Not legally. It may be practically, though.
The Southern Pacific Railroad has lines both in the Mojave Desert and Bakersfield. They decided to connect them with a VERY expensive railroad through the Tehachapi Pass.
The Santa Fe Railroad also has lines in Mojave and Bakersfield. They sent out laborers to make a show of building their own line.
A threat to start a competing business is not extortion.
Federal law prohibts extortion generally as part of the Hobbs Act (18 USC 1951):
The term “extortion” means the obtaining of property from another, with his consent, induced by wrongful use of actual or threatened force, violence, or fear, or under color of official right.
In the case you've ...