Professional Documents
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Brief for National Assn of Reversionary Property Owners, National Cattlemen's Beef Assn, and Public Lands Council as Amici Curiae in Support of Appellees and Urging Affirmance, Caquelin v. United States. No. 16-1663 (Dec. 28, 2016)-NCBA-PLC Amicus Brief
Brief for National Assn of Reversionary Property Owners, National Cattlemen's Beef Assn, and Public Lands Council as Amici Curiae in Support of Appellees and Urging Affirmance, Caquelin v. United States. No. 16-1663 (Dec. 28, 2016)-NCBA-PLC Amicus Brief
(888) 277-3259
United States
v.
(appellant)
(respondent)
(appellee)
(amicus)
(name of party)
Nat'l Assoc. of
Reversionary Prop. Own
National Cattlemen's Beef
Assoc.
Public Lands Council
None
Same
None
Same
None
4. The names of all law firms and the partners or associates that appeared for the
party or amicus now represented by me in the trial court or agency or are expected to
appear in this court (and who have not or will not enter an appearance in this
case) are:
n/a
December 28, 2016
Date
TABLE OF CONTENTS
CERTIFICATE OF INTEREST .................................................................................i
TABLE OF AUTHORITIES ................................................................................... iii
INTRODUCTION ..................................................................................................... 1
INTEREST OF AMICUS CURIAE .......................................................................... 2
STATEMENT OF THE ISSUES............................................................................... 4
STATEMENT OF THE CASE .................................................................................. 5
I.
II.
TABLE OF AUTHORITIES
Page(s)
Cases
Barclay v. United States,
351 F. Supp.2d 1169 (D. Kan. 2004) ...................................................................18
Barclay v. United States,
443 F.3d 1368 (Fed. Cir. 2006).................................................................... passim
Birt v. Surface Trans. Bd.,
90 F.3d 580 (DC Cir. 1996) ...................................................................................9
Burnet v. Coronado Oil & Gas Co.,
285 U.S. 393 (1932) .............................................................................................32
Caldwell v. United States,
391 F.3d 1226 (Fed. Cir. 2004).................................................................... passim
Citizens Against Rails-to-Trails v. Surface Trans. Bd.,
267 F.3d 1144 (DC Cir. 2001) ...............................................................................8
Creppel v. United States,
41 F.3d 627 (Fed. Cir. 1994)................................................................................19
Ellamae Phillips Co. v. United States,
564 F.3d 1367 (Fed. Cir. 2009)....................................................................... 4, 14
Grantwood Village v. Missouri Pacific RR Co.,
95 F.3d 654 (8th Cir. 1996) ............................................................................ 7, 10
Grantwood Village v. United States,
45 Fed. Cl. 771 (2000) .........................................................................................21
Great Northern Railway Co. v. United States,
315 U.S. 363 (1942) .............................................................................................30
iii
iv
Preseault v. I.C.C.,
494 U.S. 1 (1990) ......................................................................................... passim
Preseault v. I.C.C.,
853 F.2d 145 (2nd Cir. 1988)...............................................................................11
Preseault v. United States,
100 F.3d 1525 (Fed. Cir. 1996)................................................. 4, 5, 10, 13, 14, 20
Renewal Body Works, Inc. v. United States,
64 Fed. Cl. 609 (2005) .........................................................................................18
Ruckelshaus v. Monsanto Co.,
467 U.S. 986 (1984) .............................................................................................11
Samuel C. Johnson 1988 Trust v. Bayfield County, Wis.,
649 F.3d 799 (7th Cir. 2011) .................................................................................5
Toews v. United States,
376 F.3d 1371 (Fed. Cir. 2004)........................................................... 4, 12, 13, 18
Webbs Fabulous Pharmacies, Inc. v. Beckwith,
449 U.S. 155 (1980) .............................................................................................11
Wisconsin Cent. Ltd., No. AB-303 (Sub-No. 18X)
(Surface Trans. Bd. July 28, 2009) ........................................................................9
Other Authorities
Rail Abandonments Supplemental Trails Act Procedures,
4 I.C.C.2d 152 (1987) ............................................................................................9
Restatement (Third) of Property: Servitudes 7.4 .....................................................5
Restatement (Third) of Property: Servitudes 1.2(1) ................................................5
Twenty-Five Years of Railbanking: A Review and Look Ahead, Hearing Before
the Surface Trans. Bd., Ex Parte No. 690 (July 8, 2009).......................................8
vi
INTRODUCTION
To avoid paying the Caquelin family $900, the government wants this Court
to sit en banc and overturn four of its prior decisions representing the collective
wisdom of more than ten members of this Court and adopt a new rule that is contrary
to the Supreme Courts and this Courts Takings Clause jurisprudence. What the
government asks this Court to do would throw this Courts Trails Act jurisprudence
into a thicket.
This Court should deny the governments request for rehearing en banc and
summarily affirm the Court of Federal Claims (CFC) decision that faithfully
followed this Courts controlling precedent.
This brief is not authored, in whole or part, by any partys counsel nor has any
party or partys counsel contributed money intended to fund the preparation or
submission of this brief. All parties have consented to the filing of this brief.
2
The National Trails System Act of 1968, as amended in 1983, 16 U.S.C. 1241, et
seq.
2
This case is important because, should this Court overturn four of this Courts
prior decisions as the government asks, the certainty of title to tens of thousands of
acres of land would be unsettled.
Should this Court sit en banc to overturn Caldwell v. United States, 391
F.3d 1226 (Fed. Cir. 2004), Barclay v. United States, 443 F.3d 1368 (Fed. Cir. 2006),
Illig v. United States, 274 Fed. Appx 883 (Fed. Cir. 2008), and Ladd v. United
States, 630 F.3d 1015 (Fed. Cir. 2010) (Ladd I)?
2.
494 U.S. at 5. With the advent of the Interstate Highway System and airlines,
railroads no longer needed this much right-of-way and began abandoning unused
lines. Id. at 3. Railroad rights-of-way are common law easements granted for the
limited purpose of operating a railroad across a strip of land. See Brandt, 134 S.Ct.
at 1265.
The essential features of easements including, most important here,
what happens when they cease to be used are well settled as a matter
of property law. *** [E]asements *** may be unilaterally terminated by
abandonment, leaving the servient owner with a possessory estate
unencumbered by the servitude. In other words, if the beneficiary of
the easement abandons it, the easement disappears, and the landowner
resumes his full and unencumbered interest in the land. 4
A railroad with an unneeded railway line has two options. The railroad may
petition the STB to discontinue operations over the line. A discontinuance allows
Reversionary is a shorthand term for the fee owners interest. Instead of calling
the property owners retained interest a fee simple burdened by the easement, this
alternative labels the property owners retained interest a reversion in fee.
Preseault II, 100 F.3d at 1533. See also Brandt, 134 S.Ct. at 1266, n.4.
4
the petitioning railroad to retain ownership of the right-of-way and resume railroad
operations in the future. But the petitioning railroad remains subject to the STBs
authority to compel that specific railroad to restore service over the line. This is a
possible liability for the railroad because a shipper on the line could force the railroad
to restore service when doing so is unprofitable for the railroad.
Alternatively, the railroad may petition to abandon the railroad line.
Abandonment allows the railroad to discontinue service and salvage the track. When
the STB grants a petition to abandon a railroad right-of-way, the railroad has no
further obligation to preserve the right-of-way and the STBs jurisdiction terminates.
For railway lines with no prospect of future use, abandonment is a much more
attractive option than discontinuance.
Congress wanted to preserve otherwise abandoned railroad corridors by
delaying the railroads authority to abandon the corridor for six-months, to allow the
railroad to possibly sell the right-of-way to a non-railroad for a public recreational
trail. See National Wildlife Federation v. I.C.C., 850 F.2d 694, 697 (DC Cir. 1988).
But this didnt work.
recognized that these measures [the public use provision delaying disposition for
six-months] ha[d] not been successful in establishing a process through which
railroad rights-of-way which are not immediately necessary for active service can be
utilized for trail purposes. Preseault I, 494 U.S. at 6. Delaying abandonment for
6
six months didnt succeed because, under state law, the railroad had nothing to sell.
Nemo dat quod non habet one cannot convey what he does not own.
The Supreme Court explained, many railroads do not own their rights-ofway outright but rather hold them under easements [and] the property reverts to
the abutting landowner upon abandonment of rail operations. Preseault I, 494 U.S.
at 7. Congress adopted section 8(d) 5 to fix this problem by pre-empting state law
and allowing a railroad to sell the otherwise abandoned right-of-way to a nonrailroad trail-user notwithstanding the fee owners state law reversionary interests. 6
The Supreme Court explained section 8(d) pre-empt[s] the operation and
effect of certain state laws that conflict with or interfere with federal authority over
the same activity. Preseault I, 494 U.S. at 21 (OConnor, J., concurring). 7 State
courts cannot enforce or give effect to asserted reversionary interests. Id. at 22. 8
Section 8(d) states such interim use [for public recreation or railbanking] 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.
Quoting Chicago & North Western Transp. Co. v. Kalo Brick & Tile Co., 450 U.S.
311, 319 (1981). See also Grantwood Village v. Missouri Pacific RR Co., 95 F.3d
654 (8th Cir. 1996).
8
When the STB invokes section 8(d) it denies an owner his reversionary right to
possess his land and perpetually forestalls termination of the railroad easement. See
National Wildlife, 850 F.2d at 705; Citizens Against Rails-to-Trails v. Surface Trans.
Bd., 267 F.3d 1144, 1149 (DC Cir. 2001) (CART); NARPO, 158 F.3d at 139.
Section 8(d) can only be invoked after a railroad first petitions the STB for
authority to abandon the right-of-way and after the STB grants this petition. 49
U.S.C. 10903(a). The STB may only grant a railroads petition to abandon a rightof-way if the STB first finds abandoning the railroad line is in the public interest and
there is no current or future need for railroad service. 49 U.S.C. 10905; 49 C.F.R.
1152.28.
If the railroad and trail-user agree, the railroad transfers the right-of-way to
the trail-user.
agreement not filed with the STB, and owners are never told of the agreement
between the railroad and trail-user. 9 As a further consequence of invoking section
8(d), the STB retains jurisdiction of the corridor, perpetually pre-empting state law,
and may authorize any railroad (not just the original railroad) to build a new railroad
line across the owners land. The STB can indefinitely extend the period for the
See Twenty-Five Years of Railbanking: A Review and Look Ahead, Hearing Before
the Surface Trans. Bd., Ex Parte No. 690 (July 8, 2009).
8
railroad to reach a trail-use agreement. See Birt v. Surface Trans. Bd., 90 F.3d 580,
589 (DC Cir. 1996); and Rail Abandonments Supplemental Trails Act Procedures,
4 I.C.C.2d 152 (1987). The STB will also freely issue replacement NITUs
substituting new and different trail-users even after the trail-use negotiating period
has expired. See Barclay, 443 F.3d at 1376 (despite expiration of the original NITU,
replacement NITU precluded consummation of abandonment and reversion of
landowners interest).
The duration between when the government originally invokes section 8(d)
and when trail-use is established or negotiations with trail-users end without any
agreement frequently last a decade or longer far longer than the six-year statute of
limitations. See, e.g., Wisconsin Cent. Ltd., No. AB-303 (Sub-No. 18X) (Surface
Trans. Bd. July 28, 2009) (NITU issued March 1998 and extended until January
2010). 10 Thus, if a reversionary owner is required to wait until the outcome of the
original invocation of section 8(d) is known with either construction of a public
recreational trail or the government surrendering jurisdiction of the corridor without
10
The Rails-to-Trails Conservancy says the government invoked section 8(d) eightytwo times in the last six years. Of those eighty-two orders, trail-use agreements were
reached in thirty-two cases and the remaining fifty remain in effect or expired
without agreement. Amicus Brief, p. 19.
9
a public trail the statute of limitations will have expired. During this time the
owners reversionary interest has been forestalled.
II.
compensable taking, and if so, is section 8(d) constitutional? (2) Did the original
railroad acquire title to the fee estate or only an easement to operate a railway across
the fee owners land? And, (3) when does the reversionary owners claim for
compensation accrue?
A.
10
interest can or would vest until the ICC determines that abandonment is
appropriate. Id. at 23 (quoting Preseault v. I.C.C., 853 F.2d 145, 151 (2nd Cir.
1988)).
Justice OConnor explained the governments error:
This view conflates the scope of the ICCs power with the existence of
a compensable taking and threatens to read the Just Compensation
Clause out of the Constitution. The ICC may possess the power to
postpone enjoyment of reversionary interests, but the Fifth Amendment
and well-established doctrine indicate that in certain circumstances the
Government must compensate owners of those property interests when
it exercises that power.
Preseault I, 494 U.S. at 23.
The Supreme Court held, by deeming interim trail use to be like
discontinuance rather than abandonment, Congress prevented property interests
from reverting under state law. Preseault I, 494 U.S. at 8. The Supreme Courts
analysis of section 8(d) turned upon Congress prevent[ing] property interests from
reverting under state law. Id. at 22. The Court found that when the government
invokes section 8(d) it redefines an owners existing state-law property interest by
ipse dixit and is a categorical taking. Preseault I, 494 U.S. at 23 (quoting Webbs
Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 164 (1980), and Ruckelshaus
v. Monsanto Co., 467 U.S. 986, 1012 (1984)). The Supreme Court, nonetheless,
found section 8(d) constitutional because an owner could obtain compensation under
the Tucker Act.
11
In Toews, 376 F.3d at 1376, this Court explained, It is elementary law that if
the Government uses an existing railroad easement for purposes and in a manner
not allowed by the terms of the grant of the easement, the Government has taken the
landowners property for the new use. In Ladd I, this Court held that, when
invoked, section 8(d) destroys and effectively eliminates the fee owners right
to their property. See Ladd I, 630 F.3d at 1019. This Courts holding in Ladd I is
in accord with the DC Circuits decision in NARPO, 158 F.3d at 139, holding,
When [a landowners] easement reversion is blocked, the interim trail use has been
deemed a taking and the holder of a reversionary interest that does not vest
because of a trail use may seek compensation.
B.
After losing its regulatory taking theory the government adopted a new
argument claiming the easements originally granted railroads in the 1880s and early
1900s gave the railroad title to the fee simple estate in the land under the railroads
right-of-way or granted an essentially unlimited easement for anything allowing
the railroad to sell the easement to a non-railroad for uses (like public recreation)
that have nothing to do with operating a railroad. The government argued so-called
railbanking (intentionally not operating a railroad across the land) is equivalent to
operating a railroad.
12
This Court rejected the governments argument. See Toews, 376 F.3d at 1376
(it appears beyond cavil that use of these easements for a recreational trail for
walking, hiking, biking, picnicking, frisbee playing, with newly-added tarmac
pavement, park benches, occasional billboards, and fences to enclose the trailway
is not the same use made by a railroad, involving tracks, depots, and the running of
trains.). See also Preseault II, 100 F.3d at 1554 (Realistically, nature trails are for
recreation, not transportation.) (Rader, J., concurring). Judge Rader explained,
[t]he vague notion that the State may at some time in the future return the property
to the use for which it was originally granted, does not override its present use of
that property inconsistent with the easement. That conversion demands
compensation. Moreover, the United States facilitated that conversion with its laws
and regulatory approval. Id. at 1552.
Railbanking and public recreation are uses of the owners land the railroad
was not granted in the original right-of-way easement. See Preseault II, 100 F.3d at
1547-48, 1550 (citing Lawson v. State, 730 P.2d 1308 (Wash. 1986), and Pollnow
v. State Dept. of Natural Res., 276 N.W.2d 738 (Wis. 1979); see also Michigan Dept.
of Natural Res. v. Carmody-Lahti Real Estate, 699 N.W.2d 272 (Mich. 2005).
Sitting en banc in Presault II, 100 F.3d at 1533, this Court adopted a threepart test to determine when an owner is entitled to compensation. (1) whether the
13
railroad acquired only an easement or obtained a fee simple estate; (2) if the railroad
acquired only an easement, were the terms of the easement limited to use for railroad
purposes, and; (3) even if the original railroad easement encompassed public
recreation, had the original easement otherwise terminated. Ellamae Phillips, 564
F.3d at 1373. Judge Lettow correctly summarized this Courts holding: in railsto-trails cases, a taking by the government is established if the railroad acquired only
an easement, the easement was limited to railroad purposes, and the scope of the
[original] easement does not include recreational trail use. Opinion, p. 7.
C.
An owners claim for compensation arises when the owner first has
notice of the STBs decision invoking section 8(d).
limitation period in 28 U.S.C. 2501 begins to run when the government first invokes
section 8(d). See Caldwell, Barclay, and Illig. This Court announced a bright-line
rule that a Trails Act taking occurs, and an owners claim for compensation accrues,
when the STB first invokes section 8(d) because that is the only government action
that blocks an owners state-law reversionary right from vesting. Barclay, 443 F.3d
at 1378.
14
1.
Caldwell
corridor and to preclude the vesting of state law reversionary interests in the rightof-way. Caldwell, 391 F.3d at 1233-34 (emphasis in original).
The owners sought, and the government opposed, rehearing. The government
argued:
Unlike the usual physical occupation case, the landowner in a Trails
Act taking case is already deprived of possession. Thus, the question
is not when the owner loses the right to possess the property (since he
is already not in possession), but rather when he would otherwise have
recovered ownership of the easement were it not for the operation of
the Trails Act. The dissents focus on when the [trail-user] acquired the
right to possess and occupy the property is misplaced in this unique
context, because Caldwell was not in possession of the corridor in the
first place and his alleged reversionary rights were interrupted (if at all)
long before title transferred to the [trail-user].
Government Opposition
to Rehearing, p. 5. 11
The government said the argument that the NITU works a regulatory taking
and that a single Government action under the Trails Act might work two separate
takings is clearly incorrect. Id. at 7. The government explained:
This Court has long held that a single Government action might cause
a single taking, which might turn out to be temporary; if the taking later
becomes permanent, it is merely the continuation of the initial taking,
not a separate taking. Under the Trails Act, the STB takes only one
action it issues the NITU that might cause one taking. The taking
might turn out to be temporary if, for example, the interim trail use
agreement is terminated and the rail carrier subsequently abandons the
line. But the temporary taking that might be caused when the NITU
and interim trail use agreement prevent reversion under state-law does
11
2005 WL 4146730, at *5 (Fed. Cir. No. 03-5152, filed March 10, 2005).
17
not end when (or if) interim trail use ensues. Rather, that same potential
taking continues and becomes permanent.
Id. at 8-9.
This Court denied rehearing. The owners petitioned for certiorari, which was
denied. 547 U.S. 826 (2005).
2.
This Court revisited this same argument a year later in Barclay v. United
States, 351 F. Supp.2d 1169 (D. Kan. 2004), and Renewal Body Works, Inc. v. United
States, 64 Fed. Cl. 609 (2005). The same panel from Caldwell heard this appeal.
Judge Dyk wrote the majority decision over Judge Newmans dissent.
Renewal involved the same railroad right-of-way as Toews. Barclay involved
three abandoned railroad rights-of-way in Kansas. In Barclay the STB issued an
order invoking section 8(d) and, when the original negotiation period lapsed, the
STB issued a series of new NITUs extending the negotiating period allowing the
railroad to negotiate with a series of different trail-users.
The owners argued their claim didnt accrue until the railroad transferred its
interest to the trail-user. The owners said Caldwell was wrongly-decided. 12 This
Court rejected the owners arguments and affirmed its decision in Caldwell:
12
Quoting Caldwell, 391 F.3d at 1233-34, and Creppel v. United States, 41 F.3d
627, 631 (Fed. Cir. 1994); citations omitted; emphasis in original; paragraph breaks
added.
14
the trail operator to notify the STB in the event that title is transferred. And,
preemption of the landowners alleged reversionary rights occurred, if at all, well
before title was transferred to the trail operators. Id. at 6. The government said,
this Court explained in Preseault II [that] the landowners taking claim is not
premised on the conversion of the right-of-way to a trail, but rather the
Governments action which blocks the landowners state-law reversionary interests
from vesting, as they otherwise would when the right-of-way is abandoned. Id. at
7.
Then, quoting Caldwell, the government argued, a taking occurs when the
owner is deprived of use of the property, which in the Trails Act context occurs by
blocking the easement reversion. Id. at 9. And, the government said, the question
is not when the owner loses the right to physically occupy the property, but rather,
when the owner would otherwise have recovered full possession of the easement,
were it not for operation of the Trails Act. Id. Finally, the government noted,
arguments about the potential for a temporary regulatory takings claim is inapposite
in the context of a rails-to-trails conversion, which this Courts precedent seems to
have characterized as a physical takings claim. Id. at 11.
This Court denied rehearing. The owners sought certiorari, which was denied.
549 U.S. 1209 (2007).
20
3.
Illig
The Illigs and more than sixty of their neighbors own homes on the same
abandoned railroad corridor that was the subject of Grantwood Village v. MoPac,
Grantwood Village v. United States, 45 Fed. Cl. 771 (2005), and Miller v. United
States, 67 Fed. Cl. 542 (1998). In Illig the CFC held the government owed these
owners compensation as in Grantwood Village and Miller. Illig v. United States,
No. 98-934L (Fed. Cl. Oct. 22, 2001). The Justice Department agreed to pay these
Missouri owners a total of more than $6 million. The settlement was to be approved
in December 2004. Two days before the hearing to approve settlement and enter
final judgment, this Court issued its decision in Caldwell. On the basis of Caldwell
the government withdrew from the settlement because, under Caldwell, the Illig
owners claims were now time-barred. The CFC followed Caldwell and Barclay
and dismissed the Illig owners claims. Illig v. United States, 67 Fed. Cl. 47, 56
(2005).
The owners appealed. In a unanimous decision Judges Dyk, Mayer, and Linn
affirmed Caldwell and Barclay to be controlling and summarily affirmed the CFCs
dismissal of the owners claims as time-barred. Illig v. United States, 274 Fed.
Appx 883, 884 (2008). Rehearing en banc was sought and denied without dissent.
The owners petitioned the Supreme Court for a writ of certiorari. The Supreme
21
Court directed then-Solicitor General, now-Justice Kagan to reply. See Brief for the
United States in Opposition to Petition for Writ of Certiorari, 2009 WL 1526939.
Solicitor General Kagan wrote, [i]ssuance of the NITU thus marked the
moment at which federal law (1) at least temporarily forestalled the vesting of statelaw reversionary interests, and (2) authorized indefinite preclusion of such
reversionary interests, contingent on the finalization of an interim trail use
agreement. Id. at 10. Solicitor General Kagan continued, by the time a trail use
agreement is signed, federal law has already forestalled any such reversion. As the
Federal Circuit has explained, a NITU stands as a barrier to reversion so long as it
is in effect. Id. at 12 (quoting Barclay, 443 F.3d at 1374). Solicitor General Kagan
continued, [p]etitioners contend that any taking that commences upon issuance of
the NITU is temporary at the outset, and that their taking claim should not accrue
until the taking is transformed into a permanent interference. The court of appeals
has correctly rejected that contention. Id.
Solicitor General Kagan noted, [t]he issuance of the NITU thus marks the
finite start to either temporary or permanent takings claims. When the NITU is
issued, all the events have occurred that entitle the claimant to institute an action
based on federal-law interference with reversionary interests, and any takings claim
premised on such interference therefore accrues on that date. 2009 WL 1526939,
at *12-13 (quoting Caldwell, 391 F.3d at 1235). Solicitor General Kagan said this
22
Courts bright-line rule [in Caldwell and Barclay] has the singular virtue of
providing certainty to prospective claimants of when their claims accrue and when
the limitations period expires. Id. at 15.
After Solicitor General Kagan filed the governments reply, the Supreme
Court denied certiorari. 557 U.S. 935 (2009).
4.
Ladd
The Ladds and their neighbors own ranches on the US-Mexican border in
Arizona. The San Pedro Railroad petitioned the STB to abandon an eighty-twomile-long railway line. In July 2006 the railroad and a potential trail-user requested
the STB invoke section 8(d). Ladd I, 630 F.3d at 1017. The STB invoked section
8(d). After the STB issued the 2006 NITU, the railroad removed the tracks from the
right-of-way. When the Ladds and their neighbors learned of the STBs order taking
their reversionary right to their property, they sued for compensation.
The period for the railroad and trail-user to negotiate a trail-use agreement
expired without any agreement. Ladd I, 630 F.3d at 1018. The STB issued new
NITUs extending the negotiating period for a portion of the right-of-way and
substituted different trail-users. But, alas, the railroad didnt reach any agreement
with any trail-user. Id. For one sixteen-mile-long segment of the right-of-way the
railroad consummated abandonment and the owners regained unencumbered title to
their land. But, for the remaining seventy miles, the STBs jurisdiction continues
23
and the owners state-law reversionary rights remain, in Solicitor General Kagans
words, indefinitely precluded. No public trail has been built across the corridor
but, because the owners cannot fence the corridor or exclude others from the land,
illegal immigrants and drug smugglers now use this abandoned railroad corridor to
enter the country from Mexico. Id. at 1018.
Under Caldwell, Barclay, and Illig the governments categorical obligation to
compensate these Arizona ranchers arose when the STB invoked section 8(d)
blocking their state-law reversionary right to possess their property.
But the
government argued the opposite and claimed the original order invoking section 8(d)
is, at most, a temporary regulatory taking. 15 Judge Hodges bought the governments
argument. Ladd v. United States, 90 Fed. Cl. 221, 227-28 (2009). The Arizona
ranchers appealed and this Court reversed and unanimously affirmed Caldwell,
Barclay, and Illig. 630 F.3d 1015 (2010).
During oral argument Judge Moore noted the governments regulatory taking
argument was the same argument the government made in Preseault I which the
Supreme Court mocked: Thats the argument you made unsuccessfully to the
Supreme Court where Justice Scalia actually made fun of you. I mean, I dont
15
think thats going to work on us at this point. You cant say, Oh yeah, well they
didnt lose anything because they didnt [have] anything the day before. 16 See
Appellees Brief, p. 2, quoting Chief Justice Rehnquist and Justice Scalia.
Judge Moore, joined by Judges Rader and Linn, unanimously rejected the
governments argument.
Governments present suggestion that the NITU is nothing more than a temporary
regulatory hold on the railroads authority to abandon its railway. Ladd I, 630 F.3d
at 1025.
The government sought, and this Court denied, rehearing. 646 F.3d 910
(2011). Judges Rader, Newman, Lourie, Bryson, Linn, Dyk, Prost, OMalley, and
Reyna voted to deny rehearing en banc and Judges Moore and Gajarsa dissented. In
their dissent Judges Gajarsa and Moore noted, [o]ur precedent, however, assumes
that the issuance of an NITU is a physical taking. Id. The government did not seek
certiorari.
After this Court remanded Ladd to determine compensation, the government
uncovered an earlier order the ICC issued in 1998 invoking section 8(d). Ladd II,
713 F.3d at 651. This earlier NITU was not a public record and, despite almost a
half-decade of litigation, even the governments lawyers didnt know this earlier
16
NITU existed. Id. But the government now reverted back to its earlier position that
a Trails Act taking occurs when the original order invoking section 8(d) is issued
and, thus, the government argued, these owners claims were time-barred. Id. at
652; Ladd v. United States, 108 Fed. Cl. 609, 612 (2012).
Judge Hodges again accepted the governments argument. 108 Fed. Cl. at
616. The owners appealed and Judges Rader, Moore, and Lourie unanimously
reversed.
This Court held the issuance of the earlier NITU was inherently
unknowable and the claim accrual suspension rule applied. Ladd II, 713 F.3d at 65253. 17 The government did not seek rehearing or certiorari.
In sum, the argument the government makes today has been considered and
rejected by five panels of this Court and this Court has rejected rehearing this
argument en banc four times. More than ten members of this Court (Judges Prost,
Dyk, Rader, Linn, Lourie, Bryson, OMalley, Reyna, Newman, and Michel) voted
to reject rehearing this argument en banc. While Judge Newman originally dissented
in Caldwell and Barclay, Judge Newman did not dissent from the denial of rehearing
in Ladd I. And, while Judges Moore and Gajarsa voted to rehear this argument, they
recognized this Courts holding in Caldwell, Barclay, and Illig is settled law.
17
Furthermore, more than four times the Supreme Court denied certiorari and refused
to hear this argument.
III.
This lawsuit.
In 1866 the Eldora Railroad and Coal Company acquired an easement upon
which it built a railway line to transport coal. Opinion, pp. 2-3. By 2013 Eldora
Railroads successor, North Central Railroad, no longer needed or used this railway
line and petitioned the STB for authority to abandon this line. The STB granted the
railroads petition to abandon the line in July 2013.
The City of Ackley and the Iowa National Heritage Foundation asked the STB
to invoke section 8(d) of the Trails Act. In July 2013 the STB granted this request,
invoked section 8(d), and issued a NITU pre-empting the Caquelins state-law
reversionary right to possess their land.
The original July 2013 NITU provided a 180-day period for the railroad to
negotiate with the Iowa Trails Council. Two months later, the Iowa National
Heritage Foundation asked the STB to extend the negotiating period six-months so
it could negotiate a trail-use agreement with the railroad. Ultimately the railroad
didnt reach a trail-use agreement with either trail-group and, in April 2014, the
railroad notified the STB that it consummated abandonment of the railroad line.
Upon the railroad consummating abandonment, section 8(d) no longer forestalled
the Caquelins reversionary interest in their land.
27
The Caquelins sued for compensation, and the CFC awarded the Caquelins
$900 for the nine-month taking of their property. The government acknowledged
that the easements granted the North Central Railroad were limited to railroad
purposes and did not include recreational trail use. Opinion, p. 7. However, the
government argued, because the Caquelins land was not physically used for public
recreation, the government didnt need to pay the Caquelins the $900 the CFC
awarded. The government said the invocation of section 8(d) gave rise to, at most,
a temporary regulatory taking for which the Caquelins are due nothing. The
government admits the CFC rightly rejected the governments argument under this
Courts controlling precedent in Caldwell and Ladd I. See Gov. Brief, pp. 1-2. But,
the government says this Court should overrule Ladd Is holding that a Trails Act
taking claim based on a NITU that lapses without a trail-use agreement must be
treated as a physical takings claim. Id. at 31. And, the government says this Court
should overrule Caldwell and hold that a physical taking claim under the Trails Act
can accrue only when an interim trail-use agreement is reached. Id. at 32.
28
ARGUMENT
Overturning this Courts bright-line rule in Caldwell (affirmed in Barclay,
Illig, and Ladd I) would unsettle land title and throw this Courts Trails Act
jurisprudence into a thicket. The government asks this Court to hold invocation of
section 8(d) gives rise to multiple different takings occurring at different times.
Accepting the governments argument will cast Trails Act takings adrift without any
clear rule establishing when an owners Trails Act claim accrues and when the
statute of limitations begins to run. The government offers no coherent answer to
either question.
Does the owners claim for compensation arise when the railroad agrees to
sell the abandoned right-of-way to a trail-user? If so, what happens if (as in
Caldwell) the railroad and trail-user amend the agreement, make the agreement
contingent upon future events, or assign the agreement to a different trail-user? Does
the owners claim accrue when the railroad conveys title to the trail-user? Or does
the owners claim accrue when the trail-user physically constructs a trail across the
owners land? And, if claim accrual is tied to the trail-use-agreement, how is the
owner to know his claim accrued? A trail-use agreement is not a public record.
In Leo Sheep, the Supreme Court held, this Court has traditionally recognized
the special need for certainty and predictability where land titles are concerned, and
we are unwilling to upset settled expectations to accommodate some ill-defined
29
power to construct public thoroughfares without compensation. 440 U.S. at 68788. The Court reaffirmed this principle in Brandt, 134 S.Ct. at 1268 (We decline
to endorse [the governments] stark change in position, especially given the special
need for certainty and predictability where land titles are concerned.) (quoting Leo
Sheep, 440 U.S. at 687). The Court held, [t]he Government loses that argument
today, in large part because it won when it argued the opposite before this Court.
Brandt, 134 S.Ct. at 1264. 18
So too here. In Caldwell, Barclay, and Illig the government argued section
8(d) gives rise to a single taking when the government first invokes this provision
pre-empting an owners state-law reversionary interest. The government won and
the landowners lost. Because the statute of limitations had run the government didnt
pay hundreds of owners whose property the government took in Caldwell, Barclay,
and Illig and, by reason of this precedent, the government avoided paying thousands
of other owners whose property the government took because, under this precedent,
these owners right to compensation is now time-barred.
18
In Great Northern Railway Co. v. United States, 315 U.S. 363 (1942), the
government argued rights-of-way granted railroads under the 1875 Act were only
common-law easements and the railroad did not acquire title to the land and minerals
under the rights-of-way. The government won. The government later decided it
would benefit if the railroad acquired title to the fee estate allowing the railroad and
the railroads successor to use the land for any purpose.
30
Now the government wants to run with the fox and hunt with the hounds. The
government wants this Court to overturn Caldwell, Barclay, Illig, and Ladd and
adopt a new rule holding the opposite. But the government should be careful about
what it asks for. If the new rule is that a Trails Act taking claim does not accrue
until the owner learns of the trail-use agreement, there are thousands of miles of
abandoned railroad rights-of-way where more than six years have passed since the
STB first issued an order invoking section 8(d) but there is not yet a trail-use
agreement or a public trail. Under this Courts current rule these owners claims are
time-barred, but under the governments new rule, many of these owners could now
bring a claim for compensation. 19
19
Under the claim accrual rule and Due Process Clause the statute of limitations
does not begin running until the claimant knew or should have known that the
claim existed. Ladd II, 713 F.3d at 653.
31
CONCLUSION
This Court should not overturn Caldwell, Barclay, Illig, and Ladd I. These
decisions are rightly-decided. But, even if one believed this Court wrongly-decided
these cases, for more than a decade the government and landowners have lived under
this settled jurisprudence. Overturning these decisions to announce a new and
contrary rule will unsettle established land title.
In John R. Sand & Gravel Co. v. United States, 552 U.S. 130, 139 (2008),
Justice Breyer said, Justice Brandeis once observed that in most matters it is more
important that the applicable rule of law be settled than that it be settled right. To
overturn a decision settling one such matter simply because we might believe that
decision is no longer right would inevitably reflect a willingness to reconsider
others. And that willingness could itself threaten to substitute disruption, confusion,
and uncertainty for necessary legal stability. 20
This Court should deny the governments request that it sit en banc to overturn
this Courts decisions in Caldwell, Barclay, Illig, and Ladd I. This Court should
instead summarily affirm the CFCs decision correctly applying this Courts
controlling precedent.
20
Quoting Burnet v. Coronado Oil & Gas Co., 285 U.S. 393, 406 (1932).
32
Respectfully submitted,
ARENT FOX LLP
/s/ Mark F. (Thor) Hearne, II
Mark F. (Thor) Hearne, II
Meghan S. Largent
Lindsay S.C. Brinton
Stephen S. Davis
1717 K Street, NW
Washington, DC 20006
(202) 857-6000
[email protected]
Counsel for Amici Curiae
33
APPENDIX
TABLE OF CONTENTS
Date
06/21/2005
Document Description
Caldwell v. United States Petition for
Certiorari, 2005 WL 1503653 (S. Ct. No. 041728, filed June 21, 2005)
Appx Pages
SAppx1
03/10/2005
SAppx18
12/14/2004
SAppx37
07/21/2006
SAppx57
04/11/2006
SAppx76
12/14/2010
SAppx87
04/09/2013
SAppx108
05/29/2009
Counsel of Record
*i QUESTIONS PRESENTED
I. Should a Trails Act taking (as discussed in this Court's Preseault v. ICC decision) be analyzed as a per se physical
taking of an easement in land, or as a regulatory taking of that easement?
II. If a government agency authorizes a third party to take possession of a citizen's land upon the third party's satisfaction
of certain conditions, does a taking occur (a) upon the issuance of the regulatory authorization or (b) when (and if) the
third party satisfies the conditions and takes possession?
SAppx1
i
ii
iii
v
1
1
1
1
1
4
6
6
7
8
9
14
18
19
23
24
28
30
App. i
App. 1
*v TABLE OF AUTHORITIES
Cases
Barclay v. United States, 351 F. Supp. 2d 1169 (D. Kan.
22
2004) ...............................................................................
Caldwell v. United States [Caldwell I], 57 Fed. Cl. 193
1, 10, 11, 12, 13
(2003) ..............................................................................
Caldwell v. United States [Caldwell II], 391 F.3d 1226
passim
(Fed. Cir. 2004) ..............................................................
Creppel v. United States, 41 F.3d 627 (Fed. Cir. 1994) .....
13
Dunlap v. United States, 173 U.S. 65 (1899) ....................
30
First English Evangelical Lutheran Church of Glendale v.
29
County of Los Angeles, 482 U.S. 304 (1987) ....................
Kirby Forest Indus., Inc. v. United States, 467 U.S. 1
12, 22
(1984) ..............................................................................
Lingle v. Chevron, ___ U.S. ___, 125 S.Ct. 2074 (2005) ....
U.S. ___, 125 S.Ct. 2074 (2005) 24, 25
Loretto v. Teleprompter Manhattan CATV Corp., 458
15, 25
U.S. 419 (1982) ...............................................................
Lucas v. South Carolina Coastal Council, 505 U.S. 1003
25
(1992) ..............................................................................
NARPO v. STB, 158 F.3d 135 (D.C. Cir. 1998) ..............
3
Nollan v. California Coastal Comm'n, 483 U.S. 825 (1987)
passim
.........................................................................................
Penn Central Transp. Co. v. New York City, 438 U.S. 104
23
(1978) ..............................................................................
Preseault v. ICC [Preseault I], 494 U.S. 1 (1990) ............
passim
*vi Preseault v. United States [Preseault II], 100 F.3d
passim
1525 (Fed. Cir. 1996) ......................................................
Tahoe-Sierra Preservation Council, Inc. v. Tahoe
16, 24, 25, 29
Regional Planning Agency, 535 U.S. 302 (2002) ...............
Toews v. United States, 376 F.3d 1371 (Fed. Cir. 2004) ...
21
United States v. Clarke, 445 U.S. 253 (1980) ...................
24, 27
United States v. Dow, 357 U.S. 17 (1958) ........................
passim
Constitutional Provisions, Statutes, and Regulations
U.S. Const. amend. V .....................................................
2
16 U.S.C.
1241 et seq. .....................................................................
4
1247(d) ............................................................................
4, 14, 27
28 U.S.C.
1254(1) ............................................................................
1
1295(a)(2) ........................................................................
18
1346 ................................................................................
9
SAppx2
1491 ................................................................................
2401 ................................................................................
2501 ................................................................................
49 U.S.C.
10502 ...............................................................................
10903 ...............................................................................
49 C.F.R.
1152.29 ............................................................................
*vii Other Authorities
Black's Law Dictionary (8th ed. 2004) .............................
H.R. Rep No. 98-28, reprinted in 1983 U.S.C.C.A.N. 112
.........................................................................................
Sup. Ct. R. 13.1 ..............................................................
Sup. Ct. R. 13.3 ..............................................................
2, 9
18
2, 10, 18
5
5
5
3
19
1
1
*1 William B. Caldwell, III, and Ben Frank Billings, III, for themselves and as representatives of a class of similarly
situated persons, respectfully petition for a writ of certiorari to review the judgment of the U.S. Court of Appeals for
the Federal Circuit.
OPINIONS BELOW
The December 14, 2004 opinion of the U.S. Court of Appeals for the Federal Circuit (Pet. App. 1) is published at 391
F.3d 1226. The June 30, 2003 opinion of the U.S. Court of Federal Claims (Pet. App. 25) is published at 57 Fed. Cl. 193.
JURISDICTION
This Court has jurisdiction over the Petition for Certiorari pursuant to 28 U.S.C. 1254(1) and Rules 13.1 and 13.3 of
this Court. This is a petition for writ of certiorari to review a decision of the U.S. Court of Appeals, Federal Circuit
dated December 14, 2004. On January 28, 2005, the Petitioners filed a timely petition for rehearing en banc in the Court
of Appeals for the Federal Circuit, which was denied by that court on March 23, 2005.
As discussed in further detail infra at 18, the U.S. Court of Appeals for the Federal Circuit has exclusive jurisdiction over
appeals in all federal suits founded on the Constitution, including the taking claims alleged in this case.
SAppx3
Ben Frank Billings, III and William Caldwell, III (the Petitioners) are fee simple owners of land in Columbus, Georgia
that was burdened by a railroad easement owned by Norfolk Southern Railroad Company (Norfolk Southern or
the Railroad). On October 9, 1996, pursuant to the Trails Act, Norfolk Southern purported to convey its interest in a
portion of the railroad right-of-way known as the Warm Springs Line by deed to the City of Columbus (the City),
which planned to operate it as a public trail.
On October 7, 2002, Billings and Caldwell filed suit in the Court of Federal Claims under the Tucker Act, 28 U.S.C.
1491 (Pet. App. 58), on behalf of themselves and a putative class of similarly situated landowners, alleging the conversion
to trail use had effected a Fifth Amendment taking. However, the Court of Federal Claims dismissed the complaint on
the ground that the Petitioners had not filed it within the six-year statute of limitations provided in 28 U.S.C. 2501.
The Court of Federal Claims, approaching the case as a regulatory taking, found that the Petitioners' claims accrued not
when the Petitioners' reversionary 2 interests were taken through the Railroad's *3 conveyance of its property to the
City (as trail operator), but when the Railroad and the City entered into a purchase and sale agreement for the Warm
Springs Line. (Pet. App. 25-50).
Reversion, used strictly as a term of art, only refers to a future interest in land that remains after an estate in land (e.g., a
life estate) has been taken. Black's Law Dictionary 1345 (8th ed. 2004). However, it is used in this Petition only as shorthand
for describing the result of the easement being abandoned for railroad purposes - the previously burdened land reverts to
the full, unburdened possession of the landowner. Thus, as used here, it is a present interest in land. See Preseault v. United
States [Preseault II], 100 F.3d 1525, 1533 (Fed. Cir. 1996) (en banc).
The Petitioners appealed, and the Federal Circuit affirmed, but rejected the Court of Federal Claims' analysis of the
accrual date. A majority of the panel instead found that the Petitioners' claims accrued even earlier - when the Surface
Transportation Board (STB) 3 first issued a notice pursuant to the Trails Act beginning a negotiating period between
the Railroad and the City - because that was the date of the last government action leading to trail use. (Pet. App.
1-18). Judge Newman dissented, agreeing with the Petitioners that their claims could not have accrued before the City
took possession of the land for trail use. (Pet. App. 18-24). The court rejected en banc rehearing. (Pet. App. 54).
The STB (previously the Interstate Commerce Commission, or ICC) is an executive agency with plenary authority to
regulate the operation of railroads; its approval is required in order for a railroad to abandon its rail lines. NARPO v. STB,
158 F.3d 135, 137 (D.C. Cir. 1998). Although the proceedings in this case began before the STB succeeded the ICC, to avoid
confusion, the Petition will refer only to the STB.
Petitioners ask this Court to review and correct the Federal Circuit's determination of when a Trails Act taking occurs,
a determination that affects timeliness, standing and compensation in every Trails Act taking case brought against the
United States. Not only is the Federal Circuit's opinion binding precedent for all Trails Act cases, it has implications for
determining the timeliness of any *4 taking claim that arises when government regulation precedes a physical taking.
A. Statutory Framework
In an effort to preserve rail corridors, Congress passed the Trails Act, 16 U.S.C. 1241 et seq., which requires that,
before a railroad can consummate a government-approved abandonment of its rail line, interested and qualified agencies
must have the opportunity to negotiate with the railroad to acquire possession of the rail segment and operate it as a
public recreational trail, on the condition that the corridor might be returned to railroad use at some point in the future.
16 U.S.C. 1247(d) (Pet. App. 60); see Preseault v. ICC [Preseault I], 494 U.S. 1, 5-6 (1990). This process is called
railbanking, because, in theory, it places the rail line in a national rail bank to be withdrawn for use when it
becomes appropriate and economically feasible.
SAppx4
The difficulty with this approach is that, under the law of many states, when an easement granted for a limited purpose
is no longer used for that purpose, the easement is deemed abandoned, Preseault I, 494 U.S. at 8-9, 16, and the owner
of the underlying land is once again entitled to use it as he pleases - which defeats the conversion to trail use. Thus, the
Trails Act provides that, in the event the rail line is converted to trail use, such interim [trail] use 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) (Pet. App. 60). This interference with normal state property law principles, which would otherwise require the
property to revert to the landowner upon the railroad's abandonment, is what gives rise to the taking alleged in this case.
Preseault I, 494 U.S. at 8-9.
A railroad may opt to begin the STB process for abandoning a portion of its railroad line by requesting either an
application for abandonment or an exemption *5 from the abandonment proceedings, 4 either of which trigger the
Trails Act procedure. A party interested in taking over as interim trail manager may then request that the STB issue
either a Certificate of Interim Trail Use or Abandonment (CITU) (in the case of application for abandonment) or, as
is applicable here, a Notice of Interim Trail Use or Abandonment (NITU) (in the case of a request for exemption).
The prospective trail manager must certify that it is willing to assume financial, legal and management responsibility
for the trail and to acknowledge that the rail easement's use as a trail is subject to possible future reconstruction and
reactivation of the right-of-way for rail service. 49 C.F.R. 1152.29(a)(3) (Pet. App. 67). The railroad must notify the
STB that it is willing to negotiate with the prospective trail manager for trail use. 49 C.F.R. 1152.29(d) (Pet. App. 68).
See 49 U.S.C. 10903 (Pet. App. 63) (abandonment); 49 U.S.C. 10502 (Pet. App. 61) (exemption). The distinction between
these two avenues of abandonment is not material to the issues raised here.
If these conditions are fulfilled, the STB then issues the CITU/NITU, which authorizes a 180-day period for negotiation
between the railroad and the prospective trail manager, and temporarily stays the railroad's authorization to consummate
abandonment of the rail line. 49 C.F.R. 1152.29(d) (Pet. App. 68). The CITU/NITU is self-executing, in that it
prospectively authorizes, but does not cause, either abandonment or trail use. Specifically, the CITU/NITU authorizes
conversion to trail use if the parties' negotiations are successful and an agreement for interim trail use/rail banking is
reached that requires the trail user to assume for the right-of-way during the term of the agreement, full responsibility
for its management, for any liability arising out of its transfer or use and for payment of any taxes. See, e.g., Pet.
App. 73-74. If negotiations are unsuccessful, the CITU/NITU authorizes the railroad to proceed with consummating
its abandonment. See, e.g., Pet. App. 74.
*6 B. Factual Background
1. Notice of Exemption and Initiation of Negotiations Under NITU
The Warm Springs line is a 10.6 mile right-of-way made up of two segments of a rail line owned by Norfolk Southern
Railway Corporation. In May 1994, Norfolk Southern published its intent to file a notice of exemption, which requested
permission from the STB to abandon a 7.4 mile segment of the line. The STB allowed the exemption, effective August
25, 1994, pending any offers for financial assistance to continue rail service or to take over the line as a trail. A389. 5
The City was interested in obtaining the Warm Springs line to create public walkways and bikeways. A373. It had
already contacted Norfolk Southern about acquiring the 7.4 mile segment, see, e.g., id., noting that the city was working
with Trust for Public Land (TPL), a nonprofit corporation that acquires land on behalf of public bodies while those
parties pursue public funding for the land. Id.; A375, A495. Thus, Norfolk Southern notified the STB of its willingness
to negotiate a trail use agreement and its consent to the issuance of an NITU, and the City notified the STB that it was
SAppx5
willing to assume financial and legal responsibility for the segment if the City were to take over as a trail manager, and
requested that an NITU issue. A393. The STB issued the NITU on August 31, 1994, which started a 180-day negotiating
period, running through February 27, 1995. (Pet. App. 72-74).
On February 23, 1995, the City and Norfolk Southern jointly requested to add another 3.2 mile segment to the 7.4
mile segment already covered by the NITU. A399; see Pet. App. 75-76. The STB had previously approved the line
for abandonment, but Norfolk Southern had not yet removed *7 tracks or otherwise consummated abandonment;
thus, effective June 2, 1995, the STB reopened the proceedings as to the 3.2 mile segment, consolidated them with the
proceedings on the 7.4 mile segment, and extended the NITU negotiating period to August 26, 1995. (Pet. App. 76-77).
At a regular meeting on October 24, 1995, Columbus City Council authorized title examination and environmental testing
on the property. A431. The Council later met in an executive session on April 30, 1996, and approved proceeding with the
purchase of the property. A434.
SAppx6
railbanking agreement through November 1, 1996. A440; see Pet. App. 79. The motion represented that [a] railbanking
agreement has been reached by the parties but requested an extension of the NITU in order to ensure that the
railbanking period extends through the time of the actual transfer of the corridor to the interim trail manager and to
cover any gaps that may have inadvertently occurred in the railbanking negotiating period. A440-41; see Pet. App. 79.
In particular, the parties had never requested an extension of the NITU negotiating *9 period past August 26, 1995.
A442-43. The parties requested an extension to November 1, 1996, the anticipated date for closing on the transaction.
Id. In an order served August 6, 1996, the STB acknowledged that the extension was requested to ensure that the NITU
remains in effect until actual transfer of the corridor to the interim trail manager. Pet. App. 79. It found that it retained
jurisdiction, and granted the extension. Pet. App. 79-80.
The parties consummated the transaction in October of 1996. On October 9, 1996, Norfolk Southern executed a quitclaim
deed in favor of Columbus. A448. This deed was recorded on October 11, 1996, id., and [a]cquisition of the land and
payment of related expenses was completed October 11, 1996, A434-35. On October 15, 1996, the City retroactively
authorized its mayor to execute and negotiate an agreement with Norfolk Southern to pay the $1 million purchase
price and to reimburse TPL's expenses in connection with the acquisition process. Id. On November 2, 1996, the City
notified the STB that, as of October 13, 1996, the rail lines have been transferred to the City of Columbus, as interim
trail manager, pursuant to an interim trail use/railbanking agreement and the NITU. A454. The STB entered the
notice into the public record on November 5, 1996. Id. Conversion of the rail line to a trail pursuant to the Trails Act
was now, finally, consummated.
SAppx7
The Petitioners contended that the earliest date their claims could have accrued was when the Railroad executed a
quitclaim deed in favor of the City. Before that time, it was not known whether the rail line would become a trail, or would
instead be abandoned by the Railroad. See id. at 197-98 (Pet. App. 35). The NITU was a necessary but not sufficient
condition for trail use, and Preseault II did not fully answer the question of what was sufficient because, in that case, the
rail line had been abandoned for ten years before any regulatory action on the line. 7 Further, the Purchase Agreement
did not transfer any property interest, legal responsibility, or financial responsibility, and in fact expressly conditioned
the transfer on closing. See Caldwell I, 57 Fed. Cl. at 197-98 (Pet. App. 35). Interim trail use was not consummated until
possession of the rail easement had been transferred to the City for use as a trail. See id. Thus, any claim for the taking
Petitioners alleged could not be ripe before the transaction was closed and the deed was executed and delivered.
The Preseault litigation predated the regulations now in effect. Preseault I, 494 U.S. at 7 n.5. Preseault II is discussed in more
detail infra, at pp. 20-21.
The Court of Federal Claims noted that the Government's liability is set when plaintiffs' property had been definitely
converted to public use and the plaintiffs were able to bring a claim under the Tucker Act. Id. at 197 (Pet. App. 34). But
the court identified the Trail Use Agreement - which it defined as the railbanking agreement to which the parties
referred in the July 5, 1996 request for extension - as the precise point of claims accrual. Id. at 198-99 (Pet. App. 35, 40).
The court stated that the plaintiffs were wrong to focus on the inchoate nature of the Purchase Agreement rather than
discussing the Trail Use Agreement that ended *12 the NITU negotiating period - but the court never explained the
distinction it saw between the Purchase Agreement and the Trail Use Agreement. 8 Id. at 198 (Pet. App. 35).
Petitioners filed a motion for reconsideration asking the court to clarify the Trail Use Agreement to which it referred in its
opinion, as well as to consider a tolling argument based on a nationwide class action of which the Petitioners learned only
after the court's opinion issued. The court did not address the request for clarification, and rejected the Petitioners' tolling
argument. (Pet. App. 51-53).
The Court of Federal Claims next rejected both the Petitioners' position that the conversion to trail use could not have
occurred until after title passed to the City, and the Government's argument that the NITU triggered the Petitioners'
claims. The Petitioners had relied on United States v. Dow, 357 U.S. 17 (1958), and Kirby Forest Indus., Inc. v. United
States, 467 U.S. 1 (1984), for the proposition that, in formal condemnation cases, a taking does not occur until the
earlier of when the Government takes possession of the land or legal title passes to the Government, and not when the
condemnation proceeding is announced. 57 Fed. Cl. at 198 (Pet. App. 36-37). However, the court appeared to apply
a regulatory taking analysis rather than a physical or per se taking analysis, as demonstrated by its discussion of Dow
and Kirby:
Even in the context of a condemnation proceeding, the Supreme Court scrutinized first the severity
of interference with plaintiff's property rights. Only then did the Court hold that the level of severity
was met with the transfer of the deed. The Court's holding in Kirby focuses more on the
Government's interference with plaintiff's rights, and to that extent, the case is instructive.
Id. (emphasis added). In further support of its view that the title transfer was not the date the taking claim accrued, the
court observed that interim trail use may occur by donation, transfer, lease, sale, or otherwise, so it *13 would not
make sense for the claim accrual to be triggered by a deed when the Trails Act did not require a deed. Id. at 198-99
(Pet. App. 38).
On the other hand, the Court of Federal Claims noted, the Government's argument that the NITU was the date that
Petitioners' taking claims accrued ignored a second requirement in Preseault II: that the STB select an appropriate
SAppx8
public agency to operate the trail, a requirement that is met only after the parties successfully negotiate a Trail Use
Agreement. Id. at 200 (Pet. App.41). The court acknowledged the Government's contention that the NITU triggered
the statute of limitations because the NITU is effective when issued to delay the vesting of any reversionary interests,
id. at 202 (Pet. App. 46), so although [t]he fate of their land rights was unknown at that point, at least temporarily,
[Petitioners'] rights were suspended, id. at 201 (Pet. App. 43). Again resorting to a regulatory taking analysis, however,
the court rejected the Government's argument: The Federal Circuit in Preseault [II] did not look at the last government
action, as defendant urges, but, rather, focused on the end of the administrative process, which the Government set into
action with the NITU issuance, but which concluded with the execution of the Trail Use Agreement. Id. at 201 (Pet.
App. 43-44). In further support of its view that an NITU did not work a taking, the Court of Federal Claims relied on
Creppel v. United States, 41 F.3d 627 (Fed. Cir. 1994), a per se regulatory taking case, which held that a claim for a
taking of all economically viable use of property did not accrue until the EPA issued a final order blocking the project,
and not when the regulatory process began. See Caldwell I, 57 Fed. Cl. at 203 (Pet. App. 48-49). The Court of Federal
Claims thus concluded that issuance of the NITU does not determine the results of the Government's action in the case
at bar. The taking becomes fixed only after the parties reach a Trail Use Agreement. Before that date the outcome of the
Government action is not certain, so the taking has not been effected. Id.
*14 The Petitioners timely appealed to the Federal Circuit.
SAppx9
Over the Petitioners' protestations, Appellants' Reply at 8-11, the Federal Circuit agreed with the Government's emphasis
on the last government action as the only possible trigger. The Petitioners had contended that, in a case such as this
where the federal government has authorized a third party to occupy land, it is the third party's occupation of the land,
and not merely the government act authorizing it, that creates a taking. Id. at 9-10; see, e.g., Loretto v. Teleprompter
Manhattan CATV Corp., 458 U.S. 419 (1982), Nollan v. California Coastal Comm'n, 483 U.S. 825 (1987). Without
addressing this argument, the Federal Circuit stated that not only was the issuance of the NITU the only government
action in the railbanking process that operates to prevent abandonment but that [t]he task of finalizing the trail use
agreement under the Trails Act falls entirely on the railroad and trail operator. Caldwell II, 391 F.3d at 1233-34 (Pet.
App. 13-14) (emphasis in original). Such private action, in the Federal Circuit's view, could not work a taking.
Additionally, the Federal Circuit majority rejected the Petitioners' argument that accrual could not be triggered by the
NITU because an NITU could lead to either abandonment or trail use, depending on the outcome of negotiations. In
fact, the court acknowledged that
the NITU operates as a single trigger to several possible outcomes. It may, as in this case, trigger
a process that results in a permanent taking in the event that a trail use agreement is reached and
abandonment of the right-of-way is effectively blocked. Alternatively, negotiations may fail, and the
NITU would *16 then convert into a notice of abandonment. In these circumstances, a temporary
taking may have occurred. It is not unusual that the precise nature of the takings claim, whether
permanent or temporary, will not be clear at the time it accrues.
Id. at 1234 (Pet. App. 14-15) (citations omitted). The Federal Circuit pointed to United States v. Dow, 357 U.S. 17
(1958) as support for the fact that a takings claim might first accrue - there by physical possession, here by blocking
the easement reversion - and then be cut off, rendering it merely a temporary taking. 9 Caldwell II, 391 F.3d at 1235
(Pet. App. 16).
The Federal Circuit disclaimed any attempt to determine whether a compensable temporary taking would have occurred
because this case involved a permanent taking. Id. at 1234 n.7 (Pet. App. 15).
Given the Court of Federal Claims' application of regulatory takings principles, the Petitioners had made a point of
arguing in their appellate briefs that a Trails Act taking was a physical, per se taking, and that it was important, under
Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, 535 U.S. 302 (2002) to apply only physical
taking precedents and accrual concepts to the case. Appellants' Opening Br. at 26-30; Reply at 2-5. Nowhere in the
opinion did the majority state what kind of taking analysis it was applying. However, in support of its statement that
it was not unusual for the temporary nature of a taking not to be apparent when it accrues, the Federal Circuit relied
solely on three regulatory taking cases involving the denial of a permit. Caldwell II, 391 F.3d at 1234 n.8 (Pet. App. 15).
Judge Newman dissented, agreeing with the Petitioners' view of the taking as a physical taking triggered by the City's
occupation and possession of the easement.
Until the easement was transferred to the City of Columbus, Norfolk Southern Railroad not only
continued as owner of the right-of-way, but retained all of *17 the benefits and obligations of
ownership. Until the right of trail use was vested in the City the cause of action had not ripened,
and the liability of the government for compensation was not fixed.
Caldwell II, 391 F.3d at 1236 (Pet. App. 20). This was so because none of the conditions for trail use (the trail operator's
assumption of legal and financial responsibility for the trail) could occur until the City took possession of the trail. Id.
The NITU represented only a hope and a plan that the easement would be converted to a trail, and the Purchase
SAppx10
10
Agreement made the assumption of the required responsibilities contingent on closing. Id. at 1237 (Pet. App. 21). Further,
that agreement documented its own negotiating status when the provision was added July 1, 1996 providing that the
parties would jointly request an extension of the negotiating period. Id. (Pet. App. 22). Only when, as in Nollan, persons
are given a permanent and continuous right to pass to and fro, had a taking claim accrued. Id. at 1238 (Pet. App. 22).
Judge Newman also pointed out that, far from supporting the majority's position, Dow supported the Petitioners. Id.
(Pet. App. 23). Dow was not a statute of limitations case, but was about whether the plaintiff landowner had standing
to obtain just compensation for property interests the Government acquired by eminent domain. Id.; see Dow, 357 U.S.
at 23. The Government had already entered into possession, but had not yet deposited the compensation with the court,
when the landowner purchased the property. Caldwell II, 391 F.3d at 1238 (Pet. App. 23); Dow, 357 U.S. at 19. The
question was whether he was entitled to receive the purportedly assigned claim to compensation. Caldwell II, 391 F.3d at
1238 (Pet. App. 23). In fact, Judge Newman pointed out, [t]he Court stressed that the determinative event of the taking
was whether the Government has already entered into possession. Id. Thus, the majority's analogy to Dow was not
apt, because in Petitioners' case, the NITU did not change the possession and occupancy of the easement. Id. (Pet.
*18 App. 24). Rather, Dow strongly reinforces the position that the Norfolk Southern right-of-way was not taken and
compensable until there was a transfer of possession and occupancy, an event that did not occur until the date of Closing
and the transfer of the deed. Id. at 1239 (Pet. App. 24).
In light of Judge Newman's dissent and the importance of this issue, the Petitioners moved for rehearing en banc (Pet.
App. 54). The court requested a response from the Government, but ultimately denied rehearing. (Pet. App. 54).
Notably, under 28 U.S.C. 1295(a)(2) (Pet. App. 57), the Federal Circuit has exclusive jurisdiction over appeals in cases
arising under the Constitution and brought under either the Tucker Act or the Little Tucker Act. Further, the respective
statutes of limitations (28 U.S.C. 2501 and 28 U.S.C. 2401) use nearly identical language. (Pet. App. 59). Thus, the
issues decided by the Federal Circuit in this case are binding on every court deciding a Trails Act taking case (and, indeed,
on every takings case against the United States) in the country.
SAppx11
11
This Court previously addressed the potential for a taking that could be worked by the Trails Act in Preseault I, but
declined to decide whether a taking had occurred in that case. The Court quoted the House Report for the Act, which
recognized the need to state that interim [trail] use shall not be treated as an abandonment of the use of such rights-ofway for railroad purposes because there may be nothing left for trail use after abandonment has been consummated.
Preseault I, 494 U.S. at 8 (quoting H.R. Rep. No. 98-28, at 8-9, reprinted in 1983 U.S.C.C.A.N. 112, 119-20). The
Court noted that by deeming interim trail use to be like discontinuance rather than abandonment, Congress prevented
property interests from reverting under state law. Id. Thus, the unanimous Court acknowledged that, in some cases,
the Trails Act may work a taking. Id. at 16. However, because the Preseaults had brought a facial challenge to the Trails
Act rather than bringing suit for just compensation under the *20 Tucker Act, the Court declined to reach the question
of whether a taking had occurred in that case. Id. at 17.
Justice O'Connor's concurring opinion (for herself and Justices Scalia and Kennedy) wrote to express the view that state
law determines what property interest petitioners possess, and that traditional takings doctrine will determine whether
the Government must compensate petitioners for the burden imposed on any property interest they possess. Id. at 20.
The Second Circuit's decision in the case had determined that no taking could occur as a matter of law because the
petitioners' interests could not vest until the ICC determined abandonment was appropriate - which would never occur
if the rail line were converted to a trail. See id. at 23. Justice O'Connor noted that the Court's opinion was inconsistent
with the Second Circuit's view, and was correct because the ICC's jurisdiction to regulate did not preempt the state
property law principles with which the ICC's actions may interfere. Id. at 24. Rather, if ICC action interferes with state
property law interests, just compensation is required. Id. As to the question of whether a taking had occurred, Justice
O'Connor noted that well-established principles will govern the analysis of whether the burden the ICC's actions impose
upon state-defined property interests amounts to a compensable taking. Id. In particular, Justice O'Connor pointed to
Nollan, where the Government appropriated a public easement, as a likely basis for such a determination.
Following Preseault I, the Preseaults brought suit in the Court of Federal Claims, lost on the issue of whether there
had been a taking, and appealed to the Federal Circuit. Preseault II, 100 F.3d at 1530. Reversing a panel decision, a
majority 10 of the en banc Federal Circuit in *21 Preseault II, guided by language in this Court's Preseault I opinion,
including Justice O'Connor's concurrence, determined that, under Vermont law, a taking had occurred in that case.
Because the railroad had, as a matter of fact, abandoned the rail line and leased it to the local government without seeking
ICC approval, that case did not arise under the procedure at issue here, but rather as a result of the landowners filing
a request with the ICC to certify abandonment. Id. at 1549. Thus, the majority found a taking occurred under either
of two alternative theories: (1) if the rail easement still existed when the ICC Order issued, [t]he taking of possession
of the lands owned by the Preseaults for use as a public trail was in effect a taking of a new easement for that new
use because the change in use effected an abandonment under state law; or (2) as an alternative basis, when the ICC
issued its Order, there was as a matter of state law no railroad easement in existence on those parcels due to the prior
abandonment, and the properties were held by the Preseaults in fee simple when they were taken for trail use. 100 F.3d
at 1550. Either way, the majority viewed the taking as a
10
Although the Government has persisted in referring to the decision as a plurality, the Federal Circuit has held that the holding
of Preseault II reflects the considered view of a substantial majority of the court. Toews v. United States, 376 F.3d 1371,
1380 n.6 (Fed. Cir. 2004).
physical entry upon the private lands of the Preseaults, under the Federal Government's authority pursuant to the
ICC's order. That it was for a valued public use was not the issue. We have here a straightforward taking of private
property for a public use for which just compensation must be paid.
Id. at 1551.
SAppx12
12
The overarching question that was not directly answered by either Preseault I or Preseault II is the one presented squarely
by this case and incorrectly decided by the Federal Circuit: Where a regulatory body authorizes a physical appropriation
of a public easement upon the *22 fulfillment of certain conditions, is it a regulatory taking that accrues upon the
issuance of the regulatory action, or is it the same per se physical taking that the Federal Circuit found in Preseault II,
and that this Court found in Nollan? This question does not merely affect the determination of when these petitioners'
claims accrued, but determines important questions throughout the Trails Act taking litigation, and it implicates takings
under similar regulatory schemes.
Most immediately, the Federal Circuit's decision determines whether these 400 landowners, and others similarly situated,
see Barclay v. United States, 351 F. Supp. 2d 1169 (D. Kan. 2004), will even have access to a determination of the just
compensation to which they are entitled under the Constitution. As of June 15, 2005, 155 NITUs had been issued in
the previous six years. Fifteen of those were issued in the previous 180 days, and an additional thirty-five were issued
earlier but have been extended for additional time, for a total of fifty cases in which the trail use negotiating period is
still open. Each case on the STB docket can affect hundreds of landowners who own property burdened by the rail line.
Those landowners who, like the Petitioners, relied on the date the trail operator took possession as the final accrual date
for their claims may now find that their claims are barred because they accrued at the much earlier (and more obscure)
time - the date an NITU issued.
Even as to those landowners whose claims are not already prematurely barred under the Federal Circuit's decision, other
important questions that arise in Trails Act cases are also determined by the Federal Circuit's opinion. This decision
determines who has standing to assert takings claims (and in particular, the definition of classes of landowners). Dow, 357
U.S. 20 (noting that one may only sue for a taking if the owner at the time of the taking). It also affects the determination
of the landowners' compensation. Kirby, 467 U.S. 10 (holding that compensation is determined as of the time of taking).
If, as the *23 Federal Circuit held, the taking occurred when the NITU issued, and not when the rail line was actually
converted to trail use (which is often years later, due to extensions), classes of landowners are likely to be improperly
defined, and the value of the land may have changed significantly between the date when the railroad first decided to
abandon the land and when the trail operator took over possession - particularly if the public becomes aware of the
change in use of the easement during that time.
The Federal Circuit's ruling that the statute of limitations accrued when the NITU issued necessarily means that Trails
Act taking claims are also ripe as soon as the NITU issues. According to the Federal Circuit's decision, all fifty NITU
negotiating periods that were still open on June 15, 2005 - i.e. that had not yet resulted in trail use - nonetheless presented
ripe taking claims as of that date. This result should trouble the Government, and also presents a dilemma for the courts,
who are left to deal with evaluating claims for takings when it is not yet known whether they are permanent, and whether
they are compensable at all under a Penn Central analysis. See Penn Central Transp. Co. v. New York City, 438 U.S.
104 (1978).
Finally, to the extent that the Federal Circuit's holding can be analogized to takings occurring as a result of other
regulatory actions outside the Trails Act taking context, it threatens to wreak havoc with notions of ripeness and accrual
in this broader arena.
II. The Federal Circuit Has Decided This Question in a Way That Directly Conflicts With Prior Decisions of This Court.
It is even more important for this Court to grant certiorari and decide this question of federal law because the Federal
Circuit's decision conflicts with this Court's takings precedents. Specifically, it fails to recognize that the taking of an
easement in land for the use of the public is a per se, physical taking as in Nollan, see 483 U.S. at 831-32, 841, regardless
of whether that taking is preceded *24 by some regulatory action. In United States v. Clarke, 445 U.S. 253 (1980), and
Dow v. United States, this Court stated that a claim for compensation for a physical invasion of land accrues when the
SAppx13
13
land is actually invaded. Here, under the reasoning in Preseault I and the language of the Trails Act, no such invasion
could have occurred until the City took possession.
Further, the Federal Circuit misinterpreted Dow to say that it did not make a difference whether a taking would be
permanent or temporary in determining the time of accrual of a Trails Act taking. In fact, if the NITU works a temporary
taking, this Court's recent Tahoe decision, 535 U.S. 302 (2002), requires that it be subject to a Penn Central ad-hoc
analysis, and that is dependent, in large part, on whether the taking is permanent or temporary. Thus, based on basic
and longstanding accrual principles, it cannot be the rule that a taking claim for a physical taking accrues at the time of
an earlier (and conditional) regulatory authorization for that taking.
A. The Federal Circuit Erred in Failing to Analyze This Taking As a Permanent Physical Occupation.
The Federal Circuit erroneously determined that a taking claim founded upon an appropriation of an easement in land
is ripe when the NITU issues because it is the last government action preceding the appropriation. In doing so, it
improperly applied concepts and precedents relevant to regulatory takings to this per se physical taking of an easement
in land. 11
11
In Lingle v. Chevron, ___ U.S. ___, 125 S.Ct. 2074 (2005), this Court revisited the types of takings that may occur under the
Constitution, presenting a more nuanced view of the distinctions between them than seen in previous cases. Rather than draw
the line between physical or per se and regulatory takings, the Court distinguished between direct appropriation by the
government, regulatory action that was tantamount to direct appropriation, and all other kinds of regulation. Id. at 2081.
The Court identified both the Loretto/Nollan paradigm (government-authorized appropriation by a third party) and the Lucas
paradigm (taking of all economically viable use; see Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992)) as being
in the second category of regulatory action, while the third category of takings included those to which the Penn Central
balancing test applied. Id.; cf. Tahoe, 535 U.S. at 323 (drawing the primary distinction between acquisitions of property for
public use, including Loretto, and regulations prohibiting private uses, referring to Lucas as a regulatory taking that
was an exception to the application of the Penn Central test). The Petitioners read Lingle and Tahoe together to describe a
group of categorical or per se takings, which may either be a positive taking, in the sense of a physical acquisition (or
imposition of a burden) for public use, or a negative taking in the sense of being regulation prohibiting a private use. Thus,
to be precise, this case presents a categorical, physical (or positive) taking. This Court may find occasion to further describe
these categories of takings if it grants certiorari in this case.
Regardless of the labels applied, the underlying legal principles are the same - the Penn Central-related questions of finality of
administrative action, reasonable investment-backed expectations of the landowners, and the importance of the public benefit
- are not relevant when the taking in question results in the appropriation of land for public use. Lingle, 125 U.S. at 2081-82.
It is in this sense that Petitioners use the term physical taking, even though the physical occupation may have come about
as a result of regulatory action rather than a direct government appropriation. See Tahoe, 535 U.S. at 322 (referring to the
Loretto case as a physical appropriation for a public purpose).
*25 In Nollan v. California Coastal Commission, 483 U.S. 825 (1987), this Court held that requiring a beachfront
landowner to allow a public easement for passage to a nearby beach as a condition for obtaining a building permit, when
the need for such an easement was not caused by the building, worked a compensable taking.
Had California simply required the Nollans to make an easement across their beachfront available to the public on a
permanent basis in order to increase public access to the beach, rather than conditioning their permit to rebuild their
house on their agreeing to do so, we have no doubt there would have been a taking.
*26 In Loretto, we observed that where governmental action results in [a] permanent physical occupation of the
property, by the government itself or by others, our cases uniformly have found a taking to the extent of the occupation,
without regard to whether the action achieves an important public benefit or has only minimal economic impact on the
owner. We think a permanent physical occupation has occurred, for purposes of that rule, where individuals are given a
permanent and continuous right to pass to and fro, so that the real property may continuously be traversed .
2016 Thomson Reuters. No claim to original U.S. Government Works.
SAppx14
14
12
Whether a taking in fact has occurred will depend on an analysis of state property law, but that analysis is only necessary to
determine the nature of the state-created property interest that petitioners would have enjoyed absent the federal action and
the extent that the federal action burdened that interest. Preseault I, at 24 (O'Connor, J., concurring). That is, reference to
state property law is necessary to determine the nature of the property interest held by the railroad and the extent to which the
shift in use from railroad to recreational trail would normally result in the easement being extinguished for misuse - questions
which will be addressed in determining liability. However, because a physical taking is alleged, the point at which such a taking
would occur, if at all, is no earlier than when someone other than either the railroad or the landowner was in possession.
Because the Petitioners' claims would be timely if they accrued at any point after the transfer to the City, determining the
precise point of accrual in this case does not require reference to state abandonment law.
*27 Liability for a physical taking accrues when physical occupation occurs. In United States v. Clarke, 445 U.S.
223 (1980), this Court evaluated whether Indian lands could be taken by inverse condemnation as opposed to formal
condemnation proceedings. This Court quoted Dow on the issue of when claims accrue in cases involving physical
occupation:
In a [formal] condemnation proceeding, the taking generally occurs sometime during the course of the proceeding.
When a taking occurs by physical invasion, on the other hand, the usual rule is that the time of the invasion constitutes
the act of taking, and [i]t is that event which gives rise to the claim for compensation and fixes the date as of which
the land is to be valued.
SAppx15
15
The Federal Circuit also erroneously determined that liability for a taking pursuant to the Trails Act was fixed when
the STB imposed the NITU negotiation period prior to allowing the railroad to abandon its easement, because this mere
delay in the abandonment process, the court held, blocked the reversion of the property interest to Petitioners.
The Federal Circuit, having decided that the NITU worked a taking, defended this position against Petitioners' (and the
dissent's) argument that the NITU did not necessarily result in trail use by relying on an incorrect view of this Court's
decision in Dow. Caldwell II, 391 F.3d at 1234-35 (Pet. App. 15-16). The Federal Circuit erroneously interpreted Dow
to mean that it did not make a difference to the question of the Government's liability for a taking whether the taking
was temporary or permanent - and thus it was irrelevant to the question of liability for a taking whether the conversion
to trail use might be unsuccessful. Id.
But in Dow, liability for a physical taking had already been established because the Government had already entered
into possession, 357 U.S. at 22; thus, as noted by Judge Newman, Dow was not a ripeness or accrual case. Caldwell II,
391 F.3d at 1238 (Pet. App. 23). The Court first reiterated the longstanding rule that fixes the taking at the time of the
entry into physical possession. Dow, 357 U.S. at 25. Then, in defending this rule *29 against the petitioner's claim that
such a rule would prejudice the landowner in the event the Government abandoned the condemnation proceeding, the
Court observed that, in that case, the physical taking would merely be a compensable temporary taking rather than a
permanent one; it would not completely eliminate the landowner's ability to seek compensation. Id. at 26. This is a far
cry from saying that a prior regulatory authorization can trigger the accrual for a subsequent physical taking.
And yet, the only plausible way in which a taking could be worked by the NITU, as the Federal Circuit erroneously
concluded, is if it works a regulatory taking, by delaying the potential abandonment and requiring the railroad first to
negotiate. Tahoe teaches that there is no such thing as a categorical (or per se) temporary regulatory taking; all temporary
regulatory takings are subject to the Penn Central ad-hoc inquiry, as well as the finality rule for ripeness. 535 U.S. at 331,
339. Logically, a fee simple estate cannot be rendered valueless by a temporary prohibition on economic use, because
the property will recover value as soon as the prohibition is lifted. Tahoe, id. at 332. Rather, analysis of liability for such
a taking requires a more fact-specific inquiry, including evaluation of the extent of interference with (including delay
of) the landowner's investment-backed expectations, and ripeness is subject to a strict administrative finality rule. Id. at
332, 336, 340-41. Thus, if the NITU is the accrual trigger, liability questions are highly dependent on whether the NITU
has permanent or temporary effect. Moreover, to hold that a delay in a regulatory process can cause a takings claim
to accrue runs afoul of this Court's oft-repeated concern that normal delays in obtaining building permits, changes in
zoning, variances, and the like should not give rise to a taking. Id. at 335; First English Evangelical Lutheran Church
v. County of Los Angeles, 482 U.S. 304, 321 (1987).
Accrual (and ripeness) depend on the extent to which the elements of liability for an injury are fixed, enabling *30
the plaintiff to file suit. Dunlap v. United States, 173 U.S. 65, 70 (1899). A claim cannot accrue before it has become
ripe. See id. In Dow, there had already been a physical appropriation of land, so the elements of liability were fixed for
the taking alleged; the question of whether the taking was temporary or permanent only implicated compensation, and
not when the claim for compensation was ripe or had accrued. Here, the taking alleged is that, like in Nollan, upon the
transfer of the deed from the railroad to the City, individuals [were] given a permanent and continuous right to pass
to and fro. Nollan, 483 U.S. at 832. The elements of liability for that taking were only fixed when the public had the
right to invade the Petitioners' land. Whether the NITU might also work some kind of taking is questionable, but in any
event is irrelevant to determining when Petitioners' claims had accrued. Even assuming the NITU works a taking, such a
taking would necessarily be subject to the Penn Central analysis, so the fixing of the Government's liability is necessarily
dependent on whether the taking will be temporary or permanent - and this can only be known when (and if) the NITU
expires and the railroad abandons the rail line.
CONCLUSION
SAppx16
16
For the foregoing reasons, this Court should grant certiorari in this case to resolve this important issue of federal law,
and decide that Petitioners' taking claims are timely.
End of Document
SAppx17
17
/
Ff LED
PUBLIC COPY
No. 03-5152
MAR 1 0 2005
dAN HnRe1)4.,'f
(JU#!( In the United States Court of Appeals for the Federal Circuit
.I
AECEIVt:IJ
FROM NIGHT BOX
MArl J
v.
2005
in 02-CV-1347
J uia l<."""
l ll
THOMAS L. SANSONETTI
Assistant Attorney General
OF COUNSEL:
EVELYN KITA Y
Surface Transportation Board
Office of the General Counsel
Washington, D.C. 20423
JOHN SMELTZER
KRISTINE TARDIFF
KATHRYNE. KOVACS
U.S. Department of Justice
Environment & Natural Resources
Division, Appellate Section
P.O. Box 23795 l'Enfant Plaza Sta.
Washington, D.C. 20026
(202) 514-4010
March 10, 2005
SAppx18
TABLE OF CONTENTS
Page
INTRODUCTION .................................................. l
ARGUMENT ............................................. : . . . . . . 3
I.
IL
III.
The majority opinion does not conflict with binding precedent .... 9
IV.
CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
STATUTORY ADDENDUM
CERTIFICATE OF SERVICE
SAppx19
TABLE OF AUTHORITIES
Cases:
Alliance of Descendants of Texas Land Grants v. United States,
37 F.3d 1478 (Fed. Cir. 1994) . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . .. 6
Cooley v. United States, 324 F.3d 1297 (Fed. Cir. 2003) ................ 9, I 0
Creppel v. United States, 41F.3d627 (Fed. Cir. 1994) . . . . . . . . . . . . . . . . . . . 9
Hopland Band of Pomo Indians v. United States, 855 F.2d 1573
(Fed. Cir. I 988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
National Ass'n ofReversionary Property Owners v. STB, 158 135
(D.C.Cir.1998) ............................................. 4
Preseault v. ICC, 100 F.3d 1525, 1552 (Fed. Cir. 1996) (en bane) . . . . . . . . . . 3,6
Preseault v. ICC, 494 U.S. 1 (1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Wyatt v. United States, 271F.3d1090 (Fed. Cir. 2001) ............... 7,9,10
Statutes. Rules and Regulations:
16 u.s.c. !247(d) . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 1
28 U.S.C. 2501 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . l
49 C.F.R. 1152.29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SAppx20
- - - - - - - - - -
INTRODUCTION
This case concerns the accrual date of a claim alleging that conversion of a
railroad right-of-way to interim trail use under the National Trails System Act
Amendments of 1983, 16 U.S.C. 1247(d), constitutes a taking. The majority's
opinion does not conflict with any Supreme Court or circuit precedent, and this
case does not present any question of exceptional importance. Thus, rehearing en
bane is not warranted under Rule 35.
The Appellants, William B. Caldwell, III and Ben Frank Billings, III
("Caldwell"), alleged that they own property underlying a railroad corridor in
Georgia and that the railbanking of that corridor under the Trails Act worked a
taking of their property under the Fifth Amendment. On June 30, 2003, the Court
of Federal Claims dismissed the complaint for lack of jurisdiction under 28 U.S.C.
2501, holding that Caldwell did not file within the six-year statute oflimitations.
JA I. The United States argued that the claim accrued when the Interstate
Commerce Commission ("ICC," now the "STB") issued the Notice of Interim
Trail Use or Abandonment ("NITU"); in the alternative, the United States argued
that the claim accrued when the railroad and the City reached a trail use
agreement. Caldwell filed his complaint more than six years after both of those
dates. Caldwell contended that the claim did not accrue until the railroad
SAppx21
delivered the deed to the City. The court held that the statute of limitations began
to nm on July 5, 1996, when the City notified the ICC that it had reached a trail
use agreement with the railroad. JA 17. The court reasoned that the NlTU takes
effect only if the right-of-way meets the criteria for abandonment and negotiation
of trail use occurs." JA 15. It is when the parties reach a trail use agreement that
the "taking becomes fixed* * * . Before that date the outcome of the Government
action is not certain, so the taking has not been effected." J A 17.
On appeal, the United States argued that the trial court held correctly that
Caldwell's claim accrued when the railroad and the City reached a trail use
agreement. A divided panel of this Court affirmed the judgment, but the majority
held, contrary to the government's and the trial court's position, that Caldwell's
claim accrued when the ICC issued the NITU, because it was then that his alleged
reversionary interest in the corridor was blocked. Slip op. at 11. 1 The majority
recognized that if the NITU works a taking -- a question the Court expressly
declined to answer, id. at 14 n.7 -- that taking might tum out to be temporary if
trail use does not ensue and the railroad abandons the line. Id. at 14. The dissent
opined that it was not until title passed to the City that Caldwell's claim accrued,
1
The Court's slip opinion is attached to the Appellants' Petition for Rehearing En
Banc and is published at Caldwell v. United States, 391 F.3d 1226 (Fed. Cir.
2004).
SAppx22
because it was then that the City gained the right to possess and occupy the
corridor. Slip dissent at 6.
ARGUMENT
I.
The majority's opinion does not conflict with Supreme Court or circuit
precedent. and the question here does not otherwise warrant rehearing en
bane.
Caldwell's complaint alleged that the United States took his property
because converting the rail corridor to interim trail use under the Trails Act
preempted his reversionary rights under state law. JA39i1i118, 20. Caldwell's
allegation is consistent with Preseault v. United States, where a plurality of this
Court sitting en bane concluded that a taking occurs under the Trails Act "[w]hen
state-defined property rights are destroyed by the Federal Government's
preemptive power."
100 F.3d 1525, 1552 (Fed. Cir. 1996) (en bane); see also.
Preseault, 494 U.S. at 21-22 (O'Connor, J., concurring). The majority followed
that precedent and answered the allegation in Caldwell's complaint when it held
that "a Fifth Amendment taking occurs when, pursuant to the Trails Act, state law
reversionary interests are effectively eliminated in connection with a conversion of
a railroad right-of-way to trail use." Slip op. at 2, l l.
The majority also followed the statutory scheme when it recognized that
"the NITU is the only government action in the railbanking process that operates
3
SAppx23
to prevent abandonment of the corridor and to preclude the vesting of state law
reversionary interests in the right-of-way." Slip op. at 13 (emphasis in original).
The NITU delays the abandonment of the line for 180 days to allow the rail carrier
and the trail group time to negotiate a railbanking and interim trail use agreement.
49 C.F . R. l 152.29(d)(l). In the circumstances of this case, once the NITU
issued, interim trail use was authorized without further federal action. After that
point, abandonment required further STB involvement: ifthe railroad and the City
had not reached a trail use agreement, the railroad could have abandoned by filing
a notice of consummation with the STB "to signify that it has exercised the
authority granted and fully abandoned the line," 49 C.F.R. 1152.29(d)( 1),
(e)(2); National Ass'n ofReversionary Property Owners v. STB, 158 F.3d 135,
139 & n. 7 (D.C. Cir. 1998); and here, where the parties reached a trail use
agreement, the City could only terminate trail use and abandon the corridor by
petitioning the STB to vacate the NITU, 49 C.F.R. l 152.29(d)(2). Absent the
NITU the railroad would have been able to abandon the corridor, causing title to
revert to Caldwell. Thus, although the majority's conclusion differed from the
reading that the United States presented in its brief on appeal, the Court's opinion
reflects a permissible construction of the statutory scheme, is consistent with
applicable precedent, and does not qualify for rehearing en bane under Rule 35.
4
SAppx24
Caldwell argues the dissent's position that the taking did not occur until title
changed hands and the City acquired the right to possess and occupy the corridor.
Slip dissent at 6. That position is inconsistent with the plurality's reasoning in
Preseault, quoted above, and misunderstands a fundamental point about Trails Act
takings claims. Unlike the usual physical occupation case, the landowner in a
Trails Act takings case is already deprived of possession. Thus, the question is not
when the owner loses the right to possess the property (since he is already not in
possession), but rather when he would otherwise.have recovered ownership of the
easement were it not for the operation of the Trails Act. The dissent's focus on
when the City acquired the right to possess and occupy the property is misplaced
in this unique context, because Caldwell was not in possession of the corridor in
the first place and his alleged reversionary rights were interrupted (if at all) long
before title transferred to the City. 2
Moreover, the United States has no role in a transfer of the ownership
Neither the trial court nor this Court determined whether the application of the
Trails Act actually preempted Caldwell's reversionary rights under state law. If
this case is remanded, Caldwell will have to show that he has an interest in the
corridor and that this interest would have reverted to him under state law were it
not for the federal action. At that time, the parties can brief the questions raised by
the amici regarding which law applies, if necessary. State law is not relevant,
however, to the question currently before the Court.
5
SAppx25
interest in a rail corridor for railbanking and interim trail use. 3 "The language of
the Fifth Amendment itself requires that the United States*
As far as the Trails Act is concerned, it makes no difference whether title to the
corridor transfers or not. The Trails Act specifically provides that railbanking can
be accomplished through "donation, transfer, lease, sale or otherwise." l 6 U.S.C.
l247(d); see also 49 C.F.R. l I 52.29(a).
SAppx26
beyond the dissenting opinion and asserts for the first time that the issuance of the
NITU constitutes a regulatory taking and transfer of title to the trail operator
constitutes a separate physical taking. The Court should not address this
argument, since Caldwell did not preserve it at earlier stages of the litigation. See
Rumsfold v. Freedom. NY. Inc., 346 F.3d 1359, 1361 (Fed. Cir. 2003). Moreover,
although the complaint did not specify the type of taking alleged, Caldwell's brief
as appellant in this Court expressly disavowed any assertion of a regulatory taking
claim, Caldwell Br. at 26-27, and the Court did not address such a claim. Thus,
this new regulatory takings argument is beyond the scope of this case.
In any event, the argument that the NITU works a regulatory taking and that
a single government action under the Trails Act might work two separate takings
is clearly incorrect. First, issuance of the NITU did not constitute a regulatory
taking, because it merely delayed abandonment of the corridor, and only an
extraordinary regulatory delay can constitute a taking. Wyatt v. United States, 271
F.3d 1090, 1097-1100 (Fed. Cir. 2001). Essentially, the Trails Act is analogous to
SAppx27
other statutes that require a permit for activities under federal jurisdiction in that it
requires a railroad to obtain STB authorization to abandon a rail corridor. The
NITU is an optional step in that process, triggered by a potential trail operator,
which merely adds a layer of analysis and extends a process that is already
required before the STB can relinquish its jurisdiction over the line. No court has
held that issuance of a NITU might work a regulatory taking. 4
Second, Caldwell provides no support for the contention that a single
government action might trigger two separate takings. To the contrary, this Court
has long held that a single government action might cause a single taking, which
might tum out to be temporary; if the taking later becomes permanent, it is merely
the continuation of the initial taking, not a separate taking. Under the Trails Act,
the STB takes only one action -- it issues the NITU -- that might cause one taking.
The taking might tum out to be temporary if, for example, the interim trail use
agreement is terminated and the rail carrier subsequently abandons the line. But
the temporary taking that might be caused when the NITU and interim trail use
agreement prevent reversion under state law does not end when (or if) interim trail
use later ensues. Rather, that same potential taking continues and becomes
4
The United States reserves the right to make additional arguments in defending
against a regulatory taking claim if this case is remanded and Caldwell is
permitted to amend his complaint to assert such a claim.
SAppx28
permanent. See Cooley v. United States, 324 F.3d 1297, 1305 (Fed. Cir. 2003)
(holding pennit denial was final agency action that might give rise to taking claim,
but remanding for determination of whether later granting of permit rendered
taking temporary); Wyatt, 271 F.3d at 1097 n.6 ("A temporary taking occurs when
what would otherwise be a permanent taking is temporally cut short.").
III.
Court and circuit precedent is incorrect, since no other court has addressed the
question presented here of when a Trails Act taking claim accrues. In particular,
'
neither Hopland Band of Pomo Indians v. United States, 855 F.2d 1573 (Fed. Cir.
1988), nor Creppel v. United States, 41 F .3d 627 (Fed. Cir. 1994), concerned the
Trails Act. See Pet. at 6-7. Caldwell incorrectly relies on Hopland Band for his
assertion that the NITU is "irrelevant." Id. at 7. On the contrary, the NITU is the
only government action that might possibly trigger a taking. Caldwell draws from
Creppel the argument that even if the NITU triggers a taking, such a claim only
becomes ripe when the NITU expires. Id. However, the NITU marks the end of
the regulatory process for converting a rail corridor to interim trail use; if the
parties reach an agreement, the STB has no further involvement in the conversion
to interim trail use.
9
SAppx29
Caldwell also takes issue with the majority's reliance on United States v.
Dow, 357 U.S. 17 (1958). Pet. at 8ff While Dow is obviously distinguishable
from this case, as the dissent correctly pointed out, slip dissent at 5-6, Caldwell's
criticism of the majority's reliance on it reveals a misreading of the majority
opinion. Caldwell reads the majority's citation of Dow as "support[ing] its
conclusion that a temporary regulatory taking might occur in the situation where
the NITU expires without the rail line being converted to a trail." Pet. at 9
(emphasis in original). However, the majority did not hold that issuance of the
NITU triggered a regulatory taking; as noted above, Caldwell expressly disavowed
any regulatory taking claim, and the Court addressed no such claim. Rather, the
majority cited Dow for the unsurprising principles that a single governmental
action might give rise to a single taking, not multiple takings arising at different
points, slip op. at 15, and that "the precise nature of the takings claim, whether
permanent or temporary, will not be clear at the time it accrues." Id. at 14. Those
holdings in Dow are consistent with recent holdings of this
Court,~.
Cooley,
324 F.3d at 1305; Wyatt, 271 F.3d at 1097 n.6, and the majority's reliance on that
Supreme Court precedent certainly does not merit en bane review.
lO
SAppx30
IV.
the amici in their cases), it disserves landowners generally. Waiting for trail use to
actually ensue may take years or, indeed, may never occur. In this case two years
elapsed between issuance of the NITU and transfer of title. During that time, the
landowner cannot make use ofland that would have reverted were it not for the
operation of the Trails Act. The landowner need not wait for this potentially
lengthy process to result in an actual transfer of title before having a ripe claim.
Caldwell's recitation of the impacts of the majority opinion, Pet. at 12,
extend well beyond the narrow holding in this case. The majority held only that in
the circumstances of this case, Caldwell's taking claim ripened when the ICC
issued the NITU. Certainly, that holding will have implications in other Trails Act
takings cases, but there is no ground for drawing grandiose conclusions outside
the circumstances of the Trails Act. The majority's opinion was consistent with
controlling precedent, and the issue presented in this case does not warrant en
bane review under Rule 35.
11
SAppx31
CONCLUSION
For the foregoing reasons, the petition for rehearing en bane should be
denied.
Respectfully submitted,
THOMAS L. SANSONETTI
Assistant Attorney General
JOHN SMELTZER
KRISTINE TARDIFF
KATHRYNE. KOVACS
~-;:~e J;-u-st--ic.,e~_.,_--
of
OF COUNSEL:
EVELYN KITAY
Surface Transportation Board
Office of the General Counsel
Washington, D.C. 20423
March, 2005
90-1-23-10794
12
SAppx32
STATUTORY ADDENDUM
16 U.S.C. 1247(d) Interim use of railroad rights-of-way
The Secretary of Transportation, the Chairman of the Surface Transportation
Board, and the Secretary of the Interior, in administering the Rai !road
Revitalization and Regulatory Reform Act of 1976 (45 U.S.C.A. 801 et seq.],
shall encourage State and local agencies and private interests to establish
appropriate trails using the provisions of such programs. Consistent with the
purposes of that Act, and in furtherance of the national policy to preserve
established railroad rights-of-way for future reactivation of rail service, to protect
rail transportation corridors, and to encourage energy efficient transportation use,
in the case of interim use of any established railroad rights-of-way pursuant to
donation, transfer, lease, sale, or otherwise in a manner consistent with this
chapter, if such interim use is subject to restoration or reconstruction for railroad
purposes, such interim use 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. If a
State, political subdivision, or qualified private organization is prepared to assume
full responsibility for management of such rights-of-way and for any legal liability
arising out of such transfer or use, and for the payment of any and all taxes that
may be levied or assessed against such rights-of-way, then the Board shall impose
such terms and conditions as a requirement of any transfer or conveyance for
interim use in a manner consistent with this chapter, and shall not permit
abandonment or discontinuance inconsistent or disruptive of such use.
49 C.F.R. 1152.29 Prospective use of rights-of-way for interim trail us_e and rail
banking
(a) lfany state, political subdivision, or qualified private organization is interested
in acquiring or using a right-of-way of a rail line proposed to be abandoned for
interim trail use and rail banking pursuant to 16 U.S.C. 1247(d), it must file a
comment or otherwise include a request in its filing (in a regulated abandonment
proceeding) or a petition (in an exemption proceeding) indicating that it would
like to do so. The comment/request or petition must include:
(I) A map depicting, and an accurate description of, the right-of-way, or portion
thereof (including mileposts), proposed to be acquired or used;
(2) A statement indicating the user's willingness to assume full responsibility: for
13
SAppx33
managing the right-of-way; for any legal liability arising out of the use of the
right-of-way (unless the user is immune from liability, in which case it need only
indemnify the railroad against any potential liability); and for the payment of all
taxes assessed against the right-of-way; and
(3) An acknowledgment that interim trail use is subject to the user's continuing to
meet its responsibilities described in paragraph (a)(2) of this section, and subject
to possible future reconstruction and reactivation of the right-of-way for rail
service. The statement must be in the following form
***
(d) Exempt abandonment proceedings.
( 1) If continued rail service does not occur under 49 U.S.C. 10904 and 1152.27
and a railroad agrees to negotiate an interim trail use/rail banking agreement, then
the Board will issue a Notice oflnterim Trail Use or Abandonment (NITU) to the
railroad and to the interim trail user for the portion of the right-of-way to be
covered by the agreement. The NITU will: permit the railroad to discontinue
service, cancel any applicable tariffs, and salvage track and materials, consistent
with interim trail use and rail banking, as long as it is consistent with any other
Board order, 30 days after the date it is issued; and permit the railroad to fully
abandon the line if no agreement is reached 180 days after it is issued, subject to
appropriate conditions, including labor protection and environmental matters.
(2) The NITU will indicate that interim trail use is subject to future restoration of
rail service, and subject to the user continuing to meet the financial obligations for
the right-of-way. The NITU will also provide that, ifthc user intends to terminate
trail use, it must send the Board a copy of the NITU and request that it be vacated
on a specific date. The Board will reopen the exemption proceeding, vacate the
NITU, and issue a decision reinstating the exemption for that portion of the rightof-way. Copies of the decision will be sent to:
(i) The abandonment exemption applicant;
(ii) The owner of the right-of-way; and
(iii) The current trail user.
***
(e)(2) A railroad that receives authority from the Board to abandon a line (in a
regulated abandonment proceeding under 49 U.S.C. 10903, or by individual or
14
SAppx34
15
SAppx35
CERTIFICATE OF SERVICE
. I hereby certify that on the &'J'ay of March, 2005, two copies of the
foregoing were served by first class mail upon the following:
Jeffrey 0. Bramlett
Bondurant, Mixson & Elmore
3900 One Atlantic Center
1201 West Peachtree Street, NW
Atlanta, GA 30309
James P. Kelly
Kelly Law Firm
200 Galleria Parkway
Suite 1510
Atlanta, GA 30339
SAppx36
************************************
Plaintiffs-Appellants,
7
8
V.
9
10
11
12
13
UNITED STATES,
Defendant-Appellee.
************************************
No. 03-5152
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15
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Federal Circuit.
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SAppx37
[00:01:40]
Judge Newman:
Mr. Bramlett:
accrued in July of 1996 when the parties announced on the STB docket in the
We contend that in
10
fact the claims did not accrue until that so-called agreement that had been
11
12
that it had been closed was filed in the STB document in November of 1996.
13
Judge Dyk:
14
[INDISCERNIBLE],?
15
Mr. Bramlett:
16
Judge Dyk:
17
cutting off their reversionary interests then thats when the plaintiff
18
accrued, right?
19
Mr. Bramlett:
20
Judge Dyk:
21
22
23
Mr. Bramlett:
24
Right.
25
SAppx38
Judge Dyk:
So the question
Mr. Bramlett:
burden on the fee simple of the easement, the for rail purposes.
question is, when does the opportunity to have the property to possess the
property without--
Judge Dyk:
Right?
And the
Your clients
10
Mr. Bramlett:
11
Judge Dyk:
12
13
least in this case, didnt cut off the reversionary interest, but thats
14
15
16
17
took possession.
18
Mr. Bramlett:
19
the railroad, our interest in having our fee simple unburdened by this right
20
of way continued.
21
transfer occurred beyond an easement for rail purposes that expanded the
22
scope of the burden on our fee simple to include rails-to-trails use of this
23
24
[00:05:00]
25
SAppx39
Judge Dyk:
Well the government claims that under the statute and the
regulations when the trail use agreement is filed thats the end of it.
Mr. Bramlett:
Judge Dyk:
Mr. Bramlett:
Preseault makes it clear that what we are talking about is a physical taking,
Judge Newman:
That
10
important.
11
12
13
Mr. Bramlett:
14
15
16
lose--
17
Judge Newman:
18
19
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Mr. Bramlett:
21
22
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At what stage?
When we
25
SAppx40
Judge Dyk:
question.
cut off.
cut off.
Mr. Bramlett:
facts of this case if I may just to hone the court in on why in this case it
is the transfer of title and of possession to for trail use purposes that
10
11
the point where this easement is deposited in the governments rail bank--got
12
13
transferred into the rail bank and perpetually available for rail use as
14
15
16
17
18
the agreement.
19
20
Judge Newman:
21
22
Mr. Bramlett:
23
24
with it.
25
Judge Newman:
Now the government says this case could have been filed any
Do you disagree with that?
SAppx41
Mr. Bramlett:
Yes.
According--
Judge Newman:
passed.
Mr. Bramlett:
have is a purchase and sale agreement, which gives the purchaser--it was
originally the trust for public lands and then it was assigned to the City of
Columbus.
It gives them for one thing an option to get out of the agreement
10
11
agreement.
12
13
14
environmental contamination.
15
Judge Prost:
16
not cut off because there were all of these conditions, it was up in the air,
17
18
Mr. Bramlett:
19
20
reached.
21
July 1996 the governments position would have been as it was in Preseault.
22
23
24
25
Thats correct.
SAppx42
to compensation does it do so even when the contract never closes, when title
never passes, where the purchase price, a million dollars in this case never
changes hands?
this particular case, under this particular case, under this particular
that there is this trail operator who will in fact operate this trail and the
page 425.
In
At this point its still between the trust for public lands and
10
11
agreement they say, seller and buyer acknowledge that the purchase agreement
12
was entered into with the intention of providing this land for the rails to
13
trails program.
14
Seller and buyer agree that subsequent to the sale the property shall be used
15
16
17
18
passes.
19
thats the point in time in which the easement is deposited in the rail bank
20
21
Judge Prost:
22
a taking under federal law and that the federal governments role terminated
23
when the trail agreement was finalized in July, that that was the only role
24
Title
25
SAppx43
Mr. Bramlett:
case it was the State of Vermont and an easement that had been used as a
found then, when the--Im sorry, remind me of the point of your question.
Judge Prost:
the trail--
Mr. Bramlett:
10
motion this process, its responsible for the consequence of the decision.
11
12
Judge Dyk:
13
Mr. Bramlett:
14
Judge Dyk:
15
thought it was necessary to extend the time until November 1st because of the
16
17
18
Mr. Bramlett:
19
20
Judge Newman:
21
government could get out of it the municipality could have gotten out of the
22
23
Mr. Bramlett:
24
contingencies in the agreement the position that we have lost our right
25
simply because this contingent agreement has come to fruition or rather has
Thats correct.
It could have.
SAppx44
been signed but has not come to fruition just cant be the law.
And frankly,
once the agreement becomes final, if they want to abandon the use of the
environmental issues, before youve checked the title and done all those
10
11
authority without any reason to do so. I would like to reserve the balance of
12
13
Judge Newman:
14
Ms. Kovacs:
15
States.
16
Judge Dyk:
17
18
become final until the deed was transferred and the Service Transportation
19
Board obviously viewed the structure of this thing as not being effective
20
until the deed was transferred and granted the extension until November 1st,
21
22
Ms. Kovacs:
23
24
25
decided not to follow through, not establish a trail, not consummate with the
Because
Ms. Kovacs?
A land owner need not wait for a deed to change hands before-Well maybe thats true in some cases, but what about this case?
Right.
SAppx45
deed it would have had to come back to the STB and ask for authorization to
preempted at that point and the city would have had to get permission from
Judge Dyk:
key event and grant this extension of time until November 1st?
If thats true, why did the STB apparently view the deed as the
No.
Are you
10
Ms. Kovacs:
11
oddity in the record and I dont think that it was necessary to--the parties
12
did it, if you read their motion, they filed this motion to extend the period
13
14
15
granting the motion, they make it clear that of course the STB retains
16
jurisdiction over the corridor until the abandonment has been consummated.
17
In essence, in granting the order the STB says, okay, well grant the order
18
just to cross all the Ts and dot all the Is, but its really not necessary.
19
Judge Newman:
20
21
22
Ms. Kovacs:
23
statute itself, we think that this agreement satisfied the terms of the
24
Its an
Well our reading of the statute, Your Honor, if you read the
25
10
SAppx46
liability, and taxes then the STB shall not permit abandonment.
Judge Newman:
says on July the 6th, 1996 they wouldnt have been thrown out for being
premature or unripe--
Ms. Kovacs:
Judge Newman:
Ms. Kovacs:
taking, may have become temporary still at that point, for example, if the
So you dont think that if they had filed suit, as your brief
10
11
Judge Newman:
12
Ms. Kovacs:
13
Judge Newman:
14
15
Ms. Kovacs:
16
17
purchase the property, not establish a trail then there would only be a
18
19
physical occupation.
20
Judge Newman:
21
on the merits despite all of the caveats and environmental studies and all
22
the other things that could have defeated the entire operation?
23
Ms. Kovacs:
24
it comports with--
25
Judge Newman:
But what?
By one day?
Im sorry?
Are you saying there would have been a temporary taking of one
No.
So you think that it would have been fully ripe for litigation
11
SAppx47
Ms. Kovacs:
Yes.
the court said in Preseault, which is--I think its worth quoting this one.
Until the ICC makes the decision to convert an unused right of way to a
trail rather than simply permit abandonment and finds an appropriate public
agency to operate the trail, a landowner suit for taking would run a fowl of
exhaustion requirements.
authorizes conversion to trail use and a trail operator is found and comes
forward and satisfies the act, then you have a right of claim.
point that they reached the agreement here, thats when the property owner
And at the
10
11
12
Judge Newman:
13
official act whereby the property owner says today the clock starts to run?
14
Ms. Kovacs:
15
16
17
Judge Newman:
18
Ms. Kovacs:
19
problem.
20
21
in some cases that the accrual period wont begin for some period after the
22
agreement is reached because there would be no way for the property owner to
23
24
public.
25
Judge Newman:
Where is the
But of course in another case appointed-The July 5th agreement was published?
12
SAppx48
Ms. Kovacs:
recorded.
Judge Newman:
Ms. Kovacs:
knowable.
of knowing this.
accrue.
factually, but thats when--the accrual period in this case, they havent
In another case, the plaintiff might come in and say I have no way
I didnt find out about this until a year later, and so
We might contest it
10
They could in
11
12
Judge Newman:
13
Ms. Kovacs:
14
15
Judge Dyk:
16
Ms. Kovacs:
17
18
Judge Newman:
19
20
Ms. Kovacs:
21
22
Judge Newman:
23
24
Ms. Kovacs:
So
It was--July 5th was when the agreement was sent to the ICC.
Most certainly.
Yeah.
25
13
SAppx49
Judge Newman:
request.
Ms. Kovacs:
Judge Newman:
Ms. Kovacs:
Judge Newman:
government document, which can be retrieved if you know its there by filing
Ms. Kovacs:
Of course.
If theres an internal
Absolutely.
10
Judge Newman:
11
Ms. Kovacs:
12
Judge Newman:
13
Ms. Kovacs:
14
15
unknowable--
16
Judge Dyk:
17
18
something with us and somebody can go and look and see whether somebody filed
19
something.
20
Ms. Kovacs:
21
22
23
follow it.
24
25
Judge Newman:
Yes.
And I think
If its inherently
Exactly.
The regs
14
SAppx50
Its
In
Ms. Kovacs:
Im sorry?
Judge Newman:
finality?
when its advertised that now you can walk on this property or what?
Ms. Kovacs:
question in this case is when the reversion of the property right was
The
Youre saying
Well the city only gained the right to walk on the property when
That much is of course true.
10
preempted.
And were it not for the trail use agreement, once the NITU issues
11
12
theres no trail use agreement the railroad can come in and file a notice
13
14
the ICC has no more jurisdiction and at that point it can revert to the
15
16
Judge Prost:
17
assume they had filed here on August 1st, 1996 and lets assume that the deed
18
had never been transferred, some environmental study showed that it wasnt
19
useful for the city, and so the deal was never effectuated.
20
21
22
Ms. Kovacs:
23
of course say that there would be no taking, but the claim accrues.
24
Judge Prost:
But you said you would not say the claim wasnt ripe.
25
15
SAppx51
Ms. Kovacs:
Right.
Judge Dyk:
Ms. Kovacs:
until the agreement was amended I think that it became really abundantly
clear.
Judge Dyk:
Ms. Kovacs:
plaintiffs.
Reached or filed?
In this case its a little confusing because it really wasnt
In this case I
10
think its clearest to use the day it was filed with the STB.
And it would
11
be when the plaintiffs knew or should have known of the agreement to the time
12
13
14
the agreement they have to come back and say, we want to terminate trail use.
15
16
dont have an agreement, the railroad can come in and consummate the
17
abandonment.
18
And the date that it doesnt happen is when the agreement is reached.
19
why we think--the CFC here was faced with three potential dates.
20
the NITU issues, the date of the agreement, and then the date of the deed.
21
22
23
24
Judge Dyk:
25
right?
The date
These other cases that are kind of--a lot of these cases pending,
16
SAppx52
Ms. Kovacs:
Quite a few.
Judge Dyk:
the agreement is final and the deed is kind of a mechanical feature of it.
Ms. Kovacs:
question.
The factual scenarios really run the gamut and thats why I think its very
Right.
[00:25:00]
10
the fairest and the date that comports best with the statute is the middle
11
12
landowner might have to wait potentially for years before having a right of
13
14
Judge Dyk:
15
16
time to November 1st because this particular agreement was dependent upon the
17
transfer of the deed and as soon as the deed was transferred and the STB was
18
19
Ms. Kovacs:
20
parties to extend the closing date another year and then another year after
21
22
Judge Dyk:
23
Ms. Kovacs:
24
25
Thats not
Well in this case it would have of course been possible for the
17
SAppx53
a landowner under their reading would have to wait for a period of years to
file a claim.
turn to the last two issues just very briefly before my time expires, they
claim that their statute of limitations period was told during the pendency
reconsideration.
Judge Dyk:
If I might
No, no.
He
10
11
Ms. Kovacs:
12
59(a).
13
Judge Dyk:
14
and--
15
Ms. Kovacs:
16
17
18
19
20
21
22
all that survives in this case are the individual claims of Caldwell on
23
24
25
positions that its not that the court need not approach that issue in this
18
SAppx54
case.
And then finally they challenge on appeal for the first time the
10
Judge Newman:
Mr. Bramlett?
11
Mr. Bramlett:
Thank you.
12
yourselves in the shoes of a landowner who reads the initial NITU on the STB
13
14
interim trail use rail banking agreement is reached it must require the trail
15
user to assume for the right of way during the terminal agreement, full
16
17
18
issue here, purchase and sale agreement was ever a matter of public record,
19
and thats not clear, how would a landowner assess these requirements,
20
21
contract that says the buyer has the right to get out in a five days notice
22
23
you look at the NITU until this contract closes you dont know the status of
24
25
19
SAppx55
this courts decision in Preseault in the plurality opinion, the court said
authorization took the parcels and opened them to public use that was the
physical taking of the right and exclusive possession that belonged to the
and in accordance with the terms of the agreement, trail use could begin to
operate because prior to that there was no opportunity for trail use.
We subject the
It was
10
closes, title shifts, possession shifts from the railroad to the trail
11
12
client.
13
Judge Newman:
14
submission.
15
16
17
18
19
20
21
22
23
24
25
20
SAppx56
WEST/CRS
No. 05-1255
In the United States Court of Appeals for the Federal Circuit
JOHNBARCLAY,CONSTANCEBARCLAY,ROYERBARCLAY,ALTHEA
BARCLAY, JOHN AMOS, MARCIA J. BACON, RONALD J. BARTEL,
MELVIN BERGEN, JOHN E. BOYLE, JONATHAN EHRLICH, FLORENCE
EHRLICH, DONALD GRAUMANN, RUBEN KLIEWER, ALVIN KROUPA,
BARBARA KROUPA, BURDETT LEDELL, LEE DALE MILLER, VERNON
MINNS, FRANK A. MITCHELL, MID KANSAS COOPERATIVE
ASSOCIATION, JOHN F. OPAT, ROBERT PRESNELL, JANET REGIER,
SONJA REGIER, DON REINHARDT, JANICE REINHARDT, MARY J.
RODGERS, DARRELL THOMPSON, ROBERT TURNER, GENEYA
TURNQUIST, DONALD TURNQUIST, CLARKE. WIEBE, and MARLENE J.
WEBER,
Plaintiffs - Appellants
v.
UNITED STATES,
Defendant - Appellee
Appeal from the United States District Court for the District of Kansas
Case No. 04-1119-WEB, Senior Judge Wesley E. Brown
FILED
JUL 2 I 2006
KATHRYNE. KOVACS
LANE M. MCFADDEN
U.S. Department of Justice
P.O. Box 23795, l'Enfant Plaza Station
Washington, D.C. 20026
(202) 353-9022
SAppx57
Table of Contents
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
BACKGROUND ................................................... 2
ARGUMENT ...................................................... 4
I.
This Court's adherence to Caldwell does not conflict with Supreme
Court or Federal Circuit precedent. .......................... 4
II.
This case does not raise an issue of exctJ>tional importance. . . . . . 12
CONCLUSION ................................................... 14
SAppx58
TABLE OF AUTHORITIES
FEDERAL CASES
Seiber v. United States, 364 F.3d 1356 (Fed. Cir. 2004) ................. 8,11
Stearns v. United States, 396 F.3d 1354 (Fed. Cir. 2005) .................. 10
Toews v. United States, 376 F.3d 1371 (Fed. Cir. 2004) .................... 8
United States v. Dow, 357 U.S. 17 (1958) ........................... 8,9,12
Williamson County Reg'l Planning Commission v. Hamilton Bank of
SAppx59
DOCKETED CASES
Renewal Body Works, Inc. v. United States, Fed. Cir. No. 05-5109 ............ l
FEDERAL RULES
Fed. R. App. P. 35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,12
111
SAppx60
INTRODUCTION
This case concerns the accrual date of a claim alleging that conversion of a
railroadright-of-way to interim trail use under the National Trails System Act
Amendments of 1983, 16 U.S.C. 1247(d) (the ''Trails Act"), constitutes a taking.
The panel's majority opinion held that such a claim accrues on the date when the
Surface Transportation Board ("STB") issues a Notice of Interim Trail Use or
Abandonment (''NITU"). Barclay v. United States, 443 F.3d 1368, 1378 (Fed. Cir.
2006). 1 The majority opinion followed this Court's prior decision in Caldwell v.
United States, 391 F.3d 1226, 1235 (Fed. Cir. 2004) ("[T]he appropriate triggering
event for any takings claim under the Trails Act occurs when the NITU is . . '.
issued."). Applying Caldwell, the majority opinion affirmed the District of. _
Kansas' dismissal of the complaint in this case as untimely, because it was filed
well outside the six-year statute of limitations period set forth in 28 U.S.C. 2501,
as measured from the dates of the issuance of the relevant NITUs. Id. at 1371-72.
Rehearing en bane is not warranted under Fed. R. App: P. 35 and Fed. Cir. R. 35
because the majority's opinion creates no conflict with Supreme Court or Federal
1
This Court's opinion in Barclay also decided the claims in Renewal Body Works,
Inc. v. United States, Fed. Cir. No. 05-5109, in a consolidated published opinion.
The Appellant in Renewal Body Works has also filed a petition for en bane
rehearing of this Court's opinion, which the Government has opposed in a separate
opposition filed concurrently with this opposition.
I
SAppx61
SAppx62
7, 2004, in the United States District Court for the District of Kansas. JA35. 3 On
December 30, 2004, the district court issued its judgment and opinion, applying
the accrual rule announced just two weeks earlier by this Court in Caldwell that "it
is the issuance of a NITU (Notice of Interim Trail Use or Abandonment) that gives
rise to a cause of action." JAlO. Applying this rule, the district court found that
the landowners' claims were all barred by the statute oflimitations, and granted
the GOvernment's motion to dismiss. JA19.4 This appeal then followed and, as
noted above, this Court affirmed the district court's dismissal of the complaint.
ARGUMENT
I.
In Caldwell, this Court addressed for the first time the accrual of a takings
claim ''when, pursuant to the Trails Act, state law reversionary interests are
The abbreviation "JA" refers to the Joint Appendix filed in conjunction with the
landowners' opening brief on appeal to this Court.
..
4
.
The district court agreed with the landowners that the statute oflimitations was
tolled while a motion to certify a potential class action (which would have
included the landowners) was pending. JA15. Nevertheless, even with this
additional time the district court found that the landowners' claims were untimely.
This Court agreed with that latter assessment, and therefore did not rule on
whether the district court was correct that the statute oflimitations was tolled.
Barclay, 443 F.3d at 1373 n. 3. The landowners do not raise this issue in their
petition for rehearing en bane.
SAppx63
SAppx64
See Preseault II, 100 F.3d at 1554 (Rader, J., concurring) (explaining that "the
United States facilitated that conversion with its laws and regulatory approval").
SAppx65
1478, 1482 (Fed. Cir. 1994) (holding that ratification of treaty in 1941 that
extinguished legal claims was the "talcing action," even though Mexico did not
deny claims and leave plaintiffs without compensation until 1989).5 The sale of
property. for Trails Act purposes does not implicate the United States, but rather is
action between two non-federal entities (e.g., a railroad company and a
municipality). The regulations do not even require the railroad and the trail
operator to notify the STB in the event that title is transferred. In this case,
preemption of the landowners' alleged reversionary rights occurred, if at all, well
before title was transferred to the trail operators.
The landowners point out in their petition.that a claim against the United
States cannot accrue until a plaintiff has "suffered a legally recognizable harm."
Pet. at 8. The landowners argue, as they did before the panel, that because the
NITU may not necessarily result in a final trail use agreement, it cannot be
understood to have actually harmed them. Id. The majority opif:lion rejected this
5
"The language of the Fifth Amendment itself requires that the United States * *
*commit the talcing action." Alliance ofDescendants, 37 F.3d at.1482 (Fed. Cir.
1994). The United States has no role in a transfer of the ownership interest in a rail
corridor for railbanking and interim trail use. Negotiations are voluntary under the
Trails Act, and it does not matter how the parties to those negotiations structure
their agreement so long as the trail sponsor assumes responsibility for the property
and agrees that interim trail use is subject to reactivation of rail service. See
16 U.S.C. 1247(d) (providing that railbanking can be accomplished through
"donation, transfer, lease, sale or otherwise"); see also 49 C.F.R. l 152.29(a).
6
SAppx66
argument, following Caldwell, because this argument misstates the harm imposed
by the issuance of a NITU. The landowners protest that "without the conversion
to trails use, landowners cannot initiate a takings claim for a rails-to-trails
j
. 7
SAppx67
This Court resolved that question in Caldwell, and concluded that "the NITU
operates as a single trigger to several possible outcomes." 391 F.3d at 1234. In
the event that a trail use agreement is reached and abandonment of the right-ofway is effectively blocked, then a permanent talcing may have resulted from the
NITU. Id. As the Caldwell court noted, "[i]t is not unusual that the precise nature
of the talcings claim, whether permanent or temporary, will not be clear at the time
it accrues." Id. (citing Seiber v. United States, 364 F.3d 1356, 1365 (Fed. Cir.
2004); Cooley v. United States, 324 F.3d 1297, 1299-1300 (Fed. Cir. 2003); and
Boise .Cascade Corp. v. United States, 296 F.3d 1339, 1347 (F~d. Cir. 2002)).
. : .: .Jn so characterizing the effect oftheNJTU, Caldwell drewupon Supreme
. -Gourt precedent in United States v. Dow, 357 U.S. 17 {1958), for the proposition
that a single governmental action may cause either a temporary or permanent
taking. Caldwell, 391 F.3d at 1234-35. Dow was a condemnation action in which
the Government entered into physical possession of the land three years before it
acquired title by filing a declaration of taking. Dow, 357 U.S. at 23. The Supreme
Court held that the Government's physical possession of the land had been a
taking and "rejected, as bizarre, the argument that there were two different takings
of the same property, with some incidents of the taking determined as of one date
and some as of the other." Caldwell, 391 F.3d at 1235 (quoting Dow, 357 U.S. at
SAppx68
24) (internal quotations omitted). Instead, "a taking occurs when the owner is
deprived of use of the property," which in the Trails Act context occurs "by
blocking the easement reversion." Id. Accordingly, to the extent that Supreme
Court precedent sheds light on the accrual issue here, Caldwell is not inconsistent
with that precedent.
The landowners' argument that a NITU might never result in a temporary
taking, Pet. at 9-15, and therefore Caldwell is incorrect, relies on a
characterization of the landowners' claim as something other than a claim for the
government'.s prevention of their state law reversionary interests from vesting. In
- - - - so,argiiing, the landowners ignore the rather peculiar circumstances of a Trails Act
: takings -claim. Unlike the usual physical occupation case; the landowner in a
Trails Act takings case has alre~dy been deprived of physical possession of the
land subject to the right-of-way. Thus, the question is not when the owner loses
the right to physically occupy the property, but rather, when the owner would
otherwise have recovered full possession of the easement, were it not for operation
of the Trails Act. The landowners' suggestion that their takings claim could not
have been brought until the actual date of trail conversion, Pet. at 9, is misplaced
in this unique context. The landowners were not in exclusive possession of the
corridors subject to railroad rights-of-way in the first place, and their alleged
SAppx69
reversionary rights were interrupted (if at all) long before the completion of a trail
use agreement and the transfer of title to the trail operators. This is what separates
this case from physical occupation cases such as Nollan v. California Coastal
Comm 'n, 483 U.S. 825 (1987), and explains why this panel's majority opinion
does not conflict with Supreme Court or circuit precedent addressing those
different circumstances.
Although the landowners object to this Court's bright-line rule, as described
in Caldwell, and clarified by the panel's majority opinion in the present case, they
provide no alternative date for accrual of their claims that would be consistent
.(
: :with this .Court',s description of the nature of their claims. in cases such as ..
Similarly, the landowners are incorrect that their claims are unripe at the point of
the NITU's issuance. Pet. at 13 (citing Stearns v. United States, 396 F.3d 1354,
1358 (Fed. Cir. 2005), and Williamson County Reg'l Planning Comm 'n v.
Hamilton Bank ofJohnson City, 473 U.S. 172, 186 (1985)). After issuing a NITU,
the STB has "reached a final decision regarding the application of the regulations
to the property at issue," Stearns, 396 F.3d at 1358, because none of the
subsequent actions between the railroad and a potential trail operator require STB
involvement. Stearns Co. held that the trial court erred in finding that a physical
taking occurred when a federal agency determined that the plaintiff did not have
"valid existing rights" to conduct mining in a national forest. The Court
concluded instead that the plaintiff's claim should be treated as one for a
regulatory taking, which was not ripe because the plaintiff had not sought a
compatibility determination from the agency that if granted would have permitted
the plaintiff to engage in mining. See id. In the context of a rails-to-trails
conversion, the NITU is the final agency action taken in the process, unless a party
10
SAppx70
S~iber,
. the potential .for a temporary regulatory takings claim is i~apposite. ~n th~ c_o.ntext .
of
conversion, which this Court's precedent
seems to have
. a ,rails-to-trails
. . .
. ..
characterized as a physical takings claim. Preseault II, 100 F.3d at 1540.
Although Caldwell recognized that the issuance of a NITU may not result in a
permanent taking (if the trail use agreement is not reached, for instance), this may
mean that the result is a taking for a limited period of time, which the landowners'
arguments do not address. See, e.g., Dow, 357 U.S. at 26; Hendler v. United
initiates a new regulatory process by, e.g., petitioning the STB to vacate a
previously-issued NITU.
SAppx71
- - - - ------
For these reasons, Caldwell, which the majority opinion followed here,
reflects a permissible construction of the statutory scheme, is consistent with
applicable precedent, and does not qualify for rehearing en bane under Fed. R.
App. P. 35 and Fed. Cir. R. 35.
II.
demon~trate '~exc.eption11l
Cir .. R.
3~,_and
Supreme Court or circuit precedent. As shown above, the majority opinion does
not so conflict. The landowners have not demonstrated that the issues raised by
this appeal are sufficiently important to merit en bane rehearing by this Court.7
Moreover, this case does not raise an issue of exceptional importance
merely because, as the landowners claim in their petition, there are "at least 22
Trails Act takings cases pending" and there are several thousand miles of
On March 23, 2005, this Court recently denied a petition to rehear Caldwell en
bane, and the Supreme Court subsequently denied certiorari. See Caldwell v.
United States, 126 S. Ct. 366 (Oct. 3, 2005).
12
SAppx72
abandoned railroad rights-of-way that are potentially subject to the Trails Act.
Pet. at 15. The landowners do not suggest that the Trails Act cases currently
pending raise a statute oflimitations question, and undersigned counsel is aware
only of three such cases other than the present case and its companion, Renewal
Body Works. The issuance of Caldwell in December 2004 put all future potential
plaintiffs in Trails Act cases on notice that their taking claims accrue when the
STB issues the NITU, and this panel's majority opinion provides litigants with "a
single bright-line rule" for determining their respective rights and obligations.
443 F .3d at 13 78. The majority opinion does not purport to extend to other
contexts or other types of takings cases, and is not one of exceptional importance
.that would merit en bane rehearing.
CONCLUSION
For the foregoing reasons, the petition for rehearing en bane should be
denied.
Respectfully submitted,
SUE ELLEN WOOLDRIDGE
Assistant Attorney General
KATHRYNE. KOVACS
LANE M. MCFADDEN
U.S. Department ofJus
Environment & Natu
13
SAppx73
July 2006
90-1-23-11259
14
SAppx74
CERTIFICATE OF SERVICE
I hereby certify that on this 21st day of July, 2006, two copies of the
foregoing Appellee's Opposition to Petition for Reheaijng En Banc were served
by first class U.S. mail, postage pre-paid, as follows:
Cecilia Fex
Nels Ackerson
Ackerson Kauffman Fex, PC
1250 H Street, N.W., Suite 850
Washington, DC 20005
Fax: (202) 833-8831
ane M. McFadd
U.S. Department o
Environment and Natural Resources
Div.ision
P.O. Box 23795 (L'Enfant Plaza Station)
Washington, D.C. 20026
(202) 353-9022
15
SAppx75
************************************
10
11
12
13
14
15
16
17
J. Weber
18
Plaintiffs-Appellants,
19
20
V.
21
22
23
24
UNITED STATES,
Defendant-Appellee.
************************************
25
SAppx76
No. 05-1255
2
3
Federal Circuit.
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
SAppx77
[00:00:45]
Judge Newman:
clients issues.
Mr. Rosati:
first point obviously is that from the facts that we present the state law
has been abandoned before the NITC official be identical fact pattern that
was recognized.
[INDISCERNIBLE].
10
and the court recognized that factually that was a strong argument
11
[INDISCERNIBLE].
12
distinguishing the fault withholding our position is the issues with the NITU
13
did not bar the reputation of the easement because it had already been
14
revoked.
15
had it taken from us when was the rail user came in, in 1998 with possession
16
of property after Escrow closed, which was within the statute of limitations
17
at that point.
18
Judge Dyk:
19
landowner even though the federal government still views the easement as
20
21
Mr. Rosati:
22
23
recognizes that an easement can be abandoned before the ICC or the STB
24
[INDISCERNIBLE].
25
So in terms of
But
SAppx78
Judge Dyk:
is to extinguished that unless the train runs more than once a week.
Mr. Rosati:
Judge Dyk:
answer them.
10
Mr. Rosati:
11
Judge Dyk:
12
Mr. Rosati:
13
on the line.
14
easement has independent state law basis they can be terminated under state
15
law basis.
16
17
18
19
20
21
22
[INDISCERNIBLE].
23
Judge Dyk:
24
Mr. Rosati:
25
The artificial argument, Your Honor, I know the state law says-I understand.
If the
Im simply adopting
My view is that given that
Yes.
But thats the one fact.
SAppx79
took up its tracks and ties in July of 1995, where were the new people on
property.
have been a taking from us when nobody else was on the land but us?
We had physical
Obviously thats
10
not the same fact as Caldwell and it probably is not a typical fact matter
11
because from my reading of the literature most railroad easements are in fact
12
exclusive.
13
14
15
16
factual point of view I have two key areas of the facts that distinguish
17
Caldwell.
18
19
20
21
22
question [INDISCERNIBLE].
23
24
25
They have
So from a
But it never
SAppx80
there.
The court said this wasnt the taking because you let them in.
You
was issued.
[INDISCERNIBLE].
your relationship and maybe were going to make you keep this property owner
or this tenant in fact that the easement is on the property for another six
10
11
12
its a point in the trail user physically either has [INDISCERNIBLE] escrow
13
14
that when the NITU issued, unless its a physical invasion and under
15
16
17
differently.
18
sufficient.
19
problem for me on that point, but I dont have to win that point to win the
20
21
and win.
22
reversed and the court rules that taking accrues at the point of escrow
23
24
[INDISCERNIBLE].
25
purpose, you confront the issue over and over again of fact situations that
And I obviously
Thats a taking.
Prior to
1.3 I go back
SAppx81
now when a property owner says the railroad is still running, the NITU issued
Youre not
[INDISCERNIBLE].
the property owner had the right use of the property at the same time.
I want compensation.
The
What
10
was taken from that property even if the joint use, but in my fact they have
11
no joint use.
12
Judge Newman:
Mr. Rosati, I agree with you, but thats not the courts law
13
at the moment.
14
all others if in fact there are arguments where either on the facts you might
15
16
17
Mr. Rosati:
18
[INDISCERNIBLE].
19
Judge Newman:
20
Mr. Arbab:
21
the Court of Federal Claims correctly ruled that the taking claim was time-
22
barred because it was filed more than six years after the Service
23
24
parts.
25
the statute 28 USC section 2501 provides that every claimant with which the
Alright.
Good.
Mr. Arbab.
May it please the court, the basic issue in this case is whether
SAppx82
First per
court of federal claims has jurisdiction shall be brought unless the petition
therein is filed within six years after such a claim first accrues.
In Caldwell the courts clearly held that the appropriate triggering event for
any takings claim under the Trails Act occurs when the NITU was issued, so
applying these principles to this case, here, the NITU issued in October of
Renewal has argued for the overruling of Caldwell as one way to avoid
So the
[00:10:00]
10
[INDICERNIBLE].
11
findings withstand.
12
13
14
2005 denied a petition for rehearing en banc in Caldwell and Renewal doesnt
15
point to anything legal landscape that has changed since that time.
16
are a number of reasons for maintaining that Caldwell was correctly decided.
17
Judge Newman:
18
appellant [INDISCERNIBLE]?
19
Mr. Arbab:
20
21
rests on the erroneous premise that the railroad easement in this case was
22
abandoned prior to the issuance of the NITU, that is in the summer of 1995
23
24
this argument is that it rests on the erroneous premise that there was a
25
There
SAppx83
the easement here was not abandoned prior to the STBs issuance of the NITU.
Its quite clear from the statute 49 USC 10903(a)(1) [INDISCERNIBLE] that a
jurisdiction may not have abandon or discontiue service on any part of its
Board.
opinion in the National Wildlife Federation case that the, as the Second
10
Circuit put it, until the ICC or the STB issues a certificate of abandonment
11
the railway property remains subject to the ICCs jurisdiction and the state
12
law may not cause a reverter of the property, whereas the DC Circuit put it
13
14
15
16
17
within the time allowed by the NITU, then the railroad may fully abandon the
18
19
20
21
interim trail use agreement was reached within the time permitted by the NITU
22
23
believe the factual distinctions that Renewal attempted to draw between this
24
25
Judge Newman:
Okay.
Or for the
SAppx84
Mr. Arbab:
Thank you.
Judge Newman:
Mr. Rosati:
this court said there could be, so what the government is potentially arguing
Judge Dyk:
Mr. Rosati:
Mr. Rosati.
I have two final points on the issue of whether there can be
Obviously
10
Judge Dyk:
What pages?
11
Mr. Rosati:
12
13
Judge 3:
14
Mr. Rosati:
15
Judge Dyk:
16
Mr. Rosati:
17
Judge Dyk:
18
Mr. Rosati:
19
where the court says they wouldnt abandon the easement before the ICC took
20
action.
21
22
Judge Dyk:
23
Judge Newman:
24
other case [INDISCERNIBLE] the effect of state law on what happens after or
25
Okay.
[INDISCERNIBLE].
[INDISCERNIBLE].
Yes.
But you dont have a cite.
10
SAppx85
Isnt that
right?
[INDISCERNIBLE].
terminated.
Mr. Rosati:
government regulates the line, but state law regulates the property line.
second point really wasnt addressed by the government is that if there was a
Yes.
10
11
22nd, 1997.
12
user didnt use the property and the railroad didnt use the property.
13
were gone.
14
15
16
17
18
19
didnt happen.
20
Judge Newman:
21
under submission.
We were gone.
The railroad--trail
They
The use
22
23
24
25
11
SAppx86
************************************
Plaintiffs-Appellants,
8
9
V.
10
11
12
13
UNITED STATES,
Defendant-Appellee.
************************************
14
15
No. 2010-5010
16
17
18
Federal Circuit.
19
20
21
22
23
24
25
SAppx87
physical taking?
Mr. Hearne:
Mr. Hearne:
10
Mr. Hearne:
11
their property for that time. Its no different than say [PH] Kendall
12
13
14
15
of time.
16
17
18
Mr. Hearne:
19
that the Ladd family has as the fee owners under Arizona law when the
20
railroad stops railroad use of this easement. So, under Arizona law
21
Judge Linn:
22
Mr. Hearne:
Oh, absolutely -
23
Judge Linn:
24
25
SAppx88
Mr. Hearne:
line washed out in 2005. The tracks and ties have been removed. No trains
have--
Judge Linn:
correct?
Mr. Hearne:
Judge Linn:
In this case, the STB did approve the cessation and abandonment
10
11
Mr. Hearne:
12
their land, to grade their land, to excavate their land, to exclude others
13
from their property, to fence their land, to incorporate this property into
14
their ranches the same way they would have under Arizona law.
15
Judge Linn:
16
NITU issued, and its still subject to an easement the day after it issued,
17
correct?
18
Mr. Hearne:
19
[PH 00:02:11] it is decided just under Arizona law, at some point before
20
2006, the lands could have gone into court in Arizona, and said if the
21
railroad tried to still exclude them and could have filed a quiet title
22
23
24
it talks about rail banking. Well keep this as a trail in case we ever need
But their property was subject to an easement the day before the
If you extract the federal Trails Act from this equation, and
25
SAppx89
to use it as a railroad again, thus kind of linking the trail use to the
Mr. Hearne:
rights; and as you noted in your concurrence in the Preseault case, when the
doing so, they owe the owner compensation because theyve changed the rights
that these property owners had under state law. When the STB invoked the NITU
and invoked the provisions of the Trails Act, which is in 16 USC 1247(d), it
speaks to land, it speaks to who owns and what the rights are in the land.
10
Its not about regulating a railroad. So when the STB issued that, what they
11
did is they redefined the Ladds property rights under Arizona law, deprived
12
them of their usethey cant even file a quiet title suit--and so, at this
13
point, they have lost the use of their land for whatever period of time this
14
15
Judge Moore:
16
reinstitute service and put down tracks along those corridors. Would they be
17
entitled to do?
18
Mr. Hearne:
19
not because of any provision under Arizona law. The railroad lost whatever
20
right they had, and if we take the federal Trails Act out of it, the railroad
21
lost whatever right it had to use this land as a matter of Arizona law when
22
they ceased railroad use, when they removed the rails and ties, and when they
23
24
Judge Moore:
25
issued?
So, not when they removed the rails and ties, but when the NITU
SAppx90
Mr. Hearne:
that the railroad abandoned and lost any interest in right to use this
property. Those would include removing the rails and ties; those would
Judge Moore:
NITU is the trigger. But suppose at the time the NITU was issued, the
railroad was still in fact operating and not abandoned yet. So then, you
wouldn't have a taking as of the time of the NITU because the railroad would
Excuse me. But that causes me pause, because youre arguing the
10
Mr. Hearne:
Well, this courts held that you would still have a taking even
11
in that event, if the railroad were still using it. Thats the Barclay
12
decision--
13
14
Mr. Hearne:
15
Judge Moore:
16
consistent with the logic that youre explaining to us, which is that the
17
trigger really [00:05:00] ought to be when the railroad packs up and goes
18
home.
19
Mr. Hearne:
20
law, what the federal rule is, and what state law is under Arizona law. What
21
are the property interests defined by Arizona law? When we look just to
22
Arizona law, when you find when the railroad packs up and goes home,
23
removes the tracks and ties, then the Ladds own that land free of any burden
24
of an easement. Now federal law changes that, and thats where the NITU comes
25
in.
SAppx91
theres an abandonment.
Mr. Hearne:
the NITU. They pre-empt that state law, they destroy those state rights; and
then thats the takings event. Even if in some cases, like Barclay, the
railroad was still using it, this court has held we dont need to resolve
why, the abandonment issue to decide liability, because what happened is,
what was taken wasnt just the physical possession of the land, but they took
10
11
not following the NITU rule. As soon as the NITU issued, that was the accrual
12
date. What if the NITU doesn't actually delay the consummation of the
13
14
until the Surface Transportation Board actually gets everything prepared for
15
abandonment. What if the NITU doesn't delay that? Is there still a temporary
16
taking?
17
Mr. Hearne:
18
of time, the railroad the railroads actually the beneficiary. So, the
19
20
21
arguments. You either get to choose the consummation point or the NITU point.
22
23
Mr. Hearne:
24
25
point, the point at which the railroad tore up its tracks. Which is it?
Well, the NITU, what that did is that gave, for whatever period
Thats correct.
-- and youve kind of been switching to a different
SAppx92
Mr. Hearne:
court is. I was when I talk about tearing up the tracks, I was referring to
the principles of state law, which are different; but the NITU prevents that
state law from ever coming into play. So, thats definitely the taking
occurs when the NITU is issued. And to the extent we consult state law, that
is just simply showing what was taken, what the federal law pre-empted that
would have been the rule under Arizona state law. And this point is one that
the NITU is the taking, even when a trail is not yet physically built on a
land, its been recognized by solicitor general, now Justice Kagan, when she
10
wrote, Its true that under Caldwell, land owners may seek compensation for
11
the alleged taking immediately upon issuance of the NITU, even though the
12
trail use agreement is not reached, and no taking may later be found, would
13
14
15
16
Mr. Hearne:
17
and abandon railroad service, and in this case they granted the railroad the
18
authority to abandon a railroad service line. Thats under 49 USC 10903. So,
19
those requirements were satisfied. The STB in fact, this was a contested
20
21
22
23
Mr. Hearne:
24
them permission, it found in their order that public use and convenience
25
Correct, and the STB gave them permission. Not only did it give
SAppx93
Judge Moore: Is that the NITU? Is that what youre talking about, that when
Mr. Hearne:
remove their tracks and ties and take this corridor out of railroad service
because the STB made an affirmative factual finding, We dont need this for
Hodges puts these land owners in a trick bag, and the trick bag is this: The
Both in the NITU and in prior the prior proceeding by the STB
10
rule is very clearly announced in Caldwell and Barclay that their statute
11
begins to run in July of 2006. Were now four almost four going on four-
12
and-a-half years later than that. The railroads already been granted
13
14
11, and its likely that would if they requested, it would be granted
15
again. The STB has a policy of granting these to allow the prospect of trail
16
use. So, in that case, we are in a situation where they dont know [00:09:58]
17
when they can make their claim, and they have been [00:10:00] denied use of
18
19
20
Mr. Hearne:
21
22
23
24
Mr. Gette: May it please the court. In Tahoe Sierra, the Supreme Court said
25
Thank you.
Mr. Skinner?
SAppx94
result, in Tahoe, the Court reiterated that there is a bright line that
exists between physical takings and regulatory takings. Despite this bright
line
could correct me, is a regulatory taking, well, takes some share, some part
of the enjoyment of the property whereas the physical taking takes the whole
thing and you have no ability to use any enjoy any share of your property
Now regu can I the way I think of this, and maybe you
10
11
12
trespassing, right?
13
14
stand here today, that is not as a result of the issuance of the NITU.
15
16
17
18
19
enjoyment of property, whereas as the physical taking takes the whole thing.
20
21
Mr. Gette: No, I dont think so, because in the rep, Your Honor, we had a
22
23
24
25
SAppx95
whole thing was taken, and it may be little or great, but the whole thing was
Mr. Gette: Well, and here, I dont think the whole thing has been taken. As I
said, -
10
Mr. Gette: They enjoy a fee interest in that property even today.
11
12
13
Mr. Gette: They enjoy a fee interest burdened only by the railroads right to
14
run a railroad. That was the pre-existing situation before the NITU. Thats
15
16
Judge Moore:
17
Court where Justice Scalia and he actually made fun of you. I mean, I dont
18
think thats going to work on us at this point. You cant say, Oh yeah, well
19
they didnt lose anything because they didnt anything the day before.
20
Mr. Gette: They did have something and they still have something today, and
21
that is the fee interest in the property. That has not changed. Now the NITU-
22
23
back to the Scalia argument, that was pretty well disposed of, wasnt it, in
24
Preseault?
25
10
SAppx96
Mr. Gette: Well, I think in Preseault, and I think if you look at this
courts ruling in Preseault, and it talks about whether the action under the
1920 Transportation Act, for example, constituted a physical taking. And this
provided--as the court was pointing out in the questioning of the appellants-
-is provided under the 1920 Transportation Act, and its also provided under
the Trails Act. But both of those, the delay of the right to enter the
10
11
12
13
it?
14
15
16
17
18
19
20
Mr. Gette: But that right is not granted by the NITU, its granted by the
21
22
Judge Linn:
23
24
25
Mr. Gette:
They still have that right they still can invade, and
Thats right.
11
SAppx97
Judge Linn:
Well then you can have a circumstance where the NITU is issued
and then over six years later, the abandonment occurs and the land owners
Judge Linn:
occurred. If it waits until the taking occurs, the statute of limitations has
Mr. Gette: Well, I think theres a couple of things to say about that, Your
Honor. The first is thatand many of the trial courts have begun to look at
10
this option of staying claims where a NITU has been issued but no final
11
consummation of an agreement for trail use has been found to allow for the
12
13
14
Judge Linn:
15
and then crafts some sort of a rule to react to it. But my question is
16
17
Mr. Gette: Well, I think Caldwell and Barclay tells us that there is a bright
18
line rule as to the accrual of a claim, and it is upon the issuance of NITU.
19
Judge Linn:
20
21
Mr. Gette: It is the point at which the taking occurs. The question is, at
22
23
the time that the NITU issues, we may not know what type of taking we--
24
Judge Moore: No, no it doesn't say we may not know the character of the
25
taking. It says we may not know whether the taking is temporary or permanent.
But that sort of assumes that your view of the law is correct,
12
SAppx98
Its quite clear about that. Theres a difference between saying Caldwell
Mr. Gette: But there is also language in Caldwell that says the issuance and
NITU begins one of what may be many outcomes, not just twowhether its
temporary or whether its permanent. I think that the Caldwell court indeed
taking occur and how you would judge it in terms of character and duration.
Judge Linn:
10
11
Mr. Gette: The Caldwell court certainly never says that a regulatory taking
12
may be something that a future court would have to consider. It wasnt faced
13
with that situation because it had a trail that had been established in this
14
case.
15
Judge Moore: But a regulatory taking and a physical taking would be two
16
17
18
Judge Moore: Yes, a regulatory taking and a physical taking are two very
19
20
21
Judge Moore: So, why would a temporary taking start the clock ticking for the
22
23
arguing the NITU begins a regulatory taking, so how could that mark the start
24
25
13
SAppx99
Mr. Gette: I think in my mind, Your Honor, it works the same way as whether
Judge Moore: Well, permanent and temporary has to do with duration of time,
regulatory are two different causes of action. Its two discreetly different
Youve argued this to us, you cant disagree with it. So, if thats the case,
then how could this regulatory taking start that statute of limitations
10
clock? It cant. The statute of limitations doesn't begin until the cause of
11
action arises.
12
Mr. Gette: Well and if the cause of action is a physical taking, and that
13
only occurs upon entry onto the property, then you are back to the situation
14
where Caldwell and Barclay are incorrectly decided. I dont think you have to
15
go there. I think that you can harmonize these. I think you have a situation
16
where in taking
17
Judge Moore: Is it the government position that Caldwell and Barclay are
18
incorrectly decided. They werent your position to begin with. Ive read
19
every brief going back, and Im surprised Miss Kovacs didnt argue, because
20
she was on all the briefs going back. So, you know, clearly this was not the
21
22
23
Mr. Gette: I think that the government has accepted that it is the position
24
of this court that the NITU establishes a bright line time point for the
25
14
SAppx100
commencement of the takings claim. We dont believe that it defined the exact
Judge Moore:
halting abandonment. Just reading directly from the case. So, you halted
restriction on the Ladds potential use of this property; but it did not
Precisely.
Can I ask to respond to something from Caldwell? The
10
11
12
it has no interest in this property to use it for its own benefit. Theres
13
no third party that was granted a benefit or a right to use this. Theres no
14
15
16
17
18
Mr. Gette: Whats going on is that the railroad has not yet decided whether
19
it wants to give up the right to continue to run railroads over this line at
20
21
have the northern stretch and the southern stretch. The southern stretch, the
22
railroad no longer has an interest in. It has fully abandoned its interest
23
and to the extent that the Ladds and their other property owners have an
24
interest in that property, all easements have now been lifted and they own
25
that property clear. On the northern stretch, the railroad still desires at
15
SAppx101
some point in the future to potentially run trains that will connect to
Mexico--
Judge Moore: Thats railbanking. The potential to run trains. Theyre not
currently running trains. The track is washed away and gone, so their
easement is not preserved. The easement was for while they were operating
railroads. Its not for their desire in the year 3000 to maybe put some more
track down. They dont get to hold it that whole time in perpetuity.
Mr. Gette: One fundamental thing Id like to say, and Ill get then to the
10
11
Judge Moore: Thats not for us. So, for purposes of this hearing, its an
12
easement.
13
Mr. Gette: So, if its an easement, the reason that it has not lapsed and
14
that it has not reverted back to the property owners is not because of the
15
16
17
18
wont be built, that it cant be built now. Everybodys given up on that, and
19
so eventually this land will revert and they will own the land; and this is
20
just a question of how much the damages are, which may be slight because
21
youve limited their enjoyment for a period of time. But you dont argue
22
23
24
25
The government you have to look at the nature of the government action with
16
SAppx102
respect to the property. The court has told us in Tahoe Sierra, you cant
look to the impact it has on the party, you have to look at the nature of the
backyard?
interest that was acquired by the railroads 100 years ago, not because of the
10
Judge Moore: But theyre not running trains now, theyre holding the land in
11
abeyance while they negotiate to see if they can get trail use.
12
Mr. Gette: No, theyre no longer negotiating. The NITU has lapsed. There is
13
no NITU on this property. Its over. The only reason they cannot go on that
14
15
16
17
18
19
interest 100 years ago; not because of the NITU. And even not because of the
20
21
22
23
24
25
yes, youve got your property back, but now we may want to run a railroad
17
SAppx103
again, and so that if you run a railroad again, thats a physical invasion,
instruction weve given them, and not because of a right weve given them.
abandonment and triggers the taking. How do you get around that?
Mr. Gette: As I think we presented, Your Honor, I think its because there is
10
limitations on the use of the property, it did not appropriate a new interest
11
12
13
14
Mr. Hearne:
15
trail could be created. The railroad can and still is-thats the reason that
16
they have agreed to extend their time for filing a notice of consummation of
17
abandonment, because the STB says they extend that to allow the possibility
18
of trail use. In Barclay, the NITU by which the trail was created was the
19
successor NITU, after the original NITU negotiating period ended. During the
20
trial before Judge Hodges, we asked the government, Will you stipulate that
21
no trail can ever be built on this property now that the original NITU
22
negotiating period is over? And they couldn't and wouldn't, because 49 CFR
23
1152(g), the regulation STB has adopted that govern what they do, simply and
24
clearly state even if the original NITU is over and the negotiating period
25
expired, we will still grant a new NITU to create a new trail. So, I dont
Thank you, Mr. Gette. Mr. Hearne, you have a little less
Yes, Your Honor. Tomorrow, a new NITU could be issued and the
18
SAppx104
know nor do my clients know whether there will or wont be a trail. They do
know this, that they do not have access to their property, they do not have
the use of their land, they do not have the ability to exclude others. This
that they enjoyed under Arizona law, and that is a taking, a per se taking
the Supreme Court has so held in the Armstrong case where an order of the
Industrial Bank where a government order that destroyed the value of private
10
11
the only thing the railroad has to negotiate with is what they got from the
12
13
negotiate the sale or giving to another party under Arizona law. So, if the
14
federal government took it from my clients and gave it to the railroad, the
15
federal government under the Fifth Amendment must compensate them for that
16
17
Judge Linn:
18
19
delay in when the property owners could be free of the easement that they had
20
21
Mr. Hearne:
22
1247(d), is the event, and the prior holdings of this court have so held. Is
23
the event--
Was the government action here in issuing the NITU anything more
24
25
19
SAppx105
Judge Linn:
railroad decides its going to resume use for the is it the northern
Mr. Hearne:
Mr. Hearne:
Mr. Hearne:
[INDISCERNIBLE]
One where the abandonment has been consummated.
Yup.
10
11
limbo, right?
12
Mr. Hearne:
13
clients cant use their property and the railroad still has the ability to
14
15
Judge Linn:
16
operation as a railroad, then that the easement that your clients had
17
before the NITU existed would remain on the property for the balance of the
18
19
Mr. Hearne:
20
Judge Linn:
21
were talking about simply a delay, that but for the [00:30:00] NITU and the
22
Rail to Trail Act, then your clients arguably could have gotten their
23
24
Mr. Hearne:
Right.
25
20
SAppx106
Judge Linn:
the same easement that was on the property before. So, it wasnt there was
nothing taken from them in the sense that theres a different easement?
Mr. Hearne:
issuance of the NITU changed the character of the easement as well, because
the easement was one for operating trains across their property. When the
NITU as issued, that then gave the railroad the ability to negotiate the sale
Judge Linn:
10
Mr. Hearne:
Correct.
11
Judge Linn:
12
taking because its an encumbrance upon whatever property right they had.
13
Mr. Hearne:
14
15
16
17
18
19
20
21
22
23
24
25
21
SAppx107
************************************
10
Plaintiffs-Appe l lants ,
11
12
v.
13
14
15
16
UNITED STATES ,
Defendant - Appel l ee.
************************************
17
18
19
20
21
Federal Circuit.
22
23
April 9 , 2013
24
25
SAppx108
[00 :0 0 : 00]
Mr. Hearne:
represen t six Arizona ranch fam i l ies whose claim was dismissed by the lowe r
court , Judge Hodges . For five of these ranchers , the primary issue is whether
or not Judge Hodges was correct to dismiss their claims after remand by
concluding that the limitations period under Section 2501 commences running
on a newly found but older not ice of interim trail use that no one knew about
Judge Lourie :
10
11
Mr. Hearne: Well , I would address that two po i nts , the second point being the
12
public recor d i s the key po i nt. Absolutely it settled law of the circuit that
13
the taking in a Trai l s Act case accrues and the owner had th e right to
14
commence an action for compensation upon the i ssuance of the original NITU
15
settled while we i n no way dispute that . That s well settled now with
16
Caldwel l Barclay I l lig re-hea ri ngs , and rehearing in its own - this case
17
itself . So , t hat is not what we see the issue , Your Honor . Rather it is a
18
question when the owner doesn ' t know of i t , has no knowledge of i t , and you
19
mentioned publ ic proceeding ; and the NITU is not published in the federal
20
21
different lawyers from the Just i ce Department all the way through three years
22
23
Uni ted States Attorney Generals, two different Surface Transportation Board
24
25
SAppx109
Of f ice of Proceedings all concluded tha t the original NITU , the first NITU ,
Chief J udge Rader : And now Caldwel 1 and Barclay, they bo t h involved NIT Us
Chief Judge Rader : - whereas this one involved no pub l ic notice whatsoever .
10
pub l ished . The y didn t say this one was , and there was no evidence of any
11
12
Mr. Hearne:
13
Ju dg e Moore : - is tha t ri g h t ?
14
15
16
17
didn t n ow
18
Mr . Hearne: Correct .
19
20
21
22
Mr. Hearne:
23
24
25
SAppx110
Ju dg e Moore :
- knowledge , n o t hing .
wou l d ask my clients i s , what cou l d they or should they have done to have
informed themselves tha t they p ossess this claim. And the answer is there s
nothing that they cou l d have done . The only -- the manner in which the NITU ,
the 1998 NITU , came into exis t ence was in this private abandonment
proceeding .
Chief Judge Rader : Now are you arguing that we should overtu rn Caldwell and
Barclay and say the NI TU i s not the proper acc r ual po i nt?
10
Mr. Hearne:
Not--
11
Chief Judge Rader : What is your- - what s your point [ IND I SCERNIBLE]
12
Mr. Hearne: Not at all , Your Honor . I think the court has certainly-- this
13
panel is bound , and the court en bane has spoken on this issue , the Caldwell
14
15
16
17
18
19
20
Mr . Hearne:
21
22
23
Section 2501 or princ iples of due process , that the limitat i ons peri od cannot
24
begin running before the owner has notice or reason to know of the NITU s
25
iss uan ce .
[INDISCERN I BLE ] .
So, Cal dwell and Barclay are the law , and the law that would be
SAppx111
Case 1:14-cv-00006-MBH
the railroad had been authorized to abandon the line leading to the NITU
process so that there was some constructive notice , there was public notice
Mr. Hearne: Three responses to that , Your Honor . First , there was a notice
I be l ieve ,
97 , I think .
10
try ing to convert it to any fut ure use . One would have to then know that
11
12
[ 00 : 05 : 00]
13
process . But if they continued reading the federal register every single day ,
14
they wou ld have never come across the NITU , because it was never issued
15
16
17
18
Mr . Hea rne: It didn t say there migh t be an NITU in the federal register
19
notice . Wha t it did say is that there could be other proceedings affecting
20
it .
21
22
Mr. Hearne: So ,
23
24
because I m looking at one in my hand right now . Is it the one from Frida y ,
25
rebruary
14~
it?
SAppx112
Mr. Hearne: - which is the only one we know of or the government has alleged.
Judge Moore : And it contains -- real l y just two sentences , the summary does ,
Judge Moore : It says the Board exemp t s the railroad fro m prior approval
just says if you l ater down the road choose to abandon , you re exempt from
10
11
12
13
Mr . Hearne: That s t he only publ ished notice. You re absolutely correct , Your
14
Honor . And the f ina l point in the response is we wou ld say when an order of a
15
16
17
Judge Moore : You don t need to fight that ba ttl e. Do you really want to fight
18
the ba ttle?
19
Mr. Hearne: I don t think I do. I don t know that I need to , but I make that
20
point because it is one where i n this case , it goes to the fact -- I think the
21
cas e most easily be decided under the accrual suspension rule , under Sect i on
22
250 1 , s imply saying merel on the facts of this case , the r e i s no way t hat
23
this was knowable to t hese owners in o r der to let t hem be informed of a fact ,
24
25
SAppx113
Chief Judge Rader : Why about the line -- excuse me , what about the line
Mr. Hearne: Yes , the deed itself is [ IND ISCERNIBLE) and it was to the
original railroad , the El Paso . And under Arizona law , Arizona , like other
states , should read the two cases , whi c h interestingly Judge Hodges failed to
mention in his decision , wh ich are Boyd and Leisure , both have Arizona
10
th r ough , across and upo n a strip of land for relocation of a railroad line.
11
So , i t was clearly defined , but from t he words of the document and the
12
13
14
15
16
17
18
19
20
Chief Judge Rader : That s the p roblem here , that fee simple is t oo expansive
21
and an easement doesn ' t give you the right to keep th e cattle off the r ai l
22
line. In other words , an easement lets the property owner have access , so it
23
has to be more than a n easement and less than fee simple , which there isn t a
24
fee
25
SAppx114
because that s what the Ar i zona Supreme Court considered in the 1888 Boyd
case , where they were describing what is the unique nature of an interest
that a railroad holds in the land upon which it operates as a rail line . And
the Arizona Supreme Court i n Boyd loo ked exactly at that and said the re s
court s familiar with the Pre seault decision . Judge Plager s ma jori ty talked
10
11
Judge Lourie : Isn t there more language than fee simple? Does bargain , sel l ,
12
13
Mr. Hearne: And that wou l d be the l anguage you would fi n d in quick claim
14
15
plate fo r m la nguage that you can f ind in many instrumen t s that are construed
16
proper l y to be an easement . And I t hink , you know , we have to- - the only way
17
18
19
Chief Judge Rader : And a fee simple deed isn t going to talk about over ,
20
21
Mr . Hearne :
22
23
th r ough stuff if it s a fee simple . They re trying to get somewhere less than
24
a fee simp le and more than an easement , so they keep the cattle off the
25
railroads .
SAppx115
Mr. Hearne: Correct , and that was -- the only i nterest the railroad needed in
this transaction was to acquire easement across a top - rated railroad line .
(00:10 : 00]
decisio n in Preseault . We loo k at the Boyd case in Arizona , and I don t see
that Arizona would have a law differe nt from what this court found to be the
my time for --
10
Mr. Gray: May it please the court , my name is Michael Gray here on beha l f of
11
12
Chief J udge Rader : The tra i ns are running up and down these lines unti l 2005 ,
13
14
exp ired .
15
Mr. Gray:
16
17
Mr. Gray: Wel l , indeed in Barclay , this court said just that , that it did not
18
matter the statute of limitations commences , and i t did not matter that , in
19
that case , the trains -- the railroad was still operating . So , this court has ,
20
in fact --
21
22
when they re running trains on i t , unti l after the time you d have a chance
23
24
25
describe the process here and what actually happens, because what happened in
Indeed --
SAppx116
this case is actually not any di f f erent than what happens in the normal case
Chief Judge Rader : It sounds to me like you re going to argue NITU is the
isntit?
Mr. Gray : No , Im going to argue that you cannot rule for the plaintiff in
this case without completely eviscerating the rule anno need in Caldwell and
Barclay , -
10
Mr. Gray:
11
12
13
14
15
16
17
18
19
Mr. Gray: That particular po int was not disputed; but the facts of this case
20
are the iss uance of the NITU happens in the exact same way that it happened
21
22
Judge Moore : Yeah , but there they didn t argue they didn t know . Here they
23
didn t know , and for a taking , you ve got to have actual or constructive
24
knowledge . So, where is the constructive know l edge of this [PH Jdismissal?
We have no
25
10
SAppx117
Chief Judge Rader : I m looking at this document that Judge Moore has talked
Mr. Gray: Okay , if you re a land owner , you have a couple of things. You have
Mr. Gray: - which you are on notice of , correct? Then , you also have --
Chi ef Judge Rader : The trains were s t ill r unn i ng there till 2005 .
Mr. Gray : But i t s incumbent upon you when you have a railroad runni ng
10
11
12
13
14
Mr . Gray: The federal register , the railroad f i led--the STB then says, a
15
16
that the notice i s--and I m quoting from the federal register notice here--
17
subject to historic preservation , trail use , public use and standard labor
18
protective condition s and that add i t i onal requests for inter i m tra i l use ,
19
20
date . So , if you are a land owner who has a rai l road running through your
21
property and you are paying attention , you know that there s an abandonment
22
that might happen . You re interested in the land reverting to you , so you r e
23
24
proceeding has started . At that point , you can sign up with the Surface
25
Transportation Board in the notice . In that notice , they described the rail
11
SAppx118
This
operator , the county through which it runs , the te rminus points that are
proposed to be abandoned . They provide the names and addresses of who to call
fo r further information , and at that po i nt , you can contact the STB and ask
notice of interim trail use is issued and you are on the service list , then
Chief Judge Rader : This document could l ead to continued use of the rai lw ay ,
10
Chief Judge Rader : And so I see the tra i ns ru nning by until 2005. I conclude-
11
12
13
Chief Judge Rader : You conc l ude it wasn t abandoned , the trains are still
14
running .
15
16
17
18
Chief Judge Rader : I don t think so . Tha t where I m-- I don t read Barclay as
19
20
Mr . Gray : The language in Barclay was that -- the Barclay says explicitly
21
(00 : 15 : 00]
22
it does not matter , that i n that case that the railroad continued operating ,
23
that the notice--the date the not i ce of interim tra i l use is i ssued is what
24
matters .
25
12
SAppx119
Judge Moore : Well , beca use there was no dispute , t hat the land owners in that
case had notice . So , you re right it didn t matter that the trains continued
to o perate , because that wasn t the t rigger for giving them notice. That
Mr . Gray :
the taking accrues , i t happens and accrues on the day the notice of interim
trail use i ssues , which they don t contest and wh ich Caldwell and Ba rclay
clearly ho l d that that happened . Then the standard is -- but the not i ce of
10
this n otice of interim trail use was issued in the exact same way tha t
11
12
13
Mr. Gray:
14
15
16
17
18
19
Ch ief Judge Rader : Because then we wou l d have the gover nment issuing
20
21
22
23
24
Mr. Gray:
they
[INDISCERNIB LE] --
I don t
know that you can requ ire that. What you would have
No [INDISCERNIBLE ].
25
13
SAppx120
Mr. Gray: In Barc l ay and in Ladd , this cou r t has clearly expressed a
preference for a br i ght line ru l e because of the problems you would have with
so many land owners with so many interests . I mean , here you have some with a
few simple interests , some without , some that may have reversionary interest ,
talk about a rule that says you have to ascertain whether each indi vidual
10
11
Judge Moore : No , it can t . That s the rule , the rule you have to have
12
13
I mean , these are the Supreme Court dictates on what claim can accrue .
14
Mr . Gray : I think that the only way that you can read Caldwell and Barclay is
15
that because the notice o f in t erim trai l use happ ens as part of a public
16
17
in al l cases for constructive notice , because if it snot , then you cant say
18
that the notice of interim tra i l use starts -- i n the previous appeal in this
19
case --
20
21
22
Mr . Gray : No , they weren t because they we r e--those cases were dism i ssed for
23
24
25
right?
14
SAppx121
[OVERLAY ]
Mr . Gray : We don t have in the record evidence of the newspaper notice. There
[ INDISCERNIBLE ]
10
newspape r,
11
12
[OVERLAY]
13
Mr. Gray : They certainly haven t proven that no notice was given.
14
Judge Moore : Hello? You didn t even allege that there was , in fact , a
15
16
17
Mr. Gray : Caldwell and Barclay adopted such a bright line rule that I don t
18
think anybody thought it was going to be necessary to go back and search the
19
news papers records from 1997 t o see if the railroad published a notice . The
20
reg u lation --and let s be clear , the notice is not of the interim trail --
21
Chi e f Judge Rader : We v e got thi s thing we v e got th e inte rnet now. You can
22
plug i t
23
Mr. Gray :
24
Chief Judge Rader : You re making this so u nd a little more difficult that it
25
probably is .
15
SAppx122
Mr. Gray: I m not sure if tha t s -- I m not sure how well the internet records
go back for newspaper publica t ions in Arizona in the mid - 90s , but that s
the regs for the notice of i nte r im trai l use i tself in any case . So, the
federal register notice was sufficient , regard l ess of wh ether there was a
newspape r not i ce , to put the plaint i f f on notice that the proceeding was
10
11
12
of the standard in the Ingram case , which in footnote one , this court says is
13
the same standard , that they don t mean to be stating a different standard
14
from
15
(00 : 20 : 00 ]
16
17
interim trail use , which is the publication of the proceedi n g in the federal
18
register , then issuance without ac t ual notice , if the court decides that is
19
inherently unknowable , then again , we believe that completely guts the rule
20
21
Judge Moore : So , tell me how , in you r mi nd , they would have to find out about
22
the issuance of the NI TU , the day it i ssued? What would indi vidual l and
23
owners have to do , and what s your view is i t that they should have done to
24
be on notice?
25
16
SAppx123
Mr. Gray: What they would need t o do is keep abreast of the STB proceedings
Ju dge Moore :
Mr . Gray:
Judge Moore : I know . Slow down , let me get some words i n here . So,
have to stay in contact with the railroad , do you envision weekly , monthly ,
yearly? What i s your view of the ob l igation on the l and owner to appr i se
right? You know you have a railroad . You can stay in contact
What shou l d we be d oing?
[ OVERLAY 00 : 20 : 54 ]
10
itself when the government issues this NITU , which i t doesn ' t
publish
11
12
Mr. Gray : They have a six- year l i mi tations per iod . They need to apprise
13
14
15
16
obligation on a l and owner to make sure that it knows what s happening with
17
its property is common in the law of property. And so , what they should be
18
doing --
19
Judge Moore : Not when there s al r eady been an easement and they continue to
20
21
them , that says the l and owners should have apprised itself ,
22
not i ce the government drove a g i ant backhoe onto your land and dug out half
23
of i t? Well ,
24
25
on--
I ve been on many of
how did you not
17
SAppx124
instances of the government bombing the land or taking fill from it . This is
akin to if a municipa l ity were to pass a regulation that says , you know , you
can have no development of this property at al l , and doesn ' t provide any
actual not i ce , and the statute of limitations period has run , you would say
10
11
12
Mr. Gray : I do , and- - our view on that issue is that in fee simple means -- in
13
fee simple , it says , you know , it s conveyed in fee simple -- the in fee simple
14
[OVERLAY]
15
16
17
18
19
Chief Judge Rader : - and upon and all these limitations that are easement
20
language.
21
22
23
Mr. Gray : - you know , r ight of way is an easement language . I don t think
24
25
18
SAppx125
we re giving up that s part of the parcel that goes through our parcel . It s
presumption is you give a fee grant isn t enough , I m not sure what they
would have said to grant a fee simple interest here . I do want to go back
though and just make clear again , because I m not sure I got to completely
address Judge Moore s quest i on about what we expect the m to do . And again ,
when the federal register notice is issued -- which t h is court has said
in fee simple
10
parties , no matter any in justice that results . When that notice is issued ,
11
all they have to do is come and ask to be put on the service list with the
12
STB when a NITU is issued as part of t he process , they will receive notice of
13
it. That is not much to ask a land owner that has a railroad running through
14
15
Chief Judge Rader : Thank you , Mr . Gray , and thank you for responding to many
16
17
Mr. Hearne: Thank you , Your Honor. What the government is asking this court
18
to do, and what they asked Judge Hodges to do , is to impose on these Arizona
19
ranchers a standard of
20
[00 : 25 : 00]
21
22
23
different Assistant Attorney Generals , two different General Couns els from
24
25
the commissioners--
19
SAppx126
Chief Judge Rader : But Mr . Hearne , I t hink you really need to deal with the
key po i nt from what Mr. Gray t old us , and that is i f we depart from th is
bright line NI TU rule , don t we have to then start analyzing each individua l
land owner independent l y for when they knew or should have known with
d iff ere n t facts and the complexities of administrative -- comple xi ty tha t would
mean?
Mr . Hea rne : Su re . Two answers , Yo u r Honor . First off , o n the facts of this
case , the court is certainly able to ru l e on the facts of th i s case fol low i ng
settled princ i ples un der the accrual suspension rule that these owners did
10
11
facts . That would be a very limited r ul ing that would apply to these owners .
12
The broader po i nt is t hat maybe this wi l l come up i n other Trails Act cases ,
13
because for whatever reason , the Surface Transportation Board has chosen ,
14
15
16
17
18
Arizona owners . They would have b rought an act i on ha d t h ey known about this --
19
and they cou l dn ' t have. They d i dn t have -- un like othe r cases -- the knowledge
20
that perhaps Caldwell did , General Caldwell d i d i n that case where there was
21
d is cuss i ons about when the deed was re co r d e d and there was some knowledge .
22
23
cases where an owner such as th i s does not ever have a reason to know or have
24
25
where the acc ru a l suspension or p rinc ipl e s of du e process would delay the
20
SAppx127
beginning of the running of the limitation period until such time as the
that s what this court has held , and it makes sense , because that order d i d
of it , doesn ' t
implemented,
10
NI TU i s issued ,
11
12
13
they wou l d have been reading the federal register every day , and --
14
Judge Moore : Hold on now . If a NITU had issued in the federal register for
15
the who l e wor l d to see , would you sti l l be arguing they didn t have
16
construct i ve knowledge?
17
Mr. Hearne:
18
a NITU --
19
Judge Moore : Yeah , if a NITU had been published in the federal register . Are
20
you saying that would not have been adequate to put them on constructive
21
notice?
22
Mr. Hearne: It - there certainly would be a much better argument that they
23
24
25
Mullane and New York Central cases , and Mennonite, when the government
in fact ,
21
SAppx128
age nci es orders taking t he property . But I don t -- as you me nti oned , Your
Honor ,
Ju dge Moore : So , wha t they have had to do to put themse l ves o n a notification
l i st?
Mr . Hearne : Well , I think at minimum , they wou l d have -- t hey should have
coI1Lmun i t y cou l d have read it , and th ey would have had a pub l ication that the
I don t
10
owners hav e a claim ; much as required in the opt-in class action p rocedures
11
in these Trails Act cases , the Court of Claims routinely requires publ ish a
12
13
14
going on ; and i f they have a claim , the ability to participate or not . That
15
wasn t done here , and these peo ple had no ability to protect their rights ,
16
because they didn t have the knowledg e of the basic facts necessary to do so.
17
18
Ch i ef J udge Rader : Thank you , Mr . Hearne , and that conc l udes our mo r ning .
19
20
21
22
23
24
25
22
SAppx129
rs~;:;;;;;;;;c"urt U.S.
'ILE D
MAY 2 9 2009
No. 08-852
v.
UNITED STATES OF AMERICA
ELD/A KA<;A~
S olic ifOI' Gl'ltPl'nl
Ge11!'ral
KATHlff~
E.
KOVACS
Attor11<'!!
Dl'}wl'f11n11t o(.!1rntic:e
Wa.~l1i11qto11, D.C. lO.i.J0-0001
rlOl) :;u-L~l I
SAppx130
Blan~~ PaQe
I SAppx131 I
QUESTION PRESENTED
SAppx132
Blank Page
I SAppx133 I
TABLE OF CONTENTS
Page
Opinions below . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Jurisdiction ........................................... 1
Statement ............................................ 2
Argument ............................................ 7
Conclusion .......................................... 17
TABLE OF AUTHORITIES
Cases:
Barclau v. United StateR, 443F.3d1368 (Fed Cir.
2006), cert. denied, 549 U.S. 1209 (2007) .... 7, 12, 14, 15
Caldwell v. United StateR, 391 F .3d 1226 (Fed. Cir.
2004), cert. denied, 546 U.S. 826 (2005) ........ passim
Chicago & N. W. Transp. Co. v. Kalo Brick & Tile Co.,
450 U.S. 311 (1981) ............................... 2
Hash v. United States, 403 F .3d 1308 (Fed. Cir. 2005) ... 15
SAppx134
IV
Cases-Continued:
Page
49
u.s.c. 10~)03
............................... 3
49
u.s.c. 10903(d)
............................. 3
............................... 3
49 C.F.R.:
Section
1152.2~J(a)
................................ 4
SAppx135
v
Page
Regulations-Continued:
Section 1152.29(c)(l)
Section 1152.29(d)(l)
Section 1152.29(d)(2)
Section 1152.29(d)(3)
Section 1152.29(e)(2)
............................. 11
........................... 4, 11
.............................. 5
.............................. 5
.............................. 4
SAppx136
Blank Page
SAppx137
v.
UNITED STATES OF AMERICA
OPINIONS BELOW
SAppx138
2
STATEMENT
In the ICC Termination Act of H)!J5, Puh. L. No. 104-RR, lO!l Stat.
808 (49 U.S.C. 701 et seq.), Congre~::; abolished the ICC and replaced it
with the STH. See 4~) U.S.C. 702.
SAppx139
SAppx140
SAppx141
SAppx142
SAppx143
SAppx144
8
seeking just compensation under the Tucker Act, 28
U.S.C. 1491(a). P.re.i;eault I, 494 U.S. at 11-17.a
The petitioners in Preseault I subsequently filed a
Tucker Act suit. By a divided vote, the en bane Federal
Circuit answered the takings question this Court had
declined to answer in Pre.<;eault /. Preseault v. United
State.s, 100 F.3rl 1525 (1996) (Preseau,lt !!). The plurality held that a Fifth Amendment taking occurs under
the Trails Act when the Act precludes the abandonment
and extinguishment of a railroad easement under state
law, and thus prevents any state-law reversionary interests from vesting in a property owner. Id. at 1550-1551,
1552. 4
In Caldwell v. United States, 391 F .3d 1226 (2004),
cert. denied, 546 U.S. 826 (2005), the Federal Circuit
held that such a daim accrues when "the railroad and
trail operator communicate to the STB their intention to
negotiate a trail m;e agreement and the agency issues an
NITU that operates to preclude abandonment under [16
:i A.o;; petitionerR not1~ (Pet. 17-18), the Prexeault I Court stated that
the Trails Act "prevent[ s 1property interests from reverting under i:;tate
law," 494 U.S. at 8, and suggei:;ted in dicta that "Rome rail-to-trail conversions will amount to takings,'' id. at l(i; 1-1ee also id. at 16 & n.fl (providing examples of applicatiom; of the Trails Act that would not amount
to takings). But the Court explicitly rei:;erved the question whether a
taking had in fact occrrred, id. at 17, and did not further addresi:; the
contouri:; of' a Trni'8 Aet takingi:; claim.
~ A.o;; the plurality noted in Pre.~eanlt II, it Lo;; commonly said that interei:;t in an easement "reverts" to a property owner upon termination
of the em;ement, although it would be more accurate to say that, when
the easement is extinguished, the inte1est in the easement "yei:;t.f "l" in
the prope1ty owner. ::-:ee 100 F.8cl at 15:1:1-15:l4. Consistent with common usage, howe\'el', this hl'iefrefel'R to a prope1ty owner's retained interest following conve:;ance of an ca::;ement ai:; a "reversionary" inter-
e;;t.
SAppx145
SAppx146
10
tioners' claim accrued, and the statute of limitations began to run, when the ICC issued the NITU on March 25,
1992. See Pet. 3a-4a.
As the court explained in Caldwell, when the ICC
issued the NITU, it simultaneously authorized railbanking and interim trail use, and delayed consummation of
abandonment under federal law pending negotiations
between the rail carrier and the trail operator. At that
point, the ICC's involvement in the disposition of the
railroad easement was at its end; no further approval
would be required for the trail operator to commence
interim trail use. Issuance of the NITU thus marked
the moment at which federal law (1) at least temporarily
forestalled the vesting of any state-law reversionary
interests, and (2) authorized indefinite preclusion of
such reversionary interests, contingent on the finalization of an interim trail use agreement. See Caldwell,
391 F.3d at 1233-1234.
Petitioners' claim, which was filed more than six
years after Section 1247(d) first operated to preclude
the reversion of their state-law interests in the former
railroad right-of-way, was untimely under 28 U.S.C.
2501.
2. Although petitioners argue at length (Pet. 19-23)
that the court of appeals erred in attributing any significance to the issuance of the NITU, they ultimately acknowledge that, "[i]f the easement would otherwise have
been abandoned (by means other than conversion to interim trail use) before or during" the period in which the
NITU is in effect. "the NITU might effect a taking for
the duration of the negotiations." Pet. 27." Petitioners
'' Petitioner:; do not cliHpute that, in thii:; caHe. "the easement would
othen\ii:;e have heen ahancloned" under Htate law "before or during" the
SAppx147
11
SAppx148
12
law, land subject to a railroad easement may not revert
to the adjacent property owner while the easement is
actually being used as a recreational trail. 16 U.S.C.
1247(d). But, as petitioners appear to recognize (Pet.
27), by the time a trail use agreement is signed, federal
law has already forestalled any such reverRion. As the
Federal Circuit has explained, a NITU stands as a "barrier to reversion" so long as it is in effect. Barclay v.
United States, 44;3 F.3d 1368, 1374 (2006), cert. denied,
549 U.S. 1209 (2007).
Petitioners contend that any taking that commences
upon issuance of the NITU is "temporary at the outset,"
and that their takings claim should not accrue until the
taking is "transformed into a permanent interference."
Pet. 31 n.4. The court of appeals has correctly rejected
that contention. See Caldwell, 391 F .3d at 1235. As the
court explained, under the current regulations implementing the Trails Act, "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." Id. at 1233-1234. To the extent the
government's action results in a taking of property, it is
a "single taking," id. at 1235, of a "single reversionary
interest," Barclay, 443 F .8d at 1378.
The issuance of the NITU thus "marks the 'finite
start' to either temporary or permanent takings claims."
Caldwell, 391 F.3d at 1235. When the NITU is issued,
all the events have occurred that entitle the claimant to
inRtitute an action based on federal-law interference
Fifth Amendment liability un<ler the Trail;; Act. The cour;;e oflitigation
in thi;; ca;;e has muTowe<l the is8UeH to the queHtion when the Htatute of
limitatiom; begins to run on a claim that the Trails Act haH blocke<l the
vesting ot' Htate-law p1'<ipe1ty interests. See Pet. App. la-4a; cf. Pet. i.
SAppx149
13
with reversionary interests, and any takings claim premised on such interference therefore accrues on that
date. John R. Sand & Gravel Co. v. United States, 457
F.3d 1345, 1355-1356 (Fed. Cir. 2006), aff'd, 128 S. Ct.
750 (2008) (internal quotation marks and citations omitted). The fact that any taking resulting from the interference may later prove to have been temporary is irrelevant; as the court of appeals has explained, "[i]t is not
unusual that the precise nature of the takings claim,
whether permanent or temporary, will not be clear at
the time it accrues." Caldwell, 391 F.3d at 1234.
Finally, accepting the proposition that the NITU
marks the "finite start" of their claim based on the preclusion of reversionary interests, petitioners contend
that the preclusion does not "stabilize[]," and the claim
thus does not accrue, until the rail carrier and the trail
operator enter into a trail use agreement. Pet. 31. Petitioners rely for that contention on United State.'! v. Dickinson, 331 U.S. 745 (1947), in which the Court held that
the statute of limitations did not bar a claim for a taking
of property by gradual flooding ''when it was uncertain
at what stage in the flooding operation the land had become appropriated to public use." United StateR v. Dmo,
357 U.S. 17, 27 (1958). In this case, however, petitioners do not dispute that the preclusion of reversionary
intereRts on which their takings claim rests occurred
immediately upon issuance of the NITU, rather than
gradually, as in Dickin.~on. That it may not have been
clear at the outset whether the preclusion was indefinite
or merely temporary does not change the fact that the
NITU marked the "finite start" to the preclusion.
Caldwell, 391 F.:3d at 1235.
3. Petitioners (Pet. 32) contend that this Court's review is warranted to resolve a conflict with National
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15
In any event, even if there were an intra-circuit conflict between later and earlier cases on this issue, it
would not warrant this Court's review. See Wisniewski
v. United State.~. 353 U.S. 901, 902 (1957) (per curiam).
Petitioners claim that any intra-circuit conflict in this
area is "uniquely important" because the Federal Circuit has "exclusive appellate jurisdiction over takings
claims against the federal government." Pet. 33 n.5. But
as Caldwell and Federal Circuit cases following it (including this case) make clear, the Federal Circuit now
consistently applies the Caldwell rule. There thus is
now clear precedent for trial courts to follow in Trails
Act cases under the Tucker Act, and landowners have a
clear and simple rule for determining when a just compensation claim accrues.
4. Finally, petitioners err in suggesting (Pet. 35-37)
that the decision below has important practical consequences that warrant this Court's intervention.
Although petitioners repeatedly criticize (Pet. 19, 35)
the court of appeals for adopting a "one-size-fits-all
'bright-line rule,'" that bright-line rule has the singular
virtue of providing certainty to prospective claimants of
when their claims accrue and when the limitations period expires. See Barclay, 443 F.3d at 1378. Notably,
reational trail" results in a taking of property under the Fifth Amendment. P1e1-;emtlt Ii, 100 F.3d at 15:31 (plurality opinion); see also HaNh
v. U11ited Stote.~. 40;'! F.ad 1308, 1318 (Fed. Cir. 2005); ToewN v. United
Staff's. :~76 F.:~d 1:-171, Ia81 (Fer!. Cir. 2004). Prcseanlt !I, however.
held that a taking occu!'red when the Trails Act operated to prevent a
property owner's interests in a railroad right-of-way from reverting to
the owner in aceo1-dance v,;th state law. 100 F.:ld at lfill0-151ll, Hi52;
see Cof<i1veU, :l~Jl F.:M at 12:i:t The court in Preserwft II had no occasion to consider whether the preclusion of reversionary interests ocrm-rPrl simultaneously with "the et-itablfohment of the recreational trnil,"
01 upon issuance of a NITU.
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erty" will require compensation, ibid.; cf. Caldwell, 391
F .3d at 1234 n. 7 (reserving the question whether "the
issuance of the NITU in fact involves a compensable
temporary taking when no agreement is reached").
Finally, there is no merit to petitioners' suggestion
(Pet. 35) that the decision below raises justiciability
questions that warrant further review. Petitioners acknowledge that a claim becomes ripe, and that a landowner has standing, when Section 1247(d) has "interfere[d] with the abandonment and reversion that would
otherwise occur under state law." Pet. 35. For the reasons explained above, see pp. 8-10, supra, that interference begins on the date when the STE issues a NITU,
which "halt[s] abandonment and the vesting of state law
reversionary interests when issued." Caldwell, 391 F.3d
a.t 1235. This Court has twice before denied review of
that conclusion, in Caldwell and Barclay, and there is no
reason for a different result in this case.
CONCLUSION
Solicitor Ge11cral
,JOHN C. CRUDE'.'<
Att<rl'IU!//
MAY 2009
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Erika Kranz
Katherine J. Barton
Department of Justice,
Environment and Natural
Resources Division
PO Box 7415
Washington, DC 20044
202-307-6105
[email protected]
[email protected]
Counsel for Appellant
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