Court Opinion

ID: 857570
Source: CourtListenerOpinion
Date Created: 2013-04-09 15:23:15.216517+00
Date Added: 2024-06-11T13:08:36.668229
License: Public Domain

United States Court of Appeals
      for the Federal Circuit
                ______________________

JACK LADD, JOBETH LADD, JOHN LADD, MARIE
  LADD, GAIL A. LANHAM, JAMES A. LINDSEY,
   MICHAEL A. LINDSEY, WILLIAM LINDSEY,
CHARLIE MILLER, PAULINE MILLER, RAYMOND
MILLER, VALENTIN CASTRO, III, DEBORAH ANN
    CASTRO REVOCABLE TRUST, JOSEPH
LAWRENCE HEINZL, TAMMY WINDSOR-BROWN,
              Plaintiffs-Appellants,

                           v.

                  UNITED STATES,
                  Defendant-Appellee.
                ______________________

                      2012-5086
                ______________________

    Appeal from the United States Court of Federal
Claims in No. 07-CV-271, Judge Robert H. Hodges Jr..
                 ______________________

                Decided: April 9, 2013
                ______________________

     MARK F. (THOR) HEARNE, II, Arent Fox LLP, of Clay-
ton, Missouri, argued for plaintiffs-appellants. With him
on the brief were LINDSAY S.C. BRINTON and MEGHAN S.
LARGENT; DEBRA J. ALBIN-RILEY and JOSEPH L. CAVINATO,
III, of Los Angeles, California.
2                                           JACK LADD   v. US

    MICHAEL T. GRAY, Attorney, Appellee Section Envi-
ronment & Natural Resources Division, United States
Department of Justice, of Jacksonville, Florida, argued for
the defendant-appellant. With him on the brief was
IGNACIA S. MORENO, Assistant Attorney General. Of
counsel was WILLIAM J. SHAPIRO, Attorney, of Sacramen-
to, California.
                ______________________

    Before RADER, Chief Judge, LOURIE, and MOORE, Circuit
                           Judges.
MOORE, Circuit Judge
    Jack Ladd et. al. (landowners) appeal from the Court
of Federal Claims’s (CFC) dismissal of their taking claims
as barred by the statute of limitations. Because the
landowners’ claims are not time-barred, we reverse and
remand for further proceedings. We affirm the remaining
issues appealed.
                        BACKGROUND
    This appeal is the second appeal in this rails-to-trails
case. See Ladd v. United States, 630 F.3d 1015 (Fed. Cir.
2010) (Ladd I). Ladd I details the procedural history of
this case, which we repeat only as necessary to resolve
this second appeal.
    The landowners own tracts of land in southern Arizo-
na near the border between the United States and Mexi-
co. Ladd I, 630 F.3d at 1017. In 1903, the El Paso &
Southwestern Railway Company (El Paso) acquired a
right of way to use a 100-foot wide, 76.2-mile long strip of
land to build and operate a railroad. Id. El Paso and its
successor operated the railroad for approximately a
century but ultimately initiated proceedings to abandon
the railway with the Department of Transportation’s
Surface Transportation Board (STB). Id. During the
proceeding, the STB issued a Notice of Interim Trail Use
 JACK LADD   v. US                                       3
or Abandonment (NITU) in 2006 that authorized the
railroad to convert the railway into a public trail pursuant
to the National Trails System Act Amendments of 1983
(Trails Act). See 16 U.S.C. § 1247(d).
    The landowners filed suit in 2007. They alleged that
the issuance of the 2006 NITU constituted a compensable
Fifth Amendment taking because it operated to convert
the limited right-of-way into a public trail. Ladd I, 630
F.3d at 1017–18. The CFC dismissed the case, concluding
that a taking had not occurred because the government
had not physically invaded the landowners’ property to
construct the trail; it had only issued a NITU. Id. at
1018–19. We reversed and held that the landowners’
takings claim accrued on the date that the 2006 NITU
issued. Id. at 1023–25 (citing Caldwell v. United States,
391 F.3d 1226, 1233–34 (Fed. Cir. 2004) and Barclay v.
United States, 443 F.3d 1368, 1374 (Fed. Cir. 2006)).
    During discovery in the remand proceedings, the gov-
ernment produced a NITU affecting the landowners’
property that had issued in 1998. There was no indica-
tion that the NITU was published in the Federal Register
or a newspaper, and the landowners submitted declara-
tions that they were not aware of the 1998 NITU. The
CFC nevertheless held that the statute of limitations
began to run in 1998 and that the landowners’ takings
claims were time-barred because they did not file their
takings claims until 2007. The court concluded that the
Ladd I mandate did not foreclose it from reaching the
statute of limitations issue.
    The CFC also held that one group of landowners, the
Lindsey family, lacked an ownership interest in the land
subject to the taking. The court reached this conclusion
because the Lindsey family’s predecessor-in-title had
conveyed the tract in “fee simple” to the railroad compa-
ny.
4                                          JACK LADD   v. US
   The landowners appeal. We have jurisdiction under
28 U.S.C. § 1295(a)(3).
                       DISCUSSION
                            I.
    We review without deference the legal aspects of the
CFC’s determination that the statute of limitations bars a
takings claim. Caldwell, 391 F.3d at 1233. We likewise
review de novo the interpretation of our own mandate,
Laitram Corp. v. NEC Corp., 115 F.3d 947, 950 (Fed. Cir.
1997), as well as the CFC’s grant of summary judgment,
Scott Timber Co. v. United States, 333 F.3d 1358, 1365
(Fed. Cir. 2003). Rule 56(c) of the Rules of the United
States Court of Federal Claims states that summary
judgment is appropriate “if the movant shows that there
is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
                           II.
    The landowners argue that the CFC violated the
scope of the mandate in Ladd I when it considered the
government’s liability on remand. They assert that, in
Ladd I, we remanded the case for the limited purpose of
determining the compensation owed to the landowners for
the taking. They contend that the record on liability was
fully developed such that the Ladd I panel held that the
government was liable for taking the landowners’ proper-
ty.
     We disagree. We did not decide the government’s lia-
bility in Ladd I when we reversed the CFC’s dismissal of
the landowners’ claims. We reviewed the record, constru-
ing all facts in the landowners’ favor, and concluded that
the court erred as a matter of law when it concluded that
the STB’s issuance of the 2006 NITU could not constitute
a compensable taking. Ladd I, 630 F.3d at 1023 n.4,
1025. We did not expressly address any other issue
regarding the landowners’ taking claims, such as whether
 JACK LADD   v. US                                        5
the landowners had the requisite property interest, nor
could we have found those facts in the first instance on
appeal. See id. at 1023 n.4 (“The government disputes the
character of the property rights in this case. For purposes
of summary judgment, however, we must assume facts in
favor of the appellants.”). Thus, the mandate in Ladd I
did not bar the CFC from addressing the government’s
liability on remand.
                            III.
     The landowners argue that the CFC erred in conclud-
ing that the statute of limitations began to run upon the
issuance of the 1998 NITU and not the issuance of the
2006 NITU. They argue that, under the accrual suspen-
sion rule, their takings cause of action did not accrue until
they knew or should have known about the 1998 NITU.
The landowners argue that they did not know, and could
not have known, that the STB issued the 1998 NITU and
rely on four pieces of evidence in support: (1) none of the
landowners received the 1998 NITU; (2) the government
failed to establish that the 1998 NITU was published in a
newspaper or the Federal Register; (3) the railroad did
not change its use of the right-of-way as a result of the
1998 NITU; and (4) there is no record of any public hear-
ings related to the 1998 NITU. The landowners point out
that the government’s position throughout the first four
years of the litigation was that the 2006 NITU was the
first one that the STB issued. The landowners argue that
the accrual suspension rule should apply because, under
these circumstances, the should have known requirement
is not met with regard to the 1998 NITU.
    The government contends that the accrual suspension
rule does not apply because it did not conceal the issuance
of the 1998 NITU and its issuance was not inherently
unknowable. The government explains that, in 1997, it
published notice in the Federal Register that STB had
exempted the railroad company from certain abandon-
6                                              JACK LADD   v. US
ment requirements under federal law. It argues that the
1997 exemption notice put the landowners on notice of the
process that “might have led to a NITU.” Brief for the
United States at 31, 2012 WL 4667602. The government
also points to the STB rules, which require a railroad
company applicant to publish newspaper notice of the
abandonment exemption proceedings in the relevant
counties. Finally, the government argues that Barclay
and Caldwell implicitly hold that landowners always have
constructive notice of the issuance of a NITU and that a
contrary holding would undermine the bright-line claim
accrual rule from those cases.
    We agree with the landowners that the claim accrual
suspension rule applies. Generally, “a claim alleging a
Fifth Amendment taking accrues when the act that
constitutes the taking occurs.” Ingrum v. United States,
560 F.3d 1311, 1314 (Fed. Cir. 2009). In the context of
Trails Act cases, the cause of action accrues when the
government issues the first NITU that concerns the
landowner’s property. Ladd I, 630 F.3d at 1024–25. The
statute of limitations requires a plaintiff to file suit within
six years from the date the cause of action accrues. 28
U.S.C. § 2501; Ladd I, 630 F.3d at 1024–25.
     A claim’s accrual, however, is suspended if the plain-
tiff shows (1) that the government concealed its acts such
that the plaintiff was unaware of their existence; or (2)
that the injury was “inherently unknowable.” Ingrum,
560 F.3d at 1314–15. The “inherently unknowable”
standard is shorthand for the proposition that a claim
does not accrue until the claimant “knew or should have
known” that the claim existed. Id. at 1315 n.1; Holmes v.
United States, 657 F.3d 1303, 1317 n.12 (Fed. Cir. 2011).
    Here, the evidence shows that the issuance of the
1998 NITU was inherently unknowable. The landowners
testified that they did not know about the 1998 NITU.
J.A. 1780–1810. The government does not provide any
 JACK LADD   v. US                                      7
evidence to the contrary, and it does not question the
veracity of the landowners’ testimony.
     There is also no reason that the landowners should
have known about the 1998 NITU. The government
admits that there is no evidence that the 1998 NITU was
published in the Federal Register or in a newspaper. Nor
is there any evidence that the railroad company that
initiated the STB proceedings published newspaper notice
of the NITU. The government was not even aware of the
1998 NITU until 2011, and had consistently taken the
position in this litigation that the first NITU issued in
2006. J.A. 632, 1201. Hence, there is no evidence that
the 1998 NITU was made public in any way. There was
also no public notice of abandonment; in fact, the railroad
continued to operate the railway until 2005. J.A. 505.
Hence, there was nothing to put the landowners on notice
of the abandonment.
    The STB’s 1997 publication of an exemption notice in
the Federal Register does not remedy the landowners’
lack of notice of the 1998 NITU. It is well settled that
publication of a document in the Federal Register pro-
vides “notice of the contents of the document.” 44 U.S.C. §
1507; Fed. Crop. Ins. Co. v. Merrill, 332 U.S. 380, 384–85
(1947). But the 1997 notice did not provide information
such that the landowners knew or should have known
that the STB would issue a NITU concerning their prop-
erty. The notice of exemption states only that: “The
Board, pursuant to 49 U.S.C. 10502, exempts SWKR
Operating Co. from the prior approval requirements of 49
U.S.C. 10903 to abandon the stub-end of its Douglas
Branch, subject to historic preservation, trail use, public
use, and standard labor protective conditions.” Notice of
Exemption, 62 Fed. Reg. 7086-01 (Feb. 14, 1997).
    The 1997 exemption notice does not state that the
STB will issue a NITU for the affected railway. Nor does
the STB automatically issue a NITU after it grants a
8                                           JACK LADD   v. US
request for an exemption. A NITU will only issue if
private parties perform additional actions before the STB.
First, a potential trail operator must file a petition that
includes: (1) a map of the right-of-way proposed to be
acquired; (2) a statement indicating that the trail opera-
tor will assume financial and legal liability for the right-
of-way; and (3) an acknowledgement that the right-of-way
may be reactivated for railroad use in the future. 49
C.F.R. § 1152.29(a). That had yet to occur when the 1997
exemption notice issued. J.A. 1592–93. After the petition
is submitted, the railroad company must then agree to
negotiate with the trail operator and communicate that
intent to the STB. 49 C.F.R. § 1152.29(b)(2). Only after
these predicate conditions are satisfied will the STB issue
a NITU. Id. § 1152.29(d). Given these circumstances, the
Notice of Exemption was not sufficient to put the land-
owners on notice of the 1998 NITU. At most, it put them
on notice that the railroad, if it chose to abandon in the
future, would be exempt from certain requirements. This,
however, is not sufficient, under these circumstances, to
put them on notice of a future NITU that may or may not
issue. We hold that the 1997 exemption notice did not put
the landowners on notice that a NITU affecting their
property would issue. 1
   Our decision is consistent with Barclay and Caldwell.
The claim accrual suspension doctrine was not at issue in

    1   Moreover, should the STB issue a NITU, it is pos-
sible that the NITU may cover only a subset of the land
listed in the notice of exemption because the NITU only
covers “the portion of the right-of-way as to which both
parties are willing to negotiate.”         49 C.F.R. §
1152.29(d)(1). This additional uncertainty further under-
scores why it would be improper to hold that the 1997
exemption notice informed the landowners that their land
would be subject to a NITU.
 JACK LADD   v. US                                     9
either case. Instead, those cases simply stand for the
proposition that the issuance of a NITU triggers the
accrual date of the takings cause of action. Barclay, 443
F.3d at 1378; Caldwell, 391 F.3d at 1233, 1235–36. More
particularly, those cases hold that “the issuance of the
original NITU,” rather than subsequent NITUs, is the
event that “triggers the accrual date of the cause of ac-
tion.” Barclay, 443 F.3d at 1378. Neither case addressed
whether and under what circumstances the claim accrual
suspension doctrine should apply in Trails Act cases. And
there is no indication that the landowners in those cases
lacked constructive or actual notice of the NITUs that
affected their respective property.
    Finally, we disagree with the government’s assertion
that suspending the claim accrual date in this case will
eviscerate the “bright-line rule” for claim accrual that
Barclay and Caldwell establish. See Barclay, 443 F.3d at
1378. The claim accrual suspension rule is “strictly and
narrowly applied.” Ingrum, 560 F.3d at 1314–16. It only
applies where, as here, a landowner lacks any notice that
the STB has issued a NITU concerning a railway that
runs through the landowner’s property. The outcome of
this case might well have been different if the 1998 NITU
had been published in the Federal Register or a newspa-
per or if the railroad company had, prior to 2001, discon-
tinued train service and removed the track and ties. But
none of this happened. There is simply no reason why the
landowners should have known about the 1998 NITU.
And even the government was not aware of the 1998
NITU until 2011—four years into this case. In these
circumstances, the government’s interest in bright-line
legal rules must yield to the landowners’ right to receive
actual or constructive notice that their claims have ac-
crued. Accordingly, we reverse the CFC’s dismissal of the
landowners’ takings claims.
10                                          JACK LADD   v. US
                           IV.
    The landowners also argue that the CFC’s dismissal
of their claims violated their due process rights because
they never had actual notice of the 1998 NITU. The
landowners argue that the Due Process Clause requires a
constitutional claimant to have actual notice of a claim
before the statute of limitations begins to run. Because
we have already concluded that the landowners’ claims
were not time-barred, we will not address their constitu-
tional arguments.
                            V.
    Lastly, the Lindsey family argues that the CFC erred
in concluding that the Lindsey deed conveyed their parcel
to the railroad company in fee simple. They argue that
the deed only conveys an easement and merely contained
customary quitclaim recitals to convey that easement “in
fee simple.” They argue that the deed only granted a
right “over, through across and upon” the land, and the
words “fee simple” do not override that limited grant of an
easement.
    The government contends that the Lindsey family
waived this argument by failing to raise it below. The
Lindsey family does not respond to this argument. We
agree with the government that the Lindsey family
waived its right to challenge the CFC’s construction of the
Lindsey deed.
    The Lindsey family did not raise the construction of
the Lindsey deed during the remand proceedings below.
On remand, the government moved for summary judg-
ment that the Lindsey family lacked a compensable
property interest under Arizona law because the Lindsey
family’s predecessor-in-title conveyed its interest to the
railroad company in “in fee simple.” Mem. in Supp. of
Mot. to Dismiss, at 15–18, Ladd v. United States, No.
1:07-cv-271 (Fed. Cl. Sept. 15, 2011), ECF No. 113. The
 JACK LADD   v. US                                      11
landowners, including the Lindsey family, filed a single
response to the government’s motion. The landowners’
response raised four arguments: (1) that our mandate in
Ladd I precluded the government from rearguing liability;
(2) that the 2006 NITU constituted a compensable taking;
(3) that a number of landowners, not including the Lind-
sey family, conveyed only an easement to the railroad
company pursuant to the General Railroad Right-of-Way
Act of 1875; and (4) that the 1998 NITU did not trigger
the statute of limitations. Pls.’ Corrected Opp. to the
Government’s Renewed Mot. to Dismiss, at 12–39, Ladd
v. United States, No. 1:07-cv-271 (Fed. Cl. Oct. 3, 2011),
ECF No. 116-1. The landowners did not address the
Lindsey deed at all, and the CFC granted the govern-
ment’s motion for summary judgment that the Lindsey
family lacked a compensable property interest.
    The Lindsey family argues, for the first time on ap-
peal, that the Lindsey deed conveyed an easement, and
not the fee simple estate. Because they failed to raise this
argument below, we find it waived and decline to address
it. Gant v. United States, 417 F.3d 1328, 1332 (Fed. Cir.
2005). We thus affirm the CFC’s grant of summary judg-
ment that the Lindsey family lacked a compensable
property interest.
                       CONCLUSION
    We have considered the parties remaining arguments
and conclude that they lack merit. For the foregoing
reasons, the decision of the CFC is
 AFFIRMED-IN-PART, REVERSED-IN-PART, and
               REMANDED.
                          COSTS
   Costs to Plaintiffs-Appellants.