Burgoyne, LLC v. Chi. Terminal R.R. Co.
| Decision Date | 25 June 2020 |
| Docket Number | No. 1-19-0098,1-19-0098 |
| Parties | BURGOYNE, LLC, an Illinois Limited Liability Company, Plaintiff-Appellant, v. CHICAGO TERMINAL RAILROAD COMPANY, an Illinois Corporation, and Iowa Pacific Holdings, LLC, an Illinois Limited Liability Company, Defendants-Appellees (The City of Chicago, a Municipal Corporation, Intervenor-Appellee). |
| Court | United States Appellate Court of Illinois |
George S. Bellas and Misty J. Cygan, of Bellas & Wachowski, of Park Ridge, for appellant.
Mark A. Flessner, Corporation Counsel, of Chicago (Benna Ruth Solomon, Myriam Zreczny Kasper, and Elizabeth Mary Tisher, Assistant Corporation Counsel, of counsel), for intervenor-appellee.
No brief filed for other appellees.
¶ 1 This appeal arises from a dispute between a rail carrier and the owner of land over which the rail carrier held an easement to operate its rail line. Contending that the easement terminated due to nonuse, the landowner, Burgoyne, LLC (Burgoyne), sued the rail carrier, Chicago Terminal Railroad Company, and its parent company, Iowa Pacific Holdings, LLC (which we will collectively call CTR), to enforce its reversionary interest in the property. While the case was pending, CTR received permission from the federal agency that oversees rail transportation to transfer its right-of-way to the City of Chicago (City) for use as a recreational trail. The City then intervened and both it and CTR filed motions to dismiss Burgoyne's suit as preempted under federal law. The circuit court granted the motions, and Burgoyne now appeals. For the reasons that follow, we affirm.1
¶ 4 This case concerns the preemptive effect of two federal statutes: the ICC Termination Act of 1995 (ICCTA) (codified at 49 U.S.C. § 10101 et seq. ) and the National Trails System Act (Trails Act) (codified at 16 U.S.C. § 1241 et seq. ). The ICCTA vests the United States Surface Transportation Board (STB or Board) with exclusive jurisdiction over "transportation by rail carriers" and the "abandonment" of rail lines. 49 U.S.C. § 10501(b) (2018). "[T]he remedies provided under [the ICCTA] with respect to regulation of rail transportation are exclusive and preempt the remedies provided under Federal or State law." Id.
¶ 5 Under the ICCTA, a rail carrier may abandon a rail line "only if the Board finds that the present or future public convenience and necessity require or permit the abandonment." 49 U.S.C. § 10903(d) (2018). An application for authorization to abandon a line may be filed by either the rail carrier or an interested third party, such as an adjacent landowner with a claim to a reversionary interest in the railroad's right-of-way. Thompson v. Texas Mexican Ry. Co. , 328 U.S. 134, 145, 66 S.Ct. 937, 90 L.Ed. 1132 (1946) ; City of South Bend v. Surface Transportation Board , 566 F.3d 1166, 1168 (D.C. Cir. 2009) ; see Preseault v. Interstate Commerce Comm'n , 494 U.S. 1, 8, 110 S.Ct. 914, 108 L.Ed.2d 1 (1990) (). An application filed by a third party is called an application for adverse abandonment. Howard v. Surface Transportation Board , 389 F.3d 259, 261 (1st Cir. 2004). If the Board determines that the public convenience and necessity support abandonment, it may either "approve the application as filed" or "approve the application with modifications and require compliance with conditions that [it] finds are required by public convenience and necessity." 49 U.S.C. § 10903(e)(1). The Board maintains jurisdiction over a rail line, and the line remains part of the national rail network, until the Board issues an unconditioned certificate of abandonment ( Hayfield Northern R.R. Co. v. Chicago & North Western Transportation Co. , 467 U.S. 622, 633, 104 S.Ct. 2610, 81 L.Ed.2d 527 (1984) ) and the rail carrier notifies the Board that it has consummated the abandonment ( 49 C.F.R. § 1152.29(e)(2) (2019) ).
¶ 6 The second federal statute at issue, the Trails Act, was enacted to create a national system of recreational trails. See 16 U.S.C. § 1241 (2018). Congress amended the Trails Act in 1983 (see Pub. L. 98-11, § 208, 97 Stat. 42, 48 (1983)) to allow for unused railroad rights-of-way to be converted to recreational trails on an interim basis as an alternative to abandonment. See 16 U.S.C. § 1247(d) (2018). The purpose of the amendment was to promote the development of recreational trails while preserving established rail corridors for possible future reactivation of rail service. Preseault , 494 U.S. at 17-18, 110 S.Ct. 914. To that end, when an abandonment application is filed, a state, local government, or private organization acting as a "trail sponsor" may submit a request to use the right-of-way for interim trail use. 49 C.F.R. § 1152.29(a). The trail sponsor must be willing to assume responsibility for the right-of-way and acknowledge that its interim trail use will be subject to possible future reactivation of the right-of-way for rail service. 49 C.F.R. § 1152.29(a)(2), (3). If the rail carrier is willing to negotiate a trail use agreement, and the conditions for abandonment are otherwise satisfied, the STB will issue a certificate of interim trail use or abandonment (CITU), allowing the parties to negotiate an interim trail use agreement. 49 C.F.R. § 1152.29(b)(1)(ii). If the parties are unable to reach an agreement on interim trail use, the rail carrier will then be authorized to abandon the line. See Preseault , 494 U.S. at 7 & n.5, 110 S.Ct. 914.
¶ 7 If the rail carrier and trail sponsor do come to an agreement, the rail carrier may transfer the right-of-way to the trail sponsor for interim trail use, "subject to restoration or reconstruction for railroad purposes." 16 U.S.C. § 1247(d) ; see Preseault , 494 U.S. at 7, 110 S.Ct. 914. As noted above, railroads often hold their rights-of-way under easements that are limited to use for railroad purposes. Preseault , 494 U.S. at 8, 110 S.Ct. 914. The terms of these easements (and state property law) frequently "provide that the property reverts to the abutting landowner upon abandonment of rail operations." Id.
If rails-to-trails conversions were to trigger such reversionary interests, however, it would largely impede the Trails Act's dual goals of creating recreational trails and preserving established rail corridors for future reactivation of rail service. To address these problems, the Trails Act (as amended) provides that interim trail use "shall not be treated, for purposes of any law or rule of law, as an abandonment of the use of such rights-of-way for railroad purposes." 16 U.S.C. § 1247(d). In other words, when a right-of-way held under a limited-use easement is transferred for interim trail use, the Trails Act "prevent[s] property interests [in the right-of-way] from reverting under state law." Preseault , 494 U.S. at 8, 110 S.Ct. 914. In such cases, the Trails Act effects a taking of the abutting landowner's reversionary interest, for which it may seek just compensation in the United States Court of Federal Claims. Id. at 11-12, 110 S.Ct. 914.
¶ 9 Burgoyne owns a parcel of land near the site of the planned Lincoln Yards development in Chicago. The property is bounded by North Avenue to the south, Kingsbury Street to the northeast, and the North Branch of the Chicago River to the west. A single, mainline railroad track extends across a portion of the property. The track is part of a larger rail line spanning approximately 2.875 miles, which originates northwest of the property, at Union Pacific's North Avenue Yard, and proceeds east and south to a terminus at the southern end of Goose Island, south of the property.
¶ 10 Burgoyne purchased the property in 2000 from CMC Real Estate Corporation (CMC). In 1987, CMC granted an easement across the property for railroad purposes to Soo Line Railroad Company (Soo Line). The corrective deed conveying the easement provided that the easement would terminate automatically if it was not used in the active operation of a railroad for 12 consecutive months. The deed further provided that, upon termination of the easement, Soo Line would remove the tracks and other railroad equipment from the property and execute documentation to evidence the easement's termination. The deed was issued under the supervision of the federal bankruptcy court overseeing the railroad reorganization proceedings for CMC's predecessor-in-interest, the Chicago, Milwaukee, St. Paul and Pacific Railroad Company. In 2006, CTR acquired Soo Line's interest in the rail line at issue, including the easement across Burgoyne's property.
¶ 11 In August 2016, Burgoyne notified CTR that the easement had terminated because it had not been used in active railroad operations for 12 consecutive months. Burgoyne instructed CTR to remove the tracks and other railroad equipment from the property and reserved its right to request that CTR execute documentation evidencing the termination. CTR disputed that the easement had terminated and refused to remove its tracks and other equipment from the property. Burgoyne responded by erecting a fence around the property and across the tracks.
¶ 12 On two occasions in April 2017, CTR entered Burgoyne's property and cut down the fence. Each time, Burgoyne reinstalled the fence. After the second such incident, Burgoyne commenced the present action in the circuit court, alleging that the easement across its property had terminated under the terms of the corrective deed. Burgoyne's complaint sought to enjoin CTR from further damaging or removing its fencing. It also sought an order directing CTR to remove the railroad tracks from the property...
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Save Our Ill. Land v. Ill. Commerce Comm'n
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