A Primer on the Federal Trails Act

This Article is written by Owners’ Counsel of America for general informational purposes only.  It is intended to assist landowners in understanding some of the basic aspects of the federal Trails Act and rails-to-trails taking claims.  This Article is not to be viewed as providing legal advice or to be considered as a substitute for consulting with an experienced eminent domain lawyer on the matters covered herein.

First, some history….

The development of rail lines allowed America to expand across the entire continent.  But by 1980, when Congress loosened restrictions on a railroad’s right to abandon non-productive rail lines, the railroad industry was financially strapped and in decline. Once the restrictions were lifted, the rate of rail abandonments by major carriers accelerated dramatically across the country.  As the Supreme Court observed, “In 1920, the Nation’s railway system reached its peak of 272,000 miles; [but by 1990] only about 141,000 miles [were] in use, and experts predict that 3,000 miles will be abandoned every year through the end of [the 20th] century.” Preseault v. I.C.C., 494 U.S. 1, 8 (1990). The amount of land at stake was considerable, since railroad corridors often include the land within fifty to one-hundred feet on either side of the railroad tracks.  This translates to millions of acres nationwide.

What is the Federal Trails Act?

In the early 1980s, concerned about losing railroad corridors to abandonment should the need for their use arise in the future, Congress devised a scheme whereby railroad corridors could be preserved, while allowing an interim use as public recreational hiking and biking trails.  Although this was seen as a win-win solution for Congress, the railroads, and the recreationalists— it was a losing proposition for landowners who lost the right to reclaim their own land once the railroad corridor was abandoned. Nonetheless, in 1983 Congress enacted the National Trails System Act Amendments of 1983 (Trails Act). 

Essentially, the Trails Act allows railroads to transfer control over unprofitable rail lines to local governments or private entities (called a “trail group” or “trail user”) to be converted into public recreational trails. The process of preserving railroad corridors for possible future railroad reactivation, while allowing a recreational trail as an interim use, is called “railbanking.”

Are Railroads all the same for purposes of the Trails Act?

It is important to understand that not all railroad lines and corridors are the same in terms of their creation, development, and operation. Moreover, the type and nature of the railroad line will dictate how it should be treated, both for purposes of administering the Trails Act, and also for purposes of determining whether federal or state law applies.

(a) Interstate Commerce Rail Lines

In the years following the Civil War, railroads were privately owned and entirely unregulated.  However, in 1887, Congress passed the Interstate Commerce Act, making the railroads the first industry subject to federal regulation.  Today, many of these federally regulated, common carrier rail lines are the subject of trail conversions under the Trails Act.

(b) Outside Interstate Commerce or Private Railroads

Rail lines that have never been a part of the interstate commerce system, such as private tracks or some commuter trains, are more likely to be governed by state law.  These private grants of property interest require a case-by-case analysis and to resolve disputes may also require the filing of a quiet title action.

Railroads acquired property rights in different ways

If the railroad actually owns all the rights to the land underlying its railroad corridor, it is free to sell its interest to a trail group for conversion to a recreational trail, and the adjacent landowners would not be entitled to compensation because the land was not theirs. However, many grants of railroad easements were “for railroad use” only. Other landowners conveyed what are called “defeasible fees,” meaning the landowner retained a reversionary interest upon either a change of use or ownership. The practical implication of these conveyances is that, but for a conversion under the Trails Act, any change in ownership or a termination of railroad use would allow the fee simple property owner (i.e. the landowner) to take the land back free and clear of the railroads prior encumbrance. 

Is a trail conversion a “taking” requiring payment of “just compensation”?

As nice as the Rails to Trails program may sound to some members of the public, there is a problem that must be acknowledged:  most of the abandoned railroad tracks run over private property, and trail conversions create public parks that invite anyone – joggers, strollers, bicyclists, and countless others – to cross private property.  The creation of these public parks are takings of private property for which the Constitution requires the government to pay “just compensation” to the underlying landowners.  Courts have ruled that it is the federal government (not the trail group, railroad, or state or local governments) that must pay for Trails Act rails-to-trails conversions.

Aggrieved landowners may file a “takings” claim against the United States under the Fifth Amendment to the U.S. Constitution, which requires the government to pay “just compensation” when it “takes” private property for a public use. The federal Tucker Act, 28 U.S.C. § 1491(a), designates a specialized federal court — the U.S. Court of Federal Claims — to resolve “takings” claims against the United States.  In addition, under the “Little Tucker Act,” claimants seeking compensation from the federal government under $10,000 can be heard by a federal district court in their own state.  28 U.S.C. § 1346(a)(2).

Be prepared for the Government to aggressively defend a Trails Act taking 

The U.S. Department of Justice’s Environment and Natural Resources Division litigates Trails Act taking cases on behalf of the government.  The litigation strategy of this department is multi-layered and generally involves (1) not offering landowners compensation in advance of takings under the Trails Act (2) waiting instead for individual landowners to sue the government for the taking (3) aggressively fighting landowner taking claims in court and (4) if landowners prevail on their taking claims, arguing that little, if any, compensation is due for the conversion. As a result, landowners seeking to challenge these takings need to understand what they may be up against before deciding whether to litigate their claims. Careful consultation with an experienced lawyer in such matters is therefore of critical importance. 

What is the Rails to Trails Conservancy? 

Since its inception in 1986, the Rails to Trails Conservancy (RTC) has been the primary advocate for the conversion of unused railroad corridors into multi-use trails. The RTC claims over a million supporters across the country, supports local governments and trail groups in rail-trail conversions. One of its signature projects is called the Great American Rail-Trail, by which it hopes to create a unified system of multi-use trails that span the entire country.

The RTC files amicus briefs in many Trails Act taking cases. Some of the positions they have taken in these cases seek to impose standards that would make it more difficult for landowners to establish a takings claim or to obtain compensation for the railroad conversion. 

What are some things landowners can do when dealing with a Rails to Trails Conversion?

Educate yourself about the railroad corridor extending through your property

If you have a railroad line or corridor extending through your property educate yourself about the who, what, and how it got to be there. Although some of these questions are difficult to answer without the assistance of an experienced lawyer, there are many things you can find out simply by looking at your own property and title documents. Start by examining these documents to acquire as much information as possible about the nature and scope of rights the railroad may have in your property so you have some basic understanding of the facts before deciding what you should do.

Pay attention and monitor the railroad line across your property.

The tricky thing about rails-to-trails cases is that the government does not tell you that it is taking your property for the rail-trail conversion, and your time is limited for filing a claim.  When the government allows a trail-operator (such as a state or municipal government or a private entity) to convert an abandoned railroad to a recreational trail, your claim accrues when the government issues an order (called a Notice of Interim Trail Use or Abandonment).  This Notice starts the clock ticking on your ability to file a claim for the taking of your land and not the date when construction of the trail actually starts, which could be years later. Thus, by the time you may see people in your back yard clearing brush and making the trail, it could already be too late.  When you first hear a trail may be created, you should contact a qualified and experienced attorney as soon as possible.

Don’t assume you can’t file a claim or that it’s not worth the trouble.

Many landowners choose not to file a claim for compensation because they believe the railroad may not be on their property or that the compensation they might obtain is not worth the trouble of filing a claim.  You should not assume either of these facts. 

Sometimes a railroad line to be converted into a trail is on the other side of a road or street from your home, and you may think it’s not on your property.  But most roads and streets are only easements (as are railroad lines), so your property may extend beneath and across the road and reach the railroad.

Furthermore, the compensation you may receive for filing a claim is often more than you would expect.  Railroad rights-of-way are sometimes as wide as 100 feet from the center of the tracks on each side of the tracks.  Even if you own a small home, the land encompassed within the railroad right-of-way is significant.  If you own a farm or ranch, the area likely comprises several acres.  Moreover, in most instances you are also entitled to “severance damages,” which are additional damages you must be paid for the diminution in the value of your entire property due to the presence of the recreation trail. 

Hire only qualified and experienced counsel.

Only a very few attorneys nationwide possess the qualifications and experience necessary to represent you in rails-to-trails taking cases.  OCA attorney Thor Hearne personally pioneered this area of law, and has successfully brought and won these claims for over twenty years.  Rails-to-trails taking claims fall within a very specialized area of eminent domain and constitutional law and are usually filed in a special federal court in Washington, DC – the United States Court of Federal Claims – which requires lawyers to join its own Bar Association. 

These cases involve federal court interpretation of the specific property law within the state where the trail is created and interpretation of century-old documents that must be obtained from the both the National Archives (federal railroad valuation maps and schedules) and county recorders’ offices (deeds relevant to your property and the original railroad company).