Preseault v. Interstate Commerce Commission/Concurrence O'Connor

by Sandra Day O'Connor

Justice O'CONNOR, with whom Justice SCALIA and Justice KENNEDY join, concurring.

Petitioners assert that the actions of the Interstate Commerce Commission (ICC or Commission) prevent them from enjoying property rights secured by Vermont law and thereby have effected a compensable taking. The Court of Appeals for the Second Circuit determined that, no matter what Vermont law might provide, the ICC's actions forestalled petitioners from possessing the asserted reversionary interest, and thus that no takings claim could arise. Today the Court affirms the Second Circuit's judgment on quite different grounds. I join the Court's opinion, but write separately to express my view that state law determines what property interest petitioners possess and that traditional takings doctrine will determine whether the Government must compensate petitioners for the burden imposed on any property interest they possess.

As the Court acknowledges, ante, at 8-9, 15-16, state law creates and defines the scope of the reversionary or other real property interests affected by the ICC's actions pursuant to § 208 of the National Trails System Act Amendments of 1983, 16 U.S.C. § 1247(d). In determining whether a taking has occurred, "we are mindful of the basic axiom that '[p]roperty interests . . . are not created by the Constitution. Rather, they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law.' " Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1001, 104 S.Ct. 2862, 2872, 81 L.Ed.2d 815 (1984), quoting Webb's Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 161, 101 S.Ct. 446, 451, 66 L.Ed.2d 358 (1980) (internal quotation omitted). Although original federal grants of railway easements may influence certain disputes over interests in land, see Great Northern R. Co. v. United States, 315 U.S. 262, 62 S.Ct. 529, 86 L.Ed. 836 (1942); Idaho v. Oregon Short Line R. Co., 617 F.Supp. 207 (Idaho 1985), no such federal role is present in this case. Rather, the parties sharply dispute what interest, according to Vermont law, the State of Vermont acquired from the Rutland Railway Corporation and, correspondingly, whether petitioners possess the property interest that they claim has been taken. See Brief for Petitioners 15, and n. 14; Brief for Respondents State of Vermont et al. 22-25; Reply Brief for Petitioners 2-4. Similar reference to state law has guided other courts seeking to determine whether a railway right of way lapsed upon the conversion to trail use. Compare State by Washington Wildlife Preservation, Inc. v. State, 329 N.W.2d 543, 545-548 (Minn.) (trail use within original interest, thus reversionary rights have not matured), cert. denied, 463 U.S. 1209, 103 S.Ct. 3540, 77 L.Ed.2d 1390 (1983), with Lawson v. State, 107 Wash.2d 444, 730 P.2d 1308 (1986) (change in use would give effect to reversionary interests); McKinley v. Waterloo R. Co., 368 N.W.2d 131, 133-136 (Iowa 1985) (lack of railway use triggered period leading to reversion); Schnabel v. County of DuPage, 101 Ill.App.3d 553, 57 Ill.Dec. 121, 428 N.E.2d 671 (1981) (easement lapsed). Determining what interest petitioners would have enjoyed under Vermont law, in the absence of the ICC's recent actions, will establish whether petitioners possess the predicate property interest that must underlie any takings claim. See Ruckelshaus v. Monsanto Co., supra, 467 U.S., at 1001-1004, 104 S.Ct., at 2871-2874. We do not attempt to resolve that issue.

It is also clear that the Interstate Commerce Act, and the ICC's actions pursuant to it, pre-empt the operation and effect of certain state laws that "conflict with or interfere with federal authority over the same activity." Chicago & North Western Transp. Co. v. Kalo Brick & Tile Co., 450 U.S. 311, 319, 101 S.Ct. 1124, 1131, 67 L.Ed.2d 258 (1981); see id., at 318-319, 101 S.Ct., at 1131. States may not impose obligations upon carriers at odds with those governed through the ICC's "exclusive" and "plenary authority to regulate . . . rail carriers' cessations of service on their lines." Id., at 323, 101 S.Ct., at 1133; see id., at 324-327, 101 S.Ct., at 1133-1135. A State may again exercise its regulatory powers once the ICC authorizes a carrier's abandonment of service, and, thus, unless the Commission attaches postabandonment conditions to the abandonment certificate, "brings [the Commission's] regulatory mission to an end." Hayfield Northern R. Co. v. Chicago & North Western Transp. Co., 467 U.S. 622, 633, 104 S.Ct. 2610, 2617, 81 L.Ed.2d 527 (1984). As the Vermont Supreme Court recognized, state courts cannot enforce or give effect to asserted reversionary interests when enforcement would interfere with the Commission's administration of the Interstate Commerce Act. See Trustees of Diocese of Vermont v. State, 145 Vt. 510, 496 A.2d 151 (1985). These results are simply routine and well-established consequences of the Supremacy Clause, U.S.C.onst., Art. VI, cl. 2.

The scope of the Commission's authority to regulate abandonments, thereby delimiting the ambit of federal power, is an issue quite distinct from whether the Commission's exercise of power over matters within its jurisdiction effected a taking of petitioners' property. Cf. Kaiser Aetna v. United States, 444 U.S. 164, 174, 100 S.Ct. 383, 390, 62 L.Ed.2d 332 (1979) ("[T]here is no question but that Congress could assure the public a free right of access. . . . Whether a statute or regulation that went so far amounted to a 'taking,' however, is an entirely separate question"). Although the Commission's actions may pre-empt the operation and effect of certain state laws, those actions do not displace state law as the traditional source of the real property interests. See Ruckelshaus v. Monsanto Co., supra, 467 U.S., at 1003-1004, 1012, 104 S.Ct., at 2873-2874, 2877 (state law creates property right in trade secrets for purposes of Fifth Amendment, and regulatory regime does not pre-empt state property law). The Commission's actions may delay property owners' enjoyment of their reversionary interests, but that delay burdens and defeats the property interest rather than suspends or defers the vesting of those property rights. See National Wildlife Federation v. ICC, 271 U.S.App.D.C. 1, 11-12, and n. 16, 850 F.2d 694, 704-705, and n. 16 (1988). Any other conclusion would convert the ICC's power to pre-empt conflicting state regulation of interstate commerce into the power to pre-empt the rights guaranteed by state property law, a result incompatible with the Fifth Amendment. See Ruckels- haus v. Monsanto Co., 467 U.S., at 1012, 104 S.Ct., at 2878 ("If Congress can 'pre-empt' state property law in the manner advocated by EPA, then the Taking Clause has lost all vitality. [A] sovereign, 'by ipse dixit, may not transform private property into public property without compensation. . . . This is the very kind of thing that the Taking Clause of the Fifth Amendment was meant to prevent' "), quoting Webb's Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S., at 164, 101 S.Ct., at 452.

The Court of Appeals for the Second Circuit adopted just this unjustified interpretation of the effect of the ICC's exercise of federal power. The court concluded that even if petitioners held the reversionary interest they claim, no taking occurred because "no reversionary interest can or would vest" until the ICC determines that abandonment is appropriate. See 853 F.2d 145, 151 (1988). This view conflates the scope of the ICC's power with the existence of a compensable taking and threatens to read the Just Compensation Clause out of the Constitution. The ICC may possess the power to postpone enjoyment of reversionary interests, but the Fifth Amendment and well-established doctrine indicate that in certain circumstances the Government must compensate owners of those property interests when it exercises that power. See First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, 482 U.S. 304, 314-315, 107 S.Ct. 2378, 2385-2386, 96 L.Ed.2d 250 (1987) (The Taking Clause "does not prohibit the taking of private property, but instead places a condition on the exercise of that power," and the Clause "is designed not to limit the governmental interference with property rights per se, but rather to secure compensation in the event of otherwise proper interference amounting to a taking"). Nothing in the Court's opinion disavows these principles. The Court's conclusion that § 8(d) authorizes rails-to-trails conversions that amount to takings, ante, at 13, and its conclusion that "under any view of takings law, only some rail-to-trail conversions will amount to takings," ante, at 16, are inconsistent with the Second Circuit's view. Indeed, if the Second Circuit's approach were adopted, discussion of the availability of the Tucker Act remedy would be unnecessary. Even the federal respondents acknowledge that the existence of a taking will rest upon the nature of the state-created property interest that petitioners would have enjoyed absent the federal action and upon the extent that the federal action burdened that interest. See Brief for Federal Respondents 23-24.

Well-established principles will govern analysis of whether the burden the ICC's actions impose upon state-defined real property interests amounts to a compensable taking. We recently concluded in Nollan v. California Coastal Comm'n, 483 U.S. 825, 831-832, 107 S.Ct. 3141, 3145, 97 L.Ed.2d 677 (1987), that a taking would occur if the Government appropriated a public easement. See also Kaiser Aetna, supra, 444 U.S., at 179-180, 100 S.Ct., at 393 ("[T]he 'right to exclude,' so universally held to be a fundamental element of the property right, falls within this category of interests that the Government cannot take without compensation") (footnote omitted). In such a case, a "permanent physical occupation" of the underlying property "has occurred . . . where individuals are given a permanent and continuous right to pass to and fro, so that the real property may continuously be traversed, even though no particular individual is permitted to station himself permanently upon the premises." Nollan, supra, 483 U.S., at 832, 107 S.Ct., at 3146; see also, Kaiser Aetna, supra, 444 U.S., at 180, 100 S.Ct., at 393 ("[E]ven if the Government physically invades only an easement in property, it must nonetheless pay just compensation"). The Government's appropriation of other, lesser servitudes may also impose a burden requiring payment of just compensation. See United States v. Causby, 328 U.S. 256, 66 S.Ct. 1062, 90 L.Ed. 1206 (1946); Portsmouth Harbor Land & Hotel Co. v. United States, 260 U.S. 327, 43 S.Ct. 135, 67 L.Ed. 287 (1922). And the Court recently concluded that the Government's burdening of property for a distinct period, short of a permanent taking, may nevertheless mandate compensation. See First English Evangelical Lutheran Church, supra, 482 U.S., at 318-319, 107 S.Ct., at 2387-2388. Of course, a party may gain the benefit of these principles only after establishing possession of a property interest that has been burdened. As today's decision indicates, petitioners and persons similarly situated will have ample opportunity to make that showing.

With this understanding, and for the reasons set forth in the Court's opinion, I agree that the judgment below should be affirmed.

Notes