This case involves an action for damages against a railroad asserting an alleged failure to maintain adequate warning devices at a grade crossing near Columbia Falls, Montana. After appellant Stacey Thomas Lee ("Lee") was injured in a collision with a train, he sued Burlington Northern Santa Fe ("BNSF"), the train's owner and operator. Lee contended that the warning signs posted at the crossing, which had been installed using federal funds, were insufficient to provide a safe crossing as required by Montana law. A jury verdict resulted in judgment for BNSF. Lee appeals on various evidentiary grounds. We have jurisdiction pursuant to 28 U.S.C. 1291. We conclude that Lee's state tort action is preempted by federal law, and affirm.

On the afternoon of March 29, 1996, Lee drove his pickup truck with two friends, Todd Moriarty ("Moriarty") and Joseph Smith ("Smith"). A few inches of fresh snow had fallen, and the roads were icy and slick. Lee drove westbound on Talbot Road, just outside the town of Columbia Falls, Montana. The posted speed limit on Talbot Road was forty-five miles per hour.

Lee approached Talbot Crossing, in the middle of a long straightaway on Talbot Road. Talbot Crossing was marked with reflectorized crossbucks. These signs were installed with federal funds under a Montana State project to install or upgrade crossbucks on railroad crossings, and were placed in accord with the Manual on Uniform Traffic Control Devices ("MUTCD"). The crossing was also marked with advance warning signs about 240 feet before the crossing. The advance warning signs were also placed in accord with the MUTCD.

Talbot Road intersects Veteran's Drive about 400 feet before the crossing. As Lee approached the intersection, he was traveling thirty to thirty-five miles per hour. Lee looked to his right for traffic approaching the stop sign controlling access onto Talbot Road. One of Lee's passengers, Moriarty, glanced up the road to the crossing, saw a train approaching from the left (south), and yelled "Train!"

Lee applied the brakes just past the intersection in an attempt to stop the truck. Moriarty, seated next to the passenger door, decided that Lee was not going to stop in time to avoid hitting the train and jumped out. Smith, seated in the middle, decided not to jump after it appeared that he would not have time before the truck hit the train.

Lee slowed the truck to about five miles per hour before hitting the train. Lee's truck collided with the second or third car of the train, and Lee became trapped under the train's wheels.1 Smith jumped out of the truck and pulled Lee to safety. Lee's left leg was severely injured and ultimately required amputation below the knee. Lee's collision, which was a tragic accident, was the first at Talbot Crossing.

Following the accident, Lee filed a diversity action against BNSF in the United States District Court. Lee alleged that BNSF negligently failed to install active warning lights to make the crossing safe as required by Montana law. BNSF moved for summary judgment, arguing in part that federal law preempted Lee's suit. The district court expressly found that "the crossing was guarded by reflectorized crossbucks the installation of which was funded by federal money. The use of federal funds for the project was authorized and approved by the Federal Highway Administration." But the district court denied summary judgment to BNSF, reasoning:

The facts here comport with the facts presented to thecourt in Shots [v. CSX Transportation, Inc., 38 F.3d 304(7th Cir. 1994)]. Federal funds were expended in theState of Montana as a general state-wide project toestablish crossbucks at 723 crossings. Absent evidencethat there was express approval by the Secretary as tothe type of device installed at the Talbot Roadcrossing, Lee's state claim is not pre-empted.

Following trial, a jury verdict determined that both BNSF and Lee were negligent. The jury apportioned 33.3% of the negligence to BNSF and 66.6% to Lee. Under Montana comparative negligence law, the district court entered judgment for BNSF. The district court denied Lee's timely motion for a new trial, and this appeal followed.

* In Norfolk Southern Railway Co. v. Shanklin, 529 U.S. 344, 146 L. Ed. 2d 374, 120 S. Ct. 1467 (2000), decided following the district court's decision in this case, the Supreme Court granted a writ of certiorari to resolve a conflict among the circuits as to whether the Federal Railroad Safety Act of 1970 ("FRSA"), by virtue of 23 C.F.R. 646.214(b)(3) and (4),2 "pre-empts state tort claims concerning a railroad's failure to maintain adequate warning devices at crossings where federal funds have participated in the installation of the devices." Id. at 351. In Shanklin, the widow of a man killed in a crossing accident sued the operator of the train involved in the collision for its alleged failure to maintain adequate warning devices at a grade crossing in Tennessee. Id. at 347. At the time of the accident, the crossing was equipped with advance warning signs and reflectorized crossbucks. The Tennessee Department of Transportation had installed the signs with federal funds as part of a project to improve various crossings throughout the state. Id. at 350.

Addressing the preemptive effect of 23 C.F.R. 646.214(b)(3) and (4), the Court reasoned:

Sections 646.214(b)(3) and (4) therefore establish astandard of adequacy that "determines the devices to beinstalled" when federal funds participate in thecrossing improvement project. If a crossing presentsthose conditions listed in (b)(3), the State mustinstall automatic gates and flashing lights; if the(b)(3) factors are absent, (b)(4) dictates that thedecision as to what devices to install is subject toFHWA approval. In either case, 646.214(b)(3) or (4)"is applicable" and determines the type of warningdevice that is "adequate" under federal law. As aresult, once FHWA has funded the crossing improvementand the warning devices are actually installed andoperating, the regulation "displace[s] state and privatedecisionmaking authority by establishing a federal-lawrequirement that certain protective devices be installedor federal approval obtained."

Id. at 354, 120 S. Ct. 1467 (quoting CSX Transp., Inc. v. Easterwood, 507 U.S. 658, 670-71, 123 L. Ed. 2d 387, 113 S. Ct. 1732 (1993)) (alterations in original). The Supreme Court also rejected the argument that the regulations apply only where the warning devices have been selected based on "diagnostic studies and particularized analyses" of the conditions at a particular crossing. 529 U.S. at 355 (abrogating Shots v. CSX Transp., Inc., 38 F.3d 304 (7th Cir. 1994)). The Court held that "when the FHWA approves a crossing improvement project and the State installs the warning devices using federal funds, 646.214(b)(3) and (4) establish a federal standard for the adequacy of those devices that displaces state tort law addressing the same subject." 529 U.S. at 357.

This case is controlled by Shanklin. The reflectorized crossbucks at Talbot Crossing were installed in 1988 with the use of federal funds. The federal funds were used pursuant to a Montana State project to install or upgrade crossbucks on railroad crossings. The FHWA authorized and approved the use of federal funds for this project. From this, we hold that Lee's state tort claim is preempted by federal law. Shanklin makes clear that once the FHWA has funded a crossing improvement and warning devices are actually installed and operating, federal regulations displace state and private decisionmaking authority. Shanklin, 529 U.S. at 354.

Lee contends that Shanklin is inapplicable because BNSF did not cross-appeal the district court order denying summary judgment on preemption grounds. We find this argument unpersuasive.

"A prevailing party need not cross-petition to defend a judgment on any ground properly raised below, so long as that party seeks to preserve, and not to change, the judgment." Northwest Airlines, Inc. v. County of Kent, 510 U.S. 355, 364, 127 L. Ed. 2d 183, 114 S. Ct. 855 (1994) (citations omitted); see also El Paso Natural Gas Co. v. Neztsosie, 526 U.S. 473, 479, 143 L. Ed. 2d 635, 119 S. Ct. 1430 (1999) ("Absent a cross-appeal, an appellee may urge in support of a decree any matter appearing in the record, . . . but may not attack the decree with a view either to enlarging his own rights thereunder or of lessening the rights of his adversary.") (internal quotation marks and citations omitted).

While there is no bright-line test for determining what constitutes an "enlargement of rights," we have required a cross-appeal when a party seeks to increase its monetary recovery or decrease its monetary liability. See, e.g., Doherty v. Wireless Broad. Sys. of Sacramento, Inc., 151 F.3d 1129, 1131 (9th Cir. 1998); see also United States v. Bajakajian, 84 F.3d 334, 338 (9th Cir. 1996); c.f. Carter v. CMTA-Molders & Allied Health & Welfare Trust, 736 F.2d 1310, 1313 (9th Cir. 1984). We have also required a cross-appeal if an issue affects a legal right that may have an impact on damage recovery. See Turpen v. City of Corvallis, 26 F.3d 978, 979 (9th Cir. 1994); c.f. Bullard v. Sercon Corp., 846 F.2d 463, 467-68 (7th Cir. 1988).

Because the cross-appeal requirement is a rule of practice and not a jurisdictional bar, "an appellate court has broad power to make such dispositions as justice requires." Bryant v. Technical Research Co., 654 F.2d 1337, 1342 (9th Cir. 1981). In determining whether to allow a cross-appeal that has not been properly noticed, we have considered factors such as: (1) "the interrelatedness of the issues on appeal and cross-appeal"; (2) "whether the nature of the district court opinion should have put the appellee on notice of the need to file a cross-appeal"; and (3) "the extent of any prejudice to the appellant caused by the absence of notice."3 Mendocino Envtl. Ctr. v. Mendocino County, 192 F.3d 1283, 1299 (9th Cir. 1999).

In this case, after a jury determined that Lee was more than fifty percent negligent, the district court entered judgment for BNSF in accordance with Montana comparative negligence law principles.4 Because BNSF does not seek to enlarge or modify its rights, but simply to defend the judgment entered in its favor, we hold that it was not required to cross-appeal the district court's denial of summary judgment on preemption grounds. See El Paso Natural Gas Co., 526 U.S. at 479.

But alternatively, even assuming that BNSF's advancement of the preemption issue in light of Shanklin changes the judgment, we find compelling the fact that the law changed after BNSF's time to cross-appeal lapsed. See USA Petroleum Co. v. Atlantic Richfield Co., 13 F.3d 1276, 1285 (9th Cir. 1994) (explaining the general rule that "a waiver will be excused if a new issue arises while appeal is pending because of a change in the law") (internal quotation marks and citation omitted). Further, because the parties fully briefed and argued the preemption issue to both the district court and this court, no prejudice will result from our consideration of this issue.

BNSF's failure to cross-appeal the district court's denial of its motion for summary judgment does not preclude our consideration of the preemption issue. In light of the Supreme Court's decision in Shanklin, 529 U.S. at 354, Lee's state tort claim is preempted by federal law. We therefore affirm the district court's judgment for BNSF.

AFFIRMED.