The U.S. Court of Federal Claims ruled on October 23, 2026, that landowners in Henderson and Transylvania counties, North Carolina, do not have a valid property interest in a rail corridor that was converted into a public linear park. The decision affects several local residents and a volunteer fire department who claimed they were entitled to compensation under the Fifth Amendment for the alleged taking of their property. The court found that the landowners did not possess a cognizable property interest in the corridor, effectively denying their claims.

This case, titled M. L. Onna Barry et al. v. United States (Docket No. 25-453), centers around the conversion of a rail corridor into a public park under the National Trail Systems Act. The plaintiffs argued that they should be compensated for the loss of their property rights, while the government contended that the plaintiffs did not have a valid property interest to begin with. The court's ruling clarifies the legal standards regarding property rights in cases involving rail-to-trail conversions.

Background

The plaintiffs in this case are a group of landowners, including M. L. Onna Barry and Sherri Leigh Bethel, among others, who own land adjacent to the rail corridor in question. The dispute dates back to the late 19th century when the Hendersonville and Brevard Railway was chartered by the North Carolina General Assembly. The railway acquired land through a series of deeds to establish a rail line, which eventually went bankrupt.

In 2014, the rail assets were acquired by Watco Companies, LLC, which formed the Blue Ridge Southern Railroad. In 2020, Blue Ridge entered into an agreement to sell its rights to the rail corridor to Ecusta Rails2Trails LLC for the purpose of converting it into a public recreational trail. This conversion was facilitated by the Surface Transportation Board (STB) and led to the current takings action filed by the landowners in March 2025.

The Ruling

The court ruled that the plaintiffs did not have a valid property interest in the rail corridor. Judge Armando O. Bonilla stated, “The short answer is no,” referring to the plaintiffs' claims of ownership. The court determined that the original deeds from the 1890s granted the railway a fee simple title to the land, meaning the plaintiffs could not claim a reversionary interest that would allow for compensation under the Fifth Amendment.

The court analyzed the historical context of the deeds and concluded that the plaintiffs failed to prove that the original railway company only acquired a right-of-way easement. The ruling emphasized that the plaintiffs bore the burden of establishing their property interests and that the government successfully demonstrated that the original deeds conveyed full ownership of the land.

Impact

This ruling has significant implications for property rights in the context of rail-to-trail conversions. It sets a precedent that could affect similar cases where landowners claim compensation for property taken for public use. The court's decision reinforces the idea that historical property deeds must be thoroughly examined to determine the nature of ownership rights.

The ruling also clarifies the legal standards for establishing property interests in takings cases, particularly in the context of rail corridors. It underscores the importance of the original intent of property deeds and the necessity for landowners to provide clear evidence of their claims.

What's Next

The plaintiffs may consider appealing the decision, but details were not available in the court filing regarding any potential next steps. There are currently no related cases pending that address similar issues.