Ladd v. United States

• Citation: 630 F.3d 1015
• Decision Date: 14 December 2010
• Docket Number: No. 2010–5010.,2010–5010.
• Parties: Jack LADD, Jobeth Ladd, John Ladd, Marie Ladd, Gail A. Lanham, James A. Lindsey, Michael A. Lindsey, William Lindsey, Charlie Miller, Pauline Miller, and Raymond Miller, Plaintiffs–Appellants,v.UNITED STATES, Defendant–Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

630 F.3d 1015

Jack LADD, Jobeth Ladd, John Ladd, Marie Ladd, Gail A. Lanham, James A. Lindsey, Michael A. Lindsey, William Lindsey, Charlie Miller, Pauline Miller, and Raymond Miller, Plaintiffs–Appellants,

v.UNITED STATES, Defendant–Appellee.

No. 2010–5010.

United States Court of Appeals, Federal Circuit.

Dec. 14, 2010.

Mark F. (Thor) Hearne, II, Arent Fox LLP, of Clayton, Missouri argued for plaintiffs-appellants. With him on the brief were Lindsay S.C. Brinton and Meghan S. Largent.James D. Gette, Attorney, Environment and Natural Resources Division, United States Department of Justice, of Washington, DC, for defendant-appellee. With him on the brief was Ignacia S. Moreno, Assistant Attorney General.Greg Reilly, Morrison & Foerster LLP, of San Diego, California, for amicus curiae. With him on the brief was Sarah Simmons, of Chiyoda-ku, Tokyo Japan. Of counsel was Andrea C. Ferster, Rails–To–Trails Conservancy, of Washington, DC.Before RADER, Chief Judge, LINN and MOORE, Circuit Judges.MOORE, Circuit Judge.

The appellants appeal an order of the Court of Federal Claims granting summary judgment that no compensable taking occurred when the Department of Transportation's Surface Transportation Board (STB) issued a Notice of Interim Trail Use or Abandonment concerning an easement over the appellants' land. Because the court's order conflicts with Caldwell v. United States, 391 F.3d 1226 (Fed.Cir.2005) and Barclay v. United States, 443 F.3d 1368 (Fed.Cir.2006), we reverse.

Background

The appellants own land in Cochise County, Arizona near the United States–Mexico border. In 1903, the El Paso & Southwestern Railroad Company (El Paso) acquired the right to use a 100–feet wide, 76.2–mile long strip of land to build and operate a railroad, pursuant to the General Railroad Right–of–Way Act of 1875, 43 U.S.C. §§ 934–39 (1875 Act), and various private conveyances. According to the appellants, they retained fee simple estates in the portions of their land underlying the railway.

In 2003, the San Pedro Railroad Operating Company, LLC (San Pedro) acquired the El Paso's rights to the railway. At that time, the railway served one principal shipper, the Chemical Lime Company. San Pedro intended to restore a connection with the Mexico rail service at Naco, Arizona, but the plan never materialized. Thus, in 2005, San Pedro initiated proceedings to abandon all 76.2 miles of the railway by filing a petition with the STB under 49 U.S.C. § 10502 seeking exemption from the requirements of 49 U.S.C. § 10903. As explained by the STB, when such a “petition becomes effective, the railroad will be able to salvage track, ties, and other railroad appurtenances and dispose of the right-of-way.” STB Docket No. AB–1081X, D.I. 35–9, 1 (Nov. 9, 2005). Over an objection from the Chemical Lime Company, the STB granted San Pedro's petition and instructed San Pedro to file a notice of consummation to signify that it had exercised its authority to fully abandon its railway line. Id. at 7; see also 49 C.F.R. § 1152.29(e)(2).

The Trust for Public Land (Trust), a charity supporting the conversion of abandoned rail lines to public recreational trails, asked the STB to issue a Notice of Interim Trail Use or Abandonment (NITU) pursuant to § 8(d) of the National Trails System Act Amendments of 1983 (Trails Act). See 16 U.S.C. § 1247(d). San Pedro indicated its willingness to enter into trail use negotiations with the Trust, and on July 25, 2006, the STB issued a NITU, suspending abandonment proceedings and authorizing a 180–day period for San Pedro and the Trust to negotiate a trail use agreement. STB Docket No. AB–1081X, D.I. 35–10, 2 (Jul. 25, 2006). The Trust requested a 30–day extension of the negotiating period of the NITU for a portion of the railway line, specifically, a segment running from Highway 92 to Curtiss Flats (the Northern Stretch). Thus for this segment, the negotiating period lasted 210 days. The STB indicated that San Pedro's abandonment exemption would become effective subject to the NITU (and other standard conditions, not relevant here). The STB further stated that if no trail use agreement was reached, San Pedro could fully abandon its railway line. Id. at 3. Shortly after the STB issued the NITU, San Pedro removed its rails and ties from the land.

The Trust and San Pedro did not reach a trail use agreement. On January 29, 2007, San Pedro filed a notice of consummation informing the STB that it had abandoned the portion of the railway line east of Naco, Arizona (the Southern Stretch). See 49 C.F.R. § 1152.29(e)(2).¹ For the remainder of the line, San Pedro filed, and the STB granted, several requests to postpone the deadline to consummate abandonment. See, e.g., STB Docket No. 1081X (Jun. 8, 2007). The current deadline for San Pedro to consummate abandonment is July 26, 2011. STB Docket No. 1081X (May 14, 2010).

Although the Northern Stretch of the rail corridor no longer serves as a railway, no public trail has been established. According to the appellants, this corridor provides a convenient route to enter the United States from Mexico, and it is now used by illegal aliens and drug smugglers and patrolled by the U.S. Border Patrol. The appellants further state that they have tried to “fence and build barriers across the abandoned rail line but the Border Patrol and trespassers continue to cut the fence and remove the barriers.” Appellants' Br. at 10.

The appellants brought suit against the United States in the Court of Federal Claims alleging a violation of the takings clause of the Fifth Amendment to the United States Constitution. The appellants alleged, among other things, that the NITU had forestalled or taken their state law reversionary property interests. J.A. 65. The appellants further alleged that pursuant to Caldwell, 391 F.3d 1226, and Barclay, 443 F.3d 1368, a taking of their property occurred when the STB issued the NITU on July 25, 2006. J.A. 66.

The Court of Federal Claims concluded that no taking had occurred and dismissed the case. Ladd v. United States, 90 Fed.Cl. 221, 228 (2009). The court determined that “[a] physical taking cannot have occurred in these circumstances, where neither the NITU nor another aspect of the federal abandonment process has resulted in the construction of a trail for public use.” Id. at 226. The court further stated that “[i]ssuance of a NITU cannot be a physical taking where the landowners have not suffered a physical invasion of the property in which they claim interests.” Id. The court explained that “[c]onversion of a railroad right-of-way to a public trail has been the physical invasion necessary to finding takings in earlier Rails–to–Trails cases,” citing Barclay, 443 F.3d at 1372, Caldwell, 391 F.3d at 1228, and Preseault v. United States, 100 F.3d 1525, 1551–52 (Fed.Cir.1996) (en banc). Id. at 227. The court held that unlike Preseault, Caldwell, and Barclay, in this case, a trail has not yet been established. Id. The court stated that the rail corridor remained with the railroad, and thus “[t]he railroad holds the key to completing the regulatory abandonment process. The NITU has not effected a change of status in plaintiffs' property interests.” Id. The court acknowledged that “ Caldwell and Barclay suggest that temporary takings could occur in some circumstances, but those cases addressed applicable statutes of limitations for takings in this court.” Id. The court concluded that a “physical presence by the general public, made possible by government action, is the crucial element so far missing from this case.” Id.

The landowners appeal. We have jurisdiction under 28 U.S.C. § 1295(a)(3).

Discussion

We review the court's grant of summary judgment de novo. Casitas Mun. Water Dist. v. United States, 543 F.3d 1276, 1283 (Fed.Cir.2008). Summary judgment is appropriate where the record shows that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Ct. Fed. Cl. R. 56(c). The issue of whether a taking has occurred is a question of law, reviewed de novo, with factual underpinnings, which we review for clear error. Casitas, 543 F.3d at 1283.

The Takings Clause of the Fifth Amendment provides that private property shall not “be taken for public use, without just compensation.” U.S. Const. Amend. V. “The Amendment does not prohibit the taking of private property, but instead places a condition on the exercise of that power.” Preseault v. Int'l Commerce Comm'n, 494 U.S. 1, 11, 110 S.Ct. 914, 108 L.Ed.2d 1 (1990) (citation and quotation marks omitted). “The Supreme Court has emphasized that the Takings Clause was designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.” Casitas, 543 F.3d at 1288 (quotation marks and citation omitted). It is settled law that a Fifth Amendment taking occurs in Rails–to–Trails cases when government action destroys state-defined property rights by converting a railway easement to a recreational trail, if trail use is outside the scope of the original railway easement. See Ellamae Phillips Co. v. United States, 564 F.3d 1367, 1373 (Fed.Cir.2009). This appeal concerns whether the government's issuance of a NITU constitutes a compensable taking, where no conversion to a recreational trail has occurred.

The appellants' assert that two of our prior cases, Caldwell, 391 F.3d 1226 and Barclay, 443 F.3d 1368, indicate that the issuance of a NITU amounts to a compensable taking, whether or not the easement is transferred or a recreational trail is ever established. We describe these cases in detail before turning to the parties' arguments.

A.

In Caldwell, a railroad company, Norfolk Southern Railway Company (Norfolk), filed a request for exemption under 49 U.S.C. § 10505 (now § 10502) to abandon a rail corridor in Columbus, Georgia. 391 F.3d at 1230–31. Norfolk agreed to...