Union Pacific Railroad v. Chicago Transit Authority
2011 U.S. App. LEXIS 15290
| 7th Cir. | 2011Background
- Union Pacific owns a 2.8-mile Right of Way in Chicago, leased to the CTA for ~50 years.
- CTA seeks to condemn the Right of Way to obtain a perpetual easement; Union Pacific sues in federal court for preemption under ICCTA.
- Lease requires CTA to use land for passenger transportation, pay 40% maintenance, and permits termination if CTA breaches; Union Pacific retains control and maintenance.
- CTA pays rent; every ten years rent is reset by appraised fair market value; disputes over 2002–2012 period led to a neutral appraisal setting rent ~$90,000/month.
- CTA offered Union Pacific a one-time payment for a perpetual easement; Union Pacific declined; CTA proceeded with Illinois Commerce Commission condemnation.
- District court held condemnation categorically and as applied preempted; CTA appeals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| ICCTA preemption standard applicable | CTA seeks to condemn via regulation, preempted as applied. | Condemnation could be non-regulatory and thus permissible. | As applied preemption applies; condemnation a form of regulation under ICCTA. |
| Whether condemnation is categorically preempted or preempted as applied | Board framework supports either categorical or as applied preemption. | Condemnation affects property rights but may not be categorically preempted. | Court adopts as applied analysis; not categorically preempted in this case. |
| Whether the condemnation is coextensive with the lease and its effect on preemption | Perpetual easement mirrors lease terms; no change to railroad operations. | Even if coextensive, condemnation alters rights and is preempted as regulation. | Even if coextensive, condemnation preempts because it regulates use and interferes with railroad transportation. |
Key Cases Cited
- Island Park, LLC v. CSX Transp., 559 F.3d 96 (2d Cir. 2009) (broad preemption of rail-related state action)
- CSX Transp., Inc. v. Barrois, 533 F.3d 321 (5th Cir. 2008) (board framework for preemption; categorically vs. as applied)
- City of Lincoln v. Surface Transp. Bd., 414 F.3d 858 (8th Cir. 2005) (broad preemption authority; condemnation context)
- City of Auburn v. United States, 154 F.3d 1025 (9th Cir. 1998) (broad preemption intent)
- Barrois v. Wilheim, 533 F.3d 321 (5th Cir. 2008) (preemption framework; as applied vs categorical)
- Franks Inv. Co. LLC v. Union Pac. R.R. Co., 593 F.3d 404 (5th Cir. 2010) (illustrates as applied analysis in condemnations)
- Boomer v. AT&T Corp., 309 F.3d 404 (7th Cir. 2002) (supremacy and preemption principles)