Abandoned Rail Lines – Issues for Abutting Landowners

Overview

Federal law has established a procedure that a railroad must go through when abandoning a rail line and its corridor.  49 U.S.C. §10903.  In the 1970s, the Congress specified that before abandonment can be completed, other entities can intervene to preserve the corridor for future use.  16 U.S.C. §1247(d).  This process creates numerous issues for farmers, ranchers and other rural landowners along the corridor. 

A couple of recent cases highlighting the issues that can arise for adjacent property owners when a rail line is abandoned – it’s the topic of today’s post.

“Railbanking” – Background

The railbanking process allows a railroad to negotiate with another entity which would then assume the financial and managerial responsibility for the corridor by operating a recreational trail on it.  See, e.g., Presault v. Intertstate Commerce Commission, 494 U.S. 1 (1990).  But, before the trail operator can start negotiations with the railroad, it must file a railbanking petition.  See 49 C.F.R. §1152.29(a).  The trail operator must state that it is willing to assume full responsibility for managing the right-of-way and assume any legal liability for the transfer or use of the right-of-way.  The trail operator also must pay any and all taxes on the right-of-way.  In addition, the trail operator must acknowledge that the land will remain subject to possible reconstruction and reactivation of the right-of-way for rail service.  Once these certifications are made, then the trail group can negotiate with the railroad.  Any agreement that is struck is then submitted to the Surface Transportation Board (STB) which will then issue a Notice of Interim Trail Use (NITU).  The NITU allows the railroad to discontinue service without abandonment and allows the trail operator to use the corridor for use as a recreational trail. 

The issuance of a NITU can result in a taking of property owned by the original grantor of the corridor easement.  See, e.g., Presault v. Interstate Commerce Commission, 494 U.S. 1 (1990).  That’s because it’s often the case that the railroad merely owns an easement and not an outright fee simple.  In that situation, state law commonly provides that the easement is to revert (go back) to the abutting property owner when the railroad ceases operation.  But, because interim trail use under the railbanking program is a discontinuance rather than an abandonment, the easement doesn’t revert to the abutting landowners.  A taking may also occur if the original easement grant to the railroad under state law is not broad enough to allow for a recreational trail.  When a trail is operated in that situation, it’s a taking of a new easement requiring compensation under the Fifth Amendment.  See, Caquelin v. United States, 959 F.3d 1360 (Fed. Cir. 2020). 

Recent Cases

Central Kansas Conservancy, Inc., v. Sides, 56 Kan. App. 2d 1099, 44 P.3d 337 (2019), rev. den., No. 119,605, 2019 Kan. LEXIS 527 (Kan. Sup. Ct. Dec. 19, 2019), cert. den. sub. nom., Sides v. Central Kansas Conservancy, Inc., 140 S. Ct. 2741 (2020). 

In this case, the Union Pacific Railroad acquired a right-of-way over a railroad corridor that it abandoned in the mid-1990s. At issue in the case was a 12.6-mile length of the abandoned line between McPherson and Lindsborg, Kansas. NITU was issued in the fall of 1995. The corridor was converted into a trail use easement under the National Trails System Act. In 1997, Union Pacific gave the plaintiff a "Donative Quitclaim Deed" to the railroad’s easement rights over the corridor, with one-quarter mile of it running through the defendant’s property at a width of 66 feet. Pursuant to a separate agreement, the plaintiff agreed to quit claim deed its rights back to the railroad if the railroad needed to operate the line in the future. By virtue of the easement, the plaintiff intended to develop the corridor into a public trail.

In 2013, the plaintiff contacted the defendant about developing the trail through the defendant’s land. The defendant had placed machinery and equipment and fencing in and across the corridor which they refused to remove. In 2015, the plaintiff sued to quiet title to the .75-mile corridor strip and sought an injunction concerning the trail use easement over the defendant’s property. The defendant admitted to blocking the railway with fencing and equipment, but claimed the right to do so via adverse possession or by means of a prescriptive easement. The defendant had farmed, grazed cattle on, and hunted the corridor at issue since the mid-1990s. The defendant also claimed that the plaintiff had lost its rights to the trail because it had failed to complete development of the trail within two years as the Kansas Recreational Trail Act (KRTA) required.

In late 2016, the trial court determined that the two-year development provision was inapplicable because the Interstate Commerce Commission had approved NITU negotiations before the KRTA became effective in 1996. The trial court also rejected the defendant’s adverse possession/prescriptive easement arguments because trail use easements are easements for public use against which adverse possession or easement by prescription does not apply.

During the summer of 2017 the plaintiff attempted work on the trail. When volunteers arrived, the defendant had placed equipment and a mobile home on the corridor preventing any work. The plaintiff sought a "permanent prohibitory injunction and permanent mandatory injunction." The defendant argued that he had not violated the prior court order because "[a]ll the Court ha[d] done [was] issue non-final rulings on partial motions for summary judgments, which [were], by their nature, subject to revision until they [were] made final decisions." Ultimately, the trial court granted the plaintiff’s request for an injunction, determined that the defendant had violated the prior summary judgment order, but also held that the plaintiff had not built or maintained fencing in accordance with state law.

On appeal, the appellate court partially affirmed, partially reversed, and remanded the case. The appellate court determined that the defendant did not obtain rights over the abandoned line via adverse possession or prescriptive easement because such claims cannot be made against land that is held for public use such as a recreational trail created in accordance with the federal rails-to-trails legislation. The appellate court also determined that the plaintiff didn’t lose rights to develop the trail for failing to comply with the two-year timeframe for development under the KRTA. The appellate court held that the KRTA two-year provision was inapplicable because a NITU was issued before the effective date of the KRTA. However, the appellate court determined that the plaintiff did not follow state law concerning its duty to maintain fences. The appellate court held that Kan. Stat. Ann. §58-3212(a) requires the plaintiff to maintain any existing fencing along the corridor and maintain any fence later installed on the corridor. In addition, any fence that is installed on the corridor must match the fencing maintained on the sides of adjacent property. If there is no fencing on adjacent sides of a landowner’s tract that abuts the corridor, the plaintiff and landowner will split the cost of the corridor fence equally.

The appellate court remanded the case for a determination of the type and extent of fencing on the defendant’s property, and that the plaintiff has the right to enter the defendant’s property to build a fence along the corridor. Any fence along the corridor is to be located where an existing fence is located. If no existing fence exists along the corridor, the corridor fence is to be located where the plaintiff’s trail easement is separated from the defendant’s property.

The Kansas Supreme Court declined to review the case, and the U.S. Supreme Court later decline to grant certiorari. 

Behrens, et al. v. Heintz, et al., 59 F. 4th 1339 (Fed. Cir. 2023)

This case involved a 144.3-mile rail line in Missouri that had been in operation for over 100 years.  The railroad had acquired the necessary easements for the corridor via condemnations and agreements with the abutting landowners.  The easements were granted to the railroad in 1901 and 1902.  18 of the 19 deeds containing the easements did not limit the use of the easement for railroad purposes.  Ultimately, a successor-railroad to the easements sought to discontinue service and abandon the railway.  In late 2014, the Missouri Department of Natural Resources filed a request to intervene in the abandonment proceeding seeking to utilize the easement for interim trail use on the corridor.  Five years later, the STB was notified that a trail use agreement had been executed in accordance with the NITU and the STB regulations.

The plaintiffs, owners of the abutting land along the corridor, filed a Takings claim in 2015 in the U.S. Court of Federal Claims on the basis that the railroad originally acquired easements under Missouri law rather than a fee interest and that the easements were for railroad purposes only.  Accordingly, the plaintiffs claimed that the conversion of the easements to recreational trail use was beyond the scope of the easements and constituted a Taking.  The Court of Federal Claims agreed that the property interest acquired involved easements, but that interim trail use was permissible.  Upon reconsideration, the Court of Federal Claims again held that no Taking had occurred because the scope of the easements was broad enough to allow for trail use.  The plaintiffs appealed.

On appeal, the appellate court determined that the railroad had, under Missouri law, undisputedly acquired easements and not fee simple interests.  See Mo. Rev. Stat. §388.210(2).  As to the scope of the easements, the appellate court determined that Mo. Rev. Stat. §388.210(2) explicitly limited the scope of the 18 easements to “railroad purposes” only.  That statute, the appellate court noted, defines the purposes of such voluntary grants to railroads as the ones involved in the case “to aid in the construction, maintenance and accommodation of the railroads.”  The appellate court noted that the Missouri Supreme Court had construed this language to mean that such grants are for “all railroad purposes.”  Brown v. Weare, 152 S.W.2d 649 (Mo. Sup. Ct. 1941).

On the takings issue, the appellate court determined that the issue was whether the trail use and railbanking were “railroad purposes” and, as a result, within the scope of the easements.  On that issue, the appellate court cited a Missouri case finding that trail use is not included in the meaning of “railroad purposes.”  Boyles v. Missouri Friends of Wabash Trace Nature Trail, Inc., 981 S.W.2d 644 (Mo. Ct. App. 1998).  The appellate court also cited one of its own prior opinions holding that trail use is not a railroad purpose under other states’ laws.  See, e.g., Presault v. Interstate Commerce Commission, 100 F.3d 1525 (Fed. Cir. 1996)(construing Vermont law); Toews v. United States, 376 F.3d 1371 (Fed. Cir. 2004)(construing California law).  The appellate court also noted that the speculative possibility that the trail would return to rail use did not fall within the scope of the easements that were granted for railroad purposes.  There simply was no realistic possibility the future rail use would occur.  Likewise, the appellate court noted that the easements were granted for the benefits of the railroads to operate a rail line, not the benefit of “some future unidentified entity that might receive the easement in the future.”  The preservation of a tract of land (corridor) for future rail use under the National Trail System Act does not transform an interim trail use into a “railroad purpose.” 

Accordingly, the appellate court held that a Fifth Amendment Taking had occurred, reversed the Court of Federal Claims, and remanded the case to that court for a determination of damages on the Takings issue.

Conclusion

Recreational trails operating on abandoned rail lines present numerous legal issues for abutting landowners.  The constitutional takings issue is a major, but other issues can arise involving fencing, trash and liability for personal injury.  Expect this issue to remain an important one for landowners along abandoned railroad corridors.