Associational Standing Re-Drawn: Fourth Circuit Allows Trade Associations to Allege Facial ICCTA Pre-emption but Bars Blanket Takings Claims

1. Introduction

In Association of American Railroads v. Jehmal Hudson, the United States Court of Appeals for the Fourth Circuit revisited the doctrine of associational (or “representational”) standing in the highly regulated railroad context. The Association of American Railroads (AAR) challenged a 2023 Virginia statute, Va. Code § 56-16.3 (“Fiber optic broadband lines crossing railroads”), which streamlines access for broadband providers to install cable across railroad property. The district court dismissed the suit, holding that AAR lacked standing to litigate either its federal pre-emption claims—rooted in the Interstate Commerce Commission Termination Act (ICCTA)—or its Takings Clause theory.

On appeal, Judge Harris (joined by Judges Wilkinson and Rushing) affirmed in part, reversed in part, and remanded. The panel held that:

AAR does have associational standing to assert two facial ICCTA pre-emption challenges (discrimination and aggregate unreasonable-burden theories).
AAR does not have associational standing to litigate a facial Takings Clause claim, because that claim inevitably requires individualized, property-specific proof of compensation.

The decision thus creates a new, refined rule for trade associations: claims requiring industry-wide, generalized evidence may proceed without individual member participation, while claims that hinge on property-specific valuation cannot. The case now returns to the district court for merits adjudication of the ICCTA issues.

2. Summary of the Judgment

Standing Framework Applied: The court used the three-prong Hunt test—member standing, germaneness, and necessity of individual participation.
ICCTA Claims: For both discrimination and aggregate-burden theories, the court held that proof concerns the statute’s operation “in general,” not rail-by-rail specifics; hence AAR may press these claims on its members’ behalf.
Takings Claim: Because just compensation “turns on the market value of specific parcels,” individual railroads must participate. AAR therefore lacks representational standing on this count.
Disposition: District court judgment affirmed as to Takings Clause, reversed as to pre-emption, and case remanded for merits proceedings.

3. Analysis

A. Precedents Cited

The panel anchored its reasoning in a line of Supreme Court and Fourth Circuit authorities:

Hunt v. Washington State Apple Advertising Comm’n, 432 U.S. 333 (1977) – Establishes the three-part associational standing test.
Warth v. Seldin, 422 U.S. 490 (1975) – Clarifies that standing is distinct from merits.
Retail Industry Leaders Ass’n v. Fielder, 475 F.3d 180 (4th Cir. 2007) – Explains that fact-intensive inquiries do not invariably require member participation; depends on relief sought.
Skidmore v. Norfolk Southern Railway, 1 F.4th 206 (4th Cir. 2021); Edwards v. CSX Transportation, 983 F.3d 112 (4th Cir. 2020); and PCS Phosphate Co. v. Norfolk Southern, 559 F.3d 212 (4th Cir. 2009) – Provide ICCTA pre-emption taxonomy (express/categorical vs. implied).
Norfolk Southern Railway v. City of Alexandria, 608 F.3d 150 (4th Cir. 2010) – Articulates discrimination and unreasonable-burden prongs for implied pre-emption.
United States v. Salerno, 481 U.S. 739 (1987) – Sets “no set of circumstances” standard for facial attacks.

B. Legal Reasoning

Separating Standing from Merits
The district court conflated plausibility of a facial claim with standing. The panel reiterated: courts must “accept as valid” the legal claims (assuming plausibility) when assessing standing (citing FEC v. Cruz, 596 U.S. 289 (2022)).
Nature of Relief Guides Participation Requirement
Injunctive and declaratory relief usually does not demand granular, individualized evidence. Money damages or parcel-specific valuation usually does. This principle, largely from Warth and Retail Industry, underpinned the different outcomes for the two doctrines.
ICCTA Discrimination Claim
• Although styled as “implied pre-emption,” the discrimination prong may be litigated facially when the state statute overtly targets railroads.
• Proof will focus on comparing railroads to similarly situated property owners at a categorical level—no member-specific evidence required.
ICCTA Aggregate Unreasonable-Burden Claim
• AAR alleges “death by a thousand cuts.”
• The relevant fact finder will look at rail transportation as a system within Virginia; an industry association is well-placed to marshal system-wide data.
• Again, no single railroad’s “unique injury” is indispensable.
Takings Clause Claim
• A per-se physical taking always triggers the compensation requirement.
• Whether statutory fees ($0, $1,000, or $2,000) equal “just compensation” depends on parcel-specific market value.
• Likewise, assessing whether the State Corporation Commission’s post-taking petition process cures any shortfall depends on property facts and timing.
• Therefore, individual railroad participation is mandatory; AAR flunks prong three of Hunt.

C. Impact of the Judgment

Associational Litigation Strategy: Trade associations in regulated industries (rail, trucking, energy, telecom, etc.) now have a clearer roadmap for when they can mount facial constitutional or statutory challenges without exposing every member to discovery and party status.
State Regulatory Drafting: States seeking to regulate railroad property must account for the pre-emption doctrine’s discrimination limb; targeting railroads alone increases vulnerability to facial attack.
Takings Jurisprudence: The decision reaffirms that compensation calculus is inherently individualized, making blanket takings suits by associations difficult.
Procedural Precedent within the Fourth Circuit: District judges will likely cite AAR v. Hudson when parsing the “participation” element of associational standing.

4. Complex Concepts Simplified

Associational Standing (Hunt Test)
1) Members have personal standing.
2) Suit’s interests align with association’s purpose.
3) Claim & relief do not demand individual participation.
If any prong fails, the association must add members as plaintiffs or abandon the claim.
Facial vs. As-Applied Challenge
• Facial = statute invalid under every conceivable circumstance.
• As-Applied = invalid in the challenger’s specific context or facts.
ICCTA Pre-emption Levels
• Express/Categorical – State “regulation” of rail transportation is flatly forbidden.
• Implied – Even neutral laws are invalid if they discriminate or unreasonably burden railroads.
Per-Se Physical Taking
A mandated physical intrusion (e.g., cable easement) automatically counts as a taking; government must pay the parcel’s fair market value for that use.
“No Set of Circumstances” Standard (Salerno)
A facial claim survives only if all conceivable applications are unconstitutional or pre-empted.

5. Conclusion

The Fourth Circuit’s published decision in AAR v. Hudson carves a careful, practical boundary around associational standing. Where a statute’s alleged infirmity is systemic—such as facial discrimination or cumulative operational burden—an industry association may litigate without enlisting every member railroad. But when the claim’s success hinges on parcel-by-parcel valuations, the members themselves must step forward. Additionally, the opinion warns states that railroad-specific legislation can trigger ICCTA conflict, while reaffirming that post-taking compensation procedures generally satisfy the Constitution.

As broadband expansion and infrastructure deployment collide with legacy rail corridors, this precedent will guide both regulators and industry advocates in structuring, challenging, or defending statutory frameworks. On remand, the Eastern District of Virginia will confront the merits of the ICCTA pre-emption claims—potentially setting another influential precedent on the substantive scope of federal rail deregulation.