Our client, Southeastern Pennsylvania Transportation Authority (SEPTA), won an important victory against Amtrak today in the U.S. Court of Appeals for the District of Columbia Circuit.
Today, the Court of Appeals reversed a District Court decision and held that SEPTA had properly exercised its statutory right to obtain an easement right to access and use the Pennsylvania portion of the Northeast Corridor pursuant to the Congressionally authorized Final System Plan, and that Amtrak did not own that easement.
Amtrak claimed it owned the easement and therefore had the right to charge SEPTA rent to use the stations, in addition to the maintenance, operating, and capital costs SEPTA already paid for those stations. SEPTA claimed that it obtained the easement as part of the Congressionally-mandated allocation of railroad property among Amtrak, Conrail, and regional commuter authorities following the bankruptcy of the Northeast railroads in the 1970s and early 1980s. Amtrak prevailed in the District Court, which held that Amtrak obtained the commuter easement in 1981 pursuant to a contractual right of first refusal between Conrail and Amtrak.
In reversing that decision, the Court of Appeals held that because Congress had given SEPTA a statutory right to obtain the commuter easement in the Final System Plan, “Amtrak’s right of first refusal was a legal nullity with respect to SEPTA.”
SEPTA and Amtrak continue to negotiate over the exact amount of compensation SEPTA must pay to use the Northeast Corridor. The decision undercuts Amtrak’s longstanding position about the property rights it obtained in 1982 when Conrail transferred its commuter operations to regional commuter operators like SEPTA, New Jersey Transit, and others.
Kaplan Kirsch & Rockwell advised SEPTA throughout this litigation and are lead counsel in the pending companion proceeding before the Surface Transportation Board. Eric Pilsk, Chuck Spitulnik, and Suzanne Silverman, together with co-counsel Harkins Cunningham, took the lead in the briefing in the D.C. Circuit, and Eric argued the case before Judges Rao, Rogers, and the late Laurence Silberman.
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