Supreme Court Issues Landmark Ruling In Property Rights Case
Washington, D.C., March 10, 2014 – Karen Harned, executive director of the NFIB Small Business Legal Center, issued the following statement on today’s Supreme Court ruling in Brandt v. United States. The National Federation of Independent Business (NFIB) Small Business Legal Center, and the Owners Council of America, previously filed an amici brief with the Supreme Court to defend private property rights in this case. The brief argued that the United States was improperly attempting to redefine previously recognized property rights out of existence and that this raised serious constitutional problems under the Takings Clause of the U.S. Constitution.
“There was always more to this case than a fight over abandoned railways. Today’s ruling is a victory for small businesses and the opinion has important implications in the larger fight for property rights in America. For many small-business owners—especially for western ranchers and farmers—their property is essential to their livelihood and the success of their business. In our brief we argued that the government shouldn’t be able take away these rights simply by denying they ever existed. By overturning the Tenth Circuit’s decision, the Supreme Court is telling the federal government that it cannot circumvent constitutional protections for private property rights by redefining previously recognized property rights. We are happy that the Supreme Court has ruled in favor of small businesses.”
The case involved the General Railroad Right-of-Way Act of 1875, under which thousands of miles of rights-of-way were established across the United States. The act allowed railroads to acquire easements all over the country in order to lay tracks. These easements were written so that they would revert back to the property owner in the event the railroads ever abandoned the easements. But in 1988, Congress passed a “railbanking” statute which holds that upon abandonment, these easements could be morphed into a public recreational trail, with the landowner receiving no compensation.
In this case Marvin Brandt acquired land in Wyoming that came with a pre-existing railroad easement. In 2001, the railroad, which had long owned the easement, abandoned all claims to the easement. The Brandt family therein obtained complete ownership of the land in question. However, in 2006 the United States government sued for title to the land on the theory that the federal government retained a residual claim to it after the railroad abandoned the easement. Brandt argued that the federal government had no legitimate claim to the abandoned easement and could not take that land without running afoul of the Fifth Amendment’s Takings Clause. The Tenth Circuit ruled in favor of the federal government, holding that the upon abandonment the land reverted to the United States. Today, the Supreme Court reversed that decision—making clear that the Brandt’s acquired all rights in the subject land once the railroad abandoned its easement, and affirming the principle that government cannot redefine previously recognized property rights out of existence.
The NFIB Small Business Legal Center is a 501(c)(3) organization created to protect the rights of America’s small business owners by providing advisory material on legal issues and by ensuring that the voice of small business is heard in the nation’s courts. The National Federation of Independent Business is the nation’s leading small business association, with offices in Washington, D.C. and all 50 state capitals.