Nauman Smith Attorney Benjamin Dunlap Wins Key Pennsylvania Supreme Court Case regarding Rail-highway Crossing Matters

(Harrisburg, Pa.) – Benjamin C. Dunlap, Jr., an attorney for Nauman, Smith, Shissler and Hall, LLP, recently won a Pennsylvania Supreme Court case permitting the continued enforcement of contracts in rail-highway crossing matters. The decision enables the continued viability of literally thousands of contracts entered into over the years by railroads and other public utilities, municipalities and the State and permits the enforcement of agreements freely entered into by those parties.

The case, Consolidated Rail Corporation v. City of Harrisburg and the Harrisburg Authority, originated when Conrail sought reimbursement from the City and the Authority for costs Conrail incurred while relocating an Authority-owned waterline during a track lowering project.

In the mid 1990s Conrail undertook a project to increase the vertical clearances on its lines, which required the lowering of its tracks under a number of highway bridges, including the Maclay Street Bridge in the City of Harrisburg. A water line now owned by The Harrisburg Authority had to be relocated to complete the project. Conrail received permission from the Pennsylvania Public Utility Commission and relocated the water line as part of the project at its initial expense.

Conrail sought reimbursement of the $461,501.70 cost to relocate the lines pursuant to a 1941 agreement between the Pennsylvania Railroad (the prior owner of the rail line) and the City of Harrisburg (the prior owner of the water line), which permitted the location of the waterline in the railroad’s property if the City agreed to assume any future relocation costs.

The City and the Authority disputed the applicability of this contract, saying that the project benefited Conrail, therefore they should not have to pay the costs. The PUC agreed with the City and Authority but preserved Conrail’s right to litigate the matter in a court of law.

Attorney Dunlap argued before the Supreme Court that the PUC’s statutory authority to allocate costs in rail-highway crossing matters does not deprive courts of jurisdiction to determine and enforce rights under a preexisting contract. Mr. Dunlap contended that the Legislature’s central focus enabling the PUC to allocate costs was to prevent contractual disputes from interfering with the timely and effective completion of projects affecting the public safety.

Mr. Dunlap also offered the public policy argument that the PUC’s administrative expertise relates to public safety matters, not to litigation of contract disputes. He contended that a civil action to enforce contractual rights would have no impact on the PUC, its mission or its cost allocation decisions, and that the inability of parties to enforce their contractual rights would lead to untenable uncertainties in commercial affairs. Without the ability to enforce its contractual rights, Conrail would lack any incentive to permit the use of its property to carry other utilities’ facilities, particularly on an uncompensated basis.

The PUC filed an amicus brief in support of Conrail’s position. The PUC agreed that its jurisdiction in this regard is not exclusive and is secondary to its primary mission of assuring public safety at rail-highway crossings. The PUC stated that disputes as to the enforcement of contracts are best left to the civil courts, especially where, as here, the dispute concerned the validity, applicability and enforceability of the contract.

As a result of the case, the Supreme Court decided that a party could seek to enforce its contractual rights in a court of law where a contract is in dispute and the PUC preserves the parties’ rights in this regard.

An honors graduate of West Virginia University and The Dickinson School of Law, Mr. Dunlap was a member of the Woolsack Honor Society for academic achievement at Dickinson. Admitted to the bar of the Supreme Court of Pennsylvania, all Pennsylvania federal District Courts, the Third Circuit Court of Appeals and United States Supreme Court, Mr. Dunlap has been with the firm since 1992.

A member of the Dauphin County and Pennsylvania Bar Associations, Mr. Dunlap authored the article “The Uniform Defamation Act: Is Too Much Being Asked of the Press in the Quest for Libel Law Reform?”, published in the Hastings Communications and Entertainment Law Journal in 1992. Active in community affairs, Mr. Dunlap performs community service work for the Greater Harrisburg Foundation.

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