Caldwell v. U.S., 03-5152.

Citation391 F.3d 1226
Decision Date14 December 2004
Docket NumberNo. 03-5152.,03-5152.
PartiesWilliam B. CALDWELL, III, and Ben Frank Billings, III, (for themselves and as representative of a class of similarly situated persons), Plaintiff-Appellants, v. UNITED STATES, Defendant-Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Jeffrey O. Bramlett, Bondurant, Mixson & Elmore, LLP, of Atlanta, Georgia, argued for plaintiffs-appellants. With him on the brief were Benjamin E. Fox and Sarah M. Shalf. Of counsel on the brief was James P. Kelly, Kelly Law Firm, P.C., of Atlanta, Georgia.

Kathryn E. Kovacs, Attorney, Appellate Section, Environment and Natural Resources Division, United States Department of Justice, of Washington, DC, argued for defendant-appellee. With her on the brief were Thomas L. Sansonetti, Assistant Attorney General; John Smeltzer, Attorney, of Washington, DC; and Kristine S. Tardiff, Trial Attorney, General Litigation Section, of Concord, New Hampshire. Of counsel on the brief was Evelyn Kitay, Office of the General Counsel, Surface Transportation Board, of Washington, DC.

Before NEWMAN, DYK, and PROST, Circuit Judges.

DYK, Circuit Judge.

Appellants William B. Caldwell, III and Ben Frank Billings, III (collectively "Caldwell") brought a class action lawsuit seeking compensation for an alleged taking pursuant to the National Trail Systems Act (the "Trails Act"), 16 U.S.C. § 1247(d). The Court of Federal Claims held that the appellants' claim was barred under the applicable statute of limitations, 28 U.S.C. § 2501, because it accrued more than six years before the lawsuit was filed. Caldwell v. United States, 57 Fed. Cl. 193 (2003). Because the appellants' claim accrued when the exemption proceedings were halted by the issuance of a Notice of Interim Trail Use or Abandonment ("NITU"), we affirm.


We have previously held that a Fifth Amendment taking occurs when, pursuant to the Trails Act, state law reversionary interests are effectively eliminated in connection with a conversion of a railroad right-of-way to trail use. Preseault v. United States, 100 F.3d 1525, 1543 (Fed.Cir.1996) (en banc) ("Preseault II"); see also Toews v. United States, 376 F.3d 1371, 1376 (Fed.Cir.2004). This case requires us, for the first time, to determine when the Fifth Amendment takings claim accrues for purposes of the six-year statute of limitations under the Tucker Act. 28 U.S.C. § 2501 (2000). The following is a brief summary of the Trails Act, which is described in some detail in Preseault v. Interstate Commerce Commission, 494 U.S. 1, 7-8, 110 S.Ct. 914, 108 L.Ed.2d 1 (1989) ("Preseault I"), the case in which the Supreme Court upheld the constitutionality of the Act under the Commerce Clause.

The Surface Transportation Board (the "STB" or "Board")1 has authority to regulate the construction, operation, and abandonment of most railroad lines in the United States. A railroad seeking to abandon a railroad right-of-way within the jurisdiction of the STB must either: (1) file a standard abandonment application that meets the requirements of 49 U.S.C. § 10903; or (2) seek an exemption, under 49 U.S.C. § 10502.2 If the STB approves a standard abandonment application or grants an exemption and the railroad ceases operation, the STB relinquishes jurisdiction over the abandoned railroad right-of-way and state law reversionary property interests, if any, take effect. See Preseault I, 494 U.S. at 6-8, 110 S.Ct. 914.

The Trails Act, through a process known as "railbanking," provides an alternative to abandoning a railroad right-of-way under sections 10903 and 10502. Section 8(d) of the Trails Act allows a railroad to negotiate with a state, municipality, or private group (the "trail operator") to assume financial and managerial responsibility for operating the railroad right-of-way as a recreational trail.3 Id. at 6-7, 110 S.Ct. 914. If the railroad and the trail operator indicate willingness to negotiate a trail use agreement, the STB stays the abandonment process and issues a notice allowing the railroad right-of-way to be "railbanked." 49 C.F.R. § 1121.4. The effect of the notice, if the railroad and prospective trail operator reach an agreement, is that the STB retains jurisdiction for possible future railroad use and the abandonment of the corridor is blocked "even though the conditions for abandonment are otherwise met." NARPO, 158 F.3d at 139; see also Preseault I, 494 U.S. at 8, 110 S.Ct. 914. Specifically, section 8(d) provides that "such interim use [for trails] shall not be treated, for purposes of any law or rule of law, as an abandonment of the use of such rights-of-way for railroad purposes." 16 U.S.C. § 1247(d). Thus, section 8(d) of the Trails Act prevents the operation of state laws that would otherwise come into effect upon abandonment — property laws that would "result in extinguishment of easements for railroad purposes and reversion of rights of way to abutting landowners." Rail Abandonments — Use of Rights-of-Way as Trails, Ex Parte No. 274 (Sub-No. 13), 2 I.C.C.2d 591, 1986 WL 68617 (1986). A Fifth Amendment taking occurs if the original easement granted to the railroad under state property law is not broad enough to encompass a recreational trail. See Preseault II, 100 F.3d at 1552; see also Toews, 376 F.3d at 1376.

The statute does not specify in detail what procedures are to be followed under the Act. Pursuant to implementing regulations promulgated by the STB (and developed pursuant to notice and comment rulemaking), the typical railbanking process begins when a rail carrier files an abandonment application or, as in this case, a request for an exemption. 49 U.S.C §§ 10903, 10502; see also NARPO, 158 F.3d at 138.

If the STB approves the request for an exemption, it will publish a notice of exemption in the Federal Register. 49 C.F.R. § 1121.4(b) (2004). A potential trail operator may then file a railbanking petition pursuant to 49 C.F.R. § 1152.29(a). Under section 1152.29(a) the petition must include: (1) a map of the right-of-way, (2) a statement indicating that the trail operator will assume financial and legal liability for the right-of-way, and (3) an acknowledgement that the right-of-way may be reactivated for railroad use in the future.4 If the railbanking petition meets these criteria, and the railroad agrees to negotiate with the petitioner and so communicates to the STB within ten days of the filing of the trail use petition, the STB will issue a Notice of Interim Trail Use or Abandonment ("NITU"). 49 C.F.R. §§ 1152.29(b)(2) and (d). This NITU permits the railroad to discontinue service, cancel tariffs, and salvage track and other equipment, "consistent with interim trail use and rail banking" without consummating an abandonment and the NITU extends indefinitely to permit interim trail use once an "agreement" is reached between the railroad and the trail operator. 49 C.F.R. § 1152.29(d)(1).

In some cases, such as that of the recreational trail at issue in Preseault II, an interim trail use agreement may in fact be reached prior to the issuance of the NITU. 100 F.3d at 1549-50. In other cases, however, such as the present case, the NITU is issued after the trail operator and the railroad indicate their intention to negotiate an agreement but prior to the finalization of an agreement.

Only one NITU is issued once the parties indicate their intent to negotiate for conversion of the corridor to trail use. If negotiations go as planned and an agreement is reached, the NITU extends indefinitely for the duration of recreational trail use subject to the trail operator's fulfillment of its agreed-upon obligations. The STB retains jurisdiction for possible future railroad use, and state law reversionary interests that would normally vest upon abandonment are blocked. Preseault I, 494 U.S. at 8, 110 S.Ct. 914. An "escape-clause" is also provided by the NITU such that if no agreement is reached within 180 days, the NITU "automatically converts into an effective ... notice of abandonment," id. at 7 n. 5, 110 S.Ct. 914, which permits the rail carrier to "abandon the line entirely and liquidate its interest." Id. at 7, 110 S.Ct. 914; see also 49 C.F.R. § 1152.29(d)(1). The regulations also allow the parties to request an extension of the negotiating period if more time is necessary to reach a trail use agreement. 49 C.F.R. § 1152.29(e)(1).5


On July 5, 1994, the railroad in this case, Norfolk Southern Railway Company ("Norfolk"), filed a request for an exemption under 49 U.S.C. § 10505 (now § 10502) to abandon 7.4 miles of its railroad line located in Columbus, Georgia. Norfolk did not own this right-of-way in fee simple. Rather, Norfolk owned a railroad right-of-way easement that burdened larger parcels over which the line ran. On July 26, 1994, the STB published a notice of abandonment stating that — absent the filing of a petition to stay, e.g., a railbanking petition — the exemption would become effective August 25, 1994. The city of Columbus, Georgia ("the City") filed a railbanking petition and requested issuance of an NITU on August 15, 1994. After receiving notice from Norfolk indicating the rail carrier's willingness to negotiate a trail use agreement with the City, the STB issued an NITU on August 31, 1994. Before the expiration of the 180-day negotiating period, the City and Norfolk filed a "Joint Motion for an extension of the negotiation period provided in the [NITU]" by an additional 180 days. (J.A. at 399.) The City and Norfolk also requested that the NITU be extended to cover an additional 3.2 miles of railroad line adjacent to the 7.4 miles covered by the original NITU.6 On June 2, 1995, the STB granted both requests. As a result, the proceedings involving the 3.2-mile segment were consolidated with those involving the original 7.4-mile segment, and the NITU negotiating period was extended to August 26, 1995.

On August 17, 1995, Norfolk entered into a purchase and sale agreement...

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