Petition for Writ of Certiorari — Caldwell v. United States

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from the abandonment proceedings,“ either of which

trigger the Trails Act procedure. A party interested in

taking over as “interim trail manager” may then request

that the STB issue either a Certificate of Interim Trail Use

or Abandonment (“CITU”) (in the case of application for

abandonment) or, as is applicable here, a Notice of Interim

Trail Use or Abandonment (“NITU”) (in the case of a

request for exemption). The prospective trail manager

must certify that it is willing to assume financial, legal

and management responsibility for the trail and to ac-

knowledge that the rail easement’s use as a trail is subject

to “possible future reconstruction and reactivation of the

right-of-way for rail service.” 49 C.F.R. § 1152.29(a)(3)

(Pet. App. 67). The railroad must notify the STB that it is

willing to negotiate with the prospective trail manager for

trail use. 49 C.F.R. § 1152.29(d) (Pet. App. 68).

If these conditions are fulfilled, the STB then issues

the CITU/NITU, which authorizes a 180-day period for

negotiation between the railroad and the prospective trail

manager, and temporarily stays the railroad’s authoriza-

tion to consummate abandonment of the rail line. 49

C.F.R. § 1152.29(d) (Pet. App. 68). The CITU/NITU is self-

executing, in that it prospectively authorizes, but does not

cause, either abandonment or trail use. Specifically, the

CITU/NITU authorizes conversion to trail use if the

parties’ negotiations are successful and an “agreement for

interim trail use/rail banking is reached” that requires

“the trail user to assume for the right-of-way during the

term of the agreement, full responsibility for its manage-

ment, for any liability arising out of its transfer or use...

and for payment of any taxes.” See, e.g., Pet. App. 73-74. If

negotiations are unsuccessful, the CITU/NITU authorizes

the railroad to proceed with consummating its abandon-

ment. See, e.g., Pet. App. 74.

* See 49 U.S.C. § 10903 (Pet. App. 63) (abandonment); 49 U.S.C.

§ 10502 (Pet. App. 61) (exemption). The distinction between these two

avenues of abandonment is not material to the issues raised here.

B. Factual Background

1. Notice of Exemption and Initiation of Nego-

tiations Under NITU

The Warm Springs line is a 10.6 mile right-of-way

made up of two segments of a rail line owned by Norfolk

Southern Railway Corporation. In May 1994, Norfolk

Southern published its intent to file'a notice of exemption,

which requested permission from the STB to abandon a

7.4 mile segment of the line. The STB allowed the exemp-

tion, effective August 25, 1994, pending any offers for

financial assistance to continue rail service or to take over

the line as a trail. A389."

The City was interested in obtaining the Warm

Springs line to create public walkways and bikeways.

A373. It had already contacted Norfolk Southern about

acquiring the 7.4 mile segment, see, e.g., id., noting that

the city was working with Trust for Public Land (“TPL”), a

nonprofit corporation that acquires land on behalf of

public bodies while those parties pursue public funding for

the land. Jd.; A375, A495. Thus, Norfolk Southern notified

the STB of its willingness to negotiate a trail use agree-

ment and its consent to the issuance of an NITU, and the

City notified the STB that it was willing to assume finan-

cial and legal responsibility for the segment if the City

were to take over as a trail manager, and requested that

an NITU issue. A393. The STB issued the NITU on August

31, 1994, which started a 180-day negotiating period,

running through February 27, 1995. (Pet. App. 72-74).

On February 23, 1995, the City and Norfolk Southern

jointly requested to add another 3.2 mile segment to the 7.4

mile segment already covered by the NITU. A399; see Pet.

App. 75-76. The STB had previously approved the line for

abandonment, but Norfolk Southern had not yet removed

* References to “A__” are to the joint appendix in the Court of

Appeals.

tracks or otherwise consummated abandonment; thus,

effective June 2, 1995, the STB reopened the proceedings as

to the 3.2 mile segment, consolidated them with the pro-

ceedings on the 7.4 mile segment, and extended the NITU

negotiating period to August 26, 1995. (Pet. App. 76-77).

2. Purchase and Sale Agreement

Norfolk Southern and TPL entered into a purchase

and sale agreement (“Purchase Agreement”) for the full

10.6 mile segment on August 17, 1995, with the agreed

purchase price of $1 million. A407-09. TPL paid $500 in

earnest money, only $100 of which would be retained by

Norfolk Southern in the event TPL decided not to close.

A409-10. In the event that testing revealed environmental

hazards or the title examination revealed defects, and

Norfolk Southern failed to remedy those defects, TPL had

the option of terminating the agreement and Norfolk

Southern would be obligated to refund the entire $500 in

earnest money. A413-14.

Under the terms of the Purchase Agreement, Norfolk

Southern agreed to transfer title within one year of the

execution of the contract, and to “deliver possession of the

Property” to the buyer on the closing date, along with a

quitclaim deed and an assignment of leases and other

agreements. A415-16. In the meantime, Norfolk Southern

bore responsibility to “maintain the Property in its present

condition” and to pay taxes prorated through the date of

the closing. A410-11. Norfolk Southern also retained the

right. to receive income, rents and payments, prorated

_ through the date of closing. A416. The Purchase Agree-

ment granted TPL the right to enter upon the land “for the

purpose of inspecting, examining, surveying, [and] making

... necessary tests,” but TPL agreed to indemnify and hold

Norfolk Southern harmless for damages or injury incurred

in connection with such testing. A412-13.

An April 18, 1996 amendment to the contract more

specifically recited that the parties had entered into the

agreement with the intent that “said agreement and the

conveyance pursuant thereto” be governed by the Trails

Act. This first amendment provided that “at closing

Buyer, its successor or assignee, shall assume full

responsibility for the management of the right of way, for

any legal liability arising out of its transfer or use, and for

any payment of taxes in accordance with the requirements

of Section 8(d) fof the Trails Act].” A425.

The parties again amended the contract on July 1,

1996, to reflect Norfolk Southern’s approval of TPL’s

anticipated assignment of the Purchase Agreement to the

City.” A428. In this second amendment, the parties also

added an agreement to jointly move for an extension of the

NITU, and to extend the closing date to the earlier of 75

days after the STB’s grant of the joint motion for extension

or December 20, 1996. A429. TPL assigned the Purchase

Agreement to the City on July 2, 1996. A404-06.

3. Completion of Negotiations and Closing

On July 5, 1996, and pursuant to the terms of the

second amendment to the Purchase Agreement, the City

and Norfolk Southern jointly moved the STB to “extend the

time period for negotiation of a mutually acceptable interim

trail use/railbanking agreement” through November 1,

1996. A440; see Pet. App. 79. The motion represented that _

“[a] railbanking agreement has been reached by the par-

ties” but requested an extension of the NITU “in order to

ensure that the railbanking period extends through the

time of the actual transfer of the corridor to the interim

trail manager ... and to cover any gaps that may have

inadvertently occurred in the railbanking negotiating

period.” A440-41; see Ret. App. 79. In particular, the parties

had never requested an extension of the NITU negotiating

* Ata regular meeting on October 24, 1995, Columbus City Council

authorized title examination and environmental testing on the prop-

erty. A431. The Council later met in an executive session on April 30,

1996, and approved proceeding with the purchase of the property. A434.

—

period past August 26, 1995. A442-43. The parties re-

quested an extension to November 1, 1996, “the anticipated

date for closing on the transaction.” Jd. In an order served

August 6, 1996, the STB acknowledged that the extension

was requested “to ensure that the NITU remains in effect

until actual transfer of the corridor to the interim trail

manager.” Pet. App. 79. It found that it retained jurisdic-

tion, and granted the extension. Pet. App. 79-80.

The parties consummated the transaction in October of

1996. On October 9, 1996, Norfolk Southern executed a

quitclaim deed in favor of Columbus. A448. This deed was

recorded on October 11, 1996, id., and “[a]cquisition of the

land and payment of related expenses was completed

October 11, 1996,” A434-35. On October 15, 1996, the City

retroactively authorized its mayor to “execute and negotiate

an agreement” with Norfolk Southern to pay the $1 million

purchase price and to reimburse TPL’s expenses in connec-

tion with the acquisition process. Jd. On November 2, 1996,

the City notified the STB that, as of October 13, 1996, the

rail lines “have been transferred to the City of Columbus, as

interim trail manager, pursuant to an interim trail use/

railbanking agreement and the ... NITU.” A454. The STB

entered the notice into the public record on November 5,

1996. Id. Conversion of the rail line to a trail pursuant to

the Trails Act was now, finally, consummated.

4. Dismissal by the Court of Federal Claims

Because it is a claim arising under the Constitution,

landowners may bring suit for just compensation for a

federal taking under either the Tucker Act, 28 U.S.C.

§ 1491 (Pet. App. 58), or the Little Tucker Act, 28 U.S.C.

§ 1346 (Pet. App. 57). See Preseault I, 494 U.S. at 14

(payments for Trails Act takings claims arise under the

Fifth Amendment, not under the Trails Act). The Tucker

Act provides jurisdiction in the Court of Federal Claims for

all such claims, and the Little Tucker Act provides concur-

rent jurisdiction in district courts for claims not exceeding

$10,000. (Pet. App. 58).

On October 7, 2002, less than six years after the

Railroad executed the quitclaim deed, the Petitioners filed

a Tucker Act suit in the Court of Federal Claims alleging

that the conversion of the Warm Springs Line to trail use

worked a taking of their reversion interest. The Govern-

ment filed a motion to dismiss on the ground that the

Petitioners had not filed within the six-year statute of

limitations in 28 U.S.C. § 2501 (Pet. App. 59). Because the

manner in which both courts below resolved the argu-

ments raised demonstrates the need for this Court to

decide the Questions Presented, both opinions bear de-

scribing in detail. :

The Government argued in the Court of Federal

Claims that the Petitioners’ claims had accrued on one of

two alternative dates: the dates the first NITUs for each

segment issued (August 31, 1994 and June 2, 1995); or the

date on which the Railroad and the City informed the STB

they had “reached their interim trail use and railbanking

agreement” (July 5, 1996). Caldwell v. United States

[Caldwell I], 57 Fed. Cl. 193, 197 (2003) (Pet. App. 72-79).

The Government pointed out that the Federal Circuit, in

Preseault v. United States [Preseault II], 100 F.3d 1525

(Fed. Cir. 1996), stated that a taking claim would not be

ripe “[u)ntil the [STB] makes the administrative decision

to convert an unused right-of-way to a trail, rather than

simply permit abandonment, and finds an appropriate

public agency to operate the trail.” Jd. at 1538; see Cald-

well I, 57 Fed. Cl. at 200 (Pet. App. 41). Thus, the Gov-

ernment relied most heavily on the date the NITU first

issued as the date of accrual because it was the only

“administrative decision” of the STB, and (because the

NITU is self-executing) no further government action was

required in order for the Petitioners’ claims to accrue. Id.

However, two unpublished Court of Federal Claims opin-

ions had fixed the accrual date to be when the “railbank-

ing/interim trail use agreement” was executed. Id. at 202

(Pet. App. 45-46); A327. Nevertheless, even under that

view, the Petitioners’ claims were not timely because the

Government contended the agreement was reached no

later than July 5, 1996. Caldwell I, 57 Fed. Cl. at 196, 197.

The Petitioners contended that the earliest date their

claims could have accrued was when the Railroad executed

a quitclaim deed in favor of the City. Before that time, it

was not known whether the rail line would become a trail,

or would instead be abandoned by the Railroad. See id. at

197-98 (Pet. App. 35). The NITU was a necessary but not

sufficient condition for trail use, and Preseault IJ did not

fully answer the question of what was sufficient because,

in that case, the rail line had been abandoned for ten years

before any regulatory action on the line.’ Further, the

Purchase Agreement did not transfer any property inter-

est, legal responsibility, or financial responsibility, and in

fact expressly conditioned the transfer on closing. See

Caldwell I, 57 Fed. Cl. at 197-98 (Pet. App. 35). Interim

trail use was not consummated until possession of the rail

easement had been transferred to the City for use as a

trail. See id. Thus, any claim for the taking Petitioners

alleged could not be ripe before the transaction was closed

and the deed was executed and delivered.

The Court of Federal Claims noted that “the Gov-

ernment’s liability is set when plaintiffs’ property had

been definitely converted to public use and the plaintiffs

were able to bring a claim under the Tucker Act.” Id. at

197 (Pet. App. 34). But the court identified the “Trail

Use Agreement” — which it defined as the “railbanking

agreement” to which the parties referred in the July 5,

1996 request for extension — as the precise point of

claims accrual. Jd. at 198-99 (Pet. App. 35, 40). The

court stated that the plaintiffs were wrong to focus on

the inchoate nature of the Purchase Agreement rather

than discussing the “Trail Use Agreement” that ended

” The Preseault litigation predated the regulations now in effect.

Preseault I, 494 U.S. at 7 n.5. Preseault I] is discussed in more detail

infra, at pp. 20-21.

the NITU negotiating period — but the court never ex-

plained the distinction it saw between the Purchase

Agreement and the “Trail Use Agreement.” Id. at 198

(Pet. App. 35).

The Court of Federal Claims next rejected both the

Petitioners’ position that the conversion to trail use could

not have occurred until after title passed to the City, and

the Government’s argument that the NITU triggered the

Petitioners’ claims. The Petitioners had relied on United

States v. Dow, 357 U.S. 17 (1958), and Kirby Forest Indus.,

Inc. v. United States, 467 U.S. 1 (1984), for the proposition

that, in formal condemnation cases, a taking does not

occur until the earlier of when the Government takes

possession of the land ox legal title passes to the Govern-

‘ment, and not when the condemnation proceeding is

announced. 57 Fed. Cl. at 198 (Pet. App. 36-37). However,

the court appeared to apply a regulatory taking analysis

rather than a physical or per se taking analysis, as demon-

strated by its discussion of Dow and Kirby:

Even in the context of a condemnation proceeding, . . .

the Supreme Court scrutinized first the severity of

interference with plaintiff’s property rights. Only

then did the Court hold that the level of severity was

met with the transfer of the deed.... The Court’s

holding in Kirby focuses ... more on the Govern-

ment’s interference with plaintiff’s rights, and to

that extent, the case is instructive.

Id. (emphasis added). In further support of its view that

the title transfer was not the date the taking claim ac-

crued, the court observed that interim trail use may occur

by “donation, transfer, lease, sale, or otherwise,” so it

* Petitioners filed a motion for reconsideration asking the court to

clarify the “Trail Use Agreement” to which it referred in its opinion, as

well as to consider a tolling argument based on a nationwide class action

of which the Petitioners learned only after the court’s opinion issued. The

court did not address the request for clarification, and rejected the

Petitioners’ tolling argument. (Pet. App. 51-53).

“would not make sense” for the claim accrual to be trig-

gered by a deed when the Trails Act did not require a deed.

Id. at 198-99 (Pet. App. 38).

On the other hand, the Court of Federal Claims noted,

the Government’s argument that the NITU was the date

that Petitioners’ taking claims accrued ignored a second

requirement in Preseault IJ: that the STB “select an

appropriate public agency to operate the trail,” a require-

ment that “is met only after the parties successfully

negotiate a Trail Use Agreement.” Jd. at 200 (Pet. App.41).

The court acknowledged the Government’s contention that

the NITU triggered the statute of limitations because “the

NITU is effective when issued to delay the vesting of any

reversionary interests,” id. at 202 (Pet. App. 46), so al-

though “[t]he fate of their land rights was unknown” at

that point, “at least temporarily, [Petitioners’] rights were

suspended,” id. at 201 (Pet. App. 43). Again resorting to a

regulatory taking analysis, however, the court rejected the

Government’s argument: “The Federal Circuit in Preseault

[II] did not look at the last government action, as defen-

dant urges, but, rather, focused on the end of the adminis-

trative process, which the Government set into action with

the NITU issuance, but which concluded with the execu-

tion of the Trail Use Agreement.” Jd. at 201 (Pet. App. 43-

44). In further support of its view that an NITU did not

work a taking, the Court of Federal Claims relied on

Creppel v. United States, 41 F.3d 627 (Fed. Cir. 1994), a per

se regulatory taking case, which held that a claim for a

taking of all economically viable use of property did not

accrue until the EPA issued a final order blocking the

project, and not when the regulatory process began. See

Caldwell I, 57 Fed. Cl. at 203 (Pet. App. 48-49). The Court

of Federal Claims thus concluded that “issuance of the

NITU does not determine the results of the Government’s

action in the case at bar. The taking becomes fixed only

after the parties reach a Trail Use Agreement. Before that

date the outcome of the Government action is not certain,

so the taking has not been effected.” Jd.

The Petitioners timely appealed to the Federal Cir-

cuit.

5. Federal Circuit Affirmance

On appeal, the Government abandoned its argument

that the NITU triggered the statute of limitations, settling

instead on the date the parties had announced a “railbank-

ing agreement has been reached.” Appellee’s Br. at 16-17.

The Federal Circuit opinion correctly described the parties’

arguments and positions on appeal. Caldwell v. United

States [Caldwell II], 391 F.3d 1226, 1228-33 (Fed. Cir.

2004) (Pet. App. 2-12). Nevertheless, the Federal Circuit

rejected both parties’ arguments and selected the NITU —

for which neither party argued on appeal — as the date of

accrual. Id. at 1233 (Pet. App. 12).

As they did in the Court of Federal Claims, Petition-

ers contended on appeal that “a taking under the Trails

Act did not occur until the railroad line right-of-way was

actually converted into a trail for interim trail use.”

Caldwell II, 391 F.3 at 1233 (Pet. App. 12); Appellants’

Opening Br. at 34-36. At oral argument, a member of the

panel stated that the taking did not actually occur when

the rail line became a trail, but (as it was described by the

same panel member in the opinion) “when state law

reversionary property interests that would otherwise vest

in the adjacent landowners are blocked from so vesting.”

Caldwell II, 391 F.3d at 1233 (Pet. App. 12). Counsel for

Petitioners agreed with the court that the taking occurred

when the state-law property interests were blocked, but

stated that Petitioners’ position was that this only oc-

curred when the property was converted to trail use. Cf. 16

U.S.C. § 1247(d) (Pet. App. 60). (“[S]uch interim [trail] use

shall not be treated, for purposes of any law or rule of law,

as an abandonment of the use of such rights-of-way for

railroad purposes.”)

In its written opinion, a majority of the panel dis-

agreed with Petitioners’ position. Following its observation

noted above, the majority added that

the question, then, is . . . when are state law reversion

interests forestalled by operation of section 8(d) of the

Trails Act? We conclude that this occurs when the

railroad and trail operator communicate to the STB

their intention to negotiaté a trail use agreement and

the agency issues an NITU that operates to preclude

abandonment under section 8(d).

391 F.3d at 1233 (Pet. App. 12).

Over the Petitioners’ protestations, Appellants’ Reply

at 8-11, the Federal Circuit agreed with the Government's

emphasis on the last “government action” as the only

possible trigger. The Petitioners had contended that, in a

case such as this where the federal government has

authorized a third party to occupy land, it is the third

party's occupation of the lard, and not merely the govern-

ment act authorizing it, that creates a taking. Jd. at 9-10;

see, e.g., Loretto v. Teleprompter Manhattan CATV Corp.,

458 U.S. 419 (1982), Nollan v. California Coastal Comm'n,

483 U.S. 825 (1987). Without addressing this argument,

the Federal Circuit stated that not only was the “issuance

of the NITU ... the only government action in the rail-

banking process that operates to prevent abandonment”

but that “[tjJhe task of finalizing the trail use agreement

under the Trails Act falls entirely on the railroad and trail

operator.” Caldwell IT, 391 F.3d at 1233-34 (Pet. App. 13-

14) (emphasis in original). Such private action, in the

Federal Circuit’s view, could not work a taking.

Additionally, the Federal Circuit majority rejected the

Petitioners’ argument that accrual could not be triggered

by the NITU because an NITU could lead to either aban-

donment or trail use, depending on the outcome of negotia-

tions. In fact, the court acknowledged that

the NITU operates as a single trigger to several pos-

sible outcomes. It may, as in this case, trigger a proc-

ess that results in a permanent taking in the event

that a trail use agreement is reached and abandon-

ment of the right-of-way is effectively blocked. Alter-

natively, negotiations may fail, and the NITU would

then convert into a notice of abandonment. In these

circumstances, a temporary taking may have oc-

curred. It is not unusual that the precise nature of the

takings claim, whether permanent or temporary, will

not be clear at the time it accrues.

Id. at 1234 (Pet. App. 14-15) (citations omitted). The

Federal Circuit pointed to United States v. Dow, 357 U.S.

17 (1958) as support for the fact that a takings claim

might first accrue — “there by physical possession, here by

blocking the easement reversion” — and then be cut off,

rendering it merely a temporary taking.” Caldwell II, 391

F.3d at 1235 (Pet. App. 16).

Given the Court of Federal Claims’ application of

regulatory takings principles, the Petitioners had made a

point of arguing in their appellate briefs that a Trails Act

taking was a physical, per se taking, and that it was

important, under Tahoe-Sierra Preservation Council, Inc.

v. Tahoe Regional Planning Agency, 535 U.S. 302 (2002) to

apply only physical taking precedents and accrual con-

cepts to the case. Appellants’ Opening Br. at 26-30; Reply

at 2-5. Nowhere in the opinion did the majority state what

kind of taking analysis it was applying. However, in

support of its statement that it was not unusual for the

temporary nature of a taking not to be apparent when it

accrues, the Federal Circuit relied solely on three regula-

tory taking cases involving the denial of a permit. Caid-

well IT, 391 F.3d at 1234 n.8 (Pet. App. 15).

Judge Newman dissented, agreeing with the Petition-

ers’ view of the taking as a physical taking triggered by

the City’s occupation and possession of the easement.

Until the easement was transferred to the City of Co-

lumbus, Norfolk Southern Railroad not only contin-

ued as owner of the right-of-way, but retained all of

* The Federal Circuit disclaimed any attempt to determine

whether a compensable temporary taking would have occurred because

this case involved a permanent taking. Jd. at 1234 n.7 (Pet. App. 15).

the benefits and obligations of ownership.... Until

the right of trail use was vested in the City the cause

of action had not ripened, and the liability of the gov-

ernment for compensation was not fixed.

Caldwell II, 391 F.3d at 1236 (Pet. App. 20). This was so

because none of the conditions for trail use (the trail

operator’s assumption of legal and financial responsibility

for the trail) could occur until the City took possession of

the trail. Jd. The NITU represented only a “hope and a

plan” that the easement would be converted to a trail, and

the Purchase Agreement made the assumption of the

required responsibilities contingent on closing. Jd. at 1237

(Pet. App. 21). Further, that agreement “documented its

own negotiating status” when the provision was added

July 1, 1996 providing that the parties would jointly

request an extension of the negotiating period. Jd. (Pet.

App. 22). Only when, as in Nollan, “persons are given a

permanent and continuous right to pass to and fro,” had a

taking claim accrued. Jd. at 1238 (Pet. App. 22).

Judge Newman also pointed out that, far from sup-

porting the majority's position, Dow supported the Peti-

tioners. Id. (Pet. App. 23). Dow was not a statute of

limitations case, but was about whether the plaintiff

landowner had standing to obtain just compensation for

property interests the Government acquired by eminent

domain. Id.; see Dow, 357 U.S. at 23. The Government had

already entered into possession, but had not yet deposited

the compensation with the court, when the landowner

purchased the property. Caldwell IT, 391 F.3d at 1238 (Pet.

App. 23); Dow, 357 U.S. at 19. The question was whether

he was entitled to receive the purportedly assigned claim

to compensation. Caldwell II, 391 F.3d at 1238 (Pet. App.

23). In fact, Judge Newman pointed out, “[t]he Court

stressed that the determinative event of the taking was

whether ‘the Government has already entered into posses-

sion.’” Id. Thus, the majority's analogy to Dow was not

apt, because in Petitioners’ case, the NITU “did not change

the possession and occupancy of the easement.” Jd. (Pet.

App. 24). Rather, “Dow strongly reinforces the position

that the Norfolk Southern right-of-way was not taken and

compensable until there was a transfer of possession and

occupancy, an event that did not occur until the date of

Closing and the transfer of the deed.” Jd. at 1239 (Pet.

App. 24).

In light of Judge Newman’s dissent and the impor-

tance of this issue, the Petitioners moved for rehearing en

banc (Pet. App. 54). The court requested a response from

the Government, but ultimately denied rehearing. (Pet.

App. 54).

Notably, under 28 U.S.C. § 1295(a)(2) (Pet. App. 57),

the Federal Circuit has exclusive jurisdiction over

appeals in cases arising under the Constitution and

brought under either the Tucker Act or the Little Tucker

Act. Further, the respective statutes of limitations (28

U.S.C. § 2501 and 28 U.S.C. § 2401) use nearly identical

language. (Pet. App. 59). Thus, the issues decided by the

Federal Circuit in this case are binding on every court

deciding a Trails Act taking case (and, indeed, on every

takings case against the United States) in the country.

REASONS FOR GRANTING THE WRIT

The Federal Circuit has decided an important ques-

tion of federal law that has not been, but should be, settled

by this Court, and moreover, it has decided an important

federal question in a way that conflicts with decisions of

this Court.

Specifically, the Federal Circuit determined that a

taking by operation of the Trails Act accrues when the

STB merely issues the NITU that begins the negotiating

period that might result in trail use, even though it is

also possible that the negotiations will fail and the rail

line will be abandoned, leaving the property interest to

revert to the Petitioners. The Federal Circuit’s holding

applies not only to the 400 landowners in the class

proposed by Petitioners, but to every Trails Act claim now

pending or brought in the future, across the United States.

The holding infects every aspect of the litigation of Trails

Act claims, and it threatens to wreak havoc on notions of

ripeness and accrual in many other areas involving state

or federal regulation. The Federal Circuit came to this

erroneous conclusion by ignoring several fundamental

principles that have been established in this Court’s

takings jurisprudence, and its decision should be corrected

by this Court.

I. The Federal Circuit Has Decided an Important

Question of Federal Law.

The rule announced ‘n the Federal Circuit’s opinion is

an important question of federal law. There is no circuit

split in this case because, as noted above, the Federal

Circuit’s decision governs every Trails Act takings case.

But, for that same reason it is important that this Court

grant certiorari to correct the Federal Circuit’s erroneous

decision.

This Court previously addressed the potential for a

taking that could be worked by the Trails Act in Preseault

I, but declined to decide whether a taking had occurred in

that case. The Court quoted the House Report for the Act,

which recognized the need to state that “interim [trail]

use shall not be treated .. . as an abandonment of the use

of such rights-of-way for railroad purposes” because

“there may be nothing left for trail use” after abandon-

ment has been consummated. Preseault I, 494 U.S. at 8

(quoting H.R. Rep. No. 98-28, at 8-9, reprinted in 1983

U.S.C.C.A.N. 112, 119-20). The Court noted that “by

deeming interim trail use to be like discontinuance rather

than abandonment, Congress prevented property interests

from reverting under state law.” Jd. Thus, the unanimous

Court acknowledged that, in some cases, the Trails Act

may work a taking. Jd. at 16. However, because the Pre-

seaults had brought a facial challenge to the Trails Act

rather than bringing suit for just compensation under the

- 20

Tucker Act, the Court declined to reach the question of

whether a taking had occurred in that case. Id. at 17.

Justice O’Connor’s concurring opinion (for herself and

Justices Scalia and Kennedy) wrote to express the view

“that state law determines what property interest peti-

tioners possess, and that traditional takings doctrine will

determine whether the Government must compensate

petitioners for the burden imposed on any property

interest they possess.” Id. at 20. The Second Circuit’s

decision in the case had determined that no taking could

occur as a matter of law because the petitioners’ interests

could not vest until the ICC determined abandonment

was appropriate — which would never occur if the rail line

were converted to a trail. See id. at 23. Justice O’Connor

noted that the Court’s opinion was “inconsistent with the

Second Circuit’s view,” and was correct because the ICC’s

jurisdiction to regulate did not preempt the state prop-

erty law principles with which the ICC’s actions may

interfere. Id. at 24. Rather, if ICC action interferes with

state property law interests, just compensation is re-

quired. Jd. As to the question of whether a taking had

occurred, Justice O’Connor noted that “well-established

. principles will govern the analysis of whether the burden

the ICC’s actions impose upon state-defined property

interests amounts to a compensable taking.” Jd. In par-

ticular, Justice O’Connor pointed to Nollan, where “the

Government appropriated a public easement,” as a likely

basis for such a determination.

Following Preseault I, the Preseaults brought suit in

the Court of Federal Claims, lost on the issue of whether

there had been a taking, and appealed to the Federal

Circuit. Preseault II, 100 F.3d at 1530. Reversing a panel

decision, a majority” of the en banc Federal Circuit in

’° Although the Government has persisted in referring to the

decision as a plurality, the Federal Circuit has held that the holding of

Preseault II “reflects the considered view of a substantial majority of

(Continued on following page)

Preseault II, guided by language in this Court’s Preseault I

opinion, including Justice O’Connor’s concurrence, deter-

mined that, under Vermont law, a taking had occurred in

that case. Because the railroad had, as a matter of fact,

abandoned the rail line and leased it to the local govern-

ment without seeking ICC approval, that case did not

arise under the procedure at issue here, but rather as a

result of the landowners filing a request with the ICC to

certify abandonment. Jd. at 1549. Thus, the majority found

a taking occurred under either of two alternative theories:

(1) if the rail easement still existed when the ICC Order

issued, “[t]he taking of possession of the lands owned by

the Preseaults for use as a public trail was in effect a

taking of a new easement for that new use” because the

change in use effected an abandonment under state law; or

(2) “as an alternative basis,” when the ICC issued its

Order, “there was as a matter of state law no railroad

easement in existence on those parcels” due to the prior

abandonment, “and the properties were held by the

Preseaults in fee simple” when they were taken for trail

use. 100 F.3d at 1550. Either way, the majority viewed the

taking as a

' physical entry upon the private lands of the Pre-

seaults, ... under the Federal Government’s author-

ity pursuant to the ICC’s order. That it was for a

valued public use was not the issue. We have here a

straightforward taking of private property for a public

use for which just compensation must be paid.

Id. at 1551.

The overarching question that was not directly an-

swered by either Preseault I or Preseault II is the one

“presented squarely by this case and incorrectly decided by

the Federal Circuit: Where a regulatory body authorizes a

physical appropriation of a public easement upon the

the court.” Toews v. United States, 376 F.3d 1371, 1380 n.6 (Fed. Cir.

2004).

fulfillment of certain conditions, is it a regulatory taking

that accrues upon the issuance of the regulatory action, or

is it the same per se physical taking that the Federal

Circuit found in Preseault IT, and that this Court found in

Nollan? This question does not merely affect the determi-

nation of when these petitioners’ claims accrued, but

determines important questions throughout the Trails Act

taking litigation, and it implicates takings under similar

regulatory schemes.

Most immediately, the- Federal Circuit’s decision

determines whether these 400 landowners, and others

similarly situated, see Barclay v. United States, 351

F. Supp. 2d 1169 (D. Kan. 2004), will even have access to a

determination of the just compensation to which they are

entitled under the Constitution. As of June 15, 2005, 155

NITUs had been issued in the previous six years. Fifteen

of those were issued in the previous 180 days, and an

additional thirty-five were issued earlier but have been

extended for additional time, for a total of fifty cases in

which the trail use negotiating period is still open. Each

case on the STB docket can affect hundreds of landowners

who own property burdened by the rail line. Those land-

owners who, like the Petitioners, relied on the date the

trail operator took possession as the final accrual date for

their claims may now find that their claims are barred

because they accrued at the much earlier (and more

obscure) time — the date an NITU issued.

Even as to those landowners whose claims are not

already prematurely barred under the Federal Circuit’s

decision, other important questions that arise in Trails Act

cases are also determined by the Federal Circuit’s opinion.

This decision determines who has standing to assert

takings claims (and in particular, the definition of classes

of landowners). Dow, 357 U.S. 20 (noting that one may

only sue for a taking if the owner at the time of the tak-

ing). It also affects the determination of the landowners’

compensation. Kirby, 467 U.S. 10 (holding that compensa-

tion is determined as of the time of taking). If, as the

Federal Circuit held, the taking occurred when the NITU

issued, and not when the rail line was actually converted

to trail use (which is often years later, due to extensions),

classes of landowners are likely to be improperly defined,

and the value of the land may have changed significantly

between the date when the railroad first decided to aban-

don the land and when the trail operator took over posses-

sion — particularly if the public becomes aware of the

change in use of the easement during that time.

The Federal Circuit’s ruling that the statute of limita-

tions accrued when the NITU issued necessarily means

that Trails Act taking claims are also ripe as soon as the

NITU issues. According to the Federal Circuit’s decision, all

fifty NITU negotiating periods that were still open on June

15, 2005 — i.e. that had not yet resulted in trail use —

nonetheless presented ripe taking claims as of that date.

This result should trouble the Government, and also

presents a dilemma for the courts, who are left to deal with

evaluating claims for takings when it is not yet known

whether they are permanent, and whether they are com-

pensable at all under a Penn Central analysis. See Penn

Central Transp. Co. v. New York City, 438 U.S. 104 (1978).

Finally, to the extent that the Federal Circuit’s hold-

ing can be analogized to takings occurring as a result of

_other regulatory actions outside the Trails Act taking

context, it threatens to wreak havoc with notions of

ripeness and accrual in this broader arena.

II. The Federal Circuit Has Decided This Question

in a Way That Directly Conflicts With Prior De-

cisions of This Court.

It is even more important for this Court to grant

certiorari and decide this question of federal law because

the Federal Circuit’s decision conflicts with this Court’s

takings precedents. Specifically, it fails to recognize that

the taking of an easement in land for the use of the public

is a per se, physical taking as in Nollan, see 483 U.S. at

831-32, 841, regardless of whether that taking is preceded

by some regulatory action. In United States v. Clarke, 445

U.S. 253 (1980), and Dow v. United States, this Court

stated that a claim for compensation for a physical inva-

sion of land accrues when the land is actually invaded.

Here, under the reasoning in Preseault I and the language

of the Trails Act, no such invasion could have occurred

until the City took possession.

Further, the Federal Circuit misinterpreted Dow to

say that it did not make a difference whether a taking

would be permanent or temporary in determining the time

of accrual of a Trails Act taking. In fact, if the NITU works

a temporary taking, this Court’s recent Tahoe decision, 535

U.S. 302 (2002), requires that it be subject to a Penn

Central ad-hoc analysis, and that is dependent, in large

part, on whether the taking is permanent or temporary.

Thus, based on basic and longstanding accrual principles,

it cannot be the rule that a taking claim for a physical

taking accrues at the time of an earlier (and conditional)

regulatory authorization for that taking.

A. The Federal Circuit Erred in Failing to Analyze

This Taking As a Permanent Physical Occupa-

tion.

The Federal Circuit erroneously determined that a

taking claim founded upon an appropriation of an ease-

ment in land is ripe when the NITU issues because it is

the last “government action” preceding the appropriation.

In doing so, it improperly applied concepts and precedents

relevant to regulatory takings to this per se physical

taking of an easement in land.”

"In Lingle v. Chevron, __ U.S. __, 125 S.Ct. 2074 (2005), this

Court revisited the types of takings that may occur under the Constitu-

tion, presenting a more nuanced view of the distinctions between them

than seen in previous cases. Rather than draw the line between

“physical” or “per se” and “regulatory” takings, the Court distinguished

between direct appropriation by the government, “regulatory action”

(Continued on following page)

In Nollan v. California Coastal Commission, 483 U.S.

825 (1987), this Court held that requiring a beachfront

landowner to allow a public easement for passage to a

nearby beach as a condition for obtaining a building

permit, when the need for such an easement was not

caused by the building, worked a compensable taking.

Had California simply required the Nollans to make an

easement across their beachfront available to the public

on a permanent basis in order to increase public access

to the beach, rather than conditioning their permit to

rebuild their house on their agreeing to do so, we have

no doubt there would have been a taking....

that was tantamount to direct appropriation, and all other kinds of

regulation. Jd. at 2081. The Court identified both the Loretto/Nollan

paradigm (government-authorized appropriation by a third party) and

the Lucas paradigm (taking of all economically viable use; see Lucas v.

South Carolina Coastal Council, 505 U.S. 1003 (1992)) as being in the

second category of “regulatory action,” while the third category of

takings included those to which the Penn Central balancing test

applied. Id.; cf. Tahoe, 535 U.S. at 323 (drawing the primary distinction

between “acquisitions of property for public use,” including Loretto, and

“regulations prohibiting private uses,” referring to Lucas as a “regula-

tory taking” that was an exception to the application of the Penn

Central test). The Petitioners read Lingle and Tahoe together to

describe a group of “categorical” or “per se” takings, which may either

be a “positive taking,” in the sense of a physical acquisition (or imposi-

tion of a burden) for public use, or a “negative taking” in the sense of

being regulation prohibiting a private use. Thus, to be precise, this case

presents a categorical, physical (or “positive”) taking. This Court may

find occasion to further describe these categories of takings if it grants

certiorari in this case.

Regardless of the labels applied, the underlying legal principles are

the same — the Penn Central-related questions of finality of administra-

tive action, reasonable investment-backed expectations of the landown-

ers, and the importance of the public benefit — are not relevant when

the taking in question results in the appropriation of land for public

use. Lingle, 125 U.S. at 2081-82. It is in this sense that Petitioners use

the term “physical taking,” even though the physical occupation may

have come about as a result of regulatory action rather than a direct

government appropriation. See Tahoe, 535 U.S. at 322 (referring to the

Loretto case as a physical appropriation for a public purpose).

In Loretto, we observed that where governmental ac-

tion results in “[a] permanent physical occupation” of

the property, by the government itself or by others,

“our cases uniformly have found a taking to_the ex-

tent of the occupation, without regard to whether the

action achieves an important public benefit or has

only minimal economic impact on the owner.” We

think a “permanent physical occupation” has

occurred, for purposes of that rule, where indi-

viduals are given a permanent and continuous

right to pass to and fro, so that the real property

may continuously be traversed .. ..

Id. at 831-32 (emphasis added) (citations omitted).

The nature of the property interest taken in this case,

and the manner in which it is taken for public use, is no

different from the property interest that this Court had

“no doubt” was a taking in Nollan. Regardless of the

nature of the regulatory proceedings that bring it about, in

the end, an easement in land is taken for public use when

someone other than the owner of the underlying fee takes

possession of or occupies it for public purposes. This is

simply a physical, per se taking authorized by the Gov-

ernment, regardless of what regulatory action may have

preceded it.”

“ Whether a taking in fact has occurred will depend on an analysis

of state property law, but that analysis is only necessary to determine

“the nature of the state-created property interest that petitioners would

have enjoyed absent the federal action and ... the extent that the

federal action burdened that interest.” Preseault I, at 24 (O’Connor, J.,

concurring). That is, reference to state property law is necessary to

determine the nature of the property interest held by the railroad and

the extent to which the shift in use from railroad to recreational trail

would normally result in the easement being extinguished for misuse —

questions which will be addressed in determining liability. However,

because a physical taking is alleged, the point at which such a taking

would occur, if at all, is no earlier than when someone other than either

the railroad or the landowner was in possession. Because the Petition-

ers’ claims would be timely if they accrued at any point after the

(Continued on following page)

Liability for a physical taking accrues when physical

occupation occurs. In United States v. Clarke, 445 U.S. 223

(1980), this Court evaluated whether Indian lands could

be taken by inverse condemnation as opposed to formal

condemnation proceedings. This Court quoted Dow on the

issue of when claims accrue in cases involving physical

occupation:

In a [formal] condemnation proceeding, the taking

generally occurs sometime during the course of the

proceeding. ... When a taking occurs by physical in-

vasion, on the other hand, the usual rule is that the

time of the invasion constitutes the act of taking,

and “[iJt is that event which gives rise to the claim for

compensation and fixes the date as of which the land

is to be valued.”

Id. at 258 (emphasis added).

Specifically in the Trails Act case, the physical occupa-

tion occurs upon conversion to trail use. The reasoning of

Preseault I suggests that a taking, if any, accrues when the

Trails Act prevents property interests from reverting

under state law. Jd. at 8-9. The statute states, “in the case

of interim use of ... railroad rights-of-way pursuant to

donation, transfer, lease, sale, or otherwise in a manner

consistent with this chapter, ... such interim use shall

not be treated ... as an abandonment of the use of such

rights-of-way for railroad purposes.” 16 U.S.C. § 1247(d)

(Pet. App. 60). Thus, in this case, and consistent with the

basic analysis of accrual of physical takings set out in

Clarke, the taking accrued when, pursuant to a sale of the

easement to the City as trail operator consistent with the

Trails Act, the City took possession of the land.

Because this is a physical taking, and liability accrues

when the third party occupies or enters into possession

of the land, the timing of the last “government action”

transfer to the City, determining the precise point of accrual in this case

does not require reference to state abandonment law.

preceding the physical appropriation is irrelevant. In fact,

in this case, the NITU did not even authorize the City (or

the public) to enter the land until certain conditions

regarding the City’s responsibility for the easement were

fulfilled. Those conditions were not fulfilled until closing,

and the Federal Circuit was wrong to find otherwise.

B. The Federal Circuit Erred in Finding Petition-

ers’ Claims Accrued as the Result of “Delay” in

the Abandonment Process.

The Federal Circuit also erroneously determined that

liability for a taking pursuant to the Trails Act was “fixed”

when the STB imposed the NITU negotiation period prior

to allowing the railroad to abandon its easement, because

this mere delay in the abandonment process, the court

held, “blocked” the reversion of the property interest to

Petitioners.

The Federal Circuit, having decided that the NITU

worked a taking, defended this position against Petition-

ers’ (and the dissent’s) argument that the NITU did not

necessarily result in trail use by relying on an incorrect

view of this Court’s decision in Dow. Caldwell II, 391 F.3d

at 1234-35 (Pet. App. 15-16). The Federal Circuit errone-

ously interpreted Dow to mean that it did not make a

difference to the question of the Government’s liability for

a taking whether the taking was temporary or permanent

— and thus it was irrelevant to the question of liability for

a taking whether the conversion to trail use might be

unsuccessful. Id.

But in Dow, liability for a physical taking had already

been established because the Government had already

entered into possession, 357 U.S. at 22; thus, as noted by

Judge Newman, Dow was not a ripeness or accrual case.

Caldwell II, 391 F.3d at 1238 (Pet. App. 23). The Court

first reiterated the longstanding rule that “fixes the

‘taking’ at the time of the entry into physical posses-

sion.” Dow, 357 U.S. at 25. Then, in defending this rule

against the petitioner’s claim that such a rule would preju-

dice the landowner in the event the Government abandoned

the condemnation proceeding, the Court observed that, in

that case, the physical taking would merely be a com-

pensable temporary taking rather than a permanent one; it

would not completely eliminate the landowner’s ability to

seek compensation. Jd. at 26. This is a far cry from saying

that a prior regulatory authorization can trigger the

accrual for a subsequent physical taking.

And yet, the only plausible way in which a taking

could be worked by the NITU, as the Federal Circuit

erroneously concluded, is if it works a regulatory taking,

by “delaying” the potential abandonment and requiring

the railroad first to negotiate. Thhoe teaches that there is

no such thing as a categorical (or per se) temporary regula-

tory taking; all temporary regulatory takings are subject

to the Penn Central ad-hoc inquiry, as well as the finality

rule for ripeness. 535 U.S. at 331, 339. “Logically, a fee

simple estate cannot be rendered valueless by a temporary

prohibition on economic use, because the property will

recover value as soon as the prohibition is lifted.” Tahoe,

id. at 332. Rather, analysis of liability for such a taking

requires “a more fact-specific inquiry,” including evalua-

tion of the extent of interference with (including delay of)

the landowner’s investment-backed expectations, and

ripeness is subject to a strict administrative finality rule.

Id. at 332, 336, 340-41. Thus, if the NITU is the accrual

trigger, liability questions are highly dependent on

whether the NITU has permanent or temporary effect.

Moreover, to hold that a “delay” in a regulatory process

can cause a takings claim to accrue runs afoul of this

Court’s oft-repeated concern that “normal delays in

obtaining building permits, changes in zoning, variances,

and the like” should not give rise to a taking. Jd. at 335;

First English Evangelical Lutheran Church v. County of

Los Angeles, 482 U.S. 304, 321 (1987).

Accrual (and ripeness) depend on the extent to which

the elements of liability for an injury are fixed, enabling

the plaintiff to file suit. Dunlap v. United States, 173 U.S.

65, 70 (1899). A claim cannot accrue before it has become

ripe. See id. In Dow, there had already been a physical

appropriation of land, so the elements of liability were

fixed for the taking alleged; the question of whether the

taking was temporary or permanent only implicated

compensation, and not when the claim for compensation

was ripe or had accrued. Here, the taking alleged is that,

like in Nollan, upon the transfer of the deed from the

railroad to the City, “individuals [were] given a permanent

and continuous right to pass to and fro.” Nollan, 483 U.S.

at 832. The elements of liability for that taking were only

fixed when the public had the right to invade the Petition-

ers’ land. Whether the NITU might also work some kind

of taking is questionable, but in any event is irrelevant to

determining when Petitioners’ claims had accrued. Even

assuming the NITU works a taking, such a taking would

necessarily be subject to the Penn Central analysis, so the

fixing of the Government’s liability is necessarily depend-

ent on whether the taking will be temporary or permanent

— and this can only be known when (and if) the NITU

expires and the railroad abandons the rail line.

CONCLUSION

For the foregoing reasons, this Court should grant

certiorari in this case to resolve this important issue of federal

law, and decide that Petitioners’ taking claims are timely.

Respectfully submitted,

JEFFREY O. BRAMLETT* JAMES P. KELLY

SARAH M. SHALF KELLY Law Fir, PC.

BONDURANT, MIXSON & 200 Galleria Parkway

ELMORE, LLP Suite 1510

3900 One Atlantic Center Atlanta, GA 30339

1201 West Peachtree Street, NW (770) 955-2770

Atlanta, GA 30309

(404) 881-4100

*Counsel of Record

App. i

INDEX TO APPENDIX MATERIAL

Opinions and Orders:

Opinion of the U.S. Court of Appeals for the Fed-

eral Circuit Affirming Dismissal of Petitioners’

Claims (December 14, 2004)..................cccsesseeseeeesees App. 1

Opinion of the U.S. Court of Federal Claims Dis-

missing Petitioners’ Claims (June 30, 2003)......... App.

Order of the U.S. Court of Federal Claims Denying

Motion for Reconsideration (August 11, 2003)......App.

Order of the U.S. Court of Appeals for the Federal

Circuit Denying Rehearing En Banc (March 23,

STE \ishciahcehnseusiidoininculadasuinteclicipabinksusciipanteplatiauiin App.

Constitutional Provisions:

Baek GOs MII isis ic sectehinnnstcsannssnctnsbabhoceneiniiias App.

Statutes and Regulatory Provisions:

Jurisdictional Provisions and Statutes of Limitations

28 U.S.C. § 1295(a) (Exclusive Jurisdiction of Federal

RNa PR OE EMOTO TIDY Os SPREE TEEPE POST App.

28 U.S.C. § 1346(a)(1) (Little Tucker Act)................. App.

28 U.S.C. § 1491(a)(1) (Tucker Act)..............ceseeeeeeeee App.

28 U.S.C. § 2401 (Statute of Limitations — All Claims

MINIS i caccinccc canna ceaciscee Sedica a App.

28 U.S.C. § 2501 (Statute of Limitations — Court of

I SIND scrsssnckddnthctoasandiettnanstibiteninasinonaramade App.

App. ii

INDEX TO APPENDIX MATERIAL - Continued

Trails Act-Related Statutes and Regulations

16 U.S.C. § 1247 (Trails Act)

49 U.S.C. § 10502 (Exemption Proceedings)

49 U.S.C. § 10903 (Abandonment Proceedings)

49 C.ER. § 1152.29 (Interim Trail Use Regulations).... App. 66

Other Relevant Material:

ICC Decision and Notice of Interim Trail Use or

Abandonment (served Aug. 31, 1994)

ICC Decision and Notice of Interim Trail Use or

Abandonment (served June 2, 1995)

STB Decision Extending NITU (served Aug. 6,

App. 1

United States Court of Appeals for the Federal Circuit

03-5152

WILLIAM B. CALDWELL, I and

BEN FRANK BILLINGS, IT

(for themselves and as representative of

a class of similarly situated persons),

Plaintiffs-Appellants,

UNITED STATES,

Defendant-Appellee.

(Filed December 14, 2004)

Jeffrey O. Bramlett, Bondurant, Mixson & Elmore,

LLP, of Atlanta, Georgia, argued for plaintiffs-appellants.

With him on the brief were Benjamin E. Fox and Sarah

Shalf. Of counsel on the brief was James P. Kelly, Kelly

Law Firm, P.C., of Atlanta, Georgia.

Kathryn E. Kovacs, Attorney, Appellate Section,

Environment and Natural Resources Division, United

States Department of Justice, of Washington, DC, argued

defendant-appellee. With her on the brief were Thomas L.

Sansonetti, Assistant Attorney General; John Smeltzer,

Attorney, of Washington, DC; and Kristine S. Tardiff, Trial

Attorney, General Litigation Section, of Concord, New

Hampshire. Of counsel on brief was Evelyn Kitay, Office of

the General Counsel, Surface Transportation Board, of

Washington, DC.

Appealed from: United States Court of Federal Claims

Judge Christine O.C. Miller

Before NEWMAN, DYK, and PROST, Circuit Judges.

App. 2

DYK, Circuit Judge.

Appellants William B. Caldwell, III and Ben Frank

Billings, ITI (collectively “Caldwell”) brought a class action

lawsuit seeking compensation for an alleged taking pursu-

ant to the National Trail Systems Act (the “Trails Act”), 16

U.S.C. § 1247(d). The Court of Federal Claims held that

the appellants’ claim was barred under the applicable

statute of limitations, 28 U.S.C. § 2501, because it accrued

more than six years before the lawsuit was filed. Caldwell

v. United States, 57 Fed. Cl. 193 (2003). Because the

appellants’ claim accrued when the exemption proceedings

were halted by the issuance of a Notice of Interim Trail

Use or Abandonment (“NITU”), we affirm.

BACKGROUND

We have previously held that a Fifth Amendment

taking occurs when, pursuant to the Trails Act, state law

reversionary interests are effectively eliminated in connec-

tion with a conversion of a railroad right-of-way to trail

use. Preseault v. United States, 100 F.3d 1525, 1543

(Fed.Cir.1996) (en banc) (“Preseault IT”); see also Toews v.

United States, 376 F.3d 1371, 1376 (Fed.Cir.2004). This

case requires us, for the first time, to determine when the

Fifth Amendment takings claim accrues for purposes of

the six-year statute of limitations under the Tucker Act. 28

U.S.C. § 2501 (2000). The following is a brief summary of

the Trails Act, which is described in some detail in Pre-

seault v. Interstate Commerce Commission, 494 U.S. 1, 7-8,

110 S.Ct. 914, 108 L.Ed.2d 1 (1989) (“Preseault I’), the

case in which the Supreme Court upheld the constitution-

ality of the Act under the Commerce Clause.

App. 3

The Surface Transportation Board (the “STB” or

“Board”)' has authority to regulate the construction,

operation, and abandonment of most railroad lines in the

United States. A railroad seeking to abandon a railroad

right-of-way within the jurisdiction of the STB must

either: (1) file a standard abandonment application that

meets the requirements of 49 U.S.C. § 10903; or (2) seek

an exemption, under 49 U.S.C. § 10502.’ If the STB ap-

proves a standard abandonment application or grants an

exemption and the railroad ceases operation, the STB

relinquishes jurisdiction over the abandoned railroad

right-of-way and state law reversionary property interests,

if any, take effect. See Preseault I, 494 U.S. at 6-8, 110

S.Ct. 914.

The Trails Act, through a process known as “railbank-

ing,” provides an alternative to abandoning a railroad

right-of-way under sections 10903 and 10502. Section 8(d)

of the Trails Act allows a railroad to negotiate with a state,

' The Surface Transportation Board is the successor agency to the

Interstate Commerce Commission and assumed control on January 1,

1996. 49 U.S.C. § 702 (2000). We use “STB” to refer to both agencies.

* Authorization of abandonment pursuant to the exemption

procedures of section 10502 is less involved than the standard aban-

donment proceedings detailed in section 10903 and can be invoked

under the statute when it:

(1) is not necessary to carry out the transportation policy of sec-

tion 10101 of [Title 49]; and

(2) either (A) the transaction or service is of limited scope; or (B) .

the [full abandonment proceedings are] not needed to protect

shippers from the abuse of market power.

49 U.S.C. § 10502(a) (2000). In practice, exemption proceedings are

appropriate if no local traffic has run on the line in at least two years.

See Nat'l Ass’n of Reversionary Prop. Owners (“NARPO”) v. STB, 158

F.3d 135, 138 n. 4 (D.C.Cir.1998).

App. 4

municipality, or private group (the “trail operator”) to

assume financial and manageriai responsibility for operat-

ing the railroad right-of-way as a recreational trail.’ Id. at

6-7, 110 S.Ct. 914. If the railroad and the trail operator

indicate willingness to negotiate a trail use agreement, the

STB stays the abandonment process and issues a notice

allowing the railroad right-of-way to be “railbanked.” 49

C.F.R. § 1121.4. The effect of the notice, if the railroad and

prospective trail operator reach an agreement, is that the

STB retains jurisdiction for possible future railroad use

and the abandonment of the corridor is blocked “even

* Section 8(d), codified at 16 U.S.C. § 1247(d), provides:

(d) Interim use of railroad rights-of-way

The Secretary of Transportation, the Chairman of the Surface

Transportation Board, and the Secretary of the Interior, in admin-

istering the Railroad Revitalization and Regulatory Reform Act of

1976 {45 U.S.C. § 801 et seq.], shall encourage State and local

agencies and private interests to establish appropriate trails us-

ing the provisions of such programs. Consistent with the purposes

of that Act, and in furtherance of the national policy to preserve

established railroad rights-of-way for future reactivation of rail

service, to protect rail transportation corridors, and to encourage

energy efficient transportation use, in the case of interim use of

any established railroad rights-of-way pursuant to donation,

transfer, lease, sale, or otherwise in a manner consistent with this

chapter, if such interim use is subject to restoration or reconstruc-

tion for railroad purposes, such interim use shall not be treated,

for purposes of any law or rule of law, as an abandonment of the

use of such rights-of-way for railroad purposes. If a State, political

subdivision, or qualified private organization is prepared to as-

sume full responsibility for management of such rights-of-way

and for any legal liability arising out of such transfer or use, and

for the payment of any and ali taxes that may be levied or as-

sessed against such rights-of-way, then the Board shall impose

such terms and conditions as a requirement of any transfer or

conveyance for interim use in a manner consistent with this chap-

ter, and shall not permit abandonment or discontinuance incon-

sistent or disruptive of such use.

App. 5

though the conditions for abandonment are otherwise

met.” NARPO, 158 F.3d at 139; see also Preseault I, 494

U.S. at 8, 110 S.Ct. 914. Specifically, section 8(d) provides

that “such interim use [for trails] shall not be treated, for

purposes of any law or rule of law, as an abandonment of

the use of such rights-of-way for railroad purposes.” 16

U.S.C. § 1247(d). Thus, section 8(d) of the Trails Act

prevents the operation of state laws that would otherwise

come into effect upon abandonment — property laws that

would “result in extinguishment of easements for railroad

purposes and reversion of rights of way to abutting land-

owners.” Rail Abandonments -— Use of Rights-of-Way as

Trails, Ex Parte No. 274 (Sub-No. 13), 2 I.C.C.2d 591, 1986

WL 68617 (1986). A Fifth Amendment taking occurs if the

original easement granted to the railroad under state

property law is not broad enough to encompass a recrea-

tional trail. See Preseault II, 100 F.3d at 1552; see also

Toews, 376 F.3d at 1376.

The statute does not specify in detail what procedures

are to be followed under the Act. Pursuant to implement-

ing regulations promulgated by the STB (and developed

pursuant to notice and comment rulemaking), the typical

railbanking process begins when a rail carrier files an

abandonment application or, as in this case, a request for

an exemption. 49 U.S.C. §§ 10903, 10502; see also NARPO,

158 F.3d at 138.

If the STB approves the request for an exemption, it

will publish a notice of exemption in the Federal Register.

49 C.F.R. § 1121.4(b) (2004). A potential trail operator may

then file a railbanking petition pursuant to 49 C.F.R.

§ 1152.29%(a). Under section 1152.2%a) the petition must

include: (1) a map of the right-of-way, (2) a statement

indicating that the trail operator will assume financial and

App. 6

legal liability for the right-of-way, and (3) an acknowl-

edgement that the right-of-way may be reactivated for

railroad use in the future.‘ If the railbanking petition

meets these criteria, and the railroad agrees to negotiate

with the petitioner and so communicates to the STB

within ten days of the filing of the trail use petition, the

STB will issue a Notice of Interim Trail Use or Abandon-

ment (“NITU”). 49 C.F.R. §§ 1152.29(bX2) and (d). This

NITU permits the railroad to discontinue service, cancel

tariffs, and salvage track and other equipment, “consistent

with interim trail use and rail banking” without consum-

mating an abandonment and the NITU extends indefi-

nitely to permit interim trail use once an “agreement” is

reached between the railroad and the trail operator. 49

C.F.R. § 1152.29%d)(1).

In some cases, such as that of the recreational trail at

issue in Preseault IJ, an.interim trail use agreement may

in fact be reached prior to the issuance of the NITU. 100

F.3d at 1549-50. In other cases, however, such as the

present case, the NITU is issued after the trail operator

* Specifically the regulation states that:

The . .. petition must include:

(1) A map depicting, and an accurate description of, the right-of-

way ... proposed to be acquired or used;

(2). A statement indicating the user’s willingness to assume full

responsibility: for managing the right-of-way; for any legal liabil-

ity arising out of the use of the right-of-way ... and for the pay-

ment of all taxes assessed against the right-of-way; and

(3) An acknowledgement that interim trail use is subject to the

user’s continuing to meet its responsibilities ... , and subject to

possible future reconstruction and reactivation of the right-of-way

for rail service.

49 C.F.R. § 1152.2%a) (2004).

App. 7

and the railroad indicate their intention to negotiate an

agreement but prior to the finalization of an agreement.

Only one NITU is issued once the parties indicate

their intent to negotiate for conversion of the corridor to

trail use. If negotiatio:s: go as planned and an agreement

is reached, the NITU extends indefinitely for the duration

of recreational trail use subject to the trail operator’s

fulfillment of its agreed-upon obligations. The STB retains

jurisdiction for possible future railroad use, and state law

reversionary interests that would normally vest upon

abandonment are blocked. Preseault I, 494 U.S. at 8, 110

S.Ct. 914. An “escape-clause” is also provided by the NITU

such that if no agreement is reached within 180 days, the

NITU “automatically converts into an effective ... notice

of abandunment,” id. at 7 n. 5, 110 S.Ct. 914, which per-

mits the rail carrier to “abandon the line entirely and

liquidate its interest.” Jd. at 7, 110 S.Ct. 914; see also 49

C.F.R. § 1152.29(d)(1). The regulations also allow the

parties to request an extension of the negotiating period if

more time is necessary to reach a trail use agreement. 49

C.F.R. § 1152.29(e)(1).*

On July 5, 1994, the railroad in this case, Norfolk

Southern Railway Company (“Norfolk”), filed a request for

an exemption under 49 U.S.C. § 10505 (now § 10502) to

abandon 7.4 miles of its railroad line located in Columbus,

Georgia. Norfolk did not own this right-of-way in fee

* ‘The NITU ... also provide({s] that, if the user [later) intends to

terminate trail use, it must send the Board a copy of the NITU and

request that it be vacated on a specific date.” 49 C.F_R. § 1152.29(dX2).

App. 8

simple. Rather, Norfolk owned a railroad right-of-way

easement that burdened larger parcels over which the line

ran. On July 26, 1994, the STB published a notice of

abandonment stating that — absent the filing of a petition

to stay, e.g., a railbanking petition — the exemption would

become effective August 25, 1994. The city of Columbus,

Georgia (“the City”) filed a railbanking petition and

requested issuance of an NITU on August 15, 1994. After

receiving notice from Norfolk indicating the rail carrier’s

willingness to negotiate a trail use agreement with the

City, the STB issued an NITU on August 31, 1994. Before

the expiration of the 180-day negotiating period, the City

and Norfolk filed a “Joint Motion for an extension of the

negotiation period provided in the {[NITU]” by an addi-

tional 180 days. (J.A. at 399.) The City and Norfolk also

requested that the NITU be extended to cover an addi-

tional 3.2 miles of railroad line adjacent to the 7.4 miles

covered by the original NITU.° On June 2, 1995, the STB

granted both requests. As a result, the proceedings involv-

ing the 3.2-mile segment were consolidated with those

involving the original 7.4-mile segment, and the NITU

negotiating period was extended to August 26, 1995.

On August 17, 1995, Norfolk entered into a purchase

and sale agreement (“the purchase agreement”) with the

* Norfolk had already obtained permission in a separate proceeding

to abandon the 3.2 mile segment, but had “not removed the tracks or

taken any other action to consummate the abandonment.” (J.A. at 402.)

The decision in this prior proceeding was vacated and the abandonment

application for the 3.2 mile segment reopened pursuant to 49 C.F.R.

§ 1162.2%eX1), which provides: “{I]f abandonment has not been

consummated and the railroad is willing to negotiate, the abandonment

proceeding will be reopened, the abandonment decision granting an

application, petition for exemption or notice of exemption will be

vacated, and an appropriate .. . NITU will be issued.”

App. 9

Trust for Public Land (“the TPL”), the entity chosen by the

City to negotiate the railbanking arrangement. Under the

purchase agreement, Norfolk agreed to sell its railroad

line right-of-way easement to the TPL for $1,000,000.

Payment of the $1,000,000 (less $500 in earnest money)

was to occur at a later date along with transfer of title to

the right-of-way. The purchase agreement did not set a

closing date, but provided that closing would “occur at a

mutually agreeable time and location within three hun-

dred sixty five (365) days.” (J.A. at 415.) However, the

purchase agreement also gave the TPL the right to termi-

nate the purchase agreement “without liability for dam-

ages or for an action for Specific Performance, at any time

prior to the Closing Date upon five (5) days’ written notice

to [Norfolk].” (J.A. at 420.)

The purchase agreement was amended on April 18,

1996, te make clear that the conveyance was governed by

section 8(d) of the Trails Act. On July 1, 1996, a second

amendment was made to indicate the TPL’s intent to

assign its rights under the purchase agreement to the City.

The second amendment also required the TPL and Norfolk

to cooperate with the City to file a joint motion to further

extend the NITU deadline. The following day the TPL

assigned its rights under the purchase agreement to the

City.

On July 5, 1996, the City informed the STB that a

“railbanking agreement” had been reached, but requested

that the NITU deadline be further extended “through the

time of the actual transfer of the corridor to the interim

trail manager, which [was] anticipated to occur on or

before November 1, 1996, and to cover any gaps that may

have inadvertently occurred in the railbanking negotiation

period.” (J.A. at 441-42.) On August 6, 1996, the STB

App. 10

granted the City’s motion for an extension “to ensure that

the NITU remains in effect until actual transfer of the

corridor to the interim trail manager,” finding the “exten-

sion of the NITU negotiating period [to be] warranted” and

that “[aJs long as an abandonment has not been consum-

mated and the railroad agrees to negotiate, the Board’s

jurisdiction is not terminated.” (J.A. at 446.) Norfolk

transferred its easement for the 10.6 mile railroad line

right-of-way by quitclaim deed on October 9, 1996. The

deed was recorded on October 11, 1996.

On November 2, 1996, the City filed a “Notification of

Railbanking/Interim Trail Use Agreement” to “formally

notify the [STB] that, on October 13, 1996, the railroad

lines [were] transferred to the City of Columbus as interim

trail manager pursuant to an interim trail use/railbanking

agreement.” (J.A. at 454.) The notification further stated

that “[als a result of the successful completion of this

railbanking/interim trail use transaction, the NITU should

now extend indefinitely.” Id. This notice was entered into

the STB record on November 5, 1996.

Ill

The appellants, Caldwell, own land that was burdened

by the easement Norfolk owned for the 10.6 mile railroad

line right-of-way that was the subject of NITU and the

railbanking agreement. On October 7, 2002, Caldwell filed

a complaint in the Court of Federal Claims pursuant to

the Tucker Act, 28 U.S.C. § 1491, on behalf of themselves

and the class of people who also owned land burdened by

the railbanked easement. Caldwell alleged that the gov-

ernment’s conversion of the 10.6 mile railroad right-of-way

to trail use constituted a compensable taking because the

App. 11

conversion extinguished state law reversionary property

interests that would otherwise take effect following the

cessation of railroad activities and subsequent abandon-

ment of the easement for railroad use of the right-of-way.

On June 30, 2003, the Court of Federal Claims

granted the government’s motion to dismiss the complaint

because the six-year statute of limitations under 28 U.S.C.

§ 2501 had run. Caldwell, 57 Fed.Cl. at 204. The court

rejected Caldwell’s argument that its takings claim ac-

crued within the limitations period, when the right-of-way

deed was transferred from Norfolk to the City on October

9, 1996. Id. at 197-99. The Court of Federal Claims also

rejected the government’s position that the statute began

to run upon issuance of the NITU, concluding that the

filing of a claim after the issuance of the NITU but before

the identification of “an appropriate public agency to

operate the trail” would be premature, relying on language

in our Preseault II opinion. Id. at 200 (citing Preseault II,

100 F.3d at 1538). Instead, the Court of Federal Claims

held that “the Government taking is fixed upon the sign-

ing of the Trail Use Agreement. At that time the provisions

of the NITU become permanent, depriving plaintiffs of

their rights in the land in question.” Jd. at 203. Thus, the

court held that Caldwell’s takings claim had to have

accrued prior to July 5, 1996, the date the STB was in-

formed that the purchase agreement had been reached. /d.

at 203-04. Because Caldwell’s claim was not filed until

October 7, 2002, more than six years after July 5, 1996,

the claim was barred by the statute of limitations. Jd.

Caldwell filed a motion for reconsideration on July 15,

2003, arguing for the first time that a parallel class action,

filed in a Kansas district court under the Little Tucker Act,

28 U.S.C. § 1346(a)(2), tolled the statute of limitations on

App. 12

Caldwell’s claim. The Court of Federal Claims denied the

motion for reconsideration on August 11, 2003. Caldwell

timely appealed. We have jurisdiction pursuant to 28

U.S.C. § 1295(a)(3).

DISCUSSION

We review the legal aspects of the determination by

the Court of Federal Claims that the appellants’ claim was

barred by the statute of limitations without deference.

Applegate v. United States, 25 F3d 1579, 1581

(Fed.Cir. 1994).

The appellants argue that the Court of Federal Claims

erred by holding that their claim was barred by the stat-

ute of limitations. Specifically, Caldwell urges that a

taking under the Trails Act did not occur until the railroad

line right-of-way was actually converted into a trail for

interim trail use on October 11, 1996. We disagree.

The taking, if any, when a railroad right-of-way is

converted to interim trail use under the Trails Act occurs

when state law reversionary property interests that would

otherwise vest in the adjacent landowners are blocked

from so vesting. Preseault II, 100 F.3d at 1552; see also

Toews, 376 F.3d at 1376. The question, then, is in the

context of an exemption proceeding, when are state law

reversion interests forestalled by operation of section 8(d)

of the Trails Act? We conclude that this occurs when the

railroad and trail operator communicate to the STB their

intention to negotiate a trail use agreement and the

agency issues an NITU that operates to preclude aban-

donment under section 8(d).

App. 13

In implementing the Trails Act, the STB chose to place

the primary responsibility for creating railbanking ar-

rangements on the railroad and trail operator. The Board

has stated that in order “to promote and expedite the

Trails Act process” it has “declined to burden the Trails Act

process, unnecessarily either by rule or adjudication.”

Policy Statement on Rails to Trails Conversions, Ex Parte

No. 274 (Sub-No. 13B), slip op. at 4 (I.C.C. Jan. 29, 1990).

Indeed, in the STB’s view, it “lack[s] discretion to deny or

condition a trails use proposal (other than to ensure that

the statutory qualifications are met).” Jd. at 3. As a result,

the NITU is issued only after both the railroad and the

trail operator indicate their intent to negotiate a trail use

agreement. The process begins when the railroad initiates

the abandonment process (either through standard aban-

donment or exemption procedures). 49 C.F.R. § 1152.29;

see also NARPO, 158 F.3d at 138. Subsequently, the

interested trail operator files a railbanking petition that

meets the statutory requirements reiterated in 49 C.F.R.

§ 1152.29(a). If the railroad agrees to negotiate a trail use

agreement and so communicates to the STB, the STB

will issue ean NITU as a matter of course. 49 C.F R.

§ 1152.29(d)(1). Thus, contrary to the view of the Court of

Federal Claims, the NITU is issued only after the trail

operator has been identified, and moreover, has indicated

its “willingness to assume full financial responsibility and

liability for the line and to agree to the railbanking condi-

tion for potential future reactivation of rail service.” Policy

Statement on Rails to Trails Conversions, slip op. at 3.

The issuance of the NITU is the only government

action in the railbanking process that operates to prevent

abandonment of the corridor and to preclude the vesting of

state law reversionary interests in the right-of-way. The

App. 14

task of finalizing the trail use agreement under the Trails

Act falls entirely on the railroad and trail operator. In-

deed, the regulations do not even require the railroad and

the trail operator to notify the STB that an agreement has

been finalized, although a formal request to vacate the

NITU is required if the operator intends at some future

time to terminate trail use. 49 C.F.R. § 1152.29%d)(2).

After a final trail use agreement is reached, the NITU

remains in effect indefinitely and “abandonment cannot be

accomplished under the... NITU until trail use terminates

(without restoration of rail service).” Policy Statement on

Rail Abandonments - Use of Rights of Ways as Trails,

Ex Parte No. 274 (Sub-No. 13), 5 1.C.C.2d 370, 373, 1989

WL 238666 (1989) If, however, “no trail use agreement is

reached within 180 days, the ... NITU converts intoa...

notice of abandonment,” id., which “permit([s] the railroad to

fully abandon the line.” 49 C.F.R. § 1152.2%dX1); see also

Preseault I, 494 U.S. at 7 n. 5, 110 S.Ct. 914. If no trail use

agreement is reached within 180 days, but the railroad

wishes to continue negotiations with the trail operator

rather than consummate abandonment, the regulations

also allow the NITU to be extended, as was done in this

case. 49 C.F.R. § 1152.29(eX1).

Thus, the NITU operates as a single trigger to several

possible outcomes. It may, as in this case, trigger a process

that results in a permanent taking in the event that a trail

use agreement is reached and abandonment of the right-of-

way is effectively blocked. Preseault I7, 100 F.3d at 1552; see

also Toews, 376 F.3d at 1376. Alternatively, negotiations

may fail, and the NITU would then convert into a notice of

abandonment. In these circumstances, a temporary taking

App. 15

may have occurred.’ It is not unusual that the precise

nature of the takings claim, whether permanent or tempo-

rary, will not be clear at the time it accrues."

Indeed, the Supreme Court has previously contem-

plated precisely this possibility. In United States v. Dow,

357 U.S. 17, 78 S.Ct. 1039, 2 L.Ed.2d 1109 (1958), the

Court also grappled with the issue of fixing the accrual of

a takings claim. The question was whether the taking

accrued at the time when the initial judgment of “immedi-

ate possession” was obtained, or three years later, when

the government filed a declaration under the Declaration

of Taking Act and title formally passed. At issue was

respondent Dow’s ability to collect compensation from the

government, as Dow had purchased the property from the

original owner after the government physically occupied

the property, but before the formal conveyance of title to

the government. Dow had argued that no permanent

taking occurred until the filing of the declaration and the

formal passage of title, and that only a temporary taking

" This case does not involve, and we do not herein address, whether

the issuance of the NITU in fact involves a compensable temporary

taking when no agreement is reached.

* See Seiber v. United States, 364 F.3d 1356, 1365 (Fed.Cir.2004)

(denial of permit triggers takings claim that, depending on later

government action, may be temporary or permanent); Cooley v. United

States, 324 F.3d, 1297, 1299-300 (Fed.Cir.2003) (same); see also Boise

Cascade Corp. v. United States, 296 F.3d 1339, 1347 (Fed.Cir.2002)

(“[T}he initial denial of a permit is stil] a necessary trigger for a ripe

takings claim.... If the government denies a permit, then the ag-

grieved party can seek compensation. If at some point the government

reconsiders the earlier denial and grants a permit (or revokes the

permitting requirement), then the aggrieved party can seek compensa-

tion for a ‘temporary regulatory taking’.”) (internal footnote omitted).

App. 16

occurred with the government’s physical occupation of the

land.

The Court held that the taking occurred at the earlier

date, when the government entered into physical posses-

sion of the land and the owner was deprived of valuable

property rights, even though title had not formally passed.

Id. at 23, 78 S.Ct. 1039. The Court rejected, as “bizarre,”

the argument that there were “two different ‘takings’ of

the same property, with some incidents of the taking

determined as of one date and some as of the other.” Jd. at

24, 78 S.Ct. 1039. Rather, the Court endorsed a rule

similar to the one that we adopt here, namely that a

taking occurs when the owner is deprived of use of the

property, there by physical possession, here by blocking

the easement reversion. While the taking may be aban-

doned — in Dow, by the government’s possible surrender of

possession prior to the formal passage of title, here by the

termination of the NITU — the accrual date of a single

taking remains fixed. As the Court observed in Dow, the

government’s decision to abandon the taking “merely

results in an alteration in the property interest taken —

from full ownership to one of temporary use and occupa-

tion.” Id. at 26, 78 S.Ct. 1039.

We therefore hold that the appropriate triggering

event for any takings claim under the Trails Act occurs

when the NITU is issued. The NITU marks the “finite

start” to either temporary or permanent takings claims by

halting abandonment and the vesting of state law rever-

sionary interests when issued. See, e.g., Seiber, 364 F.3d at

1364.

App. 17

Having determined that the appellants’ takings claim

accrued on the date when the NITU was issued, we must

now determine if the six-year statute of limitations bars

Caldwell’s claim in this case. We hold that the statute of

limitations is a bar here under either of the two potential

dates of NITU issuance. The first NITU was issued on

August 31, 1994, for the 7.4-mile segment. The scope of

the NITU was enlarged to cover the full 10.6 miles on

June 2, 1995. Both of these dates are more than six years

before the complaint in this case was filed, and therefore

Caldwell’s claim is barred by the statute of limitations.

Appellants further argue that our decision in Stone

Container Corp. v. United States, 229 F.3d 1345 (Fed.Cir.

2000), would apply to toll the statute of limitations during

___.the eleven-month pendency of a class action in Kansas

filed by Cheryl Swisher in October 1998.

We conclude that Caldwell has waived on appeal the

argument that the statute of limitations was tolled during

the eleven-month pendency of the Swisher class action.

This issue was first raised below not at trial, but in a

motion for reconsideration under Rule 59(a) of the Rules of

the Court of Federal Claims. While Caldwell reargues the

merits of the tolling argument on appeal, Caldwell did not

meet the rigorous standards of RCFC 59(a). Motions for

reconsideration must be supported “by a showing of

extraordinary circumstances which justify relief.” Fru-Con

Constr. Corp. v. United States, 44 Fed.Cl. 298, 300 (1999),

aff’d, 250 F.3d 762 (Fed.Cir.2000) (table). In particular,

Caldwell fails to refute the court’s finding that raising the

App. 18

tolling argument for the first time on a Rule 59a) motion

was improper because the pendency of the 1998 Kansas

class action was inherently knowable to Caldwell and

should have been raised in response to the government’s

motion to dismiss for lack of jurisdiction. In any event,

even with the claimed eleven months of equitable tolling,

Caldwell’s filing of October 7, 2002, is barred under the

six-year statute of limitations, since his claim accrued no

later than June 2, 1995.

CONCLUSION

We hold that the Fifth Amendment taking, if any,

under the Trails Act is accomplished when an NITU is

issued and state law reversionary interests that would

otherwise take effect pursuant to normal abandonment

proceedings are forestalled. Because Caldwell’s claim was

filed on October 7, 2002, more than six years after either

of the NITUs issued in this case, that claim is barred by

the statute of limitations under 28 U.S.C. § 2501. The

decision of the Court of Federal Claims dismissing the

appellants’ claim is

AFFIRMED.

COSTS

No costs.

PAULINE NEWMAN, Circuit Judge, dissenting.

I respectfully dissent from the court’s ruling that the

statute of limitations started to accrue from a date before

App. 19

the Caldwell property was “taken” in Fifth Amendment

terms. All authority is contrary to this position.

Neither the dates of the Interstate Commerce Com-

mission’s authorization to the Norfolk Southern Railroad

to abandon railroad use and negotiate transfer of the

easement (the ICC’s Notices of Intent to Use, whose dates

of August 31, 1994 and June 2, 1995 are selected by the

panel majority as the dates on which the statute of limita-

tions started to accrue), nor the date the City of Columbus

notified the ICC of the intended trail use (the date of July

5, 1996 chosen by the Court of Federal Claims) was an

actionable taking of property. Neither event vested a cause

of action in the owner of the fee, for neither event was a

ripened taking. Neither the federal approval to discon-

tinue railway operations, nor the ongoing negotiation

between the railway and the city concerning conversion to

trail use, vested a right of compensation by the United

States. Thus neither of these events started accrual of the

six-year period of limitations of 25 U.S.C. § 2501. See

Alliance of Descendants of Texas Land Grants v. United

States, 37 F.3d 1478, 1481 (Fed.Cir.1994) (“a claim under

the Fifth Amendment accrues when the taking action

occurs”); Steel Improvement & Forge Co. v. United States,

174 Ct.Cl. 24, 355 F.2d 627, 631 (1966) (same).

A Fifth Amendment taking can indeed flow from a

Trails Act conversion of a railway easement. See Preseault

v. United States, 100 F.3d 1525, 1553 (Fed.Cir.1996) (en

banc). However, these plaintiffs could not have prosecuted

their claim until the taking occurred. The taking occurs

“when all events have occurred that fix the alleged liabil-

ity of the Government and entitle the plaintiff to institute

an action.” Seldovia Native Association, Inc. v. United States,

144 F.3d 769, 774 (Fed.Cir.1998). Until the easement was

App. 20

transferred to the City of Columbus, Norfolk Southern

Railroad not only continued as owner of the right-of-way,

but retained all of the benefits and obligations of owner-

ship, including the right to exclude, the obligation to pay

taxes, and liability for injury and liens. Until the right of

trail use was vested in the City the cause of action had not

ripened, and liability of the government for compensation

was not fixed. Suit at this stage would have simply been

premature; the statute of limitations can not start to

accrue before suit could have been filed.

Under the Trails Act and its implementing regula-

tions, not only must an “interim trail manager” (the City

of Columbus) be approved by the ICC, but the interim trail

manager must “assume full responsibility for management

of such rights-of-way and for any legal liability arising out

of such transfer or use, and for the payment of any and all

taxes that may be levied or assessed against such rights-

of-way.” 16 U.S.C. § 1247(d) (1994). These obligations were

not incurred until transfer of the deed at the legal Closing;

until the Closing, the railroad continued to own the right-

of-way, the City of Columbus did not possess and could not

occupy the property, and the City could not convert it into

a recreational trail. Until these events occurred the

owners of the fee were not “clearly and permanently

deprived,” and the liability of the government to pay

compensation was not fixed. See Preseault v. Interstate

Commerce Comm’n, 494 U.S. 1, 7-8, 110 S.Ct. 914, 108

L.Ed.2d 1 (1990) (conversion to trail use may be subject to

Tucker Act remedy for Fifth Amendment taking); Seldovia,

144 F.3d at 774 (“the key date for accrual purposes is the

date on which Seldovia was clearly and permanently

deprived of the lands it had selected”).

App. 21

On October 9, 1996 the Norfolk Southern Railroad

conveyed to the City of Columbus the deed for the 10.6

mile right-of-way. I cannot agree that the plaintiffs could

have brought earlier suit and obtained compensation for

this taking, based on the ICC’s authorizations on August

31, 1994 and June 2, 1995 to Norfolk Southern to negoti-

ate a Trails Act conversion. These preliminary events did

not fix a ripe takings claim. Negotiation of a possible

future event may state a hope and a plan, but it is not a

fixed, ripe, and compensable taking. The owners of the fee

had no right to compensation based on or at the time of

these authorizations to negotiate; thus these authoriza-

tions could not accrue the period of limitations.

Nor were the various negotiating documents involving

the City of Columbus, starting with the document of

August 17, 1995 styled “Purchase Agreement,” an action-

able taking. This Agreement, from which the City could

withdraw on five days’ notice, was amended on April 18,

1996 to add the Trails Act’s requirement that the manager

accept financial and legal responsibility; this acceptance in

turn was conditioned on completion of the transaction, and

only then would become operable. Thus an Amendment to

the Purchase Agreement stated that “at closing Buyer, its

successor or assignee, shall assume full responsibility for

the management of the right of way, for any legal liability

arising out of its transfer or use, and for any payment of

taxes in accordance with the requirements of section 8(d).”

Another amendment dated July 1, 1996 provided that the

City and the railroad would jointly request the ICC (now

named the Surface Transportation Board) to extend the

time period for negotiation of a “mutually acceptable

interim trial use/railbanking agreement” through and

including November 1, 1996. Thus the Agreement itself

App. 22

documented its own negotiating status; these documents

could not have formed the basis of a takings action by July

5, 1996, as the Court of Federal Claims held in selecting

the date when the City and the railway jointly requested

the time extension for further negotiation. This Agreement

and its amendments were recordations of the negotiation,

not a completed transaction having Fifth Amendment

consequences. ~

Taking claims accrue when the liability of the gov-

ernment is fixed, not simply prospective. In Hopland Band

of Pomo Indians v. United States, 855 F.2d 1573 (Fed.Cir.

1988) the court reiterated that

for the purposes of section 2501, it would appear more

accurate to state that a cause of action against the

government has ‘first accrued’ only when all the

events which fix the government’s alleged liability

have occurred and the plaintiff was or should have

been aware of their existence.

Id. at 1577. These events occurred when the City acquired

the deed and the right to occupy and use the property. The

Court explained in Nollan v. California Coastal Comm’n,

483 U.S. 825, 832, 107 S.Ct. 3141, 97 L.Ed.2d 677 (1987),

that permanent physical occupation occurs “where persons

are given a permanent and continuous right to pass to and

fro.” That did not occur until the Closing, when the deed

and the right of occupancy and use were transferred.’

Before these events the period of limitations did not start

' It is not necessary to decide whether the date of accrual of the

limitations period was the transfer of the deed at the Closing on

October 9, 1996, or its recordation a few days later, or the Notification

from the City of Columbus to the ICC on November 5, 1996, because

this suit was filed within six years of the earliest of these dates.

App. 23

to accrue, for neither the ICC’s Notice that permitted

negotiation for trail use, nor the various documents

implementing those negotiations, ripened a claim for

compensation. Intentions are rarely actionable; it is the

consummation that accrues legal rights.

The panel majority places great weight on United

States v. Dow, 357 U.S. 17, 78 S.Ct. 1039, 2 L.Ed.2d 1109

(1958). In Dow the Court held that a taking occurs upon

possession and occupancy of the property, and that a

subsequent filing under the Declaration of Taking Act did

not negate the effect of the earlier possession and occu-

pancy. Id. at 22, 78 S.Ct. 1039. In Dow the government in

1943, by eminent domain, obtained a judgment of “imme-

diate possession” of a right-of-way through a larger tract of

land, entered into immediate possession of the right-of-

way, and within ten days began laying a pipeline through

the tract. In 1945 the owners conveyed the entire tract to

Dow, including their right to any compensation for the

land taken by eminent domain; and in 1946 the govern-

ment filed in court a declaration of taking, obtained title to

the right-of-way, and deposited estimated compensation

with the court. The issue was Dow’s rights under the

Assignment of Claims Act; there was no issue of the

running of a statute of limitations. The Court held that the

taking occurred when the United States entered into

possession in 1943, when the government “entered and

appropriated the property to public use,” id. at 23, 78 S.Ct.

1039, and that the taking neither awaited the later trans-

fer of title to the right-of-way, nor was negated by the later

proceeding. The Court stressed that the determinative

event of the taking was whether “the Government has

already entered into possession.” Jd. at 25, 78 S.Ct. 1039.

This case well supports the plaintiffs herein.

App. 24

It is not disputed that the City of Columbus did not

possess and occupy the property, and had no authorization

or right to do so, until the Closing and transfer of the deed.

Although the panel majority relies heavily on Dow, the

analogy is not apt. In Dow the government was in full

possession of the property it had obtained by condemna-

tion decree and was actively building the pipeline; thus

the Court held that the taking had occurred. In contrast,

the authorization from the ICC to the Railway and the

City to start to negotiate did not change the possession

and occupancy of the easement. My colleagues’ view that it

is irrelevant when title passes does not mean that the

property was earlier taken; that is not the rule of Dow. To

the contrary, Dow strongly reinforces the position that the

Norfolk Southern right-of-way was not taken and com-

pensable until there was a transfer of possession and

occupancy, an event that did not occur until the date of

Closing and the transfer of the deed.

Thus I must, respectfully, dissent from the court’s

conclusion that the statute of limitations started to accrue

when the parties told the ICC that they were negotiating

for the purpose of reaching a trail use agreement.

App. 25

IN THE UNITED STATES COURT

OF FEDERAL CLAIMS

No. 02-1347L

(Filed June 30, 2003)

se @eeeoeeee ee eee es

WILLIAM B. CALDWELL, *

II and BEN FRANK °

BILLINGS, III, for * Taking: Trails Act;

Themselves and as * rails-to-trails; statute

Representatives of * of limitations; RCFC

a Class of Similarly * 12(b)(1); RCFC 12(h\3);

Situated Persons, * 28 U.S.C. § 2501 (2002);

Plaintiffs, * 28 U.S.C. § 1491 (2002);

v. * 160U.S.C. § 1247 (2002);

THE UNITED STATES, : 49 C.F.R. § 1152 (2002).

Defendant. "

*ecs eeeeteteeteeeeee &

James P. Kelly, Atlanta, GA, for plaintiffs. Jeffrey O.

Bramlett, John E. Floyd, Benjamin E. Fox, and Sarah M.

Shalf, Bondurant, Mixson & Elmore, LLP, Atlanta, GA of

counsel.

Kristine S. Tardiff, Concord, MH, with whom was

Assistant Attorney General Thomas L. Sansonetti, Wash-

ington, DC, for defendant. Evelyn Kitay, Surface Transpor-

tation Board, of counsel.

OPINION

MILLER, Judge.

This case is before the court after oral argument on

defendant’s motion to dismiss plaintiffs’ complaint for lack

App. 26

of jurisdiction pursuant to RCFC 12(bX1) and 12(h\3).

Plaintiffs seek, pursuant to the Tucker Act, 28 U.S.C. § 1491

(2002), just compensation for a taking effected pursuant to

the National Trails System Act (“Trails Act”), 16 U.S.C.

§ 1247(dX2002). Defendant invokes the bar of the applicable

six-year statute of limitations, 28 U.S.C. § 2501 (2002).

FACTS

The facts in this case are not disputed. William B.

Caldwell, III, and Ben F. Billings, ITI (“plaintiffs”), have

brought suit on behalf of themselves and all other simi-

larly situated landowners in the state of Georgia. Plain-

tiffs allege that they are the fee simple owners of certain

land in Georgia that historically was subject to a railroad

easement held by Norfolk Southern Railway Company

(“NSR”). They further allege that their ownership inter-

ests in this railroad corridor were taken from them by the

actions of the Government under the National Trails

System Act (the “Trails Act”), 16 U.S.C. § 1247(d)(2002).

Defendant resists the claim on jurisdictional grounds,

citing 28 U.S.C. § 2501 (2002).

1. Statutory and regulatory background

The statutory and regulatory framework surrounding

the Trails Act is central to determining the timeliness of

plaintiffs’ claim. The Interstate Commerce Act of 1887, ch.

104, 24 Stat. 379, as amended and revised, and the Trans-

portation Act of 1920, ch. 91, 41 Stat. 477-78, give the

Interstate Commerce Commission (the “ICC”)’ exclusive

" The ICC was abolished effective January 1, 1996; the Surface

Transportation Board assumed authority to regulate under the Trails

(Continued on following page)

App. 27

and plenary authority over the construction, operation,

and abandonment of virtually all of the nation’s rail lines.

Chicago & N.W. Transp. Co. v. Kalo Brick & Tile Co., 450

U.S. 311, 313, 101 S.Ct. 1124, 67 L.Ed.2d 258 (1981). See

generally RLTD Ry. Corp. v. Surface Transp. Bd., 166 F.3d

808, 810-11 (6th Cir.1999) (discussing railroad regulation).

A railroad cannot be relieved of its legal obligation to offer

service on a particular rail line without first obtaining the

express consent of the ICC. See Colorado v. United States,

271 U.S. 153, 165, 46 S.Ct. 452, 70 L.Ed. 878 (1926);

National Ass’n of Reversionary Prop. Owners v. Surface

Transp. Bd., 158 F.3d 135, 137 (D.C. Cir.1998); Glosemeyer

v. United States, 45 Fed. Cl. 771, 773 (2000). By imposing

this regulatory restriction, “Congress sought to balance

the railroad companies’ need to dispose of trackage that

was no longer profitable with the publics need for a

working interstate track system.” RLTD, 166 F.3d at 810.

In 1983 Congress passed the Trails Act, providing a

railroad seeking to abandon or discontinue its use of a rail

line with an option: railbanking. The term railbanking

refers to the “preservation of railroad corridor for future

rail use,” while making the corridor available for other

activities. Nebraska Trails Council v. Surface Transp. Bd.,

120 F.3d 901, 903 n.1 (8th Cir.1997). The right-of-way is

“banked” until such future time as railroad service is

restored. See Chevy Chase Land Co. v. United States, 37

Fed.Cl. 545, 554 (1997), aff’d, 230 F.3d 1375, 1999 WL

1289099 (Fed.Cir.1999), cert. denied, 531 U.S. 957, 121

Act. See ICC Termination Act of 1995, Pub. L. No. 104-88, 109 Stat. 803

(1995). For the purposes of this opinion, the court refers to the ICC as

the relevant authority, as the origins of the dispute pre-date the ICC’s

abolition.

App. 28

S.Ct. 380, 148 L.Ed.2d 293 (2000). Railbanking therefore

represents an alternative to abandonment. RLTD, 166

F.3d at 811. “Congress determined that interim trail use

was to be treated like discontinuance rather than as an

abandonment.” Grantwood Vill. v. Missouri Pac. R.R. Co.,

95 F.3d 654, 659 (8th Cir. 1996), cert. denied, 519 US.

1149, 117 S.Ct. 1082, 187 L.Ed.2d 216 (1997). Thus, the

Trails Act operates “to preserve for possible future railroad

use rights-of-way not currently in service and to allow

interim use of the land as recreational trails.” Preseault v.

ICC, 494 U.S. 1, 6, 110 S.Ct. 914, 108 L.Ed.2d 1 (1990).

For a railroad corridor or right-of-way to be railbanked,

the railroad first must engage in the ICC’s regulatory aban-

donment process by filing either an abandonment applica-

tion under 49 U.S.C. § 10903 (2002), or by seeking an

exemption under 49 U.S.C. § 10502 (2002). Once an entity

has filed an abandonment application or request for an

exemption with respect to a given railroad, a party interested

in acquiring or using the right-of-way for railbanking and

interim trail use may request the issuance of a certificate of

interim trail use (“CITU”) (in abandonment application

proceedings) or a notice of interim trail use (“NITU”) (in

abandonment exemption proceedings, as in the case at bar).

49 C.F.R. § 1152.29(a), (b)(1)Gii) & (d)(1) (2002).

The ICC’s regulations require that a qualified party

interested in “acquiring or using” a right-of-way to file a

request or petition that includes: 1) a map of the right-of-

way, or portion thereof, that is proposed to be acquired or

used; 2) a statement of willingness to assume responsibil-

ity for the right-of-way, including management responsi-

bility, legal liability, and payment of applicable taxes; and

3) an acknowledgment that interim trail use of the right-

of-way is subject to “possible future reconstruction and

App. 29

reactivation of the right-of-way for rail service.”

§ 1152.29(a)(1)-(3).

The ICC, having received the required documentation,

determines whether to grant the request by applying a

“rebuttable presumption of fitness” to the potential trail

sponsor. Citizens Against Rails-to-Trails v. Surface Transp.

Bd., 267 F.3d 1144, 1150 (D.C. Cir.2001). When a complete

request for the issuance of a NITU is received, and the

railroad indicates that it is willing to negotiate a Trail Use

Agreement, the ICC issues a NITU. 49 C.FR.

§ 1152.29(b)(1); Goos v. ICC, 911 F.2d 1283, 1295 (8th Cir.

1990); Citizens Against Rails-to-Trails, 267 F.3d at 1151-

52. The NITU stays the effective date of the abandonment

authority for 180 days in order to allow the railroad and

the authorized trail group to negotiate a railbanking and

interim Trail Use Agreement. § 1152.29(d)(1).

If the parties do not reach a Trail Use Agreement

during the initial negotiating period allowed by the NITU,

and the ICC does not extend the negotiating period, the

NITU authorizes the railroad to exercise its option to

abandon the line without further action by the ICC.

Reversionary Prop. Owners, 158 F.3d at 139. If an agree-

ment is reached, the NITU automatically authorizes the

interim trail use. Jd. If the ICC takes no further action,

the trail sponsor then may assume management of the

right-of-way, subject only to the right of a railroad to

reassert control of the property for restoration of rail

service. Goos, 911 F.2d at 1295; § 1152.29(d)(2).

2. Factual background

The railroad corridox at issue in this case is located in

Columbus, Georgia (the “City of Columbus” or the “City”).

App. 30

It is locally known as the Warm Springs Rail Line and

spans approximately 10.5 miles. The corridor originally

was part of a 97-mile rail line from Columbus to

McDonough, Georgia. The rail line was opened on Decem-

ber 1, 1887, and by 1990 it was owned and operated by

NSR.

In 1992 the City of Columbus publicly introduced its

“Columbus Alternative Transportation System,” or “CATS”

plan, which included a recommendation to construct

pedestrian walkways and bikeways on existing railroad

corridors. The CATS plan stated that one of the key

components of the system was to obtain the Warm Springs

Rail Line from NSR.

On May 5, 1994, NSR published a notice of intent to

file a notice of exemption under 49 C.F.R. § 1152.50, which

governs exempt abandonments, seeking permission from

the ICC to abandon a 7.4-mile segment of rail line between

milepost 90.0 in Meyer, Georgia, and milepost 97.4 in

Columbus, Georgia. On July 5, 1994, NSR filed with the

ICC its notice of exemption under section 1152.50 to

abandon the 7.4 miles of rail line. On July 26, 1994, the

ICC issued an order allowing the exemption, effective

August 25, 1994, conditioning it on certain events.

By letter dated August 11, 1994, NSR notified the ICC

that it was “willing to negotiate for a trail use agreement

with the City of Columbus, GA for the subject line” and

that it consented to the issuance of a NITU. By letter

dated August 12, 1994, the City of Columbus requested the

issuance of a NITU and submitted its statement of will-

ingness to assume financial responsibility for the rail

corridor. The NSR reconfirmed in a letter dated August 17,

App. 31

1994, that it agreed to negotiate with the City for rail-

banking and interim trail use.

The ICC issued a NITU for the rail corridor effective

August 31, 1994. The ICC afforded the parties 180 days in

which to negotiate a railbanking agreement, stating: “If an

agreement for interim trail use/rail banking is reached by

the 180th day after service of this decision and notice,

interim trail use may be implemented. If no agreement is

reached by the 180th day, [NSR] may fully abandon the

line.” On February 23, 1995, during the 180-day negotiat-

ing period, the City and NSR jointly requested that the

NITU be expanded to cover an additional 3.2-mile segment

of the same corridor.’ The ICC subsequently issued a

decision dated May 25, 1995 (effective June 2, 1995),

consolidating the proceedings involving the 3.2-mile

segment with those involving the 7.4-mile segment. This

decision also extended the NITU negotiating period to

August 26, 1995.

On August 17, 1995, just prior to the expiration of the

NITU negotiating period, NSR entered into a purchase

and sale agreement with the Trust for Public Land, the

entity selected by the City to negotiate the acquisition of

the rail corridor from NSR. This agreement was amended

on April 18, 1996, and July 1, 1996. On April 30, 1996, the

City Council approved the acquisition of the rail corridor.

The Columbus City Council, at its October 24, 1995

meeting, authorized and directed the completion of title

and environmental examinations of the corridor. The Trust

* The original 7.4-mile segment extended from milepost 97.4 to

milepost 90.0. The additional 3.2-mile segment extended from milepost

90.0 to milepost 86.8.

App. 32

for Public Land assigned its rights under the agreement to

the City on July 2, 1996. NSR executed a quitclaim deed to

the City on October 9, 1996. The deed was recorded on

October 11, 1996.

By motion filed July 5, 1996, the City notified the ICC

that “[a] railbanking agreement [the ‘Trial Use Agree-

ment’} has been reached by the parties.” However, the City

also requested an extension of the NITU “in order to

ensure that the railbanking period extends through the

time of the actual transfer of the corridor to the interim

trail manager, which is anticipated to occur on or before

November 1, 1996, and to cover any gaps that may have

inadvertently occurred in the railbanking negotiating

period.” NSR consented to the City’s motion, which was

granted by the Surface Transportation Board on August 6,

1996.

On October 7, 2002, plaintiffs filed a complaint alleg-

ing a taking effected by the Trails Act. Plaintiffs brought

their action as the representatives of a class consisting of

all persons who, in October and November 1996, owned an

interest in the land burdened by the railway easement,

which was subject to the City’s Trail Use Agreement.

DISCUSSION

1. Jurisdiction

The Fifth Amendment to the U.S. Constitution en-

sures that the United States does not take private prop-

erty for public use without just compensation. U.S. Const.

amend. V. When the Government does not provide com-

pensation through eminent domain proceedings, the

Tucker Act, 28 U.S.C. § 1491, operates to enforce a land-

owner’s compensatory right. Preseault v. ICC, 494 U.S. at

App. 33

11-12, 110 S.Ct. 914. Thus, plaintiffs’ claim lies within the

jurisdiction of the Court of Federal Claims under the

Tucker Act.

An action in the Court of Federal Claims must be filed

within six years of the claim’s accrual. The timeliness of

plaintiffs’ claim therefore is governed by the statute of

limitations set forth in 28 U.S.C. § 2501, which provides

that “[e]very claim of which the United States Court of

Federal Claims has jurisdiction shall be barred unless the

petition thereon is filed within six years after such claim

first accrues.” The statute of limitations is a jurisdictional

requirement “attached by Congress as a condition of the

government's waiver of sovereign immunity, [and there-

fore] must be strictly construed.” Hopland Band of Pomo

Indians v. United States, 855 F.2d 1573, 1576-77

(Fed.Cir.1988).

Plainti” 5’ claim will be time barred absent a showing

that it first accrued within six years of the date on which

plaintiffs’ complaint was filed. Under this threshold

analysis, a claim first accrues when “all the events have

occurred which fix the alleged liability of the defendant

and entitle the plaintiff to institute an action.” Hopland

Band, 855 F.2d at 1577.

2. Standard of review

The determination of whether this court has subject

matter jurisdiction to hear plaintiffs’ claim is a question of

law. Toxgon Corp. v. BNFL, Inc., 312 F.3d 1379, 1381

(Fed.Cir.2002); Maher v. United States, 314 F.3d 600, 603

(Fed.Cir.2002). A Rule 12(b)(1) motion to dismiss chal-

lenges a court’s subject matter jurisdiction over a claim

based on plaintiff’s jurisdictional allegations. Because “the

App. 34

movant is deemed to be challenging the factual basis for

the court’s subject matter jurisdiction[,]” the court, in

establishing the jurisdictional facts, “is not restricted to

the face of the pleadings, but may review evidence extrin-

sic to the pleadings. ... ” Cedars-Sinai Med. Ctr. v. Wat-

kins, 11 F.3d 1573, 1583-84 (Fed.Cir.1993), cert. denied,

512 U.S. 1235, 114 S.Ct. 2738, 129 L.Ed.2d 859 (1994); see

also Indium Corp. of America v. Semi-Alloys, Inc., 781 F.2d

879, 884 (Fed.Cir.1985), cert. denied 479 U.S. 820, 107

S.Ct. 84, 93 L.Ed.2d 37 (1986). Plaintiff in all such in-

stances bears the burden of establishing jurisdiction by a

preponderance of the evidence. Reynolds v. Army and Air

Force Exch. Serv., 846 F.2d 746, 748 (Fed.Cir.1988).

3. Claim accrual

The issue in this case requires the court to determine

when the Government’s action over the rail corridor had

permanent legal effect, thereby resulting in the Govern-

ment’s liability for the taking being made “definite” or

“fixed.” In the Trail Act scenario, the Government’s liabil-

ity is set when plaintiffs’ property had been definitely

converted to public use and the plaintiffs were able to

bring a claim under the Tucker Act.

Plaintiffs argue that their claim accrued when the

deed to the land in question passed from NSR to the City.

Defendant offers two key events for determining when

plaintiffs’ claim accrued. The first — and defendant’s

preferred reference point — was the date on which the ICC

issued its initial NITU for each segment of the subject rail

corridor. The second alternative date occurred when the

parties signed the Trail Use Agreement. The court ad-

dresses each argument, in turn.

App. 35

1) Passage of the deed

It is plaintiffs’ position that the permanence required

by takings case law is achieved only with the delivery of

the deed from the railroad to the trail group. They contend

that a Trail Use Agreement triggers the statute of limita-

tions when the agreement itself transfers lease interest or

financial responsibility for the land, as required by the

Trails Act. However, plaintiffs argue that where, as here,

the transfer of all interests cannot occur until the delivery

of a quitclaim deed, an earlier purchase and sale agree-

ment does not itself trigger the running of the statute of

limitations. Therefore, the purchase and sale agreement

does not activate the running of the statute of limitations.

Plaintiffs point out that the Trails Act provides that

the interim trail manager must 1) “assume full responsi-

bility for management of such rights-of-way and for any

legal liability arising out of suc:: transfer or use, and for

the payment of any and all taxes that may be levied or

assessed against such rights-of-. *y,” 16 U.S.C. § 1247(d);

and 2) agree that the transfer of trail use is “subject to

possible future reconstruction and reactivation of the

right-of-way for rail service,” 49 C.F.R. § 1152.29(a)(3).

According to plaintiffs, an inchoate purchase and sale

agreement, standing alone, does not satisfy these re-

quirements, but a consummated transfer of property does.

Two major problems inhere in plaintiffs’ reasoning.

First, it is not stated why plaintiffs focus on the signifi-

cance of the purchase and sale agreement, as opposed to

the Trail Use Agreement. The only relevant case law

App. 36

focuses on the latter.’ Plaintiffs present no case decided

under the Trails Act suggesting that the relevant inquiry

should be directed to the purchase and sale agreement,

rather than the Trail Use Agreement. After all, it is the

Trail Use Agreement that ends the NITU negotiation

period. Second, plaintiffs do not make clear why the trail

manager’s assumption of duties should trigger a taking.

Plaintiffs have presented no evidence suggesting that

meeting the trail manager requirements constitutes a

taking.

Plaintiffs further contend that takings under the

Trails Act are analogous to condemnation proceedings. A

taking in condemnation proceedings does not occur until

either 1) the Government takes physical possession of the

land without the authority of a court order, or 2) legal title

passes to the Government pursuant to condemnation

proceedings. United States v. Dow, 357 U.S. 17, 21, 78

S.Ct. 1039, 2 L.Ed.2d 1109 (1958). In condemnation

proceedings the announcement of a condemnation does not

effect a taking; only the actual passage of title to the land

does so. Kirby Forest Indus., Inc. v. United States, 467 U.S.

1, 14-15, 104 S.Ct. 2187, 81 L.Ed.2d 1 (1984).

In Kirby the Supreme Court did not find a taking

“prior to the payment of the condemnation award in this

case, an interference with petitioner’s property interests

severe enough to give rise to a taking under (this) theory.

Until title passed to the United States, petitioner was free

to make whatever use it pleased of its property.” 467 U.S.

* The two cases, Smith v. United States, No. 97-581L (Fed.Cl. Sept.

29, 1999), and Illig v. United States, No. 98-934L (Fed.Cl. Nov. 12,

1999), are discussed at length infra § 3(3).

App. 37

at 14-15, 104 S.Ct. 2187. Even in the context of a condem-

nation proceeding, however, the Supreme Court scruti-

nized first the severity of interference with plaintiff’s

property rights. Only then did the Court hold that the

level of severity was met with the transfer of the deed. As

an administrative matter, a condemnation announcement

may threaten a landowner’s rights to a lesser extent than

the issuance of a NITU and the execution of a Trail Use

Agreement. That difference could account for the Supreme

Court’s treating the condemnation announcement as

constituting something less than a taking. The Court’s

holding in Kirby focuses less on the title to the land and

more on the Government’s interference with plaintiff’s

rights, and, to that extent, the case is instructive. It does

not go so far, however, as to mandate that a taking in

contexts other than condemnation proceedings can occur

only with the passing of title.

Significantly, the Trails Act and its implementing

regulations do not require a railroad to sell or transfer its

ownership interest in the railroad corridor in order for

that corridor to be railbanked and used for interim trail

use. On the contrary, the statute expressly provides that

interim trail use may occur by “donation, transfer, lease,

sale, or otherwise.” 16 U.S.C. § 1247(d). The applicable

regulations also contemplate that a qualified trail group

either can acquire or merely use the corridor for interim

trail use or railbanking. 49 C.F.R. § 1152.29(a); see also

Chicago & N.W. Transp. Co. — Abandonment Exemption —

Guthrie and Dallas Counties, IA, No. AB-1 (Sub-No. 192X),

1987 WL 98423, at *4 (I.C.C. May 7, 1987) (trail use can

occur under Trails Act “whether the involved railroad

transfers or retains its interest in the right-of-way”);

Union Pac. R.R. Co. — Abandonment Exemption — In

App. 38

Saunders and Butler Counties, NE, No. AB-33 (Sub-No.

81X), 1994 WL 562032, at *3 (I.C.C. Sept. 28, 1994)

(“Neither the Trails Act nor our regulations require a

potential trail user to hold title ownership in the trail; a

potential trail user must only file a statement indicating

its willingness to assume financial responsibility. The

statement of financial responsibility imposes a legal

obligation upon the trail user even if the user does not hold

legal title.” (emphasis added)). It would not reake sense for

a claim accrual date to be triggered by the execution of a

deed from the railroad to the trail group when neither the

Trails Act nor its implementing regulations require a deed

be transferred before the trail group may use the right-of-

way.

During oral argument plaintiffs argued that Chevy

Chase, 37 Fed.Cl. 545, supports their contention that the

statute of limitations for a takings claim under the Trails

Act begins to run upon the delivery of the deed. Plaintiffs

in Chevy Chase, a land company and a country club, sued

the United States alleging a taking after Montgomery

County, Maryland, purchased a rail corridor pursuant to

the Trails Act. The land company asserted that it owned

the right-of-way strip and that the railroad’s postponing of

its abandonment obstructed the land company’s full fee

simple property interest in the strip. The country club

argued that it used a portion of the right-of-way as part of

its golf course. It also argued that it had easements to

other parts of the right-of-way protecting the use of its

land as a golf course.

While the Chevy Chase court’s analysis regarding the

CITU issuance and Trail Use Agreement was general and

seems to apply to both plaintiffs in the case, the court’s

conclusion distinguishes between the two plaintiffs. The

App. 39

court’s analysis regarding the land company focused on

the CITU issuance and the Trail Use Agreement. The

court’s discussion of the country club’s claim focused on the

purchase date of the land in question. The court explained:

The Club’s complaint, filed on January 22, 1993,

is also timely. The actual taking alleged by the

Club is somewhat different from that alleged by

[the land company]. The Club objects to an ex-

cess use of the right-of-way by Montgomery

County. It asserts that implementation of the

proposed plan will interfere with its ability to

utilize its golf course — portions of which are lo-

cated within, and the majority of which is located

adjacent to — the right-of-way. As such, the Club’s

alleged taking claim did not accrue until Mont-

gomery County purchased the right-of-way in

1988.

Id. at 564. The accompanying footnote reads:

Further, whether Montgomery County merely

has an easement — or if Montgomery County

bought a fee simple — does not matter with re-

gard to the Club’s claims, because the Club as-

serts that its property interests within the right-

of-way as well as its adjacent property will be af-

fected by this purchase and accompanying in-

tended use in either case.

Id. at 564 n.17. Chevy Chase suggests that the claim

accrual analysis differs depending on whether the interim

trail use effects a taking of plaintiff’s interest in the

corridor lands, as opposed to merely affecting plaintiff’s

ability to use its existing lands. Because the case at bar

deals with the former situation, the court does not reach

the question of whether such a distinction bears on the

date of claim accrual. Suffice it to say that Chevy Chase

App. 40

does not endorse a blanket rule triggering the statute of

limitations as of the date of purchase. Indeed, the distinc-

tion between the land company and the country club

supports defendant’s argument that, where plaintiff

alleges a taking of its land, not merely the use of its land,

the Trail Use Agreement governs the claim accrual.

Plaintiffs have not argued convincingly that the court

should focus on the purchase and sale agreement, rather

than the administrative consummation of the taking,

which culminates with the Trail Use Agreement.’ Plain-

tiffs have not carried their burden of proof to establish

that this court has jurisdiction over its claim based on the

date of the purchase and sale agreement.

2) Issuance of the NITU

Defendant first argues that the correct claim accrual

date is the date on which the ICC issued the NITU’s for

each rail segment: August 31, 1994 for the 7.4-mile seg-

ment; and June 2, 1995, for the 3.2-mile segment. Federal

Circuit decisions involving Trails Act cases have not

addressed directly the question of claim accrual. In Pre-

seault v. United States, 100 F.3d 1525 (Fed.Cir.1996) (en

banc), the court ruled on whether a conversion of a rail

corridor, authorized by the ICC, constituted a taking

under the Fifth Amendment. The State of Vermont Agency

of Transportation, joined by Vermont Railway, entered into

* For this reason the court does not deem necessary a discussion of

plaintiffs’ alternative accrual dates, including the date on which the

deed was recorded, the date on which the City authorized its mayor to

execute agreements with NSR and the Trust for Public Lands, or the

date on which the City filed a “Notification of Railbanking/Interim Trail

Use Agreement.”

App. 41

a lease with the City of Burlington, dated June 18, 1985,

whereby the former two entities leased a rail corridor to

the latter for use as a bicycle and pedestrian path. The

ICC issued a NITU the foliowing year, on February 5,

1986. See Preseault v. United States, 24 Cl.Ct. 818, 822-23

(1992), rev'd and remanded, 100 F.3d 1525. Plaintiffs filed

their takings claims on December 26, 1990, in the Court of

Federal Claims, rendering their complaint timely under

any application of the statute of limivations.

A plurality of the Federal Circuit agreed that “(until

the ICC makes the administrative decision to convert an

unused right-of-way to a trail, rather than simply permit

abandonment, and finds an appropriate public agency to

operate the trail, a landowner’s suit for a taking would run

afoul of established requirements of exhaustion of admin-

istrative remedies.” 100 F.3d at 1538. Defendant argues

that this language in Preseault requires that the court look

to the issuance of te NITU as the required administrative

action on which to predicate the commencement of the

limitations period.

Defendant’s argument suffers from two infirmities.

First, defendant disregards the second clause in the

sentence quoted from Preseault, requiring the ICC to

select an appropriate public agency to operate the trail.

This requirement is met only after the parties successfully

negotiate a Trail Use Agreement. If the parties reach an

agreement within the 180-day negotiating period, the

interim trail use is authorized by the NITU; if no agree-

ment is reached, abandonment is authorized automati-

cally. Thus, the signing of the Trail Use Agreement

satisfies the administrative action requirement described

in Preseault.

App. 42

Second, Preseault also placed great weight on the fact

that plaintiffs in that case could not have brought suit

before the taking had been finalized. See 100 F.3d at 1538.

If plaintiffs in Preseault had initiated a suit after the

issuance of the NITU, but before the ICC had found an

appropriate public agency to operate the trail, their claims

would have been subject to a ripeness challenge. Id.

Plaintiffs in the case at bar argue that, just as the Gov-

ernment’s liability could not have been fixed at the time of

the NITU’s issuance, the statute of limitations also could

not have been triggered at that time. Plaintiffs conclude

that the ripeness challenge would preclude the statute’s

running following issuance of the NITU and the author-

ized party's taking title to the land.

Although the court reads the Federal Circuit’s Pre-

seault opinion to hold that the tolling of a statute of

limitations could not begin before the ICC’s issuance of the

NITU, the appeals court did not go so far as to suggest

that the NITU issuance in fact initiates the running of the

statute. This court agrees with plaintiffs that it is axio-

matic that, if plaintiffs’ claim would be open to a ripeness

challenge even after the issuance of the NITU, the statute

of limitations could not run concurrently to diminish their

rights.

Defendant argues that another Federal Circuit case,

Bass Enterprises Production Co. v. United States, 133 F.3d

893 (Fed.Cir.1998), supports its proposition that the

statute is triggered at NITU issuance. Plaintiffs in that

case alleged a taking of their leasehold-derived right to

drill for oil and gas on certain federal lands after the

Bureau of Land Management (the “BLM”) denied their

application for a permit to drill. The denial was temporary,

pending a determination as to whether plaintiffs’ leases

App. 43

must be condemned to protect the integrity of an under-

ground nuclear waste repository under construction in the

area of the ‘eases. Although the trial court found that the

BLM’s permit denial constituted a permanent taking of

plaintiffs’ property, the Federal Circuit reversed, stating:

Congress has expressly established a mechanism

for condemning the leases at issue if deemed

necessary to ensure the integrity of the [nuclear

waste] facility. Such events are statutorily man-

dated to occur. Thus, in the interim, the denial of

the permits is at best a temporary taking. The

statutorily mandated end to the regulatory proc-

ess will result in a decisinvn whether or not to

condemn the leases. Although the precise date is

unknown, it is clear that such a decision is re-

quired to be made. Thus, we conclude that the

denial of the drilling permits at this time does

not constitute a permanent taking.

133 F.3d at 895-96. The case was then remanded for a

determination of whether the BLM’s denial of a permit

constituted a temporary taking. Defendant argues that the

Bass plaintiffs’ takings claims all related back to a single

government action — the BLM’s denial of a permit. By

analogy, defendant contends that plaintiffs in the case at

bar were in the same situation when the ICC issued the

NITU: The fate of their land rights was unknown, but, at

least temporarily, their rights were suspended.

While defendant’s argument has intellectual appeal, it

ultimately cannot surmount the precedent enunciated in

Preseault. The Federal Circuit in Preseault did not look at

the last government action, as defendant urges, but,

rather, focused on the end of the administrative process,

which the Government set into action with the NITU

issuance, but which concluded with the execution of the

App. 44

Trail Use Agreement. Preseault’s dependence on adminis-

trative finality in the context of the Trails Act prevents the

court from relying on the loose analogy bai defendant

draws from Bass.

Defendant argues that Chevy Chase, 37 Fed.Cl. 545,

also supports its contention that the statute began to run

upon the issuance of the NITU. Defendant proffers the

decision as finding that the administrative approval

occurred with the issuance of the CITU and that plaintiff

land company’s claims therefore were timely. The court

wrote:

A taking cannot occur under 16 U.S.C. § 1247(d)

until either (1) a railroad effects an abandon-

ment of a railroad easement under state law but

the reversion to the fee owner is obstructed by

way of federal statute, and/or (2) an approval of a

plan for a hiker/biker trail which would burden a

right-of-way with an additional servitude. See,

e.g., Preseault, 100 F.3d at 1538-39. Only at ei-

ther of these two points would the implementa-

tion of the Trails Act actually cause a taking of

property of an underlying fee owner. Id. ...

However, the statute of limitations does not

start to run until there has been an administra-

tive determination [approving trail use] and as-

signment to a hiker/biker trail.

Id. at 563

Chevy Chase leaves open the question of whether the

date of the NITU issuance, as opposed to the date of the

Trail Use Agreement, marks the accrual of a plaintiff’s

claim. In the above passage, the court suggests that either

date is possible; it uses the terms “either” and “and/or,” but

App. 45

then links the conditions with an “and” in the final sen-

tence.*

This court interprets the last sentence to mean that

the existence of an administrative approval is a necessary,

but not sufficient, factor required to trigger a takings

claim. The last phrase indicates that the administrative

action must be supplemented by an assignment to a

hiker/biker trail before the statute of limitations can run,

which essentially engrafts a condition on the second event.

Thus, Chevy Chase specifies abandonment or an adminis-

trative determination, coupled with assignment to a

hiker/biker trail. Chevy Chase does not support defen-

dant’s arguiment that the issuance of a NITU is sufficient

to trigger the running of the statute of limitations for the

purposes of 28 U.S.C. § 2501.

3) Trail Use Agreement

The Court of Federal Claims, in two unpublished

decisions,’ has selected the executien date of the Trail Use

Agreement as the date triggering the statute of limitations

under 28 U.S.C. § 2501. In Smith v. United States, No. 97-

581L (Fed.Cl. Sept. 29, 1999), the ICC issued a NITU in

August 1989. The railroad and the qualified trail group

entered into a Trail Use Agreement approximately five

* It is worth noting that another decision from the Court of Federal

Claims interprets Chevy Chase to leave open the question of when the

statute of limitations began to run. See Smith v. United States, No. 97-

581L, slip op. at 4 (Fed.Cl. Sept. 29, 1999) (“Chevy Chase leaves open

the question of whether the date of the issuance of the CITU/NITU, as

opposed to the date of the subsequent Trail Use Agreement, appropri-

ately marks the accrual of a taking claim of this nature.”)

* The parties rely on them, so the court follows suit.

App. 46

months after the ICC issued the NITU. Although plain-

tiff’s claim would have been untimely under either meas-

ure — either from the NITU issuance or the Trail Use

Agreement execution — the court held that the statute of

limitations began to run when the parties signed the Trail

Use Agreement. The court reasoned that prior to the

Agreement, “it is uncertain whether the CITU/NITU will

take effect, and thus the reversionary right might still vest

in the underlying owner.” Slip op. at 4. The court went on

to hold:

It is not until the use of the easement, and the

resulting burden on the underlying land owner,

is fixed by way of a trail use agreement that the

rights of the land owner are effected [sic] in a

manner that gives rise to a permanent taking

claim under the Fifth Amendment and the

Tucker Act. See Preseault, 100 F.3d at 1537[-38]

(“Until the ICC makes the administrative deci-

sion to convert an unused right-of-way to a trail,

rather than simply permit abandonment, and

finds an appropriate public agency to operate the

trail, a landowner’s suit for a taking would run

afoul of established requirements for exhaustion

of administrative remedies”). Accordingly, as

plaintiffs’ suit here was filed more than six years

after ... the date of the formal agreement, it is

untimely and must be dismissed.

Id.

Defendant dismisses Smith as erroneously decided

because the NITU is effective when issued to delay the

vesting of any reversionary interests in the underlying owner

of the railroad corridor land. However, the NITU takes effect

only if the right-of-way meets the criteria for abandonment

and negotiation of trail use occurs. Authorization to abandon

App. 47

the rail line kb ‘omes effective only when the 180-day

negotiation period expires. The court’s inquiry thus should

focus on when the taking becomes permanent; as Smith

reinforces, the mere issuance of a NITU does not represent

the permanent taking of land rights by the Government.

This court therefore agrees with the Smith court analysis

that a permanent taking occurs when the parties success-

fully negotiate a Trail Use Agreement.

Plaintiffs respond that Smith does not address the

question presented in the case at bar. Although Smith

decided that, as between the NITU issuance and the Trail

Use Agreement, the latter begins the statute of limita-

tions, Smith did not involve a transfer of a property

interest — only a transfer of possessory interest and

financial responsibility. The transfer of responsibility

occurred pursuant to the Trail Use Agreement, and the

court did not consider whether the date of execution of a

deed transferring property interest might be the point of

taking. Plaintiffs therefore label Smith as factually distin-

guishable.

The court appreciates the difference between the facts

in Smith and the facts in the case at bar, but the distinc-

tion that plaintiffs highlight is not material. As in Pre-

seault, the analysis in Smith focuses on the severity of the

interference with the landowier’s rights to determine

when the taking is fixed. Neither Preseault nor Smith

makes its holding contingent on the nature of the proprie-

tary interest. The courts’ analysis in these cases focuses on

the point at which the taking is fixed in the administrative

process. Both cases determine that this point occurs when

the Trail Use Agreement is finalized.

App. 48 -

The Court of Federal Claims, in another unpublished

opinion, /llig v. United States, No. 98-934L (Fed.Cl. Nov. 12,

1999), again focused on the permanence of the taking to

resolve the question of when a statute of limitations begins

te run for the purposes of 28 U.S.C. § 2501. In Illig the ICC

issued a NITU on March 27, 1992. The parties signed the

relevant Trail Use Agreement on December 30, 1992. Plain-

tiff filed its takings claims on December 28, 1998, rendering

them untimely if measured from the NITU date, but timely if

measured from the date of the agreement. Finding that

plaintiff’s claims accrued on the later date and therefore

were not barred, the court reasoned that, had the railroad

and trail group “failed to effect the conversion of the railway

to a trail, the NITU would be rightly seen as having had no

permanent legal effect on the property rights of the plaintiff.

Prior to December 30, 1992, the effect of the NITU was

inchoate; it merely threatened to permanently impinge

plaintiff’s property rights.” See slip op. at 3.

Plaintiffs find Jllig inapposite because the Trail Use

Agreement was signed on the same date the deed was

executed. However, plaintiffs’ argument cannot overcome

the established case law discussed above. The mere

coincidence that the Illig Trail Use Agreement was signed

on the same date that the deed passed does not displace

the reasoning that the court enunciated in reaching its

conclusion in the case.

The Federal Circuit, in Creppel v. United States, 41

F.3d 627 (Fed.Cir.1994), addressed the question of claim

accrual in the context of an EPA procedure that allegedly

effected a taking. Plaintiff landowners brought takings

claims after the Army Corps of Engineers engaged in a

flood control project. Phase I of the project began in 1964

and finished in 1973. Phase II commenced in 1974, but

App. 49

was halted that year while the Corps determined if the

project complied with the Clean Water Act. In 1976 the

Army issued the so-called Wilson Order that eliminated

plaintiffs’ expectation of land reclamation pursuant to the

project. The EPA concurred with this result. Plaintiffs

successfully overturned the order in court. In 1984 the EPA

began proceedings to determine whether to stop the project

by denying it a permit. The EPA issued a Final Determina-

tion on October 16, 1985, permanently blocking the project.

Plaintiffs brought four consolidated takings claims in the

Court of Federal Claims in 1991. Defendant moved to

dismiss the claims as untimely, and the trial court ruled that

the claims were barred by section 2501 because the takings

were fixed at the date of the Wilson Order.

The Federal Circuit reversed, holding:

The EPA’s Final Determination “fixed the liabil-

ity” of the Government. ... On this date, the EPA

finally fully vetoed the original Project and alleg-

edly denied the claimants the ability to make

economically viable use of their property. The

EPA hearings on whether to [block the project]

did not fix the alleged liability of the Government

because the outcome was unknown until the Fi-

nal Determination issued. ... The alleged taking

therefore accrued when the EPA issued its actual

... order, not when it started to consider whether

to prepare such an order.

41 F.3d at 634. Similarly, issuance of the NITU does not

determine the results of the Government’s action in the

case at bar. The taking becomes fixed only after the parties

reach a Trail Use Agreement. Before that date the outcome

of the Government action is not certain, so the taking has

not been effected.

App. 50

Although other decisions issuing from this court do

not constitute binding precedent, they are helpful in

guiding the court to decide cases that are not governed by

appellate decisions. The reasoning in Smith and Illig is

sound and is also consistent with Federal Circuit prece-

dent in Creppel. Defendant has presented no persuasive

argument for jettisoning the analysis that focuses on the

permanence of the taking in order to determine when the

statute of limitations was triggered. Similarly, plaintiffs

have not presented a sustainable argument that the

required permanence under takings law occurs only when

the deed to the land passes to the interim user. For the

purposes of a Fifth Amendment taking in the context of

the Trails Act, the court holds that the Government taking

is fixed upon the signing of the Trail Use Agreement. At

that time the provisions of the NITU become permanent,

depriving plaintiffs of their rights in the land in question.

CONCLUSION

In the case at bar, the City notified the ICC that the

pai ies had reached the Trail Use Agreement on July 5,

1996. Because plaintiffs’ claim was not filed until October

7, 2002 — more than six years after the Agreement was

announced — that claim is barred by the applicable statute

of limitations and must be dismissed.

Accordingly, based on the foregoing, defendant’s

motion to dismiss is granted, and the Clerk of the Court

shall dismiss the complaint without prejudice for lack of

subject matter jurisdiction.

No costs.

App. 51

IN THE UNITED STATES COURT

OF FEDERAL CLAIMS

x*eseeaeue ue eee ReHRe EEE SE

WILLIAM B. CALDWELL, III *

and BEN FRANK BILLINGS, *

III, for Themselves and as se

Representatives of a Class of

Similarly Situated Persons,

Plaintiffs,

No. 02-1347L

(Filed Aug. 11, 2003)

Vv.

THE UNITED STATES,

Defendant.

zs*exzeeonue*e*eeeeeueeoane eek &

* *£ &@ &# & & &

James P. Kelly, Atlanta, GA, for plaintiffs. Jeffrey O.

Bramlett, John E. Floyd, Benjamin E. Fox, and Sarah M.

Shalf, Bondurant, Mixsen & Elmore, LLP, Atlanta, GA of

counsel.

Kristine S. Tardiff, Concord, MH, with whom was

Assistant Attorney General Thomas L. Sansonetti, Wash-

ington, DC, for defendant. Evelyn Kitay, Surface Transpor-

tation Board, of counsel.

ORDER

Plaintiffs on July 15, 2003, filed Plaintiffs’ Motion for

Reconsideration, and To Alter or Amend the Judgment.

The court, by order entered on July 21, 2003, expedited

briefing. Defendant responded on July 28, 2003, and

plaintiffs replied on August 4, 2003.

App. 52

As expressed during the oral argument on June 11,

2003, the court is mindful of the draconian bar of the

statute of limitations in actions against the United States.

Congress has delimited the court’s power to entertain

cases based on considerations of both subject matter and

timeliness, and the appellate courts rigorously have

applied the six-year bar of 28 U.S.C. § 2501 (2002).

Plaintiffs invoke the tolling effect of filing a class

action established in American Pipe and Construction Co.

v. Utah, 414 U.S. 538 (1974), and its progeny, based on the

pendency of a parallel class action in federal district court

in Kansas, Swisher v. United States, No. 98-1352-KHV (D.

Kan., filed Dec. 22, 1998), to shield them as asserted

members of the class who would have been parties had the

Kansas suit been permitted to continue as a class action.

Putting aside the failing argument that the pendency of

the Kansas class action and the July 26, 1999 order

transferring suits to the individual districts in which the

Swisher plaintiffs reside was unknowable to plaintiffs,

they argue that, because their action could have been

brought in federal district court (pleading damages of

$ 10,000.00 or less), they should come within the tolling

umbrella of Swisher. This argument cannot dislodge the

fact that plaintiffs chose an alternate forum with different

jurisdictional requirements. Thus, they stand in the

position of potential members of the Swisher class once

removed, or, as defendant puts it, as a “subclass.” Def.’s Br.

filed July 28, 2003, at 14. Whether plaintiffs, in fact,

should be regarded as a subclass or whether they are

“piggybacking [a] successive class action[] to keep the

claims of individual class members alive despite their

inaction,” id. at 13, no case cited supports plaintiffs’

App. 53

extension of the American Pipe jurisprudence in the

circumstances presented.

The court has reviewed carefully plaintiffs’ motion

under the standards for granting relief called for in both

RCFC 59a) and 60(b\(2). In addition to the foregoing,

defendant has responded thoroughly and accurately to

each of plaintiffs’ arguments, and the court therefore also

denies plaintiffs’ motion based on the reasons set forth in

defendant’s response. Accordingly,

IT IS ORDERED, as follows:

Plaintiffs’ motion for reconsideration is denied.

Christine Odell Cook Miller

Judge

App. 54

United States Court of Appeals

for the Federal Circuit

03-5152

WILLIAM B. CALDWELL, III and BEN FRANK

BILLINGS, III (for themselves and as representative

of a class of similarly situated persons),

Plaintiffs-Appellants,

UNITED STATES,

Defendant-Appellee.

ORDER

A petition for rehearing en banc having been filed by

the APPELLANTS, and a response thereto having been

invited by the court and filed by the APPELLEE, and the

matter having first been referred as a petition for rehear-

ing to the panel that hear the appeal, and thereafter the

petition for rehearing en banc and response having been

referred to the circuit judges who are in regular active

service,

UPON CONSIDERATION THEREOF, it is

ORDERED that the petition for rehearing be, and the

same hereby is, DENIED and it is further

ORDERED that the petition for rehearing en banc be,

and the same hereby is, DENIED.

The mandate of the court will issue on March 30, 2005.

App. 55

FOR THE COURT,

Jan Horbaly

Clerk

Dated: March 23, 2005

App. 56

US Const. amend. V

No person shall be held to answer for a capital, or other-

wise infamous crime, unless on a presentment or indict-

ment of a Grand Jury, except in cases arising in the land

or naval forces, or in the Militia, when in actual service in

time of War or public danger; nor shall any person be

subject for the same offence to be twice put in jeopardy of

life or limb; nor shall be compelled in any criminal case to

be a witness against himself, nor be deprived of life,

liberty, or property, without due process of law; nor shall

private property be taken for public use, without just

compensation.

App. 57

28 U.S.C. § 1295(a)

(a) The United States Court of Appeals for the Federal

Circuit shall have exclusive jurisdiction —

(2) of an appeal from a final decision of a district court of

the United States, the United States District Court for the

District of the Canal Zone, the District Court of Guam, the

District Court of the Virgin Islands, or the District Court

for the Northern Mariana Islands, if the jurisdiction of

that court was based, in whole or in part, on section 1346

of this title, except that jurisdiction of an appeal in a case

brought in a district court under section 1346(a)(1),

1346(b), 1346(e), or 1346(f) of this title or under section

1346(aX2) when the claim is founded upon an Act of

Congress or a regulation of an executive department

providing for internal revenue shall be governed by sec-

tions 1291, 1292, and 1294 of this title;

(3) of an appeal from a final decision of the United States

Court of Federal Claims;

28 U.S.C. § 1346(a)(1) (“Little Tucker Act”)

(a) The district courts shall have original jurisdiction,

concurrent with the United States Court of Federal

Claims, of:

(1) Any civil action against the United States for the

recovery of any internal-revenue tax alleged to have been

erroneously or illegally assessed or collected, or any penalty

claimed to have been collected without authority or any

App. 58

sum alleged to have been excessive or in any 1°*aner

wrongfully collected under the internal-revenue laws;

(2) Any other civil action or claim against the United

States, not exceeding $10,000 in amourt. founded either

upon the Constitution, or any Act of Congress, or any

regulation of an executive department, or upon any ex-

press or implied contract with the United States, or for

liquidated or unliquidated damages in cases not sounding

in tort, except that the district courts shall not have

jurisdiction of any civil action or claim against the United

States founded upon any express or implied contract with

the United States or for liquidated or unliquidated dam-

ages in cases not sounding in tort which are subject to

sections 8(g)(1) and 10(a)(1) of the Contract Disputes Act

of 1978. For the purpose of this paragraph, an express or

implied contract with the Army and Air Force Exchange

Service, Navy Exchanges, Marine Corps Exchanges, Coast

Guard Exchanges, or Exchange Couricils of the National

Aeronautics and Space Administration shall be considered

an express or implied contract with the United States.

28 U.S.C. § 1491(a)(1) (“Tucker Act”)

(a)(1). The United States Court of Federal Claims shall

have jurisdiction to render judgment upon any claim

against the United States founded either upon the Consti-

tution, or any Act of Congress or any regulation of an

executive department, or upon any express or implied

contract with the United States, or for liquidated or unliq-

uidated damages in cases not sounding in tort. For the

purpose of this paragraph, an express or implied contract

with the Army and Air Force Exchange Service, Navy

Exchanges, Marine Corps Exchanges, Coast Guard Ex-

changes, or Exchange Councils of the National Aeronautics

App. 59 -

and Space Administration shall be considered an express

__or implied contract with the United States.

28 U.S.C. §2401(a) Time fer commencing action

against United States.

(a) Except as provided by the Contract Disputes Act of

1978, every civil action commenced against the United

States shall be barred unless the complaint is filed within

six years after the right of action first accrues. The action

of any person under legal disability or beyond the seas at

the time the claim accrues may be commenced within

three years after the disability ceases.

28 U.S.C. § 2501 Time for filing suit.

Every claim of which the United States Court of Federal

Claims has jurisdiction shall be barred unless the petition

thereon is filed within six years after such claim first

accrues.

Every claim under section 1497 of this title shall be barred

unless the petition thereon is filed within two years after

the termination of the river and harbor improvements

operations on which the claim is based.

A petition on the claim of a person under legal disability or

beyond the seas at the time the claim accrues may be filed

within three years after the disability ceases.

A suit for the fees of an officer of the United States shall

not be filed until his account for such fees has been finally

acted upon, unless the Government Accountability Office

fails to act within six months after receiving the account.

App. 60

16 U.S.C. § 1247 State and local area recreation and

historic trails

(d) Interim use of railroad rights-of-way

The Secretary of Transportation, the Chairman of the

Surface Transportation Board, and the Secretary of the

Interior, in administering the Railroad Revitalization and

Regulatory Reform Act of 1976 [45 U.S.C.A. § 801 et seq.],

shall encourage State and local agencies and private

interests to establish appropriate trails using the provi-

sions of such programs. Consistent with the purposes of

that Act, and in furtherance of the national policy to

preserve established railroad rights-of-way for future

reactivation of rail service, to protect rail transportation

corridors, and to encourage energy efficient transportation

use, in the case of interim use of any established railroad

rights-of-way pursuant to donation, transfer, lease, sale, or

otherwise in a manner consistent with this chapter, if such

interim use is subject to restoration or reconstruction for

railroad purposes, such interim use shall not be treated,

for purposes of any law or rule of law, as an abandonment

of the use of such rights-of-way for railroad purposes. If a

State, political subdivision, or qualified private organiza-

tion is prepared to assume full responsibility for manage-

ment of such rights-of-way and for any legal liability

arising out of such transfer or use, and for the payment of

any and all taxes that may be levied or assessed against

such rights-of-way, then the Board shall impose such

terms and conditions as a requirement of any transfer or

conveyance for interim use in a manner consistent with

this chapter, and shall not permit abandonment or discon-

tinuance inconsistent or disruptive of such use.

App. 61

(e) Designation and marking of trails; approval of Secre-

tary of the Interior

Such trails may be designated and suitably marked as

parts of the nationwide system of trails by the States,

their political subdivisions, or other appropriate adminis-

tering agencies with the approval of the Secretary of the

Interior.

49 U.S.C. § 10502 Authority to exempt rail carrier

administration.

(a) In a matter related to a rail carrier providing trans-

portation subject to the jurisdiction of the Board under

this part, the Board, to the maximum extent consistent

‘with this part, shall exempt a person, class of persons, or a

transaction or service whenever the Board finds that the

application in whole or in part of a provision of this part —

(1) is not necessary to carry out the transportation policy

of section 10101 of this title; and

(2) either —

(A) the transaction or service is of limited scope; or

(B) the application in whole or in part of the provision is

not needed to protect shippers from the abuse of market

power.

(b) The Board may, where appropriate, begin a proceed-

ing under this section on its own initiative or on applica-

tion by the Secretary of Transportation or an interested

party. The Board shall, within 90 days after receipt of any

such application, determine whether to begin an appropri-

ate proceeding. If the Board decides not to begin a class

App. 62

exemption proceeding, the reasons for the decision shall be

published in the Federal Register. Any proceeding begun

as a result of an application under this subsection shall be

completed within 9 months after it is begun.

which an exemption granted under this section is effective.

(d) The Board may revoke an exemption, to the extent it

specifies, when it finds that application in whole or in part

of a provision of this part to the person, class, or transpor-

tation is necessary to carry out the transportation policy of

section 10101 of this title. The Board shall, within 90 days

after receipt of a request for revocation under this subsec-

tion, determine whether to begin an appropriate proceed-

ing. If the Board decides not to begin a proceeding to

revoke a class exemption, the reasons for the decision shall

be published in the Federal Register. Any proceeding

begun as a result of a request under this subsection shall

be completed within 9 months after it is begun.

(e) No exemption order issued pursuant to this section

shall operate to relieve any rail carrier from an obligation

to: provide contractual terms for liability and claims which

are consistent with the provisions of section 11706 of this

title. Nothing in this subsection or section 11706 of this

title shall prevent rail carriers from offering alternative

terms nor give the Board the authority to require any

specific level of rates or services based upon the provisions

of section 11706 of this title.

(f) The Board may exercise its authority under this

section to exempt transportation that is provided by a rail |

carrier as part of a continuous intermodal movement.

App. 63

(g) The Board may not exercise its authority under this

section to relieve a rail carrier of its obligation to protect

the interests of employees as required by this part.

49 U.S.C. § 10903 Filing and procedure for applica-

tion to abandon or discontinue

(a1) A rail carrier providing transportation subject to

the jurisdiction of the Board under this part who intends

to —

(A) abandon any part of its railroad lines; or

(B) discontinue the operation of all rail transportation

over any part of its railroad lines, must file an application

relating thereto with the Board. An abandonment or

discontinuance may be carried out only as authorized

under this chapter.

(2) When a rail carrier providing transportation subject

to the jurisdiction of the Board under this part files an

application, the application shall include —

(A) an accurate and understandable summary of the ruil

carrier’s reasons for the proposed abandonment or discon-

tinuance;

(B) a statement indicating that each interested person is

entitled to make recommendations to the Board on the

future of the rail line; and

(C)(i) a statement that the line is available for subsidy or

sale in accordance with section 10904 of this title, (ii) a

statement that the rail carrier will promptly provide to

each interested party an estimate of the annual subsidy

and minimum purchase price, calculated in accordance

App. 64

with section 10904 of this title, and (iii) the name and

business address of the person who is authorized to

discuss the subsidy or sale terms for the rail carrier.

(3) The rail carrier shall —

(A) send by certified mail notice of the application to the

chief executive officer of each State that would be directly

affected by the proposed abandonment or discontinuance;

(B) post a copy of the notice in each terminal and station

on each porticn of a railroad line proposed to be aban-

doned or over which all transportation is to be discontin-

ued;

a newspaper of general circulation in each county in which

each such portion is located;

(D) mail a copy of the notice, to the extent practicable, to

all shippers that have made significant use (as designated

by the Board) of the railroad line during the 12 months

preceding the filing of the application; and

(E) attach to the application filed with the Board an

affidavit certifying the manner in which subparagraphs

(A) through (D) of th

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