City of Philadelphia v. Consolidated Rail Corp., 97-7221

Decision Date07 July 2000
Docket NumberNo. 97-7221,97-7221
Citation222 F.3d 990
Parties(D.C. Cir. 2000) City of Philadelphia, Appellee v. Consolidated Rail Corporation, Appellee National Railroad Passenger Corporation, Appellant to 97-7223
CourtU.S. Court of Appeals — District of Columbia Circuit

Appeals from the United States District Court for the District of Columbia(Nos. 96rr00001, 96rr00003)

Dennis M. Moore argued the cause for appellant National Railroad Passenger Corporation. With him on the briefs were J. Brian Molloy and John L. Moore, Jr.

Joann Hyle argued the cause for appellant Consolidated Rail Corporation. With her on the briefs were Laurence Z. Shiekman and Stacey A. Mufson. Stephanie L. Kralik entered an appearance.

Kenneth A. Murphy argued the cause for appellee City of Philadelphia. With him on the brief was Gaetan J. Alfano.

Susan D. Colwell argued the cause and filed the brief for appellee Pennsylvania Public Utility Commission. John F. Povilaitis entered an appearance.

Before: Silberman, Sentelle and Garland, Circuit Judges.

Opinion for the Court filed by Circuit Judge Sentelle.

Sentelle, Circuit Judge:

Consolidated Rail Corporation and National Railroad Passenger Corporation appeal from a summary judgment entered against them in favor of the City of Philadelphia and the Pennsylvania Public Utility Commission requiring the railroads to pay for the refurbishment of a highway bridge. Because the question of ownership of the bridge was a matter governed by the state law of Pennsylvania, we certified that question to the Supreme Court of Pennsylvania. That court having now ruled that the City of Philadelphia owns the bridge, we reverse the judgment of the District Court and remand the case for the entry of summary judgment in favor of the railroads.

Analysis

This case originated in the District Court for the District of Columbia sitting as a Special Court under the Regional Rail Reorganization Act of 1973, 45 U.S.C. § 719 (1994). The case is a contest between the City of Philadelphia ("the City") and the Pennsylvania Public Utility Commission ("PUC") on one side, and Consolidated Rail Corporation ("Conrail") and National Railroad Passenger Corporation ("Amtrak") on the other, over who owns a highway bridge over a below-grade railroad right-of-way, who has to pay for its repair and upkeep, and in what amount. The railroads appeal the District Court's grant of summary judgment against Conrail and Amtrak and in favor of the City and the PUC, in which the railroads were required to pay for the refurbishment of a highway bridge as its owners and as successors to the now defunct Pennsylvania Railroad and its successor, the also defunct Penn Central Transportation Company ("Penn Central") under a contract with the City in which the railroad promised to maintain the bridge at no cost to the City. The dispositive issue in the case is the ownership of the bridge under Pennsylvania law. If the Pennsylvania Railroad, the original builder, never owned the bridge, but merely was a party with a contractual maintenance obligation, then the bridge did not pass to the railroads when the properties of Pennsylvania Railroad's successor Penn Central passed to Conrail and Amtrak under the provisions of the Regional Rail Reorganization Act of 1973. The parties offer Pennsylvania authority both for the proposition that highway bridges are parts of the highway they carry, and that they are appurtenances to the property they cross. No one provides, nor have we located, any case from Pennsylvania directly considering what effect the ordinance between the City and the railroad and the allocation of maintenance obligations in perpetuity may have on the question of ownership in the first instance.

A. Jurisdiction

This action was originally filed in the Special Court under 45 U.S.C. § 719(e) (1994). The Special Court was abolished by Congress effective January 17, 1997, and its original jurisdiction was transferred to the United States District Court for the District of Columbia. See 45 U.S.C. § 719(b)(2) (Supp. III 1997). We have jurisdiction of this appeal under 45 U.S.C. § 719(e) (Supp. III 1997) and 28 U.S.C. §§ 1291 and 1294 (1994).

B. Material Facts of the Case

The basic facts material to this issue are not disputed. The bridge in question crosses six railway tracks in the railroad right of way at 41st Street in Philadelphia. The City owns the bridges over 40th Street and 42nd Street, but maintains that the railroads own the 41st Street bridge. The 41st Street bridge crosses six railway tracks, four owned by Amtrak and two owned by Conrail. The original steel and timber bridge elevating 41st Street where it intersects with the railroad right of way was built at the site in 1875. That bridge was replaced by the now-deteriorating steel and concrete structure which was built in 1929, pursuant to a Philadelphia city ordinance that required the Pennsylvania Railroad to build and maintain the bridge at its own cost under the supervision of the Philadelphia Department of Public Works. The Pennsylvania Railroad 1 signed a document accepting these requirements on May 11, 1927. The Pennsylvania Public Service Commission (which became the PUC) issued a Certificate of Public Convenience for construction of the highway bridge on February 21, 1928, and Penn Central completed construction in August of 1929. None of these documents mentions ownership of the bridge.

It appears that the Pennsylvania Railroad and its successor Penn Central lived up to this contractual obligation until financial crisis struck the rail industry in the northeast, threatening its extinction. By 1971, Penn Central had filed for bankruptcy. It was not alone. By the early 1970s, the railroads in the northeast were failing at such a rapid rate that Congress stepped in to resolve the regional rail crisis. Congress passed the Regional Rail Reorganization Act of 1973, Pub. L. No. 93-236, 87 Stat. 985 (1974) (codified as amended at 45 U.S.C. § 701 et seq. (1994)) (the "Rail Act"), which allowed the railroads to reorganize into a single entity, and Conrail was designed to salvage the viable rail properties, leaving much of the debt behind in bankruptcy and beginning with a "clean slate." The process by which new, financially viable railroads were built from the wreckage that was the northeastern rail system forms the essential legal background to this case. See generally Regional Rail Reorganization Act Cases, 419 U.S. 102, 108-17 (1974).

The Rail Act created the United States Railway Association, see 45 U.S.C. § 711(a), a non-profit corporation, which in turn prepared a Final System Plan ("FSP") which designated how rail properties held by the bankrupt railroads would be distributed, see 45 U.S.C. § 716. The Rail Act also created Conrail, see 45 U.S.C. § 741(a), and mandated that rail properties designated in the FSP be conveyed to Conrail, see 45 U.S.C. § 743(b). The conveyance process was supervised by the Special Court and implemented through a Conveyance Order of the Special Court. See 45 U.S.C. § 719(b). Properties related to passenger rail service were then reconveyed to Amtrak. The transfer that matters in this case occurred when, pursuant to the Rail Act, all of Penn Central's "rail properties," i.e. properties "used or useful in rail transportation service," 45 U.S.C. § 702(14), were conveyed to Conrail, and the property related to passenger rail service was reconveyed to Amtrak. The City and the PUC claim that Penn Central's trustees in bankruptcy conveyed all of the real property in Philadelphia County to Conrail, "including the railroad right of way, rails, and the 41st Street Bridge formerly owned by [the Pennsylvania Railroad]."

The railroads dispute that the bridge was ever owned by Penn Central, and thus dispute that it could ever have been properly conveyed to them. They characterize the Rail Act conveyances differently. According to the railroads, the deeds between the trustees of the Penn Central bankruptcy estate and Conrail, and between Conrail and Amtrak, conveyed the real property free and clear of liens and encumbrances. The six railroad tracks under the 41st Street bridge were conveyed to Conrail, and four of them were reconveyed to Amtrak. Real property was conveyed by deed, and other property was...

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