Primed for Preemption: Eminent Domain of Railroad Property under the ICCTA

Tyler L. Martin and Drew Bradshaw

The road to an inconsistent, fact-intensive, national framework for railroad regulation is paved with good intentions—or at least such has been the case in application of the Interstate Commerce Commission Termination Act (“ICCTA”) to condemnations of railroad property by state and local actors. Despite the best intentions of Congress, this particular intersection of transportation law, property law, and issues of federalism has often left the overlapping interests of rail carriers and the nation’s economy in conflict with local actors. This article provides a brief overview of the ICCTA, examines the prevailing regulatory analysis in this purportedly deregulated environment, and concludes with a discussion of a simple solution offered by one federal court to better protect the backbone of interstate commerce.

An Overview of the ICCTA

First arriving on scene in 1996, the ICCTA represents a concerted effort by Congress to broadly preempt state interference with the national system of rail transportation—an industry critical to interstate commerce and the economic interests of the United States.1 The intended effect of the Act was to implement deregulatory policies and promote growth and stability in the surface transportation sector by bringing regulation of rail transportation under the purview of a single regulatory body.2 To accomplish this, the ICCTA grants sweeping regulatory authority over railroad operations to the Surface Transportation Board (“STB”). Specifically, the ICCTA provides the STB with “exclusive” preemptory jurisdiction over (1) “transportation by rail carriers,” as well as (2) “the construction, acquisition, operation, or discontinuance of spur, industrial, team, switching, or side tracks, or facilities, even if the tracks are located, or intended to be located, entirely in one State[.]”3 As evidence of Congress’ preemptory intentions, “transportation” is broadly defined under the Act to include “railroad property, facilities, and equipment ‘related to the movement of passengers or property, or both, by rail, regardless of ownership or an agreement concerning use.’”4 Indeed, the preemptory exercise performed by Congress in the ICCTA appears on its face to be so all-encompassing, that shortly after the Act’s passage, one Federal Circuit Court quipped that it would be “difficult to imagine a broader statement of Congress’ intent to preempt State regulatory authority over railroad operations.”5

But while the plain language of the ICCTA might lead one to the reasonable conclusion that any State interference with railroad operations would be an ill-fated step into the realm of the federal Leviathan, two and a half decades later, the preemptory effect of the Act has proven far from absolute. Rather, as noted by the D.C. Circuit, “all of the circuits have concluded that [ICCTA preemption] does not encompass everything touching on railroads.”6 Instead, federal courts and the STB have generally recognized two manners by which state or local actions or regulations may be preempted under the ICCTA: (1) express, categorical, or facial preemption, and (2) implied or “as applied” preemption.7

“Categorical” preemption occurs “when a state or local action is preempted on its face despite its context or rationale.”8 Regulations falling into this basket come in two breeds: the first being “any form of state or local permitting or preclearance that . . . could be used to deny a railroad the ability to conduct some part of its operations,” and the second being the exercise of state or local regulatory authority over “matters directly regulated by the [STB]—such as the construction, operation, and abandonment of rail.”9 Categorically preempted State action constitutes per se unreasonable interference with railroad operations.10 But even where state or local action is not categorically preempted, it may still be preempted on an “as applied” basis.11 The more permissive of the two forms of preemption, “as applied” preemption results when the facts of a specific regulatory action evidence that it “would have the effect of preventing or unreasonable interfering with railroad transportation.”12 Thus, this second form of preemption is “based on the degree of interference that the particular action has on railroad transportation.”13

With this framework in place, the question becomes which manner of preemption analysis is applicable to state or local condemnation of railroad property—a form of regulatory action described by one federal court as “the most extreme type of control” that government can exercise?14

The Prevailing “As Applied” Preemption Analysis

Somewhat surprisingly, within the context of condemnation actions by state and local actors, the STB and federal courts have widely concluded that the “as applied” preemption analysis provides the appropriate standard.15 As a result, the regulatory environment faced by rail carriers in this sphere remains a far cry from the minimally invasive federal scheme that originally sought “to retain only [those] regulations that are necessary to maintain a ‘safety net’ or ‘backstop’” for this “intrinsically interstate form of regulation.”16

Trouble arises from the litany of competing local interests involving wide swaths of land belonging to rail carriers and the fact-intensive inquiry that results when state and local actors attempt to unilaterally devote that property to a different public purpose. Just like the ebb and flow of national commerce, the needs and demands of a rail carrier along any particular route are subject to constant adjustment.17 However, the “as applied’ inquiry is ill-suited for such a dynamic calculation. Under this analysis, courts are required to examine the current use, anticipated future uses, and safety concerns implicated by a particular condemnation of railroad property at a single point in time—when the condemnation suit was filed—to determine whether the action amounts to “unreasonable interference” with railroad operations. As might be expected, this fact-specific inquiry is rife with speculation and, as a result, operates to undermine the stable, uniformly regulated environment intended by the Legislature.

But while outcomes under this speculative analysis may be difficult to predict, the factors weighed by courts under the “as applied” analysis frequently converge around common themes. Below are some of the leading factors considered by courts in determining whether a condemnation is preempted by the ICCTA.

Interest Taken. The ownership interest taken through eminent domain is often a factor of primary importance in determining whether a condemnation arises to the level of “unreasonable interference” to merit preemption under the prevailing “as applied” analysis. As common sense would dictate, condemnations of large swaths of land are more likely to cause unreasonable interference than smaller takings. Similarly, a fee simple taking will face harsher scrutiny than the condemnation of a non-exclusive easement. For instance, in Buffalo Southern Railroad Inc. v. Village of Croton-on Hudson, the U.S. District Court for the Southern District of New York summarily found that that the planned fee simple taking of a ten-acre triangular parcel of land containing a sparsely used dead-end rail spur, offloading facility, roads, and parking was preempted by the ICCTA because it “would plainly interfere with [the railroad’s] operations.”18 By comparison, in District of Columbia v. 109,205.5 Square Feet of Land, the District Court for the District of Columbia found that the acquisition of an easement for a bike and pedestrian trail did not unreasonably interfere with railroad operations because the rail carrier was still able to access its rail lines and equipment in substantially the same fashion as it had before the taking.19 This decision aligns with the STB’s interpretation of the ICCTA, pursuant to which “non-conflicting and non-exclusive easements . . . are routinely accommodated.”20 However, the fact that a state or local actor takes some interest less than fee simple is not necessarily determinative and may give way to other considerations. For instance, in Union Pacific Railroad Company v. Chicago Transit Authority, the Seventh Circuit concluded that a local actor’s condemnation of a perpetual easement identical to the terms of a prior lease agreement between that actor and a rail carrier was preempted because of its impact on the railroad’s future use of the property—an issue explored in detail below.21

Existing Use. Another frequent consideration in determining whether a condemnation constitutes “unreasonable interference” with railroad operations is the rail carrier’s existing use of the condemned property. Though straightforward at first glance, difficulty arises under this factor as a rail carrier’s use of a particular parcel moves away from those activities obviously in furtherance of rail transportation (like an active rail line) towards support functions or more tangential uses. In City of Lincoln v. Surface Transportation Board, a city-condemnor sought review of the STB’s determination that its condemnation of a twenty-foot strip of a railroad’s right-of-way over several city blocks was preempted by the ICCTA.22 Although the planned condemnation only affected the rail carrier’s right-of-way, and not railroad tracks or facilities, the Eighth Circuit ultimately concluded that the STB was justified in finding the taking preempted because, as argued by the rail carrier, it would leave “insufficient room for storage, loading, and unloading, as well as access to the track for maintenance” all of which are key functions of a rail carrier’s operations.23 However, under the “as applied” analysis, the mere fact that property is owned by a rail carrier and put to some use related to railroad operations may not always lead to the conclusion that a particular condemnation, or other inherently regulatory action, is impermissible under the ICCTA. For instance, in Florida East Coast Railway Company v. City of West Palm Beach, a rail carrier sought to enjoin a city’s application of zoning and licensing ordinances to its property on the grounds that those regulations amounted to preempted interference with railroad operations.24 However, while the property, including offices, warehouses, switching racks, and loading/unloading tracks, was owned by the rail carrier, it was not actually used by the rail carrier.25 Rather, the rail carrier leased the property to its largest customer in the region, which, in turn, used the property as a private distribution facility.26 Although tenuously connected to the railroad operations, the Eleventh Circuit concluded that because the city’s regulatory action was effectively against the rail carrier’s customer, and not the rail carrier itself, the property’s tangential tie to railroad operations was insufficient to invoke the preemptory power of the ICCTA.27

Future Use. Another powerful, albeit speculative, factor often considered under the “as applied” preemption analysis is a rail carrier’s anticipated future use of condemned property for its operations. For instance, in Chicago Transit Authority, a case discussed briefly above, a transit authority sought to continue indefinitely its existing lease agreement with a rail carrier by taking a perpetual easement over railroad property virtually identical to the terms of its existing lease of that property. Accordingly, the transit authority’s condemnation took less than a fee simple interest which was plainly consistent with the rail carrier’s existing use of the property—both factors weighing against preemption under the “as applied” analysis. However, according to the Seventh Circuit, the transit authority’s condemnation was necessarily preempted because it would operate to prevent the rail carrier’s future use of the property for its own purposes.28 Notably, according to the Court, this was true even though the rail carrier was not currently using the property and had no immediate plans to use the property in the future.29 Thus, the mere prospect of future use outweighed all other factors commonly addressed under the “as applied” preemption analysis. The STB has similarly concluded that a rail carrier’s anticipated “long-term plans” for condemned property may result in preemption even where the property is not currently in use “for actual rail service.”30

Safety Concerns. Finally, turning to the most speculative consideration of the “as applied” preemption analysis, a condemnation will be preempted where it poses undue safety concerns. Under this factor, rail carriers, local actors, and the courts are required to move from the current and anticipated uses of railroad property to the unforeseen consequences that could arise from a taking of the same. Notably, while frequently considered in tandem with the unreasonable interference analysis, the determination of whether a particular taking constitutes an undue safety risk is its own, independent consideration. Accordingly, an undue safety risk, standing alone, provides sufficient grounds for preemption under the ICCTA. Given the speculative nature of the inquiry, what constitutes sufficient evidence of an undue safety risk is often in the eye of the beholder. For instance, in Norfolk Southern Railway Company & Alabama Great Southern Railroad Petition for Declaratory Judgment, the STB agreed with a railroad that a planned condemnation of approximately nineteen acres of railroad property for a public park and amphitheater constituted an undue safety risk and, therefore, was preempted by the ICCTA.31 According to the rail carrier in that case, the city’s planned condemnation “would leave insufficient room for equipment needed for track maintenance or for a timely response in the event of a derailment.”32 Despite the city’s evidence to the contrary, including that no less than six other parks were similarly situated across the city, the STB determined that the proposed park “would create serious safety hazards for pedestrians, concert goers and children, because park goers would be close to active rail lines.”33 By comparison, in 109,205.5 Square Feet of Land, the U.S. District Court for the District of Columbia reached the seemingly irreconcilable conclusion that an easement for a bike/pedestrian path and accompanying parking area, in one place measuring a mere twenty-five feet from an active rail line, did not constitute an undue safety risk.34 Accordingly, this factor will often come down to a speculative and costly battle of the experts.

Through due consideration of the factors discussed above, railroads can successfully navigate the perilous “as applied” preemption analysis imposed on condemnations of railroad property. However, this fact-intensive, speculative inquiry remains undeniably at odds with the uniform, federally controlled scheme for surface transportation regulation originally envisioned by Congress in its passage of the ICCTA. Accordingly, in order to better promote the surface transportation industry and interstate commerce, it may be time to revisit the analytical approach taken to condemnations under the ICCTA.

Reclassifying Condemnations under the ICCTA

The national rail transportation system is a nationwide network that comprises approximately 570 railroad companies operating over nearly 140,000 miles of track in forty-nine states and employing over 180,000 personnel. Thus, railroad operations are not a discrete activity that can reasonably be subject to competing regulatory requirements in the form of easements and other restrictions on free ownership enforced by individual states and localities. Recognizing this reality, and in the interest of promoting the surface transportation sector, Congress passed the ICCTA to remove those locally imposed burdens on this intrinsically interstate form of commerce. Given the speculative nature of the current “as applied” analysis governing condemnations of railroad property, a revisit of the standard controlling the preemption inquiry is appropriate. Fortunately, condemnations of railroad property present that rare instance where a simple and obvious answer exists to resolve an otherwise complex problem—the taking of railroad property should be reclassified as a categorically preempted regulatory activity under the ICCTA.

This simple solution was persuasively offered by the Western District of Wisconsin in the case Wisconsin Central Ltd. v. City of Marshfield.35 In that case, a rail carrier sought to enjoin as preempted a city’s proposed condemnation of 6,800 feet of passing track to accommodate a planned highway. Noting the broad language of the ICCTA and its command that “the remedies provided under [the ICCTA] with respect to the regulation of rail transportation are exclusive and preempt the remedies provided under Federal or State law,” the Court concluded that the question before it was simply whether condemnation could be considered a form of regulation.36

Although the ICCTA does not define “regulation,” the Court determined that the meaning of “regulation” is readily apparent—it includes any “act or process of controlling by rule or restriction.”37 By attempting to use state law to condemn a section of the railroad’s track, the Western District of Wisconsin reasoned that the city was undoubtedly “exercising control—the most extreme type of control—over rail transportation as defined in [the ICCTA].”38 Accordingly, the Court bypassed the fact-specific, speculative inquiry required by the “as applied” analysis and determined that any condemnation of railroad property, regardless of its size or scope, operated as an intrusion upon the regulatory framework intended by Congress to control railroad operations.39 Simply put, the condemnation of railroad property is an impermissible attempt “to subject to state law property that Congress specifically put out of reach.”40

The value of this simplified approach to condemnations of railroad property is severalfold. First, as discussed above, categorical preemption better aligns with the plain language of the ICCTA and Congress’s intent to insulate this intrinsically interstate form of commerce from state and local meddling. Moreover, categorically preempting condemnations of railroad property helps to ensure uniformity of regulation across the surface transportation sector and promotes stability by enabling rail carriers to better respond to the dynamic needs of interstate commerce without fearing that a track or facility temporarily out-of-use will be subject to forfeiture for another public purpose. Additionally, this approach better ensures the safety of railroad personnel and the public by requiring arms-length negotiation between local actors and railroads over the public use of railroad property—allowing the rights and obligations concerning safety and maintenance to be fully contemplated prior to railroad property being put to a different public use.


Under the “as applied” preemption analysis, courts frequently consider several fact-intensive factors, including (1) the scope of the taking, (2) the existing use of the property taken, (3) potential future uses of the property, and (4) safety concerns implicated by the taking, to determine whether a particular condemnation of railroad property amounts to impermissible regulation under the ICCTA. However, given the importance of rail transportation to interstate commerce, the time has come to revisit the prevailing preemption analysis. By reclassifying condemnations of railroad property as categorically preempted under the ICCTA, the courts will better accomplish Congress’s objectively clear intent and help to build the stable, uniformly regulated environment necessary for effective and efficient rail transportation.  Until then, the issue remains one that is primed for preemption.

1 PCS Phosphate Co., Inc. v. Norfolk Southern Corp., 559 F.3d 212, 218 (4th Cir. 2009); Freight Rail Transporation: Long-Term Issues, Cong. Budget Office 3-4 (2006).
2 Elam v. Kansas City S. Ry. Co., 635 F.3d 796, 804 (2011).
3 49 U.S.C. § 10501(b).
4 Union Pacific R.R. Co. v. Chicago Transit Auth., 647 F.3d 675, 678 (7th Cir. 2011) (quoting 49 U.S.C. § 10102(9)).
5 City of Auburn v. United States, 154 F.3d 1025, 1030 (9th Cir. 1998).
6 Delaware v. Surface Transp. Bd., 859 F.3d 16, 18 (D.C. Cir. 2017) (citation and quotation marks omitted).
7 See PCS Phosphate Co., 559 F.3d at 220-21.  See also City of Ozark, Ark. v. Union Pac. R.R. Co., 843 F.3d 1167, 1171 (8th Cir. 2016); Chicago Transit Auth., 647 F.3d at 679; New Orleans & Gulf Coast Ry. Co. v. Barrois, 533 F.3d 321, 332 (5th Cir. 2008); CSX Transp., Inc.—Petition for Declaratory Order, STB Finance Docket No. 34662, 2005 WL 1024490, at *2–3 (May 3, 2005).
8 Chicago Transit Auth., 647 F.3d at 679.
9 Barrois, 533 F.3d at 332 (internal citations omitted).
10 Id.
11 PCS Phosphate Co., 559 F.3d at 220-21.
12 Id. (citation and quotation marks omitted).
13 Beres v. United States, 143 Fed. Cl. 27, 98 (2019) (citation and quotation marks omitted).
14 Wisc. Cent. Ltd. v. City of Marshfield, 160 F. Supp. 2d 1009, 1013 (W.D. Wis. 2000).
15 See Lincoln Lumber Co.—Petition for Declaratory Order, STB Finance Docket No. 34915, 2007 WL 2299735, at *2 (Aug. 10, 2007) (“[A]cquisition by eminent domain of a temporary easement over part of [a railroad company’s] right-of-way (for construction) and a permanent easement under that part of the [railroad company’s] right-of-way (for operation) would not implicate [ICCTA] preemption unless it would prevent or unreasonably interfere with railroad operations.”); see also City of Ozark, 843 F.3d at 1169 (using the “as applied” analysis to determine condemnation action against railroad company was preempted by ICCTA); Chicago Transit Auth., 647 F.3d at 680 (same); Franks Inv. Co. LLC v. Union Pac. RR. Co., 593 F.3d 404, 415 (5th Cir. 2010) (en banc) (using the “as applied” analysis to review condemnation action); City of Lincoln v. Surface Transp. Bd., 414 F.3d 858, 860 (8th Cir. 2005) (reviewing an STB administrative decision finding “as applied” preemption of a local actor’s condemnation under the same standard).
16 Elam, 635 F.3d at 804.
17 See Paul Ziobro, Railroads Prepare for Quick Turnaround, Wall St. J. (Apr. 23, 2020),

18 434 F. Supp. 2d 241, 248-49 (S.D.N.Y. 2006).
19 No. Civ.A. 05-202(RMU), 2005 WL 975745, at *3 (D.D.C. 2005).

20 Maumee & W. R.R. Corp.—Petition for Declaratory Order, STB Fin. Docket No. 34354, 2004 WL 395835, at *2 (March 3, 2004) (emphasis added).
21 See647 F.3d at 681-83.

22 414 F.3d at 860-61.
23 Id. at 861-62.

24 266 F.3d 1324, 1326-27 (11th Cir. 2001).
25 Id.

26 Id. at 1336.
27 Id. at 1336-37.

28 Chicago Transit Authority, 647 F.3d at 682.
29 Id. at 681.

30 Norfolk S. Ry. Co. & Ala. Great S. R.R.—Petition for Declaratory Order, STB Fin. Docket No. 35196, 2010 WL 691256, at *1 (Feb. 26, 2010).
31 Id.

32 Id. at *4
33 Id.

34 Id.
35 160 F. Supp. 2d 1009 (2000)

36 Id. at 1012.
37 Id. at 1013 (quoting Black’s Law Dictionary 1289 (7th ed. 1999)).

38 Id.
39 Id. at 1014.

40 Id.

Find an Attorney: