotherhood of Locomotive Engineers and Trainmen, said unions have been left out in the cold.

“She has been totally silent with labor since she vetoed this bill,” Louis told New York Focus. “No conversation, no nothing. I have known Kathy Hochul since she was a county clerk. Nothing from her. I expected better.”