- Buy America waivers can turn on current domestic availability. The D.C. Circuit upheld FRA’s focus on whether compliant trains were being produced domestically at the time of the waiver, rather than whether a manufacturer could develop a compliant product in the future.
- Technical specifications must be tied to actual project needs. FRA successfully supported the waiver by explaining why Brightline’s 186-mph speed requirement was material and why available domestic alternatives could not satisfy it.
- Narrowly tailored waivers are more defensible. The court emphasized that FRA limited the waiver to two foreign-manufactured trains and certain unavailable components, while requiring the remaining trains to be produced domestically.
The U.S. Court of Appeals for the D.C. Circuit upheld a Federal Railroad Administration (FRA) Buy America waiver allowing Brightline West to purchase two foreign-manufactured high-speed trains from Siemens Mobility Inc. for its rail project connecting Las Vegas and Southern California.
In a September 25 decision, the D.C. Circuit concluded that FRA reasonably determined that the required high-speed trains were not domestically available and that the agency adequately explained why a limited waiver was appropriate. The decision resolves, at least for now, a challenge to the waiver brought by competing train manufacturer Alstom Transportation Inc.
Previously, we provided background on how the district court had dismissed Alstom’s challenge for lack of standing without reaching whether FRA properly issued the waiver. The D.C. Circuit disagreed on standing, finding that Alstom could challenge the waiver. Rather than remanding to the district court, the court exercised its discretion to reach the merits, converted the district court’s jurisdictional dismissal into a merits-based judgment, and affirmed after rejecting Alstom’s claims.
Background: FRA’s Limited Waiver for the Brightline West Project
Brightline West is developing a high-speed passenger rail line between Las Vegas, Nevada, and Rancho Cucamonga, California. In December 2023, FRA awarded approximately $3 billion in federal funding to the project. Because of that federal assistance, the project is subject to FRA’s Buy America statute, which generally requires steel, iron, and manufactured goods used in an FRA-funded project to be produced in the United States. FRA may waive that requirement, however, when domestically produced goods are not available in a sufficient and reasonably available quantity or satisfactory quality.
Brightline sought proposals for ten trains capable of traveling at speeds exceeding 186 miles per hour. Siemens proposed its Velaro Novo platform, which was already capable of operating at the required speeds. Siemens proposed manufacturing the first two trains in Germany while training U.S. workers and then shifting production of the remaining eight trains to a new U.S. facility. Alstom proposed ten domestically manufactured trains based on its Avelia Liberty platform, which would have required modifications to reach Brightline’s required speed.
FRA initially considered a waiver that could accommodate either proposal. After Brightline selected Siemens, FRA issued a final waiver allowing Siemens to manufacture the first two trains abroad, as well as certain components not domestically available. FRA found that no domestic manufacturer was then producing high-speed trainsets capable of satisfying Brightline’s 186-mph requirement. The agency also characterized the waiver as narrowly tailored because the remaining eight trains would be manufactured domestically. Alstom challenged the waiver.
D.C. Circuit Finds Alstom Had Standing
As discussed previously, the district court dismissed Alstom’s case because it concluded that Alstom could not establish that FRA’s waiver caused its loss of the Brightline contract or that vacating the waiver would likely result in Brightline selecting Alstom.
The D.C. Circuit disagreed.
The court reasoned that the size of the federal grant made the consequences of the waiver significant. Without the waiver, Brightline could not purchase the foreign-manufactured Siemens trains while retaining the $3 billion in federal funding. Based on those circumstances, the majority concluded that ordinary economic reasoning supported Alstom’s position that vacating the waiver could affect Brightline’s purchasing decision.
The court was divided on standing. Judge Walker dissented in part, arguing that Alstom had not shown that vacating the waiver would likely redress its injury. In his view, Brightline would not necessarily have to choose between switching to Alstom or losing its federal funding. Instead, Brightline could pursue other options, such as renegotiating with Siemens for fully domestic production, reducing its order to the eight trains already planned for U.S. manufacturing, or seeking a different Buy America waiver, including one based on the public interest. The majority found those alternatives unlikely, but the dissent’s reasoning may give future litigants another way to challenge redressability in similar cases.
The majority found standing and proceeded to the merits rather than sending the case back to the district court.
Court Upholds FRA’s Interpretation of the Buy America Waiver Provision
On the merits, Alstom argued that FRA improperly assessed whether the trains were domestically available.
The relevant statute[EI1] permits FRA to waive Buy America requirements when domestically produced steel, iron, and goods “are not produced in a sufficient and reasonably available amount or are not of a satisfactory quality.” Alstom argued, in part, that FRA should have considered its ability to produce compliant trains domestically in the future rather than focusing on what domestic manufacturers were producing when the waiver was issued.
The D.C. Circuit rejected that reading. Looking to the statutory language, the court concluded that “are . . . produced” refers to present production. FRA therefore could evaluate whether the required trains were being produced domestically at the time of the waiver. Because it was undisputed that no domestic manufacturer was then producing trains meeting Brightline’s high-speed requirements, the court found FRA’s interpretation consistent with the statute.
That aspect of the decision is particularly significant for companies involved in federally funded infrastructure projects. Under the court’s interpretation, a manufacturer’s ability or plan to develop a compliant domestic product does not necessarily prevent an agency from issuing a nonavailability waiver when the required product is not yet being produced domestically.
FRA Adequately Explained Why the Siemens Trains Were Different
Alstom also argued that FRA defined the relevant goods too narrowly by focusing on trains capable of satisfying Brightline’s particular speed requirements.
The court again sided with FRA. It explained that an agency cannot justify a Buy America waiver based on minor or insignificant differences between domestic and foreign products. Here, however, the differences were meaningful.
FRA determined that no domestic manufacturer was producing trainsets capable of the 186-mph speed required by Brightline. It also explained that high-speed trainsets require specialized manufacturing, testing, commissioning equipment, facilities, and skilled labor. According to the court, FRA could reasonably distinguish Siemens’ existing high-speed platform from Alstom’s proposed modification of an existing train design.
The court also emphasized the limited scope of the waiver. It covered two trains and certain components that were not domestically available, while the other eight trains were planned for domestic production. FRA’s conclusion that the waiver was “narrowly tailored and limited” was, in the court’s view, sufficient to survive arbitrary-and-capricious review.
What Does the Brightline West Decision Mean for Future Buy America Waiver Challenges?
The D.C. Circuit’s decision changes an important aspect of the standing analysis discussed earlier. The district court had treated standing as a significant hurdle for suppliers challenging Buy America waivers tied to privately conducted, federally funded projects. The D.C. Circuit, however, found that Alstom could challenge FRA’s waiver because the $3 billion federal funding condition created a sufficiently concrete connection between the agency’s decision and Brightline’s purchasing choice.
Clearing the standing hurdle, however, does not necessarily make the underlying challenge easier. The decision also highlights the importance of the administrative record. FRA identified the specific product required, evaluated the domestic market at the time of the waiver, explained the material technical differences between available alternatives, and limited the waiver to the trains and components it found were not domestically available.
For manufacturers seeking to oppose a waiver, the decision suggests that nonavailability may turn on the domestic market as it exists when the agency acts, rather than on whether a manufacturer could eventually develop or produce a compliant product. Companies challenging a waiver should therefore develop a detailed record showing that a domestic product meeting the project’s actual requirements is presently available.
For agencies and funding recipients, the decision also shows the value of narrowly tailoring a waiver. FRA permitted foreign production of only two trains and certain unavailable components while preserving domestic production for the remaining trainsets. The D.C. Circuit specifically relied on that limited scope in concluding that FRA had reasonably exercised its waiver authority.
For manufacturers, contractors, and recipients of federal infrastructure funding, the decision provides a more developed roadmap for both requesting Buy America waivers and challenging them when the administrative record does not adequately support the agency’s decision.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
