UNI'I`EI) STATES DISTR}CT COURT
FOR THE DISTRIC'I` OF C()LUMBIA
er)lAN RlvER COUNTY, §_;__@_L,
Plaintiffs,
V.
PETER M. ROGOFF, et_al.,
Defendants.
MARTIN COUNTY, FLORIDA, et al.,
Plaintit`fs,
v.
DEPARTM ENT OF TRANSPORTATION,
et al.,
Defendants.
Case No. l : l 5~cv-00460 {CRC)
Case No. l:l§-cv-00632 (CRC)
MEMORANI)UM OPINION
Two Florida counties have challenged a 2014 decision by the United States Department
of Transportation (“DOT”) to allocate up to 31.75 billion in non-taxable private activity bonds, _
or “PABS,” to help finance a railroad project along the state’s eastern coastline DOT, the
counties allege, failed to comply with the requirements of the National Environmental Policy Act
(“NEPA”) and other environmental statutes before allocating the PABs. After this Court held
that the counties had standing and had Stated claims under these statutes, the project’s sponsor-
AAF Holdings, lnc. (“AAF”)-applied for a new allocation ot`PABs to finance a portion ot`the
project that does not attect the coanties, and requested that DOT withdraw the previously
challenged allocation DOT did so. Defendants now move to dismiss these cases as moot For
the reasons that follow, the Court will grant the motions
I. Background
The history of` this railroad project and the litigation it sparked are discussed extensively
in prior opinions by the Couit. See lndian kiver Ctv. v. Rogoff`, 20l F. Supp. 3d 1, 4 (D.D_C.
2016) (granting in part and denying in part .Defendants’ initial motions to dismiss); lndian River
Cty. v. Rogof`f`, 110 F`. Supp. 3d 59, 63~66 (D.D.C. 2015) (denying the counties’ motions for a
preliminary injunction), Wliat follows is a brief` overview of the most relevant facts that bear on
Def`endants’ present motions to dismiss
AAF seeks to construct and operate an express railway between l\/liami and Orlando. The
project is divided into two phases fn Phase l, which received private funding and is nearing
completion, AAF intends to provide rail service between Miami and West Palm Beach. The
F ederal Railroad Administration (“FRA”), an arm of`DOT, led a study of` the potential
environmental harms of Phase I, which resulted in a Finding of No Signil'icant Irnpact. l`n Phase
11, AAF aims to extend the rail line north from West Palm Beach to Cocoa, and then inland to
Orlando. Phase 11 of the project runs through lndian River and Martin Counties, which are
located along the east coast of Florida just north of`Palm Beach County.
'I`o fund Phase l`l, AAF applied for a $1.6 billion loan through the Railroad Rehabilitation
and lmprovernent Financing program (“RRIF”). RRIF is administered by the FRA, and the loans
it provides are expressly subject to NEPA requirements §ee 49 C_F.R. § 260.5, Under NEPA, a
federal agency is required to prepare an Environmental Impact Statement (“EIS”) and a Record
of`Decision before taking “rnajor Federal action[ ] significantly affecting the quality of the
human environment ” 42 U.S.C. § 4332(2)(€). FRA issued a final ElS in August 2015 but has
not issued a Record of`Decision or a decision on AAF’s loan application
While its application for a RRlF loan was pending, AAF also requested that DOT exempt
from federal taxes $l.75 billion in PABs to finance the remainder of the proj ect, spread over both
phases PABs are bonds issued by state or local government agencies to finance projects of
public utility By statute, DOT may designate up to $l 5 billion in PABS as tax-exempt
nationwide in order to encourage private development of transportation projects _S__ee 42 U.S.C.
§ l42(m). DOT provisionally authorized the requested $1.75 billion PAB allocation in
December 2014. lndian River Cg., 201 F. Supp. 3d at 6 (citing Reininger llecl. Ex. F, Letter
from `Peter M. Rogof`f, Under Secretary of`Transportation, to AAF President Michael Reininger).
lndian River County and l\/lartin County filed separate suits against DOT, alleging it
improperly authorized the PAB allocation prior to the completion of FRA’S then-ongoing NEPA
review for Phase II. g Amend. Conipl., lndian River Cty. v. Rogol"l", lS~cv~460 (D.D.C. l\/Iay
4, 2015); Compl., Martin Ctv. v. l)ep’t of Transr)._ l§-cv-632 (D_D.C. Apr. 27, 201 5). 'I`he
counties also allege that DOT violated Section 106 of the National Historic Preservation Act
(“NHPA”) and Section 4(f`) of the Department of Transportation Act (“DOTA”), both of which
set forth additional requirements for projects that are subject to federal control or approval §
Compl., lndian River C‘gg_, 15-cv-460, ll 6. The counties seek declaratory relief finding the 2014
allocation to be unlawful, as well as injunctive relief vacating the 20l4 allocation and blocking
DOT from issuing any additional PABS to fund Phase ll Without first complying with the
relevant environmental statutes lg_. at 44~45. While the cases have not been joined, the parties
noticed them as related and they have proceeded on parallel tracks AAF subsequently
intervened as a defendant in both cases The Court denied .Plaintiffs’ motions for a preliminary
injunction in May 2015_
1n August 2016, the Couit denied Def`endants’ motions to dismiss Plaintiffs’ NEPA,
NHPA, and DOTA claims In doing so, it held that DOT’s PAB allocation for the AAF project
qualified as major federal action, thus triggering the requirements of NEPA, NHPA, and DO'I`A.
g lndian River Cty., 201 F. Supp. 3d at 20, Several months later, the counties moved for
summary judgment The Court stayed summary judgment briefing, however, after Defendants
informed the Court that AAF had asked DOT to withdraw the 2014 PAB allocation and replace it
with a new, smaller allocation that would only be used to fund Phase 1. g DOT’s Mem. Supp.
Mot. to Dismiss (“DOT’s MTD”). On November 22, 2016, DOT withdrew the 2014 allocation
and granted AAF a new PAB allocation of $600 million A week later, Defendants moved to
dismiss, arguing that both cases are now moot
II. Legal Standard
A. l\/lotions to Dismiss under Rule 12( b)( l)
A party may move under Federal Rule of Civil Procedure 12(b)(1) to dismiss an action
for lack of subject-matter jurisdiction Fed_ R_ Civ. P. l?.(b)(l). Like a motion to dismiss for
failure to state a claim under Federal Rulc of`Civil Procedure 12(b)(6), the Court must “treat the
complaint’s factual allegations as true and afford the plaintiff the benefit of all inferences that
can be derived from the facts alleged.” leong Seon Han v. Lvnch. 2016 WL 7209628, *4
(D.D.C. Dec. 12, 20l6) (internal quotation marks omitted). But because the Court has an
“affirmative obligation to ensure that it is acting within the scope of its jurisdictional authority,”
Grand Lodge ofFraternal Order of Policv v. Ashcrof`t, 185 F. Supp. 2d 9, 13 (D.D.C. 2001), the
“[p]laintiff`[s’} factual allegations in the complaint . . . will bear closer scrutiny in resolving a
12(b)(l) motion than in resolving a 12(b)(6) motion,” Delta Air Lines. lnc. v_ ExDort-Import
Banl< of United States, 85 F. Supp. 3d 250, 259 (D.D.C. 2015) (quoting SA Charles A. Wright &
Arthur R_ Miller, Federal Practice and Procedure § 1350 (2d ed. 1987)). Moreover, “unlike with
a motion to dismiss under Rule 12(b)(6), the Court ‘may consider materials outside the pleadings
in deciding whether to grant a motion to dismiss for lack ofjurisdiction. Delta Air Lines, 85 F.
Suppi 3d at 259 (quoting Jerorne Stevens Pharms.~ Inc. v. FDA, 402 F.3d 1249, 1253-1254 (D.C.
Cir_ 2005)).
B. Mootness
A motion to dismiss for mootness is properly brought under Rule l2(l))(l) because
mootness itself deprives the court of jurisdiction _S_e§ DL v. Distn`ct ofColumbia, 187 F. Supp.
3d l, 5 (D_D_C_ 2016) (internal citations omitted). Federal courts lack jurisdiction to decide
moot cases “because their constitutional authority extends only to actual cases or controversies_”
Conservation Force1 lnc. v. Jewell, 733 F.3d 1200, 1204 (D.C_ Cir_ 2013) (quoting Iron Arrow
H`onor Soc’y v. Hecl