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Nature of Suit Code: 513
Nature of Suit: 
Cause of Action: 

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United States Court of Appeals 

for the Federal Circuit ______________________ 

MARK R. RASMUSON, BRENDA S. RASMUSON, 

IVA MILLER, MARTIN MEIER, DAVID A. JUST,

CAROLYN J. JUST, DELTON DIXON, PLEASANT 

VALLEY GOLF CLUB, INC., ROBERT AASTRUP, 

DONALD TAYLOR, BETTY TAYLOR, DOROTHY M. 

JOHNSON, REX ENGEBRETSON, JURGENS 

FARMS CORP., DEAN JURGENS, SCHUMACHER 

FARMS, INC., THOMAS FLOY, RICHARD STILLE, 

CURTIS STILLE, PAMELA STILLE,

Plaintiffs-Appellees

v.

UNITED STATES,

Defendant-Appellant

______________________ 

2014-5089

______________________ 

Appeal from the United States Court of Federal 

Claims in No. 1:09-CV-00158-NBF, Senior Judge Nancy 

B. Firestone.

--------------------------------------------------------------

WILMA N. ADKINS, HOWARD BURROWS,

GONNER FARM, LLC, JAN ROSE FARM, INC.,

JAMES A. HARP, CLAYTON LINDSTROM AND

GAYLE LINDSTROM, HUSBAND AND WIFE,

BOYCE L. LANGE, TRUSTEE, FRANK MARTIN,

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2 RASMUSON V. US

DAVID CHONGO AND CHRISTINE CHONGO,

HUSBAND AND WIFE, RONALD PINYAN, TODD

MAURICE JOHNSON, CURTIS MENNENGA,

TRUSTEE, HOPE CHURCH OF THE NAZARENE,

RODNEY KNOX AND PAMELA KNOX, HUSBAND

AND WIFE, RONALD GAULKE AND KAREN

GAULKE, HUSBAND AND WIFE, SHARON BURT,

THOMAS BLAKE, MERRILL GOERING AND

LINDA GOERING, HUSBAND AND WIFE, JAMES A.

BRADY AND PATRICIA A. BRADY, HUSBAND AND

WIFE, DAVID F. JOHNSON, MELLISSA S.

CHAPPELLE, DALE BARRETT AND KATHLEEN

BARRETT, HUSBAND AND WIFE, RONNIE L.

SMITH AND DEBORAH A. SMITH, HUSBAND AND

WIFE, DAVID E. BROONER AND CYNTHIA L.

BROONER, HUSBAND AND WIFE, DOUG

SCHMELING, JOHN T. CURPHEY, FOR

THEMSELVES AND AS REPRESENTATIVES OF A

CLASS OF SIMILAR PERSONS,

Plaintiffs-Appellees

v.

UNITED STATES,

Defendant-Appellant

______________________ 

2014-5092

______________________ 

Appeal from the United States Court of Federal 

Claims in No. 1:09-CV-00503-NBF, Senior Judge Nancy 

B. Firestone.

--------------------------------------------------------------

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RASMUSON v. US 3

STEVE JENKINS, DONALD BURG,

Plaintiffs-Appellees

v.

UNITED STATES,

Defendant-Appellant

______________________ 

2014-5107

______________________ 

Appeal from the United States Court of Federal 

Claims in No. 1:09-CV-00241-NBF, Senior Judge Nancy 

B. Firestone.

______________________ 

Decided: October 5, 2015

______________________ 

THOMAS SCOTT STEWART, Stewart Wald & McCulley, 

LLC, Kansas City, MO, argued for plaintiffs-appellees. 

 

MATTHEW LITTLETON, Environment and Natural Resources Division, United States Department of Justice, 

Washington, DC, argued for defendant-appellant. Also 

represented by KATHERINE J. BARTON, SAM HIRSCH. 

______________________ 

Before O’MALLEY, CLEVENGER, and HUGHES, Circuit 

Judges.

HUGHES, Circuit Judge. 

In these Rails-to-Trails cases, the Court of Federal 

Claims found that the plaintiff-landowners were entitled 

to just compensation for the inverse condemnation of their 

respective properties. In awarding compensation to the 

landowners, the Court of Federal Claims determined that 

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4 RASMUSON V. US

an appraiser is not required to take into account the 

physical remnants of a railroad easement when determining the value of the land before the taking occurred. 

Because we conclude that an appraiser must consider the 

value of a landowner’s property before the easement,

which in this case includes the physical remnants of the 

railroad, we vacate and remand. 

I 

The plaintiffs own tracts of land adjacent to three 

railway corridors in central Iowa. Pursuant to the National Trail System Act Amendments of 1982, the Surface 

Transportation Board issued Notices of Interim Trail Use 

(NITUs) for the corridors. NITUs “preserve established 

railroad rights-of-way for future reactivation of rail service” and permit the railroad operator to cease operation 

without legally abandoning any “rights-of-way for railroad 

purposes.” 16 U.S.C. § 1247(d). The trial court found that 

“[b]ut for issuance of the NITU[s], under Iowa law the 

[railway] easement[s] would have reverted back to plaintiffs upon cessation of railroad operations, and plaintiffs 

would have enjoyed land unencumbered by any easement.” J.A. 583; see also J.A. 1981 n.5; J.A. 2106 n.7. 

Accordingly, the trial court found that a taking occurred. 

The court then held a bench trial to determine compensation. Focusing on parcels for which the highest and 

best use was farmland, the trial court used the “before 

and after” method to determine the value of the land 

subject to the government’s easement. The court determined that the “before” state of the land should take into 

account the value of the land as it existed before the 

NITU easements, but ignore any physical remnants of the 

railway’s use, which would have remained if the railway 

easement had been permitted to lapse. The government 

appeals. We have jurisdiction under 28 U.S.C. 

§ 1295(a)(3).

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RASMUSON v. US 5

II

We review the Court of Federal Claims’ legal conclusions de novo and its findings of fact for clear error. Otay 

Mesa Prop., L.P. v. United States, 670 F.3d 1358, 1363 

(Fed. Cir. 2012). The landowners have the burden of 

establishing the value of the railway corridor, which is a 

question of fact. Bd. of Cnty. Supervisors of Prince William Cnty. v. United States, 276 F.3d 1359, 1364 (Fed. 

Cir. 2002). But a finding on the value of a railway corridor that “is derived from the application of an improper 

legal standard to the facts” must be remanded for new 

factual findings for application of the correct legal standard. Walther v. Sec’y of Health & Human Servs., 485 F.3d 

1146, 1152 (Fed. Cir. 2007) (citations omitted).

A landowner subject to a taking is entitled “to be put 

in as good a position pecuniarily as if his property had not 

been taken.” Olson v. United States, 292 U.S. 246, 255 

(1934); Otay Mesa, 670 F.3d at 1368. The landowner 

“must be made whole but is not entitled to more.” Id. 

Landowners are therefore generally entitled to the fair 

market value of their land, which is defined as “‘what a 

willing buyer would pay in cash to a willing seller’ at the 

time of the taking.” United States v. 564.54 Acres of 

Land, More or Less, Situated in Monroe & Pike Cntys., 

441 U.S. 506, 511 (1979) (quoting United States v. Miller, 

317 U.S. 369, 374 (1949)) (hereinafter Lutheran Synod). 

And in the easement context, “the ‘conventional’ method 

of valuation is the ‘before-and-after’ method, i.e., ‘the 

difference between the value of the property before and 

after the Government’s easement was imposed.’” Otay 

Mesa, 670 F.3d at 1364 (quoting United States v. Va. Elec. 

& Power Co., 365 U.S. 624, 632 (1961)).

The issue on appeal is a narrow one. The parties dispute whether or not the “before” condition requires the 

appraiser to adopt the counterfactual assumption that the 

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6 RASMUSON V. US

longing to the railway—would return the property to the 

landowners free of the physical remnants of the railway’s 

use. The landowners view the “unencumbered” land as 

not only free of any legal restrictions, but also free of any 

remnants from the railway’s use of the easement such as 

earthen embankments, ties, and poor soil conditions. The 

government, however, views the “before” condition as the 

land as it would have laid but for the issuance of the

NITUs, which could include the physical remnants of the 

railway’s use of the land in some circumstances.

We conclude that the fair market value of the land includes the physical remnants of the railway that would 

have remained on the landowners’ property but for the 

issuance of the NITUs. Here, the trial court found—and 

the parties do not contest—that but for the government’s 

easement, the railway easements would have lapsed and 

the land would have returned to the landowners. Because 

the railway companies did not have an obligation to 

remove the physical railroad construction features, and 

there is no evidence in the record that they would have 

done so, the landowners would have regained possession 

of their land with the physical structures. See Macerich 

Real Estate Co. v. City of Ames, 433 N.W.2d 726, 730 

(Iowa 1988) (interpreting Iowa law pertaining to the 

abandonment of railway rights, and emphasizing that a 

railroad has a right to enter and remove the physical 

track materials). Absent the NITUs, the land would have 

returned to the landowners with the physical remnants of 

the railway. A proper appraisal methodology has to 

account for those physical conditions.

Further, “[i]n ascertaining market value, consideration should be given to all matters that might be brought 

forward and reasonably be given substantial bargaining 

weight by persons of ordinary prudence . . . .” Appraisal 

Institute, Uniform Appraisal Standards for Federal Land 

Acquisition § B-2 (2000 ed.); see also Lutheran Synod, 441 

U.S. at 511 (defining fair market value). Here, all experts 

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RASMUSON v. US 7

agreed that a reasonably prudent buyer would consider 

evidence of an abandoned railway when formulating an 

offer for agricultural property. Thus, a “before” calculation that does not take into account the costs of removing 

the physical remnants of the railway will result in an 

artificially inflated value and yield a windfall to the 

landowner.1 See Olson, 292 U.S. at 255 (The property 

owner “must be made whole but is not entitled to more.”);

see also Otay Mesa, 670 F.3d at 1368 (just compensation 

“should be carefully tailored to the circumstances of each 

particular case” (citing Kimball Laundry Co. v. U.S., 338 

U.S. 1, 20 (1949)).

III

Having concluded that the trial court applied the incorrect methodology in calculating the compensation owed 

to the landowners, we must vacate and remand for new

proceedings under the proper standard with both sides 

having the opportunity to address the valuation for the 

effects of the remnants. 

VACATED AND REMANDED

1 To be sure, the remnants of the railway are also 

relevant to determining the “highest and best use” of the 

landowners’ property. See Olson, 292 U.S. at 255. But 

the determination of a highest and best use does not 

obviate the need to determine the fair market value in 

light of the physical condition of the property. See, e.g., 

id. (“The highest and most profitable use for which the 

property is adaptable . . . is to be considered, not necessarily as to the measure of value, but to the full extent 

that the prospect of demand for such use affects the 

market value while the property is privately held.”).

 

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