     In the United States Court of Federal Claims
                                 No. 14-221L
                           (Filed: March 11, 2016)

********************
TODD HOCHSTETLER AND
KARISSA HOCHSTETLER,
For Themselves and As
Representatives of a Class of                    National Trails System
Similarly Situated Persons,                      Act; 16 U.S.C. §§ 1241-
                                                 1251; Fifth Amendment
                     Plaintiffs,                 Takings Clause;
                                                 Centerline presumption;
v.                                               language of deed

THE UNITED STATES,


           Defendant.
********************

      Steven M. Wald and Michael J. Smith, St. Louis, MO, with whom were
Thomas S. Stewart and Elizabeth G. McCulley, Kansas City, MO, and J.
Robert Sears, St. Louis, MO, for plaintiff.

      Cullen S. Shearburn, United States Department of Justice, Environment
& Natural Resources Division, Natural Resources Section, Washington, DC,
with whom was John C. Cruden, Assistant Attorney General, Environment &
Natural Resources Division, for defendant.

                              ______________

                                 OPINION
                              _______________

       Plaintiffs, Todd and Karissa Hochstetler (“the Hochstetlers”), Jane
Christopherson, Hunter Grain Company, David A. Burchill and Rebecca J.
Burchill (“the Burchills”), the owners of several tracts of land in Cass County,


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North Dakota, bring this case pursuant to the Takings Clause of the Fifth
Amendment. Plaintiffs claim that their land is adjacent to and underneath
areas of the railroad line that Burlington Northern Santa Fe Railway Company
(“BNSF”) acquired as easements for railroad purposes, and therefore
conversion of the railroad line to a recreational trail through operation of the
National Trails System Act (“Trails Act”), 16 U.S.C. §§ 1241-1251 (2012),
constituted a taking of plaintiffs’ land without just compensation. Pending are
the parties’ cross-motions for partial summary judgment on liability. The
motions are fully briefed, and oral argument was held on December 14, 2015.
We held the matter in abeyance for a period while the parties unsuccessfully
pursued settlement. For the reasons stated below, we deny plaintiffs’ motion
for summary judgment, and we grant defendant’s cross-motion for summary
judgment.

                                BACKGROUND

A. Statutory Background

        Section 1247(d) of the Trails Act prompts certain federal agencies to
encourage the conversion of unused railroad rights-of-way into recreational
trails by state and local governments or private entities. See 16 U.S.C. § 1247
(2012). One of these federal agencies, the Surface Transportation Board
(“STB”), is tasked with regulating the construction, operation, and
abandonment of railroad lines in the United States. Pursuant to its authority,
the STB promulgated regulations governing the abandonment or
discontinuance of rail lines. 49 C.F.R. §§ 1152.1-1152.60 (2015). A rail
operator seeking abandonment or discontinuance of the use of a rail line
pursuant to these regulations must first file an application with the STB. 49
U.S.C. § 10903 (2012).

        If a rail operator so chooses, however, it may seek an exemption from
filing an abandonment application. 49 C.F.R. § 1152.50. Instead of pursuing
abandonment, the rail operator is permitted to negotiate with a state,
municipality, or private entity to assume responsibility for operating the
railroad right-of-way as a recreational trail. The entity, if it is willing to assume
financial responsibility, is referred to as an Interim Trail Sponsor and must file
a Statement of Willingness to Assume Financial responsibility. Id. § 1152.29.
The STB then issues a Notice of Interim Trail Use (“NITU”). Id. This notice
results in a stay of the abandonment proceedings and allows the parties 180
days to enter into an interim trail use agreement. Id. Upon the finalization of

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an interim trail use agreement, abandonment proceedings are suspended and
rail service is discontinued to allow for conversion of the right-of-way into a
recreational trail. This process of staying the abandonment process and
converting the right-of-way into a recreational trail is known as “railbanking.”

B. Factual Background

        BNSF, through its predecessor, Northern Pacific Railroad Company
(“Northern Pacific”), acquired a segment of the rail corridor in Cass County,
North Dakota between milepost 68.10 in Arthur, North Dakota and milepost
75.50 in Hunter, North Dakota (“the rail line”). On November 2, 2011, BNSF
filed an abandonment exemption relating to the railroad line in Cass County,
North Dakota. The City of Arthur Park Board and the City of Hunter Park
Board (“the Park Boards”) subsequently filed a petition with the STB
indicating that they were willing to assume financial responsibility under the
Trails Act. BNSF responded to the Park Boards’ petition, stating that it was
ready to begin negotiating an interim trail use agreement. The STB filed an
NITU relating to the railroad line on December 19, 2011. On September 30,
2013, BNSF notified the STB that it and the Park Boards had reached a
railbanking agreement for the railroad line.

                                DISCUSSION

       There are five parcels at issue in this case: two belonging to Jane
Christopherson, one belonging to the Hochstetlers, one belonging to the
Burchills, and one belonging to Hunter Grain Company.1 Plaintiffs claim
these parcels lie adjacent to and underneath segments of the rail line in which
BNSF held easements for railroad purposes.

        A portion of the parties’ disagreement centers around the type of
property interest acquired by BNSF’s predecessor-in-interest. Plaintiffs argue
that the rail line adjacent to Jane Christopherson’s land (Parcels 2A and 2B)
was acquired only through the General Railroad Right of Way Act of 1875, 43


1
  Defendant labels the parcels as Claims 1, 2A, 2B, 3, and 4. Claims 2A and
2B refer to the parcels owned by plaintiff Jane Christopherson. Claim 1 refers
to the parcel owned by the Burchills, Claim 3 refers to the parcel owned by the
Hochstetlers, and Claim 4 refers to the parcel owned by Hunter Grain
Company. We will use these labels in our discussion.

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U.S.C. § 934 (2012), and that the rail line adjacent to the parcels belonging to
the other three plaintiffs (1, 3 and 4) was acquired as a prescriptive easement
by use, i.e., resulting not in a fee but in an easement. Under this view of the
facts, the result would have been the railroad’s acquisition of easements for
railroad purposes adjacent to land which plaintiffs eventually purchased.
Plaintiffs then rely on North Dakota’s “centerline” presumption,2 under which
grants to landowners adjoining easements extend to the center of the easement.
Thus, according to plaintiffs, because Jane Christopherson was conveyed land
bounded by the rail line, she owns to the center of the rail line. When the
railroad use ended, therefore, conversion of the railroad line into a recreational
trail exceeded the scope of the easements, thus triggering a taking of plaintiffs’
underlying land.

       Defendant argues that the centerline presumption is inapplicable here.
As to Claims 2A and 2B, it contends that the railroad’s predecessor-in-interest,
Northern Pacific Railroad, acquired title by fee to the land adjacent to plaintiff
Christopherson through the Land Act of 1864, 13 Stat. 365, which gave the
railroad a limited fee subject to a reversionary interest in the United States.
When the land was no longer used for railroad purposes, it reverted to the
United States. Therefore, there could not have been a taking from plaintiff
because she never acquired land adjacent to an easement.

        As to Claims 1, 3, and 4, defendant has alternative arguments. First,
that the railroad right of way was acquired by BNSF through adverse
possession, and therefore BNSF held the parcels in fee simple. Alternatively,
defendant argues that, even if BNSF merely possessed a prescriptive easement
over the rail line proximate to Claims 1, 3, and 4, the claims still fail because
plaintiffs’ land does not actually adjoin the rail corridor due to the interposition
of a highway owned in fee by the state of North Dakota.

A. Claims 2A and 2B

      As to these parcels, two undisputable facts dictate a result in favor of
defendant: BNSF’s predecessor-in-interest acquired all of section 35 in fee in


2
 This presumption provides that “a conveyance by an owner of land bounded
by a street or a highway carries the fee to the center of the way unless the
contrary is shown.” Welsh v. Monson, 79 N.W.2d 155, 157 (N.D. 1956); N.D.
CENT. CODE § 47-10-10 (1957).

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1864; and plaintiff’s land lies in section 35. That fee interest cannot be
divested absent a transfer from the railroad. Consequently, the fact that the
railroad’s predecessor-in-interest may have acquired an easement for railroad
purposes in section 363 through the General Railroad Right of Way Act of
1875 (the railroad was apparently laid on the border of sections 35 and 36) is
irrelevant. So long as plaintiff Christopherson acquired land adjacent to the
fee portion of the rail corridor, she does not benefit from the centerline
presumption.4

B. Claims 1, 3, and 4

        There is no question that North Dakota State Highway 18 physically
separates plaintiffs’ land from the rail corridor. Irrespective of whether the
railroad acquired an easement, the parties agree that defendant succeeds if the
state owns the highway in fee rather than as an easement. This is the case
because plaintiffs depend on the centerline presumption, by which, if the
presence of the highway is ignored (if it is only an easement), plaintiffs own
land adjacent to the railroad. If the rail corridor is an easement as well,
plaintiffs own to the centerline of the railroad right of way and reacquire use
when the railroad ceases operation. On the other hand, if defendant is correct
and the state owns Highway 18 in fee, then plaintiffs’ land is not adjacent to
the railroad corridor and they do not benefit from the centerline presumption.
We do not need to reach the nature of the railroad interest, in other words, if

3
 Plaintiffs contend that the rail corridor lies in National Archives and Records
Administration (“NARA”) Parcel No. 48, which lies in Township 143 North,
Range 52 West, Section 36. According to plaintiffs, Parcel No. 48 was
acquired via the Act of 1875, which the United States Supreme Court
previously held results in the grant of an easement.
4
   See 65 Am. Jur. 2d Railroads § 35 (“Absent a reservation or contrary
evidence, the title of the fee subject to easements in a railroad right-of-way is
presumed to be in the abutting owners and the title of each extends to the
center of the right-of-way.”) (emphasis added). We are unwilling, however,
to divest the railroad or its successors of their clear original fee interest in
absence of a deed conveying the land under the right-of-way in section 35 to
plaintiff or her predecessors using fee language, set out in metes and bounds.
Without such an instrument, we are left with an original fee interest in the
railroad, and nothing supporting plaintiff’s claim other than the centerline
presumption, which does not operate in this scenario.

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Highway 18 keeps plaintiffs’ land from being adjacent to the railroad.5

       North Dakota law provides us with useful presumptions which lead to
the conclusion that Highway 18 was conveyed in fee. First, plaintiffs are
correct that, as a general rule, in the absence of a statute expressly providing
for acquisition by fee or a deed conveying a fee, the right acquired by the
public in land for highway purposes is ordinarily an easement. Rutten v. Wood,
57 N.W.2d 112, 113 (N.D. 1953); Lalim v. Williams County, 105 N.W. 2d 339,
345 (N.D. 1960). A competing presumption, however, is that a fee simple is
intended to pass by a grant of real property unless it appears from the grant that
a lesser estate was intended. Lalim, 105 N.W. 2d at 344; N.D. CENT. CODE §
47-10-13 (1943).

       Here, defendant presents us with a series of deeds which indicate that
North Dakota’s interest in Highway 18 was acquired by through the language
of fee simple conveyance.6 Absent any other considerations, they overcome
the common law presumption in favor of creation of an easement only in
transfers for highway purposes.

      In response, plaintiffs direct us to Lalim, where the Supreme Court of
North Dakota was tasked with determining whether a very similar deed to
Williamson County, North Dakota, made to expand an existing public
highway, transferred an easement or a fee. The Lalim court ultimately
concluded that the land was conveyed as an easement.

      Lalim, however, is distinguishable. In Lalim, although the deeds
conveying the land under the highway contained the same language as the


5
 We suggested to the parties that this question be referred to the North Dakota
Supreme Court for an advisory opinion. They demurred.
6
  See Def.’s Ex. 13, which conveys the land constituting Highway 18 to the
state of North Dakota uses the following language: “ [grantor] does by these
presents GRANT, BARGAIN, SELL and CONVEY unto the [grantee], its
successors and assigns, FOREVER, all that tract or parcel of land lying and
being in the County of Cass and State of North Dakota, and described as
follows . . . .” This language indicates intent to convey a fee simple. See EOG
Resources, Inc. v. Soo Line R. Co., 867 N.W. 2d 308, 317 (N.D. 2015). There
is nothing about this language that suggests the interest conveyed was limited
to highway purposes. See id.

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deeds at issue here, the land was conveyed in order to expand an existing
highway, which the state held as an easement. Therefore, conveying the land
for the highway expansion as a fee interest would create the odd result of
putting an easement in between two tracts of land held in fee by the plaintiff.
Id. at 346-47. The Lalim court only determined that the deed at issue was
sufficiently ambiguous to permit judicial construction “when considered with
the plat to which it refers.” Id. at 346.

        Here, on the other hand, there is no reason to believe that the parties to
the highway deeds intended anything other than a fee. Accordingly, because
Claims 1,3, and 4 are separated from the rail corridor by Highway 18, which
the state of North Dakota owns in fee simple, the claims do not adjoin the rail
corridor, the centerline presumption does not apply,7 and plaintiffs have no
cognizable interest in the land underlying the rail corridor. It is therefore
irrelevant whether the railroad held the corridor as an easement or in fee.
Accordingly, summary judgment is granted for defendant as to Claims 1, 3,
and 4.

       The parties’ competing suggestions that we turn to related statutory
provisions are not helpful. Defendant relies on North Dakota Century Code
section 24-01-32 which appears to require that states acquire a fee simple
interest in highways.8 As plaintiffs point out, however, section 24-01-32


7
    See supra Section A discussing Claims 2A and 2B.
8
    North Dakota Century Code section 24-01-32 states the following:

         For the purposes of chapter 177 of the 1953 Session Laws, the
         highway authorities of the state, or any county, or municipality
         may acquire private or public property and property rights for
         controlled-access facilities and service roads, including rights of
         access, air, view, lights, and such advertising rights outside of
         the right of way as may be determined by the director to be in
         the public interest, by gift, devise, purchase, or condemnation in
         the same manner as such units are now or hereafter may be
         authorized by law to acquire such property or property rights in
         connection with highways and streets within their respective
         jurisdictions. All property rights acquired under the provisions
         of chapter 177 of the 1953 Session Laws must be in fee simple,
         provided, however, as to any and all lands acquired or taken for

                                         7
appears to apply only to collateral acquisitions, i.e., acquisitions of additional
property, which is not applicable in this case.

       Plaintiffs’ reliance on North Dakota Century Code section 32-15-03.2,
that highways can only be dedicated as easements,9 is equally unhelpful. As
defendant points out, section 32-15-03.2 is contained within a chapter of the
North Dakota Century Code titled “Eminent Domain” and thus does not apply
where the highway is acquired by deed, as was the case here.

                                  CONCLUSION

        For the reasons set forth above, plaintiffs do not have a property interest
in the land underlying the railroad rights of way at issue. We therefore grant
defendant’s motion for summary judgment and deny plaintiffs’ motion for


         highway, road, or street purposes, they may not obtain any rights
         or interest in or to the oil, gas, or fluid minerals underlying said
         lands. In connection with the acquisition of property or property
         rights for any controlled-access facility or portion thereof, or
         service road in connection therewith, the state, county, or
         municipal highway authority may, in its discretion, acquire an
         entire lot, block, or tract of land, if, by so doing, the interests of
         the public will be best served, even though said entire lot, block,
         or tract is not immediately needed for the right of way proper.

N.D. CENT. CODE § 24-01-32 (1953).
9
    North Dakota Century Code section 32-15-03.2 states that

         No transfer to the state of North Dakota or any of its political
         subdivisions of property for highway purposes shall be deemed
         to include any interest greater than an easement, and where any
         greater estate shall have been so transferred, the same is hereby
         reconveyed to the owner from which such land was originally
         taken, or to the heirs, executors, administrators, or assigns of
         such owner. Such reconveyance shall be subject to any existing
         contracts or agreements covering such property, and all rights
         and benefits thereof shall accrue to the grantee.

N.D. CENT. CODE § 32-15-03.2 (1953).

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summary judgment. The clerk is directed to enter judgment accordingly. No
costs.

                                       s/Eric G. Bruggink
                                       ERIC G. BRUGGINK
                                       Judge




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