The Honorable Terry I. Adelman, United States Magistrate

1

Judge for the United States District Court for the Eastern District

of Missouri. The parties consented to try their case before

Magistrate Adelman pursuant to 28 U.S.C. § 636(c).

___________

No. 95-3588 

___________

Grantwood Village, *

*

Appellant, *

* Appeal from the United States

v. * District Court for the

* Eastern District of Missouri.

Missouri Pacific Railroad *

Company; Gateway Trailnet, *

Inc.; Grant's Farm Manor, Inc.; *

Union Pacific Railroad Company, *

*

Appellees, *

____________________ *

*

Rails to Trails Conservancy, *

*

Amicus Curiae. *

___________

 Submitted: April 10, 1996

 Filed: September 9, 1996

___________

Before BOWMAN, BEAM, and MURPHY, Circuit Judges.

___________

BEAM, Circuit Judge.

This case involves a dispute over the conversion of a railroad rightof-way into a trail system under the National Trail Systems Act (Trails

Act). Grantwood Village (the Village) appeals the district court's order1

granting summary judgment to the defendants. For reversal, Grantwood makes

two broad arguments: 
 As of January 1996, the ICC was abolished as a separate

2

agency and its functions have been taken over by the Surface

Transportation Board (STB) in the Department of Transportation.

This administrative change, however, does not affect our analysis

in the present case because the applicable laws have also been

amended to apply to the STB. Therefore, for ease of reference we

continue to refer to the entity as the ICC throughout this opinion.

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(1) the district court did not have jurisdiction over this dispute

involving rights to real property under Missouri law; and (2) even if the

district court had jurisdiction, Gateway Trailnet, Inc. (Trailnet) does not

have a valid interest in the property. We affirm.

I. BACKGROUND

The origin of this dispute derives from a letter dated April 6, 1872,

in which President Ulysses S. Grant authorized his St. Louis agent, Charles

W. Ford, to grant Pacific Railroad Company (Pacific) a right-of-way over

his land outside of St. Louis, Missouri. Later in 1872, Pacific

constructed its Carondelet Branch across this property. There is no

recorded easement or other indicia of title from President Grant to

Pacific.

Missouri Pacific Railroad Company (MoPac), Pacific's successor in

interest to the right-of-way, provided railroad service to customers on the

Carondelet Branch until approximately 1987, at which time the line was used

for other types of railroad service. In June 1991, MoPac's parent company,

Union Pacific, decided to proceed with abandonment of the Carondelet

Branch. Thus, in early 1992, MoPac filed notice with the Interstate

Commerce Commission (ICC) pursuant to 49 C.F.R. § 1152.50, seeking

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exemption from other applicable federal laws governing the procedures for

abandonment of any part of a railroad line (set out in 49 U.S.C.A. §§ 10903

& 10904 (West Supp. 1996)). MoPac's request for abandonment and

discontinuance of operations over 6.2 miles of the Carondelet Branch

included the portion of the right-of-way now in
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question. On February 28, 1992, a Notice of Exemption was served and

published in the Federal Register. This Notice of Exemption was to become

effective on March 29, 1992.

Prior to publication of the notice, Trailnet asked the ICC to issue

a Notice of Interim Trail Use or Abandonment (NITU) pursuant to ICC

regulations (49 C.F.R. § 1152.29) adopted to implement the applicable

portion of the Trails Act. See 16 U.S.C.A. § 1247(d) (West Supp. 1996).

MoPac expressed its willingness to negotiate with Trailnet for interim

trail use by filing a letter with the ICC. 

On March 25, 1992, the ICC issued its Decision and NITU (Decision),

in which it reopened proceedings and stated that the Notice of Exemption

published in the Federal Register on February 28 was modified as necessary

to implement interim trail use under the Trails Act. The ICC further

stated in its Decision that interim trail use could be implemented if,

within 180 days from the date of service of the Decision, an agreement was

reached. The Decision also provided that if no agreement were reached by

that time, MoPac could abandon that line. Subsequently, the ICC granted

two extensions of the 180-day negotiation period at the request of the

parties. 

On December 30, 1992, one day before time was to expire under the

extensions, MoPac and Trailnet entered into a "Donation, Purchase and Sale

Agreement" (Agreement) under which MoPac agreed to sell its interest in the

property to Trailnet for interim trail use. MoPac contemporaneously

executed and delivered a quitclaim deed to Trailnet. The Agreement

expressly stated that it did not merge into the deed, thereby surviving the

closing and transfer of title. The Agreement also expressly stated that

its terms and the transfer were subject to the provisions of the Trails Act

and applicable ICC orders. Upon transfer of the property, MoPac
 The Village added Grant's Farm Manor, Inc.--the fee title3

holder to property south of the disputed railroad right-of-way--as

a named defendant in the event that entity could claim some

interest in the property at issue.

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removed its rails and ties. Trailnet made improvements and has maintained

the property for trail use. 

The right-of-way in question is located on real property adjacent to

lots in a Village subdivision. The Village has been using portions of this

property as a parkway and bird sanctuary. The Village originally filed a

single-count quiet title action in state court against MoPac and Trailnet.

MoPac answered by stating that it no longer had any interest in the

property because it had been transferred to Trailnet. In its first amended

petition, the Village sought a declaratory judgment regarding the rights

of the parties in the property at issue. Specifically, the Village

requested a declaration that it is the fee simple absolute owner of the

real property. The Village also sought ejectment of Trailnet, Grant's Farm

Manor, Inc., and another party subsequently dismissed from the case.

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Trailnet had the case removed to federal district court on the basis that

the first amended petition includes rights of Trailnet arising under the

laws of the United States--i.e., the Trails Act. The district court denied

the Village's motion to remand the case back to state court. 

Both Trailnet and the Village filed cross-motions for summary

judgment. The district court denied the Village's motion but granted

summary judgment to MoPac and Trailnet. The court concluded that under

Missouri law, Pacific had acquired an easement by estoppel, which had

passed to MoPac and eventually to Trailnet. The court rejected the

Village's contention that any right held by MoPac had been abandoned for

railroad purposes, holding that the ICC had retained jurisdiction over the

right-of-way by authorizing interim trail use and that federal law preempts

state law on the question of abandonment. Finally, the district court

concluded
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that it lacked jurisdiction to review an ICC order. The Village now

appeals to this court.

On appeal, the Village asserts that federal courts lack subject

matter jurisdiction to hear this dispute because it involves rights to real

property under Missouri law. Thus, according to the Village, this case

should be remanded to state court. The Village also argues that Trailnet

does not have an interest in the property under Missouri law.

II. DISCUSSION

We review a grant of summary judgment de novo and apply the same

standards as the district court. Allen v. Bridgestone/Firestone, Inc., 81

F.3d 793, 795 (8th Cir. 1996). Summary judgment is appropriate if the

pleadings and other evidence "show that there is no genuine issue as to any

material fact and that the moving party is entitled to a judgment as a

matter of law." Fed. R. Civ. P. 56(c). We give the nonmoving party the

benefit of every inference drawn from the evidence. Reich v. ConAgra,

Inc., 987 F.2d 1357, 1359 (8th Cir. 1993). 

We are first called upon to determine whether the district court

erred in determining that this case was properly removed from state court.

We conclude that it did not. Although the Village attempts to characterize

this lawsuit as a "quiet title" action, it is in essence a collateral

attack on the ICC's order authorizing interim trail use on the right-ofway. Trailnet received MoPac's interest pursuant to a quitclaim deed and

Agreement executed in compliance with the ICC's Decision and NITU. Thus,

a challenge to Trailnet's interest in the right-of-way necessarily includes

a review of the ICC's Decision. Moreover, the Village's attempt to prevent

the preservation of the railroad right-of-way necessarily entails a finding

that MoPac abandoned the right-of-way at some point in time. Because the

ICC has exclusive and plenary authority
 Complaints originally filed in state court opposing, either

4

directly or indirectly, the continued use of a railroad right-ofway under the Trails Act are routinely removed to federal court,

even though the district court goes on to hold that it lacks

jurisdiction to review an ICC order. See, e.g., Schneider v. Union

Pac. R.R., 864 F. Supp. 120 (D. Neb. 1994); Victor Oolitic Stone

Co. v. CSX Transp., Inc., 852 F. Supp. 721 (S.D. Ind. 1994).

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to determine whether a rail line has been abandoned, see, e.g., Chicago &

N.W. Transp. v. Kalo Brick & Tile, Co., 450 U.S. 311, 321 (1981), the

question of whether MoPac abandoned the right-of-way necessarily involves

federal law. See id.; see also 28 U.S.C. § 1331. Therefore, federal

jurisdiction is proper and the district court did not err in refusing to

remand this case to state court. See 28 U.S.C. § 1441(b). 

Although the district court had general subject matter jurisdiction

under 28 U.S.C. § 1331 and a remand to state court was not required, a

separate question arises as to whether the district court had jurisdiction

to review a lawsuit challenging, in effect, the validity of an ICC order.4

Pursuant to the Hobbs Act, circuit courts (other than the Federal Circuit)

have exclusive jurisdiction over any action to enjoin, suspend, or

determine the validity of an ICC order. 28 U.S.C. § 2342(5). No other

court would have jurisdiction to review an ICC decision such as the one in

this case. Glosemeyer v. Missouri-Kansas-Texas R.R., 879 F.2d 316, 320

(8th Cir. 1989), cert. denied, 494 U.S. 1003 (1990). Therefore, the

district court correctly concluded that it did not have jurisdiction to

review the ICC's Decision.

Although the Village could have challenged the ICC's Decision by

filing a petition directly in this court, they failed to do so. The

Village's attacks on the ICC's Decision are, therefore, foreclosed because

the Village failed to make these arguments to the ICC and failed to file

a petition for judicial review within sixty days of the ICC's decision of

March 25, 1992, as required by the Hobbs Act. 28 U.S.C. §§ 2341 et seq.;

see also 28 U.S.C.
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§ 2321. Therefore, the Village has waived any challenge to the validity

of the ICC's order. 

Even after reviewing the Village's contentions, we find them to be

without merit. The Village contends that neither MoPac nor Trailnet have

an interest in the right-of-way. Specifically, the Village asserts that

under Missouri law MoPac only had a nontransferable license and that it

abandoned this interest when it stopped using the right-of-way.

We turn first to the question of what interest Trailnet has in the

Carondelet right-of-way under Missouri law. The Village argues that the

right-of-way was only a license and as such it was not transferable to

Trailnet. We recognize that state law defines the nature of the property

interest. In this case, a railroad used the right-of-way for over onehundred years, undoubtedly incurring significant expenses in doing so.

President Grant's letter clearly gave MoPac's predecessor in interest a

right-of-way across his property. If the interest in the right-of-way had

been only a personal, nontransferable license, then it is curious how the

license passed from the original grantee (Pacific) to its successors in

interest. Therefore, we agree with the district court that Trailnet

received a valid real estate interest from MoPac under Missouri law. See

Allee v. Kirk, 602 S.W.2d 922, 924-25 (Mo. Ct. App. 1980) (citing Sanford

v. Kern, 122 S.W. 1051 (Mo. 1909)).

The Village next contends that MoPac abandoned any interest it had

in the right-of-way. We are again guided by the principle that the ICC's

determination of abandonment is plenary, pervasive, and exclusive of state

law. See Colorado v. United States, 271 U.S. 153, 164-65 (1926); Kalo

Brick & Tile, 450 U.S. at 323. Therefore, federal law preempts state law

on the question of abandonment while the ICC retains jurisdiction over the

right-of-way. Accordingly, we must next examine the applicable federal

law.
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In 1968, Congress enacted the Trails Act in order to establish a

national system of nature trails. See Glosemeyer, 879 F.2d at 318. By the

early 1970s, Congress had become concerned about the abandonment of

railroad rights-of-way. Id. (referring to the Railroad Revitalization and

Regulatory Reform Act of 1976, § 809, Pub. L. No. 94-210, Title VIII, 90

Stat. 144 (codified as amended at 49 U.S.C. § 10906)). One of the major

impediments to preserving these rights-of-way existed in state property

laws which prescribed that once rail service is discontinued after the

ICC's approval of abandonment, such easements would automatically expire

and the rights-of-way would revert to adjacent property owners. Id. In

response to this problem, Congress enacted the Trails Act Amendments of

1983. These amendments included a section that expressly dealt with the

question of abandonment. Specifically, this section provides:

Consistent with the purposes of that Act, and in furtherance of

the national policy to preserve established railroad rights-ofway for future reactivation of rail service, to protect rail

transportation corridors, and to encourage energy efficient

transportation use, in the case of interim use of any

established railroad rights-of-way pursuant to donation,

transfer, lease, sale, or otherwise in a manner consistent with

this chapter, if such interim use is subject to restoration or

reconstruction for railroad purposes, such interim use shall

not be treated, for purposes of any law or rule of law, as an

abandonment of the use of such rights-of-way for railroad

purposes. 

16 U.S.C.A. § 1247(d) (emphasis added). Congress determined that interim

trail use was to be treated like discontinuance rather than as an

abandonment. Preseault v. Interstate Commerce Comm'n, 494 U.S. 1, 8

(1990). Therefore, the ICC's authorization of interim trail use in its

Decision precludes a finding of abandonment of the right-of-way under state

law. See, e.g., Preseault v. Interstate
 Even if we examine Missouri law, we nevertheless conclude

5

that state law does not mandate a conclusion that the right-of-way

has been abandoned. See Kansas City Area Transp. Auth. v. 4550

Main Assocs., Inc., 742 S.W.2d 182, 191 (Mo. Ct. App. 1987), cert.

denied, 484 U.S. 1063 (1988). In the present case, the facts

indicate that the right-of-way was used for customer service until

about 1987, at which time it was used for other types of railroad

services until early 1992. This use of the right-of-way

contradicts a finding of abandonment, even under state law, prior

to 1992 at which time the Trails Act was in effect.

 A recent decision by the D.C. Circuit does not affect our

6

analysis. In Fritsch v. Interstate Commerce Comm'n, 59 F.3d 248

(D.C. Cir. 1995), cert. denied, 116 S. Ct. 1262 (1996), the court

held that a railroad could abandon its property interest after the

ICC issued a decision permitting abandonment but prior to the

expiration of a 180-day public use condition under 49 U.S.C.

§ 10906, thereby ending the ICC's jurisdiction over the property.

Unlike the Fritsch case, MoPac did not repeatedly express its clear

intent to abandon the right-of-way after the ICC issued its

Decision; rather, MoPac expressed willingness to negotiate with

Trailnet. Moreover, under the Trails Act, the right-of-way could

not have been abandoned during a period of interim use.

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Commerce Comm'n, 853 F.2d 145, 150 (2d Cir. 1988), aff'd, 494 U.S. 1

(1990).5

The Village next argues that MoPac's abandonment predates the Trails

Act's application. Even prior to enactment of the Trails Act, the ICC had

exclusive jurisdiction to deem a railroad right-of-way abandoned. See,

e.g., Colorado, 271 U.S. at 164-65; Kalo Brick & Tile, 450 U.S. at 319-20.

State law claims can only be brought after the ICC has authorized an

abandonment and after the railroad has consummated that abandonment

authorization. See, e.g., Hayfield N. R.R. v. Chicago & N.W. Transp. Co.,

467 U.S. 622, 635 (1984). Therefore, MoPac could only have abandoned its 6

right-of-way, even prior to the Trail Act's application, if the ICC made

such a determination, which it has not done in this case.

Lastly, the Village attacks the validity of the ICC's Decision on

several other grounds. The Village asserts that the Trails Act is

inapplicable in this case because the quitclaim deed did not
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expressly reserve a reversionary interest in MoPac. Moreover, according

to the Village, the ICC's Decision is void because the 180-day period

lapsed before an agreement was reached between MoPac and Trailnet. As

noted above, these arguments should have been presented to the ICC and in

a petition directly to us challenging the ICC's Decision. Therefore, the

Village has waived these arguments. Nevertheless, the plain language of

the Agreement demonstrates that both it and the quitclaim deed were drafted

in order to comply with the reversionary interest requirement in the Trails

Act. See 16 U.S.C. § 1247(d). The ICC, moreover, was free to extend this

time period for an agreement as it did in this case. Therefore, we find

these arguments meritless.

III. CONCLUSION

For the reasons discussed above we conclude that the district court

did not err in granting summary judgment to MoPac and Trailnet.

Accordingly, we affirm the district court's order and deny all pending

motions.

A true copy.

Attest:

CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.