Mills v. United States ( 2020 )

In the United States Court of Federal Claims
No. 15-1233L
(Filed: February 28, 2020)
*********************
Fifth Amendment Taking; Rails-
PAULINE MILLS, et al.,
to-Trails; Motion for Partial
Summary Judgment; RCFC 56;
Plaintiffs,
Trails Act; Florida Law; Right-
of-Way
v.
THE UNITED STATES,
Defendant.
*********************
John R. Sears, St. Louis, MO, for plaintiffs.
Barbara M.R. Marvin, who was at the time with the United States
Department of Justice, Environment & Natural Resources Division,
Washington, DC, with whom was Jean E. Williams, Deputy Assistant
Attorney General.
OPINION
BRUGGINK, Judge.
This is an action brought under the Tucker Act1 for an alleged failure
to pay just compensation owed under the Fifth Amendment. Plaintiffs are
Florida landowners whose properties adjoin a railroad which has ended its
operations. Plaintiffs allege that, but for the operation of the Trails Act,2 the
1
The Tucker Act provides that the United States Court of Federal Claims has
jurisdiction “to render judgment upon any claim against the United States
founded either upon the Constitution, or any Act of Congress or any
regulation of an executive department, or upon any express or implied
contract with the United States.” 28 U.S.C. § 1491(a)(1) (2012).
2
The Trails Act “preserve[s] shrinking rail trackage by converting unused
rights-of-way to recreational trails.” Preseault v. I.C.C., 494 U.S. 1, 4 (1990)
(“Preseault I”).
railroad would be deemed to have abandoned the track and their underlying
fee interests would no longer be burdened by an easement. Pending before
the court is plaintiffs’ August 26, 2019 motion for partial summary judgment
on liability under Rule 56 of the Rules of the United States Court of Federal
Claims. Defendant has cross-moved but limited its motion to partial
summary judgment on threshold title issues.
The matter is fully briefed, and oral argument was held on January 15,
2020. The motions raise difficult questions of Florida real estate law,
complicated by the virtually complete lack of original documents. For the
reasons explained below, we grant plaintiffs’ motion for partial summary
judgment on liability.
BACKGROUND3
This rails-to-trails case arises out of actions taken by the Surface
Transportation Board (“STB”), an agency of the United States, that issued a
Notice of Interim Trail Use (“NITU”) on July 14, 2014, to CSX
Transportation, Inc. (“CSXT”). Prior to issuing the NITU, CSXT filed a
Verified Notice of Exemption for the purposes of abandoning approximately
11.62 miles of rail line on CSXT’s Southern Region, in Alachua County,
Florida. CSXT is the successor in interest to the Live Oak, Tampa and
Charlotte Railway (“LOTCHR”), which received transfers of interests in
land from plaintiffs’ predecessors in interest in the 1880’s. The nature of
those interests is at issue in the pending motions.
Plaintiffs are the Estate of Pauline Mills (Claim 1), Southeast
Investment Management, Inc. (“SIM”) (Claims 2 and 3), Mary Forrester
(Claim 4), Bowtie Properties, Inc. (Claim 5), Florida Timber Co. (Claim 6),
the Eric J. Parker Living Trust (Claim 7), and the Estate of Bettye R. Freeney
(Claim 8). Each plaintiff claims to have owned fee simple title to the land
adjacent to and underneath the railroad line on the date of the taking.
Plaintiffs argue that, “[b]ut for the operation of the Trails Act, [they] would
have the exclusive right to physical ownership, possession, and use of their
property free of any easement for recreational trail use or future railroad use.”
Am. Compl. ¶ 13.
3
The facts are not materially disputed and derive from the Plaintiffs’
Amended Complaint (“Am. Compl.”) (ECF No. 15), Pls.’ Findings of Fact
(“Pls.’ Facts”) (ECF No. 70) and accompanying exhibits, as well as the
parties Joint Stipulations Regarding Title Matters (“Joint Stipulations”) (ECF
No. 37).
2
Defendant’s response relies on the interests of railroads which have
operated in this location for over one hundred years. The railroad interests
trace back to July 23, 1881, when LOTCHR was incorporated under the
general laws of Florida. As early as 1883, LOTCHR began to acquire land
and obtain deeds for construction of a railroad corridor, although none of the
deeds that LOTCHR obtained at that time are in the chain of title relevant in
this case. In 1884, however, LOTCHR merged with the Savannah, Florida,
and Western Railway Company, and, in 1893, LOTCHR connected with the
South Florida Railroad Company (“SFR”), which had already begun
constructing a railroad corridor in the area. Relying on the railroad charter
that SFR had obtained from the state of Florida, LOTCHR obtained interests
in land that are at issue in this case.
The sources of the railroad interests at issue here can be classified into
three groups. The easiest to dispose of relates to Claims 2 and 3. The parties
agree that, on May 5, 1893, a deed from J. Cummer & Son Lumber Co.
conveyed an easement limited to railroad purposes to LOTCHR and that
plaintiff SIM is thus entitled to a finding of summary judgment on the
threshold title issue in its favor. See Joint Stipulations ¶ 2.
The second type of conveyance implicates the claims of the Florida
Timber Co. (Claim 6) and the Eric J. Parker Living Trust (Claim 7). This
conveyance was a “bond for deed” executed on January 17, 1893, by the
Anglo Florida Phosphate Company. The “bond for deed” provides that:
[the Anglo Florida Phosphate Company] of the county of
[Alachua] and State of [Florida] for and in consideration of the
sum of [One] Dollar[], do hereby bind myself, my heirs,
executors, administrators and assigns, firmly by these presents,
to make good and sufficient deeds of warrantee to [SFR] of the
State of Florida, to a right of way [100] feet wide through the
following lands . . .
Reserving to myself and assigns the right to mine and remove
all phosphate and mineral deposits in such manner as not to
interfere with or endanger the track or road-bed of said railroad
company when constructed. The conditions of the above bond
being that said [SFR] shall within [six] months build a railroad
through said property; otherwise of no force and effect . . .
On this day personally appeared before me . . . to me well
known, and acknowledged that [they] executed the foregoing
bond for deed, for the purpose therein expressed.
3
Pls.’ Facts, Ex. H.
The parties disagree as to whether the instrument from the Anglo
Florida Phosphate Company was a present conveyance of any interest in
land, and, if it was, whether it was a fee or only an easement for a right-of-
way for railroad purposes. Plaintiffs argue that the “bond for deed” operated
as a present conveyance, but only of an easement. Defendant argues that the
instrument was not a present conveyance of any kind and ineffective to
transfer any interest in land.
The third category of claims relates to the four properties represented
in Claims 1, 4, 5, and 8. As to these parcels, the parties have not been able to
locate any instrument of transfer. Instead, plaintiffs offer secondary
evidence: a valuation map prepared by the Interstate Commerce Commission
(“ICC”), STB’s predecessor agency, which indicates that the railroad
interests in these properties were obtained under authority of state charter
granted to the railroad. The ICC valuation map was prepared in 1917 based
on information furnished to the ICC by railroad companies in order to
inventory their property. The then-functioning railroad, the Atlantic Coast
Line Railroad Company (“ACL”), represented that there was “No Record of
Conveyance” with respect to these four properties and that the railroad had
obtained its “[p]ossession under Charter.” Pls.’ Facts, Ex. F at PLF000027.4
The parties have been unable to locate the relevant charter. They disagree
about the legal effects of this state of the record. Defendant urges that, in the
absence of direct proof by plaintiffs that only an easement was obtained, the
court should assume that the railroad obtained a fee. Plaintiffs, of course,
urge the contrary.
Plaintiffs also argue, in the alternative, that even if this court finds that
the railroad did not acquire the lands related to this third category of claims
by Charter, it should consider whether the railroad obtained the land by
prescriptive use. Defendant, also in the alternative, responds that, if the
railroad did not obtain the land pursuant to its charter or a conveyance, it
could only have an interest by adverse possession, but that it is plaintiffs’
4
The ICC valuation also provides a column labeled “Kind of Instrument”
which shows that the J. Cummer & Son Lumber Co. obtained its interest in
property relating to Claims 2 and 3 by deed. Id. With respect to the interest
in property relating to Claims 6 and 7, the ICC valuation map uses the terms
“bond” and “deed” interchangeably for the “Kind of Instrument” granted by
the Anglo Florida Phosphate Company. Id.
4
duty to prove the elements and that what was acquired was only an easement,
two things defendant asserts they have failed to do.
Even assuming that the railroads only operated under easements with
respect to these four parcels, defendant also argues that “the uses authorized
by the Trails Act are not inconsistent with the scope of any such easements.”
Def.’s Cross-Motion for Partial Summ. J. (“Def.’s Cross-Motion”) 6.
Defendant further requests that this court withhold any ruling on the United
States’ liability until the Federal Circuit issues a ruling in the pending appeal
in Caquelin vs. United States, 140 Fed. Cl. 564 (2018), appeal docketed, No.
19-1385 (Fed. Cir. Jan. 9, 2019).
It is undisputed that CSXT quit operating on the trail in question in
July of 2014, and that the parcels owned by plaintiffs adjoin the railroad
corridor. See Joint Stipulations ¶ 3. The NITU was issued on July 14, 2014,
and published in the Federal Register on July 15, 2014. Since that time, no
trail use agreement has been reached between the STB and CSXT, and the
current negotiation deadline for expiration of the NITU has been extended
until February 16, 2020.5
DISCUSSION
The Trails Act “preserve[s] shrinking rail trackage by converting
unused rights-of-way to recreational trails,” known as “railbanking[.]”
Preseault I, 494 U.S. at 5. In order for a railroad right-of-way to be converted
into a recreational trail, the railroad must either (1) file a standard
abandonment application with the STB or (2) seek an exemption from filing
the application. Caldwell v. United States, 391 F.3d 1226, 1228 (Fed. Cir.
2004). “If the STB approves a standard abandonment application or grants
an exemption and the railroad ceases operation, the STB relinquishes
jurisdiction over the abandoned railroad right-of-way and state law
reversionary property interests, if any, take effect.” Id. at 1228-29 (citations
omitted).
If the railroad and trail operator are willing to negotiate a trail use
agreement, the STB stays the abandonment and issues a NITU, allowing the
railroad right-of-way to be “railbanked[.]” Id. at 1229. The government’s
action to issue a NITU “operates to prevent abandonment of the corridor and
to preclude the vesting of state law reversionary interests in the right-of-
way.” Id. at 1233-34. Thus, “the appropriate triggering event for any takings
5
Counsel has notified the court that a trail use agreement still has not been
entered, nor has the deadline been extended.
5
claim under the Trails Act occurs when the NITU is issued.” Id. at 1235.
The operation of the Trails Act, like any government action, is subject
to the Fifth Amendment Takings Clause. Preseault I, 494 U.S. at 12-16. If
the government takes private property pursuant to the Trails Act, it must
provide just compensation. See id. If the railroad owns the underlying right-
of-way in fee simple at the time of the alleged taking, however, “another
party cannot be owed just compensation for the taking of that land.” Whispell
Foreign Cars, Inc. v. U.S., 97 Fed. Cl. 324 (2011). In a takings case, “only
persons with a valid property interest at the time of the taking are entitled to
compensation.” Wyatt v. U.S. 271 F.3d 1090, 1096 (Fed. Cir. 2001). “A Fifth
Amendment taking occurs if the original easement granted to the railroad
under state property law is not broad enough to encompass a recreational
trail.” Caldwell, 391 F.3d at 1229 (citations omitted).
Thus, as the Federal Circuit explained, a rails-to-trails takings claim
presents three questions for determination:
(1) who owned the strips of land involved, specifically did the
[r]ailroad . . . acquire only easements, or did it obtain fee simple
estates; (2) if the [r]ailroad acquired only easements, were the
terms of the easements limited to use for railroad purposes, or
did they include future use as public recreational trails; and (3)
even if the grants of the [r]ailroad’s easements were broad
enough to encompass recreational trails, had these easements
terminated prior to the alleged taking so that the property
owners at that time held fee simples unencumbered by the
easements.
Preseault v. United States, 100 F.3d 1525, 1533 (Fed. Cir. 1996) (“Preseault
II”). The parties have stipulated that the plaintiffs owned the adjacent parcels
of land to the railroad corridor on July 14, 2014. The issue raised by both
parties’ motions is whether the railroad owned the land underlying the right-
of-way in fee simple or whether it only had an easement.
We analyze the property rights of the parties under the applicable state
law, in this case, that of Florida. Rogers v. United States, 814 F.3d 1299,
1305 (Fed. Cir. 2015) (“Rogers I”) (citing Preseault II, 100 F.3d at 1543).
Florida, like many other states, follows the well-established rule:
[w]hen the language of a deed is clear and certain in meaning
and the grantor’s intention is reflected by the language
employed, there is no room for judicial construction of the
6
language nor interpretation of the words used . . . If there is no
ambiguity in the language employed then the intention of the
grantor must be ascertained from that language.
Rogers v. United States, 184 So. 3d 1087, 1095 (Fla. 2015) (“Rogers II”). A
court should “consider the language of the entire instrument in order to
discover the intent of the grantor, both as to the character of the estate and
the property attempted to be conveyed, and to so construe the instrument as,
if possible, to effectuate such intent.” Reid v. Barry, 93 Fla. 849, 852 (1927).
Here, of course, the typical admonition is of little use, given the paucity of
transfer instruments. We turn now to the estates at issue.
A. The Anglo Florida Phosphate Co. Instrument
The Anglo Florida Phosphate Co. instrument purports to be a “bond
for deed,” which we quote above. It is the only instrument that the parties
were able to locate with respect to the claims of the Florida Timber Co.
(Claim 6) and the Eric J. Parker Living Trust (Claim 7).
The parties have different views of the effect of the “bond for deed.”
Plaintiffs contend that the words of the instrument constitute an immediate
transfer of an easement: “the bond serves as a deed, the purpose of the bond
was a conveyance, and the conveyance was a right in land and not of land
itself.” Pls.’ Resp. to Def.’s Cross-Mot. For Partial Summ. J. (“Pls.’ Resp.”)
3. Plaintiffs argue that, because the instrument granted only a right-of-way,
expressly retained mineral rights, and contained a clause requiring the
railroad to be built within six months, that it conveyed an easement at most.
Defendant, on the other hand, argues that the bond for deed was
ineffective to pass title, pointing out that it does not contain any granting
language and has no habendum clause. Specifically, defendant argues that
unlike the language contained in the J. Cummer & Son Lumber Co. deed,
which states that the lumber company “has granted, bargained, sold and
transferred, and . . . does grant, bargain, sell, and transfer unto the [Railroad],
its successors, and assigns the right of way for Railroad purposes over a strip
of land[,]” the bond for deed contains no language granting a present estate.
Def.’s Reply in Supp. of Cross-Motion for Partial Summ. J. (“Def.’s Reply”)
2. Defendant argues that “the language in the document is that of a contract
pursuant to which the grantor is agreeing to enter into a deed in the future
giving the railroad title to, or rights in, its property.” Def.’s Cross-Motion 10.
Defendant also argues that, if construed to convey anything, the
instrument contemplated a grant of a fee, not an easement, because,
7
according to the government, in Florida, a grant of a railroad right-of-way is
presumed to be a fee. Moreover, defendant argues that the clause requiring
the railroad to be built does not provide for a reverter of the property interest,
and that the reservation of mineral rights is inconsistent with the grant of only
an easement.
In Tucker v. Cole, 148 Fla. 214, 215 (1941), the Florida Supreme
Court considered whether a similar instrument was sufficient to convey a
present estate. The written instrument in that case provided:
‘Know all Men By These Presents that I, B. M. Dell of the State
of Florida and County of Alachua have this day bargained and
sold, aliened, confirmed and delivered unto R. J. Steele & J.
W. Roper of the State of North Carolina & Co. of Richmond a
certain tract or parcel of land situate, lying and being in the
State of Florida and County of Marion on the South side of
Orange Lake in Township Twelve (12) South of Range 22 East
and North of Section 26 containing six hundred & forty acres
(640), also two other parcels of land adjoining this containing
120 acres. The said Steele and Roper agreeing to pay me for
the above named lands the sum of Six Thousand Dollars in
three several installments as follows, viz. Two Thousand
Dollars on the 20th February next, Two Thousand Dollars on
the first of January 1856, Two Thousand Dollars on the first of
January 1857 and I agree and bind myself, my heirs, executors
administrators and assigns in the sum of Twelve Thousand
Dollars to the said Steele & Roper to make them a title or deed
to the above named land in fee simple when they have made
me the third or last payment as above prescribed. In witness of
which I have hereunto set my hand and Seal this the 18th day
of December 1854.[’]
Id. at 215-16.
The Florida Supreme Court agreed with the trial court’s determination
that the parties’ intention was sufficiently clear from the instrument to
convey a present estate. The key to this holding was the presence of a
granting clause: “have this day bargained and sold, aliened, confirmed and
delivered.” Id. at 219. In so holding, the court cited with approval to 16
American Jurisprudence section 20, which the court stated provided:
‘In order that an instrument purporting to convey title to land
or an interest or estate in land may be valid as a deed and
8
operative to pass such title to or interest in land, it is essential
that there be a grantor, a grantee and a thing granted, and that
it convey a present interest or estate. It is further necessary that
the instrument be signed by the grantor, someone whom he
directs to sign for him, or his authorized agent, be attested and
acknowledged in conformity to the local statutory
requirements, and delivered by the grantor to the grantee, or to
someone in his behalf and accepted by the grantee. No
prescribed form is, however, essential to the validity of a deed
or to make it operative if it makes known the transaction. To
make a conveyance valid, it is in general sufficient that there
be parties able to contract and to be contracted with, a proper
subject matter sufficiently described, apt words of conveyance,
and an instrument of conveyance duly sealed and delivered.
Generally speaking, any words which denote the intention of
the parties to a deed to transfer the title from one to another are
sufficient to make a conveyance, and the court will give effect
to that intention notwithstanding inaccuracy of expression or
the inaptness of words used.’
Id. at 219-20.6
Here, although we have a grantor, the Anglo Florida Phosphate Co., a
grantee, the SFR, and a thing to be granted, a right-of-way through the
described lands, what is missing is conveyance of “a present interest or
estate.” There is no granting clause. We thus agree with defendant and find
that the bond for deed was merely a contract whereby the grantor agreed to
bind itself to provide a deed to the railroad at a later date. It was ineffective
to transfer any interest in land to the railroad. The claim is not at an end,
however. As we explain in detail later, we find that the railroad took this
section by operation of its state charter, and, absent a record of a
condemnation or conveyance, the railroad gained only an easement for
railroad purposes. This result, we believe, is proper whether the SFR
acquired its interest in the property via the Anglo Florida Phosphate Co.
instrument or via operation of law by means of the railroad’s charter because
all that was conveyed or otherwise took was a railroad right-of-way.
Admittedly, the law in Florida on this subject is less than consistent.
Defendant is able to point to Florida Power Corp. v. McNeely, where the
6
We are unable to locate a first edition of American Jurisprudence. The
relevant current second edition section is found at 23 Am. Jur. 2d Deeds §
12 (February 2020 update).
9
court held that “a railroad right of way . . . is not a mere easement or user for
railroad purposes but is a fee vested in the railroad.” 125 So. 2d 311, 316
(Fla. Dist. Ct. App. 1960) (reh’g denied, 138 So. 2d 341 (Fla. 1961)).
McNeely in turn relies on Atl. Coast Line R. Co. v. Duval Country, 114 Fla.
254, 332 (Fla. 1934)), where the Florida Supreme Court held that:
[a] railroad right of way in . . . [Florida] is not a mere easement
or use for railroad purposes. Like other property it is acquired
by purchase or condemnation and vests a fee in the company
acquiring it which cannot be divested except as the law
provides.
Id. at 332.
As Judge Williams of this court pointed out in Rogers v. United States,
however, the parties in Atl. Coast Line R. Co. agreed that the railroad
acquired a fee in the right-of-way, “[t]hus, when the Florida Supreme Court
stated that a railroad right-of-way was not an easement, it did so in a context
where there was no question that the railway had obtained the land in fee
simple.” Rogers v. United States, 90 Fed. Cl. 418, 430 (2009) (“Rogers III”).
The relevant question was not before the court. I.e., the holding is merely
dicta, at best. Indeed, the court in McNeely clarified that “[t]his is not to say
that a railroad by arrangement or otherwise could not under any
circumstances operate by virtue of an easement.” Id. at 317.
Moreover, in Rogers I, 814 F.3d at 1299, the Federal Circuit clarified,
by referral of a legal question to the Florida Supreme Court, that, under
Florida state law, “a railroad can acquire either an easement or fee simple
title to a railroad right-of-way and that no statute, state policy, or factual
considerations prevails over the language of the deeds when the language is
clear.” Id. at 1309. It is incorrect, in other words, to assume that a grant to a
railroad of a right-of-way in Florida is necessarily a fee.
We think the better view is that a “right-of-way” for railroad purposes
should be construed according to its natural meaning, i.e. “[t]he right to pass
through property owned by another.” Right-of-Way, Black's Law Dictionary
(11th ed. 2019). In addition, there was no reference in the bond to a fee estate
or anything that might look like a fee estate, “land,” for instance. If plaintiff
was correct, in other words, that a present property interest was granted by
the Anglo Florida Phosphate Co. instrument, it would have been an
easement—the same result reached by our analysis below concerning the
effect of the Florida railroad charter statute.
10
B. Properties Acquired by Railroad Charter
With respect to Claims 1, 4, 5, and 8, the parties agree that the ICC
valuation map indicates that the railroad acquired its interests by charter.7
Defendant argues, however, that simply because the ICC’s notation indicated
that the railroad acquired its property interest by charter, “does not equate to
the railroad holding only an easement in the property.” Def.’s Reply 4.
Rather, defendant points out that, “under the Florida statutes applicable at the
time the [r]ailroad acquired its Interests, chartered railroads could acquire
and hold fee simple title in property.” Id. (citing Chap. 1987 of the Act of
February 19, 1874, (“Corporations–Railroads and Canals,”) § 10 (the third
power granted by the statute to railroad corporations in section 10),
hereinafter referred to as “1874 Act, Chap. 1987.”
Defendant, relying on the 1874 Act, Chap. 1987, points out that, at the
time, railroad companies were authorized to “purchase, hold, and use such
real estate and other property as may be necessary for the construction and
maintenance of its road or canal . . . .” Id. § 10. The statute also provided
that, when a “railroad or canal company formed under this chapter shall not
have acquired any real estate required for the purposes of its incorporation,”
it shall have the right to acquire the land by condemnation. Id. § 13. As
discussed below, however, neither party has produced any evidence that the
railroad purchased the land in dispute, nor has either produced evidence of a
condemnation proceeding.
In any event, while we agree with defendant that, under Florida
statutes applicable at the time, a railroad could acquire and hold fee simple
title in property by either purchase or condemnation, they were not limited
to acquiring only fee estates. The deed from J. Cummer & Son Lumber Co.,
for example, is an instance of a Florida railroad obtaining an easement by
purchase.
Defendant also argues that the ICC notation “held by Charter” cannot
be construed as an “admission” regarding the means by which the railroad
acquired its interests or to the nature of the interest conveyed. Id. In support
of this argument, defendant cites to Amaliksen v. United States, 55 Fed. Cl.
167 (2003), wherein this court stated: “The purpose of [the ICC’s] maps was
to identify parcels for valuation, not to distinguish types of ownership.” Id.
at 175. Defendant concludes that the ICC notation does not show what
7
The plaintiffs and corresponding claims are the Estate of Pauline Mills
(Claim 1), Mary Forrester (Claim 4), Bowtie Properties, Inc. (Claim 5), and
the Estate of Bettye R Freeney (Claim 8).
11
interest the railroad acquired or that the railroad began operations on the land
without a deed; rather, it merely shows “that the [r]ailroad had the right to
acquire and hold land pursuant to its charter from the State of Florida.” Def.’s
Reply 5-6.
Defendant’s reliance on Amaliksen is misplaced. The issue there was
whether it was appropriate to invoke any interpretive aids, such as earlier
deeds or ICC valuation maps, to show ownership when the language of the
deed was otherwise clear on its face. 55 Fed. Cl. at 172. Here, unlike
Amaliksen, neither party has provided any evidence of a deed. On the
contrary, plaintiffs have provided the only evidence of how the railroad
acquired its property interests: the ICC valuation map, which explicitly
states: “No Record of Conveyance” and “[p]ossession under Charter.” Pls.’
Facts, Ex. F.
While defendant agrees that “[the ICC valuation map] provide[s] a
guide to identifying the conveyance instruments by which railroads acquired
their interests in their railroad corridors,” it argues that simply because the
ICC valuation map provides that there is no record of conveyance and that
the railroad obtained its interest in the property by Charter, this does not mean
that the property was acquired without a deed. Def.’s Cross-Motion 14.
Rather, defendant states that “this could simply mean that at the time the
schedule was created[,] neither the ICC nor the [r]ailroad could identify or
locate the deed or other conveyance instrument applicable to that property.”
Id. Defendant also suggests that plaintiffs have failed to search beyond the
ICC valuation map for a record of a conveyance and relied on a mere
presumption that no deed exists.
Plaintiffs counsel certified to the court, however, that the railroad
“was subpoenaed in this case and produced all of its deeds and records of
acquisition and [that] none of them are for these segments . . . .” Pls.’ Resp.
6. Plaintiffs have done what they can, and it is thus inappropriate to speculate,
as defendant does, that the railroads might have obtained their interests by
fee and that we should merely assume that was the case.
Plaintiffs argue that, because the ICC valuation map clearly states that
the property has “No Record of Conveyance” and because it identifies that
the railroad obtained its “possession by Charter,” this means that there was
no conveyance instrument and that the only lawful means the railroad had
for obtaining possession was by Charter. Id. Plaintiffs point out that the ICC
valuation maps were created by the railroad, rather than the ICC, and each
map identifies the railroad engineer who filed the map with the ICC. See Pls.’
Facts, Ex. F. We reject defendant’s speculation and agree with the plaintiffs
12
that these definitive statements, absent any evidence to the contrary, suffice
to establish that there were no records of conveyance relating to these
segments in the property at issue.
Plaintiffs conclude by arguing that, given that there are no records of
conveyance and because the railroad acquired the property under color of
charter, the only conclusion left is “that the railroad entered the property
without a deed and used its powers to cut its easements through the property
and begin operations.” Pls.’ Resp. 5. In support, plaintiffs cite Pensacola &
Atlantic R.R. Co. v. Jackson, 21 Fla. 146, 152 (Fla. 1884), and Florida
Southern R. Co. v. Hill, 23 So. 566, 570 (Fla. 1898). In Pensacola & Atlantic
R.R. Co., the Florida Supreme Court stated that when “a chartered railroad
company wrongfully or without lawful right enters upon and takes
possession” of land, the landowner is not divested of his title to the land. 21
Fla. at 146. Moreover, in Florida Southern R. Co., the Florida Supreme Court
opined that, when a railroad takes possession of land without the landowners’
consent, and without condemnation proceedings, the railroad receives the
same rights and interests “which they would have secured by regular
condemnation proceedings, i.e. the right to the perpetual use of the property
for the purposes of their incorporation . . . .” 23 So. at 570. Thus, plaintiffs
argue that because the railroad obtained its interests in plaintiffs’ properties
under charter and without a conveyance or through condemnation, it obtained
only easements for railroad purposes.
Defendant responds that Florida Southern R. Co. does not support
plaintiffs’ argument because there “the landowners claimed that the railroad
‘unlawfully and wrongfully entered upon [their] land’ and constructed its
rights of way and tracks, and that they were entitled to compensation for the
railroad’s taking of their land.” Def.’s Cross-Motion 16 (quoting Florida S.
R. Co., 23 So. at 567). Defendant urges that the court did not hold “that if a
railroad takes land without a conveyance or other form of permission and
without pursuing condemnation proceedings, it necessarily obtains only an
easement for railroad purposes.” Id. at 17. Rather, defendant argues that the
court held that, under these circumstances, “the owner may treat his claim
for compensation as a vendor’s lien and foreclose in equity.” Id.
While the court in Florida S. R. Co. assumed that the railroad had
unlawfully and wrongfully entered onto complainant’s land, “the
complainants waived the tortious acts, ratified the [railroad’s] possession,
and regarded the taking and possession as done under the power of eminent
domain.” 23 So. at 570. Plaintiff’s preferred remedy of ousting the railroad,
in other words, was unavailable. Thus, the Florida Supreme Court did not
rely on whether there was a tortious or wrongful taking, rather it considered
13
the appropriate remedies left to the complainants when the railroad took land
without an agreement and without condemnation. Id. at 568.
Indeed the decision in Florida Southern R. Co. makes plain that
although the Florida courts view possession under charter as “without
permission” of the landowner when there was no purchase or condemnation,
it is not truly tortious in the sense that there was no color of right. 23 So. at
570 (“even where the original taking is tortious, because against the consent
of the owner, and without condemnation, it is, nevertheless, necessarily
referable to the power of eminent domain”). In other words, the railroad
charter gave it the right to enter; compensation would be determined later.
In making its determination that the railroad had to compensate the
complainants for the property taken, the court analyzed the principles
provided in Organ v. Memphis & L.R.R. Co., 51 Ark. 235, 236 (1889), where
the Arkansas Supreme Court held that, when a railroad takes land without an
agreement and without condemnation, the owner of such land may deem the
act as done under the right of eminent domain and demand just
compensation. Florida S. R. Co., 23 So. at 570. The Florida Supreme Court
viewed the Arkansas Supreme Court’s decision in Organ “as being
eminently just, and correct in principle, for the transaction is nothing more
nor less than an implied sale of an easement in the land, induced . . . by the
compulsory features of the power of eminent domain . . . .” Id. (citations
omitted). The Florida Supreme Court determined that “[t]he compensation
due [to] the owner is always in part, and frequently wholly, purchase money
for a perpetual interest in, or easement over, the land; and, inasmuch as equity
always implies a lien for the purchase price upon a voluntary sale upon credit
by the owner . . . .” Id. It went on to state that the railroad had “received the
same rights and interests in complainants’ property which they would have
secured by regular condemnation proceedings, i.e. the right to the perpetual
use of the property for the purposes of their incorporation . . . .” Id.
Although not explicitly discussed in Florida Southern R. Co., it must
be recognized that railroads in Florida were granted by the 1874 Act the right
to enter lands for purpose of building railroads without permission from the
owners, a form of eminent domain. 1874 Act, Chap. 1987 § 10 (fourth power
granted). They were not forced to wait for conveyance or condemnation. If
no voluntary conveyance was agreed upon, railroads were authorized to
obtain title by condemnation. Id. §§ 13-14. Construction of the railroad was
authorized before or pending the condemnation proceedings. Id. § 14.
Discussion of “lawfulness” thus must be viewed in the context of this general
grant of authority.
14
We thus conclude that the best distillation of the law in Florida is that,
when a railroad company takes land under color of its statutory charter but
without an agreement and without a condemnation proceeding, it does not
divest the landowners of title and that the railroad merely obtains perpetual
use of the land for the purposes of its incorporation, i.e. an easement for
railroad purposes. We thus need not reach the issue of whether plaintiffs have
met established the elements of adverse possession or right of use by
prescription. There is no question what interest passed to the railroad with
respect to Claims 1, 4, 5, 6, 7, and 8. We find that the railroad acquired only
an easement in the land for railroad purposes by operation of charter.8
C. The Scope of the Easements
All that remains is defendant’s fallback position that the scope of the
easements might have encompassed railbanking. With respect to the
properties conveyed by the J. Cummer and Son Lumber Co. deed, defendant
does not dispute the scope of the easements. It agrees that the deed conveyed
an easement expressly limited to use for railroad purposes. Therefore, the
landowners that owned the property abutting the railroad right-of-way on the
date that the STB issued a NITU are entitled to just compensation under the
Fifth Amendment, as discussed below. As to the rest of the claims, however,
defendant argues that the scope of those easements do not preclude
railbanking and trail use.
Plaintiffs point out that this court “remains consistent in holding that
railbanking with interim recreational trail use is not a railroad purpose and
thus exceeds the scope of a railroad purpose easement.” Pls.’ Resp. 5.
Specifically, plaintiffs point to Glosemeyer v. United States, 45 Fed. Cl. 771,
779 (2000), wherein this court rejected the government’s argument that
recreational trail use and railbanking qualified as railroad purposes. In
Glosemeyer, this court quoted the Missouri Court of Appeals in rejecting the
government’s argument:
The term ‘railroad purposes’ . . . does not encompass other
forms of transportation, such as walking or bicycling, and the
8
With respect to Claims 6 and 7, which we found not to have been voluntarily
conveyed by the proffered bond for deed, we find the landowners in the same
position as those in Florida Southern R. Co. The railroad entered the property
and built a railroad, which, as we explained above, it had the color of right
to do pending its acquisition of title by agreement or condemnation. That
final step being missing from the record, the railroad acquired a perpetual
right of use, which is to say an easement for railroad purposes.
15
recreational purposes . . . . The proposed development of a
hiking, biking, cross-country skiing, and nature trail is
completely unrelated to the operation of a railway and
consistent only with an intent to wholly and permanently cease
railway operations.
Id. at 779 (quoting Boyles v. Miss. Friends of Wabash Trace Nature Trail,
Inc., 981 S.W.2d 644, 649-50 (Mo. Ct. App. 1998)). Plaintiffs further cite a
variety of decisions reaching the same result for other jurisdictions: Ellamae
Phillips Co. v. United States, 564 F.3d 1367 (Fed. Cir. 2009) (Colorado);
Hash v. United States, 403 F.3d 1308 (Fed. Cir. 2005) (Idaho); Preseault II,
100 F.3d at 1533 (Vermont); Schmitt v. United States, 2003 WL 21057368
at *7, *8 (S.D. Ind. 2003); (Indiana); Schneider v. United States, No.
8:99CV315, 2003 WL 25711838 (D. Neb. Aug. 29, 2003) (Nebraska);
Blendu v. United States, 75 Fed. Cl. 543 (2007) (Idaho); Schnabel v. County
of DuPage, 428 N.E.2d 671 (Ill. 1981) (Illinois); Pollnow v. State Dep't of
Natural Resources, 276 N.W.2d 738 (1979) (Wisconsin).
Furthermore, plaintiffs cite to this court’s holding in Rogers III,
where we held that, “[i]n Florida, the scope of an easement does not increase
with time, and accordingly, the ‘burden of a right of way upon the servient
estate must not be increased to any greater extent than reasonably necessary
and contemplated at the time of initial acquisition.’” Id. (quoting Crutchfield
v. F.A. Sebring Realty Co., 69 So. 2d 328, 330 (Fla. 1954)). In reaching the
decision that railbanking and trail use did not fall into the scope of the
easement granted to the railroad, this court relied on the Federal Circuit’s
analysis in Preseault II–i.e., whether at the time of the conveyance the parties
contemplated that the railroad could preserve its future use of the right of
way as a public trail.9 Id.
9
In Preseault II, the Federal Circuit determined that the language of the
easement conveyed by the original parties did not contemplate the railroad’s
ability to preserve the use of the right-of-way for future public recreational
trail purposes. The Preseault II court held:
When the easements here were granted to the Preseaults'
predecessors in title at the turn of the century, specifically for
transportation of goods and persons via railroad, could it be
said that the parties contemplated that a century later the
easements would be used for recreational hiking and biking
trails, or that it was necessary to so construe them in order to
give the grantee railroad that for which it bargained? We think
not. Although a public recreational trail could be described as
16
Here, pursuant to its state charter, the railroad acquired an easement
for railroad purposes. We find, as we have many times before, that the
conversion of the easement to a public recreational trail constitutes a new and
unauthorized use. The landowners who owned the property abutting the
railroad right-of-way on the date the STB issued the NITU are entitled to just
compensation under the Fifth Amendment, as discussed below.
D. The Date of the Taking
Defendant also requested that this court withhold any ruling on
liability until the Federal Circuit issues a ruling in the pending appeal in
Caquelin. As the Federal Circuit has not yet issued an opinion in Caquelin,
defendant argues that this court should limit any ruling to a liability
determination only if “a trail agreement become[s] finalized.” Def.’s Cross-
Mot. 7. Plaintiffs, however, argue that “[t]he Federal Circuit has not issued
any ruling on any issue related to whether a taking occurs absent a trail
agreement.” Pls.’ Resp. 15 (citing Caquelin v. United States, 697 Fed. App.
1016, 1019-20 (Fed. Cir. 2017)). Rather, plaintiffs argue that, according to
the Federal Circuit’s per curium opinion in Caquelin, the court stated that
“[e]n banc review may be warranted” based on the factors in Arkansas Game
& Fish Commission v. United States, 568 U.S. 23 (2012), to address “whether
Ladd [v. United States, 630 F.3d 1015 (Fed. Cir. 2010)] should remain
governing precedent.” Caquelin, 697 Fed. App. at 1019.
On remand, Judge Lettow, in Caquelin, observed that the government
may take property physically or by regulation. Caquelin vs. United States,
140 Fed. Cl. 564, 573 (2018). These takings may be further divided into two
categories, categorical and non-categorical. Id. A categorical taking deprives
a roadway for the transportation of persons, the nature of the
usage is clearly different. In the one case, the grantee is a
commercial enterprise using the easement in its business, the
transport of goods and people for compensation. In the other,
the easement belongs to the public, and is open for use for
recreational purposes, which happens to involve people
engaged in exercise or recreation on foot or on bicycles. It is
difficult to imagine that either party to the original transfers
had anything remotely in mind that would resemble a public
recreational trail.
100 F.3d at 1542-43.
17
landowners of all economically viable use of their property, while a non-
categorical taking deprives the landowner of some amount of the economic
use of their land. Id. Either taking may be permanent or temporary. Id.
Ultimately, Judge Lettow determined that, in a rails-to-trails case, a
categorical physical taking occurs upon the issuance of a NITU, regardless
of whether the NITU results in trail use of the corridor or if a trail agreement
is reached. Id. at 578. Although this court determined that the Arkansas Game
& Fish factors would be inapplicable to a categorical physical taking, Judge
Lettow nevertheless applied them, concluding that “a taking occurred when
the STB issued a NITU that blocked Mrs. Caquelin’s reversionary interest in
the land.” Id. at 584.
Here, it is undisputed that the STB issued a NITU on July 14, 2014,
that the parcels owned by plaintiffs adjoin the railroad corridor, and that no
trail use agreement has been reached between the STB and CSXT. As the
NITU has prevented abandonment of the corridor and precluded the plaintiffs
from their reversionary interests in the land underlying the right-of-way, we
find that the STB’s issuance of a NITU effected a categorical physical taking
and that the government owes plaintiffs just compensation. Nor, in any event,
would the application of the Arkansas Game & Fish factors would lead to a
different result. Cf. Banks v. United States, 138 Fed. Cl. 141 (2018) (denying
the government’s request to await a trial decision in Caquelin and granting
summary judgment on liability for the plaintiffs for a temporary taking).
CONCLUSION
Because the railroad obtained only a railroad right-of-way and that
easement did not encompass railbanking, we grant plaintiffs’ motion for
partial summary judgment on liability and deny defendant’s cross-motion.
The parties are directed to confer and propose further proceedings in a joint
status report, on or before March 20, 2020.
s/Eric G. Bruggink
ERIC G. BRUGGINK
Senior Judge
18