The Federal Circuit recently issued its opinion in Behrens v. United States, a takings case we have been following because it attracted amicus briefs. In the case, the Behrens appealed a determination by the Court of Federal Claims that the Behrens were not entitled to compensation because the scope of an easement was broad enough to encompass railbanking and the construction of a hiking and biking trail. In an opinion authored by Judge Dyk and joined by Judges Taranto and Hughes, the Federal Circuit reversed the judgment of the Court of Federal Claims and remanded the case. This is our opinion summary.

Judge Dyk presented the facts of the case:

This appeal concerns a 144.3-mile corridor (“Corridor”) utilized by the St. Louis, Kansas City, and Chicago Railroad Company (“Railroad Company”) beginning in the early 1900s for the operation of a railroad. The necessary easements were acquired through a mix of condemnations and land grants from property owners. At issue in this appeal are nineteen source deeds conveying easements as to
properties located along the Corridor.

Most recently, the easements were conveyed to the Missouri Central Railroad Company which then leased the operating rights to Central Midland Railway Company. Missouri Central Railroad and Central Midland Railway wished to discontinue service on and abandon the railway and filed a verified notice of exemption that, if granted, would allow the railroads to consummate abandonment. On December 16, 2014, the Missouri Department of Natural Resources filed a timely request to intervene in the abandonment proceeding, seeking to utilize the easements for interim trail use on the Corridor. On February 26, 2015, the STB issued a NITU for the corridor. On December 20, 2019, the Missouri Central Railroad and the Natural Resources Department jointly notified the STB that they had executed a trail use agreement in accordance with the NITU and STB regulations.

Plaintiffs filed takings claims on April 27, 2015, in the Claims Court. Plaintiffs moved for summary judgment on liability, asserting that the railroad originally acquired mere easements, pursuant to Missouri law; that the railroad’s easements were limited to railroad purposes; and that the conversion of the easements for a public recreational trail was beyond the scope of easements, and thus constituted a taking. The government then cross-moved for summary judgment on the ground that the deeds granted an easement broad enough to allow for interim trail use and railbanking.

The Claims Court held that the property rights acquired by the railroad here on appeal were easements but that the government was not liable for a taking as to those parcels because the easements allowed interim trail use.

Plaintiffs filed a motion for reconsideration . . . . After further proceedings regarding the scope of the easements, the Claims Court again held that the government was not liable for a taking because the easements, while not unlimited, were nonetheless broad enough to allow interim trail use.

After the deadline for filing summary judgment motions had passed, the parties jointly moved for an entry of judgment under Rule 54(b) of the Rules of the Court of Federal Claims on the easements here on appeal.2 The Claims Court granted the motion. Plaintiffs timely appealed.

After providing this background, Judge Dyk first addressed whether the “railroad had obtained easements or fee simple estates.” He concluded that “the Missouri Central Railroad had easements and not fee simple interests.” As for why, he explained that “[e]ach grant in this case was to a railroad and for one dollar.” Notably, he concluded, “[u]nder Missouri law, a conveyance of property to a railroad for nominal consideration is treated as a voluntary grant.”

Next, Judge Dyk determined the easements’ scope. He explained how “[t]he Missouri statute states that a voluntary grant ‘shall be held and used for the purpose of such grant only.'” Furthermore, he explained, “railroad purposes are the only allowable purposes of the granted easements and define the scope of the easements.”

Judge Dyk then addressed “whether trail use and railbanking are within the scope of the easements, i.e., whether (1) trail use and (2) railbanking are railroad purposes.” He explained that, “[i]n Missouri, trail use, the first of these uses, is not a railroad purpose.” Moreover, he explained, “[u]nder Missouri law, establishing a nature trail for the purpose of keeping the corridor intact for future rail service is not considered a railroad purpose if there is no evidence that such future use is realistic.”

In short, in this case, the Federal Circuit held the “easements granted to the railroad were not broad enough to encompass interim trail use or railbanking” and as a result a takings occurred. In light of its analysis, the Federal Circuit reversed the lower court’s decision and remanded the case for further proceeding consistent with its opinion.