Schell & Kampeter, Inc. v. United States

In the United States Court of Federal Claims

No. 21-776 L

Filed: May 9, 2022

________________________________________

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SCHELL & KAMPETER, INC., et al., )

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Plaintiffs, )

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v. )

)

THE UNITED STATES, )

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Defendant. )

________________________________________ )

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

Lewis Rice, LLC, St. Louis, MO, of counsel.

Joseph H. Kim, United States Department of Justice, Environment & Natural Resources

Division, Washington, D.C., with whom was Todd Kim, Assistant Attorney General, United

States Department of Justice, Environment & Natural Resources Division, Washington, D.C., of

counsel.

OPINION AND ORDER

MEYERS, Judge.

Schell & Kampeter, Inc., SNK Real Property Holdings, LLC, and Sugar Creek Pet Foods

own property in Osage and Miller Counties in Missouri, some of which is subject to a railroad

right-of-way. They seek just compensation for the Government’s alleged taking of their property

when it converted the railroad right-of-way into a recreational trail. While SNK identified

certain properties by their tax parcel identification numbers, it inadvertently omitted this

identification for three parcels. Before SNK realized it hadn’t included all the relevant tax parcel

identification numbers, the statute of limitations expired. And the Government refuses to engage

with SNK regarding these three parcels because the statute of limitations has expired. SNK

seeks to amend the Complaint to add these tax parcel identification numbers for the three parcels

it did not include in the Complaint. The Government opposes SNK’s motion, arguing that the

statute of limitations prohibits SNK from adding new parcel identification numbers to its

Complaint because those would be new, time-barred claims. The Government’s argument rests

on its belief that this Court’s Rule 9(i) requires SNK to specifically identify in the Complaint

each parcel of property it alleges to have been taken. Because Rule 9(i) does not impose a

heightened pleading standard and SNK’s allegations easily satisfy the notice pleading

requirements of Rule 8, SNK’s proposed amendment does not implicate the statute of

limitations. It is, in fact, unnecessary. In any event, the amendment would relate back to the

Complaint and thus be timely as well. Therefore, the Court grants SNK’s motion to amend the

Complaint.

I. Background

Each of the plaintiffs alleges that it owns various real property in Miller and Osage

Counties, Missouri. ECF No. 1 ¶¶ 24-26. During the late 19th and early 20th centuries, a

railroad 1 company established a railroad right-of-way between St. Louis and Kansas City. Id. ¶

4. According to Plaintiffs, the right-of-way ran across an exclusive easement for railroad use

that would extinguish if the railroad ceased using it for rail purposes. Id. ¶¶ 6, 19-21, 34, 36.

The railroad stopped using the right-of-way long ago and the Government invoked the Trails Act

to convert the right-of-way into a recreational trail.

Plaintiffs seek just compensation for the Government’s alleged taking of their property

resulting from the conversion of the reversionary interest in the easement. In the Complaint,

each plaintiff identifies the property it alleges the Government has taken. Id. ¶¶ 24-26. Because

only SNK brings this motion, the Court focuses only on its allegations. SNK identifies the

property it claims was taken as follows:

SNK Real Property Holdings, LLC owned land in Miller County

on February 26, 2015. The [Surface Transportation Board

(“STB’s”)] order of February 26, 2015 (Ex. 14) caused a partial

taking of Schell & Kampeter’s 2 land including, but not limited to,

the following tax parcels (identification numbers assigned by the

Miller County, Missouri assessor): 08-1.0-02-000-000-002.001,

08-1.0-02-000-000-005.002, and 08-1.0-02-000-000-001-000.

Id. ¶ 25.

The Parties here have engaged in preliminary discovery regarding title and liability

issues. As part of this process, Plaintiffs provided all of their title information but the

Government refused to discuss any parcel not specifically identified in the Complaint. Plaintiffs

now seek leave to file an amended complaint pursuant to Rule 15(a)(2) of the Rules of the Court

of Federal Claims (“RCFC”). ECF No. 20 at 1. Specifically, Plaintiffs seek leave to add three

additional parcel identification numbers that were “inadvertently omitted from the original

complaint.” Id. The proposed Amended Complaint is otherwise identical to the original

complaint. Id. The Government opposes amendment because it contends that SNK is trying to

bring new claims after the statute of limitations has expired. ECF No. 23.

II. Discussion

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As in many of the rails-to-trails cases, the initial railroad’s interest in the right-of-way passed to

several successors in interest. Because the identity of the railroad company is irrelevant to the

present motion, the Court refers simply to the “railroad.”

2

This appears to be a typographical error. Paragraph 25 addresses SNK’s property, not Schell &

Kampeter’s.

2

Because SNK’s motion comes more than 21 days after service of the Government’s

Answer and the Government opposes amendment, SNK may only amend the Complaint by leave

of Court, which “[t]he court should freely give leave when justice so requires.” RCFC 15(a)(2).

It is well-settled that the granting of leave to amend a pleading under RCFC 15(a) is within the

discretion of the trial court. Kudu Ltd. II, Inc. v. United States, 153 Fed. Cl. 790, 794 (2021)

(citing Meyer Grp., Ltd. v. United States, 115 Fed. Cl. 645, 649 (2014). Absent unusual

circumstances, the Court will normally grant such leave to amend. See Mitsui Foods, Inc. v.

United States, 867 F.2d 1401, 1403-04 (Fed. Cir. 1989) (listing reasons for denying a motion to

amend as undue delay, bad faith, dilatory motive, failure to cure deficiencies, undue prejudice to

nonmoving party, or futility of amendment).

The key issue before the Court is what RCFC 9(i) required SNK to plead in its

Complaint. The core of the Government’s opposition to amendment is its belief that RCFC 9(i)

imposes a heightened pleading standard that required SNK to plead the specific parcels or real

property it claims the Government took in this case. ECF No. 23 at 2. And, according to the

Government, SNK’s failure to do so before the statute of limitations expired renders its new

“claims” as to these three parcels untimely. “Not so.” United Affiliates Corp. v. United States,

143 Fed. Cl. 257, 263 (2019).

As Judge Wheeler explained, RCFC 9(i) does not impose a heightened pleading standard

for takings claims. RCFC 9(i) simply reflects the two-part analysis that this Court will conduct

when we turn to the merits to determine whether a compensable taking has occurred. First, the

Court will look to see if SNK has “‘identified a cognizable Fifth Amendment property interest’”

that SNK claims to have been taken. Id. at 262 (quoting Acceptance Ins. Cos., Inc. v. United

States, 583 F.3d 849, 854 (Fed. Cir. 2009)). Second, if the Court concludes SNK has identified

such an interest, it will decide whether the Government did, in fact, take that property interest.

Id. Thus, RCFC 9(i) provides that: “In pleading a claim for just compensation under the Fifth

Amendment of the United States Constitution, a party must identify the specific property interest

alleged to have been taken by the United States.”

Properly understood, RCFC 9(i) serves “to guide a prospective plaintiff’s pleading.”

United Affiliates, 143 Fed. Cl. at 263. Like other claims, a Fifth Amendment takings claim needs

only to satisfy RCFC 8’s notice pleading standard elucidated in Bell Atl. Corp. v. Twombly, 550

U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009). Therefore, SNK “must only plead

facts that, when accepted as true, show that [it] hold[s] a property interest, and that the

Government took that interest.” United Affiliates, 143 Fed. Cl. at 262. In other words, SNK

needed only to plead “a basic statement of the property interests at issue.” Id. at 263 (citing In re

Upstream Addicks & Barker (Texas) Flood-Control Reservoirs, 138 Fed. Cl. 658, 669 (2018)).

As Judge Lettow explained, “there is no need [in the complaint] for a plaintiff to separately

identify” each piece of property it claims was taken. In re Upstream, 138 Fed. Cl. at 669. That

is what discovery is for.

SNK pleaded that it was the owner of real property in Miller County, Missouri, on the

date the Government authorized the conversion of the railroad right-of-way into a recreational

trail. ECF No. 1 ¶ 25(“SNK Real Property Holdings, LLC owned land in Miller County on

February 26, 2015. The STB’s order of February 26, 2015 . . . caused a partial taking of [SNK’s]

land including, but not limited to . . . .”). According to the Complaint, the right-of-way ran

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across an easement was limited to railroad use would revert to SNK and the other Plaintiffs if the

railroad ceased to use it for rail purposes. Id. ¶ 5. And when the Government authorized the

conversion to trail use, it “invalidated these owners’ Missouri state-law right to unencumbered

title and exclusive possession of their land.” Id. ¶¶ 19, 28. In short, SNK has alleged its specific

property right—the unencumbered title to real property (after four decades of rails-to-trails

litigation, this is unquestionably a “cognizable Fifth Amendment property interest”)—that it

alleged the Government took when it authorized the conversion of the railroad’s right-of-way

into a recreational trail. That is all that was required.

SNK pleaded its specific property interest and how the Government allegedly took it.

SNK was not required to include any further specificity regarding specific parcels it claims the

Government took in its Complaint. See ECF No. 20 at 4 (arguing that amendment is likely

unnecessary). In other words, SNK clearly satisfied RCFC 8’s notice pleading. And, critically,

SNK alleged that the Government’s taking applied to the parcels with tax identification numbers

“including, but not limited to” those listed in paragraph 25 of the complaint. ECF No. 1 ¶ 25

(emphasis added). Therefore, the addition of additional parcels’ tax identification numbers does

not add claims to the Complaint, it merely adds specificity. And RCFC 15’s permissive standard

is easily met here.

Even if RCFC 9(i) imposed a heightened pleading standard, the proposed amendment

relates back to the initial pleading and is, therefore, timely. An amended pleading relates back to

and is considered to have been filed when the original pleading was filed if “the amendment

asserts a claim or defense that arose out of the conduct, transaction, or occurrence set out—or

attempted to be set out—in the original pleading.” RCFC 15(c)(1)(B). Here, the inquiry is

whether “the operative facts in the original complaint . . . put the government on notice.”

Santana on behalf of Santana v. United States, 155 Fed. Cl. 57, 69 (2021); see also Fauvergue v.

United States, 85 Fed. Cl. 50, 54 (2008) (noting the relevant inquiry focuses on the notice given

to the defendant by the factual assertions set forth in the original pleading). This notice-based

understanding of RCFC 15 asks a court to determine “whether the general factual situation or the

aggregate of operative facts underlying the original claim for relief gave notice to [the defendant]

of the nature of the allegations it was being called upon to answer.” Anza Tech., Inc. v. Mushkin,

Inc., 934 F.3d 1359, 1369-70 (Fed. Cir. 2019); see also Snoqualmie Tribe of Indians ex rel.

Skykomish Tribe of Indians v. United States, 372 F.2d 951, 961 (Ct. Cl. 1967) (construing RCFC

15 to “permit an amended pleading to relate back where there is sufficient notice.”).

SNK argues that its proposed Amended Complaint relates back to the Complaint because

it does not add a new claim, the relief sought is identical in the original and amended complaint,

and the facts alleged are identical in both. ECF No. 20 at 3-4. SNK further contends that the

Amended Complaint seeks to “amplify and particularize” the property interest alleged in the

original complaint. Id. at 4. 3 The Government responds that the relation back doctrine does not

apply because Plaintiffs are attempting to “add new claims that are time barred by the applicable

statute of limitations.” ECF No. 23 at 1. The Government’s argument, however, would render

3

SNK also seeks to characterize the Amended Complaint as seeking to correct a “clerical

mistake.” ECF No. 20 at 4-5. Because the Court resolves the motion on other grounds, it does

not opine on whether the omission of tax identification numbers qualifies as a clerical mistake.

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the entire relation back doctrine a nullity because amendments before the expiration of the statute

of limitations expire have no need to relate back to anything. That is not the law. E.g., State of

Alaska v. United States, 32 Fed. Cl. 689, 698 (1995) (“If an amended complaint states a claim

which arises from the same conduct, transaction, or occurrence (and especially if it states the

same claim arising from the same events) as set forth in the original complaint, then it must be

considered timely if the original complaint was filed within six years from the date upon which

that claim accrued.”) (emphasis in original).

And the court’s opinion in State of Alaska is instructive here. There, the court permitted

the plaintiff to file an amended complaint under the relation back doctrine for several reasons.

Id. at 698. First, the amended complaint and original complaint both arose out of the same

conduct, transaction, or occurrence. Id. That is true here as well. Second, the amended and

original complaints both sought just compensation for taking of property, and both complaints

also sought identical relief and damages. Id. That, too, is true here as well. Finally, the

amended complaint frequently quoted the original complaint verbatim. Id. Considering these

factors, the court concluded that the amended complaint was simply recharacterizing the

property interest that was allegedly taken. Id. The court therefore held that the amended

complaint related back to the date of the original complaint under RCFC 15(c). Id.

Here, Plaintiffs’ amended complaint arises out of the same conduct, transaction, and

occurrence as the original complaint. Both allege a Fifth Amendment takings claim that

occurred on February 26, 2015, when the STB issued the NITU. The amended complaint seeks

the same relief as the original complaint—just compensation for the property that was allegedly

taken when the Government authorized the conversion of the right-of-way into a recreational

trail. In fact, the only difference between the amended complaint and the original complaint is

the addition of the three parcel identification numbers. Accordingly, the Court can readily

conclude that Plaintiffs’ amended complaint simply adds specificity the claim in the original

complaint.

And given the Court’s resolution of the RCFC 9(i) issue, this case also fits within the

holding of Fadem v. United States, 13 Cl. Ct. 328 (1987), which held that an amended complaint

satisfies the relation back doctrine when it expands or amplifies what was alleged in the original

complaint. ECF No. 20 at 3. In Fadem, the plaintiffs’ original complaint alleged “that their

entire property has been taken by the United States Government for public use.” Fadem, 13 Cl.

Ct. at 335 (emphasis in original). Then the plaintiffs amended their complaint to specify that, if a

government resurvey of the property was valid, the Government took 43 acres of their land. Id.

The amendment “‘merely expanded or amplified what was alleged in support of the cause of

action already asserted.’” Id. (quoting Seaboard Air Line Ry. v. Renn, 241 U.S. 290, 293

(1916)). The court in Fadem concluded that the capacious language used in the original

complaint, e.g., “entire property,” put the Government on notice of the allegations against it

because “entire property” included the 43 acres omitted from the original complaint. Id. Here,

Plaintiffs alleged that the STB’s February 26, 2015, order “caused a partial taking of [SNK’s]

land including, but not limited to” the specified parcels. ECF No. 1 ¶ 25 (emphasis added). Like

in Fadem, the language “including, but not limited to” in the original complaint put the

Government on sufficient notice of the allegations against it. The inclusion of the tax parcel

identification numbers “merely expanded or amplified what was alleged in support of the cause

of action already asserted.” Fadem, 13 Cl. Ct. at 335 (citations omitted).

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The Court holds that although the amended complaint is unnecessary, it relates back to

the original complaint because the amended complaint merely adds specificity the original claim,

and because the Amended Complaint amplifies and particularizes the original pleading. Thus,

the Court grants Plaintiffs leave to file an amended complaint insofar as it seeks to add the three

tax parcel identification numbers.

III. Conclusion

Plaintiffs’ motion to amend, ECF No. 23, is GRANTED and the Court orders Plaintiffs

to file their amended complaint on the docket. The Parties shall file a joint status report on or

before May 16, 2022, regarding the scheduling of further proceedings in in this matter.

IT IS SO ORDERED.

s/ Edward H. Meyers

Edward H. Meyers,

Judge

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