Today's post is by our Pacific Legal Foundation colleague Kady Valois, writing about a recent Federal Circuit Rails-to-Trails takings case, Behrens v. United States, No. 22-1277 (Feb. 13, 2023).
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How The West Was Won: Easements!
by Kady Valois
There’s a saying that the west was won by pioneers, settlers, and adventurers.
And while that may be somewhat accurate, what’s clearer still is that the west -- at least the west we know today -- was built and developed because of railroads. We owe a lot to railroads because this nation was built by the coal engines that carried steel, food, and people to areas never previously explored by Americans. Many of these railroads were built on easements or rights-of-way on private property, subject to the fee owner's reversionary interest: should the easement ever not be used for railway purposes, the property is supposed to revert to the landowner.
And as with most things, technology advances and what once was cutting-edge or even common becomes outdated. So it seems with railroads. While they still serve a function, rail transportation is not as widespread as in decades or centuries past. But as rail lines are abandoned, in their stead has grown a movement to transform these former railway easements into public recreational trails. Congress even got behind the rails-to-trails movement, and adopted a statute that interferes with the state-law reversionary process.
Typically, when a railroad wishes to relinquish control over a railroad corridor, it must seek permission from the federal Surface Transportation Board to abandon the corridor. Interested parties may intervene and propose to "railbank" the corridor, that is, preserve it for future use. An intervenor must be willing "to assume full responsibility for [m]anaging the right-of-way; [a]ny legal liability arising out of the transfer of use of the right-of-way . . .; and [t]he payment of any and all taxes . . . [on] the right-of-way." See 49 C.F.R. § 1152.29(a).
So let's say the STB agrees, and instead of reverting to the property owner, the easement is designated for use as a recreational trail. The courts have long concluded that the issuance by the STB of a Notice of Interim Trail Use results in a taking for which the United States is liable (after all, absent the federal Rails-to-Trails Act, the easement would have reverted to the owner, and for that, the owner is owed just compensation).
Much of the rails-to-trails litigation in the Court of Federal Claims and the Federal Circuit involve questions about the scope of the grant of these easements. After all, if the federal government can show that recreational trail use is not inconsistent with the terms of the original grant of easement, then voila! ... no reversion, no taking.
That was the dispute in Behrens. The Federal Circuit examined the abandonment of a 144.3-mile corridor previously used by the St. Louis, Kansas City, and Chicago Railroad Company in the 1900s. Here, unlike the usual situation, most of the deeds conveying the easements more than a century ago "did not state a limitation of the grant to use for railroad purposes." Slip op. at 5. The successor-in-interest to the railroad sought the STB's approval to discontinue service and consummate abandonment of the easement. NITU followed, as did an agreement for the Missouri Department of Natural Resources to operate and maintain a recreational path on the easement. CFC takings claim followed.
Plaintiffs moved for summary judgment on liability, asserting that the railroad originally acquired mere easements, pursuant to Missouri law; that the railroad’s easements were limited to railroad purposes; and that the conversion of the easements for a public recreational trail was beyond the scope of easements, and thus constituted a taking. The government then cross-moved for summary judgment on the ground that the deeds granted an easement broad enough to allow for interim trail use and railbanking.
Slip op. at 6-7.
The CFC held that under a Missouri easement statute, the easements contemplated interim trail uses and thus, no taking.
The Federal Circuit disagreed. The court started with the Missouri easement statute, which gives railroads power:
[t]o take and hold such voluntary grants of real estate and other property as shall be made to it to aid in the construction, maintenance and accommodation of its railroads; but the real estate received by voluntary grant shall be held and used for the purpose of such grant only....
Slip op. at 9.
The government pointed to the statute and argued that it does not define the scope of the granted easements, and the court needed to look for the intent of the grantor as evidenced by the language of the grant. Here, the government argued (as noted above), "the deeds themselves contain no language stating a limitation of the grant to a specified purpose." Slip op. at 10.
The Federal Circuit rejected that conclusion because the Missouri Constitution states that properties taken by a railroad by eminent domain are presumed taken "for railroad purposes." See slip op. at 11 (citing Mo. Const. art. I, § 26). The Court acknowledged that state limitation by finding that the property’s acquisition for anything other than railroad use would fall outside the scope of the recorded easement. Thus, the government’s attempt to use the now defunct railroad for an interim trail or rail bank was unconstitutional – which is this author’s opinion was the right conclusion.
The only question left was whether under Missouri property law, use as a recreational trail -- for such things as walking, hiking, cycling, picnicking, frisbee playing -- are railroad purposes. (What do they think this is, New York or something?) Short answer, no. Nor is railbanking:
Under Missouri law, establishing a nature trail for the purpose of keeping the corridor intact for future rail service is not considered a railroad purpose if there is no evidence that such future use is realistic. In Boyles, the court rejected the argument that “because one of the purposes of the trail is to keep the existing corridor intact for transportation needs that may occur in the future, such as reactivated rail service, [the easement’s] proposed use [as a trail] is for railroad purposes.” Boyles, 981 S.W.2d at 649. The Boyles court found that this argument “ha[d] no merit” because “[t]he undisputed evidence, including the removal of the bridges, ties, and rail by [the railroad company], showed that no such [future railroad] use is realistic.” Id. at 649–50. The court also noted that “[t]he 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 650 (citation omitted). Thus, in Missouri, trail use with the purported but speculative purpose of preserving the right-of-way for purported but speculative purpose of preserving the right-of-way for future railroad use does not fall within the scope of an easement ranted for railroad purposes. Here, there is no evidence that future rail use is realistic.
Slip op. at 12-13.
The court concluded by holding that "the easements granted to the railroad were not broad enough to encompass interim trail use or railbanking[.]" Slip op. at 16.
Reversed and remanded.
Behrens v. United States, No. 22-1277 (Fed. Cir. Feb. 13, 2023)
