PENLAND v. United States

In the United States Court of Federal Claims No. 22-62L (Filed: July 7, 2026) ) CHARLES J. PENLAND, et al., ) ) Plaintiffs, ) ) v. ) THE UNITED STATES, ) ) Defendant. ) ) Mark F. Hearne, II, True North Law, LLC, St. Louis, Missouri, for Plaintiffs. Arthur D. Burger, Jackson & Campbell, P.C., Washington, D.C., for Mark F. Hearne, II. Joseph H. Kim, Natural Resources Section, Energy and Natural Resources Division, United States Department of Justice, Washington, D.C., for Defendant. With him on the briefs was Adam R.F. Gustafson, Acting Assistant Attorney General, Energy and Natural Resources Division. OPINION AND ORDER SOLOMSON, Chief Judge. A well-known proverb warns those who live in a glass house not to throw stones.1 What Plaintiffs did here is worse than that. The proverb assumes a rough parity — two flawed parties, each exposed, the hypocrite merely imprudent for hurling what could be hurled back. That is not what happened here. Plaintiffs did not throw stones from a glass house at another glass house. They stood inside a house made entirely of glass, pointed 1 George Herbert, Jacula Prudentum (1640), reprinted in The English Poems of George Herbert: Together with His Collection of Proverbs Entitled Jacula Prudentum 227 (Longmans, Green & Co. 1891) (“Whose house is of glass must not throw stones at another.”), available at https://perma.cc/Q89R-N9BM. Daniel P. Brown Toms Ex. 4 Ernest C., Jr. and Pamela D. Cloer Toms Ex. 4 Gary M. Delise and Thomas G. Delise Allison Ex. 5 Les A. Foss and Jennifer E. Foss, Henry Ex. 6 Trustees, or their successors in interest, of The Les and Jennifer Foss Living Trust dated December 2, 2021 and any amendments thereto Joen Goodman and William Goodman Price Ex. 7 David and Marie Levine Ripley Ex. 8 Vincent Palumbo, Jr. Allison Ex. 5 Diane M. Scott Ripley Ex. 8 Catherine L. Stone, Trustee, under the Whitted Ex. 9 Catherine L. Stone Trust dated (UDT) August 9, 2011, for the benefit of (FBO) McMinn Ex. 10 the Stone family Cesar R. and Isabel Valdez Clayton Ex. 11 Janet Walczak Ledbetter Ex. 12 All the source deeds contain nearly identical conveyance language: [I]n consideration of the benefits to be by us derived from the construction of its railroad through their premises in said State and County particularly described as follows . . . and of one dollar to them in hand paid, . . . [the grantors] give grant bargain sell and convey to the Hendersonville and Brevard Railway Telegraph and Telephone Company and its successors forever a strip of land of sufficient width upon which to locate construct operate and maintain a standard gauge railroad through said premises as has been marked out by the engineer or engineers of said company and indicated upon the map by him or them and the president of said company placed on file in the office of the clerk of said Henderson County as required by law such a strip as marked out and indicated to be the land hereby conveyed provided that this deed shall be void unless said company shall have 3  constructed a railway through said premises on or before [a certain date]. Provided [other condition(s)]. Def. MSJ at Ex. 5 (Allison deed with partial transcription); see also Pls. Cross-MSJ at 23 (quoting the Wilson deed and asserting that “[a]ll of the other conveyance documents are similar”); ECF No. 68, Oral Argument Transcript (“Tr.”) 15:20-16:3 (Plaintiffs’ counsel agreeing that the source deeds are “in material respects fairly identical”). 2 In 2021, Blue Ridge Southern Railroad (“Blue Ridge”), the original railroad’s successor-in-interest, filed a Verified Notice of Exemption pursuant to 49 C.F.R. § 1152.50 with the Surface Transportation Board (“STB”), seeking authorization to abandon the corridor “to facilitate interim use of the Line as a public recreation trail, consistent with 16 U.S.C. § 1247(d)[,]” the National Trails System Act or “Trails Act.” Am. Compl., Ex. 1 at 5. On April 27, 2021, the STB determined that the abandonment exemption would be effective on May 27, 2021, unless stayed for reasons such as a request for interim trail use/rail banking pursuant to 49 C.F.R. § 1152.29. Def. MSJ at 6. The STB gave Blue Ridge one year to exercise the authority granted and fully abandon the line by filing a notice of consummation. Id. Instead of abandoning the rail line, on June 16, 2021, Blue Ridge and Ecusta Rails2Trails LLC (“Ecusta”) filed a joint Petition for Interim Trail Use and Notification of Trails Use/Railbanking Agreement, notifying the STB that the parties had already entered into an interim trail use agreement and asking the STB to issue a Notice of Interim Trail Use or Abandonment (“NITU”). Am. Compl., Ex. 2 at 2. On June 29, 2021, the STB issued the NITU. Id., Ex. 3 at 11. That same day, the parties filed a notification of the trail use agreement. Def. MSJ at 7 (citing Blue Ridge Southern Railroad, L.L.C. — Abandonment Exemption — In Henderson and Transylvania Counties, N.C., No. AB 1306X (STB June 29, 2021), Doc. ID 302640). On January 19, 2022, Plaintiffs filed a complaint in this Court, alleging that, as owners of the property abutting and underlying the railroad corridor, they suffered a Fifth Amendment taking of their real property interests, without compensation, on the day the NITU was issued. See ECF No. 1 (“Compl.”); Am. Compl. at 2. On June 17, 2025, following the close of discovery, the government filed a motion for summary judgment, 2 Although Plaintiffs rely on the Wilson conveyance in their opening brief, the deed is not part of any of the pertinent chains of title and is thus merely illustrative of the language used in the other source deeds. 4 arguing that the source deeds conveyed a fee simple ownership interest in the railroad corridor to the original railroad, which was then transferred to Ecusta via Blue Ridge, the original railroad’s successor-in-interest. Def. MSJ at 1-2 (“The pertinent title documents are deeds by which the original railroad obtained a fee simple interest in the corridor.”). The government contends that because the original railroad acquired a fee simple interest in the subject properties, Plaintiffs have not, and cannot, establish an ownership interest in the corridor and, therefore, are not entitled to compensation. Id. On August 5, 2025, Plaintiffs filed their response and cross-motion for summary judgment, construing the original railroad’s interest in the railroad corridor as a “right- of-way across [Plaintiffs’] land.” Pls. Cross-MSJ at 8. They argue that “when the railroad abandoned the railway line, [Plaintiffs] held unencumbered title to the fee estate in the land,” which was taken without just compensation by the issuance of the NITU. Id. at 9. On September 4, 2025, the government filed its response and reply. ECF No. 62 (“Def. Reply”). On September 18, 2025, Plaintiffs filed their reply. ECF No. 63 (“Pls. Reply”). On January 12, 2026, this Court held oral argument on the parties’ pending motions, ECF No. 68, following which this Court issued a show cause order to Plaintiffs’ counsel, pursuant to Rule 11 of the Rules of the United States Court of Federal Claims (“RCFC”), to explain why sanctions should not be imposed for his unsupported — and unsupportable — arguments, ECF No. 69. Plaintiffs’ counsel filed his response to that order on February 11, 2026. ECF No. 71. B. Standard of Review RCFC 56(a) provides that the Court “shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” RCFC 56(a). 3 A fact is material if it might “affect the outcome of the suit under the governing law,” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986), and an issue is genuine if it “may reasonably be resolved in favor of either party,” id. at 250. “Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no ‘genuine issue for trial,’” and summary judgment is appropriate. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citing First Nat. Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 289 (1968)). 3 RCFC 56(a) is the same as Federal Rule of Civil Procedure 56(a). 5  When, as here, the parties have cross-moved for summary judgment, “the court must evaluate each motion on its own merits, resolving reasonable inferences against the party whose motion is under consideration.” Silver State Land LLC v. United States, 155 Fed. Cl. 209, 212 (2021) (quoting First Commerce Corp. v. United States, 335 F.3d 1373, 1379 (Fed. Cir. 2003)); see also Lippmann v. United States, 127 Fed. Cl. 238, 244 (2016) (“The [RCFC 56] standard also applies when the Court considers cross-motions for summary judgment.”). In this case, the material facts are not in dispute. Accordingly, the central issue before the Court — whether the source deeds conveyed a fee simple interest in the railroad corridor, or merely an easement — is a purely legal one, thus making this issue particularly amenable for summary judgment. C. Discussion: This Court Grants the Government’s Motion for Summary Judgment The government’s implementation of the Trails Act is subject to the Fifth Amendment’s Takings Clause. “It is settled law that a Fifth Amendment taking occurs in Rails–to–Trails cases when government action destroys state-defined property rights by converting a railway easement to a recreational trail, if trail use is outside the scope of the original railway easement.” Ladd v. United States, 630 F.3d 1015, 1019 (Fed. Cir. 2010) (citing Ellamae Phillips Co. v. United States, 564 F.3d 1367, 1373 (Fed. Cir. 2009)). If the railroad owns the underlying property in fee simple at the time of the alleged taking, however, “another party cannot be owed just compensation for the taking of that land.” Whispell Foreign Cars, Inc. v. United States, 97 Fed. Cl. 324, 330 (2011). “It is axiomatic that only persons with a valid property interest at the time of the taking are entitled to compensation.” Wyatt v. United States, 271 F.3d 1090, 1096 (Fed. Cir. 2001); see also Palmyra Pac. Seafoods, L.L.C. v. United States, 561 F.3d 1361, 1364 (Fed. Cir. 2009) (“[I]n order to have a cause of action for a Fifth Amendment taking, the plaintiff must point to a protectable property interest that is asserted to be the subject of the taking.”). When evaluating a rails-to-trails takings claim, this Court evaluates three factors: (1) who owned the strips of land involved, specifically did the Railroad ... acquire only easements, or did it obtain fee simple estates; 6  (2) if the Railroad acquired only easements, were the terms of the easements limited to use for railroad purposes, or did they include future use as public recreational trails; and (3) even if the grants of the Railroad's easements were broad enough to encompass recreational trails, had these easements terminated prior to the alleged taking so that the property owners at that time held fee simples unencumbered by the easements. Preseault v. United States, 100 F.3d 1525, 1533 (Fed. Cir. 1996) (en banc). In this case, the first question — whether the railroad acquired an easement or fee simple title — is dispositive. If the railroad acquired a fee simple interest in the property, “the court need not address the two remaining questions because the Plaintiffs did not hold any reversionary interest in the property that was taken.” Kent v. United States, 174 Fed. Cl. 684, 689 (2025). State law governs the “property rights of the parties in a rails-to-trails case.” Castillo v. United States, 952 F.3d 1311, 1319 (Fed. Cir. 2020); see also Rogers v. United States, 814 F.3d 1299, 1305 (Fed. Cir. 2015) (“We analyze the property rights of the parties in a rails-to-trails case under the relevant state law.” (citing Preseault, 100 F.3d at 1543)). Because the property in this case is in North Carolina, this Court applies North Carolina law. Plaintiffs have the burden to demonstrate that they own the land at issue. Cienega Gardens v. United States, 331 F.3d 1319, 1328 (Fed. Cir. 2003) (“For any Fifth Amendment takings claim, the complaining party must show it owned a distinct property interest at the time it was allegedly taken[.]”); BHL Props., LLC v. United States, 135 Fed. Cl. 222, 229 (2017) (“[I]t is [plaintiffs’] burden to prove [their] ownership of the land abutting the railway corridor; it is not the government's burden to disprove it.”). 1. Plaintiffs waived their McCotter-related arguments. The government builds its summary judgment argument around the North Carolina Supreme Court’s decision in McCotter v. Barnes, 101 S.E.2d 330 (N.C. 1958), which relied, in part, on a North Carolina statute to find that a deed granted land to a railroad in fee simple. Def. MSJ at 12-13 (citing McCotter, 101 S.E.2d at 334). The relevant statute, now codified as N.C. Gen. Stat. § 39-1, creates a presumption of fee simple conveyance for grants of real estate: 7  Chapter 39. Conveyances. Article 1. Construction and Sufficiency § 39-1. Fee presumed, though word “heirs” omitted. When real estate is conveyed to any person, the same shall be held and construed to be a conveyance in fee, whether the word “heir” is used or not, unless such conveyance in plain and express words shows, or it is plainly intended by the conveyance or some part thereof, that the grantor meant to convey an estate of less dignity. (1879, c. 148; Code, s. 1280; Rev., s. 946; C.S., s. 991.) N.C. Gen. Stat. § 39-1 (2024); see also Def. MSJ at Ex. 13 (N.C. Sess. Laws, ch. 148 (1879), the predecessor statute to N.C. Gen. Stat. § 39-1). 4 The government contends that like the deed in McCotter, “the source deeds [in this case] are clearly conveyances of real estate, as each one states that the grantors grant bargain and sell ‘a strip of land’ and refer to ‘the land hereby conveyed[,]’” and thus “establish the original railroad’s fee simple interest in the disputed land.” Def. MSJ at 11 (quoting Allison deed (Def. MSJ at Ex. 5)). The government also highlights numerous similarities between the McCotter deed and the railroad’s source deeds. Like the conveyances at issue here, the McCotter deed included: (1) a consideration of a small amount of “Two (2.00) Dollars,” (2) the granting clause’s conveyance of land (“a tract or parcel of land”), (3) the land’s precise boundaries to be determined by future action (“to be cut” out of the described tract of 4 N.C. Sess. Laws, ch. 148 (1879) provided: Chapter 148. AN ACT TO PROVIDE THAT ALL CONVEYANCES OF REAL ESTATE SHALL BE CONSTRUED TO BE IN FEE, UNLESS THE CONTRARY SHALL APPEAR FROM THE LANGUAGE OF THE INSTRUMENT. The General Assembly of North Carolina do enact: Section 1. When real estate shall be conveyed to any person the same shall be held and construed to be a conveyance in fee, whether the word “heirs” shall be used or not, unless such conveyance shall, in plain and express words show, or it shall be plainly intended by the conveyance or some part thereof, that the grantor meant to convey an estate of less dignity. 8  land”; “[t]o be located” by the grantee after execution of the deed), (4) identifying the intended railroad use (“There shall be no building other than for railroad use.”), and (5) a time limit for building the railroad (otherwise “the estate hereby conveyed is to cease and determine and the property hereby conveyed is to revert to and become the property of the grantors herein”). Def. MSJ at 13 (quoting McCotter, 101 S.E.2d at 332). All of these features, the government points out, did not deter the McCotter court from finding a conveyance of “an unqualified fee-simple estate,” McCotter, 101 S.E.2d at 334, and should not prevent this Court from finding so here. Def. MSJ at 13. Plaintiffs improperly waited until their reply brief to grapple with the government’s McCotter-centered argument. See Pls. Reply at 13-14. Indeed, McCotter is not so much as mentioned a single time in their 29-page response and cross-motion. Instead, Plaintiffs devote the vast majority of that brief to an explication of supposed “background principle[s] of law that inform[] the interpretation of these conveyances.” See Pls. Cross-MSJ at 16-19 (grantor’s intent); id. at 20-22 (the strip and gore doctrine); id. at 24-25 (railroads and eminent domain). Their brief analysis of N.C. Gen. Stat. § 39-1 is relegated to a single page at the very end of their argument, where they characterize the government’s position as “meritless and frivolous” and posit an alternative reading of the statute — sans supporting North Carolina caselaw — that this Court struggles to even understand. Pls. Cross-MSJ at 32. 5 This Court has previously held that “[a] party’s failure to raise an argument in an opening or responsive brief constitutes waiver.” Sarro & Assocs., Inc. v. United States, 152 Fed. Cl. 44, 58–59 (2021) (finding that a response brief’s “single reference” to prior arguments indicated that plaintiff “all but abandoned” his claim); see also Golden IT, LLC v. United States, 157 Fed. Cl. 680, 695 (2022) (finding that Plaintiff “waived those eight claims” for which it “failed to respond to the government’s counterarguments”); Cap Export, LLC v. Zinus, Inc., 722 F. App’x 1004, 1009 (Fed. Cir. 2018) (quoting Stichting Pensioenfonds ABP v. Countrywide Fin. Corp., 802 F.Supp.2d 1125, 1132 (C.D. Cal. 2011), for 5 Plaintiffs contend that the “statute applies to the construction of estates in land,” but does not apply to servitudes, such as easements. Tr. 17:7-15. But the statute provides a presumption regarding how to interpret a conveyance of real estate in the first place (i.e., in favor of a fee simple transfer), as discussed infra. 9 the proposition that “in most circumstances, failure to respond in an opposition brief to an argument put forward in an opening brief constitutes waiver or abandonment in regard to the uncontested issue”). Reserving an argument for a reply brief will not preserve it because “[i]t is unfair to consider an argument to which the government has been given no opportunity to respond.” United States v. Ford Motor Co., 463 F.3d 1267, 1277 (Fed. Cir. 2006); see also Novosteel SA v. United States, 284 F.3d 1261, 1274 (Fed. Cir. 2002) (“Raising the issue for the first time in a reply brief does not suffice; reply briefs reply to arguments made in the response brief—they do not provide the moving party with a new opportunity to present yet another issue for the court’s consideration.”); Ironclad/EEI v. United States, 78 Fed. Cl. 351, 358 (2007) (noting that “under the law of [the Federal Circuit], arguments not presented in a party’s principal brief to the court are typically deemed to have been waived”); Advanced Powder Sols., Inc. v. United States, 160 Fed. Cl. 575, 581 n.8 (2022) (“[A] reply brief is an entirely inappropriate medium for new arguments.”). Plaintiffs’ failure to address McCotter in their opening brief thus ties this Court’s hands; “[a]s a matter of litigation fairness and procedure,” we cannot entertain their belated attempts to distinguish McCotter from this case. Novosteel SA, 284 F.3d at 1274. In the alternative, as explained below, this Court finds that the government’s reading of the deeds at issue, in light of North Carolina law, is correct — and, on this record at least, it’s not a close call. 2. The government is entitled to summary judgment because Plaintiffs do not demonstrate any disputed material fact and fail to overcome the statutory presumption of a fee simple conveyance. Let us be clear about what Plaintiffs do argue and what they do not. Plaintiffs’ entire opposition to the government’s summary judgment motion is purely legal; they assert that the deeds transferred only an easement, not land in fee simple. Plaintiffs raise no factual dispute about: (1) the acreage or physical boundaries of the railroad's occupation; (2) whether the railroad exceeded any deed description; (3) the identity of any owners or successors; or (4) the language of the conveyances themselves (both sides agree on what the deeds say). Rather, Plaintiffs’ opposition to the government’s motion for summary judgment reduces to this legal argument: “[i]t could not be more explicit and emphatic that [the] predecessors-in-title intended to grant only a right-of-way for a railroad line across their land,” Pls. Cross-MSJ at 23, and that “[w]hen the railroad line 10 was no longer necessary and was abandoned, the right-of-way easement terminated,” id. at 18. Plaintiffs fail, however, to offer a single phrase in the source deeds sufficient to overcome North Carolina’s statutory presumption of a fee simple conveyance. As the government correctly asserts, North Carolina law presumes that conveyances of real estate are in fee simple, absent conflicting provisions in the granting instrument. N.C. Gen. Stat. § 39-1; McCotter, 101 S.E.2d at 334. In Bevirt v. United States, a recent decision from our Court involving some of the same source deeds at issue here, Judge Hadji explained that because the source deeds “all include the hallmarks of a fee simple conveyance,” the Court must “begin[] its analysis with the underlying presumption the grant was a fee simple conveyance.” Bevirt v. United States, 177 Fed. Cl. 275, 282 (2025) (citing McCotter, 101 S.E.2d at 334, and noting that the source deeds “explicitly convey ‘a strip of land’ and reference elsewhere ‘the land hereby conveyed’”), recons. denied, 180 Fed. Cl. 217 (2026). So too, here. The source deeds at issue in this case “give[,] grant[,] bargain[,] sell[,] and convey . . . a strip of land” and refer to “the land hereby conveyed.” Def. MSJ at Exs. 3-12. The undersigned agrees with Judge Hadji: “[s]uch language suggests an unequivocal grant of land, not an easement, and no conflicting provisions contradict this interpretation.” Bevirt, 177 Fed. Cl. at 282. The fact that the deeds recite only nominal consideration, and that the stated purpose of the conveyance was for the location and operation of a railway line, see Def. MSJ at Exs. 3-12, does not indicate a conveyance of a lesser property interest any more than the deed at issue in McCotter. See McCotter, 101 S.E.2d at 332-35 (holding that the “deed conveyed title in fee simple” notwithstanding the deed’s recital of only two dollars in consideration and the clauses either conditioning the conveyances on, or restricting them to, railroad purposes). Like the North Carolina Supreme Court in McCotter, we see no reason to override the statutory presumption of a fee simple conveyance. This Court thus adopts Judge Hadji’s conclusion in full: [B]ecause Plaintiffs fail to provide any support to overcome the presumption of a fee simple conveyance, the Court finds as a matter of law that the Source Deeds granted HBR a fee simple conveyance, to which Plaintiffs retained no reversionary interest. Having failed to establish a property interest in the land at issue, the Court further finds that Plaintiffs have not established the existence of an essential 11  element to their case for which they bear the burden of proof at trial, and thus summary judgment is appropriate. Bevirt, 177 Fed. Cl. at 283 (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986)). In sum, Plaintiffs make many bold claims about North Carolina law, but fail to cite a single source of law that either undermines McCotter, in general, or its applicability to the deeds at issue in particular. McCotter all but dictates a win for the government, and Plaintiffs have provided nothing — persuasive or otherwise — to undermine that conclusion. Given that Plaintiffs raise no dispute of material fact and the law squarely favors the government, the government is entitled to summary judgment. Indeed, as discussed below, Plaintiffs’ many unsupported assertions prompted this Court to issue a show cause order to their counsel to explain why sanctions should not be imposed upon him for substantial Rule 11 violations. II. RULE 11 SANCTIONS Shops selling fragile wares often post a warning to its browsing customers: you break it, you bought it. RCFC 11 carries a litigation analogue, as the Court put it to Plaintiffs’ counsel at oral argument: “You file a brief, you sign it, you own it.” Tr. 7:14- 15. The occasion for that reminder was itself telling. Counsel’s first response to being confronted with the contents of his own summary judgment brief was to disclaim the filing as “the wrong corrected brief” — to set the merchandise back on the shelf, as it were, and walk out of the store. Tr. 6:23 (emphasis added). But that is not a viable strategy for avoiding the consequences of violating Rule 11, which provides that, by signing a filing, an attorney certifies that “after an inquiry reasonable under the circumstances,” its “legal contentions are warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law.” RCFC 11(b)(2). 6 Much of the recent Rule 11 docket, in the federal courts generally, involves a new genre of misconduct: briefs drafted by generative artificial intelligence and filed by lawyers who, not understanding how large language models work, never noticed that the machine had invented the citations. That conduct is sanctionable, and courts have rightly sanctioned it. Repeatedly — to the point that it is surprising that counsel keep 6 The Court notes that Plaintiffs’ counsel never sought to file a second corrected brief or to provide proof to this Court that such a brief even exists somewhere. 12 making the same error. See, e.g., N.Z. v. Fenix Int’l Ltd., 2025 WL 3626155, at *2, *4-*5 (C.D. Cal. Dec. 12, 2025) (imposing a $3,000 sanction against the drafting attorney who “misused AI by failing to verify the validity of the AI-generated material” and a $10,000 sanction against the signing attorney and his firm, jointly and severally, where the firm “did not follow its standard practice of proofing and checking sections or contributions by other firms”). 7 But that Rule 11 failure, at bottom, is one of verification. The offending lawyer at least believed that authority supported his or her position; the fault lies in trusting a tool he or she did not understand and skipping the check that would have exposed the error. What occurred in this case is worse. Plaintiffs’ counsel, Mr. Mark F. (“Thor”) Hearne, II, did not merely (unknowingly) rely on fictional authority. He filed sweeping declarations about what North Carolina law is — in his own voice, over his own signature, and without citing a single North Carolina case that supports any of them. For example, he wrote that “[u]nder North Carolina law the only interest the railroad could acquire was a right-of-way easement.” Pls. Cross-MSJ at 24. He wrote that the contrary suggestion “is not only incredulous [sic], it is a frankly stupid and frivolous argument,” because “[n]o authority would hold these documents conveyed the railroad title to the fee simple estate in the land.” Id. at 23. But the Supreme Court of North Carolina held precisely that, in McCotter v. Barnes, 101 S.E.2d 330 — a binding decision that Mr. Hearne’s brief never cited, named, or distinguished. And in Bevirt v. United States, 177 Fed. Cl. 275, Judge Hadji reached the same conclusion on materially similar instruments — a decision the government had placed on the docket in this case, by notice of supplemental authority, more than a month and “almost ten ECF filings” before counsel filed the brief. Tr. 7:17-23 (discussing ECF No. 52). An assertion of settled law obliges a court to find the settled law. Taking counsel at his word, this Court in preparing for oral argument went looking for the North Carolina authority his brief invoked, and the search came up empty — not because the Court missed something, but because there was nothing to find. When the Court pressed 7 See also Mata v. Avianca, Inc., 678 F. Supp. 3d 443, 448 (S.D.N.Y. 2023) (imposing a $5,000 sanction on attorneys who “abandoned their responsibilities when they submitted non-existent judicial opinions with fake quotes and citations created by the artificial intelligence tool ChatGPT, then continued to stand by the fake opinions after judicial orders called their existence into question”); Lifetime Well LLC v. IBSpot.com Inc., 819 F. Supp. 3d 373, 387 (E.D. Pa. 2026) ($4,000 sanction); OTG New York, Inc. v. OTTOGI Am., Inc., 2025 WL 2671460, at *3 (D.N.J. Sept. 18, 2025) ($3,000 sanction); Fletcher v. Experian Info. Sols., Inc., 168 F.4th 231, 233 (5th Cir. 2026) ($2,500 sanction); Amarsingh v. Frontier Airlines, Inc., 2026 WL 352016, at *7 (10th Cir. Feb. 9, 2026) ($1,000 sanction). 13 the point at argument, Mr. Hearne could not identify a single North Carolina case supporting the assertions this Court flagged. See Tr. 10:23 (“I don’t find it in there.”); Tr. 11:8-9 (“I don’t have that in front of me, Your Honor.”); Tr. 12:23-24 (“I didn’t cite a case under that specific heading.”). He withdrew his North Carolina strip-and-gore argument. Tr. 11:10-23. He agreed that his accusation of frivolousness should be withdrawn. Tr. 7:24–8:2. And he conceded that the one authority he had assured the Court did not exist — a decision of this Court holding that materially identical deeds conveyed property in fee simple — in fact did exist, had been served on him months earlier, and made his “[n]o authority” representation “wrong.” Tr. 6:5-18; 7:17-23. Mr. Hearne’s response, ECF No. 71, to this Court’s order to show cause, ECF No. 69, now offers, for the first time, a few North Carolina decisions. Not one supports the proposition for which it is cited, and none undermines McCotter. Dispatching a court on a wild goose chase — categorically, confidently, and with invective aimed at the party whose position the law in fact supports — is precisely what Rule 11’s certification exists to prevent. A lawyer duped by AI misleads the court unknowingly; what this record reflects is the older variety of Rule 11 violations. Applying the objective standard that governs sanctions pursuant to RCFC 11, this Court concludes that Mr. Hearne violated RCFC 11(b)(2) and the duty of candor that the Rule reinforces. A. Factual and Procedural Background To recap, this is a rails-to-trails Fifth Amendment takings case. Plaintiffs, North Carolina landowners, contend that the United States took their property without compensation through operation of the National Trails System Act, when a railroad corridor crossing their land was converted to trail use. The parties’ cross-motions for summary judgment, ECF Nos. 51 and 61, as explained supra, turn entirely on a single question of state property law: whether the railroad source deeds — substantially similar 1894-95 conveyances, of which the Allison and Wilson instruments are representative — conveyed to the railroad a fee simple estate in a strip of land, or only an easement. If a fee, the railroad’s successor owned the corridor, and Plaintiffs have no compensable property interest. Two North Carolina authorities are dispositive of that question. The first is N.C. Gen. Stat. § 39-1, originally enacted in 1879, which directs that a conveyance of real estate “shall be held and construed to be a conveyance in fee” unless the instrument “in plain and express words shows, or it is plainly intended by the conveyance or some part thereof, that the grantor meant to convey an estate of less 14 dignity.” The second is McCotter, in which the Supreme Court of North Carolina applied § 39-1 to a 1904 deed running to a railroad’s predecessor and held that the deed conveyed “an unqualified fee-simple estate.” 101 S.E.2d at 334. McCotter has never been overruled; the Supreme Court of North Carolina reaffirmed it in Craig v. Southern Ry. Co., 138 S.E.2d 35, 36 (N.C. 1964) (per curiam), and the North Carolina Court of Appeals has applied and distinguished it since, see Crawford v. Wilson, 257 S.E.2d 696, 697 (N.C. Ct. App. 1979); International Paper Co. v. Hufham, 345 S.E.2d 231, 234 (N.C. Ct. App. 1986) (distinguishing McCotter where the deed conveyed no land and predated § 39-1). McCotter is binding North Carolina law. The government’s opening motion relied on N.C. Gen. Stat. § 39-1 and McCotter. Then, in late June 2025, the government also filed a notice of supplemental authority, ECF No. 52, highlighting Judge Hadji’s then-recent decision in Bevirt, 177 Fed. Cl. 275, which applied McCotter to the construction of conveyance instruments, a few of which are at issue here, and concluded that they conveyed a fee simple interest, id. at 282-83. Plaintiffs filed their corrected opening brief on August 5, 2025. ECF No. 61. That brief does not cite McCotter. It does not cite International Paper, the decision on which Plaintiffs’ easement theory now principally rests. It does not acknowledge Judge Hadji’s decision. What it does instead is assert, boldly, that “[n]o authority would hold these documents conveyed the railroad title to the fee simple estate in the land,” and that the government’s contrary argument is “frankly stupid and frivolous.” Pls. Cross-MSJ at 23. Following oral argument, this Court ordered Mr. Hearne to show cause why he should not be sanctioned pursuant to RCFC 11 for four assertions regarding North Carolina law in his opening brief that appeared to this Court to “entirely lack supporting authority.” ECF No. 69 at 1. Those assertions are: 1. “North Carolina public policy strongly disfavors the creation of fee estates in strips or ‘gores’ of land and presumes that strips of land are easements for a specific purpose.” Pls. Cross-MSJ at 20. 2. “Under North Carolina law the only interest the railroad could acquire was a right-of-way easement.” Id. at 24; see also id. at 30 n.12 (“North Carolina is not unique in its construction of railroad conveyances as granting only a right-of- way easement.”). 3. “The government wrongly claims that North Carolina law mandates that any conveyance concerning an interest in real property must be presumed to convey title to the fee simple estate. Simply put[:] [t]he government’s argument 15  is meritless and frivolous. These provisions of North Carolina law do not apply to servitudes such as easements. These provisions concern the construction of conveyances that apply to estates in land.” Id. at 32 (emphasis and citation omitted). 4. “The other features of these conveyances [at issue], [including] the nominal consideration paid and the description by reference to an existing railroad line that had already been surveyed and located by the railroad, suggest that the grantor intended an easement.” Id. at 33. For each assertion, the order to show cause directed Mr. Hearne to indicate whether the brief cites North Carolina authority supporting it and, if not, to supply “the single best North Carolina legal authority” he could locate, together with the precise supporting language. ECF No. 69 at 4. The order further directed counsel to quote, in no more than five sentences and one case citation, the passage of a law review article counsel had invoked during oral argument to support his reading of N.C. Gen. Stat. § 39-1. Id. at 4-5. Mr. Hearne responded on February 11, 2026, joined by separate counsel, Arthur D. Burger, who addressed the question of the governing Rule 11 standard. ECF No. 71. B. RCFC 11 Sanction Standards By presenting a pleading, motion, or other paper to the Court — “whether by signing, filing, submitting, or later advocating it” — an attorney “certifies that to the best of the person’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances,” the filing’s “claims, defenses, and other legal contentions are warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law.” RCFC 11(b)(2). The certification is measured objectively. Rule 11 “functions to assure that parties assert litigation positions that are objectively reasonable at the time of filing”; it “does not require a showing of bad faith” and “does not involve inquiry into a party’s subjective good faith.” Kilopass Tech., Inc. v. Sidense Corp., 738 F.3d 1302, 1313 (Fed. Cir. 2013). The Supreme Court has described Federal Rule of Civil Procedure 11 the same way. Chambers v. NASCO, Inc., 501 U.S. 32, 47 (1991) (Rule 11 “imposes an objective standard of reasonable inquiry which does not mandate a finding of bad faith”). The objective standard “is intended to eliminate any ‘empty-head pure-heart’ justification for patently frivolous arguments.” Fed. R. Civ. P. 11 advisory committee’s note to 1993 amendment. 8 8 “[T]o the extent permitted by this court’s jurisdiction, [the RCFC] must be consistent with the 16  This Court may enforce the Rule 11 certification on its own initiative, after ordering the attorney to show cause, RCFC 11(c)(3), and its determination is reviewed