October 1, 2013

Rails-to-trails returns to the U.S. Supreme Court

By Brian T. Hodges Senior Attorney

Earlier today, the U.S. Supreme Court decided to grant review of the important property rights case, Marvin M. Brandt Revocable Trust v. United States.

The case arises from the federal government’s “Rails-to-Trails” program, which seeks to convert old, abandoned railroad tracks into recreational trails. As nice as that program may sound, there is a problem with it:  many of the abandoned tracks run over private property. Back in the Nineteenth Century, railroads acquired easements all over the country in order to lay tracks. These easements were typically written so that they would be extinguished and the land over which the track ran would return to the underlying property owner in the event the railroads ever abandoned the easements. But in 1988, Congress passed a “railbanking” statute that says that, upon abandonment by a railroad company, the government can morph the railroad easements into public recreational trails, without any compensation for the underlying landowner.

Over the years, the government has repeatedly found itself in court defending its massive appropriation of private land under the Rails-to-Trails program. These cases are typically resolved by resorting to the common law understanding of the specific property interest that the parties hold in the disputed land. For example, if the railroad owned the land as a freehold estate (e.g., a limited fee, fee simple determinable, base fee, or qualified fee), its successors in interest can make whatever lawful use they want of the land. If, however, the railroad only had an easement allowing it to use the land for a specific purpose, and the underlying landowner (the servient estate) holds a fee simple absolute, then the abandoned easements is extinguished and the property belongs to the underlying owner.  In that circumstance, the government cannot establish a recreational trail without first paying the owner just compensation as required by the Takings Clause of the U.S. Constitution.

In this case, the Brandts purchased their Wyoming property subject to an abandoned easement. Under the rules established by the Federal Circuit Court of Appeals, the case should have been open-and-shut: the Brandts were entitled to compensation for a taking when the government sought to convert the railroad easement into a recreational trail.

The United States tried to circumvent Federal Circuit precedent by filing a quiet title action in a Wyoming federal district court, claiming that it held an “implied reversionary interest” in the railroad easements that trumped the Brandt’s interest in their land. The government’s strategy was to convince the Tenth Circuit Court of Appeals to adopt a decades-old trial court decision from Idaho in which the court opined that the United States held  an “implied reversionary interest” in abandoned railroad easements. The strategy was successful. The Tenth Circuit refuted Federal Circuit precedent and handed over the Brandts’ land to the United States without any compensation.

PLF filed an amicus brief in support of the Brandts, asking Supreme Court to take review of the case because there is no such thing in property law as an “implied reversionary interest in an easement.” The brief explained that the Tenth Circuit’s decision turned the common law understanding of property on its head by creating a property interest that has never existed before and undermines the rights and expectations established by one’s title in his or her land.

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