15.04.14

In which I demonstrate Supreme Court fitness in property law comparable to that of Justice Breyer

I said previously that I had two law posts to make. Here’s the non-Mozilla-related post.

Introduction

I’ve blogged about visiting the Supreme Court for oral arguments before. I had the opportunity to do so again for the extremely interesting week of January 13 earlier this year. I attended oral arguments concerning the Appointments Clause, assembly restrictions in Massachusetts, bankruptcy shenanigans, and railroad property law. A month ago, the first decision, in the property law case, Marvin M. Brandt Revocable Trust v. United States, was announced. I’m going to blog about it a little, because I think it’s cool and because of its impact on rail trails.

Before I do that, I’d like to note that the Marvin M. Brandt Revocable Trust v. United States article on Wikipedia is entirely my work (and my mistakes :-) ). (At present. Release the vandals in 3, 2, 1….) It’s the first article I’ve written start to finish. I’m more than a bit proud of that. And I’m particularly excited to have done it in such a cool area of law. :-)

Background

Back in the 1800s as the United States expanded toward the Pacific Ocean, it needed to be able to efficiently transport goods and people across that distance. At the time, the solution was railroads. So Congress passed acts incenting railroad creation by granting rights of way across federal land. After initially granting rights of way to specific, named railroads in separate bills, Congress streamlined the process in the General Railroad Right-of-Way Act of 1875. Under this act, any railroad meeting certain conditions could get a right of way, til those provisions’ repeal in 1976.

The facts

Fast-foward to (coincidentally) 1976. The United States granted a land patent (that is, a document making clear — “patent” — title to land) to Melvin Brandt for 83 acres in Wyoming, as part of a land swap. One limitation on the grant was that it was subject to a railroad right-of-way originally granted to the Laramie Hahn’s Peak & Pacific Railway Company under the 1875 Act. The grant mentioned no other limitations on the right-of-way.

LHP&P never really worked as a railroad, and it passed through several hands. In 2004 the ultimate owners legally abandoned it. What happened to the right-of-way? This is where things got complicated.

The United States wanted the right-of-way land, so it filed suit to quiet title in its favor to clear up ownership. The United States resolved claims with everyone along the way — except for Marvin Brandt, Melvin’s son.

Brandt’s position

Brandt argued that the right of way was an easement. An easement is a restriction on your ownership of land, that says some other person can enter into and (perhaps) use it for some particular purpose. So your house’s land may have an easement across it for a sidewalk, that allows people to go on the sidewalk, walk through, and briefly stop on it, and you have to accept that. You still own the land; you just don’t quite have free rein over it. (This is why you’re usually responsible for clearing snow off your sidewalk. It’s your land, your fault if someone slips and twists an ankle and it was reasonably foreseeable.) When an easement terminates, the land is unburdened by the easement. No physical property changes hands, the easement just doesn’t exist, and the land owner can again prevent entry and use of his land.

Brandt buttressed this argument by pointing to Great Northern Railway Company v. United States. In this 1942 case, the Supreme Court decided whether Great Northern could drill for oil and gas on an 1875 Act right-of-way. The United States said no, it couldn’t — the right-of-way was in the nature of an easement, only an easement had been granted, all signs (language, legislative history, early interpretation, Congress’s construction of it in subsequent acts) said it was an easement. The 1942 Court agreed. Open and shut case for Brandt, right? Yes and no.

The United States’s position

The United States argued that 1875 Act rights of way were a “limited fee made on implied condition of reverter”. Let’s unpack this gibberish. “fee” is roughly “ownership”, and “reverter” refers to what happens to the property after some condition (here, abandonment) holds. The United States thought railroad rights of way were an unusual sort of easement. Easements don’t typically let you come in and tear things up, but it’s necessary for railroads to dig, bore, build up, lay track, and so on. So these “railroad easements” were a fee in those regards. And in regard to reversion after abandonment, ownership reverted to the United States.

In light of Great Northern, this may sound ridiculous. But the United States found language in earlier cases, and to an extent in Great Northern, saying that railroad easements had “attributes of the fee”. And two cases predating Great Northern had treated 1875 Act rights of way as limited fees. The problem was, in those cases the Supreme Court had conflated 1875 Act rights-of-way with rights-of-way under acts before 1871. In 1871, Congress changed policy from basically giving railroads land, to only letting them lay tracks on it. Congress wanted to encourage settlement, not just the arbitrary enrichment of railroads (who had become incredibly huge land owners in the West). The Court conflated the two because, in at least one of the cases, neither side had filed briefs, and the Court made a legal mistake.

The United States argued that Great Northern didn’t really say 1875 Act rights of way were easements.

Oral argument

Oral argument was pretty interesting. I read half a dozen briefs and the lower court opinion in the case, so I was moderately prepared to follow argument. In some ways I was almost on par with the justices. Justice Breyer candidly admitted to fumbling with his recollections of A. James Casner‘s property law class, about which he briefly rambled (as is his wont — he’s known for rambling :-) ).

Oral argument generally trended against the United States. Sparks flew when the United States attorney began argument. Justice Alito bluntly told him the United States should receive a “prize for understatement” for “acknowledg[ing in its brief] that there is language in [] Great Northern and in the government’s brief in that case that lends some support to [Brandt's] argument.” Alito recited the brief’s subject headings, all forcefully arguing that the right-of-way was an easement and only an easement.

The argument didn’t go much better from there on for the United States. Various justices wanted to know how much land would be affected by a judgment that these rights-of-way were easements — permitting takings claims for just compensation, especially when the land had already been taken by the United States. No answer was forthcoming, because the records had been taken so long ago and were so geographically distributed. Breyer in particular repeatedly asked if there were any other easement-but-not-always constructs in the common law of property.

Opinions

The Court announced an opinion on March 10, just under two months after oral argument. Fast turnarounds typically indicate uncomplicated cases, and this was such a case. The justices divided 8-1 for Brandt, uncritically adopting his position. Chief Justice Roberts wrote the opinion, which began with a half-dozen pages of history of the West and particularly of LHP&P. (Definitely give it a read if you like Western history.) Roberts emphasized that the United States lost because it had won in Great Northern and faulted it for its “stark change in position”. He also asserted that 1875 Act railroad rights of way must be analyzed as common law easements — not a strange amalgam as the United States had argued.

Justice Sotomayor dissented alone. She argued that Great Northern had decided only one aspect of the property interest in railroad rights of way, and it hadn’t decided how reversion should play out. She also thought that railroad rights of way shouldn’t be analyzed under the common law, because of the extent to which they went beyond what normal easements allowed.

In the end the United States was roundly rebuked and defeated. Sometimes 8-1 decisions are a matter of some recognized, fundamental disagreement; see for example many of Justice Thomas’s solo dissents. But when a decision goes this way, in a case barely implicating deep jurisprudential disputes, you have to second-guess yourself a bit when you’re on the losing side. It’s one thing to lose with others agreeing with you. But when no one else sees it as you do, perhaps you’re the one who’s wrong.

Why did the United States pursue the case to a resounding loss? This particular case arose a bit weirdly. It was pushed by various property-rights groups, at the start. And for where it was raised, in the Tenth Circuit, existing circuit precedent said Brandt’s argument would lose, which it did. Brandt appealed to the Supreme Court, citing the circuit split: a good way to get your case heard, but no guarantee. What possibly tipped the balance was that the United States, despite winning, agreed the Court should hear the case. Why?

It looks to me like the United States got greedy. It saw an opportunity to wipe out the other circuits’ bad precedents, and it blinded itself to the weakness of its argument.

Consequences

What happens to Brandt specifically? The case returns to the Tenth Circuit to respond to the decision, but it’s unclear to me what’s supposed to happen there. I’d think they’d just quiet title in Brandt and be done, but the Rails-to-Trails Conservancy says it’ll keep working in the Tenth Circuit to “narrow the ultimate impact of the Supreme Court’s ruling”. How they can work against a predetermined quiet title action, I don’t know. (It’s possible this is just a face-saving claim on their part.) And it’s possible the United States might just acquire the right of way using eminent domain. (Why not do that and avoid suit? Money, of course. If it owns the land, no just compensation to pay. If not, that’s money out of the government’s pocket.) So Brandt’s not quite out of the woods yet, pun probably intended.

But Brandt’s particular plight isn’t the important thing here. It’s all the other places where suddenly takings claims can go forward. No one knows how many of these there are. Statutes of limitations and estoppel will preclude many claims, but not all of them. It’s still an unresolved mess.

Lessons

This touches a deeper concern. The United States acted here because it wanted to create rail trails, converting useless railroad corridors into bike trails. I like bikes. I like bike trails. But the law authorizing rail trails was enacted with flagrant disregard for the actual ownership of railroads in disuse. The CBO estimated the law wouldn’t cost a penny, but it now could cost $500 million, maybe more after this decision. We should demand a higher standard of Congress in the laws it passes.

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