Thomas v. United States
| Decision Date | 29 August 2012 |
| Docket Number | No. 10-54L,No. 10-459L,10-54L,10-459L |
| Parties | DAFFNEY A. THOMAS, et. al, Plaintiffs, v. THE UNITED STATES, Defendant. JAMES M. CREWS, JR., et. al., Plaintiffs, v. THE UNITED STATES, Defendant. |
| Court | U.S. Claims Court |
CONSOLIDATED
Rails-to-Trails Case; Tennessee
Law; Trails Act, 16 U.S.C. §
1247(d); "Reversionary Interest" in
Tennessee Easements; Scope of
Right-of-Way Easements under
Tennessee Law; "Railroad Purpose"
Under Tennessee Law
Steven M. Wald, St. Louis, MO, for the Thomas plaintiffs. Brent W. Baldwin and J. Robert Sears, St. Louis, MO, and Thomas S. Stewart and Elizabeth G. McCulley, Kansas City, MO, of counsel.
Irma Merrill Stratton, Memphis, TN, for the Crews plaintiffs.
Lary Cook Larson, United States Department of Justice, Washington, DC, for defendant, with whom was Ignacia S. Moreno, Assistant Attorney General.
In this "Rails-to-Trails" case, plaintiffs allege that they own property in Shelby County, Tennessee, through which CSX Transportation, Inc. and its predecessors ran a railroad right-of-way. Plaintiffs claim that the defendant ("the government") affected a taking of their reversionary property interests in the railroad right-of-way 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"). 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.
Pending before the court are the parties' cross-motions for partial summary judgment as to the respective property interests of plaintiffs, and as to whether there has been a taking of plaintiffs' property interests. For the reasons discussed below, the Thomas plaintiffs' motion for partial summary judgment is GRANTED, the Crews plaintiffs' motion for partial summary judgment is GRANTED-IN-PART and DENIED-IN-PART, and the government's cross-motion for partial summary judgment is GRANTED-IN-PART and DENIED-IN-PART.
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") to preserve railroad rights-of-way not currently in use for possible future rail use by converting thoserights-of-way into recreational trails. Id. at 5-6. This process is called "railbanking." Caldwell v. United States, 391 F.3d 1226, 1228-29 (Fed. Cir. 2004).
The STB's approval of railbanking and recreational trail use are authorized in connection with the STB's abandonment approval authority. Id. Before a railroad corridor may be converted into a recreational trail, the railroad must either initiate abandonment proceedings with the STB under 49 U.S.C. § 10903 () or seek an exemption from the ordinary abandonment procedures under 49 U.S.C. § 10502 (). Barclay v. United States, 443 F.3d 1368, 1371 (Fed. Cir. 2006). Under either procedure, abandonment of the rail line and right-of-way will not be approved by the STB if a qualified trail operator1 submits to the STB a request to use the right-of-way as a recreational trail.
If the trail operator 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 and railbanking 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 ofInterim Trail Use ("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 trail use agreement. Caldwell, 391 F.3d at 1229-30; 49 C.F.R. § 1152.29(d). If an agreement is not reached, the railroad may abandon the right-of-way, at which time the STB's jurisdiction over the right-of-way terminates. 49 C.F.R. § 1152.29(d). If the parties reach an agreement, trail use is automatically authorized, and the trail provider assumes managerial and financial responsibility for the right-of-way as a recreational trail. Caldwell, 391 F.3d at 1229.
The effect of the NITU, if a railbanking and interim trail use agreement is reached, is that the STB retains jurisdiction over the rail corridor, and the abandonment of the corridor is blocked even though conditions for abandonment are otherwise met. Id. The STB's issuance of a NITU prevents abandonment of the right-of-way and in some cases, forestalls the reversion of state law property interests to the owners of the land adjacent to the right-of-way. Id. Where the issuance of a NITU precludes the vesting of state law reversionary interests, its issuance may constitute a taking of those reversionary interests in violation of the Fifth Amendment. See id. at 1233-34.
The Takings Clause of the Fifth Amendment provides in relevant part 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 I, 494 U.S. at 11(quoting First English Evangelical Lutheran Church of Glendale v. Cnty. of Los Angeles, 482 U.S. 304, 314 (1987)). In cases involving the Trails Act, it is now settled that if the government takes private property by authorizing recreational trail use of a railroad right-of-way, the government must provide just compensation. Preseault I, 494 U.S. at 12-16. The Federal Circuit has determined that a taking occurs upon the issuance of the NITU, where the NITU authorizing recreational trail use effectively extinguishes the state property rights of reversion of the right-of-way to the fee owner. Ladd v. United States, 630 F.3d 1015, 1019 (Fed. Cir. 2010), reh'g denied, No. 2010-5010, 2011 WL 2043242 (Fed. Cir. May 26, 2011).
The Federal Circuit has explained that "Rails-to-Trails" cases present three primary questions:
Preseault v. United States, 100 F.3d 1525, 1533 (Fed. Cir. 1996) ("Preseault II"); see also Ellamae Phillips Co. v. United States, 564 F.3d 1367, 1373 (Fed. Cir. 2009). If the railroad receives only a railroad purpose easement and if the recreational trail use and railbanking authorized by the NITU exceed the scope of that easement and therebyprevent expiration of the easement and reversionary interests from vesting in the fee owners, then a Fifth Amendment taking has occurred. See Ladd, 630 F.3d at 1019.
The following facts are not disputed unless otherwise noted. Plaintiffs in this action allege a Fifth Amendment taking based on their property rights in a railroad right-of-way established in the nineteenth century. Beginning in the late 1800s, the Tennessee Midland Railway Company obtained property rights in conjunction with its construction of a railroad right-of-way in Shelby County, Tennessee. The Tennessee Midland Railway Company obtained its property interests in the rail corridor through deed, prescription, and condemnation.
Through subsequent railroad transactions, CSX Transportation, Inc. ("CSXT") became the successor owner of these property interests over a 13.34 mile rail corridor extending from milepost 210.66 near Cordova and milepost 224 in Memphis, Tennessee. On September 7, 2007, CSXT filed with the STB a Notice of Exempt Abandonment seeking to abandon the railroad line. On October 5, 2007, the Memphis Community Connector ("MCC") filed with the STB a statement of willingness to assume financial responsibility over the railroad line, pursuant to the Trails Act. On October 26, 2007, the STB issued a NITU authorizing interim trail use. On August 13, 2009, CSXT and MCC reached a Trail Use Agreement, pursuant to which CSXT transferred a 7.08 mile portion of the railroad line to MCC for use as a recreational trail. The quitclaim deed transferring this portion of the railroad line in connection with the NITU states that the property shall be used for "the sole purpose of the construction, maintenance,enhancement, operation, and use of a recreational trail." Def.'s Findings of Fact ("FOF"), Ex. E, ECF No. 79-1. CSXT reserved certain rights and easements in conveying the rail corridor, including utility easements under the rail corridor and the right to maintain commuter rail operations on the corridor subject to the approval of the trail operator should those activities interfere with the use of the trail. Id.
It is the 7.08 mile portion of the railroad line that is at issue in this case. The parties agree that the railroad acquired a fee interest in several segments of the subject rail corridor. See Joint Stipulation I, ECF No. 50. For the remaining segments of the railroad line at issue here, the parties agree that the Tennessee...
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