Phipps v. United States

• Decision Date: 26 April 2016
• Docket Number: No. 14-424L,14-424L
• Parties: RICHARD K. PHIPPS, et al., Plaintiffs, v. UNITED STATES, Defendant.
• Court: U.S. Claims Court

RICHARD K. PHIPPS, et al., Plaintiffs, v. UNITED STATES, Defendant.

No. 14-424L

United States Court of Federal Claims

April 26, 2016

Trails Act; Takings Claims; Cross-Motions for Partial Summary Judgment.

Elizabeth A. Gepford McCulley, Steward, Wald & McCulley LLC, Kansas City, Missouri, for plaintiffs. With her were Thomas S. Stewart, Steward, Wald & McCulley LLC, and J. Robert Sears, Baker Sterchi Cowden & Rice, LLC, St. Louis, Missouri.

Cullen Shearburn, Trial Attorney, Environment & Natural Resources Division, Natural Resources Section, Department of Justice, Washington, D.C., for defendant. With him was John C. Cruden, Assistant Attorney General, Environment & Natural Resources Division, Department of Justice, Washington, D.C.

OPINION

HORN, J.

FINDINGS OF FACT

Plaintiffs are landowners in the town of Farragut, Iowa, who allege that they are entitled to receive just compensation under the Fifth Amendment to the United States Constitution because the United States government effected a taking of their reversionary property interests by operation of the National Trails System Act, 16 U.S.C. § 1241, et. seq. (2012) (the Trails Act). Plaintiffs remaining in the case¹ include David and Paula Brownlee, Monte Jay Moyer, Rita Foster, Thomas A. Ingram and Amanda Hinds, Jerry Lee Nicholas, Jeremy T. and Jennifer L. McAllister, Virginia Farm Company, James andGloria Dalrymple, Richard K., Roger and Lisa Phipps, C.S. Johnson Family Limited Partnership, Dorothy Walter Trust, and Timothy and Shawna Dreyer.

The Burlington Northern Santa Fe Railway Company (BNSF) previously operated a railroad that extended, in part, for approximately six miles between milepost 20.05 outside of Shenandoah, Iowa to milepost 26.0 outside of Farragut, Iowa. This 5.95-mile railroad corridor is at the center of the dispute in the above-captioned case. Plaintiffs allege that they each owned property adjoining the railroad corridor on which the railroad operated between milepost 20.05 and milepost 26.0, and that BNSF owned an easement for railroad purposes that laid across the property owned by plaintiffs. Plaintiffs allege that BNSF's easement for railroad purposes was extinguished when railroad operations on the railroad corridor ceased, and, as a result, plaintiffs' right to possess the land unencumbered by the easement should have reverted back to them. Plaintiffs further allege that defendant's actions under the Trails Act prevented such a reversion. Defendant challenges the adjacency of certain of these parcels to the railroad corridor and argues that BNSF actually held certain portions of the railroad corridor in fee simple, rather than as a mere easement. With regard to the remaining parcels at issue, however, the government concedes that these parcels adjoined portions of the railroad corridor over which BNSF held only easements for railroad purposes. Defendant states that it does not object to the entry of partial summary judgment finding it liable for takings with regard to these parcels, but argues that the takings were limited to easements for the preservation of rail service.

In February 2012, BNSF intended to abandon the 5.95-mile railroad corridor at issue and sought abandonment authorization from the United States Surface Transportation Board (STB). On February 21, 2012, BNSF submitted a Petition for Exemption to the STB seeking to exempt "BNSF's abandonment of a 5.95-mile rail line located in Page and Fremont Counties, Iowa" from "the prior approval requirements of 49 U.S.C. § 10903." In its petition, BNSF explained that "BNSF owns a 5.95-mile rail line between Shenandoah and Farragut in Page and Fremont Counties, Iowa," and that BNSF intended to "exercise the abandonment authority and convert the portion of the Line between Milepost 20.05 and Milepost 21.90 to industry track and sell the industry track" to the only customer on the line. BNSF proposed "to abandon its rail line located between Milepost 20.05 in Shenandoah and Milepost 26.0 in Farragut, in Page and Fremont Counties, Iowa." BNSF further stated that there "has been no overhead traffic on the Line for many years and no local traffic on the portion of the Line between Milepost 21.90 and Milepost 26.0 since at least 2007." In its petition, BNSF also asserted that "[t]he City of Farragut has expressed an interest in railbanking the remainder of the Line within its city limits." BNSF asserted in its petition that the rail line "does not contain federally granted rights of way."

In response to a public notice of the proposed abandonment, on March 14, 2012, the Iowa Natural Heritage Foundation (INHF) filed a request to the STB for the "issuance of a Public Use Condition as well as a Certificate or Notice of Interim Trail Use rather than an outright abandonment authorization between milepost 20.05 in Shenandoah and milepost 26.0 in Farragut." BNSF responded to the INHF's request and agreed "to negotiate with INHF for interim trail use/rail banking" as to the segment of the rail linebetween mileposts 21.90 and 26.0. Thereafter, pursuant to its powers under the Trails Act, the STB issued a Notice of Interim Trail Use (NITU) on June 8, 2012 granting BNSF's request for an exemption, "subject to public use, trail use, environmental, and standard employee protective conditions." According to submissions from the parties, BSNF and the INHF have not completed negotiations on a trail use agreement, and the STB has extended the negotiation period to May 18, 2016. Continued negotiations for a trail use agreement, however, do not impact the parties' cross-motions presently before the court.

Plaintiffs David and Paula Brownlee allege that they owned fee title to land parcel number 420420013000000, including the portion of the property that extends to the centerline of the allegedly abandoned railroad right-of-way, when the alleged taking occurred. Plaintiffs David and Paula Brownlee's claim is identified as Claim 1 in this case.

Plaintiff Monte Jay Moyer alleges that he owned fee title to land parcel number 420420014000000, including the portion of the property that extends to the centerline of the allegedly abandoned railroad right-of-way, when the alleged taking occurred. Plaintiff Monte Jay Moyer's claim is identified as Claim 2 in this case.

Plaintiff Rita Foster alleges that she owned fee title to land parcel number 420420106000000, including the portion of the property that extends to the centerline of the allegedly abandoned railroad right-of-way, when the alleged taking occurred. Plaintiff Rita Foster's claim is identified as Claim 4 in this case.

Plaintiffs Thomas A. Ingram and Amanda Hinds allege that they owned fee title to land parcel number 420420107000000, including the portion of the property that extends to the centerline of the allegedly abandoned railroad right-of-way, when the alleged taking occurred. Plaintiffs Ingram and Hinds' claim is identified as Claim 5 in this case.

Plaintiff Jerry Lee Nicholas alleges that he owned fee title to land parcel number 420420185000000, including the portion of the property that extends to the centerline of the allegedly abandoned railroad right-of-way, when the alleged taking occurred. Plaintiff Nicholas' claim is identified as Claim 8 in this case.

Plaintiffs Jeremy T. and Jennifer L. McAllister allege that they owned fee title to land parcel number 420420184000000, including the portion of the property that extends to the centerline of the allegedly abandoned right-of-way, when the taking occurred. Plaintiffs Jeremy T. and Jennifer L. McAllister's claim is identified as Claim 9 in this case.

Separate from the aforementioned plaintiffs, the parties do not dispute that certain, additional plaintiffs, including Virginia Farm Company (Claim 11),² James and GloriaDalrymple (Claim 12),³ Richard K., Roger and Lisa Phipps (Claim 13.B),⁴ C.S. Johnson Family Limited Partnership (Claim 14),⁵ Dorothy Walter Trust (Clam 15),⁶ and Timothy and Shawna Dreyer (Claims 16.A and 16.B),⁷ owned fee title to land parcels adjacent to the railroad corridor at the time of the alleged taking, June 8, 2012. The parties also do not dispute that, according to the original source deed, BNSF's predecessor-in-interest was conveyed an easement only for railroad purposes over the land parcels owned by these plaintiffs.

In contrast, the parties dispute whether the parcels owned by plaintiffs Monte Jay Moyer, Rita Foster, Thomas A. Ingram and Amanda Hinds, Jerry Lee Nicholas, and Jeremy T. and Jennifer L. McAllister, Claims 2, 4, 5, 8, and 9, respectively, adjoined the railroad corridor, such that, upon the cessation of the alleged easement for railroad purposes, the railroad corridor land would pass to the owners of these adjoining parcels pursuant to Iowa Code § 327G.77.⁸ Defendant argues that these land parcels wereseparated from the railroad corridor by intervening roads and did not adjoin the railroad corridor. Specifically at issue are two roads in the town of Farragut, Iowa: Foote Street and Cox Street.⁹ The parties disagree about whether Foote Street and Cox Street are owned in fee by the town of Farragut, separating the railroad corridor from the plaintiffs' land parcels, and, thereby, severing any alleged interests of plaintiffs in the railroad corridor.

With regard to Foote Street, the parties agree that Foote Street was depicted on the original plat map of the town of Farragut, which was incorporated in 1871. The original plat map shows Foote Street as adjacent to the land parcels that presently comprise Claims 1, 2, 4, and 5 and separating these land parcels from the railroad corridor. The parties agree that, subsequent to the original plat map, some portions of Foote Street have been vacated. The parties also agree that the current tax assessor's map of Farragut labels at least some of these vacated portions with the term "vac." The parties do not dispute that the portion of Foote Street adjacent to Claim 1, which is labelled "vac." on the tax...