Stimson Lumber Company v. United States ( 2020 )

In the United States Court of Federal Claims
No. 16-912L and
No. 16-1565L and No. 18-375L Consolidated
No. 18-983L
(Filed: September 18, 2020)
)
PERRY LOVERIDGE, et al., )
)
Plaintiffs, )
)
v. )
) Motion for Summary Judgment; Rails-
THE UNITED STATES, ) to-Trails; Oregon Law; State Law
) Abandonment
Defendant. )
)
_______________________________ )
)
ALBRIGHT, et al., )
)
Plaintiffs, )
)
and )
)
THE UNITED STATES, )
)
Defendant. )
_______________________________ )
)
STIMSON LUMBER COMPANY, )
)
Plaintiff, )
)
and )
)
THE UNITED STATES, )
)
Defendant )
)
Thomas S. Stewart, Kansas City, MO, for Loveridge and Stimson Lumber plaintiffs.
Elizabeth G. McCulley, Kansas City, MO, of counsel.
James H. Hulme, Washington DC for certain Albright and Aeder plaintiffs. Laurel
LaMontagne, Morgan Pankow, Washington DC, of counsel.
David W. Gehlert, Environment and Natural Resources Division, United States
Department of Justice, Washington DC, with whom was Jean E. Williams, Deputy
Assistant Attorney General, for defendant.
OPINION
FIRESTONE, Senior Judge.
Pending in these Oregon Trails Act1 cases are the parties’ cross motions for partial
summary judgment concerning five deeds2 that the court previously held conveyed
easements to the railroad that were broad enough to encompass railbanking and trail use.
The issue now before the court is whether a taking nonetheless occurred because the
railroad holding these easements had abandoned them under Oregon law. Because the
plaintiffs have not shown that the railroad abandoned the easements for all purposes,
plaintiffs’ motions for partial summary judgment are DENIED, and the government’s
cross motion is GRANTED.
1
The Trails Act “preserve[s] shrinking rail trackage by converting unused rights-of-way to
recreational trails.” Preseault v. Interstate Commerce Comm’n, 494 U.S. 1, 5 (1990). One of the
court’s prior opinions contains an explanation of the Trails Act. See Loveridge v. United States,
139 Fed. Cl. 122, 127-29 (2018).
2
The relevant deeds are the Wheeler 16/2 deed, the Beals Land Co. 18/41 deed, the Mendenhall
72/550 deed, the Western Timber Co. 77/108 deed, and the Hannan 72/549 deed. See Loveridge
Def.’s Cross-Mot. at 1 n.1, ECF No. 121.
2
I. BACKGROUND
The history of these cases has been discussed at length in the court’s prior
opinions, see, e.g., Loveridge v. United States, 139 Fed. Cl. 122 (2018), recons. partially
granted, 2019 WL 495578 (2019), and will only be briefly repeated as relevant here. The
following facts are undisputed.
The plaintiffs in these related cases claim they are entitled to just compensation
under the Fifth Amendment for a taking of their property in connection with the creation
of the Salmonberry Trail in Oregon. The Salmonberry Trail was established under the
National Trails System Act, 16 U.S.C. § 1247(d), after the Port of Tillamook Bay
Railroad (“POTB”) ceased operations over portions of its railways. Loveridge v. United
States, 149 Fed. Cl. 64, 68 (2020). On May 26, 2016, the POTB filed with the Surface
Transportation Board (“STB”) its Notice of intent to abandon the rail line. See Loveridge
Mot., Ex. A at 1. In this Notice, the railroad indicated that the rail line “suffered
catastrophic damage due to severe storms, making it impossible to provide service over
the Subject Line” since December 2007. Id. at 2. The railroad stated that it “does not
believe that it will be able to obtain the necessary funding to repair and rehabilitate the
line” and that, accordingly, the railroad gave “notice of its intent to terminate service over
(fully abandon) the Subject Line.” Id. This Notice was going to be effective on July 28,
2016. Id. at 1.
Publicly available financial records auditing the POTB’s 2016-2017 financial
position confirm that in the spring of 2009, the POTB had decided not to pursue repairs
to track damaged in the 2007 storm. Id., Ex. F at 7. These records also explain that an
3
inter-governmental agreement between the POTB and the State of Oregon formed the
Oregon Tillamook Railroad Authority (“OTRA”) in April 1993, the purpose of which
was to bring the railroad up to certain track safety standards. Id., Ex. G at 41. The
records note that this goal was unlikely to be achieved given the 2007 storm damage and
that the organization was disbanded in 2014. Id. These records also state that the POTB
was working with the Oregon government to develop a “Master Plan” for the
Salmonberry Trail over portions of the rail line. Id., Ex. F at 7. To this end, in 2015, the
POTB entered into an agreement with numerous Oregon governmental entities to
establish the Salmonberry Trail Intergovernmental Agency (“STIA”), to construct a
multi-use trail over the “former railroad line between Banks and Tillamook.” Id., Ex. H.
at 1, 6.
On June 7, 2016, the STIA filed with the STB a Trail Use Request for the portions
of the rail line at issue here. Id., Ex. B. On July 1, 2016, the POTB acknowledged the
request from the STIA to negotiate a Trail Use Agreement and indicated the railroad’s
willingness to do so. Id., Ex. C at 1. Accordingly, on July 25, 2016, the railroad
submitted another letter to the STB in which it voluntarily extended the effective date of
its Notice until August 31, 2016. Id., Ex. D at 1.
The STB authorized the creation of the Salmonberry Trail in a Notice of Interim
Trail Use (“NITU”) dated one day later, July 26, 2016. Id., Ex. E. The NITU granted the
STIA’s request to negotiate a Trail Use Agreement. Id. at 2. A final trail use and
railbanking agreement was reached between the POTB and the STIA on October 27,
2017. Loveridge v. United States, 148 Fed. Cl. 279, 283 (2020). A follow-on trail use
4
agreement between the POTB and STIA indicates that the POTB retained the right to
administer existing third party use agreements for use of or access to a portion of the trail.
Def.’s Cross-Mot., Ex. A at 3-4, ECF No. 121-1.
The plaintiffs in these cases claim to own property underlying the POTB’s railroad
right of way and assert that the creation of the Salmonberry Trail gave rise to a taking of
their property under the Fifth Amendment. In prior decisions, the court determined that
the five deeds relevant to this opinion conveyed broad easements to the POTB’s
predecessor with no language restricting the purposes for which the right of way
easements may be used, and that Oregon law therefore permitted future use of these
easements as a trail.3 Loveridge v. United States, 148 Fed. Cl. at 291-95. As such, the
court concluded that the plaintiffs could not establish that a taking had occurred with
regard to the parcels associated with these five deeds. See id.
The plaintiffs in Loveridge v. United States and Stimson Lumber v. United States,
joined by certain plaintiffs in Albright v. United States (consolidated with Aeder v. United
States), have now filed another round of summary judgment motions. These plaintiffs
argue that, under Oregon law, the POTB abandoned the broad easements conveyed by the
five deeds before the issuance of the NITU, and for this alternative reason a taking has
occurred for nine parcels associated with the five deeds. Loveridge Mot. at 1 & n.3, ECF
3
Plaintiffs suggest in a footnote that the court misapplied Oregon law in so holding by failing to
discern the grantors’ intent. Loveridge Mot. at 2 n.4. The court discussed this issue in its prior
decision. Loveridge, 148 Fed. Cl. at 285 (“[U]nder Oregon law if ‘an easement is granted in
general and unlimited terms, unrestricted reasonable use will be deemed to be intended by the
parties.’” (quoting Criterion Interests, Inc. v. Deschutes Club, 902 P.2d 110, 113 (Or. Ct. App.
1995))).
5
No. 115 (listing four parcels); Stimson Mot. at 1 & n.3, ECF No. 33 (listing three
parcels); Albright Mot. at 1 & n.1, ECF No. 152 (listing two parcels). In support, the
plaintiffs point to the POTB’s statements in its correspondence with the STB that the
POTB intended to terminate service over the relevant portions of the railway, the POTB’s
conduct prior to the issuance of the NITU in deciding not to repair the railway track after
the 2007 storm damage, and the POTB’s decision to negotiate a trail use agreement with
the STIA. Loveridge Mot. at 6-10.4
The government responds that plaintiffs have failed to produce evidence that the
POTB abandoned the broad easements at issue for all purposes. The government
contends that, at best, the plaintiffs’ evidence demonstrates that the POTB abandoned
only certain railroad uses of the easements. Loveridge Def.’s Cross-Mot. at 3-8, ECF No.
121.5 The government also argues that the plaintiffs’ evidence demonstrates that the
railroad in fact intended to retain the easements. Id.
In reply, the Loveridge and Stimson plaintiffs, joined by certain plaintiffs in
Albright and Aeder, argue that any other uses of the easements are “irrelevant as a matter
4
The plaintiffs’ motions for summary judgment in Loveridge and Stimson make essentially
identical arguments, and the relevant Albright/Aeder plaintiffs have joined in the brief filed by
the Loveridge plaintiffs. The court will therefore cite only the Loveridge motion throughout this
opinion.
5
The government filed identical cross motions for summary judgment in response to the
Loveridge (joined by the relevant Albright/Aeder plaintiffs) and Stimson motions. The court will
therefore cite only the government’s cross motion for summary judgment in Loveridge
throughout this opinion.
6
of law.” Loveridge Reply at 4, ECF No. 122.6 The plaintiffs contend that they have
shown that the POTB abandoned its use of the easements for rail service and that, at that
point, all potential uses were “extinguished.” Id. at 6. To hold otherwise, the plaintiffs
contend, would mean “there could never be any liability” under a pre-NITU
abandonment theory for broad easements that are not limited to railroad purposes “and
utilization of the Trails Act would be completely unnecessary.” Id. at 6-7.
The government did not file a reply in support of its cross motion.
Oral argument was held on September 9, 2020.
II. LEGAL STANDARDS
A. Summary Judgment
Summary judgment is appropriate where “the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter
of law.” Rule 56(a) of the Rules of the United States Court of Federal Claims; see also
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). A genuine dispute is one that
“may reasonably be resolved in favor of either party.” Anderson, 477 U.S. at 250. A fact
is material if it “might affect the outcome of the suit.” Id. at 248. The moving party
bears the initial burden of establishing that there is no genuine dispute as to any material
fact, and any doubt over factual issues will be resolved in favor of the non-moving party.
See Mingus Constructors, Inc. v. United States, 812 F.2d 1387, 1390 (Fed. Cir. 1987).
Once the moving party has supported its motion, the burden shifts to the non-moving
6
The replies filed in Loveridge (joined by the relevant Albright/Aeder plaintiffs) and Stimson are
identical. The court will therefore cite to only the Loveridge reply throughout this opinion.
7
party to identify specific facts on which a genuine disputes exists for trial. Anderson, 477
U.S. at 250. “A nonmoving party’s failure of proof concerning the existence of an
element essential to its case on which the nonmoving party will bear the burden of proof
at trial necessarily renders all other facts immaterial and entitles the moving party to
summary judgment as a matter of law.” Dairyland Power Coop. v. United States, 16
F.3d 1197, 1202 (Fed. Cir. 1994). When both parties move for summary judgment, “the
court must evaluate each party’s motion on its own merits, taking care in each instance to
draw all reasonable inferences against the party whose motion is under consideration.”
Mingus, 812 F.2d at 1391.
B. Fifth Amendment Taking Under the Trails Act
The Federal Circuit has identified three primary questions to determine whether a
taking has occurred under the Trails Act:
(1) who owns the strip of land involved, specifically, whether the railroad acquired
only an easement or obtained a fee simple estate; (2) if the railroad acquired only
an easement, were the terms of the easement limited to use for railroad purposes,
or did they include future use as a public recreational trail (scope of the easement);
and (3) even if the grant of the railroad’s easement was broad enough to
encompass a recreational trail, had this easement terminated prior to the alleged
taking so that the property owner at the time held a fee simple unencumbered by
the easement (abandonment of the easement).
Ellamae Phillips Co. v. United States, 564 F.3d 1367, 1373 (Fed. Cir. 2009).
For the five deeds at issue, the court has already answered the first and second
questions, holding that the deeds granted broad easements that allowed for future use of
the right of way as a trail. See Loveridge, 148 Fed. Cl. at 291-95. The pending motions
for summary judgment involve the third question. That is, for the five deeds at issue that
8
conveyed broad easements that the court found were not limited to railroad purposes
only, were these easements abandoned and therefore terminated prior to the issuance of
the NITU, such that the property reverted back to the underlying fee owners and a taking
has occurred.
C. Abandonment Under Oregon Law
As the court has previously explained, the property rights of the parties in this case
are analyzed under Oregon law. Loveridge v. United States, 149 Fed. Cl. at 70. Under
Oregon law, an easement can be terminated by consent, prescription, abandonment, or
merger. Cotsifas v. Conrad, 905 P.2d 851, 852 (Or. Ct. App. 1995). “A party claiming
abandonment [of an easement] must show in addition to non-use ‘either [a] verbal
expression of an intent to abandon or conduct inconsistent with an intention to make
further use.’” Conner v. Lucas, 920 P.2d 171, 174 (Or. Ct. App. 1996) (quoting Abbott v.
Thompson, 641 P.2d 652, 654 (Or. Ct. App. 1982) (alterations in original)); see also
Wiser v. Elliot, 209 P.3d 337, 341 (Or. Ct. App. 2009). The party alleging abandonment
must demonstrate abandonment by “clear and convincing evidence.” Johnston v.
Cornelius, 218 P.3d 129, 135-36 (Or. Ct. App. 2009). The Oregon Court of Appeals has
noted that “the courts rarely find [intent to abandon], and when they do it is because the
acts manifesting the intent have so fundamentally changed the landscape that further use
of the easement is deemed impossible.” Shields v. Villareal, 33 P.3d 1032, 1035 (Or. Ct.
App. 2001).
9
III. DISCUSSION
Applying these standards, the court holds that the plaintiffs have not met their
burden to show by clear and convincing evidence that the POTB abandoned the
easements at issue. As an initial matter, the court agrees with the government that the
plaintiffs must demonstrate that the POTB abandoned all uses of the easements under
Oregon law. The Oregon Court of Appeals has recognized that abandoning railroad use
of a right of way easement does not necessarily abandon the easement for all other
reasonable purposes. In Wiser v. Elliot, 209 P.3d at 340, the plaintiffs argued in support
of their claim of ownership of a railroad right of way that the railroad “easements
terminated when the railroad abandoned the properties . . . .” In support, the plaintiffs
presented a letter “from the railroad to the State Tax Commission that the railroad
abandoned the ‘operating purposes’ use of the properties for a railroad line” and had
removed tracks from the line. Id. at 341. The Oregon Court of Appeals held that this
conduct was not enough to demonstrate abandonment because it “revealed only an intent
to use the properties for ‘non-operating’ purposes, rather than an intent to not use the
properties at all.” Id. at 342. Oregon law therefore recognizes that the abandonment of
the railroad use of a property interest does not necessarily abandon the entire property
interest. Earlier Oregon cases likewise recognize that an owner must intend to abandon
all uses authorized by an easement in order to find that the easement has been abandoned.
See Bernards v. Link, 248 P.2d 341, 345 (Or. 1952) (“The intention required in the
abandonment of an easement is the intention not to make in the future the uses authorized
by it.” (quoting Restatement of the Law, Property, § 504) (emphasis added)).
10
This court’s precedent is also consistent with this principle. Applying New York
law, this court has previously recognized that an intent to abandon the use of an easement
for railroad purposes is not sufficient to establish an intent to abandon other purposes
allowed under the easement. Romanoff Equities, Inc. v. United States, 119 Fed. Cl. 76,
83 (2014), aff’d 815 F.3d 809 (Fed. Cir. 2016).7 In Romanoff Equities, after having
determined that the easement at issue encompassed trail use, the court was faced with the
question of “whether the corridor had been abandoned by the railroad prior to the
issuance of the CITU, in which case there may still be a taking.” Id. at 83. The court
held that the railroad had not abandoned the easement even though it was no longer being
used for railroad purposes because the easement was “broad enough to encompass any
use desired by the grantee.” Id. Although Romanoff Equities applied New York law, the
same rationale applies here: where an easement authorizes more than railroad use, the
cessation of railroad use only does not abandon the easement. The court thus holds that,
in this case, the plaintiffs must demonstrate that the POTB abandoned its easements for
all uses prior to the issuance of the NITU to demonstrate that a taking has occurred.
The plaintiffs have failed to so. The plaintiffs have presented some evidence that
the subject easements may not have been used for railroad purposes in the years
7
The plaintiffs state in their reply that Romanoff Equities addressed only the question of the
scope of the easement and “did not involve any aspect of” the third Ellamae Phillips question at
issue here. Loveridge Reply at 6. Contrary to this assertion, the court in Romanoff Equities
explicitly addressed the issue of whether the subject easement had been abandoned by the
railroad prior to the creation of the trail. 119 Fed. Cl. at 78 (describing the parties’ arguments),
81 (describing the third Ellamae Phillips question), 83 (determining “whether the corridor had
been abandoned by the railroad prior to the issuance of the CITU”).
11
immediately prior to the issuance of the NITU. However, as discussed below, the
plaintiffs have not provided clear and convincing evidence that the POTB intended to
entirely abandon the easements for all purposes through either “a verbal expression” of
such an intent or “conduct inconsistent with an intention to make further use” of the
easements, as required by Oregon law. Wiser, 209 P.3d at 341-42 (quotation omitted).
The plaintiffs rely first on the POTB’s May 26, 2016 Notice to the STB, in which
the POTB expressly stated its intent to abandon rail service over the relevant segment of
the line. Loveridge Mot. at 6-7. However, this Notice does not demonstrate that the
POTB intended to abandon all uses of the easements. Rather, the Notice and related
correspondence with the STB demonstrate only that the POTB intended to cease certain
railroad operations over the subject corridor. Loveridge Mot., Ex. A at 2 (stating in the
Notice that it was “impossible to provide service over the Subject Line” and that POTB
was giving notice “of its intent to terminate service over” the line). The Notice is
analogous to the letter in Wiser abandoning the “operating purposes” use of the rail line
only. The Oregon Court of Appeals has expressly held that such a statement is
insufficient to demonstrate abandonment. Wiser, 209 P.3d at 340-42.
The POTB’s pre-NITU conduct also does not demonstrate an intent to abandon the
easements for all purposes. Plaintiffs rely on the POTB’s 2009 decision not to repair the
railroad tracks after the 2007 storm damage, Loveridge Mot. at 7, the disbanding of the
OTRA in 2014, id. at 7-8, references to the “former railroad line” in the Salmonberry
Trail Interagency Agreement, id. at 8, and the POTB’s decision to enter into trail use
negotiations, id. at 9. The court agrees with the government that this conduct does not
12
demonstrate that the POTB intended to abandon the easements for all uses. Loveridge
Def.’s Cross-Mot. at 5-8. For example, the POTB’s decision not to repair the railroad
tracks signals an intention, at most, to discontinue rail service along the subject line, not
to abandon the easements entirely. See Romanoff, 119 Fed. Cl. at 83 (holding that
whether tracks are functioning or not is “irrelevant” to intent to abandon a broad
easement); Wiser, 209 P.3d at 341-42 (holding that the removal of tracks and letter
abandoning the “operating purposes” of the railroad line is insufficient). Likewise, that
the OTRA’s oversight of the POTB’s rail operations ended in 2014 speaks to only the
railroad purposes of the easement; the “assets . . . of the railroad” remained with the
POTB. Loveridge Mot., Ex. at G at 41.
Moreover, some of the evidence presented by the plaintiffs is inconsistent with an
intent by the POTB to abandon its broad easements. The POTB was a participant in the
2015 Salmonberry Trail Interagency Agreement to “plan the development and
maintenance of a multi-use trail.” Loveridge Mot., Ex. H at 2. Participation in this
agreement is conduct inconsistent with an intent to entirely abandon the easements. See
Romanoff, 119 Fed. Cl. at 83 (railroad’s participation in negotiations regarding creation
of the trail is evidence that the railroad did not intend to abandon a broad easement). In
addition, the Salmonberry Trail Rail Line Lease Agreement between the STIA and the
POTB specifically states that the POTB had “entered into third party contracts affecting
the” right of way prior to that agreement and that the POTB retained the right to
administer and renew these existing use agreements. Loveridge Def.’s Cross-Mot., Ex. A
at 3-4. These use agreements granted third parties limited non-ownership rights to use or
13
access the easements, such as “right of way use agreements, rail line use agreements,
licenses, easements, real property agreements, crossing agreements, encroachment
agreements, or permits and other agreements pertaining to [the] rail line.” Id. at 3. For
example, the POTB retained the right to administer and renew certain right of way leases
for telephone cables or fiber optic utility lines. Id. at 38-39 (Exhibit C to the
Salmonberry Trail Rail Line Lease Agreement). These existing use agreements between
the POTB and third parties suggest that the POTB intended to retain (and continues to
retain) an interest in the easements prior to the establishment of the Salmonberry Trail,
conduct inconsistent with an intent to entirely abandon the easements. See Romanoff,
119 Fed. Cl. at 83. For these reasons, the court concludes that the plaintiffs have failed to
demonstrate under Oregon law that the POTB abandoned the broad easements at issue in
these motions.
Contrary to plaintiffs’ contention, the Oregon Supreme Court case Powers v. Coos
Bay Lumber Co., 263 P.2d 913, 943 (Or. 1953), does not demonstrate otherwise. The
plaintiffs cite Powers to support the argument that the POTB’s “decision in 2009 against
pursuing repairs of the damaged railroad in addition to the disbanding of [the OTRA] in
2014, is conduct wholly inconsistent with an intention to make further use of the
easement.” Loveridge Mot. at 8. Powers addressed multiple segments of an easement
which allowed for both railroad and road use. The railroad bed had been removed from
the line, and most of the segments had been replaced by a gravel road. The Oregon
Supreme Court held that the segments of the easements replaced by the gravel road had
not been abandoned, but those that were not part of the gravel road had been, because the
14
railroad “freely conceded” that it would “never again” use those easements. Powers, 263
P.2d at 940-43. There is no similar concession here by the POTB. Moreover, Powers,
like Wiser, recognizes that the end of rail use does not abandon an easement capable of
being used for other purposes.
Plaintiffs also argue that a holding in favor of the government would mean that
“there could never be any liability under” a theory of pre-NITU abandonment “involving
a broad easement.” Loveridge Reply at 6-7. The court disagrees. The POTB could have
abandoned its easements for all purposes prior to expressing its interest in entering into a
trail use agreement. See, e.g., Powers, 263 P.2d at 940-43. The plaintiffs in their briefing
have attempted to show by clear and convincing evidence that, prior to the actions of the
STB, the POTB had intended to do so under Oregon law. However, as discussed above,
the record does not support that argument, and in fact demonstrates the opposite.8 As a
result, the court must conclude that the easements for the deeds at issue were not
abandoned. Summary judgment in favor of the government, as a matter of law, is
therefore warranted.
8
The plaintiffs also appeared to, at oral argument, contend that the Supreme Court’s decision in
Preseault v. Interstate Commerce Comm’n, 494 U.S. 1 (1990) (“Preseault I”) supports their
position. In Preseault I, the Supreme Court upheld the constitutionality of the Trails Act under
the Commerce Clause and held that when railroad rights of way are converted to interim public
trail use under the Act, the Trails Act taking of private property cannot occur without just
compensation. Id. at 11-17; Caldwell v. United States, 391 F.3d 1226, 1228 (Fed. Cir. 2004).
However, only some rails-to-trails conversions will amount to takings, as the Federal Circuit
recognized in Preseault v. United States, 100 F.3d 1525 (Fed. Cir. 1996), and Ellamae Phillips,
564 F.3d at 1373. As explained above, the court has analyzed the deeds at issue in accordance
with the framework set out by the Federal Circuit in Ellamae Phillips, 564 F.3d at 1373, and this
analysis is not inconsistent with the general principles announced in Preseault I.
15
IV. CONCLUSION
For the foregoing reasons, plaintiffs’ motions for partial summary judgment,
Loveridge, ECF No. 115; Stimson, ECF No. 33; Albright, ECF No. 152, are DENIED
and the government’s cross motion, Loveridge, ECF No. 121; Stimson, ECF No. 37;
Albright, ECF No. 156, is GRANTED. The parties are directed to file a joint status
report in these cases by October 1, 2020 proposing further proceedings in this matter.
IT IS SO ORDERED.
s/Nancy B. Firestone
NANCY B. FIRESTONE
Senior Judge
16