Schneider v. USA

Filing 509

MEMORANDUM AND ORDER - that the defendant's motion for summary judgment (Filing No. 490 ) is denied. Ordered by Senior Judge Joseph F. Bataillon. (LKO)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
WILLIAM SCHNEIDER, DAVID
SCHWANINGER, and DEWANE SPILKER,

8:99CV315

Plaintiffs,
vs.

MEMORANDUM AND ORDER

UNITED STATES OF AMERICA,
Defendant.
This matter is before the Court on defendant United States of America’s (the
Government”) motion for partial summary judgment, Filing No. 490. This is a takings
action under the National Trails System Act, 16 U.S.C. §§ 1241–1251. This Court has
jurisdiction under 28 U.S.C. § 1346(a)(2) (the “Little Tucker Act”).1
I.

BACKGROUND
A.

Procedural History

The “Rails-to-Trails Act,” 16 U.S.C. § 1247(d), permits the conversion of disused
railroad corridors into trails for hiking, biking, and other recreational activities. Plaintiff
William Schneider filed this action in 1999, alleging, on his behalf and on behalf of others
similarly situated, a taking of private property for public use without just compensation in
violation of the Fifth Amendment, in the Government’s issuance of Notices of Interim Trail

1

The Tucker Act provides jurisdiction in the United States Claims Court for any claim against the Federal
Government to recover damages founded on the Constitution, a statute, a regulation, or an express or
implied-in-fact contract. See 28 U.S.C. § 1491(a)(1) (1982 ed.). The Little Tucker Act, 28 U.S.C. §
1346(a)(2), creates concurrent jurisdiction in the district courts for such claims not exceeding $10,000 in
amount. A taking is founded on the Constitution and is within this Court’s jurisdiction. See Preseault v.
I.C.C., 494 U.S. 1, 11-12 (1990) (“Preseault I”).

1

Use or Abandonment (“NITUs”) for 15 rail corridors in Nebraska. He filed a second
amended class action complaint on July 2, 2003.
On July 21, 2000, this Court certified a statewide class action under Rule 23(b)(3)
on behalf of:
All persons who own an interest in land constituting a railroad corridor in the
State of Nebraska, and which is now occupied or controlled for trail use
pursuant to the National Trails System Act, and who have been damaged
in the amount of $10,000 or less by being deprived of their rights to
possession, control, and enjoyment of their land as a result of a Trail Use
Order, or who waive claims exceeding $10,000. This class is certified for
the limited purpose of determining whether and under what circumstances
an unconstitutional taking occurred. This class excludes railroad companies
and their successors in interest; persons who have filed, intervened, or
choose to intervene or opt into separate lawsuits against the United States
for compensation in the same interests in land.
Filing No. 75, Mem. and Order at 15-16. The class action was certified for the limited
purpose of determining “whether the Rails-to-Trails Act, which is an act of Congress,
constitutes taking of private land for public use, which necessarily involves questions of
abandonment and whether interim trail use is considered a railroad purpose and/or use.”
Filing No. 75, Memorandum and Order at 7. The Court’s certification order expressly left
title issues and damages to individual determination. Id. at 10.
In 2003, the Court ruled on the parties’ cross-motions for summary judgment on
the takings issue. Filing No. 216, Memorandum and Order. The Court held that federal
law governs the issue of abandonment and the Rails-to-Trails Act “requires that interim
trail use be treated like a discontinuance rather than an abandonment.” Id. at 10. The
Court found “the Rails-to-Trails Act, and the procedures set forth therein, preclude the
finding of abandonment in circumstances where a railroad holds a right-of-way as an
easement and then applies for a NITU” from the Surface Transportation Board (“STB”),
but “the imposition of a new easement, a ‘linear park,’ via the Rails-to-Trails Act, results
2

in a compensable taking from class members who own land adjacent to the rights-of-way
held by easement, regardless of whether the railroads abandoned those rights-of-way.”
Id. at 10-11. The Court concluded that the use of a railroad right-of-way as a recreational
trail “constitutes a new easement that entitles the landowners to reasonable
compensation.” Id. at 14. The Court found the appropriate measure of compensation
would be the damages that the plaintiffs’ property sustained by the new use, if any, over
and above the damages caused by the previously authorized use.2 Id. at 16. The Court
later denied motions reconsider its ruling on the abandonment issue and to modify to its
measure-of-damages determination. Filing No. 226, Motion to Reconsider, Filing No.
240, Memorandum and Order; Filing No. 347, Motion for Judgment and determination of
measure of damages; Filing No. 358, Memorandum and Order.
The parties thereafter in 2017 jointly moved to decertify the class and for approval
of a plan to notify potentially eligible plaintiffs in order to resolve individual claims. See
Filing No. 422, Joint Motion; Filing No. 423, Brief. Noting that the Court had determined
the issue common to the class, the parties advocated for a joinder mechanism to
efficiently resolve the plaintiffs’ claims, stating that valuation issues were unique to each
parcel. Filing No. 423, Brief at 1, 13.3 The parties outlined their efforts to determine

2

The Court further found there was no compensable taking with respect to class members whose land
adjacent to a trail was acquired by the railroad in fee simple and granted summary judgment to the
Government on claims that related to parcels of land that had been acquired by the railroad via land grants
from the Federal government in 1856 or 1864. Filing No. 216, Memorandum and Order at 18-19.
The parties argued that in order to “find a taking giving rise to liability under the Fifth Amendment in a
rails-to-trails case, the court must perform a three-part analysis outlined by the Federal Circuit in Preseault
v. United States, 100 F.3d 1525, 1533 (Fed. Cir. 1996) (‘Preseault II’)[,]” and, under that test, “[t]o prevail,
a plaintiff must demonstrate that the railroad held only an easement, rather than a fee simple estate, on
plaintiff’s property, and that either the easement did not encompass future use as a public recreational trail
or that it terminated prior to the alleged taking.” Filing No. 343, Brief at 2.
3

3

ownership and valuation of the rail corridor-adjacent parcels, including reviewing deeds
and hiring an appraiser. Id. at 9-10. They also stated that the Court had resolved issues
involving whether certain categories of deeds conveyed easements or fee interests based
on state law but noted that some issues regarding the interpretation of particular deeds
remained outstanding. Id. at 9 n.5. The parties stated they had been unable to agree on
how to handle the seven temporary-takings trails where a NITU issued but no trail use
agreement was reached. Id. at 10; see also Filing No. 331, Memorandum and Order;
Filing No. 343, Status Report at 2-3. In discussing those remaining issues, the parties
stated they were reviewing the recent Federal Circuit decision in Caquelin v. United
States, 697 Fed. Appx. 1016 (Fed. Cl. 2017) (“Caquelin I Appeal”).4 Filing No. 423 at 3.
Along with the decertification motion, the parties also submitted a Joint Case
Management Plan (“the Plan”). Filing No. 425. As relevant herein, the Government
stated the parties would first resolve title and mapping issues under the appraisal and
valuation methods followed with respect to claims where a trail agreement had been
reached, and would then address eligibility and compensation for the temporary-takings
trails. Id. at 5. The parties indicated that the Government anticipated seeking discovery
under the multi-factor approach set out in Arkansas Game & Fish Comm’n v. United

4

As discussed infra at 16-17, that case was an appeal of the Federal Court of Claims finding in Caquelin
v. United States, 121 Fed. Cl. 658, 666 (2015) (“Caquelin I”), that a per se physical taking had occurred
where a NITU issued and was in place for a six-month period, but no trail use agreement was ultimately
reached. The Federal Circuit vacated and remanded the action for more findings. Caquelin I Appeal, 697
Fed. Appx. at 1020. Subsequently, the Court of Claims reached essentially the same decision on remand,
applying both a per se takings and regulatory takings analysis. Caquelin v. United States, 140 Fed. Cl.
564, 578-80 (Fed. Cl. 21018) (“Caquelin II”), appeal docketed, No. 2019-1385 (Fed. Cir. Jan. 9, 2019)
(“Caquelin II Appeal”). The Government’s appeal was recently argued. Id., No. 19-1385, Docket Entry
121, submitted after oral arg. (Fed. Cir. Mar. 5, 2020).

4

States, 568 U.S. 23, 38–40 (2012)5 and in Penn Central Trans. Co. v. City of New York,
438 U.S. 104, 124 (1978),6 and “[o]nce the parties have had the opportunity to review the
potentially eligible parcels along trails where no trail use agreement has been reached,
they will develop a proposed plan and schedule for resolving issues regarding liability and
just compensation for these trails.” Id. The Court granted the decertification motion and
approved the Plan on September 19, 2019. Filing No. 426.
Following decertification of the class, the plaintiffs filed an amended complaint
identifying the individual claimants along the applicable rail corridors. Filing No. 438,
Amended Complaint; see also Table of Trails and Date of Ownership (“Trails Table”),
ECF No. 424-3. Since then, the parties have filed status reports detailing efforts to map
and appraise the parcels of land along the corridors and to evaluate the value of the
claims. See, e.g., Filing Nos. 432, 442, 444, 448, 461, 469, 471, 473, 475, 477. A task
list submitted to the Court on November 16, 2018, indicated, with respect to the three
trails at issue, that the parties anticipated that appraisal and negotiation for settlement
would be completed by June 25, 2019. Filing No. 458-1. On August 16, 2019, the parties
informed the Court that they did not anticipate the need for appraisal work on Trails, 6, 9,
11, and 13 in order to reach a settlement, but alluded to a need for Court involvement.
Filing No. 480, Status Report at 3-4.
B.

The Parties’ Arguments

5

In Arkansas Game, in the context of repeated controlled flooding for water management purposes, the
Supreme Court found “simply and only, that government-induced flooding temporary in duration gains no
automatic exemption from Takings Clause inspection.” Id., 568 U.S. at 38.
In Penn Central, the Supreme Court applied what is “essentially [an] ad hoc, factual inquir[y],” in a
regulatory takings case. Penn Central, 438 U.S. at 124. Penn Central listed three factors to be considered
in determining if a non-categorical taking occurred: (1) “[t]he economic impact of the regulation on the
claimant”; (2) “the extent to which the regulation has interfered with distinct investment backed
expectations;” and (3) “the character of the government action.” Id.
6

5

The Government now moves for partial summary judgment on the claims of
temporary taking filed by plaintiffs Roland J. Saathoff; Gary A. Vocasek; Ronald D.
Ostdiek, Dolores J. Morrison, and Saundra A. Ostdiek with respect to Trails 6, 9, and 11.
It first argues that the issuance of the NITUs on Trails 6, 9, and 11 was not a taking of
these plaintiffs’ property. In connection with that argument, it contends these plaintiffs
cannot prove an element of their claims—that the NITUs caused them damage. It next
argues that these plaintiffs cannot establish that a taking has occurred under the multifactor balancing test set out in Arkansas Game, 568 U.S. at 38-40.
In response, the plaintiffs argue that it is well established that a temporary taking
is compensable. They also argue that Arkansas Game has been interpreted narrowly
and does not apply to a per se taking. Further, they argue the Government should be
estopped from now arguing that there has been no taking, because it argued to the
contrary earlier in this action.
The Government replies that it does not raise the arguments it raises in Caquelin
and reiterates its argument that the plaintiffs have failed to prove an element of their
claims.
C.

Facts

The parties have generally agreed to each other’s respective substantive
statements of undisputed fact. See Filing No. 491, Defendant’s Brief at 9-12; Filing No.
499, Plaintiffs’ Brief at 2-4, Filing No. 503, Defendant’s Brief at 2-3. The parties have
identified (1) Roland J. Saathoff; (2) Gary A. Vocasek; and (3) Ronald D. Ostdiek, Dolores
J. Morrison, and Saundra A. Ostdiek (“the Ostdieks”) as claimants potentially eligible for

6

just compensation for Trails 6, 9, and 11. These are the only landowners presently eligible
for compensation along those trails. See Filing No. 491, Defendant’s Brief at 9 n.3.
With respect to Trail 6, the parties agree that the Trail 6 rail corridor is a 1.8-mile
segment of a rail line formerly operated by the Union Pacific Railroad Company (“U.P.”)
that extends from milepost 17.6, near Papillion, Nebraska, to milepost 19.4 in Sarpy
County, Nebraska.

In an abandonment proceeding, the Interstate Commerce

Commission (“ICC”), the STB’s predecessor, accepted the request of Nebraska Trails
Council for the imposition of interim trail use/rail banking under the Trails Act, and issued
a NITU covering the entire line.

See Interstate Commerce Comm’n, Surface

Transportation Board (S.T.B.), Docket No. AB-33 (Sub-No. 85X), Union Pacific Railroad
Company—Abandonment Exemption—in Sarpy County, NE, 1994 WL 156229, at *1
(I.C.C. April 20, 1994). The ICC set a 180-day period for the negotiation of a trail use
agreement, and stated that if no agreement was reached, UP could fully abandon the
line, noting that “[u]se of the right-of-way for trail purposes is subject to restoration for
railroad purposes.” Id.
No trail use agreement was ever reached. Prior to the expiration of the NITU,
Union Pacific sent a letter to the STB indicating its intent to abandon the rail line. Filing
No. 492-2, Index of Evid., Ex. 1, June 13, 1994 Letter. The STB has no record regarding
whether the line was formally abandoned and was never asked to determine that issue.
Based on the documents submitted by individual claimants and the parties’
experts’ determinations, the parties have identified one property on Trail 6 that is
potentially eligible for just compensation, meaning that the railroad acquired an easement
over the property, but did not own the land underlying the rail corridor in fee. That parcel

7

is identified by the Sarpy County Assessor’s Office as Parcel Number 010565578. Filing
No. 492-3, Ex. 2, Sarpy County Assessor’s Real Property Record Card. The address of
the property is 751 W. 6th St., Papillion, NE 68046.
Roland J. Saathoff is the Trustee of the Glen L. Gosch Family Trust, and the
property was deeded to the trust on March 31, 2012. The property has been used by a
tenant—-a landscaping company—for storage. In answer to an interrogatory asking how
the issuance of the NITU interfered with the use of the property by the tenant, Saathoff
stated that he was not aware of any interference. Filing No. 492-4, Ex. 3, Roland Saathoff
Answers to Interrogatories at 3. In his Answers to Interrogatories, Saathoff indicates that
other documents, including leases, maps, surveys and the affidavits of Saathoff’s fatherin-law, Glen L. Gosch, regarding the rail corridors were produced to the Government in
this action. Id. at 2-4. Saathoff states he:
has knowledge [about the Railroad Corridor adjacent to the Property] from
his discussions with his father-in-law, Glen L. Gosch, who owned the
Property since the 1960s. Mr. Saathoff has also reviewed documents
related to the Property. Mr. Saathoff was aware of the Railroad Corridor
and the communications between the Railroad and owners and also the
Affidavits filed by Glen Gosch regarding Abandon Railroad right of way in
the area.
Id. at 2.
With respect to Trail 9, the parties agree that the Trail 9 rail corridor is a 22.9-mile
segment of a rail line, formerly operated by the Burlington Northern Railroad Company
(“B.N.”), extending from milepost 0.33, near DeWitt, Nebraska, to milepost 23.26, near
Tobias, Nebraska. See Interstate Commerce Comm’n, Decision and Notice of Trail Use
or Abandonment, Docket No. AB-6 (Sub-No. 376X), 1996 WL 263167, at *1 (STB May
20, 1996); see also Table of Trails and Date of Ownership (“Trails Table”), ECF No. 4243. The STB issued a NITU on May 20, 1996. The NITU established a 180-day period for
8

the negotiation of a trail use agreement. Id. at *2. No trail use agreement was ever
reached. The STB has no record regarding whether the line was formally abandoned
and was never asked to determine that issue.
The parties have identified one property on Trail 9—Saline County Assessor’s
Office Parcel Number 760088985—that is potentially eligible for just compensation. See
Filing No. 492-5, Ex. 4, Saline County Parcel Identification Information. The address of
the property is 2160 County Rd. V, DeWitt, NE 68341. The record shows Gary Vocasek
obtained title to the property on January 26, 2000 when it was conveyed to him by his
father, Edward Vocasek, and his father's wife, Dorothy A. Vocasek. Filing No. 492-6, Ex.
5, Gary Vocasek’s Answers to Interrogatories at 1. Edward Vocasek retained a life estate
in the property until his death on April 24, 2007, when Gary Vocasek inherited all interests
in the property. Id. The property has been in Gary Vocasek's family since May 28, 1938,
when it was purchased by Vocasek’s great grandparents. Id. Gary Vocasek uses his
property for agricultural production. Id. at 2. Regarding knowledge of the railroad corridor
and its ownership, Gary Vocasek states:
The Railroad Corridor lay through the Property for as long as Plaintiff Gary
Vocasek can remember and Mr. Vocasek and his father farmed around it.
In the late 1990s there was an effort made by property owners adjacent to
the Railroad Corridor to acquire the Railroad Corridor from the railroad
company. Adjacent owners retained counsel and contributed money to a
fund to purchase the Railroad Corridor and they made an offer to the
railroad company. The railroad company accepted the offer and sold its
interests in the railroad corridor that ran through The Property to Plaintiff in
1998. The railroad company removed all rails, ties, and ballast within the
Railroad Corridor and turned the Corridor over to Plaintiff Gary Vocasek in
an “as is” condition.
Id. at 2. Vocasek, also answered that he was not aware of interference with the property
in answer to an interrogatory. Id. at 3 (Interrog. No. 8).

9

With respect to Trail 11, the parties agree that the Trail 11 rail corridor is a 42.13mile segment of a rail line, formerly operated by B.N., that extends from milepost 45.50,
near Shickley, Nebraska, to milepost 86.63, near Blue Hill, Nebraska. See Surface
Transportation Board, Docket No. AB-6 (Sub-No. 371X), Decision and Notice of Trail Use
or Abandonment, 1996 WL 297093, at *1 (STB June 6, 1996); see also Filing No. 424-3,
Trails Table. On June 6, 1996, the STB issued a NITU, establishing a 180-day period for
the negotiation of a trail use agreement. No trail use agreement was ever completed for
the rail line. The STB has no record of a determination that the rail line was formally
abandoned.
The parties have identified one property on Trail 11 that is potentially eligible for
just compensation—Nuckolls County Assessor’s Office Parcel Number 0006034.00.
Filing No. 492-7, Ex. 6, Nuckolls County Assessor’s Office Parcel Identification
Information. The address of the property is Farm 2198, PT SW ¼ 9-4-8, Lawrence, NE
68957. Id.
The record shows that Ronald Ostdiek inherited the property from his father,
Ernest Ostdiek, in October 1992. Filing No. 492-8, Ex. 7, Ronald Ostdiek’s Answers to
Interrogatories at 1. Ronald Osdiek’s parents originally acquired the property in 1953. Id.
In his Answers to Interrogatories, Ronald Ostdiek states that the railroad right of way was
acquired on April 23, 1998 for $1,782. Id. at 2. The railroad corridor is used for a pasture
by a tenant on the property. See id. at 3.

Mr. Ostdiek states that he is not aware of any

interference with the use of the property. Id.

10

Also, the plaintiffs offer several general statements of undisputed fact that are not
germane to the Court’s analysis.7

II.

LAW
Under Federal Rule of Civil Procedure 56, a grant of summary judgment is

appropriate when the pleadings, affidavits and evidentiary materials filed in a case reveal
that “there is no genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(a); see Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 247-48 (1986). A dispute is “genuine” when “the evidence is such that a
reasonable jury could return a verdict for the nonmoving party.” Anderson, 477 U.S. at
248. A fact is “material” if it could “affect the outcome of the suit under the governing law.”
Id.

In resolving motions for summary judgment, the Court will not make credibility

determinations and will draw all inferences in the light most favorable to the party
opposing the motion. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S.
574, 587-88 (1986).
The Rails-to-Trails Act, 16 U.S.C. §1247(d), “provides for the preservation of
discontinued railway rights-of-way, by ‘banking’ the rights-of-way for possible future
reactivation” and “authorizes interim use of the rights-of-way as recreational trails.” Hash
v. United States, 403 F.3d 1308, 1311 (Fed. Cir. 2005); see also Preseault v. Interstate
Commerce Comm'n, 494 U.S. 1, 110 (1990) (“Preseault I”). “Congress created the
process of railbanking to preserve, where possible, unused railroad rights of way for future

Those facts relate to the plaintiffs’ estoppel argument and involve the parties’ positions on the statute of
limitations issue with respect to other Trails.
7

11

rail service by temporarily converting the rights of way into recreational trails until they are
again needed for rail purposes.” Fletcher v. Burlington N. and Santa Fe Ry. Co., 474
F.3d 1121, 1123 (8th Cir. 2007).
To establish a viable takings claim, a plaintiff must first establish that he or she had
“a property interest for purposes of the Fifth Amendment.” Members of the Peanut Quota
Holders Ass'n v. United States, 421 F.3d 1323, 1330 (Fed. Cir. 2005). Second, if the
court concludes that a cognizable property interest exists, it determines whether the
Government's action amounted to a compensable taking of that interest. Casitas Mun.
Water Dist. v. United States, 708 F.3d 1340, 1348 (Fed. Cir. 2013).
It is well established that the operation of the Trails Act leads to a compensable
taking where a plaintiff possesses a “state law reversionary interest[ ]” in land subject to
a railroad's right-of-way that is “effectively eliminated in connection with [the] conversion
of [the] railroad right-of-way to trail use.” Caldwell v. United States, 391 F.3d 1226, 1228
(Fed. Cir. 2004); see also Ladd v. United States, 630 F.3d 1015, 1023-24 (Fed. Cir. 2010)
(a Fifth Amendment taking occurs in a rails-to-trails case when the government, through
the issuance of a NITU, destroys an individual's state law reversionary interest in property
underlying a railroad right-of-way).

That taking occurs “when the railroad and trail

operator communicate to the STB their intention to negotiate a trail use agreement and
the agency issues an NITU,” for it is that action which “operates to preclude abandonment
[of the railroad right-of-way.]” Caldwell, 391 F.3d at 1233; Ladd, 630 F.3d at 1023 (the
issuance of the NITU blocks reversionary property interests and prevents the landowners
from possessing their property unencumbered by the easement).

12

To determine whether a Fifth Amendment takings has occurred in a rails-to-trails
case, the Court follows the three-part analysis established by the United States Court of
Appeals for the Federal Circuit in in Preseault v. United States, 100 F.3d 1525, 1533 (Fed.
Cir. 1996) (en banc) (“Preseault II”). See Ellamae Phillips Co. v. United States, 564 F.3d
1367, 1373 (Fed. Cir. 2009). Under Preseault II, the determinative issues for takings
liability are (1) who owns the strip of land involved, specifically, whether the railroad
acquired only an easement or obtained a fee simple estate; (2) if the railroad acquired
only an easement, were the terms of the easement limited to use for railroad purposes,
or did they include future use as a public recreational trail (scope of the easement); and
(3) even if the grant of the railroad's easement was broad enough to encompass a
recreational trail, had this easement terminated prior to the alleged taking so that the
property owner at the time held a fee simple unencumbered by the easement
(abandonment of the easement). Id.
Physical takings are compensable, even when temporary. See Hendler v. United
States, 952 F.2d 1364, 1376 (Fed. Cir. 1991) (“A taking can be for a limited term—what
is ‘taken’ is, in the language of real property law, an estate for years, that is, a term of
finite duration as distinct from the infinite term of an estate in fee simple absolute.”) Where
no trail use agreement is reached, the taking is temporary. See Caldwell, 391 F.3d at
1234; Barclay v. United States, 443 F.3d 1368, 1378 (Fed. Cir. 2006). “The duration of
the taking goes to damages, not to whether a compensable taking has occurred.” Ladd,
630 F.3d at 1025. “None of the rails to trails case precedent with respect to liability has
required an additional showing by landowners of what they would have done with the land
if they could access it.” Banks v. United States, 138 Fed. Cl. 141, 150 (Fed. Cl. 2018)

13

(noting that consideration of multiple factors may be relevant to compensation but is
immaterial to liability).
The NITU operates as a single trigger to several possible outcomes—it may trigger
a process that results in a permanent taking in the event that a trail use agreement is
reached and abandonment of the right-of-way is effectively blocked. Caldwell, 391 F.3d
at 1234. Alternatively, negotiations may fail, and the NITU would then convert into a
notice of abandonment. Id. (stating in dicta that “[i]n these circumstances, a temporary
taking may have occurred”); see also Ladd, 630 F.3d at 1015 (stating that a taking occurs
on the issuance of a NITU, whether an agreement is reached or not). It is not unusual
that the precise nature of the takings claim, whether permanent or temporary, will not be
clear at the time it accrues. Caldwell, 391 F.3d at 1234.
The issue of the continued validity of Ladd is presently on appeal to the Federal
Circuit. See Caquelin v. United States, 140 Fed. Cl. 564, 578 (Ct. Cl. 2018), appeal
docketed, No. 2019-1385 (Fed. Cir. Jan. 9, 2019) (“Caquelin II”). In the first Caquelin
case, the Court of Claims found, in reliance on Ladd, 630 F.3d at 1023, that a per se
physical taking had occurred where a NITU issued and was in place for a six-month
period, but no trail use agreement was ultimately reached. Caquelin I, 121 Fed. Cl. at
666. The Government appealed the ruling and, in a per curiam opinion, the Federal
Circuit vacated the decision and remanded the case to the Court of Claims. Id. Without
“prejudg[ing] the merits of the takings claim,” the Federal Circuit instructed the lower court
to develop the record and apply the multi-factor analysis the government advocated as a
substitute for the Ladd decision. Caquelin I Appeal, 697 F. App'x at 1018-19 (Fed. Cir.
2017) (noting that the government had argued that blocking reversion for six months

14

called for the multi-factor analysis used for regulatory takings under Penn Central, 438
U.S. at 124, and Arkansas Game, 568 U.S. at 38-40 (2012)). Id. at 1019. The Federal
Circuit acknowledged that the government’s principal argument was that Ladd should be
overruled en banc, and “[r]ecogniz[ed] the difficulty of adopting [the government’s]
approach while Ladd remain[ed] controlling precedent[,].” Id. It stated that “application
of this court’s decision in Ladd would lead to affirmance of the Court of Federal Claims’
judgment in this case.” Id. The Appeals Court wanted the litigation record in the case
further developed before it decided “whether en banc review [would be] worth-while[,]”
stating:
Perhaps en banc review might not be warranted, for example, if an appropriate
multi-factor analysis were to lead to the same conclusion as the one Ladd drew—that an
NITU like the one here constitutes a taking for reasons common to many rails-to-trails
cases (leaving only the question of proper compensation, which is not at issue here).
Caquelin I Appeal, 697 F. App'x at 1020.
On remand, the Court of Claims again determined that, in a rails-to-trails case, a
categorical physical taking occurs on the issuance of a NITU, regardless of whether a trail
agreement is reached or the NITU results in trail use of the corridor. Caquelin II, 140 Fed.
Cl. 564, 578 (Ct. Cl. 2018), appeal docketed, No. 2019-1385 (Fed. Cir. Jan. 9, 2019). It
also reached the same result when considering the multiple factors set out in Arkansas
Game. Id. at 584. The Government has appealed the Court of Claims’ finding on remand
and the case was argued on March 20, 2020. See Caquelin II Appeal, No. 2019-1385
(Fed. Cir. Mar. 20, 2019).

15

The STB has authority to regulate most railroad lines in the United States. See 49
U.S.C. § 702. The ICC's (now STB’s) jurisdiction over a rail line generally ceases once
the line has been abandoned pursuant to a valid and effective abandonment certificate.
See Preseault I, 494 U.S. at 5 n. 3. A railroad seeking to abandon any part of its railroad
line must either (1) file an application to abandon or (2) file a notice of exemption to
abandon the line. See 49 U.S.C. § 10903 (2012); see also 49 C.F.R. § 1152.50 (2017);
Arnold v. United States, 137 Fed. Cl. 524, 551 (2018). “If the STB approves a standard
abandonment application or grants an exemption and the railroad ceases operation, the
STB relinquishes jurisdiction over the abandoned railroad right-of-way and state law
reversionary property interests, if any, take effect.” Caldwell, 391 F.3d at 1228–29.
As of December 24, 1996, the railroad must file a notice of consummation of
abandonment with the STB within one year of the effective date of the notice of exemption
permitting abandonment.

49 C.F.R. § 1152.29(e)(2); see 61 Fed. Reg. 67876–01,

67896–97 (Dec. 24, 1996) (adding § 1152.29(e)(2)). The STB retains jurisdiction over
the right-of-way until the notice of consummation is filed. Barclay, 443 F.3d at 1376. The
relevant STB regulation states that expiration of a NITU will “permit” a railroad fully to
abandon the line, therefore indicating that an effective certificate of abandonment
authorizes, but does not itself establish, complete consummation of the abandonment.
Baros v. Tex. Mexican Ry. Co., 400 F.3d 228, 236 (5th Cir. 2005). “Thus, ‘an effective
certificate of abandonment confers permissive authority on the railroad; until the railroad
actually consummates an abandonment, none occurs, and the Commission retains
jurisdiction over the railroad's right-of-way.’” Id. (quoting Birt v. Surface Transp. Bd., 90
F.3d 580, 589 (D.C. Cir. 1996) (emphasis added in Birt)). Because the historical approach

16

wherein the STB determined whether an abandonment was consummated by evaluating
the rail carrier's objective intent to permanently cease all transportation service on the line
fostered uncertainty as to a particular line's status, the STB has required rail carriers to
file a letter confirming consummation of abandonment with the agency since 1997. Id.
Until the Railroad takes action to consummate the abandonment—the STB
continues to have jurisdiction over the right-of-way, just as it did before the NITU was
issued. See Balagna v. United States, 145 Fed. Cl. 442, 445 (Fed. Cl. 2019); Arnold, 137
Fed. Cl. at 556; Farmers Coop. Co. v. United States, 100 Fed. Cl. 579, 583 (2011) (stating
“despite Plaintiffs' quandary, it is not this court's province to answer Plaintiffs' question,
“What then?,” or address how they might best extricate themselves from the
consequences of the railroad's failure to file the requisite notice of consummation, even
though its abandonment of the rights-of-way seems evident under state law” and
explaining that “[i]n a rails-to-trails takings case, the issue is not whether STB jurisdiction
continues or whether the railroad retains a property interest upon the expiration of a NITU,
but whether the Government has taken any action that forestalls the vesting of the
underlying landowners' property rights”).
III.

DISCUSSION
The Court finds the Government has not shown it is entitled to judgment as a

matter of law on these plaintiff’s temporary takings claims. This Court earlier found that
the issuance of the NITUs was a taking, at least with respect to property that the railroad
had not owned in fee simple. That ruling is law of the case. The parties proceeded on
that assumption throughout the case.

17

It is well established that the law at present requires just compensation for the
taking, even if temporary, that comes as the result of a NITU. The Court is unable to draw
the conclusion that these plaintiffs suffered no damages from vague concessions in
answer to interrogatories. Although the plaintiffs may acknowledge there is presently no
interference on their property rights, that is not to say there was never any interference.
The Court rejects the Government’s argument that the plaintiff’s claims fail for
failure to prove causation. The STB’s issuance of a NITU caused an encumbrance—it
created a new easement that prevented reversion to an adjoining landowner.

The

encumbrance is the cause of some damage—either a temporary prevention of an
unencumbered sale, prevention of abandonment by the railroad, a delay in reversion, an
or a diminution in value. The amount of any such damages remain to be determined by
an appraisal.

Though any diminution in value during the time the property was

encumbered may be low or even negligible, the Court cannot say as a matter of law that
the temporary encumbrance had no monetary value at all. The issue relates to damages,
not to liability.
Issues of fact remain on numerous issues. The record is silent or opaque on issues
of the fact or timing of any abandonment, the interests conveyed by deeds or
conveyances, the nature, terms, or condition of acquisitions or ownership rights, and the
nature and extent of any encumbrances on these parcels.
This action has been pending for over twenty years and the Court is not inclined
to let it linger any longer. Though the Government disclaims reliance on the arguments
it makes in Caquelin II, it is apparent to the Court that it seeks to challenge the holdings
in Ladd and/or Caldwell. The Court will not endeavor to anticipate the Federal Circuit’s

18

decision in Caquelin II, but will presently follow the law as it is. Under Caldwell and Ladd,
a NITU is a categorical physical taking, for which the plaintiffs deserve just compensation.
See Banks, 138 Fed. Cl. at 149-51 (denying the government's request to await a trial
decision in Caquelin and granting summary judgment on liability for the plaintiffs for a
temporary taking).
Also, the Court agrees with the Federal Court of Claims that the application of the
Arkansas Game factors would not lead to a different result. See Caquelin II, 140 Fed. Cl.
at 578, appeal docketed, No. 2019-1385 (Fed. Cir. Jan. 9, 2019). Accordingly, the Court
finds the Government has not sustained its burden to show that it is entitled to judgment
as a matter of law on the temporary takings claims asserted by these plaintiffs.
Accordingly,
IT IS ORDERED that the defendant’s motion for summary judgment (Filing No.
490) is denied.
Dated this 31st day of March 2020.
BY THE COURT:
s/ Joseph F. Bataillon
Senior United States District Judge

19