City of Jersey City v. Consolidated Rail Corporation

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
____________________________________
)
CITY OF JERSEY CITY, et al., )
)
Plaintiffs, )
)
v. ) Civil Action No. 09-1900 (ABJ)
)
CONSOLIDATED RAIL )
CORPORATION, )
)
Defendant, )
)
and )
)
212 MARIN BOULEVARD, LLC, et al., )
)
Intervenor-Defendants. )
)
and )
)
PAULA T. DOW, )
Acting Attorney General of the )
State of New Jersey, )
)
Intervenor. )
)
____________________________________)
MEMORANDUM OPINION
Pending before the Court are two motions: a motion for leave to file an amended answer
by intervenor-defendants 212 Marin Boulevard, LLC; 247 Manila Avenue, LLC; 280 Erie Street,
LLC; 317 Jersey Avenue, LLC; 354 Cole Street, LLC; 389 Monmouth Street, LLC; 415
Brunswick Street, LLC; and 446 Newark Avenue, LLC, 1 [Dkt. # 86], and a renewed motion for
summary judgment by plaintiffs City of Jersey City, Rails to Trails Conservancy, and
Pennsylvania Railroad Harsimus Stem Embankment Preservation Coalition, [Dkt. # 79]. The
1 Intervenor-Defendants will be referred to collectively as “the LLCs.”
Court will deny the motion to amend because the LLCs’ amended answer would alter the nature
and scope of the litigation and would prejudice the other parties by unnecessarily delaying
resolution of this action. It will grant the renewed motion for summary judgment because the
parties have stipulated to the sole factual issue in this case, no genuine issues of material fact
remain, and plaintiffs are entitled to judgment as a matter of law.
BACKGROUND
This lawsuit concerns a portion of rail property known as the Harsimus Branch, between
CP Waldo and Luis Munoz Marin Boulevard in Jersey City, New Jersey (“Harsimus Branch”).
Compl. [Dkt. # 1] ¶ 1. The Harsimus Branch was conveyed to defendant Consolidated Rail
Corporation (“Conrail”) in 1976 pursuant to the Regional Railroad Reorganization Act of 1973,
45 U.S.C. § 741; 45 U.S.C. § 1301. Id. ¶ 12. The specific question before the Court in this case
is whether the Harsimus Branch conveyed at that time was a railroad “line” or a “spur.” Id. ¶ 6.
This distinction matters because before a railroad can abandon or discontinue operations on a rail
line, it must obtain authorization from the Surface Transportation Board (“STB”), formerly the
Interstate Commerce Commission. See 49 U.S.C. § 10903 (2006). This requirement does not
apply to spurs. Id. § 10906. In 2005, defendant Conrail purported to sell the Harsimus Branch to
intervenor-defendants, but it did not have abandonment authorization from the STB at that time.
Compl. ¶ 19. Since then, the Harsimus Branch has been the subject of protracted litigation.
In January 2006, plaintiffs, along with a New Jersey state assemblyman, petitioned the
STB for an order declaring that Conrail was required to obtain authorization from the STB to
abandon the Harsimus Branch. Consolidated Rail Corp. v. Surface Transp. Bd., 571 F.3d 13, 17
(D.C. Cir. 2009), citing City of Jersey City – Petition for Declaratory Order, STB Fin. Docket
No. 34818, 2007 WL 2270850 at *1 (Aug. 9, 2007) (“STB Order”), recons. denied, Docket No.
2
34818, 2007 WL 4429517 (Dec. 19, 2007) (“STB Recons. Order”). In August 2007, the STB
determined that the Harsimus Branch is “subject to the [STB’s] exclusive jurisdiction until
appropriate abandonment authority is obtained.” See id., citing STB Order, 2007 WL 2270850 at
*7. The STB subsequently denied a petition for reconsideration of that order. Consolidated Rail
Corp., 571 F.3d at 17, citing STB Recons. Order, 2007 WL 4429517 at *6.
The STB Order was appealed to the United States Court of Appeals for the District of
Columbia Circuit, which ruled only on the procedural ground that the STB did not have authority
to determine whether a railroad track is a line or a spur for purposes of abandonment
authorization. See Consolidated Rail Corp., 571 F.3d at 20. The Court of Appeals ruled that this
court has exclusive jurisdiction to determine that issue, while the STB has exclusive jurisdiction
to determine whether to authorize abandonment of a line. Id.After the Court of Appeals issued that decision, the parties filed this lawsuit on October
7, 2009, seeking a ruling on whether the Harsimus Branch was conveyed as a line subject to STB
jurisdiction. Compl. ¶ 49. The specific question before the Court is whether the Harsimus
Branch was conveyed to Conrail as a line or a spur. Id. ¶ 6. On September 28, 2010, the court
ruled, without reaching the merits, that plaintiffs lacked standing. City of Jersey City v.
Consolidated Rail Corp., 741 F. Supp. 2d 131, 149 (D.D.C. 2010), rev’d, 668 F.3d 741 (D.C.
Cir. 2012). Plaintiffs appealed and the Court of Appeals reversed, City of Jersey City v.
Consolidated Rail Corp., 668 F.3d 741 (D.C. Cir. 2012), remanding the case back to the court on
March 23, 2012, for further proceedings, [Dkt. # 61]. 2 The parties filed status reports with the
2 On May 3, 2012, the case was reassigned to Judge Kollar-Kotelly. See Reassignment of
Civil Case [Dkt. # 62]. It was transferred to this Court on September 20, 2013. See
Reassignment of Civil Case [Dkt. # 96].
3
court, and on June 25, 2012, the court issued an order to govern proceedings. Sched. and Procs.
Order [Dkt. # 77].
On July 10, 2012, the parties filed a joint stipulation in which plaintiffs and intervenor-
defendants stipulated that the Harsimus Branch was conveyed to Conrail as a line subject to the
STB’s abandonment jurisdiction. Joint Stipulation [Dkt. # 78] at 1. They further stipulated that
defendant Conrail and intervenor Attorney General of New Jersey would not raise any facts or
arguments in opposition to that stipulation. Id. In light of this, on August 15, 2012, plaintiffs
filed a renewed motion for summary judgment. Renewed Mot. for Summ. J. [Dkt. # 79]. The
LLCs oppose the renewed motion, Mem. of Law on Behalf of the LLCs in Opp. to Pls.’ Mot. for
Summ. J. [Dkt. # 81], and filed a motion seeking leave to file an amended answer to add
counterclaims and cross-claims, Mot. for Leave to File an Am. Answer [Dkt. # 86].
STANDARD OF REVIEW
I. Motion to Amend
According to Federal Rule of Civil Procedure 15(a)(2), the Court should “freely give
leave [to amend] when justice so requires.” The decision to grant leave to file an amended
pleading is at the discretion of the Court. Firestone v. Firestone, 76 F.3d 1205, 1208 (D.C. Cir.
1996). Such leave is appropriate “in the absence of undue delay, bad faith, undue prejudice to
the opposing party, repeated failure to cure deficiencies, or futility.” Richardson v. United
States, 193 F.3d 545, 548–49 (D.C. Cir. 1999), citing Foman v. Davis, 371 U.S. 178, 182 (1962).
II. Summary Judgment
Summary judgment is appropriate “if the movant shows that there is no genuine dispute
as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a). The party seeking summary judgment bears the “initial responsibility of informing the
4
district court of the basis for its motion, and identifying those portions of the pleadings,
depositions, answers to interrogatories, and admissions on file, together with the affidavits, if
any, which it believes demonstrate the absence of a genuine issue of material fact.” Celotex
Corp. v. Catrett, 477 U.S. 317, 323 (1986) (internal quotation marks omitted). To defeat
summary judgment, the non-moving party must “designate specific facts showing that there is a
genuine issue for trial.” Id. at 324 (internal quotation marks omitted). The existence of a factual
dispute is insufficient to preclude summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 247–48 (1986). A dispute is “genuine” only if a reasonable fact-finder could find for the
non-moving party; a fact is only “material” if it is capable of affecting the outcome of the
litigation. Id. at 248; Laningham v. U.S. Navy, 813 F.2d 1236, 1241 (D.C. Cir. 1987). In
assessing a party’s motion, the court must “view the facts and draw reasonable inferences ‘in the
light most favorable to the party opposing the summary judgment motion.’” Scott v. Harris, 550
U.S. 372, 378 (2007) (alterations omitted), quoting United States v. Diebold, Inc., 369 U.S. 654,
655 (1962) (per curiam).
ANALYSIS
I. The LLCs’ Motion for Leave to File an Amended Answer
The court granted the LLCs’ motion to intervene as defendants in this action on May 10,
2010. Minute Order (May 10, 2010). Federal Rule of Civil Procedure 13 does not distinguish
between intervenors and other parties with respect to their ability to assert counterclaims or
cross-claims. See, e.g., Fed. R. Civ. P. 13(g) (“A pleading may state as a crossclaim any claim
by one party against a coparty . . . .”); see also Consolo v. Fed. Mar. Comm’n, 383 U.S. 607, 617
n.14 (1966) (“[A]n intervenor of right may assert a cross-claim without independent
jurisdictional grounds[.]”). But it is also well-established that “one of the most usual procedural
5
rules is that an intervenor is admitted to the proceeding as it stands, and in respect of the pending
issues, but is not permitted to enlarge those issues or compel an alteration of the nature of the
proceeding.” Vinson v. Wash. Gas Light Co., 321 U.S. 489, 498 (1944); see also EEOC v.
Woodmen of the World Life Ins. Soc’y, 330 F. Supp. 2d 1049, 1055 (D. Neb. 2004) (holding that
an intervenor could not assert a cross-claim that would “improperly expand the scope of the
proceedings before this court”); Seminole Nation v. Norton, 206 F.R.D. 1, 7 (D.D.C. 2001)
(denying a potential intervenor’s request to intervene and present claims that fell outside of the
scope of the litigation); Marvel Entm’t Grp., Inc. v. Hawaiian Triathlon Corp., 132 F.R.D. 143,
146 (S.D.N.Y. 1990) (stating that an intervenor may not assert additional claims that “needlessly
expand the scope and costs of th[e] litigation and . . . thus prejudice the rights of” the other
parties to expeditiously resolve the action). 3 But even if one reads Federal Rule of Civil
Procedure 24 broadly to accord an intervenor the full rights of any participant in a lawsuit, a
motion to amend any party’s pleading to add new claims is committed to the Court’s discretion
and governed by the factors that would ordinarily pertain under Federal Rule of Civil Procedure
15. Here, the LLCs move – after entry of a joint stipulation that resolves the single issue raised
in this case – to expand the issues in the case and alter the nature of this proceeding.
This action sought a declaratory judgment on the narrow question of how the Harsimus
Branch was conveyed to Conrail. The LLCs assert that there is a broader dispute concerning
property beyond the portion of rail track addressed in the complaint, and they want to amend
3 In a case involving a direct petition from agency action under 28 U.S.C. § 2344, the D.C.
Circuit stated, “Intervenors may only argue issues that have been raised by the principal parties;
they simply lack standing to expand the scope of the case to matters not addressed by the
petitioners in their request for review.” Nat’l Ass’n of Regulatory Util. Comm’rs v. Interstate
Commerce Comm’n, 41 F.3d 721, 729 (D.C. Cir. 1994). Although not directly applicable to this
situation, that statement tends to support the proposition that an intervenor cannot expand the
scope of the action.
6
their answer to add counterclaims and cross-claims “for a full and fair consideration of the issues
in this case.” Mem. of Law in Supp. of Defs.-Intervenors LLCs’ Mot. for Leave to File an Am.
Answer (“LLCs’ Mem.”) [Dkt. # 86-1] at 1. Their new claims include, among others, a claim for
declaratory judgment about the broader disputed property, including another rail line, the Hudson
Street Industrial Track. Id. at 3; Am. Answer [Dkt. # 87] ¶ 96. They also seek to add state law
claims against Conrail for fraud and negligent misrepresentation related to Conrail’s conveyance
of the Harsimus Branch to the LLCs. Am. Answer ¶¶ 115–48.
The LLCs argue that no discovery has taken place in this case and contend their motion is
timely given the procedural history of this case. But the case they cite for their argument that
their motion is timely is distinguishable from this case. In Harrison v. Rubin, 174 F.3d 249(D.C. Cir. 1999), the Court of Appeals ruled that there is no undue delay “[w]here an amendment
would do no more than clarify legal theories or make technical corrections.” Id. at 253. But here
the LLCs do not seek to simply change a statutory citation to clarify legal theories or make
technical corrections, as in Harrison. They seek to expand the scope of the case beyond the
track at issue and to add state law claims that require the Court to delve into their commercial
negotiations with Conrail. This would introduce entirely new legal and substantial factual issues
to the case. See Williamsburg Wax Museum, Inc. v. Historic Figures, Inc., 810 F.2d 243, 247
(D.C. Cir. 1987) (holding that the district court properly denied motion to amend complaint
where amendment would have introduced an entirely new issue into the case). The LLCs
acknowledge as much. LLCs’ Mem. at 20 (“The counterclaim, likewise, primarily deals with
new legal theories. The counterclaims raise many new facts . . . .”); id. at 21 (acknowledging
that “the fraud count introduces new factual issues”).
7
And the argument that no discovery has taken place does not aid the LLCs’ position. No
discovery is needed to resolve the issue before the Court, but the LLCs’ proposed amendment
would require extensive discovery, particularly as to the fraud and negligence claims – which the
Court notes do not even involve all the parties in this case.
The LLCs’ new claims go significantly beyond the narrow legal question involved in this
litigation, as they address property beyond the Harsimus Branch and numerous factual issues and
state law claims arising out of their commercial dispute with Conrail. 4 Allowing this amendment
would prejudice the other parties by expanding this litigation far beyond the original question
presented and causing substantial delay in the resolution of this case. By contrast, a denial of the
motion to amend does not prejudice the LLCs because they are free to raise their claims in
separate litigation. Accordingly, the Court will deny the LLCs’ motion for leave to file an
amended answer.
II. Renewed Motion for Summary Judgment
In light of the Court’s decision to deny the LLCs’ motion to amend and the parties’
stipulation of July 10, 2012, this case presents no genuine issues of material fact and so may be
properly decided on summary judgment as a matter of law. See Fed. R. Civ. P. 56(a); Celotex
Corp., 477 U.S. at 323. Again, the complaint presents one question: whether the Harsimus
Branch was conveyed to Conrail in 1976 as a line subject to the STB abandonment jurisdiction.
4 In its opposition to the LLCs’ motion for leave to amend, Conrail raises significant
questions about whether this Court, sitting as the Special Court under the Regional Railroad
Reorganization Act of 1973, has the power to exercise supplemental jurisdiction over the new
state law claims. Conrail’s Opp. to Def.-Intervenors’ Mot. for Leave to File an Amended
Answer [Dkt. # 89], at 19–22, citing Consolidated Rail Corp., 571 F.3d at 18 n.11. But even if it
does, the Court would still have to determine that the issues derived from a “common nucleus of
operative fact,” see United Mine Workers v. Gibbs, 383 U.S. 715, 725 (1966), and even then, the
exercise of jurisdiction would be discretionary. See id. at 726; 28 U.S.C. § 1367.
8
As the D.C. Circuit held in Consolidated Rail Corp., the district court has “exclusive
jurisdiction to decide the antecedent question if it arises” of whether a track at issue “was
conveyed . . . as ‘part of [the rail carrier’s] railroad lines’” subject to the STB’s abandonment
jurisdiction. 571 F.3d at 20 (alteration in original), citing 49 U.S.C. § 10903(a)(1)(A). If so,
then the STB “retains its authority under sections 10903 and 10906 to approve or deny an
abandonment application.” Id. Given that the parties have now stipulated that the Harsimus
Branch was conveyed to Conrail as a line and not a spur, the Court rules that the Harsimus
Branch “was conveyed . . . as ‘part of [the rail carrier’s] railroad lines’” subject to the STB’s
abandonment jurisdiction.
CONCLUSION
For the reasons stated above, the Court will deny the LLCs’ motion for leave to file an
amended answer and will grant plaintiffs’ renewed motion for summary judgment. A separate
order will issue.
AMY BERMAN JACKSON
United States District Judge
DATE: September 30, 2013
9