In his latest Daily Journal column, Manatt Appellate Senior Counsel Michael Berger discussed a new development in the “rails-to-trails” concept and a recent U.S. Court of Federal Claims decision that property owners have a right to compensation when railroad land easements are used for anything other than track systems.
When railroad companies no longer needed the extensive track systems they once did, they sought to sell the rights-of-way on the land easements the tracks were built on, but state courts determined the easements should be reverted to the original property owner because the easements were acquired to be used only for railroad purposes. Congress attempted to step in with the Rails-to-Trails Act, which purported to allow a railroad company to convert railroad easements to public use hiking trails with the caveat that the company can reclaim the easement “if it decided at any time in the future that it wanted to reinstitute rail service,” Berger said, thus circumventing the decisions applying state property law to “abandoned” property.
In the first legal challenge to the law, Berger represented a Vermont couple whose land was subject to a railroad easement in the landmark case Preseault v. United States before the U.S. Supreme Court, which ultimately led to a holding that they were entitled to compensation for the new taking. According to Berger, despite the outcome of this precedent-setting case, the federal government continued to deny compensation and litigate claims for numerous rail easements, leading to the most recent development in Nicholson v. United States in which the judge laid out the long-established rail-to-trail takings history and decided the plaintiff had showed ownership and interference and was due compensation.
“Concluding that the plaintiffs had shown those things, the court said simply, ‘This begs the question, what are we doing here?’” Berger said. “What, indeed? It is time for the courts to put a stop to this governmental hassling of property owners and accept that it has essentially lost the rails-to-trails war and focus on reaching amicable resolutions to these cases.”
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