In the case of J. Paul Preseault, et ux. v. Interstate Commerce Commission et al., 1989, the U.S Supreme Court addressed a dispute over land ownership and use rights related to an abandoned railroad right-of-way in Vermont that was converted into a public trail under the National Trails System Act Amendments of 1983 (Trails Act). The plaintiffs, Mr. and Mrs. Preseault who owned property adjacent to this rail-trail conversion, argued that this constituted a taking of their reversionary interest in the land without just compensation violating Fifth Amendment's Takings Clause. The court ruled against them stating that Congress had acted within its power under the Commerce Clause when it enacted legislation allowing for such conversions as part of national transportation policy and did not constitute a regulatory taking because it merely prevented abandonment rather than appropriating new interests in land for public use. However, while rejecting their claim on statutory grounds, Justice O'Connor noted there might be valid constitutional takings claims available to them if they could prove they held state-law property rights affected by federal action which would require further litigation at lower courts.

In the dissenting opinion for J. Paul Preseault, et ux. v. Interstate Commerce Commission et al., Justice O'Connor argued that the majority's decision failed to adequately protect private property rights as outlined in the Fifth Amendment of the Constitution. She contended that by allowing a railroad company to convert its easement into a public recreational trail without compensating landowners, it constituted an unconstitutional taking of private property without just compensation. Furthermore, she disagreed with the majority's interpretation of federal law and believed it did not grant such broad powers to railroads or override state laws protecting property rights.