Hash v. U.S., 03-1395.

• Decision Date: 04 April 2005
• Docket Number: No. 03-1395.,03-1395.
• Citation: 403 F.3d 1308
• Parties: Robert HASH, Gerlene Hash, William Don Lakey, and Nancy Hawkins, Plaintiffs-Appellants, v. UNITED STATES, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

403 F.3d 1308

Robert HASH, Gerlene Hash, William Don Lakey, and Nancy Hawkins, Plaintiffs-Appellants, v. UNITED STATES, Defendant-Appellee.

No. 03-1395.

United States Court of Appeals, Federal Circuit.

DECIDED: April 4, 2005.

COPYRIGHT MATERIAL OMITTED

Cecilia Fex, Ackerson Kauffman Fex, PC, of Washington, DC, argued for plaintiffs-appellants. With her on the brief was Nels J. Ackerson. Of counsel on the brief was Daniel J. Millea, Zelle, Hofmann, Voelbel, Mason & Gette, LLP, of Minneapolis, Minnesota. Of counsel were John B. Massopust and Timothy W. Regan.

Katherine J. Barton, Deputy Assistant Attorney General, Appellate Section, Environment and Natural Resources Division, United States Department of Justice, of Washington, DC, argued for defendant-appellee. With her on the brief was Kathryn E. Kovacs, Attorney.

Andrea C. Ferster, General Counsel, Rails-to-Trails Conservancy, of Washington, DC, for amicus curiae Rails-to-Trails Conservancy.

Before NEWMAN, LOURIE, and LINN, Circuit Judges.

PAULINE NEWMAN, Circuit Judge.

Robert Hash, Gerlene Hash, William Don Lakey, and Nancy Hawkins bring this class action affecting approximately two hundred Idaho landowners. The landowners appeal those aspects of the decision of the United States District Court for the District of Idaho as were decided adversely to their "taking" claims under the Fifth Amendment,¹ arising from the conversion of a railroad right-of-way to a recreational trail traversing their lands. We reverse in part, vacate in part, and remand for further proceedings.

BACKGROUND

In the early to mid-1800s the United States strongly encouraged railroad construction by private enterprise, through various incentives including the grant to the railroads of substantial amounts of public land. This policy duly fell into disfavor, and was replaced by the less-generous but still incentive-rich policy embodied in the General Railroad Right-of-Way Act of 1875, codified at 43 U.S.C. §§ 934-939 ("the 1875 Act") (repealed in part, Pub.L. 94-579, Title VII § 706(a), 90 Stat. 2793 (1976)). The 1875 Act governed railroad rights of access across public lands for the ensuing century:

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, ..., 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. Section 4 of the 1875 statute provided that

Any railroad company desiring to secure the benefits of sections 934 to 939 of this title, shall ... file with the officer, as the Secretary of the Interior may designate, of the land office for the district where such land is located a profile of its road; and upon approval thereof by the Secretary of the Interior the same shall be noted upon the plats in said office; and thereafter all such lands over which such right of way shall pass shall be disposed of subject to such right of way.

43 U.S.C. § 937.

Concurrently with encouraging the construction of railroads, the nation also encouraged settlement of the western lands through the Homestead Act of 1862, 12 Stat. 392, 43 U.S.C. § 161 (repealed, 90 Stat. 2787 (1976)). The Homestead Act entitled qualifying settlers to acquire up to 160 acres of public land by "enter[ing] one quarter-section or a less quantity of unappropriated public lands." 43 U.S.C. § 161. Land patents were duly granted by the Interior Department for lands settled pursuant to the Homestead Act.

Many railroad lines were built in the latter 1800s and early 1900s. Then, with the development of motor transport, rail traffic diminished, and since 1920 almost half of the nation's 270,000 miles of rail lines have gone out of use. The National Trails System Act Amendments of 1983, codified as amended at 16 U.S.C. §§ 1241-51, provides for the preservation of discontinued railway rights-of-way, by "banking" the rights-of-way for possible future reactivation; the Trails Act authorizes interim use of the rights-of-way as recreational trails.

The rights-of-way here at issue carried the Pacific and Idaho Northern Railroad Co. ("the Railroad"), a line constructed between 1899 and 1911. In 1995 the Interstate Commerce Commission authorized the Railroad to discontinue part of its operation in Idaho, and in December of that year the 83.1 mile stretch here at issue was authorized to be converted to use as a recreational trail.

It is no longer subject to question that the United States may by legislative act prevent reversion of discontinued railway rights-of-way, and authorize their interim use as recreational trails. See Preseault v. Interstate Commerce Comm'n, 494 U.S. 1, 110 S.Ct. 914, 108 L.Ed.2d 1 (1990). The questions here raised relate to the consequences of these actions for the owners of the land traversed by the right-of-way. Specific to the case before us, there arise questions involving federal and state laws governing easements, fee interests, and reversionary rights. These questions require determination of the interests of the Railroad, these landowners, and the federal government, as to various segments of this Railroad's right-of-way and the land it traverses.

The Railroad acquired the segments of right-of-way here at issue between 1899 and 1905, traversing both public and private lands. The appellants argue that the right-of-way across their lands was simply an easement for railway use, and that when the Railroad abandoned such use the easement would have reverted to them as owners of the servient estate, but for the 1983 provisions of the Trails Act. Thus they claim that the conversion to a recreational trail was a taking of their property, for which they are due just compensation. In Preseault v. ICC, 494 U.S. 1, 110 S.Ct. 914, 108 L.Ed.2d 1, the Court held that if abandonment of railway use and application of the Trails Act effects a taking when the easement would otherwise revert to the owner of the servient estate, the landowner may sue for compensation under the Tucker Act. 494 U.S. at 4-5, 110 S.Ct. 914 ("We find it unnecessary to evaluate the merits of the takings claim because we hold that even if the rails-to-trails statute gives rise to a taking, compensation is available to petitioners under the Tucker Act, 28 U.S.C. § 1491(a)(1) (1982 ed.), and the requirements of the Fifth Amendment are satisfied.") See also Preseault v. United States, 100 F.3d 1525 (Fed.Cir.1996) (en banc) (applying state law of reverter to determine rights of the owner of the servient estate).

The appellants are successors to homesteaders who were granted land patents pursuant to the Homestead Act of 1862. Some of the original owners were granted their land after the Railroad had acquired its right-of-way pursuant to the 1875 Act, while the land was public land. Some of the original owners were granted their land before the Railroad obtained the right-of-way traversing that land; these segments of the right-of-way were conveyed by the landowners to the railroad on a variety of terms and conditions. And some segments of the right-of-way are devoid of documentation, whereby the parties agreed that these rights would be determined under the Idaho law of adverse possession.

This appeal is taken under Fed.R.Civ.P. 54(b) from suit in the district court brought under the Little Tucker Act, 28 U.S.C. § 1346(a)(2), and is appealed in accordance with 28 U.S.C. § 1295(a)(2). The district court's rulings on constitutional and statutory construction are given plenary review, see Romero v. United States, 38 F.3d 1204, 1207 (Fed.Cir.1994), as are the district court's constructions of state law, Abbott Labs. v. Brennan, 952 F.2d 1346, 1355 (Fed.Cir.1991). Findings of fact by the district court are reviewed on the clearly erroneous standard. Allen Engineering Corp. v. Bartell Indus., Inc., 299 F.3d 1336, 1344-45 (Fed.Cir.2002).

DISCUSSION

The primary issue is whether the claimant landowner owns the estate underlying the Railroad right-of-way, or whether the underlying estate never left its ownership by the United States, or whether the estate was deeded in fee to the Railroad.

At the district court's request, the parties divided the plaintiff class into categories based on the different mechanisms and legal forms whereby the Railroad acquired the various segments of the 83.1 miles of right-of-way. There were initially fourteen categories, not all of which are involved in this appeal. Category 1 is for those landowners who obtained their land, pursuant to the Homestead Act, after the Railroad had acquired its right-of-way traversing then-public land pursuant to the 1875 Act. All of the other categories relate to landowners who already owned the land before the Railroad obtained a right-of-way traversing it. The district court summarized its decision as follows:

(1) the United States held a reversionary interest in the rights of way in Category 1; (2) the interests conveyed in Categories 2 and 3 reverted back to the grantors; (3) the Railroad acquired fee simple title to deeds in Categories 4 and 7; (4) the deeds in Categories 5, 6, and 8 conveyed fee title to the Railroad; (5) the Railroad was not prevented from acquiring fee title to deeds in Categories 9 and 14; and (6) the Railroad acquired fee title to lands adversely possessed in Category 10.

Hash v. United States, Order of Mar. 10, 2003 at 2 n. 1.

Category 1

For this category the Railroad obtained the right-of-way over public lands before any transfer of...