BNSF, one of the country’s largest railroads, has chugged into court against the town of Cicero, asking a federal judge to flush a massive sewer rate increase targeted directly at the railroad, in an alleged illegal attempt to work the railroad over for tens of thousands of dollars more per month in fees.
BNSF says the town’s actions also imperil its ability to continue operating its Cicero railyard, which BNSF describes as “a major transportation hub that links the Midwest with the Pacific Northwest and plays a vital role in the interstate transportation of a wide variety of goods and communities.”
On June 8, BNSF Railway Company filed suit in Chicago federal court.
Michael T. Del Galdo
| dlglawgroup.com
The complaint takes aim at an ordinance enacted by Cicero’s town board last December, which rewrote the town’s sewer rate schedule for railroads.
While the rest of the city’s commercial and residential property owners pay sewer rates on the amount of sewage they pour into the city’s wastewater system, the new ordinance “requires railroads – and only railroads – to pay an exorbitant $350 per acre charge for monthly sewer use.”
Previously, railroads had been billed $27.42 per acre for sewer services in Cicero.
According to the complaint, that change boosted BNSF’s sewer bill by 1,250%, from $6,643 per month to $90,300.
Sewer rates for all other customers have remained unchanged, the complaint noted.
“Because the sewer rate charged to railyards is assessed on a per acre basis regardless of actual water use or the volume of flow to Cicero’s sewer, BNSF cannot reduce the amount charged by reducing its water consumption or adopting other measures that would avoid or reduce use of or contributions to Cicero’s sewer system,” the complaint said.
If it were charged on the amount of sewage it contributes to Cicero’s wastewater system, BNSF estimated the actual bill would be about $150 per month.
Further, city ordinances require BNSF to connect its massive intermodal railyard in Cicero to Cicero’s sewage system.
“… Unlike other commercial and industrial businesses, BNSF cannot avoid this discriminatory charge by relocating its railyard and associated infrastructure to another municipality or unincorporated area,” BNSF said in its complaint.
Despite the massive price increase, BNSF said Cicero never notified them of the pending change, leaving the railroad to learn of the rate spike when it received its first bill of 2021.
The only notice provided, BNSF said, was an item on the Cicero Town Board’s December meeting agenda, listed only as “An Ordinance Amending Chapter 99, Section 98-266 Of The Code Of Ordinances Of The Town Of Cicero, Illinois, Regarding Sewer Rates For The Town Of Cicero, County Of Cook, State Of Illinois.”
Further, BNSF said Cicero’s town board policies did not allow it any opportunity to ask questions or submit comment, even if it had learned of the actual content of the ordinance after the agenda posted, because all questions or concerns must be submitted to the town attorney 72 hours before the meeting.
After receiving the bill in February, BNSF said it contacted town officials to discuss the sudden, unexpected, unannounced increase. In response, the railroad said, Cicero threatened to shut off its sewer connections in 60 days, unless the railroad paid the bill in full, plus a 20% late fee, per month. Shutting off the sewer service would force BNSF to shut down its railyard, the complaint said, severely impacting not only BNSF’s operations, but the entire national supply chain that relies on freight rail.
On March 16, in response to communications sent by BNSF concerning the bill, BNSF received an email from Cicero’s town attorney saying: “Lastly, there is no ‘pending dispute’ to ‘work towards resolution.’ There is no provision under the law that permits you to dispute your bills in this manner and simply not pay the bulk of it. BNSF was sent an invoice and the Town expects payment of the full amount plus a 20% penalty for failure to pay by close of business on March 26, 2021.”
Cicero is represented by attorney Michael Del Galdo, of the Del Galdo Law Group, of Berwyn.
On May 19, the complaint said, Cicero delivered an invoice to BNSF, demanding the railroad pay a sewer bill of $395,450, or have their sewage shut off in 60 days, at which time the railyard “will have to be vacated.”
BNSF responded by filing suit.
In the complaint, BNSF asserts Cicero’s ordinance is preempted by various federal laws, including the ICC Termination Act of 1995, which, BNSF said, invalidates any local regulations that “would have the effect of preventing or unreasonably interfering with railroad transportation.”
BNSF asserted the Cicero ordinance “impermissibly interferes with railroad transportation by discriminating against transportation by rail.”
BNSF further argues Cicero’s ordinance violates the Railroad Revitalization and Regulatory Reform Act of 1976, which forbids a state or local “tax that discriminates against a rail carrier.” Because BNSF is not charged based on its actual sewage use, the railroad asserts the sewer rate charge is “in substance ‘another tax’ within the meaning” of the law.
BNSF also alleged the sewer rate increase violates the U.S. Constitution’s Commerce Clause by threatening the operations at BNSF’s railyard, which would harm interstate commerce.
“The charge represents an attempt by Cicero to disproportionately shift the costs and expenses of maintaining, operating, and improving the sewer system and other Town infrastructure to a key channel of interstate commerce, so as to benefit local interests at the expense of interstate commerce,” BNSF wrote in its complaint.
The complaint asks the court to issue an injunction, barring Cicero from enforcing its ordinance, as well as a judgment declaring the sewer rate increase “invalid and unenforceable as applied to railyards.”
BNSF requested no financial damages, other than compensation for their costs to bring its lawsuit.
BNSF is represented in the action by attorneys Renato Marriotti, Holly H. Campbell and Sara L. Chamberlain, of the firm of Thompson Coburn LLP, of Chicago and St. Louis, as well as attorneys with the firm of Munger Tolles & Olson, of San Francisco.