649 F.3d 799 (7th Cir. 2011), 09-2876, Samuel C. Johnson 1988 Trust v. Bayfield County, Wisconsin

Docket Nº:09-2876, 09-2879.
Citation:649 F.3d 799
Opinion Judge:POSNER, Circuit Judge.
Party Name:SAMUEL C. JOHNSON 1988 TRUST, et al., Plaintiffs-Appellants, v. BAYFIELD COUNTY, WISCONSIN, Defendant-Appellee.
Attorney:Cecilia Fex (argued), Attorney, Ackerson Kauffman Fex, PC, Washington, DC, for Plaintiffs-Appellants in No. 09-2876. William T. Stuart (argued), Meissner, Tierney, Fisher & Nichols, Milwaukee, WI, for Plaintiffs-Appellants in No. 09-2879. Barbara A. Neider (argued), Attorney, Richard K. Nordeng, ...
Judge Panel:Before POSNER, WOOD, and TINDER, Circuit Judges.
Case Date:June 17, 2011
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit
 
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649 F.3d 799 (7th Cir. 2011)

SAMUEL C. JOHNSON 1988 TRUST, et al., Plaintiffs-Appellants,

v.

BAYFIELD COUNTY, WISCONSIN, Defendant-Appellee.

Nos. 09-2876, 09-2879.

United States Court of Appeals, Seventh Circuit.

June 17, 2011

Argued April 13, 2011.

Page 800

Cecilia Fex (argued), Attorney, Ackerson Kauffman Fex, PC, Washington, DC, for Plaintiffs-Appellants in No. 09-2876.

William T. Stuart (argued), Meissner, Tierney, Fisher & Nichols, Milwaukee, WI, for Plaintiffs-Appellants in No. 09-2879.

Barbara A. Neider (argued), Attorney, Richard K. Nordeng, Attorney, Stafford Rosenbaum LLP, Madison, WI, for Defendant-Appellee.

Debra P. Conrad, Madison, WI, for Amicus Curiae Wisconsin Realtors Association.

J. Bushnell Nielsen, Reinhart, Boerner, Van Deuren, Waukesha, WI, for Amicus Curiae Wisconsin Land Title Association.

Charles H. Montange, Law Offices of Charles H. Montange, Seattle, WA, for Amicus Curiae Rails to Trails Conservancy.

Kristine S. Tardiff (argued), Department of Justice, Environment & Natural Resources Division, Concord, NH, for Amicus Curiae United States of America.

Before POSNER, WOOD, and TINDER, Circuit Judges.

POSNER, Circuit Judge.

The plaintiffs are landowners in Bayfield County, a rural county at the northern tip of Wisconsin. They brought this suit to

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quiet title to their property, over which the County claims a right derived from federal law to build snowmobile trails; the plaintiffs contest the County's claim. The district court granted summary judgment in favor of the plaintiffs. We reversed, 520 F.3d 822 (7th Cir.2008), on grounds unrelated to the present appeal, which is by the plaintiffs from the district court's decision on remand, rendering judgment as a matter of law for the County.

The suit arises in the first instance under state law, and since there is not complete diversity of citizenship the case might seem to lie outside federal jurisdiction. But as we held in our previous opinion, 520 F.3d at 827-28, correctly though perhaps a bit cryptically, because the property was once owned by the federal government and the plaintiffs ultimately base their suit on the terms of the original federal grants, the suit may be said to arise under federal law as well. See, e.g., Hopkins v. Walker, 244 U.S. 486, 489-90, 37 S.Ct. 711, 61 L.Ed. 1270 (1917). The County, moreover, could just as well have brought the quiet-title action as the plaintiffs, and in that event the claim would have arisen under federal law because, as we'll see, that's the basis of the County's claim to a right of way. That brings the case— because a suit to quiet title is functionally a form of declaratory-judgment action (see Samuel Bray, " Preventive Adjudication," 77 U. Chi. L.Rev. 1275, 1276 (2010)), the only relief sought being a declaration of rights— within the rule that " in declaratory judgment cases, the well-pleaded complaint rule dictates that jurisdiction is determined by whether federal question jurisdiction would exist over the presumed suit by the declaratory judgment defendant." GNB Battery Technologies, Inc. v. Gould, Inc., 65 F.3d 615, 619 (7th Cir.1995).

The case also satisfies the jurisdictional standard of Grable & Sons Metal Products, Inc. v. Darue Engineering & Mfg., 545 U.S. 308, 312-16, 125 S.Ct. 2363, 162 L.Ed.2d 257 (2005), one of those cases in which the Supreme Court seems shy about taking a definite stand. See, e.g., New Hampshire v. Maine, 532 U.S. 742, 749-51, 121 S.Ct. 1808, 149 L.Ed.2d 968 (2001), discussed in Walton v. Bayer Corp., 643 F.3d 994, 1002-03 (7th Cir.2011). Grable tells us to ask: " does a state-law claim necessarily raise a stated federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities" ? 545 U.S. at 314, 125 S.Ct. 2363. The answer in this case is " yes."

With federal jurisdiction secure, we turn to the merits. The material facts are uncontested. In the early days of railroading, the federal government encouraged this immensely promising mode of transportation by a variety of means, including by imposing a checkerboard pattern on large areas of federal public domain, see, e.g., Leo Sheep Co. v. United States, 440 U.S. 668, 672-73, 99 S.Ct. 1403, 59 L.Ed.2d 677 (1979), some of it in Wisconsin. Federal statutes enacted in 1856 and 1864 divided this public domain land in Wisconsin into identical square sections, designated by alternating odd and even numbers, and gave the odd-numbered sections to states to give to railroads in fee simple, while retaining the even-numbered sections for sale by the government. Act of June 3, 1856, ch. 43, 11 Stat. 20; Act of May 5, 1864, ch. 80, 13 Stat. 66.

Railroads needed to be able to run their tracks across even-numbered sections as well as across the odd-numbered ones that they owned, since each odd-numbered one was surrounded by even-numbered ones, just as each square on a black-and-white checkerboard (unless the square is at a side or end of the board) is surrounded by

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squares of the other color. But the railroads didn't need all the land in either type of section for their tracks. They were expected to use part of the odd-numbered sections (which they owned) for their tracks and rent or sell the rest; the sale and rental proceeds would help not only to finance the construction or extension of their lines but also to pay for the purchase or condemnation of any rights of way that they needed in the even-numbered sections. Owners and renters of land proximate to the tracks, such as farmers and lumbermen, would become part of the railroad's customer base.

The plaintiffs own lots in Bayfield County in sections numbered 21 (odd) and 32 (even). A railroad used to cross these lots, and the County premises its asserted right to build a snowmobile trail where the railroad tracks used to be on the railroad's right of way and on what the County argues is a federal " reversionary interest" in the right of way, an interest it contends was given to the County by a federal statute enacted in 1922.

We begin our analysis with the lot in the even-numbered section. It had been bought by the plaintiffs' remote predecessor from the federal government in fee simple in a series of transactions between 1882 and 1884 (remember that it was the even-numbered lots that the government sold off rather than giving to states to give to railroads). The railroad obtained a right of way over the lot in the form of an easement (a right to use a piece of land for a specified purpose, rather than fee simple), by condemnation, and the nature of such a right may seem to nix the County's argument. For the railroad's successor abandoned the right of way; and when an easement is abandoned the owner of the fee simple is revested with full rights to the property. But the County argues that, no, a federal statute enacted in 1852, and thus before the checkerboard statutes were enacted, had granted a right of way in federal lands to railroads that were " now [chartered] or that may be chartered within ten years hereafter." Act of Aug. 4, 1852, ch. 80, 10 Stat. 28. The right of way reverted— the argument continues— to the federal government when its use by the...

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