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Union Pacific Railroad Co. v. Chicago Transit Authority

February 23, 2009


The opinion of the court was delivered by: Robert M. Dow, Jr. United States District Judge

Judge Robert M. Dow, Jr.


Currently pending before the Court are Plaintiff Union Pacific' s ("UP") motion for partial summary judgment [91] and Defendant Chicago Transit Authority' s ("CTA") motion for judgment on the pleadings [89]. For the reasons set forth below, Plaintiff's motion is granted and Defendant' s motion is denied.*fn1

I. Procedural Background

UP filed its complaint [1] after CTA commenced state law condemnation proceedings pursuant to 735 ILCS 30/10-5-10. The Chicago Transit Authority' s ultimate aim in the condemnation proceedings is to effect a taking of property that CTA currently leases from UP under a perpetual lease. The proposed taking would effectively convert CTA's lease into an easement. UP contends that CTA'sproposed use of condemnation authority is preempted by federal law (specifically the Interstate Commerce Commission Termination Act (49 U.S.C. § 10101 et seq.) ("ICCTA" or "the Act")) and runs afoul of the Commerce Clause of the United States Constitution (Art. I., § 8, cl. 2). Union Pacific's complaint requests declaratory and injunctive relief.

After discovery closed, UP filed a motion for partial summary judgment [91] seeking a determination that CTA' s state law condemnation proceedings are preempted by federal law. On the same day, CTA filed a motion for judgment on the pleadings [89], requesting a determination that neither federal statutory law nor the Commerce Clause is a bar to CTA' s state law condemnation proceedings. The Court will construe CTA' s motion for judgment on the pleadings as a cross motion for summary judgment. See Church v. General Motors Corp., 74 F.3d 795, 798 (7th Cir. 1996) (construing a motion for judgment on the pleadings as a motion for summary judgment where evidence outside the pleadings was presented to the district court and "not rejected").*fn2

II. Facts

A. Local Standards on Summary Judgment

The Court takes the relevant facts from the parties'respective Local Rule ("L.R.") 56.1 statements.*fn3 The Court expresses no position as to whose version of disputed factual matters is correct. Local Rule 56.1 requires that statements of fact contain allegations of material fact, and that the factual allegations be supported by admissible record evidence. See L.R. 56.1; Malec v. Sanford, 191 F.R.D. 581, 583-85 (N.D. Ill. 2000). The Seventh Circuit teaches that a district court has broad discretion to require strict compliance with L.R. 56.1. See, e.g., Koszola v. Bd. of Educ. of the City of Chicago, 385 F.3d 1104, 1109 (7th Cir. 2004); Curran v. Kwon, 153 F.3d 481, 486 (7th Cir. 1998) (citing Midwest Imports, Ltd. v. Coval, 71 F.3d 1311, 1317 (7th Cir. 1995) (collecting cases)).

Where a party has offered a legal conclusion or a statement of fact without offering proper evidentiary support, the Court will not consider the statement. See, e.g., Malec, 191 F.R.D. at 583. Additionally, where a party improperly denies a statement of fact by failing to provide adequate or proper record support for the denial, the Court deems admitted that statement of fact. See L.R. 56.1(a), (b)(3)(B); see also Malec, 191 F.R.D. at 584. The requirements for a response under Local Rule 56.1 are "not satisfied by evasive denials that do not fairly meet the substance of the material facts asserted." Bordelon v. Chicago Sch. Reform Bd. of Trustees, 233 F.3d 524, 528 (7th Cir. 2000). In addition, the Court disregards additional statements of fact contained in a party' s response rather than in its statement of additional facts. See, e.g., Malec, 191 F.R.D. at 584 (citing Midwest Imports, 71 F.3d at 1317).

B. Pertinent Facts for Purposes of Cross-Motions for Summary Judgment

In 1959, CTA and UP' s predecessor entity entered into a lease ("the Lease") of the property at issue. Def. Resp. Pl. SOF ¶¶ 20, 24. The property at issue ("the Right of Way") is ninety to ninety-five feet wide in most places and runs east-west for approximately 2.8 miles, from Laramie Avenue (in Chicago) to beyond Harlem Avenue (in Oak Park, Illinois). Def. Resp. Pl. SOF ¶¶ 13, 14. Union Pacific operates three railroad tracks, and CTA operates two railroad tracks, along the Right of Way. Def. Resp. Pl. SOF ¶¶ 15, 21; Pl. Resp. Def. SOAF ¶ 2. Rail traffic along the Right of Way is "among the most intense" in UP' s interstate rail network.

Def. Resp. Pl. SOF ¶ 19.

The Lease, which has been amended a handful of times (Def. Resp. Pl. SOF ¶ 24), outlines the rights and obligations of the lessor (UP) and the lessee (CTA) and provides for the termination of the lease in certain circumstances. See Def. Resp. Pl. SOF ¶¶ 39, 41, 43. The Lease has several important features. Among those features are that the Lease restricts the type of traffic that CTA can run along the Right of Way, requires the CTA to obtain UP' s approval before making "additions, alterations or changes" to the Right of Way, and requires CTA to ensure that everything related to CTA' s operations on the Right of Way is in "good order, condition, and repair." Def. Resp. Pl. SOF ¶¶ 25-28. The Lease also describes the parties' respective burdens with respect to maintenance of jointly used facilities (certain retaining walls, bridges, support structures, and the like). Def. Resp. Pl. SOF ¶¶ 32-35. In addition, the lease can terminate if CTA defaults on its obligations under the lease or either party ceases its rail operations (Def. Resp. Pl. SOF ¶¶ 39, 41), at which point UP is entitled to re-take its property and eject CTA (Def. Resp. Pl. SOF ¶ 43). Otherwise, the Lease will not terminate. The possibility of future possession of the leased Right of Way has "substantial economic and strategic value" to UP. Pl. SOF ¶ 45.

In the end, a dispute over money appears to have paved the way for the instant legal action. The amount of rent that CTA pays under the Lease is recalculated every ten years based on the fair market value of the Right of Way. Def. Resp. Pl. SOF ¶ 46. In their most recent discussions, the parties varied widely on the proposed amount of rent. Compare Def. Resp. Pl. SOF ¶ 52 ($30.8 million), with Def. Resp. Pl. SOF ¶ 54 ($11.3 million). During that rent dispute, the parties engaged in discussions for a one-time payment by CTA that would have replaced the Lease with an easement. Def. Resp. Pl. SOF ¶ 59. The negotiations for an easement ended when CTA presented UP with both a carrot and a stick: CTA offered to pay UP $7,564,400 for a "perpetual easement" in the Right of Way, or else CTA would initiate condemnation proceedings. Pl. SOF ¶ 63. Union Pacific declined the offer (Def. Resp. Pl. SOF ¶ 64), and CTA resorted to the stick, initiating condemnation proceedings before the Illinois Commerce Commission (Pl. SOF ¶ 65).

The CTA's takings petition, as amended, describes the proposed easement that CTA seeks to take ("the Easement"). Based on the petition, the ...

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