Court Opinion

ID: 9568965
Source: CourtListenerOpinion
Date Created: 2023-08-21 20:09:06.509302+00
Date Added: 2024-06-11T11:17:30.296708
License: Public Domain

SANDSTROM, Justice,
dissenting.
Because I believe modern constitutional jurisprudence requires the trial court to determine whether the statutory allocation of 100 percent of the cost to BN Railroad was fair and reasonable under all of the circumstances, I respectfully dissent.
I agree with the majority that N.D.C.C. § 61-16.1-42 places solely upon the railroad company the responsibility for payment of the costs of building and maintaining bridges and culverts where a drain intersects a railroad. This was the prevailing attitude at the time its predecessor statute was enacted in the late 1800s. One author has noted in the analogous situation of railroad grade crossing cases that it had “been almost the universal rule to charge the costs of the grade separation to the railroad.” J. Sax, Takings and the Police Power, 74 Yale L.J. 36, 70 (1964) (footnote omitted). See also Annot., Constitutional power to compel railroad company to relocate or reconstruct highway crossing or to pay or contribute to expense thereof, 109 A.L.R. 768, 769 (1937).
In City of Winston-Salem v. Southern Railway Co., 248 N.C. 637, 105 S.E.2d 37, 47 (1958), the North Carolina Supreme Court explained the historical policy behind governmental entities requiring railroads to shoulder the expense of improvements to grade crossings:
“[Djuring the earlier days of railroading, before the development of our present State and Federal systems of improved highways, when vehicular traffic operated within short distance limits and served as important feeders for the railroad companies, the railroads shared substantially with the general public in the benefits of improved crossing facilities, in that the improved facilities tended to speed up the movement of vehicular traffic as feeders for the rails. Moreover, since practically all common carrier freight and passenger *898traffic moved by rail, the costs of these crossing improvements, under sanction of the regulatory agencies, were built in to the rate structures and were passed on, first to the shipping public, and then to the ultimate consumers of the products moving by rail. And since these built-in costs were susceptible of being passed on to the ultimate consumers so effectively, the imposition upon the railroad companies of the financial burdens of making crossing improvements comported entirely with basic principles of fairness, and were conceived to impose no undue burdens upon the railroad companies.”
See also Metro. Sewerage Dist. v. Chicago, M., St. P. & P. R. Co., 69 Wis.2d 387, 230 N.W.2d 651, 662 (1975); Comment, Constitutionality of Assessment upon Railroad for Underpass on Interstate, Federal-Aid Highway, 44 Yale L.J. 1259, 1260-1261 (1935).
I have serious doubts, however, about the constitutionality of the statute as construed by the majority.
The District principally relies on three decisions to support its argument that no com-pensable taking would occur by construing N.D.C.C. § 61-16.1-42 to require BN Railroad to pay the total cost for the bridges and culverts — City of Grafton v. St. Paul, M. & M. Ry. Co., 16 N.D. 313, 113 N.W. 598 (1907); Lake Shore & Michigan S.R. Co. v. Clough, 242 U.S. 375, 37 S.Ct. 144, 61 L.Ed. 374 (1917); and Chicago, B. & Q. R. Co. v. Illinois ex rel. Grimwood, 200 U.S. 561, 26 S.Ct. 341, 50 L.Ed. 596 (1906) — each discussed in the majority opinion. These cases clearly stand for the proposition that governmental action requiring a railroad to make structural changes where its lines intersect a watercourse or a public highway is merely incidental to the police powers of the state and never constitutes a compensable taking. The law is succinctly summarized in Grimwood, where the Supreme Court likened the rights of the public in the creek to the rights of the public in a public highway, and relied on several earlier state and federal court decisions addressing a railroad company’s duty when a railroad track crosses a public highway.
“ ‘[W]here there is a natural water way, or where a highway already exists and is crossed by a railroad company under its general license to build a railroad, and without any specific grant by the legislative authority to obstruct the highway or water way, the railroad company is bound to make and keep its crossing, at its own expense, in such condition as shall meet all the reasonable requirements of the public as the changed conditions and increased use may demand.’ ”
Grimwood, 200 U.S. at 587, 26 S.Ct. at 347 (quoting Chicago, B. & Q. R. Co. v. People ex rel. Grimwood, 212 Ill. 103, 72 N.E. 219, 223 (1904)).
Although Grafton, Lake Shore, and Grimwood have not been explicitly overruled, their precedential value has been limited by more recent developments in this area of taking jurisprudence.
Commentators have suggested the “Supreme Court’s decisions in ‘taking’ issues may properly be viewed as a ‘crazy quilt pattern’ of rulings.” 2 Rotunda & Nowak, Treatise on Constihitional Law: Substance and Procedure, 2nd § 15.12(a), at p. 490 (1992) (quoting Dunham, Griggs v. Alleghenny County in Perspective: Thirty Years of Supreme Court Expropriation Law, 1962 Sup.Ct.Rev. 63, 63). Because of the various contexts in which a taking issue may arise, cases resolving responsibility for payment for structural changes where railroads intersect roads, highways or watercourses have formed a separate category of their own. See J. Sax, Takings and the Police Power, 74 Yale L.J. 36, 70 (1964).
Lake Shore, Grimwood, and Grafton, which relied on the Supreme Court’s decision in C.B. & Q. Ry. Co. v. Chicago, 166 U.S. 226, 17 S.Ct. 581, 41 L.Ed. 979 (1897), were decided in 1917, 1906, and 1907, respectively. Grimwood and C.B. & Q. Ry. Co. v. Chicago were authored by Justice Harlan and these cases, along with Lake Shore, clearly illustrate Justice Harlan’s view that “taking differed qualitatively from regulation and, therefore, mere use regulation never necessitated compensation by the state.” 2 Rotunda & Nowak, at p. 488. But as evidenced by the landmark 1922 Supreme Court decision in *899Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 43 S.Ct. 158, 67 L.Ed. 322 (1922), Justice Holmes, the leading exponent of a broader test of compensability based on “fairness,” viewed “the distinction between' taking and regulation as one of degree,” and “if regulation reached a certain extreme, it became a ‘taking’, though no property was actually taken in a literal sense.” 2 Rotunda & Nowak, at p. 489.
This shift in the Supreme Court’s view of taking issues is illustrated in the category of railroad grade crossing eases by Nashville, C. & St. L. Ry. v. Walters, 294 U.S. 405, 55 S.Ct. 486, 79 L.Ed. 949 (1935). In Walters, a statute authorized the state highway commission, whenever a state highway crossed a railroad, to require the separation of grades if in its discretion the action was necessary for the protection of travelers, and, without conferring on the commission any discretion as to the proportion of the cost to be borne by the railroad, required the railroad to pay one-half of the total cost in every case. Under the statute, the commission ordered the railroad to construct an underpass to separate grades where a proposed state highway would cross its track and to bear one-half of the cost. The railroad did not dispute the need for the project, but asserted the statute’s requirement it bear one-half of the cost, under the circumstances, was “so arbitrary and unreasonable as to deprive it of property without due process of law....” Walters, 294 U.S. at 413, 55 S.Ct. at 487.
The Supreme Court began by noting “in Tennessee, as elsewhere, the rule has long been settled that, ordinarily, the state may, under its police power, impose upon a railroad the whole cost of eliminating a grade crossing, or such part thereof, as it deems appropriate.” Walters (footnote omitted). The Court cited its earlier watercourse decisions in Grimivood and Lake Shore as comparable authority for this proposition.
The Court further noted a statute valid as to one set of facts may be invalid as to another, a statute valid when enacted may become invalid by a change of conditions to which it is applied, and the police power is subject to the constitutional limitation that it may not be exerted arbitrarily or unreasonably. Walters 294 U.S. at 414-15, 55 S.Ct. at 488. The Court stressed the revolutionary changes in recent years brought about by the widespread introduction of motor vehicles which seriously decreased rail traffic and revenues through increased competition for both freight and passenger traffic. The Court ruled the state court had erred “in refusing to consider whether the facts relied upon by the railway established as arbitrary and unreasonable the imposition upon it of one-half the cost of the underpass.” Walters at 428, 55 S.Ct. at 494. The Court said the “promotion of public convenience will not justify requiring of a railroad, any more than of others, the expenditure of money, unless it can be shown that a duty to provide the particular convenience rests upon it,” and “when particular individuals are singled out to bear the cost of advancing the public convenience, that imposition must bear some reasonable relation to the evils to be eradicated or the advantages to be secured.” Walters at 427-28, 429, 55 S.Ct. at 494, 495.
The state court had held the statute apportioning one-half of the cost to the railroad valid on its face. The Supreme Court did not rule the statute unconstitutional, but sent the case back to the state court to determine whether the statutory allocation of 50 percent of the cost to the railroad was arbitrary and unreasonable under the circumstances. Walters at 431-32, 433-34, 55 S.Ct. at 496, 497.
As reflected by Walters, the change in judicial attitude toward the railroad’s responsibility for payment is partly attributable to the practical consideration of increased competition from other forms of transportation. After discussing the early days of railroading during which practically all common carrier freight and passenger traffic moved by rail, the court in City of Winston-Salem v. Southern Railway Co., 248 N.C. 637, 105 S.E.2d 37, 47-48 (1958), explained:
“But conditions have changed-
“Under the ordinary competitive conditions now prevailing between the rails and motor transport where, as here, the railroad company derives no direct benefit from the proposed crossing improvement, the imposition on the company of the costs *900of the project may not ordinarily be justified to any degree on the theory that the costs will be absorbed in the rate structure and passed on to the general public. This is so because rail rates, like other competitive price structures, are subject now in a real sense to the economic law of diminishing returns. And by reason of prevailing conditions under which the rails are in a losing competitive fight for business with other modes of transportation, the costs of crossing improvements may not be built into the rate structures and passed on effectively to the shipping public as in former times. Besides, and assuming ar-gnendo that the costs of these improvements might still in some instances be absorbed in railroad rate structures and passed on to the ultimate consumers, even so, there would be an element of basic unfairness in such process where, as here, the company stands to receive no direct benefit from the project, since the costs would fall only on consumers of goods and on passengers moving by rail, in exoneration of the vast volume of commodities and passengers moving by motor and other competitive modes of transportation.”
Walters was reaffirmed in Atchison, T. & S.F. Ry. Co. v. Public Util. Commission, 346 U.S. 346, 74 S.Ct. 92, 98 L.Ed. 51 (1953). In Atchison, the state public utilities commission entered orders, after considering all facts and evidence given by the railroads, requiring them to either enlarge or construct underpasses at grade crossings and allocating 50 percent of the cost of each project to the railroads. The railroads appealed, arguing the costs should be allocated on the basis of benefits alone, and since the railroads would receive little or no benefits, they should be required to pay only a small part of the costs or nothing at all. The Court affirmed the commission’s discretionary allocation of 50 percent of the costs to the railroad, reasoning:
“[T]he improvements were instituted by the State or its subdivisions to meet local transportation needs and further safety and convenience, made necessary by the rapid growth of the communities. In such circumstances, this Court has consistently held that in the exercise of the police power, the cost of such improvements may be allocated all to the railroads.... There is the proper limitation that such allocation of costs must be fair and reasonable. Nashville, C. & St. L. Ry. v. Walters, 294 U.S. 405, 415, 55 S.Ct. 486, 488, 79 L.Ed. 949, and the cases there cited. This was the standard applied by the Commission. It was not an arbitrary exercise of power by the Commission to refuse to allocate costs on the basis of benefits alone. The railroad tracks are in the streets not as a matter of right but by permission from the State or its subdivisions. The presence of these tracks in the streets creates the burden of constructing grade separations in the interest of public safety and convenience. Having brought about the problem, the railroads are in no position to complain because their share in the cost of alleviating it is not based solely on the special benefits accruing to them from the improvements.”
Atchison, 346 U.S. at 352-53, 74 S.Ct. at 96 (emphasis in original; citations omitted).
In this category of taking cases,1 Walters and its progeny have been viewed as “highlighting an evolutionary shift by both courts and legislatures away from mechanical application” of the Court’s earlier decisions. Southern Railway Company v. City of Morristown, 448 F.2d 288, 290 (6th Cir.1971), cert. denied, 405 U.S. 922, 92 S.Ct. 958, 30 L.Ed.2d 792 (1972). Walters and Atchison were grade crossing cases rather than watercourse cases. Nevertheless, because the Supreme Court relied on grade crossing cases to support its decision in Grimwood, and cited Grimwood and Lake Shore as authority for the general rule of railroad liability that it *901altered in Walters, I discern no legal basis for distinguishing between the two types of cases in analyzing a taking challenge. Walters and Atchison present the proper framework for analysis in this case.
These cases comport with more recent decisions of this Court which have refused to mechanically adhere to “the rule of noncom-pensation normally applicable to police-power regulations.” Buegel v. City of Grand Forks, 475 N.W.2d 133, 136 (N.D.1991) (noting exceptions to rule of no compensation). See also Minch v. City of Fargo, 297 N.W.2d 785, 790 (N.D.1980) (“Distinguishing between use of the police power and a compensable damaging may not be easy in certain cases.... [t]he extent of the owner’s loss is inevitably a factor in any attempt to identify an act as either a damaging or a police function.”). They also comport with the recent reemergence by the United States Supreme Court of the principle “ ‘[a] strong public desire to improve the public condition [will not] warrant achieving the desire by a shorter cut than the constitutional way of paying for the change.’ ” Dolan v. City of Tigard, — U.S. -,-, 114 S.Ct. 2309, 2322, 129 L.Ed.2d 304 (1994) (quoting Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 416, 43 S.Ct. 158, 160, 67 L.Ed. 322 (1922)). See also Nollan v. California Coastal Commission, 483 U.S. 825, 841-842, 107 S.Ct. 3141, 3151, 97 L.Ed.2d 677 (1987) (“California is free to advance its ‘comprehensive program,’ if it wishes, by using its power of eminent domain for this ‘public purpose,’ ...; but if it wants an easement across the Nollans’ property, it must pay for it.”).
The decision of the court in City of Gainesville v. Southern Railway Company, 423 F.2d 588 (5th Cir.1970), is particularly instructive. In Gainesville, an ordinance enacted by the city required the railroad to install and maintain entirely at its own expense automatic signaling devices where its main line intersected a city street. The trial court had found the requirement of installing the device was reasonable, but did not consider the reasonableness of the allocation to the railroad of responsibility for 100 percent of the cost. After discussing Walters and Atchison, the court said:
“Southern does not argue that the cost should be allocated according to benefit alone as was argued in Atchison..., but that there should be several considerations, equity, benefit, degree of danger caused by Southern, and what is generally, under comparable circumstances, considered to be reasonable by courts and governmental agencies. It is clear from At-chison, that these are proper considerations. The elements of reasonableness and fairness in the allocation of costs in addition to the reasonableness of the requirement of installing the signalling device itself must be considered by the court.
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“We do not hold that a municipality or a state does not have full power to require a railroad company to bear all the cost for a grade crossing safety device, nor that the Gainesville ordinance is unconstitutional per se because it is an unreasonable and arbitrary exercise by the City of Gaines-ville of its police power, nor that benefit should be the sole measure of the allocation of cost. We find here that the district court did not make a finding as to the reasonableness of the allocation of costs in installing and maintaining the signal devices as to this particular case, a determination which might or might not make the application of the ordinance unconstitutional. Therefore, we conclude that we must remand the case to the district court for a determination as to the reasonableness under all of the circumstances, of the allocation of one hundred percent of the cost to Southern Railway.”
Gainesville at 591 (emphasis in original). See also Morristown; Atchison, T. & S.F. Ry. Co. v. Public Utilities Commission, 190 Colo. 378, 547 P.2d 234, 236 (1976); Southern Railway Company v. City of Knoxville, 223 Tenn. 90, 442 S.W.2d 619, 623 (1968), cert. denied, 396 U.S. 1002, 90 S.Ct. 551, 24 L.Ed.2d 494 (1970).
In this ease, there is no dispute modifications to the drain and to the bridges and culverts are reasonable and necessary. The only dispute is over who must bear the responsibility for payment of the costs to construct the bridges and culverts. The trial *902court ruled N.D.C.C. § 61-16.1-42 required BN Railroad to pay 100 percent of the cost, without further determining whether the statutory allocation of 100 percent of the cost to BN Railroad was fair and reasonable under all of the circumstances. Absent this finding, it is impossible to determine whether requiring BN Railroad to absorb the total cost would violate the Art. I, § 16, N.D. Const., prohibition of taking or damaging private property for public use without just compensation, thereby rendering N.D.C.C. § 61-16.1-42 unconstitutional as applied in this case.
I would reverse and remand to the trial court for a finding, after the parties are allowed to present evidence on the question, whether allocating 100 percent of the cost to BN Railroad is fair and reasonable under all of the circumstances. I would direct the trial court to consider several factors, including equity, benefit, degree of danger or problem caused by the railroad, and what is generally, under comparable circumstances, considered to be reasonable by courts and governmental agencies. See Gainesville at 591.
Instead, the majority summarily dismisses in a footnote Walters and Atchison, the most relevant line of authority in this category of taking cases; relies on taking cases that are in no way analogous to the factual situation before us; and reaches a result directly supported only by antiquated cases which, since 1935, can at best be described as “derelict[s] in the stream of the law.” North Dakota State Board of Pharmacy v. Snyder’s Drug Stores, Inc., 414 U.S. 156, 167, 94 S.Ct. 407, 414, 38 L.Ed.2d 379 (1973).
I respectfully dissent.

. Atchison and Walters were most recently cited by the United States Supreme Court as examples of taking challenges by the majority and minority opinions in Penn Central Transp. Co. v. City of New York, 438 U.S. 104, 126, 148, 98 S.Ct. 2646, 2660, 2671, 57 L.Ed.2d 631 (1978), where the majority held the city’s landmark preservation ordinance which placed certain restrictions on the use of designated property did not constitute a taking or otherwise require exercise of the eminent domain power.