When a court of appeals opinion holding that the federal government has retained a reversionary interest in railroad rights-of-way contains the following language, that sound you hear is the cracking of smiles on appellate lawyers' faces:
Though we recognize that the Seventh Circuit, the Federal Circuit and the Court of Federal Claims have concluded that the United States did not retain any reversionary interest in these railroad rights-of-way, we are bound by our precedent.
United States v. Brandt, No. 09-8047, slip op. at 5 (10th Cir. Sep. 11, 2012). That, you see, is the court acknowledging the holy grail of Supreme Court review, the vaunted "circuit split," and the presence of a genuine disagreement in the law among the lower courts is one of the tickets to getting the Justices' -- or at least the cert pool clerk's -- attention.
Thus, the cert petition filed yesterday seeking SCOTUS review of the Tenth Circuit's unpublished opinion seems like a good candidate and a case to watch, even though it involves a less-than-flashy area of the law, the conversion of abandoned railway easements into public recreational trails.
The issue is whether the federal government retained an "implied reversionary interest" when back in the day it issued land patents, or whether these patents were subject only to a railway right-of-way easement. The difference is that easements may be extinguished, while reversionary interests cannot. In this case, the railway abandoned its use, after which the federal government instituted a quiet title action in federal court asserting it owned the right of way, and that it did not revert to Brandt. So dust off your old Property hornbooks and follow along.
Let's start with the Question Presented, which details the necessary background:
This case involves the General Railroad Right-of-Way Act of 1875 ("1875 Act"), under which thousands of miles of rights-of-way exist across the United States. In Great Northern Ry. Co. v. United States, 315 U.S. 262 (1942), this Court held that 1875 Act rights-of-way are easements and not limited fees with an implied reversionary interest. Based upon the 1875 Act and this Court’s decisions, the Federal and Seventh Circuits have concluded that the United States did not retain an implied reversionary interest in 1875 Act rights-of-way after the underlying lands were patented into private ownership. In this case, the Tenth Circuit reached the opposite conclusion and acknowledged that its decision would continue a circuit split. The question presented is:Did the United States retain an implied reversionary interest in 1875 Act rights-of-way after the underlying lands were patented into private ownership?
As noted above, the Tenth Circuit held that it did. Its opinion didn't really analyze Brandt's claims, but simply relied on circuit precedent which held that these were not easements. Marshall v. Chicago & Northwestern Transportation Co., 31 F.3d 1028 (10th Cir. 1994).
The Seventh Circuit, in Samuel C. Johnson 1988 Trust v. Bayfield County, 649 F.3d 799 (7th Cir. 2011) (Posner, J.), rejected Marshall's reasoning, and further highlighted the circuit split:
Marshall v. Chicago & Northwestern Transportation Co., 31 F.3d 1028, 1031 (10th Cir.1994), holds, it is true, that the 1875 Act created a reversionary interest in the federal government, in which event a right of way abandoned by a railroad would revert to the federal government and so be transferable to the County. But Hash v. United States, 403 F.3d 1308, 1316-17 (Fed.Cir.2005), and Beres v. United States, 64 Fed.Cl. 403, 425-28 (Fed.Ct. Cl.2005), are to the contrary, and, though criticized in Darwin P. Roberts, "The Legal History of Federally Granted Railroad Rights-of-Way and the Myth of Congress's `1871 Shift,'" 82 U. Colo. L.Rev. 85, 150-64 (2011), make better sense than Marshall, as well as being supported by the characterization in Great Northern Ry. v. United States, 315 U.S. 262, 271-79, 62 S.Ct. 529, 86 L.Ed. 836 (1942), of the rights of way created under the 1875 Act as "easements." The Act does not hint at a reversionary interest, and who searching the chain of title of a lot never owned by a railroad would suspect a lurking governmental right so unsettling to the security of private property rights?
Apparently, there are thousands of property owners across the nation that could be affected, and the rule of law applicable depends on where a parcel is located. Besides, why pay for and take all these lapsed right-of-way interests if you can simply declare that they never belonged to the owners at all?