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
AND RAYMOND MILLER,
Plaintiffs-Appellants,
v.
UNITED STATES,
Defendant-Appellee.
__________________________
2010-5010
__________________________
Appeal from the United States Court of Federal
Claims in 07-CV-271, Senior Judge Robert H. Hodges, Jr.
ON PETITION FOR PANEL REHEARING AND
REHEARING EN BANC
__________________________
JAMES D. GETTE, Attorney, Environment and Natural
Resources Division, United States Department of Justice,
of Washington, DC, filed a combined petition for panel
rehearing and rehearing en banc for defendant-appellee.
With him on the petition was IGNACIA S. MORENO, Assis-
tant Attorney General.
LADD v. US 2
MARK F. (THOR) HEARNE, II, Arent Fox LLP, of Wash-
ington, DC, filed a response to the petition for plaintiffs-
appellants. With him on the response were MEGHAN S.
LARGENT and LINDSAY S.C. BRINTON.
GREG W. REILLY, Morrison & Foerster LLP, of San
Diego, California, for amicus curiae Rails-To-Trails Con-
servancy. Of counsel on the brief was ANDREA C.
FERSTER, Rails-To-Trails Conservancy, of Washington,
DC.
__________________________
Before RADER, Chief Judge, NEWMAN, LOURIE, BRYSON,
GAJARSA, LINN, DYK, PROST, MOORE, O’MALLEY, and
REYNA, Circuit Judges.
PER CURIAM.
GAJARSA, Circuit Judge, with whom MOORE, Circuit
Judge, joins, dissents from the denial of the petition for
rehearing en banc.
ORDER
A combined petition for panel rehearing and rehear-
ing en banc was filed by Defendant-Appellee, and a re-
sponse thereto was invited by the court and filed by
Plaintiffs-Appellants. The court granted leave to Rails-
To-Trails Conservancy to file a brief amicus curiae.
The petition for panel rehearing was considered by
the panel that heard the appeal, and thereafter the peti-
tion for rehearing en banc, response, and brief amicus
curiae were referred to the circuit judges who are author-
ized to request a poll of whether to rehear the appeal en
banc. A poll was requested, taken, and failed.
3 LADD v. US
Upon consideration thereof,
IT IS ORDERED THAT:
(1) The petition of Defendant-Appellee for panel re-
hearing is denied.
(2) The petition of Defendant-Appellee for rehearing
en banc is denied.
(3) The mandate of the court will issue on June 2,
2011.
FOR THE COURT
May 26, 2011 /s/ Jan Horbaly
Date Jan Horbaly
Clerk
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,
AND RAYMOND MILLER,
Plaintiffs-Appellants,
v.
UNITED STATES,
Defendant-Appellee.
__________________________
2010-5010
__________________________
Appeal from the United States Court of Federal
Claims in case no. 07-CV-271, Senior Judge Robert H.
Hodges, Jr.
GAJARSA, Circuit Judge, with whom MOORE, Circuit
Judge, joins, dissenting from the denial of the petition for
rehearing en banc.
__________________________
I respectfully dissent from this court’s denial to rehear
this case en banc. The refusal allows our precedent in
Caldwell v. United States, 391 F.3d 1226 (Fed. Cir. 2004),
and Barclay v. United States, 443 F.3d 1368 (Fed. Cir.
2006), to stand as the law of this circuit. Thus, we main-
LADD v. US 2
tain and perpetuate an egregious legal error. Our rules
require us to follow precedent, albeit erroneous. Here, we
continue to follow the requirement that the accrual date
for the statute of limitations of the physical taking in
“Rails-to-Trails” Fifth Amendment takings claims is the
date that the Notice of Interim Trail Use or Abandonment
(“NITU”) is issued. Because Caldwell and Barclay failed
to consider the varying outcomes stemming from the
issuance of an NITU, which could result in either a per-
manent, physical taking or a temporary, regulatory
taking, this court should have availed itself of the oppor-
tunity to correct this flawed precedent.
The result in Ladd was required by this court’s prior
precedent in Caldwell and Barclay. Although some
members of this court may have been reluctant to con-
sider this issue en banc because neither party directly
challenged the holdings of those cases, it is clear law that
“‘[w]hen an issue or claim is properly before the court, the
court is not limited to the particular legal theories ad-
vanced by the parties, but rather retains the independent
power to identify and apply the proper construction of
governing law.’” Forshey v. Principi, 284 F.3d 1335, 1357
(Fed. Cir. 2002) (en banc), superseded by statute on other
grounds, Pub. L. No. 107-330, § 402(a), 116 Stat. 2820,
2832 (2002), (quoting Kamen v. Kemper Fin. Servs., Inc.,
500 U.S. 90, 99 (1991)); see also City of Sherrill, New York
v. Oneida Indian Nation of New York, 544 U.S. 197, 214
n.8 (2005) (resolving the “case on considerations not
discretely identified in the parties’ briefs” because the
issue was “inextricably linked to, and . . . thus ‘fairly
included’ within, the questions presented” (citations
omitted)); Pfizer, Inc. v. Teva Pharm. USA, Inc., 518 F.3d
1353, 1359 n.5 (Fed. Cir. 2008) (reaching an issue that
was “a predicate legal issue necessary to a resolution of
the issues before the court”). Thus, despite the reluctance
3 LADD v. US
of some members of this court, the Government’s chal-
lenge of the type of taking that resulted from the issuance
of an NITU in Ladd also indirectly challenged the hold-
ings of Caldwell and Barclay that made the NITU’s
issuance the triggering event for the statute of limitations
in Rails-to-Trails cases.
The purpose of the National Trails Systems Act
(“Trails Act”) “was to preserve unused railroad rights-of-
way by converting them into recreational trails” through
the issuance of an NITU, which “stay[s] railroad aban-
donment during the pendency of trail use.” Barclay, 443
F.3d at 1371. An NITU “is issued after the trail operator
and the railroad indicate their intention to negotiate an
agreement [concerning use of the railroad’s right-of-way,]
but prior to the finalization of [that] agreement.” Cald-
well, 391 F.3d at 1230. If an agreement is reached, the
NITU “extends indefinitely for the duration of recrea-
tional trail use,” but if no agreement is reached, the NITU
“‘automatically converts into an effective . . . notice of
abandonment,’ which permits the rail carrier to ‘abandon
the line entirely.’” Id. (quoting Preseault v. Interstate
Commerce Comm’n, 494 U.S. 1, 7, 7 n.5 (1989)).
The Supreme Court has stated that “the Fifth
Amendment itself provides a basis for drawing a distinc-
tion between physical takings and regulatory takings.”
Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg’l Planning
Agency, 535 U.S. 302, 321 (2002). “The government
effects a physical taking only where it requires the land-
owner to submit to the physical occupation of his land.”
Yee v. City of Escondido, Cal., 503 U.S. 519, 527 (1992)
(second emphasis added); see also Tuthill Ranch, Inc. v.
United States, 381 F.3d 1132, 1136 (Fed. Cir. 2004)
(“[T]he sole question governing physical takings is
whether or not the government has physically occupied
the plaintiff’s property.” (emphasis added)).
LADD v. US 4
Following Caldwell and Barclay, this case held that a
physical taking “occurs when state law reversionary
property interests are blocked.” Ladd v. United States,
630 F.3d 1015, 1023 (Fed. Cir. 2010) (citations omitted).
The issuance of an NITU, however, does not itself auto-
matically result in a physical taking and could instead
only be a temporary, regulatory taking. In fact, there
may never be a physical taking after the NITU issues.
Our precedent, however, assumes that the issuance of an
NITU is a physical taking. In Caldwell, we held that “the
appropriate triggering event for any takings claims under
the Trails Act occurs when the NITU is issued.” 391 F.3d
at 1235. In Barclay, we reiterated this finding by stating
that “we adhere to Caldwell and hold that the issuance of
the original NITU triggers the accrual of the cause of
action.” 443 F.3d at 1378. Takings claims, however,
“accrue on the date when all events have occurred that fix
the alleged liability of the Government and entitle the
plaintiff to institute an action.” Seldovia Native Ass’n,
Inc. v. United States, 144 F.3d 769, 774 (Fed. Cir. 1998)
(internal quotation omitted). Thus, in Rails-to-Trails
cases, the key date for accrual purposes is the date an
agreement for trail use is finalized or the date the right-
of-way is abandoned.
Rails-to-Trails cases can have two different types of
takings: (1) a regulatory taking triggered by the issuance
of the NITU, or (2) a physical taking consummated by the
actual conversion to a trail. We acknowledged in Cald-
well that “the NITU operates as a single trigger to several
possible outcomes. . . . It is not unusual that the precise
nature of the takings claim, whether permanent or tem-
porary, will not be clear at the time it accrues.” 391 F.3d
at 1234. Despite this perceptive statement, Caldwell and
Barclay oversimplify this distinction by ignoring whether
trail use (a permanent, physical taking) or abandonment
5 LADD v. US
(a temporary, regulatory taking) results from the issuance
of an NITU. In both Caldwell, and Barclay, a public trail
was established after the issuance of an NITU, and thus,
a physical taking was effectuated. See Caldwell, 391 F.3d
at 1231–32; Barclay, 443 F.3d at 1372. There, the date
the physical taking claim accrued, and thus the trigger for
the statute of limitations, was the date of the conversion
to trail use. In Ladd, however, no public trail was ever
established, meaning that no physical taking occurred.
The result in Ladd illustrates that it is an erroneous
premise to start the clock on the statute of limitations for
a Rails-to-Trails takings claim anytime an NITU issues.
Where no public trail is established after the issuance of
an NITU, there has been a temporary, regulatory taking
that must be analyzed under Penn Central Transportation
Co. v. City of New York, 438 U.S. 104 (1978), rather than
physical takings law. See Tahoe-Sierra, 535 U.S. at 323
(“Th[e] longstanding distinction between acquisitions of
property for public use, on the one hand, and regulations
prohibiting private uses, on the other, makes it inappro-
priate to treat cases involving physical takings as control-
ling precedents for the evaluation of a claim that there
has been a ‘regulatory taking,’ and vice versa.” (footnote
omitted)).
The takings law of this circuit, as articulated by
Caldwell and Barclay, could have been recalibrated by
rehearing this case en banc, the only method available to
this court to correct its erroneous precedent. Thus, by
failing to grant the petition for rehearing en banc, the
court chooses to allow a plainly flawed precedent to
propagate itself, subjecting parties to an incorrect finding
of a physical taking even when no public trail is estab-
lished. For these reasons, I dissent.