Case 1:15-cv CRC Document 88 Filed 11/01/16 Page 1 of 9 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA ) ) ) ) ) ) ) ) ) ) ) )

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1 Case 1:15-cv CRC Document 88 Filed 11/01/16 Page 1 of 9 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA MARTIN COUNTY, FLORIDA, et al., vs. Plaintiffs, DEPARTMENT OF TRANSPORTATION, et al., Defendants Case No. 1:15-cv (CRC PLAINTIFFS OPPOSITION TO DEFENDANTS REQUESTS FOR EXTENSIONS OF TIME TO RESPOND TO PLAINTIFFS MOTION FOR SUMMARY JUDGMENT MCDERMOTT WILL & EMERY LLP Stephen M. Ryan (D.C. Bar No Amandeep S. Sidhu (D.C. Bar No Sam C. Neel (D.C. Bar No. No The McDermott Building 500 North Capitol Street NW Washington, DC Telephone: sryan@mwe.com asidhu@mwe.com sneel@mwe.com Attorneys for Plaintiffs

2 Case 1:15-cv CRC Document 88 Filed 11/01/16 Page 2 of 9 The Martin County Plaintiffs respectfully ask the Court to deny Defendants request for an extension of time to file their oppositions to Plaintiffs respective motions for summary judgment. See Dkts. 86, 87. Defendants base their request upon All Aboard Florida s ( AAF new pending application for a $600 million Private Activity Bond ( PAB allocation from the United States Department of Transportation ( DOT that Defendants assert would moot Plaintiffs case within a few weeks and obviat[e] the need for the parties to brief or this Court to consider the merits of Plaintiffs claims. Id. However, Defendants claims do not appear to be either candid or complete either in their supporting representations. What Defendants appear to be doing is splitting the funding of Phase I and Phase II and prematurely asserting a mootness argument that will ultimately not withstand scrutiny. AAF has just now informed the Court that it is also considering a new PAB allocation request of $1.15 billion to fund Phase II. Dkt. 87 at 2. This critical fact has a clear impact on the mootness argument presented by Defendants in their respective motions. Defendants should not be allowed to delay on the promise that they are intending to shuffle the deck in an effort to evade a definitive judicial determination that the original PAB allocation violated the National Environmental Policy Act ( NEPA. In the alternative, if DOT is willing to revoke the existing PABs it should do so now and then argue that moots the case. Accordingly, Plaintiffs oppose Defendants motions for the following reasons: (1 DOT s request to the Court fails to disclose all significant and material facts; and (2 the new application for Phase I PABs (and the plans for a new application for Phase II PABs represents a reshuffling of AAF s capital stack as an attempt to evade timely judicial determination of this case. AAF s current promise to not sell the existing PABs before November 16, 2016 is not the meaningful promise that they won t sell any bonds until this case is concluded. 2

3 Case 1:15-cv CRC Document 88 Filed 11/01/16 Page 3 of 9 DOT s Request to the Court Fails to Disclose Significant Material Facts 1. DOT s motion states that on September 30, 2016, AAF applied for a new, $600 million Private Activity Bond ( PAB that would fund only Phase I of the AAF Project. Dkt (emphasis added. AAF s motion states that this application is for a new Private Activity Bonds ( PABs authorization covering only Phase I.... Dkt. 87 at 2. According to DOT and AAF, DOT s Credit Council may act on this application on November 16, Dkt. 86 4; Dkt. 87 at DOT further states that AAF has requested that DOT withdraw its existing PAB allocation (granted December 22, 2014, funding Phases I and II if it grants the new application[,] Dkt. 86 4, DOT may also determine that it is appropriate to withdraw the existing PAB allocation in other circumstances, id. 5, and AAF has informed DOT that it will not be issuing PABs under the existing allocation while DOT is considering the 2016 PAB application. Id. 6. AAF makes the same assertion that it has also requested that DOT withdraw the existing PABs authorization for the AAF Project if the pending application is granted. Dkt. 87 at 2. Based on these representations, DOT and AAF hold the view that if DOT withdraws the [existing December 22, 2014 PAB] allocation, all claims in these actions would be rendered moot. Dkt. 86 at 3; Dkt. 87 at 2 ( AAF believes that if the existing PABs authorization is withdrawn, the claims asserted in the present action will be rendered moot.. 3. Shortly after receiving DOT s extension request letter on October 27, 2016, Plaintiffs requested copies of the new AAF PABs application referenced in the letter and any related submissions or correspondence between AAF and DOT. See Ex. A (Oct. 27, 2016 Letter from DOT to Plaintiffs. The following day, DOT provided a redacted copy of the September 30th PAB application and the accompanying cover letter. See Ex. B (September 30, 2016 AAF 3

4 Case 1:15-cv CRC Document 88 Filed 11/01/16 Page 4 of 9 PAB Application; Ex. C (September 30, 2016 AAF PAB Application Cover Letter. In its communication to Plaintiffs, DOT refused to provide any of the documents exchanged between DOT and AAF other than the application and cover letter, stating via that DOT d[id] not think that any further communications between DOT and AAF regarding the application (to the extent any exist are relevant to [Plaintiffs ] response to my letter of yesterday. Ex. D (October 28, from DOT to Plaintiffs. 4. In AAF s cover letter accompanying its September 30th PAB Application, AAF stated that [t]his application is a substitute for, and will effectively supplant, the Application originally filed in August of Ex. C at 3. AAF also represented that [w]ithin the next several weeks, [AAF] will separately discuss a new request for an allocation of up to $1.15 billion in PABs authority for Phase II (West Palm Beach to Orlando. Id. (emphasis added. 5. Nowhere in DOT s motion or its October 27th letter does the Agency mention to Plaintiffs or the Court that AAF told DOT that AAF would be evaluating a new request for a $1.15 billion PAB allocation to finance Phase II. Had Plaintiffs agreed to DOT extension request based on DOT s October 27th letter or its motion, Plaintiffs would have acted on incomplete or actually misleading information that is materially different from the actual facts. AAF now states to the Court that it has advised DOT that it would like to discuss a new request for a PABs authorization for Phase II, but that process will not occur until after the DOT Credit Council acts on the pending application. Dkt. 87 at In addition to failing to disclose significant material facts, DOT and AAF had weeks, if not months, to disclose to Plaintiffs and the Court of the new PABs application. 1 1 AAF also fails to disclose that Fortress Investment Group is exploring a sale of AAF s sister company, Florida East Railway Corporation ( FECR, which owns the rail corridor on which 4

5 Case 1:15-cv CRC Document 88 Filed 11/01/16 Page 5 of 9 7. DOT and AAF filed their respective Answers to Plaintiffs complaint on September 20, Neither DOT nor AAF disclosed that DOT was in the process of submitting a new application for PABs. Upon information and belief, DOT and AAF knew of this new bond application when they filed their Answers. 8. Regarding DOT s assertion that Plaintiffs unexpectedly filed motions for summary judgment on October 21, 2016, and AAF s statement that Plaintiffs provided no advance notice of their Summary Judgment Motions and thus AAF had not been preparing to brief the issues raised by it, Plaintiffs direct the Defendants to the transcript of the Court hearing held on June 30, 2016, in which Plaintiffs indicated to the Court that their next step after a Court decision denying the motions to dismiss would be for DOT to file the administrative record and Plaintiffs to file motions for summary judgment. See ECF No. 82, Tr. of Hrg., 06/30/16, p. 132:20-25; 133:1-4. The Court issued its Memorandum Opinion and Order on August 16, Dkt. 76. AAF Appears to Be Splitting Its Financial Plan for Purposes of Avoiding a Judicial Determination that the 2014 PAB Allocation Violated NEPA, Which Could Force the Parties to Relitigate the Case 9. DOT states that AAF s new PAB allocation would fund only Phase I[,] and AAF asserts this allocation would cover[] only Phase I of the AAF Project, but these funds indisputably impact the financing of Phase II and upon information and belief, the Phase I PABs are likely to fund train sets that will run on Phase II through Plaintiffs counties. AAF states in its new PAB application cover letter that it has Phase I train sets, see Ex. C at 2 but the AAF Project would run. See Ex. E, Ed Hammond & Kiel Porter, Fortress Said to Explore Sale of Florida East Coast Railway, Bloomberg (Oct. 13, 2016, also available at 5

6 Case 1:15-cv CRC Document 88 Filed 11/01/16 Page 6 of 9 AAF does not define Phase I train sets or state that these train sets will stop running at West Palm Beach if Phase II is completed. 10. By shifting $600 million of the $1.75 billion PABs to be spent on Phase I, and requesting a smaller tranche of $1.15 billion for Phase II, AAF may be reshuffling its capital stack, but this will not moot the case as claimed by the Defendants. AAF still needs PAB assistance to finance Phase II of the Project. AAF s intention to move forward with the new $600 million PAB application and a potential $1.15 billion PAB application to finance Phase II indicates that Plaintiffs claim remains justiciable. 11. DOT and AAF characterize this application as new, but AAF is merely reshuffling its capital stack to avoid being subjected to further NEPA review. AAF s new PAB application intends to rely upon the Florida Development Finance Corporation s ( FDFC August 14, 2014 Declaration of Intent and its August 5, 2015 resolution to serve as the PABs issuer related to the $1.75 billion allocation at issue in this case. See Ex. B at 15, Plaintiffs filed their motion for summary judgment and seek a judicial determination on their claims. AAF and DOT are attempting to delay and ultimately argue the case is mooted in order to avoid a judicial determination of whether DOT violated NEPA from the date of the PABs approval, December 22, 2014, to today. 13. Plaintiffs would normally consent to a modest extension request to file an opposition to a motion for summary judgment. However, DOT has repeatedly sought to delay the case, as it did with the production of the administrative record. See Dkt. 80, Plaintiffs Joint Opposition to Defendants Second Motion for An Extension of Time On Filing The Administrative Record and Answers to Plaintiffs Complaint. A thirty-day extension is too long under these circumstances in light of AAF s September 30th PAB application in which it stated 6

7 Case 1:15-cv CRC Document 88 Filed 11/01/16 Page 7 of 9 that AAF will separately discuss a new request for an allocation of up to $1.15 billion in PABs authority for Phase II (West Palm Beach to Orlando. Ex. C at Plaintiffs submitted their motion for summary judgment on their claim that DOT violated NEPA in allocating PABs to the AAF Project; Defendants should not be permitted to evade a judicial determination on these issues through further manipulation of NEPA 15. Accordingly, Plaintiffs request that the Court deny Defendants request for an extension of time to file their oppositions to Plaintiffs motion for summary judgment. * * * * * While AAF claims that the present action will be rendered moot if its original PAB application is withdrawn, this is not necessarily the case. While Plaintiffs action would be rendered moot if AAF abandoned Phase II altogether, that is not what is contemplated in AAF s new PAB application. In its motion for extension of time, AAF informs the court that it has advised DOT that it would like to discuss a new request for PABs authorization for Phase II, which transparently suggests that any mootness of Plaintiffs current action would simply swap out the one lawsuit where judgment is close for another future suit where it is not. The facts are clear AAF is seeking to avoid judicial review of the Project in the instant lawsuits, with the apparent blessing of DOT. Accordingly, the Defendants should not be permitted to claim mootness as a justification for delayed briefing on Plaintiffs motions for summary judgment until and unless AAF abandons the original PAB authorization entirely. 7

8 Case 1:15-cv CRC Document 88 Filed 11/01/16 Page 8 of 9 Dated: November 1, 2016 Respectfully submitted, By: s/ Amandeep S. Sidhu Stephen M. Ryan (D.C. Bar No Amandeep S. Sidhu (D.C. Bar No Sam C. Neel (D.C. Bar No MCDERMOTT WILL & EMERY LLP The McDermott Building 500 North Capitol Street, N.W. Washington, DC Tel: ( sryan@mwe.com asidhu@mwe.com sneel@mwe.com Attorneys for Plaintiffs 8

9 Case 1:15-cv CRC Document 88 Filed 11/01/16 Page 9 of 9 CERTIFICATE OF SERVICE I hereby certify that on November 1, 2016, I caused copies of the foregoing materials to be served by electronic means on all counsel of record through the Court s CM/ECF system. s/ Amandeep S. Sidhu Amandeep S. Sidhu (D.C. Bar No MCDERMOTT WILL &EMERY LLP The McDermott Building 500 North Capitol Street NW Washington, DC Tel: ( asidhu@mwe.com Attorneys for Plaintiffs 9