September 30, 2016 Practice Points

No Abandonment of Rail Easement Without Federal Approval

“Do not pass Go. Do not collect $200. Go directly to the federal Surface Transportation Board.”

by Patrick Gallagher

“Do not pass Go. Do not collect $200. Go directly to the federal Surface Transportation Board.” That, in a nutshell, was the decision handed down by the Massachusetts Supreme Judicial Court last month in an action to quiet title to land encumbered by a seemingly abandoned railroad easement.

Absent a formal certificate of abandonment from the Surface Transportation Board (STB)—the regulator charged with overseeing railroads since the dissolution of the Interstate Commerce Commission (ICC)—the court held in Murray v. Department of Conservation and Recreation, 475 Mass. 99 (2016) that it was unable to determine the status of the disputed easement.

Specifically, the court held that Congress never intended for mere nonuse to constitute abandonment of a railroad easement. Instead, because the easement belonged to a rail line that was among those affected by the Regional Rail Reorganization Act of 1973 (RRRA), which effectuated the consolidation of eight bankrupt rail carriers spanning the northeast and midwest United States into Consolidated Rail Corporation (Conrail), the easement could only have been abandoned in one of two ways.

It could have either been abandoned in accordance with the terms of the RRRA, which created a specific procedure for discontinuance of service on rail lines that were not designated for transfer to the newly formed Conrail, or else a certificate of abandonment could have been issued by the ICC or STB. Because there was no evidence that either procedure for abandonment had been utilized, the court dismissed the case for lack of subject matter jurisdiction.

The easement at issue in Murray derives from an 1847 “Plan of Location of the Newton Railroad” filed with local authorities in Middlesex County, Mass., by Boston and Worcester Railroad, whose interest in the rail line was succeeded by Pennsylvania Central Transportation Co. (Penn Central). The portion of the rail line to which the easement belongs, known as the Lower Newton Falls Branch, was not among those lines that were designated for transfer to Conrail as part of the massive 1970s reorganization. The record before the Court indicated that the Lower Newton Falls Branch had not been used since 1972.

An application to abandon the Lower Newton Falls Branch in accordance with the RRRA was filed in 1975, and Penn Central (whose 1970 bankruptcy filing was, at the time, the largest in U.S. history) began removing the rails from the ground the following year. However, for reasons unknown, Penn Central’s application to abandon the Lower Newton Falls Branch was never finalized, and, in 1982, Penn Central deeded its remaining interest in the Lower Newton Falls Branch to the Commonwealth of Massachusetts. The Commonwealth, for its part, opposed the plaintiffs’ action to quiet title on the basis that it one day hoped to install a recreational trail along the easement by virtue of the 1982 deed.

An exhaustive search by the plaintiffs of the records of the U.S. Railway Administration (which, along with Conrail, was created by the 1973 act to supervise the rail reorganization), and similar efforts conducted by the U.S. Department of Transportation and by the STB failed to unearth any evidence that a certificate of abandonment had ever been issued by either the ICC or the STB for the Lower Newton Falls Branch.

The procedure for abandonment under the RRRA was only available for a limited amount of time after the RRRA took effect. However, as the court noted, the Murray plaintiffs are not without recourse: They are able to commence abandonment proceedings, known as an “adverse abandonment,” before the Surface Transportation Board pursuant to 49 U.S.C. § 10903(a) (2012).

Patrick Gallagher, Dain, Torpy, Le Ray, Wiest & Garner, P.C., Boston, MA

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