[00:00:00] Speaker 02:
First case for argument this morning is 191385, Kaplan versus United States.

[00:00:05] Speaker 02:
Ms.

[00:00:05] Speaker 02:
Kranz, whenever you're ready.

[00:00:16] Speaker 00:
May it please the court.

[00:00:17] Speaker 00:
My name's Erica Kranz.

[00:00:18] Speaker 00:
I represent the United States in this case.

[00:00:20] Speaker 00:
And with me is Edward Thomas, also from the Justice Department.

[00:00:23] Speaker 00:
This is not the kind of Trails Act case that this court usually sees.

[00:00:28] Speaker 00:
Usually, you have a rail corridor that's actually been converted to a public trail, triggering Section 8D of the Trails Act.

[00:00:35] Speaker 00:
But in this case, there was no trail conversion.

[00:00:38] Speaker 00:
There was just a need to.

[00:00:39] Speaker 00:
That's a regulatory notice by the Service Transportation Board that indicates that the railroad and a would-be trail sponsor are interested in negotiating about possible trail conversion.

[00:00:50] Speaker 00:
But because those negotiations failed, there was no child conversion, no triggering of Section 8D, and no physical taking.

[00:00:59] Speaker 04:
Did the issuance or the effect of the NITU as of July 5th preclude end of the easement for the 180 days?

[00:01:13] Speaker 00:
No.

[00:01:17] Speaker 00:
First, the railroad has a perpetual easement on this land.

[00:01:19] Speaker 04:
It is not required to abandon its... Did it preclude the railroad if the railroad had wanted to on July 6th from abandoning it and having the easement end?

[00:01:34] Speaker 04:
The railroad could not cause me... I didn't think this was a disputed point.

[00:01:39] Speaker 00:
No, I just want to be clear.

[00:01:40] Speaker 00:
I think there's an error in the premise of your question.

[00:01:45] Speaker 00:
The need to did prevent the railroad from consummating abandonment during the term of the need to.

[00:01:51] Speaker 00:
However, the railroad did not want to abandon.

[00:01:55] Speaker 00:
The railroad voluntarily entered into the need to.

[00:01:58] Speaker 00:
So the railroad, by saying, yes, I will negotiate, that meant the railroad was affirmatively indicating it was not prepared to consummate abandonment at that point.

[00:02:09] Speaker 00:
The railroad did not have to consummate abandonment at any point.

[00:02:13] Speaker 02:
Is there any indication that it would not have consummated abandonment in the absence of the NITU?

[00:02:23] Speaker 00:
The railroad agreed to the NITU.

[00:02:25] Speaker 02:
So in the absence of a NITU, can we assume without if there's no other indication in the record

[00:02:36] Speaker 02:
that the railroad would have been free to abandon it during that period of time?

[00:02:41] Speaker 00:
It would have been free to, but there was no requirement that it do so.

[00:02:45] Speaker 00:
And indeed, sometimes railroads change their mind and don't consummate abandonment.

[00:02:49] Speaker 02:
When the- What do you mean change their mind?

[00:02:52] Speaker 02:
I mean, the railroad was free, in the absence of the NITU, to consummate abandonment during the period that was otherwise now covered by the NITU.

[00:03:02] Speaker 02:
Is that right?

[00:03:04] Speaker 00:
It would have been, yes.

[00:03:09] Speaker 02:
But we don't know anything more than that.

[00:03:12] Speaker 00:
That's right.

[00:03:13] Speaker 00:
We don't know if the railroad would have consummated at some point during the NITU.

[00:03:21] Speaker 00:
In other words, earlier.

[00:03:22] Speaker 00:
We don't know if it would have done so on the exact same date that it did do so.

[00:03:27] Speaker 00:
We don't know if perhaps something else would have happened.

[00:03:30] Speaker 00:
There are plenty of these cases where the railroad initiates abandonment proceedings.

[00:03:35] Speaker 00:
It means it obtains permission to abandon, but then it does not do so.

[00:03:39] Speaker 00:
Or sometimes the railroad seeks extensions of time to consummate abandonment.

[00:03:44] Speaker 00:
So for instance, there are another handful of cases where a need to was in place for one year.

[00:03:50] Speaker 00:
Trail negotiations failed, and then the railroad sought several extensions of time to consummate abandonment before it did ultimately do so.

[00:04:00] Speaker 00:
In that case, how could the need to have extended the time of the railroad's ultimately abandonment when the railroad otherwise sought an extension of time for that abandonment?

[00:04:10] Speaker 00:
That is entirely the railroad's right.

[00:04:13] Speaker 03:
But in this case, there was no request for an extension.

[00:04:18] Speaker 03:
And I guess the question that's troubling me, and perhaps my colleagues, is to what extent did the presence of the NITU cause any delay in what would have otherwise happened in the abnormal abandonment process?

[00:04:38] Speaker 00:
It is not clear that it caused any delay whatsoever.

[00:04:41] Speaker 03:
And how can there be a taking?

[00:04:43] Speaker 00:
There cannot be a taking.

[00:04:44] Speaker 00:
That's why we're here, because we think this result is

[00:04:48] Speaker 00:
Absolutely incorrect.

[00:04:51] Speaker 02:
Well, we don't know.

[00:04:51] Speaker 02:
I mean, the bottom line is we don't know.

[00:04:54] Speaker 02:
I mean, there might be instances where we've got the railroad just sending everybody a letter and saying, hey, I'm not really planning to do this unless I'm forced till sometime in the future.

[00:05:06] Speaker 02:
Or alternatively, we could have the railroad sending a letter like, in the absence of an NITU, I would have banned this on day one.

[00:05:13] Speaker 00:
But again, the railroad.

[00:05:14] Speaker 02:
Right?

[00:05:14] Speaker 02:
I mean, we don't know.

[00:05:15] Speaker 00:
The railroad can always decline the need to.

[00:05:19] Speaker 00:
It doesn't have to negotiate.

[00:05:21] Speaker 00:
So the railroad has invited this extension of its abandonment deadline, if you will, just the same way it can always seek an extension of time to abandonment.

[00:05:33] Speaker 04:
without this whole rails to trails process decided on its own, we sure would love this to be a trail.

[00:05:42] Speaker 04:
That wouldn't have stopped the effect of, under Iowa law, of abandonment and return of the easement where what it wanted to do was wholly outside the purpose of the

[00:06:03] Speaker 04:
right of way granted by condemnation.

[00:06:06] Speaker 00:
That's a trail conversion, hypothetical.

[00:06:08] Speaker 00:
That's Purcell, right?

[00:06:09] Speaker 00:
And we're not asking you to change the law when there's actually a trail conversion.

[00:06:15] Speaker 04:
I'm just focusing on your repetition of the idea that the railroad invited this.

[00:06:23] Speaker 04:
So it invited in the absence of the Rails to Trails program would have been irrelevant under Iowa law.

[00:06:33] Speaker 04:
We would like somebody else to have this, even though we're completely done with the rail use.

[00:06:41] Speaker 04:
That wouldn't change the return of the full property right under Iowa law.

[00:06:50] Speaker 00:
I think actually you've clued into something here that's important because the railroad saying we would like something to happen does not itself trigger the trail conversion.

[00:06:58] Speaker 00:
It wouldn't trigger setting aside the, you know, STB's plenary authority to regulate rail abandonment.

[00:07:04] Speaker 00:
It wouldn't trigger the expiration of the easement.

[00:07:06] Speaker 00:
It would only be the actual trail conversion, the expansion of the easement, the allowing uses that are inconsistent with the railroad's perpetual use.

[00:07:15] Speaker 04:
My understanding is that under the Iowa statute, taking up the

[00:07:19] Speaker 04:
the actual rails plus permission to abandon automatically ends the easement.

[00:07:31] Speaker 04:
Is that wrong?

[00:07:32] Speaker 00:
That is wrong, because the STB- I said under Iowa law.

[00:07:37] Speaker 00:
Right.

[00:07:38] Speaker 00:
But our view is that federal law has entirely preempted abandonment of these

[00:07:46] Speaker 00:
the specific type of railroad easement under state law.

[00:07:50] Speaker 00:
So setting aside the Trails Act, if a railroad wants to abandon, even if the rail corridor has been basically not used for several years.

[00:07:59] Speaker 04:
The STB on June 5th said it's a go to abandon as of July 5th, except for the possibility that somebody might come in and

[00:08:13] Speaker 04:
and what happens starting in later June, get this trails process going.

[00:08:19] Speaker 00:
That's not correct.

[00:08:20] Speaker 00:
What the STB said is, railroad, you have permission to consummate abandonment within the next year if you wish.

[00:08:28] Speaker 00:
It was not required.

[00:08:29] Speaker 00:
Let me state it more precisely.

[00:08:30] Speaker 04:
The STB said, you have federal authority to abandon but for the process of rail.

[00:08:36] Speaker 04:
That, plus taking up the rails under Iowa law, would have ended the easement.

[00:08:44] Speaker 00:
No, I don't believe so.

[00:08:46] Speaker 00:
Not until the railroad has consummated abandonment, which means taking all affirmative steps, not just taking up the rails, fulfilling any other conditions that are placed on it, and giving notice to the STB that has consummated abandonment.

[00:09:00] Speaker 04:
Can I ask you this question?

[00:09:01] Speaker 04:
I think you agree, but in any case, I think it's true that but for the NITU temporarily prohibited an abandonment.

[00:09:16] Speaker 04:
That's the kind of situation that in other areas of law, and I think what you're talking about is, well, maybe there was no harm because the railroad wouldn't have abandoned anyway.

[00:09:28] Speaker 04:
My general sense, tell me if you have a different view, is that in other areas of law like inevitable discovery or independent source in Fourth Amendment or the two hunter situation in tort law, when the defendant that actually causes something in the sense of here prohibiting an abandonment for a while says no harm because it would have occurred anyway, the defendant has the burden

[00:09:55] Speaker 04:
of showing that independent thing, which would mean here that the government would have the burden of getting evidence from the railroad that it would not have abandoned this any time before, it was like January 1st when the NITU ended.

[00:10:11] Speaker 04:
That's right.

[00:10:12] Speaker 04:
But there's no such proof.

[00:10:15] Speaker 00:
I'm not familiar with those standards that you're referring to.

[00:10:19] Speaker 04:
Well, there's this weird absence of evidence on this question.

[00:10:22] Speaker 04:
What would the railroad in fact have done here?

[00:10:25] Speaker 04:
And it seems quite right that if we knew the railroad would not have abandoned, then the prohibition, the federal prohibition on abandonment starting July 5, wouldn't have done anything.

[00:10:36] Speaker 04:
But we don't know that.

[00:10:37] Speaker 00:
Again, the government hasn't prohibited the railroad from doing anything.

[00:10:42] Speaker 00:
The railroad invited this.

[00:10:43] Speaker 00:
The railroad said, yes, I will.

[00:10:45] Speaker 00:
It's the same as any other decision by the railroad to delay its abandonment for any other reason, which it has the complete right to do.

[00:10:54] Speaker 00:
Not only does it have a perpetual easement, it can hold onto this basically forever,

[00:10:59] Speaker 00:
But it has complete discretion over when to initiate abandonment proceedings, and also when to consummate them.

[00:11:08] Speaker 00:
And that consummation of abandonment, that's the definitive proof that the railroad intended to abandon it.

[00:11:16] Speaker 02:
Just following up on Judge Toronto, I guess I'm not clear on what your reaction is to what he was asking about.

[00:11:22] Speaker 02:
If we had a letter from the railroad that said,

[00:11:26] Speaker 02:
I'm abandoning, I plan to consummate on such and such a date in the absence of an NITU.

[00:11:34] Speaker 02:
Wouldn't that be sufficient for us to say that, yes, it was the NITU that caused the continuation of this process?

[00:11:43] Speaker 00:
Perhaps then you would have a but for.

[00:11:45] Speaker 00:
We certainly don't have that in this case.

[00:11:48] Speaker 00:
Whose burden it is to produce it, I don't know.

[00:11:49] Speaker 00:
I mean, the plaintiffs certainly haven't produced any evidence.

[00:11:52] Speaker 02:
Well, does it matter?

[00:11:52] Speaker 02:
Do you agree that it matters?

[00:11:54] Speaker 02:
I mean, that one should decide that question, because it could be relevant or dispositive to what we've got before us.

[00:12:01] Speaker 02:
I think you've kind of acknowledged that.

[00:12:03] Speaker 02:
that yes, if we had evidence one way or the other, it would arguably be dispositive.

[00:12:10] Speaker 02:
So you're right.

[00:12:12] Speaker 02:
I don't know that we've concluded specifically who has the burden, but that's the question, right?

[00:12:19] Speaker 00:
I suppose it could be.

[00:12:21] Speaker 00:
I still resist the characterization that the government has prevented the railroad from doing something here, since again, the railroad chose to negotiate.

[00:12:32] Speaker 00:
And the railroad has complete discretion over whether and when to abandon its rail line.

[00:12:40] Speaker 00:
I mean, the other part of that is that taking this all the way back to Purcell, remember, the blocking of reversionary interests in Purcell, it was the trail conversion.

[00:12:51] Speaker 00:
And we don't have that here.

[00:12:53] Speaker 00:
Any expanded use, we don't have any entry of third parties here.

[00:12:59] Speaker 00:
There's no change in status of the railroad's easement.

[00:13:03] Speaker 00:
And so Caldwell is what we think the source of this confusion is.

[00:13:13] Speaker 00:
And Caldwell was a trail conversion case.

[00:13:17] Speaker 00:
But this court set the accrual of that claim at the need to.

[00:13:21] Speaker 00:
And we think that that's the problem.

[00:13:23] Speaker 00:
Caldwell said the need to was the only government action in this whole scheme that could have caused it taking.

[00:13:29] Speaker 04:
Your position in Caldwell, at least before the decision, was that that was not the accrual date?

[00:13:36] Speaker 00:
Our position in Caldwell in this court was that the entry of the trail use agreement should be the moment.

[00:13:44] Speaker 00:
That's what triggers the statute, and that should be the accrual date for a trail conversion claim.

[00:13:50] Speaker 00:
And this court adopted an earlier date.

[00:13:53] Speaker 00:
They adopted the need to as the claim accrual date.

[00:13:57] Speaker 00:
At the time, we didn't foresee all the problems that that would cause.

[00:14:01] Speaker 00:
But there's a couple things.

[00:14:04] Speaker 00:
One, the working of the statute is, in effect, a government action that you can tie claim accrual to.

[00:14:11] Speaker 00:
And second, since Caldwell, there are new regulations that now require

[00:14:15] Speaker 00:
the railroad and the trail sponsor to let the STB know when they reach a trail use agreement.

[00:14:20] Speaker 00:
So you have now this formal notice happening.

[00:14:23] Speaker 00:
STB puts it on their website.

[00:14:24] Speaker 00:
So there would be notice to the world that rail banking is occurring.

[00:14:28] Speaker 00:
So we think it's quite clear that you can change Caldwell and set claim accrual for the trail conversion takings.

[00:14:36] Speaker 00:
You can set that at the entry of the trail use agreement.

[00:14:38] Speaker 00:
That will clear up, we think, the confusion that led to LAD that

[00:14:43] Speaker 00:
somehow equated the need to, which again, does not change the use of the easement.

[00:14:48] Speaker 00:
And we don't think even extends the easement beyond what the railroad could otherwise do.

[00:14:54] Speaker 00:
It equated the need to impermissibly with this, the physical taking that can be worked by the actual trail.

[00:15:02] Speaker 03:
You have urged us to refer this matter to the en banc court to revisit Caldwell and Ladd.

[00:15:11] Speaker 03:
That precedent has been around for 16 years.

[00:15:14] Speaker 03:
What compelling reason is there for the court to review that?

[00:15:20] Speaker 00:
Well, while the precedent, Caldwell has been around for a long time.

[00:15:24] Speaker 00:
Ladd has not been around quite so long.

[00:15:26] Speaker 00:
And this case actually was the very first one to go to final judgment after Ladd.

[00:15:30] Speaker 03:
Well, Ladd has 10 years, Caldwell 16 years.

[00:15:33] Speaker 03:
That's a long time.

[00:15:34] Speaker 00:
That's right.

[00:15:35] Speaker 03:
Is there something going on?

[00:15:37] Speaker 03:
Some circumstance that compels the court to revisit this?

[00:15:44] Speaker 00:
Sure.

[00:15:44] Speaker 00:
Well, for one thing, in Caldwell, what this court had seen so far was only actual trail conversion claims.

[00:15:52] Speaker 03:
We weren't foreseen.

[00:15:53] Speaker 03:
I appreciate that.

[00:15:53] Speaker 03:
There were differences.

[00:15:55] Speaker 03:
But yet, that's an established precedent that people have been living with for 16 years.

[00:16:03] Speaker 00:
The big reason is because we now have a whole bunch of these cases.

[00:16:07] Speaker 00:
We have about 50 cases pending right now that raise one or more of these issues.

[00:16:12] Speaker 02:
And as the authors... And is that different for what's... Is this something new and suddenly different?

[00:16:19] Speaker 02:
I mean, you started to mention this is the first case since Caldwell and Ladd.

[00:16:23] Speaker 02:
So now suddenly something's happened.

[00:16:25] Speaker 00:
That's right.

[00:16:25] Speaker 02:
We've had cases that have been affected.

[00:16:28] Speaker 02:
And now in recent times, there are a whole slew of cases.

[00:16:32] Speaker 00:
Just as background, in Ladd, we sought rehearing on Bonk.

[00:16:38] Speaker 00:
And one of the authors of Ladd, Judge Morris, said,

[00:16:42] Speaker 00:
We think LAD is an egregious legal error, but it was compelled by Caldwell.

[00:16:47] Speaker 00:
That was something we did not foresee.

[00:16:48] Speaker 00:
And apparently, at least some judges on this court thought that en banc review of LAD was not appropriate at that moment because we had not also sought to overturn Caldwell.

[00:16:59] Speaker 00:
Here we are.

[00:17:00] Speaker 00:
This is our first chance to present you with that argument.

[00:17:03] Speaker 00:
We're doing it now.

[00:17:04] Speaker 00:
This is a constitutional issue.

[00:17:05] Speaker 00:
The government should not be required to pay compensation

[00:17:09] Speaker 00:
for these phantom physical takings where nothing physical is actually happening.

[00:17:14] Speaker 00:
We think it's important to get the legal framework right so that the government doesn't have liability.

[00:17:20] Speaker 04:
Can I just ask you, are there cases from the Supreme Court or our court or anybody else who addresses takings that talk about the transfer of a well-recognized legal

[00:17:35] Speaker 04:
category of property rights here, an easement, as automatically or not automatically constituting a compelled imposition of an easement, even if nobody's walking around on it?

[00:17:53] Speaker 00:
I'm not sure that there's a Supreme Court case exactly like that.

[00:17:56] Speaker 00:
But for instance, cases we've cited like Block versus Hirsch and FCC versus Florida Power Court

[00:18:02] Speaker 00:
These are cases where there's some kind of government action that's interfering with a relationship between two third parties.

[00:18:10] Speaker 00:
So for instance, in Block v. Hirsch, there's a government law that allows tenants to hold over longer than their landlords might prefer.

[00:18:18] Speaker 04:
But at least that one, unlike this one, was entirely voluntary.

[00:18:22] Speaker 04:
The presence of this one came about by condemnation, right?

[00:18:26] Speaker 00:
That's right.

[00:18:27] Speaker 00:
But of course, it's changed hands.

[00:18:29] Speaker 00:
The plaintiffs.

[00:18:32] Speaker 00:
predecessors voluntarily acquired land that was burdened by this real road easement.

[00:18:38] Speaker 00:
So I mean, the court has said, we don't like per se tests.

[00:18:45] Speaker 00:
We don't like right line tests.

[00:18:46] Speaker 00:
Those should be reserved for the very clear circumstances where there's been a physical government occupation of land.

[00:18:55] Speaker 00:
Other than that, you apply a multifactor test.

[00:18:58] Speaker 00:
And that's all we're really asking for here, is that the court, LAD has been taken too far.

[00:19:05] Speaker 00:
We don't think LAD actually said quite as much as the CFC has taken it to mean.

[00:19:10] Speaker 00:
But the CFC has certainly taken it to mean that these are effectively all per se takings if the plaintiffs can't establish their property interests.

[00:19:17] Speaker 00:
And we're asking you whether you do it by overturning LAD and or Caldwell, or whether by leaving LAD in place and recognizing that you can harmonize it with Arkansas game,

[00:19:28] Speaker 00:
But the CSU should be applying a multi-factor test here to assess whether there is takings liability in these cases.

[00:19:36] Speaker 00:
I see them all over time.

[00:19:38] Speaker 00:
Thank you.

[00:19:38] Speaker 00:
Thank you.

[00:19:48] Speaker 01:
May it please the court, Your Honor?

[00:19:53] Speaker 01:
The government's appeals have really been a total fool's errand, both procedurally and substantively.

[00:19:59] Speaker 01:
The first issue that they address in great detail is they want this court to conclude that the need to alone does not trigger a physical taking.

[00:20:10] Speaker 01:
So they readily admit that they want to overturn Caldwell and Ladd.

[00:20:16] Speaker 01:
But they, in essence, really need to overturn Caldwell, Barkley, Illig, and Ladd at a minimum.

[00:20:23] Speaker 01:
And it's actually an assault on all of the rails and trails.

[00:20:28] Speaker 04:
Can I just ask you about one question is what legal standard might apply to decide whether the NITU is taking a different question, I think, is whether in the absence of evidence that the railroad would have left earlier,

[00:20:53] Speaker 04:
and allowed, that is earlier than the 180 days after July 5th, there just was no cause taking.

[00:21:02] Speaker 04:
Let me just ask you about that.

[00:21:04] Speaker 04:
Why?

[00:21:05] Speaker 04:
First of all, am I right that there's simply no evidence, nobody asked the railroad what would you have done had you been freed on July 5th?

[00:21:16] Speaker 01:
I don't know of anybody asking the railroad that.

[00:21:20] Speaker 04:
Who should have the burden?

[00:21:22] Speaker 01:
I believe it is a clear-cut, bright line rule that nobody needs to ask the railroad what they would have done.

[00:21:31] Speaker 01:
And the fact of the matter is that in this case, and it is a classic example of the government wants to first ensure

[00:21:39] Speaker 01:
that the rail banking or the trail use agreement actually comes to fruition before there's any consideration of what the impact of the need to is.

[00:21:49] Speaker 01:
But that's backwards.

[00:21:52] Speaker 01:
The Supreme Court has said for 100 years, it's not what the government gained, it's what the landowner lost.

[00:22:01] Speaker 01:
And I think this question that you're asking, Judge Toronto, is do you?

[00:22:05] Speaker 04:
Let me just say, it seems to me my question does go

[00:22:09] Speaker 04:
to what the landowner lost.

[00:22:13] Speaker 04:
If the railway had come in with a declaration that said, it's going to take us 181 days to remove the rails, and it's only on day 182 that we will, I'm not sure what the word consummation means, that we will announce to the world that we're abandoning or something, then

[00:22:36] Speaker 04:
Not until then, under Iowa law, would there have been an end of the easement, in which case nothing the government did during that 180 days would have changed the status of the plaintiff.

[00:22:52] Speaker 01:
I don't believe that's correct legally, Your Honor.

[00:22:55] Speaker 01:
Why not?

[00:22:55] Speaker 01:
I don't.

[00:22:56] Speaker 01:
It's correct under Iowa law.

[00:22:58] Speaker 01:
But the taking here is the statutory preemption or the statutory scheme

[00:23:05] Speaker 01:
that takes their land, their right to have their land back during that six months or six years or 10 years or however long it takes.

[00:23:13] Speaker 02:
Are we not understanding or maybe I'm not understanding Judge Toronto's question because his circumstance is that the railroad would have retained this through the entire period of the NITU even in the absence of an NITU, okay?

[00:23:32] Speaker 02:
So if the landowner is in no different position, they would have not gotten the land back until day 183.

[00:23:44] Speaker 02:
Where is the taking?

[00:23:46] Speaker 01:
The taking is the statutory intrusion where the federal law preempts the state law property right.

[00:23:53] Speaker 01:
And I would refer the court to Justice O'Connor's concurring opinion in Preso 1 that deals exactly with this question that says the federal government has the right to intervene, but the intervention that preempts the state law reversionary right is the taking.

[00:24:13] Speaker 01:
And it doesn't matter whether it is delayed six months or a year or five years or ten years.

[00:24:20] Speaker 01:
That's the taking, is because it preempts their state law reversionary right.

[00:24:24] Speaker 02:
It's just the word delayed, but we don't know under the scenario we're under, the hypothetical, where the railroad has declared that it's not going to

[00:24:35] Speaker 02:
move aside until a certain date, then where is the delay?

[00:24:39] Speaker 02:
Maybe that's the issue.

[00:24:41] Speaker 02:
What is the delay if it wouldn't have reverted back to the property owner in any event?

[00:24:47] Speaker 01:
It would have reverted back to them, but for, and there's no telling how long it would have actually taken, but that's not the point.

[00:24:55] Speaker 01:
The point is that there is a bright line rule established by this court.

[00:25:00] Speaker 02:
But you just said it would have reverted back to them, but for, but the situation, the hypothetical, forget what state law is, a hypothetical is the railroad's telling us

[00:25:11] Speaker 02:
that they're not giving up, they're not consummating the abandonment until January 1, 2020.

[00:25:19] Speaker 02:
So in any event, and the NITU is completed before that, runs its course before that.

[00:25:26] Speaker 02:
Do you understand?

[00:25:27] Speaker 02:
I'm not sure I am, but the- What is causing

[00:25:31] Speaker 01:
The delay.

[00:25:33] Speaker 01:
The delay is caused by the issuance of the Notice of Interim Trail.

[00:25:37] Speaker 02:
Well, what if the delay would have existed in any event, because we have clear evidence, uncontroverted evidence, that the railroad was not going to abandon until January 2020 in any event, even in the absence of the NITU?

[00:25:55] Speaker 02:
Do you understand the question?

[00:25:57] Speaker 02:
I do understand the question.

[00:25:58] Speaker 02:
OK, so the original landowner

[00:26:00] Speaker 02:
is in the exact same position whether or not the NITU occurs or doesn't.

[00:26:06] Speaker 02:
Is that still a taking in your view?

[00:26:08] Speaker 01:
Yes, it is under this court's precedent, because under preso two, Caldwell, Barkley, Illig, Ladd, the issuance of the need to triggers the taking.

[00:26:19] Speaker 01:
That's number one under all of those cases.

[00:26:22] Speaker 01:
Number two, all of those cases stand for the proposition that it does not matter what happens thereafter, including the ultimate negotiation of a trail use agreement.

[00:26:31] Speaker 01:
Anything that happens thereafter is irrelevant.

[00:26:35] Speaker 01:
You can't have a taking based on the acts of third parties, the issuance of the need to private parties who are ultimately negotiating a trail use agreement.

[00:26:46] Speaker 01:
Caldwell, Barclay, Illeglad, they all stand for the proposition that the only governmental act is the need to.

[00:26:54] Speaker 01:
And the fact of the matter is, is all of those cases stand for the proposition that it is a physical categorical taking at the time the need to is issued, whether it is ultimately temporary or becomes permanent.

[00:27:09] Speaker 01:
That's what all of those cases say.

[00:27:11] Speaker 01:
It is a bright line rule.

[00:27:13] Speaker 03:
What is taken?

[00:27:15] Speaker 03:
The taking is there?

[00:27:17] Speaker 03:
If there's no, under our circumstances, there's no consummated rail to trail agreement,

[00:27:25] Speaker 03:
And there's no evidence that the issuance of the need to cause any delay whatsoever in what would have otherwise occurred with the railroads abandonment.

[00:27:37] Speaker 03:
What is it that the government is taking?

[00:27:40] Speaker 01:
It blocked the landowners' reversionary right.

[00:27:44] Speaker 01:
It blocked it for a period of six months in this case.

[00:27:47] Speaker 03:
But the reversionary right was already blocked just because of the normal mechanism of abandonment.

[00:27:55] Speaker 01:
Factually, perhaps yes.

[00:27:56] Speaker 01:
But legally, no.

[00:27:57] Speaker 01:
Because the reality was, as the railroad petitioned the Surface Transportation Board for permission to abandon, they had already said that we want to abandon this.

[00:28:07] Speaker 01:
All the conditions for abandonment had already been met.

[00:28:11] Speaker 01:
And so the federal statutory intrusion into that state law property right is exactly what caused the blockage of those reversionary rights.

[00:28:25] Speaker 04:
So can I just return to, I think, a question I discussed earlier.

[00:28:32] Speaker 04:
It seems to me that what you just said might support, let's just assume it supports a notion that

[00:28:41] Speaker 04:
The government's action in legally precluding an abandonment is prima facie a cause of the harm, which is the delay in end of the easement.

[00:29:01] Speaker 04:
But that there might well be a proof that

[00:29:09] Speaker 04:
It would not have occurred anyway.

[00:29:11] Speaker 04:
And this comes up in all kinds of causation situations.

[00:29:14] Speaker 04:
I mentioned a couple of Fourth Amendment ones, and tort law, the two hunters, all kinds of things.

[00:29:18] Speaker 04:
But particularly if the defendant, as here, is responsible for preventing the action of the other causer, the defendant, as far as I can tell, nearly always has the burden of showing that, which didn't happen here.

[00:29:35] Speaker 04:
But I don't see how you get beyond that.

[00:29:38] Speaker 04:
to say what I think you're saying, that is, even if the railroad said, we would not abandon until, whenever they did hear, I think March 31st, 2014.

[00:29:50] Speaker 04:
Nevertheless, the action of the government as of July 5th, 2013 in creating the 180

[00:30:01] Speaker 04:
a delay took something that your client otherwise would have had when your client would not otherwise have had it?

[00:30:10] Speaker 01:
I think you're right with respect to the examples you gave that the burden would be on the defendant in that instance.

[00:30:17] Speaker 01:
In this situation, what the government is really asking the court to develop or authorize is the whole concept of two different takings from the same governmental act.

[00:30:29] Speaker 01:
They're wanting the court to analyze this under a potential multi-factor test after the need to is issued until the trail use agreement is reached, which is exactly what Judge Leto did in this particular case under directions from the court and called it a very atypical task.

[00:30:47] Speaker 01:
The fact of the matter is they want that to be viewed as a temporary regulatory taking, which then would require a multi-factor test.

[00:30:57] Speaker 01:
And then it mysteriously becomes a permanent categorical taking when the Trail Use Agreement is reached.

[00:31:04] Speaker 01:
This court, specifically in Barkley, called that result bizarre and said that can't happen.

[00:31:11] Speaker 01:
And they cited the Supreme Court case of Dow that says you can't have two takings from the same governmental act.

[00:31:17] Speaker 01:
That's what they're wanting this court to do.

[00:31:19] Speaker 02:
But you agreed when we started this little colloquy with Judge Toronto that arguably the defendant bears the burden, but that suggests if you agree with that, then there is evidence that could dislodge your theory, i.e.

[00:31:38] Speaker 02:
if the

[00:31:39] Speaker 02:
railroad here had provided an affidavit or declaration that said that they're not going to consummate the abandonment until after the expiration of the NITU.

[00:31:50] Speaker 02:
In any event, even if the NITU was never issued, they were not going to abandon it.

[00:31:56] Speaker 02:
I assume you've agreed with Judge Toronto that the dependent has the burden to show that, but if that can be shown,

[00:32:05] Speaker 02:
then there's not a taking.

[00:32:06] Speaker 01:
I agree with the concept in those other examples he gave.

[00:32:10] Speaker 01:
That burden would fall on the defendant.

[00:32:12] Speaker 01:
I don't know that those are bright line rules like this court has established in Caldwell, Barclay, and Latt.

[00:32:19] Speaker 01:
This court in Latt specifically said that.

[00:32:22] Speaker 01:
We specifically reject the whole concept that this is merely a temporary regulatory hold.

[00:32:28] Speaker 01:
And that would have to be reversed.

[00:32:31] Speaker 01:
Barclay would have to be reversed on the whole concept of two takings, because you can't have multiple takings from the same governmental action.

[00:32:39] Speaker 04:
And in fact, in preso 2, this court's sitting in the railway would definitively just assume not have abandoned during the 180 days.

[00:32:52] Speaker 04:
There wouldn't be two takings.

[00:32:55] Speaker 04:
it wouldn't have been a taking during that period.

[00:32:58] Speaker 04:
And so if there came to be an agreement that essentially indefinitely precluded, abandoned, because it was a rail agreement, then there would be one taking, then and then only.

[00:33:16] Speaker 01:
There would be a taking that starts when the need to is issued.

[00:33:20] Speaker 01:
And the length or duration of that taking could be based on a number of facts that we don't know and we will never know, depending on the case.

[00:33:29] Speaker 01:
Here, we don't know what the railroad would have done or would not have done.

[00:33:33] Speaker 01:
And it's irrelevant to the Brightline rule.

[00:33:36] Speaker 01:
Does it not strike you as strange in this case that we don't know that?

[00:33:40] Speaker 01:
No, it doesn't, because that's the exact holding in preso two, Caldwell, Barkley, Illigan, Ladd.

[00:33:47] Speaker 01:
And the fact of the matter is, if you change that bright line rule, you would have chaos and uncertainty.

[00:33:56] Speaker 01:
And in fact, this court in Barkley specifically said, you can't change this bright line rule, because then you would have chaos and uncertainty.

[00:34:05] Speaker 01:
And it's the parade of it.

[00:34:07] Speaker 01:
Can you elaborate on that a little bit?

[00:34:08] Speaker 04:
Yes, sure.

[00:34:09] Speaker 04:
There's one railroad.

[00:34:13] Speaker 04:
Let's assume they have a telephone.

[00:34:15] Speaker 04:
What's the problem in at least trying to get?

[00:34:20] Speaker 04:
Obviously, there have to be depositions and whatnot, but why chaos?

[00:34:25] Speaker 01:
Well, if the court changes the bright line rule and says the issuance of a need to does not trigger a categorical physical taking, whether it's either temporary or permanent, then you're right that at that point in time, there wouldn't be any taking.

[00:34:42] Speaker 01:
But that requires the reversal of all of these cases that this court has actually.

[00:34:48] Speaker 02:
Maybe I'm not hearing what's been said, but I didn't understand that to be this discussion here.

[00:34:54] Speaker 02:
Not under any circumstances would the NITU not constitute a per se temporary taking.

[00:35:01] Speaker 02:
But in the circumstance where the record is clear and uncontroverted, that the railroad would have retained all of its rights during the period of time we're speaking of, then that would not constitute, the NITU would not be a taking.

[00:35:18] Speaker 02:
So if we all know that with some certainty at some early time, I guess the question is, where's the uncertainty and the chaos?

[00:35:30] Speaker 01:
I must not be understanding the question, Your Honor.

[00:35:33] Speaker 01:
If the railroad would come in and say, this is not about the railroad at all, the railroad has already said that.

[00:35:40] Speaker 01:
They have met all the conditions for abandonment, and they want to abandon the railroad corridor.

[00:35:45] Speaker 01:
At a time certain?

[00:35:47] Speaker 01:
Yeah, well, they said that when they filed their notice of exemption with the STB, that's what they declare to the STB.

[00:35:53] Speaker 02:
And don't they have a year, isn't that?

[00:35:55] Speaker 01:
They have a year to consummate abandonment once the railroad actually issues the notice of interim trail use.

[00:36:01] Speaker 01:
But that is many times extended on indefinitely for four years, six years.

[00:36:06] Speaker 04:
If there had not been a need to, am I wrong?

[00:36:09] Speaker 04:
I thought I had understood that the June 5th STB approval, which would permit the abandonment as of July 5th, that under the regulations or statute

[00:36:22] Speaker 04:
they have a year from that date to abandon, and if they don't do it, then they have to come back and apply again to the STB.

[00:36:31] Speaker 04:
Correct.

[00:36:32] Speaker 01:
If there was no need to in this case, there would be no taking.

[00:36:35] Speaker 01:
That's what triggers it, because that's the intervention, that's the federal law, the Trails Act, intervening in the state law to prevent these landowners' reversionary rights.

[00:36:45] Speaker 01:
That's what this court has held all the way back from 1996 when Pre-SOTU was adopted en banc.

[00:36:52] Speaker 01:
And this exact issue is the opposite issue that the government has always taken in the past.

[00:36:58] Speaker 01:
And this issue has actually been presented to this court and rejected by five panels of this court, where they tried to say that the need to does not trigger a temporary or permanent categorical physical taking when it's issued.

[00:37:14] Speaker 01:
And I do want to say, I know my time is up, but I want to say one word about Arkansas game.

[00:37:20] Speaker 01:
Because the whole premise of this is the only way this panel can disturb earlier precedent is to find that Arkansas game somehow is intervening law.

[00:37:29] Speaker 01:
Okay?

[00:37:29] Speaker 01:
Or I suppose send it en banc and see if en banc they want to reverse all of this precedent since 1996.

[00:37:36] Speaker 01:
But the fact of the matter is that what the government is wanting you to believe is that a multi-factor test has to be applied any time the taking is temporary in nature.

[00:37:47] Speaker 01:
And that's just not the case.

[00:37:49] Speaker 01:
There are a number of cases that we cite in our brief from the Supreme Court.

[00:37:53] Speaker 01:
Judge Leto cited all of them.

[00:37:54] Speaker 01:
He went through a detailed analysis of all the different categories of takings,

[00:38:00] Speaker 01:
And his opinion is well reasoned and followed the controlling precedent of this court.

[00:38:07] Speaker 01:
And we're actually very fortunate that Judge Leto was the judge in Arkansas game.

[00:38:12] Speaker 01:
He was also the judge in this case.

[00:38:15] Speaker 01:
And this roadmap that he's written is fantastic and it cites a number of cases where there have been temporary, categorical, physical takings

[00:38:26] Speaker 01:
and a multi-factor test has not been applied.

[00:38:30] Speaker 01:
And the reverse of that is that a multi-factor test has never been applied to a temporary categorical physical taking.

[00:38:38] Speaker 01:
There is not one example.

[00:38:39] Speaker 01:
In fact, during the closing argument in this case, Judge Leto asked the government's attorney three different times, can you name one case where a categorical physical taking resulted in the application of a multi-factor test and the government could not?

[00:38:56] Speaker 01:
And I want to say one last word about it.

[00:38:58] Speaker 01:
If there's any controlling precedent from the Supreme Court post-lad, it's actually the Nick case that we filed as supplemental authority where Justice Roberts just recently said that

[00:39:12] Speaker 01:
The taking occurs when the taking is triggered, in this case when the need to is issued, and that a temporary taking is still a taking.

[00:39:21] Speaker 01:
In other words, a bank robber can rob a bank and later return the money, but he's still guilty of robbing the bank.

[00:39:29] Speaker 01:
Thank you, Your Honor.

[00:39:30] Speaker 01:
Thank you.

[00:39:33] Speaker 02:
I will restart several minutes of rebuttal.

[00:39:41] Speaker 04:
Sorry to do this, but can I ask you a question?

[00:39:44] Speaker 04:
Of course.

[00:39:44] Speaker 04:
That's why I'm here.

[00:39:45] Speaker 04:
Do you think that Caldwell or Ladd or Barclay or any of those cases would need to be overruled to say that there would be no taking if there were proof that there would not have been a railway abandonment during 180 days?

[00:40:01] Speaker 00:
No, I don't think so.

[00:40:04] Speaker 00:
Because while the CFC has taken Ladd to say that an E2 is definitively a taking,

[00:40:11] Speaker 00:
This court clarified in Lad 2 that the first decision in Lad did not actually

[00:40:16] Speaker 00:
definitively say that, that there were other sort of preliminary questions that needed to be answered, and that could be one of the preliminary questions.

[00:40:23] Speaker 04:
Okay, one other question.

[00:40:24] Speaker 04:
It has, which I should have asked you about before.

[00:40:28] Speaker 04:
In the fairly recent, is it Campbell decision, there is a discussion, a paragraph discussing a 1964 court of claims case, Cuban something or other, which you put together two

[00:40:45] Speaker 04:
as Campbell said, said that once you have identified a piece of property and the government freezes, it's transfer, freeze I think is the word, that moment there is a taking.

[00:40:58] Speaker 04:
Why is this not like that?

[00:41:01] Speaker 00:
I'm sorry I'm not specifically familiar.

[00:41:04] Speaker 04:
This was post World War II.

[00:41:06] Speaker 04:
There are a gazillion military trucks in Germany.

[00:41:12] Speaker 04:
the U.S.

[00:41:13] Speaker 04:
government gets together with German authorities and says a lot of people around the world would like to buy them.

[00:41:18] Speaker 04:
Somebody buys one.

[00:41:19] Speaker 04:
Let's take out the German government at this point because the case did.

[00:41:23] Speaker 04:
And the government says freeze everything.

[00:41:26] Speaker 04:
And some of those trucks have already been purchased.

[00:41:29] Speaker 04:
It takes a month or two.

[00:41:30] Speaker 04:
And then this truck or these trucks are identified.

[00:41:34] Speaker 04:
And the question is, when did the taking occur?

[00:41:36] Speaker 04:
And the court of law says, the freeze, once it has been made applicable to identified trucks, that is a taking, as usual, because of a statute of limitations question.

[00:41:49] Speaker 04:
Why should this not be like that?

[00:41:51] Speaker 04:
This is the freeze of the transfer back

[00:41:56] Speaker 04:
of the easement?

[00:41:59] Speaker 00:
Well, part of the problem is because one of the differences, I guess, is the type of interest that the railroad has.

[00:42:07] Speaker 00:
The railroad interest is not set to expire at any particular time.

[00:42:12] Speaker 00:
It's perpetual easement.

[00:42:14] Speaker 00:
The railroad agrees to the need to.

[00:42:18] Speaker 00:
So this sort of gets to your causation question also, to both me and my friend.

[00:42:23] Speaker 00:
The only evidence we have in the record is that the railroad did not intend to abandon during the need to period.

[00:42:31] Speaker 00:
The railroad agreed to the need to.

[00:42:33] Speaker 00:
The need to would not have been issued but for that agreement.

[00:42:37] Speaker 00:
On this record, we then have the railroad indicating no intent to abandon any sooner than at least the end of the need to.

[00:42:45] Speaker 00:
This is getting off a little bit, but I just want to emphasize just how many different possible outcomes a need to can have.

[00:42:52] Speaker 00:
We have now about 10 cases where there was a need to that expired, and then a railroad elected not to consummate abandonment is instead held onto the rail easement.

[00:43:03] Speaker 00:
It's still a rail easement only.

[00:43:04] Speaker 00:
It hasn't been converted.

[00:43:06] Speaker 00:
It's still within STB jurisdiction.

[00:43:08] Speaker 00:
And that's perfectly fine.

[00:43:09] Speaker 00:
That is perfectly permissible under proper law and under the railroad's perpetual rail easement.

[00:43:19] Speaker 00:
I want to turn to something that counsel said several times during his argument, which is that the statute works a taking in this case, and that Purcell and all these other cases say the statute works a taking upon the need to.

[00:43:35] Speaker 00:
The statute was not triggered here.

[00:43:37] Speaker 00:
Section 8D is triggered when a trail use agreement is entered, which allows interim trail use.

[00:43:43] Speaker 00:
That is when the easement is prevented from expiring.

[00:43:46] Speaker 00:
In Purcell, there was a trail conversion.

[00:43:50] Speaker 00:
Also in Purcell, there was no need to.

[00:43:52] Speaker 00:
That just highlights that it's not the need to doing any of this.

[00:43:57] Speaker 00:
It is the trail conversion upon the trail use agreement that triggers the statute.

[00:44:02] Speaker 00:
We are not asking this court to touch for so.

[00:44:04] Speaker 00:
We are not asking you to go back to 1996.

[00:44:06] Speaker 00:
It's completely wrong.

[00:44:08] Speaker 00:
As far back as we're looking is Caldwell.

[00:44:11] Speaker 00:
We think Caldwell is where this error started.

[00:44:13] Speaker 00:
Sorry, I want to say one more thing about causation.

[00:44:17] Speaker 00:
I said this earlier about burden.

[00:44:20] Speaker 00:
St.

[00:44:20] Speaker 00:
Bernard Parish from this court says that it's the plaintiff's burden to show what would have happened in the absence of the complaint of government action.

[00:44:30] Speaker 00:
On this record, what would have happened is exactly the same as what did happen.

[00:44:36] Speaker 00:
A railroad voluntarily exercised its discretion to abandon on its own timeline.

[00:44:43] Speaker 00:
The landowner didn't lose anything.

[00:44:45] Speaker 00:
Her interest was at all times just a possible future interest that was wholly contingent on the railroad's decision, the railroad's timeline for abandonment.

[00:44:57] Speaker 00:
We're asking you.

[00:44:59] Speaker 00:
to correct that and call it out, to return to a framework that correctly reflects the way the Trails Act works, the way the implementing regulations work, and how this court in Purcell said they could work taking.

[00:45:11] Speaker 02:
Thank you.

[00:45:12] Speaker 02:
We thank both sides and the case is submitted.