Free Supplemental Brief - District Court of Federal Claims - federal

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS ________________________________ ) THE ELLAMAE PHILLIPS COMPANY, ) a Colorado Registered Limited ) Liability Partnership, ) ) Plaintiff, ) No. 04-1544 L v. ) ) Judge Lawrence M. Baskir UNITED STATES OF AMERICA, ) ) Defendant. ) _______________________________ )

DEFENDANT'S RESPONSE TO COURT'S JANUARY 30, 2007 ORDER MATTHEW J. McKEOWN Acting Assistant Attorney General Environment & Natural Resources Division United States Department of Justice WILLIAM J. SHAPIRO United States Department of Justice Environment and Natural Resources Div. 501 I Street, Suite 9-700 Sacramento, CA 95814 (916) 930-2207 (phone) (916) 930-2210 (fax) Attorney for Defendant Of Counsel: Evelyn Kitay, Surface Transportation Board Washington, D.C. Dated: April 6, 2007

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TABLE OF CONTENTS TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv

EXHIBIT LIST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi MEMORANDUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 I. II. Standard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 The Issues Raised in Hash Are Different from the Issues Raised Here . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 A. B. Background of Hash v. United States . . . . . . . . . . . . . . 4 The Issues Briefed Here are Different from the Issue Litigated in Hash . . . . . . . . . . . . . . . . . . . . . . . . . 8 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

C. III.

The Conclusory Paragraph in the Federal Circuit's Hash Decision Does Not Resolve the Issues Raised in the Parties' Pending Cross Motions for Summary Judgment in this Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 A. B. C. The Context of the Conclusory Paragraph . . . . . . . . . 12

The Text of the Conclusory Paragraph . . . . . . . . . . . . 14 The District Court's Decision on Remand in Hash and the Blendu Decision Are Not Dispositive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

D. IV.

The Court's Options if the Federal Circuit's Decision in Hash is Ambiguous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

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V.

The Court's Options if the Federal Circuit's Decision in Hash is Unambiguous . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

VI.

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TABLE OF AUTHORITIES FEDERAL CASES Beacon Oil Co. v. O'Leary, 71 F.3d 391 (Fed. Cir. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Blendu v. United States, _ Fed. Cl._, 2007 WL 594921 (Feb. 22, 2007) . . . . . . . . . . . 1, 18, 19 Boggs v. West, 188 F.3d 1335 (Fed. Cir. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Broadcast Innovation, L.L.C. v. Charter Commc'ns, Inc., 420 F.3d 1364 1366 (Fed. Cir. 2005), cert. denied, _ U.S. _, 126 S. Ct. 1920 (2006) . . . . . . . . . . . . . . 4, 14 Commonwealth Edison Co. v. United States, 46 Fed. Cl. 29 (2000), aff'd, 271 F.3d 1327 (Fed. Cir. 2001), cert. denied, 535 U.S. 1096 (2002) . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Engels Indus., Inc. v. Lockformer Co., 166 F.3d 1379 (Fed. Cir. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Exxon Chem. Patents, Inc. v. Lubrizol Corp., 137 F.3d 1475 (Fed. Cir. 1998), cert. denied, 525 U.S. 877 (1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 FCC v. Pottsville Broad. Co., 309 U.S. 134 (1940) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Glaxo Group Ltd. v. TorPharm, Inc., 153 F.3d 1366 (Fed. Cir. 1998), cert. denied sub nom. Novopharm, Ltd. v. Glaxo, Inc., 516 U.S. 988 (1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4, 17 Hash v. United States, 403 F.3d 1308 (Fed. Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . passim

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Laitram Corp. v. NEC Corp., 115 F.3d 947 (Fed. Cir. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . 2, 3, 18 Pentax Corp. v. Robison, 135 F.3d 760 (Fed. Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Sage Prods., Inc. v. Devon Indus., Inc., 126 F.3d 1420 (Fed. Cir. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Singleton v. Wulff, 428 U.S. 106 (1976) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3, 20, 21 Teegarden v. United States, 42 Fed. Cl. 252 (1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Varnado v. Lynaugh, 920 F.2d 320 (5th Cir. 1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 W. Coast Gen. Corp. v. Dalton, 39 F.3d 312 (Fed. Cir. 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 FEDERAL STATUTES 16 U.S.C. § 1247(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5, 8, 9 43 U.S.C. § 912 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9, 10 43 U.S.C. §§ 934-939 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

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EXHIBIT LIST Exhibit Number 1 2 Description Memorandum Decision, issued in Hash v. United States, Case No. CV-99-324-S-MHW (D. Idaho, Nov. 27, 2001) Brief of Defendant United States on the Nature of the Ownership Interest Originally Acquired by the Railroad in the Subject Properties, submitted in Hash v. United States, Case No. CV-99-324-S-MHW (D. Idaho), dated May 31, 2001 (Relevant Portion Only) Brief for Defendant-Appellee in Hash v. United States, Case No. 03-1395 (Fed. Cir.), dated Nov. 10, 2003 Brief for Plaintiffs-Appellants in Hash v. United States, Case No. 03-1395 (Fed. Cir.), dated July 25, 2003 Transcript of Hearing in Phillips v. United States, Case No. 04-1544L (Feb. 16, 2007) (Relevant Portion Only)

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MEMORANDUM Defendant submits this memorandum pursuant to the Court's Order, dated March 15, 2007 ("Court Order"). The Court Order directs the parties to submit "supplemental briefs on the questions raised by the Federal Circuit's mandate to the Idaho District Court in Hash v. United States, 403 F.3d 1308, 1318 (Fed. Cir. 2005)," specifically focused on the following issues: 1. What is the proper reading of the final paragraph of the Federal Circuit's discussion of the Category 1 landowners? 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. CV-99-324-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)? If the paragraph is unambiguous 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 and Judge Hewitt?

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Court Order at 1-2. As discussed below, the Federal Circuit's Hash decision only resolved a single issue, which is not implicated in the parties' cross motions

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for summary judgment currently pending in the instant case. Since the Hash decision is not dispositive on the issues raised here, the Court should grant Defendant's motion for summary judgment and deny Plaintiffs' cross motion for partial summary judgment. I. Standard "Under the doctrine of stare decisis, questions of law decided by the United States Court of Appeals for the Federal Circuit constitute binding precedent upon this Court." Commonwealth Edison Co. v. United States, 46 Fed. Cl. 29, 35 n.5 (2000), aff'd, 271 F.3d 1327 (Fed. Cir. 2001), cert. denied, 535 U.S. 1096 (2002). Stare decisis, however, applies "only to legal issues that were actually decided in a prior action" and not to issues that were neither "litigated [nor] resolved." Beacon Oil Co. v. O'Leary, 71 F.3d 391, 395 (Fed. Cir. 1995). Court decisions are sometimes ambiguous, and "interpretation of the scope of a court's mandate may be uncertain." Engels Indus., Inc. v. Lockformer Co., 166 F.3d 1379, 1383 (Fed. Cir. 1999) (citing Laitram Corp. v. NEC Corp., 115 F.3d 947, 951 (Fed. Cir. 1997). Interpretation of a legal opinion is itself a question of law. See Laitram Corp., 115 F.3d at 950. When interpreting an appellate court decision, the Court should be guided

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by the principle that in general, "a federal appellate court does not consider an issue not passed upon below." Singleton v. Wulff, 428 U.S. 106, 120 (1976); see also Laitram Corp., 115 F.3d at 952 (reversing the district court's interpretation of an ambiguous mandate, and stating that it was error to conclude that the Federal Circuit had decided issues "neither presented to us nor discussed in our opinion, nor necessary to our disposition of the appeal"); Exxon Chem. Patents, Inc. v. Lubrizol Corp., 137 F.3d 1475, 1478 (Fed. Cir. 1998) ("it would be incorrect to conclude that the court's mandate encompassed an issue that was not presented to the court"), cert. denied, 525 U.S. 877 (1998). Simply stated, the Federal Circuit generally "does not `review' that which was not presented to the district court." Sage Prods., Inc. v. Devon Indus., Inc., 126 F.3d 1420, 1426 (Fed. Cir. 1997). The Federal Circuit can consider "purely legal issues for the first time on appeal." Boggs v. West, 188 F.3d 1335, 1340 (Fed. Cir. 1999); Cf. Varnado v. Lynaugh, 920 F.2d 320, 321 (5th Cir. 1991) (declining to hear new arguments because they do not present purely legal questions). When the Federal Circuit resolves a "purely legal question" for the first time on appeal, however, it does so only after the issue "has been fully vetted by

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the parties on appeal. . . ." Glaxo Group Ltd. v. TorPharm, Inc., 153 F.3d 1366, 1371 (Fed. Cir. 1998) (emphasis added), cert. denied sub nom. Novopharm, Ltd. v. Glaxo, Inc., 516 U.S. 988 (1995); see also Pentax Corp. v. Robison, 135 F.3d 760, 762 (Fed. Cir. 1998) (stating that the Federal Circuit may not consider new issues that were not raised in appellate briefs or during appellate oral argument in denying motion for reconsideration). Moreover, when the Federal Circuit does decide to rule on purely legal questions for the first time on appeal, it generally does so expressly and unambiguously. See, e.g., Broadcast Innovation, L.L.C. v. Charter Commc'ns, Inc., 420 F.3d 1364, 1366 (Fed. Cir. 2005) (expressly noting the new argument), cert. denied, _ U.S. _, 126 S. Ct. 1920 (2006). II. The Issues Raised in Hash Are Different from the Issues Raised Here A. Background of Hash v. United States

It is clear that the single liability-related question considered by the Federal District Court of Idaho ("District Court") in Hash is different from the liability questions addressed in the parties' cross motions for summary judgment in the instant case. The Hash case reached the Federal Circuit after the District Court granted the government's motion for summary judgment on a preliminary ownership question. See Def.'s Ex. 1 (Hash v.

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United States, Case No. CV-99-324-S-MHW, Mem. Decision (D. Idaho, Nov. 27, 2001)). Some of the landowners in Hash, designated as "the Category 1 Claimants," were landowners whose property was allegedly traversed by a right-of-way created pursuant to the General Railroad Right of Way Act of 1875, 43 U.S.C. §§ 934-939 ("1875 Act"). See Def.'s Ex. 1 at 5. The Category 1 Claimants alleged that the Surface Transportation Board's ("STB's") issuance of a Notice of Interim Trail Use ("NITU") pursuant to 16 U.S.C. § 1247(d) effected a taking of their properties in violation of the Fifth Amendment. The Category 1 Claimants had argued that since the railroad had acquired an easement only, the original homesteaders (the Category 1 Claimants' alleged predecessors-in-interest) must have been granted the underlying fee. See Hash, 403 F.3d at 1313. The government disagreed, and argued that the United States "owns the reversionary interest on abandonment of the right-of-way." Id. Defendant's summary judgment brief in Hash was intentionally limited to the single issue of ownership, and Defendant explicitly reserved all other liability-related issues: [A] determination by the Court that the Railroad acquired an easement . . . would not end the liability inquiry in this case. If the Railroad is found to have acquired only an easement, additional questions that would need to be resolved include: . . .

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(2) whether the railbanking and interim trail use of the right-ofway is within the scope of the easement so that the easement "do[es] not even as a matter of state law revert upon interim use as nature trails[,]" . . . . These and other ownership and liability-related questions have been reserved for a subsequent briefing in this case. Def.'s Ex. 2 at 3 n.5 (emphasis added). The District Court introduced its discussion of the Category 1 Claimants as follows: "The issue then becomes whether the United States retained a reversionary interest in the subject parcels or if any reversionary interest accompanied the patents and vested in the homesteaders." Def.'s Ex. 1 at 5. This was the only issue the District Court considered with respect to the Category 1 Claimants, and the District Court resolved that issue in favor of the United States: Based on the foregoing, the Court finds that the United States held the reversionary interest in the subject rights-of-way when the ICC issued the notice of interim trail use in 1995. Accordingly, Plaintiffs did not own a vested property interest in any of the 1875 Act rights-of-way at issue when those rights-ofway were railbanked and interim trail use was authorized by the ICC. Id. at 7. The Category 1 Claimants appealed to the Federal Circuit. On appeal, the United States identified only one issue related to the Category 1 Claimants: "With respect to rights-of-way conveyed by the Railroad by the United States under the authority of the [1875 Act], whether

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the United States retains the reversionary interest in those rights-of-way." Def.'s Ex. 3 at *2 (Brief for Defendant-Appellee in Hash v. United States, Case No. 03-1395 (Fed. Cir.), dated Nov. 10, 2003, available at 2003 WL 25291552); see also id. at *11-43 (the United States' entire argument on appeal with respect to the Category 1 Claimants under the single heading "The United States Holds the Reversionary Interest In Rights-of-way Granted Under the 1875 Act"). Plaintiffs' appellate brief identified three issues related to the Category 1 Claimants, each of which focused exclusively on the ownership question that the District Court had resolved. See Def.'s Ex. 4 at *1-2 (Brief for Plaintiffs-Appellants in Hash v. United States, Case No. 03-1395 (Fed. Cir.), dated July 25, 2003, available at 2003 WL 25291551). At footnote 4 of its appellate brief, the United States expressly noted that questions about the abandonment and the scope of 1875 Act grants were "beyond the scope of this appeal, which pertains only to whether the Landowners have a property interest in the right-of-way." Def.'s Ex. 3 at *12 n.4 (emphasis added). In introducing its discussion of the issues, the Federal Circuit echoed the District Court's framing of the issue under consideration: "The question

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for the Category 1 landowners is whether . . . the ownership of the underlying land remained with the United States for lands subsequently patented to settlers under the Homestead Act." Hash, 403 F.3d at 1313. The Federal Circuit reversed the District Court's decision, and remanded for further proceedings. B. The Issues Briefed Here are Different from the Issue Litigated in Hash

After the Federal Circuit issued the Hash decision, the parties in the instant case suggested a briefing schedule to address the liability issues that the Hash District Court had not resolved. See Joint Status Report dated Jan. 23, 2006 (Docket No. 20). The Court adopted the parties' briefing schedule, and the parties filed cross motions for summary judgment. See Def.'s Mot. for Summ. J. (Docket No. 31) at 11-13 (discussing this procedural background). In contrast to the Hash pleadings, the parties' cross motions here focused on the interaction of the National Trails System Act, 16 U.S.C. § 1247(d) ("Trails Act") and the 1875 Act. The briefing addressed two primary issues: first, whether the scope of an 1875 Act grant is broad enough to encompass possible future active railroad service (i.e., railbanking) and interim use of the right-of-way as a public trail; and

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second, whether the 1875 Act grant should be considered abandoned under federal law when the 1875 Act is preserved through railbanking. See Def.'s Mot. for Summ. J. (Docket No. 31) at 25-31. Defendant argued that the first issue ­ the scope of the 1875 Act grant ­ should be resolved in its favor because railbanking and interim trail use are railroad-related, serve public transportation purposes, and are not precluded by the terms of the 1875 Act grant. See id. At a minimum, Defendant argued, the Court should conclude that at least railbanking is within the scope of the 1875 Act grant. Plaintiff argued for a narrow interpretation of the 1875 Act.1/ The second issue ­ whether the STB's issuance of the NITU effected an abandonment of the 1875 Act grant ­ engendered a significant amount of briefing regarding the possible application of 43 U.S.C. § 912, the statute governing abandonment and forfeiture of 1875 Act grants. See, e.g,, Pl.'s Reply in Support of Mot. for Summ. J. (Docket No. 49) at 1-5; Def.'s Reply in Support of Mot. for Summ. J. (Docket No. 44) at 1-2. Defendant argued Regarding railbanking, Plaintiff argued that the Court should conclude that Plaintiff had created a triable issue of fact about whether rail service would be reintroduced. See Pl.'s Mot. for Summ. J. (Docket No. 39) at 33 ("A factual hearing or trial of this matter would surely yield the result that this particular right of way will never again be used for rail transport."); Pl.'s Reply in Support of Summ. J. (Docket No. 49) at 14 (same). 9
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that § 912 was not implicated because the grant had not been "declared or decreed" as abandoned by any court of competent jurisdiction, a prerequisite for application of § 912. See Def.'s Mot. for Summ. J. (Docket No. 31) at 31 (quoting 43 U.S.C. § 912). Plaintiff eventually conceded that the question of abandonment was not necessary to its position and that, at most, Defendant would be liable for the additional burden imposed by interim trail use on an existing railroad use. See, e.g., Pl.'s Reply in Support of Mot. for Summ. J. (Docket No. 49) at 8 (quoting legal treatise for the principle that "if one have a footpafth, and use it with horses, he would be liable in trespass for such use, but would not thereby lose his easement of a footway"); Def.'s Ex. 5 at 103-04 (Plaintiff's counsel making similar point at oral argument); id. at. 113-14 (Court at oral argument stating that Plaintiff's counsel "seems not to rely upon abandonment of the easement as part of his case"). C. Conclusion

In summary, the parties in the Hash District Court proceeding addressed the sole issue of ownership of the reversionary interest, and the District Court's opinion addressed only that issue. The Category 1 Claimants appealed that issue, and neither party identified, briefed, or

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argued any other issue during the Hash appellate proceedings. The issues raised in the instant matter, therefore, are plainly different from the ownership issue litigated in Hash. With this background in mind, Defendant turns to the Court's three questions. III. The Conclusory Paragraph in the Federal Circuit's Hash Decision Does Not Resolve the Issues Raised in the Parties' Pending Cross Motions for Summary Judgment in this Case The Court's first question relates to the proper reading of the paragraph that concludes the Federal Circuit's discussion of the Category 1 Claimants: We conclude that the 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. Hash, 403 F.3d at 1318. The Court should find that the paragraph merely summarizes the Federal Circuit's analysis of the ownership question that was on appeal in Hash. As discussed below, neither the context nor the

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language of the paragraph suggests that the Federal Circuit intended to introduce a new analysis about the possible abandonment of 1875 Act grants or announce a new universal rule of liability that might impact this case. The Court, therefore, should conclude that the paragraph does not resolve the issues raised in the parties' pending cross motions for summary judgment in this case. A. The Context of the Conclusory Paragraph

The context of the paragraph in question is important in understanding its meaning. The paragraph in question consists of four sentences, positioned at the conclusion of four-and-a-half pages of analysis in the Federal Reporter. Reflecting the limited nature of the issue on appeal, the four-and-a-half pages of analysis discuss who ­ between the landowner and the United States ­ owns the land underlying the 1875 Act grant. See, e.g., id. at 1314 (discussing the language in the land patents, and concluding that the United States did not retain or reserve any interest underlying the right-of-way); id. at 1314-16 (discussing a Department of the Interior regulation and subsequent federal statutes to ascertain whether the United States intended to reserve rights in the patented land); id. at 1317 (discussing the text of the 1875 Act to see

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whether the United States "retain[ed] ownership of the lands underlying railway easements"). Nothing in the analysis section preceding the concluding paragraph suggests that the court would raise a new liability issue that had not been considered by the District Court or appealed by either party. There is certainly nothing about the context of the paragraph to suggest that the Federal Circuit intended to announce a new universal rule of liability without any legal or factual analysis. The penultimate sentence states: "The district court erred in holding that the United States retained the reversionary interest to the land underlying these rights-of-way after disposing of the land by land grant patent under the Homestead Act." Id. at 1318. That sentence suggests that the Federal Circuit intended to conclude its discussion of the ownership issue before addressing the next category of appellants, not introduce a new discussion of legal concepts. In short, the Court should not read the paragraph in question in isolation. It is a four-sentence conclusion appended to a comprehensive, multi-page analysis of a single issue. Nothing about the context of the paragraph suggests that the Federal Circuit intended to analyze any new issue that the District Court had not previously had an opportunity to

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evaluate. B. The Text of the Conclusory Paragraph

The text of the paragraph in question also supports Defendant's interpretation. The first sentence, for example, identifies the paragraph as a conclusion: "We conclude that the land of Category 1 is owned in fee by the landowners, subject to the railway easement." Id. (emphasis added). The topic sentence, then, shows that the paragraph will merely summarize the Federal Circuit's analysis of the ownership issue. The sentence following the topic sentence merely reverses the District Court's decision, and therefore can only be read as a summary of the preceding discussion. Had the Federal Circuit intended to rule on issues that the District Court had not considered, one would expect the Federal Circuit to use much different language. For example, rather than simply reversing the District Court's decision, the Federal Circuit could have written "we reverse, and also decide the following issue. . . ." The absence of such language shows that the Federal Circuit only intended to reverse the District Court's decision on the ownership issue. Cf. Broadcast Innovation, L.L.C., 420 F.3d at 1366 (clearly defining the issue not reached by the district court and expressly stating that the Federal Circuit would

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address "arguments beyond those originally presented by the parties to the district court"). This point is especially compelling here, where the interaction of the Trails Act and the 1875 Act was a question of first impression, with potentially far-ranging effects, which the United States had expressly reserved for future proceedings in its appellate brief. See Def.'s Ex. 3 at *12 n.4. The third sentence begins with the subordinate clause "[o]n the railway's abandonment of its right-of-way. . . ." Hash, 403 F.3d at 1318. Given its context, the only reasonable interpretation of that phrase is that the Federal Circuit intended to frame a contingency ­ assuming the railroad's interest could be considered abandoned, here is the result. If the Federal Circuit intended to make a finding of abandonment, it would have more clearly stated that intent using, at the very least, an independent clause such as "The railroad abandoned its right-of-way and we, therefore, conclude that. . . ." The absence of any declarative statement of abandonment is particularly instructive here, where the question of abandonment was not raised by either party during the District Court proceedings, resolved by the District Court, or discussed in the analysis portion of the Federal Circuit's decision.

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The final sentence of the paragraph in question states "[o]n remand the district court shall determine just compensation on the conditions that apply to these landowners." Id. at 1318. This sentence, too, must be understood in context. The Federal Circuit was presented with a single issue, which it resolved against the United States. If the Federal Circuit understood the ownership issue to be the sole liability issue on appeal, it should hardly be surprising that the Federal Circuit remanded with instructions to determine just compensation. Such an interpretation would not preclude this Court from considering the issues raised in the pending briefing. If, for example, the Federal Circuit had resolved a statute of limitation question against the United States, that determination clearly would not foreclose consideration of additional liability-related issues in subsequent cases. C. The District Court's Decision on Remand in Hash and the Blendu Decision Are Not Dispositive

The Court's analysis of the paragraph in question should not be constrained by the District Court's decision on remand in Hash or by Judge Hewitt's determination in the related Blendu case. It bears noting that the Blendu plaintiffs and Hash plaintiffs raise identical claims. The Blendu plaintiffs are simply those landowners who declined to join in the Hash

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case and opted to file a separate claim in the Court of Federal Claims. Practically speaking, Hash and Blendu are the same case. As a preliminary matter, the District Court's Hash decision and the Blendu decision are not binding on this Court. See W. Coast Gen. Corp. v. Dalton, 39 F.3d 312, 315 (Fed. Cir. 1994) (decisions of the Court of Federal Claims, "while persuasive, do not set binding precedent for separate and distinct cases" in the Court of Federal Claims); Teegarden v. United States, 42 Fed. Cl. 252, 257 (1998) (Court of Federal Claims not bound by district court decisions). As discussed above, the Hash District Court had no opportunity to consider any issue other than the ownership question, and the District Court's analysis was limited to that single issue. Although the Federal Circuit has the ability to consider new "purely legal issues" on appeal, it only does so after the new issue "has been fully vetted by the parties on appeal. . . ." Glaxo Group Ltd., 153 F.3d at 1371 (emphasis added). Neither party addressed the issues of abandonment or scope of the 1875 Act grants on appeal in Hash. At the very least, then, this Court should start with the presumption that the Federal Circuit did not resolve new issues unless there is definitive evidence to the contrary. Neither the Hash

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court nor the Blendu court found such evidence. On remand in Hash, the District Court concluded that the Federal Circuit had "found that based on the Preseault cases, the railway abandoned the right-of-way," and had therefore "rightly or wrongly, made the liability determination applying Preseault." Hash v. United States, Case No. CV-99-324-S-MHW, Mem. Decision dated Feb. 1, 2007, at 7. The District Court stated that its decision was greatly influenced by the Federal Circuit's denial of the government's petition for rehearing: "After reviewing [the petition for rehearing], the Court is even more convinced that the mandate did resolve the issue of liability in favor of the Plaintiffs." Id. at 8. Defendant disagrees with the District Court's assignment of weight to the Federal Circuit's denial of the government's petition for rehearing. In fact, the Federal Circuit has stated that a denial of rehearing should be accorded limited or no interpretive value. See Laitram, 115 F.3d at 951 (reversing the district court's interpretation of a Federal Circuit mandate and concluding that "the denials [of motion for clarification] carry no inferential weight."). The Blendu court followed the Hash District Court's lead. See Blendu, _ Fed. Cl. _, 2007 WL 594921 (Feb. 22, 2007). According to

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the Blendu court, the third sentence of the paragraph in question, beginning with "[o]n the railway's abandonment of its right-of-way," was intended to be a declarative finding of abandonment. See Blendu, supra. Defendant respectfully disagrees. See discussion, supra, § III(B). Properly read in context, the third sentence is intended to frame a contingency, not offer a new conclusion about the ultimate liability of the United States with no supporting analysis. The Blendu court's analysis, therefore, is an isolated reading of a single phrase in a concluding paragraph that is not supported by an appropriate contextual reading. Finally, even if the Hash and Blendu courts were correct that the Federal Circuit intended to make a finding of abandonment in Hash, that conclusion would not be dispositive of the issues raised in the motions pending in this case. Plaintiff in this case, for example, has conceded that the abandonment question is a factual question, which could only be resolved after trial. See, e.g., Pl.'s Reply in Support of Mot. for Summ. J. (Docket No. 49) at 14 ("There is a triable fact issue as to whether the Former Aspen Branch of the [railroad] will ever go back into rail service."). While Defendant disagrees with Plaintiff's contention that a trial is necessary, see, e.g., Def.'s Reply in Support of Mot. for Summ. J. (Docket

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No. 44) at 1-2, Plaintiff's position clarifies that whatever finding the Federal Circuit may have made about abandonment in Hash should be limited to the facts of that case. Since the Hash decision includes no analysis of the facts related to abandonment in that case, it would be inappropriate to assume that the Hash decision is controlling on the facts presented here. D. Conclusion

In summary, the Court should treat the paragraph in question as a conclusory paragraph that only resolved the ownership issue that the Category 1 Landowners had appealed. Further, even if the Federal Circuit did intend to reach a conclusion about abandonment in Hash, that conclusion is limited to the facts in Hash and does not preclude consideration of the liability arguments raised in the parties' cross-motions for summary judgment in the instant case. IV. The Court's Options if the Federal Circuit's Decision in Hash is Ambiguous The Court's second question relates to the Court's options if the paragraph in question is "ambiguous as to the issues of abandonment, scope of the easement and liability under the Takings clause. . . ." Court Order at 1. If the Federal Circuit's decision is ambiguous, the Court's interpretation must begin with the principle that "a federal appellate court

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does not consider an issue not passed upon below." Singleton, 428 U.S. at 120. The District Court was not presented with an opportunity to consider the questions of abandonment or the scope of 1875 Act grants, and it is clear that the District Court did not decide those issues. See discussion, supra, § II(A). If the decision is ambiguous, then, the Court should conclude that the Federal Circuit resolved only the ownership issue, and no other issues. Consequently, the Federal Circuit's decision does not foreclose this Court's consideration of other liability-related issues, and the Court should grant Defendant's motion for summary judgment and deny Plaintiff's cross motion. V. The Court's Options if the Federal Circuit's Decision in Hash is Unambiguous The Court's third question relates to the Court's options if the paragraph in question is "unambiguous as to the issues of abandonment, scope of the easement and liability under the Takings clause. . . ." Court Order at 2. As discussed above, the Federal Circuit's opinion should be read as merely reversing the District Court's decision on the ownership issue. The Federal Circuit did not reach the issues discussed in the parties' summary judgment briefs in this case. Accordingly, the Court

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should grant Defendant's motion for summary judgment and deny the Plaintiff's cross motion. If the Court determines that the Federal Circuit intended to reach a conclusion about abandonment in Hash, even though neither party identified that issue on appeal, the Federal Circuit's opinion should be read as limited to the particular facts presented in Hash. Since the Federal Circuit does not discuss those facts in its opinion, it would be an error for this Court to assume that the Hash decision is binding on the facts presented here. Under this interpretation, the Court should find that Plaintiff has failed to meet its burden of proof, and grant Defendant's motion for summary judgment. If instead, the Court determines that the Federal Circuit's decision unambiguously intended to announce a new universal rule in a case of first impression, without any analysis ­ that the United States is liable for an unconstitutional taking in any case involving 1875 Act grants and application of the Trails Act, regardless of any case-specific facts ­ this Court should apply the doctrine of stare decisis and rule in Plaintiff's favor. It is beyond cavil that this Court is bound by precedent of the Supreme Court and the Federal Circuit. See FCC v. Pottsville Broad. Co., 309 U.S.

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134, 140 (1940). VI. Conclusion The Federal Circuit's decision in Hash does not address the issues raised in parties' pending motions for summary judgment. For the reasons discussed above and in the pending briefing, the Court should grant Defendant's Motion for Summary Judgment and deny Plaintiff's CrossMotion for Partial Summary Judgment. Dated: April 6, 2007 Respectfully submitted, MATTHEW J. McKEOWN Acting Assistant Attorney General Environment & Natural Resources Division United States Department of Justice /s/ William J. Shapiro WILLIAM J. SHAPIRO United States Department of Justice Environment and Natural Resources Div. 501 I Street, Suite 9-700 Sacramento, CA 95814 (916) 930-2207 (phone) (916) 930-2210 (fax) Attorney for Defendant

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