Pressly v. United States

Court of Appeals for the Federal Circuit·Decided April 30, 2026·No. 24-1823·Published

Opinion

United States Court of Appeals for the Federal Circuit

ROBERT A. PRESSLY, ET AL., Plaintiffs

JASON BREHM, ET AL.,

Plaintiffs-Appellees

v.

UNITED STATES, Defendant-Appellant

2024-1823

Appeal from the United States Court of Federal Claims in Nos. 1:18-cv-01964-MMS, 1:19-cv-01375-MMS, Senior Judge Margaret M. Sweeney.

Decided: April 30, 2026

MICHAEL JAMES SMITH, Stewart, Wald & Smith, LLC, St. Louis, MO, argued for plaintiffs-appellees. Also represented by STEVEN WALD.

JOHN KENNETH ADAMS, Environment and Natural Resources Division, United States Department of Justice, Washington, DC, argued for defendant-appellant. Also represented by AMBER BETH BLAHA, ADAM R.F. GUSTAFSON.

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Before MOORE, Chief Judge, CHEN and STARK, Circuit Judges.

STARK, Circuit Judge.

This appeal arises from a rails-to-trails land conversion in Indiana carried out under the National Trails System Act Amendments of 1983 (the “Trails Act”). Plaintiffs-Appellees own land adjacent to rail corridors on which the Peru and Indianapolis Railroad Company (“PIRC”) historically operated a railroad. Before the Court of Federal Claims, Plaintiffs asserted that they also own the land underlying the rail corridors. On that basis, they argued that the Surface Transportation Boards’s (“STB”) issuance, to PIRC’s successors-in-interest, of Notices of Interim Trail Use (“NITUs”) – which authorize conversion of the rail corridors for public trail use – constituted a taking of their property without just compensation, in violation of their rights under the Fifth Amendment.

The Court of Federal Claims agreed with Plaintiffs. It determined that PIRC’s interests in the rail corridors were limited to easements, which were extinguished when PIRC ceased operating the railroad, thereby causing fee simple title of the land parcels to revert to Plaintiffs under Indiana law. Hence, the court reasoned, the government’s issuance of NITUs to PIRC’s successors, and the plan to use the corridors for trails without providing just compensation to Plaintiffs, resulted in an unconstitutional taking.

The government now appeals. It argues that the Court of Federal Claims erred by determining that PIRC held easements, rather than fee simple title, in the land underlying the corridors at issue. Because the record demonstrates that PIRC’s interests in the corridors were limited to easements, and Plaintiffs hold fee simple title to the land underlying those corridors, we affirm.

PRESSLY v. US 3

I

Under the Trails Act, railroad operators may, upon discontinuing rail service, opt to convert their rail corridors to trails rather than abandon them altogether. See National Trails System Act Amendments, Pub. L. No. 98-11, § 208(2), 97 Stat. 42, 48 (1983) (codified at 16 U.S.C. § 1247(d)). A railroad operator wishing to pursue such a conversion must seek abandonment authorization from the STB. See 16 U.S.C. § 1247(d); 49 U.S.C. § 10903. When a railroad does so, potential trail sponsors may file a request with the STB expressing interest in establishing an interim trail, subject to the potential restoration of rail use in the future. See 49 C.F.R. § 1152.29(a)-(c). If the railroad operator agrees to interim trail use, STB will issue an NITU. See id. at § 1152.29(d)(1).

“When an NITU is issued and state law . . . interests that would otherwise take effect pursuant to normal abandonment proceedings are forestalled,” an unconstitutional Fifth Amendment taking has occurred, unless the holder of the interest receives just compensation. Caldwell v. United States, 391 F.3d 1226, 1236 (Fed. Cir. 2004). For example, a taking occurs when a railroad holds only an easement 1 for railroad purposes that would, under state law, be extinguished upon cessation of railroad operations, yet an NITU creates an easement for trail purposes, preventing the fee title to the underlying corridor – which the

1 “[A]n easement merely gives the grantee the right to enter and use the grantor’s land for a certain purpose, but does not give the grantee any possessory interest in the land. . . . Because the grantor of an easement has not transferred his estate or possessory interest, . . . [h]e retains all his ownership interest, subject to an easement.” Marvin M. Brandt Revocable Tr. v. United States, 572 U.S. 93, 105 n.4 (2014) (emphasis added).

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landowner holds subject to the railroad easement – from becoming unencumbered upon abandonment. If, however, the railroad company holds fee simple title 2 to the land over which the railroad operated, no taking can occur because no third party holds underlying fee simple title that would otherwise become unencumbered upon the railroad’s abandonment of operations.

Here, Plaintiffs allege that STB’s issuance of NITUs resulted in unconstitutional takings. In order to prevail on those takings claims, Plaintiffs need to prove that (1) they owned the parcels of land comprising the rail corridors in fee simple; and (2) (a) the railroads’ interests were limited to easements for railroad purposes or (b) if those easements were instead broad enough to encompass trail use, the easements had already terminated prior to the issuance of the NITUs, such that the NITUs encumber Plaintiffs’ fee simple title. See Preseault v. United States, 100 F.3d 1525, 1533 (Fed. Cir. 1996) (en banc). In the Court of Federal Claims, the government disputed Plaintiffs’ showing only with respect to the contention that Plaintiffs hold fee simple title to the contested parcels, subject to the railroads’ property interests, which Plaintiffs insist consisted of easements . On cross-motions for summary judgment, the Court of Federal Claims concluded that the only finding the evidence could reasonably support was that Plaintiffs were correct.

Two sets of land parcels are at issue in this appeal : (i) those whose ownership depends on interpretation of a 1907 Indiana Circuit Court quiet title judgment, which we, like the parties, call the “Manship Decree” (and the

2 “Fee simple,” or “title in fee simple,” “enables the owner to exercise absolute and exclusive control of it as against all others.” Adams v. Henderson, 168 U.S. 573, 580 (1897).

PRESSLY v. US 5

pertinent parcels the “Manship Parcels”); 3 and (ii) those whose ownership relates to a deed, the “Vanlaningham Instrument ” (relating to the “Vanlaningham Parcels”). 4 The only issue we must decide is whether the Court of Federal Claims erred in granting summary judgment that Plaintiffs hold fee simple title in both the Manship and Vanlaningham Parcels.

The Court of Federal Claims had jurisdiction under 28 U.S.C. § 1491(a)(1). We have jurisdiction under 28 U.S.C. § 1295(a)(3). For the reasons we explain below, the trial court correctly granted summary judgment for Plaintiffs.

II

We review a grant of summary judgment by the Court of Federal Claims de novo. See Barlow v. United States, 86 F.4th 1347, 1353 (Fed. Cir. 2023). Summary judgment is appropriate only where, when drawing all reasonable inferences in favor of the non-moving party, there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. See id.

“Whether a taking has occurred is a question of law based on factual underpinnings.” Chi. Coating Co., LLC v. United States, 892 F.3d 1164, 1169 (Fed. Cir. 2018). The acquisition of property rights is governed by the law of the

3 The Manship Parcels have been labeled by the parties and the trial court as 1a-b, 56, 83, 93, 109a-b, 110, 124, 130, 151, 153, 215, 216, 249, 270a-e, 278, and 290. The parties agree that Plaintiffs’ takings claims with respect to all of these parcels can be resolved together.

4 The Vanlaningham Parcels are all part of the rail corridor segment demarcated as valuation parcel V9-2/6. The parties agree that Plaintiffs’ takings claims with respect to all of these parcels can be resolved together.

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