Rails-to-Trails Takings: Property Owners’ Rights When Land Use Changes

In 1983, Congress enacted the federal National Trails System Act Amendment (known as the “Rails-to-Trails Act”) in order to preserve abandoned railroad rights of way by converting them into public recreational trails. Trails established under the Rails-to-Trails Act can range from walking and biking trails to green spaces for public use, such as the New York City High Line which was the subject of a recent takings case in the U.S. Court of Appeals for the Federal Circuit and a blog post.

The High Line case, like many others, focused on the adjacent landowners’ rights under the Fifth Amendment to the U.S. Constitution. While Rails-to-Trails cases involve situations where the land may have been encumbered by an easement, conversion of that easement to a different use is a taking of the landowner’s interest in the land requiring payment of just compensation.

Why Rails-to-Trails Conversions Require Payment of Just Compensation

When the government takes private property through its power of eminent domain, the Fifth Amendment requires payment of just compensation. What constitutes a “taking” is not always clear, and in many instances this is one of the central issues in eminent domain and inverse condemnation litigation.

However, when the government converts an abandoned railroad right of way into a public trail, some courts have held that this constitutes a taking of the adjacent landowner’s property under the Fifth Amendment. As a result, property owners affected by Rails-to-Trails conversions may be entitled to just compensation – despite the fact that their land was once encumbered by a railroad right of way.

If a rail company no longer has use for its railroad right of ways, it may abandon the rail line.  When the line is abandoned, ownership can revert back to the underlying landowner, usually the adjacent property owner.  An adjacent landowner may have a reversionary interest in the land if the railroad right of way was granted to the company as an easement for the purposes of operating the railroad.  In such situations, when a railroad abandons the line, it gives up its easement rights to use the land and “fee simple” – complete and exclusive – ownership reverts to the underlying landowner.

Courts have held that these landowners are entitled to just compensation because the landowners retained a reversionary interest in the land underlying a railroad right of way granted as an easement only.

Recent Rails-to-Trails Takings Cases

Nonetheless, Rails-to-Trails takings cases often end up in court. In the High Line case, the federal government argued that six words in the easement (which a prior owner granted in 1932) justified the conversion without just compensation. The landowners disagreed and their attorneys offered a different interpretation of the easement while also arguing that the government’s assertions were contrary to state law.

In another recent case, a group of landowners sought compensation when the government undertook a Rails-to-Trails conversion on their properties in Florida. The government refused to pay on the grounds that the railroad had not obtained an easement, but rather “fee simple” (outright) ownership in the subject property. Unfortunately, the federal trial court, federal appellate court and the Florida Supreme Court all agreed, and as a result the appellate court affirmed the denial of just compensation. The landowners are currently appealing the case to the U.S. Supreme Court.

Marvin M. Brandt Revocable Trust v. United States

If the Supreme Court accepts the case, it will likely consider the landowners’ claims in light of its decision in the 2014 case of Marvin M. Brandt Revocable Trust v. United States.  In this Rails-to-Trails case, the government sought to preserve the railroad right of way by filing a quite title action arguing that the federal government owned the land underneath the right of way to avoid paying the adjacent private landowner just compensation. Owners’ Counsel of America jointly filed an amici brief with the National Federation of Independent Business (NFIB) Small Business Legal Center in support of Brandt. The Supreme Court ultimately ruled that the landowner was the reversionary fee simple owner and entitled to just compensation for the taking of the property for the trail conversion.

Contact Owners’ Counsel of America About Your Rails-to-Trails Case

If you own land that is subject to an abandoned railroad right of way that is desired for public use as a trail, an eminent domain attorney with Owners’ Counsel of America can help you protect your Constitutional rights. To speak with a local attorney about your case, contact Owners’ Counsel of America today.

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