John D. HeffnerJohn Heffner Clark Hill
John D. Heffner
John D. Heffner's practice is focused on private and public interests in rail transportation law. John is one of the very few private practice attorneys knowledgeable about the formation of the National Railroad Passenger Corporation (Amtrak) and Consolidated Rail Corporation (Conrail) and the specialized laws related thereto.
John advocates alternative rail dispute resolution and maintains a close relationship with all major Class I railroads in the United States and Canada, major short line and regional railroad owners, Amtrak, commuter railroad authorities, and state departments of transportation, as well as a cadre of consultants and other railroad industry contacts. He has testified as an expert witness in railroad-related litigation.
John represents clients before the federal government including the Surface Transportation Board (STB), the Federal Railroad Administration (FRA), and the Railroad Retirement Board, and in commercial transactions. His clients include short line and regional railroads, railroad industry suppliers, lenders, and investors as well as state departments of transportation, passenger rail authorities, port authorities, and utility companies.
Short Line Freight Railroads
John was one of the very few original attorneys involved in the creation of short line railroads at the time the Staggers Act amendments to the Interstate Commerce Act were enacted. During the past 35 years, John has assisted dozens of short line railroad promoters, owners, and investors with the formation of new railroads throughout the United States. His expertise includes acquisition and operation filings and litigation before the STB's predecessor agency, the Interstate Commerce Commission, as well as negotiating, reviewing, and drafting numerous types of railroad transaction and financing agreements and rendering opinions of counsel in connection with these transactions.
As the industry has matured, John has continued to represent short lines in diverse regulatory and commercial matters. Among other assignments, he has participated in railroad merger and consolidation proceedings, obtained abandonment and discontinuance authority for unprofitable services, handled licensing for new railroad construction, participated in the preparation of feeder line applications, emergency rail service requests, and offers of financial assistance, drafted trackage and haulage rights agreements, represented clients seeking private and government financing, and counseled clients in disputes and negotiations with rail customers and affected government agencies. Some of the more unusual matters handled have included disputes involving preemption of state and local laws, questions under the National Environmental Policy Act (NEPA), competitive rail service requests under the Railroad Industry Agreement, and the status of railroad lines and rights-of-way under the National Trails Act.
A small but growing part of his practice entails advising clients building new industrial parks and logistics facilities about the provision of rail service including the applicability of federal railroad licensing and environmental requirements.
John has also advised rail customers and political subdivisions receiving unsatisfactory or inadequate service from their existing carriers as to their remedies and has also represented clients in proceedings involving inadequate rail service.
John believes that railroad passenger service - whether provided by Amtrak, public agencies, or private entities - is about to undergo a rebirth in the United States. Historically, he has advised state, local, and regional governments on the start up of intercity and commuter passenger service. Currently, he is assisting several short line railroads operating passenger trains or proposing new passenger service and is representing two passenger excursion carriers in connection with their operation of intercity service either on a "stand alone" basis or in conjunction with Amtrak. John believes that the 2008 Passenger Railroad Investment and Improvement Act and its 2015 update, the Passenger Rail Reform and Reinvestment Act, provide a basis for private industry initiatives in passenger rail. He welcomes the opportunity to assist public agencies and entrepreneurs in this area. æIssues include whether the putative carrier is operating in interstate commerce and is therefore subject to the STB's jurisdiction and other federal railroad laws, methods for obtaining access to host railroad lines and facilities and Amtrak services, equipment, and facilities, and the indemnification and insurance requirements peculiar to passenger service.
Public Agency Representation
John has a long history of representing state, local, and regional agencies in railroad and railroad-related matters. Clients have included state transportation departments and attorneys general, cities, industrial development authorities, port authorities, and regional transportation agencies, as well as consulting firms under contract to those entities. Specific projects have included participation in railroad merger cases, rail line abandonments, acquisitions of rail lines and railroad companies, and State of Maine filings with the STB. John has obtained authority to construct new rail lines for four public agencies and is currently representing a new short line that seeks authority to construct an intermodal truck-rail transfer facility at a former "brownfield."
Railroad Equipment Finance
A regular part of John's transactional practice entails equipment finance projects including title searches and opinions, document drafting, and lien/lease recordation at the STB. John is conversant with the types of locomotives and rolling stock required for both freight and passenger railroad service. John's clients have included major banks, investors, the largest American rebuilder and vendor of used locomotives, and short line railroads.
Railroad Real Estate and Rights-of-Way
John has advised both railroad and nonrailroad clients on a wide variety of issues involving the status of railroad rights-of-way for railroad service, rail trail use, and easements, licenses, and other agreements for use by third parties. æHe is available to negotiate the terms of such agreements.
Railroad Retirement Board\n\nJohn has advised railroad and railroad vendor clients seeking to obtain or avoid coverage under the Railroad Retirement Act administered by the Railroad Retirement Board. This work has entailed responding to Board questionnaires and coverage opinions, participation in Board proceedings, and court litigation seeking to overturn adverse Board coverage rulings. He maintains a close working relationship with the Board's staff.
Federal Communications Commission
Transportation companies are major users of the radio spectrum for communications purposes. æSuch licenses held by railroads, airlines, trucking companies, barge lines, and logistics companies as well as other industrial concerns are issued by the Federal Communications Commission (FCC).
Transactions involving the assignment or transfer of "industrial radio" licenses as well as transfers of control of companies owning those licenses require FCC approval. John represents utilities, railroads and other transportation carriers engaged in these regulated transactions.
Federal Railroad Administration
The Federal Railroad Administration (FRA) administers three programs of interest to our clients. First, it is the lead agency responsible for all aspects of railroad safety including track and equipment standards, railroad worker safety, and violations of railroad safety laws. One area of particular concern involves the design, construction, and integrity of tank cars handling hazardous and explosive cargoes. Second, the FRA administers a $35 billion loan and loan guaranty program known as the Railroad Rehabilitation and Improvement Fund that is available for the acquisition, rehabilitation, and improvement of common carrier railroad lines and equipment or facilities for such lines. Finally, the FRA is the agency that oversees funding for Amtrak and other intercity rail passenger projects. Among other matters, the FRA is responsible for environmental permitting on passenger proposals that use federal funds.
John and other firm attorneys have provided specialized coverage counsel for a company that insured tank cars destroyed in the Lac Megantic derailment in Canada. He is familiar with how FRA standards and requirements relate to those adopted for the railroad industry through the Association of American Railroads as well as the Pipeline and Hazardous Materials and Safety Administration of the US Department of Transportation.
John has represented short line railroad clients that have sought and obtained financing from the FRA and state agencies in connection with loan applications. The prospect of federal financing for new railroad passenger service whether for transactions sponsored by public agencies or private entities is just beginning. Lessons learned through federal financing for commuter and freight rail projects will be very beneficial in helping clients secure funding for intercity rail passenger projects.
Other relevant experience
John served as an expert witness for rail carriers in adversarial matters under the Railroad Retirement Act and in litigation involving labor protective conditions pursuant to the New York Dock decision.\n
- Participated in commercial arbitration proceedings and in arbitration hearings before the Association of American Railroads on behalf of short line railroad clients.
- Participated in mediation proceedings on behalf of short line railroad clients.
John frequently assists consulting firms as well as other law firms in providing specialized legal assistance in the highly specialized field of railroad law.
- In 2016 negotiated for a railroad industry vendor client, Rail -Term Corp., a settlement with the Railroad Retirement Board that would eliminate its liability for payment of past due Railroad Unemployment Insurance taxes and could serve the basis for a similar Internal Revenue Service ruling waiving any liability for past due Railroad Retirement Act taxes.
- Assisted a short line railroad holding company in negotiations and regulatory approvals for a series of rail carrier acquisitions in 2015 and again in 2017.
- Represented an electric transmission company being acquired by a Canadian electric utility in obtaining Federal Communications Commission approval for the transfer of a series of that company's radio licenses in 2016.
- Represented the Northwest Tennessee Regional Port Authority in obtaining STB approval in 2015 to construct and operate a new railroad line to serve a proposed port on the Mississippi River.
- Assisted a series of clients establishing rail served industrial parks in negotiating, reviewing, and preparing agreements for rail service at those facilities including the application or preemption of state and local laws, STB, FRA, and NEPA regulatory requirements, and advising clients on potential private contract, short line, or Class I railroad operators.
- Represented the largest owner and reseller of used locomotives in the United States in a major refinancing of its locomotive inventory in 2014.
- Obtained Surface Transportation Board operating authority in 2014 for a private passenger service operated by Iowa Pacific Holdings, LLC, and again in 2015 for a Canadian-based rail tour operator, Rocky Mountaineer.
- On behalf of a small short line railroad holding company obtained a favorable federal court of appeals ruling vacating and remanding a Railroad Retirement Board decision finding the company covered under the Railroad Retirement Act. That case is reported as docket No. 12-1150, Indiana Boxcar Corporation v. Railroad Retirement Board, decided April 9, 2013.
- Obtained authority in 2012 for Iowa Pacific Holdings' subsidiary Saratoga & North Creek Railway to acquire and operate a rail line in an environmentally sensitive area in northern New York State over the strenuous objection of various environmental groups. The assignment involved obtaining political support for the project from the Cuomo Administration in New York and affected political subdivisions leading the STB to reverse its initial unfavorable ruling.
- Advised the Wisconsin & Southern Railroad and the State of Wisconsin's Department of Transportation on how to structure a series of line acquisitions to avoid STB licensing jurisdiction so as to under that agency's the State of Maine decision.
- Represented a short line railroad entrepreneur seeking to acquire a rail line in the face of significant opposition from the City of South Bend (IN) and an adjacent landowner. After obtaining STB approval for the acquisition, John successfully fought a court appeal of a related STB adverse abandonment decision brought in the U.S. Court of Appeals for the District of Columbia Circuit by the City and the landowner. That decision is reported as City of South Bend v. Surface Transportation Board, 566 F.3d 1166, decided May 29, 2009.
- After negotiating and drafting an agreement on behalf of a New Jersey county for the restoration and operation of a publicly owned out-of- service rail line, John successfully represented the County before the STB and in the U.S. Court of Appeals for the District of Columbia Circuit in litigation challenging that transaction brought by five affected municipalities. That case is reported as Town of Springfield, NJ v. Surface Transportation Board, 412 F.3d 187, decided June 25, 2005.
- On behalf of a New York -based railroad, John succeeded in overturning in the U.S. Court of Appeals for the District of Columbia Circuit an STB ruling granting an "adverse abandonment" application filed by the City of New York against the railroad. That decision reported as New York Cross Harbor Railroad v. STB , 374 F.3d 1177, decided July 13, 2004, reaffirms the rule that the Board generally does not grant the "adverse abandonment" of a rail line that is either actively used or for which the owning railroad is actively soliciting new rail traffic.
- On behalf of a short line railroad, John successfully prosecuted a heavily protested application for the abandonment of a scenic rail line in Northern Idaho; work also included obtaining the necessary environmental and historic preservation approvals required for salvage. Reported as Camas Prairie RailNet, Inc.-Abandonment- In Lewis, Nez Perce, and Idaho Counties, ID, Docket No. AB-564, STB served Sept. 13, 2000.
- On behalf of a rail passenger advocacy group, John defeated Southern Railway Company's application to the former Interstate Commerce Commission to discontinue its Southern Crescent passenger train in 1979. This ruling led to the inclusion of one of the nation's last privately operated passenger trains in the Amtrak system.
- Local Regulation of Railroads: Guidance for Municipal Attorneys on Navigating the Complexities of Federal Preemption, Strafford (March 2017)
- Challenges For Private Sponsors of Intercity Passenger Rail Service, Transportation Research Board Annual Conference (January 2017)
- Private versus Common Carrier Railroads, General Counsel Symposium of the American Short Line and Regional Railroad Association (October 2014)
- Institutional Challenges and Opportunities for Competitive Contracting in Intercity Passenger Rail, Standing Committee on Rail Transportation Meetingæ(September 2014)
- Selling and Purchasing Railroads: The Legal Side, General Counsel Symposium of the American Short Line and Regional Railroad Association (November 2013)
- Some Unusual Regulatory Developments, The American Short Line and Regional Railroad Association Annual Meeting (Spring 2013)
- Railroad Retirement Board Presentation, The American Short Line and Regional Railroad Association Annual Meeting (Spring 2012)
- The Surface Transportation Board's State of Maine Decision, The Standing Conference on Rail Transportation (September 2011)
- The History, Making, and Breaking of Paper Barriers,The American Short Line and Regional Railroad Association Annual Meeting (April 2010)
- Shared Use Corridors, Legal and Liability Challenges in Building Rail Capacity, Transportation Research Board Annual Conference (January 2010)
- Reports of the Death of Rail Trails are Greatly Exaggerated, Strasburger Transportation & Logistics Blog (March 2014)
- Court Mulls Retirement, Unemployment Coverage, Railway Age (June 2013)
- So You Want To Build New Rail Line, Legal Tracks (May 2013)
- Another Government Agency That Wants to Help: Federal Regulations on the Transfer of Radio Licenses, Strasburger Transportation & Logistics Blog (April 2013)