On May 5, the Federal Circuit issued its opinion in ATS Ford Drive Investment, LLC v. United States, a case originally decided by the Court of Federal Claims. In this takings case, the Federal Circuit reviewed questions related to rails-to-trails conversion, whether the lower court erred when it refused to certify a question to the Indiana Supreme Court and when it held that right-of-way and damage-release forms landowners signed in the 1840s and 1850s granted a railroad title to fee simple estates in a strip of land used for a railway line. Judge Cunningham authored the the Federal Circuit’s opinion, which described why the court affirmed the lower court’s judgment. Judges Stoll and Lourie joined Judge Cunningham’s opinion. This is our opinion summary.
Judge Cunningham’s opinion provided the relevant background:
In 1846, the Indiana General Assembly chartered the Peru and Indianapolis Railroad Company and tasked it with building a railroad. . . . Sections 15 and 16 of the Charter authorized the Peru and Indianapolis Railroad Company to acquire land either voluntarily through “relinquishment of so much of the land as may be necessary for the construction and location of the road” or by eminent domain . . . Section 19 of the Charter provides that when the corporation “shall have procured the right of way, as hereinbefore provided, they shall be seized, in fee simple, of the right to such land, and they shall have sole use and occupancy of the same” . . .
By 1853, the Peru and Indianapolis Railroad Company had persuaded Appellants’ predecessors-in-interest to sign written releases (the “Releases”) relinquishing strips of land on which to build the railroad . . . Each of the Releases contains materially identical language stating that the landowner agrees to “release and relinquish to the Peru and Indianapolis Railroad Company the right of way for so much of said road a may pass through or cut” a described parcel. . .
A railroad line, now known as the Nickel Plate Line, was constructed on the relinquished land. . . . The ownership of the railroad line subsequently passed through several successors until Hamilton County and the cities of Fishers and Noblesville became joint owners of the line. . . . In 2017, the municipalities informed the Surface Transportation Board that they wanted to invoke the Trails Act to convert the railroad line into a recreational trail. . . . In 2018, the municipalities formally requested that the Surface Transportation Board issue NITUs for the portions of the railroad line passing through their municipalities. . . .The Surface Transportation Board issued the NITUs on December 21, 2018, and the municipalities became trail sponsors in 2019. . .
In 2020, Plaintiffs sued the United States in the Court of Federal Claims, alleging that the trail corridor conversion constituted a compensable taking under the Fifth Amendment. . . . The United States contended that, under settled Indiana law, the Releases conveyed the land underlying the Nickel Plate Line in fee simple and that Plaintiffs therefore lacked any property interest in the land they alleged was taken. . . . While Plaintiffs argued that the Releases conveyed only an easement, they also sought certification of the question of the scope of the Releases’ conveyance to the Indiana Supreme Court. . . .
Judge Cunningham began with the second question, whether the lower court erred in holding that the forms the landowners signed granted the railroad title to fee simple estates. She concluded “that Indiana law at the time of the relinquishments is clear: the Releases conveyed to the Peru and Indianapolis Railroad Company fee simple estates.” She reasoned that “the plain language of the charter supports a conveyance of a fee simple estate rather than an easement.” She noted how “the Indiana Supreme Court held that Section 19 of the Charter provided that landowners conveyed fee simple titles, rather than easement, when standard releases of land pursuant to Section 15 of the Charter were executed.”
Judge Cunningham then addressed the arguments of the amici. She noted that, “for the land to be the property of the Peru and Indianapolis Railroad Company’s successor railway company, and for any title to have enured to the railway company, it necessarily must have been true that fee simple title was conveyed.” Furthermore, she indicated, “none of cited cases” cited “purports to overturn” precedent “as to the effect of the Peru and Indianapolis Railroad Company’s legislative charter or the effect of a release materially identical to those at issue in this case.”
Judge Cunningham next addressed the first question presented by the parties–whether the lower court erred when it refused to certify a question to the Indiana Supreme Court. On this question, Judge Cunningham concluded that “[t]he presence of clear, binding Indiana law precludes” the request for certification. She noted the question “according to Indiana courts, is ‘not an open one.’” She indicated “[b]asic fairness, avoidance of unwarranted delay and the imposition of additional costs on the parties, and conservation of judicial resources . . . all dictate” that no certification was necessary.
As a result of Judge Cunningham’s analysis, the panel affirmed the judgment of the Court of Federal Claims.