Finnigan v. United States
| Citation | 2 F.4th 793 |
| Decision Date | 21 June 2021 |
| Docket Number | No. 19-35922,19-35922 |
| Parties | ESTATE OF Glowdena B. FINNIGAN, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Timothy M. Bechtold (argued), Bechtold Law Firm PLLC, Missoula, Montana, for Plaintiff-Appellant.
Mark Steger Smith (argued), Assistant United States Attorney, United States Attorney's Office, Billings, Montana, for Defendant-Appellee.
Before: Susan P. Graber, Richard R. Clifton, and Sandra S. Ikuta, Circuit Judges.
This case presents the question of whether the United States maintains its reversionary interest over real property granted over 150 years ago to a railroad for use as a right of way, or whether that interest was later ceded to settlers who owned adjoining property. It is "one of those rare cases evoking episodes in this country's history" that bear repeating, lest they be "remembered as dry facts and not as adventure." Leo Sheep Co. v. United States , 440 U.S. 668, 669, 99 S.Ct. 1403, 59 L.Ed.2d 677 (1979).
The Estate of Glowdena B. Finnigan ("Estate") seeks to quiet title to real property that had been granted by the federal government to the Northern Pacific Railroad Company ("Northern Pacific"), but was abandoned many years ago. The right of way traverses land unquestionably owned by the Estate. As will be described in greater detail below, over time Congress changed its policy on how to treat abandoned railroads. The central dispute between the parties is whether the current ownership of the abandoned right of way is controlled by 43 U.S.C. § 912, enacted in 1922, under which title transferred to the adjacent landowners, or by 16 U.S.C. § 1248(c), enacted in 1988, under which the United States retained its reversionary interest in the land. Reviewing the history, the plain text of the statutes, and our precedents, we conclude that the 1988 statute, § 1248(c), applies to this parcel and that the United States retained its reversionary interest. We thus affirm the district court's grant of summary judgment in favor of the United States.
In the early 19th century, the United States acquired the territory we now describe as the American West. The California Gold Rush, prompted by discovery of gold at Sutter's Mill in 1848, heightened interest in transcontinental railroads. Construction of those railroads would be expensive and risky, though. After years of "fruitless exhortation," it was evident that "private investors would not move without tangible governmental inducement." Leo Sheep , 440 U.S. at 671, 99 S.Ct. 1403.
Beginning in 1850, Congress enacted statutes that provided grants of public lands to private railroad companies to subsidize the construction of long stretches of railroads. See Avista Corp. Inc. v. Wolfe , 549 F.3d 1239, 1242 (9th Cir. 2008). In 1860, then-presidential candidate Abraham Lincoln proclaimed that "a railroad to the Pacific Ocean [was] imperatively demanded by the interests of the whole country [and] that the Federal Government ought to render immediate and efficient aid in its construction." J. ELY, RAILROADS AND AMERICAN LAW 51 (2001). The Civil War accelerated efforts to develop a network of railroads to facilitate the transportation of troops and supplies. See Marvin M. Brandt Revocable Tr. v. United States , 572 U.S. 93, 96, 134 S.Ct. 1257, 188 L.Ed.2d 272 (2014).
In 1864, Congress passed the Northern Pacific Railroad Company Land Grant Act, which gave Northern Pacific a right of way through public lands to construct a railroad and telegraph line from the Great Lakes to the Pacific Coast, specifically from Lake Superior in Minnesota to Puget Sound in Washington. Act of July 2, 1864, 13 Stat. 365. The grant included two hundred feet on either side of the railway for "station buildings, workshops, depots, machine shops, switches, side tracks, turn-tables, and water stations[.]" 13 Stat. at 367. The Act also envisioned significant grants of additional public lands to Northern Pacific, which the company could sell to subsidize the construction of the railroad.
See id . In 1883, Northern Pacific completed the railroad and celebrated with a "golden spike" ceremony near Gold Creek, Montana, a place now listed on the National Register of Historic Places. By the time of completion, Northern Pacific had claimed forty-five million acres of land grants, which included 23 percent of present-day North Dakota and 15 percent of Montana. P. GATES, HISTORY OF PUBLIC LAND LAW DEVELOPMENT 372–75 (1968) (" PUBLIC LAND ").1
The right of way at issue in this case is part of an abandoned 20-mile segment of railroad along the south side of the Clark Fork River outside of Noxon, Montana (the "20-mile segment"). Part of that segment runs through the Finnigan property, which itself is entirely within the boundaries of the Kanisku National Forest. The railroad was in use until the 1950s, when Northern Pacific rerouted this stretch of tracks from the south side to the north side of the river in anticipation of the construction of two new hydroelectric dams, the Noxon Rapids Dam and the Cabinet Gorge Dam, which would flood sections of the south side tracks. See Avista , 549 F.3d at 1243–44.2
The Supreme Court considered the legal nature of the right of way granted to Northern Pacific in Northern Pacific Railway Co. v. Townsend , 190 U.S. 267, 23 S.Ct. 671, 47 L.Ed. 1044 (1903). It held that Northern Pacific was granted a "limited fee, made on an implied condition of reverter in the event that the company ceased to use or retain the land for the purpose for which it was granted." Id. at 271, 23 S.Ct. 671. Upon abandonment of the land for railroad use, the right of way would revert to the United States. Id .
After the 1864 grant to Northern Pacific, Congress changed its approach. Until 1871, federal grants generally took the form of "rights of way through the public domain accompanied by outright grants of land[,]" often convened in "checkerboard blocks." Brandt , 572 U.S. at 96–97, 134 S.Ct. 1257 (citing PUBLIC LAND 362–68). The grants gave railroad companies a limited fee property interest, with the United States retaining a right of reverter if the lands were abandoned. That was the regime that applied to the property at issue in this case. See N. Pac. Ry. Co. , 190 U.S. at 271, 23 S.Ct. 671 ; Rio Grande W. Ry. Co. v. Stringham , 239 U.S. 44, 47, 36 S.Ct. 5, 60 L.Ed. 136 (1915).
After 1871, congressional grants of rights of way were limited to easements. See, e.g. , Great N. Ry. Co. v. United States , 315 U.S. 262, 62 S.Ct. 529, 86 L.Ed. 836 (1942) ; Brandt , 572 U.S. at 103, 134 S.Ct. 1257. That distinction carried legal significance. Rights of way previously granted as limited fee interests vested title to the land in the railroad companies but allowed the United States to reclaim the land upon forfeiture or abandonment. Because the United States maintained a reversionary interest, the railroad companies could not voluntarily transfer their interests, nor could third parties acquire title to the land by way of adverse possession. Avista , 549 F.3d at 1242–43. This arrangement effectively kept title to those public lands in the government. However, when Congress changed the nature of the right of way to an easement in 1871, it allowed "full title to that right of way [to] vest in the patentee of the land" upon unilateral abandonment by the railroad company, because that "easement would cease." Brandt , 572 U.S. at 105, 134 S.Ct. 1257 (internal quotation marks omitted).
In 1922, Congress changed the treatment of abandoned tracks when it passed the Abandoned Railroad Right of Way Act, codified in 43 U.S.C. § 912.3 Under that provision, title to the right of way that would otherwise revert to the government could be transferred to the owner of the land traversed by the abandoned railroad, unless the right of way was within a municipality or had been turned into a public highway (the "public highway exception"). See 43 U.S.C. § 912. In particular, the statute provided that a right of way shall be "transferred to and vested in" the adjacent landowner if the railroad company's "use and occupancy of said lands ... 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." Id .4
After Northern Pacific physically abandoned the 20-mile segment in 1958, Avista , 549 F.3d at 1248, several landowners along the right of way sought a judicial decree of abandonment in accordance with § 912, and they ultimately gained title to their respective segments of the abandoned railway. See, e.g. , Bennett v. United States , No. 6262-28 (Sanders Cnty., Mont. Nov 25, 1980); Olson v. Cnty. of Sanders , No. DV-85-37 (Sanders Cnty., Mont. Oct. 13, 1987); Noxon Rural Fire Dist. v. Evans , No. 96-06 (Sanders Cnty., Mont. Nov. 12, 1996).
The Estate's predecessor-in-interest, Lottie Moore Finnigan, did not seek a judicial decree of abandonment at that time or for many years thereafter. Finnigan had acquired a land patent to the land adjacent to Northern Pacific's right of way in 1922, the same year that Congress enacted § 912. It was not until 1996 that the Estate, under successor Glowdena B. Finnigan, brought a quiet title action against Northern Pacific's successor in interest, the Burlington Railroad Company, and Sanders County, where the property is located ("the 1996 case"). See Finnigan v. Burlington N. R.R. Co. & Sanders Cnty. , No. DV-96-46 (Sanders Cnty., Mont. Dec. 10, 1996). The United States was not named as a party to that action.
In the meantime, however, Congress had changed course again. By the 1980s, the struggling railroad industry was abandoning 4,000 to 8,000 miles of railroad per year. In 1983, concerned about the proliferation of abandoned railroads, Congress created a system of "railbanking" to preserve...
To continue reading
Request your trial