The Preseaults owned land in Burlington, Vermont, burdened by a railroad corridor established in the late nineteenth century through condemnation and deeds that, under Vermont law, granted the railroad only a right-of-way for railroad purposes. By the 1970s–1980s, rail service over the corridor ceased, and the railroad sought to abandon the line. Ordinarily, abandonment of a railroad easement under Vermont law would trigger reversion of the corridor area to the servient estate owners (including the Preseaults), free of the easement. However, after Congress enacted the National Trails System Act Amendments of 1983, the Interstate Commerce Commission (ICC) invoked its authority to forestall abandonment and issue authorizations for "interim trail use" and "railbanking." Pursuant to ICC orders, a trail manager (working with state and local entities) converted the corridor into a public recreational trail, while preserving the corridor for possible future rail reactivation. The Preseaults challenged the program on constitutional grounds in federal district court, leading to the Supreme Court's decision in Preseault v. ICC, 494 U.S. 1 (1990), which held that the Trails Act was valid and that any taking should be remedied by a suit for just compensation under the Tucker Act in the Court of Federal Claims. The Preseaults then pursued compensation, alleging that federal authorization of trail use and railbanking prevented reversion and imposed a new easement beyond the scope of the original railroad right-of-way. The Court of Federal Claims denied relief, and a Federal Circuit panel largely affirmed. The Federal Circuit took the case en banc and reversed, holding that the government's action effected a compensable taking.
Whether the federal government's authorization of interim trail use and railbanking of a railroad right-of-way under the Trails Act—thereby preventing abandonment and reversion and permitting public recreational use—constitutes a compensable taking under the Fifth Amendment when, under Vermont law, the railroad possessed only an easement limited to railroad purposes.
For Trails Act claims, courts apply state law to identify the nature and scope of the railroad's property interest and the landowner's reversionary interests. If the railroad held only an easement limited to railroad purposes, then federal action that prevents abandonment and authorizes interim trail use/railbanking imposes a new burden (a trail easement) on the servient estate that exceeds the scope of the original easement. Such an imposition constitutes a per se physical taking requiring just compensation under the Fifth Amendment, actionable against the United States under the Tucker Act.
Yes. Because, under Vermont law, the railroad's interest in the corridor across the Preseaults' property was an easement limited to railroad purposes, the federal authorization of interim trail use and railbanking prevented the easement's extinguishment upon abandonment and imposed a new public recreational trail easement. That action effected a compensable taking of the Preseaults' property interests. The court reversed and remanded for a determination of just compensation.
The court began with state property law. Examining the historical condemnation and deed instruments and Vermont precedent, it concluded that the railroad held an easement, not a fee, and that the easement's scope was limited to railroad purposes. Under Vermont law, cessation of rail service and abandonment would have extinguished such an easement and returned unencumbered possession to the fee owners. The ICC's invocation of the Trails Act interrupted that process by preempting abandonment and authorizing interim trail use, thereby maintaining the corridor as a unified transportation corridor for potential reactivation while opening it to public recreational use. The government argued that recreational trail use is consistent with the corridor's transportation function and therefore within the easement's scope, and that federal preemption displaced any state-law reversionary interests. The court rejected both contentions. First, Vermont law did not recognize public recreation as incidental to railroad operations; trail use by the public is substantively different from operating a railroad. Second, federal preemption for regulatory purposes does not erase vested state-law property rights; rather, if federal action takes those rights, the Fifth Amendment requires compensation. The court characterized the government's action as a physical taking: the government-authorized imposition of a new, public-use servitude on the land. This is a categorical taking akin to the permanent physical occupation in Loretto because it authorizes continuous public access and occupation via the trail, not a mere regulatory burden subject to ad hoc balancing. The court emphasized that the Supreme Court in Preseault I had already directed property owners to seek compensation under the Tucker Act if the Trails Act inflicted a taking; thus, recognizing compensation here harmonized the federal program with the Constitution rather than undermining it. Finally, the court remanded to calculate just compensation, typically measured by the difference between the property's value encumbered by the new trail easement and its value had the railroad easement been allowed to terminate upon abandonment, plus appropriate interest.
Preseault II supplies the controlling framework for Rails-to-Trails takings claims: identify the property interest under state law; determine the scope of the railroad's easement; and assess whether federal authorization of trail use/railbanking prevents reversion and imposes a new burden outside that scope. When it does, the action is a per se physical taking and the United States owes just compensation under the Tucker Act. The case underscores the centrality of state property law to federal takings analysis, the distinction between regulatory and physical takings, and the compatibility of federal programs with the Fifth Amendment when compensation is paid. It has guided subsequent Federal Circuit and Court of Federal Claims decisions (e.g., Toews, Caldwell, Ladd) and remains essential for understanding how federal statutes interact with reversionary interests and easement scope.
Preseault v. United States translates the Supreme Court's abstract assurance of a Tucker Act remedy into a concrete takings analysis for Rails-to-Trails conversions. It requires courts to look first to state property law to define the railroad's interest and the landowner's reversionary rights, and then asks whether federal authorization of interim trail use and railbanking imposes a new burden outside that interest. When it does, the Fifth Amendment mandates just compensation, and the taking is treated as per se physical.