Hardy v. United States

WILLIAM C. HARDY & BERTIE ANN HARDY et al., Plaintiffs, v. THE UNITED STATES, Defendant.

No. 14-388L

United States Court of Federal Claims

April 8, 2021

RCFC 56; Cross-Motions for Summary Judgment; Rails-to-Trails; Vacatur and Remand from Federal Circuit; Causation

Elizabeth A. Gepford McCulley, Kansas City, MO, for plaintiffs.

David A. Harrington, United States Department of Justice, Washington, DC, for defendant.

OPINION AND ORDER

SWEENEY, Senior Judge

In this rails-to-trails action, plaintiffs contend that they own real property adjacent to a rail corridor in Newton County, Georgia. They assert that the Central of Georgia Railroad Company ("CGA") and its predecessors held easements for railroad purposes that crossed their land.¹ According to plaintiffs, defendant then authorized the conversion of the railroad rights-of-way into recreational trails pursuant to the National Trail Systems Act ("Trails Act"), conduct that resulted in a taking in violation of the Just Compensation Clause of the Fifth Amendment to the United States Constitution.

In a prior decision, the court held that defendant was liable for a taking with respect to eleven parcels located east of milepost 65.80 ("MP-65.80"). See Pls.' Ex. B, ECF No. 230-2. On appeal, the United States Court of Appeals for the Federal Circuit ("Federal Circuit") vacated that holding and remanded the claims for further consideration in light of its then-recent decision in Caquelin v. United States, 959 F.3d 1360 (Fed. Cir. 2020). Before the court are the parties' cross-motions for summary judgment regarding liability for a temporary taking of the MP-65.80 parcels. The court concludes that defendant is not liable for any taking of these parcels, as explained below. Thus, it grants defendant's motion and denies plaintiffs' motion.

I. BACKGROUND

A. Factual History

The history of this dispute has been extensively chronicled in this court's past decisions and will not be repeated in full. See Hardy v. United States ("Hardy III"), 131 Fed. Cl. 534, 535-37 (2017). Of particular relevance here, CGA filed a verified Notice of Exemption with the United States Surface Transportation Board ("Surface Transportation Board") on July 1, 2013. Central of Georgia Railroad Company-Abandonment Exemption-in Newton County, Ga., 78 Fed. Reg. 43,273 (July 19, 2013); see also Corletto Decl. ¶ 4. In this notice, CGA requested authority to abandon "approximately 14.90 miles of rail line between milepost E 65.80 (at the point of the line's crossing of Route 229 in Newborn) and milepost E 80.70 (near the intersection of Washington Street SW., and Turner Lake Road SW., in Covington), in Newton County, Ga." 78 Fed. Reg. at 43,273. The notice was accompanied by a map of the rail line, which depicted MP-65.80 as being located in Newborn, as the description indicated. Pls.' Ex. A at 12, ECF No. 103-1. When the Surface Transportation Board issued the Notice of Interim Trail Use or Abandonment ("NITU") on August 19, 2013, it copied this description of MP-65.80 verbatim. Cent. of Ga. R.R. Co.-Abandonment Exemption-in Newton Cnty., Ga., No. AB 290 (Sub-No. 343X), 2013 WL 4425647 (S.T.B. Aug. 19, 2013).

However, CGA subsequently determined that the Notice of Exemption and NITU contained an error—specifically, that MP-65.80 is not located at "the point of the line's crossing of Route 229 in Newborn" as it had first stated. Corletto Decl. ¶ 5. Instead, the descriptive parenthetical should have indicated that the milepost is located at "a point just east of the Ziegler Road crossing west of downtown Newborn." Id. ¶ 7. CGA notified the Surface Transportation Board of this mistake on October 14, 2016:

To be clear, the mileposts listed in the Notice are, and remain, correct. The total length of the line of approximately 14.90 miles is unchanged, as are the zip codes and other relevant information. The only mistake was the location point on the map attached to the Notice and the parenthetical references to milepost E-65.80.

Def.'s App. A at 2, ECF No. 96-1. The Surface Transportation Board issued a public notice regarding its correction of the NITU on November 18, 2016. Cent. of Ga. R.R. Co.—Abandonment Exemption—in Newton Cnty., Ga., No. AB 290 (Sub-No. 343X), 2016 WL 6839539, at *1-2 (S.T.B. Nov. 18, 2016). The eleven parcels at issue are adjacent to the rail line between the location of MP-65.80 described in the original NITU and the location of MP-65.80 described in the corrected NITU.

To explain the confusion created by the contradictory description of MP-65.80's location, defendant offers the declaration of Jacqueline Decker Corletto, Assistant Vice President of Strategic Planning and former Director of Strategic Planning for Norfolk Southern Corporation.²Corletto Decl. ¶ 1. Among other responsibilities, Ms. Corletto was tasked with "evaluating the reach of [CGA's] network including the profitability and capacity of [CGA's] lines" and "evaluating whether certain lines may be candidates for discontinuation of service or abandonment." Id. ¶ 2. She states that CGA "was not seeking authority to abandon the railroad corridor east of MP 65.80 (or its own real property rights in the corridor east of MP 65.80) when it filed its Notice of Exemption with the [Surface Transportation Board] or when the NITU was subsequently issued by the [Surface Transportation Board]." Id. ¶ 8. She similarly avers that CGA "did not intend to abandon the rail line east of MP 65.80 or any easements that it possessed over and across land east of MP 65.80, and [CGA] would not have abandoned that portion of the line in the absence of the NITU." Id. ¶ 9; accord Corletto 2017 Dep. 19:8-21.

Ms. Corletto further indicates that "the railroad corridor east of MP 65.80 . . . has at all pertinent times . . . been the subject of an active lease to a third party." Corletto Decl. ¶ 10. In April 2008, CGA agreed to lease this portion of its line to Squaw Creek Southern Railroad ("SCS"), a Class III rail carrier. Squaw Creek Southern Railroad, Inc.-Lease & Operation Exemption-Central of Georgia Railroad Company, 74 Fed. Reg. 47,855 (Sept. 17, 2009); Corletto 2017 Dep. 14:9-20. CGA changed operators from SCS to CaterParrott Railnet, LLC ("CaterParrott"), another Class III rail carrier, in 2013.³ CaterParrott Railnet, LLC-Change in Operators Exemption-Rail Lines of Central of Georgia Railroad Company, 78 Fed. Reg. 75,959 (Dec. 13, 2013). CaterParrott's Change in Operators Exemption, filed with the Surface Transportation Board on November 29, 2013, correctly described the location of MP-65.80. Parrott Dep. Ex. 2. CaterParrott began discussing a potential lease with CGA between April and July 2013, and the lease was entered into in October 2013. Parrott Dep. 17:9-18, 18:13-25; see also Corletto 2017 Dep. 23:7-11 (indicating that negotiations between CGA and CaterParrott began in the summer of 2013). CaterParrott's lease began on January 1, 2014, once the Surface Transportation Board's customary notice period had expired. Parrott Dep. 21:11-21. CaterParrott's lease expires in 2023. Corletto 2017 Dep. 24:14-16.

Christopher Parrott, co-CEO of CaterParrott, characterized the condition of the disputed portion of rail line as "active" and, based on Federal Railroad Administration standards, in "accepted status."⁴ Parrott Dep. 24:23-25:19, 26:6-27:3. Once the lease began, CaterParrott did "an extensive amount of work" on the track. Id. at 21:22-22:5. It spent over $500,000 for work such as "crosstie replacement, rock[] clearing, vegetation control, [and] right-of-way work." Id. at 22:10-13. CaterParrott stored cars on the line for one of its customers, and it anticipated adding a new customer in the near future. Id. at 22:14-23.

As of 2017, railroad cars were not currently running over the line east of MP-65.80. Id. at 23:7-15. Certain cities along the line, including Newborn, had been granted permission to pave over some of the railroad crossings with asphalt, with the understanding that the asphalt would be removed if the railroad so required. Id. at 23:15-23. Because of the asphalt, CaterParrott had not run trains over the line, although "other track equipment" was sometimes used on the line.⁵ Id. at 27:7-12. In fact, in 2017, the city of Newborn was in the process of removing the asphalt to allow use of the line. Id. at 23:15-24:4. Additionally, at some point in the fall of 2013, a contractor hired to remove certain portions of track mistakenly removed track east of MP-65.80. Corletto Dep. 60:3-8, Feb. 2, 2018 ("Corletto 2018 Dep."). Ultimately, "[w]hoever the operator was at the time had recognized it, [and] worked with [CGA] and the contractor to put it back within a month or two at the most."⁶ Id. at 60:5-8.

B. Procedural History

The court issued several decisions in this case prior to appeal. After an initial decision on partial summary judgment, Hardy v. United States ("Hardy I"), 127 Fed. Cl. 1 (2016), the court issued two decisions in response to the parties' motions for reconsideration, Hardy v. United States ("Hardy II"), 129 Fed. Cl. 513 (2016); Hardy III, 131 Fed. Cl. at 534. Then, after conducting a trial on damages, the court issued decisions regarding the proper interest rate, Hardy v. United States, 138 Fed. Cl. 344 (2018), and the amount of just compensation owed to plaintiffs, Hardy v. United States, 141 Fed. Cl. 1 (2018). Defendant appealed, asserting that the court erred by finding that (1) plaintiffs had a cognizable property interest in all of the parcels at issue and (2) the NITU effected a temporary taking of the MP-65.80 parcels. Hardy v. United States ("Hardy VI"), 965 F.3d 1338, 1341 (Fed. Cir. 2020).

After this court had issued all of its decisions, but before the appeal was resolved, the Federal Circuit issued its decision in Caquelin, 959 F.3d at 1360. In that rails-to-trails case, the Federal Circuit elaborated on the role a NITU plays in the accrual of a claim. Id. at 1370-72. Reviewing Caldwell v. United States, 391 F.3d 1226 (...