Ingram v. United States

• Decision Date: 24 May 2012
• Docket Number: No. 10-463L,10-463L
• Parties: CRAIG R. INGRAM, et al., Plaintiffs, v. UNITED STATES, Defendant.
• Court: Court of Federal Claims

CRAIG R. INGRAM, et al., Plaintiffs,
v.
UNITED STATES, Defendant.

No. 10-463L

United States Court of Federal Claims

Filed: May 24, 2012

Fifth Amendment Taking; Rails- to-Trails; Valuation.

Mark F. Herne, II, Arent Fox LLP, Clayton, Mo. for the plaintiffs. With him were Lindsay S.C. Brinton and Meghan S. Largent, Arent Fox LLP, Washington, D.C., and Debra J. Albin-Riley and Joseph L. Cavinato, III, Arent Fox LLP, Los Angeles, Ca.

Peter C. Whitfield, Trial Attorney, Natural Resources Section, Environment and Natural Resources Division, United States Department of Justice, Washington, D.C., for the defendant. With him was Ignacia S. Moreno, Assistant Attorney General, Environment and National Resources Division.

OPINION

HORN, J.

FINDINGS OF FACT

The plaintiffs, who claim property interests along a rail line in Beaufort County, South Carolina, filed a complaint in the United States Court of Federal Claims alleging that the government caused uncompensated takings of their property interests pursuant to the Fifth Amendment to the United States Constitution. The rail line at issue in the above captioned case is the former Port Royal Railroad line, extending twenty-five miles between milepost AMJ-443.26 in Yemassee, South Carolina, to milepost AMJ-468.31 in Port Royal, South Carolina. The plaintiffs allege that the government effected the takings by allowing the conversion of railroad easements across their properties from rail use to trail use. The plaintiffs premise their claim on the United States Department of Transportation Surface Transportation Board's (STB) issuance of a Notice of Interim Trail Use (NITU) pursuant to the National Trails System Act (Trails Act), 16 U.S.C. §§ 1241-51 (2006).

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In 1857, in the Port Royal Railroad Charter, the State of South Carolina granted the Port Royal Railroad Company (the Port Royal Railroad) the authority to condemn land to operate a railroad, pursuant to "An Act to Charter the Port Royal Railroad Company." The Port Royal Railroad Charter read, in pertinent part:

Be it enacted by the Senate and House of Representatives, now met and sitting in General Assembly, and by the authority of the same, That for the purpose of establishing a communication by railroad from the waters of Port Royal Harbor, in the neighborhood of Beaufort, to some point on the Savannah River, passing near the Salcahatchie Bridge, the formation of a corporate Company is hereby authorized, to be called "The Port Royal Railroad Company"
....That the said Company is hereby authorized to construct a railroad from the waters of Port Royal Harbor, in the neighborhood of Beaufort, to some point on the Savannah River, passing near the Salcahatchie Bridge, by a route to be determined by the said Company, after the same shall have been formed.
....[A]ll the powers and privileges granted by the Charter of the Spartanburg and Union Railroad Company,¹ shall be, and are hereby granted to the

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Port Royal Railroad Company, subject to the conditions therein contained, except in so far as the special provisions of this Act may require the same to be modified or varied.
That all questions concerning the right of way for said railroad, where the Company and the land owners cannot agree touching the same, shall be determined in the same manner as is provided by the tenth section of an Act, entitled "An Act to authorise [sic] the formation of the Greenville and Columbia Railroad Company," ratified on the fifteenth day of December, in the year of our Lord one thousand eight hundred and forty-five, for determining questions of right of way for said railroad.

In 1870, the South Carolina legislature amended the Port Royal Railroad Charter to extend the permissible amount of time to complete the railroad and to lengthen the life of the charter by fifty years. The Port Royal Railroad subsequently acquired portions of the rail line without the benefit of recorded instruments from the original landowners.

In addition to acquiring easements for portions of the rail line at issue in this case without the benefit of recorded instruments from landowners through condemnation, the Port Royal Railroad also acquired easements from certain landowners by written conveyances. Four portions of the Port Royal Railroad line established by conveyance also are at issue in the above captioned case. On May 27, 1870, William Fuller conveyed a right of way to the Port Royal Railroad (the Fuller deed). On July 23, 1870, Benjamin Mack conveyed a right of way to the Port Royal Railroad (the Mack deed). On May 1, 1873, Daniel F. Appleton conveyed an easement to the Port Royal Railroad (the Appleton deed). George Waterhouse and Anna S. Mulford conveyed a right of way to the Port Royal and Augusta Railway Company (the Mulford-Waterhouse deed), dated July 12, 1881.

The Port Royal Railroad merged into the Seaboard System Railroad, Inc. (Seaboard) and acquired the rights of way. In 1984, at Seaboard's request, the Interstate Commerce Commission² authorized Seaboard to abandon the rights of way. See Beaufort R.R. Co.—Modified Rail Certificate, STB Finance Docket No. 34943, 2008 WL 727785, at *1 (S.T.B. Mar. 18, 2009). Seaboard, however, did not abandon the rights of way, instead it transferred its interests in the line to the South Carolina State

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Ports Authority (Ports Authority). See id.; see also Beaufort R.R. Co.—Modified Rail Certificate, STB Finance Docket No. 34943, 2009 WL 1416460 (S.T.B. May 19, 2009). The Ports Authority then leased the rights of way to the South Carolina State Ports Commission, which is currently part of the State of South Carolina Division of Public Railways. See Beaufort R.R. Co.—Modified Rail Certificate, STB Finance Docket No. 34943, 2008 WL 727785, at *1. From 1985 to 2003, Tangent Transportation Company, Inc. (Tangent), a wholly owned subsidiary of the South Carolina State Ports Commission, operated the rail line pursuant to a modified certificate.³ See id.

Tangent gave notice to the STB in 2003 that it intended to terminate service over the rail line due to Port Royal's closed port. In December 2006, however, Beaufort Railroad Company, Inc. (Beaufort Railroad), a subsidiary of the South Carolina Division of Public Railways, notified the STB that it would reactivate rail service along the rail line pursuant to a new modified certificate, which the STB issued that month.⁴ See Beaufort R.R. Co.—Modified Rail Certificate, STB Finance Docket No. 34943, 2009 WL 2170143 (S.T.B July 20, 2009). On July 16, 2008, Beaufort Railroad filed a notice of intent to terminate service over the entire rail line pursuant to the modified certificate that the STB had issued in 2006.

Subsequently, the Ports Authority and the Beaufort-Jasper Water and Sewer Authority (BJWSA) filed a joint request for a NITU, and informed the STB that the parties had entered into a "rail banking/interim trail use agreement, contingent upon the issuance of a NITU." Beaufort R.R. Co.—Modified Rail Certificate, STB Finance Docket No. 34943, 2009 WL 1416460, at *7. On May 20, 2009, the STB issued the NITU, which authorized the Ports Authority to negotiate a final trail use agreement with the BJWSA. The interim trail use/railbanking agreement, executed May 30, 2008, stated:

WHEREAS PURCHASER [the BJWSA] seeks to purchase, pursuant to the National Trails System Act, 16 U.S.C. §1247(d), all of SELLER's [the Ports Authority's] right, title and interest in all portions of the following rail

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corridors and all track structures approximately situated between the following mileposts: AMJ-443.37 to AMJ-468.31, including, but not limited to all bridges, culverts, track materials and appurtenances, except as otherwise excluded as provided herein.

The interim trail use/railbanking agreement continued:

In consideration of the foregoing premises and the mutual covenants and agreements herein contained, the SELLER agrees to sell to the PURCHASER and the PURCHASER agrees to purchase from the SELLER as is and by quit-claim, on the terms and conditions hereinafter set forth, all of such right, title and interest that SELLER may have in the Property located in Beaufort County...together with and including all rails and improvements located thereon and all rights of SELLER to operate a railroad on, upon and across said Property, but excluding any parcels contiguous with the said railroad corridor which are not themselves part of the corridor....

On November 5, 2009, the Ports Authority quitclaimed its interest in the rail line to the BJWSA. The quitclaim deed impacted the twenty-five linear miles of rail line between Yemassee, South Carolina and Port Royal, South Carolina. The quitclaim deed stated that the conveyance was:

subject to and in conformance with (i) the provisions of the National Trails System Act, 16 U.S.C. Section 1247(d); and (ii) the Contract to Purchase and interim Trail Use/Railbanking Agreement between the parties dated May 30, 2008, as amended, which is incorporated herein by reference, has remised, released and forever quit-claimed, and by these presents does hereby remise, release and forever quit-claim unto the said Grantee [BJWSA] all of its right, title and interest in and to the following described property....

By conveying the rail line...