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City of Jersey City v. Consolidated Rail Corp.

September 28, 2010

CITY OF JERSEY CITY ET AL., PLAINTIFFS,
v.
CONSOLIDATED RAIL CORPORATION, DEFENDANT, AND 212 MARIN BOULEVARD, LLC ET AL., INTERVENOR-DEFENDANTS.



The opinion of the court was delivered by: Ricardo M. Urbina United States District Judge

Re Document Nos.: 14, 39

MEMORANDUM OPINION

DENYING THE PLAINTIFFS'MOTION FOR SUMMARY JUDGMENT; GRANTING THE DEFENDANTS'CROSS-MOTION FOR SUMMARY JUDGMENT

I. INTRODUCTION

The plaintiffs in this action are the municipality of Jersey City, New Jersey and two nonprofit organizations, the Rails to Trails Conservancy ("the RTC") and the Pennsylvania Railroad Harismus Stem Embankment Preservation Coalition ("the Coalition"). The plaintiffs initiated this action against the Consolidated Rail Corporation ("Conrail"), which has purportedly sold a portion of abandoned rail property located in Jersey City to a consortium of real estate developers ("the LLCs"), who have intervened as defendants in this action. The plaintiffs assert that Conrail was and is required to obtain approval from the Surface Transportation Board ("the STB") before abandoning the subject property and selling it to the LLCs, who plan to develop the property for non-rail uses.

The matter is now before the court on the parties' cross-motions for summary judgment. The plaintiffs contend that the property at issue constitutes a "line of railroad" falling within the STB's abandonment jurisdiction. The defendants maintain that the subject property is a "spur" or "side track" over which the STB does not have jurisdiction. Furthermore, the defendants assert that the plaintiffs lack standing to prosecute this action. Because the plaintiffs have not supplied sufficient evidence of imminent injury to their concrete interests, the court concludes that the plaintiffs have not demonstrated that they have standing. Accordingly, the court denies the plaintiffs' motion for summary judgment and grants the defendants' cross-motion for summary judgment.

II. BACKGROUND

A. The Statutory Framework

Beginning in the late 1960s, "[a] rail transportation crisis seriously threatening the national welfare was precipitated when eight major railroads in the northeast and midwest region of the country entered reorganization proceedings under . . . the Bankruptcy Act." Blanchette v. Conn. Gen. Ins. Corps., 419 U.S. 102, 108 (1974). "Congress concluded that solution of the crisis required reorganization of the railroads, stripped of excess facilities, into a single, viable system operated by a private, for-profit corporation." Id. at 109.

To implement this solution, Congress enacted the Regional Rail Reorganization Act of 1973 ("the Rail Act"), 45 U.S.C. §§ 701 et seq. Id. The Rail Act created a government corporation, the United States Railway Association ("the USRA"), tasked with creating a Final System Plan ("FSP") for restructuring the railroads. 45 U.S.C. § 716(a)(1). The FSP, published by the USRA in July 1975, designated certain "rail lines" and "connecting spur and storage tracks" held by the railroads in reorganization for transfer to a newly-formed private corporation, Conrail. Consol. Rail Corp. v. Surface Transp. Bd., 571 F.3d 13, 15 (D.C. Cir. 2009).

The Rail Act also called for the creation of a Special Court, which would have exclusive jurisdiction over disputes relating to the FSP. 45 U.S.C. § 719. Following Congress's approval of the FSP, the Special Court issued conveyance orders, directing the trustee of each railroad in reorganization to convey all right, title and interest in the designated rail properties to Conrail. Id. § 743(b)(1). The Special Court was given "original and exclusive jurisdiction . . . [over] any action, whether filed by any interested person or initiated by the special court itself, to interpret, alter, amend, modify, or implement any of the orders entered by such court pursuant to section 743(b)."*fn1 Id. § 719(e)(2).

B. The Property At Issue

Among the rail property that the USRA designated for transfer to Conrail was the "Harismus Branch," a property that the FSP described as running from "Milepost 1" in Jersey City to "Milepost 7" in Harrison, New Jersey. Defs.' Cross-Mot. for Summ. J. & Opp'n to Pls.' Mot. for Summ. J. ("Defs.' Cross-Mot.") at 6; Decl. of Victor Hand ("Hand Decl."), Ex. A at 272; see also Pls.' Mot. for Summ. J. ("Pls.' Mot.") at 1. The Harismus Branch encompasses the Sixth Street Embankment ("the Embankment"), a series of elevated structures made of earth-filled stone retaining walls connected by bridges and spanning 1.3 miles near the Jersey City waterfront. Pls.' Mot. at 2 & Ex. E (Aff. of John Curley ("Curley Aff."))*fn2 ¶ 2. Constructed in the early 1900s, the Embankment is listed on the New Jersey Register of Historic Places and lies between two National Historic Districts. Id. ¶ 3.

Conrail acquired the Harismus Branch in March 1976 pursuant to a conveyance order of the Special Court. Pls.' Mot. at 2. Conrail states that by the mid-1980s, it had sold off nearly ninety percent of the Harismus Branch in a half dozen different transactions to several developers, including the Jersey City Redevelopment Agency ("JCRA").*fn3 Conrail's Cross-Mot. at 9 & Decl. of Robert Ryan ("Ryan Decl.")*fn4 ¶¶ 6-7.

By the 1990s, all that remained of the Harismus Branch properties was the Embankment. Ryan Decl. ¶ 7. Conrail states that it first negotiated to sell the Embankment to Jersey City, id. ¶ 7, and that in 1999, it was in active negotiations with the JCRA for the sale of the property, id. ¶ 32. Those negotiations ceased when, over Jersey City's objection, a group of citizens successfully petitioned to have the Embankment listed on the State Register of Historic Places. Id. ¶ 33. This designation precluded Jersey City from implementing its development plans. Id.

In December 2001 and October 2002, Conrail distributed bid solicitation packages to parties they believed to be potentially interested in acquiring the Embankment. Id. The JCRA was one of the recipients of these bid solicitation packages and transmitted Conrail's October 2002 request for bids to Jersey City's Department of Housing, Economic Development and Commerce. Id. ¶ 34. Neither the JCRA nor Jersey City submitted a bid for the property. Id. Indeed, the only bid for the property came from a group of LLCs interested in developing the property for private uses. Id. ¶ 36.

In January 2003, the City Council of Jersey City enacted an ordinance designating the Embankment as an "historic landmark" under municipal law. Id. ¶ 35. Subsequently, in October 2003, Conrail received a letter from then-Mayor Glenn Cunningham, who stated that he "would like to open up a dialogue with Conrail as well as the Embankment Preservation Coalition regarding the maintenance of the integrity of the remaining embankment." Id. ¶ 36 & Ex. G. By that time, however, Conrail had entered into a contract with the LLCs for the sale of the Embankment. Id. ¶ 36.

The municipality advised Conrail of its view that Conrail's sale to the LLCs was void because the Embankment constituted a federally regulated line of rail that could not be abandoned without prior approval from the STB.*fn5 Curley Aff. ¶ 5. For the same reason, although the City Council had authorized Jersey City to condemn the property, the municipality concluded that it could not use state eminent domain law to acquire the property because its state eminent domain laws were preempted by federal jurisdiction over the property. Pls.' Mot., Ex. C-2 (Decl. of Mayor Jeremiah Healy ("Healy Decl.")) ¶ 4; Curley Aff. ¶ 5. Conrail responded that it did not believe its sale to the LLCs required STB approval because the Embankment constituted a "spur" or "side track" falling outside the STB's jurisdiction. Curley Aff. ¶ 6. Conrail finalized the sale of the property to the LLCs in July 2005. Ryan Decl. ¶ 41.

C. Prior Proceedings

In January 2006, a group of petitioners, including Jersey City, the RTC*fn6 and the Coalition,*fn7 commenced an administrative proceeding before the STB seeking a declaration that the Embankment fell within the STB's abandonment authority. Pls.' Mot. at 3. A rail carrier must obtain authorization from the STB to "abandon any part of its railroad lines" or discontinue the operation of all rail transportation over any part of its railroad lines." 49 U.S.C. § 10903(a)(1). No authorization is required, however, for the abandonment of "spur, industrial, team, switching, or side tracks." Id. § 10906.

In an August 2007 ruling, the STB concluded that "the Embankment property sold to [the LLCs] remains part of the national rail system subject to the Board's exclusive jurisdiction until appropriate abandonment authority is obtained." Pls.' Mot., Ex. A. Conrail and the LLCs appealed the STB's determination to this Circuit, which vacated the STB's ruling on jurisdictional grounds. See Consol. Rail Corp., 571 F.3d at 14. The Circuit concluded that the STB's determination necessarily arose from its interpretation of the FSP and conveyance order that transferred the Embankment to Conrail. Id. at 19 (observing that "[t]he issue . . . is the 'nature' of the conveyance, that is as a line of railroad or as spur and yard track"). Because matters related to the interpretation of conveyance orders and the FSP fall within the exclusive jurisdiction of the District Court for the District of Columbia, as successor to the Special Court, the Circuit concluded that the STB was without jurisdiction to consider the petitioners' request for declaratory relief. Id.

Subsequently, in October 2009, Jersey City, the RTC and the Coalition commenced this action seeking a declaration that the Embankment is subject to the STB's abandonment jurisdiction. See generally Compl. The plaintiffs moved for summary judgment in November 2009, and Conrail filed its cross-motion for summary judgment in March 2010.

In May 2010, the court granted the LLCs leave to intervene in this action.*fn8 See Minute Entry (May 10, 2010). The LLCs joined in Conrail's cross-motion for summary judgment. See Notice (May 10, 2010). The STB has not sought to intervene in this action.

In the plaintiffs' motion for summary judgment, the plaintiffs argue that the property at issue constitutes a "line of railroad" for purposes of STB abandonment jurisdiction.*fn9 See Pls.' Mot. at 44. The defendants oppose the plaintiffs' motion for summary judgment and have filed a cross-motion for summary judgment, in which they argue, inter alia, that the plaintiffs lack standing. See Defs.' Cross-Mot. In June 2010, the plaintiffs filed their opposition to the defendants' cross-motion and reply in support of their motion for summary judgment. See generally Pls.' Opp'n to Defs.' Cross-Mot. & Reply ("Pls.' Opp'n"). Conrail and the LLCs filed separate replies in support of their cross motion in July 2010. See generally Conrail's Reply; LLCs' Reply.

With the parties' cross-motions ripe for adjudication, the court turns to the applicable legal standards and the parties' arguments. Because standing is a threshold issue, see Nat'l Org. for Women, Inc. v. Scheidler, 510 U.S. 249, 255 (1994); Raytheon Co. v. Ashborn Agencies, Ltd., 372 F.3d 451, 453 (D.C. Cir. 2004), the court begins by analyzing the defendants' arguments that the plaintiffs have not established their standing to pursue this action.

III. ANALYSIS

A. Legal Standard for ...


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