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Wedemeyer v. CSX Transportation, Inc.

United States Court of Appeals, Seventh Circuit

March 10, 2017

Henry C. Wedemeyer and Martha L. Wedemeyer, Plaintiffs-Appellants,
CSX Transportation, Inc., Defendant-Appellee.

          Argued January 11, 2017

         Appeal from the United States District Court for the Southern District of Indiana, Terre Haute Division. No. 2:13-cv-00440-LJM-WGH - Larry J. McKinney, Judge.

          Before Flaum, Easterbrook, and Sykes, Circuit Judges.

          Flaum, Circuit Judge.

         In 1989, CSX Transportation successfully petitioned the Interstate Commerce Commission (the "ICC") to end CSX's obligation to provide common-carrier rail service on a portion of track in Putnam County, Indiana. The following year, CSX notified the ICC that it had abandoned that segment. Shortly thereafter, CSX leased a portion of its track, including the abandoned segment, for use by a grain-shipping company.

         The Wedemeyers own property adjoining the abandoned track segment. They sued CSX seeking removal of the tracks and possession of the real property underlying the rail line. CSX moved for summary judgment, and the district court granted its motion, finding that the Wedemeyers' claims were preempted under the Interstate Commerce Commission Termination Act ("ICCTA"), 49 U.S.C. § 10501(b). We affirm.

         I. Background

         CSX is one of the largest rail transportation companies in the United States and a "rail carrier"[1] under the ICCTA. CSX's rail network consists of approximately 21, 000 route miles spanning 23 states, including Indiana. Historically, CSX and its predecessors operated two primary rail lines through Putnam County, Indiana: (1) a north-south line running from Chicago, Illinois, to Cloverdale, Indiana; and (2) an east-west line between Indianapolis, Indiana, and Decatur, Illinois. These two lines intersected in Roachdale, Indiana. CSX acquired the portion of the east-west line at issue by a deed dated 1876 and an instrument of appropriation dated 1879 conveyed to CSX's predecessor railway company. CSX has continuously operated trains through Roachdale over the east-west line since at least 1966.

         In 1989, CSX filed a petition for an exemption with the ICC seeking to end CSX's obligation to provide common-carrier rail service on a 26.73-mile segment of mainline track on the east-west line (from Milepost 132.45 near Mitcheilville, just outside of Indianapolis, to Milepost 159.18 near Roachdale). The ICC granted CSX's petition, thereby giving CSX conditional authority to end its obligation to provide common-carrier rail service on that track segment, which would no longer be "mainline track." CSX then had several options with respect to this track, including continuing to utilize it as non-mainline track, e.g., as industry, spur, team, switching, or side track (collectively, "auxiliary track");[2] or physically removing the track.[3] In 1990, CSX notified the ICC that it had "abandoned" the segment.[4]

         Since at least 1990, CSX has provided rail service to a Roachdale grain-shipping facility located adjacent to CSX's track, to the east of the north-south line. Beginning in 1992, CSX leased a portion of the track to the grain shipper for use at its facility. The lease granted the grain shipper the right to use (1) the CSX mainline track west of Milepost 159.18, which connected to the north-south line at Milepost 159.80 (continuous mainline track), and (2) the abandoned track east of Milepost 159.18 (former mainline track). The leased track has been used for the storage and switching of empty inbound railcars and loaded outbound railcars. CSX also retained the right under the lease to switch railcars on the tracks as needed to conduct its own railroad operations, and to operate over the leased track with its own locomotives and rail equipment. Between 2001 and 2014, CSX transported more than 15, 000 carloads from the grain facility using the tracks.

         Henry ("Kit") Wedemeyer and Martha Wedemeyer own real property in Roachdale that adjoins approximately 2, 588 feet of the former mainline (now auxiliary) track east of Milepost 159.18. The Wedemeyers were aware of the rail line and its active use when they took up residence on the property in 2003, accepted the deed to the property in 2005, and constructed their residence adjacent to the rail line. Kit also grew up on the property and recalls trains using the rail line adjacent to the property as far back as the late 1960s. The rail line remained in place and operational during the Wedemeyers' entire period of residence and ownership.

         The Wedemeyers first complained to CSX about the railroad operations on the track adjacent to their property on or about August 2, 2013. In or around September 2013, when the Wedemeyers learned that CSX claimed to control the uses of the track in question, Kit spoke by telephone to Leah Weider, the CSX Transportation Property Services Group Manager, and directed CSX to vacate and cease any further entry onto the property.

         In November 2013, the Wedemeyers filed in Putnam Superior Court a "Complaint to Quiet Title and for Trespass and Ejectment and Permanent Injunction, " which sought "immediate and sole possession" of the real property underlying the rail line and demanded that CSX "remove its ties, rails, and ballast" from the rail line. The Wedemeyers' complaint alleged that CSX had abandoned the track at issue in December 2003, pursuant to a settlement agreement and declaratory judgment filed in an Indiana state-court class action-Clark v. CSX Transp., Inc., No. 29D03-9308-CP-404 (Hamilton Cry Super. Ct). The declaratory judgment, which was filed in 2004, stated in relevant part:

4. Where the title held by CSX to that portion of the Settlement Corridor has been determined pursuant to the Settlement Agreement to be less than fee title, the designation of "Easement" appears in the column titled "Interest Status" in Exhibit A. With respect to these portions of the Settlement Corridor, the Court declares that the Settlement Class Member's title to the portion of the Settlement Corridor adjacent to their property is superior to any claims of title by CSX, subject to any prior adjudication of title in a Court of law in which the Class ...

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