Petition for Writ of Certiorari — Glosemeyer v. Missouri-Kansas-Texas Railroad

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89-5 64

No. CPH F SPAMOL, JR,

C4 i»?

ee aol

IN THE

Supreme Court of the United States

OCTOBER TERM, 1989

MAURICE AND DOLORES GLOSEMEYER, et al.,

Petitioners,

vS.

MISSOURI-KANSAS-TEXAS RAILROAD, et al.,

Respondents.

ON PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

PETITION FOR WRIT OF CERTIORARI

MICHAEL M. BERGER*

of FADEM, BERGER & NORTON

A Professional Corporation

12424 Wilshire Boulevard

Post Office Box 250050

Los Angeles, Califomia 90025

(213) 207-2727

Attorneys for Petitioners

Maurice and Dolores Glosemeyer, et al.

*Counsel of Record

‘

Lawyers Brief Service / Legal Printers / (213) 383-4457 / (714) 720-1510

‘a5

QUESTIONS PRESENTED

The questions in this case, presented in a different

procedural posture, are now pending before the Court in

Preseault v. ICC, Ne. 88-1076 (Certiorari granted April

24, 1989; oral argument set for November 1, 1989),

regarding the Constitutionality of 16 USC §1247(d) (the

“rails-to-trails” scheme).

1. With Certiorari granted in Preseault, should

Certiorari be granted in this case (or should considera-

tion of Certiorari be deferred pending a decision in

Preseault) either to: ©

@ ensure a result compatible with this Court’s

decision in Preseault, or

@ provide a case which raises the same Constitu-

tional issues as Preseault, but in a different

procedural posture, if Preseault is determined

not to be the appropriate vehicle for this

Court’s adjudication (as happened during the

last decade with other regulatory taking cases)?

2. When Congress enacts a statute which purports

to undo settled state property law, by an after-the-fact

redefinition of abandonment of an easement or by

pre-empting state property law regarding the abandon-

ment of easements, does the statute violate the Fifth

Amendment’s Taking Clause?

3. When Congress passes a law which effects an

unconstitutional taking of private property for public use

and prohibits the expenditure of any funds unless ex-

pressly appropriated by Congress, is declaratory or

injunctive relief an available remedy, or is the property

owner restricted to, or even permitted, an action for

compensation?

4. Is the “railbanking” concept a smokescreen for

an unconstitutional taking of property for other (non-

rail) public use when use of the program must be

preceeded by an ICC finding that the right-of-way is not

needed for future railroad use, inclusion of an abandoned

right-of-way in the trail program is solely at the discre-

tion of state agencies or private groups, not the Interstate

Commerce Commission, and the “rail-to-trail” conver-

sion decisions have nothing to do with potentially

reactivating rail service?

5. Does the deferential standard of review used in

this case by the District Court and the Court of Appeals

conflict with the standard of review announced in Nollan

v. California Coastal Commn. (1987) 483 US 825, i.e.,

careful scrutiny of government actions which take

private property?

6. If an otherwise rational and valid Congressional

enactment takes private property for public use without

compensation, may the enactment be invalidated as

violating the Taking Clause of the Fifth Amendment?

7. When Congress passes a law which retroactively

alters the terms of contracts between citizens in a way

which transfers property rights from one group of

citizens to the public for public use, has that Congres-

sional impairment of contract obligations denied the

holders of the contract rights substantive due process of

law?

8. May a state agency, pursuant to authority pur-

portedly granted by a federal statute, act without

restraint to violate the Just Compensation Clause of the

Fifth Amendment or the Impairment of Contracts Clause

of Article 1, §10 of the Constitution?

- iii -

PARTIES TO THE PROCEEDING

The parties are:

Plaintiffs (Petitioners):

Maurice and Dolores Glosemeyer; Fred and Alwera

Brodbeck; Richard and Esther Burgess; John and

Marjorie Dohr; Clarence and Onita Duenke; Ada Haase;

Roy and Phyllis Haase; Wayne and Maureen Heck;

Bernard Hellebusch; Elmer and Regina Hellebusch;

James and Patricia Hellebusch; Mrs. Bernard

Moellering; Alvin Roewe; Werner Roewe; James and

Carla Schwoeppe; Donald and Delores Vitt; Jay and

Nancy Walk, Jr.; Clarence Bergman; Harold Blaylock;

Maurine Bluhm; Clara Boessen; Ralph and Mildred

Brandt; Anne Buckley; Roy Cary; Kenneth and Loretta

Burre; Walter and Helen Burre; Albert and Esther

Dickson; Charles Dilthey; Denis Engemann; Gerald

Engemann; Bernard and Geraldine Eichelberger, Sr.;

Glen and Eleta Eichhorn; Sidney and Nadine

Eldringhoff; Irven and Margaret Ewing; Hattie Farris;

Bruce Florea; Andrew and Emilie Gerke; Anton and

Alice Gerke; Herbert Gerke; Roy and Helen Gramlich;

Clifford and Rosaline Haid; Norma and Edward

Hasselman; Erwin and Alberta Heck; Linda and Gordon

Heck; Marie and Leroy Heidbreder; Earl and Gladys

Heitmann; Gary and Patty Heldt; Randy and Kendall

Kircher; Leroy Kircher, Jr.; John and Barbara Knaus;

Randall Kollmeyer; Roman and Leona Kuchem; Leonard

and Isabel Lang; Thomas and Lana Langford; Carl

Lensing; Allan Lietzke; Earl Mallinckrodt; James and

Evalane Meyer; John Morr; Walter and Edna Nadler;

L.W. Niewald; J.M. Potter; Layton Rehmeier; Alan and

Mary Richter; Wilbur Rothgeb; Bill Rudloff, Hulda

Rueff; Herbert Schmid; Marvin Schupp; Wilbur

Schuster; Clara Siegel; Harold and Bonnie Siegel; Mary

Sly; Jim and Stephanie Sneed; John and Mary Sneed;

Robert Snoddy; Earl Summers, Cleo Tinsley; Terry

- iv -

Twenter; Price and Edna Vaughan; B.J. Wessing;

Charles Wessing; Laura Willenbring; John and Susan

Williamson, Jr.; Wilfred and Carol Wissman; Frank

Pierson; Clifford Sapp; Brenda Reeder, Alfred

Beckmeyer; Clifford Nahler; Robert Sapp; Marvin Sapp;

Ina Mae Sapp; Bud Holiman; Amy Easley; Edward and

Gloria Belt; Charles and Aurelia Bottenmuller; Bertha

Hampton; John Reeder; Sharon Beeler; Thomas

Douglass; and Douglass Farms, Inc.; Anthony Aholt,

Bernard and Virginia Altheuser; Albert Bates; Helen

Bennett; Donald Dothage; Albert Eichhorn; Elda Flatt;

Elmer Friedric; Lawerence and Anna Gerke; Norman

Gerke; Harold & Geralyn Gloe; David & Tammy

Goebel; Donald & Viola Gordon; Elmer Gregory;

Harrell Harvey; James Harvey; Alma Horner; William

and Elsie Hunt; John and Gladys Miller; May Miller;

John and Ethel Nolle; Eugene and Mary Lou Renfrow;

James and Dorothy Roddy; Norbert and Louise Schuster;

Steve and Debbie Schuster; Lyonel and _ Irene

Schweerkotting; Leonard Struckhoff; Henry, Sr. and

Theresa Struckhoff; Clyde and Sarah Twenter; Raymond

and Helen Twillman; Earl Wessing; Laura Carpenter;

Ryland Kessinger and Ellen Kessinger; Walter Moore

and Dorothy Moore; Daniel L. Schlafly; Katherine

Walsh and Edward Waish, Jr.

Defendants and Intervening Defendants (Respondents):

Missouri-Kansas-Texas Railroad, Missouri Department

of Natural Resources, an agency of the State of MO;

Frederick A. Brunner, Director Missouri Department of

Natural Resources, Conservation Federation of MO;

National Wildlife Federation; the Rails to Trails Con-

servancy; the Lewis and Clark Nature Trail Foundation;

the Sierra Club; the Paralyzed Veterans of America;

BICYCLE USA; the Lewis and Clark Heritage

Foundation; the American Hiking Society; the Katy MO

River Trail Association; the American Rivers Conser-

vation Council; United States

-V-

TABLE OF CONTENTS

QUESTIONS PRESENTED

PARTIES TO THE PROCEEDING

TABLE OF AUTHORITIES

OPINIONS BELOW

JURISDICTION

CONSTITUTIONAL AND

STATUTORY PROVISIONS

STATEMENT OF THE CASE

A. Procedural Summary and Overview

B. Factual Statement

C. The “Rails-to-Trails” Scheme

Page

iil

- vi -

Page

REASONS FOR GRANTING THE WRIT 12

THIS COURT HAS ALREADY

ACKNOWLEDGED THE IMPOR-

TANCE OF THE ISSUES AT

BENCH BY GRANTING CERTIO-

RARI IN PRESEAULT 13

THERE IS CONFUSION AND CON-

FLICT AMONG THE CIRCUIT

COURTS AND THE ICC ABOUT

THE CONSTITUTIONALITY OF

CONGRESS’ “RAILS-TQ-TRAILS”

SCHEME 14

A GOVERNMENTAL PROGRAM

WHICH TAKES PRIVATE PROP-

ERTY FOR PUBLIC USE WITH-

OUT COMPENSATION VIOLATES

THE FIFTH AMENDMENT 15

- Vil -

Page

THE COURT OF APPEALS’ ANAL-

YSIS OF A STATUTE WHICH

CONCEDEDLY TAKES PRIVATE

PROPERTY FOR PUBLIC USE VIO-

LATES THE STANDARD OF

REVIEW ESTABLISHED BY THIS

COURT IN WNOLLAN v. CALIF.

COASTAL COMMN. 17

A. When an Exercise of Govern-

mental Power Abridges Private

Property Rights, the Action is

Subject to Close Examination 18

B. The “Rails-to-Trails” Scheme

Lacks Sufficient Basis Under the

Commerce Clause 21

CONCLUSION 25

- Vill -

Page

APPENDIX A

DECISION OF THE UNITED STATES

COURT OF APPEALS FOR’ THE

EIGHTH CIRCUIT, DATED JULY 5,

1989 A-1

APPENDIX B

DECISION OF THE UNITED STATES

DISTRICT COURT, E.D. MISSOURI,

DATED MAY 10, 1988 B-1

APPENDIX C

DECIS:ON OF INTERSTATE COM-

MERCE COMMSSION, DATED MARCH

6, 1987 C-1

APPENDIX D

DEED, DATED APRIL 4, 1884 D-1

- ik -

TABLE OF AUTHORITIES

Page

Cases

Board of Regents v. Roth (1972)

408 US 564 10

City of Columbia v. Baurichter

(Mo App 1987) 729 SW 2d 475 4

Connecticut Trust for Historic Preservation

v. ICC (2d Cir 1988)

841 F 2d 479 23

First English Evangelical Lutheran Church v.

County of Los Angeles (1987)

482 US 304 i ae

Hodel v. Irving (1987)

481 US 704 15, 26

Hooe v. U.S. (1910)

218 US 322 16

Kansas City Area Transp. Auth. v. 4550

Main Assoc. (Mo App 1986)

742 SW 2d 182 4

Leiter v. U.S. (1926) _

271 US 204 16

Littlefield v. City of Afton

(8th Cir 1986) 785 F 2d 596 24

Maiatico v. U.S. (DC Cir 1962)

302 F 2d 880 16

Page

Missouri-Kansas-Texas Ry. Co. v. Freer

(Mo App 1959) 321 SW 2d 731 4

National Wildlife Federation v. ICC

(DC Cir 1988) 850 F 2d 694 5, 11-14, 23, 24

Nollan v. California Coastal Commn. (1987)

483 US 825 17-19, 21, 24

Pollnow v. State Dept. of Natural Resources

(Wis 1979) 276 NW 2d 738 22

Preseault v. ICC (2d Cir 1988)

853 F 2d 145, cert. granted

57 USLW 3704 5, 11-14, 25, 26

Prune Yard Shopping Center v. Robins (1980)

447 US 74 10

Regional Rail Reorganization Act

Cases (1974) 419 US 102 15, 16

Ruckelshaus v. Monsanto Co. (1984)

467 US 986 10, 15

Schnabel v. County of DuPage

(Ill App 1981) 428 NE 2d 671 22

Southern Cal. Financial Corp. v. U.S.

(CtCl 1980) 634 F 2d 521 16

Sutton v. U.S. (1921)

256 US 575 16

University City v. Chicago, R.I. & P. Ry. Co.

(Mo 1941) 149 SW 2d 321 4

- Xi -

Washington State Dept. of Game v. ICC

(9th Cir 1987) 829 F 2d 877

Webb’s Fabulous Pharmacies, Inc. v.

Beckwith (1980) 449 US 155

ICC Decisions

Chicago and North Western Transp. Co. —

Abandonment and Discontinuance of

Trackage Rights (1988) ICC Docket No.

AB-1 (Sub-no. 219)(1988 ICC Lexis 365)

Chicago and North Western Transp. Co. —

Abandonment (1988) ICC Docket No. AB-1

(Sub-No. 215)(1989 ICC Lexis 23)

Exemption of Out of Service Lines (1986)

2 ICC 2d 146

Missouri-Kansas-Texas Railroad Co. —

Abandonment — In St. Charles, Warren,

Montgomery, Callaway, Boone, Howard,

Cooper and Pettis Counties, Mo. ICC

Docket No. AB-102 (Sub-No. 13)

(March 6, 1987)

Missouri Pacific Railroad Co. — Abandonment

(1988) ICC Docket No. AB-3 (Sub-No. 57)

(1988 ICC Lexis 384)

Rail Abandonments; Use of Rights-of-Way as

Trails; Supplemental Trails Act Procedures

(1989) 54 Fed Reg 8011

Page

Ba, 83

14, 23

- Xil -

Page

Rail Abandonments — Use of Rights-of-Way 10, 13

as Trails (1986) 2 ICC 2d 591 20, 22, 23

Statutes

16 USC §1241 et seq. 8

16 USC §1247(d) 2, 4,9, 15, dy ae

16 USC §1249 6, 16

28 USC §1254(1) 2

49 USC §10903 22

Pub. L. 98-11, §101 3, 6, 16

Regulations

49 CFR §1152.29 24

49 CFR §1152.29(C)(2) 24

Constitution

United States Constitution

Article I, §8 ey |

Fifth Amendment a 5, 01, ts, eee

Legislative Records

House Report 98-28 8, 10

Senate Report 98-1 8

- Xill -

Publications

Best, The Supreme Court Becomes Serious About

Takings Law: Nollan Sets New Rules

For Exactions (1987) 10 Zon. & Plan. L.

Rep. 153

Bosselman & Stroud, The Current Status of

Development Exactions (1987) 14 Fla.

Env. & Urb. Issues 8

Comment, The Use of Discontinued Railroad

Rights-of-Way as Recreational Hiking

and Biking Trails: Does the National

Trails System Act Sanction Takings?

(1988) 33 St. Louis U.L.J. 205

Lawrence, Regulatory Takings: Beyond the

Balancing Issues (1988) 20 The Urban

Lawyer 389

Mandelker, Land Use Law

(2d ed 1988) §2.23

Marsh & Rosenthal, At Long Last, The

Supreme Court Speaks Out on the

“Taking” Issue (1987)

5 Cal. Real Prop. J. 1

Peterson, Land Use Regulatory “Takings”

Revisited: The New Supreme Court

Approaches (1988) 39 Hast. L.J. 335

Page

- X1V -

Page

Taub, Exactions, Linkages, and Regulatory

Takings: The Developer’s Perspective

(1988) 20 The Urban Lawyer 515 19

The Supreme Court, 1986 Term — Leading Cases

(1987) 101 Harv. L. Rev. 119 19

No.

In The

SUPREME COURT OF THE UNITED STATES

October Term, 1989

MAURICE AND DOLORES GLOSEMEYER, et al.,

Petitioners,

VS.

MISSOURI-KANSAS-TEXAS RAILROAD, et al.,

Respondents.

PETITION FOR WRIT OF CERTIORARI

The Petitioners respectfully pray that a Writ of

Certiorari issue to review a judgment of the United

States Court of Appeals for the Eighth Circuit.

OPINIONS BELOW

The decision of the Court of Appeals (App A) is

reported as Glosemeyer v. Missouri-Kansas-Texas R.R.

(8th Cir 1989) 879 F 2d 316. The decision of the

District Court (App B) is reported as Glosemeyer v.

Missouri-Kansas-Texas R.R. (ED Mo 1988) 685 F Supp

1108.

JURISDICTION

The decision of the Eighth Circuit Court of Appeals

was entered on July 5, 1989. The jurisdiction of this

Court is invoked under 28 USC §1254(1).

CONSTITUTIONAL AND

STATUTORY PROVISIONS

Fifth Amendment, United States Constitution:

“““

. nor {shall any person] be deprived of

life, liberty, or property, without due proc-

ess of law; nor shall private property be

taken for public use, without just compen-

sation.”

United States Constitution, Article I, §8:

“The Congress shall have power to ...

regulate commerce with foreign nations,

and among the several states .. .”

Trails Act Amendment, 16 USC §1247(d):

“Railroad rights-of-ways. The Secretary

of Transportation, the Chairman of the

Interstate Commerce Commission, and the

Secretary of the Interior, in administering

the Railroad Revitalization and Regulatory

Reform Act of 1976, shall encourage State

and local agencies and private interests to

establish appropriate trails using the provi-

sion of such programs. Consistant with the

purposes of that Act, and in furtherance

of the national policy to preserve estab-

lished railroad rights-of-way for future

reactivation of rail service, to protect rail

transportation corridors, and to encourage

—

energy efficient transportation use, in the

case of interim use of any established

railroad rights-of-way pursuant to dona-

tion, transfer, lease, sale, or otherwise in a

manner consistent with the National Trails

System Act [16 USC §1241 et seq.], if

such interim use is subject to restoration or

reconstruction for railroad purposes, such

interim use shall not be treated, for pur-

poses of any law or rule of law, as an

abandonment of the use of such rights-of-

way for railroad purposes. If a State,

political subdivision, or qualified private

organization is prepared to assume full

responsibility for management of such

rights-of-way and for any legal liability

arising out of such transfer or use, and for

payment of any and all taxes that may be

levied or assessed against such rights-of-

way, then the Commission shall impose

such terms and conditions as a requirement

of any transfer or conveyance for interim

use in a manner consistent with this Act,

and shall not permit abandonment or

discontinuance inconsistent or disruptive

of such use.”

Pub. L. 98-11, §101

“Notwithstanding any other provision of

this Act, authority to enter into contracts,

and to make payments, under this Act shall

be effective only to such extent or in such

amounts as are provided in advance in

appropriation Acts.”

STATEMENT OF THE CASE

Procedural Summary and Overview

This case began as a quiet title action in the Warren

County, Missouri, Circuit Court, to quiet the Property

Owners’ title to land which had been subject to ease-

ments “for the purpose of establishing, constructing and

maintaining a railroad on the said land herein conveyed

and for no other purpose.” (A representative deed

[which was before the lower courts] is App D.) The

Missouri-Kansas-Texas Railroad had de facto abandoned

its rail line and thereafter sought and obtained de jure

approval of that abandonment from the _ Interstate

Commerce Commission (ICC). (Missouri-Kansas-Texas

Railroad Co. — Abandonment — In St. Charles,

Warren, Montgomery, Callaway, Boone, Howard,

Cooper and Pettis Counties, Mo. ICC Docket No.

AB-102 [Sub-No. 13] [March 6, 1987]) (M-K-T

Abandonment) (App C)

The quiet title suit was necessitated because the State

sought to obtain from the Railroad the right to convert

its former railroad right-of-way easement into a recrea-

tional trail easement pursuant to 16 USC §1247(d) (the

“rails-to-trails” scheme). Such a conversion of use is

improper under Missouri law,’ and cannot Constitution-

| Missouri law has long held that, when an easement is created for

a specific use and that use is abandoned, then the easement is

extinguished. (E.g., Missouri-Kansas-Texas Ry. Co. v. Freer (Mo

App 1959] 321 SW 2d 731, 737 [a railroad right-of-way easement is

limited to railroad right-of-way use]; University City v. Chicago, R./.

& P. Ry. Co. (Mo 1941] 149 SW 2d 321, 326 [abandonment of the

use for which the easement was granted ends the easement owner’s

interest in the property]; City of Columbia v. Baurichter [Mo App

1987] 729 SW 2d 475, 481 [when its use is abandoned, “the ease-

ment is extinguished”]; Kansas City Area Transp. Auth. v. 4550

(continued)

es.

ally be accomplished by a federal statute which forbids

compensation to the Property Owners.

The defendants removed the case to the U.S. District

Court because their defense involved the application of a

federal statute.”

The District Court determined that the statutory

scheme was Constitutional and that the Property

Owners’ remedy, if any, was to seek just compensation

from the United States in the Claims Court.

On appeal, the Eighth Circuit Court of Appeals af-

firmed. Expressly acknowledging “... that the takings

issue has divided the circuit courts of appeal ...” (App

A, p A 15) — with the District of Columbia Circuit

holding that the “rails-to-trails” scheme could be a Fifth

Amendment taking (National Wildlife Federation v. ICC

[DC Cir 1988] 850 F 2d 694, 704), and the Second

Circuit holding that the “rails-to-trails” scheme could

never be a Fifth Amendment taking (Preseault v. ICC

[2d Cir 1988] 853 F 2d 145, 151; cert. granted 57

USLW 3704)? — the Eighth Circuit nonetheless

concluded that the “rails-to-trails” scheme was Constitu-

(ftn. continued)

Main Assoc. [Mo App 1986] 742 SW 2d 182, 191 [cessation of use

of railroad easement for railroad right-of-way terminates the

easement and frees the underlying property owners of the easement’s

burden].)

2 The United States and a number of recreational organizations

intervened and joined the original State and Railroad defendants.

(App A, p A 3)

3 It is noteworthy that, in Preseault, the Solicitor General — on

behalf of the ICC —— has refused to defend the broad holding of the

Second Circuit that the statute “... never could effect a taking. We

do not defend the judgment on that rationale, which conflicts with

the District of Columbia Circuit’s opinion .. .” (Preseault, Brief for

the Federal Respondents 21, fn 13)

Y >

tional because compensation could be sought in the

Claims Court (App A, p A 19).

Although argued in the briefs, the Court of Appeals’

opinion gives no consideration to the explicit statutory

prohibition on unauthorized compensation in the Trails

Act Amendments, of which the “rails-to-trails” scheme

is a part: é

“Notwithstanding any other provision of

this Act, authority to enter into contracts,

and to make payments, under this Act shall

be effective only to such extent or in such

amounts as are provided in advance in

appropriation Acts.” (Pub. L. 98-11, §101

[not codified, but reproduced in the notes

following 16 USCA §1249]; emphasis

added.)

Rather than rule as to this express statutory prohibi-

tion on spending Federal money to acquire trails, the

Court of Appeals erroneously asserted that “[t]he statute

and its legislative history are simply silent.” (App A, p

A 18) That is factually wrong and distorts the legislative

record. The statute and its history are quite vocal in

prohibiting any payments which are not approved in

advance. That prohibition on payments precludes

recovery of compensation in the Claims Court.

4 The Court of Appeals similarly misdescribed the import of the

statute when it asserted that the Property Owners’ argument was that

no Claims Court recourse was possible “... because there is no

express provision in §1247(d) authorizing a taking or appropriating

any funds as compensation.” (App A, p A 17) That was not the

Property Owners’ argument. The argument was that the statute was

clear on its face that use of any funds for recreational trails which

were not specifically authorized in advance was _ expressly

prohibited. The Court of Appeals’ evasion of the statute’s words

was necessary to reach its erroneous conclusion.

a |

;

Factual Statement?

Land owned by the Property Owners has been subject

for a century to easements in favor of the Railroad or its

railroad predecessors in interest. Appendix D is repre-

sentative of the deeds by which these easements were

created.

The purpose for which the easements were granted is

precise: “for the purpose of establishing, constructing

and maintaining a railroad on the said land herein con-

veyed and for no other purpose,” to be used as a “right-

of-way for a railroad and for no other purpose.”

The i144 Property Owners/Petitioners own individual

parts of a strip of land once used by the Railroad for a

200-mile right-of-way crossing two-thirds of Missouri,

from Machens (north of St. Louis) westward to Sedalia.

The right-of-way ownership disputed in this case was

part of the Railroad’s main line from St. Louis to

Parsons, Kansas. Most of the line is north of, and paral-

lels, the Missouri River.

According to documents filed by the Railroad with the

ICC, use had declined, and line operation had become

unprofitable. The track and the ties were obsolete, and

many of the numerous bridges were in need of substan-

tial repair. The cost to repair, replace, and maintain the

tracks, ties, and bridges, made it impossible to profitably

operate the line.

’ The District Court granted summary judgment in favor of the

Respondents and the Court of Appeals affirmed. The facts stated

here were not disputed by the Respondents. Both courts assumed the

facts to be as stated by the Property Owners. (App A, p A 16)

- 8.

The proximity of the line to the Missouri River

caused continuing problems. The line was subject to

flooding aid, in fact, was rendered inoperable by flood-

waters in October 1986.

Moreover, the need for the line ceased when the Rail-

road obtained the right to use a parallel right-of-way

owned by the Missouri Pacific Railroad south of the

Missouri River. The existence of the Missouri Pacific’s

parallel line on the south side of the Missouri River

made the line here in dispute redundant.°®

Because of the lack of need for the rail line, and the

cost to restore it to a useful condition, the ICC author-

ized abandonment of the line. (App C, p C 10)

The “Rails-to-Trails’” Scheme

The National Trails System Act (16 USC §1241 er

seq.) was adopted in 1968 to increase outdoor recreation.

Bills were introduced in Congress beginning in 1980,

which culminated in the National Trails System Act

Amendments of 1983, whose general thrust was to in-

crease the availability of trails at little or no cost to the

federal government. (See generally Senate Report 98-1;

House Report 98-28.) Part of the 1983 program was the

so-called “rails-to-trails” scheme.

6 Since then, the Missouri-Kansas-Texas Railroad has been

acquired by the parent of the Missouri Pacific Railroad, unifying

railroad ownership through the Missouri River corridor and nullify-

ing even a theoretical need to re-open the obsolete and redundant

line north of the river.

-9-

It had come to Congress’ attention that there was a

“problem” in utilizing some abandoned railroad rights-

of-way for recreational trails because the railroads

owned only easements of limited life in those rights-of-

way which ended when railroad use was abandoned.

The “problem” was settled state real property law. The

general rule (including the rule in Missouri, as discussed

above at p 4, fn 1) was that, on abandonment of use as a

right-of-way, the railroad’s interest automatically lapsed,

restoring title unburdened by the railroad easement to

the underlying property owners. (See generally Com-

ment, The Use of Discontinued Railroad Rights-of-Way

as Recreational Hiking and Biking Trails: Does the

National Trails System Act Sanction Takings? [1988] 33

St. Louis U.L.J. 205, 211, 213.) Thus, on abandonment

of railroad use, railroads which owned only easements

were unable to convert their former right-of-way ease-

ments into recreational trails even if the railroads so

desired.

The solution which Congress devised was 16 USC

§1247(d). Congress was ingenuously candid about its

intent:

“The key finding of this amendment is

that interim use of a railroad right-of- way

for trail use, when the route itself remains

intact for future railroad purposes, shall

not constitute an abandonment of such

rights-of-way for railroad purposes. This

finding alone should eliminate many of the

problems with this program. The concept

of attempting to establish trails only after

the formal abandonment of a railroad

right-of-way is self-defeating; once a

right-of-way is abandoned for railroad

-10-

road purposes there may be nothing left for

trail use.” (House Report 98-28 at 8-9)

The problem with this Congressional solution is that

it:

@ sought to override and retroactively change

State property law;

@ ignored settled decisions of this Court that

property interests are defined by state, not

federal, law;’ and

@ prohibited spending any federal funds for

the program except as specifically author-

ized in advance in Congressional appropria-

tions Acts.

The consequence was confusion. The ICC understood

that Congress intended no money to be spent. (Rail

Abandonments — Use of Rights-of-Way as Trails [1986]

2 ICC 2d 591, 597 [Trails Rules]) The ICC also under-

stood that Congress intended to eliminate the “problem”

caused by the legal doctrine that cessation of rail use

causes an automatic abandonment of a railroad easement

and returns full dominion over the property to the under-

lying property owners. (Trails Rules, 2 ICC 2d at 597)

Thus, when it drafted rules to implement the “rails-to-

trails” scheme, the ICC concluded that the scheme would

not take property from any private property owners and

that, even if it did, no compensation could be awarded

for any “delay” in the ability of property owners to

recover full use of the land underlying former railroad

rights-of-way. (Trails Rules, 2 ICC 2d at 600)

7 Ruckelshaus v. Monsanto Co. (1984) 467 US 986, 1011; Webb's

Fabulous Pharmacies, Inc. v. Beckwith (1980) 449 US 155, 161;

Board of Regents v. Roth (1972) 408 US 564, 577; PruneYard

Shopping Center v. Robins (1980) 447 US 74, 84.

-ij-

The Constitutional confusion in this scheme was

recently analyzed by the Court of Appeals for the Dis-

trict of Columbia Circuit, which concluded that the

“rails-to-trails” scheme could result in a taking of prop-

erty and the ICC could not ignore the _ taking/

compensation issue. (National Wildlife Federation v.

ICC [DC Cir 1988] 850 F 2d 694) National Wildlife did

not consider whether the statute itself was Constitu-

tional, as the only issue before that court for review was

the propriety of the regulations drafted by the os

The question on this appeal is the question presented

in Preseault and left unaddressed in National Wildlife:

the Constitutionality of the “rails-to-trails” scheme both

on its face and as applied to specific property owners,

given their rights and reasonable expectations under

settled state easement law and the Fifth Amendment

protection afforded them.”

8 After the DC Circuit told the ICC to reconsider its rules in light

of the holding that the impact of the statute and the ICC’s rules

could be a Fifth Amendment taking of property owners’ reversionary

rights, the ICC ducked the issue, refused to change its rules to

consider that possibility, and reiterated its former conclusion. (Rail

Abandonments; Use of Rights-of-Way as Trails; Supplemental Trails

Act Procedures {1989} 54 Fed Reg 8011) (Supplemental Trails

Rules) The ICC’s evasion of the DC Circuit’s remand order is now

on appeal (Beres v. JCC, DC Cir no. 89-1178), with proceedings in

abeyance pending this Court’s decision in Preseault.

9 Because of the settled state law described earlier, the Property

Owners’ rights under Missouri law were assumed by the courts

below. As the Court of Appeals put it:

“Like the district court, we assume for purposes of

analysis that the conversion of the right-of-way from

railroad use to interim trail use under § 1247(d)

constituted a taking of plaintiffs’ reversionary interests in

the right-of-way. We also assume for purposes of

analysis that plaintiffs do possess reversionary interests

(continued)

. a2.

REASONS FOR GRANTING THE WRIT

THIS COURT HAS ALREADY ACKNOWL-

EDGED THE IMPORTANCE OF THE

ISSUES AT BENCH BY GRANTING CER-

TIORARI IN PRESEAULT

The issues presented in this case are of nationwide

importance. This Court’s grant of Certiorari in

Preseault attests to their importance, as does the sub-

stantial number of amicus curiae briefs filed in support

of both sides in that case. The amici curiae represent

organizations and interest groups from all points of the

politicai and economic spectrum and all parts of the

nation.

The importance to all of a clear determination of the

issues presented in this case cannot be understated.

Regardless of one’s perception of the propriety of con-

version of abandoned railroad rights-of-way to hiking

and biking trails, the conflicting decisions of the Second

Circuit in Preseault, the Eighth Circuit in this case, and

the DC Circuit in National Wildlife leave the program in

a confused limbo which serves no one. Indeed, because

of the pending litigation and the conflicting results, the

ICC has refused to adopt a position on these issues:

“Given the fact that the compensation

issue is still being actively litigated ...,

we have decided not to take any position

on the merits of the different interpreta-

tions at this time. Nor will we attempt to

(ftn. continued) ;

in the right-of-way which would vest by operation of

state law when the right-of-way is no longer used for rail

service.” App A, pA 16)

A ae ne <n ell

establish perameters for when a com-

pensable taking might occur.” (54 Fed

Reg at 8013)

The program and the rights of many citizens await

this Court’s decision.

THERE IS- CONFUSION AND CONFLICT

AMONG THE CIRCUIT COURTS AND

THE ICC ABOUT THE CONSTITUTION-

ALITY OF CONGRESS’ “RAILS-TO-

TRAILS” SCHEME

To date, the Courts of Appeals of three Circuits and

the ICC have examined challenges to the “rails-to-trails”

scheme to determine whether it is Constitutional and, if

not, the appropriate remedy:

@ the Second Circuit held that the “rails-to-

trails” scheme could never be a Fifth

Amendment taking (Preseault v. ICC [2d

Cir 1988] 853 F 2d 145, cert. granted 57

USLW 3704);

@ the DC Circuit held that the “rails-io-

trails” scheme could be a Fifth Amend-

ment taking (National Wildlife Federation

v. ICC [DC Cir 1988] 850 F 2d 694);

@ the Eighth Circuit, in the case at bench,

assumed that the “rails-to-trails” scheme

could be a Fifth Amendment taking, but

held that the remedy for any such taking

was a Suit in the Claims Court for compen-

sation; and

@ the ICC initially concluded that the “rails-

to-trails” scheme could never be a Fifth

Amendment taking (Trails Rules, 2 ICC 2d

-m.

at 600) and then, after the DC Circuit

ordered that conclusion reconsidered in

National Wildlife, reiterated its original

conclusion and said that if any property

owner felt otherwise, the owner could seek

relief from the Claims Court (Supple-

mental Trails Rules, 54 Fed Reg 8011).

The confusion and conflict among these Circuit Court

decisions and ICC rule-makings leave lower courts and

all participants in railroad right-of-way abandonment

and “trail conversion” proceedings in the dark as to the

law. As noted earlier, the ICC has expressly conceded

that the current litigational confusion has led it to refrain

from taking any position on the issue or formulating any

rules to govern it. (Supplemental Trails Rules, 54 Fed

Reg at 8013)

This conflict and confusion will continue until this

Court acts. In the case at bench, the Eighth Circuit

acknowledged the conflict between the Second Circuit

and the DC Circuit (App A, pp A 15 - A 16), and at-

tempted to finesse the conflict by bucking the issue to

the Claims Court (App A, p A 19).

As the amicus curiae briefs filed in this Court in

Preseault reveal, other cases raising these Constitutional

issues either exist now at early stages or will soon com-

mence. The Nation needs this Court’s clarification now

— before the conflicts become more extreme and scarce

judicial resources are squandered in a search for the

Constitutional solution only this Court can provide.

oie

A GOVERNMENTAL PROGRAM WHICH

TAKES PRIVATE PROPERTY FOR PUBLIC

USE WITHOUT COMPENSATION VIO-

LATES THE FIFTH AMENDMENT

A taking for public use without compensation violates

the Fifth Amendment’s Taking Clause:

“|... government action that works a taking

of property rights necessarily implicates

the ‘constitutional obligation to pay just

compensation.’ [Citation.]” (First English

Evangelical Lutheran Church v. County of

Los Angeles [1987] 482 US 304, 315;

emphasis added.)

If Congress enacts legislation which takes property

and intends to provide no compensation, the statute is

invalid. (Hodel v. Irving [1987] 481 US 704)

The Court of Appeals acknowledged this, but con-

cluded that the potential availability of a suit in the

Claims Court to recover compensation for the taking

made the statute valid. (App A, p A 19)

Whether the remedy for §1247(d)’s taking of the

Property Owners’ right to possession of the abandoned

easement is compensation through the Claims Court or

invalidation of the statute because it takes property

without compensation depends on whether Congress

intended to preclude compensation. (Ruckelshaus v.

Monsanto Co. [1984] 467 US 986, 1017) See also Re-

gional Rail Reorganization Act Cases (1974) 419 US

102, 126:

“

. the true issue is whether. there is

sufficient proof that Congress intended to

prevent such recourse [to an action for

antral

~~"

mt para Pirate, CS

compensation].” (Quoting with approval;

emphasis in original.)

Thus, if Congress intended NOT to provide compensa-

tion, then the validity of any taking by the statute is to

be evaluated under the Fifth Amendment as a taking of

private property for public use without compensation.

Here, the statute is clear on its face that no money

was to be spent on the “rails-to-trails” program unless

that money was appropriated in advance for that specific

purpose:

“Notwithstanding any other provision of

this Act, authority to enter into contracts,

and to make payments, under this Act shall

be effective only to such extent or in such

amounts as are provided in advance in

appropriation Acts.” (Pub. L. 98-11, §101

[not codified, but reproduced in the notes

following 16 USCA §1249]; emphasis

added.)!

Strict Congressionai spending limits have been repeat-

edly enforced by this Court. When Congress has re-

stricted funding, this Court has held that actions in ex-

cess of Congressional appropriations are ultra vires, not

the authorized actions of the government, and thus not

cognizable in the Claims Court. (Hooe v. U.S. [1910]

218 US 322 [cited with approval on this issue in the

Regional Rail Reorganization Act Cases, 419 US at 127,

fn 16]; Sutton v. U.S. [1921] 256 US 575, 579; Leiter v.

U.S. [1926] 271 US 204; Southern Cal. Financial Corp.

v. U.S. [Ct Cl 1980] 634 F 2d 521, 524)

10 Where Congress expressiy precludes property acquisitions or

expenditures without iis express and advance approval, an attempted

acquisition without approval is invalid. (Maiatico v. U.S. [DC Cir

1962] 302 F 2d 880)

2...

These settled precedents thus make it clear that, by

the spending restriction in this statute, Congress did not

authorize any takings which would permit or require

recourse to the Claims Court for compensation. Thus,

the statute is to be judged as written — without aug-

mentation by the potential of Claims Court compensa-

tion. As the statute thereby takes property for public use

without compensation, it is invalid. The Eighth Circuit’s

opinion conflicts with each of the cited cases on this

issue by saying that compensation can be available from

the Claims Court in spite of the Congressional prohibi-

tion on spending.

THE COURT OF APPEALS’ ANALYSIS OF

A STATUTE WHICH CONCEDEDLY TAKES

PRIVATE PROPERTY FOR PUBLIC USE

VIOLATES THE STANDARD OF REVIEW

ESTABLISHED BY THIS COURT IN

NOLLAN vy. CALIF. COASTAL COMMN.

The Court of Appeals’ superficial examination of the

validity of the “rails-to-trails” scheme under the Com-

merce Clause (U.S. Const., Art. 1, §8) is doubly flawed:

@ first, in its determination of the applicable

standard of review, and

@ then in its cursory conclusion that the

statute was Constitutional.

48.

A. When an Exercise of Governmental

Power Abridges Private Property

Rights, the Action is Subject to Close

Examination

a |

The Court of Appeals erred from the outset when it

determined that its function in reviewing the “rails-to-

trails” scheme as an exercise of the Commerce power

was the narrow one of determining whether there was

“any rational basis” for the action. (App A, p A 11)

That standard has no application when it is claimed

that the governmental action takes private property for

public use.

This Court addressed this question in WNollan v.

California Coastal Commn. (1987) 483 US 825. As the

Court there expressed it:

“We view the Fifth Amendment’s property

clause to be more than a pleading require-

ment, and compliance with it to be more

than an exercise in cleverness and imagina-

tion. As indicated earlier, our cases de-

scribe the condition for abridgement of

property rights through the police power as

a ‘substantial advanc[ing]’ of a legitimate

State interest. We are inclined to be parti-

cularly careful about the adjective where

the actual conveyance of property is made

a condition to the lifting of a land use re-

striction, since in that context there is

heightened risk that the purpose is avoid-

ance of the compensation requirement

rather than the stated police power objec-

tive.” (483 US at 841; some emphasis

added.)

This Court then concluded expressly that:

“[wle have required that the regulation

‘substantially advance’ the ‘legitimate

State interest’ sought to be achieved |[cita-

tion], not that ‘the State “could rationally

have decided” the measure adopted might

achieve the State’s objective.’ [Citation.]”

(483 US at 834, fn 3; emphasis, the

Court’s.)

As Professor Daniel Mandelker of Washington Uni-

versity Law School expressed it in a new edition of his

nationally recognized text:

“Nollan’s most important holding is the

heightened standard of judicial review it

adopted for determining whether a land use

regulation substantially advances legiti-

mate governmental interests. This height-

ened judicial review standard, if the Court

meant it to apply to all taking cases,

substantially strengthens judicial review of

land use regulations under the taking

clause.” (Mandelker, Land Use Law [2d

ed 1988] §2.23 at 45; emphasis added.)!!

11 The same analysis appears in Best, The Supreme Court Becomes

Serious About Takings Law: Nollan Sets New Rules For Exactions

(1987) 10 Zon. & Plan. L. Rep. 153, 156; Bosselman & Stroud, The

Current Status of Development Exactions (1987) 14 Fla. Env. &

Urb. Issues 8, 9; Taub, Exactions, Linkages, and Regulatory

Takings: The Developer's Perspective (1988) 20 The Urban Lawyer

515, 579-580; Peterson, Land Use Regulatory “Takings” Revisited:

The New Supreme Court Approaches (1988) 39 Hast. L.J. 335, 338;

Lawrence, Regulatory Takings: Beyond the Balancing Issues (1988)

20 The Urban Lawyer 389, 424; Marsh & Rosenthal, At Long Last,

The Supreme Court Speaks Out on the “Taking” Issue (1987) 5 Cal.

Real Prop. J. 1; The Supreme Court, 1986 Term — Leading Cases

(1987) 101 Harv. L. Rev. 119, 247.

Under longstanding Missouri law, abandonment of the

easements by the Railroad automatically extinguished

the railroad easements, and restored to the Property

Owners full, unencumbered use and title. The “rails-to-

trails” scheme was designed to change that aspect of

state property law. The ICC, the primary interpreter of

the statutes governing its operation, conceded the recrea-

tional (i.e., non-railroad) purpose of the legislation in

describing the Congressional purpose behind the statute:

“This language demonstrates that the main

purpose of the amendment is to remove

reversion as an obstacle that hinders or

prevents the successful conversion of

entire linear rights-of-way to recreation

use when the rights-of-way have been

operated under easements for railroad

purposes. Thus, Congress intends that trail

use occur and rights-of-way remain intact

when they otherwise would be subject to

reversionary interests.” (Trails Rules, 2

ICC 2d at 597; emphasis added)

In the case at bench, the Court of Appeals accepted

that this statute effects a Fifth Amendment taking:

“ee

. we assume for purposes of analysis

that the conversion of the right-of-way

from railroad use to interim trail use under

§ 1247(d) constituted a taking of plaintiffs’

reversionary interests. We also assume for

purposes of analysis that plaintiffs do

possess reversionary interests in the right-

of-way w>ich would vest by operation of

state law when the right-of-way is no

longer used for rail service.” (App A, p A

16)

Because of that attempted fundamental change in the

private ownership status quo, which requires the Prop-

erty Owners to relinquish something which they own,

the Nollan standard of review is required.

Being “particularly careful” in examining the basis of

a regulation, as Nollan requires, calls for substantially

less deference to the governmental rationalizations than

in pre-Nollan times. Regulations which take property

can no longer be sustained in court merely because there

is Some rational basis for believing that the challenged

action might be necessary or useful.

Nollan’s analysis makes this clear. There, the govern-

ment sought to rely on the minimal, rational basis stand-

ard of review used by the Court of Appeals here. (See

483 US at 834.) But this Court would have no part of it.

Instead, this Court subjected the government’s rationales

to careful examination, concluding that one justification

for the action was “... a made-up purpose of the

regulation. . .” (483 US at 839, fn. 6), while others were

““... impossible to understand .. .” (483 US at 838)

The Court of Appeals’ review here is not compatible

with the Nollan standard of review. Moreover, as the

following discussion shows, the “rails-to-trails” scheme

is not sustainable even under a “rationa) basis” standard.

B. The “Rails-to-Trails’” Scheme Lacks

Sufficient Basis Under the Commerce

Clause

The Court of Appeals’ analysis of the Commerce

Clause issue is due no deference. It reflexively accepts,

in a brief discussion and at face value, the vapid

rationalizations put forth in support of the “rails-to-

trails” scheme. (App A, p A 13) That is not adjudica-

» 22 «

tion; that is abdication. Under any standard of review,

more is required than abject acceptance of presumed

Congressional rationality. Otherwise, the Constitutional

rule would be that there is never review of the basis for

legislation.

The interstate commerce justification for the statute

was Said to be the furtherance of the “railbanking”

program, i.e., a program to maintain railroad rights-of-

way for future use after the present railroad abandons the

railroad right-of-way.

However, in the context of the “rails-to-trails”

scheme, the “railbanking” rationalization is a sham. The

ICC has candidly acknowledged this, concluding that

“.., the main purpose of the amendment is to remove

reversion as an obstacle that hinders or prevents the

successful conversion of entire linear rights-of-way to

recreation use when the rights-of-way have been oper-

ated under easements for railroad purposes.” (Trails

Rules, 2 ICC 2d at 597; emphasis added )!?

The operation of the “rails-to-trails” scheme confirms

the ICC’s conclusion.

Before the ICC can even consider a “rails-to-trails”

conversion, it must find that the right-of-way is not

necessary for “... present or future public convenience

or necessity ...” (49 USC §10903; emphasis added.

12 The quoted passage then cites, as illustrative of the reason for

the enactment of §1247(d), not anything having to do with “railbank-

ing” or anything else to do with reviving railroads for that matter,

but to state court cases which held that state easement law required

extinguishment of railroad easements when railroad use ended.

(Pollnow v. State Dept. of Natural Resources (Wis 1979] 276 NW 2d

738; Schnabel v. County of DuPage [Ill App 1981] 428 NE 2d 671)

That is the problem addressed by §1247(d), not preservation of rail

routes.

See also Exemption of Out of Service Lines [1986] 2 ICC

2d 146, 152.)

As the ICC most recently put it:

“In every Trails Act case, we will al-

ready have found that the public conven-

ience and necessity permit abandonment

(or that regulatory approval is not required

under 49 U.S.C. 10505).” (54 Fed Reg at

8012, fn 3; emphasis added.)

In other words, “railbanking” is permitted only after

the ICC concludes that “railbanking” is not needed, thus

confirming that the actual purpose of §1247(d) is the

creation of hiking and biking trails, not the preservation

of needed rail rights-of-way. The ICC essentially con-

cedes this. (Trails Rules, 2 ICC 2d at 597)

Moreover, the effectuation of this supposed “national

interstate commerce” policy was left not to the ICC or

any national governmental body, but to voluntary agree-

ment!? between railroads and private trail operators or

local government agencies. '4 Absent such agreements,

the so-called “national policy” does not function. If-the

13 The “rails-to-trails” scheme has been repeatedly held to be a

voluntary, rather than a mandatory, program. (Washington State

Dept. of Game v. ICC [9th Cir 1987] 829 F 2d 877; National

Wildlife Federation v. ICC [DC Cir 1988] 850 F 2d 694; Connecticut

Trust for Historic Preservation v. ICC [2d Cir 1988] 841 F 2d 479)

14 The ICC cannot compel trail conversion if no trail group

expresses interest (e.g., Chicago and North Western Transp. Co. —

Abandonment and Discontinuance of Trackage Rights [1988] ICC

Docket No. AB-1 [Sub-no. 219][1988 ICC Lexis 365]) or if the

railroad declines any trail conversion (e.g., Chicago and North

Western Transp. Co. — Abandonment [1988] ICC Docket No. AB-1

[Sub-No. 215][1989 ICC Lexis 23]; Missouri Pacific Railroad Co.

— Abandonment [1988] ICC Docket No. AB-3 [Sub-No. 57][1988

ICC Lexis 384]).

1’ e

trail operator becomes disenchanted with its task, it may

abandon the trail at will, with scarcely a “by your leave”

to the ICC. (49 CFR §1152.29[C][2]) Whether there is

any “railbanking” at all is thus left to the whim of trail

operators and railroads. This is a recreation measure,

not a railroad measure. When Congress addresses

national railroad policy, it is much more direct.

No finding that a particular right-of-way is even suit-

able (let alone needed) for “railbanking” is necessary

before the ICC authorizes conversion to recreational trail

use. (49 CFR §1152.29)'> This caused the D.C. Circuit

evident concern. (See National Wildlife, 850 F 2d at

707, 708.)

Here, the Court of Appeals refused to consider the

actual rationality of this scheme, opting for an assumed

rationality. Nollan makes that mode of review inap-

propriate.

The “rails-to-trails” scheme is a transparent attempt to

alchemize private property into public hiking and biking

trails at no cost to the public, but at substantial loss to

individual property owners. The “rails-to-trails” scheme

is not justifiable as railroad regulation under the

Commerce Clause.'® It is recreational legislation, and

nothing more.

1S This is highly pertinent in a case such as this one where the

right-of-way was abandoned in favor of a superior, parallel right-of-

way across the Missouri River and not as susceptible to the River's

ravages as the abandoned right-of-way. Had this inquiry been made,

it would have disclosed no potential for future reactivation of this

inferior abandoned right-of-way.

16 The analysis in this section also demonstrates that the “rails-to-

trails” scheme is a denial of substantive due process as applied to the

Property Owners, as it is arbitrary, capricious, and lacking in a

rational basis. (See Littlefield v. City of Afton (8th Cir 1986] 785 F

2d 596.)

Ob oe ee a OS a ES «ea

ES OS ST te

-25-

CONCLUSION

This Court’s grant of Certiorari in Preseault recog-

nizes that the issues presented in this case are important

and require resolution. Those issues touch the core of

the relationship between the government and the

governed. They deal with the Constitutional limitations

on the government’s ability to retroactively redefine

private property interests to serve some perceived public

need.

No one questions the power of Congress to act in the

public interest. But the issue here, as is so often the case

in Constitutional litigation, is means, not ends. As this

Court put it in First English:

“... many of the provisions of the Consti-

tution are designed to limit the flexibility

and freedom of governmental authorities

and the Just Compensation Clause of the

Fifth Amendment is one of them.” (482

US at 321)

Here, in its effort to expand recreational opportunities

for some, Congress has violated the rights of others. It

has enacted legislation which takes property from pri-

vate owners and declares it to be the public’s. And, in

so doing, Congress made it clear that no federal funds

were to be spent on the program unless Congress specifi-

cally authorized the expenditure in advance.

That clear prohibition on spending money precludes

any recourse these Property Owners might otherwise

have to seek compensation in the Claims Court. The

Court of Appeals’ conclusion that the Claims Court is

available for compensation could only be reached by

ignoring the Congressional prohibition on spending

money.

- 26 -

Because the statute thus takes private property for

public use (as the Court of Appeals acknowledged [App

A, p A 16]), and provides no compensation, the statute is

void (Hodel v. Irving [1987] 481 US 704).

The issues here are important. The Property Owners

pray that Certiorari be granted or that the decision

whether to grant Certiorari be deferred until after this

Court decides Preseault. If the decision as to Certiorari

is deferred, this Court can ensure that the Property Own-

ers at bench receive treatment consistent with Preseautlt.

Deferral would also provide this Court with a ready

vehicle to address these issues if, for some reason,

Preseault is found to be procedurally inappropriate.

Respectfully submitted,

FADEM, BERGER & NORTON

MICHAEL M. BERGER

Counsel of Record

Attorneys for Petitioners

APPENDIX A

i--.

UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

NO. 88-1863

Maurice and Dolores Glosemeyer; Fred and Alwera

Brodbeck; Richard and Esther Burgess; John and Marjorie

Dohr; Clarence and Onita Duenke; Ada Haase; Roy and

Phyllis Haase; Wayne and Maureen Heck; Bernard

Hellebusch; Elmer and Regina Hellebusch; James and

Patricia Hellebusch; Mrs. Bernard Moellering; Alvin Roewe;

Werner Roewe; James and Carla Schwoeppe; Donald and

Delores Vitt; Jay and Nancy Walk, Jr.; Clarence Bergman;

Harold Blaylock; Maurine Bluhm; Clara Boessen; Ralph and

Mildred Brandt; Anne Buckley; Roy Cary; Kenneth and

Loretta Burre; Walter and Helen Burre; Albert and Esther

Dickson; Charles Dilthey; Denis Engemann; Gerald

Engemann; Bernard and Geraldine Eichelberger, Sr.; Glen

and Eleta Eichhorn; Sidney and Nadine Eldringhoff; Irven

and Margaret Ewing; Hattie Farris; Bruce Florea; Andrew

and Emilie Gerke; Anton and Alice Gerke; Herbert Gerke;

Roy and Helen Gramlich; Clifford and Rosaline Haid; Norma

and Edward Hasselman; Erwin and Alberta Heck; Linda and

Gordon Heck; Marie and Leroy Heidbreder; Earl and Gladys

Heitmann; Gary and Patty Heldt; Randy and Kendall Kircher;

Leroy Kircher, Jr.; John and Barbara Knaus; Randail

Kollmeyer; Roman and Leona Kuchem; Leonard and Isabel

Lang; Thomas and Lana Langford; Carl Lensing; Allan

Lietzke; Earl Mallinckrodt; James and Evalane Meyer; John

Morr; Walter and Edna Nadler; L.W. Niewald; J.M. Potter;

Layton Rehmeier; Alan and Mary Richter; Wilbur Rothgeb;

Bill Rudloff, Hulda Rueff; Herbert Schmid; Marvin Schupp;

Wilbur Schuster; Clara Siegel; Harold and Bonnie Siegel;

Mary Sly; Jim and Stephanie Sneed; John and Mary Sneed;

Robert Snoddy; Earl Summers, Cleo Tinsley; Terry Twenter;

Price and Edna Vaughan; B.J. Wessing; Charles Wessing;

Laura Willenbring; John and Susan Williamson, Jr.; Wilfred

and Carol Wissman; Frank Pierson; Clifford Sapp; Brenda

-A 2-

Reeder, Alfred Beckmeyer; Clifford Nahler; Robert Sapp;

Marvin Sapp; Ina Mae Sapp; Bud Holiman; Amy Easley;

Edward and Gloria Belt; Charles and Aurelia Bottenmuller;

Bertha Hampton; John Reeder; Sharon Beeler; Thomas

Douglass; and Douglass Farms, Inc.; Anthony Aholt, Bernard

and Virginia Altheuser; Albert Bates; Helen Bennett; Donald

Dothage; Albert Eichhorn; Elda Flatt; Elmer Friedric;

Lawerence and Anna Gerke; Norman Gerke; Harold &

Geralyn Gloe; David & Tammy Goebel; Donald & Viola

Gordon; Elmer Gregory; Harrell Harvey; James Harvey;

Alma Horner; William and Elsie Hunt; John and Gladys

Miller; May Miller; John and Ethel Nolle; Eugene and Mary

Lou Renfrow; James and Dorothy Roddy; Norbert and Louise

Schuster; Steve and Debbie Schuster; Lyonel and Irene

Schweerkotting; Leonard Struckhoff; Henry, Sr. and Theresa

Struckhoff; Clyde and Sarah Twenter; Raymond and Helen

Twillman; Earl Wessing; Laura Carpenter; Ryland Kessinger

and Ellen Kessinger; Walter Moore and Dorothy Moore;

Daniel L. Schlafly; Katherine Walsh and Edward Walsh, Jr.,

Appellants,

Missouri-Kansas-Texas Railroad; Missouri Department of

Natural Resources, an agency of the State of MO; Frederick

A. Brunner, Director Missouri Department of Natural

Resources,

Appellees.

Conservation Federation of MO; National Wildlife

Federation; the Rails to Trails Conservancy; the Lewis and

Clark Nature Trail Foundation; the Sierra Club; the

Paralyzed Veterans of America; BICYCLE USA; the Lewis

and Clark Heritage Foundation; the American Hiking

Society; the Katy MO River Trail Association; the American

Rivers Conservation Council; United States,

Intervenors Below.

Appeal from the United States District Court

for the Eastern District of Missouri

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Submitted: December 12, 1988

Filed: July 5, 1989

Before McMILLAN and BEAM, Circuit Judges, and

WHIPPLE, District Judge.

McMILLIAN, Circuit Judge.

Plaintiffs appeal from a final order entered in the District

Court! for the Eastern District of Missouri rejecting their

constitutional challenge to § 8(d) of the National Trails Sys-

tem Act of 1968 (Trails Act), as amended, 16 U.S.C.

§ 1247(d) (hereinafter § 1247(d)), and granting summary

judgment in favor of defendants. Glosemeyer v. Missouri-

Kansas-Texas R.R., 685 F.Supp. 1108 (E.D. Mo. 1988)

(Glosemeyer). Plaintiffs are 144 individuals who own prop-

-erty adjacent to a railroad line in eastern Missouri that is no

longer in use.2_ Their properties are subject to easements or

rights-of-way for railroad use. The Missouri-Kansas-Texas

Railroad Co. (MKT), the Missouri Department of Natural

Resources (DNR), and the director of the DNR, Frederick A.

Brunner, were the original defendants. The United States

and eleven environmental and recreational interest groups”

The Honorable Dean Whipple, United States District Judge for

the Western District of Missouri, sitting by designation.

| The Honorable George F. Gunn, Jr., United States District Judge

for the Eastern District of Missouri.

2 The district court granted the American Farm Bureau Federation

and the Missouri Farm Bureau Federation leave to file briefs in

support of plaintiffs as amici curiae. These organizations filed a

joint amicus brief in support of plaintiffs on appeal.

3 The interest group intervenors are the Conservation Federation of

Missouri, the National Wildlife Federation, the Rails to Trails

Conservancy, the Lewis and Clark Nature Trial [sic] Foundation, the

Sierra Club, the Paralyzed Veterans of America, BICYCLE USA, the

Lewis and Clark Heritage Foundation, the American Hiking Society,

(continued)

were later granted leave to intervene as defendants.

For reversal plaintiffs argue the district court erred in

granting summary judgment in favor of defendants because

§ 1247(d) (1) constitutes a taking of rights-of-way for trail

use without just compensation in violation of the takings

clause of the fifth amendment, (2) is not a valid exercise of

power under the commerce clause, and (3) impairs private

contractual rights in violation of the contracts clause and the

due process clause of the fifth amendment. For the reasons

discussed below, we affirm the order of the district court.

STATUTORY BACKGROUND

The following is a summary for purposes of analysis only.

For a comprehensive legislative history of the Trails Act and

the 1983 amendments, see the discussions in Glosemeyer,

685 F. Supp. at 1113-17, and National Wildlife Federation v.

ICC, 271 U.S. App. D.C. 1, 850 F.2d 694, 697-99 (1988)

(NWF). Section 1247(d) is part of the Trails Act. Congress

enacted the Trails Act in 1968 in order to establish a nation-

wide system of nature trails. As originally enacted, the

Trails Act made no provision for the conversion of railroad

rights-of-way to trail use. NWF, 850 F.2d at 697. By the

early 1970s, however,

[c]oncerned about the disintegration of our

national rail system due, in part, to abandonment of

rail corridors, [C]ongress called for a study on

establishing a “rail bank” consisting of selected

abandoned railroad rights-of-way. Railroad Re-

vitalization and Regulatory Reform Act of 1976

[((4-R Act)], § 809, Pub. L. No. 94-210, Title VIII,

90 Stat. 144 (codified as amended at 49 U.S.C.

(ftn. continued) 6 ;

the KATY Missouri River Trail Association, and the American

Rivers Conservation Council.

hh 3

§ 10906 (1980)). One significant impediment to

the preservation of rail corridors has been that

much railroad right-of-way is held by easement

only and, under the laws of some states, once rail

service is discontinued such easements automati-

cally expire and the rights-of-way revert to adja-

cent property owners.

To address this problem, [C]Jongress enacted 16

U.S.C. § 1247(d) as part of the 1983 Trails Act

Amendments in order (1) to preserve for possible

future railroad use rights-of-way. that are not cur-

rently in service and (2) to allow interim use of the

rail corridors as recreational trails.

Preseault v. ICC, 853 F.2d 145, 147 (2d Cir. 1988)

(Preseault), cert. granted, 109 S. Ct. 1929 (1989).

As explained in Glosemeyer, 685 F.Supp. at 1116-17

(citations omitted), § 1247(d)

grant[s] interested parties the opportunity to use,

for recreational purposes, and to preserve, for

future rail service, railroad rights-of-way which

have been approved for abandonment. Section

1247(d) provides that if interim trail use “is subject

to restoration or reconstruction for railroad

purposes” then such use “shall not be treated, for

purposes of any law or rule of law, as an abandon-

ment of the use of such rights-of-way for railroad

purposes.” It also provides that if a qualified pub-

lic Or private entity is prepared to assume full

responsibility for the management of the right-of-

way and for any liability arising out of its transfer

or use, the [Interstate Commerce Commission

(ICC)] “shall impose such terms and conditions as

a requirement of any transfer or conveyance for

interim use in a manner consistent with [the Trails

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Act], and shall not permit abandonment or discon-

tinuance inconsistent or disruptive of such use.”

Under its final rules,* when the ICC finds that

a railroad right-of-way is appropriate for abandon-

ment under 49 U.S.C. § 10903 and when a quali-

fied public or private entity offers to maintain the

right-of-way for interim trail use, the ICC issues a

[Certificate of Interim Trail Use (CITU)]. The

CITU permits the railroad to discontinue rail

service, cancel tariffs and salvage track and other

equipment. It further provides the railroad and the

prospective interim trail user 180 days to negotiate

an interim trail use agreement. If no agreement is

reached, “then the CITU will convert into an effec-

tive certificate of abandonment, permitting the

railroad to abandon the line immediately.” If,

however, an agreement is reached, the ICC will

permit interim trail use and hold in abeyance its

authorization to abandon the right-of-way. Should

the trail user thereafter seek to terminate its use of

the right-of-way, it must file a “petition to reopen

the abandonment proceeding” so that the ICC may

4 See Rail Abandonments — Use of Rights-of-Way as Trails, 2

I.C.C.2d 591 (1986), and Rail Abandonments — Supplemental

Trails Act Procedures, 4 1.C.C.2d 152 (1987) (codified at 49 C.F.R.

§ 1152.29). In response to other litigation involving railbanking, see

National Wildlife Fed'n v. ICC, 271 U.S. App. D.C. 1, 850 F.2d 694

(1988), the ICC recently issued a supplemental policy statement

expressing its conclusion that the railbanking provision does not

violate the just compensation clause, either because railbanking does

not constitute a taking or because, if it does constitute a taking,

monetary relief is available under the Tucker Act in the Claims

Court. See 54 Fed. Reg. 8011, 8013 (Feb. 24, 1989). A petition for

review has been filed. Beres v. ICC, No. 89-1178 (D.C. Cir. Mar.

14, 1989).

LeAnne see pn. were,

~ ) 2

“issue a certificate of abandonment to the railroad

and to the trail user.”

Accordingly, “(t]he key finding of

[§ 1247(d)] is that interim use of a railroad right-

of-way for trail use, when the route itself remains

intact for future railroad purposes, shall not consti-

tute an abandonment of such rights-of-way for rail-

road purposes.”

See also NWF, 850 F.2d at 669-02 (interim trail use requires

voluntary agreement between railroad and trail user);

Washington State Department of Game v. ICC, 829 F.2d 877,

879-81 (9th Cir. 1987) (same).

PROCEDURAL BACKGROUND

At issue in the present case is approximately 200 miles of

railroad right-of-way between Machens and_ Sedalia,

Missouri; much of the railroad line follows the north bank of

the Missouri River. MKT no longer provides rail service

over the railroad line.

In September 1986 MKT filed an application with the ICC

pursuant to 49 U.S.C. § 10903 to abandon the contested sec-

tion of right-of-way. Several parties protested or commented

on the MKT application to abandon, including the DNR. In

October 1986 the DNR invoked § 1247(d) and requested the

ICC to issue a CITU to preserve the right-of-way for rail-

banking, citing the geological, biological, historical,

archeological, and cultural values of the right-of-way. MKT

was interested in working out an interim use agreement with

the state and the other interest groups. Adjacent landowners,

however, opposed the conversion of the right-of-way to trail

use on the grounds that, by operation of state law, once the

right-of-way is no longer used for rail purposes, it automati-

cally dissolves. They also expressed concerns about security

and crime.

7 *

In March 1987 the ICC concluded that the economic

burden on MKT of continued operation outweighed the

inconvenience to shippers and others from discontinuance of

service and authorized issuance of a CITU pursuant to

§ 1247(d) in lieu of a certificate of abandonment. Missouri-

Kansas-Texas R.R. — Abandonment — St. Charles, Warren,

Montgomery, Calloway, Boone, Howard, Cooper & Pettis

County, Mo., 1CC No. AB-102 (Sub-No. 13) (served Mar. 16,

1987). On April 22, 1987, the ICC issued the CITU. /d.

(served Apr. 27, 1987).

In the meantime, in December 1986, after the ICC final

rules had been issued but before the ICC issued the CITU,

plaintiffs, owners of property adjacent to the right-of-way,

filed an action to quiet title in state court against MKT, the

DNR, and Brunner, the director of the DNR. The action was

later removed to federal district court. Plaintiffs alleged that

their predecessors-in-interest had granted a right-of-way over

their property to the predecessors-in-interest of MKT “for the

purpose of right-of-way for a Railroad, and for no other

purpose.” Plaintiffs argued that when MKT ceased to use the

right-of-way for the purpose of a railroad, MKT, by opera-

tion of state law, lost its interest in the right-of-way and had

no interest in the right-of-way to transfer to DNR. Plaintiffs

alleged that but for conversion of the right-of-way from

“rails to trails” use under § 1247(d), their reversionary inter-

ests in the right-of-way would have vested in them under

state law. Plaintiffs argued § 1247(d) violated the commerce

clause, the contracts clause, the due process clause, the

takings clause, and various state constitutional and statutory

provisions. Plaintiffs sought declaratory and injunctive

relief.

As noted earlier, the United States and eleven environ-

mental and recreational interest groups intervened.

In a well-reasoned opinion, the district court held that it

had subject matter jurisdiction over plaintiffs’ constitutional

challenge to § 1247(d), Glosemeyer, 685 F. Supp. at 1112,

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but not plaintiffs’ claims against the regulations and the ICC

decision, id., and rejected plaintiffs’ claims on the merits,

holding that § 1247(d) did not viclate the commerce clause,

the contracts clause, the fifth amendment due process clause,

or the takings clause, and that state law in conflict with the

federal statutory scheme was pre-empted. /d. at 1118-22.

The district court granted summary judgment in favor of

defendants and against plaintiffs and declared § 1247(d) is

constitutional. This appeal followed.

JURISDICTION

As a preliminary matter, we hold that we have appellate

jurisdiction under 28 U.S.C. § 1291 and do not reach the

question whether we also have jurisdiction under 28 U.S.C.

§ 2342. Cf. Preseault, 853 F.2d at 149 (finding appellate

jurisdiction pursuant to 28 U.S.C. § 2342 to review constitu-

tional challenge to ICC order under § 1247(d); describing as

nonsensical requirement of bifurcated challenge). Plaintiffs’

action to quiet title in state court was removed to federal

district court in December 1986; the ICC decision granting

the CITU was not served until March 6, 1987. Because no

administrative action had been taken at the time plaintiffs’

complaint had been removed and filed n federal district

court, the district court had subject matter jurisdiction under

28 U.S.C. §§ 1331 and 1337, to decide plaintiffs’ facial chal-

lenge to the constitutionality of § 1247(d). See Preseault,

853 F.2d at 149, citing Public Utilities Comm'n v. United

States, 355 U.S. 534, 540 (1958).

We also agree that the district court did not have subject

matter jurisdiction over plaintiffs’ challenge to the ICC’s

decision to grant the CITU and to the ICC’s final rules

implementing § 1247(d). Under 28 U.S.C. § 2342, the fed-

eral circuit courts of appeal, and not the federal district

ceurts, have exclusive jurisdiction to “determine the validity

of ... all rules, regulations, or final orders of the [ICC]

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made reviewable by [28 U.S.C. § 2321].” See NWF, 850

F.2d at 699 (petitions for review of final ICC rules);

Washington State Department of Game v. ICC, 829 F.2d at

878 (petitions for review of ICC decision to deny CITU and

final ICC rules).

CONTRACTS CLAUSE

We first address plaintiffs’ contracts clause and related

substantive due process arguments. Plaintiffs argue that

§ 1247(d) violates the contracts clause, U.S. Const. art. I,

§ 10. Brief for Appellants at 48 n.31. Plaintiffs characterize

the grants of right-of-way by their predecessors-in-interest to

MKT’s predecessors-in-interest as contracts and argue that

§ 1247(d) impairs their rights under these contracts by pur-

porting to transfer their reversionary interests in the right-

of-way to a third-party, that is, the designated interim trail

user or, possibly, the public. As correctly noted by the dis-

trict court, this argument must fail because the contracts

clause? applies only to state, not federal, laws. Glosemeyer,

685 F. Supp. at 1118; see also NWF, 850 F.2d at 702 n.12.

Section 1247(d) is federal legislation.

“Any claim that federal legislation unlawfully impairs

existing contracts falls under the due process clause of the

fifth amendment.” NWF, 850 F.2d at 702 n.12. “The party

asserting a Fifth Amendment due process violation must

overcome a presumption of constitutionality and ‘establish

that the legislature acted in an arbitrary and irrational way.’ ”

National R.R. Passenger Corp. v. Atchison, Topeka & Santa

Fe R.R., 470 U.S. 451, 472 (1985), citing Pension Benefit

Guaranty Corp. v. R.A. Gray & Co., 467 U.S. 717, 729

(1984). Plaintiffs argue that § 1247(d) violates substantive

> The contracts clause provides in part that “[nJo State shall...

pass any ... law impairing the Obligation of Contracts.”

-A 11-

due process because it is arbitrary, capricious and lacking in

a rational basis. Brief for Appellants at 48 n.31.

Even if we assume for purposes of analysis, as did the

district court, that the right-of-way agreements were

contracts and that § 1247(d) substantially impaired plaintiffs’

contractual rights, this argument must fail. The substantive

due process argument is related to plaintiffs’ commerce

clause argument. As discussed further below, we reject both

arguments for the same reasons. We agree with the district

court that “Congress acted rationally in enacting § 1247(d)

by electing to postpone railroad abandonments and to encour-

age interim trail use so as to further its railbanking purpose.”

Glosemeyer, 685 F. Supp. at 1119.

COMMERCE CLAUSE

The district court concluded that “Congress acted ration-

ally in enacting § 1247(d) by electing to postpone railroad

abandonments and to encourage interim trail use so as to

further its railbanking purpose” and thus held § 1247(d) did

not violate the commerce clause. Glosemeyer, 685 F. Supp.

at 1117-18. As a threshold matter, plaintiffs argue the dis-

trict court erred in applying a rational basis test. Plaintiffs

argue the applicable standard of review is strict scrutiny,

citing Nollan v. California Coastal Comm'n, 483 U.S. 825

(1987) (Nollan). Nollan involved land use regulation. We

think the district court correctly characterized § 1247(d) as

part of the comprehensive federal scheme regulating rail-

roads and thus subject to commerce clause analysis and the

rational basis test. See Hodel v. Virginia Surface Mining &

Reclamation Ass'n, 452 U.S. 264 (1981) (Hodel).

On the merits, plaintiffs argue that § 1247(d) lacks a

rational basis because Congress’s express legislative pur-

pose, railbanking, is a sham. Plaintiffs argue that railbank-

ing is merely a subterfuge for Congress’s “real” purpose, that

is, the conversion, without just compensation, of their rever-

-A 12-

sionary interests in the right-of-way to recreational trail use.

As is apparent from the reference to just compensation, this

argument is related to plaintiffs’ takings clause argument

discussed below. Plaintiffs argue that it is virtually impossi-

ble to believe that railroad lines which have been proposed

for abandonment and converted to interim trail use will ever

be restored to rail service in the future. Plaintiffs argue that,

because in most cases the track will have been salvaged,

resumption of rail service would require the installation of a

new roadbed and new track and-the repair or reconstruction

of bridges and would thus be prohibitively expensive. Plain-

tiffs argue that in the present case resumption of rail service

is particularly unlikely in light of MKT’s acquisition of

trackage rights along a route parallel to this right-of-way.

Plaintiffs also argue that, assuming there is a rational

basis for railbanking, the means chosen by Congress are not

reasonably related to this purpose. For example, plaintiffs

argue that certification for interim trail use affects only 5% !

of all railroad rights-of-way proposed for abandonment and

thus is a remarkably underinclusive way to preserve rights-

of-way for future rail service. Plaintiffs also argue that,

although railbanking is ostensibly of vital importance to the

national welfare, certification for interim trail use is not

mandatory and instead depends upon the voluntary coopera-

tion of both the abandoning railroad and the prospective

interim trail user.

Under commerce clause analysis, the scope of judicial

review is “relatively narrow.” Hodel, 452 U.S. at 276.

In determining whether an exercise of congres-

sional power is valid under the commerce clause a

court may consider only (1) whether there is any

rational basis for a congressional finding that the

regulated activity affects interstate commerce; and

(2) whether “the means chosen by [Congress are]

reasonably adapted to the end permitted by the

Constitution.”

ST NN

~ en ee ene ee Cena

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Preseault, 853 F.2d at 149, citing Heart of Atlanta Motel,

Inc. v. United States, 379 U.S. 241, 262 (1964); see also

Hodel, 452 U.S. at 276.

We hold the district court’s analysis on the merits is cor-

rect. First, we agree that railbanking is not a mere sham for

recreation or conservation uses. “(Section 1247(d)] serves

two purposes: (1) preserving rail corridors for future rail-

road use and (2) permitting public recreational use of trails.

Both purposes are legitimate congressional goals under the

commerce clause.” Preseault, 853 F.2d at 150. Because

plaintiffs do not contend that § 1247(d) is a regulation of an

activity which does not affect interstate commerce or that

Congress cannot regulate railroad abandonments,° the only

issue is whether § 1247(d) was reasonably adapted to these

two purposes. We agree with the Second Circuit that interim

trail use is “a remarkably efficient and sensible way to

achieve both goals.” /d.

Section 1247(d) enables railroads that wish to dis-

continue service to help preserve rights-of-way for

future rail use, when they might otherwise seek to

abandon a line; it protects the railroad from

liability in the interim; and it provides for mainte-

nance of the right-of-way by the trail user during

the interim.

Id. It may well be true that interim trail use is not a very

effective way to accomplish these goals. However, such an

argument should be addressed to Congress, not the courts.

6 “Congress’s authority to regulate the railroads is well

recognized, as is its authority to regulate railroad abandonments.”

Preseault v. ICC, 853 F.2d 145, 150 (2d Cir. 1988) (citations

omitted), cert. granted, 109 S.Ct. 1929 (1989). And, as noted by

the district court, “Congress vested in the ICC ‘exclusive’ and

‘plenary’ authority over railroad abandonments.” Glosemeyer v.

Missouri-Kan.-Tex. R.R., 685 F. Supp. 1108, 1113 (E.D. Mo. 1988),

citing Chicago & N.W. Transp. Co. v. Kalo Brick & Tile Co., 450

U.S. 311, 321 (1981).

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“{T)he effectiveness of existing laws in dealing with a prob-

lem identified by Congress is ordinarily a matter committed

to legislative judgment.” Hodel, 452 U.S. at 283.

TAKINGS CLAUSE

This is plaintiffs’ principal argument. The district court

held that § 1247(d) did not constitute an unconstitutional

taking of plaintiffs’ property without just compensation

because plaintiffs had an adequate legal remedy under the

Tucker Act, 28 U.S.C. § 1491. Glosemeyer, 685 F. Supp.

at 1119. Plaintiffs argue that § 1247(d) effects a temporary

regulatory taking of their reversionary interests in the right-

of-way by postponing the vesting of these interests under

state law. Plaintiffs argue that this constitutes a taking with-

Out just compensation in violation of the takings clause.

Plaintiffs fusther argue that they have no adequate remedy at

law and are therefore cntitled to equitable relief, that is,

enjoyment of their property free of the right-of-way or ease-

ment for railroad use. They argue the Tucker Act remedy is

not available because § 1247(d) does not include any provi-

sion for compensation and because Congress did not appro-

priate any funds to acquire lands for the national trails

system.

_—

MKT, the state defendants, and the environmental and

recreational interest group defendants argue jointly that

7 The Tucker Act, 28 U.S.C. § 1491(a)(1), provides in part that |

[t]he United States Claims Court shall have jurisdiction |

to render judgment upon any claim against the United

States founded either upon the Constitution, or any Act of

Congress or any regulation of an executive department,

or upon any express or implied contract with the United

States, or for liquidated or unliquidated damages in cases

not sounding in tort. |

-A 15-

§ 1247(d) does not effect a taking at all. These defendants

note that, under § 1247(d), when the ICC authorizes interim

trail use instead of abandonment, the right-of-way has not

been abandoned and remains subject to the exclusive and

continuing jurisdiction of the ICC. They argue that state

property law is irrelevant unless and until the ICC declares

the right-of-way to be abandoned, thereby ending its jurisdic-

tion over the right-of-way. The United States argues that,

even if § 1247(d) does effect a taking, the district court cor-

rectly held that equitable relief was not available because

plaintiffs could seek just compensation under the Tucker Act

in the Claims Court. Ruckelshaus v. Monsanto Co., 467 U.S.

986 (1984) (Monsanto) (alleged regulatory taking of trade

secrets per pesticide statute; no equitable relief because com-

pensation available per Tucker Act).

In the present case the district court did not decide

whether the conversion of the right-of-way from rail use to

interim trail use under § 1247(d) constituted a taking. In-

stead, the district court assumed for purposes of analysis that

conversion of the right-of-way from rail use to interim trail

use would effect at least a temporary taking of plaintiffs’

reversionary interests in the right-of-way. The district court

concluded, however, that § 1247(d) did not constitute a

violation of the takings clause because plaintiffs had an

available legal remedy — they could sue for damages under

the Tucker Act in claims court. Glosemeyer, 685 F. Supp. at

1119-20. For the reasons discussed below, we hold the dis-

trict court’s analysis of the takings issue was correct.

We note that the takings issue has divided the circuit

courts of appeal. The District of Columbia Circuit has

strongly suggested that “the postponement of a reversionary

interest that would otherwise vest under state law constitutes

a taking of private property [for public use] for which just

compensation must be made.” NWF, 850 F.2d at 704

(reviewing ICC final rules which provided that conversion of

rights-of-way from railroad use to interim trail use would not

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result in a taking of any reversionary interests in rights-of-

way; rules remanded to ICC for further consideration);

accord Lawson v. State, 107 Wash. 2d 444, 730 P.2d 1308,

1315-16 (1986); cf. Regional Rail Reorganization Act Cases,

419 U.S. 102, 134 (1974) (Regional Rail) (“erosion taking”

under the Regional Rail Reorganization Act of 1973). The

Second Circuit, however, has squarely held that § 1247(d)

does not effect a taking because “[t]he ICC has plenary and

exclusive authority to determine whether it is appropriate

under all the circumstances to allow a railroad carrier to

abandon a route, and if the ICC determines that abandonment

is not appropriate, no reversionary interest [in the right-of-

way] can or would vest [under state law].” Preseault v. ICC,

853 F.2d at 151; accord State ex rel. Washington Wildlife

Preservation, Inc. v. State, 329 N.W.2d 543 (Minn.), cert.

denied, 463 U.S. 1209 (1983). The Supreme Court recently

granted a petition for writ of certiorari in the Preseault case.

109 S. Ct. 1929 (1989).

Like the district court, we assume for purposes of analysis

that the conversion of the right-of-way from railroad use to

interim trail use under § 1247(d) constituted a taking of

plaintiffs’ reversionary interests in the right-of-way.® We

also assume for purposes of analysis that plaintiffs do

possess reversionary interests in the right-of-way which

would vest by operation of state law when the right-of-way is

no longer used for rail service. But cf. NWF, 850 F.2d at

703-04 (state laws operate subject to plenary authority of

ICC to regulate railroad abandonments and cannot transfer,

extinguish or cause reverter of right-of-way prior to ICC-

approved abandonment).

In our view, whether § 1247(d) effects a taking of plain-

tiffs’ property interests does not answer plaintiffs’ constitu-

8 “The inquiry into whether a taking has occurred is essentially an

‘ad hoc, factual inquiry.’ ” Ruckelshaus v. Monsanto Co., 467 U.S.

986, 1005 (1984) (citation omitted).

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tional challenge; rather, what is dispositive is whether plain-

tiffs can obtain compensation, which depends, in turn, upon

whether plaintiffs can sue under the Tucker Act, 28 U.S.C.

§ 1491. This is because the takings clause’ of the fifth

amendment “does not prohibit the taking of private property,

but instead places a condition on the exercise of that power.”

First English Evangelical Lutheran Church v. County of Los

Angeles, 482 U.S. 304, 314 (1987) (citatiouis omitted).

[It is designed not to limit the governmental inter-

ference with property rights per se, but rather to

secure compensation in the event of otherwise

proper interference amounting to a taking. Thus,

government action that works a taking of property

rights necessarily implicates the “constitutional

obligation to pay just compensation.”

Id. at 315 (emphasis in original), citing Armstrong v. United

States, 364 U.S. 40, 49 (1960). “The Fifth Amendment does

not require that compensation precede the taking.”

Monsanto, 467 U.S. at 1016 (citation omitted). “All that it

requires is that a * “reasonable, certain and adequate provi-

sion for obtaining compensation” ’ exist at the time of the

taking.” Glosemeyer, 685 F. Supp. at 1119, citing Regional

Rail, 419 U.S. at 124-25. “Generally, an individual claiming

that the United States has taken his [or her] property can seek

just compensation under the Tucker Act, 28 U.S.C. § 1491.”

Monsanto, 467 U.S. at 1016 (footnote omitted).

Plaintiffs, of course, argue that they cannot sue under the

Tucker Act because there is no express provision in

§ 1247(d) authorizing a taking o1 appropriating any funds as

compensation. Plaintiffs further argue that because the

Tucker Act is not available to them, they have no adequate

legal remedy and are thus entitled to equitable relief. We

disagree.

9 The takings clause provides in part that “private property [shall

not] be taken for public use, without just compensation.”

-A i8-

In determining whether a Tucker Act remedy is

available for claims arising out of a taking pur-

suant to a federal statute, the proper inquiry is not

whether the statute “expresses an affirmative show-

ing of congressional intent to permit recourse to a

Tucker Act remedy,” but “whether Congress has in

the [statute] withdrawn the Tucker Act grant of

jurisdiction to the Court of Claims to hear a suit

involving the [statute] ‘founded ... upon the

Constitution.’ ”

Id. at 1017, citing Regional Rail, 419 U.S. at 126 (emphasis

in original). As noted by the district court, “[a]ltogether

absent in § 1247(d) or its legislative history is a discussion

of the interaction between § 1247(d) and the Tucker Act.”

Glosemeyer, 685 F. Supp. at 1120.

Congress did not address the liability of the United

States tO pay just compensation if a taking be

found to have occurred. Congress either did not

believe that the postponement of a railroad’s aban-

donmeni of a right-of-way constituted a taking or

assumed that the general grant of jurisdiction under

the Tucker Act would provide a necessary remedy

for any taking that might be found to have

occurred. In either event, Congress’ failure to

address the issue cannot be construed to reflect an

unambiguous intention to withdraw the Tucker Act

remedy.

Id. at 1121. The statute and its legislative history are simply

silent.

In the face of this legislative silence, the district court

correctly refused to hold that the Tucker Act remedy was not

available to plaintiffs. The most that can be said is that

§ 1247(d) is ambiguous on the question of the availability of

the Tucker Act remedy. Because “the Tucker Act grants

what is now the Claims Court ‘jurisdiction to render judg-

ment upon any claim against the United States founded ...

ewe eth a ed BU een

ee ee

eS a

-A 19-

upon the Constitution, ’ ” id. (citations omitted), holding that

plaintiffs could not sue under the Tucker Act with respect to

takings under § 1247(d) would amount to holding that

§ 1247(d) withdrew jurisdiction from the Claims Court and

thus partially repealed the Tucker Act. Not only are “repeals

by implication ... disfavored,” Regional / ail, 419 U.S. at

133, it is also entirely possible for § 1247(d) and the Tucker

Act to co-exist. “[W]here two statutes are ‘capable of

co-existence, it is the duty of the courts, absent a clearly

expressed congressional intention to the contrary, to regard

each as effective.’” Monsanto, 467 U.S. at 1018, citing

Morton v. Mancari, 417 U.S. 535, 551 (1974) (intermediate

citation omitted). In the absence of a clearly expressed

Congressional intention to the contrary, the district court

correctly refused to construe § 1247(d) to withdraw the

Tucker Act remedy. We hold that § 1247(d) does not violate

the takings clause.

Finally, we hold that the district court correctly denied

plaintiffs’ request for equitable relief. “Equitable relief is

not available to enjoin an alleged taking of private property

for a public use, duly authorized by law, when a suit for

compensation can be brought against the sovereign subse-

quent to the taking.” Monsanto, 467 U.S. at 1016 (footnote

omitted).

Accordingly, we affirm the order of the district court.

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.

APPENDIX B

nae ha

685 FEDERAL SUPPLEMENT 1108

Maurice and Dolores GLOSEMEYER, et al.,

Plaintiffs,

MISSOURI-KANSAS-TEXAS RAILROAD COMPANY,

et al.,

Defendants.

No. 86-2508C(6).

United States District Court, E.D. Missouri.

May 10, 1988.

MEMORANDUM

GUNN, District Judge.

This action involves a challenge to Section 8(d) of the

National Trails System Act, as amended, 16 U.S.C. § 1247(d)

(“§ 1247(d)”). Section 1247(d), enacted in furtherance of a

national policy to preserve established railroad rights-of-way

for future reactivation of rail service, authorizes the Inter-

state Commerce Commission (“ICC”) to enter orders permit-

ting such rights-of-way to be used on an interim basis as

recreational trails. Plaintiffs, adjacent landowners to a rail-

road right-of-way subject to an ICC order entered pursuant to

§ 1247(d), challenge the section on various federal and state

constitutional and statutory grounds.

In 1983 Congress amended Section 8 of the National

Trails System Act of 1968 by adding a provision for the

interim use of railroad rights-of-way as recreational trails.'

: Although § 1247(d) was enacted in a single paragraph, it is

useful to separate its three sentences:

{1] The Secretary of Transportation, the Chairman of the

Interstate Commerce Commission, and the Secretary of the Interior,

in administering the Railroad Revitalization and Regulatory Reform

(continued)

-B2-

National Trails System Act Amendments of 1983, Pub.L.No.

98-11, § 208 (1983), (codified at 16 U.S.C. § 1247(d)). In

September 1986 the Missouri-Kansas-Texas Railroad Com-

pany (“M-K-T”), pursuant to 49 U.S.C. § 10903, filed an

application with the ICC to abandon approximately 200 miles

of a railroad right-of-way between Machens and Sedalia,

Missouri. In October 1986 the Missouri Department of

Natural Resources (“DNR”) filed a protest to M-K-T’s appli-

cation with the ICC in which it invoked § 1247(d) and

requested the ICC to issue a Certificate of Interim Trail Use

(“CITU”) to it pursuant to § 1247(d) and the regulations

promulgated thereunder. 49 C.F.R. § 1152.29 (1986). The

CITU would authorize and direct interim use of the railroad

right-of-way for a recreational trail while requiring retention

and maintenance of the railroad corridor for reinstatement of

rail service in the future. On March 6, 1987, the ICC

(ftn. continued) : ;

Act of 1976... shall encourage state and local agencies and private

interests to establish appropriate trails using the provisions of such

programs.

[2] Consistent with the purposes of that Act, and in furtherance

of the national policy to preserve established railroad rights-of-way

for future reactivation of rail service, to protect rail transportation

corridors, and to encourage energy efficient transportation use, in the

case of interim use of any established railroad rights-of-way

pursuant to donation, transfer, lease, sale, or otherwise in a manner

consistent with this chapter, if such interim use is subject to restora-

tion or reconstruction for railroad purposes, such interim use shall

not be treated, for purposes of any law or rule of law, as an abandon-

ment of the use of such rights-of-way for railroad purposes.

(3) If a state, political subdivision, or qualified private organiza-

tion is prepared to assume full responsibility for management of

such rights-of-way and for any legal liability arising out of such

transfer or use, and for the payment of any and all taxes that may be

levied or assessed against such rights-of-way, then the Commission

shall impose such terms and conditions as a requirement of any

transfer or conveyance for interim use in a manner consistent with

this chapter, and shall not permit abandonment or discontinuance

inconsistent or disruptive of such use.

s93-

concluded that the railroad should be relieved of its present

service obligations and, to facilitate preservation of the line

and its use in the interim as a trail, authorized the issuance of

a CITU, Missouri-Kansas-Texas Railroad Company —

Abandonment — St. Charles, Warren, Montgomery,

Calloway, Boone, Howard, Cooper and Pettis County, Mo.,

ICC No. AB-102 (Sub-No. 13), served March 16, 1987. On

April 22, 1987, the ICC issued the CITU. Missouri-Kansas-

Texas Railroad Company — Abandonment — St. Charles,

Warren, Montgomery, Calloway, Boone, Howard, Cooper

and Pettis County, Mo., ICC No. AB-102 (Sub-No. 13),

served April 27, 1987.

As a consequence plaintiffs filed the present action in

which they challenge the transfer of interest in the railroad

right-of-way from M-K-T to DNR. Plaintiffs named M-K-T,

DNR and Frederick A. Brunner, the director of DNR, as

defendants. However, by subsequent order of the Court, the

United States of America and eleven environmental and

recreational interest groups (“Interest Groups”) were per-

mitted to intervene as defendants.2 In addition, the Court

granted the American Farm Bureau Federation and the

Missouri Farm Bureau Federation leave to file briefs in

support of plaintiffs as amici curiae.

In their complaint, plaintiffs allege that their predecessors

in interest granted a right-of-way over their property to the

predecessors in interest of M-K-T. A representative con-

veyance attached as Exhibit B to their complaint, and exe-

cuted by the predecessors in interest of one of the plaintiffs

and M-K-T, indicates that the right-of-way was conveyed

2 The Interest Groups are the Conservation Federation of Missouri,

the National Wildlife Federation, the Rails to Trails Conservancy,

the Lewis and Clark Nature Trail Foundation, the Sierra Club, the

Paralyzed Veterans of America, BICYCLE USA, the Lewis and

Clark Heritage Foundation, the American Hiking Society, the Katy

Missouri River Trail Association and the American Rivers Conserva-

tion Council.

‘id <

“for the purpose of a Railroad, and for no other purpose” and

that the railroad is only “to have and hold” this right-of-way

“for the purpose of establishing, constructing and maintain-

ing a Railroad on the said lands .. . conveyed....” As the

alleged owners of the fee underlying the right-of-way, plain-

tiffs contend that but for § 1247(d) their reversionary inter-

ests in the right-of-way would have vested in them under

state law upon M-K-T’s decision to abandon its line and that

M-K-T would therefore have no interest in the right-of-way

to transfer to DNR.

Plaintiffs ostensibly challenge § 1247(d), the ICC regula-

tions implementing § 1247(d) and the ICC order of March 6,

1987 applying § 1247(d) and the regulations to the M-K-T

right-of-way. Plaintiffs advance numerous theses in support

of their challenge, primarily that § 1247(d) and the iCC’s

regulations and order of March 6, 1987 constitute: (1) an

invalid exercise of the commerce clause power under Article

I, Section 8 of the United States Constitution; (2) an imper-

missible impairment of the obligation of contracts under

Article I, Section 10 of the United States Constitution; (3) a

violation of due process under the fifth and fourteenth

amendments of the United States Constitution; (4) a taking

of property without just compensation under the fifth amend-

ment of the United States Constitution; and (5) a violation of

various Missouri constitutional and statutory provisions. As

a result plaintiffs request the Court to declare § 1247(d) and

the ICC’s regulations and order of March 6, 1987 unconstitu-

tional and to quiet title in plaintiffs of their respective inter-

ests in the M-K-T right-of-way. The Interest Groups have

also filed a counterclaim against plaintiffs in which they

request the Court to declare § 1247(d) and the ICC’s regula-

tions and order constitutional.

Presently before the Court are plaintiffs’ motion for sum-

mary judgment,° defendants M-K-T, DNR and Brunner’s

motion for summary judgment, defendant Interest Groups’

motion for judgment on the pleadings or, in the alternative,

for summary judgment, and defendant United States’ motion

for partial summary judgment. For the following reasons,

and upon consideration of the arguments advanced by the

parties, the Court grants defendants’ motions for summary

judgment and denies plaintiffs’ motion for summary

judgment.

A. Jurisdiction

[1] The Court has jurisdiction to consider plaintiffs’

challenge to § 1247(d) under 28 U.S.C. §§ 1331 and 1337(a).

However, the Court is without jurisdiction to consider their

challenge to the ICC’s regulations implementing § 1247(d)

and to its order of March 6, 1987 applying § 1247(d) and the

implementing regulations to the M-K-T right-of-way. Under

28 U.S.C. § 2321, proceedings “to enjoin or suspend, in

whole or in part, a rule, regulation, or order of the [ICC]” are

to be brought in the federal circuit courts of appeal in accor-

dance with the Hobbs Act, 28 U.S.C. § 2341, et seq. Under

the applicable provision of the Hobbs Act, the federal circuit

courts of appeal have exclusive jurisdiction to “... deter-

mine the validity of ... all rules, regulations, or final orders

of the [ICC] made reviewable by (28 U.S.C. § 2321].” 28

U.S.C. § 2342. Thus the federal circuit courts of appeal have

exclusive jurisdiction to consider plaintiffs’ challenge to the

ICC’s implementing regulations and order of March 6, 1987.

Accordingly, the Court considers only plaintiffs’ challenge to

3 The American Farm Bureau Federation and the Missouri Farm

Bureau Federation have also filed as amici curiae a memorandum in

support of plaintiffs’ motion for summary judgment.

-B6-

§ 1247(d) and dismisses so much of their complaint which

seeks to challenge the ICC’s regulations and order.

B. The Commerce Clause

Plaintiffs and amici curiae contend that Congress ex-

ceeded its power under the commerce clause by enacting

§ 1247(d) because the regulatory scheme embodied in

§ 1247(d) is not reasonably related to Congress’s avowed

purpose of preserving raiiroad rights-of-way for future reac-

tivation of rail service. By electing to postpone railroad

abandonments and the vesting of landowners’ reversionary

interests in railroad rights-of-way, Congress “cheat[ed]

landowners out of their reversionary rights” under the pretext

of “railbanking” so as to encourage the development of

recreational trails. See Amici Curiae’s Memorandum in

Opposition to Defendants’ Motion for Summary Judgment

and in Support of Plaintiff-Intervenor’s Motion for Summary

Judgment at 14-21. The Court finds such an argument to be

without merit.4

. Indeed, the argument is somewhat abstruse. First, it assumes that

§ 1247(d) can only be sustained under the commerce clause if the

Court finds that Congress’ sole purpose in enacting § 1247(d) was to

further its “railbanking” goals. But the Court is of the view that

§ 1247(d) might also bé sustained as a means of furthering the

recreational and conservational goals of the National Trails System

Act. Second, it asks the Court to hold the statute unconstitutional on

the basis of an alleged illicit legislative motive despite the “familiar

principle of constitutional law that [a] court will not strike down an

otherwise constitutional statute on the basis of an alleged illicit

legislative motive.” United States v. O’ Brien, 391 U.S. 367, 383, 88

S.Ct. 1673, 1682, 20 L.Ed.2d 672 (1968). Nevertheless, as the

parties have addressed the argument within the framework of

plaintiffs and amici curiae’s analysis, the Court shall do the same.

(i) Standard of Review

[2] A court’s task in evaluating a particular exercise of

congressional power under the commerce clause is

“relatively narrow.” Hodel v. Virginia Surface Mining &

Reclamation Association, 452 U.S. 264, 276, 101 S.Ct. 2352,

2360, 69 L.Ed.2d 1 (1981). First, “(t]he court must defer to

a congressional finding that a regulated activity affects

interstate commerce, if there is any rational basis for such a

finding.” Hodel, 452 U.S. at 276, 101 S.Ct. at 2360

(citations omitted). Second, when the court satisfies itself

that the regulated activity does affect interstate comiiierce, it

must determine “whether ‘the means chosen by [Congress is]

reasonably adapted to the ends permitted by _ the

Constitution.”” Hodel, 452 U.S. at 276, 101 S.Ct. at 2306

(quoting Heart of Atlanta Motel, Inc. v. United States, 379

U.S. 241, 262, 85 S.Ct. 348, 360, 13 L.Ed.2d 258 (1964)).

“The judicial task is at an end once the court determines that

Congress acted rationally in adopting a particular regulatory

scheme.” Hodel, 452 U.S. at 276, 101 S.Ct. at 2360. Such

limited judicial review is required as the commerce clause

constitutes a “grant of plenary authority to Congress.”

Hodel, 452 U.S. at 276, 101 S.Ct. at 2360. See also State of

Texas v. United States, 730 F.2d 339 (Sth Cir.), cert. denied,

469 U.S. 892, 105 S.Ct. 267, 83 L.Ed.2d 203 (1984)

(applying “minimal scrutiny” to uphold under the commerce

clause the constitutionality of §§ 201, 202, 203 and 214 of

the Staggers Rail Act of 1980, 49 U.S.C. §§ 10501, 10701a,

10709 and 11501).

[3] In their challenge to § 1247(d), plaintiffs and amici

curiae do not contend that § 1247(d) is a regulation of an

activity which does not affect interstate commerce. Rather,

they contend that the regulatory scheme embodied in

§ 1247(d) is not reasonably adapted to Congress’ announced

purpose of preserving soon-to-be abandoned railroad rights-

of-way for future reactivation of rail service. However, as

-B8-

Congress’ prior legislation with respect to railroad abandon-

ments and the circumstances surrounding its enactment of

§ 1247(d) demonstrate, Congress rationally elected to

postpone railroad abandonments and to encourage interim

trail use as a means of furthering its “railbanking” purpose.

Simply stated, §1247(d) evidences a “reasonable

relation{ship] between the means selected and the end

desired.” State of Texas v. United States, 730 F.2d 339, 350

(Sth Cir.), cert. denied, 469 U.S. 892, 105 S.Ct. 267, 83

L.Ed.2d 203 (1984).

(ii) Railroad Abandonments: The Statutory

Framework

By enacting the Interstate Commerce Act, 49 U.S.C.

§ 10101, et seqg., Congress granted the ICC broad authority to

regulate the activities of interstate rail carriers, including

their decisions to abandon a railroad line. Chicago & N.W.

Transportation Co. v. Kalo Brick & Tile Co., 450 U.S. 311,

313, 101 S.Ct. 1124, 1128, 67 L.Ed.2d 258 (1981). Indeed,

Congress vested in the ICC “exclusive” and “plenary”

authority over railroad abandonments. Kalo Brick, 450 U.S.

at 321, 101 S.Ct. at 1132. Such authority “is critical to the

congressional scheme, which contemplates comprehensive

administrative regulation of interstate commerce.” Kalo

Brick, 350 U.S. at 321, 101 S.Ct. at 1132.

Generally speaking, a railroad may only discontinue

Operations or abandon a railroad line if it obtains the

approval of the ICC. 49 U.S.C. § 10903.° Section 10903

provides in pertinent part as follows:

(a) A rail carrier providing transportation subject

to the jurisdiction of the [ICC]... may —

’ The procedures a railroad must follow in seeking ICC approval

are set forth in 49 U.S.C. § 10904.

=) ee

(1) abandon any part of its railroad lines; or

(2) discontinue the operation of all rail transpor-

tation over any part of its railroad lines; only if the

[ICC] finds that the present or fuiure public conven-

ience and necessity require or permit the abandon-

ment or discontinuance. ...

In determining whether to approve a proposed abandon-

ment or discontinuance, the ICC “must balance ‘the interests

of those now served by the present line on the one hand, and

the interests of the carrier and the transportation system on

the other.’” Kalo Brick, 450 U.S. at 321, 101 S.Ct. at 1132

(quoting Purcell v. United States, 315 U.S. 381, 384, 62

S.Ct. 709, 711, 86 L.Ed. 910 (1942)). Once the ICC strikes

the balance, “its conclusion is entitled to considerable

deference.” Kalo Brick, 450 U.S. at 321, 101 S.Ct. at 1132.

Under 49 U.S.C. § 10905, and whenever the ICC finds

that the public convenience and necessity require or permit

abandonment or discontinuance of a particular railroad line,

the ICC must publish its finding in the Federal Register so as

to afford a person who wishes to prevent the abandonment or

discontinuance an opportunity either to purchase or subsidize

the line for continued operation. 49 U.S.C. § 10905(c);

Hayfield N.R.R. v. Chicago & N.W. Transportation Co., 467

U.S. 622, 629, 104 S.Ct. 2610, 2615, 81 L.Ed.2d 527 (1984).

If an offer is forthcoming, the railroad and the offeror will be

granted an opportunity to negotiate an agreement. If an

agreement is not reached, either party may request the ICC to

set the terms and conditions for the transaction: 49 U.S.C.

§ 10905(e). When the ICC sets the terms and conditions, the

railroad is bound by them, but the offeror is not. 49 U.S.C.

§ 10905(f). The purpose of 49 U.S.C. § 10905 is to

“accommodate the conflicting interests of railroads that

desire to unburden themselves quickly of unprofitable lines

and shippers that are dependent upon continued rail service.”

Hayfield, 467 U.S. at 630, 104 S.Ct. at 2615.

-B 10-

Finally, and again only when the ICC determines that the

public convenience or necessity require or permit abandon-

ment or discontinuance of a particular railroad line, the ICC

must find whether the particular line is “suitable for use for

public purposes, including highways, other forms of mass

transportation, conservation, energy production or transmis-

sion, or recreation.” 49 U.S.C. § 10906. If the ICC finds

that the line is suitable for use for public purposes, it “may

be sold, leased, exchanged or otherwise disposed of” only

upon the conditions imposed by the ICC. Such conditions

may include a prohibition against the sale of the line for up

to 180 days unless the line has first been offered for sale,

upon reasonable terms, for public purposes. In contrast to its

power under § 10905, however, the ICC cannot set the terms

upon which the railroad must sell the line. It may only

postpone abandonment for up to 180 days.

As a general matter once the ICC has authorized an aban-

donment pursuant to a certificate of abandonment, the ICC’s

jurisdiction over the railroad line is terminated. Hayfield,

467 U.S. at 633, 104 S.Ct. at 2617. However, as the Hayfield

Court made clear, the ICC may extend its jurisdiction and

impose post-abandonment conditions when it is expressly

authorized to do so by statute. Hayfield, 467 U.S. at 633,

104 S.Ct. at 2617. Thus, under 49 U.S.C. § 10906, it may

postpone abandonment for up to 180 days after the issuance

of a certificate of abandonment. Nevertheless, when no such

condition is imposed, “ ‘the disposition of rail property after

an effective certificate of abandonment has been exercised is

a matter beyond the scope of the [ICC’s]} jurisdiction....’”

Hayfield, 467 U.S. at 634, 104 S.Ct. at 2617 (quoting

Abandonment of Railroad Lines and Discontinuance of

Service, 365 I.C.C. 249, 261 (1981)). In that event,

“ ‘[qjuestions of title to, and disposition of, the property are

. . . Matters subject to state law.’ ” /d.

-Bll-

(iii) Congress’ Development of a National

Railbanking Policy

In the Railroad Revitalization and Regulatory Reform Act

of 1976 (“4-R Act”), Pub.L. No. 94-210, 90 Stat. 31

(codified as amended at 45 U.S.C. §§ 801-855), Congress

evidenced its concern over railroad abandonments and their

Section 809(a)(2) of the 4-R Act, it directed the Secretary of

Transportation to preare a report “evaluating the advantages

of establishing a rail bank consisting of selected [abandoned

railroad] rights-of-way” and discussing “interim uses for

such rights-of-way.” 90 Stat. 144, 145. In the ensuing

report, the Secretary documented the validity of Congress’

concern. United States Department of Transportation,

Availability and Use of Abandoned Railroad Rights-of-Way

(1977) (“Report”). In the previous seven years, rail carriers

had either abandoned or had pending applications to abandon

21,000 miles of railroad track in the continental United

States. Report, at 3. Moreover, the American Association of

Railroads estimated that the nation’s remaining 200,000

. Congress’ concern was not new. In enacting the Regional Rail

Reorganization Act of 1973 (“3-R Act”), Pub.L. No. 93-236, 87 Stat.

985 (codified as amended at 45 U.S.C. §§ 701-797m), Congress was

responding to the bankruptcy of certain railroads in the northeast and

midwest regions of the country which it believed threatened the

national welfare. See State of Texas v. United States, 730 F.2d 339,

344 (Sth Cir.), cert. denied, 469 U.S. 892, 105 S.Ct. 267, 83 L.Ed.2d

203 (1984). The legislation created the United States Raiiway

Association and directed it to develop a plan for the reorganization

of railroads in the northeast and midwest into an economically viable

rail transportation system. Harbridge House, Inc., Availability and

Use of Abandoned Rights of Way 1 (1977). One of the goals of the

plan was “the preservation ... of existing patterns of service by

railroads (including short-line and terminal railroads), and of

existing railroad trackage in areas in which fossil fuel natural

resources are located... .” Section 206(a), 87 Stat. 994.

-B12-

miles of track would be reduced by a further twenty percent

over the next decade. Report, at 3. Not surprisingly, the

Secretary concluded that abandoned railroad rights-of-way

constitute a “significant problem,” albeit one ripe for “oppor-

tunity.” Report, at 3.

Under the 4-R Act, Congress also enacted substantive

measures to alleviate the problem. Section 803, codified at

49 U.S.C. App. § 1654(f)-(0), directed the Secretary of

Transportation to provide financial assistance to states for

freight assistance programs designed to cover the continua-

tion of rail service, the purchase of rail lines to maintain

existing or to provide for future rail service, the rehabilita-

tion and improvement of rail lines and the cost of reducing

the costs of lost rail service in a manner less expensive than

continuing rail service. Section 810 directed the Secretary of

Transportation to establish a federal rail bank for the purpose

of preserving existing service to areas in which fossil wy

natural resources or agricultural production are located.’

Section 809(b) directed the Secretary of the Interior to pro-

vide financial assistance to all governmental entities “for

programs involving the conversion of abandoned railroad

rights-of-way to recreation and conservational uses... .”

Finally, Section 809(c), codified at 49 U.S.C. § 10906,

required the ICC to consider whether railroad rights-of-way

appropriate for abandonment would serve other public uses.

Although in his Report the Secretary of Transportation did

not directly address interim trail use of a railroad right-of-

way appropriate for abandonment, the final report of the

7 In his Report, the Secretary was concerned that § 803 and § 810

created two distinct rail banking programs which were not wholly

consistent with one another and which were separately administered

by the states and the federal government. Report at 37. His concern

was that such concurrent administration “would create confusing and

complex administrative problems.” /d. In the Local Rail Service

Assistance Act of 1980, Pub.L. No. 95-607, 92 Stat. 3064, Congress

repealed § 810.

-B 13-

Harbridge House regarding railbanking and from which the

Secretary derived his Report, recognized that such “social

benefits” as a “biking or hiking trail” could be realized from

such a use. Harbridge House, Inc., Availability and Use of

Abandoned Rights of Way Ill-11 (1977) (‘“Harbridge

Report”). However, the Harbridge Report noted that such

interim use would shift “the purpose of the rail bank from a

passive custodial role to an active one, with attendant ad-

ministrative and management problems”. Harbridge Report,

at III-11. Furthermore, it noted that such use might consti-

tute an abandonment under state law. Harbridge Report, at

IV-7. As a result, and since “railbanking itself is in a nas-

cent stage,” it discouraged a contemporaneous implementa-

tion of an interim use program. Harbridge Report, at III-12.

(iv) Section 1247(d)

Under § 1247(d), Congress granted interested parties the

opportunity to use, for recreational purposes, and to preserve,

for future rail service, railroad rights-of-way which have

been approved for abandonment. Section 1247(d) provides

that if interim trail use “is subject to restoration or

reconstruction for railroad purposes” then such 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.” It aiso provides that if a qualified public or

private entity is prepared to assume full responsibility for the

management of the right-of-way and for any liability arising

out of its transfer or use, the ICC “shall impose such terms

and conditions as a requirement of any transfer or con-

veyance for interim use in a manner consistent wiih [the

National Trails System Act], and shall not permit abandon-

ment or discontinuance inconsistent or disruptive of such

use.”

In its decision construing § 1247(d), and accompanying its

issuance of final implementing rules, the ICC concluded that

-B 14-

§ 1247(d) applies only when a railroad voluntarily enters into

an interim trail use agreement and only when the right-of-

way is subject to future reconstruction and reactivation of

rail service.® Rail Abandonments — Use of Rights-of-Way

as Trails, __ LC.C.2d ____ (served May 6, 1986). More

specifically, it concluded that:

(a) Section 1247(d) does not give the [ICC] the

power to condemn railroad rights-of-way for in-

terim trail use and rail banking;

-(b) Railroads and prospective interim trail users

may voluntarily enter into agreements to use

rights-of-way;

subject to reactivation of rail service by the owner

of the right-of-way and subject to the interim user

continuing to take full responsibility for liability in

connection with trail use, and for managing and

paying taxes on the rights-of-way; and

(d) Section 1247(d) preempts state laws that would

otherwise result in extinguishment of easements for

railroad purposes and reversion of rights-of-way to

abutting landowners.

Rail Abandonments, slip op. at 6. In conformity with these

conclusions, the ICC issued final implementing rules. 49

C.F.R. §§ 1105 and 1152.

Under its final rules, when the ICC finds that a railroad

right-of-way is appropriate for abandonment under 49 U.S.C.

§ 10903 and when a qualified public or private entity offers

to maintain the right-of-way for interim trail use, the ICC

8 The Court of Appeals for the Ninth Circuit has subsequently

upheld the ICC’s interpretation of § 1247(d) as requiring a voluntary

agreement between the abandoning railroad and the prospective

interim trail user. See Washington State Dept. of Game v. 1.OC.,

829 F.2d 877 (9th Cir. 1987).

-B15-

issues a CITU. The CITU permits the railroad to discontinue

rail service, cancel tariffs and salvage track and other equi-

pment. Rail Abandonments, slip op. at 17. It further pro-

vides the railroad and the prospective interim trail user 180

days tO negotiate an interim trail use agreement. Rail

Abandonments, slip op. at 17. If no agreement is reached,

“then the CITU will convert into an effective certificate of

abandonment, permitting the railroad to abandon the line

immediately.” Rail Abandonments, slip op. at 17. _ If,

however, an agreement is reached, the ICC will permit

interim trail use and hold in abeyance its authorization to

abandon the right-of-way. Rail Abandonments, slip op. at

17. Should the trail user thereafter seek to terminate its use

of the right-of-way, it must file a “petition to reopen the

abandonment proceeding” so that the ICC may “issue a

certificate of abandonment to the railroad and to the trail

user.” Rail Abandonments, slip op. at 17.

By enacting § 1247(d), Congress explicitly seeks to fur-

ther “the national policy to preserve established railroad

rights-of-way for future reactivation of rail service, to pro-

tect rail transportation corridors, and to encourage energy

efficient transportation use” while at the same time to allow

for interim trail use “in a manner consistent with (the

National Trails System Act}.” Indeed, and as the legislative

history to § 1247(d) makes clear, Congress was acting out of

concern over the failure of prior efforts to establish a

“process through which railroad rights-of-way which are not

immediately necessary for active service can be utilized for

trail purposes.” H.R.Rep. No. 98-28, 98th Cong., Ist Sess. 1,

8, reprinted in U.S. Code Cong. & Ad.News 1983, pp. 112,

119. Such prior efforts failed in large part because once a

railroad right-of-way is abandoned and no longer subject to

the ICC’s jurisdiction, it usually reverts under state law to

the owners of the fee underlying the railroad right-of-way

and therefore cannot be conveyed by the railroad for a non-

railroad purpose. See, e.g., Lawson v. State of Washington,

-B 16-

107 Wash.2d 444, 730 P.2d 1308 (1986); Schnabel v. County

of DuPage, 101 Ill.App.2d 533, 57 Ill.Dec. 121, 428 N.E.2d

671 (1981); Pollnow v. Department of Natural Resources, 88

Wis.2d 350, 276 N.W.2d 738 (1979). Accordingly, “[t)he

key finding of § 1247(d)] is that interim use of a railroad

right-of-way for trail use, when the route itself remains intact

for future railroad purposes, shall not constitute an abandon-

ment of such rights-of-way for railroad purposes.” H.R.Rep.

No. 98-28, 98th Cong., Ist Sess. 1, 8, reprinted in U.S. Code

Cong. & Ad.News pp. 112, 119. See also Baltimore & Ohio

Railroad Co. — Exemption — Abandonment in Richland

County, Ohio, ICC No. AB-19 (Sub.-No. 121X), served

March 18, 1987 (“[t]he key purpose of section § 1247(d) is to

preserve the status of a right-of-way as a line of railroad in

order that it may remain intact for future railroad purposes

by providing for interim trail use before abandonment

occurs....”).

As both the plain language of § 1247(d) and its legislative

history indicate, § 1247(d) is designed to further the rail-

banking policies of the 4-R Act and to encourage the recrea-

tional and conservational policies of the National Trails

System Act. It is intended to “protect railroad interests by

providing that the right-of-way can be maintained for future

railroad use even though service is discontinued and tracks

removed” and to “assist recreational users by providing

Opportunities for trail use on an interim basis where such

situation exists.” H.R.Rep. No. 98-28, 98th Cong., Ist Sess.

1, 9, reprinted in U.S. Code Cong. & Ad.News 1983, pp.

112, 120. By serving both interests, it reflects, to borrow the

words of the Secretary of Transportation, Congress’ aware-

ness that railroad abandonments constitute a “significant

problem,” ripe for “opportunity.”

eB a7 -

(v) Commerce Clause Analysis

Given Congress’ “plenary” authority under the commerce

clause, its enactment of the statutory abandonment

framework, particularly 49 U.S.C. § 10906 which encourages

alternate public uses of railroad rights-of-way which are

abandoned but not railbanked, its underlying concern with

the effect of railroad abandonments on the interstate rail

network which gave rise to the 4-R Act, and its frustration

over the failure of prior railbanking efforts, the Court can

only conclude that Congress acted rationally in enacting

§ 1247(d) by electing to postpone railroad abandonments and

to encourage interim trail use so as to further its railbanking

purpose. The means selected are reasonably related to the

end desired. State of Texas v. United States, 730 F.2d 339,

350 (Sth Cir.), cert. denied, 469 U.S. 892, 105 S.Ct. 267, 83

L.Ed.2d 203 (1984). Here the Court’s “relatively nariow”

task in evaluating § 1247(d) under the commerce clause must

conclude. Hodel, 452 U.S. at 276, 101 S.Ct. at 2360.

But plaintiffs and amici curiae would extend the Court’s

task still further. Specifically, they contend that the means

chosen by Congress are particularly ineffective to achieve its

railbanking purpose inasmuch as § 1247(d) would only effect

five percent of all railroad rights-of-way which are proposed

for abandonment and as its implementation rests on the

railroad and the prospective trail user rather than on

Congress or the ICC. See Plaintiffs’ Memorandum in

Opposition to Motion of the United States ... for Summary

Judgment and to Supplement Plaintiffs’ Previously Filed

Memoranda in Support of their Motion for Summary

Judgment at 7-15. Assuming the truth of their contention, it

is Of no avail. “[T)he effectiveness of existing laws in

dealing with a problem identified by Congress is ordinarily a

matter committed to legislative judgment.” Hodel, 452 U.S.

at 283, 101 S.Ct. at 2364. Here, as in Hodel, “Congress

considered the effectiveness of existing laws and concluded

-B 18-

that additional measures were necessary to deal with the

interstate commerce effects” of railroad abandonments.

Hodel, 452 U.S. at 283, 101 S.Ct. at 2364. It then responded,

rationally, by enacting § 1247(d).

C. Impairment of the Obligation of Contracts and

the Due Process Clause of the Fifth Amendment

Plaintiffs and amici curiae contend that § 1247(d) consti-

tutes an impermissible impairment of the obligation of

contracts under Article I, Section 10 of the United States

Constitution and a violation of the due process clause under

the fifth amendment of the United States Constitution. In

essence, they contend that the right-of-way agreements

entered into between plaintiffs’ and M-K-T’s predecessors in

interest constitute contracts under state law and that such

contracts are impaired to the extent that § 1247(d) interferes

with plaintiffs’ right to exercise full fee simple ownership

over the rights-of-way. The Court finds that this argument is

not meritorious.

[4] At the outset, the Court notes that Article I, Sec-

tion 10 applies only to state, not federal, legislation.” See

Nachman Corp. v. Pension Benefit Guaranty Corp., 592 F.2d

947, 959 (6th Cir.), aff d, 446 U.S. 559, 100 S.Ct. 1723, 64

L.Ed.2d 354 (1980); Speckmann y. Paddock Chrysler

Plymouth, Inc., 565 F.Supp. 469, 473 (E.D.Mo. 1983). As

§ 1247(d) is a federal statute, analysis of plaintiffs’ and

amici curiae’s claim under Article I, Section 10 is inap-

propriate. However, to- the extent that they contend

§ 1247(d) unconstitutionally impairs a private contractual

9 Article I, Section 10 provides in pertinent part: “No State shall

. pass any ... law impairing the Obligation of Contracts.”

(emphasis added).

-B19-

right, analysis under the due process clause of the fifth

amendment is appropriate.

[5S] Under such an analysis, plaintiffs must demonstrate

both that § 1247(d) alters contractual rights or obligations

and, if an impairment is found, that it is of constitutional

dimension. National R.R. Passenger Corp. v. Atchison,

Topeka & Santa Fe Ry., 470 U.S. 451, 105 S.Ct. 1441, 1455,

84 L.Ed.2d 432 (1985). If the alteration of contractual rights

or obligations is minimal, the court’s inquiry may end; if,

however, it is substantial, the court must look more closely at

the legislation. National R.R. Passenger Corp., 105 S.Ct. at

1455. The court’s inquiry nevertheless remains limited.

“The party asserting a Fifth Amendment due process viola-

tion must Overcome a presumption of constitutionality and

‘establish that the legislature has acted in an arbitrary and

irrational way.’ ” National R.R. Passenger Corp., 105 S.Ct.

at 1455 (quoting Pension Benefit Guaranty Corp. v. R.A.

Gray & Co., 467 U.S. 717, 729, 104 S.Ct. 2709, 2717, 81

L.Ed.2d 601 (1984)).

Assuming without deciding that the right-of-way agree-

ments entered into between plaintiffs’ and M-K-T’s

predecessors in interest, created contractual rights in plain-

tiffs, and that these rights are substantially impaired by

reason of § 1247(d), plaintiffs still cannot meet their burden

of demonstrating that Congress acted in “an arbitrary and

irrational way” when it enacted § 1247(d). As the discussion

in Part B of this memorandum indicates, Congress acted

rationally in enacting § 1247(d) by electing to postpone

railroad abandonments and to encourage interim trail use so

as to further its railbanking purpose. Accordingly, plaintiffs’

claim under the due process clause of the fifth amendment

must fail.

- B 20-

D. The Takings Clause of the Fifth Amendment

Plaintiffs and amici curiae seek a declaration that

§ 1247(d) is unconstitutional as applied to plaintiffs as it

constitutes a taking of their property without just compensa-

tion. !° Specifically, they contend that § 1247(d) constitutes

a temporary regulatory taking of plaintiffs’ property as it

postpones the vesting of plaintiffs’ reversionary interests in

the M-K-T right-of-way without affording them an adequate

remedy at law. As plaintiffs’ request for equitable relief is

inappropriate, and as they have an adequate remedy under

the Tucker Act, 28 U.S.C. § 1491, the Court finds their

argument lacking in merit.

[6] The fifth amendment provides in pertinent part that

“... private property [shall not] be taken for public use,

without just compensation.” As its language indicates, and

as the Supreme Court has frequently observed, the amend-

ment “does not prohibit the taking of private property, but

10 To the extent plaintiffs and amici curiae’s claim may be

construed as a facial challenge to § 1247(d), it is without merit.

Under such a challenge, the only issue before the Court is whether

the “mere enactment of § 1247(d) constitutes a taking.” Hodel, 452

U.S. at 295, 101 S.Ct. at 2370 (citation omitted). The mere enact-

ment of a statute does not effect a taking of property if it advances

legitimate governmental interests and if it does not deny an owner

economically viable use of this property. Agins v. Tiburon, 447 U.S.

255, 260-63, 100 S.Ct. 2138, 2141-43, 65 L.Ed.2d 106 (1980). First,

§ 1247(d) clearly advances legitimate governmental interests.

Second, it will not deny an owner economically viable use of his

property in all situations. For instance, a railroad which owns a fee

interest in a#ight-of-way may wish to enter into an agreement with a

prospective interim trail user so as to relieve itself of its financial

obligations to maintain the right-of-way until it is ready to resume

service on the right-of-way or to sell it to another rail carrier. No

taking would occur here as the railroad is neither obligated to enter

into negotiations with a prospective trail user nor obligated to enter

into an agreement with it.

-B21-

instead places a condition on the exercise of that power.”

First English Evangelical Lutheran Church v. Los Angeles

City, __. ~ U.S. __. 107 S.Ct. 2378, 2385, 96 L.Ed.2d 250

(1987) (citations omitted). Its purpose is “not to limit...

governmental interference with property rights per se”;

rather, it is “to secure compensation” in the event such inter-

ference occurs. First English, 107 S.Ct. at 2386. Thus when

the government effectuates a taking it “necessarily implicates

the ‘constitutional obligation to pay just compensation.’ ”

First English, 107 S.Ct. at 2386 (quoting Armstrong v.

United States, 364 U.S. 40, 49, 80 S.Ct. 1563, 1569, 4

L.Ed.2d 1554 (1960)). Moreover, the amendment does not

require that just compensation be paid in advance of, or

contemporaneously with, the taking. Ruckleshaus v.

Monsanto Co., 467 U.S. 986, 1016, 104 S.Ct. 2862, 2879-80,

81 L.Ed.2d 815 (1984). All that it requires is that a

“ ‘reasonable, certain and adequate provision for obtaining

compensation’ ” exist at the time of the taking. Regional

Rail Regorganization Act Cases, 419 U.S. 102, 124-25, 95

S.Ct. 335, 349, 42 L.Ed.2d 320 (1974) (quoting Cherokee

Nation v. Southern Kansas R.R., 135 U.S. 641, 659, 10 S.Ct.

965, 971, 34 L.Ed. 295 (1890)).

[7, 8] Accordingly, and so long as a suit for compensa-

tion may be brought subsequent to the taking, equitable relief

is not available to enjoin the government, duly authorized

by law, from taking private property for a public use.

Monsanto, 467 U.S. at 1016, 104 S.Ct. at 2879-80 (citing

Larson v. Domestic & Foreign Commerce Corp., 337 U.S. ~

682, 697 n. 18, 69 S.Ct. 1457, 1465, n. 18, 93 L.Ed. 1628

(1949)). When, as in this instance, property owners allege

the United States has taken their property, compensation

must ordinarily be sought in the United States Claims Court

under the Tucker Act, 29 U.S.C. § 1491.'' Monsanto, 467

li The Tucker Act, 28 U.S.C. § 1491, provides in pertinent part:

The United States Claims Court shall have jurisdiction to

(continued)

-B22-

U.S. at 1016, 104 S.Ct. at 2879-80 (citations omitted). If the

property owners do not avail themselves of their remedy

under the Tucker Act, and if that remedy is an adequate one,

their taking claims are premature. Monsanto, 467 U.S. at

1019, 104 S.Ct. at 2881.

[9] Plaintiffs and amici curiae contend that the Claims

Court is without authority to award plaintiffs compensation

as § 1247(d) does not contain any congressional authority,

express or implied, for a particular taking claim. See, e.g.

Southern California Financial Corporation v. United States,

634 F.2d 521, 225 Ct.Cl. 104 (1980). Accordingly, and as

plaintiffs do not have an adequate remedy under the Tucker

Act, they contend § 1247(d) should be declared unconstitu-

tional. Their contention is severly flawed.

In determining whether a remedy is available for claims

arising out of a taking pursuant to a federal statute, “the

proper inquiry is not whether the statute ‘expresses an

affirmative showing of a congressional intent to permit

recourse to a Tucker Act remedy,’ ” but, rather, “ ‘whether

Congress has in the [statute] withdrawn the Tucker Act grant

of jurisdiction to the [Claims Court]....’” Monsanto, 467

U.S. at 1017, 104 S.Ct. at 2880 (quoting Regional Rail

(ftn. continued) ; ; ;

render judgment upon any claim against the United States

founded either upon the Constitution, or any Act of

Congress or any regulation of an executive department,

or upon any express or implied contract with the United

States, or for liquidated or unliquidated damages in cases

not sounding in tort. The Supreme Court has held that

“(ijf there is a taking, the claim is ‘founded upon the

Constitution’ and within the jurisdiction of the [Claims

Court] to hear and determine.” United States v. Causby,

328 U.S. 256, 267, 66 S.Ct. 1062, 1068-69, 90 L.Ed.

1206 (1946). However, the district courts also have

concurrent jurisdiction to consider all claims against the

United States which are “founded upon the Constitution”

and which do not exceed $10,000 in amount.

- B 23 -

Reorganization Act Cases, 419 U.S. at 126, 95 S.Ct. at 350).

Indeed, and as previously noted, when the government effec-

tuates a taking, it has impliedly promised to pay just compen-

sation and has afforded a remedy for its recovery by a suit

under the Tucker Act. Yearsley v. Ross Construction Co.,

309 U.S. 18, 21, 60 S.Ct. 413, 414-15, 84 L.Ed. 554 (1940).

Altogether absent in § 1247(d) or its legislative history is

a discussion of the interaction between § 1247(d) and the

Tucker Act. As the Tucker Act grants the Claims Court

“jurisdiction to render judgment upon any claim against the

United States founded .. . upon the Constitution,” this Court

would have to infer a withdrawal of jurisdiction with respect

to takings under § 1247(d) either from the structure of the

statute or its legislative history. Such a withdrawl of juris-

diction would amount to a partial repeal of the Tucker Act.

Monsanto, 467 U.S. at 1017, 104 S.Ct. at 2880. As the

Supreme Court has often recognized, however, “repeals by

implication are disfavored.” Monsanto, 467 U.S. at 1017,

104 S.Ct. at 2880 (citations omitted). Moreover, if § 1247(d)

and the Tucker Act are “ ‘capable of coexistence, it is the

duty of the courts, absent a clearly expressed congressional

intention to the contrary, to regard each as effective.’ ”

Regional Rail Reorganization Act Cases, 419 U.S. at 133-34,

95 S.Ct. at 353 (quoting Morton v. Mancari, 417 U.S. 535,

551, 94 S.Ct. 2474, 2483, 41 L.Ed.2d 290 (1974)).

Plaintiffs and amici curiae argue that Congress withdrew

the Tucker Act remedy in § 1247(d), as it failed to include

any provision for compensation in § 1247(d) and expressly

declined to appropriate any funds for the acquisition of land

for the Lewis and Clark National Historic Trail in 16 U.S.C.

§ 1249(c)(1), which they allege in conclusional fashion

includes the M-K-T right-of-way. These arguments are

unavailing. First, and as discussed above, the fact that

Congress failed to include any provision for compensation in

§ 1247(d) is of no import, as it has “impliedly promised” to

-B24-

pay just compensation via the Tucker Act if the government

is found to have effectuated a taking. Second, and as the

Interest Groups have amply demonstrated in their responsive

memoranda, the M-K-T right-of-way is not now a part of the

Lewis and Clark National Historic Trail.!?

As discussed in Part B of this memorandum, the “key

finding” of § 1247(d) is that interim trail use of railroad

rights-of-way which are authorized for abandonment and

which are subject to future reactivation of rail service “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.” See H.R.Rep. No. 98-28, 98th Cong., Ist Sess. 1,

8 reprinted in U.S. Code Cong. & Ad.News 1983, pp. 112,

119. In making such a finding, Congress did not address the

liability of the United States to pay just compensation if a

taking be found to have occurred. Congress either did not

believe that the postponement of a railroad’s abandonment of

a right-of-way constituted a taking or assumed that the gen-

eral grant of jurisdiction under the Tucker Act would provide

a mecessary remedy for any taking that might be found to

have occurred. In either event, Congress’ failure to address

12 Plaintiffs and amici curiae’s reliance on Southern California

Financial Corp. v. United States, 634 F.2d 521 (CI.Ct. 1980) is

likewise misplaced. Here the Claims Court reversed a trial court’s

award of damages against the United States in an inverse condemna-

tion suit. Plaintiffs alleged that the Air Force, by means of succes-

sive renewable leases, had permanently taken their property for the

purpose of storing bombs and ammunition. Under the Military

Construction Appropriation Act. the Air Force was required to

obtain the approval of Congress for land acquisitions in excess of

$50,000. Southern Cal., 634 F.2d at 523. The Air Force failed to do

so. As the Claims Court reasoned, “[t}he Air Force could not attain

the same result by camouflaging a larger taking in the guise of

successive renewable leases which were not reviewable by

Congress.” Southern Cal., 634 F.2d at 524. Thus in Southern Cal.,

unlike here, there was no “congressional authorization, express or

implied, for the particular taking.” Southern Cal., 634 F.2d at 523.

-B25-

the issue cannot be construed tc reflect an unambiguous

intention to withdraw the Tucker Act remedy. Accordingly,

as plaintiffs have failed to avail themselves of the Tucker

Act remedy, the Court dismisses their taking claims as

premature. See Monsanto, 467 U.S. at 1019, 104 S.Ct. at

2881.

[10] In a closely-related argument, plaintiffs and amici

curiae contend that Missouri, acting through its agent DNR,

effectuated a taking of plaintiffs’ property without just

compensation within the meaning of the fourteenth

amendment.!> The Court refuses to find such a taking.

First, because they have altogether failed to come forward

with any authority to demonstrate that a state, acting pur-

suant to a lawfully enacted federal statute, may be found to

have taken property without just compensation. Second, and

even if they could make such a demonstration, they have

failed to show, as they are required to do if this Court is to

review their claim, that they have sought compensation

through the procedures provided by the state for obtaining

such relief. See Williamson County Regional Planning

Comm'n v. Hamilton Bank, 473 U.S. 172, 105 S.Ct. 3108,

3117-121, 8/ L.Ed.2d 126 (1985); First English, 107 S.Ct. at

2389 n. 10.

E. The State Law Claims

[11] Plaintiffs and amici curiae contend that § 1247(d)

violates numerous state constitutional and statutory provi-

sions as well as state common law. Specifically, and insofar

as pertinent to the Court, they contend § 1247(d) violates the

due process clause contained in Article I, Section 10 of the

Missouri Constitution, the impairment of the cbligation of

13 The fifth amendment takings clause applies to the states through

the fourteenth amendment. See Chicago B & O R.R. v. Chicago, 166

U.S. 226, 17 S.Ct. 581, 41 L.Ed. 979 (1897).

- B 26-

contracts clause contained in Article I, Section 13 of the

Missouri Constitution and state property law. Upon a review

of the arguments advanced by the parties, the Court finds

that the state laws referred to above are preempted by federal

law.

As the Supreme Court recently observed, the cir-

cumstances under which federal law may be said to preempt

state law are familiar. Schneidewind v. ANR Pipeline Co.,

__. -;U.S. ___, 108 S.Ct. 1145, 1150, 99 L.Ed.2d 316 (1988).

Congress may either explicitly define the extent to which its

enactments preempt state law, or, in the absence of explicit

statutory language, implicitly indicate an intent to occupy a

given field to the exclusion of state law. Schneidewind, 108

S.Ct. at 1150. If Congress has not entirely displaced state

law in a particular field, state law is preempted when it

actually conflicts with federal law. Schneidewind, 108 S.Ct.

at 1150. “Such a conflict will be found ‘when it is impossi-

ble to comply with both state and federal law, Florida Lime

& Avocado Growers, Inc. v. Paul, 373 U.S. 132, 142-43, 83

S.Ct. 1210, 1217, 10 L.Ed.2d 248 (1963), or where the state

law stands as an obstacle to the accomplishment of the full

purposes and objectives of Congress, Hines v. Davidowitz,

312 U.S. 52, 67, 61 S.Ct. 399, 404, 85 L.Ed. 581 (1941).’”

Schneidewind, 108 S.Ct. at 1150-51 (citations omitted).

In this case, § 1247(d) by its express terms preempts state

law insofar as that law would permit reversion of the M-K-T

right-of-way to plaintiffs while the right-of-way is being

used on an interim basis as a trail. Moreoever, § 1247(d) is

an adjunct to a federal regulatory scheme which the Supreme

Court has viewed as plenary, exclusive and preemptive. See,

e.g., Chicago & N.W. Transportation Co. v. Kalo Brick &

Tile Co., 450 U.S. 311, 101 S.Ct. 1124, 67 L.Ed.2d 258

(1981). Upon review, the Court concludes that the applica-

ble state law would interfere with the federal objective of

preserving railroad rights-of-way for future rail service

through interim trail use and is therefore preempted.

-B27-

Plaintiffs and amici curiae have not presented any colorable

arguments which would lead to a contrary conclusion.

ORDER AND JUDGMENT

Pursuant to the memorandum filed herein on this date,

IT IS HEREBY ORDERED that plaintiffs’ motion for

summary judgment be and it is denied.

IT IS FURTHER ORDERED that defendants Missouri-

Kansas-Texas Railroad Company, Department of ~'atural

Resources and Frederick A. Brunner’s motion for summary

judgment, defendants Conservation Federation of Missouri,

et al.’s motion for judgment on the pleadings or, in the

alternative, for summary judgment, and defendant United

States of America’s motion for partial summary judgment be

and they are granted.

In light of the foregoing,

IT IS HEREBY ORDERED, ADJUDGED and DECREED

that judgment in this action be and it is entered in favor of

defendants and against plaintiffs. Accordingly, the Court

declares 16 U.S.C. § 1247(d) constitutional.

APPENDIX C

a4:

SERVICE DATE

MAR 16 1987

INTERSTATE COMMERCE COMMISSION

DECISICN

Docket No. AB-102 (Sub-No. 13)

MISSOURI-KANSAS-TEXAS RAILROAD COMPANY —

ABANDONMENT — IN ST. CHARLES, WARREN,

MONTGOMERY, CALLAWAY, BOONE, HOWARD,

COOPER AND PETTIS COUNTIES, MO

Decided: March 6, 1987

By application filed September 26, 1986,! the Missouri-

Kansas-Texas Railroad Company (MKT) seeks to abandon its

199.92-mile line of railroad between Machens (milepost

26.92) and Sedalia, MO (milepost 226.84). Public notice

was properly given. Protests were filed by Missouri Depart-

ment of Natural Resources (DNR); Missouri Rail Improve-

ment Authority (Authority); Union Electric Company

(Union); and MFA Incorporated (MFA).

Comments were filed by United States Department of the

Interior (DOI); Missouri Highway and Transportation Com-

mission (Transportation Commission); Boone County Com-

mission; City of St. Charles, MO; Town of Hartsburg, MO;

Village of Rhineland, MO; St. Charles and Augusta Railroad

(St.C&A); Rails-to-Trails Conservancy, National Wildlife

Federation, and Conservancy Federation of Missouri (Com-

menters); Paraquad; St. Charles Tourism Commission;

| MKT’s application, initially filed August 25, 1986, was rejected

by decision served September 26, 1986, due to a failure of

publication.

Special Recreational Council of Greater St. Louis; Missouri

Park and Recreation Association; Lewis & Clark Trail Heri-

tage Foundation; St. Louis Disabled Voters Council;

Boonsville Chamber of Commerce; Clinton Chamber of

Commerce; St. Charles Quarry Company; Missouri Farm

Bureau; Holiday Inn of St. Peters/St. Charles; and the follow-

ing individuals: Donald J. and Delores I. Vitt, Richard H.

Luecke, Pam Hinrichs, Mr. & Mrs. Richard Glass, Mary

Stanley, Jeanne M. Kissell, Karl R. Barnickol, J. Donovan

Larson, Carolyn Meyer, Philip G. Enns, Catherine I. Sandell,

James and Kathleen M. Mikolajczak, A. W. Rueff, Helen

Brune, Tim Von Engein, Mary L. Singleton, Sidney

Eldringnoff, Dee Dokken, and Mr. and Mrs. Maurice L.

Glosemeyer. We will also accept a late-filed comment by

the Missouri Valley Steam Engine Ass’n (MoVal). The

Railway Labor Executives’ Association (RLEA), the United

Transportation Union (UTU) and Brotherhood of Locomotive

Engineers (BLE) filed comments on behalf of employees.

Based on the protests and comments, an investigation was

instituted under modified procedure. Verified statements

were filed by MKT, DNR, Commenters and Union. MKT

replied. Most of the comments involve a proposal that the

right-of-way be designated for interim use as a trail under the

National Trails System Act, 16 U.S.C. 1247(d) (Trails Act).

Before we consider the Trails Act issue, we must first deter-

mine whether the public convenience and necessity require

Or permit abandonment.

TRAFFIC

The line is located beside the Missouri River and is part

of MKT’s main line between St. Louis and Parsons, KS.

Most of the traffic was overhead traffic between St. Louis

and the remainder of MKT’s system. Some local traffic was

also generated. Effective March 27, 1986, MKT was granted

overhead trackage rights over a parallel line of the Missouri

Pacific Railroad Company (MP) between Sedalia and St.

Louis.2 MKT then rerouted its overhead traffic onto MP’s

line. MKT continued to provide service on the subject line

for local traffic until October 6, 1986, when the line was

embargoed. The line was heavily damaged by floods and is

currently out of serv.ce. MKT asserts that the amount of

local traffic generated by the line does not justify the

rehabilitation expense needed to resume service.

MKT’s data shows that, in 1984, it handled 44,684 car-

loads on the line, of which 43,778 were overhead and 906

locally generated. In 1985, it handled 45, 138 carloads, of

which 44,362 were overhead and 776 locally generated. In

the first three months of 1986, it handied 12,829 carloads, of

which 12,594 were overhead and 235 locally generated.”

The principal shippers were MFA, whose traffic was grain

and fertilizer ingredients, and Westinghouse Electric Com-

pany (Westinghouse), whose traffic was _ principally

petroleum, and iron and steel sheets. Before April 1986,

MKT operated one train each way on the line daily. After

the diversion of bridge traffic onto MP’s line, MKT states it

provided local service on an “as needed” basis ——- about one

trip per month. .

2 See Notice of Exemption in F.D. 30805, Missouri-Kansas-Texas

R. Co. — Trackage Rights —— Missouri Pacific R. Co. (not printed),

served April 9, 1986.

3 MKT’s data shows that “significant” users generated 879

carloads in 1984, 736 carloads in 1985, and 217 carloads in the first

three months of 1986.

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REVENUE AND COSTS

The following cost and revenue data were submitted:

Base Year

1984 1985 4/85 - 3/86

Revenues $10,572,105 $12,319,883 $11,770,975

Avoidable Costs 7,091,910 6,267,023 6,428,770

Profit 3,480,195 6,052,860 5,342,205

The cost and revenue data were based on operations con-

ducted prior to the diversion of overhead traffic onto MP’s

line. Therefore, MKT submits that the data does not repre-

sent a true picture of the line. It suggests that its subsidy

year calculations are a more reliable indication of revenues

and cost attributable to the line, for they reflect local opera-

tions. The subsidy year projects revenues of $445,425, and

avoidable costs of $2,022,774, resulting in an avoidable loss

of $1,577,349. We agree with MKT ‘that its data are dis-

torted because they include bridge traffic which need not

move over the line.* Under these circumstances and consid-

ering that no objection has been submitted to MKT’s revenue

and cost data, we will accept MKT’s. subsidy year projection

to indicate operations for the line for local traffic only.

REHABILITATION

As stated above, the line is inoperable due to flood dam-

age and will need repair before service is resumed.

4 In the absence of evidence that rerouting of bridge traffic creates

inefficiencies, our long standing practice is to accept railroad

management rerouting decisions.

att S:.

However, the amount of rehabilitation required is uncertain.

MKT claims that rehabilitation of the line would cost

$4,057,629. Before the iine was damaged, MKT states that it

maintained the line at Federal Railroad Administration

(FRA) Class II standards. At that level, MKT operated the

line at 25 miles per hour. MKT proposes to restore the line

to Class II level. MKT notes that the expenditure for

rehabilitation to resume service would be about 30 percent of

its entire track and bridge maintenance budget.

Union objects that MKT’s rehabilitation estimate is in-

flated. It claims that the cost of rehabilitation should be for

the minimum FRA Class I, because MKT has not justified a

higher standard. It cites Southern Pacific Transp. Co. —

Abandonment, 360 I.C.C. 138, 144 (1979) for this

proposition.

While MKT responds that the line was part of its main

line, and it could not operate competitive service at the 10

mile-per-hour speed limit for a Class I line, we also question

MKT’s rehabilitation estimate. The overhead traffic, which

was the vast amount of traffic handled up to April 1986, is

now being moved on MP’s line. Thus, the traffic level on

the subject line would be substantially reduced. Also service

levels would be reduced to an “as needed” basis to handle

only iocal traffic.

In view of these circumstances, MKT has not justified

rehabilitation of the line to Class II levels. Nevertheless, we

recognize that substantial repairs would be required before

service could be resumed. Without alternative cost es-

timates, we cannot recompute the rehabilitation that is

needed to restore the line to Class I standards. Accordingly,

we can conclude only that considerabie rehabilitation is

necessary, but the cost for that rehabilitation is uncertain.

O46.

OPPORTUNITY COST

Continued operation of the line will also require MKT to

incur an annual opportunity cost. Opportunity cost reflects

the economic loss experienced by the carrier from foregoing

a more profitable alternative use of its assets. These costs

are developed by multiplying the net liquidation value (NLV)

of the line by a rate of return equal to the railroad cost of

capital as determined by the Commission. The most recent

Commission determination of railroad cost of capital is 18.6

percent. See Ex Parta No. 274 (Sub-No. 3C) Abandonment of

R. Lines — Use of Opportunity Costs, 1 1.C.C. 2nd 203

(1984).

MKT did not compute its opportunity cost for continued

operation of the line. However, we can use MKT’s unchal-

lenged NLV of $5,859,491 in its cost data to compute oppor-

tunity cost. Under the methodology, MKT’s opportunity cost

would be $1,089,865, and would still be substantial even if a

lower rate of return were used. We note, however, that the

NLV was computed prior to the flood that damaged the line.

The damage probably reduced the NLV to some extent.

Nevertheless, we conclude that MKT would still incur a

substantial opportunity cost, because continued operations

could only be accomplished if the line were rehabilitated and

additional track material were committed to the line, thereby

restoring at least some of the lost value of the line that may

be attributable to the flood.

SHIPPER AND COMMUNITY INTEREST

Protests and comments by DNR, civic organizations, and

individuals principally concern the proposed use of the

right-of-way as a trail. We will discuss these concerns

below. We now discuss issues raised by shippers and com-

munity interests pertinent to the abandonment application.

<CF.

Union generates and supplies electricity. It owns and

operates a nuclear generating plant in Callaway County, MO,

that is located near the line. The plant is connected to the

line at Portland by a spur built by Union. Much of the mate-

rial and equipment used to build the plant moved over the

line.

Union states that it expected to use the line to transport

transformers and heavy equipment to and from the plant

when the plant became operational. The plant uses four 300

ton transformers; three are used to operaie the plant, and one

is maintained as a spare. It asserts that alternative forms of

transportation to move this equipment would be more costly

and are less reliable, particularly during bad weather. While

the future need for such equipment is minimal, using trucks

to haul a large transformer, turbine or generator could cost as

much as $200,000. Energy production at the plant is inex-

pensive when compared to energy produced from other

sources of fuel. But, according to Union, tne possible inabil-

ity to transport equipment could interrupt operation of the

plant and require purchase of electricity from other sources

costing $250,000 per day.

In addition, Union states that abandonment may have

other adverse economic impacts in the area. lis piant site

could be used for a second generating facility. Abandonment

could discourage any such construction project and, thus, be

detrimental to potential employment and economic growth in

the area.

MKT responds that Union has not used the line for the

heavy machinery for the past two years and has no present

intent to use its service in the near future. MKT states fur-

ther that it should not be obligated to rehabilitate the line

because of an undefined potential need for rail service, espe-

cially to transport equipment that has a low failure rate.

MFA contends that abandonment will result in higher

fertilizer costs and lower grain prices. It argues further that

there are not enough trucks to handle its grain harvest. The

Authority and MFA want MKT to reinstall an interchange

with MP at Booneville. The interchange, they assert, will

continue rail access to industries thereby enhancing eco-

nomic development.

MKT responds that the connection was taken out of serv-

ice several years ago because there was no need for the

connection. To restore the connection would cost $30,000

and require rehabilitation of 4,000 feet of track. MKT as-

serts that the amount of traffic generated at Booneville does

not justify reconstructing the connection. However, since

MP will be serving Booneville after abandonment, MKT

suggests that shippers could request that carrier to restore the

connection.

Finally, the Transportation Commission comments that it

has analyzed the application and surveyed the shippers.

According to its analysis, the principal shipper on the line

was Westinghouse in Jefferson City, generating nearly half

the local carloads MKT handled on the line in 1984

and 1985. The Transportation Commission states that

Westinghouse is now using another rail carrier for its ship-

ments. Other shippers contacted by the Transportation Com-

mission were concerned about loss of service, but would not

oppose abandonment.

DISCUSSION AND CONCLUSIONS

The statutory standard govern.ng an abandonment is

whether the present and future public convenience and neces-

sity permit the proposed abandonmeni. 49 U.S.C. 10903. In

implementing this standard, we must weigh the potential

harm to affected shippers and communities against the pre-

sent and future burden that continued operation could impose

on the railroad and on interstate commerce. Colorado v.

United States, 271 U.S. 153 (1926). Here the factors weigh

in favor of abandonment.

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The comments by the Transporation Commission are

especially useful. As a result of its analysis, it concluded

that MKT cannot economically maintain and operate the

nearly 200-mile line to handle iess than 1,000 cars annually.

A low, scattered traffic base, the long length of the line, the

high maintenance costs, and availability of transportation

alternatives that mitigate loss of rail service were factors

considered by the Transporation Commission in deciding not

to oppose the abandonment. We agree with the Transporta-

tion Commission’s conclusions.

We cannot precisely determine from the cost data what

MKT’s economic burden would be if it had to resume opera-

tion. Nevertheless, it is clear that the line has to be repaired

before service can be resumed. Even if the repairs are made,

MKT’s subsidy year projection indicates that operation of the

line to handle only local traffic would not be profitable.

MKT would also incur an opportunity cost, adding to its

economic burden.

On the other hand, the only shippers that oppose the

abandonment are Union and MFA. Union's transporation

needs are uncertain, however, for it has not used the line for

that traffic for which it seeks the line be retained. The only

traffic handled were nine carloads of poles in 1986. To

require MKT to restore the line so Union can have standby

rail service is not justified. On balance, we conclude that

MKT’s economic burden to provide stand by [sic] service to

Union outweighs Union's uncertain needs for rail service.

MFA’s objection that abandonment would result in higher

fertilizer costs are not substantially supported with specific

evidence. Moreover, we have recognized that abandonments

may result in increased costs and inconvenience for shippers.

However, these results are not sufficient to outweigh the

detriment io the public interest of continued operation of

uneconomic or excess facilities. Chicago and North Western

Transportation Company — Abandonment, 354 I.C.C. 1

-C 10-

(1977). This is especially so where alternative transportation

service exists.

We also reject the request that MKT reinstate the inter-

change with MP at Booneville. Having determined that any

expenditures by MKT on the line would be an economic

burden, we will not compel MKT to invest funds that it

cannot possibly recover. The beneficiaries of an inierchange

would be shippers who would gain access to MP. Those

shippers should first contact MP to ascertain what service

arrangements MP is willing to provide them, and review 49

U.S.C. 10742.

We conclude that the economic burden on MKT from

continued operation of the line outweighs inconvenience

shippers may incur as a result of the abandonment. It has not

been demonstrated that abandonment will have a serious

adverse impact on the rural and community development of

the area. Accordingly, we will authorize the abandonment.

LABOR PROTECTION

In approving this abandonment, we must ensure that

affected rail employees are adequately protected. 49 U.S.C.

10903(b)(2). Thus, the concerns of RLEA, UTU and BLE

will be satisfied. We have found that the conditions imposed

in Oregon Short Line, R. Co. — Abandonment — Goshen,

360 I1.C.C. 91 (1979) satisfy these statutory requirements.

They will be imposed here

ENVIRONMENTAL ISSUES

Generally. On November 3, 1986, the Commission's

Section of Energy and Environment (SEE) served an environ-

mental assessment that examined the effects on the environ-

ment from abandonment of the line. SEE determined that

abandonment and subsequent diversion of traffic would not

-Cll-

cause significant adverse impacts to the regional highway

network, air quality, energy consumption and ambiant noise

levels.

As a result of concerns raised by DNR over potential uses

of the right-of-way and preservation of historic resources,

further review was undertaken under section 106 of the

National Historic Preservation Act, 16 U.S.C. 470, et seq

(NHPA). SEE issued a second report on December 24, 1986,

that evaluated the effects of abandonment and other potential

uses of its right-of-way on rail structures, communities along

the line and culturai resources within the rail corridor.

After receiving comments, SEE issued a third report on

February 18, 1987, further considering historical preserva-

tion issues. SEE also reported that, at its request, two

bridges and four depots were determined eligible for the

National Register of Historic Places. In addition, the report

considered the effect of abandonment and alternate rail uses

on flora and fauna within and adjacent to the right-of-way

under section 7 of the Endangered Species Act of 1973, 16

U.S.C. 1531-1543.

Also considered were the impacts on adjacent properties if

the right-of-way were preserved for inter

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