United States District Court, District of Columbia
N. McFADDEN, U.S.D.J.
a case about a relationship between two railroad authorities
that has veered off track over a property dispute. The
Southeastern Pennsylvania Transportation Authority
(“SEPTA”) believes it possesses an easement
granting it the right to provide commuter passenger services
using property owned by the National Railroad Passenger
Corporation (“Amtrak”). Amtrak disagrees. It
seeks a declaratory judgment that SEPTA does not own the
easement. In response, SEPTA has moved for a dismissal of
Amtrak's Complaint for lack of subject matter
jurisdiction. Because the Court finds that it has
jurisdiction to consider the merits of the parties'
arguments, it denies SEPTA's Motion.
early 1970s, several major railroads in the Northeast filed
for bankruptcy. To ensure continued service in the region,
Congress passed the Regional Rail Reorganization Act of 1973,
45 U.S.C. § 701 et seq. (“3R Act”).
The 3R Act created the Consolidated Rail Corporation
(“Conrail”). Id. § 741. Through a
“Final System Plan, ” the Act directed Conrail to
acquire and operate the bankrupt railroads' rail lines.
See id. § 716; P.L. No. 94-210. The Plan also
required Conrail to convey some of these properties to other
rail authorities, including Amtrak. Id. For property
transferred to Amtrak, the Plan reserved to Conrail
“appropriate trackage rights for the operation of
commuter services.” ECF No. 8-5 at 3.
the Plan, Conrail conveyed to Amtrak the “Northeast
Corridor Properties, ” which include rail lines running
from Washington to Boston, and from Philadelphia to
Harrisburg. See ECF No. 8-6 at 7-9. To ensure that
Conrail retained trackage rights on these properties, Amtrak
granted it a “Commuter Service Passenger
Easement.” See ECF No. 8-7.
parties' easement agreement gave Amtrak a right of first
refusal. It stated that if Conrail “elect[s] to abandon
or assign the Commuter Passenger Service Easement, in whole
or in part, other than to a subsidiary, affiliate or
successor entity, [Amtrak] shall have a first option to
acquire such easement, or portion thereof, at the purchase
price of one dollar ($1.00).” Id. at 7.
this easement, Conrail began providing commuter passenger
services on behalf of regional transport authorities like
SEPTA. See ECF No. 8-1 at 9. But in 1981, Congress
found that the 3R Act and Conrail had “failed to create
a self-sustaining railroad system in the Northeast” and
had “cost United States taxpayers many billions of
dollars over original estimates.” 45 U.S.C. §
1101(1). To remedy this failure, Congress passed the
Northeast Rail Service Act (“NERSA”), which,
among other things, relieved Conrail of its commuter service
obligations. See 45 U.S.C. § 744(a). NERSA gave
regional transport authorities two choices: they could either
“operate [their] own commuter service” or
“contract with Amtrak Commuter for the operation of
such service.” See 45 U.S.C. § 586.
chose door number one. See Compl. 6; ECF No. 8-1 at
10. Section 506 of NERSA states that a commuter authority
choosing to operate its own service “may initiate
negotiations with Conrail for the transfer of commuter
service operated by Conrail.” 45 U.S.C. §
586(b)(1). Section 506 requires that “[a]ny transfer
agreement between [SEPTA] and Conrail shall specify . . . the
rail properties to be conveyed.” Id. §
586(b)(2). It defines “rail properties” as
“assets or rights owned, leased, or otherwise
controlled by Conrail, other than real property, which are
used or useful in rail transportation service.”
Id. § 586(h).
required by Section 506, Conrail and SEPTA began negotiations
for a transfer of certain properties, including the Commuter
Service Passenger Easement. See Compl. 7. What
happened next is the crux of the parties' dispute. SEPTA
argues that Conrail successfully transferred the easement to
it through a “Transfer Agreement” signed by both
parties in 1982. See ECF No. 8-1 at 11-12; ECF No.
8-8. Amtrak disagrees. It contends that, by the
easement's clear terms, “Conrail had no authority
to convey the Commuter Easement” without offering
Amtrak a first option to purchase the easement. Compl. 7.
Amtrak suggests that it exercised this option, bought the
easement, and won an arbitration that confirmed the legality
of its acquisition. Id. at 7-8. And because Amtrak
“possessed the fee that was burdened by the Easement,
” it argues, the purchase terminated the easement.
Id. at 8.
contends that the Court lacks jurisdiction to resolve this
dispute for two reasons. ECF No. 8-1 at 17. First, it
suggests that the 3R Act proscribes judicial review of any
rights reserved by the Final System Plan to Conrail.
Id. at 18. Second, it argues that NERSA bars
judicial review of any transfers made by Conrail under
Section 506. Id.
Court must dismiss Amtrak's claims if it lacks subject
matter jurisdiction to consider them. Fed.R.Civ.P. 12(b)(1).
When a defendant moves to dismiss under Rule 12(b)(1), the
plaintiff bears the burden of establishing the Court's
jurisdiction. See Moms Against Mercury v. FDA, 483
F.3d 824, 828 (D.C. Cir. 2007). In conducting its review, the
Court accepts as true all factual allegations in the
complaint. Wright v. Foreign Serv. Grievance Bd.,
503 F.Supp.2d 163, 170 (D.D.C. 2007). It also gives the
plaintiff “the benefit of all favorable inferences that
can be drawn from the alleged facts.” Id.
Beyond the complaint, it may consider “undisputed facts
plus the [C]ourt's resolution of disputed facts.”
Herbert v. Nat'l Acad. of Sciences, 974 F.2d
192, 197 (D.C. Cir. 1992).
early junction, Amtrak has met its burden of establishing the
Court's jurisdiction. Consider first the 3R Act. True,
the Act limits judicial review of the Final System Plan to
“matters concerning the value of the rail properties to
be conveyed under the plan and the value of the consideration
to be received for such properties.” 45 U.S.C. §
719. And it is also true that Amtrak is not ...