Case Law Updates on the Environment (CLUE)
Case Law Update Details
Indian River County v. USDOT
U.S. District Court - Washington DC
Brightline is a privately owned and operated express passenger rail service proposed to connect Miami and Orlando, Florida, over an existing rail corridor. The project was undertaken 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 second track along an existing freight rail line. To partially finance Phase II, AAF requested that USDOT allocate $1.15 billion in private activity bonds (PABs). (PABs are bonds issued by state or local government agencies to finance certain infrastructure projects, which USDOT may designate as exempt from federal taxes.) USDOT provisionally approved the PAB allocation for Phase II in December 2017. FRA published a Final EIS for Phase II in August 2015 and issued a ROD in December 2017.
Indian River County filed a lawsuit against USDOT. (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. First, the court ruled that USDOT did not exceed its authority by allocating PABs for the project. The court held that passenger rail projects were eligible for PAB allocations, that the Brightline project was an eligible project for PAB allocations, and that state agency approval of the bond issuance supplanted any requirement for local government approval of the bond issuance. The court also ruled that USDOT did not violate NEPA. The court held that the EIS sufficiently evaluated various impacts and that the alternatives analysis was adequate.
Private Activity Bond (PAB) Authorization
Indian River County alleged that the project was not eligible for a PAB allocation and that USDOT unlawfully approved the PAB allocation before the County (as a jurisdiction in which the project would be located) approved the bond issuance.
Project’s Eligibility for PABs
Ability of Local Government to Sue USDOT. The court first considered whether it could hear the County’s claim that USDOT lacked authority to authorize PABs for the project. For claims brought under the Administrative Procedure Act, a plaintiff must demonstrate that its interests are within the zone of interests intended to be protected or regulated by the statute. The court held that local governments in which a project would be located were within the statute’s zone of interests (in other words, local governments could sue USDOT for violating the statute that authorized PABs). The court explained that the statutory provision that defined eligible projects bore an “integral relationship” to another statutory provision (in the same subpart of the Internal Revenue Code) that required public approval for PABs to be tax-exempt. Because the latter section was intended to protect the interests of local governments, and both sections dealt with the same activity, the court concluded that local governments could sue USDOT to challenge its determination that a project is eligible for PABs.
Project Eligibility for PABs. USDOT may authorize PABs for certain infrastructure projects, including “qualified highway or surface freight transfer facilities,” which the statute defined to include “any surface transportation project which receives Federal assistance under title 23, United States Code.” The County argued that the Brightline project was not eligible for PABs because it was not a “qualified highway or surface freight transfer facility.” The court disagreed.
-- First, the court ruled that passenger rail projects were eligible for PABs if they received Title 23 federal assistance. The court interpreted the term “surface transportation project” to include passenger rail projects, based on the term’s dictionary definition, meaning in other areas of law, and ordinary usage.
-- Second, the court held that the Brightline project received Title 23 assistance because $9 million in funding under 23 U.S.C. § 130 had been used to improve railway-highway grade crossings along the rail corridor since the planning process for Brightline began in 2011. The County contended that the project did not receive Title 23 assistance because the federal funds went to Florida East Coast Railway (the owner of the existing rail corridor that would be used for part of Phase II) rather than to AAF directly, and the grade crossing improvements would support increased freight traffic on the rail corridor. The court determined that the record indicated that the Title 23 funds had been disbursed to benefit the Brightline project. The court noted that during a ten-year period, 43% of the Title 23 funding disbursed by the Florida DOT to Florida East Coast Railway was in the three years after planning commenced on the Brightline project. This indicated that the Brightline project was not merely an ancillary or unintended beneficiary of the Title 23 funding. Moreover, the court held, the grade crossing improvements rendered the entire rail corridor eligible for PAB allocation.
Public Approval of PAB Issuance
For PABs to qualify for tax-exempt status, the Internal Revenue Code requires that the bond issuance must be approved by “each governmental unit having jurisdiction over the area in which any facility . . . is located.” Although a Florida state agency approved the bond issuance, the County contended that the PABs did not qualify for tax-exempt status because the County had not granted its approval.
-- First, the court ruled that USDOT could be sued for authorizing PABs without necessary approvals from state and local governments. The court recognized that USDOT was not charged with enforcing the statute that requires state or local government approval for PABs to be tax-exempt. However, based on USDOT’s actions with respect to the Brightline PAB allocation, the court determined that USDOT could be sued in this case for authorizing PABs without requisite approvals by state or local governments: USDOT had concluded that the state-/local-government approval requirement was satisfied and had conditioned final PAB allocation on receiving a bond counsel opinion that the PABs would be tax-exempt.
-- Second, relying on the statute’s legislative history and Internal Revenue Service regulations, the court concluded that state-level approval satisfied the statute’s requirement. The court explained that the County’s position would lead to absurd results because it would require approval by every city and county in which a linear transportation project would be located.
Analysis of Impacts
Pedestrian Safety. The County raised several unsuccessful arguments challenging the EIS’s analysis of impacts to pedestrian safety:
-- The County alleged that the EIS did not analyze the safety risks to trespassers on the railroad tracks. The court noted that the EIS did, in fact, identify the potential for trespassing, and FRA proposed mitigation measures to limit trespassing: improvements to grade crossings to encourage pedestrians to use them, and fences to prevent trespassing. The court explained that even though the specific locations and designs of fencing would be determined in the future, the EIS sufficiently analyzed the issue: “FRA acknowledged potential adverse effects the project could have on pedestrian safety, offered a range of mitigation strategies, and required AAF to implement those strategies. NEPA demands no more.”
-- The County criticized the EIS’s data regarding historical pedestrian fatalities along a section of the rail corridor. Relying on data from the same database used by FRA, the County argued that actual trespasser fatalities were much higher than described in the EIS. The court noted that the County’s data also included fatalities at grade crossings; in this way, it was “both over-inclusive and less relevant” to understanding the issue of pedestrian safety in areas other than grade crossings. Therefore, the court concluded, the County’s data did not directly undermine the information in the EIS.
Train Collisions. The court rejected the County’s argument that the EIS did not adequately analyze the likelihood of train-on-train collisions. The EIS described various mitigation measures (including installation of positive train control) that would reduce the risk of train collisions. The court concluded that this was adequate: “FRA acknowledged the risk of derailment or collision but explained its conclusion that the risk would be mitigated through [positive train control] and other measures. That was sufficient under NEPA.”
Emergency Response Delays. The court held that the EIS adequately evaluated the project’s impacts on emergency vehicle response times during construction and operation. The EIS disclosed potential construction impacts on emergency vehicle traffic and identified mitigation measures (including a requirement that AAF coordinate construction road closures and detours with local emergency responders). The court rejected the County’s argument that the EIS should have identified the particular roads that would be closed during construction and when those road closures would occur. The EIS also concluded that operational impacts would be minimal because most grade crossings would be closed for less than a minute to allow for trains to pass; the court ruled that this level of analysis was sufficient.
Increased Boat Queuing. The County argued that the EIS did not sufficiently analyze the project’s impacts on boats at two drawbridges that trains would use to cross the St. Lucie and Loxahatchee Rivers. The EIS estimated the average increase in wait times for boats at the drawbridges as a result of the project’s increase in train traffic, and a proposed mitigation measure required AAF to notify boaters of the bridge closure schedule to help them plan trips to avoid waiting for the bridge to open. The County argued that the EIS should have addressed the environmental impacts associated with boats queuing (for example, fuel consumption, air pollution, and impacts to marine animals). The County also criticized FRA’s estimate of boat delays. The court upheld the analysis in the EIS:
-- The court held that it was reasonable for FRA to model boat traffic using a scenario in which smaller boats can travel under the bridges simultaneously in opposite directions, even though the practice was not recommended by the Coast Guard, because it was representative of observed conditions. “It was reasonable for the FEIS to present the modeling results based on data consistent with observed conditions.”
-- To estimate boat wait times, FRA relied on the 80th percentile values for boat traffic volumes, a methodology that was similar to that used for a traffic analysis. The court held that this methodology choice was both reasonable and adequately explained in the EIS. “FRA made the reasonable choice to use the 80th percentile value rather than the average value (which would underestimate wait times) or the 90th percentile value (which would exceed a ‘typical high volume day’) as a more realistic measure of boat traffic. The court has no basis to second guess that decision.”
-- The County claimed that FRA should have considered the impacts of hazardous currents on boats waiting for the bridges to open. The EIS explained that its model represented the most realistic situation possible using modeling technology. The court held that this was adequate, especially since the County did not propose a different methodology. “FRA said it did the best it could with available modeling technology and conceded that it was not perfect. This was sufficiently thorough to comply with NEPA. . . . The County does not suggest a readily-available alternative modeling technique.
-- The court held that the EIS was not required to provide more detail about the environmental effects associated with increased boat queuing, in light of FRA’s conservative estimate of wait times and its conclusion that mitigation measures would reduce queuing.
Noise. The County raised several unsuccessful arguments regarding the noise analysis in the EIS.
-- The County argued that FRA did not follow its guidance manual for noise assessment because it only prepared a general noise assessment for the EIS and required AAF to conduct a detailed noise analysis in the future when additional engineering designs were completed. The court upheld FRA’s noise analysis. The court explained that the guidance manual was not binding and did not require a particular level of analysis. The court also concluded that the ROD adequately explained why it was infeasible to conduct a detailed noise analysis given the level of design at the time the EIS was prepared.
-- The County argued that FRA did not follow its guidance manual for noise assessment because it calculated, rather than measured, existing noise levels along the rail corridor. FRA’s existing noise calculations were validated by comparing the calculated values to observed measurements taken in 2010 along the rail corridor. The court held that FRA adequately explained the reason for its chosen methodology (i.e., it could validate calculations based on recent noise measurements).
-- FRA’s noise analysis did not consider the use of warning horns at areas other than grade crossings. Based on its review of the record, the court concluded that FRA had adequate reasons for doing so. “Under the rule of reason, the Court must consider the practical limitations on the agency’s analysis, including the information available at the time as well as the availability of appropriate modeling. Applying that principle, it makes sense for the agency to assume in its noise analysis that trains would use their warning horns on the mainline only in unpredictable ‘emergency conditions.’ Although the agency could have been more explicit in its reasoning, the Court can nevertheless discern why FRA did not consider the use of mainline warning horns.”
-- The court determined that the EIS did not analyze the noise impacts from freight trains that could travel faster as a result of the project’s improvements to the rail corridor, but the court also held that this omission was harmless for two reasons. First, the County did not demonstrate that freight trains traveling 5 mph faster would significantly increase their noise impacts. Second, the court noted that the main source of noise impacts was from warning horns at grade crossings, not trains themselves.
The County challenged several aspects of the alternatives analysis, but the court upheld the analysis as adequate under NEPA.
-- The court held that FRA did not define the project’s purpose too narrowly by mirroring AAF’s goals. The court explained that because a federal agency was not the project sponsor, it was appropriate for FRA to give substantial weight to AAF’s preferences in the siting and design of the project.
-- The court ruled that FRA did not violate NEPA by failing to give detailed consideration to an alternative alignment proposed by the County. In the ROD, FRA explained that the County’s proposed alignment was not feasible for the same reasons that FRA had rejected another alternative considered in the EIS. The court explained that FRA was not required to further analyze the County’s proposed alternative because it shared dispositive features with the other alternative that FRA had already rejected.
-- The County claimed that FRA did not independently review and verify AAF’s assertion that there were no feasible alternatives to using the existing bridges over the St. Lucie and Loxahatchee Rivers. The County argued that the EIS used a chart describing bridge alternatives that AAF had prepared. The court noted that other parts of the administrative record indicated that FRA had, in fact, independently analyzed bridge alternatives before it decided to use AAF’s chart in the EIS. Therefore, the court rejected the County’s argument.