Biery v. U.S., 07-693L

• Decision Date: 09 June 2011
• Docket Number: No. 07-693L,No. 07-675L,07-693L,07-675L
• Parties: DOROTHY L. BIERY, et al., and JERRAMY and ERIN PANKRATZ, et al., Plaintiffs, v. THE UNITED STATES, Defendant.
• Court: U.S. Claims Court

DOROTHY L. BIERY, et al. and JERRAMY and ERIN PANKRATZ, et al., Plaintiffs, v. THE UNITED STATES, Defendant.

No. 07-693L

No. 07-675L

United States Court of Federal Claims

Filed: June 9, 2011

CONSOLIDATED

Fifth Amendment Takings Clause; Rails-to-Trails; National Trails System Act Amendments of 1983, 16 U.S.C. § 1247(d); Kansas Law; Scope of Railroad Easements; Railroad Easement Abandonment

Mark Fernlund Hearne, II, Clayton, MO, with whom were Meghan S. Largent and Lindsay S.C. Brinton, Clayton, MO, and Debra Albin-Riley, Los Angeles, CA, for plaintiffs.

Kristine Sears Tardiff, U.S. Department of Justice, Concord, NH, with whom were Ignacia S. Moreno, Assistant Attorney General, and Ayako Sato, Washington, D.C., for defendant.

OPINION

FIRESTONE, Judge.

The plaintiffs in these consolidated cases are fourteen Kansas landowners who claim to own the fee interests in land underlying two previously-operating sections of arailroad line.¹ The plaintiffs claim that the defendant ("government") effected a taking of the plaintiffs' fee interest in the railroad corridor when the government approved the conversion of the subject railroad line to a recreational trail pursuant to the "railbanking" provision of the National Trails System Act Amendments of 1983, 16 U.S.C. § 1247(d) ("Trails Act"). The plaintiffs, whose fee interest was encumbered by the railroad right-of-way, claim that, but for the Trails Act, the railroad easements held by the Burlington Northern Santa Fe Railway ("BNSF") over their fee land would have expired now that the easement is no longer being used for train travel. They argue that the government's authorization of a recreational trail within the railroad corridor and continued control over the corridor for potential future rail activation has prevented reversion of the easements to the plaintiffs. The plaintiffs are now seeking just compensation pursuant to the Takings Clause of the Fifth Amendment to the United States Constitution for the alleged taking associated with the government's authorization of railbanking and trail use under the Trails Act.

Pending before the court are the parties' cross-motions for summary judgment asto whether there has been a taking of their property interests by virtue of the government's authorization of railbanking pursuant to the Trails Act. Resolution of these motions requires the court to opine on the scope of the railroad easements under Kansas law.² For the reasons set forth below, the plaintiffs' motions for summary judgment areGRANTED and the defendant's cross-motions for summary judgment are DENIED.

I. BACKGROUND A. The Trails Act

In this court's recent decision in Macy Elevator, Inc. v. United States, No. 09-515L, 2011 WL 1319026 (Fed. Cl. Apr. 7, 2011), the court summarized the general purposes and operation of the Trails Act as follows:

Congress enacted the Trails Act to address the national problem of a reduction in rail tracks. Preseault v. Interstate Commerce Comm'n, 494 U.S. 1, 5 (1990) ("Preseault I"). The Trails Act authorizes the Surface Transportation Board ("STB")³ to preserve railroad corridors or rights-of-way not currently in use for train service for possible future rail use by converting those rights-of-way into recreational trails. Id. at 5-6; 16 U.S.C. § 1241 (2006). In essence, the Trails Act allows a railroad to relinquish responsibility for a rail line by transferring the corridor to an entity that will use it as a recreational trail. Although the corridor is not used as a railroad during the period of interim trail use, it remains intact for potential future use for rail service. This process is called "railbanking."

Macy Elevator, 2011 WL 1319026 at *1 (renumbered footnote in original). The court then explained that STB approval of railbanking and recreational trail use are authorizedin connection with the STB's abandonment approval authority. In particular, the court explained that in cases where a railroad and a trail provider reach an agreement over recreational trail use of the rail line, the STB will retain jurisdiction over the rail corridor and the corridor will be railbanked for possible future rail use. In such cases, the rail corridor will not be returned to the underlying fee owner:

Before a railroad corridor may be converted into a recreational trail, the railroad must either initiate abandonment proceedings with STB under 49 U.S .C. § 10903 (2006) (where the railroad has recently had operating train service) or seek an exemption from the ordinary abandonment procedures under 49 U.S.C. § 10502 (2006) (where the railroad has had no local rail service for at least two years).⁴Caldwell v. United States, 57 Fed. Cl. 193, 195 (2003) ("Caldwell I"), aff'd, 391 F.3d 1226 (Fed. Cir. 2004) ("Caldwell II"). Under either procedure, abandonment of the rail line and right-of-way will not be approved by the STB if a qualified trail provider⁵ submits to the STB arequest to use the right-of-way as a recreational trail. If the trail provider submits a statement of willingness to assume financial and legal responsibility to the STB and the railroad, the STB will, in the case of an operating railroad issue a Certificate of Interim Trail Use or Abandonment ("CITU") which preserves the STB's jurisdiction over the rail corridor while the parties negotiate an Interim Trail Use Agreement. See 49 C.F.R. § 1152.29(c) (2010). In cases involving the exemption procedure, such as the present case, the STB issues a Notice of Interim Trail Use or Abandonment ("NITU"), which also preserves the STB's jurisdiction over the rail corridor, allows the railroad to discontinue operations and remove track and equipment, and affords the railroad and the trail provider 180 days to negotiate a railbanking and interim Trails Act Agreement. Caldwell II, 391 F.3d at 1229-30; Caldwell I, 57 Fed. Cl. at 195; 49 C.F.R. § 1152.29(d). During this period, the railroad will also negotiate an agreement for the transfer of the corridor to the trail operator. [footnote omitted] "If an agreement is reached, the NITU [or CITU] automatically authorizes the interim trail use. If the [STB] takes no further action, the trail sponsor then may assume management of the right-of-way, subject only to the right of a railroad to reassert control of the property for restoration of rail service." Caldwell I, 57 Fed. Cl. at 195 (internal citations omitted); see also 49 C.F.R. § 1152.29(d)(2). If an agreement is not reached, the railroad will be allowed to abandon the line, at which time the STB's jurisdiction over the right-of-way terminates.⁶

Id. (renumbered footnotes in original). If there is no agreement between the railroad and trail operator, the railroad may abandon the line and the STB will no longer have jurisdiction over the rail corridor.

B. Pankratz-Butler County, Kansas⁷

1. Railroad Corridor Acquisition

The property at issue in Pankratz v. United States, No. 07-675L, is a 10.6-mile-long, 100-foot-wide strip of railroad corridor lying between milepost 483.62 in Augusta, Kansas and milepost 494.22 near Andover, Kansas. The corridor was initially acquired largely through condemnation in 1879 by the St. Louis, Wichita & Western Railway Company⁸ pursuant to a charter granted that same year and Kansas statutes.⁹ For one segment of this corridor, the railroad acquired its rights via voluntary conveyance from William and Anna Chase. The Chase deed provides that the grantors convey "a strip of land one hundred feet wide . . . for the purpose of constructing and operating said Railway. . . . Should Railway Company fail or cease to use said land for said purpose or fail to establish the Station and build a depot on [illegible] this grant and said title shall revert back to the undersigned grantors, their heirs or assigns." J.A. A-2, ECF No. 66-1. The parties agree that under Kansas law in effect at the time, the railroad acquired an easement, rather than a fee interest, through its condemnation and the voluntary grant.

2. STB Proceedings and Railbanking

In the mid to late 1990s, BNSF ceased using the right-of-way for active railservice. In January 2002, Butler County acquired the right-of-way from BNSF by a quitclaim deed as part of its desire to restore active rail service. The STB, pursuant to its plenary jurisdiction over such acquisitions, approved the transfer of the right-of-way and trackage. Contrary to its plans, Butler County was unable to locate a railroad operator to restore service on the rail line. On June 15, 2004, Butler County filed a Notice of Exemption with the STB, seeking authority to abandon the line. On July 2, 2004, the STB granted the exemption-effective August 4, 2004-giving the railroad authority to consummate abandonment by removing tracks and equipment. The STB's Environmental Report, which accompanied the Abandonment Exemption, noted, "The Line is stub-ended and, therefore, not capable of handling overhead traffic. The Line has had no traffic in recent years. In addition, no maintenance has been performed on this dormant Line for some time." J.A. B-4, ECF No. 66-2. The STB's historic report noted, "By the mid-1990's, all operations on the Line had ceased. The Line is in poor condition and has not seen any traffic in recent years. In order to restart freight operations, significant rehabilitation would be required." J.A. B-5, ECF No. 66-3.

On July 28, 2004, Prairie Travelers, Inc. late-filed an expression of interest in negotiating a trail use agreement with Butler County pursuant to the Trails Act. Butler County had not yet consummated abandonment of the line by removing the tracks and equipment and agreed to negotiate an agreement. Accordingly, on September 14, 2004, the STB issued a NITU, providing a 180-day period during which the parties couldnegotiate an agreement and the County could remove tracks. Butler County and Prairie Travelers were unable to negotiate an agreement, and the NITU expired by its terms on March 13, 2005. At that time, Butler County was...