Atkins et al v. United States of America

Filing 27

MEMORANDUM AND ORDER. (See Full Order.) IT IS HEREBY ORDERED that plaintiffs' motion for class certification 11 is denied. IT IS FURTHER ORDERED that this case is set for an additional scheduling conference on Friday, August 19, 2016 at 11:0 0 a.m. in Chambers 14 South. In advance of the scheduling conference counsel must meet and confer and attempt to agree on a schedule for all matters required to complete this case, including all matters referenced in the original Order Setting Rule 16 Conference that was issued on August 24, 2015 [docket entry # 5 ]. Counsel shall file a joint proposed scheduling plan no later than Tuesday, August 16, 2016. Signed by District Judge Catherine D. Perry on 7/18/2016. (CBL)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
ROBERT J. ATKINS, et al.,
Plaintiffs,
vs.
UNITED STATES OF AMERICA,
Defendant.

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Case No. 4:15 CV 933 CDP

MEMORANDUM AND ORDER
This rails-to-trails case is before me on the plaintiffs’ motion for class
certification. Plaintiffs seek compensation for the government’s alleged taking of
their private property for public use when the Surface Transportation Board,
following the procedures set out in the National Trails System Act, authorized use
of an abandoned rail line as a recreational trail. I held a hearing on plaintiffs’
motion on March 3, 2016. Because plaintiffs have failed to show that questions
common to the class predominate over questions affecting only individual
members, they have failed to satisfy Fed. R. Civ. P. 23(b)(3), and I will deny the
motion for class certification.
Background
Plaintiffs are owners of nine parcels of property along a 144.3-mile corridor
in the State of Missouri which was formerly used as a railroad line by the Missouri
Central Railroad Company and the Central Midland Railway Company. The

railroad line operated over numerous parcels of private property through various
easements. Plaintiffs seek to represent a class that would include themselves and
more than 325 other Missouri property owners whose property is similarly situated
along the former railroad line. In February of 2015 a Notice of Interim Trail Use
(NITU) was issued, which triggered plaintiffs’ claim here. They contend that the
use of the National Trails System Act to allow the abandoned rail line to be used as
a trail interferes with their exclusive rights over their properties and is therefore a
government taking for which they are owed compensation under the Fifth
Amendment to the United States Constitution.
The National Trails System Act, 16 U.S.C. §§ 1241-1251 (2000), allows
abandoned railroad lines to be converted to recreational trails:
In general terms, once a railroad abandons use of its track, the fee
owners of the burdened estate automatically gain their reversionary
interest in the easement. The aegis behind the Trails Act is
exploitation of railroad property interests by granting easements to
third parties for alternative uses of the land where railroad tracks
previously traversed. The Trails Act preserves the railroad’s right-ofway by affording a State, municipality, or private group an
opportunity (1) to negotiate with a railroad (2) to assume temporary
managerial responsibility (3) to implement an interim use of the land
(4) to build recreational trails. If an agreement is reached, the interim
trail 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) (2000). This process has been
termed “railbanking.”
The railbanking process typically starts when a railroad files an
application, or other documentation, with the Surface Transportation
Board (the “STB”) stating its intention to abandon part of a line. The
STB then publishes a notice of exemption in the Federal Register. To
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avoid abandonment of the track, and take advantage of the Trails Act,
a state, municipality, or private group can file a railbanking petition
with the STB. If the railbanking petition is sufficient, and the railroad
agrees to negotiate, the STB issues a NITU, which allows the railroad
to salvage track and equipment, discontinue service, and prepare for
the interim use without actually abandoning the railroad line. If
subsequent negotiations between the railroad and the applicant for
interim trail use are successful, the NITU extends indefinitely; the
STB retains jurisdiction for potential future railroad use; and the
reversionary interests of the surrounding landowners, which would
ordinarily vest upon abandonment of the rail line by the railroad,
continue to remain dormant until actual abandonment.
Fauvergue v. United States, 86 Fed. Cl. 82, 85 (2009) (footnote and citations
omitted), rev’d on other grounds sub nom. Bright v. United States, 603 F.3d 1273
(Fed. Cir. 2010).
The plaintiffs contend that under Missouri property law the Railroads’
abandonment of the rail line would terminate their respective easements. That
would result in the property interests in the affected properties being reverted to the
property owners, who would then enjoy exclusive rights over their private property
– free of any easements. Plaintiffs argue that the government’s issuance of the
NITU interfered with this exclusive right to own and enjoy their property.
Most claims raised by property owners seeking compensation because of
the Trails Act have been brought in the Court of Federal Claims under the Tucker
Act, 28 U.S.C. § 1491(a)(1). See, e.g., Brown v. United States, 126 Fed. Cl. 571
(2016), and cases discussed there. This case is brought in this Court under the
“Little Tucker Act,” which provides concurrent jurisdiction in the district courts
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for claims against the government that do not exceed $10,000. 28 U.S.C. §
1346(a)(2). Accordingly, to proceed in this Court in this takings case, each
individual claim here must either not exceed $10,000 or the respective property
owner must waive any claim exceeding $10,000.
There are two actions currently pending in the Court of Federal Claims that
involve the same NITU and the same rail line at issue here: Abbott v. United States
(364 plaintiffs/582 parcels of land)1 and Behrens v. United States (57 plaintiffs/71
parcels of land).2 Those cases are not proceeding as class actions. Instead, all
plaintiffs and parcels are proceeding by joinder through the filing of amended
complaints.
Discussion
A party seeking class certification must satisfy the four prerequisites of Rule
23(a), Federal Rules of Civil Procedure: (1) numerosity, (2) commonality, (3)
typicality, and (4) adequacy of representation. In addition to the Rule 23(a)
prerequisites, class-seeking parties must also satisfy one of the provisions of Rule
23(b). The plaintiffs here invoke Rule 23(b)(3): that “questions of law or fact
common to the class members predominate over any questions affecting only
individual members, and that a class action is superior to other available methods

1
2

Case No. 1:15CV211 (Fed. Cl.).
Case No. 1:15CV421 (Fed. Cl.).
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for fairly and efficiently adjudicating the controversy.”3 The party seeking class
certification bears the burden of proving by a preponderance of the evidence that
the requirements of Rule 23 are met. Luiken v. Domino’s Pizza, LLC, 705 F.3d
370, 371 (8th Cir. 2013); Jackson v. Crawford, No. 12-4018-CV-C-FJG, 2015 WL
2173646, at *2 (W.D. Mo. May 8, 2015).
Although defendants challenge plaintiffs’ ability to show the numerosity and
typicality requirements of Rule 23(a), I conclude that the obvious lack of a
predominant common question under Rule 23(b)(3) is a sufficient basis to deny the
motion, so I need not discuss the Rule 23(a) requirements.4
The plaintiffs’ claims all arise out of the same NITU and so there is no doubt
that at least one common question exists. The initial commonality requirement
under Rule 23(a) is not stringent: “In Dukes, the Court acknowledged that a single
common question ‘will do’ for purposes of rule 23(a)(2),” Ebert v. General Mills,
Inc., -- F.3d. --, No. 15-1735, 2016 WL 2943193, at *4 (8th Cir. May 20, 2016)
(quoting WalMart Stores, Inc. v. Dukes, 564 U.S. 338, 359 (2011)).
It is the more demanding predominance requirement of Rule 23(b)(3) that is
the crucial issue in this case. As the Supreme Court noted in Comcast Corp. v.
3

Plaintiffs’ motion and brief argued that this case also meets the requirements under Rule
23(b)(2) because the government had acted on grounds that applied generally to the class, but at
the hearing counsel acknowledged that provision is not applicable because plaintiffs do not seek
declaratory or injunctive relief. See WalMart Stores, Inc. v. Dukes, 564 U.S. 338 (2011).
4
Certainly in most cases, more than 300 plaintiffs would be considered sufficiently numerous to
meet the Rule 23(a)(1) requirement, but Brown, supra, and other rails-to-trails cases indicate that
issue may not be as simple as most cases that come before this Court. In any event, I need not
decide it.
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Behrend, 133 S. Ct. 1426 (2013), it is the court’s “duty to take a ‘close look’ at
whether common questions predominate over individual ones.” Id. at 1432
(quoting Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 615 (1997)).
The predominance inquiry under Rule 23(b)(3)
calls upon courts to give careful scrutiny to the relation between
common and individual questions in a case. An individual question is
one where “members of a proposed class will need to present
evidence that varies from member to member,” while a common
question is one where “the same evidence will suffice for each
member to make a prima facie showing [or] the issue is susceptible to
generalized, class-wide proof.”
Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036, 1045 (2016) (quoting 2 W.
Rubenstein, Newberg on Class Actions § 4:50, pp. 196-97 (5th ed. 2012)). “When
‘one or more of the central issues in the action are common to the class and can be
said to predominate, the action may be considered proper under Rule 23(b)(3) even
though other important matters will have to be tried separately, such as
damages[.]’” Id. (quoting 7AA C. Wright, A. Miller, & M. Kane, Federal Practice
and Procedure § 1778, pp. 123-24 (3d ed. 2005)) (emphasis added).
To establish their takings claim here, plaintiffs will be required to prove the
following elements: 1) that the government took action in relation to particular
segments of the railroad line, 2) that the property owners own the fee interest in the
land abutting the segments or underneath, and 3) the amount of compensation that
is just. See Preseault v. United States, 100 F.3d 1525, 1550 (Fed. Cir. 1996);
Rogers v. United States, 90 Fed. Cl. 418, 427-28 (2009). “A court must analyze
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[the] elements in order to determine which are subject to common proof and which
are subject to individualized proof.” In re High Tech. Emp. Antitrust Litig., 289
F.R.D. 555, 564 (N.D. Cal. 2013) (internal quotation marks and citation omitted).
From the evidence presented, it appears that the only common question in
this case is whether there was government action that affected segments of the
railroad line at issue. While this common question may be the “glue” that holds
the claims together, it is not an open question, given that the government concedes
that it engaged in the triggering action, that is, the issuance of the NITU on
February 25, 2015.
What remains to be litigated is whether each plaintiff owns the fee interest in
each affected parcel (liability) and, if so, what compensation is just (damages).
Because the determination of these remaining questions requires highly
individualized proof, it cannot be said that the sole common question in this action
– which itself is conceded – predominates over questions affecting only the
individual landowners.
At the class certification hearing, plaintiffs’ counsel said that his team has
examined the deeds relating to all of the properties affected by the NITU and
concluded that approximately 325 parcels fit within the parameters of this action,
that is, that the railroad line operated by way of easement over these privately
owned properties. Plaintiffs contend that there are three methods by which the
easements exist in this case: 1) condemnation, 2) prescriptive easement, and 3) $1
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deeds. Plaintiffs aver that there are 69 putative class members in the first two
categories and 254 putative class members with $1 deeds.5
Plaintiffs argue that determining fair market value can be done by appraisals
on all properties using one set of instructions. Each individual property will be
given an actual appraisal; there will be no estimates. With each appraiser
operating under the same set of instructions, plaintiffs contend that there will be no
differing methodologies in measuring damages. From these appraisals, the
properties would be placed into groups based on the properties’ characteristics,
e.g., commercial, residential, farmland, etc. In the event the matter goes to trial,
plaintiffs intend to present that evidence to the jury in groups and using
representative parcels from each group. From the jury’s verdict – group by group
– all properties would be awarded compensation as determined by the jury for each
respective group.
The government contends that individual litigation will be required with
regard to both the ownership issues and valuation. It posits that an examination of
each deed relating to each affected parcel would be necessary to determine
ownership interest on the date of valuation; the $1 deeds with the Railroads would
need to be examined individually to determine whether additional, non-monetary
consideration was provided, which may mean that the fee title was conveyed to the
5

According to plaintiffs, there are 21 property owners who have deeds showing consideration
exceeding $1, and those may require specific litigation, because there is some contention that a
deed listing more than $1 may indicate that the Railroads actually own the fee.
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Railroads; and examination of the individual deeds would be necessary to
determine if trail use exceeds the scope of the easement for that particular parcel.
With regard to valuation, the government identified several characteristics
that will be relevant to determining the value of the properties at issue, including
environmental factors, zoning, size, location, which county, sale history, severance
issues, and proximity issues. The government contends that while appraisers
would be operating under a uniform standard, the written standard itself is over
100 pages long because it must account for all of the different variables that must
be considered when assessing property values.
Even if plaintiffs’ proffered single methodology were used to value all of the
properties, the appraisers would be required to consider numerous variables unique
to each individual property. Indeed, “[e]very tract of land is recognized as having
a unique value[.]” Kay v. Vatterott, 657 S.W.2d 80, 82 (Mo. Ct. App. 1983).
Determining which variables apply to each property would require highly
individualized proof.
Two relatively recent Court of Federal Claims rails-to-trails cases faced
issues similar to those here. In Brown v. United States, 126 Fed. Cl. 571 (2016),
the court found that common questions did not predominate because, among other
things, individual determinations of the scope of the railroad’s easements were
required. In Turner v. United States, 115 Fed. Cl. 614 (2014), the court noted that
the threshold issue of liability regarding the trail had already been resolved in other
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actions, but Rule 23(b)(3) was not satisfied given that all that remained for the
court’s determination were questions of “liability and just compensation with a
factual analysis that is unique to each individual claim.” Turner, 115 Fed. Cl. at
618.6
Here, as in Turner and Brown, the factual analysis regarding the actual
ownership interest in each of the more than 325 properties at issue (liability), as
well as to the encumbered and unencumbered values of each property (damages),
will be unique to each individual claim and subject to individualized proof. Where
the only common question has been resolved, it cannot be said to predominate over
the highly individualized questions that remain. Indeed, as recognized in Ebert,
highly individualized factual questions regarding damages may overwhelm
common questions of liability to such a degree that class certification is
inappropriate. 2016 WL 2943193, at *4-5. Although plaintiffs contend that they
can present representative samplings for purposes of assessing damages, I question
whether the use of such samplings would be permissible under Bouaphakeo in the
circumstances of this case, given the proposed development of adequate,
individualized evidence as to each property’s value.7
6

The Eighth Circuit’s recent Ebert case – while not involving rails-to-trails – is similarly
instructive. That case involved allegations of injury from environmental contamination, and the
court found that individual issues of injury and causation predominated over the common
questions related to the contamination itself. 2016 WL 2943193.
7
As I mentioned briefly at the class certification hearing, I also have concerns that, in the context
of this particular case, any class-wide determination might not be binding on absent class
members who do not opt out. Even following the appraisal process plaintiff describes, any
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Accordingly,
IT IS HEREBY ORDERED that plaintiffs’ motion for class certification
[11] is denied.
IT IS FURTHER ORDERED that this case is set for an additional
scheduling conference on Friday, August 19, 2016 at 11:00 a.m. in Chambers
14 South. In advance of the scheduling conference counsel must meet and confer
and attempt to agree on a schedule for all matters required to complete this case,
including all matters referenced in the original Order Setting Rule 16 Conference
that was issued on August 24, 2015 [docket entry # 5]. Counsel shall file a joint
proposed scheduling plan no later than Tuesday, August 16, 2016.

CATHERINE D. PERRY
UNITED STATES DISTRICT JUDGE
Dated this 18th day of July, 2016.

absent class member could later say that her claim was actually for more than $10,000, and so
she did not need to opt out of a class covered by the Little Tucker Act. Although plaintiffs
propose that putative class members can waive claims over $10,000, that would not solve the
problem for potential class members who did not opt out but later dispute a valuation related to
their own property and then challenge whether they are bound by any class-wide resolution of
this case.
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