Wilbert Family Ltd. P'ship v. Dallas Area Rapid Transit
| Decision Date | 26 January 2012 |
| Docket Number | Civil Action No. 3:10-CV-2052-D |
| Parties | WILBERT FAMILY LIMITED PARTNERSHIP, et al., Plaintiffs, v. DALLAS AREA RAPID TRANSIT, et al., Defendants. |
| Court | U.S. District Court — Northern District of Texas |
In this action arising from the removal of railroad tracks and discontinuation of rail services by a public transportation agency, defendants' motion to dismiss under Fed. R. Civ. P. 12(b)(1) and 12(b)(6) presents the questions whether plaintiffs have standing to sue, whether their claims should be referred to the Surface Transportation Board ("STB") under the doctrine of primary jurisdiction, and whether, as to one of plaintiffs' claims, they have stated a claim on which relief can be granted. For the reasons that follow, the court denies the Rule 12(b)(1) motion, grants the Rule 12(b)(6) motion, and grants plaintiffs leave to replead.
Plaintiffs Wilbert Family Limited Partnership ("Wilbert") and Central Hardwoods, Inc. ("Central") sue defendants Dallas Area Rapid Transit and Regional Rail Right of Way Company (collectively, "DART") alleging violations of 49 U.S.C. § 11101 of the InterstateCommerce Commission Termination Act of 1995 ("ICCTA") and 49 C.F.R. pt. 24,1 and claims under 42 U.S.C. § 1983.2 Wilbert owns certain real property (the "Property").3 Formerly, there were heavy railroad main tracks adjacent to the Property and a heavy rail turnout and spur track on the Property. These heavy rail tracks, turnout, and spur were located on and permanently affixed to the land long before Wilbert acquired the Property in the 1960s. Wilbert considered the infrastructure indispensable to the use of the Property because the transportation advantages complemented the unique grandfathered zoning restrictions on the Property, boosting considerably the market value of the Property and improvements. Central leased the Property from Wilbert to operate its business of fabricating, planing, and delivering "lumber, plywoods, and architectural wood products." Am. Compl. ¶ 14. Central employed the competitive advantage of being linked to the rail infrastructure to realize unique economies in obtaining raw materials from sawmills and manufacturers throughout the world.
When DART began constructing its Green Line light rail system, it removed the heavy rail tracks, turnout, and spur. DART knew that Central was by far the heaviest user of rail service on the line and admitted to the Federal Transit Administration ("FTA") in its Final Environmental Impact Statement that plaintiffs would be adversely impacted by the elimination of rail service. DART was also aware of its obligations under 49 U.S.C. § 11101 to "provide transportation to shippers or receivers located on or adjacent to its railroad lines upon reasonable request." Id. at ¶ 22.
DART entered into settlement negotiations with plaintiffs beginning in 2002 regarding the loss of rail service. DART led plaintiffs to believe that it was dealing in good faith to arrange for comparable tracks to serve the location, to locate and underwrite a new comparable facility, or to compensate for the damage. At the time DART was discussing these options with plaintiffs, no one at DART questioned whether it was obligated to compensate plaintiffs. It was DART's understanding that it "had to come up with an option to continue service to them somehow," with the only question being in what manner. Id. at ¶ 21.
As the negotiations proceeded, however, DART came to realize that the costs of providing alternatives for plaintiffs would be greater than anticipated. It instituted, in the words of one DART consultant, a "de facto abandonment" in which it "danced around the issues of abandonment by dealing with customers so that no complaint actions c[a]me up." Id. at ¶ 23. According to plaintiffs, this meant that DART had no real intention to accommodate plaintiffs after it realized the true cost of providing alternatives, and thatDART continued negotiations with plaintiffs merely as a part of a stall-and-delay tactic in order to ignore its lawful obligation to provide fair compensation. Plaintiffs allege that, if DART had wanted to discontinue service to them, it was required under federal law to take certain procedural steps to effect the abandonment of the rail line and service provided to plaintiffs, such as obtaining authorization from the STB, but it failed to do so. Around November 2009, after seven years of negotiations, DART reneged its prior representations and informed plaintiffs that it did not have any legal obligation to provide compensation or relocation. The loss of track resulted in significant devaluation of the Property and lost customers and accounts for Central.
Each plaintiff alleges three claims against DART: first, a violation of § 11101 of the ICCTA, based on a failure to provide transportation and service without having been properly relieved of its statutory obligations; second, a violation of 49 C.F.R. pt. 24, by failing to comply with an FTA Record of Decision and associated federal laws and regulations requiring DART to address, minimize, and redress the costly impact on plaintiffs due to the cessation of rail service;4 and, third, violations of the Fifth and Fourteenth Amendments, remediable under 42 U.S.C. § 1983, on the ground that DART denied their property rights and damaged their real property interests without due process.
DART moves to dismiss under Rule 12(b)(1) and Rule 12(b)(6). It maintains that, under the ICCTA, the STB has jurisdiction over railroad transportation by rail carriers as partof the interstate rail network, that the ICCTA provides an administrative process for complaints of violations of the ICCTA, and that complaints must be filed with the STB. DART therefore posits that this action must be dismissed because the STB has primary jurisdiction over plaintiffs' claims of violations of § 11101, and plaintiffs failed to refer their claims to the STB. Alternatively, DART contends the case should be stayed pending the outcome of the STB's decision. DART also maintains that plaintiffs lack standing to sue for violations of § 11101 because they only shipped lumber or wood products, which are commodities that are exempt from regulations under the ICCTA. Plaintiffs oppose the motion, asserting that the doctrine of primary jurisdiction should not be invoked and that they have standing to sue.
The court considers first DART's Rule 12(b)(1) motion.
"Federal courts are courts of limited jurisdiction, and absent jurisdiction conferred by statute, lack the power to adjudicate claims." Stockman v. Fed. Election Comm'n, 138 F.3d 144, 151 (5th Cir. 1998). "It is incumbent on all federal courts to dismiss an action whenever it appears that subject matter jurisdiction is lacking." Id. The plaintiff has the burden of proving subject matter jurisdiction by a preponderance of the evidence. New Orleans & Gulf Coast Ry. Co. v. Barrois, 533 F.3d 321, 327 (5th Cir. 2008).
DART presents only two arguments in support of its motion to dismiss: the doctrine of primary jurisdiction and lack of standing. Neither argument, however, challenges the court's subject matter jurisdiction.
"[S]tanding is an essential and unchanging part of the case-or-controversy requirement of Article III." Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). To establish standing, a plaintiff must meet both constitutional and prudential requirements. See, e.g., Procter & Gamble Co. v. Amway Corp., 242 F.3d 539, 560 (5th Cir. 2001). Of the two, courts have only treated constitutional standing as a Rule 12(b)(1) issue pertaining to subject matterjurisdiction. See, e.g., Harold H. Huggins Realty, Inc. v. FNC, Inc., 634 F.3d 787, 795 n.2 (5th Cir. 2011) (citing Blanchard 1986, Ltd. v. Park Plantation, LLC, 553 F.3d 405, 409 (5th Cir. 2008)). "[A] dismissal for lack of prudential or statutory standing is properly granted under Rule 12(b)(6)." Id.
Constitutional standing requires that a litigant allege three elements: (1) injury in fact that is concrete and actual or imminent, not hypothetical; (2) a fairly traceable causal link between the injury and the defendant's actions; and (3) the likelihood of redressability. See, e.g., Little v. KPMG LLP, 575 F.3d 533, 540 (5th Cir. 2009). DART does not raise any arguments specific to plaintiffs' constitutional standing, and the court's independent evaluation5 results in the conclusion that plaintiffs have clearly satisfied the constitutional requirements of standing. They have alleged economic injuries to real property and to business that have already occurred as a direct result of DART's discontinuation of railservice, and these injuries appear to be redressable by appropriate remedy.6 DART does not dispute the fact of injury, causation, and redressability in itself; instead, it challenges standing on the basis that the products at issue are exempt from the requirements of the ICCTA. But "[t]his question of whether or not a particular cause of action authorizes an injured plaintiff to sue is a merits question, affecting statutory standing, not a jurisdictional question, affecting constitutional standing." See Blanchard 1986, 553 F.3d at 409.
"[T]he doctrine of primary jurisdiction 'is not related to the subject matter jurisdiction of the district court over the underlying action.'" Elam v. Kan. City S. Ry. Co., 635 F.3d 796, 809 (5th Cir. 2011) (alteration omitted) (quoting S. New Eng. Tel. Co. v. Global NAPs Inc., 624 F.3d 123, 136 (2d Cir. 2010)); see also Reiter v. Cooper, 507 U.S. 258, 268 (1993) (). Instead, application of the primary jurisdiction doctrine "presumes original federal subject matter jurisdiction." Elam, 635 F.3d at 809 (emphasis omitted).
Therefore, DART is not entitled to dismissal of this lawsuit under Rule 12(b)(1) based on lack of prudential or statutory standing or under...
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