Anderson v. United States
| Decision Date | 10 April 2020 |
| Docket Number | No. 17-668L,17-668L |
| Parties | GEORGE ANDERSON et al., Plaintiffs, v. THE UNITED STATES, Defendant. |
| Court | U.S. Claims Court |
RCFC 56; Cross-Motions for Summary Judgment on Liability; Fifth Amendment Taking Claim; Rails-to-Trails; Texas Law; Deed Interpretation; Fee Simple Versus Easement; Defeasible Fee; Unavailability or Lack of Conveyance Instrument; Intervening Parcels; Intervening Road
J. Robert Sears, St. Louis, MO, for plaintiffs.
Lucinda J. Bach, United States Department of Justice, Washington, DC, for defendant.
Plaintiffs in this Rails-to-Trails case allege that they own real property adjacent to a railroad line in McLennan County, Texas. They contend that the United States violated the Takings Clause of the Fifth Amendment to the United States Constitution by authorizing the conversion of the railroad line into a recreational trail pursuant to the National Trail Systems Act ("Trails Act"), thus acquiring their property by inverse condemnation. The parties filed cross-motions for summary judgment on the issue of liability in which the central dispute is whether plaintiffs possess a property interest in the railroad line. For the reasons articulated below, the court denies plaintiffs' motion for summary judgment and grants in part and denies in part defendant's cross-motion for summary judgment.
During the last century, the United States began to experience a sharp reduction in rail trackage. Preseault v. Interstate Commerce Comm'n, 494 U.S. 1, 5 (1990) ("Preseault I"). To remedy this problem, Congress enacted a number of statutes, including the Trails Act, 16 U.S.C. §§ 1241-1251 (2012). The Trails Act, as amended, provides for the preservation of "established railroad rights-of-way for future reactivation of rail service" by authorizing the interim use of such rights-of-way as recreational and historical trails. Id. § 1247(d). This process is referred to as "railbanking," and is overseen by the Surface Transportation Board ("Board"), id., the federal agency with the exclusive jurisdiction to regulate "the construction, acquisition, operation, abandonment, or discontinuance" of most railroad lines in the United States, 49 U.S.C. § 10501(b) (2012).
Before railbanking can occur, the railroad company must seek to abandon its line, either by initiating abandonment proceedings with the Board pursuant to 49 U.S.C. § 10903, or by requesting that the Board exempt it from such proceedings pursuant to 49 U.S.C. § 10502. While considering the railroad company's abandonment application or exemption request, the Board will entertain protests and comments from interested third parties. 49 C.F.R. §§ 1152.25, 1152.29(a) (2015). Of particular relevance in this case, interested third parties may submit requests for the interim use of the railroad line as a trail pursuant to 16 U.S.C. § 1247(d). Id.
If an interested third party submits a trail-use request to the Board that satisfies the requirements of 16 U.S.C. § 1247(d), the Board makes the necessary findings pursuant to 49 U.S.C. § 10502(a) or 49 U.S.C. § 10903(d), and the railroad company agrees to negotiate a trail-use agreement, the Board will issue one of two documents: if the railroad company initiated abandonment proceedings, the Board will issue a Certificate of Interim Trail Use or Abandonment, and if the railroad company sought an exemption, the Board will issue a Notice of Interim Trail Use or Abandonment ("NITU"). 49 C.F.R. § 1152.29(b)-(d). The effect of both documents is the same: to "permit the railroad to discontinue service, cancel any applicable tariffs, and salvage track and materials, consistent with interim trail use and rail banking . . . ; and permit the railroad to fully abandon the line if no agreement is reached 180 days after it is issued, subject to appropriate conditions . . . ." Id. § 1152.29(d)(1); accord id. § 1152.29(c)(1). The Board will entertain requests to extend the 180-day deadline to enable further negotiations. If the railroad company and the interested third party execute a trail-use agreement, then abandonment of the railroad line is stayed for the duration of the agreement. Id. § 1152.29(c)-(d); 16 U.S.C. § 1247(d). If no trail-use agreement is executed, the railroad company is permitted to fully abandon the line. 49 C.F.R. § 1152.29(c)-(d). To exercise its abandonment authority, the railroad company must "file a notice of consummation with the Board to signify that it has . . . fully abandoned the line" within one year of "the service date of the decision permitting the abandonment . . . ." Id. § 1152.29(e)(2). In the absence of a timely filed notice of consummation, the railroad company's authority to abandon the line automatically expires. Id.
If efforts to execute a trail-use agreement are unsuccessful and the railroad company notifies the Board that it has fully abandoned the line, the Board is divested of jurisdiction over the line and ownership of the property encompassing or underlying the line is determined under state law. Caldwell v. United States, 391 F.3d 1226, 1228-29 (Fed. Cir. 2004).
Plaintiffs are twenty-four landowners who own real property purportedly adjacent to a railroad line in McLennan County, Texas situated between milepost 2.31 and milepost 4.76 near Waco, Texas.1 See Pls.' Ex. A at 25-26. The line was acquired, for the most part, in 1902 byTexas Central Railroad Company ("Texas Central"), Pls.' Ex. E, a predecessor to the current owner of the line, Union Pacific Railroad Company ("Union Pacific"),2 Pls.' Ex. A at 25. Texas Central acquired the right of way through various means, Pls.' Ex. E, including, as relevant here, a declaration of trust, id., a court-ordered condemnation, Pls.' Ex. H, and four deeds—the Falkner deed, the George deed, the Brown deed, and the Davis deed, see Pls.' Exs. I-L. Texas Central constructed its railroad in 1905. Def.'s Ex. 1 at 4.
In 1967, the railroad line was "reclassified . . . and viewed as an unregulated switching spur" after a long segment of the right of way situated north of the line was abandoned. Id.
On December 15, 2015, Union Pacific filed a Notice of Exemption with the Board, indicating that it intended to abandon the 2.45-mile-long railroad line on or after February 3, 2016. Pls.' Ex. A at 25-29. In the Notice of Exemption, Union Pacific stated that "no local or overhead traffic had moved over the Line for at least two years" and that it intended "to salvage the limited amount of track material on the Line and transfer the right of way to the City of Waco, Texas for a utility corridor and possibly for trail use." Id. at 26.
On February 2, 2016, the City of Waco filed a late request with the Board for the issuance of a NITU, Pls.' Ex. B, and the Board issued a NITU for the railroad line on February 17, 2016, with an effective date of February 18, 2016, Pls.' Ex. C.3 The City signed an agreement with Union Pacific to assume responsibility for the abandoned line on August 10, 2016. Pls.' Ex. D at 67. Five days later, Union Pacific filed a Joint Notice of Interim Trail Use/Rail Banking Agreement with the Board. Id. at 63.
In the meantime, on August 4, 2016, Union Pacific executed a "Deed Without Warranty," conveying its rights in the "strip or tract of land" described therein to the City of Waco. Pls.' Ex. U. In the deed, Union Pacific included a reddendum clause reserving the mineral rights for the land and added a covenant that the property must not be used for residential, lodging, educational, or child-care facilities. Id. at 1-2. The deed provided that Union Pacific expressly disclaimed any warranty and indicated that any warranties were waived by the City. Id. at 2.
On May 22, 2017, plaintiffs filed a complaint—amended on February 13, 2019—asserting a Fifth Amendment taking. Plaintiffs allege that the railroad line at issue was operated upon land granted by deeds conveying only an easement, and that the abandonment of that line would have unburdened plaintiffs' property but for the operation of the Trails Act. Plaintiffs assert that they owned property abutting the line on the date of the alleged taking and that issuance of the NITU prevented the extinguishment of the railroad company's easement, resulting in a taking under the Fifth Amendment for which compensation is due. Plaintiffs request fair market value for their taken property, including severance and delay damages, interest, and attorney's fees and costs.
After the conclusion of fact discovery, plaintiffs filed a motion for summary judgment on the issue of liability, arguing that they have established that Union Pacific held only an easement in the railroad line, which would have reverted to them, as adjacent property owners, but for the issuance of the NITU. Defendant cross-moved for partial summary judgment on liability, contending that Union Pacific owns the land underlying the line in fee simple and therefore the issuance of the NITU could not have resulted in a taking of the property interest alleged by plaintiffs. Defendant further contends that the parcels owned by certain plaintiffs do not abut the line and, with respect to certain parcels, that plaintiffs have failed to produce evidence of a conveyance to Texas Central. The parties each filed reply briefs and then, at the court's request, supplemental briefs regarding the nature of the interest conveyed to Texas Central by one of the deeds at issue. On April 8, 2020, the court granted the parties' request to cancel oral argument and issue a decision based on their written submissions.
The parties cross-move for summary judgment on the issue of liability pursuant to Rule 56 of the Rules of the United States Court of Federal Claims ("RCFC"). Summary judgment is appropriate when there is no genuine issue of material fact and the moving party is entitled to a judgment as a matter of...
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