As we predicted it would after oral argument, today the U.S. Supreme Court ruled in the property owner's favor in Marvin M. Brandt Revocable Trust v. United States, No.12-1173 (Mar. 10, 2014). Chief Justice Roberts wrote for the entire Court less Justice Sotomayor, who filed a solo dissent. SCOUTSblog posts a summary of the opinon here ("Victory - and money - for landowners").
As you might recall, the issue in the case was whether the federal government retained an "implied reversionary interest" when it issued these patents, or whether these grants were subject only to a railroad 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 the property owner. As the opinion stated it:
This dispute turns on the nature of the interest the United States conveyed to the LHP&P in 1908 pursuant to the 1875 Act. Brandt contends that the right of way granted under the 1875 Act was an easement, so that when the railroad abandoned it, the underlying land (Brandt’s Fox Park parcel) simply became unburdened of the easement. The Government does not dispute that easements normally work this way, but maintains that the 1875 Act granted the railroads something more than an easement, reserving an implied reversionary interest in that something more to the United States.
Slip op. at 8.
The Court concluded that it was an easement, "in large part because it won when it argued the opposite before this Court more than 70 years ago, in the case of Great Northern Railway Co. v. United States, 315 U. S. 262 (1942)."
The Court then benchslapped the SG's argument that Great Northern was inapplicable: "[c]ontrary to this straightforward conclusion, the Government now tells us that Great Northern did not really mean what it said." Slip op. at 12. The next few pages were spent deconstructing that argument, concluding on pages 16 and 17 that the argument is filled with "irony," in that both Congress and the Government did an "about-face" and tried to change the law and the arguments, but "[t]hat policy shift cannot operate to create an interest in land that the Government had already given away." Slip op. at 17. The Court concluded:
More than 70 years ago, the Government argued before this Court that a right of way granted under the 1875 Act was a simple easement. The Court was persuaded, and so ruled. Now the Government argues that such a right of way is tantamount to a limited fee with an implied reversionary interest. We decline to endorse such a stark change in position, especially given "the special need for certainty and predictability where land titles are concerned." Leo Sheep Co., supra, at 687.
Slip op. 17. More on that point from lawprof Josh Blackman.
Now search as you might, today's majority opinion does not contain the words "takings" or "rails to trails." That's because neither was directly at issue. But make no mistake, this quiet title action was designed to deal with landowners who sued to recover just compensation when land that was supposed to come back to them after a railroad abandoned its operations was instead converted to recreational trails use. Thus, if successful, this case would have undermined an entire class of rails-to-trails takings cases in the Court of Federal Claims and Federal Circuit by legally wiping out the property interests that the owners claim was taken, a point we made in the amicus brief we filed in the case in support of the petitioners on cert and on the merits.
Unable to prevail on a variety of theories in rails-to-trails takings cases in the Court of Federal Claims (CFC) and the Federal Circuit for more than a decade, the Government appears to have switched tracks. Instead of continuing its fruitless frontal attacks on these takings claims—attacks which the courts have repeatedly rebuffed—the Government in this case has sought to undermine the very notion of property ownership by redefining the rights of way granted for railway uses under the 1875 Act from easements that are extinguished when no longer used for a railroad, to "implied reversionary interests."
The only allusion to those issues was in Justice Sotomayor' solo dissent, where she concluded:
Since 1903, this Court has held that rights of way were granted to railroads with an implied possibility of reverter to the United States. Regardless of whether these rights of way are labeled “easements” or “fees,” nothing in Great Northern overruled that conclusion. By changing course today, the Court undermines the legality of thousands of miles of former rights of way that the public now enjoys as means of transportation and recreation. And lawsuits challenging the conversion of former rails to recreational trails alone may well cost American taxpayers hundreds of millions of dollars.
Dissent at 8 (emphasis added).
Oh, that pesky Fifth Amendment.
Marvin M. Brandt Revocable Trust v. United States, No 12-1173 (Mar. 10, 2014)
