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Rails-with-Trails: Lessons Learned

SECTION IV: Legislation, Liability, and Insurance (cont.)

Property Control

The type of property control dictates both the ease of the project and the liability burden. There are three types of property arrangements: purchase, easement, and license. Sample agreements are contained in Appendix C.

Acquisition

To accommodate the concerns of rail operators with respect to the location of a trail in an active right-of-way, a public agency might look to own the active rail corridor itself. This internalizes the liability and coordination efforts. Governments under civil law are treated differently from private landowners due to their unique status as sovereign entities. In some jurisdictions, immunity available to governmental agencies depends on the particular function performed, ranging from highway design and maintenance to employment. Many States have recently enacted statutes that limit the amounts or kinds of damages recoverable against governments (Isham, 1995).

The Steel Bridge Riverwalk in Portland, OR, is on property owned by the Union Pacific Railroad (UPRR) via a license agreement. Opened in May 2001, the shared use path is cantilevered off the south side of the bridge. Previously, the bridge was kept in the raised position until a train came across (about 60 per day at less than 32 km/h (20 mi/h)). This was to prevent trespassing and to reduce the maintenance cost of raising the structure for each watercraft.

The license agreement specifies that the UPRR is to incur no additional liability risk as a result of the trail. Thus, the City of Portland indemnifies the railroad against any and all incidents, including derailments. The City also is required to carry $10 million private insurance at a cost of approximately $40,000 annually, pay the railroad for the additional maintenance costs it has as a result of the trail, pay for safety improvements as needed, and provide a detailed management plan. The Riverwalk sees more than a thousand daily users.

Two examples of public ownership include the City of Seattle, Washington, which acquired a right-of-way for use by its Waterfront Streetcar and an RWT located next to the track. Portland, Oregon's regional government, Metro, purchased property under the Oregon Pacific Railroad tracks from a local utility so it could have control of the proposed Springwater Corridor Extension RWT. See Section II: Case Studies, for more information regarding these projects.

However, most examples of public acquisition of rail lines involve development of transit facilities or of new facilities providing access to intermodal hubs, such as the 16 km (10 mi) Alameda freight corridor in Los Angeles. The Dallas Area Rapid Transit agency has acquired title to short lines for eventual development as extensions of the existing Dallas light rail system. In California, acquisition of former Class I lines by Caltrain in the Bay Area, the purchase by North County Transit District (NCTD) and the Orange County Transportation Authority (OCTA) of the old Santa Fe mainline into San Diego, and the acquisition of surplus Southern Pacific and Santa Fe lines in the Los Angeles area by the Los Angeles County Metropolitan Transportation Authority (LAMTA) are other examples. These acquisitions have translated into hundreds of millions of dollars for railroads, while retaining use of the lines for their continued private enterprise.

On lightly-used branch lines, a railroad may prefer simply to sell the entire right-of-way rather than encumber it with easements or sub-parcels. Where a railroad corridor traverses suburban or urban areas with high property values, a prime consideration from the railroad's perspective is whether a trail constitutes the highest and best use for an interim or permanent use.

Class I railroads, however, consider their property to be a very important tangible resource. They commonly reserve corridor property for future potential capacity expansion and, for the most part, remain firm in their intent to retain full ownership and control of their infrastructure. Any public agency considering studying the feasibility of an RWT first must start with the assumption that railroads are profit-making enterprises with a strong fiduciary responsibility to their shareholders. Since large railroads are publicly-held corporations, their shareholder base includes millions of Americans with investments in mutual funds and retirement programs. While on occasion they may "donate" items to the public, for the most part they do not expect to part with their assets for free.

Railroad corridors are being sold to public transit agencies around the world for tens of millions of dollars, with the railroad still maintaining the ability to provide freight service. While a public agency may believe that their trail does not impact existing rail service, Class I railroads see no incentive to giving an agency a free easement but do see the potential problems. While RWTs may provide benefits to a railroad, such benefits are unlikely to convince a railroad that it is beneficial to lose control of part of their right-of-way for public recreation. This is particularly true for heavily-used freight railroad routes, on which there are few existing RWTs today.

Public agencies considering RWTs should be prepared to identify financial incentives for a railroad to consider. This may be in the form of land transfers, tax breaks from donated land, cash payments, zoning bonuses on other railroad non-operating property, taking over maintenance of the right-of-way and structures, and measurably reducing the liability a railroad experiences. The agency should employ an experienced land appraiser and attorney. A public agency may submit an offer to a railroad and then negotiate a purchase price for an easement. Once settled, the easement becomes a permanent feature on the land title regardless if it is sold in the future.

Other key considerations for a railroad include future needs for additional tracks and sidings, which an RWT may preclude. On a lightly-used corridor that may be abandoned in the future, the benefits of a short-term sale may outweigh the costs of waiting for a long-term sale. Other questions may include: What is the likelihood of the entire corridor being railbanked and purchased for transit or a linear park? What is the likelihood of the corridor being developed, and could a local agency exert control on type of development? What is the likelihood of the corridor being sold to adjacent property owners? The real estate department will want to analyze these options to determine which is best from an economic standpoint for the railroad.

Easements and License Agreements

In most instances, fee-simple (i.e., full ownership) acquisition is not necessary for trail development, and, in many cases, is not really an option. Easements, which come in many forms, typically are acquired when the landowner is willing to forego use of the property and development rights for an extended period. The landowner retains title to the land while relinquishing most of the liability and the day-to-day management of the property. The trail manager gets a lower price than a fee-interest acquisition and sufficient control for trail purposes. The easement is attached to the property title, so the easement survives property transfer. Figure 4.4 provides a listing of the preferred contents of an easement agreement from both the railroad and trail manager perspective.

A license is usually a fixed-term agreement that provides limited rights to the licensee for use of the property. Typically, these are employed in situations when the property cannot be sold (e.g., a publicly owned, active electrical utility corridor) or the owner wants to retain use of and everyday control over the property. The trail management authority avoids a large outlay of cash, yet obtains permission to build and operate a trail. But it will have little control over the property, and may be subject to some stringent requirements that complicate trail development and operation.Figure 4.5 provides a listing of the preferred contents of a license agreement from both the railroad and trail manager perspective.

FIGURE 4.4 Preferred easement agreement contents

From the trail manager's perspective, a model easement agreement should:

From a railroad's perspective, a model easement agreement should:

  1. Guarantee exclusive use.
  2. Be granted in perpetuity.
  3. Include air rights if there is any possible need for a structure.
  4. Broadly define purpose of the easement and identify all conceivable activities, uses, invitees, and vehicular types allowed to avoid any need to renegotiate with fee interest owner in future.
  5. State that all structures and fixtures installed as part of trail are property of grantee.
  6. Limit grantor indemnification to trail-related activities only.
  1. Include a revocable clause, including removal, if the trail becomes a safety or liability problem.
  2. Indemnify the railroads against trail-related trespasser activities.
  3. Provide a specific definition of "negligence" in the indemnification exception section as it relates to the railroad's liability exposure, or potentially indemnify the railroad against all incidents including such events as derailments.
  4. Place responsibility for ensuring adequate railroad access to the tracks, at any time, for any reason, and place responsibility for needed trail repairs or improvements in the hands of the public agency.
  5. Reference a detailed trail management plan and feasibility study which includes design review, feasibility analysis, and maintenance and management procedures and responsibilities.
  6. Retain approval rights for any improvement or use on the easement.

FIGURE 4.5 Preferred license agreement contents

From the trail manager's perspective, a model easement agreement should:

From a railroad's perspective, a model easement agreement should:

  1. Provide an acceptable term length with an option to renew.
  2. Identify all conceivable activities, uses, invitees, and vehicular types.
  3. Allow for railroads to review and approve the plan within a time limit.
  4. Provide clarity on maintenance responsibilities.
  5. Narrow potential environmental liability for pre-existing conditions.
  6. Limit grantor indemnification to trail-related activities only.
  7. Specify limits on other uses of license property.
  1. Allow for temporary trail closures for railroad maintenance activities.
  2. Include a revocable clause, including removal, if the trail becomes a safety or liability problem.
  3. Indemnify the railroads against trail-related trespasser activities.
  4. Provide a specific definition of "negligence" in the indemnification exception section as it relates to the railroad's liability exposure, or potentially indemnify the railroad against all incidents including such events as derailments.
  5. Place responsibility for ensuring adequate railroad access to the tracks, at any time, for any reason, and place responsibility for needed trail repairs or improvements in the hands of the public agency.
  6. Reference a detailed trail management plan and feasibility study which includes a design review, feasibility analysis, and maintenance and management procedures and responsibilities.

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Design

Visible signage and good design are prudent liability protection strategies, as will be explained in Section V: Design. Trail users should be warned at the trailhead and at any other entrances to stay off the railroad tracks, particularly where there is no fencing or physical separation between the trail and the rail corridor. If the RWT is clearly designed to indicate that the railroad corridor is separate from the trail, trail users should be considered trespassers to which no special duty of care is owed.

A photo of 2 young children playing on train tracks.
Trespassing can lead to potentially deadly consequences. Lake State Railroad tracks. Gaylord, MI

Several court cases have held that the availability of a safer path or route, such as a surfaced walkway between two lines or railroad tracks was a factor in determining that a person injured walking near a railroad track was contributorily negligent, and absolved the railroad from responsibility.15 As the case studies in Section II summarize, a well-designed and maintained RWT can actually reduce trespassing by channelizing pedestrian crossings to safe locations or by providing separation or security. A well-designed and maintained RWT should have the effect of reducing both trespassing and the railroad's risk of being held responsible for injuries sustained by trespassers.

Risk Reduction: Trespassing

For this study, researchers counted trespassers on the tracks adjacent to the case study trails for two hour periods during the time of day/week the trail manager, railroad official, or law enforcement agent suggested they would be most likely to observe trespassing activity. During these specified times, researchers observed few trespassers on tracks near existing trails, and typically only on tracks not separated by fencing. This is, of course, an initial study. Extensive observations for longer periods of time and over various seasons of the year could yield more comprehensive results.

In corridors with planned RWTs but no formal trail facility, researchers observed more trespassing, with the most serious conditions along the proposed Coastal Rail-Trail in California near Del Mar and Encinitas. There, researchers observed 155 trespassers over the course of two hours. Most trespassers were crossing the track to access water (ocean or river) for surfing, fishing, and other recreational activity (see Figure 2.2 on page 10). The rest were walking alongside the tracks with very few actually on the tracks. Researchers observed that at least one-third of the activity occurred in areas planned to become the trail, while 44 percent seemed to be in areas that would not be accommodated by the planned trail (see Figure 2.3 on page 10).

The Canadian government sees the development of RWTs as a trespassing reduction strategy. "The proper design and effective use of space can lead to a reduction in the incidence of pedestrian conflicts with railway operations and improve overall safety and quality of life in the neighboring community."

CONSTABLE WILLIAM LAW, CANADIAN PACIFIC RAILWAY

Most U.S. railroad companies rely on local and State trespassing ordinances to bolster their enforcement attempts and on local police departments to enforce trespassing and vandalism laws. However, most police departments respond "as needed" rather than having regular patrols. Additional information on various enforcement practices is contained in Section VI.

Railroad and trail officials on several of the existing trails studied reported some relief from trespassing. Several others reported no change (some with recurring problems), although at least one reported what they felt to be an increase in trespassing. The key to trespassing relief appears to be good design, particularly separation and maintenance.

On the Lehigh River Gorge Trail, Pennsylvania, much of the trail is relatively close to the tracks (less than 4.6 m (15 ft) from the track centerline) and is not separated by fencing. Railroad officials report trespassing is indeed a frequent problem. In contrast, as a condition of the sale of the property, CSX required the Three Rivers Heritage Trail, Pennsylvania, to build a chain-link fence the entire length with no opening or fence breaks allowed. Trespassing relief is expected.

However, fencing alone does not always solve the problem. On an RWT section of the Outremont Spur in Montreal, Canada, Canadian Pacific Railway officials noted 23 locations where the fence had holes. They also observed numerous locations where gates were not locked or secured properly. These incidents serve as evidence of significant continued trespassing and determined vandalism.

Risk Reduction: Vandalism

Railroad officials report the most common types of vandalism incidents on RWTs are fence cutting, dumping, and graffiti. Continuing problems are associated with several trails, including the ATSF, California, and Burlington Waterfront Bikeway, Vermont. Others, such as the Platte River Trail, Colorado, and Schuylkill River Trail, Pennsylvania, are associated with decreased problems. There are few reports of increased problems. Some trail agencies have installed innovative features to solve both trespassing and vandalism problems simultaneously, such as the "living fence" - tall and thick vegetation separating the trail from tracks - on the Burlington Waterfront Trail.

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Review and Strengthen State Statutes

Nationwide At-grade
Crossings (2000):
Publicly owned 154,084
Privately owned 98,430

Trail managers should work to strengthen protections afforded by State statutes (see Appendix B). For example, RUSs should cover both recreational and transportation trail use. A number of States have enacted laws that require railroads to fence their rights-of-way under certain circumstances, and impose liability on the railroad for livestock that are injured on unfenced railroad corridors.16 In general, such laws are enacted for the benefit of adjacent landowners along the corridor and not for the benefit of the public at large (Barbee v. Southern Pacific Co., 99 P. 541 (Cal. App. 1908)). In the absence of a statute, a railroad company does not have a duty to build fences to prevent trespassers from coming onto its property,17 though fencing appears to offer significant trespassing relief. However, fencing is not a practical or cost-effective option for many railroads, particularly for lengthy corridors in rural areas. Thirty States have passed laws relating to trespassing on railroad property, and the Federal Railroad Administration has developed a model State trespassing law that imposes misdemeanor penalties for entering or remaining on a railroad right-of-way (see Table 4.1 on page 45).

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Crossings

The consolidation and closure of highway-rail at-grade crossings remains a key element in the U.S. DOT's action plan to improve grade crossing safety. As part of this continuing national effort to improve rail safety and reduce costs associated with highway rail crossings, many Class I railroads, as well as the FRA and many State departments of transportation, are working to close existing at-grade rail crossings (FRA, 1994) in order to reduce liability exposure and incidents. For example, from 1991 to 1999, they closed 33,599 public and private at-grade crossings, an 11.5 percent decrease.

Typical criteria for closure of public at-grade crossings are:

Typical criteria for closure of private at-grade crossings are:

An RWT feasibility study must include a detailed assessment of crossings and should seek to close existing at-grade crossings, if possible, or redesign the crossings to accommodate the RWT safely. It should be noted that closing existing at-grade crossings can have a detrimental impact on pedestrian access.

A railroad's liability may depend on whether the railroad has adequately maintained the crossing or complied with State statutes controlling the signals and warnings that are required (Kuhlman, 1986). The railroad may minimize its liability by requiring trail managers to indemnify the railroad for liability in the event of an injury to trail users, to the extent permitted by State law, and by requiring insurance coverage of this risk.

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Indemnification

A photo of a derailed train. The train wreckage extends an entire train car length from the tracks on both sides of the tracks.
Derailed train. Bourbonnais, IL

To the extent practicable and reasonable, trail management organizations should enter into indemnification agreements that absolve railroad companies of liability responsibility for injuries related to trail activities. Less than half the case study trail agreements require the government entity to indemnify the railroad against claims (see Figure 4.6). For RWTs like the Mission City Trail, California, and Schuylkill River Trail, Pennsylvania, the City or County assumes all liability.

The extent to which government agencies possess the authority to enter into reasonable indemnification agreements depends on the law in that State. Public agencies may be more limited in their ability to enter into indemnification agreements than private trail managers. For example, a governmental entity may be barred by its State constitution from imprudently assuming the liability of another entity.18 Other States have, by statute, specifically granted agencies indemnification authority.19

Pie chart. Requirement for indemnity, by percentage of RWTs. No - 54%, Yes - 26%, and No answer or Not Applicable - 20%.   Pie chart. Source of liability insurance, by percentage of RWTs. Government Agency - 95.2%, Private Insurance - 3.2%, and No Insurance - 1.6%.
Source: Rails-to-Trails Conservancy, 2000 Source: Rails-to-Trails Conservancy, 2000
FIGURE 4.6 Requirement for indemnity, by percentage of RWTs FIGURE 4.7 Source of liability insurance, by percentage of RWTs

In the event of a derailment, the issue would be whether or not the derailment was caused by the railroad's negligence; if so, the railroad likely would be held responsible for injury to any persons lawfully using a trail alongside the railroad right-of-way. However, the railroad's liability would be no different from its liability to persons injured on any other adjacent public highway, sidewalk, or crossing. The question from the railroad's perspective is whether the trail is bringing people into close contact with the rail line who would otherwise not be there. The railroad will seek to be indemnified for all potential incidents including derailments.

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Insurance

Railroads may be concerned that trail users might sue them regardless of whether the injuries were related to railroad operations or the proximity of the trail. These concerns are best addressed through insurance and, to the extent permissible under State law, through indemnification agreements with trail managers. Because of the many jurisdictions that have some involvement in an RWT--including the owner of the right-of-way, the operator of the railroad, and the trail manager(s)--one important function of a license agreement is to identify liability issues and responsible persons through indemnification and assumption of liability provisions. In most instances, the railroad will seek an agreement by which the trail manager agrees to purchase comprehensive liability insurance in an amount sufficient to cover foreseeable liability costs. The railroad also may ask the trail manager to assume liability, as well as responsibility for the legal defense, in the event of damage or injury sustained by virtue of the trail use of the property.20

The relevant government agencies' umbrella policies insure 95 percent of the existing RWTs against liability. Many government agencies are self-insured (see Figure 4.7). Insurance has been invoked very few times from injuries related to RWT activities (RTC, 2000). Railroad companies interviewed for this report declined to provide information about claims, citing privacy concerns.

In very few cases, a private or nonprofit organization such as the snowmobile club for the Railroad Trail, Michigan, carries a supplemental insurance policy for the trail. However, the Lake State Railroad company official expressed doubt that the additional $2 million policy would be sufficient in the case of a serious claim. For the planned Kennebec River Rail-Trail, the City of Augusta, Maine, will pay an additional $2,000 annually to add railroad indemnification to their insurance.

As mentioned earlier, the City of Portland, Oregon, carries a $10 million annual insurance policy on the Steel Bridge Riverwalk. Class I railroads often require $5 million to $10 million insurance policies for other activities permitted on their rights-of-way.

To the extent practical and reasonable, trail management organizations should purchase or provide liability insurance in an amount sufficient to cover foreseeable liability costs and pay the costs for railroad company insurance for defense of claims.

Updated: 02/11/2014
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