Nat'l Railroad Passenger Corp. v. Ry. Express, LLC, CIVIL NO.: WDQ-08-1501

• Decision Date: 30 November 2011
• Docket Number: CIVIL NO.: WDQ-08-1501
• Parties: NATIONAL RAILROAD PASSENGER CORPORATION (AMTRAK), Plaintiff, v. RAILWAY EXPRESS, LLC, Defendant.
• Court: U.S. District Court — District of Maryland

NATIONAL RAILROAD PASSENGER CORPORATION (AMTRAK), Plaintiff,

v.RAILWAY EXPRESS, LLC, Defendant.

CIVIL NO.: WDQ-08-1501

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND, NORTHERN DIVISION

Dated: November 30, 2011

MEMORANDUM OPINION

National Railroad Passenger Corporation ("Amtrak") sued Railway Express, LLC for a declaratory judgment and injunctive relief. For the following reasons, Amtrak's motion for summary judgment, and Railway Express's cross-motion for summary judgment, will be granted in part and denied in part.¹

I. Background²

Amtrak sued Railway Express over its claimed rights in a subsurface area of land ("Parcel") near Baltimore's Penn Station.The Parcel is adjacent to Amtrak's railroad tracks, and beneath an apartment and retail building, now owned by Railway Express. ECF No. 1 ¶1.

At the turn of the 20th century, the Pennsylvania Railroad Company and the Northern Central Railway Company (collectively "Railroads")--Amtrak's predecessors-in-interest—owned the Parcel and the real estate above it. ECF No. 96 Attach. 6 at 3. In 1928, United Post Offices Corporation ("United Post") agreed with the United States Postmaster General to lease the rights to "build, occupy, and use a building and the driveways above [the parcel]" from the Railroads. Id. United Post would build a Post Office and sub-let the building to the United States Postal Service. The Railroads agreed to include an option in the lease allowing the United States Post Office to purchase the property in fee simple "subject to easements running to The Pennsylvania Railroad for the use of [the] ground level for right of way." Id.

United Post executed the lease and sub-let the building to the United States Postal Service. ECF No. 96 Attach. 5 at 1. The lease included the option for the United States.³ Id. at 21.

In 1944, the United States Government filed a condemnation proceeding in the U.S. District Court for the District of Maryland to acquire the land. ECF No. 96 Attach. 13. In February 194 6, during the condemnation proceeding, the Government and the Railroads entered into an agreement stating their respective rights in the Parcel ("194 6 Agreement") . ECF No. 86 Attach. 7 [hereinafter "1946 Agmt."]. The 1946 Agreement gave the Railroads an easement for the subsurface area beneath the building for "railway purposes." 194 6 Agmt. at 3. It permitted the Government to use the subsurface area as long as it did not unreasonably interfere with the Railroads' use. Id. at 6. In April 1946, the parties filed an Amendment to the Declaration of Taking ("Amendment"), containing the terms of the 1946 Agreement. ECF No. 86 Attach. 8 [hereinafter "Amend."].⁴

Initially, railroad tracks for delivering and shipping mail ran throughout the Parcel, connecting loading docks under the Post Office to Baltimore's Pennsylvania Station. ECF No. 96 Attach. 5 at 4-5. The Railroads and Amtrak, have since used the Parcel for package, baggage, and casket loading and unloading, equipment and track maintenance and storage, railroad security, training, and employee parking.⁵ In addition, Amtrak maintains and uses one railroad track on the north side of the Parcel. ECF No. 86 Attach. 10 at 4.

By conveyances in 1955 and 1973, the Government transferred its interest in the building to Baltimore City. ECF No. 96 Attach. 16; Id. Attach. 67. The City used the site for the Housing Authority of Baltimore City ("HABC") . ECF No. 96 Attach. 16. HABC employees regularly parked on the parcel. ECF No. 96 Attach. 62 M18-9.

In 1976, under the Regional Rail Reorganization Act of 1973, the Government consolidated railroad companies, and conveyed their property rights, including those in the Parcel, to Amtrak. ECF No. 86 Attach. 2 at 5.

On November 26, 2001, Baltimore City, no longer using the building, issued a Request for Proposal ("RFP") to develop the former Post Office. ECF No. 96, Attach. 20. The RFP stated that the building and property were offered

in fee simple subject to the rights of the railroad to operate, maintain and replace its track located beneath the improvements, together with the rights of the railroad to an access road, parking lot and the right to attach its equipment to the supports and underside of the [building].

Id. at 2. Railway Express submitted a proposal and won the bid. ECF No. 96 Attach. 1 at 15.

On December 11, 2002, a Railway Express representative met with Bob Warfield and Tom Emge, Amtrak representatives, todiscuss Railway Express's plans for the Parcel.⁶ In his memorandum of the meeting, the Railway Express representative states that he told Emge and Warfield that Railway Express planned:

to pav[e a] grade level parking area below the perimeter edge of the street level platform surrounding the Railway Express building and creat[e] a new level of parking between the current grade level and the street level above. . . . Restricted access to the tracks could be done with a fence.⁷

ECF No. 96 Attach. 21 at 1-2. The representative also noted that Les Town, another Amtrak employee, "indicated that he believed that the Railroad had an[] easement on the property and they were not interested in changing that arrangement at this time." Id. at 2.

On January 7, 2003, Railway Express's attorney, Mark Dopkin, noted that during another meeting with Amtrak, Les Town, an Amtrak employee,

expressed a view that AMTRAK, as successor to The Pennsylvania Railroad Company, had the right to the use of the subsurface area under the existing building and that the proposed construction of a parking deck under the building would be in violation of the Railroad's rights.

ECF No. 103 Attach. 6. Dopkin, having read the 1946 Agreement, disagreed with Town's conclusion. Id. On April 14, 2003, Amtrak's Senior Associate General Counsel Jane Spangler-Weiss replied to Dopkin that Amtrak "disagree[s] with (Railway Express's] assertions as to Amtrak's rights," but Amtrak was "always interested in new development." ECF No. 103 Attach. 11. On April 21, 2003, Dopkin responded that "it is obvious that we disagree." ECF No. 96 Attach. 25. Dopkin added that he was pleased to hear that Amtrak saw "mutual[] benefit from further development" and he thought Amtrak's Les Town would "get back to [Railway Express representatives] with the number of parking spaces Amtrak would need and the minimum dimensions for access through the parking area to serve the main station." Id.

On June 30, 2005, Railway Express took title to the property. ECF No. 96 Attach. 26.

On March 13, 2007, Amtrak's John Diamonte met with Railway Express's Marty Azola to discuss the Parcel. ECF No. 96 Attach. 33. According to Railway Express's itinerary for the meeting, the parties discussed a "hotel enhancement" and sharing parking revenue. ECF No. 96 Attach. 30. Two days later, Diamonte emailed Azola, stating that he and another Amtrak employee would review Railway Express's plans for the Parcel, and that he expected that "any work along Amtrak rails will be deferred"until Amtrak reviewed and commented on the plans. Id.⁸ Railway Express states that on March 13, 2007, it sent Amtrak plans of the area that "clearly showed . . . [a] parking layout." ECF No. 103 Attach. 19 at 5 (Railway Express's answers to Amtrak's interrogatories).

On April 9, 2007, Amtrak's Jack Schweitzer told Railway Express's Tony Azola that he "didn't read anything in [an environmental remediation plan for paving the Parcel] that should be an issue with Amtrak." ECF No. 96 Attach. 35. On September 10, 2007, Tony Azola emailed Diamonte "a drawing showing [a] proposed fence and other modifications to the parking area" on the Parcel, and asked Diamonte to respond "so we can discuss these proposed changes" to the development plan. ECF No. 96 Attach. 38.

By December 28, 2007, Railway Express had paved the Parcel and built a security fence around the rail tracks (an area that remained unpaved to accommodate Amtrak), leaving an opening for a trash truck. ECF No. 96 Attach. 40. In an email to Amtrak about this progress, Marty Azola also proposed that Amtrak buy the land "on [Amtrak's] side of the new fence." Id.

Amtrak employees Walter Foura and Richard Catania testified that the fence around the tracks and use of the Parcel forcommercial parking will affect Amtrak's use of the Parcel. Catania testified that he will need to remove the fence for some maintenance and repair operations near the tracks. Catania Dep. 40:8-15. Foura testified that the fence prevents vehicles from accessing the tracks to conduct required testing, service a generator,⁹ and remove contaminated water from a fuel tank dam basin.¹⁰ ECF No. 96 Attach. 50 at 86:2-14, 87:1-15. In addition, he stated that Amtrak has been unable to move its large vehicles over the Parcel to the tracks because the fence gate is too narrow for large vehicles. Id. at 88:20-21, 89:1-6 (confined space equipment trailer), 90:15-21, 91:1-9 (baggage carts and casket transport). Amtrak has continued loading baggage and caskets through the Parcel, but it had to purchase smaller baggage carts to fit through the gate. Id. at 91:1-9.

Foura also testified that for track and train repairs, Amtrak needs to move "an extensive amount of maintenance equipment . . . into the [Parcel, and must] access the area in . . . a very limited time frame" to avoid shutting down all Amtrak operations. ECF No. 96 Attach. 50 at 80:2-11. Catania added that, for some repairs requiring construction, Amtrak brings"larger truck[s]" onto the Parcel, requiring clearance of parking spaces so that the truck fits in the Parcel and can store equipment. Catania Dep. 43:10-18. In an emergency on the tracks--such as a derailed train or a train fire—the fire department accesses tracks through the Parcel and needs an immediate path across the Parcel. Id. at 49:5-19.

In addition to paving the Parcel and fencing off the remaining track, Railway Express plans to create a second level of parking by building a "mezzanine" above the Parcel. ECF No. 96 Attach. 23.¹...