Preseault v. City of Burlington, Vt

• Decision Date: 15 June 2005
• Docket Number: No. 04-1154-CV.,04-1154-CV.
• Parties: J. Paul PRESEAULT and Patricia Preseault, Individually, and as partners of 985 Associates, Ltd., Plaintiffs-Appellants, v. CITY OF BURLINGTON, VERMONT and State of Vermont, Defendants-Appellees,
• Court: U.S. Court of Appeals — Second Circuit

412 F.3d 96

J. Paul PRESEAULT and Patricia Preseault, Individually, and as partners of 985 Associates, Ltd., Plaintiffs-Appellants, v. CITY OF BURLINGTON, VERMONT and State of Vermont, Defendants-Appellees,

No. 04-1154-CV.

United States Court of Appeals, Second Circuit.

Argued: January 31, 2005.

Decided: June 15, 2005.

Christina A. Jensen (Carl H. Lisman, on the brief), Lisman, Webster, Kirkpatrick & Leckerling, Burlington, VT, for Plaintiffs-Appellants.

William F. Ellis, McNeil, Leddy & Sheahan, Burlington, VT, for Defendants-Appellees.

Before: POOLER, B.D. PARKER, Circuit Judges, CASTEL, District Judge.^*

CASTEL, District Judge.

Plaintiffs-appellants J. Paul and Patricia Preseault are the owners of a fee simple interest in adjoining parcels of land located in Burlington, Vermont. In July 2002, the defendant-appellee City of Burlington (the "City") installed a fiber-optic cable over a portion of the Preseaults' property. The Preseaults commenced this action in the United States District Court for the District of Vermont, contending that the City installed the fiber-optic cable line without just compensation, thereby violating the Takings Clause of the Fifth Amendment to the United States Constitution. Plaintiffs assert a claim under 42 U.S.C. § 1983, and seek monetary and injunctive relief. The district court (J. Garvan Murtha, Judge) granted the defendants' motion for summary judgment and dismissed the case.

The district court largely based its ruling on Vermont statutes that govern the placement and maintenance of electric and telecommunications lines within railroad easements. Vt. Stat. Ann. tit. 30 §§ 2513, 2514, and 2515. It construed the statutory right to maintain a line in terms more commonly used for an easement at common law. However, neither the statutes' plain language nor controlling Vermont precedent speaks to whether a statutory right to maintain existing lines has the attributes of a common law easement, an issue that bears directly upon whether the installation of the fiber-optic cable constitutes an uncompensated taking. Because Vermont's law is unsettled and resolution of this question may implicate significant public policy considerations for Vermont, we certify this question to the Supreme Court of Vermont.

I. Historical Background

This lawsuit arises over the use of utility poles that were erected within a once-operative, now-abandoned railroad easement. In 1899, the Rutland-Canadian Railroad Company ("Rutland") acquired rights-of-way in land parcels that comprise portions of the current Preseault estate. Preseault v. United States, 100 F.3d 1525, 1531 (Fed.Cir.1996) (en banc). Rutland laid tracks that operated as a functioning railway line until 1970, when the tracks ceased use for active transport. Id. at 1547.

In 1964, a point in time when the railway was operational, Rutland transferred to the State of Vermont all right, title and interest in the railroad easement. This conveyance included an assignment of interest in lease agreements, including some with New England Telephone & Telegraph Co. The railroad's tracks were stripped from the ground in 1975, and the railroad's easement over the parcels was abandoned. Id. at 1549.

According to the City's chief administrative officer, the City has maintained utility lines and poles within "the vicinity of plaintiff's property" since at least the 1950s. In 1985, after use of the railway had been abandoned, the State of Vermont entered into a lease agreement with the City of Burlington Light Department that purported to give the City certain rights to the railroad easement, including the right and obligation "to promptly maintain, relocate, repair and renew" electric power lines.

In 2002, the City commenced a telecommunications project that involved installing approximately 16.5 miles of fiber-optic cable for the transmission of video, voice, and data services, including cable television service. The project connected City-owned buildings and facilities. As part of this project, in July 2002 the City installed a fiber-optic cable along the utility poles on the Preseaults' property. The cable is located several feet below the crossbars that hold the preexisting lines. The City's chief administrative officer asserts that prior to installing the fiber-optic cable, the City obtained licenses from its electric department and/or Verizon Vermont to attach fiber-optic cable to their poles. Pursuant to Rule 3.707 of the Vermont Public Service Board, any utility that owns a pole must grant "all Attaching Entities" access to any pole or right-of-way in which the utility has an ownership interest.

II. Prior Litigation

The present lawsuit follows more than 20 years of litigation over the Preseaults' ownership and right to exclusive possession of land that once had been subject to the railroad easement. That litigation arose over a public recreational path that was laid down in a portion of the abandoned railroad easement. A brief overview of the Preseaults' previous suits aids in understanding the current dispute over the City's installation of the fiber-optic cable, although the utility poles to which the fiber-optic cable is attached lie outside the boundaries of the recreational path easement for which the Preseaults were compensated in this prior litigation.

In 1981, the Preseaults brought a quiet-title action in the Superior Court of Chittenden County, Vermont, alleging that the railroad easement had been abandoned and no longer encumbered their estate as a matter of state property law. See Trustees of the Diocese of Vermont v. Vermont, 145 Vt. 510, 496 A.2d 151, 152 (1985). The Superior Court dismissed the action for lack of subject matter jurisdiction, holding that the Interstate Commerce Commission ("ICC") retained exclusive jurisdiction because it had not authorized abandonment of the railroad route. Id. The Vermont Supreme Court affirmed the dismissal. Id. It held that the lower court correctly concluded that the ICC was vested with plenary oversight of rail carrier operations. Id. at 154.

The Preseaults then sought a certificate of abandonment from the ICC, and the State of Vermont intervened, asserting title to the right-of-way in fee simple. State of Vermont and Vermont Railway, Inc. — Discontinuance of Service Exemption — in Chittenden County, VT, 1987 WL 97267, 3 I.C.C.2d 903 (1987). The ICC found that the discontinued railroad line was owned by the State of Vermont, which leased its interest to the City for use as a recreational trail. Id. at 903-04. It held that pursuant to the Rails to Trails Act, 16 U.S.C. 1247(d), unused railroad rights-of-way may be converted into recreational trails, regardless of any reversionary property interests that exist under state law. Id. at 906-08.

The Preseaults petitioned this Court for review of the ICC's order, arguing that the Rails to Trails Act exceeded Congress's Commerce Clause power and constituted an unconstitutional taking of private property without just compensation. This Court upheld the constitutionality of the Rails to Trails Act in Preseault v. Interstate Commerce Commission, 853 F.2d 145 (2d Cir.1988). The Supreme Court subsequently upheld the Act as a valid exercise of Congress's Commerce Clause powers, and ruled that before the Preseaults could pursue a Takings Clause claim, they must seek compensation through the procedures required by the Tucker Act, 28 U.S.C. § 1491(a)(1). Preseault v. Interstate Commerce Commission, 494 U.S. 1, 11-19, 110 S.Ct. 914, 108 L.Ed.2d 1 (1990).

The Preseaults thereafter filed a Tucker Act claim in the United States Court of Federal Claims. In Preseault v. United States, 27 Fed.Cl. 69 (1992), the Court of Claims concluded that the Preseaults were not entitled to compensation, and granted the government's motion for summary judgment dismissing the action. A three-judge panel of the United States Court of Appeals for the Federal Circuit affirmed the Court of Claims. Preseault v. United States, 66 F.3d 1167 (Fed.Cir.1995). The Federal Circuit reheard the matter and reversed en banc. Preseault v. United States, 100 F.3d 1525 (Fed.Cir.1996) (en banc). With acknowledged reluctance, it examined questions of Vermont property law. Id. at 1534. The Federal Circuit concluded that pursuant to state statutory authority, the railroad's property interest was an easement, not a fee. Id. at 1535. "Thus it is that a railroad that proceeds to acquire a right-of-way for its road acquires only that estate, typically an easement, necessary for its limited purposes." Id. at 1537. The City and Vermont argued that pursuant to a doctrine of "shifting public use," the original railroad easement should include other public purposes, such as the establishment of a recreational trail. Id. at 1541. The Federal Circuit observed that Vermont law had not adopted a theory of shifting public use. Id. at 1541, 1544. "The easements involved here are express easements, meaning that the scope of the easements are set out in express terms, either in the granting documents or as a matter of incorporation and legal construction of the terms of the relevant documents." Id. at 1542. The Federal Circuit concluded that an easement originally granted for the purpose of establishing a railroad did not reasonably contemplate an easement for a recreational bike path. Id. at 1542-43. It held that the possession of the Preseaults' land "for use as a public trail was in effect a taking of a new easement for that new use, for which the landowners are entitled to compensation." Id. at 1550. "When state-defined property rights are destroyed by the Federal Government's preemptive power in circumstances such as those here before us, the owner of those rights is due just compensation." Id. at 1552. The Federal Circuit remanded the action to the Court of Federal Claims to determine the amount of compensation to be awarded to the Preseaults. Id. The Court of Federal Claims then conducted a...