Federal Court Rules Adverse Possession Claims Against Railroads Preempted by ICCTA

KANSAS CITY, Kan. (LN) — U.S. District Judge Toby Crouse granted Union Pacific Railroad Company’s motion to dismiss Cultured Natural Thin Veneer Stone, LLC’s quiet title action, ruling the adverse possession claim is completely preempted by the Interstate Commerce Commission Termination Act, but gave the plaintiff leave to amend its complaint by June 1.

Cultured Natural Thin Veneer Stone, LLC, filed the suit in Kansas state court seeking to quiet title to a plot of land across the street from its Wyandotte County property. The land was deeded to defendant Chicago, St. Paul and Kansas City Railway Company in 1888 and ultimately transferred to Union Pacific Railroad Company, the only entity with a recorded property interest.

Union Pacific removed the case to federal court, arguing the claim was completely preempted by federal law and that Cultured failed to state a claim under the Interstate Commerce Commission Termination Act.

Crouse agreed the claim was preempted, noting that both parties conceded the adverse possession action sought to regulate rail transportation by taking property Union Pacific could use for rail purposes, such as lengthening a rail spur.

The judge cited the Fourth Circuit’s decision in Skidmore v. Norfolk Southern Railway Company, which found a similar adverse possession claim preempted because it would exclude a railroad from its land and interfere with transportation.

The Surface Transportation Board has also concluded that adverse possession claims like Cultured’s are completely preempted, Crouse noted, citing a 2012 petition for declaratory order.

While the state law claim was preempted, Crouse found it unclear whether Cultured had stated a cognizable claim under federal law. Union Pacific argued Cultured failed to allege damages resulting from a rail carrier’s violation of the ICCTA, as required under Section 11704.

Cultured did not engage with the elements of Section 11704, instead arguing Union Pacific’s use of the plot was a fact question and that the railroad would not use the property. Crouse dismissed the argument, noting that even if the property was not being used, a taking would still prevent Union Pacific from using it for railroad transportation.

The judge granted the motion to dismiss without prejudice, allowing Cultured time to clarify whether its claim is cognizable under the ICCTA.