Recipient's Obligation to Notify FTA of Litigation Affecting Federal Transit Program

Number C-01-06


U.S. Department of Transportation
Federal Transit Administration
400 Seventh St., SW.
Washington, D.C. 20590

June 5, 2006

Dear Colleague:

On May 17, 1999, the Federal Transit Administration (FTA) issued a "Dear Colleague" letter reminding the transit industry of the requirement that recipients of FTA funding ("FTA grantees") notify FTA in the event of certain litigation. That obligation, currently found at Section 49(a) of FTA's Master Agreement (MA-12), requires that FTA grantees notify FTA "in writing of any current or prospective major dispute, breach, default, or litigation that may affect the Federal Government's interests in the [FTA-funded] Project or the Federal Government's administration or enforcement of Federal laws or regulations." (See also MA-12, § 2(a).) Unfortunately, the failure to notify FTA of such matters remains a recurring problem. Indeed, FT A continues to learn about some litigation late in its development, and from sources other than the FTA grantees involved. Therefore, I write to remind you of the obligation to notify FTA of disputes covered in Sections 2(g) and 49(a) of our Master Agreement, and to emphasize that FTA takes this requirement seriously.

FTA's notification requirement provides FTA with an important tool for use in the defense and oversight of its projects and programs. For example, to the extent a private plaintiff challenges the constitutionality of an FTA regulation in Federal Court, the Federal Government may wish to seek leave to intervene as a co-defendant in support of the regulation, or file an amicus brief in the matter. FTA also may review the allegations of a complaint as part of FTA's oversight efforts to ensure that its grantees comply with Federal laws and regulations. Although FTA may decide to take no action in a particular matter, that decision remains within FTA's discretion. A failure to notify FTA of a relevant dispute may thwart FTA's review process, in violation of FTA's Master Agreement.

FTA understands that it is not always easy to discern whether a lawsuit implicates the Federal Government's interests. Therefore, please consider the following as FTA's interpretation of its notification requirement: FTA considers the Federal Government's interests implicated when a complaint either challenges the legality of a Federal requirement applicable under the FTA grant (including any cross-cutting requirement), or alleges activity that, if true, would constitute violation of such a Federal requirement. Once there is any indication that such an interest may exist, please notify the appropriate FTA Regional Counsel in writing, as required by FTA's Master Agreement. We also welcome calls concerning such litigation, of course, although not as a substitute for the required written notification.

We remind you, however, that FTA's notification requirement extends not only to formal litigation, but also to any "current or prospective major dispute, breach, default, or litigation" that affects the Federal Government's interests, as described above.

Please ensure that the appropriate attorneys representing your organization, whether in-house or outside counsel, receive a copy of this letter. Thank you in advance for your cooperation.


David Horner
Chief Counsel