Measure of damages in rails-to-trails takings.

Author:Blair, Benjamin A.

Until 2013, the Central of Georgia Railroad Company and its predecessors held easements for railroad purposes that crossed the land of several landowners in Newton County, Georgia. In 2013, the United States authorized the conversion of the railroad rights-of-way into recreational trails pursuant to the National Trail Systems Act. The trail at issue extends approximately fifteen miles from Newborn to Covington, Georgia, which is a half-hour drive east from Atlanta.

The Surface Transportation Board's issuance of a notice of interim trail use or abandonment constitutes a taking that requires just compensation. The parties stipulated that all but one of the plaintiffs had a property interest in one or more parcels adjacent to the former rail corridor as of August 19, 2013. The parties also stipulated to the size of the taking for the majority of the plaintiffs. At issue was the amount of compensation owed to the plaintiffs.

In rails-to-trails cases, the measure of damages for just compensation is the difference between the value of a plaintiff's land unencumbered by a railroad easement and the value of the plaintiff's land encumbered by a perpetual trail use easement subject to possible reactivation as a railroad. However, it is widely accepted that such railroads are unlikely to be reactivated, so there is no real prospect that the property owners will ever again have unencumbered use of their property.

The testimony of the parties' experts in this case revealed two major areas of dispute: identifying the property rights available to the landowners in the "after scenario" of the before-and-after method prescribed by the Uniform Appraisal Standards for Federal Land Acquisitions, and whether there were any compensable benefits of damages to the remainder parcel in the after scenario.

On the first issue, the plaintiffs' appraiser opined that, as a result of the taking effected by imposition of the perpetual trail use easement, plaintiffs retained no valuable rights in the servient estate. The government's appraiser opined that plaintiffs retained 15% of their fee simple property rights. The Court of Federal Claims agreed with the plaintiffs' appraiser. He recognized that the possibility of the trail easement being extinguished was too remote to have any value. Accordingly, the plaintiffs retained no valuable rights in the land underlying the perpetual trail use easement. While plaintiffs may have nominal property rights in the burdened land...

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