A federal district court in Washington, D.C. recently dismissed a lawsuit brought by Alstom seeking to overturn a Federal Railroad Administration (FRA) waiver that allows Siemens to supply certain foreign-made components for the Brightline West high-speed rail project between Las Vegas and Southern California.
The Brightline West project is being supported by a federal grant program created by the Infrastructure Investment and Jobs Act (IIJA). Because federal funds are involved, the project is subject to “Buy America” requirements, generally meaning the steel, iron, and manufactured goods used in the project must be produced in the United States, unless the FRA grants a waiver.
Background
The Nevada Department of Transportation and Brightline West plan to build a $21 billion high-speed passenger rail line between Las Vegas and Southern California. The project was awarded a $3 billion federal grant that triggers Buy America requirements for the steel, iron, and goods used in the project, subject to statutory waivers in certain circumstances.
Brightline ran a private procurement to select a train supplier. Alstom proposed adapting an existing lower-speed train and manufacturing it in New York while using certain foreign-sourced components. Siemens proposed its Velaro NOVO high-speed train already in service in Europe, with initial train builds in Germany and later production at a planned Nevada facility. Siemens also contemplated foreign sourcing for certain components. Because both proposals involved some non-domestic content, Brightline requested Buy America waivers for both vendors’ proposals during the procurement before it made its final selection.
After Brightline selected Siemens, FRA issued a final waiver “reflect[ing] the needs for the project” following that selection and granted the waiver on nonavailability grounds, explaining there were “currently no domestic manufacturers of high-speed trainsets” that are “service proven” above 125 mph, and allowing Siemens to construct the first two trains in Germany.
Alstom then sued, challenging the waiver decision. Siemens and Brightline intervened to defend the FRA waiver.
What the Court Held
The court did not decide whether the waiver was valid. Instead, it dismissed the case because Alstom could not clear a threshold requirement to be in federal court. Alstom “must show that the FRA’s grant of the waiver was ‘at least a substantial factor motivating’ Brightline’s decision not to use Alstom, and that there is ‘little doubt’ that a favorable decision from this court can redress Alstom’s economic injury.”
The court pointed to two practical problems. First, Alstom did not provide evidence showing it could meet Brightline’s requirements. Alstom proposed adapting an existing train for higher-speed performance, while Siemens proposed an existing high-speed platform. Second, Brightline chose Siemens before the FRA issued the final waiver, suggesting Brightline’s decision was driven by factors other than the waiver itself.
The court also rejected two alternative theories Alstom offered. It found that Alstom could not show the waiver created an ongoing competitive harm because Siemens and Alstom competed before the final waiver was issued, and the competition was effectively over by then. It also found Alstom could not reframe this as a “fair procurement process” case, because there was no federal procurement. Here, the court emphasized that Brightline, an independent private party, made the decision to select Siemens. The court found it unclear how the government could have prevented private bidding “on an equal basis” when there was “no government procurement underway.”
Even assuming such a theory could apply, the court held the waiver came after the competitive process was effectively over, and, critically, the usual remedy of ordering the agency to redo the procurement was not available because the court could not order Brightline to reopen bidding.
The court granted the motions to dismiss. Alstom has filed a notice of appeal.
Looking Ahead
This decision is a reminder of a hurdle for companies considering litigation over domestic-content waivers in federally funded projects. Even if a company believes the agency got the waiver decision wrong, it still must show that the waiver drove the private customer’s award decision and whether the court can grant relief that would realistically change the commercial result, rather than simply invalidate the agency’s decision.
Just as importantly, the court’s focus on evidence, whether the challenger could meet the project’s technical requirements and schedule, highlights how critical the record can be, both in the waiver comment process and in any later court challenge.
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