Brown v. Nhrra

Decision Date16 May 2007
Docket NumberNo. 23989.,23989.
PartiesCharles W. BROWN, Plaintiff and Appellant, v. NORTHERN HILLS REGIONAL RAILROAD AUTHORITY and State of South Dakota, Defendants and Appellees. Karl E. Eisenbacher; Douglas R. Hayes; Kristi Jo Hayes; John R. Miller; Jean Miller; Strawberry Hill Mining Company; Maurice Hoffman; Lawrence County, a political subdivision of the State of South Dakota; and all persons unknown who have or claim to have any interest or estate in or encumbrance upon the premise described in the Complaint or any part thereof, Defendants.
CourtSouth Dakota Supreme Court

Kenneth R. Dewell of Johnson Eiesland Law Offices, Rapid City, South Dakota, Attorneys for plaintiff and appellant.

Thomas E. Brady of Brady Pluimer, P.C., Spearfish, South Dakota, Attorneys for plaintiff and appellees.

MEIERHENRY, Justice.

[¶ 1.] Charles W. Brown sued Northern Hills Regional Railroad Authority, et al. (NHRRA) to quiet title to a railroad right-of-way (ROW) running across his land in Lawrence County, South Dakota. Both the railroad ROW and Brown's land originally were grants from the federal government.

[¶ 2.] The railroad ROW was established by the General Railroad Right-of-Way Act of 1875 (1875 Act) (codified at 43 U.S.C. § 934), which granted right-of-way corridors across public lands to several railroads including the Fremont, Elkhorn, and Missouri Valley Railroad Company (FEMV). Under the provisions of the 1875 Act, FEMV filed a plat and profile of a railroad from Whitewood to Deadwood, South Dakota in the United States Land Office in Rapid City, South Dakota on May 27, 1890. FEMV subsequently conveyed its ROW to Chicago and Northwestern Railway Company (C & NW) by an indenture dated February 28, 1903.

[¶ 3.] Brown's land was transferred from the United States of America by homestead patents in 1918 and 1919 under the Homestead Act of 1862.1 The patents granted the land to the homesteaders subject only to water rights and ditches or canals. The patents specifically reserved these rights as follows:

NOW KNOW YE, That there is, therefore, granted by the United States unto the said claimant the tract of land above described: TO HAVE AND TO HOLD the said tract of land, with the appurtenances thereof, unto the said claimant and to the heirs and assigns of the said claimant forever; subject to any vested and accrued water rights for mining, agricultural, manufacturing, or other purposes, and rights to ditches and reservoirs used in connection with such water rights, as may be recognized and acknowledged by the local customs, laws, and decisions of courts; and there is reserved from the lands hereby granted, a right of way thereon for ditches or canals constructed by the authority of the United States.

(emphasis added).

[¶ 4.] Early in the 1970s, C & NW decided to discontinue operating a railroad on the ROW traversing the Brown land. Accordingly on February 19, 1970, C & NW filed an Application for Abandonment with the Interstate Commerce Commission (ICC), which the ICC approved the following year. The ICC issued a certificate and order declaring that "the present and future public convenience and necessity permit the abandonment" of the portion of the ROW requested by C & NW. The ICC finalized the abandonment on January 18, 1971. All of the tracks were removed and the ROW area has not been used or maintained by C & NW or any other entity since 1971.

[¶ 5.] On May 30, 1972, C & NW quitclaimed any rights in the ROW to the State of South Dakota for $5000. Thirteen years later in 1985, the State quitclaimed its rights to the ROW to South Dakota Game, Fish and Parks (GF & P). Sixteen years later on May 23, 2003, GF & P transferred the ROW to NHRRA.2

[¶ 6.] Brown instituted an action to quiet title in June of 2004.3 Brown claimed that when C & NW ceased using the ROW for railroad services, the ROW was extinguished. The trial court, relying on Barney v. Burlington N. R.R. Co., applied the Abandoned Railroad Right of Way Act of 1922 (1922 Act) (codified at 43 U.S.C. § 912), and concluded that C & NW had not officially abandoned the ROW. 490 N.W.2d 726 (S.D.1992). Following a hearing on cross-motions for summary judgment, the trial court entered an order granting NHRRA, SDDOT and GF & P's Motions for Summary Judgment. Brown raises the following issues on appeal.

ISSUES

1. Does 43 U.S.C. § 912 apply to this action?

2. If 43 U.S.C. § 912 does apply, were all of the requirements met for abandonment in 1970-1971?

3. If 43 U.S.C. § 912 does not apply, has the ROW been abandoned in fact and in law under settled federal and state law?

STANDARD OF REVIEW

[¶ 7.] Our standard of review for a grant of summary judgment is well settled. "[W]e decide only whether genuine issues of material fact exist and whether the law was correctly applied." Johns v. Black Hills Power, Inc., 2006 SD 85, ¶ 4, 722 N.W.2d 554, 556. If we find any legal basis to support the trial court's decision, we affirm. Id. When the facts are undisputed, as in the present case, our review is limited to whether the trial court correctly applied the law. Id.

ANALYSIS

[¶ 8.] Brown does not dispute NHRRA's claim that the 1875 Act established a ROW in favor of the railroad.4

The provision in the 1875 Act which established the railroad easements across public lands provided as follows:

The right of way through the public lands of the United States is granted to any railroad company duly organized under the laws of any State or Territory, except the District of Columbia, or by the Congress of the United States, which shall have filed with the Secretary of the Interior a copy of its articles of incorporation, and due proofs of its organization under the same, to the extent of one hundred feet on each side of the central line of said road; also the right to take, from the public lands adjacent to the line of said road, material, earth, stone, and timber necessary for the construction of said railroad; also ground adjacent to such right of way for station buildings, depots, machine shops, side tracks, turnouts, and water stations, not to exceed in amount twenty acres for each station, to the extent of one station for each ten miles of its road.

43 U.S.C. § 934. Brown acknowledges that the ROW's encumbrance on the land remains until the ROW is extinguished. Brown's basic argument is that the ROW was extinguished when C & NW stopped using the ROW for railroad purposes. Brown argues that 43 U.S.C. § 912 does not apply to the facts of this case because it was not in effect in 1918 and 1919 when the government patents conveyed the property to Brown's predecessors without reserving an interest in the ROWs. Brown argues that we should adopt the reasoning of two recent federal court decisions, which determined that because the land patents were conveyed prior to the enactment of 43 U.S.C. § 912, there was no retained reversionary interest of the United States that would be subject to 43 U.S.C. § 912. See Beres v. U.S., 64 Fed. Cl. 403 (Fed.Cl. 2005); Hash v. U.S., 403 F.3d 1308 (Fed.Cir.2005). Thus, Brown argues that our analysis should center on the language of the original patent and the 1875 Act rather than the language of 43 U.S.C. § 912.

a. Background of Land Grants to Railroads and the 1875 Act

[¶ 9.] Beginning in the 1800s, Congress enacted several bills which explicitly granted public lands to railroad companies to aid the construction of a cross-country railroad. Barney, 490 N.W.2d at 729 (citing Act of Sept. 20, 1850, 9 Stat 466). Pursuant to these bills, "Congress gave generous land grants from the public domain to the railroads to subsidize the costs of the western expansion." Id. The expansion stretched from the 100th meridian from the middle of Nebraska to California. Id. Because of mounting public criticism, the nature of the land grants changed in 1872. Id. "[T]he House of Representatives enacted a resolution condemning its policy of outright land grant subsidies to railroads." Id. (citing Leo Sheep Co. v. U.S., 440 U.S. 668, 99 S.Ct. 1403, 59 L.Ed.2d 677 (1979)). Instead, Congress began to reserve the land for homesteads and educational purposes. Id. Notwithstanding this changed policy, Congress continued to encourage the expansion of the West by enacting the 1875 Act, which authorized ROW grants to railroads. Id. (citing 43 U.S.C. § 934). The United States Supreme Court later concluded that ROWs, granted under the 1875 Act, gave the railroad companies easements, not fee interests, across public lands. Great N. R.R. Co. v. U.S., 315 U.S. 262, 273-74, 62 S.Ct. 529, 533-34, 86 L.Ed. 836 (1942). The United States then transferred much of the underlying lands to homesteaders and others, subject to the railroads' ROWs. In the present case, the FEMV Railroad Company was granted a ROW under the 1875 Act. Also, in 1918 and 1919, Brown's predecessor in interest took the land subject to the ROW.

[¶ 10.] After use of the railway system declined in the early 1920s, Congress enacted statutes to distribute "all right, title, interest, and estate of the United States" in the ROWs to the fee owner of the underlying land when railroads ceased using the ROWs. 43 U.S.C. § 912. Section 912 provided for the continuation of the ROW if "embraced in a public highway legally established within one year after the date of said decree or forfeiture or abandonment."5 Id.

b. Recent Federal Case Law

[¶ 11.] In two recent cases cited by Brown, federal courts have determined that the federal government failed to retain a reversionary interest in the railroad ROWs authorized in the 1875 Act. Beres, 64 Fed.Cl. 403; Hash, 403 F.3d 1308. In Beres, landowners brought suit against the United States alleging that the government had effectuated an uncompensated taking when it sought to convert an abandoned railroad ROW into a recreational trail pursuant to 16 U.S.C. § 1247(d). 64 Fed.Cl. at 407. The court concluded that this was a...

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