Legal Briefs

Romanoff Equities, Inc. v. United States

The Framers of our Constitution recognized that the right to own and use property is “the guardian of every other right” and the basis of a free society. Indeed, when designing our system of government, the framers adopted the Lockean view that “preservation of property [is] the end of government, and that for which men enter into society.” In furtherance of these ends, the Constitution sets up a system of “dual sovereignty,” more commonly known as federalism. James Madison explained this concept—and how it would work in conjunction with the separation of powers— in Federalist 51: “a double security arises to the rights of the people” because “in the compound republic of America, the power surrendered by the people is first divided between two distinct governments, and then the portion allotted to each subdivided among distinct and separate departments.” In Romanoff Equities, Inc. v. United States, the Court of Federal Claims (CFC, a special court that deals with monetary claims against the federal government) ignored these foundational principles when it—as a federal court in Washington D.C.—“guessed” as to what common-law property rights a person has in New York. The court declined to use a well-known procedure that allows a federal court to ask a state’s highest court what the state law actually is. Because property rights are primarily a creature of state law, this essentially meant that a federal court was defining state law. The Romanoffs, as predecessors-in-title to a 1932 common-law right-of-way easement, had granted New York Central Railroad the right to “construct, operate and maintain” an elevated viaduct for the purpose of removing trains from pedestrian traffic in New York City. By the 1980s, however, the railroad no longer maintained the structure and, under the terms of the easement, the land and title were to revert to the Romanoff family. But the City of New York—wanting to convert the abandoned railroad viaduct into a recreational area (the High Line) that now includes taco trucks, salsa dancing, stargazing, retail shops, and other activities entirely unrelated to operating a railroad—asked the federal government to invoke the National Trails System Act to convert the easement into a public park, and the federal government agreed. The Romanoffs filed a lawsuit, arguing that converting the railroad right-of-way into a public park was a taking of their property and thus they were owed compensation under the Fifth Amendment. The Justice Department argued, and the CFC eventually agreed, that the government’s conversion of the easement was not a taking because New York property law recognizes an “easement for anything” (a wholly unknown concept in common law), which allows the City to use the property however it likes in perpetuity. The Romanoffs took their case to the U.S. Court of Appeals for the Federal Circuit—a court of national jurisdiction that handles certain special appeals, including from the CFC—asking for a “certification” to the New York Court of Appeals (the state’s highest court) for a proper interpretation of the easement. They argued that New York courts have never recognized an “easement for anything” and federal courts shouldn’t be inferring one. The Federal Circuit’s three-judge panel ignored the Romanoffs’ request to send the question to the state judiciary and instead upheld the CFC’s guess as to how a New York court would construe the easement. The case was then appealed to the full circuit for an en banc hearing—supported by an amicus brief from the Cato Institute—but that petition was denied. Undeterred, the Romanoffs are now asking the Supreme Court to review the case. Cato, this time joined by several other influential amici, has filed a brief arguing that judicial federalism requires certification of novel state property issues to state courts. By failing to certify the question to the New York Court of Appeals, the Federal Circuit undermined certainty and predictability by concluding that the words in the Romanoff conveyance mean something other than what they say. The need for certification is greatest where a court of national jurisdiction considers takings claims based on novel issues of state property law. There are vast differences in how individual states treat property rights, and federal judges in Washington—who (understandably) have little familiarity with this varied jurisprudence—should not be fashioning state law with no basis in state-court precedent.

Read the Full Legal Brief