Pub. 10 2015 Issue 1

www.ucls.org 14 Issue 1 2015 / UCLS Foresights cial transactions, such as the disputed rental payments, with respect to any locations where it can be shown that the SF fa - cilities are not spatially situated upon or within the property of UP. Under this holding, the easement and rental agreement may be largely if not wholly void, which would mean that SF holds no valid easement grants protecting substantial portions its pipeline, and no such easements can be granted by UP, if in fact UP holds no interest in the land itself. Moreover, since only a fee title holder can create a valid easement upon or within his land by means of a grant, and no party can grant an easement in land owned by others, the litigants are effectively powerless to rectify the fallacious premise upon which their agreement is founded without the participation of untold numbers of other parties, at least one of those necessary parties being the US it - self. The rights of UP, as viewed by the CCOA, in accord with the relevant decisions of SCOTUS, may very well be limited to the surface, and amount to nothing more than a blanket covering the R/W, with no element of depth, unless it can be proven that fee title to land itself is truly necessary to accomplish the spe - cific mission for which the RR R/W was created. It is noteworthy that if the agreement document had been written to cover all pipelines “within and/or below the R/W”, using purely location - al terminology, no title issue would have arisen, but because the agreement employed the word “property” the presence or absence of title was inescapably implicated, presenting a classic example of the fact that every word used in a contract must be very thoughtfully chosen. To all appearances, the reality of the situation is that the word “property” was improperly used by the parties, in a poor - ly considered and shorthand manner, when documenting their agreement, they really meant that SF was agreeing to pay UP rent for any SF line or lines that were situated under the RR R/W, which in the misguided view of both parties were thus protectively blanketed by the RR R/W. Such an agreement could of course be characterized as a very foolish one on the part of SF on one hand, at least at first glance, since it would arguably appear that SF thereby voluntarily and unnecessarily subjugated itself to UP. On the other hand however, the agreement had the practical effect of shielding SF from the need to deal with any other parties, specifically the fee owners of the land in which the SF lines were installed, as long as those parties remained ignorant of their land rights, so in that respect it was a distinct - ly beneficial arrangement for SF as well as UP. In addition, the implicit deception regarding the title status of the land occu - pied by the RR R/W, which was manifest in the agreement, could have been attacked at any point in time on the grounds that it amounted to a conspiracy between UP and SF, to defraud the owners of the lands underlying the RR R/W, or at least to leverage their ignorance of their land rights, as a way of unjust- ly excluding them from any financial benefit derived from the combined industrial venture. The truth of the matter however, is far more likely to be that the entire land use agreement was simply a product of plain ignorance on the part of both UP and SF, as to the true nature and extent of the title held by UP con - stituting the RR R/W, in which event it was a monumental but innocent blunder. Quite interestingly in this same vein, as noted above, the problematic agreement originated in the 1950s, when the rail - road and pipeline interests were in legal effect unified through close partnership, so it was definitely a mutually beneficial arrangement serving a genuinely common purpose at that time. That close relationship had been severed however, also as previously noted, which had a dual effect, not only turning the parties into adversaries, but also importantly placing them upon distinctly separate corporate platforms, with distinct - ly different objectives, which meant that they were no longer working in unison, as one entity with a common purpose, the great legal significance of which we will soon observe. Through - out the prior litigation, UP had maintained that the title issue was irrelevant, because there was never any controversy over which SF line or lines were subject to the contested agreement, and SF had contractually agreed to pay rent to UP in all of the relevant locations, without any regard to the title held by UP, so there was no need to embark upon an investigation of the nature or quality of any of the title held by UP. In addition, UP could have built a reasonable argument that the use of the word “property” in the agreement was simply a mutual mistake, and thus sought reformation of the agreement to eliminate and re - place that word with words which better defined the location of the SF facilities, in accord with the true intent of the parties. Finding no justification for bypassing the title issue however, the CCOA deemed it necessary to squarely address that issue and proceeded to do so, potentially awakening the many sleeping servient land owners to their opportunity to assault SF for mak- ing unauthorized use of their land. One exceedingly important element in this legal resolution process, at least, was abundantly clear, and that was the fact that all RR R/W created by means of the federal RR R/W grants was intended solely to serve railroad purposes. Defining the full or proper meaning of the phrase “railroad purpose” therefore logically became the second issue of controlling significance to be addressed by the CCOA. Mindful that the federal grants in contention were not merely typical conveyances, they were federal laws, the CCOA reminded the litigants that like all other laws the meaning of such granting language is dictated solely by the will and the intent of Congress at the time the enactment was made. The well documented Congressional intent clear- ly demonstrated that the Act of 1875, and all of the relevant subsequent Acts, provided the railroads with only an exclusive easement running no deeper than the surface, the CCOA found, while observing that the Congressional intent regarding the land rights or property rights conveyed by the earlier Acts were not as clearly defined. Nonetheless, the CCOA concluded, there can be no question that UP held no fee interest in any portions of the RR R/W descending unto UP from the 1875 Act or any later Acts, because “the 1875 Act granted the railroad substantial rights to the surface ... but it did not make the subsurface the RAILROAD RIGHT OF WAY continued from page 13