New legal challenges confront Florida passenger train project

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After winning a federal lawsuit last year, the private owners of the Brightline passenger train project in Florida start 2019 facing two new legal challenges.

Indian River County on Monday filed a notice in federal court that it planned to appeal the lawsuit it lost in December. It challenged $1.15 billion of private activity bonds allocated to the project as well as federal reviews under the National Environmental Policy Act conducted by the Federal Railroad Administration.

County Attorney Dylan Reingold said a notice of appeal was filed to preserve the county’s appellate rights.

“We believe that the county has meritorious claims on appeal relating to the illegality of the private activity bonds and the insufficient NEPA analysis performed by the Federal Railroad Administration,” he said.

Before briefs are filed in the case, Reingold said he plans to discuss the appeal with county commissioners in February. If the board votes to pursue the appeal it will be heard by the U.S. Court of Appeals for the District of Columbia Circuit.

On Wednesday, the county filed a new complaint in circuit court asking a judge to determine who is liable for funding railroad crossing improvements needed for the train.

A Brightline spokeswoman said Thursday that the company doesn’t comment on active litigation.

On Dec. 24, Federal District Judge Christopher Cooper threw out Indian River County’s suit claiming the U.S. Department of Transportation improperly approved the bonds for Brightline. He granted requests for summary judgment sought by the USDOT and Brightline, which will be rebranded as Virgin Trains USA this year.

“Agency action is rarely perfect. But NEPA does not demand perfection,” Cooper said in his ruling. “Instead, it requires that an agency take a ‘hard look’ at the reasonably foreseeable impacts of a proposed major federal action.”

Cooper said the extensive federal environmental impact statement, appendices, comment responses, and agency decision to approve the project demonstrated that requirements of the law were met.

The new lawsuit filed Wednesday in the Nineteenth Judicial Circuit for Indian River County will determine if the passenger train company’s private owners can benefit from the county’s 31 at-grade highway crossing agreements with Florida East Coast Railway, which granted Brightline an easement to use its tracks.

FECR is owned by Grupo Mexico.

At issue in the complaint is who will pay for “substantial” safety improvements and upgrades to the tracks to support Brightline’s 32 daily trains that will run at speeds up to 110 mph through Indian River County, the 13-page suit said.

The county hasn’t agreed to make any changes in its crossing agreements with FECR that would allow Brightline to use the tracks. Both Brightline and FECR are named in the suit.

“Through public statements made by both Brightline and Florida East Coast Railway, it has become clear that these two companies expect for the taxpayers of Indian River County to pay for the installation and maintenance of Brightline’s highway-railroad crossing safety improvements forever,” Reingold said Wednesday. “This is unacceptable.”

The costs, Reingold said, are why the county has refused to sign amendments to the existing crossing agreements with FECR to allow Brightline be a third-party beneficiary to the agreements.

The two-count suit for declaratory relief is requesting that the court find that neither Brightline nor FECR can charge Indian River County for its construction and maintenance costs for the passenger train project. The county is seeking relief valued in excess of $10 million.

In December, USDOT gave Brightline a six-month extension to issue the $1.15 billion of private activity bonds. The agency had set a deadline of Dec. 31.

The bonds will be issued on behalf of the company by the Florida Development Finance Corp., as the conduit issuer. Proceeds will finance portions of Brightline's second phase from West Palm Beach to Orlando.

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Lawsuits Transportation industry Private activity bonds Infrastructure Florida Development Finance Corp. DOT Florida