SCOTUS Brandt Decision Neither Derails Owners’ Takings Claims Nor Rails-to-Trails Conversions

On Monday, March 10, the Supreme Court ruled in favor of the landowner in Marvin M. Brandt Revocable Trust v. United States, No.12-1173 (Mar. 10, 2014), a rails-to-trails takings case.  Writing for the majority, Chief Justice Robert’s clarified that the government, in this case the U.S. Forest Service, can not redefine commonly understood legal principles relating to real property and simply eliminate the property rights of landowners as a means to achieve its goal of expanding the National Trails System. Justice Sotomayor wrote the sole dissenting opinion disagreeing with Roberts on the meaning of the Court’s 1942 ruling in Great Northern Ry. Co. v. United States, 315 U.S. 262 (1942) and whether general property law principles should apply to railroad right of way disputes.  (See SCOTUSblog for more analysis on the opinion here.)

Owners’ Counsel of America and the National Federation of Independent Business (NFIB) Small Business Legal Center filed an amici brief in favor of the landowners in this case.  The brief argued that the government’s position in this case sought redefine the common law meaning of certain property rights and by doing so would eliminate an entire class of takings claims by private landowners.

At the core of the dispute between the landowner and the government was the meaning of the term railroad “right of way” as used in the 1875 General Railroad Right of Way Act and whether the federal government retained an “implied reversionary interest” in railroad rights of way granted under the Act.  Brandt contended that the land grant his family received in a land swap with the government was subject to a railroad easement which expired when the railroad abandoned use in 1996.  The conveyance of the land was conditioned on the railroad’s use of the right of way and made under the terms of the 1875 Act. The government, on the other hand, argued that it had retained an interest in the land underlying the railroad, therefore, upon abandonment the ownership interest reverted to it rather than the private owner to whom the government had granted ownership of the land surrounding the railroad right of way.  Under the principles of general property law, easements may be extinguished whereas reversionary interests cannot.  The Court clearly answered that this railroad right of way was an easement having no “implied reversionary interest”, upon abandonment the easement was extinguished and the Brandt’s ownership became unburdened by the easement.

As stated in the Roberts opinion:

This dispute turns on the nature of the interest the United States conveyed to the LHP&P in 1908 pursuant to the 1875 Act. Brandt contends that the right of way granted under the 1875 Act was an easement, so that when the railroad abandoned it, the underlying land (Brandt’s Fox Park parcel) simply became unburdened of the easement. The Government does not dispute that easements normally work this way, but maintains that the 1875 Act granted the railroads something more than an easement, reserving an implied reversionary interest in that something more to the United States.  Slip op. at 8.

A number of commentaries have pointed out that the government’s assertions in this case were contrary to the government’s assertions some 70 years prior in Great Northern, and in fact, the Court concluded the same.  We would be remiss if we did not include the Court’s remarks in that regard:

More than 70 years ago, the Government argued before this Court that a right of way granted under the 1875 Act was a simple easement. The Court was persuaded, and so ruled. Now the Government argues that such a right of way is tantamount to a limited fee with an implied reversionary interest. We decline to endorse such a stark change in position, especially given “the special need for certainty and predictability where land titles are concerned.” Leo Sheep Co., supra, at 687.  Slip op. 17.

Read more about the government’s “about face” on OCA HI Member Robert Thomas’s blog: SCOTUS Benchslap: Railroad Right Of Way Is An Easement, Just Like We Said A Long Time Ago; and NFIB’s blog: How the West Was Won: What Does the Brandt Decision Mean for Property Rights?

While this decision is without a doubt a win for the Brandt family, for private property rights and possibly for landowners around the country whose property ownership interests were taken for rails-to-trails use, this ruling does not mean that the sky will fall and rail-trails will cease to exist.  Rather, the Rails-to-Trails Conservancy has commented that Brandt’s reach is much narrower than has been reported. If fact, RTC states on its website:

The ruling does not affect trails that have been “railbanked” (the federal process of preserving former railway corridors for potential future railway service by converting them to multi-use trails in the interim). Potentially affected corridors are predominantly west of the Mississippi and were originally acquired by railroads after 1875 through federal land to aid in westward expansion.

Existing rail-trails or trail projects ARE NOT affected by this decision if ANY of the following conditions are met:

• The rail corridor is “railbanked.”
• The rail corridor was originally acquired by the railroad by a federally granted right-of-way (FGROW) through federal lands before 1875.
• The railroad originally acquired the corridor from a private land owner.
• The trail manager owns the land adjacent to the rail corridor.
• The trail manager owns full title (fee simple) to the corridor.
• The railroad corridor falls within the original 13 colonies.

However, it is possible that the many private property owners currently litigating takings claims against the U.S. regarding rails-to-trails conversions may secure just compensation under the Fifth Amendment. Further, if the government does not own the land underlying an abandoned railway, it will have to negotiate with owners to purchase the rights to that land or follow the proper procedures under eminent domain and pay just compensation to acquire title.

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