Florida county reverses course, will appeal Virgin Trains ruling

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Investors in Florida’s privately owned passenger train project aren’t out of the legal woods yet.

Indian River County, reversing course from a previous decision, on Feb. 18 accepted a private, nonprofit group’s offer to fund the cost of filing a petition to the U.S. Supreme Court seeking to overturn the county’s unsuccessful appeal against the U.S. Department of Transportation and Brightline, also known as Virgin Trains.

A Brightline train in Miami in 2018. The passenger train operator, rebranding as Virgin Trains USA, faces legal opposition further up the coast.

Commissioners voted 5-0 to give the Florida Alliance For Safe Trains until the end of February to raise $200,000 estimated cost of filing for a writ of certiorari. In January, the board voted 4-1 not to file a petition after receiving legal advice that it had little chance of being successful.

The deadline for filing for a writ is March 19.

“To all those people who think it was a done deal,” said Commissioner Bob Solari, “this reaffirms it was never a done deal.”

The litigation is challenging $1.15 billion of tax-exempt private activity bonds authorized by USDOT and issued by the Florida Development Finance Corp. to fund the project’s construction between West Palm Beach and Orlando — its second phase of development through Indian River and Martin counties, where many residents oppose the higher speed passenger train.

In December, a three-judge panel of the United States Court of Appeals for the District of Columbia ruled that USDOT properly determined that Brightline/Virgin Trains qualified to use federal PABs to finance its project, a determination that struck down Indian River County’s case.

Since commissioners decided against an appeal to the Supreme Court, “private citizens have been raising money to file a petition for review by the United States Supreme Court,” County Attorney Dylan Reingold said in a Feb. 11 memo to the board.

The private citizens, many of whom are members of the Florida Alliance For Safe Trains and Guardians of Martin County, asked the commission to hire Paul, Weiss, Rifkind, Wharton & Garrison LLP partner Kannon K. Shanmugam to file the petition. Commissioners agreed.

If the Supreme Court approves the writ, the county will pay the estimated $400,000 to have Shanmugam to brief and argue the case.

In addition to the federal litigation, Indian River County is also pursuing a lawsuit in Florida state court asking a circuit judge to determine who is liable for funding “substantial” railroad crossing improvements needed for the private passenger train.

Duval County Judge Katie Dearing is being asked to determine if the train can benefit from the county’s 31 at-grade highway crossing agreements with Florida East Coast Railway, which granted the passenger train owners an easement to use its tracks. FECR is owned by Grupo Mexico.

In addition to the two tranches of PABs for phase 2 of the train project, the USDOT has also authorized $600 million to finance the first phase of construction from Miami to West Palm Beach. The bonds were issued in 2017, refinanced in 2019, and are not part of Indian River County’s litigation.

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Transportation industry Infrastructure Lawsuits Florida Development Finance Corp. DOT Florida Washington DC
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