WASHINGTON — A lawsuit challenging the legality of the Dulles Rail project's toll-powered funding mechanism will have to head to yet another venue after the federal court weighing the case decided it did not have jurisdiction to rule on the matter.

The U.S. Court of Appeals for the Federal Circuit ruled Wednesday that the Metropolitan Washington Airports Authority, which collects revenue on the Dulles Toll Road to back the bonds financing the rail project, is not a federal instrumentality.

Two Virginians, John Corr and John Grigsby, filed the lawsuit against MWAA in April 2011. Their attorney, Robert Cynkar of Cuneo, Gilbert & LaDuca, LLP, argued that the tolls constitute an illegal tax levied against drivers who may not even use the train they pay for.

After a judge in the U.S. District Court of the Eastern District of Virginia dismissed the suit in July 2011, Corr and Grigsby appealed to the Federal Circuit. Cynkar said he weighed whether the appeal should go to the Federal Circuit, which has jurisdiction over suits against federal bodies, or the 4th Circuit, which normally handles cases out of the Eastern district of Virginia. The decision hinged on figuring out whether MWAA, created by Congress in the Metropolitan Washington Airports Act of 1986, is a federal instrumentality or not.

"We chose federal instrumentality," Cynkar said. "Our trial judge thought it was more like a federal instrumentality."

MWAA filed a motion claiming that the court lacked jurisdiction and requesting that the appeal be either dismissed or transferred to the U.S. Court of Appeals for the 4th Circuit in Richmond. The court rejected that request and both parties argued their cases before the three-judge panel in October.

But the Federal Circuit judges ended up agreeing with the argument, presented by Stuart Raphael of Hunton & Williams, LLP, who argued for MWAA, that the authority is not a part of the federal government.

"It is true that MWAA was created by Congress through passage of the Airports Act," the court's decision states. "The Airports Act, however, represents congressional approval of Virginia's and the District of Columbia's compact-legislation authorizing the establishment of MWAA rather than the creation of the authority in the first instance."

MWAA is overseen by a board appointed by the governors of Virginia and Maryland, the mayor of the District of Columbia, as well as the federal government. It has operational control over Dulles International and Reagan International Airports, as well as the toll road.

"Thus," the court decision continues, "though it may partly owe its existence to an act of Congress, MWAA was in large part created by, and exercises the authority of, Virginia and the District of Columbia."

Raphael told the judges in October that as a private attorney, his very presence as MWAA counsel proved that MWAA was not a federal agency.

The court was also not convinced by the arguments that MWAA exists to serve federal agencies and is under federal control.

"Petitioners do not allege any facts that would allow this court to determine that federal officials handle and control MWAA's operations," the court ruled.

Cynkar said he was disappointed with the ruling, but knew that this result was a strong possibility.

"This has been an issue all along, because of the strange nature of MWAA," he said. "Wish they had ruled differently, but it's just one of those threshold issues."

The case will now head to the U.S. Court of Appeals for the 4th Circuit, where MWAA counsel had argued it belonged all along. Cynkar said he is not sure what the timetable will be moving forward.

"I've practiced law for over 30 years, and I've never been in a situation like this," he said.

An MWAA spokesman said the authority had no immediate comment on the court's decision.

Cynkar said Corr's and Grigsby's legal team has not yet had a chance to confer about the ruling, but that he is ready to take the case forward.

"The court said 'go to Richmond,' so that's where we're going," he said.

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