Eminent Domain Report

We’ve previously reported on the “Rails to Trails” process by which old railroad corridors are being abandoned and converted into other uses, such as hiking, biking or other trail purposes, and the potential ability of adjacent property owners to seek just compensation in certain circumstances. But what happens when the railroad is owned in fee by the railroad, or alternatively, where the railroad continues to operate but adds a pathway within the railroad corridor? Is compensation owed in these circumstances? 

The Nossaman team recently litigated these issues in a case where numerous property owners adjacent to a railroad corridor claimed that they owned the underlying fee interest in the corridor, and the transit agency only had an easement which precluded it from constructing a multi-use pedestrian and bicycle pathway. The plaintiffs sought to quiet title in the underlying fee interest in the railroad corridor, and also sought compensation by claiming the pathway construction infringed on their property rights. After a multi-day trial, the court ruled in favor of Nossaman’s client, the transit agency, finding that the agency owned the railroad corridor in fee, and that regardless, the agency had the statutory authority to operate the pathway as part of its rail operations. 

Specifically, the court found that the original conveyance documents to the railroad, containing language that the owners agreed to “grant, bargain and sell” the “right of way for the construction” of the railroad “over, through, upon or across” the land, including “all the right, title and interest” of the owner, constituted a fee conveyance – not a railroad right of way easement. The court concluded there is no rule of law or presumption that a deed granting a right of way to a railroad only conveys an easement. The court relied on two rules of construction most pertinent to the interpretation of a deed: (i) Civil Code Section 1069, pursuant to which a grant is to be interpreted in favor of the grantee; and (ii) Civil Code section 1105, pursuant to which a fee simple title is presumed to be intended to pass by a grant of real property, unless it appears from the grant that a lesser estate was intended. The court further concluded that the “centerline presumption” was inapplicable given the history of the corridor conveyances, and under these circumstances, the railroad corridor was owned in fee by the transit agency.

The court further found that the transit agency’s legislation defines “rail transit works” to include “ancillary bicycle and pedestrian pathways that provide connections between and access to station sites.” Based on this legislation and testimony from the transit agency, the court concluded that the pathway encourages ridership by providing “first mile, last mile access” to train stations as pedestrians and bicyclists can use a safe route for traveling to and from the station. Additionally, the path allows maintenance workers, code enforcement officers, and emergency responders to reach remote locations without traveling on the tracks, thus not only making their access safer, but also avoiding delays in providing rail service to the public. Because the pathway enhances the safety of, enhances ridership on, and increases the efficiency of the operation of the railroad, the court held that the pathway is ancillary to the operation of the railroad and in furtherance of the railroad use of the right of way. The ongoing use of the railroad for transit purposes took the case out of the “Rails to Trails” abandonment cases, which the court concluded have no application to the operation of a pathway while transit operations continued.

The case may have significant implications across the United States, as transit agencies and railroad operators should be able to construct and operate multi-use pathways within their active railroad corridor without fear of “Rails to Trails” litigation. If you have questions on permissible railroad right of way uses, deed conveyance interpretation, or “Rails to Trails” applicability, do not hesitate to contact us.