Trailer Train Company, a Corporation and Railbox Company, a Corporation v. State Board of Equalization

The issue in this case is whether the district court erred in granting a preliminary injunction preventing the California State Board of Equalization (Board) from collecting an amended property-tax bill levied on appellees’ railroad cars. The district court found that the imposition of the additional tax impermissibly conflicted with § 306 of the Railroad Revitalization and Regulatory Reform Act of 1976 (the 4-R Act), current version at 49 U.S.C. § 11503 , which prohibits the taxation of rail-transportation property at a rate higher than the rate generally applicable to commercial and industrial property in the same assessment jurisdiction. We concur in the district court’s underlying conclusions that § 11503 applies to the Board’s attempt to collect the additional tax, that § 11503 authorizes a district court to enjoin tax-rate discrimination, and that, under the circumstances of this case, the traditional prerequisites for preliminary injunction need not be satisfied. We find, however, that the district court’s method of selecting the tax rate generally applicable to commercial and industrial property, which is the necessary first step in determining the existence of tax-rate…