Fed Cir Amicus Brief: Regulatory v. Physical Takes In Rails-To-Trails - No En Banc Review To Overturn Settled Precedent
You rails-to-trails and takings mavens all know the drill in those cases: rail easement stops being used for rail, bikers and runners want a recreational path, the federal Surface Transportation Board issues a Notice of Interim Trail Use (they say "interim" because of the fiction that they are just "railbanking" and someday when we want the iron horse to rule again, the bike path may be converted back into a rail line), which under the U.S. Supreme Court's ruling in Preseault v. Interstate Commerce Comm'n, 494 U.S. 1 (1990), triggers the obligation of the federal government to pay just compensation for the taking of the property owner's "reversionary" interest.
In other words, the owners across whose land the railroad easements are located were supposed to get that land back if those easements stopped being used for railroads. When they get converted instead into public recreational trails, there's a taking. Now go figure out how much the lost reversionary interest is worth.
At least that's the way it is supposed to work. But as you readers who follow this issue know, it really doesn't. Instead of focusing on the amount of compensation owed for the taking, many rails-to-trails cases are resisted tooth and nail by the government, even when liability under the Fifth Amendment is clear. We've detailed the strategies employed in those cases, most recently in our amicus brief in the Brandt case, in which the U.S. Supreme Court eventually came down hard on those tactics. See pages 5-11 of our brief ("Derailing 1875 Act Takings Cases" for details).
Well here's the latest chapter in that saga. In Caquelin v United States, No. 14-37L (Fed. Cl. June 17, 2016), the Court of Federal Claims followed the established SCOTUS and Federal Circuit precedent and held that yes, the issuance of the NITU by the STB was a taking. But then later, the STB backed away and terminated the NITU. Which meant that all was right and the property owners got their reversionary interests back. Except for the time in which the NITU was active. The CFC held there wasn't a permanent taking, of course, but instead determined that there had been a temporary taking. So far, so good.
Eventually, the owner proved that the compensation owed for the temporary deprivation of its property was a whopping $900 for the nine month cloud on their rights. (That wasn't all, because don't forget in rails-to-trails cases, there's the possibility of fee recovery under the Equal Access to Justice Act.) But still, $900. You'd think at that point, the government would just pay up and move on. But no, it appealed.
It acknowledged that the Federal Circuit's precedents were binding -- four cases in which that court fleshed out the details which the Supreme Court left unresolved in Preseault -- and that the CFC could do nothing but follow those precedents. And instead of appealing to a panel of the Federal Circuit, the government has taken the unusual step of asking for en banc review by the entire court to overturn those four cases. Among other things, it argues that rails-to-trails cases aren't really physical takings subject to bright line categorical rules, but rather regulatory takings subject only to an ad hoc inquiry that no one really understands (Penn Central, anyone?).
We filed an amicus brief in support of the property owner/appellees asking the Federal Circuit to reject those arguments, and reaffirm the four decisions under attack. We won't spell out the brief, since you can download and read it yourself if you are so inclined. The short story is that the Federal Circuit shouldn't put up with what in our view is a frontal attack on rails-to-trails takings law.
We'll put up the other briefs in the case in a separate post shortly.
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