January 15, 2014

U.S. Supreme Court argument recap: an easement by any other name …

By Brian T. Hodges Senior Attorney

Earlier today, the U.S. Supreme Court heard arguments in the property law case, Marvin M. Brandt Revocable Trust v. United States.

I previously referred to this case as one “for certified law geeks,” because it raised “a host of questions that are sure to bring back some of the night terrors induced by first year Property Law.” It appears that my assessment was right. Indeed, oral argument was as much an exercise in dusting off the old property law tomes as it was an examination of the parties’ positions, with both Justices Scalia and Breyer harkening back to their Property Law instructors.

At its core, the case asks what happens when a railroad company abandons a right-of-way that traverses a parcel of private property. Under the common law, the right-of-way constitutes an easement and, upon abandonment, the easement is extinguished. The owner of the underlying parcel holds title to the entire tract.

The federal government, however, argues that a grant of a railroad right-of-way is unlike any property interest known to the common law. Sure, it operates like an easement at times, but it also gives the federal government an “implied reversionary interest” that allows the government to claim the land upon abandonment and use it for such things as bicycle trails.

At the outset of the argument, Justice Breyer summarized the government’s position as claiming that, for some purposes, a right-of-way is “treated like an easement. But for who gets the reverter, it’s treated like a shift of the fee.” To which, Justice Scalia responded, “Oh, that’s nice. Do you know of any other real estate thing which says it’s an easement for one purpose and the fee for another?”

That brief volley set the tone for much of the argument, with the Justices repeatedly asking the parties how any property owner—indeed, any property lawyer—could have known of or even understood the type of property interest proposed by the government. Wouldn’t a property lawyer rely on common law and decisions from the U.S. Supreme Court when advising a client? How would he know if property was subject to some unexpressed ownership interest that is not recognized by common law and does not appear in the terms of a conveyance? To which questions, Justice Scalia suggested that

if it’s a choice between disappointing people who property relied on the law, and disappointing people who were—were not following the law, it’s clear who should—who should take it in the neck. It’s the latter, isn’t it?

It did not go unnoticed that the federal government was advancing an argument that was contrary to the position it had taken back in 1942 when it convinced the U.S. Supreme Court to hold that a railroad right-of-way constituted a common law easement. Justice Alito noted the remarkable inconsistency:

I think the government gets the prize for understatement with its brief in this case. You have a sentence in your brief that says, ‘We acknowledge that there is language in the Court’s opinion in Great Northern and in the government’s brief in that case that lends some support to [the Brandts’] contrary argument.’

The government attempted to balance its earlier argument with its current position by explaining that the property interests created by federal land grants are creatures of statute—not the common law—and therefore, although it can be called an “easement,” it does not operate like any easement known to the Court. That argument was not well-received.

Justice Scalia characterized the government’s argument as saying that the right-of-way “will be an easement when it suits the government, but will be something else when it suits the government.”

Justice Alito responded, “But the term ‘easement’ is a well-known term with an established meaning. And you’re saying that—you said it was an easement. The Court said it was an easement. You—you persuaded the Court to say it was an easement. And now you’re saying this is some king of property right that has no name, previously unknown to the law.”

Justice Breyer asked the government attorney if he could cite a single example of a similar property interest dating a from the Domesday Book to Lord Bracton’s Laws and Customs of England to modern American case law (the government attorney could not think of one).

Justic Kagan pragmatically suggested that the government had changed its position in regard to ownership of abandoned railroad rights-of-way was because:

[I]t really didn’t occur to the government until very recently that these rights-of-way had value as anything other than railroad tracks, and indeed the government was anxiously trying to give these things away because it thought that these spaghetti strips of land, it’s of no use to the government, here, take them, get them off our hands. And having done that for many, many, many decades, the government faces a problem when it turns around and says, you know what, we forgot, there are bike paths.

Unfortunately, neither attorney was prepared to answer a key line of questions:  how will this case effect other landowners? Just how much land will be affected by the Court’s decision in this case? What kind of liability will the government be exposed to?

Surprisingly, the government’s attorney was unable to answer any of these questions because the government apparently has no centralized records of the land conveyances.

Chief Justice Roberts commented, “Maybe the reason [the government doesn’t] have records on this, which strikes me as pretty unusual that the government doesn’t know what it owns, is that for decades, you didn’t think that you owned a reversionary interest.”

Justice Scalia echoed that insight, “[Y]ou should—should know how much land the United States owns. It’s—it’s incredible that—that there’s no record in the Interior Department or anywhere else of what land that United States owns. You claim you own these thousands of acres, and you say we’ve not kept track of it.”

Two additional quotes summarize today’s argument.  The first, from Justice Breyer, paints the big picture that is before the Court:

I certainly think bicycle paths are a good idea, but the problem that I see here is [that], as I read this, I think there might be millions of acres in the last 70 years that have been conveyed. For all I know, there is some right of way going through people’s houses, you know, and all of a sudden, they are going to be living in their house and suddenly a bicycle will run through it[.]

The second, from Chief Justice Roberts, fairly encapsulates the property law question:

Is there any doctrine in property law that if a right of access is granted and it’s to the exclusion of all other uses, it’s—it looks for all purposes like absolute control, that it ceases to be an easement and becomes a limited fee? I mean is there some magic that takes place in property law so that if there’s a grant that conveys such total control, it is construed not to be an easement?

All things considered, the argument seemed to go well for the landowners. We will eagerly await the Court’s decision in this case.

Inversecondemnation.com had this to say about today’s argument.

And SCOTUSblog had this to say.

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