Argument Recap

Last week the Federal Circuit heard four cases that attracted amicus briefs. In one of these cases, Caquelin v. United States, the court considered a takings claim. As we noted in our argument preview, one of the two issues presented to the court was whether a notice of interim trail use (NITU) “amounted to a government-authorized physical occupation of the underlying property for purposes of [a] takings analysis.” Last Thursday, the parties presented their arguments to a panel that included Judges Prost, Linn, and Taranto. This is our argument recap.

Arguing on behalf of the government, Erika Kranz advocated for the court to rule that there was no physical taking. After making the point that the NITU did not result in a negotiated transfer of the relevant easement from its owner (a railroad) to a prospective trail sponsor, Kranz was asked by the judges whether the issuance of the NITU precluded the end of the easement or if the NITU precluded the railroad from abandoning the easement. Kranz answered that while the railroad had a perpetual easement that remained in effect even after the NITU issued, the NITU prevented the railroad from abandoning the easement only during the timeframe of the NITU. Kranz noted that the railroad did not want to abandon the easement and that the railroad indicated this by signaling that it was willing to negotiate a transfer of the easement. Kranz explained that, in the absence of an NITU, the railroad “would have been free to [abandon the easement], but there was no requirement that it do so.”

The judges then focused on whether the railroad was necessarily free to abandon the easement in light of the NITU. The judges asked: “If we had a letter from the railroad saying that ‘I plan to [abandon the easement] on [a specific date] absent an NITU,’ wouldn’t that be sufficient for us to say that the NITU” constituted a taking? Kranz responded that this might be true, but that that is not the present situation. Further, Kranz resisted “the characterization that the government has prevented the railroad from doing something here.” Instead, she argued, “[t]he railroad has decided to do something here and has complete discretion over whether and when to abandon its rail line.”

Kranz closed her argument by addressing another question presented in the case. She argued that the Federal Circuit does not prefer a bright line test with respect to alleged takings, and urged the court instead to apply a multi-factor test to these types of takings cases.

Thomas Stewart, arguing on behalf of Caquelin, the landowner, began by calling the government’s case a “fool’s errand both procedurally and substantively.” Early in the argument the judges posed a hypothetical fact pattern that would be used throughout the entirety of Stewart’s argument. This fact pattern assumed the railroad said it would take 181 days to remove the rails and only on day 182 would the railroad announce to the world that it was abandoning its easement, such that the status of the easement would not have changed during the 180 days of the NITU. Under this fact pattern, the judges asked, “if the landowner is in no different position [as a result of the NITU], then . . . where is the taking?” Stewart responded that “the taking is the statutory intrusion where the federal law preempts the [landowner’s] state law property right.” Stewart continued by arguing that, even when a taking is temporary (such as when the landowner’s right is delayed), it is still a taking. In response to a request to clarify what is causing the relevant delay, Stewart explained that it is “the issuance of the NITU” that temporarily “blocked the landowner’s reversionary right.” Stewart went on to argue that “[t]he reality is that the railroad . . . had already said ‘we want to abandon this; all the conditions for abandonment have been met.’” Based on this, he argued that “the federal statutory intrusion into that state law property right is exactly what caused the blockage of those reversionary rights.”

In her rebuttal, Kranz was asked whether a decision in the government’s favor would require the court to overturn longstanding precedent. Kranz distinguished this case from the relevant precedent by arguing that the railroad’s interest in this situation was not set to expire at any particular time, and that there “are numerous different outcomes where a NITU expires that are permissible” and not a taking under the court’s precedent.

We will monitor the case and report on its outcome.