Consolidated Rail Corp. v. City of Harrisburg

842 A.2d 369, 577 Pa. 71, 2004 Pa. LEXIS 114
CourtSupreme Court of Pennsylvania
DecidedFebruary 18, 2004
StatusPublished
Cited by2 cases

This text of 842 A.2d 369 (Consolidated Rail Corp. v. City of Harrisburg) is published on Counsel Stack Legal Research, covering Supreme Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Consolidated Rail Corp. v. City of Harrisburg, 842 A.2d 369, 577 Pa. 71, 2004 Pa. LEXIS 114 (Pa. 2004).

Opinion

OPINION

Justice SAYLOR.

The question presented is whether, and to what extent, the jurisdiction vested in the Pennsylvania Public Utility Commission to allocate relocation costs for facilities of non-transportation utilities arising from improvements to rail-highway crossings forecloses judicial enforcement of preexisting, private, cost-allocation agreements through subsequent civil proceedings.

This appeal arises from the relocation of a segment of a water line constructed by the City of Harrisburg (the “City”) in 1941 and later transferred to the Harrisburg Authority (the “Authority,” and, together with the City, “Appellants”), pursuant to a sale-and-lease-back arrangement. The relevant portion of the line lies beneath railroad tracks situated in a private right-of-way owned by Consolidated Rail Corporation (“Conrail”), at the location of their crossing under a bridge carrying the City’s Maclay Street. The repositioning became necessary due to alterations to the rail-highway crossing site undertaken at Conrail’s behest, designed, inter alia, to increase vertical clearance limits to permit transportation of double-stacked container cars.

Central to the ensuing dispute over responsibility for the relocation costs, in 1941, Conrail (via a predecessor-in-interest, the Pennsylvania Railroad Company) and the City entered into an agreement enabling the City to construct and maintain the water line in the railroad right-of-way at the Maclay Street crossing. The agreement entailed no charges or rental obligations, but the City, and its successors and assigns, were made responsible for future relocation of the line at the railroad’s request.1

[371]*371Conrail’s formal efforts to implement the relevant improvements to the crossing commenced in 1994. Since rail-highway crossings are regulated by the Pennsylvania Public Utility Commission (the “PUC” or the “Commission”), see 66 Pa.C.S. §§ 2702, 2704, Conrail sought and obtained the agency’s approval to proceed, initially at its own expense, but subject to a subsequent determination by the Commission pursuant to Section 2704(a) of the Public Utility Code, 66 Pa.C.S. § 2704(a), which invests the PUC with jurisdiction to allocate costs arising, inter alia, from facility relocation due to alterations to rail-highway crossings.2 Upon completion of the work, Conrail pursued, in the administrative forum, reimbursement from Appellants for the expenses it incurred in the relocation of the water line, in the amount of $461,501.70. Appellants denied responsibility for the charges and sought reimbursement from Conrail for $7,783.70 in costs, which they alleged that they had incurred in connection with the relocation.

At an evidentiary hearing before an administrative law judge (the “ALJ”), Conrail advanced its right to reimbursement pursuant to its 1941 agreement with the City, emphasizing that Appellants benefited from the location of the water line in its private right-of-way, rent-free, for more than fifty years, and from the increased life expectancy of the newly installed line. Appellants denied the accrual of any benefit to them or their ratepayers, argued that they would not have improved the line but for Conrail’s project, and asserted that the PUC was authorized to allocate costs without regard to the 1941 agreement. Considering the parties’ respective positions, the ALJ concluded that the 1941 agreement should not be deemed dispositive in the assignment of costs. Instead, upon consideration of a series of factors, he recommended that each party bear its own costs.3 Centrally, the ALJ believed that [372]*372the equities favored Appellants’ position, since Conrail received the vast majority of the benefit from the track-lowering project. He also refused Conrail’s request to include in his recommendation a proviso that the PUC’s order should be without prejudice to vindication of the parties’ rights under private agreements in a court of law.

On consideration of Conrail’s exceptions, the Commission issued an opinion and order adopting the recommended decision of the ALJ, with the significant exception that it included the without-prejudice provision that Conrail had requested. Although in its associated discussion, the Commission initially characterized its jurisdiction to allocate costs arising from alterations to rail-highway crossings as exclusive, see In re Application of Consolidated Rail Corp., A-00111494, slip op. at 12 (Pa.PUC. Sept. 19, 1997) (“In order to promote the safety of the public, the Commission has the exclusive power to determine the manner in which rail/highway crossings may be altered (including rehabilitation) and the exclusive power to determine which party or parties shall bear the costs associated with such alteration and future maintenance of rail/highway crossings.”), it explained its decision to expressly limit the effect of its order very briefly, as follows: “Consistent with Commission precedent, retention of this language in the final Order recognizes the rights of the parties.” Id.

Conrail did not appeal the Commission’s order, but rather, commenced the instant civil action in the court of common pleas, grounded in theories of express contract and quantum meruit. Appellants filed preliminary objections, questioning the court’s subject matter jurisdiction, invoking the doctrine of res judicata, and lodging a demurrer to the complaint; after the trial court overruled these objections, Appellants filed a motion for summary judgment, again invoking the PUC’s decision as preemptive. The trial court also denied this motion, however, distinguishing administrative cost-allocation matters from judicial enforcement of contractual rights. See Consolidated Rail Corp. v. City of Harrisburg, No. 3780 S 1998, slip op. at 7 (C.P. Dauph. June 5, 2002). In this regard, the court emphasized Conrail’s claim of a bargained-for exchange in which it granted the City permission to traverse its private right-of-way solely on the condition that the City underwrite costs of any required relocation. The court explained:

Our Courts have said, and we do not question the holdings, that exclusive jurisdiction, once it attaches in rail-highway cases, is retained by the PUC unless the parties have executed a mutual agreement and payments toward that agreement have been made. In fact, we agree with our Courts in the vast majority of situations. However, this set of facts is different. In this case, the PUC has allocated the costs of the relocation to the detriment of and in violation of the basic contractual rights of the plaintiff.
We are not attempting to circumvent the PUC’s exclusive authority to allocate relocation expenses. We merely are enforcing the basic contractual rights of an [373]*373injured party should it be determined that such rights exist and have been violated. The allocation of the costs of relocation is finished. The PUC has spoken on the matter. Now, the matter of the contractual rights and remedies for breaches of those rights, an entirely separate matter, is before us.
Even the PUC acknowledged the possible contractual rights of the parties and entered [its] order without prejudice, allowing the parties to attempt recovery of incurred costs in accordance with lawful agreements between the parties.

Id. at 8 (citations omitted).

On a permissive interlocutory appeal,

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Bluebook (online)
842 A.2d 369, 577 Pa. 71, 2004 Pa. LEXIS 114, Counsel Stack Legal Research, https://law.counselstack.com/opinion/consolidated-rail-corp-v-city-of-harrisburg-pa-2004.