Ambassador Bridge company sues Canada, FHWA, Mendez, LaHood, Coast Guard, Allen, Napolitano, US of A

Detroit International Bridge Company (DBIC) owner of the Ambassador Bridge has lodged a law suit with US District Court in Washington DC against a catch-all collection of US and Canadian government agencies and officials. Not sued is Michigan state DOT the major sponsor of the rival DRIC bridge and the agency trying to force DIBC to demolish tens of millions of dollars worth of construction for a second bridge span.

The DIBC complaints in the 48 page US Court filing are that:

- the Canadian Government covets the Ambassador Bridge and DIBC's profitable toll collection rights that it says are entrenched in contract and treaty going back to 1907

- together with the US FHWA the Canadian government has engaged in a series of assaults on DIBC's rights

- these were intended to depreciate the value of the Ambassador Bridge and pressure DIBC to give up the bridge on Canadian terms or to put it out of business

- Canada and FHWA have moved to build an unjustified competing new toll bridge "directly adjacent to" the Ambassador Bridge and aimed at diverting traffic from it and ultimately replacing it

- the two governments have improperly obstructed and delayed DIBC's efforts to build a modern twin span to the Ambassador Bridge

-  the US Congress in appropriating $230M for the Ambassador Bridge Gateway project intended the improved connections and border-crossing facilities to support the Ambassador Bridge including the second span

- the Canadian Government reneged on a C$300m plan to improve connections between the Ambassador Bridge of the H401 expressway

- DIBC relied on promises by the governments of an end-to-end solution based on the Ambassador Bridge to spend $250m on improvements including preparations for the twin span

- FHWA has contrary to the US Congress' intention to support the Ambassador Bridge corridor and despite the big expenditures on the Gateway project conspired with Canada in its scheme to devalue DIBC's property rights with the new Detroit River International Crossing (DRIC) bridge which the suit calls an unlawful new commercial venture

Basis for claims

DIBC claim they have rights to operate the international toll bridge in the Boundary Waters Treaty of 1909 between the US and Britain, then acting on behalf of Canada in its foreign relations. That treaty provided for regulation of any bridges over boundary waters, allowing for "special agreements" based in reciprocal legislation by the Canadian Parliament and the US Congress.

In 1921 the two legislatures granted DIBC and its Canadian counterpart company (since consolidated into DIBC) tolling rights in perpetuity. This they say constituted such a special agreement. Legislative amendments passed in Washington DC and Ottawa in 1922, 1924, 1925, 1926 and 1927 expanded and clarified DIBC's tolling rights and responsibilities.

This, they say, gave the DIBC rights to build and operate the Ambassador Bridge without being subject to regulation by an International Joint Commission that had been established under the Boundary Waters Treaty.

The special agreement, they say, "has the force of a treaty" and is incorporated in US and Canadian law.

They claim: "the rights granted by the Special Agreement cannot be abrogated or diminished without, at a minimum, an amendment to the (special) agreement by the party states (Canada and the US.)"

Based on the 'special agreement' rights DIBC raised capital, acquired necessary land and built the Ambassador Bridge, opening it November 1929.

Went broke in depression

During the Great Depression the company went broke. In bankruptcy in 1938 the bond debt was converted into stock which was publicly traded for 50 years, before the present owners took the bridge private.

The court filing says the structure of the bridge is only a small part of the value of DIBC's rights, the major part of which is the right to collect tolls at the crossing - called in the lawsuit "the Central Corridor" - across the Detroit River between the cities of Detroit and Windsor and in perpetuity.

Canadian pressure to cede rights from 1973 on

The suit complains that beginning in 1973 the Canadian government has been interfering with DIBC rights, when it set conditions for approving a takeover of DIBC by Central Cartage, a trucking company owned by the present major owner of the bridge 'Matty' Moroun, a Detroit businessman.

In exchange for agreement to the sale the Canadian Government wanted (a) lower tolls (b) conveyance of rights to the Canadian portion of the bridge in 25 years (c) ceding of surplus land.

A 1974 act was passed by Canada called Foreign Investment Review Act (FIRA) and amended in 1977 also attempted to limit the toll concession to another 25 years.

Right through the 1980s DIBC and the Canadian government fought in Federal Court in Canada, but the Canadian Government settled in 1990 without having managed to impose the 25 year term, the suit says.

Right to build twin span claimed inherent in right to maintain

A critical claim in the suit is that DIBC has the right to build a twin span to the now 81 year old Ambassador Bridge under the Special Agreement's grant of a "perpetual right to maintain a bridge."

Because no bridge can last forever this "right to maintain" - they claim - "necessarily includes the right to build a replacement span as needed" and apparently without any government's permit.

The suit says the approach ramps for the new span have been completed allowing it to make use of the existing toll and border control plazas on both sides. DIBC owns all the needed land on the Canadian side and is in process of buying the final parcel needed on the US side, the suit says - apparently a reference to parkland needed to be bought from the City of Detroit.

The suit says: "Thus, all that remains is to construct the actual bridge span connecting the two approach ramps."

Silent on demo order

There's not a word in the suit about Michigan DOT's success in getting a US Court order against DIBC requiring demolition of approach ramps on the US side as being in contravention of plans in the Gateway contract that DIBC signed with the state.

The suit claims the Gateway project implicitly acknowledges the need to connect to the new span on the basis that a 2003 House Appropriations Committee report said the project was intended to "protect plans identified by the Ambassador Bridge, including a second span of the Ambassador Bridge.

Michigan DOT and FHWA have maintained the Gateway project was designed only to serve the existing bridge. Michigan DOT charges that DIBC unilaterally changed the layout of ramps and plazas to accommodate their second span. The state DOT have dumped large piles of earth at the end of DIBC ramps and obtained the Court order requiring demolitions.

Not a word on this in the DIBC suit.

Canadians promised their 'gateway' project but 'reneged'

The suit says that in September 2002 the Canadian and Ontario governments signed a memorandum to spend C$300m upgrading the link between the end of the Ambassador bridge and H401.

Heavy trucks now using nearly 11km (7 miles) of local surface streets through Windsor are a major present deficiency of the Ambassador bridge.

In May 2003 the Canadian authorities said they had funding for the upgraded link.

The suit says relying on these commitments DIBC invested "hundreds of millions of dollars" in improvements including the approaches for the new Ambassador span.

But they charge "Canada reneged" on its support of the connections, and is now again trying to acquire control of the Ambassador Bridge, or eliminate it as a viable crossing.

Twin span said not considered properly in alternatives analysis for DRIC

The suit attacks the new DRIC bridge downstream of the Ambassador proposed by Canada, the US, Michigan and Ontario, saying the Canadians led the push to exclude the Ambassador bridge from the alternatives considered.

It claims the DRIC bridge is planned to use the Gateway Project ramps to I-75 (This is not what the government plans show at all. They show a separate interchange.)

Regulatory processes manipulated to DRIC's advantage

The suit says Canada and FHWA have "manipulated regulatory and other processes" to speed construction of the DRIC bridge while trying to delay or prevent the Ambassador Bridge twin span.

They say the objective is to take away up to 75% of the Ambassador Bridge's truck traffic and 39% of the passenger cars.

Traffic levels, they say, are not sufficient to support two bridges. If the DRIC bridge is built "at least one of the two bridges… is destined for economic failure."

From a high in 1999 of 22m vehicle crossings at the Ambassador Bridge and nearby Detroit Windsor Tunnel traffic has dropped to less than half that - 10.5m in 2009.

"Canada, FHWA and other DRIC proponents have not articulated any rational reasons to expect that this trend would reverse or traffic would increase," says the suit.

Inflated traffic estimates used to make case for DRIC

A 2008 EIS submitted by the DRIC agencies continued to rely on heavily inflated numbers from a 2004 study which had predicted 23.5m vehicle crossings in 2009, the suit says.

Even if traffic were to revive twinning the Ambassador Bridge would be the most efficient way to handle the traffic, they claim.

The suit says the new DRIC bridge is proposed "directly adjacent" to the Ambassador Bridge and "in the immediate proximity" and that this defeats the purpose of providing physical redundancy in case of terrorist attack.

By our measure using Google Maps Pedometer the DRIC site is 3.2km (2 miles) downriver of the Ambassador so "directly adjacent" is something of a stretch.

The suit claims the 1920s special agreement exempts DIBC from "most permit requirements."

Regulatory favoritism

Nevertheless DIBC submitted an environmental impact statement to Transport Canada in December 2007 and has still received no response. By contrast the downriver DRIC bridge submitted a year later in December 2008 and got a response in August 2009, after 9 months.

Canada is interfering with the second span of the Ambassador Bridge, the suit says, by allowing the city of Windsor to invoke "heritage conservation" to prevent demolition of buildings bought by DIBC to provide right of way for the new span.

The US Coast Guard's approval of the new span should have been "quick" and "routine" they claim because it will not pose any obstruction to navigation with no piers in the water and the same overhead clearance as the old Ambassador span.

DIBC first applied for the navigation permit in 2004. That permit was recently (2010) denied by the US Coast Guard on the grounds that the Canadians won't allow the span and that DIBC doesn't have title to needed land.

The suit says lack of title to land is not legitimate grounds for denying a navigation permit.

Land they say is commonly not bought until after permits are granted.

A 2007 International Bridges and Tunnels Act (IBTA) passed by the Canadians and 2009 regulations assert a right to supersede the Ambassador Bridge's "special agreement" rights from the 1920s.

The suit says this is another attempt by Canada to coerce DIBC to cede rights in the Ambassador Bridge on the Canadian government's terms.

The suit makes the claims for damages and injunctive relief  on eleven grounds.

It also asks the US Court to declare that DIBC has the right to build the second span and to exempt it from Canadian regulation of toll rates. 

The court is also asked to prohibit any further work on the competing DRIC bridge.

Copy of the DIBC suit:

http://www.tollroadsnews.com/sites/default/files/ABsuit.pdf

Report on court order for demolition of approach ramps:

http://www.tollroadsnews.com/node/4655

Ambassador Bridge:

http://www.ambassadorbridge.com/

COMMENT: this is a far-fetched law suit in many respects, but if well argued before a fair-minded judge it might well win on several individual counts.

There is no credible funding plan yet for the DRIC bridge and no inevitability about its construction. It is difficult to justify the new bridge with credible traffic forecasts.

The twin span plan of DIBC for the Ambassador Bridge also faces huge obstacles both sides of the river.

Michigan DOT is pushing successfully so far in the courts for demolition of DIBC's approach works to the twin span.

Canadian authorities have valid reasons for wanting to get heavy trucks out of local streets on their side of the Ambassador Bridge. Their planning processes have led to the Windsor-Essex Parkway project to provide a modern highway link between H401 and the new DRIC bridge toll/border plazas.

That Parkway could in theory be extended north along the eastern shore of the River to the Ambassador Bridge, but there is no move for that.

No clear end to this saga is in sight.

TOLLROADSnews 2010-03-24 EDITING 2010-03-25 11:00