Illinois Central Railroad Co. v. Illinois
146 U.S. 387 (1892)

  • Illinois gave the ICR a land grant that included some Chicago waterfront (including submerged land in the harbor). IRC proceeded to build a wharf
    • There was some shady dealings going on that led to the grant.
  • A few years later, a less corrupt Illinois legislature came into power, realized what a bad deal it was, and voted to revoke the land grant. IRC objected.
    • IRC argued that they had a contract and a reliance interest in keeping the land grant.
  • The US Supreme Court found that Illinois had the right to revoke the land grant.
    • The US Supreme Court found that submerged waters are held in trust by the States.
      • See Martin v. Waddell's Lessee (41 U.S. (16 Pet.) 367 (1842)).
    • The Court found that the legislature cannot alienate (aka permanently sell) lands that they hold in trust.
    • The Court basically found that the State could temporarily lease some State land to a private entity, as long as that entity was using the land for 'the public good', but the State had ultimate responsibility to make the land was being used correctly. That responsibility meant that they had the authority to revoke the land grant at any time.
      • This is known as the Public Trust Doctrine.
    • The Court did note that Illinois was required to pay IRC for expenses incurred for the improvements they made to the land (e.g. the cost of the wharf).
  • The Public Trust Doctrine basically says that the State cannot completely abdicate control over lands that they are holding in the public trust.
    • "The trust devolving upon the State for the public, and which can only be discharged by the management and control of property in which the public has an interest, cannot be relinquished by a transfer of the property."
    • There are two justifications often given for the Public Trust Doctrine:
      • The State always has the right to take private property via Eminent Domain.
      • The State has the right to act in the public's interest pursuant to the States Police Powers.
    • Interestingly, the Public Trust Doctrine is only applicable to the States. To date it has not been used in cases involving land owned by the Federal government.