Farmers Cooperative Co. v. United States

98 Fed. Cl. 797, 2011 U.S. Claims LEXIS 1140, 2011 WL 2508242
CourtUnited States Court of Federal Claims
DecidedJune 24, 2011
DocketNo. 09-741L
StatusPublished
Cited by9 cases

This text of 98 Fed. Cl. 797 (Farmers Cooperative Co. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Farmers Cooperative Co. v. United States, 98 Fed. Cl. 797, 2011 U.S. Claims LEXIS 1140, 2011 WL 2508242 (uscfc 2011).

Opinion

OPINION AND ORDER

DAMICH, Judge:

This is a “rails to trails” ease in which Plaintiffs seek a judgment of liability against the United States for a Fifth Amendment taking of their properties subject to a railroad right-of-way held by Kansas & Oklahoma Railroad (“K & 0”) in Comanche, Kiowa, Pratt, and Hodgeman Counties, Kansas. Defendant has cross-moved for partial summary judgment on liability or, in the alternative, for a judgment limiting liability to that of a temporary taking.

Although the railroad rights-of-way in question were never in fact used as recreational trails pursuant to the National Trails System Act, 16 U.S.C. § 1241 et seq. (2006) (“the Trails Act”), the court finds that the actions of the Surface Transportation Board (“STB”), a federal agency that is the successor to the Interstate Commerce Commission (“ICC” or “the Commission”) and affiliated with the United States Department of Transportation, did constitute a taking of Plaintiffs’ property rights on a temporary basis.

For the reasons stated below, the Court therefore grants Plaintiffs’ motion for partial summary judgment but only in part, in that Defendant is liable for a taking, but the taking was of temporary duration. The Court grants-in-part and denies-in-part Defendant’s cross-motion. The Defendant is liable for a temporary taking, but the duration of the temporary taking is longer than that asserted, in the alternative, in Defendant’s cross-motion.1

I. Background

A. The Trails Act

“[T]he purpose of the Trails Act was to preserve unused railroad rights-of-way by converting them into recreational trails.” Barclay v. United States, 443 F.3d 1368, 1371 (Fed.Cir.2006). It is settled law, however, that “a Fifth Amendment taking occurs in Rails-to-Trails cases when government action destroys state-defined property rights by converting a railway easement to a recreational trail, if trail use is outside the scope of the original railway easement.” Ladd v. [799]*799United States, 630 F.3d 1015, 1019 (Fed.Cir.2010).

Railroads must seek the approval of the STB to officially discontinue or abandon use of a railroad corridor. Nat'l Ass’n of Reversionary Prop. Owners (“NARPO ”) v. STB, 158 F.3d 135, 137 (D.C.Cir.1998). The Trails Act provides for a process called “rail-banking” as an alternative to discontinuance or abandonment. Caldwell v. United States, 391 F.3d 1226, 1229 (Fed.Cir.2004). The right-of-way is said to be “‘banked’ until such time as railroad service is restored.” Caldwell v. United States, 57 Fed.Cl. 193, 194 (2003), aff'd 391 F.3d 1226 (Fed.Cir.2004).

The process of abandonment begins with either an Application or what is called a “Notice of Exemption,” which is a less involved process. After the Application or Notice of Exemption is filed, a proposed trail operator, such as a state, municipality, or private group, can submit a proposal for converting the railway to a trail. The proposal “must include a statement of willingness to manage the corridor, assume liability, and pay taxes.” NARPO, 158 F.3d at 138. If the railroad and the proposed trail operator indicate a willingness to negotiate a trail use agreement, “the STB stays the abandonment process and issues a notice allowing the railroad right-of-way to be ‘railbanked.’” Caldwell, 391 F.3d at 1229.2 The determination of the railroad whether to engage in such negotiations is voluntary. Nat'l Wildlife Fed’n v. Interstate Commerce Comm’n, 850 F.2d 694, 702 (D.C.Cir.1988). If the railroad agrees to negotiate a Trails Act agreement, however, the STB is required to issue a “NITU” (“Notice of Interim Trail Use or Abandonment”), in exemption proceedings, or a “CITU” (“Certificate of Interim Trail Use or Abandonment”), in abandonment application proceedings. Barclay, 443 F.3d at 1376; Capreal v. United States, 99 Fed.Cl. 133, 136 (2011). If a trail use agreement is not reached, the NITU expires 180 days after its issuance.

This case involves a NITU, which “permits the railroad to discontinue service, cancel tariffs, and salvage track and other equipment, consistent with interim trail use and rail banking1 without consummating an abandonment.” Caldwell, 391 F.3d at 1230. If an agreement is reached between the railroad and the trail operator, “the NITU extends indefinitely to permit interim3 trail use.” Id. The STB’s issuance of the NITU suspends exemption proceedings for 180 days to allow for negotiation of an agreement. Barclay, 443 F.3d at 1371; 49 C.F.R. § 1152.29(b)(2) and (d). “If no trail use agreement is reached, the NITU converts into an effective notice of abandonment, allowing the railroad to ‘abandon the line entirely and liquidate its interest.’ ” Id. (quoting Preseault I, 494 U.S. at 7, 110 S.Ct. 914); see also Ladd, 630 F.3d at 1023 (“Alternatively, negotiations may fail, and the NITU would then convert into a notice of abandonment.”).

If agreement is reached, “the STB retains jurisdiction for possible future railroad use, and state law reversionary interests that would normally vest upon abandonment are blocked.” Caldwell, 391 F.3d at 1230. As the Federal Circuit has held: “The taking, if any, when a railroad right-of-way is converted to interim trail use under the Trails Act occurs when state law reversionary property interests that would otherwise vest in the adjacent landowners are blocked from so vesting.” Caldwell, 391 F.3d at 1233. It has further held that successfully “entering into a trail use agreement and converting the railway to a recreational trail” are not necessary elements of a takings claim. “Hence, it is irrelevant that no trail use agreement has been reached and that no recreational trail has been established.” Ladd, 630 F.3d at 1024. Because “the issuance of the NITU is the only government action in the rail banking process that operates to prevent aban[800]*800donment of the corridor and to preclude the vesting of state law reversionary interests,” id., “the appropriate triggering event for any takings claim under the Trails Act occurs when the NITU is issued.” Caldwell, 391 F.3d at 1235.

B. Factual Background

In 1887, K & O’s predecessor-in-interest, the Chicago, Kansas & Western Railroad Company (“CK & W”), acquired the easement in question through condemnation procedures under Kansas law in Comanche, Kiowa, Pratt, and Hodgeman counties. Def.’s Resp. at 6.

Plaintiffs own property under or adjacent to either of two rail line segments held by K & 0 running through these counties (respectively, the “CKP Corridor” and the “Hodge-man Corridor”).4 Pis.’ Proposed Findings of Uncontroverted Fact, ¶¶ 1, 17-74. Pis.’ Ex. 6 (Bates no. 00101).

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Cite This Page — Counsel Stack

Bluebook (online)
98 Fed. Cl. 797, 2011 U.S. Claims LEXIS 1140, 2011 WL 2508242, Counsel Stack Legal Research, https://law.counselstack.com/opinion/farmers-cooperative-co-v-united-states-uscfc-2011.