City of Jersey City v. Consolidated Rail Corporation

U.S. Court of Appeals, Dist. of Columbia Circuit, No. 10-7135 February 3, 2012: Holds that City has standing in federal court to challenge Conrail sale of historic structure formerly used for rail purposes.

Conrail sold a six-block, half-mile long stone structure it owns “in the heart of Jersey City’s historic downtown” (Harsimus Embankment) to developers. The State of New Jersey designated most of the Embankment as a “historic place” in the NJ State Register of Historic Places, and the City designated the Embankment as a “historic landmark,” meaning that the property could be developed only with the consent of the Jersey City Historic Preservation Commission. The City expressed interest in buying the Embankment or taking it by eminent domain. The City of Jersey City, the Rails to Trails Conservancy, and the Pennsylvania Railroad Harsimus Stem Embankment Preservation Coalition filed a complaint in the US district court to void the sale because it had failed to obtain abandonment authority from the Surface Transportation Board (STB) as the City claimed is required under the Interstate Commerce Commission Termination Act. The Regional Rail Reorganization Act of 1973, a law enacted in connection with the bankruptcy of Conrail’s predecessor, the Penn Central Railroad, give the United States District Court for the District of Columbia exclusive jurisdiction over disputes relating to the disposition of former Penn Central assets.

Conrail sought to dismiss the complaint by alleging that the City and other plaintiffs lacked standing. The district court agreed with Conrail and the plaintiffs appealed. The Court of Appeals review was de novo. To decide about standing, the Appeals Court had to assume, without deciding, that plaintiffs would prevail on the merits that abandonment of the Harsimus Embankment requires STB authorization because it is a “railroad line”. With that assumption, to have standing at least one of the plaintiffs had to demonstrate that it has suffered an injury that is “concrete and particularized” as well as “actual or imminent.”

The City argued that it is injured because Conrail’s refusal to seek STB abandonment authority has deprived it of several “protections”: the City wishes “to acquire the Harsimus Embankment, or at least to minimize any harm to the property”; the STB process would require review under the National Environmental Policy Act and National Historic Preservation Act which “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”; if the STB authorizes abandonment, the City would have an exclusive ninety-day window to decide whether it wants to acquire the abandoned property, under New Jersey’s “right of first refusal statute”; and STB abandonment authority would permit the City to use its general condemnation power to acquire the property, but without STB authorization, the City “would be preempted and could not lawfully acquire the property”. The Court of Appeals had “little trouble concluding that the City enjoys Article III standing”, reversed the district court and remanded the case to it for further proceedings.

Decision available at http://www.cadc.uscourts.gov/internet/opinions.nsf/6BCF8B3D4EF40110852579990052E6C4/$file/10-7135-1356332.pdf.

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