United States
Court of Appeals for the Federal Circuit
03-1395
ROBERT HASH, GERLENE HASH
,
WILLIAM DON
LAKEY, and NANCY HAWKINS,
Plaintiffs-Appellants,
v.
UNITED STATES,
Defendant-Appellee.
Cecilia Fex,
Ackerson Kauffman Fex, PC, of Washington, DC, argued for
plaintiffs-appellants.
With her on the brief was Nels J. Ackerson. Of counsel on the
brief was Daniel
J. Millea, Zelle, Hofmann, Voelbel, Mason & Gette, LLP, of
Minneapolis,
Minnesota. Of counsel were John B. Massopust and Timothy W. Regan.
Katherine J.
Barton, Deputy Assistant Attorney General, Appellate Section,
Environment and
Natural Resources Division, United States Department of Justice, of
Washington, DC,
argued for defendant-appellee. With her on the brief was Kathryn E.
Kovacs, Attorney.
Andrea C.
Ferster, General Counsel, Rails-to-Trails Conservancy, of
Washington, DC,
for amicus curiae Rails-to-Trails Conservancy.
Appealed from:
United States District Court for the District of Idaho
Magistrate Judge
Mikel H. Williams
United States
Court of Appeals for the Federal Circuit
03-1395
ROBERT HASH, GERLENE HASH,
WILLIAM DON
LAKEY, and NANCY HAWKINS,
Plaintiffs-Appellants,
v.
UNITED STATES,
Defendant-Appellee.
__________________________
DECIDED: April
4, 2005
__________________________
Before NEWMAN,
LOURIE, and LINN, Circuit Judges.
NEWMAN, Circuit
Judge.
Robert Hash, Gerlene Hash
, William Don Lakey, and Nancy
Hawkins bring this class
action affecting
approximately two hundred Idaho landowners. The landowners appeal
those aspects of
the decision of the United States District Court for the District of Idaho as
were decided
adversely to their "taking" claims under the Fifth
Amendment,
arising from
1
Hash v. United
States, No. CV99-324 (D. Idaho Mar. 10, 2003) (final
judgment); (D.
Idaho July 7, 2000) (class certification).
03-1395
2
the conversion
of a railroad right-of-way to a recreational trail traversing their lands. We
reverse in part,
vacate in part, and remand for further proceedings.
BACKGROUND
In the early to
mid-1800s the United States strongly encouraged railroad
construction by
private enterprise, through various incentives including the grant to the
railroads of
substantial amounts of public land. This policy duly fell into disfavor, and was
replaced by the
less-generous but still incentive-rich policy embodied in the General
Railroad
Right-of-Way Act of 1875, codified at 43 U.S.C. §§934-939 ("the 1875 Act")
(repealed in
part, Pub. L. 94-579, Title VII §706(a), 90 Stat. 2793 (1976)). The 1875 Act
governed
railroad rights of access across public lands for the ensuing century:
The right of way
through the public lands of the United States is granted to
any railroad
company duly organized under the laws of any State or Territory,
except the
District of Columbia, or by the Congress of the United States, . . . ,
to the extent of
one hundred feet on each side of the central line of said road;
also the right
to take, from the public lands adjacent to the line of said road,
material, earth,
stone, and timber necessary for the construction of said
railroad; also
ground adjacent to such right of way for station buildings,
depots, machine
shops, side tracks, turnouts, and water stations, not to
exceed in amount
twenty acres for each station, to the extent of one station
for each ten
miles of its road.
43 U.S.C. §934.
Section 4 of the 1875 statute provided that
Any railroad
company desiring to secure the benefits of sections 934 to 939
of this title,
shall . . . file with the officer, as the Secretary of the Interior may
designate, of
the land office for the district where such land is located a
profile of its
road; and upon approval thereof by the Secretary of the Interior
the same shall
be noted upon the plats in said office; and thereafter all such
lands over which
such right of way shall pass shall be disposed of subject to
such right of
way.
43 U.S.C. §937.
03-1395
3
Concurrently
with encouraging the construction of railroads, the nation also
encouraged
settlement of the western lands through the Homestead Act of 1862, 12 Stat.
392, 43 U.S.C.
§161 (repealed, 90 Stat. 2787 (1976)). The Homestead Act entitled
qualifying
settlers to acquire up to 160 acres of public land by "enter[ing] one
quarter-
section or a
less quantity of unappropriated public lands." 43 U.S.C. §161. Land patents
were duly
granted by the Interior Department for lands settled pursuant to the Homestead
Act.
Many railroad
lines were built in the latter 1800s and early 1900s. Then, with the
development of
motor transport, rail traffic diminished, and since 1920 almost half of the
nation's 270,000
miles of rail lines have gone out of use. The National Trails System Act
Amendments of
1983, codified as amended at 16 U.S.C. §§1241-51, provides for the
preservation of
discontinued railway rights-of-way, by "banking" the rights-of-way for
possible future
reactivation; the Trails Act authorizes interim use of the rights-of-way as
recreational
trails.
The
rights-of-way here at issue carried the Pacific and Idaho Northern Railroad Co.
("the
Railroad"), a line constructed between 1899 and 1911. In 1995 the Interstate
Commerce
Commission authorized the Railroad to discontinue part of its operation in
Idaho, and in
December of that year the 83.1 mile stretch here at issue was authorized to
be converted to
use as a recreational trail.
It is no longer
subject to question that the United States may by legislative act
prevent
reversion of discontinued railway rights-of-way, and authorize their interim use
as
recreational
trails. See Preseault v. Interstate Commerce Comm'n, 494 U.S. 1 (1990). The
questions here
raised relate to the consequences of these actions for the owners of the
03-1395
4
land traversed
by the right-of-way. Specific to the case before us, there arise questions
involving
federal and state laws governing easements, fee interests, and reversionary
rights. These
questions require determination of the interests of the Railroad, these
landowners, and
the federal government, as to various segments of this Railroad's
right-of-
way and the land
it traverses.
The Railroad
acquired the segments of right-of-way here at issue between 1899 and
1905, traversing
both public and private lands. The appellants argue that the right-of-way
across their
lands was simply an easement for railway use, and that when the Railroad
abandoned such
use the easement would have reverted to them as owners of the servient
estate, but for
the 1983 provisions of the Trails Act. Thus they claim that the conversion to
a recreational
trail was a taking of their property, for which they are due just compensation.
In Preseault v.
ICC, 494 U.S. 1, the Court held that if abandonment of railway use and
application of
the Trails Act effects a taking when the easement would otherwise revert to
the owner of the
servient estate, the landowner may sue for compensation under the
Tucker Act. 494
U.S. at 4-5 ("We find it unnecessary to evaluate the merits of the takings
claim because we
hold that even if the rails-to-trails statute gives rise to a taking,
compensation is
available to petitioners under the Tucker Act, 28 U.S.C. § 1491(a)(1) (1982
ed.), and the
requirements of the Fifth Amendment are satisfied.") See also Preseault v.
United States,
100 F.3d 1525 (Fed. Cir. 1996) (en banc) (applying state law of reverter
to
determine rights
of the owner of the servient estate).
The appellants
are successors to homesteaders who were granted land patents
pursuant to the
Homestead Act of 1862. Some of the original owners were granted their
land after the
Railroad had acquired its right-of-way pursuant to the 1875 Act, while the land
03-1395
5
was public land.
Some of the original owners were granted their land before the Railroad
obtained the
right-of-way traversing that land; these segments of the right-of-way were
conveyed by the
landowners to the railroad on a variety of terms and conditions. And some
segments of the
right-of-way are devoid of documentation, whereby the parties agreed that
these rights
would be determined under the Idaho law of adverse possession.
This appeal is
taken under Fed. R. Civ. P. 54(b) from suit in the district court brought
under the Little
Tucker Act, 28 U.S.C. §1346(a)(2), and is appealed in accordance with 28
U.S.C.
§1295(a)(2). The district court's rulings on constitutional and statutory
construction
are given
plenary review, see Romero v. United States, 38 F.3d 1204, 1207 (Fed.
Cir.
1994), as are
the district court's constructions of state law, Abbott Labs. v. Brennan, 952
F.2d 1346, 1355
(Fed. Cir. 1991). Findings of fact by the district court are reviewed on the
clearly
erroneous standard. Allen Engineering Corp. v. Bartell Indus., Inc., 299 F.3d
1336,
1344-45 (Fed.
Cir. 2002).
DISCUSSION
The primary
issue is whether the claimant landowner owns the estate underlying the
Railroad
right-of-way, or whether the underlying estate never left its ownership by the
United States,
or whether the estate was deeded in fee to the Railroad.
At the district
court's request, the parties divided the plaintiff class into categories
based on the
different mechanisms and legal forms whereby the Railroad acquired the
various segments
of the 83.1 miles of right-of-way. There were initially fourteen categories,
not all of which
are involved in this appeal. Category 1 is for those landowners who
obtained their
land, pursuant to the Homestead Act, after the Railroad had acquired its
right-of-way
traversing then-public land pursuant to the 1875 Act. All of the other
03-1395
6
categories
relate to landowners who already owned the land before the Railroad obtained a
right-of-way
traversing it. The district court summarized its decision as follows:
(1) the United
States held a reversionary interest in the rights of way in
Category 1; (2)
the interests conveyed in Categories 2 and 3 reverted back to
the grantors;
(3) the Railroad acquired fee simple title to deeds in Categories
4 and 7; (4) the
deeds in Categories 5, 6, and 8 conveyed fee title to the
Railroad; (5)
the Railroad was not prevented from acquiring fee title to deeds
in Categories 9
and 14; and (6) the Railroad acquired fee title to lands
adversely
possessed in Category 10.
Hash v. United
States, Order of Mar. 10, 2003 at 2 n.1.
Category
1
For this
category the Railroad obtained the right-of-way over public lands before any
transfer of
these lands under the Homestead Act. The landowners in Category 1 state that
the rights
acquired by the Railroad from the United States were an easement flowing with
the land, and
not a fee interest in the underlying property. The landowners state that, in
accordance with
the 1875 Act and the terms of their land patents, they were granted the
underlying fee.
The government's position in the district court was that it owns the
reversionary
interest on abandonment of the right-of-way. In Preseault, 100 F.3d at 1533,
this court
explained that having the "reversionary interest" in an easement is the same as
having the fee
in the land occupied by the easement burdened by the easement itself. On
appeal the
government argues various modifications of this theory, to the effect that
whatever the
rights acquired by the Railroad and by the landowners, on abandonment of
the right-of-way
the United States owns the reversionary interest and thus owns the rail
corridor in fee.
03-1395
7
The issue of the
nature and scope of grants of rights-of-way under the 1875 Act has
been extensively
litigated, most often in connection with a railway's claims to mineral rights
underlying its
right-of-way. The weight of authority has resolved the question on the side of
limiting the
railway's rights to a surface easement, over a century of legislation,
litigation,
and
jurisprudence. In Great Northern Ry. Co. v. United States, 315 U.S. 262, 277
(1942)
the Court
extensively reviewed the rights of railway, government, and land patentee, and
explained: "That
petitioner [railway] has only an easement in its rights of way acquired
under the Act of
1875 is therefore clear from the language of the Act, its legislative history,
its early
administrative interpretation and the construction placed upon it by Congress in
subsequent
enactments." The Court applied this construction to the dispute in that case,
and held that
the railroad acquired only a surface easement, and the owner of the fee
owned the
mineral rights. Again in United States v. Union Pacific Railroad Co., 353 U.S.
112, 119 (1957),
the Court, discussing a pre-1875 statute, described the grant of a
right-of-
way to the
railway as "all surface rights to the right of way and all [nonsurface] rights
incident to a
use for railroad purposes." The Court explained that the railway acquired only
an easement.
The question for
the Category 1 landowners is whether, for the segments of rights-
of-way granted
over public lands in accordance with the 1875 Act, the ownership of the
underlying land
remained with the United States for lands subsequently patented to settlers
under the
Homestead Act. The district court held that the ownership never left the United
States and that
the land patentee received no rights therein, and therefore had no
reversionary
right on discontinuance of the railway right-of-way.
03-1395
8
The appellants
state that the district court erred in interpretation and application of
the 1875 Act.
They state that their Homestead Act lands were held by them in fee simple,
subject to the
railway easements as provided by the 1875 Act, and that when the
easements were
relinquished, their land was simply disencumbered. As support the
appellants cite
the statutory language, its contemporaneous explanations and regulations,
its
administration over the ensuing century, and precedent such as Great Northern.
The
government
disputes this interpretation, arguing that various enactments and decisions and
current policy
show that there was no governmental intention to relinquish ownership of the
underlying
land. Thus the government argues that it is irrelevant that the patent that was
granted to a
settler included within its metes and bounds the entirety of the estate
including
the land
carrying the right-of-way, and that the government retained the fee to the land
underlying the
right-of-way.
The appellants
stress the well-recognized rule that property rights that are not
explicitly
reserved by the grantor cannot be inferred to have been retained. The land
patents granted
pursuant to the Homestead Act reserved to the United States certain
specified
rights, viz. previously vested and accrued water rights, previously granted
mineral
rights, and
rights-of-way for ditches or canals. None of these patents mentions retaining or
reserving to
the United States any title or other ownership interest or reversion right in
the
land underlying
previously granted railroad rights-of-way. See Boesche v. Udall, 373 U.S.
472, 477 (1963)
(a land patent "divests the government of title").
The 1875 Act
contemplated that public land carrying a railway right-of-way would be
"disposed of,"
and provided that existing rights-of-way would be preserved if they were
03-1395
9
registered in
the Interior Department's local land office. Section 4 of the 1875 Act, quoted
ante,
recognized that:
all such lands
over which such right of way shall pass shall be disposed of
subject to such
right of way.
43 U.S.C. §937.
By making the disposition of such lands "subject to" the right-of-way, the
Act explicitly
negated the theory that these lands were not included in the "disposition." To
the contrary,
the Act recognized the future disposition of the lands over which the
right-of-
way passes. The
government nonetheless insists -- and the district court held -- that the
government
retained ownership of the underlying lands.
The appellants
do not dispute that their Homestead Act land grant was subject to the
pre-existing
railway easement, but they argue that the fee to the lands underlying the
right-
of-way was
conveyed when the Homestead Act land patents were granted to their
predecessors. A
contemporaneous Interior Department regulation reinforces this view of
the statute.
This regulation describes the legal structure of the railway's right-of-way
under
the 1875 Act,
and the fee simple title conveyed to the patentee of the land:
43 C.F.R.
§2842(a) A railroad company to which a right-of-way is granted
does not secure
a full and complete title to the land on which the right-of-way
is located. It
obtains only the right to use the land for the purposes of which it
is granted and
for no other purpose . . . . The Government conveys the fee
simple title
in the land over which the right-of-way is granted to the
person to
whom patent issues for the legal subdivision on which the
right-
of-way is
located, and such patentee takes the fee subject only to the railroad
company's right
of use and possession.
43 C.F.R.
§2842(a) (1909) (repealed by the Federal Land Policy and Management Act of
1976, 43 U.S.C.
§§1701 et seq.) (emphasis added).
Although the
government stresses that national policy today favors government
ownership of
land for environmental and conservation purposes, the property rights of these
03-1395
10
early
landowners are governed by the law in effect at the time they acquired their
land. See
Leo Sheep Co.
v. United States, 440 U.S. 668, 687-88 (1979) ("This Court has traditionally
recognized the
special need for certainty and predictability where land titles are concerned,
and we are
unwilling to upset settled expectations to accommodate some ill-defined power
to construct
public thoroughfares without compensation.") (footnote omitted); Hastings v.
Whitney, 132
U.S. 357 (1889) ("The doctrine first announced in Wilcox v. Jackson, 13 Pet.
498, that a
tract lawfully appropriated to any purpose becomes thereafter severed from the
mass of public
lands, and that no subsequent law or proclamation will be construed to
embrace it, or
to operate upon it, although no exception be made of it, has been reaffirmed
and applied by
this court in such a great number and variety of cases that it may now be
regarded as one
of the fundamental principles underlying the land system of this country.").
Both sides say
that their positions are supported by statutes enacted in 1906 and
1909 to deal
with discontinued rights-of-way, when some of the underlying lands had
remained public
lands and some had been patented to private persons. Thus 43 U.S.C.
§940 stated
that the discontinued railway easement is "forfeited to the United States" and
that when the
burdened land had been "heretofore conveyed by the United States," the
forfeiture
inures to the benefit of such landowner without further formality. The statute
provided that
an abandoned right-of-way
shall be, and
hereby is, declared forfeited to the United States . . . and the
United States
hereby resumes the full title to the lands covered thereby freed
and discharged
from such easement, and the forfeiture hereby declared shall,
without need of
further assurance or conveyance, inure to the benefit of any
owner or owners
of land heretofore conveyed by the United States subject to
any such grant
of right of way or station grounds . . . .
03-1395
11
35 U.S.C. §940.
The government argues that this statute established that the United States
necessarily
retained title to all land subject to a railway easement, for the statute
declared the
right-of-way
"forfeited to the United States." However, the statute well recognized that such
land may have
been previously conveyed to private owners. Indeed, even on the
government's
strained construction of §940, the forfeited easement automatically inured to
the benefit of
the owner of the underlying land "without need of further assurance or
conveyance."
Even on the government's construction, this 1909 enactment cannot be
viewed as
overruling the 1875 Act by implication, thereby disrupting thousands of land
grants
and long-vested
property rights.
The Court has
consistently preserved the integrity of the land grant patent, in its
review and
application of the statutes before and after the 1875 Act. Throughout its
resolution of
various disputes, the Court has required that unless a property interest was
expressly
reserved by the government, whether in the patent grant or by statute or
regulation
then in effect,
the disposition of the land was in fee simple. For example, in Watt v. Western
Nuclear, Inc.,
462 U.S. 36, 49 n.9 (1983) the Court applied this rule to mineral rights and
noted that:
If land was
erroneously classified as non-mineral and conveyed under a
land-grant
statute, the patentee received title to the entire land, including any
subsequently
discovered minerals. Absent proof of fraud, the Government had
no recourse
once title passed. [Citations omitted.]
In Leo Sheep
Co. the Court construed a homestead grant in light of a 1862 railway statute,
and held that
rights would not be reserved to the government by "divining some 'implicit'
congressional
intent." The Court stated:
The Government
does not claim that there is any express reservation of an
easement in the
Union Pacific Act that would authorize the construction of a
03-1395
12
public road on
the Leo Sheep Co.'s property. Section 3 of the 1862 Act sets
out a few
specific reservations to the "checkerboard" grant. The grant was not
to include land
"sold, reserved, or otherwise disposed of by the United States,"
such as land to
which there were homestead claims. Mineral lands were also
excepted from
the operation of the Act. Given the existence of such explicit
exceptions,
this Court has in the past refused to add to this list by divining
some "implicit"
congressional intent. [Citations omitted.]
440 U.S. at
678-79.
The Court's
precedent has consistently held that absent an explicit reservation of an
interest in
land, such would not be implied. See, e.g., Swendig v. Washington Water Power
Co., 265 U.S.
322, 329, 331 (1924) ("Appellants contend, and it is true as a general rule,
that
when,
conformably to the laws, entry is made and certificate given, the land covered
ceased
to be a part of
the public lands (Witherspoon v. Duncan, 4 Wall. 210, 219, 18 L. Ed. 339), and
that, when a
patent issues in accordance with governing statutes, all title and control of
the
land passes
from the United States," subject to express provisions of regulations then in
effect.)
(citations omitted); United States v. Schurz, 102 U.S. 378, 397 (1880) ("We are
of
opinion that
when, upon the decision of the proper office that the citizen has become
entitled
to a patent for
a portion of the public lands, such a patent made out in that office is signed
by
the President,
sealed with the seal of the General Land-Office, countersigned by the
recorder
of the
land-office, and duly recorded in the record-book kept for that purpose, it
becomes a
solemn public
act of the government of the United States, and needs no further delivery or
other
authentication to make it perfect and valid. In such case the title to the land
conveyed
passes by
matter of record to the grantee, and the delivery which is required when a deed
is
made by a
private individual is not necessary to give effect to the granting clause of the
instrument.").
03-1395
13
The nature of
the transfer of a right-of-way to a railroad under the 1875 Act, and the
patenting to
settlers of the land subject to the right-of-way, has been extensively explored.
In
Great Northern,
315 U.S. at 271, the Court observed that Section 4 of the 1875 Act, which
provided that
when the underlying lands were disposed of by the United States they would
remain subject
to the right-of-way, was not consistent with the railroad's theory that it owned
the mineral
rights underlying the right-of-way. The Court cited the congressional
explanation
of the 1906
statute that: "'Under the present law whenever the railroad passes through a
tract
of public land
the entire tract is patented to the settler or entryman, subject only to this
easement.' H.
Rep. No. 4477, 59th Cong., 1st Sess. p.2 (Ser. No. 4908)." 315 U.S. at 277.
The text of the
1875 Act, and the omission of any reservation or retention or reversion
of the fee by
the United States, negate the now-asserted intention on the part of the United
States to
retain ownership of the lands underlying railway easements when the public lands
were disposed
of. We have been directed to no suggestion, in any land patent, deed,
statute,
regulation, or legislative history, that can reasonably be construed to mean
that the
United States
silently retained the fee to the land traversed by the right-of-way, when the
United States
granted that land to homesteaders.
The district
court relied on certain legislation of 1920 and 1922 as supporting its theory
that the
government retained the fee to the land underlying the easement, after granting
the
land patent
without reservation of the fee. This legislation does not carry the weight
attributed to
it by the district court. A 1920 statute, 43 U.S.C. §913, provided: "All
railroad
companies to
which grants for rights of way through the public lands have been made by
Congress, or
their successors in interest or assigns, are authorized to convey to any State,
county, or
municipality any portion of such right of way to be used as a public highway or
03-1395
14
street:
Provided, That no such conveyance shall have the effect to diminish the
right of way
of such
railroad company to a less width than 50 feet on each side of the center of the
main
track of the
railroad as now established and maintained." The government argues that this
shows that
Congress viewed the railway right-of-way as under its continuing governmental
control and not
under private control. The district court so concluded, stating that "[t]his
statute did
not, however, authorize the government to convey any portion of its reversionary
interest in
1875 Act rights-of-way to the owners of lands abutting or traversed by such
rights-
of-way," and
deemed this omission to support the government's argument that it retained the
reversionary
interest in all grants of rights-of-way under the 1875 Act, whether or not the
underlying land
had been included in a subsequent Homestead patent to the land. However,
an
authorization to railroads to share their 200-foot wide right-of-way with local
highway
needs does not
mandate the conclusion that the United States retained the fee to the land
underlying the
right-of-way after land patents including that land were granted to private
persons.
To similar
effect is the Railroad Rights-of-Way Abandonment Act of 1922, codified at
43 U.S.C. §912.
Section 912 was of the nature of a "quiet title" enactment, for it provided
that when a
railroad ceased use and occupancy of a right-of-way that was originally granted
from the public
lands, the disposition of that relinquished right-of-way depended on whether
title had
previously been granted to a private owner. Section 912 provided that the
interests
of the United
States would be disposed of in accordance with that premise, in that
all right,
title, interest, and estate of the United States in said lands shall,
except such
part thereof as may be embraced in a public highway legally
established
within one year after the date of said decree or forfeiture or
abandonment, be
transferred to and vested in any person . . . to whom or to
which title of
the United States may have been or may be granted, conveying
03-1395
15
or purporting
to convey the whole of the legal subdivision or subdivisions
traversed or
occupied by such railroad or railroad structures of any kind as
aforesaid . . .
.
43 U.S.C. §912.
The government
argues that this supports the position that the government tacitly
intended to
retain ownership of the servient estate whenever land patents were granted to
lands traversed
by a previously granted railway right-of-way. The statute does not support
this position.
The statute requires the United States to convey any rights it may have, to the
patentee of the
land traversed by the abandoned right-of-way; it does not say what rights the
United States
had after the land patent was granted. Indeed, if the United States did have
residual rights
despite the patented land grant, then the statute required that the rights be
conveyed to the
private owner. Such an interpretation does not weaken the position of the
landowners
herein. Neither section 912 nor 913 purported to establish governmental
ownership of
land that had been granted to homesteaders subject to a right-of-way
easement.
The record
shows no documents retaining a fee interest by the United States when
granting any of
the land patents here involved. The rights acquired by the homestead
patentee are
governed by the Act of 1875, which granted to the railroad the right to traverse
the land and
build stations and other railway structures, and provided that disposition of
the
land would be
subject to the right-of-way. The district court erred in holding that the United
States retained
the reversionary interest to the land underlying these rights-of-way after
disposing of
the land by land grant patent under the Homestead Act.
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We conclude
that the land of Category 1 is owned in fee by the landowners, subject to
the railway
easement. The district court's contrary decision is reversed. On the railway's
abandonment of
its right-of-way these owners were disencumbered of the railway easement,
and upon
conversion of this land to a public trail, these owners' property interests were
taken
for public use,
in accordance with the principles set forth in the Preseault cases. On remand
the district
court shall determine just compensation on the conditions that apply to these
landowners.
Categories 2
and 3
The landowners
in the remaining categories all received their land patents before the
Railroad
acquired the right-of-way across their lands.
The Category 2
and 3 landowners gave deeds to the Railroad that explicitly granted
only a
right-of-way restricted to railroad use, and containing a reverter clause to the
landowner
should the railroad discontinue operation. The district court found that
although in
the court's
view the deeds had conveyed a fee simple interest to the Railroad, the reverter
clause restored
that interest to the grantor upon abandonment of railroad use. This ruling is
not appealed;
the district court did not reach the issue of compensation, in view of its Rule
54(b)
certification of the other issues.
Category
4
The Category 4
deeds conveyed to the Railroad "all estate, right, title, and interest" in
the
right-of-way, including reversionary and remainder interests. The landowners in
this
category
stipulated that the deeds conveyed a fee simple to the Railroad, and that they
would
not appeal the
district court's decision. Based on this stipulation the district court declined
to
03-1395
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include
Category 4 in the entry of judgment and the Rule 54(b) certification. No appeal
is
taken as to
Category 4. (Categories 7 and 9 are also not appealed.)
Categories 5,
6, 8, and 15
By warranty
deed or quitclaim deed, these landowners conveyed "real estate" that was
described as a
"right of way" or as a "perpetual right of way" in the substantive part of the
deed. The terms
of conveyance of the right-of-way are those usually used to convey a fee
simple, but in
all cases they are explicit to the grant of a right-of-way, and do not
specifically
mention the
underlying land. Neither do the deeds use words of easement, or reverter if
railway use is
terminated. The district court viewed the words of grant, and the absence of
language of
easement and reversion as evidence of the intention of the parties -- landowners
and Railroad --
to transfer the fee and not an easement.
A deed of
Category 5, cited by the district court, grants a "perpetual right of way"
extending fifty
feet to each side of the center railway line "and the reversion and reversions,
remainder and
remainders, rents, issues and profits therefrom, and all estate, right, title
and
interest in and
to the said property, as well in law as in equity . . . to have and to hold . .
.
upon [Pacific
& Idaho] and its successors and assigns forever." Another deed of Category 5
is in terms
that "grant, bargain, sell, convey and confirm unto [Pacific & Idaho] and to
its
successors and
assigns forever . . . a right of way one hundred feet in width." Another deed
is for "a strip
of land for a right of way . . . to be used . . . for a right of way . . . and
for all and
every purpose
necessary [in connection with] said railway."
The district
court held that the Railroad acquired the underlying land in fee simple.
The court
reasoned that when "the term 'right-of-way' is used in the descriptive clause to
03-1395
18
identify and
describe land or 'real estate' granted in the granting clause, the use is
treated as
merely
descriptive of the land granted and not as limiting the grantee railroad's use
of the
property."
Hash, Memorandum Decision at 13-14. The appellants argue that the usage
"right-of-way"
in the conveyance portion of the deed limits the transfer to a right-of-way, and
that since a
right-of-way is an easement, when the right-of-way became abandoned the land
became
unburdened. They point out that railroad rights-of-way were generally granted in
perpetuity,
because of the permanence of their structures, but that they remained as
easements. See
generally New Mexico v. United States Trust Co., 172 U.S. 171, 183
(1898). See
also Western Union Telegraph Co. v. Pennsylvania R. Co., 195 U.S. 540, 570
(1904) (despite
its added strengths, a railway right-of-way does not have "the substantiality of
the fee.") The
appellants argue that the more reasonable interpretation of the deed language
was to grant an
easement for railway use, for the foreseen permanence of that use, but not
to make a
permanent transfer for all other purposes of a narrow corridor traversing the
owner's land.
The district
court recognized that deeds are interpreted to give effect to the intention of
the parties,
citing Bumgarner v. Bumgarner, 862 P.2d 321, 329 (Idaho Ct. App. 1993), and
that such
intent, in the absence of ambiguity in the deed, must be ascertained from the
plain
wording of the
deed itself. City of Kellogg v. Mission Mountain Interests Ltd., 16 P.3d 915,
919 (Idaho
2000). The court saw no ambiguities in these deeds, and held that they
transferred a
fee simple to the Railroad.
The appellants
state that the law of Idaho was clarified after the district court's
decision, and
that the Idaho Supreme Court's decision in Neider v. Shaw, 65 P.3d 525 (Idaho
2003), is
directly relevant and compels reversal as to all or most of the Category 5, 6,
8, and
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15 deeds. The
Idaho Court held that when the term "right-of-way" appears in the substantive
portion of a
conveyance instrument, the correct interpretation is that the deed conveyed only
an easement and
that the underlying land was not conveyed unless explicitly granted in the
instrument. The
government disputes the position that Neider compels a blanket decision
in
favor of the
landowners, and urges us to remand if we are persuaded that the law in Idaho
may have
changed, or to certify the question to the Idaho Supreme Court.
We conclude
that Neider indeed modified or clarified the law of Idaho, as the Idaho
Supreme Court
itself recognized, as it distinguished its earlier decision in C & G, Inc.
v. Rule,
135 Idaho 763,
25 P.3d 76 (2001), a decision on which the district court relied. The district
court had found
that the use of "right-of-way" in these deeds could have been used either to
limit the legal
estate conveyed, or simply to describe the land included in the deed; the
district
court resolved
the perceived ambiguity of intent by holding that the language conveying "all
right, title,
and interest" was less ambiguous than the usage of "right-of-way," and concluded
that these
deeds conveyed the fee to the land underlying the right-of-way. However, the
Idaho court in
Neider placed controlling weight on the usage "right-of-way" in the grant
clause.
The deed at
issue in Neider contained the traditional "grant, bargain, and sell" terms of
a fee
conveyance, accompanied by the provision that:
Provided:
nevertheless that this deed is made for right of way, station,
sidetrack and
warehouse purposes. Should [the Railroad] fail to establish and
maintain
station and sidetrack, this deed shall be null and void and said land
shall revert
back to the said J. Fremont Bow and C.A. Bow, his wife, or their
legal heirs.
65 P.3d at 527.
In holding that this deed conveyed only an easement, the Idaho court
compared it
with the C & G case where it had reached the opposite conclusion:
03-1395
20
This Court
recently ruled on the issue of whether a conveyance instrument
granted a fee
simple or easement to a railroad in C & G, Inc. v. Rule, 135
Idaho 763, 25
P.3d 76 (2001). In C & G, this Court held that the conveyance
instrument
unambiguously conveyed a fee simple, not an easement, because,
while the
instrument was entitled Right of Way Deed, none of the substantive
provisions
referred to a right-of-way. Id. at 767, 25 P.3d at 80. The
conveyance
instrument in C & G did not limit the use of the land to "railroad
purposes" and
it lacked any language indicating a reversionary interest in the
grantors. Id.
This Court, however, recognized that use of the term right-of-way
in the
substantive portions of a conveyance instrument creates an easement.
Id.
65 P.3d at 530.
Thus the Idaho court now teaches that the use of "right-of-way" in the
substantive
part of the deed creates an easement, not a transfer in fee. Appellants argue
that all of the
deeds in Categories 5, 6, and 8 use "right-of-way" in substantive portions of
the
conveyance, and
that they are therefore distinguished from the C & G case on which the
district court
relied.
The Neider
court further counseled that "When construing an instrument that conveys
an interest in
land, courts seek to give effect to the intent of the parties to the
transaction.
The intent of
the parties is determined by viewing the conveyance instrument as a whole."
65 P.3d at 530
(citations omitted). The district court herein applied this salutary rule, but
applied the
guidance of C & G; this guidance is now modified by Neider in a way that
appears
to be highly
relevant to the deeds here at issue. We therefore vacate the court's decision
with respect to
Categories 5, 6, 8, and 15, and remand for reconsideration in light of the
weight that the
Neider court has placed on the use of "right-of-way" in the substantive grant
and there is no
explicit conveyance of the underlying land.
Categories 10,
12, and 13
03-1395
21
Categories 10,
12, and 13 (there is no Category 11) relate to land for which no
document of
transfer from the homesteader to the railway could be found, but where the
homesteader
preceded the railway on the land. For these lands the district court, upon
ascertaining
that under Idaho law a fee interest can be acquired by adverse possession, did
not view these
parcels as distinguished from others in which there was no explicitly reserved
right of
reversion. The court held that the Railroad owned the land underlying the
easement
in fee simple.
Appellants
complain that the district court engaged in no analysis of the rights of the
parties under
the Idaho law of adverse possession. The government states that such
analysis was
not needed because the parties had stipulated that these parcels had been
acquired by
adverse possession, and that Idaho law provides that adverse possession
results in a
fee in the adverse possessor. Appellants protest, stating that they had merely
accepted
"adverse possession" as a label for use in classifying these parcels into
categories
for this
litigation, and not as a stipulation of the result.
The parties had
agreed that "these parcels should be treated, for the purposes of this
litigation, as
having been acquired by the railroad by adverse possession." Thus the owners
listed the
parcels of Category 10 under the heading "No record B adverse possession." This
classification
expedient cannot fairly be construed as a stipulation that both the underlying
fee and the
overlying easement belonged to the railroad; it was not a concession that the
requirements of
adverse possession had been met. We agree with the appellants that they
did not
stipulate away the results of this litigation simply by naming Categories 10,
12, and 13
as undocumented
and therefore subject to the law of adverse possession.
03-1395
22
Idaho Code
§5-210 states that, to acquire land by adverse possession, the land must
for a period of
five years have been either "protected by a substantial enclosure" or "usually
cultivated or
improved," and that the party claiming by adverse possession must have "paid
all taxes,
territory, county, or municipal, which have been levied and assessed upon such
land according
to law." Appellants argue that the government introduced no evidence that
the Railroad
complied with these requirements, and that the burden of proving adverse
possession is
on the claimant. The government counters that a railroad is certainly an
"improvement,"
and that it is reasonable to assume that this Railroad paid taxes that included
the land over
which it had established its right-of-way. This argument was unsupported by
any evidence,
and cannot, by attorney suggestion, establish the material facts of adverse
possession. No
evidence as to the payment of taxes was presented on behalf of asserted
adverse
possessor; this essential requirement cannot be presumed.
Nor does the
law of adverse possession require that the property owner be deprived of
greater rights
than those that are used by the adverse possessor, that is, the railway
right-of-
way. The
appellants argue that the adverse possessor may have acquired a "prescriptive
easement," but
that title in fee is not thereby acquired. There does not appear to be Idaho
precedent on
this issue, but the great weight of cases in other jurisdictions is to the
effect that
adverse
occupancy of a right-of-way does not confer on the railway any greater interest
in
the land than
that of a right-of-way easement. See, e.g., Strother v. Bootheel Rail
Properties,
Inc., 66 S.W.3d
751 754 (Mo. Ct. App. 2001) ("[T]he weight of authority appears to hold that
'a railroad
company acquires by prescription or adverse possession only an easement in a
right of
way.'") (quoting Pollnow v. State Dept. of Natural Resources, 276 N.W.2d
738, 742
(Wis. 1979));
Wheeling Stamping Co. v. Warwood Land Co., 412 S.E.2d 253, 255 (W. Va.
03-1395
23
1991); Maryland
& P.R. Co. v. Mercantile-Safe Deposit & Trust Co., 166 A.2d 247, 249
(Md.
1960). As the
Maryland court explained:
The principal
reason advanced in support of the rule is that the nature of the
use by the
railroad requires no more than an easement in the right of way and
does not,
therefore, amount to an occupancy adverse to the claim of another to
the fee.
166 A.2d at
249.
This authority
is consistent with "the long established rule" in Idaho "that any right
gained by
prescription is confined to the right as exercised during the prescriptive
period. 'It
is limited by
the purpose for which it is acquired and the use to which it is put.'" Idaho
Forest
Indus., Inc. v.
Hayden Lake Watershed Improvement Dist., 733 P.2d 733, 736 (Idaho 1987)
(citation
omitted). As the Idaho Supreme Court explained in Gibbens v. Weisshaupt, 570
P.2d 870, 875
(Idaho 1977), "[p]rescription acts as a penalty against a landowner and thus
the rights
obtained by prescription should be closely scrutinized and limited by the
courts."
The burden of
establishing compliance with the law of adverse possession as applied
to the fee to
the underlying land, as well as for the right-of-way traversing the land, was on
the claimant to
such possession. That burden has not been met by "clear and satisfactory
evidence."
Utter v. Gibbins, 48 P.3d 1250, 1254 (Idaho 2002) (requiring clear and
satisfactory
evidence of "all the essential elements for [a] claim of adverse possession
under
I.C. § 5-210").
The judgment that the railroad acquired fee title to the underlying lands in
Categories 10,
12, and 13 is reversed.
Category
14
Category 14 is
for deeds to the Railroad from the landowner that were executed after
the Railroad
had entered and occupied the right-of-way, although the landowner possessed
03-1395
24
the land patent
before the Railroad entered the land. The appellants argue that when the
Railroad
entered their land before acquiring a right to do so, this was a de
facto
condemnation,
and cannot give the Railroad more than an easement, whatever the words of
the
later-executed deed. They argue that the deed should be interpreted as mere
confirmation of
the easement already taken by the Railroad, not as conveying additional
rights that are
unnecessary to the right-of-way and unnecessary to the Railroad's operations.
The appellants
argue that this court's opinion in Preseault v. United States, 100 F.3d 1525
(Fed. Cir.
1996) supports the position that only an easement was obtained, and that the
Railroad had no
"possessory interest" in the land. In Preseault the railroad had initially
simply occupied
the land, and later was granted a "warranty deed" in the terms used for fee
transfer; yet
this court, applying Vermont law, held that in view of the unauthorized origin
of
the railroad's
entry upon the Preseault's land, the railroad acquired no more than what it
needed - an
easement for the right-of-way. Id. at 1535-37.
The district
court declined to treat these deeds differently based on the atmosphere of
compulsion that
the appellants postulated, by analogy to condemnation or forced sale. We
agree with that
position, for there was no evidence of any greater inequality between the
buyer and
seller than for the other deeds. However, it is appropriate for the court to
review
these deeds
along with those of Categories 5, 6, and 8, in light of the refinement in Idaho
law
brought about
by the Neider decision. Accordingly, the decision as the deeds of Category 14
is vacated, and
remanded to the district court for further review.
The
Policy Argument
03-1395
25
Statute and
jurisprudence over the century and a half of railroad development and
homesteading
reflect the nation's shifts in both land policy and rail dependency. The
government
stresses that the present national policy is in marked contrast to earlier
homesteading
policy, and that the earlier movement of federal lands into private ownership is
now countered
by a policy whereby government title serves national interests such as
conservation
and public recreation. The appellants respond that the nation, and the courts,
must respect
these landowners' property rights, whatever the shifts in public attitudes or
national
policy. We agree that the judicial obligation is to apply the law, to construe
the
property
interests here at issue in accordance with the law in effect at the time the
various
arrangements
were entered into, in implementation of the parties' intent, guided by the
decisions of
the Supreme Courts of the United States and of Idaho.
Conclusion
Applying the
principles we have discussed, the district court's determination as to
Categories 1,
and 10 (subsuming 12 and 13) is reversed. The determination as to
Categories 5,
6, 8, and 14-15 is vacated, and remanded for redetermination in light of the
Idaho decision
of Neider v. Shaw. The other categories are not presented for review.
REVERSED IN
PART, VACATED IN PART, AND REMANDED |