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.