Gregory v. United States

• Decision Date: 12 October 2011
• Docket Number: No. 09-114L,09-114L
• Parties: JOHNNY GREGORY, et al., Plaintiffs, v. THE UNITED STATES, Defendant.
• Court: U.S. Claims Court

JOHNNY GREGORY, et al., Plaintiffs,

v.THE UNITED STATES, Defendant.

No. 09-114L

United States Court of Federal Claims

Filed: October 12, 2011

National Trails System Act, 16 U.S.C. § 1241 (2006); Fifth Amendment Taking Claims; Plaintiffs' Property Interests Under Mississippi Law; Easement or Fee Simple Title; Scope of Easement; Abandonment.

Thomas S. Stewart, with whom were Elizabeth G. McCulley, Brent Baldwin, J. Robert Sears and Steven M. Wald, Baker Sterchi Cowden & Rice, LLC, St. Louis and Kansas City, Missouri, for Plaintiffs.

Joshua A. Doan, with whom was Ignacia S. Moreno, Assistant Attorney General, Environmental & Natural Resources Division, Natural Resources Section, United States Department of Justice, Washington, D.C., for Defendant.

OPINION AND ORDER ON CROSS-

MOTIONS FOR SUMMARY JUDGMENT

WHEELER, Judge.

This case involves a former Mississippi railroad corridor that has been converted into a public recreational trail pursuant to the Trails Act, 16 U.S.C. § 1247(d). Plaintiffs are 257 class members, making 331 claims, each pertaining to a separate parcel of land. Plaintiffs allege that they own a reversionary interest in the corridor taken when the Surface Transportation Board issued a Notice of Interim Trail Use, pursuant to the TrailsAct, authorizing the Railroad¹ to negotiate an agreement to preserve the corridor for future rail service while allowing interim use of the corridor as a public trail. Plaintiffs seek just compensation for a taking of their reversionary interests.

Plaintiffs filed their complaint in this Court on February 24, 2009, and on October 5, 2009, the Court granted Plaintiffs' motion to certify the case as a class action pursuant to Rule 23 of the Rules of the United States Court of Federal Claims ("RCFC"). Between April 8, 2011 and July 21, 2011, the parties filed motions and cross-motions for summary judgment, addressing all 331 claims. On July 22, 2011, the Court suspended further briefing on the motions and cross-motions for summary judgment, and on August 24, 2011, the Court heard oral argument on the parties' motions and cross-motions for summary judgment.

For most of the 331 claims, Plaintiffs contend that the Railroad held an easement in the railroad corridor while Defendant contends the Railroad held fee title. For the reasons set forth below, the Court finds that the Railroad held fee title to those segments of the railroad corridor that it acquired through conveyance deeds. Accordingly, Plaintiffs' motion for summary judgment on the claims related to those deeds is DENIED, and Defendant's motion for summary judgment on those claims is GRANTED.

The Court finds that the Railroad held easements in the segments of the railroad corridor that it acquired by adverse possession and through eminent domain. The Court also finds that the Railroad exceeded the scope of, and abandoned, its easements and that the July 26, 2004 Notice of Interim Trail Use prevented fee title from reverting to the subservient landowners upon abandonment. These subservient landowners suffered a Fifth Amendment taking for which they are entitled to just compensation. Accordingly, Plaintiffs' motion for summary judgment on the claims related to parcels acquired by adverse possession or through eminent domain is GRANTED, and Defendant's motion for summary judgment on those claims is DENIED.

BACKGROUND

A. The Applicable Statutes

By virtue of the Transportation Act of 1920, ch. 91, § 402, 41 Stat. 456, 477-78, a railroad may no longer abandon or discontinue use of its rail line without federal authorization. See Nat'l Ass'n of Reversionary Prop. Owners (NARPO) v. Surface Transp. Bd., 158 F.3d 135, 137 (D.C. Cir. 1998). A railroad may obtain authorization by filing with the Surface Transportation Board ("STB") a standard abandonmentapplication under 49 U.S.C. § 10903 or by seeking an exemption under 49 U.S.C. § 10502. See Caldwell v. United States, 391 F.3d 1226, 1228 (Fed. Cir. 2004).

Until 1983, upon approval of an application or grant of an exemption, federal jurisdiction typically ended, and state law controlled the disposition of the railroad corridor. NARPO, 158 F.3d at 137. Congress altered this state of affairs when it passed the National Trails System Act Amendments (the "Trails Act") in 1983. 16 U.S.C. § 1241 (2006). Under the Trails Act, a railroad seeking to terminate its rail service may offer to negotiate an agreement whereby its corridor can be used as a public recreational trail subject to possible restoration of rail service at a later date ("railbanking"). § 1247(d).

In this way, operation of the Trails Act preempts otherwise applicable state law, and this Court and others have held that it may result in a Fifth Amendment taking requiring just compensation. See Preseault v. I.C.C. ("Preseault I"), 494 U.S. 1, 24 (1990) (O'Connor, J., concurring); Anna F. Nordhus Family Trust v. United States, 98 Fed. Cl. 331 (2011). Whether a taking results depends upon the railroad's state-created property interest. See Preseault I, 494 U.S. at 24. If the railroad acquired fee title to the corridor, then plaintiffs would have no property interest on which to base a Fifth Amendment claim. See Preseault v. United States ("Preseault II"), 100 F.3d 1525, 1533 (Fed. Cir. 1996). By contrast, if the railroad acquired an easement, and the scope of the easement did not encompass railbanking or recreational trail use, then plaintiffs would have a "viable" claim. Id.

Here, the parties dispute whether the Railroad acquired an easement or a fee simple interest in the subject railroad corridor. Thus, the determinative issues in this case are two: (1) did the Railroad acquire an easement or fee simple interest in the subject railroad corridor; and (2) if the Railroad acquired an easement, was the scope of the easement sufficiently broad to encompass railbanking and recreational trail use? See id.

B. Statement of Relevant Facts²

The railroad corridor at issue is 43.2 miles long and runs through Chickasaw, Pontotoc, and Union Counties in northern Mississippi. It extends from milepost 324.2 near New Albany, Mississippi to milepost 281.0 near Houston, Mississippi. Most recently, Mississippi Tennessee Holdings, LLC ("MTH") owned the corridor, and the Mississippi Tennessee Railroad, LLC ("MTR") offered railroad service over the corridor. According to a valuation schedule filed with the Interstate Commerce Commission ("ICC"), predecessors-in-interest to MTH and MTR began acquiring the railroad corridorin the 1880s through a variety of means, including by deeds and judgments, and pursuant to section 3094 of the 1906 Code of Mississippi.

In April 2004, MTH and MTR jointly petitioned the STB to abandon, and discontinue service over, the corridor. In response, on July 26, 2004, the STB issued a Notice of Interim Trail Use ("NITU"), pursuant to the Trails Act, 16 U.S.C. § 1247(d), authorizing the Railroad to negotiate an agreement to allow the corridor to be used as a public recreational trail subject to possible restoration of rail service. The STB issued additional NITUs for the railroad corridor on July 6, 2006 and June 16, 2008. The June 16, 2008 NITU, which vacated the July 6, 2006 NITU, stated that MTH had reached an agreement with GM&O Rails-to-Trails Recreational District of North Mississippi ("GM&O"), transferring the corridor to GM&O for use as a public recreational trail subject to future railroad use. On July 21, 2008, counsel for MTH informed the STB that on July 18, 2008, MTH had conveyed the subject railroad corridor to GM&O "for railbanking and interim recreational trail use" and had "conveyed its right to reinstate rail service over that right-of-way to the Mississippi Transportation Commission."

Plaintiffs are 257 class members who claim that as of July 26, 2004, they owned 331 parcels of land abutting the subject railroad corridor and that the Railroad held an easement in the corridor for limited railroad purposes. They contend that when MTH and MTR sought to abandon, and discontinue service over, the corridor, the Railroad's easement should have ended, and the land should have reverted to them in fee simple. If not for the issuance of the July 26, 2004 NITU, Plaintiffs say they would have had exclusive rights to the land, free of any easement for recreational trail use or future rail service. Plaintiffs seek just compensation from the United States for preventing the abandonment of the easements on their land, thereby effecting a taking of their property.

For its part, Defendant contends that the Railroad held fee title to most segments of the railroad corridor and thus, Plaintiffs possess no property interests on which to base their Fifth Amendment claims. Moreover, Defendant contends that even where the Railroad held easements, interim trail use pending future rail service does not exceed the scope of the easements.

Pending before the Court are the parties' cross-motions for summary judgment on liability. The Court has jurisdiction under the Tucker Act. 28 U.S.C. § 1491(a)(1) (2006). The Court recognizes that Defendant reserves objections on a number of claims as to (1) ownership of a relevant parcel as of July 26, 2004,³ and (2) adjacency of arelevant parcel to the railroad corridor. ⁴ This opinion does not purport to resolve the factual disputes pertaining to those claims and addresses only those issues of liability determined herein.

For the reasons set forth below, the Court finds that the Railroad held fee title to the segments of the railroad corridor that it acquired by deed conveyance. Specifically, the Court finds that the Railroad held fee title to the segments of the railroad corridor pertaining to: (a) all claims in Categories I.A, I.B, and I.C; (b) all claims in Category II (except claims 197, 198, and 199); (c) the portion of claim 233 for which the Fleming deed is the relevant conveyance instrument; (d) all claims in Category III.B; (e) the portion of claim 31 for which the Cooper deed is the...