Amicus Curiae Brief — Indian River County, Florida, et al., Petitioners v. Department of Transportation, et al.

No. 19-1304

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In The

Supreme Court of the United States

-----------------------------------------------------------------INDIAN RIVER COUNTY, FLORIDA;

INDIAN RIVER COUNTY

EMERGENCY SERVICES DISTRICT,

Petitioners,

v.

UNITED STATES DEPARTMENT OF TRANSPORTATION;

ELAINE L. CHAO, IN HER OFFICIAL CAPACITY AS

SECRETARY OF TRANSPORTATION; DEREK KAN,

IN HIS OFFICIAL CAPACITY AS UNDER SECRETARY

OF TRANSPORTATION FOR POLICY; FEDERAL

RAILROAD ADMINISTRATION; PAUL NISSENBAUM,

IN HIS OFFICIAL CAPACITY AS ASSOCIATE

ADMINISTRATOR OF THE FEDERAL RAILROAD

ADMINISTRATION; AAF HOLDINGS LLC,

Respondents.

-----------------------------------------------------------------On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The District Of Columbia Circuit

-----------------------------------------------------------------BRIEF OF INDIAN RIVER NEIGHBORHOOD

ASSOCIATION AS AMICUS CURIAE

IN SUPPORT OF PETITIONERS

-----------------------------------------------------------------TRACY S. CARLIN

Counsel of Record

STEVEN L. BRANNOCK

BRANNOCK HUMPHRIES & BERMAN

1111 W. Cass Street

Suite 200

Tampa, Florida 33606

(813) 223-4300

tcarlin@bhappeals.com

sbrannock@bhappeals.com

Counsel for Amicus Curiae

Indian River Neighborhood

Association

June 19, 2020

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COCKLE LEGAL BRIEFS (800) 225-6964

WWW.COCKLELEGALBRIEFS.COM

i

TABLE OF CONTENTS

Page

Table of Authorities .............................................

ii

Interest of the Amicus Curiae .............................

1

Introduction and Summary of the Argument ......

3

Argument .............................................................

4

A.

B.

DOT’s Interpretation of § 142(m)(1)(A) is

Neither Well Founded Nor Persuasive Given

the Unambiguous Language of that Section .............................................................

5

DOT’s Interpretation of § 142(m)(1)(A) is

not Entitled to Skidmore Respect Because

it is not Consistent with any Long-standing

Interpretation of § 142(m)(1)(A) ................ 16

1. TIFIA Assistance is the Only Title 23

Assistance Available to Brightline ...... 16

2. Any Reliance on the Kussy Interpretation of § 142(m)(1)(A) is Misplaced ..... 19

Conclusion............................................................ 25

ii

TABLE OF AUTHORITIES

Page

CASES

Barrett v. United States,

423 U.S. 212 (1976) ...................................................7

Carr v. U.S.,

560 U.S. 438 (2010) ........................................... 7, 8, 9

Griffin v. Oceanic Contractors, Inc.,

458 U.S. 564 (1982) ...................................................8

Gwaltney of Smithfield, Ltd. v.

Chesapeake Bay Foundation, Inc.,

484 U.S. 49 (1987) .....................................................7

Morton v. Mancari,

417 U.S. 535 (1974) .................................................13

Skidmore v. Swift & Co.,

323 U.S. 134 (1944) ......................................... passim

TVA v. Hill,

437 U.S. 153 (1978) .................................................13

United States v. Wilson,

503 U.S. 329 (1992) ...................................................7

STATUTES

1 U.S.C. § 1 ................................................................ 7, 8

23 U.S.C. § 101(a)(5) (2005) ........................................22

23 U.S.C. § 101(a)(21) (2006) ......................................10

23 U.S.C. § 130 .................................................... passim

23 U.S.C. § 133 .......................................... 12, 13, 14, 15

iii

TABLE OF AUTHORITIES – Continued

Page

23 U.S.C. § 133(b) (2005) .......................... 11, 12, 14, 16

23 U.S.C. § 142(a) ........................................................11

23 U.S.C. § 142(a)(15) .................................................11

23 U.S.C. § 142(i)(1) ....................................................11

23 U.S.C. § 142(m)....................................... 7, 12, 15, 17

23 U.S.C. § 142(m)(1)(A) ..................................... passim

23 U.S.C. § 142(m)(1)(A)(1) ...........................................5

23 U.S.C. § 148(a)(3)(B)(vi) ....................... 11, 12, 13, 16

23 U.S.C. §§ 601-09 ................................... 10, 11, 16, 17

23 U.S.C. § 601(a)(11) .................................................16

23 U.S.C. § 601(a)(12)(A) ............................................17

23 U.S.C. § 601(a)(12)(C) ................................ 16, 17, 18

23 U.S.C. § 602 ...................................................... 17, 18

49 U.S.C. § 5302(a)(10) (2005) ....................................17

49 U.S.C. § 5309(a)(10) ...............................................12

REGULATIONS

23 C.F.R. § 646.210(b) .................................................15

23 C.F.R. § 646.210(b)(1) .............................................14

1

INTEREST OF THE AMICUS CURIAE1

Amicus Curiae, Indian River Neighborhood Association, Inc., is a Florida not-for-profit corporation.

IRNA formed in 2004 when development in Indian

River County was mushrooming. The County2 had always been an “old Florida” region, far enough from the

major cities to allow a unique, more rural community

culture to develop. As development boomed in the early

2000s, many individuals and neighborhoods were concerned about the future and what damage unmitigated

growth would cause to the County’s quality of life and

“old Florida” character. As a result, several neighborhoods formed IRNA. IRNA has since added new members.

IRNA is pro-business and pro-managed growth

but seeks to preserve the County’s quality of life and

“old Florida” character. IRNA does not own land or

have a profit motive. Its purpose is to protect the character of the community for future generations.

When IRNA first learned about Brightline, IRNA

realized the project would negatively impact the

1

Jeffrey A. Lamken, for the County Petitioners, David

Coburn, for Intervenor AAF, and Patrick Smith, for Respondents,

DOJ et al., have all consented to the filing of this brief. Counsel

for IRNA certifies that this brief was not authored, in whole or

in part, by counsel to a party, and no monetary contribution to the

preparation or submission of this brief was made by any person

or entity other than Amicus Curiae, its members, or its counsel.

The parties were notified ten days prior to the due date of this

brief of the intention to file.

2

IRNA will use Petitioners’ acronyms and other defined

terms unless stated otherwise.

2

community and IRNA’s member neighborhoods. Over

time, it became even more concerned about the potential safety impacts to be caused by thirty-two highspeed trains per day running though the downtown

and local neighborhoods.

Although there had been freight train service to

the area for many years, IRNA realized Brightline was

different because it would provide no real benefit to the

community or IRNA’s members. The two nearest train

depots would be in West Palm Beach and Orlando, both

of which are over an hour away from the closest County

lines. Thus, the project would bring environmental and

safety impacts, but no economic benefit, like jobs or

passenger spending in the local economy. Consequently, IRNA opposed this project from its inception.

IRNA has regularly raised numerous concerns

regarding the dangers of Brightline to human safety,

local historic sites, wildlife, vegetation, and the community’s culture. IRNA is concerned AAF is now selling tax-exempt private activity bonds (“PABs”) based

on an interpretation of 23 U.S.C. § 142(m)(1)(A) that

contradicts its plain language and intent. This interpretation of § 142(m)(1)(A) defies common sense and

makes a mockery of the law and the proper application

of judicial respect for agency interpretations under the

standard set by Skidmore v. Swift & Co., 323 U.S. 134

(1944).

If this Court applies proper rules of statutory construction to the relevant provisions, the tax-exempt

interest on the PABs will be impaired and, under the

3

applicable bond documents, the Trustee for the PABs

will be obligated to notify the bondholders of a Determination of Taxability. That would, as a practical matter, bring Phase II of Brightline to an end. As an

association of local neighborhoods and citizens who

will be directly impacted by this project, IRNA has a

direct interest in the outcome of this case. The end of

Brightline will benefit IRNA and its members.

------------------------------------------------------------------

INTRODUCTION AND

SUMMARY OF THE ARGUMENT

This Court has an opportunity to clarify how the

lower courts should apply the administrative deference standard it outlined in Skidmore v. Swift & Co.,

323 U.S. 134 (1944). The Court should seize this opportunity as the court of appeals misapplied Skidmore

because it failed to determine whether § 142(m)(1)(A)

is ambiguous before giving deference to DOJ’s interpretation of it. In addition, it rewrote the plain language of § 142(m)(1)(A) and used FERC’s past receipt

of title 23 assistance for railway-highway grade crossings to defer to DOJ’s conclusion that Brightline “receives” federal assistance under title 23. As Petitioners

explain, federal opinions in this area are inconsistent.

Therefore, this case presents a unique opportunity for

this Court to clarify the law of the land related to the

proper application of Skidmore to agencies’ statutory

interpretations.

4

IRNA adopts the Petitioners’ arguments on this issue and its conclusion as to the proper outcome. In this

amicus brief, however, IRNA will demonstrate that, if

this Court engages in proper and customary statutory

construction, it will conclude that § 142(m)(1)(A) is not

ambiguous and that its plain language does not support the PAB allocation to AAF. Indeed, that allocation

was directly contrary to the plain language of the statute and the legislative intent expressed therein.

The threshold issue here is whether, under

§ 142(m)(1)(A), Brightline is eligible for PABs and

whether the interest on those bonds is tax-exempt. The

correct interpretation of § 142(m)(1)(A) carries important consequences for the proper allocation of federal dollars and for the County, IRNA, and other

communities like theirs throughout the United States.

If Brightline is not eligible for federal monies or taxexempt interest on the PABs, the project will not be

feasible and AAF would likely abandon it. Therefore,

because the appellate court failed to interpret

§ 142(m)(1)(A) using the standard rules of statutory

construction before giving the DOT’s interpretation of

that section Skidmore deference, the petition should be

granted and this case should be resolved on the merits.

------------------------------------------------------------------

ARGUMENT

This Court should grant the petition and resolve

this case on the merits. If the Court properly applies

long-standing rules of statutory construction, it will

5

determine that Brightline did not qualify for taxexempt PABs and the PAB allocation to AAF contravened the plain language of § 142(m)(1)(A). It also ran

afoul of the expressed eligibility requirements for a

qualified project under other provisions of title 23 as

they existed in 2005 when § 142(m)(1)(A) was enacted.

As a result, the petition should be granted.

A. DOT’s Interpretation of § 142(m)(1)(A) is

Neither Well Founded Nor Persuasive Given

the Unambiguous Language of that Section.

The petition should be granted because the plain

language of § 142(m)(1)(A)(1) establishes that Brightline was not eligible for PABs. Section 142(m)(1)(A)(1)

specifically requires that any project financed through

PABs “receives” title 23 federal assistance. DOT concluded, however, that AAF’s passenger rail facility

was eligible under § 142(m)(1)(A) because some portions of the freight rail line owned and operated by

FERC had, in the past, “received” title 23 federal assistance for railway-highway grade improvements and

that Brightline benefitted from those earlier enhancements. But that interpretation flies in the face of the

plain language of the statute.

The term “qualified highway or surface freight

transfer facilities” in § 142(m)(1)(A) means “any surface transportation project which receives assistance

under title 23, United States Code (‘as in effect on the

date of the enactment of this subsection’).” 23 U.S.C.

§ 142(m)(1)(A) (2005) (emphasis added). IRNA opposes

6

the notion that because the “project” had benefited

from approximately nine million dollars in title 23 assistance given to FERC in the past (and not Brightline

or AAF) and FERC anticipates it will receive additional monies sometime in the future, Brightline is

eligible for a PAB allocation under § 142(m)(1)(A). This

reading of the statute ignores its plain language and

the congressional intent expressed therein. As discussed below, it is an unprecedented construction of

the statute even for the DOT. Consequently, DOT’s

interpretation is not entitled to deference under

Skidmore.

The appellate court relied on Skidmore to give deference to DOT’s interpretation of § 142(m)(1)(A). But

Skidmore merely allows courts to respect an agency’s

interpretation of an ambiguous statute if the agency’s

position is well founded, persuasive, and consistent.

Skidmore, 323 U.S. at 140. The court of appeals completely misapplied the articulated Skidmore standard.

Using Skidmore, the appellate court gave deference

or respect to DOT’s misguided interpretation of

§ 142(m)(1)(A), i.e., that Brightline “benefitted from”

title 23 assistance FERC had “received” in the past and

that it might also benefit from the federal assistance

FERC hopes to receive in the future. That interpretation flies in the face of § 142(m)(1)(A)’s plain language.

Indeed, the court failed to determine whether the statute was ambiguous before deciding that DOT’s interpretation was worthy of respect.

DOT’s interpretation is not worthy of respect,

however. Section 142(m)(1)(A) is clear and ambiguous

7

on its face. Throughout § 142(m), Congress consistently used the present tense when it stated that to be

qualified, the project must be one that “receives” title

23 assistance. Its use of the present tense rather than

the past tense, “received,” or the present perfect tense

“has received,” was intentional and is critical to this

case. See Carr v. U.S., 560 U.S. 438, 447-48 (2010). As

the Court stated in Carr, “[c]onsistent with normal usage, we have frequently looked to Congress’ choice of

verb tense to ascertain a statute’s temporal reach.” Id.

(citing United States v. Wilson, 503 U.S. 329, 333 (1992)

(“Congress’ use of a verb tense is significant in construing statutes”); Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Foundation, Inc., 484 U.S. 49, 57 (1987)

(“Congress could have phrased its requirement in language that looked to the past . . . , but it did not choose

this readily available option”); Barrett v. United States,

423 U.S. 212, 216 (1976) (observing that Congress used

the present perfect tense to “denot[e] an act that has

been completed.”)). As the Court noted, the Dictionary

Act also ascribes significance to verb tense. Carr, 560

U.S. at 448 (citation omitted). It provides that, “[i]n determining the meaning of any Act of Congress, unless

the context indicates otherwise[,] . . . words used in the

present tense include the future as well as the present.” Id. (quoting 1 U.S.C. § 1). By implication then,

the Dictionary Act provides that the present tense does

not include the past. Id.

Thus, “receives” federal assistance means the PAB

applicant is receiving funds presently and at the time

of the PAB application. The fundamental flaw in DOT’s

8

interpretation is that FERC was not currently receiving those funds when Brightline applied for a PAB allocation. Congress could not have intended that

FERC’s past receipt of federal assistance means that

Brightline “receives” federal assistance under the

meaning intended by § 142(m)(1)(A). Indeed, that tortured construction would convert an ineligible project

into an eligible one, which would be an absurd result.

See Griffin v. Oceanic Contractors, Inc., 458 U.S. 564,

574 (1982) (“It is true that interpretations of a statute

which would produce absurd results are to be avoided

if alternative interpretations consistent with the legislative purpose are available.” (citations omitted)).

Thus, a statute that defines a qualified project as one

that “receives Federal assistance” should not be interpreted to encompass a separate, but related project

that only “received” federal assistance in the past and

not during the time of its own PAB allocation application process. See Carr, 560 U.S. at 448.

Under the plain language Congress used in

§ 142(m)(1)(A), to be qualified for a PAB allocation, the

project must be an eligible surface transportation project that is currently receiving federal assistance under title 23 or is currently slated to receive guaranteed,

future title 23 assistance. See Carr, 560 U.S. at 448

(citing 1 U.S.C. § 1). The record here does not support

either scenario. The DOT’s determination that Brightline qualified for a PAB allocation under § 142(m)(1)(A)

because FERC’s separate freight line had previously

received title 23 assistance is simply not supported by

the plain language of the statute.

9

At the time of AAF’s PAB application in 2017 (D.

Ct. Dkt. 51, p. 4), the record showed FERC had received

$21 million in Highway Trust funds between 2005 and

2014 (D. Ct. Dkt. 51, p. 23.) No record evidence existed,

however, that Brightline was also receiving federal assistance under title 23 in the form of railway-highway

grade crossings in 2017 or even that Brightline (as opposed to FERC) had “received” federal assistance in

the past. (D. Ct. Dkt. 51, pp. 4 & 23.) Similarly, the conclusion that title 23 investments for railway-highway

grade crossings related to FERC’s rail corridor that

Brightline would use are anticipated in the future, but

were not in the pipeline for payment, is insufficient to

satisfy the congressional requirement that the project

“receives” federal assistance under title 23 when the

PAB allocation occurs. Therefore, DOT’s interpretation

of the statute is neither well founded nor persuasive.

See Skidmore, 323 U.S. at 140. As a result, DOT’s interpretation of it is not entitled to respect under

Skidmore.

To reach the contrary conclusion, the district court

improperly rewrote the statute to say the Secretary

was permitted to conclude Brightline (as opposed to

FERC’s railway-highway crossing project) “receive[d]

Federal assistance under title 23[.]” (See D. Ct. Dkt. 51,

p. 23 (citing 23 U.S.C. § 142(m)(1)(A) (alteration added

by district court)).) That rewrite, however, totally

changed the statute’s meaning and violated longstanding rules of statutory construction. See Carr, 560

U.S. at 448. The mere fact that FERC’s freight railway line or at least some of the railway-highway grade

10

crossings along the rail corridor Brightline would use

previously received some title 23 assistance does not

satisfy the requirements of § 142(m)(1)(A) or the eligibility requirements for qualified PAB allocations under

23 U.S.C. §§ 601-09, the Transportation Infrastructure

Finance and Innovation Program, commonly known as

TIFIA, discussed, infra, or other potentially relevant

sections of title 23.

In addition, DOT’s interpretation of § 142(m)(1)(A)

carries serious consequences for the allocation of a limited resource, PABs with tax-exempt interest. If DOT’s

construction of § 142(m)(1)(A) stands, it will lead to absurd results in the PAB allocation process. Anyone

claiming even a peripheral, past benefit, whether direct or indirect, from title 23 federal assistance from

crossing improvements could qualify for PABs regardless of the nature of the benefitted facility. Given the

very limited availability of PABs, such a broad reading

of the statute would create a free-for-all for all sorts

of rail facilities that are otherwise unqualified and ineligible for title 23 assistance. For example, DOJ’s expansive interpretation of § 142(m)(1)(A) might then

authorize a PAB allocation for a footpath running

alongside the freight line that crosses the same road

where the railway-highway crossing improvements

were made. Such an interpretation runs afoul of the

plain language of the statute.

Title 23 defines “project” to include “an undertaking to construct a particular portion of highway . . . or

any other undertaking eligible for assistance under

this title.” 23 U.S.C. § 101(a)(21) (2006). The word

11

“eligible” is key here. Section 142(a) provides a list of

fifteen different types of projects that are entitled to

PAB allocations. See 23 U.S.C. § 142(a). The only listed

project under § 142(a) that could possibly apply here

is § 142(a)(15), a “qualified highway or surface freight

transfer facility.”3 Logic dictates that Congress must

not only have intended that a project under

§ 142(m)(1)(A) be presently receiving federal assistance under title 23, but also that the project be “eligible” for federal assistance under title 23. Eligibility

for federal assistance under title 23 is a threshold requirement.4

Only four sections or parts of title 23 exist that

could apply to make FERC’s railway-highway grade

crossings or Brightline’s passenger rail facility “eligible”

under § 142(m)(1)(A) – §§ 130, 133(b), 148(a)(3)(B)(vi),

and 601-09 as they existed when § 142(m)(1)(A) was

added to the Code. IRNA will discuss §§ 601-09, commonly known as TIFIA in Part B, § 1 of this brief. None

of these sections, except TIFIA, would provide title 23

eligibility to Brightline for a PAB allocation.

3

Brightline is not a high-speed intercity rail facility because

the trains will not travel at a maximum speed exceeding 150

miles per hour. See 26 U.S.C. § 142(i)(1). (Petitioners’ Appendix,

p. 55a.)

4

Presumably, DOT does not mean to say that Congress was

required to insert into § 142(m)(1)(A) three times before the word

“receives” the phrase “is eligible for and. . . . ” The eligibility requirement is obvious. It makes no sense for Congress to have to

express its intent in such a repetitive way. Especially when the

language it did use is clear and unambiguous.

12

Section 133(b) specifically excludes intercity passenger rail facilities like Brightline and freight rail

projects like FERC’s. 23 U.S.C. § 133(b) (2005). When

§ 142(m) became law, the only passenger rail facility

included in the exclusive list of “eligible projects” under § 133 were public mass transit projects “eligible for

assistance under chapter 53 of title 49.” 23 U.S.C.

§ 133. Brightline was not eligible under that provision.

See 49 U.S.C. § 5309(a)(10).

In contrast, §§ 148(a)(3)(B)(vi) and 130 allow federal assistance for construction and improvement of

railway-highway grade crossings like those conducted

by FERC some number of years before Brightline’s

PAB application. See 23 U.S.C. §§ 130 and

148(a)(3)(B)(vi). Even DOT tacitly acknowledged in the

district court that the statutory requirement that a

project “receives” title 23 assistance cannot be construed so broadly as to allow DOT to bootstrap a project into PAB eligibility solely based upon an incidental

and unintentional benefit from title 23 funds. (See D.

Ct. Dkt. 51, p. 22 (citing H’rg Tr. at 64:9-23).) But to be

a qualified, eligible project under § 142(m)(1)(A), any

projects under §§ 130 and 148(a)(3)(B)(vi) must still be

receiving federal assistance under one of those three

sections at the time of the PAB allocation process. Consequently, because any monies paid under those sections were in the past, not the present, Brightline’s

passenger rail facility is not eligible for PABs under

§ 142(m)(1)(A).

Moreover, because § 133 is the only section that

addresses passenger railways, it is the more specific

13

statute applicable to Brightline and, therefore, it

should control. See Morton v. Mancari, 417 U.S. 535,

550-51 (1974) (“Where there is no clear intention otherwise, a specific statute will not be controlled or nullified by a general one, regardless of priority of

enactment.”). Although § 133 addresses railways and

§§ 130 and 148(a)(3)(B)(vi) deal with railway-highway

road crossings, § 133 should control because Congress

expressly excluded intercity passenger railways like

Brightline in that section. Also, only FERC, not Brightline, has ever received federal assistance for railwayhighway grade crossings for its freight line.

The district court reasoned, however, that it was

“reasonable” for DOT to conclude that Brightline’s project was an eligible project and that it “receives” federal

assistance under 23 U.S.C. § 130 because FERC’s rail

corridor, which Brightline would use, had “directly benefitted” from FERC’s approximately nine million dollars in Federal Highway Trust Funds in the past.

(Petitioners’ Appendix, pp. 58a-62a.) Those funds were

authorized under 23 U.S.C. § 130 between 2005 and

2014, some three years before Brightline’s 2017 PABallocation application. Those funds were spent on

safety improvements made at railway-highway crossings along the existing north-south railroad corridor to

be used by Brightline and owned by FERC. (Id.) To rewrite the statute from “receives” federal assistance to

“directly benefitted from” federal assistance is yet another improper revision to the statutory language chosen by Congress. See TVA v. Hill, 437 U.S. 153, 194-95

(1978) (“Courts are not authorized to rewrite a statute

14

because they might deem its effects susceptible of improvement.”).

Congress could not possibly have intended that,

under § 142(m)(1)(A), a project could “receive” federal

assistance under such contradictory circumstances. By

this “logic” about crossing improvements, FERC could

have sought PAB financing of its freight corridor infrastructure improvements for its freight-train business

under § 133 and likewise been determined to be qualified and eligible for PAB allocation under the same

mind-boggling interpretation of § 142(m)(1)(A), even

though § 133(b) expressly excludes freight-related projects. Such a construction of § 142(m)(1)(A) cannot

stand. If it does, it will lead to absurd results in the

PAB-allocation process. Again, anyone claiming even a

peripheral, past benefit, whether direct or indirect,

from title 23 federal assistance from crossing improvements could qualify for PABs regardless of the nature

of the benefitted facility. Given the very limited availability of PABs, such a broad reading of the statute

would create a potential for abuse and the circumvention of Congressional intent in the PAB process.

DOT’s interpretation is not well founded or persuasive for another reason. DOT’s own regulation,

23 C.F.R. § 646.210(b)(1), determined that railwayhighway crossings have no net benefit to the railroads.

Section 646.210(b)(1) reads, in pertinent part: “Projects

for crossing improvements are deemed of no ascertainable net benefit to the railroads and there shall be

no required railroad share of the costs.” 23 C.F.R.

§ 646.210(b)(1); see also Railroad-Highway Grade

15

Crossing Handbook, https://safety.fhwa.dot.gov/hsip/

xings/com_roaduser/fhwasa18040/chp4.cfm, last accessed on June 16, 2020. In other words, the intended

benefit of the funds is the roadway, not the railway. In

the section titled Government Agency Responsibility

and Involvement, the Handbook sums up each party’s

responsibilities as follows:

Although the railroads retain responsibility for the construction, reconstruction, and

maintenance of the track structure and riding

surface at the highway-rail intersection, their

obligation for the roadway usually ends

within a few inches of the outside ends of the

ties that support the rails and the crossing

surface. The street or highway agency has responsibility for the design, construction, and

maintenance of the roadway approaches to

the crossing, even though these approaches

may lie within the railroad’s right of way.

See https://safety.fhwa.dot.gov/hsip/xings/com_roaduser/

fhwasa18040/appxa.cfm, last accessed on June 16, 2020.

That the expenditure of Highway Trust Fund monies

for the improvements on all the existing grade crossings within the rail corridor Brightline will use should

cause such discrete highway-roadway projects to

morph into a surface transportation project as contemplated by § 142(m) and limited by § 133 defies

common sense. Stated differently, Brightline cannot

be deemed to have benefitted from FERC’s past receipt

of title 23 assistance where DOT’s own regulation, 23

C.F.R. § 646.210(b), provides that railway-highway

grade improvements provide “no ascertainable

16

benefits” to the railroad. If they provide no benefit to

the railroad, they cannot provide any benefit to an entity using the railroad’s freight corridor. As a result,

the petition should be granted because DOT’s interpretation of § 142(m)(1)(A) is not well founded or persuasive and, therefore, is not entitled to Skidmore

deference.

B. DOT’s Interpretation of § 142(m)(1)(A) is not

Entitled to Skidmore Respect Because it is

not Consistent with any Long-standing Interpretation of § 142(m)(1)(A).

1. TIFIA Assistance is the Only Title 23 Assistance Available to Brightline.

Had Congress wanted to make intercity passenger

rail facilities “eligible” for title 23 assistance under

§ 142(m)(1)(A), it knew precisely how to do it. See 23

U.S.C. §§ 601-09 (2005). Sections 601-09, commonly

known as TIFIA, and § 142(m)(1)(A) were enacted in the

same year, yet the former includes intercity passenger

rail facilities like Brightline, but §§ 142(m)(1)(A), 130,

133(b), and 148(a)(3)(B)(vi) expressly do not. This statutory structure confirms that Brightline is not qualified or eligible for title 23 federal assistance without

complying with TIFIA.

Section 601(a)(11) states that such a facility may

be privately owned. 23 U.S.C. § 601(a)(11). Under

§ 601(a)(12)(C), the definition of “project” expressly includes “a project for intercity passenger . . . rail facilities and vehicles. . . .” 23 U.S.C. § 601(a)(12)(C) (2005).

17

This definition is significant because under

§ 601(a)(12)(A), a “project” is defined as “any surface

transportation project eligible for Federal assistance

under this title [title 23] or chapter 53 of title 49.” 23

U.S.C. § 601(a)(12)(A) (2005). Therefore, § 601(a)(12)(C)

indicates that when it drafted TIFIA, Congress understood that no other provision in title 23 authorized

federal assistance for an intercity passenger rail facility, whether or not it is publicly owned. See 49 U.S.C.

§ 5302(a)(10) (2005) (expressly excluding intercity

passenger rail from coverage under chapter 53 of title

49).

TIFIA also provides for a “federal security instrument” that backs senior private debt evidenced in this

case by PABs. 23 U.S.C. §§ 601-09. TIFIA requires the

senior debt to satisfy rigorous “credit worthiness

standards” to ensure the debt’s underlying obligations

receive an investment-grade rating high enough to assure they will not be considered “junk bonds.” 23 U.S.C.

§ 602.

Until Brightline, only two passenger rail projects

were financed through PABs under § 142(m). The

PABs for both projects were backed by major TIFIA

assistance under title 23, however. As a result, they

were required to, and did, satisfy the investment-grade

criteria of § 602.

In contrast, AAF never applied for or even claimed

Brightline was eligible for TIFIA assistance. If AAF

had done so and satisfied all the stringent conditions

that must be met to obtain federal assistance for a

18

privately-owned project under TIFIA, this lawsuit

would not exist on the ground that there is no authority under title 23 to provide assistance to the project. That authority does exist, but only under TIFIA.

Yet, AAF never applied for TIFIA assistance for its

privately-owned project – ostensibly because it did not

want to comply with the strict creditworthiness standards TIFIA requires.

Consequently, the court of appeal’s Skidmorebased conclusion that DOT’s evaluation of this project

was consistent with its long-standing interpretation of

§ 142(m)(1)(A) is incorrect. (See D. Ct. Dkt. 51, pp. 19,

21 n.3, and 22; Petitioner’s Appendix, pp. 25a-26a.)

To the contrary, the only times DOT has awarded PAB

allocations to railway projects (as opposed to pure roadway projects) has been where the railway project receives TIFIA assistance under 23 U.S.C. § 601(a)(12)(C),

whether or not the project is privately owned. Nevertheless, DOT relied on the Declaration of Paul Baumer,

which was filed related to a preliminary injunction proceeding in this case (Petitioner’s Appendix, p. 135a.) In

that declaration, Mr. Baumer asserts that DOT allocated $1.3 million in PABs to the Purple Line light

rail project in the Maryland suburbs. DOT relied on

Mr. Baumer’s statement to support its interpretation

of § 142(m)(1)(A) and its conclusion that Brightline

was an eligible project under that section. That reliance is remarkable, however, as that project would otherwise be ineligible for PABs under § 142(m)(1)(A)

without relying on TIFIA and meeting the investmentgrade standards required by § 602.

19

Rather than proceed under TIFIA and comply

with its more stringent credit-worthiness requirements, however, DOT chose to shoehorn Brightline into

§ 142(m)(1)(A) through § 130 instead. The problem

there is that Brightline is not a qualified project eligible for federal assistance under that section without

TIFIA. DOT adopted this flawed interpretation even

though it is not reasonable or even remotely consistent

with the plain language of § 142(m)(1)(A). Put simply,

that interpretation is neither well founded nor consistent with Congressional intent as expressed by the

language used in § 142(m)(1)(A).

2. Any Reliance on the Kussy Interpretation

of § 142(m)(1)(A) is Misplaced.

To support its claim that § 142(m)(1)(A) is consistent with its long-standing construction of that section, DOT relied, in part, on the October 7, 2015,

FHWA opinion letter submitted to the IRS by Edward

V.A. Kussy, Acting Chief Counsel of FHWA. (Petitioners’ Appendix, pp. 128a-132a.) DOT asserted that the

Kussy letter establishes that DOT’s allocation of PABs

to Brightline is consistent with DOT’s long-standing

interpretation of projects under § 142(m)(1)(A). (See D.

Ct. Dkt. 51, pp. 23-24; Petitioners’ Appendix, pp. 25a27a.) DOT is incorrect.

The Kussy letter opined that “the most reasonable

reading . . . permits the proceeds of [PABs] authorized

by this provision to be used on the entire transportation facility that is being financed and constructed

20

even though only a portion of that facility receives Federal assistance under title 23.” (D. Ct. Dkt. 51, p. 24;

Petitioners’ Appendix, pp. 129a-130a.) But Kussy’s

statement does not discuss the threshold question

here: whether Brightline’s project itself is qualified under § 142(m)(1)(A) because it is eligible for title 23 assistance under a relevant provision of title 23. Kussy’s

letter simply assumes that it is. Kussy’s wording in the

letter demonstrates that FHWA assumed that the entire transportation facility is an eligible title 23 project,

even if only a portion is funded with federal dollars.

The Kussy letter focuses only on: 1) when highway facilities are constructed under the Federal-Aid Highway

Program; 2) the case where the entire highway facility

is eligible for federal assistance; and 3) how to fund the

particular highway projects or portions thereof. The

letter draws a distinction between “highway facilities”

or the “entire transportation facility” or “facility” or

“portions of the facility or activities associated with the

construction of the facility” characterized as a “project.”

(Petitioners’ Appendix, p. 130a.) Yet in its conclusion,

the letter unequivocally states that “PAB proceeds

may be used on any qualified facility that includes a

project funded with Federal-aid highway funds made

available under title 23.” (Id. at p. 132a (emphasis

added).) It would be illogical to interpret that sentence

to mean that an unqualified facility that includes a

small part that is funded with Federal Highway Trust

Fund monies is otherwise an eligible project under

§ 142(m)(1)(A).

21

The underlying assumption in Kussy’s letter is

that the entire facility was qualified and eligible for

title 23 assistance, but that a State may choose only to

fund a portion of that facility with federal funds.

Kussy’s concern was that, if a State wanted to fund

only a portion of an entirely eligible project with title

23 assistance, the State would be compelled to “sprinkle” that federal assistance over the entire project to

be eligible for that assistance under § 142(m)(1)(A).

But how he tried to resolve that concern is problematic.

Kussy stated:

Also, there is no reason to assume that

in amending the Internal Revenue Code, Congress intended to use precisely the same definition of “project” as is found in title 23, U.S.C.

The amendment found in § 11143 of SAFETEA-LU uses the word “project” in the context

of defining a “transportation facility.” This

suggests that the Congress had a broader concept in mind.

(Petitioners’ Appendix, p. 131a.) Kussy further stated

that:

The real consequence of insisting on the

narrowest reading of the word “project,” limiting PAB proceeds only to specific projects actually subject to a funding agreement under

23 U.S.C. § 106, would distort the long-standing way in which facilities are actually

funded, create needless red tape, and artificially result in the extension of Federal requirements that have nothing to do with the

bonding of transportation facilities. This is

22

because such a reading would induce State

grantees to “sprinkle” title 23 funds to every

separate project or contract of an entire facility

to make full use of PAB proceeds. . . . In other

words, repayment of the PAB is likely to be

supported by the facility as a whole, not just

the sections on which Federal assistance

funds are expended.

(Id. at 131a-132a (emphasis added).)

Kussy’s analysis is flawed. Why shouldn’t we assume that Congress intended to use the same definition of “project” as is found in title 23 and that it also

did not mean to require that title 23 funds be “sprinkled” over the whole project before the proceeds of the

entire facility could be used to repay the PABs? Using

the same definition of “project” as is used in title 23

ensures that the entire facility is, indeed, qualified, and

eligible.

Congress’s use of the word “qualified” in

§ 142(m)(1)(A) cannot be ignored. Even in the case of a

“highway,” as opposed to an intercity passenger rail

project, not all “highways” are qualified for federal

assistance under title 23. Rather, 23 U.S.C. § 101(a)(5)

(2005) provides: “The term ‘Federal-aid highway’

means a highway eligible for assistance under this

chapter other than a highway classified as a local road

or rural minor collector.”

The Kussy letter improperly conflates “receives”

with “funds” and treats those two words as if they are

interchangeable. They are not. The word “receive”

23

means “to have (something) given or sent to one” or to

“have (something) bestowed or conferred to one.” The

Random House College Dictionary, Revised Edition

(1982), p. 1101. “Fund,” on the other hand, means “to

provide money (for a project or the like).” Id. at 535.

Receiving is passive, whereas, funding is active. To

interpret the Kussy letter as DOT does would be to

construe it to provide the following: “PAB proceeds may

be used on any qualified facility that includes a project

funded with Federal-aid highway funds made available under title 23 [, even if the facility itself is not

eligible for that federal assistance under title 23].” (See

Petitioners’ Appendix, p. 132a.) The bracketed language was not included in Kussy’s conclusion and for

good reason. It apparently never crossed Kussy’s mind

that DOT would, almost ten years later, pervert the letter’s common-sense reasoning by, in effect: 1) embracing the bracketed add-on provision; and 2) extending

the letter’s reach to even more preposterous lengths

to cover Brightline, a facility that is unqualified and

ineligible to receive federal assistance under §§ 130

and 142(m)(1)(A).

Under § 142(m)(1)(A), the word “receives” unquestionably requires that the whole PAB transportation

project be deemed to have received federal assistance

under title 23, even though only a portion of the project

is funded under title 23. As Kussy clearly stated:

“Thus, we believe the most reasonable reading of

§ 11143 permits the proceeds of private activity bonds

(PAB) authorized by this provision to be used on the

entire transportation facility that is being financed and

24

constructed even though only a portion of that facility

receives Federal assistance under title 23.” (Petitioners’ Appendix, pp. 129a-130a.) Kussy states: “In summary, our view is that PAB proceeds may be used on

any qualified facility that includes a project funded

with Federal-aid highway funds made available under

title 23.” (Id. at 132a.) IRNA has never disagreed with

Kussy’s statement – as far as it goes. Given the language used in the Kussy letter, however, it is apparent

that FHWA assumed that the entire transportation

facility, and not just the part thereof that receives title

23 assistance, qualifies as an eligible title 23 project.

In contrast, however, under DOT’s logic, PABs

could finance even reconstruction of an expressly excluded local road or rural minor collector so long as it

crosses a railway line and railway-highway grade

crossing improvements are funded out of Highway

Trust Fund monies at some undefined point in the

past. This is illogical. The Kussy letter is not consistent

with DOT’s tortured construction of § 142(m)(1)(A) because only the crossing improvements and not FERC’s

freight line as a whole is eligible to receive federal assistance under §§ 130 and 142(m)(1)(A). Thus, to qualify as a title 23 project, the entire Brightline railway

would have to be an “eligible project” qualified for federal assistance under some relevant provision in title

23 thereby rendering it qualified for PABs under

§ 142(m)(1)(A). Brightline, however, is not an eligible

or qualified project by its very nature – an intercity

passenger rail facility that did not seek eligibility

through TIFIA. And, FERC’s prior receipt of federal

25

assistance for its railway-highway crossing improvements are irrelevant under the plain language Congress chose for § 142(m)(1)(A). As a result, DOT’s

interpretation of § 142(m)(1)(A) is not well founded,

persuasive, or consistent. Consequently, that interpretation is not entitled to Skidmore deference, and the

petition should be granted.

------------------------------------------------------------------

CONCLUSION

For the foregoing reasons and for the reasons in

the petition, this Court should grant the petition and

review this case on the merits.

Respectfully submitted,

TRACY S. CARLIN

Counsel of Record

STEVEN L. BRANNOCK

BRANNOCK HUMPHRIES & BERMAN

1111 W. Cass Street

Suite 200

Tampa, Florida 33606

(813) 223-4300

tcarlin@bhappeals.com

sbrannock@bhappeals.com

June 19, 2020

Counsel for Amicus Curiae

Indian River Neighborhood

Association