SAMUEL C. JOHNSON 1988 TRUST v. BAYFIELD COUNTY (June 17, 2011)

In the middle of the 19th century, the federal government wanted to encourage railroading. It created a checkerboard-like pattern of identical square sections on federal land. It assigned the squares alternating odd and even numbers. It gave the odd-numbered sections to the railroads in fee simple. It sold the even-numbered sections. The railroads would be able to sell part of the land they owned but did not need in order to finance their operations and the acquisition of rights in the land they did not own. The Samuel C. Johnson 1988 Trust is the current owner of property in northern Wisconsin that was part of this checkerboard. It owns property in an even-numbered section that its predecessor purchased from the federal government in fee simple in the late-19th century. It also owns property in an odd-numbered section that it purchased from a railroad. Bayfield County thinks it has rights in the now-abandoned railroad right-of-way on the Trust's properties and wants to build a snowmobile trail. The Trust brought suit to quiet title. Judge Crabb (W.D. Wis.) granted summary judgment to the County. The Trust appeals.

In their opinion, Judges Posner, Wood, and Tinder reversed. The Court first addressed its jurisdiction, since the suit seems to arise under state law and there is not complete diversity. Both the plaintiff and defendant rely on federal law for their claimed property rights. Whether viewed from the plaintiff’s perspective or, since it is a type of declaratory judgment case, from the presumed suit by the defendant, the case arises under federal law. On the merits, the Court addressed each section separately. With respect to the even-numbered section, the railroad obtained its right-of-way by condemnation. The Court rejected the County's assertion that it was obtained by statute. Once the railroad abandoned the right-of-way, the Trust became the holder of the full rights to the property. With respect to the odd-numbered section, there was no right-of-way because the railroad owned the property in fee simple. When it conveyed the property to the Trust, it conveyed all rights in the property. This County has no right to build a trail.