UNITED STATES COURT OF APPEALS FOR THE D.C. CIRCUIT


CITY PHIL

v.

CON RAIL CORP


97-7221a

D.C. Cir. 2000


*	*	*


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) 


---------


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 en- tered 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 Commis- sion 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
Pennsylva- nia, 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


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 Na- tional Railroad
Passenger Corporation ("Amtrak") on the  other, over who owns a


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 now- defunct Pennsylvania Railroad and its successor, the also 
defunct Penn Central Transportation Company ("Penn Cen- tral") 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 appurte- nances 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 


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 struc- ture 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 Penn-
sylvania Railroad1 signed a document accepting these require- ments 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


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,
financially- viable 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




__________

n 1 The Pennsylvania Railroad, through merger, became the Penn  Central
Transportation Company.


The Rail Act created the United States Railway Associa- tion, 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 prop- erties 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). Proper- ties
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 transporta- tion service," 45 U.S.C. s
702(14), were conveyed to Conrail,  and the property related to
passenger rail service was recon- veyed 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 former- ly


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, con- veyed the real property free and clear of liens and
encum- brances. 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 "main- tenance 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 


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
simul- taneous 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 contractu- al 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
substan- tially 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


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 authorita- tive 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 ques- tion.


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 long- established 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 


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 gov- erning 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.




__________

n 2 On June 19, 2000, the Supreme Court of Pennsylvania issued an 
order denying the City's application for reconsideration.