Cheshire Hunt, Inc. v. United States

In the United States Court of Federal Claims

No. 18-111L

(Filed: July 9, 2020)

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CHESHIRE HUNT, INC., et al., *

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Plaintiffs, * Motion to Stay; Rails-to-Trails;

* Fifth Amendment Taking;

v. * Indefinite Stay; Pressing Need.

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THE UNITED STATES, *

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Defendant. *

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Lindsay S.C. Brinton, with whom was Meghan S. Largent, Lewis Rice LLC, St. Louis,

Missouri, for Plaintiffs.

Mark F. (Thor) Hearne, II, with whom was Stephen S. Davis, True North Law, LLC, St.

Louis, Missouri, for Plaintiffs.

Zachary West, Trial Attorney, with whom was Prerak Shah, Deputy Assistant Attorney

General, Environment & Natural Resources Division, U.S. Department of Justice,

Washington, D.C., for Defendant.

OPINION AND ORDER

WHEELER, Judge.

This is a rails-to-trails Fifth Amendment takings case in which the Plaintiffs are

seeking compensation for the Government’s alleged taking of a railroad easement over

their property. Now before the Court is the Government’s motion to stay this case pending

the resolution of a quiet title action in the Middle District of Florida that concerns part of

the railroad right-of-way. For the reasons that are discussed below, the Court DENIES the

Government’s motion to stay this case.

Background

The Government brought a motion to stay just compensation proceedings in this

case pending a decision in Grames v. Sarasota County, No. 20-739, a quiet title class action

in the Middle District of Florida. Dkt. 92 at 8. This motion is opposed by the Plaintiffs.

Dkt. 95 at 1; Dkt. 97 at 1. This case is one of nine cases currently before the Court alleging

that the Government violated the Takings Clause of the Fifth Amendment when it

authorized the conversion of railroad rights-of-way into public recreational trails in

Sarasota County, Florida, without compensating the private property owners. Dkt. 92 at 2.

The five plaintiffs in Grames are also party to 4023 Sawyer Road I, 19-757L, a related case

currently pending before this Court, but not to Cheshire Hunt. Dkt. 97 at 5.

The right-of-way in question was established in 1910 when private landowners

granted Seabord Railway an easement to construct a railroad from Sarasota to Venice. Dkt.

92-1 at 10. Seabord transferred this easement to CSX Transportation (“CSXT”) to continue

to use the railway corridor. Id. at 12. Beginning in April 2004, CSXT notified the Surface

Transportation Board (“STB”) of its intent to abandon the right-of-way. Id. at 14. The

STB then issued a Notice of Interim Trails Use or Abandonment, invoking Section 8(d) of

the Rails to Trails Act to transfer the right-of-way to Sarasota County, forming the Legacy

Trail. Id. at 13. Just compensation was paid for the taking of the southern segment in

2014. See, e.g., id. at 14; Rogers v. United States, 90 Fed. Cl. 418 (2009). The cases

currently before this Court concern the middle segment and northern extension of the

Legacy Trail. Id. at 12–14.

In March 2020, a small percentage of the total plaintiffs in 4023 Sawyer Road I

brought Grames, a putative class-action to quiet title in the Middle District of Florida. Id.

at 1–2. Affected landowners brought that suit in response to Sarasota County issuing letters

stating that various improvements to the landowners’ properties, including pools, sewage

infrastructure, and fences encroached on the right-of-way. Id. at 15. The County claimed

to own this property and threatened to demolish the improvements, dump the debris on the

landowners’ property, and bill them for the costs. Id. The class has not yet been certified

and the potential putative class members are narrowly defined as owners who are party to

these rails-to-trails cases and who have also received demands from the County that they

remove existing encroachments. As a result, most of the plaintiffs in these rails-to-trails

cases are ineligible to be party to Grames. Dkt. 97 at 5–6.

The plaintiffs in Grames are seeking an injunction preventing the County from

demolishing the improvements until the Florida court resolves the ownership claims, and

they are seeking to quiet title in their favor. Id. at 1. The issue is whether the County’s use

of the right-of-way is exclusive or non-exclusive. Dkt. 92 at 3. The Government claims

that this determination will impact the property valuations for purposes of compensating

for the taking in Cheshire Hunt and related cases, and therefore, is requesting to stay all

proceedings. Id. at 1. The Government’s motion is fully briefed and ripe for decision.

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Discussion

I. Standard of Review

A. Broad Discretion to Stay Cases

Each trial court has the discretion to determine how to manage the cases before it.

As discussed by the Supreme Court in Landis v. North American Co., “the power to stay

proceedings is incidental to the power inherent in every court to control the disposition of

the cases on its docket.” 299 U.S. 248, 254 (1936). This broad discretion applies to stays

in this Court pending the resolution of various types of proceedings before different courts

and administrative bodies. See, e.g., Martinez v. United States, 333 F.3d 1295, 1309 (Fed.

Cir. 2003) (stay granted pending an administrative proceeding); National Bank of Detroit

v. United States, 1 Cl. Ct. 712, 716 (1983) (stay granted pending state court proceedings);

HighQBPO, LLC v. United States, 84 Fed. Cl. 360, 362 (2008) (stay granted pending

criminal proceedings). In deciding whether to stay a case, the burden is on the proponent

to establish the need for a stay. See Clinton v. Jones, 520 U.S. 681, 708 (1997).

B. Stay Would Be Indefinite

Though this Court has broad discretion to stay cases, when the proposed stay would

be indefinite, the Court must subject it to a higher level of examination and justification.

See Cherokee Nation v. United States, 124 F.3d 1413, 1416 (Fed. Cir. 1997). A stay is

considered indefinite when it is issued pending final resolution of another case. See

Consolidation Coal Co. v. United States, 102 Fed. Cl. 489, 492–93 (2011). However, this

Court has identified some exceptions. A stay pending resolution of another case may not

be considered indefinite when all of the plaintiffs have some control over the timing in the

other case, particularly when the plaintiffs are not innocent in creating the delay. In re

Sacramento Municipal Utility District (“SMUD”), 395 F. App’x 684, 687 (Fed. Cir. 2010)

(stay granted pending resolution of a case brought by all of the same plaintiffs concerning

the same claims for compensation but over a different time period). There is also more

deference given to granting stays pending appellate review rather than trial court review.

Farmer v. United States, 132 Fed. Cl. 343, 344-45 (2017) (stay granted in the Court of

Federal Claims pending review of companion cases by the Federal Circuit). Administrative

proceedings also generally have more definite and expedited timelines than cases

proceeding in trial courts, so the resulting stay may not be considered indefinite. Gould v.

Control Laser Corp., 705 F.2d 1340, 1341 (Fed. Cir. 1983) (stay granted pending a patent

proceeding).

Here, the stay would be indefinite as Grames does not meet the above exceptions.

None of the plaintiffs in Cheshire Hunt are party to Grames and the class in Grames is

narrowly defined such that only a small percentage of the plaintiffs in the related rails-to-

trails cases are implicated. Thus far, only five of the hundreds of plaintiffs in the nine rails-

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to-trails cases before this court have any control over or role to play in Grames.

Additionally, it could take several years for Grames to be resolved since it is pending in a

federal District Court and could also be appealed. Grames is in its early stages, as the class

has not yet been certified and the Government has not yet submitted their response.

Because this motion calls for staying Cheshire Hunt pending resolution of another case,

the Court now turns to the question of whether an indefinite stay is warranted.

C. Cherokee Nation Three-Part Inquiry for Indefinite Stays

There is a three-part inquiry for determining whether a trial court should grant a

motion to stay a case indefinitely pending the resolution of another case. This inquiry was

established by the Federal Circuit in Cherokee Nation and was fleshed out in subsequent

Court of Federal Claims decisions. 124 F.3d 1413. Collectively, these cases establish that

though the trial court has the discretion to stay a case, it should only exercise that discretion

if: (i) there is a pressing need; (ii) in balancing the interests for and against the stay, the

court determines that the interests weigh more heavily in favor of a stay; and (iii) issuing

the stay would be in compliance with the “court’s paramount obligation to exercise

jurisdiction timely in cases properly before it.” Commonwealth Edison Co. v. United

States, 46 Fed. Cl. 29, 34 (2000). The most relevant factors to consider in conducting this

inquiry are the timelines of and the similarities and differences between the two cases.

Here, both of these factors weigh against granting the stay.

II. Factors Weigh Against Granting Stay

A. Inconsistent Timelines

a. This case was filed first and is further along

A significant mismatch between the timelines of the two cases points towards

denying the stay to avoid unnecessary delay. In National Bank of Detroit, the Court denied

a stay pending resolution of the state court case against borrowers because the “federal

litigation [against the Government for failing to pay the guaranty was] nearly ready for trial

while the state court proceedings appear[ed] to be far from it.” 1 Cl. Ct. at 716. There is,

however, some debate among courts over whether the earlier date of filing or the further

advanced proceedings should be given more weight in determining whether to stay a case.

See New York Power Authority v. United States, 42 Fed. Cl. 795, 802 (1999). Here,

Cheshire Hunt was both filed first and is further along in the proceedings. While Grames

is still in the preliminary phase (with the Government’s answer not yet filed), Cheshire

Hunt is in the damages phase, as the Government has already stipulated to liability.

Nevertheless, Cheshire Hunt remains in a standstill due to Grames. The disparity between

the filing dates and the stage in proceedings between Cheshire Hunt and Grames is

significant and points towards denying the stay.

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b. This Court has no control over federal District Court proceedings

Where this Court has the authority to mandate a timeline for resolving the other

dispute, a stay is sometimes justified. For example, in some cases running parallel to

administrative law proceedings, this Court has taken the approach of requiring the other

hearing to be finalized in a set amount of time. See Fadem v. United States, 13 Cl. Ct. 328,

332 (1987) (taking claim in this Court was stayed pending related tort claim before the

Department of Interior since this Court ordered the Secretary of the Interior to decide the

tort claim within six months). Similarly, the Court has found a stay appropriate where both

cases were filed in this Court and involved all of the same plaintiffs because both the Court

and plaintiffs had some control over the timing of the other proceeding. SMUD, 395 F.

App’x at 687-88.

By contrast, in Cherokee Nation, while the Government had some control over

bringing quiet title actions in state court, this Court did not have control over the timeline

and found those actions could take several years because third-party landowners would be

involved in the proceedings. 124 F.3d at 1418. The extended timeline was significant

because it would have kept the plaintiffs “effectively out of court,” so the stay was denied.

Id.

This Court has no control over the timing in Grames. Grames, which involves a

state law claim in the Middle District of Florida, is still in the early stages of briefing, and

the Court cannot mandate a timeline for the judge in that case to follow. Moreover, none

of the plaintiffs in Cheshire Hunt and most of the plaintiffs in these rails-to-trails cases are

not involved in Grames, meaning that they also do not have any say in the timing of

Grames. Sarasota County is also a party in Grames, further complicating and delaying the

timeline in that case. Grames could take several years to resolve while Cheshire Hunt is

already close to resolution and should not be further delayed.

B. Key Differences Between the Cases

a. The cases have different underlying facts and parties

When “material factual differences exist” between the two cases, the pressing need

for a stay is not established. St. Bernard Par. Gov’t v. United States, 99 Fed. Cl. 765, 769

(2011). For example, in St. Bernard, this Court denied staying a claim pertaining to historic

flooding pending resolution of a case in federal District Court about the general risk of

flooding caused by misfeasance, finding that the underlying facts required to prove the

claims were distinct enough. Id. at 769. By contrast, when the same underlying facts have

to be proven, the case should be stayed. See HighQBPO, 84 Fed. Cl. at 362 (staying case

due to “substantial overlap” in witnesses and evidence). The same logic applies to staying

a trial court case pending appellate review of a companion case if the underlying facts of

companion cases are sufficiently similar. Farmer, 132 Fed. Cl. at 344-45.

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Cheshire Hunt and Grames differ in that Cheshire Hunt concerns a specific historic

taking and Grames involves the existing and future use and the nature of the property

interest. While the Government argues that Grames will be persuasive authority for these

nine rails-to-trails cases, it is not worth waiting potentially years for what would only be

persuasive authority on one aspect of the valuation. The cases are different enough to

warrant independent treatment, particularly considering that only five out of the hundreds

of plaintiffs before this Court in the nine Sarasota County rails-to-trails cases are currently

party to Grames, and the plaintiffs in Cheshire Hunt have expressed a desire to not be

involved in Grames.

b. The plaintiffs have requested different forms of relief

Different requests for relief, particularly legal versus equitable relief, point towards

denying a stay because the cases are substantially different. See Haddock v. United States,

135 Fed. Cl. 82, 91 (2017). The plaintiffs in Grames are seeking injunctive relief against

the County to protect their structural enhancements and they are seeking to quiet title in

their favor, whereas in Cheshire Hunt, the plaintiffs are seeking monetary compensation

for a taking. Furthermore, the majority of plaintiffs in these cases are only seeking

monetary relief from this Court as they are not party to Grames. Therefore, this factor too

weighs against granting the stay.

c. The two cases are independent

If one case cannot be resolved without establishing a necessary factor in another

case, then the dependent case should be stayed. In Freeman v. United States, this Court

could not resolve the takings claims regarding mining rights without first determining that

there was a compensable property interest (that the mining rights did in fact exist). 83 Fed.

Cl. 530, 533 (2008). The Court granted a stay pending determination by the Bureau of

Land Management that such an interest existed. Id. However, in Cherokee Nation, the

Court held that damages calculations are not a prerequisite to determining liability. 124

F.3d at 1416. The case was not stayed pending quiet title actions to resolve the precise

bounds of the land the Government was alleged to have mismanaged, because determining

the exact boundaries of the tribes’ lands was not essential for determining that the

Government had breached its duty to manage those lands. Id.

Here, determining just compensation is not dependent on resolution of Grames.

None of the plaintiffs in Cheshire Hunt are party to Grames and the issue and putative class

in Grames is narrow. That case only applies to existing encroachments where demand

letters have been issued by the County. Unlike in Freeman, the dispute here is over the

nature of the property rights, not whether the property rights existed at all. This case looks

more like Cherokee Nation because determining the exact nature of the property rights in

Grames is not essential to determining liability in Cheshire Hunt. Since the Government

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has already stipulated to liability, it is clear that property rights do exist. Though their

nature may impact compensation, concerns about judicial economy are not sufficient to

justify a stay.

C. Judicial Economy Does Not Satisfy Pressing Need Requirement

The Government has raised concerns about the possibility of inconsistent decisions

if this case is not stayed because a determination of the nature of the property interests

implicated affects just compensation determinations. Despite being valid considerations,

concerns about “avoid[ing] duplicative litigation and conserv[ing] judicial resources” do

not satisfy the “pressing need” required to issue an indefinite stay. Cherokee Nation, 124

F.3d at 1416. It is not enough for the Court to grant a stay merely to resolve the disputes

in as few proceedings as possible. Resolving the disputes with an eye towards timeliness

is more important.

The cases in which concerns about comity and judicial economy have factored into

the decision to grant a stay have involved instances where two parallel proceedings had

significant similarities such that both cases progressing at once would be truly duplicative.

See, e.g., Northrop Corp. v. United States, 27 Fed. Cl. 795, 801–02 (1993) (discovery

stayed in case involving allegations of false claims by the Government pending resolution

of federal District Court case involving allegations of false claims by private third parties).

Here, concerns about judicial economy do not outweigh the balance of factors that point to

denying the stay.

Conclusion

Given the inconsistent timelines and lack of significant overlap between plaintiffs

in the two cases, the Government has failed to establish the pressing need for a stay. It is

in the interest of the hundreds of plaintiffs in these rails-to-trails cases and in the interest

of this Court and the judicial system that this case proceed to its resolution without further

delay. For these reasons, the Government’s motion to stay is DENIED. The parties shall

file a joint status report on or before July 23, 2020 indicating how they intend to proceed

through the just compensation phase of this case.

IT IS SO ORDERED.

s/ Thomas C. Wheeler

THOMAS C. WHEELER

Judge

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