Supreme Court Update: Marvin M. Brandt Revocable Trust v. United States (12-1173) and Order List

March 11, 2014 Supreme Court Update

Greetings, Court fans!

We're back with yesterday's decision and orders.

The Government was hoisted by its own petard in Marvin M. Brandt Revocable Trust v. United States (12-1173), a case that could significantly impede federal efforts to convert abandoned railway lines into bike trails. The Government argued in this case that rights of way given to railroad companies under a federal law between 1875 and 1976 were "limited fees," in which the United States retained a reversionary interest that allowed it to assume ownership of former railway lines once abandoned. Unfortunately (for all of us bikers), the Government had argued precisely the opposite in a case 70 years ago, convincing the Court to hold that a railroad right of way granted under an 1875 statute is "only an easement, and not a fee." That successful argument came back to haunt the Government in Brandt, where the Court held, 8-1, that, once abandoned, the land traversed by the right of way goes unencumbered to the private owner of the surrounding property.

The Chief Justice's majority opinion begins with a paean to Manifest Destiny, presenting an admiring history of America's westward expansion and the critical role railroads played in it. As the Chief recounts, in the early 1860s, Congress began granting private railroad companies rights of way over public lands to encourage settlement and development of the vast expanse of land acquired through the Louisiana and Gadsden Purchases. In 1875, Congress passed the General Railroad Right-of-Way Act, which standardized these grants and remained in effect until 1976, the same year, coincidentally, that the Government granted the Brandt family of Wyoming an 83-acre parcel of land in the Medicine Bow Forest in exchange for 220 noncontiguous acres the Brandts owned throughout the forest. The 83-acre grant was made "subject to those rights for railroad purposes as have been granted to the Laramie, Hahn's Peak & Pacific Railway Company," a railroad company that already possessed a right of way over the land pursuant to a grant under the 1875 Act. When the railroad's successor abandoned the right of way, the Government initiated a quiet-title action, naming as defendants the owners of the 31 parcels of land that the right of way traversed. The Government settled with, or got default judgments against, all but one parcel owner: the Brandt family, who apparently were fine with trains rumbling over a corner of their property, but objected to cyclists. The District Court granted summary judgment to the Government and the Tenth Circuit affirmed, holding that when the U.S. gave the right of way to the railroad in 1907, it retained an "implied reversionary interest," which vested when the right of way was abandoned.

The Supreme Court rejected this view, observing that "[t]he Government loses [its] argument today, in large part because it won when it argued the opposite before this Court more than 70 years ago." In Great Northern Railway Co. v. United States (1942), the railroad wished to extract minerals beneath the surface of its right of way and so argued that it possessed not merely an easement but a "limited fee, made on an implied condition of reverter." The Government argued that "the 1875 Act granted an easement and nothing more." The Court agreed with the Government back in 1942 and, adhering to that precedent Monday, held that the right of way over the Brandt family's land was merely an easement with no reversionary interest in the U.S. as grantor. The Court rejected the Government's "improbable (and self-serving)" argument that the 1875 Act created an easement "in some sense," but not in the sense of what happens when it is abandoned. Notably, prior to the 1875 Act, the Government did reserve an interest in lands granted to railroads as rights of way, but as the Government argued (and the Court held) in Great Northern, that pre-1875 practice had no bearing on land grants under the 1875 Act, which used different language. Though Congress eventually "did an about face and attempted to reserve rights of way to the United States," that didn't occur until 1988, 12 years after the U.S. gave the Brandt family its 83-acre parcel.

In a solo dissent, Justice Sotomayor argued that the majority placed far too great an emphasis on the Government's position in Great Northern, without "meaningfully grapp[ling]" with prior cases that had held that the U.S. had in fact retained a reversionary interest in railroad rights of way. (The majority's answer was that Great Northern "disavowed" those holdings, at the Government's urging.) Justice Sotomayor further contended that the majority erred by treating railroad rights of way as ordinary easements, "ignoring the[ir] sui generis nature." At bottom, the dissent contended that it was the majority, and not the Government that had "chang[ed] course today," and that, in so doing, the Court "undermine[d] the legality of thousands of miles of former rights of way that the public now enjoys as means of transportation and recreation." Citing a DOJ budget report, she warned that lawsuits challenging the conversion of former railway lines to recreational trails "may well cost American taxpayers hundreds of millions of dollars."

So the Government, a winner in Great Northern, was the big loser on Monday, along with cyclists on the Medicine Bow Rail-Trail in Wyoming, who will have to continue detouring around the Brandt family plot.

In addition to the decision in Brandt, the Court granted cert in one case, Public Employees' Retirement System of Mississippi v. IndyMac MBS Inc. (13-640), asking whether, under the rule of American Pipe and Construction Co. v. Utah (1974), the filing of a putative class action tolls the three-year statute of repose in Section 13 of the Securities Act of 1933 with respect to the claims of putative class members.

To the disappointment of 13-year-olds everywhere, the Court denied cert in Easton Area School District v. B.H. (13-672), the "I [heart] boobies" case, addressing the power of public schools to prohibit students from wearing arguably lewd message-bearing attire.

Finally, the Court invited the SG's views on two cases. In Bank of America v. Rose (13-662), the issue is whether plaintiffs can pursue a state-law consumer protection claim predicated on violations of the federal Truth in Savings Act, when Congress expressly repealed the private right of action under the TISA, itself. Missouri ex rel KCP&L v. Missouri Public Service Commission (13-787) asks whether the "filed rate doctrine" and the Constitution's Supremacy Clause forbid a state from preventing a utility from passing along the costs of importing electric power from another state to its retail customers, when those costs have been federally approved.

There is no oral argument scheduled for this week, and the Court's next conference day isn't until March 21. We'll be back with the latest when it breaks.

Kim, Jenny & Tadhg

From the Appellate and Complex Legal Issues Practice Group at Wiggin and Dana. For more information, contact Kim Rinehart or any other member of the Practice Group at 203-498-4400