[00:00:00] Speaker 01:
Pointing is 161663.

[00:00:01] Speaker 01:
I'm going to probably butcher this name, but I'll call it Kaplan versus US.

[00:00:07] Speaker 01:
And you can correct me if I'm wrong.

[00:00:09] Speaker 01:
Ms.

[00:00:09] Speaker 01:
Kranz.

[00:00:16] Speaker 02:
Good morning.

[00:00:17] Speaker 02:
May it please the court?

[00:00:18] Speaker 02:
My name's Eric Kranz.

[00:00:19] Speaker 02:
I represent the United States in this case.

[00:00:21] Speaker 02:
And with me at counsel's table is Tyler Burgess, also from the Justice Department.

[00:00:25] Speaker 02:
In this Trails Act takings case, the CFC erroneously held that the government action affected a physical taking that was per se compensable.

[00:00:34] Speaker 02:
The court reached this conclusion even though Section 8D of the Trails Act was never triggered by a trail use agreement.

[00:00:40] Speaker 02:
And so trail use was never authorized, and the statute's effect of precluding easement expiration was never made operational.

[00:00:47] Speaker 01:
So what is your position?

[00:00:48] Speaker 01:
So this is one of the more unusual cases, at least unlike Caldwell.

[00:00:52] Speaker 01:
Caldwell, well, there was ultimately a conversion.

[00:00:55] Speaker 01:
trails, right?

[00:00:56] Speaker 01:
That's correct.

[00:00:57] Speaker 01:
Ladd, there wasn't?

[00:00:57] Speaker 02:
Ladd was the only case this court has heard where there was not a conversion to trail use.

[00:01:01] Speaker 01:
And here there is or is not a conversion?

[00:01:03] Speaker 01:
There is not a conversion to trail use.

[00:01:05] Speaker 01:
So we're just talking about what is arguably a temporary taking, right?

[00:01:10] Speaker 02:
That's right.

[00:01:11] Speaker 02:
Well, and we're talking about the framework for analyzing a takings claim.

[00:01:14] Speaker 02:
We think that's critical.

[00:01:16] Speaker 02:
So again, Ladd was the first case you've seen that didn't involve a need to, or sorry, involved a need to but not a conversion to trail use through a trail use agreement.

[00:01:24] Speaker 02:
And that is the moment when Section 8D, that's the part of the Trails Act statute that actually, under Purcell, could affect a taking.

[00:01:34] Speaker 02:
Section 8D is the provision that prevents easement expiration under state law and allows interim trail use in rail banking.

[00:01:43] Speaker 02:
So in a case like this, this is the first case to reach final judgment since LAD.

[00:01:47] Speaker 02:
And of course, we asked for a mock hearing in LAD also.

[00:01:51] Speaker 02:
And so here we are again.

[00:01:53] Speaker 02:
In this case, we think this case shows how wrong LAD was.

[00:01:58] Speaker 03:
Is your position that when there is no ultimate trail agreement reached, is your principal position or one of your positions there is no taking or rather an analysis under some non-bright line rule is required?

[00:02:19] Speaker 02:
Essentially both, but as a preliminary matter, that you have to use a multi-factor test like Pentzen.

[00:02:26] Speaker 01:
I don't understand what both means.

[00:02:29] Speaker 04:
Well, we would, of course, argue that... If it's your position, you want us to overturn Caldwell and say that the NITU is not itself a determinant factor in the taking and analysis, that the only taking is the actual agreement.

[00:02:43] Speaker 02:
That's right, for a physical taking anyway.

[00:02:45] Speaker 04:
Your backup is that

[00:02:48] Speaker 04:
when we're looking at this temporary period when there's been no conversion that has to be done under regulatory taking.

[00:02:54] Speaker 04:
That's right.

[00:02:55] Speaker 03:
I'm sorry, you keep putting a little qualifiers.

[00:02:58] Speaker 03:
Is one of your positions that when there is no ultimate trail agreement, there is no taking?

[00:03:09] Speaker 02:
Our position is if there is no, if Section AD is not triggered, that cannot support a physical

[00:03:17] Speaker 02:
takings claim.

[00:03:19] Speaker 02:
It could be analyzed as a regulatory takings claim.

[00:03:21] Speaker 02:
If you applied those pencentral factors, we would spit.

[00:03:24] Speaker 02:
No, you would not.

[00:03:25] Speaker 01:
Why isn't it a temporary take?

[00:03:27] Speaker 01:
Before we get into regulatory versus physical, it's a temporary taking, right?

[00:03:32] Speaker 01:
I mean, assuming that during, I guess during the NITU period, a number of things might happen.

[00:03:38] Speaker 01:
That's right.

[00:03:38] Speaker 01:
The rail could do nothing other than talk to the trail people, or they could actually

[00:03:44] Speaker 01:
give the land over and it could be used for a trail during that interim period, irrespective of the abandonment.

[00:03:52] Speaker 01:
So let's assume that happens.

[00:03:54] Speaker 01:
And during that interim period, they exceed what the rights are under the easement and in fact do use the property for a trail, for trail use.

[00:04:05] Speaker 01:
During just the need to period?

[00:04:06] Speaker 01:
Yes.

[00:04:07] Speaker 01:
Yes.

[00:04:07] Speaker 01:
We're only talking about the need to.

[00:04:08] Speaker 02:
That's not permitted by the need to.

[00:04:11] Speaker 02:
Trail use is only permitted once there's a trail use agreement in place.

[00:04:15] Speaker 01:
So what is the extent to which they can do under the NITU?

[00:04:17] Speaker 01:
They can just negotiate, but they have to keep the... That's correct.

[00:04:21] Speaker 02:
The uses that are permitted under the NITU are exactly the same as what was permitted under the original easement.

[00:04:27] Speaker 02:
So it's still defined by the easement that the railroad holds.

[00:04:31] Speaker 02:
The railroad's permitted to do things like start to take up tracks, move towards abandonment, but no, trail use is not allowed until that trail use agreement is reached.

[00:04:41] Speaker 02:
which triggers Section AD, and that is the moment when any physical taking could possibly accrue and liability could attach.

[00:04:49] Speaker 03:
So you've made an argument, I think principally relying on Tahoe-Sierra, that delays in government consideration.

[00:05:04] Speaker 03:
are either not a taking or subject to some non-bright line taking analysis.

[00:05:10] Speaker 03:
I keep using that because it seems to me, I don't know whether the Arkansas, the bit at the end of the Arkansas game commission is the same as Penn Central or different from Penn Central or what, but some non-bright line analysis.

[00:05:23] Speaker 03:
And it seemed to me that in, at least in Tahoe Sierra, and I can say my question is, is there any case of the following sort?

[00:05:33] Speaker 03:
Here we have the government saying, you, the property owners, gave up your right only against a railroad use.

[00:05:45] Speaker 03:
The question of railroad use is over and done with.

[00:05:48] Speaker 03:
The July 3, NITU says, we are done with that.

[00:05:53] Speaker 03:
The only reason we are delaying reversion of your property right is to consider whether we're going to take it

[00:06:02] Speaker 03:
you know, in a full physical way.

[00:06:05] Speaker 03:
Why in the world would that be subject to a regulatory takings analysis when the government delay is only to consider whether to seize the thing, seize it in the sense of giving it to somebody else indefinitely for hikers and bikers.

[00:06:20] Speaker 02:
Your question touched on this.

[00:06:21] Speaker 02:
At the moment of the need to, it's not at all clear what will happen.

[00:06:24] Speaker 02:
It may result in a trail use agreement.

[00:06:27] Speaker 03:
But it's not going to result under the need to in, um,

[00:06:32] Speaker 03:
non-abandoned.

[00:06:33] Speaker 02:
That's not correct.

[00:06:35] Speaker 02:
This is not purely hypothetical.

[00:06:36] Speaker 02:
There's already been a case decided in the CFC where this is the Ememer case that we discussed in our briefing, where there was a need to to simplify the facts of it.

[00:06:45] Speaker 03:
But that's just the railroad's choice, right?

[00:06:48] Speaker 02:
That's right.

[00:06:48] Speaker 03:
And that's important.

[00:06:49] Speaker 03:
The July 3rd need to says, and in fact, if I remember right, under your regulation, they didn't even need permission for this.

[00:06:59] Speaker 03:
This is actually by regulation exempt.

[00:07:02] Speaker 03:
Cause they hadn't used it for two years or five years or whatever, whatever it was.

[00:07:05] Speaker 03:
So it was actually exempt.

[00:07:07] Speaker 03:
The only condition that, or the condition on the easement was you have to use it for this.

[00:07:15] Speaker 03:
And the government has now said, we are not ourselves taking action for any purpose related to that use anymore.

[00:07:26] Speaker 03:
We're only taking action to buy time to allow a real take

[00:07:32] Speaker 03:
Why would that be subject to a regulatory taking analysis?

[00:07:36] Speaker 02:
Because that is but a regulatory action.

[00:07:39] Speaker 02:
We think it's not unlike a situation like Locke versus Hirsch, where you have a pre-existing relationship between a landlord and a tenant.

[00:07:48] Speaker 02:
The government comes in, messes with that relationship, tells the tenant that it can hold over beyond the time the landlord would prefer.

[00:07:55] Speaker 02:
And the Supreme Court said, that's not a bright line taking.

[00:07:59] Speaker 02:
You've got to ask whether that regulation goes too far.

[00:08:02] Speaker 03:
In a case like... All of those cases, including Block, are about police power interests in the use to which the property is being put.

[00:08:13] Speaker 03:
Once you issue your July 3rd NITU, you have said, as far as the government is concerned, we're not interested anymore in railroad use, which was the precondition for keeping the property

[00:08:30] Speaker 03:
out of the hands of the underlying fee interest owner.

[00:08:34] Speaker 03:
Now you're just talking about we may have an interest in using our essentially condemnation power, not formally, but our physical takings power the way we always do for a public purpose.

[00:08:47] Speaker 03:
It seems to me that has crossed the line into we're just preparing, trying to arrange a real physical take.

[00:08:55] Speaker 02:
There's a couple of things here.

[00:08:57] Speaker 02:
So for one thing, the Memer case, I think,

[00:09:00] Speaker 02:
demonstrates that a need to does not always- That's what the railroad said.

[00:09:05] Speaker 02:
The railroad said, never mind, actually, we're not going to abandon.

[00:09:07] Speaker 02:
We're going to continue our railroad use.

[00:09:09] Speaker 02:
So it's hard to see.

[00:09:10] Speaker 02:
If you follow LAD, and particularly the CFC's interpretation of LAD as requiring a finding of a per se compensable taking here, you get results like MEMR, where it's hard to see how the government action delayed anything, because the railroad essentially said, never mind, not going to abandon after all.

[00:09:30] Speaker 03:
I didn't see an argument in this court from you that said, look, conceptually, there's a difference in time between the NITU issuance and the date that, in the absence of the Rails to Trails Act, the railroad would have abandoned it.

[00:09:45] Speaker 03:
And it's crucial in every one of these cases that we identify the 30-day difference or the 60-day difference.

[00:09:51] Speaker 03:
I didn't see you making an argument in this court about that.

[00:09:55] Speaker 02:
In this case,

[00:09:57] Speaker 02:
There is something interesting about this particular case because, of course, when a railroad files a petition for abandonment or a notice of exemption, it's not as though it abandons its line right away.

[00:10:09] Speaker 02:
It has a full year to use its discretion to do so.

[00:10:13] Speaker 02:
It can get extensions.

[00:10:14] Speaker 02:
Sometimes it likes not to.

[00:10:16] Speaker 04:
That's true even if a NITU isn't filed.

[00:10:20] Speaker 02:
That's right.

[00:10:20] Speaker 02:
That's what I'm saying.

[00:10:21] Speaker 02:
So in the but for situation, if there had been no NITU, the government, or sorry, the railroad would have had a full year to consummate abandonment.

[00:10:29] Speaker 02:
As it turns out, in this case, the NITU expired, the railroad quickly abandoned.

[00:10:34] Speaker 02:
All of that happened.

[00:10:35] Speaker 02:
The Eastman reverted to underlying landowners within that one year.

[00:10:40] Speaker 02:
So it's very difficult to know whether there was even a delay here at all.

[00:10:46] Speaker 04:
I want to point out that... I know we've asked you this about three times already, but can I get back?

[00:10:52] Speaker 04:
It seems to me that your big point then is we shouldn't view the NITU as a taking at all or at best under a regulatory taking doctrine where it's almost never going to be compensable.

[00:11:04] Speaker 02:
Right.

[00:11:05] Speaker 02:
We think the best framework for analyzing these cases is to set the date of accrual for permanent physical takings, which is

[00:11:14] Speaker 02:
the type of case that you had in Purcell, Caldwell, Barclay.

[00:11:18] Speaker 02:
At the moment, the statute's preclusive effect is actually triggered, and that is when a trail use agreement is reached.

[00:11:24] Speaker 02:
The need to is just- So that's not the position you took in Caldwell, though, right?

[00:11:27] Speaker 02:
That is the position that we took in this court in Caldwell.

[00:11:30] Speaker 03:
But in the subsequent cases, you did embrace the Caldwell rule.

[00:11:33] Speaker 02:
We acquiesced to this court's decision.

[00:11:36] Speaker 03:
That's right.

[00:11:36] Speaker 03:
suits dismissed as untimely.

[00:11:39] Speaker 02:
At the time of Caldwell, of course, it was not at all clear to us that LAD was going to be the result, that this court was going to determine that a need to, on its own, with nothing more, constitute a physical taking.

[00:11:51] Speaker 02:
Caldwell, of course, included a footnote saying that was not the question for this court and they weren't deciding it.

[00:11:57] Speaker 02:
When LAD was decided, we of course objected strenuously

[00:12:00] Speaker 02:
Judges Moore and Giarza would have taken the case en banc to correct what they called the egregious legal error of Caldwell.

[00:12:07] Speaker 02:
So here we are presenting both of those cases, arguing that they should both be overturned to reform the framework for considering these need-to-only cases.

[00:12:19] Speaker 02:
And here's why it's critical.

[00:12:20] Speaker 02:
This is just one small case, but there are lots of these cases already filed in the court of federal claims.

[00:12:25] Speaker 02:
There are going to be more.

[00:12:27] Speaker 04:
When you say lots, do you have any rough idea?

[00:12:30] Speaker 04:
Because the dollar amount here is really small.

[00:12:33] Speaker 02:
That's right.

[00:12:33] Speaker 02:
This case is unusual in that it only involves one landowner and two parcels.

[00:12:37] Speaker 02:
Many of these cases involve hundreds of landowners.

[00:12:40] Speaker 02:
I believe there are over 100 Trails Act takings claims pending in the Court of Federal Claims right now.

[00:12:45] Speaker 02:
And of course, those aren't all need-to-only claims.

[00:12:48] Speaker 02:
But that is the new strategy for bringing these cases is to file them immediately after the need-to is issued and not wait

[00:12:56] Speaker 02:
to see what's going to happen.

[00:12:57] Speaker 02:
And the Court of Federal Claims thus far, relying on LAD, has been willing to issue liability determinations not waiting to see at all how things play out.

[00:13:05] Speaker 01:
So that includes cases in which there's an abandonment ultimately at the end of the need to or not, right?

[00:13:12] Speaker 02:
That's right.

[00:13:13] Speaker 02:
That's right.

[00:13:13] Speaker 02:
The Court of Federal Claims has said, listen, there's been a need to.

[00:13:18] Speaker 02:
That means there's been liability.

[00:13:20] Speaker 02:
And I also want to point out what happens when

[00:13:23] Speaker 04:
I mean, are there situations where there's liability is determined for the need to, and then there's ultimate abandonment after the fact?

[00:13:30] Speaker 02:
I'm not sure.

[00:13:31] Speaker 02:
Well.

[00:13:32] Speaker 04:
I mean, it seems to be unworkable in a certain sense.

[00:13:39] Speaker 02:
So that would be, I guess, a case like this, if there had been a liability decision before abandonment.

[00:13:45] Speaker 02:
I'm not sure that that has happened.

[00:13:46] Speaker 04:
Well, no.

[00:13:47] Speaker 04:
I mean, I think it would be more like a case like where they found that, well, I don't know what it would be.

[00:13:53] Speaker 04:
At a certain point, if an abandonment actually occurs and the case is dragging on, do they have to hold the case until the decision is actually final on conversion?

[00:14:06] Speaker 02:
I think that's what makes the most sense.

[00:14:08] Speaker 02:
Yes, if you're going to file a case immediately after they need to, I think, yes, it does make sense to hold it and wait and see what happens.

[00:14:15] Speaker 03:
Can I ask you if there were a multi-factor analysis?

[00:14:23] Speaker 03:
Does that look different in every single property by property case?

[00:14:27] Speaker 03:
Or why wouldn't, if you ran down the severity, reasonable investment, backed expectations, duration, why wouldn't one reach a, let's call it categorical judgment, that when the government has said for a period of at least six months, and I gather in some cases much, much longer than six months by virtue of extending these netus,

[00:14:53] Speaker 03:
that that is a taking.

[00:14:56] Speaker 03:
You are dispossessed of a traditionally recognized formal interest in property at the government's behest, subject, of course, to your saying, well, they've either actually

[00:15:08] Speaker 03:
does the railroads change its mind or something like that?

[00:15:11] Speaker 02:
Well, I do think it would involve a property-by-property consideration.

[00:15:14] Speaker 03:
What would be different in that case?

[00:15:16] Speaker 02:
Well, the reasonableness of investment-backed expectations, for one thing.

[00:15:20] Speaker 03:
You bought a piece of land with an easement that's limited to railroads.

[00:15:24] Speaker 03:
The government has said no more railroad interest.

[00:15:26] Speaker 02:
But the abandonment of that easement is always something that the railroad has

[00:15:33] Speaker 02:
right to do, but will not necessarily do.

[00:15:37] Speaker 03:
So these landowners... Except for that, whatever that case you mentioned, like something like... Is that a freakishly rare thing when the railroad says, whoops, we want to run a railroad on here after all?

[00:15:49] Speaker 02:
I'm not sure that it is.

[00:15:50] Speaker 02:
I mean, again, a lot of these cases are being filed... Is there no more than one case?

[00:15:55] Speaker 02:
That's the only case I know of that has had that happen, but that's just what I know.

[00:16:02] Speaker 03:
Anyway, but it seems to me in part, partly I'm wondering, it seems to me when I read the Supreme Court cases, to my mind, something of a open question, what category of takings analysis this sort of thing fits into.

[00:16:19] Speaker 03:
And if I start thinking about the kind of four, three factors in Penn Central or four considerations at the end of Arkansas, it seems to me,

[00:16:28] Speaker 03:
awkward, I guess, to say that there is a case by case variation in the answer to that when exactly the same thing is going on.

[00:16:38] Speaker 03:
You would otherwise have your property right back.

[00:16:41] Speaker 03:
We say, no, you may not.

[00:16:43] Speaker 03:
You're dispossessed of it for this period solely for the reason of our trying to figure out if we can take it from you more or less permanently.

[00:16:53] Speaker 03:
What's left to decide?

[00:16:56] Speaker 02:
Again,

[00:16:57] Speaker 02:
Perhaps we're simply disagreeing about how those factors would be applied.

[00:17:02] Speaker 02:
So in Purcell, this court said the government argued that background principles of property law had sort of affected the landowner's property interest.

[00:17:12] Speaker 02:
And this court said that's not really relevant to a physical taking, which we're talking about because there had actually been a conversion to trail use and confusion of easement reversion.

[00:17:22] Speaker 03:
It's not quite physical, but it's sort of physical.

[00:17:24] Speaker 02:
Right.

[00:17:25] Speaker 02:
So this court said that,

[00:17:28] Speaker 02:
those sort of background principles, the pervasiveness of federal regulation of railroad abandonment, could be relevant to thinking about the reasonableness of investment-backed expectations.

[00:17:41] Speaker 03:
It seems to me that when the NITU says, we, the federal government, have no more interest in railroad use, that that's just gone.

[00:17:52] Speaker 02:
I'm not sure the NITU really says that.

[00:17:54] Speaker 02:
What the NITU says is that

[00:17:56] Speaker 02:
The railroad and a potential trail sponsor have shown an interest in negotiating.

[00:18:03] Speaker 02:
We're going to let them do that for 180 days.

[00:18:05] Speaker 03:
For a purpose, I think, undisputedly here and outside the condition on the 1870 granted ease?

[00:18:18] Speaker 02:
Here's another way that I'm looking at it.

[00:18:19] Speaker 02:
So in a situation like Loretto, which is, of course, that narrow category of permanent physical takings,

[00:18:26] Speaker 02:
We wouldn't think of the moment of taking or the act that constitutes the taking as the statute that would later allow the cable box to be installed on the building.

[00:18:36] Speaker 02:
It's the physical invasion itself.

[00:18:39] Speaker 02:
And that's the analogy we're trying to make here.

[00:18:42] Speaker 02:
In Purcell, again, this court said,

[00:18:44] Speaker 02:
It's not the passage of the Trails Act in 1983 that constituted the taking.

[00:18:49] Speaker 02:
It's when the physical invasion starts.

[00:18:52] Speaker 02:
If you file your case before that, we would think it was unright.

[00:18:55] Speaker 02:
That's what this court said.

[00:18:56] Speaker 02:
I think you can draw an analogy to the need to.

[00:18:58] Speaker 03:
But that's why this is not quite a physical invasion.

[00:19:00] Speaker 03:
This is a government declaration that we hereby forbid you to reacquire your state law rights for a period of time, a traditional piece of proper and easement.

[00:19:12] Speaker 03:
They would have come back to you.

[00:19:14] Speaker 03:
is the railroad use is gone, but you may not have that now for six months, or in some cases, I gather, years and years, because you see these things keep getting extended, and we are legally barring you from doing that.

[00:19:28] Speaker 03:
That's why it's not quite physical, but it's kind of the next best thing.

[00:19:30] Speaker 03:
It's not regulating your use.

[00:19:32] Speaker 03:
It's just saying you can't have your state law property right back.

[00:19:35] Speaker 02:
Well, we would say it is regulating the railroads abandonment, and that's something SDBs... They're not the property owners.

[00:19:42] Speaker 02:
They are an easement holder, right?

[00:19:43] Speaker 03:
And the NITU, when you get to it, says, we, the government, no longer have an interest in the railroad use.

[00:19:53] Speaker 03:
Right.

[00:19:54] Speaker 03:
It's up to you.

[00:19:54] Speaker 03:
If you want to abandon, and as I'm going to infer, almost always when they petition to abandon, they are going to abandon.

[00:20:03] Speaker 03:
There may be a few exceptions, but those seem truly exceptional as far as we're being told.

[00:20:10] Speaker 03:
So there's...

[00:20:13] Speaker 02:
I think we're just looking at it differently.

[00:20:14] Speaker 02:
We see there a strict difference between the moment that Section 8D is actually triggered.

[00:20:21] Speaker 02:
That's the moment when the statute takes effect and it prevents that easement from expiring.

[00:20:26] Speaker 02:
Before that, this is just a regulatory action, much like other types of regulatory actions that might require you to get a permit before you can use your land in the way that you desire.

[00:20:34] Speaker 03:
Doesn't that subsection D actually prevent the reversion?

[00:20:40] Speaker 03:
You all are trying to find a municipality to make it into a trail?

[00:20:44] Speaker 02:
It prevents easement expiration upon, in the case of interim use, which only occurs after a trail use agreement is reached.

[00:20:53] Speaker 02:
That's how the statute reads.

[00:20:55] Speaker 02:
The regulatory language tracks that language saying, if an interim trail use agreement is reached and thus interim trail use established.

[00:21:05] Speaker 02:
That's what we say could be a physical taking.

[00:21:08] Speaker 03:
So the reversion

[00:21:10] Speaker 03:
during, let's say it takes two years or something, because it's just three extensions of 188.

[00:21:15] Speaker 03:
So the reversion could take place during that time, because you said the statute doesn't bar that?

[00:21:21] Speaker 02:
The statute does not discuss use of a need to.

[00:21:27] Speaker 02:
So the statute was passed in 1983.

[00:21:29] Speaker 02:
The SCB regulatory scheme that uses a need to wasn't put in place until much later.

[00:21:34] Speaker 02:
And in fact, in the Purcell case, there was no need to.

[00:21:37] Speaker 02:
The only government action in that case

[00:21:39] Speaker 02:
occurred at the same time as the Trail Use Agreement.

[00:21:42] Speaker 02:
There was no precursor need to.

[00:21:45] Speaker 02:
The fact that STB has changed its regulatory scheme and now does this need to earlier in the process, I think, has obscured the moment of taking.

[00:21:54] Speaker 02:
But it hasn't actually changed it.

[00:21:55] Speaker 02:
That trigger of Section 8D, as this court said in Purseaux and as the statute in Regs read, that establishment of trail use is only allowed

[00:22:07] Speaker 02:
once you've fulfilled the condition of having third parties reach a trail use agreement.

[00:22:13] Speaker 02:
And we're saying, before that moment, you can't have a physical taking.

[00:22:17] Speaker 02:
Maybe you could analyze the need to loan as a potential regulatory takings claim, perhaps an extraordinary delay claim.

[00:22:25] Speaker 02:
If it indeed goes on and on, you would analyze that under Penn Central.

[00:22:30] Speaker 02:
And you could indeed find a taking.

[00:22:31] Speaker 02:
We don't think that you would, but you could.

[00:22:33] Speaker 02:
But we think that's the right framework to analyze these cases.

[00:22:37] Speaker 02:
not the framework that Ladd gave us.

[00:22:41] Speaker 02:
And I see I'm well over time.

[00:22:42] Speaker 01:
Yes, we'll restore a few minutes for you.

[00:22:44] Speaker 02:
Thank you.

[00:22:44] Speaker 01:
Thank you.

[00:22:52] Speaker 00:
May it please the court?

[00:22:54] Speaker 00:
As a threshold matter, this court, as you held in Barclay and Caldwell, can't overturn a previous panel that has ruled on these issues.

[00:23:05] Speaker 00:
Preso 2 was an en banc, and so just as a threshold matter, this court can't overrule those cases.

[00:23:14] Speaker 00:
The government has stipulated that the railroad only held an easement for railroad purposes, and that the Cacklins owned on the date of the need to.

[00:23:23] Speaker 00:
And on the date of the need to, the Cacklins were prevented from using and possessing their property, their use and enjoyment.

[00:23:30] Speaker 04:
Even if we put aside all the government's on block questions, didn't the trial court err by not applying the Arkansas fishing game factors?

[00:23:38] Speaker 00:
No, because there's Brightline rule that we've heard from this court over and over.

[00:23:42] Speaker 04:
Yes, but Arkansas post-dates LAD.

[00:23:47] Speaker 00:
Yes, but as far as Trails Act jurisprudence goes from this court, this court talked about, in preso, about physical takings versus regulatory takings.

[00:23:59] Speaker 04:
Instead of talking about that Arkansas fishing game is a physical takings case.

[00:24:03] Speaker 04:
It's a temporary physical takings though, which is certainly what we have here.

[00:24:08] Speaker 04:
If we have a physical taking at all.

[00:24:10] Speaker 00:
Yes.

[00:24:10] Speaker 04:
And so why didn't the trial court have to apply the factors in Arkansas?

[00:24:15] Speaker 00:
Well, I think because we had guidance from the lab court on temporary takings.

[00:24:20] Speaker 00:
And so again, this, this court has always said that there is a bright line rule that on issuance of the taking or on issuance of the need to.

[00:24:29] Speaker 00:
their taking occurs and whether it's temporary or permanent, we don't know.

[00:24:33] Speaker 04:
Do you think LAD is consistent?

[00:24:36] Speaker 04:
If that's the rule you take from LAD, I'm not sure LAD actually looked at it as a temporary taking, which I think it is under Arkansas.

[00:24:42] Speaker 04:
Do you think LAD is now consistent with Arkansas fishing game?

[00:24:47] Speaker 04:
I'm not really sure about that, Your Honor.

[00:24:50] Speaker 04:
That's the question we have to answer, isn't it?

[00:24:52] Speaker 04:
I mean, we have Supreme Court precedent now.

[00:24:54] Speaker 04:
If LAD's inconsistent, then it's either

[00:24:57] Speaker 04:
been overruled or we have to go on bonk to conform our precedent with Arkansas fishing game.

[00:25:03] Speaker 00:
Well, I think that the position that the government has taken, and which is inconsistent with this court in all the previous trails act takings cases, invites uncertainty.

[00:25:13] Speaker 04:
But what's your position on Arkansas fishing game?

[00:25:16] Speaker 04:
That's what I'm trying to get at.

[00:25:17] Speaker 04:
Do those factors for temporary physical takings apply here, or do you think that this is still a permanent physical taking?

[00:25:27] Speaker 00:
I don't think this is a permanent physical taking.

[00:25:29] Speaker 00:
I think this is a temporary physical taking.

[00:25:31] Speaker 04:
But again... Doesn't Arkansas Fishing Game then make clear that we have to apply that multi-factor test?

[00:25:37] Speaker 00:
I don't think so, because I don't think this is a regulatory taking.

[00:25:40] Speaker 00:
Arkansas Fishing Game is not a regulatory takings case.

[00:25:43] Speaker 04:
It's a temporary physical takings case.

[00:25:45] Speaker 04:
If you admit that this is a temporary physical takings, then doesn't it have to go back in some form, either through an en banc action or from the panel, to apply those factors?

[00:25:56] Speaker 00:
Again, I don't think so, Your Honor.

[00:25:58] Speaker 00:
Why not?

[00:25:59] Speaker 00:
Because I think that the precedent from this court, and we had it en banc and preso too, the precedent from this court saying that this is a bright line rule and to invite a different analysis would just create uncertainty as the court held in Barclay.

[00:26:16] Speaker 03:
Can I just pursue that a little bit?

[00:26:20] Speaker 03:
There are intervening Supreme Court decisions after an otherwise governing panel decision.

[00:26:26] Speaker 03:
And we have to make a judgment.

[00:26:27] Speaker 03:
Sometimes the judgment is the intervening Supreme Court decision is actually sufficiently clear that even a panel of this court can say that a previous panel decision has been superseded.

[00:26:37] Speaker 03:
And sometimes we make a slightly lesser judgment, which is, hmm, we need to rethink this.

[00:26:42] Speaker 03:
And then we often take those matters en banc.

[00:26:45] Speaker 03:
So focus on Arkansas game decision, in particular the

[00:26:50] Speaker 03:
the last couple of pages of that decision that say that the repeated increased flooding in that matter needed to be subject to consideration of a number of factors.

[00:27:10] Speaker 03:
Severity, reasonable investment backed expectations, the effect on that duration.

[00:27:21] Speaker 03:
And suppose we're thinking, as I think we are thinking, about what effect that ruling has on what we have here.

[00:27:29] Speaker 03:
Do you have thoughts about whether the recurrent flooding for purposes of helping agriculture or something like that might be different, is the same as what's going on here?

[00:27:44] Speaker 00:
I think it's distinguishable because here you're not just interfering with some use of the property.

[00:27:51] Speaker 00:
Here you're dispossessing and interfering with the complete use of the property on the date the need to is issued.

[00:27:57] Speaker 00:
So it's not that you're, like I said, interfering with certain uses of the property.

[00:28:02] Speaker 00:
The landowners are dispossessed physically from the property on the date of the need to.

[00:28:08] Speaker 00:
Now, it is true that if the need to is abandoned or a notorious agreement is reached, then they are back in possession of their land, but they have been blocked for a certain period of time.

[00:28:20] Speaker 00:
The cases that have NITUs, there are several cases, many, many instances where a NITU is issued and it's extended for years, seven, eight years.

[00:28:31] Speaker 00:
And so then we have a problem with uncertainty again, because if we wait until a trade agreement, what about those eight years at that landowner when they only agreed to railroad purposes, you know, for easement for railroad purposes, and now the federal government has come in and interfered and blocked their right to their land

[00:28:50] Speaker 00:
I mean, so that's a permanent, I'm not saying it's not a permanent taking, but that's a temporary taking.

[00:28:55] Speaker 00:
And temporary takings, the compensation for temporary takings are very different than the compensation for permanent takings.

[00:29:01] Speaker 00:
Temporary takings, the compensation is for rent value.

[00:29:04] Speaker 00:
And permanent takings, it's for just compensation of the fair market value of their land.

[00:29:09] Speaker 03:
You know, by the way, I was discussing with government council how often it happens that a railroad having

[00:29:17] Speaker 03:
filed for abandonment changes its mind and decides no longer to abandon.

[00:29:21] Speaker 03:
Are you aware of more than the one case that was mentioned?

[00:29:24] Speaker 00:
I am aware of another case as well.

[00:29:26] Speaker 00:
It's a case called Sour West and the railroad hadn't run trains for 30 years and they tried to find a trail use agreement with someone and it went on for seven, eight years.

[00:29:38] Speaker 00:
And then the railroad came back in and said, wait a minute, we don't want to abandon.

[00:29:42] Speaker 00:
But those landowners have not been able to use their land or put their farms back together.

[00:29:46] Speaker 00:
You know, it is a problem.

[00:29:49] Speaker 00:
And it happens, that happens more often than not that you have a need to issue and then it's extended for years and years and years.

[00:29:59] Speaker 00:
And so, you know, I think that that is a problem with the government's analysis.

[00:30:06] Speaker 00:
And that's why I think that the case law has developed in Trails Act takings the way it has.

[00:30:11] Speaker 00:
We have a bright line rule so that we have certainty.

[00:30:13] Speaker 00:
And it may be that, you know,

[00:30:15] Speaker 00:
not, you know, a long taking, or it's a very short temporary taking, or it's a very long temporary taking.

[00:30:22] Speaker 00:
But that's why I believe that the law has developed as it's said.

[00:30:25] Speaker 00:
And that's why I preso... Do you think there are two takings here?

[00:30:29] Speaker 04:
If the NITU goes on for seven or eight years, and then is ultimately converted, is the seven or eight year period a temporary taking, and the conversion of physical, permanent physical taking?

[00:30:41] Speaker 00:
I would think that upon issuance of the need to, because you don't know whether it's going to be temporary or not upon issuance of the need to.

[00:30:48] Speaker 00:
And so once the conversion happens, it's permanent taking.

[00:30:51] Speaker 00:
If the conversion never happens, then it would be a temporary taking.

[00:30:54] Speaker 00:
But you don't know if it's permanent or temporary until a trace agreement is reached or not.

[00:31:00] Speaker 04:
So when you file your case, you don't actually know the character of the taking you're alleging.

[00:31:09] Speaker 00:
No.

[00:31:09] Speaker 00:
When we file our case, we know that the railroad only had an easement for railroad purposes.

[00:31:13] Speaker 00:
We go through the preso test.

[00:31:14] Speaker 04:
You don't know whether it's a temporary taking or a permanent taking.

[00:31:17] Speaker 00:
Unless there's already a truce agreement.

[00:31:19] Speaker 00:
Sometimes that happens.

[00:31:20] Speaker 00:
That happened in preso two.

[00:31:21] Speaker 00:
It happened in other cases.

[00:31:22] Speaker 00:
Right.

[00:31:22] Speaker 04:
But if you're filing right after the need to, before the negotiation period is ended, you don't know whether you're ultimately going to have a temporary taking or a conversion.

[00:31:33] Speaker 00:
If there's no truce agreement reached at that time, then no, you don't.

[00:31:42] Speaker 04:
Again.

[00:31:42] Speaker 04:
That seems a pretty odd way to have a claim accrual date for a claim that you don't know what the actual character of it is.

[00:31:50] Speaker 00:
Well, the other problem that you have is what if the need to is extended for over six years.

[00:31:57] Speaker 00:
And then so by that time you're time barred.

[00:32:00] Speaker 04:
Isn't that why Caldwell is wrong?

[00:32:03] Speaker 00:
No, I think that the Brightline rule is that once the need to, well, Caldwell, they didn't compensate the Caldwell

[00:32:11] Speaker 00:
plaintiffs, because they said your time barred, that was the government's position.

[00:32:14] Speaker 00:
The need to is the finite rule for claim accrual.

[00:32:18] Speaker 00:
That wasn't the government's position in Caldwell.

[00:32:20] Speaker 00:
Well, that's what Caldwell held.

[00:32:21] Speaker 00:
The government had a position under which it also would have been untimely.

[00:32:24] Speaker 00:
Barclay.

[00:32:25] Speaker 00:
And so Barclay affirmed Caldwell.

[00:32:32] Speaker 00:
And Barclay said, as we explained in Caldwell, a taking occurs when the reversionary interests are blocked from vesting.

[00:32:38] Speaker 00:
And Barclay also says that

[00:32:40] Speaker 00:
The need to, 12487D, the need to is the governmental act that triggers a taking.

[00:32:49] Speaker 00:
And it's when the trail operator and the railroad communicate, that's what Berkeley says, when they communicate that they are interested in coming up with some kind of agreement, then the need to is issued.

[00:33:00] Speaker 04:
Except when a conversion occurs, because then the conversion is the act that triggers the taking.

[00:33:06] Speaker 04:
Is it not?

[00:33:07] Speaker 00:
Well, I think that under the Fifth Amendment, it has to be a government

[00:33:10] Speaker 00:
act for you to bring a claim.

[00:33:13] Speaker 00:
I think that's Navajo Nation, but I don't think that you can bring a claim based on acts of third parties in the agreement, which is the ultimate conversion.

[00:33:27] Speaker 00:
That would come from third parties.

[00:33:33] Speaker 04:
Wait, that seems very confusing to me.

[00:33:35] Speaker 04:
So what is the act of the taking when a NITU does an issue?

[00:33:41] Speaker 00:
What do you mean when an NITU doesn't issue?

[00:33:43] Speaker 04:
Well, they don't always issue NITUs in these cases.

[00:33:46] Speaker 04:
So in those instances, what's the act of the taking?

[00:33:50] Speaker 04:
Is it not the conversion to a trail?

[00:33:53] Speaker 04:
Oh, sorry.

[00:33:53] Speaker 04:
There is no trail, right?

[00:33:55] Speaker 00:
There's no liability.

[00:33:56] Speaker 00:
Sorry.

[00:33:57] Speaker 04:
I'm getting wound up in my high five.

[00:33:58] Speaker 00:
There's no liability.

[00:34:00] Speaker 00:
If they don't issue a NITU, then they don't block the reversionary interest, and it just divests the railroad.

[00:34:07] Speaker 00:
after the year period or whatever under the statute.

[00:34:10] Speaker 00:
And I think it's really important for the court to know, too, that you can't issue a need to unless all the conditions for railroad abandonment have been met.

[00:34:18] Speaker 00:
So the railroad's either going to walk away or they're going to come up with a trail use agreement if they can find a trail user.

[00:34:32] Speaker 03:
Can I ask you one question that I don't think anything has been made of in

[00:34:37] Speaker 03:
this court, though, is mentioned in the Court of Federal Claims.

[00:34:42] Speaker 03:
July 3rd, need to, refers to, I guess, a trails agreement possibility, but also refers in passing to a public use.

[00:34:54] Speaker 03:
Public use condition.

[00:34:55] Speaker 03:
Condition, and that seems to have disappeared from at least the briefing in the case.

[00:35:01] Speaker 03:
What am I supposed to make of that?

[00:35:03] Speaker 03:
A lot of times they go hand in hand.

[00:35:04] Speaker 03:
Is that under a separate statutory regime?

[00:35:07] Speaker 00:
Yeah, there is a different statute for a public use condition.

[00:35:11] Speaker 00:
So they have to apply for a public use condition as well.

[00:35:13] Speaker 00:
But I've never seen a case go through a public use condition.

[00:35:18] Speaker 03:
Because these long, skinny rights of way pretty much have one use.

[00:35:23] Speaker 03:
Is that basically trails or nothing?

[00:35:25] Speaker 00:
You know, trails.

[00:35:25] Speaker 00:
And that's really why the Trails Act was developed, is to try and save the network of railroad rights of way that, you know,

[00:35:31] Speaker 00:
were built in the country, and so they thought that would be a great way to do it.

[00:35:37] Speaker 00:
I want to make another point.

[00:35:38] Speaker 00:
The government says that we're arguing a per se taking, and we're not.

[00:35:41] Speaker 00:
The plaintiff's position has never been that every issuance of a need to is a per se taking.

[00:35:46] Speaker 00:
It's only if the conditions of preso have been met.

[00:35:50] Speaker 00:
So the railroad held an easement for railroad purposes.

[00:35:53] Speaker 00:
Trails exceeds the scope of the easement.

[00:35:55] Speaker 00:
Then if they issue a need to, then a taking occurs.

[00:35:58] Speaker 00:
So if the railroad owns land and fee, there's no taking on issuance of a need to.

[00:36:03] Speaker 04:
Again, I think that this court should... I don't really understand that.

[00:36:07] Speaker 04:
But if they have met those conditions, you are arguing that's a per se taking, not a temporary taking.

[00:36:12] Speaker 00:
Well, if they've met the conditions, then it would be a per se taking.

[00:36:15] Speaker 00:
But it's not just a per se, flat out per se taking upon issuance of every need to.

[00:36:19] Speaker 00:
Only the need to is where the railroad owns an easement for railroad purposes, and it's Troy who succeeds the scope.

[00:36:26] Speaker 04:
Then there's... But then it's a per se taking, and in your view, Arkansas doesn't apply.

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

[00:36:33] Speaker 00:
because they block and dispossess the landowners from using their land.

[00:36:39] Speaker 00:
I have your honors.

[00:36:40] Speaker 00:
Thank you.

[00:36:41] Speaker 00:
Thank you.

[00:36:47] Speaker 02:
Just a couple things.

[00:36:48] Speaker 02:
First of all, I'm informed there are several other member type cases where the railroad ultimately elected not to abandon at least a portion of its right of way.

[00:36:58] Speaker 02:
One of those is Creston Memorial, and I believe LAD actually involved a portion of the right-of-way, and LAD had that situation.

[00:37:09] Speaker 02:
We think those sets of cases along with this present, show the bizarre results of LAD, where you do have, as the CFC has interpreted it, a per se finding a physical take, or compensable physical taking in these short points.

[00:37:23] Speaker 04:
I find the whole scheme a little complex, but is it right that

[00:37:28] Speaker 04:
Under our case law and the way the CFC is interpreted, in those instances where NITU has issued but the railroad takes it back, you're now on the hook for at least some type of compensation and attorney's fees.

[00:37:41] Speaker 04:
That's correct.

[00:37:42] Speaker 04:
But if the railroad just issues a notice of abandonment and takes it back after a year, you're not.

[00:37:47] Speaker 02:
That's right.

[00:37:47] Speaker 02:
And we think that makes no sense.

[00:37:50] Speaker 02:
That seems to be it.

[00:37:51] Speaker 03:
Suppose the railroad took it back eight years after the NITU.

[00:37:55] Speaker 03:
And had there never been this NITU scheme,

[00:37:58] Speaker 03:
railroad would have in fact abandoned it, so the fee interest owner has actually lost, essentially permanent, but at least for six years.

[00:38:11] Speaker 03:
Why should that not be compensated?

[00:38:12] Speaker 02:
Well, a railroad, of course, could indicate intent to abandon and then seek extensions of its time for abandonment that amounted to the same amount of taking, and we're not seeing anyone claiming that that's a per se physical taking.

[00:38:25] Speaker 02:
Um, I don't see how it's really any different.

[00:38:27] Speaker 02:
The trail back doesn't do anything extra in that type of situation.

[00:38:30] Speaker 03:
Well, it says when the railroad has said on July 3rd or whenever it applied, um, as this one did, I think, say, we plan to abandon this on or after the, um, approval of the abandonment.

[00:38:47] Speaker 02:
Fans can change though.

[00:38:48] Speaker 03:
And the railroads are always in control of this decision.

[00:38:51] Speaker 03:
They can change.

[00:38:53] Speaker 03:
In the ordinary course, they don't change, and it's left to the railroad to choose whether the reversion occurs.

[00:39:03] Speaker 03:
Here we have the government saying, no, you may not, you the property owner, cannot get this back for 180 degrees plus whatever extensions.

[00:39:17] Speaker 03:
Why is that not a taking for that time?

[00:39:22] Speaker 02:
a mere exercise of the STP's regulatory authority over railroad abandonment.

[00:39:29] Speaker 03:
Yes.

[00:39:31] Speaker 03:
Within the class that we're talking about, the pre-salt class, so a railroad use only easement, what will the Penn Central litigation look like?

[00:39:42] Speaker 03:
It's going to be... Does the government always win because the government always has

[00:39:49] Speaker 03:
this interest in regulatory, in which case it's categorical, but it's a categorical non-taking, or is it going to vary from property to property?

[00:39:56] Speaker 02:
I think it's going to vary.

[00:39:58] Speaker 02:
Why?

[00:39:58] Speaker 02:
Well, it could, in part, depend on how long the... I mean, whether you have an extraordinary delay or not.

[00:40:04] Speaker 03:
It's a short-taking.

[00:40:07] Speaker 02:
I mean, we wouldn't think there would be a taking under Penn Central.

[00:40:10] Speaker 02:
We've set forth how we think the... We haven't argued Penn Central in this case in our briefing, but

[00:40:15] Speaker 02:
At the end of our brief, of course, we explain how we thought the Arkansas game and fish factors would apply.

[00:40:20] Speaker 02:
And you can see from that how we think it probably would apply in Penn Central as well.

[00:40:26] Speaker 02:
So again, I just want to touch on one thing again.

[00:40:31] Speaker 02:
This is a really small case.

[00:40:33] Speaker 02:
But this is one of many.

[00:40:35] Speaker 02:
There are going to be more.

[00:40:36] Speaker 02:
And these attorneys are incentivized to bring these cases because their attorney's fees are covered an amount too many times

[00:40:43] Speaker 02:
many, many times the amount of compensation awarded to landowners.

[00:40:46] Speaker 03:
Are the fees automatic?

[00:40:47] Speaker 02:
The fees are automatic if they receive compensation.

[00:40:50] Speaker 02:
Now, the landowner has accused the government of pursuing a scorched earth policy in these cases, but of course the government has an obligation to protect the public fisc against invalid claims, and that means on a parcel by parcel basis answering those threshold questions in per se, whether there's a, what is the scope of the railroads,

[00:41:09] Speaker 02:
property right?

[00:41:10] Speaker 02:
Was it fee?

[00:41:11] Speaker 02:
Was it railroad purposes?

[00:41:12] Speaker 02:
Was it broader type of easement?

[00:41:14] Speaker 02:
Do the landowners actually possess the property rights they claim to?

[00:41:17] Speaker 02:
It's an extremely resource intensive type of litigation and we want to make sure that this court sets the right framework for analyzing these claims, one that is consistent with Perseaux and with the Trails Act and how it's administered by the STP.

[00:41:33] Speaker 01:
Thank you.

[00:41:34] Speaker 01:
We thank both sides and the