Jenkins v. United States

• Decision Date: 20 December 2011
• Docket Number: No. 09-241L,09-241L
• Parties: STEVEN JENKINS, et al., Plaintiffs, v. THE UNITED STATES, Defendant.
• Court: U.S. Court of Appeals — District of Columbia Circuit

STEVEN JENKINS, et al., Plaintiffs,

v.THE UNITED STATES, Defendant.

No. 09-241L

United States Court of Federal Claims

Filed: December 20, 2011

Fifth Amendment Takings Clause; Rails-to-Trails; National Trails System Act Amendments of 1983, 16 U.S.C. § 1247(d); Iowa Law; Scope of Railroad Easement Conveyed by Deed; Extent of Government's Taking Liability

Thomas S. Stewart, Kansas City, MO, for plaintiffs. Elizabeth G. McCulley, Kansas City, MO, and Brent W. Baldwin, Steven M. Wald, and J. Robert Sears, St. Louis, MO, of counsel.

Frank J. Singer, United States Department of Justice, Washington, DC, with whom was Ignancia S. Moreno, Assistant Attorney General, for defendant.

OPINION

FIRESTONE, Judge.

This lawsuit involves two rail line segments constructed in Dallas County, Iowa, known as the Perry Subdivision. The first segment runs approximately 21 miles from Waukee, Iowa to Perry, Iowa, and was constructed by the Des Moines Valley Railroad Company. The second segment runs approximately 7 miles from Perry, Iowa to Dawson, Iowa, and was constructed by the Chicago, Milwaukee, and St. Paul Railway Company. This lawsuit involves approximately 241 parcels along the Perry Subdivision.

The plaintiffs in this class action are landowners who claim to own a fee interest in land underlying the Waukee-to-Perry segment of the Perry Subdivision, previously operated by the Des Moines Valley Railroad Company and its successor-in-interest, Union Pacific. Plaintiffs claim that the defendant ("the government") affected a taking of their reversionary interest in the railroad right-of-way easements when the government approved the conversion of the subject rail line to a recreational trail pursuant to the "railbanking" provision of the National Trails System Act Amendments of 1983, 16 U.S.C. § 1247(d) (2006) ("Trails Act"). Pls.' Mem. in Supp. of Mot. for Partial Summ. J. on Liability ("Pls.' Mem.") at 1-3, ECF No. 44. Plaintiffs are now seeking just compensation under the Takings Clause of the Fifth Amendment for the alleged taking associated with the government's actions under the Trails Act. Id. at 1.

Pending before the court are the parties' cross motions for summary judgment as to whether there has been a taking of plaintiffs' property interests. For the reasons discussed below, plaintiffs' motion for partial summary judgment is GRANTED, and the defendant's cross motion for partial summary judgment is DENIED.

I. BACKGROUND

A. The Trails Act and Relevant Regulatory Framework

This court's recent decision in Macy Elevator, Inc. v. United States, 97 Fed. Cl. 708 (2011), summarized the general purposes and operation of the Trails Act as follows:

Congress enacted the Trails Act to address the national problem of a reduction in rail tracks. Preseault v. Interstate Commerce Comm'n, 494 U.S. 1, 5 (1990) ("Preseault I "). The Trails Act authorizes the Surface Transportation Board("STB")¹ to preserve railroad corridors or rights-of-way not currently in use for train service for possible future rail use by converting those rights-of-way into recreational trails. Id. at 5-6; 16 U.S.C. § 1241 (2006). In essence, the Trails Act allows a railroad to relinquish responsibility for a rail line by transferring the corridor to an entity that will use it as a recreational trail. Although the corridor is not used as a railroad during the period of interim trail use, it remains intact for potential future use for rail service. This process is called "railbanking."

Macy Elevator, 97 Fed. Cl. at 711 (footnotes renumbered from original). The STB's approval of railbanking and recreational trail use are authorized in connection with the STB's abandonment approval authority. Caldwell v. United States, 391 F.3d 1226, 1228-29 (Fed. Cir. 2004). In cases where a railroad and a trail operator reach an agreement for recreational trail use of the rail line, the STB will retain jurisdiction over the rail corridor and the corridor will be railbanked for possible future rail use. Id. at 1229. In such cases, the rail corridor will not be returned to the underlying fee owner:

Before a railroad corridor may be converted into a recreational trail, the railroad must either initiate abandonment proceedings with STB under 49 U.S.C. § 10903 (2006) (where the railroad has recently had operating train service) or seek an exemption from the ordinary abandonment procedures under 49 U.S.C. § 10502 (2006) (where the railroad has had no local rail service for at least two years).²

Caldwell v. United States, 57 Fed. Cl. 193, 195 (2003) ("Caldwell I"), aff'd, 391 F.3d 1226 (Fed. Cir. 2004) ("Caldwell II"). Under either procedure, abandonment of the rail line and right-of-way will not be approved by the STB if a qualified trail provider³ submits to the STB a request to use the right-of-way as a recreational trail. If the trail provider submits a statement of willingness to assume financial and legal responsibility to the STB and the railroad, the STB will, in the case of an operating railroad, issue a Certificate of Interim Trail Use or Abandonment ("CITU") which preserves the STB's jurisdiction over the rail corridor while the parties negotiate an Interim Trail Use Agreement. See 49 C.F.R. § 1152.29(c). In cases involving the exemption procedure, such as the present case, the STB issues a Notice of Interim Trail Use or Abandonment ("NITU"), which also preserves the STB's jurisdiction over the rail corridor, allows the railroad to discontinue operations and remove track and equipment, and affords the railroad and the trail provider 180 days to negotiate a railbanking and interim Trails Act Agreement. Caldwell II, 391 F.3d at 1229–30; 49 C.F.R. § 1152.29(d). During this period, the railroad will also negotiate an agreement for the transfer of the corridor to the trail operator. [footnote omitted] "If an agreement is reached, the NITU [or CITU] automatically authorizes the interim trail use. If the [STB] takes no further action, the trail sponsor then may assume management of the right-of-way, subject only to the right of a railroad to reassert control of the property for restoration of rail service." Caldwell I, 57 Fed.Cl. at 195 (internal citations omitted); see also 49 C.F.R. § 1152.29(d)(2). If an agreement is not reached, the railroad will be allowed to abandon the line, at which time the STB's jurisdiction over the right-of-way terminates.⁴ Macy Elevator, 97 Fed. Cl. at 711 (footnotes renumbered from original).

B. Undisputed Facts

1. The NITU and Trail Use Agreement in This Case

In this case, interim trail use was authorized by a NITU issued according to the Trails Act regulatory framework. On July 7, 2004, Union Pacific submitted a petition to the STB, requesting exemption for the abandonment of the Perry Subdivision. Pls.' Proposed Findings of Uncontroverted Fact ("Pls.' Proposed Findings"), Ex. B at 1, ECF No. 49-9. The Perry Subdivision runs from milepost 296.8 near Waukee, Iowa to milepost 275.9 (Equation milepost 275.9 = 361.8) near Perry, Iowa, and from milepost 361.8 to milepost 369.0 near Dawson, Iowa. Id., Ex. B at 1, 7. The rail line travels a total of 28.1 miles within Dallas County, Iowa. Id., Ex. B at 7. As noted above, only the segment of the rail line from milepost 296.8 to milepost 275.9—from Waukee, Iowa to Perry, Iowa ("Des Moines Valley right-of-way")—is at issue here. Def.'s Cross-Mot. & Resp. ("Def.'s Cross-Mot.") at 6, ECF No. 58.

In response to Union Pacific's exemption petition, the Iowa Natural Heritage Foundation ("Foundation") filed a petition with the STB indicating that it was interested in negotiating a trail use agreement with Union Pacific. Pls.' Proposed Findings, Ex. C. Union Pacific responded that it was willing to negotiate a trail use agreement with the Foundation. Id., Ex. D. Based on this mutual interest, the STB issued a NITU for the Perry Subdivision on October 25, 2004. Id., Ex. E. After several extensions of the negotiation period, the Foundation, by letter dated January 28, 2008, notified the STB that a trail use agreement between it and Union Pacific had been reached. Id., Ex. F.

2. The Original Railroad Conveyances and the Present Landowners

Plaintiffs in this action allege a Fifth Amendment Taking based on their property rights in the Perry Subdivision right-of-way established in the late nineteenth century. Beginning in the 1860s, the Des Moines Valley Railroad Company obtained property rights in conjunction with its construction of the Des Moines Valley right-of-way through a combination of voluntary conveyances and condemnation. See, e.g., Pls.' Proposed Findings ¶ 147.a; id., Ex. II.1, ECF No. 49-8 (example of a Des Moines Valley right-of-way deed); id. ¶ 146.a; id., Ex. I.1, ECF No. 49-7 (example of a condemnation proceedings report for the Des Moines Valley right-of-way). For voluntary conveyances along the rail line, the railroad company used a standard form of a right-of-way deed:

[Grantors] hereby sell and convey to the Des Moines Valley Rail Road Company, a corporation duly organized under the laws of the State of Iowa, the right of way for railroad as the same is located said right of way to be one hundred feet in width to be used for a single or double track for said railroad and for any other Rail Road purposes or uses over and across the following described tract in the County of Dallas and State of Iowa, [legal description of the property].

See, e.g., id., Ex. II.1, ECF No. 49-8. The government concedes that the Des Moines Valley right-of-way deeds granted the railroad an easement rather than a fee under Iowa law. See Def.'s Cross-Mot. at 15; Pls.' Reply at 17.

Plaintiffs in this case are individuals and entities that claim to own land adjacent to the Des Moines Valley right-of-way during the issuance of the STB's October 25, 2004 NITU. Pls.' Mem. at 1-2. As explained in more detail below, plaintiffs argue that they are entitled to a liability finding under the pending cross motions for both the deeded andcondemned Des...