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Full Opinion
OPINION
The plaintiffs in these cases are Missouri landowners who claim to own the fee interests in lands underlying two railroad lines. Their Fifth Amendment takings claims have been consolidated for the purpose of resolving common issues of federal and Missouri law. The primary question presented is one of state law â whether ârailbanking,â the preservation of otherwise abandoned railroad easements for possible future railroad activity by interposition of interim trail use, constitutes a railroad purpose under Missouri law. Railbanking was imposed by Congress through the National Trails System Act
BACKGROUND
Plaintiffs allege that they own fee interests in lands burdened by railroad easements. For purposes of ruling on the motions for summary judgment, those interests are assumed. Missouri law as to the respective rights of the underlying fee estate and the railroad user will be explored in more detail below. It is sufficient at the outset to state that plaintiffsâ lands were subject to easements for railroad purposes. As a matter of Missouri law, once such an easement is extinguished, by abandonment or otherwise, the right to control of the surface reverts to the underlying fee owner.
Although the respective property interests are subject to state law, railroads operate subject to federal regulation. In order for a railroad to cease operations in an area or abandon its track over a particular section of railroad, it must obtain permission from the appropriate federal government agency. See 49 U.S.C. § 10903 (1996). Currently, this is the Surface Transportation Board (STB); however, at all times relevant to this action, the appropriate agency was the Interstate Commerce Commission (ICC).
Assuming that the application is approved, then a qualified trail provider
If no agreement with a trail provider is reached within the time-period prescribed by the CITU/NITU and any applicable extensions, the railroad is free to discontinue rail service and abandon the right-of-way. See 49 C.F.R. § 1152.29(b)(l)(ii). If this occurs, the right-of-way passes out of federal jurisdiction. See Preseault v. ICC, 494 U.S. 1, 7, 110 S.Ct. 914, 108 L.Ed.2d 1 (1990). Once abandoned by the railway, the railroadâs right-of-way terminates and the underlying property owner would then own the parcel free and clear of the burden previously imposed by the now-extinguished easement. G.M. Morris Boat Co., Inc. v. Bishop, 631 S.W.2d 84 (Mo.Ct.App.1982).
Grantwood Village
Grantwood Village, the plaintiff in Action No. 98-176L, is a municipality located in St. Louis County, Missouri. It owns a parcel of land within its borders. Until at least 1987, and perhaps as late as 1991, the Missouri Pacific Railroad (MoPac) and its predecessors in interest possessed a right-of-way easement over this parcel and operated a rail line, known as the Carondelet Branch,
On February 10, 1992, MoPac filed a Notice of Exemption pursuant to 49 C.F.R. § 1152.50 with the ICC seeking to discontinue and abandon railroad service over a 6.2-mile part of the Carondelet Branch; Grant-wood Villageâs property was contained within this section. MoPacâs Environmental Report, filed with its Notice of Exemption, stated that âthere has been no local movement of freight for more than two years and overhead traffic has been successfully rerouted in the railroadâs operations. Thus, there should be no effects from the proposed abandonment.â The Report went on to state that there was âno feasible alternative to the abandonment and no need to preserve rail serviceâ along the Carondelet Branch and that there was âno indication there would be future traffic sufficient to justify the costs necessary to justify the costs necessary to sustain rail operations over the line.â When asked to describe its proposed action, MoPac stated, also in its Environmental Report, that âthe proposed action involves discontinuance of [railroad] operations and physical abandonment of the Carondelet Branch.â
On February 6, 1992, Gateway Trailnet (Trailnet), a Missouri corporation, had petitioned the ICC for a NITU applicable to the portion of railway that MoPac was seeking to abandon. Trailnet is a non-profit corporation which operates recreational trails. The ICC issued a NITU on March 25, 1992 allowing MoPac and Trailnet to negotiate an agreement for interim trail use for the affected part of rail line. After a series of extensions of the NITU, MoPac and Trailnet came to an agreement for interim trail use for the 6.2-mile stretch of land; this agreement was finalized on December 30, 1992. On that same day, MoPac executed a quitclaim deed in favor of Trailnet conveying all of its interests in the Carondelet Branch. After executing its agreement with Trailnet, MoPac removed all of the rails and ties along the line; Trailnet has since maintained and operated a recreational trail along the line. Grantwood Village v. Missouri Pac. R.R. Co., 95 F.3d 654 (8th Cir.1996).
The agreement between MoPac and Trail-net allowed for the possible resumption of rail service on the 6.2-mile stretch. On April 9, 1997 Union Pacific Railroad Corporation applied to the STB to reopen an 1100-foot portion of the Carondelet Branch previously abandoned by the March 25, 1992 NITU order. The STB granted this request on April 18,1997.
The Glosemeyers, plaintiffs in No. 93-126L, and the plaintiffs in No. 93-134L (âMoore plaintiffsâ)
In its appbcation for abandonment filed August 20, 1986, MKT sought to âabandonâ the Machens-Sedalia bne and âall operations thereoverâ and authority to dismantle the rail line. Appbcation of Missouri-Kansas-Texas Railroad Company, I.C.C. Docket No. AB-102, at 2. As justification for its appbcation, MKT stated:
The bne which [MKT] seeks to abandon is located on the north side of the Missouri River for a major portion of its length. As a consequence, the bne is subject to flooding and other problems associated with its location so close to the river. The bne does not generate enough local business to justify the continued maintenance and operation of the bne. [MKTâs] overhead traffic no longer moves over the bne sought to be abandoned.
Id. at 2-3. The appbcation went on to state: The rail [along the bne] is mostly obsolete because of its age and the heavy loading characteristics of todayâs cars. Most of the bridges are designed for lighter ear loadings, and there is an economic limit as to how much these bridges can be strengthened. The trackage is difficult and expensive to maintain because of its physical characteristics and because of the almost annual flooding that takes place. In [MKTâs] opinion, based on a cost and revenue study of traffic transported over the portion of bne sought to be abandoned and including the cost of maintenance, it is not possible to operate said bne profitably in the future.
Id. at 4.
On March 6, 1987, the ICC authorized abandonment of the rail bne and on April 27, 1987, issued a CITU allowing for negotiation of an interim trail agreement covering the Maehens-Sedaba bne. On June 25, 1987, MKT entered into an agreement with the Missouri Department of Natural Resources (âMDNRâ) for trail use. By the terms of the agreement, MKT transferred to MDNR ab interests it might have in the land comprising the Maehens-Sedaba line for $200,000. MKT later removed all of the track from the Maehens-Sedaba bne. A recreational trail, known as the Katy Trail, is now operated over most of the former rail line.
DISCUSSION
The court wifl assume for the present that plaintiffs own the fee estate underlying the recreational trails. They allege that, but for the appbcation of the Rails-to-Trails Act, they would enjoy full use of the surface because of the reversionary
It is the thwarted termination of the railroadsâ rights-of-way â prevented and preempted by operation of the Rails-to-Trails Act â that gives rise to the potential takings claim. See National Assân of Rever-sionary Property Owners v. Surface Transp. Bd., 158 F.3d 135, 139 (D.C.Cir.1998). That this Congressional preemption of state property law was not inadvertent is evidenced by the following statutory language: âin the case of interim use [as a trail] of any established railroad rights-of-way ... such interim use shall not be treated, for purposes of any law or rule of law, as an abandonment of such rights-of-way for railroad purposes.â 16 U.S.C. § 1647(d). Congress has the power to impose its will in this manner;
As Justice OâConnor noted in Preseault, real property rights arise from state law. See id. at 20, 110 S.Ct. 914 (OâConnor, J., concurring); see also Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1001, 104 S.Ct. 2862, 81 L.Ed.2d 815 (1984). Therefore, when a federal court analyzes the effect of federal action on real property, it must utilize the law of the situs, see Foster v. United States, 221 Ct.Cl. 412, 420-21, 607 F.2d 943 (1979), in this case, Missouri. Whether the Rails-to-Trails Act effects a taking in these cases thus depends âupon the nature of the of the state-created property interest that petitioners would have enjoyed absent the federal action and upon the extent that the federal action burdened that interest.â Preseault, 494 U.S. at 24, 110 S.Ct. 914 (OâConnor, J., concurring). In other words, if the railway easements would have been extinguished but for the application of the Rail-to-Trails Act, then a new easement for a recreational trail has been imposed.
The Government argues that the question now before the court is simply whether ârail-bankingâ pursuant to the Rails-to-Trails Act is a ârailroad purposeâ under Missouri law. While that question is an essential part of the inquiry, it can only be answered in the larger context of whether there was an abandonment under state law. If there was not, then there would be no taking, because the easements would continue to burden the plaintiffsâ lands. If the court were to restrict itself to the abstract question of law posed by the Government, it would avoid adjudication of a prima facie element of the plaintiffsâ claim. Plaintiffs, in other words, must establish that the railroad easements, absent the application of the Rails-to-Trails Act, would no longer burden the land, i.e. that they would have been deemed abandoned or otherwise extinguished under Missouri law. It is only as a defense to the larger question of abandonment that railbanking becomes relevant.
Abandonment
Abandonment of an easement in Missouri is âproved by evidence of an intention to abandon as well as of the act by which that intention is put into effect; there must be a relinquishment of possession with intent to terminate the easement.â Dalton v. Johnson, 320 S.W.2d 569, 574 (Mo.1959) (citation omitted). Application of that rule in the context of easements held by railroads was perhaps most clearly explained in Kansas City Area Transp. Auth. v. 4550 Main Assoc., Inc., 742 S.W.2d 182 (Mo.Ct.App.1986):
Mere non-user of the easement will not extinguish the easement unless accompanied by an intention on the part of the owner of the dominant estate to abandon it. There must be an intention to abandon without an intention to again repossess it. The doctrine of abandonment will sometimes operate against railroads. When a railroad ceases to use for railroad purposes property over which it has an easement, the original owners [of the underlying fee estate] or their grantees thereafter hold the property free from the burden of the*777 easement. Some Missouri cases dealing generally with abandonment of easements refer to relinquishment of possession as a necessary element of abandonment. In the case of railroads, however, an easement for a railroad right-of-way is extinguished when the railroad ceases to run trains over the land. The test for abandonment of an easement under Missouri law is therefore, non-user of the easement accompanied by conduct indicating an intention to abandon.
Id. at 189 (emphasis added) (citations omitted). The court further held that âabandonment of [an] easement is a necessary consequence when trains no longer are operated over the land on which the easement is claimed. An intention to abandon is inferred by the discontinuance of rail service with no prospect for resumption of service.â Id. at 191.
While abandonment of a railroad easement is a question of fact which must be proven by clear and convincing evidence, see Jordan v. Stallings, 911 S.W.2d 653, 658 (Mo.Ct.App. 1995), the facts in most cases are straightforward. In Jordan, the court found that the removal of the ârails, ties and rail bed necessary for the operation of trains [was] obviously in furtherance of the railroadâs intention to abandon [its] right-of-wayâ and that the easement was therefore legally abandoned. Id. at 659; see also Moore v. Missouri Friends of the Wabash Trace Nature Trail, Inc., 991 S.W.2d 681, 688 (Mo.Ct.App. 1999). Similarly, where no trains had been run over the contested right-of-way for over twelve years and billboards and parking lots had been placed on the right-of-way, the court found those facts to be conclusive evidence of abandonment in Kansas City Area Transp. Auth., 742 S.W.2d at 191.
The uneontested facts support a conclusion that the easements in the three cases at hand would have been treated as abandoned under Missouri law, and thus extinguished, but for the application of the Rails-to-Trails Act. In each instance there was both an intent to abandon rail service and acts in furtherance of that intent.
In all of these cases, the railroadsâ applications to the ICC for authority to abandon are clear evidence of intent to abandon their easements. See Boyles v. Missouri Friends of the Wabash Trace Nature Trail, Inc., 981 S.W.2d 644, 649 (Mo.Ct.App.1998) (â[Railroadâs] application for certificate of abandonment with the ICC together with its subsequent removal of the railroad tracks constituted evidence of its intention to abandon the railroad easementâ).
This intent was confirmed by conduct. The railroads here removed their tracks and ceased all operations. The fact that no trains have been run over these easements for years is strong evidence of abandonment. â[A railroad right-of-way] easement is extinguished when the railroad ceases to ran trains over the land.â Schuermann Enterprises, Inc. v. St. Louis County, 436 S.W.2d 666, 668 (Mo.1969) (citing State Highway
Finally, the railroads in these cases actually rid themselves by conveyance of their entire legal interests in these easements. The trail providers, and not the railroads, are the owners of record of these âeasements,â and have modified the former rail beds. Conveying oneâs interest in land is clear evidence of abandonment, particularly when it is for a contrary purpose. See Kansas City Area Transp. Auth., 742 S.W.2d at 190; cf. Seventy-Ninth St. Improvement Corp. v. Ashley, 509 S.W.2d 121 (Mo.1974) (offer to convey interest in land inconsistent with use of interest as right-of-way for railroad purposes and supportive of finding of abandonment).
These facts compel the court to find that the railroads intended to abandon, and in fact did abandon, their easements. There is no contrary evidence offered of any intent to begin the rebuilding process that would be necessary to run trains once again. As a matter of Missouri law, therefore, plaintiffs would have had immediate access to the surface, see Chouteau v. Missouri Pac. Ry. Co., 122 Mo. 375, 22 S.W. 458, 460-61 (1893), had it not been for the application of the Rails-to-Trails Act. The remaining question, then, is whether, under Missouri law, the interception of the fee ownersâ right to possession by conversion of the railbeds to trail use precludes an abandonment â i.e. is either trail use or railbanking, or their combination, sufficient under state law to forestall plaintiffsâ right to immediate possession? Only if this question is answered in the negative is the possibility of a taking presented.
Trail Use
The government argues that the use of the former rail line on an interim basis as a trail constitutes a railroad purpose. We disagree.
In Missouri, an easement granted for a particular purpose âterminates as soon as such purpose ceases to exist, is abandoned, or is rendered impossible of accomplishment.â Ball v. Gross, 565 S.W.2d 685, 689 (Mo.Ct.App.1978). This applies to railroad right-of-way easements, which are held only for ârailroad purposes.â Rombauer v. St. Louis-San Francisco Ry. Co., 225 Mo.App. 78, 34 S.W.2d 155, 156 (1931); see also Jordan v. Stallings, 911 S.W.2d 653, supra. Land or a right of way acquired by a railroad âmay be used for any legitimate, incidental purpose that is reasonably necessary or convenient to the construction, maintenance, and operation of the railroad.â Rombauer, 34 S.W.2d at 156.
The installation and maintenance of track, and the subsequent running of a train, over a stretch of land clearly constitutes a permissible railroad purpose. Even less direct uses, when they are related to operation of a railroad, have been permitted. The question is whether the use is incidental to the operation of trains. See Hennick v. Kansas City Southern Ry. Co., 364 Mo. 883, 269 S.W.2d 646, 652 (1954). In Rombauer, a railroad maintained bunkhouses for its employees on its right-of-way easement. In holding that construction of bunkhouses was a use within the scope of the railroadâs easement, the court stated held:
[T]he question of whether or not a use, or proposed use, of its right of way by a railroad company is necessary for railroad purposes is, primarily at least, a matter to be determined by the [railroad] company itself in the exercise of its judgment, so that, in the absence of a showing that the use and occupancy is not necessary for railroad purposes, and that such use is in bad faith and not the result of the honest exercise of the companyâs judgment, the courts will be reluctant to interfere therewith.
Rombauer, 34 S.W.2d at 156.
Similarly, the placing of station grounds upon an easement was held to be a railroad purpose. See Brown v. Weare, 348 Mo. 135, 152 S.W.2d 649 (1941). See also Quinn v. St. Louis-San Francisco Ry. Co., 439 S.W.2d 533 (Mo.1969) (railroad depot within scope of easement). Railroads may also transfer their interests in their right-of-way ease-
Although Missouri courts are reluctant to interfere with a railroadâs own determination of an appropriate purpose, some uses have been prohibited. For example, in Missouri-Kansas-Texas R.R. Co. v. Freer, 321 S.W.2d 731 (Mo.Ct.App.1958), stockpiling sand and limestone along a railroad right-of-way was held not to be a railroad purpose, when the material was to be used in a concrete plant. Id. at 740. The terms of the easement dictated that it be used as a ârailroad right of way ... in the maintenance of [the railroadâs] roadbed and the operation of its trains.â The court held that it would be âstretching the use beyond the contemplation of the parties to say that the instrument was intended to grant a right-of-way which could be used for the purpose of stockpiling sand and limestone and the mixing of it for the purpose of prosecuting a private business.â Id. A use of an easement that is prohibited or otherwise beyond the scope of the easement causes the easement to terminate. Chouteau, 22 S.W. at 461.
The Freer court pointed out that several other uses had been held by a variety of jurisdictions not to constitute a railroad purpose: a tobacco warehouse, a cottonseed gathering house, a retail filling station, and a coal chute. See Freer, 321 S.W.2d at 738 nn. 15-19, 22. Similarly, the running of power lines over a railroad right-of-way easement, when those power lines were unconnected with the running of the railroad, was held to be a non-railroad use, and thus an impermissible additional servitude. See Eureka Real Estate & Inv. Co. v. Southern Real Estate & Fin. Co., 355 Mo. 1199, 200 S.W.2d 328, 332 (1947).
Under this line of cases, trañ use, by itself, would not constitute a railroad purpose. The transportation use contemplated by a railroad purpose would clearly be the movement of trains over rails. Recreational hiking, jogging and cycling are not connected with railroad use in any meaningful way.
A recent decision of the Missouri Court of Appeals, Boyles v. Missouri Friends of the Wabash Trace Nature Trail, Inc.,
The term ârailroad purposesâ ... does not encompass other forms of transportation, such as walking or bicycling, and the recreational purposes for which Wabash proposes to use the property do not fall within the commonly understood meaning of ârailroad purposes.â... The proposed development of a hiking, biking, cross-country skiing, and nature trail is completely unrelated to the operation of a railway and consistent only with an intent to wholly and permanently cease railway operations.
Other jurisdictions have reached the same result. See, e.g., Preseautt v. United, States, 100 F.3d 1525, 1542-44 (Fed.Cir.1996) (applying Vermont law); Lawson v. Washington, 107 Wash.2d 444, 730 P.2d 1308 (1986) (holding that conversion of railroad rights-of-way to recreational hiking trails effected a taking under the state constitution); Pollnow v. Department of Natural Resources, 88 Wis.2d 350, 276 N.W.2d 738 (1979) (holding that recreational trail was not within the scope of a railroad right-of-way easement).
Railbanking
The Government argues, however, that the trails were not simply intended for a current recreational purpose, but were also meant to keep the existing corridors intact for potential future rail service over the same routes. Defendant argues that railbanking is a railroad purpose under state law and that the easements thus should not be deemed abandoned. It contends that holding out the possibility of a reactivation, even if remote and indefinite, is a railroad purpose in and of itself. This future potentiality thus becomes a present railroad purpose in the view of the Government and the amicus.
There is no question that this potentiality, insofar as these particular easements are concerned, exists purely in the realm of the hypothetical. No evidence was offered of a present intent to reinstate rail service in the future.
Defendant cites Hennick v. Kansas City Southern Ry. Co., 364 Mo. 883, 269 S.W.2d 646 (1954), in support of its argument. Hen-nick dealt with a conveyance from a regulated to an unregulated user and a conversion from an ICC-regulated rail line to a short line railroad. At the time in question, the railroad was not running trains over a portion of the tracks. Id. at 649-50. The court concluded that these facts were not conclusive evidence of a permanent discontinuance of railroad purposes. Id. at 653. It held that a temporary discontinuance will not extinguish an easement while the railroad plans for the future.
Hennick is no support for railbanking. Shortly after approval of abandonment, the railroad there negotiated a transfer to a new user. The tracks were never dismantled and the transfer in that case was merely to an unregulated railroad. The transferee intended to operate a short line railroad, not a recreational trail. The Hennick court noted that the abutting landowners could not complain because the use made of the land was
[N]onuser of a right or privilege may be of such a duration that such nonuser, along with other facts, may constitute an abandonment; and this, irrespective of a later declared purpose of the grantee to exercise its rights ... at some indefinite future time.
More nearly on point is the decision of the intermediate Missouri appellate court in Boyles. The court there was faced with the argument that one of the purposes of the recreational trail was âto keep the existing corridor intact for transportation needs that may occur in the future, such as reactivated rail service.â Boyles, 981 S.W.2d at 649