Indian River Cnty. v. Rogoff

• Decision Date: 10 May 2017
• Docket Number: Case No. 1:15-cv-00460 (CRC), Case No. 1:15-cv-00632 (CRC).
• Citation: 254 F.Supp.3d 15
• Parties: INDIAN RIVER COUNTY, et al., Plaintiffs, v. Peter M. ROGOFF, et al., Defendants. Martin County, Florida, et al., Plaintiffs, v. Department of Transportation, et al., Defendants.
• Court: U.S. District Court — District of Columbia

254 F.Supp.3d 15

INDIAN RIVER COUNTY, et al., Plaintiffs,

v.Peter M. ROGOFF, et al., Defendants.

Martin County, Florida, et al., Plaintiffs,

v.Department of Transportation, et al., Defendants.

Case No. 1:15-cv-00460 (CRC), Case No. 1:15-cv-00632 (CRC).

United States District Court, District of Columbia.

Signed May 10, 2017

Philip E. Karmel, Bryan Cave, LLP, New York, NY, Daniel C. Schwartz, Bryan Cave, LLP, Washington, DC, for Plaintiff.

Barbara M.R. Marvin, U.S. Department of Justice, Washington, DC, Luther L. Hajek, U.S. Department of Justice, Denver, CO, Alison D. Garner, U.S. Department of Justice Natural Resources Section, Washington, DC, Blair Anderson, Pro se, for Defendant.

MEMORANDUM OPINION

CHRISTOPHER R. COOPER, United States District Judge

Two Florida counties have challenged a 2014 decision by the United States Department of Transportation ("DOT") to allocate up to $1.75 billion in non-taxable private activity bonds, or "PABs," to help finance a railroad project along the state's eastern coastline. DOT, the counties allege, failed to comply with the requirements of the National Environmental Policy Act ("NEPA") and other environmental statutes before allocating the PABs. After this Court held that the counties had standing and had stated claims under these statutes, the project's sponsor—AAF Holdings, Inc. ("AAF")—applied for a new allocation of PABs to finance a portion of the project that does not affect the counties, and requested that DOT withdraw the previously challenged allocation. DOT did so. Defendants now move to dismiss these cases as moot. For the reasons that follow, the Court will grant the motions.

I. Background

The history of this railroad project and the litigation it sparked are discussed extensively in prior opinions by the Court. See Indian River Cty. v. Rogoff, 201 F.Supp.3d 1, 4 (D.D.C. 2016) (granting in part and denying in part Defendants' initial motions to dismiss); Indian River Cty. v. Rogoff, 110 F.Supp.3d 59, 63–66 (D.D.C. 2015) (denying the counties' motions for a preliminary injunction). What follows is a brief overview of the most relevant facts that bear on Defendants' present motions to dismiss.

AAF seeks to construct and operate an express railway between Miami and Orlando. The project is divided into two phases. In Phase I, which received private funding and is nearing completion, AAF intends to provide rail service between Miami and West Palm Beach. The Federal Railroad Administration ("FRA"), an arm of DOT, led a study of the potential environmental harms of Phase I, which resulted in a Finding of No Significant Impact. In Phase II, AAF aims to extend the rail line north from West Palm Beach to Cocoa, and then inland to Orlando. Phase II of the project runs through Indian River and Martin Counties, which are located along the east coast of Florida just north of Palm Beach County.

To fund Phase II, AAF applied for a $1.6 billion loan through the Railroad Rehabilitation and Improvement Financing program ("RRIF"). RRIF is administered by the FRA, and the loans it provides are expressly subject to NEPA requirements. See 49 C.F.R. § 260.5. Under NEPA, a federal agency is required to prepare an Environmental Impact Statement ("EIS") and a Record of Decision before taking "major Federal action[ ] significantly affecting the quality of the human environment." 42 U.S.C. § 4332(2)(C). FRA issued a final EIS in August 2015 but has not issued a Record of Decision or a decision on AAF's loan application.

While its application for a RRIF loan was pending, AAF also requested that DOT exempt from federal taxes $1.75 billion in PABs to finance the remainder of the project, spread over both phases. PABs are bonds issued by state or local government agencies to finance projects of public utility. By statute, DOT may designate up to $1.5 billion in PABs as tax-exempt nationwide in order to encourage private development of transportation projects. See 42 U.S.C. § 142(m). DOT provisionally authorized the requested $1.75 billion PAB allocation in December 2014. Indian River Cty., 201 F.Supp.3d at 6 (citing Reininger Decl. Ex. F, Letter from Peter M. Rogoff, Under Secretary of Transportation, to AAF President Michael Reininger).

Indian River County and Martin County filed separate suits against DOT, alleging it improperly authorized the PAB allocation prior to the completion of FRA's then-ongoing NEPA review for Phase II. See Amend. Compl., Indian River Cty. v. Rogoff, 15–cv–460 (D.D.C. May 4, 2015); Compl., Martin Cty. v. Dep't of Transp., 15–cv–632 (D.D.C. Apr. 27, 2015). The counties also allege that DOT violated Section 106 of the National Historic Preservation Act ("NHPA") and Section 4(f) of the Department of Transportation Act ("DOTA"), both of which set forth additional requirements for projects that are subject to federal control or approval. See Compl., Indian River Cty., 15–cv–460, ¶ 6. The counties seek declaratory relief finding the 2014 allocation to be unlawful, as well as injunctive relief vacating the 2014 allocation and blocking DOT from issuing any additional PABs to fund Phase II without first complying with the relevant environmental statutes. Id. at 44–45. While the cases have not been joined, the parties noticed them as related and they have proceeded on parallel tracks. AAF subsequently intervened as a defendant in both cases. The Court denied Plaintiffs' motions for a preliminary injunction in May 2015.

In August 2016, the Court denied Defendants' motions to dismiss Plaintiffs' NEPA, NHPA, and DOTA claims. In doing so, it held that DOT's PAB allocation for the AAF project qualified as major federal action, thus triggering the requirements of NEPA, NHPA, and DOTA. See Indian River Cty., 201 F.Supp.3d at 20. Several months later, the counties moved for summary judgment, The Court stayed summary judgment briefing, however, after Defendants informed the Court that AAF had asked DOT to withdraw the 2014 PAB allocation and replace it with a new, smaller allocation that would only be used to fund Phase I. See DOT's Mem. Supp. Mot. to Dismiss ("DOT's MTD"). On November 22, 2016, DOT withdrew the 2014 allocation and granted AAF a new PAB allocation of $600 million. A week later, Defendants moved to dismiss, arguing that both cases are now moot.

II. Legal Standard

A. Motions, to Dismiss under Rule 12(b)(1)

A party may move under Federal Rule of Civil Procedure 12(b)(1) to dismiss an action for lack of subject-matter jurisdiction. Fed. R. Civ. P. 12(b)(1). Like a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), the Court must "treat the complaint's factual allegations as true and afford the plaintiff the benefit of all inferences that can be derived from the facts alleged." Jeong Seon Han v. Lynch, 223 F.Supp.3d 95, 102, 2016 WL 7209628, *4 (D.D.C. Dec. 12, 2016) (internal quotation marks omitted). But because the Court has an "affirmative obligation to ensure that it is acting within the scope of its jurisdictional authority," Grand Lodge of Fraternal Order of Polic e v. Ashcroft, 185 F.Supp.2d 9, 13 (D.D.C 2001), the "[p]laintiff[s'] factual allegations in the complaint ... will bear closer scrutiny in resolving a 12(b)(1) motion than in resolving a 12(b)(6) motion," Delta Air Lines, Inc. v. Export–Import Bank of United States, 85 F.Supp.3d 250, 259 (D.D.C. 2015) (quoting 5A Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1350 (2d ed. 1987) ). Moreover, "unlike with a motion to dismiss under Rule 12(b)(6), the Court ‘may consider materials outside the pleadings in deciding whether to grant a motion to dismiss for lack of jurisdiction.’ " Delta Air Lines, 85 F.Supp.3d at 259 (quoting Jerome Stevens Pharms., Inc. v. FDA, 402 F.3d 1249, 1253–1254 (D.C. Cir. 2005) ).

B. Mootness

A motion to dismiss for mootness is properly brought under Rule 12(b)(1) because mootness itself deprives the court of jurisdiction. See DL v. District of Columbia, 187 F.Supp.3d 1, 5 (D.D.C. 2016) (internal citations omitted). Federal courts lack jurisdiction to decide moot cases "because their constitutional authority extends only to actual cases or controversies." Conservation Force. Inc. v. Jewell, 733 F.3d 1200, 1204 (D.C. Cir. 2013) (quoting Iron Arrow Honor Soc'y v. Heckler, 464 U.S. 67, 70, 104 S.Ct. 373, 78 L.Ed.2d 58 (1983) ); see also Worth v. Jackson, 451 F.3d 854, 855 (D.C. Cir. 2006) ("Three inter-related judicial doctrines—standing, mootness, and ripeness—ensure that federal courts assert jurisdiction only over ‘Cases' and ‘Controversies' ") (citing U.S. Const. art. III, § 2).

A case becomes moot "when the issues presented are no longer live or the parties lack a legally cognizable interest in the outcome." Larsen v. U.S. Navy, 525 F.3d 1, 3–4 (D.C. Cir. 2008) (quoting Cty. of Los Angeles v. Davis, 440 U.S. 625, 631, 99 S.Ct. 1379, 59 L.Ed.2d 642 (1979) ). A party may lack a legally cognizable interest in the outcome "when, among other things, the court can provide no effective remedy because a party has already obtained all the relief it has sought," Jewell, 733 F.3d at 1204 (internal quotation marks omitted), or "when intervening events make it impossible to grant the prevailing party effective relief." Lemon v. Ge r en, 514 F.3d 1312, 1315 (D.C. Cir. 2008) ; see also Spencer v. Kem n a, 523 U.S. 1,18, 118 S.Ct. 978, 140 L.Ed.2d 43 (1998) (noting that a case is moot when "there is nothing for [the court] to remedy, even if [it] were disposed to do so"); Columbian Rope Co. v. West, 142 F.3d 1313, 1316 (D.C. Cir. 1998) (holding that a case is moot "if events have so transpired that the decision will neither presently affect the parties' rights nor have a more than-speculative chance of affecting them in the future") (internal quotation marks omitted).

A defendant cannot, however, "automatically moot a case simply by ending its unlawful conduct once sued." Already, LLC v. Nike, Inc., 568 U.S. 85, 133 S.Ct. 721, 727, 184...