Vermont v. Central Vermont Railway

The Vermont legislature enacted a statute in 1827 that authorized owners of littoral land on Lake Champlain to fill the land if necessary to construct wharves. The 1827 statute stated that owners who constructed wharves would forever have exclusive use of those wharves. About 20 years after the legislature enacted the statute, the Vermont Central Railroad obtained a strip of littoral land through condemnation proceedings. In 1874, the legislature enacted a statute specifically allowing railroads to construct wharves. From about 1850 through about 1970, the Vermont Central Railroad and its successor, Central Vermont Railway, Inc. (railway) (defendant), filled littoral land, bought adjacent land, and paid property taxes on the land used as railroad waterfront wharves. In about 1980, the railway sought to sell or lease the land to a real estate developer. The State of Vermont and the local municipality (collectively, the state) filed a declaratory-judgment action to identify the limits on the railway’s authority to convey the land. The trial court found that the railway had fee simple title to the land, subject to the public-trust doctrine. The trial court concluded that the railway could convey the land to anyone if the land was used for a public purpose, including shopping malls, restaurants, and hotels. The railway appealed, and the state cross-appealed.