Macy Elevator, Inc. v. United States
105 Fed. Cl. 195
Fed. Cl.2012Background
- Rails-to-Trails: government converted railroad corridor to recreational trail under Trails Act, NITU issued; liability decision previously found Fifth Amendment taking; dispute now over how to value property for just compensation; Indiana law status of railroad easements after railbanking/trail use (Howard v. United States, Indiana Supreme Court) and whether easements terminated; plaintiffs argue before-condition is unencumbered land; government argues before-condition remains encumbered by railroad easement under Indiana law; court previously held railbanking not within railroad easement scope; outcome affects appraisal method for just compensation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether railbanking falls within railroad easement scope. | Plaintiffs: railbanking terminates easements; before-condition unencumbered. | Government: railbanking keeps easements alive for valuation. | Railbanking not within scope of railroad easements; easements terminated. |
| Whether Indiana abandonment law governs the valuation before-condition. | Indiana law does not control; before-condition is unencumbered land. | Abandonment/termination under Indiana law relevant to valuation. | Indiana law supports termination concepts but not to preserve encumbrance for valuation; easements terminated. |
| What is the correct 'before' condition of the property for just compensation? | Before condition is unencumbered by railroad easements (reversion rights triggered). | Before condition measured by status with easements in place. | Before condition must be valued as unencumbered land. |
| Do determinable easements terminate automatically when used for recreational trails? | Determinable easements terminate when railroad use ceases; trail use ends them. | Some easements lack automatic termination language. | Determinable easements terminated; others also terminated due to change to recreational use. |
| Do condemnation/prescription/Release-of-Right-of-Way deeds terminate easements under Indiana law when used as trails? | Such easements terminate when used beyond original scope. | Not all deeds expressly terminate without specific provisions. | Easements terminated; properties unencumbered for valuation. |
Key Cases Cited
- United States v. Va. Elec. & Power Co., 365 U.S. 624 (1961) (before-after valuation framework for takings)
- Preseault v. Interstate Commerce Comm’n (Preseault I), 494 U.S. 1 (1990) (constitutional basis for determining the 'before' condition)
- Preseault v. United States (Preseault II), 100 F.3d 1525 (Fed.Cir.1996) (limiting railbanking as within or outside railroad easements)
- Ladd v. United States, 630 F.3d 1015 (Fed.Cir.2010) (taking analysis tied to state-created reversionary interests)
- Ybanez v. United States, 102 Fed.Cl. 82 (2011) (determination of taken interest based on absence of NITU effects)
- Raulerson v. United States, 99 Fed.Cl. 9 (2011) (nature of taken interest tied to absent NITU impact)
- Macy Elevator Co. v. United States, 97 Fed.Cl. 708 (2011) (analysis of railroad easement termination and valuation)
- Howard v. United States, 964 N.E.2d 779 (Ind. 2012) (Indiana Supreme Court: railbanking/interim trail use not within railroad easements)
- Erie-Haven, Inc. v. First Church of Christ, 292 N.E.2d 837 (Ind. App. 1973) (determinable easements and automatic expiration language)
- Selvia v. Reitmeyer, 295 N.E.2d 874 (Ind. App. 1973) (use beyond original easement may terminate under Indiana law)