Rogers v. United States
| Decision Date | 31 October 2011 |
| Docket Number | No. 07-426L,No. 08-198L,No. 07-273L,No. 10-200L,No. 10-187L,07-273L,07-426L,08-198L,10-187L,10-200L |
| Parties | STEPHEN J. ROGERS, et al., Plaintiffs, v. THE UNITED STATES, Defendant. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Motion for Partial Summary Judgment; RCFC 56; Fifth Amendment Taking; Rails-to-Trails Act; Florida Law; Fee Simple; Right-of-Way; Abandonment; Measurement of Just Compensation.
Mark (Thor) Hearne, II, Lindsay Brinton, and Meghan Largent, Arent Fox LLP, 112 S. Hanley Drive, Suite 200, Clayton, MO 63105, for Plaintiffs.
Carol Draper and William Shapiro, United States Department of Justice, 601 D. Street, N.W., Room 3114, Washington, D.C. 20530, for Defendant.
FOR PARTIAL SUMMARY JUDGMENT ON VALUATION
These Fifth Amendment taking actions come before the Court on the parties' cross-motions for partial summary judgment for a determination of the proper method for valuation of property. In a previous opinion, the Court determined that the Government was liable for a taking of Plaintiffs' property pursuant to the National Trails System Act Amendments of 1983 ("Trails Act"). See Rogers v. United States, 90 Fed. Cl. 418, 434 (2009). The parties dispute the measure of "just compensation" due to Plaintiffs. Plaintiffs claim that they are owed the difference between the fair market value of a fee simple estate and the fair market value of the same estate burdened by a recreational trail easement. Defendant argues that the proper measure of compensation is the difference in fair market value between an estate burdened by a raileasement and an estate burdened by a trail easement. For reasons discussed below, the Court grants Plaintiffs' motion.
Congress enacted the Trails Act to preserve shrinking rail trackage by converting unused rights-of-way to recreational trails. Preseault v. Interstate Commerce Comm'n, 494 U.S. 1, 5 (1990) ("Preseault I"); see also 16 U.S.C. § 1241 et seq. The operation of the Trails Act is subject to the Fifth Amendment to the United States Constitution which provides that private property shall not "be taken for public use, without just compensation." U.S. Const. amend. V. Accordingly, when private property interests are taken by the Government pursuant to the Trails Act, the property owners are entitled to just compensation. See Preseault I, 494 U.S. at 12. Because property rights arise under state law, Florida law governs whether the landowners have a compensable property interest. See Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1001(1984); Preseault I, 494 U.S. at 20-25 (O'Connor, J., concurring).
In a rails-to-trails case, a taking, if any, occurs when "state law reversionary interests are effectively eliminated in connection with a conversion of a railroad right-of-way to trail use." Caldwell v. United States, 391 F.3d 1226, 1228 (Fed. Cir. 2004). The Trails Act prevents a common law abandonment of the railroad right-of-way from being effected, thus precluding state law reversionary interests from vesting. Id. at 1229. Stated in traditional property law parlance, upon abandonment or termination of a railroad easement, "the burden of the easement would be extinguished, and the landowner's property would be held free and clear of any such burden." Toews v. United States, 376 F.3d 1371, 1376 (Fed. Cir. 2004). By preventing the abandonment and concomitant restoration of a fee simple unburdened by the easement, the Trails Act effects a taking. See Barclay v. United States, 443 F.3d 1368, 1371 (Fed. Cir. 2006). As the Federal Circuit has explained, the taking occurs when the Surface Transportation Board ("STB"), the regulatory body that oversees construction, operation, and abandonment of most railroad lines in the United States, issues a Notice of Interim Trail Use or Abandonment ("NITU"):
Abandonment is suspended and the reversionary interest is blocked "when the railroad and trail operator communicate to the [Surface Transportation Board] their intention to negotiate a trail use agreement and the agency issues an NITU that operates to preclude abandonment under section 8(d)" of the Trails Act. . . . We concluded [in Caldwell] that "[t]he issuance of the NITU is the only government action in the railbanking process that operates to prevent abandonment of the corridor and to preclude the vesting of state law reversionary interests in the right of way." Thus, a Trails Act taking begins and a takings claim accrues, if at all, on issuance of the NITU.
Barclay, 443 F.3d at 1374 (quoting Caldwell, 391 F.3d at 1233) (emphasis in original) (citation omitted).
In another sense -- the dominant consideration in these types of taking cases -- the taking occurs when the government, pursuant to the Trails Act, creates a new easement for a recreational use over land that had been encumbered by an easement limited to railroad purposes. See Preseault v. United States, 100 F.3d 1525, 1550 (Fed. Cir. 1996) ("Preseault II") (). The statutory imposition of this recreational easement, which otherwise had not been granted, is a taking. The Trails Act also subjects the property to another burden -- railbanking -- or the potential reactivation of rail service along the corridor if necessary. This remote speculative possibility does not, however, mean that the original railroad-use easement is resuscitated or reinstated. See Toews, 376 F.3d at 1381 ( ).
In its liability decision this Court applied the test articulated by the Federal Circuit in Preseault II -- whether a plaintiff is entitled to compensation in a rails-to-trails case depends on three determinative issues:
(1) who owned the strips of land involved, specifically did the Railroad . . . acquire only easements, or did it obtain fee simple estates; (2) if the Railroad acquired only easements, were the terms of the easements limited to use for railroad purposes, or did they include future use as public recreational trails; and (3) even if the grants of the Railroad's easements were broad enough to encompass recreational trails, had these easements terminated prior to the alleged taking so that the property owners at that time held fee simples unencumbered by the easements.
Preseault II, 100 F.3d at 1533.
The first inquiry -- whether the named landowners have a property interest in the right-of-way -- depends upon the nature of the original conveyance that established the railroad's right to operate a railroad on the property at issue. Ellamae Phillips Co. v. United States, 564 F.3d 1367, 1373-74 (Fed. Cir. 2009).
In its liability decision, the Court interpreted a 1910 deed from Adrian C. Honore to Seaboard Air Line Railway ("Seaboard"), recognizing that the parcels at issue had been conveyed unaltered down the chain of title until the NITU was issued in April, 2004. The conveyance reads, in pertinent part:
Rogers, 90 Fed. Cl. at 422 (citation omitted). The Court read the conveyance as granting Seaboard an easement solely for rail use, and therefore found that Plaintiffs would have obtained fee simple estates in the corridor upon discontinuance of railroad use if the taking had not occurred. Id. at 429-33. To this effect, the Court noted that "the Honore conveyance placed an explicit limitation on the use of the property interest conveyed and contained an unequivocal stipulation that title would revert to the grantor upon discontinuance of the use of the parcel for its intended railroad purpose." Id. at 430-31.
In addressing the second Preseault II inquiry, the Court interpreted "railroad purpose" under Florida law as excluding recreational trail use, and thus concluded that "the governmental action converting the railroad right-of-way to a public trail right-of-way imposed a new easement on the landowners and effected a Fifth Amendment taking of their property." Id. at 432. Turning to Preseault II's third prong, whether, "even if the grants of the easements were broad enough to encompass recreational trails," the easements had terminated, this Court recognized that the "even if" circumstance was not in play. Because the Court found that the Honore easement was not broad enough to encompass a recreational trail, the Court did not reach the third prong of the Preseault II analysis, i.e., whether Seaboard had terminated or "abandoned" its easement prior to the NITU.
Following its liability decision, the Court directed the parties to exchange appraisal reports for purposes of determining the "just compensation" due to Plaintiff landowners under the Fifth Amendment. See Order, December 4, 2009. At the onset of this process, both parties...
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