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IN THE U NITED ST ATES CO URT OF FEDER AL CLA IMS _______________________________________ THE ELLAMAE PHILLIPS COMPANY, a Colorado Registered Limited Liability Partnership, Plaintiff, -vs) ) ) ) ) ) ) ) ) ) ) )

No. 04-1544 L Honorable Lawrence M . Baskir, Judge

UNITED STATES OF AMERICA, Defenda nt. ________________________________________)

PLAINTIFF'S RESPONSE MEMORANDUM TO THIS COU RT'S ORDE R OF M ARCH 15, 2007

GEORGE M . ALLEN 206A S ociety Drive Telluride CO 81434 Telephone: 970-369-1000 Facsimile: 970-369-1009 Cellular: 970-260-3895 Email: [email protected] Counsel for Pla intiff

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TABLE OF CONTENTS Issue No. 1 What is the proper reading of the final paragraph of the Federal Circuit's discussion of the Category 1 landowners? . . . . . . . . . . . . . . . . . . 2 Issue No. 2 If the paragraph is ambiguous as to the issues of abandonment, scope of the easement and liability under the Takings clause, wha t are this C ourt' s op tions in light of p rinciples of stare decisis and the rec ent decisions of Magistra te Judge W illiams upon remand of the Hash case (Hash v. United States, N o. CV-99-324-S-MHW, 2007 U.S. Dist. LEXIS 15539 (D. Idaho 2007)) and Judge Hewitt in Blendu v. United States, _ Fed . Cl. _, 200 7 WL 59 4921 (Fed. Cl. 2007)? . . . . . . . . . . . . . . . . . . . . . 9 First Source: The Ma in Bod y of Discus sion o f Catego ry 1 Land in Hash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Second Sourc e: Briefing Already Before This Court . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Third Sourc e: Principles of Stare D ecisis and Res Ju dicata . . . . . . . . . . . . . . . . . . . . . . . 14 Issue No. 3 If the p aragraph is una mbiguo us as to the issues of abandonment, s cope of the ea sement and liability under
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the Takings c lause, w hat are this C ourt's op tions in light of principles of stare decisis and the re cent decisions of Magistra te Judge W illiams and Judge He witt? . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Certificate of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Appe ndix 1 Wright, Miller & Cooper , Federal Practice and Pro cedure, §4423 Appe ndix 2 Surface Transpo rtation Board De cision AB-878-0, City of Peoria and the Village of Peoria Heights, IL­Adverse Discontinuance­Pioneer Industrial Railway Company. (August 10, 2005)

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TABLE OF AUTHORITIES Cases Chicago & Nor th Western Tran sp. Co. v. K alo Brick & Tile Co., 450 U.S. 311 (1981) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Great Northern R. Co. v. United States, 315 U.S. 262 (1942) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Hash v. United States, 403 F.3d 1308 (Fed. Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim Hastings v. Whitney, 132 U.S. 357, 10 S.Ct. 112, 33 L.Ed. 363 (1889) . . . . . . . . . . . . . . . . . . . . . . . . 10 Hayfield Northern R. Co. v. Chicago & North Western Transp. Co., 467 U.S. 622 (1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Leo Sheep Co. v. United States, 440 U. S. 668, 9 9 S.Ct. 1 403, 59 L.E d.2d 677 (1979) . . . . . . . . . . . . . . . 10, 12, 20 (Modern Handcraft, Inc.­Abandonment in Jackson County, Mo., 363 I.C.C. 969, 1981 WL 22670 (I.C.C.) (Aug. 19, 1981) . . . . . . . . . . . . . . . . . . 19 Phillips Co. v. Denv er & Rio Grande W estern R. Co ., 97 F.3d 1375 (Tenth Cir. 1996), cert. denied, 521 U.S. 1104 (1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,8 Phillips Co. v. Denv er & Rio Grande W estern R. Co ., 902 F. Supp. 1310 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Preseault v. Interstate C ommer ce Com m'n. 494 U.S. 1 (1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,5,6,7, 9

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Swendig v. Washington Water Power Co., 265 U.S. 322, 329, 331, 44 S.Ct. 496, 68 L.Ed. 1036 (1924) . . . . . . . . . . . . . 12, 13 United States v. Schurz, 102 U.S. 378, 397, 26 L.Ed. 167 (1880) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Watt v. Western Nuclear, Inc., 462 U.S. 36, 49 n. 9, 103 S.Ct. 2218, 76 L.Ed.2d 400 (1983) . . . . . . . . . . . . . . . 11 Wilcox v. Jackson, 13 Pet. 498, 10 L.Ed. 264 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Witherspoon v. Duncan, 4 Wall. 210, 219, 18 L.Ed. 339 (1866) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Statutes General Railway Right of Way Act of 1875 (18 Stat. 482) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Interstate Commerce Commission Termination Act of 1995 (ICCTA) (Public Law 104-88) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 16 U.S.C. §1247(d) . . . . . . . . . . . . . . . . . . . . . . . passim (complete text at 4 and 5) Texts a nd Other Ma terials H. Rep. No. 4477, 59th Cong., 1st Sess. p. 2 (Ser. No. 4908) . . . . . . . . . . . . . . . 13 King, Rev. Martin Luther, Jr., Colloquy, March, 1965, quoting Theodore Parker . . . . . . . . . . . . . . . . . . . . . . . . 22 Wright, Miller & Cooper , Federal Practice and Pro cedure, §4423 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15, 16

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IN THE U NITED ST ATES CO URT OF FEDER AL CLA IMS _______________________________________ THE ELLAMAE PHILLIPS COMPANY, a Colorado Registered Limited Liability Partnership, Plaintiff, -vs) ) ) ) ) ) ) ) ) ) ) )

No. 04-1544 L Honorable Lawrence M . Baskir, Judge

UNITED STATES OF AMERICA, Defenda nt. ________________________________________)

PLAINTIFF'S RESPONSE MEMORANDUM TO THIS COU RT' ORDE R OF M ARCH 15, 2007 Plaintiff submits this Memorandum in response to this Court's March 15, 2007 Order. In the March 15, 2007 Order, this Court propounded three issues. This Court's three is sues relate to the mandate of the Fede ral C ircuit in Hash v. United States, 403 F.3 d 1308 (Fed. C ir. 2005), w here Judge Pauline Newman wrote, in the final paragraph (hereafter, "Final Paragraph" or "the Final Paragraph"), dealing with what the Hash cas e styled "C ategory 1 land:" We conclude that the land of Category 1 is owned in fee by the landowners,

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subject to the railw ay ease ment. 1 The district court's contrary decision is reversed. On the railway's abandonment of its right-of-way these owners were disencumbered of the railway easement, and upon conversion of this land to a public trail, these owners' property interests were taken for public use, in accordance with the principles set forth in the Preseault cases. On remand the district court shall determ ine just c ompensation on the cond itions that apply to these landowners. We now take up the three issues prop ounded by this Court in its March 15, 2007 O rder. Issue No. 1 What is the proper reading of the final paragraph of the Fed eral Circuit's discussion of the Category 1 landowners? The proper reading o f the Final Paragrap h is that in its 20 05 d ecis ion in Hash, the Federal Circuit has ende d any further dispute as to the issue o f whether a rails-to-trails convers ion of an 1875 Act right o f way is, or is not, a co mpensable taking under the Takings Clause of the Fifth Amendment to the United States
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Hash Catego ry 1 land wa s that prop erty which w as acq uired by the landowners by homestead patent and over which railroad rights of way had been granted to railroad companies under the General Railway Right of Way Act of 1875 (1 8 Stat. 4 82) and w hich railroad rights of wa y had bee n converted to recreational trails pursuant to 16 U.S.C. §1247(d). This case was stayed for most of the Year 2005, awaiting the Federal Circuit's Hash decision. The property of the Ellamae Phillips comp any at issue in this ca se fits exactly into the Hash Category 1 template.
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Constitution. It is a compensable taking. The plain meaning of the Final Paragrap h is that since the re versionary interes t in the land is the prop erty of the private landowner (invariably a succes sor in interest to a Homeste ad Act pa tentee), and since the conversion to a recreational trail under 16 U.S.C. §1247(d) constitutes w hat Judge N ewman, writing for the Circuit in Hash, styled " conversion of this land to a public trail," the public trail conversion is a compens able taking. In its briefing of the Court's Issue No. 1, the Department of Justice has focused e xclusively on the phras e of Judge N ewman' s opinion which include s the word a bandonme nt, and, indee d, the entire thrus t of the Gove rnment's argume nt against liability in this action is constructed on a contention that the issue of whe ther or no t there ha s be en an abandonme nt is a n issue still to b e de termined in this case. The Government furthe r argued that Judge N ewman a nd the Federal Circuit dropped the ball in making a segue from holding that the 1875 Act reversionary interest wa s a privately-ow ned land interes t to a conc lusion that since the reversion w as private p roperty, the re must be liability. The J ustice De partment contends that there is injustice in this holding by the Circuit beca use it has, the
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Government claims, deprived the United States of the opportunity to argue that rails to trails conversions of 1875 Act rights of way are not abandonments. This writer has said several times, both in oral argument and in written submissions, that the question of abandonment is not critical to our resolution of this c ase . I think I have bee n misundersto od b eca use I have not mad e sufficiently clear explanations of the reason why abandonment is not our concern. Here is why abandonment is not the issue the United States wants it to be and why a bandonme nt is not a centra l concern in the jurisprud ence de aling with the 1875 Act: Aband onment is not a c oncern be cause the Congres s, in enacting rails-to-trails (16 U.S.C. §1247(d)), legislated the abandonment question out of judicial reach. Let us look at the actual language of the central statutory clause of rails-to-trails, viz., 16 U.S .C. §12 47(d): 16 U.S.C. §1247 (d). Interim use of railroad rights-of-way The Secretary of Transportation, the Chairman of the Surface Transportation Board, and the Secretary of the Interior, in administering the Railroad Revitalization and Regulatory Reform Act of 1976 [45 U.S.C. 801 et seq.], shall encourage State and local agencies and private interests to establish appropriate trails using the provisions of such programs. Consistent with the purposes of that Act, and in furtherance of
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the national policy to preserve established railroad rights-of-way for future reactivation of rail service, to protect rail transportation corridors, and to encourage energy efficient transportation use, in the case of interim use of any established railroad rights-of-way pursuant to donation, transfer, lease, sale, or otherwise in a manner c onsistent with this chapter, if such interim use is subject to restoration or reconstruction for railroad purpose s, such interim use shall not be treated, for purposes of any law or rule of law, as an abandonment of the use of such rights-of-way for railroad purposes. If a State, political subdivision, or qualified private organization is prepared to assume full responsibility for management of such rights-of-way and for any legal liability arising out of such transfer or use, and for the payment of any and all taxes that may be levied or assessed against such rights-of-way, then the Board shall impose such terms and conditions as a requirement of any transfer or conveyance for interim use in a manner consistent with this chapter, and shall not permit abandonment or discontinuance inconsistent or disruptive of such use. (Emphasis Adde d). At page 32 o f our initial briefing on the cross motions for Summary Judgment now before this C ourt, filed in Septemb er, 200 6, we quoted a t some length from Justice Sandra Day O' Connor's c oncurring opinion in Preseault v. Interstate Com merce C omm'n. 494 U.S. 1 (1990), where Justice O'Connor

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specifically referenced 16 U. S.C. §1 247(d). 2

A short passage from Justice O'Connor's Presea ult concurrence illuminates the point that the interplay between 16 U.S.C. §1247(d) of rails-totrails with the Tak ings Clause o f the Fifth Amendment wa s directly before the Supreme C ourt in Presea ult: "As the Court acknowledges, ante at 8-9, 15-16, state law creates and defines the scope of the reversionary or other real property interests affected by the IC C's.actions pursuant to Section 208 of the National Trails System Act Ame ndments of 1983, 16 U.S.C . §§ 1247(d)." O,Connor, J. concurring in Preseault, supra, 494 U.S.1, 20. Justice William Brennan's opinion for the Presea ult court made it clear beyond credible contention to the c ontrary that it was a § 124 7(d) rails -to-trails conversion which the Supreme Court was finding to be potentially compensable as a Fifth Amendment tak ing: Section 8(d) of the amended Trails A ct provides that interim trail use "shall not be treated, for any purposes of any law or rule of law, as an abandonment of the use of such rights-of-way for railroad purposes." 16 U.S.C. 1247(d). This language gives rise to a takings question in the typical rails-to-trails case because many railroads do not own their rights-of-way outright but rather hold them under easem ents or similar property interests. While the terms of these easem ents and a pplicable state law vary, frequently the easem ents provide that the property reverts to the abutting landowner upon abandonment of rail operations. State law generally governs the disposition of reversionary interests, subject of course to the ICC's "exclusiv e and plen ary" jurisdictio n to regulate abandonments, Chicago & North Western Transp. Co. v. Kalo Brick & Tile Co., 450 U.S. 311, 321 (1981), and to impose conditions affecting postabandonment use of the property. See Hayfield Northern R. Co. v. Chicago & North Western Transp. Co., 467 U.S. 622, 633 (1984). By deemin g interim trail use to be like discontinuance rather than abandonment, see n. 3, supra, Congress prev ented prop erty interests from reverting under state law: Brennan, J., for the Supreme Court, in Preseault, supra, 494 U.S.1, 8.
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The point w hich is missed entirely by the United Sta tes in its briefing of the issue of the me aning to be give n to J udge Newma n's final C ategory 1 pa ragraph is that abandonment is not our co ncern. The Co ngress, by its enactment of §1 247(d), disposed of the abandonment issue. Thus, by Congressional enactment, rails-totrials conversions under §1247(d) conversions are not abandonments. This writer

regrets not ha ving made a more fulsome explanation o f that point in oral argument when I said that determining the issue of abandonment is not necessary to our task. In retrospect, there would have been greater clarity if I had said that not only is determination of the question of aba ndonment not necess ary, but that it is not p oss ible given the spec ific language of § 124 7(d), as the Supreme Court plainly held in Preseault, supra. In litigation arising from the very right of way at issue in this case, the Tenth Circuit had already affirmed bo th the District C ourt of Colora do and the Intersta te C omme rce Commiss ion (ICC ) in holding that a bandonment is the sole regulatory province of the ICC. Phillips Co. v. Denver & Rio Grande Western R. Co., 97 F.3d 1375 (Tenth Cir. 1996), cert. denied, 521 U.S. 1104 (1997) ,

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affirming Phillips Co. v. D enver & Rio Gran de Western R. C o., 902 F. Supp. 1310 (D. Colo. 1995). Under the terms of the Interstate Commerce Commission Termination Act of 1995 (ICCTA) (Public Law 104-88), the ICC competence for determining aband onment issues is now in the IC C's s uccess or agency, the Surface Transportation Board. Our concern lies not in the abandonment clause of Judge Newman's Final Paragrap h, but rather in the follow ing clause. Let us return to examine the relevant wo rds from the releva nt sentence of the Final Paragrap h: * * * On the railway's abandonment of its right-of-way these owners were disencumbered of the railway easem ent, and upon conversion of this land to a public trail, these owners' property interests were taken for public use . . . (Emphasis add ed). The crucial focus for this Court, in de termining Issue No . 1 ­ w hat is the proper re ading of the Final Paragra ph in Judge N ewman' s 2005 opinion in Hash ­ (e.g., whether or not the land at issue in this case fits into the Hash temp late), is determination of the question of conversion of the Phillips Company land to a public trail. On that p oint ­ whe ther there has be en conve rsion to a public tra il ­ the re is

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no dispute w hatever. E veryone agre es there ha s been a trail conversion. 3 Since there ha s been a trail conversion, a nd since the iss ue of aband onment was legislated out of relevance by the Congress when it passed 16 U.S .C. §1247(d), and since the Presea ult court found that §1247 (d) conversions w ere compens able takings, the Federa l Circuit's dispo sition of Catego ry 1 land in Hash has left nothing more for this Court to do other than deny the United States' motion for summary judgment and grant the Plaintiff's Motion for Summary Judgment on liability. Issue No. 2 If the paragraph is ambiguous as to the issues of abandonment, scope of the easement and liability under the Takings clause, what are this Court's options in light of principles of stare decisis and the recent decisions of Magistrate Judge Williams upon remand of the Hash case (Hash v. United States, No. CV99-324-S-MHW, 2007 U.S. Dist. LEXIS 15539 (D. Idaho 2007)) and Judge Hewitt in Blendu v. United States, _ Fed. Cl. _, 2007 WL 594921 (Fed. Cl. 2007)? For the reas ons state d in respons e to Issue No. 1 above, we since rely believe there is no ambiguity in Judge Newman's Final Paragraph. But even if this Court

Paragrap hs 14 and 15 of Plaintiff's Comp laint allege conversion o f the former D&RGW right of way on the Phillips property to a trail and construction of a bikeway on the former right of way as it crosses the Phillips property. Those paragraphs were admitted by the United States for purposes of this Court's consideration of the pending cross motions for Summary Judgment.
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were to find that paragraph ambiguous, there are three separate sources to which we ca n turn to reconc ile the Final Paragraph w ith both stare d ecisis and the rec ent decisions o f Idaho's M agistrate Jud ge Williams and this C ourt's Jud ge Hew itt. First S ource: the M ain Body of Disc ussion of C ategory 1 Land in Hash The first s ourc e is the broader trea tment of the 19 80's rails-to-trails legislation which preceded Judge N ewman's Final Paragraph. Although the government stresses that national policy today favors government ownership of land for environmental and conservation purposes, the property rights of these early landowners are governed by the law in effect at the time they acquired their land. See Leo Sheep Co. v. United States, 440 U.S. 668, 687-88, 99 S.Ct. 1403, 59 L.Ed.2d 677 (1979) ("This Court has traditionally recognized the special need for certainty and predictability where land titles are concerned, and we are unwilling to upset settled expectations to accommodate some ill-defined power to construct public thoroughfares without compensation.") (footnote omitted); Hastings v. Whitney, 132 U.S. 357, 10 S.Ct. 112, 33 L.Ed. 363 (1889) ("The doctrine first announced in Wilcox v. Jac kson, 13 Pet. 498, 10 L.Ed. 264, that a tract lawfully appropriated to any purpose becomes thereafter severed from the mass of public lands, and that no subsequent law or proclam ation will be cons trued to embrace it, or to operate upon it, although no exception be made of it, has been reaffirmed and applied by this court in s uch a great numb er and variety of cases that it may now be regarded as one of the fundamental principles underlying the land system of this country."). Hash, sup ra, 403 F.3d 1308, 1315.

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***

* * * [T]he [Supreme] Court has consistently preserved the integrity of the land grant patent, in its review and application of the statutes before and after the 1875 Act. Throughout its resolution of various disputes, Page 1316 the [Supreme] Court has required that unless a property interest was expressly reserved by the government, whether in the patent grant or by statute or regulation then in effect, the disposition of the land was in fee simple. For example, in Watt v. Western Nuclear, Inc., 462 U.S. 36, 49 n. 9, 103 S.Ct. 2218, 76 L.Ed.2d 400 (1983) the Court applied this rule to mineral rights and noted that: If land was erroneously classified as non-mineral and conveyed under a land-grant statute, the patentee received title to the entire land, including any subsequently discovered minerals. Absent proof of fraud, the Government had no rec ourse on ce title passed. [Citations omitted.] In Leo Sheep Co.[Leo She ep Co. v. U nited States, 440 U.S. 668 (1979)] the [Supreme] Court construed a homestead grant in light of a 1862 railway statute, and held that rights would not be reserved to the government by "divining some 'implicit' congressional intent." The Court stated: The Government does not claim that there is any express reservation of an easem ent in the Union Pacific A ct that would authorize the construction of a
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public road on the Leo She ep Co.'s property. S ection 3 of the 1862 A ct sets out a few specific reservations to the "checkerboard" grant. The grant was not to include land "sold, reserved, or otherwise disposed of by the United States," such as land to which there were homestead claims. Mineral lands were also excepted from the operation of the Act. Given the existence of such explicit exceptions, this Court has in the past refused to add to this list by divining som e "implicit" congressional intent. [Citations omitted.] 440 U.S. at 678-79, 99 S.Ct. 1403. The [Supreme] Court's precedent has consistently held that absent an explicit reserv ation of an interest in land, suc h would n ot be implied. See, e.g., Swendig v. W ashington Water Powe r Co., 265 U .S. 322, 329, 331, 44 S .Ct. 496, 68 L.Ed. 1036 (1924) ("Appellants contend, and it is true as a general rule, that when, conformably to the laws, entry is made and certificate given, the land covered ceased to be a part of the public lands ( Witherspoon v. Duncan, 4 Wall. 210, 219, 18 L.Ed. 339 (1866)), and that, when a patent issues in accordance with governing statutes, all title and control of the land passes from the United States," subject to express provisions of regulations then in effect.) (citations omitted); United States v. Schurz, 102 U.S. 378, 397, 26 L.Ed. 167 (1880) ("We are of opinion that when, upon the decision of the proper office that the citizen has become entitled to a patent for a portion of the public lands, such a patent made out in that office is signed by the President, sealed with the seal of the General Land-Office, countersigned by the recorder of the land-office, and duly recorded in the record-book kept for that purpose, it becomes a solemn public act of the government of the United States, and needs no further delivery or other authentication to make it perfect and valid. In such case the title to the land conveyed passes by matter
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of record to the grantee, and the delivery which is required when a de ed is made by a private individual is not necessary to give effect to the granting clause of the instrument."). The nature of the transfer of a right-of-way to a railroad under the 1875 Act, and the patenting to settlers of the land subject to the right-of-way, has been extensively explored. In Great Northern, 315 U.S. at 271, 62 S.Ct. 529, the Court observed that Section 4 of the 1875 Act, which provided that when the underlying lands were disposed of by the United Page 1317 States they would remain subject to the right-of-way, was not consistent with the railroad's theory that it owned the mineral rights underlying the right-of-way. The Court cited the congressional explanation of the 1906 statute that: " 'Under the present law whenever the railroad passes through a tract of public land the entire tract is patented to the settler or entryman, subject only to this easem ent.' H. Rep. No. 4477, 59th Cong., 1st Ses s. p. 2 (Ser. No. 4908)." 315 U.S. at 277, 62 S.Ct. 529. The text of the 1875 Act, and the omission of any reservation or retention or reversion of the fee by the United States, negate the now-asserted intention on the part of the United States to retain ownership of the lands underlying railway easements when the public lands were disposed of. We have been directed to no suggestion, in any land patent, deed, statute, regulation, or legislative history, that can reasonably be construed to mean that the United States silently retained the fee to the land traversed by the right-of-way, when the United States granted that land to homesteaders.
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Hash, supra, 403 F.3d, 1308, 1 315-1317. Second Source: Briefing Already Before This Court The sec ond source is the exte nsive briefing alread y before this C ourt in which we have addressed in voluminous detail the context of the 1875 Act. In that briefing we have described (without any rebuttal or contention to the contrary by the United S tates) the c ircumstances which obta ined in 1875, which included the 1872 C redit Mo bilier Scandal, the unanimity of contempora neous N ineteenth Century scholarly writing to the e ffect that eas ements w ere to be narrow ly construed and that a new use of an easement gave rise to a new right of compens ation for the ow ner of the servient e state, and the narrow language of the 1875 A ct itself, which res tricted the 18 75 grants to "railroad c ompanies. " The latter point wa s amplified by the narro wness of corpora te charters in the Nineteenth Century, so that the Congress's use of the term "railroad companies" was se en as restric ting the use of the ease ment to a particula r type of c ompany a ble solely to engage in construction and operation of railroads. Third Source: Principles of Stare D ecisis and Res J udicata Review of textual authority leaves no doubt tha t the principles of issue

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preclusion and the well-established federal case law relating to the doctrines of stare d ecisis and res judicata light our way in reconciling Judge Newman's Final Paragrap h with the rece nt decisions b y Judges W illiams and Hewitt and the governing stare d ecisis and res judicata principles which constrain this Court's disposition of the p ending cross motions for summary jud gment. In Wright, Miller & Cooper , Federal Practice and Pro cedure, §4423, the re is set forth an extensive discussion of the way in which issue preclusion operates to enforc e prior orders involving the s ame parties and identical, or substantially identical, facts. The entirety of §4423 is attached to this filing as Appendix 1. The main inquiry required o f this Court, be fore application o f the requirements o f issue preclusion d escribed in Wright, Miller & Cooper , is an inquiry into whether or no t the decision s ought to be e nforced to invok e issue preclusion (the 2 005 de cision of the Fede ral Circuit in Hash) is one where there was a full and fair opportunity to litigate the issue. As both Wright, Miller & Cooper and the ca ses there in cited explain, the question for this Court is not one of specific briefing of particular motions, nor even one of competence of particular courts or fora, but one of whether the prior decisions sought to be invoked arose from pleadings and facts which presented
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identical or substantially identical issues to those in this litigation. The claim that the d ecision sought to be utilized for purpo ses of issue preclusion may have some procedural shortcoming, or that the decision is flawed by having been based on briefing or argument of less than all of the issues which might have been briefed or argued is of no consequence if, as Wright, Miller & Cooper makes c lear, there w as a full and fair oppo rtunity to litigate all of the issues. Thus our concern is not one of the quality or contours of the briefing before the Federa l Circuit in its 2005 de cision regarding C ategory 1 land in Hash, but rather is one of whether the Hash cas e was a cas e in w hich the partie s had a full and fair opportunity to litigate the issue now sought to be precluded. The key word in carrying out the analysis is "opportunity." That the United States may have lost the Hash case be fore the Government trotted o ut every conceivable defense is not relevant to whether the Federal Circuit's 2005 Hash decision is an adjudication of the issues now before this Court. If the Hash case w as one in which there w as a full and fair oppor tunity to litigate every issue ­ a s it manifestly was, since it involved the same necess ary party, the United States, and the identical necessary issue, the 1875 Act rights of
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way ­ the n the requirements for implementation of issue p reclusion are p resent and the principle of stare d ecisis commands that this Court follow Circuit law, as laid out in Hash, and deny the Governme nt's summary jud gment motion and gra nt the Plaintiff's motion for summary judgment on liability. That both J udge W illiams and Judge He witt have rec ognized the a bove principles gives comfort that the result we advocate is the obvious right result. But even if there were no prior decisions from other judges, the principle would be the same and the application of the doc trines of stare decisis and res judicata (or estopp el by judgment) w ould have the s ame issue p reclusive effect. Issue No. 3 If the paragraph is unambiguous as to the issues of abandonment, scope of the ease ment and liability under the T akings clause, w hat are this Court's options in light of principles of stare decisis and the recent decisions of Magistrate Judge Williams and Judge Hewitt? This Court's only option, in light of the unambiguous nature of the Final Paragraph, is to order that this case proceed to a determination of damages. Having said that w e are now ready to a ddress damages , it is important to frame the damages issue properly. The briefing of the United States is calculated to try to limit the scope of damages, b ase d on a subtle and clever suggestion that the measure of da mage is
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the differential value of the land as impacted by the existence of the bikeway, and as though the perpetual burden of a railroad right of way easement is a given. The reality, how ever, is that the re was a filing of an abandonment procee ding in the Surface Tra nsportation B oard, a s alleged in para graphs 13 and 14 of the initial Complaint. T he Board then took the next inevitable step and issued a Notice of Interim Trail Use, following the identical procedural course of the Hash case. But even if there had been no rails-to-trails conversion, the Phillips Company would have recovered the right of way and enjoyed the reversion because rail operations had ceased at least several decades before this case was filed. Since rail opera tions had ce ased, the principles of ad verse ab andonment, recognized by the Tenth C ircuit in its 1996 dec ision in Phillips Co. v. Denver & Rio Grande Western R. C o., 97 F.3d 1375 (Tenth Cir. 1996), cert. denied, 521 U.S. 1104 (1997) , would have come into play. Attached to this submission as Appendix 2 is the August 10, 2005 decision of the Surface Transpo rtation Board in its case AB -878-0, City of Peoria and the Village of Peoria Heights, IL­Adverse Discontinuance­Pioneer Industrial Railway Company.
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The STB decision in the Peoria adverse abandonment matter, supra, is confirmation of the continuing vitality of the principles of ad verse ab andonment jurisprudence laid down in the Interstate Commerce Commission's leading case on adverse abandonment, the Mode rn Ha ndcra ft case c ited by the Te nth Circuit in its 1996 Phillips decision, supra 4. (Mode rn Ha ndcra ft, Inc.--Ab andon ment in Jackson County, Mo., 363 I.C .C. 969 , 1981 W L 22670 (I.C .C.) (Aug. 19, 1 981)) As the Peoria STB dec ision teaches, S TB a bandonment authority is permissive and a rail operator is not obligated to cease service. But if there had been no c onveyance of the former Asp en Branch D &RG W right of wa y to the Roaring Fork Railroad Holding Authority (which then filed a Notice of Exempt Abando nment and ob tained a N otice of Interim Trail Us e), and no trail conversion, the rail operations had long since ceased, so the Phillips Company would have had no impediment to obtaining an adverse abandonment order and full enjoyment of its reversionary rights to the right of way. Thus the mea sure of dama ges in this action is the d ifference betw een the value of the prop erty as a w hole and its value w hile subject to the burden of the

Phillips Co. v. Denv er & Rio Grande W estern R. Co ., 97 F.3d 1375, 1377 (Tenth Cir. 1996), cert. denied, 521 U.S. 1104 (1997)
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public trail. Conclusion Read ing of the decad es-long history of co ntention by the Jus tice Dep artment that the a cts of the Congress in the N inete enth Century in framing the legal bas is for granting of land (the Homestead Acts) and granting of railroad rights of way (viz., the Union Pa cific and Northe rn Pacific Acts; the 1875 A ct) , and thus opening the W est to se ttlement, show s that the U nited States has wa ged a long and losing battle to rewrite the history and law of the 19th Century. In so doing, it has s ought to d eny just c ompensation to la ndowne rs in myriad co ntexts, with a goal alw ays in mind of imposition of a regime o f public rights of way, ta ken from private land owners without comp ensation. T he decisions which have rejected the Government's theories now date back over nearly three decad es to Justice R ehnquist's magisterial marshaling of the history of Western land law and federal development of transportation in the Leo Sheep case. The principles o f justice and just c ompensa tion recognized in Leo Sheep are the same p rinciples more rec ently recited by J udges N ewman, Williams and Hewitt in Hash and Blendu. They are fundamental principles of our American
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concep ts of justice and morality, enshrined in the jus t compens ation clause o f the Fifth Amendment. That it may take a landowner years, or even decades, to obtain recompense, but that reco mpense can ultimately b e ob taine d, illuminates the vitality o f this Court's very reason for existence and calls to this writer's mind Martin Luther King's invocation of the teaching of Theodore P arker, a N ineteenth Century abolitionist: "the arc of the moral universe is long, but it bends toward justice." 5
.

Respectfully submitted, s/ Geo . M. A llen GEORGE M . ALLEN 206-A So ciety Dr. Telluride, CO 81435 Telephone: 970-369-1000 Facsimile: 970-369-1009 Email: [email protected] Counsel for Pla intiff

The question the Rev. Martin Luther King Jr. asked in March 1965. "I know you a re asking tod ay, 'How long w ill it tak e?'" he told an audience in Montgomery, Ala. His answer continues to resonate today. "How long? Not long," he said, "because the arc of the moral universe is long, but it bends towa rd justice." Dr. Martin Luther King embraced the conviction of the Unitarian abolitionist minister Theodore Parker (1810-1860) who authored those words over a century earlier.

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Certificate of Service I hereby certify that I have, at Telluride, Colorado, this 2d day of May, 2007, served the document described below on counsel se t forth below b y the means of service set forth below: Document Served PlAIN TIF F'S RE SPO NSE ME MO RAN DUM TO T HIS C OUR T'S ORDER OF M ARCH 15, 2007

Means of Service automatic service by the Court's ECF filing system and by email to those not on automatic service Counsel Served MATTHEW J. McKEOWN, ESQ. Acting Assistant Attorney General Environment & Natural Resources Division United States Department of Justice WILLIAM J. SHAPIRO, ESQ. Trial Attorney Natural Resources Section Environment & Natural Resources Division U.S. Department of Justice P.O. Box 663 Washington, D.C. 20044-0663 Telephone: 202-305-0479 Facsimile: 202-305-0506 Email: [email protected]

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RICHARD A. ALLEN, ESQ. RALPH L. KISSICK, ESQ. Zuckert Scoutt & Rasenberger, L.L.P. 888 Seventeenth Street, N.W . Washington DC 20006-3309 202-298-8660 [email protected]

ANDREA FERSTER, ESQ. General Counsel Rails to Trails Conservancy 1100 17 th St., N.W. Washington DC 20036 202-974-5142 [email protected]

s/Geo. M. Allen George M. Allen

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