Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-97-07222/USCOURTS-caDC-97-07222-0/pdf.json

Parties Involved:
City of Philadelphia
Appellee
Consolidated Rail Corporation
Appellant
National Railroad Passenger Corporation
Appellee

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued January 11, 1999 Decided July 7, 2000

No. 97-7221

City of Philadelphia,

Appellee

v.

Consolidated Rail Corporation,

Appellee

National Railroad Passenger Corporation,

Appellant

Consolidated with

97-7222, 97-7223

Appeals from the United States District Court

for the District of Columbia

(No. 96rr00001)

(No. 96rr00003)

---------

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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. s 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

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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 nowdefunct 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. s 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. s 719(b)(2)

(Supp. III 1997). We have jurisdiction of this appeal under

45 U.S.C. s 719(e) (Supp. III 1997) and 28 U.S.C. ss 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

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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 Railroad1 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. s 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, financiallyviable 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).

__________

1 The Pennsylvania Railroad, through merger, became the Penn

Central Transportation Company.

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The Rail Act created the United States Railway Association, see 45 U.S.C. s 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. s 716. The Rail Act also created

Conrail, see 45 U.S.C. s 741(a), and mandated that rail properties designated in the FSP be conveyed to Conrail, see 45

U.S.C. s 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. s 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. s 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 conveyed by Bills of Sale and Assignment,

which specifically excluded contracts for the "rehabilitation

and modernization" of property without complete financial

remuneration of the new railroads. Contracts for the "maintenance and security" of property not passed to Conrail also

were expressly not conveyed.

The railroads denied any ownership interest in the bridge,

and opposed attempts by the City to have them maintain the

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bridge. The bridge continued to deteriorate to the point that

it was closed to vehicular traffic in 1993, and only pedestrians

were allowed across. The City notified the PUC of the

deteriorated condition of the bridge, and the PUC approved

the closure. (To the extent not preempted by federal law, the

PUC has regulatory authority over bridges crossing railroad

rights of way under Pennsylvania law, and may permit

changes or construction, and determine who must pay for

maintenance.) The PUC began an investigation to determine

who was responsible for the repair and future maintenance of

the bridge. The PUC directed Amtrak to create a plan for

repairing the bridge, and ordered the City to pay the initial

costs of repair.

The current case was initiated by the City in the Special

Court asking for a declaration that the responsibility to

maintain the 41st Street bridge had been conveyed to Amtrak

and Conrail by the Special Court's order transferring Penn

Central's property. Conrail then brought a related action

against the PUC, seeking to bind it to any order issued by the

Special Court. The two cases were consolidated. On simultaneous motions for summary judgment, the Special Court

held that the real property under the 41st Street bridge and

the bridge itself had been owned by Penn Central and had

been conveyed to Conrail and Amtrak, and that the contractual obligation to maintain the bridge under the 1927 agreement

had also been conveyed. The Special Court further held that

while Conrail and Amtrak were not responsible for any

deterioration that took place prior to April 1, 1976 under the

Rail Act's "fresh start policy," the deterioration had substantially occurred after that date. It held Conrail and Amtrak

responsible for all of the costs associated with repair and

maintenance of the bridge, and apportioned two-thirds to

Amtrak and one-third to Conrail, according to the number of

rail lines each owned. The Court also stated that Amtrak's

obligation was not a tax or fee, but a contractual obligation.

It did not address Amtrak's defenses that the action under

the contract was barred by the statute of limitations or

discharged in the Penn Central bankruptcy proceeding.

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C. The Certification

Because this case presented a question that will likely rise

again in the context of litigation over the so-called "orphan

bridges" to which neither the railroads nor the municipalities

claim title, and because state law governing ownership of the

bridge is dispositive of the question of contractual allocation

of maintenance agreements, we concluded that an authoritative response to the question would assist in establishing

uniformity in future proceedings. We further concluded that

the precise effect of the ordinance contracts on questions of

bridge ownership is purely a question of state law. We

therefore petitioned the Supreme Court of Pennsylvania for

certification of the question of state law under 204 Pa. Code

s 29.451 (1999). The Pennsylvania Supreme Court helpfully

granted our petition, and has now decided the certified question.

Based on the undisputed facts, that court held that it "has

long been recognized as the law in Pennsylvania" that "where

a railroad company has constructed at its own expense a

bridge over its tracks at a street crossing, and the bridge is to

constitute part of a public highway and be maintained by the

municipality, title to the bridge rests in the municipality."

City of Philadelphia v. Consolidated Rail Corp., No. 29 M.D.

Miscellaneous Docket 1999, slip op. at 4 (Pa. Feb. 24, 2000)

(citing Pennsylvania R.R. v. Greensburg, J. & P. Street Ry.,

176 Pa. 559, 575, 35 A. 122, 129 (1896)). As further authority,

the Supreme Court cited North Pennsylvania Railroad Co. v.

Inland Traction Co., 205 Pa. 579, 587-89, 55 A. 774, 775-76

(1903), which held that a "railroad lacked standing to object to

proposed use by streetcars of a highway bridge that it

constructed over its right-of-way, inasmuch as the bridge

became part of the public highway, and the railroad thus had

no property interest that would be affected." Consolidated

Rail, slip op. at 4. The court further recognized as a longestablished principle "that a bridge carrying a public street is

deemed to be a part of the street, and, as such, it is owned by

the entity that owns the street." Id. (citing Heinlein v.

Allegheny County, 374 Pa. 496, 499, 98 A.2d 36, 38 (1953)).

As it is "undisputed that the City owns the public street that

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is supported by the 41st Street bridge," it has owned the

bridge since the completion of its reconstruction in 1929.2

Conclusion

The Pennsylvania Supreme Court having decided the governing question of state law that the City and not the

railroads owns the bridge, and the railroads having been

absolved of contractual liability by the bankruptcies and the

Reorganization Act, we reverse the decision of the District

Court granting summary judgment in favor of the City and

the PUC and remand the case for the entry of summary

judgment in favor of the railroads.

__________

2 On June 19, 2000, the Supreme Court of Pennsylvania issued an

order denying the City's application for reconsideration.

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