Rasmuson v. United States
807 F.3d 1343
| Fed. Cir. | 2015Background
- Landowners owned parcels adjacent to three Iowa rail corridors; the Surface Transportation Board issued Notices of Interim Trail Use (NITUs) preserving rights-of-way and preventing legal abandonment.
- Trial court found that but for the NITUs the railway easements would have lapsed under Iowa law and the land would have reverted to landowners unencumbered by easements.
- Court of Federal Claims held a bench trial on just compensation using the before-and-after valuation method for farmland parcels.
- The trial court treated the “before” condition as land free of legal easement but excluded physical remnants of the railway (embankments, ties, degraded soil) from the pre-taking valuation.
- Government appealed the exclusion of physical remnants from the “before” valuation; the Federal Circuit reviewed legal conclusions de novo and factual findings for clear error.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the “before” valuation must account for physical remnants of the railroad that would have remained if the prior railway easement had lapsed | Landowners: “Before” land is unencumbered legally and physically—remnants should be ignored | Government: “Before” land should reflect the condition it would have had but for the NITUs, which may include physical remnants | Held: Appraiser must include physical remnants in the “before” fair-market-value calculation when those remnants would have remained absent the government’s easement |
| Whether the Court of Federal Claims’ valuation methodology requires remand | Landowners: Trial court methodology was correct | Government: Trial court applied incorrect legal standard by excluding physical remnants | Held: Vacated and remanded for new proceedings applying correct standard to account for remnants |
Key Cases Cited
- Otay Mesa Prop., L.P. v. United States, 670 F.3d 1358 (Fed. Cir. 2012) (review standards and endorsement of before-and-after valuation for easements)
- Olson v. United States, 292 U.S. 246 (1934) (landowner must be made whole but not given a windfall)
- United States v. 564.54 Acres of Land, More or Less, Situated in Monroe & Pike Cntys., 441 U.S. 506 (1979) (defines fair market value as what a willing buyer pays a willing seller)
- United States v. Miller, 317 U.S. 369 (1943) (fair-market-value standard authority)
- Va. Elec. & Power Co. v. United States, 365 U.S. 624 (1961) (articulates the conventional before-and-after method for easement valuation)
- Kimball Laundry Co. v. United States, 338 U.S. 1 (1949) (just compensation should be tailored to circumstances)