WASHINGTON, DC – In a major victory for the firm’s clients, Arent Fox LLP announced today that the US Court of Appeals for the Federal Circuit has denied the US Department of Justice’s motion for an en banc rehearing of the court’s unanimous decision, originally issued December 14, 2010.  This has been a closely-followed case involving a group of Arizona ranchers suing the federal government over a federal program to convert railroad lines into recreational trails.  The Federal Circuit’s December 14 decision has already been cited in dozens of other Fifth Amendment cases as a leading precedent in this field of law.

The case, Ladd, et al. v. United States, began in 2006 when the federal Surface Transportation Board (STB) issued an order authorizing a railroad to sell an almost 80 mile-long abandoned railroad easement to be turned into a public recreational trail. The trail was never built, however, and these Arizona ranchers’ land is “now used by illegal aliens and drug smugglers and patrolled by the US Border Patrol.” The federal order affected almost 2,000 acres of land in Arizona.

While the Arizona ranchers would prefer to have their land back so they could fence the property and prevent it from being used as a route for drug smuggling and illegal immigration, federal law does not allow them to challenge the government’s order. Their only recourse was to seek payment for the land taken.

“This land was taken from these Arizona ranchers and families without their consent under the guise of the so-called Trails Act. The least they can expect is to be fairly compensated for what the government has taken. We are grateful that, by this decision, the Federal Circuit has again sent a very clear message that the Fifth Amendment is alive and well and these families will be paid for property the federal government has taken from them, as is required by the Constitution of the United States,” said Arent Fox partner Thor Hearne. Hearne, a nationally known authority in constitutional law and eminent domain litigation, represents these Arizona ranchers and argued their case in the Federal Circuit. “We are very pleased with the court’s decision to sustain its December 14, 2010 decision, which upheld the fundamental right of American citizens under the US Constitution to receive just compensation when their property is taken by the government for public use.”

The US Justice Department had argued that, even though the federal government’s order destroyed these ranchers’ right to their property under Arizona law, the government did not need to pay them because a public trail had not yet been built – and may never be built.

In its December 14, 2010, decision, the Federal Circuit Court of Appeals rejected the Justice Department’s argument. “We reject the government’s present suggestion that the [government’s order] is nothing more than a temporary regulatory hold on the railroad’s authority to abandon its railway,” the court wrote. “Where no trail use agreement is reached, the taking may be temporary. However, physical takings are compensable, even when temporary.” The Federal Circuit continued, “It is irrelevant that no trail use agreement has been reached and that no recreational trail has been established.”

“It is settled law that a Fifth Amendment taking occurs in Rail-to-Trails cases when government action destroys state-defined property rights by converting a railway easement to a recreational trail,” wrote Judge Kimberly A. Moore in December, 2010, for the unanimous appeals court. “A taking occurs when state law reversionary property interests are blocked. The [federal government’s order] is a government action that prevents the landowners from [having] possession of their property unencumbered by the easement.”

“The Federal Circuit has shown it will zealously protect citizens’ Fifth Amendment right to be paid compensation when the government takes land. The court has not been sympathetic to the Justice Department’s ill-founded and technical arguments made in an effort to excuse the federal government from its constitutional obligation,” Hearne said in December when the court issued its opinion.

“This decision denying the Justice Department’s rehearing petition further establishes precedent.  We are hopeful the Justice Department will now turn its attention to fair, cost-efficient and prompt resolution of these and other claims,” Hearne said. “The Federal Circuit remanded the case to the trial court with clear direction to the government to promptly get about the task of fairly compensating these citizens whose land the government has taken.”

Thor Hearne was lead counsel and was joined by Arent Fox associates Meghan Largent and Lindsay Brinton, who worked with him as part of the litigation team representing these Arizona ranchers.

To read the Federal Circuit’s December 14, 2010, opinion in the case, Ladd, et al. v. United States, please click here. 

To read the Federal Circuit’s denial of the government’s rehearing request, please click here.

Arent Fox’s briefs filed with the Federal Circuit may be read by clicking here and here.

To listen to the original oral argument of this case before the Federal Circuit, click here.

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About Arent Fox:
Arent Fox LLP (www.arentfox.com), with offices Washington, DC,  New York, and Los Angeles, is a recognized leader in areas including government relations, intellectual property, real estate, telecommunications, health care, automotive, sports, white collar, international trade, bankruptcy, and complex litigation. With more than 350 lawyers nationwide, Arent Fox has extensive experience in corporate securities, financial restructuring, labor and employment, finance, tax, corporate compliance, and the global business market. The firm represents Fortune 500 companies, government agencies, trade associations, foreign governments and other entities.