Thompson v. United States

Decision Date13 October 2011
Docket NumberNo. 09-612L,09-612L
PartiesCONNIE and DOUGLAS THOMPSON, et al., Plaintiffs, v. THE UNITED STATES, Defendant.
CourtU.S. Claims Court

CONNIE and DOUGLAS THOMPSON, et al., Plaintiffs,
v.
THE UNITED STATES, Defendant.

No. 09-612L

United States Court of Federal Claims

Filed: October 13, 2011


TO BE PUBLISHED

Takings; U.S. CONST. AMEND. V;
Rails-To-Trails Act, 16 U.S.C. § 1247(d) (2006);
Summary Judgment, RCFC 56(a);
Certification of Question of State Law (Michigan Supreme Court Rule
7.305(b)(1));
ICC Termination Act of 1995, Pub.
L. 104-88, 109 St. 803 (1995), 49 U.S.C. § 10903;
Notice of Interim Trail Use, 49 C.F.R. § 1152.29(d);
Railroad Revitalization and Regulatory Reform Act of 1976, Pub.
L. No. 94-210, 90 Stat. 31 (1976);
Transportation Act of 1920, Pub.
L. No. 66-152, 41 Stat. 456 (1920);
Tucker Act, 28 U.S.C. § 1496 (2006);
1855 Mich.
Pub. Act No. 140;
2 Mich.
Comp. Laws § 11135 (1929);
49 C.F.R. §§ 152.26(a), 1152-29(c)-(d).

Mark F. Hearne, II, Meghan S. Largent, Lindsay S.C. Brinton, Clayton, Missouri, Counsel for Plaintiffs.

J. Nathaniel Watson, United States Department of Justice, Environment and Natural Resources Division, Washington, D.C., Counsel for the Government.

MEMORANDUM OPINION AND ORDER REGARDING THE PARTIES'
CROSS-MOTIONS FOR SUMMARY JUDGMENT
IN THIS RAILS-TO-TRAILS ACT CASE.

BRADEN, Judge.

I. RELEVANT STATUTORY BACKGROUND.

In 1920, Congress enacted the Transportation Act delegating to the Interstate Commerce Commission ("ICC") authority to regulate the closure of railroad rights-of-way. See Transportation Act of 1920, Pub. L. No. 66-152, 41 Stat. 456 (1920). In 1976, the 1920 Act was

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amended to strengthen the ICC's authority in this regard. See Railroad Revitalization and Regulatory Reform Act of 1976, Pub. L. No. 94-210, 90 Stat. 31 (1976).

On March 28, 1983, Congress enacted the Rails-To-Trails Act, as part of the National Trails System Act Amendments of 1983. Pub. L. No. 98-11, Title II, 97 Stat. 42, 48 (codified at 16 U.S.C. § 1247(d) (1994) ("Rails-To-Trails Act")). The 1920 Transportation Act, as subsequently amended by, inter alia, the Railroad Revitalization and Regulatory Reform Act and the Rails-To-Trails Act, requires that a railroad request permission from the Surface Transportation Board ("STB")1 before it abandons service on any rail line. 49 U.S.C. § 10903(a)(1) (2006). Within 20 days thereafter, the STB is required to publish a notice in the FEDERAL REGISTER of the railroad's intent to abandon a rail line. See 49 C.F.R. § 1152.26(a). After notice is published, any party interested in creating a public trail on the abandoned railroad right-of-way may file a petition stating the purpose of such use and its intent to assume responsibility for maintenance of the trail. See 49 C.F.R. § 1152.25(a)(1).

If the railroad is willing to negotiate to allow the right-of-way to be used for trail use, the STB issues a Notice of Interim Trail Use ("NITU") that delays disposition of the right-of-way for up to 180 days. See 49 C.F.R. §1152.29(d). Under the Rails-To-Trails Act, "use of [otherwise abandoned railroad rights-of-way as public trails] shall not be treated, for purposes of any law or rule of law, as an abandonment of the use of such rights-of-way for railroad purposes." 16 U.S.C. § 1247(d); see also Ladd v. United States, 630 F.3d 1015, 1025 (Fed. Cir. 2010) ("[T]he NITU forestalls or forecloses the landowners' right to unencumbered possession of the property."), reh'g en banc denied, 646 F.3d 910 (Fed. Cir. 2011). If an agreement is reached to convert the right-of-way to public trail use, the railroad may nevertheless reassert railroad use in the future. See 49 C.F.R. § 1152.29(d).

II. RELEVANT FACTS.2

In 1854, the Oakland & Ottawa Railroad Company (the "O & O Railroad") acquired two rights-of-way in Ionia County, Michigan. Pl. PFUF Exs. A37-38, A160-161. The next year, the O & O Railroad merged with the Detroit & Milwaukee Railroad Company ("D & M Railroad"). See 1855 Mich. Pub. Act No. 140 §§ 3-4 (attached to Plaintiffs' August 11, 2010 Motion For Partial Summary Judgment as App. A). The D & M Railroad continued to acquire railroad rights-of-way. Pl. PFUF Exs. A1-30, 33-36, 39-40. By 1857, D & M Railroad had constructed a continuous rail line between milepost 137.83 southeast of Lowell, Michigan and milepost 122.0

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just east of Prairie Creek, Michigan ("the Line"). Pl. PFUF Ex. B at 31-32.3 Subsequently, the D & M Railroad changed its name to the Detroit Grand Haven & Milwaukee Railroad ("DGH & M Railroad"), Pl. PFUF Ex. B at 32, and acquired an additional right-of-way. Pl. PFUF Exs. A31-32.

In 1882, the Grand Trunk Western Railroad ("Grand Trunk Western") acquired the DGH & M Railroad, and the two railroads merged their assets in 1928. Pl. PFUF Ex. B at 32. Grand Trunk Western remained in business until 1986, when it was acquired by the Straits Corporation, which was later renamed the Central Michigan Railroad Company. Pl. PFUF Ex. B at 33. In 1993, the Grand Rapids Eastern Railroad ("GRE Railroad") acquired the Line. Pl. PFUF Ex. B at 33. In 1999, the GRE Railroad merged with Mid-Michigan Railroad, now a subsidiary of RailAmerica, Inc. ("RailAmerica"), which operated the Line until 2007. Pl. PFUF Ex. B at 33.

On May 16, 2007, the West Michigan Trails and Greenways Coalition (the "Coalition") met with RailAmerica to discuss converting the Line from railroad use to public trail use. Pl. PFUF Exs. C, D. On December 18, 2007, the Mid-Michigan Railroad (the "Railroad") filed a Petition for Exemption with the STB to abandon the Line. Pl. PFUF Ex. B.

On January 7, 2008, the STB issued a notice of the Railroad's December 18, 2007 Petition to abandon the Line. See 73 FED. REG. 1263 (Jan. 7, 2008).

On January 22, 2008, the Coalition requested that the STB issue a NITU by filing a Statement Of Willingness To Assume Financial Responsibility with the STB. Pl. PFUF Exs. I, J at 3. On April 3, 2008, the STB issued a NITU, authorizing the Coalition and the Railroad to engage in an 180-day negotiation period. Pl. PFUF Ex. J at 3-4, 6. These negotiations failed.

On October 2, 2008, the Friends of the Fred Meijer Heartland Trail ("the Friends") interceded and requested that the STB extend the April 3, 2008 NITU for an additional 180 days to allow additional negotiations to take place. Pl. PFUF Exs. P, Q. On October 28, 2008, the STB issued a new NITU, designating the Friends as the proponent of the trail and allowing negotiations to proceed until April 27, 2009. Pl. PFUF Ex. Q at 2.

On October 31, 2008, an agreement was reached and the Railroad transferred the Line to the Friends via a quitclaim deed.4 Pl. PFUF Ex. T. In exchange, the Friends paid the Railroad

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$1 million as consideration. Pl. PFUF Exs. T, U. On November 19, 2008, the Railroad advised the STB that the sale of the Line to the Friends was completed. Pl. PFUF Ex. V.

In December 2008, a "Trail Development Agreement" between the Friends and the Coalition was signed, wherein the Friends agreed to "hold title for the Railroad corridor from . . . Ionia to Lowell[.]" Pl. PFUF Ex. W (emphasis added). Subsequently, the Friends sold part of the Line to the Michigan Department of Natural Resources, Pl. PFUF Exs. BB, EE, and donated the rest, Pl. PFUF Exs. CC, DD, subject to reversion5 of the Line to the Railroad, if rail service commences in the future. Pl. PFUF Exs. BB-DD.

III. PROCEDURAL HISTORY

On September 17, 2009, Connie and Douglas Thompson, Saranac Mini-Storage, LLC, and Shirley Zeagler filed a class action Complaint in the United States Court of Federal Claims on behalf of themselves and all similarly situated persons. On November 12, 2009 Plaintiffs filed an Amended Complaint adding twelve other Plaintiffs. After obtaining leave of court, Plaintiffs filed a Second Amended Complaint on February 1, 2010 ("Sec. Am. Compl."). The February 1, 2010 Second Amended Complaint alleges that the NITUs effected a taking of Plaintiffs' property for which they are entitled to just compensation. Sec. Am. Compl. ¶ 157. The Second Amended Complaint added other Plaintiffs, but dropped the class allegations contained in the first two versions of the Complaint.6

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On August 11, 2010, eighteen Plaintiffs filed a Motion For Partial Summary Judgment, together with a Memorandum in Support ("Pl. Mot."),7 for a ruling that their property rights were taken by operation of the Rails-To-Trails Act and therefore they are entitled to just compensation under the Fifth Amendment to the United States Constitution. On September 8, September 29, and October 18, 2010, the Government filed unopposed Motions For Extension Of Time, that the court granted.

On October 20, 2010, the Government filed a Cross-Motion For Partial Summary Judgment And Opposition To Plaintiffs' Motion For Partial Summary Judgment ("Gov't Cross Mot.").

On November 19, 2010, Plaintiffs filed an Unopposed Motion For Extension of Time that the court granted. On November 24, 2010, Plaintiffs filed a Response To The Government's Cross-Motion And A Reply To The Government's Response ("Pl. Resp. & Reply").

On December 1 and 14, 2010, the Government filed additional unopposed Motions For Extension Of Time that were granted by the court. On December 17, 2010, the...

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