Albano v. United States ( 2021 )

In the United States Court of Federal Claims
No. 19-558 L
(Filed: February 1, 2021)
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NICHOLAS ALBANO, II, et al., *
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Plaintiffs, *
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v. *
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THE UNITED STATES, *
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Defendant. *
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Meghan Sue Largent, Lewis Rice, LLC, of St. Louis, Missouri, for plaintiff.
Elizabeth Rose McGurk, Trial Attorney, Environmental and Natural Resources
Division, Department of Justice, with whom were, Lawrence VanDyke, Deputy
Assistant Attorney General, and Jean E. Williams, Deputy Assistant Attorney
General, all of Washington, D.C., for defendant.
MEMORANDUM OPINION AND ORDER
SOMERS, Judge.
This case is brought by a group of plaintiffs who own property along a railroad corridor
near Atlanta, Georgia. Amended Complaint, ECF No. 5 ¶¶ 21–38 (“Amended Compl.”).
Plaintiffs allege that “compensation is due from the federal government” under the Just
Compensation Clause of the United States Constitution. Id. ¶¶ 2, 19–20. Specifically, plaintiffs
contend that the United States Surface Transportation Board’s (“STB”) conversion of parts of the
corridor into a recreational trail and preservation of the railroad’s easement, pursuant to the
National Trails System Act (“Trails Act”), constitutes a Fifth Amendment taking. Id. ¶¶ 63–75.
Before the Court is the government’s motion to dismiss under Rules 12(b)(1) and
12(b)(6) of the Rules of the United States Court of Federal Claims (“RCFC”). As explained
below, the Court holds that the decision of the Superior Court of Fulton County, Georgia, in
Atlanta Dev. Auth. v. Ragan, et al., Civil Action File No. 2016-CV-273389 (Super. Ct. Fulton
Cty., Ga., Sept. 12, 2016), does not preclude plaintiffs from pursuing their claims in this Court,
because under Georgia law, which this Court is required to apply under 28 U.S.C. § 1738, the
decision in Ragan has no preclusive effect on the instant litigation. Accordingly, the
government’s motion to dismiss is DENIED.
I. BACKGROUND
The land in dispute in this Trails Act takings case is part of a former railroad corridor in
Atlanta, Georgia, better known as the “Decatur Street Belt” or “Line” (“Line”). Amended
Compl. Ex. 1 at 28. The Georgia Air Line Railway Company acquired its interest in the property
that established the Line by way of a “right of way” deed from Jerome Bearse in 1869.
Amended Compl. ¶3. Since then, several railroad companies have used the Line, most recently
Norfolk Southern Railway. Id. at ¶6; Amended Compl. Ex. 1 at 28-29. On March 27, 2017,
Norfolk Southern filed a request to abandon a portion of the Line that abuts and allegedly
underlies plaintiffs’ property. Amended Compl. ¶7; Amended Compl. Ex. 1. Several months
later, Atlanta BeltLine, a Georgia non-profit and instrumentality of the City of Atlanta, requested
the issuance of a Notice of Interim Trail Use or Abandonment (“NITU”) pursuant to the Trails
Act. Amended Compl. ¶8; Amended Compl. Ex. 2. On September 28, 2017, the STB issued a
NITU. Amended Compl. ¶9; Amended Compl. Ex. 3.
Approximately a year before the NITU was issued, the Atlanta Development Authority
and Atlanta BeltLine brought an action in state court against numerous landowners along the
Line (several of whom are also plaintiffs in the instant case) seeking a declaratory judgment as to
ownership of the disputed property, quiet title, ejectment of encroachments, an injunction to
permanently stop encroachments, and liability for trespass. See Atlanta Dev. Auth. v. Ragan, et
al., Civil Action File No. 2016-CV-273389 (Super. Ct. Fulton Cty., Ga., Sept. 12, 2016). In that
litigation, the defendant property owners argued, among other things, that the Bearse deed
transferred only an easement to the disputed property to the state court plaintiffs’ predecessors-
in-interest, thereby depriving those plaintiffs of any claim to title because Norfolk Southern’s
purported abandonment of the alleged easement reverted any property interest back to the
adjacent landowners along the Line. Order Granting Mot. for Summary Judgment at 3, Atlanta
Dev. Auth. v. Ragan, et al., Civil Action File No. 2016-CV-273389 (Super. Ct. Fulton Cty., Ga.,
Sept. 19, 2017). Without accompanying analysis, the state trial court rejected this argument
finding that “the 1869 Deed conveyed fee simple title” to the original railway and, consequently,
to any successors in interest. 1 Id. In the alternative, the court also held that even if “the 1869
Deed only conveyed an easement . . . there is no evidence that Norfolk Southern Railway
Company has filed a notice of consummation of abandonment with the STB,” apparently making
defendants’ arguments irrelevant according to the court’s understanding of the issue. 2 Id.In its motion to dismiss, the government argues that this Court “should accept the
preclusive effect of the determination of the [Fulton County Superior Court] and dismiss
Plaintiffs’ complaint,” because the state court “held that these Plaintiffs have no valid claim to
the land in question because it was conveyed to the railroad in fee,” thereby depriving plaintiffs
1
Soon after the Fulton County Superior Court’s decision, in October 2017, a different group of property
owners along the Line brought a Trails Act takings claim before this Court. See Ansley Walk Condo. Ass’n, Inc. v.
United States, No. 17-1600 (Fed. Cl. Oct. 10, 2017). Unlike the Fulton County Superior Court, the Federal Claims
judge in that case has determined that the Bearse deed conveyed an easement to the original railroad, not a fee
simple interest. Ansley Walk Condo. Ass’n, Inc. v. United States, 142 Fed. Cl. 491, 499-502 (2019).
2
Consummation of the abandonment occurred on October 17, 2017. Amended Compl. Ex. 4 (Norfolk
Southern Railway Company—Abandonment Exemption—In Atlanta Georgia, STB Docket No. AB-290 (Sub-No.
388X) (filed Oct. 17, 2017)).
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of both standing and the ability to state a legal claim. Def. ’s Mot. to Dismiss, ECF No. 7, at 6.
Although the government acknowledges that “preclusion in Georgia requires mutual identity of
parties, and the United States was not a party to the Ragan case . . . and is not in privity with
Atlanta BeltLine,” the government nonetheless contends that “applying the Georgia court’s
ruling in this instance will promote judicial economy and avoid the absurd result of two different
courts interpreting these same Plaintiffs’ property interests in conflicting ways.” Id. In support,
the government cites the Supreme Court, the Federal Circuit, and an opinion of an intermediate
Georgia state appeals court that is critical of strict estoppel principles. Id. at 7-9. For prudential
reasons, the government urges this Court to follow these cases, which support the modern trend
of nonmutual collateral estoppel, and ignore the non-preclusive effect the Ragan judgment would
receive in a Georgia court.
In opposition, plaintiffs argue that this Court has no discretion in the matter. Instead,
plaintiffs contend that every federal court is “commanded ‘to accept the rules chosen by the State
from which the judgment is taken.’” Pls.’ Opp. to Mot. to Dismiss, ECF No. 8, at 8 (citing
Marrese v. Am. Acad. of Orthopaedic Surgeons, 470 U.S. 373, 380 (1985)). Because Georgia
state law requires strict mutuality of parties to apply collateral estoppel—and the United States
was neither a party in Ragan, nor in privity with any of the parties—plaintiffs argue that this
Court is not bound by Ragan’s interpretation of the Bearse deed. Id. (citing GA CODE. ANN. § 9-
12-40). Additionally, plaintiffs suggest that Ragan’s treatment of the property interest conveyed
by the Bearse deed indicates that the issue was not “fully addressed and adjudicated in a manner
such that a proceeding here ‘would be a waste of judicial resources,’” id. at 4 (quoting Def.’s
Mot. to Dismiss at 1), and that even if this Court were permitted to apply collateral estoppel, it
should not do so because the title issue was not adequately decided in the state court litigation to
lend a preclusive effect to the holding. Id. at 4.
In reply, the government maintains that the caselaw it cites empowers federal courts to
“disfavor mutual identity of parties” in cases in which state estoppel rules so demand, because
“judicial resources will be misallocated and judicial economy will be thwarted if Plaintiffs are
allowed to relitigate the question of whether they have a cognizable property interest in the rail
corridor.” Def.’s Reply, ECF No. 9, at 2. Ultimately, the government stakes its motion on the
view that this Court is not bound to apply Georgia’s preclusion rules and thus should not apply
the Georgia rule as doing so will lead to “a perverse effect of granting these Plaintiffs a property
interest that a Georgia court has specifically held that they do not have.” Id.
II. DISCUSSION
A. Legal Standard
Under RCFC 12(b)(1), this Court must dismiss any claim that does not fall within its
subject-matter jurisdiction. When considering a motion to dismiss for lack of subject-matter
jurisdiction, the Court must accept as true all factual allegations made by the non-moving party
and draw all reasonable inferences in the light most favorable to that party. See Scheuer v.
Rhodes, 416 U.S. 232, 236 (1974); Pixton v. B & B Plastics, Inc., 291 F.3d 1324, 1326 (Fed. Cir.
2002) (stating that on a motion to dismiss for lack of subject-matter jurisdiction the court is to
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view “the alleged facts in the complaint as true, and if the facts reveal any reasonable basis upon
which the non-movant may prevail, dismissal is inappropriate”).
Even if the plaintiff asserts a claim that falls within the Court’s jurisdiction, the plaintiff
must still present a valid claim on which the Court can grant relief. RCFC 12(b)(6). “When
considering a motion to dismiss for failure to state a claim upon which relief can be granted
pursuant to Rule 12(b)(6), a court accepts all well-pled facts as true and draws all reasonable
inferences in plaintiff’s favor.” Silver Buckle Mines, Inc. v. United States, 117 Fed. Cl. 786, 791
(2014) (citing Scheuer, 416 U.S. at 236; Pixton, 291 F.3d at 1326). Granting a motion to dismiss
for failure to state a claim “is appropriate when the facts asserted by the claimant do not entitle
him to a legal remedy.” Lindsay v. United States, 295 F.3d 1252, 1257 (Fed. Cir. 2002). Denial
of the motion is warranted when the complaint presents “sufficient factual matter, accepted as
true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
B. Analysis
The crux of the government’s argument in support of its motion to dismiss is its
contention that this Court has the discretion to ignore Georgia state preclusion law in this
instance because applying it would mean that the Court will have to re-litigate an issue that has
already been adjudicated in state court. The government’s argument, however, is foreclosed by
the full faith and credit statute and precedent from both the Supreme Court and the Federal
Circuit applying that statute.
The full faith and credit statute requires that state judicial proceedings be given “the same
full faith and credit in every court within the United States . . . as they have by law or usage in
the courts of such State . . . from which they are taken.” 28 U.S.C. § 1738. The Supreme Court
has made clear that “this statute directs a federal court to refer to the preclusion law of the State
in which judgment was rendered.” Marrese, 470 U.S. at 380 (emphasis added). Indeed,
according to the Supreme Court, “[i]t has long been established that § 1738 does not allow
federal courts to employ their own rules of res judicata in determining the effect of state
judgments. Rather, it goes beyond the common law and commands a federal court to accept the
rules chosen by the State from which the judgment is taken.” Kremer v. Chemical Construction
Corp., 456 U.S. 461, 481-482, (1982); see also Allen v. McCurry, 449 U.S. 90, 96 (1980)
(“[T]hough the federal courts may look to the common law or to the policies supporting res
judicata and collateral estoppel in assessing the preclusive effect of decisions of other federal
courts, Congress has specifically required all federal courts to give preclusive effect to state-
court judgments whenever the courts of the State from which the judgments emerged would do
so.”). Federal Circuit precedent is also clear on this point: “28 U.S.C. § 1738 . . . requires that
state court judgments be given the same preclusive effect in later federal actions as they would
be given under the laws of the state in which the judgments were rendered.” Graybill v. United
States Postal Service, 782 F.2d 1567, 1571 (Fed. Cir. 1986).
The government cites no relevant precedent to convince the Court otherwise. While the
government cites precedent for the proposition that “[i]n any lawsuit where a defendant, because
of the mutuality principle, is forced to present a complete defense on the merits to a claim which
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the plaintiff has fully litigated and lost in a prior action, there is an arguable misallocation of
resources,” Def.’s Mot. to Dismiss at 6 (citing Blonder-Tongue Labs., Inc. v. Univ. of Ill Found.,
402 U.S. 313, 329 (1971)), the cases cited by the government involve the Supreme Court
critiquing the mutuality principle in the context of a federal court addressing the preclusive effect
of an earlier federal judgment. In Blonder-Tongue, the Supreme Court was faced with the
question of the preclusive effect of an earlier decided patent case. 402 U.S. at 315. Although the
Supreme Court reexamined the efficacy of strict mutuality, it did so only in the context of federal
patent cases. Id. at 334. The government also cites Parklane Hosiery v. Shore for the same
proposition, but once again the Supreme Court only addressed the mutuality principle in the
context of a previous federal judgment. 439 U.S. 322, 324 (1979). Moreover, the lone Federal
Circuit case cited by the government, In re Freeman, does not address the effect of a state court
judgment. 30 F.3d 1459 (1994).
Although the government is slightly more on-point in citing Montana v. United States,
because it involved the preclusive effect of two earlier state court judgments, that case did not
present a question of whether to apply state or federal preclusion rules. 440 U.S. 147 (1979).
The case would have been barred regardless of whether mutual or nonmutual estoppel rules were
applied. See id. at 155 (“Thus, although not a party, the United States plainly had a sufficient
‘laboring oar’ in the conduct of the state-court litigation to actuate principles of estoppel.”); see
also United States v. Montana, 437 F.Supp. 354, 361 (D. Mont. 1977) (Kilkenny, J., dissenting)
(noting that the federal government conceded it was the real party in interest in Peter Kiewit
Sons’ Co. v. State Board of Equalization, 505 P.2d 102 (Mont. 1973)). In fact, the Montana
Supreme Court had already applied collateral estoppel to preclude the issue in Montana from
being relitigated in a state court case brought by a party that was indisputably in privity with the
United States. See Peter Kiewit Sons’ Co. v. Department of Revenue, 531 P.2d 1327 (Mont.
1975).
In short, although the federal courts may have abandoned the mutuality principle for
cases involving earlier federal judgments for the reasons cited by the government, the
government has not cited, and the Court is not aware of, any precedent establishing an exception
to 28 U.S.C. § 1738 for earlier state court judgments. Consequently, this Court must apply
Georgia preclusion law to the Ragan judgment such that it would have the same preclusive effect
as if the instant case were being heard by another Georgia state court.
To that end, Georgia law is clear: “In Georgia, mutual identity of parties is required for
collateral estoppel, which means that there must be an identity of parties or their privies in both
actions.” Minnifield v. Wells Fargo Bank, N.A., 771 S.E.2d 188, 192 (Ga. Ct. App. 2015) (citing
Body of Christ Overcoming Church of God v. Brinson, 696 S.E.2d 667, 668-69 (Ga. 2010)); see
also Waldroup v. Greene Cty. Hosp. Auth., 265 Ga. 864, 867 (Ga. 1995) (“[C]ollateral estoppel
requires the identity of parties or their privities in both actions.”). Notwithstanding the fact that
some Georgia courts have criticized this strict mutuality requirement, it remains the controlling
rule. See, e.g., Wickliffe v. Wickliffe, 227 Ga. App. 432, 434-35 (Ga. Ct. App. 1997) (“While the
modern trend regarding mutuality is perhaps the better position, only our Supreme Court has the
authority to overrule its earlier holdings and to adopt the modern trend in Georgia.”). Indeed, the
Georgia state legislature has even codified this strict mutuality requirement. GA CODE ANN. § 9-
12-40 (“A judgment of a court of competent jurisdiction shall be conclusive between the same
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parties and their privies as to all matters put in issue or which under the rules of law might have
been put in issue in the cause wherein the judgment was rendered until the judgment is reversed
or set aside.”).
As a result, because the United States was neither a party to Ragan, nor in privity with a
party to that litigation (in fact, the government does not even argue that it was a party or in
privity with a party to Ragan), under Georgia law, which, as discussed above, this Court is bound
to apply in this case, the Ragan judgment has no preclusive effect on this Court. 3 Although the
government may find it “absurd” that this result means plaintiffs could have a property interest in
the Line that a Georgia state court has held that they do not have, a “perverse effect” will arise
either way. 4 If the Ragan judgment carried a preclusive effect in this case, the Georgia state-
court interpretation of the Bearse deed would still be at odds with the Ansley Walk interpretation,
ostensibly giving different landowners conflicting property interests derived from the same
underlying deed. In short, the result the government finds “absurd” must be tolerated because
“Congress has specifically required all federal courts to give preclusive effect to state-court
judgments whenever the courts of the State from which the judgments emerged would do
so . . . .” Allen, 449 U.S. at 96 (citing 28 U.S.C. § 1738).
3
It is clear that privity does not exist between the United States and any of the parties to Ragan under
Georgia law. Ragan was an action seeking a declaration as to ownership, quiet title, ejectment of the private
landowners from the property, an injunction to permanently bar encroachments on the property, and liability for
trespass. In addition, at the time Ragan was filed and when summary judgment was issued, as the Fulton County
Superior Court noted, the abandonment of the line had only been initiated. It is hardly the case that the plaintiffs in
Ragan can be said to have “represented the same legal right” in the state court action to create a privity of interests
with the United States in this case. See Minnifield, 331 Ga. App at 516; Pinkard v. Morris, 215 Ga. App. 297 (Ga.
Ct. App. 1994) (Privity occurs when a party’s interests are “fully congruent” with “a party to the judgment as to
have such an identity of interest that the party to the judgment represented the same legal right.”).
Moreover, even if the Ragan judgment could carry a preclusive effect in this case because mutuality or
privity was present, it is not clear estoppel would be appropriate. Under Georgia law, “the issue sought to be
precluded must actually have been litigated and decided in the first action before collateral estoppel would bar it
from being considered in the second action, or the issue necessarily had to be decided in order for the previous
judgment to have been rendered.” Karan, Inc. v. Auto-Owners Ins. Co., 629 S.E.2d 260, 263 (Ga. 2006). In Ragan,
for most of the course of litigation, the defendant landowners “asserted title claims based on adverse possession and
STB’s failure to approve a prior conveyance of the Property.” Order Granting Mot. for Summary Judgment at 2,
Atlanta Dev. Auth. v. Ragan, et al., Civil Action File No. 2016-CV-273389 (Super. Ct. Fulton Cty., Ga., Sept. 19,
2017). Only at the eleventh hour did the defendant landowners change their argument to assert that the Bearse deed
transferred an easement. Id. It is possible that a Georgia court would find that the interest conveyed by the Bearse
deed was not adequately litigated to lend a preclusive effect if a related case was brought in state court. Even if it
was adequately litigated, it is also possible that Ragan’s lack of analysis for its finding that the Bearse deed
conveyed an interest in fee indicates that the issue was not necessarily decided, especially given the presence of an
alternative holding. See id. at 4; Cmty. State Bank v. Strong, 651 F.3d 1241, 1268 (11th Cir. 2011) (Commenting
that with regard to Georgia preclusion law: “[t]he essential role of this ‘necessarily decided’ requirement is that it
prevents judgments that rest on ambiguous grounds from having issue preclusive effect.”). In short, even if the
United States were in privity with the plaintiffs in Ragan, it is not clear that the Ragan judgment would carry any
preclusive effect on the instant case.
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The proper course, if the government finds this result “absurd” or to have a “perverse effect,” is to work
with Congress to change the full faith and credit statute, not to file a motion urging this Court to ignore federal law
and binding precedent interpreting that law.
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III. CONCLUSION
For the forgoing reasons, the Court concludes that plaintiffs are not precluded from
bringing the current action by an earlier state court judgment construing the relevant property
interest, because 28 U.S.C. § 1738 requires this Court to accept, in this case, the preclusion rules
chosen by Georgia and, under those rules, collateral estoppel does not apply. Accordingly, the
government’s motion to dismiss is DENIED. The government shall FILE an answer to the
plaintiffs’ complaint on or before February 16, 2021.
IT IS SO ORDERED.
s/ Zachary N. Somers
ZACHARY N. SOMERS
Judge
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