Stock Markets March 30, 2026

Railroad Trade Group Files Federal Suit to Block New Jersey Safety Measure

Association of American Railroads argues state law intrudes on exclusive federal authority and seeks injunction

By Marcus Reed BRK.B CNI CSX NSC
Railroad Trade Group Files Federal Suit to Block New Jersey Safety Measure
BRK.B CNI CSX NSC

The Association of American Railroads filed suit in federal court in Trenton, New Jersey, contesting Senate Bill 3389. The trade group contends the new state law imposes severe restrictions and unlawfully encroaches on federal jurisdiction over railroad safety. The complaint targets five provisions of the statute, including a two-person crew mandate for trains carrying hazardous materials, a state-run wayside detector program, and expanded labor inspection rights.

Key Points

  • The Association of American Railroads sued New Jersey in federal court in Trenton to block Senate Bill 3389, signed by former Governor Phil Murphy in January.
  • The complaint challenges five provisions of the law, including a two-person crew rule for trains carrying hazardous materials, a state-run wayside detector program, and a provision allowing labor representatives to inspect railroad property.
  • The trade group argues the law unlawfully intrudes on federal authority over railroad safety and constitutes an unconstitutional taking of property; defendants include Attorney General Jennifer Davenport and Transportation Commissioner Priya Jain.

The Association of American Railroads has taken legal action against the State of New Jersey, asking a federal court in Trenton to block a recently enacted rail safety statute it says improperly interferes with federal authority.

Filed on Monday, the complaint specifically challenges Senate Bill 3389, which was signed into law by Democratic former Governor Phil Murphy shortly before he left office in January. The trade group argues that five provisions of the law impose "severe restrictions" on rail operations and represent an unconstitutional intrusion into a domain the group says Congress has placed under exclusive federal control.

Among the targeted provisions is a requirement that trains carrying hazardous materials operate with two-person crews. The suit also contests the creation of a state-administered "wayside detector" program intended to monitor wheels, railcars and track conditions. Another challenged element permits labor representatives to inspect railroad property for potential hazards.

In its filing, the trade group asserts that "New Jersey is impermissibly attempting to assert its own regulatory authority over an area Congress has placed under exclusive federal control," and that the state action amounts to an unconstitutional "taking" of property. The complaint names New Jersey Attorney General Jennifer Davenport and Transportation Commissioner Priya Jain as defendants.

Neither the attorney general's office nor the transportation department provided an immediate comment after market hours, according to the filing. The lawsuit requests an injunction to prevent enforcement of the statute while the legal challenge proceeds.

The Association of American Railroads counts the Class I freight carriers among its members, citing Berkshire Hathaway-owned BNSF, Canadian National Railway, Canadian Pacific Kansas City, CSX, Norfolk Southern and Union Pacific. The complaint notes that CSX and Norfolk Southern operate in New Jersey.

Supporters of lighter regulation in the industry sometimes argue that fewer constraints can boost profitability, a point cited in public debate over rail oversight. The trade group's legal action frames the dispute as a conflict over regulatory authority and property rights rather than an operational disagreement about specific safety practices.


What this means

The case will test the balance between state-level safety initiatives and federal preemption in rail regulation. The immediate legal remedy sought is an injunction blocking the New Jersey law from taking effect while the courts review the constitutional and statutory claims raised by the railroads' trade association.

Risks

  • Uncertainty over the legal outcome - the complaint seeks an injunction, and the courts will decide whether the state law is preempted by federal authority, affecting the statute's enforceability. (Impacted sectors: rail transportation, logistics)
  • Potential operational and compliance impacts - if the law were enforced before litigation resolves, rail carriers operating in New Jersey could face new staffing and inspection requirements that affect operations, particularly for trains carrying hazardous materials. (Impacted sectors: freight rail, hazardous materials transport)
  • Regulatory and jurisdictional conflict - the dispute raises the risk of an extended legal battle between state and federal authority that could affect regulatory certainty for carriers and related stakeholders. (Impacted sectors: transportation regulation, supply chain management)

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