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Continuing a string of recent losses for the U.S. Justice Department, a federal claims judge in Washington this week rejected the government’s formula for compensating a group of landowners involved in a property dispute in Florida. U.S. Court of Federal Claims Judge Mary Ellen Coster Williams said in a ruling Monday that the appraisal of the land must take into account the difference in value before a railroad line was built and after a recreational trail was erected. Lawyers with the Justice Department’s Environment and Natural Resources Division had argued that the plaintiffs were owed “incremental” compensation for the difference between the value of the land with a railroad line and the value of the land with a trail. The consolidated case involves 47 landowners who own 51 separate parcels. Property owners include husband-wife combos. The plaintiffs are fee owners of property in Sarasota. The Seaboard Air Line Railway acquired an easement in 1910 to operate a railroad across a 12-mile corridor between the cities of Sarasota and Venice. Williams ruled in November 2009 that the government had taken the Sarasota residents’ property — DOJ lost its liability argument — and declared the landowners must receive compensation. But the plaintiffs and the DOJ disputed how best to measure the amount of money owed. The land dispute in Sarasota County, Fla., is one of the largest pending trail cases in the federal claims court. The railroad began in 2003 the regulatory process of abandoning rail operations. The lead attorney for the landowners, Mark “Thor” Hearne II, an Arent Fox partner, estimated that the government is potentially on the hook for $40 million for the land, interest and litigation expenses. Hearne said DOJ failed to work out a prompt compensation resolution. Instead, he said, DOJ “tried to make a specious argument claiming the government only needed to pay these landowners ‘nominal’ or ‘incremental’ compensation for the property it had taken.” “Judge Williams was not impressed by the Justice Department’s argument,” Hearne said. “I hope the Justice Department will take Judge Williams admonition to heart and now work to see these Florida citizens receive a fair and cost-efficient resolution of their claims.” A Justice Department spokesman, Wyn Hornbuckle, did not immediately provide comment Tuesday afternoon. Williams noted in the court’s ruling that the Justice Department, at the beginning of the compensation evaluation process, agreed with the landowners’ method. The government then changed its position, saying that the “before” value of the land included measuring the value of the property with the railroad line still in place. Williams said DOJ “injects a wholly inappropriate” requirement for measuring the value of the land. The government, Williams said, blocked the abandonment of the land, preventing the landowners from unencumbered use of their property. Mike Scarcella can be contacted at [email protected].

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