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7th Circuit rules for CSX in landowner suit

March 13, 2017

The 7th Circuit Court of Appeals has ruled against a Roachdale couple’s claims against CSX Transportation Company after finding that CSX has not lost its easement to a portion of its railroad track adjacent to the couple’s property.

After successfully petitioning the Interstate Commerce Commission to end its obligation to provide common-carrier rail service on a segment of mainline track running east to west through Putnam County, CSX Transportation notified the commission that it had “abandoned” a 27-mile segment of the east-west line. Then in 1992, CSX leased a portion of its track to a Roachdale grain shipper for use at its facility, giving it the right to use a portion of the abandoned track along with CSX, which retained the right to use the tracks as needed.

However, Henry and Martha Wedemeyer, who purchased real property in Roachdale adjacent to the CSX tracks in 2005, sued CSX in November 2013, seeking “immediate and sole possession” of the property underlying the rail line and demanding the CSX “remove its ties, rails, and ballast.” The Wedemeyers claimed that pursuant to a 2004 declaratory judgment, CSX had abandoned the tracks in 2003.

CSX sought summary judgment in the U.S. District Court for the Southern District of Indiana, claiming that the Interstate Commerce Commission Termination Act pre-empted the couple’s state-law claims and that their claims were further barred as a matter of law by an applicable statute of limitations.  Senior Judge Larry J. McKinney ruled in favor of CSX, granting the rail company summary judgment after holding that the Wedemeyers’ state-law claims were preempted under the ICCTA.

The 7th Circuit Court of Appeals affirmed that decision Monday, with Judge Joel Flaum writing that if the 2004 declaratory judgment act had memorialized CSX’s agreement to “release all claims to the right of way, and remove the track from use and abandon it,” as the Wedemeyers alleged, then their claims would not be preempted. However, the 2004 judgement “appears to do no more than decide the nature of CSX’s property interest in the land (i.e., fee title versus easement), and the superiority of property interests as between CSX and the class members,” Flaum said.

“The declaratory judgment and the parties’ briefs confirm that CSX had only an easement with respect to the tracks at issue,” Flaum wrote. “However, the judgment does not establish that CSX ever gave up their right to enter or use the land.”

Although the Wedemeyers claimed that CSX had lost its easement when it shifted the track’s use from mainline to auxiliary service, the 7th Circuit held that under the original 1876 deed conveying the rail line, the “broad language is not limited to mainline or common-carrier service, and the current use of the line by CSX … falls within the scope of the easement.”

Thus, because CSX has not lost its easement, the Wedemeyers’ state-law claims are not contractual and, thus, cannot avoid ICCTA preemption, Flaum wrote.

The case is Henry C. Wedemeyer and Martha L. Wedemeyer v. CSX Transportation, 15-3580.

 

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