City of Jersey City v. Consolidated Rail Corporation

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 18, 2011 Decided February 3, 2012
No. 10-7135
CITY OF JERSEY CITY, ET AL.,
APPELLANTS
v.
CONSOLIDATED RAIL CORPORATION, ET AL.,
APPELLEES
PAULA T. DOW, ATTORNEY GENERAL OF THE STATE OF
NEW JERSEY,
INTERVENOR
Appeal from the United States District Court
for the District of Columbia
(No. 1:09-cv-01900)
Charles H. Montange argued the cause for appellants.
With him on the briefs was Andrea C. Ferster.
Elizabeth S. Merritt was on the brief of amici curiae
National Trust for Historic Preservation, et al. in support of
appellants.
Robert M. Jenkins, III, argued the cause for appellees.
With him on the briefs were Adam C. Sloane and Fritz R.
Kahn.
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Paula T. Dow, Attorney General, Office of the Attorney
General for the State of New Jersey, and Kenneth M. Worton,
Deputy Attorney General, were on the briefs for intervenor
Paula T. Dow, Attorney General of New Jersey.
Before: TATEL and GRIFFITH, Circuit Judges, and
WILLIAMS, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge TATEL.
TATEL, Circuit Judge: Consolidated Rail Corporation
(Conrail) sold its Harsimus Embankment in Jersey City to
developers. The City, together with others interested in the
historic and environmental value of the Embankment, sued
Conrail, alleging that the sale was unlawful because Conrail
failed to obtain authority from the Surface Transportation
Board to abandon the property. The district court, which has
jurisdiction over this case because of the unique nature of the
Harsimus Branch—it was transferred to Conrail as part of the
Penn Central bankruptcy—dismissed the case for lack of
standing. For the reasons set forth in this opinion, we reverse.
I.
The Harsimus Embankment is a six-block, half-mile long
stone structure in the heart of Jersey City’s historic
downtown. Made of maroonish-brown ashlar, the edifice
carries seven rail lines as high as twenty-seven feet above
street level. Constructed from 1901 to 1905, these lines served
the Pennsylvania Railroad for decades, but as the twentieth
century wore on, traffic dwindled, and dwindled, and perhaps
inevitably, on a probably-unremarkable day in the early
1990s, the last train ever to use the line came and went. Built
to be an artery in shipping and commerce, the Embankment—
once a symbol of modernity—is now covered in foliage and
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stands, somewhat ironically, as a quaint memorial to a bygone
era, a verdant holdout against modern urban sprawl.
A place like that is bound to draw attention. The
Embankment presents an opportunity for developers who see
new and more profitable uses for the land—in this case, the
developers (LLCs) to whom Conrail sold the property. At the
same time, the Embankment attracts those who see its rustic
qualities and historic value as irreplaceable—here the City of
Jersey City, the Rails to Trails Conservancy, and the
Pennsylvania Railroad Harsimus Stem Embankment
Preservation Coalition.
To explain why a dispute over six blocks of property in
New Jersey has ended up in the United States Court of
Appeals for the District of Columbia Circuit—indeed, for the
second time—we begin with some regulatory background.
The Interstate Commerce Commission Termination Act
requires that rail carriers obtain Surface Transportation Board
(STB) approval before “abandon[ing] any part of its railroad
lines.” 49 U.S.C. § 10903(a). By contrast, carriers need no
such approval for “spur, industrial, team, switching, or side
tracks.” 49 U.SC. § 10906; see also 49 U.S.C. § 11323(a)(2)
(listing transactions which “may be carried out only with the
approval and authorization of the Board”). Ordinarily, STB
decides whether tracks qualify as “railroad line” and thus
require abandonment authorization. See 49 U.S.C. § 10903(a).
This, however, is not an ordinary case. In 1968, the
Pennsylvania Railroad, of which the Harsimus Branch was a
small part, merged with a rival to form the Penn Central
Transportation Company. By the early 1970s, the Penn
Central, along with eight other major railroads, filed for
bankruptcy, precipitating a “rail transportation crisis.” See
Blanchette v. Conn. Gen. Ins. Corps., 419 U.S. 102, 108
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(1974). In response, Congress enacted the Regional Rail
Reorganization Act of 1973, which established two new
entities: one to reorganize the railroad system, the United
States Railway Association (USRA); and the other to own and
operate the reorganized system, Conrail, a railroad
headquartered in Philadelphia. See Consol. Rail Corp. v.
Surface Transp. Bd., 571 F.3d 13, 14–15 (D.C. Cir. 2009)
(“Conrail I”). In 1975, USRA published a Final System Plan
that, among other things, formally transferred the bankrupt
carriers’ rail properties to Conrail. The Harsimus Branch was
one such property. The Rail Act also created a “special court”
with exclusive jurisdiction over disputes relating to the Final
System Plan, 45 U.S.C. § 719, including responsibility for
determining whether tracks conveyed to Conrail by the Plan
qualify as “railroad line,” which Conrail could not abandon
without STB authorization. See generally id. Congress later
abolished that court and transferred its “jurisdiction and other
functions” to the United States District Court for the District
of Columbia. Id. § 719(b)(2).
With this background in mind, we return to the facts of
the case. In the late 1990s, Conrail began discussions with the
Jersey City Redevelopment Authority about redeveloping the
Harsimus Embankment for residential housing. These
redevelopment plans were blocked, however, when a group of
citizens successfully petitioned the State of New Jersey to
have most of the Embankment designated as a “historic
place” in the New Jersey State Register of Historic Places. In
early 2003, after Conrail formally put the property out for bid,
the City passed an ordinance designating the Embankment as
a “historic landmark,” meaning that the property could be
developed only with the consent of the Jersey City Historic
Preservation Commission.
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Conrail began negotiating with SLH Holdings Company
to sell the Embankment to the LLCs, which SLH had formed
for that purpose. Soon thereafter, the City sent Conrail a letter
proposing to “open up a dialogue” to have a public entity
acquire the property. City of Jersey City v. Consol. Rail Corp.,
741 F. Supp. 2d 131, 135 (D.D.C. 2010). In 2004, Jersey City
passed an ordinance authorizing the City to purchase or
condemn the Embankment. Subsequently, however, the City’s
lawyers advised it that it could neither purchase nor condemn
the Harsimus Embankment because it was “railroad line” that
Conrail could lawfully abandon only with STB authorization.
Having received no offer from the City, Conrail, believing
that the Harsimus Branch qualified as “spur, industrial, team,
switching, or side tracks” that it could abandon without STB
approval, sold the Harsimus Embankment to the LLCs.
When the LLCs began dismantling the tracks and other
rail structures, the City petitioned STB for a declaratory order
that Conrail’s sale was void because the Embankment was
“railroad line” requiring STB abandonment authorization.
Although STB agreed with the City, we vacated that decision
in Conrail I, holding that because the dispute related to
property transferred pursuant to the Final System Plan, it fell
within the “original and exclusive jurisdiction” of the special
court, now the U.S. District Court for the District of
Columbia. Conrail I, 571 F.3d at 19–20.
Accordingly, the City, joined by Rails to Trails
Conservancy and the Pennsylvania Railroad Harsimus Stem
Embankment Preservation Coalition, filed a complaint in the
district court, arguing again that Conrail’s sale of the
Harsimus Embankment was void because it had failed to
obtain STB abandonment authority. The LLCs intervened as
defendants. The district court dismissed the complaint for lack
of standing because, among other things, “plaintiffs have not
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established that judicial intervention here would tangibly
benefit Jersey City in its efforts to acquire the property
through condemnation.” City of Jersey City, 741 F. Supp. 2d
at 141.
The City and environmental plaintiffs now appeal. Our
review is de novo. See, e.g., Equal Rights Ctr. v. Post Props.,
Inc., 633 F.3d 1136, 1138 (D.C. Cir. 2011).
II.
For plaintiffs to establish Article III standing, at least one
must demonstrate that it has suffered an injury that is
“concrete and particularized” as well as “actual or imminent.”
Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992);
Mountain States Legal Found. v. Glickman, 92 F.3d 1228,
1232 (D.C. Cir. 1996) (“[I]f constitutional and prudential
standing can be shown for at least one plaintiff, we need not
consider the standing of the other plaintiffs to raise that
claim.”). That “injury must be fairly traceable to the
challenged action of the defendant, and likely to be redressed
by a favorable decision.” Ord v. District of Columbia, 587
F.3d 1136, 1140 (D.C. Cir. 2009) (internal quotation marks
omitted). At this stage of the litigation, we “must accept as
true all material allegations of the complaint, drawing all
reasonable inferences from those allegations in plaintiffs’
favor.” LaRoque v. Holder, 650 F.3d 777, 785 (D.C. Cir.
2011) (internal quotation marks omitted). And critical to the
issue before us, we must assume that plaintiffs will prevail on
the merits of their claims—here that the Harsimus
Embankment is “railroad line” requiring STB abandonment
authorization. See Muir v. Navy Fed. Credit Union, 529 F.3d
1100, 1105 (D.C. Cir. 2008).
In support of its claim for standing, the City argues that
because of its interest in the historic and environmental value
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of the property, it wishes to acquire the Harsimus
Embankment, or at least to minimize any harm to the
property. According to the City, STB proceedings offer an
array of benefits that protect these interests—i.e., redress its
injury. First, STB can place conditions on its abandonment
authorization. For example, STB administers a statute under
which parties can seek “public use conditions,” which afford
local governments an opportunity to acquire railroad lines
before they are sold to developers. See 49 U.S.C. § 10905. In
addition, the National Environmental Policy Act and National
Historic Preservation Act reviews that are part of STB’s
process are designed to preserve and protect historic
properties like the Embankment. These reviews can inform
the conditions that STB imposes, which can in turn protect the
City’s interests in the historic and environmental value of the
property. See 16 U.S.C. § 470f (requiring agency to “take into
account” adverse impacts on properties listed or eligible for
listing on the National Register of Historic Places prior to the
issuance of an abandonment license); Ill. Commerce Comm’n
v. ICC, 848 F.2d 1246, 1259 (D.C. Cir. 1988) (the National
Environmental Protection Act, 42 U.S.C. § 4321, et seq.,
requires the STB to take a “hard look” at environmental
consequences of its action); see also Consol. Rail Corp. v.
ICC, 29 F.3d 706, 713 (D.C. Cir. 1994) (“There is no
restriction placed on the conditions the [agency] can impose
other than that they must be required by the public
convenience and necessity.”). Second, New Jersey has a
“right of first refusal statute,” which, once STB authorizes
abandonment, would give the City an exclusive ninety-day
window to decide whether it wants to acquire the abandoned
property. See N.J. Stat. Ann. § 48:12-125.1(b). Finally, STB
abandonment authority would permit Jersey City to use its
general condemnation power to acquire the property. Without
STB authorization, however, the City would, if the track is
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indeed “railroad line,” be preempted and could not lawfully
acquire the property. See 49 U.S.C. § 10501(b).
The City contends that it is injured because Conrail’s
refusal to seek STB abandonment authority has deprived it of
these protections. Given this, and given that for purposes of
standing we must assume that Conrail needs STB
authorization before abandoning the property, we have little
trouble concluding that the City enjoys Article III standing.
Conrail’s refusal to invoke STB proceedings injures the City
by depriving it of the benefits of those proceedings—namely,
the opportunity to acquire or protect the property—and the
City’s injury can be redressed by a district court ruling that
the Embankment qualifies as “railroad line” that Conrail may
not abandon without STB approval.
Insisting that the City nonetheless lacks standing, Conrail
argues that the City failed to express a sufficiently “firm
intention” to purchase the Embankment. See Summers v.
Earth Island Inst., 555 U.S. 488, 496 (2009) (plaintiffs’
affidavit did not assert “any firm intention to visit” locations
where government might damage forests). It argues that
nowhere in the City’s declarations is there any commitment to
acquire the property; instead, the City has demonstrated only
a vague desire that it “wants” to acquire the property at some
point in the future. This, Conrail argues, is insufficiently
concrete to support Article III standing.
This argument gives short shrift to the record before us.
Not only does the record contain affidavits from the City’s
Mayor and City Planning Director declaring the City’s strong
interest in acquiring and preserving the Embankment, but the
City passed an ordinance providing that “[t]he Corporation
Counsel of the City of Jersey City . . . and the Business
Administrator are authorized and directed to undertake any
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actions and execute any documents necessary or appropriate
to acquire the property either by purchase or condemnation in
accordance with [New Jersey law].” Ordinance of Jersey City,
N.J. 04-096. The City even hired an eminent domain attorney
to pursue available state remedies. Taken together, this
evidence is more than sufficient to establish the “substantial
probability of imminent injury required for Article III
standing.” LaRoque, 650 F.3d at 788 (internal quotation
marks omitted) (finding that a candidate’s “allegation [in
April 2010] that he intended to run in the November 2011
election and his public announcement at the press conference”
were sufficient to establish imminence).
Next, Conrail argues that even if the City had a firm
intention of acquiring the property, its injury is “self-
inflicted,” Appellees’ Br. 22, because it twice declined to bid
on the property. But the fact that the City could have
purchased the property in no way absolves Conrail of its legal
duty—which, again, we must assume for purposes of
standing—to seek STB authority to abandon the Harsimus
Branch before selling it to the LLCs.
The City’s injury is also self-inflicted, Conrail argues,
because “the only impediment to the City’s ability to initiate
condemnation proceedings is its own litigation posture.” Id. at
23. But the City’s “litigation posture” represents its good faith
position, based on the advice of counsel, that Conrail must
obtain STB abandonment authority before the City may
lawfully acquire or condemn the Harsimus Embankment. Of
course, Conrail has a different “litigation posture”: it argues,
also in good faith and on the advice of counsel, that no such
abandonment authority is necessary. This debate, however, is
about the merits of the issue the City seeks to litigate and has
nothing at all to do with whether the City has Article III
standing. That question turns solely on whether, assuming the
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validity of the City’s position, Conrail’s refusal to seek STB
abandonment authority injures the City and whether that
injury is traceable to Conrail’s refusal and redressable by the
court. As explained above, all three requirements are satisfied.
Putting a slight twist on its argument, Conrail claims that
the City should seize the property anyway and that even if
such an action is unlawful, the City would suffer no concrete
injury because it has not “identified anyone who could
reasonably be expected to attack the City’s title on the basis
of the jurisdictional status of the property.” Id. at 26
(emphasis omitted). To be sure, when plaintiffs sue to void
criminal statutes, we require a credible threat of prosecution
to satisfy the imminence element of Article III standing. See
Navegar, Inc. v. United States, 103 F.3d 994 (D.C. Cir. 1997);
Seegars v. Ashcroft, 396 F.3d 1248 (D.C. Cir. 2005). But here
the City does not seek to challenge a criminal statute that may
never be applied to it. Instead, suing under a federal statute
that offers it an array of rights and benefits, it seeks to void an
allegedly unlawful sale of railroad line that threatens its
interests in the historic and environmental value of that
property. In that context, the City’s refusal to invade federal
jurisdiction and engage in unlawful self-help can hardly
deprive it of standing. Cf. Shays v. FEC, 414 F.3d 76, 89
(D.C. Cir. 2005) (“But because being put to the choice of
either violating BCRA or suffering disadvantage in their
campaigns is itself a predicament the statute spares them,
having to make that choice constitutes Article III injury.”).
III.
For the foregoing reasons, we reverse and remand for
further proceedings consistent with this opinion.
So ordered.