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Rail & Transit Law Alert - Recent News & Updates



Happy New Year to all.  We want to advise you of a few noteworthy events in the rail industry. First, the Southeastern Pennsylvania Transportation Authority (SEPTA) had a significant victory against Amtrak in the D.C. Circuit regarding property ownership on the Northeast Corridor. Next, the U.S. Department of Transportation (USDOT) and the Federal Railroad Administration (FRA) has announced $9 billion in funding for rehabilitation and expansion of intercity passenger rail service on the Northeast Corridor, as well as an additional $2.3 billion for similar projects outside of the Northeast Corridor. Finally, the Surface Transportation Board (STB) has announced an acting head for its newly established Office of Passenger Rail, which has oversight of Amtrak on-time performance complaints.

SEPTA Wins DC Circuit Case Against Amtrak Over Northeast Corridor Property Ownership

On December 30, 2022, SEPTA received a favorable decision against Amtrak in the U.S. Court of Appeals for the District of Columbia Circuit regarding property ownership along the Northeast Corridor. National Railroad Passenger Corp. v. Southeastern Pennsylvania Transportation Authority, Case No. 21-7021 (D.C. Cir. Dec. 30, 2022). The case involved a dispute over whether SEPTA or Amtrak owns a commuter easement granting a property right to access and use a portion of the Northeast Corridor, including adjacent stations. Amtrak claimed it owned the commuter easement and, therefore, had the right to charge SEPTA rent to use Amtrak owned stations, in addition to the maintenance, operating, and capital costs SEPTA already paid for those stations. SEPTA claimed that it obtained the commuter 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 1982 pursuant to a contractual right of first refusal between Conrail and Amtrak.

The Court of Appeals reversed that decision, holding that SEPTA had a statutory right to obtain the commuter easement pursuant to the Congressionally-authorized Final System Plan and that no private contract could prevent SEPTA from exercising its Congressionally-conferred right.  Accordingly, “Amtrak’s right of first refusal was a legal nullity with respect to SEPTA.” The Court of Appeals held that SEPTA, not Amtrak, acquired the commuter easement in 1982.

The backdrop for the case is the years-long effort to reallocate costs between commuter rail operators and Amtrak along the Northeast Corridor, the busiest in the country.  Even with the standardized cost allocation policy established by the Northeast Corridor Commission pursuant to federal law (49 U.S.C. § 24905(c)), Amtrak and states and commuter rail agencies along the Northeast Corridor continue to negotiate some of the outdated financial arrangements that governed prior to the enactment of 49 U.S.C. § 24905(c). The D.C. Circuit 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 serves as lead counsel in the pending companion proceeding before the Surface Transportation Board.)

USDOT and FRA Issue Notice of Funding Opportunity for $12 billion to Upgrade and Expand Intercity Passenger Rail

In December 2022 USDOT and FRA published two notices of funding opportunities (NOFO) for commuter and intercity passenger rail amounting to $12 billion overall in discretionary grants.

On December 7, 2022, USDOT and FRA issued a NOFO for $2.3 billion to expand and modernize intercity passenger rail outside of the Northeast Corridor. FRA and USDOT, Notice of Funding Opportunity87 Fed. Reg. 75,119 (Dec. 7, 2022) (All States NOFO). On December 22, 2022, USDOT and FRA issued a NOFO for nearly $9 billion in funding available to upgrade and expand passenger rail service along the Northeast Corridor. FRA and USDOT, Notice of Funding Opportunity87 Fed. Reg. 79,421 (Dec. 27, 2022) (NEC NOFO). The funds for these NOFOs will be distributed through the Federal-State Partnership for Intercity Passenger Rail Grant Program, which was established under Section 22106 and 22307 of the Infrastructure Investments and Jobs Act (IIJA) (codified at 49 U.S.C. § 24911).

Both NOFOs contain explanatory background to the funding and the program, a description of eligibility and criteria for awarding funds, and application instructions. Eligibility and criteria for funding are largely the same under each NOFO, with the primary difference in this respect being whether the project involves the Northeast Corridor. Eligible applicants include states or political subdivisions of states, groups of states or interstate agencies, Amtrak, federally recognized tribes, or any combination of these entities. Eligible projects are those that either: replace, rehabilitate, or repair infrastructure, equipment, or a facility used for providing intercity passenger rail service to bring such assets into a state of good repair; improve intercity passenger rail service performance; and/or expand or establish new intercity passenger rail service. Planning, environmental studies, and final design for any such projects are eligible for funding, as is acquisition of property for the above purposes. For projects that are on a shared corridor with commuter passenger service or freight transportation, the applicants must clearly demonstrate how the proposed project benefits intercity passenger rail transportation and that such an investment would be reasonable independent and separate from other non-intercity passenger rail benefits of the project. USDOT and FRA requires at least 20% matching non-Federal funding to make an award.

The deadline for submitting applications for funding for each NOFO is three months from the date of publication (i.e. March 7, 2023 for the All States NOFO and March 27 for the NEC NOFO). Applications must be submitted online. Application materials are available at

STB Names Acting Director for New Office of Passenger Rail

In October 2022 the STB introduced its new Office of Passenger Rail (OPR), which is responsible for investigating and analyzing issues regarding Amtrak on-time performance (OTP) in order to implement Section 213 of the Passenger Rail Investment and Improvement Act of 2008 (PRIIA) (codified at 49 U.S.C. § 24308(f)) and the FRA’s recent rule establishing a performance metric for determining OTP (codified at 49 C.F.R. part 273). On December 8, 2022, the STB announced its selection of senior staff member Neil Moyer to serve as acting director of OPR (STB Notice 2-52). Mr. Moyer was involved in establishing OPR, serving as Passenger Rail Advisor in the STB’s Office of Public Assistance, Governmental Affairs, and Compliance. Prior to that role news sources report that Mr. Moyer served as Chief of the Intercity Passenger Rail Analysis Division and Chief of the Financial and Economic Analysis Division at FRA.

If you require additional information about any of these items or other legal issues please reach out to Chuck Spitulnik, Suzanne Silverman, or Ayelet Hirschkorn.

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