LOVERIDGE et al v. USA

Filing 195

OPINION AND ORDER: GRANTING-IN-PART and DENYING-IN-PART 178 Defendant's Motion for Partial Summary Judgment, GRANTING-IN-PART and DENYING-IN-PART 180 Plaintiffs' Cross-Motion for Summary Judgment. Joint Status Report due by 8/9/2023. Signed by Judge David A. Tapp. (krm) Service on parties made.

In the United States Court of Federal Claims
No. 16-912
Filed: August 2, 2023
PERRY LOVERIDGE, et al.,
Plaintiffs,
v.
THE UNITED STATES,
Defendant.
Thomas S. Stewart and Reed W. Ripley, Stewart, Wald & Smith, LLC, Kansas City, MO, for
Plaintiffs.
Kimberly A. Cullen and Leeann Kim, Trial Attorney, Todd Kim, Assistant Attorney General,
Environment and Natural Resources Division, U.S. Department of Justice, Washington, D.C, for
Defendant.
MEMORANDUM OPINION AND ORDER
TAPP, Judge.
Years of fitful progress, bring us again to another unavailing summary judgment claim.
The parties now dispute the method for calculating damages. The Court declines to impose its
own metric on the Parties’ experts, having not yet received the benefit of context best provided at
trial. Accordingly, while some general notions regarding the backdrop of damages available in
rails-to-trails cases might be helpful, a final determination regarding admissibility and the weight
of such expert testimony must await another day.
Broadly speaking, however, damages must be calculated utilizing the real-world
conditions of a property before and after the taking. Here, that includes a pre-existing contract to
operate a local scenic train until at least 2026 on the same rail line. The Court also finds that
Plaintiffs may offer expert testimony on how the market value of their property is impacted by
the uncertainty surrounding the future use of the easements by the trail operator.
I.

Background

Plaintiffs’ properties, located in Oregon, were burdened by a railroad easement later
converted to interim trail use through the Notice of Interim Trail Use (“NITU”) process. See
Loveridge v. United States, 139 Fed. Cl. 122 (2018) (“Loveridge I”). The remaining property
owners in this case are Camp Double J, LLC (“CDJ”) (owners of the Joslin parcels), the
Laviolette family (owner of the Jetty Fishery parcel), and Old Mill Investment, LLC (“OMI”)

(owner of the OMI property). (Def.’s Mot. for Summ. J. (“Def.’s Mot.”) at 11, ECF No. 178;
Pls.’ Cross Mot. for Summ. J. (“Pls.’ Cross-Mot.”) at 10, ECF No. 180).
In 2006, when the Port of Tillamook Bay Railroad (“POTB”), a successor in interest to
the original railroad operator, was still actively running freight trains over the railroad, it entered
a contract with the Oregon Coast Scenic Railroad (“OCSR”), a local tourist rail service. (Def.’s
Mot. Ex. E at 2–4). The contract gives OCSR the right to operate a scenic passenger excursion
train over the same rail line. (Id.) Following a renewal of the agreement in 2012, POTB
authorized OCSR’s use of the rail line through December 2016 with two options for additional
five-year renewals. (Def.’s Mot. Ex. F at 39,41; see also Ex. G.). OCSR exercised the first fiveyear extension in 2016 and the second in 2021, thereby authorizing operations of the tourist train
until at least 2026. (Def.’s Mot. Ex. F at 31:14-24; Ex. G.). In 2007, a storm damaged portions of
the rail line. (Def.’s Mot. Ex. E at 2). POTB ceased freight train operation in the aftermath, but
OCSR continues to operate the tourist train. (Pls.’ Cross-Mot. at 10, 17).
In May of 2016, POTB notified the Surface Transportation Board (“STB”) of intent to
abandon its service. (Def.’s Mot. Ex. A). POTB also executed an agreement (“trail use
agreement”) with the Salmonberry Trail Intergovernmental Agency (“STIA”) for interim trail
use of the railroad; this agreement expressly provides for OCSR’s continuing use of the tourist
train. (Def.’s Mot. Ex. C at 5, § A(1)). The trail use agreement leases the railroad corridor to
STIA for 99 years and authorizes it to use the railroad to “establish, install, construct, maintain,
operate and repair a trail and pathway . . . .” (Id. at 6). Although POTB and STIA reached their
agreement in 2018, no construction has taken place at the site to date. (Def.’s Mot. at 20; Pls.’
Cross-Mot. at 13).
Two properties (the Joslin and the Jetty Fishery parcels) include right-of-way agreements
with POTB that allow the property owners to use parts of the railroad corridor for ingress and
egress; i.e., the right to use a driveway that crosses over the railroad and connects the properties
to the highway. (See Def.’s Mot. Exs. Y, HH, S, GG). The third property (the OMI property) has
access to the highway through two public roads. (Def.’s Mot. Ex. Z at 97:14-21; 136:13-137:1).
The trail use agreement states that POTB “retains the right to administer, manage, and perform
all Existing Use Agreements.” (Def.’s Mot. Ex. C at 7, § D(3)). The trail use agreement defined
existing use to encompass “third party contracts,” approved by POTB that “affect[] the Leased
Property,” including “right of way agreements,” and “crossing agreements.” (Id. at 6, § D(2)).
The United States claims that all three accessways in this case are considered “existing use
agreement[s]” and incorporated into the trail use agreement. (Def.’s Mot. at 22–3).
The Court first reviewed the original deeds to the railroad company to determine if each
deed conveyed a fee simple interest thus barring takings claim, or an easement opening the door
for takings claim. See Loveridge I; see also Loveridge v. United States, Case No. 16-912, 2019
U.S. Claims LEXIS 55 (Fed. Cl. Feb. 8, 2019) (“Loveridge II”). In Loveridge III, for certain
underlying deeds that conveyed only an easement, the Court assessed whether the scope of the
easement was broad enough to allow for interim trail use and railbanking. Loveridge v. United
States, 148 Fed. Cl. 279 (2020) (“Loveridge III”). In Loveridge IV, the Court found that to
receive just compensation, Plaintiffs need not demonstrate that the railroad easement was legally
abandoned under Oregon law prior to the issuance of the NITU and addressed questions about

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adjacency to the rail corridor. Loveridge v. United States, 149 Fed. Cl. 64 (2022) (“Loveridge
IV”). Against this backdrop, the Court turns to the current dispute.
II.

Analysis

Under RCFC 56(a), the Court shall grant summary judgment if the movant shows that
there is no genuine dispute as to any material fact, and “the movant is entitled to judgment as a
matter of law.” In evaluating cross-motions for summary judgment, the Court evaluates “each
party’s motion on its own merits, taking care in each instance to draw all reasonable inferences
against the party whose motion is under consideration.” Mingus Constructors, Inc. v. United
States, 812 F.2d 1387, 1391 (Fed. Cir. 1987). The moving party may meet its burden by
“pointing out . . . that there is an absence of evidence to support the nonmoving party’s case.”
Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986).
In rails to trails cases, the Court uses the “before and after” method of assessing damages
where just compensation equals the difference in market value of the land before and after the
easement is imposed. Otay Mesa Prop., L.P. v. United States, 670 F.3d 1358, 1364 (Fed. Cir.
2012). In addition to the value of the property taken, just compensation will include any decrease
in value of the parts not taken if that decrease in value is caused by the taking. United States v.
Grizzard, 219 U.S. 180, 185 (1911) (“When the part not taken is left in such shape or condition
as to be in itself of less value than before, the owner is entitled to additional damages on that
account.”). Plaintiffs bear the burden of proving the value of the interest taken, including any
damages to the property’s remainder. See Bd. of Cnty. Supervisors v. United States, 276 F.3d
1359, 1364 (Fed. Cir. 2002); Miller v. United States, 620 F.2d 812, 828 (1980). In ruling on the
disputes over valuation standards in takings cases, the Court is cognizant of the guiding principle
that “just compensation should be carefully tailored to the circumstances of each particular case.”
See Otay Mesa, 670 F.3d at 1368.
A. The Before Condition and the Oregon Coast Scenic Railroad
Neither party disputes the fact that OCSR has been continuously operating the scenic
train on the railway corridor in question and that the scenic train remains active today. (Def.’s
Mot. at 24; Pls.’ Cross-Mot. at 10–11). OCSR and POTB contracted to run this scenic train
before the NITU, and the contract does not expire until at least 2026. (Id.). The United States
argues that the “before” condition must consider that the Plaintiffs’ properties are encumbered by
the OCSR easement because, even in the absence of the NITU, OCSR would continue to operate
under its agreement with POTB. (Def.’s Mot. at 24–7). Conversely, Plaintiffs argue that the
Court should find that OCSR’s easement either extinguished through the NITU process along
with POTB’s easement or that it is set for expiration no later than 2026. (Pls.’ Cross-Mot. at 24–
25). The Court disagrees that the scenic train must be excluded from the “before condition.”
As an initial matter, Plaintiffs argue that in the “before” condition (where POTB
abandons its common carrier obligations without STB’s involvement) OCSR’s otherwise valid
contractual right to operate the scenic train automatically extinguishes “along with POTB’s
easement;” yet Plaintiffs provide no legal support for this proposition. (See Pls.’ Cross-Mot. at
24–25, 33). Consequently, the Court rejects this argument. Estee Lauder Inc. v. L’Oreal, S.A.,
129 F.3d 588, 595 (Fed. Cir. 1997) ( “arguments of counsel” cannot substitute for actual
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evidence in the record); Barmag Barmer Maschinenfabrik AG v. Murata Mach., Ltd., 731 F.2d
831, 836 (Fed. Cir. 1984) (parties may not rely on “conclusory statements” to support their
position); Seventh Dimension, LLC v. United States, 160 Fed. Cl. 1 (2022) (“…[T]he Court
expects the government to submit facts to support its arguments—and not rely on mere ipse
dixit.”).1
However, Plaintiffs also argue that the OCSR train should be excluded from the “before”
condition because, as a matter of law, appraisers must assess the before condition as if the
property is “vacant.” (Pls.’ Cross-Mot. at 8). The United States responds that the before
condition must reflect “the real-world condition of the property,” analogizing this case to
Rasmuson v. United States, 807 F.3d 1343, 1345–46 (Fed. Cir. 2015).
In Rasmuson, the parties disagreed whether the “before” condition should include the
remnants of the railroad’s use, including earthen embankments, ties, and poor soil conditions. Id.
The Federal Circuit found that the “before” condition “has to account for [the] physical
conditions,” of the land when “[a]bsent the NITUs, the land would have returned to the
landowners,” with those physical conditions. Id. at 1346. Plaintiffs distinguish that decision by
positing that Rasmuson “exclusively focused on certain aspects of the taken property’s physical
condition, not its legal condition.” (Pls.’ Cross-Mot. at 21). Yet, nothing in the language of
Rasmuson itself points to this distinction. In fact, Rasmuson’s holding followed from the nature
of the railroad company’s legal responsibility, reasoning that even absent the NITU, the railroad
company “did not have an obligation” to remove the physical encumbrance on the property
owner’s land. Rasmuson, at 1346. (finding that if the “before” condition did not account for the
costs of removing the physical remnants the appraisal “will result in an artificially inflated value
and yield a windfall to the landowner.”).
Like Rasmuson, the NITU in this case did not impact POTB’s legal obligation to OCSR
for continued operation of the excursion train. (See Def.’s Mot. Ex. C at 5, § A(1) (noting that
POTB’s grant of lease to STIA is “specifically subject to the terms of this Agreement,
including . . . the Oregon Coast Scenic Railroad (OCSR) Rail Use Agreement . . . .”)). As both
parties concede, OCSR continues its train operation under the POTB agreement despite the trail
use agreement and operations will likely continue until at least 2026. (Def.’s Mot. at 24; Pls.’
Cross-Mot. at 10–11, 22). What’s more, the United States argues that STB lacks jurisdiction to

1

At oral argument, Plaintiffs also relied on Minto v. Salem Water, Light & Power Co., 120 Ore.
202 (Or. 1926) as support that OCSR’s lessee rights may be extinguished under state law
because they would be beyond the scope of the original POTB easement. (OA Tr. 28:10-25–
29:1-13, ECF No. 191). In Minto the Oregon court denied grantee the right to conduct aboveground water filtration because the language of that deed was “clear and unambiguous,” in only
granting below-surface rights. Id. at 212–13. The deed to POTB does not distinguish POTB’s
railroad use from OCSR’s nearly as clearly and unambiguously as the two uses in Minto. Id.
Furthermore, Minto acknowledged that property owners’ acceptance of “open, continuous, [and]
exclusive,” use can still create “easement by prescription,” despite the deed’s language. Id. at
214–16. Even though Plaintiffs claim that they can “probably [] exclude that excursion train
from its right-of-way,” that does not change the fact that Plaintiffs have not challenged OCSR’s
use since 2006, further differentiating this case from Minto. (OA Tr. 28:23–25–29:1–4).
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modify or terminate the preexisting agreement between POTB and OCSR. (Def.’s Mot. at 31).
The United States notes that STB’s jurisdiction is limited to rail carriers that provide “common
carrier” railroad transportation as “part of the interstate rail network.” (Id.); see also 49 U.S.C. §
10501(a)(2) (the STB’s “[j]urisdiction under paragraph (1) applies only to transportation in the
United States between a place in--(A) a State and a place in the same or another State as part of
the interstate rail network.”). Rail carriers that provide transportation on a “wholly intrastate,”
basis—including the scenic train—are, according to the United States, outside the STB’s
jurisdiction. (Def.’s Mot. at 18). In practice as well, the STB has previously declined to exercise
jurisdiction over intrastate excursion trains.2 Because the NITU did not, and potentially could not
have, altered the agreement between POTB and OCSR, the “before” condition must reflect
OCSR’s continued operation.
At oral argument, Plaintiffs identified what they take to be the two primary sources
supporting the theory that the “before” condition always views the land as vacant: Raulerson v.
United States, 99 Fed. Cl. 9 (Fed. Cl. 2011) and the Yellow Book. (June 28, 2023, Oral
Argument Transcript (“OA Tr.”) 25:1-25–26:1-25, ECF No. 191). Despite Plaintiffs’
contentions, Raulerson does not endorse their broad assertion. Raulerson emphasized that just
compensation is determined by analyzing “the nature of” the exact “state-created property
interest” that the NITU blocks. 99 Fed. Cl. at 12. Instead of adopting a blanket rule as Plaintiffs
desire, the Court in Raulerson reviewed the text and scope of the railbanking agreement in that
case to determine the nature of the state-created property interest that was blocked. Because the
trail use agreement indicated that the railroad company was selling all of its rights to the trail
operator, the Raulerson Court found that in measuring just compensation the land should be
viewed as fully unencumbered in the before condition. See Raulerson, at 11 (noting that the trail
agreement “agree[d] to sell . . . as is and by quit-claim . . . all of such right, title and interest that
SELLER may have in the [railroad easement]” to the trail manager) (emphasis added). Here,
unlike Raulerson, the railroad company conditionally transferred its rights, expressly preserving
the scenic train contract. Raulerson does not endorse the rigid rule the Plaintiffs contend it does.
See Georgia-Pacific Corp. v. United States, 226 Ct. Cl. 95, 106 (1980) (the Court’s just
compensation analysis “cannot be reduced to a formula,” or hostage to “inexorable rules”).
Neither do the Yellow Book’s intermittent uses of the phrase “as if vacant,” impose such
an inexorable rule. The Yellow Book’s use of that phrase, like in sections 1.5.1.1 and 2.3.3.1.1,
appears in the context of defining “the highest and best use” and not in the context of the before
and after rule. (See Def.’s Mot. Ex. FF, The Uniform Appraisal Standards for Federal Land
Acquisition (“the Yellow Book”), at 36–37, 75). Out of context references cannot suppress the
particular facts of this case and the close analogy to Rasmuson. 807 F.3d at n.1 (Fed. Cir. 2015)
(noting that the remnants of the railway “are also relevant to determining the ‘highest and best
use’ of the landowners’ property,” and that the fair market value must be assessed “in light of the
physical condition of the property”); see also Shelden v. United States, 34 Fed. Cl. 355, 373

2

See Fun Trains, Inc., STB Finance Docket No. 33472 (1998); Revolution Rail Holding Co.,
LLC—Acquisition Exemption—Saratoga & North Creek Railway, LLC, FD 36535, 2021 STB
LEXIS 217, *5 (STB served Sept. 10, 2021); Denver & Rio Grande Ry. Hist. Found.—Pet. for
Declaratory Order, FD 35496, 2014 WL 4068219, *8 (STB served Aug. 18, 2014),
reconsideration denied, 2015 WL 1310043 (STB served Mar. 24, 2015).
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(1995) (“The fair market value of the highest and best use as a vacant building lot must take into
account certain adjustments to compensate for the fact that a damaged house currently exists on
the property.”).
OCSR exercised its final extension option to continue its operations until 2026. (See
Def.’s Mot. at 18). Although OCSR may extend its operations beyond 2026, no such agreement
currently exists. (See Def.’s Mot. Ex. C at 7–8, § D(5); OA Tr. 38:24-25–39:1-7). Although the
Court agrees that base valuation must find the parcels burdened by the operating scenic railroad,
that is not the end of the analysis. The Court does not indulge the United States’ curious
avoidance of the fact that OCSR’s operation beyond 2026 is uncertain and that this fact, just like
OCSR’s actual operation, cannot be excluded from the “before” condition. All factors of
OCSR’s agreement could realistically impact a reasonable buyer’s assessment of value and
therefore relate to valuation. Snowbank Enterprises, Inc. v. United States, 6 Cl. Ct. 476, 484
(1984) (finding that “[a]ny and all factors, which would cause a reasonable seller,” to pay a
different sale price should be considered in valuation).3 Evaluating the exact extent of that
impact awaits trial.
B. Loss of Access and Loss of Crossing Rights Damages
The United States also argues that Plaintiffs’ claim for loss of access or crossing rights
should be denied as a matter of law. (Def.’s Mot. at 33). The United States posits three

Plaintiffs quarrel that including OCSR’s continued operation in the “before” condition may
complicate the Court’s findings on liability. (Def.’s Mot. at 29–32). Judge Firestone previously
rejected the argument that the United States should only be liable for adding a trail use easement.
Loveridge IV, 149 Fed. Cl. at 71–72. The Court will not revisit this finding in part because the
United States concedes that it is no longer contesting the scope of liability in this case. (See OA
Tr. 6:13-21 (“we are not contesting liability”), 39:11–19 (same)). Moreover, although the Court
“may” reconsider its interlocutory decisions at any time before judgment “as justice requires,”
RCFC 54(b), factual evidence only justifies revisiting prior judgments when that evidence was
“previously unavailable” to the parties. Webster v. United States, 93 Fed. Cl. 676, 679 (2010).
The Parties have not shown they were unaware of OCSR’s operation when Judge Firestone’s
2020 opinion was issued, and the record indicates that OCSR’s agreement with POTB is
expressly incorporated in the trail use agreement and was therefore publicly available to both
parties. (Def.’s Mot. at 20 (“2012 OCSR Agreement is also specifically incorporated into the
Trail Use Agreement.”)); see also Loveridge IV, at 71–72. (“The government has not presented
any evidence that the POTB would not have abandoned rail service over the segment.”; and
“[t]he government has not identified ‘any evidence at all affirmatively indicating that the railroad
would have delayed abandonment . . .’”). And though Plaintiffs moved to reconsider Judge
Firestone’s 2020 decision, even that motion for reconsideration tellingly did not appraise Judge
Firestone of OCSR agreement or its potential impact on liability. (See Pls.’ Mot. for
Reconsideration, ECF No. 119). Withholding those facts from Judge Firestone was tactically
unsound and forecloses reconsideration now. Gindes v. United States, 740 F.2d 947, 949 (Fed.
Cir. 1984) (“[N]o litigant deserves an opportunity to go over the same ground twice, hoping that
the passage of time or changes in the composition of the court will provide a more favorable
result the second time.”) (internal citation and quotation omitted).
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supporting arguments, that: (1) Plaintiffs have continued to access their properties since the
NITU as they used to; (2) STIA, through both public statements and sworn testimony, indicated
that there are no plans to cut off Plaintiffs’ existing access; and (3) Plaintiffs have not produced
evidence showing that the NITU has impacted their crossing access. (Id.). Plaintiffs concede the
first point—that they have not been denied access or crossing rights. (Pls.’ Cross-Mot. at 30).
However, Plaintiffs ground their claim in the assertion that “there is nothing in place that
guarantees [their] continued access and crossing rights.” (Id. at 24). Plaintiffs point to a final
concept plan produced by STIA that lays outs possible construction scenarios: either a rail-totrail construction that will remove the existing rails and ties and replace the rail bed with the trail,
or a rail-with-trail construction, with the trail adjacent to the existing rail bed, constructed on
either the west or east side of the railbed. (Id. at 11). While STIA has taken no direct action
initiating any of these projects, the trail use agreement specifically provides that STIA will
construct the trail “in conformance with” the concept plan. (Id. at 13; Def.’s Mot. Ex. C).
From Plaintiffs’ perspective, the construction of a trail as a rail-with-trail option “would
result in significant damage to the Joslin and Jetty Fishery encroachments.” (Pls.’ Cross-Mot. at
18). For example, noting that the right-of-way covers the Joslin property’s driveway, parking
area, and 12 feet of the house, Plaintiffs assert that if STIA proceeds with building the trail on the
west side of the railbed, “Joslin will lose his house.” (Id. at 11–12). As to both parcels, Plaintiffs
present that the property owners have attempted to negotiate with POTB to further secure or
expand their access, but that the negotiations have not borne fruit because STIA, as the trail
operator, controls the final decision. (Id.).
Plaintiffs warn of the same potential conflict with the Jetty Fishery parcel which is dualuse property. (Id. at 14). This residence, which also serves as an active marina and RV park for
customers, has two crossings. (Id. at 12). One crossing is for customers of the Laviolette family
business to reach the property to camp at the RV park or to get to the marina to fish, and the
other pedestrian crossing is for Laviolette’s access to their house. (Id.) While the house’s deck is
within the right-of-way, two related buildings are “either on the edge of the right-of-way or
encroaching slightly,” Plaintiffs claim. (Id.). Because the primary parking for the marina
business is on the east side of the right-of-way while the RV park and marina are on the west
side, the Plaintiffs contend that either of the Concept Plan’s rails-with-trails options “will
significantly damage,” the property. (Id. at 12–13).
The United States’ assurances that the NITU has not changed Plaintiffs’ right to cross are
speculative. For example, the United States argues that any future interim trail use will not
“encumber any more surface than the railroad easement,” nor will it present “any additional
obstacles to crossing the corridor than the continuing easement.” (Def.’s Mot. at 34). The United
States also points to the language of the trail use agreement which preserves existing use
agreements, and to testimony indicating that under the status quo, the Plaintiffs have not been
denied access to their properties. (Id.). Plaintiffs do not dispute that CDJ and the Laviolette
family at least have “preexisting encroachment agreements and crossing agreements,” allowing
both owners “to continue to use their property when the railroad actively operated on its right-ofway;” Plaintiffs also aver that the trail use agreement explicitly “dictates that crossing rights will
continue in full force and effect.” (Pls.’ Cross-Mot. at 10, 25). Yet, Plaintiffs stress that the force
of these guarantees is undermined by the trail use agreement’s other provisions that give STIA

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the right to object to existing agreements and specifically if they are not “in conformance with
the Concept Plan.” (Id. at 25).
Finally, the United States claims that because Oregon law provides a mechanism for
obtaining continued access to landlocked properties, Plaintiffs are protected against any loss of
crossing rights and, as result, should be denied damages now. (Def.’s Mot. at 35). Section 8(d) of
the Trails Act, the United States argues, only preempts state law of abandonment and not other
state laws, such as those protecting access and crossing rights. (Id.). In sum, the United States
effectively believes that the appraisers must assume a trail will never be constructed while the
Plaintiffs assert that the appraisers must assume the trail has already been constructed. (See Pls.’
Cross-Mot. at 18). Both positions are self-servingly broad.
The United States’ position that the Trails Act does not automatically vanquish the
Plaintiffs’ access rights under state law is supported by caselaw. See e.g., James v. United States,
130 Fed. Cl. 707, 734 (2017) (“There is no support . . . in the Trails Act for plaintiffs’ argument
that, by operation of the Trails Act, plaintiffs lost their crossing rights [under state law] when the
NITU was issued.”). But a mere possibility of recourse to state law does not mean that Plaintiffs
are barred, as a matter of law, from recovering crossing rights damages. Rather, this simply
means that the harm Plaintiffs suffered is one characterized by the legal uncertainty of the future
use of the right-of-way as opposed to any actual present deprivation. See 4A Nichols on Eminent
Domain § 14A.02 (“The uncertainty is itself certain and if that uncertainty would influence a
prospective buyer detrimentally, then the very existence of uncertainty may be an admissible fact
that will permit recovery of damage.”). Therefore, although the parties’ experts may not testify
as to how this uncertainty will be resolved in the future (whether the trail will be built or not, and
in what form), they may testify as to how the uncertainty impacts market value. United States v.
14.38 Acres of Land, 80 F.3d 1074, 1078 (5th Cir. 1996) (recognizing “the viability of claims for
severance damages based on the likelihood that prospective buyers would fear hazards arising
from Government’s use” of property) (collecting cases); see also e.g., Morale v. States, 557
S.W.3d 569, 575 (Tex. 2018) (expert testimony is inadmissible when it “relates to ‘remote,
speculative, and conjectural uses’ of the property,” only to the extent that those uncertainties “are
not reflected in the present market value of the property.”) (citing State v. Schmidt, 867 S.W.2d
769, 773 (Tex. 1993)).
Plaintiffs correctly note that “there is nothing in place that indefinitely preserves” access
and improvements as they exist today, (Pls.’ Cross-Mot. at 17); the United States’ mere
promises—or rather, reliance on others’ promises—does not close this factual gap. In takings
cases, landowners are entitled to assume that the United States will make full use of all rights
that it has taken, even if it is not exercising that right in the present. See e.g., 2,953.5 Acres of
Land v. United States, 350 F.2d 356, 360 (5th Cir. 1965) (“The Government concedes, as it must,
that the landowners are entitled to assume in the condemnation suit that the Government will
make the full use physically possible of any easement” taken); Cheshire Hunt v. United States,
157 Fed. Cl. 101, 111 (Fed. Cl. 2022) (recognizing “the common sense understanding that an
easement holder may use the entirety of the burdened property for the purpose of the
easement.”). The United States is free to disabuse landowners of that notion, but it must do so in
accordance with principles of property law. Those principles mandate that if the United States
wishes “to limit the exercise of its rights under the easement to its current use or to the
prospective use envisaged by its expert,” it should commit to that position through “formal
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action,” such as a deed, release, or otherwise. 5 Nichols on Eminent Domain § 16.01 (citing
Spinner v. State, 4 A.D.2d 987, 167 N.Y.S.2d 731 (1957)); see also Dana R. Hodges Trust v.
United States, 111 Fed. Cl. 452, 459 (2013) (denying crossing rights damages when rights were
protected in “original recorded deeds” and therefore could not form basis for damages). The
United States may limit the scope of its taking, but that limitation only has force if enshrined in
an instrument that can be enforced against the United States. United States v. 2,648.31 Acres of
Land, 218 F.2d 518, 523 (4th Cir. 1955) (“When the condemnor limits the use of its easement
after the taking has occurred, this limitation can limit the damages recoverable, but only if the
limitation is lawfully enforceable by the condemnee.”); Portland Natural Gas Transmission Sys.
v. 19.2 Acres of Land, 195 F. Supp. 2d 314, 322 (D. Mass. 2002) (finding that “[t]he taking
authority is free to limit the scope of access either before the taking or, with the landowner’s
agreement, after the taking.”) (emphasis added).
On the other hand, Plaintiffs also incorrectly assert that the appraisers must assume that
the trails are already constructed. In Boyer v. United States, which also involved analysis of
Oregon law, the Court concluded that appraisals should determine (1) “what a willing buyer
would pay for the subject properties,” (2) “whether such a buyer would be concerned about
potential litigation over the right or location of access across the trail,” and (3) “whether this
concern would then translate to a diminution in the value of the property.” 135 Fed. Cl. 121, 130
(2017). As in Boyer, expert appraisal shall not take as a given that “plaintiffs lost all crossing
rights to their properties upon issuance of the NITU,” but neither should it exclude the
opportunity to show that a reasonable buyer’s assessment of the market value may still be
impacted by the possibility of that scenario occurring. Id. It is not difficult to imagine that a
reasonable buyer can find the uncertainty surrounding the encroachments to impact the value of
the properties, especially when STIA’s concept plan itself magnifies this risk by specifically
identifying the Jetty Fishery property as an area where building encroachments “may have a
substantial impact on Trail Alignment and design.” (Def.’s Mot. Ex. K at 34 (emphasis added)).
A reasonable buyer however is equally likely to be influenced by any facts that can point to the
low probability of a trail ever being constructed. Simply put, the trail use agreement, changed the
otherwise guaranteed legal status of the Plaintiffs crossing rights, and Plaintiffs may be entitled
to compensation if they can show that market value reflects the change.
Contrary to the United States’ argument, recourse to state law in case of future conflict
cannot absolve the United States of future use damages. Such a general rule cannot be endorsed
because the ease of recourse to state law for recovery varies greatly from state to state; Plaintiffs
assert that establishing an easement by necessity under Oregon law could be burdensome. (Pls.’
Cross-Mot. at 25). It is the appraisers’ task to determine if a reasonable buyer would be
concerned about such potential loss and the difficulties of remedying it in a manner that is
reflected in the market value of the properties. See e.g., Dana R. Hodges Trust, 111 Fed. Cl. at
458–59 (“[I]f the limitations on any crossing rights to which the various Plaintiffs may be
entitled by operation of state property law diminish the highest and best use of their lands . . .
then such diminished value ought to be reflected in the parcels’ appraisals in the ‘after’
condition”); Moore v. United States, 61 Fed. Cl. 73 (2004) (appraisal must ask “would a
reasonable buyer be concerned about the potential loss of access across the Trail?”). Therefore,
Plaintiffs position that the appraisals must assume that the trail is already built contorts the realworld conditions, as much as the United States’ position does. Like in Boyer, the appraisal shall

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not assume that the Plaintiffs have already lost their access but must not ignore the possibility
that they might in the future. 135 Fed. Cl. at 130.
C. Uncertainty about the Salmonberry Trail Project
The United States also argues that Plaintiffs are not entitled to damages for existing
improvements or future development plans. (Def.’s Mot. at 37). Plaintiff OMI claims that the
NITU agreement impacts its plans to construct a new path over the railroad corridor to its
property; the United States retorts that there is no evidence that such improvements are limited
by the terms of the NITU agreement or that OMI will be prevented from doing so. (Id.) The
United States’ argument is premised on a finding that the Trails Act allows landowners to share
the trail use easement with the operator so long as landowners’ use does not “materially
interfere” with the interim trail use or a future rail use. (Id. at 37–41). The United States also
argues that Plaintiffs have not provided evidence that their existing improvements or future
developments would materially interfere with rail or trail use, and as such cannot incur damages.
(Id.). In support, the United States relies on Plaintiffs’ testimony that their parking or
improvement use has not changed since the NITU. (Id. at 42). Because Plaintiffs have not been
asked to leave the corridor by POTB, OCSR, or STIA, and because STIA testified that it has no
concrete plans for proceeding with any trail projects, the United States purports that any claims
about future loss are unsupported and speculative. (Id. at 42).
The United States insists that any appraisal must consider that, despite the agreement
with STIA, no trail design plans have been finalized and no funding for trail construction has
been approved. (Id. at 20). Plaintiffs, on the other hand, point to the Concept Plan developed in
2015 which lays out the potential designs for the Salmonberry Trail. (Pls.’ Cross-Mot. at 25;
Def.’s Mot. Ex. J). The United States responds that the layout is “a concept[,] . . . not reality,”
(Def.’s Mot. at 20), and buttresses that argument with the text of the Concept Plan which notes
that the Concept Plan is to serve not as a “single solution,” but as a “guide” for other agencies
and advocate to “develop[] more specific plans and designs . . .” for trail use. (Def.’s Mot. Ex. J
at 6). Furthermore, the United States relies on testimony from Lisa Sumption, the director of the
Oregon Parks and Recreation Department and a co-convener of STIA, stating that STIA has not
made a final determination as to the final layout of the trail and does not anticipate beginning
construction until 2026 or while OCSR operates the scenic train. (Def.’s Mot. Ex. I at 41:14–
42:17, 51:11–14, 69:16–70:1, 70:14–19). Ms. Sumpton also testified that STIA does not have
any current sources of funding for trail construction and that that in her opinion granting funding
would be a “miracle.” (Id. at 51:15-52:9, 58:11-16, 59:4-17, 63:21-64:9).4

The United States also points the Court to a statement from Ms. Sumption: “…this could
probably be not even in my lifetime by the time the trail is actually developed.” (Def.’s Mot. Ex.
I at 34:6-1). The Court is not concerned with the lifespan of any of the parties involved but
instead with the lifespan of the rights taken. Ms. Sumpton’s testimony does not assuage all
concern about a future conflict. See Smith v. Tallahassee, 191 So. 2d 446, 447–48 (Fla. 1966)
(holding that mere informal privileges to use property in a certain manner cannot be used to
reduce damages unless the owner is given a legally binding right to use the property in the
4

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The United States’ position that Plaintiffs are legally barred from recovering future use
damages because there is no current interference with their present rights is unfounded. As the
Court has previously stated, just compensation damages are viewed from the perspective of a
reasonable buyer and any impact the taking might have on the fair market value of the property.
United States v. Va. Elec. & Power Co., 365 U.S. 624, 633 (1961) (quoting Miller, 317 U.S. at
374) (the standard for damages is “what a willing buyer would pay in cash to a willing seller”).
Therefore, valuation at trial, not summary judgment, determines whether Plaintiffs’ theory of
injury would have an impact on how a reasonable buyer values the property, even if the
“possibility of future conflict . . . is remote.” Balagna v. United States, 138 Fed. Cl. 398 (2018).
The United States’ insistence that it has effectively gained nothing from the transaction to
date is immaterial. As Justice Holmes famously noted, in assessing takings damages, the
question is “[n]ot, what the taker has gained[,]” but “[w]hat has the owner lost?” Boston
Chamber of Commerce v. Boston, 217 U.S. 189, 195 (1910); see also The Yellow Book, § 4.6.3.
Here, Plaintiffs lost whatever value could be assigned to their ability to market their properties to
potential buyers as unencumbered and free of the easements imposed by the NITU for the next
99 years. (See Def.’s Mot. Ex. C at 5–6, §§ A(1)-(2), B (indicating that the trail use agreement
leases the railroad corridor to STIA for a period of 99 years)); see also Howard v. United States,
106 Fed. Cl. 343, 368 (2012) (“When the STB issued the NITU, the possibility that plaintiffs’
unencumbered right to their property would ever become a reality became hypothetical,” and as
a result, “for all practical purposes, [the United States] has encumbered plaintiffs’ property rights
in perpetuity.”). Thus, the appraisers’ task is to determine what that value is. They might
conclude, as the United States claims, that the possibility of future conflict over crossing rights
or improvements is so remote as to not be observable in comparable sales. Consequently, the
Court denies the United States’ motion to find that Plaintiffs are barred as a matter of law from
recovering damages associated with future use and loss of improvements.
III.

Conclusion

Therefore, the Court GRANTS-IN-PART and DENIES-IN-PART the United States’
Motion for Partial Summary Judgment, (ECF No. 178), and GRANTS-IN-PART and DENIESIN-PART Plaintiffs’ Cross-Motion for Summary Judgment, (ECF No. 180). Specifically, the
Court finds that:

manner contemplated); Joseph T. Waldo and Jeremy P. Hopkins, Eminent Domain and Land
Valuation Litigation: the Claim of Severance Damages in Easement Takings (2004) (“A
condemnor’s non-binding promises to restrict its uses of the rights it takes will not reduce the
damages to the property and should not be considered.”) (collecting sources); see also Cheshire
Hunt, 157 Fed. Cl. 111; 7 Nichols § 1B.06 (rev. 3d ed. 2002) (“Courts have overwhelmingly held
that where the property owner does not accept the condemnor’s promises or stipulations, those
promises or stipulations are ineffective and do not modify what is taken or mitigate damages
owed.”).
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(1) The legal instruction for expert appraisal may assume that in the “before” scenario the
properties are burdened by the OCSR’s scenic train until 2026 with potential for
future extensions as stated in the trail use agreement.
(2) The legal instruction for expert appraisal may assume potential interference with
crossing rights and loss of access and show the impact of any uncertainty over
crossing rights on the properties’ market values.
(3) The legal instruction for expert appraisal may assume potential loss of improvements
and show the impact of any uncertainty over STIA’s future exercise of its right on the
properties’ market value.
The Court ORDERS the Parties to meet and confer and submit a joint status report by
August 9, 2023. The joint status report shall include the parties’ proposed schedule for expert
discovery, pretrial proceedings, as well as a trial date and location.
IT IS SO ORDERED.
s/
David A. Tapp
DAVID A. TAPP, Judge

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