Knoxville landowners settle SoKno Trail takings case for nearly $350,000

Seven Knoxville landowners have reached a nearly $350,000 settlement in a federal takings lawsuit tied to the planned SoKno Trail corridor. The agreement resolves one of three related cases but leaves two others pending as the trail project moves forward.

Why it matters: - The settlement puts money behind a constitutional property-rights fight tied to Knoxville’s planned South Knoxville, or SoKno, Trail. - The case shows how rail-to-trail conversions can trigger compensation claims when adjoining landowners say federal action blocked their property from reverting under state law. - The lawsuit does not seek to stop the trail, so the dispute centers on compensation rather than the project itself.

What happened: - Stewart, Wald & Smith said it settled a federal lawsuit on behalf of seven Knoxville landowners whose properties adjoin the railroad corridor planned for the SoKno Trail. - The total settlement for the seven landowners is nearly $350,000. - The settlement was reached in October 2026. - The agreement resolves Alliance Place, LLC, et al. v. United States, Case No. 25-2088L. - Two related cases remain pending in the United States Court of Federal Claims: Roach, et al. v. United States, Case No. 25-576, and Willis, et al. v. United States, Case No. 26-1045L.

The details: - The cases stem from the planned conversion of about 3.8 miles of the Knoxville & Holston River Railroad corridor into a recreational trail. - The route connects the Chapman Highway area with Ijams Nature Center. - On March 28, 2025, the U.S. Surface Transportation Board issued a Notice of Interim Trail Use or Abandonment for the corridor. - That notice allowed the railroad and the City of Knoxville to begin interim trail use while preserving the corridor for possible future rail service. - The landowners’ claims rely on the Fifth Amendment requirement that private property taken for public use receive just compensation. - Under the federal railbanking process, a corridor can be preserved for possible future railroad service and used as a trail in the meantime. - Depending on the property rights involved, landowners may have a claim if the process prevents railroad easement land from reverting to their ownership. - The claims seek compensation from the United States and do not aim to block the trail. - The Alliance Place settlement resolves only the claims in that case and does not determine the outcome of the two remaining lawsuits. - Property rights and possible compensation depend on the facts of each parcel and claim.

Between the lines: - The litigation underscores a recurring tension in rails-to-trails conversions: public trail projects can move forward while property owners pursue takings claims in federal court. - Michael J. Smith, an attorney at Stewart, Wald & Smith, said communities pursuing recreational trails should remember that the Constitution protects private property rights. - Smith said the cases are not about stopping trails but about ensuring landowners receive Fifth Amendment compensation when property rights are affected. - The United States Court of Federal Claims has exclusive jurisdiction over these constitutional takings claims against the federal government.

What's next: - Stewart, Wald & Smith said it continues to investigate additional claims from property owners along the former Knoxville & Holston River Railroad corridor. - The firm said ownership and property rights vary by parcel, so each property requires individual legal analysis. - The firm believes more than 60 landowners could potentially be compensated along the 3.8-mile corridor. - Landowners interested in discussing their property can contact Stewart, Wald & Smith at (314) 720-0220 or visit the firm's website. - The two remaining federal cases will continue in the Court of Federal Claims.