Estate of Finnigan v. United States

• Decision Date: 25 October 2019
• Docket Number: CV 18-109-M-DLC-KLD
• Parties: ESTATE OF GLOWDENA B. FINNIGAN, Plaintiff, v. UNITED STATES OF AMERICA, Defendant.
• Court: U.S. District Court — District of Montana

ESTATE OF GLOWDENA B. FINNIGAN, Plaintiff, v. UNITED STATES OF AMERICA, Defendant.

CV 18-109-M-DLC-KLD

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MONTANA MISSOULA DIVISION

October 25, 2019

ORDER

On June 18, 2019 United States Magistrate Judge Jeremiah C. Lynch entered his Findings and Recommendation recommending that Plaintiff Estate of Glowdena Finnigan's Motion for Summary Judgment (Doc. 16) be denied. (Doc. 31.) The Estate objects and is therefore entitled to de novo review of those findings and recommendations to which it specifically objects. 28 U.S.C. § 636(b)(1)(C). This Court reviews for clear error those findings and recommendations to which no party objects. United States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003); Thomas v. Arn, 474 U.S. 140, 149 (1985). Clear error exists if the Court is left with a "definite and firm conviction that a mistake has been committed." United States v. Syrax, 235 F.3d 422, 427 (9th Cir. 2000) (citations omitted). For the reasons explained, the Findings and Recommendation is adopted in full.

BACKGROUND

The Estate seeks to quiet title to a stretch of riverfront land once used by the Northern Pacific Railroad Company ("Northern Pacific"). In the early nineteenth century, this land belonged to the United States. "Beginning in 1850, Congress passed a series of statutes granting public lands to private railroad companies to spur the construction of a cross-country railroad." Avista Corp. Inc. v. Wolfe, 549 F.3d 1239, 1242 (9th Cir. 2008). In 1864, Congress enacted the Northern Pacific Railroad Company Land Grant Act, which gave Northern Pacific a right of way to construct a railroad from Lake Superior to the Puget Sound, including two hundred feet on either side of its tracks. Id. In legal terms, Northern Pacific held this land in the form of a limited fee, and the United States retained a reversionary interest should the land ceased to be used for railroad purposes. Vieux v. E. Bay Reg'l Park Dist., 906 F.2d 1330, 1332 (9th Cir. 1990). In the 1880s, Northern Pacific constructed its railroad through western Montana. The property at issue is a stretch of land along the southside of the Clark Fork River outside of Noxon, Montana.

In 1922, the Estate's predecessor-in-interest acquired a land patent under the Homestead Act of 1862, which included land embraced by Northern Pacific's right of way. That same year, Congress enacted the Abandoned Railroad Right of Way Act ("Abandoned Railroad Act" or § 912) at 43 U.S.C. § 912 which redirected the transfer of "abandoned railroad lands to which the United States held a right ofreverter." Id. at 1243. The Abandoned Railroad Act provides that, upon abandonment, rights of way pass to the owner of the land traversed by the right of way instead of the United States. 43 U.S.C. § 912. For the landowner to acquire legal title under § 912, "the railroad must (1) cease 'use and occupancy' of the rights of way and (2) abandonment must be 'declared or decreed' by a court of competent jurisdiction[.]" Avista Corp. v. Sanders County, 485 F. Supp. 2d 1176, 1185-87 (D. Mont. 2007) overruled on other grounds by Avista Corp. Inc., 549 F.3d 1239. The Act also contains a public highway exception that prevents transfer of title to the landowner in the event a public highway is constructed along the abandoned right of way. 43 U.S.C. § 912.

In the 1950s, Northern Pacific retired roughly 20 miles of railroad along the Clark Fork River ("the 20-mile segment"), including the stretch that traversed the Finnigan property. Northern Pacific rerouted this segment from the southside to the northside of the river in anticipation that the Washington Water Power Company's construction of two hydroelectric dams would flood sections of the southside tracks. In the years that followed, several of the Estate's neighboring landowners quieted title to property along the southside right of way. (See Docs. 1-3; 1-4.)

Then, in 1988 Congress enacted the National Trails System Improvements Act ("Improvements Act" or § 1248(c)). 16 U.S.C. § 1248(c). The Act did notrepeal the Abandoned Railroad Act, however, it designated that the United States would, once again, retain title to "any and all right, title, [and] interest . . . in all rights of way of the type described" in the Abandoned Railroad Act. Id.

This case presents a question of whether the Abandoned Railroad Act (directing title to private landowners) or the Improvements Act (directing title to the United States) governs disposition of the Estate. (Doc. 31 at 17.)

LEGAL STANDARD

"The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The movant bears the initial burden of informing the Court of the basis for its motion and identifying those portions of "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (internal quotation marks omitted). The movant's burden is satisfied when the documentary evidence produced by the parties permits only one conclusion. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986). Where the moving party has met its initial burden, the party opposing the motion "may not rest upon the mere allegations or denials of his pleading, but . . . must set forth specific factsshowing that there is a genuine issue for trial." Id. at 248 (internal quotation marks omitted).

DISCUSSION

In his Findings and Recommendation, Judge Lynch correctly determined that (1) the Estate properly invoked the United States' waiver of sovereign immunity; (2) this action is not barred by the statute of limitations; and (3) that the United States is not collaterally estopped from disputing the Estate's claim to title.¹ (See Doc. 31 at 6-16.) Judge Lynch also determined that the Improvements Act controlled disposition of the property. For this reason, he recommended that the Estate's Motion for Summary Judgment be denied.² (Doc. 31 at 18-19.) The Estate objects to the determination that the Improvements Act governs, which entitles it to de novo review of that question.

The Estate argues that its motion for summary judgment should be granted for either of two reasons: (1) the Improvements Act does not apply to past abandonments—and the right of way here was abandoned in 1958; and (2) even if the Improvements Act applies, the prior judicial decree of abandonment in the1980 Bennett case had the legal effect of transferring title to all neighboring landowners along the 20-mile segment. (Doc. 33 at 3.)

I. Whether the Improvements Act applies to physical abandonments that occurred prior to 1988.

The Ninth Circuit has not addressed the scope of the Improvements Act. See Avista Corp. Inc., 549 at 1251 n.12. In Avista Corporation, the Ninth Circuit resolved an ownership dispute over property along the same 20-mile segment and determined that Northern Pacific had ceased its use and occupancy of the line in 1958. Id. at 1243, 1247, 1249. Even though the action was brought in 2006, well after enactment of the Improvements Act, the parties did not raise or brief how § 1248(c) governed disposition of the right of way. Id. at 1251 n.12. The court noted that "whether § 912 applies to declarations of abandonment issued after the effective date of the National Trails System Improvements Act" was an open question. Id. However, because the court determined that disposition of the land implicated the public highway exception,³ and both § 912 and § 1248(c) contained such an exception, the court was able to resolve the dispute without answering whether § 912 or § 1248(c) applied. Id.

The Estate urges the Court to conclude that the Improvements Act applies only to abandonments that occur, as a factual matter, after the date of enactment. In a nutshell, it asserts that the legislative history,⁴ the prior stance taken by the government in the Noxon Fire case—a quiet title action to property along the same 20-mile segment,⁵ and general principles of fairness support this view.

Despite the proliferation of abandoned railroad tracks across the country, there are only a handful of court decisions disposing of title under § 912 and even fewer decisions that address title disputes after enactment of the Improvements Act. See Samuel C. Johnson 1988 Tr. v. Bayfield Cty., Wis., 649 F.3d 799, 806 (7th Cir. 2011); see, e.g., Samuel C. Johnson 1988 Tr. v. Bayfield Cty., WI, 470 F. Supp. 2d 958, 959 (W.D. Wis. 2007), vacated sub nom. Samuel C. Johnson 1988 Tr. v. Bayfield Cty., Wis., 520 F.3d 822 (7th Cir. 2008). Nevertheless, the question posed by the Estate is answered by the text of § 1248(c).

Section 1248(c) plainly applies to any and all rights of way retained by the United States as described in § 912 after 1988.⁶ Under § 912, the United States retains an interest in an abandoned right of way until: (1) the railroad has ceased its "use and occupancy" of the right of way and (2) abandonment has been "declared or decreed" by a court of competent jurisdiction or congressional act. Vieux, 906 F.2d at 1337. "Actual" or "physical" abandonment occurs when a railroad ceases its "use and occupancy" of a line. Avista Corp. Inc., 549 F.3d at 1247. This is a factual inquiry that invokes common law principles of abandonment. Vieux, 906 F.2d at 1338; Avista Corp. Inc., 549 F.3d at 1248. After "actual abandonment" the railroad's interest terminates but the landowner does not obtain title. Id. The landowner's interest is merely a non-vested "inchoate reversionary interest" that hangs in suspension, waiting for a court decree or act of Congress to declare the right of way abandoned. Avista Corp. Inc., 549 F.3d at 1247. As such, the landowner's inchoate reversionary interest does not extinguish any interest held by the United...