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Indian River County v. USDOT
Project Description:
Brightline is a privately owned and operated express passenger rail service between Miami and Orlando, Florida, carried out by All Aboard Florida (AAF). Phase I of the project—from Miami to West Palm Beach—opened in early 2018. Phase II would connect West Palm Beach to Orlando, and would pass through Indian River County. Part of the planned alignment for Phase II would require constructing a new track along an existing freight rail line. To partially finance Phase II, AAF applied to the Federal Railroad Administration (FRA) for a $1.6 billion loan pursuant to the Railroad Rehabilitation and Improvement Financing program and also requested that USDOT allocate private activity bonds (PABs) for the project. (PABs are bonds issued by state or local government agencies to finance certain infrastructure projects, which USDOT may designate as exempt from federal taxes.) FRA published a Final EIS for Phase II in August 2015 and issued a ROD in December 2017. USDOT approved a $1.15 billion PAB allocation for Phase II in December 2017 and an additional $950 million PAB allocation in March 2019. AAF ultimately withdrew its FRA loan application.
925 F.3d 515
925 F.3d 515
U.S. Court of Appeals – D.C. Circuit
12/20/2019
Brightline Phase II
Rail
Case Summary
This is third case brought by Indian River County to challenge the Brightline project. Indian River County filed this lawsuit against USDOT in 2018. (Another county, Martin County, also sued USDOT, but settled its case.) Indian River County alleged that USDOT exceeded its authority under the law authorizing PABs and violated NEPA. In December 2018, the U.S. District Court for the District of Columbia ruled in favor of USDOT. On appeal, in this ruling, the U.S. Court of Appeals for the District of Columbia Circuit affirmed the district court’s ruling. First, the court ruled that Indian River County, as a local government in which the project would be located, could sue USDOT over its PAB allocation for the project. Second, the court ruled that the Brightline project was eligible for a PAB allocation because it benefitted from grade crossing improvements that received federal Title 23 funding. Finally, the court ruled that USDOT complied with NEPA by adequately evaluating impacts and mitigation related to pedestrian safety and noise.
Key Holdings
Private Activity Bond Allocation Ability of Local Government to Sue USDOT. To bring a claim under the Administrative Procedure Act, a plaintiff’s interests must be within the “zone of interests” intended to be protected or regulated by the relevant statute. The court ruled that Indian River County’s environmental and safety concerns were within the zone of interests protected by the section of the Internal Revenue Code authorizing PAB allocations for the project (26 U.S.C. § 142). The court explained that USDOT, when exercising its authority to allocate PABs under the statute, would be expected to consider the concerns of local governments in which a project would be located. Thus, Indian River County, as “a local government entity whose citizens will be directly affected by the AAF Project[,] has compelling interests that fall within the zone-of-interests protected by the statute.” Project Eligibility for PAB Allocation. USDOT may authorize PABs for certain infrastructure projects, including “qualified highway or surface freight transfer facilities,” which are defined to include “any surface transportation project which receives Federal assistance under title 23, United States Code.” The court held that a project is eligible for a PAB allocation if at least a portion of the transportation facility benefitted from Title 23 funding. The court also held that a PAB applicant does not need to be the direct recipient of Title 23 funding. The court concluded that the Brightline project was eligible for a PAB allocation because AAF and the freight rail corridor owner received Title 23 funding to improve grade crossings on the project corridor, which “clearly benefit the AAF Project.” NEPA Impacts on Pedestrian Safety. The court held that the EIS adequately analyzed pedestrian safety and mitigation measures to reduce trespassing. The EIS acknowledged that trespassing on the existing rail corridor was widespread and that the project could increase the frequency of accidents. The EIS discussed mitigation measures that included adding sidewalks to encourage the use of formal grade crossings, a public information campaign, and field surveys to determine where to install fencing and other measures to prevent trespassing. Impacts on Noise. The court held that the EIS adequately analyzed noise impacts from trains’ warning horns at grade crossings, as well as associated mitigation measures. AAF committed to installing pole-mounted horns at a number of grade crossings. AAF also agreed to cooperate with local governments that wanted to establish quiet zones, which would allow passenger and freight trains to pass through grade crossings without sounding horns.
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