Pub. 10 2015 Issue 1

15 Issue 1 2015 / UCLS Foresights www.ucls.org property of the railroad” 7 since granting fee title to the subsur - face to any railroad company was clearly deemed to be both unnecessary and inappropriate by Congress in formulating those Acts. Having thus specified that any RR R/W acquisitions made after 1875, by virtue of federal grants, were not within the scope of the land use agreement between the litigants, and therefore required no valuation, the CCOA moved on to eval - uate the rights of UP under the earlier federal grants, which contain no stipulation that the granted RR R/W consists of an easement. Once again, the decisive factor in ascertaining the scope of the title which vested in the railroads under those ear - ly Acts was the intent of Congress in using the phrase “railroad purpose”, the CCOA emphasized. If any profitable endeavor in which any railroad might engage qualifies as an activity serving a railroad purpose, then UP could prevail, but approving such a policy would in legal effect give all railroads the capacity to define what constitutes a railroad purpose on their own terms, leaving that phrase virtually meaningless, and entirely useless as a limitation mechanism, the CCOA recognized. At this key juncture, the CCOA opted to view the restrictive nature of the 1875 Act in the manner of a clarification issued by Congress, rather than a complete reversal of intent on the part of Con- gress. Since every action taken by Congress since 1875 had been restrictive toward railroad rights, the CCOA logically viewed this as a strong indication that Congress had in fact never intend - ed to grant any title in fee simple absolute to the railroads. This position appears to be quite sound, given the fact that it fully accords with the long line of RR R/W cases decided by SCOTUS, leading up to the Brandt decision of 2014, all of which deny the proposition that railroads were ever endowed, by means of any federal grants, with any authority to extract value of any kind from the subsurface beneath any RR R/W. The ultimate question then, to be answered in resolving the title component of this case, is exactly how to define the title held by UP under the early federal Acts, in terms of physical extent in the vertical plane, in a manner which accords with the intended scope of the land use that was envisioned or embod- ied in the early federal RR R/W grants. The CCOA has answered that question by balancing the apparent intent of Congress to endow the railroads with a title sufficient to carry out their basic mission, as a mode of transportation, with the equally appar - ent federal intent to reserve all land rights not truly needed by the railroad companies unto the people of the US. The property rights obtained by the railroads for RR R/W use under the early federal grants, the CCOA held, were more than an easement but less than a grant in fee simple, and in fact it is well settled that a fee title which is less than absolute in many respects can be legally created and conveyed. The railroads acquired a distinct - ly limited fee interest in the relevant portions of the RR R/W, under the early federal grants, the CCOA surmised, noting in so doing that SCOTUS has long approved the limited fee concept, in the specific context of RR R/W, and that the rights thus ac - quired were also limited in duration, being subject to reversion upon falling into a state of permanent disuse, with respect to the specified RR R/W purpose. Such an acquisition, made for any purpose requiring only surface use, carries no rights to make use of the subsurface for profit, the CCOA decided, it car - ries no more than a right to prevent any subsurface activity that would render otherwise useful ground useless by physically un- dermining the surface. Citing numerous respected federal decisions relevant to the matter at hand, the CCOA poignantly illustrated the weak - ness inherent in the position espoused by UP, that any land use beneficial to a railroad company qualifies as a legitimate “rail - road purpose”. As Judge Kussman expressed it “rights-of-way must be used for railroad purposes... the right-of-way ... must be used to construct and operate a railroad ... The rental agree- ment between the parties is a private arrangement that serves each company’s own interest, not the public interest for which the Railroad’s rights-of-way were granted ... Renting out the subsurface to a third party from a different industry for private gain cannot reasonably be considered a railroad purpose.” 8 . Thus the CCOA informed the parties that the only right held by UP extending below the surface of the RR R/W is the well- known and time honored right of subsurface support, in other words, the right to preserve the surface in a useful state or con- dition by barring any underground activities that would damage the surface. Rarely has the legal significance of putting land to use for its intended purpose, being cognizant of the precise le- gal limitations upon that use, and understanding the principle that an expressly specified purpose can control the physical ex - tent of title, been so clearly displayed. Under this ruling of the CCOA, UP does have subsurface rights, but they are narrowly limited to support for the surface, thus only underground activities that harm the surface in a manner which leaves it unsuitable or unsafe for railroad tracks can be prohibited by UP, under the authority vested by any of the federal RR R/W grants. The seemingly insignificant fact that the combatants were once corporate sisters in legal contemplation, as previously outlined herein, when their agreement was initiated, but are now strangers for all legal and contractual purposes, proved to be quite relevant, as can now readily be seen. If there were ever any validity in the premise that the pipeline operation was fundamentally part of the railroad operation, because the railroad drew fuel directly from it during the early decades of the arrangement, that premise was no longer of any assistance to UP, in the eyes of the CCOA. The SF facilities could not be successfully characterized as a “railroad purpose” Judge Kuss- man opined, because “one would have to engage in a terrible distortion of law and logic to find that somehow the railroad ... obtained the rights to the subsurface underneath it’s rights-of- way to do with as it saw fit ... there is nothing ... suggesting that RAILROAD RIGHT OF WAY continued on page 16 7 See page 27. 8 See pages 29 through 34.