State condemnation establishing a perpetual easement over a railroad’s right of way is a regulation of railroad transportation preempted by the Interstate Commerce Commission Termination Act.
“Contrary to the CTA’s claim, the easement is not coextensive with the lease. But even if it were coextensive, the condemnation is still preempted because it prevents and unreasonably interferes with railroad transportation on the Right of Way. The mere fact that the Right of Way is already used in an identical way pursuant to a lease agreement is irrelevant; the Act preempts state or local regulations, not contracts or other agreements, that have a significant impact on railroad transportation. The CTA can always ask Union Pacific to enter into a new lease arrangement for the Right of Way with financial terms more acceptable to the CTA, but an attempt to obtain such an arrangement by regulation is preempted by federal law.”
09-2147 Union Pacific Railroad Co. v. Chicago Transit Authority
Appeal from the United States District Court for the Northern District of Illinois, Dow, J., Manion, J.