Notwithstanding these strong legal defenses to liability, some
rail companies remain concerned about the time and expense
that may be involved in defending against even a non-mer-
itorious personal injury lawsuit. To address these concerns,
California has enacted a statute allowing an owner who permits
the public to use property pursuant to an agreement with a
public or nonprofit agency for purposes of recreational trail use,
and who ultimately prevails in a civil action brought by or on
behalf of a person injured or harmed on the property, to apply
for reimbursement for reasonable attorney’s fees from the Cali-
fornia Victim Compensation and Government Claims Board.
In addition, there are a variety of voluntary arrangements by
which railroads and other landowners can shift liability to other
parties. Insurance is the most common form, in which an in-
surance carrier is “subrogated” to the obligations and defenses
of the responsible party and defends against claims and also
pays out any amounts ultimately owed to the claimant.
Trail managers can also contractually assume legal responsibility
through an indemnification agreement. In an indemnification
agreement, a trail manager or other third party agrees to hold the
railroad harmless (i.e. compensate or make the railroad whole)
for any loss or damage that may be incurred in connection
with the trail use, including the railroad’s reasonable attorney’s
fees and costs. The trail manager may also be required to
assume responsibility for the railroad’s defense in any legal
action in which the railroad is named as a responsible party.
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 an-
other entity.
Other states have, by statute, specifically granted
agencies indemnification authority.
The extent to which gov-
ernment agencies possess the authority to enter into reasonable
indemnification agreements depends on the law in that state.
Finally, risk management strategies can help minimize the
possibility of injury to trail users and thereby reduce the trail
manager’s exposure to being sued in the first place. Risk
management techniques include:
Designing the trail for safety;
Using prominent signage to warn users of potentially
dangerous areas;
Regularly inspecting the trail and correcting any unsafe con-
ditions. (Keep records of inspections and remedial changes);
Prominently posting hours of operation and other rules
and regulations, along with emergency contact informa-
tion; and
Developing procedures for handling medical emergencies.
Legal Issues: Acquisition of Rails-with-Trails
Rails-with-trails, like all rail-trail acquisitions, involve some
unique legal issues due to the regulated status of freight rail­
road lines. Principles of “federal preemption” may bar govern­
mental entities from using their condemnation powers to
acquire, over the railroad’s objections, a portion of an active
rail line that is regulated by the Surface Transportation Board
if trail use could interfere with rail operations. Most rail-with-
trail projects are governed by voluntary agreements between
the rail operator and the trail manager.
A number of states have enacted legislation authorizing the
creation of state-owned railroad corporations or authorizing
state agencies to acquire railroad corridors for public trans-
portation use. Several of these statutes have enacted specific
policies permitting or directing that corporations or agencies
authorize use of portions of a rail corridor for trail use if the
use does not restrict or interfere with rail uses. For example,
Alaska law requires the state railroad corporation to “authorize
a walkway or a trail if the board first finds in writing that the
proposed walkway or trail will not create a safety hazard and
will not unreasonably interfere with continued or expanded
operations in the utility corridor,” provided that specified con-
ditions (including indemnification and defense of the railroad)
are met.