If CSX Transportation had decided to keep running trains on the tracks that cut through the backyards of homes and businesses in Sarasota, Florida, there's not much the property owners could have done about it, other than buying some earplugs.

After all, the people who owned the land back in 1910 granted right-of-way easements to build the railroad. Trains, whistles, noise, pollution—all part of the deal.

But what if instead of trains, the old rail line would be used by bikers and hikers, repurposed under the federal “Rails to Trails” program?

Seems like an improvement, right? And yet, the landowners stand to pocket a windfall—tens or hundreds of thousands of dollars, courtesy of U.S. taxpayers.

Sometimes the law is a curious thing.

In the past 10 years, the federal government has shelled out at least $160 million in judgments or settlements to compensate landowners whose property abuts old railroads, according to the Treasury Department's Judgment Fund database. The payouts represent an unmitigated losing streak of Fifth Amendment taking cases by Justice Department lawyers.

The suits keep coming. Mark “Thor” Hearne II, a partner at Arent Fox spin-off Larson O'Brien, just filed a new one against the federal government. Perhaps the best-known lawyer specializing in such cases, he's suing on behalf of more than 150 landowners whose property is part of an eight-mile rail corridor that will be used to expand Sarasota's “Legacy Trail.” 

Almost certainly, Hearne will win. The main question is how long it will take and how much it will cost the U.S. Treasury.

“It's crazy for DOJ to contest these cases,” Hearne said. “Why do they keep fighting them?”

I first wrote about Rails-to-Trails litigation for The National Law Journal in 2013. Since then, it hasn't gotten any more rational.

The fact is, the feds have a losing hand.

Rails to Trails seemed like a great idea when Congress without so much as a hearing passed a three-sentence amendment in 1983 that created the program. Unused railroad tracks could be turned into trails—wide and gently banked, perfect for a bike ride or a dog walk or a stroll with a baby. Plus, if the government ever needed the land back, it reserved the right to reclaim it. Any associated costs were supposed to be negligible.

The problem is that much of the land under the country's 272,000 miles of railroad track is privately owned. Its use is covered by right-of-way easements, and guess what? The folks who drafted the agreements 100 years ago didn't say anything about using the property for recreational trails.

Landowners argue the railroads abandoned the tracks, and that the trails represent an all-new taking.

In 1990, the U.S. Supreme Court agreed, though the high court declined to say whether the petitioners, J. Paul and Patricia Preseault, were entitled to compensation.

The U.S. Court of Appeals for the Federal Circuit sitting en banc went on to hold that the trail through the Preseaults' property in Vermont was “an unauthorized invasion of the land” and that the bill for it was “properly laid at the doorstep of the Federal Government.”

Since then, it's been downhill for the Justice Department, which over the years has tried with little success to fight back.

At times, the plaintiffs legal fees (which the government is required to pay when it loses) and interest on the judgments vastly exceed the underlying controversy.

In one recent case, for example, an Iowa city considered converting a railroad into a trail. After nine months, it decided not to pursue the project and released the land.

A local family, the Caquelins, protested that they were entitled to compensation for the nine months that their land was “taken.” The Court of Federal Claims awarded them $900 in 2016.

At this point, the feds could have paid the bill and been done with it. Instead, they kept litigating, arguing that because the Caquelins' land was not physically used for public recreation, the government didn't need to pay them the $900.

I get fighting over principle, but c'mon. The DOJ in 2017 appealed to the Federal Circuit and lost. It then petitioned to have the case heard en banc and was denied. 

According to Hearne, who filed an amicus brief in the case, the total taxpayer tab with attorney fees and costs mushroomed from $900 to $2 million—and that's without accounting for the DOJ lawyers' time.

Hearne's latest case in Sarasota is likely to be exponentially more expensive. The land at issue is valuable, and the property owners also want compensation for building fences or berms to shield their decks and patios and pools from trail traffic. (One property owner, for example, likes to swim in the nude.)

“If you know you're liable, the whole goal should be to resolve the case as quickly as possible,” Hearne said.  On the other hand, he added, “These cases have put my kids through college.”