Sears v. United States

124 Fed. Cl. 444, 2015 U.S. Claims LEXIS 1705, 2015 WL 9311530
CourtUnited States Court of Federal Claims
DecidedDecember 22, 2015
Docket12-889L and 13-404L
StatusPublished
Cited by4 cases

This text of 124 Fed. Cl. 444 (Sears 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
Sears v. United States, 124 Fed. Cl. 444, 2015 U.S. Claims LEXIS 1705, 2015 WL 9311530 (uscfc 2015).

Opinion

Rails-to-trails takings case; class action; withdrawal from incomplete settlement agreement; absence of mutual agreement; division of a class into subclasses; RCFC 23(c)(5)

OPINION AND ORDER

Charles F. Lettow, Judge,

Before the court in this rails-to-trails takings case is plaintiffs’ notice of partial withdrawal from a nascent, incomplete settlement and motion to create subclasses. The court certified a class in July 2013 totaling 170 landowners in Marshall and Hardin Counties, Iowa whose land was part of the railroad line formerly operated by Iowa River Railroad, Inc. 1 After discovery and trial preparatory proceedings, the court scheduled a trial to occur at Eldora, Iowa and Washington, D.C. in August 2015. Shortly before trial was to begin, the parties represented to the court *446 that they had resolved nearly all of the relevant issues of disputed fact in this case and were endeavoring to complete a settlement agreement. As, a result, the court cancelled the scheduled trial proceedings. Settlement then reportedly was reached on all issues except an interest component. Class counsel now represents that the owners of 21 parcels of the 269 parcels at issue in this case wish to withdraw from the incomplete settlement and proceed to a trial on the merits. To that end, plaintiffs have moved under Rule 23(c)(5) of the Rules of the United States Court of Federal Claims (“RCFC”) to create two subclasses, a subclass consisting of the owners of the 21 parcels who wish to proceed to trial, which parcels are agricultural lands bisected at an acute angle by the ex-railroad right-of-way (the proposed “angularly-bisect-ed agricultural-property subclass”), and a subclass of the owners of the remaining 248 parcels. Plaintiffs have also asked the court to set a trial date for the angularly-bisected agricultural-property subclass. The government opposes the creation of subclasses on the grounds that the court should not allow the owners of 21 parcels to withdraw from what it characterizes as a “proposed settlement agreement,” and that doing so will create a conflict of interest between the class counsel in representing the two proposed subclasses. The' court has determined that plaintiffs’ motion to create subclasses should be granted, that no conflict of interest arises, and that a trial should be scheduled for the angularly-bisected agricultural-property subclass.

BACKGROUND

The land at issue was previously held as a right-of-way for railroad purposes by Iowa River Railroad, “extending from milepost 243.35 near Marshalltown, Iowa, to milepost 209, outside Steamboat Rock, Iowa, a total distance of 34.35 miles, in Marshall and Hardin Counties, Iowa.” Second Am. Compl. ¶ 4, EOF No. 33. The Iowa National Heritage Foundation filed a Trail Use Request with the federal government’s Surface Transportation Board (“Board”) on May 17, 2012. Second Am, Compl. ¶ 177. The Board issued a Notice of Interim Trail Use or Abandonment (“NITU”) on August 2, 2012, allowing the general public to use the right-of-way as a trail. Second Am. Compl. ¶ 176; see also National Trails System Act Amendments of 1983, Pub.L. No. 98-11, § 208, 97 Stat. 42, 28 (codified at 16 U.S.G § 1247(d)); 49 C.F.R. § 1152.29. As of October 2014, when plaintiffs’ filed their second amended complaint, the Iowa River Railroad was negotiating a Trail Use Agreement to transfer the right-of-way to the Iowa Natural Heritage Foundation as the trail operator. ’ Second Am. Compl. ¶ 177.

Plaintiffs contend that under Iowa law, the right-of-way was abandoned when the Iowa River Railroad “ceased operation of a railroad ... and took steps demonstrating abandonment.” Second Am. Compl. ¶ 180. At that point, in plaintiffs’ view, they “regained the right to use and possess their property free of any easement.” Second Am. Compl. ¶ 180. Therefore, plaintiffs claim that by issuing the NITU to convert the right-of-way to a public trail, the government has taken their property interests without compensation in contravention of the Fifth Amendment. Compl. ¶¶ 178-79.

The court certified a-class in this case on July 10,2013, consisting of “[a]ll persons who ... own an interest in lands constituting part of the railroad line that was formerly operated by the [Iowa River Railroad] in Marshall and Hardin Counties, Iowa.” Class Certification Order at 1, EOF No. 14. In June 2014, after the plaintiffs developed their Claims Book and the government responded, the court adopted a schedule for pre-trial proceedings and trial. Scheduling Order (June 20, 2014), EOF No. 32; see also Pis.’ Request for a Status Conference and Mot. for a Trial Setting Pursuant to Rule 40, at 1, ECF No. 22. The case proceeded through fact discovery, and at a status conference in January 2015, the parties represented to the court that they had resolved all liability issues such that the trial scheduled for August 2015 would, at most, be a valuation trial. Hr’g Tr. 3:21-4:12, 4:15-19 (Jan. 28, 2015). At a subsequent status conference in June 2015, the parties informed the court that they had virtually resolved all remaining issues of disputed fact and were negotiating a settlement agreement. Hr’g Tr. 4:1-6 (June 30, 2015) *447 (noting that the parties initially had some difficulty resolving claims related to “severed agricultural properties,” but that the owners of such parcels were now willing to settle). Consequently, the court rescinded the pretrial and trial schedule in this case. Order of June 30, 2015, ECF No. 42.

On August 31, 2015, the parties filed a joint status report indicating they had “confirmed the ... settlement values for the 269 parcels for which plaintiffs would receive compensation,” and “agreed to a proposed settlement of ... accrued prejudgment interest ... for a projected prejudgment interest period between August 3, 2012 and February 3, 2016,” leaving open interest after February 3, 2016, and that they were working to resolve “the issue of attorneys’ fees and costs.” Joint Status Report at 1-2, ECF No. 43. 2 At a status conference on October 21, 2015, the parties informed the court that they were unable to reach agreement on the “only remaining issue” in the case: the rate of interest to which plaintiffs might be entitled beyond February 3, 2016. Hr’g Tr. 4:7-12 (Oct. 21, 2015). After considering three alternatives presented by the parties to address the last issue, the court agreed to resolve that matter consequent to briefing lay the parties regarding the continued interest rate. Scheduling Order (Oct. 21, 2015), ECF No. 47.

Approximately three weeks later, class counsel notified the court that landowners who collectively own 21 of the 269 parcels at issue in this case were withdrawing from the settlement negotiations. Pis.’ Notice of Partial Withdrawal from Settlement, Mot. to Create Subclasses, Mot. to Vacate Current Briefing Schedule, and Mot. for Trial Setting (“Pis.’ Mot.”) at 2, ECF No. 50. The 21 parcels are agricultural properties that are angularly bifurcated by the former rail line. Pis.’ Mot. at 3; see also Hr’g Tr. 4: 8-11, 6:4-13 (Dec.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

BAUER v. United States
Federal Claims, 2025
Sears v. United States
124 Fed. Cl. 730 (Federal Claims, 2016)

Cite This Page — Counsel Stack

Bluebook (online)
124 Fed. Cl. 444, 2015 U.S. Claims LEXIS 1705, 2015 WL 9311530, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sears-v-united-states-uscfc-2015.