FiberLight, LLC v. Nat'l R.R. Passenger Corp.

81 F.Supp.3d 93

FiberLight, LLC, Plaintiff

v.National Railroad Passenger Corp., et al., Defendants.

Civil Action No. 13–cv–1138 KBJ

United States District Court, District of Columbia.

Signed March 2, 2015

Charles A. Zdebski, James Christopher Falvey, Jeffrey Paul Brundage, Eckert, Seamans, Cherin & Mellott, LLC, Washington, DC, for Plaintiff.

Gerald T. Ford, Jerry A. Cuomo, Mark S. Landman, Landman Corsi Ballaine & Ford, P.C., Newark, NJ, Allison D. Rule, Christopher Anthony Canter, Jacqueline R. Hankins, Marashlian & Donahue, LLC, McLean, VA, for Defendants.

MEMORANDUM OPINION

KETANJI BROWN JACKSON, United States District Judge

Plaintiff FiberLight, LLC (“FiberLight”) is a Delaware-based company that constructs, owns, and operates fiber optic cables that carry digital information over long distances underground. FiberLight manages a fiber optic cable network that runs from Maryland to Virginia, and that passes through the District of Columbia. In this lawsuit, FiberLight alleges that it has purchased most of the fiber optic cable that lies beneath the property surrounding Union Station, but that Defendant National Railroad Passenger Corporation (“Amtrak”), which manages the property, will not permit FiberLight employees to access that cable for maintenance unless FiberLight involves the former owner of the cable network, Defendant tw Telecom of DC (“TWTC”), or executes a right-of-way agreement with Amtrak that includes payment of a fee. At the heart of this dispute are two contracts that pertain to the property interests at issue: (1) an asset purchase agreement (“Purchase Agreement”) between FiberLight and TWTC's predecessor-in-interest, pursuant to which FiberLight purchased the cable at issue in this case, and (2) a “Railroad Right–of–Way License Agreement” (“ROW Agreement”) between TWTC and Amtrak, which permits TWTC to access the cable underneath the Union Station property in exchange for an annual license fee. It is undisputed that all three parties failed to execute an assignment of TWTC's interest in the ROW Agreement to FiberLight after the Purchase Agreement was signed. It is also undisputed that TWTC has continued to pay Amtrak the annual access fees owed under the ROW Agreement despite its sale of most of the cable to FiberLight.

In recent months, both TWTC and Amtrak apparently have made clear to FiberLight that they intend to take steps to alter the status quo: TWTC allegedly has announced that it will not renew the ROW Agreement with Amtrak (an action that apparently would result in ownership of FiberLight's cable vesting to Amtrak under the terms of the ROW Agreement), and TWTC has also demanded that FiberLight reimburse it for the access payments that TWTC has made to Amtrak since FiberLight purchased the cable. Furthermore, both Defendants allegedly have requested that FiberLight remove its cable entirely. In response, FiberLight filed the instant complaint, which not only claims that the Union Station property upon which FiberLight's cable is buried was dedicated to public use in 1914 (and thus challenges Amtrak's right to exclude FiberLight and/or to charge access fees), but also seeks a declaratory judgment regarding rights and obligations under the ROW Agreement—a contract to which FiberLight is not a party.

Before this Court at present are two separate motions to dismiss the complaint that Amtrak and TWTC have filed. (Amtrak Mot. to Dismiss Pl.'s Amended Compl. Pursuant to F.R.C.P. 12(b)(1), 12(b)(6), and 9(b) (“Amtrak's Mot.”), ECF No. 24; Def. TW Telecom of D.C. LLC's Mot. to Dismiss (“TWTC's Mot.”), ECF No. 23.) Both Amtrak and TWTC argue that this Court lacks subject matter jurisdiction over most of FiberLight's complaint because FiberLight has not suffered an injury-in-fact and has requested a declaration of rights under a contract to which it is neither a party nor a third-party beneficiary. ((Mem. in Supp. of Amtrak's Mot. (“Amtrak's Mem.”), ECF No. 24–2, at 28–37; Def. TW Telecom's Mem. in Supp. of TWTC's Mot. (“TWTC's Mem.”), ECF No. 23–1, at 16–32.)¹ Defendants also invoke Federal Rule of Civil Procedure 12(b)(6) to challenge certain of FiberLight's claims for failure to state a claim upon which relief can be granted (Amtrak's Mem. at 13–28, 38–47; TWTC's Mem. at 32–37), and Defendants further argue that this Court should decline to hear the claims that FiberLight has brought under the Declaratory Judgment Act, given the Court's discretion under the Act. (Amtrak's Mem. at 37–38; TWTC's Mem. at 37–42).

For the reasons explained fully below, this Court concludes that FiberLight lacks standing to bring claims that request clarification or rescission of provisions of the ROW Agreement. Moreover, to the extent that FiberLight is asking this Court to exercise supplemental jurisdiction over the anticipatory breach claim against TWTC, and also to declare both that FiberLight has a right to access the cable it purchased without being deemed a trespasser and that FiberLight is immune from future suit by TWTC to recover the access fees that TWTC has paid to Amtrak on FiberLight's behalf, this Court is exercising its discretion to decline to provide any such relief. Consequently, both Defendants' motions to dismiss will be GRANTED , and this case will be DISMISSED without prejudice and in its entirety. A separate order consistent with this opinion will follow.

I. BACKGROUND

A. Factual Background

According to the complaint, a network of fiber optic cables carrying digital information for telephone, cable, and internet use is buried underneath the property surrounding Union Station in the District of Columbia, unbeknownst to most train travelers. (Am. Compl. ¶ 12.) Amtrak is a DC-based for-profit railroad corporation that the United States government majority owns; Amtrak manages and leases the property in and around Union Station. (Id. ¶¶ 2, 5.) TWTC is a Delaware-based telecommunications service provider for businesses in the DC area. (Id. ¶ 3.) As relevant here, TWTC's predecessor—hereinafter referred to throughout as “TWTC”—owned and serviced the fiber optic cable network that lies beneath the Union Station property in 1999, when that company and Amtrak entered into a right-of-way license agreement that permitted the fiber optics company to access the cable network for maintenance. (Am. Compl. ¶ 11; see also ROW Agreement, Ex. 1 to Amtrak's Mem., ECF No. 24–3, at 5.)

1. The ROW Agreement²

Four terms of the ROW Agreement between Amtrak and TWTC are directly relevant to the claims that have been brought in this case. First, the agreement grants TWTC a “license” for a five-year period, permitting “the construction, installation, operation and maintenance” of fiber optic cable and related equipment in certain specified areas of “raw land around Union Station [.]” (ROW Agreement §§ 2.1, 2.1.1, 3.1; see also Am. Compl. ¶ 11.) The agreement provides that the licensee “shall have the option to renew and extend this Agreement for five (5) consecutive ‘Renewal Terms' of five (5) years each [.]” (Id. § 3.1)

Second, the agreement establishes that, in exchange for use of the property, the licensee will pay an “Annual License Fee” to Amtrak. (ROW Agreement § 3.2; Am. Compl. ¶ 11.) The agreement specifies that this license fee will be adjusted upward annually. (ROW Agreement § 3.3.) According to the complaint, the annual fee was $62,164 as of 2002, and it grew to nearly $80,000 in 2013. (Am. Compl. ¶ 11.)

Third, the ROW Agreement specifically provides that the licensee “shall not assign, sell, sublease or transfer” its rights or obligations under the contract or “sublease all or any part of the Licensed Premises or the [fiber optic cable] without [Amtrak's] consent.” (ROW Agreement § 5.1.) Furthermore, with respect to third parties, the ROW Agreement provides that “[n]othing contained in this Agreement, express or implied, is intended to confer on any person other than the parties hereto or their respective successor and assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.” (Id. § 14.10.) The contract also states that the ROW Agreement “shall be binding upon and shall inure to the benefit of both parties hereto and their respective ... assigns.” (Id. § 14.12.)

Fourth and finally, the ROW Agreement contains a series of provisions that address ownership and removal of the fiber optic cable network (“FOC”) if the agreement expires or is terminated. Two such provisions are relevant to the arguments the parties make here; these two provisions state as follows:

4.2 Ownership Upon Termination. Upon the expiration of this Agreement, or termination of the Agreement for any reason, Licensee shall notify Licensor as to whether Licensee intends to retain title and ownership of the FOC, and if Licensee has not already removed the FOC and/or if Licensee does not so notify Licensor within ninety (90) days of such expiration or termination, title to and ownership of the FOC shall immediately and completely vest in Licensor, without the need for either party to take any action or execute any document.... If Licensee notifies Licensor that it intends to retain such title and ownership of the FOC, Licensee shall remove the FOC in accordance with Section 4.3....

4.3 Removal of the FOC. Within ninety (90) days of expiration of this Agreement or termination of this Agreement for any reason, Licensor may require Licensee in writing to remove all or any portion of the FOC from the Licensed Premises ... and Licensee shall remove the FOC solely at its own expense within one-hundred eighty (180) days of receiving notice from Licensor requiring such removal.... If Licensee fails to remove the FOC from the Licensed Premises after Licensor requests such removal pursuant to this Section 4.3, Licensor may hire contractors to remove the FOC, and Licensee shall ... reimburse Licensor for all costs and expenses incurred by Licensor for such removal.

(Id. §§ 4.2, 4.3.)

2. The TWTC–FiberLight Asset Purchase...