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Published: July 5, 2011
Author: Carl Sinderbrand
written with Benjamin Weiland
Realtors, property owners and title insurers have greater security in their documented titles, thanks to a recent decision from the Seventh Circuit Court of Appeals. In Johnson v. Bayfield County, the Seventh Circuit ruled that Bayfield County could not invoke obscure, century-old federal railroad statutes to claim an interest in land acquired by private parties from the railroad more than 30 years ago. Bayfield County attempted to take nine miles of an abandoned railroad line to build a snowmobile and ATV trail. Several families whose properties were bisected by the former railroad line sued to confirm their title and reject the County’s claim.
In the mid-1800s, Congress incentivized westward expansion through land grants to states and railroads. Federal acts in the 1850s and 1860s typically conveyed these lands using the established square mile section grids. Odd-numbered sections were given to the states to transfer for railroad development, while even-numbered sections were granted, patented, or otherwise conveyed to a wide range of settlers and businesses. Congress envisioned that the railroads would sell off unused portions of the odd-numbered sections and then use the proceeds to purchase or condemn lands in the even-numbered sections as necessary to construct their lines. In the 1870s, Congress changed this approach, instead providing for right-of-way easements with reversionary interests either expressly retained by the United States or residing in the owner of the burdened land.
In 1979, the Chicago Northwest Railroad abandoned the Bayfield Branch and sold its interests to the SC Johnson family. The Johnsons donated much of the former right of way to the United States Forest Service, retained a portion of the land and conveyed the rest to neighbors. In the early 2000s, Bayfield County, feeling pressure to develop new motorized recreational trails, developed a theory that the United States had retained an implied reversionary interest in these lands, and that Bayfield County could acquire that interest through the federal railroad abandonment and rails-to-trails statutes. This would have resulted in recreational trails running through residential properties, based on undocumented, unrecorded and implied interests.
The Seventh Circuit Court of Appeals, in an opinion by Judge Posner, rejected Bayfield County’s claim and confirmed title in the private residential owners. The court ruled that the Congressional acts conveying interests in the 1800s did not create implied, undocumented and reversionary interests. The court also ruled, among other things, that when the railroad abandoned its line in 1979, pursuant to federal government authorization, it rightfully conveyed its interest to the Johnson family.
This decision is important because it preserves the expectation that one can rely on title history to determine who has an interest in land. Realtors, title insurers and, most importantly, property owners can rest assured that governments cannot assert implied interests and cannot acquire private property without fulfilling the Constitutional requirement of providing just compensation.
Carl Sinderbrand represented the SC Johnson family in this dispute. For more information about Johnson v. Bayfield County, contact Carl Sinderbrand at 608.260.2472 or csinderbrand@axley.com. The author wishes to thank Benjamin Weiland, a summer clerk at Axley Brynelson, for his assistance.
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