[00:00:00] Speaker 01:
Our third case this morning is number 221201, Stimson Lumber Company versus United States.

[00:00:08] Speaker 01:
May I have Mr. Stewart?

[00:00:09] Speaker 02:
May it please the Court, Your Honor.

[00:00:11] Speaker 02:
Although this case only involves one plaintiff and there's only one deed to interpret,

[00:00:18] Speaker 02:
It does involve several very significant legal errors.

[00:00:24] Speaker 02:
The easement deed to the railroad in this case, and it's critical to keep in mind throughout that it's undisputed that it conveyed an easement to the railroad, was granted to the railroad for the construction of the railroad and the operation of the railroad.

[00:00:40] Speaker 02:
That is an obvious fact.

[00:00:43] Speaker 01:
The deed doesn't say that.

[00:00:44] Speaker 02:
Doesn't say that, Your Honor, and that is exactly why I think we're here.

[00:00:49] Speaker 02:
The history of the context and surrounding circumstances of this deed should have led to a conclusion that it was limited to railroad purposes as a matter of law.

[00:01:01] Speaker 01:
OK, well, there's your problem, because the Oregon

[00:01:11] Speaker 01:
where the purpose of the easement was for agricultural purposes, but the deed didn't say so.

[00:01:20] Speaker 01:
And the court said it had to be construed broadly to include recreational purposes.

[00:01:27] Speaker 02:
I think here, Your Honor, this case follows almost precisely the analysis and the ruling of preso 2.

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Preso 2.

[00:01:37] Speaker 01:
You want to talk about preso 2?

[00:01:39] Speaker 01:
For the moment, I want to talk about criterion.

[00:01:42] Speaker 01:
How do you distinguish criterion?

[00:01:43] Speaker 01:
That's a problem for you.

[00:01:45] Speaker 02:
I think the criterion is set forth in the Trestle opinion, which specifically says that the court is supposed to look at the context of the deed in the surrounding circumstances.

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Here, the context was the railroad's charter that was adopted in 1905.

[00:02:02] Speaker 03:
Can you point to any language in the deed itself that incorporates the railroad's charter?

[00:02:07] Speaker 02:
No, I can't, Your Honor.

[00:02:08] Speaker 02:
It doesn't specifically say that.

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But if you look at the timing of it in 1905, and the fact that the deed was then granted in 1907, very shortly thereafter,

[00:02:19] Speaker 02:
I think it's fairly obvious actually that it was done in furtherance of the railroad's charter.

[00:02:25] Speaker 02:
The charter itself says that the railroad only has the right to construct and operate their railroad.

[00:02:32] Speaker 02:
The legislature, the Oregon legislature, could have very easily said, we also grant them the right to build a hiking and biking trail.

[00:02:39] Speaker 02:
But they did not.

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They specifically limited it to the operation of the railroad.

[00:02:44] Speaker 03:
Now there are other deeds, right, that actually

[00:02:47] Speaker 03:
expressly contain language limiting the easements for rail use.

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Do you agree that in the broader case, there were other deeds that had that limiting language?

[00:02:55] Speaker 02:
There were several deeds, Your Honor.

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There were, in this particular landowner, 17 parcels at the outset.

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One turned out not to be adjacent.

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Five of them were ruled to have conveyed an easement limited to railroad purposes.

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And the eight were ruled not to be even granted an easement.

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were down to these three parcels, where the court concluded that it was an easement, but in essence ruled that the easement was broad enough to allow a hiking and biking trail.

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And we believe that's error under clear Oregon law for 140 years.

[00:03:35] Speaker 02:
If you go, I'm sorry.

[00:03:36] Speaker 03:
How do you distinguish, though, and I apologize because I took you away from Judge Dyke's question, how do you distinguish criterion?

[00:03:42] Speaker 02:
I think the criterion, when you specifically say it's for an agricultural purpose,

[00:03:49] Speaker 02:
or you specifically say that it's for a recreational purpose, that allows you to expand the uses within that purpose.

[00:03:57] Speaker 01:
Here... There was no statement like that in the criterion deed.

[00:04:01] Speaker 02:
No, I think that's exactly right, Your Honor.

[00:04:03] Speaker 02:
They allowed it to be used.

[00:04:05] Speaker 02:
The criterion deed was for ingress and egress.

[00:04:09] Speaker 02:
It didn't really have anything to do with the use of the adjacent parcel next to it.

[00:04:16] Speaker 02:
The criterion deed was for ingress and egress to that larger parcel.

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Had this been an ingress and egress deed,

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They could have used it to access that parcel no matter what the use of the larger parcel was used for.

[00:04:31] Speaker 02:
I think the criterion indeed is completely separate from these facts, where we're not looking at an ingress and egress deed which can be expanded within the reasonable uses of that deed.

[00:04:44] Speaker 02:
That's basically Oregon law.

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That's the law everywhere.

[00:04:47] Speaker 02:
Here, you have an easement that's granted to the railroad for their railroad purposes.

[00:04:54] Speaker 02:
And the court basically found that instead of limiting this deed to... Your problem doesn't say that.

[00:05:03] Speaker 02:
It doesn't say that, but all these other cases in Oregon from, frankly, the Preso 2, which you don't want me to talk about Preso 2, but Preso 2 cited Bernard.

[00:05:14] Speaker 01:
Preso 2 is not an Oregon case.

[00:05:16] Speaker 02:
It cited Bernard's, which is an Oregon case, with approval and actually quoted it to say that when the deed is to a railroad for the construction and operation of the railroad, it's limited to railroad purposes as a matter of law.

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Bernard's was 1952, Oregon Supreme Court.

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It, in turn, relied on an 1897 opinion called Wason v. Pills, which said the same thing.

[00:05:43] Speaker 02:
Which said that, and it didn't say it was limited to railroad purposes either.

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That deed said that if it is, or it was just granted for the purposes of a road.

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And they said that distinguished any case like Criterion

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and specifically said that the scope of that easement was limited to the purpose of the charter, which is what Bernard's followed.

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And it goes all the way back to 1882 in the Oregon Supreme Court of Oregon Railway, when the Supreme Court of Oregon basically said it had no purpose listed in it whatsoever, but said that you have to follow the charter that established the railroad in the first place, and that it was limited to railroad purposes as a matter of law.

[00:06:28] Speaker 02:
And I think I only want to cite Preso II because it cites the Oregon case that is the foundation which limits the scope of the easement to railroad purposes as a matter of law.

[00:06:43] Speaker 02:
It cites and approves the Bernards case from 1952.

[00:06:46] Speaker 03:
The case, though, applies Vermont law, right?

[00:06:51] Speaker 02:
Pardon me, Your Honor?

[00:06:52] Speaker 03:
Doesn't this case that you want to talk about apply Vermont law?

[00:06:56] Speaker 02:
No, the Bernards case cited in pre-CELT II is an Oregon Supreme Court case.

[00:07:01] Speaker 03:
I'm talking about pre-CELT II.

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I hope I'm saying that right.

[00:07:04] Speaker 02:
Yes.

[00:07:04] Speaker 03:
Am I incorrect in my memory that it applies Vermont law?

[00:07:07] Speaker 02:
It did apply Vermont law.

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And it applied Vermont law because the railroad was staked out and laid out.

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And they took possession of it even before the deed was granted, which is exactly what this Western timber deed says.

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And so that's why I was trying to make the analogy.

[00:07:27] Speaker 02:
How does the Bernard's case help you?

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The Bernard's case says specifically that you have to look at the charter of the railroad to determine the purpose for which the grant was.

[00:07:39] Speaker 02:
Where does it say that?

[00:07:48] Speaker 02:
I'll have to pull that out, Your Honor.

[00:07:50] Speaker 02:
I've got it in my notes here somewhere.

[00:07:52] Speaker 02:
Well, I've got it two different places.

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I've got it cited in Loverage 3, which is the court CFC case at 148th Fed claim.

[00:08:00] Speaker 01:
I'm looking at the Bernard's case.

[00:08:02] Speaker 01:
Yeah, I also have the Bernard's case.

[00:08:06] Speaker 02:
Well, if you can't find it, you can give it to me.

[00:08:10] Speaker 02:
I'll have to read it and do it in my rebuttal.

[00:08:12] Speaker 02:
But I think it's at page 585 in the opinion.

[00:08:16] Speaker 01:
There's no 585.

[00:08:18] Speaker 02:
That's the state court case.

[00:08:22] Speaker 02:
So I've got it at 248 Pacific Second at 343 and 344.

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But I'll look at that and look at it a little more carefully during my time before rebuttal.

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The second point I want to make is that the

[00:08:48] Speaker 02:
Ultimately, besides not finding that the deed was limited to railroad purposes, the CFC found that it was an open-ended, unrestricted, general right-of-way easement, which is a judicial unicorn.

[00:09:03] Speaker 02:
And easement, by definition, has to be for a particular purpose.

[00:09:08] Speaker 02:
Apparently not under Oregon law.

[00:09:11] Speaker 02:
I don't agree with that at all, Your Honor.

[00:09:13] Speaker 02:
I believe any easement has to be for a particular purpose.

[00:09:17] Speaker 02:
And I believe that's true under Oregon law as well.

[00:09:20] Speaker 02:
And even in the criterion opinion, the deed was for a particular purpose.

[00:09:25] Speaker 02:
It was for ingress and egress to a larger parcel that allowed it to be used

[00:09:30] Speaker 02:
for the larger parcel was used for agricultural purposes, and they changed it to recreational purposes.

[00:09:36] Speaker 02:
I do not believe they changed the underlying deed for ingress and egress to recreational purposes and criteria.

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And so the reason that an easement deed to a railroad cannot be a general unlimited easement is because

[00:09:59] Speaker 02:
It has to be a foreseeable use, and you can't change the use.

[00:10:05] Speaker 02:
That's been the law that this court has enunciated over and over again.

[00:10:10] Speaker 02:
When in preso two, they said it's beyond imagination that they intended to grant a hiking and biking trail easement.

[00:10:20] Speaker 02:
And then later in toes when this court said it's beyond capital.

[00:10:23] Speaker 02:
that they intended to grant such an easement?

[00:10:26] Speaker 01:
Well, counsel, the Court of Federal Claims determined that the deed broadly conveyed a right of way.

[00:10:33] Speaker 01:
Broadly conveyed a right of way.

[00:10:35] Speaker 01:
That's right, Your Honor.

[00:10:35] Speaker 01:
So what's wrong with that?

[00:10:37] Speaker 02:
I think that is a judicial unicorn.

[00:10:39] Speaker 02:
It has to be for a particular purpose.

[00:10:41] Speaker 02:
What do you mean, judicial unicorn?

[00:10:42] Speaker 02:
It doesn't exist.

[00:10:44] Speaker 02:
A broad, open-ended, unrestricted grant is the opposite of what an easement actually is.

[00:10:51] Speaker 02:
And easement is the right to use it for a particular solitary purpose, to use it for that purpose without ownership.

[00:10:59] Speaker 02:
And if you give a broad unrestricted open right of way easement, that's contrary to basic property law.

[00:11:08] Speaker 02:
The third point I want to make, and I hope we don't even have to get to this issue, but that's the issue of state law abandonment.

[00:11:16] Speaker 02:
Here under these facts, the CFC also ruled

[00:11:21] Speaker 03:
that this easement was not abandoned prior to- Do you conclude that the easement was broad enough to cover rail use and trail use?

[00:11:30] Speaker 03:
Do you agree there's no evidence of the railroad's intent to abandon the easement for trail use?

[00:11:36] Speaker 02:
Do you agree with that?

[00:11:38] Speaker 02:
I do agree that there is no direct evidence that they intended to abandon it for trail use, other than the fact that they never used it for any purpose other than railroad purposes for over 100 years.

[00:11:50] Speaker 02:
And if they had a non-use alone is not abandonment.

[00:11:57] Speaker 02:
Here they had non-use starting in 2007 when the catastrophic storms wiped it out.

[00:12:03] Speaker 02:
The Oregon legislature and the governmental agencies in Oregon then started on a campaign to use other governmental agencies to convert it from a railroad easement to a hiking and biking trail easement.

[00:12:19] Speaker 02:
If it had been broad enough to encompass all uses, including hiking and biking trail easement, they would not have needed to do that.

[00:12:27] Speaker 02:
They could have just done it on their own without using the Trails Act.

[00:12:29] Speaker 02:
The Trails Act allowed them the vehicle by which they could convert that easement from a hiking and biking or from a railroad purposes easement to a hiking and biking trail easement.

[00:12:41] Speaker 02:
And the government's trying to read Prawn 3 of Preso 2 completely out of the law.

[00:12:46] Speaker 02:
They basically say it's not applicable because it's irrelevant, because it's not abandoned under federal law.

[00:12:52] Speaker 02:
That is completely incorrect.

[00:12:55] Speaker 02:
I'm well into my rebuttal time, and I'll reserve a couple minutes if I can.

[00:12:59] Speaker 01:
Thank you, Your Honor.

[00:13:00] Speaker 01:
We'll give you two minutes.

[00:13:03] Speaker 01:
Ms.

[00:13:03] Speaker 01:
Shugart-Schmidt.

[00:13:05] Speaker 00:
Good morning, Your Honors, and may it please the court.

[00:13:07] Speaker 00:
Keelan Shugart-Schmidt here on behalf of the United States.

[00:13:10] Speaker 00:
Your honors, I think you are absolutely correct about where the analysis for this case has to start, and that is with Oregon law.

[00:13:16] Speaker 00:
And what Oregon case law tells us is that there is a very specific set of steps we go through when we are looking at and interpreting deeds.

[00:13:23] Speaker 00:
In this case, the first thing that we look to are the words of the deed.

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And as the CFC found through this long chain of cases, there are a variety of deeds that have been at issue along this rail corridor.

[00:13:33] Speaker 00:
Some of those words

[00:13:34] Speaker 00:
meant that the deed conveyed to be simple.

[00:13:37] Speaker 00:
Some of those words meant that the deed conveyed an easement that was restricted explicitly to railroad or transportation purposes.

[00:13:44] Speaker 00:
And some deeds, like this one here, were very broad and open-ended and contained essentially no restrictions on use of a right of way passing across this land.

[00:13:54] Speaker 00:
And I think that that's really important context to start with, right?

[00:13:56] Speaker 00:
And I think we get that from the Criterion Interest Case or from the Verzanio case, where it lays out that framework.

[00:14:05] Speaker 00:
And then it follows that by saying, if the words are clear, and here I think those words are clear, right?

[00:14:09] Speaker 00:
There's no restriction other than this ability of Western timber to pass through.

[00:14:13] Speaker 00:
What that results in is an easement that's granted for unrestricted reasonable use.

[00:14:20] Speaker 00:
And I think that's just very clear from the case law.

[00:14:22] Speaker 00:
And I think in terms of this question about, you know, does it have to be for a purpose?

[00:14:27] Speaker 00:
Well, I think this easement was a right-of-way and both, you know, Oregon state law in their cases and Black Law Dictionary tell us that a right-of-way is the right to pass through property used by another and that's what this easement was for.

[00:14:40] Speaker 00:
It was for the railroad to be able to pass through this land.

[00:14:43] Speaker 00:
It was a broad and unrestricted grant and as such,

[00:14:47] Speaker 00:
Oregon tells us that you can use an unrestricted easement like that for almost anything as long as it's within the scope of this right of way.

[00:14:55] Speaker 00:
And I think criterion interest also informs us that you can have these sort of broader changes in use, say from agricultural uses, moving cattle, all the way to recreational use, and that can be encompassed within the scope of this broad deed.

[00:15:10] Speaker 00:
The other point I'd like to make on this is that

[00:15:13] Speaker 00:
I think it's important to keep in mind that the test that's laid out here says the first question is, do we have a deed that conveys fee simple, or does it convey an easement?

[00:15:23] Speaker 00:
And then our second question is, is this easement broad enough to encompass the type of trail use we're talking about?

[00:15:29] Speaker 00:
And under plaintiffs' reading of the law or interpretation of the law, we would never answer that second question, because it would just be a flat rule that any time a railroad acquired property, it had to be for railroad purposes, and it would never be able to be broader than that.

[00:15:42] Speaker 00:
And I think that's just a little illogical and isn't consistent with the case law, which says you can have broader easements.

[00:15:48] Speaker 00:
Railroads can bargain for them just like any other party.

[00:15:50] Speaker 00:
And once you've acquired that broader easement, you're entitled to use it as long as it's reasonable and not an undue burden, which plaintiffs haven't put forth any evidence in the CFC.

[00:16:00] Speaker 00:
And so they've waived that here, the idea that there'd be any higher burden.

[00:16:03] Speaker 00:
It's consistent with that use.

[00:16:05] Speaker 00:
They're allowed to move forward with it.

[00:16:07] Speaker 03:
I'm not usually a fan of a hypothetical, but let me go there this time with you, OK?

[00:16:11] Speaker 03:
If the railroad charter were actually incorporated in the deed, would your position be different?

[00:16:17] Speaker 00:
I think that's a tougher question.

[00:16:19] Speaker 00:
I think under Oregon law, it says look to the text.

[00:16:21] Speaker 00:
And if the text explicitly said, we have a purpose that's incorporated, that would be a closer question or a tougher question.

[00:16:28] Speaker 00:
But I also don't think that that's the question here, because I think it's clear that that's not the case.

[00:16:33] Speaker 00:
And there's no point where plaintiff has pointed to text in the deed to say it is explicitly incorporated or otherwise included in the text of the deed.

[00:16:43] Speaker 00:
And I think I'm not as familiar with that with regard to all of the other deeds along this line, but I don't think that there was any sort of standard practice with regard to that, right?

[00:16:51] Speaker 00:
The deeds were individually bargained for.

[00:16:52] Speaker 00:
They got different bundles, and in this case, it was a very broad easement that was bargained for.

[00:16:59] Speaker 00:
Another point sort of on this broader issue is

[00:17:04] Speaker 00:
Plaintiff spends a lot of time talking about other cases that hold different things, but I'd say there's a bucket of cases that say this is the difference between a fee simple and an easement.

[00:17:15] Speaker 00:
There are cases that say this is what happens when you have a broad easement, like criterion interests.

[00:17:19] Speaker 00:
And the third bucket might be here are cases where there's a broad easement and we've limited it.

[00:17:24] Speaker 00:
And plaintiff hasn't pointed to any cases in that bucket, because there don't really appear to be any.

[00:17:28] Speaker 00:
They point to cases talking about the difference between a fee simple and an easement and claim that they are informative on the other issue, but they just don't speak to that at all.

[00:17:36] Speaker 00:
So the cases that we do have to guide us like criterion are very clear that when you have an open deed, it can be used for any reasonable use, like this one is.

[00:17:47] Speaker 03:
I'm going to ask you to distinguish, even though I recognize it's applying Vermont law, right?

[00:17:52] Speaker 03:
But can you go ahead and distinguish pre-CELT?

[00:17:54] Speaker 03:
Because your opposing counsel likes to talk about that case a lot, pre-CELT, too.

[00:17:58] Speaker 00:
Well, I think you hit on the clear distinction, which is that that is a case that's applying Oregon law.

[00:18:02] Speaker 00:
And so it's just different.

[00:18:03] Speaker 00:
Sorry, sorry, Vermont law.

[00:18:05] Speaker 00:
I apologize, Your Honor.

[00:18:06] Speaker 00:
That is a case that applies Vermont law.

[00:18:07] Speaker 00:
And that's the question here, right?

[00:18:08] Speaker 00:
What does state property law tells us about what an easement is, or if this is a fee simple property interest, or whatever else?

[00:18:14] Speaker 00:
And that is a distinction that's material, right?

[00:18:17] Speaker 00:
That case applies to Oregon law.

[00:18:20] Speaker 00:
This case only deals with Oregon law, and those are the cases that we should be looking to to guide our interpretation of the easement.

[00:18:28] Speaker 00:
That case did talk about the Bernards case some.

[00:18:30] Speaker 00:
I think the Bernards case is actually sort of useful generally.

[00:18:33] Speaker 00:
I think it talks about the difference of moving between a

[00:18:38] Speaker 00:
railroad line to a railroad road and actually says, you know, you can make those kinds of, sorry, logging railroad to a logging road.

[00:18:46] Speaker 00:
It says you can make those types of changes and actually the type of transit over it isn't that essential because you can have a horseback or a wagon and carriage and a car and those are all means of transport over a road.

[00:18:58] Speaker 00:
So I think Bernard's is a useful case in terms of it being Oregon law, but the fact that it was cited to in

[00:19:03] Speaker 00:
The other case is just not relevant, because that was dealing with Vermont law.

[00:19:10] Speaker 00:
If there are no other questions about the scope of the easement or the use of it, I would just turn briefly to abandonment and say, I want to highlight here that the abandonment of a property interest in Oregon is a very high standard and requires

[00:19:24] Speaker 00:
specific, either explicit conduct or implicit conduct words that are very clear, combined actions.

[00:19:33] Speaker 00:
There's a test for it, and that test has not been met here.

[00:19:37] Speaker 00:
The fact that the railroad or the POTB was actively involved in conversations with different groups, I think over the years makes clear it was interested in using its property interest.

[00:19:47] Speaker 00:
It first acquired this in order to try and restore service on the rail.

[00:19:51] Speaker 00:
That was obviously disrupted by severe weather.

[00:19:54] Speaker 00:
It didn't have the financial capacity to restore service.

[00:19:57] Speaker 00:
It looked for other options to continue.

[00:19:59] Speaker 00:
It's intended to continue that use.

[00:20:01] Speaker 00:
And in this case, the fact that it entered into the STIA prior to sending, which was the interagency trail agreement, prior to submitting any notice to the STB about abandoning rail service, I think is very informative, because it shows it was intending to use and to continue to use its easement in some manner, and thus didn't abandon it under Oregon property law.

[00:20:25] Speaker 00:
And with that, unless Your Honors have further questions, I would thank you.

[00:20:31] Speaker 01:
Mr. Stewart, you have two minutes.

[00:20:33] Speaker 01:
Thank you, Your Honor.

[00:20:34] Speaker 01:
Just a couple of quick.

[00:20:35] Speaker 01:
Two minutes.

[00:20:36] Speaker 01:
Two minutes.

[00:20:37] Speaker 02:
Just a couple of quick.

[00:20:38] Speaker 02:
Wait, wait, wait.

[00:20:39] Speaker 02:
I'm sorry.

[00:20:39] Speaker 02:
OK, go ahead.

[00:20:41] Speaker 02:
I think the whole premise of the government's argument about the scope is it just doesn't say for railroad purposes only.

[00:20:48] Speaker 02:
But if you look at Oregon law under Trestle, you have to look at the context of the deed, which is the charter, and the surrounding circumstances

[00:20:57] Speaker 02:
which was that it was already staked out, laid out, and ready for use pursuant to that charter.

[00:21:05] Speaker 02:
That's the context of that deed, which you have to look at under Oregon law.

[00:21:10] Speaker 02:
Number two, the government referred to the discussion of the Barnard's opinion in preso two, but the discussion of the Barnard's opinion in preso two is directly related to the scope of the easement, not to whether it conveyed a fee.

[00:21:26] Speaker 01:
Where does the Barnard case help you?

[00:21:29] Speaker 01:
I've read the case.

[00:21:30] Speaker 01:
I've looked at those pages that you cited a moment ago.

[00:21:34] Speaker 01:
I don't see that they say anything helpful to you.

[00:21:36] Speaker 02:
I think Bernards, you have to go, Bernards cites the Wason v. Pills case from 1897 on the purpose of scope, which in turn cites the Oregon Railway case from 1872.

[00:21:50] Speaker 02:
Both of those had no restrictions in the deeds whatsoever for railroad purposes, and the Oregon Supreme Court had no hesitancy whatsoever in ruling that the scope of those deeds were limited to railroad purposes only.

[00:22:05] Speaker 02:
And so I think if you look at the totality of Oregon law from 1872 to 1892 to 1952, and then ultimately the inclusion in preso too, I think it is clear that Oregon law recognizes that a D-2A railroad for the construction and operation of the railroad is limited to railroad purposes only as a matter of law.

[00:22:30] Speaker 02:
With respect to the scope of the easement, I just think it's implausible

[00:22:35] Speaker 02:
that any grantor in 1907 intended to grant a broad, open-ended, unrestricted easement to the railroad that could later be converted to a hiking and biking trail by the Federal Trails Act.

[00:22:52] Speaker 01:
OK, I think we're out of time.

[00:22:54] Speaker 01:
Thank you, Mr. Senator.

[00:22:55] Speaker 01:
Thank you, John.