Termination of railroad use was not an abandonment of railroad's easement

[Ian Wilson]

A new railroad right-of-way case with a brief from Professor Dale Whitman

Recent development
Loveridge v. United States, 2020 WL 5587355 (Fed. Cl. Sept. 18, 2020)
Taking claim rejected, where railroad did not fully abandon right-of-way
Prepared by Dale Whitman

There have now been dozens of cases in the Court of Claims involving claims for compensation, where a railroad has abandoned its right-of-way easement and a state or local government agency has converted it into a hiking and biking trail. These cases are based on the argument that the route under the original easement was limited to railroad use, and that abandonment for railroad use terminates the easement. Hence, when a state or local agency then puts the trial to non-railroad uses, it is liable in inverse condemnation for the new activity. Because the Surface Transportation Board, a federal agency, typically issues a Notice of Interim Trail Use in these cases, the federal government is also liable for the taking.

The present case, Loveridge, illustrates that these results do not always follow. In this case the Court of Claims had previously found that the scope of the easement was broader than usual. “The court determined that the five deeds relevant to this opinion conveyed broad easements to the [railroad's] predecessor with no language restricting the purposes for which the right of way easements may be used, and that Oregon law therefore permitted future use of these easements as a trail.”

The court pointed out that abandoning railroad use (which the railroad and government admitted had occurred) was not necessarily abandonment for all purposes. Specifically, the railroad had participated in the development of an interagency agreement to convert the right-of-way to a trail. It had also granted use agreements for roads over the right-of-way to private parties, and it retained the right to grant telephone and fiber optic line rights. These activities indicated that the railroad had not abandoned all of use of the easement, and therefore the easement wasn’t terminated. Because trail use was within the scope of the easement, there was no taking and no compensation was owing to the underlying fee owners.

COMMENT. The case illustrates that the scope of the original easement is critically important, and that if the scope is broad enough to allow trail use, the compensation claim of the fee owners will be defeated.