Rails-to-Trails Takings Claims

The nation’s interstate railway system is shrinking as railroads abandon track every year.

The National Trails System Act Amendment of 1983 (the “Rails-to-Trails Act”) provides that trails should be established near urban areas and within scenic areas of the Nation for outdoor recreation “to promote the preservation of, public access to, travel within, and enjoyment and appreciation of the open-air, outdoor areas and historic resources of the Nation[.]”  16 USC § 1241, et seq.

The purpose of the Rails-to-Trails Act is to preserve unused railroad rights-of-way by converting them into recreational trails.

The United States Department of Transportation, Surface Transportation Board has exclusive and plenary authority over the construction, operation, and abandonment of most of the nation’s rail lines.

A taking occurs, pursuant to the Trails Act, when the Surface Transportation Board issues a Notice of Interim Trail Use to suspend the abandonment of the rail line by a railroad and preserve it for future active railroad use.  See 49 CFR 1152.29 (“Prospective use of rights-of-way for interim trail use and rail banking”).

The government must provide just compensation under the Fifth Amendment Takings Clause if the issuance of a Notice of Interim Trail Use results in the taking of private property.  A property owner’s interest in the property at issue is a prerequisite to a taking.  This required interest is known as standing.

Property rights of parties in rails-to-trails cases are analyzed under relevant state law.

On December 28, 2015, the United States Court of Appeals for the Federal Circuit issued a Rails-to-Trails taking decision ultimately upholding the claimants’ standing entitling them to just compensation.  Rogers v. United States, Nos. 2013-5098, 2013-5102 (Fed. Cir. 2015).

The case is available here: http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/13-5098.Opinion.12-22-2015.1.PDF

The issue was whether the railroad company, from which claimants ultimately obtained their deeds, acquired fee simple title in the land within the rail corridor at issue.  This issue turned on Florida law’s interpretation of deeds and the property rights of railroad companies.  The Federal Circuit found that there was a lack of Florida case law on this and certified the issue to the Florida Supreme Court.

The Florida Supreme Court, and thus the Federal Circuit, found that a railroad can acquire fee simple title to a railroad right-of-way “and that no statute, state policy, or factual considerations prevails over the language of the deeds when the language is clear.”

Rails-to-Trails cases are also found in New York.

For example, the Highline recreational trail in New York City is a product of Rails-to-Trails.  See New York City Council v. City of New York, 2002 NY Slip Op 40062(U), 2002 N.Y. Misc. LEXIS 232 (Sup. Ct. NY County 2002), rev’d, 4 A.D.3d 83 (1st Dep’t 2004).  The Highline is a public park built on a former elevated rail corridor in the West Chelsea neighborhood of the Borough of Manhattan, New York City.

The Highline case also sparked takings claims.  W. Chelsea Bldgs. v. United States, 109 Fed. Cl. 5 (Fed. Cl. 2013), aff’d, 554 Fed. Appx. 942 (Fed. Cir. 2014).  Five of the claimants waived any right to just compensation from the United States when they entered into Covenant Not to Sue Agreements with the City of New York in exchange for certain development rights alongside the Highline.  A sixth claimant was found not to have standing.  The seventh and final claimant also entered into the Covenant Not to Sue Agreement with New York City for development rights but disputed the degree to which the Highline affected the value of the property.  Romanoff Equities, Inc. v. United States, 119 Fed. Cl. 76 (Fed. Cl. 2014).  The claimant argued  that its property would have been more valuable if it were not encumbered by the Highline easement and the government argued that it would have been much less valuable, as it would not have received the same zoning adjustments.

The Court of Federal Claims reviewed New York easement law and dismissed the takings claim.

Posted in Eminent Domain, New York, Rails-to-Trails
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