Macy Elevator, Inc. v. United States
97 Fed. Cl. 708
Fed. Cl.2011Background
- Class action by landowners asserting ownership of fee interests underlying a Norfolk Southern right-of-way between Peru and Rochester, Indiana.
- Government approved a Trails Act railbanking-based conversion of the line to a recreational trail, allegedly creating a new easement and a taking under the Fifth Amendment.
- STB issued NITU/CITU processes and ITF conveyed trail segments to ITF; dispute centers on whether interim trail use falls within the original easements.
- Plaintiffs’ deeds to the adjacent landowners fall into categories: Release of Right of Way, Mokkins/Hurst/Schindler-type deeds, and Railroad-Purposes deeds, with varying language limiting use to railroad purposes.
- Indiana law governs the status and scope of these easements, including presumptions for abutting landowners and the effect of road or fee strips between parcels.
- Court must determine whether the imposition of a recreational trail on the easements constitutes a taking and, if so, value damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Do plaintiffs have cognizable property interests in the right-of-way? | Abutting landowners hold fee interests to centerline absent express deed describing the right-of-way. | Indiana law requires deed descriptions; absent such, no property interest until abandonment. | Yes; abutting landowners possess fee interests to centerline absent deed describing the right-of-way. |
| Are the easements broad enough to include recreational trail use? | Some deeds imply broad rights beyond rail use; railbanking/trail use may fit within scope. | Indiana deeds limit to railroad purposes; trail use exceeds scope. | No; most deeds are limited to railroad purposes; interim trail use is outside the scope of those easements. |
| Do Shields and Powell fee transfers affect plaintiffs’ rights or restore rail ownership? | Powell/ Shields deeds should preserve abutting fee ownership and not concede a taking. | Shields/Powell conveyances transfer or extinguish certain interests affecting taking analysis. | Shields and Powell deeds foreclose claims for those parcels; certain plaintiffs cannot recover as to those lands. |
| Is the imposition of a recreational trail a taking requiring just compensation? | Trail use extinguishes the easement and constitutes a taking of the fee interest. | State statutes or railbanking considerations may affect abandonment but not constitutional takings. | Taking found; recreational trail use imposes a new easement not within the original grant. |
| Should the court consider Indiana abandonment statutes in valuing the taking? | Abandonment not required for valuation; trail use extinguishes easement. | Abandonment statutes govern whether easement persists; valuation may depend on abandonment status. | Question reserved for damages phase; court may address abandonment relevance later. |
Key Cases Cited
- Preseault I, 494 U.S. 1 (U.S. Supreme Court, 1990) (rails-to-trails takings require compensation)
- Preseault II, 100 F.3d 1533 (Fed. Cir., 1996) (easement scope may be adjusted to serve original purposes)
- Wyatt v. United States, 271 F.3d 1090 (Fed. Cir., 2001) (property interests determined by state law at taking)
- Calumet National Bank v. American Telephone & Telegraph Co., 682 N.E.2d 785 (Ind. 1997) (abutting landowners hold fee to centerline absent describing deeds)
- Moody v. Allegheny Valley Land Trust, 976 A.2d 484 (Pa. 2009) (road easements interpreted to allow broad use including trails under Moody type deeds)
- Chevy Chase Land Co. v. United States, 733 A.2d 1055 (Md. 1999) (broad interpretation of ‘free and perpetual’ easements)
- Ladd v. United States, 630 F.3d 1015 (Fed. Cir., 2010) (taking occurs when trail use extinguishes state-defined property rights)
- Cox v. Louisville, New Albany & Chicago Railroad Co., 48 Ind. 178 (Ind. 1874) (new uses cannot substitute for existing easement use under Indiana law)
- Fox v. Ohio Valley Gas Corp., 250 Ind. 111, 235 N.E.2d 168 (Ind. 1968) (utilities may use public rights-of-way where no additional burden is imposed)