75 F.3d 648 (Fed. Cir. 1996), 93-5110, Richmond, Fredericksburg & Potomac R. Co. v. United States

Docket Nº:93-5110.
Citation:75 F.3d 648
Party Name:RICHMOND, FREDERICKSBURG & POTOMAC RAILROAD COMPANY, Plaintiff-Appellant, v. The UNITED STATES, Defendant-Appellee.
Case Date:January 26, 1996
Court:United States Courts of Appeals, Court of Appeals for the Federal Circuit

Page 648

75 F.3d 648 (Fed. Cir. 1996)

RICHMOND, FREDERICKSBURG & POTOMAC RAILROAD COMPANY,

Plaintiff-Appellant,

v.

The UNITED STATES, Defendant-Appellee.

No. 93-5110.

United States Court of Appeals, Federal Circuit

January 26, 1996

Page 649

Appealed from: U.S. Court of Federal Claims Judge Nettesheim.

Howard H. Stahl, Steptoe & Johnson, Washington, D.C., argued for plaintiff-appellant. With him on the brief were John R. Labovitz, Robert C. Barber and Gregory Husisian. Also on the brief was Charles A. Hartz, Jr., Vice President & General Counsel, RF & P Corporation, Richmond, Virginia, of counsel.

Jeffrey P. Kehne, Attorney, Environment & Natural Resources Division, Department of Justice, Washington, D.C., argued for defendant-appellee. With him on the brief were Lois J. Schiffer, Acting Assistant Attorney General, Stephen J. Odell and Edward J. Shawaker. Of counsel was Jacques B. Gelin, Department of Justice. Also on the brief were Richard G. Robbins and Lisa Del Compare, Office of the Solicitor, Department of the Interior, Washington, D.C., of counsel.

Before ARCHER, Chief Judge, and PLAGER and LOURIE, Circuit Judges.

PLAGER, Circuit Judge.

The Court of Federal Claims granted the Government summary judgment on Plaintiff Richmond, Fredericksburg & Potomac Railroad Company's ("RF & P's") breach of contract and takings claims. Richmond, Fredericksburg and Potomac Railroad Co. v. United States, 27 Fed.Cl. 275 (1992). The parcel of land involved was conveyed in 1938 to RF & P by the Government. RF & P asserted before the trial court that changed conditions surrounding the land nullified the use restrictions in the conveyancing documents, and therefore the Government's continued representation to RF & P and third parties that such restrictions continue to apply had the effect of breaching the conveyancing "contract," and constituted a taking in violation of the Fifth Amendment. The trial court disagreed, finding that the plain language of the conveyancing documents imposed perpetual use restrictions on the land, and that, even if the restrictions no longer applied, the Government's assertions to the contrary did not so interfere with RF & P's possessory interest as to effect a taking. We agree with the trial court that the use restrictions imposed on the land at issue continue to apply, and conclude that RF & P is not entitled to the relief it seeks. Accordingly, we affirm.

I. BACKGROUND

An extensive exposition of the facts is set out in the opinion of the Court of Federal Claims. We set forth here only those facts needed to understand the issues on appeal.

RF & P was chartered in 1834 by the General Assembly of the Commonwealth of Virginia. RF & P constructed Potomac Yard in Arlington County, Virginia and, since the early 1900's, has operated the yard as a joint facility that has been used by RF & P and other railroads. Potomac Yard provided a central location for railroad interchange and provided the tenant railroad companies with essential services.

In 1928, the Government undertook construction of the Mount Vernon Memorial Highway ("the Highway") along the western

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shore of the Potomac River. In 1930 and 1932, RF & P conveyed real property on the western shore of the Potomac River to the Government, including 198.6 acres in the cove of Four Mile Run, for construction of the Highway and other purposes of the Government. The Government constructed a fill or causeway in the cove of Four Mile Run for the Highway in 1930 on the property deeded, by quitclaim deed, to the Government by RF & P.

In January 1932 the Government brought an action to quiet title on certain land known as Roaches Run or Shallow Bay. The Government named RF & P as a defendant, as the Government claimed title to nearly 24 acres RF & P alleged to be its own. After filing its quiet-title action, the Government, through the National Capital Park and Planning Commission ("the Commission"), began settlement negotiations with RF & P. The Government sought a compromise settlement involving certain tracts of land which included Area 3, a tract of land composed of the western-most portion of the cove of Four Mile run. The Commission's representatives stated that the Government's interests in the quiet title action were to extinguish a recent Virginia land grant to some private parties and to protect the scenic views from the planned Highway. RF & P's objective was to clear its title to areas needed for the expansion of Potomac Yard and other railroad-related facilities.

An Act of June 4, 1934, ch. 375, 48 Stat. 836, authorized the Secretary of the Interior, on behalf of the Government, to make and accept conveyances of lands in dispute in, under, and adjacent to the Potomac River. Under this authority, on February 12, 1938, the Government entered into an Indenture with RF & P. The Indenture, recorded among the land records of both the District of Columbia and Arlington County, Virginia, was a written "compromise agreement" made "in order to facilitate the settlement of ... claims and controversies and the establishment of the title of the United States of America in and to lands in, under and adjacent to [the] Potomac River by making equitable adjustments of such claims and controversies between the United States of America ... and [RF & P]...."

The 1938 Indenture stated that "for and in consideration of the premises and for the purpose of carrying into effect the provisions of the aforesaid compromise agreement ... and in further consideration of the mutual conveyances, quitclaims, covenants and agreements made reciprocally by and between [RF & P] and [the Government]," RF & P and the Government "respectively grant and convey each to the other" stated "property, estates, rights, interests, easements, servitudes, privileges[,] and appurtenances" and "agree one with the other in manner and form and to the purpose and effect" of the Indenture.

The 1938 Indenture provides that the Government "remise, release and forever quitclaim unto [RF & P], its successors and assigns forever, subject to the restrictions, covenants and conditions ... set forth, all right, title, interest and estate, whatsoever, both at law and in equity, of [the Government] in ... marsh land, made land and land under water ... described under the designation of Area 3, ... to be used by [RF & P], its successors and assigns, solely for the construction, maintenance and operation of its main line railroad tracks and ways and a freight yard in connection therewith." (Emphasis added.)

The 1938 Indenture further provides that, "in pursuance of the compromise agreement and for the considerations ... recited," RF & P "covenant for itself, its successors and assigns, with the United States of America, ... its successors and assigns, that it will not use said area or tract ... quitclaimed to it under the designation of Area 3 for any other purpose than the construction, maintenance and operation by it of its main line railroad tracks and ways and a freight yard in connection therewith." (Emphasis added.) Since February of 1938, RF & P has used the portions of Area 3 to which it has retained title solely for the purposes described in the Indenture, that is, for uses in connection with its mainline railroad tracks and ways and as a freight yard.

Due to a decrease in railroad need, Potomac Yard by 1991 handled only 20 percent of

Page 651

the number of freight cars that it handled at its peak. RF & P now wants to develop the land for other uses. RF & P claims that it is no longer bound by the restrictive covenant in the 1938 Indenture because conditions in and around Area 3 have changed substantially. RF & P alleges several grounds for the requested relief.

First, the size of Area 3 has been reduced through condemnations by the surrounding state governments. For example, in 1975 and 1977, the Washington Metropolitan Area Transit Authority ("WMATA") condemned over 2 acres of Area 3 for construction of a Metro rail line. The line, which is elevated in part, runs between the remainder of Area 3 owned by RF & P and the Highway, which has become the George Washington Memorial Parkway. In 1987 the Commonwealth of Virginia condemned a portion of Area 3 for the widening and improvement of Route 1, also known as the Jefferson Davis Highway.

Second, the original Highway, now the George Washington Memorial Parkway, is no longer separated by a buffer area from property used by RF & P...

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