Norfolk Southern Railway Company v. Intermodal Properties, LLC

Plaintiff Norfolk Southern Railway Company owned and operated Croxton Yard, a large intermodal freight facility. Business was expected to grow; the railroad’s future plans included the Crescent Corridor project, which would expand rail service from ports in New York and New Jersey across the United States and into Mexico. In 2004, Norfolk Southern decided to expand the yard by acquiring three adjacent properties, including one owned by defendant Intermodal Properties, LLC. Intermodal rejected Norfolk Southern’s offers, and the railroad initiated condemnation proceedings through a petition filed with the New Jersey Department of Transportation, which referred the contested case to an Administrative Law Judge (ALJ). Intermodal proposed to use the property as a parking facility for the Secaucus Junction passenger rail station, a use it contended was more compatible with the public interest. The ALJ precluded Intermodal from invoking the prior public use doctrine because the property was not being used for a public purpose and was not zoned to permit a parking facility. Intermodal succeeded in having the property rezoned, but the ALJ deemed this irrelevant since Intermodal presented no evidence that any entity was willing to enter into a contract for public parking. The ALJ also disagreed with Intermodal’s contention that the statutory provision permitting a taking only “as exigencies of business may demand” required the railroad to demonstrate an urgent need. The issue on appeal before the Supreme Court centered on two statutory provisions relating to the eminent domain power vested in public utilities and railroads. The Court found that Norfolk Southerns proposed use met the requirement of N.J.S.A. 48:3-17.7 that the taking be “not incompatible with the public interest.” Intermodal could not invoke the prior public use doctrine because it lacked the power to condemn and its proposed use was neither prior nor public. As used in N.J.S.A. 48:12-35.1, “exigencies of business” did not necessitate an urgent need for land in order to justify a taking, instead it limits a railroad’s power to condemn to those circumstances where the general needs or ordinary course of business require it.

Norfolk Southern Railway Company v. Intermodal Properties, LLC