Preseault v. U.S., s. 93-5067

Decision Date05 November 1996
Docket Number93-5068,Nos. 93-5067,s. 93-5067
Citation100 F.3d 1525
PartiesJ. PAUL PRESEAULT and PATRICIA PRESEAULT, Individually and as Partners of 985 ASSOCIATES, LTD., a Vermont Limited Partnership, and 985 ASSOCIATES, LTD., Plaintiffs-Appellants, v. THE UNITED STATES, Defendant-Appellee, and THE STATE OF VERMONT, Defendant/Cross-Appellant. DECIDED:
CourtU.S. Court of Appeals — Federal Circuit

Appealed from: United States Court of Federal Claims, Judge Miller

Patrick W. Hanifin, New England Legal Foundation, Boston, MA, argued, for plaintiff-appellants. With him on the brief were Emily R. Livingston, Brookline, MA, and Stephen S. Ostrach, Boston, MA.

Jeffrey P. Kehne, Attorney, Environment and Natural Resources Division, Department of Justice, Washington, DC, argued, for defendant-appellee. With him on the brief were Peter r. Steenland, Jr., Acting Assistant Attorney General, and James E. Brookshire, Springfield, VA, Susan V. Cook and Robert L. Klarquist, Washington, DC, Attorneys. Of counsel on the brief was Louis Mackall, Office of General Counsel, Interstate Commerce Commission, Washington, DC.

John K. Dunleavy, Assistant Attorney General, Vermont Agency of Transportation, Montpelier, VT, argued for defendant/cross-appellant. With him on the brief was Jeffery L. Amestory, Attorney General.

William Perry Pendley, Mountain States Legal Foundation, Denver, CO, for amici curiae Maurice L. and Delores J. Glosemeyer.

Thomas C. Jackson, Beveridge & Diamond, P.C., Washington, DC, for amici curiae Rails-to-Trails Conservancy and The National Trust for Historic Preservation in the Unioted States. With him on the brief were Henry L. Diamond and David G. Isaacs, Washington, DC, and J. Andrew Stephenson, New York City. Of counsel on the brief were Andrea C. Ferster, General Counsel, Rail-to-Trails Conservancy, Washington, DC, and David A. Doheny, General Counsel, and Elizabeth S. Merritt, Associate General Counsel, National Trust for Historic Preservation, Washington, DC.

John D. Echeverria, National Audubon Society, Washington, DC, for amicus curiae National Audubon Society.

Before Rich, Newman, Mayer, Michel, Plager, Lourie, Clevenger, Rader, and Schall, Circuit Judges.*

Opinion filed by Circuit Judge PLAGER, in which Circuit Judges RICH, Newman, and Mayer join. Concurring opinion filed by Circuit Judge RADER, in which Circuit Judge LOURIE joins. Dissenting opinion filed by Circuit Judge CLEVENGER, in which Circuit Judges MICHEL and SCHALL join.

PLAGER, Circuit Judge.

In this Takings case, the United States denies liability under the Fifth Amendment of the Constitution1 for actions it took pursuant to the Federal legislation known as the Rails-to-Trails Act.2 The original parties to the case were the property owners, J. Paul and Patricia Preseault,3 plaintiffs, and the United States (the "Government"), defendant. The State of Vermont (the "State"), claiming an interest in the properties involved, intervened and, under the joinder rules of the Court of Federal Claims, entered its appearance as a co-defendant. The Court of Federal Claims, on summary judgment after hearings and argument, concluded that the law was on the Government's side, and rendered judgment against the complaining property owners. Preseault v. United States, 27 Fed. Cl. 69 (1992). The property owners appeal.

The appeal initially was heard by a three-judge panel which agreed with the trial court judgment in the Government's favor and affirmed. Preseault v. United States, 66 F.3d 1167 (Fed. Cir. 1995). Subsequently the full court concluded that the case raised important issues of Constitutional dimension, and that it was not certain that the property owners were wrong in their claims. Accordingly, the panel opinion was vacated, the case was taken in banc, and additional briefing and argument was ordered. Preseault v. United States, 66 F.3d 1190 (Fed. Cir. 1995).

The matter having now been heard before the in banc court, and thorough consideration having been given to the issues and to the arguments of the parties and the several amici4, we conclude that, for the reasons we shall explain, the trial court erred in giving judgment for the Government; that judgment is reversed. The case is remanded to the trial court for further proceedings to determine the just compensation to which the property owners are entitled.

A. INTRODUCTION AND SUMMARY

In brief, the issue in this case is whether the conversion, under the authority of the Rails-to-Trails Act and by order of the Interstate Commerce Commission, of a long unused railroad right-of-way to a public recreational hiking and biking trail constituted a taking of the property of the owners of the underlying fee simple estate. At this point we shall refer to the railroad's interest in the property by the term "right-of-way." That term is sufficient to indicate that the railroad had obtained a property interest allowing it to operate its equipment over the land involved. Later in the opinion it will become important to more precisely delineate the nature of the railroad's property interests, after which the use of the term "right-of-way" will refer only to those defined interests.

The facts of the case are reported in full in the several opinions already rendered in connection with this matter: the decision of the United States Court of Appeals for the Second Circuit, holding the Rails-to-Trails Act constitutional and the Preseaults without remedy, Preseault v. ICC, 853 F.2d 145 (2d Cir. 1988) (Preseault I)5 ; the decision of the United States Supreme Court, on certiorari from the Second Circuit, affirming the constitutionality of the Rails-to-Trails Act on its face, but concluding that the Preseaults may have a remedy in the Court of Federal Claims under the Tucker Act for a Fifth Amendment "taking," Preseault v. ICC, 494 U.S. 1 (1990) (Preseault II); the initial decision of the Court of Federal Claims, Preseault v. United States, 24 Cl. Ct. 818 (1992) (Preseault 1), in which the trial judge, after hearing and argument, granted partial summary judgment for the Preseaults, and denied the Government's cross-motions for summary judgment; and the final judgment of the Court of Federal Claims, reported at 27 Fed. Cl. 69 (1992) (Preseault 2), concluding that the law was against the Preseault's claim for compensation under the Fifth Amendment, granting the Government's second cross-motion for summary judgment, and ordering judgment dismissing the complaint.6

There are also two decisions in related matters by the Supreme Court of Vermont. The first, in 1985, holds that affected property owners (in that case the Preseaults and others) cannot maintain a suit in state court for a declaration of rights concerning the matter at issue before us because the matter is exclusively within the province of the Federal Government pursuant to the provisions of the Interstate Commerce Commission Act, and that the state court is therefore without subject matter jurisdiction. Trustees of the Diocese of Vermont v. State, 145 Vt. 510, 496 A.2d 151 (1985). The second state court decision, some ten years later, affirms an injunction against the Preseaults prohibiting them from using that part of their property subject to the original right-of-way for any purpose other than as members of the general public. State v. Preseault, 652 A.2d 1001 (Vt. 1994). In light of this record, we refer the reader to the earlier opinions for the full details of the events leading up to this appeal. For purposes of the decision here we summarize and condense that history, and recite only the salient facts relevant to the decision.

On appeal we affirm a summary judgment if the record before us discloses that "there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). Although we give due consideration to the views of the trial court, we decide anew questions about the applicable law, without deference to those views.

In summary, we conclude that the trial court was correct in finding that the 1899 transfers to the railroad created easements for use for railroad purposes; the fee estates remained with the original property owners. (Part C.1.) We accept the Government's position that ultimately this is a matter to be decided under controlling federal law and Constitution, but we reject the Government's central thesis that general federal legislation providing for the governance of interstate railroads, enacted over the years of the Twentieth Century, somehow redefined state-created property rights and destroyed them without entitlement to compensation. (Part C.2.) The trial court erred in accepting that thesis.

As far as the Government's defenses based on the state's property law are concerned, we conclude that even if these easements were still in existence at the time the trail was created, there was no legal justification for the intrusion upon the Preseault's property. We find no support in Vermont law for the proposition, propounded by the defendants and accepted by the dissent, that the scope of an easement limited to railroad purposes should be read to include public recreational hiking and biking trails (Part D). But we find no clear error in the trial court's determination that in fact these easements had been abandoned years before the creation of the trail (Part E), and that determination is affirmed.

Finally, we conclude that the taking that resulted from the establishment of the recreational trail is properly laid at the doorstep of the Federal Government. Whether the State's role in the matter should have resulted in liability for the State, or whether the State could absolve itself by pointing to the Federal Government, as the State Court held, is immaterial. The Federal Government authorized and controlled the behavior of the State in this matter, and the consequences properly fall there. (Part E.)

B. Factual Background

The...

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