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IN THE UNITED STATES COURT OF FEDERAL CLAIMS (Re-filed Electronically on April 16, 2007)

ELLAMAE PHILLIPS COMPANY, Plaintiff, v. UNITED STATES OF AMERICA, Defendant.

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Case No. 04-1544-L Judge Lawrence M. Baskir

SECOND SUPPLEMENTAL BRIEF OF AMICUS CURIAE RAILS-TO-TRAILS CONSERVANCY IN SUPPORT OF DEFENDANT'S MOTION FOR SUMMARY JUDGMENT _______________________________________________ Richard A. Allen (Attorney of Record) Christina M. Wenzel ZUCKERT, SCOUTT & RASENBERGER L.L.P. 888 Seventeenth Street, N.W. Suite 700 Washington, D.C. 20006-3309 (202) 298-8660 Andrea Ferster General Counsel RAILS-TO-TRAILS CONSERVANCY 1100 17th Street, N.W. Washington, D.C. 20036 (202) 974-5142 Attorneys for Amicus Curiae Rails-ToTrails Conservancy April 6, 2007

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Introduction and Summary Amicus curiae Rails-to-Trails Conservancy ("RTC") submits this second supplemental brief in response to the Court's directive in a telephone conference call on March 13, 2007 calling for the parties to submit supplemental briefs concerning the meaning of the ruling of the Federal Circuit in Hash v. United States, 403 F.3d 1308 (Fed. Cir. 2005) (hereafter, "Hash II") with respect to the right-of-way easements granted by the General Railroad Right-of-Way Act of 1875, codified at 43 U.S.C. §§ 934-939 ("the 1875 Act"), and the significance of that ruling for the issues now before this Court. Specifically, the question is whether the Federal Circuit in Hash II ruled that easements granted to railroads under the 1875 Act become abandoned when they are rail banked and made subject to interim trail use pending reactivation of rail use pursuant to the Federal Railbanking Act.1 Two lower courts, both in the context of reviewing "takings" challenges concerned the same railbanked corridor at issue in Hash II, have recently concluded that the Federal Circuit's ruling in Hash II compels the lower courts to hold that rail banking and interim trail use of easements granted under the 1875 causes an abandonment of such easements and therefore amounts to a taking of the property of the owner of the underlying fee interest. Hash v. United States, U.S.D.C. Idaho, No. CV 99-324-S-MHW (issued Feb. 1, 2007) ("Hash III"); Blendu v. United States, U.S. Ct. Fed. Cl. No. 01-718L (issued Feb. 22, 2007). RTC submits that the Federal Circuit in Hash II did not rule that rail banking and interim trail use cause an abandonment of easements granted under the 1875 Act, and this Court is free

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Pub. L. No. 98-11, § 208, 97 Stat. 42, 48. The Federal Railbanking Law was enacted as part of the National Trails Systems Act Amendments of 1983, and it is codified at 16 U.S.C. § 1247(d).

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to make its own independent ruling on that issue. Such a ruling by the Federal Circuit would have amounted to an implicit ruling that easements granted under the 1875 Act are not broad enough to encompass rail banking and interim trail use ­ a conclusion that RTC and the United States contend would be contrary to the plain language of the 1875 Act as well as federal policies reflected in other federal statutes. At best, as will be discussed, the relevant language of the Hash II opinion is ambiguous, and there is no warrant for construing it to embody such a ruling in view of the following facts: (1) the issues regarding the scope of easements granted under the 1875 Act and whether they were abandoned were not even presented to the Federal Circuit in Hash II, (2) none of the parties addressed those issues in their briefs, (3) for the circuit court to have ruled on an issue not before it without any notice to the parties or opportunity to address it would have been a violation of due process, and (4) the Federal Circuit's decision in Hash II contains no discussion of the scope of the easements granted under the 1875 Act or of the relevant statutory language and federal policies bearing on that issue. Moreover, even if this Court were to conclude that the language Hash II reflects the Federal Circuit's determination that there had been an abandonment in that case, such a determination would have been, at best, a mere assumption, not an explicit finding, and it would not be binding on this Court under principles of law of the case, collateral estoppel or stare decisis. Both Hash III and Blendu involved the same railbanked corridor that was the subject of the Federal Court's finding in Hash II that the Plaintiffs' property interests had been taken, and thus the judges apparently were of the view that, under the mandate rule, the decision of the appellate court was the law of the case on remand, and is binding on the lower court. See W. L. Gore & Associates v. Garlock, Inc., 842 F.2d 1275, ,1278 (Fed. Cir. 1988). This case, however, concerns a wholly separate railroad corridor and separate cause of action, and neither principles

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of the law of the case nor collateral estoppel have any applicability to this Court's analysis. As a matter of stare decisis, a mere assumption by the Federal Circuit that the 1875 Act right of way was "abandoned," without any discussion or analysis of the relevant considerations, would have no binding effect on this Court and should have little precedential weight. Accordingly, this Court should exercise its own independent analysis concerning the scope of the easements granted under the 1875 Act and whether they have been abandoned based on its own independent analysis of the issues. The Hash II Decision Hash is a class action suit by landowners who claim an interest in a rail banked corridor from Weiser to Rubicon, Idaho, filed in the United States District Court for the District of Idaho seeking compensation for an alleged taking of their property interests arising out of the operation of the Railbanking Act. To properly explain the issues and rulings in Hash, it is appropriate first to describe the procedures for rail banking established under the Railbanking Act. That Act was enacted to preserve railroad corridors for future rail use that might otherwise be abandoned. It does so by establishing a process of "rail banking" by which railroads desiring to cease rail operations over specific lines for the present can, instead of "abandoning" the lines, convey them to qualified users for interim use as recreational trails until such time as the corridor is again needed for rail service. The Act requires any railroad seeking to rail bank a line first to file an application with the Surface Transportation Board ("STB") for authority to abandon the line, or, alternatively, a petition for an exemption from the abandonment procedures. Upon such a filing, the regulations provide: "If any state, political subdivision or qualified private organization is interested in acquiring or using a right-of-way of a rail line proposed to be abandoned for interim trail use and

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rail banking pursuant to 16 U.S.C. 1247(d), it must file a comment or otherwise include a request in its filing . . . indicating that it would like to do so." 49 C.F.R. §1152.29(a). Such a filing must include "[a]n acknowledgement that interim trail use is subject to . . . possible future reconstruction and reactivation of the right-of-way for rail service." Section 1152.29(a)(iii). If the railroad then notifies the STB that it is willing to negotiate an interim trail use/rail banking agreement, the STB will issue a "Certificate of Interim Trail Use" ("CITU"), instead of an order authorizing abandonment. Section 1152.29(c).2 The CITU must state, among other things, that "any interim trail use is subject to future restoration of rail service . . . ." Section 1152.29(c)(2). The Railbanking Act provides that "if such interim use [as a trail] is subject to restoration or reconstruction for railroad purposes, 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." 16 U.S.C. § 1247(d). See generally, Preseault v. ICC, 494 U.S. 1 (1990); Citizens Against Rails to Trails v. STB, 267 F.3d 1144, 1150-53 (D.C. Cir. 2001).3 The plaintiff class in the Hash case consists of persons who own land adjacent to an 83mile railroad corridor in Idaho formally owned by the Union Pacific Railroad, whose predecessor had pieced the corridor together in the nineteenth century by a combination of private deeds
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In cases where the railroad petitions for an exemption from abandonment procedures, the procedures are similar, but the STB issues what is termed a "Notice of Interim Trail Use", or "NITU." 49 C.F.R. §1152.29(d).
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In Preseault, the Supreme Court held that the Railbanking Act was a constitutional exercise of Congress' Commerce Clause power. The Court did not reach the question whether it might effect a taking for which the Fifth Amendment would require compensation, but held that if it did effect a taking, the Tucker Act would provide a remedy to affected property owners. 494 U.S. at 15-17. In a later Tucker Act suit by the Preseaults, a plurality opinion of the Federal Circuit indicated that the Railbanking Act will effect a taking if, in the absence of the RailbankingAct, the actions of the railroad would have resulted in an abandonment of the railroad's easement and a reversion of the underlying property to the adjacent landowner. Preseault v. United States, 100 F.3d 1525 (Fed. Cir. 1996). But see, Preseault v. United States, 853 F.2d 145, 151 (2d Cir. 1988), aff'd on other grounds, 494 U.S. 1 (1990).

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conveying land from landowners, by adverse possession, and by federal grant under the 1875 Act. In 1995, the Union Pacific filed a petition for exemption to authorize the abandonment of the rail line. The STB issued a NITU on December 28, 1995 authorizing the Friends of the Weiser River Trail, Inc. to negotiate an interim trail use agreement with the Railroad pursuant to 16 U.S.C. § 1247(d). The plaintiffs claim to have property interests in the corridor, which they allege were taken by the interim trail use agreement, thereby entitling them to compensation under the Takings Clause of the Fifth Amendment, By memorandum decision issued on November 27, 2001, the district court held that adjacent landowners did not have any property rights in those parcels obtained under the 1875 Act (Category 1 Plaintiffs) because any interests not conveyed to the railroad were retained by the federal government and were disposed of according to the 1988 Amendments to the National Trails Systems Act, 16 U.S.C. § 1248(c). By decision issued on March 7, 2003, the court entered final judgment under Fed. R. Civ. P. 54(b) on the claims of the those members of the plaintiff class, including Category 1 plaintiffs, whom the Court found in its 2001 decision held no property interests in the railroad corridor and therefore no valid taking claim. The plaintiffs appealed that ruling to the Federal Circuit. Because the district court had not ruled on the question of whether rail banking and interim trail use effected an abandonment of the 1875 Act easements, that issue was not presented to the Federal Circuit by the plaintiffs' appeal. The only issue addressed by the parties' briefs was whether the district court had correctly decided that the federal government retained the reversionary rights to the rail corridor and therefore that there could be no taking of plaintiffs' property even if the easements had been abandoned.

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In its decision in Hash II, the Federal Circuit reversed the district court's ruling and held that the reversionary rights to the rail corridor were held by the adjacent landowners, not the federal government. The opinion contains the following statement: [T]he land of Category 1 is owned in fee by the landowners, subject to the railway easement. 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 determine just compensation on the conditions that apply to these landowners. 403 F.3d at 1318. On remand, the district court concluded, in Hash III, that the foregoing statement reflected a determination by the Federal Circuit that the easement obtained under the 1875 Act had in fact been abandoned by rail banking and interim trail use of the rail corridor, and therefore made no independent determination of that issue. Judge Hewitt made the same ruling in Blendu. The Federal Circuit's statement, however, does not compel such a conclusion. At best, it is ambiguous. The statement -- "On the railway's abandonment of its right-of-way, these owners were disencumbered of their easement" -- could as well be read as saying "Upon a determination, yet to be made, that the railway abandoned its right of way, these owners would have been disencumbered of their easement." The opinion does not clearly and unambiguously state that the right-of-way was in fact abandoned. In the absence of the clearest and most unambiguous statement, this Court should not construe the Federal Circuit's opinion as having made a ruling on an issue that was not presented to that court by the plaintiffs' appeal and that was not addressed by the parties in their briefs or at oral argument. Indeed, inasmuch as the parties never briefed or had reason to brief the scope of

the easement conveyed by the 1875 Act and whether it was abandoned, it would have been a

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violation of due process for the court to have decided that issue. See, e.g., Jenkins v. Missouri, 216 F.3d 720, 726 (8th Cir. 2000); Doubleday & Co. v. Curtis, 763 F.2d 495, 502 (2d Cir. 1985). Furthermore, construing the Federal Circuit's opinion as having decided that issue would be wholly unwarranted in view of the absence of any discussion of the issue and the relevant considerations in the opinion. Whether the easement was abandoned by rail banking and interim trail use depends on the scope of the easements granted by the 1875 Act and whether such easements were limited to continuous rail operations or are broad enough to include rail banking or non-railroad uses. These issues turn first and foremost on the language of 43 U.S.C. §934. As RTC and the United States have argued in previous briefs, nothing in the language of §934 limits the use of the granted rights-of-way to railroad uses. Cf. Chevy Chase Land Co. v. United States, 355 Md. 110, 733 A.2d 1055 (1999) (construing similarly unrestricted deed language to permit trail use of an easement granted to a railroad). Furthermore, even if the Court were to conclude that, notwithstanding its broad language, §934 intended to limit the use of rights-of-way granted thereunder to railroad uses, RTC submits that rail banking under the Rails-to-Trails Act is a railroad use authorized by §934, since its essential purpose is to preserve scarce and diminishing transportation corridors for future rail use,4 and all interim trail users are put clearly on notice that such use is subject to and may be terminated by reactivation of railroad operations ­ a not infrequent occurrence.5
4 5

See Preseault v. ICC, 494 U.S. at 5-6, 17-19.

See, e.g. BG& CM Railroad--Exemption, F.D. 34399 (STB served October 17, 2003); Georgia Great S. Div, S.C. Cent. R.R. -- Abandonment and Discontinuance Exemption--Between Albany & Dawson, In Terrell, Lee & Dougherty Counties, GA, STB Dkt. No. Ab-389 (Sub-No. 1X) (STB served May 16, 2003); Missouri Pacific R.R. Co--Abandonment--Exemption C in St. Louis County, MO, Docket No. AB-3 (Sub-No. 98X), (STB, decided April 18, 1997) Norfolk & Western Ry. Co. --Abandonment between St. Marys and Minster in Auglaize County, OH, 9 ICC 2d 1015, 1017 (1993); Iowa Power--Construction Exemption-- Council Bluffs, IA, 8 ICC 2d 858, 866 (1990).

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While the court in Hash II considered the language of the 1975 Act in concluding that it did not reserve any reversionary rights in the underlying fee to the United States, it did not examine or discuss the language of §934 as it related to the scope of the easement granted. Nor did it discuss any other statutes or federal policies as they might bear on that issue, which have been discussed in prior briefs by the United States and RTC. Finally, even if this Court were to conclude that the Federal Circuit's opinion in Hash II amounted to a ruling that the rights of way in that case had been abandoned, that ruling would not be binding on this Court as a matter of law of the case or collateral estoppel, as this case involves completely different trails and parties. Nor would it be binding as a matter of stare decisis or have precedential weight in view of the fact that it would have been, at best, a mere assumption by the Federal Circuit, not an explicit finding, that was made without any discussion or any explanation of the basis for that assumption. It is inconceivable that the Federal Circuit intended its casual reference to "abandonment" in that case to be regarded as precedent binding on lower courts in other cases. As one court explained: Writing a precedential opinion . . . involves much more than deciding who wins and who loses in a particular case. It is a solemn judicial act that sets the course of the law for hundreds or thousands of litigants and potential litigants. When properly done, it is an exacting and extremely time-consuming task. . . . That a case is decided without a precedential opinion does not mean it is not fully considered, or that the disposition does not reflect a reasoned analysis of the issues presented. What it does mean is that the disposition is not written in a way that will be fully intelligible to those unfamiliar with the case, and the rule of law is not announced in a way that makes it suitable for governing future cases. Hart v. Massanari, 266 F.3d 1155, 1177-8 (9th Cir. 2001) (footnotes omitted) For example, in L.E. Myers Co. v. U.S., 10 Cl. Ct. 617 (1986), the Court of Federal Claims ruled that the principle of stare decisis applied where the Federal Circuit "devoted nearly one-sixth of its

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opinion to the identical issue now raised by L.E. Myers." Id. at 620. Here, by contrast, there was no discussion of the issue of abandonment whatsoever. That is a substantial issue, as the Court acknowledged in Beres v United States,_64 Fed. Cl. 403, 428 ( 2005), when, like Hash II, it ruled that adjacent landowners, not the Government, own the fee underlying 1875 Act easements, but stated: "There remain numerous issues to resolve before this Court can determine if the plaintiffs are entitled to compensation, ,including . . . .whether or not there was an abandonment." It is entirely possible, of course, that the Federal Circuit will have occasion to consider the scope of the easements granted under the 1875 Act in the future, including the meaning of its comments in Hash II. RTC submits that this Court's independent analysis and conclusions with respect to that issue are not foreclosed by the Federal Circuit's decision in Hash II and indeed are likely to be helpful to that court if and when it is presented with the issue.

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CONCLUSION The Federal Circuit in Hash II did not decide whether rail banking and interim tail use pursuant to the Rails-to-Trails Act resulted in the abandonment of an easement granted by the 1875 General Railroad Act. The motion of the United States for summary judgment should be granted. Respectfully submitted, s/ Richard A. Allen ___________________________ Richard A. Allen (Attorney of Record) Christina Wenzel Zuckert Scoutt & Rasenberger, L.L.P. 888 Seventeenth Street, N.W., Suite 700 Washington, D.C. 20006-3309 (202) 298-8660 Andrea Ferster, General Counsel Rails-to-Trails Conservancy 1100 17th Street, N.W. Washington, D.C. 20036 (202) 974-5412 Attorneys for Amicus Curiae Rails-To-Trails Conservancy April 6, 2007 (Re-filed electronically, with motion for leave to file, April 16, 2007)

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