Will "Rails to Trails" Lead to More Title Disputes?
General and legal media outlets were abuzz over this week’s SCOTUS ruling in Marvin M. Brandt Revocable Trust, et al. v. United States, (#12-1173, March 10, 2014). The dramatic coverage (e.g., “Court ruling in land dispute could threaten bike trails,” USA Today, March 10, 2014) has prompted many of our subscribers to ask for our take on the result. Here it is:
At bottom, this particular case was a first-year property class hypothetical: A owns Blackacre. A grants to B an easement over Blackacre for a specific purpose. A subsequently conveys Blackacre to C in fee simple, subject to B’s easement. Later, B abandons his easement. The fee in Blackacre is no longer burdened with the easement. Thus, the 8-1 result was no surprise.
In addition, the United States had not sought to construct or operate a recreation or historic trail over the railroad right-of-way. As a result, Brandt does not directly address the preemption concerns raised by Section 8(d) of the National Trails System Act of 1983 (“the establishment of trails over unused railroad rights of way “shall not be treated, for purposes of any law or rule of law, as an abandonment of the use of such rights-of-way for railroad purposes” 16 U.S.C. §1247(d)).
This opinion turns on the plain meaning of the original easement grant. While it embraces the adoption of common-law principles to determine the nature of property rights, it omits any discussion of Hash v. U.S., 403 F.3d 1308 (Fed. Cir., 2005). In essence, Hash stands for the proposition that common-law principles (usually state law) determine title to the area underlying the “abandoned” right-of-way, regardless of the language of §1247(d). In such a situation, a compensable taking may arise pursuant to Preseault v. Interstate Commerce Commission, 494 U.S. 1 (1990). Hash appears to be safe for the time being.
If anything, Brandt should embolden underlying fee owners to assert their claims. On a practical level, the question arises whether title insurers will wind up footing the bill for some of this litigation. Title insurance policies typically except coverage for claims arising out of the instrument creating the railroad easement, but are not usually crafted to specifically except claims arising out of the termination of the easement.