State v. Central Vermont Ry., Inc.

• Decision Date: 22 December 1989
• Docket Number: No. 87-607,87-607
• Parties: STATE of Vermont and City of Burlington v. CENTRAL VERMONT RAILWAY, INC.
• Court: Vermont Supreme Court

Page 1128

571 A.2d 1128

153 Vt. 337

STATE of Vermont and City of Burlington v. CENTRAL VERMONT RAILWAY, INC.

No. 87-607.

Supreme Court of Vermont.

Dec. 22, 1989.

Jeffrey L. Amestoy, Atty. Gen., and J. Wallace Malley, Jr., Asst. Atty. Gen., Montpelier, for plaintiff-cross-appellant State of Vt.

John L. Franco, Jr., Asst. City Atty., Burlington, for plaintiff-cross-appellant City of Burlington.

Fred I. Parker, Liam L. Murphy and Neal D. Ferenc, Law Clerk (on the brief), of Langrock Sperry Parker & Wool, Burlington, for defendant-appellant.

Stephen Dycus and Richard O. Brooks, Professors, and Peter Anthony and Barbara Grabowski, Law Students, South Royalton, for amicus curiae Environmental Law Center.

Before ALLEN, C.J., PECK, J., BARNEY, C.J. (Ret.), SPRINGER, District Judge (Ret.) and COSTELLO, District Judge (Ret.), Specially Assigned.

PECK, Justice.

At issue in this case is title to a 1.1 mile strip of filled lands lying along the City of Burlington's waterfront. In response to recent efforts by Central Vermont Railway (CVR) to sell this property to a real estate developer, the City and the State challenged CVR's title in the Chittenden Superior Court, invoking the public trust doctrine. The court concluded that CVR has fee simple title to the parcel at issue but held that the land must always be used for a public purpose. CVR appeals, and the State and the City cross-appeal. We modify the trial court's order and, as modified, affirm.

In 1827, legislation was enacted that granted littoral owners on Lake Champlain the right to erect wharves by adding fill to submerged lands along the lakeshore. ¹ 1827, No. 38. The 1827 Act provided that persons complying with the statute would have, with their heirs and assigns, the exclusive privilege of the use, benefit, and control of the wharves forever. The purpose of this legislation was to increase commerce and trade without an expenditure of public funds.

In 1849, the Vermont Central Railroad, a predecessor of CVR, used condemnation proceedings to obtain a strip of land along the lakeshore and began filling a substantial area lakeward from this strip. By 1851, this area had been used to bring a railroad line to the waterfront. Filling operations, first by Vermont Central and later by CVR, continued until 1972. CVR also purchased contiguous lands that had been filled by others. The railroad has paid property taxes on certain portions of the lands and has sold other portions to the City and the federal government.

By the late 1970s, CVR's use of the area at issue had declined significantly. At the time of trial, the railroad had only one active customer on the waterfront.

CVR has pursued three major plans over the last decade for selling and/or developing its land along the lake, which now consists of the previously mentioned 1.1 mile strip centrally located on the City's waterfront. The first two of these plans failed to materialize, but, on December 10, 1986, the railroad entered into a purchase and sale agreement in which it agreed to sell or lease a large portion of the filled lands to a real estate developer.

The City and the State petitioned the Chittenden Superior Court for a declaratory judgment, challenging CVR's title on public trust grounds. After trial, the superior court concluded that CVR "holds the filled lands ... in fee simple impressed with the public trust doctrine. This means that the railroad is free to convey such lands to any party, and those parties to any other parties, so long as such land is used for a public purpose." The court retained jurisdiction to resolve any dispute as to whether a proposed use of the property complies with the public purpose condition.

CVR brought the instant appeal, claiming that the trial court erred in concluding that its title is held subject to public trust limitations. CVR also argues that plaintiffs' claims are barred by estoppel and laches. The City and the State cross-appealed, urging: (1) that the trial court erred in holding that CVR has a fee simple interest in the filled lands; (2) that, even if CVR has such an interest, it is a fee simple determinable; (3) that, in any event, the legislature may revoke CVR's interest in the filled lands; (4) that only the state can act as public trustee; and (5) that allowing a private corporation to determine the uses of public trust property represents an unlawful delegation of legislative authority.

I.

Under the public trust doctrine, the lands submerged beneath navigable waters are "held by the people in their character as sovereign in trust for public uses for which they are adapted." Hazen v. Perkins, 92 Vt. 414, 419, 105 A. 249, 251 (1918). Title to these lands is deemed to be "held in trust for the people of the State that they may enjoy the navigation of the waters, carry on commerce over them, and have liberty of fishing therein freed from the obstruction or interference of private parties." Illinois Central Railroad v. Illinois, 146 U.S. 387, 452, 13 S.Ct. 110, 118, 36 L.Ed. 1018 (1892). The character of this title is distinctive as compared to state-held title in other lands, id., and different legal rules therefore apply. Boston Waterfront Development Corp. v. Commonwealth, 378 Mass. 629, 631, 393 N.E.2d 356, 358 (1979).

The public trust doctrine is an ancient one, having its roots in the Justinian Institutes of Roman law. Id. As one court has observed:

For centuries, land below the low water mark has been recognized as having a peculiar nature, subject to varying degrees of public demand for rights of navigation, passage, portage, commerce, fishing, recreation, conservation and aesthetics. Historically, no developed western civilization has recognized absolute rights of private ownership in such land as a means of allocating this scarce and precious resource among the competing public demands. Though private ownership was permitted in the Dark Ages, neither Roman Law nor the English common law as it developed after the signing of the Magna Charta would permit it.

United States v. 1.58 Acres of Land, 523 F.Supp. 120, 122-23 (D.Mass.1981) (citations omitted). After the American Revolution, the people of each state acquired the "absolute right to all ... navigable waters and the soils under them for their own common use." Martin v. Waddell, 41 U.S. (16 Pet.) 367, 410, 10 L.Ed. 997 (1842).

Despite its antediluvian nature, however, the public trust doctrine retains an undiminished vitality. The doctrine is not " 'fixed or static,' but one to 'be molded and extended to meet changing conditions and needs of the public it was created to benefit.' " Matthews v. Bay Head Improvement Ass'n, 95 N.J. 306, 326, 471 A.2d 355, 365 (1984) (quoting Borough of Neptune City v. Borough of Avon-by-the-Sea, 61 N.J. 296, 309, 294 A.2d 47, 54 (1972)). The very purposes of the public trust have "evolved in tandem with the changing public perception of the values and uses of waterways." National Audubon Society v. Superior Court of Alpine County, 33 Cal.3d 419, 434, 658 P.2d 709, 719, 189 Cal.Rptr. 346, 356 (1983) (en banc). Nor is the doctrine fixed in its form among jurisdictions, as "there is no universal and uniform law upon the subject." Shively v. Bowlby, 152 U.S. 1, 26, 14 S.Ct. 548, 557, 38 L.Ed. 331 (1894).

II.

In Vermont, the critical importance of public trust concerns is reflected both in case law and in the state constitution. Chapter II, § 67 of the Vermont Constitution provides that:

The inhabitants of this State shall have liberty in seasonable times, to hunt and fowl on the lands they hold, and on other lands not inclosed, and in like manner to fish in all boatable and other waters (not private property) under proper regulations, to be made and provided by the General Assembly.

(Emphasis added.) ² Although § 67 has no direct application here, it underscores the early emphasis placed upon the public interest in Vermont's navigable waters.

In 1918, this Court considered a miller's claimed right to raise and lower the level of Lake Morey by a few inches, an activity that the miller and his predecessors had been carrying out for one hundred and twenty years. See Hazen, 92 Vt. at 416-17, 105 A. at 250. The miller accomplished these manipulations by altering a dam constructed by the state with legislative authority. After concluding that the waters of Lake Morey were boatable as a matter of law, the Court stated:

Being public waters according to the test afforded by the Constitution, the grants of land bounding upon the lake pass title only to the water's edge, or to low-water mark if there be a definite low-water line. The bed or soil of such boatable lakes in this State is held by the people in their character as sovereign in trust for public uses for which they are adapted. The [miller] did not, therefore, acquire any title to the waters of the lake, as such, nor to the lands covered by such waters, by grants from private sources. And the General Assembly cannot grant to private persons for private purposes, the right to control the height of the water of the lake ... for such a grant would not be consistent with the exercise of that trust which requires the State to preserve such waters for the common and public use of all. The General Assembly being powerless to make such a grant, none can be intended as the basis of the decree.

Id. at 419-20, 105 A. at 251 (citations omitted). Thus, while Hazen involved a claim of right to manipulate water levels rather than a claim of title, the case stands for the proposition that the legislature cannot grant rights in public trust property for private purposes. In several other cases, this Court has invoked the public trust doctrine in rejecting claims of private rights with respect to public waters. See In re Lake Seymour, 117 Vt. 367, 375, 91 A.2d 813, 818 (1952) (no right to control water level of lake can be acquired by or granted to private persons for private purposes); State v....