Barney v. Burlington Northern R. Co., Inc.

• Decision Date: 09 September 1992
• Docket Number: No. 17672-,17672-
• Citation: 490 N.W.2d 726
• Parties: Helen S. BARNEY and Margret C.H. Barney; Florence L. Kaubisch; Lester F. Hall and Araden J. Hall Trust; Roy Schiefer and Betty Schiefer, husband and wife; Charley C. Pinson and Anna M. Pinson, husband and wife; and William and Ina Mae Oerlline, husband and wife, Plaintiffs and Appellants, v. BURLINGTON NORTHERN RAILROAD COMPANY, INC., United States of America, and all persons unknown who have or claim to have any interest of estate, or lien or encumbrance in or upon the premises described in the complaint, Defendants, and State of South Dakota, Intervenor-Defendant and Appellee. a.
• Court: South Dakota Supreme Court

Page 726

490 N.W.2d 726

Helen S. BARNEY and Margret C.H. Barney; Florence L.

Kaubisch; Lester F. Hall and Araden J. Hall Trust; Roy

Schiefer and Betty Schiefer, husband and wife; Charley C.

Pinson and Anna M. Pinson, husband and wife; and William and Ina Mae Oerlline, husband and wife, Plaintiffs and Appellants, v. BURLINGTON NORTHERN RAILROAD COMPANY, INC., United States of

America, and all persons unknown who have or claim to have

any interest of estate, or lien or encumbrance in or upon

the premises described in the complaint, Defendants,

and

State of South Dakota, Intervenor-Defendant and Appellee.

No. 17672-a.

Supreme Court of South Dakota.

Argued April 21, 1992.

Decided Sept. 9, 1992.

Scott D. McGregor of Viken, Viken, Pechota, Leach & Dewell, Rapid City, for plaintiffs and appellants.

Mark Barnett, Atty. Gen., Craig M. Eichstadt, Asst. Atty. Gen., Pierre, for intervenor-defendant and appellee.

Reed C. Richards, Deadwood, for amici curiae Black Hills Rails to Trails Ass'n, South Dakota Park and Recreation Owners Ass'n, Black Hills Volkssport Ass'n, South Dakota Snowmobile Ass'n, Missouri Breaks Chapter of the Nat. Audubon Soc., and Rails to Trails Conservancy.

JUDITH MEIERHENRY, Circuit Judge.

Landowners seek to quiet title to a railroad right-of-way running across their lands from Custer to Deadwood, South Dakota. The State of South Dakota (State) claims it is entitled to the right-of-way. The landowners claim that the State's conversion of the right-of-way into recreational trails is a taking of their reversionary interests deserving of compensation from the State.

FACTS

Congress under the provisions of the General Right-of-Way Act of 1875, 43 U.S.C. Sec. 934, ¹ granted right-of-way corridors across public lands to the Grand Island and Wyoming Central; Burlington and Missouri; and Chicago Burlington and Quincy Railroads. The rights-of-way crossed public lands in the Black Hills of South Dakota. The United States Government subsequently conveyed the underlying patented lands subject to the railroad rights-of-way. Helen and Margret Barney, Florence Kaubisch, Lester Hall and M/Bank, as Trustees, Roy and Betty Schiefer, Charley and Anna Pinson, and William and Ina Oerlline (Landowners) are the successors in interest to those land patents. The Burlington Northern Railroad (Railroad) is the successor in interest to the railroad rights-of-way.

On August 1, 1983, the Railroad filed an application with the United States Interstate Commerce Commission (I.C.C.) requesting a certificate of public convenience and necessity allowing the Railroad to abandon its lines between Hill City and Deadwood, South Dakota. The I.C.C. issued a certificate and decision on September 9, 1983, granting the Railroad the authority to abandon the lines. On January 23, 1984, the Railroad informed the I.C.C. that actual abandonment of the lines was effected on January 13, 1984.

Beginning in the summer of 1983, the State through the Department of Game, Fish, and Parks expressed interest in developing the right-of-way for recreational trails. The State planned to develop the recreational trails primarily for pedestrian, bicycle, horse, cross-country skiing, and snowmobiling. In 1986, the State, along with the Black Hills Rails-to-Trails Association, began negotiating with the Railroad. In 1988 and 1989, the State and the Railroad entered into agreements whereby the Railroad agreed to donate to the State all of its right, title and interest to the right-of-way from Custer to Deadwood, South Dakota.

On October 9, 1987, Landowners, claiming title to the right-of-way, filed a quiet title action. ² The Landowners were not attempting to prevent the development of the recreational trail or to challenge the desirability of the recreational trail. The Landowners' request was for compensation. The State intervened and moved for summary judgment. The parties agreed that there were no issues of material fact, and on July 24, 1991, the trial court granted summary judgment to the State. The trial court determined that the Railroad right-of-way and its abandonment are governed by 43 U.S.C. Sec. 912 (Sec. 912) requiring either a declaration or decree of abandonment by a court of competent jurisdiction or an act of Congress. The trial court also determined that the I.C.C.'s certificate and approval of abandonment did not amount to a congressional decree of abandonment under Sec. 912 and that abandonment occurred upon the trial court's decree. The trial court further found that the Landowners' reversionary interest did not vest because the State developed "a public highway," i.e., a public recreational trail within the one year period required by Sec. 912 and SDCL 49-16A-115; therefore, no taking occurred, and the Landowners were not entitled to compensation. We agree.

ISSUES

I.

WHETHER Sec. 912 APPLIES TO THE RIGHT-OF-WAY GRANTED TO THE RAILROAD?

II.

IF SO, WHETHER THE RAILROAD'S RIGHT-OF-WAY HAS BEEN LEGALLY ABANDONED UNDER THE PROVISIONS OF Sec. 912 EITHER BY AN ACT OF CONGRESS OR A DECREE OF A COURT OF COMPETENT JURISDICTION AND WHETHER THE STATE'S PROPOSED RECREATIONAL TRAIL ALONG THE RAILROAD RIGHT-OF-WAY CONSTITUTES THE ESTABLISHMENT OF A PUBLIC HIGHWAY WITHIN ONE YEAR OF ABANDONMENT?

III.

WHETHER THE LANDOWNERS ARE ENTITLED TO COMPENSATION FROM THE STATE FOR THE STATE'S TAKING OF THEIR INTEREST IN THE RAILROAD RIGHT-OF-WAY?

ANALYSIS

I. APPLICATION OF Sec. 912

The Landowners claim that rights-of-way granted by the United States to the railroads under the 1875 Act are common law easements which automatically extinguish and revert to the underlying landowner when they cease to be used for railroad purposes and that the rights-of-way are not subject to the reversion provisions of Sec. 912. Section 912 provides:

Whenever public lands of the United States have been or may be granted to any railroad company for use as a right of way for its railroad or as sites for railroad structures of any kind, and use and occupancy of said lands for such purposes has ceased or shall hereafter cease, ... by abandonment by said railroad company declared or decreed by a court of competent jurisdiction or by Act of Congress, then and thereupon all right, title, interest, and estate of the United States in said lands shall, except such part thereof as may be embraced in a public highway legally established within one year after the date of said decree or forfeiture or abandonment be transferred to and vested in any person, firm, or corporation, assigns, or successors in title and interest to whom or to which title of the United States may have been or may be granted....

The historical background of Sec. 912 begins with the role of Congress in railroad development. Beginning in 1850 Congress, for the first time, enacted a bill that explicitly granted public lands to aid construction of a cross-country railroad. Act of Sept. 20, 1850, 9 Stat. 466. First, lines were built connecting the southern states with Illinois. Then, spurred by the California gold rush and the Civil War, Congress wanted the railroads to expand to provide passage to the western United States. Congress gave generous land grants from the public domain to the railroads to subsidize the costs of the western expansion. The Union Pacific Act of 1862 created the impetus to begin laying track from the 100th meridian, a point in the Platte River Valley near Kearney and North Platte, Nebraska, to California. Act of July 1, 1862, 12 Stat. 489; see, Leo Sheep Co. v. United States, 440 U.S. 668, 99 S.Ct. 1403, 59 L.Ed.2d 677 (1979). ³

In 1872, Congressional policy changed; the House of Representatives enacted a resolution condemning its policy of outright land grant subsidies to railroads. Leo Sheep Co., supra. Congress, instead, reserved the land for homesteads and educational purposes. Great Northern R. Co. v. United States, 315 U.S. 262, 273-4, 62 S.Ct. 529, 533-4, 86 L.Ed. 836 (1942). Nevertheless, Congress continued to encourage development of the west and enacted the General Railroad Right-of-Way Act in 1875 (1875 Act) which gave easements to railroads across public lands. 43 U.S.C. Sec. 934. The right-of-way at issue in this case was granted by the 1875 Act.

Subsequently, the United States transferred much of the underlying lands to homesteaders and others subject to the railroad rights-of-way. In the early 1920's, Congress passed statutes designating procedures for distribution of the rights-of-way when the railroads abandoned their lines. 43 U.S.C. Sec. 913 (1920), 43 U.S.C. Sec. 912 (1922), 23 U.S.C. Sec. 316 (1921). ⁴

The Landowners contend that Sec. 912 applies only to reversionary rights held by the United States and that the 1875 Act left no retained interest with the United States. ⁵ The nature of the property interest held by the United States Government, the Landowners or the Railroad is defined and controlled by federal legislation and is, therefore, a federal question. Northern P.R. Co. v. Townsend, 190 U.S. 267, 23 S.Ct. 671, 47 L.Ed. 1044 (1903). The U.S. Supreme Court defined the right-of-way interest conveyed to the railroads as a "limited fee, made on an implied condition of reverter." Id. 190 U.S. at 271, 23 S.Ct. at 672, 47 L.Ed. at 1047; Rio Grande Western R. Co. v. Stringham, 239 U.S. 44, 36 S.Ct. 5, 60 L.Ed. 136 (1915).

The U.S. Supreme Court in 1942 in Great Northern, supra, further defined the nature of the property right given to the railroads by the 1875 Act. The Court determined that Congress conveyed an easement, not a fee simple in the right-of-way. The U.S. Supreme Court discussed the nature of the property interest conveyed by the 1875 Act in Great Northern but did not address the applicability of the reversion procedures in Secs. 912 or 913. The main question before the Court in Great Northern was whether the United States conveyed a fee title to the railroads by the 1875 Act. Great Northern stands only for the proposition that the underlying...