U.S. Surface Transportation Board Reaffirms Broad Federal Preemption of Federal, State, and Local Rail Regulation

On November 9, 2026, the U.S. Surface Transportation Board (STB) issued a policy statement on the scope of its jurisdiction over transportation by rail carriers and on the preemption of conflicting federal, state, and local laws under the ICC Termination Act of 1995 (ICCTA). The policy statement reaffirms the broad scope of federal preemption under ICCTA, clarifies the analytical framework applied by the STB and courts, and offers potentially significant refinements and clarifications. Although the statement does not establish binding rules or predetermine the outcome of individual disputes, it provides important guidance for railroads, shippers, and state and local governments on these issues.

Drawing on three decades of STB and court precedent, the STB explains that the policy statement is intended to provide a consolidated explanation of ICCTA jurisdiction and preemption, reduce uncertainty and litigation costs, facilitate efficient resolution of disputes, and encourage the smooth flow of interstate commerce on the nation’s rail network.

Under 49 U.S.C. § 10501(b), the STB has exclusive jurisdiction over “transportation by rail carriers,” which includes transportation performed by or under the auspices of a rail carrier as well as certain related activities involving rail tracks and facilities. The STB emphasizes that ICCTA preemption reaches beyond traditional economic regulation and may apply to state and local permitting requirements, zoning ordinances, and environmental restrictions as well as common-law tort claims and property actions. Preemption may also apply even where the STB does not itself actively regulate the particular activity.

The policy statement also addresses the two principal forms of analysis for ICCTA preemption.
Categorical preemption applies to state and local requirements that, by their nature, manage or govern rail transportation, including permitting or preclearance requirements that could prevent or unreasonably delay rail operations. Such requirements are preempted without a fact-specific inquiry into their practical effects. As-applied preemption is used where a state or local requirement unreasonably burdens or interferes with rail transportation or discriminates against rail carriers. Beyond synthesizing existing precedent, the policy statement offers potentially important refinements and clarifications in several areas.

First, the STB articulates a potential framework for determining when state and local regulation directed at rail customers, rather than rail carriers, may be preempted. Although rail customers are not themselves subject to the STB’s jurisdiction merely because they receive rail service, the STB recognizes that restrictions on customer facilities can effectively regulate the common carrier service that railroads provide. The policy statement identifies a new two-part threshold inquiry: (1) whether the facility or project is developed or used to receive or tender common carrier rail service, such as a transloading or off-loading facility, and (2) whether the state or local requirement restricts, conditions, or dictates that service, including its volume, frequency, timing, configuration, or commodity mix. If both conditions are satisfied, the requirement may constitute regulation of transportation by a rail carrier and be subject to categorical or as-applied preemption under ICCTA. If either answer is no, ICCTA preemption is generally not implicated unless the action discriminates against rail transportation.

This clarification has significant implications for the development and expansion of rail-served industrial facilities by making clear that local restrictions on rail customer facilities can sometimes be preempted. At the same time, the STB emphasizes that much regulation of rail customers will remain outside its jurisdiction, particularly requirements directed at manufacturing or other nonrail activities rather than the receipt or tender of common carrier service.

Second, the STB suggests that claims seeking exclusive possession of railroad property should generally be analyzed under categorical rather than as-applied preemption. Such claims may arise through eminent domain, condemnation, adverse possession, prescriptive easement, or quiet title actions. The STB explains that efforts to take exclusive control of any portion of a jurisdictional railroad right-of-way, or other property used or planned for rail transportation, are best understood as categorically preempted because they permanently foreclose present or future rail use. Under this approach, a railroad would not necessarily be required to demonstrate through a detailed factual inquiry that the proposed taking would unreasonably interfere with its operations. By contrast, claims involving routine, nonexclusive uses, such as road crossings or underground utility easements, would continue to be evaluated under an as-applied framework. Although the STB does not adopt a definitive approach governing all property disputes, its discussion signals a potentially more protective approach to preserving railroad property for current and future transportation uses.

Third, the STB acknowledges that both ICCTA and the Federal Railroad Safety Act (FRSA) can preempt a state or local law that affects rail safety. In circumstances where a state or federal law implicates both ICCTA and FRSA, the STB harmonizes such laws to give effect to both when possible. The STB nonetheless emphasizes that state and local requirements may be preempted under ICCTA even where they concern rail safety, particularly where they would create a patchwork of restrictions on interstate rail operations. This clarification confirms ICCTA’s broad reach even when a state or local law invokes safety as a rationale for the attempted regulation.

Fourth, the STB clarifies that there is no “police power” exception to ICCTA preemption. The STB clarified that as-applied ICCTA preemption does not turn simply on whether a state or locality is exercising its traditional police powers, addressing certain prior cases that had suggested the existence of an exception. Rather, generally applicable, nondiscriminatory requirements may remain enforceable where their effects on rail transportation are merely incidental and they do not otherwise unreasonably burden rail operations.

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The policy statement reinforces the broad protections that ICCTA affords interstate rail transportation and provides stakeholders with a consolidated resource for evaluating preemption disputes. Its most significant implications may arise in challenges to local restrictions on rail-served facilities and efforts to acquire railroad property for nonrail uses. Railroads, shippers, terminal developers, and state and local governments should consider the STB’s analysis when evaluating existing or proposed restrictions on rail transportation and related infrastructure. Although the policy statement is nonbinding and individual disputes will remain fact-specific, it provides a potentially influential articulation of the ICCTA preemption standards that will be important both in future preemption litigation and in the development and construction of rail infrastructure projects.