U.S. Supreme Court upholds property rights in rails-to-trails case

Earlier today, the U.S. Supreme Court issued its decision in the “rails-to-trails” property rights case, Marvin M. Brandt Revocable Trust v. United States—a case in which PLF attorneys participated as an amicus curiae. By an 8-1 margin, the Court ruled in favor of the property owner, upholding one of the most important and fundamental policies of our property law system: certainty and predictability in land titles. That is a win for all property owners. We congratulate our friends at Mountain States Legal Foundation, who represented the Brandt family in this case.

The Brandt case arose from the federal government’s “Rails-to-Trails” program, which seeks to convert old, abandoned railroad tracks into recreational trails. As nice as that program may sound, there is a problem with it: many of the abandoned tracks run over private property, and trail conversion would invite joggers, strollers, bicyclists, and countless others to cross through peoples’ backyards. For obvious reasons, the affected property owners object to such trails and insist that, if the government goes forward with the conversion, it pay just compensation for the public intrusion as required by the Fifth Amendment of the U.S. Constitution.

But, before we can get to the constitutional question, we need to answer the much more basic question ‘who owns what?’—after all, there is no obligation to pay just compensation if the landowner doesn’t own the abandoned railroad track. Title in the Brandt case traces back to a nineteenth century statute (the “1875 Act”) that granted railroad companies easements all over the country in order to lay tracks—of course, at different times, the government issued different types of property interests. 1875 Act easements were written so that they would be extinguished and the land over which the track ran would return to the underlying property owner in the event the railroads ever abandoned the easements. But in 1988, Congress passed a “railbanking” statute that says that, upon abandonment by a railroad company, the government can morph the railroad easements into public recreational trails, without any compensation for the underlying landowner.

In this case, the Brandts purchased their Wyoming property subject to a railroad easement that was eventually abandoned. Under the common law rules of property, the case should have been open-and-shut: the Brandts owned the land and were entitled to compensation for a taking if the government converted the abandoned railroad easement into a recreational trail. The United States, however, asked the court to ignore the common law of property, claiming that the government could alter the common law rules of property to create an “implied reversionary interest” in the railroad easements that trumped the Brandt’s interest in their land.

The U.S. Supreme Court rejected the federal government argument on two grounds.  First, the government had taken the opposite position (asserting that “the 1875 Act granted an easement and nothing more”) when it argued about the type of property interest conveyed by the 1875 Act in Great Northern Railway Co. v. United States (1942). Second, the well-settled rules of property law do not allow a grantor to retain an implied interest in an easement— that point of law was the primary focus of PLF’s amicus brief.

A final point of interest comes from Justice Sotomayor’s dissenting opinion. She writes that she would suspend common law understandings of property ownership when the federal government transfers land to private ownership. According to her, words like “fee” and “easement”—which establish the precise ownership interest conveyed and all legal rights and expectations arising therefrom—”do not neatly track common-law definition” when the government is involved. Thus, the federal government should be permitted to convey an easement that doesn’t operate like an easement. She concludes by relating a fear that following the common law of property ownership will result in “lawsuits challenging the conversion of former rails to recreational trails [which] may well cost American taxpayers hundreds of millions of dollars.”

That, however, is precisely what the Takings Clause requires: “nor shall private property be taken for public use, without just compensation.”

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