106 Fed. Cl. 343
Fed. Cl.2012Background
- Plaintiffs claim uncompensated takings under the Fifth Amendment based on a November 18, 2003 STB NITU allowing interim trail use on a 21-mile rail corridor through Cass and Pulaski Counties, Indiana.
- The rail line formerly operated until 2002; remaining rails, ties, and switches were removed.
- Ownership and control of the corridor passed through several entities, ultimately including A & R Line, Inc. and Indiana Trails Fund, Inc., which transferred the right-of-way to Indiana Trails Fund, Inc. via quit-claim in 2005 for interim trail use.
- STB decision conditioned trail use with the possibility of restoration to rail service; interim use could continue indefinitely while railbanking preserved the easement.
- Indiana Supreme Court later held that railbanking/interim trail use exceed the scope of railroad easements under Indiana law, affecting the measure of compensation at issue here.
- Plaintiffs seek compensation reflecting a full unencumbered fee versus a fee burdened by an indefinite trail easement; defendants argue for a before/after valuation reflecting continued railroad easement or railbanking under Indiana law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether railbanking and interim trail use fall within the easement scope | Howard case shows beyond scope; trail use deprives real property rights | Railbanking not abandonment; easement persists; NITU preserves rights | Railbanking/trail use beyond scope; taking liable |
| Proper measure of just compensation for the taking | Difference between unencumbered fee and fee burdened by trails (indefinite) | Measure is value difference between fee burdened by railroad easement and by both easements | Damages to be determined; cross-motions granted in favor of plaintiffs on the measure; further proceedings required |
| Role of Indiana law versus federal takings in valuation | State law abandonment irrelevant after taking; compensation determined federally | Indiana statutes void abandonment; valuation governed by before/after concept | Federal constitutional taking governs measure; Indiana statutes do not negate liability |
| Abandonment under Indiana law when rail service ceases and trail use begins | Abandonment occurs; owners regain fee simple absent Trails Act | Statutes preserve easements; trail use not abandonment; right to unencumbered fee remains limited | Trail use under 16 U.S.C. § 1247(d) prevents abandonment; easements preserved; taking still found under federal law |
Key Cases Cited
- Preseault v. Interstate Commerce Comm'n, 494 U.S. 1 (U.S. 1990) (railbanking and interim trail use may raise takings if within scope of easement)
- Preseault II v. United States, 100 F.3d 1525 (Fed. Cir. 1996) (state-defined property rights destroyed by federal action; just compensation due)
- Barclay v. United States, 443 F.3d 1374 (Fed. Cir. 2006) (state law controls basic issue of trail use beyond scope of right-of-way)
- Toews v. United States, 376 F.3d 1371 (Fed. Cir. 2004) (railroad easement examination; shifting public use doctrine)
- Howard v. United States, 964 N.E.2d 779 (Ind. 2012) (Indiana Supreme Court held railbanking/interim trail use exceed scope of easements; not shifting public use)
- Capreal v. United States, 99 Fed.Cl. 133 (Fed. Cl. 2011) (railbanking too remote to limit liability to incremental burden)
- Raulerson v. United States, 99 Fed.Cl. 9 (Fed. Cl. 2011) (damages not mitigated by remote rail restoration scenarios)
- Schmitt v. United States, 2003 WL 21057368 (S.D. Ind. 2003) (rail-to-trails takings in Indiana; not binding on valuation here)